>ARSS INFRASTRUCTURE PROJECTS LTD (SMC)

Company Profile: Incorporated in 2000, ARSS Infrastructure Projects Ltd is engaged in construction of railway infrastructure, roads, highways, bridges and irrigation projects in India. ARSS has business activities in the zonal jurisdictions of East Coast Railway, South Eastern Railway, South East Central Railway, Southern Railway and North Western Railway. ARSS effort in the railway construction projects include earthwork, major and minor bridges construction, supply of ballast, sleepers, laying of sleepers and rails, linking of tracks etc. ARSS has completed around 200 km rail line and about 300 km of roads and highways.

ARSS Infrastructure has significant presence in Eastern India, particularly in the state of Orissa. However, in recent years it has pursued opportunities in other parts of India including states of Chhatisgarh, Rajasthan, Jharkhand, Haryana , Kerla, Andhra Pradesh, Assam, Maharastra and Tamil Nadu.

Strengths
■ Strong and diversified Order Book
Company's order book as on January 10, 2010 stood at Rs.2877.53 Cr. The composition of Order Book is well diversified over various segments such as railways, roads and highways and Road Over Bridges (ROB). Diversification into new areas of construction projects helps the company to mitigate the risk of slowdown in revenues from any segment due to unforeseen circumstances.

■ Client centric approach
Company's client centric approach enables it to develop long term relationship with its clients & receive repeat orders from them. Majority of company's clients include Government, Public Sector Undertakings and other Government agencies, which reduces the risk of default and delayed payment. As on January 10, 2010, 73.11 % of Order Book of Rs. 2877.53 Cr comprised of the repeated order works from Government and Government authorities.

■ Large fleet of construction equipment
ARSS Infrastructure currently holds large fleet of equipments that enables it to mobilize its equipment to projects sites as & when needs arise.

■ Successful project execution track record
In a span of nine years, the company has successfully executed over 86 projects involving construction of over 300 km of roads and highways, 200 km of rail tracks, 10 minor and major bridges and other general civil engineering works .The company is known for its timely completion of projects in the eastern part of India.

Strategy
■ Forging alliances with established Indian and international strategic partners
The company intends to develop and continue to establish strategic alliances with companies, whose resources, skills and strategies are complementary to its business, which would enhance its business opportunities to achieve competitive bidding advantage.

■ Enhancement of profitability and capital efficiency
Focusing and structuring on optimum capital utilization will be the strategy of the company going forward. The company believes that actively analyzing and identifying projects yielding higher margins will enhance its returns.

■ Building a pan-India presence
The company intends to continue to bid for contracts funded by Central & State Government or other recognized development organizations in order to build a pan India presence.

Risks
■ One of the Promoters involved in criminal proceeding
A charge sheet has been filed on January 11, 2006 by CBI wherein Mr. Subash Agarwal, Promoter and Director of the company has been accused in the murder case. Imprisonment of the promoter could have a serious impact on company's reputation & thereby affecting its financials.

■ Defaulted on payment of interest and repayment of loan
ARSS has defaulted in making payment of interest & repayment of loans in the past. However, the company has cleared all its dues before filing the prospects .In case the company defaults in making payment in the future it could pose a serious setback to company's financial position.

■ Power supply at one of the units has been disconnected
Due to default in payment of electricity bills by the company to Central Electricity Supply Company of Orissa Limited (CESCO), power supply to its crusher unit at Nityanandpur, Orissa plant has been disconnected. The power requirement at this plant is presently being met by the D.G. Set owned by our Company.

■ Conflict of interest between group companies
Some of entities owned/promoted by the promoters are in the same line of business as its company. This may result in conflict of interest between the promoters and the business strategies of the Company.

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