The Members of
A2Z Infra Engineering Ltd.
Your Directors take pleasure in presenting the 18th Annual Report togetherwith the annual audited financial statements for the year ended March 312019.
1. Financial summary or highlights/Performance of the Company
The highlights of financial results on Standalone and Consolidated basis for thefinancial year ended on March 312019 are as follows:
| || |
|Particulars ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Income || || || || |
|Revenue from Operations ||50732.52 ||35751.56 ||86870.11 ||70853.82 |
|Add: Other Income ||1668.21 ||3697.86 ||1932.96 ||4310.47 |
|Total Income ||52400.73 ||39449.42 ||88803.07 ||75164.29 |
|Expenses || || || || |
|Cost of Material Consumed ||39921.52 ||27804.66 ||47827. 75 ||35817.12 |
|Purchase of Stock in Trade ||- ||2602.17 ||- ||2602.17 |
|Changes in Inventories ||- ||- ||(0.58) ||294.55 |
|Employee benefit expenses ||2143.03 ||2219.43 ||26246.58 ||26501.06 |
|Finance Cost ||4109.94 ||12978.07 ||5977.90 ||20599.69 |
|Depreciation and amortization expenses ||1108.48 ||1284.70 ||2698.67 ||3264.75 |
|Other Expenses ||4477.07 ||5845.46 ||7036.18 ||8149.34 |
|Total Expenses ||51760.04 ||52734.49 ||89786.50 ||97228.68 |
|Profit/(Loss) before Exceptional Items share of net profit of investments accounted for using equity method and tax ||640.69 ||(13285.07) ||(983.43) ||(22064.39) |
|Share of net loss of investments accounted for using equity method ||- ||- ||(974.83) ||- |
|Profit/ (Loss) before Exceptional Items and Tax ||640.69 ||(13285.07) ||(1958.26) ||(22064.39) |
|Exceptional Items-gain ||2690.55 ||1828.89 ||31344.07 ||13557.23 |
|Profit/ (Loss) before Tax ||3331.24 ||(11456.18) ||29385.81 ||(8507.16) |
|Tax expense || || || || |
|Current Tax ||71.55 ||22.77 ||518.24 ||190.85 |
|Tax expense relating to prior years ||- ||- ||- ||1.39 |
|Deferred Tax (Net) ||47.47 ||(2.01) ||144.43 ||45.01 |
|Total Tax Expense ||119.02 ||20.76 ||662.67 ||237.25 |
|Profit/ (Loss) for the year ||3212. 22 ||(11476.94) ||28723.14 ||(8744.41) |
|Other Comprehensive Income || || || || |
|i) Items that will not be reclassified to profit and loss ||35.32 ||40.31 ||272.94 ||71.26 |
|ii) Income Tax relating to Items that will not be reclassified to profit and loss ||- ||- ||(73.88) ||- |
|Total Other Comprehensive Income ||35.32 ||40.31 ||199.06 ||71.26 |
|Total Comprehensive income (Comprising (Loss)/ Profit and other Comprehensive Income) ||3247.54 ||(11436.63) ||28922.20 ||(8673.15) |
Note: The above figures are extracted from the standalone and consolidated annualfinancial 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 an increase of41.90%. The Company has achieved a Turnover of INR 50732.52 Lakh as against INR 35751.56Lakh in the previous year. The Company has made net Profit after tax of INR 3212.22 Lakhwhereas in the previous year Company had incurred net Loss of INR 11476.94 Lakh.
The Net Worth of the Company has increased to INR 64775.29 Lakh as at the end of thecurrent year from INR 61336.63 Lakh as at the end of the previous year representingincrease in Net Worth by 5.61%.
The Debt Equity ratio of the Company has improved/changed to 0.53 as at the end of thecurrent year as compared to 1.20 as at the end of the previous year.
The Consolidated Turnover of the Company for the current financial year is INR 86870.11 Lakh as against INR 70853.82 Lakh in the previous year representing increase inTurnover by 22.60%. The Company on consolidated basis has made a net Profit of INR28723.14 Lakh as against a loss of INR 8744.41 Lakh in the previous year.
The Consolidated Net Worth of the Company has increased to INR 68551.96 Lakh as at theend of the current year from INR 37195.45 Lakh as at the end of previous yearrepresenting increase in Net Worth by 84.30 %.
The Consolidated Debt Equity ratio of the Company has improved/changed to 0.63 as atthe end of the current year compared to 3.39 as at the end of previous year.
2. Consolidated Financial Statements
The Audited Consolidated Financial Statements of your Company as on March 31 2019have been prepared in accordance with the relevant Indian Accounting Standards (Ind AS)issued by Accounting Standards Board(ASB) and Regulation 33 of Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 andprovisions of the Companies Act 2013.
In accordance with Section 129(3) of the Companies Act 2013 and Schedule V ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 the Consolidated Financial Statements of the Company including thefinancial details of all the subsidiary companies of the Company forms a part of thisAnnual Report.
Due to inadequacy of profit the Board of Directors does not recommend any dividend forthe financial year ended March 312019.
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 theCompany provides integrated design testing installation construction and commissioningservices on a turn-key basis to its clients. The Company's projects include ruralelectrification railway overhead electrification reduction of AT&C losses feederrenovation underground cabling feeder segregation installing High Voltage DistributionSystem ("HVDS") and Low Voltage Distribution System ("LVDS")distribution lines and transmission lines. The Company has strong capabilities to buildoperate and maintain:
Substations & Switchyards up to 765 kV.
Transmission lines up to 765 kV.11 / 33 kV distribution lines comprising ofFeeder Renovation Projects High Voltage Distribution System AT&C Loss ReductionTube Well Connection Segregation of Domestic and Agriculture load Augmentation of LinesProviding Laying of HT & LT Aerial Bunched Cables and Offering BPL Connections.
220kV substation Bay project in DVC West-Bengal.
Company has its overseas presence in Nepal Zambia Uganda and Tanzania.
Under Engineering Services segment we may pursue infrastructure projects like SewageNetwork & Treatment Plants Gas Distribution Networks and Metro projects in selectcities.
We have also completed projects in various states of India including Jammu &Kashmir Rajasthan Orissa Bihar Arunachal Pradesh Jharkhand Kerala and HimachalPradesh.
Telecom Infrastructure EPC
Telecom Infrastructure Projects is the main business activity of the Company. Majorofferings by Company in Telecom Infrastructure EPC are supplying laying and maintainingof Optical Fibre Cables (OFC) networks. EPC services offered by the Company under thissegment include:
Optical Fiber Cable NLD / Access Networking Construction & Maintenance
Telecom Infrastructure Operation & Maintenance Services
Material Planning & Project Management
Radio Frequency Engineering Services
Engineering Construction & Infrastructure Services
Your Company is successfully executing orders for construction of Telecom NetworkBackbone on Turnkey basis in the untapped toughest terrains of the country like LehLadakh and North East India which will help in building the optical Network to connecteach and every part of the Nation. We combine a proven track record and professionalskills woven together with a culture of trust. Your Company is now expanding it's systemintegration capabilities while promoting latest IP Transport technology such as SDN(Software Defined Network) which will change the way current IP Transport and distributionnetworks are working and will help Telecom operators & large government organizationsto unleash the potential of this latest technology by bringing down their CAPEX and OPEXcost to build & maintain such networks.
Your Company is also considering to promote 5G technology while working with large OEMsdealing with various types of sensors. This will eventually help in various Smart Citiessolutions such as smart road smart water smart metering etc.
To cater to the vision of developing India through Smart Cities Project your Companyis also planning to foray into the area of building and operating Surveillance NetworksAviation 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 GreenEnergy. The Company is planning to build scale in Green Technology solutions in all areasof the power sector starting from generation of power to its distribution to endconsumers. The Company has collaborated with sugar mills for setting up three power plantson Built Own Operate and Transfer (BOOT) basis for a period of 15 years in the state ofPunjab.
To ensure continuous supply of Refuse Derived Fuel (RDF) to the respective the PowerPlants the Company has developed an indigenous process in its waste processing plant forrunning the said Plants on Refuse Derived Fuel (RDF) from Municipal Solid Waste. CurrentlyCompany is running its Nakodar Power Plant producing electricity using RDF as feed stock.
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 Company hasentered into One Time Settlement (OTS) with DBS Bank Limited ("DBS Bank") andhas signed the Settlement Agreement with DBS Bank on June 212019 to settle all theoutstanding dues (including interest) for an amount of INR 3000 Lakh in terms of the saidSettlement Agreement.
7. Updates on Corporate Debt Restructuring (CDR)
Corporate Debt Restructuring (CDR) package of Company for restructuring of its debtswas approved by Corporate Debt Restructuring Empowered Group ("CDR EG") and thesame has been successfully implemented and CDR Lenders of the Company have appointedSBICAP Trustee Company Limited (SBICAP) as their Security Trustee on the terms andconditions contained in Security Trustee Agreement executed on March 27 2014 among theCompany Lenders and the Security Trustee.
Your Company is working assiduously to reduce the debt burden and in line with thisstrategy the Company has entered into One Time Settlement Agreements with various Lendersincluding SICOM Limited Edelweiss Asset Reconstruction Company Limited as representativeof EARC Trust SC 299 for the Loan assigned by Yes Bank Limited Standard Chartered BankHong Kong and Shanghai
Banking Corporation Limited State Bank of India Edelweiss Asset ReconstructionCompany Limited as representative of EARC trust SC 217 for the Loan assigned by ICICI BankLtd. and DBS Bank Ltd. till date.
8. Scheme of Arrangement / Reconstruction / ReOrganization
The Scheme of Arrangement/Reconstruction/Re- Organization ("theScheme") between your Company and its Secured Creditors under Sections 391 to 394 ofthe 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 bythe Board of Directors during the F.Y. 2014-15.
The Company's Petition for first Motion has been disposed off by the Hon'ble High Courtof Punjab & Haryana at Chandigarh and the Company has filed a Petition for SecondMotion and the matter is presently sub-judice with the NCLT/ Hon'ble High Court of Punjab& Haryana at Chandigarh.
During the year under review the Company has not accepted any deposits within themeaning of Sections 2(31) and 73 of the Companies Act 2013 and the Rules framedthereunder and any re-enactments thereof and consequently there was no amount ofprincipal or interest was outstanding towards the Public deposit as on the date ofFinancial Statements.
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 Tribunalwhich 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 toensure:
- 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 businessprocesses are reviewed by the Management before reporting to the Audit Committee. TheAudit Committee then reviews the Internal Audit reports and the status of implementationof the agreed action plan. This system of internal control facilitates effectivecompliance of Section 138 of Companies Act 2013 and the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015.
The internal auditor of the company checks and verifies the internal control andmonitors them in accordance with policy adopted by the company. The Board regularlyreviews the
effectiveness of controls and takes necessary corrective actions where weaknesses areidentified as a result of such reviews. This review covers entity level controls processlevel controls fraud risk controls. Based on this evaluation there is nothing that hascome to the attention of the Directors to indicate any material break down in thefunctioning of these controls procedures or systems during the year. There have been nosignificant events during the year that have materially affected or are reasonably likelyto materially affect our internal financial controls.
12. Secretarial Standards
The Company is in Compliances with the Secretarial Standards issued by the Institute ofCompany Secretaries of India (ICSI) on Meetings of the Board of Directors (SS-1) andGeneral Meetings (SS-2).
13. Share Capital Authorised Share Capital:
During the year under review the Authorised Share Capital of the Company is INR2400000000 (Indian Rupees Two Hundred Forty Crore Only) divided into 240000000(Twenty Four Crore) equity shares of INR 10/- (Indian Rupees Ten only) each.
Paid up Share Capital:
The Company has not issued any shares during the year the paid up share capital of theCompany stood INR 1761198580/- (Indian Rupees One Hundred Seventy Six Crore Eleven LakhNinety Eight Thousand Five Hundred Eighty Only) divided into 176119858 (Seventeen CroreSixty One Lakh Nineteen Thousand Eight Hundred Fifty Eight) Equity Shares of INR 10/- eachas at March 312019.
14. Subsidiaries Joint Ventures and Associate Companies
As on March 31 2019 the Company had 8 (Eight) direct and step down subsidiaryCompanies and 22 (Twenty Two) Associate Companies. Further the Company has entered intoJoint Venture agreements with unincorporated JV's for bidding of tenders & contractsthe details of which is given in the note no. 34 & 35 to the standalone and note no.35 & 36 to the consolidated financial statements. Also the Company is a member of anassociation 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 ofthe Companies (Accounts) Rules 2014 a statement containing salient features of thefinancial statements and performance of the Company's subsidiaries and associate companyfor the year ended March 312019 is included as per the prescribed format in this AnnualReport. The Financial Statements of these subsidiaries are uploaded on the website of theCompany in compliance with Section 136 of the Companies Act 2013. The FinancialStatements of these subsidiaries and the other related detailed information will be madeavailable to any Member of the Company/its subsidiary(ies) seeking such information at anypoint of time and are also available for inspection by any Member at the Registered Officeof the Company on all working days except Saturday and Sunday during business hours uptothe date of the Annual General Meeting.
During FY 2018-19 there has been no major change in the nature of business of yourCompany and its subsidiaries. During the year under review the Company has transferredits stake held in A2Z Green Waste Management Ltd. (earlier a subsidiary of the Company)on 12th March 2019 resulting into change in Management Control and henceforth A2Z Greenhas ceased to be a subsidiary of the Company for all purposes. However it continues to bean associate company of the Company.
In terms of the Regulation 46(2)(h) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the policy for determining material subsidiaries isplaced on the website of the Company -
http://media.a2zgroup.co.in/pdf/Policv%20on%20 material%20subsidiary 13.02.2019
Report on the performance and financial position of each of the subsidiaries andassociates has been provided in Form AOC-1 and forms part of the Annual Report as AnnexureA.
Statutory Auditors and Auditors' Report
M/s. Walker Chandiok & Co LLP (Firm Registration No. 001076N/N500013) CharteredAccountants were appointed as auditors of the Company from the conclusion of theThirteenth Annual General Meeting (AGM) of the Company held on September 27 2014 to theconclusion of the Eighteenth Annual General Meeting to be held for the Financial Year2018-19.
On the recommendation of the Audit Committee Board has recommended the re-appointmentof M/s. Walker Chandiok & Co LLP Chartered Accountants as Statutory Auditor. M/s.Walker Chandiok & Co LLP if re-appointed by members as Statutory Auditor for thesecond term shall hold office from the conclusion of the ensuing Annual General Meeting(AGM) of the Company to the conclusion of the Twentieth Annual General Meeting to be heldfor the Financial Year 2020-2021. Accordingly this item forms a part of the notice ofensuing Annual General Meeting and the Board of Directors recommend to the Members to passthe resolution as stated in Item No. 3 of the Notice.
Certificate from the said auditors has been obtained to the said effect that theirre-appointment if made would be within limits specified under Section 141 of theCompanies Act 2013 and also to the effect of their eligibility to be appointed asAuditors of the Company.
The auditor's report presented by M/s Walker Chandiok & Co LLP Statutory Auditorson the accounts of the company for the financial year ended March 31 2019 isselfexplanatory and requires no comments and the Management replies to the auditobservations are as under:
Explanation to Para 3 of Auditor's report on Standalone Financials of A2Z InfraEngineering Ltd. and Para 3 of Auditor's report on Consolidated Financials of A2Z InfraEngineering Ltd. its subsidiaries joint ventures and associates of A2Z Infra EngineeringLtd.
The loan accounts of the Company have been classified as
Non- Performing Assets by certain banks and some of them have not charged interest onthe said accounts and therefore provision for interest has not been made in the books ofaccounts and to that extent interest costs and loan liabilities have been understated. Theextent of exact amount is under determination and reconciliation with the banks and assetsreconstruction company however as per the details available the amount of unaccruedinterest on approximate basis on the said loans (other than the borrowings of few banksand assets reconstruction company which are regular) amounts to INR 1595.92 lakhs for theyear ended March 31 2019. Company is already in discussion with the said banks forsettlement of their dues.
Explanation to Para 4 of Auditor's report on Standalone Financials of A2Z InfraEngineering Ltd. and Para 4 of Auditor's report on Consolidated Financials of A2Z InfraEngineering Ltd. its subsidiaries joint ventures and associates of A2Z Infra EngineeringLtd.
The Company had entered into Settlement agreement(s) ('Agreements') with certainbanks/assets reconstruction company ('the Lenders') during the years ended March 31 2018and March 31 2019 wherein it had settled the outstanding borrowings by issue of equityshares upfront payments and deferred installments. As at March 312019 the Company hasdelayed payments in respect of the certain deferred instalments amounting INR 5096.00lakhs which were due and payable pursuant to these Agreements out of which INR 1596.00lakhs have been paid subsequent to the year end. The obligations towards such lenders iscarried under Non-current liabilities - Borrowings and Other current financial liabilitiesat INR 1268.59 lakhs and INR 6049.03 lakhs respectively. So far Banks have not given anysuch notice(s) or have not shown any such intention and the management is in discussionswith the Lenders to condone the aforementioned delays.
Additionally the Company is in the process of negotiations/ reconciliations of itsoutstanding obligations carried in these financial results as Non-current liabilities -Borrowings of INR 1485.05 lakhs Current financial liabilities- Borrowings of INR13183.43 lakhs and Other current financial liabilities INR 12441.39 lakhs with certainother lenders.
Pursuant to the above discussions with the lenders management is confident that nomaterial impact will devolve on the Company in respect of aforementioned delays.
Explanation to Para 6 of Auditor's report on Standalone Financials of A2Z InfraEngineering Ltd. and Para 6 of Auditor's report on Consolidated Financials of A2Z InfraEngineering Ltd. its subsidiaries joint ventures and associates of A2Z Infra EngineeringLtd.
The Company has accumulated losses amounting INR 43672.10 lakhs as at March 312019and is presently facing acute liquidity problems on account of delayed realization oftrade receivables coupled with delays in commencement of commercial production at itsbiomass-based power generation plants. The management is evaluating various options andhas entered into one-time settlement agreements with various lenders including interestand other related terms and conditions apart from further negotiating the terms with theremaining lenders for settlement of its existing debt obligations. Management believesthat the Company will be able to settle its remaining debts in the due course and in viewof the proposed settlement of debt obligations no adjustments are required in thefinancial statements and accordingly these have been prepared on a going concern basis.
Explanation to Para 7 of Auditor's report on Standalone Financials of A2Z InfraEngineering Ltd. and Para 7 of Auditor's report on Consolidated Financials of A2Z InfraEngineering Ltd. its subsidiaries joint ventures and associates of A2Z Infra EngineeringLtd.
The Income tax authorities conducted a search and survey at certain premises of theCompany under section 132 and 133 of the Income Tax Act 1961 in April 2012. During theyear ended March 312015 the Holding Company received the assessment orders for theassessment years 2009-10 to 2013-14 from the Deputy Commissioner of Income Tax (DCIT)demanding additional tax liability of INR 1992.17 lakhs. During the year ended March312015 the Company had filed appeals with Commissioner of Income Tax (CIT) (Appeals)challenging these orders against which the said authority had granted partial relief tothe 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 wherethe CIT(A) has not accepted the Holding Company's contention. Additionally the DCIT hasalso filed appeals with the ITAT against the matters where the relief has been given tothe Company.
Further during the year ended March 31 2018 the Company had received penalty ordersfor the Assessment year 2009-10 to 2013-14 from DcIT and for the Assessment year 2008-09from CIT demanding additional tax liability of INR 1277.64 lakhs against which the CIT(Appeals) had not granted relief to the Company.
During the year ended March 31 2019 the Company has received orders from CIT(Appeals) squashing the penalty orders aggregating INR 477.71 lakhs out of theaforementioned and upholding the rest. The Company has filed appeals with the ITATchallenging the penalty orders for these assessment years in respect of the matters wherethe CIT(A) has not accepted the Company's contention
Based on their assessment and upon consideration of advice from the independent legalcounsel the management believes that the Company has reasonable chances of succeedingbefore the ITAT and does not foresee any material liability. Pending the final decision onthe matter no further adjustment has been made in the standalone financial statements.
In terms of Section 143(8) of the Companies Act 2013 read with Rule 12 of theCompanies (Audit and Auditors) Rules 2014 the audit of the accounts of the branchoffices 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 Directorsbased on the recommendation of Audit Committee to appoint Auditors for the branchoffice(s) of the Company and also to fix their remuneration. The Board of Directorsrecommends to the Members to pass the resolution as stated in Item No. 7 of the Noticeconvening the ensuing Annual General Meeting.
In terms of the provisions of Section 204 of the Companies Act 2013 and Rule 9 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhad appointed M/s. DR Associates Company Secretaries as Secretarial Auditors to conductSecretarial Audit of the Company and M/s Nitin Goyal & Associates Company Secretariesas Secretarial Auditor to conduct Secretarial Audit of material unlisted subsidiarynamely M/s A2Z Infraservices Ltd. for the Financial Year 2018-19. The Secretarial AuditReport of the Company together with its material unlisted subsidiary is given as AnnexureB (Form MR-3) which forms part of this report.
The said Secretarial Audit Report does not contain any qualification reservation oradverse remark made by the secretarial auditor.
Pursuant to the provisions of Section 148 of the Companies Act 2013 read with Rule 14of the Companies (Audit and Auditors) Rules 2014 the cost records in respect of road andconstruction activity need to be audited. M/s HAM & Associates were appointed as theCost Auditors of the Company for the Financial Year ended March 312019 but they expressedtheir inability to conduct the audit and resigned vide their resignation letter dated 8thJuly 2019. Hence it was required to appoint cost auditors for the FY 2018-19 to fill thecasual vacancy caused due to resignation of M/s HAM & Associates. Hence the Board ofDirectors upon the recommendation of the Audit Committee appointed M/s JSN & Co. asthe Cost Auditors of the Company for the Financial Year ended March 31 2019 therebyfilling the casual vacancy on July 112019.
Further pursuant to the provisions of Section 148 of the Companies Act 2013 read withRule 14 of the Companies (Audit and Auditors) Rules 2014 the Board of Directors upon therecommendation of the Audit Committee appointed M/s JSN & Co. as the Cost Auditors ofthe Company for the Financial Year ending March 312020.
In accordance with the above provisions the remuneration payable to the cost auditorfor the financial year ended March 31 2019 and March 31 2020 should be ratified by theMembers. Accordingly the Board of Directors recommend to the Members to pass theresolution as stated in Item Nos. 8 & 9 of the Notice convening the forthcomingAnnual General Meeting.
16. Corporate Social Responsibility (CSR)
In accordance with the provisions of Section 135 of the Companies Act 2013 and Rulesframed thereunder the Company has constituted a Corporate Social Responsibility Committee(CSR Committee) of the Board of Directors on August 14 2014. The CSR Committee comprisesof 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 asrecommended by the CSR Committee and approved by the Board is placed on the website of theCompany and may be accessed via following link.-http://media.a2zgroup.co.in/pdf/CSR PolicyA2Z.pdf
The average net profits calculated as per provisions of Section 198 of the CompaniesAct 2013 for of the preceding three (3) financial years being negative the Company wasnot under any obligation to spend any amount on CSR.
17. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Appointment & Resignation of Directors/KMP's
1. During the year under review Dr. Ashok Kumar Saini who was re-appointed under thecategory of Whole Time Director effective from 15th February 2018 has been re-designatedas Non-Executive Non-Independent Director w.e.f 01st December 2018.
2. After the year under review Ms. Atima Khanna was appointed as AdditionalNon-Executive Independent Woman Director of the Company w.e.f 23rd May 2019 and it isproposed to regularized her as Director of the Company under the category of Non-ExecutiveIndependent Woman Director to hold office for a period of five consecutive years from theconclusion of ensuing Annual General Meeting to the conclusion of the Company's AnnualGeneral Meeting to be held for the Financial Year 2023-2024. Accordingly the Board ofDirectors recommend to the Members to pass the resolution as stated in Item No. 6 of theNotice convening the ensuing Annual General Meeting
2. Retire by Rotation
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Rajesh Jain Director retires by rotation at the ensuingAnnual General Meeting of the Company and being eligible offers himself forre-appointment.
3. Pursuant to the provisions of sub-section (51) of Section 2 and Section 203 of theCompanies Act 2013 read with the Rules framed thereunder the Key Managerial Personnel's(KMP's) of the Company as on 31st March 2019 are:
1. Mr. Amit Mittal Managing Director
2. Mr. Rajesh Jain Whole Time Director & CEO
3. Mr. Rajiv Chaturvedi Chief Financial Officer
4. Mr. Atul Kumar Agarwal Company Secretary
18. Policy on Directors' appointment and Remuneration
As on March 312019 the Board consists of six members two (2) are ExecutiveDirectors one of whom is the Managing Director two (2) are Non-Executive andNon-Independent Directors one of whom is a Woman and other two (2) are Non-ExecutiveIndependent Directors.
In terms of the provisions of Section 178(3) of the Act and Para A of Part D underSchedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Nomination & Remuneration Committee is responsible for formulating thecriteria for determining qualification positive attributes and independence of aDirector. The Nomination & Remuneration Committee is also responsible for recommendingto the Board a policy relating to the remuneration of the Directors Key ManagerialPersonnel and other employees. In line with this requirement the Board has on therecommendation of the Nomination & Remuneration Committee framed a policy forselection and appointment of Directors KMP and Senior Management and their remuneration.
The Remuneration Policy of the Company can be accessed via following link.-
http://media.a2zgroup.co.in/pdf/Remuneration%20 Policy 13.02.2019
19. Declaration by Independent Director(s)
The Company has received necessary declaration from each of the Independent Directorsunder Section 149(7) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosures Requirements) Regulations 2015 that they meet the criteria ofindependence as laid down in section 149(6) of the Companies act 2013 and Regulation16(1)(b) of the SEBI LODR.
20. Annual evaluation of Board Performance and Performance of its committees andIndividual Directors
Annual evaluation of the performance of the Board its Committees and individualdirectors has been made pursuant to the provisions of the Companies Act 2013 and thecorporate 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 videits 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 ofthe guidance note and criteria laid down such as the Board composition and structureeffectiveness of board processes information and functioning Board culture and dynamicsquality of relationship between the Board and the Management and efficacy of communicationwith external stakeholders competence and experience of Board to conduct its affairseffectively operations are in line with strategy integrity of financial information andthe robustness of financial and other controls effectiveness of risk managementprocessesetc.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the guidance note and criteria laid down such as thecomposition of committees effectiveness of committee meetings committees are appropriatewith the right mix of knowledge and skills effectiveness and advantage of the Committeeindependence of the Committeesetc.
The Board and the Nomination & Remuneration Committee ("NRC") reviewedthe performance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings willingness to devote time and effort to understand the company andits business by the directors competency to take the responsibility and having adequatequalification experience and knowledge quality and value of their contributions at boardmeetings effectiveness of Leadership quality of the Chairman etc.
In a separate meeting of Independent Directors performance of non-independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theIndependent Directors at which the performance of the Board its committees andindividual directors were also discussed.
21. Number of meetings of the Board of Directors
During the year seven meetings of the members of Board and one meeting of IndependentDirectors were held the details of which are given in Corporate Governance Report. Theprovisions of Companies Act 2013 and SEBI (Listing Obligations and DisclosuresRequirements) Regulations 2015 were adhered to while considering the time gap betweentwo consecutive meetings.
22. Disclosures Related to Committees and Policies
a. Audit Committee
The Audit Committee is duly constituted by the Board of Directors of the Company inaccordance with the requirements of Section 177 of the Companies Act 2013 and Regulation18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015. TheAudit Committee as on 31st March 2019 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 allthe recommendations of the Committee.
b. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of Directors is duly constituted by the Boardof Directors of the Company in accordance with the requirements of Section 178 of theCompanies Act 2013 & Regulation 19 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The Nomination and Remuneration Committee as on 31stMarch 2019 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 is duly constituted by the Boardof Directors of the Company in accordance with the requirements Section
178 of the Companies Act 2013 and Regulation 20 of SEBI (Listing obligations andDisclosure Requirements) Regulations 2015. The Stakeholders Relationship Committee as on31st March 2019 comprising the following Directors:
1. Dr. Ashok Kumar Chairman
2. Mr. Surender Kumar Tuteja Member
3. Ms. Dipali Mittal Member
23. Investor Education and Protection Fund
Pursuant to the provisions of Sections 124 and 125 of the Companies Act 2013 read withthe Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Rules 2016 ("IEPF Rules") during the year under review the dividenddeclared for the financial year 2010-11 which was remained unclaimed from sevenconsecutive years was transferred to Investor Education and Protection Fund. Furthershares of the Company in respect of which dividend has not been claimed from sevenconsecutive years from the date of transfer to unpaid dividend account have also beentransferred to the demat account of IEPF Authority.
24. Vigil Mechanism / Whistle Blower Policy
The Board has pursuant to the provisions of Section 177(9) & (10) of the CompaniesAct 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules 2014and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 framed "Vigil Mechanism (Whistle Blower) Policy" ("the Policy")'to deal with instances of fraud and mismanagement if any. This Policy has been formulatedto provide Vigil Mechanism for employees including directors of the Company to reportgenuine concerns from time to time. The said policy is placed on the website of theCompany and may be accessed at a link:-
http://media.a2zgroup.co.in/pdf/VIGIL%20(WHISTLE %20BLOWER)%20POLICY 13.02.2019
This vigil mechanism of the Company is overseen by the Audit Committee and providesadequate safeguard against victimization of employees and directors who avail the vigilmechanism and also provide direct access to the Chairperson of the Audit Committee inappropriate or exceptional circumstances.
25. Particulars of Loans Guarantees or Investments under Section 186
Being an infrastructure Company Section 186 is not applicable on the Company andparticulars of loans guarantees investments form part of the notes to the FinancialStatements provided in this Annual Report. All the loans guarantees and investments madeare in compliance with the provisions of the Companies Act 2013 and the same aredisclosed in the Financial Statements.
26. Related Party Transactions:
Related party transactions that were entered into during the financial year were in theordinary course of business and on an arm's length basis.
The particulars of the contract or arrangements with related
parties during the financial year 2018-19 are disclosed in Form No. AOC -2 whichforms part of the Annual Report as an Annexure C. Except as stated in thedisclosure there were no materially significant related party transactions made by theCompany with its Promoters Directors Key Managerial Personnel or other designatedpersons 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 relatedparty transactions as approved by the Board may be accessed on the Company's website atthe link: http://media.a2zgroup.co.in/pdf/A2Z-
All Related Party Transactions which were in the ordinary course of business and onarm's length basis were placed before the Audit Committee for their approval. Prioromnibus approval of the Audit Committee is obtained on annual basis for the transactionswhich are of a foreseen and repetitive nature. The transactions entered into pursuant tothe omnibus approval so granted are audited and a statement giving details of all relatedparty transactions is placed before the Audit Committee and the Board of Directors fortheir ratification on quarterly basis.
27. Employee Stock Option Plan
The Nomination & Remuneration Committee of the Board of Directors of the Companyinter alia administers and monitors the A2Z Stock Option Plan 2010 (ESOP 2010) A2ZEmployees Stock Option Plan 2013 (EsOp 2013) A2Z Employees Stock Option Plan 2014 (ESOP2014) A2Z Employees Stock Option Plan 2013 (Re-grant-I)(ESOp 2013 Re-grant I) and A2ZEmployees Stock Option Plan 2014 (Re-grant-I)(ESOP 2014 Re-grant I) A2Z Employees StockOption Plan 2018 (ESOP 2018) of the Company in accordance with the applicable SEBIGuidelines.
The applicable disclosures as stipulated under the SEBI Guidelines as on 31stMarch 2019 with regard to the ESOP 2010 ESOP 2013 ESOP 2014ESOP 2013 Re-grant I &ESOP 2014 Re-grant I and ESOP 2018 are provided in An nexure D to this Report.
The certificates from the Auditors of the Company stating that the Schemes have beenimplemented 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 GeneralMeeting for inspection by members.
28. Extract of Annual Return
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 Extract ofthe Annual Return as per Form- MGT-9 for the financial year ended March 312019 made underthe provisions of Section 92(3) of the Act is attached as Annexure E which formspart of this Report.
29. Prevention of Sexual Harassment at Workplace:
As per the requirement of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 read with rules made thereunder your Company hasconstituted Internal Complaints Committee which is responsible for redressal of complaintsrelated to sexual harassment. During the year under review there were no complaintspertaining to sexual harassment.
30. Particulars of Employees and Related Disclosures
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial 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) ofthe Companies (Accounts) Rules 2014 the details of Conservation of Energy TechnologyAbsorption Foreign Exchange Earnings and Outgo are attached as Annexure G whichforms part of this report.
32. Disclosure requirements
a. As per Regulation 34 read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Corporate Governance report with auditors'certificate from DR Associates thereon and management discussion and analysis areattached which form part of this report.
b. Details of the familiarization program of the independent directors are available onthe website of the Company (URL: http://a2zgroup.co.in/pdf/Familiarization Programme forIndependent Directors).
c. In terms of Regulation 17(8) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Chief Executive officer and the Chief Financialofficer furnished a certificate to the Board of Directors in the prescribed format for theyear under review and taken on record by the Board.
The Equity Shares of the Company continue to remain listed on BSE Limited (formerly TheBombay Stock Exchange Limited) and National Stock Exchange of India Limited (NSE). Thestipulated listing fees for FY 2019-2020 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. TheCompany's Risk Management Policy is designed to provide reasonable assurance thatobjectives are met by integrating management control into the daily operations byensuring compliance with legal requirements and by safeguarding the integrity of theCompany's financial reporting and its related disclosures.
Therefore in accordance with the provisions of Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board members wereinformed about risk assessment and minimization procedures after which the Board formallyadopted steps for framing implementing and monitoring the risk management policy for thecompany in their meeting held on November 13 2014.
The main objective of this policy is to ensure sustainable business growth withstability and to promote a pro-active approach in reporting evaluating and resolvingrisks associated with the business. In order to achieve the key objective the policyestablishes a structured and disciplined approach to Risk Management in order to guidedecisions on risk related issues.
In today's challenging and competitive environment strategies for mitigating inherentrisks in accomplishing the growth plans of the Company are imperative. The common risksinter alia are: Competition Business risk Technology obsolescence Investmentsretention of talent and expansion of facilities. Business risk inter-alia furtherincludes financial risk political risk fidelity risk legal risk.
As a matter of policy these risks are assessed and steps as appropriate are taken tomitigate the same.
35. Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 the board of directors to thebest of their knowledge and ability confirm that:
a. In the preparation of the annual accounts for the Financial Year ended 31st March2019 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
b. The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at March 31 2019 and of the profit andloss of the company for that period;
c. The directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 thecompany and that such internal financial controls are adequate and were operatingeffectively.
f. The directors have devised proper systems to ensure compliance with the provisionsof 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 theCompanies Act 2013 to the Audit Committee or the Board of directors during the yearunder review.
Your Directors state that no disclosure or reporting is required in respect of thefollowing 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 aManaging Director or Wholetime Director of the Company has received any remuneration orcommission from any Holding Company or Subsidiary Company of the Company.
However Mr. Amit Mittal Managing Director of the Company has been appointed asManaging Director in A2Z Infraservices Ltd. ("AISL') a material subsidiary Companyon October 24 2015. He is in receipt of INR 4800000/- as remuneration in his capacityas Managing Director of AISL for the financial year 2018-19.
Mr. Rajesh Jain Whole Time Director cum CEO of the Company has been appointed as WholeTime Director in A2Z Infraservices Ltd. ("AISL") a material subsidiary
Company on December 01 2018. He is in receipt of INR 1600000/- as remuneration inhis capacity as Whole Time Director of AISL during the financial year 2018-19.
Your Directors wish to place on record the support assistance and guidance provided bythe financial institutions banks customers suppliers and other business associates. Wewould like to thank our Company's employees for their efforts and high degree ofcommitment and dedication. Your Directors especially appreciate the continuedunderstanding and confidence of the Members. Your Directors also thank and appreciate allthe Bankers of the Company for their support extended by them to the Company in difficulttimes and for accepting the settlement process for settling the debt amount in an amicablemanner.
|For and on behalf of Board of Directors |
| ||(Surender Kumar Tuteja) |
|Date : August 13 2019 ||Chairman |
|Place : Gurugram ||DIN-00594076 |