THE GREAT INDIAN LOGISTICS OPPORTUNITY

1. THE GREAT INDIAN LOGISTICS OPPORTUNITY FTWZs | RailandRail Infrastructure | Industrial and Distribution Hubs Forwarding | Supply Chain Technology & Management | Transport & Handling

2. INDIA’S GROWING CONTRIBUTION TO WORLD TRADE INDIA’S GROWING MERCHANDISE IMPORTS INDIA’S GROWING MERCHANDISE EXPORTS % % % % % % % % % % % % 2008 2008 2009 2009 2010 2010 2007 2007 Export – India’s % contribution to world trade Import – India’s % contribution to world trade India’s world ranking in terms of exporting globally consumed merchandise moved from 26 to 20 during the period 2007 to 2010 India’s world ranking in terms of importing globally produced merchandise moved from 18 to 13 during the period 2007 to 2010 % % % % Growth of imports (2007-10) % Growth of exports (2007-10) %

3. INDIA & CHINA – A STUDY IN CONTRASTS

4. THE OPPORTUNITY OF INDIA Per capita consumption Paper (kg) PV* (per 1000) Toothpaste (gm) 2005 227 451 500 2% High 7% Upper Middle 127 9 12 28% Middle 62% Low Aluminum (kg) 2010 22 % of households across income brackets 4% High 13% Upper Middle 35% Middle 2 49% Low 2020E Cement (kg) Steel (kg) Copper (kg) 433 206 2.7 10% High 32% Upper Middle 176 Low per capita consumption Demographic drivers India Opportunity 33% 55 Middle 0.5 19% Low Definitions: High: Above $10k Upper Middle: $5k-$10k Middle: $2.5k-$5k; Low: Up to $2.5k *PV: Passenger Vehicles

5. THE INDIAN BUSINESS EVOLUTION 1990 ONWARDS IT ENABLES INDIA 2000 ONWARDS A VOICE TO THE PEOPLE 2005 ONWARDS THE ERA OF INFRA 2012 ONWARDS WHAT’S NEXT? 1970 ONWARDS KEEPING IT IN THE FAMILY 1980 ONWARDS INDIA EMBRACES TRADE GDP growth from 2012 assumed at 6% p.a.

6. MAJOR SUCCESSES OF FTWZ – ‘game changer for global economies’ ATTRACTIVENESS OF JAFZA JAFZA JAFZA contributes over 26% of Dubai’s GDP and generates 160,000 direct jobs by servicing over 6,400 companies from the zone and contributes to 25% of Dubai Port’s container traffic SINGAPORE Singapore FTZ’s has over 7,000 companies operate through these zones. Due to FTZs this island nation has become the gateway to Southeast Asia & a Global Distribution Hub for international companies EMPLOYMENT IN JAFZA AND TENANT COMPANIES (2006) WAIGAOQIAO Waigaoqiao FTZ in Shanghai has over 9,300 companies registered in the zone, including 135 of the Fortune 500 companies. From an economically backward country in 1970 to its gigantic success, FTZs have been the single most critical macroeconomic factor for China’s rise Source: PWC report for JAFZA FTZ

7. INDIA INCOMPETENT AS A REGIONAL HUB THE BIG THREE REASONS AS TO‘WHY FTWZ’ FOR INDIA 4.1X (source: Mckinsey Report) • While Consumption in India will grow in real terms from USD 378 billion presently to USD 1.56 trillion by 2025 a fourfold increase, reality is that : • India ranks 13th 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 20th as per WTO in terms of exporting world products contributing just over 1.4% of globally consumed merchandise, but growing @ 31% • India's container throughput in CY10 was around 9 million TEU's, as compared to Dubai (12 million), Singapore (28 million) & China (163 million) • Indicating zero penetration to the Value Addition, Hubbing and Re-Export market leveraging our cost and skill arbitrage

8. BUSINESS POTENTIAL FOR INDIA To/From Singapore Consolidation / De-consolidation cargo business constitutes approximately USD 12.47 billion to the GDP and 19.2 million TEUs • 30% of this potential translates to USD 3.74 billion to the GDP and 5.76 million TEUs for INDIA To/From Dubai • Consolidation/ De-consolidation constitutes approximately USD 12.08 billion to the GDP and 6 million TEUs • 30% of this potential translates to USD 3.62 billion to the GDP and 1.8 million TEUs for INDIA Thus, if India realizes 30% of Dubai’s & Singapore’s cargo volumes it will translate to an additional USD 7.36 billion (INR 36,000 crores) as a direct contribution to India’s GDP & increase container volumes at Indian ports by 7.56 million TEUs The extended potential will also generate three times additional indirect revenues due to increased supporting activities and will contribute USD 22 billion (INR 110,000 crores) to India’s GDP

9. ABOUT FREE TRADE & WAREHOUSING ZONES (FTWZ) WHAT IS IT ? • GOI Introduces the Free Trade & Warehousing Zones Policy, as part of Foreign Trade Policy (FTP) 2004-2009 Governed by the SEZ ACT,2005 & SEZ Rules,2006 Warehousing zone designated as foreign territory within India WHAT IS IT INTENDED FOR? • To make India into a global trading hub like China, Dubai and Singapore ACTIVITIES ALLOWED WITHIN AN FTWZ Storage Handling Transportation Packing Documentation Labeling Crating Strapping Washing Bottling Bubble wrapping Tagging Painting Cutting Bagging Palletization Quality Assurance Consolidation Repairs & Maintenance Cartonization Refurbishment

10. BARRIERS TO ENTRY FOR DEVELOPING & OPERATING FTWZs IN INDIA ENTRY BARRIERS BUSINESS SCALABILITY BARRIERS LAND APPROVALS RULES EXPERTISE SERVICE CAPABILITY Min 100 Acres contiguous land with 100,000 SqM built up area at strategic locations Approvals from State & Central Govt(Informal & Formal Approval, Notification) FTWZ in a sector specific SEZ cannot cater to any unit outside the sector specific SEZ Expertise in developing & operating FTWZs and in logistics & supply chain activities Integrating hard and soft logistics infrastructure to be able to service clients pan-India Offering ‘one throat to catch’ end-to-end unified logistics & supply chain services to global customers

11. INDIA’S FIRST – ARSHIYA’S FTWZ NEAR JNPT (OPERATIONAL) • MUMBAI • FTWZ • MASTER PLAN 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

12. FTWZ – BENEFITS TO CUSTOMERS FOR IMPORTS FOR RE-EXPORTS FOR EXPORTS • Flexibility towards end-distribution in India • Duty deferment benefits (freeing up working capital) • 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 • Products from India entering the FTWZ are treated as deemed export providing immediate benefits to suppliers • Local Tax Exemption (eg. 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 transaction capability • Increasing supply chain efficiencies (forward & reverse) while enhancing capital cash flow • 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 optimizing activities

13. FTWZ - UNIQUE BENEFITS FOR IMPORTS • 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

14. GAME CHANGER BENEFITS OF FTWZ CASE STUDY BENEFITS OF IMPORTING PRODUCTS INTO INDIA THROUGH THE FTWZ (DEEMED FOREIGN TERRITORY)

15. GLOBAL AUTOMOBILE MANUFACTURER’S CURRENT SUPPLY CHAIN International Suppliers Rejection after duty payment Supply of spares and parts to Dealers in India for after sales and service Dealers in India Dealers in India Dealers in India Dealers in India Dealers in India International Suppliers Indian Ports International Suppliers India Manufacturing Plant International Suppliers Storage of Spares, Parts and Components for after sales & service post duty payment Rejection after duty payment International Suppliers • Duty paid storage of spares implicating higher working capital of the supply chain implicating higher cost of product • Limitations in volume of storage increasing lead time for customer delivery • Higher lead time for client delivery creating customers dissatisfaction (unauthorised spares in the market) • Quality control post duty payment increasing hassle for re-export and therefore cost

16. ARSHIYA’S SOLUTION THROUGH FTWZ International Suppliers Rejection without duty payment Storage of Spares, Parts and Components for after sales & service without duty payment Dealers in India Dealers in India International Suppliers International Suppliers International Dealers International Dealers International Dealers FTWZ International Suppliers Regional distribution of spares and parts enabling the income tax exemption on the re-export of imported spares and parts International Suppliers Rejection without duty payment • Duty deferred storage reducing working capital and therefore cost of product • Reduction in lead time in supplying the spares for after sales and limitless capability of spares storage • Quality control before duty payment enabling hassle free re-export process and therefore lowering • of associated supply chain costs • Regional Distribution capability leveraging cost/skill arbitrage of India in addition to Income tax exemption • of profits from this activity

17. FTWZ - UNIQUE BENEFITS FOR EXPORTS Local Tax Exemption (e.g. CST, Sales Tax, Excise & VAT) on all activities conducted inside the FTWZ Products from India entering the FTWZ are treated as deemed export providing immediate benefits to suppliers 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

18. GAME CHANGER BENEFITS OF FTWZ CASE STUDY BENEFITS OF EXPORTING PRODUCTS INTO INDIA THROUGH THE FTWZ (DEEMED FOREIGN TERRITORY)

19. GLOBAL FMCG MAJOR’S CURRENT SUPPLY CHAIN Reverse logistics of rejected materials Breaking and re-invoicing of units as per different store demands is conducted before dispatches to the stores. Supplier 1 Store 1 Store 173 Store 2 Supplier 2 Various Ports across India DC in Europe For value addition All the SKUs are sent by the suppliers directly to DC in Europe by suppliers Supplier 93 93 suppliers from India , Karachi(18) Bangladesh(15), & Sri Lanka (4) • Distribution Center (DC) in Europe maintained only due to invoicing regulatory limitations where consolidations of products sourced from India is done • Increased supply chain cycle lead time and associated costs • Company’s India trading arm responsible for any under/over invoicing or customs issues with respect to shipments of suppliers without having any control over process • Quality control currently in European DC causing higher product returns • European DC doing labeling for products made in India/Asian sub-continent

20. ARSHIYA’S SOLUTION THROUGH FTWZ Supplier 1 Supplier 2 Store 173 Store 2 Store 1 Supplier 93 Supplier in Pakistan FTWZ DC in FTWZ for Value addition Supplier in Bangladesh & Sri Lanka • FTWZ removes regulatory limitations of consolidating product from suppliers in India, Sri Lanka, Bangladesh & Pakistan in Asia • Significant reduction in DC operations costs of India Vs. Europe • Value addition for end-distribution to world-wide stores done in FTWZ in India lowering costs. • Reduction in suppliers working capital due to faster payment cycle • Lowered reverse logistics cost • Enhanced control and efficiency in inventory management - closer to the suppliers

21. FTWZ - UNIQUE BENEFITS FOR RE-EXPORTS 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 Service tax exemption on all activities conducted inside the FTWZ including rental & labour 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

22. GAME CHANGER BENEFITS OF FTWZ CASE STUDY BENEFITS OF HUBBING & VALUE ADDITION OF PRODUCTS IN INDIA THROUGH THE FTWZ (DEEMED FOREIGN TERRITORY)

23. GLOBAL MOBILE MANUFACTURER’S CURRENT SUPPLY CHAIN Supply of Charger, Earphone and packaging material Supply of completely packaged mobile phones Indian Subcontinent CHINA Middle East Supply of battery USA Far East Asia Supply of handset South East Asia Regional Value Addition, Hubbing & Distribution Centre in Singapore/Dubai GERMANY Africa/Eastern Europe VOS like Labelling, packaging, assembly and consolidation based on the country of export • Higher cost of operations in Singapore i.e. Labour, Water, Electricity, Materials etc. • Higher charges for Value Optimising Services (VOS) like labeling, packaging, assembly etc. Increasing cost of product • Technically skilled manpower expensive and not abundant • Cost of economies of scale

24. ARSHIYA’S SOLUTION THROUGH FTWZ Supply of Charger, Earphone and packaging material Supply of completely packaged mobile phones Indian Subcontinent CHINA Middle East Supply of battery USA Far East Asia Supply of handset South East Asia FTWZ GERMANY VOS like Labelling, packaging, assembly and consolidation based on the country of export Africa/Eastern Europe • Lower cost of operations in India i.e. Labour, Water, Electricity, Material etc. • Minimum charges for Value Optimising Services (VOS) like kitting, labeling, packaging, assembly etc. decreasing cost of product • Local tax exemptions (Excise, VAT etc.) on all the value added service inside FTWZ • Abundance of technically skilled manpower

25. ARSHIYA’S MUMBAI FTWZ Main Gate Custom office Entry Customs Office Warehouse External View Container Yard Stuffing at Container Yard Cargo storage inside Warehouse Docking Area Docking Area

26. ARSHIYA’S MUMBAI FTWZ - Over Dimensional Cargo (ODC) Yard

27. ARSHIYA MUMBAI FTWZ : SNAPSHOTS Warehouse Internal View Temp. Controlled Area VOS Area Marshalling Area Server Room Electrical Sub-Station Generators for Power Backup CCTV Cameras Security System at Warehouse

28. FTWZ WORLD CLASS INFRASTRUCTURE: WAREHOUSES AND YARDS • 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 Optimizing Services (VOS) within the Warehouse • Mezzanine storage area with temperature controlled HVAC system & optional humidity control • 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 • Maintenance & Repair (M&R) Yard, Scrap Yard & an Empty Container Yard, Food court, Medical dispensary with Ambulance at site • Open & covered Over Dimensional Cargo (ODC) Yard with Paver-Block flooring for storage of cargo that cannot be stored in the Warehouse

29. FTWZ WORLD CLASS INFRASTRUCTURE • Business Ancillary Services: On-site Office spaces, Banks, Insurance, Currency Exchanges & CHAs that reduce operating costs for companies operating in the Foreign Territory • 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 server room within each warehouse & a centralized data center with uninterrupted data, voice & video connectivity & 100% back up • 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 • Earthquake Resistant & Storm Water Drainage System: Warehouses designed as per Seismic Zone 4 requirements. In addition the FTWZ has 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. • Corporate Social Responsibility: Ambulance and Fire Tender to service not only Arshiya’s FTWZ but also the residents of the neighboring area

30. FTWZ – THERE’S A WAY TO SUSTAINABILITY At Arshiya, we believe there is a way to contribute to the environment, play a pertinent sustainable role through varied eco friendly and environment effective measures. Here’s a look at few : STP: By way of a sewage treatment plant, recycled water is used for irrigation purposes Reutilization of excavated rocks: Excavated rocks are used for project construction thereby conserving resources Green Zone: At Arshiya we ensure that more than 10% of the project area is covered under green zone along with specific selection of plant species Natural Lighting & Insulation: Optimum, natural sunlight presence along with provision for ambient temperature at the FTWZ Site via articulate architecture planning/construction ensures optimal electricity consumption and ensures harmony at workplace Rain Water Harvesting: Bore wells, recharge pits and natural ponds provide for maintenance of ground water level Environmental Consciousness: At Arshiya it is our constant effort to emit no Industrial effluents and contribute towards maintaining sanctity of the environment through Waste Disposal Units

32. FACILITIES IN THE FTWZ • STANDARD WAREHOUSE ODC YARD (OPEN & COVERED) • CONTAINER YARD (CFS) • CHILLER/FREEZER HAZARDOUS STORAGE • TEMPERATURE CONTROLLED STORAGE STRONG ROOM OFFICE INFRASTRUCTURE

33. VALUE OPTIMISING SERVICES (VOS) IN FTWZ VOS ON PALLETS / BREAK-BULK OF PALLETS HIGH END VOS VOS ON CONTAINER • Carting & Shifting of the Pallets • Palletization • Carbonization • Strapping • Shrink Wrapping • Packaging / Re-packaging (into smaller parcels/cases /cartons) • Labeling / Re-Labeling • Bar-Coding • Strapping, refurbishment • Tagging, shrink / stretch / bubble wrapping etc. • Customs Documentation • Incoming & Outgoing Transportation (Port to FTWZ & return) • Gate Coordination (incoming & outgoing) • Survey of Cargo/Containers • (incoming & outgoing) • Handling / Loading & Unloading (inbound & outbound) • Weighment of Containers • Fumigation of Containers • Scanning of Containers • Lashing / Unlashing Services etc. • Quality Control (QC) • Sorting / Assorting • Kitting / De-kitting • Bottling/ Blending • Assembling • Cutting & Threading • Consolidation • Agglomeration • Repairs & Maintenance • CKD/ SKD assembly • Cutting/ Polishing • Painting/ Coating • Filming/ Re-sizing • Splitting • Threading • Coupling, etc.

34. HOW DO WE CHARGE OUR CUSTOMERS • 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)

35. MAJOR INTERNATIONAL CUSTOMERS All above logos are property of respective owners

36. MAJOR INDIAN CUSTOMERS All above logos are property of respective owners

37. 3PL CUSTOMERS All above logos are property of respective owners

38. REVENUE MODEL OF AN FTWZ CLIENT Per Piece Rate – INR 6.99 34% reduction on current cost for customer

39. THE FTWZ REVOLUTIONIZING THE INDIAN LOGISTICS LANDSCAPE

40. SOURCES OF REVENUE THROUGH THE FTWZ THROUGHPUT FORWARDING RAIL & RAIL INFRASTRUCTURE INDUSTRIAL & DISTRIBUTION HUBS REVENUE FROM UNIFIED SUPPLY CHAIN INFRASTRUCTURE SOLUTIONS REVENUE FROM VALUE OPTIMISING SERVICES (VOS) ON CONTAINERS AND PALLETS VOS ON CONTAINER VOS ON PALLETS SUPPLY CHAIN TECHNOLOGY & MANAGEMENT REVENUE FROM RENTALS OF WAREHOUSE, CHILLER/FREEZER, CONTAINER &ODC YARD, OFFICE SPACE RENTAL HIGHER END VOS TRANSPORT & HANDLING

41. INDIAN LOGISTICS IN-EFFICIENCIES LOGISTICS SPEND AS A % OF GDP INEFFICIENCIES IN LOGISTICS IN INDIA • Absolute Value inefficiency & market potential of USD 80 Billionon USD1.6 Trillion GDP owing to excess spending on Logistics • India burns nearly USD 2.5 Billion of fuel due to trucks idling on interstate check-posts • Avg time to clear cargo at ports in Singapore is 3-4 days vs 19 daysat ports in India % OF CONTAINERIZATION OF TRADE SHARE OF ROAD VS RAIL TRANSPORT An Economies of Scale problem requires an Economies of Scale solution

42. CAPITALIZING ON INDIA’S LOGISTICS & SUPPLY CHAIN OPPORTUNITY - WHAT DOES IT TAKE? • Free Trade & Warehousing Zones (FTWZs) : • To enable EXIM cargo Consolidation, Value Addition and allow India to become a Regional Trading Hub • Industrial and Distribution Hubs: • For Domestic distribution, cargo value addition and consolidation for Rail transportation to remove dependency on road • Rail and Rail Infrastructure: • Comprises 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 • Unified Logistics & Supply Chain Infrastructure with Supply Chain Technology & Management, Transport & Handling and Forwarding : • Global ocean & air logistics, domestic forward and reverse supply chain management with ownership on reduction of working capital and product visibility & control, through technology

43. ARSHIYA INTERNATIONAL LTD. • Capitalizing on India’s mammoth logistics • opportunity through Unified Supply Chain • Infrastructure & Solutions • Partnering towards • FTWZs with integrated ICD/CFS • Rail and Rail Infrastructure Industrial & Distribution Hubs • Supply Chain Technology & Management • Forwarding • Transport & Handling

44. FTWZ SAI - JULY 2009

45. FTWZ SAI - JULY 2009

46. SAME VIEW – AUGUST 2010

47. CONTAINER YARD - AUGUST 2009

48. CONTAINER YARD - SEPTEMBER 2009

49. CONTAINER YARD - JULY 2010

50. CONTAINER YARD - FEBRUARY 2012