ADANI TRANSMISSION Directors Report

Dear Shareholders,


The Directors are pleased to present the 4th Annual Report along with the audited financial statements of your Company for the financial year ended on 31st March, 2017.


Financial performance summary


The summarized financial highlight is depicted below: (RS, in crores)







































































































































































Particulars



Consolidated Results



| Standalone Results



2016-17 |



2015-16



2016-17 |



2015-16



FINANCIAL RESULTS



Total Revenue



2,901.55



2,267.39



1,608.30



421.38



Total Expenditure other than Financial Costs and



896.36



270.47



784.63



208.31



Depreciation



Profit before Depreciation, Finance Costs and Tax



2,005.19



1,996.92



823.67



213.07



Finance Costs



904.01



957.29



818.74



269.58



Depreciation, Amortization and Impairment Expense



569.25



559.65



0.05



0.03



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



531.93



479.98



4.88



(56.54)



Add / (Less) Exceptional Items



-



-



-



-



Profit / (Loss) for the year before Taxation



531.93



479.98



4.88



(56.54)



Total Tax Expenses



115.50



112.04



1.03



-



Net Profit / (Loss) for the year



416.43



367.94



3.85



(56.54)



Add / (Less) Share in Joint Venture & Associates



-



-



-



-



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



416.43



367.94



3.85



(56.54)



Other Comprehensive Income



- Items that will not be reclassified to profit or loss



0.75



3.17



0.16



2.92



- Items that will be reclassified to profit or loss



(157.83)



-



(143.35)



-



Other Comprehensive Income (After Tax) (B)



(157.08)



3.17



(143.19)



2.92



Total Comprehensive Income for the year (C) = (A B)



259.35



371.11



(139.34)



(53.62)



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



-



-



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



259.35



371.11



(139.34)



(53.62)



Balance carried to Balance Sheet



259.35



371.11



(139.34)



(53.62)



Note - The financial results of the Company have been prepared in accordance with Indian Accounting Standards (IND AS) from 1st April, 2016. Consequently, the results for the previous period have also been restated as per IND AS.


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.


Performance of your Company Consolidated Financial Results


The audited consolidated financial statements of your Company as on 31st March, 2017, prepared in accordance with the relevant applicable IND AS and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2016 ("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 2016-17 are as follows:


Operational Highlights


Your Company is the largest power transmission company operating in the private sector in India and owns, operate and maintain around 5,450 Ckt Kms of transmission lines ranging from 220 KV to 765 KV, with a total transformation capacity of more than 13,500 MVA. Your Company has six fully operational Transmission Systems that primarily serve the Northern and Western regions of India and is also constructing additional projects of around 2400 Ckt Kms in Rajasthan, Chhattisgarh, Madhya Pradesh, Maharashtra, Jharkhand & Bihar, which were awarded through Tariff Based Competitive Bidding process. Constructions of projects won under Tariff Based Competitive Bidding were well ahead of scheduled time of completion and within the budget. With completion of all ongoing projects and acquisitions, the network of the Company is expected to surpass 11,000 Ckt Kms.


Your Company''''s operating performance in FY17 has set the best benchmark in the country in terms of consistent operational Network availability ranging from 99.09% to 100%. Your Company continues to pursue the organic as well as inorganic growth opportunities. We have a strong & seamless integration of processes, people & technology which has laid a strong foundation for the Company to create the value for its stakeholders.


Financial Highlights:


- Consolidated total income in FY17 was RS,2,902 Crore as compared to RS,2,267 Crore in FY16.


Consolidated EBIDTA in FY17 was RS,2,005 Crore as compared to RS,1,997 Crore in FY16.


- Consolidated PAT in FY17 was up by 13% at RS,416 Crore as compared to RS,368 Crore in FY16.


Standalone Financial Results :


On standalone basis, your Company registered total revenue of RS,1,608 Crore in FY17 as compared to RS,421 Crore in FY16.


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 on standalone basis, your Directors have not recommended any dividend on Equity Shares for the year under review.


US Bond Issuance - Rule 144A/Regulation S Offerings


During the year under review, your Company priced rule 144A/Regulation S offering of USD 500 million 4.00% Senior Secured Notes due 2026. This was First USD public market international bond by an Indian Investment Grade private sector corporate issuer since July 2015. These Notes are rated Baa3 (Moody''''s), BBB- (S&P) and BBB- (Fitch).


Rupee Denominated Bonds - Masala Bonds During the year under review, your Company priced Rupee Denominated Bond of INR 5000 million 9.10% Senior Secured Notes due 2021. This was first private Power sector issuance from an Indian Investment Grade issuer in international bond markets.


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 25,800 Rated, Listed, Taxable, Secured, Redeemable, Non Convertible Debentures of face value of RS,10 lakhs each aggregating to RS,2,580 Crores on private placement basis listed on the Wholesale Debt Market Segment of BSE Limited.


Further, your Company has bought back 1,650 Zero Coupon Rated, Listed, Taxable, Secured, Redeemable, Non-Convertible


Debentures of the face value of RS,10 Lakhs each issued on private placement basis.


As on 31st March, 2017, 34,150 Rated, Listed, Taxable, Secured,


Redeemable, Non-Convertible Debentures of face value of RS,10 lakhs each aggregating to RS,3,415 Crores were outstanding issued 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 6 direct subsidiaries as on 31st March, 2016. During the year under review, the following companies were acquired -


- North Karanpura Transco Limited from REC Transmission Projects Company Limited.


- Maru Transmission Service Company Limited and Aravali Transmission Service Company Limited from GMR


Energy Limited.


In view of the above, the total number of subsidiaries as on 31st March, 2017 was 9.


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 there under and pursuant to Regulation 33 of the SEBI Listing Regulations, 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 which 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 forms part of this Report.


Directors and Key Managerial Personnel


Mr. Laxmi Narayana Mishra (DIN: 01952408) was appointed as an Additional Director by the Board at its meeting held on 4th April, 2017. He was also appointed as a Whole-time Director of the Company subject to approval of members at the ensuing Annual General Meeting. As an Additional Director, he holds 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 his appointment as a Director of the Company


Pursuant to the provisions of Section 149 of the Companies


Act, 2013, Mr. K. Jairaj, Dr. Ravindra H. Dholakia and Ms. Meera Shankar were appointed as Independent Directors at the Annual General Meeting of the Company held on 10 th August, 2016. 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.


Pursuant to the requirements of the Companies Act, 2013 and Articles of Association of the Company, Mr. Gautam S. Adani (DIN: 0 0 0 06273) 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. V. Subramanian (DIN: 00357727) resigned from the Directorship of the Company with effect from 24th August, 2016 due to his pre occupation. Mr. Deepak Bhargava, Whole-time Director (DIN: 05247943) of the Company resigned w.e.f. closure of business hours on 31st March, 2017 on attaining the age of superannuation. The Board places on record its sincere appreciation for the valuable contribution and guidance rendered by Mr. Deepak Bhargava and Mr. V. Subramanian during their tenure with the Company.


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 judgment 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, 2017 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 4 (four) 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 13 th February, 2017, 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 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 the 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 & Sustainability


The Company has constituted a Corporate Social Responsibility & Sustainability (CSR&S) Committee and has framed a CSR Policy. The brief details of (CSR&S) Committee are provided in the Corporate Governance Report. The Annual 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, 2017 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 hereunder, 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 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.


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 hereunder, 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 hereunder, the Company has appointed M/s. Samdani Shah & Kabra, Company Secretaries to undertake the Secretarial Audit of the Company, The Secretarial Audit Report for FY 2016-17 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.


Acknowledgement


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 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


Place: Ahmadabad Gautam S. Adani


Date: 27th May, 2017 Chairman


(DIN: 00006273)

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