Adani Enterprises Ltd.
|BSE: 512599||Sector: Others|
|NSE: ADANIENT||ISIN Code: INE423A01024|
|BSE LIVE 11:49 | 06 Dec||70.10||
|NSE LIVE 11:50 | 06 Dec||70.10||
|Mkt Cap.(Rs cr)||7709.60|
|Mkt Cap.(Rs cr)||7709.60|
Adani Enterprises Ltd. (ADANIENT) - Director Report
Company director report
Your Directors are pleased to present the 24th Annual Report along with the auditedfinancial statements of your Company for the financial year ended on 31st March 2016.
Financial Performance Summary
The summarised financial highlight is depicted below:
(Rs in Crore)
Clarification note: with respect to the financial results for the year ended 31stMarch 2016 please note that the statutorily published year-end figures are notcomparable with the corresponding period consequent to demerger of Ports Power andTransmission businesses effective from 1st April 2015.
There are no material changes and commitments affecting the financial position of theCompany between the end of the financial year and the date of this report.
Performance of your Company Consolidated Financial Results:
The audited consolidated financial statements of your Company as on 31st March 2016prepared in accordance with the relevant applicable Accounting Standards and Regulation 33of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2016("SEBI Listing Regulations") and provisions of the Companies Act 2013 formspart of this Annual Report.
Your Company's consolidated results as on 31st March 2016 reflect growth in operatingperformance across Mining City Gas and Agro businesses. We have already begun our forayby commencing activities in solar generation.
The key aspects of your Company's consolidated performance duringthefinancial year2015-16 are as follows:
Coal Mining volume grew by 85% to 5.5 MMT.
City Gas Distribution volume was 381 MMSCM.
Agro volume grew to 1.6 MMSCM.
Consolidated income from operations for FY 16 was RS 44023 Crore.
Consolidated EBIDTA for FY 16 was RS 3114 Crore.
Consolidated PAT for FY 16 stood at RS 1041 Crore. Standalone FinancialResults :
On standalone basis your Company registered total revenue of RS 9073 Crore and PAT ofRS 496.33 Crore.
The detailed operational performance of your Company has been comprehensively discussedin the Management Discussion and Analysis Report which forms part of this Report.
The Company has already paid interim dividend @ 40% ( RS 0.40 per share of Re. 1 fullypaid-up) on the fully paid up Equity Share Capital of the Company as recommended by theBoard of Directors of the Company in its meeting held on 15th March 2016 for the year2015-16 resulting into an outflow of RS 44.07 Crore (inclusive of tax).
Your Directors wish to conserve resources for future expansion and growth the Company.Hence your Directors have decided not to declare any further final dividend for the yearunder review.
Transfer to Reserves
The Company proposes to transfer RS 10 Crore to the General Reserve out of the amountavailable for appropriation.
The Composite Scheme of Arrangement
During the year under review the Hon'ble High Court of Gujarat had vide its orderdated 7th May 2015 sanctioned the Composite Scheme of Arrangement between AdaniEnterprises Limited ('AEL or the Company) and Adani Ports and Special Economic ZoneLimited ('APSEZ') and Adani Power Limited ('APL) and Adani Transmission Limited (ATL) andAdani Mining Private Limited ('AMPL) and their respective shareholders and creditors underSection 391 to 394 read with Sections 100 to 103 of the Companies Act 1956 and Sections13 52 and other relevant provisions of the Companies Act 2013 ('the Scheme'). The Schemeinvolved inter-alia demerger of Port Undertaking Power Undertaking and TransmissionUndertaking of AEL and transfer of the same to APSEZ APL and ATL respectively with effectfrom the Appointed Date i.e. 1st April 2015.
In terms of the above Scheme APSEZ APL and ATL were required to issue andallot to each member of AEL whose name was recorded in the register of members and recordsof AEL as on the Record Date in the following ratio -
- 14123 equity shares in APSEZ for every 10000 equity shares held by the equityshareholder in AEL;
- 18596 equity shares in APL for every 10000 equity shares held by the equityshareholder in AEL; and
- 1 equity share in ATL for every 1 equity share held by the equity shareholder in AEL.
The Company had fixed 4th June 2015 as the Record Date to determine its shareholderswho would be entitled to the shares of APSEZ APL and ATL as aforesaid pursuant to theScheme.
Accordingly the Board of Directors of APSEZ APL and ATL had on 8th June 2015allotted Equity Shares to those shareholders of AEL whose names appeared in the Registerof Members as on the Record Date.
Key Highlights of the Scheme
The Scheme with effect from 1st April 2015 inter alia provided for -
Demerger of the Port Undertaking of AEL comprising the undertaking businessesactivities operations assets (moveable and immoveable) and liabilities pertaining to theBelekeri port and the investment of AEL in APSEZ into APSEZ;
Demerger of the Power Undertaking of AEL comprising the undertaking businessesactivities operations assets (moveable and immoveable) and liabilities pertaining to the40MW solar power project at Bitta village Kutch district of Gujarat and the investmentsof AEL in APL into APL;
Demerger of the Transmission Undertaking of AEL comprising the undertakingbusinesses activities operations assets (moveable and immoveable) and liabilitiesrelated to the Mundra-Zerda transmission line and the investment of AEL in ATL into ATL;
Merger of AMPL (a wholly owned subsidiary of AEL) into AEL;
Reduction of paid-up equity share capital of APSEZ APL and ATL respectivelyand simultaneous issuance of equity shares by APSEZ APL and ATL respectively to theequity shareholders of AEL;
Reduction of Securities Premium Account of AEL; and
Various other matters consequential supplemental or otherwise integrallyconnected therewith.
During the year under review your Company has not accepted any fixed deposits withinthe meaning of Section 73 of the Companies Act 2013 and the rules made there under.
During the year under review your Company has redeemed 12000 Rated ListedRedeemable Non-Convertible Debentures (NCDs) of face value of RS 10 Lacs each aggregatingto RS 1200 Crores issued on Private Placement basis.
Particulars of loans guarantees or investments:
During the year under review your Company has made loan given guarantee providedsecurity and made investments in compliance of Section 186 of the Companies Act 2013 thesaid details are given in the notes to the financial statements.
Subsidiaries Joint Ventures and Associate Companies:
During the year under review the following changes have taken place in SubsidiariesJoint Venture and Associate Companies:-
Subsidiary companies formed/acquired
1. Adani Green Energy (MP) Limited (Subsidiary of the Adani Green Energy Limited (AGEL)which is a subsidiary of the Company).
2. Adani Green Energy (Telengana) Limited (Subsidiary of the AGEL which is a subsidiaryof the Company).
3. Mundra Solar PV Limited (Subsidiary of the AGEL which is a subsidiary of theCompany).
4. Kamuthi Solar Power Limited (Subsidiary of Adani Green Energy (Tamilnadu) Limitedwhich is a subsidiary of AGEL).
5. Ramnad Solar Power Limited (Subsidiary of Adani Green Energy (Tamilnadu) Limitedwhich is a subsidiary of AGEL).
6. Kamuthi Renewable Energy Limited (Subsidiary of Adani Green Energy (Tamilnadu)Limited which is a subsidiary of AGEL).
7. Ramnad Renewable Energy Limited (Subsidiary of Adani Green Energy (Tamilnadu)Limited which is a subsidiary of AGEL).
8. Mundra Solar Limited (Subsidiary of the AGEL which is a subsidiary of the Company).
9. Adani Infrastructure Pty Limited (Subsidiary of Adani Global Pte. Limited which is astep-down subsidiary of the Company).
10. Adani Land Defence Systems and Technologies Limited (Subsidiary of Adani DefenceSystems and Technologies Limited which is a subsidiary of the Company).
11. Adani Aero Defence Systems and Technologies Limited (Subsidiary of Adani DefenceSystems and Technologies Limited which is a subsidiary of the Company).
12. Adani Naval Defence Systems and Technologies Limited (Subsidiary of Adani DefenceSystems and Technologies Ltd. which is a subsidiary of the Company)
13. Adani Green Energy (UP) Limited (Subsidiary of the AGEL which is a subsidiary ofthe Company)
14. Prayatna Developers Private Limited (Subsidiary of the Company)
15. Parampujya Solar Energy Private Limited (formerly Parampujya Developers PrivateLimited) (Subsidiary of the AGEL which is a subsidiary of the Company)
16. Rosepetal Solar Energy Private Limited (formerly Rosepetal Developers PrivateLimited) (Subsidiary of the AGEL which is a subsidiary of the Company).
17. Mundra Solar Technopark Private Limited (Step-down subsidiary of the Company).
18. Duryodhana Developers Private Limited (Subsidiary of the AGEL which is a subsidiaryof the Company).
19. Kilaj Solar (Maharashtra) Private Limited (Subsidiary of the AGEL which is asubsidiary of the Company).
20. Korba Clean Coal Private Limited (Subsidiary of the Company).
21. Sami Solar (Gujarat) Private Limited (Subsidiary of the AGEL which is a subsidiaryof the Company).
22. Wardha Solar (Maharashtra) Private Limited (Subsidiary of the AGEL which is asubsidiary of the Company).
23. Mahoba Solar (UP) Private Limited (Subsidiary of the AGEL which is a subsidiary ofthe Company).
24. Gaya Solar (Bihar) Private Limited (Subsidiary of the AGEL which is a subsidiary ofthe Company).
25. Adani Agri Logistics (Kotkapura) Limited (Subsidiary of Adani Agri LogisticsLimited which is a subsidiary of the Company).
26. Adani Agri Logistics (Katihar) Limited (Subsidiary of Adani Agri Logistics Limitedwhich is a subsidiary of the Company).
Cessation of subsidiary companies
The following companies ceased as subsidiaries of the Company pursuant to the Schemeapproved by the Hon'ble High Court of Gujarat vide its order dated 7th May 2015.
1. Adani Ports and Special Economic Zone Limited
2. Adani Logistics Limited
3. The Dhamra Port Company Limited
4. Adani Petronet (Dahej) Port Private Limited
5. Mundra SEZ Textile and Apparel Park Private Limited
6. Karnavati Aviation Private Limited
7. MPSEZ Utilities Private Limited
8. Mundra International Airport Private Limited
9. Adani Murmugao Port Terminal Private Limited (ceased as Subsidiary and becameAssociate Company)
10. Adani Hazira Port Private Limited
11. Hazira Infrastructure Private Limited
12. Hazira Road Infrastructure Private Limited
13. Adani Warehousing Services Private Limited
14. Adani Hospitals Mundra Private Limited
15. Adani Ennore Container Terminal Private Limited
16. Adani Food and Agro-Processing Park Private Limited
17. Adani Vizag Coal Terminal Private Limited
18. Adani Power Limited.
19. Adani Power Maharashtra Limited
20. Adani Power Rajasthan Limited
21. Udupi Power Corporation Limited
22. Adani Power (Karnataka) Limited
23. Adani Power Resources Limited
24. Adani Transmission Limited
25. Maharashtra Eastern Grid Power Transmission Company Limited
26. Adani Transmission (India) Limited
27. Adani Mining Private Limited (merged with the Company)
28. Adani Kandla Bulk Terminal Pvt. Ltd. (ceased as Subsidiary and became associateCompany)
List of other companies which have ceased as subsidiaries of the Company -
29. Adani Infra (India) Limited
30. PT Sumber Dana Usaha
31. PT Setara Jasa
32. PT Adani Sumselon
33. Dhamra LNG Terminal Private Limited
No Company has become/ceased to be a Joint venture during the financial year 2015-16.There was no cessation of any associate company during the year under review.
Pursuant to the provisions of Section 129 134 and 136 of the Companies Act 2013 readwith rules framed thereunder and pursuant to Regulation 33 of the SEBI ListingRegulations the Company had prepared consolidated financial statements of the Company andits subsidiaries and a separate statement containing the salient features of financialstatement of subsidiaries joint ventures and associates in Form AOC-1 forms part of theAnnual Report.
The annual financial statements and related detailed information of the subsidiarycompanies shall be made available to the shareholders of the holding and subsidiarycompanies seeking such information on all working days during business hours. Thefinancial statements of the subsidiary companies shall also be kept for inspection by anyshareholder/s during working hours at the Company's registered office and that of therespective subsidiary companies concerned. In accordance with Section 136 of the CompaniesAct 2013 the audited financial statements including consolidated financial statementsand related information of the Company and audited accounts of each of its subsidiariesare available on our website www.adanienterprises.com.Details of developments of subsidiaries of the Company are covered in the Management'sDiscussion and Analysis Report forms part of this Report.
Directors and Key Managerial Personnel
Mr. Hemant M. Nerurkar (DIN: 00265887) was appointed as an Additional Director of theCompany w.e.f 11th August 2015 to hold office upto the ensuing Annual General Meeting.The Company has received notice from a member proposing
appointment of Mr. Hemant M. Nerurkar as Director of the Company.
In accordance with the provisions of Section 149 of the Companies Act 2013 Mr. HemantM. Nerurkar is being appointed as an Independent Director to hold office as per his tenureof appointment mentioned in the Notice of the ensuing Annual General Meeting of theCompany.
Pursuant to the provisions of Section 149 of the Act which came into effect from 1stApril 2014 Mr. Anil Ahuja Dr. Ravindra H. Dholakia and Mr. Berjis Desai were appointedas Independent Directors at the Annual General Meeting of the Company held on 9th August2014. The terms and conditions of appointment of Independent Directors are as per ScheduleIV of the Act. The Company has received declarations from all the Independent Directors ofthe Company confirming that they meet with the criteria of independence as prescribed bothunder sub-section (6) of Section 149 of the Companies Act 2013 and the SEBI ListingRegulations and there has been no change in the circumstances which may affect theirstatus as independent director during the year.
Pursuant to the requirements of the Companies Act 2013 and Articles of Association ofthe Company Mr. Vasant S. Adani (DIN: 00006356) and Mr. Ameet H. Desai (DIN: 00007116)are liable to retire by rotation and being eligible offer themselves for re-appointment.
The Board recommends the appointment/re-appointment of above directors for yourapproval.
Brief details of Directors proposed to be appointed/ re-appointed as required underRegulation 36 of the SEBI Listing Regulations are provided in the Notice of the AnnualGeneral Meeting.
During the year under review Mr. S.K. Tuteja (DIN: 00594076) resigned from thedirectorship of the Company with effect from 24th February 2016 due to completion of histenure as an Independent Director of the Company. Ms. Dharmishta N. Rawal (DIN: 02792246)resigned from the directorship of the Company with effect from 25th April 2016 due to herpreoccupation. The Board places on record its sincere appreciation for the valuablecontribution and guidance rendered by Mr. S.K. Tuteja and Ms. Dharmishta N. Rawal duringtheir tenure with the Company.
Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability state the following:
a. that in the preparation of the annual financial statements the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures if any;
b. that such accounting policies have been selected and applied consistently andjudgement and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at 31st March 2016 and ofthe profit of the Company for the year ended on that date;
c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financial controlwere adequate and were operating effectively;
f. that proper systems to ensure compliance with the provisions of all applicable lawswere in place and were adequate and operating effectively.
Number of Board Meetings
The Board of Directors met 5 (five) times during the year under review. The details ofboard meetings and the attendance of the Directors are provided in the CorporateGovernance Report which forms part of this report.
Independent Directors' Meeting
The Independent Directors met on 15th March 2016 without the attendance ofNon-Independent Directors and members of the Management. The Independent Directorsreviewed the performance of non-independent directors and the Board as a whole; theperformance of the Chairperson of the Company taking into account the views of ExecutiveDirectors and Non-Executive Directors and assessed the quality quantity and timeliness offlow of information between the Company Management and the Board that is necessary for theBoard to effectively and reasonably perform their duties.
The Board adopted a formal mechanism for evaluating its performance and as well as thatof its Committees and individual Directors including the Chairman of the Board. Theexercise was carried out through a structured evaluation process covering various aspectsof the Boards
functioning such as composition of the Board & committees experience &competencies performance of specific duties & obligations contribution at themeetings and otherwise independent judgment governance issues etc.
Policy on directors' appointment and remuneration
The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Companies Act 2013 is made available on the Company'swebsite (http://www.adanienterprises.com/docs/ download/ RemunerationPolicy).
Internal Financial control system and their adequacy
The details in respect of internal financial control and their adequacy are included inManagement and Discussion & Analysis which forms part of this report.
The Board of the Company has formed a risk management committee to frame implement andmonitor the risk management plan for the Company. The committee is responsible forreviewing the risk management plan and ensuring its effectiveness. The audit committee hasadditional oversight in the area of financial risks and controls.
Committees of Board
Details of various committees constituted by the Board of Directors as per theprovision of the SEBI Listing Regulations and Companies Act 2013 are given in theCorporate Governance Report which forms part of this report.
Corporate Social Responsibility
The Company has constituted a Corporate Social Responsibility (CSR) Committee and hasframed a CSR Policy. The brief details of CSR Committee are provided in the CorporateGovernance Report. The Annual Report on CSR activities is annexed to this Report. The CSRPolicy is available on the website (http://www.adanienterprises.com/docs/download/CSRPolicy) of the Company..
Corporate Governance and Management Discussion and Analysis Report
Separate reports on Corporate Governance compliance and Management Discussion andAnalysis as stipulated by the SEBI Listing Regulations forms part of this Annual Reportalong with the required Certificate from Statutory Auditors of the Company regardingcompliance of the conditions of Corporate Governance as stipulated.
In compliance with Corporate Governance requirements as per the SEBI ListingRegulations your Company has formulated and implemented a Code of Business Conduct andEthics for all Board members and senior management personnel of the Company who haveaffirmed the compliance thereto.
Business Responsibility Report
The Business Responsibility Report for the year ended 31st March 2016 as stipulatedunder Regulation 34 of the SEBI Listing Regulations is annexed which forms part of thisAnnual Report.
Prevention of Sexual Harassment at Workplace
As per the requirement of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 and rules made thereunder your Company hasconstituted Internal Complaints Committee (ICC) which is responsible for redressal ofcomplaints related to sexual harassment. During the year under review there were nocomplaints pertaining to sexual harassment.
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9 are annexedto this Report as Annexure-A.
Related Party Transactions
All the related party transactions entered into during the financial year were on anarm's length basis and were in the ordinary course of business. Your Company had notentered into any transactions with related parties which could be considered material interms of Section 188 of the Companies Act 2013. Accordingly the disclosure of relatedparty transactions as required under Section 134(3)(h) of the Companies Act 2013 in FormAOC 2 is not applicable.
Significant and Material Orders passed by the Regulators or Courts or TribunalsImpacting The Going Concern Status of The Company
There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status and the Company's future operations.
Your Company has taken appropriate insurance for all assets against foreseeable perils.
Auditors & Auditors' Report
Pursuant to the provisions of Section 139 of the Companies Act 2013 read with rulesmade thereunder M/s. Dharmesh
Parikh & Co. Chartered Accountants (Firm Registration No.: 112054W) wereappointed as statutory auditors of the Company to hold office till conclusion of the 25thAnnual General Meeting (AGM) of the Company to be held in the calendar year 2017 subjectto ratification of their appointment at every AGM. Accordingly the appointment of M/s.Dharmesh Parikh & Co. Chartered Accountants as Statutory Auditors of the Company isplaced for ratification by the Shareholders. In this regard the Company has received acertificate from the auditors to the effect that if they are re-appointed it would be inaccordance with the provisions of Section 141 of the Companies Act 2013.
The Notes to the financial statements referred in the Auditors Report areself-explanatory and therefore do not call for any comments under Section 134 of theCompanies Act 2013. The Auditors' Report is enclosed with the financial statements inthis Annual Report.
Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the rules madethereunder the Company had appointed Mr. Ashwin Shah Practicing Company Secretary toundertake the Secretarial Audit of the Company. The Secretarial Audit Report for FY2015-16 is annexed which forms part of this report as Annexure-B. There were noqualifications reservation or adverse remarks given by Secretarial Auditors of theCompany.
Cost Audit Report
Your Company has appointed M/s. K V Melwani & Associates Practicing CostAccountants to conduct audit of cost records of Mining Activities of the Company for theyear 31st March 2017. The Cost Audit Report for the year 2014-15 was Hied before the duedate with the Ministry of Corporate Affairs.
Particulars of Employees
The information required under Section 197 of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are provided in separate annexure forming part of this Report as Annexure-C.
The statement containing particulars of employees as required under Section 197 of theCompanies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 will be provided upon request. In terms of Section 136of the Companies Act 2013 the Report and Accounts are being sent to the Members andothers entitled thereto excluding the information on employees' particulars which isavailable for inspection by the members at the Registered Office of the Company duringbusiness hours on working days of the Company. If any member is interested in obtaining acopy thereof such Member may write to the Company Secretary in this regard.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 as amended from time to time is annexed tothis Report as Annexure-D.
Your Directors are highly grateful for all the guidance support and assistancereceived from the Government of India Government of Gujarat Financial Institutions andBanks. Your Directors thank all shareowners esteemed customers suppliers and businessassociates for their faith trust and confidence reposed in the Company.
Your Directors wish to place on record their sincere appreciation for the dedicatedefforts and consistent contribution made by the employees at all levels to ensure thatthe Company continues to grow and excel.
For and on behalf of the Board of Directors
Annexure - A
to the Directors' Report Form No. MGT-9
EXTRACT OF ANNUAL RETURN as on the financial year ended 31st March 2016
[Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014]
I. Registration and other details:
# The Company is in process of changing R8-T Agent as per SEBI order dated 22nd March2016.
II. Principal business activities of the Company
All the business activities contributing 10% or more of the total turnover of theCompany shall be stated:
III. Particulars of holding subsidiary and associate companies:
IV. Share Holding Pattern (equity share capital breakup as percentage of total equityas on 31st March 2016)
i) Category-wise Share Holding
ii) Shareholding of Promoters/Promoters Group:
1. Gautam S. Adani Family Trust
2. S.B. Adani Family Trust
iii) Change in Promoters'/Promoters' Group Shareholding:
iv) Shareholding Pattern of top ten Shareholders (other than Directors Promoter andHolders of GDRs and ADRs):
* The shares of the Company are traded on a daily basis and hence the date wiseincrease / decrease in shareholding is not indicated. Shareholding is consolidated basedon Permanent Account Number (PAN) of the shareholder
v) Shareholding of Directors and Key Managerial Personnel:
1. Gautam S. Adani/ Rajesh S. Adani (on behalf of S.B. Adani Family Trust) holds621197910 (56.48%) shares of the Company. During the year under review there was noincrease / decrease in the same.
2. Gautam S. Adani/ Priti G. Adani (on behalf of Gautam S. Adani Family Trust) holds8836750 (0.80%) shares of the Company. During the year under review there was noincrease / decrease in the same.
3. Resigned as Director of the Company w.e.f. 24th February 2016.
4. Appointed as an Additional Director w.e.f. 11th August 2015.
5. Resigned as Director of the Company w.e.f. 25th April 2016.
Indebtedness of the Company including interest outstanding/accrued but not due forpayment
VI) Remuneration of Directors and Key Managerial Personnel:
A. Remuneration to Managing Director Whole-time Directors and/or Manager:
B. Remuneration to other Directors:
1. Resigned as Director of the Company w.e.f. 24th February 2016.
2. Resigned as Director of the Company w.e.f. 25th April 2016.
C. Remuneration to key managerial personnel other than MD/manaqer/WTD
*Please refer VI(A) herein above.
VII) Penalties / Punishment/ Compounding of Offences:
Annexure - B
to the Directors' Report
FORM NO. MR-3 - SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED MARC RS 31 2016
[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No.9 of the Companies(Appointment and Remuneration of Personnel) Rules 2014]
I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Adani Enterprises Limited(hereinafter called the Company). Secretarial Audit was conducted in a manner thatprovided me a reasonable basis forevaluating the corporate conducts/statutory compliancesand expressing my opinion thereon.
Based on my verification of the Adani Enterprises Limited's books papers minutebooks forms and returns Hied and other records maintained by the Company and also theinformation provided by the Company its officers agents and authorised representativesduring the conduct of secretarial audit I hereby report that in my opinion the Companyhas during the audit period covering the financial year ended on 31st March 2016complied with the statutory provisions listed hereunder and also that the Company hasproper Board-processes and compliance-mechanism in place to the extent in the manner andsubject to the reporting made hereinafter:
I have examined the books papers minute books forms and returns Hied and otherrecords maintained by the Company for the financial year ended on 31st March 2016according to the provisions of:
i) The Companies Act 2013 (the Act) and the rules made thereunder;
ii) The Securities Contracts (Regulation) Act 1956 ('SCRA') and the rules madethereunder;
iii) The Depositories Act 1996 and the Regulations and Byelaws framed thereunder;
iv) Foreign Exchange Management Act 1999 and the rules and regulations made thereunderto the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings;
v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ('SEBI Act'):-
a) The Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations 2011;
b) The Securities and Exchange Board of India
(Prohibition of Insider Trading) Regulations 2015;
c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 (Not Applicable to the Company during the Audit Period);
d) The Securities and Exchange Board of India (Share Based Employee Benefit)Regulation 2014 (Not Applicable to the Company during the Audit Period);
e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;
f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009 (Not Applicable to the Company during the Audit Period); and
h) The Securities and Exchange Board of India (Buyback of Securities) Regulations 1998(Not Applicable to the Company during the Audit Period);
vi) Laws specifically applicable to the industry to which the Company belongs asidentified by the management that is to say:
Payment Of Wages Act 1936
The Payment of Bonus Act 1965
The Employees' Provident Fund and Miscellaneous Provisions Act 1952
Employees' State Insurance Act 1948
The Minimum Wages Act 1948
Payment of Gratuity Act 1972
Employee Taxation as per Income Tax Act 1961
Employee Group Insurance Scheme and Maternity Benefits.
Shops and Establishment Act & Rules thereunder.
The Contract Labour (Abolition & Repeal) Act & and Rules thereunder.
Environment (Protection) Act 1986
The Air (Prevention and Control of Pollution) Act 1981
The Water (Prevention and Control of Pollution) Act 1974
The Noise Pollution (Regulation and Control) Rules 2000
Hazardous Wastes (Management and Handling) Rules 1989
Manufactures Stores and import of Hazardous Chemical Rules 1989
Factories Act 1948
I have also examined compliance with the applicable clauses of the following:
a) Secretarial Standards issued by The Institute of Company Secretaries of India.
b) The Listing Agreements entered into by the Company with Stock Exchanges;
c) The Securities and Exchange Board of India (Listing Obligations and DisclosuresRequirements) Regulations 2015 - w.e.f 1st December 2015.
During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above subject to filing ofcertain e-forms with additional fees.
I further report that
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members' views are capturedand recorded as part of the minutes.
I further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
I further report that during the audit period the Company has:
1. Passed a resolution in court convened meeting held on 20th April 2015 in terms onSection 391 to 394 of the Companies Act 1956.
2. Passed a special resolution for appointment of Mr. Pranav Adani as an ExecutiveDirector of the Company
3. Passed a special resolution for appointment of Mr. Rajesh Adani as Managing Directorof the Company.
4. Passed a special resolution to offer and issue Foreign Currency Convertible Bondsand Ordinary Shares aggregating to an amount not exceeding RS 6000 Crore.
5. Passed a special resolution to authorise board of directors to subscribe redeemablesecured / unsecured Non Convertible Debentures bonds and /or other debt securities.
6. Passed a special resolution to authorise board of directors to borrow money notexceeding in aggregate RS 12000 Crore.
7. Passed a special resolution to ratify material related party transactions
I further report that during the audit period SEBI has passed an order dated 22/03/2016thereby besides other observations made therein directed the clients of Sharepro Services(I) Private Limited to conduct a thorough audit of the records and systems of RTA. TheCompany has appointed an agency to conduct such audit.
Annexure - A
TO THE SECRETARIAL AUDIT REPORT
Adani Enterprises Limited
Our report of even date is to be read along with this letter
1. Maintenance of secretarial record is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.
2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.
4. Where ever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.
Annexure - C
to the Directors' Report
[Information pursuant to Section 197 of the Companies Act 2013 read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014]
i) The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2015-16 and the percentage increase inremuneration of each Director Chief Financial Officer Chief Executive Officer CompanySecretary in thefinancial year 2015-16:
1. Reflects sitting fees and commission
2. Reflects sitting fees
3. Resigned as Director w.e.f. 25th February 2016
4. Appointed as an Additional Directors w.e.f. 11th August 2015
5. Appointed as Company Secretary w.e.f. 13th May 2015
6. Mr. Parthiv Parikh resigned as Company Secretary w.e.f. 15th April 2015
ii) The percentage increase in the median remuneration of employees in the financialyear: 7.22%
iii) The number of permanent employees on the rolls of Company: 897 as on 31st March2016.
iv) The explanation on the relationship between average increase in remuneration andCompany performance:
The average increase in remuneration is closely linked to and driven by achievement ofannual corporate goals and overall business financial and operational performance of theCompany.
v) Comparison of the remuneration of the key managerial personnel against theperformance of the Company:
The total remuneration of key managerial personnel's increased by 28.23% in 2015-16whereas during the year under review the Company registered a profit after tax of RS496.33 Crore as compared to profit of RS 406.85 Crore in the previous year.
vi) Variations in the market capitalisation of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year:
vii) Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last publicoffer:
The Market Price of per share as on 31st March 2016 was RS 73.65 on BSE and RS 73.80on NSE.
The Company has not made any public offer in the recent past and accordinglycomparison of Public Offer Price and the current market price of the Company's shares isnot applicable.
viii) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
- Average increase in remuneration of employees excluding KMPs: 12.75%.
- Average increase in remuneration of KMPs: 28.23%
- KMP salary increases are decided based on the Company's performance individualperformance inflation prevailing industry trends and benchmarks.
ix) Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the Company:
During the year under review the Company registered a profit after tax of RS 496.33Crore as compared to profit of RS 406.85 Crore in the previous year and the increase inremuneration of each Key Managerial personnel is detailed in clause (i) above.
x) The key parameters for any variable component of remuneration availed by theDirectors:
The variable component of remuneration of the Executive Director comprises of annualperformance bonus which is linked to achievement of corporate KPIs & individual goalsand the long term incentives in the form of stock/ cash options.
The Non-Executive Directors of the Company are entitled to annual commission within theceiling of 1% of net profit of the Company as approved by shareholders.
xi) The ratio of the remuneration of the highest paid Director to that of the employeeswho are not Directors but receive remuneration in excess of the highest paid Directorduring the year: 2.30.
xii) Affirmation that the remuneration is as per the Remuneration Policy of theCompany:
The Company affirms remuneration is as per the Remuneration Policy of the Company.
Annexure - D
to the Directors' Report
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information as required under Section 134(3)(m) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014 are set out as under:
A. Conservation of Energy :
a) the steps taken or impact on conservation of energy:
- Adoption of high efficiency LED lighting for Mine CHP & Washery sidinglocations.
- Replacement of existing Lamps by LED Lamps in Mine CHP & Washery siding andother outdoor locations.
- Installation of 6 new Solar Lights (in addition to existing 3) at outdoor locationsof Mine CHP & Washery etc.
b) the steps taken by the Company for utilising alternate sources of energy:
- Installation of 6 new Solar Lights (in addition to existing 3) at outdoor locationsof Mine CHP & Washery etc.
- Installation of energy efficient LED lights in place of HPSV lights and other lights
c) the capital investment on energy conservation equipment:
As the Company has started commercial activities recently hence it is in process offinalising the planning of ascertaining the requirement of additional investment andproposals if any required for reduction of consumption of energy.
However a lump-sum amount has been budgeted in FY 2015-16 for gradual replacement ofexisting lamps by LED lamps AMC etc. In addition to this a sum of RS 8 lacs is proposedfor 6 new solar lamps AMC of new and existing solar lamps.
B. Technology Absorption:
(i) the efforts made towards technology absorption:
- Implementation of Conditioning Monitoring System for CHP & Washery.
- Installation of Central Plant control & monitoring Room for CHP & Washerythrough PLC and SCADA.
- Installation of Mine water treatment system.
- Implementation of Solar Lights.
- Total computerisation of maintenance schedules and adhering them to improvereliability of the plant.
- Installation of RO Plant for drinking water purpose.
(ii) the benefits derived like product improvement cost reduction product developmentor import substitution:
- Simplified operation ofCHP& Washery plant.
- Surplus mine water after treatment to be discharged into nearby water bodies forpotable use of nearby villages.
- Reduction in power bills for illumination.
(iii) in case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)
- No Technology imported for conservation of energy.
(iv) the expenditure incurred on Research and Development. Nil
C. Foreign Exchange Earnings and Outgo :
(Rs in Crore)
to the Directors' Report
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES AS PER SECTION 135 OFTHE COMPANIES ACT 2013
1. A brief outline of the Company's CSR policy including overview of projects orprogrammes proposed to be undertaken and a reference to the web-link to the CSR policy andprojects or programmes:
The Company has framed Corporate Social Responsibility (CSR) Policy which encompassesits philosophy and guides its sustained efforts for undertaking and supporting sociallyuseful programs for the welfare & sustainable development of the society.
The Company carried out/ implemented its CSR activities/ projects through AdaniFoundation. The Company has identified Primary Education Community Health SustainableLivelihood Development and Rural Infrastructure Development as the core sectors for CSRactivities. The CSR Policy has been uploaded on the website of the Company at
2. Composition of the CSR Committee:
Mr. Rajesh S. Adani Chairman
Mr. Vasant S. Adani Member
Mr. S.K. Tuteja Member (upto 24.02.2016)
Mr. Hemant Nerurkar (w.e.f. 15.03.2016)
3. Average net profit of the Company for last three financial years:
Average net loss: RS 6.52 Crore
4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above):
In view of average losses the Company was not required to make mandatory CSRexpenditure during the year 2015-16 as per Section 135 of the Companies Act 2013.
5. Details of CSR spend for the financial year:
a) Total amount spent for the financial year: Not Applicable
b) Amount unspent if any: Nil
c) Manner in which the amount spent during the financial year is detailed below:NotApplicable
6. In case the Company has failed to spend the two percent of the average net profit ofthe last three financial years or any part thereof: Not Applicable
7. The CSR Committee confirms that the implementation
and monitoring of CSR Policy is in compliance with CSR objectives and policy of theCompany.
8. Details of CSR programme
Adani Foundation is the CSR arm of the Adani Group. Since its inception in 1996 theFoundation has been working in four core areas of Education Community Health SustainableLivelihood Development and Rural Infrastructure Development to extend its support tocommunities. Working closely with the communities we have been able to assume the role ofa facilitator by creating an enabling environment for numerous families. Adani Foundationis currently operational in 12 states reaching out to 4 lac plus families from 1470villages and towns of India with a human-centric approach to make the processessustainable transparent and replicable. The Company as a business entity firmly believesin the notion of sustainable community development. Assuming the role of a responsiblecorporate it strives to create an environment of coexistence where there is an equitablesharing of resources followed by sustained growth and development of the community around.Hence the Company has been promoting CSR activities through the Adani Foundation.
Education is believed to be the stepping stone to improve the quality of lifeespecially for the poor and the most vulnerable. The ideology behind all the educationinitiatives undertaken lies in the very essence of transforming lives through thecontinuous generation of knowledge and empowerment. Taking forward this ideology AdaniFoundation established Adani Vidya Mandir Ahmedabad (AVM-A) with a unique concept whichnot only comprise providing cost free quality education to the meritorious students of theunderprivileged background but also free of cost transportation facilities uniformtextbooks and notebooks breakfast lunch and refreshments to them. During 2015-16academic year 871 children are studying in AVM-A. They have excelled in educationsports art and culture. AVM-A also received the Brands Academy Excellence Award 2015 forbeing adjudged as the "Most Promising CBSE School at Ahmedabad".