ANNUAL REPORT ANALYSIS OF

ADANI ENTERPRISES LTD

Submitted To: Associate Prof. Dr C. Padmavati Mam.

Submitted By:

Enrolment No. Name Seat No Contribution

Balance Sheet

Other Reports

Cash Flow Statement

Profit & Loss

1
 CONTENTS OF REPORT

S. No Topic Page No.

1 Title 1

2 Contents of Report 2

3 Balance Sheet 4 - 12

4 Statement of Profit & Loss 14 -17

5 Cash Flow Statement 19 - 22

6 Other Reports 24 - 29

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BALANCE SHEET

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 1) SHAREHOLDER’S FUNDS

Shareholder’s Funds
2021 (Amt 2020 (Amt Increase/Decrease Increase/Decrease
Particulars
in lakhs) in lakhs) (Amount) (Percentage)
Equity Share Capital 3,349.98 3,349.98 - 0%
Total Share Capital 3,349.98 3,349.98 - 0%
Other Equity:
• Capital Redemption Reserve 1,617.82 1,617.82 - 0%
• Securities Premium 25,827.24 25,827.24 - 0%
• Capital Investment Subsidy 25 25 - 0%
• Capital Reserve 166.53 166.53 - 0%
Retained Earnings:
• At the Beginning of the year 2,80,565.80 2,87,479.84 -6,914.04 -2%
• Add : Profit for the year 14,159.44 -2,067.74 16,227.18 785%
• Less : Dividend paid on Equity
Shares -1,674.99 -4,019.98 2,344.99 -58%

• Less : Tax paid on Dividend

- -826.32 826.32 -100%
2,93,050.25 2,80,565.80 12,484.45 4%
Other Comprehensive Income (OCI):
• At the Beginning of the year 129.81 154.04 -24.23 -16%
• Add : During the Year Actuarial
Gain Net of Tax 193.52 -24.23 217.75 899%
323.33 129.81 193.52 149%
Other Equity Total 3,21,010.17 3,08,332.20 12,677.97 4%
Total Shareholder’s Funds 3,24,360.15 3,11,682.18 12,677.97 4%

Comparison:

Shareholder’s Funds

1) From the above table we note that there is no change in the composition of Equity Share Capital. The total
share capital remains constant at Rs. 3,349.98 Lakhs.

2) Other equity comprising of Capital Redemption Reserve; Securities Premium; Capital Investment Subsidy; and
Capital Reserve haven’t observed any change as compared to the previous year.

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3) The retained earnings for the year 2020 were Rs. 2,80,565 crores while the retained earnings in the year 2021
were Rs. 2,93,050 lakhs. The reason behind the increase in retained earnings can be attributed to the profits for
the year 2021 i.e., Rs. 14,159 crores as against the loss made in the year 2020 i.e., Rs. 2,067 crores.

4) Other comprehensive Income (OCI): The balance of OCI for the year 2020 is 129 lakhs and the balance of OCI
for the year 2021 is 323 lakhs. The increase in OCI of Rs. 193 lakhs can be attributed to the Actuarial Gain Net
of Tax.

5) In the year 2020 the total Shareholder’s funds were Rs. 3,11,682 Lakhs and the total shareholder’s funds for
the year 2021 are Rs. 3,24,360 Lakhs. Therefore, it can be observed that there is an 4% overall increase in the
total shareholder’s funds.

Interpretation:

While there is no change in the structure of the share capital, we note an increase in the retained earnings.
Company’s manufacturing and other operations remained closed/ suspended at plants of the Company for a few
days due to lockdown imposed in the Country on account of COVID-19. However, The demand for Seamless and
ERW pipes which got impacted in 2020 due to pandemic is back on track in 2021 riding on decent planned
government expenditure, corporates being bullish on the economic recovery and with the opening of international
borders for trade, exports are seeing an upside and increasing trend in the steel prices coming to help. This recovery
helped the company to earn tremendous profits in the year 2021. Thereby, the retained earnings have increased
by 4% as a result of profit generated by the company and this in-turn contributed to the increase in total
shareholder’s funds by 4%.

2) Non-Current Liabilities

Non-Current Liabilities
2021
2020 (Amt Increase/Decrease Increase/Decrease
Particulars (Amt in
in lakhs) (Amount) (Percentage)
lakhs)

Borrowings:

• Term Loan from Banks (Secured) 63,021.00 73,345.99 -10,324.99 -14%

• Less: Loan EIR adjustment -960.02 -1,271.91 311.89 -25%

62,060.98 72,074.08 -10,013.10 -14%

Term Loan from Banks (unsecured) 2,960.00 -2,960.00 -100%

-

62,060.98 75,034.08 -12,973.10 -17%

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 Other Financial Liabilities (excluding
-
provisions)

• Deferred sales tax 76.87 228.92 -152.05 -66%

• Security Deposit 275.62 266.67 8.95 3%

352.49 495.59 -143.1 -29%

Deferred Revenue 2,996.32 2,869.39 126.93 4%

Deferred tax liabilities (Net) 27,431.00 22,257.61 5,173.39 23%

Total Non-Current Liabilities 92,840.79 1,00,656.67 -7,815.88 -8%

Comparison:

Non-Current Liabilities:

1) In the year 2020, borrowings by the bank were Rs. 75,034 Lakhs and in the year 2021, the borrowings were
Rs. 62,060 Lakhs. We note a 14% decrease in the borrowings.

2) From the above table, we also note that the Deferred sales tax has reduced from Rs. 228 Lakhs (2020) to Rs.
76 Lakhs (2021) while the security deposit increased from Rs. 266 Lakhs (2020) to Rs. 275 Lakhs (2021).

3) Deferred Revenue in the year 2020 was Rs. 2,869 Lakhs, which increased to Rs. 2,996 Lakhs in the year 2021.

4) Deferred Tax Liabilities increased from Rs. 22,257 Lakhs in 2020 to Rs. 27,431 Lakhs in 2021.

5) As a result of the above, the total Non-Current Liabilities decreased from Rs. 1,00,656 Lakhs in 2020 to Rs.
92,840 Lakhs in 2021.

Interpretation:

We note that there is a decrease in the borrowings made by the company. This represents a cash outflow. The
company has availed an External Commercial Borrowing (ECB) facility of Rs. 37,504 Lakhs from Indian Bank
Ltd on 31/03/2020 for acquisition of Rig Jindal Explorer from Star Drilling Pte Ltd. Company would repay the
loan amount in 71 instalments as per the monthly repayment schedule starting 10th May 2020. The outstanding
loan amount as on 31st March 2021 is 34,951.49 lakhs. This indicates a cash outflow of Rs. 2,553 Lakhs in the
form of repayment of Loan.

Further, the company has availed a term loan of Rs. 37,766 lakhs in Feb 2019 for the acquisition of USTPL. While
is loan is quarterly payable from June 2021, owing to COVID 19, the company has availed the benefit of deferment
of interest for the month of April 2020 amounting to Rs. 266.61 lakhs included in above term loan, which is
repayable along with the principal.

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purpose at reporting date. Deferred income tax asset

6
is recognized to the extent that it is probable that future taxable profit will be available against which the deductible
temporary differences and tax losses can be utilized. From the above table, we note that the deferred tax liabilities
were increased by 23%.

Though we note an increase in the deferred tax liabilities, the decrease in the borrowings made by the company
has contributed to the overall decrease in the non-current liabilities by 8%.

3) PPE

PPE
2021 (Amt in 2020 (Amt in Increase/Decrease Increase/Decrease
Particulars
lakhs) lakhs) (Amount) (Percentage)
Land (Freehold) 7,381.46 7,381.46 - 0%

Land (Leasehold) 1,023.64 1,023.64 - 0%

Land site & Development 1,605.50 1,605.50 - 0%

Shed & Building 27,713.57 31,134.59 -3,421.02 -11%

Plant and Machinery 1,45,379.00 1,49,613.26 -4,234.26 -3%

Office Equipment 119.14 163.7 -44.56 -27%

Computers 119.21 55.92 63.29 113%

Furniture and Fixtures 398.44 550.31 -151.87 -28%

Vehicles 680.24 754.58 -74.34 -10%

TOTAL 1,84,420.20 1,92,282.96 -7,862.76 -4%

Comparison:

PPE:

1) From the above table it can be noticed that there isn’t any decrease in the value of land, we note a decrease in
the value of building from Rs. 31,134 Lakhs in 2020 to Rs. 27,713 Lakhs in 2021.

2) Plant and Machinery has decreased by 3% from Rs. 1,49,613 Lakhs in 2020 to Rs. 1,45,379 in 2021.

3) We observe a 27% decrease in the office equipment from Rs. 163 Lakhs (2020) to Rs. 119 Lakhs (2021).

4) For the year 2021 Computers have been increased from Rs. 55 Lakhs in 2020 to Rs. 119 Lakhs in 2021.

5) In the year 2020, the value of furniture was Rs. 550 Lakhs (2020) which was reduced to Rs. 398 Lakhs (2021).

6) And for the year 2021 Vehicles (Rs. 680 Lakhs) has been decreased by 10% from the year 2020 (Rs. 754 Lakhs)

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7) Hence, the total PPE has been decreased by 4% from Rs. 1,92,282 Lakhs in 2020 to Rs. 1,84,420 Lakhs in
2021.

Interpretation:

Due to the depreciation cost that’s incurred on buildings and Plant & Machinery, we note a decrease in the total
PPE by 4%. The reduction in the value happens due to the wear and tear of an asset.

4) Trade Receivables and Payables

Trade Receivables and Payables

2021 (Amt 2020 (Amt Increase/Decrease Increase/Decrease
Particulars
in lakhs) in lakhs) (Amount) (Percentage)
Trade Payables
• Micro Enterprises and Small
57.41 89.26 -31.85 -36%
Enterprises
• Related Parties 38,063.76 41,693.04 -3,629.28 -9%
• Other Payables 35,205.00 15,257.71 19,947.29 131%
73,326.17 57,040.01 16,286.16 29%
Trade Receivables - Unsecured, considered
good
• Related Parties 2,214.25 1,341.70 872.55 65%
• Other Receivables 43,886.71 35,341.66 8,545.05 24%
Unsecured, Credit impaired
• Other Receivables 629.15 590.65 38.5 7%
46,730.11 37,274.01 9,456.10 25%
• Less: Doubtful Debts -629.15 -590.65 -38.5 7%
Total Trade Receivables 46,100.96 36,683.36 9,417.60 26%

Comparison:

Trade Receivables and Payables:

1) From the above table, we observe that the total Trade Payables comprising of MSME’s, Related parties and
other payables were increased by 29% from Rs. 57,040 Lakhs in 2020 to Rs. 73,326 Lakhs in 2021.

2) We also note an upsurge of 26% in total Trade Receivables from Rs. 36,683 Lakhs in 2020 to Rs. 46,100 Lakhs
in 2021.

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Interpretation:

Increment in the purchase of raw material on credit due to the increase in sales can be the reason for the increase
in trade payables (29%). One of the reasons of increase in trade receivables by 26% can be the debtors who are
not able to give the debts on time because of the unexpected pandemic outbreak. And this could lead the company
to the blockage of its funds. So, the company should need to heed attention to its Debtors Policy.

5) Cash and Cash Equivalents

Cash and Cash Equivalents

2021 (Amt in 2020 (Amt Increase/Decrease Increase/Decrease

Particulars
lakhs) in lakhs) (Amount) (Percentage)

Cash in hand 22.6 20.33 2.27 11%

Current Accounts 4,762.51 25.08 4,737.43 18889%

Total Cash and Cash Equivalents 4,785.11 45.41 4,739.70 10438%

Comparison:

Cash and Cash Equivalents:

1) Cash in hand has increased by 11% from Rs. 20 Lakhs in 2020 to Rs. 22.60 Lakhs in 2021.

2) We note a significant increase in the current accounts from Rs. 25 Lakhs in 2020 to Rs. 4,762 Lakhs in the year
2021.

3) Due to the significant increase the current accounts, the total Cash and Cash equivalents have upsurged from
Rs. 45 Lakhs in the year 2020 to Rs. 4,785 Lakhs in the year 2021.

Interpretation:

There is an increase in total cash and cash equivalents because of the increase in current accounts. Cash and cash
equivalent are the most liquid asset of all the assets on the balance sheet. Increase in cash and cash equivalent
indicates greater liquidity. This will have a positive impact on company's ability to pay its debt and other liabilities.

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Financial Ratios

Company’s performance may also be measured using financial ratios. The analysis for some of the financial ratios
has been performed below:

1) Working Capital: This refers to the availability of cash for daily operations. It is derived by subtracting
current liabilities from current assets.

Particulars Amount in Lakhs

Net Sales ₹ 2,22,508.18

Total Assets ₹ 5,13,721.32

Asset turnover Ratio 43%

Interpretation: A positive working capital indicates that a firm is able to meet its current obligations. To
further improve this number, we need to examine our company’s inventory management practices. A backup of
goods and the resulting loss in sales can negatively affect the business’s cash resources.

2) Debt-to-Equity Ratio: This ratio is an indicator of the relationship between outsider borrowings/funds
and the equity/shareholder’s funds. It is derived by dividing total debt by total equity.

Particulars Amount in Lakhs

Total Debt (Borrowings) ₹ 71,757.48

Total Equity ₹ 3,24,360.15

Debt - Equity Ratio 0.22

Interpretation: Long-term creditors will view this number as a measure of how aggressive the firm is. If the
business is already levered up with debt, they may be reluctant to offer additional financing. A low ratio is
considered as favourable from the long-term creditor’s point of view. Care should be taken, as a very high ratio
may be unfavourable from the view point of the firm.

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3) Asset Turnover Ratio: The asset turnover ratio measures the efficiency with which a company uses its
assets to produce sales. A company with a high asset turnover ratio operates more efficiently as compared to
competitors with a lower ratio.

Particulars Amount in Lakhs

Net Sales ₹ 2,22,508.18

Total Assets ₹ 5,13,721.32

Asset turnover Ratio 43%

Interpretation: From the above table we note that the Asset turnover ratio is 43%. Therefore, for every rupee
in total assets, Adani Enterprises Ltd generated 0.43 Rupees in sales.

4) Current Ratio: This is another test of short-term liquidity; it is determined by dividing current assets by
current liabilities.

Particulars Amount in Lakhs

Current Assets ₹ 1,98,356.00

Current Liabilities ₹ 96,520.00

Current Ratio 2.06

Interpretation: This number should be above 1, If this number is below 1, that means short-term liabilities
exceed the short-term assets. And it’s considered a sign of strength if it exceeds 2. In the case our company it is
2.06 which means that the company has substantially more financial resources to cover its short-term debt and
that it right now works in stable financial solvency.

5) Quick Ratio: This measures the company’s ability to meet its debt obligations without selling off inventory.
The higher the result, the better. It is expressed as (Current assets - Inventories) divided by current liabilities.

Particulars Amount in Lakhs

Current Assets ₹ 1,98,356.00

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 (-) Inventory ₹ 86,993.62

₹ 1,11,362.38

Current Liabilities ₹ 96,520.00

Quick Ratio 1.15

Interpretation: From the above table, we note that the quick ratio is 1.15. If the quick ratio decreases at a later
stage in time or misses the mark concerning the benchmark, company might be putting an excessive amount of
capital in stock or might have taken on a lot of short-term obligation.

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STATEMENT OF PROFIT & LOSS

13
STANDALONE STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31ST
MARCH, 2021

REVENUE FROM OPERATIONS -

Revenue From Operations

2021 (Amt in Increase/ Decrease Percentage
Particulars 2020(Amt in lakhs)
lakhs) (Amount) change

Revenue From Operations

Manufacturing 2,16,276.03 2,55,186.63 -38,910.60 -15%

Scrap 6,232.15 6,496.92 -264.77 -4%

2,22,508.18 2,61,683.55 -39,175.37 -15%

Other Income

Fair Value through P&L: 164.36 -235.36 399.72 -170%

- Equity Share 99.04 -1,289.85 1,388.89 -108%

Mutual Fund

EIR Amortization FVTPL 16.30 38.09 -21.79 -57%

- Interest Income 187.27 168.79 18.48 11%

Deferred Income 4.06 17.17 -13.11 -76%

Dividend Received 4,524.21 3,468.97 1,055.24 30%

Interest Income 336.96 1,804.41 -1,467.45 -81%

Profit on Sale of Investments
designated thru FVTPL
Foreign Exchange Fluctuation
2,816.77 213.85 2,602.92 1217%
(Net)
Rent Income 70.75 69.85 0.90 1%

Non - Operating Income 844.44 855.80 -11.36 -1%

9,064.16 5,111.72 3,952.44 77%

Total Revenue 2,31,572.34 2,66,795.27 -35,222.93 -13%

Revenue from operations and total revenue

In the year 2020, we can observe that the total revenue was Rs. 266,795 Lakhs and in the year 2021 it is Rs.231,572
lakhs. We can see that the total revenue is decreased by 13% which is not good for a company. Decrease in total
revenue is a negative thing for a company, because decrease in revenue leads to decrease in the profits as well.

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Interpretation

Increase in other operation income helps to know how much revenue will eventually become profit for the
company. It also, measures the efficiency of the company. Here, though the company’s other operation income
increased, we see a decrease in the total revenue from operations.

The company’s other income is increased by recognizing dividend income. Other income is also based on
transaction price, which is the consideration, adjusted for trade price, for example price concessions, volume
discounts as agreed with the customers. It also includes taxes.

Cost of materials consumed

Cost of materials consumed

Increase/
2021 (Amt in 2020(Amt in Percentage
Particulars Decrease
lakhs) lakhs) change
(Amount)
-
Opening Stock -17%
29,261.67 35,272.15 6,010.48
Add: Purchase (Including Direct -
-7%
Expenses) 1,42,700.65 1,53,948.22 11,247.57
-
-9%
1,71,962.32 1,89,220.37 17,258.05
Less : Closing Stock 10%
32,129.32 29,261.67 2,867.65
-
Total -13%
1,39,833.00 1,59,958.70 20,125.70

Interpretation

As we can observe in the table of cost of material consumed, the purchases in the year 2020 were Rs.1,53,948.22
lakhs and in the year 2021 the purchases were Rs.1,42,700. We can see that there is a decrease in the purchases
made which is -7%.

Employee benefit expenses -

Employee benefit expenses

2021 (Amt in 2020(Amt in Increase/ Decrease Percentage

Particulars
lakhs) lakhs) (Amount) change
Salary, Wages & Other
-614.19 -9%
Allowances 6,342.20 6,956.39
Contribution to PF & Other Funds -63.63 -17%
306.55 370.18
Staff Welfare Expenses -99.24 -67%
47.99 147.23
Total -777.06 -10%
6,696.74 7,473.80

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Interpretation

Salaries and wages are decreased by 9%. The company has decreased the salaries and wages due to pandemic.
Contribution to provident and other funds in decreased by 17%. A provident fund is an investment fund that is
jointly established by the employer and employee to serve as a long-term savings to support an employee upon
retirement. It also represents job welfare benefits offered to the employee.

Staff welfare expenses is reduced by 67%. The company should spend more on staff welfare expenses to motivate
the staff to work hard. The company should spend a bit more on staff’s sanitization, medical facilities etc, as they
are working in this pandemic.

Depreciation and amortization expenses-

Depreciation and amortisation expenses

2021 (Amt in 2020(Amt in Increase/ Decrease Percentage

Particulars
lakhs) lakhs) (Amount) change

Depreciation on property, plant and

-230.00 -39%
equipment 367.00 597.00

Depreciation of right-of-use assets

57.00 -

Amortization of intangible assets -4.00 -1%

398.00 402.00

Total -177.00 -18%

822.00 999.00

Interpretation

In the table of depreciation and amortization, we can observe that the total amount is decreased. In the year 2020
it was Rs. 999 lakhs and in the year 2021 it is Rs.822 lakhs. The total depreciation and amortization are decreased
by 18%.

Depreciation is the devaluing of an asset over time due to age or wear and tear. There is no avoiding this, just

like the effects of aging on the human body. A depreciation expense has a direct effect on the profit that appears
on a company's income statement. The larger the depreciation expense in a given year, the lower the company's
reported net income its profit. However, because depreciation is a non-cash expense, the expense doesn't change
the company's cash flow.

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Company uses amortization to spread the cost of an intangible asset over its useful life, or the life of the intangible
asset in the organisation. An intangible asset is one without a physical presence, such as a patent. This amortization
process reduces a company's assets and stockholders' equity on its balance sheet.

E.P.S and diluted E.P.D

E.P.S and diluted E.P.D

2021 (Amt in 2020(Amt in Increase/ Decrease Percentage

Particulars
lakhs) lakhs) (Amount) change

Profit for the year 634.00 15%

4,776.00 4,142.00
Weighted average number of
- 0%
shares 2,30,30,622.00 2,30,30,622.00
Nominal value per share - 0%
10.00 10.00
Basic and diluted earnings per
27.53 15%
share 207.38 179.85

Interpretation

1. In the table of Earnings per share, we can observe that there is an increase in profit. In the year 2020 the profit
was Rs. 4,142 lakhs and in the year 2021 it is Rs.4776 lakhs. We can observe that there is an increase of 15%.
Increase in profit after tax has a positive effect on the company it beneficial for overall growth of the company.

2. In the year 2020, the weighted average number of shares were 23,030,622 and in the year 2021 23,030,622. We
can observe that there is no change.

3. In the table of EPS, we can observe that there is an increase of 15% in diluted earnings per share (Rupees) (Face
value – R 10/- per share).

A high after-tax profit margin generally indicates that a company runs efficiently, providing more value in the
form of profits to shareholders. The after-tax profit margin alone is not an exact measure of a company's
performance or determinant of the effectiveness of its cost control measures. Increase in profit after tax helps in
overall growth and is also beneficial for the future.

EPS indicates how much money a company makes for each share of its stock and is a widely used metric for
estimating corporate value. A higher EPS indicates greater value because investors will pay more for a company's
shares if they think the company has higher profits relative to its share price Lower or decreasing EPS gives poor
indication about the health of the company and gives lower return to the shareholders. Lower or decreasing growth
on EPS gives poor indication about the company's future growth prospect.

Diluted EPS is more scientific than basic EPS. For fundamental analysis, diluted EPS is more effective as it
includes the impact of all potential equity diluters. This ensures the company's EPS is in line with future expansion.

17
CASH FLOW STATEMENT

18
STANDALONE CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH,
2021

CASH FLOW FROM OPERATING ACTIVITIES-

2021 (Amt in 2020 (Amt in Increase/Decrease Percentage

Particulars
lakhs) lakhs) (Amount) change
Profit Before Tax including other
comprehensive income (not to be
19,462.10 2,518.93 16,943.17 672.63
reclassified) as per Statement of Profit
and Loss

Adjustments for:

Depreciation and Amortisation 10,538.94 7,875.06 2,663.88 33.83

(Profit)/Loss on Sale / Write off of Fixed

176.88 1.28 175.60 13718.75
Assets (Net)
Provision for impairment on Loan &
19,098.96 45,040.88 -25,941.92 -57.60
Diminution in Investment

Finance Costs 4,801.28 4,793.64 7.64 0.16

Net Gain on Sale of Investments -600.36 -279.20 -321.16 -115.03

Interest Income -4,524.21 -3,468.97 -1,055.24 -30.42

Dividend Income -4.06 -17.17 13.11 76.35

Rental Income -70.75 -69.85 -0.90 -1.29

Cash Flow from Operating Activities

48,878.78 56,394.60 -7,515.82 -13.33
before Working Capital Changes

Changes in Working Capital:

Adjustments for (Increase) / Decrease in

Operating Assets:

Inventories -15,747.10 5,622.22 -21,369.32 -380.09

Trade Receivables and Other Receivables 687.56 -3,784.22 4,471.78 118.17

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 Adjustments for Increase / (Decrease) in
Operating Liabilities:

Trade Payables and Other Liabilities 18,534.09 29,663.32 -11,129.23 -37.52

Cash Flow from Operating Activities

52,353.33 87,895.92 -35,542.59 -40.44
after Working Capital Changes

Net Income Tax (Paid) / Refunds -2,286.24 -13,026.16 10,739.92 -82.45

Net Cash Flow from / (used in)

50,067.09 74,869.76 -24,802.67 -33.13
Operating Activities

Interpretation

1) From the above table we can observe that PBIT has increased by 672% in 2021 from the last fiscal year; 2020.
Such a huge increase in PBIT indicates that the company experienced a major increase in sales of its products.

2) Cash flow from operating activities decreased by around 13% in 2020-21 as compared to 2019-20. It is
interesting to note that even though the PBIT increased in 2020-21, there is still a decrease in Net Cash flow from
operations. This is due to many factors; the increase in depreciation and amortization, the decrease in Provision
for impairment on Loan & Diminution in Investment etc.

3) The 33.13% decrease in the net cash flow in 2020-21 as compared to the previous fiscal year implies that the
overall revenue decreased in the second wave of covid 19. Furthermore, even though profits before adjustment
increased, due to certain factors like decrease in provision for impairment on Loan & Diminution in investment
etc., the company’s overall revenue from operations decreased in 2020-21.

Cash Flow from investment activities

2021 (Amt in 2020 (Amt in Increase/ Decrease Percentage

Particulars
lakhs) lakhs) (Amount) change
Capital Expenditure on Property, Plant &
-870.69 -84,566.11 83,695.42 -98.97
Equipment

Current Loans and Advances (Net) 6,490.42 7,833.58 -1,343.16 -17.15

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 Proceeds from Sale of Property, Plant &
- 7.96 -7.96 -100.00
Equipment

Non-Current Loans and Advances (Net) -7,300.54 -2.38 -7,298.16 -306645.38

Current Investments

Purchased -68,256.62 -97,067.23 28,810.61 29.68

Proceeds from Sale 52,605.84 1,05,473.11 -52,867.27 -50.12

Non- Current Investments

Purchase of Non - Current Investments -17,785.81 -36,862.85 19,077.04 51.75

Proceeds from Sale of non-current

44.80 66.51 -21.71 -32.64
investments

Interest Received 4,292.13 2,362.05 1,930.08 81.71

Dividend Received 4.06 17.17 -13.11 -76.35

Rent Income 70.75 69.85 0.90 1.29

Net Cash Flow from / (used in)

-30,705.66 -1,02,668.34 71,962.68 70.09
Investing Activities

Interpretation

1) From the table above, it can be seen that the amount invested in acquisition of property, plant and equipment
in 2020-21 decreased by about 99% in comparison to the previous fiscal year. This could be due to the fact that
the cash and cash equivalent total at the beginning of fiscal year was much lesser as compared to the last fiscal
year.

2) The company has also received an interest amount of Rs. 4,292.13 lakhs from previous investing activities
which has been a huge rise in comparison with the previous fiscal year. This could be due to the large number of
loans and advances issued during the last fiscal year.

3) The net cash flow from investing activities has seen a rise of about 70% but still it is negative. The rise could
be due to a combination of various factors such as a large number of previous current and long-term
investments, interest received on loans etc.

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Cash Flow from financing activities

2021 (Amt in 2020 (Amt in Increase/Decrease Percentage

Particulars
lakhs) lakhs) (Amount) change
Proceeds / (Repayment) of Long - Term
-12,013.08 31,718.93 -43,732.01 -137.87
Borrowings
Proceeds / (Repayment) of other Short -
4,488.06 869.96 3,618.10 415.89
Term Borrowings

Finance Costs -5,397.11 -5,667.69 270.58 -4.77

Dividend Paid -1,699.60 -4,037.70 2,338.10 -57.91

Tax on Dividend - -826.32 826.32 -100.00

Net Cash Flow from / (used in)

-14,621.73 22,057.18 -36,678.91 -166.29
Financing Activities

Interpretation

1) It can be seen from the table above, that Proceeds / (Repayment) of Long - Term Borrowings have decreased
by about 137 percent in 2020-21 from the previous fiscal year. It can be interpreted that in 2020-21, the company
might have allocated funds in other areas because of which repayment of long terms borrowing was hampered.

2) The dividend paid also took a major dip in 2020-21 as compared to the previous fiscal year which indicates
that even though the company was facing losses in 2019-20, the losses increased significantly in 2020-21.

3) The net cash flow from financing activities thus declined by about 166% pertaining to the decrease in the
dividend paid, finance costs etc.

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OTHER REPORTS

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1.DIRECTORS' REPORT

FINANCIAL RESULTS

The highlights of the financial results are as under: (Rs. in Crore)

Particulars Year ended Year ended

31.03.2021 31.03.2020

Revenue from Operations 2225.08 2616.84

Other Income 90.64 51.10

Total Revenue 2315.72 2667.94

Profit before Exceptional Items & Tax 383.67 475.84

Exceptional Items 190.99 450.41

Profit before Tax 192.68 25.43

Provision for Taxation

- Current - 83.31

- Deferred Tax 51.09 (36.82)

- Earlier years - (0.38)

Profit / (Loss) after Tax 141.59 (20.68)

Other Comprehensive Income 1.94 (0.24)

Total Comprehensive Income for the year 143.53 (20.92)

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RESULTS OF OPERATIONS

Revenue from Operations during the year was Rs.2225.08 Crore as against Rs.2616.84 Crore in the previous year,
Profit before tax for the year was Rs.192.68 Crore as against Rs.25.43 Crore in the previous year, Profit after Tax
for the year was Rs.141.59 Crore as against loss of Rs.20.68 Crore in the previous year.

From the above results it is inferred that MSL has performed financially well in FY-21 compared to FY 19-20

DIVIDEND

The Board has recommended a dividend of Rs.3.50/- (70%) per equity share of Rs.5/- each for the financial year
ended 31st March,2021.

2. MANAGEMENT DISCUSSION & ANALYSIS REPORT

KEY FINANCIAL RATIOS - STANDALONE

Type of Ratio F.Y. 2020-21 F. Y. 2019-20 Change

(i) Debtors Turnover 5.38 6.07 -11%

(ii) Inventory Turnover 1.72 2.15 -20%^1

(iii) Interest Coverage Ratio 8.99 10.90 -58%^2

(iv) Current Ratio 2.06 2.58 -20%^3

(v) Debt Equity Ratio 19% 24% -20%^4

(vi) EBIDTA Margin (%) 20% 21% -5%

(vii) Net Profit Margin (%) 6% -1% 700%^5

(viii) Return on Net Worth 4% -0.7% 729%^5

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 1. Decrease on account of decrease in Sales and Production in FY 20-21 compared to FY 19-20.
2. Decrease in the earnings and at the same time the interest cost has stayed the same.
3. Current ratio has decreased due to an increase in the trade payables at year end.
4. Decrease is on account of timely repayments towards loans.
5. The Company has made profit in FY 20-21 as compared to loss in FY 19-20.

Exceptional Items

The Company has made a provision of 19,099 Lakhs which represents diminution of investment in Subsidiary
Company and Joint Venture Company.

Industry Overview

India’s steel demand fell by 13.7% in 2020 due to an extended period of severe lockdown but is expected to
rebound by 19.8% to exceed the 2019 level in 2021.The developed world's steel demand recorded a double-digit
decline of 12.7% in 2020. It is expected that a substantial recovery in 2021 and 2022 will happen with growth of
8.2% and 4.2% respectively. However, steel demand in 2022 will still fall short of 2019 levels.

Risk and Mitigation

Adani Enterprises Ltd continuously monitors foreign exchange rates movement and our foreign exchange policies
safeguard price escalation risk. The Company hedges foreign currency exposure as and when required.

Exports

Exports in the last financial year were impacted due to pandemic and limited to the USA, Brazil and Europe.
Currently, MSL is exporting to more than 30 countries and the Company's business plan includes expansion into
new territories and addition of new countries.

Business Outlook

The Company primarily caters to companies in the Oil & Gas sector, where it is a registered vendor for major
domestic oil producers and refiners. In addition, it also caters to other segments, including power plants, boilers,
automobile engineering etc. For the upstream Oil & Gas sector involved in exploration and production the demand
outlook looks stable. In case of Mid & Downstream which comprise of Oil & Gas, Power, Fertilisers, Chemical,
Pharmaceutical and Water companies and targets Cross country pipeline, City Gas distribution, refinery & other

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projects, the outlook is neutral. The Company has an upstream exposure of 30% and mid and downstream
exposure of 70%. In addition, 50% of the industry mix is coming from Oil & Gas. The Company's focus on newer
products should help in retaining and improving the market share

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