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Directors Report of ARSS Infrastructure Projects Ltd.

Mar 31, 2018

The Directors have pleasure in presenting before you the 18^th Annual Report of the Company together with Audited Statements of Accounts for the Financial Year ended 31^st March, 2018:

1. Financial Position & Performance:

A. ARSS Infrastructure Projects Limited (As per IND AS)

The performance during the period ended 31st March, 2018 has been as under (Standalone):

(Rs. In Crores)

Particulars	2017-18	2016-17
Sales	584.34	836.65
Profit before Depreciation, Interest and Tax	(17.59)	(226.77)
Less : Depreciation	23.94	32.63
Interest	37.24	76.99
Profit Before Tax	(78.77)	(336.39)
Less : Tax Expenses
a) Current Year	-	-
b) Earlier Year	5.95	0.20
c) Deferred Tax	(29.95)	(4.98)
Profit/Loss After Tax	(54.77)	(331.61)
Balance brought forward from previous year	(132.47)	199.14
Amount Available for Appropriation	(187.27)	(132.47)
Appropriations
a) Dividend	-	-
b) Tax on Dividend	-	-
c) Transfer to General Reserve	-	-
Balance Carried to Balance Sheet	(187.27)	(132.47)
Earnings per Share (In Rs.) (Weighted) Basic (Equity Shares of face value of Rs.10/- each)	(27.51)	(223.46)
Earnings per Share (In Rs.) (Weighted) Diluted (Equity Shares of face value of Rs.10/- each)	(27.51)	(145.84)

B. Subsidiary/ Associate & Joint Venture Company

(Rs. In Crores)

	ARSS Damoh Hirapur Tolls Pvt. Ltd.		ARSS Developers Limited
Particulars	2017-18	2016-17	2017-18	2016-17
Sales	-	-	0.10	0.69
Profit before Depreciation, Interest and Tax	-	-	-0.45	0.06
Less : Depreciation	-	-	0.28	0.28
Interest	-	-	6.31	3.79
Profit Before Tax	-	-	-7.04	-4.01
Less : Tax Expenses
a) Current Year	-	-	-	-
b) Earlier Year	-	-	-	-
c) Deferred Tax	-	-	-0.03	-0.05
Profit/Loss After Tax	-	-	-7.07	-4.06
Balance brought forward from previous year	-	-	-19.17	-15.11
Amount Available for Appropriation	-	-	-	-
Appropriations
a) Dividend	-	-	-	-
b) Tax on Dividend	-	-	-	-
c) Transfer to General Reserve	-	-	-	-
Balance Carried to Balance Sheet	-	-	-26.24	-19.17
Earnings per Share (In '') (Weighted) Basic (Equity Shares of face value of '' 10/- each)	-	-	-10.86	-6.29
Earnings per Share (In '') (Weighted) Diluted (Equity Shares of face value of '' 10/- each)	-	-	-10.86	-6.29

2. Dividend

Your Directors have not recommended any dividend for the financial year ended March 31, 2018.

3. Operating Result :

The turnover of the Company in the year is Rs.584.34 crores as compared to Rs.836.65 crores in the previous financial year. The profit before tax is Rs. (78.77) crores as compared to Rs. (336.39) crores for the previous financial year.

4. Details of Subsidiary, Joint Venture or Associates

A. Details of Subsidiary and Associate Companies

During the year under review no companies have become or ceased to be companyâs subsidiary, joint ventures or associate companies. A report on the companyâs subsidiary, joint ventures or associate companies 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

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)

ARSS

Developers

Limited

Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010

U45209OR2007PLC009201

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%

Sl. No.	Name of the Company	Address of the Company	CIN/GLN/ PAN	Holding /Subsidiary / Associate	% of shares held/ share in JV
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%

During the year under review the following joint ventures were closed:

Sl. No.	Name of the Company	Address of the Company	CIN/GLN/ PAN	Holding / Subsidiary / Associate	% of shares held/ share in JV
1	HARISH CHANDRA-ARSSSPLJV	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AAAAH1493H	Joint Venture	49.00%
2	ARSS-MVPLJV	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AABAA1497P	Joint Venture	51.00%
3	ARSS-BALAJI JV	At / PO : Belpahar R.S., Belpahar	AABAB1071G	Joint Venture	30.00%

5. Consolidated Financial Statements:

Consolidated financial statements (consolidating financials of ARSS Damoh - Hirapur Tolls Private Limited being its subsidiary company and of ARSS Developers Limited being its associate company) in terms of Section 129 (3) of the Companies Act, 2013 read with rule 6 of Companies (Accounts) Rules, 2014 and under Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as âSEBI Listing Regulationsâ) and as per requirements of Indian Accounting Standards (âIND-ASâ) under Companies Act, 2013 on accounting and disclosure requirements, the Audited Consolidated Financial Statements are provided in this Annual Report.

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

Pursuant to the Section 136 of the Companies Act, 2013 financial statements of subsidiary/ associate companies are kept for inspection by the shareholders at the Registered Office of the Company. The said financial statements of the subsidiaries are also available on the website of the Company www.arssgroup.inunder 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 itâs JVs) has secured the following contracts (work order):

a. Package- 1 Execution of balance works for construction of major bridges (excluding the work of bridge superstructures of steel open web and composite girders) of bridge no. 326 (3x30.5m open web steel girder), 341 (3x30.5m composite steel girder welded type), 348 (7x30.5m open web steel girder), 352 (3x12.2m PSC), 355 (5x30.5m open web steel girder), 367 (6x30.5m composite steel girder welded type) and 390 (10x30.5m open web steel girder) in connection with doubling between Jaroli (incl.) and Jakhapura (incl.) (170.903 km) on Khurda road division of east coast railway in the state of Odisha, India.â is awarded in favour one of our Company ARSS Infrastructure Projects Limited by Rail Vikas Nigam Limited on 16^th February, 2018 with a contract value Rs. 89.01 crores.

b. Package-2 Execution of balance works for construction of major bridges (excluding the work of bridge superstructures of steel open web girders) of bridge no. 24 (3x18.3m PSC), 43 (3x18.3m PSC), 58 (1x30.5m open web steel girder), 66 (3x45.7m open web steel girder), 97 (3x18.3m PSC) in connection with doubling between Jaroli (incl.) and Jakhapura (incl.) (170.903 km) on Khurda road division of east coast railway and Chakradharpur division of south eastern railway in the state of Odisha, India is awarded in favour one of our Company ARSS Infrastructure Projects Limited by Rail Vikas Nigam Limited on 16th February, 2018 with a contract value of Rs. 32.08.

c. Excavation & Cement Concrete Lining of Baitarani Left Bank Canal (BLBC) from RD 24.08 Km to RD 28.50 Km. Including construction of Structures and Service Road is awarded in favour of our Company ARSS Infrastructure Projects Limited by Chief Construction Engineer, Anandapur Barrage Project, Salapada on 22^ndNovember, 2017 with Contract Value Rs. 49.37 Crores.

d. Execution of balance work of roadbed, major & minor bridges, track linking, S&T service buildings, other civil works and outdoor signaling in connection with doubling work Between BLSN to RVH (In) Section (Excluding ANMD yard) and residential & other service buildings at MSMD & ANMD of Sambalpur Division of East Coast Railway & Raipur Division of SECR in the state of Chhattisgarh, INDIA a part of Raipur - Titlagarh Doubling is awarded in favour of our Company ARSS Infrastructure Projects Limited by Rail Vikas Nigam Limited on 20^thNovember, 2017 with a contract value of Rs. 8709 Crores.

e. Jagdalpur - Koraut Doubling: Supplying, transporting and stacking of 90,000 cum of contractorâs hard stone machine crushed Track Ballast as per Railway specifications between Ambagaon - Khadapa stations (from Km.270.40 to Km.244.00) on KK line of WAT Division of East Coast Railway is awarded in favour one of our Joint Venture (JV) named âARSS-LgPpL (JV)â by by East Coast Railway on 24^th August, 2017 with a contract value of Rs. 15.78 Crores.

f. Supplying and stacking of contractorâs hard stone machine crushed Track Ballast as per Railway specifications between Jarpada and Talcher Road in connection with Talcher - Sambalpur doubling is awarded in favour one of our Joint Venture (JV) named âARSS-SCPL (JV)â by by East Coast Railway, Bhubaneswar on 23^rd August, 2017 with a contract value of Rs. 16.95 Crores.

g. Crushing of contractors hard stone using mechanized crusher to 50 mm gauge of 10,000 Cum (as per specifications) transporting the same to Kakrigumma Depot unloading and stacking on level ground including dressing of ground and loading the same into Railway wagons at Kakrigumma Depot under the jurisdiction of Asst. Divl. Engineer/ Laxmipur on Koraput - Rayagada line of Waltair Division is awarded in favour of our Company ARSS Infrastructure Projects Limited by Divisional Railway Manager, East Coast Railway, Waltair on 11^th July, 2017 with a contract value of Rs. 1.30 Crores.

h. Koraput - Singapur Road Doubling Project: Construction of Major Bridge No. 1 (1x18.3m Composite Girder, RUB), Br. No 3 (5x30.5m composite Girder), Br. No.6 (5x30.5 Composite Girder), Br. No.12 (1x12.2m 1 x 30.5m 1x12.2m Composite Girder), Br. No.19 (1x12.2m 1x30.5m 1x12.2m Composite Girder),Br. No. 21A (1x36.0m Composite Girder, ROB), Br.NO.25 (2x9.15m RCC Box) & Br. NO. 26 (3x6.1m RCC Box) between Koraput -Damanjodi stations in connection with Doubling of Koraput - Singapur Road section of WAT Division, East Coast Railwayâ is awarded in favour one of our Joint Venture (JV) named âARSS-SCPL (JV)â by by East Coast Railway on 04th July, 2017 with a contract value of Rs. 71.57 Crores.

i. Supply of Ballast in connection with 3^rd & 4^th line work between Salegaon to Rajathgarh in KUR Division awarded in favour one of our Joint Venture (JV) named âARSS-SCPL (JV)â by by East Coast Railway, Bhubaneswar on 04th May, 2017 with a contract value of Rs. 1782 Crores.

j. Bhadrak - Nergundi 3^rd Line: Supply of machine crushed hard stone ballast in connection with doubling between Kapilas Road and Salegaon stations under KUR Division of E. Co. Railway awarded in favour of our Company ARSS Infrastructure Projects Limited by East Coast Railway, Jajpur on 11^th April, 2017 with a contract value of Rs. 4.19 Crores.

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

9. Listing with stock exchanges:

The Company confirms that it has paid the Annual Listing Fees for the year 2018-19 to The Bombay Stock Exchange Limited and National Stock Exchange of India Limited where the Companyâs Shares are listed.

10. 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 of this report as âAnnexure-Aâ.

11. Corporate Governance and Shareholders Information:

The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements as stipulated by Securities and Exchange Board 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. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance along-with a declaration signed by Managing Director stating that the members of the Board of Directors and Senior Management personnel have affirmed compliance with the respective codes of conduct of the Board of Directors and Senior Management is attached to the report on Corporate Governance. A report on Corporate Governance is included as a part of this Annual Report as âAnnexure-B.

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

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as âAnnexure - Câ.

Annual return of the Company is placed of the Company the web link for the same ishttp://arssgroup.in/pdf/Annual%20 Return%202018.pdf

13. Board Meetings:

The Board of Directors of your Company had already constituted various Committees in compliance with the provisions of the Companies Act, 2013 and SEBI Listing Regulations viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and CSR Committee.

During financial year 2014-15, in accordance with the provisions of the erstwhile Clause 49 of the Listing Agreement, the Board had voluntarily constituted the Risk Management Committee.

All decisions pertaining to the constitution of Committees, appointment of members and fixing 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 of meetings held during the financial year and attendance at these meetings, are provided in the Corporate Governance Section of the Annual Report.

14. Number of Board Meetings:

Five Board Meetings were held during the year and the gap between two meetings did not exceed four months. The dates on which the Board Meetings were held are as follows:

27^th May, 2017, 9^th August, 2017, 14^th September, 2017, 11^th December, 2017 and 12^th February, 2018.

15. Committees of the Board of Directors

a. Audit Committee

The company has in place an Audit Committee in terms of the requirements of the Companies Act, 2013 read with the rules made there under and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details relating to the same are given in âAnnexure Bâ of the Board Report on the Corporate Governance forming part of this report. Members are requested to refer to point No. 4 of Corporate Governance Report attached with this annual report.

b. Nomination and Remuneration Committee

The company has in place Nomination and Remuneration Committee in terms of the requirements of the Companies Act, 2013 read with the rules made there under and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details relating to the same are given in âAnnexure Bâ of the Board Report on the Corporate Governance forming part of this report. Members are requested to refer to point No. 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 of the requirements of section 135 and Schedule VII of the Companies Act, 2013. The details relating to the same are given in âAnnexure Bâ of the Board Report on the Corporate Governance forming part of this report. Members are requested to refer to point No. 6 of Corporate Governance Report attached with this annual report.

d. Shareholders Relationship Committee

The company has in place Shareholders Relationship Committee in terms of the requirements of the Companies Act, 2013 read with the rules made there under and Regulation 20 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details relating to the same are given in âAnnexure Bâ of the Board Report on the Corporate Governance forming part of this report. Members are requested to refer to point No. 7 of Corporate Governance Report attached with this annual report.

16. Dematerialization of shares:

Physical/ NSDL/ CDSL/Summary Report as on 31^st March, 2018, representing 65.22% of total Equity Share Capital of the Company were held in dematerialized form. The Companyâs Registrars is Bigshare Services Private Limited, 1^st Floor, Bharat Tin Works Building, Opp. Vasant Oasis, Makwana Road, Marol, Andheri East, Mumbai - 400 059, Maharashtra.

Mode of Holding	As on 31^st March, 2018
Mode of Holding	No. of Shares	% to Equity
NSDL	88,29,979	38.83%
CDSL	60,00,024	26.39%
PHYSICAL *	79,07963	34.78%
TOTAL	22,737,966	100.00%

* 78,94,736 Equity Shares (out of 79,07963 Equity Shares shown in Physical mode of holding as on 31.03.2018) were issued to promoters and their associates on 9^th August, 2017 on preferential basis under CDR scheme. Due to pending requisite approvals from the Stock exchanges for dematerialization, shares are shown as in physical mode as on 31.03.2018. Further, the company had obtained final listing and trading permission from the stock exchanges (BSE & NSE) on 22^nd June, 2018 for 78,94,736 for final Listing & Trading of these Equity Shares and these shares were taken into dematerialization by NDSL & CDSL.

17. Public deposits, covered under Chapter V of the Act

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

18. Auditors:

Statutory Auditors:

As per the provisions of Section 139, 142 and all other applicable provisions of the Companies Act, 2013 (the âActâ) read with Rule 3(7) of the Companies (Audit and Auditors) Rules, 2014 M/s Ajay B Garg, Chartered Accountants, Mumbai, (Membership No. 32538) Statutory Auditors of the Company was appointed for a term of 4 years i.e. till the conclusion of 19th Annual General Meeting (AGM), which was subject to ratification at every AGM, hold office until the conclusion of ensuing Annual General Meeting.

Cost Auditors:

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

M/s. Asutosh & Associates, Cost Accountants, Bhubaneswar were appointed as Cost Auditors for auditing the cost accounts of your Company for the year ended 31^st March, 2018 by the Board of Directors pursuant to the Section 148 of the Companies Act, 2013 and Companies (Audit and Auditors) Rules, 2014.

Secretarial Auditors:

M/S Deba Mohapatra & Co., a firm of practicing Company Secretaries, Bhubaneswar (FRN: P2002OR002800) were appointed as Secretarial Auditors of the Company for the financial year 2017-18 by the Board of Directors pursuant to the Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit Report submitted by M/S Deba Mohapatra & Co., is enclosed as a part of this report âAnnexure-Dâ. Qualifications or remarks made by the Secretarial Auditor in his Report are self explanatory.

Internal Auditors:

M/s. PR & Associates, Cost Accountants, Bhubaneswar were appointed as Internal Auditors of the Company for the financial year 2017-18 by the Board of Directors pursuant to the Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

19. Report of Auditors:

Statutory Auditors

Our reply to the qualifications of Auditors: -Basis for Qualified Opinion

a. In the absence of audited books of accounts of Balaji-ARSS JV, ARSS-MVPL JV, ARSS-SIPS JV, ARSS-BMS JV, discrepancies, if any, between the said accounts with that of the Company is not ascertainable.

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 under the control of respective JV Partners i.e. Balaji Engicons Pvt. Ltd, Mateshweri Vanijya Pvt. Ltd , Shyam Indus Power Solutions Pvt. Ltd. and BMS Projects. The accounts of these JVs are yet to be finalized from their end. Hence financial implication for the JV is not quantifiable. However the accounting effect of the discrepancies, if any after the finalization of its accounts will be given at current date.

b. In absence of relevant records, Contract-wise surplus/loss has neither been ascertained nor recognized in compliance with Ind AS-115 âRevenue from contract with customersâ

Company Reply: During the work execution period there is escalation claim, revision of contact value, extension of completion period, etc due to which unpredictable variation in reliable estimation of revenue and cost. Also the allocation of combine Operating overhead, Head office overhead and Financial Cost is not possible due to combine use or high swapping of resources, size of the Contracts. Hence financial implication of the qualification is not quantifiable.

c) The company has overdue accumulated secured debts amounting to Rs. 1491.49 Crores subject to reconciliation interest thereon from 01.04.2016. Banks has classified it as NPA. No interest has been charged on these secured debts to the Profit & Loss account resulting in understatement of loss to that extent and understatement of liability. Secured lenders have served notices on various dates under section 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 for recovery of their dues.

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

d) Interest on Service Tax payable of Rs. 88.03 Lakhs has not provided, resulting to underreporting of loss to that extent.

Company Reply: Management is unable to determine input credit of service tax and there would be variation in service tax liability, hence unable to quantify interest liability on same.

e) Interest on Mobilization Advance Received of Rs. 365.89 Lakhs has not been provided, resulting to underreporting of loss to that extent.

Company Reply: Interest on Mobilization Advance Received of Rs. 365.89 Lakhs has not been provided as the department has the practice to deduct interest & principal of mobilization advance from our running account bill.

Secretarial Auditors:

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

20. Directors /Key Managerial Personnel Appointed / Resigned During the Year:

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

Sl. No.	Name	Designation	Date of Appointment	Date of Resignation
1	Mr. Pareswar Panda	Independent Director	9^th August, 2017	-
2	Mrs. Rima Dhawan	Woman Independent Director	17^th December, 2016	27^th September, 2017 (vacation of office of director)
3	Mrs. Janhabi Deo	Woman Independent Director	11^th November, 2017 (to be regularized by the shareholders in ensuing AGM scheduled to be held on 27^th September, 2018)

21. Key Managerial Personnel

Following persons are the Key Managerial Personnel of the Company pursuant to Section 2(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. Ms. Alka Khemka, Company Secretary

22. Re-appointment of Mrs. Janhabi Deo as Woman/ Independent Director

Mrs. Janhabi Deo (DIN: 07257699), who was appointed as Non-Executive Woman Independent Director by the board of directors through resolution by circulation from 11^th November, 2017 to 10^th November, 2018 for the period of one year and whose term of office is expiring on to 10^th November, 2018, who has consented for re-appointment as Independent Director of the company & has also submitted a declaration that she meets the criteria for independence as provided in section 149(6) of the Act and who is eligible for re-appointment, the board has proposed her candidature for the office of Director pursuant to the provisions of section 149, 150, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014, is proposed to be re-appointed as Woman Independent Director of the Company with effect from 11^th November, 2018 to 10^th November, 2023 (for five years) not liable to retire by rotation.

23. Continuation of Mr. Swarup Chandra Parija as Independent Director

Pursuant to the SEBI notification dated 9^th May, 2018 amended Regulation 17 of SEBI (LODR), 2015 effective from 1^st April, 2019, board has proposed to shareholders for approval for continuation of directorship of Mr. Swarup Chandra Parija (DIN: 00363608) who was appointed by the Members of the Company on 29^thSeptember, 2015 for a period of five years with effect from 1^st April, 2016 to 31^st March, 2021) till the completion of his present term i.e. up to 31^st March, 2021 as an Independent Director (who is age of 77 (seventy seven) years and above.

24. Secretarial Standards

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

25. Directorâs Responsibility Statement:

Pursuant to the section 134 sub-section (3) clause (c) Directors confirm and state thatâ

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

(b) the directors had selected such accounting policies and applied them consistently and 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 at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(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 financial controls are adequate and are operating effectively.

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

26. Code of Conduct

The Code of Conduct (hereinafter referred to as âCodeâ) is applicable to all its Board Members and Senior Management Personnel of the Company. A Code of Conduct for the Directors and Senior Management Personnel has already been approved by the Board of Directors of the Company. All Board Members and Senior Management Personnel had affirmed compliance with the Code during the year and no violation of the same was reported. A declaration to the effect that all Board Members and Senior Management Personnel have complied with the Code during the financial year 2017-18, duly signed by Managing Director of the Company is herein below enclosed with Corporate Governance Report. The Code has also been posted on the Companyâs Web-site.

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

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

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

a. Mr. Subash Agarwal- Chairman- 1: 22.91

b. Mr. Rajesh Agarwal- Managing Director- 1: 20.83

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

(iii) The percentage increase in the median remuneration of employees in the financial year- 20%

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

Total 609 employees as on 31^st March, 2018.

(v) The explanation on the relationship between average increase in remuneration and company performance.- The loss in the financial year 2017-18 is much lower than of the losses of previous financial year. The increase in the remuneration of the median remuneration of employees is based on inflation consideration.

(vi) Comparison of the remuneration of the Key Managerial Personnel against the performance of the company.- Though the loss in the financial year 2017-18 is much lower than of the losses of previous financial year. There were no changes in the remuneration of Key Managerial Personnel in the last financial year.

(vii) Variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over/ decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the company as at the close of the current financial year and previous financial year;

- Variations in the market capitalization of the company: The market capitalization of the company as on 31.03.2018 was Rs. 64.33 crores and as on 31.03.2017 market capitalization was Rs. 103.06 crores.

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

The Company had come out with initial public offer (IPO) in 2010 with issue price per share of Rs. 450/-. Share price as on March 31, 2018 with NSE is Rs. 43.34 per share indicating decrease in the market quotation of shares.

(viii) Average percentage increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration- There were increase in the salaries of some employees in the last financial year but there were no changes in the remuneration of the managerial personnel in the last financial year.

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

(x) The key parameters for any variable component of remuneration availed by the directors; - No Director has received any variable component of remuneration in the last financial year though Chairman and Managing Director are entitled for commission upto 6% of the net profit of the company for the financial year in which adequate profit is earned, computed in the manner laid down in section 198 of the Companies Act, 2013.

(xi) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: 0.79: 1

(xii) The remuneration paid to employees is as per the remuneration policy of the Company.

As required under the provision of Section 197 (12) read with Rule 5 (2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, as amended, there was no employees who have drawn salary or appointed under this category during the financial year 2017-18.

28. Companyâs Policy On Directorsâ Appointment And Remuneration Including Criteria For Determining Qualifications, Positive Attributes, Independence Of A Director And Other Matters Provided Under Sub-Section (3) Of Section 178;

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

29. 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 the Provisions of section 149(6) Companies Act, 2013. The company has also obtained declarations from all the Independent Directors pursuant to section 149 (7) of the Companies Act, 2013.

30. Industrial Relation:

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

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

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

- Safeguarding Assets and their usage.

- Maintenance of Proper Accounting Records and

- Adequacy and Reliability of the information used for carrying on Business Operations.

Key elements of the Internal Control Systems has been provided & explained in MDA report attached with Directorâs report.

32. Annual Evaluation by the Board of Its Own Performance (Including Committees and Individual Directors)

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board who were evaluated on parameters such as level of engagement and contribution and independence of judgment thereby safeguarding the interest of the Company. The performance evaluation of the Independent Directors was carried out by the entire Board. The board also carried out annual performance evaluation of the working of its Audit, Nomination and Remuneration as well as stakeholder relationship committee. The Directors expressed their satisfaction with the evaluation process.

33. Independent Directors Meeting

During the year under review, the Independent Directors of the Company met on 12^th February, 2018, inter-alia,to discuss:

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

ii) Evaluation of performance of the Chairman of the Company, taking into account the views of Executive and Non-Executive Directors.

iii) Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

34. Familiarisation Programme of Independent Directors

In compliance with the requirements of SEBI Listing Regulations, the Company has put in place a familiarization program for Independent Directors to familiarize them with their role, rights and responsibility as Directors, the operations of the Company, business overview etc. The details of the familiarization program are explained in the Corporate Governance 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 or tribunals impacting the going concern status and companyâs operations in future.

36. Particulars of Loans, Guarantees or Investments under Section 186

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements, if any.

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

All related party transactions attracting compliance under Section 188 and / or SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are placed before the Audit Committee as also before the Board for approval. Prior omnibus approval of the Audit Committee was also sought for transactions which are of a foreseen and repetitive nature.

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

The particulars of contracts entered into with related parties during the year as per Form AOC-2 is enclosed as âAnnexure-Eâ.

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

a. Final Listing & Trading permission of Equity Shares- The company had obtained final listing and trading permission from the stock exchanges (BSE & NSE) on 22^nd June, 2018 for 78,94,736 Equity shares issued and allotted to promoters and their associates on preferential basis pursuant to the CDR Scheme.

b. Application to NCLT, Kolkata Bench under IBC, 2016 - One of the âOperational Creditorsâ M/s Sri Shyam Steels, Rourkela, has filed an application under section 9 of The Insolvency And Bankruptcy Code, 2016, before Honâble National Company Law Tribunal (NCLT), Kolkata Bench at Kolkata for initiating âCorporate Insolvency Resolution Process. The company was served a copy of the application (before filing with NCLT) on 17^th May, 2018.

c. FIR by Central Bureau of Investigation âCBIâ- Central Bank of India has filed a FIR against our subsidiary company âARSS Damoh Hirapur Tolls Private Limitedâ its directors and guarantors including ARSS Infrastructure Projects Limited (being corporate guarantor) on 9^th April, 2018 in connection with the loan provided to our subsidiary company âARSS Damoh Hirapur Tolls Private Limitedâ.

39. Forensic Audit By SEBI

Pursuant to the SEBI order dated September 25, 2017 ref. no. SEBI/WTM/MPB/ISD/39/2017 directing Exchanges to conduct forensic audit of our company, KPMG was appointed by National Stock Exchange of India Ltd. to conduct forensic audit of our company w.e.f. 22^nd December, 2017 Further report of the same is still awaited.

40. Compounding status

Four more Sections (Nine Sections already compounded in the financial year 2016-17) out of thirty eight sections for which show cause notices were issued by the office of Regional Director, Eastern Region and Registrar of Companies of Odisha at Cuttack Pursuant to the inspection held under section 209(A) of The Companies Act, 1956 were compounded during the financial year 31st March, 2018. Hence till date total 13 sections have been compounded out of thirty eight sections for which show cause notices were issued. Please refer point No. VII of MGT-9 attached with this report for further details.

41. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

During the year under review, the Company has taken adequate measures for conservation of energy and also has not gone for any technology absorption whatsoever in accordance with the provisions of sub - Section (3) (m) section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014. The Company has neither earned any income nor incurred any expenditure in foreign currency during the financial year ended 31^st March, 2018.

42. Development and Implementation of Risk Management Policy:

The Company has established risk management framework. The Company has been addressing various risks impacting the Company. In accordance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company at its Meeting held on February, 2015 has constituted a Risk Management Committee and has approved the Risk Management Policy of the company. This Committee has been delegated the authority by the Board to review and monitor the implementation of the risk management policy of the Company.

43 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 which shall indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013.

b. Recommend the amount of expenditure to be incurred on the activities referred in the CSR 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 and 1 Executive Director.

Name of the Member	Position	No. of Meetings held during the FY 2017- 18	No. of meetings Attended during the FY 2017- 18
Mr. Rajesh Agarwal	Chairman	1	1
Mr. Swarup Chandra Parija	Member	1	1
Mr. Pareswar Panda	Member	1	Nil

*Mrs. Rima Dhawan resigned from the CSR Committee and the committee was re-constituted by the board in their meeting held on 9^th August, 2017 and Board approved the appointment of Mr. Pareswar Panda as Member/Chairman of the CSR Committee.

iii) No. of Meetings held during the year:

During the year the Committee had met once i.e. on 9^th August, 2017

iv) Amount incurred on CSR activities during the year:

Section 135 of the Companies Act, 2013 & Companies (Corporate Social Responsibility Policy) Rules, 2014, (CSR Rules) makes it mandatory for certain companies who fulfill the criteria as mentioned under Sub Section 1 of Section 135 to comply with the provisions of Corporate Social Responsibility and accordingly company had constituted a CSR committee and 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 this time i.e. (Rs. 320.59) crores loss, company need not to incur any amount towards CSR in the FY 2017-18.

A responsibility statement of the CSR Committee

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

44. Whistle Blower Policy of the Company:

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

45. 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 sexual harassment at the workplace. This policy has striven to prescribe a code of conduct for the employees and all employees have access to the Policy document and are required to strictly abide by it. The policy covers all employees, irrespective of their nature of employment and also applicable in respect of all allegations of sexual harassment made by an outsider against an employee. During the year 2017-18, no case of Sexual Harassment was reported. The Company has complied with provision relating to the constitution of internal complain committee under the Sexual Harassment of women at work place (Prevention, Prohibition and Redressal) Act, 2013.

46. Reporting of Frauds:

There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of the Act and Rules framed there under either to the Company or to the Central Government.

47. Acknowledgement:

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

For and on behalf of the Board of Directors

Sd/-

Place: Bhubaneswar (Subash Agarwal)

Dated: 10^th August, 2018 Chairman

Mar 31, 2016

The Directors have pleasure in presenting before you the 16^th Annual Report of the Company together with Audited Statements of Accounts for the Financial Year ended 31^st March, 2016:

1. Financial Results:

The performance during the period ended 31^st March, 2016 has been as under:

1. Financial Results:

The performance during the period ended 31^st March, 2016 has been as under:

(Rs. In Crores)

Particulars	2015-16	2014-15
Sales	623.30	655.53
Profit before Depreciation, Interest and Tax	207.21	208.99
Less : Depreciation	36.14	36.55
Interest	164.84	166.96
Profit Before Tax	6.23	5.48
Less : Tax Expenses
a) Current Year	1.27	1.10
b) Earlier Year	1.30	0.07
c) Deferred Tax	(1.36)	(1.90)
Profit/Loss After Tax	5.02	6.22
Balance brought forward from previous year	192.62	186.40
Amount Available for Appropriation	197.64	192.62
Appropriations
a) Dividend	-	-
b) Tax on Dividend	-	-
c) Transfer to General Reserve	-	-
Balance Carried to Balance Sheet	197.64	192.62
Earnings per Share (In Rs.) (equity shares of face value of Rs.10)	3.38	4.19

2. Dividend

Your Directors have not recommended any dividend for the financial year ended March 31, 2016.

3. Operating Result :

The turnover of the Company in the year is Rs. 623.30 crore as compared to Rs. 655.53 crores in the previous year. The profit before tax is Rs. 6.23 crores as compared to Rs. 5.48 crores for the previous year.

4. Details of Subsidiary, Joint Venture or Associates

During the year under review no companies except âARSS Bus Terminal Pvt. Limitedâ, non material subsidiary (ceased to be companyâs subsidiary w.e.f. 6th September, 2015) have become or ceased to be companyâs subsidiary, joint ventures or associate companies. A report on the companyâs subsidiary, joint ventures or associate companies 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 Bus Terminal Private Limited	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	U63031OR2010PTC012372	Transferred its 51% stake to Welspun Enterprises Limited on 6^th September, 2015 and ceased to be a subsidiary of our Company		2 (87)
3	ARSS Developers Limited.	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	U45209OR2007PLC009201	Associate Company	38.41%	2 (6)
4	NIRAJ-ARSS JV.	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AAAAN5116B	Joint Venture	40.00%	2 (6)
5	ARSS-ATLANTA JV.	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AAQFA8726P	Joint Venture	51.00%	2 (6)
6	ATLANTA-ARSS JV	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AABAA0048E	Joint Venture	49.00%	2 (6)
7	ARSS-HCIL CONSORTIUM	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AAOFA4560D	Joint Venture	60.00%	2 (6)
8	ARSS-TRIVENI JV	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AABAA1081H	Joint Venture	51.00%	2 (6)
9	PATEL-ARSS JV	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AAAAP8266E	Joint Venture	49.00%	2 (6)
10	BACKBONE-ARSS JV.	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AAAAB7056Q	Joint Venture	49.00%	2 (6)

Sl. No	Name of the company	Address of the company	CIN/GLN/ PAN	Holding / subsidiary / associate	% of shares held/ share in JV	Applicable section
11	SOMDATT BUILDERS-ARSSJV	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AADAS6434L	Joint Venture	49.00%	2 (6)
12	ARSS-ANPR JV	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AABAA1158M	Joint Venture	51.00%	2 (6)
13	HCIL- ADHIKARYA-ARSSJV	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AAEFH3757R	Joint Venture	30.00%	2 (6)
14	ARSS GVR JV	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AACAA1049A	Joint Venture	51.00%	2 (6)
15	HCIL-ARSSSPL-TRIVENI JV	113-A, Kamala Nagar, Delhi-110007	AADFH8758B	Joint Venture	30.00%	2 (6)
16	HCIL- KALINDEE-ARSSJV	113-A, Kamala Nagar, Delhi-110007	AAEFH1678M	Joint Venture	30.00%	2 (6)
17	HARISH CHANDRA-ARSSSPLJV	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AAAAH1493H	Joint Venture	49.00%	2 (6)
18	ARSS-MVPLJV	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AABAA1497P	Joint Venture	51.00%	2 (6)
19	ARSS-BALAJI JV	At / PO : Belpahar R.S., Belpahar	AABAB1071G	Joint Venture	30.00%	2 (6)
20	ARSS - SIPS (JV)	129, Transport Centre, Rohtak Road, Punjabi Bagh, New Delhi -110 035	AAEAA3620K	Joint Venture	51.00%	2 (6)
21	ARSS-SCPL (JV)	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AAEAA3621J	Joint Venture	51.00%	2 (6)
22	ARSS-BMS (JV)	Plot No-38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar- 751010	AAEAA4835G	Joint Venture	51.00%	2 (6)

5. Consolidated Financial Statements:

Consolidated financial statements in terms of Section 129 (3) of the Companies Act, 2013 read with rule 6 of Companies (Accounts) Rules, 2014 and accounting Standard AS 21, issued by the Institute of Chartered Accountants of India and as required by the Listing Agreements with Stock Exchange(s) could not be prepared due to dispute between the company and one of its subsidiary ARSS Bus Terminal Private Limited (previous year). Since this subsidiary company (ABTPL) has ceased to be a subsidiary of the Company w.e.f 6th September, 2015 Company may prepare the consolidated financial statements from the current financial year 2016-17 onwards.

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 has secured the following major contracts:

a. Third Line Work between Rourkela and Jharsuguda Stations (Section II) - Execution of Earthwork in Formation, Construction of Minor Bridges, P. Way Linking Works with Supply of Track Ballast and other related works between Dharuadhi Station yard to Jharsuguda Station Yard from Km: 486.50 to Km: 515.00, with a contract value of Rs.69.33 Crores.

b. Plant Road Network, Phase IIâ of 3.0 MTPA Integrated Steel Plant of NMDC Limited at Nagarnar, Chattishgarh, Indiaâ has been awarded to our Company, with a contract value of Rs.40.42 Crores.

c. Jarapada-Budhapank with flyover at Talcher Road- 3rd & 4th line: Execution of Earth Work, Minor Bridges & Other Allied works (KM 525.133 to KM 483.047 i.e. 35.5 Km- 3rd Line & 42.00 Km- 4th line approx. excluding flyover portion at Talcher Road, with a contract value of Rs.109.27 Crores.

d. Construction of Road Bed, Station Buildings, Passenger Amenities, Minor Bridges, General Electrical works in connection with new BG Rail line from Nuagaon Km 68.300 to Paradeep Km 81.200 on Khurda Road Division of East Coast Railway in the State of Odisha, India (Package 2C), with a contract value of Rs.142.79 Crores.

e. Budhapank-Salegaon Via- Rajathagarh - 3rd &4th line: Execution of earthwork, minor bridges & other allied works (Km: 483.047 to Km. 398.166 i.e 2*85 =170 km approx, with a contract value of Rs.156.85 Crores.

f. Construction of Six lane ROB in lieu of L.C. 70 Sitapura on JP-SWM Railway Line, with a contract value of Rs.8743 Crores.

g. Execution works of package-1 of private railway siding with all Contractorâs materials (except Rails for plain track free of cost) for coal transportation system for Darlipali STPP of NTPC Limited in Sundergarh Dist Odisha State (from Ch. 6.000 to Ch. 12.460- Pkg.1) in Darlipali - Dulanga MGR section, with a contract value of Rs.53.91 Crores.

h. Jagdalpur -Koraput Doubling Project- Execution of Earthwork in formation, Minor bridges, Protection works and other allied works from Km.263.300 to Km.223.500 of Kotpar Road (Excluding) - Charamula kusumi (Including) - Khadapa (Including) - Dhanapur (Including) -Jeypore(Including) - Chatariput (Including) section in connection with KK line doubling of WAT Division, East Coast Railway, with a contract value of Rs.44.04 Crores.

i. Widening to 2-lane from Km 212.700 to Km 253.700 Km and Km 281.700 to Km 311.700 of NH 326 (Erstwhile from km 0/000 to Km 30/000 and from Km 58/0 to Km 99/0 of SH-4) under Vijayawada Ranchi Corridor in the State of Odisha on EPC basis, with a contract value of Rs.148.00 Crores.

j. Widening & Strengthening of Jamujhadi - Basudevpur - Dhamara - Road (S.H.) to 2 - Lane without paved shoulder from 18/800 Km to 22/750 Km & from 27/100 Km to 60/470 Km, with a contract value of Rs. 64.73 Crores.

k. Khurda Road - Bolangir New B.G. Link Project - Execution of Earthwork in formation, Minor bridges and other allied works from Km 80.00 to Km. 93 from Khurda End in between Nayagarh - Nuagaon & Dasapalla of east coast Railway, with a contract value of Rs. 38.45 Crores.

l. Construction of Underpass at rajmahal Square, Bhubaneswar , with a contract value of Rs. 37.10 Crores.

8. Listing with stock exchanges:

The Company confirms that it has paid the Annual Listing Fees for the year 2016-17 to The Bombay Stock Exchange Limited and National Stock Exchange of India Limited where the Companyâs Shares are listed.

9. Management Discussion and Analysis Report:

10. Corporate Governance and Shareholders Information:

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

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as âAnnexure -Câ.

12. Number of Board Meetings:

Five Board Meetings were held during the year and the gap between two meetings did not exceed four months. The dates on which the Board Meetings were held are as follows:

12^th May,2015, 07^th August, 2015, 06^th September,2015, 07^th November,2015 and 12^th February,2016 .

13. Audit Committee

The committee has in place an Audit Committee in terms of the requirements of the Companies Act, 2013 read with the rules made there under and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure Bâ of the Board Report on the Corporate Governance forming part of this report. Members are requested to refer to point n. 4 of Corporate Governance Report attached with this annual report.

14. Dematerialization of shares:

As on 31^st March, 2016, 99.91% of the companyâs paid up Equity Share Capital is in dematerialized form and balance 0.09% is in physical form. The Companyâs Registrars are Bigshare Services Private Limited having registered office at E/2, Ansa Industrial Estate, Sakivihar Road, Sakinaka Andheri (E), Mumbai- 400 072.

15. Public deposits, covered under Chapter V of the Act

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

16. Auditors:

Statutory Auditors:

As per the provisions of Section 139, 142 and all other applicable provisions of the Companies Act, 2013 (the âActâ) read with Rule 3(7) of the Companies (Audit and Auditors) Rules, 2014 M/s Ajay B Garg, Chartered Accountants, Mumbai, (Membership No. 32538) Statutory Auditors of the Company was appointed for a term of 4 years i.e. till the conclusion of 19^th Annual General Meeting (AGM), which was subject to ratification at every AGM, hold office until the conclusion of ensuing Annual General Meeting.

Cost Auditors:

M/s. Asutosh & Associates, Cost Accountants, Bhubaneswar were appointed as Cost Auditors for auditing the cost accounts of your Company for the year ended 31^st March, 2016 by the Board of Directors pursuant to the Section 148 of the Companies Act, 2013 and Companies (Audit and Auditors) Rules, 2014.

Secretarial Auditors:

M/s. ADP & Associates, Company Secretaries, Bhubaneswar were appointed as Secretarial Auditors of the Company for the financial year 2015-16 by the Board of Directors pursuant to the Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit Report submitted by Company Secretary in Practice (M/s. ADP & Associates, Company Secretaries, Bhubaneswar) is enclosed as a part of this report âAnnexure-Dâ. Qualifications or remarks made by the Secretarial Auditor in his Report are self explanatory.

Internal Auditors:

M/s. PR & Associates, Cost Accountants, Bhubaneswar were appointed as Internal Auditors of the Company for the financial year 2016-17 by the Board of Directors pursuant to the Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

17. Report of Auditors:

Statutory Auditors

Our reply to the qualifications of Auditors -

a. In absence of relevant records, Contract-wise surplus/loss has neither been ascertained nor recognized in compliance with the requirements of para 34 and 35 of AS-7 âConstruction Contractsâ issued by the Institute of Chartered Accountants of India.

Company Reply: The Companyâs secured debts are under Corporate Debt restructuring and the liability and interest payable does not commensurate with the turnover and cannot be justified as there is limited support from Financial Institution. During the execution period there is also escalation claim, revision of contract value, extension of completion period, etc. due to which unpredictable variation in reliable estimation of revenue and cost. Also the allocation of combine Operating overhead, Head office overhead and financial cost is not possible due to combine use or high swapping of resources, size of the Contracts. In absence of the overheads and financial cost allocation the Company is unable to determine Contract wise surplus / deficit.

b. In the absence of accounts of Balaji-ARSS (JV) and ARSS-MVPL JV, discrepancies, if any, between the said accounts with that of the Company is not ascertainable.

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 under the control of respective JV partners i.e. Balaji Engicons Pvt. Ltd. and Mateshweri Vanijya Pvt. Ltd. and the same has not been yet finalized from their end. Hence financial implication for the JV is not quantifiable. However the accounting effects of the discrepancies, if any after the finalization of its accounts will be given at current date.

Secretarial Auditors:

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

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

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

Sl. No.	Name	Designation	Date of Appointment	Date of Resignation
1	Mr. Rajesh Agarwal	Managing Director (Position regularized originally appointed on 17^th May, 2000)	29^th, September, 2015	-
2	Mr. B. K. Makhija	Independent Director (Position regularized originally appointed on 31^st March, 2015)	29^th, September, 2015	-
3	Mr. K. K. Sharma	Independent Director (Position regularized originally appointed on 4^th May, 2015)	29^th, September, 2015	-
4	Mr. B. K. Mishra	Nominee Director (Bank of India)	18^th July, 2014	7^th July, 2015

19. Directorâs Responsibility Statement:

Pursuant to the section 134 sub-section (3) clause (c) Directors confirm and state thatâ

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

(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 financial controls are adequate and are operating effectively.

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

20. Code of Conduct

The Code of Conduct (hereinafter referred to as âCodeâ) is applicable to all its Board Members and Senior Management Personnel of the Company. A Code of Conduct for the Directors and Senior Management Personnel has already been approved by the Board of Directors of the Company. All Board Members and Senior Management Personnel had affirmed compliance with the Code during the year and no violation of the same was reported. A declaration to the effect that all Board Members and Senior Management Personnel have complied with the Code during the financial year 2015-16, duly signed by Managing Director of the Company is herein below enclosed with Corporate Governance Report. The Code has also been posted on the Companyâs Web-site.

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

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

a. Mr. Subash Agarwal- Chairman- 1: 27.5

b. Mr. Rajesh Agarwal- Managing Director- 1: 25

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

(Increase in the remuneration of Company Secretary w.e.f 1^st October, 2015 after probation only.)

(iii) The percentage increase in the median remuneration of employees in the financial year- 0%

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

Total 768 employees as on 31^st March, 2016.

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

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

- Variations in the market capitalization of the company: The market capitalization of the company as on 31.03.2016 was Rs. 49.28 crores and as on 31.03.2015 was Rs. 53.36 crores.

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

The Company had come out with initial public offer (IPO) in 2010 with issue price per share of Rs. 450/-. Share price as on March 31, 2016 with NSE is Rs. 33.20/- per share indicating decrease in the market quotation of shares.

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

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

(xi) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: 0.79: 1

(xii) Affirmation that the remuneration is as per the remuneration policy of the company.

The remuneration paid to employees is as per the remuneration policy of the Company.

22. Companyâs Policy On Directorsâ Appointment And Remuneration Including Criteria For Determining Qualifications, Positive Attributes, Independence Of A Director And Other Matters Provided Under Sub-Section (3) Of Section 178;

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

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

24. Industrial Relation:

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

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

- Safeguarding Assets and their usage.

- Maintenance of Proper Accounting Records and

- Adequacy and Reliability of the information used for carrying on Business Operations.

Key elements of the Internal Control Systems has been provided & explained in MDA report attached with Directorâs report.

26. Annual Evaluation by the Board of Its Own Performance (Including Committees And Individual Directors)

27. Independent Directors Meeting

During the year under review, the Independent Directors of the Company met on 2^nd May, 2016, inter-alia, to discuss:

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

ii) Evaluation of performance of the Chairman of the Company, taking into account the views of Executive and Non-Executive Directors.

iii) Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

28. Familiarization Programme of Independent Directors

29. Details of significant and material orders:

There are no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and companyâs operations in future.

30. Particulars of Loans, Guarantees or Investments under Section 186

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

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

The particulars of contracts entered into with related parties during the year as per Form AOC-2 is enclosed as âAnnexure-Eâ.

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

Corporate Debt Restructuring Cell had communicated its decision regarding exit of ARSS Infrastructure Projects Limited from CDR mechanism vide letter dated 20th May, 2016.

33. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The Company has neither earned any income nor incurred any expenditure in foreign currency during the financial year ended 31^st March, 2016.

34. Development and Implementation of Risk Management Policy:

35. Corporate Social Responsibility

In terms of section 135 and Schedule VII of the Companies Act, 2013, the Board of Directors of your Company has constituted a CSR Committee. The Committee comprises of one Executive Director & two Independent Directors. CSR Committee of the Board has developed a CSR Policy. The CSR Policy has been uploaded on the website of the Company at www.arssgroup. in under CSR Policy link. Since the average profit for the last three years was in negative figures, no CSR activities was performed / undertaken by the company during the year. Though for the financial year 2016-17 company has to mandatorily perform the CSR activities as the average profit for the last year is positive unlike previous year.

36. Whistle Blower Policy of the Company

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

34. Acknowledgement:

Your Directors would like to place on record their appreciation for assistance and co-operation received from the financial institutions, banks, Government authorities, customers and members during the year under review. Your Directors also place on record their deep sense of appreciation for the committed services by the executives, employees at all levels.

For and on behalf of the Board of Directors

Sd/-

Place: Bhubaneswar (Subash Agarwal)

Dated: 12^th August, 2016 Chairman

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting before you the 14th Annual Report of the Company together with Audited Statements of Accounts for the Financial Year ended 31st March, 2015:

1. Financial Results:

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

(Rs. In Crores)

Particulars 2014-15 2013-14

Sales 655.53 901.42

Profit before Depreciation, Interest 208.99 199.49 and Tax

Less : Depreciation 36.55 34.95

Interest 166.96 163.10

Profit Before Tax 5.48 1.44

Less : Tax Expenses

a) Current Year 1.10 0.30

b) Earlier Year 0.07 -

c) Deferred Tax (1.90) (0.53)

Profit/Loss After Tax 6.22 1.67

Balance brought forward from previous year 186.40 184.73

Amount Available for Appropriation 192.62 186.40

Appropriations

a) Dividend - -

b) Tax on Dividend - -

c) Transfer to General Reserve - -

Balance Carried to Balance Sheet 192.62 186.40

Earnings per Share (In Rs.) 4.19 1.12 (equity shares of face value of Rs. 10)

2. Operating Result :

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

3. Details of Subsidiary, Joint Venture or Associates

During the year under review no companies have become or ceased to be company's subsidiary, joint ventures or associate companies. A report on the company's subsidiary, joint ventures or associate companies as per companies Act 2013 is provided hereunder:

4. Consolidated Financial Statements:

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

5. Dividend:

The Board of Directors has not recommended any dividend for the year ended on 31.03.2015.

6. Reserve

No amount was proposed to be transferred to general reserve.

7. Company's working during the year/state of company's affair - order book:

Your Company has an order book of more than Rs. 2000 Crore, which includes the following major works:

a) Package - I: Civil and Railway allied works in connection with the construction of Private Railway siding for the proposed 3.0 MTPA Integrated steel plant at Nagarnar, near Jagdalpur, Chhattisgarh state on item rate basis, with a contract value of Rs. 312.87 Crores.

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

c) Construction of new 2 lane Highway from Km 38.00 to Km 71.00 (Length=33 Km.) in Mizoram in Phase 'A' of SARDP-NE (Package-II), with a contract value of Rs. 258.22 Crores.

d) Supply and installation of track (excluding supply of rails) Signaling and overhead equipment (OHE) & associated equipment for 25 KV AC tractio, in connection with doubling of railway line between Baang - Rajatgarh (25 KM) Cuttack Barang (12KM) and 3rd line between Barabg Khurda Road (35KM) in the State of Orissa, India, with a contract value of Rs. 252.83 Crores.

e) Widening to 2-lane and improvement in km 0.00 to 102.9 of Paralakhumundi -R.Udayagiri-Mohana Road (S.H.-34) under LWE Scheme, with a contract value of Rs. 20778 Crores.

f) Execution of Balance work for Construction of Roadbed, Major & Minor bridges, Track Linking (excluding supply of rails, ordinary track sleepers and thick web switches), Outdoor Signaling and Electrical (General) works in connection with Doubling of LAKHANA (Ex) - ARAND (in) section (68.936 Kms) part of RAIPUR-TITLAGARH Doubling in SAMBALPUR Division of East Cost Railway in the states of ODISHA & CHATTISGARH, India with a contract value of Rs. 183.17 Crores.

g) Balance work of construction of Roadbed including Minor and Major Bridges, facilities and General Electrification for doubling of Railway line between Barang-Rajatgarh (excluding Ghantikal-Naraj Section), Cuttack- Barang and 3rd line between Barang- Bhubaneswar in the State of Orissa, India, India. With contract value of Rs. 174.31 Crore.

h) Construction of BRTS Corridor and development of road Contract for Package No. IIB: Sanganer Airport to 22Godam Via Rambagh crossing including Elevated Road at Durgapura (10.50 Km). (NCSL), India with a contract value of Rs. 169.00 Crores.

i) Earthwork in formation (excluding Blanket), minor bridges between Km 19.000 to Km. 47000 and 3 nos. of Steel girder bridges, 8 nos. of Road Over Bridges between Km 19.000 to Km 67000 in connection with Angul- Sukinda new railway BG line in the state of Odisha, India with a contract value of Rs. 143.30 Crores.

8. Listing with stock exchanges:

The Company confirms that it has paid the Annual Listing Fees for the year 2015-16 to Bombay Stock Exchange and National Stock Exchange where the Company's Shares are listed.

9. Management Discussion and Analysis Report:

As required under Clause 49 of the Listing Agreements with Stock Exchanges, the Management Discussion and Analysis Report is enclosed as a part of this report as 'Annexure -A'.

10. Corporate Governance and Shareholders Information:

Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. A report on Corporate Governance is included as a part of this Annual Report as 'Annexure -B'. Certificate from the Statutory Auditors of the company M/s. Ajay B Garg, Chartered Accountants confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is included as a part of this report.

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

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as 'Annexure -C'.

12. Number of Board Meetings:

Five Board Meetings were held during the year and the gap between two meetings did not exceed four months. The dates on which the Board Meetings were held are as follows:

30th April,2014, 9th August, 2014, 11th November, 2014, 12th February,2015 and 31st March, 2015.

13. Audit Committee

The committee has in place an Audit Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and clause 49 of the Listing Agreement. The details relating to the same are given in Annexure B' of the Board Report on the Corporate Governance forming part of this report. Members are requested to refer to point n. 4 of Corporate Governance Report attached with this annual report.

14. Dematerialization of shares:

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

15. Public deposits, covered under Chapter V of the Act

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

16. Auditors:

Statutory Auditors:

M/s. Ajay B Garg, Chartered Accountants, Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

The Company has received letter from them to the effect that their reappointment (for the FY 2015-16), if made, would be in accordance with the conditions as prescribed under Section 139 & 141 of the Companies Act, 2013 and Companies (Audit And Auditors) Rules, 2014.

Cost Auditors:

M/s. Ashutosh & Associates, Cost Accountants, Bhubaneswar were appointed as Cost Auditors for auditing the cost accounts of your Company for the year ended 31st March, 2015 by the Board of Directors pursuant to the Section 148 of the Companies Act, 2013 and Companies (Audit And Auditors) Rules, 2014.

Secretarial Auditors:

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

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

Internal Auditors:

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

17. Report of Auditors:

Statutory Auditors

Our reply to the qualifications of Auditors -

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

Company Reply: The company's secured debts are under Corporate Debt restructuring and the liability and interest payable does not commensurate with the turnover and cannot be justified as there is limited support from Financial Institution. During the execution period there is also escalation claim, revision of contract value, extension of completion period, etc. due to which unpredictable variation in reliable estimation of revenue and cost. Also the allocation of combine Operating overhead, Head office overhead and Financial cost is not possible due to combine use or high swapping of resources, size of the Contracts. In absence of the overheads and financial cost allocation the Company is unable to determine Contract wise surplus / deficit.

b. Interest for the year amounting to Rs. 31794 lakhs on inter corporate deposits received has not been charged to the Profit & Loss account resulting in overstatement of profit to that extent.

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

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

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

d. No provision has been made against performance bank guarantee invoked amounting to Rs.82.83 Crores against the Company and the same is disputed by Company.

Company Reply: Our Company is in construction business and executes various contracts of government and corporate clients in individual capacity and as JV partner also. Under some of the contracts because of various reasons including lack preparedness of the clients in fulfillment of its primary obligations the work progress gets seriously affected. Resultantly, the very economy of our work execution and operation got disrupted and in the process the contracts gets terminated at company's risk and cost. Applying the terms and contract in their favour our final bill, escalation bill, security got forfeited and BGs given in support of performance guarantee were encashed for adjusting the cost effect of above termination of contract. The Company has lodged various claims against the said action taken by the contractees and the matter is under arbitration. Hence, based on recovery track of past claims and management estimation no provision is required to be made in the books of accounts.

Secretarial Auditors:

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

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

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

S . Name Designation No.

1 Mr. S.C Parija Independent Director (position regularized originally appointed on 27th November, 2007)

2 Mr. U. N. Challu Independent Director (position regularized originally appointed on 7th February,2012)

3 Mr. B. K. Mishra Nominee Director (Bank of India)

4 Ms. Alka Khemka Company Secretary & Compliance Officer

5 Ms. Rima Dhawan Women Independent Director

6 Mr. S. K. Pattanaik Director (Finance)

7 Mr. S. K. Pattanaik Chief Financial Officer

8 Mr. B. K. Makhija Independent Director

S . Name Date of Appointment Date of Resignation No.

1 Mr. S.C Parija 1st April, 2014 -

2 Mr. U. N. Challu 1st April, 2014 24th February, 2015

3 Mr. B. K. Mishra 18th July, 2014 7th July, 2015

4 Ms. Alka Khemka 1st November, 2014 -

5 Ms. Rima Dhawan 17th December, 2014 -

6 Mr. S. K. Pattanaik 1st April, 2005 31st March, 2015

7 Mr. S. K. Pattanaik 31st March, 2015 -

8 Mr. B. K. Makhija 31st March, 2015 -

19. Director's Responsibility Statement:

Pursuant to the section 134 sub-section (3) clause (c) Directors confirm and state thatÂ

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

(b) the directors had selected such accounting policies and applied them consistently and 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 at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(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 financial controls are adequate and are operating effectively.

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

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

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

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

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

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

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

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

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

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

Total 806 employees as on 31st March, 2015.

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

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

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

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

* Price earnings ratio of the company: Price earnings ratio of the company as on 31.03.2015 was 8.58 and as on 31.03.2014 was 19.18.

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

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

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

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

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

xi) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year:

Mr. Subash Agarwal is the highest paid Director. No employee received remuneration higher than him.

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

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

21. Company's Policy On Directors' Appointment and Remuneration Including Criteria For Determining Qualifications, Positive Attributes, Independence Of A Director And Other Matters Provided Under Sub-Section (3) Of Section 178;

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

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

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

23. Industrial Relation:

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

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

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

* Safeguarding Assets and their usage.

* Maintenance of Proper Accounting Records and

* Adequacy and Reliability of the information used for carrying on Business Operations.

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

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

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board who were evaluated on parameters such as level of engagement and contribution and independence of judgment thereby safeguarding the interest of the Company. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The board also carried out annual performance evaluation of the working of its Audit, Nomination and Remuneration as well as stakeholder relationship committee. The Directors expressed their satisfaction with the evaluation process.

26. Details of significant and material orders:

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

27. Particulars of Loans, Guarantees or Investments Under Section 186

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

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

All related party transactions attracting compliance under Section 188 and / or Clause 49 of the Listing Agreement are placed before the Audit Committee as also before the Board for approval. Prior omnibus approval of the Audit Committee is also sought for transactions which are of a foreseen and repetitive nature.

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

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

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

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

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

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

31. Development and Implementation of Risk Management Policy:

The Company has established risk management framework. The Company has been addressing various risks impacting the Company. In accordance with the provisions of Clause 49 of the Listing Agreement, the Board of Directors of the Company at its Meeting held on February, 2015 has constituted a Risk Management Committee and has approved the Risk Management Policy of the company. This Committee has been delegated the authority by the Board to review and monitor the implementation of the risk management policy of the Company.

32. Corporate Social Responsibility

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

33. Whistle Blower Policy of the Company

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

34. Acknowledgement:

Your Directors would like to place on record their appreciation for assistance and co-operation received from the financial institutions, banks, Government authorities, customers and members during the year under review. Your Directors also place on record their deep sense of appreciation for the committed services by the executives, employees at all levels.

For and on behalf of the Board of Directors

Sd/- Place: Bhubaneswar (Subash Agarwal) Dated: 7th August, 2015 Chairman

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Fourteenth Annual Report together with the Audited Accounts of the Company for the financial year ending 31st March, 2014.

1. Financial Highlights :

(Rs. In Crores)

Particulars 2013-14 2012-13

Sales & Other Income 901.42 770.98

Profit before Depreciation, Interest and Tax 199.49 109.40

Less : Depreciation 34.95 35.60

Interest 163.10 133.81

Profit Before Tax 1.44 (60.01) Less : Tax Expenses

a) Current Year 0.30 -

b) Earlier Year - -

c) Deferred Tax (0.53) 4.56

Profit/Loss After Tax 1.67 (64.59)

Balance brought forward from previous year - -

Amount Available for Appropriation - -

Appropriations

a) Dividend - -

b) Tax on Dividend - -

c) Transfer to General Reserve - -

Balance Carried to Balance Sheet - -

Earnings per Share (In Rs.) 1.12 (43.51) (equity shares of face value of Rs. 10)

2. Operating Result :

During the year, the turnover of your Company has gone up to Rs. 901.42 from Rs. 770.98 Crores in the previous financial year with a Profit margin of Rs. 1.67 Crores as against a loss of Rs. 64.59 Crores in the previous year. The financial result under review were marginally better due to strict adherence to cost cutting, abandonment of loss making projects and proper utilization of resources.

Moreover, the infrastructure industry all over India is passing through a very tough phase and your Company is no exception to it. Your Directors expect improvement in the performance of the Company in the current year.

3. Consolidated Financial Statements:

Consolidated financial statements in terms of Section-212 of the erstwhile Companies Act,1956 read with accounting Standard AS 21, issued by the Institute of Chartered Accountants of India and as required by the Listing Agreements with Stock Exchange(s), could not be prepared due to dispute between the Company and one of its subsidiary namely ARSS Bus Terminal Private Limited. Accordingly the Management has moved Company Law Board against the subsidiary for oppression and mismanagement and a company petition no.183/2013 is pending before the Company Law Board for hearing.

4. Dividend:

Due to paucity of funds your Directors express their inability for recommendation of dividend during the year under review.

5. Order Book:

Your Company has an order book of more than Rs. 2000 Crore, which includes the following major works:

a) Supply and installation of track (excluding supply of rails) Signaling and overhead equipment (OHE) & associated equipment for 25 KV AC traction, in connection with doubling of railway line between Barang - Rajatgarh (25 KM) Cuttack Barang (12KM) and 3rd line between Barabg Khurda Road (35KM) in the State of Orissa, India with a contract value of Rs. 210.69 crores.

b) Construction of new 2 lane Highway from Km 38.00 to Km 71.00 (Length=33 Km.) in Mizoram in Phase "A" of SARDP- NE (Package-II), having a contract value of Rs. 190.18 crores.

c) Balance work of construction of Roadbed including Minor and Major Bridges, facilities and General Electrifcation for doubling of Railway line between Barang-Rajatgarh (excluding Ghantikal-Naraj Section), Cuttack- Barang and 3rd line between Barang- Bhubaneswar in the State of Orissa, having a contract value of Rs. 158.47 crores.

d) Widening to 2-lane and improvement in km 0.00 to 102.9 of Paralakhumundi -R. Udayagiri-Mohana Road (S.H.-34) under LWE Scheme, with a contract value of Rs. 153.91 Crores.

e) Construction of BRTS Corridor and development of road Contract for Package No. IIB: Sanganer Airport to 22Godam Via Rambagh crossing including Elevated Road at Durgapura (10.50 Km). (NCSL) with a contract value of Rs. 130.00Crores.

f) Construction of earthwork, bridges, supply of P-way material, supply of ballast and P-way linking for proposed private railway siding taking off from Chacher railway station to in plany yard and including inplant yard of NTPC Mauda (but excluding works within railway boundary and excluding rail over rail bridge) Dist Nagpur (M.S.) with a contract value of Rs. 114.49Crores.

g) Improvement of existing intermediate lane of NH-44 Rathachera - Chauraibari section to two lane with pavedshoulder from Km 230/200 to Km 247/000, Km 260/109 to 261/761 & Km 271/00 to 284/053 (Aggregating to = 30.279 Km) under SARDP-NE in Assam under Silchar NH-Division in State of Assam with a contract value of Rs. 104.04 Crores.

h) Earthwork in formation (excluding Blanket), minor bridges between Km 19.000 to Km. 47.000 and 3 nos. of Steelgirder bridges, 8 no.s of Road Over Bridges between Km 19.000 to Km 67.000 in connection with Angul-Sukinda new railway BG line in the state of Odisha, India. With contract value of Rs. 144.00 Crore.

i) Contract Package 3: "BOLANGIR (Excl) - TITLAGARH (Incl) section (63.193 Kms) part of SAMBALPUR-TITLAGARH Doubling in SAMBALPUR Division of East Coast Railway in the states of ORISSA, India with a contract value of Rs. 106.52 Crores.

j) Widening & Strengthening of Parvatipur - Laxmipur road (SH-51) from 12/600 to 42/830 Km, 44/280 to 53/900 Km, 54/900 to 59/200 Km and 65/180 to 68/380 Km on EPC mode with a contract value of Rs. 96.50 Crores.

6. Auditors:

M/s. P.A. & Associates, Chartered Accountants, Statutory Auditors of the Company, hold Office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

The Company has received letter from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 139 of the Companies Act, 2013.

7. Report of Auditors:

Our reply to the qualifcations of Auditors in seriatim- a) In absence of working papers on physical verifcation of inventories, discrepancies, if any, between book and physical inventories could not be ascertained including effect of the same in the financial statements of the company.

Our Reply-

Physical verifcation of stock of all the locations of the Company is generally done once in a year by the auditor, appointed by the lenders. The last stock audit report dated 28.04.2014 was received on 01.05.2014. Since the report was not available on the date of statutory audit report dt. 30.04.2014, it was qualifed.

b) Interest on delayed payment of statutory dues excluding TDS has not been provided for, which has neither been quantifed nor the effect of the same on the financial statements has been ascertained.

Our Reply-

Interest on delayed deposit of TDS has been quantifed and provided for in the accounts of 2013-14. However, the interest on delayed deposit of other statutory dues could not be computed and the same is accounted for as and when the demand is raised. However, effort has been made to compute the interest liability upto 31.03.2014 and effect of the same will be given in quarterly accounts of 30.06.2014.

c) No provision has been made against performance bank guarantees invoked amounting to Rs. 89.83 Crores against the company and disputed by it.

Our Reply-

The Company has lodged claims against the said action taken by the contractees and the matter is under arbitration. Hence, no provision has been made in the books of accounts.

d) No provision has been made against claims recoverable amounting to Rs. 734.44 Crores disputed by the parties and referred for arbitration.

Our Reply-

The claim has been made based on the actual work done even though it is not acknowledged by the contractee. Since corresponding expenditure has been incurred and based on the certificates obtained from the site in charge the revenue has been recognized. The Company is pursuing the matter and shortfall if any during the settlement/ arbitration will be provided for on the date of settlement/ arbitration.

e) Revenue includes Rs. 292.44 Crores against claims raised on different parties,which has neither been acknowledged nor recoverability of which is ascertainable.

Our Reply-

As explained in the above paragraph the work has been executed even though the same has not been acknowledged by the contractee to avoid black listing. In general perception the same is recognized by the department after achievement of the milestone. However, against the above work done, the Company has lodged claim with the department and the matter is under arbitration.

f) The Company has not given effect to the loss of Fixed Assets in fre with a gross value of Rs. 3.78 Crores resulting charging of higher depreciation by Rs. 0.67 Crores and reduction in Profit by the same amount

. The gross value of fixed assets has remained higher by Rs. 3.78 crores.

Our Reply-

The amount borrowed by the Company has been restructured under the CDR mechanism and we are focusing on the key areas for the viability of the Company and events which are not material has not been considered. However, the same shall be complied during the current financial year.

g) In absence of relevant records, Contract-wise surplus/loss has neither been ascertained nor recognized in compliance with the requirements of para 34 and 35 of AS-7 "Construction Contracts" issued by the Institute of Chartered Accountants of India.

Our Reply-

The amount borrowed by the Company has been restructured under the CDR mechanism and we are focusing on the key areas for the viability of the Company and events which are not material has not been considered. However, the same shall be complied during the current financial year.

h) In absence of details of potential equity shares, diluted earning per share has not been ascertained in compliance with AS-20- "Earning per Share" issued by the Institute of Chartered Accountants of India.

Our Reply-

The amount borrowed by the Company has been restructured under the CDR mechanism and we are focusing on the key areas for the viability of the Company and events which are not material has not been considered. However, the same shall be complied during the current financial year.

i) Cost of leasehold Land has not been amortized which is not in conformity with AS-19- "Accounting for Leases" issued by the Institute of Chartered Accountants of India. Amount of amortisation not ascertained.

Our Reply-

The amount borrowed by the Company has been restructured under the CDR mechanism and we are focusing on the key areas for the viability of the Company and events which are not material has not been considered. However, the same shall be complied during the current financial year.

j) Interest amounting to Rs. 3.18 Crores on inter corporate deposits received has not been charged to Profit & Loss Account resulting in overstatement of Profit to that extent.

Our Reply-

The said loan was given by the lender for a particular PPP project with a condition to convert the same as income after occurring of the event in a future date. However, the matter is now under litigation and sub-judice since the PPP project was terminated. Hence, status quo is maintained and accounting effect of the same will be given after the verdict of the Hon''ble Court.

k) In the absence of accounts of ARSS Balajee JV, HCIL-Adhikarya-ARSS JV, HCIL-ARSSPL JV, HCIL-ARSS-Kalindee JV, ARSS-MVPL JV and HCIL-ARSSPL-Triveni JV, discrepancies, if any, between the said accounts with that of the Company is not ascertainable.

Our Reply-

The accounts of the JVs has not been fnalized. However, most of the JVs have become inoperative. The accounting effect of discrepancies if any after the fnalization of the accounts will be given at current date.

8. Directors:

During the year Mr. K.C.Raut, Nominee of State Bank of India was appointed as Nominee Director w.e.f. 10.05.2013.

Mr. Rajesh Agarwal (Managing Director) and Mr. Soumendra Keshari Pattanaik, Director (Finance) who retaires by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

9. Particulars of Employees:

As required under the provision of section 217(2A) of the erstwhile Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, there was no employees who have drawn salary or appointed under this category during the financial year 2013-14.

10. Responsibility Statement:

In pursuance of Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company confirms:

i) that in the preparation of Annual Accounts, the applicable Accounting Standards issued by The Institute of Chartered Accountants of India have been followed by the Company and there has been no material departure.

ii) that the Directors have selected such Accounting Policies and applied them consistently and have 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 Profit of the Company for the year ended on that date.

iii) that the Directors have taken Proper and suffcient care for maintenance of adequate accounting records in accordance with the provisions of Sec-209 of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities and

iv) That the Directors have prepared the Annual Accounts on a going concern basis.

11. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo etc. U/S 217 (1) (e):

During the year under review, the Company has taken adequate measures for conservation of energy and also has not gone for any technology absorption whatsoever in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the Report of Board of Directors ) Rules, 1988.

The Company has neither earned any income nor incurred any expenditure in foreign currency during the financial year ended 31st March, 2014.

12. Public Deposits:

Your Company has not invited any deposit from public and shareholders. So, the provisions of the Section 58A of the Companies Act, 1956 are not attracted.

13. Corporate Governance:

Your Company is committed for adopting best ethical business practices in the management within the regulatory framework applicable to it. Accountability, Disclosure and strict compliance is the essence of good corporate governance. On the one hand good corporate governance calls for accountability of the persons who are the helm of affairs of the Company and on the other hand it also brings benefits to all stakeholders of the Company such as investors, customers, employees and the society at large. Your Company continues to believe in such business practices and has been extremely transparent in providing reliable financial information and in maintaining transparency in all its business transactions and ensuring strict compliance of all applicable laws.

Your Company has adopted the requirement of Corporate Governance as prescribed under Clause 49 of the Listing Agreement and a separate section titled "Corporate Governance" has been included in the Annual Report along with "Management Discussion and Analysis Report".

14. Industrial Relation:

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

15. Corporate Debt Restructuring (CDR):

Your directors are pleased to intimate you that the Promoters and their associated have successfully adhered to the covenants of Corporate Debt Restructuring Scheme issued by the Corporate Debt Restructuring Empowered Group by bringing in Rs. 60 Crore as their contribution with in 31.3.2014.

16. Inspection under Section 209A of the Companies Act, 1956:

The inspection of books and accounts which was carried out under Section 209A of the Companies Act,1956 by the officials of Regional Director, Eastern Region, Ministry of Corporate Affairs have been completed and the company has suitably replied the PFL issued by the Department.

17. Acknowledgement:

Your Directors would like to place on record their appreciation for assistance and co-operation received from the financial institutions, banks, Government authorities, customers and members during the year under review. Your Directors also place on record their deep sense of appreciation for the committed services by the executives, staffs and workers of the Company.

For and on behalf of the Board of Directors

Sd/- Place: Bhubaneswar (Subash Agarwal) Dated: The 30th day of April, 2014 Chairman

Mar 31, 2013

The Directors have pleasure in presenting the Thirteenth Annual Report together with the Audited Accounts of the Company for the fnancial year ending 31st March, 2013.

1. Financial Highlights :

(Rs.In crores) Particulars 2012-13 2011-12

Sales & Other Income 770.98 1198.58

Proft before Depreciation, Interest and Tax 109.40 176.16

Less : Depreciation 35.60 37.91

Interest 133.81 162.08

Proft Before Tax (60.01) (23.82)

Less : Tax Expenses

a) Current Year

b) Earlier Year

c) Deferred Tax 4.56 57.80

Proft/Loss After Tax (64.59) (29.61)

Balance brought forward from previous year

Amount Available for Appropriation

Appropriations

a) Dividend

b) Tax on Dividend

c) Transfer to General Reserve

Balance Carried to Balance Sheet

Earning per Share (In) (43.51) (19.95)

(equity shares of face value of Rs. 10)

2. Operating Result :

During the year, the turnover of your Company has decreased to Rs. 770.98 Crores from Rs. 1198.58 Crores in the previous fnancial year. The loss incurred during the year was Rs. 64.59 Crores as against a loss of Rs. 29.01Crores in the previous year. The fnancial result under review were subdued which were largely attributable to higher input costs and locking of working capital in various major projects which could not be completed in time.

Moreover, the infrastructure industry all over India is passing through a very though phase and you Company is no exception to it. Your Directors expect improvement in the performance of the Company in the current year.

3. Consolidated Financial Statements:

Consolidated fnancial statements in terms of Section-212 of the Companies Act,1956 read with accounting Standard AS 21, issued by the Institute of Chartered Accountants of India and as required by the Listing Agreements with Stock Exchange(s), could not be prepared due to dispute between the Company and one of its subsidiary namely ARSS Bus Terminal Private Limited. Accordingly the Management has moved Company Law Board against the subsidiary for oppression and mismanagement and a company petition no.183/2013 is pending before the Company Law Board for hearing.

4. Dividend:

Due to paucity of funds your Directors express their inability for recommendation of dividend during the year under review.

5. Order Book:

Your Company has an order book of more than Rs.2000 Crore, which includes the following major works:

a) Construction, rehabilitation and widening of Cuttack - Paradeep road, Orissa with a contract value of Rs.259.31 crores.

b) Construction of BRTS Corridor and Development of road, Jaipur Development Authority, Rajasthan, having a contract value of Rs.104.41 crores.

c) JSPL, Angul, Orissa Project-Work Order for execution of Rail Infrastructure Work with a contract Value of Rs.261.00 Crores.

d) Construction of a new 2-lane Highway from km 38/00 to km 71/00 (length=33.0 Km) in Mizoram, with a contract value of Rs.163.11 Crores.

e) Widening to 2 lane and improvement in km 0/0 to 102/9 km of Parlakhemundi-R. Udayagiri-Mohana road (SH-34) under LWE Scheme. Orissa with a contract value of Rs.153.91Crores.

f) Construction of earthwork, bridges, supply of P-way material, supply of ballast and P-way linking for proposed private railway siding taking off from Chacher railway station to in plany yard and including inplant yard of NTPC Mauda (but excluding works within railway boundary and excluding rail over rail bridge) Dist Nagpur (M.S.) with a contract value of Rs.114.49Crores.

g) ADB Track Work Railway Work in the State of Orissa with a contract value of Rs.170.00 Crores.

h) Construction of Kaushilia Dam and appurtenant works in panchkula district. With contract value of Rs.120.00 Crore.

i) Improvement of existing single intermediate lane of NH-44 to two lane with paved shoulders from km 230/200 to km 247/00, km 261/504 in the State of Assam with a contract value of Rs.104.05Crores.

j) Two laning without paved Shoulder of Developing of road project in the state of Madhya Pradesh from Damoh- Bhatlyagarh-Baxwaha-Hirapur. (SH-37) with a contract value of Rs.122.74 Crores.

k) MP State Road Project Manwar -Mangod (Bandheri) Road & Sardarpur -Rajgarh - Bagh Road PKG-4, with a contract value of Rs.117.70Crores.

l) Execution of Balance Work of Construction of Roadbed including minor bridges and major bridges, facilities and general electrifcation for doubling of Railway line between Barang Â Rajathgarh (excluding Ghantikhal Â Naraj Section), Cuttack Â Barang and 3rd line between Barang Â Bhubaneswar in the state of Odisha, India with contract value of Rs.105.17 Crores.

6. Auditors:

M/s. P.A. & Associates, Chartered Accountants, Bhubanewar Statutory Auditors of the Company, hold offce until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

The Company has received letter from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualifed for reappointment within the meaning of Section 226 of the said Act.

7. Report of Auditors:

The notes on accounts and observations of the Auditors in their report on the accounts of the Company are self explanatory except Para. 2(b) and (e), which calls for further explanation. These are as follows- 2(b)(i)-In the absence of working papers on physical verifcation of inventories, discrepancies, if any, between book and physical inventories could not be ascertained including effect of the same in the fnancial statement of the Company.

Physical verifcation of stocks of all our sites are not feasible on quarterly basis, because the company is operating from more than 100s sites all over India. As regular verifcation is not possible in all sites, we are conducting it in a phased manner and giving effect of the same in the annual accounts.

2(b) (ii)-Interest on delayed payment of statutory dues has not been provided for, which has neither been quantifed nor the effect of the same on the fnancial statements has been ascertained.

Interest on Statutory dues are quantifed and given effect annually in the Balance Sheet of the Company but in quarterly accounts it has not been given effect. The Management will take care the issue in future quarterly accounts.

2(b)(iii)-No provision has been made against performance Bank Guarantees invoked amounting to Rs.59.40 Crores against the Company and disputed by it.

The matter is sub-judice and are in the process of arbitration. Hence, no provision has been made.

2(b)(iv)-No provision has been made against sundry debtors amounting to Rs.442.16 Crores disputed by the parties and referred for arbitration.

The Company has not considered any of the existing debtors as doubtful as the matter is sub-judice and taking all due care to realize the same.

2(e)-The Balance Sheet ,Statement of Proft and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of Section 211 of the Companies Act,1956 except Accounting Standard 2 (Valuation of Inventories) issued by the Institute of Chartered Accountants of India as stated in Para.2(b)(i).

Regular physical verifcation of stocks in sites is not possible as the Company is executing more than 100 sites all over India and it is being conducted in a phased manner. The Management will take care of the matter to have a regular check of stocks in all sites and veryfy by a third party agency approved by (CDR EG)

8. Directors:

During the year Mr. Bommana Ramesh Babu and Mr. Parmod kumar Sharma were appointed as Nominee Director w.e.f. 10.11.2012. Mr. U.N.Challu who retires by rotation in terms of Section 255 of the Companies Act, 1956 at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.

9. Particulars of Employees:

As required under the provision 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 given below :

10. Responsibility Statement:

In pursuance of Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company confrms:

i) that in the preparation of Annual Accounts, the applicable Accounting Standards issued by The Institute of Chartered Accountants of India have been followed by the Company and there has been no material departure.

ii) that the Directors have selected such Accounting Policies and applied them consistently and have 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, 2013 and of the proft of the Company for the year ended on that date.

iii) that the Directors have taken Proper and suffcient care for maintenance of adequate accounting records in accordance with the provisions of Sec-209 of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities and

iv) That the Directors have prepared the Annual Accounts on a going concern basis.

11. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo etc. U/S 217 (1) (e):

During the year under review, the Company has taken adequate measures for conservation of energy and also has not gone for any technology absorption whatsoever in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the Report of Board of Directors ) Rules, 1988.

The Company has neither earned any income nor incurred any expenditure in foreign currency during the fnancial year ended 31st March, 2013.

12. Public Deposits:

Your Company has not invited any deposit from public and shareholders. So, the provisions of the Section 58A of the Companies Act, 1956 are not attracted.

13. Corporate Governance:

Your Company is committed for adopting best ethical business practices in the management within the regulatory framework applicable to it. Accountability, Disclosure and strict compliance is the essence of good corporate governance. On the one hand good corporate governance calls for accountability of the persons who are the helm of affairs of the Company and on the other hand it also brings benefts to all stakeholders of the Company such as investors, customers, employees and the society at large. Your Company continues to believe in such business practices and has been extremely transparent in providing reliable fnancial information and in maintaining transparency in all its business transactions and ensuring strict compliance of all applicable laws.

Your Company has adopted the requirement of Corporate Governance as prescribed under Clause 49 of the Listing Agreement and a separate section titled "Corporate Governance" has been included in the Annual Report along with "Management Discussion and Analysis Report".

14. Industrial Relation:

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

15. Acknowledgement:

Your Directors would like to place on record their appreciation for assistance and co-operation received from the fnancial institutions, banks, Government authorities, customers and members during the year under review. Your Directors also place on record their deep sense of appreciation for the committed services by the executives, staffs and workers of the Company.

For and on behalf of the Board of Directors

Place : Bhubaneswar (Subash Agarwal)

Dated : The 11th day of May, 2013 Chairman

Mar 31, 2012

The Directors have pleasure in presenting the Twelveth Annual Report together with the Audited Accounts of the Company for the financial year ending 31st March, 2012.

1. FINANCIAL HIGHLIGHTS

(Rs. In crores)

Particulars 2011-12 2010-11

Sales & Other Income 1198.58 1257.47

Profit before Depreciation, Interest and Tax 176.16 279.22

Less : Depreciation 37.91 28.22

Interest 162.08 99.03

Profit Before Tax (23.82) 151.97

Less : Tax Expenses

a) Current Year - 30.23

b) Earlier Year - -

c) Deferred Tax 5.79 9.57

Profit/Loss After Tax (29.61) 112.17

Balance brought forward from previous year - 169.97

Amount Available for Appropriation - 282.14

Appropriations

a) Dividend - 1.48

b) Tax on Dividend - 0.24

c) Transfer to General Reserve - 1.48

Balance Carried to Balance Sheet - 278.93

Earning per Share (In Rs.) (equity shares of face value of Rs. 10) - 75.57

2. OPERATING RESULT

During the year, the turnover of your Company has decreased to Rs. 1198.58 crores from Rs. 1257.00 crores in the previous financial year. The loss incurred during the year was Rs. 29.61 crores as against a profit of Rs. 112.17 crores in the previous year. The financial result under review were subdued which were largely attributable to higher input costs and locking of working capital in various major projects which could not be completed in time.

Moreover, the infrastructure industry all over India is passing through a very tough phase and your Company is no exception to it. Your Directors expect improvement in the performance of the Company in the current year,

3. CONSOLIDATED FINANCIAL STATEMENTS

Consolidated financial statements, prepared in accordance with accounting Standard AS 21, issued by the Institute of Chartered Accountants of India, and as required by the Listing Agreement are attached and form part of the Annual Report and Accounts.

4. DIVIDEND

Due to paucity of funds your Directors express their inability for recommendation of dividend during the year under review.

5. ORDER BOOK

Your Company has an order book of more than Rs. 3000.00 crore, which includes the following major works:

a) Construction, rehabilitation and widening of Cuttack

- Paradeep road, Orissa with a contract value of Rs. 208.27 crores.

b) Construction of BRTS Corridor and Development of road, Jaipur Development Authority, Rajasthan, having a contract value of Rs. 104.41 crores.

c) JSPL, Angul, Orissa Project-Work Order for execution of Rail Infrastructure Work with a contract Value of Rs. 261.00 crores.

d) Construction for widening and strengthening of existing carriageway to two lane for Chandbali-Bhadrak-Anadpur (Km 0/0 to Km 45/0 of SH-9 and Km 0/0 to Km 50/0 of SH-53), Orissa, having a contract value of Rs. 216.23 crores.

e) Widening and Strengthening of Existing Carriageway to 2 lane for Bhawanipatna to Khariar (2/0 Km to 70/0 Km SH- 16), Orissa, with a contract Value of Rs. 105.51 crores.

f) Construction of a new 2-lane Highway from km 38/00 to km 71/00 (length=33.0 Km) in Mizoram, with a contract value of Rs. 163.11 crores.

g) Widening to 2 lane and improvement in km 0/0 to 102/9 km of Parlakhemundi-R. Udayagiri-Mohana road (SH-34) under LWE Scheme. Orissa with a contract value of Rs. 153.91 crores.

h) Construction of earthwork, bridges, supply of P-way material, supply of ballast and P-way linking for proposed private railway siding taking off from Chacher railway station to in plany yard and including inplant yard of NTPC Mauda (but excluding works within railway boundary and excluding rail over rail bridge) Dist Nagpur (M.S.) with a contract value of Rs. 114.49 crores.

i) Improvement of existing single intermediate lane of NH-44 to two lane with paved shoulders from km 230/200 to km 247/00, km 261/504 in the State of Assam with a contract value of Rs. 104.05 crores.

j) Two laning without paved Shoulder of Developing of road project in the state of Madhya Pradesh from Damoh- Bhatlyagarh-Baxwaha-Hirapur. (SH-37) with a contract value of Rs. 122.74 crores.

k) 4/2 laining of Remuli-Roxy-Rajamunda section of NH-215 from 163-269 in the state of Odisha, with a contract value of Rs. 200.00 crores.

l) MP State Road Project Manwar -Mangod (Bandheri) Road & Sardarpur -rajgarh - Bagh Road PKG-4 , with a contract value of Rs. 117.70 crores.

m) Strengthening, Widening, Maintaining and operating of Sijhata-Hinoti-Malgaon-Khamriya, Ater-Poudi-Mharajpur- Parsamaniya & Managawar-Kehunthpur Roads (MDR Package-X) on BOT (annuity) Basis, with a contract value of Rs. 100.00 crores.

n) Strengthening, Widening, Maintaining and operating of Phoolsagar-Niwas-Shahpur Road (MDR Package-VII) on BOT (annuity) Basis, with a contract value of Rs. 155.00 crores.

6. AUDITORS

M/s. P.A. & Associates, Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

The Company has received a letter from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for reappointment within the meaning of Section 226 of the said Act.

7. REPORT OF AUDITORS

The notes on accounts and observations of the Auditors in their report on the accounts of the Company are self explanatory except clause no.4.2 which calls for further explanation. These are as follows;

Profit from HCIL-Adhikaria-ARSSPL JV has been ascertained on the basis of Provisional Accounts as on 31.03.2012 and also for earlier years instead of audited accounts, which is not in accordance with Accounting Standard -27,"Financial Reporting of Interest in Joint Ventures" issued by The Institute of Chartered Accountants of India.

HCIL-Adhikaria-ARSS,an international JV,a partner of the Company, which prepare their accounts in a different basis for a different period than our Company. As their accounts are not yet finalised, the profit from the JV has been considered on provisional basis. This is beyond the control of the management and the Company does not expect any substantial deviations in the audited accounts.

8. DIRECTORS

During the year Mr. Dipak Kumar Dey resigned from the Board of Directors of the Company w.e.f 07.02.2012 due to his other pre occupations and in his place Mr.Upendra Nath Challu was appointed as an Independent Director on the same date. Mr. S.C. Parija who retires by rotation in terms of Section 255 of the Companies Act, 1956 at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.

Brief resume of Mr. S.C. Parija proposed to be reappointed, nature of his experience and names of the companies in which he holds directorship and membership are provided in the Notice for convening the Annual General Meeting.

9. PARTICULARS OF EMPLOYEES

As required under the provision 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 given below :

Sr. Name of the Designation Qualification Age in No person years

1 Subash Agarwal Executive B. Com 47 Chairman

2 Rajesh Agarwal Managing B.E. Civil 37 Director

3 Sunil Agarwal President & CEO B.Com 36

4 Anil Agarwal Sr. VP & COO B.Com 43

5 S.K.Pattanaik Director (Finance) M.Com, MBA Finance, LLB 42

6 S. K. Singla VP & Project B. Tech, Civil 47 Head

7 M.K. Banerjee Chief Operating BE Civil, PGDBM 60 Officer

8 Balvir Singh Executive Vice BE Civil 49 President Civil

9 C.J. Soni Sr. Vice President Diploma Civil 51 Projects

10 Jitu Mishra Vice President Vice President - HR 38 (HR)

11 P.Mithivanan Head Asset B.E- Mech 62 Management

12 M.P.S. Yadav Sr. General A.M.I.E- Civil 43 Manager

13 H.K. Gupta Sr. General B.E. Civil 47 Manager Project

14 Abdul Aziz General Manager B.Sc. Engg - Civil 43 Project

15 B.K. Sahoo Chief Engineer B.E. Civil 70 Civil

16 Malay Sarkar Project Manager B.E. Civil 55

Name of the Person Date of Experience Gross Remuneration Joining (No of (Per Month Rs. In Lacs) years)

Subash Agarwal 05/11/2007 21 15.00

Rajesh Agarwal 01/10/2006 16 14.00

Sunil Agarwal 01/04/2005 13 3.00

Anil Agarwal 01/04/2006 17 3.00

S K Pattanaik 01/04/2005 18 2.50

S K Singla 01/07/2006 18 3.50

M K Banerjee 11/07/2011 36 4.75

Balvir Singh 27/04/2011 27 3.00

C J Soni 16/12/2010 30 3.00

Jitu Mishra 11/05/2011 15 2.50

P Mithivanan 16/06/2011 38 2.00

M P S Yadav 04/11/2011 23 2.25

H K Gupta 14/12/2011 27 2.20

Abdul Aziz 1/02/2011 19 2.00

B K Sahoo 07/11/2006 43 2.10

Malay Sarkar 28/11/2008 55 2.00

10. RESPONSIBILITY STATEMENT

In pursuance of Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company confirms:

i) that in the preparation of Annual Accounts, the applicable Accounting Standards issued by the Institute of Chartered Accountants of India have been followed by the Company and there has been no material departure,

ii) that the Directors have selected such Accounting Policies and applied them consistently and have 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, 2012 and of the Profit and Loss of the Company for the year ended on that date.

iii) that the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of Sec-209 of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities and

iv) That the Directors have prepared the Annual Accounts on a going concern basis.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO ETC.

U/S 217 (1) (e)

During the year under review, the Company has taken adequate measures for conservation of energy and also has not gone for any technology absorption whatsoever in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the Report of Board of Directors ) Rules, 1988.

The Company has neither earned any income nor incurred any expenditure in foreign currency during the financial year ended 31st March, 2012.

12. PUBLIC DEPOSITS

Your Company has not invited any deposit from public and shareholders. So, the provisions of the Section 58A of the Companies Act, 1956 are not attracted.

13. CORPORATE GOVERNANCE

Your Company is committed for adopting best ethical business practices in the management within the regulatory framework applicable to it. Accountability, Disclosure and strict compliance is the essence of good corporate governance. On the one hand good corporate governance calls for accountability of the persons who are the helm of affairs of the Company and on the other hand it also brings benefits to all stakeholders of the Company such as investors, customers, employees and the society at large. Your Company continues to believe in such business practices and has been extremely transparent in providing reliable financial information and in maintaining transparency in all its business transactions and ensuring strict compliance of all applicable laws.

Your Company has adopted the requirement of Corporate Governance as prescribed under Clause 49 of the Listing Agreement and a separate section titled "Corporate Governance" has been included in the Annual Report along with "Management Discussion and Analysis Report".

14. INDUSTRIAL RELATION

Employee relations continued to be cordial throughout the year. The whole-hearted support of employees and a sense of belongingness with the organisation and solidarity with the management of the Company have helped to achieve better performance during the year.

15. ACKNOWLEDGEMENT

Your Directors would like to place on record their appreciation for assistance and co-operation received from the financial institutions, banks, Government authorities, customers and members during the year under review. Your Directors also place on record their deep sense of appreciation for the committed services by the executives, staffs and workers of the Company.

For and on behalf of the Board of Directors

(Subash Agarwal)

Chairman

Place : Bhubaneswar

Dated : The 14th day of May, 2012

Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting the Eleventh Annual Report together with the Audited Accounts of the Company for the financial year ending 31st March, 2011.

1. Financial Highlights

(Rs. in crores)

Particulars 2010-11 2009-10

Sales & Other Income 1257.47 1013.09

Profit before Depreciation, Interest and Tax 279.22 187.70

Less : Depreciation 28.22 13.54

Interest 99.03 53.07

Profit Before Tax 151.97 121.09

Less : Tax Expenses

a) Current Year 30.23 25.33

b) Earlier Year - -

c) Deferred Tax 9.57 5.68

Profit After Tax 112.17 90.07

Balance brought forward from previous year 169.97 86.34

Amount Available for Appropriation 282.14 176.42

Appropriations

a) Dividend 1.48 2.96

b) Tax on Dividend 0.24 0.54

c) Transfer to General Reserve 1.48 2.96

Balance Carried to Balance Sheet 278.93 169.97

Earning per Share (In Rs.) 75.57 70.48 (equity shares of face value of Rs. 10)

2. Result of Operation

During the year, your Company has scaled new heights and several new benchmarks in terms of revenue and asset base has been created. Total revenue for the year was Rs. 1257.47 crores against Rs. 1013.09 crores in the previous year showing an increase by 24.12%.

Profit after tax for the year was Rs. 112.17 crores as against Rs. 90.07 crores for the previous year showing an increase by 24.53%.

3. Order Book

Your Company has an order book of more than Rs. 3,221 crores, which includes the following major works:

a) Construction, rehabilitation and widening of Cuttack - Paradeep road, Orissa with a contract value of Rs. 208.27 crores

b) Construction of BRTS Corridor and Development of road, Jaipur Development Authority, Rajasthan, having a contract value of Rs. 159.02 crores

c) JSPL, Angul, Orissa Project-Work Order for execution of Rail Infrastructure Work with a contract Value of Rs. 261.00 crores

d) Construction for widening and strengthening of existing carriageway to two lane for Chandbali- Bhadrak-Anadpur (Km 0/0 to Km 45/0 of SH-9 and Km 0/0 to Km 50/0 of SH-53), Orissa, having a contract value of Rs. 216.23 crores

e) Widening and Strengthening of Existing Carriageway to 2 lane for Bhawanipatna to Khariar (2/0 Km to 70/0 Km SH-16), Orissa, with a contract Value of Rs. 105.51 crores

f) Construction for widening and strengthening of existing carriageway to two lanes for Berhampur to Taptapani (Km 0/0 to Km 41/0 of SH-17) Orissa, with a contract Value of Rs. 81.97 crores

g) Construction of a new 2-lane Highway from km 38/00 to km 71/00 (length=33.0 Km) in Mizoram, with a contract value of Rs. 163.11 crores

h) Widening to 2 lane and improvement in km 0/0 to 102/9 km of Parlakhemundi-R. Udayagiri-Mohana road (SH-34) under LWE Scheme. Orissa with a contract value of 153.91

i) Construction of earthwork, bridges, supply of P-way material, supply of ballast and P-way linking for proposed private railway siding taking off from Chacher railway station to in plany yard and including inplant yard of NTPC Mauda (but excluding works within railway boundary and excluding rail over rail bridge) Dist Nagpur (M.S.) with a contract value of 114.49

j) Improvement of existing single intermediate lane of NH-44 to two lane with paved shoulders from km 230/200 to km 247/00, km 261/504 in the State of Assam with a contract value of 104.05

k) Widening & Reconstruction of Package-1, Shahdol- Singhpur-Turla Pandariya Road (SH-9) under Regular Contract with a contract value of Rs. 99.90 crores

4. Auditors

M/s. P.A. & Associates, Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

The Company has received letter from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act., 1956 and that they are not disqualified for reappointment within the meaning of Section 226 of the said Act.

5. Report of Auditors

The notes on accounts and observations of the Auditors in their report on the accounts of Company are self explanatory except clause no. 4.2 which calls for further explanation. They are as follows;

Profit from HCIL-Adhikaria- ARSSPL JV has been ascertained on the basis of Provisional Accounts as on 31.03.2011 and also for earlier years instead of audited accounts, which is not in accordance with Accounting Standard Ã 27, "Financial Reporting of Interest in Joint Ventures" issued by The Institute of Chartered Accountants of India.

HCIL-Adhikaria- ARSS, an international J V, a partner of the Company, which prepare their accounts in a different basis for a different period than our Company. As their accounts are not yet finalised, the profit from the JV has been considered on provisional basis. This is beyond the control of the management and the Company does not expect any substantial deviations in the audited accounts.

6. Dividend

Your Directors propose to recommend a dividend of Rs. 1/- per equity share (last year Rs. 2/- per equity share) for the financial year ending March 31, 2011, amounting to Rs. 148.43 lacs (Excluding of dividend tax of Rs. 24.08 lacs). The lower rate of dividend than previous year is due to owing to deployment of more internal earnings in the working capital requirement of the company.

7. Directors

During the year Mr. S.R. Chaudhuri and Mr. S.C.Chakraborty have resigned w.e.f 07.02.2011 due to their other pre occupations. D r. Bidhubhusan Samal retires by rotation at the ensuing Annual General Meeting and being eligible, have offered himself for re-appointment.

Brief resumes of Dr. Bidhubhusan Samal proposed to be reappointed, nature of his experience and names of the companies in which he holds directorship and membership are provided in the Notice for convening the Annual General Meeting.

8. Particulars of Employees

As required under the provision 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 given below :

Sl.Name of the Designation Qualification Age Date of Experi -ence Gross No person in Joining (No of Remuneration years years) (Rs.)

1 Subash Agarwal Executive Chairman B. Com 46 05/11/ 2007 20 1,50,00,000

2 Rajesh Agarwal Managing Director B.E. Civil 36 01/10/ 2006 15 90,00,000

3 Sunil Agarwal President & CEO B.com 35 01/04/ 2005 12 34,80,000

4 Anil Agarwal Sr. VP & COO B.com 42 01/04/ 2006 16 34,80,000

5 S. K. Singla VP & Project Head B. Tech, Civil 47 01/07/ 2006 17 42,00,000

6 C.J. Soni Sr. Vice President D.C.E 51 16/12/ 2010 30 10,50,000

9. Responsibility Statement

In pursuance of Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company confirms:

i) that in the preparation of Annual Accounts, the applicable Accounting Standards issued by The Institute of Chartered Accountants of India have been followed by the Company and there has been no material departure

ii) that the Directors have selected such Accounting Policies and applied them consistently and have 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, 2011 and of the profit of the Company for the year ended on that date

iii) that the Directors have taken Proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of Sec-209 of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities and

iv) that the Directors have prepared the Annual Accounts on a going concern basis

10. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo etc. U/S 217 (1) (e)

During the year under review, the Company has taken adequate measures for conservation of energy and also has not gone for any technology absorption whatsoever in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the Report of Board of Directors ) Rules, 1988.

The Company has neither earned any income nor incurred any expenditure in foreign currency during the financial year ended 31st March, 2011.

11. Public Deposits

Your Company has not invited any deposit from public and shareholders. So, the provisions of the Section 58A of the Companies Act, 1956 are not attracted.

12. Corporate Governance

Your Company is committed for adopting best ethical business practices in the management within the regulatory framework applicable to it. Accountability, Disclosure and strict compliance is the essence of good corporate governance. On the one hand good corporate governance calls for accountability of the persons who are the helm of affairs of the Company and on the other hand it also brings benefits to all stakeholders of the Company such as investors, customers, employees and the society at large. Your Company continues to believe in such business practices and has been extremely transparent in providing reliable financial information and in maintaining transparency in all its business transactions and ensuring strict compliance of all applicable laws.

Your Company has adopted the requirement of corporate governance as prescribed under clause 49 of the Listing Agreement and a separate section titled "Corporate Governance" has been included in the Annual Report along with "Management Discussion and Analysis Report".

13. Industrial Relation

Employee relations continued to be cordial throughout the year. The whole-hearted support of employees and a sense of belongingness with the organisation and solidarity with the management of the Company have helped achieve better performance during the year.

14. Acknowledgement

Your Directors would like to place on record their appreciation for assistance and co-operation received from the financial institutions, banks, Government authorities, customers and members during the year under review. Your Directors also 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

Place: Bhubaneswar Subash Agarwal

Dated: The 11th day of May, 2011 Chairman

Mar 31, 2010

The Directors have pleasure in presenting the Tenth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2010.

1. Financial Highlights:

(Rs. in Crores) Particulars 2009-10 2008-09 Sales & Other Income 1,013.09 628.24 Proft before Depreciation, Interest and Tax 187.70 104.96

Less : Depreciation 13.54 7.35

Interest 53.07 27.02

Proft Before Tax 121.09 70.59 Less : Tax Expenses a) Current Year 25.33 15.49

b) Earlier Year - 1.02

c) Deferred Tax 5.68 3.71

d) Fringe Beneft - 0.26 Proft After Tax 90.07 50.09 Balance brought forward from previous year 86.34 40.23 Amount Available for Appropriation 176.42 90.31 Appropriations a) Dividend 2.97 1.25

b) Tax on Dividend 0.51 0.21

c) Transfer to General Reserve 2.97 2.50 Balance Carried to Balance Sheet 169.97 86.34 Earning per Share (in Rs.) 70.48 39.90 (equity shares of face value of Rs. 10)

2. Result of Operation:

During the year, your Company has scaled new heights and achieved new benchmarks for creation of revenue and asset base. The total revenue for the year was Rs. 1,013.09 Crore against Rs. 628.24 Crores in the previous year.

Proft after tax for the year was Rs. 90.07 Crores as against Rs. 50.09 Crores for the previous year.

3. Order Book:

Your Company has an order book of more than Rs. 2,700 crore, which includes the following major works:

a) Construction, rehabilitation and widening of Cuttack - Paradeep road, Orissa with a contract value of Rs. 208.27 Crores.

b) Construction of Rail Infrastructure facility for transportation of coal from Naila Railway Station to proposed site of 2*500 MW of CSPGCL for Marwa TPP for Package-III with a Contract value of Rs. 41.54 Crores.

c) Construction of BRTS Corridor and Development of road, Jaipur Development Authority, Rajasthan, having a contract value of Rs. 159.02 Crores.

d) Civil Engineering work including P.way works in connection with construction of new BG Railway line from New Maynaguri (West Bengal) to Jogighopa (Assam), with a contract value of Rs. 53.68 Crores.

e) Irrigation and canal work for construction of Bahragora distributry main canal, earthwork, lining in Jharkhand, with a contract value of Rs. 35.63 Crores.

f) JSPL, Angul, Orissa Project-Work Order for execution of Rail Infrastructure Work with a contract Value of Rs. 261.00 Crores.

g) Construction for widening and strengthening of existing carriageway to two lane for Chandbali-Bhadrak- Anadpur (Km 0/0 to Km 45/0 of SH-9 and Km 0/0 to Km 50/0 of SH-53), Orissa, having a contract value of Rs. 216.23 Crores.

h) Widening and Strengthening of Existing Carriageway to 2 lane for Bhawanipatna to Khariar (2/0 Km to 70/0 Km SH-16), Orissa, with a contract value of Rs.105.51 Crores.

i) Construction for widening and strengthening of existing carriageway to two lanes for Berhampur to Taptapani (Km 0/0 to Km 41/0 of SH-17) Orissa, with a contract value of Rs. 81.97 Crores.

4. Initial Public Offer:

The Company during the year for meeting its working capital requirements came out with an Initial Public Offer of 22,89,230 equity shares of Rs. 10/- each for cash with a premium of Rs. 440/- each aggregating Rs. 103.00 Crores.

The Company received clearance from the SEBI on 14th December, 2009 and from ROC on 28th January, 2010 for its IPO. The IPO opened on 8th February, 2010 and closed on 11th February, 2010. The IPO received an overwhelming response and was oversubscribed by more than 51 times. The shares got listed on 3rd March, 2010 at Rs. 640/- per share at BSE.

5. Auditors:

M/s. P. A. & Associates, Chartered Accountants, Statutory Auditors of the Company, hold offce until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act., 1956 and that they are not disqualifed for reappointment within the meaning of Section 226 of the said Act.

6. Report of Auditors:

The notes on accounts and observations of the Auditors in their report on the accounts of Company are self- explanatory except clause no. 4.2 (a) and (b) which call for further explanation. They are as follows:

a) Provision of Rs. 30.51 lacs on account of retirement gratuity has been made on adhoc basis in the absence of actuarial valuation. The process is expected to be completed. The Company has also created a Trust for the employees to implement the gratuity scheme and an amount of Rs. 15.62 lacs has been deposited as part premium to SBI Life Insurance Co. Ltd. Moreover, there are few employees who have completed 5 years of continuous service with the Company thereby reducing the total retirement beneft liabilities and the provisions made in this regard are adequate.

b) ARSS- HCIL- Adhikaria, an international JV, a partner of the Company, who prepare their accounts in a different basis for a different period than our Company. As their accounts are not yet fnalised, the proft from the JV has been considered on provisional basis. This is beyond the control of the management and the Company does not expect any material deviations in the audited accounts.

7. Dividend:

Your Directors have declared a dividend (interim) of Rs. 2/- per equity share (last year Rs. 1/- per equity share) for the fnancial year ended March 31,2010, amounting to Rs. 347.31 Lacs (inclusive of dividend tax of Rs. 50.45 lacs) which was the highest ever payout by the Company.

The Board of Directors has considered the interim dividend declared as the fnal dividend for the fnancial year ended March 31,2010.

8. Directors:

Mr. S. R. Chaudhuri and Mr. S.C. Parija retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.

Brief resumes of the Directors proposed to be re-appointed, nature of their experience and names of the companies in which they hold directorship and membership are provided in the Notice for convening the Annual General Meeting.

9. Particulars of Employees:

As required under the provision 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 given below:

Sl Name of the Designation Quali- Age Date of no. person fication in Joining years 1. Subash Agarwal Executive Chairman B. Com 45 05/11/2007 2. Rajesh Agarwal Managing Director B.E., Civil 37 01/10/2006 3. Sunil Agarwal President & CEO B. Com 34 01/04/2005 4. Anil Agarwal Sr. VP & COO B.Com 41 01/04/2006 5. S. K. Singla VP & Project Head B.Tech,Civil46 01/07/2006 6. P. P. Biswas Project Director B.E., Civil 64 01/04/2008

Sl Name of the Experience Gross no. person (No. of years) Remuneration (Rs.) 1. Subash Agarwal 19 1,20,00,000 2. Rajesh Agarwal 14 60,00,000 3. Sunil Agarwal 11 41,47,000 4. Anil Agarwal 15 41,47,000 5. S. K. Singla 16 50,35,000 6. P. P. Biswas 38 25,20,600

10. Responsibility Statement:

Pursuant of Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company confrms that:

i) in preparation of Annual Accounts, the applicable Accounting Standards issued by The Institute of Chartered Accountants of India have been followed by the Company and there has been no material departure.

ii) the Directors have selected such Accounting Policies and applied them consistently. The judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the CompanyÃs state of affairs as on 31st March, 2010 and of the proft of the Company for the year ended on that date.

iii) the Directors have taken Proper and suffcient care for maintenance of adequate accounting records in accordance with the provisions of Section-209 of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities and

iv) the Directors have prepared the Annual Accounts on a going concern basis.

11. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo etc. U/S 217 (1) (e):

During the year under review, the Company has taken adequate measures for conservation of energy and did not opt for any technology absorption whatsoever in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the Report of Board of Directors ) Rules, 1988.

The Company has neither earned any income nor incurred any expenditure in foreign currency during the year ended 31st March, 2010.

12. Public Deposits:

Your Company has not invited any deposits from public and shareholders. So, the provisions of the Section 58A of the Companies Act, 1956 are not attracted.

13. Corporate Governance:

The Company adopted best ethical business practices within the regulatory framework which is the essence of good corporate governance. Importantly, good corporate governance calls for accountability of the persons who are the helm of affairs of the Company and it also brings benefts to all stakeholders of the Company such as investors, customers, employees and the society at large. Your Company continues to believe in such business practices and has been extremely transparent in providing reliable fnancial information in all its business transactions and ensuring strict compliance of all applicable laws.

Your Company has adopted the requirement of corporate governance as prescribed under Clause 49 of the Listing Agreement and a separate section titled ÃCorporate GovernanceÃ has been included in the Annual Report along with ÃManagement Discussion and Analysis ReportÃ.

14. Industrial Relation:

Employee relations continued to be cordial throughout the year. The whole-hearted support of employees and a sense of belongingness with the organisation and solidarity with the management of the Company have helped to achieve better performance during the year.

15. Acknowledgement:

Your Directors would like to express their appreciation for assistance and co-operation received from the fnancial institutions, banks, Government authorities, customers and members during the year under review. Your Directors also place on record their deep sense of appreciation for the committed services by the executives, staffs and workers of the Company.

For and on behalf of the Board of Directors Place: Tirupati Subash Agarwal Dated: 27th April, 2010 Chairman

Mar 31, 2009

The Board of Directors has pleasure in presenting the ninth Annual Report together with the Audited Accounts of the company for the year ended 31st March, 2009.

1. FINANCIAL REPORTS

Rs. in crores

2008-09 2007-08

Revenue 624.38 313.67

Profit before Depreciation, Interest & Tax 104.96 51.21

Less: Depreciation 7.35 3.95

Less: Interest 27.02 9.42

Profit Before Tax 70.59 37.84

Less: Income Tax For current year 19.48 10.48

(including provision for Deferred Tax and Fringe Benefit Tax)

For earlier years 1.03 0.27

Profit After Tax 50.09 27.10

Surplus Brought Forward 40.23 14.91

Profit Available for Appropriation 90.31 42.01

Transfer to General Reserve 2.50 0.31

Utilisation on Bonus issue Dividend & Dividend Tax 1.47 1.47

Surplus Carried Forward 86.34 40.23

Earning per Share (in Rs.) (equity shares of face value of Rs. 10) 39.90 23.77

2. OPERATIONS

It gives me immense pleasure to bring into your kind attention that the Company has recorded the highest ever turnover of Rs. 624.38 Crores as compared to Rs. 313.67 Crores for the previous year. The Company has also earned a substantially higher after tax profit of Rs. 50.09 Crores for the year as against Rs. 27.10 Crores in the previous year.

During the year, the Company has executed many prestigious contracts and has also been awarded with a number tenders for execution. Your Companys operating parameters have also shown further improvements. During the year your Company has executed projects on Pan India basis and expects to grow at a faster rate.

3. ORDER BOOK

The Company has been awarded with work worth more than Rs. 2,500 crore, which includes the following major assignments:

a) Construction, rehabilitation and widening of Cuttack - Paradeep road, Orissa with a contract value of Rs. 208.27 crores.

b) Construction of road bed, bridges, facilities and general electrification for the Construction of new broad gauge line between Haridaspur and Paradeep, Orissa, with a contract value of Rs. 110.24 crores.

c) Construction of BRTS Corridor and Development of road, Jaipur Development Authority, Rajasthan, having a contract value of Rs. 159.02 crores.

d) Construction and four laning of the Singaperumal - Koil - Sriperumpudur road, Tamil Nadu, with a contract value of Rs. 102.26 crores.

e) Construction of new broad gauge line, bridges, earthwork cuttings, road over bridges, road under bridges and sub ways between Salem-Karur, Chennai, having a contract value of Rs. 51.39 crores.

f) Irrigation and canal work for construction of Bahragora distributry main canal, earthwork, lining in Jharkhand, with a contract value of Rs. 35.63 crores.

g) JSPL, Angul Project-Work Order for execution of Rail Infrastructure Work, Orissa, with a contract Value of Rs.261.00 Crores.

h) Construction for widening and strengthening of existing carriageway to two lane for chandbali-Bhadrak- anadpur (Km 0/0 to Km 45/0 of SH-9 and Km 0/0 to Km 50/0 of SH-53), Orissa, having a contract value of Rs.216.23 Crores.

i) Widening and Strengthening of Existing Carriageway to 2 lane Bhawanipatna to Khariar (2/0 Km to 70/0 Km SH-16), Orissa, with a contract Value of Rs.105.51 Crores.

j) Construction for widening and strengthening of existing carriageway to two lane for Berhampur to taptapani (Km 0/0 to Km 41/0 of SH-17) Orissa, with a contract Value of Rs.81.97 Crores.

4. IPO

The Company had filed the Draft Red Herring Prospectus (DRHP) with SEBI on 25/02/2008. It is a matter of pleasure that SEBI vide their letter dated 2"d January, 2009 have approved the DRHP and have given their consent to bring the IPO within one year from the date of approval. The Company is in the process of compiling with the essential prerequisites of IPO and the same is expected to materialize shortly.

5. AUDITORS

The auditors, M/s. PA. and Associates, Chartered Accountants who retire at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

6. REPORT OF AUDITORS

The notes on accounts and observations of the Auditors in their report on the accounts of Company are self explanatory except clause no. 4.2 (a) and (b) which call for further explanation. They are as follows;

a) Provision of Rs. 14.00 Lakhs on account of retirement gratuity has been made on adhoc basis in the absence of actuarial valuation which is being undertaken by the Company. The Company also proposes to create a Trust for the employees to implement the gratuity scheme expected to be completed within next year. Moreover, there are very few employees who have completed 5 years of service with the Company thereby reducing the total retirement benefit liabilities and the provisions made are adequate.

b) ARSS- HCIL- Adhikaria, an international JV, a partner of the Company, who prepare their accounts in a different basis for a different period than our Company. As their accounts are not yet finalized, the profit from the JV has been considered on provisional basis. This is beyond the control of the management and the Company does not except any material deviations in the audited accounts.

7. DIVIDEND

Your Directors have recommend a dividend of 10% on Equity Shares. The outgo on account of the dividend will be Rs. 125.54 Lacs and dividend distribution tax will be Rs. 21.35 Lacs, aggregating to Rs. 146.89 Lacs. The dividend is tax free in the hands of the share holders as the tax on dividend would be borne by the Company.

8. DIRECTORS

Pursuant to Section 256 of the Companies Act, 1956 read with the clause 129 of the Articles of Association of the Company, Mr. S.S. Chakraborty and Mr. Dipak Kumar Dey retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment.

Brief resumes of the Directors proposed to be reappointed, nature of their experience and names of the companies in which they hold directorship and membership are provided in the Notice for convening the Annual General Meeting.

9. PARTICULARS OF EMPLOYEES

During the financial year 2008-09, there were three employees in the Company drawing a gross remuneration in excess of the limit prescribed as per Section-217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975. Details of which are given below;

Sl Name of the Age Designation Gross No person in Remuneration years (Rs.)

1. Mr. SubashAgarwal 44 Executive 60,00,000 Chairman

2. Mr. RajeshAgarwal 36 Managing Director 32,80,000

3. Mr. B.L. Bisnoi 46 Project Head 24,00,000

Name of the Experience Date of person (No of years) commencement of employment

Mr. Subas Agarwal 18 05/11/2007

Mr. Rajesh Agarwal 13 01/10/2006

Mr. B.L. Bisnoi 22 01/10/2008

10. RESPONSIBILITY STATEMENT

In pursuance of Section 217 (2AA) of the Companies Act, 1956, the Directors make the following responsibility statements:

i) that In the preparation of Annual Accounts, the applicable Accounting Standards issued by The Institute of Chartered Accountants of India have been followed by the Company along with proper explanation relating to material deviations( if any).

ii) that the Directors have selected such Accounting Policies and applied them consistently and made judgment 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 the end of the financial year 2008-2009 and of the profit of the Company for that period,

iii) that the Directors have taken Proper and sufficient care for 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 frauds and other irregularities and

iv) that the Directors have prepared the Annual Accounts on a going concern basis.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS and OUTGO ETC. U/S 217(1)(e) During the year under review, the Company has taken adequate measures for conservation of energy and also has not absorbed any technology absorption whatsoever in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988.

The Company has neither earned nor incurred any expenditure in foreign currency during the year ended 31* March2009.

12. PUBLIC DEPOSITS

Your Company has not invited any deposits from public and Shareholders. So, the provisions of the Section 58A of the Companies Act, 1956 are not attracted.

13. CORPORATE GOVERNANCE

Your Company has voluntarily adopted the requirement of corporate governance as prescribed under clause 49 of the Listing Agreement even though it is not applicable to the Company and a separate section titled

"Corporate Governance" has been included in the Annual Report along with Management Discussion and Analysis Report and Shareholders information report.

14. INDUSTRIAL RELATION

Employee relations continued to be cordial throughout the year. The whole-hearted support of employees and a sense of belongingness with the organization and solidarity with the management of the Company have been able to achieve better performance during the year.

15. ACKNOWLEDGEMENT

The Board of Directors acknowledge with deep appreciation the co-operation received from the Govt, of Orissa particularly the Ministry of Works, Govt, of India and Ministry of Railways. We are also highly appreciative of the support rendered by our bankers, employees and all business associates of the Company. Your Directors also thankfully acknowledge the faith reposed by all the investors, in respect of which the contribution by State Bank of India deserves a special mention.

The Board wishes to place on records its appreciations for efforts and contributions made by the employees at all level, which made the significant achievement by your Company possible.

For and on behalf of the Board of Directors

Place: Bhubaneswar (Subash Agarwal)

Dated: The 8th day of May, 2009 Chairman

Mar 31, 2008

The Board is pleased to present the eighth Annual Report together with the Audited Accounts for the year ended 31st March, 2008

Rs. in lacs

1. FINANCIAL REPORTS

2007-08 2006-07

Revenue 3,15,50.32 1,33,83.21

Profit before Depreciation, Interest & Tax 5,120.67 1,949.95

Less: Depreciation 395.01 175.10

Less: Interest 941.63 375.59

Profit Before Tax 3,784.03 1,399.26

Less: For current year Income Tax 1,047.66 451.82

(including provision for Deferred Tax and Fringe Benefit Tax)

For earlier years 26.58 -

Profit After Tax 2,709.79 947.45

Surplus Brought Forward 1,491.32 771.93

Profit Available for Appropriation 4,201.10 1,719.38

Transfer to General Reserve 31.39 -

Utilisation on Bonus issue - 228.06

Dividend & Dividend Tax 146.88 -

Surplus Carried Forward 4,022.84 1,491.32

Earning per Share (equity shares of face value of Rs. 10) 23.77 10.50

2. OPERATIONS

For the year the Company recorded the highest ever turnover of Rs. 312.58 Crore as compared to Rs. 133.01 Crore for the previous year. The Company also earned a substantially higher after tax profit of Rs. 27.10 Crore for the year as against Rs. 9.47 Crore in the previous year.

3. PROJECTS UNDER IMPLEMENTATION

During the year under review, the overall economic situation continued to be buoyant which provided tremendous opportunities for expansion. The Company has been awarded with works worth more than Rs. 1,200 crore, which includes the following major assignments:

a) Construction, rehabilitation and widening of Cuttack - Paradeep road, Orissa. Contract value Rs. 208.27 crores.

b) Construction of road bed, bridges, facilities and general electrification for the Construction of new broad gauge line between Haridaspur and Paradeep, Orissa. Contract value Rs. 110.24 crores.

c) Construction of BRTS Corridor and Development of road, Jaipur Development Authority, Rajasthan. Contract value Rs. 159.02 crores.

d) Construction of new broad gauge line, bridges, earthwork cuttings, road over bridges, road under bridges and sub ways between Salem-Karur, Chennai. Contract value Rs. 51.39 crores.

e) Irrigation and canal work for construction of Bahragora distributry main canakearthwork, lining in Jharkhand. Contract value Rs. 35.63 crores

4. IPO

The Company has filed Draft Red Herring Prospects (DRHP) with SEBI for IPO which is expected to be launched in the month of August2008. Meanwhile the Company has also filed application with NSE and BSE to get the approval for listing. BSE has already given in principle approval, subject to certain statutory compliances.

5. PREFERENTIAL ISSUE

As approved by the members in their Extra-Ordinary General Meeting held on 28* December,2007 the Company has issued and allotted on 4* January,2008 on Preferential Basis, 10,00,000 Equity Shares of Rs. 10/- each for cash at a premium of Rs. 305/- per share to State Bank of India. Besides this the Company has also issued Equity Shares at different dates at different premiums to various investors.

6. AUDITORS

The auditors, M/s. PA. & Associates, Chartered Accountants who retire at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

7. DIVIDEND

The Board of Directors declared interim dividend of 10% on equity capital, which has already been paid to the share holders in terms of approval of the Board in their meeting held on 14* March2008. Your Directors express their inability to propose further dividend owing to substantial investment in fixed assets for the existing works in hand.

8. DIRECTORS

Mr. Devan Jitendra Mehta was appointed as a Director of this Company on 26* July 2007 and resigned effective from 18* September, 2007 due to his pre occupation. Mr. Sunil Agarwal, Mr. B. L. Agarwal and Mr. S. K. Singla resigned from the Board effective from 31st October, 2007 as a part of restructuring process of the Board of Directors to make it broad based. The Board wishes to place on record its appreciation for the valuable contribution made by them during their tenure as member of the Board.

In accordance with the Articles of Association of the Company, Mr. S.K.Pattanaik retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re- appointment.

Mr.Subash Agarwal was appointed as an Additional Director of the Company w.e.f. 5* November2007 till conclusion of the ensuing Annual General Meeting. The Company has received a notice under Section 257(1) of the Companies Act, 1956, in writing from a member proposing the candidature of Mr. Subash Agarwal for the office of Director not liable to retire by rotation along with the deposit of Rs 500/- each prescribed under the said section.

Dr.B.Samal, Mr.S.C.Parija, Mr. S.R.Choudhuri and Mr. Dipak Kumar Dey were appointed as an Additional Directors of the Company w.e.f. 27* November2007 upto the conclusion of the next Annual General Meeting . The Company has received notices under Section 257(1) of the Companies Act, 1956 in writing from a member proposing the candidature of Dr.B.Samal, Mr.S.C.Parija, Mr. S.R.Choudhuri and Mr. Dipak Kumar Dey for the office of Director liable to retire by rotation along with deposits of Rs 500/- each prescribed under the section.

9. PARTICULARS OF EMPLOYEES

During the financial year 2007-08 there were two employees in the Company drawing a gross remuneration in excess of the limit fixed as per Section-217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975. Details of which are given below;

Sl Name of the Age Designation Gross No person in Remuneration years (Rs.)

1. Mr. Subash Agarwal 43 Executive 10,00,000 Chairman

2. Mr. Rajesh Agarwal 35 Managing Director 29,70,000

Name of the Experience Date of Previous person (No of years) commencement Employment of employment

Mr. Subash Agarwal 17 05/11/2007 Nil

Mr. Rajesh Agarwal 12 01/10/2006 Nil

10. RESPONSIBILITY STATEMENT

In pursuance of Section 217 (2AA) of the Companies Act, 1956, the Directors make the following responsibility statement:

i) That In the preparation of Annual Accounts, the applicable Accounting Standards have been followed by ARSS Infrastructure Projects Ltd. along with proper explanation relating to material departures except AS -15, Accounting for Retirement Benefits in the Financial Statements of Employers and AS-27, Financial Reporting of Interests in Joint Venture issued by the Institute of Chartered Accountants of India,

ii) That The Directors had selected such Accounting Policies and applied them consistently and made judgment 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 the end of the financial year 2007-2008 and of the profit of the Company for that period,

iii) That the Directors had taken Proper and sufficient care for 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 frauds and other irregularities and

iv) That the Directors had prepared the Annual Accounts on a going concern basis.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO ETC. U/S217(l)(e).

During the year under review the Company has taken adequate measures for conservation of energy and also has not absorbed any technology absorption whatsoever in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988.

The Company has neither earned nor incurred any expenditure in foreign currency during the year ended 31*March2008.

12. PUBLIC DEPOSITS

Your Company has not invited any deposits from public and Shareholders in accordance with the Section 58 A of the Companies Act, 1956.

13. AUDIT COMMITTEE

The Board of Directors of the Company have constituted an Audit Committee, as per the provisions of Section 292A of the Companies Act 1956. in their meeting held on November 27, 2007.

The Committee consists of 3 members:

i. Mr. Swarup Chandra Parija (Chairman)

ii. Dr.BidhubhusanSamal

iii. Mr.SujitRanjanChaudhuri

All the above members of the Audit Committee are Non-Executive Independent Directors.

14. SHAREHOLDERS GRIEVANCE COMMITTEE

Your Company has constituted a Shareholders Grievance Committee. The constitution of the Committee was approved by a meeting of the Board of Directors held on November 27, 2007.

The Committee consists of 3 members:

i. Dr.BidhubhusanSamal (Chairman)

ii. Mr.SujitRanjanChaudhuri

iii. Mr. Dipak Kumar Dey

All the above members of the Shareholders Grievance Committee are Non-Executive Independent Directors.

15. CORPORATE GOVERNANCE

Your Company has voluntarily adopted the requirement of corporate governance as prescribed under clause 49 of the Listing Agreement and a separate section titled "Corporate Governance" has been included in the Annual Report along with Management Discussion and Analysis Report and Shareholders information report.

16. INDUSTRIAL RELATION

Employee relations continued to be cordial throughout the year. The whole-hearted support of employees and a sense of belongingness with the organization and solidarity with the management of the Company has been able to achieve better performance during the year.

17. ACKNOWLEDGEMENT

The Board of Directors acknowledge with deep appreciation the co-operation received from the Govt, of Orissa particularly the Ministry of Works, Govt, of India, particularly Ministry of Railways, Employees and all business associates of the Company. Your Directors also thankfully acknowledge all the Investors more particularly the State Bank of India for reposing faith in the Company.

The Board wishes to place on records its appreciations for efforts and contributions made by the employees at all level which made possible the significant achievement by your Company.

For and on behalf of the Board of Directors

Place: Bhubaneswar (Subash Agarwal)

Dated: The 5th day of May, 2008 Chairman

Mar 31, 2007

The Board of Directors pleased to present herewith the 7th Annual Report on the activities of your Company, together with the Audited Accounts for the Financial Year 2006-2007.

1. Operating Result

The operating results of the company for the year are as follows :

(Rs. in lakhs)

For the year For the year Ended Ended 31.03.07 31.03.06 (Rs. in lacs) (Rs. in lacs)

Profit/(Loss) for the year after meeting all expenses 1574.36 544.55 But before providing for depreciation and tax

Depreciation for the year 175.10 116.03

Profit / (Loss) for the year 1399.26 428.52

Less : Provision for Income Tax 347.03 95.93

Less/ADD : Deferred Tax 31.94 4.39

: Fringe benefit tax 5.58 2.31

Profit/(Loss) after Tax 1014.71 325.88

Add : Profit brought forward from Previous year 771.93 245.69

Less : Adjustment of tax of previous year 67.26 0.11

ADD : Depreciation written off - 200.46

Balance of profit/(Loss) carried forward to next year account 1719.38 771.93

2. Performance & Highlights

Your company has completed yet another significant year, one in which it has sustained and consolidated its position in the industry, amidst flux in every segment of the business environment, notwithstanding the fact that the overall trading volume this year 2006-2007 (including other income) has been Rs.134 Crores as compared to Rs. 61 Crores (including other income) in the financial year 2005-06, Your company earned a profit before tax (after interest and depreciation) of Rs. 14.00 Crores as against Rs. 4.29 Crores in the previous year.

The year 2006-2007 was a year of reinforcement, securitizing our future. We began preparations keeping market developments in mind. Then we moved on to what needed to be addressed within our organizational periphery and what could be the outcome. And so the year 2006-2007 has led to a phase of wherein we will see ARSS move from Better among the best. In the coming years we hope to make that quantum leap that we have planned. The anticipation is there and so is the preparation. We already have a fair visibility.

The ARSS group has laid out big expansion plans in the infrastructure sector. It has set up four crusher plants in Tapang, (old plant), Tapang (New plant) - Dist. Khurda, Chadeihera (Dist. Dhenkanal), Bhanjanagar (Dist. Ganjam) and one Bleaching plant at Balugaon (Dist. Khurda) in the State of Orissa.

India has been witnessing phenomenal growth and all set to become a world power in the next two decades. There is an accelerating boom in the infrastructure sector, especially road, power, steel, and bridge work, jetty work industrial plant and other works. Indian infrastructure needs to match with those of the developed nations. What has been achieved till date is just drop of ocean the real boom is yet to come.

The ARSS group is keen to participate in this growth phase and utilize its experience and strengths. The GROUPÃs vision is to be a large respected player in the infrastructure development sector by creation of integrated facilities in the country.

3. Statement pursuant to section 217(2A) of the companies Act 1956 read with the companies (particulars of employees) rules 1975 and forming part of the directors report for the year ended 31st March 2007.

During the financial year 2006-07 two such employees were in respect of gross remuneration in excess of Rs.24.00 lacs per annum or Rs.2.00 lacs per month was employed either for full or part of the year as per Section-217 (2A) of the Companies Act, 1956 read with the companies (Particular of Employees) Rules, 1975.

Sl. Name and Age in Designation Remuneration No qualification Years received

1. Mr. Rajesh 34 Managing 29,70,000 Agarwal Director

2. Mr. Sunil 32 Whole time 28,50,000 Agarwal Director

Name and Experience Date of Share qualification (No of years) commence holding ment of % employment

Mr. Rajesh 10 01-10-2006 5.48 Agarwal

Mr. Sunil 6 01-10-2006 3.31 Agarwal

4. Auditors

The Auditors, Messers P.A. & Associates, Chartered Accountants, retire at the next Annual General Meeting and being eligible, offer themselves for re-appointment. Your Company has received a certificate from the Auditors to the effect that their appointment, if made, would be within the limits as prescribed under Section 224(1B) of the Companies Act, 1956. The Members are requested to appoint Auditors for the current year at the Annual General Meeting and to authorize the Board of Directors to fix their remuneration to be mutually agreed upon between the Board and the Auditors.

5. Dividend

With a view to conserve the liquid resources and to strengthen the companyÃs activities, The director have decided to written the internal accruals and therefore do not recommend any dividend for the financial year 2006-2007.

6. Responsibility Statement

In pursuance of Section 217 (2AA) of the Companies Act 1956, the Directors make the following responsibility statement:

i) That in the preparation of Annual Accounts, the applicable accounting Standards have been followed by ARSS Infrastructure Projects Ltd. along with proper explanation relating to material departures.

ii) That the Directors has selected such Accounting Policies and applied them consistently and made judgment 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 the end of the financial year 2006- 2007 and of the profit of and loss of the company for that period.

(iii) That the Directors had taken Proper and sufficient care for 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 frauds and other irregularities and

(iv) That the directors had prepared the Annual Accounts on a going concern basis.

7. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo etc. 217 (1) (e). Particulars with regards to conservation of energy, technology absorption, foreign exchange earning & outgo in accordance with the provisions of Section 217 (1) (e) of the companies Act 1956 read with the companies (Disclosures of particulars in the Report of Board of Directors) rules 1988 is as follows.

Information Pursuant To Section 217(1) (e) of the Companies Act 1956 Read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988.

Your Company was running by two numbers of DG Sets of 225KVA Genset consuming HGD and also electricity provided by CESCO.

During the financial year 2006-2007 the company has not hired any technology whatsoever. The company has neither earned nor incurred any expenditure in foreign exchange during the financial year 2006-2007.

8. Public Deposits :

Your company has not invited any deposits to public - Shareholders in accordance with the Sec. 58 A of the Companies Act 1956.

9. Board of Diectors :

The Board of Directors of the company comprises;

1. Mr. Rajesh Agarwal Chairman cum - Managing Director

2. Mr. Sunil Agarwal Whole time Director

3. Mr. Soumendra Keshari Pattanaik Whole time Director

4. Mr. Shiv Kumar Singla Non executive Director

5. Mr. Bajrang Lal Aggarwal Non executive Director

6. Mr. Sudhendu Sekhar Chakraborty Non executive Director

7. Mr. Deven Jitendra Mehta Non executive Director

In accordance with the Articles of Association of the company Mr. Shiv Kumar Singla retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for reappointment.

Mr. Deven Jitendra Mehta was appointed as Additional Director of the Company w.e.f. 26th July, 2007 upto the conclusion of the ensuing Annual General Meeting. The company has received a notice under section 257(1) of the companies act 1956, in writing from a member proposing the candidature of Mr. Deven Jitendra Mehta for the office of director liable to retire by rotation along with the deposit of Rs. 500/- as prescribed under the section.

Your Board of Directors have a primary role of trusteeship to protect and enhance shareholder value through strategic supervision of the Company by providing direction and exercising the appropriate control. Your Board includes eminent professionals who have excelled in their respective areas of specialization and comprises professionals drawn from management, financial and other fields.

The Board consists of a total of seven Directors of which three are Whole-time Directors and four are non whole time and independent Directors. The non whole time Directors are professionals with expertise and experience in general corporate management, finance, banking and other allied fields. The companyÃs philosophy of governance is aimed at assisting the top management in the efficient conduct of its business and fulfilling its obligations towards the government, its shareholders, employees and its stakeholders, guided by a strong emphasis on transparency, accountability and integrity.

Over the years, the company has shown a high level of commitment towards effective governance and has maintained high business ethics. The Company believes that its operations and actions must serve the underling goal of enhancing the interest of its stakeholders over a sustained period of time in a socially responsible way.

Your Board believes that corporate governance is a powerful medium of sub-serving the long term interests of its stakeholders for the attainment of transparency, accountability and equity in all facets of its operations by enhancing and sustaining its corporate vale through growth and innovation. Towards this end, the Board has adopted the following policies and principles concerning its composition, deliberations, performance and other related areas.

10. Audit Committee

As required under Section 292A of the Companies Act, 1956, the Board Constituted an Audit Committee on 26th June, 2007. The Committee consists of three Directors out of which two Directors are non-executive. The role and terms of reference of the Audit Committee cover the areas under Section 292A of the Companies Act, 1956.

The composition of Audit Committee of the Board is given below : Name of the Member Status

1. Mr. Soumendra Keshari Pattanaik Director (Finance)

2. Mr. Shiv Kumar Singla Non executive Director

3. Mr. Bajrang Lal Aggarwal Non executive Director

11. Board Procedure

The Annual calendar of meetings is agreed upon at the beginning of each year. The meetings are governed by a detailed agenda. All major issues included in the agenda are backed up by comprehensive background information to enable the Board to take informed decisions. The agenda papers, containing detailed notes on various agenda items and other information, which would enable the Board to discharge its responsibility effectively, is circulated in advance to the Directors. The Managing Director briefs the Board at every meeting on the overall performance of the Company.

(A) Decision Making Process :

With a view to professionalize all corporate affairs and setting up systems and procedures for advance planning for matters requiring discussion/decisions by the Board, the company has appropriate guidelines for the meetings of the Board of Directors. These Guidelines seek to systematize the decision making process at the meetings of Board in an informed and efficient manner.

(B) Scheduling and selection of Agenda items for Board Meetings

(i) The meetings are being convened by giving appropriate notice after obtaining the approval of the Chairman of the Board. Detailed agenda, management reports and other explanatory statements are circulated in advance amongst the members for facilitating meaningful informed and focused decisions at the meetings. To address specific urgent needs, meetings are also being called at short notice. The Board also authorized to pass Resolution by Circulation for all such matters which are of utmost urgent nature.

(ii) Where it is not practicable to attach any document or agenda is of confidential nature, the same is placed on the table at the meeting with the approval of the Chairman. In special and exceptional circumstances, additional or supplemental item (s) on the agenda are permitted. Sensitive subject matters are discussed at the meeting without written material being circulated.

(iii) The agenda papers are prepared by the concerned officials and submitted to concerned functional Heads for obtaining approval of the CMD. Duly approved agenda papers are circulated amongst the Board members.

(iv) The meetings are usually held at the CompanyÃs registered office in Bhubaneswar, at Plot No. 38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar - 10, Orissa.

(v) The members of the Board have complete access to all information of the company. The Board is also free to recommend inclusion of any matter in agenda for discussion. Senior management officials are called to provide additional inputs to the items being discussed by the Board, as and when necessary.

(C) Recording minutes of proceedings at the Board Meeting.

Minutes of the proceedings of each board meeting are recorded. The minutes of the proceedings of meetings are entered in the Minutes Book.

(D) Follow-up mechanism.

The guidelines for the Board facilitate an effective post meeting follow-up, review and reporting process for the action taken on decisions of the Board. Actions taken report (ATR) on the areas of concern are presented before the Board.

(E) Compliance.

While preparing the agenda notes, it is ensured that all the applicable provisions of law, rules, guidelines etc. are adhered to. The company ensures compliance of all applicable provisions of the Companies Act, 1956.

(F) Financial Year

ARSS Infrastructure Projects Ltd. Follows the financial calendar from 1st April to 31st March.

ACKNOWLEDGEMENT

The Board of Directors acknowledged with deep appreciation the cooperation received from the Govt. of Orissa particularly the Ministry of Power, State Electricity Board, Govt. of India, particularly Ministry of Railways, South Eastern Railway.

Your Directors cherish the continued support extended by customers, investors, bankers, business associates, and various governmental and regulatory agencies. Your Directors commend the dedication of the Associates at all levels in enabling the Company to achieve phenomenal growth during the year.

The Board wishes to place on records its appreciations for efforts and contributions made by the employees at all level which made possible the significant achievement by your company.

For and on behalf of the Board of Directors

(Chairman & Managing Director) Place : Bhubaneswar Dated : 26-07-2007

Mar 31, 2006

The last year was an eventful year for ARSS as your Company attained new heights on several fronts. The momentum in the growth that was evident over the last few years has gained in strength.

It gives me immense pleasure to present to you, on behalf of the Board of Directors, the 6th Annual Report on the activities of your company, together with the Audited Accounts for the Financial Year 2005-2006.

1. Operating Result :

The operating results of the company for the year are as follows :

(Rs. in lakhs)

For the year For the year Ended Ended 31.03.06 31.03.05 (Rs. in lacs) (Rs. in lacs)

Profit/(Loss) for the year after meeting all expenses 544.54 318.91

But before providing for depreciation

Depreciation for the year 116.03 148.78

Profit / (Loss) for the year 428.51 170.13

Less : Provision for Income Tax 95.93 50.55

Less/ADD : Deferred Tax 4.39 12.70

: Fringe benefit tax 2.31

Profit/(Loss) after Tax 325.88 106.88

Add : Profit brought forward from Previous year 245.69 139.01

Less : Adjustment of tax of previous year 0.11 0.20

ADD : Depreciation written off 200.46

Balance of profit/(Loss) carried forward to next year account 771.92 245.69

2. Performance & Highlights

Your company has completed yet another significant year, one in which it has sustained and consolidated its position in the industry, amidst flux in every segment of the business environment, notwith-standing the fact that the overall trading volume this year 2005-2006 (including other income) has been Rs. 60,76,47,597.00 as compared to Rs. 29,68,55,644.00 (including other income) in the financial year 2004-05, Your company earned a profit before tax (After interest and depreciation) of Rs. 4,28,50,664.00, as against Rs.1,70,13,036.00 in the previous year.

3. Particulars of the Employees

During the financial year 2005-06 no employee was in respect of gross remuneration in excess of Rs.24.00 lacs per annum or Rs. 2.00 lacs per month was employed either for full or part of the year as per Section-217 (2A) of the Companies Act, 1956 read with the companies (Particular of Employees) Rules, 1975.

4. Auditors

The auditors Messers K.C. Jena & Co. Chartered Accountants was appointed as Statutory Auditors of the Company for the Financial Year 2005-2006 by the Shareholders in the 5th Annual General Meeting of the Company. The Statutory Auditors have audited the Accounts of the Company for the year ended 31st March, 2006. Audited Accounts together with the Auditors Report thereon are annexed to this Report. It is gratifying to note that there are no qualifying remarks from statutory Auditors on the Accounts of the Company. With substantial growth in your Companys operations the Board of Directors recommends the appointment of a leading audit firm. The tenure of the present auditors, M/s K.C. Jena & Co, Chartered Accountants, expires at the conclusion of the ensuing Annual General Meeting. Your Board of Directors has recommended the appointment of M/s P.A. & Associates, one of the leading audit firms as statutory auditors of the Company. The appointment of M/s P.A. & Associates is appearing as Item No. 3 in the Notice of the ensuing Annual General Meeting requiring special notice as per Section 190 of the Companies Act, 1956.

The Board would record their appreciation of the assistance and guidance provided by them during their long tenure with the company.

The appointment of Messers P.A. & Associates, Chartered Accountants as Auditors of the company from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting of the company on such remuneration as may be fixed by the board.

Messers P.A. & Associates, Chartered Accountants have furnished a certificate to the company that their appointment will be in accordance with the limits specified in subsection (1B) of Section 224 of the companies Act 1956. You are requested to consider to their appointment.

5. Dividend

With a view to conserve the liquid resources and to strengthen the companys activities. The director have decided to written the internal accruals and therefore do not recommend any dividend for the financial year 2005-2006.

6. Responsibility statement

In pursuance of Section 217 (2AA) of the Companies Act 1956, the Directors make the following responsibility statement :

i) That in the preparation of Annual Accounts, the applicable accounting Standards have been followed by ARSS Infrastructure Projects Ltd. along with proper explanation relating to material departures.

ii) That The Directors had selected such Accounting Policies and applied them consistently and made judgment 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 the end of the financial year 2005-2006 and of the profit of and loss of the company for that period.

iii) That the directors had taken proper and sufficient care for 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 frauds and other irregularities and

iv) That the directors had prepared the Annual Accounts on a going concern basis.

During the financial year 2005-2006 the company has not hired any technology whatsoever.

The company has neither earned nor incurred any expenditure in foreign exchange during the financial year 2005-2006.

8. Public Deposits :

Your company has not invited any deposits to public-Shareholders in accordance with the Sec. 58 A of the Companies Act 1956.

ACKNOWLEDGEMENT

The Board of Directors acknowledged with deep appreciation the cooperation received from the Govt. of Orissa particularly the Ministry of Power, State Electricity Board, State Govt., Govt. of India, particularly Ministry of Railways, South Eastern Railway.

Your Directors cherish the continued support extended by customers, investors, bankers, business associates, and various governmental and regulatory agencies. Your Directors commend the dedication of the Associates at all levels in enabling the Company to achieve phenomenal growth during the year.

The Board wishes to place on records its appreciations for efforts and contributions made by the employees at all level which made possible the significant achievement by your company.

For and on behalf of the Board of Directors

Sd/-

( Chairman & Managing Director)

Place : Bhubaneswar Dated : 02-09-2006

Mar 31, 2005

It gives me pleasure to present to you, on behalf of the Board of Directors, the 5th Annual Report on the activities of your company, together with the Audited Accounts for the Financial Year 2004- 2005.

1. Operating Result

The operating results of the company for the year are as follows :

(Rs. in lakhs)

For the year For the year Ended Ended 31.03.05 31.03.04 (Rs. in lacs) (Rs. in lacs)

Profit/(Loss) for the year after meeting all expenses 318.91 163.54 But before providing for depreciation

Depreciation for the year 148.78 75.44

Profit / (Loss) for the year 170.13 88.10

Less : Provision for Income Tax 50.55 24.81

Less : Deferred Tax 12.70 6.63

Profit / (Loss) after Tax 106.88 56.66

Add : Profit brought forward from Previous year 139.01 82.36

Less : Adjustment of tax of previous year 0.20 -

Balance of profit / (Loss) carried forward to next year account 245.69 139.01

2. Performance & Highlights

Your company has completed yet another significant year, one in which it has sustained and consolidated its position in the industry, amidst flux in every segment of the business environment, notwith-standing the fact that the overall trading volume this year (including other income) has been Rs. 29,57,77,455.00 as compared to Rs. 13,07,96,435.00 (including other income) in the financial year 2003-04, Your company earned a profit before tax (After interest and depreciation) of Rs. 1,70,13,036.00, as against Rs.88,09,528.00 in the previous year.

3. Particulars of the Employees

During the financial year 2004-05 no employee was in respect of gross remuneration in excess of Rs.24.00 lacs per annum or Rs. 2.00 lacs per month was employed either for full or part of the year as per Section-217 (2A) of the Companies Act, 1956 read with the companies (Particular of Employees) Rules, 1975.

4. Auditors & Auditors Report :

The auditors K.C. Jena & Co., Chartered Accountants Auditors of the company, was appointed as Statutory Auditors of the Company for the Financial Year 2004-2005 by the Shareholders in the 4th Annual General Meeting of the Company. The Statutory Auditors have audited the Accounts of the Company for the year ended 31st March 2005 and Audited Accounts together with the Auditors Report thereon are annexed to this Report. It is gratifying to note that there are no qualifying remarks from statutory Auditors on the Accounts of the Company.

The observations made in the Auditors Report are self-explanatory and therefore Do not call for any further explanations The company had received a certificate from M/S K.C. Jena & Co., Chartered Accountants, retiring auditors of the company on 01/09/2003 regarding their eligibility under section 224(IB) of the companies act 1956. The board recommended their re-appointment for the financial year 2005-2006 in the 5th annual General Meeting held on 30/09/2005 and they are re-appointed by the shareholders of the company financial year 2005-2006.

5. Human Resource

Your company banks on its employees. Your company is fortunate to have recruited and worked with talented and dedicated employees, who contributed their might and mental power for the development of the company. This probably explains the company ability to develop and many more to come.

Your company treats its employees as its key assets and undertakes constant initiative to motivate and boost employee morale. Each employee feels and is treated as a member of the same family Training programs are organized to align individual skills and knowledge with organizational goals. The Directors wish to place on their record their appreciation for the enthusiasm, sincerity and hard work of all employees of the company.

6. Dividend

With a view to conserve the liquid resources for future business needs and meet the challenges in the dynamic business environment, the director have decided not to recommend any dividend for the financial year 2004-2005 under review.

7. Responsibility Statement

To the best of their knowledge and belief, according to the information and explanations obtained by them, Your Directors make the following statement in terms of section 217(2AA) of the companies Act 1956. i) That in the preparation of Annual Accounts, for the year ended 31 march 2005 the applicable accounting statements have been followed by ARSS Infrastructure Projects Pvt. Ltd. along with proper explanation relating to material departures.

ii) That the Directors had selected such Accounting Policies and applied them consistently and made judgement 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 the end of the financial year for the year ended 31 march 2005 and of the profit of and loss of the company for that period.

iii) That proper and sufficient care was taken by the Directors for 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 frauds and other irregularities and

iv) That The Annual Accounts for the year ended 31 march 2005 were prepared on a going concern basis.

8. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo etc. 217 (1) (e)

Particulars with regards to conservation of energy, technology absorption, foreign exchange earning & outgo in accordance with the provisions of Section 217 (1) (e) of the companies Act 1956 read with the companies (Disclosures of particulars in the Report of Board of Directors) rules 1988 is as follows.

(1) Pertaining to conservation of energy and technology

Your Company was running by two numbers of DG Sets of 225KVA Genest consuming HGD and also electricity provided by CESCO.

During the financial year 2004-2005 the company has not hired any technology whatsoever.

(2) Foreign exchange earning and Outgo

The company has neither earned nor incurred any expenditure in foreign exchange during the financial year 2004-2005.

Earning ....................... NIL

Outgo .......................... NIL

9. Public Deposits;

Your company has not accepted any deposits from the public/Shareholders in accordance with the Sec. 58A of the Companies Act 1956, and hence no amount of principal or interest was outstanding as of the balance sheet date.

10. Board of Directors :

The following changes have taken place in the Board of Directors of the company since the last report; The Board of Directors currently consists of four members. There were Thirteen Meetings of the Board of Directors held during the year 2004-2005.

01 April 2004, 15th April 2004, 13th May 2004, 11th June 2004, 06th July 2004, 30th July 2004, 16th August 2004, 17th August 2004, 02nd September 2004, 13th December 2004, 22nd January 2005, 10th February 2005, 28th March 2005.

1. Mrs Sanju Agarwal has ceased to be a Director of the Company w.e.f. 01-04-2005.

2. Mrs Seema Agarwal has ceased to be a Director of the Company w.e.f. 01-04-2005.

3. Mrs Ram Dulari Agarwal has ceased to be a Director of the company w.e.f. 01-04-2005

4. Mr. Sunil Agarwal has been appointed as Additional Director of the company w.e.f. 01-04-2005. The appointment of Sri Sunil Agarwal is put for approval of the members in the Annual general meeting held on 30-09-2005 and was appointed by the shareholders of the company.

5. Mr Soumendra Keshari Pattanaik has been appointed as Additional Director of the company w.e.f. 01-04-2005. The appointment of Sri Soumendra Keshari Pattanaik is put for approval of the members in the Annual general meeting held on 30-09-2005 and was appointed by the shareholders of the company.

The Board places on record its warm appreciation of the valuable contribution made by the outing Directors as members of the Board.

11. Board Procedure

(A) Decision Making Process;

With a view to professionalize all corporate affairs and setting up systems and procedures for advance planning for matters requiring discussion/decisions by the Board, the company has appropriate guidelines for the meetings of the Board of Directors. These Guidelines seek to systematize the decision making process at the meetings of Board in an informed and efficient manner.

(B) Scheduling and selection of Agenda items for Board Meetings.

(i) The meeting are being convened by giving appropriate notice after obtaining the approval of the Chairman of the Board. Detailed agenda, management reports and other explanatory statements are circulated in advance amongst the members for facilitating meaningful informed and focused decisions at the meetings. To address specific urgent need, meetings are also being called at short notice. The Board also authorized to pass Resolution by Circulation for all such matters which are of utmost urgent nature.

(ii) Where it is not practicable to attach any document or agenda is of confidential nature, the same is placed on the table at the meeting with the approval of the Chairman. In special and exceptional circumstances, additional or supplemental item (s) on the agenda are permitted. Sensitive subject matters are discussed at the meeting without written material being circulated.

(iii) The agenda papers are prepared by the concerned officials and submitted to concerned functional Heads for obtaining approval of the CMD. Duly approved agenda papers are circulated amongst the Board members.

(iv) The meetings are usually held at the Companys registered office in Bhubaneswar, at Plot No. 38, Sector-A, Zone-D, Mancheswar Industrial Estate, Bhubaneswar-10.

(v) The members of the Board have complete access to all information of the company. The Board is also free to recommend inclusion of any matter in agenda for discussion. Senior management officials are called to provide additional inputs to the items being discussed by the Board, as and when necessary.

(C) Recording minutes of proceedings at the Board Meeting.

Minutes of the proceedings of each board meeting are recorded. The minutes of the proceedings of meetings are entered in the Minutes Book.

(D) Follow-up mechanism

The guidelines for the Board facilitate an effective post meeting follow-up, review and reporting process for the action taken on decisions of the Board. Action taken report (ATR) on the areas of concern are presented before the Board.

(E) Compliance

While preparing the agenda notes, it is ensured that all the applicable provisions of law, rules, guidelines etc. are adhered to. The company ensures compliance of all applicable provisions of the Companies Act, 1956.

(F) Financial Year

ARSS Infrastructure Projects Pvt. Ltd. Follows the financial calendar from 1st April to 31st March.

ACKNOWLEDGMENT

The Board of Directors acknowledged with deep appreciation the cooperation received from the Govt. of Orissa particularly the Ministry of Power, State Electricity Board, State Govt., Govt. of India, particularly Ministry of Railways, South Eastern Railways as well as companys bankers.

The Board wishes to place on records its appreciations for efforts and contributions made by the employees at all level which made possible the significant achievement by your company.

For and on behalf of the Board of Directors

Sd/- (Chairman & Managing Director) Place : Bhubaneswar Dated : 10-03-06

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