Engineered for the
Adani Enterprises Limited Annual Report 2015-16 88 412 3 381 Coal handled Installed capacity of Volume of edible Volume of city (traded and mined) renewable energy in oil sold in 2015-16 gas distributed in in 2015-16 (MMT) 2015-16 (MW) (MMT) 2015-16 (MMSCM) 45,148 3,114 1,041 Revenue in 2015-16 EBIDTA in 2015-16 (Rs crore) (Rs crore) 2015-16 (Rs crore)
9.47 122 7 8 Earnings per share Book value per share EBIDTA margin in Return on Assets in in 2015-16 (Rs) as on March 31, 2015-16 (%) 2015-16 (%) 2016 (Rs crore)
India is among the fastest growing • In just 16 years, the Company economies in the world. The country’s emerged as the largest port company growth could be faster if larger in India.* investments were to be made in coal • In just seven years, the Company access and mining, energy generation, emerged as one of the largest power port infrastructure creation, food generating companies in India.* security and renewable energy. • Over the years, Adani Enterprises emerged as one of the largest Limited responded proactively to renewable power generating these national priorities. The Company companies in India. entered these spaces with a singular objective: to plug evident gaps and • In just nine years, the Company catalyse national progress. emerged as one of the largest providers of agri-storage solutions in India. These have been the results of the company’s nation-strengthening Demonstrating that when it comes to objective: servicing core national needs, Adani Enterprises possesses energy, expertise • In just 10 years, Adani Enterprises and enthusiasm. emerged among the world’s three
* Demerged into standalone listed companies in 2015-16
Content Corporate Overview 02 Our Businesses 06 Chairman’s Statement 12 Managing Director’s Review 14 Financial Performance 18 Business Model 20 Corporate Social Responsibility 21 Statutory Section 22 Financial Section 85 At Adani Enterprises Limited, we are present in diverse nation-critical business spaces like coal management, renewable energy, edible oil, agri-storage and city gas distribution. These address India’s growing appetite for thermal energy, clean energy, renewable energy, branded cooking media and food grain storage. As a result of proactive capacity creation, we have emerged as the largest player in each of these businesses within just two decades. As India reinforces its position as the fastest growing economy, we are driven by an even more ambitious 2020 vision.
Coal business Renewable energy Edible oil City gas distribution 200 MMT 10,000 MW 8 MMT 50 cities by 2020. of solar power by 2020. by 2021. by 2022. This relentless energy is encapsulating our ambition in four words. Engineered for the future. large companies. Engaged in a range of core sector businesses like coal trading and mining, renewable power, agri-commodities and city gas distribution. These businesses touch millions of lives every day across the country. These businesses are marked by proactive capacity creation. Shrinking commissioning tenures. Cutting-edge technologies. Low operating costs. Pan-India presence. Engineered for the future.
Our businesses
Coal Mining Solar power Edible oil Mineable reserves: 12 BnMT Generating capacity: 648 MW 12,000 TPD Location: India, Australia and Location: India Location: 16 locations in India Indonesia Production in 2015-16: 11 MMT Power generation in 2015-16: Edible oil sales in 2015-16: 3 MMT Recently completed
2 Adani Enterprises Limited 24th Annual Report 2015-16
Group overview Corporate overview Values Adani Enterprises Limited Adani Enterprises is one of Courage: We shall embrace new ideas is the flagship entity of and businesses the Adani Group, one of conglomerates with business Trust: We shall believe in our India’s largest business interests across – coal trading employees and other stakeholders conglomerates. The US$ 12 and mining, renewable energy Commitment: We shall stand by our generation, agri-storage promises and adhere to high standard interests across resources infrastructure and services of business (coal mining and trading), as well as edible oil and gas logistics (ports and logistics, distribution. This business Culture shipping and rail), energy mix - business-to-business Passion: Performing with enthusiasm (power generation and and business-to-consumer – is and energy transmission) and ancillary directed at enhancing access industries. Through these to basic services (electricity Results: Consistently achieving goals businesses, the Adani through timely coal availability), Integration: Working across functions Group is integrated to the creating a less polluted world, and businesses to create synergies core of the world’s largest delivering quality food grain Dedication: Working with commitment democracy, touching millions and providing healthy cooking in the pursuit of our aims of lives. media. In doing so, the Company Entrepreneurship: Seizing new contributes to create a better opportunities with initiative and world. ownership
75% Promoter’s equity holding (March 31, 2016)
13.81% Institutional holding (March 31, 2016)
3,365 Team size Agri-storage Gas distribution (March 31, 2016) Capacity: 8.5 lac MT Pipeline network: 5,350 kms Location: 13 locations in India Cities cover: Ahmedabad, Vadodara, Faridabad and Khurja Grains handled: Take or pay Gas distributed: 381 MMSCM 26,621 arrangement Enterprise Value as on March 31, 2016 (H crore)
3 4 Adani Enterprises Limited 24th Annual Report 2015-16
Adani Enterprises is a business conglomerate. Addressing diverse consumer needs. Touching lives everyday. Adani Enterprises is a wealth creator for its team, shareholders, Government and the Indian citizen.
Standing out • Adani Enterprises is India’s largest thermal coal importer • Adani Enterprises is India’s most successful and only • Adani Enterprises operates one of the country’s largest • Adani Enterprises’ Fortune brand is a market leader in the edible oil space • Adani Enterprises pioneered bulk food grain handling, storage and controlled-atmosphere apple storage technology • Adani Enterprises is one of the largest renewable power producers in India. • Adani Enterprises is a leading player in city gas distribution in India.
5 Coal mining and management
78 Coal trading volumes in 2015-16 (MMT) Coal trading Adani Enterprises has been India’s largest coal importer for nearly a decade. Its team Indonesia, South Africa and other countries feeding supplies to various pan-India customers.
The Company entered this business with the objective to plug the national demand-supply mismatch for thermal coal, a resource building block critical to the country’s economic 34 Market share in progress. India’s coal imports in 2015-16 (%) Mine development and operations Benchmark achievements Adani Enterprises is India’s largest and • Amongst the top three global coal traders operator structured with an integrated • Largest importer of thermal coal model. The Company enjoys a mine from Indonesia and South Africa developer and operator permit for coal • The largest coal handling agent in 18 mining in the Parsa East-Kente Basan Growth in Adani’s India mine in Chhattisgarh (estimated reserves coal trading • Five time winner of Coal Importer of of 452 MMT). The Company provides the volumes (5-year CAGR, %) the Year award at different forums (on-site) and transportation to designated consumption centres. The Company has licences for two other MDO blocks to be progressively commissioned.
6 Adani Enterprises Limited 24th Annual Report 2015-16
Chattisgarh Parsa-Kente (RRVUNL) Parsa (RRVUNL) Kente Extension (RRVUNL) Block area (sq km) 27.67 12.52 17.00 Mineable reserves (mn MT) 452 184 230 (tentative) Peak capacity (MMTPA) 15 5 7 Production commencement February 2013 2019 2019
Coal global assets Benchmark achievements Adani Enterprises is also engaged in coal mining • Successfully operating MDO contract in Surguja through the ownership of a mine in Indonesia cluster at Parsa with rated annual capacity of 27 MMT (Bunyu, prognosticated thermal coal reserves of 185 • Bestowed prestigious awards such as Golden Peacock MMT). The Company is in the development stage of award for innovation, Global CSR award and various Carmichael, the world’s single largest coal tenement awards for safety initiatives in FY2015-16 comprising over 11 billion MT of resources. The Company intends to produce 100 million tonnes of • Bunyu operations recognised by Wood McKenzie as coal across its global mining assets by 2020. the lowest operating cost coal mine in Indonesia
7 Agri-business
3 Sales of Adani’s edible oil in 2015-16(MMT)
The Company ventured into the agri and horticulture storage business space to plug the of India’s farm produce. Consider this: in 2010, India produced 68 million tonnes of fruit and 129 million tonnes of vegetables, the second largest producer in the world. About 30% of 19 Adani’s share of the fruit and vegetables were wasted. India wasted an estimated 1.94 lakh MT of food grain India’s packed between 2005 and March 2013. edible oil market in 2015-16 (%)
Adani Enterprises entered the edible oil business when India was largely import- dependent. Edible oil ranked third after crude oil, petroleum products and gold in India’s import 20 list. Even today, about 70% of the annual edible Growth in Adani’s oil demand of 20-21 million tonnes is addressed edible oil revenues through imports. over 2014-15 (%)
Adani Enterprises (through Adani Wilmar Limited, Adani Agri Logistics Limited and Adani Agri Fresh Limited) is one of the most exciting agro-commodity sector proxies.
Adani Wilmar owns the ‘Fortune’ edible oil brand, 8 Growth in Adani’s India’s edible oil market leader with a 19% share edible oil revenues (consumer pack). It also owns and operates one (5-year CAGR, %) of the country’s largest edible oil capacities
8 Adani Enterprises Limited 24th Annual Report 2015-16
with manufacturing facilities across Corporation of India and various of export-import, domestic cargo 16 strategic pan-India locations. state governments. The Company wagons). The Company possesses the largest grain storage infrastructure for distribution network among all Adani Agri Fresh established its Food Corporation of India in 2007. branded edible oil players in India presence in the horticulture sector It commissioned grain silos in Moga comprising more than 96 stock through world-class packaging (Punjab) and Kaithal (Haryana) to points, 5,000 distributors and more operations and storage facilities. store grain; it established receiving than one million outlets pan-India These services ensure the selection silos in Mumbai, Chennai, Bengaluru, (about 10% of the industry’s total of only the highest grade of Kolkata and Coimbatore connected retail penetration). It also possesses horticultural products for storage and through Adani’s dedicated railway the largest brands portfolio in India’s consumption. It pioneered controlled- rakes. edible oil industry comprising brands atmosphere storage technology like Fortune, King’s, Bullet, Raag, The Company provides pan-India for apples, transforming the apple Avsar, Pilaf, Jubilee, A-Kote, Fryola, multi-modal logistics services growing and storage ecosystem of Alpha and Aadhaar. (movement of goods in containers by Himachal Pradesh while creating train, road and sea). The Company is a popular ‘Farm-Pik’ brand. The Adani Agri Logistics is a pioneer in developing logistics parks to provide Company’s operations also cover the area of bulk handling, storage ground facilities (aggregation, other horticulture products like and transportation (distribution) of warehousing, holding, inspection, citrus fruits, litchi, cherry, grape and food grains, providing an end-to-end pomegranate. bulk supply chain solution to Food
9 Renewable energy
412 India is the world’s fastest growing economy. India does not produce adequate energy to Renewable power generation capacity as on fuel reserves and environmental concerns, renewable energy appears to be the safest March 31, 2016 long-term solution. Indian Govt. has set a target to install 175GW of Renewable power (MW) capacity by 2022. Out of which, 100 GW will be Solar PV and 60 GW will be Wind power.
In line with this, the Company invested in a 40 MW solar power plant in Bitta (Gujarat) marking Adani Enterprises’ major extension into the renewable energy sector 8 (December 2011). Market share in India’s solar The Company has since raised its benchmark: its 648 power space in MW solar power plant in Tamil Nadu is the largest 2015-16 (%) single location solar power plant in the world (360 MW commissioned by March 31, 2016, 288 MW of remaining capacity in Tamil Nadu is already under commissioning).
The Company has also forayed into Wind Power and has commissioned 12MW of Wind Power in Madhya Pradesh by March 31, 2016. Incremental 188MW of Wind Power projects are under various stages of construction in high 115 Growth in solar wind states of Andhra Pradesh and Rajasthan. power generation The Company has set a target to install 10,000 MW of capacity (3-year CAGR) (%) Renewable Power capacity by 2022.
10 Adani Enterprises Limited 24th Annual Report 2015-16
City gas distribution
222,510 City gas customers (not including vehicles) as on March 31, 2016
Even as a city gas distribution network holds the key to addressing the energy needs of because of a scarcity of indigenous gas and other infrastructure hurdles in laying pipelines in crowded localities. The result: against 468 Class 1 urban areas and towns 381 Gas distributed by (Census 2011), only 44 cities and towns in India are covered under such a network. Adani in 2015-16 (MMSCM) Adani Enterprises, through subsidiary Adani Gas, has emerged as one of the largest private players in the city gas distribution space in India.
The Company’s network pipeline (in excess of 5,000 kms) provides piped natural gas (PNG) to residential, 22 Growth in Adani’s commercial and industrial consumers and compressed EBIDTA from gas natural gas (CNG) to the transport sector in distribution over Ahmedabad, Vadodara, Faridabad and Khurja. 2014-15 (%)
By allocating 100% domestic natural gas, the Government enhanced the focus on CGD, especially for the transport and domestic segments. 19 Growth in Adani’s EBIDTA from gas distribution (3-year CAGR, %)
11 Chairman’s statement
“DOUBT IS NOT A PLEASANT CONDITION, BUT CERTAINTY IS ABSURD” WAS SAID BY VOLTAIRE, THE FAMOUS FRENCH PHILOSOPHER. TODAY, WHILE THE GLOBAL MARKETS SEEK SOME DEGREE OF CERTAINTY WITHIN A HIGHLY VOLATILE ENVIRONMENT, INDIA HAS EMERGED AS A BEACON OF HOPE, ESPECIALLY AS THE OTHER BRIC NATIONS START TO SLOW DOWN OR STAY IN RECESSION. THE NEXT DECADE COULD WELL BE INDIA’S DECADE IN THE WORLD.
Adani Enterprises Limited the fact that coal remains a was established with the critical commodity to serve objective to service sectors our national interests to get of national interest through competitively priced power presence in critical and often to over 300 million people under penetrated spaces. who do not have access to The businesses that currently electricity. Our Government constitute Adani Enterprise has done an outstanding are coal trading and mining, job of putting appropriate renewable energy, agri- policies in place to encourage storage infrastructure and the coal and the coal mining services, edible oil and city gas sector while balancing it with distribution. Adani Enterprises charges that help subsidise has focused on incubating other greener sources of businesses and driving the power generation as India scale necessary to make it leads a global transition to self sustaining and at the containing carbon foot-print. right time unlock shareholder Our coal trading and coal value by spinning it off into mining operations are independent entities. Adani Ports, Adani Power and Adani integrated capabilities, “pit to Transmission are all successful port to customer”. Our coal examples of this strategy. trading arm and our coal mine Today, although anything development and operations related to coal stands on the (MDO) businesses are the wrong side of the commodity largest in the Indian private cycle and faces challenges sector. from environmental groups Over the past year solar power there cannot be denying business has emerged as
12 Adani Enterprises Limited 24th Annual Report 2015-16
Adani Enterprise’s newest and most is expected to provide additional pipelines (in excess of 5,000 kms) opportunities for this business. provides piped natural gas (PNG) to quickly and have just commissioned We also pioneered the storage of residential, commercial, industrial one of the world’s largest solar power Apples under controlled atmospheric customers and compressed plant of 648 MW (AC) capacity in conditions and fundamentally natural gas (CNG) to the transport Tamil Nadu. Besides this we have a altered the apple farming sector in sector in Ahmedabad, Vadodara, pipeline of over 1200 MW of wind Himachal Pradesh. The Company is Faridabad and Khurja. With the and solar projects in different stages increasing this storage capacity by of implementation. To backward 15% in 2016-17. increase city gas distribution to integrate with our generation 240 cities by 2022 from the current Edible oil remains the largest capacity, we are also building 44 geographical areas we are contributor to our agri business India’s largest solar photovoltaic proactively creating the necessary vertical and we continue to be the manufacturing facility with a infrastructure by building a network market leader in this sector. The capacity of 1.2 GW cells and modules of pipelines across seven cities Company possesses the largest in a joint venture with Indian Oil distribution network amongst all this plant will get commissioned Corporation. We are also drawing up branded edible oil players in India by December of 2016. This is yet plans to bid for another 10 cities with comprising of 93 stock points, over another testimony of our focus on the objective to continue to improve 5000 distributors and more than building domestic capabilities to one million outlets pan-India. With help reduce our nation’s dependence increasing disposable incomes, per While the business continues to on imports. Also, in line with our capita oil consumption has more perform strongly, our proud moments ambition to become one of the than doubled from 7 kgs in the mid- come from the stories we hear about largest renewable players in the eighties to 16 kgs today. Edible oil the lives we have the opportunity imports are expected to increase by to influence. Adani Foundation’s its-kind solar power park project over 1 million tonnes a year as India’s education programs have already and have signed a joint venture oil seeds production continues to touched the lives of over 150,000 agreement with the Rajasthan stagnate. We intend to capitalise young students, its healthcare government to commission a 10,000 on this opportunity by continuing programs touch the lives of over MW solar park by 2022. The park is 200,000 people every year, the expected to attract investments of capacities on coastal locations. We sustainable livelihood programs over H60,000 crores. are increasing capacities at our have made over 35,000 people and Our Agri business continues to grow their families self-reliant and the strongly and is a sector that we see Foundation has improved the lives at Hazira and Dhamra, In addition of over 500,000 people across 177 to oil, we are also setting up a rice villages by helping provide better methods for food storage and have bran solvent extraction plant and a roads, drinking water, and other commissioned in Madhya Pradesh packing plant in Chhattisgarh. An basic facilities. We feel privileged to an additional 3 lakh tonnes of agro essential part of this production will have been the change agents. storage capacity under a 30 year be to meet the soaring demand of The days ahead are exciting concession. We are also engaged in the heath based edible oils, Vivo for and I would like to thank our setting up a 75,000 tonne storage Diabetes care and Rice Bran Health customers, employees, shareholders, facility for the Food Corporation for cardiac care). government authorities, bankers of India at two additional Our city gas distribution business and the Board for making 2015-16 locations in Punjab and Bihar. The continues to expand aided another excellent year. recommendations of Shanta Kumar by softening commodity cycle, committee for the creation of 10 Gautam Adani particularly in crude oil. The million tonnes of silo infrastructure Chairman, Adani Group Company’s existing network of to enhance India’s food security
13 Managing Director’s review
At Adani Enterprises, the interplay of speed, scope and skill will accelerate the creation of core national assets.
Rajesh S Adani, Managing Director, Adani Enterprises Limited
The Company’s performance, Enterprises, we believe that this 2015-16 coal. proportion will sustain even as the country continues to invest The performance of the Company The Company’s other businesses aggressively in renewable energy, was subdued owing to a subdued (coal mining and gas distribution) securing prospects of robust coal reported healthy improvement. The demand. 2015-16. This reality translated into a Company’s India coal mining volumes increased 85% year-on-year following From a supply perspective, Coal over the previous year. the supply of about 5.5 million India production volumes will only
The Company’s coal trading volumes tonnes of washed coal to Rajasthan increase. The challenge going were 77.65 million tonnes in 2015-16. utilities. Even as the gas distribution ahead will not be coal availability However, the business was affected business volumes remained largely but logistics cost. Coal that is by a decline in realisations, EBIDTA delivered to consuming centres in some states (Kerala, Karnataka, from 17% to 23% which translated Tamil Nadu, Maharashtra, Rajasthan, into a healthy surplus. upper Gujarat) endure freight costs ranging between H2,200 and The coal vertical H2,500 per tonne. This makes it Coal is a proxy of global economic India’s dependence on coal as its more economical for coast-based progress. A drop in coal prices primary energy resource is likely to power plants or within 200 kms is an indication of an economic prevail. India is expected to grow of coastlines to import coal. More slowdown since coal accounts for its power generating capacity importantly, power plants based on about 40% of all power generation from 298 GW to 398 GW by 2022, low-ash thermal coal will also need in the world. riding the reality that thermal to import. In view of these realities, power constitutes about 72% of imported coal volumes are only India’s power generation. At Adani expected to increase, going forward.
14 Adani Enterprises Limited 24th Annual Report 2015-16
Natural Energy Agri resources By 2020, we expect to achieve our goal of 100 MMT through coal mining operations, making Adani Enterprises into one of the largest mining companies in the world.
In keeping with our commitment Our Indonesian mining operations we have a pipeline of about 1,200 to stay ahead of the curve, Adani continued to be healthy. We are MW of wind and solar power projects Enterprises is transforming its focusing on making this the world’s at different implementation stages. service solution – from an importer lowest cost coal mining facility, Besides, our vertically integrated of coal into an integrated coal capitalising on a strip ratio of 2.5 solar photovoltaic manufacturing management company. This means compared to the same in India being facility of 1.2 GW at Mundra that customers will need to tell us about 4. SEZ is progressing on schedule. the quantity, quality and landed Having made sizeable investments cost for their coal requirement and in mechanising operational commissioning this unit by the end we will source coal for their needs processes, we intend to strengthen from anywhere in the world through our intellectual capital, which we our solar ambition. any logistics mode. In doing so, we believe will enhance productivity and will provide our customers with In keeping with our ambition to optimise operational costs. an integrated coal management emerge as a dominant renewable solution, emerging as a one-stop By 2020, we expect to achieve player, we initiated an ambitious solution provider. our goal of 100 MMT through coal mining operations, making Adani solar power park. We signed a Own mining operations: The volume Enterprises into one of the largest joint venture agreement with growth that we reported in the mining companies in the world. the Rajasthan government to previous year is a precursor of things commission a 10,000 MW solar park as we operationalise MDO contracts. Our solar power business by 2022, the largest such proposed We completed the installation of the integrated facility in India. The park provides us with a unique edge in world’s largest solar power plant of is expected to attract investments capitalising on new opportunities, 648 MW in Tamil Nadu. Of this, 360 of over H60,000 crore comprising catalysing our growth in this MW of power is already operational, 5,000 MW generation projects and business. supplied to the state utility. Besides, a large unit to manufacture solar
15 modules, parts and equipment. We intend to capitalise on this Adani business a preferred grain opportunity through edible oil storage solution provider. In a Our agri-business volume-driven business where Edible oil: This is the largest ports. We are increasing capacities at incremental capacities enhance contributor to our agri business vertical. Our optimism related to this additional 3 lakh tonne agro storage business under a 30-year concession business is derived from growing at Hazira and Dhamra, increasing in Madhya Pradesh. We are engaged disposable incomes and increasing in setting up a storage facility oil consumption: per capita oil 23,000 TPD. Besides, we are setting (75,000 MT) for Food Corporation consumption increased from around up a rice bran solvent extraction of India at two additional Punjab 7 kgs in the mid-Eighties to 16 and Bihar locations. The Shanta plant in Chhattisgarh. kgs today. Edible oil imports are Kumar Committee recommended expected to increase by around 1 Food storage: the creation of 10 mn tonnes of silo mn tonnes a year, as India’s oil seeds handling and storage over infrastructure to enhance India’s production continues to stagnate. conventional facilities make this food security, which should open
MDO A large opportunity
Allocation/Auction in Phase I Reserves: 8.1 Bn MT Production FY 15: 54 MMT Peak Production: 217 MMTPA
Government sector Private sector Reserves: 6.2 Bn MT Reserves: 1.9 Bn MT Commercial mining Peak Production: 152 MMTPA Peak Production: 63 MMTPA
Additional future allocation/auction
MDO opportunity of >150 MMTPA by FY20 + Private + Commercial
Source: Ministry of Power
16 Adani Enterprises Limited 24th Annual Report 2015-16
attractive opportunities for this bidding with the objective to improve business.
Our city gas distribution Message to shareholders business The interplay of speed, scope Adani is building India’s A softening commodity cycle, and skill will make it possible to largest solar photovoltaic particularly in crude oil, facilitated create core national industrial manufacturing facility assets faster than prevailing with a capacity of 1.2 GW year under review. This increased benchmarks, enhancing value for our cells and modules at shareholders. Mundra SEZ. as business volumes remained Rajesh S. Adani stable. We are creating a network Managing Director of pipelines across seven cities Adani Enterprises Limited Adani pioneered the in joint venture with IOC Limited, storage of apples in while targeting another 10 cities for controlled conditions, altering the apple farming sector in Himachal Pradesh.
17 Financial performance* Adani Enterprises is a future-ready enterprise.
Revenue (H crore) EBIDTA (H crore) Net worth (H crore) (H crore) 13,308.37 25,727.81 2,220.77 65,519.85 23,757.19 1,948.05 21,458.64 56,225.86 10,539.85 1,839.21 19,471.85 1,612.98 47,351.63 45,147.61 39,903.77 6,897.69 13,415.71 1,041.12 5,545.96 3,113.80 12 12 12 12 13 13 13 13 15 15 15 15 14 14 14 14 16 16 16 16 2011- 2011- 2011- 2011- 2012- 2012- 2012- 2012- 2013- 2013- 2013- 2013- 2014- 2015- 2014- 2015- 2014- 2015- 2014- 2015-
18 Adani Enterprises Limited 24th Annual Report 2015-16