Adani Ports & Special Economic Zone Ltd
Chairman Speech
Dear Stakeholders,
The Webster definition of resilience is, 'the capability of a strained body to recover
its size and shape after deformation caused especially by compressive stress'. It's hard
to believe that it was less than three months ago, on March 11, 2020 that the World Health
Organization (WHO) declared the outbreak of COVID-19 as a pandemic, meaning COVID-19 has
spread worldwide. If there ever has been a time when the need for global resilience has
been critical, it is now.
The Power to Overcome
At times like this, one looks for inspiration. In this context Wayne Muller, a
well-known author, writes that for thousands of years, humankind has suffered famine, war,
plague, hunger, and countless injustices; it has experienced numberless births and deaths.
Each community of people has had to some way to speak about what sustained them or brought
them grace even in the midst of terrible sorrow. We have struggled to name this human
trait, the universal force that makes the grass improbably push its way through concrete,
the force that turns the earth, the energy that we seem to possess, blesses all life, the
essential presence in our deepest nature that can never be spoken of with perfect
accuracy, yet makes us what we are. History is one big story of human overcoming. It's
what we are born to do.
Decisive Governance
What we must realise is that there are no absolute right or wrong ideas. What is
required during an unprecedented, hard to model crisis like the COVID-19, is a government
that is willing to make decisions based on best available information at a given point of
time and is constantly adapting as new information becomes available. For this, the Indian
government and bureaucracy must be complimented. Countries with greater resources than
ours have struggled and, while our battle with the virus is far from over, I have no
hesitation in stating that had the decisions that got made been delayed, we could have
been facing an unmitigated disaster that would not just impact India but have global
ramifications. Yes, business has suffered immensely, lives and jobs have been lost, and
the migrant worker crisis saddened the entire nation, but the consequences of the unknown
alternates would be far grimmer. What the leaders of our nation, the doctors, the
healthcare workers, the police, the army, the small street side vendors, and the citizens
have done to support each other, is truly what defines India and its resiliency. Add to
this the fact that the government is now able to carry out direct benefits transfer as a
result of the integrated approach it has built through the Jan Dhan, Aadhaar and Mobile
linking systems and we start seeing the benefits of the government's that had the vision
to put in place the infrastructure we need to be able to handle such a crisis.
The Possibilities
Sitting where we are today, I can say that history is in process of being scripted. I
will be the first to admit that I have no way of predicting the short or mid-term possible
economic outcomes as a result of COVID-19. However, there cannot be any denying the fact
that India, over the next several decades, will be a market continuously on the up and one
that simply cannot be ignored. It will be one of the world's top consumption centres,
manufacturing and service hubs and a beacon of stable democratic governance. If there was
a time to make a bet on India, there may not be a better time than now. What I can predict
is that on the other side of this crisis will emerge massive new opportunities, will
emerge great new leaders, will emerge businesses, and will emerge a few stronger nations.
Those that succeed, will be the ones that understand that resilience is built on the other
side of the tunnel of crisis, and we are already getting ready for this.
Resilient Group Performance
I am pleased to report that each one of our six publicly traded companies has performed
well even as we started to confront the trying circumstances following the first few weeks
of 2020. While we may have to do need-based course correction in our strategies in the
wake of the challenge that we are facing, the roadmap remains clear. Our businesses are
closely aligned to the lifeline of the economy, providing essential services to enhance
the quality of life of citizens and addressing critical national infrastructure
priorities. We look at our Group companies as individual growth drivers that complement
each other's strengths.
Any shock to a system always helps drive home some key points, and what the Indian
businesses have learnt over the past few years and most certainly post COVID-19, is the
value of an optimal, and perhaps for some sectors, a conservative capital structure as
well as the criticality to have systematic risk mitigation plans in place. Both, optimal
capital structures and risk mitigation is a part of the maturing of the business
philosophies as they grow in size, and lays the foundation for stability as well as
consistent value creation.
At the Group level, our focus is on optimising capital utilisation, redesigning the
organisational structure to minimise risk in our businesses and funding operations in
phases. I am happy to share that during the year, the Group has been able to bring
strategic global equity partners in Adani Gas Ltd., Adani Green Energy Ltd and Adani
Mumbai Electricity Ltd. The total investment is $1.6 billion; and will help drive future
growth of our businesses. It is also pertinent to mention that AEML (part of Adani
Transmission) recently completed an investment grade, $1 billion bond issuance, a first by
a private integrated utility from India. The issue generated significant interest from
international investors and was oversubscribed 5.9 times. I must also mention here that
APSEZ raised $750 million by selling overseas bonds, the proceeds from which would be used
for fund expansion and further reduce the cost of debt and progressively deleverage the
balance sheet. In the preceding 12 months, the Group has successfully placed seven bonds
in the international markets, totaling to $4.26 billion.
APSEZ Continues to Execute on its Strategy
APSEZ as the country's largest port player continued its steady journey in enhancing
market share. Notwithstanding macro challenges and a rather sluggish demand environment
for the entire reporting year, we accomplished a year-on-year cargo volume of 223 MMT, a
growth of 7%. Our container volume grew by 8%, coal by 5% and liquid by 16%. The broad
strategy of making our cargo mix more balanced continues to be executed effectively.
The Company's resilience to withstand headwinds is vindicated by its long-term
contracts that extend up to five years or more to provide adequate cargo visibility. I am
happy to state that during the year, the volume of such contracts constituted 60% of total
volumes at Adani Ports thereby making us less susceptible to short-term demand volatility.
APSEZ has also continued to strengthen its capital management programme and the focus
is on reducing interest costs, elongating maturities and optimising capital structure.
This ensures highest growth adjusted return on capital employed (ROCE) amongst global
peers. Maintaining investment grade (IG) rating is paramount and forms the guiding
principle, while leveraging our balance sheet.
Acquisitions and Diversification
Our targeted acquisition strategy continues as we expand geographically as well as
integrate vertically. We expect to complete the planned acquisitions of Dighi and
Krishnapatnam ports by the third quarter of FY21. Our acquisitions will help accelerate
our stride towards our FY25 vision of handling 400 MMT of cargo. We are also taking every
feasible strategy to diversify our portfolio in these uncertain times and our
commissioning of India's Mundra LNG and LPG terminals validate this reality. When the
economy gradually picks up momentum, we will steadily ramp up volumes, rationalise our
cost structure and sharpen our focus on addressing customer needs. APSEZ expects to
continue to enhance shareholder return through better capital allocation, cost
rationalisation and going from being a dedicated ports player to an end-to-end logistics
player.
APSEZ also continues to diversify, invest and grow its logistics business to provide
comprehensive end-to-end solutions to its customers and bringing the port gate and
customer gate closer. During the year, APSEZ acquired B2B logistics, bought new rakes and
invested in warehouses to work closer with customers and become an intrinsic and important
part of their supply chain. The continuous and rapid investment in the logistics space
will transform APSEZ from a port centric business to a transport and logistics platform.
Environment, Social, and Governance (ESG) Approach
Along with focus on the financial and operational performance, APSEZ is equally
committed to strengthening its ESG performance across the operational ecosystem. We have
embedded the ESG framework to our core philosophy of value creation keeping the interests
of investors, community, and the environment in focus. Our sustainability roadmap is based
on formulating appropriate policies, conforming to regulatory norms, making regular
disclosures, setting targets for minimising our environmental footprint and strengthening
corporate governance to meet those targets. Our business model is closely attuned to three
primary focus areas, which are reducing carbon emission, resource management and waste
management. Our integrated waste management encompasses the 5R (Reduce, Reuse, Reprocess,
Recycle, Recover) Principle. Efficient use of water and energy from cleaner sources,
reduction of emission levels and ensuring zero tolerance for fatalities at our ports
continue to be our top priorities.
Group's Sustainability Journey
Our journey towards sustainability accelerated over the past 12 months. We are now
leading the clean energy transformation taking place not just in India, but globally, and
our Group is building one of the largest integrated energy portfolios. Our vision is to
become the world's largest solar power company by FY25, and the largest renewable power
company by FY30. I must mention here that our Group and total signed definitive agreements
to deepen our existing partnership and commitment for developing multi-energy offerings
for the Indian energy market. We are fully committed to supporting our nation in
diversifying its energy mix through partnerships in natural gas and solar energy.
Growth with Goodness
We, at the Adani Parivar, are the COVID-19 battle unitedly. Our Foundation has
contributed Rs 100 crore to the Prime Minister's Citizen Assistance and Relief in
Emergency Situations Fund (PM CARES Fund). I am equally grateful to our workforce in India
for contributing Rs 4 crore for the battle against COVID-19. It is because of the
solidarity demonstrated by this workforce of over 17,000 people that our Foundation could
add another Rs 4 crore, collectively contributing another Rs 8 crore towards COVID-19
relief projects in India. As a responsible corporate, we will continue to stand by the
nation in various capacities in this hour of need. On that note, I must also take this
opportunity to thank our teams for the following measures:
Adani Foundation contributed Rs 5 crore to the Gujarat CM-Relief Fund and Rs 1
crore to the Maharashtra CM Relief Fund; we have also contributed to Kattupalli District
Collector COVID-19 Fund and the Bhadra District Administration.
The Foundation is also contributing to the CM-Relief Funds of many other states
such as Kerala, Jharkhand, Andhra Pradesh.
Women cooperatives aided by Adani Saksham produced more than 1.2 lakh masks to
help economically disadvantaged sections of the population.
Gujarat Adani Institute of Medical Sciences (GAIMS) is the only hospital
equipped for handling COVID-19 cases in Kutch, India's largest district.
In times such as this the spirit and compassion of our people reinstates my belief in
our core philosophy of Growth with Goodness. Let all of us contribute to help our nation
rise above this crisis. It may take time, but there is ample optimism to show that it is
possible.
Together, we will stay resilient and hopeful in these testing times.
Gautam Adani
Adani Ports & Special Economic Zone Ltd
Directors Reports
Dear Shareholders,
Your Directors are pleased to present the 21st Annual Report along with the audited
financial statements of your Company for the financial year ended on March 31, 2020.
Financial Performance
The audited financial statements of the Company as on March 31, 2020 are 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 ("Act").
The summarised financial highlight is depicted below:
|
|
|
|
(Rs in crore) |
|
Consolidated |
Standalone |
Particulars |
|
|
|
|
|
2019-20 |
2018-19 |
2019-20 |
2018-19 |
Revenue from operations |
11,873.07 |
10,925.44 |
4,643.28 |
5,336.38 |
Other Income |
1,861.35 |
1,362.34 |
2,902.97 |
2,342.90 |
Total Income |
13,734.42 |
12,287.78 |
7,546.25 |
7,679.28 |
Expenditure other than Depreciation and Finance cost |
4,307.68 |
3,857.96 |
1,627.64 |
1,552.34 |
Depreciation and Amortisation Expenses |
1,680.28 |
1,373.48 |
553.29 |
474.21 |
Foreign Exchange (Gain) / Loss (net) |
1,626.38 |
475.92 |
1,581.71 |
445.35 |
Finance Cost |
|
|
|
|
- Interest and Bank Charges |
1,950.64 |
1,428.30 |
1,878.55 |
1,477.22 |
- Derivative (Gain)/Loss |
(137.50) |
(43.11) |
(126.67) |
(55.38) |
Total Expenditure |
9,427.48 |
7,092.55 |
5,514.52 |
3,893.74 |
Profit before share of profit/ (Loss) from joint ventures, exceptional items and
tax |
4,306.94 |
5,195.23 |
2,031.73 |
3,785.54 |
Share of loss from joint ventures |
(4.39) |
(0.06) |
- |
- |
Profit before exceptional items and tax |
4,302.55 |
5,195.17 |
2,031.73 |
3,785.54 |
Add/(Less):- Exceptional Items |
(58.63) |
(68.95) |
- |
(121.90) |
Total Tax Expense |
459.39 |
1,081.47 |
97.48 |
1,025.92 |
Profit for the year |
3,784.53 |
4,044.75 |
1,934.25 |
2,637.72 |
Other Comprehensive income (net of tax) |
36.62 |
15.41 |
11.31 |
18.82 |
Total Comprehensive Income for the year (net of tax) |
3,821.15 |
4,060.16 |
1,945.56 |
2,656.54 |
Attributable to: |
|
|
|
|
Equity holders of the parent |
3,800.19 |
4,006.07 |
- |
- |
Non-controlling interests |
20.96 |
54.09 |
- |
- |
There are no material changes and commitments affecting the financial position of the
Company between the end the financial year and the date of this report.
Performance Highlights
Your Company handled record cargo throughput of 223 MMT in FY 2019-20. 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 Hazira, Tuna, Dhamra, Murmugao, Vizag, Ennore and Kattupalli have also
performed well.
The key aspects of your Company's consolidated performance during the financial year
2019-are as follows:
Handled cargo of 223 MMT, a growth of 7% YOY surpassing all India cargo growth
of 5.4%.
Container volume crossed 6.25 million TEUs an increase of 8% on YOY basis.
Consolidated revenue from operations stood at Rs 11,873.07 crore in FY
2019-20.
Profit after tax for the FY 2019-20 stood at Rs 3,784.53 crore.
The detailed operational performance of the Company has been comprehensively discussed
in the Management Discussion and Analysis Report which forms part of this Report.
COVID-19
Due to outbreak of COVID-19 globally and in India, the Company's management has made
initial assessment of likely adverse impact on business and financial risks on account of
COVID-19. It is well appreciated that the situation as well as its assessment is
continuously evolving and the way ahead is to avoid living in denial leading to acceptance
& pro-active measures. The Company's management currently believes that the impact is
likely to be short term in nature. Given the severity of impact, this financial year is
likely to get affected, but also given the measures from Government and inherent
resilience in Indian Economy, next year onwards are expected to show normal growth
scenarios. Accordingly, at present the management does not see any medium to long term
risks in the Company's ability to continue as a going concern and meeting its liabilities
as and when they fall due, and compliance with the debt covenants, as applicable.
Dividend
During the year under review, the Company has distributed an interim dividend of 160%
(Rs 3.20 per equity share of Rs 2 each) on the equity shares.
Your Directors wish to conserve resources for future expansion and growth of the
Company. Hence, your Directors have decided not to declare any further final dividend for
the year under review.
Your Directors have recommended 0.01% dividend on 0.01% Non-Cumulative Redeemable
Preference Shares of Rs 10 each for the financial year 2019-20.
The outgo on account of interim dividend is Rs 650.16 crore.
Transfer to Reserves
The Company proposes to transfer Rs 125.65 crore to Debenture Redemption Reserve out of
the amount available for appropriation.
Buy-back of Equity Share
In line with the Capital Allocation Policy, the Board, at its meeting held on June 4,
2019, approved a proposal for the Company to buy back its fully-paid-up equity shares of
face value Rs 2 each from the eligible equity shareholders of the Company for an amount
not exceeding Rs 1,960 crore. The buy-back offer comprised a purchase of 3,92,00,000
equity shares aggregating 1.89% of the paid-up equity share capital of the Company at a
price of Rs 500 per equity share. The buyback was offered to all eligible equity
shareholders of the Company as on the record date (i.e. June 21, 2019) on a proportionate
basis through the Tender offer' route. The Company concluded the buyback procedures
on September 30, 2019 and 3,92,00,000 equity shares were extinguished. The Company has
utilised securities premium and general reserve for the buyback of its shares. In
accordance with Section 69 of the Act, the Company has created a Capital Redemption
Reserve of Rs 7.84 crore equal to the nominal value of the shares bought back as an
appropriation from the general reserve.
US Bond Issuance - Rule 144A/Regulation S Offerings
During the year under review, your Company issued USD 750 million 4.375% Senior
Unsecured Notes due 2029 and USD 650 million 3.375% Senior Unsecured Notes due 2024. These
Notes are rated Baa3 (Stable) by Moody's, BBB- (Stable) by S&P and BBB- (Stable) by
Fitch.
The Company has announced the settlement of its cash tender offer for any and all of
its USD 650 million 3.50% Senior Notes due 2020, out of which USD 280,812,000 Notes were
redeemed. The balance USD 369,188,000 Notes were redeemed pursuant to the terms of the
trust deed dated July 29, 2015.
Redemption of Non-Cumulative Redeemable Preference Shares
During the year under review, your Company has redeemed 309,213 Non-Cumulative
Redeemable Preference Shares of Rs 10 each issued at premium of Rs 990 per share prior to
its maturity at net present value discounted @ 8%.
Fixed Deposits
During the year under review, your Company has not accepted any fixed deposits within
the meaning of Section 73 of the Act read with rules made there under.
Non-Convertible Debentures
During the year under review, your Company has issued 2,800 Rated, Listed, Secured
Redeemable Non-Convertible Debentures (NCDs) of face value of Rs 10,00,000 each
aggregating to Rs 280 crore on a 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 Act, with respect to a loan, guarantee, investment
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 Act. The details of
investments made during the year under review are disclosed in the financial statements.
Subsidiaries, Joint Ventures and Associate Companies
Your Company has 67 subsidiary companies (including step-down subsidiaries), 2 joint
ventures and 1 associate company as on March 31, 2020.
During the year under review, following changes have taken place in subsidiary/ step
down subsidiary companies:
Subsidiary Companies formed
Adani Pipelines Pvt. Ltd.
Adani Tracks Management Services Pvt. Ltd.
Bowen Rail Operations Pte Ltd, Singapore
Adani Bangladesh Ports Private Limited, Bangladesh
Step down Subsidiary Companies formed/ acquired
Adani Logistics Services Pvt. Ltd.
Adani Forwarding Agent Pvt. Ltd.
Adani Noble Pvt. Ltd.
Adani Cargo Logistics Pvt. Ltd.
Adani Logistics Infrastructure Pvt. Ltd.
Bowen Rail Company Pty Ltd, Australia
Pursuant to the provisions of Section 129, 134 and 136 of the Act read with rules made
thereunder and Regulation 33 of the SEBI Listing Regulations the Company has prepared
consolidated financial statements of the Company 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 Annual Report.
The annual financial statements and related detailed information of the subsidiary
companies shall be made available to the members 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 members
during working hours at the Company's registered office and that of the respective
subsidiary companies concerned. In accordance with Section 136 of the Act, 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. Pursuant to Section 134 of the Act read with rules made thereunder,
the 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
Mr. Bharat Sheth (DIN: 00022102) was appointed as an Additional Director and also an
Independent Director for period of three consecutive years w.e.f October 15, 2019, subject
to approval of members at the ensuing Annual General Meeting. He holds office upto the
ensuing Annual General Meeting.
Mr. Sanjay Lalbhai (DIN: 00008329) and Mrs. Radhika Haribhakti (DIN: 02409519) ceased
as an Independent Directors of the Company upon completion of term on August 8, 2019 and
March 31, 2020 respectively. The Company has received declarations from all the
Independent Directors of the Company confirming that they meet with the criteria of
independence as prescribed in Section 149(6) of the Act and Regulation 16(1)(b) of the
SEBI Listing Regulations and there has been no change in the circumstances which may
affect their status as Independent Director.
Pursuant to the requirements of the Act and Articles of Association of the Company, Mr.
Karan Adani (DIN: 03088095) 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 the Annual
General Meeting.
During the year under review, there has been no change in the Key Managerial Personnel.
Directors' Responsibility Statement
Pursuant to Section 134(5) of the Act, 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
judgements 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 March 31, 2020 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 Act 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 amended
/approved changes in Related Party Transaction 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 Act and SEBI Listing Regulations.
Number of Board Meetings
The Board of Directors met 8 (eight) 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 March 17, 2020, 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 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 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 and it covers 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 judgement, governance issues etc.
A structured questionnaire was circulated to the Board members in this connection. The
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 at the Independent Director's meeting held on March 17, 2020 and in the Board
meeting held on May 5, 2020.
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
https://www.adaniports.com/Investors/ Corporate-Governance.
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.
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. The major risks
identified by the businesses are systematically addressed through mitigation actions on a
continual basis.
Committees of Board
Details of various committees constituted by the Board of Directors as per the
provisions of the Act and SEBI Listing Regulations are given in the Corporate Governance
Report which forms part of this report.
Sustainability and Corporate Social Responsibility
The Company has constituted a Sustainability and Corporate Social Responsibility
Committee and has framed a Policy. The brief details of Committee are provided in the
Corporate Governance Report. The Annual Report on CSR activities is annexed and forms part
of this report. The policy is available on the website of the Company at https://
www.adaniports.com/Investors/Corporate-Governance.
Corporate Governance and Management Discussion and Analysis
Separate reports on Corporate Governance compliance and Management Discussion and
Analysis as stipulated by SEBI Listing Regulations 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 as per the SEBI Listing
Regulations, your Company has formulated and implemented a Code of Conduct 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, 2020 as stipulated
under Regulation 34 of SEBI Listing Regulations is annexed which forms part of this Annual
Report.
Prevention of Sexual Harassment at Workplace
As per the requirement of The Sexual Harassment of Women at Workplace (Prevention,
Prohibition & Redressal) Act, 2013 and rules made thereunder, your Company has
constituted Internal Complaints Committee 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 has not
entered into any transactions with related parties which could be considered material in
terms of Section 188 of the Act.
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 would be 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
Your Company has taken appropriate insurance for all assets against foreseeable perils.
Sustainability
Business sustainability is an important part of decision-making process for your
Company. Sustainability framework provides input to identify risks and opportunities and
formulate mitigation strategy. All the subsidiaries and joint ventures are also part of
the sustainability framework. This framework widely covers all the aspects of
Environmental, Social and Governance (ESG) right from assessing topics material to
business by considering risks, externalities, and stakeholders' concern; prioritised to be
relevant in short, recover in medium and resilient in long term. The entire process is
overseen by Board and other concerned committees for the long-term success of the
business.
Your Company believes stakeholder engagement finds its place at the core of business
strategies which thrives for inclusive development therefore the Company has outlined its
commitment in stakeholder engagement policy and developed the stakeholder engagement
procedure.
Your Company engages with national/international NGOs and Not-for-Profit organisations
to align its ESG performance to the global standard. Your Company discloses its climate
change and water security performance to CDP, Communications on Progress (COP) to UNGC,
and sustainability performance to GRI. We engage with RE 100 to set the renewable energy
targets, WRI/ WBCSD to adopt GHG protocols for GHG emission management, IUCN for
biodiversity management, World Economic Forum (WEF), Confederation of Indian Industries
(CII) for consulting services and policy advocacy. We have also set regional targets of
Sustainable Development Goals (SDGs) as per our business activities.
At Adani Ports and Special Economic Zone Ltd. (APSEZ), Quality, Health, Safety and
Environmental (QHSE) responsibilities are integral to its operations. Your Company has
been certified International Standards ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO
28000:2007 certifications meeting the requirements for an Integrated Management System
(IMS) as part of its objective to improve quality, health, safety and environment in the
work place.
Environmental
Your Company has taken several steps to become Green Port by Natural Capital Management
and adopting best practices across all the operational sites. We ensure compliance to
environment and related applicable regulations and continually improves its performance.
Energy is an important indicator for port operations as it contributes to GHG
emissions. Your Company is taking several initiatives for energy conservation through
various energy efficiency enhancement programmes, which not only results in environmental
benefits but also reduces the operational costs.
Your Company and other subsidiaries have almost doubled the renewable energy capacity
by installing 8.88 MW solar rooftop in FY20 increasing overall capacity to 19 MW. The
renewable energy share is 3.3% of energy mix which supports to the SDG target 7.2.1 of
Goal 7. Your Company and its subsidiaries have decreased its energy consumption by 4% and
intensity by 14% against revenue generated (INR in crore) which support to the SDG target
7.3.1 of Goal 7. Correspondingly reduced GHG emissions (Scope 1 & 2) by 1% and
intensity by 12% against revenue generated (INR in crore) which supports to the country's
NDC target of lower the emission intensity of GDP by 33-35% by 2030 below 2005 level. Your
Company has saved 15,320 tCO2e emissions through renewable energy projects during FY20.
Water is being an important resource; its management is always a key concern for the
Company. Your Company is putting best efforts for effective water management practices for
reduction in water consumptions and thereby reducing the water withdrawal as part of the
water management plan. Your company has created a sewage collection infrastructure at
Mundra & other two nearby villages and laid down pipeline to channelise 2.5 MLD
untreated sewage water to our treatment facilities in FY20. By this initiative, your
company is supporting to SDG target "6.3 Improve water quality by reducing
pollution" of Goal 6. Your company has carried out rain water harvesting at Dhamra
and Kattupalli sites and harvested rain water has been used for horticulture requirements.
Your Company and its subsidiaries have increased its water consumption by 8% and its
intensity has been decreased by 3% against revenue generated (INR in crore) than previous
year. However, fresh water withdrawal has been reduced by 2% compared to previous year.
528 ML of treated wastewater was reused in our operations.
The Company has developed a vision for "Zero Waste to landfill" and has taken
various initiative inline to 5 R's (Reduce, Reuse, Reprocess, Recycle, Recover) towards
making APSEZ a Zero Waste Company. The Company's wastes (Hazardous and Non-hazardous)
generated from our port sites have been decreased by 18% in FY 20. We have state-of-art
wastes management facility for collection segregation, storage and disposal. During FY20,
28% waste sell for recycle and 25% to reprocess, 34% sent for recovery as co-processing,
8% is reused within operation and maintenance activities, 2% sent for incineration and 3%
for landfilling.
The Company has created terrestrial green cover over an area of 745 hectares across all
ports, ICDs, and agri-logistics sites. The Company has completed the mangrove
afforestation in 2,889 hectares by 2018 and continuing mangrove conservation of 2,340
hectare at Mundra, Gujarat and 9 hectares at Dhamra, Odisha. A unique pilot project of
development of bio-shield for protection of coastal areas has been completed at Tankari
village Jambusar, Gujarat and a new bio-shield project has been initiated at Malpur
village, Jambusar, Gujarat.
Occupational Health and Safety
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 comprises 20 elements, with each element being owned by an element
owner who is from the line management at business site. These element owners are
accountable for implementation, monitoring and sustenance of their respective element.
Your Company aspires to be a globally admired Occupational, Health and Safety (OHS)
leader in infrastructure space. The 10 lifesaving safety rules are non-negotiable and
sacrosanct.
The HSE policy, OHS vision & mission and 10 Life Saving Rules have been
communicated to all the stakeholders. Further, to give impetus to organisation's HSE &
well-being, messages have been issued by the senior leadership team emphasising the
"Safety First" culture.
The Company has taken following major initiatives to advance the HSE commitment:
Significant Safety Initiatives
Successfully completed IMS surveillance audit for Ports / Terminals at Dahej,
Mundra, Dhamra, Goa, Hazira and Tuna.
Business wide implementation of Adani Group Safety Management System. Till date
1 Site is certified as Level 2, 5 Port Sites are certified as Level 1 and 3 Port Sites are
Level 0 certified.
Have clocked more than 84 million man hours, inducted more than 2,03,952 workers
and trained more than 1,69,344 workers and employees.
Have implemented online OHS ERP solution Adani Gensuite, through which any
employee / worker can report a safety concern using his / her mobile phone. In last two
and half years, more than 2,10,800 concerns have been reported across the Group through
Adani Gensuite. Out of this, around 1,18,200 concerns are reported by Adani Ports and
Logistics business.
Have implemented a Behavior Based Safety tool called - Suraksha Samwaad, wherein
the leaders interact with the workforce regularly to engage them on safety.
5 Task forces have been formed at Group, Business and Site levels to drive
Safety by engaging Line Management.
Auditors & Auditors' Report
Pursuant to the provisions of Section 139 of the Act read with rules made thereunder,
as amended, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firm
Registration No 117366W/W-100018), were appointed as Statutory Auditors of the Company to
hold office till the conclusion of the 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 2020-21.
The Notes to the financial statements referred in the Auditors Report are
self-explanatory. There are no qualifications or reservations, or adverse remarks or
disclaimers given by Statutory Auditors' of the Company and therefore do not call for any
comments under Section 134 of the Act. 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 Act read with the rules made
thereunder, your Company has reappointed Mr. Ashwin Shah, Practising Company Secretary to
undertake the Secretarial Audit of the Company. The Secretarial Audit Report for financial
year 2019-20 is annexed which forms part of this report as Annexure-B. There were no
qualifications, reservations, or adverse remarks in the Secretarial Audit Report of the
Company except delay in appointment of Independent Director. The Company has appointed
Independent Director on April 22, 2019 and has complied with the provisions of SEBI
Listing Regulations.
Reporting of Frauds by Auditors
During the year under review, neither the statutory auditors nor the secretarial
auditor has reported to the Audit Committee or the Board, under Section 143 (12) of the
Act, any instances of fraud committed against the Company by its officers or employees,
the details of which would need to be mentioned in the Board's Report.
Information Technology
Information plays an important role to enable efficient operations and trade
felicitation where technology drives unprecedented visibility and insights all while
operating rapidly and at scale. In the course of our growth journey it is imperative to
create distinct operational advantages using smart supply chain, plug-and-play networks
and speed as the fuel for the future.
Your Company is working with a long term macro objective of providing secure visibility
for all key stakeholders through an integrated single source of information to enable
clean views of various operational data elements. Through the transformation from the
traditional to digital operations APSEZ will be able to deploy leaner operations through
employee productivity increases, innovative gains with lower risk and overall better
decision making between silos of operational excellence. This transformation of operations
started with overhauling legacy systems and information to provide a unified view of
processes and data.
Another important goal of this digital transformation is to enhance the customer
experience, provide flexibility for innovations and transform the business model where
technology plays an important role of removing obstacles and enhancing the capabilities.
APSEZ is making significant investments in technology to be able to take the advantage of
the new opportunities in this digital era.
Particulars of Employees
The information required under Section 197 of the Act 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
Act 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 Act,
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 Act 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, Government of Gujarat, Gujarat Maritime Board,
Financial Institutions and Banks. Your Directors thank all members, 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 |
Place: Ahmedabad |
Chairman and Managing Director |
Date: May 5, 2020 |
(DIN: 00006273) |