Notes to Accounts of Archies Ltd.

Mar 31, 2024

2.10 Provisions

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows, if material, (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for.

2.11 Contingent liabilities

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

2.12 Foreign Currency Transactions

The Company''s financial statements are presented in Indian rupee (INR), which is also the Company''s functional and presentation currency.

Transactions in foreign currencies are translated into the functional currency at the exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Exchange differences resulting from such transactions are recognised in profit or loss.

2.13 Revenue Recognition Sale of Goods

Company''s revenues arise from sale and trading of ''Greeting Cards'', ''Stationery and paper bag items'', ''Gifts and others''.

The Company recognises revenue when (or as) the performance obligation is satisfied, which typically occurs when control is transferred upon shipment of goods to the customer or when the goods is made available to customer, provided transfer of title to the customer occurs and the Company has not retained any significant risks of ownership or future obligations with respect to the goods shipped.

Revenue from sale of goods in the course of ordinary activities is measured at the amount of transaction price, net of returns, trade discounts, rebates which the Company expects to be entitled to in exchange for transferring distinct goods to a customer as specified in the contract, excluding amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the government).

The consideration is fixed and not variable and the credit period varies between 0-60 days from the shipment or delivery of goods or services as the case may be. There is no significant financing component involved in the sale of goods.

Royalties Income

Royalties accrue in accordance with the terms of the relevant agreement and are recognised on that basis.

Interest Income

For all debt instruments measured either at amortised cost or at fair value through other comprehensive income, interest income is recorded using the effective interest rate (EIR) method as set out in IND AS 109.

Dividend Income

Dividend Income from investment is recognised when the right to receive the same is established, i.e. when shareholders approve the dividend.

2.14 Income Tax

Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to an item recognised directly in equity or in other comprehensive income.

i) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Minimum Alternate Tax (MAT) credit is recognised as an asset only to the extent and when there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount is written down to the extent there is no longer convincing evidence to the effect that the company will pay normal income tax during the specified period.

ii) Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. The Company recognises a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realised. Deferred tax assets - unrecognised or recognised, are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realised.

Deferred tax is measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

2.15 Segment Reporting

Segment Reporting are reported in the following manner as consistent with the internal reporting provided to the chairman and executive director as chief operating decision maker.

(i) Primary Segment

The Company operates in three primary business segments - Greeting cards. Stationery and Gifts.

(ii) Secondary Segment

The Company has operations within India as well as entities located in other countries. Its reportable segment is based on geographical location of its customers.

2.16 Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares, except where the results would be anti-dilutive.

2.17 Borrowing costs

Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

2.18 Government Grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.

Government Grants (Export Promotion Capital Goods License) relating to the purchase of capital goods are included in the Property, Plant and Equipment. Such Grants are also recognised under non-current liabilities and current liabilities as deferred income and recognised in the Statement of profit or loss as and when the export obligations are completed and presented within other income.

2.19 Leases

As a lessee

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, company''s incremental borrowing rate. The Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

a) Fixed payments, including in-substance fixed payments;

b) Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

c) Amounts expected to be payable under a residual value guarantee; and

d) The exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

The Company does not have leases of low value of assets.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company''s estimate of the amount expected to be payable under a residual value guarantee, or if company changes its assessment of whether it will exercise a purchase, extension or termination option.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Company presents right-of-use assets that do not meet the definition of investment property in ''property, plant and equipment'' and lease liabilities in ''Financial Liabilities'' in the Balance Sheet.

All the leases are either for running Company store or for use as office. All the terms are as per normal lease agreements. In few cases there is a lock-in period for both parties. All leases are for a fixed tenure. In few cases the lease can be renewed by mutual consent by increasing the consideration.

Company can terminate the lease after expiry of lock-in period. The lessor can terminate the agreement in case of default on the part of lessee.

In cases where the lessor has the right to terminate the lease giving few months'' notice has been covered under short term leases.

The cases where the Company has to pay consideration at some percentage of net sales have been considered as variable lease payments and covered under short term leases. The future cash outflows in such leases depend upon the future revenue of the Company and can''t be determined in advance.

There is no case where Company has to give residual value guarantee.

Short-term leases

The Company has applied the practical expedient in for accounting of short term leases i.e. it recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.

Standards / amendments issued but not yet effective:

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

b) There are numerous interpretative issues relating to the Honorable Supreme Court judgment on Provident Fund dated 28.02.2019. As a matter of caution, the Company has made a provision on a prospective basis from the date of the said order. The Company will update its provision, on receiving further clarity on the subject.

*A demand of ? 9.02 Lakhs of Tax Deducted at Source was raised against the company by Deputy Commissioner of Income Tax, Delhi for the Financial Year 2011-12 vide order dated 25.03.2019. Company has filed an appeal against the said order with Commissioner of Income Tax (Appeals).

# Pending resolutions of the respective proceedings, it is not practicable for the company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgments/decisions pending with the various forums/authorities.

c) During the year ended 31 March 2021, the company have received a claim for ? 502.34 lakhs(Net of charge of ? 0.11 lakhs) against a claim lodged for of ? 510.55 lakhs. Further the company have raised another claim to insurance company through legal notice dated 29 May 2021 for ? 219.59 lakhs including ? 95.44 lakhs for interest on delay in claim settlement as per Insurance Regulatory and Development Authority (IRDA) norms and ? 124.15 lakhs for excess deduction of stock. The company has also moved a petition to Delhi High Court for appointment of an arbitrator.

29. SEGMENT REPORTING/ DISAGGREGATION OF REVENUE

The Chief Operating Decision Maker, being the Chairman and Managing Director in the Company evaluates the company''s performance and allocates resources based on an analysis of various performance indicators by business segments and geographical segments. The Company''s financial reporting is organised into three major operating divisions viz. Greeting Cards, Stationery and Paper Bag Items, Gifts and Others. These divisions are the basis on which the company is reporting its primary segment information as follows:-

Financial Risk Management Financial risk factors

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

Market Risk

The company is exposed to foreign currency risk through its sales and purchases from overseas suppliers in US Dollar. The exchange rate between the rupee and US Dollar has changed substantially and may fluctuate substantially in the future. Consequently, the results of the Company''s operations are affected as the rupee appreciates / depreciates against US Dollar.

For each of the years ended 31 March 2024 and 31 March 2023, every percentage point depreciation/appreciation in the exchange rate between the Indian rupee and US Dollar, has affected the Company''s incremental operating margins by approximately 0.03% and 0.07% respectively.

Sensitivity analysis is computed based on the changes in the income and expenses in foreign currency upon conversion into functional currency, due to exchange rate fluctuations between the previous reporting year and the current reporting year.

Credit Risk

Credit risk, refers to the risk of default on its obligation by the customers resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to ? 797.96 lakhs and ? 884.66 lakhs as at 31 March 2024 and 31 March 2023, respectively. Trade receivables are typically unsecured and are derived from revenue earned from customers primarily located in India. Credit risk has always been managed by the Company through sale contract with customers and continuously monitoring the ageing of outstanding balance of customers to which the Company grants credit of 0-60 Days in the normal course of business. The Company uses the expected credit loss model as at each year end to assess the impairment loss or gain. No single customer accounted for more than 10% of the (a) Accounts receivable and (b) Revenues as at 31 March 2024 and 31 March 2023, respectively. There is no significant concentration of credit risk.

(f) Ageing analysis of trade receivables

Refer Note 9(a)

Liquidity Risk

The company''s principal sources of liquidity are cash and cash equivalents and the cash flows that is generated from operations. The company has taken working capital loans from banks for its working capital requirement. The company believes that the working capital is sufficient to mitigate its liquidity risk. Accordingly, no liquidity risk is perceived.

As at 31 March 2024, the Company had a working capital of ? 3,077.30 lakhs including cash and cash equivalents of ? 14.29 lakhs. As at 31 March 2023, the Company had a working capital of ? 4,115.27 lakhs including cash and cash equivalents of ? 28.68 lakhs.

(iii) The quarterly returns/statement of current assets filed by the company with Kotak Mahindra Bank Ltd, HDFC Bank Ltd. and ICICI Bank Ltd. are in agreement with the books of accounts.

(iv) The company has not been declared as a wilful defaulter by any bank or financial institution or any other lender.

(v) The company has used the borrowings from Kotak Mahindra Bank Ltd, HDFC Bank Ltd. and ICICI Bank Ltd. for the financial year ended 31 March 2024 and 31 March 2023 for working capital purposes.

(vi) The company does not have any intangible assets in it''s books of accounts as at 31 March 2024 and 31 March 2023, hence fair valuation of intangible assets is not applicable.

(vii) During the financial year ended 31 March 2024 and 31 March 2023 the Company does not have any relationship with Struck off Companies and the corresponding balances are Nil as at 31 March 2024 and 31 March 2023.

(viii) The provisions of clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017 are not applicable to the company.

(ix) No scheme of Arrangements has been approved by competent authority in terms of sections 230 to 237 of the Companies Act,2013 in respect of the Company.

(xi) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

No funds have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(xii) The Company has not recorded any transaction in the books of accounts during the year ended 31 March 2024 and 31 March 2023 that has been surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961.

(xiii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year ended 31 March 2024 and 31 March 2023.

(xiv) The provisions of Section 135 of the Companies Act, 2013 relating the Corporate Social Responsibility (CSR) are not applicable to the company.

(xv) The company does not hold any Invetsment Property in its books of accounts as at 31 March 2024 and 31 March 2023 hence fair valuation of investment property is not applicable.

(xvi) During the year, the company has not revalued any of its Property, Plant and Equipment.

(xvii) The company has not granted any loans or advances to Promoters, Directors, KMP''s and other related parties that are repayable on demand or without specifying any terms or period of repayment.

(xviii) No proceedings have been initiated or pending against the company under the Benami Transactions (Prohibition) Act,1988 during the financial year ended 31 March 2024 and 31 March 2023.

As per our report of even date attached

for UBEROI SOOD & KAPOOR For and on behalf of the Board of Directors

Chartered Accountants

(Firm Registration NO.001462N)

Anil Moolchandani

Chairman and Managing Director

S. D. SHARMA

PARTNER

(Membership No. 080399)

Place: New Delhi Jagdish Moolchandani Neha Singh

Date: 29 May 2024 Executive Director and Chief Company Secretary

Financial Officer

---

Mar 31, 2023

2.10 Provisions

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows, if material, (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for.

2.11 Contingent liabilities

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

2.12 Foreign Currency Transactions

The Company''s financial statements are presented in Indian rupee (INR), which is also the Company''s functional and presentation currency.

Transactions in foreign currencies are translated into the functional currency at the exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Exchange differences resulting from such transactions are recognised in profit or loss.

2.13 Revenue Recognition Sale of Goods

Company''s revenues arise from sale and trading of ''Greeting Cards'', ''Stationery and paper bag items'', ''Gifts and others''.

The Company recognises revenue when (or as) the performance obligation is satisfied, which typically occurs when control is transferred upon shipment of goods to the customer or when the goods is made available to customer, provided transfer of title to the customer occurs and the Company has not retained any significant risks of ownership or future obligations with respect to the goods shipped.

Revenue from sale of goods in the course of ordinary activities is measured at the amount of transaction price, net of returns, trade discounts, rebates which the Company expects to be entitled to in exchange for transferring distinct goods to a customer as specified in the contract, excluding amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the government).

The consideration is fixed and not variable and the credit period varies between 0-60 days from the shipment or delivery of goods or services as the case may be. There is no significant financing component involved in the sale of goods.

Royalties Income

Royalties accrue in accordance with the terms of the relevant agreement and are recognised on that basis.

Interest Income

For all debt instruments measured either at amortised cost or at fair value through other comprehensive income, interest income is recorded using the effective interest rate (EIR) method as set out in IND AS 109.

Dividend Income

Dividend Income from investment is recognised when the right to receive the same is established, i.e. when shareholders approve the dividend.

2.14 Income Tax

Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to an item recognised directly in equity or in other comprehensive income.

i) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Minimum Alternate Tax (MAT) credit is recognised as an asset only to the extent and when there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount is written down to the extent there is no longer convincing evidence to the effect that the company will pay normal income tax during the specified period.

ii) Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. The Company recognises a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realised. Deferred tax assets - unrecognised or recognised, are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realised.

Deferred tax is measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

2.15 Segment Reporting

Segment Reporting are reported in the following manner as consistent with the internal reporting provided to the chairman and executive director as chief operating decision maker.

(i) Primary Segment

The Company operates in three primary business segments - Greeting cards, Stationery and Gifts.

(ii) Secondary Segment

The Company has operations within India as well as entities located in other countries. Its reportable segment is based on geographical location of its customers.

2.16 Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares, except where the results would be anti-dilutive.

2.17 Borrowing costs

Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

2.18 Government Grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.

Government Grants (Export Promotion Capital Goods License) relating to the purchase of capital goods are included in the Property, Plant and Equipment. Such Grants are also recognised under non-current liabilities and current liabilities as deferred income and recognised in the Statement of profit or loss as and when the export obligations are completed and presented within other income.

2.19 Leases

As a lessee

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, company''s incremental borrowing rate. The Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

a) Fixed payments, including in-substance fixed payments;

b) Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

c) Amounts expected to be payable under a residual value guarantee; and

d) The exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

The Company does not have leases of low value of assets.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company''s estimate of the amount expected to be payable under a residual value guarantee, or if company changes its assessment of whether it will exercise a purchase, extension or termination option.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Company presents right-of-use assets that do not meet the definition of investment property in ''property, plant and equipment'' and lease liabilities in ''Financial Liabilities'' in the Balance Sheet.

All the leases are either for running Company store or for use as office. All the terms are as per normal lease agreements. In few cases there is a lock-in period for both parties. All leases are for a fixed tenure. In few cases the lease can be renewed by mutual consent by increasing the consideration.

Company can terminate the lease after expiry of lock-in period. The lessor can terminate the agreement in case of default on the part of lessee.

In cases where the lessor has the right to terminate the lease giving few months'' notice has been covered under short term leases.

The cases where the Company has to pay consideration at some percentage of net sales have been considered as variable lease payments and covered under short term leases. The future cash outflows in such leases depend upon the future revenue of the Company and can''t be determined in advance.

There is no case where Company has to give residual value guarantee.

Short-term leases

The Company has applied the practical expedient in for accounting of short term leases i.e. it recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.

Standards / amendments issued but not yet effective:

Ministry of Corporate Affairs (“MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from April 1, 2023, as below:

1) Ind AS 1 - Presentation of Financial Statements: The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements.

2) Ind AS 12- Income Taxes: The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences.

3) Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors: The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty". Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty.

The company does not expect the above amendments to have any significant impact in its financial statements.

Fair Value Hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

Financial Risk Management Financial risk factors

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

Market Risk

The company is exposed to foreign currency risk through its sales and purchases from overseas suppliers in US Dollar. The exchange rate between the rupee and US Dollar has changed substantially and may fluctuate substantially in the future. Consequently, the results of the Company''s operations are affected as the rupee appreciates / depreciates against US Dollar.

For each of the years ended 31 March 2023 and 31 March 2022, every percentage point depreciation/appreciation in the exchange rate between the Indian rupee and US Dollar, has affected the Company''s incremental operating margins by approximately 0.07% and 0.53% respectively.

Sensitivity analysis is computed based on the changes in the income and expenses in foreign currency upon conversion into functional currency, due to exchange rate fluctuations between the previous reporting year and the current reporting year.

Credit Risk

Credit risk, refers to the risk of default on its obligation by the customers resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to ? 884.66 lakhs and ? 919.33 lakhs as at 31 March 2023 and 31 March 2022, respectively. Trade receivables are typically unsecured and are derived from revenue earned from customers primarily located in India. Credit risk has always been managed by the Company through sale contract with customers and continuously monitoring the ageing of outstanding balance of customers to which the Company grants credit of 0-60 Days in the normal course of business. The Company uses the expected credit loss model as at each year end to assess the impairment loss or gain. No single customer accounted for more than 10% of the (a) Accounts receivable and (b) Revenues as at 31 March 2023 and 31 March 2022, respectively. There is no significant concentration of credit risk.

(a) Financial assets for which loss allowance is measured using 12 month expected credit losses.

The company has assets where the counter-parties have sufficient capacity to meet the obligation and where the risk of default is very low. Accordingly, no loss allowance for impairment has been recognised.

(b) Financial assets for which loss allowance is measured using life-time expected credit losses as per simplified approach.

The company has customer with capacity to meet the obligations and therefore the risk of default negligible or nil. Further, management believes that the unimpaired amounts that are past due by more than 60 days are still collectable in full, based on historical payment behavior and extensive analysis of customer credit risk. Hence, no impairment loss has been recognised during the reporting periods in respect of trade receivables.

(f) Ageing analysis of trade receivables

Refer Note 9(a)

Liquidity Risk

The company''s principal sources of liquidity are cash and cash equivalents and the cash flows that is generated from operations. The company has taken working capital loans from banks for its working capital requirement. The company believes that the working capital is sufficient to mitigate its liquidity risk. Accordingly, no liquidity risk is perceived.

As at 31 March 2023, the Company had a working capital of ? 4,115.27 lakhs including cash and cash equivalents of ? 28.68 lakhs. As at 31 March 2022, the Company had a working capital of ? 2,788.21 lakhs including cash and cash equivalents of ? 34.58 lakhs.

34. Operating Lease

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 ? 218.00 Lakhs (31 March 2022, ? 222.57 Lakhs) which includes contingent rents of ? 123.73 Lakhs (31 March 2022, ? 159.41 Lakhs).

Leases payments received (or receivable) recognised in the statement of profit and loss ? 35.91 Lakhs (31 March 2022 ? 35.33 Lakhs),

The Lease Agreements are further renewable after its expiry of initial term with a mutual consent, subject to revision in Lease rentals.

(iii) The quarterly returns / statement of current assets filed by the company with Kotak Mahindra Bank Ltd. and HDFC Bank Ltd. are in agreement with the books of accounts.

(iv) The company has not been declared as a wilful defaulter by any bank or financial institution or any other lender.

(v) The company has used the borrowings from Kotak Mahindra Bank Ltd. and HDFC Bank Ltd. for the financial year ended 31 March 2023 and 31 March 2022 for working capital purposes.

(vi) The company does not have any intangible assets in it''s books of accounts as at 31 March 2023 and 31 March 2022, hence fair valuation of intangible assets is not applicable.

(vii) During the financial year ended 31 March 2023 and 31 March 2022 the Company does not have any relationship with Struck off Companies and the corresponding balances are Nil as at 31 March 2023 and 31 March 2022.

(viii) The provisions of clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017 are not applicable to the company.

(ix) No scheme of Arrangements has been approved by competent authority in terms of sections 230 to 237 of the Companies Act,2013 in respect of the Company.

(x) The company has not provided nor taken any loan or advance to/from any other person or entity or invested any funds or provided any guarantee or security with the understanding that benefit of the transaction will go to a third party, the ultimate beneficiary.

(xi) The Company has not recorded any transaction in the books of accounts during the year ended 31 March 2023 and 31 March 2022 that has been surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961.

(xii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year ended 31 March 2023 and 31 March 2022.

(xiii) The provisions of Section 135 of the Companies Act, 2013 relating the Corporate Social Responsibility (CSR) are not applicable to the company.

(xiv) The company does not hold any Invetsment Property in its books of accounts as at 31 March 2023 and 31 March 2022 hence fair valuation of investment property is not applicable.

(xv) During the year, the company has not revalued any of its Property, Plant and Equipment.

(xvi) The company has not granted any loans or advances to Promoters, Directors, KMP''s and other related parties that are repayable on demand or without specifying any terms or period of repayment.

(xvii) No proceedings have been initiated or pending against the company under the Benami Transactions (Prohibition) Act,1988 during the financial year ended 31 March 2023 and 31 March 2022.

---

Mar 31, 2018

Note:

1. During the Financial Year 2016-17, the Company has changed the estimated useful life of certain Property Plant & Equipment, owing to which the Depreciation has reduced by Rs, 217.82, resulting in corresponding reduction in loss.

2. Addition to Property Plant & Equipment during the year includes borrowing cost capitalized Nil (31 March 2017 Nil) and (01 April 2016 Rs, 2.84)

3. For details of hypothecated Property, Plant & Equipment, refer to Note No. 13(a) & 17(a).

4. Land has been revalued during the year by an independent valuer. The carrying amount of asset would have been Rs, 921.87 had the asset been carried under the cost model.

i)- Pari passu first charge in favour of Kotak Mahindra Bank Ltd. and Inducing Bank Ltd. by way of hypothecation of Stocks, Book Debts and Movable Fixed Assets, both present and future, except assets specifically hypothecated.

ii)- Pari passu first charge in favour of Kotak Mahindra Bank Ltd. and Indusind Bank Ltd. on the immovable property situated at Plot No. 260, Sector 6, IMT Manesar, Gurgaon, Haryana.

iii)- Personal Guarantee of Mr. Anil Moolchandani, CMD and Mr. Jagdish Moolchandani ED.

28. CAPITAL AND OTHER COMMITMENT

Capital Commitment - Estimated amount of contracts remaining to be executed relating to Property, Plant and Equipment (net of advances) and not provided for X 7.65 Lacs (31 March 2017 Rs, 17.77 Lacs and 1 April 2016 X 13.00 Lacs)

Other Commitment - Estimated amount of contracts remaining to be executed on Other Commitment (net of advances) and not provided for

7 118.14 Lacs (31 March 2017 Rs, 78.22 Lacs and 1 April 2016 Rs, 36.33 Lacs)

*A demand of X 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 X 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.

**A demand of 16.67 Lacs was raised against the company by Assistant Commissioner of Income Tax for the FY 2010-11 vide order dated 28.03.2018. Company has filed an appeal against the said order with Commissioner of Income Tax (Appeals).

# Pending resolutions of the respective proceedings, it is not practicable for the company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgments/decisions pending with the various forums/authorities.

NOTES TO FINANCIAL STATEMENTS AS AT 31 MARCH 2018 Market Risk

The company is exposed to foreign currency risk through its sales and purchases from overseas suppliers in US Dollar. The exchange rate between the rupee and US Dollar has changed substantially and may fluctuate substantially in the future. Consequently, the results of the Company''s operations are adversely affected as the rupee appreciates / depreciates against US Dollar.

For each of the years ended 31 March 2018 and 31 March 2017, every percentage point depreciation/appreciation in the exchange rate between the Indian rupee and US Dollar, has affected the Company''s incremental operating margins by approximately 0.04%. Sensitivity analysis is computed based on the changes in the income and expenses in foreign currency upon conversion into function currency, due to exchange rate fluctuations between the previous reporting year and the current reporting year.

Credit Risk

Credit risk refers to the risk of default on its obligation by the customers resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to Rs,2199.17 lacs, Rs, 1995.67 lacs and Rs, 2183.96 as of 31 March 2018, 31 March 2017 and 1 April 2016, respectively. Trade receivables are typically unsecured and are derived from revenue earned from customers primarily located in India. Credit risk has always been managed by the Company through sale contract with customers and continuously monitoring the ageing of outstanding balance of customers to which the Company grants credit in the normal course of business. The Company uses the expected credit loss model as at each year end to assess the impairment loss or gain. No single customer accounted for more than 10% of the accounts receivable as of 31 March 2018 , 31 March 2017 and 1 April 2016 , respectively and revenues for the year ended 31 March 2018 and 31 March 2017, respectively. There is no significant concentration of credit risk.

Credit Risk Exposure

The allowance for lifetime ECL on customer balances for the year ended 31 March 2018 was Rs,1.43 lacs. The reversal for life time ECL on customer balances for the year ended 31 March 2017 wasRs, 1.33 Lacs.

in Ian;

Liquidity Risk

The company''s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The company has taken working capital loans from Banks for its Working Capital requirement. The company believes that the working capital is sufficient to mitigate its liquidity risk. Accordingly, no liquidity risk is perceived.

As of 31 March 2018, the Company had a working capital of Rs, 3,566 lacs including cash and cash equivalents of Rs, 78.41 lacs. As of 31 March 2017, the Company had a working capital ofRs, 3,727.81 lacs including cash and cash equivalents ofRs, 76.98 lacs.

* No specific assets are held for export.

(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.

Segment Liabilities include all Operating 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.

NOTES TO FINANCIAL STATEMENTS AS AT 31 MARCH 2018

Mr. Jagdish Moolchandani resigned from the post of Chief Operating Officer w.e.f 09.08.2016 and he was appointed as a Director (Executive) of the Company w.e.f 10.08.2016.

** Mr. Prem Kumar Chadha, Independent Director of the Company deceased on 23.06.2017 and thus ceased to be a Director of the Company.

*** Mr. Deepak Thakkar resigned from the post of Non Executive Director of the Company w.e.f 05.01.2017

**** Mr. Vijayant Chhabra resigned from the post of Chief Executive Officer w.e.f 08.08.2016.

Mr. Seshan Ranganathan was appointed as Chief Execuitve Officer of the Company w.e.f 09.08.2016. Further he resigned from the post of Chief Executive Officer w.e.f 10.08.2017

***** Refer to Note 34 for information on transactions with post employment benefits plans mention above.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the total borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any borrowing in the current year.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31 March 2018 and 31 March 2017.

1. OPERATING LEASE (INDAS-17)

The Company has entered into Operating Lease arrangements for premises. Lease payments recognized in the Statement of Profit and Loss under Non-cancelable Operating Leases in respect of these assets is Rs, 2535.50 Lacs (31 March 2017, Rs, 2884.01 Lacs), which includes contingent rents of Rs, 4.71 Lacs (31 March 2017, X 28.54 Lacs).

Leases payments received (or receivable) recognized in the statement of profit and loss X 56.25 Lacs (31 March 2017, X 67.18 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, 2016

Note:

1. 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 provisions. Consequent to change of useful life, an amount of X Nill (31 March 2015, Rs, 884.02 lacs Net of differed 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.

2. Addition to fixed assets during the year includes borrowing cost capitalized Rs, 2.84 (31 March 2015 Rs, Nill)

3. 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, 13.00 Lacs (31 March 2015Rs, 22.53 Lacs)

Other Commitment - Estimated amount of contracts remaining to be executed on Other Commitment (net of advances) and not provided for Rs, 36.33 Lacs (31 March 2015 Rs, 208.76 Lacs)

*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.

(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.

* 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. Vikas Kumar Tak Resigned from the post of Company Secretary w.e.f. 20.05.2015. Mr. Pankaj Kamra was appointed as Company Secretary w.e.f. 20.05.2015 and he resigned from the post w.e.f. 09.02.2016. Mr. Gautam was appointed as Company Secretary w.e.f. 09.02.2016.

4. OPERATING LEASE (AS-19)

The Company has entered into operating lease arrangements for premises. Lease payments recognized in the statement of profit and loss under Non-cancelable Operating Leases in respect of these assets is Rs, 2808.27 Lacs (31 March 2015, Rs, 2874.07 Lacs), which includes contingent rents ofRs, 19.05 Lacs (31 March 2015, Rs, 35.19 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, 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.

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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

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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

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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.