Your Directors are pleased to present the 18th Annual Report along with the audited
financial statements of your Company for the financial year ended on March 31, 2017.
The Company has adopted the Indian Accounting Standards ("Ind AS") notified
under the Companies (Indian Accounting
Standards) Rules, 2015 w.e.f April 1, 2016. Financial statements for the year ended and
as at March 31, 2016 have been restated to conform to Ind AS. The summarized financial
highlight is depicted below:
||( Rs in crore)
|Revenue from operations
|Depreciation and Amortisation Expenses
|Foreign Exchange (Gain) / Loss (net)
|- Interest and Bank Charges
|- Derivative (Gain)/Loss
|Profit before share of profit from joint ventures and tax
|Tax Expense (net)
|Profit after tax and before share of profit from joint ventures
|Share of Profit from Joint Ventures
|Net Profit for the year
|Total Other Comprehensive Income
|Total Comprehensive Income for the year (net of tax)
|Equity holders of the parent
There are no material changes and commitments affecting the financialposition of the
Company between the end of the financial year and the date of this report.
Your Company has created a milestone in Indian commercial ports history by handling
168.72 MMT of cargo. Mundra Port continues to rank 1st in terms of total cargo handling
and 2nd in terms of container cargo handling during the year under review. The other ports
developed and being operated by your Company at Dahej, Hazira, Kandla, Dhamra, Murmugao
and Kattupalli have performed well.
The audited consolidated financial statements of the
Company as on March 31, 2017, prepared in accordance with the relevant applicable Ind
AS and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 and provisions of the Companies Act, 2013, forms part of this Annual
The key aspects of your Company's consolidated performance during the financial year
2016-17 are as follows:
Cargo volume increased by 11% from 151.51 MMT in 2015-16 to 168.72 MMT in 2016-17.
Total Income increased by 21% from C7,841.32 crore in 2015-16 to C9,479.46 crore in
Profit after Tax increased by 35% fromC2,913.72 crore in 2015-16 to C3,919.94 crore in
Earning per Share (EPS) for the year increased by 35% from C13.99 in 2015-16 to C18.89
The detailed operational performance of the Company has been comprehensively discussed
in the Management Discussion and Analysis Report which forms part of this Report.
Your Directors have recommended a dividend of 65% (C1.30 per equity share of C2 each)
on the equity shares and 0.01% dividend on 0.01% Non-Cumulative Redeemable Preference
Shares of C10 each for the financial year 2016-17. The said dividend, if approved by the
shareholders, would involve a cash outflow of C 324.03 crore including tax thereon.
Transfer to Reserves:
The Company proposes to transfer C355.66 crore to Debenture Redemption Reserve out of
the amount available for appropriation.
Status of Scheme of Arrangement:
During the year under review, the Board of Directors at its meeting held on February
14, 2017 had approved the Scheme of Arrangement between Adani Ports and Special Economic
Zone Limited (the Company or Transferor Company) and The Adani Harbour Services Private
Limited (the Transferee Company) and their respective shareholders and creditors (scheme)
for transfer and vesting of Marine Business Undertaking of the Company to the Transferee
Company as a going concern, on Slump Sale basis for which lump sum consideration shall be
paid by the Transferee Company to the Company. The rationale for the Scheme of Arrangement
is as under:
Both, the Transferor Company and the Transferee Company are carrying on marine
business. Consolidating similar businesses within one company would enable the business
activities to be carried out with greater focus and specialization for sustained growth.
It is expected that the proposed consolidation will allow more focused strategy,
standardization in operations, operating cost optimization, better monitoring and
utilization of assets, effective coordination with customers which in turn would enhance
The said Scheme is effective upon approval of shareholders, creditors, Hon'ble National
Company Law Tribunal and other regulatory and statutory approvals as applicable.
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 3.95% Senior Unsecured Notes due 2022. These Notes are rated Baa3
(Moody's), BBB- (S&P) and BBB- (Fitch).
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.
During the year under review, your Company has issued 42,520 Rated, Listed, Secured
Redeemable Non-Convertible Debentures (NCDs) of face value of C10 lakh each aggregating to
C4,252 crore on a private placement basis listed on the Wholesale Debt Market Segment of
Further, your Company has redeemed 14,600 NCDs of face value of C10 lakh each and
bought-back 8,483 NCDs of face value of C10 lakh each issued on private placement basis.
Particulars of loans, guarantees or investments:
The provisions of Section 186 of the Companies Act, 2013, with respect to a loan,
guarantee or security is 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 investment made during the year under review are disclosed in
the financial statements.
Subsidiaries, Joint Ventures and Associate Companies:
Your Company had 26 (direct and indirect) subsidiaries as on March 31, 2017.
During the year under review, the following changes have taken place:
Adani Petroleum Terminal Private Limited was incorporated as wholly owned
subsidiary of the company on April 26, 2016 with an object to promote, invest and to
develop, operate, maintain hydro-carbons terminal.
Abbot Point Operations Pty Ltd, a wholly owned subsidiary company has
acquired 100% stake of Abbot Point Bulkcoal Pty Ltd (APBPL) and accordingly, APBPL became
step down subsidiary.
Your Company has acquired 100% stake of The Adani Harbour Services Private
Limited (Formerly, TM Harbour Services Private Limited) (TAHSPL) pursuant to share
purchase agreement signed on December 7, 2016 and accordingly, TAHSPL become wholly owned
Your Company has divested its entire stake of Mundra LPG Terminal Private
Limited (MLTPL) to Adani Petroleum Terminal Private Limited and accordingly, MLTPL become
step down subsidiary.
Your Company has acquired 100% stake of Mundra LPG Infrastructure Private
Limited (MLIPL) from Adani Hazira Port Private Limited and accordingly, MLIPL became
wholly owned subsidiary.
Your Company has acquired 26% stake of Adani Kandla Bulk Terminal Private
Limited (AKBTPL) and Adani Murmugao Port Terminal Private Limited (AMPTPL) from Adani
Enterprises Limited and accordingly, AKBTPL and AMPTPL become wholly owned subsidiaries.
No Company has become/ceased to be a Joint venture/ associate during the financial year
Mundra International Gateway Terminal Private Limited was incorporated as wholly owned
subsidiary of the company on May 17, 2017 with an object to develop, operate, maintain
ports and related infrastructure facilities.
Pursuant to the provisions of Section 129, 134 and 136 of the Companies Act, 2013 read
with rules made 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
statement of subsidiaries, joint ventures and associates in Form AOC-1 forms part of this
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 website, www.adaniports. com. Details of developments of subsidiaries of
the Company are 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. A. K. Rakesh, IAS (DIN: 00063819) representing
Gujarat Maritime Board ceased to be Director w.e.f September 7, 2016. Board places on
record the deep appreciation for valuable services and guidance provided by him during the
tenure of his Directorship.
Mr. Gautam S. Adani (DIN: 00006273) was re-appointed as Chairman and Managing Director
for a period of five years w.e.f July 1, 2017 subject to approval of shareholders of the
Mr. Karan Adani, CEO (DIN: 03088095) of the Company was appointed as an Additional
Director and Whole Time Director of the Company for a period of five years w.e.f May 24,
2017 subject to the approval of shareholders of the Company.
Your Company has received declarations from all the Independent Directors of the
Company confirming that they meet with the criteria of independence as provided in Section
149(6) of the Companies Act, 2013 and Regulation 16(1)(b) 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.
Pursuant to the requirements of the Companies Act, 2013 and Articles of Association of
the Company, Mr. Rajesh S. Adani (DIN: 00006322) is liable to retire by rotation and being
eligible offers himself for re-appointment. The Board recommends the appointment of Mr.
Rajesh S. Adani as Director of the Company retiring by rotation.
Brief details of Mr. Gautam S. Adani, Mr. Rajesh S. Adani and Mr. Karan Adani as
required under Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 is provided in the Notice of the 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 except which has been
mentioned in the notes 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 at the
end of the financial year and of the profit and loss of the Company for that period; 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
Number of Board Meetings:
The Board of Directors met 5 (five) times during the year under review. The details of
board meetings and the attendance of the Directors are provided in the Corporate
Governance Report which forms part of this Report.
Independent Directors' Meeting:
The Independent Directors met on February 14, 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 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.
The Board adopted a formal mechanism for evaluating its performance 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 judgement, governance issues etc.
All Directors participated in the evaluation survey and review was carried out through
a peer-evaluation excluding the Director being evaluated. The result of evaluation was
discussed in the Independent Director's meeting held on February 14, 2017, Nomination and
Remuneration Committee meeting and in the Board Meeting held on May 24, 2017.
The Board members noted the suggestions / inputs of Independent Directors, Nomination
and Remuneration Committee and discussed various initiatives to further strengthen Board
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 available on the website of the
Company at http://www.adaniports.com/investor/investor-download.
Internal Financial control system and their adequacy:
The details in respect of internal financial control and their adequacy are included in
Management Discussion and Analysis Report which forms part of this report.
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 major risks
identified by the businesses are systematically addressed through mitigation actions on a
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 Companies Act, 2013 are given in the Corporate Governance Report which forms part of
Sustainability and Corporate Social Responsibility:
The Company has changed the nomenclature of "Corporate Social Responsibilityand
material orders passed by the Committee" to "Sustainability and Corporate
Social Responsibility Committee" (CSR) and has approved the revised terms of
reference. The brief details of CSR Committee and contents of CSR policy is provided in
the Corporate Governance Report. The Annual Report on CSR activities is annexed and forms
part of this report. The CSR policy is available on the website of the Company at http://
Corporate Governance and Management Discussion and Analysis Report:
A separate report on Corporate Governance compliance and a Management Discussion and
Analysis Report as stipulated by SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 forms part of this Annual Report along with the required Certificate
from a Practising Company Secretary regarding compliance of the conditions of Corporate
Governance as stipulated.
In compliance with Corporate Governance requirements, 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 March 31, 2017 as stipulated
under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 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, is 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) (Rs) of the Companies Act, 2013 in
Form AOC-2 is not applicable.
Significant regulators or courts or tribunals impacting the going concern status of the
There are no significant and material orders Regulators or Courts or Tribunals which
would impact the going concern status and the Company's future operations.
Your Company has taken appropriate insurance for all assets against foreseeable perils.
Quality, Health, Safety and Environment:
At Adani Ports and Special Economic Zone Limited (APSEZL), Quality, Health, Safety and
Environmental (QHSE) responsibilities are integral to operations. Your Company has
acquired International Standards ISO 9001:2015, ISO 14001:2004, OHSAS 18001:2007, ISO
28000:2007 certifications specifying the requirements for an Integrated Management System
(IMS) as part of its objective to improve quality, health, safety and environment in the
Apart from the ISO certification your company has adopted its own Safety Management
System (SMS) which is based on the philosophy that safety is primarily line management's
responsibility. The SMS is divided into 20 elements, with each element being owned by an
element owner who is from the line management at Port. These element owners are
accountable for implementation, monitoring and sustenance of their respective element.
The organization has revisited its OHS Vision, Mission statements and Life Saving Rules
which are non-negotiable, thereby treating "Safety" as a Value and not a
priority. The QHSE policy, OHS vision and mission and Life Saving Rules have been
communicated to all the stakeholders. Further, to give impetus to organization's HSE &
well-being, messages have been issued by the senior leadership team reemphasizing the
Safety First culture.
The Company has taken following major initiatives to advance the QHSE commitment:
Significant Safety Initiatives:
1. Successfully completed IMS certification for Adani Ports / Terminals at Dahej,
Dhamra, Goa and Tuna. Recertification completed for Mundra and Hazira Ports.
2. Business wide implementation of Adani Group Safety Management System (SMS). Adani
Port is harbinger and amongst other businesses to achieve Level 1 of SMS. first
3. Have clocked more than 82 million man hours, inducted more than 27,000 workers and
trained more than 16,000 workers and employees.
4. Online Quiz competition What Went Wrong (WWW), based on the learning's from
previous incidents at Ports so as to spread the awareness about the root cause of
incidents and corrective and preventive actions to be taken to prevent recurrence. of
their appointment at every AGM) for
5. Engaged world leaders like DuPont, Chill worth at Hazira and Mundra respectively to
assess the gaps in Liquid Terminals in implementation of operational procedures and action
plan to bridge the gaps.
Your Company acknowledges its responsibility towards the Environment and has initiated
numerous initiatives to reduce impact on Environment. The Company has developed a vision
for Zero Waste and is working towards making APSEZ - a Zero Waste Company. APSEZ has taken
several initiatives at various port locations by focusing on 5R principles of waste
management i.e. Reduce, Reuse, Reprocess, Recycle and Recover.
Entire treated sewage is reused for horticulture purpose at all sites and kitchen /
food waste generated at Mundra Port, Hazira Port, Tuna Port and Dahej Port is converted to
manure which is used for horticulture requirements. Paperless drive initiated at Mundra
has reduced printing paper consumption by over 90%.
At Dhamra, waste paper is recycled to produce notepads. Under "Plastic free"
drive across Mundra, Dhamra, Goa, Kattupalli and Tuna ports, alternative solutions are
provided and in situations where use of plastic is unavoidable, it is ensured that it is
collected and sent onward for recycling.
Various activities are initiated on pilot scale for water conservation which include
installation of water maker (produces water from atmospheric moisture), replacement of
conventional urinal pots by water free urinals, flow reducers in water taps etc.
The Company has come out with its first sustainability report as per GRI-G4 guidelines.
The Company has evolved
Sustainability Charter for continuous improvement of sustainability performance.
Auditors & Auditors' Report:
As per Section 139 of the Companies Act, 2013, read with the Companies (Audit and
Auditors) Rules, 2014, the term of M/s. S R B C & CO LLP, Chartered Accountants (Firm
Registration No.: 324982E / E300003) as the Statutory Auditors of the Company expires at
the conclusion of the ensuing Annual General Meeting (AGM) of the Company.
The Board of Directors of the Company at its meeting held on May 24, 2017, on the
recommendation of the Audit Committee, has made its recommendation for appointment of M/s.
Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No
117366W/W-100018), as the Statutory Auditors of the Company for a term of five consecutive
years, from the conclusion of 18th AGM of the Company till the conclusion of 23rd AGM to
be held in year 2022 (subject to approval ratification of shareholders of the Company.
The Company has received a certificate that they satisfy the criteria provided under
Section 141 of the Companies Act, 2013 and that the appointment, if made, shall be in
accordance with the applicable provisions of the Companies Act, 2013 and rules framed
Notes to the financial statements referred in the Auditors Report are self-explanatory
and therefore do not call for any comments under Section 134 of the Companies Act, 2013.
Secretarial Audit Report:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the
rules made thereunder, your Company had appointed Mr. Ashwin Shah, Practising Company
Secretary to undertake the Secretarial Audit of the Company. The Secretarial Audit Report
for financial year 2016-17 is annexed which forms part of this report as Annexure-B.
There were no qualifications, reservation or adverse remarks in the Secretarial Audit
Report of the Company.
Information Technology- an enabler for Growth:
Ports and logistics is a critical industry and is hugely be impacted by the evolution
of emerging and disruptive technologies. Knowing this and keeping up with the business
growth and expansion, your company in 2016-17 has initiated its journey towards building a
robust and scalable enterprise-wide IT infrastructure.
To manage the technology obsolesce risk, the company embarked on the journey to upgrade
and reform the existing technology stack. In addition, the focus was on to ensure that IT
skills and capabilities are in place to meet the business needs and create an IT
governance structure to ensure cost efficiency and continuous improvement in IT service
The company has initiated work towards adopting emerging technologies like
Internet-of-Things (IOT) with value added service such as analytics to improve overall
operational intelligence and produce better business outcomes. Port Community System is
being developed as a digital solution for port stakeholders so that they are able to
seamlessly perform all their activities from the confines of their office premises either
through Web or a Mobile platform.
The strategic direction is to reduce manual intervention through self-service, provide
intelligence to tailor actions based on events and data and thereby make the best use of
the resources. The aim is to realise the benefits of safety, reliability, efficiency and
reduced human error.
Awards, Certifications and Accreditations:
Dun and Bradstreet - India's Leading Infrastructure Company Port Category - Infra
Sea Port of the Year Private at Logistic Asia Award 2016. Sea Port of the Year
Liquid Terminal at Logistic Asia Award 2016.
Samudra Manthan Awards 2016 for Private Port of the Year. Container Handling Port of
the year at 7th all India Maritime and Logistics Awards.
Private Port/Terminal of the Year Award at India Seatrade Award 2016.
Best Port of the year (Non Containerized) Award at India Maritime Awards.
Best Port of the year (Containerised) Gujarat Star Awards. Won Gold in "1st Annual
EKDKN Exceed Award 2017". MALA Awards - Port/Maritime Personality of the year awarded
to a senior official of the Company.
Global Ports Forum award for Port/Terminal Visionary of The Year 2017 awarded to a
senior official of the Company.
Global Ports Forum award for Container Terminal Operator of the year 2017. Sliver
Trophy "FINEST INDIA SKILLS & TALENT AWARD 2017" category of
"Best Fire Safe Company Services" after its launch for the first time in
Golden Peacock Award for Corporate Social Responsibility for the year 2016.
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.
Your Directors are highly grateful for all the guidance, support and assistance
received from the Government of India, Government of Gujarat, Gujarat Maritime Board,
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 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: May 24, 2017
||Chairman & Managing Director