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A2Z Infra Engineering Ltd.

BSE: 533292 Sector: Engineering
NSE: A2ZINFRA ISIN Code: INE619I01012
BSE LIVE 15:56 | 09 Dec 42.10 1.85
(4.60%)
OPEN

40.45

HIGH

43.00

LOW

39.85

NSE LIVE 15:49 | 09 Dec 42.10 1.75
(4.34%)
OPEN

40.60

HIGH

42.90

LOW

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OPEN 40.45
PREVIOUS CLOSE 40.25
VOLUME 390197
52-Week high 51.65
52-Week low 16.50
P/E
Mkt Cap.(Rs cr) 547.72
Buy Price 42.10
Buy Qty 454.00
Sell Price 0.00
Sell Qty 0.00
OPEN 40.45
CLOSE 40.25
VOLUME 390197
52-Week high 51.65
52-Week low 16.50
P/E
Mkt Cap.(Rs cr) 547.72
Buy Price 42.10
Buy Qty 454.00
Sell Price 0.00
Sell Qty 0.00

A2Z Infra Engineering Ltd. (A2ZINFRA) - Auditors Report

Company auditors report

To

The Members of

A2Z Infra Engineering Limited

(formerly known as "A2Z Maintenance & Engineering

Services Limited")

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of A2Z InfraEngineering Limited (formerly known as "A2Z Maintenance & Engineering ServicesLimited") ("the Company") which comprise the Balance Sheet as at March 312016 the Statement of Profit and Loss the Cash Flow Statement for the year then ended anda summary of the significant accounting policies and other explanatory information inwhich are incorporated the returns for the year ended on that date audited by the branchauditors of the Company's branches at Zambia and Uganda.

Management's Responsibility for the Standalone Financial Statements

2. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014 (as amended). This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act; safeguarding the assetsof the Company; preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

4. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

5. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial controls relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2016 and its loss and its cash flows for the year ended on that date.

Emphasis of Matters

9. We draw attention to:

(i) Note 14.1 to the standalone financial statements which describes the uncertaintyrelating to the assumptions used by management with respect to the impairment assessmentof the cogeneration power plants and availability of the extension in the concessionperiod for an additional term.

(ii) Note 23.1 to the standalone financial statements with respect to unbilledreceivables relating to certain contracts which are still in progress aggregating to Rs.1204118263 recognized in the earlier years. Management based on ongoing discussions/negotiations with the customers believes that these amounts are completely billable andaccordingly no adjustments have been made in the standalone financial statements.

(iii) Note 33(a) to the standalone financial statements which describes the uncertaintyrelating to the outcome of litigation pertaining to income tax matters pursuant toassessment orders received by the Company for the assessment years 2009-10 to 2013-14against which management has filed appeals with Income Tax Appellate Tribunal (ITAT).Pending the final outcome of these matters which is presently unascertainable no furtheradjustments have been made in the standalone financial statements.

Our opinion is not modified in respect of above matters.

Other Matter

10. We did not audit the financial statements of certain branches included in thesefinancial statements whose financial statements reflect total revenues (after eliminatingintragroup transactions) of Rs. 188490086 and net loss after tax and prior period items(after eliminating intra-group eliminations) of Rs. 19718647 for the year ended March31 2016 and total assets of Rs. 197334549 as at March 31 2016. These financialstatements and other financial information have been audited by other auditors whose auditreports have been furnished to us and our opinion in respect thereof is based solely onthe audit reports of such other auditors. Our opinion is not modified in respect of thismatter.

Report on Other Legal and Regulatory Requirements

11. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order.

12. Further to our comments in Annexure I as required by Section143(3) of the Act wereport that:

a. we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus;

c. the reports on the accounts of the branch offices of the Company audited underSection 143(8) of the Act by the branch auditors have been sent to us and have beenproperly dealt with by us in preparing this report;

d. the standalone financial statements dealt with by this report are in agreement withthe books of account and with the returns received from the branches not visited by us;

e. in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 (as amended);

f. the matters described in paragraph 9 under the Emphasis of Matters paragraph in ouropinion may have an adverse effect on the functioning of the Company;

g. on the basis of the written representations received from the directors as on March31 2016 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2016 from being appointed as a director in terms ofSection164(2) of the Act;

h. we have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as of March 31 2016 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated May 28 2016 as per annexure II expressed an unqualified opinion.

i. with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. as detailed in Note 33 to the standalone financial statements the Company hasdisclosed the impact of pending litigations on its standalone financial position;

ii. the Company as detailed in Note 34 to the standalone financial statements hasmade provision as required under the applicable law or accounting standards for materialforeseeable losses if any on long-term contracts.The Company did not have any derivativecontracts;

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For Walker Chandiok & Co LLP

(formerly Walker Chandiok & Co)

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Sd/-
per Neeraj Sharma
Place: Gurgaon Partner
Date : May 28 2016 Membership No.: 502103

Annexure I to the Independent Auditor's Report of even date to the members of A2Z InfraEngineering Limited (formerly known as "A2Z Maintenance & Engineering ServicesLimited") on the standalone financial statements for the year ended March 31 2016

Annexure I

Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular program of physical verification of its fixed assetsunder which fixed assets are verified in a phased manner over a period of 3 years whichin our opinion is reasonable having regard to the size of the Company and the nature ofits assets. In accordance with this program certain fixed assets were verified during theyear and no material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties are held in the name of theCompany.

(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies between physicalinventory and book records were noticed on physical verification.

(iii) The Company has granted unsecured loans to companies covered in the registermaintained under Section 189 of the Act; and with respect to the same:

(a) in our opinion the terms and conditions of grant of such loans are not primafacie prejudicial to the Company's interest.

(b) the schedule of repayment of the principal and the payment of the interest has notbeen stipulated and hence we are unable to comment as to whether repayments/receipts ofthe principal amount and the interest are regular;

(c) in the absence of stipulated schedule of repayment of principal and payment ofinterest we are unable to comment as to whether there is any amount which is overdue formore than 90 days and whether reasonable steps have been taken by the Company for recoveryof the principal amount and interest.

(iv) In our opinionthe Company has complied with the provisions of Sections 185 and186 of the Act in respect of loans investments guarantees and security.

(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersubsection (1) of Section 148 of the Act in respect of Company's products/services and areof the opinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of customs duty of excise valueadded tax cess and other material statutory dues as applicable have not been regularlydeposited to the appropriate authorities and there have been significant delays in a largenumber of cases. Undisputed amounts payable in respect thereof which were outstanding atthe year-end for a period of more than six months from the date they became payable are asfollows:

Statement of arrears of statutory dues outstanding for more than six months

Name of the statute Nature of the dues Amount (Rs.) Period to which the amount relates Due date Date of payment
Employee Welfare Fund Payable Employee welfare fund 63507 March 2015 to August 2015 25th day of subsequent month Not yet paid
Madhya Pradesh Professional Tax Act 1995 Professional tax 568957 July 2012 to August 2015 10th day of subsequent month Not yet paid
West Bengal State Tax on Professions Trades Callings and Employments Act1979 Professional tax 31750 March 2015 to August 2015 21st day of subsequent month Not yet paid

(b) The dues outstanding in respect of income-tax sales-tax service tax duty ofcustoms duty of exciseand value added tax on account of any dispute are as follows:

Statement of Disputed Dues

Name of the statute Nature of dues Amount (Rs.) Amount Paid Under Protest (Rs.) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Demand made under section 153A & 153B 199216987 - AY-2009-10 to 2013-14 Income Tax Appellate Tribunal Delhi
Bihar Value Added Tax Act 2005 Bihar Value Added Tax 8354879 - 2010-11 Assessing Officer Commercial tax Bihar
Bihar Value Added Tax 43198065 - 2012-13 Honorable High Court Patna
Jharkhand Value Added Tax Act 2005 Jharkhand Value Added Tax 13845739 5823531 2008-09 to 2011-12 Commissioner Commercial tax Ranchi Jharkhand
The West Bengal Value Added Tax Act 2003 Works Contract Tax 65310875 5000000 2009-10 West Bengal Commercial Taxes Appellate & Revisional Board Kolkata
West Bengal Value Added Tax 101939698 17500000 2010-11 West Bengal Commercial Taxes Appellate & Revisional Board Kolkata
Central Sales Tax 5412848 2010-11 West Bengal Commercial Taxes Appellate & Revisional Board Kolkata
West Bengal Central Sales Tax 22915835 - 2011-12 Additional Commissioner (Appeals) Sales Tax
The Maharashtra Value Added Tax Act 2002 Central Sales Tax 13142012 - 2007-08 Joint Commissioner (Appeal) Mumbai Maharashtra
Maharashtra Value Added Tax 180178725 - 2008-09 Maharashtra Sales Tax Tribunal
Maharashtra Value Added Tax 1552490 - 2009-10 Joint Commissioner (Appeal) Mumbai Maharashtra
Central Sales Tax 15406040 - 2009-10 Joint Commissioner (Appeal) Mumbai Maharashtra
Maharashtra Value Added Tax 2287862 - 2010-11 Joint Commissioner (Appeal) Mumbai Maharashtra
Central Sales Tax 22598631 - 2010-11 Joint Commissioner (Appeal) Mumbai Maharashtra
AP Value Added Tax Act 2005 Andhra Pradesh Value Added Tax 6294726 3125000 2010-11 AP Sales Tax and VAT Appellate Tribunal Hyderabad
Jammu and Kashmir Value Added Tax Act 2005 J&K Value Added Tax 8602146 2012-13 Deputy Commissioner Commercial Taxes (Appeals) Jammu
The Madhya Pradesh VAT Act 2002 Central Sales Tax 10304904 4533692 2011-12 Commercial Tax Tribunal Madhya Pradesh
Central Sales Tax 8995531 910000 2012-13 Joint Commissioner Indore Madhya Pradesh
Entry Tax 331785 207289 2012-13 Joint Commissioner Indore Madhya Pradesh
The Delhi Value Added Tax Act 2004 Value Added Tax 5226423 - 2010-11 Joint Commissioner Delhi
Value Added Tax 6050200 - 2010-11 Joint Commissioner Delhi
Haryana VAT Act Central Sales Tax 193049921 - 2009-10 Sales Tax TribunalChandigarh

(viii)There are no dues payable to debenture-holders or Government.The Company hasdefaulted in repayment of loans and borrowings to the following banks and financialinstitutions during the year which is detailed below:

Particulars

Default (in months)

Banks (0-3) (3-6) (6-12) (12-24) (More than 24)
Allahabad Bank 30017247 5256179 3494820 - -
Axis Bank 26261734 1903620 450248 - -
HSBC Bank 1638944 2450359 5417447 17219050 4387824
ICICI Bank 74389999 80658721 104674246 - -
IDBI Bank 142607532 3061240 - - -
Yes Bank 252768059 1060822 - - -
DBS Bank 14432674 21958308 49988207 635262668 52803234
State Chartered Bank 18159951 27144594 61145483 92426216 66862065
Indusind Bank 15247457 683687 231549 - -
ING Vyasa Bank 27544465 1748809 2854626 - -
State Bank of Patiala 188659853 - - - -
State Bank of Hyderabad 3082797 4712268 11338046 3745795 -
State Bank of India 10529282 16369357 39401177 21668510 1944454
State Bank of Mysore 16683893 1951059 - - -
State Bank of Travancore 21674986 1023883 154750 - -
Union Bank of India 20574628 2930690 71185 - -
Financial Institutions:
SREI Equipment Finance Limited 289559 436941 1059420 1917290 15037051
State Industrial & Investment corporation of Maharashtra Limited (SICOM) 12295082 18904110 43869863 75000000 571023460

(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes for which the loans were obtained.

(x) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period covered by our audit.

(xi) Managerial remuneration has been paid by the companyin accordance with therequisite approvals mandated by the provisions of Section 197 of the Act read withSchedule V to the Act except for in following cases:

Payment made to Financial year Amount Paid/ provided in excess of limits prescribed (Rs) Amount due for Recovery as at March 31 2016 (Rs) Steps taken to secure the recovery of the amount Remarks (if any)
Managing Director 2012-13 9453744 8453744 The Company has obtained a confirmation from the Managing Director that such amount has been held in trust will be repaid as per agreed plan. Amount recoverable pertains to non-grant of requisite approval by Central Government under the provision of 198 309 & 310 of erstwhile Companies Act 1956.
2013-14 9494496 9494496

(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3 (xii) of the Order are not applicable.

(xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable accountingstandards.

(xiv) During the year the Company has made preferential allotment/ private placementof shares. In respect of the same in our opinion the Company has complied with therequirement of Section 42 of the Act and the Rules framed thereunder. Further in ouropinion the amounts so raised have been used for the purposes for which the funds wereraised. During the year the Company did not make preferential allotment/ privateplacement of convertible debentures

(xv) In our opinionthe Company has not entered into any noncash transactions with thedirectors or persons connected with them covered under Section 192 of the Act.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For Walker Chandiok & Co LLP

(formerly Walker Chandiok & Co)

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Sd/-
per Neeraj Sharma
Place: Gurgaon Partner
Date : May 28 2016 Membership No.: 502103

Annexure II to the Independent Auditor's Report of even date to the members of A2ZInfra Engineering Limited(formerly known as "A2Z Maintenance & EngineeringServices Limited") on the standalone financial statements for the year ended March31 2016

Annexure II

Independent Auditor's report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

1. In conjunction with our audit of the standalone financial statements of A2Z InfraEngineering Limited (formerly known as "A2Z Maintenance & Engineering ServicesLimited") ("the Company") as of and for the year ended March 31 2016 wehave audited the internal financial controls over financial reporting (IFCoFR) of theCompany of as of that date.

Management's Responsibility for Internal Financial Controls

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on "the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India". Theseresponsibilities include the designimplementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of the company's business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's IFCoFR based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India (ICAI) and deemed to be prescribed undersection 143(10) of the Act to the extent applicable to an audit of IFCoFR and theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate IFCoFR were established and maintained and ifsuch controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness.Our audit of IFCoFR included obtaining anunderstanding of IFCoFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

6. A company's IFCoFR is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sIFCoFR includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detailaccurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of IFCoFR including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of the IFCoFRto future periods are subject to the risk that IFCoFR may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2016 based on "theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India".

For Walker Chandiok & Co LLP

(formerly Walker Chandiok & Co)

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Sd/-
per Neeraj Sharma
Place: Gurgaon Partner
Date : May 28 2016 Membership No.: 502103

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