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Arshiya Ltd.

BSE: 506074 Sector: Others
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Arshiya Ltd. (ARSHIYA) - Director Report

Company director report

Dear Members

Your Directors present their Thirty-Sixth Annual Report together with the AuditedStatement of Accounts for the financial year ended 31st March 2017.


i.) Summarised Standalone Financial Results- Arshiya Limited

i.) Summarized Standalone Financial Results- Arshiya Limited

Particulars Year Ended 31.03.2017 Year Ended 31.03.2016
(Amount In Rs.) (Amount In Rs.)
Income 760209760 647707541
Expenditure 1518742441 2138503840
Profit/(Loss) Before Depreciation and Tax (758532681) (1490796299)
Depreciation 185826891 235870091
Profit/(Loss) Before Tax and Exceptional Items (944359572) (1726666390)
Exceptional Items (Net) 107394560 1028123576
Prior period Items(Net) 1756762 29159755
Profit/(Loss) After Tax (1053510894) (2783949721)

ii.) Summarized Consolidated Financial Results - Arshiya Limited and Its Subsidiaries

Particulars Year Ended 31.03.2017 Year Ended 31.03.2016
(Amount In Rs.) (Amount In Rs.)
Income 2693858936 3104041448
Expenditure 5181763966 5973479783
Profit/(Loss) Before depreciation and Tax (2487905030) (2869438335)
Depreciation 864306560 916020304
Profit/fLoss) Before Tax and Exceptional Items (3352211590) (3785458638)
Exceptional Items 569689136 2230367978
Prior Period Adjustments 4532780 (10288660)
Profit/ (Loss) for the year before tax (3926433506) (6005537956)
Tax Expense 262758 31987695
Net Profit/ (Loss) for the year (3926696264) (6037525651)

The Consolidated Financial Statements of the Company are prepared in accordance withrelevant Accounting Standards viz. AS-21 AS-25 and AS-27 issued by the Institute ofChartered Accountants of India and as notified under Section 133 of Companies Act 2013which forms part of this Annual Report.

Your Company has recorded a loss ofRs. 1053510894/- (Rupees One Hundred Five CroreThirty Five Lacs Ten Thousand Eight Hundred and Ninety Four Only)on a standalone and ofRs. 3926696264/- (Three Hundred Ninety Two Crore Sixty Six Lacs Ninety Six ThousandTwo Hundred and Sixty Four only) on consolidated level during the financial year. Thoughthe Company continues to incur losses on year on year but the management is committedtowards the revival of the Company through various measures vizrestructuring of debts andmonetization of its assets.

The Company had exited CDR during financial year 2015-16 post which the Banks haveassigned their loans to Edelweiss Asset Reconstruction Company Limited (EARC). During theyear under review the Company has entered into Restructuring Agreement (RA) with EARCresulting in reduction in debts of the Company from Rs.1550 Crore to Rs.720 Crore.Pursuant to the restructuring agreement the Company undertook to allot equity shares andZero Percent Optionally Convertible Redeemable Preference Shares to EARC shareholders'approval for such issuance have been obtained at the Extra Ordinary General Meeting heldon 29th April 2017 though the allotment of the same is under processSimilarly three of the subsidiaries namely Arshiya Rail Infrastructure Limited ArshiyaIndustrial & Distribution Hub Limited and Arshiya Northern FTWZ Limited whose debtshave been assigned to EARC post exit from CDR have also signed the restructuringagreement with EARC.

1.) Reserves

During the year under review loss of Rs.1053510894/- (Rupees One Hundred Five CroreThirty Five Lacs Ten Thousand Eight Hundred and Ninety Four Onlyjhas been transferred tothe Reserves and surplus account.

ii.) Indian Accounting Standards (Ind AS)

The Ministry of Corporate Affairs (MCA) vide its notification in the official gazettedated February 16 2015 notified the Indian Accounting Standards (Ind AS) applicable tocertain classes of Companies. Ind AS has replaced the existing Indian GAAP prescribedunder Section 133 of the companies Act 2013 read with Rule of the Companies (Accounts)Rules 2014 & that in case of your Company Ind AS is applicable from April 12017.

iii.) Dividend

In view of losses the Directors regret their inability to recommend dividend for thefinancial year ended 31st March 2017.

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.

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-Itothe 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 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.


i.) Business Initiatives

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. With implementation of Goods and Services Tax (GST) whichis one of the largest tax reforms ever done in India it is expected to bring moreefficiency in warehousing and distribution and bring down the Logistics cost

Out of the total Exim cargo in India over 1.2 million TEUs of containerized cargo ismoving from the Northern part of India through gateway ports of JNPT Mundra & Pipavavwhich in consistently increasing and therefore this part of India has been demanding moreInland Container Depot facilities to be provided to the exporters and the importers forcatering to such volumes.

This growth will require substantial logistical support in terms of world classinfrastructure and Container Train operations for movement of goods across the country.Arshiya's 'Northern India Logistics Park' (NILP) as an integrated supply chain &logistics infrastructure solutions provider is fully geared to cater to the anticipatedboom in the Indian Logistics scenario. Arshiya has revolutionized freight transport in thecountry with its modern & state of the art facility & unique solution.


In April 2008 Arshiya acquired Category I license to operate rail services and startedits Operations at Pan India level in February 2009. Today Arshiya is amongst India'slargest private Container Train Operator (CTO) operating domestic rail freight servicesacross the Country. NILP Rail Terminal at Khurja is strategically located at theconfluence of Eastern & Western Dedicated Freight Corridors (DFC) and is wellconnected to cater the Free Trade Warehousing Zone (FTWZ) Inland Container Depot (ICD)& Domestic Tariff Area (DTA) Warehouse to trade to/from the Northern & Westerngateway ports.

Arshiya is presently working with well-known corporate clients by offering unique andspecialized services with capability of large scale evacuation of cargo from PlantsDomestic Hubs & Client Sidings. Arshiya offers a viable alternative clearing upcongested roads providing unmatched e fficiencies and promises to save time & costsignificantly thereby boosting profitability.

The Company owns and operates 18 container trains across pan India andowns over 3000containers and is committed to providing world class end-to-end multimodal LogisticsServices across the country at various locations. Arshiya integrates first and last mileconnectivity with various terminal based value added services to our Clients.


Northern India Logistic Park (NILP) Rail Siding at Khurja was notified as a PrivateFreight Terminal for handling all types of inward and outward traffic in full rakes alsobeing the First to be notified in NCR. Arshiya is successfully operating its PFT modelattracting different cargo and train operators.

Apart from the existing container trains coming at NILP with commodities such asIngots & Billets we are handling Aggregates Clinkers and Food Grains for feedingtheir plants and end users located in and around NCR and Eastern/Western UP.


FTWZ being a unique concept in India the Trade has started recognizing its benefits. Alot of potential clients struggle hard to recover taxes & duties paid during imports.They face the burden of spending heavy working capital towards recovery expenses apartfrom the time consumed apart from foregoing the duties paid because of lack of provisions.With new GST regime various industry segments have started using FTWZ given its uniqueValue Preposition in offering.

Currently FTWZ at Panvel offersover 830000 Sq. Ft. of warehousing space with best inclass infrastructure which is suitable for Clients across industries. The facility is wellconnected to the National and State Highways and situated only 24 Kms from the country'sbusiest container port and also close to the proposed International Airport in NaviMumbai.

FTWZ at NILP at Khurja Uttar Pradesh caters to the need of Northern India. Thestate-of-the art infrastructure is very well connected by ICD Rail & Road networksfacilitating end-to-end distribution to the Trade with Delhi NCR.


The Inland Container Depot at NILP at Khurja boasts of being th e only such facility inIndia designed to provide a plethora of inter-connected solution-based services to theTrade. The ICD is spread across 35 acres and has bonded warehouse with the capacity of120000 Sq. Ft. to handle import export bonded non-bonded warehouse operations andvalue added services.

This ICD was launched in April 2016 and till now over 12 Exim services have beenoperated in 1st phase of operations. We started rail service to Mundra portkeeping in mind the market requirements and in order to cater market demands soon goingto offer regular rail services to both major ports i.e. Mundra & Pipavav

Being in close proximity to the Export market of commodities like Reefer HardwareAgro & Yarn also Import commodities like Automobile Consumer Goods Scrap &Papers we have received huge positive response from the market and have begun to receiveregular bookings. We have initiated strong marketing efforts with all Shipping Lines toopen acceptance points which is the key to our business success.


A DTA facility at NILP Khurja offers an integrated multi-modal logistics solutions forbuilt-to-suit type Clients to cater domestic containerized bulk break-bulk cabotagecoastal auto freight inbound & outbound cargo movements. First & Last miledoor-to-door (D-D) services are also being offered by us to our partners on long termarrangements.


Arshiya Supply Chain Management offers Indian and foreign clients to carry out theirValue Added Service (VAS) as per requirements. With our focus on gaining Foreign Clientswe expect good volumes materializing in near future.

Some of the key initiatives have been:

• An integrated and unique product under same roof at NILP to the Trade created as"FTWZ+ICD+DTA+PPT" with a puli model to generate more business

• A COMBO train operations of handing “Exim & Domestic" cargomovements on the same train to facilitate the Market requirements

• Aggressive market mapping by creation a strong focused solutions providerSales team approach

• Special focus on large volume based & huge import duty payout foreignclients

• Implementing Marketing strategies timely by participating in Trade events etc.

ii.) Subsidiaries and Associates

The Company has 8 subsidiary companies including 2 Material Subsidiaries and 1 stepdown subsidiaries as on 31st March 2017. During the year following changeshave taken place in subsidiary companies.

Subsidiary Acquired:

During the year under review your Company has acquired Arshiya Lifestyle Limited.

Material Subsidiaries:

> Arshiya Supply Chain Management Private Limited

> Arshiya Rail Infrastructure Limited

Step down Subsidiary:

> Arshiya Rail Siding and Infrastructure Limited

Company ceased to be Subsidiaries:

During the year under review your Company has disposed off following non-operationalsubsidiaries:

> Arshiya Central FTWZ Limited

> Arshiya International Singapore Pte. Limited

> Arshiya Hong Kong Limited

> Cyberlog Technologies International Pte. Limited

> Cyberlog Technologies (UAE) FZE

iii.) Consolidated Financial Statements

In accordance with section 129(3) of the Companies Act 2013 we have preparedconsolidated financial statements of the Company and all its subsidiaries which form partof the Annual Report. Further a statement containing salient features of the financialstatement of our subsidiaries in the prescribed FormNo. AOC-1 is appended as an Annexure- II to the Board's Report. The Statement also provides the details ofperformance financial positions of each 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 These documents will also be available for inspection duringbusiness hours at the Registered Office in Mumbai India.


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 on-board-diversitv20160407104216.pdf

ii.) Number of meetings of the board

During the year Six Meetings were held. The details of the meetings of the Board heldduring the financial year 2016-17 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) Regulation2015and 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 Directors and Non- Executive Independent Directors who have in depth knowledgeof the 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 of a directorand other matters as required under sub-section (3) of Section 178 of the Companies Act2013 is available on our website has been no change in the policy since the last Financial Year. We affirm that theRemuneration paid to the Directors is as per the terms laid out in the Nomination andRemuneration 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 Directors) was carried out by the Independent Directors. The Boardof 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

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

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

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 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. http: // m /assets /Ddf/nomination- and-remuneration- nolicv20160407103702.ndf
Related Party Transaction Policy The purpose of this policy is to regulate all transactions between the Company and its related parties. http: // m /assets /pdf/related-partv- transaction- nolicv20160407103809.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. http: // m /assets /Ddf /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: // m /assets /Ddf / Dolicv-on- material- subsidiaries20160407103840 -pdf
Risk management The purpose of this policy is to lay down the httD: //
Policy framework of the Risk Management. m /assets /pdf/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:// m /assets /pdf/vigil- mechanism-whistle-blower- policv20160407104143.pdf
Policy on Board Diversity The purpose of this policy is to have optimum combination of Directors from different areas and fields. http: // m /assets /pdf/policv-on- board- diversitv20160407104216.pd f
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: // m /assets /ndf/archival- policvl20160613145605.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: // m /assets /Ddf /nolicv-for- determination-of-materialitv- of-anv-event— information 1201606131455 21.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: // m /assets /Ddf /Dolicv-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. httD: // m /arshiva/assets /pdf/csr- Dolicv 120160620i05217.Ddf

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. There has been no change in the Board of Directors of the Company during theFinancial Year 2016-2017. Prof. G. Raghuram has resigned as an Independent Director w.e.f.IB* May 2017 the Board appreciates the valuable services rendere d by Prof. G. Raghuramduring his tenure at the Company.

Mr. S. Maheshwari was appointed as Chief Financial Officer (CFO) of the Company w.e.f.08th February 2017.

• Re-appointments

In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Mrs. Archana A Mittal - Joint Managing Director retiresby rotation at the ensuing Annual General Meeting and being eligible she has offeredherself for re-appointment. Your Board recommends her reappointment.

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. The Board of Directors at their meeting held on 8th February 2017have dissolved the Risk Management Committee as the provisions for the said Committee arenot applicable to the Company and to avoid the additional compliance and paper work theboard dissolved the Risk Management Committee. A detailed note on Board and its committeesis provided in the corporate governance 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 fiitureoperations.

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. Jayesh Sangrajka & Co.Chartered Accountants a reputed firm of Chartered Accountants. The main thrust ofinternal audit is to test and review controls appraisal of risks and business processesbesides benchmarking 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 31st March2017 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 and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the loss ofthe 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 detecting fraud and otherirregularities.

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.


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 of theCompany for a period of three year at the 33rd Annual General Meeting (AGM) andwill retire at the ensuing Annual General Meeting. Further M/s. M. A. Parikh & Co.have expressed their unwillingness for reappointment as Auditors of the Company upon theirretirement in the ensuing 36thAnnual General Meeting.

Accordingly M/s. Chaturvedi & Shah Chartered Accountants (Firm Registration No.101720W) are proposed to be appointed as auditors for a period of 3 years commencing fromthe conclusion of 36thAnnual General Meeting till the conclusion of the 39thAnnualGeneral Meeting subject to ratification by shareholders every year as may be applicablein place of M/s. M. A. Parikh & Co. Chartered Accountants. M/s. Chaturvedi &Shah Chartered Accountants have consented to the said appointment and confirmed thattheir appointment if made would be within the limits specified under Section 141(3) (g)of the Companies Act 2013. They have further confirmed that they are not disqualified tobe appointed as statutory auditor in terms of the provisions of the proviso to Section139(1) Section 141(2) and Section 141(3) of the Act and the provisions of the Companies(Audit and Auditors) Rules 2014. The Audit Committee and the Board of Directors recommendthe appointment of M/s. Chaturvedi & Shah Chartered Accountants as statutoryauditors of the Company from the conclusion of the 36th AGM till the conclusionof 39th AGM to the shareholders.

Auditors' Report

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

a.) In respect of non-provision of additional interest from CDR Cut-off date till 31stMarch2017 estimated at Rs. 54423141/- refer Point No. 1 of the 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 2017.

b.) In respect of non-provision for interest of Rs. 202908631/- on the loan assignedto EARC from the date of assignment and amount written back of Rs. 558768625/- on thebasis of consent terms-refer Point No.2 of the Auditors Report

On the basis of Consent Terms filed by the Company and EARC with the Hon'ble BombayHigh Court the Company has not provided for interest on loan assigned to EARC from thedate of assignment and amount has been written back on the assumption that the Companywill adhere to the revised payment schedule.

c.) In respect of amount written back ofRs. 171959475/- and non-provision forinterest ofRs. 61860443/-on the loan from the date of Consent Term- refer Point No. 3of the Auditors Report

On the basis of Consent Terms filed by the Company and the NBFC with the Hon'ble BombayHigh Court the Company has not provided for interest and amount has been written back onthe assumption that the Company will adhere to the revised payment schedule.

d.) In respect of appointment of Chief Financial Officer (CFO) as a Key ManagerialPerson as per sub-section (1) of section 203 of the Companies Act 2013 refer Point No. 4of the Auditors Report.

Mr. S. Maheshwari was appointed as C.F.O w.e.f. 8th February 2017.

e.) In respect of depositing tax deducted at source of Rs.61838711/- which isoutstanding as of the year end for a period of more than six months from their dues ofpayment refer point no. vii (a) of Annexure A to the Auditors Report.

The Company is in severe financial crunch and the management is trying to pay all thestatutory dues on priority basis.

f.) In respect of defaults in repayment of dues to Bank and Financial Institutionsrefer point no. viii of Annexure A to the Auditors Report.

The Company has restructured its outstanding dues with majority of banks (Loans beingassigned to Edelweiss Asset Reconstruction Company Ltd. (EARC)) and is in process ofrestructuring the remaining dues with banks and financial institutions.

Except aforesaid qualifications/observations the points in Auditors' Report areself-explanatory and does not call for further explanation.

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 2016-17 ata remuneration of Rs. 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 madethere under the Company has appointed M/s. Aabid & Co. Company Secretaries toundertake the Secretarial Audit of the Company for the Financial Year 2016-17. TheSecretarial Audit Report for the Financial Year 2016-17 forms part of this Annual Reportas an Annexure-IVto the Board's Report.

Secretarial Auditors' Report

Management's response to the observations in the Secretarial Auditors' Report is asunder:

a.) Refer Point No. i. of Secretarial Auditors Report: The Company is in process ofrecovering the excess remuneration paid to Mr. Suhas Thakar and have already recovered Rs.3552500/- (Rupees Thirty Five Lacs Fifty Two Thousand Five Hundred Only). As on 31stMarch 2017 Rs. 4210097/- (Rupees Forty Two Lacs Ten Thousand and Ninety Seven Only) ispending to be recovered.

b.) Refer Point No. ii. of Secretarial Auditors Report: The Company had alreadyobtained post facto approval of Foreign

Investment Promotion Board (FIPB) for the warrants so allotted. An application to RBIfor compounding has been filed by the Company and a hearing on the same is awaited.


Your Company sincerely believes that growth needs to be sustainable in a sociallyrelevant manner. Today's business environment especially in India therefore demands thatcorporates 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


Your Company recognizes the importance of human resources which is key and vital assetfor enabling your Company to serve its Clients 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 (KRAs) 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.L 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 atworkplace with a mechanism of lodging complaints. Its redressal is placed on the intranetfor the benefit of its employees. During the year under review no complaints werereported 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 annexedas 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

SI. 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) (appointed CFO w.e.f. 08th February 20171
4 Ms. Savita Dalai Company Secretary and Compliance Officer


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.


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


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 corporations at pan-India level.


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-VT' which forms part of this Report.


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 businessassociates and all other 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
Place: Mumbai Chairman and Managing Director Joint Managing Director
Date: 26th August 2017 DIN:00226355 DIN:00703208