DIRECTORS' REPORT Dear Shareholders, Your Directors are pleased to present the 3rd Annual Report along with the audited financial statements of your Company for the financial year ended on 31st March, 2016. Performance of your Company Your Company is the largest private sector transmission company in India with over 5,000 circuit kms of operational transmission lines across Western & Nothern regions of India along with 12,000 MVA transformation capacity. Your Company's operating performance in FY16 has set the best benchmark in the country in terms of system availability which ranges from 99.57% to 99.94%. During the year under review, your Company continues to maintain its leadership position in the country and is poised to keep growing leverage benefits of new opportunities and create value for its stake holders. Consolidated Financial Results: The audited consolidated financial statements of your Company as on 31st March, 2016, prepared in accordance with the relevant applicable Accounting Standards and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2016 and provisions of the Companies Act, 2013, forms part of this Annual Report. The key aspects of your Company's Consolidated performance during the financial year 2015-16 are as follows: Operational Highlights: • Systems Availability was above normative level for all the four lines as follows: • 765 kV Tiroda to Aurangabad System achieved average availability of 99.84% for the year ended March 2016 against 98% of normative availability. • 400 kV Tiroda to Warora System achieved average availability of 99.94% for the year ended March 2016 against 98% of normative availability. • 400 kV Mundra to Dehgam System achieved average availability of 99.85% for the year ended March 2016 against 98% of normative availability. • 500 kV HVDC Mundra to Mohindergarh System achieved average availability of 99.57% for the year ended March 2016 against 95% of normative availability. Financial Highlights: • Consolidated total income for FY 16 was Rs.2,267 Crore. • Consolidated EBIDTA for FY 16 was Rs.2,001 Crore. • Consolidated PAT for FY 16 stood at Rs.358 Crore. Standalone Financial Results : On standalone basis, your Company registered total revenue of Rs.421 Crore. The detailed operational performance of your Company has been comprehensively discussed in the Management Discussion and Analysis Report which forms part of this Report. Dividend In view of accumulated losses, your Directors have not recommended any dividend on Equity Shares for the year under review. The Composite Scheme of Arrangement During the year under review, the Hon'ble High Court of Gujarat had, vide its order dated 7th May, 2015 sanctioned the Composite Scheme of Arrangement between Adani Enterprises Limited ('AEL) and Adani Ports and Special Economic Zone Limited ('APSEZ') and Adani Power Limited ('APL') and Adani Transmission Limited ('the Company' or 'ATL') and Adani Mining Private Limited ('AMPL') and their respective shareholders and creditors ('the Scheme'). The Scheme, with effect from 1st April 2015, inter alia, provided for Demerger of the Transmission Undertaking of AEL comprising the undertaking, businesses, activities, operations, assets (moveable and immoveable) and liabilities pertaining to the Mundra-Zerda transmission line and the investment of AEL in ATL into ATL. Upon the Scheme coming into effect and in consideration of the transfer and vesting of the Transmission Undertaking of AEL into the Company, in terms of the Scheme, the equity shareholders of AEL whose names appeared in the Register of Members of AEL as on the Record Date i.e. 4th June, 2015 ("Eligible Shareholders of AEL") were entitled for allotment of 1 (one) equity share in ATL of Rs.10/- each credited as fully paid-up for every 1 (one) equity share of each fully paid-up held by such equity shareholder in AEL. Accordingly, 109,98,10,083 Equity Shares of Rs.10/- each of the Company were issued and allotted to the Eligible Shareholders of AEL on 8th June, 2015. Further, pursuant to the scheme existing holding of 109,00,00,000 Equity Shares of Rs.10 each of AEL in the Company was extinguished and cancelled. The Equity Shares of the Company so issued pursuant to the Scheme were listed and admitted for trading on BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE") with effect from 31st July, 2015. 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 1,000 Rated, Listed, Taxable, Secured, Redeemable, Non-Convertible Debentures of face value of H10 lacs each aggregating to H1,000 Crores on private placement basis listed on the Wholesale Debt Market Segment of BSE Limited. Particulars of Loans, Guarantees or Investments The provisions of Section 186 of the Companies Act, 2013, with respect to a loan, guarantee or security are not applicable to the Company as the Company is engaged in providing infrastructural facilities which is exempted under Section 186 of the Companies Act, 2013. The details of investments made by the Company during the year under review are disclosed in the financial statements. Subsidiaries, Joint Ventures and Associate Companies Your Company had 2 direct subsidiaries as on 31st March, 2015. During the year under review, the following changes have taken place in Subsidiary / Joint Venture Companies:- • Your Company has acquired Chhattisgarh-WR Transmission Limited, Raipur-Rajnandgaon-Warora Transmission Limited and Sipat Transmission Limited from PFC Consulting Limited. • Adani Transmission (Rajasthan) Limited was incorporated as a Wholly Owned Subsidiary for execution & implementation of 400 KV D/C Suratgarh - Bikaner Transmission line Project on design, build, finance, operate and transfer (DBFOT) basis. In view of the above, the total number of subsidiaries as on 31st March, 2016 was 6. There are no associate companies or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries. Pursuant to the provisions of Section 129, 134 and 136 of the Companies Act, 2013 read with rules framed thereunder, the 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. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available on our website, www.adanitransmission.com . 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 Mr. Gautam S. Adani (DIN: 00006273), Mr. Rajesh S. Adani (DIN: 00006322), Mr. K. Jairaj (DIN: 01875126), Mr. V. Subramanian (DIN: 00357727) and Ms. Meera Shankar (DIN: 06374957) were appointed as Additional Directors of the Company w.e.f 17th June, 2015 to hold office upto the ensuing Annual General Meeting. Dr. Ravindra H. Dholakia (DIN: 00069396) was appointed as an Additional Director of the Company w.e.f. 26th May, 2016 to hold office upto the ensuing Annual General Meeting. The Company has received notice(s) from a member proposing their appointment as Directors of the Company. In accordance with the provisions of Section 149 of the Companies Act, 2013, Mr. K. Jairaj, Mr. V. Subramanian, Dr. Ravindra H. Dholakia and Ms. Meera Shankar are being appointed as Independent Directors to hold office as per their tenure of appointment mentioned in the Notice of the ensuing Annual General Meeting of the Company. The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. The 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 the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI Listing Regulations") and there has been no change in the circumstances which may affect their status as independent director during the year. Pursuant to the requirements of the Companies Act, 2013 and Articles of Association of the Company, Mr. Deepak Bhargava (DIN: 05247943) is liable to retire by rotation and being eligible offers himself for re-appointment. The Board recommends the appointment/re-appointment of above directors for your approval. Brief details of Directors proposed to be appointed/ re-appointed as required under Regulation 36 of the SEBI Listing Regulations are provided in the Notice of Annual General Meeting. During the year under review, Mr. Devang Desai (DIN: 00005743), Mr. Dev Prakash Joshi (DIN: 05192222) and Mr. Jayadeb Nanda (DIN: 06578925) resigned from the Directorship of the Company with effect from 17th June, 2015 due to their pre occupation. The Board places on record its sincere appreciation for the valuable contribution and guidance rendered by Mr. Devang Desai, Mr. Dev Prakash Joshi and Mr. Jayadeb Nanda during their tenure with the Company. Pursuant to the provisions of Section 203 of the Companies Act, 2013, Mr. Kaushal G. Shah was appointed as Chief Financial Officer of the Company with effect from 20th October, 2015 in place of Mr. Rajiv Kumar Rustagi. 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, 2016 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 7 (seven) 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 30th March, 2016, 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 Chairperson 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 Boards 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 The 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 (<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 adequacy are included in 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 provisions of the SEBI Listing Regulations 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 & 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 Report on 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 Management Discussion and Analysis as stipulated by the SEBI Listing Regulations 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. In compliance with Corporate Governance requirements as per the SEBI Listing Regulations, 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, 2016 as stipulated under Regulation 34 of the SEBI Listing Regulations is annexed which 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, 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 transactions with related parties which are material as per Regulation 23 of the SEBI Listing Regulations and the details of said transactions are provided in the Annexure to 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 The Company has taken appropriate insurance for all assets against foreseeable perils. Auditors & Auditors' Report Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with rules made thereunder, M/s. Dharmesh Parikh & Co., Chartered Accountants (Firm Registration No.: 112054W), were appointed as Statutory Auditors of the Company to hold office till conclusion of the 5th Annual General Meeting (AGM) of the Company to be held in the calendar year 2018, subject to ratification of their appointment at every AGM. Accordingly, the appointment of M/s. Dharmesh Parikh & Co., Chartered Accountants as Statutory Auditors of the Company is placed for ratification by the Shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are re-appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. The 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. The Auditors' Report is enclosed with the financial statements in this Annual Report. 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. Chirag Shah, Practicing Company Secretary to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for FY 2015-16 is annexed, which forms part of this report as Annexure-B. There were no qualifications, reservation or adverse remarks given by Secretarial Auditors of the Company. 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 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, various State Governments, 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 Chairman (DIN: 00006273) Place : Ahmedabad Date : 26.05.2016 |