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Adani Power

BSE: 533096|NSE: ADANIPOWER|ISIN: INE814H01011|SECTOR: Power - Generation & Distribution
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Directors Report Year End : Mar '19    Mar 18

Dear Shareholders,

The Directors present herewith the 23rd Annual Report along with the audited financial statements of your Company for the financial year ended 31st March, 2019.

1. FINANCIAL PERFORMANCE

The audited financial statements of the Company as on 31st March, 2019 are prepared in accordance with the relevant applicable Ind AS and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) and provisions of the Companies Act, 2013 (“Act”).

The Financial highlight is depicted below:

(Rs. in crores)

Particulars

Consolidated Results

Standalone Results

2018-19

2017-18

2018-19

2017-18

Revenue from operations

23,884.18

20,304.28

2,404.20

8,120.87

Other Income

2477.45

789.15

1,065.67

463.18

Total revenue

26,361.63

21,093.43

3,469.87

8,584.05

Operating and Administrative expenses

18,930.35

14,903.40

2,418.00

7,243.74

Operating Profit before Interest, Depreciation and Tax

7,431.28

6,190.03

1,051.87

1,340.31

Depreciation and Amortisation expenses

2,750.62

2698.72

38.06

860.67

Profit before finance costs and exceptional items

4,680.66

3491.31

1,013.81

479.64

Finance Costs

5,656.52

5,570.23

1,239.04

2,008.07

Exceptional Item

-

-

-

1,504.66

Loss before tax

(975.86)

(2,078.92)

(225.23)

(23.77)

Tax expenses

8.54

(5.15)

-

Loss for the year before share of (loss) from associate

(984.4)

(2,073.77)

(225.23)

(23.77)

Net Share of (loss) from associate

-

(29.18)

-

Loss for the period

(984.4)

(2,102.95)

(225.23)

(23.77)

Other Comprehensive Income

(7.74)

4.34

(1.17)

3.74

Total Comprehensive Loss for the year

(992.14)

(2,098.61)

(226.4)

(20.03)

Surplus brought forward from previous year

-

-

-

-

Balance available for appropriation

(992.14)

(2,098.61)

(226.4)

(20.03)

Balance carried to Balance Sheet

(992.14)

(2,098.61)

(226.4)

(20.03)

2. PERFORMANCE HIGHLIGHTS:

Consolidated:

The key aspects of your Company’s consolidated performance during the financial year 2018-19 are as follows:

a) Revenue

The consolidated total revenue of your Company for FY 2018-19 stood at Rs. 26,361.63 crores as against Rs. 21,093.43 crores for FY 2017-18 showing a increase of 24.98%. The revenue is higher in FY 2018-19, mainly due to increase in quantum of power sold.

Your Company has sold 55.24 billion units of electricity during FY 2018-19 as against 48.01 billion units in FY 2017-18 from all the plants with increase in Plant Load Factor (PLF) from 55% in the previous year to 64% in the year 2018-19.

b) Operating and Administrative Expenses

The consolidated Operating and administrative expenses of Rs. 18,930.35 crores during FY 2018-19 which has increased by 27.02% from Rs. 14,903.40 crores in FY 2017-18. It mainly consists of expenses in nature of fuel cost, employee benefits expense, transmission expense, repairs and maintenance etc.

The percentage of Operating and administrative expenses to total revenue has increase to 71.81% in FY 2018-19 from 70.65% in FY 2017-18.

c) Depreciation and Amortisation Expenses

The consolidated Depreciation and Amortisation Expenses of Rs. 2,750.62 crores during FY 2018-19 which has increased by 1.92% from Rs. 2,698.72 crores in FY 2017-18.

d) Finance Costs

The consolidated Finance costs of Rs. 5,656.52 crores during FY 2018-19 which has increase by 1.55% from Rs. 5,570.23 crores in FY 2017-18.

e) Total Comprehensive Loss for the year Consolidated Total Comprehensive Loss for the year was Rs. 992.14 crores as compared to Total Comprehensive Loss of Rs. 2,098.61 crores in FY 2017-18.

Standalone:

During the previous financial year, the Hon’ble National

Company Law Tribunal, Bench at Ahmedabad [“NCLT”] has sanctioned the Scheme of Arrangement between Adani Power Limited [the “Transferor Company”] and its subsidiary company, Adani Power (Mundra) Limited [the “Transferee Company”] and their respective shareholders and creditors [the “Scheme”] pursuant to the provisions of Sections 230-232 and other applicable provisions of the Companies Act, 2013 read with rules made thereunder. A certified copy of the Order sanctioning the Scheme was issued to the Company by the NCLT on 10th November, 2017. The said Scheme has been made effective on 22nd December, 2017 with appointed date of 31st March, 2017, on receipt of all the requisite approvals. As per the NCLT Order, sanctioning the Scheme, all the assets and liabilities pertaining to “Mundra Power Generation Undertaking” (i.e. 4620 MW thermal power undertaking) situated at Mundra, Gujarat [hereinafter referred as “De-merged Undertaking”], stand transferred and vested to the Transferee Company, as a going concern on a slump exchange basis. Also, pursuant to the Scheme, the Company transferred the balances of assets, liabilities and components of reserves and surplus (including accumulated losses) pertaining to De-merged Undertaking. Hence, the previous year figures are not comparable with the current year.

3. DIVIDEND:

The Board of Directors of your company, after considering holistically the relevant circumstances and keeping in view the Company’s dividend distribution policy, has decided that it would be prudent, not to recommend any Dividend for the year under review.

4. MATERIAL CHANGES AND COMMITMENTS:

The material change which has occurred between the end of financial year of the company and the date of this report is as under:

The Hon’ble Central Electricity Regulatory Commission

(“CERC”), after hearing submissions by Gujarat Urja Vikas Nigam Limited (“GUVNL1), Adani Power (Mundra) Limited (“APMuL1), and consumer representatives, issued its Order dated 12th April, 2019 adopting the Supplemental Power Purchase Agreements (“PPAs”) with revised tariffs retrospectively from 15th October 2018.

Subsequently, APMuL has claimed the differential fuel cost of Rs. 929 crores from GUVNL for the power supplied from 15th October, 2018 to 31st March, 2019. GUVNL has already released 50% payment of Rs. 418 crores on 30th April, 2019.

On 6th April, 2019, the Company has been awarded the Letter of Intent (“LOI”) for M/s. Korba West Power Company Limited (“KWPCL1), a company undergoing insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 (“Code”). The Committee of Creditors of KWPCL has approved the Resolution Plan submitted by the Company. The said LOI has been issued to the Company by the Resolution Professional appointed by the Hon’ble National Company Law Tribunal, Bench at Ahmedabad (the “NCLT”)

The closure of the transaction shall be subject to obtaining the necessary approval from the NCLT, and satisfaction of the conditions precedent under the resolution plan.

KWPCL owns and operates a 600 MW thermal power plant in Raigarh District, Chhattisgarh. Successful acquisition and implementation of the resolution plan for acquisition of KWPCL will consolidate APLs position as India’s leading private sector thermal power producer, with a combined thermal power capacity of 11,040 MW. Further, this reaffirms APLs credential in development & operation of Greenfield projects, and also successfully turning around brownfield acquisitions.

5. KEY DEVELOPMENTS:

Adani Power (Mundra) Limited

Pursuant to the recommendations of the High Powered Committee set up by the Government of Gujarat to find resolution to the issues faced by power plants affected by high imported coal prices, Adani Power (Mundra) Ltd. [“APMuL’] signed Supplemental Power Purchase Agreements [“PPA”], being amendments to the PPAs (Bid-01 for 1,000 MW signed 6th February 2007, and Bid-02 for 1,000 MW signed 2nd February 2007) signed with Gujarat Urja Vikas Nigam Ltd. [“GUVNL’], in respect of the 4,620 MW power plant at Mundra, Gujarat.

The amendments effected under the Supplemental PPAs, inter alia, allow revision in the Energy Charges under the respective PPAs on account of changes in the imported price of fuel being used for supply of power, subject to the terms and conditions contained therein. Further, the amendments increase the power generation capacity tied up under the PPAs by approx. 200 MW for Bid-01 and 234 MW for Bid-02, resulting in revised capacities of 1,200 MW and 1,234 MW respectively. At the same time, the amendments also allow for a discount of Rs. 0.20 / kWh in the Fixed Capacity Charge under the respective PPAs to the extent of the original capacities of 1,000 MW each, in order to provide relief to the end consumers.

The GUVNL, after the signing of the Supplemental PPAs, filed a petition with the Central Electricity Regulatory Commission [“CERC”] for approval of the amendments and adoption of tariffs.

The Hon’ble Appellate Tribunal for Electricity (“APTEL1) has, vide its Order dated 13th May 2018, approved the claim of Carrying Cost on relief pertaining to Change in Law for Taxes & Duties for imported coal. The Hon’ble Supreme Court has also endorsed the claim of Carrying Cost vide its Order dated 25th February 2019.

The CERC has also approved, vide its Order dated 11th March 2019, Carrying Cost over Change in Law relief for domestic coal shortfall pertaining to the PPA signed by APMuL with Haryana DISCOMs.

Adani Power Maharashtra Ltd.

The Hon’ble Maharashtra Electricity Regulatory Commission [“MERC”], vide its Order dated 7th March, 2018, had granted compensation to Adani Power Maharashtra Ltd. [“APML”] related to Change-in-law for domestic coal shortfall for 2500MW capacity of its power plant at Tiroda, Maharashtra, for the period up to March 2017, which has been tied up in long term PPAs with the Maharashtra Electricity Distribution Co. Ltd. [“MSEDCL”]. APML had raised a total claim of Rs. 2,821 crores on the basis of this Order, out of which MSEDCL has paid Rs. 1,400 crores on ad-hoc basis during FY 2018-19.

Further, the MERC has announced another Order on 7th February 2019, allowing compensation under change in law for domestic coal shortfall for period beyond March 2017, along with carrying cost.

APML has also received various positive orders for considering change in law relief from the date of commencement of supply for all the change in law reliefs, as well as various Orders allowing carrying cost on such change in law claims.

Adani Power Rajasthan Ltd.

The Hon’ble Rajasthan Electricity Regulatory Commission [“RERC”] gave an Order for compensation under Change in Law for domestic coal shortfall pertaining to the 1,200 MW PPA signed by Adani Power Rajasthan Ltd. [“APRL”] with Rajasthan DISCOMs [“Power Procurers”]. APRL had, on the basis of this Order, raised a claim of Rs. 5,130 crores on Rajasthan DISCOMs, which was challenged by the Power Procurers in the Appellate Tribunal for Electricity [“APTEL’] and the Supreme Court. The Hon’ble Supreme Court has ordered the payment of 50% of the claimed amount on a provisional basis, pending the outcome of the Appeal at APTEL. APRL has received Rs. 2,398 crores from Rajasthan DISOMs during FY 2018-19 on this behalf.

6. 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, read with rules made there under.

7. SUBSIDIARY COMPANIES AND ITS FINANCIAL PERFORMANCE:

Your Company has total 9 direct and indirect subsidiaries as on 31st March, 2019.There has been no material change in the nature of the business of the subsidiaries.

The Financial performance of the key subsidiaries is as under:

- Adani Power (Mundra) Limited [APMuL]: APMuLs Mundra Power Plant has a total installed capacity of 4,620 MW. Plant Load Factor (“PLF”) for the year was 59%. The Mundra Power Plant contributed Rs. 12,252.20 crores towards the total consolidated revenue and Rs. 2,458.28 crores towards the consolidated EBIDTA. APMuL had Rs. 1,046.71 crores Comprehensive Loss during the year.

- Adani Power Maharashtra Limited [APML]:

APML’s Tiroda Power Plant has a total installed capacity of 3,300 MW. PLF for the year was 75%. The Tiroda Power Plant contributed Rs. 10,096.71 crores towards the total consolidated revenue and Rs. 2,704.27 crores towards the consolidated EBIDTA. APML had Rs. 190.79 crores Comprehensive Profit during the year.

- Adani Power Rajasthan Limited [APRL]: APRLs Kawai Power Plant has a total installed capacity of 1,320 MW. PLF for the year was 66%. The Kawai Power Plant contributed Rs. 4,144.84 crores towards the total consolidated revenue and Rs. 1327.57 crores towards the consolidated EBIDTA. APRL had Rs. 79.24 crores comprehensive profit during the year.

- Udupi Power Corporation Limited [UPCL]: UPCLs Udupi Power Plant has a total installed capacity of 1,200 MW. PLF for the year was 50%.The Udupi Power Plant contributed Rs. 3,511.18 crores towards the total consolidated revenue and Rs. 992.95 crores towards the consolidated EBIDTA. UPCL had Rs.124.66 crores comprehensive profit during the year.

Subsidiary companies acquired:

In order to consolidate Power business across the group under one entity, for focused attention, better regulatory compliance, reduce operational cost and strengthen the sustainability of the businesses, the Company has acquired entire stake of following subsidiaries from Adani Enterprises Limited -

1. Adani Power Dahej Limited

2. Pench Thermal Energy (MP) Limited (Earlier known as Adani Pench Power Limited)

3. Kutchh Power Generation Limited

8. CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to the provisions of Section 129, 134 and 136 of the Companies Act, 2013, read with rules framed thereunder and pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company had prepared consolidated financial statements of the Company and its subsidiaries and a separate statement containing the salient features of financial statements of subsidiaries, joint ventures and associates in Form AOC-1 are forming part of the Annual Report. The Financial Statements as stated above are also available on the website of the Company and can be accessed at http:// www.adanipower.com/investors/financials.

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 open 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 statements in respect of each of the subsidiary companies are also available on the website of the Company. 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 financial statements of each of its subsidiaries, are available on our website, www.adanipower.com. Details of developments of subsidiaries of the Company are covered in the Management Discussion and Analysis Report, which forms part of this Report.

9. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the year under review:

Ms. Nandita Vohra, Independent Director of the Company, had resigned from the Board of Directors of the Company with effect from 14th August, 2018. Board places on record the deep appreciation for valuable services and guidance provided by her during the tenure of her Directorship;

Ms. Gauri Trivedi was appointed as an Additional Director (Non-Executive Independent Director) of the Company, with effect from 24th October, 2018.

Mr. Rajat Kumar Singh had resigned as Chief Financial Officer of the Company with effect from close of business hours of 29th May, 2019.

The Board of Directors on recommendation of Nomination and Remuneration Committee & Audit Committee appointed Mr. Suresh Jain as Chief Financial Officer and Key Managerial Personnel of the Company with effect from 30th May, 2019.

Mr. Raminder Singh Gujral was appointed as an Independent Directors of the Company for a period of five years upto August, 2020. The Board of Directors on recommendation of Nomination and Remuneration Committee has re-appointed him as an Independent Directors for a second term of five consecutive year upto August, 2025, subject to approval of members at the ensuing Annual General Meeting. The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act and SEBI Listing Regulations.

Your Company has received annual declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence provided in Section 149(6) of the Companies Act, 2013 and Regulations 16(1) (b) & 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there has been no change in the circumstances, which may affect their status as Independent Director during the year.

Director retiring by rotation

Pursuant to the requirements of the Companies Act, 2013 and Articles of Association of the Company, Mr. Vneet S Jaain (DIN: 00053906) retires by rotation at the ensuing Annual General Meeting 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.

Independent Directors’ Meeting

The Independent Directors met on 5th March, 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 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.

10. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to clause (c) of sub-section (3) and sub-section (5) of Section 134 of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, state the followings:

a. that in the preparation of the annual financial statement, 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 loss 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 statement have been prepared on a going concern basis;

e. That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f. That proper system to ensure compliance with the provisions of all applicable laws including the compliance of applicable Secretarial Standards were in place and were adequate and operating effectively.

11. BOARD EVALUATION:

The Board carried out an annual performance evaluation of its own performance and that of its committees and individual directors as per the formal mechanism for such evaluation adopted by the Board. The performance evaluation of all the Directors was carried out by the Nomination and Remuneration Committee. The performance evaluation of the Chairman, the Non-Independent Directors and the Board as a whole was carried out by the Independent Directors. The exercise of performance evaluation 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.

12. 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 Act is available on the website of the Company at http://www.adanipower.com/investor/ investordownload

13. INTERNAL FINANCIAL CONTROL (IFC) SYSTEM AND THEIR ADEQUACY:

The Directors are responsible for laying down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. As per Section 134(5) (e) of the Companies Act, 2013, the Directors’ Responsibility Statement shall state the same.

Your Company has put in place strong internal control systems and best in class processes commensurate with its size and scale of operations.

There is a well-established multidisciplinary Management

Audit & Assurance Services (MA&AS) that consists of professionally qualified accountants, engineers and SAP experienced executives which carries out extensive audit throughout the year, across all functional areas and submits its reports to Management and Audit Committee about the compliance with internal controls and efficiency and effectiveness of operations and key processes risks.

Some Key Features of the Company’s internal controls system are:

- Adequate documentation of Policies & Guidelines.

- Preparation & monitoring of Annual Budgets through monthly review for all operating & service functions.

- MA&AS department prepares Risk Based Internal Audit scope with the frequency of audit being decided by risk ratings of areas / functions. Risk based scope is discussed amongst MA&AS team, functional heads / process owners / CEO & CFO. The audit plan is formally reviewed and approved by Audit Committee of the Board.

- The entire internal audit processes are web enabled and managed on-line by Audit Management System.

- The Company has a strong compliance management system which runs on an online monitoring system.

- The Company has a well-defined delegation of power with authority limits for approving revenue & capex expenditure which is reviewed and suitably amended on an annual basis

- The Company uses ERP system (SAP) to record data for accounting, consolidation and management information purposes and connects to different locations for efficient exchange of information.

- Apart from having all policies, procedures and internal audit mechanism in place, Company periodically engages outside experts to carry out an independent review of the effectiveness of various business processes.

- Internal Audit is carried out in accordance with auditing standards to review design effectiveness of internal control system & procedures to manage risks, operation of monitoring control, compliance with relevant policies & procedure and recommend improvement in processes and procedure.

The Audit Committee of the Board of Directors regularly reviews execution of Audit Plan, the adequacy & effectiveness of internal audit systems, and monitors implementation of internal audit recommendations including those relating to strengthening of company’s risk management policies & systems.

14. RISK MANAGEMENT:

Company’s Risk Management Framework is designed to help the organisation to meet its objective through alignment of the operating controls to the mission and vision of the Group. 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.

The Risk Management Framework institutionalised strives to ensure a holistic, mutually exclusive and collectively exhaustive, allocation of risks by identifying risks relating to key areas such as operational, regulatory, business and commercial, financial, people, etc. Using this framework we aim to achieve key business objectives, both in the long term and short term, while maintaining a competitive advantage.

A standard 3-step approach has been defined for risk management -

1) Risk Identification

2) Risk Assessment & Prioritisation and

3) Risk Mitigation

Following review mechanism is in place for periodic review of the compliance to the risk policy and tracking of mitigation plans.

- Review Compliance to Risk Policy, Resolve bottlenecks to mitigate risk. Advise the Board of Directors on risk tolerance and appetite.

- Prioritise risk from stations / departments, track mitigation plan and escalate to steering committee. Prepare Steering Committee document and co-ordinate meeting.

- Review and update risk list. Track mitigation plan and share status update with CRO every month. Share Risk Review document with CRO.

Once risks have been prioritised, comprehensive mitigation strategies are defined for each of the prioritised risks. These strategies take into account potential causes of the risk and outline leading risk mitigation practices. In order to ensure the efficacy of this approach, a robust governance structure has also been set in place. Clear roles and responsibilities have been defined at each level right from the site champion to the APL management & leadership.

All associated frameworks (risk categorisation & identification); guidelines & practices (risk assessment, prioritisation and mitigation) and governance structure have been detailed out in the “Risk Management Charter” and approved by the Board of Directors.

15. BUSINESS RESPONSIBILITY REPORT:

The Business Responsibility Report for the year ended 31st March, 2019 as stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed which forms part of this Report.

16. 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 Act in Form AOC 2 is not applicable.

During the year under review, your Company has entered into transactions with related party which are material as per Regulation 23 of the SEBI Listing Regulations and the details of the said transactions are provided in the Annexure to Notice of the Annual General Meeting.

17. AUDITORS & AUDITORS’ REPORT: Statutory Auditors:

M/s. S R B C & Co. LLP (324982E/E300003), Chartered Accountants, the Statutory Auditors of the Company have been appointed as Statutory Auditors of the Company by the Members of the Company till the Conclusion of 26th Annual General Meeting of the Company to be held in the calendar year 2022. They have confirmed that they are not disqualified from continuing as Statutory Auditors of the Company for financial year 2019-20.

Explanation to Auditors’ Comment:

The Auditors’ Qualification has been appropriately dealt with in Note No. 39 and 42 of the Notes to the standalone audited financial statements and in Note No. 42 of the Notes to the consolidated audited financial statements. The Auditors’ Report is enclosed with the financial statements in this Annual Report.

Cost Auditors:

Your Company has appointed M/s Kiran J. Mehta & Co., Cost Accountants (Firm Reg. No. 100497) to conduct audit of cost records 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.

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies

Act, 2013 and the rules made thereunder, M/s. Chirag Shah & Associates, Practicing Company Secretaries, had been appointed to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for financial year 2018-19 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 in the Secretarial Audit Report of the Company.

18. AWARDS, CERTIFICATIONS AND ACCREDITATIONS:

In FY 2018-19, your Company’s wholly owned subsidiary Company namely Adani Power Rajasthan Limited has obtained:

Srishti Environment Award 2018 - Recognition for best Environment Management practices.

19. CORPORATE GOVERNANCE

Your Company has complied with the requirements of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding Corporate Governance. A report on the Corporate Governance practices, a Certificate from practicing Company Secretary regarding compliance of mandatory requirements thereof are given as an annexure to this report.

In compliance with Corporate Governance requirements as per the 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.

20. MANAGEMENT DISCUSSION AND ANALYSIS

A detailed report on the Management discussion and Analysis is provided as a separate section in the Annual Report

21. SUSTAINABILITY & CORPORATE SOCIAL RESPONSIBILITY (S & CSR) Our CSR Philosophy:

The CSR agenda is planned in consultation with the community through a systematic independent need assessment, as well as through a Participatory Rural Appraisal (PRA).

The inputs are then taken from an Advisory Committee, including senior members from the Adani Foundation and eminent personalities from the field.

The CSR agenda is subsequently deliberated upon and after careful consideration, then processed by our leadership in consultation with Adani Foundation.

Community Engagement and Development:

We approach community care with the same zeal and efficiency as we approach our business. We make strategic long-term investments which yield life-long positive change to the communities around us. We have a committed implementation team to carefully choose and craft initiatives in alignment with current and future needs of the nation.

We focus on a holistic socio-economic development of the local communities around our plant operations. We believe in positive relationships that are built with constructive engagement which enhances the economic, social and cultural well-being of individuals and regions connected to our activities. We continuously engage in dialogues, consultation, coordination and cooperation with community members to improve our sustainability performance and reduce business risks.

Implementation through Adani Foundation:

We initially started working with communities in and around Mundra, Gujarat, and slowly expanded our operations in the states of Gujarat, Maharashtra, Rajasthan, Himachal Pradesh, Madhya Pradesh, Karnataka, Chhattisgarh, Jharkhand and Odisha. We are aligning our philosophy with Sustainable Development Goals in order to ensure that the lives of the marginalised communities are substantially improved.

The comprehensive aim of the Foundation is to enhance the living conditions of the communities in which our operations are based. Our CSR always gives prime importance to inclusive growth and equitable development of the community.

We ensure that all our initiatives are successfully adopted by the community by ensuring their active involvement in the process of development. We carry out internal as well as external impact assessment of the community projects.

The Annual Report on CSR activities and initiatives on Sustainability Reporting are annexed, which forms part of this Report. The updated CSR policy is available on the website of the Company at http://www.adanipower. com/investor/investordownload

22. DISCLOSURES

A. 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.

B. COMMITTEES OF BOARD:

Details of various committees constituted by the Board of Directors, as per the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013, are given in the Corporate Governance Report and forms part of this report.

C. EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed to this report as Annexure-A.

D. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has adopted a whistle blower policy and has established the necessary vigil mechanism for employees and Directors to report concerns about unethical behavior. No person has been denied access to the Chairman of the Audit Committee. The said policy is uploaded on the website of the Company at http://www.adanipower. com/investors/investor-download

E. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The provisions of Section 186 of the Companies Act, 2013, with respect to loans, guarantees, investments or security are not applicable to the Company as the Company is engaged in providing infrastructural facilities and is exempted under Section 186 of the Companies Act, 2013. The details of investments made during the year under review are disclosed in the financial statements.

F. 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.

G. 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.

H. 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.

I. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:

As per the requirement of the provisions of the sexual harassment of women at workplace (Prevention, Prohibition & Redressal) Act, 2013 read with rules made thereunder, your Company has constituted Internal Complaints Committees at various locations as per requirement of the Act which are responsible for redressal of complaints relating to sexual harassment against woman at workplace. During the year under review, there were no complaints pertaining to sexual harassment against women.

J. OTHER DISCLOSURES AND REPORTING

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions pertaining to these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under ESOP or any other scheme.

4. Neither the Managing Director nor the Whole-time Director of the Company has received any remuneration or commission from any of its subsidiaries.

K. POLICIES

During the year under review, the Board of Directors of the Company has amended / approved changes in Sustainability & Corporate Social Responsibility policy; Nomination and Remuneration Policy of Directors, Key Managerial Personnel and Other Employees; Policy for determining Material Subsidiaries; 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; 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 Regulations. Accordingly, the updated policies are uploaded on website of the Company at https://www.adanipower.com/ investors/investor-download.

L. Insurance

Your Company has taken appropriate insurance for all assets against foreseeable perils.

23. ACKNOWLEDGEMENT:

Your Directors place on record their appreciation for assistance and co-operation received from various Ministries and Department of Government of India and other State Governments, financial institutions, banks, shareholders of the Company etc. The management would also like to express great appreciation for the commitment and contribution of its employees for their committed services.

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

Place: Ahmedabad Chairman

Date: 29th May, 2019 (DIN: 00006273)

Source : Dion Global Solutions Limited
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