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Archies Ltd.

BSE: 532212 Sector: Others
NSE: ARCHIES ISIN Code: INE731A01020
BSE 00:00 | 07 Dec 17.25 0.50
(2.99%)
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17.15

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17.60

LOW

16.80

NSE 00:00 | 07 Dec 17.15 0.35
(2.08%)
OPEN

17.05

HIGH

17.30

LOW

16.70

OPEN 17.15
PREVIOUS CLOSE 16.75
VOLUME 2640
52-Week high 30.00
52-Week low 9.40
P/E
Mkt Cap.(Rs cr) 58
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 17.15
CLOSE 16.75
VOLUME 2640
52-Week high 30.00
52-Week low 9.40
P/E
Mkt Cap.(Rs cr) 58
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Archies Ltd. (ARCHIES) - Director Report

Company director report

To The Members

Your Directors have great pleasure in presenting Thirtieth Annual Report of the Companytogether with the Audited Annual Accounts for the year ended 31st March 2020.

PERFORMANCE REVIEW

During the year under review your Company recorded a Revenue from operations of Rs.13931.79 Lakhs as compared to Rs. 16136.44 Lakhs in the previous financial year showing adecrease of 13.66% and the net profit/ (loss) after tax stood at Rs. (717.58) Lakhs in thecurrent financial year as against Rs. 72.61 Lakhs in the previous financial year showinga decrease of 1088.27%.

In the challenging market scenario there has been dip in the Sales and theProfitability of the Company. The Revenue from operations of the Company constitutes of:

• The Turnover of the gift segment is Rs. 8756.30 lakhs as compared to Rs.10489.83 lakhs previous year decreased by 16.53%.

• The Turnover of the Greeting card segment is Rs. 1816.98 lakhs as compared toRs. 2406.49 lakhs previous year down by 24.50%.

• The stationery sale is Rs. 2678.36 lakhs as compared to Rs. 2716.84 lakhs in theprevious year decreased by 1.42%.

The Company owned / managed stores have significantly contributed towards Revenue fromOperations and the profits.

FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED

31st March 2020 31st March 2019
Income from Operations 13931.79 16136.44
Other Income 177.19 183.84
Total Expenditure 12330.47 15620.26
Operating Profit (PBDIT) 1778.51 700.02
Interest & Finance Charge 958.41 269.79
Depreciation 1842.01 357.56
Profit before Tax (PBT) Provision for taxation (1021.91) 72.67
Current 0.00 14.96
Deferred (312.43) 0.06
MAT Credit Entitlement 0.00 14.96
Profit after Tax (717.58) 72.61
APPROPRIATIONS
Transfer to General Reserve NIL NIL
Final Dividend (Proposed) NIL NIL
Tax on Proposed Dividend NIL NIL
Provision for Corporate Social Responsibility NIL NIL
Activities NIL NIL
Profit Carried Forward (717.58) 72.61

DIVIDEND

In view of the loss during the year and need to conserve resources for the expansionof the business of your Company Board expresses its inability to declare any dividend forthe financial year 2019-20.

TRANSFER OF UNPAID UNCLAIMED DIVIDEND AND SHARES TO IEPF

During the FY 2019-20 unclaimed dividend for FY 2011-12 amounting to Rs. 256542(Rupees Two Lakh Fifty Six Thousand Five Hundred Forty Two Only) was transferred to theInvestor Education and Protection Fund (IEPF) pursuant to the provision of Section 124(5)of the Companies Act 2013 and Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) Rules 2016 (as amended from time to time).

Pursuant to the provisions of Section 124(6) of the Companies Act 2013 and the rulesmentioned aforesaid all shares in respect of which dividend has not been paid or claimedfor 7 (Seven) consecutive years or more were also transferred in the name of IEPF afterrequisite notice to concerned Shareholders. Details of such transferred shares areavailable at the Company's website i.e. www.archiesonline.com under"Investors" section and such shares can be claimed back from IEPF authorityafter following the prescribed procedure.

RETAIL EXPANSION

The Company continues its efforts to boost sales through different promotional schemesand campaigns and continued its effort to open retail outlets across India in Malls aswell as on high Streets. The Company opened total 22 retail stores and closed total 43retail stores. As on 31st March 2020 the numbers of company owned/managed stores were 197.

The Company during the year took steps to improve sales and profitability by revampingits E-commerce platform "archiesonline.com" by making it more user friendly andin line with the existing Indian E-commerce websites to attract more customers. Companyhas also tied up with various e-retailers who have vast presence in the virtual space likeFlipkart Snapdeal E-India Store Group on India Saffron Art Pvt. Ltd. Gift A love.comPhoolwala.com My flower tree Shopclues Indian Gifts Portal Fern N Petals &Bookaflower.com Your Company will continue with its efforts to open new outlets acrossIndia.

CORPORATE GOVERNANCE

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 report on Corporate Governance.

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 followings 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 March 2020the applicable Accounting Standards have been followed along with proper explanationrelating 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 2020 and of the profit and loss of the company for the period;

(iii) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(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 by theCompany and that such internal financial controls adequate and are operating effectively;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.

DIRECTORS

Pursuant to the provisions of section 152 of the Companies Act 2013 at leasttwo-third of the Directors shall be subject to retirement by rotation out of whichone-third of such Directors must retire from office at each Annual General Meeting of theshareholders and a retiring directors eligible for re-election. Accordingly Mr. VarunMoolchandani retires by rotation and being eligible has offered to be re-appointed at theensuing Annual General Meeting.

The Board met five times during the year under review. Meetings were held on 28th May2019 10th August 2019 28th September 2019 13th November 2019 and 07th February 2020.

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 28th May 2019 10th August 2019 &28th September 2019 approved the following change in directorship of the Company asunder:

a) Mr. Anil Moolchandani is re-appointed as a Chairman and Non-Executive Director ofthe Company for a period of 2 (two) years with effect from 28thJune 2019 from itsexisting designation as Chairman and Managing Director.

Further he has been re-appointed as a Chairman and Executive Director of the Companyfor a period of 2 (two) years with effect from 10thAugust 2019 from its existingdesignation as Chairman and Non-Executive Director.

Further he has been appointed as a Chairman and Managing Director of the Company for aperiod of 2 (two) years with effect from 28th August 2020 from its existing designationas Chairman and Executing Director in the Board Meeting held on 28th August 2020 subjectto the approval of members in ensuing Annual General Meeting.

b) Mr. Dilip Seth is re-appointed as Whole-Time Director (Director Finance & CFO)of the Company for a further period of 2 (two) years with effect from 05.08.2019. He hasresigned form the post of Whole Time Director & CFO of the Company with effect from04th August 2020.

c) Mr. Varun Moolchandani is appointed as Additional Director (Executive) of theCompany for a period of 2 (two) years with effect from 25.06.2019.

d) Mr. Sunil Behl is re-appointed as an Independent Director (Non-Executive) of thecompany for a further period of 5 (five) years with effect from 23.09.2019.

e) Mr. Arun Singhal is re-appointed as an Independent Director (Non-Executive) of thecompany for a further period of 5 (five) years with effect from 23.09.2019.

f) Mr. Kanav Dev Sharma is appointed as Non-Executive and Independent Director of theCompany for a period of 5 (five) years with effect from 19.08.2019.

g) Mr. Jagdish Moolchandani is appointed as Executive Director of the Company for aperiod of 2 (two) year with effect from 28.09.2019 in the Board Meeting held on 28thSeptmber 2019 subject to the approval of members in ensuing Annual General Meeting.

KEY MANAGERIAL PERSONNEL

The details of the Key Managerial personnel are as under:

S. No. Name Designation
1 Mr. Anil Moolchandani* Chairman and Executive Director
2 Mr. Dilip Seth** Director (Finance) & CFO
3 Mr. Hitesh Kumar*** Company Secretary

*Mr. Anil Moolchandani is re-appointed as a Chairman and Executive Director of theCompany for a period of 2 (two) years with effect from lOthAugust 2019 from its existingdesignation as Chairman and Non-Executive Director.

Further he has been re-appointed as a Chairman and Managing Director of the Company fora period of 2 (two) years with effect from 28th August 2020 from its existing designationas Chairman and Executive Director.

** Mr. Dilip Seth Whole Time Director (Finance) and CFO of the Company has resignedfrom the Company with effect from 04.08.2020.

Mr. Kamlesh Thakur has been appointed as CFO of the Company with effect from 28thAugust 2020.

** *Mr. Gautam Company Secretary of the Company resigned w.e.f. 28.05.2019. FurtherMr. Hitesh Kumar is appointed as Company Secretary of the Company w.e.f. 12.08.2019.

BOARD EVALUATION

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 1 (outstanding) - 5 (poor) forevaluating the entire Board respective Committees of which they are members and of theirpeer 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 of Non- 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.

The Board of Directors expressed their satisfaction with the evaluation process.

SUCCESSION PLANNING

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 Year2019-20 forms part of the Corporate Governance Report.

AUDITORS

M/s J.P. Kapur & Uberai (FRN-000593N) Chartered Accountants was appointed asstatutory auditors of the Company in the Annual General Meeting held on 28th September2017 for five years subject to ratification for four consecutive Annual General Meetingheld after Annual General Meeting held on 28th September 2017.

As per the Companies (Audit and Auditors) Amendment Rules 2018 dated 07.05.2018 theratification of appointment of statutory auditors of the Company in every Annual GeneralMeeting till Sixth Annual General Meeting has been omitted.

Therefore M/s J.P. Kapur & Uberai (FRN - 000593N) Chartered Accountants shallcontinue as statutory auditors of the Company for financial year 2020-21. There is norequirement of ratification of appointment of Statutory Auditors in ensuing Annual GeneralMeeting.

AUDITOR'S REPORT

The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any observation qualification reservation or adverse remark.

COST AUDITORS

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 adopted by the company . The Company hasin place adequate internal financial control with reference to financial statements.During the year such controls were tested and no reportable material weakness in thedesign or operations were observed.

RISK MANAGEMENT

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 Act 2013 is annexed herewith as Annexure-B and formsan integral part of this report. Weblink for Annual Return is https://www.archiesonline.com/investors/annual-return.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethere under the Board has appointed M/s. Dayal & Maur Practising Company Secretaryto conduct Secretarial Audit for the financial year 2019-20. The Secretarial Audit Reportfor the financial year ended March 31 2020 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.

EMPLOYEES' REMUNERATION

None of the Employees drew the salary more than the prescribed limit i.e. Rs. 1.02Crores in a year for the financial year 2019-20 as per the provisions of Section 197 (12)of the Companies Act 2013 read with Rules 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. Detail pertaining to Remuneration asrequired under Section 197 (12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms a partof this report as Annexure - E.

NOMINATION AND REMUNERATION POLICY

The Board of Directors have constituted Nomination and Remuneration Committee pursuantto Section 178 of the Companies Act 2013 and regulation 19 of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 comprising Mr. Sunil Behl (Chairperson)Mrs. Payal Jain and Mr. Arun Singhal as members of the Committee. The Board of Directorshas formulated a policy which lays down a framework in relation to remuneration ofDirectors Key Managerial Personnel and Senior Management of the Company. The Policy alsolays down the criteria for selection and appointment of Board Members. The details of thePolicy forms a part of this report as Annexure - D and the Details / Disclosures of Ratioof Remuneration to each Director to the median employee's remuneration as Annexure -E. TheNomination and Remuneration Policy is available on our website at the link-https://www.archiesonline.com/public/htdocs/nomination-remuneration.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 and 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 also available on our website atthe link http://www.archiesonline.com/htdocs/csr.pdf

Due to the loss in the Financial Year 2018-19 the Company has not spent any amount onCSR Activities in the Financial Year 2019-20. The Annual Report on CSR activities isannexed herewith as Annexure - F

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 behavioractual or suspected fraud and any violation of the Company's Business Code of Conduct.

The Policy also provides a direct access to the Chairperson of the Audit Committee tomake protective disclosures to the management about grievances or violation of theCompany's Business Code of Conduct.

The Whistle Blower policy is also available on our website at the link

http://www.archiesonline.com/htdocs/Whistle-blower-policy-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-Policy.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.

AUDIT COMMITTEE

The Audit Committee as on 31st March 2020 comprises Independent Directors namely Mr.Sunil Behl Mr.Arun Singhal and Mrs. Payal Jain. All the recommendations made by the AuditCommittee were accepted by the Board.

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 any contract /arrangement / transaction with related parties which could be considered material inaccordance 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 part 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 29 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 DisclosureRequirements) Regulations 2015 a Management Discussion and Analysis Report is annexuredto this report.

PUBLIC DEPOSITS

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.

INDUSTRIAL RELATIONS

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.

STATUS OF LISTING FEES

Your Company has been regularly paying listing fees to the BSE & NSE Mumbai whereits Equity Shares are listed.

ACKNOWLEDGEMENT

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 Anil Moolchandani
Place : Delhi

Date : 28th August 2020

Chairman & Managing Director (DIN: 00022693)

ANNEXURE 'A' TO THE DIRECTORS' REPORT

A) Conservation of Energy

Energy conservation continues to be an area of emphasis and is regularly monitored. TheCompany's plant has been designed in such a manner so as to achieve a high efficiency inthe utilization of energy. The key areas with respect to reduction of energy wereidentified an necessary steps initiated.

Measures Taken for Improvement

The Company is also engaged in continuous process of energy conservation throughimproved operational and maintenance practices. Following are the brief steps taken by theCompany for conservation of energy at its outlets:-

1. All the Store managers are regularly made aware about the energy consumption oftheir store based on their connected load and trained to make maximum utilization ofenergy and minimize wastages.

2. Controlled the energy consumption of Air conditioners by optimizing the temperatureinside the stores (25.C). Company is installing only 5 Star rated Air conditioners in theoutlets to minimize electricity consumption.

3. In new stores only LED lights are installed instead of CFL bulbs.

4. Company has installed Capacitors bank to maintain the power factor to reduce thelosses on the energy bills.

5. Optimized lighting consumption by strictly controlling the operating hours as perthe usage pattern.

6. The Company has also installed 72 KW rooftop solar energy plant at its Factory atManesar which is operational from July 2015 and functioning well.

7. The Company has installed 40 KW rooftop solar energy plant at the corporate officeof the Company which is operational from February 2017.

B) Technology Absorption Technology absorption adaptation and innovation

1. Efforts in brief made towards technology absorption adaptation and innovation. The Company has a tie-up with Hallmark Cards Inc. (which is incidentally one of the world leaders in the greeting card business) for sourcing of designs. The company also remains in touch with number of other Companies across the world which helps in keeping abreast with the latest happening in the world in printing technology latest designing trends in cards & various other paper products latest fashions in the gift segment etc.
2. Benefits derived as a result of the above efforts e.g. product improvement cost reduction product development import substitution etc. As a result of these efforts the Company has been able to achieve higher production accuracy and perfection in printing and to develop and introduce latest products.
3. In case of imported technology (imported during the last 3 years) following information may be furnished: Not Applicable
(a) Technology imported
(b) Year of import
(c) Has technology been fully AbsorbedRs.
(d) If not fully absorbed areas where this has not taken place easons therefore and future plans of action.
4. Expenditure on R & D Not Applicable

C) Foreign Exchange earnings and outgo

a) Activities relating to exports initiative taken to increase exports development ofnew export markets for products and services and export plans;

During the year the Company exported its products to Sri Lanka Bangladesh MauritiusUganda Rwanda Kenya United States of America Australia Egypt Kuwait UAE OmanThailand and Italy. Plans are also underway to take active participation in exhibitionsand fairs to reach new markets and thus enhancing sales.

b) Total foreign exchange used and earned FOR THE YEAR ENDED (Rs.in Lakhs)
31st March 2020 31st March 2019
(A) Total Foreign Exchange Earned 65.17 174.75
(B) Total Foreign Exchange Used 2416.58 2073.35

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