You are here » Home » Companies » Company Overview » ARSS Infrastructure Projects Ltd

ARSS Infrastructure Projects Ltd.

BSE: 533163 Sector: Infrastructure
NSE: ARSSINFRA ISIN Code: INE267I01010
BSE 00:00 | 18 Oct 24.05 1.10
(4.79%)
OPEN

24.05

HIGH

24.05

LOW

24.05

NSE 00:00 | 18 Oct 24.45 1.15
(4.94%)
OPEN

24.45

HIGH

24.45

LOW

23.40

OPEN 24.05
PREVIOUS CLOSE 22.95
VOLUME 2755
52-Week high 63.00
52-Week low 19.00
P/E
Mkt Cap.(Rs cr) 55
Buy Price 24.05
Buy Qty 2024.00
Sell Price 24.05
Sell Qty 85.00
OPEN 24.05
CLOSE 22.95
VOLUME 2755
52-Week high 63.00
52-Week low 19.00
P/E
Mkt Cap.(Rs cr) 55
Buy Price 24.05
Buy Qty 2024.00
Sell Price 24.05
Sell Qty 85.00

ARSS Infrastructure Projects Ltd. (ARSSINFRA) - Director Report

Company director report

To

The Members of

ARSS Infrastructure Projects Limited

Your Directors have pleasure in presenting before you the 19th Annual Reportof the Company together with summary of standalone and consolidated audited financialstatements for the year ended March 312019.

1. A. Financial Position & Performance:

Particulars

Standalone

Consolidated

2018-19 2017-18 2018-19 2017-18
Sales 459.10 584.34 459.10 584.34
Profit before Depreciation Interest and tax 32.72 (1759) 32.72 (1758)
Less : Depreciation 22.02 23.94 22.02 23.94
Interest 2753 3724 2753 3725
Share of net profit or associates and joint ventures accounted using equity method - - (0.60) (3.66)
Profit Before tax (16.83) (78.77) (1743) (82.43)
Less : tax Expenses
a) Current Year - - - -
b) Earlier Year - 5.95 - 5.95
c) Deferred tax (5.62) (29.95) (5.62) (29.96)
Profit/Loss After tax (11.21) (54.77) (11.81) (58.42)
Balance brought forward from previous year (18727) (132.47) (19728) (138.83)
Add :Re-measurement of defined employee benefit plans through OCI 0.05 (0.03) 0.05 (0.03)
Amount Available for Appropriation (198.43) (18727) (209.04) (19728)
Appropriations
a) Dividend - - - -
b) tax on Dividend - - - -
c) transfer to General Reserve - - - -
Balance Carried to Balance Sheet (198.43) (18727) (209.04) (19728)
Earnings per Share (In ') (Weighted) Basic (Equity Shares of face value of ' 10/- each) (4.93) (2752) (5.20) (29.35)
Earnings per Share (In ') (Weighted) Diluted (Equity Shares of face value of ' 10/- each) (4.93) (2752) (5.20) (29.35)

B. Subsidiary/ Associate & Joint Venture Company

Particulars

ARSS Damoh

ARSS Developers Limited

Hirapur Tolls Pvt. Ltd. (Subsidiary Company)

(Associates)

2018-19 2017-18 2018-19 2017-18
Sales

-

-

0.02 0.10
Profit before Depreciation Interest and Tax

-

-

-0.29 -0.45
Less : Depreciation

-

-

0.28 0.28
Interest

-

-

4.53 6.31
Profit Before Tax

-

-

-5.10 -704
Less : Tax Expenses
a) Current Year

-

-

-

b) Earlier Year

-

-

-

c) Deferred Tax

-

-

0.33 -0.03
Profit/Loss After Tax

-

-

-4.77 -707
Balance brought forward from previous year

-

-

-26.24 -19.17
Amount Available for Appropriation

-

-

-

-

Appropriations
a) Dividend

-

-

-

-

b) Tax on Dividend

-

-

-

-

c) Transfer to General Reserve

-

-

-

-

Balance Carried to Balance Sheet

-

-

-31.01 -26.24
Earnings per Share (In ') (Weighted) Basic (Equity Shares of face value of ' 10/- each) - - -732 -10.86
Earnings per Share (In ') (Weighted) Diluted (Equity Shares of face value of ' 10/- each) - - -732 -10.86

2. Dividend

Your Directors did not recommend any dividend for the financial year ended March312019.

3. Operating Result :

The turnover of the Company in the year is ' 459.10 crores as compared to ' 584.34crores in the previous financial year. The profit before tax is ' (16.83) crores ascompared to ' (78.77) crores for the previous financial year.

4. Details of Subsidiary Joint Venture or Associates A. Details of Subsidiary andAssociate Companies

During the year under review no companies have become or ceased to be company'ssubsidiary or associate companies. However the company has started some Joint Venture(JVs) during the year. A report on the company's subsidiary joint ventures or associatecompanies as per companies Act 2013 is provided hereunder:

Sl. No. Name of the Company Address of the Company CIN/GLN/ PAN Holding / subsidiary/ associate % of shares held/ share in JV Applicable section
1 ARSS Damoh- Hirapur Tolls Private limited Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 U45201OR2011PTC013524 Subsidiary Company 99.82 % 2 (87)
2 ARSS Developers Limited Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 U452090R2007PLC009201 Associate Company 38.41% 2 (6)

B. Joint Venture (AOP)

Sl. No. Name of the company Address of the company CIN/GLN/PAN Holding /subsidiary/ associate % of shares held/ share in JV
1 NIRAJ-ARSS JV. Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAAAN5116B Joint Venture 40.00%
2 ARSS-ATLANTA JV. Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAQFA8726P Joint Venture 51.00%
3 ATLANTA-ARSS JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AABAA0048E Joint Venture 49.00%
4 ARSS-HCIL consortium Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAOFA4560D Joint Venture 60.00%
5 ARSS-TRIVENI JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AABAA1081H Joint Venture 51.00%
6 PATEL-ARSS JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAAAP8266E Joint Venture 49.00%
7 BACKBONE- ARSS JV. Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAAAB7056Q Joint Venture 49.00%
8 SOMDATT BUILDERS- ARSSJV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AADAS6434L Joint Venture 49.00%
9 ARSS-ANPR JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AABAA1158M Joint Venture 51.00%
10 HCIL- ADHIKARYA- ARSSJV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAEFH3757R Joint Venture 30.00%
11 ARSS GVR JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AACAA1049A Joint Venture 51.00%
12 HCIL-ARSSSPL- TRIVENI JV 113-A Kamala Nagar Delhi-110007 AADFH8758B Joint Venture 30.00%
13 HCIL- KALINDEE- ARSSJV 113-A Kamala Nagar Delhi-110007 AAEFH1678M Joint Venture 30.00%
14 ARSS - SIPS (JV) 129 transport Centre Rohtak Road Punjabi Bagh New Delhi - 110 035 AAEAA3620K Joint Venture 51.00%
15 ARSS-SCPL (JV) Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAEAA3621J Joint Venture 51.00%
16 ARSS-BMS (JV) Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAEAA4835G Joint Venture 51.00%
17 ARSS-LGPPL JV. Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAGAA3633G Joint Venture 51.00%
18 ARSS- TECHNOCOM- PRIYASHI ASHI JV. Kamrup Chamber road Fancy Bazar Guwahati-781001- Assam AAHAA8492L Joint Venture 51.00%
19 ARSS-SNKI JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAEAA8546Q Joint Venture 51.00%
20 ARSS-THAKUR JV. Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAJAA0912F Joint Venture 80.00%
21 NPCC-ARSS JV Raja House30-31 Nehru Place New Delhi-110019 Awaited Joint Venture 26.00%
22 ARSS-KKMPL JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAHAA8368B Joint Venture 51.00%

The name of the Joint Venture which have become JV during the year :

Sl. No. Name of the Company Address of the Company CIN/GLN/PAN Holding / Subsidiary / Associate % of shares held/ share in JV
1 ARSS-LGPPL JV. Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAGAA3633G Joint Venture 51.00%
2 ARSS-TECHNOCOM- PRIYASHI ASHI JV. Kamrup Chamber road Fancy BazarGuwahati-781001- Assam AAHAA8492L Joint Venture 51.00%
3 ARSS-SNKI JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAEAA8546Q Joint Venture 51.00%
4 ARSS-THAKUR JV. Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAJAA0912F Joint Venture 80.00%
5 NPCC-ARSS JV Raja House30-31 Nehru Place New Delhi-110019 Awaited Joint Venture 26.00%
6 ARSS-KKMPL JV Plot No-38 Sector-A Zone-D Mancheswar Industrial Estate Bhubaneswar- 751010 AAHAA8368B Joint Venture 51.00%

During the year under review no Joint Venture has been ceased to become JV.

5. Consolidated Financial Statements:

Consolidated financial statements (consolidating financials of ARSS Damoh - HirapurTolls Private Limited being its subsidiary company and of ARSS Developers Limited beingits associate company) in terms of Section 129 (3) of the Companies Act 2013 read withrule 6 of Companies (Accounts) Rules 2014 and under Regulation 33 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter referred as"SEBI Listing Regulations") and as per requirements of Ind AS 110 -consolidatedfinancial statements read with Ind AS 28- Investment in associates and Joint ventures andInd AS 31 - interest in Joint ventures the Audited Consolidated Financial Statements areprovided in this Annual Report.

Pursuant to the Section 129 (3) of the Companies Act 2013 read with rule 5 ofCompanies (Accounts) Rules 2014 a statement containing the salient features of thefinancials statements of each of the subsidiary and associate company in the prescribedform AOC-1 is annexed to this annual report.

Pursuant to the Section 136 of the Companies Act 2013 financial statements ofsubsidiary/ associate companies are kept for inspection by the shareholders at theRegistered Office of the Company. The said financial statements of the subsidiaries arealso available on the website of the Company www.arssgroup.in under the Investors Section.

6. Reserve

No amount was proposed to be transferred to general reserve.

7. Operations- Work Orders

Your Directors are pleased to inform that during the year under report the Company(alongwith it's JVs) has secured the following contracts (work order):

a. At - Kenduapada "Supply & Delivery of 50mm size hard stone machine crushedballast of approved quality and loading the same into any type of railway wagons atKenduapada depot for unloading in different sections." is awarded in favour of ourCompany i.e. ARSS Infrastructure Projects Limited by East Coast Railway Khurda Road on16th April 2018 with a contract value ' 6.78 crores.

b. At Tangla: Manufacturing supply and staking of 50/60mm size machine crushed stoneballast in machine in depot and loading the same into hopper in Rangiya Division isawarded in favour one of our Joint Venture (JV) named ARSS TECNOCOM-PRIYASHIAASI(JV)Kamrup Chambeer Road Fancy Bazar Guwahati-781001 by the DRM (Works) Northeast FrontierRailway Rangiya Maligaon 28th August 2018 with a contract value of ' 26.05crores.

c. At NAM/BOJ: Manufacturing supply and staking (from Private Quarry) of 50mm machinecrushed Stone ballast in Depot and Loading the ballast into hopper wagon in TSK Divisionis awarded in favour one of our Joint Venture (JV) named ARSS TECNOCOM-PRIYASHIAASI(JV)Kamrup Chamber Road Fancy Bazar Guwahati-781001 by DRM (Works) Northeast FrontierRailway Rangiya Maligaon on 28th Augst 2018 with Contract Value ' 51.73Crores.

d. At Raghunathpur - "Supply 50000 cum. of hard stone machine crushed ballast of50mm size at Raghunathpur Depot & Loading the same into any type of railway wagon forKhurda Road Division is awarded in favor of our Company ARSS Infrastructure ProjectsLimited by DRM Engg. East Coast Railway Khurda Road on 17th December 2018with a contract value of ' 8.49 Crores.

e. At Koraput-Singapur road Doubling project :- Supplying transporting and stacking of97000 cum of contractor's hard stone machine crushed Track Ballast as per Railwayspecifications between Laxmipur Road - Tikiri Stations(Including yard) From Km.61.17 toKm.83.06) on KR line of WAT Division of East Coast Railway is awarded in favour one of ourJoint Venture (JV) named ‘ARSS-SCPL (JV)" by East Coast Railway on 26thDecember 2018 with a contract value of ' 15.51 Crores.

f. At Mizoram - Widening and upgradation to 2 Lane with paved shoulder configurationand geometric improvement from km 298.00 to km 339.00 on Aizawl-tuipang section of NH-54in the state of Mizoram (Package-7) with JICA loan Assistance Project On EPC mode isawarded in favour one of our Joint Venture (JV) named "NPCC-ARSS- (JV)" byNational Highway & Infrastructure Development Corporation Limited on 26thFebruary 2019 with a contract value of ' 429.00 Crores.

8. Performance and financial position of each of the subsidiaries and associatescompanies are included in the consolidated financial statement.

9. CREDIT Rating

The accounts of the company is NPA since 2012 therefore no rating has been assigned tothe company.

10. Listing with stock exchanges

The Company confirms that it has paid the Annual Listing Fees for the financial year2019-2020 to The Bombay Stock Exchange Limited and National Stock Exchange of IndiaLimited where the Company's Shares are listed.

11. Management Discussion and Analysis Report:

As required under regulation 34 SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Management Discussion and Analysis Report is enclosed as a part ofthis report as ‘Annexure -A'.

12. Corporate Governance and Shareholders Information:

The Company is committed to maintain the highest standards of Corporate Governance andadheres to the Corporate Governance requirements as stipulated by Securities and ExchangeBoard of India (SEBI). The report on Corporate Governance as prescribed in Schedule V (C)of the SEBI Listing Regulations forms an integral part of this Annual Report. Therequisite certificate from the Auditors of the Company confirming compliance with theconditions of Corporate Governance along-with a declaration signed by Managing Directorstating that the members of the Board of Directors and Senior Management personnel haveaffirmed compliance with the respective codes of conduct of the Board of Directors andSenior Management is attached to the report on Corporate Governance. A report on CorporateGovernance is included as a part of this Annual Report as ‘Annexure -B'.

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

As per the provisions of section 92(3) of the companies act 2013 an extract of theAnnual Return in form MGT-9 is attached as Annexure - C .

The Annual Return of the company will be available on its websitehttp://arssgroup.in/pdf/EXTRACT%20OF%20ANNUAL%20 RETURN%20MGT-9%2031032019.pdf

14. Board Committees

The Board of Directors of your Company had already constituted various Committees incompliance with the provisions of the Companies Act 2013 and SEBI Listing Regulationsviz. Audit Committee Nomination and Remuneration Committee Stakeholders RelationshipCommittee and CSR Committee.

During financial year 2014-15 in accordance with the provisions of the erstwhileClause 49 of the Listing Agreement the Board had voluntarily constituted the RiskManagement Committee.

All decisions pertaining to the constitution of Committees appointment of members andfixing of terms of reference / role of the Committees are taken by the Board of Directors.

Details of the role and composition of these Committees including the number ofmeetings held during the financial year and attendance at these meetings are provided inthe Corporate Governance Section of the Annual Report

15. Number of Board Meetings:

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

30th May 2018 10th August 2018 26th October 2018and 13th February 2019.

16. Committees of the Board of Directors

a. Audit Committee

the company has in place an Audit Committee in terms of the requirements of theCompanies Act 2013 read with the rules made there under and Regulation 18 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. the details relatingto the same are given in Annexure B' of the Board Report on the Corporate Governanceforming part of this report. Members are requested to refer to point No. 4 of CorporateGovernance Report attached with this annual report.

b. Nomination and Remuneration Committee

The company has in place Nomination and Remuneration Committee in terms of therequirements of the Companies Act 2013 read with the rules made there under andRegulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.The details relating to the same are given in Annexure B' of the Board Report on theCorporate Governance forming part of this report. Members are requested to refer to pointNo. 5 of Corporate Governance Report attached with this annual report.

c. Corporate Social Responsibility Committee (CSR):

The company has in place Corporate Social Responsibility Committee (CSR) in terms ofthe requirements of section 135 and Schedule VII of the Companies Act 2013. The detailsrelating to the same are given in Annexure B' of the Board Report on the CorporateGovernance forming part of this report. Members are requested to refer to point No. 6 ofCorporate Governance Report attached with this annual report.

d. Shareholders Relationship Committee

The company has in place Shareholders Relationship Committee in terms of therequirements of the Companies Act 2013 read with the rules made there under andRegulation 20 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.The details relating to the same are given in ‘Annexure B' of the Board Report on theCorporate Governance forming part of this report. Members are requested to refer to pointNo. 7 of Corporate Governance Report attached with this annual report.

17. Dematerialization of shares:

Physical/ NSDL/ CDSL/Summary Report as on 31st March 2019 representing99.94% of total Equity Share Capital of the Company were held in dematerialized form. TheCompany's Registrars is Bigshare Services Private Limited 1st Floor BharatTin Works Building Opp. Vasant Oasis Makwana Road Marol Andheri East Mumbai - 400059Maharashtra.

Particulars No. of Shareholders No. of Shares %
CDSL 8219 13262660 58.32%
NSDL 9561 9462579 41.62%
PHYSICAL 8 12727 0.06%
TOTAL 17788 22737966 100.00%

18. Public deposits covered under Chapter V of the Act

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

19. Auditors:

Statutory Auditors:

The Retiring auditors M/s. Ajay B Garg Chartered Accountants (Mem. Number - 032538)Mumbai retire at the ensuing Annual General Meeting and have expressed theirunwillingness to be reappointed for a further term due to their preoccupation of work.

the company has received necessary consent and certificates under Section 139 of theCompanies Act 2013 from M/s. A R M S & Associates Chartered Accountant (Firm'sRegistration No. 013019N) of Gurugram for the appointment as statutory auditors of thecompany to audit the accounts of the company for the five consecutive financial years i.e.up to 2023-24 to the effect that their appointment if made shall be in accordance withthe conditions specified therein and they satisfies the Criteria as prescribed in Section141 of the Companies Act 2013.

In view of the above M/s. A R M S & Associates being eligible for appointment andbased on the recommendation of the Audit Committee the Board of Directors has at itsmeeting held on 12th August 2019 proposed the appointment of M/s. A R M S& Associates as the statutory auditors of the Company to hold office for the fiveconsecutive year from the conclusion of this Annual General Meeting until the conclusionof 24th Annual General Meeting at such remuneration plus GST out-of-pockettravelling and living expenses etc. as may be mutually agreed between the Board ofDirectors of the Company or committee thereof and the Auditors."

Cost Auditors:

Company has maintained proper cost records and books of account pursuant to the Rulesmade by the Central Government for the maintenance of cost records under sub-section (1)of Section 148 of the Act in respect of Company's products/ services.

M/s. Asutosh & Associates Cost Accountants Bhubaneswar were appointed as CostAuditors for auditing the cost accounts of your Company for the year ended 31stMarch 2019 by the Board of Directors pursuant to the Section 148 of the Companies Act2013 and Companies (Audit and Auditors) Rules 2014.

Secretarial Auditors:

M/s Sunita Mohanty & Associates. a firm of practicing Company SecretariesBhubaneswar were appointed as Secretarial Auditors of the Company for the financial year2018-19 by the Board of Directors pursuant to the Section 204 of the Companies Act 2013read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014. The Secretarial Audit Report submitted by M/s Sunita Mohanty &Associates is enclosed as a part of this report ‘Annexure-D! The secretarialAudit Report deport doesn't have any qualifications however there are some matters ofemphasis marked by the auditors. In the opinion of the management all matters pendingbefore concern authorities and will be settled. These matters will not impact thecompany's going concern.

Internal Auditors:

M/s. PR & Associates Cost Accountants Bhubaneswar were appointed as InternalAuditors of the Company for the financial year 2018-19 by the Board of Directors pursuantto the Section 138 of the Companies Act 2013 read with Companies (Accounts) Rules 2014.

20. Report of Auditors:

Statutory Auditors

Our reply to the qualifications of Auditors: -

Basis for Qualified Opinion on Standalone Financial Statements

a) In absence of relevant records Contract-wise surplus/loss has neither beenascertained nor recognized in compliance with Ind AS-115 ‘Revenue from contract withcustomers'

Company Reply: During the work execution period there is escalation claim revisionof contact value extension of completion period etc due to which unpredictable variationin reliable estimation of revenue and cost. Also the allocation of combine Operatingoverhead Head office overhead and Financial Cost is not possible due to combine use orhigh swapping of resources size of the Contracts. Hence financial implication of thequalification is not quantifiable.

b) The company has overdue accumulated secured debts amounting to ' 1629.46 Crores outof which ' 123.53 Crores subject to interest reconciliation from 01.10.2018 and ' 1505.93Crores subject to reconciliation of interest thereon from 01.04.2016. Banks haveclassified the accounts as NPA. No interest has been charged on these secured debts to theProfit & Loss account resulting in understatement of loss to that extent andunderstatement of liability. Secured lenders have served notices on various dates undersection 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement ofSecurity Interest Act 2002 for recovery of their dues.

Company Reply: The Company has not provided interest on NPA accounts Since theoutstanding amount is not quantifiable and the company is in the process for one timesettlement with the banks.

c) Bank statement from State Bank of India and Export Import Bank of India (nowEdelweiss) is not available from banks. We are unable to ascertain balances andtransaction with these banks.

Company Reply: the accounts became NPA for both the cases therefore bank statementsare not provided by the banks. the company is in the process for one time settlement withthe banks.

Basis for Qualified Opinion on Consolidated Financial Statements

a) In the absence of audited books of accounts of ARSS-SIPS JV and ARSS-BMS JV thisentity has not been included in consolidation of financial statement.

Company Reply: the Joint Venture has completed the object for which it was formed.No transaction has been entered into during the Year. the accounts of the JVs are underthe control of respective JV Partners i.e. Shyam Indus Power Solutions Pvt Ltd and BMSProjects. the accounts of these JVs are yet to be finalized from their end. Hencefinancial implication for the JV is not quantifiable. However the accounting effect of thediscrepancies if any after the finalization of its accounts will be given at current date

b) In absence of relevant records Contract-wise surplus/loss of holding company hasneither been ascertained nor recognized in compliance with Ind AS-115 ‘Revenue fromcontract with customers'.

Company Reply: During the work execution period there is escalation claim revisionof contact value extension of completion period etc due to which unpredictable variationin reliable estimation of revenue and cost. Also the allocation of combine Operatingoverhead Head office overhead and Financial Cost is not possible due to combine use orhigh swapping of resources size of the Contracts. Hence financial implication of thequalification is not quantifiable.

c) the company has overdue accumulated secured debts amounting to ' 1629.46 Crores outof which ' 123.53 Crores subject to interest reconciliation from 01.10.2018 and ' 1505.93Crores subject to reconciliation of interest thereon from 01.04.2016. Banks has classifiedit as NPA. No interest has been charged on these secured debts to the Profit & Lossaccount resulting in understatement of loss to that extent and understatement ofliability. Secured lenders have served notices on various dates under section 13(2) ofSecuritisation and Reconstruction of Financial Assets and Enforcement of Security InterestAct 2002 for recovery of their dues.

Company Reply: the Company has not provided interest on NPA accounts Since theoutstanding amount is not quantifiable and the company is in the process for one timesettlement with the banks.

d) Bank statement for State bank of India and Export Import Bank of India is notavailable from banks. We are unable to ascertain balances and transaction with thesebanks.

Company Reply: the account became NPA for both the cases therefore bank statementsare not provided by the banks. the company is in the process for one time settlement withthe banks.

e) In case of M/s. ARSS Damoh-Hirapur ToIIs Pvt Ltd; wherein status of rights andtitle on the Capital work-in-progress valued at ' 104.36 Crores has neither beenascertained nor the effect of the same has been accounted for in the financial statements.

Company Reply: We have filed Arbitration claim before MPRDCL for rights on thetitle the matter is subjudice.

f) In case of M/s. ARSS Damoh-Hirapur ToIIs Pvt Ltd; wherein in absence of details ofphysical verification of Capital Work in Progress discrepancies if any between book andphysical balance could not be ascertained including effect of the same in the financialstatements.

Company Reply: the work has been terminated since long and mater is subjudice andtherefore it is difficult to do physical verification.

g) We draw attention to Note No.12 to accompanying statement wherein in case of M/s.ARSS Damoh-Hirapur ToIIs Pvt Ltd interest on Loan from Banks of ' 58.41Crores classifiedby bankers as NPA has neither been ascertained nor the effect of the same has beenaccounted for in the financial statements. During the year company restate its liabilityto match bank statement provided by bank wherein interest has not been charged.

Company Reply: The account has already turned NPA. Interest has been reversed tothe extent of bank statement balance as at 31st March 2019 and the company isin the process of obtaining a compromise settlement.

h) In case of HCIL -ADHIKARYA- ARSS JV wherein status of rights title andrecoverability of the Work-In-Progress valued at ' 165.38 Crores has neither been verifiedand ascertained nor the effect of the same has been accounted for in the financialstatement.

Company Reply: Since the matter is in Arbitration the Company has not booked theWork in Progress in revenues awaiting the final decision.

21. Directors /Key Managerial Personnel Appointed / Resigned During the Year; (*)

the following were appointed/ reappointed/ Resigned as Directors /Key ManagerialPersonnel during the financial year under review:

Sl. No. Name Designation Date of Appointment Date of Resignation
1 Mrs. Alka Khemka Company Secretary 1st November 2014 30th March 2019

In accordance with the provisions of the Act and the Articles of Association of theCompany Shri Subash Agarwal Chairman of the Company retire by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment. the proposalregarding the re-appointment of the aforesaid Director is placed for your approval. theBoard of Directors recommends his re-appointment.

Suitable resolution(s) for appointment / reappointment of Director(s) as referredabove will be placed for approval of the members in the forthcoming Annual GeneralMeeting. the brief resume and other information of the concerned director(s) in terms ofthe Regulation 26(4) and 36 (3) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 have been detailed as an annexure in the notice convening theforthcoming Annual General Meeting.

During the year the non-executive directors of the Company had no pecuniaryrelationship or transactions with the Company other than sitting fees and reimbursementof expenses incurred by them for the purpose of attending meetings of the Company.

22. Key Managerial Personnel

Following persons are the Key Managerial Personnel of the Company pursuant to Section2(51) and Section 203 of the Act read with the Rules framed thereunder:

a. Mr. Rajesh Agarwal Managing Director;

b. Mr. S. K. Pattanaik Chief Financial Officer

c. Mrs. Alka Khemka Company Secretary*

d. Mr. Prakash Chhajer Company Secretary**

• *Mrs. Khemka was resigned from the post of Company Secretary w.e.f. 30.03.2019

• ** Mr. Prakash Chhajer has joined the company as company secretary (KMP) w.e.f.28.05.2019

23. Secretarial Standards

the Company has complied with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.

24. Director's Responsibility Statement:

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

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

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

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

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

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

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

25. Code of Conduct

The Code of Conduct (hereinafter referred to as ‘Code') is applicable to all itsBoard Members and Senior Management Personnel of the Company. A Code of Conduct for theDirectors and Senior Management Personnel has already been approved by the Board ofDirectors of the Company. All Board Members and Senior Management Personnel had affirmedcompliance with the Code during the year and no violation of the same was reported. Adeclaration to the effect that all Board Members and Senior Management Personnel havecomplied with the Code during the financial year 2018-19 duly signed by Managing Directorof the Company is herein below enclosed with Corporate Governance Report. The Code hasalso been posted on the Company's Web-site.

26. Particulars of employees (rule 5(2) and 5(3)) and managerial remuneration (rule5(1)) of the companies (appointment and remuneration of managerial personnel) rules 2014 and under section 197(12) of the act The total number of employees as on 31stMarch 2019 stood at 567

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) 5(2) and 5 (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided as follows:

(i) The percentage increase in remuneration of each director Chief Financial OfficerCompany Secretary during the financial year 2018-19 and ratio of the remuneration of eachdirector to the median remuneration of the employees of the company for the financial year2018-19 are as under;

Sr. No. Name of the Director/ KMP and designation Remuneration of Director/ KMP for the FY 2018-19 (' in Lacs) % increase in remuneration in the FY 2018-2019 Ratio of remuneration of each Director/ to median remuneration of employees
1 Mr. Subash Agarwal Chairman Nil Nil Nil
2 Mr. Rajesh Agarwal Managing Director Nil Nil Nil
3 Mr. S. K. Pattnaik Chief Financial Officer 30.00 Nil Not Applicable
4 Mrs. Alka Khemka Company Secretary 9.00 Nil Not Applicable

(ii) The median remuneration of employees of the company during the financial year was' 150000;

(iii) In the Financial year there was an increase 4.17% in the median remuneration ofemployees;

(iv) There were 567 permanent employees on the rolls of Company as on March 312019;

(v) Average percentage increase in the salaries of employees other than the managerialpersonnel in the last financial year i.e. 2018-19 was 0.35 % whereas there were noincrease in the managerial remuneration for the same financial year.; and

(vi) It is hereby affirmed that the remuneration paid is as per the Remuneration Policyfor Directors Key Managerial Personnel and other Employee.

THE INFORMATION REQUIRED UNDER SECTION 197 OF THE ACT READ WITH RULE 5(2) & (3) OFTHE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014 ARE GIVENBELOW:

SI. No. Name Age in Years Qualification Date of Commencement of Employment Designation Remuneration (Amount in ?) Total Experience (No. of yrs.) Previous Employment (Designation) Percentage of equity share held by employee in company
1 Mr. Sunil Agarwal 43 Commerce Graduate 01.11.2007 President & CEO 4200000 20 NA 1.23
2 Mr. Anil Agarwal 48 Commerce Graduate 01.11.2007 Sr. VP & COO 4200000 24 NA 1.49
3 Mr. S .K. Pattanaik 48 M.Com LLB PGDM 01.04.2015 CFO 3000000 19 ARSSI.P.L.DF 0.00005
4 Mr. Surendra Ku. Khare 53 BE-CIVIL 15.03.2012 VP-Contract & Arbitration 2400000 29 Niraj Cement Structure Limited - GM-Contract -
5 Mr. Sanjay Peshion 51 B.TECH.-CIVIL 01.05.2016 VP 1800000 28 Harishchandra India Ltd. - Additional GM -
6 Mr. Aari Kesavulu 41 BE-CIVIL 02.01.2017 Project Coordinator 1800000 18 ECI ECC Ltd. Construction Manager -
7 Mr. K.P.Verma 51 BE-CIVIL 01.04.2016 Project Director 1560000 23 Aravali Infra Power Ltd. - Project Manager -
8 Mr. Rashmi Ranjan Singh 46 CA 01.08.2007 AVP-Finance & Accounts 1560000 16 ARSS I.PL. - Financial Advisor -
9 Mr. Ratnakar Barik 43 B.TECH.-CIVIL 01.05.2017 Project Manager 1500000 21 Machine Tools AIDS (India) Infrastructure Division - Construction Manager
10 Mr. 0. Balakrishna Rao 45 BSE 01.06.2000 Project In- Charge 1140000 26 ARSS I.PL. Site In-Charge -

27. Company's Policy On Directors' Appointment And Remuneration Including Criteria ForDetermining Qualifications Positive Attributes Independence Of A Director And OtherMatters Provided Under Sub-Section (3) Of Section 178;

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

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

The Company has complied with the definition of Independence as per regulation SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and according to theProvisions of section 149(6) Companies Act 2013. The company has also obtaineddeclarations from all the Independent Directors pursuant to section 149 (7) of theCompanies Act 2013.

29. Industrial Relation:

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

30. Adequacy of internal financial controls with reference to the Financial Statements.-

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

• Safeguarding Assets and their usage.

• Maintenance of Proper Accounting Records and

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

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

31. Annual Evaluation by the Board of Its Own Performance (Including Committees andIndividual Directors)

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate exercise was carried out toevaluate the performance of individual Directors including the Chairman of the Board whowere evaluated on parameters such as level of engagement and contribution and independenceof judgment thereby safeguarding the interest of the Company. The performance evaluationof the Independent Directors was carried out by the entire Board. The board also carriedout annual performance evaluation of the working of its Audit Nomination and Remunerationas well as stakeholder relationship committee. The Directors expressed their satisfactionwith the evaluation process.

32. Segment wise performance:

The Company is engaged in only one segment viz. Construction Business and as such thereis no separate reportable segments as per IND AS -108 "Operating Segment."

33. Independent Directors Meeting

During the year under review the Independent Directors of the Company met on 13thFebruary 2019 inter-alia to discuss:

i) Evaluation of performance of Non-Independent Directors and the Board of Directors ofthe Company as a whole.

ii) Evaluation of performance of the Chairman of the Company taking into account theviews of Executive and NonExecutive Directors.

iii) Evaluation of the quality content and timelines of flow of information betweenthe Management and the Board that is necessary for the Board to effectively and reasonablyperform its duties.

34. Familiarisation Programme of Independent Directors

In compliance with the requirements of SEBI Listing Regulations the Company has put inplace a familiarization program for Independent Directors to familiarize them with theirrole rights and responsibility as Directors the operations of the Company businessoverview etc. The details of the familiarization program are explained in the CorporateGovernance Report and the same is also available on the website of the Company.

35. Details of significant and material orders:

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

36. Particulars of Loans Guarantees or Investments under Section 186

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

37. Particulars of Contracts or Arrangements with Related Parties Referred To InSub-Section (1) of Section 188 in the Prescribed Form AOC-2

All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in its ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions.

The Policy on Materiality of Related Party Transactions and on dealing with RelatedParty Transactions as approved by the Board is put up on the Company's website and can beaccessed at http://arssgroup.in/pdf/ARSS%20POLICY%20ON%20RELATED%20PARTY%20TRANSACTIONS.pdf

All related party transactions are in compliance with Ind-AS 24 Section 188 and / orSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and are placedbefore the Audit Committee as also before the Board for approval. Prior omnibus approvalof the Audit Committee was also sought for transactions which are of a foreseen andrepetitive nature.

There were no materially significant related party transactions which could havepotential conflict with interest of the Company at large.

Members may refer Note 61 to the Standalone Financial Statement which sets out relatedparty disclosures pursuant to Ind AS 24.

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

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

there have been no material changes and commitments affecting the financial position ofthe company between the end of the financial year and date of this report. there has beenno change in the nature of business of the company.

39. Compounding status

the company has received show cause notices by the office of Regional Director EasternRegion and Registrar of Companies of Odisha at Cuttack Pursuant to the inspection heldunder section 209(A) of the Companies Act 1956 in the year 2016-17 for the non complianceof few section of the companies act. the company has already compounded 13 sections out oftotal thirty eight sections for which show cause notices were issued. Rest are under theprocess and will be compounded in due course.

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

During the year under review the Company has taken adequate measures for conservationof energy and also has not gone for any technology absorption whatsoever in accordancewith the provisions of sub - Section (3) (m) section 134 of the Companies Act 2013 readwith the Companies (Accounts) Rules 2014. the Company has neither earned any income norincurred any expenditure in foreign currency during the financial year ended 31stMarch 2019.

41. Development and Implementation of Risk Management Policy:

the Company has established risk management framework. the Company has been addressingvarious risks impacting the Company. In accordance with the provisions of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board of Directors of theCompany at its Meeting held on February 2015 has constituted a Risk Management Committeeand has approved the Risk Management Policy of the company this Committee has beendelegated the authority by the Board to review and monitor the implementation of the riskmanagement policy of the Company.

42. Corporate Social Responsibility

i) Terms of reference:

the Committee formulates CSR Policy the role of the Committee is as under:

a. Formulate and recommend to the Board a Corporate Social Responsibility Policy whichshall indicate the activities to be undertaken by the Company as specified in Schedule VIIof the Companies Act 2013.

b. Recommend the amount of expenditure to be incurred on the activities referred in theCSR policy.

c. Monitor the CSR Policy of the Company and its implementation from time to time.

d. Such other functions as the Board may deem fit from time to time.

ii) Composition name of Members and attendance during the year:

the CSR Committee of the Company consists of 2 Non-Executive Independent Directors and1 Executive Director.

Name of the member Position No. Of Meetings held during the FY 2018- 19 No. of meetings Attended during the FY 2018- 19
Mr. Rajesh Agarwal Chairman 1 1
Mr. Swarup Chandra Parija Member 1 1
Mr. Pareswar Panda Member 1 0

iii) No. of Meetings held during the year:

During the year the committee has met once i.e. on 30th May 2018

iv) Amount incurred on CSR activities during the year:

Section 135 of the Companies Act 2013 & Companies (Corporate Social ResponsibilityPolicy) Rules 2014 (CSR Rules) makes it mandatory for certain companies who fulfill thecriteria as mentioned under Sub Section 1 of Section 135 to comply with the provisions ofCorporate Social Responsibility and accordingly company had constituted a CSR committeeand has also adopted the CSR Policy for the company as approved by the committee.

Since the average of the last three years profit was in negative figures i.e. ('135.31) crores loss company need not to incur any amount towards CSR in the FY 2018-19.

A responsibility statement of the CSR Committee

The CSR Committee has confirmed that the implementation and monitoring of CSR Policyis in compliance with CSR objectives and Policy of the Company.

Sd/-

(Chairman CSR Committee)

43. Whistle Blower Policy of the Company

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

44. Internal Complaint Committee

Company has a well formulated Policy on Prevention & Redress of Sexual Harassment.the objective of the policy is to prohibit prevent and address issues of sexualharassment at the workplace. this policy has striven to prescribe a code of conduct forthe employees and all employees have access to the Policy document and are required tostrictly abide by it. the policy covers all employees irrespective of their nature ofemployment and also applicable in respect of all allegations of sexual harassment made byan outsider against an employee. During the year 2018-19 no case of Sexual Harassment wasreported.

45. Reporting of Frauds:

there have been no instances of fraud reported by the Statutory Auditors under Section143(12) of the Act and Rules framed there under either to the Company or to the CentralGovernment.

46. Acknowledgment:

Your Directors would like to acknowledge and place on record their sincere appreciationfor assistance and co-operation received from the financial institutions banksGovernment authorities customers and members during the year under review. Your Directorsalso place on record their deep sense of appreciation for the committed services by theexecutives employees at all levels.

For and on behalf of the Board of Directors
Sd/-
Place: Bhubaneswar (Subash Agarwal)
Dated: 12th August 2019 Chairman