DIRECTORS' REPORT Dear Shareholders, Your Directors are pleased to present the 23rd Annual Report along with the audited financial statements of your Company for the financial year ended on 31st March, 2015 PERFORMANCE OF YOUR COMPANY 0 Consolidated Financial Results: The audited Consolidated Financial Statements of your Company as on 31st March, 2015, which form part of the annual report, have been prepared pursuant to Clause 41 of the Listing Agreement with the Stock Exchanges, in accordance with provisions of the Companies Act, 2013, the Accounting Standards AS-21 on Consolidated Financial Statements read with AS-23 on Accounting for investments in Associates and AS-27 on Financial Reporting of Interest in Joint Ventures. Your Company recorded Consolidated total revenue of Rs. 65,519.85 Crore as against Rs. 56,225.86 Crore in the previous year. The Consolidated EBIDTA increased by 26% to Rs. 13,308.37 Crore as against Rs. 10,539.85 Crore in the previous year. The consolidated PAT stood at Rs. 1,948.05 Crore. 0 Standalone Financial Results : On standalone basis, your Company registered total revenue of Rs. 16,212.50 Crore as compared to Rs. 12,993.46 Crore in the previous year. The EBIDTA increased by 200% to Rs. 1,370.13 Crore and earned PAT of Rs. 406.85 Crore as compared to loss of Rs. 178.70 Crore in the previous year. DIVIDEND Your Directors have recommended a dividend of 140% (Rs. 1.40/- per Equity Share of Re.1 each) on the Equity Shares out of the profits of the Company for the financial year 2014-15. The said dividend, if approved by the shareholders, would involve a cash outflow of Rs. 159.15 Crore including tax thereon. TRANSFER TO RESERVES The Company proposes to transfer Rs. 40 Crore to the General Reserve out of the amount available for appropriation. STATUS OF COMPOSITE SCHEME OF ARRANGEMENT In order to enable distinct focus of investors to invest in some of the key businesses and to lend greater/enhanced focus to the operation of the said businesses, the Board of Directors of your Company at its meeting held on 30th January, 2015, approved the Composite Scheme of Arrangement between Adani Enterprises Limited ("the Company" or "AEL") and Adani Ports and Special Economic Zone Limited ("APSEZ") and Adani Power Limited ("APL") and Adani Transmission Limited ("ATL") and Adani Mining Private Limited ("AMPL") and their respective shareholders and creditors ("the Scheme") pursuant to the provisions of Sections 391 to 394 read with Sections 100 to 103 and other relevant provisions of the Companies Act, 1956 and Sections 13, 52, 61 and other relevant provisions of the Companies Act, 2013. The scheme was subsequently approved by the shareholders, secured and unsecured creditors of the Company with requisite majority on 20th April, 2015. The scheme has been approved by the Hon'ble High Court, Gujarat vide its order dated 7th May, 2015. The Scheme, with effect from 1st April 2015, inter alia, provided for - 0 Key Highlights of the Scheme • Demerger of the Port Undertaking of AEL comprising the undertaking, businesses, activities, operations, assets (moveable and immoveable) and liabilities pertaining to the Belekeri port and the investment of AEL in APSEZ into APSEZ; • Demerger of the Power Undertaking of AEL comprising the undertaking, businesses, activities, operations, assets (moveable and immoveable) and liabilities pertaining to the 40MW solar power project at Bitta village, Kutch district of Gujarat and the investments of AEL in APL into APL; • Demerger of the Transmission Undertaking of AEL comprising the undertaking, businesses, activities, operations, assets (moveable and immoveable) and liabilities related to the Mundra-Zerda transmission line and the investment of AEL in ATL into ATL; • Merger of AMPL into AEL; No Equity Shares are to be issued pursuant to the merger as AMPL is a Wholly Owned Subsidiary of AEL; • Reduction of paid-up Equity Share capital of APSEZ, APL and ATL, respectively, and simultaneous issuance of Equity Shares by APSEZ, APL and ATL, respectively, to the Equity Shareholders of AEL; • Reduction of Securities Premium Account of AEL; and • Various other matters consequential, supplemental or otherwise integrally connected therewith. FIXED DEPOSITS During the year under review, your Company has not accepted any fixed deposits within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under. NON-CONVERTIBLE DEBENTURES During the year under review, your Company has issued 12,000 Rated, Listed, Redeemable, Non-Convertible Debentures of face value of Rs. 10 Lacs each aggregating to Rs. 1,200 Crore issued on a private placement basis listed on the Wholesale Debt Market Segment of BSE Limited. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS During the year under review, your Company has made loan, given guarantee, provided security and made investments in compliance of Section 186 of the Companies Act, 2013. The said details are given in the notes to the financial statements. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES Your Company had 80 (direct or indirect) subsidiaries as on 31st March, 2014. During the year under review, the following changes have taken place in Subsidiary/ Joint Venture Companies:- 0 Subsidiary, Joint Ventures and Associate Companies formed/acquired: 1. Dhamra LNG Terminal Private Limited (Subsidiary of the Company). 2. Adani Green Energy Limited (Subsidiary of the Company). 3. Adani Green Energy (Tamilnadu) Limited (Subsidiary of the Adani Green Energy Limited which is a subsidiary of the Company). 4. Adani Renewable Energy Park Limited (Subsidiary of the Company). 5. Adani Renewable Energy Park (Gujarat) Limited (Subsidiary of the Adani Renewable Energy Park Limited which is a subsidiary of the Company). 6. Adani Defence Systems and Technologies Limited (Subsidiary of the Company). 7. Adani Agri Logistics (Dewas) Limited (Subsidiary of the Company). 8. Adani Agri Logistics (Hoshangabad) Limited (Subsidiary of the Company). 9. Adani Agri Logistics (Harda) Limited (Subsidiary of the Company). 10.Adani Agri Logistics (Satna) Limited (Subsidiary of the Company). 11.Adani Agri Logistics (Ujjain) Limited (Subsidiary of the Company). 12.Jhar Mining Infra Private Limited (Subsidiary of the Adani Mining Private Limited which is a subsidiary of Company). 13.The Dhamra Port Company Limited (Subsidiary of the Adani Ports and Special Economic Zone Limited which is a subsidiary of the Company). 14.Adani Power (Karnataka) Limited (Subsidiary of the Adani Power Limited which is a subsidiary of the Company). 15.Mundra Solar Technopark Private Limited (Subsidiary of the Adani Ports and Special Economic Zone Limited which is a subsidiary of the Company). 0 Cessation of the Subsidiary, Joint Ventures and Associate Companies 1. PT Karya Pernitis Sejati (Subsidiary of PT Sumber Dana Usaha). 2. Adani Rail Infra Private Limited (Formerly Adani Shipyard Private Limited a Subsidiary of Adani Ports and Special Economic Zone Limited). In view of the above, the total number of subsidiaries as on 31st March, 2015 was 93. Pursuant to the provisions of Section 129, 134 and 136 of the Companies Act, 2013 read with rules framed thereunder and pursuant to Clause 41 of the Listing Agreement, your Company had prepared consolidated financial statements of the company and its subsidiaries and a separate statement containing the salient features of financial statement of subsidiaries, joint ventures and associates in Form AOC-1 forms part of the Annual Report. The annual financial statements and related detailed information of the subsidiary companies shall be made available to the shareholders of the holding and subsidiary companies seeking such information on all working days during business hours. The financial statements of the subsidiary companies shall also be kept for inspection by any shareholder/s during working hours at the Company's registered office and that of the respective subsidiary companies concerned. The separate audited financial statement in respect of each of the subsidiary companies is also available on the website of the Company. Details of developments of subsidiaries of the Company are covered in the Management's Discussion and Analysis Report which forms part of this Report. DIRECTORS AND KEY MANAGERIAL PERSONNEL Ms. Dharmishta N. Rawal (DIN : 02792246) and Mr. Pranav Adani (DIN : 00008457) were appointed as Additional Directors of the Company w.e.f. 31st March, 2015 to hold office upto the ensuing Annual General Meeting. The Nomination and Remuneration Committee and the Board of Directors at their respective meetings held on 13th May, 2015 recommended and approved the appointment of and payment of remuneration to Mr. Pranav Adani as an Executive Director designated as Director of the Company subject to approval of members at the ensuing Annual General Meeting. The Company has received notices from a member proposing appointment of Ms. Dharmishta N. Rawal and Mr. Pranav Adani as Directors of the Company. The tenure of Mr. Rajesh S. Adani as Managing Director of the Company will expire on 10th June, 2015. The Nomination and Remuneration Committee and the Board of Directors at their respective meetings held on 13th May, 2015 recommended and approved the re-appointment and payment of remuneration to Mr. Rajesh S. Adani as a Managing Director of the Company for a further period of five years i.e. upto 10th June, 2020, subject to the approval of members. Terms and conditions for his re-appointment are contained in the Explanatory Statement forming part of the notice of the ensuing Annual General Meeting. In accordance with the provisions of Section 149 of the Companies Act, 2013, Ms. Dharmishta N. Rawal is being appointed as an Independent Director to hold office as per her tenure of appointment mentioned in the Notice of the ensuing Annual General Meeting of the Company. Pursuant to the provisions of Section 149 of the Act, which came into effect from 1st April, 2014, Mr. Anil Ahuja, Mr. S. K. Tuteja, Dr. Ravindra H. Dholakia and Mr. Berjis Desai were appointed as Independent Directors at the Annual General Meeting of the Company held on 9th August, 2014. The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. Your Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges and there has been no change in the circumstances which may affect their status as Independent Director during the year. Brief details of Directors proposed to be appointed/re-appointed as required under Clause 49 of the Listing Agreement are provided in the Annexure to the Notice of the Annual General Meeting. Pursuant to the requirements of the Companies Act, 2013 and Articles of Association of the Company, Mr. Rajesh S. Adani (DIN : 00006322) is liable to retire by rotation and being eligible offers himself for re-appointment. During the period under review, Mr. Parthiv Parikh resigned as Company Secretary and Compliance Officer of the Company w.e.f. 15th April, 2015. Mr. Jatin Jalundhwala was appointed as Company Secretary and Compliance Officer of the Company w.e.f. 13th May, 2015. The Board recommends the appointment/re-appointment of above directors for your approval. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, state the following: a. that in the preparation of the annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. that such accounting policies have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st Mach, 2015 and of the profit of the Company for the year ended on that date; c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 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 control were adequate and were operating effectively; f. that proper systems to ensure compliance with the provisions of all applicable laws were 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 of board meetings and the attendance of the Directors are provided in the Corporate Governance Report which forms part of this report. INDEPENDENT DIRECTORS' MEETING The Independent Directors met on 26th March, 2015, without the attendance of Non-Independent Directors and members of the Management. The Independent Directors reviewed the performance of non-independent directors and the Board as a whole; the performance of the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. BOARD EVALUATION The Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Board functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, contribution at the meetings and otherwise, independent judgment, governance issues etc. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION Your Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 is made available on the Company's website. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY The details in respect of internal financial control and their adequacy are included in the Management and Discussion & Analysis, which forms part of this report. RISK MANAGEMENT The Board of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit 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 provision of Clause 49 of the Listing Agreement and Companies Act, 2013 are given in the Corporate Governance Report which forms part of this report. CORPORATE SOCIAL RESPONSIBILITY The Company has constituted a Corporate Social Responsibility (CSR) Committee and has framed a CSR Policy. The brief details of CSR Committee are provided in the Corporate Governance Report. The Annual Report on CSR activities is annexed to this Report. The CSR Policy is made available on the website of the Company. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT Separate reports on Corporate Governance compliance and Management Discussion and Analysis as stipulated by Clause 49 of the Listing Agreement forms part of this Annual Report along with the required Certificate from Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the Listing Agreement. In compliance with Corporate Governance requirements as per Clause 49 of the Listing Agreement, your Company has formulated and implemented a Code of Business Conduct and Ethics for all Board members and senior management personnel of the Company, who have affirmed the compliance thereto. BUSINESS RESPONSIBILITY REPORT The Business Responsibility Report for the year ended 31st March, 2015 as stipulated under Clause 55 of Listing Agreement is annexed to this 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, your Company has constituted Internal Complaints Committee (ICC) which is responsible for redressal of complaints related to sexual harassment. During the year under review, there were no complaints pertaining to sexual harassment. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in Form MGT-9 are annexed to this Report as Annexure-A. RELATED PARTY TRANSACTIONS All the related party transactions entered into during the financial year were on an arm's length basis and were in the ordinary course of business. Your Company had not entered into any transactions with related parties which could be considered material in terms of Section 188 of the Companies Act, 2013. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC 2 is not applicable. During the year under review, your Company has entered into transaction with related party which are material as per clause 49 of the Listing Agreement and the details of said transaction is provided in the Notice of the Annual General Meeting. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status and the Company's future operations. INSURANCE Your Company has taken appropriate insurance for all assets against foreseeable perils. AUDITORS & AUDITORS' REPORT M/s. Dharmesh Parikh & Co., Chartered Accountants (Firm Registration No.: 112054W), the Statutory Auditors of the Company, will retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. Your Company has received a letter from M/s. Dharmesh Parikh & Co., Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 141 of the Companies Act, 2013 read with rules made thereunder and that they are not disqualified for such appointment. Your Directors recommend the re-appointment of M/s. Dharmesh Parikh & Co., Chartered Accountants, as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of 25th Annual General Meeting of the Company to be held in the calendar year 2017. Notes to the financial statements referred in the Auditors Report are self-explanatory and therefore do not call for any comments under Section 134 of the Companies Act, 2013. SECRETARIAL AUDIT REPORT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules made thereunder, the Company had appointed Mr. Ashwin Shah, Practising Company Secretary to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for FY 2014-15 is annexed, which forms part of this report as Annexure-B. There were no qualifications, reservation or adverse remarks given by Secretarial Auditor of the Company. COST AUDIT REPORT Your Company has appointed M/s. K V Melwani & Associates, Practising Cost Accountants to conduct audit of cost records of Mining Activities of the Company for the year ended 31st March, 2016. The Cost Audit Report for the year 2013-14 was filed before the due date with the Ministry of Corporate Affairs. PARTICULARS OF EMPLOYEES The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the separate annexure forming part of this Report as Annexure-C. The statement containing particulars of employees as required under Section 197 of the Companies Act, 2013 read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be provided upon request. In terms of Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company. If any member is interested in obtaining a copy 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 exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, as amended from time to time is annexed to this Report as Annexure-D. ACKNOWLEDGMENT Your Directors are highly grateful for all the guidance, support and assistance received from the Government of India, Government of Gujarat, Financial Institutions and Banks. Your Directors thank all shareowners, esteemed customers, suppliers and business associates for their faith, trust and confidence reposed in the Company. Your Directors wish to place on record their sincere appreciation for the dedicated efforts and consistent contribution made by the employees at all levels, to ensure that the Company continues to grow and excel. For and on behalf of the Board of Directors Gautam S. Adani Executive Chairman (DIN: 00006273) Date : 13th May, 2015 Place : Ahmedabad |