1.  Secured Loans:
 
 a.  Term Loans from Banks:
 
 – Rs. 5,303,491,662 (Rs. 1,923,660,728) Is secured by way of first charge
 on all the present and future movable and immovable assets including
 intangible assets, assignment of rights and benefits other than project
 assets for Khurja FTWZ project, Khurja Distripark Project, Rail Project
 and Nagpur Project. Second charge on current assets of the company
 other than project assets for Khurja FTWZ project, Khurja Distripark
 Project, Rail Project and Nagpur Project
 
 – Rs. 40,000,000 (Rs. 40,471,814) Is secured by way of hypothecation charge
 over the assets financed viz leasehold improvment, furniture and
 fixtures, office equipments at MIDC Office.
 
 – Rs. 369,445,156 (Rs. 499,987,621) Is secured by way of equitable mortgage
 of land at Khurja, near Noida, U.P.
 
 All the above loans are secured by personal guarantee of the Promoter
 Directors.
 
 – Rs. 333,242,189 (Rs. 500,000,000) Is secured by way of equitable mortgage
 of land situated at village Buti Bori , District Nagpur. This loan is
 also secured by personal guarantee of one of the Promoter Director.
 
 Term Loans repayable within one year - Rs. 629,445,156 (Rs. 370,937,500).
 
 b.  Short Term Loans from Banks:
 
 – Rs. 200,000,000 (Rs. Nil) Is secured by first ranking pari passu charge
 by way of hypothecation of current assets of the company. Second pari
 passu charge on fixed assets of the company both present and future.
 
 – Rs. 109,705,321 (Rs. Nil) Is Secured by first charge on all the present
 and future movable and immovable assets including intangible assets,
 assignment of rights and benefits other than project assets for Khurja
 FTWZ project, Khurja Distripark Project, Rail Project and Nagpur
 Project. Second charge on current assets other than project assets for
 Khurja FTWZ project, Khurja Distripark Project, Rail Project and Nagpur
 Project
 
 All the above loans are secured by personal guarantee of the Promoter
 Directors.
 
 c.  Working Capital loan from banks:
 
 – Rs. 198,672,152 (Rs. Nil) Is secured by first charge on entire current
 assets of the company other than current assets for Khurja FTWZ
 project, Khurja Distripark Project, Rail Project and Nagpur Project.
 Second charge on all the present and future movable and immovable fixed
 assets including intangible assets, assignment of rights and benefits
 other than project assets for Khurja FTWZ project, Khurja Distripark
 Project, Rail Project and Nagpur Project.
 
 – Rs. Nil (Rs. 93,227,672) Is secured by first hypothecation charge on
 entire current assets of logistics division of the company, both
 present and future. Second hypothecation charge on the receivables
 arising out of the operations of the JNPT FTWZ project, both present
 and future. First pari passu charge by way of equitable mortgage on
 immovable property located at Andheri (East) Mumbai. Subservient charge
 on all the immovable properties pertaining to FTWZ project JNPT and
 pledge of fixed deposit of Rs. 50 Lacs.
 
 All the above loans are secured by personal guarantee of Promoter
 Directors.
 
 d.  Vehicle Loans:
 
 – Rs. 1,922,233 (Rs. 2,790,317) are against hypothecation of specific
 vehicles.
 
 2.  Unsecured Loans
 
 a.  Rs. Nil (Rs. 299,994,803) is against the personal guarantee of the
 Promoter Directors.
 
 b.  Rs. Nil (Rs. 200,000,000) is against pledge of equity shares held by a
 promoter director.
 
 3.  a.  Contingent liability not provided for in respect of:
 
 Particulars                              2011              2010
                                            Rs                Rs
 
 Disputed income tax demands             4,350,076       6,609,841
 
 Claims against the Company 
 not acknowledged as debts             268,373,394      29,702,022
 
 Guarantees/ Letter of credit 
 issued by banks (net of 
 liabilities provided)                  162,618,636     642,814,009
 
 Guarantees given on behalf of 
 wholly owned subsidiaries of the   11,282,075,240   4,358,800,000
 company. Loans outstanding 
 against such guarantees is 
 Rs. 7,621,991,123 (Rs. 2,105,077,820)
 
 b.  Estimated amount of contracts remaining to be executed on capital
 account and not provided for (net of advances paid) – Rs. 1,341,367,174
 (Rs. 3,362,495,327).
 
 c.  The Company has provided security and guarantee [included in 4(a)
 above] to the lenders for loan granted of Rs. 400 Crore to its wholly
 owned subsidiary viz Arshiya Rail Infrastructure Limited.
 
 4.  The Company has not received any intimation from suppliers
 regarding their status under the Micro, Small and Medium Enterprises
 Development Act, 2006 and hence the disclosures, if any, relating to
 amounts unpaid as at the year end together with interest payable as
 required under the said Act have not been given.
 
 5.  a.  In the opinion of the management, the current assets, loans and
 advances and current liabilities are approximately of the
 
 value stated, if realised / paid in the ordinary course of business.
 The provision for all known liabilities is adequate and is not in
 excess of amounts considered reasonably necessary.
 
 b.  Certain debit and credit balances are subject to
 confirmation/reconciliation.
 
 6.  a.  Income from logistics operations and related services mainly
 comprises of freight and forwarding income, clearing and handling
 charges, other related income and also includes related commission
 income of Rs. 373,775,995 (Rs. 285,593,810)
 
 b.  Cost of logistics operations and related services mainly comprises
 of freight and forwarding expenses, clearing and handling charges and
 other related expenses
 
 7.  Employee Stock Option Plan (ESOP):
 
 The Company has established Arshiya Stock Option Plan 2007 for a
 grant of Options to the employees of the Company and its subsidiaries
 convertible into One Equity Shares of Rs. 2 each. These Options vest over
 a period of 36 months from the date of grant and are to be exercised
 within a maximum period of 12 months from the date of vesting.
 
 The Compensation committee formed by Board of Directors has approved
 the grant of Options. Each Option confers on the employee a right to
 one equity shares of Rs. 2 each at an exercise price of Rs. 210 per share.
 Detail of Grants made under Arshiya Stock Option Plan 2007 is as
 under:
 
 Out of the total employee stock compensation credit of Rs. 2,959,692 (Rs.
 18,075,573) recognized during the year, on account of the options
 outstanding at the end of the year, the Company has credited Rs. 225,848
 (Rs. 2,569,808) to the Profit and Loss account, reduced from project cost
 Rs. 890,478 (Rs. 276,466) on account of options granted to employees
 employed exclusively for its new projects. The balance credit of Rs.
 1,843,366 (Rs. 15,229,299) pertaining to the options granted to the
 employees of the subsidiary companies has been transferred to these
 subsidiary companies.
 
 8.  Changes in Accounting Policy:
 
 a.  During the current year, the Company has revised its accounting
 policy of providing for depreciation from written down value method to
 straight-line method with retrospective effect and the said change has
 resulted in a surplus of Rs. 16,111,279 (disclosed as exceptional item)
 and a debit of Rs. 5,227,305 on account of deferred tax. Consequently,
 the net profit for the year ended March 31, 2011 is higher by Rs.
 10,883,974. Had the Company continued with the written down value
 method of depreciation, the charge for the year ended March 31, 2011
 would have been higher by Rs. 48,767,509 and the deferred tax charge
 would have been lower by Rs. 15,822,618.
 
 b.  Ancillary cost in connection with the arrangement of long term
 borrowing is amortized over the tenure of borrowings, in conformity
 with Accounting Standards, as against earlier practice of charging in
 the year of incurrence. As a result, profit before tax (after
 exceptional items) of the year ended 31st March 2011 is higher by Rs.
 70,881,932.
 
 9.  Disclosure pursuant to Accounting Standard 15 (Revised) – Employee
 Benefits The disclosures as required as per the revised AS 15 are as
 follows:
 
 a.  Brief descriptions of the plans
 
 The Company has various schemes for long-term benefits such as
 provident fund and gratuity. The Company''s defined contribution plan is
 provident fund and Employees State Insurance where the Company has no
 further obligation beyond making the contributions. The Company''s
 defined benefit plans include gratuity. The employees of the Company
 are also entitled to leave encashment as per the Company''s policy.
 
 b.  Defined contribution plan
 
 Amount of Rs. 11,367,806 (Rs. 8,879,176) is recognized as expenses and
 included in Employees'' Remuneration – Schedule 15 in the Profit and
 Loss Account ## Expense recognized is net of transfer to group company
 for its contribution towards LIC fund amounting to Rs. 1,818,417 (Rs.
 929,240) and amount transferred from group companies is Rs. NIL (Rs.
 93,100). During the year Gratuity of Rs. 2,420,619 (Rs. 1,167,450) related
 to project employees have been capitalized.
 
 @The Company has capitalized leave encashment of Rs. 5,602,554 (Rs.
 4,261,767) during the year towards leave salary of projects employees.
 
 The estimates of future salary increases considered in actuarial
 valuation, take account of inflation, seniority, promotion, and other
 relevant factors such as supply and demand factors in the employment
 market.
 
 The expected rate of return on plan assets is based on the current
 portfolio of assets, investment strategy and market scenario.
 
 e. The Company made necessary application to the ESI authorities in
 June 2010 for registration under ESI Act when the same became
 applicable to it. However, the authorities suggested to use the
 registration number allotted to a company which got merged with this
 Company. The deposits were made accordingly. In this process, there was
 some delay. However, the authorities have not levied any penalty or
 interest for such delay as the company''s application for registrations
 had been filed on time.
 
 ii) The Company has identified India and Rest of the World as
 geographical segments for secondary segmental reporting.  Geographical
 sales are segregated based on the location of the customer who is
 invoiced or in relation to which the sale is otherwise recognized.
 
 iii) Capital expenditure also includes expenditure incurred on capital
 work in progress.
 
 10.  Capital Projects
 
 i) Three Warehouses and related common infrastructure of Free Trade and
 Warehousing Zone Project at Sai Village, Panvel commenced commercial
 operations from December 1, 2010.
 
 ii) Capital work-in-progress includes capital advances of Rs. 861,988,961
 (Rs. 999,427,581) and Preoperative Expenses Rs. 593,102,313 (Rs.
 645,036,509).
 
 iii) Borrowing costs capitalised or transferred to capital
 work-in-progress Rs. 401,928,537 (Rs. 172,232,539)
 
 11.  There is no amount due and outstanding to be credited to Investor
 Education and Protection Fund as at the year end.
 
 12.  Related party disclosures, as required by Accounting Standard 18
 Related Party Disclosures as given below:
 
 * Subsidiary Companies of Arshiya Hong Kong Limited
 
 # Subsidiary Companies of Cyberlog Technologies International Pte
 Limited ## Subsidiary Companies of Arshiya Domestic Distripark Limited
 
 @ Subsidiary Companies of Arshiya FTWZ Limited.
 
 $ Subsidiary Company of Arshiya Rail Infrastructure Limited.
 
 a.  Key Management Personnel
 
 Mr. Ajay S Mittal – Chairman and Managing Director Mrs. Archana A
 Mittal – Joint Managing Director Mr. V Shivkumar – Executive Director
 Mr. Sandesh R Chonkar - Executive Director
 
 b.  Enterprise owned or significantly influenced by key management
 personnel or their relatives Bhushan Steels Limited Arshiya Realty Limited
 
 Note:
 
 The related party relationships have been determined by the management
 on the basis of the requirements of the AS-18 and the same have been
 relied upon by the auditors.
 
 13.  Loans and Advances in the nature of Loans to subsidiaries
 (pursuant to Clause 32 of the Listing Agreement with Stock Exchange).
 
 b.  Though there is no stipulated repayment schedule for the above
 loans given to the subsidiary companies, all the loans are repayable on
 demand.
 
 c.  All loans and advances in the nature of loans are given in terms
 within the limits specified under section 372A of the Companies Act,
 1956.
 
 Notes:
 
 The following is the general description of significant clauses of
 above finance leasing arrangement by the Company.
 
 a.  Rights, ownership, title or interest in assets would not pass to
 the lessee and the lessee cannot assign, sublet, hypothecate or
 otherwise encumber the assets.
 
 b.  The lessor has a right to delegate to any person any of its rights
 under the agreements. Whereas, the lessee cannot assign its rights or
 obligations to any other person without the prior written consent of
 the lessor.
 
 c.  The lessee has no entitlement to terminate the lease during the
 lease period. Premature termination of lease can be done by the lessee
 only with the consent of the lessor and after making payment of
 discounted value of future lease rentals.
 
 Operating Lease
 
 a.  In respect of assets given on non-cancelable operating lease:
 
 The company has entered into an agreement with its subsidiary company
 Arshiya Supply Chain Management Private Limited for allotment of part
 of the pallet positions at its FTWZ Sai Village Panvel- Maharashtra.
 
 b.  In respect of assets taken on non-cancelable operating lease:
 
 The Company has entered into operating lease arrangements for 6 months
 to 5 years renewable at the option of the lessor and lessee. The lease
 arrangement provides escalations clause for increase in rent during the
 tenure of the lease. Under certain arrangements, refundable interest
 free deposits have been given.
 
 Notes:
 
 i) Salaries and allowances include basic salary, house rent allowance
 and leave travel allowance.
 
 ii) Provision for post retirement benefits which is based on actuarial
 valuation done on an overall company basis and is excluded from the
 above calculation.
 
 b.  Computation of Net Profit in accordance with section 349 of the
 Companies Act, 1956 and commission payable to the Managing Director/
 Joint Managing Director is as under:
 
 # During the year, Joint Managing Director and Executive Directors of
 the Company were involved in the new projects of the Company and hence
 managerial remuneration has been taken to pre-operative expenses
 (included in personnel cost) Rs. 15,091,410 (Rs. 7,403,026)
 
 14.  Current Liabilities include advances received from subsidiaries
 for transfer/sale of land, details as under:
 
 15. The Company has long term investment of Rs. 500,000 each in Arshiya
 Domestic Distripark Limited, Arshiya FTWZ Limited (Rs. 500,000) and
 Arshiya Transport and Handling Limited, subsidiaries of the company. As
 at balance sheet date, Net Worth of these subsidiaries is eroded. The
 company has also given loans and advances of Rs. 1,295,836,068 and Rs.
 915,519,431 to Arshiya FTWZ Limited and Arshiya Domestic Distripark
 Limited respectively. These investments are strategic in nature and
 having regard to the future business plan and projected profitability,
 management perceives the erosion in the value of investment in
 subsidiary as only a temporary in value. Hence, no provision for
 diminution in value of these investment is considered necessary.
 
 16. The figures for the previous year have been regrouped where
 necessary to conform to current year classification. The figures of the
 current year are not comparable with that of previous year in view of
 the commencement of commercial operations of the Free Trade Warehousing
 Zone at Sai Village, Panvel [Refer note 14 (i)]. Figures in bracket
 pertains to previous year.