Adani Enterprises Limited

Financial Statement Analysis

Adani Enterprises
Limited

•2010007-Apoorva Uppalapu
•2010052-Pratik Gourab Paik
•2010053-Rajath Krishna G
•2010065-Shivam Naagar
•201070-Sourav Jain
3

Company Background
Adani Group is a diversified organization in India with combined market cap of
$21 Bn comprising 6 publicly traded companies. It has created world class
transport and utility infrastructure portfolio with a pan-India presence.

-Headquarters-Ahmedabad, Gujrat

-It is one of the leading business conglomerates and the largest integrated player
in infrastructure and energy space in India in the following sectors :- 

⊸ Resources (coal mining and trading) 

⊸ Logistics (ports, logistics, shipping and rail) 

⊸ Energy (renewable and thermal power generation, transmission and distribution) 

⊸ Agro (commodities, edible oil, food products, cold storage and grain silos)

⊸ Real Estate

⊸ Public Transport Infrastructure

⊸ Consumer Finance

⊸ Solar Manufacturing

⊸ Defense
4

Board Members
⊸ Board size and composition
8 Board members
-4 Independent and Non-Executive Directors (2018-2019 & 2019-2020)
-4 Non-Independent Directors (1 Independent Woman Director)
 

⊸ Mr. Gautam S Adani – Chairman 

⊸ Mr. Rajesh S Adani- Managing Director 

⊸ Mr. Pranav Adani- Director 

⊸ Mr. Vinay Prakash- Director 

⊸ Mr. Hemant M Nerurkar- Independent and Non-executive Director 

⊸ Mr. V Subramanian- Independent and Non-Executive Director 

⊸ Mrs. Vijay Laxmi Joshi- Independent and Non- Executive Director 

⊸ Mr. Narendra Mairpady- Independent and Non-Executive Director 

In 2017-2018 there were total 9 Directors which included the above and Mr. Berjis Desai

Education, Experience and Independence

Each Director may possess varied combination of skills among the following :-

⊸ -Business Leadership; Financial Expertise; Risk Management; Global Experience; Corporate Governance & ESG; Merger & Acquisition;
Technology & Innovation
 Changes in the Board size
In the past 3 years company has reduced the board size from 9 directors in 2017-2018 to 8
directors in 2018-2019.  

There is no change in the size of board from 2018-2019 to 2019-2020.

Compensation of the directors

Total Operating Revenue for these years :
(2019-2020) - 16,208.69 Crores 
(2018-2019) - 15,541.30 Crores 
Board (2017-2018) - 9,550 Crores

Members The Total compensation for the Directors and the Non-Executive & Independent Directors
for the years are :-
2019-2020 ~26 Cr = 0.16% of the Operating Revenue
2018-2019 ~25.8076 Cr = 0.166% of the Op Rev
2017-2018 ~25.95 Cr = 0.27% of the Operating Revenue

Board meetings
In the year 2019-2020 & 2018-2019 the directors met 5 times under review in each year. 
In the year 2017-2018 – The directors met 6 times under review 

All the directors have attended all the meetings held.

 Directorship in other companies
All the directors hold the directorship in other companies

Comply with independent and women directors

Yes, the company fulfills the rule laid in Companies Act 2013 regarding Independent and
women directors (At least 1 Woman Director and at least 2 Independent Directors 

Board
Members
 No of shares – 1099810083; Par Value – Rs. 1 per share. 
-Company did not issue any share during 2018-2020. 
-Company did not buy back any share during 2018-2020. 

Share Holding Pattern: 

a)Promoter – Indian (729526381 shares; 66.33%) & Foreign (94437100 shares; 8.59%) 
b)Public Shareholding – Institutions (240248641 shares; 21.84%) & Non-institutions
(35597961 shares; 3.24%) 
The share holding pattern remained same from 2018-2020 

Shareholder Shri Gautam S. Adani/Shri Rajesh S. Adani (on behalf of SBAFT) have pledged their
shareholding as security.  
s • 2019-20: 34.82% shares pledged to total shares 
• 2018-19: 20.21% shares pledged to total shares 
• 2017-18: 18.8% shares pledged to total shares 
The shares are listed on BSE & NSE. 

Market Price  
The book value of the shares is Rs. 34.2 

SL. No  Financial Year  High -NSE  Low - NSE  High -BSE  Low - BSE 
1  2019-20  261.1  113  261.1  113 
2  2018-19  236.65  100.85  236.7  101.05 
3  2017-18  223.5  104.8  223.35  105.1 
 AGM
SL. No  Financial Year  Date  Agenda 
1  2019-20  26 June, 2020 
th
Declaration of Dividend & answering to shareholder’s
queries 
2  2018-19  7th August, 2019  Declaration of Dividend & answering to shareholder’s
queries 
3  2017-18  7th August, 2018  Declaration of Dividend & Reappointment of
Directors. 

Shareholder DIVIDEND

s SL.
No 
Financial Year  Dividend Payout (in
crores) 
Income 
(in crores) 
% Income as
Dividend 
1  2019-20 (Interim)  132.59  697.81  19 
2  2018-19  53.04  486.36  10.9 
3  2017-18  53.04  194.16  27.3 
 The auditors have stayed the same for the 3 years 
 
Statutory Auditors
M/s. Shah Dhandharia & Co., Chartered Accountants (Firm Registration No. 118707W)
were appointed as Statutory Auditors of the Company to hold office till the calendar year
2022. 
Secretarial Auditors
Mr. Ashwin Shah, Practicing Company Secretary to undertake the Secretarial Audit of the
Company. 
Cost Audit Reports
M/s. K. V. Melwani & Associates, Practicing Cost Accountants to conduct audit of cost
records of Mining Activities of the Company. 

Auditing The Audit Committee -The Audit Committee acts as a link among the Management, the
Statutory Auditors, Internal Auditors, and the Board of Directors to oversee the financial
reporting process of the Company. 

The Auditor’s committee comprises of one Executive Promoter and the rest Non-Executive and
Independent Directors, which seems a good composition as audit committee should have independent
people as well who are seeing the work of the company properly.

Additional services provided by the members of Auditing Committee  

Mr. V Subramanian is part of Stakeholder’s relationship committee (Chairperson)  
Mr. Hemant Nerurkar is member of CSR Committee as well. 
 Renumeration

Name  Category  Committee Meeting Pay 

Mr. Hemant Nerurkar  Non-Executive and 3.750 Lacs 
independent 
Mr. V Subramanian  Non-Executive and 4.00 Lacs 
independent 
Mrs. Vijay Laxmi Joshi  Non-Executive and 3.00 Lacs 
independent 
The Executive and Promoter group Directors are not paid for attending meetings of the
Board of Directors and its committees. So, Mr. Rajesh S Adani is not in the table. 
Auditing  
Mr. Narendra Mairpady is not in this committee 

Auditors remarks on accounting

Due to certain disputes income tax, sales tax/VAT, service tax, excise tax, stamp duty hav
not been deposited by the company

Because of the inherent limitations of internal financial controls over financial reporting,
including the possibility of collusion or improper management override of controls, material
misstatements due to error or fraud may occur and not be detected
 Liquidity Ratio
Current Ratio 90% 73% 102%
Quick Assets 6890.33 8299.1 7603.87
Quick ratio 76% 60% 85%

Profitability Ratio

NP Margin 2% 3% 4%
OP Margin 5% 4% 4%

Ratio ROCE -14% -7% -15%

Analyis
Return on equity 5% 15% 19%

Return on Total Assets 20% 57% 44%

Return on Fixed Assets 21% 29% 22%
Turnover Ratio
Inventory turnover ratio 10.2462493 9.55828927 9.31069153

Fixed Assets Turnover  1.70125997 3.62362668 3.4093197

Current Assets Turnover 1.16682977 1.52351049 1.77506149

Debt Equity 0.44021083 0.32285568 0.30293273

Interest Coverage 1.73375854 2.11521848 2.71704155

 Interpretation
Liquidity ratios

⊸ In the FY 2017-18 the company has not put efforts to maintain the industry average current ratio. Being a manufacturing driven enterprise, it

should have a satisfactory working capital to repay its short-term obligation. In the FY 2018-19 the trend has been the same. However, in the

FY 2019-20 the current ratio has been at part with the current liabilities due to the repayment in short term borrowing and debt obligation.

⊸ Quick ration on the other hand satisfies the industry average. In the three years it has been just below the 100 percent ratio and continuing the

trend.

Profitability ratios

⊸ The growth has been positive but not substantial. Both operating profit and net profit ratio has shown an upward trend from the financial year

2017-18 to 2019-20. A major part of increase in the ratio is from the FY 2018-19 to 2019 -20, which is due the reduction of finance cost such

as interest income and other parts.

Return on Net worth

⊸ The return on net worth is showing an increasing trend being the owners’ equity remaining constant throughout the three years and the

revenue from operation changing drastically int these years. The ratio is depending more on the revenue than on the net worth.
Return in Total Assets

⊸ The total assets of the firm has decreased over the years being investment sold and the revenue from operations is increasing. This

shows that the firm is efficiently managing the assets of the business to generate the return because the ratios are increasing YOY.

Turnover Ratio

⊸ The inventory turnover in the FY 2017-18 was better than the after years. The turnover in the FY 2018-19 and 2019-20 has been the

same as there has been an increased in the inventory during the year also the revenue are also increasing.

⊸ The fixed assets and current assets turnover ratio has increased in the FY 2019-20 because there is a reduction in the fixed assets in both

the years. Due to which it has affect the ratio positively in these years.

Debt to Equity Ratio

⊸ These ratio shows that the corporate in non-levered. It is more dependent on the owners’ equity to fund its assets. This reduce the risk of

paying of long-term obligation in the time of liquidation of the company. The company can also reduce the finance cost by cutting

down debt and eliminate a fixed component.

⊸ Due to reduce in the financial cost, the company in covering the interest on the debt. The coverage ratio has shown an increasing trend.
 Common Size and Comparative Analysis
⊸ Income Statement

⊸ Due to the increase in purchases of stocking trade, which is 89% of the revenue, the operating profit has reduced significantly. Similarly, in
the FY 2018-19 and 2017-18 the trend has been the same. Overall, the company has been able to increase its revenue from operations by
70% from the FY 2017-18 to FY 2019-20.

⊸ Another reason of operating profit going down is the increase in expenses by the similar % i-e 65%, and the profit has only grown by 1%.
Instead of expenses going up the firm has been able to generate a 200% increase in net profits compared to the FY 2017-18.

Balance Sheet

⊸ In the asset side, investment has been taking most of the proportion of non-current assets which is approx. 16%. Due to this when company
tried to reduce the investment, the non-current assets also reduced. The company was also lenient towards the credit sales in the FY 2018-19,
but in the latest FY they have followed a conservative approach. The company is also reducing on giving the short-term loans and focusing
on increasing the liquidity by keeping cash & cash equivalents with the business.

⊸ The company is non-levered as the company is more dependent on owner’s equity for funding its operations. Adding to this the company has
tried to reduce the long-term borrowing YOY from the FY 2017-18 which shows that they will be operating more on owners’ fund. This will
also reduce the finance costs.
⊸ The non-current assets over the years has decreased due to a decrease in the investments. Also, some part of this constitutes
the sales or disposal of PPE.

⊸ As mentioned above the company is trying to limit the credit sales which is reduced by approx. 50% from the previous years
and complimenting it, the cash has increased by 50%. The total current assets also show a decreasing trend. Overall, the
company is focused on disinvestment.
16

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89,526,124
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89,526,124$
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185,244 users
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Yellow
Is the color of gold, butter
and ripe lemons. In the
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Yellow
Is the color of gold, butter
and ripe lemons. In the
spectrum of visible light,
yellow is found between
green and orange.
Blue
Is the colour of the clear
sky and the deep sea. It is
located between violet and
green on the optical
spectrum.
Blue
Is the colour of the clear
sky and the deep sea. It is
located between violet and
green on the optical
spectrum.
Red
Is the color of blood, and
because of this it has
historically been
associated with sacrifice,
danger and courage.
Red
Is the color of blood, and
because of this it has
historically been
associated with sacrifice,
danger and courage.
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