BUSINESS SUMMARY

ARSS Annual Report

2010-11

2011-12

2012-13

2013-14

2014-15

Our Company is engaged in construction activities in India. We undertake construction of railway infrastructure, roads, highways, bridges and irrigation projects. We started as a construction company in the field of railway infrastructure development, mainly in the State of Orissa and subsequently expanded our business activities in the zonal jurisdictions of East Coast Railway. We have developed expertise in railway construction projects, which includes earthworks, major and minor bridges, supply of ballast, sleepers, laying of sleepers and rails, linking of tracks etc. Over the years we have diversified our field of activities into other construction segments such as development and construction of roads, highways, bridges, irrigation projects, EPC activities for railways.

Construction projects are typically awarded through competitive bidding process to bidders with certain eligibility requirements based on their past experience, technical capabilities and financial strength. We bid for projects both on a standalone basis as well as through project specific joint ventures. We have entered into joint ventures with national and international players such as PT Adhikarya (Persero), Harish Chandra(India) Limited, Triveni Engicons Private Limited, RITES, Kalindee Rail Nirman (Engineers) Limited, Patel Engineering Ltd., Rohit Kumar Das Construction Private Limited, Backbone Enterprises Ltd., Atlanta Ltd & Som Dutt Builders.

Our clients include Ministry of Railways, State Government of Orissa, Rail Vikas Nigam Limited, RITES Limited, IRCON International Limited, National Thermal Power Corporation, Hindustan Steel Corporation Limited, PWD- Orissa, IOCL, National Highway Authority of India. We have successfully completed around 200 Km rail line and about 300 Km of roads and highways.

We have a dominating presence in Eastern India, particularly in the State of Orissa. However, in recent years we have pursued opportunities in other parts of India including states of Chhatisgarh, Rajasthan, Jharkhand, Haryana and Tamil Nadu.

AS of October 31,2008 our work force consisted of approximately 3000 full time employees. We have track record of timely execution of our projects. We adhere to international best practices standards and have been certified with ISO 9001:2000 Quality Management System Standard Certificate by Moody International Certification Limited for "Construction of Civil Work-Like Road Projects, Major Bridges, Minor Bridges, Earthwork and Railway Track Linking Work." We are committed to adhering to health, safety and environment policies and practices in the execution of our projects.

In the financial year 2008, our total income was Rs. 312.50 crores and we earned net profit of Rs. 27.10 crores.

As of October 31,2009, total value of our Order Book is Rs. 2353.79 lacs, which consists of the ongoing projects only.

Our competitive strengths

Project Management expertise and track record

We have successfully executed over 60 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 over the span of seven years.

We have been able to mobilize resources including equipment, raw material and personnel to our project sites at short notice, while adhering to a track record of timely completion of projects. We believe that the breadth and depth of our experience, among other factors, enables us to pre-qualify for a greater number of potentially higher-margin projects.

Larger fleet of construction equipment

We have a fleet of strategic construction equipment assets. We believe that our investment in equipment and fixed assets is an advantage, which enables us to rapidly mobilize our equipment to project sites as needs arise. As of March 31, 2009 our total investment in plant, machinery and equipment is Rs. 161.13 crores (Approx.).

We have crusher plants at Seven locations in various districts of Orissa and equipment storage, maintenance and repair facilities in Crusher plants are required for quarrying and crushing granite stone to produce required sizes of rock products as per client specification be it for railway track ballast or highway work or any other civil construction work.

We own construction Equipment comprising of Hydraulic Excavator, Tippers, Excavator cum Loader, Vibrator Roller, Vibrator Soil Compactor, Motor Grader, Hot Mix plant, Concrete, Batching Plant, Wet Mix Plant, Transit Mixture, Crane and other miscellaneous Equipment (List of machineries are attached View).

Long-term relationship with reputed clients

Majority of the contracts are received from Government, Public Sector Undertakings and other Government agencies, which reduces the risk of default and delayed payment. For the year ending March 31, 2008 the percentage of work order from Government and Government entities was 89%. We believe that our client centric approach enables us to develop long-term relationships with our clients and receive repeat orders from them. Clients from whom we have received repeat orders include State Government of Orissa, Railways Department, Rail Vikas Nigam Limited and RITES.

Strong and diversified Order Book

Our Order Book as on March 31, 2009, stands at Rs. 2353.79 crores. The composition of Order Book is well diversified over various segments such as railways, roads and highways and road over bridges (ROB), Dams etc. In 2007, we diversified into execution of irrigation and canal construction works. Diversification into new areas of construction projects is expected to mitigate the risk of slow down in revenues from any segment due to unforeseen circumstances.

Continuous growth in our bid capacity and pre qualification capability

Our business and growth are dependent on our ability to bid and secure large and multifarious projects. Bidding for infrastructure projects is dependent on various criteria, including, bid capacity and eligibility capability. Bid capacity represents the aggregate value of the contracts that can be awarded to us, and is computed based on pre-defined criteria of various authorities. Eligibility capability includes various factors such as the technical capability, financial capability and past experience in similar projects. We have focused on increasing these parameters and continuously increased our bid capacity. In the current financial year, we have successfully tendered and procured additional projects. There are works on the pipe line and the order book as on 31st Dec'2009 is expected to exceed Rs. 3000.00 crores.

Future Prospects /Business Strategy

Continued focus on the high growth opportunities in the construction and infrastructure sector, while maintaining performance and competitiveness of existing business.

We believe that the increasing level of investment in infrastructure by Governments (state and central), international development bodies (like ADB, IFC, World Bank etc) and private parties will be a major driver for growth of our business in the foreseeable future. Investments in roads and railways take priority in the infrastructure development initiative by the Government of India. We intend to take advantage of such growing opportunities in infrastructure development by strengthening our existing expertise in executing the projects successfully and by continuing our focus on railways and roads.

Building a pan-India presence by bidding & procuring Infrastructure projects funded by Central & State Government or other recognized development organization

We shall continue to bid for contracts from Government, quasi Government or development organizations, across India. Over the last two years we have expanded our operations from Orissa to states like Chhatisgarh, Tamil Nadu, Rajasthan, Jharkhand etc. to avail of opportunities across different States of India.

Participation in BOT Contracts

The Government awards construction projects in the road sector to contractors on Build Operate Transfer (BOT) basis. Besides road sector, the Government also awards BOT contracts for other sectors like hydropower, rail bridges, power transmission, telecom towers etc. We intend to primarily focus on executing different BOT projects in road sector. Additionally, BOT projects offer the possibility of higher revenues to the contractor by virtue of better than anticipated use of the asset. We intend to increase our focus on BOT projects by show-casing our technical and financial credentials, which we believe will be improved by the strengthened balance sheet, post the initial public offer. This would allow us to take largest size and number of projects, including BOT projects in standalone and joint venture basis. We have submitted bids for road projects on BOT basis and are awaiting response from the relevant authorities.

Enhancement of profitability and capital efficiency

Infrastructure construction is a highly competitive and capital-intensive activity. We believe that optimal utilization of financial, human and other resources is crucial for achieving success in this industry. Going forward, our strategy will be to continue focusing and structuring on optimum capital utilization to enhance returns, by actively analyzing and identifying projects and assigning priority to high margin yielding projects. We also intend to improve capital efficiency by striving for accelerated completion of projects.

Forging alliances with established Indian and international strategic partners

We have formed Joint Venture with domestic and international companies like PT Adhikarya (Persero), Harish Chandra (India) Limited, Triveni Engicons Private Limited, RITES, Kalindee Rail Nirmal (Engineers) Limited, Patel Engineering Limited, Backbone Enterprises Limited and Atlanta Limited. For details of these memoranda of understanding, joint venture agreements, / consortium agreements. We intend to develop and continue to establish strategic alliances with companies, whose resources, skills and strategies are complementary to ours, which would enhance our business opportunities to achieve competitive bidding advantage.

Public Issue

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 2nd January, 2009 has approved the DRHP and given their consent to bring the IPO within 365 days from the date of approval. The IPO process would start once the stock market stabilizes.