Mundra Port and Special Economic Zone

The Directors have pleasure in presenting the Ninth Annual Report and
 the Audited Accounts tor the financial year ended 31st March, 2008.
 
 Initial Public Offer
 
 During the financial year 2007-08, your Company entered the Capital
 Market with Initial Public Offer (IPO) through 100% Book Building
 process of 4,02,50,000 equity shares of Rs. 10/- each at a premium of
 Rs. 430/- per share. Your Companys shares were listed on the Bombay
 Stock Exchange Limited (BSE) and National Stock Exchange of India
 Limited (NSE) on 27th November, 2007. The issue was over subscribed by
 116 times, creating a new record in the history of the Indian Capital
 Market.
 
 Your Directors take this opportunity to thank all the investors for
 their overwhelming response to the IPO and the confidence reposed by
 them.
 
 Financial Highlights:
 
 The bird eye view of the summarized financial highlights is depicted
 below:
 
                                                   (Rs. in million)
 Particulars                                   For the        For the
                                             year ended      year ended
                                             31/03/2008      31/03/2007
 
 Income from operations                        8,182.07        5,814.40
 
 Other Income                                    279.04           57.85
 
 Total Income                                  8,461.11        5,872.25
 
 Operating & Administrative Expenses           2,827.99        2,669.07
 
 Operating Profit before Interest, 
 Depreciation and Tax                          5,633.12        3,203.18
 
 Interest and Financial Charges                1,062.19          631.00
 
 Depreciation/Amortization                     1,006.38          806.99
 
 Profit Before Tax and Prior Period 
 Adjustment                                    3,564.55        1,765.19
 
 Less: Prior Period Adjustments                  (12.95)         (15.47)
 
 Add: Extraordinary Items                        116.61
 
 Provision for tax (including deferred tax)    1,534.09         (124.64)
 
 Prof it after tax                             2,134.12        1,874.36
 
 Surplus brought forward from previous year      950.36          876.20
 
 Pre-operative & Miscellaneous Expenditure 
 (to the extent not written-off)                   -             (36.09)
 
 Balance available for appropriation           3,084.48        2,714.47
 
 Appropriations:
 
 Transfer to Debenture Redemption Reserve          -              20.13
 
 Transfer to Capital Redemption Reserve            1.40            1.41
 
 Transfer to General Reserve                     106.71
 
 Transfer for issue of Bonus Shares                -           1,382.14
 
 Dividend on Preference Shares                     -*               -*
 
 Dividend on Equity Shares                       601.02          360.43
 
 Balance carried to Balance Sheet              2,375.35          950.36
 
 (Figures being nullified on conversion to Rs. in million, Amount Rs.
 2,811)
 
 Year in Retrospect and Future Prospects:
 
 Your Company has achieved significant transformation in its
 performance, in its quest to be amongst the most admired Port, Special
 Economic Zone (SEZ) and Logistics Company in the country. The year has
 ended with an all round improvement in your Companys performance
 achieving the highest turnover and profit ever since its inception.
 Your Company performed remarkably during the financial year 2007-08.
 
 The key performances of the Company are:
 
 - Turnover amounted to Rs. 8,182.07 million against Rs. 5,814.40
 million in the corresponding previous financial year, showing an
 increase of 40.72%.
 
 - Profit Before Tax amounted to Rs. 3,668.21 million against Rs.
 1,749.72 million in the corresponding previous financial year, showing
 an increase of 109.65%.
 
 - Profit after tax amounted to Rs. 2,134.12 million against Rs.
 1,874.36 million in the corresponding previous financial year, showing
 an increase of 13.86%.
 
 - Earning Per Share (EPS) for the year Rs. 5.69 as against EPS of Rs.
 5.20 in the corresponding financial year, showing an increase of 9.42%.
 
 Your Company has equipped itself to leverage the opportunity provided
 by the growth of the Port, SEZ and Logistics sector in India. The
 liberalized trade regime would result in increased international trade
 and therefore your Directors believe that the future prospect of your
 company is bright. It is expected that your Company will be able to
 capitalize on the emerging opportunities and will be one of the leading
 Port, SEZ and Logistics player in the Country.
 
 Dividend:
 
 In view of the Companys continuing consistent good and profitable
 performance, your Directors are pleased to recommend Dividend of Rs.
 1.50 per share on 400,678,820 Equity Shares of Rs. 10/- each of the
 Company and 0.01 % dividend on 0.01 % Non-Cumulative Redeemable
 Preference Shares of Rs. 10/- each for the financial year 2007-08. The
 Dividend as recommended would involve an outflow of Rs. 601 million
 towards the dividend.
 
 Utilisation of Proceeds of IPO:
 
 Out of the proposed utilization of IPO proceeds as on 31st March, 2008,
 Rs. 2,009.10 million were utilized for objects of Issue mentioned in
 the offer document and balance Rs. 15,700.90 million in Interim usage
 of funds.
 
 The statement of proposed & actual utilization of IPO proceeds as on
 March 31,2008 and proposed amendment to utilisation of issue proceeds
 is as follows:
 
                                                (Rs. In million)
 Utilization of funds                          Utilization as on
                                                31st March, 2008
                                             Projected        Actual
 
 a) SEZ Project                               2,150.00         10.00
 
 b) Coal Terminal Project                     1,250.00         88.50
 
 c) Investment in Adani Petronet (Dahej) 
    Port Private Limited (APPPL)                815.60        260.50
 
 d) Investment in Adani Logistics Limited (ALL) 220.00        220.00
 
 e) Investment in Inland Conware 
 Private Limited (ICPL)                         278.30        220.00
 
 f) General Corporate purpose                      -          868.40
 
 g) Issue Expenses                                 -          341.70
 
 Total                                         4,713.90     2,009.10
 
 Total            Proposed
 Utilization      Revision
 as per the
 prospectus
 
 7,000.00         5,000.00
 
 4,500.00         4,500.00
 
 2,094.60         2,094.60
 
   220.00           480.00
 
   543.80         1,087.80
 
 2,701.60         4,047.60
 
   650.00           500.00
 
 17,710.00       17,710.00
 
 Consolidated Financial Statements:
 
 Consolidated Financial Statements pursuant to Clause 41 of the Listing
 Agreement entered into with the Stock Exchanges and prepared in
 accordance with the Accounting Standards prescribed by the Institute of
 Chartered Accountants of India, in this regard is attached herewith.
 
 Subsidiary Companies:
 
 In order to create more business opportunities your Company has made
 strategic investments in different areas of opportunities relating to
 Port, SEZ and Logistics. For expanding business area operations, your
 Company invested in textile and apparel sector under the banner of
 Mundra SEZ Textile and Apparel Park Private Limited. In order to become
 an commercial international air cargo destination your Company has
 invested upto 100% equity in Mundra Aviation Limited, a U.K. Territory
 company. Apart from these your Company has incorporated/acquired shares
 of following subsidiaries during the year under review:
 
 1.  MPSEZ Utilities Private Limited - for developing and operating
 utilities in SEZ
 
 2.  Rajasthan SEZ Private Limited - for SEZ development in Rajasthan
 
 3.  Adani Logistics Limited - for container train operations
 
 4.  Inland Conware Private Limited - for setting up Inland Container
 Depots
 
 5.  Inland Conware (Ludhiana) Private Limited - for setting up Inland
 Container Depots
 
 6.  Gujarat Adani Aviation Private Limited - for managing and providing
 aviation services to Group Companies and others.
 
 The Statement pursuant to Section 212(1) (e) of the Companies Act,
 1956, containing details of subsidiaries of the Company, forms part of
 the Annual Report.
 
 In view of the exemption received from Ministry of Corporate Affairs
 vide letter no. 47/299/008-CL-lll dated 9th May, 2008 the Audited
 Statement of Accounts, the Reports of the Board of Directors and
 Auditors Reports of the Subsidiary Companies are not annexed as
 required under Section 212(8) of the Companies Act, 1956. As per the
 terms of the Exemption Letter, a statement containing brief financial
 details of the Companys subsidiaries for the year ended 31st March,
 2008 is included in the Annual Report. The annual accounts of the
 subsidiaries and the related detailed information will be made
 available to any Member of the Company/its subsidiaries seeking such
 information at any point of time and are also available for inspection
 by the Member of the Company/its subsidiaries at the Registered Office
 of the Company on any working day during business hours.
 
 Fixed Deposits:
 
 During the year under review, your Company has not accepted any
 deposits from Public under Section 58A of Companies Act, 1956.
 
 Conservation of Energy, Technology Absorption and Foreign Exchange
 Earnings & Outgo:
 
 A statement containing the information as per Section 217(1) (e) of the
 Companies Act, 1956 read with the Companies (Disclosure of particulars
 in the Report of the Board of Directors) Rules, 1988 as amended from
 time to time is appended herewith as Annexure-I and the said Annexure-I
 Forms Part of this Annual Report.
 
 Group For Inter-Se Transfer of Shares:
 
 As required under Clause 3(1)(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 Act, 1969) for the
 purpose of availing exemption from applicability of the provisions of
 Regulations 10 to 12 of the aforesaid SEBI Regulations are given in
 Annexure II attached herewith and the said Annexure II forms part of
 this Annual Report.
 
 Health, Safety and Environment:
 
 Health, Safety and Environment policies involve identifying the risks
 involved in daily activities of the Company and minimize its impact on
 personnel and environment. Your Companys management approach to
 Health, Safety and Environment involves proactive approach to create
 safe working environment, continuous safety education and training,
 periodic review of programs and evaluation of incidents. Your Company
 continues to address environmental and health impact by reducing waste,
 emissions and discharges and by using energy efficiently.
 
 Corporate Social Responsibility:
 
 Adani Group has aimed its activities at the sustainable development of
 the Mundra, Kutch Region. The group has followed the same in the year
 2007-08 by investing in the environment by way of laying green belts,
 landscaping the site, creating a mangrove nursery, planting tolerant
 vegetation.
 
 Health is a primary development indicator and the group focused on this
 social parameter as well by joining the local self government in
 vaccination programmes and extending medical facilities.
 
 An important wealth indicator for the primarily rural folk is
 livestock. By providing fodder in drought areas we assisted in the
 survival and health of livestock.
 
 Water management is a key aspect of life. We have initiated development
 of watershed projects at the grass-root level like Shanti Sarovar a
 rain water harvesting project to improve the availability and quality
 of water in nearby wells.
 
 Your Company has developed a Residential colony complete with schools,
 recreation/playing area, shopping complex and medical facilities for
 its growing employee base.
 
 Corporate Governance and Management Discussion and Analysis Report:
 
 Your Company has been proactive in following the principles and
 practices of good Corporate Governance as an important step towards
 building investor confidence, improve investors protection and
 maximize long-term shareholder value. A separate report on Corporate
 Governance compliance and a Management Discussion and Analysis Report
 as stipulated by the Clause 49 of the Listing Agreement forms part of
 the Annual Report along with the required Certificate from the
 Practicing Company Secretary regarding compliance of the conditions of
 Corporate Governance as stipulated by revised Clause 49 of the Listing
 Agreement.
 
 The detailed Operational Performance of the Company has been
 comprehensively discussed in the Management Discussion and Analysis
 Report which forms part of Directors Report.
 
 In compliance with one of the Corporate Governance requirements as per
 Clause 49 of the Listing Agreement, your Company has formulated and
 implemented a Code of Conduct for all Board members and senior
 management personnel of the Company, who have affirmed the compliance
 thereto.
 
 Directors:
 
 Mr. D. T. Joseph, IAS (Retd.) was appointed as an Additional and
 Independent Director on the Board of the Company with effect from 17th
 September, 2007. Pursuant to the provisions of Section 260 of the
 Companies Act, 1956 and Articles of Association of the Company holds
 office up to ensuing Annual Genera! Meeting. The Company has received a
 notice in writing from the members of the Company signifying his
 candidature for the office of the Board of Directors of the Company.
 
 Mr. Rajeeva Ranjan Sinha was appointed as an Additional Director and
 Whole Time Director of the Company with effect from 12th October, 2007
 for a period of five years. Pursuant to the provisions of Section 260
 of the Companies Act, 1956 and Articles of Association of the Company
 holds office up to ensuing Annual General Meeting. The Company has
 received a notice in writing from the members of the Company signifying
 his candidature for the office of the Board of Directors of the
 Company.
 
 Mr. H. K. Dash, IAS ceased to be the Director of the Company with
 effect from 28th May, 2008. The Board places on record the deep
 appreciation for valuable services and guidance provided by Mr. H. K.
 Dash, IAS during the tenure of his directorship.
 
 As per Section 256 of the Companies Act, 1956 and Article 152 of the
 Articles of Association of the Company, Mr. K. N. Venkatasubramanian,
 Mr. S. Venkiteswaran and Mr. S. K. Tuteja, IAS (Retd.) are liable to
 retire by rotation and being eligible offer themselves for
 re-appointment.
 
 Directors Responsibility Statement:
 
 Pursuant to the requirement under Section 217(2AA) of the Companies
 Act, 1956, with respect to Directors Responsibility Statement, the
 Directors confirm:
 
 - The applicable accounting standards have been followed and that no
 material departures have been made from the same.
 
 - Reasonable and Prudent Accounting Policies have been adopted in
 Preparation of the Financial Statements. The Accounting Policies have
 been consistently applied except for the changes mentioned in Notes
 forming part of Accounts.
 
 - Proper and sufficient care has been taken 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.
 
 - The annual accounts have been prepared on a going concern basis.
 
 Insurance:
 
 Assets of your Company are adequately insured against various perils.
 
 Personnel:
 
 The Particulars as prescribed under Section 217(2A) of the Companies
 Act, 1956 read with the Companies (Particulars of Employees) Rules,
 1975, are set out in an Annexure-lll to this report.
 
 Auditors:
 
 Your Companys Auditors M/s. S. R. Batliboi & Associates, Chartered
 Accountants, Gurgoan, hold office until the conclusion of the ensuing
 Annual General Meeting. The Company has received a written certificate
 from the Auditors to the effect that their re-appointment, if made,
 would be within the prescribed limit under Section 224(1B) of the
 Companies Act, 1956.
 
 Auditors Report:
 
 The Auditors Report on the accounts of the Company for the accounting
 year ended 31st March, 2008 is self explanatory and needed no comments
 or explanation under Section 217(3) of the companies Act, 1956.
 
 IT System:
 
 To cater to the fast growing IT Infrastructural requirements of the
 business, the following technological solutions/systems have been
 implemented:
 
 - SAP ERP system for Procurement, Enterprise Asset Management &
 Financial processes.
 
 - Implemented Integrated Port Management System (IPMS) and Navis
 Applications for Terminal Operations (TOS), which are seamlessly
 integrated with SAP system.
 
 - Created a world-class Data Center Infrastructure at Mundra Corporate
 Office.
 
 - Redundant and fault tolerant wireless MESH Network at Container
 Terminal for Handheld Terminals (RDT) and Vehicle Mounted Terminals
 (VMT).
 
 - High availability Server and Storage Architecture.
 
 In order to enhance the existing IT Infrastructure for competitive
 advantage; the following IT initiatives have been undertaken:
 
 - Development of user friendly Enterprise Portal with Employee Self
 Services (ESS).
 
 - Development of Management Information and Decision Support Systems
 using SAP Bl functionality.
 
 Acknowledgment:
 
 In consonance with established maxim that the Company is only as good
 as its people, your Company has put together a team of highly qualified
 and experienced professionals.
 
 The success achieved by your Company and the progress made by it are
 due to the co-operation, efforts and commitment of all concerned with
 its affairs, including the Government of India, Government of Gujarat,
 Gujarat Maritime Board, Directors, Financial Institutions, Banks,
 Shareholders, executives, officers and other employees of your Company.
 The management expresses gratitude to the investors for their
 confidence reposed in the Company and co-operation, and especially to
 the employees for their dedicated services and support.
 
                            For and on behalf of the Board of Directors
 
 Date : 28th May, 2008                               Gautam S. Adani
 Place: Ahmedabad                           Chairman & Managing Director