DIRECTORS' REPORT To, THE MEMBERS, I.Your Directors have pleasure in submitting their 23rd Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2015. II. FINANCIAL PERFORMANCE: During the period under review your Company has made a profit of Rs. 2,59,986/- and there is no provision for income tax during the current year, thus a net credit balance of Rs. 2,59,986/- has been transferred to Reserve & Surplus A/c for the current period. Your Directors are optimistic about company's business and hopeful of better performance with increased revenue in next year III. DIVIDEND: To conserve the resources for the future requirement of the company, your directors have not recommended any dividend for the year. IV. FIXED DEPOSITS: The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act, 2013 ("the Act") read with the Companies (Acceptance of Deposit) Rules, 2014 during the period under review. Hence, the requirement for furnishing the details of deposits which are not in compliance with Chapter V of the Act is not applicable. V. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE ENDS OF THE FINANCIAL 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 ends of the financial year to which this financial statement relate on the date of this report. VI. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES The Company does not have any Subsidiary, Joint venture or Associate Company. VII. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the period under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls VIII. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL No orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company's operations in future. IX. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS: The company has not given any loans or guarantees or made any investments covered under the provisions of section 186 of the Companies Act, 2013 during the financial period under review. X. PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO: A. CONSUMPTION OF ENERGY & TECHNOLOGY ABSORPTION: The details as required under Section 134 (3) (m) of the Companies Act, 2013, in respect of Conservation of Energy, Technology Absorption are not applicable. B. FOREIGN EXCHANGE EARING & OUTGO : Foreign Exchange Earning : NIL Foreign Exchange Outgo : NIL XI. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES During the year no contracts or arrangements were made with related parties falling under the purview of Section 188 of the Companies Act, 2013. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large. XII. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL a. Cessation During the year Mr. Ketan N. Shah (Din: 00913411), Mr. Nayan C. Shah (Din: 00823070), Mr. Sandip R. Shah (Din: 00912721) And Mr. Ashokkumar R. Patel (Din: 02993352) resigned from the Board of directors of the Company w.e.f. 30th May, 2014.The Board has noted their contribution as Director of the Company during his tenure on the Board of the Company. b. Retirement by rotation In accordance with the provisions of section 152[6] of the Act and in terms of Articles of Association of the Company, Mr. Dahyabhai B. Sachania (DIN: 02468095) retires at this Annual General Meeting and being eligible offer themselves for re- appointment. The Board recommends his reappointment. c. Independent Directors: Mr. Harsad S. Gandhi and Mr. Nishit M. Rupapara are the existing Independent Directors. The Company proposes to appoint them as Independent Directors under Section 149 of the Companies Act, 2013, for a period of five consecutive years from the date of this Annual General Meeting. In accordance with the provisions of the Act, none of the Independent Directors are liable to retire by rotation. The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules. d. Number of Board Meetings conducted during the year under review The Company had 4(Four) Board meetings on 30/05/2014, 11/08/2014, 14/11/2014, and 13/02/2015 during the financial year under review. e. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders Relationship Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. XIII. DIRECTOR'S RESPONSIBILITY STATEMENT: In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that: a. In the preparation of the annual accounts, the applicable accounting standards have been followed. b. The directors had selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for the year under review. c. 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 and for preventing and detecting fraud and other irregularities. 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 the company and that such internal financial controls are adequate and were operating effectively. f. The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. XIV. DISCLOSURE OF COMPOSITION OF 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 Audit Committee of Company was reconstituted with effect from 30.05.2014 (due to Resignation of Mr. Nayan C. Shah member of the committee) and further re-constituted as per the provisions of Clause 49 of the Listing Agreement with Stock Exchanges read with Section 177 of the Companies Act, 2013 with effect from 14.11.2014 and as on the date of this Report, the Audit Committee comprises:- A. Mr. Harshad S. Gandhi B. Mr. Nishit M. Rupapara C. Mr. Shivkumar R. Chauhan The above composition of the Audit Committee consists of Independent Directors viz., Mr. Harshad S. Gandhi and Mr. Nishit M. Rupapara who form the majority. The scope and terms of reference of the Audit Committee have been amended in accordance with the Act and the Listing Agreement entered into with the Stock Exchanges. During the period under review, the Board of Directors of the Company had accepted all the recommendations of the Committee XV. ANNUAL RETURN The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure "A" and is attached to this Report. XVI. AUDITORS a. Statutory Auditor The present Auditors of the Company M/s. Praful N. Shah, Chartered Accountants, Ahmedabad were appointed as Auditors and will retire at the ensuing Annual General Meeting. M/s. Praful N. Shah, Chartered Accountants, have submitted certificate for their eligibility for appointment under Section 139 of the Companies Act, 2013. Board of Directors of your Company favour their re-appointment as Auditors of the Company and such re-appointment if done, shall be upto the conclusion of 25th Annual General Meeting of the Company. The notes and remarks of Auditors' are self-explanatory and therefore do not require any further clarification. b. Cost Auditor The Company has not appointed the Cost Auditor as pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit is not applicable to the Company. c. 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 Khandelwal Devesh & Associates, Company Secretaries had been appointed to issue Secretarial Audit Report for the period ended on 31st March 2015. Secretarial Audit Report issued by M/s Khandelwal Devesh & Associates, Company Secretaries in Form MR-3, attached and marked as Annexure "B", for the period under review forms part of this report. The said report contains observation or qualification relating to the appointment of Company Secretary and CFO. The Board of Directors of your Company would like to explain on the said observation that your Company took all reasonable steps to do such appointments, but as your Company is not doing well in its present line of business activity, it failed to attract right candidates for such post. The Board of your Company has appointed Mr. Biren J. Thaker as its CFO w.e.f. 28/05/2015 and continues its efforts to search right candidate for the post of Company Secretary and will appoint the Company Secretary as soon as possible. XVII. VIGIL MECHANISM / WHISTLE BLOWER POLICY: The Company has established vigil mechanism and framed whistle blower policy for Directors and employees to report concerns about unethical behaviour, actual or suspected fraud 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 XVIII. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY The Company does not have any Risk Management Policy as the elements of risk threatening the Company's existence are very minimal. XIX. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable XX. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Corporate Governance Report forming part of the Annual Report. XXI. CORPORATE GOVERNANCE: The Company has complied with the Corporate Governance requirements under the Act and as stipulated under clause 49 of the Listing Agreement. A separate section on detailed report on the Corporate Governance practices followed by the Company under the Listing Agreement along with a certificate from M/s. PRAFUL N. SHAH & CO, confirming the compliance, is part of the Annual Report. XXII. PARTICULARS REGARDING EMPLOYEES: The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, forms part of this report as 'Annexure C. However, as permitted in terms of Section 136 of the Act, this Annual Report is being sent to all the members and others entitled thereto, excluding the said annexure. Members who are interested in obtaining these particulars may write to the Compliance Officer at the Registered Office of the Company. The aforesaid annexure is also available for inspection by members at the Registered Office of the Company, 21 days before the 23rd Annual General Meeting and upto the date of Annual General Meeting during business hours on working days. ACKNOWLEDGEMENT: Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company. For and on behalf of the Board Harsad S. Gandhi Chairman (DIN: 01056779) Date : 14/08/2015 Place : Ahmedabad |