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Adani Exports Limited

Five Star Export House

DIRECTORS REPORT
To The Members, Your Directors have pleasure in presenting the 13 th Annual Report together with the audited statement of accounts for the year ended 31 st March, 2005. FINANCIAL RESULTS The Financial Results of your Company for the year ended 31 st March, 2005, are as follows : (Rs. In Crores)* Year Ended March 31, Sales and operating earnings Other income Gross Profit before Depreciation, Interest and Tax Finance charges Depreciation Profit before Tax Surplus brought forward from Previous Year Balance available for appropriations Appropriations: Dividend on Preference Shares: - Interim - Final Dividend on Equity Shares: - Final Tax on Dividend General Reserve Balance carried to Balance Sheet *1 crore equals 10 million Total PERFORMANCE OF YOUR COMPANY Your Directors are pleased to inform you that your Company has posted a Gross Turnover of Rs. 13515.84 Crores as against the Previous Year of Rs. 7069.05 Crores, showing growth of 91.20%. The Profit for the period before taxation for the year under review is Rs. 130.62 Crores as against the Previous Year of Rs. 126.14 Crores. This has been made possible largely due to the top-line growth, focus on value-added products and continued accent on cost-optimisation. During the year, the turnover has increased substantially as a result of your Company pursuing the twin strategy of concentrating on high value added turnover in its core areas and also focusing on its supportive strength to promote turnover of certain items with marginal overall profitability. The value addition exercise has been immensely helped by the emphasis on exports and the consequent higher per unit realization. In fact, the exports have grown from Rs. 4841.46 Crores in 2003-04 to Rs. 10807.97 Crores in 2004-05, the representing growth of 123 %. Your Company has now been recognized as Five Star Export House by the Ministry of Commerce and Industry, Office of the Joint Director General of Foreign Trade, Government of India in accordance with the provisions of EXIM Policy. DIVIDEND In the Previous Year, your Company had paid a dividend of Rs. 4 per equity share. This year, your Directors are pleased to recommend a dividend of 40% on 225539684 Equity Shares of Re. 1 each absorbing Rs. 10.29 Crores, which if approved at the forthcoming Annual General Meeting, will be paid to all those equity shareholders whose names will appear on the Register of the Members as on 9 th August, 2005.Hence, the total dividend payout for the year under review is Rs. 10.29 Crores including tax thereon. The dividend will not suffer tax in the hands of the shareholders. 50,65,684 equity shares allotted during the year upon conversion of 740 Foreign Currency Convertible Bonds (FCCBs) will be entitled to full dividend. SEGMENT REPORTING Your Company is a Five Star Export House with operations covering a wide range of commodity groups such as Agro, Energy, Precious Goods and Textiles. In view of the integrated nature of business in its entirety, there are no separate segments within the Company as defined by Accounting Standard 17 (Segmental Reporting) issued by the ICAI. GROUP FOR INTER-SE TRANSFER OF SHARES As required under Clause 3(e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, persons constituting Group (within the meaning as defined in the Monopolies and Restrictive Trade Practices 2005* 13515.84 3.03 184.88 52.15 2.11 130.62 239.38 347.67 2004* 7069.05 76.98 181.45 53.52 1.79 126.14 186.37 310.46
140 120
RS. IN CRORES

P R O F I T B E F O R E TA X
100 80 60 40 20 0 199798 199899 199900 2000200101 02 YEAR 200203 200304 200405

0.19 9.02 1.29 80.00 257.16 347.67

0.99 0.01 8.82 1.26 60.00 239.38 310.46


RS. IN CRORES

PROFIT
140 120 100 80 60 40 20 0 199798 199899 199900

AFTER

TAX

200001 YEAR

200102

200203

200304

200405

YEAR

Adani Exports Limited


Five Star Export House

Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulation 10 to 12 of the aforesaid SEBI Regulations are given in Annexure III attached herewith and the said Annexure III forms part of this Annual Report. FIXED DEPOSITS Your Company has neither invited nor accepted / renewed any deposits from the Public within the meaning of Section 58A of the Companies Act, 1956 during the year under review. LISTING OF SHARES The shares of your Company are listed at The Stock Exchange, Mumbai, National Stock Exchange and Ahmedabad Stock Exchange. The listing fee for the year 2005-06 has been paid before the due date. SHARE CAPITAL Sub-division of face value of shares : After obtaining necessary approval of the members at the 12th annual general meeting of the Company held on 3rd July, 2004, the face value of shares of your Company stands sub-divided from Rs. 10/- each per share to Re. 1/- each per share with effect from 7 th August, 2004. Your directors are pleased to inform you that after reduction in the unit price of the shares, the shares of the Company have now become more affordable to the retail investors and this has resulted into improvement in terms of liquidity in the scrip significantly. Issue of Foreign Currency Convertible Bonds (FCCBs) In September 2004, in order to meet the long term fund requirements, we raised a sum of Rs. 174.42 Crores (USD 38 million) by issuing 1% Foreign Currency Convertible Bonds (FCCBs) in the international markets. We are pleased to inform you that this was one of the most successful issues in the overseas market. Allocations were made to top quality investors. The conversion price of the share was fixed at Rs. 67 per share. The fixed exchange rate at which the aggregate principal amount of the Bonds deposited for conversion shall be translated into INR (the Fixed Exchange Rate) is INR 45.865 for USD 1. These bonds are convertible into equity shares of the Company at Rs. 67 per share at the option of the bondholders, any time during the conversion period from November 8, 2004 to September 23, 2009. Unless the Bonds are previously purchased and cancelled or the Bonds are converted as herein provided, the Company will redeem the Bonds at 124 per cent on October 23, 2009, without any previous notice. Its a matter of great pleasure to inform you that Foreign Currency Convertible Bonds (FCCBs) issue has given advantages of prevailing low financing costs regime existing in the international markets to your Company. The above FCCB issue is a clear demonstration of the confidence of investors in your Company. FCCB issue has made your Company financially even stronger and has enhanced its ability to encash any growth opportunity that may come its way. Conversion of Foreign Currency Convertible Bonds into Equity Shares of the Company and increase in Paid up Share Capital During the year under review, your Company had received seven conversion notices for conversion of 740 Foreign Currency Convertible Bonds (FCCBs) of USD 10,000 each into 50,65,684 equity shares of the Company. 35,25,442 equity shares were allotted to FCCB holders upon conversion of 515 FCCBs on 18 th February, 2005 and 15,40,242 equity shares were allotted to FCCB holders upon conversion of 225 FCCBs on 21 st March, 2005. In view of this, paid up share capital of your Company stands increased from Rs. 220474000/- to Rs. 225539684/-. Redemption of Preference Shares and Non Convertible Debentures. During the year under review, your Company has redeemed 1,00,00,000 9.9% Cumulative Redeemable Preference Shares of Rs. 10/- each Series VII. The Company has paid dividend @ 9.9% p.a. upto the date of redemption. As per the terms of issue, last installment of Rs. 5,00,00,000/- of 15,00,000 privately placed 14.50% Secured Redeemable Non Convertible Debentures of Rs. 100/- was redeemed on 29 th December, 2004 being its due date for redemption. CORPORATE GOVERNANCE Your Directors are pleased to inform you that name of your Company has figured amongst the Top 25 Companies selected for the purpose of Corporate Governance Award, 2004 by the Institute of Company Secretaries of India (ICSI). Your Company has already implemented mandatory requirements of Corporate Governance in terms of the provisions of Clause 49 of the Listing Agreement in its letters and spirit and continuously tries to improve it. Adequate steps have been taken to ensure that all the provisions of Clause 49 of the Listing Agreement are duly complied with. A separate section on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement/s with Stock Exchange/s together with the Management Discussion and Analysis of the financial position of the Company, forms part of the Annual Report. FORMATION OF VARIOUS COMMITTEES Details of various committees constituted by the Board of Directors are given in the Corporate Governance Report annexed and forms part of this report.

2 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

DIRECTORS Re-appointment of Managing Director The tenure of Shri Rajesh S. Adani as Managing Director is due to expire on 10th June, 2005. In view of his expertise in the financial and commercial intricacies, he is in charge of the day to day operations of the Company. His proactive and personalised approach to business and competitive spirit has been instrumental in the Company establishing business relationships and a wide network of contacts with traders across the globe. The remuneration committee of the Company at its meeting held on 11th May, 2005 and subsequently, the Board at its meeting held on 11th May, 2005 have re-appointed Shri Rajesh S. Adani as Managing Director unanimously for a further period of five years with effect from 10th June, 2005 subject to the approval of the shareholders in General Meeting In view of this, it will be in the best interest of the Company to re-appoint Shri Rajesh S. Adani as Managing Director of the Company w.e.f. 10th June, 2005. Terms and conditions for his re-appointment are contained in the Explanatory Statement forming part of the Notice of the ensuing Annual General Meeting. Increase/revision of remuneration of Executive Chairman On review of the duties and responsibilities assigned to Mr. Gautam S. Adani, Executive Chairman and looking to the time devoted and from taxation point of view, the Board of Directors of your Company on recommendation of remuneration committee have decided to increase remuneration payable to him as detailed in the Explanatory Statement forming part of the Notice of the ensuing Annual General Meeting. Resignation/cessation of Director(s) Shri Vasant S. Adani has resigned as Whole-time Director of the Company w.e.f. 11th May, 2005. Shri Vasant S. Adani will continue as Non-executive Director of the Company. Shri Biswajit Choudhuri, who was appointed as Nominee Director of Unit Trust of India on the Board of Directors of the Company on 26th October, 2002 has resigned with effect from 24th January, 2005. The Board has placed on record the valuable contribution made to the Company by Shri Vasant S. Adani as Whole-time Director and Shri Biswajit Choudhuri as Nominee Director of Unit Trust of India. Retirement by Rotation In accordance with the requirements of the Companies Act, 1956 and the Articles of Association of the Company, Shri Vasant S. Adani and Shri C.R. Shah retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment. DIRECTORS RESPONSIBILITY STATEMENT The Directors Responsibility Statement as required under Section 217(2AA) of the Companies Act, 1956. Directors hereby confirm : That in the preparation of the accounts for the financial year ended 31 st March, 2005, the applicable accounting standards have been followed and that no material departures have been made from the same. That the Directors have selected such accounting policies and applied consistently and reasonable and prudent judgements and estimates were made 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 profit or loss of the Company for that period. That the Directors have taken proper and sufficient care 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. That the Directors have prepared the annual accounts on a going concern basis.

CONSOLIDATED ACCOUNTS Your Directors have pleasure in attaching the Consolidated Financial Statements in accordance with the Clause 32 of the Listing Agreement with the Stock Exchanges and Accounting Standard 21 on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India, which form part of the Annual Report and Accounts. SUBSIDIARY COMPANIES Adani Global Limited is a wholly owned subsidiary of your Company. Adani Global Pte. Ltd., Singapre and Adani Global FZE, Dubai are subsidiary Companies of Adani Global Ltd. The Directors report, Audited Statement of Accounts and the Auditors Report thereon of these subsidiary companies are annexed pursuant to Section 212 of the Companies Act, 1956. As the financial year of Adani Global Ltd., Adani Global FZE, and Adani Global Pte Ltd. are not coinciding with that of your Company, the relevant information as required under Section 212(5) of the Companies Act, 1956 of the said Companies are also annexed herewith. Further, as required under Accounting Standard AS-21 issued by The Institute of Chartered Accountants of India, in compliance with the Listing Agreement/s with the Stock Exchange/s, Consolidated Statement of Accounts together with the Auditors report are annexed.

Adani Exports Limited


Five Star Export House

AUDITORS AND AUDITORS REPORT The statutory auditors, M/s. Dharmesh Parikh and Co., Chartered Accountants, Ahmedabad, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. M/s. Dharmesh Parikh and Co. have confirmed their eligibility for re-appointment under Section 224(IB) of the Companies Act, 1956. The Audit Committee and the Board of Directors recommend re-appointment of M/s. Dharmesh Parikh and Co., Chartered Accountants, Ahmedabad as statutory auditors of the Company for the year 2005-06. The notes to the Accounts referred to in Auditors Report are self explanatory and, therefore, do not call for any further explanation under Section 217(3) of the Companies Act, 1956.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC. Since your Company is a trading unit, the statement containing the information as per Section 217(1)(e) of the Companies Act read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, is not appended. The details of foreign exchange earnings and outgo are appended in the Annexure-I attached herewith and forms part of this report. EMPLOYEES Your Company continues to focus on its core values of Quality, Integrity, Leadership, Collaboration and Respect for people. As a part of talent acquisition exercise, 47 professional were recruited to meet gaps in skill sets and support growth areas. Relations between the Company and the employees continue to be cordial at all locations. Information required to be given pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is enclosed herewith, marked Annexure II and forms part of this report. AWARDS AND RECOGNITIONS Your Company has received the following awards/recognitions/trophies during the year under review: 1. 2. 3. Name of your Company was figured amongst the Top 25 Companies selected for the purpose of Corporate Governance Award, 2004 by the Institute of Company Secretaries of India. Your Company was recognized as Five Star Export House by the Ministry of Commerce and Industry, Office of the Joint Director General of Foreign Trade, Government of India in accordance with the provisions of EXIM Policy. GCCI Export Appreciation Award 2003-04 in recognition for your Company s outstanding export performance in the field of Agro, Textile and Marine Products, Cut and Polished Diamonds etc, as Merchant Exporter in the category of Rs. 1000 Crores and above. Secured 63rd rank in Dun and Bradstreets Indias Top 500 Companies, 2004.

4.

TSUNAMI RELIEF Just prior to the year end the country was drawn into the totally unexpected Tsunami disaster. This was amongst the worst disasters that the world has faced and the entire Adani family responded to the process of relief and rebuilding. Your Company donated Rs. 50,00,000/- (Rupees Fifty Lacs Only) to Prime Ministers Relief Fund towards rehabilitation to Tsunami victims. Besides this, all the employees of your Company donated one day salary to the Prime Ministers Relief Fund. ACKNOWLEDGEMENT Your Directors record their thanks to the Companys employees at all levels for their dedication and commitment throughout the year. Your directors would also like to record their thanks to the Companys shareholders, bankers, financial institutions, Central and State Government officials, vendors, traders and all customers for their continued support and co-operation. For and on behalf of the Board of Directors PLACE : AHMEDABAD DATE : 11 th May, 2005 GAUTAM S. ADANI Chairman

4 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

ANNEXURE TO DIRECTORS REPORT FOR THE YEAR ENDED 31ST MARCH, 2005 ANNEXURE - I
FOREIGN EXCHANGE EARNINGS AND OUTGO: Current year (I) Foreign exchange earned (Including export of goods on FOB basis ) (II) Foreign exchange used 10807.97 9228.08 (figures in crores) Previous Year 4841.46 2155.71

ANNEXURE - II
A. Information pursuant to Section 217(2A) of the Companies Act,1956, read with Companies (Particulars of Employees) Rules, 1975. Age Designation (yrs.) 43 41 50 51 Chairman Managing Director Whole-time Director CEO (Energy & Minerals) Remuneration Qualification Gross (Rs. In Crores) 1.03 1.32 0.79 0.50 S.Y. B.Com B. Com. B.A. Diploma in Mktg. Date of Commencement of Employment 1/12/93 1/12/93 7/1/95 1/1/98 Last Employment Held-Designation and Period for which Held. Business Business Business Chief General Manager Karamchand Thapar and Brothers (C.S.) Ltd. Sr. Name No. 1 2 3 4 Mr. Mr. Mr. Mr. Gautam S. Adani Rajesh S. Adani Vasant S. Adani Pradeep Mittal

B.

Employed for a part of the financial year and were in receipt of remuneration for any part of the financial year at a rate which in aggregate was not less than Rs. 2,00,000/- per month. Age Designation (yrs.) Remuneration Qualification Gross Date of Commencement of Employment Last Employment Held-Designation and Period for which Held.

Sr. Name No.

N I L Note : Remuneration as above includes salary, contribution to provident and other funds and other perquisites.

ANNEXURE - III

FORMING PART OF THE DIRECTORS REPORT

The following is the list of persons constituting Group (within the meaning as defined in the Monopolistic and Restrictive Trade Practices Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulation 10 to 12 of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (the said Regulations), as provided in Clause 3(e) of the said Regulations : Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 5 Sr. No. Accurate Finstock Pvt. Ltd. 23 Adani Agri Fresh Ltd. 24 Adani Agro Pvt. Ltd. 25 Adani Chemicals Ltd 26 Adani Global FZE 27 Adani Global Ltd. 28 Adani Global Pte. Ltd. 29 Adani Infrastructure Services Ltd. 30 Adani Investments 31 Adani Logistics Ltd. 32 Adani Petronet (Dahej) Port Pvt. Ltd. 33 Adani Port Infrastructure Ltd. 34 Adani Power Pvt. Ltd. 35 Adani Properties Pvt. Ltd. 36 Adani Textile Industries 37 Adani Wilmar Ltd. 38 Advance Exports 39 B2B India Pvt. Ltd. 40 B2C India Ltd. 41 Crown (International) 42 Ezy Global 43 Gautam S. Adani Family Trust 44 Particulars Sr. No. Gujarat Adani Energy Ltd. 45 Gujarat Adani Infrastructure Pvt. Ltd. 46 Gujarat Adani Port Ltd. 47 I Call India Ltd. 48 I Gate India Pvt. Ltd. 49 Intercontinental (India) 50 Mahasukh S. Adani Family Trust 51 Mundra Special Economic Zone Ltd. 52 Netvantage International Ltd. 53 Rajesh S. Adani Family Trust 54 S. B. Adani Family Trust Shahi Property Developers Pvt. Ltd. 55 56 Shantikrupa Estates Pvt. Ltd. 57 Vasant S. Adani Family Trust 58 Vinod S. Adani Family Trust 59 Bhavik B. Shah 60 Gautam S. Adani 61 Jeet G. Adani 62 Karan G. Adani Kunal D. Shah 63 Mahasukh S. Adani 64 Mansi K. Shah 65 Particulars Particulars Namrata P. Adani Param P. Adani Pranav V. Adani Priti G. Adani Priti R. Shah Pushpa V. Adani Rahi R. Adani Rajesh S. Adani Rakesh R. Shah Ranjan V. Adani Riddhi V. Adani Sagar R. Adani Shantaben Adani Sharmishta Sanghavi Shilinben R. Adani Surekha B. Shah Suvarna M. Adani Vanshi R. Adani Vasant S. Adani Vinod N. Sanghavi Vinod S. Adani

Adani Exports Limited


Five Star Export House

ANNEXTURE - IV MANAGEMENT DISCUSSION AND ANALYSIS REPORT


The management of Adani Exports Limited presents the analysis of performance of the Company for the year 2004-2005 and the outlook for the future, which is based on assessment of the current business environment. It may vary due to future economic and other developments, both in India and abroad. Economy and Business Environment Review of Economy

During the year 2004-2005, the Indian economy fared well with an estimated GDP growth of around 6.3 per cent, better than in the past several years. This growth was spread across all sectors and is an indicator of robustness of the India economy. All the major economic indicators were favorable, helping the Indias growth to the second highest position after China. The foreign exchange reserves of the country swelled to US$ 135089 Million at the end of the fiscal year and are still continuing to rise. The Indian rupee appreciated by about 3.08 per cent to the U.S. Dollar in this one year. While this was a matter of concern for exporters, exports in 2004-05 were, nevertheless, higher by 24.40 per cent. Imports grew by 35.50 per cent during 2004-05. Investor confidence in the capital markets revived significantly, with the BSE Sensex remaining over 6,000 at the end of the year. The buoyancy of the primary equity market is expected to continue in fiscal 2005-06 with a number of companies lined up to tap the capital markets. At the same time there are some concerns. Of late, inflation stood at 6.4 per cent. This level of inflation is almost one percentage point higher than the 5.4 per cent inflation experienced in the preceding fiscal year. There are signals that oil prices may rise further. Coal cost has been hiked just recently. The spurt in prices of many agricultural commodities on account of the poor progress of the monsoons and truckers strike in August 2004 also contributed to the increase. Interest rates seem to have bottomed out and the possibility of it increasing cannot be ruled out. Thus, inflation in 2004-05 could be attributed to supply constrains and rise in cost, driven by hardening of prices in international markets. These factors are likely to increase inflation further and have some negative impact on the business environment. This has been a year of overall progress. But India will need several years of such robust performance to mature into a developed economy. Even with these concerns, we believe that all the business indicators are well in place for the economy to achieve an overall GDP growth of about 6.0 per cent in 2005-06. (Source : CMIE Report) The managements views on the Companys performance and outlook are discussed below: A. Agro Commodities Inspite of the poor monsoon, the food grain production for the year 2004-05 is placed at 210.4 million tones, compared to the 213.4 million tones produced in the previous fiscal. It is a matter of great pleasure to inform you that the Company has continued to consolidate its position as one of the leading exporter of agro commodities. For the first time open market procurement of wheat to feed the export market was undertaken. The Company has continued to maintain its leading position as an exporter of wheat from India. Open market procurement was necessitated as government of India stopped releasing wheat from the central pool for export purposes. The Company grew in strength in castor oil exports and the volume during the year was doubled. The Company now handles almost 25% of Castor oil exports from India. The Company has successfully explored and tapped the market of China while retaining its existing customer in Europe, Japan, Thailand & USA. Hps (Groundnut Kernels), Maize, Rice, Groundnut oil, Soyameal and other oilcakes like castor meal, rapeseed meal continue to do well. The Company has enlarged its agri commodity basket by adding industrial salt to its trading portfolio. With a view to effectively manage the risk in agro commodities, the Company has initiated hedging operations in the futures exchanges of India like NCDEX,NBOT etc. In the ensuing year the Company plans to expand its operations in domestic trading to have a sustainable business model.

6 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

B.

Textiles The textile industry is one of the important sectors of the Indian Economy. Your management is of the opinion that Indian Textile Industry is poised for big growth opportunity because of quota free global trade and its inherent strength in value chain. The textile industry witnessed a healthy recovery in 2004-05. The weighted production index recorded growth of 8.9 per cent in 2004-05 as against 1.1 per cent drop in production in Previous Year. The Company continued to be on the growth path both in terms of volume as well as overall revenue while maintaining healthy bottom line and enjoyed a dominant position as a merchant exporter of textile products. The implications of quotas phasing out have been far reaching and the Company is in the process of making adjustments in its business model to meet with new challenges. Thus the focus of the Company firmly remains on trading activities. New avenues of expanding business on trading model are constantly being explored. India as a market is also posing very interesting opportunities and a very serious effort is being made to develop import based business for Indian Market. The Company continues to enjoy good reputation with all its buyers and suppliers. The management is confident of posting good results in the current year also.

C.

Energy & Minerals The performance of the Energy Sector has shown much improved results in the fiscal year 2004-05 over the working of the Previous Year. Coal production rose by 4.4 per cent in the fiscal 2004-05, on top of a 7.2 per cent increase in the Previous Year. Crude oil production was up by 1.8 per cent in 2004-05, after registering an increase of one per cent in the preceding fiscal. During 2004-05, growth in power generation was 5.2 per cent, same as in the preceding financial year. Performance of the Company in the energy sector is as under : Coal and Coke : The increase in import of bulk Coal / Coke has been doubled over the previous period. Despite odds, all commitments of domestic orders were fulfilled. Iron Ore : Procurement of Ore from the mine owners had been difficult during the financial year 2004-05, due to steep increase in ore prices leading to much speculation and withholding of supplies by them, despite which the Company has exported over one million tones of ore and has posted healthy margins. In view of the fluctuation in iron ore prices resulting in constraints in procurement of sufficient iron ore, the Company has made arrangement for dedicated minings. The performance of Iron Ore handling at the Belekeri Port was considerably improved and all supplies to foreign buyers were efficiently executed. Power Trading: The Operations have resulted in a marked improvement and about 800 million units have been traded with improved margins.

D.

Precious Metals The gems and jewellery industry is undergoing substantial structural change. If one were to look into the history of Gem & Jewellery Exports from India especially, of Cut and Polished diamonds, it will be noticed that the exporters were mainly family owned and run proprietary/partnership firms. Eventually, the globalization, has its effect on this trade too. Like other industrial and business ventures, diamond exporters have also moved to corporatization, in view of the ambitious business strategy of the industry players and significant spurt in the volume of trade on the one hand and the attendant need for huge working capital on the other, which proprietary/partnership firms cannot garner from financial institutions. Other reasons for the corporitisation is the ready availability of highly skilled and trained manpower churned out by several institutions in this field. Although a recent entrants to this trade, the Company has been able to carve out niche by its consistent and quality supplies to the ever growing quality conscious buyers from a number of countries. The Company also has to its credit substantial exports of gold jewellery from India.

E.

Petroleum, Oils and Lubricants (POL) POL imports have seen robust growth in fiscal 2004-05. POL imports were up by 41.20 per cent during 2004-05 as against a 16.5 per cent rise witnessed during 2003-04. A large portion of the increase was on account of the surge in crude oil prices in international markets and increase in domestic demand for crude oil. The major users of POL products are industries engaged in generation of power, production of steel, manufacture of fertilizers & solvents etc. Bitumen is used for making roads. Apart from above, we also supply Furnace oil as a fuel to ships. The Company imports these commodities from Middle East countries such as UAE, Bahrain, Iran etc. The Company hopes to build up handsome volumes in the trading of the petroleum products, since we have the necessary infrastructure in place in terms of its competitive procurement from the international markets, leveraging facilities at Mundra Port and established marketing credentials to various users in India.

F.

Petrochemicals and Industrial Products The Company continues to focus trading in a wide range of petrochemicals viz. methanol and has introduced several innovative value added service structures to enhance its profitability.

G.

Fertilizers and Raw Materials During 2004-05, fertiliser production rose by 7.5 percent to 15.3 million tonnes as opposed to a one per cent fall in the previous fiscal. The Company deals in sulphur ammonium nitrate and phosphoric acid. During the year under review, the trading volume of sulphur and ammonium nitrate have witnessed a healthy growth of around 15% over the Previous Year with substantial

Adani Exports Limited


Five Star Export House

margins. Having executed large orders of ammonium nitrate successfully, the Company plans to further build up handsome trading volume of this commodity in the coming year(s) by enlarging the customer base. Infact in the past couple of years, the Company has established its name as one of the formidable players in the field of ammonium nitrate trading. In the field of sulphur trading, the Company hopes to expand the business by roping in institutional buyers and by catering to other regular buyers in the markets of Mumbai, especially the chemical units. The Company intends to make a foray in the field of Rock phosphate trading in the coming year in its efforts to expand the basket of products being handled. Competition/Outlook on opportunities The Company is looking at the future with a lot of optimism and hope. The Companys growing reputation for developing and delivering quality products at competitive prices has enabled it to expand the turnover significantly. Over the last decade, the Company has established and maintained its pioneer position in the global trading industry. But success of any business apart from its own efforts lies in many external factors, which are beyond the control of the Company. The Company is also not an exception to it. The Company would continue to focus on effective risk management practices. Models to identify and manage risks are constantly fine-tuned to ensure profitable growth. The Company has chalked out sector-wise strategy to improve its competitive positioning. The business prospects for the Company in the Agro, Textile, Energy & Minerals, Power, Petroleum, Oil and Lubricants, Precious Metals and Coal & Coke Sectors are expected to be good. The quota free global trade offers a great opportunity to the textile industry to increase its share in the world textile exports, which is less than 1% of the world trade. To share the benefits of expected increase in Indias textile share, the Company will have to meet the international quality standards and that too at very competitive rates. The Company has already taken steps in this regard and new avenues of expanding business on trading model are constantly being explored. The Company will continue to focus on operational improvements, manpower rationalization and cost reduction efforts for improving the margins in global trading of its textile products. Prices of agro commodities are dependent upon a host of uncontrollable factors like good and timely monsoons. Indian economy is also slowly integrating itself with the world market and any changes in the global prices for various reasons have a direct and indirect impact on agro commodities in India. Measures being taken includes forecasting future trends and hedging operations in the futures exchanges of India like NCDEX,NBOT etc to minimize the impact on the profitability of the Company. The Company has maintained its position as major importer of petroleum products in the private sector. The Company plans to trade in Indian Market for all type of petroleum products. In an environment of rapidly escalating competitive challenges, the Company has also plans to implement its global strategy of operating exclusively in Indian operations. It also aims at building up domestic agro trade on a large scale. Risk and Concerns Risk is inherent in any business activity, particularly in global trading industry. As the Company steps up its international operations, and contribution of exports to the total revenue grows larger, the ensuing risk from operating in foreign countries also grows higher. This includes inter-alias political risk, credit risk, litigation risk and currency risk. The Companys exports are principally denominated in US$ and the rupee appreciation versus the US$ is a matter of concern. However this is partially compensated by imports denominated in US$. While the Company manages these exposures through currency hedging, any significant fluctuation in exchange rates may have an adverse effect on its financial condition. Further, the Company has processes in place to identify warning signals at an early stage to hedge itself against potential threats. On the other hand, these processes enable early recognition of opportunities emerging in the business environment. The Company resorts to risk management methodologies to ensure that various business risk are identified well in time, are assessed for their possible impact and are effectively mitigated through control measures. Open risks, if any are adequately covered by Insurance. Internal Control Systems and their adequacy The Company has designed proper and adequate internal control systems to ensure: Proper recording and safeguarding of assets Maintenance of proper accounting records and reliability of financial information Compliance with prevalent statutes, policies, procedures, listing agreements and circulars. That transactions are being accurately recorded and cross-verified and promptly reported. Adherence to applicable accounting standards and policies.

The internal control system provides for well-documented policies, Standard Operating Procedures (SOPs), guidelines, authorizations and approval procedures. The Company has deployed a comprehensive Internal Auditing System, which is commensurate to the size of the business. Competent professionals who are external to the Companys business are conducting regular and detailed internal auditing. The internal audit department conducts periodic audits across all locations and of all functions throughout the year and brings out the non-compliances or deviations of internal control procedures through its audit report. The observations arising out of audit are subject to periodic review and compliance monitoring. The significant observations made in internal audit reports, are reviewed by the Audit Committee of the Board on a regular basis. Moreover, the Company continuously upgrades these systems in line with best international practices. Financial Performance with respect to operational performance The Company has posted yet another year of handsome growth, testifying to the robustness of the Corporate Strategy of pursuing multiple growth drivers.

8 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

The gross turnover was higher by 91.20% at Rs. 13515.84 Crores (Rs. 7069.05 Crores). Profit before tax and exceptional items was higher by 3.55% at Rs. 130.62 Crores (Rs. 126.14 Crores). Net profit after provision for prior year adjustments, income tax stood at Rs. 108.29 Crores (Rs. 124.09 Crores). This could be achieved primarily due to the focus on higher value added commodities, as well as unabated efforts to eliminate operational inefficiencies. It is a matter of pride that the turnover and profitability levels have been growing sharp. The Management considers the all round performance of the Company during the year under review satisfactory. Developments in Human Resources Employee relations: The Industrial Relations climate of the Company has been cordial during the year and is geared towards improving productivity, quality and safety. The management wishes to place on record its acknowledgement and appreciation for the support extended by all the employees of the Company. Employee Strength: As on March 31, 2005, the Company has approx. 350 employees, who have different academic background and diverse work experience to their credit. Human Resources: AEL, being a people-centric performing organization believes that retaining top talent is essential to organizational success and to retain competitive edge. To maintain a stable workforce, the Company has deliberately integrated all aspects of human resources management human resource policies, systems and procedures with the overall corporate objective and framework of the Company with an aim to enhance organizational effectiveness, retaining talent and sustaining the personal motivation levels. These efforts range from rerecruiting interviews to family activities and individualized compensation packages. At AEL, we believe that Employee training and development initiatives can transform organizations with providing extra skills to our employees to not only increase productivity but training leads to higher job satisfaction, which shows up in better corporate performance. Valuable training also includes situational training that provides personnel the skill sets that allow them to make timely, knowledgeable decisions that benefit both the customer and the Company. For career development of our employees, we organize various training programmes and career development workshops on continuous basis. During the year 2004-05, the employees benefited from various training programmes, which covered issues relating to management, technology, safety, health and environment. The Company uses competency mapping and organization need analysis to manage individual potential and organization development. We strongly believe that a highly skilled, motivated and empowered manpower is the key to organization success. Cautionary Note Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual result might differ materially from those either expressed or implied. Important factors that could make a difference to the Companys operations include, among others, economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis, of any subsequent developments, information or events.

Adani Exports Limited


Five Star Export House

ANNEXTURE - V CORPORATE GOVERNANCE REPORT


INTRODUCTION Corporate Governance is a synonym for sound management, transparency and disclosure. Corporate Governance encompasses not only the way in which a Company is managed and deals with its shareholders but also addresses all aspects of its relationship with the society. Good corporate governance helps to achieve excellence to further enhance stakeholders value by focusing on long-term stakeholder value creation without compromising on integrity, social obligations and regulatory compliances. The detailed report on implementation by the Company, of the Corporate Governance Code as incorporated in Clause 49 of the Listing Agreement with the Stock Exchanges, is set out below : A. 1. MANDATORY REQUIREMENTS Companys Philosophy on Corporate Governance OUR CORPORATE GOVERNANCE IS OUR CONSTANT JOURNEY TO ADOPT GLOBALLY RECOGNISED CORPORATE GOVERNANCE PRACTICES TO ACHIEVE ECONOMIC AND SOCIAL GROWTH. The Companys philosophy on the code of Corporate Governance is to ensure: That the Company follows globally recognized corporate governance practices. Fullest commitment of the Management and the Board for the maximization of shareholder value. That the employees of the Company subscribe to the corporate values and apply them in their conduct Transparency and professionalism in all the activities of the organization Implementation of policies and procedures prescribed by the Company to ensure high ethical standards in all its business activities and responsible and responsive management.

The aforesaid principles of Corporate Governance are being followed by the Company over the years. We at Adani Exports Limited believe that the essence of Corporate Governance is to conduct the Companys business and deal with its stakeholders in a clean and transparent manner. Corporate Governance to us means not only compliance with the provisions of Company law, allied acts and listing agreement but also managements responsibility to work with morality, ethics and accountability towards stakeholders for their acts and decisions. The Company aims at fairness, transparency, accountability and responsibility in its functioning with the ultimate objective of realizing and enhancing stakeholders values. The Company continues to make its best endeavors to uphold and nurture these core values in all facets of its operations and aims to increase and sustain its corporate value through growth and innovation. COMPLIANCE WITH CLAUSE 49 OF THE LISTING AGREEMENT The Company is in full compliance with the requirements under Clause 49 of the Listing Agreement with the Stock Exchanges. The statutory auditors have certified that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges and the same is enclosed herewith. SEBI has vide its circular no. SEBI/CFD/DIL/CG/1/2005/29/3 dated March 29, 2005 extended the date for implementation of provisions of revised clause 49 of the listing agreement from 31st March, 2005 to 31st December, 2005. In view of this, provisions of the revised clause 49 of the listing agreement will be implemented before 31st December, 2005. BOARD OF DIRECTORS Composition and Category The Board of Directors provides strategic direction and thrust to the operations of the Company. The Board of Directors of the Company consists of eminent persons with considerable professional expertise and experience of business and global trading industry, finance, international trade, legal, accounting, real estate management and administration etc. As per Clause 49 of the Listing Agreement, at least 50% of the Board shall comprise of non-executive directors. As on 31st March, 2005, in Adani Exports Limited (AEL), 4 out of 7 directors (57.14%) are non-executive directors. Where the Chairman is executive chairman, at least 50% of the Board shall comprise of independent directors. In AEL, all the 4 non-executive directors constituting 57.14% of the total strength of the Board are independent directors. The composition of the Board is in conformity with Clause 49 of the Listing Agreement. Independent Directors are Directors, who apart from receiving Directors remuneration do not have any other material pecuniary relationship or transactions with the Company, its promoters, its management or its subsidiaries, which in the judgement of the Board may affect independence of the judgement of the Directors. None of the Directors on the Board is a member on more than 10 Committees and Chairman of 5 Committees (as specified in clause 49), across all the Companies in which he is a Director.

10 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

The composition of the Board of Directors and also the number of other Board of directors or Board Committees of which he is member/chairman as on 31st March, 2005 are as under: Name of the Director and Business Relationship Shri Gautam S. Adani Executive Chairman Shri Rajesh S. Adani Managing Director Shri Vasant S. Adani Whole-time Director
(Resigned as Whole-time Director w.e.f. 11th May, 2005)

Category of Directorship Executive Director Executive Director Executive Director

No. of other Directorships* (other than AEL) 6 7 5

No. of other Committee Memberships held # Chairman 1 Member 1 4 2

Shri C.R. Shah Dr. A.C. Shah Dr. Pravin P. Shah Shri Jay H. Shah

Independent & Non-Executive Director Independent & Non-Executive Director Independent & Non-Executive Director Independent & Non-Executive Director

7 5 5 3

2 1 -

5 5 1 1

# It relates to Audit Committee, Shareholders Grievances Committee and Remuneration Committee only. * excludes directorships in Indian Private Limited Companies and foreign companies. BOARD PROCEDURES The meetings of the Board of Directors are scheduled well in advance and generally held at the Companys registered office in Ahmedabad. The board meets at least once a quarter to review the quarterly performance and the financial results. The notice convening Board Meeting, Board papers comprising the agenda are circulated to the Directors in advance. Senior Management of the Company is invited to attend the Board meetings and provide clarifications as and when required. Wherever appropriate the Board delegates its authority to Committees of Directors like Management Committee, Investors Grievance Committee, Remuneration Committee and Audit Committee. ATTENDANCE OF EACH DIRECTOR AT THE BOARD MEETINGS AND THE LAST ANNUAL GENERAL MEETING During the financial year ended 31st March, 2005, five Board Meetings were held on 5th May, 2004, 27 th May, 2004, 31 st July, 2004, 30th October, 2004 and 21st January, 2005. Details of attendance of each director at the Board Meeting and Last Annual General Meeting are tabulated hereunder:
Name of the Director and Business Relationship Shri Gautam S. Adani Executive Chairman Shri Rajesh S. Adani Managing Director Shri Vasant S. Adani Whole-time Director (Resigned as Wholetime Director w.e.f. 11th May, 2005) Shri C.R. Shah Dr. A.C. Shah Dr. Pravin P. Shah Shri Jay H. Shah Shri Biswajit Choudhuri @ (nominee of Unit Trust of India) No. of Board Meetings attended during the year 5 5 4 Attendance at the 12 th Annual General Meeting held on 3rd July, 2004 YES YES YES

5 2 2 2 3

YES NO NO NO YES

3.

@ resigned with effect from 24 th January, 2005 Notes on Directors appointment / re-appointment. Shri Rajesh S. Adani was appointed as a Managing Director with effect from 10/6/2000 for a period of 5 years. His present tenure expired on 10/06/2005. The remuneration committee of the Company at its meeting held on 11th May, 2005 and subsequently, the Board at its meeting held on 11th May, 2005 have re-appointed Shri Rajesh S. Adani as Managing Director unanimously for a further period of five years with effect from 10th June, 2005 subject to the approval of the shareholders in General Meeting. Shri Vasant S. Adani and Shri C.R. Shah, Directors of the Company, are retiring at the ensuing Annual General Meeting and are eligible for re-appointment. Details of Shri Rajesh S. Adani, Shri Vasant S. Adani and Shri C.R. Shah are given in the Annexure forming part of the notice calling Annual General Meeting of the Company. Committees of Board A. Audit Committee Broad Terms of Reference The Company had constituted an Audit Committee in the year 2001. The scope of the activities of the Audit Committee is as set out in Clause 49 of the Listing Agreement with the Stock Exchanges read with Section 292A of the Companies Act, 1956. The Audit Committee of the Company, inter-alia, provides assurance to the Board on the adequacy of the internal control systems and financial disclosures. The terms of reference of the Audit Committee broadly are as under: Oversight of the Companys financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. Recommending the appointment and removal of external auditor, fixation of audit fee and also approval for payment for any other services.

11

Adani Exports Limited


Five Star Export House

Reviewing with management the annual financial statements before submissions to the Board. Review of related party transactions Reviewing with the management, external and internal auditors, the adequacy of internal control systems. Reviewing the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. Discussion with internal auditors any significant findings and follow up thereon. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. Discussions with external auditors before the audit commences nature and scope of audit as well as to have postaudit discussion to ascertain any area of concern. Reviewing the Companys financial and risk management policies. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders and creditors. Composition and attendance during the year ended 31 st March, 2005. The Audit Committee comprises of four directors, all of whom are Non-Executive Independent Directors. All these Directors possess knowledge of corporate finance, accounts and Company Law. The committee met four times during the year under review, the meetings were held on 5th May, 2004, 31 st July, 2004, 30 th October, 2004 and 21st January, 2005 and the attendance of members at the meetings was as follows: Sr. No. Name of the Member 1. 2. 3. 4. Shri C.R. Shah Dr. A.C. Shah Dr. P.P. Shah Shri Jay H. Shah Designation Chairman Member Member Member Category I I I I & & & & NED* NED* NED* NED* No. of meetings attended 4 2 2 2

B.

* Independent and Non Executive Director The Statutory and Internal Auditors are also invitees to the Audit Committee Meetings. The Company Secretary acts as the Secretary to the Committee. The Minutes of the Audit Committee Meetings are noted by the Board of Directors at the subsequent Board Meeting. The Chairman of the Committee was present at the Annual General Meeting held on 3rd July, 2004. Remuneration Committee Brief description of terms of reference The Company has constituted remuneration committee in 2001. Broad terms of reference of the remuneration committee include recommendation to the Board, the overall policy on remuneration and other terms of employment of executive and non executive directors of the Company within the overall ceiling fixed by members of the Company. The terms of reference of the Committee is as per the provisions of the Companies Act, 1956 and Clause 49 of the Listing Agreement with stock exchanges. Remuneration policy Payment of remuneration to the Executive Chairman/Managing Director/Whole-time Director is governed by the respective agreements executed between them and the Company. These agreements are approved by the Board and the Shareholders. Their remuneration structure includes salary, HRA, perquisites and allowances, contribution to provident fund and superannuation. The Non-Executive Directors do not draw any remuneration from the Company other than the sitting fee as may be determined by the Board from time to time. A sitting fee of Rs. 5,000/- for attendance at each meeting of the Board, Audit Committee, Shareholders/Investors Grievance Committee and Remuneration Committee is paid to its members (excluding executive directors). Composition and attendance during the year ended 31 st March, 2005. No remuneration committee meetings were held during the year under review.
Sr.No. 1. 2. 3. 4. Name of the Member Dr. P.P. Shah Dr. A.C. Shah Shri C.R. Shah Shri Jay H. Shah Designation Chairman Member Member Member Category I I I I & & & & NED* NED* NED* NED* No. of meetings attended N.A. N.A. N.A. N.A.

* Independent and Non Executive Director Remuneration to Directors In respect of the financial year 2004-2005, the following remuneration and sitting fees were paid/payable to the directors: Non-Executive Directors (Rs. In Lacs)
Name Dr. P.P. Shah Dr. A.C. Shah Shri C.R. Shah Shri Jay H. Shah Shri Biswajit Choudhuri Sitting Fees paid during FY 2004-05 Board Meeting 0.10 0.10 0.25 0.10 0.15 Committee Meeting 0.10 0.20 0.40 0.20 0.20 0.30 0.65 0.30 0.15 TOTAL

The non-executive directors do not have any other pecuniary relationship or transactions with the Company.

12 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

Executive Directors : (Rs. In Lacs) Name Shri Gautam S. Adani Shri Rajesh S. Adani Shri Vasant S. Adani Salary 24.60 14.66 12.15 Perquisites & Allowances 11.05 17.16 13.60 Commission* 66.85 100.29 53.49 Incentive Remuneration NIL NIL NIL Stock Options NIL NIL NIL

C.

* Payable in FY 2005-06 Presently, the Company does not have a scheme for grant of stock options either to the working directors or employees. The attention of the members is invited to the notice of the Annual General Meeting wherein it is proposed to revise the terms of remuneration of Executive Chairman and Managing Director. The Board of Directors take note of the Minutes of the Remuneration Committee Meetings at Board Meetings. Company Secretary Ms. Birva C. Patel acts as Secretary to the Committee. Shareholders/Investors Grievances Committee Terms of Reference : The shareholders/Investors Grievance Committee was formed in June 2001. At the first instance, the Shareholders complaints/ grievances are redressed by the Registrar and Transfer Agent, namely M/s. Pinnacle Shares Registry Pvt. Ltd. The committee overseas the performance of M/s. Pinnacle Shares Registry Pvt. Ltd., the Registrar and Share Transfer Agents of the Company and looks into the investors complaints, if any and tries to redress it expeditiously. The terms of reference of the committee cover the matters specified under Clause 49 of the Listing Agreement with Stock Exchanges. Composition and attendance during the year ended 31 st March, 2005. The committee met four times during the year under review, the meetings were held on 5th May, 2004, 31 st July, 2004, 30 th October, 2004 and 21st January, 2005 and the attendance of members at the meetings was as follows :
Sr. No. Name of the Member 1. 2. 3. 4. Shri C.R. Shah Dr. A.C. Shah Shri Vasant S. Adani Shri Jay H. Shah Designation Chairman Member Member Member Category I & NED* I & NED* Executive Director I & NED* No. of meetings attended 4 2 3 2

* Independent and Non Executive Director The Company Secretary has been designated Compliance Officer. The Board of Directors notes the Minutes of the Shareholders/Investors Grievances Committee Meetings at Board Meetings. During the year, 2 (two) investor complaints were received from the shareholders and none of the complaints was pending on 31st March, 2005. Share Transfer Committee In addition to the above, to expedite the process of share transfer, the Board has delegated the powers of share transfers to a committee comprising of Shri Gautam Adani, Executive Chairman, Shri Rajesh S. Adani, Managing Director, Shri Vasant S. Adani, Whole-time Director. The Committee deals with matters relating to transfers/transmission/transposition/ non-receipt of declared dividend/ consolidation/split of folios/issue of share certificates in exchange for sub-divided/consolidated/defaced share certificates/ issue of duplicate share certificates etc. The Share Transfer Committee meetings are held at least once in a fortnight. The Board of Directors notes the Minutes of the Share Transfer Committee at Board Meetings. All valid share transfers during the year ended 31.03.2005 have been acted upon. No share transfer was pending as on 31.03.2005. Investor Services As you are aware, your Company has already appointed M/s Pinnacle Share Registry Pvt. Ltd. as Registrar & Share Transfer Agent, who have adequate infrastructure and VSAT connectivity with both the depositories, which facilitate better and faster service to the investors. Other facilities such as remittance of dividend, bank mandate, incorporation of bank details on dividend warrants, revalidation of dividend warrants, issue of duplicate share certificates etc. are also extended to the Shareholders. a) Name and Address of Compliance Officer is as follows Ms. Birva C. Patel Company Secretary and Compliance Officer Adani Exports Ltd. Adani House, Near Mithakhali Six Roads, Navarangpura, Ahmedabad - 380 009 Tel No. (079) 25555 555, 26565 555, 25555 365(DID), Fax No. (079) 26565 500, 25555 500 b) Exchange of Shares of Rs. 10 with shares of Re. 1 After the sub-division of the Companys shares of Rs. 10 each into shares of Re. 1 each, during the year 2003-2004, the Company sent circulars to all the shareholders holding Rs. 10 shares in physical form to exchange these for Re. 1 share certificates. Although a large number of such shareholders have done the exchange, there are still many who have not. They are requested to forward their old share certificates of the shares of Rs. 10 each (which are no longer tradable) at the Company s address above or directly to the Companys Registrar and Share Transfer Agents M/s. Pinnacle Shares Registry Pvt. Ltd. along with a request letter signed by all holders.

13

Adani Exports Limited


Five Star Export House

4.

General Body Meetings Location and time, where last three Annual General Meetings were held is given below : Financial Year Date Location of Meeting Lions Hall, Near Mithakhali Six Roads, Ellisbridge, Ahmedabad 380006. Hotel President, Off. C.G. Road,Opp. Municipal Market, Navrangpura, Ahmedabad 380 009. Fortune Hotel Landmark, Usmanpura, Ashram Road, Ahmedabad 380 013 Time No. of Special resolutions passed 2 1 2

2001-2002 30th September, 2002 2002-2003 27th September, 2003 2003-2004 3rd July, 2004

11.00 a.m. 11.00 a.m. 11.00 a.m.

No Special Resolution was put through postal ballot at the last AGM nor is any proposed for this year. 5. Dividend History (Equity Shares) Year 1996-97* 1997-98 1998-99 1999-00* 2000-01 2001-02 2002-03 2003-04 2004-05 (proposed) * Bonus issue in proportion of 1 : 1 Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 40.00% 40.00% Per Share (Rs.) 3 3 3 3 3 3 3 4 0.40 Amount (Rs. in lacs)# 222.44 330.71 330.71 415.60 661.42 661.42 661.42 881.89 902.16

# Excluding dividend tax

6.

7.

8.

Disclosures a) Disclosure on materially significant related party transactions : No transactions of material nature has been entered into by the Company with its promoters, the Directors or the Management, their subsidiaries or relatives etc. that may have potential conflict with the interests of the Company at large. Transactions with related parties are disclosed in notes to the accounts in this Annual Report. b) Details of non-compliance by the Company The Company has complied with the requirements of the Stock Exchanges, SEBI and Statutory Authorities on all matters related to the capital markets during the last three years. No penalties or strictures were imposed by SEBI, Stock Exchanges or any statutory authorities on matters relating to capital markets during the last three years. Means of Communication a) Quarterly, Half-yearly and Annual Results The Board of Directors of the Company approves and takes on record quarterly, half yearly and yearly financial results in the proforma prescribed by Clause 41 of the Listing Agreement within one month of close of the reporting period. In compliance with Clause 41 of the Listing Agreement, the Company sends the quarterly / half-yearly / audited results to the Stock Exchanges within 15 minutes of the end of the Board Meetings at which they are taken on record. First quarterly results of the Company were published in the Loksatta Jansatta (G) and Business Standard (E), second quarterly results of the Company were published in the Business Standard (E) and Loksatta Jansatta (G), third quarterly results of the Company were published in Business Standard (E) and Loksatta Jansatta (G) news papers. Audited results for the year ended on 31st March, 2005 were published in Business Standard (E) & Loksatta Jansatta (G). b) Pursuant to Clause 51 of the Listing Agreement, all data related to quarterly financial results, share holding pattern etc. are hosted on the on the SEBI EDIFAR website www.sebi.gov.in within the time prescribed in this regard. c) No formal presentations were made to the institutional investors and analysts during the year under review. d) The Companys financial results and official news releases are displayed on the Companys website www.adanigroup.com. e) As the Companys quarterly/half-yearly/annual financial results are published in press and also posted on its website, the same are not mailed to the shareholders. f) Management Discussion and Analysis Report is attached with the Directors Report in this Annual Report. General Shareholder Information A. 13th Annual General Meeting Date Time Venue 12 th August,2005 11.00 a.m. Hotel Le meridian, Khanpur, Ahmedabad - 380 001. 14 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

B.

Financial Calendar (April March) : (tentative and subject to change) Period For the first quarter ending 30 th June, 2005. For the second quarter and half year ending 30th September, 2005 For the third quarter ending 31st December, 2005 For the year ending 31 st March, 2006 Limited Review by the Auditors

: : : :

Approval of Quarterly results 4 th Week of July, 2005. 4th Week of October, 2005 4 th Week of January, 2006 Audited Results are declared in June, 2006 as permitted in listing agreement. : August end, 2005 November end, 2005 February end, 2006

C. D. E.

Date of Book Closure : 9 th August, 2005 to 11th August, 2005 (both days inclusive) Dividend Payment Date : On or before 17 th August, 2005. Listing on Stock Exchanges : (a) The Equity Shares of the Company are listed on the following Exchanges : Ahmedabad Stock Exchange (ASE) Kamdhenu Complex, Opp. Sahajanand College, Panjrapole,Ahmedabad 380 015 National Stock Exchange of India Limited (NSE) Exchange Plaza, Bandra-Kurla Complex, Bandra (E), Mumbai 400 051. The Stock Exchange, Mumbai (BSE) P. J. Towers, Dalal Street,Fort, Mumbai - 400 001

F.

G.

Listing fee for the year 2005-2006 has been paid to the above Stock Exchanges. Depositories : 1. National Securities Depository Ltd. Trade World, 4th Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel,Mumbai 400 013. 2. Central Depository Services (India) Limited Phiroze Jeejeebhoy Towers, 28 th Floor, Dalal Street, Mumbai 400 023. Annual Issuer charges for the year 2005-2006 have been paid to the above depositories. Stock Code : 1. The Stock Exchange, Mumbai (BSE) : 512599 2. National Stock Exchange (NSE) : ADANIEXPO 3. Ahmedabad Stock Exchange (ASE) : 01378 Market Price Data : High, Low during each month in financial year 2004-05. Monthly share price movement during the year 2004-05 at BSE & NSE : (b) Month High April May June July August September October November December January February March 453.70 494.00 511.10 756.00 70.75 66.91 62.86 66.00 85.66 79.00 82.00 78.91 BSE Low 399.70 350.00 473.60 481.10 53.30 58.00 59.50 52.50 60.00 70.00 70.00 58.75 Volume 1188055 1452833 1704400 3374730 11768787 11695785 10858815 10407820 16577194 9992296 10766214 11421566 High 455.00 509.00 515.00 755.00 71.50 67.00 62.40 67.95 85.45 79.00 81.95 79.30 NSE Low 401.00 350.00 460.00 462.00 60.55 59.25 55.15 58.10 60.10 70.00 70.10 58.50 Volume 1207898 1308015 1718074 2345536 10313905 9866461 9464633 9065079 17171213 8550799 9443513 10874309

H.

* The figures have been adjusted from Rs. 10 to Re. 1 for split w.e.f. August 7, 2004. Performance in comparison to broad-based indices such as BSE Sensex.

15

Adani Exports Limited


Five Star Export House

Performance in comparison to broad-based indices such as NSE Nifty

MONTHS

I.

J.

K.

L.

Registrar and Transfer Agents : M/s. Pinnacle Share Registry Private Limited are the Registrar and Transfer Agents of the Company for both Physical and Demat Shares and their address is given below: Regd. Office : Contact Person : M/s. Pinnacle Share Registry Private Ltd. Mr. Gautam Shah, Unit : Adani Exports Limited General Manager Near Asoka Mills Ltd., Naroda Road, Ahmedabad - 380 025. Tel: +91-79-22200582, 22200338. Fax : +91-79-22202963. E-mail : gautam.shah@psrpl.com Transfer to Investor Education and Protection Fund (IEPF) In terms of Section 205C of the Companies Act, 1956, an amount of Rs. 31,886.50/- being unclaimed dividend of the Company declared in the AGM held on 30th August, 1997 was transferred during the year to the IEPF established by the Central Government. Share Transfer System : To expedite the process of share transfers, the Board has delegated powers of share transfers to a Committee comprising of Mr. Gautam S. Adani, Mr. Rajesh S. Adani and Mr. Vasant S. Adani, Executive Directors of the Company. The share transfer committee attends to the share transfer formalities at least once in a fortnight. The business transacted at the Share Transfer Committee meetings is placed before the Board regularly. Grievances received from investors and other miscellaneous correspondence on change of address, mandates etc. are processed by the Registrars within 30 days. Requests for dematerialisation of shares were processed and confirmation was given to the respective depositories i.e. NSDL and CDSL within 15 days of receipt. All valid share transfers during the year ended 31.03.2005 have been acted upon. Pursuant to Clause 47 (c) of the Listing Agreement with the stock exchanges, certificates, on half yearly basis, have been issued by a Company Secretary-in-Practice for due compliance of share transfer formalities by the Company. Pursuant to SEBI (Depositories and Participants) Regulations, 1996, certificates have also been received from a Company Secretary-in Practice for timely dematerialization of the shares of the Company and for conducting secretarial audit on a quarterly basis for reconciliation of the share capital of the Company. Dematerialisation of Shares and Liquidity : The Companys shares are compulsorily traded in dematerialized form and are available for trading on both the Depositories in India National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). As on 31st March, 2005, 10,394 shareholders are holding shares in demat form and 22,25,57,995 Equity Shares of the Company representing 98.68% of the Companys share capital have been dematerialized. The Companys shares are regularly traded on The Stock Exchange (BSE), Mumbai and The National Stock Exchange (NSE), Mumbai, as is seen from the volume of shares indicated in the Table containing market information. Under the Depository System, the International Securities Identification Number (ISIN) allotted to the Companys shares is INE 423A01024 Distribution of Shareholding as on March 31, 2005. Number of shares category 1 to 5000 5001 to 10000 10001 to 20000 20001 to 30000 30001 to 40000 40001 to 50000 50001 to 100000 100001 and above In transit in NSDL system TOTAL Number of shareholders Holders % 10332 169 95 27 14 7 22 80 2 10748 % of Total 96.13 1.57 0.88 0.25 0.13 0.07 0.21 0.74 0.02 100 Equity Shares held in each category Total Shares 6160768 1265853 1425549 667075 503228 321832 1483381 212171756 1540242 225539684 % of Total 2.73 0.56 0.63 0.30 0.22 0.14 0.66 94.07 0.68 100.00 16 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

M.

Shareholding Pattern as on 31st March, 2005 :

N.

O. P.

B.

Outstanding GDRs/ADRs/Warrants or any convertible instruments conversion date and likely impact on equity. On 24th September, 2004, in order to meet the long term fund requirements, the Company had issued 3800 - 1% Foreign Currency Convertible Bonds (FCCBs) of USD 10,000 each. Out of 3800 FCCBs issued, outstanding number of FCCBs as on March 31, 2005 is 3060. These outstanding FCCBs can be converted into 20947301 Equity Shares of the Company during any time during the conversion period from November 8, 2004 to September 23, 2009 at the option of FCCB holders. The shares to be issued upon conversion of FCCBs shall rank pari passu with the existing equity shares of the Company in all respects. Plant Locations : The Company is a Five Star Export House engaged in export/import of goods and is having no plants. Address for correspondence : The shareholders may address their communications / suggestions / grievances /queries to : Ms. Birva C. Patel Company Secretary and Compliance Officer Adani Exports Ltd. Adani House, Near Mithakhali Six Roads, Navarangpura, Ahmedabad 380 009 Tel No. (079) 25555 555, 26565 555, 25555 365(DID). Fax No. (079) 26565 500, 25555 500. Email address : birva@adanigroup.com NON-MANDATORY REQUIREMENTS A) CHAIRMAN OF THE BOARD The Company has an Executive Chairman and hence, the requirement pertaining to reimbursement of expenses to a nonexecutive Chairman does not arise. B) REMUNERATION COMMITTEE A remuneration committee comprising all non-executive and independent directors is functioning since 2001. C) SHAREHOLDER RIGHTS The financial performance of the Company is well publicised and also displayed on the Companys website. In view of this, individual communication of quarterly/half yearly results is not sent to the shareholders. D) POSTAL BALLOT The provisions relating to Postal Ballot will be complied with in respect of matters where applicable.

AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE


The Members, The Adani Exports Limited We have examined the compliance of conditions of Corporate Governance by Adani Exports Limited, for the year ended on March 31, 2005, as stipulated in clause 49 of the Listing Agreement of the said Company with the Stock Exchange(s). The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination has been limited to a review of the procedures and implementations thereof, adopted by the Company for ensuring the compliance with the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, and the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in clause 49 of the above mentioned Listing Agreement. We state that no investor grievance is pending for a period exceeding one month against the Company as per the records maintained by the Share Registrars and reviewed by the Shareholders/Investors Grievance Committee. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company. For DHARMESH PARIKH & CO. Chartered Accountants PLACE : Ahmedabad DATE : 11 th May, 2005 17 (D. A. PARIKH) Proprietor

Adani Exports Limited


Five Star Export House

AUDITORS REPORT
To The Members of ADANI EXPORTS LIMITED We have audited the attached Balance Sheet of ADANI EXPORTS LIMITED as at 31st March, 2005 and also the Profit and Loss Account for the year ended on that date annexed thereto and the Cash Flow statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion. 1. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of subsection (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order. Further to our comments in the annexure referred to above, we report that: i) ii) iii) iv) v) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit; In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; The Balance Sheet, Profit & Loss Account and Cash-flow statement dealt with by this report are in agreement with the books of account. In our opinion, the Balance Sheet, Profit & Loss account and Cash Flow Statement dealt with this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; On the basis of written representations received from the directors, as on 31 st March, 2005, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2005 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and other notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: a) b) c) in the case of the Balance Sheet, of the State of affairs of the Company as at 31st March, 2005; in the case of Profit & Loss account, of the Profit for the year ended on that date; and in the case of cash flow statement, of the cash flows for the year ended on that date. For DHARMESH PARIKH & CO. Chartered Accountants Place : Ahmedabad Date : 11th May, 2005 D. A. PARIKH Proprietor (Membership No. 45501)

2.

vi)

18 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

ANNEXURE TO THE AUDITORS REPORT RE : ADANI EXPORTS LIMITED


(Referred to in Paragraph 1 of our Report of even date.) (i) (a) (b) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. The same are in the process of being updated; As explained to us, fixed assets, according to the practice of the Company, are physically verified by the management at reasonable intervals, in a phased verification-programme, which, in our opinion, is reasonable, looking to the size of the Company and the nature of its business. No material discrepancies were noticed on such verification. As the Company has disposed off an insignificant part of the fixed assets during the year, paragraph 4(i)(c) of the Companies (Auditors Report) Order, 2003 (hereinafter referred to as the Order) is not applicable. During the year, the inventories have been physically verified by the management, except for stocks lying with outside parties, which have, however, been confirmed by them. In our opinion, the frequency of verification is reasonable. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. On the basis of our examination of the record of inventories, we are of the opinion that, the Company is maintaining proper records of inventories. The discrepancies noticed on physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account. According to the information and explanation given to us, the Company had granted loan to five companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 8.52 Crores and the year end balance of loans granted to such parties was Rs. 1.23 Crores. The Company has not granted loans to firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956. In our opinion, the rate of interest and other terms and conditions on which loans have been granted to companies listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company. The parties have repaid the principal amounts as stipulated and have been regular in the payment of interest. There is no overdue amount of loans granted to Companies listed in the register maintained under section 301 of the Companies Act, 1956. Consequently, requirement of clause (iii.d) of paragraph 4 of the Order is not applicable. According to the information and explanation given to us, the Company had taken loan from a Company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 0.22 Crore and the year end balance of loans taken from such party was Rs. 0.22 Crore. The Company has not taken loans from firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956. In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company. The Company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

(c) (ii) (a) (b)

(c)

(iii)

(a)

(b)

(c) (d) (e)

(f)

(g) (iv)

According to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of the contracts or arrangements that need to be entered into the register maintained under section 301 have been so entered. In respect of transactions made in pursuance of such contracts or arrangements have been entered into during the financial year are reasonable except in some of the transactions, for which no comments is being made owing to the unique and specialized nature of the items involved and absence of any comparable prices. For price justification reliance is placed on the information and explanation given by the management.

(v)

(b)

(vi)

The Company has not accepted deposits from the public within the meaning of section 58A of the Companies Act, 1956 and the Rules framed thereunder. We are informed that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

(vii) The Company has an internal audit system, which in our opinion is commensurate with its size and the nature of its business. (viii) The maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 is not applicable to the Company. (ix) (a) As explained to us, the statutory dues payable by the Company comprise of provident fund, investors education protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess, octroi, entry tax, purchase tax, Municipal tax and other applicable statutory dues. According to the records of the Company, the Company is regular in depositing undisputed statutory dues with the appropriate authorities. There are no undisputed statutory dues as referred to above as at March 31, 2005 outstanding for a period of more than six months from due date they become payable. According to the records of the Company and representation made by the Management, the following are the disputed amounts in respect of various statutes:

(b)

19

Adani Exports Limited


Five Star Export House

Name of Statute Income Tax Act, 1961 Central Sales Tax Act, 1956 Gujarat Sales Tax Act, 1969 Central Sales Tax Act, 1956 West Bengal Sales Tax Act. Customs Act, 1962 Customs Act, 1962 Customs Act, 1962 Customs Act, 1962 Customs Act, 1962 (x) (xi) (xii) (xiii) (xiv)

Nature of the dues Additions made in regular assessments Sales against sales declaration forms Sales against sales declaration forms Sales against sales declaration forms Sales Tax liability Valuation of various products Valuation of Pertroleum, Chemicals, Oil & Lubricants. Valuation of coal Valuation of Pertroleum, Oil & Lubricants. Penalty

Amount (Rs. in Crores) 9.33 0.07 0.03 0.92 0.18 Amount Unascertainable 2.37 0.92 0.81 0.04

Forum where dispute is pending Commissioner of Income Tax, Appeals Dy. Commissioner of sales tax, Gujarat Dy. Commissioner of sales tax, Gujarat Delhi Tribunal West Bengal Commercial Tax Department With various appellate authorities Commissioner of customs Assistant commissioner of customs Special Valuation Bench Commissioner of Custom

The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current and immediately preceding financial year. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank and debenture holders. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly clause (xii) of paragraph 4 of the Companies (Auditors Report) Order, 2003 is not applicable. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. In respect of dealing in securities and other investments, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The Company in its own name except has held the securities and other investments to the extent of the exemption granted under section 49 of the Act. In respect of guarantees given by the Company for loans taken by others from banks, the terms and conditions are prima facie not prejudicial to the interest of the Company. In our opinion, the term loans raised during the year have been applied for the purpose for which they were raised. According to the Cash-flow statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have not, prima facie, been used during the year for long term investment except permanent working capital. The Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained under section 301 of the Companies Act. Accordingly paragraph 4(xviii) of the Order is not applicable. As the Company does not have any debenture outstanding at the year end, paragraph 4(xix) of the Order is not applicable. During the year, since the Company has not raised money by way of public issue, paragraph 4(xx) of the Order is not applicable. Based upon the audit procedures performed and information and explanations given by the management, we report that, no fraud on or by the Company has been noticed or reported during the course of our audit for the year ended 31 st March, 2005. For DHARMESH PARIKH & CO. Chartered Accountants

(xv) (xvi) (xvii)

(xviii) (xix) (xx) (xxi)

Place : Ahmedabad Date : 11th May, 2005

D. A. PARIKH Proprietor (Membership No. 45501)

20 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

BALANCE SHEET AS AT 31ST MARCH, 2005


(Rs. in Crores) PARTICULARS A SOURCES OF FUNDS : I. SHAREHOLDERS FUND (A) Share capital (B) Reserves & surplus II. LOAN FUNDS : (A) Secured loans (B) Unsecured loans DEFERRED TAX LIABILITY Deferred Tax Liability Less : Deferred Tax Assets SCHEDULE AS AT 31-03-2005 AS AT 31-03-2004

1 2

22.55 654.72 677.27

32.05 591.67 623.72 265.26 86.24 839.33 351.50 4.27 1.47 6.36 2.80 978.02

3 4

382.73 456.60

III.

7.84 1.47

TOTAL B APPLICATION OF FUNDS : I FIXED ASSETS (A) Gross block (B) Less : Depreciation (C) Net block (D) Capital work-in-progress 5 61.37 11.66 49.71 6.45

1,522.96

43.41 9.80 33.61 2.40 56.17 36.01 69.38 219.47 1,142.77 199.63 214.78 1,776.65

II III.

INVESTMENTS CURRENT ASSETS, LOANS & ADVANCES (A) Inventories (B) Receivables (C) Cash & bank balances (D) Loans & advances

6 7 8 9 10 323.10 2,140.37 479.38 330.36 3,273.21

46.67

LESS :CURRENT LIABILITIES & PROVISIONS (A) Current liabilities (B) Provisions

11 12

1,818.93 37.00 1,855.93

887.26 17.68 904.94 1,417.28 871.71 0.92 978.02

NET CURRENT ASSETS IV. MISCELLANEOUS EXPENDITURE TOTAL Notes forming part of the accounts As per our attached report of even date For DHARMESH PARIKH & CO., Chartered Accountants D.A. PARIKH Proprietor PLACE : Ahmedabad DATE : 11 th May, 2005 21 BIRVA C. PATEL Company Secretary 20 13

2.84 1,522.96

For and on behalf of the Board GAUTAM S. ADANI Chairman RAJESH S. ADANI Managing Director PLACE : Ahmedabad DATE : 11 th May, 2005

Adani Exports Limited


Five Star Export House

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2005
(Rs. in Crores) PARTICULARS A INCOME : Sales & Operating earnings Other income SCHEDULE 14 15 2004-05 13,515.84 3.03 13,518.87 B EXPENDITURE : Cost of materials Personnel expenses Operation & other expenses Finance Charges Depreciation Misc.expenditure written off 16 17 18 19 12,894.60 11.97 427.82 52.15 2.11 0.95 13,389.60 Profit for the year before Prior Period Adjustments Add / (Less) : Prior period adjustment - Excess / short provision written back Profit for the year before taxation Provision for taxation: - Current Tax [(Including Wealth tax of Rs. 0.17 Crores (P.Y. Rs. 0.03 Crores) and excess provision (net) of earlier year Rs. 4.40 Crores (P.Y. 2.32 Crores)] - Deferred Tax Profit after taxation Add : Surplus brought forward from Previous Year Profit available for appropriation APPROPRIATIONS : Interim dividend on Preference Shares Dividend on Preference Shares Proposed Dividend on Equity Shares Tax on Dividend (including surcharge) Transfer to general reserve Balance carried to balance sheet 129.27 (0.12) 1.47 130.62 18.77 2003-04 7,069.05 76.98 7,146.03 6,661.67 7.99 295.68 53.52 1.79 0.23 7,020.89 125.15 (0.06) 1.05 126.14 2.10

3.56 108.29 239.38 347.67

(0.05) 124.09 186.37 310.46

0.19 9.02 1.29 80.00 257.16 347.67

0.99 0.01 8.82 1.26 60.00 239.38 310.46

Earning per Share of Rs. 1/- each - Basic - Diluted Notes forming part of the accounts As per our attached report of even date For DHARMESH PARIKH & CO., Chartered Accountants D.A. PARIKH Proprietor PLACE : Ahmedabad DATE : 11th May, 2005 BIRVA C. PATEL Company Secretary 20

4.89 4.87

5.58 5.58

For and on behalf of the Board GAUTAM S. ADANI Chairman RAJESH S. ADANI Managing Director PLACE : Ahmedabad DATE : 11 th May, 2005 22 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

SCHEDULES 1 TO 13 FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2005


(Rs. in Crores) PARTICULARS SCHEDULE : 1 SHARE CAPITAL AUTHORISED 50,00,00,000 5,00,00,000 AS AT 31-03-2005 AS AT 31-03-2004

(Previous Year 5,00,00,000) Equity Shares of Re. 1/(Previous Year Rs 10/-) each (Previous Year 5,00,00,000) Preference Shares of Rs. 10/- each

50.00 50.00 100.00

50.00 50.00 100.00 22.05 10.00 32.05

ISSUED, SUBSCRIBED & PAID-UP 22,55,39,684 (Previous Year 2,20,47,400) Equity Shares of Re. 1/(Previous Year Rs. 10/-) each NIL (Previous Year 1,00,00,000) 9.9% Cumulative Redeemable Preference Shares - Series VII of Rs. 10/- each) NOTES : (a) The face value of the equity shares have been reduced from Rs.10/- to Re.1/(b) Of the above Equity Shares (i) 50,65,684 (Previous Year NIL) Equity shares of Re. 1/- each were allotted as fully paid up at premium on conversion of foreign currency convertible bonds. (ii) 50,00,000 (Previous Year 5,00,000) Equity Shares of Re. 1/- (Previous Year Rs. 10/-) each were allotted as fully paid up at premium without payment being received in cash. (iii) 50,00,000 (Previous Year 5,00,000) Equity Shares of Re.1/- (Previous Year Rs.10/-) each were issued as Bonus Shares by capitalization of profit. (iv) 16,53,55,000 (Previous Year 1,65,35,500) Equity Shares of Re. 1/- (Previous Year Rs. 10/-) each were issued as Bonus shares by capitalization of share premium. (c) Preference Shares were redeemed in June 2004. SCHEDULE : 2 RESERVES & SURPLUS 1 GENERAL RESERVE As per last balance sheet ADD :- Transferred during the year from Profit & Loss Account80.00 ADD :- Preference Share Redemption Reserve written back 10.00 ADD :- Debenture Redemption Reserve written back ADD :- Reserve under section 33AC under IT Act written back LESS :- Transferred to Profit & Loss Account in respect of :- bad-debts (see note no.B 9) 2 PREFERENCE SHARE REDEMPTION RESERVE As per last balance sheet LESS :- Transfer to General Reserve DEBENTURE REDEMPTION RESERVE As per last balance sheet LESS :- Transfer to General Reserve SHARE PREMIUM ACCOUNT As per last balance sheet ADD :- Amount received on conversion of Foreign Currency Convertible Bonds RESERVE UNDER SECTION 33AC OF INCOME-TAX ACT, 1961 : As per last balance sheet LESS :- Transferred to General Reserve SURPLUS IN PROFIT & LOSS ACCOUNT

22.55 22.55

327.66 60.00 5.00 7.50 68.16 354.50 10.00 10.00 -

275.13 25.00 39.97 327.66 10.00 10.00 30.00 25.00 5.00 9.63 33.43 43.06 9.63 7.50 7.50 257.16 654.72 239.38 591.67

5.00 5.00

9.63

23

Adani Exports Limited


Five Star Export House

(Rs. in Crores) PARTICULARS SCHEDULE : 3 SECURED LOANS 1 From banks - term loans a) Foreign Currency Loan (ECB) (Note - I) b) Rupee loan (Note II & III) 2 From banks - Working Capital (Note II & III) a) Foreign Currency b) Rupee 3 Non convertible debentures (Note - IV) 4 Vehicle Loans (Note - V) 5 Home Loans 6 Interest accrued and due AS AT 31-03-2005 AS AT 31-03-2004

9.55 184.09 71.60 114.37 1.18 1.94 382.73

22.23 189.08 36.92 11.41 5.00 0.60 0.02 265.26

NOTES : I Above facilities are secured by Second Charge : a) Hypothecation over whole of the current assets of the Company by way of second charge. b) Equitable Mortgage over certain immovable properties belonging to the Company by way of second charge. c) Equitable Mortgage over certain immovable properties belonging to Adani Properties Pvt. Ltd. by way of second charge. d) Guaranteed by some of the Directors and their relatives in their personal capacity. e) Pledge of equity shares of some of the promoters and their relatives. f) Rs. 6.00 Crores secured by above covered under item 1 b) [P.Y.Rs. 12 Crores] II Above facilities are secured by : a) Hypothecation of the stocks and book debts by way of first charge ranking pari-passu among the banks. b) Tangible movable properties ranking pari-passu among the banks. c) Guaranteed by some of the Directors in their personal capacity. d) Pledge of 1,00,00,000 equity shares of Gujarat Adani Port Ltd. @ of Rs. 80/each for present outstanding of Rs. 153.00 Crores [P.Y. Rs. 156.93 Crores] e) Kindly refer Note I f) above. III Further secured by creation of Equitable Mortgage : a) Over certain immovable properties belonging to the Company. b) Over certain immovable properties belonging to Adani Properties Pvt. Ltd. IV a) 15,00,000 privately placed 14.50% secured redeemable non convertible debentures of Rs. 100/- each allotted w.e.f. 29th December 1999, were redeemable at par in three equal annual installments on 29th December 2002, 29th December 2003 & 29th December 2004 respectively, which were redeemed on respective due dates. b) The above debentures were secured by pledge of shares of some of the Promoters and their relatives and by way of mortgage and exclusive charges on some immovable properties of the Company. V Vehicles loans are secured by hypothecation of respective vehicles. SCHEDULE : 4 UNSECURED LOANS Foreign Currency Convertible Bonds (Note - I) Inter Corporate Loans Loans from Banks / Financial Institutions (Note - II) 133.86 27.72 295.02 456.60 NOTE :I) In the case of FCCB, the bondholders have an option of conversion into Equity Shares at the rate of Rs.67/- per share at any time after November 8, 2004 and upto October 23, 2009. Further, the Company has an option of redemption of these bonds at any time on or after October 24, 2007, subject to certain conditions. II) Above loans from Banks/Financial Institutions are secured by Demand Promissory Note and/or Pledge of shares of some of the Promoters and their relatives and/or guaranteed by some of the Directors in their personal capacity. 24 2004Annual Report 2004 -05 26.65 59.59 86.24

Adani Exports Limited


Five Star Export House

SHEDULE : 5 FIXED ASSETS :


Sr. PARTICULARS No. As at 1/4/2004 5.82 17.60 0.91 5.87 1.05 3.54 2.64 5.98 43.41 43.39 GROSS BLOCK Additions Deductions during the during the year year 1.05 0.25 0.50 0.01 0.10 0.61 0.11 0.40 0.04 1.43 0.49 14.26 18.60 0.65 2.41 2.39 As at 31/3/2005 5.82 18.65 1.16 6.36 1.15 4.04 3.00 6.92 14.26 61.36 43.41 As at 1/4/2004 1.78 0.28 2.34 0.32 0.94 1.94 2.19 9.79 9.24 DEPRECIATION Provided Deductions for the during the year year 0.32 0.05 0.37 0.07 0.19 0.04 0.28 0.03 0.59 0.17 0.24 2.11 0.24 1.79 1.23

(Rs. In Crores)
NET BLOCK As at As at As at 31/3/2005 31/3/2005 31/3/2004 2.10 0.33 2.71 0.39 1.08 2.19 2.61 0.24 11.65 9.80 5.82 16.55 0.83 3.65 0.76 2.96 0.81 4.31 14.02 49.71 33.61 5.82 15.82 0.63 3.53 0.73 2.60 0.70 3.78 33.61 -

1 2 3 4 5 6 7 8 9

Land Building Plant & Machinery Furniture & Fixtures Electrical Fittings Office Equipments Computer Equipment Vehicles Air-craft Total Previous Year

(Rs. in Crores) PARTICULARS SCHEDULE : 6 INVESTMENTS - NON-TRADE : LONG-TERM INVESTMENTS GOVERNMENT SECURITIES (UNQUOTED) (Lodged with Government departments) - in 6 year National Saving Certificates - in Kisan Vikas Patra (Rs. 500/-) INVESTMENT IN SUBSIDIARY COMPANIES (UNQUOTED) 1) 64,000 (64,000) fully paid up Equity Shares of Adani Global Ltd. of $ 100/- each 2) 25590 (32,790) fully paid up 10% Redeemable Preference shares of Adani Global Ltd. of $ 100/- each. OTHERS (UNQUOTED) 1) 2) 3) 4) 5) 6) NIL (1,28,83,950) Equity Shares of Adani Wilmar Ltd. of Rs. 10/- each 10 (10) Equity Shares of Coffee Futures Exchange Board India Ltd. of Rs. 10,000/- each 5 (5) Bond of UCO Bank of Rs. 5,00,000/- each. 2,600 (2,600) Equity Shares of Adani Petronet (Dahej) Port Pvt. Ltd. of Rs. 10/- each. 20,000 (20,000) Equity Shares of Kalupur Commercial Co-op. Bank of Rs. 25/- each 24,750 (NIL) Equity Shares of Adani Logistics Ltd. of Rs. 10/- each. 0.01 0.25 0.05 0.02 12.88 0.01 0.25 0.05 AS AT 31-03-2005 AS AT 31-03-2004

0.02 30.90 10.38

0.02 30.90 13.27

OTHERS (QUOTED) 943 (NIL) Equity Shares of Punjab National Bank of Rs 10/- each SHORT TERM INVESTMENTS 1) 2) 3) 4) Kotak K Liquid IP NIL( 2361330.846) units of Kotak Mahindra K Liquid IP of Rs.10/- each NIL (2000000) units of Reliance Liquid Fund of Rs.10/- each 1853087.243 (6757474.249) units of UTI Mutual Liquid Fund of Rs.10/- each 2725290.698 (NIL) J M High Liquidity Fund of Rs. 10/- each 2.00 3.00 46.67 Aggregate Book Value - Quoted - Unquoted Aggregate Market Value - Quoted 0.04 46.63 0.04 3.00 2.00 7.00 69.38 69.38 0.04 -

25

Adani Exports Limited


Five Star Export House

PURCHASED AND SOLD DURING THE YEAR PARTICULARS 1 2 3 4 5 6 7 8 9 10 11 12 13 RLF - TREASURY PLAN - RETAIL OPTION - GROWTH OPTION - GROWTH PLAN TEMPLELTON INDIA - TREASURY MANAGEMENT PLAN ACCOUNT - REGULAR PLAN SBI - MAGNUM - INSTITUTIONAL INCOME PLAN SBI - MAGNUM INSTA CASH FUND - CASH OPTION DSP MERRILL LYNCH LIQUIDITY FUND - GROWTH PRUDENTIAL ICICI INST LIQUID PLAN KOTAK LIQUID (INSTITUTIONAL) - GROWTH PRINCIPAL CASH MANAGEMENT FUND - LIQUIDITY OPTION - INST PLAN - GROWTH PLAN UTI LIQUID CASH PLAN REGULAR - GROWTH PLAN UTI LIQUID CASH PLAN REGULAR - GROWTH PLAN UTI LIQUID CASH PLAN INST PLAN - GROWTH PLAN UTI LIQUID CASH PLAN INST PLAN - GROWTH PLAN GFBD - GRINDLAYS FLOATING RATE - ST - INST PLAN B - DAILY DIV FACE VALUE (Rs.) 10 1000 10 10 10 10 10 10 10 1000 10 1000 10 NOS. (in crs.) 1.077 0.003 1.838 1.100 0.320 0.253 0.856 0.849 5.461 0.037 7.007 0.034 4.280 COST 14.500 5.000 19.000 16.000 5.000 4.000 11.000 9.000 57.250 40.000 73.500 54.000 43.100

(Rs. in Crores) PARTICULARS SCHEDULE : 7 INVENTORIES (AS CERTIFIED BY THE MANAGEMENT) Raw-materials Finished Goods Packing materials AS AT 31-03-2005 AS AT 31-03-2004

7.89 314.99 0.22 323.10

219.47 219.47

SCHEDULE : 8 RECEIVABLES (UNSECURED, CONSIDERED GOOD) Over six months Considered good Considered doubtful Less :- Provision for doubtful debts Others, considered good

81.51 3.26 84.77 (3.26) 81.51 2,058.86 2,140.37

182.73 3.06 185.79 3.06 182.73 960.04 1,142.77

SCHEDULE : 9 CASH & BANK BALANCES Cash on hand [including cheques on hand Rs. 0.25 crores, Previous Year Rs. 3.39 crores] Balances with Scheduled Banks :In Margin money account : - Margin money account (lodged against Bank Guarantee & Letter of Credit) 161.72 - Margin money account (net of 100% Letter of Credit) 4.94 - Margin money account (PCFC) 13.10 - Margin money account (net of buyers credit facility) 87.79 - In Deposit Account (in foreign currency) 94.72 In Fixed Deposit account (pledged with govt. authorities) In Current Account In Over draft / CC Account EEFC Account Unclaimed Dividend Account Balance with Foreign Bank in Current Account

1.02

3.96

98.97 46.39 14.01 362.26 1.67 113.25 0.85 0.09 0.24 479.38 159.37 0.05 30.02 5.78 0.36 0.09 199.63

26 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

(Rs. in Crores) PARTICULARS SCHEDULE : 10 LOANS & ADVANCES (UNSECURED, CONSIDERED GOOD) Loans Advances recoverable in cash or in kind or for value to be received Balances with Service Tax Authorities Interest accrued but not due Interest accrued and due on Investments Advance payment of Income tax (including TDS of Rs. 3.52 crores , Previous Year Rs.7.16 crores) 5.04 246.34 0.42 41.85 0.01 36.70 330.36 SCHEDULE : 11 CURRENT LIABILITIES Sundry Creditors Other liabilities Unclaimed Dividend Interest accrued but not due 1,692.37 119.17 0.09 7.30 1,818.93 SCHEDULE : 12 PROVISIONS Provision for taxation Provision for Leave encashment Proposed dividend Tax on dividend (Including surcharge) 25.68 1.03 9.02 1.27 37.00 SCHEDULE : 13 MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted) Deferred Revenue Expenditure Less: 1/5th written off during the year 3.79 0.95 2.84 1.15 0.23 0.92 6.91 0.69 8.82 1.26 17.68 871.63 15.29 0.09 0.25 887.26 17.23 175.35 12.14 0.01 10.05 214.78 AS AT 31-03-2005 AS AT 31-03-2004

27

Adani Exports Limited


Five Star Export House

SCHEDULES 14 TO 19 FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2005
(Rs. in Crores) PARTICULARS SCHEDULE : 14 SALES & OPERATING EARNINGS Sales Export incentives Service charges (Service Tax) Insurance Claim Received Miscellaneous Operating income (TDS on service charges and misc. operating income Rs. 2.34 crores, P.Y. Rs. 1.23 crores) 13417.80 8.84 25.34 2.31 61.55 6782.64 201.25 0.12 85.04 2004-05 2003-04

13515.84

7069.05

SCHEDULE : 15 OTHER INCOME Dividend (Gross) Dividend from Subsidiary Company Interest on investments Profit/ Loss on sale of investments(net) Profit on surrender of rights Other Income 0.44 0.16 2.43 3.03 0.02 1.79 0.03 73.14 2.00 76.98

SCHEDULE : 16 COST OF MATERIALS Raw materials consumed Opening stock ADD : Purchases during the year LESS : Closing stock ADD : Processing charges Purchase of traded goods Decrease / (Increase) in stock Opening stock of finished / traded goods Closing stock of finished / traded goods

1727.00 1727.00 7.90 1719.10 35.04 1754.14 11235.97 219.47 314.99 (95.51) 12894.60

0.20 10.63 10.83 10.83 6.24 17.07 6786.81 77.26 219.47 (142.21) 6661.67

SCHEDULE : 17 PERSONNEL EXPENSES Salaries & bonus Contribution to provident & other funds Staff welfare expenses 10.39 0.97 0.62 11.97 6.64 0.98 0.37 7.99

28 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

(Rs. in Crores) PARTICULARS SCHEDULE : 18 OPERATION & OTHER EXPENSES Rent (Net) Rates & Taxes Postage, telephone & telex expenses Stationery & printing expenses REPAIRS TO : Office building Office equipments Others Electric power expenses Insurance expenses Miscellaneous expenses Payment to auditors Office expenses Computer software Directors sitting fees Loss / Profit on sale of assets (Net) Clearing & forwarding expenses (Net) Packing Materials Consumed Supervision & testing expenses Damages on contract settlements Loss of stock due to accident Advertisement and Selling Expenses Bad-debts and other receivable written off (net of recovery Rs 0.63 crores, Previous Year Rs 0.50 crores) Less :- Transferred from General Reserve (See Note No. 9) Provision for Bad & Doubtful debts Business support services Travelling & conveyance expenses 1.39 7.77 2.57 0.63 0.63 8.60 1.76 0.48 2004-05 2003-04

0.40 0.19 1.08 1.66 0.86 4.74 28.01 0.13 0.43 3.13 0.02 0.18 148.54 37.48 4.47 11.49 0.04 35.56 68.16 68.16

0.24 0.19 0.32 0.75 0.67 1.84 9.66 0.13 0.17 0.05 0.02 0.33 57.06 1.33 2.93 18.35 39.97 39.97

0.87 130.00 7.85 427.82

3.06 182.61 5.25 295.68

SCHEDULE : 19 FINANCE CHARGES INTEREST PAID Interest on Term Loans Interest on Debentures/Bonds Interest on Bank Borrowings & Others Less : Interest Income Interest on deposit and others (TDS Rs. 0.97 crore, Previous Year Rs. 1.88 crores) Net Interest Bank Commission / Charges Exchange rate difference (160.23) (25.74) 37.58 40.31 52.15 41.57 44.32 18.50 (9.30) 53.52 18.82 1.36 114.31 134.49 13.21 2.57 70.12 85.90

29

Adani Exports Limited


Five Star Export House

(B)

Group Gratuity & Super Annuation Scheme of Life Insurance Corporation of India and are charged against revenue every year. Leave Encashment: The Company has provided the liabilities pertaining to accrued leave encashment as at the year end in its books of accounts on the basis of the actuarial valuers certificate. m) BORROWING COSTS Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue. n) SEGMENT ACCOUNTING Accounting Standards Interpretation (ASI) 20 dated 14 th February, 2004, issued by the Accounting Standards Board of the Institute of Chartered Accountants of India, on AS 17, Segment Reporting clarifies that in case, by applying the definitions of business segment and geographical segment given in AS 17, it is concluded that there is neither more than one business segment nor more than one geographical segment, segment information as per AS 17 is not required to be disclosed. o) RELATED PARTY TRANSACTIONS Disclosure of transactions with Related Parties, as required by Accounting Standard 18 Related Party Disclosures has been set out in a separate statement annexed to this Schedule. Related parties as defined under clause 3 of the Accounting Standard have been identified on the basis of representations made by key managerial personnel and information available with the Company. p) LEASES The Companys significant leasing arrangements are in respect of operating leases for premises (residential, office, stores, godowns, etc.) and land. The leasing arrangements which are not cancelable range between 11 months and five years generally, and are usually renewable by mutual consent on agreed terms. The aggregate lease rentals payable are charged as rent including lease rentals. q) EARNING PER SHARE The Company reports basic and diluted earnings per share (EPS) in accordance with Accounting Standard-20 issued by the Institute of Chartered Accountants of India. The Basic EPS has been computed by dividing the income available to equity shareholders by the weighted average number of equity shares outstanding during the accounting year. The Diluted EPS have been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at the end of the year. r) TAXATION a) Provision for taxation has been made in accordance with the Income Tax Law prevailing for the relevant assessment years. b) In accordance with Accounting Standard 22 Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India, the deferred tax for timing differences between the book and tax profits for the year is accounted by using the tax rates and laws that have been enacted or substantively enacted as of the Balance Sheet date. Deferred Tax assets arising from timing differences are recognised to the extent there is virtual certainty that the assets can be realised in future. Net outstanding balance in Deferred tax account is recognized as deferred tax liability/asset. The deferred tax account is used solely for reversing timing difference as and when crystallized. s) COMMODITY HEDGING TRANSACTIONS The commodity hedging contracts are accounted on the date of their settlement & realised gain / loss in respect of settled contracts are recognised in the Profit and Loss account, together with the underlying transactions. t) ACCOUNTING OF CLAIMS i) Claims received are accounted at the time of lodgment depending on the certainty of receipt and claims payable are accounted at the time of acceptance. ii) Claims raised by Government authorities regarding taxes and duties, which are disputed by the Company, are accounted based on legality of each claim. Adjustments, if any are made in the year in which disputes are finally settled. u) EXPORT INCENTIVES Export benefits under various scheme announced by the Central Government under Exim Policy are accounted on accrual basis to the extent considered receivable depending on the certainty of receipt. v) PROPOSED DIVIDEND Dividend proposed by the Directors is provided for in the books of account pending approval at the Annual General Meeting. w) CAPITAL WORK-IN-PROGRESS Advances paid towards the acquisition of fixed assets, and the cost of assets not put to use before the year ended, are disclosed under capital work-in-progress. x) INSURANCE CLAIMS Insurance and other claims to the extent considered recoverable are accounted for in the year of claim based on the amount assessed by the surveyor. However, claims and refunds whose recovery can not be ascertained with reasonable certainty, are accounted for on acceptance/actual receipts basis. y) DOUBTFUL DEBTS/ADVANCES Provision is made in the accounts for Debts/Advances which in the opinion of the management are considered doubtful of recovery. z) MISCELLANEOUS EXPENDITURE DEFERRED REVENUE EXPENSE Revenue expenditure incurred, the benefit of which extends over a period of time, are deferred and amortized over a period of three to five years commencing from the year the resource / facility gets fully functional in an integral way and the corresponding benefit starts accruing to the business. NOTES ON ACCOUNTS:1. Cumulative redeemable preference shares under series VII of the face value of Rs. 10/- each redeemable at the end of five years from the date of allotment, were redeemed at par during the year. 2 a) During the year Company has issued 3800 1% Foreign Currency Convertible Bonds (FCCB) each having face value of 10000 US$, total value Rs.174.42 crores. These Bonds are convertible in to equity shares at the option of the Bond holders at a fixed price of Rs.67 per share. Unless the Bonds are Previously purchased and cancelled or the Bonds are converted, the Company will redeem the Bonds at 124 percent on 23-10-2009, without any Previous notice. iii)

31

Adani Exports Limited


Five Star Export House

3.

4. 5. 6.

7. 8.

Consequently, 740 bonds aggregating to Rs.33.94 crores (net of exchange gain of Rs.0.03 crore) have been converted in to 5065684 Equity Shares at agreed conversion price of Rs.67 per share. Upon said conversion, the Equity Share Capital and Share premium have increased by Rs.0.51 crore and Rs.33.43 crores respectively. During the year the Company has changed the presentation with regards to Bills Discounted with Banks. The outstanding Bills Discounted as on the Balance Sheet date have been shown as contingent liability, consequently working capital loan and debtors are reduced to the extent of Rs.961.27 crores (Previous Year Rs.311.04 crores). For the Current Year review as required by Accounting Standard 28 Impairment of Fixed Assets, the management is of the opinion that no impairment or reversal of loss is required. Buildings include cost of ownership accommodations including Rs.3,500/- (Previous Year Rs. 3,250/-), being cost of shares held in various Co-operative Societies. Office premises of Rs. 3.75 Crores, include Rs. 2.32 Crores represent unquoted Shares (160 equity shares of A type and 1280 equity shares of B type of Rs. 100 each fully paid up) in Ruparelia Theatres P. Ltd. By virture of Investment in shares, the Company is enjoying rights in leasehold land and Rs. 1.44 Crores towards construction contribution and exclusive use of terrace and allotted parking space. Capital work in progress includes:Building worth Rs. 0.65 Crore (Previous Year Rs. 0.65 Crore) which is disputed and the matter is sub-judice. Capital Commitments:(Rs. in Crores) PARTICULARS AS AT 31-03-2005 AS AT 31-03-2004 Estimated amount of contracts remaining to be executed 70.36 0.01 and not provided for (net of advances) During the year, balances in Receivables / Advances which are long outstanding amounting to Rs. 68.16 Crores (Previous Year Rs. 39.97 Crores), net of recovery, have been identified as not recoverable. The determination of this balance of written off amount is based on evaluation of individual advances, current economic conditions, viability and other factors and reflects an amount which, in managements judgment, is not recoverable. Accordingly, the above amount in respect of outstanding dues representing transactions effected in past years during normal course of business has been debited to the Profit & Loss Account. An equivalent amount has been withdrawn from the General Reserve to offset this charge, as it pertains to past years. Sundry Creditors, Receivables and Loans and Advances include certain items for which confirmations are yet to be received and include certain long outstanding balances which are considered payable / realisable, as the case may be. Provision for doubtful debts, if any, in respect of above and the consequential adjustment, arising out of reconciliation will be made at the appropriate time. Credit & Debit balances under a particular category are netted off while certain mutually discharging related debit & credit balances have also been netted off for effective presentation. In the opinion of the Board, the current assets, loans and advances are approximately of the value stated, if realised in the ordinary course of business, except unless stated otherwise. The provision for all the known liabilities is adequate and not in excess of amount considered reasonably necessary. Provisions for doubtful debts are made by provision charged to current revenue. The determination of the balance of the provisions is based on evaluation of individual advances, current economic conditions, viability and other factors and reflects an amount which in managements judgment is adequate to provide for potential losses. Receivable includes amount due from foreign subsidiary companies of Rs.37.14 Crores (Previous Year Rs.46.35 Crores). Loans & Advances includes :a) Amount due from Companies Rs. 10.59 Crores (Previous Year Rs. 35.99 Crores) in which some of the Directors of the Company are interested. b) Rs. 47.03 Crores (Previous Year Rs. 1.92 Crores) paid as advance against Capital Asset. Export Incentive receivable under duty free credit entitlement included under the head Loans & Advances is pending due to disposal for some procedural aspects with Government. Shortfall / excess if any will be taken into accounts as and when it is determined. The Company has a policy of accounting export benefits / incentives on accrual basis to the extent receivable. Hence, looking to the past history and uncertainty attached to the availability of benefit on account of entitlement to import goods free of duty under the new Exim Policy, will be accounted when certainty exist and the expenses payable under contractual obligation / arrangement with regard to availment of export incentives will be recognized only upon recognition of Export Incentives. Buyers credit/suppliers credit have been netted off against margin money for effective presentation. a) During the year, the Company disinvested 1,28,83,950 (Previous Year NIL) shares of Adani Wilmar Ltd. a joint venture, reducing the holding to NIL. b) The Company disinvested, Current Year NIL (Previous Year 1,55,00,000) shares of Gujarat Adani Port Limited, Current Year NIL (Previous Year 14,23,300) shares of Adani Port Limited and Current Year NIL (Previous Year 26,000) shares of Adani Container (Mundra) Terminals Limited, being long term investment (unquoted) and the resultant gain is credited to profit & loss account. In respect of advances given by the Company to some of the parties for fulfillment of commitment, against non-fulfillment of commitment, the Company has taken legal action and is examining other options for recovery of the Advances. The Company has initiated legal proceedings against various parties for recovery of dues and such legal proceedings are at different stages as at the date of the Balance Sheet and are expected to materialise in recovering the dues in the future. Management is hopeful of their recovery. In the opinion of the Management, adequate balance is lying in General Reserve to meet the eventuality of this account being irrecoverable. Unsecured loan includes Rs. 0.22 Crore (Previous Year Rs. 0.22 Crore) from a Company in which one of the Director is interested. Sundry Creditors include amount due to the companies in which some of the directors are interested Rs. NIL (Previous Year Rs. 5.34 crores).

b)

9.

10.

11. 12.

13.

14. 15.

16.

17.

18. 19.

20. 21.

22. 23.

32 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

24.

25.

Other liabilities include:a) Rs. 0.05 Crore (Previous Year Rs. 0.05 Crore) received against agreement to sell of Land pending other formalities. b) Amount due to Company in which some of the Directors are interested Rs. NIL (Previous Year Rs. 1.78 Crores). c) Rs 1.03 Crores for Liability against earned leave (leave liability actuarially valued at 31-3-2004 is Rs. 0.69 Crore). a) Provision for taxation for the year has been made after considering allowance, claims and relief available to the Company as advised by the Companys tax consultants. b) Various tax related legal proceedings are pending against the Company. Potential liabilities, if any, have been adequately provided for, and management does not estimate any incremental liability in respect of legal proceedings. c) No provision for Income Tax was made on profit on sale of investments in financial year 2003-04 on which, relief is likely to be extended under the Income Tax Act, 1961 on the basis of expert opinion taken by the Company. Contingent liabilities not provided for (Rs. in Crores) PARTICULARS a) b) Claims against the Company not acknowledged as debts In respect of Corporate Guarantee given:i. To Companies under the same management ii. For obligations to other parties Bills of Exchange Discounted Demand against the Company not admitted as debts regarding sales tax against which appeals are pending In respect of bank guarantees given to government agencies. AS AT 31-03-2005 14.44 108.11 88.26 961.27 14.21 4.07 AS AT 31-03-2004 36.95 213.86 336.01 311.04 1.05 4.10

26.

c) d) e) f)

Certain claims / show cause notices disputed have neither been considered as contingent liabilities nor acknowledged as claims based on the opinions obtained from prominent legal counsels for which amount is unascertainable.

27.

28.

29. 30. 31. 32.

33.

The Company has taken out a group gratuity insurance policy with the Life Insurance Corporation of India for future payments of retirement gratuity to employees. In the event of any employees leaving service earlier, the Company will have to bear a certain portion of the gratuity which is not ascertainable and no provision has been made in respect thereof. In spite of the absence of a data-base identifying creditors as Small Scale Industrial Undertakings, the management is of the opinion that there are no parties which can be classified as Small Scale Industrial Undertakings to whom the Company owes any sum. The Auditors have accepted the representations of the management in this matter. No amounts are due for deposits as at the Balance Sheet date to the Investors Education and Protection Fund. Currency Swap Gains of Rs. 3.36 Crores (Previous Year Rs. 1.05 Crores) has been netted off against interest expenses on term loans. Exchange rate difference has been debited to Profit & Loss Account. Items of Expenditure in the Profit and Loss Account include reimbursements to and by the Company. Disclosure as required by Accounting Standard 19, Leases issued by the Institute of Chartered Accountants of India are given below: Being the Company is lessee: (i) The Companys significant leasing arrangements are in respect of godowns / residential / office premises (Including furniture and fittings therein, as applicable). The aggregate lease rental payable are charged to Profit and Loss Account as Rent in Schedule 18. (ii) The Leasing arrangements, which are cancelable at any time on month to month basis and in some cases between 11 months to 5 years, are usually renewable by mutual consent on mutually agreeable terms. Under these arrangements, generally refundable interest free deposits have been given. As per Accounting Standard 21 on Consolidated Financial Statements and Accounting Standard 23 on Accounting for Investments in Associates in Consolidated Financial Statements issued by the Institute of Chartered Accountants of India, the Company has presented consolidated financial statements separately, including subsidiaries and associates, in this annual report. Payments to Auditors (including service tax) :2004-2005 i ii iii iv Audit fee Tax Audit fee Other Matters (C.Y. Rs.50,000/- P.Y. Rs. 20,000/-) Reimbursement of Expenses Total 0.10 0.02 0.01 0.13 (Rs. in Crores) 2003-2004 0.10 0.02 0.01 0.13 (Rs. In Crores) 2004-2005 Debits relating to earlier years Credits relating to earlier years Net Total 35.80 (23.36) 12.44 2003-2004 0.27 (0.21) 0.06

34.

35.

Prior period adjustments consist of :-

33

Adani Exports Limited


Five Star Export House

36.

Computation of Net Profit under Section 349 of the Companies Act,1956 PARTICULARS A. Profit Before Taxation ADD: Depreciation as per accounts Directors Remuneration Directors Commission Loss on sale of investments/assets 2004-2005 130.62 2.10 0.88 2.21 0.18 135.99 LESS:Depreciation as per Sec. 350 of the Companies Act, 1956 Profit on surrender of rights Profit on sale of investments/assets Profit for the purpose of Directors Commission Chairman @ 0.5% of Rs.133.72 crores (Previous Year at 0.5% of Rs. 52.77 crores) Managing Director @ 0.75% of Rs.133.72 crores (Previous Year at 0.75% of Rs. 52.77 crores) Whole-time Director @ 0.4% of Rs.133.72 crores (Previous Year at 0.4% of Rs. 52.77 crores) 2.11 0.16 133.72 0.67 1.00 0.53 2.20 B. Managerial remuneration to Chairman, Managing & Whole-time Directors under section 198 of the Companies Act, 1956 i) Salaries ii) Contributions to provident and other funds iii) Commission

(Rs. In Crores) 2003-2004 126.14 1.79 0.57 0.87 0.33 129.70 1.79 2.00 73.14 52.77 0.26 0.40 0.21 0.87

0.72 0.16 2.20 3.08

0.53 0.04 0.87 1.44

37. 38.

Miscellaneous Income includes Rs. NIL (Previous Year Rs. 0.24 Crores) being net of Debit & Credit balances no longer required & Written Off during the year. Related party disclosure (As identified by the Management) The Company has entered into transaction in ordinary course of business with related parties at arms length. As required by Accounting Standard 18

I A B

Name of related parties & description of relationship Controlling Companies Subsidiary Companies Adani Global Ltd. Adani Global FZE Adani Global Pte Ltd. Associate Entities Adani Agrifresh Ltd. Adani Agro Pvt. Ltd. Adani Chemicals Ltd. Adani Logistics Ltd. Adani Petronet (Dahej) Port Pvt Ltd. Adani Port Infrastructure Ltd. Adani Port Ltd. Adani Textiles Industries Adani Wilmar Ltd. B2C India Ltd. Gujarat Adani Energy Ltd. Gujarat Adani Infrastructure Pvt. Ltd. Gujarat Adani Port Ltd. Gujarat State Exports Corporation Ltd. I Call India Ltd. Inter Continetal (India)

34 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

D E

I-Gate India Pvt. Ltd. Komal Marketing Pvt Ltd Komal Infotech Pvt Ltd Mundra Special Economic Zone Ltd Shanitkrupa Estates Pvt. Ltd. Shantivan Joint Control Adani Wilmar Ltd. Key Management Personnels Shri Gautam S. Adani Shri Rajesh S. Adani Shri Vasant S. Adani Relatives Vasant S. Adani Family Trust Vinod S.Adani (Rs in Crores) Subsidiary Company Sales (Net of Return) 202.21 (236.48) Purchase ( Net of Return) 937.52 (191.56) Sale of Investment (-) Purchase of Fixed Asset (-) Sale of Fixed Assets (-) Interest - received / (paid) (0.44) (-) Dividend received 0.44 (1.79) Funds given [ includes investment in preference shares/equity participation/ (0.08) business arrangement] Funds received [including redemption of 2.89 preference share/business arrangement] (1.46) Service rendered (-) Service availed (-) Rent paid 0.33 (-) Rent received (-) Remuneration (-) Guarantee & Collateral securities 65.63 (Outstanding facility as on 31-03-2005) (85.50) Balance Outstanding as on (Due From) 37.14 31 st March 2005 (Due To) (46.35) Particulars Associate Entities 33.20 (0.88) 63.39 (0.13) 12.88 (93.71) 3.92 (-) 0.03 (0.26) 0.28 (1.09) (-) 41.99 (278.20) 68.22 (167.81) 1.52 (2.00) 124.62 (29.38) 0.04 (0.24) 0.04 (-) (-) 130.73 (249.51) 13.52 14.75 (108.01) Jt Control Company (17.70) 2.02 (56.27) (-) (0.01) (-) (0.17) (-) (44.97) (49.97) 0.33 (4.35) (1.36) (-) (0.04) (-) (185.90) (-) Key mngt Personnels (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) 3.11 (1.44) (-) (-) Relatives (-) (-) 1.89 (-) (-) (-) (-) (-) (-) (-) (-) 0.02 (-) (-) (-) (-) (-)

ii)

Nature & Volume of Transaction with Related Parties

1 2 3 4 5 6 7 8

9 10 11 12 13 14 15 16

Adani Wilmar Ltd ceased to be joint venture from 28-6-2004 so the transactions with Adani Wilmar Ltd till then are shown in Joint Venture and thereafter shown in Associate Concern.

35

Adani Exports Limited


Five Star Export House

iii)

As required by the amendment to the clause 32 of the listing agreement vide SEBI circular no. 2 / 2003 of 10th January, 2003, the following disclosure has been made : (a) Loans and advances in the nature of loans to subsidiaries: NIL (b) Loans and advances in the nature of loans to associates: Sr. No. 1 2 3 4 5 6 7 8 9 (c) (d) Name of Entity Adani Agrifresh ltd. Adani Chemicals Ltd. Adani Logistics Ltd. Adani Properties Pvt Ltd B2C India Ltd. Gujarat Adani Energy Ltd. Gujarat Adani Infrastructure Pvt. Ltd. Gujarat Adani Port Ltd. I Call India Ltd. Closing Balance AS AT 31-03-2005 0.03 (NA) NIL (2.08) 1.20 (NA) NA (NIL) NIL (5.15) NIL (NIL) NIL (0.06) NIL (NIL) NA (9.99) Maximum amount Outstanding during the year 0.03 (NA) 2.08 (2.08) 1.20 (NA) NA (0.14) 5.15 (17.92) NIL (0.48) 0.06 (9.71) NIL (2.16) NA (9.99)

Loans and advances in the nature of loans where there is no repayment schedule, or no interest or interest below the rate under Section 372A of the Companies Act, 1956: NIL Loans and advances in the nature of loans to firms / companies in which directors are interested: (Rs in Crores) Sr. No. 1 2 3 4 5 6 7 8 Name of Entity Adani Agrifresh ltd. Adani Chemicals Ltd. Adani Logistics Ltd. B2C India Ltd. Gujarat Adani Energy Ltd. Gujarat Adani Port Ltd. I Call India Ltd. Adani Properties Pvt. Ltd. Closing Balance AS AT 31-03-2005 0.03 (NA) NIL (2.08) 1.20 (NA) NA (5.15) NIL (NIL) NIL (NIL) NA (9.99) NA (NIL) Maximum amount Outstanding during the year 0.03 (NA) 2.08 (2.08) 1.20 (NA) NA (17.92) NIL (0.48) NIL (2.16) NA (9.99) NA (0.14)

(e) 39.

Investments by the loanee in the shares of the Company as on 31st March, 2005: NIL

Earning Per Share Particulars Net Profit after Tax Provision (Rs. in Crores) Less: Preference Dividend including tax thereon (Rs. in Crores) Net Profit after tax available for Equity Shareholders (Rs. in Crores) Number of shares used in computing Earning Per Share Basic Diluted Earning Per Share (Equity Shares, face value Rs.1/-) Basic (in Rs.) Diluted (in Rs.) Year ended 31-03-2005 108.29 0.22 108.07 220926086 221757733 4.89 4.87 Year ended 31-03-2004 124.08 1.12 122.96 220474000 220474000 5.58 5.58 36 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

Dilutive potential equity shares are those which are deemed for the purpose of the computation to have been issued for no consideration. During the year, face value of the equity shares have been reduced from Rs.10/- to Re.1/-, accordingly the calculation of basic and diluted earning per share is adjusted for the year ended March 31, 2004 based on the new number of shares as per para 44 of Accounting Standard 20. 40. a) Deferred Tax (Rs. in Crores) As At 31-03-2005 Deferred Tax Liability on account of (i) Depreciation (ii) Deferrred Revenue Expenditure Total Deferred Tax Assets on Account of (i) Software expenses (ii) Brought forward capital loss (iii) Diminution in value of investments (iv) Leave Encashment (v) Provision for Bad-debts Total Net Deferred Tax Liability b) 41 6.32 1.26 7.58 0.12 1.10 1.22 6.36 As At 31-03-2004 4.27 4.27 0.10 0.03 0.24 1.10 1.47 2.80

In accordance with Accounting Standard 22, the deferred tax Liability of Rs. 3.56 Crores (Previous Year Assets of Rs. 0.05 Crore) for the year has been recognised in the Profit & Loss Account.

Quantitative information to the extent applicable for the year pursuant to the paragraphs 3 & 4 of part II of Schedule VI to the Companies Act, 1956 (As certified by the management). (A)
SR. NO. 1 2 3

SALES AND STOCKS OF GOODS TRADED AND PROCESSED (Rs in Crores)


CLASS CHEMICAL / PLASTICS AGRO PRODUCTS PRECIOUS & OTHER METAL PRECIOUS & OTHER METAL PRECIOUS & OTHER METAL UNITS MT MT KGS CTS MT MT U KGS NOS YDS MTR MT MT OPENING STOCK QTY 10,962.302 (12,322.816) 200,958.038 (41,916.767) (15.190) (-) (-) 5,172.744 (3,797.916) (-) 556,526.520 (315,783.560) (-) 64,565.000 (44,141.000) 125,065.500 (112,978.600) (-) 7,00-0 (4,850.814) (-) RUPEES 18.15 (23.55) 186.72 (43.57) (0.79) (-) (-) 0.92 (1.14) (-) 8.40 (1.90) (-) 0.45 (0.33) 0.57 (0.59) (-) 4.26 (2.07) (3.32) 219.47 (77.26) CLOSING STOCK QTY 31,654.018 (10,962.302) 122,375.358 (200,958.038) 134.809 (-) (-) (-) 397,888.557 (5,172.744) (-) 220,843.440 (556,526.520) (-) (64,565.000) 3,486.750 (125,065.500) (-) 19,527.978 (7,000.000) (-) RUPEES 65.88 (18.15) 102.68 (186.72) 8.23 (-) (-) (-) 123.41 (0.92) (-) 2.21 (8.40) (-) (0.45) 0.02 (0.57) (-) 12.55 (4.26) (-) 314.99 (219.47) SALES QTY 235,794.382 (105,753.185) 1,081,007.072 (1,704,351.632) 17,208,816.138 (138,989,596.190) 8,338,234.310 (10,671,025.020) 256.216 (-) 3,070,466.659 (1,384,145.748) 803,069,687.135 (101,005,100.000) 11,118,650.632 (15,611,366.437) (94,465.000) 479,206.000 (2,686,001.070) 5,277,261.930 (22,306,056.960) 5,498.063 (22,063.569) 126,245.402 (129,562.096) 4,452.000 (-) RUPEES 444.91 (202.59) 1,283.57 (1,786.67) 4,165.15 (880.80) 6,092.75 (2,500.93) 13.54 (-) 856.88 (598.58) 200.46 (22.34) 149.63 (209.12) (6.99) 3.30 (13.02) 27.61 (80.08) 119.41 (417.28) 60.43 (54.55) 0.16 (9.69) 13,417.80 (6,782.64)

4 5 6

MINERALS / OILS POWER TRADING TEXTILE PRODUCTS TEXTILE PRODUCTS TEXTILE PRODUCTS TEXTILE PRODUCTS

7 8 9

FROOZEN FOODS FERTILIZERS OTHER PRODUCTS GRAND TOTAL

37

Adani Exports Limited


Five Star Export House

(B) SR. NO. 1 2 3

PURCHASE OF TRADED GOODS (Rs. In Crores) CLASS CHEMICAL / PLASTICS AGRO PRODUCTS PRECIOUS & OTHER METAL PRECIOUS & OTHER METAL PRECIOUS & OTHER METAL MINERALS / OILS POWER TRADING TEXTILE PRODUCTS TEXTILE PRODUCTS TEXTILE PRODUCTS TEXTILE PRODUCTS FROOZEN FOODS FERTILIZERS OTHER PURCHASES TOTAL UNITS QTY MT MT KGS CTS MT MT U KGS NOS YDS MTR MT MT 256,486.098 965,161.855 17,181,627.513 8,338,234.310 256.215 3,465,006.228 803,069,687.135 10,782,767.820 414,640.000 5,155,683.180 5,498.063 138,773.380 2004-2005 AMOUNT 479.94 1,102.34 2,329.35 5,909.07 13.38 886.68 179.28 123.64 2.81 26.31 116.13 66.91 0.12 11,235.97 QTY. 104,931.187 1,886,351.863 138,989,581.000 10,671,028.420 1,382,806.520 104,456,757.000 15,851,651.040 6,000.000 1,280,825.180 20,089,279.500 22,063.569 131,711.282 2003-2004 AMOUNT 189.97 1,885.61 884.66 2,481.73 570.56 19.56 189.50 4.86 8.35 67.94 425.10 54.30 4.67 6,786.81

4 5 6

7 8 9

(C) SR. NO. 1 2 3

RAW MATERIAL CONVERTED (Rs. In Crores) CLASS PRECIOUS METAL AGRO PRODUCTS TEXTILES UNITS QTY KGS MT KGS YDS MTR 27,323.434 52,490.298 2004-2005 AMOUNT 1678.17 75.97 1754.14 QTY. 5,307.120 1,428,102.000 2,563,985.000 2003-2004 AMOUNT 0.06 4.19 12.82 17.07

TOTAL (D) IMPORTED & INDIGENOUS CONSUMPTION

(Rs. In Crores) 2004-2005 AMOUNT RAW MATERIALS : IMPORTED INDIGENOUS TOTAL E) VALUE OF IMPORTS ON CIF BASIS (Rs. In Crores) 2004-2005 Trade goods TOTAL F) EXPENDITURE IN FOREIGN CURRENCY (Rs. In Crores) 2004-2005 Travelling expenses Other matter Interest Bank charges Clearing & Forwarding Brokerage & Commission Total 0.93 8.45 75.18 0.92 112.66 198.14 2003-2004 0.48 4.34 8.53 0.79 29.22 145.23 188.59 9029.94 9029.94 2003-2004 1967.12 1967.12 1580.000 174.140 1754.140 90.07 9.93 100.00 0.40 16.67 17.07 2.34 97.66 100.00 % AMOUNT 2003-2004 %

38 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

SCHEDULE: 20 NOTES FORMING PART OF THE ACCOUNTS A) SIGNIFICANT ACCOUNTING POLICIES adopted by the Company in the preparation and presentation of the Accounts :a) SYSTEM OF ACCOUNTING The financial statements are prepared under the historical cost convention, on the accrual basis of accounting in accordance with Companies Act, 1956 and in accordance with the accounting principles generally accepted in India (Indian GAAP) and comply with the Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) to the extent applicable. b) USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods. c) INVENTORIES i) Inventories are valued at lower of cost or Net Realisable value. ii) The Custom duty in respect of Closing Inventory of Finished goods is included as cost of inventory. iii) The basis of determining cost for various categories of inventories are as follows: a) Raw material : First in First out (FIFO). b) Traded / Finished goods : First in First out (FIFO) / Specific identification of their individual costs as the case may be. c) Licences on hand : Specific identification of their individual costs. d) Packing Material : Packing material having significant value on First in First Out (FIFO). d) MATERIAL EVENTS Material events occurring after the balance sheet date are taken into cognizance. e) CONTINGENT LIABILITIES These are disclosed by way of notes on accounts. Provision is made in accounts in respect of those contingences, which are likely to materialize in to liabilities after the year end, till the finalisation of accounts and have material effect on the position stated in the Balance Sheet. (Refer Note No.3 on Notes on Accounts). f) PRIOR PERIOD ITEMS Prior period expenses/income is accounted under the respective heads. Material items, if any, are disclosed separately by way of note. g) DEPRECIATION i) Depreciation on Fixed Assets is provided on straight-line method at rates and in the manner specified in Schedule XIV to the Companies Act, 1956 read with the relevant circulars issued by the Department of Company Affairs. ii) Depreciation on Assets acquired / disposed off during the year is provided on pro-rata basis with reference to the date of addition/disposal. iii) Any expenditure in respect of assets, the ownership of which would not vest with the Company, are charged off to revenue in the year of incurrence. h) REVENUE RECOGNITION i) Sales of goods is recognised on shipment or despatch to customer sales and net of Sales-tax and return. ii) Dividend income from investments is recognised when the Company s right to receive payment is established. iii) Income from services rendered is accounted for when the work is performed. iv) Interest revenues are recognised on time proportion basis taking into account the amount outstanding and the rate applicable. i) FIXED ASSETS Fixed assets are stated at cost of acquisition or construction. They are stated at historical cost less accumulated depreciation. j) FOREIGN CURRENCY TRANSACTIONS i) Initial Recognition Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. ii) Conversion At the year-end, monetary items denominated in foreign currencies, other than those covered by forward contracts, are converted into rupee equivalents at the year end exchange rates. iii) Exchange Differences All exchange differences arising on settlement and conversion on foreign currency transaction are included in the Profit and Loss Account. iv) Forward Exchange Contracts In respect of transactions covered by forward exchange contracts, the difference between the forward rate and the exchange rate at the date of the transaction is recognised as income or expense over the life of the contract. k) INVESTMENTS i) Current investments are carried at the lower of cost and quoted/fair value, computed category wise. Long term investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management. ii) Investment in shares of foreign subsidiary Company is expressed in Indian Currency at the rates of exchange prevailing at the time when the investment was made. l) RETIREMENT BENEFITS i) Provident Fund and Pension Fund: The Company contributes towards provident and pension fund which is administered by Central Government and are charged against revenue every year. ii) Gratuity and Superannuation Fund: Liabilities for payment of Gratuity & Super Annuation to employees are covered through 30 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

G)

EARNING IN FOREIGN CURRENCY (Rs. In Crores) 2004-2005 Export of Goods on F.O.B. Basis Commission Interest Income Dividend Income Other Income Total 10807.97 0.16 0.44 0.62 10809.19 2003-2004 4841.46 0.27 0.01 1.79 0.14 4843.67

Note : Licensed and installed capacity : Not applicable(Previous Year : Not applicable) 42. 43. Previous Years figures have been regrouped wherever necessary to confirm to this years classification. Additional Information as required under Part IV of Schedule VI to the Companies Act, 1956. Balance Sheet Abstract and Companys General Business Profile:I. Registration Details : Registration No. State Code Balance Sheet Date : : : 19067 04 31-03-2005

II.

Capital Raised during the year (Amount in Rs. Thousands) Public Issue - NIL Right Issue - NIL Bonus Issue - NIL Private Placement - 5065

III. Position of Mobilisation and Deployment of Funds(Amount in Rs. Thousands) Total Liabilities : 33788862 Total Assets : 33788862 Sources of Funds: Paid up Capital : 225540 Reserves & Surplus : 6650102 Secured Loans : 3827280 Unsecured Loans : 4565972 Deferred Tax Liability : 63627 Application of Funds: Net Fixed Assets : 561650 Investments : 466679 Net Current Assets : 14275753 Miscellaneous Expenditure : 28439 Accumulated Losses : IV. Performance of Company (Amount in Rs. Thousands) Turnover (Including other Income) : 135188736 Total expenditure : 133882513 Profit/(Loss) before tax : 1306223 Profit/(Loss) after tax : 1082929 Earning per share (Rs.) : 4.89 Dividend Rate % : 40% V Generic Names of Three Principal products/services of Company (as per monetary terms) Item Code No. (ITC Code) Not Ascertainable Product Description Merchant Exporters Item Code No. (ITC Code) Not Ascertainable Product Description Merchant Exporters Item Code No. (ITC Code) Not Ascertainable Product Description Merchant Exporters

Signature to Schedules 1 to 20

For and on behalf of the Board GAUTAM S. ADANI Chairman

PLACE : Ahmedabad DATE : 11 th May, 2005

BIRVA C. PATEL Company Secretary

RAJESH S. ADANI Managing Director

39

Adani Exports Limited


Five Star Export House

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2005
(Rs. in Crores) PARTICULARS A CASH FLOW FROM OPERATIONS Net Profit before tax & extraordinary items Adjustment for : Depreciation Income from investments Loss on sale of investment Profit on sale of investment Profit on sale of assets Loss on sale of fixed assets Provision for Bad Debts Deferred Revenue Expenditure Interest Expense Interest income Operating Profit before working capital changes Adjustment for: Trade & other receivables Inventories Loans & Advances Trade Payables Cash generated from operations Direct tax (paid) / refund Net cash from operating activities Cash Flow from Investing Activities Additions to fixed assets Additions to work in progress Sale of fixed assets Deferred Revenue Expenditure Proceeds from Redemption of Investments Sale of Investments Purchase of Investments Realisation of Short Term Investments (Net) Income from Investments Interest received Net cash used in Investing Activities Cash Flow from Financing Activities Conversion of 1% FCCB in to Equity Shares at a Premium Redemption of preference shares Proceeds from working capital borrowings Proceeds from long term borrowings Repayment of long term borrowings Proceeds from short term borrowings Interest Paid Dividend paid Net lncrease/(Decrease) in cash & cash equivalents Cash & cash equivalent at the beginning of the year Cash & cash equivalent as at 31/03/2005 2004-05 2003-04

130.62 2.11 (0.44) (0.16) (0.02) 0.20 1.25 0.95 134.49 (160.23) (21.86) 108.77 (1067.30) (103.63) (59.22) 924.96 (305.18) (196.41) (27.95) (224.36) (18.60) (4.05) 0.23 (2.64) 2.89 12.89 (0.06) 0.16 0.44 130.52 121.79 33.94 (10.00) 137.64 246.21 (132.49) 236.50 (127.46) (9.01) 375.33 272.75 211.63 484.38 (225.42) 206.24 (94.96) 48.19 (89.17) (7.61) (2.41) 0.37 2.83 (1.15) 1.19 162.16 (69.73) 0.16 1.84 32.34 (179.23) (142.01) 1.08 361.17 1.79 (1.84) 63.81 (136.95) (2.03) 0.36 3.06 0.23 85.90 (41.58)

126.14

(27.25) 98.89

41.01 139.90 2.37 142.27

127.60

(162.72) 107.15 104.48 211.63

Notes : 1 The above cash flow statement has been prepared under the Indirect Method set out in Accounting Standard (AS - 3) on Cash Flow Statement issued by The Institute of Chartered Accountants of India. 2 Prior Year Comparatives have been reclassified to confirm with current years presentation, wherever applicable. 3 Cash and Cash equivalents includes Rs. 269.30 crores (Previous Year Rs. 159.51 Crores). which are not available for use by the company (refer schedule 9 to accounts) 4 Short Term Investments of Rs. 5 crores (Previous Year Rs. 12 crores) included in Cash and Cash equivalents. As per our attached report of even date For DHARMESH PARIKH & CO., Chartered Accountants D.A. PARIKH Proprietor PLACE : Ahmedabad DATE : 11th May, 2005 BIRVA C. PATEL Company Secretary For and on behalf of the Board GAUTAM S. ADANI Chairman RAJESH S. ADANI Managing Director PLACE : Ahmedabad DATE : 11 th May, 2005 40 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956

Name of The Subsidiary Company

Adani Global Ltd. In US$ 31/12/2004 100%

Adani Global FZE In AED 31/12/2004 100%*

Adani Global Pte. Ltd. In S$ 31/12/2004 100%*

1. 2. 3.

Financial year of the Subsidiary Companies ended on Extent of interest in subsidiary Companies Net aggregate amount of the profits of the Subsidiary Company as far as it concerns the members of the Company a) Dealt with in the Company s Accounts i) for the financial year of the Subsidiary ii) for the previous year of the subsidiary since it became the Subsidiary of the Company b) Not dealt with in the Companys Accounts i) for the financial year of the Subsidiary ii) for the previous year of the Subsidiary since it became the Subsidiary of the Company

172992

9452092

634884

341427

39532774

797519

4.

Statement of changes under Section 212(5) of the Companies Act, 1956 from 1. Fixed Assets, Capitalised Assets & W.I.P. 2. Investments 3. Monies Lent 4. Monies Borrowed Term Loan for its ongoing project from the Financial Institutions/Banks

25000 (354798.59)

(01/01/2005 to 31/03/2005) 24980 94605.90 (1276598.49)

(4103139.03) (18642032.84)

* by Adani Global Ltd.

For and on behalf of the Board BIRVA C. PATEL Company Secretary PLACE : Ahmedabad DATE : 11 th May, 2005 GAUTAM S. ADANI Chairman RAJESH S. ADANI Managing Director

41

Adani Exports Limited


Five Star Export House

REPORT OF THE AUDITORS TO THE BOARD OF DIRECTORS OF ADANI EXPORTS LIMITED


1. We have examined the attached consolidated Balance Sheet of Adani Exports Limited, its subsidiaries and associates as at March 31, 2005, the consolidated Profit and Loss Account for the year ended on that date annexed thereto, and the consolidated cash flow statement for the year ended on that date which we have signed under reference to this report. These consolidated financial statements are the responsibility of the management of the Company. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform and audit to obtain reasonable assurance about whether the financial statements are prepared, in all material respects, in accordance with an identified financial reporting framework and are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. We did not audit the financial statements of Foreign subsidiaries Adani Global Limited, Adani Global FZE and Adani Global Pte Limited, for the year ended 31st December, 2004 whose financial statements reflect total assets of Rs. 442.75 Crores as at 31 st December, 2004 and total revenue of Rs. 2799.72 Crores for the year then ended. These financial statements have been audited by other auditors, whose reports have been furnished to us and our opinion, in so far as it relates to the amounts included in respect of these subsidiaries, is based solely on the report of the other auditors. We did not audit the financial statements of associate namely Adani Petronet (Dahej) Port Pvt Ltd., whose financial statements reflect total assets of Rs. 1.68 Crores as at March 31, 2005 and total revenues of Rs. NIL for the year ended on that date. These financial statements have been audited by other auditors whose reports have been furnished to us, and our opinion, in so far as it relates to the amounts included in respect of these associates, is based solely on the report of the other auditors. We did not audit the separate financial statements of other Associate Adani Logistics Limited for the period ended 31st March, 2005 whose unaudited financial statements reflect total assets of Rs. 1.78 Crores as at 31st March, 2005 and total revenue of Rs. NIL for the period then ended. The said financial statements, which were furnished to us by the management, were unaudited. We are unable to express an opinion on true and fair view in so far as it relates to the amounts included in the consolidated financial statements in respect of the associate, for the reasons as stated above. We report that the consolidated financial statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21 Consolidated Financial Statements and Accounting Standard 23Accounting for Investments in Associates in Consolidated Financial Statements, issued by the Institute of Chartered Accountants of India and on the basis of the separate audited financial statements of Adani Exports Ltd., its subsidiaries and associates included in the consolidated financial statements. On the basis of the information and explanations given to us and on the consideration of the separate audit reports on individual audited financial statements of the Adani Exports Limited, its subsidiaries and Associates in our opinion the consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India: a) b) c) in the case of the Consolidated Balance Sheet, of the state of affairs of the Adani Exports Limited, its subsidiaries and Associates as at March 31, 2005; in the case of the Consolidated Profit and Loss Account of the consolidated results of operations of the Adani Exports Limited, its subsidiaries and Associates for the year then ended; and in the case of the Consolidated Cash Flow Statement, of the consolidated cash flow of the Adani Exports Limited, its subsidiaries and Associates for the year then ended.

2.

3.

4.

5.

6.

7.

For DHARMESH PARIKH & CO. Chartered Accountants PLACE : Ahmedabad DATE : 11 th May, 2005 (D. A. PARIKH) Proprietor

42 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2005


(Rs. in Crores) PARTICULARS A SOURCES OF FUNDS : I. SHAREHOLDERS FUND (A) Share capital (B) Share Application Money pending allotment (C) Reserves & surplus II. LOAN FUNDS : (A) Secured loans (B) Unsecured loans DEFERRED TAX LIABILITY Deferred Tax Liability Less :Deferred Tax Assets TOTAL B APPLICATION OF FUNDS : I. FIXED ASSETS (A) Gross block (B) Less : Depreciation (C) Net block (D) Capital work-in-progress PRE-OPERATIVE EXPENDITURE (PENDING CAPITALISATION) II. III. INVESTMENTS CURRENT ASSETS, LOANS & ADVANCES (A) Inventories (B) Receivables (C) Cash & bank balances (D) Loans & advances LESS :CURRENT LIABILITIES & PROVISIONS (A) Current liabilities (B) Provisions 6 7 8 9 10 329.73 2402.23 525.26 344.27 3601.49 SCHEDULE AS AT 31-03-2005 AS AT 31-03-2004

1 2

22.55 720.40 742.95

32.05 3.95 662.03 698.03 296.53 87.22 844.16 383.75 8.41 1.52 6.37 1593.48 6.89 1088.67

3 4

387.08 457.08

III.

7.84 1.47

64.61 14.39 50.22 6.45 56.67 9.96

74.91 16.48 58.43 17.22 75.65 0.25 17.46 306.48 1250.44 285.32 240.32 2082.56

11 12

2039.03 38.45 2077.48

1069.73 18.46 1088.19 1524.01 994.37 0.94

NET CURRENT ASSETS IV. MISCELLANEOUS EXPENDITURE TO THE EXTENT NOT WRITTEN-OFF OR ADJUSTED 13

2.84

TOTAL Notes forming part of the accounts As per our attached report of even date For DHARMESH PARIKH & CO., Chartered Accountants D.A. PARIKH Proprietor PLACE : Ahmedabad DATE : 11 th May, 2005 43 BIRVA C. PATEL Company Secretary 20

1593.48

1088.67

For and on behalf of the Board GAUTAM S. ADANI Chairman RAJESH S. ADANI Managing Director PLACE : Ahmedabad DATE : 11 th May, 2005

Adani Exports Limited


Five Star Export House

CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2005
(Rs. in Crores) PARTICULARS A INCOME : Sales & Operating earnings Other income 14 15 15005.34 2.58 15007.92 B EXPENDITURE : Cost of materials Personnel expenses Operation & other expenses Finance Charges Depreciation Misc. expenditure written off 16 17 18 19 14341.29 15.48 434.65 70.26 2.33 0.95 14864.96 Profit for the year Before Prior Period Adjustments Add/(Less) : Prior period adjustment (net) Add : Excess provision written back Profit for the year before taxation Provision for taxation: - Current Tax [(Including Wealth tax of Rs. 0.17 Crores P.Y. (Rs. 0.03 Crores), and excess provision (net) of earlier year Rs. 4.40 Crores (P.Y. 2.32 Crores)] - Deferred Tax Profit after taxation Add : Surplus brought forward from Previous Year Profit available for appropriation APPROPRIATIONS : Interim dividend on Preference Shares Dividend on Preference Shares Proposed Dividend on Equity Shares Tax on Dividend (including surcharge) Transfer to General Reserve Balance carried to balance sheet 142.96 (0.12) 1.47 144.31 8911.21 75.20 8986.41 8415.48 12.43 344.17 66.23 3.27 0.23 8841.81 144.60 (0.11) 1.05 145.54 SCHEDULE 2004-05 2003-04

19.17

4.70

3.56 121.58 289.83 411.41

0.78 140.06 231.61 371.67

0.19 9.02 1.29 80.00 320.91 411.41

0.99 0.01 9.26 1.26 64.23 295.92 371.67 6.30 6.30

Earning per Share - Rs. 1/- each (in Rupees) - Basic - Diluted

5.49 5.47

Notes forming part of the accounts As per our attached report of even date For DHARMESH PARIKH & CO., Chartered Accountants D.A. PARIKH Proprietor PLACE : Ahmedabad DATE : 11th May, 2005

20 For and on behalf of the Board GAUTAM S. ADANI Chairman BIRVA C. PATEL Company Secretary RAJESH S. ADANI Managing Director PLACE : Ahmedabad DATE : 11 th May, 2005

44 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

SCHEDULES 1 TO 13 FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2005
(Rs. in Crores) PARTICULARS SCHEDULE : 1 SHARE CAPITAL AUTHORISED 50,00,00,000 5,00,00,000 AS AT 31-03-2005 AS AT 31-03-2004

(Previous Year 5,00,00,000) Equity Shares of Re. 1/(Previous Year Rs 10/-) each (Previous Year 5,00,00,000) Preference Shares of Rs. 10/- each

50.00 50.00 100.00

50.00 50.00 100.00 22.05 10.00 32.05

ISSUED, SUBSCRIBED & PAID-UP 22,55,39,684 (Previous Year 2,20,47,400) Equity Shares of Re. 1/(Previous Year Rs. 10/-) each NIL (Previous Year 1,00,00,000) 9.9% Cumulative Redeemable Preference Shares - Series VII of Rs. 10/- each) NOTES : (a) The face value of the equity shares have been reduced from Rs. 10/- to Re. 1/(b) Of the above Equity Shares (i) 50,65,684 (Previous Year NIL) Equity shares of Re. 1/- each were allotted as fully paid up at premium on conversion of foreign currency convertible bonds. (ii) 50,00,000 (Previous Year 5,00,000) Equity Shares of Re. 1/- (Previous Year Rs. 10/-) each were allotted as fully paid up at premium without payment being received in cash. (iii) 50,00,000 (Previous Year 5,00,000) Equity Shares of Re. 1/- (Previous Year Rs. 10/-) each were issued as Bonus Shares by capitalization of profit. (iv) 16,53,55,000 (Previous Year 1,65,35,500) Equity Shares of Re. 1/- (Previous Year Rs. 10/-) each were issued as Bonus shares by capitalization of share premium. (c) Preference Shares were redeemed in June 2004. SCHEDULE : 2 RESERVES & SURPLUS 1 GENERAL RESERVE As per last balance sheet ADD :- Transferred during the year from Profit & Loss Account ADD :- Preference Share Redemption Reserve written back ADD :- Debenture Redemption Reserve written back ADD :- Reserve under section 33AC under IT Act written back LESS :- Transferred to Profit & Loss Account in respect of bad-debts Share in General Reserve of Joint Venture 2 PREFERENCE SHARE REDEMPTION RESERVE As per last balance sheet LESS :- Transfer to General Reserve DEBENTURE REDEMPTION RESERVE As per last balance sheet LESS :-Transfer to General Reserve SHARE PREMIUM ACCOUNT As per last balance sheet ADD :- Amount received on conversion of Foreign Currency Convertible Bonds RESERVE UNDER SECTION 33AC OF INCOME-TAX ACT, 1961 : As per last balance sheet LESS :- Transferred to General Reserve EXCHANGE RESERVE SURPLUS IN PROFIT & LOSS ACCOUNT SHARE IN PROFIT & LOSS ACCOUNT OF JOINT VENTURE 10.00 10.00

22.55 22.55

327.66 80.00 10.00 5.00 68.16 354.50 -

275.13 60.00 25.00 7.50 39.97 327.66 9.86 10.00 10.00 30.00 (25.00) 5.00 9.63 43.06 9.63 7.50 7.50 1.93 320.91 3.96 292.72 3.20 720.40 662.03

5.00 5.00

9.63 33.43

6 7 8

45

Adani Exports Limited


Five Star Export House

(Rs. in Crores) PARTICULARS SCHEDULE : 3 SECURED LOANS 1 From banks - term loans a) Foreign Currency Loan (ECB) (Note - I) b) Rupee loan (Note II & III) 2 From banks - Working Capital (Note II & III) a) Foreign Currency b) Rupee loan 3 Non convertible Debentures (Note - IV) 4 Vehicle Loans (Note - V) 5 Home Loans 6 Interest accrued and due NOTES : I Above facilities are secured by Second Charge : a) Hypothecation over whole of the current assets of the Company by way of second charge. b) Equitable Mortgage over certain immovable properties belonging to the Company by way of second charge. c) Equitable Mortgage over certain immovable properties belonging to Adani Properties Pvt. Ltd. by way of second charge. d) Guaranteed by some of the Directors and their relatives in their personal capacity. e) Pledge of equity shares of some of the pro-moters and their relatives. f) Rs. 6.00 Crores secured by above covered under item 1 b) [P.Y.Rs. 12 Crores] II Above facilities are secured by : a) Hypothecation of the stocks and book debts by way of first charge ranking pari-passu among the banks. b) Tangible movable properties ranking pari-passu among the banks. c) Guaranteed by some of the Directors in their personal capacity. d) Pledge of 1,00,00,000 equity shares of Gujarat Adani Port Ltd. @ of Rs. 80/each for present outstanding of Rs. 153.00 Crores [P.Y. Rs. 156.93 Crores] e) Kindly refer Note I f) above. III Further secured by creation of Equitable Mortgage : a) Over certain immovable properties belonging to the Company. b) Over certain immovable properties belonging to Adani Properties Pvt. Ltd. IV a) 15,00,000 privately placed 14.50% secured redeemable non convertible debentures of Rs. 100/- each allotted w.e.f. 29th December 1999, were redeemable at par in three equal annual installments on 29th December 2002, 29th December 2003 & 29th December 2004 respectively, which were redeemed on respective due dates. b) The above debentures were secured by pledge of shares of some of the Promoters and their relatives and by way of mortgage and exclusive charges on some immovable properties of the Company. V Vehicles loans are secured by hypothecation of respective vehicles. SCHEDULE : 4 UNSECURED LOANS Foreign Currency Convertible Bonds (Note - I) Inter Corporate Loans Loans from Banks / Financial institutions Loans from Directors AS AT 31-03-2005 AS AT 31-03-2004

9.55 184.09 75.95 114.37 1.18 1.94 387.08

26.93 189.08 36.92 37.98 5.00 0.60 0.02 296.53

133.86 28.04 295.02 0.16 457.08

27.46 59.59 0.17 87.22

NOTE :I) In the case of FCCB, the bondholders have an option of conversion into Equity Shares at the rate of Rs.67/- per share at any time after November 8, 2004 and upto October 23, 2009. Further, the Company has an option of redemption of these bonds at any time on or after October 24, 2007, subject to certain conditions. II) Above loans from Banks / Financial Institutions are secured by Demand Promissory Note and/or Pledge of shares of some of the Promoters and their relatives and/or guaranteed by some of the Directors in their personal capacity.

46 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

SHEDULE : 5 FIXED ASSETS :


Sr. PARTICULARS No. As at 1/4/2004 5.82 18.70 0.91 7.39 1.05 3.59 2.69 6.29 46.43 71.99

(Rs. In Crores)
GROSS BLOCK DEPRECIATION NET BLOCK Additions Deductions As at As at Provided Deductions As at As at As at during the during the 31/3/2005 1/4/2004 for the during the 31/3/2005 31/3/2005 31/3/2004 year year year year 5.82 5.82 6.39 1.05 19.74 2.84 0.34 3.19 16.55 21.90 0.25 1.16 0.28 0.05 0.33 0.83 17.13 0.60 0.01 7.98 3.52 0.50 4.02 3.96 4.09 0.10 1.15 0.32 0.07 0.39 0.76 1.21 0.61 0.11 4.09 0.99 0.19 0.04 1.14 2.95 2.99 0.43 0.04 3.08 1.99 0.28 0.03 2.25 0.83 0.92 1.65 0.62 7.31 2.48 0.66 0.30 2.83 4.48 3.89 14.26 14.26 0.24 0.24 14.03 18.96 0.78 64.61 12.44 2.32 0.37 14.39 50.22 58.52 5.46 2.55 74.91 14.55 3.27 1.34 16.48 58.43 -

1 2 3 4 5 6 7 8 9

Land Building Plant & Machinery Furniture & Fixtures Electrical Fittings & Installations Office Equipments Computer Equipment Vehicles Air-craft Total Previous Year

(Rs. in Crores) PARTICULARS SCHEDULE : 6 INVESTMENTS - NON-TRADING : LONG-TERM INVESTMENTS GOVERNMENT SECURITIES (UNQUOTED) (Lodged with Government departments) - in 6 year National Saving Certificates - in Kisan Vikas Patra (Rs. 500/-) INVESTMENT IN ASSOCIATES 1) 2,600 (2600) equity shares of Adani Petronet (Dahej) Port Pvt. Ltd. of Rs. 10/- each. (Rs. 26000/-) 0.02 0.03 AS AT 31-03-2005 AS AT 31-03-2004

OTHERS (UNQUOTED) (NON TRADE) 1) 2) 3) 4) 5) 6) 7) 10 (10) equity shares of Coffee Futures Exchange Board India Ltd. of Rs. 10,000/- each 5 (5) Bond of UCO Bank of Rs. 5,00,000/- each. India Millenium Deposit (USD 1000000) 2,00,000 (Previous Year 2,00,000) full paid up Equity shares of Vishakha Polyfab Pvt. Ltd. Rs. 10/- each 20,000 (20,000) Equity Shares of KCCB of Rs. 25/- each 24,750 (NIL) Equity Shares of Adani Logistics Ltd. of Rs. 10/- each. (Goodwill Rs. 15000) I Call LLC USA 0.23 0.05 0.02 0.05 0.01 0.25 4.34 0.01 0.25 4.56 0.56

OTHERS (QUOTED) (NON TRADE) 1) 943 (NIL) Equity Shares of Punjab National Bank of Rs 10/- each 0.04 -

INVESTMENTS (CURRENT) NON-TRADE 1) 2) 3) 4) NIL (2361330.846) units of Kotak Mahindra K Liquid IP of Rs.10/- each NIL (2000000) units of Reliance Liquid Fund of Rs.10/- each 1853087.243 (6757474.249) units of UTI Mutual Liquid Fund of Rs. 10/- each 2725290.698 (NIL) J M High Liquidity Fund of Rs. 10/- each 3.00 9.96 Aggregate Book Value - Quoted - Unquoted Aggregate Market Value - Quoted 0.04 46.63 0.04 17.46 17.46 2.00 3.00 2.00 7.00

47

Adani Exports Limited


Five Star Export House

PURCHASED AND SOLD DURING THE YEAR PARTICULARS 1 2 3 4 5 6 7 8 9 10 11 12 13 RLF - TREASURY PLAN - RETAIL OPTION - GROWTH OPTION - GROWTH PLAN TEMPLELTON INDIA - TREASURY MANAGEMENT PLAN ACCOUNT - REGULAR PLAN SBI - MAGNUM - INSTITUTIONAL INCOME PLAN SBI - MAGNUM INSTA CASH FUND - CASH OPTION DSP MERRILL LYNCH LIQUIDITY FUND - GROWTH PRUDENTIAL ICICI INST LIQUID PLAN KOTAK LIQUID (INSTITUTIONAL) - GROWTH PRINCIPAL CASH MANAGEMENT FUND - LIQUIDITY OPTION - INST PLAN - GROWTH PLAN UTI LIQUID CASH PLAN REGULAR - GROWTH PLAN UTI LIQUID CASH PLAN REGULAR - GROWTH PLAN UTI LIQUID CASH PLAN INST PLAN - GROWTH PLAN UTI LIQUID CASH PLAN INST PLAN - GROWTH PLAN GFBD - GRINDLAYS FLOATING RATE - ST - INST PLAN B - DAILY DIV FACE VALUE (Rs.) 10 1000 10 10 10 10 10 10 10 1000 10 1000 10 NOS. (in crs.) 1.077 0.003 1.838 1.100 0.320 0.253 0.856 0.849 5.461 0.037 7.007 0.034 4.280 COST 14.500 5.000 19.000 16.000 5.000 4.000 11.000 9.000 57.250 40.000 73.500 54.000 43.100

(Rs. in Crores) PARTICULARS SCHEDULE : 7 INVENTORIES (AS CERTIFIED BY THE MANAGEMENT) Raw-materials Finished Goods Stores, Chemicals & Packing Materials Stock-in-process Goods-in-transit 7.89 321.62 0.22 329.73 SCHEDULE : 8 RECEIVABLES (UNSECURED, CONSIDERED GOOD) Over six months Considered good Considered doubtful Less :- Provision for doubtful debts Others, considered good 81.51 3.26 84.77 (3.26) 81.51 2,320.72 2,402.23 SCHEDULE : 9 CASH & BANK BALANCES Cash on hand [including cheques on hand] Balances with Scheduled Banks :- In Margin money account (lodged against Bank Guarantee & Letter of Credit) - In Margin money account (net of 100% Letter of Credit) - Margin money account (PCFC) - In Margin money account (net of buyers credit facility) - In Deposit Account (in foreign currency) - In Fixed Deposit account (pledged with govt. authorities) - In Current Account - In Over draft / CC Account - Bank Balance with Foreign Bank in Current Account - In EEFC Account - Unclaimed Dividend account 6.07 161.72 4.94 13.10 87.79 94.72 40.76 114.98 0.24 0.85 0.09 525.26 7.15 115.69 46.39 14.01 40.88 54.97 5.78 0.36 0.09 285.32 182.73 3.06 185.79 3.06 182.73 1067.71 1,250.44 5.57 286.91 1.78 0.30 11.92 306.48 AS AT 31-03-2005 AS AT 31-03-2004

48 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

(Rs. in Crores) PARTICULARS SCHEDULE : 10 LOANS & ADVANCES (UNSECURED, CONSIDERED GOOD) Loans Advances recoverable in cash or in kind or for value to be received Interest accrued but not due Interest accrued and due on Investments Advance payment of Income tax (including TDS of Rs. 3.52 crores, Previous Year Rs.7.16 crores) Balances with service tax authorities 5.04 258.89 43.22 0.01 36.70 0.42 344.27 SCHEDULE : 11 CURRENT LIABILITIES Sundry Creditors Other liabilities Unclaimed Dividend / Dividend payable Interest accrued but not due 1867.40 164.24 0.09 7.30 2039.03 SCHEDULE : 12 PROVISIONS Provision for taxation Provision for Leave encashment Proposed dividend Tax on dividend (Including surcharge) 26.08 1.22 9.88 1.27 38.45 SCHEDULE : 13 MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted) 1) Deferred Revenue Expenditure Less: 1/5th written off during the year 2) Preliminary Expenses Less: 1/5th amortised during the year (Rs. 59000/-) 7.24 0.69 9.27 1.26 18.46 943.86 125.35 0.09 0.43 1069.73 17.23 193.39 19.66 0.01 10.03 240.32 AS AT 31-03-2005 AS AT 31-03-2004

3.79 0.95 -

2.84

1.15 0.23 0.02 -

0.92

2.84

0.02 0.94

49

Adani Exports Limited


Five Star Export House

SCHEDULES 14 TO 19 FORMING PART OF THE CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2005
(Rs. in Crores) PARTICULARS SCHEDULE : 14 SALES & OPERATING EARNINGS Sales Export incentives Insurance Claim Received Service charges (Service Tax) Miscellaneous Operating income (TDS on service charges and misc. operating income Rs. 2.34 crores, Previous Year Rs. 1.23 crores) 14906.89 8.84 2.31 25.34 61.96 8613.58 207.23 0.12 90.28 2004-05 2003-04

15005.34 SCHEDULE : 15 OTHER INCOME Dividend (Gross) Interest on investments Profit / Loss on sale of investments (net) Profit on surrender of rights Other Income 0.16 2.43 2.58 SCHEDULE : 16 COST OF MATERIALS Raw materials consumed Opening stock ADD : Purchases during the year LESS : Closing stock ADD : Processing charges Purchase of traded goods Decrease / (Increase) in stock Opening stock of finished / traded goods Closing stock of finished / traded goods Stock-in-process Opening Stock Closing Stock 1727.00 1727.00 7.90 1719.10 35.04 1754.14 12670.66 234.42 317.93 (83.51) 14341.29 SCHEDULE : 17 PERSONNEL EXPENSES Salaries & bonus Contribution to provident & other funds Staff welfare expenses 13.84 1.02 0.62 15.48 0.13 0.30 108.55 299.13 2.95 299.94 302.89 5.57 297.32 6.24

8911.21

0.02 0.03 73.15 2.00 75.20

303.56 8302.67

(190.58)

(0.17) 8415.48

10.73 1.22 0.48 12.43

50 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

(Rs. in Crores) PARTICULARS SCHEDULE : 18 OPERATION & OTHER EXPENSES Rent Rates & Taxes Postage, telephone & telex expenses Stationery & printing expenses REPAIRS TO : Office building Office equipments Others Electric power expenses Insurance expenses Miscellaneous expenses Loss of stock due to Accident Chemicals & Consumables Payment to auditors Office expenses Directors sitting fees Loss / Profit on sale of assets (Net) Computer software Clearing & forwarding expenses (Net) Packing Materials Consumed Damages on contract settlements Supervision & testing expenses Advertisement and Selling Expenses Bad-debts and other receivable written off (net of recovery Rs 0.63 crores, Previous Year Rs 0.50 crores) Less :- Transferred from General Reserve Provision for Bad & Doubtful debts Business support services Membership & Subscription Legal & Professional Travelling & conveyance expenses 1.39 7.77 2.76 0.66 1.51 9.10 2.24 0.58 2004-05 2003-04

0.40 0.19 1.08 1.66 0.86 4.74 28.19 0.04 0.16 4.61 0.02 0.09 3.13 150.25 37.48 11.49 4.47 35.56 68.16 68.16

0.26 0.30 0.44 1.00 3.18 2.50 27.64 0.05 2.71 0.16 1.75 0.02 0.33 0.05 72.66 16.74 2.93 6.06 40.01 39.97

0.87 130.00 0.13 0.09 8.23 434.65

0.04 3.06 183.63 0.11 0.02 6.10 344.17

SCHEDULE : 19 INTEREST INTEREST EXPENSES Interest on Term Loans Interest on Debentures/Bonds Interest on Bank Borrowings & Others Less : Interest Income Interest on deposit and others (TDS Rs. 0.97 crore, Previous Year Rs. 1.88 crores) Net Interest Bank Commission / Charges Exchange rate difference (160.23) (7.90) 37.58 40.58 70.26 (43.64) 53.64 21.79 (9.20) 66.23

18.37 1.36 132.60 152.33

18.73 2.57 75.98 97.28

51

Adani Exports Limited


Five Star Export House

SCHEDULE: 20 NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS

A)

SIGNIFICANT ACCOUNTING POLICIES ADOPTED BY THE COMPANY IN PREPARATION AND PRESENTATION OF CONSOLIDATED ACCOUNTS : 1. Basis of accounting : The financial statements are prepared in accordance with the requirement of the Companies Act, 1956, including the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India, as referred to in Section 211 (3C) of the Companies Act, 1956, under historical cost convention on an accrual basis. 2. Principles of consolidation: a) The consolidated financial statements have been prepared in accordance with Accounting Standard 21(AS 21) on Consolidated Financial Statements, Accounting Standard 23(AS 23) on Accounting for Investments in Associates in Consolidated Financial Statements issued by the Institute of Chartered Accountants of India and on the basis of the separate audited financial statements of Adani Exports Limited (AEL) its subsidiaries and associates. Reference in the notes to Group shall mean to include AEL, its subsidiaries and associates consolidated in these financial statements unless otherwise stated. The consolidated financial statements have been prepared on the following basis. i) The financial statements of the Group are combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions resulting in unrealised profits or losses in accordance with Accounting Standard (AS) 21. In case of associates where the Group directly or indirectly holds more than 20% of equity, investments in associates are accounted for using equity method in accordance with Accounting Standard (AS) 23 Accounting for Investments in Associates in Consolidated Financial Statements issued by the Institute of Chartered Accountants of India. The difference between the cost of investment in the subsidiaries / Associates over the net assets at the time of acquisition of the investment in the subsidiaries / Associates is recognised in the financial statements as Goodwill or Capital Reserve as the case may be. The consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and necessary adjustments required for deviations if any have been made in the consolidated financial statements. Investment in Adani Wilmar Limited, a Joint venture Company, whose financial statements reflected Group Share of Total Assets of Rs. 168.41 Crores as at 31 st March, 2004 and Group Share of Sales Rs.514.53 crores, disposed off during the year, has not been included in preparation of the current year consolidated financial statements.

b)

ii)

iii)

iv)

v)

The list of companies included in consolidation, relationship with Adani Exports Limited and Adani Exports Limiteds shareholding therein is as under: Name of Company Adani Adani Adani Adani Adani Global Ltd. (AGL) Global FZE (AGFZE) Global Pte Ltd. (AGPTE) Logistics Ltd. Petronet (Dahej) Port Pvt. Ltd. Country of Incorporation Mauritius U.A.E. Singapore India India Relationship Shareholding Reporting date Subsidiary Subsidiary Subsidiary Associate Associate 100% 31-12-04 100% by AGL 31-12-04 100% by AGL 31-12-04 49.50% 31-03-05 26% 31-03-05

The list of companies included in consolidation in the Previous Year, relationship with Adani Exports Limited and Adani Exports Limiteds shareholding therein is as under: Name of Company Adani Adani Adani Adani Adani 3. Global Ltd.(AGL) Global FZE (AGFZE) Global Pte Ltd. (AGPTE) Petronet (Dahej) Port Pvt Ltd. Wilmar Ltd. (AWL) Country of Incorporation Mauritius U.A.E. Singapore India India Relationship Shareholding Reporting date Subsidiary Subsidiary Subsidiary Associate Joint-venture 100% 31-12-03 100% by AGL 31-12-03 100% by AGL 31-12-03 26% 31-03-04 28.18% 31-03-04

SIGNIFICANT ACCOUNTING POLICIES: a) SYSTEM OF ACCOUNTING The financial statements are prepared under the historical cost convention, on the accrual basis of accounting in accordance with Companies Act 1956 and in accordance with the accounting principles generally accepted in India (Indian GAAP) and comply with the Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) to the extent applicable.

52 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

b)

USE OF ESTIMATES The preparation of financial statements in confirmity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

c)

INVENTORIES i) Inventories are valued at lower of cost or Net Realisable value. ii) The Custom duty in respect of Closing Inventory of Finished goods is included as cost of inventory. iii) The basis of determining cost for various categories of inventories are as follows: a) Raw material : First in First out (FIFO). b) Traded / Finished goods : First in First out (FIFO) / Specific identification of their individual costs as the case may be. c) Licenses on hand : Specific identification of their individual costs. d) Packing Materials : First in First out (FIFO). MATERIAL EVENTS Material events occurring after the balance sheet date are taken into cognizance. CONTINGENT LIABILITIES These are disclosed by way of notes on accounts. Provision is made in accounts in respect of those contingences, which are likely to materialize into liabilities after the year end, till the finalisation of accounts and have material effect on the position stated in the Balance Sheet.

d) e)

f)

PRIOR PERIOD ITEMS Prior period expenses / income is accounted under the respective heads. Material items, if any, are disclosed separately by way of note.

g)

DEPRECIATION i) ii) iii) Depreciation on Fixed Assets is provided on straight-line method at rates and in the manner specified in Schedule XIV to the Companies Act, 1956 read with the relevant circulars issued by the Department of Company Affairs. Depreciation on Assets acquired / disposed off during the year is provided on pro-rata basis with reference to the date of addition/disposal. Any expenditure in respect of assets, the ownership of which would not vest with the Company, are charged off to revenue in the year of incurrence. Sales of goods is recognised on shipment or despatch to customer sales and net of Sales-tax and return. Dividend income from investments is recognised when the Companys right to receive payment is established. Income from services rendered is accounted for when the work is performed. Interest revenues are recognised on time proportion basis taking into account the amount outstanding and the rate applicable.

h)

REVENUE RECOGNITION i) ii) iii) iv)

i)

FIXED ASSETS Fixed assets are stated at cost of acquisition or construction. They are stated at historical cost less accumulated depreciation.

j)

FOREIGN CURRENCY TRANSACTIONS i) Initial Recognition Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. ii) Conversion At the year-end, monetary items denominated in foreign currencies, other than those covered by forward contracts, are converted into rupee equivalents at the year end exchange rates. iii) Exchange Differences All exchange differences arising on settlement and conversion on foreign currency transaction are included in the Profit and Loss Account. iv) Forward Exchange Contracts In respect of transactions covered by forward exchange contracts, the difference between the forward rate and the exchange rate at the date of the transaction is recognised as income or expense over the life of the contract.

k)

INVESTMENTS i) Current investment are carried at the lower of cost and quoted / fair value, computed category wise. Long term Investments are stated at cost. Provision for diminution in the value of long-term Investments is made only if such a decline is other than temporary in the opinion of the management.

53

Adani Exports Limited


Five Star Export House

ii) l)

Investment in shares of foreign subsidiary Company is expressed in Indian Currency at the rates of exchange prevailing at the time when the investment was made.

RETIREMENT BENEFITS i) ii) Provident Fund and Pension Fund: The Company contributes towards provident and pension fund which is administered by Central Government and are charged against revenue every year. Gratuity and Superannuation Fund: Liabilities for payment of Gratuity & Super Annuation to employees are covered through Group Gratuity & Super Annuation Scheme of Life Insurance Corporation of India and are charged against revenue every year. Leave Encashment: The Company has provided the liabilities pertaining to accrued leave encashment as at the year end in its books of accounts on the basis of the actuarial valuers certificate.

iii) m)

BORROWING COSTS Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

n)

SEGMENT ACCOUNTING Accounting Standards Interpretation (ASI) 20 dated 14 th February, 2004, issued by the Accounting Standards Board of the Institute of Chartered Accountants of India, on AS 17, Segment Reporting clarifies that in case, by applying the definitions of business segment and geographical segment given in AS 17, it is concluded that there is neither more than one business segment nor more than one geographical segment, segment information as per AS 17 is not required to be disclosed.

o)

RELATED PARTY TRANSACTIONS Disclosure of transactions with Related Parties, as required by Accounting Standard 18 Related Party Disclosures has been set out in a separate statement annexed to this Schedule. Related parties as defined under clause 3 of the Accounting Standard have been identified on the basis of representations made by key managerial personnel and information available with the Company.

p)

LEASES The Companys significant leasing arrangements are in respect of operating leases for premises (residential, office, stores, godowns, etc.) and land. The leasing arrangements which are not cancellable range between 11 months and five years generally, and are usually renewable by mutual consent on agreed terms. The aggregate lease rentals payable are charged as rent including lease rentals.

q)

EARNING PER SHARE The Company reports basic and diluted earnings per share (EPS) in accordance with Accounting Standard-20 issued by the Institute of Chartered Accountants of India. The Basic EPS has been computed by dividing the income available to equity shareholders by the weighted average number of equity shares outstanding during the accounting year. The Diluted EPS have been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at the end of the year.

r)

DEFERRED TAXATION In accordance with Accounting Standard 22 Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India, the deferred tax for timing differences between the book and tax profits for the year is accounted by using the tax rates and laws that have been enacted or substantively enacted as of the Balance Sheet Date. Deferred Tax assets arising from timing differences are recognised to the extent there is virtual certainty that the assets can be realised in future. Net outstanding balance in Deferred tax account is recognized as deferred tax liability / asset. The deferred tax account is used solely for reversing timing difference as and when crystallised.

s)

COMMODITY HEDGING TRANSACTIONS The commodity hedging contracts are accounted on the date of their settlement & realised gain / loss in respect of settled contracts are recognised in the Profit and Loss account, together with the underlying transactions.

t)

ACCOUNTING OF CLAIMS i) ii) Claims received are accounted at the time of lodgement depending on the certainty of receipt and claims payable are accounted at the time of acceptance. Claims raised by Government authorities regarding taxes and duties, which are disputed by the Company, are accounted based on legality of each claim. Adjustments, if any are made in the year in which disputes are finally settled.

54 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

u)

EXPORT INCENTIVES Export benefits under various scheme announced by the Central Government under Exim Policy are accounted on accrual basis to the extent considered receivable depending on the certainty of receipt.

v)

PROPOSED DIVIDEND Dividend proposed by the Directors is provided for in the books of account pending approval at the Annual General Meeting.

w)

CAPITAL WORK-IN-PROGRESS Advances paid towards the acquisition of fixed assets, and the cost of assets not put to use before the year ended, are disclosed under capital work-in-progress.

x)

INSURANCE CLAIMS Insurance and other claims to the extent considered recoverable are accounted for in the year of claim based on the amount assessed by the surveyor. However, claims and refunds whose recovery cannot be ascertained with reasonable certainty, are accounted for on acceptance/actual receipts basis.

y)

DOUBTFUL DEBTS/ADVANCES Provision is made in the accounts for Debts / Advances which in the opinion of the management are considered doubtful of recovery.

z)

TAXATION Provision for taxation has been made in accordance with the Income Tax laws prevailing for the relevant assessment years.

aa)

MISCELLANEOUS EXPENDITURE Revenue expenditure incurred, the benefit of which extends over a period of time, are deferred and amortized over a period of three to five years commencing from the year the resource / facility gets fully functional in an integral way and the corresponding benefit starts accruing to the business.

bb)

OTHER SIGNIFICANT ACCOUNTING POLICIES These are set out in the notes to accounts under Statement of Accounting Policies of the financial statements of the Company, AGL, AGFZE & AGPTE.

(B)

NOTES ON ACCOUNTS:1. In case of AGFZE, AGPTE and AGL, the summarized revenue and expenses transactions at the year end reflected in Profit & Loss Account have been translated into Indian Rupees at an average of monthly exchange rate. The assets and liabilities in the Balance Sheet have been translated into Indian Rupees at the closing exchange rate at the year end. The resultant translation exchange, gain / loss has been disclosed as Exchange Reserves in Reserves and Surplus. 2. Contingent liabilities not provided for (Rs. in Crores) PARTICULARS a) b) Claims against the Company not acknowledged as debts In respect of Corporate Guarantee given:i. To Companies under the same Management ii. For obligations to other parties Bills of Exchange Discounted Demand against the Company not admitted as debts regarding sales tax against which appeals are pending In respect of bank guarantees given to Government agencies. Letter of Credit AS AT 31-03-2005 14.44 108.11 88.26 961.27 14.21 4.07 48.61 AS AT 31-03-2004 36.95 213.86 337.59 311.04 1.05 5.49 52.64

c) d) e) f) g)

Certain claims / show cause notices disputed have neither been considered as contingent liabilities nor acknowledged as claims based on the opinions obtained from prominent legal counsels for which amount is unascertainable.

3.

Disclosure as required by Accounting Standard 19, Leases issued by the Institute of Chartered Accountants of India are given below: Being the Company is lessee: (i) The Companys significant leasing arrangements are in respect of godowns / residential / office premises (Including furniture and fittings therein, as applicable). The aggregate lease rental payable is charged to Profit and Loss Account as Rent in Schedule 18. (ii) The Leasing arrangements, which are cancelable, range between 11 months and 5 years. They are usually renewable by mutual consent on mutually agreeable terms. Under these arrangements, generally refundable interest free deposits have been given.

55

Adani Exports Limited


Five Star Export House

4.

Related Party Disclosure (As identified by the Management) i) Name of related parties & description of relationship A Associate Entities Adani Agrifresh Ltd. Adani Agro Pvt. Ltd. Adani Chemicals Ltd. Adani Logistics Ltd. Adani Petronet (Dahej) Port Pvt Ltd. Adani Port Infrastructure Ltd. Adani Port Ltd. Adani Textiles Industries Adani Wilmar Ltd. B2C India Ltd. Gujarat Adani Energy Ltd. Gujarat Adani Infrastructure Pvt. Ltd. Gujarat Adani Port Ltd. Gujarat State Exports Corporation Ltd. I Call India Ltd. Inter Continetal (India) I-Gate India Pvt. Ltd. Komal Marketing Pvt Ltd Komal Infotech Pvt Ltd Mundra Special Economic Zone Ltd Shanitkrupa Estates Pvt. Ltd. Shantivan B Key Management Personnels Shri Gautam S. Adani Shri Rajesh S. Adani Shri Vasant S. Adani C Relatives Vasant S. Adani Family Trust Vinod S.Adani ii) Nature & Volume of Transaction with Related Parties Particulars
1 2 3 4 5 6 7 8 Sales (Net of Return) Purchase ( Net of Return) Sale of Investment Purchase of Fixed Asset Sale of Fixed Assets Interest - received / (paid) Dividend received Funds given [ includes investment in preference shares/equity participation/ business arrangement ] Funds received [ including redemption of preference share/business arrangement ] Service rendered Service availed Rent paid Rent received Remuneration Guarantee & Collateral securities (Outstanding facility as on 31-03-2005) Balance Outstanding (Due From) as 31st March 2005 (Due To)

(Rs. in Crores) Associate Entities


33.20 0.88 63.39 0.13 12.88 93.71 3.92 0.03 0.26 0.27 1.09 40.78 278.20 68.22 167.81 1.52 2.00 124.62 29.38 0.04 0.24 0.04 130.73 249.51 13.52 14.75 108.01

Jt Control Key mngt Company Personnels


17.70 56.27 0.01 0.17 44.97 49.97 4.35 1.36 0.04 185.90 3.11 1.44 -

Relatives
1.89 0.02 -

9 10 11 12 13 14 15 16

56 2004Annual Report 2004 -05

Adani Exports Limited


Five Star Export House

5.

Earning Per Share Particulars Net Profit after Tax Provision (Rs. in Crores) Less: Preference Dividend including tax thereon (Rs. in Crores) Net Profit after tax available for Equity Shareholders (Rs. in Crores) Number of shares used in computing Earning Per Share Basic Diluted Earning Per Share (Equity Shares, face value Rs.1/-) Basic (in Rs.) Diluted (in Rs.) Year ended 31-03-2005 121.58 0.22 121.36 220926086 221757733 5.49 5.47 Year ended 31-03-2004 140.06 1.12 138.94 220474000 220474000 6.30 6.30

Dilutive potential equity shares are those which are deemed for the purpose of the computation to have been issued for no consideration. During the year, face value of the equity shares have been reduced from Rs.10/- to Re.1/-, accordingly the calculation of basic and diluted earning per share is adjusted for the year ended March 31, 2004 based on the new number of shares as per para 44 of Accounting Standard 20. 6. a) Deferred Tax As At 31-03-2005 Deferred Tax Liability on account of (i) Depreciation (ii) Deferred Revenue Expenditure Total Deferred Tax Assets on Account of (i) Miscellaneous Expenditure (ii) Brought forward capital loss (iii) Leave Encashment (iv) Other Total Net Deferred Tax Liability b) 7. 6.31 1.26 7.57 0.12 0.10 1.22 6.36 As At 31-03-2004 8.41 8.41 0.11 0.03 0.28 1.10 1.52 6.89

In accordance with Accounting Standard 22, the deferred tax liability of 3.56 Crores (Previous Year liability of Rs. 0.78 Crores) for the year has been recognised in the Profit & Loss Account.

Previous Years figures have been regrouped wherever necessary to confirm to this years classification.

Signature to Schedules 1 to 20

For and on behalf of the Board GAUTAM S. ADANI Chairman

PLACE : Ahmedabad DATE : 11 th May, 2005

BIRVA C. PATEL Company Secretary

RAJESH S. ADANI Managing Director

57

Adani Exports Limited


Five Star Export House

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2005
(Rs. in Crores) PARTICULARS
A CASH FLOW FROM OPERATIONS Net Profit before tax & extraordinary items Adjustment for : Depreciation Income from investments Loss on sale of investment Profit on sale of investment Profit on sale of assets Loss on sale of fixed assets Provision for Bad Debts Deferred Revenue Expenditure Interest Expense Interest income Operating Profit before working capital changes Adjustment for: Trade & other receivables Inventories Loans & Advances Trade Payables Cash generated from operations Direct tax (paid) / refund Net cash from operating activities Cash Flow from Investing Activities Additions to fixed assets Additions to work in progress Sale of fixed assets Deferred Revenue Expenditure Sale of Investments Purchase of Investments Realisation of Short Term Investments (Net) Income from Investments Interest received Net cash used in Investing Activities Cash Flow from Financing Activities Conversion of 1% Foreign Currency Converible Bonds in to Equity Shares at a Premium (PY Share Application Money) Redemption of preference shares Proceeds from working capital borrowings Proceeds from long term borrowings Repayment of long term borrowings Proceeds from short term borrowings Interest paid Dividend paid Others Exchange reserve Adjustments for Subsidiary and Joint Venture Net lncrease/(Decrease) in cash & cash equivalents Cash & cash equivalent at the beginning of the year (Net of Share in Joint Venture Rs. 32.97 crores) Cash & cash equivalent as at 31/03/2005 9.21 265.91 264.35 530.26 2.53 (6.68) 141.59 155.73 297.32

2004-05
144.31 2.33 (0.16) (0.11) 0.20 1.25 0.95 152.33 (160.23) (3.44) 140.87 (1234.10) (95.21) (64.41) 1065.91 (327.81) (186.94) (28.30) (215.24) (18.96) (4.05) 0.32 (2.64) (0.29) 0.16 136.52 111.06 33.94 (10.00) 141.99 246.20 (132.49) 236.00 (145.30) (9.46) 360.88

2003-04
145.54 3.27 (0.05) 63.81 (136.96) (2.03) 0.36 3.06 0.23 97.28 (43.64) (14.67) 130.87 (186.88) (174.93) (19.53) 434.33 52.99 183.86 0.14 184.00 (5.45) (12.78) 2.88 (1.18) 162.62 (69.73) 0.16 0.05 34.60 111.17 3.95 (218.67) 219.59 (94.96) 48.72 (100.43) (7.62) (149.42)

Notes : 1 The above cash flow statement has been prepared under the Indirect Method set out in Accounting Standard (AS - 3) on Cash Flow Statement issued by The Institute of Chartered Accountants of India. 2 Prior Year Comparatives have been reclassified to confirm with current years presentation, where ever applicable. 3 Cash and Cash equivalents includes Rs. 308.40 crores (Previous Year Rs. 217.06 Crores). which are not available for use by the Company (refer schedule 9 to accounts) 4 As due to disinvestment of all the shares in joint venture, adjustments relating to the difference arising on account of differntial block of assets, differential balance of Profit & Loss account, differential balance of Investments and differential balance of net current assets relating to joint venture of the Company considered for its consolidated financial statements are adjusted in respective items in a consolidated statement of cash flow for the year ended 31st March 2005. 5 Short Term Investments of Rs. 5 crores (Previous Year Rs. 12 crores) included in Cash and Cash equivalents.

As per our attached report of even date For DHARMESH PARIKH & CO., Chartered Accountants D.A. PARIKH Proprietor PLACE : Ahmedabad DATE : 11th May, 2005 BIRVA C. PATEL Company Secretary

For and on behalf of the Board GAUTAM S. ADANI Chairman RAJESH S. ADANI Managing Director PLACE : Ahmedabad DATE : 11 th May, 2005 58 2004Annual Report 2004 -05

Adani Global Limited


(A Subsidiary Company of Adani Exports Limited)

DIRECTORS REPORT
To, The Shareholders ADANI GLOBAL LIMITED Prot Louis, Mauritius The directors are pleased to present their report together with the audited financial statements of the company for the year ended 31 st December 2004. PRINCIPAL ACTIVITY The principal activity of the Company is that of international trading and investments holding. RESULTS AND DIVIDEND The results for the year are shown after auditors report. The directors recommend the payment of a dividend of USD 98,093 for the year under review (2003: USD 95,368). STATEMENT OF DIRECTORS RESPONSIBILITIES IN RESPECT OF FINANCIAL STATEMENTS The directors arc responsible for the preparation of financial statements which comply with the Companies Act 2001. In preparing those financial statements, the directors have: selected suitable accounting policies and then applied them consistently; made judgements and estimates that are reasonable and prudent, stated whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements, and prepared the financial statements on the going concern basis

They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. By order of the Board

DATE : 10th May, 2005

JAYCHUND JINGREE DIRECTOR

59

Adani Global Limited


(A Subsidiary Company of Adani Exports Limited)

AUDITORS REPORT
To the Members of ADANI GLOBAL LIMITED We have audited the financial statements of Adani Global Limited Ltd for the year ended 31 December 2004. This report is made solely to the Companys shareholders, as a body, in accordance with section 205 of the Companies Act 2001. Our audit work has been undertaken so that we might state to the Companys shareholders those matters we are required to state to them in an auditors report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Companys shareholders, as a body, for our audit work, for this report, or for the opinions we leave formed. Directors responsibilities The directors are responsible for the preparation of financial statements which comply will the Companies Act 2001. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Auditors responsibilities It is our responsibility to form an independent opinion, based on our audit, on those Financial statements and to report our opinion to you. Basis of opinion We conducted our audit in accordance with International Standards on Auditing. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by directors in the preparation of financial statements, and of whether the accounting policies are appropriate to the Companys circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatements. In forming our opinion, we also evaluated the overall adequacy of the presentation of information in the financial statements. We believe that our audit provides a reasonable basis for our opinion. We have no relationship with, or interests in the Company other than in our capacity as auditors and tax advisors. Opinion We have obtained all the information and explanations that we have required. In our opinion proper accounting records have been kept by the Company as far as it appears from our examination of those records; and the financial statements give a true and fair view of the financial position of the Company as at 31 December 2004, and the results of its operation and cash flows for the year then ended, and comply with the Companies Act 2001 and International Financial Reporting Standards.

KPMG Public Accountants Port Louis DATE : 10th May, 2005

60 2004Annual Report 2004 - 05

Adani Global Limited


(A Subsidiary Company of Adani Exports Limited)

BALANCE SHEET AS AT 31ST DECEMBER, 2004


(Rs. in Crores) PARTICULARS A SOURCES OF FUNDS : I. SHAREHOLDERS FUND (A) Share capital (B) Reserves & surplus II. LOAN FUNDS : TOTAL B APPLICATION OF FUNDS : I. FIXED ASSETS II. INVESTMENTS III. CURRENT ASSETS, LOANS & ADVANCES (A) Cash & Bank Balances (B) Loans & Advances SCHEDULE AS AT 31-12-2004 AS AT 31-12-2003

1 2

41.26 (0.52) 40.74 40.74

44.14 1.58 45.72 45.72

3 4 5 0.04 2.24 2.28

40.32 0.03 9.64 9.67

42.08

LESS :CURRENT LIABILITIES & PROVISIONS (A) Current Liabilities (B) Provisions

6 7

1.41 0.45 1.86

5.56 0.47 6.03 0.42 40.74 3.64 45.72

NET CURRENT ASSETS TOTAL Notes forming part of the accounts 10

For and on behalf of the Board For DHARMESH PARIKH & CO., Chartered Accountants D.A. PARIKH Proprietor PLACE : Ahmedabad DATE : 11 th May, 2005 JAYECHUND JIGNGREE Director

SUSHIL KUMAR JOGOO Director

61

Adani Global Limited


(A Subsidiary Company of Adani Exports Limited)

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 2004
(Rs. in Crores) PARTICULARS A INCOME : Sales and Operating Earnings SCHEDULE 8 31-12-2004 0.84 0.84 B EXPENDITURE : Operation and Other Expenses 31-12-2003 1.17 1.17

0.04 0.04

0.03 0.03 1.14 0.03 1.11 0.92 2.03

Profit for the year before taxation Provision for taxation: - Current Tax Profit after taxation Add : Surplus Brought Forward From Previous Year Profit available for appropriation APPROPRIATIONS : Dividend on Preference Shares Balance carried to balance sheet

0.80 0.03 0.77 1.55 2.32

0.43 1.89 2.32

0.44 1.59 2.03

Earning per Share-of US $100 each (in Rupees) - Basic & Diluted - Annualised Notes forming part of the accounts 10

54.21 54.21

104.85 104.85

For and on behalf of the Board For DHARMESH PARIKH & CO., Chartered Accountants D.A. PARIKH Proprietor PLACE : Ahmedabad DATE : 11th May, 2005 JAYECHUND JIGNGREE Director

SUSHIL KUMAR JOGOO Director

62 2004Annual Report 2004 - 05

Adani Global Limited


(A Subsidiary Company of Adani Exports Limited)

SCHEDULES 1 TO 5 FORMING PART OF THE BALANCE SHEET AS AT 31ST DECEMBER, 2004


(Rs. in Crores) PARTICULARS SCHEDULE : 1 SHARE CAPITAL AUTHORISED 64000 Ordinary Shares of USD 100 each 36000 10 % Redeemable Prefrence Shares of USD 100 each AS AT 31-12-2004 AS AT 31-12-2003

30.89 28.92 59.81

30.89 28.92 59.81 30.89

ISSUED, SUBSCRIBED & PAID-UP 64000 Ordinary Shares of USD 100 each Of the above 64000 (Previous year 64000) Shares are held by Adani Exports Limited, a holding Company 25590 (Previous year 32790) 10% Redeemable Preference Shares of USD 100 each. Of the above 25590 (Previous year 32790) Shares are held by Adani Exports Limited, a holding Company 16050 Redeemable Preference Shares privatlely placed with holding Company, redeemable at par in 5 equal instalments commenced from 28/12/03 19950 Redeemable Preference Shares privatlely placed with holding Company, redeemable at par in 5 equal instalments commenced from 05/08/04

30.89

10.37

13.25

41.26 SCHEDULE : 2 RESERVES & SURPLUS Exchange Reserve Translation Reserve Surplus in profit & loss account

44.14

(0.08) (2.33) 1.89 (0.52)

(0.02) 0.01 1.59 1.58

SCHEDULE : 3 INVESTMENTS (LONG-TERM) (NON TRADING) INVESTMENT IN SUBSIDIARY COMPANIES 1) 18 Equity Shares of Adani Global FZE of AED 10,00,000 each 2) 88,50,000 equity share of Adani Global Pte. Ltd. (Singapore) of USD 1 each. OTHERS (UNQUOTED) 1) I Call US LLC

21.32 18.77 0.23 40.32

22.38 19.70 42.08

SCHEDULE : 4 CASH & BANK BALANCES Cash & Bank Balances

0.04 0.04

0.03 0.03

SCHEDULE : 5 LOANS & ADVANCES (UNSECURED, CONSIDERED GOOD) Loan to Subsidiary Advances Recoverable in Cash or Kind or for Value to be received Interest

1.44 0.43 0.37 2.24

7.38 1.55 0.71 9.64

63

Adani Global Limited


(A Subsidiary Company of Adani Exports Limited)

SCHEDULES 6 TO 9 FORMING PART OF THE BALANCE SHEET AS AT 31ST DECEMBER, 2004


(Rs. in Crores) PARTICULARS SCHEDULE : 6 CURRENT LIABILITIES Sundry Creditors Other Liabilities 1.40 0.01 1.41 SCHEDULE : 7 PROVISIONS Provision for Taxation Proposed Dividend 0.02 0.43 0.45 SCHEDULE : 8 SALES & OPERATING EARNINGS Miscellaneous Income 0.03 0.44 0.47 5.54 0.02 5.56 AS AT 31-12-2004 AS AT 31-12-2003

0.84 0.84

1.17 1.17

SCHEDULE : 9 OPERATION & OTHER EXPENSES Miscellaneous Expenses Payment to Auditors Membership & Subscription Legal & Professional

0.01 0.01 0.01 0.01 0.04

0.01 0.01 0.01 0.03

64 2004Annual Report 2004 - 05

Adani Global Limited


(A Subsidiary Company of Adani Exports Limited)

SCHEDULE: 10 NOTES FORMING PART OF THE ACCOUNTS A) GENERAL INFORMATION The financial statements of Adani Global Ltd for the accounting year 31st December 2004, being a Company registered in the Republic of Mauritius, are audited by KPMG, Public Accountants, Mauritius, and we have been furnished with their audit report dated 10th May, 2005. The financial statements of Adani Global Ltd. are presented in Indian Rupees duly converted, on the basis of aforesaid audit report to comply with the requirements of Section 212 of the Companies Act, 1956. The Company was incorporated as a Private Limited Company in the Republic of Mauritius on 21 January 1997 and was granted a Category 1 Global Business Licence on 28th January 1997. The principal activity of the Company is that of international trading and investments holding. The Company, as a holder of a Category 1 Global Licence under the Companies Act 2001 and the Financial Services Development Act 2001, is required to carry on its business in a currency other than the Mauritian Rupee. The Company is a wholly owned subsidiary of Adani Exports Limited. The accounts have been prepared and audited for the purpose of attachment to the accounts of the Holding Company to comply with the provisions of the Indian Companies Act, 1956. Adani Global Ltd. is not a Company as defined in the Companies Act, 1956. The auditors have not included the matters specified in paragraph 4 & 5 of Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, as the order is applicable only to the Company in terms of clause 2 of Paragraph 1. The accounts have been prepared for the purpose of attachment to the accounts of the ultimate holding Company to comply with the provisions of the Indian Companies Act, 1956. B) SIGNIFICANT ACCOUNTING POLICIES adopted by the Company in the preparation and presentation of the Accounts:a) SYSTEM OF ACCOUNTING i) ii) iii) b) The accounts are prepared on the historical cost basis and on the accounting principles of a going concern. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles. All expenditure and income to the extent considered payable and receivable respectively are accounted for on accrual basis except those with significant uncertainties.

CONVERSION TO INDIAN RUPEES For the purpose of accounts, all income and expense items are converted at the average rate of exchange applicable for the year. All assets and liabilities are translated at the closing rate as on the Balance Sheet date. The exchange difference arising out of the year-end translation is debited or credited to Translation Reserve. The Share Capital is carried forward at the rate of exchange prevailing on the transaction date. The resulting exchange difference on account of translation at the year end are transferred to Translation Reserve Account and the said account is being treated as Reserve and Surplus.

c)

INVESTMENT IN SUBSIDIARIES The company does not prepare consolidated financial statements and in accordance with IAS 27, has elected to report investments in subsidiaries at cost.

d)

INVESTMENT IN ASSOCIATES The company does not prepare consolidated financial statements and in accordance with IAS 28, has elected to report investment in associate at cost.

e)

IMPAIRMENT OF ASSETS Assets are reviewed for impairments whenever events or changes in circumstances indicate that the recoverable amount of assets is below the carrying amount. In case that the carrying value of an asset exceeds its recoverable amount, the Company recognise the impairment losses in the income statement

f)

REVENUE RECOGNITION Revenue represents dividend and interest on loan receivable for the year. Revenue is recognised as follows: Dividends When the shareholders right to receive payment is established. Interests As they accrue unless when collectibility is in doubt.

g)

CASH AND CASH EQUIVALENTS Cash comprises cash at bank. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

h)

RELATED PARTIES Related parties are individuals and companies where the individual or Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions.

65

Adani Global Limited


(A Subsidiary Company of Adani Exports Limited)

i)

(B)

TAXATION The Company is subject to income tax in Mauritius at the rate of 15%. It is however, entitled to a tax credit equivalent to the higher of the foreign tax paid and 80% of the Mauritius tax on its foreign source income. NOTES ON ACCOUNTS:1. The transactions are in local currency United States Dollars(USD), which have been converted into Indian Currency (Indian Rupees) for reporting and the rate applied is as per para (b) of the significant accounting policies. 2. Financial instruments and associated risks Fair value Investments are valued as described in note 2. The Companys assets and liabilities include cash and cash equivalents, other receivables and other payables, which are realised or settled within a short-term period. The carrying amounts of these assets and liabilities approximate their fair values. Associated risks The Companys activities expose it to the various types of risk, which are associated with the financial instruments and markets in which it invests. The following summary is not intended to be a comprehensive summary of all risks: Market risk Market risk represents the potential loss that can be caused by a change in the market value of the financial instrument. The Companys exposure to market risk is determined by a number of factors, including interest rates, foreign currency exchange rates and market volatility. Credit risk Credit risk represents the potential loss that the Company would incur if counter parties fail to perform pursuant to the terms of their obligations to the Company. The Company limits its credit risk by carrying out transactions mainly with its related Companies. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the Balance Sheet. Currency risk The Companys investments are mainly denominated in United Arab Emirates Dinar (AED) and Singapore Dollar (SGD). Consequently, the Company is exposed to the risk that the exchange rate of the US dollar relative to the AED and SGD may change in a manner, which has a material effect on the reported values of the Companys assets and liabilities, which are denominated in AED and SGD respectively. 3. Financial instruments and associated risks (continued) Currency profile (Rs. In crores) Financial Assets 2004 INR USD AED SGD 0.30 20.58 21.73 42.61 Financial Liabilities 2004 INR 1.43 0.43 1.86 Financial Assets 2003 INR 0.03 28.91 22.81 51.75 Financial Liabilities 2003 INR 0.05 5.98 6.03

4.

Related Party Transactions During the year under review, the Company entered into the following related party transactions. All the transactions were on an arms length basis. (Rs. In crores) Name of Company Nature of relationship Nature of Transactions Loan interest receivable Loan received Dividends receivable Dividends received Loan and interest recovered Dividends recovered Dividend payable Dividend paid Payable for redemption of shares Loan, interest and dividend receivable Loan payable Payable for redemption of shares Dividend payable 2004 0.37 2.45 0.43 0.41 6.52 1.54 0.43 0.41 1.40 2.23 1.40 0.43 2003 0.71 3.35 0.44 0.44 1.81 9.64 5.98 0.44 Transactions during the year: Adani Global FZE Subsidiary Adani Global FZE Subsidiary Adani Global FZE Subsidiary Adani Global FZE Subsidiary Adani Global FZE Subsidiary Adani Global FZE Subsidiary Adani Exports Limited Parent Adani Exports Limited Parent Adani Exports Limited Parent Balances outstanding at 31 December: Adani Global FZE Subsidiary Adani Global FZE Subsidiary Adani Exports Limited Parent Adani Exports Limited Parent

66 2004Annual Report 2004 - 05

Adani Global Limited


(A Subsidiary Company of Adani Exports Limited)

5.

Earning Per Share Particulars Year ended 31st December, 2004 0.77 0.43 0.34 64000 52.97 Year ended 31st December, 2003 1.11 0.44 0.67 64000 104.85

Net Profit after Tax Provision (Rs. in Crores) Less:Preference Dividend including tax thereon (Rs. in Crores) Net Profit after tax available for Equity Shareholders (Rs. in Crores) Weighted Average No. of Equity Shares of USD 100 each outstanding during the year Basic Earning per Share (in Rs.) 6. 7.

During the year under review the Company had invested Rs.0.24 crores in I Call USA LLC being 50% interest in such Company. However the said Company had not yet started its commercial operations. Previous years figures have been regrouped wherever necessary to confirm to this years classification.

Signature to Schedule 1 to 10 For and on behalf of the Board JAYECHUND JIGNGREE Director

SUSHIL KUMAR JOGOO Director

67

Adani Global Limited


(A Subsidiary Company of Adani Exports Limited)

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DECEMBER, 2004
(Rs. in Crores) PARTICULARS A Cash flows from Operating Activities Net Profit Before Taxation Adjustment for : Interest Receivable Profit from Operations Before Working Capital Changes Decrease in Other Payables Increase in Other Receivables Cash generated from operations Taxation paid Net Cash Used in operating activities B Cash Flows From Investing Activities Acquisition of Investments Interest Recieved Net Cash used in investing activities C Cash flows from financing activities Proceeds from Loan From Subsidiary Redemption of Shares Dividend paid Net Cash flows from financing Activities D Others Exchange Reserve 2004 0.80 2003 1.14

(0.37) 0.43 (-) 6.99 7.41 (0.03) 7.38 (0.24) 0.37 0.13 (5.32) (1.75) (0.42) (7.49) (0.02) (0.02)

(0.71) 0.43 (0.01) (1.14) (0.72) (0.06) (0.78) 0.71 0.71 3.35 (1.47) (1.81) 0.07 (0.02) (0.02) (0.02) 0.05 0.03

Net increase in cash and cash equivalents Cash & Cash equivalents at beginning of the year Cash & Cash equivalents at end of the year

0.01 0.03 0.04

Notes : 1 2 The above Cash Flow Statement has been prepared under the Indirect Method set out in Accounting Standard (AS - 3) on Cash Flow Statement issued by The Institute of Chartered Accountant of India. Prior Year Comparatives have been reclassified to confirm with current years presentation, where ever applicable.

As per our attached report of even date. For DHARMESH PARIKH & CO., Chartered Accountants D.A. PARIKH Proprietor PLACE : Ahmedabad DATE : 11 th May, 2005

For and on behalf of the Board JAYECHUND JIGNGREE Director

SUSHIL KUMAR JOGOO Director

68 2004Annual Report 2004 - 05

Adani

Global

FZE

(A Subsidiary Company of Adani Global Limited)

DIRECTORS REPORT
To, The Shareholders ADANI GLOBAL FZE Jebel Ali, Dubai U.A.E. The directors have pleasure in submitting the financial statements of Adani Global FZE, Jebel Ali, Dubai for the year ended 31 December 2004. Review of operations Your directors are pleased to report that the establishment continued to perform well and all its activities continue to expand. The directors are confident of maintaining the growth rate in the volume of business and the profitability of the establishment in 2005. Turnover, profit and dividend The turnover of the establishment for the year ended 31 st December 2004, amounted to AED 930,356,362 as compared to AED 699,620,608 in the previous year, indicating a growth of 33% over the previous year. The net profit for the year is AED 9,452,092. The Board of Directors declared an enhanced dividend of AED 360,000 during the year. Events after the balance sheet date There were no major events occurred after the balance sheet date which materially affect the establishment. The following served as directors of the establishment during the year: Mr. Vinod Shantilal Shah Mr. Bhavik Bharatkumar Shah Indian national Indian national

Messrs Pannell Kerr Forster, Chartered Accountants, Dubai were appointed as auditors of the establishment for the year ended 31 December 2004. A resolution to reappoint them for the year ending 31st December 2005 will be proposed at the forthcoming annual general meeting.

By order of the Board of directors of Adani Global FZE, Dubai, UAE

DATE : 11th April, 2005

VINOD SHANTILAL SHAH Director

69

Adani

Global

FZE

(A Subsidiary Company of Adani Global Limited)

AUDITORS REPORT
To the Members of ADANI GLOBAL FZE LIMITED We have audited the accompanying financial statements of ADANI GLOBAL FZE for the year ended 31 st December 2004. Respective responsibilities of the management and the auditors These financial statements are the responsibility of the establishments management. Our responsibility is to express an opinion on these financial statements based on our audit. The previous years financial statements were audited by another auditor, whose report dated 12th May 2004 expressed an unqualified audit opinion. Basis of opinion We conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of ADANI GLOBAL FZE as of 31 st December 2004 and of the results of its operations and its cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with Implementing Regulations No. 1/92 issued pursuant to Law No. 9 of 1992. Also, in our opinion, proper books of account and other records have been maintained by the establishment in accordance with the said regulations.

For PANNELL KERR FORSTER

DUBAI UNITED ARAB EMIRATES DATE : 28 th February, 2005

PANNELL KERR FORSTER Proprietor

70 2004Annual Report 2004 - 05

Adani

Global

FZE

(A Subsidiary Company of Adani Global Limited)

BALANCE SHEET AS AT 31ST DECEMBER, 2004


(Rs. in Crores) PARTICULARS A SOURCES OF FUNDS : I. SHAREHOLDERS FUND (A) Share capital (B) Reserves & surplus II. LOAN FUNDS : (A) Secured loans (B) Unsecured loans SCHEDULE AS AT 31-12-2004 AS AT 31-12-2003

1 2

23.02 55.81 78.83

23.02 48.45 71.47 3.66 6.15 3.66 75.13

3 4

4.35 1.80

TOTAL B APPLICATION OF FUNDS : I. FIXED ASSETS (A) Gross block (B) Less : Depreciation (C) (D) II. III. Net block Capital work-in-progress 6 7 8 9 10 2.82 73.77 8.32 43.78 128.69 LESS :CURRENT LIABILITIES & PROVISIONS (A) Current liabilities (B) Provisions

84.98

3.00 2.53 0.47 0.47 4.34

3.08 2.70 0.38 0.38 4.56 15.05 76.10 26.78 5.97 123.90

INVESTMENTS CURRENT ASSETS, LOANS & ADVANCES (A) Inventories (B) Receivables (C) Cash & bank balances (D) Loans & advances

11 12

47.90 0.62 48.52

53.28 0.43 53.70 80.17 84.98 70.19 75.13

NET CURRENT ASSETS TOTAL Notes forming part of the accounts As per our attached report of even date 18

For and on behalf of the Board For DHARMESH PARIKH & CO., Chartered Accountants D.A. PARIKH Proprietor PLACE : Ahmedabad DATE : 11 th May, 2005 VINOD SHANTILAL SHAH Chairman

BHAVIK BHARATKUMAR SHAH Director

71

Adani

Global

FZE

(A Subsidiary Company of Adani Global Limited)

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 2004
(Rs. in Crores) PARTICULARS A INCOME : Sales & Operating earnings SCHEDULE 13 2004 1147.31 1147.31 B EXPENDITURE : Cost of materials Personnel expenses Operation & other expenses Interest Depreciation 14 15 16 17 1116.30 2.21 6.11 10.84 0.19 1135.65 Profit for the year before taxation Provision for taxation: - Current Tax Profit after taxation Add : Surplus brought forward from previous year Profit available for appropriation APPROPRIATIONS : Proposed Dividend on Equity Shares Balance carried to balance sheet 11.66 11.66 46.78 58.44 0.43 58.01 58.44 Earning per Share-AED 1000000- each(in Rupees) - Basic & Diluted - Annualised Notes forming part of the accounts As per our attached report of even date 18 For and on behalf of the Board For DHARMESH PARIKH & CO., Chartered Accountants D.A. PARIKH Proprietor PLACE : Ahmedabad DATE : 11th May, 2005 VINOD SHANTILAL SHAH Chairman 6477800.56 6477800.56 2003 888.87 888.87 867.44 1.61 3.83 5.17 0.21 878.26 10.61 10.61 39.14 49.76 0.43 49.33 49.76 5895590.86 5895590.86

BHAVIK BHARATKUMAR SHAH Director

72 2004Annual Report 2004 - 05

Adani

Global

FZE

(A Subsidiary Company of Adani Global Limited)

SCHEDULES 1 TO 6 FORMING PART OF THE BALANCE SHEET AS AT 31ST DECEMBER, 2004


(Rs. in Crores) PARTICULARS SCHEDULE : 1 SHARE CAPITAL AUTHORISED 18 Equity Shares of AED 1,000,000 each ISSUED, SUBSCRIBED & PAID-UP 18 Equity Shares of AED 1,000,000 each (Above shares are held by Adani Global Ltd., a holding Company) AS AT 31-12-2004 AS AT 31-12-2003

23.02 23.02

23.02 23.02

23.02 SCHEDULE : 2 RESERVES & SURPLUS Exchange Reserve Translation Reserve Surplus in Profit & Loss Account

23.02

(0.48) (1.72) 58.01 55.81

(0.21) (0.66) 49.33 48.45

SCHEDULE : 3 SECURED LOANS From banks (Secured by Guarantees, Securities and Covenants) SCHEDULE : 4 UNSECURED LOANS Loans from Shareholder

4.35 4.35

1.80 1.80

3.66 3.66

SHEDULE : 5 FIXED ASSETS :


Sr. PARTICULARS No. GROSS BLOCK As at Additions Deductions As at 01/01/04 during during 31/12/04 the year the year 1.05 1.47 0.31 2.82 3.19 0.10 0.22 0.32 0.02 0.14 0.14 0.13 1.05 1.56 0.39 3.00 3.08 As at 01/01/04 1.05 1.14 0.28 2.47 2.59

(Rs. In Crores)
DEPRECIATION NET BLOCK Provided Deductions As at As at As at for the during the 31/12/04 31/12/04 31/12/03 year year 0.12 0.07 0.19 0.21 0.13 0.13 0.10 1.05 1.26 0.22 2.53 2.70 0.30 0.18 0.47 0.35 0.33 0.02 0.35 -

1 2 3

Building Furniture, Fixtures & Office Equipments Vehicles Total Previous Year

Note: Previous years figures of fixed assets are converted at previous years closing rate. Current years figures of fixed assets are converted at current years closing rate. Therefore previous years closing balance and current years opening balance will differ to the extent of exchange rate difference.

SCHEDULE : 6 INVESTMENTS LONG TERM INVESTMENT UNQUOTED India Millenium Deposit (100 certificates of US$ 10,000 each)

4.34 4.34

4.56 4.56

73

Adani

Global

FZE

(A Subsidiary Company of Adani Global Limited)

SCHEDULES 7 TO 11 FORMING PART OF THE BALANCE SHEET AS AT 31ST DECEMBER, 2004


(Rs. in Crores) PARTICULARS SCHEDULE : 7 INVENTORIES (AS CERTIFIED BY THE MANAGEMENT) Finished Goods Goods-in-transit AS AT 31-12-2004 AS AT 31-12-2003

2.82 2.82

3.13 11.92 15.05

SCHEDULE : 8 RECEIVABLES (UNSECURED, CONSIDERED GOOD) Others

73.77 73.77

76.10 76.10

SCHEDULE : 9 CASH & BANK BALANCES Cash in hand Deposit with Banks Cash at Bank

0.01 6.57 1.73 8.32

0.03 3.41 23.34 26.78

SCHEDULE : 10 LOANS & ADVANCES (UNSECURED, CONSIDERED GOOD) Interest Advances recoverable in cash or kind or for value to be received

1.36 42.42 43.78

0.90 5.08 5.97

SCHEDULE : 11 CURRENT LIABILITIES Sundry Creditors Other liabilities

32.95 14.95 47.90

42.00 11.27 53.27

74 2004Annual Report 2004 - 05

Adani

Global

FZE

(A Subsidiary Company of Adani Global Limited)

SCHEDULES 12 TO 17 FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR 2004
(Rs. in Crores) PARTICULARS SCHEDULE : 12 PROVISIONS Proposed dividend Provision for Staff End of Service Gratuity 2004 2003

0.43 0.19 0.62

0.43 0.43

SCHEDULE : 13 SALES & OPERATING EARNINGS Sales Profit on sale of fixed asset Miscellaneous Income

1,146.90 0.08 0.33 1,147.31

886.17 0.03 2.67 888.87

SCHEDULE : 14 COST OF MATERIALS Purchase of traded goods Decrease / (Increase) in stock Opening stock of finished / traded goods Closing stock of finished / traded goods

1,104.30 14.94 2.94 12.00 1,116.30 0.02 15.35

882.77

(15.33) 867.44

SCHEDULE : 15 PERSONNEL EXPENSES Salaries & bonus

2.21 2.21

1.61 1.61

SCHEDULE : 16 OPERATION & OTHER EXPENSES Rent Commission Other expenses

0.22 1.71 4.18 6.11

0.23 1.21 2.39 3.83

SCHEDULE : 17 INTEREST INTEREST EXPENSES Interest on Others Interest on Bank Borrowings LESS : INTEREST INCOME Interest on Deposit & others (Gross) 0.39 11.04 11.43 0.59 10.84 0.72 5.01 5.73 0.56 5.17

75

Adani

Global

FZE

(A Subsidiary Company of Adani Global Limited)

SCHEDULE: 18 NOTES FORMING PART OF THE ACCOUNTS A) BACK GROUND:The financial statements of Adani Global FZE for the accounting year 31st December 2004, being a Company registered in Jebel Ali Free Zone of United Arab Emirates, are audited by PANNELL KERR FORSTER, Chartered Accountants, Dubai and we have been furnished with their audit report dated 28th February, 2005. The financial statements of Adani Global FZE are presented in Indian Rupees duly converted, on the basis of aforesaid audit report to comply with the requirements of Section 212 of the Companies Act, 1956. ADANI GLOBAL FZE is registered as a Free Zone Establishment in Jebel Ali Free Zone of United Arab Emirates. The establishment was incorporated on 22 nd November 1997 with limited liability pursuant to Law No. 9 of 1992 and the Implementing Regulations No. 1/92 issued by Jebel Ali Free Zone Authority. The establishment has a general trading licence and it principally trades in agro-commodities, metal scrap, oil, precious metals and stones. The establishment is a wholly owned subsidiary of Adani Global Limited, (the Holding Company), a private Company incorporated in Mauritius. Adani Exports Limited, India, a public joint stock Company is the ultimate holding Company . Adani Global FZE is not a Company as defined in the Companies Act, 1956. The auditors have not included the matters specified in paragraph 4 & 5 of Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, as the order is applicable only to the Company in terms of clause 2 of Paragraph 1. The accounts have been prepared for the purpose of attachment to the accounts of the ultimate holding Company to comply with the provisions of the Indian Companies Act, 1956. B) SIGNIFICANT ACCOUNTING POLICIES adopted by the Company in the preparation and presentation of the Accounts and notes thereon:a) SYSTEM OF ACCOUNTING i) The accounts are prepared on the historical cost basis and on the accounting principles of a going concern. ii) Accounting policies, not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles. iii) All expenditure and income to the extent considered payable and receivable respectively are accounted for on accrual basis except those with significant uncertainties. b) CONVERSION TO INDIAN RUPEES For the purpose of accounts, all income and expense items are converted at the average rate of exchange applicable for the year. All assets and liabilities are translated at the closing rate as on the Balance Sheet date. The exchange difference arising out of the year-end translation is debited or credited to Exchange Reserve. The Share Capital is carried forward at the rate of exchange prevailing on the transaction date. The resulting exchange differences on account of translation at the year end are transferred to Translation Reserve Account and the said account is being treated as Reserve and Surplus. The transactions are in local currency United Arab Emirates Dirhams (AED), which have been converted into Indian Currency (Indian Rupees) for reporting and the rate applied is as per para (b) of the significant accounting policies. c) FIXED ASSETS Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses, if any, Property, plant and equipment are being depreciated on the straight-line basis so as to write them off over their estimated useful life as follows: Life (Years) Building Furniture and Fixtures Office Equipment Motor vehicles d) INVESTMENTS Held-to-maturity investments are debt investments with fixed repayments and maturity that the establishment has intent and ability to hold to maturity. The investment is stated at amortised cost less impairment loss. The investment in India Millennium Deposits is held by Habib Bank AG Zurich in fiduciary capacity, as a colletaral for facilities extended to the establishment. Following are the key features of the deposit:Interest rate Maturity India Millennium Deposits (Cumulative Deposits) e) 8.5% p.a. payable semi-annually 29th December 2005 6-7 5 5 3

The investment is held in the name of a director in fiduciary capacity as a trustee for the establishment. INVENTORIES Inventories are stated at the lower of cost and net realizable value. Cost is arrived at using the weighted average method and comprises invoice value plus applicable landing charges. Net realizable value is based on estimated selling price less any estimated cost of completion and disposal. 76 2004Annual Report 2004 - 05

Adani

Global

FZE

(A Subsidiary Company of Adani Global Limited)

f)

g)

h)

i)

k)

STAFF END-OF-SERVICE GRATUITY Provision is made for end-of-service gratuity payable to the staff at the balance sheet date in accordance with the local labour law. REVENUE Revenue represents net amount invoiced for goods sold during the year. The establishments sales are on transshipment basis i.e. the supplier ships goods directly to the customer. Revenue is recognized when significant risks and rewards relating to the ownership of goods concerned are transferred to the customer and is based on amount invoiced to customers for trans-shipments made during the year. CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash and bank balances including bank deposits free of encumbrance with a maturity date of three months or less from the date of deposit. FINANCIAL INSTRUMENTS Financial instruments comprise investment, trade and other receivables, cash and bank balances including deposits with banks, bank borrowings, trade and other payables and shareholders loan. Financial assets that do not have an active market and whose fair value cannot be estimated reliably, are measured at amortised cost less any write-down for impairment if they have a fixed maturity date, and at cost less any write-down for impairment if there is no fixed maturity date. Investment (held-to-maturity) is stated at amortised cost less impairment loss. Financial liabilities with no fixed maturity date are measured at cost and at amortised cost if they have a fixed maturity date. Changes in values of other financial assets and financial liabilities are recognized in the income statement. Contingent liabilities and capital commitments (Rs. in Crores) 31 ST DEC 2004 Bankers letters of Guarantees Unutilised balances of Commercial Letters of Credit 0.16 48.61 31 ST DEC 2003 0.14 52.64

l.

On 5 th August 2003, a supplier (the plaintiff ) has filed a case against the establishment (the defendant) claiming an amount of INR 0.61crores against delivery of goods in pursuance of purchase/sale agreement H 3236 dated 29 th January 2003. Defendant is of the opinion that the plaintiff failed to deliver the required quantity as agreed. The case is still in the court of law and various hearings have taken place. The management is of the opinion that the possibility of the courts decision against the establishment is remote. RELATED PARTIES The establishment enters into transactions with Companies that fall within the definition of a related party as contained in International Accounting Standard 24. The management considers such transactions to be in normal course of business and at terms which correspond to those on normal arms length transactions with third parties. Related parties comprises of the holding Company, the ultimate holding Company, Companies under common ownership and common management control, associates, directors and a relative of the director. At the balance sheet date balances with related parties were as follows: (Rs. In Crores) Included in advances to suppliers Included in trade and other payables: Due to associates Due to relative of a director Disclosed as loan from a shareholder 2004 29.98 10.23 0.21 2.23 2003 31.61 4.09

The nature of significant related party transactions and the amount involved during the year are as follows: (Rs. In Crores) 2004 2003 Sales 325.97 113.15 Purchases 306.57 158.49 Commission expense 0.38 Directors remuneration and expenses 0.46 0.47 Service charges paid 0.40 0.34 Interest on shareholders loan 0.39 0.72 Salary to relative of a director 0.22 m. OPERATING LEASES Leases as lessee Non-cancelable operating lease rentals are payable as follows: Year ended 31 st December, 2004 0.06 0.19 NIL (Rs. in Crores) Year ended 31 st December, 2003 0.06 0.25 NIL

Upto 1 year Greater than 1 year but less than 5 years Greater than 5 years 77

Adani

Global

FZE

(A Subsidiary Company of Adani Global Limited)

The establishment has entered into non-cancellable operating leases for 130 months with a renewable option for a further period of fifteen years. The total of the future lease payment commitment is as follows: n. Earning Per Share Year ended 31 st December, 2004 Net Profit after tax available for Equity Shareholders (Rs. in Crores) Weighted Average No. of Equity Shares of AED 10,00,000 each Outstanding during the year Basic Earning per Share (in Rs.) o. 11.67 18 6483356.12 (Rs. in Crores) Year ended 31 st December, 2003 10.61 18 5895590.86

Financial Instruments: Credit, Interest Rate And Exchange Rate Risk Exposures Credit risk Financial assets which potentially expose the establishment to concentrations of credit risk comprise principally investment, bank balances and trade and other receivables. The investment (held-to-maturity) represents unquoted Indian Government securities, the repayment of which is guaranteed by an Indian nationalised bank. The establishments bank accounts are placed with high credit quality financial institutions. At the balance sheet date, the establishments maximum exposure to credit risk from trade and other receivables outside the UAE is as follows: (Rs. in Crores) 2004 European countries Asian countries Far East and GCC countries 6.30 64.58 30.69 2003 13.74 34.67 24.63

At the balance sheet date, 45% of the trade receivables was due from three customers (previous year 68% due from four customers). Significant concentrations of credit risk by industry are as follows: Scrap traders Agro products Furnace Fabric traders 45.54 19.77 18.87 7.75 40.45 24.63 1.23 8.79

p.

q) r)

At the balance sheet date, advances to suppliers include an amount of INR 29.98 crores paid to a related party (supplier) in Singapore, against which goods have been received subsequent to the balance sheet date. Interest rate risk The establishments deposits with banks are at a fixed rate of interest whereas bank trust receipts are at floating rates of interest at levels which are generally obtained in the UAE. Shareholders loan carries an interest rate of 12% per annum. Exchange rate risk There is no significant exchange rate risk as substantially all financial assets and financial liabilities are denominated in UAE Dirhams or US Dollars to which the Dirham is fixed. FINANCIAL INSTRUMENTS: FAIR VALUES The fair value of a financial instrument is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arms length transaction. The fair values of the establishments financial assets and financial liabilities which are required to be carried at cost or at amortised cost approximate to their carrying values. Number Of Employees The number of employees at the end of the year was 14 (previous year 9). Previous years figures have been regrouped wherever necessary to confirm to this years classification.

Signature to Schedule 1 to 18 For and on behalf of the Board VINOD SHANTILAL SHAH Chairman

BHAVIK BHARATKUMAR SHAH Director 78 2004Annual Report 2004 - 05

Adani

Global

FZE

(A Subsidiary Company of Adani Global Limited)

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DECEMBER, 2004
(Rs. in Crores) PARTICULARS A Cash flows from Operating Activities Net profit for the year Adjustment for : Finance Cost Depreciation Interest Income Gain on sale of fixed asset Operating Profit before working capital changes Adjustment For: Inventories Trade & Other Receivables Trade & Other Payables Cash flows from operating activities B Cash flows from investing activities Addition to Fixed Assets Sale of Property, plant and equipment Interest received Maturity of investments (Increase)/decrease in deposits with banks (Net) Cash flows from investing activities C Cash flows from financing activities Repayment of bank borrowings Proceeds from trust receipts (net) Shareholders loan repaid Interest paid Net Cash flows from financing Activities D Others Exchange Reserve 2004 11.67 10.97 0.19 (0.56) (0.08) 22.19 11.52 (38.86) (2.66) (7.81) (0.32) 0.08 0.06 (3.31) (3.49) 4.35 (2.47) (10.60) (8.72) (0.62) (0.62) Net increase/(decrease) in cash and cash equivalents Cash & Cash equivalents at beginning of the year Cash & Cash equivalents at end of the year Represented by Call Deposits Cash at bank and in hand (20.64) 23.37 1.75 0.55 1.20 1.75 Notes : 1 2 The above cash flow statement has been prepared under the Indirect Method set out in Accounting Standard (AS - 3) on Cash Flow Statement issued by The Institute of Chartered Accountant of India. Prior Year Comparatives have been reclassified to confirm with current years presentation, where ever applicable. For and on behalf of the Board VINOD SHANTILAL SHAH Chairman 2003 10.61 5.62 0.21 (0.55) (0.03) 15.86 (15.04) 10.17 13.75 24.74 (0.02) 0.06 0.08 0.68 1.94 2.74 (0.03) (3.35) (4.91) (8.29) (0.62) (0.62) 18.57 4.57 23.37 3.77 19.60 23.37

As per our attached report of even date. For DHARMESH PARIKH & CO., Chartered Accountants D.A. PARIKH Proprietor PLACE : Ahmedabad DATE : 11 th May, 2005 79

BHAVIK BHARATKUMAR SHAH Director

Adani Global Pte. Ltd.


(A Subsidiary Company of Adani Global Limited)

DIRECTORS REPORT
To, The Shareholders ADANI GLOBAL PTE LIMITED Singapore

The directors are pleased to present their report to the members together with the audited financial statements of the Company for the financial year ended 31 December 2004. 1 DIRECTORS The directors of the Company in office at the date of this report are: Vinod Shantilal Shah, Chang Chung Ling, Joseph Selvamalar, Shah Bhavik Bharatkumar. ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES AND DEBENTURES Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object is to enable the directors of the Company to acquire benefits by means of the acquisition of shares or debentures of the Company or any other body corporate. DIRECTORS INTERESTS IN SHARES AND DEBENTURES The directors of the Company holding office at the end of the financial year had no interests in the share capital and debentures of the Company and related corporations as recorded in the register of directors shareholdings kept by the Company under section 164 of the Companies Act, Chapter 50. CONTRACTUAL BENEFITS OF DIRECTORS Since the beginning of the financial year, no director of the Company has received or become entitled to receive a benefit which is required to be disclosed under section 201(8) of the Companies Act, Chapter 50, by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member, or with a Company in which he has a substantial financial Interest except as disclosed in the financial statements. OPTIONS TO TAKE UP UNISSUED SHARES During the financial year, no option to take up unissued shares of the Company was granted. OPTIONS EXERCISED During the financial year, there were no shares of the Company issued by virtue of the exercise of an option to take up unissued shares. UNISSUED SHARES UNDER OPTION At the end of the financial year, there were no unissued shares under option. AUDITORS The auditors, Tony Oei & Company, have expressed their willingness to accept re-appointment. For and on behalf of the Directors VINOD SHANTILAL SHAH Director JOSEPH SELVAMALAR Director

5 6

7 8

DATE : 11th April, 2005

80 Annual Report 2004-2005

Adani Global Pte. Ltd.


(A Subsidiary Company of Adani Global Limited)

STATEMENT OF DIRECTORS
In the opinion of the directors, the accompanying financial statements are drawn up so as to give a true and fair view of the state of affairs of the Company as at 31 December 2004 and the results of the business, changes in equity and cash flows of the Company for the financial year then ended and at the date of this statement there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due. The Board of Directors had authorized the issue of the financial statements on the date of the Statement of Directors On behalf of the Directors VINOD SHANTILAL SHAH Director JOSEPH SELVAMALAR Director

DATE : 11th April, 2005

81

Adani Global Pte. Ltd.


(A Subsidiary Company of Adani Global Limited)

AUDITORS REPORT
To the Members of ADANI GLOBAL PTE LIMITED We have audited the financial statements of Adani Global Pte Ltd for the year ended 31 st December 2004. The financial statements comprise the balance sheet, the profit and loss account, the statement of changes in equity and cash flow statement of the Company, and notes thereto. These financial statements are the responsibility of the Companys directors. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the directors, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, (a) the financial statements are properly drawn up in accordance with the provisions of the Singapore Companies Act, Cap. 50 (the Act) and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Company as at 31 st December 2004 and the results, changes in equity and cash flows of the Company for the financial year ended on that date; and the accounting and other records required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act. For TONY OEI & COMPANY Certified Public Accountants

(b)

DATE : 11 th April, 2005

Proprietor

82 Annual Report 2004-2005

Adani Global Pte. Ltd.


(A Subsidiary Company of Adani Global Limited)

BALANCE SHEET AS AT 31ST DECEMBER, 2004


(Rs. in Crores) PARTICULARS A SOURCES OF FUNDS : I. SHAREHOLDERS FUND (A) Share Capital (B) Reserves & Surplus II. LOAN FUNDS : (A) Secured loans (B) Unsecured loans SCHEDULE 31-12-2004 31-12-2003

1 2

24.07 3.32 27.39 0.16 0.16

24.07 1.83 25.90 0.17 0.17 26.07

TOTAL B APPLICATION OF FUNDS : I. FIXED ASSETS (A) Gross block (B) Less : Depreciation (C) II. Net block

27.55

4 0.23 0.20 0.03 0.03 0.20 0.17 0.03 0.03 70.86 25.90 3.55 100.31

CURRENT ASSETS, LOANS & ADVANCES (A) Inventories (B) Receivables (C) Cash & bank balances (D) Loans & advances

5 6 7 8

3.81 225.20 37.51 0.10 266.62

LESS :CURRENT LIABILITIES & PROVISIONS (A) Current liabilities (B) Provisions

9 10

238.71 0.39 239.10

73.97 0.30 74.27 27.52 27.55 26.04 26.07

NET CURRENT ASSETS TOTAL Notes forming part of the accounts As per our attached report of even date 11

For and on behalf of the Board For DHARMESH PARIKH & CO., Chartered Accountants D.A. PARIKH Proprietor PLACE : Ahmedabad DATE : 11 th May, 2005 VINOD SHANTILAL SHAH Chairman

JOSEPH SELVAMALAR Director

83

Adani Global Pte. Ltd.


(A Subsidiary Company of Adani Global Limited)

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 2004
(Rs. in Crores) PARTICULARS A INCOME : Sales SCHEDULE 12 2004 1651.57 1651.57 B EXPENDITURE : Cost of materials Personnel expenses Operation & other expenses Interest Depreciation 13 14 15 16 4 1639.76 1.30 1.40 7.00 0.03 1649.49 Profit for the year before taxation Provision for taxation: - Current Tax Profit after taxation Add : Surplus brought forward from previous year Profit available for appropriation APPROPRIATIONS : Balance carried to balance sheet 2.08 0.39 1.69 2.12 3.81 3.81 3.81 Earning per Share - S$ 1 each (in Rupees) - Basic & Diluted - Annualised Notes forming part of the accounts As per our attached report of even date 11 For and on behalf of the Board For DHARMESH PARIKH & CO., Chartered Accountants D.A. PARIKH Proprietor PLACE : Ahmedabad DATE : 11th May, 2005 VINOD SHANTILAL SHAH Chairman 1.91 1.91 2003 1006.32 1006.32 999.82 0.76 0.63 3.62 0.02 1004.85 1.47 0.29 1.18 0.95 2.13 2.13 2.13 1.33 1.33

JOSEPH SELVAMALAR Director

84 Annual Report 2004-2005

Adani Global Pte. Ltd.


(A Subsidiary Company of Adani Global Limited)

SCHEDULES 1 TO 10 FORMING PART OF THE BALANCE SHEET AS AT 31ST DECEMBER, 2004


(Rs. in Crores) PARTICULARS SCHEDULE : 1 SHARE CAPITAL AUTHORISED 10000000 Ordinary Shares of S$ I each ISSUED, SUBSCRIBED & PAID-UP 8850000 Ordinary Shares of S$ I each (Above shares are held by Adani Global Ltd., a holding Company) SCHEDULE : 2 RESERVES & SURPLUS Exchange Reserve Translation Reserve Surplus in Profit & Loss Account SCHEDULE : 3 UNSECURED LOANS Loans from Directors AS AT 31-12-2004 AS AT 31-12-2003

27.13 24.07 24.07

27.16 24.07 24.07

0.01 (0.50) 3.81 3.32

0.01 (0.31) 2.13 1.83

0.16 0.16

0.17 0.17 (Rs. In Crores)

SHEDULE : 4 FIXED ASSETS :


Sr. PARTICULARS No. As at 01/01/04 0.05 0.05 0.05 0.05 0.20 0.20 GROSS BLOCK Additions Deductions As at during during 31/12/04 the year the year 0.05 0.05 0.05 0.03 0.08 0.03 0.23 0.20 As at 01/01/04 0.02 0.05 0.05 0.05 0.17 0.15

1 2 3 4

Building Furniture & Fixtures Office Equipments Computer Equipment Total Previous Year

DEPRECIATION NET BLOCK Provided Deductions As at As at As at for the during the 31/12/04 31/12/04 31/12/03 year year 0.02 0.04 0.01 0.03 0.05 0.05 0.01 0.06 0.02 0.03 0.20 0.03 0.03 0.02 0.17 0.03 -

SCHEDULE : 5 INVENTORIES (AS CERTIFIED BY THE MANAGEMENT) Finished Goods SCHEDULE : 6 RECEIVABLES (UNSECURED, CONSIDERED GOOD) Others SCHEDULE : 7 CASH & BANK BALANCES Cash and Bank Balance Fixed Deposits with Banks

3.81 3.81

225.20 225.20

70.86 70.86

4.99 32.52 37.51

3.12 22.78 25.90

SCHEDULE : 8 LOANS & ADVANCES (UNSECURED, CONSIDERED GOOD) Advances recoverable in cash or kind or for value to be received SCHEDULE : 9 CURRENT LIABILITIES Sundry Creditors Other liabilities SCHEDULE : 10 PROVISIONS Provision for taxation

0.10 0.10

3.55 3.55

207.80 30.91 238.71

70.30 3.67 73.97

0.39 0.39

0.30 0.30

85

Adani Global Pte. Ltd.


(A Subsidiary Company of Adani Global Limited)

SCHEDULES 12 TO 16 FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR 2004
(Rs. in Crores) PARTICULARS SCHEDULE : 12 SALES Sales 1,651.57 1,651.57 SCHEDULE : 13 COST OF MATERIALS Purchase of traded goods 1,639.76 1,639.76 SCHEDULE : 14 PERSONNEL EXPENSES Salaries & bonus Contribution to provident & other funds 1.24 0.06 1.30 SCHEDULE : 15 OPERATION & OTHER EXPENSES Rent Postage, telephone & telex expenses Stationery & printing expenses Miscellaneous expenses Payment to auditors Membership & subscription Legal & Professional Travelling & conveyance expenses Exchange rate difference 0.10 0.19 0.03 0.18 0.02 0.13 0.09 0.39 0.27 1.40 SCHEDULE : 16 INTEREST INTEREST EXPENSES L/C Charges Bank Charges , Commission & Interest LESS : INTEREST INCOME Interest on Deposit & others 2.01 5.24 7.25 0.25 7.00 1.38 2.41 3.79 0.17 3.62 0.12 0.16 0.02 0.05 0.02 0.11 0.01 0.08 0.06 0.63 0.69 0.07 0.76 999.82 999.82 1,006.32 1,006.32 2004 2003

86 Annual Report 2004-2005

Adani Global Pte. Ltd.


(A Subsidiary Company of Adani Global Limited)

SCHEDULE: 11 NOTES FORMING PART OF THE ACCOUNTS A) Back ground:The financial statements of Adani Global Pte Ltd for the accounting year 31 st December 2004, being a company registered in the Republic of Singapore, are audited by Tony Oei & Company, Certified Public Accountants and Registered Auditors, Singapore, and we have been furnished with their audit report dated 11 th April, 2005. We are presented with the financial statements of Adani Global Pte Ltd. in Indian Rupees duly converted, on the basis of aforesaid audit report to comply with the requirements of Section 212 of the Companies Act, 1956. Adani Global Pte Ltd is the wholly owned subsidiary of Adani Gobal Limited incorporated in Singapore. The principal activities of the Company are to carry on business as general merchants, importers and exporters, commission agents and manufacturers representative. There have been no significant changes in the nature of these activities during the financial year. Adani Global Pte Ltd. is not a Company as defined in the Companies Act, 1956. We have not included the matters specified in paragraph 4 & 5 of Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, as the order is applicable only to the Company in terms of clause 2 of Paragraph 1. The accounts have been prepared for the purpose of attachment to the accounts of the ultimate holding Company to comply with the provisions of the Indian Companies Act, 1956. B) SIGNIFICANT ACCOUNTING POLICIES adopted by the Company in the preparation and presentation of the Accounts:a) SYSTEM OF ACCOUNTING i) ii) iii) b) The accounts are prepared on the historical cost basis and on the accounting principles of a going concern. Accounting policies, not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles. All expenditure and income to the extent considered payable and receivable respectively are accounted for on accrual basis except those with significant uncertainties.

CONVERSION TO INDIAN RUPEES For the purpose of accounts, all income and expense items are converted at the average rate of exchange applicable for the year. All assets and liabilities are translated at the closing rate as on the Balance Sheet date. The exchange difference arising out of the year-end translation is debited or credited to Translation Reserve. The Share Capital is carried forward at the rate of exchange prevailing on the transaction date. The resulting exchange difference on account of translation at the year end are transferred to Translation Reserve Account and the said account is being treated as Reserve and Surplus.

c)

FIXED ASSETS Fixed Assets are stated at cost less accumulated depreciation and any impairment in value. Depreciation is computed on a straight-line basis over the estimated useful life of the asset as follows: Office furniture and fittings Office equipment Renovation 33 1/3% 33 1/3% 33 1/3%

The useful life and depreciation method are reviewed annually to ensure that the method and period of depreciation are consistent with the expected pattern of economic benefits from items of plant and equipment. Fully depreciation assets still in use are retained in the financial statements. d) DEFERRED TAXATION Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets and liabilities are measured using the tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled based on tax rates enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred tax liabilities are recognized for all taxable temporary differences, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary difference will not reverse in the foreseeable furture. e) REVENUE RECOGNITION Revenue from sales are recognized when goods are delivered. Interest income is recognized on an accrual basis. f) TRADE DEBTORS AND OTHER DEBTORS Trade and other debtors are stated at cost.

87

Adani Global Pte. Ltd.


(A Subsidiary Company of Adani Global Limited)

g) h)

TRADE CREDITORS AND OTHER CREDITORS Trade and other creditors are stated at cost. EMPLOYEE LEAVE ENTITLEMENTS Employees entitlements to annual leave are recognized when they accrue to employees. No provision has been made for the estimated liability for annual leave as the amount involved is considered to be not significant.

i)

EMPLOYEE BENEFITS The Company makes contributions to the Central Provident Fund scheme in Singapore, a defined contribution pension scheme. These contributions are recognized as an expense in the period in which the related service is performed.

j) h)

TAXATION Current tax is determined as the amount of tax payable in respect of taxable income for the year. IMPAIRMENT OF ASSETS At each balance sheet date, the Company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment losses are recognised as an expense immediately. When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately.

k)

INVENTORIES Inventories are stated at the lower of cost and net realizable value. Cost is determined on a first-in, first-out basis. Net realizable value is the estimated selling price in the ordinary course of business, less the costs of selling expenses.

l)

CASH AND CASH EQUIVALENTS Cash and cash equivalents are stated in the balance sheet at cost. Cash and cash equivalent comprise cash on hand, fixed deposits and cash at bank.

C)

NOTES ON ACCOUNTS:1. 2. 3. 4. The transactions are in local currency (Singapore Dollars), which have been converted into Indian Currency (Indian Rupees) for reporting and the rate applied is as per para (b) of the significant accounting policies. BILLS PAYABLE The bills payable is secured by the Companys fixed deposit and guaranteed by the directors. AMOUNT DUE TO A DIRECTOR The amount due to a director is interest free and has no fixed term of repayment. RELATED PARTY TRANSACTIONS Related parties are entities with common direct or indirect shareholders and or directors or management. Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. During the financial year, there were the following significant transactions with related parties, based on terms agreed by the parties:(Rs. In Crores) Particulars Sales to related party Sales to ultimate holding Company Purchases from ultimated holding Company Purchases from related party 5. Earning Per Share Particulars Year ended Year ended 31 st December, 31st December, 2004 2003 1.69 8850000 1.91 1.18 8850000 1.33 88 Annual Report 2004-2005 2004 180.84 606.37 87.54 0.14 2003 80.79 120.25 79.00 -

Net Profit after tax available for Equity Shareholders (Rs. in Crores) Weighted Average No. of Equity Shares of S$ 1 each Outstanding during the year Basic Earning per Share (in Rs.)

Adani Global Pte. Ltd.


(A Subsidiary Company of Adani Global Limited)

6.

FINANCIAL INSTRUMENTS Financial risk factors The main risks arising from the Companys financial instruments are interest risk/credit risk/liquidity risk/foreign currency risk. The Companys overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effect on the financial performance of the Company. Interest rate risk The Company has cash balances placed with reputable banks and financial institutions which generate interest income for the Company. The Company is exposure to changes in interest rates primarily to the Companys debt obligations. The Company obtains minimal financing through bank borrowings. The Company s policy is to obtain any financing at the most favourable interest rates available. Credit risk Credit risk is limited to the risk arising from the inability of debtors to make payment when due. It is the Companys policy to provide credit term to creditworthy customers. Management has established credit policies in place and the exposure to credit risks is monitored on an ongoing basis. Credit evaluation are performed on all customers requiring credit over a certain amount. The carrying amount of trade and other debtors represent the Company s maximum exposure to credit risk. The Company has no significant concentrations of credit risk. Liquidity risk Liquidity risk arises from the possibility that debtors may not be able to settle its debts within the normal term of trade. Liquidity risk is minimal as the Company is able to fund its operation from its accumulated profits. Funding is obtained from bank facilities. Foreign currency risk The Company is transacting all the business in US$, Company is not affected by the fluctuation in exchange rate. To meet office administrative expenses, Company is converting nominal amount from US$ to Singapore Dollar and exchange rate arising out of such conversion has been provided in the books. Fair value of financial assets and liabilities The carry amount of financial assets and liabilities recorded in the financial statements represents their respective net fair values.

7.

Previous years figures have been regrouped wherever necessary to confirm to this years classification.

Signature to Schedule 1 to 16 For and on behalf of the Board VINOD SHANTILAL SHAH Director

JOSEPH SELVAMALAR Director

89

Adani Global Pte. Ltd.


(A Subsidiary Company of Adani Global Limited)

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DECEMBER, 2004
(Rs. in Crores) PARTICULARS A Cash flows from Operating Activities Net profit for the year Adjustment for : Depreciation Interest Received Operating Profit before working capital changes Adjustment For: Trade & Other Receivables Loans & Advances Trade & Other Payables Trade Creditors Bills Payable Stock Cash generated from operations Tax paid Net Cash Used in operating activities B Cash flows from investing activities Purchase of equipment Interest Recieved Net Cash used in investing activities C Cash flows from financing activities Proceeds from Unsecured Loans Net Cash flows from financing Activities D Others Exchange Reserve 2004 2.07 0.02 (0.24) 1.85 (154.89) 3.42 27.28 90.99 47.06 (3.81) 11.90 (0.30) 11.60 (0.02) 0.24 0.22 (0.01) (0.01) (0.20) (0.20) Net increase in cash and cash equivalents Cash & Cash equivalents at beginning of the year Cash & Cash equivalents at end of the year Represented by Fixed Deposit Cash at bank and in hand 11.61 25.90 37.51 32.53 4.98 37.51 2003 1.47 0.02 (0.17) 1.32 (5.62) (3.46) 3.52 9.12 1.16 6.04 (0.12) 5.92 0.17 0.17 0.05 0.05 (0.06) (0.06) 6.08 19.82 25.90 22.78 3.12 25.90

Notes : 1 2 The above cash flow statement has been prepared under the Indirect Method set out in Accounting Standard (AS - 3) on Cash Flow Statement issued by The Institute of Chartered Accountant of India. Prior Year Comparatives have been reclassified to confirm with current years presentation, where ever applicable.

For and on behalf of the Board For DHARMESH PARIKH & CO., Chartered Accountants D.A. PARIKH Proprietor PLACE : Ahmedabad DATE : 11th May, 2005 VINOD SHANTILAL SHAH Director

JOSEPH SELVAMALAR Director

90 Annual Report 2004-2005

EN K E N B A S BL H A EFT E LY L G L PA NA S SIO I N T H TE IN

PROXY FORM
I / We in the district of the above named Company, hereby appoint Shri / Smt. of or failing him Shri / Smt. of in the district of in the district of of

Adani Exports Limited


Five Star Export House

being a member / members of

as my / our proxy to vote for me / us and on my / our behalf at the Annual General Meeting of the Company to be held on the 12th August, 2005 and any adjournment thereof. Signed this day of 2005.

Signature

Affix 1 Re. Revenue Stamp

Folio No.

DP ID No. *

Client ID No. *

* Applicable for members holding shares in electronic form No. of Share(s) held Notes : 1. A member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself. 2. 3. A proxy need not be a member. The proxy form duly completed should be deposited at the Registered Office of the Company before 48 hours of the meeting.

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ATTENDANCE SLIP
Full name of the member attending Full name of the joint-holder (To be filled in if first named joint - holder does not attend meeting) Name of Proxy (To be filled in if Proxy Form has been duly deposited with the Company)

Adani Exports Limited


Five Star Export House

I hereby record my presence at the Annual General Meeting to be held at Hotel Le meridian, Khanpur, Ahmedabad-1, on Friday, the 12th August, 2005 at 11.00 a.m. Folio No. DP ID No. * Client ID No. *

* Applicable for members holding shares in electronic form No. of Share(s) held Members / Proxys Signature (To be signed at the time of handing over this slip)

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