You are here » Home » Companies » Company Overview » Arshiya Ltd

Arshiya Ltd.

BSE: 506074 Sector: Others
NSE: ARSHIYA ISIN Code: INE968D01022
BSE 00:00 | 19 Jun 22.35 -1.00
(-4.28%)
OPEN

23.05

HIGH

23.15

LOW

22.25

NSE 00:00 | 19 Jun 22.35 -1.45
(-6.09%)
OPEN

23.55

HIGH

23.55

LOW

22.25

OPEN 23.05
PREVIOUS CLOSE 23.35
VOLUME 4226
52-Week high 65.50
52-Week low 21.25
P/E
Mkt Cap.(Rs cr) 544
Buy Price 21.70
Buy Qty 1.00
Sell Price 22.50
Sell Qty 89.00
OPEN 23.05
CLOSE 23.35
VOLUME 4226
52-Week high 65.50
52-Week low 21.25
P/E
Mkt Cap.(Rs cr) 544
Buy Price 21.70
Buy Qty 1.00
Sell Price 22.50
Sell Qty 89.00

Arshiya Ltd. (ARSHIYA) - Director Report

Company director report

Dear Members

It gives us immense pleasure to share with you the highlights of the developments andthe progress that your company has achieved so far under Thirty-Seventh Annual Reporttogether with the Audited Statement of Accounts for the financial year ended 31st March2018.

1. FINANCIAL HIGHLIGHTS

(' in Lakhs)

Particulars

Standalone

Consolidated

Financial Year Ended 31.03.2018 Financial Year Ended 31.03.2017 Financial Year Ended 31.03.2018 Financial Year Ended 31.03.2017
Income from Operations 8542.02 8073.39 25906.69 26885.14
Total Expenditure 3109.68 2864.83 22143.40 23184.79
Operating Profit/(Loss) 5432.34 5208.56 3763.29 3700.35
Other Income 1020.09 974.73 1665.19 633.82
Profit before interest depreciation amortization exceptional item and tax 6452.43 6183.29 5428.48 4334.17
Finance Cost 12458.52 13049.51 29655.06 29472.73
Cash Profit/(Loss) (6006.09) (6866.22) (24226.58) (25138.56)
Depreciation and Amortization Expenses 2091.67 2181.46 10171.76 10791.28
Profit/(Loss) Before Exceptional Items Prior Period Adjustment and Tax (8097.76) (9047.68) (34398.34) (35929.84)
Exceptional Items (Net) (13296.84) (2030.04) (39473.20) 2332.06
Profit/(Loss) Before Tax 5199.08 (7017.64) 5074.86 (38261.90)
Tax Expenses - - 27.42 2.63
Net Profit/(Loss) After Tax 5199.08 (7017.64) 5047.44 -(8264.53)
Add: Other Comprehensive Income (Items that will not be re classified to profit and loss) (2.69) (9.03 (9.67) (15.14)
Total Comprehensive Income carried to other equity (5196.39) (7026.67) 5037.77 (38279.67)

The Consolidated Financial Statements of the Company are prepared in accordance withrelevant Accounting Standards notified under the Companies (Indian Accounting Standards)Rules 2015 (as amended).

i.) Reserves

During the year under review your company has reported a profit of ' 5196.39 Lakh onstandalone level and that of ' 5037.77 on consolidated level which has been furthercarried to other Equity.

ii.) Dividend

In order to conserve & build resources towards reserves for the future growth ofyour company the Directors of your Company regret their inability to recommend dividendfor the financial year ended 31st March 2018.

iii.) Capital Structure

A detailed capital structure forms part of corporate governance section of this AnnualReport.

iv.) Particulars of loans guarantees or 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 under thisreport.

v.) 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 Section 188(1) of the Companies Act 2013 in the prescribed Form No. AOC-2 is appended as an Annexure- I to the Board's report.

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 statements relate and the date of the report

Your Company has aligned its business strategy & implementation of asset lightbusiness model wherein it was considered necessary that Capex in warehouse be nowclassified as Stock in trade instead of fixed assets. Apart from the above there are nomaterial changes and commitments affecting the financial position of the Company occurredbetween the end of the Financial Year to which this financial statements relate and on thedate of this report.

2. BUSINESS AND FUTURE OUTLOOK:

Business Segments:

FREE TRADE WAREHOUSING ZONE (FTWZ)

Your Company is a pioneer and has the first mover advantage in setting up the FTWZs inthe country offering huge fiscal and other benefits to its customers.

FTWZ facility at Panvel near Mumbai with its best in class warehousing infrastructureof global standards is in close proximity to country’s busiest container port JNPTwell connected to the National and State Highways and the proposed International Airportin Navi Mumbai. This facility also offers a wide range of 3 PL services besides variousvalue optimisation services to its customers.

The second FTWZ facility in NCR at Khurja in the state of Uttar Pradesh is a part ofthe India's first operational integrated multimodal logistics park including Domesticwarehousing facility 3PL services Rail and Rail Infrastructure along with a 6 lanePrivate Freight and Container Rail Terminals and Inland Container Depot (ICD).

Your Company is glad to inform that the FTWZ facility at Panvel is operating closer tofull capacity and has achieved highest ever capacity utilisation. The increasingacceptance of the FTWZ with various benefits it offers is increasing and your company iswitnessing increasing enquiries for bigger space. With various Government reforms andincreasing economic activities in the country the warehousing sector is witnessingincreasing participation from institutional investors.

Your Company is glad to inform a successful completion of transaction with AscendasProperty Fund (India) Pte Ltd ("APFI") moving towards an asset-light businessmodel. Your Company has monetised six warehouses in Free Trade Warehousing Zoneadmeasuring 832000 sq.ft located at Panvel near Mumbai by leasing them on long termbasis to APFI for ^ 534 crore. Out of this first tranch of ^ 434 crore has been receivedon 3 February 2018 and the balance ^ 100 crore to be received over 4 years in equalinstalments on achieving certain milestones. APFI has further leased these warehouses on along-term lease basis to Arshiya Lifestyle Ltd ('ALL") which is wholly ownedsubsidiary of your Company at pre-agreed rentals. Your subsidiary company as acodeveloper also provides various services in managing and operating these warehouses.This transaction establishes the growing acceptance of the FTWZ in the country and theintended objective of your Company to achieve an asset light model going forward.

DOMESTIC WAREHOUSING FACILITY

Your Company is also offering domestic warehousing facility in NCR at Khurja in theState of Uttar Pradesh. This facility is part of India's first operational integratedmulti-modal logistics park. This facility offers built-to-suit warehouses along with valueoptimisation services and first & last mile transport services to the customers onlong term arrangements.

SUPPLY CHAIN MANAGEMENT

Your subsidiary Company is in the business of providing 3PL and other valueoptimisation services such as handling and transportation packaging consolidationpalletisation labelling kitting bagging bottling cutting-slitting survey qualityassurance refurbishment repairs and maintenance washing etc. to its variousclientele. Your Company also provides Information Technology (IT) enabled services to itsclients.

RAIL INFRASTRUCTURE & TRANSPORT HANDLING

Your subsidiary Company is providing the containerised Rail Transportation services ona Pan-India level with its fleet of 18 Rakes and around 3000 containers. Your subsidiaryCompany has taken various initiatives to reduce empty movement improved availability ofrequired type of containers cost reduction measures and improved turnaround time.

During the year the Management of your Company reviewed the overall investmentstrategy of your Company in terms of overall business objectives capital allocation andother focus areas for investment.

In view of the above the Board of Directors of your Company considered reviewed andapproved a scheme of amalgamation between Arshiya Industrial & Distribution HubLimited ("AIDHL") & Arshiya Transport and Handling ("ATHL") withArshiya Rail Infrastructure Limited ("ARIL") all of which are wholly ownedsubsidiaries of Arshiya Limited under Sections 391 to 394 of the Companies Act 1956 andunder Section 230 to 233 of the Companies Act 2013. Since the businesses of yoursubsidiary Companies complement each other; ARIL offering rail infrastructure includingmodern rakes customized containers rail sidings port connectivity with a pan-Indiapresence AIDHL providing domestic warehousing facility including value added services andInland Container Depot ("ICD") for inward and outward movement of EXIM cargo;and ATHL facilitating the transport and handling business. The management intends to havea better synergy of the businesses avail other common benefits and to widen the marketreach of the rail and container businesses. Thus in order to rationalize the holdingstructure the management of your Company seeks to have a single consolidated entityi.e. AIDHL and ATHL are proposed to be amalgamated with ARIL.

Further on May 24th 2018 your Company announced its intentions with regards to aproposed scheme of arrangement ("Scheme") that provides for a De-merger ofDomestic Warehousing (DW) segment of the flagship Company Arshiya Limited into ARIL. Themanagement of your company basis this scheme to re-organise the businesses of all theGroup companies believes that the demand in market for providing integrated services ismuch higher than that of providing individual services. In order to increase its revenueand cater to the needs of the market the management of your company intends toconsolidate the rail infrastructure transport handling business domestic warehousingsegment and ICD businesses. Further the management of your company also envisages thetransfer of Domestic business of Arshiya into ARIL. However the above scheme of Demergeris Conditional upon the aforesaid merger scheme becoming effective first.

PRIVATE FREIGHT TERMINAL

Your subsidiary Company has a 6 lane Private Freight and Container Rail Terminals inNCR at Khurja in the state of Uttar Pradesh notified for handling all types of inward andoutward cargo traffic attracting cargo from Indian Railways and other Private ContainerTrain Operators (PCTOs).

Your Company has improved the performance of Private Freight Terminal (PFT) segmentwhereby the non-containerised cargo is being handled at the Rail siding. With the largeinfrastructure development in the region such as extension of Yamuna-expressway newState highways and the proposed Jewar Airport the utilisation of the PFT is increasing.

INLAND CONTAINER DEPOT (ICD)

Your Company's facility of Inland container depot in NCR at Khurja boasts of being theonly such facility connected to the Rail network & Private Rail Siding and FTWZproviding inter-connected solution-based EXIM services. ICD also provides connectivity tomajor western ports such as Mundra Pipavav and JNPT for EXIM cargo movement.

A detailed discussion on the other focus areas is set out in the Management Discussionand analysis section which forms integral part of this Report.

SOME OF THE KEY INITIATIVES HAVE BEEN:

Debt Reduction Post Restructuring

A majority of debt of your Company has been restructured by Banks through assignment toEdelweiss Asset Reconstruction Company Limited ("EARC") (acting in its capacityas a trustee of various trusts in respect of debt acquired from various banks). The debtof your Company and its subsidiaries has reduced by 40% from its peak level.

The restructured debt and its proportionate conversion into equity were as informed inthe notice to the extra ordinary general meeting dated 29th April 2017. A brief summaryon the allotments made during the year under review is as stated in the Governance sectionof this Report.

• Improving liquidity position through monetisation of warehouses so to reducedebt and liabilities of your Company.

• Improved marketing efforts attracting clients requiring large space (includingfull warehouse)

• Providing solutions to the e-commerce telecom pharmaceuticals and chemicalindustry which is increasing the capacity utilisation and improved demand for additionalwarehouses.

• The conversion of containers to side-access meeting the customer needs andimproving the availability of containers.

• Cost reduction measures across all business segments.

• Improving the information technology platform to provide the IT enabled servicesto the clients.

• Organisational development attracting the new talent for the day-to-daymanagement.

Subsidiaries and Associates

During the year under review your company had certain alterations in the structure ofits investment in its subsidiaries. Arshiya Supply chain Management Private Limited whichwas wholly owned subsidiary of Arshiya Limited has discontinued its business operationsand hence management found it suitable to disinvest from that Company. As on March 312018 the Company has 7 subsidiary companies including 1 Material Subsidiary. During theyear following changes have taken place in subsidiary companies.

Subsidiary Acquired:

During the year under review your Company has acquired Laxmipati Balaji Exim tradingLtd (The name of the company has been changed to Arshiya Logistics Services Limited w.e.f.May 23 2018)

Material Subsidiary:

Arshiya Rail Infrastructure Limited

Company ceased to be Subsidiaries:

> During the year under review your Company has transferred its step down subsidiaryArshiya Rail Siding and Infrastructure Limited on 3rd February 2018

> Disposed -off Arshiya Supply Chain Management Private Limited its wholly ownedsubsidiary on 21st March 2018. Consolidated Financial Statements

The financial statements of your Company are prepared in accordance with IndianAccounting Standard ("IND AS") and the guidelines issued by SEBI The IND AS areprepared under section 133 of the Companies Act 2013 read with Rules 3 of the (IndianAccounting standards) Rules 2015 and that of Companies (Indian Accounting Standards)amendment Rules 2016 your company has adopted all the applicable standards and theadoption was carried out in accordance with applicable transition guidelines. During theyear the Board of directors reviewed the affairs of the subsidiaries. Further inaccordance with Section 129(3) of the Companies Act 2013 your company has prepared theConsolidated Financial statements which forms part of this Annual Report. A statementcontaining salient features of the financial statement of our subsidiaries in theprescribed Form No. AOC-1 is appended as an Annexure - II to the Board's Report. TheStatement also provides the details of performance and financial positions of each of itssubsidiaries.

Also that in accordance with Section 136 of the Companies Act 2013 and Regulation 46of the SEBI (Listing Obligation and Disclosure requirements) Regulations 2015("Listing Regulations") the audited financial statements including theconsolidated financial statements and related information of the Company and auditedaccounts of each of its subsidiaries are available on our website www.arshiyalimited.com.

These documents will also be available for inspection during business hours at theRegistered 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 website http://www.arshiyalimited.com/assets/pdf/policy-on-board-diversity20160407104216.pdf

ii.) Number of meetings of the board

During the year Thirteen Meetings were held. The details of the meetings of the Boardheld during the financial year 2017-18 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) Regulation2015 & amendments thereof plus the Companies Act 2013 & its amendments thereof.

iii.) Policy on Director's Appointment and Remuneration

The Current policy of Board of Directors of the Company has an optimum combination ofPromoter Directors and Non-Executive 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) Regulation 2015 and the Companies Act2013.

The policy of the Company on Directors’ appointment and remuneration includingcriteria for determining qualifications positive attributes independence ofa directorand other matters as required under sub-section (3) of Section 178 ofthe Companies Act2013 is available on our website http://www.arshiyalimited.com/assets/pdf/nomination-andremunerationpolicy20160407103702. 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) Regulation 2015.

v.) Board evaluation

SEBI (Listing Obligations and Disclosure Requirements) Regulation 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 non-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 website http://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 website http://www.arshiyalimited.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) Regulation 2015. The Insider TradingPolicy of the Company lays down guidelines and procedures to be followed and disclosuresto be made while dealing with the shares of the Company as well as the consequences ofviolation. The policy has been formulated to regulate monitor and ensure reporting ofdeals by employees and to maintain the highest ethical standards of dealing in Companysecurities.

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 website http://www.arshiyalimited.com/assets/pdf/insider-trading-code20160407090651.pdf

viii.) Policies

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.arshiyalimited.com/corporate-governance.html.The Policies 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. http://www.arshiyalimited.com/assets/

pdf/nomination-and-remuneration-

policy20160407103702.pdf

Related Party Transaction Policy The purpose of this policy is to regulate all transactions between the Company and its related parties. http://www.arshiyalimited.com/

assets/pdf/related-party-transaction-

policy20160407103809.pdf

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. http://www.arshiyalimited.

com/assets/pdf/insider-trading-

code20160407090651.pdf

Policy on Material Subsidiary The purpose of this policy is to determine the material subsidiaries and to provide the governance framework for them. http://www.arshiyalimited.com/

assets/pdf/policy-on-material-

subsidiaries20160407103840.pdf

Risk management Policy The purpose ofthis policy is to lay down the framework of the Risk Management. http://www.arshiyalimited.com/

assets/pdf/risk-management-

policy20160407103904.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. http://www.arshiyalimited.com/assets/

pdf/vigil-mechanism-whistle-blower-

policy20160407104143.pdf

Policy on Board Diversity The purpose of this policy is to have optimum combination of Directors from different areas and fields. http://www.arshiyalimited.com/

assets/pdf/policy-on-board-

diversity20160407104216.pdf

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. http://www.arshiyalimited.com/assets/

pdf/archival-policy120160613145605.pdf

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. http://www.arshiyalimited.com/

assets/pdf/policy-for-determination-

of-materiality-of-any-ssssevent--

information_120160613145521.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. http://www.arshiyalimited.com/

assets/pdf/policy-for-preservation-of-

documents_120160613145057.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. http://www.arshiyalimited.com/arshiya/

assets/pdf/csr-policy_120160620105217.

pdf

ix.) 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.

During the year review Prof. G Raghuram has resigned from the Board effective May 18th2017 and Mr. T. S. Bhattacharya has joined the Board of your Company as an (Additional)Independent Director w.e.f. May 24th 2018. In accordance with the provisions of Section152 of the Companies Act 2013 and the Company's Articles of Association Mr. Ajay SMittal - Managing Director retires by rotation at the ensuing Annual General Meeting andbeing eligible he has offered himself for re-appointment. Your Board recommends hisreappointment.

Brief details of the Director proposed to be appointed / Re - appointed as requiredunder Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015 is provided in the notice of the Annual General Meeting and forms anintegral part of this Annual Report.

x.) Committees of the Board

Currently the Board have Five Committees namely Audit Committee Nomination andRemuneration Committee Share Transfer Investor Grievances & StakeholdersRelationship Committee Corporate Social Responsibility Committee and Committee ofDirectors. A detailed note on Board and its committees is provided in the corporategovernance report section of this Annual Report.

xi.) 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.

xii.) Extract of Annual Return

In accordance with Section 92 and Section 134 of the Companies Act 2013 read with Rule12 of the Companies (Management and Administration) Rules 2014 an extract of AnnualReturn in Form No. MGT-9 is appended as an Annexure- III to theBoard’s Report.

xiii.) 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. M. A. Parikh & Co. CharteredAccountants a reputed firm of Chartered Accountants. The main thrust of internal audit isto test and review controls appraisal of risks and business processes besidesbenchmarking controls with 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.

xiv.) Directors' responsibility statement

To the best of knowledge and belief and according to the information and explanationsobtained by them the Board pursuant to Section 134 (5) of the Companies Act 2013confirm that:

a.) In the preparation of the annual accounts for the year ended March 31 2018 theapplicable accounting standards have been

followed and no material departures have been made from the same.

b.) They have selected such accounting policies and applied them consistently and madejudgments and estimates that are

reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at the end of the financial year and of the loss of the Company for thatperiod.

c.) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the

provisions of the Companies Act 2013 for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities.

d.) They have prepared the annual accounts on a going concern basis.

e.) They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are

adequate and were operating effectively.

f.) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems

were adequate and operating effectively.

4. AUDIT AND AUDITORS' REPORT

i.) Statutory Auditors

M/s. Chaturvedi & Shah Chartered Accountants was appointed as Statutory Auditorsof the Company for a period of five year from the conclusion of 36th Annual GeneralMeeting till the conclusion of 41st Annual General Meeting to be held in the year 2022subject to ratification by shareholders at the general meeting or as may be necessitatedby the Act from time to time. Accordingly the appointment of M/s. Chaturvedi & Shahis being placed before the shareholders for ratification.

Auditors' Report

Management's response to the qualifications in the Auditors' Report is as under:

Audit Report on Standalone Financial Statement

a. In respect of Non - adherence to repayment schedule of EARC and non-provision ofpenal interest of ' 1065.92 lakh for the year ended March 31 2018 as referred in Point(i) of Audit Report.

Though EARC has charged the penal Interest to the company the penal interest rate wasunder further negotiation with the EARC in respect of waiver of penal interest andmanagement is hopeful of waiver/reversal of the same. Therefore no provision of penalinterest amount has been made in the books of accounts. With respect to the non-adherenceof repayment schedule since Company is yet to receive communication from EARC forconversion of the defaulted debt/ interest repayment obligations into equity the Companycontinues to classify the restructured rupee loan in noncurrent and current borrowings.

b. In respect of non-reversal of settlement gain of '1719.59 lakh and not accruedinterest amounting to ' 237.50 lakh in compliance with repayment schedule as persupplement consent terms as referred in Point (ii) of Audit Report.

The Company has made partial payment under the consent terms and is under activenegotiations with the NBFC for extension of time for balance outstanding amount. Thecompany has received balance confirmation certificate in which there is no mention ofdemand of past settlement gain. Moreover in the revised consent terms executed between thecompany and NBFC past settlement gains are not mentioned yet. In view of the stated factsthe company has not reversed the settlement gain recognized initially.

c. In respect of Invocation of Corporate Guarantee of one subsidiary and no accountingimpact of the same as referred in Point (iii) of Audit Report.

The subsidiary has submitted the compromise proposal to the lenders for resolution ofthe debts by way of debt restructuring which is at advanced stage of acceptance by therespective lender therefore the company do not envisage any liability on the same andconsiders it prudent not to provide for it at this stage. The company will re-assess theoutcome of the same in forthcoming quarterly reporting and give necessary effect in thebooks of accounts if any.

d. In respect of non-depositing of Tax deducted at source of ' 256.43 lakh and intereston tax deducted at source amounting to ' 612.00 lakh refer point no (vii) (a) of Annexure"A"

The company is coming out of severe financial crunch and have paid large amounts of oldoutstanding statutory dues during the year ended 31st March 2018 and the management ishopeful to pay all the remaining statutory dues on priority basis. Moreover in cases wherethe vendors/services providers/employees have paid the TDS dues at their own the companyhave reimbursed these amounts to the respective vendor/service provider/employees and havemaintained necessary documents in this regard for statutory compliances.

e. In respect of defaults in repayment of outstanding dues to Financial InstitutionBank and NBFC refer point no

(viii) of Annexure "A"

The company has made substantial repayment as agreed in amortization schedule ofRestructuring Agreement (RA) sanction letter and consent terms with other lenders duringthe year ended March 31 2018. Since the company is not in receipt of any adverse noticefrom any of the lenders (Financial Institutions Bank and NBFC) the company does notforesee necessity for any provision for the same at this stage as the company is hopefulof fulfilling its repayments obligations to lenders in future considering the variousmeasures taken for assets monetization and new business development.

Audit Report on Consolidated Financial Statement

a. In respect of Non adherence to repayment schedule of EARC and non-provision of penalinterest of ' 1099.43 lakh for the year ended March 31 2018 as referred in Point 7.1 ofAudit Report

Though EARC has charged the penal Interest to the Group the penal interest rate/amountis not agreed by the Group. The Group is negotiating with the EARC for waiver of penalinterest and is hopeful of waiver/reversal of the same. Therefore no provision of penalinterest amount has been made in the books of accounts. With respect to the nonadherenceof repayment schedule since company has not received any communication from EARC forconversion of the defaulted debt/interest repayment obligations into equity the companycontinue to classify the restructured rupee loan in non-current and current borrowings.

b. In respect of non-reversal of settlement gain of ' 1719.59 lakh and not accruedinterest amounting to ' 237.50 lakh in compliance with repayment schedule as persupplement consent terms as referred in Point 7.2 of Audit Report

The Parent Company has made partial payment under the consent terms and is under activenegotiations with the NBFC for extension of additional time for balance amount payment.The Parent Company has received balance confirmation certificate in which there is nomention of demand of past settlement gain. Moreover in the revised consent terms executedbetween the parent Company and NBFC there is no mention of past settlement gains. In viewof the stated facts the Parent Company has not reversed the settlement gain recognizedearlier.

c. In respect of revocation of Corporate Debt Restructuring (CDR) package in July 2015in subsidiaries and these subsidiaries continuing to account for the interest on suchborrowings at interest rate prescribed in CDR package instead of original loan documentsas reffered in point no. 7.3 of Audit Report.

Post CDR exit lenders are entitled to exercise the rights and remedies available underthe original loan documents. However majority of borrowings of the Group had already beenassigned to the EARC and balance borrowings are in the process of either assignment toEARC or sometime settlement with respective lenders. In the absence of any communicationfrom these lenders the Group has not provided for additional interest (difference betweenCDR package and as per original sanction letter) from CDR cut-off date.

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 2017-18 ata remuneration of ' 60000/- (Rupees Sixty Thousand only) plus applicable taxes andreimbursement of out of pocket expenses. The Board has approved the remuneration payableto the Cost Auditors subject to approval of the shareholders at the ensuing Annual GeneralMeeting.

Auditors' Report

There is no qualification in the Cost Audit Report.

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 2017-18. TheSecretarial Audit Report for the Financial Year 2017-18 forms part of this Annual Reportas an Annexure-IV to the Board's Report. Further the secretarial Auditorhas also certified that your Company has complied with the applicable SecretarialStandard i.e. SS-1 and SS-2.

There are no qualifications in the Secretarial Audit Report

5. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company sincerely believes that growth needs to be sustainable in a sociallyrelevant manner. Today’s business environment especially in India therefore demandsthat corporates play a pivotal role in shouldering social responsibility. Your Company iscommitted to its endeavour in social responsibilities for benefit of the community.

Under the Corporate Social Responsibility (CSR) initiative of the Company 'ArshiyaCares’ your Company has pledged to join hands with organizations who are workingtowards finding simple solutions to the infrastructure problems that India faces.

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.arshiyalimited.com/arshiya/assets/pdf/csr-policy_120160620105217.pdf

6. HUMAN RESOURCES

Building people capabilities and providing them platforms and opportunities to grow andspread their wings have always been a unique strength of our organization. While on theone hand your Company is committed in strengthening its human resources by induction ofexperienced and competitive professionals on the other hand your Company is formulatingappropriate policies systems and schemes which will create adequate opportunities forgrowth in career and create a working environment which enhances productivity. The Companyhas a structured induction process at all locations and management development programs toupgrade skills of managers. Objective appraisal systems based on Key Result Areas (KRAs)are in place for all the employees.

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.

Your Company continues to enjoy cordial and harmonious relations and not a single manhour was lost on account of any Industrial disturbance during the year 2017-18.

Further statutory disclosures w.r.t. Human Resources are as under:

i.) As required by the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 the

Company has formulated and implemented a policy on Sexual Harassment at workplace witha mechanism of lodging complaints. Its redressal is placed on the intranet for the benefitof its employees. During the year under review no complaints were reported to the Board.

ii.) Information pursuant to remuneration as per Section 197(12) of the Companies Act2013 read with Rule 5(1) & 5(2) of the

Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms partof Board Report and is as annexed as an 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

Sl. 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. S. Maheshwari Group President and Chief Financial Officer (CFO)
4 Ms. Savita Dalal Company Secretary and Compliance Officer

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

Tough it is not possible to completely eliminate various risks associated with thebusiness of the Company Your Company is well aware of risks associated with its businessoperations and various projects under execution. The management is making efforts tominimise such risks on the operations of the company. The Company has established a well -defined process of risk management which includes identification analysis and assessmentof various risks measurement of probable impact of such risks and a strong mechanism todeal with potential risks and situation leading to rise of risks in an effective manner.

The Company has put in place various internal controls for different activities tominimise the impact of various risks. Further as mandated by the Companies Act the Companyhas implemented the Internal Financial Controls to ensure proper control over financialreporting.

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.

Conservation of Energy: The operations of the company involve low energyconsumption. Adequate measures have been implemented to conserve energy such as -

• Roof of the warehouses at our FTWZs have been designed with MR24 standards withroof insulation which gives temperature variation of 8Degree with ambient temperature. Aprovision of installation of solar panels will be made on the roofs to generate renewableenergy in all new warehouses.

• Orientation of the warehouse buildings has been done in such a way that there isless heat transmission resulting in saving the electricity consumption by minimizing heatloss in the HVAC system.

• Ridge ventilators are installed at the roof of all WHs whereby there is no needof power run turbo ventilators which saves the huge amount of power.

• Cold rooms are having the best quality insulations in roofs/sides/top and floorso as to ensure no leakage of cooling and thus saving a lot of power. The doors of thecold rooms have been installed with air curtains so that during operation internaltemperatures is maintained without any loss of cooling.

• The central control room have been installed with the control panels whichcontrols the temp of cold rooms and monitor automatically so to achieve the pre-settemperature requirement. The chiller units are also centrally controlled.

• Office air conditioning system is having VRV units which adjust the powerrequirement as per the required heat load. This saves a lot of power requirement.

• All peripheral and yard lighting is having auto on and off system set with thetimings which saves lot of wasteful energy.

• The docking doors are placed to ensure the minimum run by the fork lifts whichreduces large power required for recharging.

Sewerage treatment plant: Company has installed sewerage treatment plant for reuseof water generated from toilet. After treatment water is used for the gardening purpose.

EHS Policy: Site specific Environment Health and Safety policy is in place. Riskassessment analysis and emergency response plans are on ground. Dedicated Safety teamaudits the working & facility and train staff on all the aspects of safe working.

10. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as required under the provisions of Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc.are furnished in "Annexure-VI" which forms part of this Report.

APPRECIATION

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
DIN:00226355 DIN:00703208
Place: Mumbai
Dated: May 24th 2018

ANNEXURE-1 FORM NO. AOC -2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014.

This Form pertains to the disclosure of particulars of contra cts/arrangements enteredinto by the company with related parties referred to in sub section (1) of section 188 ofthe Companies Act 2013 including certain arm's length transaction under third provisothereto.

As per Section 188 of the Companies Act 2013 whenever a company avails or renders anyservice directly or through agents amounting to 10% or more of the turnover of the Companyor ' 50 Crore whichever is lower prior approval of the shareholders is required.However shareholders approval for such transaction need not be sought if the transactionsare between the holding Company and its wholly - owned subsidiaries whose accounts areconsolidated with the holding Company and placed for shareholders approval.

1. Details of contracts or arrangements or transactions not at Arm's length basis.

There were no contracts or arrangements or transactions entered into during the yearended March 31 2018 which were not at arm's length basis.

2. Details of material contracts or arrangements or transactions at Arm's length basis.

The details of material contracts or arrangement or transactions at arm's length basisfor the year ended March 31 2018.

SL.

No.

Particulars Details
a. Name (s) of the related party Arshiya Logistics Services Limited
b. Nature of relationship wholly owned Subsidiary
c. Nature of contracts/arrangements/transaction Unit holder agreement.
d. Duration of the contracts/ arrangements/ transaction 5years
e. Salient terms of the contracts or arrangements or transaction including the value if any unit holder agreement for Warehouse lease
f. Date of approval by the Board
g. Amount paid as advances if any none

 

For and on behalf of the Board of Directors of
Arshiya Limited

 

Ajay S Mittal Archana A Mittal
Chairman & Managing Director Joint Managing Director
DIN:00226355 DIN:00703208
Date: May 24 2018
Place: Mumbai

Annexure II

Annexure to the Consolidated Financial Statements

Statement containing the salient features of the financial statements of subsidiaries /associates companies / joint ventures [Pursuant to first proviso to sub-section (3) ofsection 129 of the companies Act 2013 read with rule 5 of the companies [Accounts)Rules 2014 - AOC-1]

(Rs. in Lakh)

S.No. Name of the subsidiary Financial Period ended Currency Equity Other

Equity

Total

assets

Total liabilities (excluding equity and other equity) Investments Turnover Profit / (Loss) before taxation (1*) Provision for taxation Profit / (Loss) after taxation % of Share holding(l*)
1 Arshiya Industrial & Distribution Hub Limited 31st March 2018 INR 1723.72 19637.77 69499.67 48138.18 78.38 1039.98 1039.98 100%
2 Arshiya Northern FTWZ Limited 31st March 2018 INR 1086.87 27074.48 76453.37 48292.02 - 308.40 (9188.82) - (9188.82) 100%
3 Arshiya Rail Infrastructure Limited 31st March 2018 INR 4238.44 (13561.72) 55191.45 64514.73 - 13598.32 (10242.11) - (10242.11) 100%
4 Arshiya Transport And Handling Limited 31st March 2018 INR 5.00 (964.74) 0.42 960.16 - - (103.33) - (103.33) 100%
5 Arshiya Technologies (India) Private Limited 31st March 2018 INR 10.12 (13.00) 0.32 3.20 - - (1.65) - (1.65) 100%
6 Arshiya Lifestyle Limited 31st March 2018 INR 148.50 1649.71 3364.87 1566.66 - 1890.38 (22.38) - (22.38) 100%
7 Arshiya Logistics Services Limited (formerly known as Laxmipati Balaji Exim Trading Limited) 31st March 2018 INR 160.00 (122.21) 1299.42 1261.63 4845.64 (115.86) (115.86) 100%
8 Arshiya Supply Chain Management Private Limited (till 22 nd March 2018) 21st March 2018 INR 2277.43 (1563.05) 27.07 (1590.12) Nil (2 & 3*)
9 Arshiya Rail Siding and Infrastructure Limited (till 3rd February 2018) 31st January 2018 INR (1.44) 0.35 (1.79) Nil (4*)

(1*) % of Share Holding including beneficial interest/ voting power (eitherdirectly/indirectly or through subsidiaries).

(2*) Nil (12.64%) held through Arshiya Northern FTWZ Limited.

(3*) Arshiya Supply Chain Management Private Limited has been dispossed on 22nd March2018 above disclousre are up to 21st March 2018. (4*) Arshiya Rail Siding andInfrastructure Limited has been dispossed on 3rd February 2018 above disclousre are up to31st January 2018.

For and on behalf of the Board of Directors of Arshiya Limited

Ajay S Mittal Archana A Mittal Ashishkumar Bairagra S. Maheshwari Savita Dalai Vinod Kumar Jain
Chairman and Managing Director Joint Managing Director Independent Director Chief Financial Officer Company Secretary VP - Accounts & Finance and Group President
DIN: 00226355 DIN: 00703208 DIN:00049591
Place: Mumbai
Date: 24th May 2018