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Adani Transmission Ltd.

BSE: 539254 Sector: Infrastructure
NSE: ADANITRANS ISIN Code: INE931S01010
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OPEN 1817.45
PREVIOUS CLOSE 1913.10
VOLUME 385111
52-Week high 1990.00
52-Week low 231.55
P/E
Mkt Cap.(Rs cr) 199,885
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1817.45
CLOSE 1913.10
VOLUME 385111
52-Week high 1990.00
52-Week low 231.55
P/E
Mkt Cap.(Rs cr) 199,885
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Adani Transmission Ltd. (ADANITRANS) - Director Report

Company director report

Dear Shareholders

Your Directors are pleased to present the 8th Annual Reportalong with the audited financial statements of your Company for the financial year endedon 31st March 2021.

Financial Performance Summary

The summarized financial highlight is depicted below:

Particulars

Consolidated

Standalone

2020-21 2019-20 2020-21 2019-20
FINANCIAL RESULTS
Total Revenue 10458.93 11681.29 1434.66 1653.62
Total Expenditure other than Financial Costs and Depreciation 5975.97 6929.33 765.34 880.59
Profit before Depreciation Finance Costs and Tax 4482.96 4751.96 669.32 773.03
Finance Costs 2116.99 2238.49 690.24 767.19
Depreciation Amortization and Impairment Expense 1328.88 1174.02 0.29 0.30
Profit Before Rate Regulated Activities Tax and Deferred Assets recoverable/adjustable for the period / year 1037.09 1339.45 (21.21) 5.54
Net movement in Regulatory Deferral Account Balances - Income/(Expenses) 582.81 (232.77) - -
Profit Before Tax and Deferred Assets recoverable/adjustable for the period / year 1619.90 1106.68 (21.21) 5.54
Total Tax Expenses 424.23 542.88 - -
Profit After Tax for the period / year but before Deferred Assets recoverable/adjustable 1195.67 563.80 (21.21) 5.54
Deferred assets recoverable/adjustable 93.90 142.69 - -
Profit After Tax for the period / year 1289.57 706.49 (21.21) 5.54
Add / (Less) Share in Joint Venture & Associates - - - -
Net Profit / (Loss) after Joint Venture & Associates 1289.57 706.49 (21.21) 5.54
Other Comprehensive Income
- Items that will not be reclassified to profit or loss 34.24 (21.10) (0.28) 0.24
- Tax relating to item that will not be reclassified to Profit & Loss (6.03) 3.61 - -
-Items that will be reclassified to profit or loss (192.32) 135.06 (20.95) 158.20
-Tax relating to items that will be reclassified to Profit & Loss 17.71 2.76 - -
Other Comprehensive Income (After Tax) (146.40) 120.33 (21.23) 158.44
Total Comprehensive Income for the year attributable to the Owner of the Company 1096.01 869.75 (42.44) 163.98
Add / (Less) Share Non-controlling interests 47.16 (42.93) - -
Net Profit / (Loss) for the year after Non-controlling interests 1143.17 826.82 (42.44) 163.98
Balance carried to Balance Sheet 1143.17 826.82 (42.44) 163.98

There are no material changes and commitments affecting the financialposition of the Company between the end of the financial year and the date of this report.

Power & Transmission sector

The Power & Transmission sector has seen tremendous progress overthe last two decades. Today Government initiatives such as Saubhagya and the emphasis onrenewables have significantly expanded electricity access. The next two decades promisesto usher in new opportunities for the sector based on the resurgence of the economy postthe pandemic and a positive investor outlook. Your Company is fully equipped to co-createa future in line with the needs of a nation at the cusp of global renewable energyleadership.

Performance of Your Company

Consolidated Financial Results

The audited consolidated financial statements of your Company as on 31stMarch 2021 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 during theFY 2020-21 are as follows:

Operational Highlights

Your Company is the transmission and distribution business arm of theAdani Group one of India's largest business conglomerates. Adani Transmission Limited(ATL) is the country's largest private transmission company with a cumulative transmissionnetwork of - 18801 ckt km and cumulative transformation capacity of - 36766 MVA out ofwhich- 13027 ckt km and - 18455 MVA is operational and - 5774 ckt km and 18311 MVA isat various stages of construction. ATL also operates a distribution business serving about3 Million+ customers in Mumbai. With India's energy requirement set to quadruple in comingyears ATL is fully geared to create a strong and reliable power transmission network andwork actively towards serving retail customers and achieving 'Power for All' by 2022.

Your Company has evolved over the past few years. Your Company's twoacquisitions (Alipurduar Transmission Limited and Warora-Kurnool Transmission Limited)during the year will bolster its pan-India presence consolidating further its position asthe largest private sector transmission company in India and moving it closer to its goalof 20000 ckt km of transmission lines by 2022. Your Company is constantly benchmarking tobe the best-in-class and is pursuing focused approach to be world-class integrated utilitythrough development agenda coupled with de-risking of strategic and operational aspectscapital conservation ensuring high credit quality and forging strategic partnerships forbusiness excellence and high governance standards. Your

Company is maintaining 24x7 quality power supply despite challengesposed by health and pandemic issues. The journey towards robust ESG framework andpracticing culture of safety is integral to its pursuit for enhanced long-term valuecreation for all stakeholders.

The following are some of the operational highlights for FY 21 -

• Added 3931 ckt km to transmission network in FY21 on account oforganic and inorganic growth taking total network to - 18801 ckt km.

• Strong Transmission system availability at more than 99.87%.

• Distribution business ensured more than 99.99% supplyreliability despite challenges on ground.

• Distribution losses were at 7.82% vs 7.37% in FY20.

• Achieved more than 100% collection efficiency at

AEML in FY21.

Financial Highlights:

Consolidated Performance on YoY basis - Stable Transmission businessdelivered operational revenue of H2792 Crore and operational EBITDA of H2574 Crore in FY21 translating into strong margin of 92%.

Distribution business operational EBITDA grew by 5% in FY21 in spiteof 20% decline in operational revenue

Performance highlights -

• Cash Profit of H2929 Crore up 45%

• PAT at H1290 Crore up 82%

• EPS at H9.02 vs. H2.94 in FY20; up 207% YoY

• Consolidated Operational EBITDA at H4233 Crore vs. H4055 Crorein FY20 up 4%

• Transmission Operational EBITDA at H2574 Crore

up 4% with a margin of 92%

• Distribution Operational EDITDA at H1659 Crore up 5%

Standalone Financial Results:

On standalone basis your Company registered total revenue of H1434.66Crore in FY21 as compared to H1653.62 Crore in FY 20.

The detailed operational performance of your

Company has been comprehensively discussed in the Management Discussionand Analysis Report which forms part of this Report.

Organisational Initiatives in response to COVID-19 situation

Due to outbreak of COVID-19 globally and in India the Group managementhad made initial assessment of impact on business and financial risk on account ofCOVID-19 Considering that the Group is in the business of Generation Transmission andDistribution of Power which is considered to be essential service the management believesthat the impact of this outbreak on the business and financial position of the Group isnot significant The management does not see any risks in the Group's ability to continueas a going concern and meeting its liabilities as and when they fall due.

Dividend

The Board of Directors of your company after considering holisticallythe relevant circumstances and keeping in view the tremendous growth opportunities thatyour company is currently engaged with has decided that it would be prudent not torecommend any Dividend for the year under review.

Fixed Deposits

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.

Non-Convertible Debentures

During the year under review your Company has redeemed / bought back3750 Rated Listed Taxable Secured Redeemable Non-Convertible Debentures of the facevalue of H10 Lakhs each issued on private placement basis.

In view of the same as on 31st March 2021 no RatedListed Taxable Secured Redeemable NonConvertible Debentures were outstanding on theWholesale Debt Market Segment of BSE Limited.

Particulars of loans guarantees or Investments

The provisions of Section 186 of the Companies Act 2013 with respectto a loan guarantee or security are not applicable to the Company as the Company isengaged in providing infrastructural facilities which is exempted under Section 186 of theCompanies Act 2013. The details of investments made by the Company during the year underreview are disclosed in the financial statements

Subsidiaries Joint Ventures and Associate Companies

Your Company had 28 direct subsidiaries as on 31st March2020. During the year under review the following companies were acquired / incorporated -

Acquired -

• Kharghar Vikhroli Transmission Private Limited

from Maharashtra State Electricity Transmission Company Limited.

• Alipurduar Transmission Limited from Kalpataru

Power Transmission Limited.

• Warora-Kurnool Transmission Limited from Essel

Infra projects Limited

New incorporations -

• Adani Transmission Step-One Limited as a wholly owned subsidiaryCompany.

• AEML SEEPZ Limited as a wholly owned subsidiary Company of AdaniElectricity Mumbai Limited a material subsidiary of the Company.

In view of the above the total number of subsidiaries as on 31stMarch 2021 was 33.

There are no associate companies or joint venture companies within themeaning of Section 2(6) of the Companies Act 2013 ("Act"). There has been nomaterial change in the nature of the business of the subsidiaries.

Pursuant to the provisions of Section 129 134 and 136 of the CompaniesAct 2013 read with rules framed there under and pursuant to Regulation 33 of the SEBIListing Regulations the Company had prepared consolidated financial statements of thecompany and its subsidiaries and a separate statement containing the salient features offinancial statement of subsidiaries joint ventures and associates in Form AOC-1 whichforms part of the 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 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.adanitransmission.com Details of developments ofsubsidiaries of the Company are covered in the Management's Discussion and Analysis Reportforms part of this Report.

Directors and Key Managerial Personnel

Pursuant to the requirements of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Anil Sardana (DIN: 00006867) is liable to retire byrotation and being eligible offers himself for reappointment.

During the year under review Mr. Kaushal G. Shah resigned as ChiefFinancial Officer of the Company with effect from 2nd February 2021.

The Company has received declarations from all the

Independent Directors of the Company confirming that they meet with thecriteria of independence as prescribed both under sub-section (6) of Section 149 of theCompanies Act 2013 and the SEBI Listing

Regulations and there has been no change in the circumstances which mayaffect their status as independent director during the year.

The Board recommends the aforesaid re-appointment of director for yourapproval.

Brief details of Director proposed to be re-appointed as required underRegulation 36 of the SEBI Listing Regulations are provided in the Notice of Annual

General Meeting.

Currently the promoter group of the Company is holding 74.92% equitystake of the Company which is within the statutory limits as prescribed by Securities andExchange Board of India. Further the composition of the board of directors of the Companycomprises judicial mix of 2 (Two) Promoter Directors 3 (Three) independent directors and1 (One) professional Managing Director and CEO thereby ensuring the requirement of having50% Board being Independent. The ownership and board governance structure(s) of theCompany are independent to each other and the functioning of the Board as a collectivebody is primarily driven by theory of fiduciary duties of director thereby ensuringeffectively protecting the interests of minority shareholders and long term value creationfor its stakeholders.

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 31stMach 2021 and of the Profit/ Loss of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother 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.

Policies

The updated policies adopted by the Company as per statutory andgovernance requirements are uploaded on website of the Company at https://www.adanitransmission.com/investors/corporate- governance

Number of Board Meetings

The Board of Directors met 4 (four) 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 4th February 2021 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.

Board Evaluation

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 Boards 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.

The evaluation of the Board is conducted internally by means of peerappraisal annually as per statutory requirements.

Internal Financial Control System and their Adequacy

The details in respect of internal financial control and their adequacyare included in the Management and Discussion & Analysis which forms part of thisreport.

Risk Management

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 Board

Details of various committees constituted by the

Board of Directors as per the provisions of the SEBI ListingRegulations and Companies Act 2013 are given in the Corporate Governance Report whichforms part of this report.

Corporate Social Responsibility & Sustainability

The Company has constituted a Corporate Social Responsibility &Sustainability (CSR&S) Committee and has framed a CSR Policy. The brief details of(CSR&S) Committee are provided in the Corporate Governance Report. The Annual Reporton CSR activities is annexed to this Report. The CSR Policy is available on the website ofthe Company at https:// www.adanitransmission.com/investors/corporate- governance

Till 2017-18 we were preparing a separate Annual Report andSustainability Report. This is the third year that we have combined both the reports intoone presenting financial and non-financial metrics in an integrated report for a moreholistic picture of our purpose performance and prospects.

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 form part of thisAnnual Report along with the required Certificate from Practising Company Secretaryregarding compliance of the conditions of Corporate Governance as stipulated.

In compliance with Corporate Governance requirements as per the SEBIListing Regulations 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 2021 as stipulated under Regulation 34 of the SEBI Listing Regulations is annexedwhich forms part of this Annual Report.

Prevention of Sexual Harassment at Workplace

As per the requirement 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.

Annual Return

The Annual Return of the Company as on 31st March 2021 isavailable on the Company's website and can be accessed athttps://www.adanitransmission.comA/ media/Project/Transmission/Investor/documents/Annual-Return/ATL-Form_MGT-7---2021-for-website. pdf

Related Party Transactions

All the related party transactions entered into during the financialyear were on an arm's length basis and were in the ordinary course of business. YourCompany had not entered into any transactions with related parties which could beconsidered material in terms of Section 188 of the Companies Act 2013. Accordingly thedisclosure of related party transactions as required under Section 134(3)(h) of theCompanies Act 2013 in Form AOC 2 is not applicable.

During the year under review your Company has reported transactionswith related party which are material as per Regulation 23 of the SEBI Listing Regulationsand the details of the said transactions are provided in the Annexure to Notice of theAnnual General Meeting.

Note on the material related party transaction carried forward by theCompany as per Annexure forming part of the AGM notice -

• This amount was invested in ATL by Adani Infra (India) Limitedto support acquisition of Adani Electricity Mumbai Limited's (AEML) Business which is inthe Gateway city/Financial Capital of India and is considered as a marquee asset for theCompany's entry into retail electricity distribution business. To support this acquisitionfor sustainable growth with proper Debt: Equity mix the Promoter group which is alreadyholding 74.92% in the Company had to be approached by management for urgent financialassistance in the manner that its recognised as an equity instrument for lenders tosupport with their corporate financing. Basis negotiations the Promoters agreed tocontribute significant sum of equity alike instrument with reasonable equity returns onthe amount and agreeing to deeply subordinate the sum provided in the form of PerpetualEquity. Accordingly the sum provided accrues 11.80% p.a. return on the same with mutuallyagreeable payment terms. The original sum contributed along with carrying costs can onlybe paid only against the equity sum to be mobilised by the Company. Thus the amountreceived is from related party but it's a facilitation sum that the Company needed formarquee acquisition and is rather a huge support lent by Promoter.

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.

Insurance

The 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. Deloitte Haskins & Sells LLP CharteredAccountants (Firm Registration No. 117366W/W- 100018) hold office as the StatutoryAuditors of the Company until the conclusion of the ensuing 10th Annual GeneralMeeting (AGM) to be held in the year 2023.

The Notes to the financial statements referred in the Auditors Reportare self-explanatory. There are no qualifications or reservations or adverse remarks ordisclaimers given by Statutory Auditors' of the Company and therefore do not call for anycomments under Section 134 of the Companies Act 2013. The Auditors' Report is enclosedwith 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 appointed M/s. Chirag Shah &Associates Company Secretaries to undertake the Secretarial Audit of the Company.Secretarial Audit Reports for FY 2020-21 of the Company and its material subsidiaries areannexed which forms part of this report as Annexure-A. There were no qualificationsreservation or adverse remarks given by Secretarial Auditors of the Company.

As per the requirements of the Listing Regulations Practicing CompanySecretaries of the respective material subsidiaries of the Company have undertakensecretarial audits of these subsidiaries for FY21. The Secretarial Audit Report confirmsthat the material

subsidiaries have complied with the provisions of the Act RulesRegulations and Guidelines and that there were no deviations or non-compliances and formspart of this Annual Report.

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 as

Annexure-B.

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-C.

Acknowledgement

Your Directors are highly grateful for all the guidance support andassistance received from the Government of India various State Governments FinancialInstitutions and Banks. Your Directors thank all shareowners esteemed customerssuppliers and business associates for their faith trust and confidence reposed in theCompany.

Your Directors also wish to place on record their sincere appreciationfor the dedicated efforts and consistent contribution made by the employees at all levelsto ensure that the Company continues to grow and excel.

For and on behalf of the Board of Directors
Gautam S. Adani
Place: Ahmedabad Chairman
Date: 6th May 2021 (DIN: 00006273)

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