Charms Industries Ltd Directors Report.

TO THE MEMBERS OF CHARMS INDUSTRIES LIMITED

The Directors are pleased to present this 27th Annual Report and the Audited Statement of Accounts for the year ended March 31, 2019.

1. FINANCIAL RESULTS

Particulars For the year ended March 31, 2019 (Rs in lakh) For the year ended March 31, 2018 (Rs in lakh)
Total Income including exceptional items 560.21 406.18
Profit / (Loss) Before Depreciation (5.11) (4.99)
Less : Depreciation 0.33 1.31
Profit / (Loss) Before Tax (5.44) (6.30)
Less : Income Tax - -
Less : Deferred Tax (0.06) -
Profit / (Loss) After Tax (5.38) (6.30)
Other Comprehensive Income Net of Tax
Total Comprehensive Income for the year (5.38) (6.30)

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. DIVIDEND

In view to conserve the resource of the Company, your Directors do not recommend any dividend for the year ended 31st March, 2019.

3. 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.

4. Reserves

The Company has not transferred any amount to Reserves

5. PERFORMANCE

The Company continued its strides in its core business activities of Money Changing as an RBI Registered Authorized Dealer Category- II

6. SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES

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

7. 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

8. 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 Chauhan Managing Director Promoter Executive 6 6
Harsad Shantilal Gandhi Chairman & Director Independent 6 6
Parth Shivkumar Chauhan Director Promoter Non Executive 6 6
Nishit Madhavbhai Rupapara Director Independent 6 6
Nehal Shivkumar Chauhan Director Promoter Non Executive 6 6

b. Retirement by rotation:

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

c. Declaration of Independence

Mr. Harsad S. Gandhi (DIN: 01056779) and Mr. Nishit Mr. 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).

d. 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.

e. 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 Six (6) times on 25th May,2018, 14th August,2018, 16th October, 2018, 01st November,2018, 11thFebruary,2019 and 28th March,2019 in respect of said meetings proper notices were given and proceedings were properly recorded and signed in the Minute Book maintained for the purpose.

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

An extract of Annual Return as at 31st March 2019 pursuant to section 92(3) of the Companies Act, 2013 and forming part of this Report is attached as "Annexure 1" to this Report.

10. 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;

11. 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.

The details of composition of Audit Committee are as follows:

NAME OF THE CATEGORY OF DIRECTORSHIP Position

NUMBER OF MEETINGS

DIRECTORS 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

Terms of reference: 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 the financial statement is correct, sufficient and credible.

- Recommending the appointment, remuneration and terms of appointment of external Auditor. Review and monitor the auditors 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 met Five (4) times on, 25th May,2018, 14th August, 2018, 01st November, 2018 and 11th

February, 2019. 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 THE DIRECTORS CATEGORY OF DIRECTORSHIP Position
Mr. Harsad S. Gandhi Independent Non Executive Chairman
Mr. Nishit M. Rupapara Independent Non Executive Member
Mrs. Nehal S. Chauhan Promoter Non Executive Member

Terms of reference:

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, 1 (one) meeting of the committee was held on 11th February, 2019..

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.

c. STAKEHOLDERS RELATIONSHIP COMMITTEE:

The details of composition of Stakeholders Relationship Committee are as follows:

NAME OF THE DIRECTORS CATEGORY OF DIRECTORSHIP Position
Mr. Harsad S. Gandhi Independent Non Executive Chairman
Mr. Shivkumar R. Chauhan Promoter and Managing Director Member
Mr. Parth Shivkumar Chahun Non Executive Member

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 31st March, 2018 are NIL.

Mr. Shivkumar R. Chauhan is the Compliance Officer of the Company for the above purpose.

Meetings:

The Committee duly met 01 (one) times on 11th February, 2019.

12. INDEPENDENT DIRECTORS MEETING:

The Independent Directors of the Company met during the year on 11th February, 2019 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.

13. Auditors

a. Statutory Auditors:

The present Auditors of the Company M/s. Jigar Shah &Associates, Chartered Accountants, Ahmedabad (FRN.:128263W) Chartered

Accountants, were appointed as Auditors for a period of 5 year(s) at the 26th Annual General Meeting held on 28th September, 2018 to hold office till the conclusion of the 31st Annual General Meeting of the Company to be held in the year 2023.

In accordance with the Companies Amendment Act, 2017, enforced on 7th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.

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.

c. Internal Auditor

The Board of Directors has on the recommendation of Audit Committee, and pursuant to the provision of Section 138 of the Companies Act 2013, in their meeting held on 11th February, 2019 has appointed Mr. Praful N. Shah & Co., Chartered Accountant, as an Internal Auditor of the Company for the financial year 2018-19.

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. Mr. Brajesh Gupta, Company Secretaries had been appointed to issue Secretarial Audit Report for the Period ended on 31st March, 2019.Secretarial Audit Report issued by Mr. Brajesh Gupta, Company

For the period ended on 31st March 2019. Secretarial Audit Report issued by Mr. Brajesh Gupta, Company Secretaries in Form MR-3, attached and marked as Annexure "2", for the period under review, forms part of this report. The said report contains observation or qualification certain observation and qualification which are mentioned here in under.

- The Company has not complied with provision of section 203 of Companies Act, 2013 as there was no full time Company Secretary till the 15th October, 2018.

The Board of Directors of your Company would like to explain on the said observation relating to appointment of Company Secretary that the Board of your company was unable to find suitable candidate for such post and on finding such person the Company appointed Mrs. Rohini Abhishek Chauhan as Company Secretary and Compliance Officer of the Company on 16th October, 2018.

- Non-Compliance of regulation 6(1) SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which stipulates that a listed entity shall appoint a qualified company secretary as the compliance officer, however the company does not appoint the same for a period of 1st April, 2018 to 15th October, 2018 and 20th February, 2019 to 31st March, 2019.

As explained herein above that due to non Appointment of full time Company Secretary, the Company could not appoint Company Secretary as Compliance officer and thereafter on appointment of Mrs. Rohini Abhishek Chauhan as Company Secretary w.e.f. 16th October, 2018, appointed her as Compliance officer and on her resignation on 20th February, 2019, appointed Mr. Dileep Panchal as Co m pa ny Secretary and Compliance officer on 08th May, 2019.

- Non-Compliance of regulation of 31(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 i.e. hundred percent of shareholding of promoter(s) and promoter group should be in Dematerialized form.

The Board noted the fact about Non-Dematerialization of only 0.48 % of the promoters holding and accordingly intimated to the concerned promoters.

The company has received a positive confirmation from the promoters who are holding shares in physical form, to initiate the process of converting their shares in demat form.

- Non-Compliance of regulation 14 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 i.e. every Listed Company shall pay Listing fee as applicable to the recognized stock exchange, in the manner as specified by SEBI or the recognized stock exchange.

The Board of Directors of the Company would like to inform you that the Company is in process of making payment of listing fee for the F.Y.2018-19 further the Company is regular in complying the various clauses and regulations of the Listing Agreement and LODR.

- Non-Compliance of the regulation 46(1)and 46(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which stipulates that a listed entity shall maintain a functional website containing the basis information about listed entity, however the Company does not maintain its website.

The Board of Directors of the Company would like to inform you that due to inadvertent error, the Company failed to renew its website therefore the website was temporary non-functional and the Company has renewed its domain name and updated it .

- Non-compliance of regulation 47 of (Listing Obligations and Disclosure Requirements) Regulations, 2015, i.e. Advertisements in Newspapers.

The Board of Directors of the Company would like to inform you that due to inadvertent, the company fails to publish advertisements in newspaper as per Regulation 47 of SEBI (LODR) Regulation,2015.

14. COMPANY SECRETARY:

- MRS. ROHINI ABHISHEK CHAUHAN

The Board of Directors During the year in their meetings held on 16th October, 2018 has Appointed Mrs. Rohini Abhishek Chauhan as whole time company secretary and Compliance Officer of the company

Mrs. Rohini Abhishek Chauhan has resigned from the post of Company Secretary & Compliance Officer of the Company and her resignation was approved by Mr. Shivkumar Raghunandan Chauhan, Managing Director (DIN-00841729) on 20th February, 2019.

- MR. DILEEP PANCHAL

The Board of Directors in their meetings held on Wednesday, 08th May, 2019 has Appointed Mr. Dileep Panchal as whole time company secretary and Compliance Officer of the company.

15. 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.in/ .

16. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTIN 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.

17. RISK MANAGEMENT:

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

13. COMPANY SECRETARY:

- MRS. ROHINI ABHISHEK CHAUHAN

The Board of Directors During the year in their meetings held on 16th October, 2018 has Appointed Mrs. Rohini Abhishek Chauhan as whole time company secretary and Compliance Officer of the company Mrs. Rohini Abhishek Chauhan has resigned from the post of Company Secretary & Compliance Officer of the Company and her resignation was approved by Mr. Shivkumar Raghunandan Chauhan, Managing Director (DIN-00841729) on 20th February, 2019.

- MR. DILEEP PANCHAL

The Board of Directors in their meetings held on Wednesday, 08th May, 2019 has Appointed Mr. Dileep Panchal as whole time company secretary and Compliance Officer of the company.

14. 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.in/ .

15. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTIN 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.

16. 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.

17. CORPORATE GOVERNANCE:

As per Regulation 15(2) of SEBI (Listing Obligation and Disclosures requirement) Regulation, 2015, Report on Corporate Governance is not applicable on the Company as the Company is not having the paid up share capital exceeding Rs. 10 crores and Net worth is exceeding Rs. 25 crores.

18. 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.

19. 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.

20. 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.

21. 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 "3" forming part of this Report.

22. LISTING

The Equity Shares of the Company are listed on Bombay Stock Exchange. The company yet to pay annual listing fees to the Stock Exchange for the year 2019-20, further the Company is regular in compliances of various clauses and regulations of the Listing Agreement and/or LODR.

23. 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- "4". 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.

24. 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.

25. 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 r transactions with any related parties which could be considered material in accordance with the policy of the Co m p a n y d u r i ng 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.

26. 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.

27. 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

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

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

29. 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

30. 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: 12th August, 2019