Archies Ltd Directors Report.
To The Members,
Your Directors have great pleasure in presenting 29th (Twenty Ninth) Annual Report of the Company together with the Audited Annual Accounts for the year ended 31 st March 2019.
During the year under review your Company recorded a Revenue from operations of Rs. 16136.44 Lakhs as compared to Rs. 15782.07 Lakhs in the previous financial year showing an increase of 2.25% and the net profit/ (loss) after tax stood at Rs. 72.61 Lakhs in the current financial year as against Rs. (236.96) Lakhs in the previous financial year, showing a increase of 130.64%.
In the challenging market scenario there has been slight increase in the Sales and the Profitability of the Company is improved. The Revenue from operations of the Company constitutes of:
The Turnover of the gift segment is Rs. 10489.83 lakhs as compared to Rs. 10434.92 lakhs previous year, increased by 0.53%.
The Turnover of the Greeting card segment is Rs. 2406.49 lakhs as compared to Rs. 2742.43 lakhs previous year, down by 12.25%.
The stationery sale is Rs. 2716.84 lakhs as compared to Rs. 2333.67 lakhs in the previous year, increased by 16.42%.
The Company owned / managed stores have significantly contributed towards Revenue from Operations and the profits.
|FINANCIAL HIGHLIGHTS||FOR THE YEAR ENDED ( Rs in Lakhs)|
|31st March 2019||31st March 2018|
|Income from Operations||16,136.44||15782.07|
|Operating Profit (PBDIT)||700.02||397.52|
|Interest & Finance Charge||269.79||282.35|
|Profit before Tax (PBT)||72.67||(287.79)|
|Provision for taxation|
|MAT Credit Entitlement||(14.96)||0.00|
|Profit after Tax||72.61||(236.96)|
|Transfer to General Reserve||NIL||NIL|
|Final Dividend (Proposed)||NIL||NIL|
|Tax on Proposed Dividend||NIL||NIL|
|Provision for Corporate Social Responsibility||NIL||NIL|
|Profit Carried Forward||72.61||(236.96)|
In view of the inadequate profit, during the year and need to conserve resources for the expansion of the business of your Company, Board expresses its inability to declare any dividend for the financial year 2018-19.
TRANSFER OF UNPAID UNCLAIMED DIVIDEND AND SHARES TO IEPF
During the FY 2018-19, unclaimed dividend for FY 2010-11 amounting to Rs. 1,24,952 ( Rupees One Lakh Twenty Four Thousand Nine Hundred Fifty Two Only) was transferred to the Investor 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 rules mentioned aforesaid, all shares in respect of which dividend has not been paid or claimed for 7 (Seven) consecutive years or more were also transferred in the name of IEPF after requisite notice to concerned Shareholders. Detail of such transferred shares are available at the Companys website i.e. www.archiesonline.com under "Investors" section and such shares can be claimed back from IEPF authority after following the prescribed procedure.
The Company continues its efforts to boost sales through different promotional schemes and campaigns and continued its effort to open retail outlets across India in Malls as well as on high Streets. The Company opened total 25 retail stores. As on 31st March 2019 the numbers of company owned/managed stores were 218.
The Company during the year took steps to improve sales and profitability by revamping its E-commerce platform, "archiesonline.com" by making it more user friendly and in line with the existing Indian ecommerce websites to attract more customers. Company has also tied up with various e-retailers who have vast presence in the virtual space like Flipkart, Snapdeal, E-India Store, Group on India, Saffron Art Pvt. Ltd., Gift A love.com, Phoolwala.com, My flower tree, Shopdues, Indian Gifts Portal, Fern N Petals & Bookaflower.com
Your Company will continue with its efforts to open new outlets across India. With expectation of improvement in economy, your Company has plans to open 25 more stores during the year 2019-20.
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance and Management Discussion and Analysis Report together with a certificate from the Companys Auditors confirming compliance is set out in the annexure forming part of report on Corporate Governance.
In compliance with the Corporate Governance requirements, the Company has implemented a Code of Conduct for all its Board Members and Senior Management Personnel, who have affirmed compliance thereto. The said Code of conduct has been posted on the Companys website.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of the knowledge and belief and according to the information and explanation obtained, your Directors make the following statements in terms of section 134(3) &(5) of the Companies Act, 2013:
(i) That in the preparation of the annual accounts for the year ended 31st March 2019, the applicable Accounting Standards have been followed, along with proper explanation relating to material departures, if any;
(ii) That such accounting policies as mentioned in the Notes to Accounts, have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent, so as to give a true and fair view to the state of affairs of the company as at 31st March, 2019 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 adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other 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 by the Company and that such internal financial controls are adequate and are operating effectively; and
(vi) That the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Pursuant to the provisions of section 152 of the Companies Act, 2013, atleast two-third of the Directors shall be subject to retirement by rotation out of which, one-third of such Directors must retire from office at each Annual General Meeting of the shareholders and a retiring directors eligible for re-election. Accordingly, Mr. Anil Moolchandani retires by rotation and being eligible, has offered to be re-appointed at the ensuing Annual General Meeting.
The Board met four times during the year under review. Meetings were held on 23rd May 2018,10th August 2018, 03rd November 2018 and 06th February, 2019.
All Independent Directors have given declarations that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges. The Board of Directors in its meeting held on 10th August, 2018 approved the following change in directorship of the Company as under:
a) Dr. Bhavna Chadha was resigned as Non-Executive and Independent Director of the Company with effect from 10.08.2018.
b) Mrs. Payal Jain was appointed as Non-Executive and Independent Director of the Company for a period of 3 (three) years with effect from 10.08.2018.
*Mr. Anil Moolchandani is re-appointed as a Chairman and Executive Director of the Company for a period of 2 (two) years with effect from 10th August, 2019 from its existing designation as Chairman and Non-Executive Director.
**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.
Varun Moolchandani is appointed as Additional Director (Executive) of the Company for a period of 2 (two) years with effect from 25.06.2019.
****Mr. Sunil Behl is re-appointed as an Independent Director (Non-Executive) of the company for a further period of 5 (five) years with effect from 23.09.2019.
*****Mr. Arun Singhal is re-appointed as an Independent Director (Non-Executive) of the company for a further period of 5 (five) years with effect from 23.09.2019.
******Mr. Kanav Dev Sharma is appointed as Non-Executive and independent Director of the Company for a period of 5 (five) years with effect from 19.08.2018.
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. Gautam**||Company Secretary|
*Mr. Anil Moolchandani is re-appointed as a Chairman and Executive Director of the Company for a period of 2 (two) years with effect fromlOth August, 2019 from its existing designation as Chairman and Non-Executive Director.
** Mr. Gautam, Company Secretary of the Company resigned w.e.f. 28.05.2019. Further Mr. Hitesh Kumar is appointed as Company Secretary of the Company w.e.f. 12.08.2019.
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board, in consultation with its Nomination & Remuneration Committee has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committee and Individual Directors, including Independent Directors.
A structured questionnaire was prepared after taking into consideration of the various aspects of the Boards functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.
Board members had submitted response on a scale of 4 (outstanding)-1 (needs improvement) for evaluating the entire Board, respective Committees of which they are members and of their peer Board members, including Chairman of the Board.
The Independent Directors had met separately without the presence of Non-Independent Directors 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 the Company after taking into consideration the views of executive and Non-Executive directors.
The Nomination and Remuneration Committee has also carried out evaluation of every Directors performance.
The performance evaluation of all the Independent Directors have been done by the entire Board, excluding the Director being evaluated.
The Board of Directors expressed their satisfaction with the evaluation process.
The Nomination and Remuneration Committee works with the Board on the Succession plan and 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 Year 2018-19 forms part of the Corporate Governance Report.
M/s J.P. Kapur & Uberai (FRN-000593N), Chartered Accountants was appointed as statutory auditors of the Company in the Annual General Meeting held on 28th September, 2017 for five years subject to ratification for four consecutive Annual General Meeting held after Annual General Meeting held on 28th September, 2017.
As per the Companies (Audit and Auditors) Amendment Rules 2018 dated 07.05.2018, the ratification of appointment of statutory auditors of the Company in every Annual General Meeting till Sixth Annual General Meeting has been omitted.
Therefore, M/s J.P. Kapur&Uberai (FRN-000593N), Chartered Accountants shall continue as statutory auditors of the Company for financial year 2019-20. There is no requirement of ratification of appointment of Statutory Auditors in ensuing Annual General Meeting.
The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any observation, qualification, reservation or adverse remark.
As per the new Companies (Cost Records and audit) Rules 2014 the appointment of Cost Auditor is not required for your Company
INTERNAL FINANCIAL CONTROLS
In terms of section 134 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has an Internal Financial Control System in relation to the policies and procedures adopted by the Company. The Company has in place adequate Internal Financial Control with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operations 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 of risk, adoption of risk management measures and a strong mechanism to deal with potential risks 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, foreign exchange 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 read with 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 required under Section 92(3) of the Companies Act, 2013 is annexed herewith asAnnexure-B and forms an integral part of this report.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Board has appointed M/s. Dayal & Maur, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report for the financial year ended March 31,2019 is annexed herewith as Annexure C to this Report and forms an integral part of this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
None of the Employees drew the salary more than the prescribed limit i.e. Rs 1.02 Crores in a year for the financial year 2018-19 as per the provisions of Section 197 (12) of the Companies Act, 2013 read with Rules 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Detail pertaining to Remuneration as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms a part of this report as Annexure-E.
NOMINATION AND REMUNERATION POLICY
The Board of Directors have constituted Nomination and Remuneration Committee pursuant to Section 178 of the Companies Act, 2013 and regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 comprising Mr. Sunil Behl (Chairperson), Mrs. Payal Jain and Mr. Arun Singhal as members of the Committee. Dr. Bhavna Chadha, Member of the Committee resigned w.e.f. 10.08.2018. Further the vacancy created was filled by the appointment of Mrs. Payal Jain as the member of the Committee w.e.f. 10.08.2018. The Board of Directors has formulated a policy which lays down a framework in relation to remuneration 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. The details of the Policy forms a part of this report as Annexure - D and the Details / Disclosures of Ratio of Remuneration to each Directo to the median employees remuneration as Annexure - E. The Nomination 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 and provisions comprising Mr. Sunil Behl (Chairperson), Mr. Anil Moolchandani and Mr. Dilip Seth as members of the Committee on 16th May, 2014. The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a CSR Policy indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities. The Corporate Social Responsibility policy is also available on our website at the link, http://www.archiesonline.com/htdocs/csr.pdf
Due to the loss in the Financial Year 2017-18, the Company has not spent any amount on CSR Activities in the Financial Year 2018-19. The Annual Report on CSR activities is annexed herewith as Annexure - F.
WHISTLE BLOWER POLICY/ VIGIL MECHANISM
The Board at its meeting held on 16th May 2014, adopted a Whistle Blower Policy/Vigil Mechanism in accordance with the provisions of the Companies Act 2013 and as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which provides a formal mechanism for all directors, employees and other stakeholders of the Company, to report to the management their genuine concerns or grievances about unethical behavior, actual or suspected fraud and any violation of the Companys Business Code of Conduct.
The Policy also provides a direct access to the Chairperson of the Audit Committee to make protective disclosures to the management about grievances or violation of the Companys 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 who will hear and redress the complaint made in writing by any aggrieved woman of sexual harassment at workplace as per the "Sexual Harassment of Woman At Workplace (Prevention, Prohibition and Redressal) Act, 2013".The Policy is also available on our 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 cases filed pursuant to the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The Audit Committee as on 31st March, 2019 comprises Independent Directors namely Mr. Sunil Behl, Mr. Arun Singhal and Mrs. Payal Jain. All the recommendations made by the Audit Committee were accepted by the Board. Dr. Bhavna Chadha, member of the Committee resigned w.e.f. 10.08.2018. Further the vacancy created was filled by the appointment 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 on arms length basis and in the ordinary course of business. Thus disclosure in Form AOC-2 is not required. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in 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 the Board for approval. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board is available on our website at the link, http://www.arch iesonline.com/htdocs/transactionPolicy.pdf.
Your Directors draw attention of the members to Note 31 to the financial statement which sets out related party disclosures.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to the Regulation 34(2) (e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Management Discussion and Analysis Report is annexured to this report.
During the year, your Company has not accepted and/or renewed any public deposits in terms 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 made and 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 and harmonious 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 would impact 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 where its Equity Shares are listed.
Your Directors would like to take this opportunity to express their sincere thanks to its valued franchisees, distributors, C & F agents, collaborators, bankers, Government authorities, customers and all other business associates for their continued co-operation and patronage. The Directors would also like to express their deep sense of appreciation to all the employees who are committed to strong work ethics, excellence in performance and commendable teamwork and have thrived in a challenging environment. The Directors wish to express their gratitude to the valued shareholders for their unwavering trust and support.
|For and on behalf of the Board|
|Place: Delhi||Anil Moolchandani|
|Date : 10th August, 2019||Chairman & Executive Director|
|(DIN : 00022693)|