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ARSS Infrastructure Projects Ltd.

BSE: 533163 Sector: Infrastructure
NSE: ARSSINFRA ISIN Code: INE267I01010
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OPEN 69.85
PREVIOUS CLOSE 68.85
VOLUME 37700
52-Week high 113.95
52-Week low 27.00
P/E
Mkt Cap.(Rs cr) 101.95
Buy Price 68.70
Buy Qty 110.00
Sell Price 0.00
Sell Qty 0.00
OPEN 69.85
CLOSE 68.85
VOLUME 37700
52-Week high 113.95
52-Week low 27.00
P/E
Mkt Cap.(Rs cr) 101.95
Buy Price 68.70
Buy Qty 110.00
Sell Price 0.00
Sell Qty 0.00

ARSS Infrastructure Projects Ltd. (ARSSINFRA) - Director Report

Company director report

Your Directors have pleasure in presenting before you the 14th Annual Reportof the Company together with Audited Statements of Accounts for the Financial Year ended31st March 2015:

1. Financial Results:

The performance during the period ended 31st March 2015 has been as under:

(Rs In Crores)
Particulars 2014-15 2013-14
Sales 655.53 901.42
Profit before Depreciation Interest and Tax 208.99 199.49
Less : Depreciation 36.55 34.95
Interest 166.96 163.10
Profit Before Tax 5.48 1.44
Less : Tax Expenses
a) Current Year 1.10 0.30
b) Earlier Year 0.07 -
c) Deferred Tax (1.90) (0.53)
Profit/Loss After Tax 6.22 1.67
Balance brought forward from previous year 186.40 184.73
Amount Available for Appropriation 192.62 186.40
Appropriations
a) Dividend - -
b) Tax on Dividend - -
c) Transfer to General Reserve - -
Balance Carried to Balance Sheet 192.62 186.40
Earnings per Share (In Rs) 4.19 1.12
(equity shares of face value of Rs 10)

2. Operating Result :

In the year 2014-15 performance of the Company was improved considering the economicscenario of the Country. Though the Company achieved a turnover of Rs 655.53 cores asagainst the turnover of Rs 901.42 crores in the previous financial year (2013-14) theprofit (PAT) of the company has gone up i.e. Rs 6.22 crores as against the profit (PAT) ofRs 1.67 crores in the financial year 2013-14. The considerable increase in the profitagainst the previous year is due to strict adherence to cost cutting abandonment of lossmaking projects and execution of projects during the year having good profit margin andproper utilization of resources. Company is also following the same policy for taking upany new project in its hand. Directors expect further improvement in the performance ofthe Company in the current financial year.

3. Details of Subsidiary Joint Venture or Associates

During the year under review no companies have become or ceased to be company’ssubsidiary joint ventures or associate companies. A report on the company’ssubsidiary joint ventures or associate companies as per companies Act 2013 is providedhereunder:

Sl. No Name of the company / Joint Venture (JV) Address of the company CIN/GLN/ PAN Holding / subsidiary/ associat e % of shares held/ share in JV Applicable section
1 ARSS Damoh- Hirapur Tolls Private limited Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 U45201OR2011PTC013524 Subsidiary Company 99.74 % 2 (87)
2 ARSS Bus Terminal Pvt. Limited Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 U63031OR2010PTC012372 Subsidiary Company 51.00 % 2 (87)
3 ARSS Developers Limited. Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 U45209OR2007PLC009201 Associate Company 38.41% 2 (6)
4 NIRAJ-ARSS JV. Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAAAN5116B Joint Venture 40.00% 2 (6)
5 ARSS-ATLANTA JV. Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAQFA8726P Joint Venture 51.00% 2 (6)
6 ATLANTA-ARSS JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AABAA0048E Joint Venture 49.00% 2 (6)
7 ARSS-HCIL CONSORTIUM Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAOFA4560D Joint Venture 60.00% 2 (6)
8 ARSS-TRIVENI JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AABAA1081H Joint Venture 51.00% 2 (6)
9 PATEL-ARSS JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAAAP8266E Joint Venture 49.00% 2 (6)
10 BACKBONE-ARSS JV. Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAAAB7056Q Joint Venture 49.00% 2 (6)
11 SOMDATT BUILDERS-ARSS JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AADAS6434L Joint Venture 49.00% 2 (6)
12 ARSS-ANPR JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AABAA1158M Joint Venture 51.00% 2 (6)
13 HCIL-ADHIKARYA- ARSS JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAEFH3757R Joint Venture 30.00% 2 (6)
14 ARSS GVR JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AACAA1049A Joint Venture 51.00% 2 (6)
15 HCIL-ARSSSPL- TRIVENI JV 113-A Kamala Nagar Delhi-110007 AADFH8758B Joint Venture 30.00% 2 (6)
16 HCIL-KALINDEE- ARSS JV 113-A Kamala Nagar Delhi-110007 AAEFH1678M Joint Venture 30.00% 2 (6)
17 HARISH CHANDRA- ARSSSPL JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAAAH1493H Joint Venture 49.00% 2 (6)
18 ARSS-MVPL JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AABAA1497P Joint Venture 51.00% 2 (6)
19 ARSS-BALAJI JV At / P.o : Belpahar R.S. Belpahar AABAB1071G Joint Venture 30.00% 2 (6)

4. Consolidated Financial Statements:

Consolidated financial statements in terms of Section 129 (3) of the Companies Act2013 read with rule 6 of Companies (Accounts) Rules 2014 and accounting Standard AS 21issued by the Institute of Chartered Accountants of India and as required by the ListingAgreements with Stock Exchange(s) could not be prepared due to dispute between theCompany and one of its subsidiary namely ARSS Bus Terminal Private Limited. Accordinglythe Management has moved Company Law Board against the subsidiary for oppression andmismanagement and a company petition no.183/2013 is pending before the Company Law Boardfor hearing.

5. Dividend:

The_Board_of Directors has not recommended any_dividend_for the year ended on31.03.2015.

6. Reserve

No amount was proposed to be transferred to general reserve.

7. Company’s working during the year/state of company’s affair - orderbook:

Your Company has an order book of more than Rs 2000 Crore which includes the followingmajor works:

a) Package – I: Civil and Railway allied works in connection with the constructionof Private Railway siding for the proposed 3.0 MTPA Integrated steel plant at Nagarnarnear Jagdalpur Chhattisgarh state on item rate basis with a contract value of Rs312.87Crores.

b) Construction of Concrete Pavement in the Coal Transportation Roads of IB Coalfieldsof MCL (Re-tender) having a contract value of Rs 312.80 Crores.

c) Construction of new 2 lane Highway from Km 38.00 to Km 71.00 (Length=33 Km.) inMizoram in Phase "A" of SARDP-NE (Package-II) with a contract value of Rs258.22Crores.

d) Supply and installation of track (excluding supply of rails) Signaling and overheadequipment (OHE) & associated equipment for 25 KV AC tractio in connection withdoubling of railway line between Baang - Rajatgarh (25 KM) Cuttack Barang (12KM) and 3rdline between Barabg Khurda Road (35KM) in the State of Orissa India with a contractvalue of Rs252.83 Crores.

e) Widening to 2-lane and improvement in km 0.00 to 102.9 of Paralakhumundi-R.Udayagiri-Mohana Road (S.H.-34) under LWE Scheme with a contract value of Rs207.78Crores.

f) Execution of Balance work for Construction of Roadbed Major & Minor bridgesTrack Linking (excluding supply of rails ordinary track sleepers and thick web switches)Outdoor Signaling and Electrical (General) works in connection with Doubling of LAKHANA(Ex) – ARAND (in) section (68.936 Kms) part of RAIPUR-TITLAGARH Doubling in SAMBALPURDivision of East Cost Railway in the states of ODISHA & CHATTISGARH India with acontract value of Rs183.17 Crores.

g) Balance work of construction of Roadbed including Minor and Major Bridgesfacilities and General Electrification for doubling of Railway line betweenBarang-Rajatgarh (excluding Ghantikal-Naraj Section) Cuttack- Barang and 3rdline between Barang- Bhubaneswar in the State of Orissa India India. With contract valueof Rs174.31 Crore.

h) Construction of BRTS Corridor and development of road Contract for Package No. IIB:Sanganer Airport to 22Godam Via Rambagh crossing including Elevated Road at Durgapura(10.50 Km). (NCSL) India with a contract value of Rs169.00 Crores.

i) Earthwork in formation (excluding Blanket) minor bridges between Km 19.000 to Km.47.000 and 3 nos. of Steel girder bridges 8 nos. of Road Over Bridges between Km 19.000to Km 67.000 in connection with Angul- Sukinda new railway BG line in the state of OdishaIndia with a contract value of Rs143.30 Crores.

8. Listing with stock exchanges:

The Company confirms that it has paid the Annual Listing Fees for the year 2015-16 toBombay Stock Exchange and National Stock Exchange where the Company’s Shares arelisted.

9. Management Discussion and Analysis Report:

As required under Clause 49 of the Listing Agreements with Stock Exchanges theManagement Discussion and Analysis Report is enclosed as a part of this report as ‘Annexure–A’.

10. Corporate Governance and Shareholders Information:

Your Company has taken adequate steps to adhere to all the stipulations laid down inClause 49 of the Listing Agreement. A report on Corporate Governance is included as a partof this Annual Report as ‘Annexure –B’. Certificate from theStatutory Auditors of the company M/s. Ajay B Garg Chartered Accountants confirming thecompliance with the conditions of Corporate Governance as stipulated under Clause 49 ofthe Listing Agreement is included as a part of this report.

11. The extract of the annual return as provided under sub-section (3) of section 92;

The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as ‘Annexure –C’.

12. Number of Board Meetings:

Five Board Meetings were held during the year and the gap between two meetings did notexceed four months. The dates on which the Board Meetings were held are as follows:

30th April2014 9th August 2014 11th November2014 12th February2015 and 31st March 2015.

13. Audit Committee

The committee has in place an Audit Committee in terms of the requirements of theCompanies Act 2013 read with the rules made thereunder and clause 49 of the ListingAgreement. The details relating to the same are given in ‘Annexure B’ of theBoard Report on the Corporate Governance forming part of this report. Members arerequested to refer to point n. 4 of Corporate Governance Report attached with this annualreport.

14. Dematerialization of shares:

As on 31st March 2015 99.91% of the company’s paid up Equity ShareCapital is in dematerialized form and balance 0.09% is in physical form. TheCompany’s Registrars are Bigshare Services Private Limited having registered officeat E/2 Ansa Industrial Estate Sakivihar Road Sakinaka Andheri (E) Mumbai- 400 072.

15. Public deposits covered under Chapter V of the Act

Your Company has not invited any deposit from public and shareholders. So theprovisions of the ChapterV of the Companies Act 2013 are not attracted.

16. Auditors:

Statutory Auditors:

M/s. Ajay B Garg Chartered Accountants Statutory Auditors of the Company holdsoffice until the conclusion of the ensuing Annual General Meeting and are eligible forreappointment.

The Company has received letter from them to the effect that their reappointment (forthe FY 2015-16) if made would be in accordance with the conditions as prescribed underSection 139 & 141 of the Companies Act 2013 and Companies (Audit And Auditors) Rules2014.

Cost Auditors:

M/s. Ashutosh & Associates Cost Accountants Bhubaneswar were appointed as CostAuditors for auditing the cost accounts of your Company for the year ended 31stMarch 2015 by the Board of Directors pursuant to the Section 148 of the Companies Act2013 and Companies (Audit And Auditors) Rules 2014.

Secretarial Auditors:

M/s Sunita Mohanty & Associates Bhubaneswar were appointed as Secretarial Auditorsof the Company for the financial year 2014-15 by the Board of Directors pursuant to theSection 204 of the Companies Act 2013 read with Rule 9 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.

The Secretarial Audit Report submitted by Company Secretary in Practice (M/s SunitaMohanty & Associates Bhubaneswar) is enclosed as a part of this report‘Annexure-D’. Qualifications or remarks made by the Secretarial Auditor in hisReport are self explanatory.

Internal Auditors:

M/s. PR & Associates Cost Accountants Bhubaneswar were appointed as InternalAuditors of the Company for the financial year 2015-16 by the Board of Directors pursuantto the Section 138 of the Companies Act 2013 read with Companies (Accounts) Rules 2014.

17. Report of Auditors:

Statutory Auditors

Our reply to the qualifications of Auditors -

a. In absence of relevant records Contract-wise surplus/loss has neither beenascertained nor recognized in compliance with the requirements of para 34 and 35 of AS-7"Construction Contracts" issued by the Institute of Chartered Accountants ofIndia.

Company Reply: The company’s secured debts are under Corporate Debtrestructuring and the liability and interest payable does not commensurate with theturnover and cannot be justified as there is limited support from Financial Institution.During the execution period there is also escalation claim revision of contract valueextension of completion period etc. due to which unpredictable variation in reliableestimation of revenue and cost. Also the allocation of combine Operating overhead Headoffice overhead and Financial cost is not possible due to combine use or high swapping ofresources size of the Contracts. In absence of the overheads and financial costallocation the Company is unable to determine Contract wise surplus / deficit.

b. Interest for the year amounting to Rs 317.94 lakhs on inter corporate depositsreceived has not been charged to the Profit & Loss account resulting in overstatementof profit to that extent.

Company Reply: The Company has received inter corporate deposits from M/sWelspun Projects Limited which with some terms and conditions has to adjoin with revenueover the period of time. There is a dispute towards the said outstanding amount and thematter at present is sub judice. The Company while taking prudence approach postponed itsrevenue recognition and liability on account of interest has not been provided as it isirrational and not determinable.

c. In the absence of accounts of ARSS Balajee JV and ARSS-MVPL JV discrepancies ifany between the said accounts with that of the Company is not ascertainable.

Company Reply: The accounts of the JVs are under the control of respective JVpartners i.e. Balajii Engicons Pvt. Ltd. and Mateshweri Vanijya Pvt. Ltd. and the same hasnot been yet finalized from their end. Being the unlisted entities (Balaji & MVPL)both the above mentioned companies are not required to complete their annual accountswithin 60 days from the end of financial year. Hence the accounts from their end would beprepared much after the preparation and finalization of annual accounts of ARSS. Howeverboth the JVs have become inoperative. The accounting effects of the discrepancies if anyafter the finalization of accounts will be given at current date.

d. No provision has been made against performance bank guarantee invoked amounting toRs82.83 Crores against the Company and the same is disputed by Company.

Company Reply: Our Company is in construction business and executes variouscontracts of government and corporate clients in individual capacity and as JV partneralso. Under some of the contracts because of various reasons including lack preparednessof the clients in fulfillment of its primary obligations the work progress gets seriouslyaffected. Resultantly the very economy of our work execution and operation got disruptedand in the process the contracts gets terminated at company’s risk and cost. Applyingthe terms and contract in their favour our final bill escalation bill security gotforfeited and BGs given in support of performance guarantee were encashed for adjustingthe cost effect of above termination of contract. The Company has lodged various claimsagainst the said action taken by the contractees and the matter is under arbitration.Hence based on recovery track of past claims and management estimation no provision isrequired to be made in the books of accounts.

Secretarial Auditors:

Report of the secretarial auditors as attached is self explanatory in terms ofqualifications.

18. Directors /Key Managerial Personnel Appointed / Resigned During the Year;

The following were appointed as Directors /Key Managerial Personnel Appointed /Resigned during the Year:

S l . No. Name Designation Date of Appointment Date of Resignation
1 Mr. S.C Parija Independent Director (position regularized originally appointed on 27th November 2007) 1st April 2014 -
2 Mr. U. N. Challu Independent Director (position regularized originally appointed on 7th February 2012) 1st April 2014 24th February 2015
3 Mr. B. K. Mishra Nominee Director (Bank of India) 18th July 2014 7th July 2015
4 Ms. Alka Khemka Company Secretary & Compliance Officer 1st November 2014 -
5 Ms. Rima Dhawan Women Independent Director 17th December 2014 -
6 Mr. S. K. Pattanaik Director (Finance) 1st April 2005 31st March 2015
7 Mr. S. K. Pattanaik Chief Financial Officer 31st March 2015 -
8 Mr. B. K. Makhija Independent Director 31st March 2015 -

19. Director’s Responsibility Statement:

Pursuant to the section 134 sub-section (3) clause (c) Directors confirm and statethat—

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the directors had 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 detecting fraud and otherirregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls and such internal financialcontrols are adequate and are operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

20. Remuneration ratio of the Directors / Key Managerial Personnel (KMP) / Employees& Particulars of employees:

The information required pursuant to Section 197 (12) read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and Companies(Particulars of Employees) Rules 1975 in respect of employees of the Company andDirectors is furnished hereunder:

i) The ratio of the remuneration of each Director to the median remuneration of theemployees of the company for the financial year.

a) Mr. Subash Agarwal- Chairman- 1: 23

b) Mr. Rajesh Agarwal- Managing Director- 1: 18

c) Mr. S. K. Pattanaik- Ex Director (Finance)- 1: 15

ii) The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year.- 0%

iii) The percentage increase in the median remuneration of employees in the financialyear- 0%

iv) The number of permanent employees on rolls of the company.

Total 806 employees as on 31st March 2015.

v) The explanation on the relationship between average increase in remuneration andcompany performance.- NA

vi) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the company.-NA

vii) Variations in the market capitalisation of the company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over/ decrease in the market quotations of the shares of the company incomparison to the rate at which the company came out with the last public offer in case oflisted companies and in case of unlisted companies the variations in the net worth ofthe company as at the close of the current financial year and previous financial year;

• Variations in the market capitalization of the company: The marketcapitalization of the company as on 31.03.2015 was Rs 53.36 crores and as on 31.03.2014was Rs 31.88 crores

• Price earnings ratio of the company: Price earnings ratio of the company as on31.03.2015 was 8.58 and as on 31.03.2014 was 19.18.

Percentage increase over/ decrease in the market quotations of the shares ofthe company as compared to the rate at which the company came out with the last publicoffer in the year:

The Company had come out with initial public offer (IPO) in 2010 with issue price pershare of Rs 450/-. Share price as on March 31 2015 with NSE is Rs 35.95/- per shareindicating decrease in the market quotation of shares.

viii) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration- 0%

ix) Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the company- Same response as in point vi) above .i.e. 0%.

x) The key parameters for any variable component of remuneration availed by thedirectors;- No Director has received any variable component of remuneration.

xi) The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year: Mr. Subash Agarwal is the highest paid Director. No employee receivedremuneration higher than him.

xii) Affirmation that the remuneration is as per the remuneration policy of thecompany. The remuneration paid to employees is as per the remuneration policy of theCompany.

As required under the provision of Section 197 (12) read with Rule 5 (2) of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and Companies(Particulars of Employees) Rules 1975 as amended there was no employees who have drawnsalary or appointed under this category during the financial year 2014-15.

21. Company’s Policy On Directors’ Appointment and Remuneration IncludingCriteria For Determining Qualifications Positive Attributes Independence Of A DirectorAnd Other Matters Provided Under Sub-Section (3) Of Section 178;

The same has been provided in detail in the Corporate Governance Report attached withthe board report.

22. Declaration given by independent directors under sub-section (6) of section 149;

The Company has complied with the definition of Independence as per Clause 49 of theListing Agreement and according to the Provisions of section 149(6) Companies Act 2013.The company has also obtained declarations from all the Independent Directors pursuant tosection 149 (7) of the Companies Act 2013.

23. Industrial Relation:

Employee relations continued to be cordial throughout the year. The whole-heartedsupport of employees and a sense of belongingness with the organization and solidaritywith the management of the Company have helped to cope with the present challenges of theCompany during the year.

24. Adequacy of internal financial controls with reference to the Financial Statements.–

Management has put in place effective Internal Control Systems to provide reasonableassurance for:

Safeguarding Assets and their usage.

Maintenance of Proper Accounting Records and

Adequacy and Reliability of the information used for carrying on BusinessOperations.

Key elements of the Internal Control Systems has been provided & explained in MDAreport attached with Director’s report.

25. Annual Evaluation By The Board Of Its Own Performance (Including Committees andIndividual Directors)

Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement a separate exercise was carried out to evaluate the performance of individualDirectors including the Chairman of the Board who were evaluated on parameters such aslevel of engagement and contribution and independence of judgment thereby safeguarding theinterest of the Company. The performance evaluation of the Independent Directors wascarried out by the entire Board. The performance evaluation of the Chairman and the NonIndependent Directors was carried out by the Independent Directors. The board also carriedout annual performance evaluation of the working of its Audit Nomination and Remunerationas well as stakeholder relationship committee. The Directors expressed their satisfactionwith the evaluation process.

26. Details of significant and material orders:

There are no significant and material order passed by the regulators or courts ortribunals impacting the going concern status and company’s operations in future.

27. Particulars of Loans Guarantees or Investments Under Section 186

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

28. Particulars of Contracts or Arrangements With Related Parties Referred To InSub-Section (1) of Section 188 In The Prescribed Form AOC-2

All related party transactions attracting compliance under Section 188 and / or Clause49 of the Listing Agreement are placed before the Audit Committee as also before the Boardfor approval. Prior omnibus approval of the Audit Committee is also sought fortransactions which are of a foreseen and repetitive nature.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board of Directors of the Company is uploaded on thewebsite of the Company i.e www.arssgroup.in.

The particulars of contracts entered into with related parties during the year as perForm AOC-2 is enclosed as ‘Annexure-E. ’

29. Material changes and commitments affecting the financial position of the companywhich have occurred between the end of the financial year of the company to which thefinancial statements relate and the date of the report: NA

30. Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

During the year under review the Company has taken adequate measures for conservationof energy and also has not gone for any technology absorption whatsoever in accordancewith the provisions of sub - Section (3) (m) section 134 of the Companies Act 2013 readwith the Companies (Accounts) Rules 2014.

The Company has neither earned any income nor incurred any expenditure in foreigncurrency during the financial year ended 31st March 2015.

31. Development and Implementation of Risk Management Policy:

The Company has established risk management framework. The Company has been addressingvarious risks impacting the Company. In accordance with the provisions of Clause 49 of theListing Agreement the Board of Directors of the Company at its Meeting held on February2015 has constituted a Risk Management Committee and has approved the Risk ManagementPolicy of the company. This Committee has been delegated the authority by the Board toreview and monitor the implementation of the risk management policy of the Company.

32. Corporate Social Responsibility

In terms of section 135 and Schedule VII of the Companies Act 2013 the Board ofDirectors of your Company has constituted a CSR Committee. The Committee comprises of oneexecutive director & two Independent Directors. CSR Committee of the Board hasdeveloped a CSR Policy. Additionally the CSR Policy has been uploaded on the website ofthe Company at www. arssgroup.in under CSR Policy link. Since the average profit for thelast three years is in negative figures no CSR activities was performed / undertaken bythe company during the year.

33. Whistle Blower Policy of the Company

In accordance with requirement of Companies Act as well as listing agreement a vigilmechanism has been adopted by the board of directors and accordingly a whistle blowerpolicy has been formulated with a view to provide a mechanism for employees of the companyto approach Internal Auditor or Chairman of the Audit Committee of the Company to reportany grievance. There were no complaints under the whistle blower during the year underreview. A link to such policy is also provided in the website of the company.

34. Acknowledgement:

Your Directors would like to place on record their appreciation for assistance andco-operation received from the financial institutions banks Government authoritiescustomers and members during the year under review. Your Directors also place on recordtheir deep sense of appreciation for the committed services by the executives employeesat all levels.

For and on behalf of the Board of Directors
Sd/-
Place: Bhubaneswar (Subash Agarwal)
Dated: 7th August 2015 Chairman

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