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Charms Industries Ltd.

BSE: 531327 Sector: Financials
NSE: N.A. ISIN Code: INE442C01012
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VOLUME 450
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P/E
Mkt Cap.(Rs cr) 1
Buy Price 1.72
Buy Qty 550.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1.72
CLOSE 1.81
VOLUME 450
52-Week high 5.17
52-Week low 1.72
P/E
Mkt Cap.(Rs cr) 1
Buy Price 1.72
Buy Qty 550.00
Sell Price 0.00
Sell Qty 0.00

Charms Industries Ltd. (CHARMSINDS) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 25th Annual Report ofyour Company together with the Audited Statements of Accounts for the financial year ended31st March 2017.

I. FINANCIAL RESULTS:

The financial performance of the Company for the year ended 31st March 2017is summarized below:

(In Rupees)

Particulars Year ending on 31st March 2017 Year ending on 31st March 2016
Sales 30260628 22637084
Other Income 124352 40640
Total Income 30384980 22677724
Less: Expenditure 31426475 23569791
Profit/Loss before interest depreciation Exceptional items and tax (1041495) (892067)
Less: Interest - -
Less: Depreciation & Amortization cost 16024 180464
Less: Exceptional items 6329618 2603775
Profit/ (Loss) before Tax (7387137) (3676306)
Less: Tax Expenses - -
Profit/ (Loss) after Tax (7387137) (3676306)

II. OVERVIEW OF COMPANY'S FINANCIAL PERFORMANCE:

The revenue of your Company for the year 2016-17 is Rs. 302.60 Lacs however there isloss of Rs.73.87 Lacs. In comparison to last year's revenue figures the current yearrevenue has increased and your Directors look forward to improve the financial position ofthe Company.

III. DIVIDEND:

Since the Company has incurred loss in the Financial Year 2016-17 hence no dividend isdeclared by the Company.

IV. CHANGE IN THE NATURE OF THE BUSINESS:

During the year there is no change in the nature of the business of the Company.

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

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

VI. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any Subsidiary Joint venture or Associate Company.

VII. PUBLIC DEPOSITS:

During the year under review the Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014 (including any statutory modification(s) orre-enactment(s) for the time being in force). Hence the requirement for furnishing thedetails of deposits which are not in compliance with Chapter V of the Act is notapplicable.

VIII. MATERIAL CHANGES AND COMMITMENT:

No material changes and commitments affecting the financial position of the Companyoccurred between the ends of the financial year to which this financial statement relateon the date of this report.

IX. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:

The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the period under review no material orserious observation has been received from the Internal Auditors of the Company forinefficiency or inadequacy of such controls

X. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL:

There are no significant material orders passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations in future.

XI. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The company has given loans covered under the provisions of section 186 of theCompanies Act 2013 during the financial period under review (Please Refer note no.9 ofthe financial statements).

XII. RELATED PARTY TRANSACTIONS:

During the year no contracts or arrangements were made with related parties fallingunder the purview of Section 188 of the Companies Act 2013.

There are no materially significant related party transactions made by the company withPromoters Key Managerial Personnel or other designated persons which may have potentialconflict with interest of the company at large.

XIII. REGISTRAR AND SHARE TRANSFER AGENT OF THE COMPANY

The Board of Directors of the company at their meeting held on 26th May2016 approved the appointment of M/S Bigshare Services Private Limited in place of M/sSharepro (India) Private Limited. The Bigshare Services Private Limited acting as CommonShare Registry of the Company w.e.f 01st July 2016.

XIV. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:

1. PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNING 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 developmentor import substitution : None

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

a) the details of technology imported : None

b) the year of import : N.A.

c) whether the technology been fully absorbed : N.A.

d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof : N.A.

iv. the expenditure incurred on Research and Development : Nil

C. FOREIGN EXCHANGE EARNING & OUTGO :

i) Foreign Exchange Earning: NIL

ii) Foreign Exchange Outgo : NIL

XV. DIRECTORS AND KEY MANAGERIAL PERSONNEL

[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 4 4
HARSAD SHANTILAL GANDHI Chairman & Director Independent 4 4
DAHYABHAI BHAVANJIBHAI SACHANIA * Director Non- Independent 4 -
PARTH SHIVKUMAR CHAUHAN# Director Non-Executive 4 2
NISHIT MADHAVBHAI RUPAPARA Director Independent 4 2
NEHAL SHIVKUMAR CHAUHAN Director Non-Executive 4 3

*Mr. Dahyabhai Bhavanjibhai Sachania ceased to be the director of the Company witheffect from 26/07/2016.

# Mr. Parth Shivkumar Chauhan was appointed as a director of the Company w.e.f.02/09/2016.

[B] Retirement by rotation:

Mr. Parth Shivkumar Chauhan (DIN: 07571829) is liable to retire by rotation at theensuing AGM pursuant to the provisions of Section 152 of the Companies Act 2013 read withthe Companies (Appointment and Qualification of Directors) Rules 2014 and the Articles ofAssociation of Company and being eligible have offered himself for reappointment.Appropriate resolutions for the reappointment are being placed for your approval at theensuing AGM. The brief resume of the Directors and other related information has beendetailed in the Notice convening the 25th Annual General Meeting of yourCompany.

[C] Declaration of Independence:

Mr. Harsad S. Gandhi (DIN: 01056779) and Mr. Nishit M. Rupapara (DIN: 02859031) are theexisting Independent Directors the Company and the Company has received declarations fromall the Independent Directors confirming that they meet the criteria of independence asprescribed under the provisions of the Companies Act 2013 read with the Schedules andRules issued thereunder as well as Regulation 16(1)(b) of Listing Regulations (includingany statutory modification(s) or re-enactment(s) for the time being in force).

[D] Appointment

Appointment of Mr. Parth S. Chauhan as a director of the Company:

During the year under review in accordance with the provisions of Section 149152 and161 of the Companies Act 2013 read with the Articles of Association of the Company Mr.Parth S. Chauhan (DIN: 07571829) was appointed as a Director by the members of the Companyin the 24th Annual General Meeting held on 02nd September 2016 andwhose period of office shall be liable to retire by rotation.

The relevant details including profile of Mr. Parth S. Chauhan is included separatelyin the Notice calling the 25th Annual General Meeting of the Shareholders.

[E] Cessation during the year:

Mr. Dahyabhai Bhavanjibhai Sachania (DIN: 02468095) has resigned from thedirectorship of the Company w.e.f. 26.07.16.

[F] Evaluation of Board's Performance:

Pursuant to the provisions of the Companies Act 2013 read with the Rules issuedthereunder and the Listing Regulations (including any statutory modification(s) orre-enactment(s) for the time being in force) the process for evaluation of the annualperformance of the Directors/ Board/ Committees was carried out.

[G] NUMBER OF MEETINGS OF THE BOARD

Regular meetings of the Board are held to discuss and decide on various businesspolicies strategies financial matters and other businesses.

During the year under review the Board duly met Four (4) times on 26th May2016 26th July 2016 08th November 2016 and 03rdFebruary 2017 in respect of said meetings proper notices were given and proceedings wereproperly recorded and signed in the Minute Book maintained for the purpose.

XVI. DIRECTOR'S RESPONSIBILITY STATEMENT:

Pursuant to Section 134 (5) of the Companies Act 2013 (including any statutorymodification(s) or re-enactment(s) for the time being in force) the Directors of ourCompany confirm that:

a) In the preparation of the annual accounts for the financial year ended 31stMarch 2017 the applicable Accounting Standards and Schedule III of the Companies Act2013 (including any statutory modification(s) or re-enactment(s) for the time being inforce) have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of your Company as at 31stMarch 2017 and of the profit and loss of the Company for the financial year ended 31stMarch 2017;

c) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 (includingany statutory modification(s) or re-enactment(s) for the time being in force) forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

d) The directors had prepared the annual accounts on a going concern basis;

e) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively;

f) The directors had devised proper system to ensure compliance with the provisionsof all applicable laws and that such system were adequate and operating effectively.

XVII. DISCLOSURE OF VARIOUS COMMITTEES OF BOARD OF DIRECTORS:

[A] AUDIT COMMITTEE:

The Audit Committee of Directors was constituted pursuant to the provisions of Section177 of the Companies Act 2013. The composition of the Audit Committee is in conformitywith the provisions of the said section.

Composition:

The details of composition of Audit Committee are as follows:

NAME OF THE DIRECTORS CATEGORY OF DIRECTORSHIP REMARKS NUMBER OF MEETINGS
HELD ATTENDED
Mr. Harsad S. Gandhi Independent Non Executive Chairman 4 4
Mr. Nishit M. Rupapara Independent Non Executive Member 4 2
Mr. Shivkumar R. Chauhan Promoter Member 4 4

Terms of reference:

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

- Reviewing of the Company's financial reporting process and the disclosure of itsfinancial information to ensure that the financial statement is correct sufficient andcredible.

- Recommending the appointment remuneration and terms of appointment of externalAuditor.

- Review and monitor the auditor's independence and performance and effectiveness ofaudit process.

- Approval or any subsequent modification of transactions of the company with relatedparties

- 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 andQuarterly 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) meetings of the Committee were held on 26/05/201626/07/2016 08/11/2016 and 03/02/2017. The necessary quorum was present at the Meetings

[B] NOMINATION AND REMUNERATION COMMITTEE:

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

Composition

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

NAME OF THE DIRECTORS CATEGORY OF DIRECTORSHIP REMARKS
Mr. Harsad S. Gandhi Independent Non Executive Chairman
Mr. Nishit M. Rupapara Independent Non Executive Member
Mrs. Nehal S. Chauhan Promoter 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 attributesand 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 andSenior 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 26/07/2016.

The Board has on the recommendation of Nomination and Remuneration Committee framed apolicy on director's appointment and remuneration of Directors including criteria fordetermining qualification positive attributes independence of directors and remunerationfor directors Key Managerial Personnel and other employees. The policy is annexed to thisreport as

"Annexure-A"

[C] STAKEHOLDERS RELATIONSHIP COMMITTEE: Composition:

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

NAME OF THE DIRECTORS CATEGORY OF DIRECTORSHIP REMARKS
Mr. Harsad S. Gandhi Independent Non Executive Chairman
Mr. Shivkumar R. Chauhan Promoter Member
# Mr. Parth Shivkumar Chahun Non Executive Member

# Mr. Parth Shivkumar Chauhan was appointed as a director of the Company w.e.f.02/09/2016.

Details of Investor's grievances/ Complaints:

The Company has not received any complaints during the year. The pending complaints ofthe Shareholders/Investors registered with SEBI at the end of the current financial yearended on 31st March 2017 are NIL.

Compliance Officer :

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

Meetings

The Committee duly met 01 (one) times on 20th june 2016.`

XVIII. AUDITORS:

[A] Appointment of Statutory Auditors:

Pursuant to the provisions of Section 139 of the Companies Act 2013 read withapplicable Rules the term of office of M/s. Praful N Shah & Co. CharteredAccountants (Firm Registration No. 108057W) as Statutory Auditors of the Company shallcome to an end at the conclusion of the forthcoming Annual General Meeting of the Company.The Board of Directors places on record its appreciation for the services rendered by M/sPraful N Shah & Co Chartered Accountants Ahmedabad as Statutory Auditors of theCompany. Subject to the approval of the members the Board of Directors has recommendedthe appointment of M/s. B. S. Rajput & Associates. Chartered AccountantsAhmedabad (Firm Registration No. 119760W ) as the Statutory Auditors of the Companypursuant to Section 139 of the Companies Act 2013. The Company has received letter fromthem to the effect that their appointment if made would be within the limits prescribedunder Section 141(3) (g) of the Companies Act 2013 and that they are not disqualifiedfrom appointment.

[B] Cost Auditor:

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

[C] Internal Auditor

The Board of Directors has on the recommendation of Audit Committee and pursuant tothe provision of Section 138 of the Companies Act 2013 in their meeting held on 26thMay 2016 has appointed Mr. Rakesh Parihar & Associates Chartered Accountantas an Internal Auditor of the Company for the financial year 2016-17.

[D] Secretarial Auditor:

Provisions of Section 204 read with Section 134(3) of the Companies Act 2013 mandatesto obtain Secretarial Audit Report from Practicing Company Secretary. M/s KhandelwalDevesh & Associates Company Secretaries had been appointed to issue Secretarial AuditReport for the period ended on 31st March 2017.

Secretarial Audit Report issued by M/s Khandelwal Devesh & Associates CompanySecretaries in Form MR-3 attached and marked as Annexure "B" forthe period under review forms part of this report. The said report contains observationor qualification certain observation and qualification which are mentioned here in under.

• Non-appointment of Company Secretary

The Board of Directors of your Company would like to explain on the said observationrelating to appointment of Company Secretary that the Board of your company shall appointcompany secretary as soon as they find a proper responsible candidate for such post.

Non filing of DIR-12

The Company missed to file DIR-12 relating to the resignation of Dahyabhai BhavanjibhaiSachania as Director with the MCA within the stipulated time period and such non-filingwas not intentional. Further the Company is in process to file the necessary form on MCAportal.

Qualification for non compliance of hundred percent of shareholding of promoter(s) andpromoter group in Dematerialized form.

The Board noted the fact about the Non-Dematerialisation of only 0.12% of thePromoters' Share holding and accordingly intimated to the concerned Promoters. The Companyhas received a positive confirmation from the promoters who are holding shares in Physicalform to initiate the process of converting their shares in Demat form.

Non- Payment of Listing fee

The Board of Directors of the Company would like to inform you that the Company is inprocess of making payment of Listing fee for the F.Y.2017-18 further the Company isregular in complying the various clauses and regulations of the Listing Agreement andLODR.

XIX. EXTRACT OF ANNUAL RETURN:

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in Annexure"C" and is attached to this Report.

XX. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has established vigil mechanism and framed whistle blower policy forDirectors and employees to report concerns about unethical behavior actual or suspectedfraud or violation of Company's Code of Conduct or Ethics Policy. Whistle

Blower Policy is disclosed on the website of the Company at www.charmsindustries.in

XXI. RISK MANAGEMENT:

The Company does not have any Risk Management Policy or any statement concerningdevelopment and implementation of risk management policy of the company as the elements ofrisk threatening the Company's existence are very minimal.

XXII. 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 theCompany is not having the paid up share capital exceeding Rs. 10 crores and Net worth isexceeding Rs. 25 crores.

XXIII. CORPORATE SOCIAL RESPONSIBILITY (CSR):

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

XXIV. STATEMENT OF FORMAL ANNUAL EVALUATION

Nomination and Remuneration Committee annually evaluates the performance of individualDirectors Committees and of the Board as a whole in accordance with the formal systemadopted by it. Further the Board also regularly in their meetings held for variouspurposes evaluates the performance of all the Directors committees and the Board as awhole. The Board considers the recommendation made by Nomination and RemunerationCommittee in regard to the evaluation of board members and also tries to discharge itsduties more effectively. Each Board member's contribution their participation wasevaluated and the domain knowledge they bring. They also evaluated the manner in which theinformation flows between the Board and the Management and the manner in which the boardpapers and other documents are prepared and furnished.

XXV. ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company has placed an adequate Internal Financial Controls with reference toFinancial Statements. The Board has inter alia reviewed the adequacy and effectiveness ofthe Company's internal financial controls relating to its financial statements.

During the year such Controls were tested and no reportable material weakness wasobserved.

XXVI. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:

The Management's Discussion and Analysis Report for the year under review asstipulated under Regulation 34(2)(e) of the Listing Regulations is given as an annexure tothis report.

XXVII. LISTING

The Equity Shares of the Company are listed on Bombay Stock Exchange. The company yetto pay annual listingfees to the Stock Exchange for the year 2017-18 further the Companyis regular in compliances of variousclauses and regulations of the Listing Agreementand/or LODR

XXVIII. PARTICULARS REGARDING EMPLOYEES:

The information required under Section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is provided in the Report and marked as Annexure-"D". No employee of the Companyof the Company was in receipt of the remuneration exceeding the limits prescribed in therule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.

XXIX. GENERAL:

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

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

XXX. APPRECIATION:

Your Directors wish to convey their gratitude and place on record their appreciationfor all the employees at all levels for their hard work solidarity cooperation anddedication during the year.

Your Directors sincerely convey their appreciation to customers shareholders vendorsbankers business associates regulatory and government authorities for their continuedsupport.

For and on behalf of the Board
Harsad S. Gandhi
Date: 11/08/2017 Chairman & Director
Place: Ahmedabad (DIN: 01056779)