ail investor presentation

FTWZ Rail Infrastructure Domestic Distripark Logistics Supply Chain Management TechnologyFTWZ

RailInfrastructure

Domestic Distripark

LogisticsSupply Chain Management

TechnologyTransport & Handling

THE OPPORTUNITY OF THE FREE TRADE & WAREHOUSING ZONE (FTWZ)

& Arshiya’s Integrated Logistics Services

While Consumption in India will grow in real terms from US$ 378 billion presently to US$ 1.56 trillion by 2025 – a fourfold increase, reality is that :

- India ranks 17th in terms of importing world products, consuming just over 2% of globally produced merchandise, but growing @ 35%

While by 2020, India is projected to have an additional 47 million working population, almost equal to the total world shortfall, with an average Indian age of 29 fuelling our ability to become a manufacturing mecca of the world, reality is that:

- India ranks 26th as per WTO in terms of exporting world products contributing just over 1.3% of globally consumed merchandise, but growing @ 22%

India's container throughput in CY10 was just over 9.3 million TEU's, as compared to Dubai (12 million), Singapore (28 million) & China (169 million) - Indicating zero penetration to the Value Addition, Hubbing and Re-Export market leveraging our cost and skill arbitrage

THE BIG THREE REASONS AS TO ‘WHY FTWZ’

GOI Introduces the Free Trade & Warehousing Zones Policy, as a part of Foreign Trade Policy (FTP) 2004-2009

Governed by the SEZ ACT,2005 & SEZ Rules,2006

Free Trade Zones in other countries:Jebel Ali Free Zone (48 Sq. Km of area) in Dubai, Changi Airport in

Singapore, China (Shenzhen, Shanghai, Tianjin etc.) Activities allowed inside the FTWZ: packaging, re-packaging, labeling, re-labeling,

consolidation, kitting etc.• Authorized Services such as transportation from Port to FTWZ, documentation, packaging, re-packaging, labeling, re-labeling, strapping, refurbishment, crating, cartonisation, fumigation, choking, lashing, tagging, shrink/stretch/bubble wrapping, palletization, bagging, re-bagging, quality assurance, kitting, de-kitting, sorting assorting, making combination pack, consolidation, agglomeration, washing, cleaning, processing, repairs & maintenance, CKD/SKD assembly, bottling, blending, cutting, polishing, painting, coating, filming, re-sizing, splitting, threading, coupling etc.

ABOUT FREE TRADE & WAREHOUSING ZONES (FTWZ)

Minimum contiguous area required: 100 Acres & above, with minimum built up area of 100,000 Sqm

Acquisition of land at strategic locations (near Major Ports/Airport, manufacturing Hubs & Industrial areas

Multiple levels of approval process from the state & central government (Informal & Formal Approval and Notification)

FTWZ in a sector specific SEZ, cannot cater to any unit outside the sector specific SEZ

ENTRY BARRIERS FOR DEVELOPING & OPERATING FTWZs IN INDIA

Due to India’s unique geography & market demography, integrating FTWZs with

other critical logistics infrastructure such as Rail Connectivity & Domestic

Distribution hubs

Integrating ‘Hard Infrastructure’ - (FTWZs, Rail Infrastructure & Domestic Distriparks) with

‘Soft Infrastructure’ - Global 3PL, Domestic 4PL, Handling & Transportation and IT

Expertise not only in developing world class state-of-the-art logistics infrastructure,

but also experience in operating FTWZs to mitigate customer’s logistics & supply chain

challenges unique to India

Offering a ‘One Throat to Catch’ end-to-end integrated logistics & supply chain services to

global customers

BUSINESS SCALABILITY BARRIERS

• Flexibility towards end distribution in India

• Duty deferment benefits (freeing up working capital & increasing sales )

• Quality control capability prior to duty- payment

• Exemption on SAD, VAT & CST on imports through FTWZ

• Hassle-free re-export regulatory /duty implications

• Reduced buffer stocks

• Service Tax exemption on services availed; including transportation

inside India

• Lowered product costs

• Foreign exchange transaction capability

FTWZ - UNIQUE BENEFITS FOR IMPORTS

BENEFITS OF IMPORTING PRODUCTS INTO INDIA BENEFITS OF IMPORTING PRODUCTS INTO INDIA

THROUGH THE FTWZ THROUGH THE FTWZ (DEEMED FOREIGN TERRITORY)

GAME CHANGER BENEFITS OF FTWZ

GLOBAL AUTOMOBILE MANUFACTURER’S CURRENT SUPPLY GLOBAL AUTOMOBILE MANUFACTURER’S CURRENT SUPPLY CHAINCHAIN

International Suppliers





IndianPorts

India Manufacturing Plant

Dealers in India

Dealers in India

Dealers in India

Dealers in India

Dealers in India

Supply of spares and parts to Dealers in India for after sales and service

Supply of spares and parts to Dealers in India for after sales and service

Rejection after duty paymentRejection after duty payment

Storage of Spares, Parts and Components for after sales & service post duty payment

Storage of Spares, Parts and Components for after sales & service post duty payment

Rejection after duty paymentRejection after duty payment

ARSHIYA’S SOLUTION THROUGH FTWZARSHIYA’S SOLUTION THROUGH FTWZ






FTWZ

Dealers in India

Dealers in India

Storage of Spares, Parts and Components for after sales & service without duty payment

Storage of Spares, Parts and Components for after sales & service without duty payment

Rejection without duty payment


Regional distribution of spares and parts enabling the income tax exemption on the re-export of imported spares and parts

Regional distribution of spares and parts enabling the income tax exemption on the re-export of imported spares and parts



International Dealers



• Products from India entering the FTWZ are treated as deemed export

providing immediate benefits to suppliers

• Local Tax Exemption (e.g. CST, Sales Tax, Excise & VAT) on all activities

conducted inside the FTWZ

• Export quotas able to be met for companies exporting into FTWZ

• Increased efficiency through lowered reverse logistics through quality

control

before dispatch from India

• Foreign exchange transactions capability

• Increasing supply chain efficiencies (forward & reverse) while enhancing

capital cash flow

FTWZ - UNIQUE BENEFITS FOR EXPORTS


CASE STUDY CASE STUDY –– BENEFITS OF EXPORTING BENEFITS OF EXPORTING

PRODUCTS OUT OF INDIA THROUGH THE FTWZ PRODUCTS OUT OF INDIA THROUGH THE FTWZ (DEEMED FOREIGN TERRITORY)

GLOBAL FMCG MAJOR’S CURRENT SUPPLY CHAIN

93 suppliers from India , Karachi(18) Bangladesh(15), & Sri Lanka (4)

93 suppliers from India , Karachi(18) Bangladesh(15), & Sri Lanka (4)

All the SKUs are sent by the suppliers directly to DC in Europe by suppliers

All the SKUs are sent by the suppliers directly to DC in Europe by suppliers

Breaking and re-invoicing of units as per different store demands is conducted before dispatches to the stores.

Breaking and re-invoicing of units as per different store demands is conducted before dispatches to the stores.

Reverse logistics of rejected materials

Reverse logistics of rejected materials

Supplier 93

Supplier 2

Supplier 1

DC in Europe

For value addition

Various Ports

across India

Store 1

Store 2

Store

173

ARSHIYA’S SOLUTION THROUGH FTWZ

Supplier in Bangladesh & Sri Lanka

Supplier

in Pakistan

Supplier 93

Supplier 2

Supplier 1

FTWZ

DC in FTWZ forValue additionDC in FTWZ forValue addition

Store 1

Store 2

Store

173

• Service tax exemption on all activities conducted inside the FTWZ

including

rental & labour

• Exemption from custom and stamp duty on products imported into FTWZ;

meant

for re-export out of India

• Income tax exemption on profit where applicable

• Hassle-free re-export process

• Permission of 100% FDI for the set-up of units by the unit holder of the

FTWZ

• Ability to leverage India’s cost, skill & geographic positioning advantage

as a

hub for regional/global distribution post Value Addition activities

FTWZ - UNIQUE BENEFITS FOR RE-EXPORTS


CASE STUDY CASE STUDY –– BENEFITS OF HUBBING & VALUE BENEFITS OF HUBBING & VALUE

ADDITION OF PRODUCTS IN INDIA THROUGH ADDITION OF PRODUCTS IN INDIA THROUGH

THE FTWZ THE FTWZ (DEEMED FOREIGN TERRITORY)

GLOBAL MOBILE MANUFACTURER’S CURRENT SUPPLY CHAIN

CHINA

GERMANY

USA

Regional Value Addition, Hubbing &

Distribution Centre in

Singapore/Dubai

Indian Subcontinent

Middle East

Far East Asia

South East Asia

Africa/Eastern Europe

Supply of Charger, Earphone and packaging material


Supply of completely packaged mobile phones


Supply of batterySupply of battery

Supply of handsetSupply of handset

VOS like Labelling, packaging, assembly and consolidation based on the country of export


ARSHIYA’S SOLUTION THROUGH FTWZ

CHINA

GERMANY

USA

Indian Subcontinent

Middle East

Far East Asia

South East Asia

Africa/Eastern Europe





Supply of batterySupply of battery

Supply of handsetSupply of handset



FTWZ

ARSHIYA’S FTWZ IN MUMBAI – INDIA’S FIRST,OPERATIONAL SINCE NOV 2010

165 Acre State-of-Art Facility 24km from JNPT Port featuring: • 24x7 On-Site Custom Clearance House• State-of-the-Art Infrastructure with World class Safety, Equipment & Maintenance

Facilities• Connectivity to our Pan-India Rail Network accelerating distribution through aggregation at

strategic locations• State-of-the-art ICD/CFS facility with superior Safety and Hazardous cargo handling

capacity of 10,000+ containers including reefers

FIRST MOVER ADVANTAGE IN INDIA’S LOGISTICS LANDSCAPE

ARSHIYA’S MUMBAI FTWZ

World-class Warehouses of 13 M height with G+6 palletized racking system, super-flat flooring & state-of-the-art Material Handling Equipments (MHEs)

Dedicated & customized Office space & area for Value Optimising Services (VOS) within the Warehouse

Mezzanine storage area with temperature controlled HVAC system & optional humidity control

Warehouses designed as per Seismic Zone 4 requirements

Container Yard (CY) with Pavement Quality Concrete (PQC) flooring for stacking containers in a G+5 stacking system using state-of-the-art Rubber Tyre Gantry Cranes (RTGCs) & Reach Stackers

Over Dimensional Cargo (ODC) Yard with Paver-Block flooring for storage of cargo that cannot be stored in the Warehouse

FTWZ WORLD CLASS INFRASTRUCTURE: WAREHOUSES AND YARDS

FTWZ WORLD CLASS INFRASTRUCTURE

24x7 on-site Customs Clearance Business Ancillary Services: On-site Office spaces, Banks, Insurance, Currency Exchanges &

CHAs that reduce operating costs for companies operating in the FTWZ Fire & Safety Amenities: Primary & Secondary fire fighting systems along with Tertiary Fire

Engine at FTWZ site with trained Fire Fighting Professionals. Personnel having expertise & certification in handling DG Cargo.

Secure IT Connectivity: Comprehensive IT system with network infrastructure such as a server room within each warehouse & a centralized data center with uninterrupted data, voice & video connectivity through primary & secondary vendors & 100% data back-up

Ancillary Buildings and Facilities: Covered ODC Yard, Maintenance & Repair (M&R) Yard, Scrap Yard & an Empty Container Yard, Food court, Medical dispensary with Ambulance at site

Supporting Infrastructure: Weigh bridge, road network with up to 6 lanes to avoid congestion, Fuel Station in the processing zone, uninterrupted water & power supply systems & 100% power back-up using DG Sets

Storm Water Drainage System: Having a capacity to handle rainfall with peak intensity of 156 mm/ hour or 10 cubic m per sec, i.e. 3 times the highest recorded level of rainfall in Mumbai

Environmental Consciousness: The FTWZ emits no Industrial effluents & contains Sewage Treatment Plants, Waste Disposal Units, Rain Water Harvesting facilities & Green Areas


RailInfrastructure

Domestic Distripark


Technology

FACILITIES & VALUE OPTIMISING SERVICES IN THE FTWZ

Transport & Handling

STANDARD WAREHOUSE

ODC YARD (OPEN & COVERED)

CONTAINER YARD (CFS)

CHILLER/FREEZER

HAZARDOUS STORAGE

TEMPERATURE CONTROLLED STORAGE

STRONG ROOM

OFFICE INFRASTRUCTURE

FACILITIES IN THE FTWZ

VALUE OPTIMISING SERVICES (VOS) IN FTWZ

VOS ON CONTAINERVOS ON CONTAINER

a.Customs Documentation

b.Incoming & Outgoing Transportation (Port to FTWZ &

return)

c. Gate Coordination (incoming & outgoing)

d. Survey of Cargo/Containers (incoming & outgoing)

e. Handling / Loading & Unloading (inbound & outbound)

f. Weighment of Containers

g. Fumigation of Containers

h. Scanning of Containers

i. Lashing / Unlashing Services etc.

VOS ON PALLETS / VOS ON PALLETS / BREAK-BULK OF PALLETSBREAK-BULK OF PALLETS

a.Carting & Shifting of the Pallets

b.Palletization

c. Carbonization

d.Strapping

e.Shrink Wrapping

f. Packaging / Re-packaging (into smaller parcels/cases /cartons)

g.Labeling / Re-Labeling

h.Bar-Coding

i. Strapping, refurbishment

i. Tagging, shrink / stretch / bubble wrapping etc.

a.Quality Control (QC)

b.Sorting / Assorting

c. Kitting / De-kitting

d.Bottling/ Blending

e.Assembling

f. Cutting & Threading

g.Consolidation

h.Agglomeration

i. Repairs & Maintenance

j. CKD/ SKD assembly

k. Cutting/ Polishing

l. Painting/ Coating

m.Filming/ Re-sizing

n.Splitting

o.Threading

p.Coupling, etc..

HIGH END VOSHIGH END VOS

Understanding of client’s business model and Pain areas Creating consolidated business proposal specific to client’s business model with one price inclusive of all elements like Transportation to and from FTWZ, Storage, VOS etc.. Pricing strategy based on client’s VOS scope and throughput Also based on client’s industry standard pricing practices e.g.,

For Steel Industry: Per ton basis For Wine Industry: Per case/piece basis For Large Importers and Exporters: Per Container Basis (Movement from

Port to FTWZ and back including storage and all other services)

HOW DO WE CHARGE OUR CUSTOMERS

REVENUE MODEL OF AN FTWZ CLIENT REVENUE MODEL OF AN FTWZ CLIENT

Client Name V-XYZ

Sector Trading (Import & Re-Export)

Product TypeFMCG Products such as Perfumes, Sports Items,

Deodrant, Shoes etc.

No. of Pallets to start operations 500

6 - Month Rampup of Pallets 15000

Average Monthly Throughput 3

REVENUE MODEL

COMPONENTS REVENUE COMMENTS

Rental

Warehouse Rent @ INR 800/Pallet 16,000 Considering Avg. 20 Pallets/Container

Storage Space - Mezzanine

Office Space - Mezzanine

Container Yard Rent

ODC Yard rent

Total Rent/Container 16,000

Total Rent/Pallet 800

REVENUE MODEL OF AN FTWZ CLIENT REVENUE MODEL OF AN FTWZ CLIENT

VALUE OPTIMISING SERVICES (VOS) COMMENTSGate Charge (Inbound) 150 Per Container

Handling (Inbound) @ INR 100/Pallet 2,000 Per Container

Handling (Outbound) @ INR 100/Pallet 2,000 Per Container

Gate Charge (Outbound) 150 Per Container

Survey Charges (Inbound) 150 Per Container

Survey Charges (Outbound) 150 Per Container

Value Optimising Services like packaging, labeling etc.

Packaging 4,000a) 1 Pallet = 10 Cartons,

b) Total Cartons/Container = 200c) Packaging Rate of INR 20/Carton

Labeling 20,000 a) Total Pieces/Container = 10,000 (50 pieces/carton) b) Labeling Rate of INR 2/Piece

Bar coding 5,000 a) Bar Coding Rate of INR 0.50/Piece

Transportation per container (Inbound) 4,400

Transportation per container (Outbond) 4,400 All the cargo will be re-exported

Palletization 10,000 In this case all the incoming cargo will be palletized again for re-export

Total VOS Revenue /Container/Turn 52,400

Total VOS Revenue /Pallet/Turn 2,620

Ratio (VOS Revenue / Rental Revenue) 3.3No. of Cycle in a month 3

VOS (Variable) income to Rental (Fixed) Income 9.9

Per Piece Rate – INR 6.9934% reduction on current cost for customer

CUSTOMERS

All above logos are property of respective owners

3PL CUSTOMERS

All above logos are property of respective owners


RailInfrastructure

Domestic Distripark


Technology

THE FTWZ REVOLUTIONIZING THE INDIAN LOGISTICS LANDSCAPE

Transport & Handling

Logistics cost in India is fairly high – at around 14% of GDP, as against 9%-10% in most developed nations:

- On a 1.6 trillion GDP; this represents absolute value of in-efficiency and therefore logistics market potential of over US$65 billion

- Even with the poor Road infrastructure & disorganized trucking network in the country, road currently accounts for approximately 65% of the total Indian freight transport, while Rail having only about 30% market share

- India burns nearly US$2.5 billion worth of fuel on account of trucks standing idle on state check-posts

India's level of containerization is less than 25% as against global average of 60% -70%

The average time taken to clear import & export cargo at ports is about 19 days in India, against 3 to 4 in Singapore

World Bank’s 2010 Logistics Performance Index (LPI) ranks India 47th in terms of logistics in-efficiency as compared to 130 countries globally – in terms of - Customs Clearance, Infrastructure, Timelines, Shipments, Logistics Competences, Tracking & Tracing

INDIAN LOGISTICS IN-EFFICIENCIES BECAUSE OF LACK OF HUBS

Free Trade Warehousing Zones (FTWZs) To enable EXIM cargo Consolidation, Value Addition and allow

India to become a Regional Trading Hub Domestic Distriparks

For Domestic distribution, cargo value addition and consolidation for Rail transportation to remove dependency on road

Rail Infrastructure Solutions Comprising of innovative Customized Containers for specific product types, Service

Level agreements on timeline and deliver with Key Performance Indicators State-Of-The-Art Rail Terminals, at strategic locations across India with modern

equipment to increase speed of loading/unloading and churn Integrate Logistics Infrastructure with Global Logistics, Domestic Supply Chain

Management , Handling & Transportation and IT Global ocean & air logistics, domestic forward and reverse supply chain

management with ownership on reduction of working capital and product visibility & control, through technology

CAPITALIZING ON INDIA’S LOGISTICS OPPORTUNITY What does it take?What does it take?

ARSHIYA INTERNATIONAL LTD. Capitalizing on India’s mammoth logistics opportunity

through Integrated Supply Chain & Logistics Infrastructure Solutions

By partnering towards: FTWZs Rail Infrastructure Domestic Distriparks Technology Supply Chain Management International Logistics Handling & Transportation

ARSHIYA’S PAN-INDIA INFRASTRUCTURE FOOTPRINT

5 FTWZs – Rail Connected, Planned Pan-India Mumbai (Operational since Nov’10), Delhi

(Go Live Q2FY’12) followed by Nagpur, Chennai & one in the East

5 Domestic Distriparks - Planned Pan-India, Complimenting the FTWZ Network

First of the Domestic Distriparks (in Khurja near Delhi) operational by Q2FY’12

150 Train Pan-India Rail Operations Providing unique and customized solutions

to marquee customers with long term contracts

Inducted 16 trains since FEB’09 and one of the most profitable Private Container Train Operators (PCTO)

Pan-India Rail Terminal Network complimenting each FTWZ, Domestic Distripark & Rail Operations accelerating cargo distribution through aggregation

ARSHIYA’S KHURJA FTWZ : LOCATION ADVANTAGE

18 km from the new Yamuna Expressway connecting Noida to

Agra 12 km from proposed international airport at Jewar in UP Sikandarabad – the neighbouring Developed Industrial City is < 30 km from the FTWZ Tughlakabad – 80 km Dadri – 60 km Bulandshahr – 20 km About 70 km away from the National Capital Region (NCR)

ARSHIYA’S UPCOMING INFRASTRUCTURE – KHURJA (NEAR DELHI)

• 315 Acre Comprehensive Facility 90 km from Delhi• Side-by-Side FTWZ (135 Acres) and Domestic Distripark (130 Acres) • Arshiya Rail Infrastructure (50 Acres), including on-site Rail Siding• Operations live as of Q2FY’12 to be joined by similar models in Chennai, Nagpur & East• State-of-the-art ICD/CFS facility with superior Safety and Hazardous cargo handling capacity of 10,000+ containers including reefers

KHURJA : PHASE 1 (FTWZ & DDP) LAUNCH, AUGUST, 2011

KHURJA RAIL SIDING: TO BE LAUNCHED OCTOBER, 2011

Open top containers increasing speed of loading heavy cargo

Multi-purpose containers for dry-cargo increasing return utilization

Enhanced cargo locking facility inside the containers

Customized containers for carrying various types of cargo

ARSHIYA RAIL INFRASTRUCTURE Customized Containers & Long Term Charter ContractsCustomized Containers & Long Term Charter Contracts

INTEGRATED REVENUE STREAMS THROUGH ARSHIYA’S INFRASTRUCTURE

Captive Revenue Coming into Arshiya’s FTWZ/Domestic Distripark 3PL revenues (Freight Forwarding + Local Transportation + Document Management)

for product being pulled from outside India into FTWZ/Domestic Distripark Rail/Road/Supply Chain Management revenues for product being pulled from inside

India to the FTWZ/Domestic Distripark.

Captive Revenue Inside Arshiya’s FTWZ/Domestic Distripark: Warehouse Management Warehouse and Equipment Rentals Value Optimising Services (Labeling, Assembly, Packaging, Re-packaging,

Consolidation, De-consolidation, Quality Control etc.) Container Yard (CY) / Maintenance & Repairs

Captive Revenue from Product moving out of Arshiya’s FTWZ/Domestic Distripark:

3PL revenues (Freight forwarding + Local Transportation + Document Management) for product being pushed from the FTWZ/Domestic Distripark to international markets

Rail/Road/Supply Chain Management & Distribution revenues for product being pushed back into India from the FTWZ/Domestic Distriparks, including various services in the domestic hubs and sub-hubs

Revenue Streams: Core Services Supporting all of the above enhancing customer value:

IT Solutions/Legal & Regulatory consultancy services across the value chain and revenue streams

FINANCIAL PERFORMANCE

176%

EBITDA

102%

Revenue

81%

PAT

14.4%

17.0%

16.8%

19.6 %

FY 08FY 09FY 10 FY11

EBITDA Margins

Consolidated Highlights FY 2008 FY 2009 FY 2010 FY 2011 YTD**

Operating Income— INR Cr. 401.2 503.0 525.9* 821.5 743.9

EBITDA — INR Cr. 57.7 85.5 88.1* 160.8 199.5

EBITDA MARGIN % 14.4% 17.0% 16.8% 19.6% 26.8%

PAT — INR Cr. 45.4 65.6 98.3 82.0 89.9

PAT MARGIN % 11.3% 13.0% 18.7% 10.0% 12.1%

EPS — INR per share 9.4 11.3 16.7 14.0 15.3#

*Operating income and EBITDA excludes income from sale of software marketing rights at INR 38.89 cr whereas PAT includes the same ** For 9M FY12 # not annualized

PROJECT SUMMARY (in INR Cr.)

Capex Actual Spends as on 31.12.11

Projects Debt Equity Total Debt Equity Total

Arshiya Rail Infrastructure (Phase I) 400 226 626 381 226 607

Arshiya Western FTWZ (Phase I & II) 1177 385 1562 724 242 966

Arshiya Northern FTWZ (Phase I) 281 140 421 256 160 416

Arshiya Northern Domestic (Distripark Phase I) 413 138 551 364 177 541

TOTAL 2,271 889 3,160 1725 805 2530

Notes :1.Company has invested further Rs. 93 crore as equity in Arshiya Central FTWZ (Nagpur) for land acquisition purpose.2.Above Capex will be spent by June 2013 & balance equity funding of Rs. 84 crore will be met through internal accruals.

ARSHIYA’S GLOBAL ADVISORY BOARD

Dr. Frank-Jürgen RichterPresident of Horasis: The Global Visions

Community ,Former Director of World Economic Forum (WEF), Economic Columnist for The

International Herald Tribune & The Wall Street Journal

Prof. G RaghuramProfessor: Indian Institute of Management,

Ahmedabad(IIM A), Author of Books on Logistics & Supply Chain & Public Private Partnerships

Dr. Jerry (Yoram) Wind Wharton School of Business – Lauder Professor

of Marketing Strategy, Founder & Director of SEI Center for Advanced Study in Management at

Wharton, Founder & Academic Director Wharton Fellows Program

Dr. John L Gattorna Chairman & Advisory Board-Macquarie Graduate School of Management (MGSM) Institute for Logistics & Supply Chain Management, Former Managing Partner for over 36 years at Accenture - Supply Chain Practice

Michael ProffittFormer CEO Dubai Logistics City, Logistics Director for Danzas Switzerland, Director of Logistics & Supply Chain Group – Dubai, Over 25 years of experience in Logistics & Supply Chain

Paul W Bradley Chairman & CEO, Caprica International, Vice Chairman, Supply Chain Asia, Senior Leadership position at Li & Fung Group, NYK Line & BDP Asia

Richard Taffet Partner, Bingham McCutchen LLP and Co-Chair, Bingham's Intellectual Property Litigation and Patent Prosecution Group

William P AdamopoulosPresident & Publisher: Forbes Asia, Former Publisher & Managing Director The Asian Wall Street Journal

Prof. Ashutosh VarshneyProfessor of Political Science at Brown

University, Former Advisor to World Bank & United Nations Development Program(UNDP), Carnegie

Scholar & Winner of Guggenheim Fellowship Award

Flemming JacobsFormer Partner & CEO

AP Moller Maersk, Advisory Council Member of Port of Singapore & On Advisory Board of

Panama Canal Authority

James Beltran Chief Executive Officer & Director,Malaysian Assurance Alliance Berhad (MAA) International Assurance Ltd

FTWZ SAI - JULY 2009

SAME VIEW – AUGUST 2010

CONTAINER YARD - AUGUST 2009

CONTAINER YARD - SEPTEMBER 2009

CONTAINER YARD - JULY 2010

CONTAINER YARD - JULY 2011

SUCCESS OF FTWZ - GAME CHANGER FOR GLOBAL ECONOMIES Dubai

• Established in 1985, Jebel Ali Free Trade Zone (JAFZA) is spread across an area of 48 sq kms, with over 6,400 companies operating in the zone, including 120 of the Fortune Global 500 enterprises

• Accounts for 25% of all container throughput at Jebel Ali port & 12% of all air freight at Dubai International Airport.

• Over the years it has created over 1,60,000 direct jobs in the UAE through its companies• Increased its revenue at an average of 34% year-on-year• Contributed to Dubai’s GDP at 25% on a year-to-year basis• Accounted for more than 50% of Dubai’s total exports• Accounted for 20% of all FDI inflow into the UAE• Grown its customer base by over 60% in the last four years

Even with an economy which is purely a transhipment hub, with comparatively low level of domestic consumption, FTWZ has been a game changer for Dubai

SUCCESS OF FTWZ - GAME CHANGER FOR GLOBAL ECONOMIES China

FTZs are operational since 1980 Waigaoqiao FTZ in Shanghai is spread across an area of 10 sq kms & over 9,300 companies

registered in the zone, including 135 of the Fortune 500 companies Other zones being - Zhuhai (3 sq kms), Ningbo (2.3 sq kms), Xiamen (5 sq kms), Futian (1.35 sq kms), Shatoujiao (0.27 sq kms) & Yantian Port (0.85 sq kms)

Singapore• FTZs were first established in the island nation in 1969, today the entire country is a Free Trade

Zone• Notable FTZs being – Keppel (2.59 sq kms), Pasir Panjang (0.65 sq kms), Jurong (0.61 sq kms), Sembawang (0.19 sq kms) & Air Logistics Park of Singapore at Changi Airport• Over 7,000 multinational companies operate through these zones

From an economically backward country in 1970 to its gigantic success, FTZs have been the single most critical macroeconomic factor for China’s rise

Due to FTZs this island nation has become the gateway to Southeast Asia & a Global Distribution Hub for international companies

INDIA’S STRATEGIC POSITIONING

DubaiDubaiMumbaiMumbai

SingaporeSingapore

• At present, majority of product hubbing & value addition is done in Dubai & Singapore• 70% to 80% of these value additions, is done for products meant for Indian market • Compared to Dubai or Singapore, India is much larger market for product consumption and is an emerging manufacturing hub• India has tremendous advantages in terms of cost & skill arbitrage vis-à-vis Dubai & Singapore • Due to its strategic positioning, India is much better suited for being a Transhipment , Value Addition & Global Distribution hub than other economies

FTWZ : A GAME CHANGER FOR INDIA

India is world’s 2nd largest developing & fastest growing economy just behind China

With a population of approx 1.1 billion, our domestic consumption comprises 58% of our GDP

Strategically located between South East Asia & Middle East, we have 7,000 kms of coastline & unlike China our population is evenly spread across hinterland

Unlike Dubai, India has a strong manufacturing base where global companies are producing products for domestic as well as export opportunities

Logistics infrastructure is the single largest challenge as well as the biggest opportunity for sustaining India’s fast paced GDP growth

LOGISTICS INFRASTRUCTURE A MAJOR HINDARENCE TO INDIA’S GROWTH

In-efficiencies due to lack of logistics infrastructure & organized logistics, costs India an additional USD 65 billion per year

In a growing economy if logistics infrastructure doesn’t grow at faster pace than the GDP, it would cost India very dearly

Indian economy is losing around 1.5% in GDP growth, due to lack of logistics infrastructure

India loses approximately INR 55,000 crores per year of food produce due to lack of logistics infrastructure

Corporate HQ: 301 Ceejay House, Level 3, Shiv Sagar Estate, F-Block, Dr. Annie Besant Road, Worli, Mumbai - 400 018. Maharashtra, India.Ph: +91 22 4230 5500 /1 /2 Fax: +91 22 4230 5555

Registered Office: Arshiya House, 3rd Floor, Plot No.61, Road No.13, M.I.D.C., Andheri (East), Mumbai - 400093,Maharashtra, India.Ph: +91 22 4048 5300

Want to know more? Or, get in touch with us?Or, need assistance? There’s a way.Just write to us at: [email protected] visit to www.arshiyainternational.com

Copyrights © 2010 All Rights Reserved. Arshiya International Ltd

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