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Notes to Accounts of Archies Ltd.

Mar 31, 2015

1. GENERAL INFORMATION

Archies Ltd. is a public limited company, domiciled in India and its shares are listed on N.S.E. and B.S.E. The Company is a leader in the social expression industry in India and deals in Greeting Cards, Gifts and Stationery Products under the Brand name "Archies".The Company has 17 branches spread all over India and performs its operations through a systematic distribution network comprising of company owned Stores, Franchisee, Distributors and Retailers. It also exports its products.

2. Pari passu first charge in favour of ICICI bank Ltd., Citibank N.A. and Indusind Bank Ltd. by way of hypothecation of Stocks,

Book Debts and Movable Fixed Assets, both present and future, except assets specifically hypothecated,

3 Pari passu first charge in favour of ICICI Bank Ltd., Citibank N.A. and Indusind Bank Ltd. on the immovable property situated at Plot No. 260, Sector 6, IMT Manesar, Gurgaon, Haryana,

4. Personal Guarantee of Mr. Anil Moolchandani, CMD and Mr. Jagdish Moolchandani COO

Due to applicability of Schedule II to the Companies Act 2013 with effect from 01 April 2014, the Company has reviewed and revised the estimated useful lives, residual value and reclassified certain fixed assets based on technical study and other fixed assets in accordance with the said provision. Consequent to change of useful life, an amount of Rs. 884.02 Lacs (Net of deffered tax of Rs. 424.56 Lacs) representing carrying value of those assets whose useful life had expired as on 01 April 2014 has been adjusted against the opening balance in General Reserve. Had the Company, continued with the previous assessed useful lives, depreciation charged for the year ended 31 March 2015 would have been lower by Rs. 146.18 Lacs.

5. CAPITAL AND OTHER COMMITMENT

Capital Commitment - Estimated amount of contracts remaining to be executed on Capital Account (net of advances) and not provided for Rs. 22.53 Lacs (31 March 2014 Rs. 53.50 Lacs)

Other Commitment - Estimated amount of contracts remaining to be executed on Other Commitment (net of advances) and not provided for Rs. 208.76 Lacs (31 March 2014 Rs. 548.42 Lacs)

6. CONTINGENT LIABILITIES :

(Rs. in Lacs)

31 MARCH 2015 31 MARCH 2014

a) Income Tax Demand (Block Period) 340.27* 340.27*

b) Dispute of Rent Escalation 5.19 4.21 and CAM Charges

c) Vat penalty 0.99** Nil

d) Bank Guarantee 14.12 22.07

*A demand of Rs. 340.27 Lacs was raised against the company in block assessment, the Income Tax Appellate Tribunal (ITAT) partly allowed appeal of the company and demand was reduced to Rs. 29.83 Lacs. The Income Tax Department has filed an appeal in Hon'ble High Court of Delhi against the order of the Hon'ble ITAT.

** Vat panalty was demanded by the Department of Commercial Taxes Ernakulam. Company has filed an appeal with Deputy Commissioner of Commercial Taxes, Ernakulam (Edappally).

(iii) Notes to Segment information

Segment Revenue and Expense

* Joint revenues and expenses are allocated to the business segments on a reasonable basis to the extent possible.

Segment Assets and Liabilities

* Segment Assets include all Operating Assets used by Segment comprising Non-Current Assets and Current Assets.

Segment Liabilities include all Operating Liabilities Comprising Non-Current Liabilities and Current Liabilities.

Capital Employed

* Due to the nature of business and common manufacturing facilities for various Segments, a reasonable allocation of Capital Employed to various Segments is currently not practicable.

7. RELATED PARTY DISCLOSURES (AS-18)

(i) List of Related Parties with whom transactions have taken place and Relationships

S. Name of Related Party Relationship No.

1. Mr. Anil Moolchandani (Chairman-Cum-Managing Director)

Mr. Jagdish Moolchandani (Chief Operating Officer)

Mr. Pramod Arora* Key Management (Joint Managing Director) Personnel

Mr. Vijayant Chhabra** (Chief Executive Officer)

Mr. Dilip Seth*** Director (Finance) & CFO

Mr. Vikas Kumar Tak (Company Secretary)

2. Mrs. Neeru Moolchandani w/o Mr. Anil Moolchandani

Mrs. Pushpa Moolchandani w/o Mr. Jagdish Moolchandani

Mr. Varun Moolchandani s/o Mr. Anil Moolchandani

Mr. Karan Moolchandani s/o Relatives of Key Mr. Anil Moolchandani Management Personnel

Mr. Raghav Moolchandani s/o Mr. Jagdish Moolchandani

Mrs. Veena K. Talreja Sister of Mr. Anil Moolchandani &

Mr. Jagdish Moolchandani

Mr. Vikrant Chhabra Brother of Mr. Vijayant Chhabra

Mrs. Mohini Seth Mother of Mr. Dilip Seth

3. M/s Empire Greetings & Enterprises over Which Gifts Pvt. Ltd. Key Management M/s Rattanjee Personnel or their M/s Andani Corp. Relatives Exercise

Significant Influence

4. M/s Finesse Interactive Solution Enterprises over Which Pvt. Ltd.**** Director has interest

* Mr. Pramod Arora did not offer himself for re-appointment as Director in last AGM held on dt. 23.09.2014 and ceases to be Director w.e.f. dt. 23.09.2014.

** Mr. Vijayant Chhabra resigned from Executive Director w.e.f dt. 16.05.2014 and was appointed as Chief Executive Officer of the Company w.e.f. dt. 16.05.2014

*** Mr. Dilip Seth was appointed as CFO of the Company w.e.f. dt. 16.05.2014 and he is designated as Director (Finance) &CFO of the Company

**** Mr. DeepakThakkar was appointed as Non Executive Director w.e.f. dt. 07.08.2014

The Company has passed special resolution on 30th September 2011 for appointment & remuneration of Mr. Anil Moolchandani for 5 years. Due to inadequacy of the profits, the excess remuneration paid during the year shall be held by Mr. Anil Moolchandani in trust till the time the same is approved by shareholders in forthcoming AGM. The amount will be refunded by Mr. Anil Moolchandani if the shareholders donot approve this remuneration in the forthcoming AGM.

8. OPERATING LEASE (AS-19)

The Company has entered into operating lease arrangements for premises. Lease payments recognised in the statement of profit and loss under Non-cancelable Operating Leases in respect of these assets is Rs. 2874.07 Lacs (31 March 2014, Rs. 2933.31 Lacs), which includes contingent rents of Rs. 35.19 Lacs (31 March 2014,Rs. 51.89 Lacs). The Lease Agreements are further renewable after its expiry of initial term with a mutual consent, subject to revision in Lease rentals.


Mar 31, 2014

1. GENERAL INFORMATION

Archies Ltd. is a public limited company, domiciled in India and its shares are listed on N.S.E. and B.S.E. The Company is a leader in the social expression industry in India and deals in Greeting Cards, Gifts and Stationery Products under the Brand name "Archies". The Company has 17 branches spread all over India and performs its operations through a systematic distribution network comprising of company owned Stores, Franchisee, Distributors and Retailers. It also exports goods to overseas markets.

2. CONTINGENT LIABILITIES:

(Rs. in Lacs) 31 MARCH 2014 31 MARCH 2013

a) Income Tax Demand (Block Period) 340.27 340.27

b) Dispute of Rent Escalation and CAM Charges 4.21 6.60

*A demand of Rs. 340.27 Lacs was raised against the company in block assessment, the Income Tax Appellate Tribunal (ITAT) party allowed appeal of the company and demand was reduced to Rs. 29.83 Lacs. The Income Tax Department has filed an appeal in Hon''ble High Court of Delhi against the order of the Hon''ble ITAT.

(iii) Notes to Segment information

Segment Revenue and Expense

- Joint revenues and expenses are allocated to the business segments on a reasonable basis to the extent possible.

Segment Assets and Liabilities

- Segment Assets include all Operating Assets used by Segment comprising Non-Current Assets and Current Assets. Segment Liabilities include all Operating Liabilities Comprising Non-Current Liabilities and Current Liabilities.

Capital Employed

- Due to the nature of business and common manufacturing facilities for various Segments, a reasonable allocation of Capital Employed to various Segments is currently not practicable.

3. RELATED PARTY DISCLOSURES (AS-18)

(i) List of Related Parties with whom transactions have taken place and Relationships :¦

S. Name of Related Party Relationship No._

1. Mr. Anil Moolchandani (Chairman-Cum-Managing Director)

Mr. Jagdish Moolchandani* (Chief Operating Officer)

Mr. Pramod Arora Key Management

(Joint Managing Director) Personnel

Mr. Vijayant Chhabra (Executive Director)_

Mr. Dilip Seth Director (Finance)

2. Mrs. Neeru Moolchandani w/o Mr. Anil Moolchandani

Mrs. Pushpa Moolchandani w/o Mr. Jagdish Moolchandani

Mr. Varun Moolchandani s/o Mr. Anil Moolchandani

Mr. Karan Moolchandani s/o Relatives of Key

Mr. Anil Moolchandani Management Personnel

Mr. Raghav Moolchandani s/o Mr. Jagdish Moolchandani

Mrs. Veena K. Talreja Sister of Mr. Anil Moolchandani & Mr. Jagdish Moolchandani

Mr. Vikrant Chhabra Brother of Mr. Vijayant Chhabra

Mrs. Mohini Seth Mother of

Mr. Dilip Seth

3. M/s Empire Greetings & Enterprises over Which Gifts Pvt. Ltd. Key Management M/s Rattanjee Personnel or their M/s Andani Corp. Relatives Exercise.

Significant Influence

4. OPERATING LEASE (AS-19)

The Company has entered into operating lease arrangements for premises. Lease payments recognised in the statement of profit and loss under Non-cancelable Operating Leases in respect of these assets is Rs. 2933.31 Lacs (31 March 2013, Rs. 2819.35 Lacs), which includes contingent rents of Rs. 51.89 Lacs (31 March 2013, Rs. 54.89 Lacs). The Lease Agreements are further renewable after its expiry of initial term with a mutual consent, subject to revision in Lease rentals.


Mar 31, 2013

1. GENERAL INFORMATION

Archies Ltd. is a public limited company, domiciled in India and its shares are listed on N.S.E. and B.S.E. The Company is a leader in the social expression industry in India and deals in Greeting Cards, Gifts and Stationery Products under the Brand name "Archies". The Company has 17 branches spread all over India and performs its operations through a systematic distribution network comprising of company owned stores, Franchisee, Distributors and Retailers. It also exports goods to overseas markets.

2. CAPITAL AND OTHER COMMITMENT

Capital Commitment - Estimated amount of contracts remaining to be executed on Capital Account (net of advances) and not provided for 733.00 Lacs (31 March 2012 Rs.70.99 Lacs)

Other Commitment - Estimated amount of contracts remaining to be executed on Other Commitment (net of advances) and not provided for Rs. 71.24 Lacs (31 March 2012 Rs. 112.96 Lacs)

*On 7 January 2000 Income Tax Department carried out search & seizure operation and a demand was raised to the tune of Rs. 340.27 Lacs, which is disputed by the Company. The Company had filed an appeal against the order with CIT (Appeals) and the demand has been reduced to 7 74.82 Lacs. The Company had filed an appeal against the order of CIT (Appeals) with Hon''ble IncomeTax Appellate Tribunal. The Income Tax Department has also filed an appeal against the order of CIT (Appeals) with Hon''ble Income Tax Appellate Tribunal (ITAT). The Hon''ble ITAT vide its order dt. 31 May 2010, dismissed the appeal filed by the IncomeTax Department and partly allowed the appeal filed by the Company. The IncomeTax Department has filed an appeal in Hon''ble High Court of Delhi against the order of the Hon''ble ITAT.

There were disputed amount of Rs. 1.89 Lacs as on 31,03,2012 towards the VAT, CST & Entry Tax for the period 01.04.05 to 31.08.08. The disputed order has been set-aside for fresh assessment and the fresh order is awaited. An amount of Rs. 0.38 Lacs is deposited under protest.

(iii) Notes to Segment information

Segment Revenue and Expense

- Joint revenues and expenses are allocated to the business segments on a reasonable basis to the extent possible.

Segment Assets and Liabilities

- Segment Assets include all Operating Assets used by Segment comprising Non-Current Assets and Current Assets. Segment Liabilities include all Operating Liabilities Comprising Non-Current Liabilities and Current Liabilities.

Capital Employed

- Due to the nature of business and common manufacturing facilities for various Segments, a reasonable allocation of Capital Employed to various Segments is currently not practicable.

3. OPERATING LEASE (AS-19)

The Company has entered into operating lease arrangements for premises. Lease payments recognised in the statement of profit and loss under Non-cancelable Operating Leases in respect of these assets is Rs. 2819.35 Lacs (31 March 2012, Rs. 2711.01 Lacs), which includes contingent rents of Rs. 54.89 Lacs (31 March 2012, Rs. 37.02 Lacs). The Lease Agreements are further renewable after its expiry of initia


Mar 31, 2012

1. GENERAL INFORMATION

The Company was incorporated under the name "Archies Greeting: and Gifts Pvt. Lid." in the year 1990 and changed its name to "Archies Greetings and Gifts Ltd." in 1995, further in 2002 the name of the Company was changed to "Archies Limited ".The Company domiciled in India, is a public limited Company and its shares are listed on N.S.E, and B.S.E. The Company is into social expression industry and deals in Greeting Cards, Gifts and Stationery Products. It has set up a state of the art plant at IMT Manesar, Gurgaon, Haryana for manufacturing at Greeting Cards and Stationery products. The Company has 17 branches spread all over India and performs its operations through a systematic distribution network comprising of company owned stores, Franchisee, Distributors and Retailers.

2. LONG - TERM BORROWINGS

i. Subservient charge by way of hypothecation of the Stock, Book Debts and all Movable Fixed Assets, both present and future. Personal Guarantee of Mr. Anil Moolchandani, CMD and Mr. Jagdish Moolchandani, ED.

ii. Secured by exclusive charge on the specific asset by way of hypothecation.

iii. Against hypothecation of Vehicle.

iv The loan is repayable in Equated installments from the date of loan

v. The charges stated above are also applicable for securing the current portion of Long Term Liabilities as per Note no. 11

3. SHORT - TERM BORROWINGS

I. Pari passu First charge in favour of ICICI bank Ltd., Citibank N.A. and Industrial Bank Ltd. by way of hypothecation of Stocks.

Book Debts and Plant and Machinery, both present and future, except assets specifically hypothecated.

II. Personal Guarantee of Mr. Anil Moolchandani, CMD and Mr. Jagdish Moolchandani, ED.

4. CONTINGENT LIABILITIES:

(Rs. in Lacs)

31st MARCH, 2012 31st MARCH, 2011

a) Income Tan Demand (Block Period) 340.27* Nil

b) Service Tax on Rent Paid Nil 2.64

c) Dispute of Rent Escalation and CAM Charges 0.88 27.27

d) Dispute of VAT/CST/Entry Tax 1.83 1.89

*On 7th January, 2000 Income Tax Department carried out search & seizure operation and a demand was raised to the tune of Rs. 340.27 Lacs, which is disputed by the Company. The Company had filed an appeal against the order with CIT (Appeals) and the demand has been reduced to Rs. 74.32 Lacs. The Company had filed an appeal against the order of CIT (Appeals) with Hon'ble Income Tax Appellate Tribunal. The Income Tax Department has also filed an appeal against the order of CIT (Appeals) with Hon'ble Income Tax Appellate Tribunal (ITAT). The Hon'ble ITAT vide its order dt. 31st May, 2010, dismissed the appeal filed by the Income Tax Department and partly allowed the appeal filed by the Company. The Income Tax Department has filed an appeal in Hon'ble High Court of Delhi against the order of the Hon'ble ITAT.

(iii) Notes to Segment information

Segment Revenue and Expense

- Joint revenues and expenses are allocated to the business segments on a reasonable basis to the extent possible.

Segment Assets and Liabilities

- Segment Assets include all Operating Assets used by Segment comprising Non-Current Assets and Current Assets. Segment Liabilities include all Operating Liabilities principally of Current Liabilities*

Capital Employed

- Due to the nature of business and common manufacturing facilities for various Segments, a reasonable allocation of Capital Employed to various Segments is currently not practicable.

5. RELATED PARTY DISCLOSURES (AS-1B)

(i) List of Related Parties with whom transactions have taken place and Relationships ;-

Sl. Name of Related Party Relationship No.

1. Mr. Anil Moolchandani Key Management (Chairman-Cum-Managing Director) Personnel

Mr. Jagdish Moolchandani (Executive Director)

Mr. Pramod Arora (Joint Managing Director)

Mr. Vijayanti Chhabra (Executive Director)

2. Mrs. Neeru Moolchandani w/o Relatives of Key Mr. Anil Moolchandani Management Personnel

Mrs. Pushpa Moolcbandani w/o Mr. Jagdish Moolchandani

Mr. Varun Moolchandani s/o Mr. Anil Moolchandani

Mr. Karan Moolchandani s/o Mr. Anil Moolchandani

Mr. Raghav Moolchandani s/o Mr. Jagdish Moolchandani

Mrs. Veena K. Talreja Sister of Mr. Anil Moolchandani & Mr. Jagdish Moolchandani

Mr. Vikrant Chhabra Brother of Mr. Vijayant Chhabra

3. Empire Greetings & Gifts Pvt. Ltd. Enterprises over M/s. Rattanjee Which Key Andani Corp. Management Personnel or their Relatives Exercise Significant Influence


Mar 31, 2010

1. Figures of the previous year have been reworked, regrouped, rearranged and reclassified wherever necessary, to make them comparable with the current year figures. All figures and numbers appearing in these notes are in Lacs.

2. Capital commitment-estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs. 68.19 (Previous year Rs. 136.00)

3. RELATED PARTY DISCLOSURES (AS-18)

(i) LIST OF RELATED PARTIES WITH WHOM TRANSACTIONS HAVE TAKEN PLACE AND RELATIONSHIPS :-

S. Name of Related Party Relationship No.

1. Mr. Anil Moolchandani Key Management (Chairman Cum Managing Director) Personnel

Mr. Jagdish Moolchandani (Executive Director)

Mr. Pramod Arora (Joint Managing Director)

Mr. Vijayant Chhabra (Executive Director)

2.Mrs. Neeru Moolchandani w/o Relatives of Key Mr. Anil Moolchandani Management Personnel

Mrs. Pushpa Moolchandani w/o Mr. Jagdish Moolchandani

Mr. Varun Moolchandani s/o Mr. Anil Moolchandani

Mr. Karan Moolchandani s/o Mr. Anil Moolchandani

Mr. Raghav Moolchandani s/o Mr. Jagdish Moolchandani

Mrs. Veena K. Talreja Sister of Mr. Anil Moolchandani & Mr. Jagdish Moolchandani

Mr. Vikrant Chhabra Brother of Mr. Vijayant Chhabra

3. Empire Greetings & Gifts Pvt. Ltd. Enterprises over which key M/s Rattanjee management personnel Andani Corp. or their relatives exercise significant influence

4. Some of the debit and credit balances are subject to reconciliation and confirmation. The company is in the process of reconciling such balances.

5. Contingent Liabilities:

a) Estimated amount of Letters of Credit Rs. 96.38 (Previous Year: 274.91)

b) Estimated amount of Bank Guarantee Rs. 23.76 (Previous Year: 28.80)

c) Income Tax Demand (Block Period) Rs. 340.27* (Previous Year: 340.27)

d) Service Tax on Rent Paid Rs. 1.32 (Previous Year: 56.57)

e) Dispute of Rent Escalation and CAM Rs. 13.69 Charges (Previous Year: 00.40)

e) Dispute of VAT/CST/ Entry Tax Rs. 1.89 (Previous Year: Nil)

*On 7th January 2000 Income Tax Department carried out search & seizure operation and a demand was raised to the tune of

Rs. 340.27, which is disputed by the company. The company had filed an appeal against the order with CIT (Appeals) and the demand has been reduced to Rs. 74.82. The company has filed an appeal against the order of CIT( Appeals) with Income Tax Appellate Tribunal.The Income Tax Department has also filed an appeal against the order of CIT (Appeals) with Income Tax Appellate Tribunal.

6. Accounting for Taxes on Income (AS - 22):

The company has recognised following deferred tax assets & liabilities determined on account of timing differences in accordance with AS - 22 issued by the Institute of Chartered Accountants of India.

(iii) Notes to Segment information

Segment Revenue and Expense

- Joint revenues and expenses are allocated to the business segments on a reasonable basis to the extent possible.

Segment Assets and Liabilities

- Segment assets include all operating assets used by segment comprising fixed assets, Investments and Current assets, loan and advances. Segment liabilities include all operating liabilities principally of current liabilities and provisions.

Capital Employed

- Due to the nature of business and common manufacturing facilities for various segments, a reasonable allocation of capital employed to various segments is currently not practicable.

7. The company has initiated the process of obtaining confirmation from the suppliers who have registered themselves under the Micro, Small and Medium Enterprises Development Act 2006. Based on the information available with the company, there is no overdue amount at the year end in respect of suppliers covered under the said Act. Further no interest during the year has been paid or payable under the Act.

8. Operating Lease (AS-19)

The Company has entered into operating lease arrangements for premises. Lease payments recognised in the statement of profit and loss under non-cancelable operating leases in respect of these assets is Rs. 1838.96 (Previous Year Rs. 1455.37), which includes contingent rents of Rs. 27.44 (Previous Year Rs. 0.80). The lease agreements are further renewable after its

9. Security deposits received by the company from Franchises, Distributors and Agents are as per their respective agreement.

10. The Company has capitalised borrowing cost amounting to Rs. 0.93 (Previous Year Rs. 6.62) as per Accounting Standard 16 "Accounting for borrowing costs" issued by Institute of Chartered Accountants of India.

11. Schedules A to N form an integral part of the Balance Sheet and Profit & Loss Account as at 31 March 2010.

 
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