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Archies Ltd.

BSE: 532212 Sector: Others
NSE: ARCHIES ISIN Code: INE731A01020
BSE 00:00 | 19 Jun 21.50 0
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NSE 00:00 | 19 Jun 21.45 -0.35
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OPEN 21.85
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VOLUME 2124
52-Week high 40.00
52-Week low 20.35
P/E 102.38
Mkt Cap.(Rs cr) 73
Buy Price 21.50
Buy Qty 376.00
Sell Price 21.80
Sell Qty 600.00
OPEN 21.85
CLOSE 21.50
VOLUME 2124
52-Week high 40.00
52-Week low 20.35
P/E 102.38
Mkt Cap.(Rs cr) 73
Buy Price 21.50
Buy Qty 376.00
Sell Price 21.80
Sell Qty 600.00

Archies Ltd. (ARCHIES) - Director Report

Company director report

To The Members

Your Directors have great pleasure in presenting Twenty Eighth Annual Report of theCompany together with the Audited Annual Accounts for the year ended 31st March 2018.

PERFORMANCE REVIEW

During the year under review your Company recorded Revenue from Operations of ? 15782.07lacs as compared to ? 18626.10 lacs in the previous year showing a decrease of 15.27%.The net profit / loss after tax stood at ? (236.96) lacs in the currentfinancial year as against ? (369.59) lacs in the previous financial year showingan improvement of 35.89%.

In the challenging market scenario there has been slight dip in the Sales and theProfitability of the Company. Company closed the operations of the FMCG segment. A part ofdip is on account of change in the indirect tax structure in the Country. The Revenue fromOperations of the Company constitutes of:

• The Turnover of the gift segment is Rs. 10434.92 lacs as compared toRs. 12257.42lacs previous year down by 14.87%.

• The Turnover of the Greeting card segment is Rs. 2742.43 lacs as comparedto Rs. 3340.87 lacs previous year down by 17.91 %.

• The stationery sale is Rs. 2333.67 lacs as compared to Rs. 2703.88 lacsin the previous year down by 13.69%.

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

FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED (Rs in Lacs)
31 MARCH 2018 31 MARCH 2017
Income from Operations 15782.07 18626.10
Other Income 202.39 212.10
Total Expenditure 15586.94 18718.01
Operating profit (PBDIT) 397.52 120.19
Finance Costs 282.35 302.22
Depreciation 402.96 380.99
Profit / loss before Tax (PBT) (287.79) (563.02)
Provision for taxation
Current - -
Deferred (50.83) (193.43)
Profit / loss after Tax (236.96) (369.59)
APPROPRIATIONS
Transfer to General Reserve NIL NIL
Final Dividend (Proposed) NIL NIL
Tax on Proposed Dividend NIL NIL
Provision for Corporate Social Responsibility Activities NIL 12.13
Profit Carried Forward (236.96) (381.72)

FINANCIAL ACCOUNTING AND ADOPTION OF IND AS

The Ministry of Corporate Affairs (MCA) has notified phase- wise road map for theadoption of Indian Accounting Standard ("Ind AS") converged with InternationalFinancial Reporting Standards (IFRS) vide its notification date 16th February 2015announcing the Companies (Indian Accounting Standards) Rules 2015 as amended by IndianAccounting Standards ("ind AS") Rules 2016 and 2017 for application of the IndAS. Accordingly your Company has adopted Ind AS with effect from the FY 2017-18. YourCompany maintains highest Standards of Corporate Governance and recognizes that FinancialStatements are important source of information for the Shareholdeers and otherStakeholders. The Financial Statements for the FY 2017-18 are the First FinancialStatements with comparatives prepared under Ind AS. Notes to Standalone FinancialStatements provide further explanation on the transition to Ind AS.

DIVIDEND

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 2017-2018.

TRANSFER OF UNPAID UNCLAIMED DIVIDEND AND SHARES TO IEPF

During the FY 2017-18 unclaimed dividend for FY 2009-10 amounting to Rs. 150632(Rupees One Lac. Fifty Thousand Six Hundred Thirty Two only) was transferred to theInvestor Education and Protection Fund (IEPF) pursuant to the provisions of Section124(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 transferre 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 authority after following theprescribed procedure.

RETAIL EXPANSION

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 18 retail outlets and as on 31st March 2018 the numbers of Company owned/ managed stores were 217.

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 12% of Business in the year2018-19.

Your Company will continue with its efforts to open new outlets across India. Withexpectation of improvement in economy your Company has plans to open 25 more stores ofthe Company during the year 2018-19.

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 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 March2018 the 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 2018 and of the profit and loss of the Company for that period.

(Mi) 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 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.

DIRECTORS

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. Jagdish Moolchandaniretires by rotation and being eligible has offered to be re-appointed at the ensuingAnnual General Meeting.

The Board met four times during the year under review. Meetings were held on 25th May201710th August 2017 30th November 2017 and 31st January 2018.

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. P.K. Chadha Independent Director of the Company deceased on 23rd June 2017 andthus ceased to be a Director of the Company.

**Dr. Bhavna Chadha Independent Director of the Company resigned w.e.f 10th August2018. Further Mrs. Payal Jain is appointed as an additional Director of the Company w.e.f10th August 2018.

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. Seshan Ranganathan* (resigned as Chief Executive Officer w.e.f. 10.08.2017) Chief Executive Officer
4. Mr. Gautam Company Secretary

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 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.

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 Year2017-18 forms part of the Corporate Governance Report. AUDITORS

Under Section 139 of the Companies Act 2013 ('the Act') and the Rules made thereunderit is mandatory to rotate the statutory auditors on completion of the maximum termpermitted under the said section. In line with the requirements of the Act M/s J.P.Kapur & Uberai (FRN- 000593N) Chartered Accountants was appointed as the statutoryauditors of the Company to hold office for a period of five consecutive years from theconclusion of the 27th Annual General Meeting of the Company till the conclusion of the32nd Annual General Meeting subject to ratification by shareholders at the general meetingor as may be necessitated by the Act from time to time. The first year of audit was of thefinancial statements for the year ending March 312018 which included the audit of thequarterly financial statements for the year. Accordingly the appointment of M/s J.P.Kapur & Uberai is being placed before the shareholders for ratification.

The Board of Directors have recommended to appoint M/s J.P. Kapur & UberaiChartered Accountants the Statutory Auditors of the Company to audit the accounts of theCompany for the financial year 2018-19.

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.

AUDITOR'S REPORT

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.

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 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.

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.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Board has appointed M/s. Dayal & Maur Practising Company Secretaryto conduct Secretarial Audit for the financial year 2017-18. The Secretarial Audit Reportfor the financial year ended March 31 2018 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. ^1.02 Croresin a year for the financial year 2017-18 as per the provisions of section 197(12) of theCompanies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.

NOMINATION AND REMUNERATION POLICY

The Board of Directors have constituted Nomination and Remuneration Committee pursuantto section 178 of Companies Act 2013 and regulation 19 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 comprising Mr. Sunil Behl (Chairperson) Dr.Bhavna Chadha and Mr. Arun Singhal as members of the Committee. Dr. Bhavna Chadha memberof the Committee resigned w.e.f 10.08.2018. Further the vacancy created was filled by theappointment of Mrs. Payal Jain as the member of the Committee w.e.f 10.08.2018. The Boardof 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 - D and 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- https://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 https://www.archiesonline.com/htdocs/csr.pdf

During the year under review the Company has spent ? 900000/- on CSR activitiesagainst the balance unspent amount of ? 763363. The Annual Report on CSR activities isannexed 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 linkhttps://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 behaviour actual or suspected fraud and any violation of the Company'sBusiness Code of Conduct. The Policy also provides a direct access to the Chairperson ofthe Audit Committee to make protective disclosures to the management about grievances orviolation of the Company's Business Code of Conduct.

The Whistle Blower policy is also available on our website at the linkhttps://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 linkhttps://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 2018 comprises Independent Directors namely Mr.Sunil Behl Mr. Arun Singhal and Dr. Bhavna Chadha. All the recommendations made by theAudit Committee were accepted by the Board. Further Dr. Bhavna Chadha member of theCommittee resigned w.e.f 10.08.2018. Further the vacancy created was filled by theappointment of Mrs. Payal Jain as the member of the Committee w.e.f 10.08.2018.

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 https://www.archiesonline.com/htdocs/transactionPolicy.pdf.

Your Directors draw attention of the members to Note 33 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.

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 GIVENINVESTMENT 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
Place : Delhi Anil Moolchandani
Date : August 10 2018 Chairman and Managing Director
(DIN-00022693)