To The Members
Your Directors have great pleasure in presenting Twenty Seventh Annual Report of theCompany together with the Audited Annual Accounts for the year ended 31st March 2017.
During the year under review your Company recorded a turnover of ? 18554.73 lacsas compared to ? 19572.88 lacs in the previous year showing a decrease of 5.20%.The net profit / loss after tax stood at Rs. (360.17) lacs in the currentfinancial year as against Rs. 289.27 lacs in the previous financial year showing adecrease of 224.47%.
In the challenging market scenario there has been slight dip in the Sales and theProfitability of the Company. The Turnover of the Company constitutes of:
The Turnover of the gift segment is Rs. 12257.42 lacs as compared to ? 12735.26lacs previous year down by 3.75%.
The Turnover of the Greeting card segment is Rs. 3280.14 lacs as comparedto Rs. 3736.41 lacs previous year down by 12.21 %.
The stationery sale is Rs. 2693.24 lacs as compared to Rs. 2861.71 lacsin the previous year down by 5.89%.
The Company owned / managed stores have significantly contributed towards turnover andthe profits.
| || ||FOR THE YEAR ENDED |
| || || |
(Rs. in Lacs)
| ||31 MARCH 2017 ||31 MARCH 2016 |
|Income from Operations ||18554.73 ||19572.88 |
|Other Income ||112.21 ||211.30 |
|Total Expenditure ||18526.96 ||18531.63 |
|Operating profit (PBDIT) ||139.98 ||1152.60 |
|Interest & finance charge ||302.22 ||273.38 |
|Depreciation ||376.69 ||461.12 |
|Profit / loss before Tax (PBT) ||(538.93) ||418.10 |
|Provision for taxation || || |
|Current ||- ||132.59 |
|Deferred ||(178.76) ||(3.76) |
|Profit / loss after Tax ||(360.17) ||289.27 |
|APPROPRIATIONS || || |
|Transfer to General Reserve ||NIL ||NIL |
|Final Dividend (Proposed) ||NIL ||NIL |
|Tax on Proposed Dividend ||NIL ||NIL |
|Provision for Corporate Social Responsibility Activities ||12.13 ||17.59 |
|Profit Carried Forward ||372.30 ||271.68 |
In view of the inadequate profit during the year and need to conserve resources forthe expansion of the business of your Company Board expresses its inability to declareany dividend for the financial year 2016-2017.
The Company is constantly putting efforts to boost the sales via various schemespromotional campaigns and advertisements. It has managed to open a number of outletsacross the Country in various malls and on high street ends. The Company has successfullymanaged to set up 30 retail outlets and as on 31st March 2017 the numbers of Company owned/ managed stores were 225.
Considering the current scenario Your Company has tied up with new affiliates likePaytm Talash.com and one major ecommerce portal "Amazon.in" for expansion onmarket place to wider their reach. As you all are aware that Amazon is a big market placeand day by day we are getting a good presence over there. Remember that e-Commerce isfaster cheaper and more convenient than the traditional methods of selling productsnowadays. Your company will be able to operate your products marketing and your productsselling online. Company is not only focusing on selling the gifting products but also thehome decor products through E-commerce channel. Through E commerce channels your companyis trying to achieve a new level where they are targeting a 10% of Business in the year2017-18.
Your Company will continue with its efforts to open new outlets across India. Withexpectation of improvement in economy your Company has plans to open 20 more stores ofthe Company during the year 2017-18.
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 aseparate section on Corporate Governance and Management Discussion and Analysis Reporttogether with a certificate from the Company's Auditors confirming compliance is set outin the annexure forming part of this report.
In compliance with the Corporate Governance requirements the Company has implemented aCode of Conduct for all its Board Members and Senior Management Personnel who haveaffirmed compliance thereto. The said Code of conduct has been posted on the Company'swebsite.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of the knowledge and belief and according to the information andexplanation obtained your Directors make the following statements in terms of section134(3) & (5) of the Companies Act 2013:
(i) That in the preparation of the annual accounts for the year ended 31st March2017 the applicable Accounting Standards have been followed along with properexplanation relating to material departures if any;
(ii) That such accounting policies as mentioned in the Notes to Accounts have beenselected and applied consistently and judgments and estimates have been made that arereasonable and prudent so as to give a true and fair view to the state of affairs of theCompany as at 31st March 2017 and of the profit and loss of the Company for that period.
(iii) That proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) That the annual accounts have been prepared on a going concern basis;
(v) That the Directors have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and are operatingeffectively; and
(vi) That the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
Pursuant to the provisions of section 152 of the Companies Act 2013 atleast two-thirdof the Directors shall be subject to retirement by rotation out of which one-third ofsuch Directors must retire from office at each Annual General Meeting of the shareholdersand a retiring director is eligible for re-election. Accordingly Mr. Dilip Seth retiresby rotation and being eligible has offered to be re-appointed at the ensuing AnnualGeneral Meeting.
The Board met four times during the year under review. Meetings were held on 23rd May2016 09th August 201609th November 2016 and 13th February 2017.
All Independent Directors have given declarations that they meet the criteria ofindependence as prescribed under Section 149(6) of the Companies Act 2013 and under SEBI(Listing obligations and Disclosure Requirements) Regulations 2015 with the StockExchanges.
The Board of Directors in its meeting held on 25th May 2017 approved there-appointments of following directors as under:-
a) Mr. Dilip Seth was re-appointed as Whole Time Director (Director Finance & CFO)of the Company for a further period of 2 (two) years with effect 05.08.2017.
b) Mr. Anil Moolchandani was re-appointed as Chairman and Managing Director of theCompany for a further period of 2 (two) years with effect 29.06.2017.
*Mr. Jagdish Moolchandani was appointed as Director (Executive) of the Company w.e.f.10th August 2016 for a period of 3 (three) years. *Mr. Deepak Thakkar resigned from theoffice of the Director of the Company w.e.f. 5th January 2017.
*Mr. P.K. Chadha Independent Director of the Company deceased on 23rd June 2017 andthus ceased to be a Director of the Company.
KEY MANAGERIAL PERSONNEL
The details of the Key Managerial personnel are as under:
|S. No. ||Name ||Designation |
|1. ||Mr. Anil Moolchandani* ||Chairman and Managing Director |
|2. ||Mr. Dilip Seth* ||Director (Finance) & CFO |
|3. ||Mr. Vijayant Chhabra** (Resigned from the post of Chief Executive Officer w.e.f. 08.08.2016) ||Chief Executive Officer |
|4. ||Mr. Seshan Ranganathan*** (appointed as Chief Executive Officer w.e.f. 09.08.2016) ||Chief Executive Officer |
|5. ||Mr. Gautam ||Company Secretary |
* Mr. Anil Moolchandani Chairman and Managing Director and Mr. Dilip Seth Director(Finance) & CFO of the Company were re-appointed for a further period of 2 (two) yearsby the Board of Directors of the Company in its meeting held on 25.05.2017. Your approvalfor their re-appointment has been sought in the Notice convening the forthcoming AnnualGeneral Meeting of the Company.
**Mr. Vijayant Chhabra was appointed as Chief Executive Officer (CEO) of the Companyfor a further period of 1 (one) year with effect 23.05.2016 by the Board of Directors ofthe Company. Further he resigned as the CEO of the Company w.e.f. from 08.08.2016.
*** The Board of Directors appointed Mr. Seshan Ranganathan as Chief Executive Officer(CEO) of the Company in its Meeting held on 09.08.2016. Further he resigned as the CEO ofthe Company w.e.f 10.08.2017.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board in consultation with its Nomination& Remuneration Committee has formulated a framework containing inter-alia thecriteria for performance evaluation of the entire Board of the Company its Committee andIndividual Directors including Independent Directors.
A structured questionnaire was prepared after taking into consideration of the variousaspects of the Board's functioning composition of the Board and its Committees cultureexecution and performance of specific duties obligations and governance.
Board members had submitted response on a scale of 4 (outstanding) -1 (needsimprovement) for evaluating the entire Board respective Committees of which they aremembers and of their peer Board members including Chairman of the Board.
The Independent Directors had met separately without the presence of Non-IndependentDirectors and the members of management and discussed inter-alia the performance ofNon-Independent Directors and Board as a whole and the performance of the Chairman of theCompany after taking into consideration the views of Executive and Non-Executivedirectors.
The Nomination and Remuneration Committee has also carried out evaluation of everyDirector's performance.
The performance evaluation of all the Independent Directors have been done by theentire Board excluding the Director being evaluated.
*ln order to enhance the effectiveness of the performance evaluation few criteriaswith the approval of the Board of the Company in its meeting held on 25.05.2017 wereadded in the existing evaluation mechanism.
The Board of Directors expressed their satisfaction with the evaluation process.
The Nomination and Remuneration Committee works with the Board on the Succession planand prepares for the succession in case of any exigencies.
NUMBER OF MEETINGS OF THE BOARD
The details of the number of meetings of the Board held during the Financial Year2016-17 forms part of the Corporate Governance Report. AUDITORS
M/s. Uberoi Sood and Kapoor Chartered Accountants (FRN 001462N) the StatutoryAuditors of the Company hold office up to the forthcoming Annual General Meeting("AGM") of the Company. As the tenure of M/s. Uberoi Sood and Kapoor is ceasingafter the AGM due to the mandatory rotation as per the provisions of the section 139 ofthe Companies Act 2013 Board of Directors in its meeting held on 10th August 2017 hasrecommended the appointment of M/s. J.P. Kapur & Uberai (FRN-000593N) CharteredAccountants as the Statutory Auditors of the Company subject to your approval(shareholders) in the Notice convening the forthcoming AGM of the Company for a term offive consecutive years from the conclusion of 27th AGM that is scheduled to be held in theyear 2017 till the conclusion of 32nd AGM to be held in 2022 subject to the approval ofshareholders of the Company based on the recommendation of the Audit Committee.
The Company has received letter from M/s. J.P. Kapur & Uberai that theirappointment if made would be within the prescribed limits under Section 139 of theCompanies Act 2013.
The Notes on Financial Statements referred to in the Auditor's Report are selfexplanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark.
As per the new Companies (Cost Records and audit) Rules 2014 the appointment of CostAuditor is not required for your Company.
INTERNAL FINANCIAL CONTROLS
In terms of section 134 of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Company has an Internal Financial Controlsystem in relation to the policies and procedures adoped by the Company. The Company hasin place adequate internal financial controls with reference to financial statements.During the year such controls were tested and no reportable material weakness in thedesign or operation were observed.
Your Company is well aware of risks associated with its business operations.Comprehensively risk management system is being put in place involving classification ofrisk adoption of risk management measures and a strong mechanism to deal with potentialrisks and situation leading to a rise of risks in an effective manner.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo information are given in Annexure 'A' to the Directors'Report in terms of the requirements of Section 134 (3)(m) of the Companies Act 2013 readwith the Companies (Accounts) Rules. 2014.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 as requiredunder Section 92(3) of the Companies Art 2013 is annexed herewith as Annexure-B and formsan integral part of this report.
Pursuant to the provisions of Section 204 of the Companies Art 2013 and rules madethereunder the Board has appointed M/s. Dayal & Maur Practising Company Secretaryto conduct Secretarial Audit for the financial year 2016-17. The Secretarial Audit Reportfor the financial year ended March 312017 is annexed herewith as Annexure C to thisReport and forms an integral part of this Report. The Secretarial Audit Report does notcontain any qualification reservation or adverse remark.
None of the Employees drew salary more than ? 500000/- per month or ? 6000000/- ina year as required under the provisions of Section 197 (12) of the Companies Act 2013read with Rules 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 except Mr. Seshan Ranganathan Chief Executive Officer (CEO) Ofthe Company. Further Mr. Seshan Ranganathan CEO of the Company resigned w.e.f 10.08.2017.
|S. No. ||EMPLOYEE NAME ||SESHAN RANGANATHAN |
|(i) ||Designation of the employee ||Chief Executive Officer |
|(ii) ||Remuneration received ||Rs. 501855.00 per month |
|(iii) ||Nature of employment whether contractual or otherwise ||Permanent |
|(iv) ||Qualifications and experience of the employee ||PGDBM (IIM Bangalore - 1984) & ACMA (CIMA London - 1992). |
|(V) ||Experience ||Around 32 yrs. |
|(Vi) ||Date of commencement of employment ||9th August 2016 |
|(vii) ||The age of such employee ||55 yrs. 10 month |
|(viii) ||The last employment held by such employee before joining the company ||Radikal Foods LTD. (2014-2015) |
|(ix) ||The percentage of equity shares held by the employee in the company ||Nil |
|(X) ||Whether any such employee is a relative of any director or manager of the company and if so name of such director or manager. ||No |
NOMINATION AND REMUNERATION POLICY
The Board of Directors have constituted Nomination and Remuneration Committee pursuantto section 178 of Companies Art 2013 and regulation 19 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 comprising Mr. Sunil Behl (Chairperson) Mr.Prem Kumar Chadha and Mr. Arun Singhal as members of the Committee. Mr. P.K. Chadhamember of the Committee deceased on 23rd June 2017. Further the vacancy created is filledby the appointment of Dr. Bhavna Chadha as the member of the Committee w.e.f 10.08.2017.The Board of Directors has formulated a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.The Policy also lays down the criteria for selection and appointment of Board Members. Thedetails of the Policy forms a part of this report as Annexure - Dand theDetails/Disdosures of Ratio of Remuneration to each Director to the median employee'sremuneration as Annexure - E The Nomination and Remuneration Policy is available on ourwebsite at the link- http://www.archiesonline.com/htdocs/nomination-remuneration-policy.pdf.
CORPORATE SOCIAL RESPONSIBILTY
The Board of Directors of the Company have constituted Corporate Social Responsibility(CSR) committee pursuant to Section 135 of Companies Act 2013 schedule VII SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and relevant rules andprovisions comprising Mr. Sunil Behl (Chairperson) Mr. Anil Moolchandani and Mr. DilipSeth as members of the Committee on 16th May 2014. The said Committee has been entrustedwith the responsibility of formulating and recommending to the Board a CSR Policyindicating the activities to be undertaken by the Company monitoring the implementationof the framework of the CSR Policy and recommending the amount to be spent on CSRactivities. The Corporate Social Responsibility policy is available on our website at thelink http://www.archiesonline.com/htdocs/csr.pdf
During the year the Company has spent ? 450000/- on CSR activities and the balanceunspent amount of ? 763363 will be spent in the f nancial year 2017-2018 due to thereason of being in the process of selecting suitable projects for CSR. The Annual Reporton CSR activities is annexed herewith as Annexure - F.
FAMILIARIZATION PROGRAMMES FOR INDEPENDENT DIRECTORS
All new Independent Directors inducted into the Board as well as the existingIndependent Directors are to attend an orientation programme to be updated in relation tothe affairs of the Company its functioning and challenges. The details of familiarizationprogramme imparted to independent directors is available on our website at the linkhttp://www.archiesonline.com/htdocs/details of familiarization proqramme.pdf
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Board at its meeting held on 16th May 2014 adopted a Whistle Blower Policy/VigilMechanism in accordance with the provisions of the Companies Act 2013 and as per SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 which provides aformal mechanism for all directors employees and other stakeholders of the Company toreport to the management their genuine concerns or grievances about unethical behaviouractual or suspected fraud and any violation of the Company's Business Code of Conduct. ThePolicy also provides a direct access to the Chairperson of the Audit Committee to makeprotective disclosures to the management about grievances or violation of the Company'sBusiness Code of Conduct.
The Whistle Blower policyr is also available on our website at the linkhttp://www.archiesonline.com/htdocs/Whistle-blower-policv-ARCHIES- LIMITED.pdf.
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Board of Directors of the Company have constituted Internal Complaint Committee whowill hear and redress the complaint made in writing by any aggrieved woman of sexualharassment at workplace as per the "Sexual Harassment of Woman At Workplace(Prevention Prohibition and Redressal) Act 2013". The Policy is also available onour website at the link. http://www.archiesonline.com/htdocs/Sexual-Harassment-Policv.pdf.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Woman At Workplace (Prevention Prohibition andRedressal) Act 2013.
The Audit Committee as on 31st March 2017 comprises Independent Directors namely Mr.Sunil Behl Mr. Arun Singhal and Mr. Prem Kumar Chadha. All the recommendations made bythe Audit Committee were accepted by the Board. Further Mr. P.K. Chadha member of theCommittee deceased on 23rd June 2017. Thus the vacancy created is filled by theappointment of Dr. Bhavna Chadha as the member of the Committee w.e.f 10.08.2017..
RELATED PARTY TRANSACTIONS
All transactions entered with the Related Parties for the year under review were onarm's length basis and in the ordinary course of business. Thus disclosure in Form AOC-2is not required. During the year the Company had not entered into anycontract/arrangement/transaction with related parties which could be considered materialin accordance with the policy of the Company on materiality of related party transactions.
All related party transactions are placed before the Audit Committee as also to theBoard for approval. The Policy on materiality of related party transactions and dealingwith related party transactions as approved by the Board is available on our website atthe link http://www.archiesonline.com/htdocs/transactionPolicy.pdf.
Your Directors draw attention of the members to Note 34 to the financial statementwhich sets out related party disclosures.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to the regulation 34 (2) (e) of SEBI (Listing Obligations and DisclosureRequirement) Regulations 2015 a Management discussion and analysis report is annexed tothis report.
During the year your Company has not accepted and/or renewed any public deposits interms of the provisions of the Companies Act 2013.
PARTICULARS OF LOANS GIVEN INVESTMENT MADE AND GUARANTEES GIVEN
During the year under review the Company has not granted any loans and Investment madeand given guarantee under the provisions of Section 186 of the Companies Act 2013.
The relations between the Company and its employees continued to be cordial andharmonious throughout the year under review.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.
Your Directors would like to take this opportunity to express their sincere thanks toits valued franchisees distributors C & F agents collaborators bankers Governmentauthorities customers and all other business associates for their continued co-operationand patronage.
The Directors would also like to express their deep sense of appreciation to all theemployees who are committed to strong work ethics excellence in performance andcommendable teamwork and have thrived in a challenging environment. The Directors wish toexpress their gratitude to the valued shareholders for their unwavering trust and support.
| ||For and on behalf of the Board |
|Place : Delhi ||Anil Moolchandani |
|Date : August 10 2017 ||Chairman and Managing Director |
| ||(DIN-00022693) |