Adani Enterprises Ltd.
|BSE: 512599||Sector: Others|
|NSE: ADANIENT||ISIN Code: INE423A01024|
|BSE 00:00 | 15 Oct||155.05||
|NSE 00:00 | 15 Oct||155.00||
|Mkt Cap.(Rs cr)||17,052|
|Mkt Cap.(Rs cr)||17052.40|
Adani Enterprises Ltd. (ADANIENT) - Director Report
Company director report
Your Directors are pleased to present the 27th Annual Reportalong with the audited financial statements of your Company for the financial year endedon 31st March 2019.
The summarised financial performance highlight is as mentioned below:
1. There are no material changes and commitments affecting thefinancial position of the Company between the end of the financial year and the date ofthis report.
2. Previous year figures have been regrouped / re-arranged wherevernecessary.
Consolidated Financial Results:
The audited consolidated financial statements of your Company as on 31stMarch 2019 prepared in accordance with the relevant applicable Ind AS and Regulation 33of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("SEBI Listing Regulations") and provisions of the Companies Act 2013 formspart of this Annual Report.
The key aspects of your Company's consolidated performance duringthe financial year 2018-19 are as follows:
Coal MDO volume increased by 72% to 12.13 MMT vs 7.04 MMT in FY18.
Integrated Coal Management (ICM) volume stood at 67.45 MMT.
Solar Manufacturing volume increased by 11% to 637 MW vs 574 MWin FY 18.
Consolidated Income from operations increased by 12% to Crores vs र 35924 Crores in FY 18.
Consolidated EBIDTA stood at र 2541 Crores vs Crores in FY 18.
Standalone Financial Results:
On standalone basis your Company registered total income of .60 Crore and PAT of र 487.24 Crore.
The operational performance of your Company has been comprehensivelydiscussed in the Management Discussion and Analysis Report which forms part of thisReport.
Your Directors have recommended a dividend of 40% (寠.40/- per Equity Share of र 1 each) on the Equity Shares out of the profits of theCompany for the financial year 2018-19. The said dividend if approved by theshareholders would involve a cash outflow of र 53.04 Crore including tax thereon.
Transfer to Reserves
The Company proposes to transfer र 10 Crore to the GeneralReserve out of the amount available for appropriation.
Status of the Scheme of Arrangements
The Composite Scheme of Arrangement among Adani Gas Holdings Limited(AGHL') and Adani Gas Limited (AGL') and Adani Enterprises Limited(AEL') and their respective Shareholders and Creditors.
During the year under review the Hon'ble National Company LawTribunal Bench at Ahmedabad (NCLT') had vide its order dated 3rdAugust 2018 sanctioned the Composite Scheme of Arrangement among Adani Gas HoldingsLimited (AGHL') and Adani Gas Limited (AGL') and Adani EnterprisesLimited (AEL') and their respective Shareholders and Creditors. The scheme wasapproved by the shareholders secured and unsecured creditors of the Company withrequisite majority on 3rd July 2018. The Scheme inter-alia provided for:
(a) amalgamation of AGHL with AGL; and
(b) subject to satisfactory fulfilment of (a) above i.e. uponamalgamation of the AGHL with the AGL becoming effective demerger of the DemergedUndertaking (as defined in the Scheme) of AEL and transfer of the same to AGL.
In terms of the above Scheme AGL was required to issue and allot toeach member of AEL whose name was recorded in the register of members and records of AELas on the Record Date in the following ratio
1 (one) equity share of र 1/- (Rupee One only) each of AGLcredited as fully paid up for every 1 (one) equity share of र 1/- (Rupee One only)each held by such shareholder in AEL.
The Company had fixed 7th September 2018 as the Record Dateto determine its shareholders who would be entitled to the shares of AGL as aforesaidpursuant to the Scheme.
Accordingly the Board of Directors of AGL had on 9thSeptember 2018 allotted Equity Shares to those shareholders of AEL whose names appearedin the Register of Members as on the Record Date in the above mentioned ratio.
The Equity Shares of AGL were listed and admitted for dealings on stockexchanges w.e.f. 5th November 2018.
During the year under review your Company has not accepted any fixeddeposits within the meaning of Section 73 of the Companies Act 2013 and the rules madethere under.
During the year under review the Company has bought back 1500 RatedListed Taxable Secured Redeemable Non-Convertible Debentures (NCDs) having face valueof र 10 Lakhs each agreegating to र 150 Crore which were issued onprivate placement basis by the Company and listed on the Wholesale Debt Market (WDM) ofBSE Limited.
Particulars of Loans Guarantees or Investments
During the year under review your Company made loans givenguarantees provided securities and made investments in compliance with Section 186 of theCompanies Act 2013. The said details are given in the notes to the financial statements.
Subsidiaries Joint Ventures Associate Companies and LLPs
During the year under review the following changes have taken place inSubsidiaries Joint Venture Associate Companies and LLPs:-
Subsidiary companies formed/acquired
1. Bilaspur Pathrapali Road Private Limited
2. Whyalla Renewable Holdings Pty Limited (Subsidiary of AdaniRenewable Asset Holdings Pty Ltd which is a step down subsidiary of the Company)
3. Whyalla Renewables Pty Limited (Subsidiary of Whyalla RenewableHoldings Pty Ltd which is a step down subsidiary of the Company)
4. Adani Agri Logistics (Dahod) Limited
5. Adani Agri Logistics (Borivali) Limited (Subsidiary of Adani AgriLogistics Limited ("AALL") which is a subsidiary of the Company)
6. Adani Australia Pty Limited (Subsidiary of Adani Global Pte Ltdwhich is a step down subsidiary of the Company)
7. Adani Rugby Run Finance Pty Limited (Subsidiary of Adani Rugby RunPty Ltd which is a step down subsidiary of the Company)
8. Adani Agri Logistics (Dhamora) Limited (Subsidiary of AALL which isa subsidiary of the Company)
9. Bailadila Iron Ore Mining Private Limited 10. Adani Agri Logistics(Samastipur) Limited
11. Adani Agri Logistics (Darbhanga) Limited 12. Mundra Copper Limited13. Adani Water Limited 14. Prayagraj Water Private Limited
15. Adani Rave Gears India Limited (Subsidiary of Adani Defence Systemsand Technologies Limited which is a subsidiary of the Company)
16. Galilee Biodiversity Company Pty Limited (Subsidiary of AdaniMining Pty Ltd. which is a subsidiary of the Company)
17. Gidhmuri Paturia Collieries Private Limited
Cessation of Subsidiary companies / LLPs
The following companies ceased as subsidiaries of the Company pursuantto the Scheme approved by the Hon'ble National Company Law Tribunal vide its orderdated 3rd August 2018.
1. Adani Gas Limited
2. Adani Gas Holdings Limited
In order to consolidate Logistics business across the group under oneentity for focused attention better regulatory compliance reduce operational cost andstrengthen the sustainability of the businesses the Company's entire stake in thefollowing subsidiaries and step-down subsidiaries was divested to Adani Logistics Limiteda related party pursuant to the postal ballot process on 28th March 2019.
1. Adani Agri Logistics Limited
2. Adani Agri Logistics (Samastipur) Limited
3. Adani Agri Logistics (Darbhanga) Limited
4. Adani Agri Logistics (Dahod) Limited
- Step-down subsidiaries
1. Adani Agri Logistics (MP) Limited
2. Adani Agri Logistics (Harda) Limited
3. Adani Agri Logistics (Hoshangabad) Limited
4. Adani Agri Logistics (Satna) Limited
5. Adani Agri Logistics (Ujjain) Limited
6. Adani Agri Logistics (Dewas) Limited
7. Adani Agri Logistics (Kotkapura) Limited
8. Adani Agri Logistics (Katihar) Limited
9. Adani Agri Logistics (Kannauj) Limited
10. Adani Agri Logistics (Panipat) Limited 11. Adani Agri Logistics(Moga) Limited 12. Adani Agri Logistics (Raman) Limited 13. Adani Agri Logistics (Barnala)Limited 14. Adani Agri Logistics (Nakodar) Limited 15. Adani Agri Logistics (Mansa)Limited 16. Adani Agri Logistics (Bathinda) Limited 17. Adani Agri Logistics (Dhamora)Limited 18. Adani Agri Logistics (Borivali) Limited
In order to consolidate Power business across the group under oneentity for focused attention better regulatory compliance reduce operational cost andstrengthen the sustainability of the businesses the Company's entire stake in thefollowing subsidiaries was divested to Adani Power Limited - a related party pursuant topostal ballot process on 28th March 2019.
1. Adani Power Dahej Limited
2. Pench Thermal Energy (MP) Limited (Earlier known as Adani PenchPower Limited)
3. Kutchh Power Generation Limited
List of other companies / LLPs which have ceased as subsidiaries of theCompany
1. Adani Chendipada Mining Private Limited (became Associate Companyw.e.f. 25th May 2018)
2. Adani Renewable Energy Park Limited
3. Adani Renewable Energy Park (Gujarat) Limited
4. Adani Green Energy Pte. Limited
5. PT Mitra Naiga Mulia
Pursuant to the provisions of Section 129 134 and 136 of the CompaniesAct 2013 read with rules framed there under and Regulation 33 of the SEBI ListingRegulations the Company has 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 which forms part ofthis Annual Report.
The annual financial statements and related detailed information of thesubsidiary companies shall be made available to the shareholders of the holding andsubsidiary companies seeking such information on all working days during business hours.The financial statements of the subsidiary companies shall also be kept for inspection byany shareholder/s during working hours at the Company's
Registered Office and that of the respective subsidiary companiesconcerned. In accordance with Section 136 of the Companies Act 2013 the auditedfinancial statements including consolidated financial statements and related informationof the Company and audited accounts of each of its subsidiaries are available on ourwebsite www.adanienterprises.com. Pursuant to Section 134 of the Act read withRule 8(1) of the Companies (Accounts) Rules 2014 the details of developments ofsubsidiaries of the Company are covered in the Management's Discussion and AnalysisReport which forms part of this Report.
Directors and Key Managerial Personnel
During the year under review Mr. Berjis Desai (DIN: 00153675)resigned as Director (Non-Executive & Independent) of the Company with effect from 26thJune 2018 due to his pre-occupation.
The Board places on record its deep appreciation for the valuableservices rendered as well as advice and guidance provided by Mr. Berjis Desai during histenure.
Mr. Rakesh Shah was appointed as CFO of the Company by the Board ofDirectors at its meeting held on 10th May 2018. Mr. Rakesh Shahresigned as CFO of the Company w.e.f. 16th April 2019 due to personal reasons.The Board of Directors on recommendation of Nomination and Remuneration Committee &Audit Committee appointed Mr. Jugeshinder Singh as CFO w.e.f. 29th May2019.
Mr. Hemant M. Nerurkar was appointed as an Independent Director of theCompany for a period of five years upto August 2020. The Board of Directors onrecommendation of Nomination and Remuneration Committee has re-appointed him as anIndependent Director for a second term of five consecutive years upto August 2025subject to approval of members at the ensuing Annual General Meeting. The terms andconditions of appointment of Independent Directors are as per Schedule IV of the Act andSEBI Listing Regulations.
The tenure of Mr. Rajesh S. Adani as Managing Director of the Companywill expire on 9th June 2020. The Nomination and Remuneration Committee andthe Board of Directors at their respective meetings held on 29th May 2019recommended and approved the re-appointment and payment of remuneration to Mr. Rajesh S.Adani as Managing Director of the Company for a further period of five years w.e.f 10thJune 2020 subject to the approval of members. Terms and conditions for his re-appointmentare contained in the Explanatory Statement forming part of the notice of the ensuingAnnual General Meeting.
The tenure of Mr. Pranav V. Adani as an Executive Director designatedas a Director of the Company will expire on 31st March 2020. The Nominationand Remuneration Committee and the Board of Directors at their respective meetings held on29th May 2019 recommended and approved the re-appointment and payment ofremuneration to Mr. Pranav V. Adani as an Executive Director designated as a Director ofthe Company for a further period of 5 (Five) years w.e.f. 1st April 2020subject to approval of members at the ensuing Annual General Meeting.
Pursuant to the provisions of Section 149 of the Act Mr. HemantM. Nerurkar was appointed as an Independent Director at the Annual General Meetings of theCompany held on 10th August 2016. Further Mr. V. Subramanian Mrs.Vijaylaxmi Joshi and Mr. Narendra Mairpady were appointed as Independent Directors at theAnnual General Meeting of the Company held on 9th August 2017 and 7thAugust 2018. The terms and conditions of appointment of Independent Directors are as perSchedule IV of the Act. The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet with the criteria of independence asprescribed both under sub-section (6) of Section 149 of the Companies Act 2013 and theSEBI Listing Regulations and there has been no change in the circumstances which mayaffect their status as independent director during the year.
Pursuant to the requirements of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Rajesh S. Adani (DIN: 00006322) is liable to retire byrotation and being eligible offers himself for re-appointment.
The Board recommends the appointment/re-appointment of above directorsfor your approval.
Brief details of Directors proposed to be appointed/ re-appointedas required under Regulation 36 of the SEBI Listing Regulations are provided in the Noticeof Annual General Meeting.
Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability state the following:
a. that in the preparation of the annual financial statements theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any;
b. that such accounting policies have been selected and appliedconsistently and judgement and estimates have been made that are reasonable and prudent soas to give a true and fair view of the state of affairs of the Company as at 31stMarch 2019 and of the profit of the Company for the year ended on that date; c. thatproper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. that the annual financial statements have been prepared on a goingconcern basis;
e. that proper internal financial controls were in place and that thefinancial control were adequate and were operating effectively;
f. that proper systems to ensure compliance with the provisions of allapplicable laws were in place and were adequate and operating effectively.
During the year under review the Board of Directors of the Company hasamended / approved changes in Corporate Social Responsibility policy; Nomination andRemuneration Policy of Directors Key Managerial Personnel and Other Employees; Policy fordetermining Material Subsidiaries; Related Party Transaction Policy; Vigil Mechanism /Whistle Blower Policy; Code of Conduct for Board of Directors and Senior Management of theCompany; Material Events Policy; Website Content Archival Policy and Code of internalprocedures and conduct for regulating monitoring and reporting of Trading by Insiders tocomply with the recent amendments in the Companies Act 2013 and SEBI Listing Regulations.Accordingly the updated policies are uploaded on website of the Company at https://www.adanienterprises.com/investors/investor-download.
Number of Board Meetings
The Board of Directors met 5 (five) times during the year under review.The details of board meetings and the attendance of the Directors are provided in theCorporate Governance Report which forms part of this report.
Independent Directors' Meeting
The Independent Directors met on 7th February 2019 withoutthe attendance of Non-Independent Directors and members of the Management. The IndependentDirectors reviewed the performance of non-independent directors and the Board as a whole;the performance of the Chairperson of the Company taking into account the views ofExecutive Directors and Non-Executive Directors and assessed the quality quantity andtimeliness of flow of information between the Company Management and the Board that isnecessary for the Board to effectively and reasonably perform their duties.
The Board adopted a formal mechanism for evaluating its performance andas well as that of its Committees and individual Directors including the Chairman of theBoard. The exercise was carried out through a structured evaluation process coveringvarious aspects of the Board's functioning such as composition of the Board &committees experience & competencies performance of specific duties &obligations contribution at the meetings and otherwise independent judgment governanceissues etc.
Policy on Directors' Appointment & Remuneration
The Company's policy on directors' appointment andremuneration and other matters provided in Section 178(3) of the Companies Act 2013 isavailable on the Company's website at http://www.adanienterprises.com/ investors/investor-download.
Internal Financial Control system and their adequacy
The details in respect of internal financial control and their adequacyare included in Management and Discussion & Analysis which forms part of this report.
The Board of the Company has formed a risk management committee toframe implement and monitor the risk management plan for the Company. The committee isresponsible for reviewing the risk management plan and ensuring its effectiveness. Theaudit committee has additional oversight in the area of financial risks and controls.
Committees of the Board
Details of various committees constituted by the Board of Directors asper the provision of the SEBI Listing Regulations and the Companies Act 2013 are given inthe Corporate Governance Report which forms part of this report.
Corporate Social Responsibility
The Company has constituted a Corporate Social Responsibility (CSR)Committee and framed a CSR Policy. The brief details of CSR Committee are provided in theCorporate Governance Report. The Annual Report on CSR activities is annexed to thisReport. The updated CSR Policy is available on the website(http://www.adanienterprises.com/investors/ investor-download) of the Company.
Corporate Governance and Management Discussion and Analysis Report
Separate reports on Corporate Governance compliance and ManagementDiscussion and Analysis as stipulated by the SEBI Listing Regulations forms part of thisAnnual Report along with the required Certificate from Practicing Company Secretaryregarding compliance of the conditions of Corporate Governance as stipulated.
IncompliancewithCorporateGovernancerequirementsasper 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 31stMarch 2019 as stipulated under Regulation 34 of the SEBI Listing Regulations is annexedand forms part of this Annual Report.
Prevention of Sexual Harassment at Workplace
As per the requirements of The Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 and rules made thereunder yourCompany has constituted Internal Complaints Committee (ICC) which is responsible forredressal of complaints related to sexual harassment. During the year under review therewere no complaints pertaining to sexual harassment.
Extract of Annual Return
The details forming part of the extract of the Annual Return in FormMGT-9 are annexed to this Report as Annexure-A.
Related Party Transactions
During the year under review the Company has entered into materialrelated party transactions in terms of Section 188 of the Act with Adani Logistics Limitedand Adani Power Limited which may be deemed not in the ordinary course of business of theCompany. Details of the said transaction(s) are provided in Form AOC-2 annexed to theDirectors' Report as Annexure-B.
Except as stated above all related party transactions entered intoduring the financial year were on an arm's length basis and in the ordinary course ofbusiness.
Significant and Material Orders passed by the Regulators or Courts orTribunals Impacting the Going Concern Status of the Company
There are no significant and material orders passed by the Regulatorsor Courts or Tribunals which would impact the going concern status and the Company'sfuture operations.
Your Company has taken appropriate insurance for all assets againstforeseeable perils.
Auditors & Auditors' Report
Pursuant to the provisions of Section 139 of the Companies Act 2013read with rules made thereunder M/s. Shah Dhandharia & Co. Chartered Accountants(Firm Registration No. 118707W) were appointed as Statutory Auditors of the Company tohold office till conclusion of the 30th Annual General Meeting (AGM) of theCompany to be held in the calendar year 2022.
TheNotestothefinancialstatementsreferredintheAuditors Report areself-explanatory. There are no qualifications or reservations or adverse remarks ordisclaimers given by Statutory Auditors' of the Company and therefore do not call forany comments under Section 134 of the Companies Act 2013. The Auditors' Report isenclosed with the financial statements in this Annual Report.
Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act 2013and the rules made thereunder the Company has re-appointed Mr. Ashwin Shah PracticingCompany Secretary to undertake the Secretarial Audit of the Company. The Secretarial AuditReport for FY 2018-19 is annexed and forms part of this report as Annexure-C. There areno qualifications or reservations or adverse remarks or disclaimers given by SecretarialAuditors of the Company
Cost Audit Report
Your Company has re-appointed M/s. K. V. Melwani & AssociatesPracticing Cost Accountants to conduct audit of cost records of Mining Activities of theCompany for the year 31st March 2020. The Cost Audit Report for the year2017-18 was filed before the due date with the Ministry of Corporate Affairs.
The Company has maintained the cost accounts and records in accordancewith Section 148 of the Companies Act 2013 and Rule 8 of the Companies (Accounts) Rules2014.
Particulars of Employees
The information required under Section 197 of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are provided in separate annexure forming part of this Report asAnnexure-D.
The statement containing particulars of employees as required underSection 197 of the Companies Act 2013 read with Rule 5(2) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 will be provided upon request. Interms of Section 136 of the Companies Act 2013 the Report and Accounts are being sent tothe Members and others entitled thereto excluding the information on employees'particulars which is available for inspection by the members at the Registered Office ofthe Company during business hours on working days of the Company. If any member isinterested in obtaining a copy thereof such Member may write to the Company Secretary inthis regard.
Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo
The information on conservation of energy technology absorption andforeign exchange earnings and outgo stipulated under Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of The Companies (Accounts) Rules 2014 as amended from timeto time is annexed to this Report as Annexure-E.
Your Directors are highly grateful for all the guidance support andassistance received from the Government of India Government of Gujarat respective StateGovernments Financial Institutions and Banks. Your Directors thank all shareholdersesteemed customers suppliers and business associates for their faith trust andconfidence reposed in the Company. Your Directors also wish to place on record theirsincere appreciation for the dedicated efforts and consistent contribution made by theemployees at all levels to ensure that the Company continues to grow and excel.