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Adani Gas Limited

BSE: 542066|NSE: ADANIGAS|ISIN: INE399L01023|SECTOR: Miscellaneous
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Directors Report Year End : Mar '19    Mar 18

DIRECTORS'' REPORT

Dear Shareholders,

The Directors are pleased to present the 14th Annual Report along with the Audited Financial Statements of your Company for the financial year ended on 31st March, 2019.

FINANCIAL PERFORMANCE

The summarized financial highlight is depicted below: (Rs, In Crores)

Particulars

Consolidated Results

Standalone Results

2018-19®

2017-181

2018-19

2017-18

FINANCIAL RESULTS

Total Revenue

1,910.17

1,537.71

1,910.17

1,537.71

Total Expenditure other than Financial Costs and Depreciation

1,368.85

1,092.40

1,368.85

1,092.40

Profit before Depreciation, Finance Costs and Tax

541.32

445.31

541.32

445.31

Finance Costs

89.85

125.33

89.85

125.33

Depreciation, Amortization and Impairment Expense

67.31

61.01

67.31

61.01

Profit / (Loss) for the year before Exceptional Items and Tax

384.16

258.97

384.16

258.97

Add / (Less) Exceptional Items

27.64

-

27.64

-

Profit / (Loss) for the year before Taxation

356.52

258.97

356.52

258.97

Total Tax Expenses

127.81

94.39

127.81

94.39

Net Profit / (Loss) for the year from Continuing Operations

228.71

164.58

228.71

164.58

Net profit / (Loss) for the year from Discontinuing Operations

-

-

-

-

Profit for the year

228.71

164.58

228.71

164.58

Add / (Less) Share in Joint Venture & Associates

(0.01)

(2.61)

-

-

Net Profit / (Loss) after Joint Venture & Associates (A)

228.70

161.97

228.71

164.58

Add / (Less) Other Comprehensive Income (after tax) classified to Reserve & Surplus (B)

(0.61)

0.16

(0.60)

0.15

Add / (Less) Other Comprehensive Income (after tax) classified to Foreign Currency Translation Reserve

-

-

-

-

Total Comprehensive Income for the year

(0.61)

0.16

(0.60)

0.15

Add / (Less) Share of Minority Interest (C)

-

-

-

-

Net Profit / (Loss) for the year after Minority Interest (A B C)

228.09

162.13

228.11

164.73

APPROPRIATIONS

-

-

-

-

Net Profit / (Loss) for the year after Minority Interest (A B C)

228.09

162.13

228.11

164.73

Balance brought forward from previous year Profit / (Loss)

759.43

597.30

768.94

604.21

Add / (Less) : On account of Consolidation Adjustments

-

-

-

-

Add : Transition adjustment on account of Ind AS 115

4.45

-

4.45

-

Amount available for appropriations

991.97

759.43

1,001.50

768.94

Less : Appropriations

-

-

-

-

Proposed Dividend on Equity Shares

-

-

-

-

Tax on Dividend (Including surcharge) (net of credit)

-

-

-

-

Transfer to General Reserve

-

-

-

-

Balance carried to Balance Sheet

991.97

759.43

1,001.50

768.94

Note : 1. There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

2. Previous year figures have been regrouped / re-arranged wherever necessary.

PERFORMANCE HIGHLIGHTS Consolidated Financial Results:

The audited consolidated financial statements of your Company as on 31st March, 2019, prepared in accordance with the relevant applicable IND AS and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations”) 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 2018-19 are as follows:

Operational Highlights:

- The Company has registered a growth of 12.95% Y-o-Y basis in terms of overall sales volume as compared to previous year.

- The growth can be attributed to growth in sales volume of CNG by 11.53% and growth in sales volume of PNG by 14.49% on Y-o-Y basis.

- Along with its JV, the Company is now operational in 13 GAs.

Financial Highlights:

- FY 19 Revenue from Operations increased 32% Y-o-Y to Rs,1,823 Crores vs. Rs,1,385 Crores*.

- FY 19 Operating EBITDA has also increased 25% Y-o-Y to Rs,455 Crores vs. Rs,365 Crores.

*excluding effect of restatement in last year as per Ind AS 103

Standalone Financial Results:

On standalone basis, your Company registered total revenue of Rs,1,910.17 Crore and PAT of Rs,228.71 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

Your Directors have recommended a dividend of 25% (Rs,0.25/- per Equity Share of Rs,1 each) on the Equity Shares out of the profits of the Company for the financial year 2018-19. The said dividend, if approved by the shareholders, would involve a cash outflow of Rs,33.15 Crore including tax thereon.

Your Directors also recommended a dividend of 10% (Rs,1/- per Preference Share of Rs,10 each) on the 10% Cumulative Redeemable Preference Shares out of the profits of the Company for the financial year 2018-19. The said dividend, if approved by the shareholders, would involve a cash outflow of Rs,0.60 Lakhs including tax thereon.

Your Directors also approved an enabling resolution for redemption of 10% Cumulative Redeemable Preference Shares of Rs,10/- each along with interim dividend up to the date of redemption.

LISTING OF EQUITY SHARES OF THE COMPANY

We are pleased to inform that during the period under review, the Equity Shares of your Company got listed on 5th November, 2018 on both the recognized Stock Exchanges i.e. BSE Limited and National Stock Exchange of India Limited pursuant to Scheme of Arrangement.

AWARD OF NEW PROJECT UNDER 9th AND 10th ROUND OF CGD

- During the year, the Company won 15 additional Geographical Areas (GA) in ninth and tenth rounds of bidding for developing CGD Networks.

- The Company, along with its joint venture with Indian Oil Corporation Limited (IOCL), is now authorized to develop CGD networks in 38 GAs.

STATU S O F TH E C O M PO S I TE S C H E M E O F 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 Law Tribunal, Bench at Ahmadabad (''NCLT'') had, vide its order dated 3rd August, 2018 sanctioned 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. The scheme was approved by the shareholders, secured and unsecured creditors of the Company with requisite majority on 3rd July, 2018. The Scheme inter-alia provided for:-

a. amalgamation of AGHL with AGL (Part II of the Scheme); and

i. Upon the effectiveness of Part II of the Scheme and in consideration of the amalgamation of the AGHL with AGL -

a. 1 (One) equity share of Rs,10/- (Rupees Ten only) each of the AGL credited as fully paid-up for

every 1 (One) compulsorily convertible preference share of Rs,10/- (Rupees Ten only) each to the compulsorily convertible preference shareholder of AGHL.

b. 1 (One) Preference Share of Rs,10/- (Rupees Ten only) each of the AGL credited as fully paid-up for every 1 (One) equity share of Rs,10/- (Rupees Ten only) to the equity shareholder of AGHL.

The Company had fixed 26th August, 2018 as the record date to determine its shareholders who would be entitled to the shares of the Company as aforesaid, pursuant to the Part II of the Scheme.

Accordingly, the Board of Directors of the Company had on 26th August, 2018 allotted Equity Shares and Preference Shares to those shareholders of AGHL whose names appeared in the Register of Members as on the Record Date in the above mentioned ratio.

b. subject to satisfactory fulfillment of (a) above, demerger of the Demerged Undertaking (as defined in the Composite Scheme of Arrangement) of AEL and transfer of the same to the AGL (Part III of the Scheme).

i. Upon the effectiveness of Part III of the Scheme and in consideration of the transfer and vesting of the Demerged Undertaking into the Resulting Company:-

a. 1 (One) equity share of Rs,1/- (Rupee One only) each of the AGL credited as fully paid up for every 1 (One) equity share of Rs,1/- (Rupee One only) each to the equity shareholder of AEL.

AEL had fixed 7th September, 2018 as the record date to determine its shareholders who would be entitled to the shares of the Company as aforesaid, pursuant to the Scheme.

Accordingly, the Board of Directors of the Company had on 9th September, 2018 allotted Equity Shares to those shareholders of AEL whose names appeared in the Register of Members as on the Record Date in the above mentioned ratio.

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.

PARTICULARS OF LOANS, GUARAN TEES 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 exempt under Section 186 of the Companies Act, 2013. The details of investment made during the year under review are disclosed in the financial statements.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

During the year under review, pursuant to composite scheme of arrangement, the Company has ceased as step-down subsidiary of Adani Enterprises Limited and as subsidiary of Adani Gas Holdings Limited.

Pursuant to the provisions of Section 129, 134 and 136 of the Companies Act, 2013 read with rules framed there under and Regulation 33 of the SEBI Listing Regulations, the Company has prepared consolidated financial statements of the Company and its joint venture and a separate statement containing the salient features of financial statement of joint ventures in Form AOC-1 which forms part of this Annual Report.

The annual financial statements and related detailed information of the joint venture company shall be made available to the shareholders of the holding and joint venture company seeking such information on all working days during business hours. The financial statements of the joint venture shall also be kept for inspection by any shareholder/s during working hours at the Company''s registered office and that of the respective joint venture 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 joint venture, are available on our website, www.adanigas.com.

Pursuant to Section 134 of the Act read with Rule 8(1) of the Companies (Accounts) Rules, 2014 the details of development of joint venture of the Company is covered in the Management Discussion and Analysis Report which forms part of this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, Mr. Rajesh S. Adani (DIN: 00006322) and Mr. Rajeev Sharma (DIN: 00084188), resigned as Directors of the Company w.e.f. 22nd October, 2018 due to their pre-occupation.

The Board places on record its deep appreciation of the valuable services rendered as well as advice and guidance provided by Mr. Rajesh S. Adani and Mr. Rajeev Sharma during their tenure.

Mr. Gautam S. Adani (DIN: 00006273) was appointed as an Additional Director (Non-Executive) by the Board at its meeting held on 22nd October, 2018.

Mr. Suresh P Manglani (DIN: 00165062) was appointed as an Additional Director by the Board at its meeting held on 22nd October, 2018. He was also appointed as an Executive Director of the Company for a period of five years i.e. up to 21st October, 2023 subject to approval of members at the ensuing Annual General Meeting. Terms and conditions for his appointment are contained in the Explanatory Statement forming part of the notice of the ensuing Annual General Meeting.

Mr. Maheswar Sahu (DIN: 00034051), Mr. Naresh Kumar Nayyar (DIN: 00045395) and Mrs. Chandra Iyengar (DIN: 02821294) were appointed as Additional Directors (Non-Executive, Independent) of the Company w.e.f. 22nd October, 2018.

As Additional Directors, Mr. Gautam S. Adani, Mr. Suresh P Manglani, Mr. Maheswar Sahu, Mr. Naresh Kumar Nayyar and Mrs. Chandra Iyengar hold office up to the ensuing Annual General Meeting. The Company has received notice from a member under Section 160 of the Companies Act, 2013 proposing their appointment as Directors of the Company.

In accordance with the provisions of Section 149 of the Companies Act, 2013, Mr. Maheswar Sahu, Mr. Naresh Kumar Nayyar and Mrs. Chandra Iyengar 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 the SEBI Listing Regulations and there has been no change in the circumstances which may affect their status as independent director during the year.

Mr. Naresh Poddar resigned as Chief Financial Officer of the Company w.e.f. 31st January, 2019, in his desire for exploring new professional opportunities.

Mr. Hardik Sanghvi resigned as Company Secretary of the Company w.e.f. 8th August, 2018 due to personal reasons. Further, Mr. Gunjan Taunk was appointed as Company Secretary w.e.f. 26th August, 2018.

Pursuant to the requirements of the Companies Act, 2013 and Articles of Association of the Company, Mr. Pranav V. Adani (DIN: 00008457) is liable to retire by rotation and being eligible offer 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.

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 March, 2019 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.

POLICIES

During the year under review, the Board of Directors of the Company has adopted / amended / approved changes in Corporate Social Responsibility Policy; Nomination and Remuneration Policy of Directors, Business Responsibility Policy; Key Managerial Personnel and Other Employees; Related Party Transaction Policy; Vigil Mechanism / Whistle Blower Policy; Code of Conduct for Board of Directors and Senior Management of the Company; Material Events Policy; Policy on Preservation of Documents; Dividend Distribution Policy; Website Content Archival Policy and Code of internal procedures and conduct for regulating, monitoring and reporting of Trading by Insiders to comply 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.adanigas.com.

NUMBER OF BOARD MEETINGS

The Board of Directors met 6 (six) 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 13th February, 2019, 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 & 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 at http://www.adanigas.com.

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 THE BOARD

Details of various committees constituted by the Board of Directors as per the provision of the SEBI Listing Regulations and the 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 available on the website of the Company at http://www.adanigas.com.

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 Practicing Company Secretary 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, 2019 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 requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and rules made there under, 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 OFANNUALRETURN

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 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. Suitable disclosure as required by the Indian Accounting Standard (Ind AS 24) has been made in the notes to the Financial Statements.

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

Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with rules made there under, M/s. Shah Dhandharia & Co., Chartered Accountants (Firm Registration No. 118707W), were appointed as Statutory Auditors of the Company to hold office till conclusion of the 17th Annual General Meeting (AGM) of the Company to be held in the calendar year 2022.

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. There were no qualifications, reservations, adverse remark or disclaimers given by Statutory Auditors of the Company.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules made there under, the Company has re-appointed Mr. Ashwin Shah, Practicing Company Secretary to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for FY 2018-19 is annexed, which forms part of this report as Annexure-B. There were no qualifications, reservation or adverse remarks or disclaimers given by Secretarial Auditors of the Company.

COST AUDIT REPORT

Your Company has re-appointed M/s. N. D. Birla & Co., Practicing Cost Accountants to conduct audit of cost records maintained for Petroleum Products of the Company for the year ended 31st March, 2020. The Cost Audit Report for the year 2017-18 was filed before the due date with the Ministry of Corporate Affairs.

The Company has maintained the cost accounts and records in accordance with Section 148 of the Companies Act, 2013 and Rule 8 of the Companies (Accounts) Rules, 2014. 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, respective State Government Financial Institutions and Banks. Your Directors thank all shareholders, esteemed customers, suppliers and business associates for their faith, trust and confidence reposed in the Company. Your Directors also 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

Date: 27.05.2019 Chairman

Place: Ahmedabad (DIN: 00006273)

Source : Dion Global Solutions Limited
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