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Adani Wilmar Limited

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Sales & Other Income

20413 25000 20000 20001500-

Net Worth

500-

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Adani Wilmar Limited

Board of Directors
Mr. Gautam S. Adani Mr. RajeshS. Adani Mr. Kuok Khoon Hong Mr. Chua PhuayHee Chairman Managing Director Director (Mr. Kamlesh Kumar, Alternate Director) Director (Mr. T. K. Kannan, Alternate Director)

Registered & Corporate office

Fortune House, Near Navrangpura Railway Crossing, Ahmedabad 380 009

Plants
Navinal Island, Village-Dhrub, Taluka-Mundra, Kutch, Gujarat-376 421 Tungabhadra, Mantralayam (R.S.), Kurnool Dist., Andhra Pradesh-518 397 Silor Road, Kota-Jciipur Highway, Bundi, Rajasthan-323 001

Bankers
State Bank of India Bank of India Bank of Baroda UCO Bank Andhra Bank Syndicate Bank Punjab National Bank The ING Vysya Bank Limited Industrial Development Bank of India State Bank of Hyderabad Canara Bank State Bank of Saurashtra Standard Chartered Bank Oriental Bank of Commerce

Auditors
M/s. Dharmesh A. Parikh & Associates Chartered Accountants Ahmedabad

Company Secretary
Mr. Rajesh Shroff

Contents
Notice Director's Report Auditor's Report Balance Sheet Profit& Loss Account Schedules Notes forming part of the Accounts 02 03 06 08 09 10 16

AnnualReport

2004-2005
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AYA
Adani Wilmar Limited

Notice

1 /, H>

NOTICE is hereby given that the Seventh Annual General Meeting of the Company will be held on Mondtsy^the 39rd day of May 2005 at 11:00 a.m. at Board Room, Adani House, Nr. MithakhaliSix Roads, Navrangpura, Ahmedabad-380009, to transact the following business:

ORDINARY BUSINESS:
1. To receive, consider and adopt the audited Balance Sheet as at 31 st March 2005 and Prof it and Loss Account for the Financial Year ended on that date and the Reports of the Directors and Auditors thereon. 2. To appoint a Director in place of Mr. Chua PhuayHee, who retires by rotation and, being eligible, has offered himself for re-appointment. 3. To appoint Auditors to hold off ice from the conclusion of this Meeting until the conclusion of the next Annual General Meeting of the Company and to fix their remuneration.

By Order of the Board Ahmedabad Date: 29th April 2005 Gautam S. Adani Chairman

Registered Office: "Fortune House", Near Navrangpura Railway Crossing, Ahmedabad-380009.

NOTES:
1. A member entitled to attend and vote atthe meeting is entitled toappointa proxyto attend and vote instead of himself & the proxy need not b, member. 2. The instrument appointing the proxy should, however, be deposited at the Registered Office of the Company not less than 48 hours before the commencement of the meeting.

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AVA
Adani Wilmar Limited

Director's Report
Dear Members, Your Directors are pleased to present the seventh Annual Report of your Company with the Audited Accounts for the financial year ended 31st March 2005. For the 4th consecutive year FORTUNE brand is the largest selling edible oil brand in India with increased market share of 22%, as per the latest AG Nielsen ORG Marg Report. Inspired by good consumer response in Middle east countries, your company has launched 'FORTUNE' brand in Dubai on 23rd Feb2005. Fortune refined edible oil will now be available in all the Gulf countries. These countries will be followed by market across Africa and South-East Asia.

FINANCIAL PERFORMANCE

(Rs. in million)

Particulars
Sales and operating income Profit before interest, depreciation & taxes Financial costs Profit before depreciation & taxes Depreciation Profit before taxes Provision for taxes (Incl. exces provision of earlier years written bank) Profit after taxes Surplus brought forward from earlier years Balance available for appropriation Transfer to general reserve Balance carried to balance sheet

For the year ended on 31 .03.2005 20353.89 246.01 166.90 79.11 76.22 2.89 (9.39)

For the year Ended on 31. 03.2004 18253.79 466.07 135.02 331.05 41.02 286.87 110.10 176.77 87.17 263.94 150.00 113.94

12.28 113.94 126.22

126.22

OPERATIONS
During the year under review, the Company has crossed turnover of Rs.20,000 Mn, which shows growth of 11.50% over the previous year. Due to Industry consolidation, demand constraints and global distortions, the margins during the year were under severe pressure. INDUSTRY REVIEW Total edible oil market in India is in the range of 13 to 1 5 Mn. tonnes annually with growth rate of 4-5% out of which almost 40% of the demand is met by imports. International edible oil market to a great extent rules the Indian market pricing. Prices of Soya oil and palm-based oils have exhibited stiff downward trend through out the financial year as international prices of these oils reached their lowest. Stiff downward price trend has eroded profit margins in the Industry. However, now prices have been stabilized since January 2005. FUTURE OUTLOOK Among FMCG products, edible oil has one of the highest penetration of 98% in urban as well as in rural areas. Other popular cooking media areVanaspati (hydrogenated edible oil) and ghee (home made butter). Penetration of all of these three cooking medium is very high at 99.8% in urban areas as well as rural areas. The current downward price trend is transitory in nature and your company is fully equipped to meet such ~/"*"~!lenges. With Edible industry growth rate of 4% to 5%, medium and long term outlook of the Industry appears to be promising, mere has been continuous focus of effective cost management at all levels. The financial costs are closely monitored through better working capital management and hedging structures. PRODUCT & MARKETING Fortune basket has the largest range of edible oils in India. The range of products is meant keeping in view geographical preferences. Fortune refined edible oil is available in various packs and jars, which ranges from 200ML to a 15Ltr Maha Fortune Tin to meet the requirement of various classes of people. The company has a network of 76 stock points catering to more than 2,500 distributors, 600 super stockiest and numerous brokers and other trade associates. This translates into commendable retail reach of 4.50 lacs outlets across the country. Fortune brand is placed in first 50 FMCG brand in India with 30th rank. Your company will continue to grow aggressively. It will consolidate its position of dominance in the Northern market and grow assertively in the South. MUNDRAUNITII With successful implementation of Mundra Unit II in August 2004, Mundra Refinery Complex has a cumulative refining capacity of 2200 metric Tons per days and 350 metric tons of hydrogenation. The company has also implemented Co-generation power plant of 3.80 M.W., which will result in substantial saving of power cost. Extension of Packing lines and other ancillary facilities are under implementation. ACQUISITIONS During the year under review the company has acquired an integrated oilseed-processing complex, atMantralayam, A.P. The unit is located in the middle of the sunflower growing areas of the country. Thus this unit will boost the company's product in the southern market, which is having major consumer base of Sunflower oil. The company has also acquired another oilseed-processing unit at Bundi, Rajasthan along with its carried forward Sales tax incentives of Rs.87.91 Mn. AnnualReport 2004-2005
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Adani Wilmar Limited The company is also in process of acquiring refinery unit at Haldia Port, West Bengal. The unit is having installed refining capacity of 600 TPD. It has better proximity to Malaysia/Indonesia, the major palm oil producing countries. Haldia unit will cater to refined oil demand for nearby states like N.E., Bihar, U.R etc., with distinctive freight advantage. In addition, the unit is eligible for sales tax incentives upto the value of capital investment. The plant has two-way pipeline for transport of oil to & from the port. With these acquisitions and expansion, your company has access to large production capacities which can be further leveraged to meet its growing national customer base. IT INITIATIVES During the second half of the financial year, your company initiated process of implementing SAF) a fully integrated ERP Solution. SAP has been successfully implemented across all operating locations on 1st April 2005. With application of SAJ^ all operating locations and branches of the company will be having real time data. This will bring significant benefits to the company in terms of authenticity of information and better decision-making. DIVIDEND Your Company does not recommend any dividend for the year under review. DIRECTORS Mr. Chua Phuay Hee, Director of the Company, retires by rotation and being eligible offers himself for re-appointment. BOARD COMMITTEES The Audit Committee of the Company consists of Mr. Gautam S. Adani, Mr. Rajesh S. Adani and Mr. T. K. Kannan. The Audit Committee has full access to information contained in the records of the Company. The terms of reference of the Audit Committee include: 1. ToreviewthefinancialstatementsbeforesubmissiontotheBoard. x> 2. To discuss with the Auditors periodically about internal control system. * Audit Committee met two times during the financial year 2004-05 on 29th April 2004, 25th October 2004. The Management Committee of the Company consisting of Mr. Gautam S. Adani and Mr. Rajesh S. Adani met during the year at regular interval on 1 4th April 2004, 6th May 2004, 25th June 2004, 12th July 2004, 31 st August 2004, 28th October 2004, 1 7th November 2004, 1 8th December 2004, 1 Oth February 2005 to discuss and approve routine matters. The business done by management committee is approved in next Board Meeting. DIRECTORS'RESPONSIBILITY STATEMENT Pursuant to the provisions of Sections 21 7 (2AA) of the Companies Act, 1 956, the Directors confirm that, to the best of their knowledge and belief, 1. In the preparation of the Annual Accounts the applicable Accounting Standards have been followed and that no material departures have been made for the same. 2. Appropriate accounting policies have been selected and applied consistently, and such judgments and estimates have been made that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at 31st March 2005 and of the profit of the Company fortheyearended 31 st March 2005. 3. 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. 4. The Annual Accounts have been prepared on a going concern basis. RIGHT ISSUE OF EQUITY SHARES During the year the Company has increased its Authorised Share Capital from Rs.500 million to Rs. 1 000 million and has made right issue of equity share in the ratio of 306 : 1000 at the face value of Rs. 10 each per share to the extent of Rs. 139 million. AUDITORS & AUDITORS' REPORT The Company's Auditors M/s. Dharmesh A. Parikh & Associates, Chartered Accountants, Ahmedabad, will retire at conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Notes forming part of accounts are self-explanatory and therefore, do not call for any further comments. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO. Information in accordance with the provisions of section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 regarding the captioned subject is given in the Annexure forming part of this report. PERSONNEL
There being no employee who is in receipts of remuneration in excess of limits prescribed under Section 21 7(2A) of the Companies Act, 1 956, the information required underthe said section is notgiven.

AYA

ACKNOWLEDGMENT The Board extends its sincere thanks to Banks, Financial Institution and Government Agencies for the trust they have reposed in the Company. The Board of Directors place on record its appreciation to all the employees for their hard work and commitment. Lastly the Board wishes to thank the Joint Venture Partners- Adani Group of Companies and Wilmar Group of Companies for their continuous support and significant contribution. For and on behalf of the Board of Directors Place : Ahmedabad GAUTAM S. ADANI Date : 29th April 2005 Chairman

A n nua I R e po rt 2 0 0 4 - 2 0 0 5
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Adoni Wilmar Limited

ANNEXURE TO THE DIRECTORS' REPORT Information under Section 21 7(1 )(e) of the Companies Act, 1 956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, and forming part of the Directors' Report. CONSERVATION OF ENERGY The Company has been laying emphasis on the conservation of energy and taking several measures like effective control on utilization of energy and regular monitoring of its consumption etc. The adoption of these measure to conserve energy have resulted in saving of the same. Current Year A) Power and fuel Consumption: Electricity (a) Purchased Unit (KWH) Total Amount (Rs.) Rate/Unit (Rs.) (b) Own generation (i) Through Diesel Generator Unit (KWH) Units per Ltr. of Diesel Oil Cost/Unit (Rs.) (ii) Through Co- Generation Plant Unit (KWH) Units per MT of Steam Cost/Unit (Rs.) Coal Quantity (MT) Total Cost (Rs.) Average Rate (Rs.) Lignite Quantity (MT) Total Cost (Rs.) Average Rate (Rs.) Husk Quantity (MT) Total Cost (Rs.) Average Rate (Rs.)
LDO

Previous Year

12457943 56513874 4.54 14340105 3.28 7.00 9325210 140.64 5.20 349.93 788708 2253.90 43131.34 49240067 1141.63 6331.00 6922058 1093.36 1 548496 33864834 21.87 980794 22005402 22.44 84.326 0.102 0.015 3.615 2.290

10117140 52761385 5.22 2176884 3.69 6.42

Nil Nil Nil Nil Nil Nil

17091 16607040 971.69

Nil Nil Nil

Quantity (Ltr.) Total Cost (Rs.) Average Rate (Rs.) Diesel Quantity (Ltr.) Total Cost (Rs.) Average Rate (Rs.) (B) Consumption per unit of production: Electricity (Unit) Coal & Lignite (MT) Husk LDO (Ltr) Diesel (Ltr.)

1164370 19941588 17.10 653258 11930942 18.26 36.570 0.051

Nil

3.772 2.117

RESEARCH & DEVELOPMENT (R&D) : 1. The company has initiated installation of advanced R& D equipments for better quality product and reductions in process losses. 2. The company has developed Specialty Fat product with different grades to meet the requirements of different market segment. 3. Future plans of action: To continue efforts for better quality improvement with cost reduction 4. Expenditure on R& D : R& D expenditure have not been accounted for separately. TECHNOLOGY ABSORPTION, ADAPTATION & INNOVATION: 1. Efforts in brief made towards technology absorption, adaptation and innovation: The Company has through its R & D , improved the refining process to reduce the overall process losses. Benefit derived asa result of theabove efforts: Improved Productivity and quality of the refined oils. 2. During the year under review, the company has commissioned Coal based co-generation power plant of 3.8 MW. Benefit derived asa result of the above efforts: Reduction in overall power cost. FOREIGN EXCHANGE EARNING & OUTGO During the year, the foreign exchange earning was Rs.429.21 million (Previous Year Rs. 380.89 million) and the foreign exchange outgo was Rs.941 9.70 million (Previous year Rs. 7781.54 million). A n n u a l Re p o r t 2 0 0 4 - 2 0 0 5
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AVA
Adoni Wilmar Limited

Auditor's Report
We have audited the attached Balance Sheet of Adani Wilmar 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 Company's 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 (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclosed in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order. 2. Further to our comments in the annexure referred to above, we report that: i) ii) 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;

iii) The Balance Sheet, Profit& Loss Account and Cash-flow statement dealt with by this report are in agreement with the books of account. iv) Inouropinion, the Balance Sheet, Profit& Loss account and Cash Flow Statement dealt with this report comply with the Accountih^ Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; v) On the basis of written representations received from the directors, as on 31" March, 2005, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 s ' 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;

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with note no. A(g)(iii) and B(l), relating to change in accounting policy of Export incentives under Duty Exemption scheme and read together with other Significant Accounting Policies and notes thereon give the information required by the Companies Act, 1 956 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 31 st 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.

Place: Ahmedabad Date : 29th April 2005 ANNEXURE TO THE AUDITOR'S REPORT RE: ADANI WILMAR LIMITED

For DHARMESH A. PARIKH & ASSOCIATES Chartered Accountants D. A. PARIKH Partner (Membership No. 45501)

(Referred to in Paragraph 1 of our Report of even date.) (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation affixed assets. The same are in the process of being updated; (b) Asexplained 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. (c) 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. (ii) (a) During the year, the inventories have been physically verified by the management. In our opinion, the frequency of verification is reasonable. (b) 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. (c) 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. (iii) (a) According to the information and explanation given to us, the company had not granted any loan to companies, firms & other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clauses (iiia), (iiib), (iiic) & (iiid) of paragraph 4 of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company. (b) According to the information and explanation given to us, the company had not taken any loan from companies, firms & other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clauses (iiie), (iiif) & (iiig) of paragraph 4 of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company. l _ _ A n n uaJJR. e p_o_r t_ 2IJO 0 4_- 2 0 0 5_

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