Your Directors are pleased to present the 6th Annual Report along with the auditedfinancial statements of your Company for the financial year ended on 31 st March 2019.
Financial Performance Summary
The summarized financial highlight is depicted below:
| || || || ||(र in Crore) |
| || |
|Particulars ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|FINANCIAL RESULTS || || || || |
|Total Revenue ||7560.80 ||4055.19 ||1631.41 ||1610.32 |
|Total Expenditure other than Financial Costs and Depreciation ||4543.22 ||1118.47 ||843.84 ||840.71 |
|Profit before Depreciation Finance Costs and Tax ||3017.58 ||2936.72 ||787.57 ||769.61 |
|Finance Costs ||1391.03 ||885.63 ||733.45 ||794.16 |
|Depreciation Amortization and Impairment Expense ||882.15 ||579.41 ||0.12 ||0.08 |
|Profit / (Loss) for the year before Rate Regulated ||744.40 ||1471.68 ||54.00 ||(24.63) |
|Activities Exceptional Items and Tax || || || || |
|Add / (Less) Net movement in Regulatory Deferral ||95.84 ||- ||- ||- |
|Account Balances-Income / (Expense) || || || || |
|Profit / (Loss) for the year before Exceptional Items and Tax ||840.24 ||1471.68 ||54.00 ||(24.63) |
|Add / (Less) Exceptional Items ||- ||- ||- ||- |
|Profit / (Loss) for the year before Taxation ||840.24 ||1471.68 ||54.00 ||(24.63) |
|Total Tax Expenses ||281.04 ||328.74 ||11.60 ||- |
|Profit / (Loss) for the year ||559.20 ||1142.94 ||42.40 ||(24.63) |
|Add / (Less) Share in Joint Venture & Associates ||- ||- ||- ||- |
|Net Profit / (Loss) after Joint Venture & Associates (A) ||559.20 ||1142.94 ||42.40 ||(24.63) |
|Other Comprehensive Income ||- ||- ||- ||- |
|- Items that will not be reclassifiedtoprofit loss or ||(1.42) ||0.31 ||(0.17) ||(0.06) |
|- Items that will be reclassifiedtoprofit loss or ||9.19 ||(25.91) ||9.67 ||(42.65) |
|Other Comprehensive Income (After Tax) (B) ||7.77 ||(25.60) ||9.50 ||(42.71) |
|Total Comprehensive Income for the year (C) = (A+B) ||566.97 ||1117.34 ||51.90 ||(67.34) |
|Add / (Less) Share of Minority Interest (D) ||- ||- ||- ||- |
|Net Profit / (Loss) for the year after Minority Interest (C+D) ||566.97 ||1117.34 ||51.90 ||(67.34) |
|Balance carried to Balance Sheet ||566.97 ||1117.34 ||51.90 ||(67.34) |
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.
Performance of your Company
Consolidated Financial Results
The audited consolidated financial statements of your Company as on31st March 2019 prepared in accordance with the relevant applicable IND AS andRegulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 ("SEBI Listing Regulations") and provisions of the Companies Act 2013forms part of this Annual Report.
The key aspects of your Company's consolidated performance during thefinancial year 2018-19 are as follows:
Your Company is the largest power transmission and distribution companyoperating in the private sector in India and owns operate and maintain 11348 CKT Kms oftransmission lines ranging from 132 KV to 765 KV with a total transformation capacity18330 MVA. Your Company has fourteen fully operational Transmission Systems thatprimarily serve the Northern and Western regions of India and is constructing additionalprojects of 2214 CKT Kms in Chhattisgarh Uttar Pradesh Jharkhand and Bihar which wereawarded through Tariff Based Competitive Bidding process. With completion of all ongoingprojects the network of the Company is to 13562 CKT Kms.
Your Company's operating performance in FY19 has set the bestbenchmark in the country in terms of consistent operational Network availability rangingfrom 99.80% to 100%. Your Company continues to pursue the organic as well as inorganicgrowth opportunities. We have a strong & seamless integration of processes people& technology which has laid a strong foundation for the Company to create the valuefor its stakeholders.
Consolidated total income in FY19 was र 7561 Crore as compared to र 4055 Crorein FY18.
Consolidated EBIDTA in FY19 was र 3113 Crore as compared to र 2937 Crore inFY18.
Consolidated PAT in FY19 was at र 559 Crore as compared to र 1143 Crore inFY18.
Standalone Financial Results:
On standalone basis your Company registered total revenue of र 1631 Crore in FY19 ascompared to र 1610 Crore in FY18.
The detailed operational performance of your Company has beencomprehensively discussed in the Management Discussion and Analysis Report which formspart of this Report.
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.
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 your Company has bought back 1184 RatedListed Taxable Secured Redeemable Non-Convertible Debentures of the face value of र 10Lakhs each issued on private placement basis on 26th March 2019.
As on 31st March 2019 25466 Rated Listed Taxable SecuredRedeemable Non-Convertible Debentures of face value of र 10 Lakhs each aggregating to र2546.60 Crores were outstanding as issued on private placement basis listed 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 15 direct subsidiaries as on 31st March 2018. Duringthe year under review the following companies were acquired / incorporated -
Ghatampur Transmission Limited from REC Transmission ProjectsCompany Limited.
Adani Electricity Mumbai Limited (earlier known as RelianceElectric Generation and Supply Limited) from Reliance Infrastructure Limited.
Obra C-Badaun Transmission Limited from PFC Consulting Limited.
KEC Bikaner Sikar Transmission Private Limited from KECInternational Limited
AEML Infrastructure Limited was incorporated as a wholly-ownedsubsidiary Company.
In view of the above the total number of subsidiaries as on 31stMarch 2019 was 20.
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 thereunder and pursuant to Regulation 33 of the SEBIListing Regulations the Company had prepared consolidated financial of the company andits subsidiaries and a separate statement containing the salient features of financialsubsidiaries joint ventures and associates in Form AOC-1 which forms part of the AnnualReport.
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 ofthe respective companies concerned. In accordance with Section 136 of the Companies Act2013 the audited financial including consolidated financial statements and information ofthe Company and audited accounts of each of its subsidiaries are available on ourwebsite www.adanitransmission.com. Details of developments of subsidiaries of the Companyare covered in the Management's Discussion and Analysis Report forms part of thisReport.
Directors and Key Managerial Personnel
Pursuant to the requirements of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Gautam S. Adani (DIN: 00006273) is liable to retire byrotation and being eligible offers himself for re-appointment.
Present tenure of Dr. Ravindra H. Dholakia Mr. K. Jairaj and Mrs.Meera Shankar as Independent Director(s) expires on August 2019 June 2020 and June2020 respectively. The Nomination and Remuneration Committee and the Board of Directors attheir respective meetings held on 28th May 2019 recommended and approved there-appointment of said Independent Directors for a second term of 5 (five) year uptoAugust 2024 June 2025 and June 2025 respectively subject to approval of members.
In accordance with the provisions of Section 149 and Schedule IV of theCompanies Act 2013 and rules made thereunder Dr. Ravindra H. Dholakia Mr. K. Jairaj andMrs. Meera Shankar are being re-appointed as Independent Directors to hold office as pertheir tenure of re-appointment mentioned in the Notice of the ensuing Annual GeneralMeeting of the Company.
The terms and conditions of appointment of Independent Directors are asper Schedule 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.
The Board recommends the appointment / re-appointment of abovedirectors for your approval.
Brief details of Directors proposed to be appointed / re-appointed asrequired under Regulation 36 of the SEBI Listing Regulations are provided in the Notice ofAnnual General Meeting.
Currently the promoter group of the Company is holding 74.92% equitystake of the Company which is within the statutory limits. Further the composition of theboard of directors of the Company comprises judicial mix of 2 (Two) Promoter Directors 3(Three) independent directors and 1 (One) professional Managing Director and CEO therebyensuring the requirement of having 50% Board being Independent. The ownership and boardgovernance structure(s) of the Company are independent to each other and the functioningof the Board as a collective body is primarily driven by theory of fiduciary duties ofdirector thereby ensuring effectively protecting the interests of minority shareholdersand long term value creation for 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 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 Mach 2019 and of theprofit loss 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.
During the year under review the Board of Directors of the Companyhave amended / 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 Regulations.Accordingly the updated policies are uploaded on website of the Company athttp://www.adanitransmission. com/Investor-relation/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 13th February 2019 without theattendance 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 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.
Policyon Directors' Appointment and Remuneration
The Company's policy on directors' appointment andremuneration and other matters provided in Section 178(3) of the Companies Act 2013 ismade available on the Company's website (http://www.adanitransmission.com/Investor-relation/investor-download).
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.
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 asper the provisions of the SEBI Listing Regulations and Companies Act 2013 are given inthe Corporate Governance Report which forms 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(http://www.adanitransmission.com/Investor-relation/ 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 form part of thisAnnual Report along with the required Certificate from Statutory Auditors of the Companyregarding 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 BusinessConduct and Ethics for all Board members and senior management personnel of the Companywho have affirmed the compliance thereto.
Business Responsibility Report
The Business Responsibility Report for the year ended 31st March 2019as stipulated under Regulation 34 of the SEBI Listing Regulations is annexed which formspart 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.
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
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 entered intotransactions with related party which are material as per Regulation 23 of the SEBIListing Regulations and the details of the said transactions are provided in the Annexureto Notice of the Annual General Meeting.
Regulators or Courts or Tribunals Impacting the Going Concern Status ofthe Company
There are no significant and Regulators or Courts or Tribunals whichwould impact the going concern status and the Company's future operations.
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 Statutory Auditorsof the Company until the conclusion of the ensuing 10th Annual General Meeting (AGM) to beheld 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 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 appointed M/s. Chirag Shah &Associates Company Secretaries to undertake the Secretarial Audit of the Company. TheSecretarial Audit Report for FY 2018-19 is annexed which forms part of this report asAnnexure-B. There were no qualifications reservation or adverse given by SecretarialAuditors of the Company.
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-C.
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. orders passed by the
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-D.
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 |
|Place: Ahmedabad ||Gautam S. Adani |
|Date: 28th May 2019 ||Chairman |
| ||(DIN: 00006273) |