Adani Enterprises Ltd

The Management’s views on the Company’s performance and outlook are discussedbelow:

Economic Outlook

Our growth in the year 2010-11 has been swift and broad-based. The economy is back toits pre-crisis growth trajectory. While agriculture has shown a rebound, industry isregaining its earlier momentum. Service sector continues its near double digit run. Fiscalconsolidation has been impressive. This year has also seen significant progress in thosecritical institutional reforms that would set the pace for double-digit growth in the nearfuture. The Gross Domestic Product (GDP) of India is estimated to have grown at 8.6 percent in 2010-11 in real terms. More importantly, the economy has shown remarkableresilience to both external and domestic shocks. Though the development on India’sexternal sector in the current year have been encouraging, our principal concern this yearhas been the continued high food prices. Your Company continued to strengthen itsbusinesses and has sustained its position in the global market and posted encouragingperformance for the year under review.

Core Businesses........emerging Energy & Logistics Conglomerate........

The Company is a diversified conglomerate based in India having a global footprint withprimary interests in Energy and Logistics sectors. The Company has integrated presenceacross the value chain from Integrated Coal Management Coal Mining Ports and LogisticsPower Generation and Transmission. Our unique strengths lie in being able to integrateacross the value chain, right from mining to rail and port logistics, shipping and finallyto power generation. The Company has diversified interests in Power, Mining, Oil and GasExplorations, Natural Gas Distribution businesses supported by Port, Shipping and Tradingactivities.

• Coal mining

Our coal mining business involves mining, processing, acquisition, exploration anddevelopment of mining assets.

• Coal Mining in Indonesia

PT Adani Global, Indonesia a wholly-owned subsidiary of the Company, has been awardedcoal mining concessions in PT Lamindo Inter Multikon and PT Mitra Niaga Mulia (its stepdown subsidiaries) in Bunyu island, Indonesia from which coal is used for the captiveconsumption in power projects being developed by Adani Power Ltd. in Mundra. The BunyuMine has reserves of approx. 150 million metric tonnes and 2.52 million metric tonnes(MMT) of coal is mined from the same during the year 2010-11. The Company has during theyear under review imported Continuous Miner from Joy Mining Machinery Limited, USA , whichwill increase the coal mining capacity in the FY 2011-12.

• Coal Mining in Australia

During the year under review, the Company has acquired 100% interest in the GalileeCoal Tenement in Queensland, Australia having estimated resource of 7.8 billion tonnes.The mine is capable of producing up to 60 million tonnes of coal at peak capacity. Thecoal mine is located in Central Queensland, approx. 300 km south of Townsville and 280 kmwest of Mackay. The proposed investment by the Company in Australia represents the largestever Indian investment in Australia. The Company will also be developing associated railand port facilities to evacuate coal from the Mine. We are targeting first coal by the endof FY 2015 and a production of between 50 and 60 MMTPA to be achieved by FY 2022.

• Domestic Coal Mining Operations

In India, as a part of the public private partnership model, Government sectorcompanies, which are allotted coal blocks, appoint a mine developer and operator("MDO") to undertake all activities relating to the development and operationsof a coal block allotted.

• Parsa East and Kente Basan Coal Block

Rajasthan Rajya Vidyut Utpadan Nigam Limited (RRVUNL) has been allocated the Parsa Eastand Kente Basan coal blocks at Chhattisgarh. The Company entered into a joint ventureagreement with RRVUNL to form Parsa Kente Collieries Limited ("PKCL"), whereinwe own 74% equity interest and the remaining 26% equity interest is owned by RRVUNL. TheCompany through it 100% subsidiary, Adani Mining Private Limited, is developing the saidcoal block. The project has already achieved substantial progress and is awaitingenvironment and forest clearance to start physical development of the coal block. Inaddition, we have been granted clearance from the Ministry of Railways for the movement ofcoal from the coal blocks at Parsa East and Kente Basan to the power plants beingdeveloped by RRVUNL. Parsa - Kente Coal Block is having 27.67 sq. km. area and MineableCoal reserves of 450 Million Metric Tonnes. We expect to commence the commercialproduction from the year 2012.

• Machhakata Coal Block

The Company entered into coal mining services agreement with Mahaguj Collieries Limitedfor the development and operation of Machhakata coal block in Orissa. This entails thedevelopment of the coal block, mining of coal from the coal block and supplying coal tothe designated power plants of Maharashtra Power Generation Company Limited and theGujarat State Electricity Corporation Limited. Machhakata Coal Block is having 20.43 sq.km. area and Mineable Coal reserves of 1244.35 Million Metric Tonnes. We expect tocommence the commercial production from the year 2013.

• Parsa Coal Block

Chhattisgarh State Power Generation Company Ltd. (CSPGCL) has been allocated the ParsaCaptive Coal Block situated in the District Surguja (Ambikapur), Chhattisgarh having 12.52sq. km. area and Geological Coal reserves of 150 Million Metric Tonnes. The Company hasentered into a joint venture agreement with CSPGCL and formed joint venture Company,CSPGCL AEL Parsa Collieries Ltd., ("JVC") in the state of Chhattisgarh whereinwe own 49% equity interest. The business of the JVC shall be to develop and operate theParsa Captive Coal Block in Hasdeo Arand Coalfield of SECL Command area in the District– Surguja (Ambikapur) of the Chhattisgarh State and transportation of coal upto EndUse Thermal Power Station located at Marwa in Janjgir – Champa Dist., Chhattisgarh.The Commercial production is expected to commence from the year 2014 onwards.

• Chendipada Coal Block

The Company has formed a 100% subsidiary namely Chendipada Collieries Pvt. Limited, todevelop and operate the Chendipada coal block in the District – Angul in the state ofOdisha for exclusive use of UCM Coal Company Limited (Joint Venture of Uttar Pradesh RajyaVidyut Utpadan Nigam Limited, Chhattisgarh Mineral Development Corporation Limited andMaharashtra State Power Generation Company Limited) and also beneficiation, transport anddeliver coal to end up power projects of Uttar Pradesh, Chhattisgarh and Maharashtrastate. The Chendipada Coal Block is having 21.91 sq. km. area and mineable Coal reservesof around 1500 Million Metric Tonnes. We expect to commence the commercial production fromthe year 2015.

• Coal trading

The Company is the largest Integrated Coal Manager (ICM) for a large body of powerproducts. As India’s power demand soars, the importance of coal increases in theoverall Power value chain. Although India is one of the largest coal consuming andproducing nations in the world, it heavily depends on imported coal.

Today, the Company is the largest private sector coal importer into India and continuesto improve its coal business by expanding its sourcing network, cost effective shippingand timely door delivery structure at the power stations.

The Company has entered into long-term arrangement for uninterrupted supply of importedcoal with some of the biggest suppliers in Indonesia. Coal demand is expected to increasesubstantially in the coming years, which will strengthen the Company’s presence inthis segment.

The Company undertakes coal trading business directly and through its subsidiaries,Adani Global FZE, Dubai and Adani Global Pte Singapore. We believe that we were one of thelargest traders of coal in India for fiscal 2011. We source coal mainly from suppliers inIndonesia, South Africa and Australia and supply it to various states within India.

• Ports and Logistics

The Company’s subsidiary, Mundra Port and SpecialEconomic Zone Ltd. under review.

• Highlights of the Overall Performance:

• Total number of vessels handled at Mundra Port 2,517 (2,339 vessels in 2009-10i.e. a growth of 9.3% year on year)

• Cargo volumes have improved across all segments (cargo handeled in 2009-10 was40. million tonnes which shows a growth of 27.97% year on year).

• Railway

• Total number of rakes handled in 2010-11 is 8,121

• Commissioning of four lines at R&D Yard with RRI (Route Relay Interlocking)type of signaling system

• Works on the anvil:

• Doubling of 64 KM railway track from Adipur to Mundra has been commenced in2010-11 and expected to be completed by second quarter of 2012-13.

• 22.66 million ton of dry cargo handled during 2010-11.

• Mundra Port has crossed one million TEU’s mark during the financialyear and ended handling total 1 becoming third port in country to reach one million TEUthroughout.

• Largest container ship to call to India so far, the MSC’s operated8,400 TEU vessel M. V. Northern Jaguar called at AMCT on 12th October 2010.

• Mundra Port West basin commenced its commercial operations on 12th December,2010 with the berthing of its first cargo vessel

• M.V. CSK Beilun with LOA of 289 mtrs. and beam of 45 mtrs. With thecommissioning of the West Basin, Mundra Port has become the world’s largest coalreceiving terminal with 60 MMT capacity.

• Mundra port became the only port in India to have its own mini shipyard inwhich air balloon technology was used to up

• Total 1,05,382 cars exported in the financial year 2010-11.

• Executed first shipment (Stock Yard, Mumbai to Vessel) of Tata Motorscomprising of 5 trucks in January, 2011. first port in India to take up this activity as asingle window activity.

• New Vegetable Oil tank farm (encl. 15 & 16) with a capacity of 80,000 KLconstructed.

• Highest single export consignment handeled with 39,338 MT in August 2010.

• Special Economic Zone

During the year, Mundra Port has focused on development of robust infrastructure forsupporting the industrial development within the Special Economic Zone (SEZ). Constructionof Road Over Bridge within the Zone has been completed enabling seamless connectivity tothe Port and SEZ development. Elaborate arterial road network has been completed for SEZusers. treatment plant (CETP), water desalination plant has also been completed. Work fordoubling of Mundra-Adipur rail line has been undertaken.

The Co-developers of SEZ have provided various social infrastructure facilities such ashousing, hospital, school in the SEZ MPSEZ Utilities Private Limited (MUPL), a 100%subsidiary of Mundra Port and approved co-developer, has developed electricitydistribution network and started distribution of electricity in the SEZ. In addition tothe eight Co-developers have obtained approval for setting up LNG Facilities & Gasbased power plant, Airport and related infrastructure facilities and Industrial TrainingInstitute.

The Development Commissioner’s Office is functional within the SEZ and the SEZunits are obtaining required approvals within the Zone itself By now total 22 units havebeen approved for setting up manufacturing and service facilities in the SEZ. expected tobe more than Rs. 4,200 Crores. Some of the approved units have already started exportactivities in the Zone.

• Power Generation and Transmission

Adani Power Ltd., our subsidiary together its subsidiaries currently has nine powerprojects with a combined installed capacity of 16,500 MW, out of which 1980 MW has beencommissioned, 7,260 MW is under implementation and 7,260 MW is at the planning stage. Thesaid Company intends to sell the power generated from these projects under a combinationof long-term PPAs and on merchant basis. The said Company gets the synergistic benefit ofintegrated value chain of Adani Group.

A. The power projects of 4,620 MW Capacity being developed at Mundra, Gujarat are asfollows:

• Mundra phase I and II power project ("Mundra I and II") is having fourcoal-fired, sub-combined capacity of 1,320 MW. The last two 330 MW units of Mundra Phase Iand II Power Project were commissioned in August 2010 and December 2010. For the periodbetween April 2010 and March 2011, Phase I and II operated at an average PLF of 85%generating 7,241 million units of electricity and during the last quarter ending March2011, Phase I and II of power project achieved PLF of 92%.

• Mundra phase III Power Project ("Mundra III") is having two coalfired, super-capacity of 1,320 MW. Phase III Power Project’s first unit of 660 MW wascommissioned in February 2011, which is India’s first supercritical unit.

• Mundra phase IV Power Project("Mundra IV") will have three coalfired,super-capacity of 1,980 MW. The entire Phase is expected to be fully commissioned by April2012.

B. The Power Projects of 3,300 MW capacity being developed at Tiroda, Maharashtra areas follows:

• Tiroda I and II Power Project ("Tiroda I and II"), being developed byAdani Power Maharashtra Limited ("APML") (a subsidiary of Adani Power Ltd.),will have three coal fired, super-critical generation units of 660 MW each, with combinedcapacity of 1,980 MW. The BTG package and BoP package for the Power Project have beenawarded.

• Tiroda III Power Project ("Tiroda III"), which is also being developedAPML, will have two coal fired, super-MW each, with combined capacity of 1,320 MW. The BTGpackage for the Power Project has been awarded.

C. The Power Project of 1,320 MW capacity being developed at Kawai, Rajasthan is asfollows:

• Kawai Power Project, being developed by Adani Power Rajasthan Limited("APRL") (a 100% subsidiary of Adani Power Ltd super-critical generation unitsof 660 MW each, with combined capacity of 1,320 MW. The BTG package and BOP package forthe Power Project has been awarded. By FY 14, entire 1,320 MW capacity is expected to becommissioned.

• Chhindwara Power Project, being developed by Adani Pench Power Limited("Adani Pench") (a 100% subsidiary of Adani Power Ltd), pursuant to a Letter ofIntent (LoI), from Madhya Pradesh Power Trading Company Limited (M.P. Tradeco) to set up a1,320 MW thermal power project based on super-critical technology. The term of referencehave been obtained from MoEF, GoI.

• Dahej Power Project, proposed to be developed by Adani Power Dahej Limited("APDL") (a 100% subsidiary of Adani Power Ltd a coal-based Power Project withan aggregate capacity of 2,640 MW. The terms of reference have been obtained from MoEF,GoI.

• Bhadreshwar Power Project proposed to be developed by Kutchh PowerGeneration Ltd. will be a coal-based Power Project with an aggregate capacity 3,300 MW.The terms of reference have been obtained from MoEF, GoI.

• Power trading

There exists a large gap between supply and demand of Power in large parts of thecountry. Inherent diversity in demand of various States in the country also results inperiods of seasonal surplus in one State or Region coinciding with periods of deficit inanother.

To capitalize on this growing opportunity sector, the Company undertakes power tradingactivities and has been designated as a "Category I" power trader by CERC untilJune 2029. Further, we have obtained membership of the first power exchange in India,Indian Energy Exchange Limited ("IEX") in Fiscal 2008. Our membership of IEXallows us to trade energy units online and widen the scope of our trading business.

Major part of our power trading business is now focused towards selling power of ourown group’s power project merchant capacities mostly on short term & day aheadbasis. Trading of power sourced from others has substantially reduced.

• Real Estate Portfolio

We operate the real estate sector through our subsidiary, Adani Infrastructure andDevelopers Private Limited ("AIDPL"). AIDPL is the holding Company of our realestate business and each project is undertaken through separate SPVs.

The break-up of the planned development activities are as follows:

• "Shantigram", Integrated Township at Ahmedabad, Gujarat

Shantigram Estate Management Private Limited, a 100% subsidiary of AIDPL has receivedthe approval for development of Shantigram Township at Ahmedabad from the Government ofGujarat. The master plan of the Township is also duly approved by the Ahmedabad UrbanDevelopment Authority (AUDA). The project is being developed by Adani Township and RealEstate Company, of which AIDPL owns 75.00%. The total developmental area of the Townshipshall be 42 million square feet. The project involves development of an IntegratedTownship having residential, commercial and community development and to provide amenitiessuch as recreation, sports and leisure. The Township has already launched for bookingsduring the third quarter of FY 2010-11 and has received an overwhelming response. TheTownship has already achieved Bookings for more than 2 million square feet and bookingshave been opened for Phase II.

• Bandra-Kurla Complex (BKC) – Mumbai, Maharashtra

Bandra Kurla Complex ("BKC") is planned to be developed as an integratedprime commercial property in Mumbai. Adani Developers Private Ltd (ADPL), a 100% ownedsubsidiary of AIDPL, is developing 1.50 million square feet of development area in BKC atthe International Finance and Business Centre. We are developing multi-storey towers andexpect to complete the project by the year 2013.

• Khatau – Mumbai, Maharashtra

We are planning to develop a residential complex in Borivali, Mumbai of a developmentarea of approx. 1.20 million square feet and a residential cum commercial complex inByculla, Mumbai of a development area of approximately 0.70 million square feet both ofwhich are a part of Mill Land Development Programme. We expect to commence the developmentof residential cum commercial complex in Byculla, Mumbai during the FY 2011-12. Both theprojects are in joint venture with the Marathon Group in which our stake is 60%.

• New initiative at Gurgaon

AIDPL has acquired development rights admeasuring 3.75 million square feet at Gurgaonand has initiated the approval process for the development of the same.

• City gas distribution

Our city gas distribution business is undertaken through our Wholly Owned Subsidiary,Adani Gas Limited ("Adani Gas") with an objective to provide Piped Natural Gas("PNG") to household and industrial consumers and Compressed Natural Gas("CNG") for use in automobiles. Adani Gas has set up a gas distribution networkof approximately 345 km of steel pipeline network and approximately 2,000 km ofpolyethylene pipelines spread across Ahmedabad and Vadodara in Gujarat and Faridabad inHaryana, Noida, Khurja and Lucknow in Uttar Pradesh and Jaipur and Udaipur in Rajasthan,and 58 CNG stations in Ahmedabad and Vadodara in Gujarat and Faridabad in Haryana. AdaniGas is also serving approx. 450 industrial units, 90,000 households and 700 commercialunits in these cities through its infrastructure network.

Adani Gas has received "No Objection Certificates" from respective StateGovernments to develop, construct, own, operate and maintain city gas distributionprojects in Lucknow, Noida, and Khurja in Uttar Pradesh, and Udaipur, Jaipur in Rajasthan.It has already initiated the infrastructure development in these cities to meet the fuelneeds of industrial and domestic consumers. Pursuant to the enactment of the Petroleum andNatural Gas Regulatory Board Act, 2006, Adani Gas has applied to Petroleum and Natural GasRegulatory Board for authorisation of its operations in Lucknow, Noida, Khurja, Udaipurand Jaipur.

• Oil and gas exploration (65 : 35 JV with Welspun Group of Gujarat)

As part of our integrated strategy we have entered the oil and gas exploration sectorand formed a joint venture, Adani Welspun Exploration Limited ("Adani Welspun")in which we have 65% stake.

• Domestic Oil and Gas Blocks

The Company, in a consortium with Naftogaz India Private Limited and Welspun group havebeen awarded 2 Oil and Gas blocks under NELP VI (Assam Block & Palej Block) whichcovers a total area of approx. 95 and 75 square kms respectively. The Company holds 55%participating interest in each of the aforesaid two blocks and is a non-operator. Theseismic acquisition, processing & interpretation activity have already been completedin both the blocks. The consortium has also successfully completed the drilling campaignof three wells in Palej Block whereas the drilling in the Assam Block is to commenceduring the year 2011-12.

Adani Welspun was awarded a 100% participating interest in Block under NELP VII("Mumbai Offshore Block") under a production sharing contract which covers atotal area of approx. 1191 square kms. The seismic acquisition, processing &interpretation activities have already been completed in the block while the drillingactivity is likely to commence during the 3rd Quarter of FY 2011-12.

Adani Welspun in a consortium with Oil and Natural Gas Corporation Ltd("ONGC"), Indian Oil Corporation Ltd ("IOC") and Gujarat StatePetroleum Corporation Ltd (GSPC) have been awarded an exploration block located offshorein the Gulf of Kutchh region covering a total area of approx. 1264 square kms. The saidCompany also in a consortium with ONGC and IOC has been awarded another exploration blocklocated offshore in the Gulf of Kutchh region which covers a total area of approx. 1242square kms. Adani Welspun has 20% & 30% participating interest in the aforesaidrespective blocks and is a non-operator. The 3 D Seismic Data Acquisition activities havealready been started in both the blocks.

• Overseas Oil and Gas Blocks

Adani Welspun was awarded petroleum concessions of two onshore blocks, L39/48 andL22/50 with a total area of approx. 3,975 square km. and 3,947 square km. respectively,for a period of six years by the Ministry of Energy of the Government of Thailand. The 2 DSeismic Acquisition, Processing and Interpretation has already been completed in both theblocks. The Company is likely to commence drilling operations during the third quarter ofthe FY 2011-12.

Adani Welspun, in consortium with GSPC, was awarded an Exploration block in Egypt. Thisblock is located offshore in the Gulf of Suez region and covers total surface area ofapprox. 108 square kms. Adani Welspun holds 40% participating interest in the consortiumand is a non-operator.

As part of its strategy for growth Adani Welspun is actively pursuing various businessopportunities globally as well as within the country to acquire assets that are indevelopment, re-development or production.

• Ship Fuelling (51:49) JV with Chemoil Energy Ltd. of Singapore

Chemoil Adani Pvt. Ltd. (CAPL) our 51% : 49% joint venture Company with Chemoil Group,Singapore continues to be leading Ship bunker (Fuel oil and Marine Gas Oil) supplier inIndia. During the year under review, CAPL has leased one floating barges with anapproximate capacity of 3000 metric tons to refuel vessels. CAPL is planning for expandingits physical operations at ports like Goa, Haldia, Paradeep during the FY 2011-12.

• Edible oil and Agro-commodities trading

We entered the edible oil refining business through a 50:50 joint venture Company,Adani Wilmar Ltd. (Adani Wilmar) with Singapore’s Wilmar Group.

Adani Wilmar’s flagship brand "Fortune" has been repositioned with a newmantra of ‘Joy of Eating’. Since its launch in 2000, Fortune took just 20 monthsto become India’s No.1 edible oil brands, and is still at the top of the charts. Asper Nielsen RSA February 2010-11 report, Adani Wilmar’s brands hold No. 1 position inrefined Soyabean and Mustard oil, No. 2 in Palmolein and No. 3 in Refined Sunflower oil.

"Fortune" also became the 1st edible oil brand to be associated with majorsporting events of Common Wealth Games 2010 and ICC Cricket World Cup 2011.

Adani Wilmar has recently launched value added oil "Fortune Plus", the newhealthy & light edible oil keeping the health conscious consumers in mind. FortunePlus is a unique Product Offering a variety of special features to appeal to the young andhealth conscious India. The low absorption oil is endorsed by badminton ace SainaNehwal.

Our "Fortune" brand products are available in a range of edible oilsincluding, soya oil, sunflower oil, groundnut oil, non-refined mustard oil and cotton seedoil. Other growing brands of Adani Wilmar are "Raag", "Jubilee","Kings", "Ivory", "Bullet", "Fryola" and"Avsar". In India, Adani Wilmar has also added Vanaspati Ghee under its"Raag" brand, Basmati Rice under its "Pilaf Gold" and bakeryshortening under its "Jubilee" brand to its product basket.

Adani Wilmar’s acquisitions have led to expanding the existing brand range byadding brands like Aadhar, Alpha, Alpha Cookwell, Aadhar Bakewell and A-Kote.

Adani Wilmar has set up India’s first port based refinery at Mundra, Gujarat.Today the Mundra refinery is one of India’s largest and most sophisticated oilrefineries. Adani Wilmar has production infrastructure across the country with a crushingcapacity of over 6000 TPD (Tonnes per Day) and Refining capacity of over 5000 TPD. AdaniWilmar is one of the very few national players in the Industry to have this massiveproduction infrastructure, with all its plants so strategically located to take advantageof the Import Parity and Domestic crop season.

Adani Wilmar also has packing operations at Kadi [Gujarat], Latur [Maharashtra], Jaipur[Rajasthan], Dharwad [Karnataka], Dewas [Madhya Prades], Nagpur [Maharashtra] and Cochin[Kerala].

With 80 branches, 5000 distributors catering to 1 million outlets, Adani Wilmar’sproducts reach to 20 million households across India. Following the success in India,Adani Wilmar introduced branded Edible oil to Middle-East and is now exporting itsproducts to more than 19 countries in the Middle-East, South East Asia & East Africa.

We have a diverse product mix in respect of agro-commodities, which includes foodgrains, castor oil, pulses, soya meal, rapeseed meal and castor meal.

• Agro-storage business

Our Wholly Owned Subsidiary, Adani Agri Fresh Limited ("Adani Agri Fresh")has been developing integrated storage, handling and transportation infrastructure. AdaniAgri Fresh has set up modern controlled atmosphere storage facilities at three locations,Rewali, Sainj, and Rohru in Himachal Pradesh with a combined capacity of approximately18,000 metric tonnes of Apple per year. Adani Agri Fresh has also set up a marketingnetwork in major towns across India to cater to the needs of wholesale, cash and carry andorganized retail customers. Adani Agri Fresh markets Apple under the brand name"Farm-pik" across the country.

During the year under review, Adani Agri Fresh has also started importing Apple, Pear,Kiwi, Orange etc from various countries for sale in India.

• Agro-supply business

Our Wholly Owned Subsidiary, Adani Agri Logistics Limited ("AALL") hasentered into a service agreement with the Food Corporation of India (FCI) to implement abulk food grains handling, storage and transportation network on a commercial Build, Own,and Operate basis. Pursuant to this, AALL has developed, designed, financed, constructed,& currently operates and maintains facilities for bulk handling and storage of foodgrains procured and handled by FCI for distribution. AALL has invested close to Rs. 700Crores in the entire infrastructure. The project is on a 20 year guarantee period from theMinistry of Food & Consumer Affairs. At present, AALL has seven storage facilities inIndia, including Moga, Kaithal, Hooghly, Navi Mumbai, Chennai, Coimbatore and Bangalore.The total storage capacity of 5.5 Lac MT foodgrain is spread across these seven locations.AALL plans to create more storage capacities and related infrastructure at multiplelocations across India to expand its business.

• Competition

The businesses in which the Company is engaged are highly competitive and hascompetitors in each of its major business operations on a local, regional, national andinternational level. Although barriers to entry are high in a number of the Company’sbusinesses due to the costs associated with sourcing commodities and managing theirtransportation, the Company faces additional competition from new entrants and from itsexisting customers who are becoming more involved in sourcing to satisfy their own supplyrequirements. Any failure to compete effectively, including any delay in our reactions tochanges in market conditions, may affect our competitiveness, thereby reducing our marketshare and resulting in a decline in our revenues.

We believe our competitive strengths include:

o We have developed ability and expertise to leverage our existing assets andexperience to expand our product portfolio, geographical coverage and market presence tocater to increases in demand of our products.

o The Company invests significant management resources towards ensuring that itsbusinesses are integrated in an efficient and organized manner that enables it to maximizethe synergies that exist amongst them and provide end-to-end services.

o Our trading businesses are complemented with our relatively new businesses, such aspower generation and transmission, coal mining and oil and gas exploration. Additionally,we also undertake oil and gas exploration which may, in the future, enable us to addressany PNG/CNG demands from our gas distribution business.

o Our diversified businesses also diminish the risks associated with the specificdynamics, such as seasonality and cyclicality, of any particular industry sector.

o With the growth of our operations and our foray into new business segments in recentyears, we have been able to access new geographic markets successfully.

o We believe our diverse geographical presence enables us to monitor and respond toglobal supply and demand imbalances, identify opportunities for strategic investments andenhance strategies for substitution of suppliers.

o In addition to our trading business, we have focused on new businesses, such as ourpower generation and transmission, solar energy, coal mining, oil and gas exploration, andproperty development businesses. We have also entered into joint ventures and strategicalliances with leading market players to grow our businesses. We continually seek toidentify and enter into business activities that we consider to be high growth businesses,such as infrastructure and energy business.

o We have a strong track record in the successful development and execution of projectsover a wide range of industries. We believe that our access to financing sources, partnersand industry expertise enables us to identify and value new projects effectively, assessrisks and compare evaluation results against our experience. Further, we believe that ourexpertise in the successful execution of projects provide us with a significantcompetitive advantage.

o We will continue to focus on and seek to enter higher value businesses, which webelieve present attractive opportunities and enable us to reduce our exposure to thecyclicality of the commodities trading business. We are actively focused on becoming adiversified infrastructure player.

Risk Management

Risk Management is looked upon as a facet of governance contributing towards greaterpredictability in performance and value creation. The Risk Management framework of theCompany ensures, amongst others, compliance with the requirements of Clause 49 of theListing Agreement. The framework establishes risk management across all service areas andfunctions of the Company and has in place procedures to inform the Audit Committee andBoard Members about the risk assessment and minimization process. These processes areperiodically reviewed to ensure that the management of the Company controls risks througha defined framework. The various risks, including the risks associated with the economy,regulations, competition, foreign exchange, interest rate etc., to which the Company andits subsidiaries are primarily exposed are monitored and managed effectively. The Companyhas adequate insurance coverage for various risks to its assets.

Internal Control Systems

The Company has appropriate internal control systems for safeguarding theCompany’s assets against loss from unauthorized use and ensure proper authorizationof financial transactions and compliance with applicable laws and regulations. The Companyhas an exhaustive budgetary control system to monitor all expenditures against approvedbudgets on an ongoing basis. Clearly defined roles and responsibilities for all managerialpositions drive adherence of defined processes. Process controls are reviewed periodicallyand strengthened. The operating parameters are also monitored and controlled. TheCompany’s accounting process is based on uniform accounting guideline that sets outaccounting policies and significant processes and deadlines on a Company wide basis. TheCompany has also successfully implemented SAP system for every possible area ofdeployment. SAP is the most suitable Enterprise Resource Planning software, which providesfor availability of robust information and can be operated from anywhere in the world.

The Company has an internal audit function, which is empowered to examine the adequacyand compliance with policies, plans and statutory requirements. It is also responsible forassessing and improving the effectiveness of risk management, control and governanceprocess. The audit committee of the Board of Directors actively reviews the adequacy andeffectiveness of internal control systems and suggests improvements for strengtheningthem, as appropriate.

The management duly considers and takes appropriate action on the recommendations madeby the statutory auditors, internal auditors and the independent Audit Committee of theBoard of Directors.

Financial Performance with respect to operational performance

The Company delivered superior financial performance with improvements across keyparameters. Discussion on Consolidated Financial Statements and Operational Performance isgiven below:

• Key Performance Indicators (Consolidated)

( Rs. In Crores)

Revenues

The Sales and Operating Earnings for the year ended 31st March, 2011 stood at Rs.26,826.74 Crores, as compared to Rs. 26,019.48 Crores during the previous year. TheComparative position of Sales and Operating Earnings achieved by the Company is as under :

Fixed Assets :

The Gross Block stood at Rs. 19,050.28 Crores and Net Block stood at Rs. 17,257.39Crores as at 31st March, 2011 respectively as compared to Rs. 4,960.33 Crores and Rs.4,577.28 Crores respectively during the previous year.

• Depreciation and Finance Charges

Depreciation expenses increased to Rs. 1,792.89 Crores for the year ended 31st March,2011 showing an increase by 368%, as against Rs. 383.05 Crores for the previous year.

Finance charges for the year stood at Rs. 633.37 Crores as compared to Rs. 603.97Crores during the previous year.

• Profits and profitability

The Company generated a profit before finance charges, depreciation, tax and afterprior period adjustments & exceptional items (EBIDTA) of Rs. 4,465.41 Crores for theyear ended 31st March, 2011 showing an increase by 145% as against Rs. 1,822.96 Crores forthe previous year.

Net profit for the year ended 31st March, 2011 was Rs. 2,476.09 Crores as against Rs.919.30 Crores for the previous year resulting in a growth of 170%.

Earnings per share (EPS) of the Company as on 31st March, 2011 is Rs. 26.28/- on facevalue of Rs. 1 each.

Material Developments in Human Resources / Industrial Relations

Human capital has continued to be the key engine for our growth and aspirations. Wehave been constantly reviewing our HR policies and practices to keep abreast with themarket changes and have embarked upon several initiatives to focus on creating a positivework environment that provides employees with ample growth and development opportunitiesas well as ensuring high levels of motivation and engagement.

During the year under review, Group HR organized a structured and systematic process– "VARTALAP" across the Adani Group to take feedback from concernedstakeholders directly on strength and opportunities for improvement of HR processes.

To promote a sense of belongingness and motivation among employees by recognizing andrewarding exemplary behaviour / contribution of employees instantaneously on the spot fordemonstrating positive behaviour, during the year under review, the Group HR introduced an"Employee Spot Recognition Scheme". This scheme is being introduced with anobjective to –

o Encourage safe work environment

o Promote comradeship among employees

o Driving positive change

o Satisfaction of the human need for appreciation

o Communication to others the values and behaviours that are important to theorganization

o Improvement of employee morale and satisfaction

Industrial Relations continue to be cordial.

Cautionary Note

Statements in the Management Discussion and Analysis describing the Company’sobjectives, projections, estimates and expectations may constitute a "forward-lookingstatement" within the meaning of applicable securities laws and regulations. Actualresults could differ materially from those expressed or implied. Important factors thatcould make a difference to the Company’s operations include economic conditionsaffecting demand/supply and price conditions in the domestic markets in which the Companyoperates, changes in the Government Regulations, tax laws and other statutes and otherincidental factors.

The Company assumes no responsibility to publicly amend, modify or revise anyforward-looking statements on the basis, of any subsequent developments, information orevents.