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  • Company Info.

    A2Z Infra Engineering Ltd.

    Management Team



    Market Cap.(`) 292.01 Cr. P/BV 9.07 Book Value (`) 1.83
    52 Week High/Low ( ` ) 25/8 FV/ML 10/1 P/E(X) 0.00
    Book Closure 29/09/2023 EPS (`) 0.00 Div Yield (%) 0.00
    You can view Board of Directors and Key Executives of the company.

    Board of Directors
    Sr.No.NameDesignation
    1 Mr. Amit MittalManaging Director & CEO
    2 Mr. Arun GaurNon Exe.Non Ind.Director
    3 Ms. Dipali MittalNon Exe.Non Ind.Director
    4 Ms. Atima KhannaInd. Non-Executive Director
    5 Mr. Manoj TiwariNon Exe.Non Ind.Director
    6 Mr. Ritu GoyalInd. Non-Executive Director
    7 Mr. Parmatma Singh RathorInd. Non-Executive Director

    Key Executives
    Sr.No.NameDesignation
    1 Mr. Atul K AgarwalCo. Secretary & Compl. Officer
    2 Mr. Lalit KumarChief Financial Officer
    3 Mr. Guljeet Singh SaroyaPresident
  • A2Z Infra Engineering Ltd.

    Directors Report



    Market Cap.(`) 292.01 Cr. P/BV 9.07 Book Value (`) 1.83
    52 Week High/Low ( ` ) 25/8 FV/ML 10/1 P/E(X) 0.00
    Book Closure 29/09/2023 EPS (`) 0.00 Div Yield (%) 0.00
    You can view full text of the latest Director's Report for the company.
    Year End :2018-03

    To

    The Members of

    A2Z Infra Engineering Ltd.

    The Directors take pleasure in presenting the 17th Annual Report together with the annual audited financial statements for the year ended March 31, 2018.

    1. Financial summary or highlights/Performance of the Company

    The highlights of financial results on Standalone and Consolidated basis for the financial year ended on March 31, 2018 are as follows:

    (INR in lakh)

    Particulars

    Standalone

    Consolidated

    2017-18

    2016-17

    2017-18

    2016-17

    Revenue

    Revenue from Operations

    35,751.56

    63,455.83

    70,853.82

    99,550.84

    Add: Other Income

    3,697.86

    1,563.48

    4,310.47

    3,773.05

    Total revenue

    39,449.42

    65,019.31

    75,164.29

    1,03,323.89

    Expenses

    Cost of Material Consumed

    27,804.66

    47,240.91

    35,817.12

    56,340.53

    Purchase of Stock in Trade

    2,602.17

    4,996.99

    2,602.17

    4,996.99

    Changes in Inventories

    -

    -

    294.55

    (145.68)

    Employee benefit expenses

    2,219.43

    1,965.05

    26,501.06

    25,280.45

    Finance Cost

    12,978.07

    11,967.31

    20,599.69

    20,053.32

    Depreciation and amortization expenses

    1,284.70

    1,447.52

    3,264.75

    4,307.91

    Other Expenses

    5,845.46

    4,501.85

    8,149.34

    6,980.62

    Total Expenses

    52,734.49

    72,119.63

    97,228.68

    1,17,814.14

    Loss before Exceptional Items and Tax

    (13,285.07)

    (7,100.32)

    (22,064.39)

    (14,490.25)

    Exceptional Items

    1,828.89

    (959.58)

    13,557.23

    (9,877.58)

    Loss before Tax

    (11,456.18)

    (8,059.90)

    (8,507.16)

    (24,367.83)

    Tax expense

    Current Tax

    22.77

    3.67

    190.85

    237.67

    Reversal of Tax expense relating to prior years

    -

    -

    1.39

    (3.78)

    Deferred Tax (Net)

    (2.01)

    5,855.41

    45.01

    5,968.30

    Total Tax Expense

    20.76

    5,859.08

    237.25

    6,202.19

    Loss for the year

    (11,476.94)

    (13,918.98)

    (8,744.41)

    (30,570.02)

    Other Comprehensive Income

    i) Items that will not be reclassified to profit and loss

    40.31

    29.58

    71.26

    57.44

    ii) Income Tax relating to Items that will not be reclassified to profit and loss

    -

    -

    -

    -

    Total Comprehensive Income

    40.31

    29.58

    71.26

    57.44

    Total Comprehensive income (Comprising Loss and other Comprehensive Income)

    (11,436.63)

    (13,889.40)

    (8,673.15)

    (30,512.58)

    Note: The above figures are extracted from the standalone and consolidated annual financial statements of the Company as per Indian Accounting Standards (Ind AS).

    Operations Review Standalone:

    During the year under review, the Turnover of the Company has shown a decrease as compared to that of the previous year figure by 43.66%.The Company has achieved a Turnover of INR 35,751.56 Lakh as against INR 63,455.83 Lakh in the previous year. The Company has made net Loss after tax of INR 11,436.63 Lakh whereas in the previous year Company has made net Loss of INR 13,889.40 Lakh.

    The Net Worth of the Company has increased to INR 61,336.63 Lakh as at the end of the current year from INR 60,470.49 Lakh as at the end of the previous year representing increase in Net Worth by 1.43%.

    The Debt Equity ratio of the Company has decreased to 1.20 as at the end of the current year as compared to 1.59 as at the end of the previous year.

    Consolidated:

    The consolidated Turnover of the Company for the current financial year is INR 70,853.82 Lakh as against INR 99,550.84 Lakh in the previous year representing decrease in Turnover by 28.83%. The Company on consolidated basis has made a net Loss of INR 8,673.15 Lakh as against INR 30,512.58 Lakh in the previous year.

    The consolidated Net Worth of the Company has increased to INR 37,195.38 Lakh as at the end of the current year from INR 35,868.08 Lakh as at the end of previous year representing increase in Net Worth by 3.70 %.

    The consolidated Debt Equity ratio of the Company has decreased to 3.39 as at the end of the current year compared to 4.59 as at the end of previous year.

    2. Consolidated Financial Statements

    The Audited Consolidated Financial Statements of your Company as on March 31, 2018, have been prepared in accordance with the relevant Indian Accounting Standards (Ind AS) issued by Accounting Standards Board (ASB) and Regulation 33 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and provisions of the Companies Act, 2013.

    In accordance with Section 129(3) of the Companies Act, 2013 and schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Consolidated Financial Statements of the Company, including the financial details of all the subsidiary companies of the Company, forms a part of this Annual Report.

    3. Dividend

    On account of the losses reported by the Company during the current financial year, the Board of Directors does not recommend any dividend for the financial year ended March 31, 2018.

    4. Operational highlights

    The key highlights of the Company’s various businesses are as follows:

    Power Transmission & Distribution:

    Your Company is one of the leading players in India’s Engineering & Urban Infrastructure Services sector. As part of the services, the Company provides integrated design, testing, installation, construction and commissioning services on a turn-key basis to its clients. The Company’s projects include rural electrification, railway overhead electrification, reduction of AT&C losses, feeder renovation, underground cabling, feeder segregation, installing High Voltage Distribution System (“HVDS”) and Low Voltage Distribution System (“LVDS”) distribution lines and transmission lines. The Company has strong capabilities to build:

    - Substations & Switchyards up to 765 kV

    - Transmission lines up to 765 kV

    - 11 / 33 kV distribution lines comprising of Feeder Renovation Projects, High Voltage Distribution System, AT&C Loss Reduction, Tube Well Connection, Segregation of Domestic and Agriculture load, Augmentation of Lines, Providing Laying of HT & LT Aerial Bunched Cables and Offering BPL Connections.

    Company has its overseas presence in Nepal, Zambia, Uganda and Tanzania.

    Under Engineering Services segment we may pursue infrastructure projects like Sewage Network & Treatment Plants, Gas Distribution Networks, and Metro projects in select cities.

    Telecom Infrastructure EPC

    Telecom infrastructure projects is the main business activity of the Company. Major offerings by Company in Telecom Infrastructure EPC are supplying, laying and maintaining of Optical Fibre Cables (OFC) networks. EPC services offered by the Company under this segment include:

    - Material Planning & Project Management

    - Radio Frequency Engineering Services

    - Engineering Construction & Infrastructure Services

    - Optical Fiber Cable NLD / Access Networking Construction & Maintenance

    - Network Integration

    - Telecom Infrastructure Operation & Maintenance Services

    Your Company is successfully executing orders for construction of Telecom Network Backbone on Turnkey basis in the untapped toughest terrains of the country like Leh, Ladakh and North East India, which will help in building the optical Network to connect each and every part of the Nation. We combine a proven track record and professional skills woven together with a culture of trust.

    Your Company is now expanding its System Integration capabilities to build and operate Data Network and Digital Transmission of Telecom Operators.

    To cater the vision of developing India through Smart Cities Project, your Company is also planning to foray into the area of building and operating Surveillance Networks, Aviation Sector, Smart Metering for Power and Water Sector .

    Waste to Energy- Power Generation Projects (PGP)

    The Company being an Infrastructure Company also provides solutions for Clean and Green Energy. The Company is planning to build scale in Green Technology solutions in all areas of the power sector, starting from generation of power to its distribution to end consumers. The Company collaborated with sugar mills for setting up three power plants on Built, Own, Operate and Transfer (BOOT) basis for a period of 15 years in the state of Punjab. To ensure continuous supply of RDF to the respective the Power Plants the Company has developed an indigenous process in its waste processing plant for running the said Plants on Refuse Derived Fuel (RDF) from Municipal Solid Waste.

    5. Change in the nature of business

    There has been no change in the nature of business during the year under review.

    6. Material Changes and Commitments

    After the period under review and before the date of this report, the following settlements are entered with the Lenders:

    1. The Company entered into One Time Settlement (OTS) with The Hongkong and Shanghai Banking Corporation Limited (“HSBC Bank”) and has signed the Settlement Agreement with HSBC Bank on April 04, 2018 to settle all the outstanding dues (including interest) for an amount of Rs. 2.80 Crores in terms of the said Settlement Agreement.

    2. A2Z Green Waste Management Ltd. (Subsidiary of the Company) (“hereinafter referred to as A2Z Green”) has entered into a Business Transfer Agreement on 27th July 2018 to transfer Kanpur Project consisting of 1500 TPD of P&D Unitalong with 15Mw Power Plant located in Kanpur city to Earth Environment Management Services Pvt. Ltd. (EeMSPL) (a Wholly Owned Subsidiary of A2Z Green) at a consideration of Rs. 203.75 Crores by way of a slump sale on a going concern basis along with all its assets and liabilities.

    7. Updates on Corporate Debt Restructuring (CDR)

    Corporate Debt Restructuring (CDR) package of Company for restructuring of its debts was approved by Corporate Debt Restructuring Empowered Group (“CDR EG”) and the same has been successfully implemented and CDR Lenders of the Company have appointed SBICAP Trustee Company Limited (SBICAP) as their Security Trustee on the terms and conditions contained in Security Trustee Agreement executed on March 27, 2014 among the Company, Lenders, and the Security Trustee.

    Your Company is working assiduously to reduce the debt burden and in line with this strategy the Company has entered into One Time Settlement Agreements with various Lenders including SICOM Limited, Edelweiss Asset Reconstruction Company Limited as representative of EARC Trust SC 299 for the Loan assigned by Yes Bank Limited and Standard Chartered Bank during the FY 2017-18.

    8. Scheme of Arrangement / Reconstruction/ReOrganization

    The Scheme of Arrangement/Reconstruction/ReOrganization (“the Scheme”) between your Company and its Secured Creditors under Sections 391 to 394 of the Companies Act, 1956 for implementation of the Corporate Debt Restructuring Package (“CDR Package”) as approved by the Corporate Debt Restructuring Empowered Group (“CDR EG”) on all the Secured Creditors of the Company was earlier approved by the Board of Directors during the RY.2014-15.

    The Company’s Petition for first Motion has been disposed off by the Hon’ble High Court of Punjab & Haryana at Chandigarh and the Company has filed a Petition for Second Motion and the matter is presently sub-judice with the NCLT/ Hon’ble High Court of Punjab & Haryana at Chandigarh.

    9. Deposits

    During the year under review, the Company has not accepted any deposits within the meaning of Sections 2(31) and 73 of the Companies Act, 2013, and the Rules framed thereunder and any re-enactments thereof, and consequently, there was no amount of principal or interest was outstanding towards the Public deposit as on the Balance Sheet date.

    10. Significant and Material Orders passed by the Regulators or Courts or Tribunals

    There are no significant material orders passed by the Regulators or Courts or Tribunal which would impact the going concern status of the Company and its future operations.

    11. Internal Financial Controls and systems:

    Your Company has in place adequate financial control system and framework in place to ensure:

    - The orderly and efficient conduct of its business;

    - Safeguarding of its assets;

    - The prevention and detection of frauds and errors;

    - The accuracy and completeness of the accounting records; and

    - The timely preparation of reliable financial information.

    Significant observations including recommendations for improvement of the business processes are reviewed by the Management before reporting to the Audit Committee. The Audit Committee then reviews the Internal Audit reports and the status of implementation of the agreed action plan. This system of internal control facilitates effective compliance of Section 138 of Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

    The internal auditor of the company checks and verifies the internal control and monitors them in accordance with policy adopted by the company. The Board regularly reviews the effectiveness of controls and takes necessary corrective actions where weaknesses are identified as a result of such reviews. This review covers entity level controls, process level controls, fraud risk controls. Based on this evaluation, there is nothing that has come to the attention of the Directors to indicate any material break down in the functioning of these controls, procedures or systems during the year. There have been no significant events during the year that have materially affected, or are reasonably likely to materially affect, our internal financial controls.

    12. Secretarial Standard

    The Company is in Compliance with the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2).

    13. Share Capital Authorised Share Capital:

    During the year under review, the Authorised Share Capital of the Company has been increased from Rs. 160,00,00,000 (Rupees One Hundred Sixty Crore Only) divided into 16,00,00,000 (Sixteen Crore) equity shares of Rs. 10/-(Rupees Ten only) each to Rs. 240,00,00,000 (Rupees Two Hundred Forty Crore Only) divided into 24,00,00,000 (Twenty Four Crore) equity shares of Rs. 10/- (Rupees Ten only) each pursuant to Ordinary Resolution passed by the Shareholders of Company through Postal ballot on December 17, 2017

    Paid up Share Capital:

    During the year, following allotments were made: -

    1. The Nomination & Remuneration Committee of the Board of Directors of the Company in its meeting duly held on May 29, 2017 has allotted 1,10,005 (One Lakh Ten Thousand Five) equity Shares on the conversion of the ESOP’s as per Employee Stock Option Plan, 2013 and 15,000 (Fifteen Thousand) Equity Shares on the conversion of the ESOP’s as per Employee Stock Option Plan, 2014 of face value of Rs.10/- each to the eligible Employees of the Company who have exercised their stock options under the A2Z Employee Stock Option Plan 2013 & 2014.

    2. The Nomination & Remuneration Committee of the Board of Directors of the Company in its meeting duly held on September 21, 2017 has allotted 56,000 (Fifty Six Thousand) equity Shares on the conversion of the ESOP’s as per Employee Stock Option Plan, 2013 and 4,15,000 (Four Lakh Fifteen Thousand) Equity Shares on the conversion of the ESOP’s as per Employee Stock Option Plan, 2014 of face value of Rs.10/- each to the eligible Employees of the Company who have exercised their stock options under the A2Z Employee Stock Option Plan 2013 & 2014.

    3. The Nomination & Remuneration Committee of the Board of Directors of the Company in its meeting duly held on February13, 2018 has allotted 58,000 (Fifty Eight Thousand) equity Shares on the conversion of the ESOP’s as per Employee Stock Option Plan, 2013 and 2,40,000 (Two Lakh Forty Thousand) Equity Shares on the conversion of the ESOP’s as per Employee Stock Option Plan, 2014 of face value of Rs.10/- each to the eligible Employees of the Company who have exercised their stock options under the A2Z Employee Stock Option Plan 2013 & 2014.

    4. Further, the Board of Directors of the Company in its meeting duly held on February 13, 2018 pursuant to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, has allotted 1,77,13,569 (One Crore Seventy Seven Lakh Thirteen Thousand Five Hundred Sixty Nine) Equity Shares of Rs. 10/- each on Preferential Basis to the Lenders upon conversion of a part of their facilities/loans (including Interest) into Equity Shares at an issue price of Rs. 39.80/- each. The details of aforesaid allotment is as follows:

    S. No.

    Name of Allottee(s)

    No. of Shares

    1.

    SICOM Limited

    62,81,408

    2.

    Edelweiss Asset Reconstruction Company Ltd. acting as representative of EARC Trust SC 299

    1,14,32,161

    5. Further, the Board of Directors of the Company in its meeting duly held on February 23, 2018 pursuant to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, has allotted 1,25,62,815 (One Crore Twenty Five Lakh Sixty Two Thousand Eight Hundred Fifteen) Equity Shares of Rs. 10/- each on Preferential Basis to Standard Chartered Bank (‘the Lender”) upon conversion of a part of their facilities/loans (including Interest) into Equity Shares at an issue price of Rs. 39.80/- each.

    Consequent to the above said allotments, the paid up share capital of the Company was increased to Rs. 176,11,98,580/- (Rupees One Hundred Seventy Six Crore Eleven Lakh Ninety Eight Thousand Five Hundred Eighty Only) divided into 17,61,19,858 (Seventeen Crore Sixty One Lakh Nineteen Thousand Eight Hundred Fifty Eight) Equity Shares of Rs. 10/- each as at March 31, 2018. With respect to the above said allotments, the Company filed the Listing Application(s) for listing of the issued securities on the respective stock exchange(s) where the securities of the Company are listed and after the approval of the said listing application(s) the issued shares of the Company have been listed on BSE Limited and National Stock Exchange of India Limited.

    14. Subsidiaries, Joint Ventures, and Associate Companies

    As on March 31, 2018, the Company had 31 (Thirty One) direct and step down subsidiary Companies. Further the Company has entered into Joint Venture agreements with unincorporated JV’s for bidding of tenders & contracts the details of which is given in the note no. 32 & 33 to the standalone and note no. 34 & 35 to the consolidated financial statements. Also the Company is a member of an association of person (AOP) in which Company is having 60% share in profits.

    As per sub-section (3) of Section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements and performance of the Company’s subsidiaries and associate company for the year ended March 31, 2018, is included as per the prescribed format in this Annual Report. The Financial Statements of these subsidiaries are uploaded on the website of the Company in compliance with Section 136 of the Companies Act, 2013. The Financial Statements of these subsidiaries and the other related detailed information will be made available to any Member of the Company/its subsidiary(ies) seeking such information at any point of time and are also available for inspection by any Member at the Registered Office of the Company on all working days except Saturday and Sunday during business hours upto the date of the Annual General Meeting.

    During FY 2017-18, there has been no major change in the nature of business of your Company and its subsidiaries. During the year under review, the Company has transferred its entire stake in Star Transformers Ltd. (a subsidiary of the Company), along with Management Control.

    In terms of the Regulation 46(2)(h) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the policy for determining material subsidiaries is placed on the website of the Company -http://a2zgroup.co.in/ pdf/Policy on material subsidiary.pdf

    Report on the performance and financial position of each of the subsidiaries has been provided in Form AOC-1 and is forming part of the Annual Report as Annexure A.

    15. Auditors

    Statutory Auditors and Auditors’ Report

    M/s. Walker Chandiok & Co LLP (Firm Registration No. 001 076N/N500013), Chartered Accountants, were appointed as auditors of the Company from the conclusion of the Thirteenth Annual General Meeting (AGM) of the Company held on September 27, 2014 to the conclusion of the Eighteenth Annual General Meeting to be held for the Financial Year 2018-19. Vide notification dated May 7, 2018 issued by Ministry of Corporate Affairs, the requirement of seeking ratification of appointment of statutory auditors by members at each AGM has been done away with. Accordingly, no such item has been considered in the notice of the 17th Annual General Meeting.

    The auditor’s report presented by M/s Walker Chandiok & Co LLP, Statutory Auditors on the accounts of the company for the financial year ended March 31, 2018 is self-explanatory and requires no comments and the Management replies to the audit observations are as under:

    Explanation to Point (vii)(a), (b) & (viii) of Auditor’s report on Standalone Financials of A2Z Infra Engineering Ltd.

    In respect of auditor’s observation in Standalone financial statements regarding certain default in payment of interest and repayment of dues of banks and delay in depositing statutory dues.

    It is clarified that the delay arose on account of delayed realization of trade receivables coupled with delays in commencement of commercial production at its biomass based power generation plants. The approved CDR package of the Company which got implemented in March 2015 only, envisages the due payment towards statutory dues of the Company. Further, the Company has requested all its lenders to expedite the GAP funding proposal and has also fasten its process for realization of fund from old completed projects, which will result in better cash flow position from the projects. The management believes that by that way Company shall make the payments as and when the funds are released by the bankers.

    Explanation to Para 9(a) of Auditor’s report on Consolidated Financials of A2Z Infra Engineering Ltd., its subsidiaries, joint ventures and associates & Para 9 (a) of Auditor’s report on Standalone Financials of A2Z Infra Engineering Ltd.

    The management has performed impairment assessment of three cogeneration power plants set up in collaboration with certain sugar mills on Built, Own, Operate and Transfer (BOOT) basis for a period of 15 years. As at March 31, 2017, such plants have a power generation capacity of 15 MW each. The assessment has been done on the basis of assumptions of useful life of assets, discounted cash flows with significant underlying assumptions, achievement of certain operating capacity and the ability of new technology to perform on a consistent basis.

    Based on the assessment and advice from an independent legal counsel on the availability of concession period, including renewal period by exercising the option for renewal/ extension of the concession period, the management, is confident, that there exists reasonable certainty that arrangement shall be extended for a term of five (5) years. The management believes that the estimates of the useful lives are reasonable and no impairment exists in the carrying value of power generation plants.

    Explanation to para 9(b) of Auditor’s report on Consolidated Financials of A2Z Infra Engineering Ltd., its subsidiaries, joint ventures and associates & para 9 (b) of Auditor’s report on Standalone Financials of A2Z Infra Engineering Ltd.

    Contract revenue in excess of billings amounting to INR 8,381.36/- Lakh pertains to revenue recognized by the Company during earlier years, representing amounts billable to, and receivable from the customers towards work done on certain EPC contracts under execution by the Company in accordance with the terms implicit in the contract. The delay in billing of these amounts is on account of conclusion of reconciliations with the customers, pending joint measurement/ survey of the work done till date and nonachievement of milestones as per the contractual terms. Management is in discussions with the customers and expects to bill these amounts at the earliest, and believes that whilst it may take some time to bill and recover the amounts owing to completion of certain administrative and contractual matters, the current provision being carried in the books is adequate and no further material adjustments are considered necessary in respect of above balances.

    Explanation to para 9(c) of Auditor’s report on Consolidated Financials of A2Z Infra Engineering Ltd., its subsidiaries, joint ventures and associates & para 9

    (c) of Auditor’s report on Standalone Financials of A2Z Infra Engineering Ltd.

    The Income tax authorities conducted a search and survey at certain premises of the Company under section 132 and 133 of the Income Tax Act, 1961 in April 2012. During the year ended March 31, 2015, the Company received the Assessment Orders for the assessment years 2009-10 to 2013-14 from the Deputy Commissioner of Income Tax (DCIT) demanding additional tax liability of INR 1,992.17 Lakh. During the year ended March 31, 2015 The Company had filed appeals with Commissioner of Income Tax (CIT) (Appeals) challenging these orders against which the said authority has granted partial relief to the Company. The Company has further filed appeals with Income Tax Appellate Tribunal (ITAT) challenging the Orders for these assessment years in respect of the matters where the CIT(A) has not accepted the Company’s contention. Additionally, the DCIT has also filed appeals with the ITAT against the matters where the relief has been given to the Company.

    Further, during the current year, the Company has received penalty order for the Assessment year 2008-09 from CIT and for Assessment year 2011-12 and 2013-14 from Deputy Commissioner of Income Tax (DCIT) demanding additional tax liability of INR 798.63 lacs against which the Commissioner of Income Tax (CIT) (Appeals) had not granted relief to the Company. The Company has filed appeals with ITAT for the Assessment Year 2008-09 and with CIT(A) for the Assessment Year 2011-12 and 2013-14 challenging the penalty orders.

    Based on their assessment and upon consideration of advice from the independent legal counsel, the management believes that the Company has reasonable chances of succeeding before the ITAT /CIT(A) and does not foresee any material liability. Pending final decision on these matters no adjustment has been made in the financial statements.

    Explanation to para 9(d) of Auditor’s report on Consolidated Financials of A2Z Infra Engineering Ltd., its subsidiaries, joint ventures and associates & para 9 (d) of Auditor’s report on Standalone Financials of A2Z Infra Engineering Ltd.

    During financial year 2016-17, the Company based on the legal advice filed an application for advance ruling with the Advance Ruling Authorities (“the Authority”) regarding applicability of service tax in respect of one of the projects undertaken by them. During the year ended March 31, 2018, the Company has received response to its application wherein the Authority has opined that entire project is covered within the ambit of the service tax. Accordingly, the Company has recognized the service tax liability and based on the contractual terms which stipulates that any taxes shall be borne by the customer, has also recognized amount recoverable from customer of an equivalent amount. Further, the management believes that the interest, if any, on the delayed deposit of the aforementioned service tax liability is currently unascertainable and shall be reimbursed by the customer. The Company has made submissions with the customer in this regard.

    Additionally, based on the independent legal advice, the Company believes that the input tax credit in respect of the aforementioned project shall be adjustable against the liability considering the entire project has now been clarified to be covered under the service tax ambit. Accordingly, no further adjustments to the books of account are considered necessary.

    Explanation to para 9(e) of Auditor’s report on Consolidated Financials of A2Z Infra Engineering Ltd., its subsidiaries, joint ventures and associates & para 9 (e) of Auditor’s report on Standalone Financials of A2Z Infra Engineering Ltd.

    The following subsidiary companies, A2Z Waste Management (Jaipur) Limited, A2Z Waste Management (Varanasi) Limited and A2Z Waste Management (Moradabad) Limited, step-down subsidiaries of the Company have incurred net loss for the year ended March 31, 2018 aggregating INR 109.01 lacs, INR 3,910.65 lacs and INR 621.62 lacs respectively and as of that date their accumulated losses aggregating INR 768.50 lacs, INR 2,582.43 lacs and INR 984.76 lacs respectively resulting in complete erosion of the net worth and are presently facing liquidity problems on account of non-realization of trade receivables.

    Management is in the process of exploring various options to revive their business and has initiated arbitration proceedings against the respective municipal authorities for realization of the outstanding receivables. Based on independent legal advice, the management believes that amount recoverable from such arbitration proceedings shall be in excess of the aforementioned accumulated losses and shall result in the requisite cash inflow which shall resolve the liquidity issues being presently faced by the Company and support the management plan of revival of business. Hence, the financial statements of the aforementioned subsidiaries have been prepared on the assumption of going concern and no adjustment is necessary to be made in the consolidated financial Statements.

    Branch Auditors

    In terms of Section 143(8) of the Companies Act, 2013 read with Rule 12 of the Companies (Audit and Auditors) Rules, 2014, the audit of the accounts of the branch offices of the Company located outside India is required to be conducted by the person(s) or firm(s) qualified to act as Branch Auditors in accordance with laws of that country. The Board of Directors seeks approval of the Members to authorize the Board of Directors based on the recommendation of Audit Committee to appoint Auditors for the branch office(s) of the Company and also to fix their remuneration. The Board of Directors recommends to the Members to pass the resolution, as stated in Item No. 3 of the Notice, convening the forthcoming Annual General Meeting.

    Secretarial Auditor

    In terms of the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. DR Associates, Company Secretaries as Secretarial Auditors to conduct Secretarial Audit for the Financial Year 2017-18. The Secretarial Audit Report given by Mr. Suchitta Koley, a partner of M/s DR Associates, Company Secretaries in practice, New Delhi is given as Annexure B (Form MR-3) which forms part of this report.

    The said Secretarial Audit Report does not contain any qualification, reservation or adverse remark made by the secretarial auditor.

    Cost Auditors

    Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the cost records in respect of road and construction activity need to be audited. In compliance to the above, the Board of Directors upon the recommendation of the Audit Committee had appointed M/s HAM & Associates, as the Cost Auditors of the Company for the Financial Year ended March 31, 2019. In accordance with the above provisions the remuneration payable to the cost auditor should be ratified by the Members. Accordingly, the Board of Directors recommends to the Members to pass the resolution, as stated in Item No. 4 of the Notice convening the forthcoming Annual General Meeting.

    16. Corporate Social Responsibility (CSR)

    In accordance with the provisions of Section 135 of the Companies Act, 2013 and Rules framed thereunder, the Company has constituted a Corporate Social Responsibility Committee (CSR Committee) of the Board of Directors on August 14, 2014. The CSR Committee comprises of three Directors viz. Mr. Amit Mittal, Mr. Surender Kumar Tuteja and Ms. Dipali Mittal as members of the committee. The CSR Policy of the Company as recommended by the CSR Committee and approved by the Board is placed on the website of the Company and may be accessed via following link.-http://media.a2zgroup.co.in/pdf/CSR Policy A2Z.pdf

    The average net profits calculated as per provisions of Section 198 of the Companies Act, 2013 of the preceding three (3) financial years being negative, the Company was not under any obligation to spend any amount on CSR.

    17. DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment & Resignation of Directors/KMP’s

    1. Mr. Suresh Prasad Yadav who was appointed under the category of Non-Executive Independent Director effective from February 03, 2014 has resigned from his position w.e.f. July 24, 2017.

    2. Mr. Gaurav Jain, who was appointed under the category of Non-Executive Non-Independent Director effective from September 17, 2015 has resigned from his position w.e.f September 01, 2017.

    3. Ms. Dipali Mittal who was appointed under the category of Whole Time Director effective from April 01, 2005 has been re-designated as Non-Executive NonIndependent Director w.e.f August 14, 2017.

    4. Retire by Rotation

    In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Ms. Dipali Mittal, Director, retires by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offers herself for reappointment.

    5. Pursuant to the provisions of sub-section (51) of Section 2 and Section 203 of the Companies Act, 2013 read with the Rules framed thereunder, the Key Managerial Personnel (KMP) of the Company as on 31st March 2018, are:

    1. Mr. Amit Mittal, Managing Director

    2. Mr. Rajesh Jain, Whole Time Director & CEO

    3. Dr. Ashok Kumar Saini, Whole Time Director

    4. Mr. G. R. Nagendran, Chief Financial Officer

    5. Mr. Atul Kumar Agarwal, Company Secretary

    18. Policy on Directors’ appointment and Remuneration

    As on March 31, 2018, the Board consists of six members, three of whom are Executive or Whole Time Directors, one is Non-Executive and Non-Independent Woman Director and other two are Independent Directors.

    The Policy of the Company on Directors’ appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub section (3) of section 178 of the Companies Act, 2013, is also available on the Company’s website. There has been no change in the policy since the last financial year. We affirm that the remuneration paid to directors is as per terms laid out in the Nomination and Remuneration Policy of the Company.

    19. Declaration by Independent Director(s)

    The Company has received necessary declaration from each of the Independent Directors under section 149(7) of the Companies Act, 2013 that they meet the criteria of independence as laid down in section 149(6) of the Companies act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.

    20. Annual evaluation of Board Performance and Performance of its committees and Individual Directors

    The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India (“SEBI”) under SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 and as per the guidance note issued by SEBI dated January 5, 2017 vide its Circular No. SEBI/HO/CFD/CMD/CIR/P/2017/004.

    The performance of the Board was evaluated by the members of the Board on the basis of the guidance note and criteria laid down such as the Board composition and structure, effectiveness of board processes, information and functioning, Board culture and dynamics, quality of relationship between the Board and the Management and efficacy of communication with external stakeholders, competence and experience of Board to conduct its affairs effectively, operations are in line with strategy, integrity of financial information and the robustness of financial and other controls, effectiveness of risk management processes, etc.

    The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the guidance note and criteria laid down such as the composition of committees, effectiveness of committee meetings, committees are appropriate with the right mix of knowledge and skills, effectiveness and advantage of the Committee, independence of the Committees, etc.

    The Board and the Nomination & Remuneration Committee (“NRC”) reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, willingness to devote time and effort to understand the company and its business by the directors, competency to take the responsibility and having adequate qualification, experience and knowledge, quality and value of their contributions at board meetings, effectiveness of Leadership quality of the Chairman etc. In a separate meeting of Independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its committees and individual directors were also discussed.

    21. Number of meetings of the Board of Directors

    During the year eight meetings of the members of Board and one meeting of Independent Directors were held, the details of which are given in Corporate Governance Report. The provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, were adhered to while considering the time gap between two consecutive meetings.

    22. Disclosures Related to Committees and Policies

    a. Audit Committee

    The Audit Committee of Directors was reconstituted by the Board of Directors of the Company in accordance with the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. The Audit Committee as on 31st March 2018, comprises of:

    1. Mr. Surender Kumar Tuteja, Chairman

    2. Dr. Ashok Kumar, Member

    3. Mr. Rajesh Jain, Member

    During the year under review, the Board of Directors of the Company had accepted all the recommendations of the Committee.

    b. Nomination and Remuneration Committee

    The Nomination and Remuneration Committee of Directors was reconstituted by the Board of Directors of the Company in accordance with the requirements of Section 178 of the Companies Act, 2013 & Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Nomination and Remuneration Committee as on 31st March 2018, comprises of the following directors:

    1. Dr. Ashok Kumar, Chairman

    2. Mr. Surender Kumar Tuteja, Member

    3. Ms. Dipali Mittal, Member

    c. Stakeholders Relationship Committee

    The Stakeholders Relationship Committee of Directors was reconstituted by the Board of Directors of the Company in accordance with the requirements of Section 178 of the Companies Act, 2013 and Regulation 20 of SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015. The Stakeholders Relationship Committeeas on 31st March 2018, comprising the following Directors:

    1. Dr. Ashok Kumar, Chairman

    2. Mr. Surender Kumar Tuteja, Member

    3. Ms. Dipali Mittal, Member

    23. Remuneration Policy for the Directors, Key Managerial Personnel and other employees

    In terms of the provisions of Section 178(3) of the Act and Para A of Part D under Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination & Remuneration Committee is responsible for formulating the criteria for determining qualification, positive attributes and independence of a Director. The Nomination & Remuneration Committee is also responsible for recommending to the Board a policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees. In line with this requirement, the Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, KMP and Senior Management and their remuneration.

    The Remuneration Policy of the Company can be accessed via following link.-http://a2zgroup.co.in/pdf/Remuneration Policy.pdf

    24. Vigil Mechanism / Whistle Blower Policy

    The Board has pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, framed “Vigil Mechanism (Whistle Blower) Policy” (“the Policy”)’ to deal with instances of fraud and mismanagement, if any. This Policy has formulated to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The said policy is placed on the website of the Company and may be accessed at a link:-http://a2zgroup.co.in/pdf/Whistle Blowe 13 Apr 2015.pdf.

    This vigil mechanism of the Company is overseen by the Audit Committee and provides adequate safeguard against victimization of employees and directors who avail of the vigil mechanism and also provide direct access to the Chairperson of the Audit Committee in appropriate or exceptional circumstances.

    25. Particulars of Loans, Guarantees or Investments under Section 186

    Company being the infrastructure Company, Section 186 is not applicable on the Company and particulars of loans, guarantees, investments form part of the notes to the Financial Statements provided in this Annual Report. All the loans, guarantees and investments made are in compliance with the provisions of the Companies Act, 2013 and the same are disclosed in the Financial Statements.

    26. Related Party Transactions:

    Related party transactions that were entered into during the financial year were in the ordinary course of business and on an arm’s length basis.

    The particulars of the contract or arrangements with related parties during the financial year 2017-18 are disclosed in Form No. AOC -2 which forms part of the Annual Report as an Annexure C. Except as stated in the disclosure, there were no materially significant related party transactions made by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

    The Policy on materiality of related party transactions as also dealing with related party transactions as approved by the Board may be accessed on the Company’s website at the link: http://a2zgroup.co.in/pdf/Related Party Policy 13 Apr 2015.pdf.

    All Related Party Transactions which were in the ordinary course of business and on arm’s length basis were placed before the Audit Committee for their approval. Prior omnibus approval of the Audit Committee is obtained on annual basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their ratification on quarterly basis.

    27. Employee Stock Option Plan

    The Nomination & Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the A2Z Stock Option Plan 2010 (ESOP 2010), A2Z Employees Stock Option Plan 2013 (EsOp 2013), A2Z Employees Stock Option Plan 2014 (ESOP 2014), A2Z Employees Stock Option Plan 2013 (Re-grant-I)(ESOp 2013 Re-grant I) and A2Z Employees Stock Option Plan 2014 (Re-grant-I)(ESOP 2014 Re-grant I) of the Company in accordance with the applicable SEBI Guidelines.

    The applicable disclosures as stipulated under the SEBI Guidelines as on 31st March 2018 with regard to the ESOP 2010, ESOP 2013, ESOP 2014 and ESOP 2013 Re-grant I & ESOP 2014 Re-grant I are provided in Annexure D to this Report.

    The certificates from the Auditors of the Company that the Schemes have been implemented in accordance with the SEBI Guidelines/ SEBI (Share Based Employee Benefits) regulations and the resolution passed by the members would be placed at the Annual General Meeting for inspection by members.

    28. Extract of Annual Return

    Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return as per Form- MGT-9 for the financial year ended March 31, 2018 made under the provisions of Section 92(3) of the Act is attached as Annexure E which forms part of this Report.

    29. Prevention of Sexual Harassment at Workplace:

    As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 read with 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.

    30. Particulars of Employees and Related Disclosures

    Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure F.

    31. Conservation of Energy, Technology absorption, Foreign Exchange Earnings and Outgo

    Pursuant to provisions of Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 the details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are attached as Annexure G which forms part of this report.

    32. Disclosure requirements

    a. As per Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, Corporate Governance report with auditors’ certificate from DR Associates thereon and Management Discussion and Analysis are attached, which form part of this report.

    b. Details of the familiarization program of the independent directors are available on the websiteof the Company (URL:http://a2zgroup.co.in/pdf/Familiarization Programme for Independent Directors).

    c. In terms of Regulation 17(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Chief Executive officer and the Chief Financial officer furnished a certificate to the Board of Directors in the prescribed format for the year under review which has been reviewed by the Audit Committee and taken on record by the Board.

    33. Listing

    The Equity Shares of the Company continue to remain listed on BSE Limited (formerly The Bombay Stock Exchange Limited) and National Stock Exchange of India Limited (NSE). The stipulated listing fees for FY 2018-2019 have been paid to both the Stock Exchanges.

    34. Risk Management Policy

    Risk management forms an integral part of the business planning and review cycle. The Company’s Risk Management Policy is designed to provide reasonable assurance that objectives are met by integrating management control into the daily operations, by ensuring compliance with legal requirements and by safeguarding the integrity of the Company’s financial reporting and its related disclosures.

    Therefore, in accordance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board members were informed about risk assessment and minimization procedures after which the Board formally adopted steps for framing, implementing and monitoring the risk management policy for the company in their meeting held on November 13, 2014.

    The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.

    In today’s challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks inter alia are: Competition, Business risk, Technology obsolescence, Investments, retention of talent and expansion of facilities. Business risk, inter-alia, further includes financial risk, political risk, fidelity risk, legal risk.

    As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.

    35. Directors’ Responsibility Statement

    Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that:

    a. In the preparation of the annual accounts for the Financial Year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

    b. The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at March 31, 2018 and of the profit and loss of the company for that period;

    c. The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

    d. The directors have prepared the annual accounts on a going concern basis; and

    e. The directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

    f. The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

    36. Fraud Reporting

    There was no fraud reported by the Auditors of the Company under Section 143(12) of the Companies Act, 2013, to the Audit Committee or the Board of directors during the year under review.

    37. General

    Your Directors state that no disclosure or reporting is required in respect of the following items (as there were no transactions/instances on the below mentioned items) during the year under review:

    1. No profits were transferred to any Reserves.

    2. No Voluntary revision of Financial Statements or Board’s Report.

    3. No director who is in receipt of any commission from the Company and who is a Managing Director or Wholetime Director of the Company has received any remuneration or commission from any Holding Company or Subsidiary Company of the Company.

    However, Mr. Amit Mittal, Managing Director of the Company has been appointed as Managing Director in A2Z Infraservices Ltd. (“AISL’), a material subsidiary Company on October 24, 2015. He is in receipt of Rs. 48,00,000/- as remuneration in his capacity as Managing Director of AISL for the financial year 2017-18.

    38. Acknowledgement

    Your Directors wish to place on record the support, assistance and guidance provided by the financial institutions, banks, customers, suppliers and other business associates. We would like to thank our Company’s employees for their efforts and high degree of commitment and dedication. Your Directors especially appreciate the continued understanding and confidence of the Members.

    For and on behalf of Board of Directors

    (Surender Kumar Tuteja)

    Date : August 14, 2018 Chairman

    Place : Gurugram DIN-00594076

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