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A2Z Infra Engineering Ltd.

BSE: 533292 Sector: Engineering
NSE: A2ZINFRA ISIN Code: INE619I01012
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OPEN 10.27
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VOLUME 39728
52-Week high 16.07
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P/E
Mkt Cap.(Rs cr) 184
Buy Price 10.43
Buy Qty 101041.00
Sell Price 0.00
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OPEN 10.27
CLOSE 9.94
VOLUME 39728
52-Week high 16.07
52-Week low 3.95
P/E
Mkt Cap.(Rs cr) 184
Buy Price 10.43
Buy Qty 101041.00
Sell Price 0.00
Sell Qty 0.00

A2Z Infra Engineering Ltd. (A2ZINFRA) - Director Report

Company director report

To

The Members of

A2Z Infra Engineering Ltd.

Your Directors take pleasure in presenting the 20th AnnualReport together with the annual audited financial statements for the year ended March312021.

1. Financial summary or highlights/Performance of the Company

The highlights of financial results on Standalone and Consolidatedbasis for the financial year ended on March 312021 are as follows:

(INR in lakh)

Standalone

Consolidated

Particulars 2020-21 2019-20 2020-21 2019-20
Income
Revenue from Operations 18785.14 38522.64 41490.79 69984.30
EBIDTA (3015.47) (1972.92) (411.22) (78.50)
Finance Cost 4820.34 4874.14 5982.25 6034.47
Depreciation and amortization expenses 452.78 1001.14 918.98 1370.47
Profit/(Loss) before Exceptional Items and tax (8288.59) (7848.20) (7312.45) (7483.44)
Exceptional Items - (17630.90) - (16108.68)
Share of profit/(loss) from associate - - (413.31) (135.27)
Total Tax Expense 25.63 3609.60 383.74 4086.99
Profit/Loss for the year (8314.22) (29088.70) (8109.50) (27814.38)
Other Comprehensive Income (net of tax) 106.38 31.07 305.51 150.99
Total Comprehensive income for the year (8207.84) (29057.63) (7803.99) (27663.39)

Note: The above figures are extracted from the standalone andconsolidated 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 adecrease as compared to that of the previous year by 51.24%. The Company has achieved aTurnover of INR 18785.14 Lakhs as against INR 38522.64 Lakhs in the previous year. TheCompany has made net loss after tax of INR 8314.22 Lakh as against INR 29088.70 Lakh inthe previous year.

The Net Worth of the Company has decreased to INR 27916.64 Lakhs as atthe end of the current year from INR 35995.10 Lakhs as at the end of the previous yearrepresenting decrease in Net Worth by 22.44%.

The Debt Equity ratio of the Company has changed to 1.58 as at the endof the current year as compared to 1.07 as at the end of the previous year.

Consolidated:

The consolidated Turnover of the Company for the current financial yearis INR 41490.79 Lakh as against INR

69984.30 Lakh in the previous year representing decrease in Turnoverby 40.71%. On consolidated basis Company has made a net loss of INR 8109.50 Lakh asagainst a loss of INR 27814.38 Lakh in the previous year.

The consolidated Net Worth of the Company has decreased to INR33779.05 Lakh as at the end of the current year from INR 41278.50 Lakh as at the end ofprevious year representing decrease in Net Worth by 18.17 %.

The consolidated Debt Equity ratio of the Company has changed to 1.56as at the end of the current year compared to 1.15 as at the end of previous year.

2. Consolidated Financial Statements

The Audited Consolidated Financial Statements of your Company as onMarch 31 2021 have been prepared in accordance with the relevant Indian AccountingStandards (Ind AS) issued by Accounting Standards Board(ASB) and Regulation 33 ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 and applicable provisions of the Companies Act 2013.

In accordance with Section 129(3) of the Companies Act 2013 andschedule V of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 the Consolidated Financial Statements of the Companyincluding the financial details of all the subsidiaries and associates companies of theCompany forms a part of this Annual Report.

3. Dividend

Due to inadequacy of profit the Board of Directors does not recommendany dividend for the financial year ended March 312021.

4. Operational highlights

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

Power Transmission & Distribution:

Your Company is an experienced company in Engineering & UrbanInfrastructure Services sector. As part of the services the Company provides integrateddesign testing installation construction and commissioning services on a turn-key basisto its clients. The Company's projects include rural electrification railway overheadelectrification reduction of AT&C losses feeder renovation underground cablingfeeder segregation installing High Voltage Distribution System (“HVDS”) and LowVoltage Distribution System (“LVDS”) distribution lines and transmission lines.The Company has strong capabilities to build operate and maintain:

• Substations & Switchyards up to 765 kV.

• Transmission lines up to 765 kV.

• 11 / 33 kV distribution lines comprising of Feeder RenovationProjects Tube Well Connection Segregation of Domestic and Agriculture load Augmentationof Lines Providing Laying of HT & LT Aerial Bunched Cables and Offering BPLConnections.

The Company has its overseas presence in Nepal Uganda and Tanzania.

Under Engineering Services segment we may pursue infrastructureprojects like Sewage Network & Treatment Plants Gas Distribution Networks and Metroprojects in select cities.

We have also completed projects in various states of India includingJammu & Kashmir Rajasthan Orissa Bihar Arunachal Pradesh Jharkhand KeralaChhattisgarh Haryana Uttar Pradesh and Himachal Pradesh.

Telecom Infrastructure EPC

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

• Optical Fiber Cable NLD / Access Networking Construction &Maintenance

• Network Integration

• 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 ofTelecom Network Backbone on Turnkey basis in the untapped toughest terrains of the countrylike Leh Ladakh and North East India which will help in building the optical Network toconnect each and every part of the Nation.

Further Company has tied up with Telesonic Network Ltd. (an Airtelgroup company) for work to be carried out on continuing basis at various circles includingobtaining permission from applicable authority for HDD/Open Trench/ Moiling/First levelrestoration/Duct Pulling up to 4 number/ DIT/All Fiber Blowing &Pulling/Splicing/Manhole and Hand hole Supply and installation/ODF and OTB installation/ATTesting and sign off/Handover to O&M Team and such other work as may bespecified/required from time to time.

We combine a proven track record and professional skills woven togetherwith a culture of trust.

Waste to Energy- Power Generation Projects (PGP)

The Company collaborated with sugar mills for setting up three powerplants on Built Own Operate and Transfer (BOOT) basis for a period of 15 years in thestate of Punjab and to ensure continuous supply of Refuse derived Fuel (RDF) to the saidPower Plants Company developed an indigenous waste processing plant for running the saidPlants on Refuse Derived Fuel (RDF) from Municipal Solid Waste.

Non- supply of bagasse by the Co-operative Sugar Mills various implieddelays in approvals and execution of agreements including delay in handing over of landand there are disputes between the concerned parties with ongoing arbitration proceedingsthe execution of Project by the Company has become unviable despite its best bona fide andconsistent efforts.

In the light of Section 12(5) read with schedule VII of the Arbitrationand Conciliation (Amendment) Act 2015(Act) and various judicial pronouncements in thisregard the Registrar of the Co-operative Society Punjab appointed by the CooperativeSugar Mills as the Sole Arbitrator was ineligible to be appointed as an arbitrator in theconcerned arbitration proceedings as the dispute arising under the MoUs were to bereferred to Arbitrator who should have been the Registrar Cooperative Societies Punjab.The award passed by Additional Registrar has been challenged by the Company under Section34 of the Act before the Hon'ble District Judge Chandigarh. Moreover Company had filedpetitions under Section 11 and 14 of the Act before the Hon'ble High Court of Punjab &Haryana and Hon'ble District Court Chandigarh respectively for appointment of anindependent arbitrator and termination of mandate of the existing arbitrator beingillegal and arbitrary appointment in the instant arbitration proceedings initiated by theCooperative Sugar Mills and the said petitions are still pending before the respectiveCourts.

Due to these disputes with sugar mills in respect of cogeneration powerplants the management of the

Company may decide to shift these power plants to other locationssubject to availability of RDF at that location(s).

However due to Covid and above mentioned issues all three power plantsare non-operational.

Impact of first and second wave of COVID-19 pandemic

The first and second wave of COVID-19 pandemic has distressed theexecution of the projects at various sites. The Company had faced substantial obstacles inresuming its operations as most of the EPC projects are in remote areas from where thestaff and working labourers had to move away due to the lockdown and most of them havemigrated back to their villages. It was also challenging to get the necessary permissionsfrom the local authorities to resume operations at site. The execution of most projectsalso requires the continued presence of client personnel who may be indisposed to be atthe site due to different priorities or logistical challenges related to the lockdown. Itresulted into the distressed Cash flows/Financials results for the Year ended March312021 as well for the upcoming quarter(s).

Going Concern

The Auditors of Company has modified its opinion on the financialstatements as on March 31 2021 that they are unable to comments on the ability of theCompany to continue as a going concern. As on March 31 2021 Company has accumulatedlosses amounting INR 80722.77 lakhs and is presently facing acute liquidity problems onaccount of delayed realization of trade receivables coupled with delays in commencement ofcommercial production at its biomass-based power generation plants. Also certain lendershave filed applications with the National Company Law Tribunal (NCLT) Debt RecoveryTribunal (DRT) and other Courts for recovery of their dues. However the matters have notbeen admitted yet with the NCLT and the management is in discussion with the said lenderand parties for amicably settling the matters. The Company has also delayed in repaymentsdue to certain lenders towards the One Time Settlement Agreement(s) executed with them. Asper the Auditors the Conditions explained above indicate existence of uncertainties thatmay cast significant doubt on the Company's ability to continue as a going concern due towhich the Company may not be able to realise its assets and discharge its liabilities inthe normal course of business.

However the Board of Directors is evaluating various options includingfurther negotiating the terms with the lenders with whom Company has entered into one timesettlement as well as with the remaining lenders for settlement of its existing debtobligations. Further the Board of Directors is in discussions with certain customers foran immediate recovery of the amount due from them and believes that the substantialportion of such trade receivables shall be realized in the upcoming year. The Board ofDirectors believes that the Company will be able to settle its remaining debts in duecourse and in view of the proposed settlement of debt obligations together with theexpected increased realisation from the trade receivables no adjustments are required inthe financial statements and accordingly these have been prepared on a going concernbasis.

5. Change in the nature of business

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

6. Material Changes and Commitments

There were no material changes and commitments affecting the financialposition of the Company which occurred between the end of the financial year of theCompany and the date of this report.

7. Updates on Corporate Debt Restructuring (CDR)

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

Your Company is working assiduously to reduce the debt burden and inline with this strategy the Company has entered into One Time Settlement Agreements withvarious Lenders including SICOM Limited Edelweiss Asset Reconstruction Company Limited asrepresentative of EARC Trust SC 299 for the Loan assigned by Yes Bank Limited and StandardChartered Bank Hong Kong and Shanghai Banking Corporation Limited State Bank of IndiaEdelweiss Asset Reconstruction Company Limited as representative of EARC trust SC 217 forthe Loan assigned by ICICI Bank DBS Bank Ltd. and ICICI Bank Ltd. till date. Company isalso in discussion with IDBI Bank Ltd. Indian Bank (E- Allahabad Bank Ltd.) and UnionBank of India for finding a prudent resolution of their respective fund based exposure tothe Company by doing one time settlement with them.

8. Deposits

During the year under review the Company has not accepted any depositswithin the meaning of Sections 2(31) and 73 of the Companies Act 2013 and the Rulesframed thereunder 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.

9. Significant and Material Orders passed by the Regulators or Courtsor Tribunals

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

10. Internal Financial Controls and systems:

Your Company has in place adequate financial control system andframework 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 ofthe business processes are reviewed by the Management before reporting to the AuditCommittee. The Audit Committee reviews the Internal Audit reports and the status ofimplementation of the agreed action plan. This system of internal control facilitateseffective compliance of Section 138 of Companies Act 2013 and the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015.

The internal auditors of the company checks and verifies the internalcontrol and monitors them in accordance with policy adopted by the company. The Boardregularly reviews the effectiveness of controls and takes necessary corrective actionswhere weaknesses are identified as a result of such reviews. This review covers entitylevel controls process level controls fraud risk controls. Based on this evaluationthere is nothing that has come to the attention of the Directors to indicate any materialbreak down in the functioning of these controls procedures or systems during the year.

The Statutory Auditors have given their disclaimer of opinion on thefinancial reporting in their Report on the effectiveness of the Company's internalfinancial controls with reference to the Company's ability to continue as a going concernaccrual of interest expenditure in accordance with Ind AS and reconciliation of the samewith the lenders estimating the investment and other dues recoverable in an associatecompany and recording adjustments in the Goods and Services Tax (‘GST') returns anddelay in filing of such GST returns. Your Directors re-iterate their clarifications on thesame as above mentioned elsewhere in the Report.

11. Secretarial Standards

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

12. Share Capital Authorised Share Capital:

During the year under review the Authorised Share Capital of theCompany is INR 24000 Lakh divided into 2400.0 Lakh equity shares of INR 10/- (Rupees Tenonly) each.

Paid up Share Capital:

The Company has not issued any shares during the year the paid upshare capital of the Company stood INR 1761198580/- (Indian Rupees One Hundred SeventySix Crore Eleven Lakh Ninety Eight Thousand Five Hundred Eighty Only) divided into176119858 (Seventeen Crore Sixty One Lakh Nineteen Thousand Eight Hundred Fifty Eight)Equity Shares of INR 10/- each as at March 312021.

13. Subsidiaries Joint Ventures and Associate Companies

As on March 312021 the Company had 11(Eleven) direct and step downsubsidiary Companies and 18 (Eighteen) Associate Companies. Further the Company hasentered into Joint Venture agreements with unincorporated JV's for bidding of tenders& contracts the details of which is given in the note no. 34 & 35 to thestandalone and note no. 35 & 36 to the consolidated financial statements. Also theCompany is a member of an association of person (AOP) in which Company is having 60% sharein profits.

As per sub-section (3) of Section 129 of the Companies Act 2013 readwith Rule 5 of the Companies (Accounts) Rules 2014 a statement containing salientfeatures of the financial statements and performance of the Company's subsidiaries andassociate company for the year ended March 312021 is included as per the prescribedformat in this Annual Report. The Financial Statements of these subsidiaries are uploadedon 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 informationwill be made available to any Member of the Company/its subsidiary(ies) seeking suchinformation at any point of time and are also available for inspection by any Member atthe Registered Office of the Company on all working days except Saturday and Sunday duringbusiness hours upto the date of the Annual General Meeting.

During FY 2020-21 there has been no major change in the nature ofbusiness of your Company and its subsidiaries. During the year under review Company hastransferred its 100% stake held in Rishikesh Waste Management Limited (formerly known asA2Z Powertech Limited) (“a Wholly Owned Subsidiary Company of the Company”) toA2Z Waste Management (Ludhiana) Ltd. an indirect subsidiary of the Company on December18 2020. Henceforth Rishikesh Waste Management Limited ceased to be the wholly ownedsubsidiary of the Company and became an indirect subsidiary of the Company w.e.f. December19 2020.

In terms of the Regulation 46(2)(h) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the policy for determining materialsubsidiaries is placed on the website of the Company -

http://media.a2zgroup.co.in/pdf/ Policv%20on%20material%20subsidiarv13.02.2019.pdf

Report on the performance and financial position of each of thesubsidiaries and associates has been provided in Form AOC-1 and forms part of theAnnual Report as Annexure A.

14. Auditors

Statutory Auditors and Auditors' Report

M/s Walker Chandiok & Co LLP (“WCC”) (Firm RegistrationNo. 001076N/N500013) Chartered Accountants were reappointed as auditors of the Companyfor a residual period of two consecutive years from the conclusion of the EighteenthAnnual General Meeting (AGM) of the Company held on September 28 2019 to the conclusionof the Twentieth Annual General Meeting to be held for the Financial Year 2020-21. WCCwill be completing their 10 years of continue services at the ensuing AGM of the Companyin terms of Section 139 of the Companies Act 2013 (‘the Act') read with theCompanies (Audit and Auditors) Rules 2014.

The Board on the recommendation of the Audit Committee recommendedfor the approval of the Members the appointment of M/s MrKS and Associates(“MRKS”) Chartered Accountants (Firm Registration no. 023711N) as the Auditorsof the Company for a term of five consecutive years from the conclusion of this AnnualGeneral Meeting until the conclusion of 25th Annual General Meeting of theCompany.

On the recommendation of the Audit Committee the Board alsorecommended for the approval of the Members the remuneration of INR 15.0 Lakhs (IndianRupee Fifteen Lakhs only) plus applicable taxes and reimbursement of out of pocketexpenses for performing the statutory audit functions of the Company for the financialyear 2021-22 with the author ity/power in favor of the Board/Audit Committee to modify theterms and conditions including fixation/ variation of remuneration for remaining tenureof four years as may be mutually agreed with the auditors of the Company.

Appropriate resolution seeking your approval to the appointment andremuneration of the Auditors is appearing in the Notice convening the 20th AGMof the Company. The Board of Directors recommends to the Members to pass the resolutionas stated in Item No. 3 of the Notice convening the ensuing Annual General Meeting.

The auditor's report presented by M/s Walker Chandiok & Co LLPAuditors on the accounts of the company for the financial year ended March 312021 isself-explanatory and requires no comments and the Management replies to the auditobservations are as under:

Explanation to Para 3.a. of Auditor's report on StandaloneFinancials of A2Z Infra Engineering Ltd. and Para 3.a. of Auditor's report onconsolidated Financial of A2Z Infra Engineering Ltd. its subsidiaries and associates ofA2Z Infra Engineering Ltd.

Based upon management analysis and assumptions the management isevaluating various options and has entered into one-time settlement agreements withvarious lenders (as described in note 22.2 of the financial statements) includinginterest and other related terms and conditions apart from further negotiating the termswith the remaining lenders for settlement of its existing debt obligations. Further themanagement is in discussions with certain customers for an immediate recovery of theamount due from them and believes that the substantial portion of such trade receivablesshall be realized within the upcoming year. Management believes that the Company will beable to settle its remaining debts in the due course and in view of the proposedsettlement of debt obligations together with the expected increased realisation from thetrade receivables a new facility from a lender and expected start of commercial productionof the biomass-based power generation plants no adjustments are required in thestandalone financial statements and accordingly these have been prepared on a goingconcern basis. Refer Note 31 of standalone financial statements and Note 52 ofconsolidated financial statements for details.

Explanation to Para 3.b. of Auditor's report on standaloneFinancials of A2Z Infra Engineering Ltd. &

Para 3.b. of Auditor's report on Consolidated Financials of A2ZInfra Engineering Ltd. its subsidiaries joint ventures and associates of A2Z InfraEngineering Ltd.

Based upon management analysis and assumptions management is confidentthat no additional liability on account of borrowing settlement shall devolve on theCompany in addition to the carrying value of such liability as at March 31 2021. TheCompany is in the process of negotiations/ reconciliations of its outstanding obligationscarried in these financial statements. Hence directors believe that there is no materialfinancial impact on the said disclaimer of opinion. Refer Note 22.1 & 22.2 ofstandalone financial statements and Note 50 & 51 of consolidated financial statementsfor details.

Explanation to Para 3.c. of Auditor's report on standaloneFinancials of A2Z Infra Engineering Ltd. & Para 3.c. of Auditor's report onConsolidated Financials of A2Z Infra Engineering Ltd. its subsidiaries joint ventures andassociates of A2Z Infra Engineering Ltd.

Based upon management analysis and assumptions the recoverable amountfrom the underlying investments/assets is higher than the net worth of A2Z Green WasteManagement Group. There are assumptions and estimates used in such future projections suchas discount rate long term growth rate arbitration claims etc. which management believesare fair and appropriate. Therefore the management believes that the realisable amountfrom aforementioned associate company and its subsidiaries is higher than the carryingvalue of the non-current investments other current financial assets and current financialassets-loans due to which these are considered as good and recoverable. Hence directorsbelieve that there is no material financial impact on the said disclaimer of opinion.Refer Note 5.2 of standalone financial statements and Note 6.2 of consolidated financialstatements for details.

Explanation to Para 3.d. of Auditor's report on standaloneFinancials of A2Z Infra Engineering Ltd. & Para 3.d. of Auditor's report onConsolidated Financials of A2Z Infra Engineering Ltd. its subsidiaries joint ventures andassociates of A2Z Infra Engineering Ltd.

Based upon management analysis and assumptions there will be nofurther impact on the financial statements. The Company was not able to file theaforementioned GST returns within the due date due to on-going Covid-19 and liquiditycrunch. However the management accrued for interest provision on delayed filling of GSTreturns in the books of accounts. Hence directors believe that there is no materialfinancial impact on the said disclaimer of opinion. Refer Note 23.1 of standalonefinancial statements and Note 21.3 of consolidated financial statements for details.

Branch Auditors

In terms of Section 143(8) of the Companies Act 2013 read with Rule 12of the Companies (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 Directors based on the recommendation of Audit Committee toappoint Auditors for the branch office(s) of the Company and also to fix theirremuneration. The Board of Directors recommends to the Members to pass the resolution asstated in Item No. 4 of the Notice convening the ensuing Annual General Meeting.

Secretarial Auditor

In terms of the provisions of Section 204 of the Companies Act 2013and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the Company had appointed M/s. DR Associates Company Secretaries as SecretarialAuditors to conduct Secretarial Audit of the company and material unlisted SubsidiaryCompany namely M/s A2Z Infraservices Ltd. for the Financial year 2020-21.The secretarialAudit report 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 Reports do not contain any qualificationreservation or adverse remark made by the secretarial auditors

Cost Auditors

Pursuant to the provisions of Section 148 of the Companies Act 2013read with Rule 14 of the Companies (Audit and Auditors) Rules 2014 the cost records inrespect of road and construction activity need to be audited. In Compliance to the abovethe Board of Directors upon the recommendation of the Audit Committee had appointed M/sSKG & Co. (Firm Registration No. 000418) as the Cost Auditors of the Company for theFinancial Year ended March 312022.The Cost Auditors' Report for financial year 202021does not contain any qualifications reservations adverse remarks or disclaimer.

In accordance with the above provisions the remuneration payable tothe cost auditors for the financial year ended March 31 2022 should be ratified by theMembers. Accordingly the Board of Directors recommend to the Members to pass theresolution as stated in Item No. 5 of the Notice convening the forthcoming Annual GeneralMeeting.

15. Corporate Social Responsibility (CSR)

In accordance with the provisions of Section 135 of the Companies Act2013 and Rules framed thereunder the Company has constituted a Corporate SocialResponsibility Committee (CSR Committee) of the Board of Directors on August 14 2014. TheCSR Committee comprises of three Directors viz. Mr. Amit Mittal Mr. Surender Kumar Tutejaand 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/CSRPolicy A2Z.pdf

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

Dissolution of CSR Committee with effect from February 13 2021

As per Companies (Amendment) Act 2020 where the amount to be spent bya company does not exceed fifty lakh rupees the requirement for constitution of theCorporate Social Responsibility Committee is not applicable and the functions of suchCommittee provided under section 135 shall in such cases be discharged by the Board ofDirectors of such company.

As the Company is incurring losses and it is not required to spend anyamount towards CSR activities as of now the Board decided to dissolve the CSR Committeew.e.f. February 13 2021 and the functions of Committee will be discharged by Board ofDirectors of the Company.

16. Directors and Key Managerial Personnel

1. Appointment/Re-appointment & Cessation of Directors/KMP's

Retirement/Cessation:

During the year under review Dr. Ashok Kumar who was appointed underthe category of Non-Executive Independent Director effective from May 012013 has resignedfrom his position w.e.f. July 24 2020 due to his pre-occupation.

He has confirmed that there was no material reason other than thatmentioned above. The Board has placed on record his appreciation for the valuablecontributions and support made by Dr. Ashok Kumar during his association as Director ofthe Company.

Appointment/Re-appointment:

During the year under review:

1. Mr. Rajesh Jain was re-appointed as “Whole-Time Director”of the Company for a period of three years effective from 13th November 2020to 12th November 2023.

2. Mr. Amit Mittal was re-appointed as “Managing Director” ofthe Company for a period of three years effective from 01st January 2021 to 31stDecember 2023.

All the above appointment/re-appointments were approved by the Membersof the Company at the last Annual General Meeting by passing the requisite resolutions inthis regard.

2. Retire by Rotation

In accordance with the provisions of the Companies Act 2013 and theArticles of Association of the Company Ms. Dipali Mittal (DIN: 00872628) Directorretires by rotation at the ensuing Annual General Meeting of the Company and beingeligible offers herself for re-appointment.

Pursuant to the provisions of sub-section (51) of Section 2 and Section203 of the Companies Act 2013 read with the rules framed thereunder the Key ManagerialPersonnel's (KMP's) of the Company as on March 31 2021 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

A brief resume of Ms. Dipali Mittal director being reappointed alongwith the nature of her expertise her shareholding in your Company and other details asstipulated under Regulation 36 (3) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is appended as an annexure to the Notice of the ensuingAnnual General Meeting.

17. Policy on Directors' appointment and Remuneration

As on March 312021 the Board consists of Six members two (2) areExecutive Directors one of whom is the Managing Director two (2) are Non-Executive andNon-Independent Directors one of whom is the Woman director and other two (2) areNon-Executive Independent Directors one of whom is Woman Independent Director.

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

The Remuneration Policy of the Company can be accessed via followinglink.-

http://media.a2zgroup.co.in/pdf/Remuneration%20 Policy 13.02.2019.pdf

18. Declaration by Independent Director(s)

The Company has received necessary declaration from each of theIndependent Directors under section 149(7) of the Companies Act 2013 and Regulation 25 ofSEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 that they meetthe criteria of independence as laid down in section 149(6) of the Companies act 2013 andRegulation 16(1)(b) of the SEBI LODR. Further the NonExecutive Directors of the Companyhad no pecuniary relationship or transactions with the Company other than sitting feescommission and reimbursement of expenses if any incurred by them for the purpose ofattending meetings of the Company.

The Independent Directors have confirmed that they have registeredtheir names in the databank maintained with the Indian Institute of Corporate Affairs(‘IICA'). In terms of Section 150 of the Act read with Rule 6(4) of the Companies(Appointment & Qualification of Directors) Rules 2014 the Independent Directors towhom the provisions of proficiency test are applicable have done the said onlineproficiency self-assessment test in due course.

The Board is of the opinion that the Independent Directors of theCompany possess requisite qualifications experience and expertise and they hold higheststandards of integrity.

19. Annual evaluation of Board Performance and Performance of itscommittees and Individual Directors

Annual evaluation of the performance of the Board its Committees andindividual directors has been made pursuant to the provisions of the Companies Act 2013and the corporate governance requirements as prescribed by Securities and Exchange Boardof 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 Boardon the basis of the guidance note and criteria laid down such as the Board composition andstructure effectiveness of board processes information and functioning Board cultureand dynamics quality of relationship between the Board and the Management and efficacy ofcommunication with external stakeholders competence and experience of Board to conductits affairs effectively operations are in line with strategy integrity of financialinformation and the robustness of financial and other controls effectiveness of riskmanagement processes etc.

The performance of the committees was evaluated by the board afterseeking inputs from the committee members on the basis of the guidance note and criterialaid down such as the composition of committees effectiveness of committee meetingscommittees are appropriate with the right mix of knowledge and skills effectiveness andadvantage 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 thecriteria such as the contribution of the individual director to the Board and committeemeetings like preparedness on the issues to be discussed meaningful and constructivecontribution and inputs in meetings willingness to devote time and effort to understandthe company and its business by the directors competency to take the responsibility andhaving adequate qualification experience and knowledge quality and value of theircontributions at board meetings effectiveness of Leadership quality of the Chairman etc.

In a separate meeting of Independent Directors performance ofnon-independent directors performance of the board as a whole and performance of theChairman was evaluated taking into account the views of executive directors andnon-executive directors. The same was discussed in the board meeting that followed themeeting of the Independent Directors at which the performance of the Board itscommittees and individual directors were also discussed.

20. Number of meetings of the Board of Directors

During the year Six (6) meetings of the members of Board and onemeeting of Independent Directors were held the details of which are given in CorporateGovernance Report. The provisions of Companies Act 2013 and SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 were adhered to while considering the timegap between two consecutive meetings.

21. Disclosures Related to Committees and Policies

a. Audit Committee

The Audit Committee is duly constituted by the Board of Directors ofthe Company in accordance with the requirements of Section 177 of the Companies Act 2013and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015. The Audit Committee as on March 312021 comprises of:

1. Ms. Atima Khanna Chairperson

2. Mr. Surender Kumar Tuteja Member

3. Mr. Rajesh Jain Member

During the year under review the Board of Directors of the Company hadaccepted all the recommendations of the Committee.

During the year under review Audit Committee was reconstituted by theBoard of Directors of the Company on July 30 2020 whereby Dr. Ashok Kumar left the AuditCommittee due to his resignation from the Board of Directors of the Company w.e.f. July24 2020 and Ms. Atima Khanna was elected as Chairperson of the Audit Committee.

b. Nomination and Remuneration Committee

The Nomination and Remuneration Committee of Directors is dulyconstituted by the Board of Directors of the Company in accordance with the requirementsof Section 178 of the Companies Act 2013 & Regulation 19 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The Nomination andRemuneration Committee as on March 31 2021 comprises of the following directors:

1. Ms. Atima Khanna Chairperson

2. Mr. Surender Kumar Tuteja Member

3. Ms. Dipali Mittal Member

During the year under review Nomination & Remuneration Committeeof the Board was reconstituted by the Board of Directors of the Company on July 30 2020whereby Dr. Ashok Kumar left the Nomination & Remuneration Committee due to hisresignation from the Board of Directors of the Company w.e.f. July 24 2020 and Ms. AtimaKhanna was appointed as a member designated as Chairperson of the Committee w.e.f July 302020.

c. Stakeholders Relationship Committee

The Stakeholders Relationship Committee of Directors is dulyconstituted by the Board of Directors of the Company in accordance with the requirementsSection 178 of the Companies Act 2013 and Regulation 20 of SEBI (Listing obligations andDisclosure Requirements) Regulations 2015. The Stakeholders Relationship

Committee as on March 31 2021 comprising the following Directors:

1. Ms. Dipali Mittal Chairperson

2. Mr. Rajesh Jain Member

3. Ms. Atima Khanna Member

During year under review Stakeholders Relationship Committee of theBoard was re-constituted by the Board of Directors of the Company on July 30 2020 wherebyDr. Ashok Kumar left the Stakeholders Relationship Committee due to his resignation fromthe Board of Directors of the Company w.e.f. July 24 2020 and Ms. Atima Khanna also leftthe Committee and Mr. Surender Kumar Tuteja and Mr. Rajesh Jain was admitted as member ofthe Committee w.e.f July 30 2020 and Ms. Dipali Mittal was designated as Chairperson ofthe Committee.

Further during the year under review Stakeholders RelationshipCommittee was reconstituted on November 10 2020 whereby Mr. Surender Kumar Tuteja leftthe Committee and Ms. Atima Khanna was appointed as member of the Committee

22. Investor Education and Protection Fund

Company has declared the dividend for the financial year 2010-11 forwhich the unclaimed dividend was transferred to Investor Education and Protection Fund(“IEPF”) in the financial year 2018-19. No unclaimed dividend is pending to betransferred to IEPF

23. 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 itsPowers) Rules 2014 and Regulation 22 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 framed “Vigil Mechanism (Whistle Blower)Policy” (“the Policy”)' to deal with instances of fraud and mismanagementif any. This Policy has been formulated to provide Vigil Mechanism for employees includingdirectors of the Company to report genuine concerns from time to time. The said policy isplaced on the website of the Company and may be accessed at a link:-

http://media.a2zgroup.co.in/pdf/VIGIL%20(WHISTLE%20B LOWER)%20POLICY13.02.2019.pdf

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

24. Particulars of Loans Guarantees or Investments under Section 186

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

25. Related Party Transactions:

With reference to Section 134 (3) (h) of the Act all contracts andarrangements with related party under Section 188 (1)of the Act entered by the Companyduring the financial year were in the ordinary course of business and on an arm's lengthbasis.

During the year under review Company had not entered into any contractor arrangement with the related parties which could be considered ‘material' (i.e.transactions exceeding ten percent of the annual consolidated turnover as per the lastaudited financial statement entered into individually or taken together with previoustransactions during the financial year) according to the policy of the Company on themateriality of Related Party Transactions. Accordingly there are no transactions that arerequired to be reported in Form AOC-2. However you may refer to Related Partytransactions in Note No. 35 of the standalone financial statements.

The Policy on materiality of related party transactions as also dealingwith related party transactions as approved by the Board may be accessed on the Company'swebsite at the link: http://media.a2zgroup.co.in/pdf/A2Z%20Policv%20on%20Materialitv%20of%20and%20Dealing %20with%20Related%20Partv%20Transactions.pdf

26. Employee Stock Option Plan

The Nomination & Remuneration Committee of the Board of Directorsof the Company inter alia administers and monitors the A2Z Stock Option Plan 2010 (ESOP2010) A2Z Employees Stock Option Plan 2013 (EsOp 2013) A2Z Employees Stock Option Plan2014 (EsOp 2014) and A2Z Employees Stock Option Plan 2018 (ESOP 2018) of the Company inaccordance with the applicable SEBI Guidelines.

The applicable disclosures as stipulated under the SEBI Guidelines ason March 312021 with regard to the ESOP 2010 ESOP 2013 ESOP 2014 and ESOP 2018including ESOP re-granted under the above specified scheme(s) if any are provided in AnnexureC to this Report.

The certificates from the Auditors of the Company stating that theSchemes have been implemented in accordance with the SEBI Guidelines/ SEBI (Share BasedEmployee Benefits) regulations and the resolution passed by the members will be availablefor inspection in electronic mode during the meeting to any person having right to attendthe meeting and same may be accessed by sending an e-mail toinvestor.relations@a2zemail.com.

27. Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act theAnnual Return as on 31st March 2021 is available on the Company's website atwww.a2zgroup.co.in under the Investor Relations tab.

28. 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 InternalComplaints Committee which is responsible for redressal of complaints related to sexualharassment. During the year under review there were no complaints pertaining to sexualharassment.

29. Particulars of Employees and Related Disclosures

Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are given in Annexure D.

30. Conservation of Energy Technology absorption Foreign ExchangeEarnings and Outgo

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

31. Disclosure requirements

a. As per Regulation 34 read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 Corporate Governance reportalongwith certificate from DR Associates Company Secretaries thereon and managementdiscussion and analysis are attached which form part of this report.

b. Details of the familiarization program of the independent directorsare available on the website of the Company (URL:http://media.a2zgroup.co.in/pdf/Familiarization%20Programme%20for%20Independent%20 Directors.pdf).

c. In terms of Regulation 17(8) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Chief Executive officer and the ChiefFinancial officer furnished a certificate to the Board of Directors in the prescribedformat for the year under review and taken on record by the Board.

32. Listing

The Equity Shares of the Company continue to remain listed on BSELimited and National Stock Exchange of India Limited (NSE). The stipulated listing feesfor FY 2021-2022 have been paid to both the Stock Exchanges.

33. Risk Management Policy

Risk management forms an integral part of the business planning andreview cycle. The Company's Risk Management Policy is designed to provide reasonableassurance that objectives are met by integrating management control into the dailyoperations by ensuring compliance with legal requirements and by safeguarding theintegrity of the Company's financial reporting and its related disclosures.

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

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

In today's challenging and competitive environment strategies formitigating inherent risks in accomplishing the growth plans of the Company are imperative.The common risks inter alia are: Competition Business risk Technology obsolescenceInvestments retention of talent and expansion of facilities. Business risk inter-aliafurther includes financial risk political risk fidelity risk legal risk.

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

34. Directors' Responsibility Statement

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

a. In the preparation of the annual accounts for the Financial Yearended March 31 2021 the applicable accounting standards have been followed and nomaterial departures have been made from the same;

b. we have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at March 312021 and ofthe profit and loss of the company for that period;

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

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

e. we have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

f. we have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

35. Fraud Reporting

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

36. General

Your Directors state that no disclosure or reporting is required inrespect of the following items (as there were no transactions/instances on the belowmentioned 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 andwho is a Managing Director or Wholetime Director of the Company has received anyremuneration or commission from any Holding Company or Subsidiary Company of the Company.

However Mr. Amit Mittal Managing Director of the Company has beenappointed as Managing Director in A2Z Infraservices Ltd. (“AISL') a materialsubsidiary Company on October 24 2015. He is in receipt of INR 33.78 Lakh as remunerationin his capacity as Managing Director of AISL for the financial year 2020-21.

Mr. Rajesh Jain Whole Time Director cum CEO of the Company has beenappointed as Whole Time Director in A2Z Infraservices Ltd. (“AISL”) a materialsubsidiary Company on December 01 2018. He is in receipt of INR 48.00 Lakh remunerationin his capacity as Whole Time Director of AISL during the financial year 2020-21.

37. Acknowledgement

Your Directors wish to place on record the support assistance andguidance provided by the financial institutions banks customers suppliers and otherbusiness associates. We would like to thank our Company's employees for their efforts andhigh degree of commitment and dedication. Your Directors especially appreciate thecontinued understanding and confidence of the Members. Your Directors also thank andappreciate all the Bankers of the Company for their support extended by them to theCompany in difficult times and for accepting the settlement process for settling the debtamount in an amicable manner.

For and on behalf of Board of Directors
Date: September 04 Place: Bengaluru Sd/- (Surender Kumar Tuteja) 2021 Chairman DIN-00594076

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