30th September, 2019
Good Afternoon to all of you,
Dear Shareholders,
A warm welcome to each of you to the 38th Annual General Meeting of Arshiya. It is wonderful to have you all join us here today, and on behalf of the Company’s Board of
Directors, I thank you for making the time. It is your support, and at the same time you challenging us to do better, that pushes us to strive for more.
The Company's accounts for the year ended March 31, 2019, along with the Directors' and Auditors' report and Management's Discussion and Analysis, have already been
circulated to you. With your permission, I would like to take them as read.
INDUSTRY OVERVIEW
The logistics sector has been in limelight in the past couple of years and is undergoing a significant transformation on account of various reform initiatives and policy changes. The major reforms include the introduction of GST (Goods & Service Tax), roll out of E- Way bill and the sector being granted infrastructure status. The initial benefits of these developments have started coming in, but majority would accrue in the coming years. The current Government’s recent focus on boosting the infrastructure of the country has acted as a catalyst for investment in warehousing. The development of new airports, shift of the manufacturing base to these cities, growth in demand for consumption and industrial use and development of the road network are factors that provide huge potential for growth of warehousing. The Indian Government has implemented investor friendly policies. The Government’s main thrust on improving road infrastructure and aiding or setting up of multimodal logistics parks is a key driver for industry aspirants and existing players.Another positive move of the Government, development of industrial corridors network and freight corridors has created demand for warehousing.This is a good time to be in the logistics business in India. The Indian logistics industry is expected to grow to $215 billion in revenues by 2020-21 from about $160 billion in 2016-17. The work towards creating ‘The Integrated Transport and Logistics Policy' is an important first step towards realizing this goal and certainly the right one.Within the logistics segment, Third-Party Logistics (3PL), a service that allows a business to outsource operational logistics from warehousing to delivery, is expected to grow the fastest, especially with the advent of e-commerce.
Business Performance
During the year under review your Company has reported a standalone income of ₹ 15,332.46 Lakhs as compared to ₹ 9,562.11 Lakhs for the previous year. Further, your Company has reported loss of ₹ 3,516.49 Lakh as compared to the profit after tax of ₹ 3,895.66 Lakhs in previous year.
On a consolidated basis the Company has earned income of ₹ 31,397.47 Lakhs as compared to ₹ 27,571.88 Lakhs for the previous year. Further, your Company has
reported loss after tax of ₹ 26,757.85 Lakh as compared to the profit after tax of ₹ 3,104.44 Lakhs in previous year.
Despite the hiccups of the past the future looks positive for our sector and as a significant player in this space we have started taking steps to capitalize on this growth.
Bright Future ahead
Amidst stern challenges we found great opportunities. Our commitment to our core Company values and business philosophy inspire us to take on the challenges head on. Our focus is to provide world-class integrated logistics and warehousing services in India. In the following paragraphs, I will detail out to you some of our significant plans that will help us achieve this.
It give me immense pleasure to announce that after over 9 years, your Company has started construction of a double storied warehouse on approximately 5.5 acres of land with a leasable area of ~3,25,000 square feet at the Arshiya FTWZ in Panvel for a cost of INR 70 crores which is testimony of a new beginning. Also, under the forward sale of development framework the sale consideration for the Warehouse Building is INR 215 crores. Besides the above net income of INR 145 crores for 3.25 lac square feet, the company will build, as per the forward sale of development framework agreement with Ascendas and additional ~ 25,00,000 square feet at Panvel alone over the next few years on its existing land bank and infrastructure.
At our Khurja facility the Company is in advance stage to monetize one warehouse of approximately 1,90,000 sq.ft of Arshiya Northern FTWZ Limited at its Free Trade & Warehousing Zone, similar to Panvel FTWZ with Ascendas. The indicative gross consideration envisaged is Rs. 106 crores for 1.9 lac square feet. The Khurja FTWZ already have an additional built-up area of ~ 5 lac square feet (3 warehouses). The balance built-up area too will be monetized over the next few quarters. Khurja FTWZ has
capacity to build another 25,00,000 square feet on its existing land bank and infrastructure.
The Company has realized that the Rail and Inland Container Depot (ICD) section of the Company’s business portfolio is under huge consolidation and the Company doesn’t have the requisite resources to keep pace with the same. In such dynamic and ever-changing business horizons, it is wise to exit this section of the business at a reasonable valuation and reduce its consolidated debt.
Further, the Company has decided to focus on its core competencies as a ‘FTWZ Developer’ of developing, operating and maintaining FTWZ, ‘3rd Party Logistics Services Company’ (3PL) under an asset light model and the new initiative as a ‘Developer of Hyper Data Centre Park’.
The Company had outlaid plan to set-up an additional segment, i.e., Electronic hardware and software (including information technology enabled services) in the notified area for FTWZ at its Panvel facility wherein Company planned to develop IT/ ITES Park on an area of approximately 25 acres of land. The Company has obtained the requisite approvals to set-up the IT/ ITES Park from the concerned authorities. The requisite 25 acres of land situated at Panvel FTWZ has been notified as IT/ ITES Park and on the said land of the Company plans to build a ‘Hyperscale Data Centre Park’ with a constructible area of ~30,00,000 square feet.
With the recent developments and the focused efforts every day we are inching towards our goal of creating overall value for all the stakeholders.
Our People
Our aspirations are ambitious and execution plans bold. Our motivation and commitment to take it forward is founded on the generous guidance and support of our Partners, Clients, Government and last but not the least the tireless efforts of our workforce at all levels. Employee engagement is the main pillar of our growth strategy. I believe that our existing talent pool will enable us to out-perform our peers and meet our responsibilities as an organization to all our Stakeholders.
I thank you all for your immense support and continued confidence in our Company and the Management. I also like to thank all our Stakeholders - Customers, Employees, Partners, Shareholders, Business Associates and Society at large, for their continued and immense faith in us.
Thank you,
Ajay S Mittal
Chairman & Managing Director
Arshiya Limited
