Letter of Offer -PDF

LETTER OF OFFER THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION This document (‘Letter of Offer’ or ‘LoF’) is sent to you as a shareholder(s) of Adani Enterprises Limited (‘AEL’ or the ‘Target Company’). If you require any clarification about the action to be taken, you may consult your stock broker or investment consultant or Manager to the Offer or Registrar to the Offer. In case you have recently sold your shares in AEL, please hand over this Letter of Offer, the accompanying Form of Acceptance-cum-Acknowledgement and Form of Withdrawal and Transfer Deed to the member of stock exchange through whom the said sale was effected. CASH OFFER by The Acquirer Adani Infrastructure Services Private Limited Registered Office: ‘Adani House’, Near Mithakhali Six Roads, Navrangpura, Ahmedabad-380 009, India, Tel: +91 -79-2656 5555, 2555 5555 Fax:+91-79-2656 5500 and The Person Acting in Concert with the Acquirer Adani Agro Private Limited Registered Office: 8th Floor, ‘Shikhar’, Near Adani House, Mithakhali Six Roads, Navrangpura, Ahmedabad-380 009, India, Tel: +91 -79-2656 5555, Fax:+91-79-2656 5500 (Adani Infrastructure Services Private Limited and Adani Agro Private Limited hereinafter collectively referred to as ‘Acquirers’) for the acquisition of up to 1,99,72,691 fully paid-up equity shares of Re. 1/- each representing approximately 8.1% of the total paid-up equity share capital of Adani Enterprises Limited (Name changed from ‘Adani Exports Limited’ to ‘Adani Enterprises Limited’ w.e.f. August 10, 2006) Registered Office: ‘Adani House’, Near Mithakhali Six Roads, Navrangpura, Ahmedabad - 380 009, Gujarat, India, Telephone : +91 79 2656 5555, Fax: +91 79 2656 5500 at Rs. 350/- per Equity Share payable in cash Attention:(1) This Offer is being made pursuant to the Regulations 11(2A) read with 21(3) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereof (2) The Offer is not subject to any minimum level of acceptance by the shareholders of AEL. (3) The Offer is subject to the following statutory and regulatory approvals and clearances required to acquire shares tendered pursuant to the Offer: Approval of RBI under FEMA, if required, for acquiring Shares tendered and accepted under the Offer by non-resident shareholders of AEL. As on date, there are no other statutory or regulatory approvals required, other than those indicated above. (4) The Acquirers will make the application for requisite approval to the RBI, if required, on closure of the Offer for acquisition of the Shares tendered and accepted under the Offer. (5) If there is any further upward revision of the Offer Price by the Acquirers till the last date for revision viz. Friday, August 31, 2007 or withdrawal of the Offer subject to compliance with regulation 27 of SAST 1997, the same would be informed by way of a public announcement in the same newspapers in which the Public Announcement had appeared. Such revised Offer Price would be payable for all the Shares tendered anytime during the Offer and accepted under the Offer. (6) Shareholders, who have accepted the Offer by tendering the requisite documents in terms of the Public Announcement / Letter of Offer, can withdraw the same up to three working days prior to the closure of the Offer i.e. Thursday, September 06, 2007 (7) No competitive bid has been announced till the date of this Letter of Offer. (8) A copy of the Public Announcement and Letter of Offer (including Form of Acceptance-cum-Acknowledgement and Form of Withdrawal) is also available on SEBI’s website (www.sebi.gov.in).

MANAGER TO THE OFFER REGISTRAR TO THE OFFER

ICICI Securities Limited ICICI Centre, H.T. Parekh Marg, Churchgate Pinnacle Shares Registry Private Ltd. Mumbai 400 020, India Near Asoka Mills Ltd., Naroda Road Tel: +91 22 2288 2460 Ahmedabad - 380 025 Fax: +91 22 2282 6580 Tel No. +91-79 2220 4226, 2220 0338 Email: [email protected] Fax +91-79-2220 2963 E-mail: [email protected] Contact Person: Mr. Debasis Panigrahi Contact Person: Mr. Gautam Shah

OFFERS OPENS ON : FRIDAY, AUGUST 24, 2007 OFFER CLOSES ON : WEDNESDAY, SEPTEMBER 12, 2007

Schedule of the Major Activities of the Offer Activity Original Schedule Revised Schedule Day, Date Day, Date 1 Date of publication of Public Announcement Thursday, February 15, 2007 Thursday, February 15, 2007 2 Specified date (for the purpose of determining Friday, March 09, 2007 Friday, March 09, 2007 the names of shareholders to whom the Letter of Offer would be sent) 3 Last date for announcement of a competitive Wednesday, March 07, 2007 Wednesday, March 07, 2007 bid 4 Date by which Letter of Offer will be posted to Wednesday, March 28, 2007 Tuesday, August 21, 2007 shareholders 5 Date of Opening of the Offer Thursday, April 05, 2007 Friday, August 24, 2007 6 Last date for revising the Offer Price / number Thursday, April 12, 2007 Friday, August 31, 2007 of Shares 7 Last date for withdrawing acceptance from the Wednesday, April 18, 2007 Thursday, September 06, 2007 Offer 8 Date of Closure of the Offer Tuesday, April 24, 2007 Wednesday, September 12, 2007 9 Date of communicating rejection / acceptance Wednesday, May 09, 2007 Thursday, September 27, 2007 and payment of consideration for applications accepted

RISK FACTORS

Risks related to the proposed Offer

The risk factors set forth below pertain to the Offer and are not in relation to the present or future business operations of the Target Company or other related matters, and are neither exhaustive nor intended to constitute a complete analysis of the risks involved in participation or otherwise by a shareholder in the Offer. Shareholders of the Target Company are advised to consult their stockbroker or investment consultant, if any, for analyzing all the risks with respect to their participation in the Offer.

1. The Offer involves an offer to acquire up to 1,99,72,691 fully paid equity shares of AEL, constituting approximately 8.1% of total fully paid-up equity share capital of AEL from the Eligible Persons for the Offer. In the case of oversubscription in the Offer, as per the Regulations, acceptance would be determined on a proportionate basis and hence there is no certainty that all the Shares tendered by the shareholders in the Offer will be accepted.

2. In the event that either (a) a statutory and regulatory approval is not received in a timely manner, (b) there is any litigation leading to a stay of the Offer, or (c) SEBI instructing the Acquirers not to proceed with the Offer, then the Offer process may be delayed beyond the schedule of activities indicated in this Letter of Offer. Consequently, the payment of consideration to the shareholders of the AEL whose Shares have been accepted in the Offer as well as the return of the Shares not accepted by the Acquirers may be delayed. In case of the delay, due to non-receipt of the statutory approvals, as per Regulation 22(12) of the Regulations, SEBI may, if satisfied that the non-receipt of approvals was not due to the wilful default or negligence or failure to diligently pursue on the part of the Acquirers, grant an extension for the purpose of completion of the Offer subject to the Acquirers paying interest to the shareholders, as may be specified by the SEBI.

3. Further, shareholders should note that after the last date of withdrawal i.e. Thursday, September 06, 2007, the shareholders who have lodged the Shares would not be able to withdraw them even if the acceptance of Shares under the Offer and dispatch of consideration gets delayed. The tendered shares and documents would be held by the Registrar to the Offer, till such time as the process of acceptance of tenders and the payment of consideration is completed.

4. The Offer is subject to the receipt of statutory and regulatory approvals, as provided under Section ‘Statutory Approvals and Conditions of the Offer’ of this Letter of Offer for the acquisition of Shares by the Acquirers under the Offer. The Acquirers may not to be able to proceed with the Offer in the event the approvals are not received in terms of Regulation 27 of the Regulations. Delay, if any, in the receipt of these approvals may delay completion of the Offer.

5. The Shares tendered in the Offer will be held in trust by the Registrar to the Offer, till the completion of the Offer formalities. Accordingly, the Acquirers makes no assurance with respect to the market price of the Shares both during the Offer period and upon the completion of the Offer, and disclaims any responsibility with respect to any decision by the shareholders of AEL on whether to participate or not to participate in the Offer.

6. The transaction is subject to completion risks as would be applicable to similar transactions.

Risks involved in associating with the Acquirers

7. The Acquirers makes no assurance with respect to the future financial performance of the Target Company.

8. SEBI vide an order dated May 25, 2007 had prohibited seven Adani Group entities viz. Adani Agro Private Limited, Adani Impex Private Limited, Crown International, Shahi Property Developers Private Limited, Adani Properties Private Limited, Advance Exports and Intercontinental India from accessing the securities market directly or indirectly and also prohibited them from buying/selling or otherwise dealing in securities in any manner for a period of two years from the date of the order. Adani Agro Private Limited, one of the entities named in the said order, is the person acting in concert with the Acquirer for the purpose of this offer. The honourable Securities Appellate Tribunal (‘SAT’) vide the order dated July 13, 2007, has granted a stay on the said SEBI order and has fixed the date of next hearing on September 18, 2007. Any adverse outcome from the future proceedings in this case might affect the Acquirers and their future dealings in securities.

Table of Contents

Serial Number Particulars Page Number

1 Disclaimer clause 5

2 Details of the Offer 5

3 Background of the Acquirer and PAC 7

4 Disclosure in terms of Regulation 21(2) & 21(3) of the Regulations 17

5 Background of the Target Company 17

6 Offer Price and Financial Arrangements 29

7 Terms and Conditions of the Offer 32

8 Procedure for Acceptance and Settlement of the Offer 34

9 Documents for Inspection 37

10 Declaration by the Acquirers 38

Attached Form of Acceptance-cum-Acknowledgement

Attached Form of Withdrawal

Attached Transfer Deed (for physical shares)

Definitions AAPL Adani Agro Private Limited Acquirer/ AISPL Adani Infrastructure Services Private Limited Act The Companies Act, 1956 ASE The Ahmedabad Stock Exchange, Ahmedabad BSE Bombay Stock Exchange Limited, Mumbai Business Hours Monday to Saturdays – 10.00 a.m. to 5.00 p.m. (Closed on Sundays and public holidays) CDSL Central Depository Services (India) Limited DP Depository Participant Eligible Persons for the Offer Registered shareholders of AEL appearing in the Register of Members as on the Specified Date and unregistered shareholders who own the equity shares of AEL, anytime before the closure of the Offer, except the Acquirers and Promoter group of AEL FEMA Foreign Exchange Management Act, 1999 Form of Acceptance Form of Acceptance-cum-Acknowledgement Letter of Offer This Letter of Offer dated August 16, 2007 Manager / Manager to the Offer ICICI Securities Limited NRIs Non-Resident Indians NSDL National Securities Depository Limited NSE National Stock Exchange of India Limited Offer / Public Offer / Open offer Offer for acquisition of up to 1,99,72,691 fully paid-up equity shares of face value of Re. 1 each of AEL representing approximately 8.1% of the equity share capital at a price of Rs. 350/- per Share, payable in cash Offer Price Rs. 350/- per Share PAC/AAPL Person Acting in Concert with AISPL, in this case being Adani Agro Private Limited Promoter Group of AEL Gautam Shantilal Adani, Rajesh Shantilal Adani, Vasant Shantilal Adani, Priti Gautam Adani, Shilin Rajesh Adani, Pushpa Vasant Adani, Mahasukh Shantilal Adani, Suvarna Mahasukh Adani, Vinod Shantilal Adani, Ranjan Vinod Adani, Pranav Vinod Adani, Bhavik Bharatbhai Shah, Surekha Bhavik Shah, Rakesh Raman Lal Shah, Priti Rakesh Shah, Vinod Natwarlal Sanghvi, Rajesh Shantilal Adani Family Trust, Vasant Shantilal Adani Family Trust, Gautam Shantilal Adani Family Trust, Mahasukh Shantilal Adani Family Trust, Vinod Shantilal Adani Family Trust, S. B. Adani Family Trust, Adani Agro Private Limited, Adani Port Infrastructure Private Limited, Adani Infrastructure Services Private Limited, Advance Investments, Intercontinental India and Adani Investments Public Announcement / PA Announcement of the Offer made by the Acquirer on February 15, 2007 RBI Reserve Bank of India Registrar / Registrar to the Offer Pinnacle Shares Registry Private Ltd. Near Asoka Mills Ltd., Naroda Road, Ahmedabad - 380 025 Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereto SEBI The Securities and Exchange Board of India Share(s) / Equity Share(s) Fully paid-up equity share(s) of face value of Re. 1 each of AEL to be acquired pursuant to the Offer not exceeding 1,99,72,691 Equity Shares Specified Date Friday, March 09, 2007, being not later than the thirtieth day from the date of PA for the purpose of determining the names of the shareholders of the Target Company to whom the Letter of Offer will be sent. Target Company / AEL Adani Enterprises Limited

1. DISCLAIMER CLAUSE

IT IS TO BE DISTINCTLY UNDERSTOOD THAT FILING OF THE DRAFT LETTER OF OFFER WITH SEBI SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED, VETTED OR APPROVED BY SEBI. THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI FOR A LIMITED PURPOSE OF OVERSEEING WHETHER THE DISCLOSURES CONTAINED THEREIN ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE REGULATIONS. THIS REQUIREMENT IS TO FACILITATE THE SHAREHOLDERS OF AEL TO TAKE AN INFORMED DECISION WITH REGARD TO THE OFFER. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF THE ACQUIRER OR OF THE COMPANY WHOSE SHARES ARE PROPOSED TO BE ACQUIRED OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE LETTER OF OFFER. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ACQUIRER IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THIS LETTER OF OFFER, THE MANAGER TO THE OFFER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE ACQUIRER DULY DISCHARGES ITS RESPONSIBILITY ADEQUATELY. IN THIS BEHALF, AND TOWARDS THIS PURPOSE, THE MANAGER TO THE OFFER, ICICI SECURITIES LIMITED, HAS SUBMITTED A DUE DILIGENCE CERTIFICATE DATED February 28, 2007 TO SEBI IN ACCORDANCE WITH THE SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 1997 AND SUBSEQUENT AMENDMENTS THEREOF. THE FILING OF THE LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE ACQUIRER FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE OFFER.

2. DETAILS OF THE OFFER

2.1 Background of the Offer

2.1.1 This offer is being made by the Acquirers to the equity shareholders of AEL in terms of Regulation 11(2A) read with 21(3) of the Regulations.

2.1.2 The Acquirers are part of the Promoter Group of the Target Company. As on the date of the PA, the Acquirer and the PAC holds 25,60,000 and 1,45,13,500 fully paid equity shares in AEL respectively, constituting 1.04% and 5.89% of the total equity shares/voting capital of AEL respectively. As on the date of the PA, the Acquirers along with other persons forming part of the Promoter group of AEL holds 16,48,92,540 fully paid equity shares in the Target Company, constituting 66.90% of the total equity share capital/voting rights of the Target Company. Pursuant to a partnership agreement dated March 27,2006 entered into with other entities/persons for the formation of M/s. Advance Investments, a group partnership firm, 25,60,000 equity shares presently held by AISPL will be transferred to M/s. Advance Investments, a group partnership firm, wherein AISPL is one of the partners and these shares will be part of AISPL’s capital contribution to M/s. Advance Investments. As on the date of PA, these 25,60,000 equity shares are under pledge with Allahabad Bank in relation with some financial assistance provided by Allahabad Bank. The objective of the offer is consolidation of the shareholding / voting rights by the Acquirers in the Target Company beyond their present holding in AEL.

2.1.3 Out of the 1,45,13,500 Equity Shares of AEL being held by AAPL as on date of the PA, 12,50,000 Equity Shares has been pledged with The State Industrial & Investment Corporation of Maharashtra (‘SICOM’) for a term loan of Rs. 750 lacs. AAPL has also pledged 38,50,000 Equity Shares with the Export and Import Bank of India (‘EXIM’ Bank) for a term loan Rs. 6500 lacs.

2.1.4 Adani Agro Private Limited is the person acting in concert with the Acquirers in terms of Regulation 2(1)(e)(1) of the SEBI (SAST) Regulations, 1997 in relation to this Offer. .

2.1.5 In terms of Regulation 11(2A) and 21(3) of the Regulations, read with clause 40A of the listing agreement entered into with the stock exchanges by the Target Company, the promoters of the Target Company along with persons acting in concert with them cannot hold more than 75% of the total share capital/voting rights of AEL. In other terms, the promoters of AEL will have to maintain the minimum public shareholding level of 25% in order to ensure continual listing of the shares of AEL in the stock exchanges, where the shares of AEL are listed namely, BSE, NSE and ASE.

2.1.6 The promoters and promoter group of AEL already hold 16,48,92,540 fully paid equity shares in AEL constituting 66.90% of the total shareholding/ voting rights of AEL. In order to ensure compliance with clause 40A of the listing agreement with the exchanges, the promoters and promoter group can acquire upto a maximum of 1,99,72,691 equity shares constituting 8.1% of the total shareholding/voting rights of AEL. The present offer by the Acquirers is for acquisition of 1,99,72,691 fully paid equity shares in AEL constituting approximately 8.1% of the total shareholding/voting rights of AEL. Assuming full acceptance of the offer by the eligible shareholders of AEL, post this offer, the promoters and promoter group will hold 18,48,65,231 fully paid equity shares in AEL, constituting 75% of the total shareholding/voting rights in AEL. The Offer is being made to all the shareholders of the Target Company other than the Acquirers and the promoters and promoter Group of AEL.

2.1.7 The Acquirers are part of the promoter group of AEL, which is already having the control and management of AEL. As a consequence of this open offer, there will be no change in the control and management of the Target Company.

2.1.8 Adani Infrastructure Services Private Limited (‘AISPL’), the Acquirer is a private limited company registered under the Companies Act, 1956 and was originally incorporated as ‘Adani Infrastructure Services Limited’ on October 27, 1999. It converted itself into a private limited company vide fresh certificate of registration dated March 07, 2006. The main objects of AISPL include carrying on the business of developing, maintaining and operating any infrastructure facilities like roads, ports, airports etc.. The registered office of AISPL is located at ‘Adani House’, Near Mithakhali Six Roads, Navrangpura, Ahmedabad - 380 009, Gujarat, India. AISPL is not a listed company.

2.1.9 Adani Agro Private Limited (‘AAPL’), the person acting in concert with the Acquirer is a private limited company registered under the Companies Act, 1956 and was originally incorporated as ‘Adani Agro Limited’ on February 14, 1995. It was then converted into a private limited company vide fresh certificate of incorporation dated June 04, 2002.

2.1.10 The Offer is not conditional upon any minimum level of acceptance, i.e. the Acquirers will acquire all the fully paid- up equity shares of AEL that are tendered and accepted in terms of the Offer up to 1,99,72,691 equity shares, representing in the aggregate approximately 8.1% of the outstanding share capital/voting rights, subject to the conditions specified in this Public Announcement, Letter of Offer and Form of Acceptance-cum-Acknowledgement.

2.1.11 SEBI vide an order dated May 25, 2007 had prohibited seven Adani Group entities viz. Adani Agro Private Limited, Adani Impex Private Limited, Crown International, Shahi Property Developers Private Limited, Adani Properties Private Limited, Advance Exports and Intercontinental India from accessing the securities market directly or indirectly and also prohibited them from buying/selling or otherwise dealing in securities in any manner for a period of two years from the date of the order. Adani Agro Private Limited, one of the entities named in the said order, is the person acting in concert with the Acquirer for the purpose of this offer. The honourable Securities Appellate Tribunal (‘SAT’) vide the order dated July 13, 2007, has granted a stay on the said SEBI order and has fixed the date of next hearing on September 18, 2007.

2.1.12 As on the date of the Public Announcement, ICICI Securities Limited, the Manager to the Offer did not hold any share of AEL.

2.1.13 ICICI Securities Limited shall not deal in the shares of the Target Company during the period commencing from the date of its appointment in terms of Regulation 13 till the expiry of the fifteen days period from the date of Closure of the Offer.

2.2 Details Of The Proposed Offer

2.2.1 The Public Announcement, published on February 15, 2007 was published in all the editions of the following newspapers in accordance with Regulation 15 of the Regulations:

Newspapers Language Editions The Financial Express English All Editions Jansatta Hindi All Editions The Financial Express Gujarati Ahmedabad

The Public Announcement published on February 15, 2007 is also available on the SEBI website, www.sebi.gov.in.

2.2.2 Pursuant to and subject to the terms and conditions of this Letter of Offer, the Acquirers are hereby making an Offer to the Eligible Persons for the Offer to acquire from them up to 1,99,72,691 equity shares of AEL (representing approximately 8.1% of the fully paid-up equity share capital of AEL) at a price of Rs. 350/- (Rupees three hundred fifty only) per Share, payable in cash. Any upward revision in the Offer with respect to the Offer Price will be announced in the abovementioned newspapers and the revised Offer Price would be payable by the Acquirers for all the Shares tendered anytime during the Offer.

2.2.3 The Shares will be acquired by the Acquirers, free from all liens, charges and encumbrances and together with all rights attached thereto, including the right to all dividends, bonus and rights declared hereafter.

2.2.4 There are no other outstanding convertible instruments except 25,000 Foreign Currency Convertible Bonds to be converted into Equity Shares on a future date. However, we hereby confirm in terms of regulation 21(5) that, none of these FCCBs would be converted into Equity Shares within 15 days of the closure of this offer.

2.2.5 The Acquirers have not acquired any share of the Target Company since the date of the Public Announcement and up to the date of this Letter of Offer.

2.3 Object Of The Offer

2.3.1 The Offer to the shareholders of AEL is for consolidation of shareholding by the Acquirers in the Target Company in accordance with Regulations 11(2A) and 21(3) read with other applicable provisions of the Regulations.

2.3.2 The offer will not result in any change in management or control of the Target Company.

3. BACKGROUND OF THE ACQUIRER AND PAC

A. BACKGROUND OF THE ACQUIRER:

3.1 Adani Infrastructure Services Private Limited (AISPL) is the Acquirer for this offer.

3.2 Adani Infrastructure Services Private Limited (‘AISPL’) is a private limited company registered under the Companies Act, 1956 and was originally incorporated as ‘Adani Infrastructure Services Limited’ on October 27, 1999. It converted itself into a private limited company vide fresh certificate of registration dated March 07, 2006. The main objects of AISPL include carrying on the business of developing, maintaining and operating any infrastructure facilities like roads, highways, bridges, airports, ports, rail systems, water supply projects, irrigation projects, sanitation, sewerage systems, project for generation or distribution and generation of electricity or any other form of power, project for providing telecommunications and/or any other public facility of a similar nature in India or elsewhere and making investments in enterprise carrying on the business of developing, maintaining and operating infrastructure facilities and to provide infrastructure services in India or elsewhere. The registered office of AISPL is located at ‘Adani House’, Near Mithakhali Six Roads, Navrangpura, Ahmedabad - 380 009, Gujarat, India, Tel: +91 -79-2656 5555, 2555 5555 Fax:+91-79-2656 5500. The shares of AISPL are not listed on any stock exchange and is not a listed company.

3.3 The Acquirer is part of the Promoter Group of the Target Company. As on the date of the PA, it holds 25,60,000 fully paid equity shares in AEL, constituting 1.04% of the total equity shares/voting capital of AEL. As on the date of the PA, the Acquirers along with other persons forming part of the Promoter group of AEL holds 16,48,92,540 fully paid equity shares in the Target Company, constituting 66.90% of the total equity share capital/voting rights of the Target Company. Pursuant to a partnership agreement dated March 27,2006 entered into with other entities/persons for the formation of M/s. Advance Investments, a group partnership firm, 25,60,000 equity shares presently held by AISPL will be transferred to M/s. Advance Investments, a group partnership firm, wherein AISPL is one of the partners and these shares will be part of AISPL’s capital contribution to M/s. Advance Investments. As on the date of PA, these 25,60,000 equity shares are under pledge with Allahabad Bank in relation with some financial assistance provided by Allahabad Bank. There being no acquisition preceding this open offer, there is no change in the shareholding/ voting rights of the Promoter Group in the Target Company just prior to PA.

3.4 The issued and paid up share capital of AISPL constitutes 12,02,09,970 equity shares of Rs. 10 each aggregating Rs. 12,021 lacs. The shareholding pattern of AISPL as on date of the PA is as follows:

Shareholder No. of shares % holding Gautambhai Shantilal Adani 4,81,00,264 40.01 & Rajeshbhai Shantilal Adani Shilin Rajeshbhai Adani 4,48,59,402 37.32 Vinodbhai Shantilal Adani 1,35,96,402 11.31 Priti Gautam Adani 1,01,000 0.08 Pranav Vinod Adani 1,500 0.00 Adani Namrata Pranav 1,000 0.00 Ranjan Vinodbhai Adani 1,35,49,402 11.27 Bhavik B. Shah 1,000 0.00 Total 12,02,09,970 100

3.5 As on the date of PA, the Board of Directors of AISPL is as follows:

Name of Experience Qualifications Date of Address Director Appointment Shyamal S. 34 years of F.C. A December 28, 1999 40, Prerna Tirth I, Joshi experience in the Behind Someshwar II, Satellite Road, field of finance and Ahmedabad, India accounts Priti G. Adani 9 years of experience B.D.S October 27, 1999 Shantivan, Behind in social fields and Karnavati Club, Mohemadpura, Managing Trustee of Ahmedabad-380058, Adani Foundation India

Bhavik B. 15 years of M.Com June 08, 2004 C – 802, Chandanbala Shah experience in the apartments, Opp. Suvidha Shopping field of banking, centre, Paldi , finance and treasury Ahmedabad 380 007, India

None of the present directors of AISPL is a director on the board of AEL.

3.6 The audited financial information of AISPL, is given below, in compliance with the provisions of Clause 4.1.9 of the standard letter of offer format as prescribed by SEBI:

(Rs. in Lacs.) Profit & Loss Statement FY2004 FY2005 FY2006 FY2007 Income from Operations 0 0 0 0 Other Income* 12.68 10.24 10.24 3,112.92 Total Income 12.68 10.24 10.24 3,112.92 Total Expenditure 2,159.32** 4.58 4.99 251.76 Profit Before Depreciation Interest and Tax (2,146.64) 5.65 5.25 2,861.16 Depreciation 0 0 0 0 Interest 0 0 0 0 Profit Before Tax (2,146.64) 5.65 5.25 2,861.16 Excess Provision Written Back 0 0.02 0 0 Prior Period Expenses 0 4.74 0 0 Provision for Tax 0.24 0 0 0 Profit After Tax (2,146.88) 0.94 5.25 2,861.16

Balance Sheet Statement FY2004 FY2005 FY2006 FY2007 Source of funds Paid up share capital 12,021.00 12,021.00 12,021.00 12,021.00 Reserve and Surplus (excluding revaluation 0.75 0.75 0.75 713.17 reserves) Net worth 12,021.75 12,021.75 12,021.75 12,734.17 Adjusted Net worth 9,842.05 9,847.12 9,856.50 12,721.79 Revaluation reserves 0 0 49,925.02 49,925.02 Secured loans 0 0 0 0 Unsecured loans 2,986.73 2,986.73 2,986.73 2,986.73 Total 15,008.48 15,008.48 64,933.50 65,645.92 Uses of funds Net fixed assets 0 0 0 0 Investments 12,173.66 12,173.66 62,098.68 62,205.06 Net Current Assets 655.13 660.19 669.57 3,428.47 Total Miscellaneous expenditure not written off 24.77 20.64 16.51 12.38 Profit & Loss Account 2,154.93 2,153.99 2,148.74 0 Total 15,008.48 15,008.48 64,933.50 65,645.92

Other Financial Data FY2004 FY2005 FY2006 FY2007 Dividend (%) 0 0 0 0 Earning Per Share (Rs.) (1.79) 0.0008 0.0043 2.38 Return on Net worth (%) (21.81) 0.0095 0.0533 22.49 Book Value Per Share (Rs.) 8.19 8.19 8.20 10.58 *Other Income includes dividend income. For FY2007 it includes dividend income received from Mundra Port and Special Economic Zone Limited, amounting to Rs.2,880.00 lacs and income of Rs.232.92 lacs received from Advance Investments, in which AISPL is a partner.

** includes loss on sale/purchase of shares amounting to Rs. 2,154.99lacs. In FY 2005, there was no such non- operation loss.

Adjusted Net worth = Net worth - Total Miscellaneous expenditure not written off- Profit and Loss Account (debit Balance, if any) Earning Per Share = Profit After Tax / Outstanding Number of Equity Shares Return on Net worth = [Profit After Tax / Adjusted Net worth] *100

Book Value Per Share = Adjusted Net worth / Outstanding Number of Equity Shares

Source: Annual Reports of AISPL containing audited financials for the years ended March 31, 2004, 2005, 2006 and 2007. Auditor to the report: Dharmesh A. Parikh & Associates, Chartered Accountants, 303/304 ''Milestone '', Near Drive- in-Cinema, Opp. T. V. Tower, Thaltej, Ahmedabad-380054, Ph:+91-79-27479955 E-mail:[email protected]

3.7 Significant Accounting Policies for the year ended March 31, 2007:

The significant accounting policies adopted by the Company in the preparation and presentation of the Accounts:-

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) CASH FLOW STATEMENT

The Cash flow statement is being prepared in accordance with the format prescribed as per Accounting Standard – 3 prescribed by the Institute of Chartered Accountants of India. c) CONTINGENT LIABILITIES

Contingent Liabilities are determined on the basis of available information and are disclosed by way of notes to the accounts. d) PRIOR PERIOD ITEMS

Prior period expenses/income is accounted under the respective heads. Material items, if any, are disclosed separately by way of note. e) REVENUE RECOGNITION

i) Dividend income from investments is recognized when the company's right to receive payment is established.

ii) Share of profit from partnership firm is recognized on accrual basis. f) INVESTMENTS

Long term quoted Investment is 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. g) SEGMENT ACCOUNTING

Accounting Standards Interpretation (ASI) 20 dated 14th 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. h) 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. i) EARNINGS PER SHARE

The earnings considered in ascertaining the Company’s EPS comprises the net profit after tax (and includes the post tax effect of any extra ordinary items) attributable to equity share holder. The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the year. j) TAXATION

i) In absence of taxable income in the current year, provision for taxation has not been made. ii) Deferred tax is not recognized considering that there is no timing difference, being the difference between taxable income and accounting income that originates in one period and are capable of reversal in one or more subsequent periods; as per the Accounting Standard (AS) 22 ‘Accounting for Taxes on Income’, issued by the Institute of Chartered Accountants of India. k) MATERIAL EVENTS

Material events occurring after the Balance Sheet date are taken into cognizance.

l) MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted)

The following expenses shown under miscellaneous expenditure are amortised as follows: Preliminary Expenses: Amortised over a period of ten years.

3.8 As on date of PA, the Acquirer is not a party to any outstanding litigation. 3.9 Mr. Nimesh S. Shah – Company Secretary is the Compliance Officer. The correspondence address is as below: Mr. Nimesh S. Shah Company Secretary 10th Floor, Shikhar, Mithakali Six Roads, Navrangpura, Ahmedabad Tel.: +91-79-2555 5851, Fax: +91-79-2555 5604 Email: [email protected]

3.10 Mergers, de-mergers and / or spin-offs involving AISPL during the last three years:

There has not been any merger, de-merger and/or spin-offs involving AISPL during the last three years.

B. BACKGROUND OF THE PAC:

3.11 Adani Agro Private Limited (AAPL) is the person acting in concert with the Acquirer for this offer.

3.12 Adani Agro Private Limited (‘AAPL’) is a private limited company registered under the Companies Act, 1956 and was originally incorporated as ‘Adani Agro Limited’ on February 14, 1995. It converted itself into a private limited company vide fresh certificate of registration dated June 04, 2002. The main objects of AAPL include:

a. To carry on the business as agriculturists, dry farming, flouriculture, tissueculture, cloriculture, horticulturists, farms, planters, gardeners, vegetable growers, cultivators, fillers, nurserymen, husbandmen and producers of all varieties and kind of agricultural products, vegetables, seeds and with a view thereto raise vegetable plants, crops, fruits, flowers, flower beds, trees, herbs, shrubs, sprouts, bulbs, vegetable plants, garden plants and to process, treat, condition and refine and market seeds of all kinds and varieties and to produce, breed and grow food grains and farm produce of all kinds varieties and to produce, breed and grow food grains and farm produce of all kinds and to grow, cultivate plants, produce, process, buy, sell, import, export, make marketable and otherwise deal in plants, seeds, food grains, vegetable and herbs and medical plants, fodder as also agricultural including commercial and cash crops like sugarcane, cotton, grapes, tea, coffee, cocoa, rubber and plantation crops and varieties and all kinds of crops for showing processes and by-products there from and fodder or all kinds and varieties or to carry on extraction plants, processing, or refining plants, and all other allied activities and to deal in, purchase, sell, export, import or market such resultant products, finished products, raw materials or semi-processed materials.

b. To carry on the business of cultivation, planters, growers in cold chambers or otherwise, manufacturers or sellers or exporters and dealers in mushrooms, animal fodder corn, cocoa, rice, oil seeds, copra, coconuts, sugarcane, plantations grain, paddy, cereals, vegetables, agricultural, sericultural and horticultural products and to manufacturing, or tinning or canning or processing or dispose of by and deal in the said products and other derivatives or soil.

c. To acquire, takeover, promote, establish and carry on all or any of the business of seed crushers and manufacturers of and dealers in groundnut, gingelly, castor, cotton, mowra linseed, rape and mustard cakes, oil extractors by crushing chemical or any other process, cake scrap boilers, manufacturers of floors and floors covering of every description, makers and manufacturers of artificial manures and fertilizers of every description, mean manufacturers, grain and seed merchants, oil merchants, flax cotton, ground nut, gingelly, mowra and castor merchants.

AAPL has its registered office at 8th Floor, ‘Shikhar’, Near Adani House, Mithakhali Six Roads, Navrangpura, Ahmedabad-380 009, Gujarat, India, Tel.:+91-79-2656 5555, Fax:+91-79-2656 5500. AAPL is not a listed company.

3.13 The PAC is part of the Promoter Group of the Target Company. As on the date of the PA, it holds 1,45,13,500 fully paid equity shares in AEL, constituting 5.89% of the total equity shares/voting capital of AEL. Out of the 1,45,13,500 Equity Shares of AEL being held by AAPL as on date of the PA, 12,50,000 Equity Shares has been pledged with The State Industrial & Investment Corporation of Maharashtra (‘SICOM’) for a term loan of Rs. 750

lacs. AAPL has also pledged 38,50,000 Equity Shares with the Export and Import Bank of India (‘EXIM’ Bank) for a term loan Rs. 6,500 lacs.

3.14 The issued and paid up share capital of AAPL constitutes 52,14,000 equity shares of Rs. 10 each aggregating Rs. 521.40 lacs. The shareholding pattern of AAPL as on date of the PA is as follows:

Sl. Name of the Share Holders No. of % age of No. shares shareholding 1 Priti G. Adani (on behalf of S. B. Adani Family Trust) 20,42,799 39.18 2 Shilin R. Adani (on behalf of S. B. Adani Family Trust) 42,799 0.82 Vinod S. Adani(on behalf of S. B. Adani Family 3 Trust) 42,800 0.82 Mrs. Ranjan V. Adani(on behalf of S. B. Adani 4 Family Trust) 42,798 0.82 Pranav V. Adani(on behalf of S. B. Adani Family 5 Trust) 42,800 0.82 Mrs. Priti G. Adani(on half of Adani Investment ) 6 10,00,000 19.18 Mrs. Shilin R. Adani (on behalf of Adani Investment ) 7 10,00,000 19.18 Vinod S. Adani(on behalf of Adani Investment ) 8 5,00,000 9.59 Mrs. Ranjan V. Adani(on behalf of Adani Investment) 9 5,00,000 9.59 Mahasukh S. Adani(on behalf of Mahasukhbhai S. 10 Adani Family Trust) 1 Negligible Gautam S. Adani(on behalf of Gautambhai S. Adani 11 Family Trust) 1 Negligible

12 Rajesh S. Adani(on behalf of Rajesh S. Adani Family 1 Negligible Trust) Vasant S. Adani (on behalf of Vasant. S. Adani 13 Family Trust) 1 Negligible

Total 52,14,000 100.00

3.15 As on the date of PA, the Board of Directors of AAPL is as follows:

Name of Experience Qualifications Date of Address Director Appointment Laxmiprasad approximately 20 B.Com. from 11/06/2004 23-A, Satyakam Society, Chaudhary yrs of Experience in Jodhpur University Opp. Kanchandeep Flats, Nehrunagar, Ahmedabad 380 Export and Import 015 business Samir Vora approximately 15 B.S.C in Computer 17/07/2004 C-1003, Spring Valley, Opp. years of Experience Science from Doctor House, Ellisbridge, Ahmedabad 380006 in International California State Trade University, USA 3.16 The audited financial information of AAPL, is given below, in compliance with the provisions of Clause 4.1.9 of the standard letter of offer format as prescribed by SEBI:

(Rs. In Lacs) Profit & Loss Statement FY2004 FY2005 FY2006 FY2007

Income from Operations* 4,893.74 577.14 14,905.44 8,687.86 Other Income** 38.21 767.09 3,669.34 6,513.05***

Total Income 4,931.94 1,344.23 18,574.78 15,200.90@ Total Expenditure 7,250.46 1,700.30 19,465.81 10,250.90@ Diminution in Value of Unquoted Investments 0 0 0 2,705.54 Profit/(Loss) Before Depreciation Interest and Tax (2,318.52) (356.07) (891.04) 2,244.46 Tax 0 0 0 0 Depreciation 4.89 1.46 1.32 1.62 Interest 1,283.19 (38.54) 174.33 39.93 Profit Before Tax (3,606.59) (318.98) (1,066.69) 2,202.90 Excess Provision Written Back 4.10 2.31 4.26 (0.01) Prior Period Expenses 0 48.50 0.08 0.07 Provision for Tax 0 0 0.27 0.23 Profit After Tax (3,610.69) (365.17) (1,071.29) 2,202.60

Balance Sheet Statement FY2004 FY2005 FY2006 FY2007

Source of funds Paid up share capital 521.40 521.40 521.40 521.40 General Reserve and surplus 0 0 0 0 Net worth (3.036.24) (3,401.12) (4,472.14) (2,269.27) Capital Reserves on account of Amalgamation $ 9,990.94 9,990.94 9,990.94 9,990.94 Secured loans 0 495.00 0 750.00 Unsecured loans 8,764.78 0 11,004.46 14,776.75 Total 19,277.12 11,007.34 21,516.80 26,039.09 Uses of funds Net fixed assets 30.53 8.68 8.98 7.96 Investments 17,935.02 26,114.90 18,573.67 14,002.94 Net Current Assets (2,246.06) (19,038.76) (2,059.39) 9,237.52

Total Miscellaneous expenditure not written off 1.66 1.38 1.11 0.83 Profit & Loss Account 3,555.98 3,921.14 4,992.43 2,789.84 Total 19,277.12 11,007.34 21,516.80 26,039.09

Other Financial Data FY2004 FY2005 FY2006 FY2007 Dividend (%) Nil Nil Nil Nil Earning Per Share(Rs.) -ve -ve -ve 42.24 Return on Net-worth (%) - - - - Book Value Per Share(Rs.) -ve -ve -ve -ve

* Income from Operations: Decline in FY 2005 as compared to FY2004 was due to discontinue of activity in Agro Business AND increase in FY 2006 as compared to FY2005 was due to new activity started in Treasury & Commodity operations **Other Income: Increase in FY2006 as compared to FY2005 was due to increase in Brokerage Income & Profit on sale of shares of Adani Wilmar Limited. ***Other Income for FY2007 include income of Rs. 1,970.21 lacs received from four partnership firms, in which AAPL is a partner, an income of Rs. 3,767.56 lacs against profit on sale of investments, dividend income of Rs. 161.65 lacs, income from development rights for Rs. 613.51 lacs and miscellaneous income of Rs.0.11 lacs. @ Decrease in Total Incomes and Expenditures during FY2007 was due to closing down of the commodity division, which was continuously incurring losses during past years $ not included in calculating net-worth # increase in profit due to profit on sale of shares of Adani Wilmar Limited

Earning Per Share = Profit After Tax / Outstanding Number of Equity Shares

Return on Net-worth = [Profit After Tax / Net-worth] *100

Book Value Per Share = Net-worth / Outstanding Number of Equity Shares

Source: Annual Reports of AAPL containing audited financials for the years ended March 31, 2004, 2005, 2006 and 2007.

Auditor to the report: Dharmesh A. Parikh & Co., Chartered Accountants, 303/304 ''Milestone '', Near Drive-in- Cinema, Opp. T. V. Tower, Thaltej, Ahmedabad-380054, Ph:+91-79-27479955 E-mail:[email protected]

3.17 Significant Accounting Policies for the year ended March 31, 2007:

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 uncertainty.

b) INVENTORIES

i) Inventories are valued at lower of cost or net realisable value.

ii) The basis of determining cost for various categories of inventories are as follows:

a) Shares / Debentures : First in First Out (FIFO)

c) CONTINGENT LIABILITIES

All liabilities have been provided for in the accounts except liabilities of a contingent nature which have been disclosed at their estimated value in the notes on accounts.

d) PRIOR PERIOD ITEMS

Expenditure/Income relating to earlier years is netted off and the balances at the end of the year in such account are transferred to the Profit & Loss account.

e) 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.

f) REVENUE RECOGNITION

Dividend / Interest income from investments and shares held as stock in trade is recognised when the company's right to receive payment is established.

g) FIXED ASSETS

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

h) INVESTMENTS

Long terms quoted 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.

i) RETIREMENT BENEFITS

i) Liabilities for payment of Gratuity & Super Annuation to employees are covered through Group Gratuity & Super Annuation Scheme of Life Insurance Corporation of India. ii) The liability on account of gratuity is determined on the basis of assessment by L.I.C. of India in terms of a Group Gratuity Policy taken out with them and the amount is covered by the premium paid on such basis. iii) The Company has not provided the liabilities pertaining to accrued leave encashment as at the year end & accounting on actual payment basis. iv) The Company contributes towards provident and pension fund which is administered by the Central Government and are charged against revenue every year.

j) SEGMENT ACCOUNTING

k) 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.

l) EARNING PER SHARE

The earnings considered in ascertaining the Company’s EPS comprises of the net profit after tax (and includes the post tax effect of any extra ordinary items) attributable to equity share holder. The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the year.

m) TAXES ON INCOME

a) In absence of taxable income in the current year, provision for taxation has not been made. b) In case of matters under appeal, due to disallowance or otherwise, full provision will be made when the said liabilities are accepted. c) Deferred tax is recognized, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainty of realisation of such asset. Other deferred tax assets are recognized only to the extent there is reasonable certainty of realisation in future. Such assets are reviewed at each Balance Sheet date to reassess realisation.

n) MISCELLANEOUS EXPENDITURE (TO THE EXTENT NOT WRITTEN OFF OR ADJUSTED)

` Preliminary expenses is being amortised over a period of Ten years.

3.18 As on date of PA, the PAC is party to the following outstanding litigation:

Sl. No. Nature of Brief Details of the Case Amount Case Involved 1 Criminal SEBI has filed a criminal complaint (CC 686/Misc/2004) Not Complaint against Adani Exports Limited (presently known as Adani Quantifiable Enterprises Limited), Adani Agro Limited, Adani Impex Limited, Shahi Property Developers Limited, Adani Properties Limited, Advance Exports, Intercontinental India, Vinodbhai S. Adani Family Trust, Rajeshbhai S. Adani Family Trust, Vasantbhai S. Adani Family Trust and Mahsukhbhai S. Adani Family Trust before the Additional Chief Metropolitan Magistrate, Mumbai. As per the complaint, it is alleged that the promoters of AEL had executed off-market deals amongst themselves in violation of Section 2 (i) (a) and 16 of Securities Contract Regulation Act, 1956 (‘SCRA’) and SEBI’s notification dated March 1, 2000. It is alleged that the off- market deals transacted by the accused were executed after a considerable delay and hence were in violation of the above sections and the SEBI notification and the same is punishable under Section 23 read with Section 24 of the SCRA, 1956 read with Section 120-B of the IPC. It is further alleged that since the accused were responsible for the day to day conduct of the business of the accused companies/firms, they are responsible for the off-market deal in respect of the scrip of AEL. The complainant has prayed that the court take cognizance of the violations of Section 2 (i) (a) and 16 of SCRA and the aforesaid SEBI notification. The matter is pending and the next date of hearing has been fixed on November 01, 2007. 2 SEBI Order SEBI vide an order dated May 25, 2007 had prohibited seven Not Adani Group entities viz. Adani Agro Private Limited, Adani Quantifiable Impex Private Limited, Crown International, Shahi Property Developers Private Limited, Adani Properties Private Limited, Advance Exports and Intercontinental India from accessing the securities market directly or indirectly and also prohibited them from buying/selling or otherwise dealing in securities in any manner for a period of two years from the date of the order. Adani Agro Private Limited, one of the entities named in the said order, is the person acting in concert with the Acquirer for the purpose of this offer. The honourable Securities Appellate Tribunal (‘SAT’) vide the order dated July 13, 2007, has granted a stay on the said SEBI order and has fixed the date of next hearing on September 18, 2007.

3.19 Mr. Umang R. Desai – Company Secretary is the Compliance Officer. The correspondence address is as below: Mr. Umang R. Desai Company Secretary 8th Floor, ‘Shikhar’, Mithakali Six Roads, Navrangpura, Ahmedabad Tel.: +91-79-2656 5555, Fax: +91-79-2656 5500 Email:[email protected]

3.20 Mergers, de-mergers and / or spin-offs involving AAPL during the last three years: There has not been any merger, de-merger and/or spin-offs involving AAPL during the last three years.

3.21 Disclosure in terms of Regulation 16(ix) The Acquirers are part of the Promoter group of the Target Company, which is already having control and management of the Target Company. Pursuant to this offer, there will be no change in the control and management of the Target Company. The Acquirers do not intend to dispose of or otherwise encumber any assets of the Target Company, in the succeeding two years, except to the extent that may be required (i) in the ordinary course of business of the Target Company and/or (ii) for the purposes of restructuring, rationalising and/or streamlining various operations, assets, liabilities, investments, businesses or otherwise of the Target Company. Notwithstanding

the immediately preceding sentence, it will be the responsibility of the Board of Directors of AEL to make appropriate decisions in these matters, in accordance with the requirements of the business of AEL and in line with opportunities or changes in the economic scenario from time to time. Such approvals and decisions will be governed by the provisions of the relevant regulations or any other applicable laws at the relevant time. Further, the Acquirers undertake not to sell, dispose off or otherwise encumber any substantial assets of AEL, except with the prior approval of shareholders of AEL, as may be required under law.

3.22 Future plans/strategies of the Acquirers with regard to the Target Company: The Acquirers along with other persons/entities forming part of the Promoter group of AEL, are already controlling and managing the affairs of the Target Company and will continue to do so, post completion of this offer also. Based on such periodical evaluation and review, as well as general economic and industry conditions prevailing at the time, the Acquirers may consider from time to time, various alternative courses of action. Such actions may involve the sale of all or a portion of the Shares in the open market, in privately negotiated transactions, or otherwise, subject to the provisions of the applicable law at the relevant time. However, all the decisions as regard managing the business of the Target Company will be taken by the Board of Directors of AEL in the normal course of business and also in the best interest of the Target Company.

All owners of Shares, registered or unregistered, except the Acquirers and the Promoter Group of AEL, are eligible to participate in the Offer anytime before closure of the Offer.

4. DISCLOSURE IN TERMS OF REGULATION 21(2) AND 21(3) OF THE REGULATIONS:

4.1 Pursuant to this Offer, the Acquirers would ensure that they would comply with provisions of Regulation 21(2) of the Regulations.

5. BACKGROUND OF THE TARGET COMPANY

5.1 Adani Enterprises Limited is a public limited company incorporated on March 02, 1993 under the Companies Act, 1956 and having its registered office at ‘Adani House’, Near Mithakhali Six Roads Navrangpura, Ahmedabad - 380 009, Gujarat, India. AEL was incorporated as ‘Adani Exports Limited’ and the name was changed to the present name of ‘Adani Enterprises Limited’ vide fresh certificate of registration dated August 10, 2006. The main objects and primary business of AEL is export and import of commodities. The shares of AEL are listed on BSE, NSE and ASE. The closing price of AEL as on the BSE on February 27, 2007 (last available closing market price) was Rs. 212.40 (Source: www.bseindia.com) and on the NSE was Rs. 212.25 (last available closing market price) as on February 27, 2007 (Source: www.nseindia.com).

5.2 AEL is primarily engaged in the business of export and import of commodities.

5.3 The complete address and contact details of the promoters of the Target Company are as follows:

Name Address Telephone Fax Gautam Shantilal Adani Shantivan, Behind Karnavati Club, Off S.G. +91-79-26752655 +91-79-2656 5500 Road, Mohemadpura, Ahmedabad-380 058, India Rajesh Shantilal Adani 14, Suryaja Bungalows, Near Sarathi +91-79-26752655 +91-79-2656 5500 Restaurant, Vastrapur, Ahmedabad-380 054, India Vasant Shantilal Adani 15, Suryaja Bungalows, Near Sarathi +91-79-26750730 +91-79-2656 5500 Restaurant, Vastrapur, Ahmedabad-380 054, India Priti Gautam Adani, Shantivan, Behind Karnavati Club, Off S.G. +91-79-26750730 +91-79-2656 5500 Road, Mohemadpura, Ahmedabad-380 058, India Shilin Rajesh Adani 14, Suryaja Bungalows, Near Sarathi +91-79-26749948 +91-79-2656 5500 Restaurant, Vastrapur, Ahmedabad-380 054, India Pushpa Vasant Adani 15, Suryaja Bungalows, Near Sarathi +91-79-26749948 +91-79-2656 5500 Restaurant, Vastrapur, Ahmedabad-380 054, India Mahasukh Shantilal Adani 9, Maitry Bungalow, Opp. Jhanvi Restaurant, +91-79-25555396 +91-79-2656 5500 17

Ambavadi, Ahmedabad-380 009, India Suvarna Mahasukh Adani 9, Maitry Bungalow, Opp. Jhanvi Restaurant, +91-79-25555396 +91-79-2656 5500 Ambavadi, Ahmedabad-380 009, India Vinod Shantilal Adani 15, Suryaja Bungalows, Near Sarathi +91-79-26750730 +91-79-2656 5500 Restaurant, Vastrapur, Ahmedabad-380 054, India Ranjan Vinod Adani 15, Suryaja Bungalows, Near Sarathi +91-79-26750730 +91-79-2656 5500 Restaurant, Vastrapur, Ahmedabad-380 054, India Pranav Vinod Adani 15, Suryaja Bungalows, Near Sarathi +91-79-26750730 +91-79-2656 5500 Restaurant, Vastrapur, Ahmedabad-380 054, India Bhavik Bharatbhai Shah C-802, Chandanbala Apartments, Opp. +91-79-25555121 +91-79-2656 5500 Suvidha Shopping Centre, Mahalaxmi, Ahmedabad-380 07, India Surekha Bhavik Shah C-802, Chandanbala Apartments, Opp. +91-79-25555121 +91-79-2656 5500 Suvidha Shopping Center, Mahalaxmi, Ahmedabad-380 07, India Rakesh Raman Lal Shah E-37, Ayajan Nagar, Co-operative Housing +91-79-26611414 +91-79-2656 5500 Society, Near Shreyas Railway Crossing, Ambawadi, Ahmedabad-380 015, India Priti Rakesh Shah E-37, Ayajan Nagar, Co-operative Housing +91-79-26611414 +91-79-2656 5500 Society, Near Shreyas Railway Crossing, Ambawadi, Ahmedabad-380 015, India Vinod Natwarlal Sanghvi A/22, Ashok Kunj, 4th Floor, Tejpal Road, +91-22-2612 5745 +91-79-2656 5500 Vile Parle (East), Mumbai-400 057, Maharashtra, India Rajesh Shantilal Adani 8th Floor, Shikhar, Near Mithakali Six Road, +91-79-2656 5555 +91 79 2656 5500 Family Trust Navrangpura, Ahmedabad-380 009, India Vasant Shantilal Adani 8th Floor, Shikhar, Near Mithakali Six Road, +91-79-2656 5555 +91 79 2656 5500 Family Trust Navrangpura, Ahmedabad-380 009, India Gautam Shantilal Adani 8th Floor, Shikhar, Near Mithakali Six Road, +91-79-2656 5555 +91 79 2656 5500 Family Trust Navrangpura, Ahmedabad-380 009, India Mahasukh Shantilal Adani 8th Floor, Shikhar, Near Mithakali Six Road, +91-79-2656 5555 +91 79 2656 5500 Family Trust Navrangpura, Ahmedabad-380 009, India Vinod Shantilal Adani 8th Floor, Shikhar, Near Mithakali Six Road, +91-79-2656 5555 +91 79 2656 5500 Family Trust Navrangpura, Ahmedabad-380 009, India S. B. Adani Family Trust 9th Floor, Shikhar, Near Mithakali Six Road, +91-79-2656 5117 +91 79 2555 5314 Navrangpura, Ahmedabad-380 009, India Adani Agro Private Limited 8th Floor, Shikhar, Near Mithakali Six Road, +91-79-2656 5555 +91 79 2656 5500 Navrangpura, Ahmedabad-380 009, India Adani Port Infrastructure 8th Floor, Shikhar, Near Mithakali Six Road, +91-79-2656 5555 +91 79 2656 5500 Private Limited Navrangpura, Ahmedabad-380 009, India Adani Infrastructure ‘Adani House’, Near Mithakali Six Road, +91-79-2656 5555 +91-79-2656 5500 Services Private Limited Navrangpura, Ahmedabad-380 009, India Advance Investments 8th Floor, Shikhar, Near Mithakali Six Road, +91-79-2656 5555 +91 79 2656 5500 Navrangpura, Ahmedabad-380 009, India Intercontinental India 8th Floor, Shikhar, Near Mithakali Six Road, +91-79-2656 5555 +91 79 2656 5500 Navrangpura, Ahmedabad-380 009, India Adani Investments 8th Floor, Shikhar, Near Mithakali Six Road, +91-79-2656 5555 +91 79 2656 5500 Navrangpura, Ahmedabad-380 009, India

5.4 The issued and paid-up equity share capital of the AEL consists of 24,64,86,975 fully paid-up equity shares of the face value of Re. 1 each, aggregating to approximately Rs. 2,465 lacs. As on the date of PA, there are no other outstanding convertible instruments except 25,000 Foreign Currency Convertible Bonds to be converted into Equity Shares on a future date.

5.5 The shareholding pattern of AEL as on December 31, 2006 is as below:

Shareholder No. of shares % holding (A) Promoter and Promoter Groups’ shareholding Total Promoter and Promoter Groups’ shareholding 16,48,99,540* 66.90*

(B)Non-promoters’ shareholding Institutional Shareholders 2,99,08,795 12.13 Private Corporate Bodies 1,50,22,654 6.09 NRI/OCBs 49,01,439 1.99 Individuals 3,11,22,136 12.62 Foreign Nationals 5,000 0.002 Shares in transit 6,27,411 0.25 Total non-promoter shareholding 8,15,87,435 33.10

Grand Total (A)+(B) 24,64,86,975 100.00 *includes 90,00,000 and 2,42,50,000 shares pledged with State Bank of India(‘SBI’) and Bank of India (‘BoI’) respectively.

5.6 The change in the shareholding pattern of promoters of Target Company during the last three financial years ending March 31:

As on March 31 2006 2005 2004

% No. of % No. of % No. of Shares sharehold Shares shareholding Shares shareholding ing Indian Promoters and 16,49,25,540 72.91 16,49,25,540# 73.12 1,55,38,554* 70.48* Promoter Group Foreign Promoters and 0 0 0 0 0 0 Promoter Group Total Shareholding of Promoter and Promoter 16,49,25,540 72.91 16,49,25,540 73.12 1,55,38,554 70.48 Group

*does not include 97,21,000 equity shares pledged with State Bank of India and Lord Krishna Bank. #1,81,000 Equity Shares were sold by the promoters group between March 31, 2004 and March 31, 2005.

5.7 AEL complied with the provisions of Chapter II requirements of the Regulations under the SEBI Regularisation Scheme, 2002 till 2002. Thereafter, it has made regular compliance with the requirements.

5.8 The built-up of capital structure of AEL since incorporation is given below:

Date of Allotment Number of %age Cumulative Mode of Identity of the Status of Shares Paid up Allotment Allottee Compliance Capital Initial Complied 2nd March, 1993 10,00,000 100 1,00,00,000 Subscriber Promoters with Complied 27th November,1993 22,50,000 6.92 3,25,00,000 Rights Issue Promoters with Complied 27th November, 1993 5,00,000 1.33 3,75,00,000 Bonus Promoters with Initial Public Complied 1st November, 1994 12,61,900 2.51 5,01,19,000 Offering Non-Promoters with 30th March, 1995 5,00,000 0.90 5,51,19,000 Pursuant to Complied the scheme of with amalgamatio

n as approved by High Court of Gujarat to the shareholders of erstwhile Adani Management and Consultancy Services P. Ltd. Complied 26th November, 1996 55,11,800 5 11,02,37,000 Bonus with Complied 29th December, 1999 1,10,23,700 5 22,04,74,000 Bonus with Issued on conversion of 35,25,442 22,39,99,442 515 Foreign 1.57 Currency

18th February, 2005 Convertible Complied

Bonds with (FCCBs) into Equity Shares Issued on conversion of 15,40,242 22,55,39,684 225 Foreign 0.68 Currency Complied

21st March, 2005 Convertible with

Bonds (FCCBs) into Equity Shares Issued on conversion of 25 Foreign 1,71,138 Currency Complied 0.07 22,57,10,822 3rd June, 2005. Convertible with Bonds (FCCBs) into Equity Shares Issued on conversion of 2,05,365 22,59,16,187 30 Foreign 0.09 Currency Complied

12th August, 2005 Convertible with

Bonds (FCCBs) into Equity Shares Issued on conversion of 2,73,820 22,61,90,007 40 Foreign 0.12 Currency Complied

11th November, 2005 Convertible with

Bonds (FCCBs) into Equity Shares Issued on conversion of 6,84,552 22,68,74,559 100 Foreign 0.30 Currency Complied

8th May, 2006 Convertible with

Bonds (FCCBs) into Equity Shares 23rd May, 2006. 31,96,858 1.38 23,00,71,417 Issued on Complied

conversion of with

467 Foreign Currency Convertible Bonds (FCCBs) into Equity Shares Issued on conversion of 23,82,241 23,24,53,658 348 Foreign 1.02 Currency Complied

28th June, 2006 Convertible with

Bonds (FCCBs) into Equity Shares Issued on conversion of 90 Foreign 6,16,096 23,30,69,754 Currency 0.26 Convertible

Bonds Complied

25th August, 2006. (FCCBs) into with Equity Shares

Issued on conversion of 6,84,552 100 Foreign 0.29 23,37,54,306 Currency Complied

5th October, 2006. Convertible with

Bonds (FCCBs) into Equity Shares Issued on conversion of 1,04,39,420 24,41,93,726 1525 Foreign 4.27 Currency Complied

6th November, 2006 Convertible with

Bonds (FCCBs) into Equity Shares Issued on conversion of 22,93,249 24,64,86,975 335 Foreign 0.93 Currency Complied

25th November, 2006 Convertible with

Bonds

(FCCBs) into Equity Shares

5.9 AEL has complied with all the provisions of the Listing Agreement. Further, no punitive action has ever been initiated against AEL by any of the stock exchanges where its shares are listed.

5.10 As on date of PA Date, the board of directors of AEL comprised of the following:

Name Experience Qualification Date of Residence Address Appointment Gautam Shantilal 20 years of varied S. Y. B. Com March 02, ‘Shantivan’, Behind Adani, experience in 1993 Karnavati Club, Chairman manufacturing and Gandhinagar-Sarkhej trading Highway, Mohemadpura, Ahmedabad-380 058, India

Rajesh Shantilal 13 years of B.Com. March 02, 14, Suryaja Bungalow, Adani, experience in 1993 Near Sarathi Restaurant, Managing Director financial and Vastrapur, Ahmedabad- commercial 380 054, India functions Pradeep Mittal 28 years of Diploma in July 29, 2006 84, Navrang Basant, 8th Whole-time Director experience in Marketing Floor, Colaba, Mumbai- trading of coal, 400 005, India managing infrastructure related business Vasant Shantilal 15 years of B.A. June 20, 1994 15, Suryaja Bungalow, Adani experience in real Near Sarathi Restaurant, estate development Vastrapur, Ahmedabad- and general 380 054, India management Jay Himatlal Shah 19 years of B. Com, LL. B. June 20, 1995 7/8, Blooming heights, experience in Auxillium Convent trading and global Road, 4, Pali Hill, sourcing of Bandra (West), Mumbai chemical and 400 050, India petrochemical business Pravin Pranlal Shah 37 years of B. Com, FCA, January 28, 502, Dolly Chambers, experience in areas Grad. ICWA, 1994 5th Floor, Strand Cinema of financial Ph.D. (Cost Road, Colaba, Mumbai- consultancy, Accounting) 400 005, India taxation, valuation, property matters, accounting, auditing, corporate laws, and FEMA Amrutlal Chunilal He has more than 30 M.A., June 22, 1996 C-1/2, Lloyds Garden, Shah years of extensive Ph.D.(Economics) Appa Saheb Maratha banking experience. Marg, Prabhadevi, Mumbai 400 025 Chinubhai Ramanlal 37 years of M. A. , LL.M., October 20, 401, Heritage Cresent, Shah experience in areas FCS 2000 Behind Prahlad Nagar of Corporate Laws Garden, Nr. Jain and other allied Derasar, S.G. Highway, laws. Ahmedabad – 380 051

None of the directors on the board of AEL, represent the Acquirers.

5.11 The standalone audited financial details of AEL are as under, in compliance with the provisions of Clause 6.14 of the Standard Letter of Offer format as prescribed by SEBI: (Rs. in lakhs) Profit & Loss Statement FY2004 FY2005 FY2006 FY 2007 Income from operations 7,06,905.00 13,51,584.00 9,33,788.00 10,15,166.00

Other Income 7,698.00 303.00 138.00 399.00 Total Income 7,14,603.00 13,51,887.00 9,33,926.00 10,15,565.00 Total Expenditure 6,96,459.00 13,33,399.00 9,05,303.00 9,80,676.00 Profit Before Depreciation Interest 18,145.00 18,488.00 28,623.00 34,889.00 and Tax Depreciation 179.00 211.00 321.00 690.00 Interest 5,352.00 5,215.00 12,657.00 14,368.00 Profit Before Tax 12,614.00 13,062.00 15,645.00 19,831.00 Provision for Tax 205.00 2,233.00 3,811.00 47,62.00 Profit After Tax 12,409.00 10,829.00 11,834.00 150,69.00

Balance Sheet Statement FY2004 FY2005 FY2006 FY2007 Sources of funds Paid up share capital 3,205.00 2,255.00 2,262.00 2,465.00 Reserves and Surplus (excluding 59,167.00 65,472.00 74,781.00 1,01,953.00 revaluation reserves) Net worth 62,372.00 67,727.00 77,043.00 1,04,418.00 Secured loans 26,526.00 38,273.00 87,222.00 88,709.00 Unsecured loans 8,624.00 45,660.00 44,750.00 2,13,746.00 Net Deferred Tax Liability 280.00 636.00 672.00 1,690.00 Total 97,802.00 1,52,296.00 2,09,687.00 4,08,563.00 Uses of funds Net fixed assets 3,601.00 5,617.00 7,813.00 20,798.00 Investments 6,938.00 4,667.00 19,293.00 60,082.00 Net current assets 87,171.00 1,41,728.00 1,82,581.00 3,27,683.00 Total miscellaneous expenditure 92.00 284.00 0.00 0.00 not written off Total 97,802.00 1,52,296.00 2,09,687.00 4,08,563.00

Other Financial Data FY2004 FY2005 FY2006 FY2007 Dividend (%) 40 40 45 45 (including interim dividend) Earning Per Share (Rs.) 5.58 4.89 5.24 6.35 Return on Net worth 19.92% 16.06% 15.36% 14.43% Book Value Per Share (Rs.) 28.24 29.91 34.06 42.36

Earning Per Share = Profit After Tax / Outstanding Number of Equity Shares Return on Net-worth = [Profit After Tax / Net-worth] *100 Book Value Per Share = Net-worth / Outstanding Number of Equity Shares Source: Annual Reports of AEL containing audited financials for the years ended March 31, 2004, 2005, 2006 and 2007.

Auditor to the report: Dharmesh Parikh & Co, Chartered Accountants, 303/304 ''Milestone '' Milestones, Near Drive-in-Cinema, Opp. T. V. Tower, Thaltej, Ahmedabad-380054, Ph:+91-79-27479955 E.mail:[email protected]

5.12 The equity shareholding in AEL before the Offer and after the Offer (assuming full acceptance of the Offer) is given in the table below:

Shareholders Shareholding /Voting Shares / Voting Shareholding / Shareholding / Voting ’ Category Rights prior to the Rights agreed to be Voting Rights to be Rights after the Offer acquired which acquired in the Acquisition and Offer triggered off the Open Offer (D) Regulations (Assuming full acceptances) (A) (B) (C) No. of Shares % No. of % No. of % No. of % Shares Shares Shares 1. Promoter 14,78,19,040 59.97 NA NA 0 0 14,78,19,040 59.97 Group of AEL excluding the Acquirers Total 1 14,78,19,040 59.97 NA NA 14,78,19,040 59.97

2. Acquirers 1,70,73,500 6.93 NA NA 1,99,72,691 8.1 3,70,46,191 15.03 Total 16,48,92,540 66.90 NA NA 8.1 18,48,65,231 75.00 Shareholding 1,99,72,691 of Promoter Group(1+2)

3. Parties to NA NA NA NA NA NA NA NA Agreement other than (1)(a) and (2) above Total (3) NA NA NA NA NA NA NA NA

4. Public (other NA NA 0 0 than parties to Agreement, Acquirers) a) FIs / MFs 21.27 NA NA 0 0 / FIIs/ 5,24,43,635 Banks / SFIs/PCB b) Resident NA NA 0 0 Individuals 2,34,48,194 9.52 c) NRIs 53,06,654 2.15 d) Shares in Transit 3,90,952 0.16 e) Foreign Nationals 5000 0.00 Total 4 33.10 NA NA 0 0 25.00 (a+b+c+d+e) 8,15,94,435 6,16,21,744

Grand Total 24,64,86,975 100 NA NA 1,99,72,691 8.1 24,64,86,975 100 (1+2+3+4) Source: The above figures are based on the information as on June 30, 2007.

5.13 As on the date of PA, there were 21,676 shareholders in AEL. Out of the same, 21,654 shareholders are in public category.

5.14 The trading of the shares of the Target Company have neither been suspended by any stock exchange nor has there been any instance of refusal to list its shares.

5.15 The Acquirers, the promoters and major shareholders of the Target Company has duly complied with chapter II of Board of Directors Category Member of Audit Member of Member of Shareholders’ Committee Remuneration Grievance Committee Committee Gautam Shantilal Executive- NA NA NA Adani Non-Independent Rajesh Shantilal Executive- NA NA NA Adani Non-Independent Pradeep Mittal Executive- Non- NA NA NA Independent Vasant Shantilal Non-Executive- Non- NA NA Member Adani Independent Jay Himatlal Shah Non-Executive- Member Member Member Independent Pravin Pranlal Shah Non-Executive- Member Chairman NA Independent Amrutlal Chunilal Non-Executive- Member Member Member Shah Independent Chinubhai Ramanlal Non-Executive- Chairman Member Chairman Shah Independent the Regulations within the time specified in the Regulations.

5.16 Status of Corporate Governance & Pending Litigation Corporate Governance AEL has 4 independent directors on its Board and has constituted the Audit Committee, Shareholders’ Grievance Committee and Remuneration Committee as required under Clause 49 of the Listing Agreement with the requisite number of independent directors in each committee. The details are as follows:-

Pending Litigation: As on date of the PA, AEL and its directors are involved in the following litigations/disputes:

I. Litigation against Adani Enterprises Limited: Sl. No. Nature of Brief Details of the Case Amount Case Involved 1 Criminal SEBI has filed a criminal complaint (CC 686/Misc/2004) against Not Quantifiable Complaint Adani Exports Limited (presently known as Adani Enterprises Limited), Adani Agro Limited, Adani Impex Limited, Shahi Property Developers Limited, Adani Properties Limited, Advance Exports, Intercontinental India, Vinodbhai S. Adani Family Trust, Rajeshbhai S. Adani Family Trust, Vasantbhai S. Adani Family Trust and Mahsukhbhai S. Adani Family Trust before the Additional Chief Metropolitan Magistrate, Mumbai. As per the complaint, it is alleged that the promoters of AEL had executed off-market deals amongst themselves in violation of Section 2 (i) (a) and 16 of Securities Contract Regulation Act, 1956 (‘SCRA’) and SEBI’s notification dated March 1, 2000. It is alleged that the off-market deals transacted by the accused were executed after a considerable delay and hence were in violation of the above sections and the SEBI notification and the same is punishable 25

under Section 23 read with Section 24 of the SCRA, 1956 read with Section 120-B of the IPC. It is further alleged that since the accused were responsible for the day to day conduct of the business of the accused companies/firms, they are responsible for the off-market deal in respect of the scrip of AEL. The complainant has prayed that the court take cognizance of the violations of Section 2 (i) (a) and 16 of SCRA and the aforesaid SEBI notification. The matter is pending.

2 SEBI Order SEBI vide an order dated May 25, 2007 had prohibited seven Not Quantifiable Adani Group entities viz. Adani Agro Private Limited, Adani Impex Private Limited, Crown International, Shahi Property Developers Private Limited, Adani Properties Private Limited, Advance Exports and Intercontinental India from accessing the securities market directly or indirectly and also prohibited them from buying/selling or otherwise dealing in securities in any manner for a period of two years from the date of the order. Adani Agro Private Limited, one of the entities named in the said order, is the person acting in concert with the Acquirer for the purpose of this offer. The honourable Securities Appellate Tribunal (‘SAT’) vide the order dated July 13, 2007, has granted a stay on the said SEBI order and has fixed the date of next hearing on September 18, 2007. 3 Show Cause Two notices have been issued to AEL by the Government of India Notice under under the Customs Act, 1962 (‘Customs Act’) and the Foreign the Customs Exchange Management Act, 1999 (‘FEMA’), respectively, in Act, 1962 relation to foreign exchange violations arising out of mis- (‘Customs declaration and over invoicing by M/s. Vaishal Impex of goods Act’) and the that it had imported. Foreign Exchange Although the proceedings in relation to the show cause notice Management under the Customs Act have been decided in our favour by Rs.40,42,912/- Act, 1999 Hon’ble CESTAT, Bangalore in AEL’s favour, the department (‘FEMA’) filed appeal before Supreme Court of India. The matter is pending.

In relation to the show cause notice issued under FEMA, the Appellate Tribunal for Foreign Exchange, New Delhi had in an order dated January 4, 2006 asked AEL to deposit the penalty amount pending adjudication. However, pursuant to an appeal Rs.4,00,00,000/- filed by AEL, the Gujarat High Court in an order dated April 4, 2006 has quashed the said order and remanded the matter to the Directorate General of Service Tax, Mumbai. Against the said Order of High Court of Gujarat, the department filed appeal before Supreme Court of India. The matter is pending. 4 Special Leave The Government of India has filed a special leave petition before Not Quantifiable Petition for the Supreme Court of India against a decision of the Gujarat High Target Plus Court giving partial relief to AEL, which had challenged a Scheme under notification of the Director General of Foreign Trade restricting EXIM Policy the benefits available to ‘status holders’ under the special strategic 02-07 package of the export import policy. AEL has also filed a special leave petition before the Supreme Court against the decision of the Gujarat High Court. 5 Show Cause The Commissioner of Customs, Mumbai has issued a show cause Rs.74,05,506/- notice by the notice (F. No. DRI/BZU/E/2/98 Pt. III/S/10-7/99) dated April 20, Commissioner 1999 to AEL and others for the recovery of Rs.37 lacs as customs of Customs, duty for the import of goods, confiscation of the said imported Mumbai goods alongwith interest and penalty of Rs.37 lacs. CESTAT,

Mumbai has passed an order in favour of AEL. The department has subsequently filed an appeal before the Supreme Court of India. The matter is pending. 6 Show Cause The Commissioner of Customs, Gujarat has issued a show cause Rs.22,25,985/- notice issued notice (No.VIII/10-14/Commr/98-APP) dated May 19, 1998 to by the Mahima Trading and Investment Private Limited and Vikshara Commissioner Trading and Investment Private Limited, their raw material of Customs, suppliers and exporters including AEL, in relation to export of Gujarat certain items. . AS per this show cause notice. AEL’s liability under the show cause notice has been determined to be Rs. 22.3 lacs. In the event that the liability is confirmed, AEL may, subject to the content of order, seek to challenge the same before an appropriate forum. AEL has replied to the show cause notice on November 30, 1998 and has denied any liability. The matter is pending. 7 Violation of There is a matter currently pending against AEL, Mr. Rajesh S. 1,50,000/- provisions of Adani and Mr. Saurin Shah, before the Enforcement Directorate in Customs Act relation to violation of provisions of the Foreign Exchange and Foreign Regulation Act and the Customs Act. The Enforcement Exchange Directorate had imposed a consolidated penalty. However, the Regulation same was set aside by the Appellate Tribunal of Foreign Exchange Act and the matter has been remanded to the Enforcement Directorate, where it is currently pending. 8 Central Excise There are also seven (7) cases pending against AEL before various Rs.97,14,953 /- & Custom forums in relation to the import and export of different items such Authorities of as coal, raw silk and CD Roms. Mumbai, Chennai, Bangalore and Tughalakabad 9 Show Cause Commissioner of Customs and Central Excise, Goa has issued Rs.23,091,644/- notice issued show cause notice (S/25-18/2003 AP) dated September 11, 2003 to by the Adani Exports Limited (‘AEL’) and others. The show cause notice Commissioner has also demanded why a Penalty & Redemption fine should not of Customs, be imposed. However, the CESTAT, vide its order dated February Goa 21, 2006 has stayed the operation of the order of the Commissioner of Customs. The matter is currently pending before CESTAT. 10 Show Cause The Additional Director General, Directorate of Revenue Not applicable notice issued Intelligence, Mumbai has issued show cause notice by the (F.No.DRI/AZU/INT-4/99-PT.IV) dated November 9, 2001 to Commissioner Adani Exports Limited (‘AEL’) and others. The Company has of Customs, been asked to show cause as to why penalty, fine and Custom Gujarat Duty should not be imposed against it under Section 28 (1) of the Customs Act, 1962. However, CESTAT has stayed the said demand and penalty vide its order dated October 30, 2003. The Hon’ble CESTAT, Ahmedabad vide Order No.C/408- 409/WZB/A’bad dated 12.02.2007 decided the matter in our favour by allowing the appeal filed by us. On the basis of said order of Hon’ble CESTAT, AEL has filed refund claim totalling to Rs.66,69,040/-.

Note: The figures mentioned in column ‘Amount Involved’ hereinabove are also covered at Contingent Liabilities Column 11 a) herein below: II .Contingent Liabilities as on March 31, 2007 Particulars Amount (Rs. in lacs) Claims against the Company not acknowledged as debts: 3,035 In respect of corporate guarantee given To companies under the same management 9,246 For obligations to other parties 20,635 Demand against the Company not admitted as debts regarding sales tax against 1,038 which appeals are pending In respect of bank guarantees given to government agencies: 511 Bills of Exchange discounted: 5,8990 In respect of partly paid shares 2 Export obligation of Rs.662 lacs (Previous Year Rs. NIL) is pending which is equivalent to 8 times of duty saved Rs. 83 lacs ( Previous Year Rs. NIL)

Certain claims / show cause notices disputed have neither been considered as contingent liabilities nor acknowledged as claims based on the opinions obtained from internal evaluation of the management.

Show cause notice in terms of value of export goods under section14 of the Customs Act, 1962 read with section 11 of FTDR Act, 1992 and rule 11 & 14 of FT(Regulation) Rule, 1993 in which liability is unascertainable.

330,000 Equity Shares of Adani Power Limited & 5,10,00,000 Equity Shares of Adani Agri Logistics Limited, under the head of Investments are pledged with Banks / Financial Institutions towards collateral security for loan taken by a group Company.-Amount unascertainable.

III. Litigations against the Directors of AEL: Further, there are five pending cases pertaining to civil cases, show cause notices, penalties etc. involving some of the directors of the Company. The amount involved in such cases is Rs. 42 lacs. The amount involved in one of the cases out of the five cases stated above, cannot be quantified as on date.

5.17 Mr. Devang Desai, Chief Financial Officer, AEL, is the compliance officer. The correspondence address is as below: Mr. Devang Desai Chief Financial Officer ‘Adani House’, Near Mithakali Six Roads, Navrangpura, Ahmedabad-380 009 Tel.: +91-79-2656 5555, Fax:+91-79-2656 5500 E-mail: [email protected]

5.18 Mergers, de-mergers or spin off during the last 3 years As per the declaration received from AEL, there has been no merger, de-merger and/or spin off involving AEL.

5.19 There are no other outstanding convertible instruments except 25,000 Foreign Currency Convertible Bonds to be converted into Equity Shares on a future date. However, we hereby confirm in terms of regulation 21(5) that, none of these FCCBs would be converted into Equity Shares within 15 days of the closure of this offer.

5.20 AEL has complied with the listing requirements and no penal action has been taken by any of the Stock Exchanges where shares of AEL are listed and / or permitted to trade.

6. OFFER PRICE AND FINANCIAL ARRANGEMENTS

6.1 Justification of Offer Price

6.1.1 The shares of AEL are listed on BSE, NSE and ASE. The Public Announcement by the Acquirer, pursuant to Regulations 11(2A) and 21(3) read with other applicable provisions of the Regulations was made on February 15, 2007. The annualised trading turnover during the preceding six calendar months ended January’2007 on BSE & NSE is detailed in the table below.

Name(s) of stock Total number of shares traded during six calendar Annualised trading exchange(s) months ended January’2007 turnover (in terms % of total listed shares) NSE 5,88,33,140 48% BSE 6,30,99,631 51% Source: www.bseindia.com, www.nseindia.com

6.1.2 The Offer Price of Rs. 350/- per Share is justified in terms of Regulation 20(11) of the Regulations, as it is more than the highest of the following:

a Negotiated price under the Agreement referred to in Regulation 20(4)(a) N.A. b Highest price paid by the Acquirers for acquisition, if any, including by way of N.A. allotment in a public or rights or preferential issue during the 26-week period prior to the date of the Public Announcement c The average price calculated as per Regulations 20(4)(c) during the 26-week period Rs.177.30 prior to the date of the Public Announcement on BSE, where it is most frequently traded d The average price calculated as per Regulations 20(4)(c) during the 2-week period Rs. 232.69 prior to the date of the Public Announcement on BSE, where it is most frequently traded

There is no negotiated price under any agreement in terms of Regulation 14 (1) of the Regulations, entered into by the Acquirers for acquisition of any shares of the Target Company. Also, the Acquirers have not acquired any shares of the Target Company, by way of any allotment in a public or rights or preferential issue during the 26-week period prior to the date of the Public Announcement.

The Shares of the Target Company are frequently traded at BSE and NSE. There has been no trading in the shares of AEL on ASE during the period of 26 weeks prior to the date of the PA. The shares being most frequently traded on BSE, the offer price per share has been calculated in terms of Regulation 20(4) of the Regulations on the basis of trading prices for the shares quoted on BSE during the relevant period.

The details of the price and volume data on the BSE are as under:

26-week Weekly High / Low

CLOSING PRICE AT BSE Week Week Ending High (Rs.) Low (Rs.) Average (Rs.) Volume (Number of Number Shares) 1 February 14, 2007 237.55 210.05 223.80 22,66,919 2 February 07, 2007 251.30 237.85 244.57 29,03,489 3 January 31, 2007 230.25 221.35 225.80 13,78,396 4 January 24, 2007 226.9 220.15 223.52 11,66,973 5 January 17, 2007 229.1 222.65 225.87 17,30,786 6 January 10, 2007 235.00 220.1 227.55 15,61,329 7 January 03, 2007 231.65 228.05 229.85 10,79,598 8 December 27, 2006 237.15 221.95 229.55 13,56,974 9 December 20, 2006 237.2 220.45 228.82 22,80,582

10 December 17, 2006 244.5 232.3 238.4 72,52,862 11 December 06, 2006 221.45 210.95 216.20 57,77,422 12 November 29, 2006 216.95 183.8 200.37 86,78,773 13 November 22, 2006 167.1 151.15 159.12 69,05,973 14 November 15, 2006 151.95 146.00 148.97 21,07,446 15 November 08, 2006 147.35 136.65 142.00 22,10,773 16 November 01, 2006 141.05 133.8 137.42 7,78,490 17 October 23, 2006 140.5 137.5 139.00 4,89,429 18 October 18, 2006 142.85 136.85 139.85 7,90,479 19 October 11, 2006 147.25 140.5 143.87 21,96,381 20 October 04, 2006 140.05 128.00 134.02 23,64,623 21 September 27, 2006 127.3 124.25 125.77 6,35,686 22 September 20, 2006 126.05 123.85 124.95 4,95,352 23 September 13, 2006 127.8 122.65 125.22 7,53,372 24 September 06, 2006 129.8 119.35 124.57 14,43,947 25 August 30, 2006 125.25 119.95 122.60 14,51,522 26 August 23, 2006 134.00 122.25 128.12 9,61,225 Source: BSE (www.bseindia.com) The average price calculated as per Regulations 20(4)(c) during the 26-week period prior to the date of the Public Announcement on BSE, where it is most frequently traded is Rs. 177.30.

2-week Daily High / Low

INTRA-DAY PRICE AT BSE Day Volume (Number of Number Date High (Rs.) Low (Rs.) Average (Rs.) Shares) 1 February 14, 2007 232.5 212.00 222.25 6,00,863 2 February 13, 2007 221.85 201.00 211.42 4,41,581 3 February 12, 2007 228.00 204.05 216.02 5,92,163 4 February 09, 2007 238.50 225.70 232.10 3,37,022 5 February 08, 2007 244.70 234.15 239.42 2,95,290 6 February 07, 2007 253.90 240.35 247.12 4,31,313 7 February 06, 2007 251.45 239.80 245.62 10,49,883 8 February 05, 2007 241.00 233.05 237.02 2,73,241 9 February 02, 2007 245.00 238.10 241.55 5,03,183 10 February 01, 2007 241.00 227.60 234.30 6,45,869 Source: NSE (www.bseindia.com)

The average price calculated as per Regulations 20(4)(c) during the 2-week period prior to the date of the Public Announcement on BSE, where it is most frequently traded is Rs. 232.69. In compliance with Regulation 20(7), the Acquirers have not acquired any shares in the open market or through negotiation or otherwise, after the date of public announcement at a price higher than the offer price stated in the Letter of Offer. The details of the price and volume data on the NSE are as under:

26-week Weekly High / Low

CLOSING PRICE AT NSE Week Week Ending High (Rs.) Low (Rs.) Average (Rs.) Volume (Number of Number Shares) 1 February 14, 2007 237.3 210.0 223.65 11,42,041 2 February 07, 2007 251.5 237.4 244.45 15,60,145 3 January 31, 2007 230.45 221.4 225.92 22,86,883 4 January 24, 2007 227.2 219.35 223.27 12,95,789 5 January 17, 2007 229.1 225.15 227.12 9,66,151

6 January 10, 2007 235.85 220.15 228.00 8,55,994 7 January 03, 2007 231.75 228.2 229.97 20,41,889 8 December 27, 2006 237.3 222.1 229.70 25,10,362 9 December 20, 2006 237.65 220.4 229.02 7,90,679 10 December 17, 2006 243.95 231.75 237.85 6,20,881 11 December 06, 2006 221.35 210.8 216.07 9,08,515 12 November 29, 2006 216.85 183.85 200.35 24,61,753 13 November 22, 2006 167.1 150.55 158.82 23,45,160 14 November 15, 2006 151.85 146.35 149.10 87,37,931 15 November 08, 2006 147.6 136.65 142.12 1,08,01,616 16 November 01, 2006 141.4 134.1 137.75 1,20,01,586 17 October 23, 2006 140.4 137.05 138.72 75,61,407 18 October 18, 2006 143.15 136.9 140.02 26,73,047 19 October 11, 2006 146.75 140.4 143.57 14,15,307 20 October 04, 2006 139.75 128.2 133.97 11,40,604 21 September 27, 2006 127.25 124.35 125.80 15,90,114 22 September 20, 2006 126.15 124.00 125.07 18,83,226 23 September 13, 2006 128.45 122.95 125.70 12,58,184 24 September 06, 2006 130.2 119.4 124.80 14,14,247 25 August 30, 2006 125.1 119.9 122.50 33,37,112 26 August 23, 2006 134.05 122.55 128.30 28,04,123 Source: NSE (www.nseindia.com)

2-week Daily High / Low

INTRA-DAY PRICE AT NSE Day Volume (Number of Number Date High (Rs.) Low (Rs.) Average (Rs.) Shares) 1 February 14, 2007 232.50 209.50 221.00 8,35,609 2 February 13, 2007 221.50 200.20 210.85 5,31,995 3 February 12, 2007 226.00 203.15 214.57 6,47,332 4 February 09, 2007 238.00 225.45 231.72 4,11,658 5 February 08, 2007 244.70 234.40 239.55 3,77,529 6 February 07, 2007 255.70 239.05 247.37 6,39,303 7 February 06, 2007 251.70 240.00 245.85 11,03,502 8 February 05, 2007 241.00 232.50 236.75 3,33,560 9 February 02, 2007 244.90 238.00 241.45 5,83,712 10 February 01, 2007 241.75 226.00 233.87 6,77,035 Source: NSE (www.nseindia.com)

6.1.3 The shares of AEL have not been traded at ASE, during the relevant period and accordingly can be deemed to be infrequently traded on the ASE. The financial parameters based on the audited financials for the financial year ended March 31, 2007 for AEL are:

(a) Return on Net-worth of : 14.43% (b) Book Value per share of : Rs. 42.36 (c) Earnings per Share (EPS) of : Rs. 6.35 (d) Price to Earning multiple (based on offer price): 55.12 (e) Industry P/E multiple of : 31.91 (Source:Dalal Street, vol.:XXII No.17, August 6-19,2007)

In the opinion of the Manager to the Offer and the Acquirers, the Offer Price is justified as per Regulation 20(11) of the Regulations.

6.1.4 Non-Compete Fees The Acquirers have not paid any sum as non-compete fee to any party under the offer.

6.2 Financial Arrangement for the Offer

6.2.1 The total fund requirement for implementation of the Offer at Rs. 350/- per share is Rs. 69,904.42 lacs assuming that full acceptance for the Offer is received.

6.2.2 The Acquirers have made firm financial arrangements to implement the Offer and meet their obligations in full under the Offer. The Offer obligation shall be met from internal resources.

6.2.3 M/s. Dharmesh A. Parikh & Associates, Chartered Accountants, vide its letter dated August 13, 2007 has certified that the Acquirers have made adequate arrangements to meet the financial obligations under this Offer:

Dharmesh A. Parikh, Membership No.: 45501 M/s. Dharmesh A. Parikh & Associates Chartered Accountants 303-304, Milestones, Near Drive-in-Cinema, Opp. TV Tower, Thaltej, Ahmedabad-380 054 Tel.: +91-79-2747 4466, Fax:+91-79-2747 9955 E-mail: [email protected] 6.2.4 The Manager to the Offer confirms that it is satisfied about the ability of the Acquirers to implement the Offer in accordance with the Regulations as firm arrangements for funds and money for payment through verifiable means are in place to fulfil the Offer obligations. 6.2.5 In accordance with Regulation 28(10) of the Regulations, the Acquirer has opened an escrow account with AXIS Bank Limited (erstwhile UTI Bank Limited), Trishul Building, Opp, Samartheshwar Mahadev Temple, Law Garden, Ahmedabad-380 006 and has deposited therein a sum of Rs. 8,00,00,000/-, being more than 1% of the total consideration payable under the offer. The Acquirer has authorised ICICI Securities Limited, the Manager to the offer as sole signatory to the escrow account. 6.2.6 In accordance with Regulation 28(4)(c) of the Regulation, 40,00,000 fully paid up Equity Shares of AEL of face value of Re.1 each, owned by PAC has been pledged with ICICI securities Limited for the purpose of Escrow. Further, the PAC has issued a no-objection for creation of pledge and deposit of the same in the escrow account .Current market value of the said pledged shares is in excess of the escrow requirement in terms of Regulation 28 of the Regulations. The market value of these 40,00,000 Equity Shares of AEL as on the date of the creation of the escrow account i.e. February 14,2007 (based on the closing price as on that date) was Rs. 9,144.00 lacs. Based on the closing price for the AEL shares, as on August 13, 2007, the value of the shares pledged as part of the escrow obligations is in excess of 60% over the minimum escrow requirements. These shares are free from any lien or encumbrances and the voting rights on these shares has not been freezed or suspended during the pledge period. The Manager to the Offer viz. ICICI Securities Ltd. has been authorised to realise the value of such escrow account by sale.

6.2.7 In case of any deficit of value of the securities, the Manager to the Offer shall make good any such deficit in accordance with Regulation 28(7) of the Regulations.

7. TERMS AND CONDITIONS OF THE OFFER

7.1 The Offer to the shareholders of AEL to acquire up to 1,99,72,691 fully paid-up equity shares representing approximately 8.1% of the paid-up equity share capital of AEL at Rs. 350/- per Share is being made pursuant to Regulations 11(2A) and 21(3) read with other applicable provisions of Chapter III of, and in compliance with, the Regulations.

7.2 AEL has furnished the register of members as on the Specified Date. The Letter of Offer together with the Form of Acceptance-cum-Acknowledgement and Form of Withdrawal will be mailed to the shareholders of AEL whose names appear on the Register of Members of AEL and beneficial owners of the shares of AEL, whose names appear as beneficiaries on the records of the respective Depositories, at the close of the Business Hours on Friday, March 09, 2007 (the Specified Date), except to the Acquirers and the Promoter Group of AEL. Accidental omission to dispatch this Letter of Offer to any person to whom this Offer is made or the non-receipt or delayed receipt of this Letter of Offer by any such person will not invalidate this Offer in any way.

7.3 Equity shares of AEL, if any, that are subject matter of litigation or are held in abeyance due to pending court cases, wherein the shareholder(s) of AEL may be precluded from transferring the shares during pendency of the said litigation are liable to be rejected in case directions / orders releasing these shares are not received together with the shares tendered under the Offer. The Letter of Offer in some of these cases, wherever possible, would be forwarded to the concerned statutory authorities for further action at their end.

7.4 The shares will be acquired by the Acquirers, free from all liens, charges and encumbrances and together with all rights attached thereto, including the right to all dividends, bonus and rights declared hereafter.

7.5 The Offer is not conditional on any minimum level of acceptance i.e. the Acquirers will acquire all the Shares that are tendered in terms of the Offer up to 1,99,72,691 Shares, subject to the conditions specified in the Public Announcement published on February 15, 2007 and this Letter of Offer and Form of Acceptance-cum- Acknowledgement.

7.6 If there is any further upward revision of the Offer price by the Acquirers till the last date for revision viz. Friday, August 31, 2007 or withdrawal of the Offer, the same would be informed by way of a public announcement in the same newspapers in which the Public Announcement published on February 15, 2007 had appeared. Such revised Offer Price would be payable for all the shares tendered anytime during the Offer and accepted under the Offer.

7.7 Shareholders who wish to tender their Shares should submit documents in accordance with the procedure specified in Section ‘Procedure For Acceptance And Settlement Of The Offer’ of this Letter of Offer and the Form of Acceptance-cum-Acknowledgement.

7.8 Shareholders who hold shares in physical form and who wish to tender their Shares will be required to send the Form of Acceptance-cum-Acknowledgement, original share certificate(s) and transfer deed(s) duly signed to the Registrar to the Offer – Pinnacle Shares Registry Private Limited, Near Asoka Mills Limited, Naroda Road, Ahmedabad-380 025, India, Tel.: +91-79-2220 4226, 2220 0338, Fax: +91-79-2220 2963, Contact Person: Mr. Gautam Shah, either by hand delivery to the collection centre during business hours (Monday to Saturday between 10.00 a.m. and 5.00 p.m.) or by registered post at the abovementioned address, so that the same are received on or before the close of the Offer i.e. Wednesday, September 12, 2007 in accordance with the instructions specified in the Letter of Offer and in the Form of Acceptance-cum-Acknowledgement.

7.9 The Registrar has opened a special depository account with AXIS Bank Limited (erstwhile UTI Bank Limited), Trishul Building, Opp. Samartheshwar Mahadev Temple, Law Garden, Ellis bridge, Ahmedabad, Depository Participant in National Securities Depository Limited (‘NSDL’), styled ‘Pinnacle – AEL Open Offer-Escrow A/c’. The DP ID is IN 300484 and Beneficiary Client ID is 12782243. Shareholders holding their beneficiary account in Central Depository Services India Limited (‘CDSL’) will have to use an inter-depository delivery instruction slip for the purpose of crediting their Shares in favour of the special depository account with NSDL. Beneficial owners should ensure to credit their shares in favour of the special depository account before the closure of the Offer.

7.10 Locked-in Shares As on the date of PA, there are no shares of AEL, which are under lock-in.

7.11 Eligibility for Accepting the Offer The present Offer is being made to all the shareholders of AEL, except the Acquirers and the Promoter Group of AEL, whose names appear as on the Specified Date and also to those persons, who own the shares at any time prior to the closure of the Offer but are not registered shareholders.

7.12 Marketable Lot The marketable lot for the shares of AEL is 1 (one) share as the shares of AEL can be traded on the secondary market only in dematerialised form. The ISIN number is INE423A01024.

7.13 Statutory Approvals and Conditions of the Offer The Offer is subject to the statutory and regulatory approvals mentioned in Letter of Offer. As on date, there are no other statutory and regulatory approvals required, other than those indicated above.

To the best of the knowledge of the Acquirers, as on the date of the Public Announcement, there are no other statutory or regulatory approvals required to implement the Offer, other than those indicated in this Letter of Offer. If any other statutory or regulatory approvals become applicable, the Offer would be subject to such statutory or regulatory approvals. The Acquirers will have a right not to proceed with the Offer in the event the statutory approvals indicated above are refused in terms of Regulation 27 of the Regulations.

In case of delay in receipt of statutory or regulatory approvals, SEBI has the power to grant extension of time to the Acquirers for payment of consideration to the shareholders of AEL, subject to the Acquirers agreeing to pay interest for the delayed period as directed by SEBI in terms of Regulation 22(12) of the Regulations. Further, if the delay occurs on account of wilful default by the Acquirers in obtaining the requisite approvals, Regulation 22(13) of the Regulations will also become applicable.

8. PROCEDURE FOR ACCEPTANCE AND SETTLEMENT OF THE OFFER

8.1 Shareholders of AEL who wish to avail of this Offer should forward the under mentioned documents by hand delivery or registered post to the Registrar at their Office – Pinnacle Shares Registry Private Limited, Near Asoka Mills Limited, Naroda Road, Ahmedabad-380 025, India, Tel.: +91-79-2220 4226, 2220 0338, Fax: +91-79-2220 2963, Contact Person: Mr. Gautam Shah, who are acting as the Registrar to the Offer (the ‘Registrar to the Offer’), either by hand delivery during business hours (Monday to Saturday between 10.00 a.m. and 5.00 p.m.) or by registered post so that the same are received on or before the closure of the Offer, i.e. by Wednesday September 12, 2007. Shareholders are advised to ensure that the Form of Acceptance-cum-Acknowledgement and other documents are complete in all respects otherwise the same is liable to be rejected. In the case of dematerialised shares, the shareholders are advised to ensure that their shares are credited in favour of the special depository account, before the closure of the Offer. The Form of Acceptance-cum-Acknowledgement of such dematerialised shares not credited in favour of the special depository account before the closure of the Offer is liable to be rejected.

Physical shares tendered under the Offer and subsequently withdrawn by the shareholders or rejected due to technical defects will be returned to the shareholders by registered post.

8.2 Registered shareholders (holders of shares in physical form) should enclose: • Form of Acceptance-cum-Acknowledgement duly completed and signed in accordance with the instructions contained therein, by all shareholders whose names appear on the share certificates • Original share certificate(s) • Valid share transfer deed(s) duly signed as transferors by all registered shareholders (in case of joint holdings) in the same order and as per specimen signatures registered with AEL and duly witnessed at the appropriate place(s)

8.3 Beneficial owners (holders of shares in dematerialised form) should enclose: • Form of Acceptance-cum-Acknowledgement duly completed and signed in accordance with the instructions contained therein by all the beneficial holders of shares, as per the records of the DP • Photocopy of the delivery instruction slip in ‘Off-market’ mode or counterfoil of the delivery instruction slip in ‘Off-market’ mode, duly acknowledged by the DP

The details of the special depository account are as follows:

Name of the Depository Depository Identification No. Client Identification No. Participant (DP ID) (Beneficial Client ID) AXIS Bank Limited IN 300484 12782243 (erstwhile UTI Bank Limited)

8.4 Unregistered shareholders should enclose: • Form of Acceptance-cum-Acknowledgement or an application on plain paper, duly completed and signed in accordance with the instructions contained therein • Original share certificate(s) • Copy of the original contract note issued by the broker through whom the shares were acquired • Proof of lodgement of shares for transfer and acknowledgement thereof by AEL or its registrar and share transfer agent (if the share certificates have already been lodged for transfer)

• Valid share transfer deed(s) duly signed by a registered holder and an additional valid transfer deed duly signed by the unregistered shareholder as the transferor

No indemnity is required from the unregistered owners.

8.5 Owners of shares who have tendered their shares for transfer should enclose: • Form of Acceptance-cum-Acknowledgement duly completed and signed in accordance with the instructions contained therein • Copy of the letter sent to AEL for transfer of shares • Valid share transfer deed(s) including valid transfer deed(s) duly signed by the unregistered shareholder as the transferor

8.6 Shareholders who have sent their physical shares for dematerialisation may participate in the Offer by submitting the Form of Acceptance-cum-Acknowledgement along with a copy of the dematerialisation request form duly acknowledged by the Depository Participant. Shareholders who have sent their physical shares for dematerialisation need to ensure that the process of getting shares dematerialised is completed well in time so that the credit in the special depository account should be received on or before the closure of the Offer, i.e. by Wednesday, September 12, 2007, else the application would be rejected.

8.7 Valid share transfer deed/ form(s) duly signed as transferors by all registered shareholders (in case of joint holdings) in the same order and as per specimen signatures registered with AEL and duly witnessed at the appropriate place.

8.8 The share certificate(s), share transfer deed(s) and the Form of Acceptance-cum-Acknowledgement should be sent only to the Registrar to the Offer and not to the Manager to the Offer or the Acquirers or the Target Company.

8.9 In case of non-receipt of the Letter of Offer, the eligible persons may send their consent to the Registrar to the Offer on a plain paper stating acceptance of the Offer with name, address, number of shares held, distinctive numbers, folio numbers, number of shares offered, along with documents as mentioned above, so as to reach the Registrar to the Offer on or before the closure of the Offer, i.e. Wednesday, September 12, 2007 or in case of beneficial owners they may send their application in writing to the Registrar to the Offer on a plain paper stating acceptance of the Offer with name, address, number of shares held, number of shares offered, DP name, DP ID, beneficiary account number and a photocopy of the delivery instruction slip in ‘Off-market’ mode or counterfoil of the delivery instructions slip in ‘Off-market’ mode, duly acknowledged by the DP, in favour of the special depository account, so as to reach the Registrar to the Offer, on or before the closure of the Offer, i.e. Wednesday, September 12, 2007.

8.10 Alternatively, the Letter of Offer and Form of Acceptance-cum-Acknowledgement will be available on SEBI’s website: www.sebi.gov.in, from the date of opening of the Offer. The eligible persons can download the Form of Acceptance-cum-Acknowledgement from the SEBI's website and apply in the same.

8.11 While tendering the Shares under the Offer, NRIs/ OCBs/ foreign shareholders will be required to submit the previous RBI Approvals (specific or general) that they would have obtained for acquiring the shares of AEL. In case the previous RBI approvals are not submitted, the Acquirers reserves the right to reject such Shares tendered.

8.12 As per the provisions of Section 196D (2) of the Income Tax Act, 1961 (‘the Income Tax Act’), no deduction of tax at source shall be made from any income by way of capital gains arising from the transfer of securities referred to in Section 115AD payable to a Foreign Institutional Investor (‘FII’) as defined in Section 115AD of the Income Tax Act. However, while tendering their shares under the Offer, NRIs, OCBs and other non-resident shareholders will be required to submit a No Objection Certificate (NOC) or Tax Clearance Certificate or Certificate for Deduction of Tax at Lower Rate from Income Tax authorities under the Income Tax Act indicating the amount of tax to be deducted by the Acquirers before remitting the consideration. In case the aforesaid NOC or Tax Clearance Certificate or Certificate for Deduction of Tax at Lower Rate is not submitted, the Acquirers will arrange to deduct tax at the maximum marginal rate as may be applicable to the category of shareholders on the entire consideration amount payable to such shareholders.

a) If any of the above stated documents (as applicable) are not enclosed along with the Form of Acceptance-cum- Acknowledgement, the Shares tendered under the Offer are liable to be rejected.

b) As per Section 10(36) of the Income Tax Act, any income arising from the transfer of a long-term capital asset, being an equity share for which the transactions of purchase and sale of such share are entered into on a recognised stock exchange, is exempt from tax. However, gains on transfer of shares tendered under the Offer would not be eligible for the exemption under section 10(36), as the transfer would not be effected through a recognised stock exchange. As such, gains on transfer of the shares offered pursuant to this letter of offer would be liable to tax as per the normal provisions of the Income Tax Act. This position has been intimated to the Acquirers by the tax advisers of the Acquirers. However, the Acquirers by this Letter of Offer, is not providing any tax advice to the shareholders and the shareholders are requested to seek their own advice on such matters.

8.13 The Form of Acceptance-cum-Acknowledgement along with the share certificate(s), signed transfer deed and other documents should be submitted at any of the collection centre below in accordance with the procedure as set out in the Letter of Offer. The centre mentioned herein below would be open on all working days as follows :

Business Hours: Monday to Saturday 10.00 a.m. to 5.00 p.m. The centres will be closed on Sundays and any other public holidays.

Contact Person Address Tel. No Fax No. Gautam Shah Near Asoka Mills Limited, Naroda Road, +91-79-2220 4226, +91-79-2220 02963 Ahmedabad-380 025, India 2220 0338

8.14 Applicants who cannot hand deliver their documents at the collection centres referred to above, may send the same by Registered Post, at their own risk and cost, to the Registrar to the Offer at its address given above.

8.15 The payment of consideration will be made by the Acquirers in cash through crossed account payee cheque, demand draft or pay order sent by Registered Post for amounts exceeding Rs. 1,500 and UCP otherwise to those shareholders / unregistered owners, which would be dispatched to the shareholders / unregistered owners at their own risk, whose shares / share certificates and other documents are found in order and accepted by the Acquirers. In case of joint registered holders, cheques / demand drafts / pay orders will be drawn in the name of the sole / first named holder / unregistered owner and will be sent to him / her. It is desirable that shareholders provide bank details in the Form of Acceptance-cum-Acknowledgement, so that the same can be incorporated in the cheque / demand draft / pay order.

8.16 In case the Shares tendered in the Offer are more than the shares to be acquired under the Offer, the acquisition of Shares from each shareholder will be in accordance with Regulation 21(6) of the Regulations, on a proportionate basis.

8.17 Unaccepted share certificate(s), transfer deed(s) and other documents, if any, will be returned by Registered Post at the shareholders’ / unregistered owners’ sole risk to the sole / first named shareholder / unregistered owner. Except that, in case the share certificates tendered have to be split, the Acquirers will arrange to split the share certificates and send the balance share certificates (for Shares not accepted in the Offer) by Registered Post at the shareholders’ / unregistered owners’ sole risk to the sole / first named shareholder / unregistered owner. Unaccepted Shares held in dematerialised form will be credited back to the beneficial owners’ depository account with the respective depository participant as per the details furnished by the beneficial owner in the Form of Acceptance-cum-Acknowledgement or otherwise.

8.18 The Registrar to the Offer will hold in trust the Share(s) / share certificate(s), shares lying in credit of the special depository account, Form of Acceptance-cum-Acknowledgement and the transfer deed(s), if any, on behalf of the shareholders / unregistered owner(s) of AEL who have accepted the Offer, till the Acquirers completes the Offer obligations in terms of the Regulations latest by Thursday, September 27, 2007. Upon completion of the above, the Registrar to the Offer will debit the special depository account to the extent of Shares accepted by the Acquirers and give instruction to credit the beneficial account of the Acquirers.

8.19 The Acquirers shall complete all procedures relating to the Offer latest by Thursday, September 27, 2007. In case of delay in receipt of statutory approvals, SEBI has the power to grant extension of time to the Acquirers for payment of consideration to the shareholders, subject to the Acquirers agreeing to pay interest for the delayed period as directed by SEBI in terms of Regulation 22(12) of the Regulations. Further, if the delay occurs on account of wilful

default by the Acquirers in obtaining the requisite approvals, Regulation 22(13) of the Regulations will also become applicable.

8.20 In terms of Regulation 22(5A) of the Regulations, shareholders desirous of withdrawing their acceptances tendered in the Offer can do so up to three working days prior to the closure of the Offer, i.e. by Thursday, September 06, 2007. The withdrawal option can be exercised by submitting the Form of Withdrawal as per the instructions below, so as to reach the Registrar to the Offer at their address given at point 8.13 above either by hand delivery on all days (excluding Sundays and public holidays): Mondays to Saturdays 10.00 a.m. to 5.00 p.m. or by Registered Post, on or before Wednesday, September 12, 2007.

The withdrawal option can be exercised by submitting the Form of Withdrawal along with the copy of acknowledgement slip in original issued at the time of submission of the Form of Acceptance cum Acknowledgement. In case of non-receipt of the Form of Withdrawal, the withdrawal option can be exercised by making an application on plain paper along with the following details:

• In case of physical shares: name, address, distinctive numbers, folio number, share certificate number, number of shares tendered, date of tendering the shares;

• In case of dematerialised shares: name, address, number of shares tendered, DP name, DP ID, date of tendering the shares, beneficiary account number and a photocopy of the delivery instructions in ‘off-market’ mode or counterfoil of the delivery instruction in ‘off-market’ mode, duly acknowledged by the DP, in favour of ‘Pinnacle- AEL Open Offer – Escrow A/c’.

9. DOCUMENTS FOR INSPECTION

The following material documents are available for inspection at the office of the Manager to the Offer, ICICI Securities Limited, ICICI Centre, H.T. Parekh Marg, Churchgate, Mumbai 400 020, India from 10.30 a.m. to 1.00 p.m. on any working day, except Saturdays, Sundays and holidays, until the closure of the Offer:

a) Certificate of Incorporation, Memorandum of Association and Articles of Association of AEL, AISPL and AAPL.

b) Certificates dated August 13, 2007 from M/s Dharmesh A. Parikh & Associates, Chartered Accountants, certifying that Acquirers have adequate resources to meet the financial obligations relating to the Offer

c) Audited annual reports of AISPL for the financial years ended March 31, 2004, 2005, 2006 and 2007.

d) Audited annual reports of AAPL for the financial years ended March 31, 2004, 2005, 2006 and 2007.

e) Audited annual reports of AEL for the financial years ended March 31, 2004, 2005, 2006 and 2007.

f) Copy of Public Announcement published on February 15, 2007

g) Copy of the letter no. CFD/DCR/TO/AK/100962/2007 dated August 09, 2007 from SEBI in terms of proviso to Regulation 18(2) of the Regulations

h) Letter from AXIS Bank Limited (erstwhile UTI Bank Limited), confirming the amount deposited in the Escrow Account, towards meeting the obligations under the open offer by the Acquirer and authorising ICICI Securities Ltd., Manager to the Offer to operate the Escrow Account

i) Copy of agreement with the Depository Participant for opening a special depository account for the purpose of the Offer

j) Copy of Board Resolutions/letters from the Acquirers authorising the Offer

10. DECLARATION BY THE ACQUIRERS

The Acquirers and the Board of Directors of the Acquirers respectively accept full responsibility for the information contained in this Letter of Offer and Form of Acceptance-cum-Acknowledgement and Form of Withdrawal. The Acquirers shall be jointly and severally responsible for ensuring compliance with the Regulations. All information contained in this document is as on the date of the Public Announcement, unless stated otherwise. Mr. Shyamal Joshi, Director of AISPL has been severally authorised by the board of directors of AISPL to be the authorised signatory to the Letter of Offer. Mr. Samir Vora, Director of AAPL has been severally authorised by the board of directors of AAPL to be the authorised signatory to the Letter of Offer.

For and on behalf of the Acquirers

Sd/- Sd/-

Authorised Signatory Authorised Signatory

Adani Infrastructure Services Private Limited Adani Agro Private Limited

Place: Ahmedabad Date: August 16 , 2007

Attached: 1. Form of Acceptance-cum-Acknowledgement 2. Form of Withdrawal 3. Share Transfer Deed (for physical shares)