|1. Contingent Liabilities not provided for in respect of:
(Amount in Rs)
Sr. 2014 2013
(i) Disputed income tax demands 197,610,994 122,197,838
(ii) Claims against the Company
not acknowledged as debts 513,460,331 167,741,290
(iii) Guarantees/ Letters of credit
issued by banks (net of
liabilities provided) Nil 4,499,004
(iv) Guarantees given on behalf
of subsidiaries Loans and
other borrowings. 17,843,519,332 15,291,519,332
Outstanding balances (including interest accrued and due) against such
guarantees is Rs. 13,579,511,539/- (P.Y. - Rs 12,613,786,374/-)
2. Capital and other commitments
Estimated amount of contracts remaining to be executed on capital and
other account and not provided for (net of advances paid) is
Rs.79,000/- (Rs 987,560,296).
3. MSMED Act - Creditors
The Company has not received any intimation from "suppliers" regarding
their status under the Micro, Small and Medium Enterprises Development
Act, 2006 and hence the disclosures, if any, relating to amounts unpaid
as at the year-end together with interest payable as required under the
said Act have not been given. This has been relied upon by the
4. (i) Management's Opinion - Current Assets and Liabilities
In the opinion of the management, current assets, loans and advances
and current liabilities are approximately of the value stated, if
realised / paid in the ordinary course of business. Provision for all
known liabilities is adequate and is not in excess of amounts
considered reasonably necessary.
The company has sent confirmation letters for confirming the balances
as on March 31, 2014 of trade receivables, trade payables, advances and
loans/credit facilities from banks/financial institutions. However,
certain trade receivables, trade payables and advances are subject to
confirmation and reconciliation. The differences, if any, will be
adjusted on final reconciliation/determination.
5. Revival Plans
The management of the Company is in the process of restructuring its
business operations as also those of its subsidiaries in which it has
substantial investments, by -
* expanding the business volumes,
* converting Free Trade Warehousing Zone into Sector Specific Special
* establishing an Inland Container Depot,
* tying up the requisite funds for the said purposes.
The above steps shall enable the management to improve Company's Net
worth and its ability to discharge its debts/liabilities in near
6. Corporate Debt Restructuring (CDR)
During the year, Secured Lenders (Banks) have approved the
restructuring package under "Corporate Debt Restructuring Package"
(CDR), which inter-alia provides for:
(i) Reschedulement of the Principal amounts of the loans and dates
(ii) Funding of unpaid interest on the Term Loans due from October 2012
to October 2014 into Funded Interest Term Loans.
(ii) Waiver of all liquidated damages/penal charges/penal
interest/excess interest i.e. in excess of documented rate of all the
facilities from the cut-off date i.e. 1st October, 2012 till the
commencement of the package.
(b) Secured Lenders have a right to recompense.
(c) The CDR as aforesaid has been recognized in the Accounts for the
year ended 31st March, 2014 whereby -
(i) Balance standing to the credit of interest accrued and due on loans
(net of waiver) as of 31st March, 2013 and interest for the year
aggregating to Rs. 175.65 crores have been transferred to Funded
Interest Term Loan (FITL).
(ii) Interest on Secured Loans of Rs. 3.05 crores waived by the Secured
Lenders (Banks) has been disclosed in the Statement of Profit & Loss as
(d) Financial impact, if any, in the rights of Secured Lenders (Banks)
to recompense shall be accounted upon crystallization of such rights.
31. Capital Expenditure:
(a) Fixed Assets:
In view of revival plans of the Company as referred to in Note 29, in
the opinion of the management, the carrying value of the Fixed Assets
of the Company are not lower than their recoverable amounts and hence,
no provision for impairment of Fixed Assets is called for.
(b) Capital work-in-progress as at the year-end of Rs. 4,420,700,536 /-
(i) Borrowing cost (net) capitalized or transferred to capital
work-in-progress Rs. NIL (Previous year Rs. 565,205,200)
(ii) Pre-operative expenses of Rs. 1,313,245,060/- (Previous Year -
Rs. 1,313,245,060/-). Details of Pre-operative expenses
capitalized/transferred to Capital Work-in-Progress includes:-
(iii) The Company has discontinued its earlier practice of charging
borrowing costs as attributable to Projects and pre-operative expenses
incurred in connection therewith as was done in the earlier years on
account of its decision to putting on hold of the incurrence of
expenditure in relation to the project work in progress/projects.
(iv) During the year, the Company has put on hold further capital
expenditure and incurrence of other expenses in connection therewith
due to non-optimum utilization of the existing capacity as also
non-availability of funds for incurring the balance expenditure. The
management expects that in near future, the company shall be able to
tie up business agreements as also the required funds which will enable
it to complete the Project Work- in- Progress.
7. Unamortised Expenditure
Ancillary costs incurred in connection with the arrangement of
borrowings were amortized over the tenure of borrowings till previous
year. This year, the Company has written off Rs. 252,205,039/- in
respect of the same to the Statement of Profit and Loss as the said
costs are "period costs". If the Company had continued its earlier
practice, the charge for the current year in respect of the same would
have been lower by Rs. 214,602,226/- and the loss for the year lower by
(i) The Company holds strategic and long term investments in its
subsidiary companies, the aggregate cost of which is Rs. 834.60 crores
as on 31st March, 2014. The present "net asset value" of the said
investments are lower than their costs of acquisition. However, keeping
in view that the said investments are long-term and strategic in nature
as also the said subsidiaries are in the process of implementing their
respective Revival Plans alongwith the future business plans of the
Company, the Management is of the view that the diminution in value of
its investments is temporary in nature and no provision for diminution
in value is called for.
(ii) The Company has reversed the provision of Rs.5,00,000/-, made in
earlier year for fall in the value of its investments in Arshiya
Transport and Handling Limited in view of the Revival Plans of the
investee company as also proposed scheme of amalgamation of that
company with two other fellow subsidiaries viz. Arshiya Northern FTWZ
Limited and Arshiya Industrial & Distribution Hub Limited.
9. Provision for Loan
The Company has reversed the provision made for doubtful recovery of
loan of Rs. 9.95 Crores granted to its subsidiary, Arshiya Transport
and Handling Limited, made in the earlier year as the management
expects to recover the same in near future in view of its revival plans
and its proposed amalgamation with the fellow subsidiaries Arshiya
Northern FTWZ Limited and Arshiya Industrial & Distribution Hub
10. Mark to Market Losses
(i) This year, the Company has changed its accounting policy of
capitalising / deferring its Reserve for Mark to Market Losses (MTM) on
its derivatives (for conversion of rupee loan liability into foreign
loan) as done hereto before following announcement by the Institute of
Chartered Accountants of India on "Accounting for Derivatives" by
charging MTM losses relating to earlier years in the Statement of
Profit & Loss. Due to the said change, an amount of Rs. 393.08 lacs
from tangible assets (net of depreciation) and Rs.85.60 Lacs from
Foreign Currency Translation Reserve Account have been charged to the
Statement of Profit and Loss for the year, which have been shown as
(ii) Further, during the year, an amount of Rs. 3,231.14 lacs in
respect of MTM losses upon determination of fair market value of
derivatives entered into by the Company has been charged to the
Statement of Profit and Loss. The Company is of the view that MTM loss
has to be worked out taking into account the spot exchange rate(s) on
the reporting date as it is committed to continue derivative contracts
till their maturity and hence, applying the fair market values
presuming that the derivative contracts would be cancelled on the
reporting date, shall not reflect the correct financial position.
However, the Banks who have entered into derivative contracts with the
Company have, intimated that the loss on account of MTM is Rs. 7,088.73
lacs as upto 31st March, 2014 as against the amount of Rs. 3,391.57
lacs determined as per the Company's view.
(iii) If the Company had continued to follow the policy of deferring
the write off of MTM losses, the charge for the year would have been
lower by Rs. 3,134.32 lacs.
11. Interest from Subsidiaries
In the earlier year, the Company charged interest amounting to Rs.
220,751,518/- in respect of loans given to its subsidiary companies. In
the current year, in view of management's decision to treat such loans
as "quasi equity in terms of the requirements of the Corporate Debts
Restructuring Scheme sanctioned by the Secured Lenders (Banks) no
interest has been charged to its subsidiaries in respect of said loans.
Such Interest chargeable to the subsidiaries for the current year has
not been ascertained.
12. Proceedings against Company
Certain lenders and creditors have filed winding up petitions/ cases /
other legal proceedings for recovery of the amounts due to them which
are at different stages before the respective judicial forums /
authorities. Claims by the said lenders and creditors have been
contested by the Company in those proceedings and not acknowledged as
debts. It is not possible at this juncture to estimate the financial
implications of such claims.
13. Scheme of Amalgamation of Arshiya FTWZ Limited and Arshiya
Domestic Distripark Limited
The Scheme of Amalgamation of Arshiya FTWZ Limited and Arshiya Domestic
Distripark Limited with the Company became effective from 4th January,
2013. The entire undertaking of the transferor companies including all
assets, liabilities and reserves vested in the Company on the appointed
dated, i.e.1st April, 2012 for which necessary impact had been given in
the accounts for the year ended 31st March, 2013. However, certain
assets belonging to the amalgamating companies have yet not been
transferred in the name of the Company.
14. Logistic Operations
The Company has decided to phase out its logistics operations. In the
wake of said decision, the Company assigned certain outstanding book
debts aggregating to Rs. 262.66 crores and certain outstanding trade
payables aggregating to Rs. 262.12 crores in respect of its logistics
operations for the period upto December 31, 2013.
Such book debts and trade payables aggregating to Rs. 57.2 crores and
Rs. 57.05 crores respectively in respect of its logistics operations
outstanding as on 31st March, 2014 have been assigned on 30th June,
2014 which shall be accounted in the subsequent year.
15. Maharashtra VAT Refund Receivable
As per the notification dated 16th May, 2013, issued by the government
of Maharashtra, MVAT exemption/refund is available to SEZ Developer
after 15th October, 2011. (Record date). However, the Company has
claimed refund of Rs. 17.43 crores in respect of transactions prior to
record date. The Company is of the view that the state government has
exempted it from local taxes, levies and duties on goods required for
authorized operations by a Developer vide GR dated 12th October, 2001
passed by Industries, Energy and Labour Department, Government of
Maharashtra. Accordingly, these financial statements reflect a sum of
Rs.17.43 crores as refund receivable on account of Maharashtra VAT. In
case the refund is not granted, the necessary adjustment entries shall
be recorded in the year in which finality is reached.
(i) In view of loss for the year as calculated as per the provisions of
the Income Tax Act, 1961 (The "Act"), no provision for taxation has
(ii) ShonV(Excess) provision for prior year (net) Rs. 14.73 crores
comprises of Rs. 0.43 crores being write back of tax provisions
relating to prior years and provision of Rs. 15.16 crores relating to
Financial Year 2012-13.
The Provision for the financial year 2012-13 is a consequence of the
Company not being able to pay the Tax Deducted at Source in respect of
certain expenses and certain statutory liabilities on or before their
respective due dates resulting into higher taxable income requiring
additional tax provision therefor.
(iii) In view of substantial losses incurred as upto 31st March, 2014,
the Company has reversed the Deferred Tax Liability of Rs. 15.69 crores
and written off MAT credit entitlement of Rs. 0.23 crore.
17. Disclosure pursuant to Accounting Standard 15 (Revised) - Employee
Benefits a. Brief descriptions of the plans
The Company's defined contribution plans are Provident Fund and
Employees State Insurance where the Company has no further obligation
beyond making the contributions. The Company's defined benefit plans
include gratuity. The employees are also entitled to leave encashment
as per the Company's policy.
18. Disclosure pursuant to Accounting Standard 17 - Segment
Primary Segment Information
The Company operates in two primary reportable business segments, i.e.
"Logistics operations and related services" and Free Trade Warehousing
Zone ('FTWZ') operations" as per Accounting Standard 17 - "Segment
Geographical segment and its composition are India and Rest of the
i) The Company has identified India and Rest of the World as
geographical segments for secondary segment reporting. Geographical
sales are segregated based on the location of the customer who is
invoiced or in relation to which the sale is otherwise recognized.
ii) Capital expenditure includes expenditure incurred on capital work
in progress and capital advances.
a. (l)Key Management Personnel
Mr. Ajay S. Mittal - Chairman and Managing Director
Mrs. Archana A. Mittal - Joint Managing Director
Mr. Suhas Thakar - Executive Director (W.e.f 1/06/2013) (Resigned
(ll)Relative of Key Management Personnel
Mr. Ananya Mittal -Management Trainee (Business Development)- W.e.f.
b. Other related parties with whom transactions have taken place
during the year or balances outstanding as at the reporting date.
Bhushan Steel Limited Arshiya Lifestyle Limited
The related party relationships have been determined by the management
on the basis of the requirements of AS-18 and the same have been relied
upon by the auditors.
The nature and amount of transactions with the above related parties
are as follows
I. In respect of assets taken on cancellable operating lease
The Company has taken certain offices and equipments on cancellable
operating lease, which are renewable on a periodic basis at the option
of both the lessor and the lessee. Rental payments under such lease are
Rs. 2,765,674/- (Rs. 72,344,612/-).
II. In respect of assets taken on non-cancellable operating lease
The Company has taken office premises on non-cancellable operating
lease arrangements for a period of 5 years. The operating lease rental
payments/provision under non-cancellable agreements aggregate to Rs.
63,901,813/- (Rs. 66,383,894/-). Details of contractual payments under
non-cancellable operating leases are given below:
III. Total Lease rental payments in respect of operating leases
recognized in the Statement of Profit and Loss are Rs. 66,667,487/-
(Rs. 138,728,506/-) and capitalized during the year is Rs. Nil (Rs.
(i) The Chairman and Managing Director of the Company decided not to
draw any remuneration for the financial years 2012-2013 and 2013- 2014.
Consequently, the Board of Directors of the Company at their meeting
held on 2nd April, 2014 decided that the Company's application to the
Central Government for approval of excess remuneration of Rs. 340.76
lacs paid/provided in the financial years 2012-2013 and 2013- 2014 be
withdrawn and accordingly, the same was withdrawn. The entire
remuneration paid/provided to the Chairman and Managing Director for
2012-13 has been recovered during the year ended 31st March, 2014 and
shown as "Write Back of Managerial Remuneration" and no provision has
been made for the year ended 31st March, 2014.
The Board of Directors of the Company at their meeting held on 2nd
April, 2014 at the instance of the Chairman and Managing Director has
revised his remuneration to a token amount of Rs.1,000/- per anum
effective from April, 2014.
(ii) In view of absence of profits as also the company not being able
to repay its debts and interest payable thereon to lenders, the
remuneration paid/provided to Mr. Suhas Thakar, Ex-Executive Director,
is in excess of limits prescribed under section 198 read with Schedule
XIII of the Companies Act, 1956. The Company is in the process of
filing an application to the Central Government for approval of excess