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Arshiya
BSE: 506074|NSE: ARSHIYA|ISIN: INE968D01022|SECTOR: Transport & Logistics
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Download Annual Report PDF Format 2012 | 2011 | 2010
Directors Report Year End : Mar '14    « Mar 13
The Members of
 
 Arshiya Limited
 
 The Directors are pleased to present the 33rd Annual Report together
 with the Audited Accounts for the financial year ended 31st March,
 2014.
 
 FINANCIAL PERFORMANCE
 
 A) SUMMARIZED FINANCIAL RESULTS- ARSHIYA LIMITED
 
                                                        (Rs. in Lacs)
 
 Particulars                                  Year ended     Year ended
                                              31.03.2014     31.03.2013
 
 Income from operations and other Income       31,654.86      72,432.06
 
 Expenditure                                   48,974.28      70,337.45
 
 Profit/(Loss) Before Depreciation & Tax     (17,319.42)        2094.61
 
 Depreciation                                   1,958.10       1,990.83
 
 Profit/(Loss) Before Tax 
 & Exceptional Items                         (19,277.52)         103.78
 
 Exceptional Items (Net)                       10,667.35       1,542.95
 
 Prior period Items(Net)                         (81.36)              _
 
 Provision for Taxation                          (95.83)        (38.67)
 
 Profit/(Loss) After Tax                     (29,767.68)     (1,400.50)
 
 Balance brought forward                     (29,767.68)     (1,400.50)
 
 Amount adjusted pursuant 
 to scheme of amalgamation                             -      (7646.06)
 
 Amount available for Appropriation          (29,767.68)     (1,400.50)
 
 Balance carried to Balance Sheet            (29,767.68)     (1,400.50)
 
 B) SUMMARIZED CONSOLIDATED FINANCIAL RESULTS - ARSHIYA LIMITED AND ITS
 SUBSIDIARIES
 
                                                         (Rs. in lacs)
 
 Particulars                                   Year ended     Year ended
                                               31.03.2014     31.03.2013
 
 Income from Operations and other Income        53,647,61     114,643,56
 
 Expenditure                                   100,017.23     127,400.54
 
 Profit/(Loss) Before Tax 
 & Exceptional Items                          (46,369.62)    (12,756,97)
 
 Exceptional Item                               21,265.95         542.77
 
 Tax Expenses                                    2,073.63       (584.42)
 
 Profit/(Loss) After Tax before 
 Minority Interest                            (84,622.95)    (12,715.32)
 
 Less: Minority interest                                -              -
 
 Net Loss for the year                        (84,622.95)    (12,715.32)
 
 On a Consolidated basis your Company has recorded a loss during the
 previous year. The general overall slowdown in industrial growth and
 sluggish trend had its negative impact on your Company''s operations.
 Besides, Your Company had to face various constraints in the day to day
 operations due to regulatory and other issues which have severely
 impacted the performance of the Company. The regulatory & operational
 hurdles impacting the operations of the company are as under:
 
 - Stoppage of Transhipment of cargo from Mumbai Port to FTWZ
 
 - Delays in Duty Drawback
 
 - Non availability of Customs EDI System in FTWZ
 
 - Import General Manifest (IGM) approvals for FTWZs
 
 - Non recognition of Arshiya FTWZ as a port for import.
 
 However, the Company has been consistently taking up these issues at
 the highest levels of Government and with the new Government in place,
 it is expected that the issues will be resolved sooner than later to
 enable smoother day to day operations and better performance.
 
 In the meantime, several initiatives and measures to rationalise
 expenses, costs, improve effective utilisation of human & material
 resources to the optimum level have been taken.
 
 Your Management considered it expedient to contain high finance costs
 so that cash flow can be channelised to operations for further
 productivity. To effectively service the borrowings and at the same
 time make the resources available for the day to day operations of the
 Company, your Management thought it advisable to undertake a Corporate
 Debt Restructuring (CDR) whereby the Company''s obligations to pay
 interest and principal on borrowings has been deferred by availing
 certain concessions like moratorium etc. from the Bankers.
 
 DIVIDEND:
 
 In view of losses, the Directors regret their inability to recommend
 dividend for the financial year ended 31st March, 2014.
 
 BUSINESS AND FUTURE OUTLOOK:
 
 World class logistics infrastructure on a pan India basis, created by
 your Company provides for unified supply chain as an unique concept and
 serves as an one stop shop for all the needs of logistics.
 
 Arshiya plans to capitalize on India''s mammoth logistics opportunity by
 being India''s only Unified Supply Chain Infrastructure and Solutions
 Group. With a rich legacy in the logistics and supply chain industry in
 India, Arshiya''s unique business model makes it a pioneering company in
 the country.
 
 (I) Arshiya Rail & Rail Infrastructure:
 
 Arshiya Rail Infrastructure started its operations in February 2009.
 Our unique model has resulted in Arshiya Rail being the second largest
 Private Container Train Operator (PCTO) in India. This company is
 operating total 20 container trains at present and mostly in domestic
 sector. The company stands atop with regard to freight transportation
 per annum among all PCTO.
 
 (II) Arshiya Free Trade & Warehousing Zones (FTWZ):
 
 Over the last few decades India has been losing investments to
 neighbouring economies, which were being used by global corporations as
 bases for feeding India, due to lack of comparable infrastructure
 availability in India.
 
 With FTWZs developed by Arshiya, our country will be able to leverage
 ''Soft Infrastructure'' such as skilled manpower, cost competitiveness,
 regulatory framework, IT connectivity, as well as ''Hard Infrastructure''
 such as dedicated state-of-the-art mega logistics parks FTWZs, rail
 connectivity, industrial & distribution hubs, transport & handling and
 world class supply chain management services.  FTWZ will be a game
 changer for international as well as domestic companies which are
 importing, exporting or re-exporting products to and from India.
 
 FTWZ provides assistance to various potential clients for import and
 export, who struggle hard to recover taxes and duties paid while import
 of the inputs and other merchandise. They face the burden of spending
 heavy amounts towards recovery expenses apart from the time consumption
 or have to forego the duties paid because of lack of provisions.
 Through FTWZ they reduce their cost burden because of available special
 provisions in Law.
 
 The first FTWZ developed by Arshiya in Maharashtra near Mumbai/Panvel
 is a credential for FTWZ concept in India. With over 500 customer base
 domestic as well as international, India can be proud of providing a
 successful unified supply chain concept in the country.
 
 Arshiya Northern FTWZ Limited (ANFTWZ), a subsidiary has developed an
 FTWZ at Khurja to cater to the needs of North India. The state of the
 art railway siding at Khurja will further reduce the overall logistics
 cost between gateway ports and FTWZ/ICD.
 
 Being a pioneer in FTWZ business in India, ANFTWZ is facing a few
 regulatory challenges which have been taken up at the highest level
 with concerned Government authorities and the authorities are
 appreciative of the issues and your Management hopes to get all of the
 issues sorted out at the earliest.
 
 (III) Arshiya Industrial & Distribution Hub:
 
 Your Directors hereby inform you that the operations of AIDHL, a
 subsidiary has remained sluggish through out the year as its business
 model was based on implementation of Goods & Services Tax as also FDI
 in retail taking off. However, both the events have not happened and
 accordingly your Directors are hereby converting the AIDHL into sector
 specific SEZ pertaining to IT/ITES/Electronics/Hardware equipments etc.
 as also setting up an Inland Container Depot and proposes to merge this
 company into Arshiya Transport and Handling Limited another group
 company. The necessary Scheme of Amalgamation has been filed with the
 Hon''ble Bombay High Court and the approvals from concerned authorities
 have been applied for.
 
 (IV) Arshiya Northern FTWZ Ltd. (ANFTWZ)
 
 Your Directors hereby inform you that the operation of ANFTWZ have
 remained sluggish due to the regulatory issues being faced by the
 company and accordingly your Directors are hereby converting the ANFTWZ
 into sector specific SEZ pertaining to
 Chemicals/Pharmaceuticals/Bio-technology and proposes to merge this
 company into Arshiya Transport & Handling Ltd.another group company.
 The requisite Scheme of Amalgamation has been filed with the Hon''ble
 Bombay High Court and the approvals from concerned authorities have
 been applied for.
 
 (V) Arshiya Supply Chain Management Private Limited
 
 Arshiya Supply Chain Management Private Limited provides end-to-end
 supply & demand chain solutions and is committed to evolving end-to-end
 strategic solutions across supply chain management by using innovative
 technology.
 
 Subsidiary Companies [As on 31st March, 2014]
 
 As required under the listing agreements with Stock Exchanges, a
 consolidated Financial Statement of the Company and all its
 subsidiaries prepared in accordance with Accounting Standards 21 and 23
 issued by the Institute of Chartered Accountants of India (ICAI) giving
 details of financial resources, assets, liabilities, income, profits,
 etc. of the Company, its associates and subsidiaries, after elimination
 of minority interest as a single entity, is annexed. The statement
 pursuant to section 212(1)(e) of the Companies Act, 1956, containing
 details of subsidiaries of the Company forms part of the Annual Report.
 
 In accordance with the general circular issued by the Ministry of
 Corporate Affairs, Government of India dated 8th February, 2011, the
 annual accounts and other documents of the Subsidiary Companies are not
 being attached with the Annual Report of the Company.  The Annual
 Accounts of the above referred subsidiaries as at 31st March, 2014, and
 related detailed information will be made available to any member of
 the Company/its subsidiaries seeking such information at any point of
 time and the same will also be available for inspection by any Member
 of the Company/ its subsidiaries at the Registered Office of the
 Company. In addition, the Annual Accounts of the said subsidiaries will
 be made available for inspection at the Registered Office of the
 respective subsidiary companies.
 
 PREFERENTIAL ALLOTMENT:
 
 The Company had allotted 1,36,00,000 convertible warrants at Rs.145/-
 per warrant to promoters/ promoters group on preferential basis
 pursuant to the special resolution passed by the members of the Company
 at their meeting held on 18th October, 2012. These warrants have been
 converted into equity shares (in the ratio of 1 share for 1 warrant) of
 Rs. 21- each at a premium of Rs.143/- per share in three tranches i.e.
 53,00,000, 52,50,000 and 30,50,000 during the financial years
 2014-2015, 2013-2014 and 2012-2013 respectively.
 
 CORPORATE GOVERNANCE
 
 Your Company has been following the principles of good Corporate
 Governance over the years and lays strong emphasis on transparency,
 accountability and integrity. As per clause 49 of the listing Agreement
 entered into with BSE and NSE, a separate section on Corporate
 Governance forms part of this Annual Report.
 
 A Certificate from a Practising Company Secretary confirming compliance
 with the conditions of Corporate Governance under Clause 49 of the
 listing Agreement is also attached to this Report.
 
 DIRECTORS
 
 Mr. Suhas Thakar - Executive Director ceased to be the director of the
 Company consequent to the superannuation w.e.f. 31st March, 2014. Mr.
 Sandesh Chonkar and Mr. James Beltran ceased to Directors consequent to
 resignation w.e.f. 21s'' August 2013 and 6th September 2013
 respectively. Mr. Ajay S Mittal - Managing Director retire by rotation
 and being eligible, offer himself for re-appointment at the ensuing
 Annual General Meeting. In accordance with the provisions of Sections
 149 of the Companies Act, 2013 these Directors are being appointed as
 Independent Directors to hold office as per their tenure of appointment
 mentioned in the notice ensuing Annual General Meeting of the company.
 
 The Company has received declarations from all the Independent
 Directors of the Company confirming that, they meet the with the
 criteria of Independence as prescribed both under Section 149(6) of the
 Companies Act, 2013 & Clause 49 of the Listing Agreement with the Stock
 Exchanges.
 
 Brief details of the Directors proposed to be appointed /Re - appointed
 as required under Clause 49 of the Listing Agreement are provided in
 the notice of the Annual General Meeting forming part of this Annual
 Report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 In accordance with the provisions of Section 217 (2AA) of the Companies
 Act, 1956, with regard to the Directors'' Responsibility Statement, the
 Directors confirm that:
 
 a) in the preparation of the annual accounts, the applicable accounting
 standards have been followed and there has been no material departures;
 
 b) the selected accounting policies were applied consistently and the
 Directors made judgments and estimates that are reasonable and prudent
 so as to give a true and fair view of the state of affairs of the
 Company as at 31st March, 2014, and of the loss of the Company for the
 year ended on that date;
 
 c) Proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956, for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 d) the annual accounts have been prepared on a going concern basis.
 
 SECRETARIAL AUDIT REPORT
 
 Your Company had engaged Mr. Manoj Mimani, Practising Company
 Secretary, to review Secretarial Compliance for the financial year
 ended 31st March, 2014. The Secretarial Compliance Certificate
 addressed to the Board of Directors of the Company forms part of this
 Annual Report. The Secretarial Compliance Certificate confirms that the
 Company has complied with the applicable provisions of the Companies
 Act, 1956, Depositories Act, 1996, Listing Agreement with Stock
 Exchanges and all the Regulations of SEBI as applicable to the Company
 including SEBI (Substantial Acquisition of Shares and Takeovers)
 Regulations, 2011 and the SEBI (Prohibition of Insider Trading)
 Regulations, 1992.
 
 HUMAN RESOURCES
 
 Human Resource Department of your company is instrumental in building
 employees capabilities through structured talent acquisition and its
 development through technical and need based training. For your
 Company, employees are the most valuable assets.  Attracting, training,
 growing and retaining talented professionals continue to be the focus
 for Human Resources division of your Company. Pay for performance
 philosophy helps us in rewarding high performers thereby motivating
 talent and enhancing retention.
 
 HEALTH, SAFETY AND ENVIRONMENT:
 
 As a responsible corporate citizen, your Company lays considerable
 emphasis on health, safety aspects of its human capital, operations and
 overall working conditions. Thus being constantly aware of its
 obligation towards maintaining and improving the environment, all
 possible steps are being taken to meet the toughest environmental
 standards on pollution, effluents, etc. across various spheres of its
 business activities.
 
 Arshiya''s Rail Infrastructure division especially plays a pivotal role
 in the mitigation of pollution and reduction of fuel used for road
 travel through its unique Rail solutions that it provides to
 corporations at pan-India level.
 
 Your Company has implemented several proactive measures towards
 ensuring its logistics infrastructures especially the FTWZ in Mumbai
 and Khurja, along with the Industrial & Distribution Hub are
 environment friendly. Following measures are being implemented in
 Mumbai FTWZ, which will be followed across locations:
 
 Development of green area: Re-plantation of trees in the FTWZ.
 
 - Conservation of top soil by removing and storing it before the
 digging/ piling work. The top soil was re-used for developing the green
 areas
 
 Provision provided in the storm water drainage system to allow ground
 water recharging
 
 Sewage treatment plant in all the facilities - Mumbai FTWZ, Khurja FTWZ
 as well as the Khurja Industrial and distribution Hub. Water treated in
 these plants is being re-utilized for watering of the landscaping.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 Your Company sincerely believes that growth needs to be sustainable in
 a socially relevant manner. Today''s business environment especially in
 India therefore demands that corporates play a pivotal role in
 shouldering social responsibility. Your Company is committed to its
 endeavour in social responsibilities for benefit of the community.
 
 Under the Corporate Social Responsibility (CSR) initiative of the
 Company Arshiya Cares'', your Company has pledged to join hands with
 organizations who are working towards finding simple solutions to the
 infrastructure problems that India faces. Following CSR initiatives
 have been undertaken by your Company in the social front:
 
 Emergency Fire Fighting Service: The Mumbai FTWZ at Sai Village, Panvel
 has a 24x7 emergency fire fighting vehicle (Foam Tender) inside the
 zone managed by trained personnel. This service is supported by
 dedicated infrastructure which includes
 
 > Fire extinguishers and Signage (Fire safety plans)
 
 Ceiling based water sprinklers for the stores and office space Beam
 Detectors for Smoke and Fire Detection
 
 Fire Hydrant System with hose reels and underground water storage tanks
 
 - Emergency Fire exit doors and staircases
 
 - Building Management System with Monitoring and
 
 Public address systems to provide emergency response
 
 The above facilities are available 24x7 to the residents in the
 vicinity of Sai Village and Panvel area, free of charge through a toll
 free number
 
 Emergency Ambulance Service:
 
 The Mumbai FTWZ at Sai Village, Panvel has a 24x7 emergency ambulance
 service dedicated for residents in the vicinity of Sai Village and
 Panvel area. Stationed in the premise of the zone, it is equipped with
 expert staff trained in Trauma treatment. This service is available to
 the local population free of charge through a toll free number.
 
 Electricity Distribution Facility:
 
 At the Mumbai FTWZ at Sai Village, Panvel, your Company has created
 additional capacity in its electrical infrastructure to enable supply
 of electricity to the surrounding villages.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 Information as required under Section 217(e) of the Companies Act, 1956
 read with the Companies (Disclosure of particulars in the report of
 Board of Directors) Rules, 1988 are set out as under:
 
 Conservation of Energy: The operations of the company involve low
 energy consumption. Adequate measures have been implemented to conserve
 energy such as -
 
 - Roof of the warehouses at our FTWZs and Industrial & Distribution
 Hubs have been designed with MR24 standards with roof insulation which
 gives temperature variation of 8Degree with ambient temperature. A
 provision of installation of solar panels has been made on the roofs to
 generate renewable energy
 
 - Orientation of the warehouse buildings has been done in such a way
 that there is less heat transmission resulting in saving the
 electricity consumption by minimizing heat loss in the HVAC system.
 
 Technology Absorption: Arshiya sincerely believes in utilising
 technology to improve productivity, efficiency and quality of its
 business operations and working environment.
 
 Foreign Exchange Earnings and Outgo:
 
 Foreign Exchange received - Rs. 108,794,746/- Foreign Exchange incurred
 - Rs.  11,999,650/-
 
 PARTICULARS OF EMPLOYEES
 
 Pursuant to the provisions of Section 217(2A) of the Companies Act,
 1956 read with the Companies (Particulars of Employees) Rules, 1975 as
 amended, the names and other particulars of employees are set out in
 the Annexure to the Directors Report. However, as per the provisions of
 Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the
 aforesaid information is being sent to all members of the Company. Any
 member, who is interested in obtaining such particulars about the
 employees, may write to the Company at Registered Office of the
 Company.
 
 AUDITORS'' REPORT
 
 The observations in the Auditors Report are self explanatory and need
 no further explanations.
 
 With respect to the comment of the Statutory Auditors in note 48(H) to
 financial statement your Directors wish to clarify that the company is
 in process of making an application to the central Government in the
 respect and that the said executive director was a professional
 non-promoter Director of the Company.
 
 Further notes to the financial statements, as referred in the Auditors
 Report, are self-explanatory and therefore do not call for any further
 comments and explanations under section 217(3) of the Companies Act,
 1956.
 
 AUDITORS
 
 M/s M.A Parikh & Co., Chartered Accountants, Mumbai, Auditors of the
 Company, retire at the ensuing Annual General Meeting and are eligible
 for reappointment.
 
 Your directors recommend the appointment of M/s. M.A Parikh & Co.,
 Chartered Accountants (Firm Registration No.: 107556W) as Statutory
 Auditors of the Company, subject to approval of the members at the
 ensuing Annual General Meeting. The Company has received letter from
 M/s. M.A Parikh & Co, Chartered Accountants, to the effect that their
 appointment, if made, would be within the prescribed limits under
 section 141 of the Companies Act, 2013 and that they are not
 disqualified for such appointment. The necessary resolution seeking
 your approval for appointment of Statutory Auditor has been
 incorporated in the Notice convening the Annual General Meeting.
 
 ACKNOWLEDGEMENT
 
 Your Directors would like to express their gratitude for the
 assistance, support and co-operation received from Government of India,
 the State Governments and other Government agencies and departments,
 investors, bankers, financial institutions and all other stakeholders.
 
 Your Directors also wish to place on record their deep sense of
 appreciation for the committed services by the executives, staff and
 workers of the Company.
 
                            For and on behalf of the Board of Directors
 
                                           Ajay S Mittal 
                                   Chairman & Managing Director 
 
 DIN:00226355 
 
 Place: Mumbai.
 Dated: 9th July, 2014
 
Source : Dion Global Solutions Limited
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