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Directors Report of Arshiya Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the 34th Annual Report together with the Audited Accounts for the financial year ended 31st March ,2015.

1. RESULTS OF OUR OPERATIONS

I.) Summarised Standalone Financial Results Arahlya Limited

Particulars Year Ended Year ended 31.03.2015 31.03.2014 Rs In Lacs) (Rs In Lacs)

Income 5,110.75 31.654,86

Expenditure 252928 46,97428

Profit/{Loss) Before Depredation and Tax (25,996.14) (17,319.42)

Depreciation 2,922.01 1,958.10

Profit(Loss) Before Tax and Exceptional Items (23,074.13) (19,277.52)

Exceptional Items (Net) 1,008.79 10,687.35

Prior Period Items (Net) 317.40 (8L36)

Profit (Loan) After Tax (24,400.32) (29,707.68)

IL) Summarized Consolidated Financial Results Arahlya Limited and Its Subsidiaries

Particulars Year Ended Year ended 31.032016 31.032014 ( Rs In Lacs) ( Rs In Lacs)

Income 33,206.14 53.647.61

Expenditure 69,622 13 91,664,34

Profit'lLoss) Before Depreciation and Tax (36,415.99) (38,016.73)

Depreciation 10,109.33 8,352.89

Profit/(Loss) Before Tax and Exceptional Items (48,52522) (46,369.62)

Exceptional items (Net) 1,08521 21265.65

Prior Period Adjustments (Net) 354.74 14913.74

Profit/!Low) Before Tax (47,965.87) (82549.31)

Net Profit/(Loss) After Tax (47,400.69) (84,622.95)

The consolidated Financial Statements of the Company are prepared h accordance with relevant Accounting Standards viz. AS-21, AS-23 and AS-27 Issued by the Institute of Chartered Accountants of India and forms part of this Annual Report

III.) Dividend

In view of losses, the Directors that their inability to recommend dividend tor the financial year ended 31st Match 2015. hrs.) Particular* of loans, guarantees or Investments by company

Details of Loans, Guarantees and Investments covered under the previsions of Section 106 of the Companies Act, 2013 are given in the notes to Financial Statements.

v. ) Fixed Deposit*

The Company has not accepted any deposits, within the meaning of section 73 of the Companies Act, 2013 read with the Companies (Acceptance of deposit*) Rules, 2014.

vi. ) Particulars of Contracts or arrangements made with related parties)

All transactions entered with Related Parties tor the year under review were on arm's length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in Form AOC-2 is not required Further, there are no material related party transactions during the year under review with Promoters, Directors or Key Managerial Personnel. The Company has developed a Related Party Transactions framework through Standard Operating Procedure tor the purpose of Identification and monitoring of such transactions.

All Related Party Transactions are placed before the Audit Committee as also before the Board tor approval. Omnibus approval was obtained on a quarterly basis for transactions which are of repetitive nature. Transactions entered into pursuant to omnibus approval are audited and a statement giving details of all Related Party Transactions are placed before the Audit Committee and Board for review and approval on e quarterly bears.

The Policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company. The web link of the same has been provided in the Corporate Governance Report None of the Directors has any pecuniary relationship or transactions vis is the Company.

vii.) Material changes and commitment. If any, affecting the financial position of the company occurred between the end of the financial year to which this financial statements relate and the dale of the report

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate on the date of this report.

viii) Share Capital

The paid- up equity share capital of the Company as at March 31, 2015 stood at 725,43,58,944/- (Rupees Twenty Five Croros Forty Eight Lakhs Fifty Eight Thousand Nine Hundred Forty only). During the Year under review the Company has allotted 53.00,000 shares to the Promoters upon Conversion of Warrants Into equity and also 5.50.00,000 equity Shares to the Promoters on Preferential basis pursuant to the CDR Scheme as approved by the CDR-EG.

2. BUSINESS AND FUTURE OUTLOOK:

I.) Business

Arshlya plans to capitalize on India's mammoth logistics opportunity by being India's only Unified Supply Chain Infrastructure and Solutions Group. With a rich legacy in the logistics and supply chain industry in India, Analysis unique business model makes it a pioneering company In the country.

a.) Rail and Rail Infrastructure:

Arshlya Rail Infrastructure United started Its operations In February 2008. Our unique model has resulted In Arshlya Rall being the second largest Container Train Operator (CTO) and largest in Private sector in India. This company is operating total 20 container trains along with 4000 multipurpose domestic containers at present and mostly In domestic sector at more than 25 locations In pan India. The company stands atop with regard to freight transportation per annum among the PCTO. Arshlya Rail la giving customized and long term freight services to corporate clients The company has also recently started EXIM freight services tor various gateway port like Vlzag, Kolkata, Mumbai and Haldla

Private freight terminal at Khurja

Arshlya Rall Sidling at Khurja took one more step towards addressing the growing demand of the business and subsequently got notified as Brownfield Private Freight Terminal tor handling all types of Inward and outward traffic In full rakes, also being the First to be notified In NCR.

Apart from the existing container trains coming into Arshiya Rail Infrastructure, Khurja (ARIK) with commodities such as Ingots, Billets and Sponge Iron, the cement Industry looks at this terminal as strategic for feeding the plants and end users considering the growing demand for Infrastructure in and around Delhi NCR With investments increasing in setting up of Cement (Grinding and Mixing) Plants in and around Khurja. ARIK sees its utilization In inwarding of raw material from various sectors and outwarding of finished product in times to come

The terminal opens Itself to other commodities also which will be critical to the growth of business In that region such as Iron 4 Steel, Salt essential commodities etc.

Also, Arshiya Industrial & Distribution Hub limited, a fellow subsidiary has got the approval of the Government for setting up of Inland Container Depot (ICD) at Khurja, Uttar Pradesh. This development will give a boost to the rail operations of the Company.

b. ) Free Trade and Warehousing Zones (FTWZ):

Over the last new decide India has been losing Investments to neighbouring economies, which were being used by global corporations as bases for feedering India, due to lack of comparable transaction availablity In India.

With FTWZa developed by Arshlya, our country will be able to leverage 'Salt Infrastructure" such as sidled manpower, cost competitiveness, regulatory framework, IT connectivity, as will as 'Hard Infrastructure' such as dedicated state-of-the-art mega logistics parks FTWZe, rail connectivity, industrial & distribution hubs, transport and handing and world been supply chain management services. FTWZ will be a game changer for International as will as domestic companies which are Importing, exporting or re-exporting products to and from India.

FTWZ provides assistance to various potential cllents for Import and export, who struggle hard to recover taxes and duties paid while Import of the Inputs and other merchandise. They face the burden of spending heavy amounts towards recovery expenses apart Item the time consumption or have to forego the duties paid because of lack of provisions. Through FTWZ they reduce their cost burden because of available special provision a In Law.

The first FTWZ developed by Arahlya In Maharashtra near MumbelflPanvel la a credential for FTWZ concept In India. With over 500 customer been domestic as well as international, India can be proud of providing a successful unified supply chain concept in the country.

Arshlya Northern FTWZ Limited (ANFL), a subsidiary has developed a from at Khruija, Uttar Pradesh, to eater to the needs of Northern India. The starts of the and railway siding, rail connectivity and tCD at Khurja will further reduce the ovarall logistics cost between gateway ports and FTWZ/lCD.

Being a pioneer In FTWZ business In India, Arshiya FTWZ b facing a few regulatory challenges which have been taken up at the highest level with concerned Government authorities and the authorities are appreciative of the Issues and your Management hopes to get all of the issues sorted out el the earliest.

c.) Industrial and Distribution Hub:

During the year under review Arahlya Industrial * Distribution Hub Limited, a subsidiary has got the approval of the Government for setting up of Inland Container Depot (ICD) at Khurja, Uttar Pradesh. This approval la a booster for the affairs of the Company and group as e whole because of Us impact of integrating Rail, forward and ICO operations at Khurja.

d) Supply Chain Management

Arshlya Supply Chain Management Private Limited ie a FTWZ Service Unit at Arshlya FTWZ, Panvel. The main activities of the company is serving Indian and foreign relevant and carry out optimisation services as per events requirement

II.) Subsidiaries and Associates

Your Company has 12 subsidiary companies, Including 1 Material Subsidiary and 3 step dawn Subsidiaries as on 31.03.2015.

During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with section 128(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company and all Its subsidaries, which form part of the Annual Report. Further a statement containing salient features of the financial statement of our subskSaries in the prescribed format AOC-1 ie appended as Annexure-J to this Report The Statement also provides the details of performance, financial positions of each of the subsidiary.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements. Including the consolidated financial statements and related Information of the Company and audited accounts of each of Its subsidiaries, are available on our website www.arehivalimited.oom. These documents we also be available for inspection during business hours at the Registered Office to Mumbai, India.

3. CORPORATE GOVERNANCE

Corporate Governance i.e an ethically driven business process that is committed to values aimed at enhancing an organisation's brand and reputation. This Is ensured by taking ethical business decisions and conducting business with a fern commitment to values, while meeting stakeholders' expectations. The Company has been forwarding the principles of goad Corporate Governance over the years and lays strong emphasis on transparency, accounts billy and Integrity. As per clause 49 of the Listing Agreement entered Into with BSE and NSE, a separate section on Corporate Governance forms part of this Annual Report

I. ) Number of meetings of the board

The debris of the number of meetings of the Board held during the financial year 2014-15 forms pert of the Corporate Governance Report. The Interventing gap between any two meetings was within the period presorted by Clause 49 of the Listing Agreement and the Companies Ad, 2013.

II. ) Committee* of the Board

Currently the Board have the Committees namely Committee of Directors, Audit Committee, Nomination and Remuneration Committee, Share Transfer, Investor Grievances & Stakeholders Relationship Committee and Risk Management Committee. A detailed note on Board and Its committees Is provided under the corporate governance section to this Annual Report-

III. ) Board Diversity

The Company recognises and embraces the Importance of a diverse board In Its success. We believe that a truly diverse board wB leverage difference in thought perspectives, knowledge, ski, regional and industry experience, cultural and geographical back ground. The Board has adopted the PnScy on Board Diversity which sales out the approach to diversity of the Board of Directors and the same Is available on our viberate http:MwwwterBhlvalrnlt8d.com/tove8torafCocpofat5 Governance.

IV.) Remuneration and Nomination Policy

The Board of Directors of the Company has an optimum combination of Promoter Director and Non-Executive Independent Directors, who have to depth knowledge of the business and Industry. The composition of the Board la to conformity with the Listing Agreement with the Stock Exchanges and Companies Ad, 2013.

The Board of Directors has framed a policy which lays down a framework In relation to remuneration of Directors, Key Managerial Policy Personnel end Senior Management of the Company. This Poky also lays down criteria for selection and appointment of Board Members. The policy Is attached as Annexure - 8 to this Report

v.) Declaration lay Independent directors

All Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement

vi.) Board evaluation

Pursuant to the provisions of the Companies Act 2013 and Clause 48 of the Listing Agreement a structured questionnaire was prepared after taking into consideration of the various aspects of the Board's functioning, composition of the Board and Its Committees, culture, execution end performance of sped fie duties, obligations and governance.

The evaluation of al the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The performance evaluation of the Chairmen and the non- Independent Directors) was carted out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

None of the Independent directors are due tor re- appointment

vii.) Programmes for familiarisation of Independent Directors

The details of programme for familiarisation of Independent Directors with the Company, nature of the Industry in which the Company operates, business modal of the Company and related matters are put up on the website of the Company l.e. http:/www.arshivallmited.Com/investors/Corporate Governance

viii.) Retirement by rotation

In accordance with the provisions of Section 152 of the Companies Act 2013 and the Company's Articles of Association, Mrs. Archana A Mittal - Joint Managing Director retire by rotation and being elligible, offer herself for re-appointment al the ensuing Annual General Meeting.

Brief details of the Director proposed to be appointed/Re - appointed as required under Clause 49 of the Listing Agreement is provided is the notice of the Annual General Meeting and forms an Integral part of this Annual Report

bL) Auditors* Certificate on Corporate Governance

A Certificate from a Practising Company Secretary confirming compllance with the conditions of Corporate Governance under Clause 49 of the Listing Agreement is attached as annexure to Corporate Governance Report to this Report.

x.) Directors Responsibility Statement

To the best of knowledge and believe and according to the Information and explanations obtained by them, your Directors make the following statement In terms of Section 134(3Xc) of the Companies Act 2013:

a) in the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures. If any;

b) they have selected such accounting provides and applied them consistently and made Judegments 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 loss of the company for the year ended on that date;

c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records to accordance with the provisions of the Companies Act 2913 for safeguarding the assets of the company and for preventing and detecting fraud and other Irregularities;

d) the annual accounts have been prepared on e getting concern basis;

a) that the Directors had laid down Internal financial controls to be followed by the Company and that such Internal financial controls are adequate and were operating effectively and

1) that 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.

4. AUDIT AND AUDITORS'

I.) Statutory Auditors

M/g M A Parikh & Co., Chartered Accountants, Mumbai, Statutory Auditors of the Company, retires at the ensuing Annual General Meeting and are ellgible for reappointment

Your directors recommend the appointment of Mrs. MA Parikh & Co., Chartered Accountants (Firm Registration No.: 107558W) as Statutory Auditors of the Company, subject to approval of the members at the ensuing Annual General Meeting. The Company has received letter from M/6. M A Parikh 4 Co, Chartered Accountants, to the effect that their appointment, If made, would be within the prescribed limits under section 141 of the Companies Act 2013 and that they are not disqualified for such appointment The necessary resolution seeking your approval for appointment of Statutory Auditor has been Incorporated to the Notice convening the Annual General Meeting.

II.) Cost Auditor

As per the requirement of Central Government and pursuant to Section 146 of the Companies act, 2013 read with the Companies (Coal Records and Act) Rules, 2014 as amended from time to time, your Company has been carrying out audit of coat records. The Board of Directors, on the recommendation of Audi Committee, appointed M/s. Preshant Keetekar & Accounting, Practicing Coat Accountants (Firm Registration No. 16076) as Cost Auditors to audit the coat accounts of the Company for the financial year 2014-16 at a remuneration of 7 40,000/- plus applicable taxes and reimbursement of out of pocket expenses As required under the Companies Act, 2013, a resolution seeking member's approval for the ratification of remuneration paid to the Coat Auditor forms part of the Notice convening the Annual General Meeting.

II.) Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Ad, 2013 and rules made thereunder, the Company has appointed Aabld & Co, Company Secrete rise to undertake the Secretarial Audit of the Company. The Secretarial Audit Report Is Included as Annexure-W to this Report.

There no Secretarial Audit qualification for the year under review.

Iv.) Significant and material orders passed by the regulators or courts

There are no significant and material orders passed by the Regulators/Courts that would Imped the going concern status of the Company and to future operations.

v.) Internal control systems and their adequacy

Your Company has an effective internal control end risk mitigation system, which are constantly assessed and strengthened with new/ revised standard operating procedures. The Company's internal control system is commensurate with its size, scale and complexities of its operations. The Internal and operational audit la entrusted to M/a S. K. Sheth 4 Associates, a reputed firm of Chartered Accountants. The main thrust of Internal audit Is to total end review controls, appraisal of risks and business processes, besides bench marketing controls with beat practices in the industry.

The Audit Committee actively reviews the adequacy and effectiveness of the Internal control systems and suggests Improvements to strengthen the same. The Company has a robust Management Information System, which is an integral part of the control mechanism

The Audit Committee, Statutory Auditors end the Business Heads are periodically apprised of the Internal audit findings and corrective actions taken by the management are presented to the Audit Committee. To maintain into objectivity and Independence, the Internal Audi function reports to the Chairman of the Audit Committee.

vt.) Extract of Annual Return

The details forming part of the extract at Annual Return In Form MGT-9, as required under Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, is included in this Report as Annxure- IV and form an integral part of this Report

5. CORPORATE SOCIAL RESPONSIBILITY

Your Company sincerely believes that growth needs to be sustainable In a socially relevant manner. Today's business environment especially in India therefore demands that corporates play a pivotal role in shouldering social responsibility. Your Company i.e committed to the endeavour In social responsIbWes for benefit of the community.

Under the Corporate Social Responsibility (CSR) initiative of the Company 'Arshiya Cares', your Company here pledged to join hands with organizations who are working towards finding simple solutions to the infrastructure problems that India faces. Following CSR Initiatives have been undertaken by your Company In the social front

Emergency Fire Flatting Service: The Mumbai FTWZ at Sal Village, Panvel has a 24x7 emergency fire fighting vehicle (Foam Tender) Inside the zone managed by trained personnel. This service la supported by dedicated Infrastructure which includes:

* File extinguishers and Signage (Fire safely plans)

* Celling based water sprinklers tor the stores and office space Beam Detectors for Smoke and fire Detection

* fire Hydrant System with hose reek and underground water storage tanks

* Emergency Fire axil doors and staircases

* Building Management System with Monitoring and

1 Public address systems to provide emergency response

The above facilities are available 24x7 to the residents In the vidnity of Sal Village and Panval area, free of charge through a toll free number

Emergency Ambulance Service:

The Mumbai FTWZ at Sal Village, Panval has a 24x7 emergency ambulance service dedicated for residents for the vldnlty of Sal VSege and Panval area. Stationed in the premise of the zone, it» equipped with expert staff trained in Trauma treatment This service is available to the local population free of charge through a to I free number.

Electricity Distribution Facility:

At the Mumbai FTWZ at Sal VMsge, Pa rival, your Company has created additional capacity In Its electrical Infrastructure to enable supply of electricity to the surrounding villages.

The Company has under taken above CSR activities on Its own and has not developed and Implemented any Corporate Social Responsibility Policy as required under Section 136 of the Companies Act, 2013, as the said provWone are not applicable.

6. HUMAN RESOURCES

The Company takes pride In the commitment, competence end dedication shown by Its employees in all areas of business.

The Company has a structured Induction process at all locations and management development programs to upgrade skills of managers Objective appraisal systems based on Key Result Areas (KRAs) are in place tor senior management stall.

The Company la committed to nurturing, enhancing and retaining lop talent through superior Learning and Organizational Development. This Is a part of Corporate HR function and Is a critical pillar to support the organization's growth and Its sustainability In the long run.

Further statutory disclosures w.r.t Human Resources are as under

i.) As required by the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated and implemented a policy on Sexual Harassment at workplace with a mechanism of lodging com plaints. Its redressal Is placed on the Intranet for the benefit of Its employees. During the year under review, no complaints were reported to the Board.

II. ) None of the Managerial personnel Is being paid any remuneration and hence the Information required under Section 197(12) of the Companies Act. 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules. 2014 is not relevant,

III. ) One person employed throughout the year, was In receipt of remuneration of 760,00,000/- lacs per annum or more amounting to 7 62,56,771/- and three employees for the part of the year were in receipt of remuneration of 7 5,00,000/- per month or more amounting lo 71.34,93,520/-. As on 31st March, 2015, the Company had 138 employees.

The above annexure is not being sent along with this Report to the members of the company in line with provision of Section 136 of the Companies Act, 2013. Members who are Interested In obtaining these particulars may write to the Company at the Registered office of the Company. The aforesaid annexure Is also available tor Inspection by Members at the Registered Office of the Company, 21 days before the ensuing Annual General Meeting and upto the date of Annual General Meeting during the Business Hours on working days.

None of the employees listed In the said Annexure ta a relative of any director of the Company. None of the employees hold (by himself or along with his spouse and dependent children) more than two percent of the equity shares of the Company.

7. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated raider Clause 48 of the Listing Agreement with the Stock Exchanges In India, Is presented In a separate section forming part of the Annual Report

8. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Vigil Mechanism of the Company, which also Incorporates a Whistle Blower Policy in berms of the Listing Agreement to report genuine concerns or grievances. The Vigil Mechanism/Whistle Blower Policy may be accessed on the Company's website i.e. http://wvre.Brshlvailmtted.oom/lny88tora/CorporgtB Governance

9. RISK MANAGEMENT

Your Company Is well aware of risks associated with Its business operations and various projects under execution. Comprehensively risk management system Is being put In place Involving classification of risk, adoption of risk mitigation measures and a strong mechanism to deal with potential risks and situation leading to rise of risks in an effective manner.

Senior Professionals conversant with risk management systems have been entrusted with the said task with a brief to Implement the risk management

10. HEALTH, SAFETY AND ENVIRONMENT:

As a responsible corporate citizen, your Company lays considerable emphasis on health, safety aspects of Its human capital, operations and overs working conditions. Thus befog constantly aware of Its obligation towards malntaWng and Improving the environment, all possible steps are being taken to meet the toughest environmental standards on pollution, effluents, etc. across various spheres of its business activities.

Arshlya's Rail Infrastructure division especially plays a pivotal role In the mitigation of poluUcn and reduction of fuel used for road travel through is unique Rail solutions that It provides to corporations at part-lndia level.

Your Company hoe Implemented several proactive measures towards ensuring its logistics infrastructures especially the FTWZ in Mumbai and Khurja, along with the Industrial and Distribution Hub which are environment friendly. Faltering measures are being Implemented In Mumbai FTWZ, which will be followed across locations:

* Development of green area: Re-plantation of trees in the FTWZ.

* Conservation of top sol by removing and storing It before the work. The top soll was reused for developing the green areas

* Provision of storm water drainage system to allow ground water recharging

* Sewage Treatment Plant- Water treated In these plants Is being re-utilitzed for watering of the landscaping.

11. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARN NOS AND OUTGO

The Information under Section 134(3Xm) of the Companies Act, 2013 reed with Rule 6 of Company (Accounts) Rules, 2014 for the year ended March 31,2015 Is set out as under

Conservation of Energy. The operations of the company Involve low energy consumption. Adequate measures have been Implemented to conserve energy such as-

* Roof of the warehouses at our FTWZs and Industrial & Distribution Hubs have been designed with MR2* standards with roof Insulation which gives temperature variation of SOetyee with ambient temperature. A provision of installation of solar panels has been made on the roofs to generate renewable energy

* Orientation of the warehouse buildings has been done In such a way that there Is less heat transmission resulting In saving of electricity consumption by mMmlzJng heat lose in the HVAC system.

* Ridge ventilators are Installed at the roof of all WHs, whereby there to no need of power run turbo ventilators, which saves the huge amount of power.

* Cold rooms are having the beet quality Insulations In and floor so as to ensure no leakage of cooing and thus emerging e lot of power. The doors of the cold rooms have been Installed with air curtains so that during operation, internal temperatures to maintained without any loss of cooling.

* The central control room have been Installed with the control panels which controls the temp of odd rooms and monitor automatically, so to achieve the pro-set temparature requirement The chller units are also cantraly controlled.

* Office air conditioning system is having VRV unto, which adjust tire power requirement as per tire required heat toed. The saves a lot of power requirement

* All peripheral and yard Hating Is having auto on and off system, set with the timings, which saves lot of wasteful energy.

* The docking doors are placed to ensure the minimum run by the fork Mb, which reduces large power required for re- charging.

Technology Absorption: Arshlya sincerely believes to utilising technology to Improve productivity, efficiency and quality of Its business operations and working environment

Foreign Exchange Earnings end Outgo:

* Foreign Exchange received - Rs. 7,73,50,314/-

* Foreign Exchange Incurred - 27,97228/-

12. STATUTORY INFORMATION

The Business Responsibility Reporting as required by Clause 55 of the Listing Agreement with tile Stock Exchanges is not applicable to your Company for the financial year ended March 31,2015.

13. APPRECIATION

Your Director wish to piece on record their appreciation for the maintances, support and co-operation received from Government of India, the State Governments and other Government agencies and departments, Investors, bankers, financial Institutions and all other stakeholders.

Your Directors also wish to 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 of Arshlya Limited

Ajay S Mittal Chairman end Managing Director DIN 100226355

Place: Mumbai Dated: 15th May, 2015


Mar 31, 2014

The Members of

Arshiya Limited

The Directors are pleased to present the 33rd Annual Report together with the Audited Accounts for the financial year ended 31st March, 2014.

FINANCIAL PERFORMANCE

A) SUMMARIZED FINANCIAL RESULTS- ARSHIYA LIMITED

(Rs. in Lacs)

Particulars Year ended Year ended 31.03.2014 31.03.2013

Income from operations and other Income 31,654.86 72,432.06

Expenditure 48,974.28 70,337.45

Profit/(Loss) Before Depreciation & Tax (17,319.42) 2094.61

Depreciation 1,958.10 1,990.83

Profit/(Loss) Before Tax & Exceptional Items (19,277.52) 103.78

Exceptional Items (Net) 10,667.35 1,542.95

Prior period Items(Net) (81.36) _

Provision for Taxation (95.83) (38.67)

Profit/(Loss) After Tax (29,767.68) (1,400.50)

Balance brought forward (29,767.68) (1,400.50)

Amount adjusted pursuant to scheme of amalgamation - (7646.06)

Amount available for Appropriation (29,767.68) (1,400.50)

Balance carried to Balance Sheet (29,767.68) (1,400.50)

B) SUMMARIZED CONSOLIDATED FINANCIAL RESULTS - ARSHIYA LIMITED AND ITS SUBSIDIARIES

(Rs. in lacs)

Particulars Year ended Year ended 31.03.2014 31.03.2013

Income from Operations and other Income 53,647,61 114,643,56

Expenditure 100,017.23 127,400.54

Profit/(Loss) Before Tax & Exceptional Items (46,369.62) (12,756,97)

Exceptional Item 21,265.95 542.77

Tax Expenses 2,073.63 (584.42)

Profit/(Loss) After Tax before Minority Interest (84,622.95) (12,715.32)

Less: Minority interest - -

Net Loss for the year (84,622.95) (12,715.32)

On a Consolidated basis your Company has recorded a loss during the previous year. The general overall slowdown in industrial growth and sluggish trend had its negative impact on your Company''s operations. Besides, Your Company had to face various constraints in the day to day operations due to regulatory and other issues which have severely impacted the performance of the Company. The regulatory & operational hurdles impacting the operations of the company are as under:

- Stoppage of Transhipment of cargo from Mumbai Port to FTWZ

- Delays in Duty Drawback

- Non availability of Customs EDI System in FTWZ

- Import General Manifest (IGM) approvals for FTWZs

- Non recognition of Arshiya FTWZ as a port for import.

However, the Company has been consistently taking up these issues at the highest levels of Government and with the new Government in place, it is expected that the issues will be resolved sooner than later to enable smoother day to day operations and better performance.

In the meantime, several initiatives and measures to rationalise expenses, costs, improve effective utilisation of human & material resources to the optimum level have been taken.

Your Management considered it expedient to contain high finance costs so that cash flow can be channelised to operations for further productivity. To effectively service the borrowings and at the same time make the resources available for the day to day operations of the Company, your Management thought it advisable to undertake a Corporate Debt Restructuring (CDR) whereby the Company''s obligations to pay interest and principal on borrowings has been deferred by availing certain concessions like moratorium etc. from the Bankers.

DIVIDEND:

In view of losses, the Directors regret their inability to recommend dividend for the financial year ended 31st March, 2014.

BUSINESS AND FUTURE OUTLOOK:

World class logistics infrastructure on a pan India basis, created by your Company provides for unified supply chain as an unique concept and serves as an one stop shop for all the needs of logistics.

Arshiya plans to capitalize on India''s mammoth logistics opportunity by being India''s only Unified Supply Chain Infrastructure and Solutions Group. With a rich legacy in the logistics and supply chain industry in India, Arshiya''s unique business model makes it a pioneering company in the country.

(I) Arshiya Rail & Rail Infrastructure:

Arshiya Rail Infrastructure started its operations in February 2009. Our unique model has resulted in Arshiya Rail being the second largest Private Container Train Operator (PCTO) in India. This company is operating total 20 container trains at present and mostly in domestic sector. The company stands atop with regard to freight transportation per annum among all PCTO.

(II) Arshiya Free Trade & Warehousing Zones (FTWZ):

Over the last few decades India has been losing investments to neighbouring economies, which were being used by global corporations as bases for feeding India, due to lack of comparable infrastructure availability in India.

With FTWZs developed by Arshiya, our country will be able to leverage ''Soft Infrastructure'' such as skilled manpower, cost competitiveness, regulatory framework, IT connectivity, as well as ''Hard Infrastructure'' such as dedicated state-of-the-art mega logistics parks FTWZs, rail connectivity, industrial & distribution hubs, transport & handling and world class supply chain management services. FTWZ will be a game changer for international as well as domestic companies which are importing, exporting or re-exporting products to and from India.

FTWZ provides assistance to various potential clients for import and export, who struggle hard to recover taxes and duties paid while import of the inputs and other merchandise. They face the burden of spending heavy amounts towards recovery expenses apart from the time consumption or have to forego the duties paid because of lack of provisions. Through FTWZ they reduce their cost burden because of available special provisions in Law.

The first FTWZ developed by Arshiya in Maharashtra near Mumbai/Panvel is a credential for FTWZ concept in India. With over 500 customer base domestic as well as international, India can be proud of providing a successful unified supply chain concept in the country.

Arshiya Northern FTWZ Limited (ANFTWZ), a subsidiary has developed an FTWZ at Khurja to cater to the needs of North India. The state of the art railway siding at Khurja will further reduce the overall logistics cost between gateway ports and FTWZ/ICD.

Being a pioneer in FTWZ business in India, ANFTWZ is facing a few regulatory challenges which have been taken up at the highest level with concerned Government authorities and the authorities are appreciative of the issues and your Management hopes to get all of the issues sorted out at the earliest.

(III) Arshiya Industrial & Distribution Hub:

Your Directors hereby inform you that the operations of AIDHL, a subsidiary has remained sluggish through out the year as its business model was based on implementation of Goods & Services Tax as also FDI in retail taking off. However, both the events have not happened and accordingly your Directors are hereby converting the AIDHL into sector specific SEZ pertaining to IT/ITES/Electronics/Hardware equipments etc. as also setting up an Inland Container Depot and proposes to merge this company into Arshiya Transport and Handling Limited another group company. The necessary Scheme of Amalgamation has been filed with the Hon''ble Bombay High Court and the approvals from concerned authorities have been applied for.

(IV) Arshiya Northern FTWZ Ltd. (ANFTWZ)

Your Directors hereby inform you that the operation of ANFTWZ have remained sluggish due to the regulatory issues being faced by the company and accordingly your Directors are hereby converting the ANFTWZ into sector specific SEZ pertaining to Chemicals/Pharmaceuticals/Bio-technology and proposes to merge this company into Arshiya Transport & Handling Ltd.another group company. The requisite Scheme of Amalgamation has been filed with the Hon''ble Bombay High Court and the approvals from concerned authorities have been applied for.

(V) Arshiya Supply Chain Management Private Limited

Arshiya Supply Chain Management Private Limited provides end-to-end supply & demand chain solutions and is committed to evolving end-to-end strategic solutions across supply chain management by using innovative technology.

Subsidiary Companies [As on 31st March, 2014]

As required under the listing agreements with Stock Exchanges, a consolidated Financial Statement of the Company and all its subsidiaries prepared in accordance with Accounting Standards 21 and 23 issued by the Institute of Chartered Accountants of India (ICAI) giving details of financial resources, assets, liabilities, income, profits, etc. of the Company, its associates and subsidiaries, after elimination of minority interest as a single entity, is annexed. The statement pursuant to section 212(1)(e) of the Companies Act, 1956, containing details of subsidiaries of the Company forms part of the Annual Report.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India dated 8th February, 2011, the annual accounts and other documents of the Subsidiary Companies are not being attached with the Annual Report of the Company. The Annual Accounts of the above referred subsidiaries as at 31st March, 2014, and related detailed information will be made available to any member of the Company/its subsidiaries seeking such information at any point of time and the same will also be available for inspection by any Member of the Company/ its subsidiaries at the Registered Office of the Company. In addition, the Annual Accounts of the said subsidiaries will be made available for inspection at the Registered Office of the respective subsidiary companies.

PREFERENTIAL ALLOTMENT:

The Company had allotted 1,36,00,000 convertible warrants at Rs.145/- per warrant to promoters/ promoters group on preferential basis pursuant to the special resolution passed by the members of the Company at their meeting held on 18th October, 2012. These warrants have been converted into equity shares (in the ratio of 1 share for 1 warrant) of Rs. 21- each at a premium of Rs.143/- per share in three tranches i.e. 53,00,000, 52,50,000 and 30,50,000 during the financial years 2014-2015, 2013-2014 and 2012-2013 respectively.

CORPORATE GOVERNANCE

Your Company has been following the principles of good Corporate Governance over the years and lays strong emphasis on transparency, accountability and integrity. As per clause 49 of the listing Agreement entered into with BSE and NSE, a separate section on Corporate Governance forms part of this Annual Report.

A Certificate from a Practising Company Secretary confirming compliance with the conditions of Corporate Governance under Clause 49 of the listing Agreement is also attached to this Report.

DIRECTORS

Mr. Suhas Thakar - Executive Director ceased to be the director of the Company consequent to the superannuation w.e.f. 31st March, 2014. Mr. Sandesh Chonkar and Mr. James Beltran ceased to Directors consequent to resignation w.e.f. 21s'' August 2013 and 6th September 2013 respectively. Mr. Ajay S Mittal - Managing Director retire by rotation and being eligible, offer himself for re-appointment at the ensuing Annual General Meeting. In accordance with the provisions of Sections 149 of the Companies Act, 2013 these Directors are being appointed as Independent Directors to hold office as per their tenure of appointment mentioned in the notice ensuing Annual General Meeting of the company.

The Company has received declarations from all the Independent Directors of the Company confirming that, they meet the with the criteria of Independence as prescribed both under Section 149(6) of the Companies Act, 2013 & Clause 49 of the Listing Agreement with the Stock Exchanges.

Brief details of the Directors proposed to be appointed /Re - appointed as required under Clause 49 of the Listing Agreement are provided in the notice of the Annual General Meeting forming part of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956, with regard to the Directors'' Responsibility Statement, the Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departures;

b) the selected accounting policies were applied consistently and the Directors 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 loss of the Company for the year ended on that date;

c) Proper and sufficient care has been taken for the 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 fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis.

SECRETARIAL AUDIT REPORT

Your Company had engaged Mr. Manoj Mimani, Practising Company Secretary, to review Secretarial Compliance for the financial year ended 31st March, 2014. The Secretarial Compliance Certificate addressed to the Board of Directors of the Company forms part of this Annual Report. The Secretarial Compliance Certificate confirms that the Company has complied with the applicable provisions of the Companies Act, 1956, Depositories Act, 1996, Listing Agreement with Stock Exchanges and all the Regulations of SEBI as applicable to the Company including SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and the SEBI (Prohibition of Insider Trading) Regulations, 1992.

HUMAN RESOURCES

Human Resource Department of your company is instrumental in building employees capabilities through structured talent acquisition and its development through technical and need based training. For your Company, employees are the most valuable assets. Attracting, training, growing and retaining talented professionals continue to be the focus for Human Resources division of your Company. Pay for performance philosophy helps us in rewarding high performers thereby motivating talent and enhancing retention.

HEALTH, SAFETY AND ENVIRONMENT:

As a responsible corporate citizen, your Company lays considerable emphasis on health, safety aspects of its human capital, operations and overall working conditions. Thus being constantly aware of its obligation towards maintaining and improving the environment, all possible steps are being taken to meet the toughest environmental standards on pollution, effluents, etc. across various spheres of its business activities.

Arshiya''s Rail Infrastructure division especially plays a pivotal role in the mitigation of pollution and reduction of fuel used for road travel through its unique Rail solutions that it provides to corporations at pan-India level.

Your Company has implemented several proactive measures towards ensuring its logistics infrastructures especially the FTWZ in Mumbai and Khurja, along with the Industrial & Distribution Hub are environment friendly. Following measures are being implemented in Mumbai FTWZ, which will be followed across locations:

Development of green area: Re-plantation of trees in the FTWZ.

- Conservation of top soil by removing and storing it before the digging/ piling work. The top soil was re-used for developing the green areas

Provision provided in the storm water drainage system to allow ground water recharging

Sewage treatment plant in all the facilities - Mumbai FTWZ, Khurja FTWZ as well as the Khurja Industrial and distribution Hub. Water treated in these plants is being re-utilized for watering of the landscaping.

CORPORATE SOCIAL RESPONSIBILITY

Your Company sincerely believes that growth needs to be sustainable in a socially relevant manner. Today''s business environment especially in India therefore demands that corporates play a pivotal role in shouldering social responsibility. Your Company is committed to its endeavour in social responsibilities for benefit of the community.

Under the Corporate Social Responsibility (CSR) initiative of the Company Arshiya Cares'', your Company has pledged to join hands with organizations who are working towards finding simple solutions to the infrastructure problems that India faces. Following CSR initiatives have been undertaken by your Company in the social front:

Emergency Fire Fighting Service: The Mumbai FTWZ at Sai Village, Panvel has a 24x7 emergency fire fighting vehicle (Foam Tender) inside the zone managed by trained personnel. This service is supported by dedicated infrastructure which includes

> Fire extinguishers and Signage (Fire safety plans)

Ceiling based water sprinklers for the stores and office space Beam Detectors for Smoke and Fire Detection

Fire Hydrant System with hose reels and underground water storage tanks

- Emergency Fire exit doors and staircases

- Building Management System with Monitoring and

Public address systems to provide emergency response

The above facilities are available 24x7 to the residents in the vicinity of Sai Village and Panvel area, free of charge through a toll free number

Emergency Ambulance Service:

The Mumbai FTWZ at Sai Village, Panvel has a 24x7 emergency ambulance service dedicated for residents in the vicinity of Sai Village and Panvel area. Stationed in the premise of the zone, it is equipped with expert staff trained in Trauma treatment. This service is available to the local population free of charge through a toll free number.

Electricity Distribution Facility:

At the Mumbai FTWZ at Sai Village, Panvel, your Company has created additional capacity in its electrical infrastructure to enable supply of electricity to the surrounding villages.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required under Section 217(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 are set out as under:

Conservation of Energy: The operations of the company involve low energy consumption. Adequate measures have been implemented to conserve energy such as -

- Roof of the warehouses at our FTWZs and Industrial & Distribution Hubs have been designed with MR24 standards with roof insulation which gives temperature variation of 8Degree with ambient temperature. A provision of installation of solar panels has been made on the roofs to generate renewable energy

- Orientation of the warehouse buildings has been done in such a way that there is less heat transmission resulting in saving the electricity consumption by minimizing heat loss in the HVAC system.

Technology Absorption: Arshiya sincerely believes in utilising technology to improve productivity, efficiency and quality of its business operations and working environment.

Foreign Exchange Earnings and Outgo:

Foreign Exchange received - Rs. 108,794,746/- Foreign Exchange incurred - Rs. 11,999,650/-

PARTICULARS OF EMPLOYEES

Pursuant to the provisions 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 set out in the Annexure to the Directors Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all members of the Company. Any member, who is interested in obtaining such particulars about the employees, may write to the Company at Registered Office of the Company.

AUDITORS'' REPORT

The observations in the Auditors Report are self explanatory and need no further explanations.

With respect to the comment of the Statutory Auditors in note 48(H) to financial statement your Directors wish to clarify that the company is in process of making an application to the central Government in the respect and that the said executive director was a professional non-promoter Director of the Company.

Further notes to the financial statements, as referred in the Auditors Report, are self-explanatory and therefore do not call for any further comments and explanations under section 217(3) of the Companies Act, 1956.

AUDITORS

M/s M.A Parikh & Co., Chartered Accountants, Mumbai, Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for reappointment.

Your directors recommend the appointment of M/s. M.A Parikh & Co., Chartered Accountants (Firm Registration No.: 107556W) as Statutory Auditors of the Company, subject to approval of the members at the ensuing Annual General Meeting. The Company has received letter from M/s. M.A Parikh & Co, Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under section 141 of the Companies Act, 2013 and that they are not disqualified for such appointment. The necessary resolution seeking your approval for appointment of Statutory Auditor has been incorporated in the Notice convening the Annual General Meeting.

ACKNOWLEDGEMENT

Your Directors would like to express their gratitude for the assistance, support and co-operation received from Government of India, the State Governments and other Government agencies and departments, investors, bankers, financial institutions and all other stakeholders.

Your Directors also wish to 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

Ajay S Mittal Chairman & Managing Director

DIN:00226355

Place: Mumbai. Dated: 9th July, 2014


Mar 31, 2013

To The Members of Arshiya International Ltd.

The Directors are pleased to present the 32nd Annual Report together with the Audited Accounts for the financial year ended 31st March, 2013.

FINANCIAL PERFORMANCE

A) SUMMARIZED FINANCIAL RESULTS- ARSHIYA INTERNATIONAL LTD.

(Rs. in Lacs)

Year ended 31.03.13 Year ended 31.03.12

Income from operations and other Income 72432.06 63000.79

Expenditure 70337.45 54438.59

Profit/(Loss) Before Depreciation & Tax , 2094.61 8562.20

Depreciation 1990.83 1642.79

Profit/(Loss) Before Tax & Exceptional Items 103.78 6919.41

Exceptional Items 1542.95

Provision for Taxation (38.67) 2168.23

Prof it/(Loss) After Tax (1400.50) 4751.18

Balance B/f 7646.06 4332.11

Amount adjusted pursuant to scheme of amalgamation (7646.06)

Amount available for Appropriation (1400.50) 9083.29

Proposed Dividend 823.61

Dividend Tax 133.61

Transfer to General Reserve * 480.00

Balance Carried to Balance Sheet (1400.50) 7646.06

B) SUMMARIZED CONSOLIDATED FINANCIAL RESULTS - ARSHIYA INTERNATIONAL LTD AND ITS SUBSIDIARIES

(Rs. in Lacs) Year ended 31.03.13 Year ended 31.03.12

Income from Operations and other Income 114643.56 106487.38

Expenditure 127400.54 92300.74

Profit/(Loss) Before Tax & Exceptional Items (12756.97) 14186.63

Exceptional Item 542.77

Tax Expense (584.42) 2106.64

ProfitV(Loss) After Tax before Minority Interest (12715.32) 12079.99

Less: Minority interest

Net Loss for the year (12715.32) 12079.99

On a Consolidated basis your Company has recorded a loss aftertax over the previous year. The general overall slow down in industrial growth and sluggish trend had its negative impact on your Company''s operations. Besides, Your Company had to face various constraints in the day to day operations due to regulatory and other issues which have been severely impacting the progressive and profitable operations of the Company such as:

- Stoppage ofTranshipment of cargo from Mumbai Portto FTWZ

- Delays in Duty Drawback

- Non availability of Customs EDI System in FTWZ

- Import General Manifest (IGM) approvals for FTWZs

- Non recognition of Arshiya FTWZ as a port for import of few items especially Cars

However, the Company has taken up these issues at the highest levels of Government and it is expected that the issues will be resolved early to enable smoother day to day operations and better performance.

In the mean time, several initiatives and measures to rationalise expenses, costs, improve effective utilisation of human and material resources to the optimum level have been taken. In view of the above, various steps have been taken viz. downsizing of excess personnel to make it a lean and effective organisation, termination of certain contractual arrangements at different locations across the country to be cost effective, monitoring utilisation of equipment more efficiently and overall general cost control, austerity measures etc. to list a few. Your Directors are contemplating to explore the Inventory/REPO financing of commodities by gobal financiers for clients in the Indian market, a non-existent business in India till now and which was being transacted out of Free Trade Zones in Singapore and Dubai to service the Indian market.

Your Directors felt it expedient to contain high finance costs, chanalise cash flow for operations leading to more productivity, Debt servicing and to make the resources available for the day to, day operations of the Company, Your Directors felt the necessity to seek a Corporate Debt Restructuring (CDR) whereby the Company''s obligations to pay interest and principal on borrowings could be deferred, availing of certain concessions like moratorium for payments etc. from the Bankers. Accordingly, the Company''s CDR proposals are before the Bankers and the same are being favorably considered and the procedural process is under progress.

DIVIDEND:

In view of losses, the Directors regret their inability to recommend dividend for the financial year ended 31st March 2013.

BUSINESS AND FUTURE OUTLOOK:

World class logistics infrastructure on a pan India basis created by your Company provides for unified supply chain as a unique concept and serves as a one stop shop for all the needs of logistics. There is no doubt this has revolutionised the logistics space in the country.

Arshiya plans to capitalize on India''s mammoth logistics opportunity by being India''s only Unified Supply Chain Infrastructure and Solutions Group. With a rich legacy in the logistics and supply chain industry in India, Arshiya''s unique business model makes it a pioneering company, not just in India, but world over. (1) Arshiya Free Trade & Warehousing Zones (FTWZ):

Over the last few decades, India has been losing investments to neighbouring economies, which were being used by global corporations as bases for feeding India, due to lack of comparable infrastructure availability in India.

With FTWZs developed by Arshiya, our country will be able to leverage ''Soft Infrastructure'' such as skilled manpower, cost competitiveness, regulatory framework, IT connectivity, as well as ''Hard Infrastructure'' such as dedicated state-of-the-art mega logistics parks FTWZs, rail connectivity, industrial & distribution hubs, transport & handling and world class supply chain management services. FTWZ will be a game changer for international as well as domestic companies which are importing, exporting or re-exporting products to and from India.

The first FTWZ developed in Maharashtra near Mumbai/Panvel is a credential for FTWZ concept in India. With over 500 customer base domestic as well as international, India can be proud of providing a successful unified supply chain concept in the country.

Arshiya Northern FTWZ Limited (ANFTWZ), a subsidiary has developed an FTWZ at Khurja to cater to the needs of North India.

FTWZ provides assistance to various potential clients for import and export, who struggle hard to recover taxes and duties paid while import of the inputs and other merchandise. They face the burden of spending heavy amounts towards recovery expenses apart from the time consumption or have to forego the duties paid because of lack of provisions. Through FTWZ they reduce their cost burden because it being a deemed foreign territory.

FTWZ clients can also make use of the ICD facilities at Khurja to reduce the overall logistics costs. The state of the art railway siding at Khurja will further reduce the overall logistics cost between gateway ports and FTWZ/ICD.

Being a pioneer in FTWZ business in India, ANFTWZ is facing a few regulatory challenges which have been taken up at the highest level with concerned Government authorities and the authorities are appreciative of the issues and your Management hopes to get most of the issues resolved early.

(II) Arshiya Rail & Rail Infrastructure:

Arshiya Rail Infrastructure Limited (ARIL) started its operations in February 2009. Our unique model has resulted in Arshiya Rail being the second largest Private Container Train Operator (PCTO) in India. This company is operating total 21 container trains at present and mostly in domestic sector. The company stands atop with regard to freight transportation per annum among all PCTO. Being a pan India operator, the company renders services across all parts of India including major ports.

(lll)Arshiya Industrial & Distribution Hub:

Your Directors are glad to inform that Arshiya Industrial & Distribution Hub Limited (AIDHL), a subsidiary is in the process of setting up an Inland Container Depot (ICD) at Khurja, U.P.

ICD of AIDHL will be located just 35 km distance from Sikandrabad Industrial Area (SIA) and the said SIA is clustered with a large number of major industries like Kajaria Ceramic, Orient Ceramics, Berger Paints, food grains, meat products etc.who presently are doing their Import/Export business through other ICD''s. Once the proposed Arshiya ICD becomes operational, SIA imports and exports will be covered, besides the imports and export business of Rudrapur and Haridwar Industrial Area and also exports of wheat, rice, cotton and sugar from Bulandshahr region. In addition to handling export cargo, ICD will also provide direct Rail connectivity from gateway port: JNPT and Mundra to Khurja which will increase the consignment velocity and also reduce the overall logistics cost.

Pursuant to the efforts of AIDHL, the Government of India, Ministry of Commerce and Industry has recently issued a Letter of Intent (LOI) for setting up of the ICD at Khurja.

Central Board of Excise and Customs (CBEC) is in the process of issuing a gazette notification in this regard. (IV) Arshiya Supply Chain Management:

Arshiya Supply Chain Management Private Limited, a FTWZ Unit provides end-to-end supply & demand chain solutions and is committed to evolving end-to-end strategic solutions across supply chain management by using innovative technology.

As required under the listing agreements with Stock Exchanges, a consolidated Financial Statement of the Company and all its subsidiaries prepared in accordance with Accounting Standards 21 and 23 issued by the Institute of Chartered Accountants of India (ICAI) giving details of financial resources, assets, liabilities, income, profits, etc. of the Company, its associates and subsidiaries, after elimination of minority interest as a single entity, is annexed. In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India dated

8th February, 2012, the annual accounts and other documents of the Subsidiary Companies are not being attached with the Annual Report of the Company. The Annual Accounts of the above referred subsidiaries as at 31st March, 2013, and related detailed information will be made available to any member of the Company/its subsidiaries seeking such information at any point of time and the same will also be available for inspection by any Member of the Company/ its subsidiaries at the Registered Office of the Company. In addition, the Annual Accounts of the said subsidiaries will be made available for inspection at the Registered Office of the respective subsidiary companies.

AMALGAMATION OF SUBSIDIARY COMPANIES During the year, Arshiya FTWZ Limited (AFWZL) and Arshiya Domestic Distripark Limited (ADDL)wholly owned subsidiaries have been merged with the Company pursuant to the order under Section 391 to 394 of the Companies Act, 1956 dated 7th December, 2012 passed by Bombay High. PREFERENTIAL ALLOTMENT:

The Company, during the year issued and allotted 136,00,000 Warrants of Rs. 145 each Convertible into equal number of Equity Shares of Rs. 21- each in the capital of the Company to Promoter/Promoter Group pursuant to the Special Resolution passed at the Extra-Ordinary General Meeting held on 18th October, 2012 . Out of the above, 30,50,000 Warrants being fully paid up were converted into Equity Shares of Rs. 21- each at a premium of Rs.143 per share as per the terms of issue. The proceeds of issue of Warrants have been utilised for the purposes they were issued.

CORPORATE GOVERNANCE

Your Company has been following the principles of good Corporate Governance over the years and lays strong emphasis on transparency, accountability and integrity. As per clause 49 of the Listing Agreement entered into with BSE and NSE, a separate section on Corporate Governance forms part of this Annual Report.

A Certificate from a Practising Company Secretary confirming compliance with the conditions of Corporate Governance under Clause 49 of the Listing Agreement is also attached to this Report.

DIRECTORS

Mr. Mukesh Kacker and Mr. Sandesh Chonkar, Directors, retire by rotation and being eligible, offer themselves for re- appointment at the ensuing Annual General Meeting.

Major Suhas Thakar (Retd.) has been appointed as Additional Director with effect from 1s''June 2013, pursuant to the provisions of Section 260 of the Companies Act, 1956 to hold office till the ensuing Annual General Meeting of the Company. The Company has received notice under Section 257 of the Companies Act, 1956 proposing his appointment as Director of the Company liable to retire by rotation. Members may approve the appointment of Major Suhas Thakar (Retd.) as Director of the Company.

Your Board has appointed Major Suhas Thakar (Retd.) as Executive Director of the Company for a period of 3 years with effect from 1st June 2013 upto 31st May, 2016 subject to approval of the Members at the forthcoming Annual General Meeting.

DIRECTORS RESPONSIBILITY STATEMENT

- In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956, with regard to the Directors'' Responsibility Statement, the Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departures;

b) the selected accounting policies were applied consistently and the Directors 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 loss of the Company for the year ended on that date;

c) Proper and sufficient care has been taken for the 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 fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis.

SECRETARIAL AUDIT REPORT

Your Company had engaged Mr. P.K.B. Nambiar, Practising Company Secretary, to review Secretarial Compliance for the financial year ended 31st March, 2013. The Secretarial Compliance Certificate addressed to the Board of Directors of the Company forms part of this Annual Report.

The Secretarial Compliance Certificate, although not mandatory, is also obtained on a quarterly basis and reviewed by the Board.

HUMAN RESOURCES

For your Company, employees are the most valuable assets. Attracting, training, growing and retaining talented professionals continue to be the focus for Human Resources division of your Company. Pay for performance philosophy helps us in rewarding high performers thereby motivating talent and enhancing retention. Considering the current business need, there was rationalization of the human resource in the Company and accordingly the work force has been reduced during the year to make it to the optimum level.

HEALTH, SAFETY AND ENVIRONMENT:

As a responsible corporate citizen, your Company lays considerable emphasis on health, safety aspects of its human capital, operations and overall working conditions. Thus being constantly aware of its obligation towards maintaining and improving the environment, all possible steps are being taken to meet the toughest environmental standards on pollution, effluents, etc. across various spheres of its business activities.

Arshiya''s Rail Infrastructure division especially plays a pivotal role in the mitigation of pollution and reduction of fuel used for road travel through its unique Rail solutions that it provides to corporations at pan-India level.

Your Company has implemented several proactive measures towards ensuring its logistics infrastructures especially the FTWZ in Mumbai and Khurja, along with the Industrial & Distribution Hub are environment friendly. Following measures are being implemented in Mumbai FTWZ, which will be followed across locations:

- Rain water harvesting.

- Development of green area: Re-plantation of 7000 trees in the FTWZ.Conservation of top soil by removing and storing it before the digging/ piling work. The top soil was re-used for developing the green areas.

- Developed water bodies as natural storage and utilizing the water from it, throughout the year.

- Provision provided in the storm water drainage system to allow ground water recharging.

- Sewage treatment plant in all the facilities - Mumbai FTWZ, Khurja FTWZ as well as the Khurja Industrial and Distribution Hub. Water treated in these plants is being re-utilized for watering of the landscaping.

CORPORATE SOCIAL RESPONSIBILITY

Your Company sincerely believes that growth needs to be sustainable in a socially relevant manner. Today''s business environment especially in India therefore demands that corporates play a pivotal role in shouldering social responsibility. Your Company is committed to its endeavour in social responsibilities for benefit of the community.

Under the Corporate Social Responsibility (CSR) initiative of the Company ''Arshiya Cares'', your Company has pledged to join hands with organizations who are working towards finding simple solutions to the infrastructure problems that India faces. Following CSR initiatives have been undertaken by your Company on the social front:

Emergency Fire Fighting Service:

The Mumbai FTWZ at Sai Village, Panvel has a 24x7 emergency fire fighting vehicle (Foam Tender) inside the zone managed by trained personnel.

This service is supported by dedicated infrastructure which includes

- Fire extinguishers and Signage (Fire safety plans)

- Ceiling based water sprinklers for the stores and office space

- Beam Detectors for Smoke and Fire Detection

- Fire Hydrant System with hose reels and underground water storage tanks

- Emergency Fire exit doors and staircases

- Building Management System with Monitoring and Public address systems to provide emergency response

Available 24x7 to the residents in the vicinity of Sai Village and Panvel area, free of charge through a toll free number

Emergency Ambulance Service: The Mumbai FTWZ at Sai Village, Panvel has a 24x7 emergency ambulance service dedicated for residents in the vicinity of Sai Village and Panvel area. Stationed in the premise of the zone, it is equipped with expert staff trained in Trauma treatment. This service is available to the local population free of charge through a toll free number.

Electricity Distribution Facility:

At the Mumbai FTWZ at Sai Village, Panvel, your Company has created additional capacity in its electrical infrastructure to enable supply of electricity to the surrounding villages.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

- Information as required under Section 217(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 are set out as under:

Conservation of Energy: The operations of the company involve low energy consumption. Adequate measures have been implemented to conserve energy such as -

- Roof of the warehouses at our FTWZs and Industrial & Distribution Hubs have been designed with MR24 standards. A provision of installation of solar panels has been made on the roofs to generate renewable energy

- Orientation of the warehouse buildings has been done in such a way that there is less heat transmission resulting in saving the electricity consumption by minimizing heat loss in the HVAC system.

Technology Absorption: Arshiya sincerely believes in utilising technology to improve productivity, efficiency and quality of its business operations and working environment.

Foreign Exchange Earnings and Outgo:

- Foreign Exchange received-Rs. 12,064.66 lacs

- Foreign Exchange incurred-Rs. 5,946.71 lacs

- PARTICULARS OF EMPLOYEES

Pursuant to the provisions 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 set out in the Annexure to the Directors Report. However, as per the provisions of Section 219(1 )(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all members of the Company. Any member, who is interested in obtaining such particulars about the employees, may write to the Company at Registered Office of the Company.

AUDITORS'' REPORT

Though there are no qualifications in the Auditors Report there are certain issues which have been highlighted viz 1) Remuneration paid to the Chairman and Managing Director which has turned out to be in excess of the limits prescribed under Section 198 read with Schedule XIII of the Companies Act, 1956 hence it is subject to Central Government approval, the management is making necessary application to the Central Government in this behalf. 2) Financial stress on the Company which is reflected by an increase in receivables and payables, delay in full and final settlement dues, statutory dues are in arrears, dues to banks, a financial institution and a non banking institution are pending, certain lenders have filed cases against the Company and directors for dishonor of cheques, to mitigate this, Company has undertaken various cost cutting measures and have opted for a corporate debt restructuring plan which has been admitted and is under consideration of the CDR Cell and Company is also in the process of settling the full and final settlement dues.

Weakness in Internal control systems has been observed and the management is taking steps to further strengthen the internal control systems.

AUDITORS

M/s MGB &Co., Chartered Accountants, Mumbai, Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for reappointment.

The Company has received a certificate from M/s MGB & Co., Chartered Accountants, Mumbai, confirming that their appointment, if made, would be in accordance with the provisions of Section 224 (1B) of the Companies Act, 1956.

ACKNOWLEDGEMENT

Your Directors would like to express their gratitude for the assistance, support and co-operation received from Government of India, the State Governments and other Government agencies and departments, investors, bankers, financial institutions and all other stakeholders.

Your Directors also wish to 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: Mumbai. A/ay S Mittal

Dated: 30th May, 2013. Chairman & Managing Director


Mar 31, 2012

To The Members of Arshiya International Ltd.

The Directors are pleased to present the 31st Annual Report together with the Audited Accounts for the financial year ended 31st March, 2012.

A) SUMMARIZED FINANCIAL RESULTS- ARSHIYA INTERNATIONAL LTD

(Rs. in Lacs)

Year ended Year ended 31.03.2012 31.03.2011

Income from operations and other Income 63,000.80 47,542.53

Expenditure 54,438.59 43,145.22

Profit Before Depreciation & Tax 8,562.20 4,397.30

Depreciation 1,642.79 696.10

Profit Before Tax & Exceptional Items 6,919.41 3,701.21

Prior period Items(Net) (11.10) 19.49

Provision for Taxation 2,168.23 1,152.27

Profit After Tax 4,751.18 2,493.40

Balance B/f 4,332.11 2,909.18

Amount available for Appropriation 9,083.29 5,402.58

Proposed Dividend 823.61 705.95

Dividend tax 133.61 114.52

Transfer to General Reserve 480.00 250.00

Balance Carried to Balance Sheet 7,646.06 4,332.11

FINANCIAL PERFORMANCE

Income from Operations, along with other income has increased by more than 32.51% as compared to the previous year. The Profit before Tax has recorded increase of 86.95% over that of the previous year and the Profit After Tax has increased by 90.55% as against the previous financial year.

B) SUMMARIZED CONSOLIDATED FINANCIAL RESULTS-ARSHIYA INTERNATIONAL LTD AND ITS SUBSIDIARIES

(Rs. in Lacs)

Year ended Year ended 31.03.2012 31.03.2011

Income from Operations and other Income 106,487.38 82,435.82

Expenditure 92,300.74 72,765.25

Profit Before Tax & Exceptional Items 14,186.63 9,670.57

Profit After Tax before Minority Interest 12,079.98 8,223.01

Less Minority Interest - 22.36

Net Profit for the year 12,079.98 8,200.65

On a Consolidated basis your Company has recorded a 29.18% increase in income and 47.31% increase in profit after tax over the previous year.

DIVIDEND

The Directors recommend a dividend @ 70%. i.e. Rs. 1.40 per equity share of Rs. 2 for the financial year ended 31d March, 2012 The Dividend on Equity Shares, if approved by the Members, would involve a cash outflow of Rs. 957.22 Lacs including dividend tax.

TRANSFER TO RESERVES

Your Directors propose to transfer a sum of Rs. 480 Lacs to the General Reserve Account for the year ended 31st March, 2012.

BUSINESS AND FUTURE OUTLOOK

Your Company has over the past few years continuously and steadily strived to improve the logistics landscape in our country. Beginning with a strong foothold in the asset light logistics services industry, your Company embarked on a journey to create world class logistics infrastructure on a pan India basis which would provide natural integration to its core logistics business and revolutionize the logistics space in India.

Arshiya plans to capitalize on India s mammoth logistics opportunity by being India s only Unified Supply Chain Infrastructure and Solutions Group. With 11 year legacy in the logistics and supply chain industry in India servicing over 1,500 customers including over 275 at Arshiyas FTWZs alone, Arshiyas unique business model makes it a pioneering company, not just in India but world over. With a planned investment outlay of USD 1.6 billion, your Company will be the industry pioneer in development and operations of state-of-the-art logistics infrastructure solutions across strategic locations in India. Your Companys sole mission is to provide India with the logistics infrastructure solutions that would allow this great nation to capitalize on its true macro- economic potential.

The Mumbai FTWZ has seen phenomenal growth over the year gone by and the Khurja FTWZ near New Delhi too has seen a strong traction of customers. In the rail space, your Company has signed a long term deal with GATX India to lease its rakes to Arshiya Rail. This move will help Arshiya Rail migrate its business to a capex lean model, resulting in lower gearing and improved margins. With this development and the commissioning of our logistics hub in Khurja, your Company extremely positive about the coming year.

(I) Arshiya Free Trade & Warehousing Zones (FTWZ):

The FTWZ regulatory framework has given India the much needed impetus to drive its economic growth to the next level, truly leveraging the nation s vast domestic market and growing purchasing power parity. Over the last few decades India has been losing investments to neighbouring economies, which were being used by global corporations as bases for feeding India, due to lack of comparable infrastructure availability in India.

With FTWZs developed by Arshiya, our country will be able to leverage Soft Infrastructure such as skilled manpower, cost competitiveness, regulatory framework, IT connectivity, as well as Hard Infrastructure such as dedicated state-of-the- art mega logistics parks FTWZs, rail connectivity, industrial & distribution hubs, transport & handling and world class supply chain management services. FTWZ will be a game changer for international as well as domestic companies which are importing, exporting or re-exporting products to and from India.

(II) Arshiya Rail & Rail Infrastructure:

Arshiya Rail Infrastructure started its operations in February 2009. As at 31st March, 2012, Arshiya Rail has 20 trains to its pan India operations in Phase 1. Our unique model has resulted in Arshiya Rail being the second largest and the most profitable Private Container Train Operator (PCTO) in India.

(III) Arshiya Industrial & Distribution Hub Ltd.

Arshiya Industrial & Distribution Hub is a venture designed to provide companies with a strategic hub warehousing for domestic consolidation of goods. These rail-connected mega consolidation hubs will result in considerable time and cost reduction.

The first of Arshiya s five planned Industrial & Distribution Hub is strategically located at the confluence of the Eastern and Western freight corridors at Khurja (near Delhi), in the state of Uttar Pradesh. It is further benefited by the adjoining presence of the modern high-capacity Rail Terminal developed by Arshiya Rail infrastructure and Arshiyas FTWZ. It will allow companies to access ports and the hinterland through both the freight corridors. This debottlenecked location, helps companies to cut down drastically on so-called inevitable transportation expenses, prevalent in India.

(IV) Arshiya Forwarding

With a decade of lineage in integrated logistics solution Arshiya forwarding offers end-to-end Freight Management, Transportation, Document Management, Customs Clearance and Project Logistics services across the network of 150 countries worldwide.

(V) Arshiya Supply Chain Management

Arshiya Supply Chain Management provides end-to-end supply & demand chain solutions and is committed to evolving end-to- end strategic solutions across supply chain management by using innovative technology.

Group Subsidiary Companies and Consolidated Financial Results

The Company has following subsidiaries as on 31st March, 2012. Arshiya Domestic Distripark Ltd

Arshiya Industrial & Distribution Hub Limited (formerly known as

Arshiya Northern Domestic Distripark Limited)

Arshiya FTWZ Limited

Arshiya Central FTWZ Limited

Arshiya Northern FTWZ Limited

Arshiya Rail Infrastructure Ltd

Arshiya Rail Siding & Infrastructure Limited

Arshiya Supply Chain Management Pvt Ltd

Arshiya Transport and Handling Ltd

Arshiya Hongkong Ltd. and its following subsidiary

Arshiya Logistics LLC, Dubai

Arshiya International Singapore Pte Ltd

Cyberlog Technologies International Pte Ltd

Cyberlog Technologies Hongkong Limited

Arshiya Technologies (India) Pvt. Limited

Cyberlog Technologies (UAE) FZE

The Group also include Ajay & Archana Mittal Family Private Trust as defined in erstwhile MRTP Act, 1969.

As required under the listing agreements with Stock Exchanges, a consolidated Financial Statement of the Company and all its subsidiaries prepared in accordance with Accounting Standards 21 and 23 issued by the Institute of Chartered Accountants of India (ICAI) giving details of financial resources, assets, liabilities, income, profits, etc. of the Company, its associates and subsidiaries, after elimination of minority interest as a single entity, is annexed.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India dated 8th February, 2012, the annual accounts and other documents of the Subsidiary Companies are not being attached with the Annual Report of the Company. The Annual Accounts of the above referred subsidiaries as at 31st March, 2012, and related detailed information will be made available to any member of the Company/its subsidiaries seeking such information at any point of time and the same will also be available for inspection by any Member of the Company/ its subsidiaries at the Registered Office of the Company and will be available on the website of the Company. In addition, the Annual Accounts of the said subsidiaries will be made available for inspection at the Registered Office of the respective subsidiary companies.

During the year under report /review, seven step down subsidiaries of the Company, viz. Arshiya Southern Domestic Distripark Ltd., Arshiya Eastern Domestic Distripark Ltd., Arshiya Western Domestic Distripark Ltd., Arshiya Central Domestic Distripark Ltd., Arshiya Exim Trading Ltd., Arshiya Eastern FTWZ Ltd., Arshiya Western FTWZ Ltd. have ceased to be step down subsidiaries of your Company. Further, another step-down subsidiary of your Company, Cyberlog Technologies Inc., USA has been dissolved.

AMALGAMATION OF SUBSIDIARY COMPANIES

The wholly owned subsidiaries of your Company viz. Arshiya FTWZ Limited (AFTWZL) and Arshiya Domestic Distripark Limited (ADDL) are in the process of getting merged with your Company and necessary petitions have been presented before the Bombay High Court.

CORPORATE GOVERNANCE

Your Company has been following the principles of good Corporate Governance over the years and lays strong emphasis on transparency, accountability and integrity. As per clause 49 of the listing Agreement entered into with BSE and NSE, a separate section on Corporate Governance forms part of this Annual Report.

A Certificate from a Practising Company Secretary confirming compliance with the conditions of Corporate Governance under Clause 49 of the listing Agreement is also attached to this Report.

DIRECTORS

Mr. Ashish Bairagra and Mr. Rishabh R Shah, Directors, retire by rotation and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting.

Mr. V. Shivkumar opted for retirement from the Board w.e.f. 14"1 May, 2012. The Board acknowledges and places on record its deep appreciation of the valuable contributions made by Mr. V. Shivkumar as an Executive Director of the Company.

ARSHIYA EMPLOYEE STOCK OPTION PLAN 2007

Employee Stock Option Plan 2007 is now administered by the Compensation Committee of the Board. The applicable disclosures required under Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as at 31st March, 2012, are set out in Annexure I to this Report.

Your Company has received a certificate from the Auditors of the Company that the Scheme has been implemented in accordance with the SEBI Guidelines and the resolution passed by the shareholders. The certificate would be placed at the Annual General Meeting for inspection by members.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2 A A) of the Companies Act, 1956, with regard to the Directors Responsibility Statement, the Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departures;

b) the selected accounting policies were applied consistently and the Directors 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 of the Company for the year ended on that date;

c) Proper and sufficient care has been taken for the 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 fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis.

SECRETARIAL AUDIT REPORT

Your Company had engaged Mr. P.K.B. Nambiar, Practising Company Secretary, to review Secretarial Compliance for the financial year ended 31st March, 2012. The Secretarial Compliance Certificate addressed to the Board of Directors of the Company forms part of this Annual Report. The Secretarial Compliance Certificate confirms that the Company has complied with the applicable provisions of the Companies Act, 1956, Depositories Act, 1996, Listing Agreement with Stock Exchanges and all the Regulations of SEBI as applicable to the Company including SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and the SEBI (Prohibition of Insider Trading) Regulations, 1992.

The Secretarial Compliance Certificate, although not mandatory, is also obtained on a quarterly basis and reviewed by the Board.

HUMAN RESOURCES

For your Company, employees are the most valuable assets. Attracting, training, growing and retaining talented professionals continue to be the focus for Human Resources division of your Company. This division focuses on creating an organization which nurtures continuous improvement and innovation in management practices. Your Company recognizes the need to attract best-in-class talent from diverse domains and industries. Accordingly, hiring practices have been improvised to help identify the best talent in a cost effective manner. Pay for performance philosophy helps us in rewarding high performers thereby motivating talent and enhancing retention. Over the year, your Company has added key senior management as well as middle management resources across divisions. The Arshiya Global Internship Program has helped international management students to work on live projects on a real time basis and get hands on experience of working in India. The Human Resources at Arshiya will continue its focus on enhancing the service levels and creating a culture of employee friendly environment.

HEALTH, SAFETY AND ENVIRONMENT:

As a responsible corporate citizen, your Company lays considerable emphasis on health, safety aspects of its human capital, operations and overall working conditions. Thus being constantly aware of its obligation towards maintaining and improving the environment, all possible steps are being taken to meet the toughest environmental standards on pollution, effluents, etc. across various spheres of its business activities.

Arshiyas Rail Infrastructure division especially plays a pivotal role in the mitigation of pollution and reduction of fuel used for road travel through its unique Rail solutions that it provides to corporations at pan- India level.

Your Company has implemented several proactive measures towards ensuring its logistics infrastructures especially the FTWZ in Mumbai and Khurja, along with the Industrial & Distribution hub are environment friendly. Following measures are being implemented in Mumbai FTWZ, which will be followed across locations:

Rain water harvesting

Development of green area: Re-plantation of 7000 trees in the FTWZ

Conservation of top soil by removing and storing it before the digging/ piling work. The top soil was re-used for developing the green areas Developed water bodies as natural storage and utilizing the water from it, throughout the year.

Provision provided in the storm water drainage system to allow ground water recharging Sewage treatment plant in all the facilities - Mumbai FTWZ, Khurja FTWZ as well as the Khurja Industrial and Distribution Hub. Water treated in these plants is being re-utilized for watering of the landscaping.

CORPORATE SOCIAL RESPONSIBILITY

Your Company sincerely believes that growth not only needs to be profitable and competitive, but also sustainable in a socially relevant manner. Todays business environment especially in India therefore demands that corporates play a pivotal role in shouldering social responsibility. Your Company is committed to its endeavour in social responsibilities for benefit of the community.

Under the Corporate Social Responsibility (CSR) initiative of the Company Arshiya Cares, your Company has pledged to join hands with organizations who are working towards finding simple solutions to the infrastructure problems that India faces. Following CSR initiatives have been undertaken by your Company in the social front:

Emergency Fire Fighting Service: The Mumbai FTWZ at Sai Village, Panvel has a 24x7 emergency fire fighting vehicle (Foam Tender) inside the zone managed by trained personnel. This service is supported by dedicated infrastructure which includes

Fire extinguishers and Signage (Fire safety plans)

Ceiling based water sprinklers for the stores and office space

Beam Detectors for Smoke and Fire Detection

Fire Hydrant System with hose reels and underground water storage tanks

Emergency Fire exit doors and staircases

Building Management System with Monitoring and

Public address systems to provide emergency response

Available 24x7 to the residents in the vicinity of Sai Village and Panvel area, free of charge through a toll free number

Emergency Ambulance Service:

The Mumbai FTWZ at Sai Village, Panvel has a 24x7 emergency ambulance service dedicated for residents in the vicinity of Sai Village and Panvel area. Stationed in the premise of the zone, it is equipped with expert staff trained in Trauma treatment. This service is available to the local population free of charge through a toll free number.

Electricity Distribution Facility:

At the Mumbai FTWZ at Sai Village, Panvel, your Company has created additional capacity in its electrical infrastructure to enable supply of electricity to the surrounding villages.

Empowering Villages Everywhere (EVE) ? Solar Lamps for Villages:

Your Company supported a novel initiative by school children based in Mumbai, for providing solar lamps to villages at a subsidized rate. Under the EVE program portable solar lamps were provided to villages where electricity is not available. By subsidizing the cost, EVE was able to offer villagers an opportunity to increase productivity and improve their quality of life. At Arshiya we have pledged to join hands with EVE and support them in this initiative to help light lives.

CODE OF CONDUCT

The Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company. The Code of Conduct has been posted on the Company s website.

Board Members and Senior Management personnel have affirmed compliance with the Code for the financial year 2011-12. A separate declaration to this effect is annexed to the Corporate Governance Report.

Junoon ? Celebrity Charity Cricket Match:

Your Company supported EVE in a celebrity charity cricket match Junoon which was organized for the benefit of the physically challenged. The ticket proceeds of this match were used to provide artificial limbs to the physically handicapped living in the rural district of Satara, Maharashtra.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required under section 217(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 are set out as under:

Conservation of Energy: The operations of the company involve low energy consumption. Adequate measures have been implemented to conserve energy such as -

Roof of the warehouses at our FTWZs and Industrial & Distribution Hubs have been designed with MR24 standards. A provision of installation of solar panels has been made on the roofs to generate renewable energy.

Orientation of the warehouse buildings has been done in such a way that there is less heat transmission resulting in saving the electricity consumption by minimizing heat loss in the HVAC system.

Technology Absorption: Arshiya sincerely believes in utilising technology to improve productivity, efficiency and quality of its business operations and working environment.

Foreign Exchange Earnings and Outgo:

Foreign Exchange received - Rs. 878,065,074/-

Foreign Exchange incurred 198,609,328/-

PARTICULARS OF EMPLOYEES

Pursuant to the provisions 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 set out in the Annexure to the Directors Report. However, as per the provisions of Section 219(1 )(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all members of the Company. Any member, who is interested in obtaining such particulars about employees, may write to the Company at Registered Office of the Company.

AUDITORS REPORT

The observations in the Auditors Report are self explanatory and need no further explanations.

AUDITORS

M/s MGB & Co., Chartered Accountants, Mumbai, Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for reappointment.

The Company has received a certificate from M/s MGB & Co., Chartered Accountants, Mumbai, confirming that their appointment, if made, would be in accordance with the provisions of Section 224 (1B) of the Companies Act, 1956.

ACKNOWLEDGEMENT

Your Directors would like to express their gratitude for the assistance, support and co-operation received from the Goverment of India, the State Governments and the other Government agencies and their departments, investors, bankers, financial institutions and all other stakeholders.

Your Directors also wish to 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

Ajay S Mittal

Chairman & Managing Director

Place: Mumbai.

Dated: 07th July, 2012.


Mar 31, 2009

The Directprs are pleased to present the 28th Annual Report togrther with the Audited Accounts for the financial year ended 31st March, 2009.

A) SUMMARIZED FINANCIAL RESULTS- ARSHIYA INTERNATIONAL LTD

For the year ended For the year ended March 31, 2009 March 31, 2008 (Rs. in Lacs) (Rs. in Lacs)

Income from operations and other Income 26632.65 20806.97

Expenditure 23656.93 18926.55

Profit Before Depreciation, Tax and Prior period items 2975.72 1880.42

Depreciation 156.39 64.25

Profit Before Tax and Prior period items 2819.33 1816.17

Prior period Items(Net) 10.46 (33.88)

Profit Before Tax 2829.79 1782.29

Provision for Taxation 981.26 546.05

Profit After Tax 1848.53 1236.24

Balance B/f 1094.55 515.47

Amount available for Appropriation 2943.08 1751.71

Proposed Dividend 470.02 456.03

Dividend tax 79.88 77.50

Transfer to General Reserve 184.85 123.63

Balance Carried to Balance Sheet 2208.33 1094.55

FINANCIAL REVIEW

During the year under report, your Company recorded Income from Operations and Other Income aggregating to Rs. 26632.65 Lacs as

against Rs. 20806.97 Lacs in the previous year, registering a growth of 28%. The Profit Before Tax has been Rs. 2829.79 Lacs as against Rs. 1782.29 Lacs over the previous year, recording an increase of 58.77% and the Profit After Tax, for the year has been Rs. 1848.53 Lacs as against Rs. 1236.24 Lacs overthepreviousyear, recording an increase of 49.53%

B) SUMMARIZED CONSOLIDATED FINANCIAL RESULTS- ARSHIYA INTERNATIONAL LTD AND ITS SUBSIDIARIES

For the year ended For the year ended March 31, 2009 March 31, 2008 (Rs. in Lacs) (Rs.in Lacs)

Income from Operations and other Income 51451.87 40744.97

Expenditure 43024.88 35037.34

Profit Before Depreciation, Tax and Prior period items 8426.99 5707.63

Depreciation 701.21 416.64

Profit Before Tax and Prior period items 7725.78 5290.99

Prior period Items(Net) 10.46 (33.88)

Profit before Tax 7736.24 5257.11

Provision for Taxation 1136.71 737.26

Minority Interest 37.24 (17.67)

Profit After Tax and Minority Interest 6562.29 4537.52

On a Consolidated basis your Company has recorded a 26.28 per cent increase in income and 44.62 per cent increase in profit after tax over the previous year.

DIVIDEND

Your Directors are pleased to recommend a dividend @40% i.e. Re. 0.80/- per equity share of Rs 2/- each, for the financial year ended 31" March 2009. The total outflow on this account would be Rs. 549.90 Lacs comprising a dividend of Rs. 470.02 Lacs and tax on dividend of Rs. 79.88 Lacs.

BUSINESS AND FUTURE OUTLOOK

As mentioned in the previous years Directors Report for the year ended 31st March, 2008, your Company as a provider of integrated supply chain services has developed end to end logistics and supply chain services to its customers with IT support. Your Company has planned to establish infrastructure facilities of Free Trade Warehousing Zones near Panvel - Mumbai, Khurja in Uttar Pradesh and Butibori, - Nagpur in Maharashtra and operation of Containerised movement of cargo through its subsidiary, Arshiya Rail Infrastructure Ltd and also developing Distripark designed to provide smooth sailing of hub to accelerate the movement of goods. The three free trade warehousing zones at strategic locations would provide infrastructural support to the export and import and also tax incentives would provide cost effectiveness which will enable the unit holders a competitive edge.

(I) (a) Free Trade Warehousing Zone (FTWZ) near Panvel, Maharashtra

The project cost of the FTWZ at Sai Village, Panvel Taluka, Dist. Raigad, Maharashtra has been scaled downwards to Rs.5260 millions in the first phase by differing construction in two phases, with a construction of one million sq.ft. of warehousing space in the first phase and 3,00,000 sq.ft. in the second phase.

The Ministry of Commerce, Government of India had granted formal approval for the land at Sai Village, Dist. Raigad, Maharashtra during the end of financial year 31.3.2009 and the notification of the project as an SEZ was issued in May, 2009. On account of complexities involved in the acquisition of land, the construction of the project has been delayed. Your directors wish to inform you that the construction at the site has commenced and the FTWZ is expected to be operational during the first quarter of financial year 2010-2011. Your Company has successfully tied up for financing of the project with Axis Bank as the lead banker syndicating the term loan of Rs 355 Cr.

(b) Free Trade Warehousing Zone - Khurja, Uttar Pradesh

The project cost of the FTWZ has been scaled down to Rs 435 crores. Your Company has acquired land earmarked 135 acres of land for the FTWZ Project at Khurja and the formal approval for the project is obtained from the Ministry of Commerce, Government of India.The construction of the the project has commenced and the project is expected to be completed and be operational by the end of the second quarter of 2010-2011. The financial tying of the debt portion of Rs. 290 crores is being undertaken by Punjab National Bankasthe lead banker.

(c) Free Trade Warehousing Zone - Butibori, Nagpur Maharashtra

The acquisition of land at Butibori Nagpur for the FTWZ Project has been completed. Your Company will be making application for grant of formal approval by the Ministry of Commerce, Government of India. The project cost and means of financing is being worked out and the construction would be taken up after first phase of construction of Panvel FTWZ Project.

(ii) Containerised Rail Operations:

Your Companys subsidiary-Arshiya Rail Infrastructure Limited is putting together a Pan-India network that connects with major Indian ports, free trade warehousing zones, private sidings and state of the art warehouses with rail terminals in the form of strategic locations across the country. We would further like to inform you that containers in the wagons are customizable as per specific customer requirements thereby allowing quicker loading and unloading operations, higher utilization of space per wagon resulting in remarkable savings through cost effectiveness. During the last quarter of the year ended 31s March 2009, two rakes were launched and by end of the financial year ending 31st March 2010, your subsidiary will significantly increase its operational rake capacity thereby considerably benefiting in savings to the customer and at the same time contributing to savings in consumption of otherwise expensive fuel. The project cost which was originally estimated at Rs.1600 crores for 75 rakes and commensurate containers and railway sidings as mentioned in the last years Directors Report has been re-phased to Rs. 626 crores in the first phase with 30 rakes, commensurate containers and one railway siding in Khurja, UP. The project funding has been completed with State Bank of India as the lead banker syndicating the term loan of Rs. 400 crores. Your company has placed orders for additional 30 rakes to be delivered over the next 18 to 24 months.

(iii) Arshiya Distripark

Arshiya Distripark is planning to provide a venture designed to provide its customers with smooth sailing domestic hubbing zone to accelerate the movement of goods at northern Indias business nerve centre, the Northern Capital Region NCR. This first of Arshiyas distriparks is located strategically at the confluence of the Eastern and Western freight corridors at Khurja, Uttar Pradesh allowing access to ports and hinterland through the freight corridors and thereby assisting in cutting down transportation costs. This infrastructure; connected with a rail terminal and adjoining FTWZ infrastructure - all developed by Arshiya - will serve very strategically to the aggregated inbound movement of raw materials that will be required by the manufacturing base in the NCR region. This integrated infrastructure will also provide the same aggregation and consolidated benefits for then distributing the finished products to JNPT and the rest of India through the dedicated freight corridors. Starting with one such Distripark in Khurja, UP; Arshiya intends to develop several such rail connected domestic consolidation hubs that will help in the efficient movement of product through India - while addressing the grave need for increasing rail market share in this country towards reduction of logistics costs.

(iv) Arshiya Branding

Recently your Company has planned to create a single unified brand name "Arshiya for all its operations through its various divisions. To this effect, B D P International Inc and Genco Inc., USA. have consented and accordingly the businesses are now branded undertheflagshipof Arshiya Logistics&Arshiya Supply Chain respectively.

FIXED DEPOSITS

During the year under review, your Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and rules made thereunder.

SUBSIDIARIES

The Company has following subsidiaries for the financial year 2008-2009.

Arshiya Distripark Ltd & its following subsidiaries:

Arshiya Central Distripark Ltd Arshiya Eastern Distripark Ltd

Arshiya Northern Distripark Ltd Arshiya Southern Distripark Ltd Arshiya Western Distripark Ltd

Arshiya Logistics infrastructure Ltd & its following subsidiaries:

Arshiya Central Logistics Infrastructure Ltd Arshiya Eastern Logistics Infrastructure Ltd Arshiya Northern Logistics Infrastructure Ltd Arshiya Southern Logistics Infrastructure Ltd Arshiya Western Logistics Infrastructure Ltd

Arshiya Rail Infrastructure Ltd

Arshiya Supply Chain Management Private Limited [formerly Genco (India) Private Ltd]

Arshiya Hongkong Ltd & its following subsidiaries:

Arshiya Logistics LLC, Oman BDP (Dubai) LLC BDP (Qatar) WLL

Arshiya International Singapore Pte Ltd

Cyberlog Technologies International Pte Ltd & its following subsidiaries:

CyberlogTechnologies Hongkong Ltd Cyberlog Technologies Inc. (USA) Cyberlog Technologies (India) Pvt. Ltd Cyberlog Technologies (UAE) FZE

The Annual Accounts of the above-referred subsidiaries as on 31" March, 2009 and the related detailed information will be made available to the investors of the Company and its subsidiaries seeking such information at any point of time. The annual accounts of the subsidiary companies will also be kept for inspection by any investor at the Registered Office of the Company and that of the subsidiary companies concerned. Agist of financial performance of the subsidiaries is given in this Annual Report.

Ministry of Corporate Affairs, Government of India, has vide letter ref no. 47/571/2009-CL-lll dated July 21,2009, granted exemption to the Company from the applicability of the provisions of Section 212(1) of the Companies Act, 1956, relating to attachment of the Accounts of the Subsidiary Companies to the Annual Accounts of the Company for the financial year 2008-09. Accordingly, annual accounts of the Subsidiary Companies are not being attached with the Annual Report of the Company.

SHARE CAPITAL

Your Company has allotted 17,48,500 equity shares of Rs. 2/- each against conversion of 3,49,700 warrants on 21" August, 2008 in favour of warrant holders who exercised their option for conversion into equity shares.

Your Company has received listing and trading approval from Bombay Stock Exchange Limited (BSE) for the aforesaid shares.

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements are prepared in accordance with Accounting Standard - 21 "Consolidated Financial Statement" issued by ICAI. Your Directors have attached the Consolidated Financial Statements for the financial year ended 31st March, 2009 which form part of the Annual report and Accounts.

CORPORATE GOVERNANCE

A separate report on Corporate Governance including a Certificate from a Practicing Company Secretary confirming compliance with Corporate Governance as stipulated under clause 49 of the listing Agreement entered into with BSE is annexed hereto and forms part of the report.

DIRECTORS

Mr.Francis X Bolte and Mr. Richard Bolte Jr. resigned from the directorship of the Company with effect from 30" June, 2009. The Board places on record its deep appreciation of the valuable contribution made by them and guidance provided to the Company during their tenures as Directors of the Company.

In accordance with the provisions of the Companies Act, 1956, and Article 123 of the Articles of Association of the Company, Prof. G. Raghuram and Mr. James Beltran, Directors, retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment.

GLOBAL ADVISORY BOARD

Your Company has a nine member Global Advisory Board (the Board) consisting of eminent personalities having rich global experience in diverse fields including business, management and supply chain. The Board usually meets twice a year. The valuable advice and guidance of the Advisory Board plays a crucial role in formulating strategies, expansion plans and creating a Company with uniqueness in supply chain services sector.

Mr. Flemming Jacobs, formerly President & CEO of Singapore based Neptune Orient Lines, owners of American President Lines and APL Logistics, has recently been inducted on the Board. He brings with him over 40 years of rich experience in the Shipping & Transportation Industry. Mr. Jacobs helped build Maersk Lines into one of the worlds leading container lines and currently serves as Senior Advisor & Non-Executive Director on a variety of boards for organizations in the Banking, Transportation and Logistics sectors including the Panama Canal and Lloyds Register.

Mr. Paul W. Bradley, Vice Chairman of Supply Chain Asia and International Consultant, has also been inducted on the Board. He was former President of Arshiya International Limited, and has served as Managing Director of IDS Logistics International and two other business entities with the Li & Fung Group, and in key management position with BDP Asia Pacific/ the HAVI Group, NYK Line (A member of the Mitsubishi Group) and American President Liens.

The Global Advisory Board currently comprises of the following members:

1. Dr. Jerry (Yoram) Wind

2. Dr. Frank-Jurgan Richter

3. Mr. William Adamopoulos

4. Dr.JohnGattorna

5. Mr. Richard Taffet

6. Mr. Micheal Proffit

7. Prof. G. Raghuram

8. Mr. FlemmingJacobs

9. Mr. Paul W.Bradley

ARSHIYA EMPLOYEE STOCK OPTION PLAN 2007

Employee Stock Option Plan 2007 is administered by the Compensation Committee of the Board. During the Financial Year 2008-09, the Compensation Committee at its meeting held on April 24,2008, granted 1,06,300 Options, at a grant price of Rs.210/- per Option to the Employees of the Company and 27,600 Options to the Employees of subsidiaries/step down subsidiaries in Tranche II under Employee Stock Option Plan 2007.

Details of Options granted and other disclosures; as required under Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999; as on 31st March, 2009 are set out in Annexure to this Report.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of the Companies Act 1956, with regard to the Directors responsibility statement, the Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departures;

b) the selected accounting policies were applied consistently and the Directors 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 31" March, 2009 and of the profit of the Company for the year ended on that date

c) proper and sufficient care has been taken for the 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 fraud and otherirregularities

d) the annual accounts have been prepared on a going concern basis.

HUMAN RESOURCES

During the year, your Company has endeavoured to focus its efforts on enhancing the competence and commitments levels of its employees. The Companys HR department is constantly on the lookout to attract, nurture and retain the right kind of talent and therefore attaches utmost importance to the values that they bring to the Company.

Attracting and retaining trained professionals is therefore a key functional area of the Companys HR department. The Companys HR policies are designed to motivate the employees to put in their best efforts towards furthering the organizations goals and to foster a sense of belongingness among them. Your Company provides ample scope to its employees for skill and personality enhancement. Achieving employee empowerment remains one of the key thrust areas of HR initiatives.

Your Company therefore acknowledges the efforts of all our team members, the visible and the invisible.

HEALTH, SAFETY AND ENVIRONMENT

As a responsible corporate citizen your company lays considerable emphasis on health and safety aspects of its human capital, operations and overall working. Constantly awar$ of its obligations towards maintaining and improving the environment, all the possible steps are being taken to meet toughest environmental standards on pollution, effluents etc. in various spheres of its activities.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The Company did not undertake any activity during the year that would require disclosure under Section 217(l)(e) of the Companies Act, 1956 relating to Conservation of Energy and Technology Absorption. Foreign Exchange Received: Rs. 256,877,397/- Foreign Exchange Incurred: Rs. 133,165,771/-

PARTICULARS OF EMPLOYEES

The information required under section 217(2A) of the Companies Act 1956 and the Companies (Particulars of Employees) Rules 1975 as amended, forms part of the Report. However, in terms of Section 219(l)(b)(iv) of the Companies Act, 1956 this report is being sent excluding the aforesaid information. The same will be provided to the members on request in writing.

AUDITORS

In consonance with the policy of the Company to rotate the Statutory Auditors, the retiring Auditors M/s. Price Waterhouse, Chartered Accountants, Mumbai have communicated their unwillingness to be reappointed as the Auditors of the Company for the ensuing Financial Year.

The Company has obtained a certificate from M/s. MGB & CO. Chartered Accountants, Mumbai, confirming that their appointment, if made, will be in accordance with the provisions of Section 224 (IB) of the Companies Act, 1956.

ACKNOWLEDGEMENT

The Board places on record its sincere appreciation, of the contribution of employees at all levels, clients, vendors, investors, bankers and all other stakeholders towards the performance of the company during the year under review.

For and on behalf of the Board of Directors

Place: Mumbai Ajay S Mittal

Dated: 14th August, 2009 Chairman & Managing Director

 
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