TO THE MEMBERS OF CHARMS INDUSTRIES LIMITED
The Directors are pleased to present this 26th Annual Report and the Audited Statementof Accounts for the year ended March 31 2018.
1. FINANCIAL RESULTS
|Particulats ||For the year ended March 31 2018 ||For the year ended March 31 2017 |
| ||(Rs in lakh) ||(Rs in lakh) |
|Total Income including exceptional items ||40618448 ||30384980 |
|Profit / (Loss) Before ||(498861) ||(1041495) |
|Depreciation || || |
|Less : Depreciation ||131685 ||16024 |
|Profit / (Loss) Before ||(630546) ||(7387137) |
|Tax || || |
|Less : Income Tax ||- ||- |
|Less : Deferred Tax ||- ||- |
|Profit / (Loss) After Tax ||(630546) ||(7387137) |
|Other Comprehensive ||- ||- |
|Income || || |
|Net of Tax || || |
|Total Comprehensive ||- ||- |
|Income || || |
|for the year || || |
The Financial Statements of the Company are prepared in accordance with IndianAccounting Standards (IND AS) including the Rules notified under the relevant provisionsof the Companies Act 2013 form part of the Annual Report and Accounts. The Company hasadopted IND AS w.e.f. 01.04.2017 the date from which the said standards are mandatorilyapplicable and accordingly has changed number of Accounting Policies as detailed in"Significant Accounting Policies" forming part of Financial Statements for F.Y.2017-18 in line with the applicable IND AS. Figures for F.Y. 2016-17 has been restated asper IND AS and therefore may not be comparable with Financials for F.Y. 2016-17 approvedby the Directors and disclosed in the Financial Statements of the previous year.
In view to conserve the resource of the Company your Directors do not recommend anydividend for the year ended 31st March 2018.
3. 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.
The Company has not transferred any amount to Reserves
The Company continued its strides in its core business activities of Money Changing asan 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 thenature of business activities of the Company during the year under review.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL
The board consist of adequate number of director as per the Companies act 2013 SEBIRegulations 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 ||5 ||5 |
|Harsad Shantilal Gandhi ||Chairman & Director ||Independent ||5 ||5 |
|Parth Shivkumar Chauhan ||Director ||Promoter Non- Executive ||5 ||5 |
|Nishit Madhavbhai Rupapara ||Director ||Independent ||5 ||4 |
|Nehal Shivkumar Chauhan ||Director ||Promoter Non- Executive ||5 ||5 |
b. Retirement by rotation:
In accordance with the provisions of the Articles of Association of the Company andCompanies Act 2013 Mr. Mr. Shivkumar Raghunandan Chauhan (DIN- 00841729) retires byrotation and being eligible have offered herself for reappointment.
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 there under 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. Evaluation of Board's Performance
Pursuant to provisions of the Companies Act and the Listing Regulations the Board hascarried out the annual performance evaluation of its own performance performance of theChairman the Committees and independent Directors without participation of the relevantDirector. The Nomination and Remuneration Committee of the Board continuously evaluatesthe performance of the Board and provides feedback to the Chairman of the Board. Theindependent directors had a separate meeting without the presence of any non independentdirectors and management and considered and evaluated the Board's performance performanceof the Chairman and other non independent directors and shared their views with theChairman. The Board had also separately evaluated the performance of the Committees andindependent 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 businesspolicies strategies financial matters and other businesses. During the year the Boardduly met Five (5) times on 22nd May 2017 11th August 2017 14thSeptember 2017 14th December 2017 and 12th February 2018 in respect of saidmeetings proper notices were given and proceedings were properly recorded and signed inthe 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 2018 forming part of this Report isattached 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 standardshad been followed along with proper explanation relating to material departures if any;
ii) that the Directors had 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 the Company at the end of thefinancial year and of the profit of the Company for that period;
iii) that the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe 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 thecompany and that such internal financial controls are adequate and were operatingeffectively; and
vi) the Directors had devised proper systems to ensure compliance with the provisionsof 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 Section177 of the Companies Act 2013. The composition of the Audit Committee is in conformitywith the provisions of the said section.
The details of composition of Audit Committee are as follows:
|NAME OF THE DIRECTORS ||CATEGORY OF DIRECTORSHIP ||Position ||NUMBER OF MEETINGS |
| || || ||HELD ||ATTENDED |
|Mr. Harsad S. Gandhi ||Independent and Non Executive ||Chairman ||5 ||5 |
|Mr. Nishit M. Rupapara ||Independent and Non Executive ||Member ||5 ||4 |
|Mr. Shivkumar R. Chauhan ||Promoter and Managing Director ||Member ||5 ||5 |
|z || || || || |
pursuant to section 92(3) of the Companies Act 2013 and
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 ofexternal Auditor.
Review and monitor the auditor's independence and performance and effectivenessof audit process.
Approval or any subsequent modification of transactions of the company withrelated 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 relatedmatters.
Reviewing with management the Annual financial statements and half yearly andQuarterly financial results before submission to the Board. - Reviewing periodically theadequacy of the internal control system.
Discussions with Internal Auditor on any significant findings and follow upthere on.
During the met Five (5) times on 22nd May 2017 11th August 201714th September 2017 14th December 2017 and 12thFebruary 2018 .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.
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 qualificationspositiveattributes 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 Personneland 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 12th February 2018. TheBoard has on the recommendation of Nomination and Remuneration Committee framed a policyon director's appointment and remuneration of Directors including criteria for determiningqualification positive attributes independence of directors and remuneration fordirectors Key Managerial Personnel and other employees. The policy is annexed to thisreport as "Annexure-2"
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 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 2018 are NIL.
Mr. Shivkumar R. Chauhan is the Compliance Officer of the Company for the abovepurpose.
The Committee duly met two times on 26.05.2017 & 22.09.2017.
a. Appointment of Statutory Auditors:
M/s. B. S. Rajput & Associates. Chartered Accountants Ahmedabad (FirmRegistration No. 119760W ) has tendered their resignation to discontinue as the StatutoryAuditor of the Company from the financial year 2018 - 2019 and the same has been approvedby the board of Director in their meeting held on 14th August2018.
Hence in order to fill up the casual vacancy the Company the board recommends toappointed M/s. Jigar Shah & Associates (New Auditor) (FRN: 128263W) subject to theapproval of the members as the Statutory Auditors of the Company pursuant to Section 139of the Companies Act 2013. The Company has received letter from them to the effect thattheir appointment if made would be within the limits prescribed under Section 141 of theCompanies Act 2013 and that they are not disqualified from 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 22ndMay 2018 has appointed Mr. Rakesh Parihar & Associates Chartered Accountant as anInternal Auditor of the Company for the financial year 2017-18.
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 2018. Secretarial Audit Report issued by M/sKhandelwal Devesh & Associates Company Secretaries in Form MR-3 attached and markedas Annexure "2" for the period under review forms part of this report. Thesaid report contains observation or qualification certain observation and qualificationwhich 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 compliance of hundred percent of shareholding of promoter(s) and promotergroup in Dematerialized form.
The Board noted the fact about the Non-Dematerialisation of only 0.48% 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 pending Listing Fee.
Non Maintenance of Functional Website of Company
The Board of Directors of the Company would like to inform you that due to inadvertenterror the Company failed to renew its website therefore the website is temporarynon-functional and the Company in process to renew the website.
13. ESTABLISHMENT OF VIGIL MECHANISM
The company has in place a vigil mechanism pursuant to which a Whistle Blower Policy isalso in vogue. Whistle Blower Policy covering all stakeholders including employees anddirectors of the company is hosted on companies .
14. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE
There were no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operation in future.
15. 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.
16. 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.
17. CORPORATE SOCIAL RESPONSIBILITY (CSR):
The provision of section 135(1) of Companies Act 2013 i.e. Corporate SocialResponsibility is not applicable on the company.
18. 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.
19. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope of the Internal Audit function is defined in theInternal Audit Manual. The Internal Audit Department monitors and evaluates the efficacyand adequacy of internal control system in the Company its compliance with operatingsystems accounting procedures and policies of the Company. The Internal Audit alsoincludes both physical as well as online transaction audit. Based on the report ofinternal audit function process owners undertake corrective action in their respectiveareas and thereby strengthen the controls. Significant audit observations andrecommendations along with corrective actions thereon are presented to the Audit Committeeof the Board.
20. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report as required under the Listing Agreement withstock exchanges is annexed as a separate Annexure "3" forming part of thisReport.
The Equity Shares of the Company are listed on Bombay Stock Exchange. The company yetto pay annual listing fees to the Stock Exchange for the year 2018-19 further the Companyis regular in compliances of various clauses and regulations of the Listing Agreementand/or LODR.
22. 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-"4". 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.
During the year under review the Company has not accepted or renewed any depositswithin 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 andunpaid at the end of the year.
24. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES PURSUANT TOSECTION 188(1) OF THE COMPANIES ACT 2013:
There were no contracts or arrangements or transactions with any related parties whichcould be considered material in accordance with the policy of the Company during the yearunder review. Hence the Company is not required to disclose details of the related partytransactions in Form AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of theAct and Rule 8(2) of the Companies (Accounts) Rules 2014.
25. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013:
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.7 ofthe financial statements).
26. 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 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
27. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT:
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which these financial statements relateon the date of this report.
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 itsemployees/Directors.
Your Directors place on record the valuable co-operation and assistance extended byReserve Bank of India Western Union Financial services Inc. Government AuthoritiesBankers lending Institutions suppliers and Customers during the year under review. YourDirectors also place on record their appreciation for the committed services of theexecutives and staff of the Company.