Your Directors are pleased to present the 35th Annual Report together withthe Audited Accounts for the financial year ended 31st March 2016.
1. RESULTS OF OUR OPERATIONS
i.) Summarized Standalone Financial Results-Arshiya Limited
|Particulars ||Year ended 31.03.2016 ||Year ended 31.03.2015 |
| ||(Amount In Rs.) ||(Amount In Rs.) |
|Income ||647707541 ||511075937 |
|Expenditure ||2138503840 ||2518172369 |
|Profit/(Loss) Before Depreciation and Tax ||(1490796299) ||(2007096432) |
|Depreciation ||235870091 ||292201514 |
|Profit/(Loss) Before Tax and Exceptional Items ||(1726666390) ||(2299297946) |
|Exceptional Items (Net) ||1028123576 ||108994018 |
|Prior period Items (Net) ||4722060 ||31739997 |
|Profit/(Loss) After Tax ||(2783949721) ||(240031961) |
ii.) Summarized Consolidated Financial Results - Arshiya Limited and its subsidiaries
|Particulars ||Year ended 31.03.2016 ||Year ended 31.03.2015 |
| ||(AmountIn Rs.) ||(AmountIn Rs.) |
|Income ||3104041448 ||3262650150 |
|Expenditure ||5973479783 ||6953252909 |
|Profit/(Loss) Before Depreciation and Tax ||(2869438335) ||(3690602757) |
|Depreciation ||916020304 ||1010933233 |
|Profit/(Loss) Before Tax and Exceptional Items ||(3785458638) ||(4701535990) |
|Exceptional Items ||2230367978 ||59577099 |
|Prior Period Adjustments ||(10288660) ||35474825 |
|Profit/ (Loss) for the year before tax ||(6005537956) ||(4796587914) |
|Net Profit/ (Loss) for the year ||(6037525651) ||(4740069133) |
The consolidated Financial Statements of the Company are prepared in accordance withrelevant Accounting Standards viz. AS-21 AS-23 and AS-27 issued by the Institute ofChartered Accountants of India and forms part of this Annual Report.
Your Company has recorded a loss during the financial year. The general overallslowdown in industrial growth and sluggish trend had its negative impact on your Company'soperations. Besides your Company had to face various constraints in the day to dayoperations due to regulatory and other issues which have severely impacted the performanceof the Company.
However the Company has been consistently taking up these issues with the appropriateAuthorities. Recently the Ministry of Commerce and Industry as well as other concernedGovernment departments have granted certain permissions/ approvals which has removed fewof the hurdles that were faced by the company which will boost FTWZ business in India.
Besides above several initiatives and measures undertaken by the company for marketingand business development of FTWZ rationalisation of expenses cost reductionsimprovement of effective utilisation of human & material resources to the optimumlevel would substantially help in improvement of performance of the company. YourManagement considered it expedient to contain high finance costs so that cash flow can bechannelized to operations for further productivity. To effectively service the borrowingsyour Management has implemented Corporate Debt Restructuring (CDR) during 2013-14. Sincethe company has not been able to generate sufficient cash flows to service the dues oflenders the CDR lenders revoked the approved CDR Package and decided to exit the CDR.Further some of the CDR lenders have assigned their outstanding dues to Edelweiss AssetReconstruction Company Limited.
In view of losses the Directors regret their inability to recommend dividend for thefinancial year ended 31st March 2016.
iv.) Particulars of loans guarantees and investments by company
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to Financial Statements.
v.) Fixed Deposits
The Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.
vi.) Particulars of Contracts or arrangements made with related party(ies)
Particulars of contracts or arrangement with related parties referred to in Section188(1) of the Companies Act 2013 in the prescribed Form No. AOC-2 is appended as Annexure-Ito the Board's report.
Further Mr. Ananya A Mittal son of Mr. Ajay S Mittal and Mrs. Archana A MittalPromoters of the Company have been appointed as Vice President-Strategy of ArshiyaIndustrial & Distribution Huh Limited a wholly-owned subsidiary of the Company. TheBoard of Directors of your Company at their meeting held on 15th May 2015 haveapproved his appointment to the place of profit in the subsidiary. The Board of ArshiyaIndustrial & Distribution Hub Limited approved his appointment at their Meeting heldon 30th June 2015 to be effective from 1st July 2015. Furthersince the remuneration paid to him is within the limit of Rs. 250000/- per month asspecified in Rule 15(3)(b) of the Companies (Meetings of Board and its Powers) Rules 2014hence shareholders' approval was not required for his appointment.
vii.) Material changes and commitment if any affecting the financial position of thecompany occurred between the end of the financial year to which this financial statementsrelate and the date of the report
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateand on the date of this report.
viii.) Share Capital
The paid-up equity share capital of the Company as at 31st March 2016 stoodat Rs. 312358944/- (Rupees Thirty One Crores Twenty Three Lakhs Fifty Eight ThousandNine Hundred Forty Four only). During the year under review the Company has allotted28750000 equity shares of Rs. 2/- each at a price of Rs. 14.60/- per share to thePromoters on preferential basis pursuant to the CDR scheme as approved by the CDR-EG.
2. BUSINESS AND FUTURE OUTLOOK:
i.) Business Initiatives
India has 12 major ports and about 187 non-major ports. In financial year 2015 majorports handled 581.3 million metric tonnes (MMT) of cargo while non-major ports handled471.2 MMT of cargo.
Since ports handle almost 95 per cent of trade volumes in India the rising trade hascontributed significantly to the country's cargo traffic. To support the growing demandcargo capacity in India is expected to increase to 2500 MMT by 2017.
Indian logistics market is expected to grow at a CAGR of 12% by 2020 driven by thegrowth in the manufacturing retail FMCG and e-commerce sectors. Today India spendsaround 14% of its GDP on Logistics and Transportation as compared to less than 8% spent bythe other developing countries.
Out of the total Exim cargo in India over 1 million TEUS of containerized cargo ismoving from the Northern part of India through gateway ports of JNPT Mundra & Pipavavwhich is consistently increasing and therefore this part of India has been demanding moreInland Container Depot facilities to he provided to the exporters and the importers forcatering to such volumes.
This growth will require huge logistical support in terms of world class infrastructureand Container Train operations for movement of goods across the country. Arshiya Group isfully geared to cater to the anticipated boom in the Indian logistics scenario.
Rail and Rail Infrastructure
In April 2008 Arshiya acquired Category I license to operate Pan-India rail servicegiving rise to Arshiya Rail Infrastructure Limited (Arshiya Rail). Arshiya Rail is aspecialized entity of Arshiya Limited offering unprecedented rail infrastructureincluding an abundance of modern rakes customized containers new sidings Pan-Indianetwork and superior connectivity. Arshiya Rail has started its operations in February2009 with corporate clients by offering unique and specialized services with capability oflarge scale evacuation of cargo from Plants Domestic hubs and Customer Sidings. ArshiyaRail offers a viable alternative clearing up congested roads providing unmatchedefficiencies and promises to save time and cost significantly thereby boostingprofitability.
Our unique model has resulted in Arshiya Rail being the second largest PrivateContainer Train Operator (CTO) This company is operating total 18 container trains acrossPan India.
Arshiya Rail is giving customized and long term freight services to big corporateclients to various gateway ports like Vizag Kolkata Mumbai and Haldia.
Private Freight Terminal (PFT) at Khurja
Arshiya Rail Siding at Khurja was notified as a Brownfield PFT for handling all typesof inward and outward traffic in full rakes also being the first to be notified inNational Capital Region (NCR). Arshiya is successfully operating its PFT model attractingdifferent cargo and train operators.
Apart from the existing container trains coming into Arshiya Rail InfrastructureKhurja (ARIK) with commodities such as Ingots Billets and Sponge Iron the CementIndustry too is looking at Khurja terminal for feeding their plants and end users locatedin and around Delhi NCR.
With investments increasing in setting up of Cement (Grinding and Mixing) plants in andaround Khurja ARIK can expect to see its utilization in in-warding of raw material fromvarious sectors and out-warding of finished product in times to come.
The terminal opens itself to other commodities also which will be critical to thegrowth of business in that region such as Iron & Steel Salt and essential commoditiesetc.
Free Trade and Warehousing Zone (FTWZ):
The Arshiya Group has created valuable tangible assets in logistic space. Theoperational FTWZ at Panvel is spread over 142 acres of land while the Northern FTWZ atKhurja is spread over 127 acres of land. The facilities of Arshiya Group are wellconnected by rail and road networks. North facilities co-located with the Inland ContainerDepot (ICD) which facilitates EXIM cargo storage and handling operations.
Arshiya Northern FTWZ Limited (ANFL) a subsidiary has developed a FTWZ at KhurjaUttar Pradesh to cater to the needs of Northern India. The state-of-the artinfrastructure includes Rail connectivity and an ICD to provide efficient connectivitybetween the gateway ports and the FTWZ. At present there are no FTWZ present within DelhiNCR.
FTWZ is still a young concept in India and gradually the Trade is beginning torecognize its benefits. A lot of potential clients struggle hard to recover taxes andduties paid during imports. They face the burden of spending heavy amounts towardsrecovery expenses apart from the time consumed in foregoing the duties paid because oflack of provisions. FTWZ is a solution to all the hassles faced by clients and recentlymanagement took lot of good business initiatives to drive growth and business results.
Some of the key initiatives have been:
Synergizing with ICD sales team to create an unique "ICD-FTWZ" pullmodel to generate more business
Market segmentation exercise based on target commodities
Creation of a strong focused sales team
Focus on large volume based reputed potential foreign clients
Boosting our marketing efforts by participating in trade events creating newbrochures Inland Container Depot (ICD):
In April 2016 the Inland Container Depot (ICD) at Khurja (UP) was finally launched andis declared open to the Exim Trade for business. On 30th April 2016 the ICDran its 1st Exim rail service to Mundra port which was well received by theTrade.
Being in close proximity to the Reefer Export market we have received huge positiveresponse from the market and have begun to receive regular bookings. We have initiatedstrong marketing efforts with all Shipping Lines to open acceptance points which is thekey to our success.
In order to cater to market demands Arshiya soon plans to offer regular Rail servicesto all major gateway ports.
Supply Chain Management:
Arshiya Supply Chain Management Private Limited a subsidiary is a service unit atArshiya FTWZ Panvel and Khurja. The main activities of the company are to serving theIndian and foreign clients and carry out Value Added Service (VAS) as per client'srequirements. With our focus on gaining Foreign Clients we expect good volumesmaterializing in near future.
Subsidiaries and Associates
Your Company has 12 subsidiary companies including 2 Material Subsidiaries and 3 stepdown subsidiaries as on 31st March 2016.
During the year the Board of Directors reviewed the affairs of the subsidiaries. Inaccordance with Section 129(3) of the Companies Act 2013 we have prepared consolidatedfinancial statements of the Company and all its subsidiaries which form part of theAnnual Report. Further a statement containing salient features of the financial statementof our subsidiaries
in the prescribed FormNo. AOC-1 is appended as Annexure-II to the Board'sReport. The Statement also provides the details of performance financial positions ofeach of the subsidiary.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on our websitewww.arshivalimited.com . These documents will also be available for inspection duringbusiness hours at the registered office in Mumbai India.
3. CORPORATE GOVERNANCE
Corporate Governance is the system by which companies are directed and controlled. Thepurpose of Corporate Governance is to facilitate effective entrepreneurial and prudentmanagement that can deliver the long-term success of the company. The goal of CorporateGovernance is to ensure fairness of every stakeholder. We always seek to ensure that ourperformance is driven by integrity. We believe sound Corporate Governance is critical toenhance and retain investor trust. This is ensured by taking ethical business decisionsand conducting business with a firm commitment to values while meeting stakeholders'expectations. The Company has been following the principles of good Corporate Governanceover the years and lays strong emphasis on transparency accountability and integrity.
A separate section on Corporate Governance practices followed by the Company togetherwith a certificate from Company's Auditors confirming compliances as per SEBIRegulations forms part of this Annual Report.
i.) Board Diversity
The Company recognises and embraces the importance of a diverse Board in its success.We believe that a truly diverse Board will leverage difference in thought perspectivesknowledge skill regional and industry experience cultural and geographical background.The Board has adopted the Policy on Board Diversity which sets out the approach todiversity of the Board of Directors and the same is available on our websitehttp://www.arshivalimited.com/assets/pdf/policv-on- board-diversitv20160407104216.pdf .
ii.) Number of meetings of the Board
During the year eight meetings were held. The details of the meetings of the Board heldduring the financial year 2015-16 forms part of the Corporate Governance Report. Theintervening gap between any two meetings did not exceed 120 days as prescribed byRegulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 and the Companies Act 2013.
iii.) Policy on Director's Appointment and Remuneration
The Current policy of Board of Directors of the Company has an optimum combination ofPromoter Director and NonExecutive Independent Directors who have in depth knowledge ofthe business and industry. The composition of the Board is in conformity with the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and the Companies Act2013.
The policy of the Company on Directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters as required under sub-section (3) of Section 178 of the Companies Act2013 is available on our website http://www.arshiyalimited.com/assets/pdf/nominatinn-and-remuneration-policv20160407103702.pdf . There has been no change in the policy since thelast financial year. We affirm that the remuneration paid to the Directors is as per theterms laid out in the Nomination and Remuneration Policy of the Company.
iv.) Declaration by Independent Directors
The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 to meet the criteria of their independence aslaid down in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
v.) Board evaluation
SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandates thatthe Board shall monitor and review the Board evaluation framework. A structuredquestionnaire was prepared after taking into consideration of the various aspects of theBoard's functioning composition of the Board and its Committees culture execution andperformance of specific duties obligations and governance.
The Companies Act 2013 states that a formal annual evaluation needs to be made by theBoard of its own performance and that of its committees and individual directors. ScheduleIV of the Companies Act 2013 states that the performance evaluation of IndependentDirectors shall be done by the entire Board of Directors excluding the director beingevaluated.
The evaluation of all the directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board. The performance evaluation of the Chairmanand the n on-independent Director(s) was carried out by the Independent Directors. TheBoard of Directors expressed their satisfaction with the evaluation process.
vi.) Familiarisation Program for Independent Directors
All new Independent Directors whenever inducted in the Board attend the orientationprogram. The details of training and familiarisation program for Independent Directorswith the Company nature of the Industry in which the Company operates business model ofthe Company and related matters are available on our websitehttp://www.arshiyalimited.com/assets/pdf/familarisation-programmes20160407103729.pdf .
Further at the time of the appointment of Independent Director the Company issues aformal letter of appointment outlining his/her role function duties andresponsibilities. The format of the letter of appointment is available on our websitehttp://www.arshivalimited.com/assets/pdf/appointment-letters20160407091114.pdf .
vii.) Code of Conduct for prevention of Insider Trading
The Board of Directors has adopted the Insider Trading Policy in accordance with therequirement of SEBI (Prohibition of Insider Trading) Regulations 2015. The InsiderTrading Policy of the Company lays down guidelines and procedures to be followed anddisclosures to be made while dealing with the shares of the Company as well as theconsequences of violation. The policy has been formulated to regulate monitor and ensurereporting of deals by employees and to maintain the highest ethical standards of dealingin Company securities.
The Insider Trading Policy of the Company covering code of practices and procedures forfair disclosure of unpublished price sensitive information and code of conduct forprevention of insider trading is available on our websitehttp://www.arshivalimited.com/assets/pdf/insider-trading-code2016040709Q651.pdf
viii.) Uniform Listing Agreement
The Securities Exchange Board of India (SEBI) on 2nd September 2015issued SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 with theaim to consolidate and streamline the provisions of the Listing Agreement for differentsegments of capital markets to ensure better enforceability. The said regulations wereeffective from 1st December 2015. Accordingly all listed entities wererequired to enter into uniform Listing Agreement within six months from the date ofnotification of the aforementioned regulations. The Company entered into Listing Agreementwith BSE Limited and the National Stock Exchange of India Limited on 23rdFebruary 2016.
The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandatedthe formulation of certain policies for all listed companies. Also the Companies Act 2013requires the Company to formulate few policies. All our corporate governance policies areavailable on our website http://www.arshivalimited.com /corporate-governance.html. ThePolicies are reviewed periodically by the Board and updated based on need and newcompliance requirement.
In addition to its Code of Conduct and Ethics key policies that have been adopted bythe company are as follows:
|Name of the Policy ||Brief Description ||Web Link |
|Nomination and Remuneration Policy ||The purpose of this policy is to lay down a framework in relation to remuneration of directors KMP senior management personnel and other employees. ||httn: //www.arshivalimited.co m/assets/ndf/nomination- and-remuneration- Dolicv20160407103702.ndf |
|Related Party Transaction Policy ||The purpose of this policy is to regulate all transactions between the Company and its related parties. ||httn: //www.arshivalimited.co m/assets/ndf/related-nartv- transaction- Dolicv20160407103809.ndf |
|Code of conduct for prevention of insider trading& Code of corporate disclosure practices ||The purpose of this Policy is to provide the framework for dealing in securities of the Company. ||httn: //www.arshivalimited.co m /assets /ndf/insider-tradine- code20160407090651.ndf |
|Policy on Material Subsidiary ||The purpose of this policy is to determine the material subsidiaries and to provide the governance framework for them. ||httn: //www.arshivalimited.co m /assets /Ddf/Dolicv-on- material- suhsidiaries20160407103840. ndf |
|Risk Management Policy ||The purpose of this policy is to lay down the framework of the Risk Management ||httn: //www.arshivalimited.co m /assets /ndf/risk- management- policv20160407103904.pdf |
|Whistle Blower Policy (Policy on Vigil Mechanism) ||The purpose of this policy is to provide mechanism for Directors and Employees to report concerns about unethical behaviour actual or suspected fraud or violation of the Company's code of conduct and ethics. ||httn: //www.arshivalimited.co m /assets /ndf/vieil- mechanism-whistle-blower- nolicv20160407104143.ndf |
|Policy on Board Diversity ||The purpose of this policy is to have optimum combination of Directors from different areas and fields. ||httn: //www.arshivalimited.co m /assets /Ddf/Dolicv-on- board- diversitv20160407104216.ndf |
|Archival Policy ||The purpose of this Policy is to archive any of the material events or information which are disclosed by the Company to the Stock Exchanges. ||httn: //www.arshivalimited.co m /assets /ndf/archival- nolicv 120160613145605.ndf |
|Policy for determination of Materiality of any event/information ||The purpose of this Policy is to determine materiality of events and information and to ensure that the Company shall make disclosure of events/information. ||httn: //www.arshivalimited.co m /assets /Ddf/Dolicv-for- determination-of-materialitv- of-anv-event information 12016061314552 1.pdf |
|Policy for preservation of documents ||The purpose of this Policy is to ensure that all the necessary documents and records of the Company are adequately protected and preserved as per the statutory requirements. ||httn: //www.arshivalimited.co m/assets/pdf/policv-for- nreservation-of- documents 12016061314505 7-pdf |
|Policy on Corporate Social Responsibility ||The purpose of this policy is to identify the activities wherein the Company can contribute for fulfilling its Corporate Social Responsibility. ||httn: //www.arshivalimited.co m /arshiva /assets /ndf/csr- nolicv 120160620105217.Ddf |
x.) Directors and Key Managerial Personnel
Appointment and Resignation
Board of Directors of the Company has an optimum combination of Promoter Directors andNon-Executive Independent Directors who have in depth knowledge of the business andindustry. There has been no change in Board of Directors of the Company during thefinancial year 2015-16.
Ms. Savita Dalai was appointed as a Company Secretary and Compliance Officer of theCompany w.e.f. 10th July 2015.
Mr. V.L. Ganesh was appointed as CFO of the Company w.e.f. 10th July 2015and ceased to be so w.e.f. 19th February 2016.
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Mr. Ajay S Mittal - Chairman & Managing Directorretire by rotation and being eligible offer himself for re-appointment at the ensuingAnnual General Meeting.
Brief details of the Director proposed to be appointed/Re - appointed as required underRegulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is provided in the notice of the Annual General Meeting and forms an integral part ofthis Annual Report.
Xi.) Committees of the Board
Currently the Board have Six Committees namely Audit Committee Nomination andRemuneration Committee Share Transfer Investor Grievances & StakeholdersRelationship Committee Corporate Social Responsibility Committee Committee of Directorsand Risk Management Committee. A detailed note on Board and its committees is provided inthe Corporate Governance Report section of this Annual Report
Xii.) Significant and material orders passed by the regulators or courts
There are no significant and material orders passed by the Regulators or Courts orTribunals that would impact the going concern status of the Company and its futureoperations.
Xiii.) Extract of Annual Return
In accordance with Section 92 and 134 of the Companies Act 2013 read with Rule 12 ofthe Companies (Management and Administration) Rules 2014 an extract of Annual Return in FormNo. MGT-9 is appended as Annexure-lll to the Board's Report.
Xiv.) Internal control systems
Internal Control systems and their adequacy
Your Company has an effective internal control and risk mitigation system which areconstantly assessed and strengthened with new/ revised standard operating procedures. TheCompany's internal control system is commensurate with its size scale and complexities ofits operations. The internal audit is entrusted to M/s. JayeshSanghrajka& Co. LLP areputed firm of Chartered Accountants. The main thrust of internal audit is to test andreview controls appraisal of risks and business processes besides benchmarking controlswith best practices in the industry.
The Audit Committee actively reviews the adequacy and effectiveness of the internalcontrol systems and suggests improvements to strengthen the same. The Company has a robustManagement Information System which is an integral part of the control mechanism.
The Audit Committee Statutory Auditors and the Business Heads are periodicallyapprised of the internal audit findings and corrective actions taken by the management arepresented to the Audit Committee. To maintain its objectivity and independence theinternal audit function reports to the Chairman of the Audit Committee.
Internal Controls over financial reporting
Your company has in place adequate internal financial controls commensurate with thesize scale and complexity of its operations. During the year such controls were testedand no reportable material weakness in the design or operations were observed. The Companyhas policies and procedures in place for ensuring proper and efficient conduct of itsbusiness the safeguarding of its assets the prevention and detection of frauds anderrors the adequacy and completeness of the accounting records and the timely preparationof reliable financial information.
The Company has adopted accounting policies which are in line with the accountingstandards and the Act. These are in accordance with the generally accepted accountingprinciples in India.
The Company has a robust financial closure certification mechanism for certifyingadherence to various accounting policies accounting hygiene and accuracy of provisionsand other estimates.
Xv.) Directors'Responsibility Statement
To the best of our knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134(3)(c) of the Companies Act 2013:
a.) In the preparation of the annual accounts for the year ended 31stMarch2016 the applicable accounting standards have been followed and no material departureshave been made from the same.
b.) They have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financialyear and of theloss of the company for that period.
c.) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detectingfraud and otherirregularities.
d.) They haveprepared the annual accounts on a going concern basis.
e.) They have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectively.
f.) They have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
4. AUDIT AND AUDITORS' REPORT
i.) Statutory Auditors
M/s. M.A. Parikh & Co. Chartered Accountants (Firm Registration NO.107556W)Mumbai Statutory Auditors of the Company were appointed as Statutory Auditor for aperiod of three years at the 33rd Annual General Meeting of the Companyhowever the members are required to ratify their appointment every year.
Your directors recommend the ratification of appointment of M/s. M.A. Parikh & Co.Chartered Accountants (Firm Registration No. 107556W) as Statutory Auditors of theCompany by the members at the ensuing Annual General Meeting. The Company has receivedletter from M/s. M.A. Parikh & Co Chartered Accountants to the effect that theirappointment if ratified would be within the prescribed limits under Section 141 of theCompanies Act 2013 and that they are not disqualified for such appointment. The necessaryresolution seeking your approval for ratification of Statutory Auditor has beenincorporated in the Notice convening the Annual General Meeting.
Management's response to the qualifications in the Auditors' Report is as under:
a.) Refer Point No. 1 of Auditors Report
Post CDR exit lenders are entitled to exercise rights and remedies available under theoriginal loan documents however in the absence of any communication from these lendersthe Company has not provided for additional interest from CDR cut-off date till 31stMarch 2016.
b.) Refer Point No. 2 of Auditors Report
Upon finalization of restructuring with ARC the Company will record the effect of therevised terms as to repayment of Principal and Interest
c.) Refer Point No. 3 of Auditors Report
Your Company has filed an application to the Central Government for waiver of recoveryof excess remuneration paid and the same is pending before the Central Government
d.) Refer Point No. 4 of Auditors Report
Mr. Shyam Rathi- CFO resigned w.e.f. 14th November 2014 and the Companyfound a suitable candidate only in the month of July 2015 when Mr. V. L. Ganesh wasappointed as CFO w.e.f. 10th July 2015.
ii.) Cost Auditor
As per the requirement of Central Government and pursuant to Section 148 of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 asamended from time to time your Company has been carrying out audit of cost records. TheBoard of Directors on the recommendation of Audit Committee appointed M/s. PrashantKarlekar & Associates Practicing Cost Accountants (Firm Registration No. 16075) asCost Auditors to audit the cost accounts of the Company for the financial year 2015-16 ata remuneration of Rs. 60000/- (Rupees Sixty Thousand only) plus applicable taxes andreimbursement of out of pocket expenses. As required under the Companies Act 2013 aresolution seeking member's approval for the ratification of remuneration paid to the CostAuditor forms part of the Notice convening the Annual General Meeting.
There is no qualification in the Cost Audit Report in the year ended 31stMarch2015.
iii.) Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company has appointed M/s. Aabid & Co Company Secretaries toundertake the Secretarial Audit of the Company for the financial year 2015-16. TheSecretarial Audit Report for the financial year 2015-16 forms part of this Annual Reportas Annexure-IV to the Board's Report.
Management's response to the observations in the Secretarial Auditors' Report is asunder:
a.) Refer Point No. i. of Auditors Report
Your Company has filed an application to the Central Government for waiver of recoveryof excess remuneration paid and the same is pending before the Central Government.
b.) Refer Point No. ii. of Auditors Report
Due to prevailing economic conditions and regulatory issues the Company could notgenerate sufficient cash flows to service its debts. Your management is vigorously workingtowards the revival plan and hopeful that in future all debts will be paid off.
c.) Refer Point No. iii. of Auditors Report
The Company had already obtained the approval of FIPB for the warrants so allotted. Anapplication to RBI for compounding has been filed by the Company.
d.) Refer Point No. iv of Auditors Report
Mr. Shyam Rathi - CFO resigned w.e.f. 14th November 2014 and the Companyfound a suitable candidate only in the month of July 2015 when Mr. V.L. Ganesh wasappointed as CFO w.e.f. 10th July 2015.
5. CORPORATE SOCIAL RESPONSIBILITY
Your Company sincerely believes that growth needs to be sustainable in a sociallyrelevant manner. Today's business environment especially in India demands that corporatesplay a pivotal role in shouldering social responsibility. Your Company is committed to itsendeavour in social responsibilities for benefit of the community.
Under the Corporate Social Responsibility (CSRJ initiative of the Company viz. 'ArshiyaCares' your Company has pledged to join hands with organizations who are working towardsfinding simple solutions to the infrastructure problems that India faces.
Following CSR initiatives have been undertaken by your Company in the social front:
At Company's FTWZ at Sai Village Panvel we have a 24x7 emergency fire fighting vehicleand an emergency ambulance service dedicated for residents in the vicinity of Sai Villageand Panvel area. This service is available to the local population free of charge througha toll free number.
As per the provisions of the Companies Act 2013 the Company was not required to makea mandatory spending for the CSR Activities. The CSR policy is available on the website ofthe company at http://www.arshivalimited.com/arshiva/assets/pdf/csr-policv120160620105217.pdf
6. HUMAN RESOURCES
Your Company recognizes the importance of human resources which is key and vital assetfor enabling your Company to serve its customers and hence in turn maximize shareholderswealth. While on the one hand your Company is committed in strengthening its humanresources by induction of experienced and competitive professionals on the other handyour Company is formulating appropriate policies systems and schemes which will createadequate opportunities for growth in career and create a working environment whichenhances productivity. The Company has a structured induction process at all locations andmanagement development programs to upgrade skills of managers. Objective appraisal systemsbased on Key Result Areas (KRAsJ are in place for senior management staff.
The Company is committed to nurturing enhancing and retaining top talent throughsuperior Learning and Organizational Development This is a part of Corporate HR functionand is a critical pillar to support the organization's growth and its sustainability inthe long run. The Company takes pride in the commitment competence and dedication shownby its employees in all areas of business.
Further statutory disclosures w.r.t Human Resources are as under:
i. J As required by the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 the Company has formulated and implemented a policyon Sexual Harassment at workplace with a mechanism of lodging complaints. Its redressal isplaced on the intranet for the benefit of its employees. During the year under review nocomplaints were reported to the Board.
ii.) Information pursuant to Section 197(12) of the Companies Act 2013 read with Rule5(1) & 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is annexed as Annexure-V.
None of the employees listed in the said Annexure is a relative of any director of theCompany. None of the employees hold (by himself or along with his spouse and dependentchildren) more than two percent of the equity shares of the Company.
Key Managerial Personnel
|Sr. No. ||Name of the Person ||Designation |
|1 ||Mr. Ajay S Mittal ||Chairman and Managing Director |
| || || |
|2 ||Mrs. Archana A Mittal ||Joint Managing Director |
|3 ||Mr.V.L. Ganesh ||Chief Financial Officer (appointed w.e.f. 10th July 2015 and resigned w.e.f. 19th February 2016) |
|4 ||Ms. Savita Dalai ||Company Secretary and Compliance Officer (appointed w.e.f. 10th July 2015) |
|5 ||Mr. Subhrarabinda Birabar ||CEO (Resigned w.e.f. 17th March 2016) |
7. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is presented in a separate section forming part of the Annual Report.
8. RISK MANAGEMENT
Your Company is well aware of risks associated with its business operations and variousprojects under execution. Comprehensively risk management system is being put in placeinvolving classification of risk adoption of risk mitigation measures and a strongmechanism to deal with potential risks and situation leading to rise of risks in aneffective manner.
Senior Professionals conversant with risk management systems have been entrusted withthe said task with a brief to implement the risk management
9. HEALTH SAFETY AND ENVIRONMENT
As a responsible corporate citizen your Company lays considerable emphasis on healthsafety aspects of its human capital operations and overall working conditions. Thus beingconstantly aware of its obligation towards maintaining and improving the environment allpossible steps are being taken to meet the toughest environmental standards on pollutioneffluents etc. across various spheres of its business activities.
Arshiya's Rail Infrastructure division especially plays a pivotal role in themitigation of pollution and reduction of fuel used for road travel through its unique Railsolutions that it provides to Corporates at Pan-India level.
10. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The Information under Section 134(3)(m) of the Companies Act 2013 read with Rule 8 ofCompanies (Accounts) Rules 2014 for the year ended 31stMarch 2016 is set outas under:
Conservation of Energy: The operations of the company involve low energyconsumption. Adequate measures have been implemented to conserve energy.
Technology Absorption: Arshiya sincerely believes in utilising technology toimprove productivity efficiency and quality of its business operations and workingenvironment.
Foreign Exchange Earnings and Outgo:
Foreign Exchange received - Rs. 169376774/-
Foreign Exchange incurred - Rs. 3799899/-
Your Directors wish to place on record their appreciation for the assistance supportand co-operation received from Government of India the State Governments and otherGovernment agencies and departments investors bankers financial institutions and allother stakeholders.
Your Directors also wish to place on record their deep sense of appreciation for thecommitted services by the executives staff and workers of the Company.
| || ||For and on behalf of the Board of Directors of |
| || ||Arshiya Limited |
| ||Ajay S Mittal ||Archana A Mittal |
| ||Chairman and Managing Director ||Joint Managing Director |
|Place: Mumbai ||DIN: 00226355 ||DIN: 00703208 |
|Dated: 25th May 2016 || || |