The Directors commend the Resolution for your approval as an Ordinary
 Resolution.
 
 DIRECTORS'' REPORT
 
 Your Directors take pleasure in presenting the 19th Annual Report to
 the Shareholders together with the Audited Ac- counts for the year
 ended 30th September, 2011.
 
 FINANCIALS                                      (Rs.in Lakhs)
 
 PARTICULARS                                2010-11        2009-10
 
 Income                                    13461.43      14505.01
 
 Expenditure                               12320.65      13223.78
 
 Profit before Interest
 and Depreciation                           1140.78       1281.23
 
 Interest                                    747.63        908.89
 
 Depreciation                                 53.92         56.72
 
 Profit before Tax                           339.23        315.62
 
 Provision for tax                            87.68        105.56
 
 Profit after Tax                            251.55        210.06
 
 Previous year provision for
 dividend added back                          74.80           -
  
 APPROPRIATIONS
 
 Proposed Dividend                            86.00        74.80
 
 Payment of Dividend for
 
 Previous year                                              4.30
 
 Balance profit carried forward              240.35       130.96
 
 PERFORMANCE
 
 The Company''s total Income is Rs.135 crores during the financial year
 2010-11 as against Rs.145 crores in the previous year 2009- 10. The
 Profit after tax (PAT) for the financial year is Rs.2.52 crores compared
 to previous year profit of Rs.2.10 crores. On consolidated basis, the
 total income of your Company and its subsidiaries and Joint venture
 stands at Rs.201.74 crores and consolidated profit after tax (PAT) stood
 at Rs. 0.90 crores. The earnings per Share (EPS) basic and diluted
 stands at Rs.2.93 considering the total equity capital of Rs.8.60
 crores (86,00,000 equity shares of Rs.10/- each) as on 30th September,
 2011.Sales has come down during the year. With stringent market
 condition, competition and the strict funding from Banks and Financial
 Institutions, your Company has made a profit of Rs.2.52 crores during
 the financial year.
 
 A more detailed discussion and analysis on the performance of the
 Company in retrospect as well as the outlook is detailed in the
 Management Discussion and Analysis Report.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 `The Management Discussion and Analysis Report as required under clause
 49 of the Listing Agreement with the Stock Exchanges is presented in a
 separate section forming part of the Annual Report.
 
 PROJECTS
 
 The Company recognises that conceiving, developing and implementing
 projects aimed at growth and meeting market requirements, in a cost
 effective and time bound manner, will always remain a key business
 policy of the Company. The Company''s Project managers are guided by
 this policy and principle in the successful implementation and
 completion of various projects.
 
 Project Details
 
 ONGOING PROJECTS
 
 Project name               Location           Area (Sqft)
 
 Villa Viviana
 
 Township Project           GST Road,
 
 In association with        Chennai             13,00,000
 
 J P Morgan India
 
 Property Fund
 
 ARIHANT AmARA              Poonamallee
 Residential Complex        High Road,           1,45,000
 
                            Chennai
 
 NORTH TOWN
 ESTATES
 
 Township Project           Perambur,
 
 In association with        Chennai             21,26,880
 
 PVP Ventures Ltd
 
 and Unitech Ltd.
 
 ARIHANT -
 
 FRANGIPANI                 Pudupakkam,
 
 Residential Complex        Chennai              2,80,000
 
 ARIHANT -                  Arumbakkam,
 
 PANACHE                    Chennai              1,05,400
 
 ARIHANT - Jashn            Egmore
 
 (Mixed                     Chennai                36,831
 
 development)
 
 Green Wood                 Thazambur
 
 Plotted development        Chennai                39.665
 
 Acres
 
 DIVIDEND
 
 Your directors pleased to recommend final dividend for the financial year
 ended 30th September, 2011 @ 10% i.e.  Rs.1.00 per equity share on the
 paid-up equity shares of Rs.10 each for the financial year ended 30th
 September 2011, which if approved at the ensuing Annual General Meeting
 , will be paid to:
 
 i) all those shareholders whose name appears in the Register of Members
 as on 22nd March 2012 and;
 
 ii) all those whose name appears on that date as beneficial owners as
 furnished by National Securities Depository Limited and Central
 Depository Services Limited.
 
 DEPOSITS
 
 The Company has outstanding fxed deposits of Rs.1,40,28,560 as on
 30.09.2011, which is 0.87 % of aggregate of paid up capital and free
 reserves of the Company.
 
 SUBSIDIARY COMPANIES AND IT''S ACCOUNTS
 
 There are four subsidiaries of your Company as on 30th September, 2011.
 The financial details of the Subsidiary Companies as well as the extent
 of holdings therein are provided in a separate section of the Annual
 Report pursuant to Section 212 of the Companies Act, 1956.  Ministry of
 Corporate Affairs vide its general circular no.2/2011 dated 8th
 February, 2011 has issued a direction under Section 212(8) of the
 Companies Act, 1956 granting general exemption with respect to the
 provision of section 212 of the Companies Act, 1956. With the consent
 of the Board and following the aforesaid direction, the annual accounts
 and other details of Subsidiary Companies are not attached. However
 these documents will be made available upon request by any member of
 the Company interested in obtaining the same.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 In accordance with the Accounting Standard AS-21 on consolidated
 financial statements read with Accounting Standard AS-27 on financial
 reporting of interest in Joint Venture, auditors report on the
 consolidated financial statements, audited consolidated Balance Sheet,
 Profit and Loss account and Cash fow statements are provided in the
 Annual Report.
 
 CHANGES IN CAPITAL STRUCTURE
 
 Issued and Paid up Share Capital: On 3rd February, 2011, your Company
 allotted 11,20,000 fully paid-up equity shares of Rs.10/- each to
 Persons forming part of Promoter Group. and a body corporate upon
 conversion of remaining 11,20,000 convertible equity warrants (out of
 total 1550000 convertible equity warrants originally allotted on
 05.08.2009 to persons forming part of Promoter Group and Body
 Corporate) on a preferential basis at a total exercise price of Rs.89/-
 (including premium of Rs.79/- ) in terms of Chapter VII of SEBI (Issue
 of Capital & Disclosure Requirements) Regulations, 2009. The issued and
 paid-up capital of the Company enhanced from Rs.74,80,000 equity shares
 of Rs.10/- each to 86,00,000 equity shares of Rs.10/- each.
 
 REPORT ON CORPORATE GOVERNANCE
 
 Your Company ensures good corporate governance by implementing and
 complying with the polices, standards set out by Securities and
 Exchange Board of India and other regulatory authorities. The requisite
 certificate issued by M/s. B.P Jain & Co., Chartered Accountants
 confirming compliance with the conditions of Corporate Governance as
 stipulated under clause 49 of the Listing Agreement, is attached to
 this Report.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN - EXCHANGE
 EARNINGS AND OUTGO.
 
 The necessary details are furnished in Notes to Accounts, point no.10.
 
 PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A)
 
 During the period under review, no employee was in receipt of
 remuneration in excess of the limits laid down in Subsection (2A) of
 Section 217 of the Companies Act, 1956.
 
 DIRECTORS
 
 In accordance with the relevant provisions of the Companies Act, 1956
 and Articles of Association of the Company, Mr. Vimal Lunawath and Mr.
 Bharat Jain, Directors are liable to retire by rotation at the ensuing
 Annual General Meeting and, being eligible, offer themselves for
 reappointment. The brief resume of directors, who are to be
 re-appointed as stipulated under clause 49(IV) of the Listing
 Agreement, are furnished in the Corporate Governance Report forming
 part of the Annual Report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the requirements under Section 217 (2AA) of the Companies
 Act, 1956, the Board of Directors of the Company hereby state and
 confirm that:
 
 i. In the preparation of the annual accounts, the applicable accounting
 standards have been followed along with the proper explanations
 relating to the material departures;
 
 ii. The Directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of affairs of the
 company at the end of the financial year and of the profit or loss of the
 company for that period.
 
 iii. Proper and sufficient care have been taken to maintain adequate
 accounting records in accordance with the pro- visions of this Act to
 safeguard the assets of the company and to prevent and detect fraud and
 other irregularities.
 
 iv. The annual accounts have been prepared on a going concern basis.
 
 AUDITORS
 
 M/s B.P Jain & Co., Chartered Accountants, Auditors of the Company hold
 office until the conclusion of the ensuing Annual General Meeting. The
 Company has received a letter from them to the effect that they offer
 themselves for reappointment and if appointed, it would be within the
 prescribed limits under Section 224(1B) of the Companies Act, 1956.
 
 INVESTOR RELATIONS
 
 Your Company always endeavors to keep the time of response to
 shareholders'' requests/ grievances at the minimum. Priority is accorded
 to address all the issues raised by the shareholders and provide them a
 suitable reply at the earliest possible time. The Shareholders'' and
 Investors'' Grievance Committee of the Board met to re- view the
 redressal of investors grievances. The shares of your Company are
 continued to be traded in Electronic Form and the dematerialisation
 arrangement exists with both the depositories, viz., National
 Securities Depository Limited (NSDL) and Central Depository Services
 (India) Limited (CDSL). As on 30th September, 2011, 6599420 (Sixty fve
 lakhs Ninety nine thousands Four hundred and twenty only) shares have
 been dematerialised, represent- ing 76.74% of the subscribed capital.
 
 LISTING
 
 The shares of your Company are listed in Madras Stock Exchange Limited,
 Bombay Stock Exchange Limited and National Stock Exchange of India
 Limited. The Company has paid the listing fees for the Financial Year
 2011-2012 to the Stock Exchanges where its securities are listed.
 During the year, 11,20,000 equity shares allotted upon conversion of
 11,20,000 convertible warrants. These shares were listed at NSE on
 13.04.2011 and BSE on 19.07.2011 respectively. The listed capital of
 the Company with BSE and NSE is 86,00,000 fully paid-up equity shares
 of Rs.10/- each. The Company had made a re- quest to Madras Stock
 Exchange Ltd for delisting its en- tire securities (70,00,000 equity
 shares of Rs.10/- each) voluntarily after obtaining the approval of
 shareholders at the 15th Annual General Meeting of the Company held on
 28.03.2008. Delisting approval from MSE is awaited. The Company has
 also complied with the amendments in list- ing agreement from time to
 time.
 
 TRANSFER OF UNPAID DIVIDEND TO IEPF (INVES- TOR EDUCATION AND
 PROTECTION FUND)
 
 Pursuant to the provision of Section 205A (5) of the Com- panies Act,
 1956, the amount transferred to the unpaid dividend account which
 remains unpaid or unclaimed for a period of seven years from the date
 of such transfer shall be transferred to the Investor Education
 Protection Fund established under Sub- section (1) of Section 205C of
 the Companies Act, 1956.
 
 Unclaimed dividend amount of Rs.60,760/- relating to final dividend
 for the financial year end 30th September, 2003 was transferred to
 Investor Education and Protection Fund on 08.11.2011.
 
 Details of unclaimed Dividend:
 
 Financial     Date of                Unpaid           Due date for
 
 Year          Declaration            Dividend         transfer to IEPF.
 
               of dividend            as on 30.09.10
                                      amount.(Rs.)
 
 2004-05       24-03-2006             8,453.20         22-04-2013
 
 2005-06       23-03-2007            90,856.00         21-04-2014
 
 2006-07       28-03-2008          1,93,944.00         26-04-2015
 
 2007-08       20-03-2009            65,057.00         18-04-2016
 
 2008-09       26-03-2010          1,44,331.00         24-04-2017
 
 The Shareholders are requested to claim their unclaimed dividends
 before the aforementioned due dates. The unpaid dividend transferred to
 IEPF, cannot be claimed by the Shareholders.
 
 PERSONNEL
 
 The Board wishes to place on record its appreciation of all employees
 of the Company, for their wholehearted efforts and impressive
 contribution to the high level of performance and growth of the Company
 during the Year.
 
 ACKNOWLEDGEMENTS
 
 Your Directors place on record their gratitude for the support and co-
 operation received from CMDA, Corporation of Chennai, ELCOT, Banks and
 Financial Institutions, Customers, Suppliers and Shareholders and for
 their continued support. The Board also wish to place its sincere
 appreciation to the dedicated and committed team of employees.
 
                 For and on behalf of the Board of Directors
 
                    Arihant Foundations & Housing Limited
 
                    sd/-                      sd/-
 
             (KAMAL LUNAWATH)            (VIMAL LUNAWATH)
 
              Managing Director           Wholetime Director
 
 Place : Chennai
 
 Date: 29.11.2011