Mar 31, 2018
To
The Members of
A2Z Infra Engineering Ltd.
The Directors take pleasure in presenting the 17th Annual Report together with the annual audited financial statements for the year ended March 31, 2018.
1. Financial summary or highlights/Performance of the Company
The highlights of financial results on Standalone and Consolidated basis for the financial year ended on March 31, 2018 are as follows:
(INR in lakh)
Particulars |
Standalone |
Consolidated |
||
2017-18 |
2016-17 |
2017-18 |
2016-17 |
|
Revenue |
||||
Revenue from Operations |
35,751.56 |
63,455.83 |
70,853.82 |
99,550.84 |
Add: Other Income |
3,697.86 |
1,563.48 |
4,310.47 |
3,773.05 |
Total revenue |
39,449.42 |
65,019.31 |
75,164.29 |
1,03,323.89 |
Expenses |
||||
Cost of Material Consumed |
27,804.66 |
47,240.91 |
35,817.12 |
56,340.53 |
Purchase of Stock in Trade |
2,602.17 |
4,996.99 |
2,602.17 |
4,996.99 |
Changes in Inventories |
- |
- |
294.55 |
(145.68) |
Employee benefit expenses |
2,219.43 |
1,965.05 |
26,501.06 |
25,280.45 |
Finance Cost |
12,978.07 |
11,967.31 |
20,599.69 |
20,053.32 |
Depreciation and amortization expenses |
1,284.70 |
1,447.52 |
3,264.75 |
4,307.91 |
Other Expenses |
5,845.46 |
4,501.85 |
8,149.34 |
6,980.62 |
Total Expenses |
52,734.49 |
72,119.63 |
97,228.68 |
1,17,814.14 |
Loss before Exceptional Items and Tax |
(13,285.07) |
(7,100.32) |
(22,064.39) |
(14,490.25) |
Exceptional Items |
1,828.89 |
(959.58) |
13,557.23 |
(9,877.58) |
Loss before Tax |
(11,456.18) |
(8,059.90) |
(8,507.16) |
(24,367.83) |
Tax expense |
||||
Current Tax |
22.77 |
3.67 |
190.85 |
237.67 |
Reversal of Tax expense relating to prior years |
- |
- |
1.39 |
(3.78) |
Deferred Tax (Net) |
(2.01) |
5,855.41 |
45.01 |
5,968.30 |
Total Tax Expense |
20.76 |
5,859.08 |
237.25 |
6,202.19 |
Loss for the year |
(11,476.94) |
(13,918.98) |
(8,744.41) |
(30,570.02) |
Other Comprehensive Income |
||||
i) Items that will not be reclassified to profit and loss |
40.31 |
29.58 |
71.26 |
57.44 |
ii) Income Tax relating to Items that will not be reclassified to profit and loss |
- |
- |
- |
- |
Total Comprehensive Income |
40.31 |
29.58 |
71.26 |
57.44 |
Total Comprehensive income (Comprising Loss and other Comprehensive Income) |
(11,436.63) |
(13,889.40) |
(8,673.15) |
(30,512.58) |
Note: The above figures are extracted from the standalone and consolidated annual financial statements of the Company as per Indian Accounting Standards (Ind AS).
Operations Review Standalone:
During the year under review, the Turnover of the Company has shown a decrease as compared to that of the previous year figure by 43.66%.The Company has achieved a Turnover of INR 35,751.56 Lakh as against INR 63,455.83 Lakh in the previous year. The Company has made net Loss after tax of INR 11,436.63 Lakh whereas in the previous year Company has made net Loss of INR 13,889.40 Lakh.
The Net Worth of the Company has increased to INR 61,336.63 Lakh as at the end of the current year from INR 60,470.49 Lakh as at the end of the previous year representing increase in Net Worth by 1.43%.
The Debt Equity ratio of the Company has decreased to 1.20 as at the end of the current year as compared to 1.59 as at the end of the previous year.
Consolidated:
The consolidated Turnover of the Company for the current financial year is INR 70,853.82 Lakh as against INR 99,550.84 Lakh in the previous year representing decrease in Turnover by 28.83%. The Company on consolidated basis has made a net Loss of INR 8,673.15 Lakh as against INR 30,512.58 Lakh in the previous year.
The consolidated Net Worth of the Company has increased to INR 37,195.38 Lakh as at the end of the current year from INR 35,868.08 Lakh as at the end of previous year representing increase in Net Worth by 3.70 %.
The consolidated Debt Equity ratio of the Company has decreased to 3.39 as at the end of the current year compared to 4.59 as at the end of previous year.
2. Consolidated Financial Statements
The Audited Consolidated Financial Statements of your Company as on March 31, 2018, have been prepared in accordance with the relevant Indian Accounting Standards (Ind AS) issued by Accounting Standards Board (ASB) and Regulation 33 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and provisions of the Companies Act, 2013.
In accordance with Section 129(3) of the Companies Act, 2013 and schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Consolidated Financial Statements of the Company, including the financial details of all the subsidiary companies of the Company, forms a part of this Annual Report.
3. Dividend
On account of the losses reported by the Company during the current financial year, the Board of Directors does not recommend any dividend for the financial year ended March 31, 2018.
4. Operational highlights
The key highlights of the Companyâs various businesses are as follows:
Power Transmission & Distribution:
Your Company is one of the leading players in Indiaâs Engineering & Urban Infrastructure Services sector. As part of the services, the Company provides integrated design, testing, installation, construction and commissioning services on a turn-key basis to its clients. The Companyâs projects include rural electrification, railway overhead electrification, reduction of AT&C losses, feeder renovation, underground cabling, feeder segregation, installing High Voltage Distribution System (âHVDSâ) and Low Voltage Distribution System (âLVDSâ) distribution lines and transmission lines. The Company has strong capabilities to build:
- Substations & Switchyards up to 765 kV
- Transmission lines up to 765 kV
- 11 / 33 kV distribution lines comprising of Feeder Renovation Projects, High Voltage Distribution System, AT&C Loss Reduction, Tube Well Connection, Segregation of Domestic and Agriculture load, Augmentation of Lines, Providing Laying of HT & LT Aerial Bunched Cables and Offering BPL Connections.
Company has its overseas presence in Nepal, Zambia, Uganda and Tanzania.
Under Engineering Services segment we may pursue infrastructure projects like Sewage Network & Treatment Plants, Gas Distribution Networks, and Metro projects in select cities.
Telecom Infrastructure EPC
Telecom infrastructure projects is the main business activity of the Company. Major offerings by Company in Telecom Infrastructure EPC are supplying, laying and maintaining of Optical Fibre Cables (OFC) networks. EPC services offered by the Company under this segment include:
- Material Planning & Project Management
- Radio Frequency Engineering Services
- Engineering Construction & Infrastructure Services
- Optical Fiber Cable NLD / Access Networking Construction & Maintenance
- Network Integration
- Telecom Infrastructure Operation & Maintenance Services
Your Company is successfully executing orders for construction of Telecom Network Backbone on Turnkey basis in the untapped toughest terrains of the country like Leh, Ladakh and North East India, which will help in building the optical Network to connect each and every part of the Nation. We combine a proven track record and professional skills woven together with a culture of trust.
Your Company is now expanding its System Integration capabilities to build and operate Data Network and Digital Transmission of Telecom Operators.
To cater the vision of developing India through Smart Cities Project, your Company is also planning to foray into the area of building and operating Surveillance Networks, Aviation Sector, Smart Metering for Power and Water Sector .
Waste to Energy- Power Generation Projects (PGP)
The Company being an Infrastructure Company also provides solutions for Clean and Green Energy. The Company is planning to build scale in Green Technology solutions in all areas of the power sector, starting from generation of power to its distribution to end consumers. The Company collaborated with sugar mills for setting up three power plants on Built, Own, Operate and Transfer (BOOT) basis for a period of 15 years in the state of Punjab. To ensure continuous supply of RDF to the respective the Power Plants the Company has developed an indigenous process in its waste processing plant for running the said Plants on Refuse Derived Fuel (RDF) from Municipal Solid Waste.
5. Change in the nature of business
There has been no change in the nature of business during the year under review.
6. Material Changes and Commitments
After the period under review and before the date of this report, the following settlements are entered with the Lenders:
1. The Company entered into One Time Settlement (OTS) with The Hongkong and Shanghai Banking Corporation Limited (âHSBC Bankâ) and has signed the Settlement Agreement with HSBC Bank on April 04, 2018 to settle all the outstanding dues (including interest) for an amount of Rs. 2.80 Crores in terms of the said Settlement Agreement.
2. A2Z Green Waste Management Ltd. (Subsidiary of the Company) (âhereinafter referred to as A2Z Greenâ) has entered into a Business Transfer Agreement on 27th July 2018 to transfer Kanpur Project consisting of 1500 TPD of P&D Unitalong with 15Mw Power Plant located in Kanpur city to Earth Environment Management Services Pvt. Ltd. (EeMSPL) (a Wholly Owned Subsidiary of A2Z Green) at a consideration of Rs. 203.75 Crores by way of a slump sale on a going concern basis along with all its assets and liabilities.
7. Updates on Corporate Debt Restructuring (CDR)
Corporate Debt Restructuring (CDR) package of Company for restructuring of its debts was approved by Corporate Debt Restructuring Empowered Group (âCDR EGâ) and the same has been successfully implemented and CDR Lenders of the Company have appointed SBICAP Trustee Company Limited (SBICAP) as their Security Trustee on the terms and conditions contained in Security Trustee Agreement executed on March 27, 2014 among the Company, Lenders, and the Security Trustee.
Your Company is working assiduously to reduce the debt burden and in line with this strategy the Company has entered into One Time Settlement Agreements with various Lenders including SICOM Limited, Edelweiss Asset Reconstruction Company Limited as representative of EARC Trust SC 299 for the Loan assigned by Yes Bank Limited and Standard Chartered Bank during the FY 2017-18.
8. Scheme of Arrangement / Reconstruction/ReOrganization
The Scheme of Arrangement/Reconstruction/ReOrganization (âthe Schemeâ) between your Company and its Secured Creditors under Sections 391 to 394 of the Companies Act, 1956 for implementation of the Corporate Debt Restructuring Package (âCDR Packageâ) as approved by the Corporate Debt Restructuring Empowered Group (âCDR EGâ) on all the Secured Creditors of the Company was earlier approved by the Board of Directors during the RY.2014-15.
The Companyâs Petition for first Motion has been disposed off by the Honâble High Court of Punjab & Haryana at Chandigarh and the Company has filed a Petition for Second Motion and the matter is presently sub-judice with the NCLT/ Honâble High Court of Punjab & Haryana at Chandigarh.
9. Deposits
During the year under review, the Company has not accepted any deposits within the meaning of Sections 2(31) and 73 of the Companies Act, 2013, and the Rules framed thereunder and any re-enactments thereof, and consequently, there was no amount of principal or interest was outstanding towards the Public deposit as on the Balance Sheet date.
10. Significant and Material Orders passed by the Regulators or Courts or Tribunals
There are no significant material orders passed by the Regulators or Courts or Tribunal which would impact the going concern status of the Company and its future operations.
11. Internal Financial Controls and systems:
Your Company has in place adequate financial control system and framework in place to ensure:
- The orderly and efficient conduct of its business;
- Safeguarding of its assets;
- The prevention and detection of frauds and errors;
- The accuracy and completeness of the accounting records; and
- The timely preparation of reliable financial information.
Significant observations including recommendations for improvement of the business processes are reviewed by the Management before reporting to the Audit Committee. The Audit Committee then reviews the Internal Audit reports and the status of implementation of the agreed action plan. This system of internal control facilitates effective compliance of Section 138 of Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The internal auditor of the company checks and verifies the internal control and monitors them in accordance with policy adopted by the company. The Board regularly reviews the effectiveness of controls and takes necessary corrective actions where weaknesses are identified as a result of such reviews. This review covers entity level controls, process level controls, fraud risk controls. Based on this evaluation, there is nothing that has come to the attention of the Directors to indicate any material break down in the functioning of these controls, procedures or systems during the year. There have been no significant events during the year that have materially affected, or are reasonably likely to materially affect, our internal financial controls.
12. Secretarial Standard
The Company is in Compliance with the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2).
13. Share Capital Authorised Share Capital:
During the year under review, the Authorised Share Capital of the Company has been increased from Rs. 160,00,00,000 (Rupees One Hundred Sixty Crore Only) divided into 16,00,00,000 (Sixteen Crore) equity shares of Rs. 10/-(Rupees Ten only) each to Rs. 240,00,00,000 (Rupees Two Hundred Forty Crore Only) divided into 24,00,00,000 (Twenty Four Crore) equity shares of Rs. 10/- (Rupees Ten only) each pursuant to Ordinary Resolution passed by the Shareholders of Company through Postal ballot on December 17, 2017
Paid up Share Capital:
During the year, following allotments were made: -
1. The Nomination & Remuneration Committee of the Board of Directors of the Company in its meeting duly held on May 29, 2017 has allotted 1,10,005 (One Lakh Ten Thousand Five) equity Shares on the conversion of the ESOPâs as per Employee Stock Option Plan, 2013 and 15,000 (Fifteen Thousand) Equity Shares on the conversion of the ESOPâs as per Employee Stock Option Plan, 2014 of face value of Rs.10/- each to the eligible Employees of the Company who have exercised their stock options under the A2Z Employee Stock Option Plan 2013 & 2014.
2. The Nomination & Remuneration Committee of the Board of Directors of the Company in its meeting duly held on September 21, 2017 has allotted 56,000 (Fifty Six Thousand) equity Shares on the conversion of the ESOPâs as per Employee Stock Option Plan, 2013 and 4,15,000 (Four Lakh Fifteen Thousand) Equity Shares on the conversion of the ESOPâs as per Employee Stock Option Plan, 2014 of face value of Rs.10/- each to the eligible Employees of the Company who have exercised their stock options under the A2Z Employee Stock Option Plan 2013 & 2014.
3. The Nomination & Remuneration Committee of the Board of Directors of the Company in its meeting duly held on February13, 2018 has allotted 58,000 (Fifty Eight Thousand) equity Shares on the conversion of the ESOPâs as per Employee Stock Option Plan, 2013 and 2,40,000 (Two Lakh Forty Thousand) Equity Shares on the conversion of the ESOPâs as per Employee Stock Option Plan, 2014 of face value of Rs.10/- each to the eligible Employees of the Company who have exercised their stock options under the A2Z Employee Stock Option Plan 2013 & 2014.
4. Further, the Board of Directors of the Company in its meeting duly held on February 13, 2018 pursuant to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, has allotted 1,77,13,569 (One Crore Seventy Seven Lakh Thirteen Thousand Five Hundred Sixty Nine) Equity Shares of Rs. 10/- each on Preferential Basis to the Lenders upon conversion of a part of their facilities/loans (including Interest) into Equity Shares at an issue price of Rs. 39.80/- each. The details of aforesaid allotment is as follows:
S. No. |
Name of Allottee(s) |
No. of Shares |
1. |
SICOM Limited |
62,81,408 |
2. |
Edelweiss Asset Reconstruction Company Ltd. acting as representative of EARC Trust SC 299 |
1,14,32,161 |
5. Further, the Board of Directors of the Company in its meeting duly held on February 23, 2018 pursuant to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, has allotted 1,25,62,815 (One Crore Twenty Five Lakh Sixty Two Thousand Eight Hundred Fifteen) Equity Shares of Rs. 10/- each on Preferential Basis to Standard Chartered Bank (âthe Lenderâ) upon conversion of a part of their facilities/loans (including Interest) into Equity Shares at an issue price of Rs. 39.80/- each.
Consequent to the above said allotments, the paid up share capital of the Company was increased to Rs. 176,11,98,580/- (Rupees One Hundred Seventy Six Crore Eleven Lakh Ninety Eight Thousand Five Hundred Eighty Only) divided into 17,61,19,858 (Seventeen Crore Sixty One Lakh Nineteen Thousand Eight Hundred Fifty Eight) Equity Shares of Rs. 10/- each as at March 31, 2018. With respect to the above said allotments, the Company filed the Listing Application(s) for listing of the issued securities on the respective stock exchange(s) where the securities of the Company are listed and after the approval of the said listing application(s) the issued shares of the Company have been listed on BSE Limited and National Stock Exchange of India Limited.
14. Subsidiaries, Joint Ventures, and Associate Companies
As on March 31, 2018, the Company had 31 (Thirty One) direct and step down subsidiary Companies. Further the Company has entered into Joint Venture agreements with unincorporated JVâs for bidding of tenders & contracts the details of which is given in the note no. 32 & 33 to the standalone and note no. 34 & 35 to the consolidated financial statements. Also the Company is a member of an association of person (AOP) in which Company is having 60% share in profits.
As per sub-section (3) of Section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements and performance of the Companyâs subsidiaries and associate company for the year ended March 31, 2018, is included as per the prescribed format in this Annual Report. The Financial Statements of these subsidiaries are uploaded on the website of the Company in compliance with Section 136 of the Companies Act, 2013. The Financial Statements of these subsidiaries and the other related detailed information will be made available to any Member of the Company/its subsidiary(ies) seeking such information at any point of time and are also available for inspection by any Member at the Registered Office of the Company on all working days except Saturday and Sunday during business hours upto the date of the Annual General Meeting.
During FY 2017-18, there has been no major change in the nature of business of your Company and its subsidiaries. During the year under review, the Company has transferred its entire stake in Star Transformers Ltd. (a subsidiary of the Company), along with Management Control.
In terms of the Regulation 46(2)(h) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the policy for determining material subsidiaries is placed on the website of the Company -http://a2zgroup.co.in/ pdf/Policy on material subsidiary.pdf
Report on the performance and financial position of each of the subsidiaries has been provided in Form AOC-1 and is forming part of the Annual Report as Annexure A.
15. Auditors
Statutory Auditors and Auditorsâ Report
M/s. Walker Chandiok & Co LLP (Firm Registration No. 001 076N/N500013), Chartered Accountants, were appointed as auditors of the Company from the conclusion of the Thirteenth Annual General Meeting (AGM) of the Company held on September 27, 2014 to the conclusion of the Eighteenth Annual General Meeting to be held for the Financial Year 2018-19. Vide notification dated May 7, 2018 issued by Ministry of Corporate Affairs, the requirement of seeking ratification of appointment of statutory auditors by members at each AGM has been done away with. Accordingly, no such item has been considered in the notice of the 17th Annual General Meeting.
The auditorâs report presented by M/s Walker Chandiok & Co LLP, Statutory Auditors on the accounts of the company for the financial year ended March 31, 2018 is self-explanatory and requires no comments and the Management replies to the audit observations are as under:
Explanation to Point (vii)(a), (b) & (viii) of Auditorâs report on Standalone Financials of A2Z Infra Engineering Ltd.
In respect of auditorâs observation in Standalone financial statements regarding certain default in payment of interest and repayment of dues of banks and delay in depositing statutory dues.
It is clarified that the delay arose on account of delayed realization of trade receivables coupled with delays in commencement of commercial production at its biomass based power generation plants. The approved CDR package of the Company which got implemented in March 2015 only, envisages the due payment towards statutory dues of the Company. Further, the Company has requested all its lenders to expedite the GAP funding proposal and has also fasten its process for realization of fund from old completed projects, which will result in better cash flow position from the projects. The management believes that by that way Company shall make the payments as and when the funds are released by the bankers.
Explanation to Para 9(a) of Auditorâs report on Consolidated Financials of A2Z Infra Engineering Ltd., its subsidiaries, joint ventures and associates & Para 9 (a) of Auditorâs report on Standalone Financials of A2Z Infra Engineering Ltd.
The management has performed impairment assessment of three cogeneration power plants set up in collaboration with certain sugar mills on Built, Own, Operate and Transfer (BOOT) basis for a period of 15 years. As at March 31, 2017, such plants have a power generation capacity of 15 MW each. The assessment has been done on the basis of assumptions of useful life of assets, discounted cash flows with significant underlying assumptions, achievement of certain operating capacity and the ability of new technology to perform on a consistent basis.
Based on the assessment and advice from an independent legal counsel on the availability of concession period, including renewal period by exercising the option for renewal/ extension of the concession period, the management, is confident, that there exists reasonable certainty that arrangement shall be extended for a term of five (5) years. The management believes that the estimates of the useful lives are reasonable and no impairment exists in the carrying value of power generation plants.
Explanation to para 9(b) of Auditorâs report on Consolidated Financials of A2Z Infra Engineering Ltd., its subsidiaries, joint ventures and associates & para 9 (b) of Auditorâs report on Standalone Financials of A2Z Infra Engineering Ltd.
Contract revenue in excess of billings amounting to INR 8,381.36/- Lakh pertains to revenue recognized by the Company during earlier years, representing amounts billable to, and receivable from the customers towards work done on certain EPC contracts under execution by the Company in accordance with the terms implicit in the contract. The delay in billing of these amounts is on account of conclusion of reconciliations with the customers, pending joint measurement/ survey of the work done till date and nonachievement of milestones as per the contractual terms. Management is in discussions with the customers and expects to bill these amounts at the earliest, and believes that whilst it may take some time to bill and recover the amounts owing to completion of certain administrative and contractual matters, the current provision being carried in the books is adequate and no further material adjustments are considered necessary in respect of above balances.
Explanation to para 9(c) of Auditorâs report on Consolidated Financials of A2Z Infra Engineering Ltd., its subsidiaries, joint ventures and associates & para 9
(c) of Auditorâs report on Standalone Financials of A2Z Infra Engineering Ltd.
The Income tax authorities conducted a search and survey at certain premises of the Company under section 132 and 133 of the Income Tax Act, 1961 in April 2012. During the year ended March 31, 2015, the Company received the Assessment Orders for the assessment years 2009-10 to 2013-14 from the Deputy Commissioner of Income Tax (DCIT) demanding additional tax liability of INR 1,992.17 Lakh. During the year ended March 31, 2015 The Company had filed appeals with Commissioner of Income Tax (CIT) (Appeals) challenging these orders against which the said authority has granted partial relief to the Company. The Company has further filed appeals with Income Tax Appellate Tribunal (ITAT) challenging the Orders for these assessment years in respect of the matters where the CIT(A) has not accepted the Companyâs contention. Additionally, the DCIT has also filed appeals with the ITAT against the matters where the relief has been given to the Company.
Further, during the current year, the Company has received penalty order for the Assessment year 2008-09 from CIT and for Assessment year 2011-12 and 2013-14 from Deputy Commissioner of Income Tax (DCIT) demanding additional tax liability of INR 798.63 lacs against which the Commissioner of Income Tax (CIT) (Appeals) had not granted relief to the Company. The Company has filed appeals with ITAT for the Assessment Year 2008-09 and with CIT(A) for the Assessment Year 2011-12 and 2013-14 challenging the penalty orders.
Based on their assessment and upon consideration of advice from the independent legal counsel, the management believes that the Company has reasonable chances of succeeding before the ITAT /CIT(A) and does not foresee any material liability. Pending final decision on these matters no adjustment has been made in the financial statements.
Explanation to para 9(d) of Auditorâs report on Consolidated Financials of A2Z Infra Engineering Ltd., its subsidiaries, joint ventures and associates & para 9 (d) of Auditorâs report on Standalone Financials of A2Z Infra Engineering Ltd.
During financial year 2016-17, the Company based on the legal advice filed an application for advance ruling with the Advance Ruling Authorities (âthe Authorityâ) regarding applicability of service tax in respect of one of the projects undertaken by them. During the year ended March 31, 2018, the Company has received response to its application wherein the Authority has opined that entire project is covered within the ambit of the service tax. Accordingly, the Company has recognized the service tax liability and based on the contractual terms which stipulates that any taxes shall be borne by the customer, has also recognized amount recoverable from customer of an equivalent amount. Further, the management believes that the interest, if any, on the delayed deposit of the aforementioned service tax liability is currently unascertainable and shall be reimbursed by the customer. The Company has made submissions with the customer in this regard.
Additionally, based on the independent legal advice, the Company believes that the input tax credit in respect of the aforementioned project shall be adjustable against the liability considering the entire project has now been clarified to be covered under the service tax ambit. Accordingly, no further adjustments to the books of account are considered necessary.
Explanation to para 9(e) of Auditorâs report on Consolidated Financials of A2Z Infra Engineering Ltd., its subsidiaries, joint ventures and associates & para 9 (e) of Auditorâs report on Standalone Financials of A2Z Infra Engineering Ltd.
The following subsidiary companies, A2Z Waste Management (Jaipur) Limited, A2Z Waste Management (Varanasi) Limited and A2Z Waste Management (Moradabad) Limited, step-down subsidiaries of the Company have incurred net loss for the year ended March 31, 2018 aggregating INR 109.01 lacs, INR 3,910.65 lacs and INR 621.62 lacs respectively and as of that date their accumulated losses aggregating INR 768.50 lacs, INR 2,582.43 lacs and INR 984.76 lacs respectively resulting in complete erosion of the net worth and are presently facing liquidity problems on account of non-realization of trade receivables.
Management is in the process of exploring various options to revive their business and has initiated arbitration proceedings against the respective municipal authorities for realization of the outstanding receivables. Based on independent legal advice, the management believes that amount recoverable from such arbitration proceedings shall be in excess of the aforementioned accumulated losses and shall result in the requisite cash inflow which shall resolve the liquidity issues being presently faced by the Company and support the management plan of revival of business. Hence, the financial statements of the aforementioned subsidiaries have been prepared on the assumption of going concern and no adjustment is necessary to be made in the consolidated financial Statements.
Branch Auditors
In terms of Section 143(8) of the Companies Act, 2013 read with Rule 12 of the Companies (Audit and Auditors) Rules, 2014, the audit of the accounts of the branch offices of the Company located outside India is required to be conducted by the person(s) or firm(s) qualified to act as Branch Auditors in accordance with laws of that country. The Board of Directors seeks approval of the Members to authorize the Board of Directors based on the recommendation of Audit Committee to appoint Auditors for the branch office(s) of the Company and also to fix their remuneration. The Board of Directors recommends to the Members to pass the resolution, as stated in Item No. 3 of the Notice, convening the forthcoming Annual General Meeting.
Secretarial Auditor
In terms of the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. DR Associates, Company Secretaries as Secretarial Auditors to conduct Secretarial Audit for the Financial Year 2017-18. The Secretarial Audit Report given by Mr. Suchitta Koley, a partner of M/s DR Associates, Company Secretaries in practice, New Delhi is given as Annexure B (Form MR-3) which forms part of this report.
The said Secretarial Audit Report does not contain any qualification, reservation or adverse remark made by the secretarial auditor.
Cost Auditors
Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the cost records in respect of road and construction activity need to be audited. In compliance to the above, the Board of Directors upon the recommendation of the Audit Committee had appointed M/s HAM & Associates, as the Cost Auditors of the Company for the Financial Year ended March 31, 2019. In accordance with the above provisions the remuneration payable to the cost auditor should be ratified by the Members. Accordingly, the Board of Directors recommends to the Members to pass the resolution, as stated in Item No. 4 of the Notice convening the forthcoming Annual General Meeting.
16. Corporate Social Responsibility (CSR)
In accordance with the provisions of Section 135 of the Companies Act, 2013 and Rules framed thereunder, the Company has constituted a Corporate Social Responsibility Committee (CSR Committee) of the Board of Directors on August 14, 2014. The CSR Committee comprises of three Directors viz. Mr. Amit Mittal, Mr. Surender Kumar Tuteja and Ms. Dipali Mittal as members of the committee. The CSR Policy of the Company as recommended by the CSR Committee and approved by the Board is placed on the website of the Company and may be accessed via following link.-http://media.a2zgroup.co.in/pdf/CSR Policy A2Z.pdf
The average net profits calculated as per provisions of Section 198 of the Companies Act, 2013 of the preceding three (3) financial years being negative, the Company was not under any obligation to spend any amount on CSR.
17. DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment & Resignation of Directors/KMPâs
1. Mr. Suresh Prasad Yadav who was appointed under the category of Non-Executive Independent Director effective from February 03, 2014 has resigned from his position w.e.f. July 24, 2017.
2. Mr. Gaurav Jain, who was appointed under the category of Non-Executive Non-Independent Director effective from September 17, 2015 has resigned from his position w.e.f September 01, 2017.
3. Ms. Dipali Mittal who was appointed under the category of Whole Time Director effective from April 01, 2005 has been re-designated as Non-Executive NonIndependent Director w.e.f August 14, 2017.
4. Retire by Rotation
In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Ms. Dipali Mittal, Director, retires by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offers herself for reappointment.
5. Pursuant to the provisions of sub-section (51) of Section 2 and Section 203 of the Companies Act, 2013 read with the Rules framed thereunder, the Key Managerial Personnel (KMP) of the Company as on 31st March 2018, are:
1. Mr. Amit Mittal, Managing Director
2. Mr. Rajesh Jain, Whole Time Director & CEO
3. Dr. Ashok Kumar Saini, Whole Time Director
4. Mr. G. R. Nagendran, Chief Financial Officer
5. Mr. Atul Kumar Agarwal, Company Secretary
18. Policy on Directorsâ appointment and Remuneration
As on March 31, 2018, the Board consists of six members, three of whom are Executive or Whole Time Directors, one is Non-Executive and Non-Independent Woman Director and other two are Independent Directors.
The Policy of the Company on Directorsâ appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub section (3) of section 178 of the Companies Act, 2013, is also available on the Companyâs website. There has been no change in the policy since the last financial year. We affirm that the remuneration paid to directors is as per terms laid out in the Nomination and Remuneration Policy of the Company.
19. Declaration by Independent Director(s)
The Company has received necessary declaration from each of the Independent Directors under section 149(7) of the Companies Act, 2013 that they meet the criteria of independence as laid down in section 149(6) of the Companies act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.
20. Annual evaluation of Board Performance and Performance of its committees and Individual Directors
The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India (âSEBIâ) under SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 and as per the guidance note issued by SEBI dated January 5, 2017 vide its Circular No. SEBI/HO/CFD/CMD/CIR/P/2017/004.
The performance of the Board was evaluated by the members of the Board on the basis of the guidance note and criteria laid down such as the Board composition and structure, effectiveness of board processes, information and functioning, Board culture and dynamics, quality of relationship between the Board and the Management and efficacy of communication with external stakeholders, competence and experience of Board to conduct its affairs effectively, operations are in line with strategy, integrity of financial information and the robustness of financial and other controls, effectiveness of risk management processes, etc.
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the guidance note and criteria laid down such as the composition of committees, effectiveness of committee meetings, committees are appropriate with the right mix of knowledge and skills, effectiveness and advantage of the Committee, independence of the Committees, etc.
The Board and the Nomination & Remuneration Committee (âNRCâ) reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, willingness to devote time and effort to understand the company and its business by the directors, competency to take the responsibility and having adequate qualification, experience and knowledge, quality and value of their contributions at board meetings, effectiveness of Leadership quality of the Chairman etc. In a separate meeting of Independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its committees and individual directors were also discussed.
21. Number of meetings of the Board of Directors
During the year eight meetings of the members of Board and one meeting of Independent Directors were held, the details of which are given in Corporate Governance Report. The provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, were adhered to while considering the time gap between two consecutive meetings.
22. Disclosures Related to Committees and Policies
a. Audit Committee
The Audit Committee of Directors was reconstituted by the Board of Directors of the Company in accordance with the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. The Audit Committee as on 31st March 2018, comprises of:
1. Mr. Surender Kumar Tuteja, Chairman
2. Dr. Ashok Kumar, Member
3. Mr. Rajesh Jain, Member
During the year under review, the Board of Directors of the Company had accepted all the recommendations of the Committee.
b. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of Directors was reconstituted by the Board of Directors of the Company in accordance with the requirements of Section 178 of the Companies Act, 2013 & Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Nomination and Remuneration Committee as on 31st March 2018, comprises of the following directors:
1. Dr. Ashok Kumar, Chairman
2. Mr. Surender Kumar Tuteja, Member
3. Ms. Dipali Mittal, Member
c. Stakeholders Relationship Committee
The Stakeholders Relationship Committee of Directors was reconstituted by the Board of Directors of the Company in accordance with the requirements of Section 178 of the Companies Act, 2013 and Regulation 20 of SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015. The Stakeholders Relationship Committeeas on 31st March 2018, comprising the following Directors:
1. Dr. Ashok Kumar, Chairman
2. Mr. Surender Kumar Tuteja, Member
3. Ms. Dipali Mittal, Member
23. Remuneration Policy for the Directors, Key Managerial Personnel and other employees
In terms of the provisions of Section 178(3) of the Act and Para A of Part D under Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination & Remuneration Committee is responsible for formulating the criteria for determining qualification, positive attributes and independence of a Director. The Nomination & Remuneration Committee is also responsible for recommending to the Board a policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees. In line with this requirement, the Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, KMP and Senior Management and their remuneration.
The Remuneration Policy of the Company can be accessed via following link.-http://a2zgroup.co.in/pdf/Remuneration Policy.pdf
24. Vigil Mechanism / Whistle Blower Policy
The Board has pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, framed âVigil Mechanism (Whistle Blower) Policyâ (âthe Policyâ)â to deal with instances of fraud and mismanagement, if any. This Policy has formulated to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The said policy is placed on the website of the Company and may be accessed at a link:-http://a2zgroup.co.in/pdf/Whistle Blowe 13 Apr 2015.pdf.
This vigil mechanism of the Company is overseen by the Audit Committee and provides adequate safeguard against victimization of employees and directors who avail of the vigil mechanism and also provide direct access to the Chairperson of the Audit Committee in appropriate or exceptional circumstances.
25. Particulars of Loans, Guarantees or Investments under Section 186
Company being the infrastructure Company, Section 186 is not applicable on the Company and particulars of loans, guarantees, investments form part of the notes to the Financial Statements provided in this Annual Report. All the loans, guarantees and investments made are in compliance with the provisions of the Companies Act, 2013 and the same are disclosed in the Financial Statements.
26. Related Party Transactions:
Related party transactions that were entered into during the financial year were in the ordinary course of business and on an armâs length basis.
The particulars of the contract or arrangements with related parties during the financial year 2017-18 are disclosed in Form No. AOC -2 which forms part of the Annual Report as an Annexure C. Except as stated in the disclosure, there were no materially significant related party transactions made by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
The Policy on materiality of related party transactions as also dealing with related party transactions as approved by the Board may be accessed on the Companyâs website at the link: http://a2zgroup.co.in/pdf/Related Party Policy 13 Apr 2015.pdf.
All Related Party Transactions which were in the ordinary course of business and on armâs length basis were placed before the Audit Committee for their approval. Prior omnibus approval of the Audit Committee is obtained on annual basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their ratification on quarterly basis.
27. Employee Stock Option Plan
The Nomination & Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the A2Z Stock Option Plan 2010 (ESOP 2010), A2Z Employees Stock Option Plan 2013 (EsOp 2013), A2Z Employees Stock Option Plan 2014 (ESOP 2014), A2Z Employees Stock Option Plan 2013 (Re-grant-I)(ESOp 2013 Re-grant I) and A2Z Employees Stock Option Plan 2014 (Re-grant-I)(ESOP 2014 Re-grant I) of the Company in accordance with the applicable SEBI Guidelines.
The applicable disclosures as stipulated under the SEBI Guidelines as on 31st March 2018 with regard to the ESOP 2010, ESOP 2013, ESOP 2014 and ESOP 2013 Re-grant I & ESOP 2014 Re-grant I are provided in Annexure D to this Report.
The certificates from the Auditors of the Company that the Schemes have been implemented in accordance with the SEBI Guidelines/ SEBI (Share Based Employee Benefits) regulations and the resolution passed by the members would be placed at the Annual General Meeting for inspection by members.
28. Extract of Annual Return
Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return as per Form- MGT-9 for the financial year ended March 31, 2018 made under the provisions of Section 92(3) of the Act is attached as Annexure E which forms part of this Report.
29. Prevention of Sexual Harassment at Workplace:
As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 read with rules made thereunder, your Company has constituted Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment. During the year under review, there were no complaints pertaining to sexual harassment.
30. Particulars of Employees and Related Disclosures
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure F.
31. Conservation of Energy, Technology absorption, Foreign Exchange Earnings and Outgo
Pursuant to provisions of Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 the details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are attached as Annexure G which forms part of this report.
32. Disclosure requirements
a. As per Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, Corporate Governance report with auditorsâ certificate from DR Associates thereon and Management Discussion and Analysis are attached, which form part of this report.
b. Details of the familiarization program of the independent directors are available on the websiteof the Company (URL:http://a2zgroup.co.in/pdf/Familiarization Programme for Independent Directors).
c. In terms of Regulation 17(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Chief Executive officer and the Chief Financial officer furnished a certificate to the Board of Directors in the prescribed format for the year under review which has been reviewed by the Audit Committee and taken on record by the Board.
33. Listing
The Equity Shares of the Company continue to remain listed on BSE Limited (formerly The Bombay Stock Exchange Limited) and National Stock Exchange of India Limited (NSE). The stipulated listing fees for FY 2018-2019 have been paid to both the Stock Exchanges.
34. Risk Management Policy
Risk management forms an integral part of the business planning and review cycle. The Companyâs Risk Management Policy is designed to provide reasonable assurance that objectives are met by integrating management control into the daily operations, by ensuring compliance with legal requirements and by safeguarding the integrity of the Companyâs financial reporting and its related disclosures.
Therefore, in accordance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board members were informed about risk assessment and minimization procedures after which the Board formally adopted steps for framing, implementing and monitoring the risk management policy for the company in their meeting held on November 13, 2014.
The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.
In todayâs challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks inter alia are: Competition, Business risk, Technology obsolescence, Investments, retention of talent and expansion of facilities. Business risk, inter-alia, further includes financial risk, political risk, fidelity risk, legal risk.
As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.
35. Directorsâ Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that:
a. In the preparation of the annual accounts for the Financial Year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b. The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at March 31, 2018 and of the profit and loss of the company for that period;
c. The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
d. The directors have prepared the annual accounts on a going concern basis; and
e. The directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
f. The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
36. Fraud Reporting
There was no fraud reported by the Auditors of the Company under Section 143(12) of the Companies Act, 2013, to the Audit Committee or the Board of directors during the year under review.
37. General
Your Directors state that no disclosure or reporting is required in respect of the following items (as there were no transactions/instances on the below mentioned items) during the year under review:
1. No profits were transferred to any Reserves.
2. No Voluntary revision of Financial Statements or Boardâs Report.
3. No director who is in receipt of any commission from the Company and who is a Managing Director or Wholetime Director of the Company has received any remuneration or commission from any Holding Company or Subsidiary Company of the Company.
However, Mr. Amit Mittal, Managing Director of the Company has been appointed as Managing Director in A2Z Infraservices Ltd. (âAISLâ), a material subsidiary Company on October 24, 2015. He is in receipt of Rs. 48,00,000/- as remuneration in his capacity as Managing Director of AISL for the financial year 2017-18.
38. Acknowledgement
Your Directors wish to place on record the support, assistance and guidance provided by the financial institutions, banks, customers, suppliers and other business associates. We would like to thank our Companyâs employees for their efforts and high degree of commitment and dedication. Your Directors especially appreciate the continued understanding and confidence of the Members.
For and on behalf of Board of Directors
(Surender Kumar Tuteja)
Date : August 14, 2018 Chairman
Place : Gurugram DIN-00594076
Mar 31, 2015
The Directors take pleasure in presenting the fourteenth Annual Report
together with the audited financial statements for the year ended March
31, 2015.
1. Financial summary or highlights/Performance of the Company
The highlights of financial results on Standalone and Consolidated
basis for the financial year ended on March 31, 2015 are as follows:
(Rs. in Millions)
Standalone Consolidated
Particulars 2014-15 2013-14 2014-15 2013-14
Revenue from Operations 2,191.67 3,362.88 5,944.39 6,987.53
Add :Other Income 94.65 73.63 235.30 171.55
Total Income 2,286.32 3,436.51 6,179.69 7,159.08
(Loss)/Profit before
Interest, Ta x &
Depreciation (915.34) (1,109.95) (824.92) (946.32)
Less :Interest 1,085.33 822.19 1,700.34 1,213.85
Profit before Tax &
Depreciation (2,000.67) (1,932.14) (2,525.26) (2,160.17)
Less :Depreciation/
Amortization 102.84 71.21 405.75 323.95
(Loss)/Profit before
Tax & Extra Ordinary
Items (2,103.51) (2,003.35) (2,931.01) (2,484.12)
Less :Tax Expenses (819.32) 16.98 (790.83) 54.09
Net Profit/(Loss)
after Tax but before
Extraordinary item (1,284.19) (2,020.33) (2,140.18) (2,538.21)
Less :Previous
Period Item - - - -
Add :Extraordinary
Item 45.36 70.71 45.65 70.72
Net Profit/(Loss)
after Tax & before
Minority Interest (1,238.83) (1,949.62) (2,094.53) (2,467.49)
Less :Share in
Minority Interest - - (7.21) 3.05
Net Profit/(Loss)
after Tax & Minority
Interest (1,238.83) (1,949.62) (2,087.32) (2,470.54)
Balance brought
forward from
previous year 575.82 2,525.45 (941.01) 1,529.53
Less : Adjustment
on account of further
acquisition/
dilution in
Subsidiaries - - (53.02) -
Less :Tax on
Preference Dividend - - 0.01 -
Less :Adjustment
due to depreciation 13.48 - 18.68 -
Less :Share in
Minority Interest
on change in holding - - 2.13 -
Net Profit/(Loss)
available for
appropriation (676.49) 575.83 (2,996.13) (941.01)
Operations Review
Standalone:
During the year under review, the Company has achieved total income of
Rs. 2,286.32 Million as against Rs. 3,436.51 Million in the previous
year. The Company has made net loss after tax of Rs. 1,238.83 Million
as against a loss of Rs. 1,949.63 Million in the previous year.
The Net Worth of the Company has decreased to Rs. 7,967.56 Million as
at the end of the current year from Rs. 9,096.47 Million as at the end
of the previous year.
The Debt Equity ratio of the Company has gone up to 1.15 as at the end
of the current year as compared to 0.96 as at the end of the previous
year.
Consolidated:
The consolidated total income of the Company for the current financial
year is Rs.6,179.68 Million as against Rs.7,159.08 Million in the
previous year. The Company on consolidated basis has made a net Loss
after minority interest and extra ordinary items of Rs. 2,087.32
Million as against Rs. 2,470.54 Million in the previous year.
The consolidated Net Worth of the Company has come down to Rs.5,649.34
Million as at the end of the current year from Rs. 7,586.90 Million as
at the end of previous year.
The consolidated Debt Equity ratio of the Company has gone up to 2.69
as at the end of the current year compared to1.86 as at the end of
previous year.
2. Consolidated Financial Statements
The audited Consolidated Financial Statements of your Company as on
March 31, 2015, have been prepared in accordance with the relevant
Accounting Standards issued by the Institute of Chartered Accountants
of India and Clause 41 of the Listing Agreement and provisions of the
Companies Act, 2013.
In accordance with Section 129(3) of the Companies Act, 2013 and Clause
32 of the Listing Agreement entered into with the Stock Exchanges, the
Consolidated Financial Statements of the Company, including the
financial details of all the subsidiary companies of the Company, forms
part of this Annual Report as Annexure A.
3. Dividend
On account of the Losses reported by the Company during the current
year, no operational profit was generated for recommendation of
dividend for the financial year ended 31st March, 2015.
4. Company's working during the year/State of Company's Affair
Your Company is an Engineering, Procurement and Construction (EPC)
Company and is primarily engaged in the business of EPC works related
to design, developing, erection and commissioning of the LV/HV/EHV
Electrical Lines including procurement, supply, Trenching, Laying,
Installation, Testing and Maintenance of Optical Fibre Cable, Sub
Station, Transformer, Under Cabling, Automation, System Integration,
Installation of Energy Meters, as Turnkey Contractors and undertaking
distribution franchisee works in the Power Sector and participation in
system strengthening projects and rural electrification projects and
carrying on the business of power generation by renewable energy
sources of fuels like biomass, refused derived fuel, rice husk etc. The
Company has two business verticals:
EPC Division: The Company undertakes the EPC contracting business
through this division, more particularly in erection and laying of
distribution and transmission lines and erection of sub-stations for
power distribution companies and also the Laying, Installation, Testing
and Maintenance of Optical Fiber Cables.
Power Plants Division: The Company has also forayed in the renewable
energy generation business through this division by setting up biomass
based three power plants in Punjab in collaboration with sugar mills on
Built Own Operate and transfer (BOOT) basis.
Your Company is evolving from its historical business of EPC services
to being an Infrastructure Company providing solutions that promote
Clean and Green Energy. The Company is attempting to build scale in
Green Technology solutions in all areas of the power sector, starting
from generation of power to its distribution to end consumers. Towards
it, the Company is taking significant steps for generation of power
from renewable energy sources like RDF & biomass. The Company has also
entered into collaboration with sugar mills for setting up three power
plants on Built, Own, Operate and Transfer (BOOT) basis for a period of
15 years.
Your Company is currently executing orders for EPC work against APO
(Advance Purchase Order) as received by Sterile Technologies Limited
and ITI Limited for trenching laying, Installation, Testing of Optical
Fibre Cable, PLB Duct and Accessories for construction of Exclusive
Optical NLD Backbone and Optical Access routes on turnkey basis for
Defense Networks.
Also your Company has undertaken various strategic initiatives to
improve profitability by way of cost reduction, proper and efficient
execution of the Projects and making the organization structure more
responsive to customers' needs and as the Indian economy is showing
good signs of improvement and the revival the Company will rebound and
will show steady growth and progress in the near future. The Company
is involved in the endeavors that will provide best services to its
clients.
5. Change of Name of the Company
Pursuant to the shareholders' approval obtained at the 13th Annual
General Meeting, the name of the Company was changed from 'A2Z
Maintenance & Engineering Services Limited' to 'A2Z INFRA ENGINEERING
LIMITED' with effect from 15th October, 2014.
6. Change in the nature of business
There has been no change in the nature of business of the Company
during the year under review.
7. Material Changes and Commitments
There were no Material changes and commitments affecting the financial
position of the Company between the end of the financial year and the
date of the report.
8. Updates on Corporate Debt Restructuring (CDR)
Further to the information furnished in the Directors' Report for the
financial year 2014Â15, after successful implementation of Corporate
Debt Restructuring (CDR) mechanism for restructuring of its debts, as
approved by Corporate Debt Restructuring Empowered Group ("CDR EG"),
the Company has complied and continues to complete with the terms and
conditions of approved CDR package. The CDR Lenders of the Company
have appointed SBICAP Trustee Company Limited (SBICAP) as their
Security Trustee on the terms and conditions of Security Trustee
Agreement executed on March 27, 2014 by the Company, Lenders, and the
Security Trustee. For securing the due repayment, discharge and
redemption of all the Facilities by the Company to the CDR Lenders
together with interest, additional interest, liquidated damages, and
other monies in accordance with the Master Restructuring Agreement
(MRA), the security creation by way of charge on the assets of the
Company and pledge of shares of the Promoter/ Promoter Group in favor
the security trustee for and on behalf of the CDR Lenders have been
successfully completed.
Your Company is committed to honors its debt obligation in time and has
always maintained very good relations with all its lenders but due to
slow down in its operations and fall in revenue, a scarcity in funds
had been created and there has been delay at times in debt servicing.
However, the Company is exploring various opportunities and is giving
its best effort for meeting debt service obligations.
9. Scheme of Arrangement/Reconstruction/Re-Organization
The Board of Directors at their meeting held on May 06, 2014 had inter
alia approved, subject to necessary consents and other approvals as may
be required, the Scheme of Arrangement/Reconstruction/Re-Organization
("the Scheme") between your Company and its Secured Creditors under
Sections 391 to 394 of the Companies Act, 1956.
The Scheme provides for the implementation of the Corporate Debt
Restructuring Package ("CDR Package") as approved by the Corporate Debt
Restructuring Empowered Group ("CDR EG") vide Letter of Approval dated
December 28, 2013 further amended by letter dated February 03, 2014
(hereinafter collectively referred to as "CDR LOA") on all the Secured
Creditors of the Company in view of the Corporate Debt Restructuring
Package ("CDR Package") pursuant to the CDR mechanism set up by the
Reserve Bank of India (RBI).
The Scheme is subject to the approval of the Hon'ble High Court of
Punjab & Haryana at Chandigarh. Prior to filing the Scheme with the
Hon'ble High Court of Punjab & Haryana, your Company had also filed an
application with BSE Limited and National Stock Exchange of India
Limited (NSE) seeking approval in terms of the provisions of Clause
24(f) of the Listing agreement and also from the Securities Exchange
Board of India (SEBI) on June 30, 2014. The observation letters
conveying No Objection to the Scheme was issued by BSE Limited & NSE on
September 18, 2014 & September 19, 2014 respectively.
The Hon'ble High Court of Punjab & Haryana at Chandigarh vide its order
dated 22nd day of December, 2014, had directed for convening separate
meetings of Secured and Un-Secured Creditors on February 14, 2015. The
said meetings were convened as per the directions and the Court
appointed Chairman had submitted his report to the Hon'ble High Court.
The decision of the Hon'ble High Court in the matter of aforesaid
Scheme of Arrangement/Reconstruction/ Re-Organization is awaited.
10. Deposits
During the year under review, the Company has not accepted any deposits
within the meaning of Sections 2(31) and 73 of the Companies Act, 2013,
and the Rules framed there under and any re-enactments thereof, and as
such no amount of principal or interest was outstanding as of the
Balance Sheet date.
11. Significant and Material Orders passed by the Regulators or Courts
or Tribunals
There are no significant material orders passed by the Regulators or
Courts or Tribunal which would impact the going concern status of the
Company and its future operations.
12. Internal Financial Controls and systems:
Your Company has in place adequate financial control system and
framework in place to ensure:
- The orderly and efficient conduct of its business;
- Safeguarding of its assets;
- The prevention and detection of frauds and errors;
- The accuracy and completeness of the accounting records; and
- The timely preparation of reliable financial information.
Significant observations including recommendations for improvement of
the business processes are reviewed by the Management before reporting
to the Audit Committee. The Audit Committee then reviews the Internal
Audit reports and the status of implementation of the agreed action
plan.
The internal auditor of the Company checks and verifies the internal
control and monitors them in accordance with policy adopted by the
Company. The Board regularly reviews the effectiveness of controls and
takes necessary corrective actions where weaknesses are identified as a
result of such reviews. This review covers entity level controls,
process level controls, fraud risk controls. Based on this evaluation,
there is nothing that has come to the attention of the Directors to
indicate any material break down in the functioning of these controls,
procedures or systems during the year. There have been no significant
events during the year that have materially affected, or are reasonably
likely to materially affect, our internal financial controls.
13. Share Capital
Authorized Share Capital:
During the year under review, the Authorized Share Capital of the
Company has been increased two times pursuant to the ordinary
resolutions of the shareholders of the Company through Postal Ballot
Notices dated May 06, 2014 and December 12, 2014, the results of which
were declared on June 24, 2014 and March 25, 2015 respectively as
follows:
(i) from Rs.100,00,00,000/- (Rupees One Hundred Crores only) divided
into 10,00,00,000 (Ten Crores) equity shares of Rs.10/- (Rupees Ten
only) each to Rs. 115,00,00,000/- (Rupees One Hundred Fifteen Crores
only) divided into 11,50,00,000 (Eleven Crore Fifty Lacs) equity shares
of 10/- (Rupees Ten only) each; and
(ii) from Rs. 115,00,00,000/- (Rupees One Hundred Fifteen Crores only)
divided into Rs. 11,50,00,000 (Eleven Crore Fifty Lacs) equity shares
of 10/- (Rupees Ten only) to Rs. 126,00,00,000/- (Rupees One Hundred
Twenty Six Crores only) divided into 12,60,00,000 (Twelve Crore Sixty
Lacs) equity shares of 10/- (Rupees Ten Only) each ranking pari-passu
with the rights and liabilities of the existing Equity Shares.
Paid Up Share Capital:
During the year, the Company has issued and allotted 1,23,40,000 Equity
Shares of Rs. 10/- (Ten) each at a price of Rs. 10/- (Ten) per share
equity share to Mr. Amit Mittal, Promoter, pursuant to approved CDR
package of the Company under the Preferential Issue in the Board
Meeting duly held on December 12, 2014. Consequently the paid up Equity
Share Capital was increased to Rs. 86,51,76,940/- (Rupees Eighty Six
Crore Fifty One Lac Seventy Six Thousand Nine Hundred Forty only).
Further after the year under review, the paid up Equity Share Capital
of the Company was increased to Rs. 108,71,76,940/- (Rupees One Hundred
Eight Crores Seventy One Lacs Seventy Six Thousand Nine Hundred Forty
only) as the Board in its meeting held on May 09, 2015 has issued and
allotted 2,22,00,000 Equity Shares of Rs. 10/- (Ten) each at a price of
Rs. 10/- (Ten) per share equity share to M/s. Mestric Consultants
Private Limited (a Promoter Group Company) pursuant to approved CDR
package of the Company under the Preferential Issue.
The shareholders of the Company vide Postal Ballot Notice dated May 06,
2014, the results of which were declared on June 24, 2014, had approved
the issue of 23,23,80,000 (Twenty Three Crores Twenty Three Lakhs
Eighty Thousand) fully paid-up equity shares of the Company, having
face value of Rs.10/- (Rupees Ten only) each, at a price of Rs.10/-
(Rupees Ten only) per share on Preferential Basis on the Conversion of
Funded Interest Term Loan (FITL) and Working Capital Term Loan (WCTL)
to CDR Lenders and Non-CDR Lenders of the Company pursuant to approved
CDR package of the Company. The paid up capital of the Company shall
undergo changes consequent to exercise of the conversion option by the
CDR and Non-CDR Lenders in terms of the approved CDR package.
Also after the year under review, the Board in its meeting held on July
16, 2015, has considered, approved and recommended to issue to persons
other than Promoter and Promoter Group up to 2,75,25,000 (Two Crores
Seventy Five Lacs Twenty Five Thousand Only) Warrants on a preferential
basis entitling the holder of each Warrant, from time to time to apply
for and obtain allotment of one equity share of face value of Rs. 10/-
each fully paid up against each Warrant within 18 (eighteen) months of
its allotment in one or more tranches in such a manner at such price
and, on such other terms and conditions as may be determined by the
Board in accordance with the SEBI ICDR Regulations.
Further during the year under review your Company has not issued any:
a. shares with differential rights
b. sweat equity shares
14. Subsidiaries, Joint Ventures, and Associate Companies
Your Company, along with its subsidiaries and other step- down
subsidiary companies, engages in the EPC business, facility management
services and municipal solid waste (MSW) business.
As on March 31, 2015, the Company had 33 (Thirty Three) direct and step
down subsidiary Companies, 9 (Nine) unincorporated Joint ventures (JVs)
with whom the Company has entered into joint venture agreement for
bidding of tenders & contracts, and an association of person (AOP) in
which Company is having 60% sharing in profits, the details of which is
given in the note no. 37 & 38 to the standalone and note no. 36 & 37 to
the consolidated financial statements.
As per sub-section (3) of Section 129 of the Companies Act, 2013 read
with Rule 5 of the Companies (Accounts) Rules, 2014, a statement
containing salient features of the financial statements and performance
of the Company's subsidiaries and associate company for the year ended
March 31, 2015, is included as per the prescribed format in this Annual
Report. The Annual Accounts of these subsidiaries are uploaded on the
website of the Company in compliance with Section 136 of the Companies
Act, 2013. The Annual Accounts of these subsidiaries and the other
related detailed information will be made available to any Member of
the Company/its subsidiary(ies) seeking such information at any point
of time and are also available for inspection by any Member at the
Registered Office of the Company.
During FY 15, there has been no major change in the nature of business
of your Company and its subsidiaries. During the year under review, two
of the step down subsidiaries have ceased to be a subsidiary of the
Company and one step down subsidiary company was incorporated.
Report on the performance and financial position of each of the
subsidiaries has been provided in Form AOC-1 and is forming part of the
Annual Report as Annexure A.
15. Auditors
Statutory Auditors and Auditors' Report
Pursuant to the provisions of Section 139 of the Act and the rules
framed there under, M/s. Walker Chandiok & Co LLP, (Firm Registration
No. 001076N), Chartered Accountants, were appointed as statutory
auditors of the Company from the conclusion of the Thirteenth Annual
General Meeting (AGM) of the Company held on September 27, 2014 to the
conclusion of the Annual General Meeting to be held for the Financial
Year 2018-19, subject to ratification of their appointment at every
AGM.
In view of the provisions of Section 139 of the Companies Act, 2013 and
Companies (Audit and Auditors) Rules, 2014, the Company has received a
letter from Walker Chandiok & Co LLP, to the effect that their
appointment, if made, would be within the limits prescribed under
Section 141 of the Companies Act, 2013 and the Rules framed there under
and that they are not disqualified for such appointment within the
meaning of the said Act.
The Board of Directors recommends to the Members to pass the resolution
ratifying the appointment of Walker Chandiok & Co LLP, as the Statutory
Auditors of the Company as 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 LLP,
Statutory Auditors on the accounts of the company for the financial
year ended 31st March, 2015 is self explanatory and requires no
comments and the Management replies to the audit observations are as
under:
Explanation to para 8 (a) of Auditor's report on Consolidated
Financials of A2Z Infra Engineering Limited, its subsidiaries, joint
ventures and associates & para 9(a) of Auditor's report on Standalone
Financials of A2Z Infra Engineering Limited
The management has performed impairment assessment of three
cogeneration power plants set up in collaboration with certain sugar
mills on Built, Own, Operate and Transfer (BOOT) basis for a period of
15 years. As at March 31, 2015, such plants have a power generation
capacity of 15 MW each. The assessment has been done on the basis of
assumptions of useful life of assets, discounted cash flows with
significant underlying assumptions, achievement of certain operating
capacity and the ability of new technology to perform on a consistent
basis.
Based on the assessment and advice from an independent legal counsel on
the availability of concession period, including renewal period, for
thirty years, and the intent of the management for exercising the
option for renewal/ extension of the concession period, the management
believes there exists reasonable certainty that arrangement shall be
extended for another term of fifteen years. Accordingly, the
management believes that the estimates of the useful lives are
reasonable and no impairment exists in the carrying value of power
generation plants.
Explanation to para 8 (b) of Auditor's report on Consolidated
Financials of A2Z Infra Engineering Limited, its subsidiaries, joint
ventures and associates & para 9(b) of Auditor's report on Standalone
Financials of A2Z Infra Engineering Limited
Contract revenue in excess of billings include unbilled receivables
amounting to Rs 1,966,500,958/- pertains to revenue recognized by the
Company during earlier years, representing amounts billable to, and
receivable from the customers towards work done on certain EPC
contracts under execution by the Company in accordance with the terms
implicit in the contract. The delay in billing of these amounts is on
account of conclusion of reconciliations with the customers, pending
joint measurement/ survey of the work done till date and
non-achievement of milestones as per the contractual terms. Management
is in discussions with the customers and expects to bill these amounts
at the earliest, and believes that whilst it may take some time to bill
and recover the amounts owing to completion of certain administrative
and contractual matters, no adjustments are required in respect of
these unbilled receivables.
Explanation to para 8 (c) of Auditor's report on Consolidated
Financials of A2Z Infra Engineering Limited, its subsidiaries, joint
ventures and associates & para 9(c) of Auditor's report on Standalone
Financials of A2Z Infra Engineering Limited
The Income tax authorities conducted a search and survey at certain
premises of the Group under section 132 and 133 of the Income Tax Act,
1961 in April 2012. During the year ended March 31, 2015, the Group
received the Assessment Orders for the assessment years 2007-08 to
2013-14 from the Deputy Commissioner of Income Tax (DCIT). The Group
has filed Appeals with Commissioner of Income Tax (CIT) (Appeals)
challenging the Orders for last five assessment years.
Based on their assessment and upon consideration of advice from the
independent legal counsel, the management believes that the Group has
reasonable chances of succeeding before the CIT Appeals and does not
foresee any material liability. Pending the final decision on the
matter, no adjustment has been made in the financial statements.
Explanation to para 8 (d) of Auditor's report on Consolidated
Financials of A2Z Infra Engineering Limited, its subsidiaries, joint
ventures and associates
Trade receivables include, in case of A2Z Infrastructure Limited, a
subsidiary company an outstanding recoverable of Rs. 76,265,817/- being
receivable from a customer for collection and transportation of
municipal solid waste. The subsidiary company has filed a writ petition
with Honorable High Court of Patna, Bihar for recovery of dues. An
interim order was passed directing the customer to release 75% of the
amount recoverable. Against the interim order the customer has filed
Letters Patent Appeal ("LPA") which has been dismissed, confirming the
interim order. Subsequently, the writ petition has been allowed by the
Court and the customer has been directed to pay the entire amount along
with the interest at the rate of 8% p.a from the due date.
Explanation to Point No. (vii)(a) & (ix) of the Annexure to the
Auditor's Report on Consolidated Financials of A2Z Infra Engineering
Limited, its subsidiaries, joint ventures and associates & Point No.
(vii)(a) & (ix) of Auditor's report on Standalone Financials of A2Z
Infra Engineering Limited
In respect of auditor's observation in Consolidated& Standalone
financial statements regarding certain default in payment of interest
and repayment of dues of banks and delay in depositing statutory dues:
It is clarified that the delay arose on account of delayed realization
of trade receivables coupled with delays in commencement of commercial
production at its biomass based power generation plants. The approved
CDR package of the Company which got implemented in March 2015 only,
envisages the due payment towards statutory dues of the Company and the
management believes that the Company shall make the payments as and
when the funds are released by the bankers.
Branch Auditors
In terms of Section 143(8) of the Companies Act, 2013 read with Rule 12
of the Companies (Audit and Auditors) Rules, 2014, the audit of the
accounts of the branch offices of the Company located outside India is
required to be conducted by the person(s) or firm(s) qualified to act
as Branch Auditors in accordance with laws of that country. The Board
of Directors seeks approval of the Members to authorize the
Audit Committee to appoint Auditors for the branch office of the
Company and also to fix their remuneration. The Board of Directors
recommends to the Members to pass the resolution, as stated in Item No.
6 of the Notice, convening the ensuing Annual General Meeting.
Secretarial Auditor
In terms of the provisions of Section 204 of the Companies Act, 2013
and Rule 9 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company had appointed M/s. DR Associates,
Practicing Company Secretaries as Secretarial Auditors to conduct
Secretarial Audit. The Secretarial Audit Report given by Mr. Suchitta
Koley, a partner of M/s DR Associates, Company Secretaries in practice,
is given as an Annexure B which forms part of this report.
Cost Auditors
Pursuant to the provisions of Section 148 of the Companies Act, 2013
read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014,
the cost records in respect of road and construction activity need to
be audited. In compliance to the above, the Board of Directors upon the
recommendation of the Audit Committee had appointed M/s H A M &
Associates, as the Cost Auditors of the Company for the Financial Year
ending March 31, 2016. In accordance with the above provisions the
remuneration payable to the cost auditor should be ratified by the
Members. Accordingly, the Board of Directors recommends to the Members
to pass the resolution, as stated in Item No. 7 of the Notice convening
the ensuing Annual General Meeting.
Since no electricity was generated/ produced till March 31, 2014 and/or
none of any other product/ service of the Company was covered in any of
the Cost Audit Order applicable for the Financial Year ended on March
31, 2014, hence no Cost Audit Report was filed for the F. Y. ended
March 31, 2014. However, the Cost Compliance Report of your Company for
the Financial Year ended 31st March, 2014, which was due for filing by
September 30, 2014, was filed on September 25, 2014 with the Ministry
of Corporate Affairs through Extensive Business Reporting Language
(XBRL) by M/s H A M & Associates, Cost Accountants.
16. Corporate Social Responsibility
The Company, in compliance with Section 135 of the Companies Act, 2013
has constituted a Corporate Social Responsibility Committee (CSR
Committee) of the Board of Directors on May 16, 2014. The CSR Committee
comprises of three Directors viz. Mr. Amit Mittal, Mr. Surender Kumar
Tuteja and Ms. Dipali Mittal as members of the committee.
The average net profits calculated as per provisions of Section 198 of
the Companies Act, 2013 for of the preceding three (3) financial years
being negative, the Company was not under any obligation to spend any
amount on CSR.
17. DIRECTORS AND KEY MANAGERIAL PERSONNEL
1. The Board based on the recommendation received from the Nomination &
Remuneration Committee at its meeting held on November 13, 2014,
pursuant to Section 161 of the Companies Act, 2013 (the 'Act') and
Articles of Association of the Company, had appointed Mr. Rajesh Jain
and Dr. Ashok Kumar Saini, as Additional Directors of the Company to
hold office up to the date of the ensuing Annual General Meeting. Your
Company has received notices from members proposing their appointment
as Directors of the Company.
2. The Board of Directors of the Company on the recommendation
received from the Nomination & Remuneration Committee in its meeting
held on November 13, 2014 has approved the following appointment(s):
(i) Re-appointment of Mr. Amit Mittal as Managing Director (KMP) of the
Company for a period of three years with effect from January 01, 2015.
(ii) Re-appointment of Ms. Dipali Mittal as Whole-time Director of the
Company for a period of three years with effect from April 01, 2015.
(iii) Appointment of Mr. Rajesh Jain as a Whole time Director of the
Company for a period of three years effective from November 13, 2014.
(iv) Appointment of Dr. Ashok Kumar Saini as a Whole time Director for
a period of three years effective from February15, 2015. The members
of the Company had approved the above said appointments of
Directors/KMPs through Postal Ballot the results of which were declared
on March 25, 2015.
3. Further the Board of Directors on the recommendation received from
the Nomination & Remuneration Committee at its meeting held on February
10, 2015, in terms of Sections 149, 152 and 161 of the Companies Act,
2013 (the 'Act') had appointed Mr. Ratan Kishore Bajaj as an Additional
Director (under the category of Independent Director) of the Company to
hold office up to the date of the ensuing Annual General Meeting.
However, due to his pre-occupation Mr. Ratan Kishore Bajaj has resigned
as Director Company w.e.f. July 06, 2015. The Board placed on record
its appreciation for the valuable services rendered by Mr. Ratan
Kishore Bajaj during his short stint with the Company.
4. In accordance with the provisions of the Companies Act, 2013 and
the Articles of Association of the Company, Ms. Dipali Mittal retires
by rotation at the ensuing AGM and being eligible offers herself for
re-appointment.
In the meeting of the Board of Directors held on May 06, 2014 and in
terms of Section 203 of the Companies Act, 2013 the following were
designated as Key Managerial Personnel's (KMP's) of your Company by the
Board:
1. Mr. Amit Mittal, Managing Director
2. Dr. Ashok Kumar Saini, Chief Executive Officer (CEO)
3. Mr. Gaurav Jain, Chief Financial Officer (CFO)
4. Mr. Atul Kumar Agarwal, Company Secretary However, in the meeting
of the Board held on August
14, 2014, Mr. Rajesh Jain was designated as Chief Executive Officer
(CEO) and a KMP of the Company in place of Dr. Ashok Kumar Saini with
an immediate effect.
Declaration by an Independent Director(s)
The terms and conditions of appointment of independent directors are as
per Schedule IV of the Companies Act, 2013. They have submitted a
declaration that each of them meets the criteria of independence as
provided in Section 149(6) of the Companies Act, 2013 and there has
been no change in the circumstances which may affect their statuses
independent director during the year.
Annual evaluation of Board Performance and Performance of its
committees and Individual Directors
The board of directors has carried out an annual evaluation of its own
performance, Board committees and individual directors pursuant to the
provisions of the Act and the corporate governance requirements as
prescribed by Securities and Exchange Board of India ("SEBI") under
Clause 49 of the Listing Agreements ("Clause 49").
The performance of the Board was evaluated by the members of the board
on the basis of the criteria such as the Board composition and
structure, effectiveness of board processes, information and
functioning, Board culture and dynamics, quality of relationship
between the Board and the Management and efficacy of communication with
external stakeholders etc. Feedback was also taken from every director
on his assessment of the performance of each of the other Directors.
The performance of the committees was evaluated by the board after
seeking inputs from the committee members on the basis of the criteria
such as the composition of committees, effectiveness of committee
meetings, etc.
The Board and the Nomination & Remuneration Committee ("NRC") reviewed
the performance of the individual directors on the basis of the
criteria such as the contribution of the individual director to the
Board and committee meetings like preparedness on the issues to be
discussed, meaningful and constructive contribution and inputs in
meetings, etc. In addition, the Chairman was also evaluated on the key
aspects of his role.
In a separate meeting of independent Directors, performance of
non-independent directors, performance of the board as a whole and
performance of the Chairman was evaluated, taking into account the
views of executive directors and non- executive directors. The same was
discussed in the board meeting that followed the meeting of the
independent Directors, at which the performance of the Board, its
committees and individual directors was also discussed.
18. Number of meetings of the Board of Directors
During the year Eight Board Meetings and one independent directors'
meeting were held, the details of which are given in Corporate
Governance Report. The provisions of Companies Act, 2013 and Listing
Agreement were adhered to while considering the time gap between two
consecutive meetings.
19. Disclosures Related to Committees and Policies
a. Audit Committee
The composition of the Audit Committee is in conformity with the
provisions of Section 177 of the Companies Act, 2013 and Clause 49 of
the Listing Agreement. The Audit Committee comprises of:
1. Mr. Surender Kumar Tuteja, Chairman
2. Dr. Ashok Kumar, Member
3. Mr. Suresh Prasad Yadav, Member
4. Ms. Dipali Mittal, Member
During the year under review, the Board of Directors of the Company had
accepted all the recommendations of the Committee.
b. Nomination & Remuneration Committee
The Nomination & Remuneration Committee of Directors was reconstituted
by the Board of Directors of the Company in accordance with the
requirements of Section 178 of the Companies Act, 2013 & the Listing
Agreement. The Nomination & Remuneration Committee comprises of the
following directors:
1. Mr. Suresh Prasad Yadav, Chairman
2. Mr. Surender Kumar Tuteja, Member
3. Dr. Ashok Kumar, Member
c. Stakeholders Relationship Committee
Pursuant to Section 178 of the Companies Act, 2013, the Board of
Directors of the Company has constituted the Stakeholders Relationship
Committee, comprising of the following Directors:
1. Dr. Ashok Kumar, Chairman
2. Mr. Suresh Prasad Yadav, Member
3. Ms. Dipali Mittal, Member
20. Remuneration Policy for the Directors, Key Managerial Personnel
and other employees
In terms of the provisions of Section 178(3) of the Act and Clause
49(IV)(B)(1) of the Listing Agreement, the Nomination & Remuneration
Committee is responsible for formulating the criteria for determining
qualification, positive attributes and independence of a Director. The
Nomination & Remuneration Committee is also responsible for
recommending to the Board a policy relating to the remuneration of the
Directors, Key Managerial Personnel and other employees. In line with
this requirement, the Board has, on the recommendation of the
Nomination & Remuneration Committee has framed a policy for selection
and appointment of Directors, KMP and Senior Management and their
remuneration.
The Remuneration Policy of the Company is attached here with and marked
as Annexure C.
21. Vigil Mechanism / Whistle Blower Policy
The Board has, pursuant to the provisions of Section 177(9) of the
Companies Act, 2013 read with Rule 7 of the Companies (Meetings of
Board and its Powers) Rules, 2014 and Clause 49 of the Listing
agreement, framed "Vigil (Whistle Blower) Mechanism" ("the Policy")' to
deal with instances of fraud and mismanagement, if any. The Whistle
Blower Policy has been approved by the Board at its meeting held on
August 14, 2014 and has been placed on the website of the Company and
may be accessed at a link http:// a2zgroup.co.in/pdf/Whistle_Blowe_13_
Apr_2015.pdf.
This vigil mechanism of the Company is over seen by the Audit Committee
and provides adequate safeguard against victimization of employees and
directors who avail of the vigil mechanism and also provide direct
access to the Chairperson of the Audit Committee in exceptional
circumstances.
22. Particulars of Loans, Guarantees or Investments under Section 186
Particulars of loans, guarantees, investments covered under section 186
of the Companies Act, 2013 form part of the notes to the Financial
Statements provided in this Annual Report. All the loans, guarantees
and investments made are in compliance with the provisions of the
Companies Act, 2013.
23. Related party transactions
Related party transactions that were entered into during the financial
year were in the ordinary course of business and on an arm's length
basis.
The particulars of the contract or arrangements with related parties
during the financial year 2014-15 are disclosed in Form No. AOC -2
which forms part of the Annual Report as an Annexure D. Except as
stated in the disclosure, there were no materially significant related
party transactions made by the Company with its Promoters, Directors,
Key Managerial Personnel or other designated persons which may have a
potential conflict with the interest of the Company at large.
The Policy on materiality of related party transactions as also dealing
with related party transactions as approved by the Board may be
accessed on the Company's website at the link:
http://a2zgroup.co.in/pdf/Related_Party_ Policy_13_Apr_2015.pdf.
All Related Party Transactions which were in the ordinary course of
business and on arm's length basis were placed before the Audit
Committee for their approval. Prior omnibus approval of the Audit
Committee is obtained on a quarterly basis for the transactions which
are of a foreseen and repetitive nature. The transactions entered into
pursuant to the omnibus approval so granted are audited and a statement
giving details of all related party transactions is placed before the
Audit Committee and the Board of Directors for their approval on a
quarterly basis.
24. Employee Stock Option Plan
The ESOP Committee of the Board of Directors of the Company, inter
alia, administers and monitors the A2Z Stock Option Plan 2010 (ESOP
2010), A2Z Employees Stock Option Plan 2013 (ESOP 2013) and A2Z
Employees Stock Option Plan 2014 (ESOP 2014) of the Company in
accordance with the applicable SEBI Guidelines. However no ESOP has
been granted pursuant to the A2Z Employees Stock Option Plan 2014
during the F/Y ending on 31st March, 2015.
The applicable disclosures as stipulated under the SEBI
Guidelines as on 31st March 2015 with regard to the ESOP 2010 and ESOP
2013 are provided in Annexure E to this Report.
The Company has received certificates from the Statutory Auditors of
the Company that the Schemes have been implemented in accordance with
the SEBI Guidelines and the resolution passed by the members. The said
certificates would be placed at the ensuing Annual General Meeting for
inspection by members.
25. Compliance to Clause 5A of Listing Agreement (Details of Shares
held in Suspense Account)
At the time of the public issue 1,035 Equity Shares were transferred to
suspense account as were unclaimed. At the end of last year i.e. as on
31st March, 2014, 105 shares were lying in the suspense account. During
the year no share has been transferred from suspense account to
shareholders. Detail of Shares in Suspense Account is as follows:
Particulars No. of No. of
Shareholders Shares
Aggregate No. of Shareholders and 01 105
outstanding shares in suspense
account lying at the beginning of
the year - 01.04.2014
Number of Shareholders who Nil Nil
approached to issuer/ registrar
for transfer of shares from
suspense account during the
yearÂ01.04.2014 - 31.03.2015
Number of Shareholders to whom Nil Nil
shares were transferred from
suspense account during the
year -01.04.2014-31.03.2015
Aggregate No. of Shareholders and 01 105*
outstanding shares in the suspense
account lying at the end of the
year-01.04.2014-31.03.2015
*The voting rights on these shares shall remain frozen till the
rightful owner of such shares claims the shares.
26. Extract of Annual Return
Pursuant to the provisions of Section 134(3)(a) of the Companies Act,
2013, Extract of the Annual Return for the financial year ended 31st
March 2015 made under the provisions of Section 92(3) of the Act is
attached as Annexure F which forms part of this Report.
27. 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
there under, your Company has constituted Internal Complaints Committee
which is responsible for redressal of complaints related to sexual
harassment. During the year under review, there were no complaints
pertaining to sexual harassment.
28. Particulars of Employees and Related Disclosures
The information required pursuant to Section 197 read with Rule 5 of
The Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 in respect of employees of the Company, forms part of this
report as 'Annexure G'. However, as permitted in terms of Section 136
of the Act, this Annual Report is being sent to all the members and
others entitled thereto, excluding the said annexure. Members who are
interested in obtaining these particulars may write to the Company
Secretary at the Registered Office of the Company. The aforesaid
annexure is also available for inspection by members at the Registered
Office of the Company, 21 days before the 14th Annual General Meeting
and up to the date of Annual General Meeting during business hours on
working days.
29. Conservation of Energy, Technology absorption, Foreign Exchange
Earnings and Outgo Pursuant to provisions of Section 134 of the
Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts)
Rules, 2014 the details of Conservation of Energy, Technology
Absorption, Foreign Exchange Earnings and Outgo are attached as
Annexure H which forms part of this report.
30. Disclosure requirements
a. As per Clause 49 of the listing agreements entered into with the
stock exchanges, Corporate Governance Report with Secretarial Auditors'
certificate thereon and Management Discussion and Analysis are
attached, which form part of this report.
b. Details of the familiarization programme of the independent
directors are available on the website of the Company (URL:
www.a2zgroup.co.in).
c. Policy for determining material subsidiaries of the Company is
available on the website of the Company (URL: www.a2zgroup.co.in).
The Company has formulated a Whistle Blower Policy to provide Vigil
Mechanism for employees including directors of the Company to report
genuine concerns. The provisions of this policy are in line with the
provisions of the Section 177(9) of the Act and the revised Clause 49
of the Listing Agreements with stock exchanges.
31. Listing
The Equity Shares of the Company continue to remain listed on BSE
Limited and National Stock Exchange of India Limited. The stipulated
listing fees for FY 2015-16 have been paid to the Stock Exchanges.
32. Risk management policy
Risk management forms an integral part of the business planning and
review cycle. The Company's Risk Management Policy is designed to
provide reasonable assurance that objectives are met by integrating
management control into the daily operations, by ensuring compliance
with legal requirements and by safeguarding the integrity of the
Company's financial reporting and its related disclosures.
Therefore, in accordance with clause 49 of the listing agreement the
Board members were informed about risk assessment and minimization
procedures after which the Board formally adopted steps for framing,
implementing and monitoring the risk management policy for the company
in their meeting held on November 13, 2014.
The main objective of this policy is to ensure sustainable business
growth with stability and to promote a pro-active approach in
reporting, evaluating and resolving risks associated with the business.
In order to achieve the key objective, the policy establishes a
structured and disciplined approach to Risk Management, in order to
guide decisions on risk related issues.
In today's challenging and competitive environment, strategies for
mitigating inherent risks in accomplishing the growth plans of the
Company are imperative. The common risks inter alia are: Competition,
Business risk, Technology obsolescence, Investments, retention of
talent and expansion of facilities. Business risk, inter-alia, further
includes financial risk, political risk, fidelity risk, legal risk.
As a matter of policy, these risks are assessed and steps as
appropriate are taken to mitigate the same.
33. Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, the board of
directors, to the best of their knowledge and ability, confirm that:
a. In the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
b. The directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at March 31, 2015 and of the profit and loss of the
company for that period;
c. The directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
d. The directors have prepared the annual accounts on a going concern
basis.
e. The directors, have laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively; and
f. The directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
34. General
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions/instances
on these 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 is in receipt of commission from the Company and
Neither the Managing Director nor the Whole-time Directors of the
Company received any remuneration or commission from any of its
subsidiaries Companies.
4. There was no instance of reporting of fraud to the Audit Committee
and of Directors.
35. Acknowledgements
Your Directors wish to place on record the support, assistance and
guidance provided by the financial institutions, banks, customers,
suppliers and other business associates. We would like to thank our
Company's employees for their tireless efforts and high degree of
commitment and dedication. Your Directors especially appreciate the
continued understanding and confidence of the Members.
For and on behalf of Board of Directors
Sd/-
(Surender Kumar Tuteja)
Chairman
DIN-00594076
Date: August 14, 2015
Place: Gurgaon
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting the Thirteenth Annual Report
on the business and operations of the Company, together with the
Standalone and Consolidated financials for the financial year ended on
31st March, 2014.
1. FINANCIAL RESULTS:
The highlights of financial results on Standalone and Consolidated
basis for the financial year ended on 31st March, 2014 are as follows:
(Rs. in Million)
Standalone
Particulars 2013-14 2012-13
Revenue from Operations 3,362.88 5,549.58
Add: Other Income 73.63 101.10
Total Income 3,436.51 5,650.68
(Loss)/Profit before Interest,
Tax & Depreciation (1,109.96) (186.54)
Less: Interest 822.19 702.44
Profit before Tax & Depreciation (1,932.15) (888.98)
Less: Depreciation/ Amortization 71.21 71.81
(Loss)/Profit before Tax &
Extra Ordinary Items (2,003.36) (960.79)
Less: Tax Expenses 16.98 (321.03)
Net Profit/(Loss) after Tax but
before Extraordinary item (2,020.34) (639.76)
Less: Previous Period Item - -
Add : Exceptional Item - Gain 70.71 101.66
Net Profit/(Loss) after Tax & before
Minority Interest (1,949.63) (538.10)
Less: Share in Minority Interest - -
Net Profit/(Loss) after Tax &
Minority Interest (1,949.63) (538.10)
Balance brought forward from previous year 2,525.45 3,063.55
Less: Adjustment on account of further
acquisition in subsidiaries - -
Less: Share in Minority Interest on
dilution of holding - -
Net Profit available for appropriation 575.82 2,525.45
(Rs. in Million)
Consolidated
Particulars 2013-14 2012-13
Revenue from Operations 6,987.53 9,028.15
Add: Other Income 171.55 365.55
Total Income 7,159.08 9,393.71
(Loss)/Profit before Interest,
Tax & Depreciation (946.32) (53.02)
Less: Interest 1,213.85 1,073.26
Profit before Tax & Depreciation (2,160.17) (1,126.28)
Less: Depreciation/ Amortization 323.95 394.03
(Loss)/Profit before Tax &
Extra Ordinary Items (2,484.12) (1,520.31)
Less: Tax Expenses 54.09 (311.42)
Net Profit/(Loss) after Tax but
before Extraordinary item (2,538.21) (1,208.89)
Less: Previous Period Item - -
Add : Exceptional Item - Gain 70.72 147.66
Net Profit/(Loss) after Tax & before
Minority Interest (2,467.49) (1,061.23)
Less: Share in Minority Interest 3.05 (2.54)
Net Profit/(Loss) after Tax &
Minority Interest (2,470.54) (1,058.69)
Balance brought forward from previous year 1,529.53 2,566.35
Less: Adjustment on account of further
acquisition in subsidiaries - (21.86)
Less: Share in Minority Interest on
dilution of holding - -
Net Profit available for appropriation (941.01) 1,529.53
Operations Review
Standalone:
* During the year under review, the Company has achieved total income
of Rs. 3,436.51 Million as against Rs. 5,650.68 Million in the previous
year. The Company has made net loss after tax of Rs. 1,949.63 Million
as against a loss of Rs. 538.10 Million in the previous year.
* The Net Worth of the Company has decreased to Rs. 9096.47 Million as
at the end of the current year from Rs. 11,046.10 Million as at the end
of the previous year.
* The Debt Equity ratio of the Company has gone up to 0.96 as at the
end of the current year as compared to 0.64 as at the end of the
previous year.
Consolidated:
* The Consolidated total income of the Company for the current
financial year is Rs. 7,159.08 Million as against Rs. 9,393.71 Million
in the previous year. The Company on consolidated basis has made a net
Loss after minority interest and extra ordinary items of Rs. 2470.54
Million as against Rs. 1058.69 Million in the previous year.
* The consolidated Net Worth of the Company has come down to Rs.
7,586.90 Million as at the end of the current year from Rs. 10,045.06
Million as at the end of previous year.
* The consolidated Debt Equity ratio of the Company has gone up to 1.86
as at the end of the current year compared to1.22 as at the end of
previous year.
2. DIVIDEND
In view of losses incurred during the year under review, the Board of
Directors of the Company has not recommended any dividend to the
shareholders for this financial year.
3. NATURE OF OPERATIONS
Your Company is primarily engaged in providing EPC services in power
transmission and distribution sectors with focus mainly on
distribution. The Company has also moved into the generation of power
from renewable energy sources like biomass (Renewable Energy
Generation) and Municipal Solid Waste Management (MSW). The Company is
amongst very few companies that are qualified to provide EPC services
in the transmission and distribution sector to Power Grid Corporation
of India Limited (PGCIL). The Company also provides services to other
verticals such as Telecommunications Services and operation &
maintenance for wire lines and erection of optical fiber cable network
for telecom companies.
The Company has two business verticals:
EPC Division: The Company undertakes the EPC contracting business
through this division, more particularly in erection and laying of
distribution and transmission lines and erection of sub-stations for
power distribution companies. It provides integrated design, testing,
installation, construction and commissioning services on a turn-key
basis. Its activities include erection, laying and maintenance of
electric transmission lines, renovation and segregation of feeders,
setting up of substations and other allied services. Its EPC services
include the installation of distribution line infrastructure up to 33
KV, construction of substations etc. In the transmission line, its
services include Extra High Tension (EHT) substations and transmission
lines.
Power Plants Division: The Company has also forayed in the renewable
energy generation business through this division by setting up biomass
based three power plants in Punjab in collaboration with sugar mills on
Built Own Operate and transfer (BOOT) basis.
The Company''s operations are geographically spread across India and
conducted either directly through the Company or its direct and
indirect subsidiaries. Through its subsidiary companies, the Company
provides municipal solid waste (MSW) management services which involve
collection & transportation (C&T) of waste and its scientific
processing and disposal (P&D) like recycling, manufacturing of organic
compost and green fuel such as Refused Derived Fuel (RDF) & subsequent
disposal of remnants, facility management (FMS) & environmental
services and developing information technology (IT) solutions for power
utilities (Power IT Solutions). The Company along with its subsidiaries
has a mission of creating a cleaner climate and environment.
4. UPDATES ON CORPORATE DEBT RESTRUCTURING (CDR):
During the year under review, the Company had taken a decision to
undertake a debt restructuring exercise under the CDR mechanism that is
governed by the Corporate Debt Restructuring Scheme issued by Reserve
Bank of India vide Circular No RBI/2008-09/143, DBOD.No.BP.BC.No.37/
21.04.132/ 2008-09 and the Corporate Debt Restructuring Guidelines
formulated thereunder in consultation with State Bank of Patiala (SBOP)
the lead bank of the Consortium Banks. The Corporate Debt Restructuring
Proposal ("CDR Proposal") was recommended by State Bank of Patiala, the
lead lender and after approval by majority of the secured lenders
(hereinafter referred to as the "CDR Lenders") the final Corporate Debt
Restructuring Package ("CDR Package") has been approved by CDR
Empowered Group ("CDR EG") on December 24, 2013 and the same has been
communicated to the CDR Lenders by CDR Cell vide its Letter of Approval
dated December 28, 2013 further amended by letter dated February 03,
2014 (hereinafter collectively referred to as "CDR LOA"). The Master
Restructuring Agreement ("MRA") between the Company and the CDR Lenders
has been executed on March 27, 2014, by virtue of which the
restructured facilities are governed by the provisions specified in the
MRA having cut off date of January 1, 2013.
The total Restructured Facilities under the CDR Package amounts to Rs.
1727.46 Crores which includes Restructured Term Loan and Working
Capital Facilities and the moratorium for repayment of Term Loan, and
Working Capital Facilities and Interest thereof for the initial period
of 2 years from Cut- off Date.
In terms of the CDR Scheme, the Promoter/Promoter Group were required
to bring in equity to the extent of Rs. 34.54 Crores i.e. 2%
restructured debts of Rs. 1,727.46 crore upfront into the Company in
stipulated time frame, which has already been infused.
The key features of the CDR Proposal are given in detail under Notes to
Financial Statements forming part of this Annual Report.
Furthermore the Corporate Debt Restructuring (CDR) Package as approved
by the CDR EG has been confirmed/ approved by the Shareholders of the
Company through postal ballot vide notice dated May 6, 2014, the
results of which have been declared on June 24, 2014.
5. CAPITAL STRUCTURE
After the year under review, the Authorised Share Capital of the
Company has been increased from Rs. 100,00,00,000/- (Rupees One Hundred
Crores only) divided into 10,00,00,000 (Ten Crores) equity shares of
Rs. 10/- (Rupees Ten only) each to 115,00,00,000/- (Rupees One Hundred
Fifteen Crores only) divided into 11,50,00,000 (Eleven Crore Fifty
Lacs) equity shares of 10/- (Rupees Ten only) each.
The Paid Up Share Capital of the Company is Rs.74,17,76,940/- (Rupees
Seventy Four Crores Seventeen Lacs Seventy Six Thousand Nine Hundred
Forty only) divided into 7,41,77,694 (Seven Crores Forty One Lac
Seventy Seven Thousand Six Hundred Ninety Four) fully paid-up Equity
Shares of Rs. 10 each. There is no change in the issued and paid up
share capital of the Company during the year.
6. PREFERENTIAL ISSUE:
After the year under review, in terms of the said CDR LOA the Company
had sought the approval of the shareholders by way of postal ballot
vide notice dated May 6, 2014, the results of which have been declared
on June 24, 2014, inter alia for following items Board of Directors of
the Company has been authorised to create, issue and offer the
following:
a. To issue up to 3,45,40,000 (Three Crore Forty Five Lacs Forty
Thousand) Equity Shares of Rs. 10/- each of the Company from time to
time in one or more tranches, on Preferential Basis to the
Promoter/Promoter Group in terms of Chapter VII of Securities and
Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009 ("ICDR Regulations");
b. To issue up to 14,91,40,000 (Fourteen Crore Ninety One Lacs Forty
Thousand) Equity Shares of Rs. 10/- each of the Company from time to
time in one or more tranches, on Preferential Basis to the CDR Lenders
on conversion of Funded Interest Term Loan (FITL) and Working Capital
Term Loan (WCTL) in terms of CDR Package;
c. To issue up to 8,32,40,000 (Eight Crore Thirty Two Lacs Forty
Thousand) Equity Shares of Rs. 10/- each of the Company from time to
time in one or more tranches, on Preferential Basis to the Non CDR
Lenders on conversion of Funded Interest Term Loan (FITL) and Working
Capital Term Loan (WCTL), if they wish to participate in the CDR
Package in accordance with the CDR Guidelines.
7. BOARD OF DIRECTORS
a) Composition of Board:
The Board comprises of five (5) Directors consisting three (3)
Non-Executive Independent Directors one of whom is an additional
director and two (2) Executive Directors, one of whom is a Managing
Director of the Company. Mr. Amit Mittal and Ms. Dipali Mittal continue
to be the Directors of the Company.
b) Change in Composition of Board:
During the period under review, following changes in composition of the
Board took place:
Resignations
Sr. No Name of Director Category Date of
Resignation
1. Mr. Gaurav Mathur Non- Executive 2nd May, 2013
(Nominee Director of & Non Independent
Lexington Equity
Holdings Limited)
2. Mr. Supratim Banerjee Non-Executive & 2nd May, 2013
(Alternate Director to Non Independent
Mr. Gaurav Mathur
The Board places on record their sincere appreciation towards the
valuable contribution and guidance provided by the above said directors
during their tenure as Directors of Company.
Appointments
Dr. Ashok Kumar appointed as an Additional Director of the Company
effective from 1st May, 2013, he was further re-appointed as director
of the Company in the Annual General Meeting of the Company duly held
on 28th September, 2013.
Mr. Suresh Prasad Yadav was appointed as an Additional Director of the
Company effective from 3rd February, 2014 in accordance with the
provisions of Section 260 of the erstwhile Companies Act, 1956 read
with Article 44 of the Articles of Association of the Company. Mr.
Suresh Prasad Yadav shall hold office up to the date of the ensuing
Annual General Meeting.
Mr. Surender Kumar Tuteja, Dr. Ashok Kumar and Mr. Suresh Prasad
Yadav, directors of the Company, if approved, shall be appointed as
independent directors for five consecutive years from the date of the
ensuing Annual General Meeting as per provisions of Section 149, 150 &
152 and, if any, other applicable provisions of the Companies Act,
2013.
Necessary resolutions for the appointment/re- appointment of the
aforesaid directors have been included in the notice convening the
ensuing AGM and details of the proposal for appointment/re-appointment
are mentioned in the explanatory statement of the notice. Your
directors recommend their appointment/re- appointment. All the
directors of the Company have confirmed that they are not disqualified
from being appointed as directors in terms of Section 164(2) of the
Companies Act, 2013 and they have also filed their consent for such
appointment.
c) Reappointment of director(s) retire by rotation
In terms of Article 70 of the Articles of Association of the Company,
Ms. Dipali Mittal is liable to be retire by rotation at the ensuing
Annual General Meeting, and being eligible, offer herself for
re-appointment.
The brief resumes of the Directors who are to be appointed/
re-appointed, the nature of their expertise in specific functional
areas, names of companies in which they hold directorships, committee
memberships/ chairmanships, their shareholding etc., are furnished in
the Annexure-I to the notice of the ensuing Annual General Meeting.
8. DISINVESTMENTS IN SUBSIDIARIES
Disinvestments in Madhya Bijlee Private Limited, Proficient Disaster
Management & Innovative Response Education Private Limited (previously
known as A2Z Disaster Management & Innovative Response Education
Private Limited), Pioneer Waste Management Private Limited and Mirage
Bijlee Private Limited
During the year under review, pursuant to the Share Purchase Agreement
dated 23rd December, 2013, the Company had sold its entire shareholding
in Madhya Bijlee Private Limited, Proficient Disaster Management &
Innovative Response Education Private Limited and Pioneer Waste
Management Private Limited. The above said companies have ceased to be
subsidiary of the Company.
Further pursuant to the Share Purchase Agreement entered on 1st March,
2014, the Company had sold its entire shareholding in Mirage Bijlee
Private Limited hence it has ceased to be a subsidiary of the Company.
9. EMPLOYEE STOCK OPTION PLANS
During the year the Company has the following Schemes/ Plan in
operation for granting stock options to the eligible
employees/directors of the Company and its subsidiary companies, in
accordance with the Securities Exchange Board of India (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.
* A2Z Stock Option Plan 2010
* A2Z Employees Stock Option Plan 2013
A2Z Employees Stock Option Plan 2013
During the year under review, your Company pursuant to a special
resolution of the shareholders of the Company at the Annual General
Meeting held on 28th September, 2013 adopted the A2Z Employees Stock
Option Plan 2013 ("A2Z ESOP") for the grant of options. The ESOP
Compensation Committee in its meeting held on February 3, 2014 has
granted 16,95,000 stock options convertible into equivalent number of
equity shares of Rs. 10/- each to the eligible employee/ directors of
the Company and/or its Subsidiary Companies at the exercise price of
Rs. 10.35 each which is NSE closing market price on 31st January, 2014
(i.e. previous trading day of the grant date). The entire granted stock
options shall vest and will be exercisable on the first anniversary of
the grant date till completion of four (4) years since then.
Further the ESOP Compensation Committee in its meeting held on July 03,
2014 has granted 19,05,000 stock options convertible into equivalent
number of equity shares of Rs. 10/- each to the eligible employee/
directors of the Company and/or its Subsidiary Companies at the
exercise price of Rs. 19.95 each which is NSE closing market price on
2nd July, 2014 (i.e. previous trading day of the grant date). The
granted option shall be vested in the ratio of 30:30:40 to each of the
eligible employees employee/ directors of the Company and/ or its
Subsidiary Companies on each anniversary of the Grant Date and will be
exercisable till completion of four (4) years from the vesting date.
As required under the Securities and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999, the information pertaining to A2Z STOCK OPTION PLAN, 2010 and A2Z
EMPLOYEES STOCK OPTION PLAN 2013 as on March 31, 2014 of the Company
has been provided in an Annexure I which forms part of the Directors''
Report.
Auditor''s Certificate under clause 14.1 of SEBI (ESOP) Guidelines 1999
shall be placed at ensuing Annual General Meeting.
10. SHARES HELD IN SUSPENSE ACCOUNT
At the time of the public issue 1,035 Equity Shares were transferred to
suspense account as were unclaimed. At the end of last year i.e. as on
31st March, 2013, 105 shares were lying in the suspense account. During
the year no share has been transferred from suspense account to
shareholders. Detail of Shares in Suspense Account is as follows:
Particulars No. of No. of
Cases Shares
Aggregate No. of Shareholders and 01 105
outstanding shares in suspense
account lying at the beginning of the
year - 01.04.2013
Number of Shareholders who NIL NIL
approached to issuer/ registrar for
transfer of shares from suspense
account during the year -
01.04.2013 - 31.03.2014
Number of Shareholders to whom NIL NIL
shares were transferred from
suspense account during the year-
01.04.2013-31.03.2014
Aggregate No. of Shareholders and 01 105*
outstanding shares in the suspense
account lying at the end of the year-
01.04.2013-31.03.2014
*The voting rights on these shares shall remain frozen till the
rightful owner of such shares claims the shares.
11. SUBSIDIARY COMPANIES
As on the date of this Report, Company had 33 (Thirty Three) direct and
step down subsidiary Companies and an association of person (AOP) in
which Company is having 60% sharing in profits, a list of which is
given in the notes to financials.
As per the General Circular 08/2014 No. 1/19/2013-CL-V dated 4th April
2014 issued by the Ministry of Corporate Affairs, the financial
statements (and documents required to be attached thereto), auditors
report and board''s report in respect of financial years that commenced
earlier than 1st April 2014 shall be governed by the relevant
provisions/ schedules/rules of the Companies Act, 1956. The Ministry of
Corporate Affairs, Government of India has, vide General Circular No.
2/2011 dated 8th February, 2011 read together with General Circular No.
3/2011 dated 21st February, 2011, granted exemption under Section
212(8) of the Companies Act, 1956, for not attaching Annual Report of
subsidiary companies, subject to fulfilment of certain conditions by
the holding company. As stated in the said circulars, the Board of
Directors, vide its resolution dated 14th August, 2014 accorded its
consent for not attaching the balance sheet of the subsidiaries.
The detailed financial statements and audit reports of each of the
subsidiaries are available for inspection at the registered office of
the Company during office hours between 11 a.m. to 1 p.m.
The Annual Report of the Company contains the consolidated audited
financial statements prepared pursuant to clause 41 of the Listing
Agreement entered into with the stock exchanges and in accordance with
the mandatory accounting standards as notified by the Companies
(Accounting Standards) Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 1956.
12. INTERNAL CONTROL SYSTEMS
The Company has a proper, efficient & adequate internal control system.
It ensures that all the assets are safeguarded and protected against
loss from unauthorized use or disposition and the transactions are
authorized, recorded and reported correctly.
An effective programme of internal audit and management review
supplements the process of internal control. Properly documented
policies, guidelines and procedures are laid down for this purpose. The
internal control system has been designed so as to ensure that the
financial and other records of the Company are reliable for preparing
the financial and other statements and for maintaining accountability
of assets of the Company.
The Company has also constituted an Audit Committee comprising of 4
(Four) professionally qualified directors, who regularly interact with
the Statutory Auditors and Internal Auditors in dealing with the
matters specified within its terms of reference. The Committee mainly
deals with accounting matters, financial reporting and internal
controls.
13. AUDIT COMMITTEE RECOMMENDATION
During the year under review there was no such recommendation of the
Audit Committee which was not accepted by the Board. Hence there is no
need for disclosure of the same in this report.
14. RISK MANGEMENT SYSTEM
Risks are an integral part of any business and the risk profile, to a
great extent, depends on the climatic conditions, economic and business
conditions and the markets and customers we serve.
Your Company has adopted a comprehensive & effective system of Risk
Management. The Company has adopted a procedure for risk assessment and
its minimization. It ensures that all the risks are timely identified
and mitigated in accordance with the well-structured Risk Management
process. The Board of directors & the Audit Committee periodically
review the Risk management process.
15. LISTING
The Equity shares of the Company continue to remain listed on BSE
Limited (Previously known as Bombay Stock Exchange Limited) and
National Stock Exchange of India Limited and the stipulated listing
fees for FY 2014-15 have been paid to both the Stock Exchanges.
16. PUBLIC DEPOSITS
During the year under review the company has not accepted any deposit
from public within the meaning of section 58A of the Companies Act,
1956 and rules made there under.
17. AUDITORS AND AUDITOR''S REPORT
The auditors, M/s. Walker Chandiok & Co. LLP (Firm Registration No.
001076N) Chartered Accountants, retire at the ensuing Annual General
Meeting and have confirmed their eligibility and willingness to accept
office as Statutory Auditors, if re-appointed. The proposal for their
re- appointment is included in the notice for the ensuing Annual
General Meeting.
On recommendation of the Audit Committee the Board has recommended the
re-appointment of M/s Walker Chandiok & Co LLP, Chartered Accountants
as Statutory Auditors. M/ s Walker Chandiok & Co LLP, Chartered
Accountants, if re-appointed by members as Statutory Auditor shall hold
office from the conclusion of the Company''s this Annual General Meeting
to the conclusion of the Annual General Meeting to be held for the
Financial Year 2018-19, subject to ratification at every Annual General
Meeting of the Company.
Certificate from the said Auditors has been obtained to the effect that
their re-appointment, if made, would be within the limits specified
under section 141 of the Companies Act, 2013.
The auditor''s report presented by M/s Walker Chandiok & Co LLP,
Statutory Auditors on the accounts of the company for the financial
year ended 31st March, 2014 is self- explanatory and requires no
comments and the Management replies to the audit observations are as
under:
Explanation to para 6 of Auditor''s report on Consolidated Financials of
A2Z Maintenance & Engineering Services Limited, its subsidiaries and
joint ventures & para 6 of Auditor''s report on Standalone Financials of
A2Z Maintenance & Engineering Services Limited
The Company continues to carry deferred tax assets of Rs. 396.07
Million on items comprising unabsorbed losses and other timing
differences between the accounting and taxable income, which, in view
of the management, shall be realized on generation of taxable income in
future years.
The Group follows Accounting Standard (AS-22) "Accounting for taxes on
Income" as notified by the Companies (Accounting Standards) Rules,
2006, (as amended). The company has entered into agreements with its
customers for providing engineering services and based on developments
in certain new projects, the Company will have certain revenue and
sufficient taxable profits against which the deferred tax asset shall
be adjusted. Due to accumulated losses, some subsidiaries have
recognised deferred tax assets to the extent there is virtual certainty
supported by convincing evidence of realization of such deferred tax
assets in the near future.
Explanation to para 8 (a) of Auditor''s report on Consolidated
Financials of A2Z Maintenance & Engineering Services Limited, its
subsidiaries and joint ventures & para 8 of Auditor''s report on
Standalone Financials of A2Z Maintenance & Engineering Services Limited
The Company has incurred a net loss of Rs. 1,949.63 Million for the
year ended 31st March, 2014 and is currently facing liquidity problems
on account of delayed realisation of trade receivables coupled with
delays in commencement of commercial production at its biomass based
power generation plants. Management is evaluating various options and
in addition to consolidation of business by focusing on core operations
and disposing off the noncore assets, had also made reference to
Corporate Debt Restructuring Cell (''CDR Cell'') for restructuring of its
existing debt obligations, including interest and other related terms
and conditions (hereinafter referred to as the ''CDR scheme'').
Management believes that the approved CDR scheme of the Company and the
aspects like inviting strategic investors, disposal of non-core assets
would also bring in the additional cash flows into the system, and
hence no adjustments are required in the financial statements and
accordingly, these have been prepared on a going concern basis.
The Corporate debt restructuring (CDR) proposal to re- structure
existing debt obligations, including interest, additional funding and
other terms (hereafter referred to as "the CDR Scheme") of the Company,
having January 01, 2013 as the "cut-off date", was approved by the CDR
Cell vide its Letter of Approval (LOA) dated December 28, 2013 as
further modified dated February 03, 2014. Out of seventeen lenders,
twelve lenders (herein after termed as ''CDR lenders'') agreed to be part
of the CDR scheme.
One of the non CDR lenders filed a civil suit in the Hon''ble High Court
of Delhi on the Company against creation of second charge on power
plants under the CDR scheme inter alia other matters. The Hon''ble High
Court vide its Order dated March 20, 2014 has permitted the signing of
Master Restructuring Agreement (MRA) keeping the hearing in the suit
adjourned to August 21, 2014. Upon execution of the Master
Restructuring Agreement (MRA) with ten CDR lenders Company started the
process of fulfilling the other conditions precedent. Pursuant to the
CDR Scheme, inter alia other conditions, the promoters were required to
bring in Promoter contribution, which has already been infused. On the
basis of MRA executed with the CDR lenders, the Company has accounted
for impact of the CDR scheme (reclassifications and interest
calculations) in the financial results for the year ended March 31,
2014 up to the extent agreed with those CDR lenders. From the "cut- off
date" the interest on the restructured debts has been recomputed and
provided at the effective interest rates as per the CDR Scheme.
Interest reversal of Rs. 18.44 Million pertaining to period from
cut-off dates to March 31, 2013 has been shown as an exceptional item
during the year. Reclassification and other adjustments as recorded
above are subject to reconciliation with the lender banks. Management
is confident that all the conditions precedents are in the process of
being complied with and are at advance stage.
Explanation to para 8 (b) of Auditor''s report on Consolidated
Financials of A2Z Maintenance & Engineering Services Limited, its
subsidiaries and joint ventures One of the subsidiary company, A2Z
Infrastructure Limited, has outstanding recoverable of Rs. 76.27
Million being receivable from a customer for collection and
transportation of municipal solid waste.
The subsidiary company has filed a writ petition with High Court of
Patna for recovery of dues. An interim order was passed directing the
customer to release 75% of the amount recoverable. Against the interim
order, the customer has filed Letters Patent Appeal (''LPA'') which has
been dismissed, confirming the interim order. Subsequently, the writ
petition has been allowed by the Court and customer has been directed
to pay the entire amount along with the interest at the rate of 8% p.a.
from the due date.
Explanation to Point No. (ix)(a) & (xi) of the Annexure to the
Auditor''s Report on Standalone Financials of A2Z Maintenance &
Engineering Services Limited
In respect of auditor''s observation in standalone financial statements
regarding certain default in payment of interest and repayment of dues
of banks and delay in depositing statutory dues:
It is clarified that the delay arose on account of delayed realisation
of trade receivables coupled with delays in commencement of commercial
production at its biomass based power generation plants.
Explanation to point No. (xxi) of the Annexure to the Auditor''s Report
on Standalone Financials of A2Z Maintenance & Engineering Services
Limited
During the year, the Company has incurred a loss of Rs. 63.04 Million
due to theft of material at various project sites against which the
Company has filed an insurance claim with the insurance company and has
received an amount of Rs. 12.97 Million as insurance claim from the
insurance company. We have taken adequate safeguards to prevent theft
of materials in future.
Branch Audit:
Pursuant to Section 143(8) and other applicable provisions, if any, of
the Companies Act, 2013 and subject to the approval in the General
Meeting, the accounts of a branch can be audited otherwise than by the
Company''s auditors and the Board of Directors, in consultation with the
Company''s auditors, can appoint such branch auditors.
Accordingly the approval of the shareholders is sought to authorise the
Board of Directors of your Company to appoint in consultation with the
Statutory Auditors of the Company any person other than the Statutory
Auditors, the Auditors for any branch office of your Company, which is
already opened or is to be opened outside India.
Further the accounts of the branches have been consolidated in the
Company''s financials.
18. COST AUDITOR:
The Company had appointed M/s. Harendra Singh & Company, Cost
Accountants, as the Cost Auditors to carry out the audit of the cost
accounts of the Company for the financial year ended on 31st March,
2014. The report of the Cost Auditor will be filed with MCA within the
prescribed period.
Further on the recommendation of the Audit Committee the Board of
Directors of the Company has appointed M/s. H A M & Associates
(formerly M/s. Harendra Singh & Company), Cost Accountants as Cost
Auditors of the Company to conduct audit of cost records for the
financial year 2014-15.
19. PARTICULARS OF EMPLOYEES
The information required under the provisions of Section 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975, as amended, is attached as Annexure II to Director''s
Report.
20. CORPORATE GOVERNANCE REPORT
Your Company believes that Corporate Governance is the basis of
stakeholder''s satisfaction. The Company is regularly complying with the
regulatory norms of Corporate Governance as stipulated under clause 49
of the listing agreement. A detailed report on compliance of corporate
governance along with Management Discussion & Analysis forms part of
the Annual Report.
The requisite Certificate from the Practicing Company Secretary Mr.
Deepak Gupta, a partner of M/s DR Associates, Company Secretaries
regarding Compliance with the conditions of Corporate Governance as
stipulated in Clause 49 is annexed as Annexure III to Report on
Corporate Governance.
Certificate of the CEO/CFO, inter alia, confirming the correctness of
the financial statements, compliance with Company''s Code of Conduct,
adequacy of the Internal Control measures and reporting of matters to
the Audit Committee in terms of Clause 49 of the Listing Agreement with
the Stock Exchanges, is attached in the Corporate Governance Report and
forms part of this Report.
21. DIRECTOR''S RESPONSIBILITY STATEMENTS:
In accordance with the provisions of Section 217(2AA) of the Companies
Act, 1956, your directors state that:
1. In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures.
2. Accounting policies selected were applied consistently. Reasonable
and prudent judgments and estimates are made so as to give a true and
fair view of the state of affairs of the Company as on 31st March, 2014
and of the profits or loss of the Company for the year ended on that
date.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
4. The annual accounts of the company have been prepared on a going
concern basis.
22. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Particulars required to be furnished pursuant to section 217(1)(e) of
the Companies act, 1956 read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988:
i. Part A and B of the Rules pertaining to conservation of energy and
technology absorption are not applicable to the Company.
23. ACKNOWLEDGEMENT
Your Directors would like to express their gratitude and appreciation
for the co-operation and support extended by the Bankers, Vendors,
Investors, Business Associates and various Government
Agencies/Authorities during the year under review. Your Directors also
wish to place on record their deep sense of appreciation for the
committed services and untiring efforts of the executives, staff and
workers of the Company at all the levels.
For and on behalf of Board of Directors
Sd/-
(Surender Kumar Tuteja)
Date : August 14, 2014 DIN-00594076
Place: Gurgaon Chairman
Mar 31, 2013
To, The Members,
The Directors have pleasure in presenting the twelfth Annual Report on
the business and operations of the Company, together with the
Standalone and Consolidated fnancials for the fnancial year ended on
31st March, 2013.
1. FINANCIAL RESULTS :
The Operating and fnancial results on Standalone and Consolidated basis
for the fnancial year ended on 31st March, 2013 are as follows:
(Rs.in Million)
Standalone Consolidated
2012-13 2011-12 2012-13 2011-12
Particulars Current
Year Previous
Year Current
Year Previous
Year
Revenue from
Operations 5,549.58 9,682.31 9,028.15 13,522.98
Add: Other Income 101.10 83.55 365.55 105.12
Total Income 5,650.68 9,765.86 9,393.71 13,628.09
(Loss)/Proft
before Interest,
Tax & Depreciation (186.54) 955.09 (53.02) 889.81
Less: Interest 702.44 559.75 1,073.26 745.34
Proft before Tax
& Depreciation (888.98) 395.34 (1126.28) 144.47
Less: Depreciation/
Amortization 71.81 69.90 394.03 192.79
(Loss)/Proft before
Tax & Extra
Ordinary Items (960.79) 325.43 (1520.31) (48.32)
Less : Tax Expenses (321.03) 128.09 (311.42) 130.62
Net Proft/(Loss)
after Tax but
before Extraordinary
item (639.76) 197.34 (1208.89) (178.94)
Less: Previous
Period Item (2.05)
Less :
Extraordinary Item 101.66 147.66
Net Proft/(Loss)
after Tax & before
Minority (538.10) 197.34 (1061.23) (176.89)
Interest
Less: Share in
Minority
Interest (2.54) 2.58
Net Proft/(Loss)
after Tax &
Minority
Interest (538.10) 197.34 (1058.69) (179.47)
Balance
brought
forward
from previous year 3,063.55 2,866.21 2,566.35 2,746.89
Less: Adjustment
on account of
further acquisition (21.86) 0.97
in subsidiaries
Less: Share in
Minority Interest
on dilution of
holding 0.09
Net Proft
available for
appropriation 2525.45 3063.55 1529.53 2566.35
Operations Review Standalone:
- During the year under review, the Company has achieved total income
of Rs. 5,650.68Million as against Rs. 9,765.86 Million in the previous
year. The Company has made net loss after tax of Rs. 538.10 Million as
against a proft of Rs. 197.34 Million in the previous year.
- The Net Worth of the Company has decreased to Rs. 11,046.10 Million
as at the end of the current year from Rs. 11,584.20 Million as at the
end of the previous year.
- The Debt Equity ratio of the Company has gone up to 0.64 as at the
end of the current year as compared to 0.54 as at the end of the
previous year.
Consolidated:
- The Consolidated total income of the Company for the current fnancial
year is Rs. 9,393.71Million as against Rs. 13,628.09Million in the
previous year. The Company on consolidated basis has made a net Loss
after minority interest and extra ordinary items of Rs. 1058.69 Million
as against Rs. 179.47 Million in the previous year.
- The consolidated Net Worth of the Company has come down to
Rs.10045.06 Million as at the end of the current year from Rs. 11086.99
Million as at the end of previous year.
- The consolidated Debt Equity ratio of the Company has gone up to 1.22
as at the end of the current year compared to1.02 as at the end of
previous year.
2. DIVIDEND
In view of losses incurred during the yearunder review, the Board of
Directors of the Company has not recommended any dividend to the
shareholders for this fnancial year.
3. NATURE OF OPERATIONS
Your Company is Engineering, Procurement and Construction (EPC) Company
and expanding into being an Infrastructure Company that is building
businesses with annuity revenue streams in the areas of Clean and Green
energy like Renewable Energy Generation etc.
The CompanyÂs operations are geographically spread across India and
conducted either directly through the Company or its direct and
indirect subsidiaries.
In the EPC business, our main area of operation is the Power
Distribution segment, though we also provide services in the Power
Transmission segment, to Power Generation companies and to other
verticals such as Telecommunications Services and operation &
maintenance for wire lines. In the Power Distribution segment, we are
helping build power lines to bring power to areas which lack
electricity. We are also helping to reduce the Technical and Commercial
losses. Your Company has successfully executed challenging projects in
diffcult terrains and in extreme weather conditions in the states of
Jammu and Kashmir, Arunachal Pradesh, Himachal Pradesh, Jharkhand,
Rajasthan, Orissa, Kerala and Bihar.
Additionally, we are now building businesses that include the
following: (i) generating power from renewable energy sources such as
biomass and fuel derived from municipal solid waste (Renewable Energy
Generation); (ii) providing municipal solid waste (MSW) management
services which involve collection& transportation (C&T) of waste and
its scientifc processing and disposal (P&D) like recycling,
manufacturing of organic compost and green fuel such as Refused Derived
Fuel (RDF) & subsequent disposal of remnants; and (iii) developing
information technology (IT) solutions for power utilities (Power IT
Solutions).
Through its subsidiary companies, creating a cleaner climate is a
mission of A2Z.In India, so far, the municipal solid waste management
projects are being done ona piece-meal basis wherein C&T is done
separately by different agencies and P&D is managed by the government
through outsourcing model. Being one of the leading Indian Waste
Management companies, your companyis proud of setting up the biggest,
single location Integrated Resource Recovery Facility (IRRF) in Asia as
well as setting up one of the frst IRRF with ESCO focus. Your Company
has pioneered the concept of IRRF right from collection and
transportation to processing and disposal by utilizing all items that
have not remained useful in their present form any longer and renewable
energy generation thereafter.
Through multiyear contracts, the MSW and Renewable Energy Generation
businesses should provide stable revenue streams in the years to come.
4. CAPITAL STRUCTURE
The paid up Share Capital of the company is Rs. 741.78 Million
(approximately) divided into 7,41,77,694 fully paid-up Equity Shares of
Rs. 10 each. There is no change in the authorised, issued and paid up
share capital of the Company during the year.
5. BOARD OF DIRECTORS
a) Composition of Board:
The Board comprises of four (4) Directors consisting two (2)
Non-Executive Independent Directors and two (2) Executive Directors,
one of whom is a Managing Director of the Company. Mr.Surender Kumar
Tuteja, Mr.Amit Mittal and Ms.Dipali Mittal continue to be the
Directors of the Company.
b) Change in Composition of Board:
During the period under review, following Directors have resigned from
the directorship of the Company:
Sr. No Name of Director Category Date of Resignation
1. Mr. Arjun Balan Non-Executive & Non Independent 24th September,
2012 (Alternate Director to Mr. Brij Raj Singh)
2. Mr. Rakesh Radheyshyam Jhunjhunwala Non-Executive & Non Independent
15th October, 2012
3. Mr. Brij Raj Singh Non-Executive & Non Independent 27th February,
2013 (Nominee Director of Beacon India
Investors Limited)
4. Mr. Manish Gupta Non-Executive & Non Independent 13th March, 2013
(Nominee Director of Mr. Rakesh
Radheyshyam Jhunjhunwala)
5. Mr. Rajeev Thakore Independent Director 13th March, 2013
6. Mr.Vinod Sagar Wahi Independent Director 19th March, 2013
7. Mr.Gaurav Mathur Non-Executive & Non Independent 2nd May, 2013
(Nominee Director of Lexington Equity
Holdings Limited)
8. Mr.Supratim Banerjee Non-Executive & Non Independent 2nd May, 2013
(Alternate Director to Mr. Gaurav Mathur)
The Board places on record its gratitude for the services rendered by
the above said directors during their tenure as members of the Board of
Directors.
Further during the year under review, Dr. Ashok Kumar was appointed as
additional director effective from 1st May, 2013. In terms of Section
260 of the Companies Act, 1956, Dr. Kumar shall hold offce up to the
date of the ensuing Annual General Meeting of the Company and is
eligible for appointment as Director. The Company has received a notice
under Section 257 of the Companies Act, 1956, proposing the appointment
of Dr. Ashok Kumar as director of the Company, who will be liable to
retire by rotation.
c) Reappointment of director(s) retire by rotation
In terms of Article 70 of the Articles of Association of the Company,
Mr.Surender Kumar Tuteja is liable to retire by rotation at the ensuing
Annual General Meeting, and being eligible, offer himself for
re-appointment.
The brief resumes of the Directors who are to be appointed/
re-appointed, the nature of their expertise in specifc functional
areas, names of companies in which they hold directorships, committee
memberships/ chairmanships, their shareholding etc., are furnished in
the explanatory statement to the notice of the ensuing Annual General
Meeting.
6. PAYMENT OF COMMISSION TO NON EXECUTIVE DIRECTORS
The Shareholders of the Company in their Annual General Meeting held
on 7th December, 2010, authorised the Board of Directors to approve the
payment of commission to the Non-Executive Directors per annum not
exceeding 1% of the net profts of the Company annually (computed in
accordance with section 309(5) of the Companies Act, 1956) in such
manner as the Board of Directors of the Company may from time to time
determine. However the Board of Directors of the Company in their
meeting duly held on 12th May, 2012 had decided to give commission
maximum up to Rs. 10 lacs to each of the Independent Directors.
However all the Independent Directors i.e. Mr.Surender Kumar Tuteja,
Mr.Vinod Sagar Wahi and Mr. Rajeev Thakore after considering the low
proftability of the Company and non-recommendation of any dividend to
shareholders of the Company for the fnancial year ended 31stMarch,
2012, on their own accord waived off the payment of the said commission
and relinquished all their claims, interest, and benefts in relation to
that.
7. CORPORATE DEBT RESTRUCTURING (CDR)
During the year under review, the Board of Directors of the Company in
their meeting duly held on 22nd March, 2013 approved the fling of an
application for restructuring of the Corporate Debt of the Company and
had taken a decision to refer the same to Corporate Debt Restructuring
Cell under the CDR mechanism that is governed by the Corporate Debt
Restructuring Scheme issued by Reserve Bank of India vide Circular No
RBI/2008-09/143, DBOD. No.BP.BC.No.37 /21.04.132/2008-09, and the
Corporate Debt Restructuring Guidelines formulated there under in
consultation with State Bank of Patiala, the lead bank of Consortium
Banks, and same has been reviewed and accepted by CDR Cell in their
meeting duly held on 26thApril , 2013.
8. MAJOR ACQUISITIONS, INVESTMENTS & DISINVESTMENTS
a) During the fnancial year under review the company has acquired 20%
stake in A2Z Waste Management (Jaipur) Limited ("A2Z Jaipur")
The Company has acquired 20% stake of A2Z Waste Management (Jaipur)
Limited ("A2Z Jaipur") from A2Z Infrastructure Limited on 11th July,
2012. The main object of A2Z Jaipur is to carry on the business of
collection, segregation, and transportation of municipal solid wastes
on Design, Build, Own, Operate and Transfer (DBOOT) basis or on
commercial basis and also dispose of the Municipal solid waste at the
designated sites, implement a scientifc solid waste management system
in the City of Jaipur as per the guidelines issued by Nagar Nigam
Jaipur, Rajasthan.
b) Amalgamation of A2Z Infra Management & Services Limited, Imatek
Solutions Private Limited, CNCS Facility Solutions Private Limited,
subsidiary Companies with A2Z Infraservices Limited, a subsidiary
company
A Scheme of arrangement for Amalgamation ("Scheme") of M/s. A2Z Infra
Management & Services Limited, M/s. Imatek Solutions Private Limited
and M/s. CNCS Facility Solutions Private Limited with A2Z Infraservices
Limited on a going concern basis was approved by the HonÂble High Court
of Punjab & Haryana at Chandigarh vide its Order dated 19th July, 2012
effective from 1st April, 2011 (the appointed date).The copy of the
said order has been fled with the Registrar of Companies, NCT of Delhi
& Haryana (ROC) vide E-Form No. 21 on 6th August, 2012 (effective
date).
Further as per the sanctioned Scheme 10,40,600 (Ten Lacs Forty Thousand
Six Hundred) fully paid up Equity shares of Rs. 10 each have been
issued and allotted to Company for considerationother than in cash.
c) Disinvestment of Weensure E Waste Limited (formerly known as A2Z E
Waste Management Limited)
Pursuant to the Share Purchase Agreement entered on 12th November, 2012
executed by and between the Company, Sardana Recycling Private Limited
(the "buyer"), Weensure E Waste Limited (formerly known as A2Z E Waste
Management Limited) and Dataserv APAC Limited (formerly known as A2Z
Dataserv Limited) along with addendums thereto, the Company had
proposed to sell the entire shareholding in the paid up Equity and
Preference Share Capital to the buyer in one or more tranches at a
total consideration of Rs. 230 Million. The company has ceased to be a
subsidiary of the Company w.e.f. 25th March, 2013.
9. EMPLOYEE STOCK OPTION PLAN 2010 (ESOP)
Complete detail & Status of A2ZSTOCK OPTION PLAN, 2010 as on 31stMarch,
2013 is attached as Annexure I to DirectorÂs Report.
AuditorÂs Certifcate under clause 14.1 of SEBI (ESOP) Guidelines 1999
shall be placed at ensuing Annual General Meeting.
10. UTILIZATION OF ISSUE PROCEEDS
During the year under review the Board of directors decided to vary the
objects as stated in the prospectus and for this purpose a postal
ballot was conducted in order to get consent of the members by way of
ordinary resolution. The said ordinary resolution was successfully
passed on 22nd March, 2013 where the result of the postal ballot was
declared at the registered offce of the company. The result of the same
was displayed on companyÂs website i.e. www.a2zgroup.co.in and was
simultaneously intimated to Bombay Stock Exchange and National Stock
Exchange of India. Pursuant to the provisions of Clause 43 of listing
agreement with the Exchanges, the utilization of the net proceeds of
IPO as on 31st March, 2013 is as follows:
(Rs. In Million)
Particulars of
funds utilised
for Total amount
to be Total amount
to be Actual
fnanced from
the fnanced from
the Utilisation
till
proceeds of
the proceeds of
the Fresh 31st March,
Fresh Issue
as per Issue as
per the 2013
the
prospectus,
as prospectus,
as further
modifed by
the Postal modifed by
the Postal
Ballot on
August 30, Ballot on
March 22, 2013
2011
Investment in
three biomass (bagasse)- 680.31 680.31 680.31
based power cogeneration
projects of 15
MW each in the
State of Punjab
Investment in fve
biomass-based power 101.54 101.54 101.54
generation projects of
15 MW each in the
State of Rajasthan
Investment in two
biomass-based power 344.56 135.89 135.89
generation projects
of 10 MW each in the
States of Uttar Pradesh
and Madhya Pradesh
Investment in subsidiaries
(i) Share capital in
A2Z Infrastructure 250.00 250.00 250.00
Limited for the 15
MW biomass-based
power generation
project in Kanpur.
(ii) Share capital in
A2Z Infrastructure 423.42 423.42 423.42
Limited and its
subsidiaries for certain
MSW projects
(iii) Share capital in
MansiBijlee& Rice Mills 258.26 149.98 149.98
Limited, the subsidiary
that will implement
rice mill and associated
rice-husk based
biomass power generation
project in the
State of Punjab
(iv) Share capital in
A2Z Infrastructure 172.28 172.28 172.28
Limited for the 10 MW
biomass-based
power generation project
in Uttar Pradesh
(v) Share capital in
A2Z Infrastructure 936.68 936.68 936.68
Limited and its
subsidiaries for certain
additional MSW projects
Repayment of loan
granted by L&T 416.67 416.67 416.67
Infrastructure Finance
to the Company
Acquisition of stake
held by IL&FS in A2Z 410.00 410.00 410.00
Infraservices Limited
&Imatek Solutions
Private Limited
Working capital
requirements 1,250.00 1,566.95 1,566.95
General corporate purposes 1217.77 1217.77 1217.77
Issue (IPO) related expenses 288.51 288.51 288.51
Total 6,750.00 6,750.00 6,750.00
11. SHARES HELD IN SUSPENSE ACCOUNT
At the time of public issue 1,035 Equity Shares were transferred to
suspense account as were unclaimed. At the end of last year i.e. as on
31st March, 2012, 105 shares were lying in the suspense account. During
the year no sharehas been transferred from suspense account to
shareholders. Detail of Shares in Suspense Account is as follows:
Particulars No. of Cases No. of Shares
Aggregate No. of Shareholders and outstanding shares in suspense
account lying at the beginning of the year-01/04/2012 01 105 Number of
Shareholders who approached to issuer/registrar for transfer of NIL NIL
shares from suspense account during the year -01/04/2012- 31/03/ 2013
Number of Shareholders to whom shares were transferred from suspense
NIL NIL account during the year-01/04/2012-31/03/2013 Aggregate No. of
Shareholders and outstanding shares in the suspense 01 105* account
lying at the end of the year-01/04/2012-31/03/2013
*The voting rights on these shares shall remain frozen till the
rightful owner of such shares claims the shares.
12. SUBSIDIARIES
As on March 31, 2013, the Company had 38 (Thirty Eight) direct and step
down subsidiary companies and an association of person (AOP) in which
company is having 60% sharing in profts, a list of which is given in
the notes to fnancials. During the year under review We ensure E Waste
Limited (formerly known as A2Z E Waste Management Limited) has ceased
to be subsidiary of the Company consequently Dataserv APAC Limited
(Formerly known as A2Z Dataserv Limited) also ceased to be the step
down subsidiary, and during the year under review A2Z Mayo SNT Waste
Management (Nanded) Private Limited has become the step down subsidiary
of the Company.
13. CONSOLIDATION OF FINANCIAL STATEMENTS:
In terms of Section 212(8) of the Companies Act, 1956 read with the
General Circular No. 2/2011 dated February 8, 2011 issued by the
Ministry of Corporate Affairs, Government of India, general exemption
has been provided to the Companies from compliance of the provisions of
Section 212(1) of the Companies Act, 1956 subject to compliance with
conditions as referred to in the said General Circular No 2/2011 dated
February 8, 2011. The Board of Directors of the Company, accordingly,
has given its consent for the non-attaching the balance sheet of the
subsidiaries and accordingly the balance sheet, statement of proft and
loss and other information of the subsidiary companies are not being
attached with the balance sheet of the Company. However, some key
information of the subsidiary companies as required to be provided in
terms of the said circular, is disclosed in the Annual report.
The annual accounts of the Subsidiary Companies and the related
detailed information will be made available to any member of the
Company/its subsidiaries who may be interested in obtaining the same.
The annual accounts of the subsidiary companies will also kept for
inspection by any member at the CompanyÂs registered offce and
corporate offce and that of the respective subsidiary Companies.
The Annual Report of the Company contains the consolidated audited
fnancial statements prepared pursuant to clause 41 of the Listing
Agreement entered into the stock exchanges and prepared in accordance
with the mandatory accounting standards as notifed by the Companies
(Accounting Standards) Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 1956.
14. INTERNAL CONTROL SYSTEMS
The Company has a proper, effcient & adequate internal control system.
It ensures that all the assets are safeguarded and protected against
loss from unauthorized use or disposition and the transactions are
authorized, recorded and reported correctly.
An effective programme of internal audit and management review
supplements the process of internal control. Properly documented
policies, guidelines and procedures are laid down for this purpose. The
internal control system has been designed so as to ensure that the
fnancial and other records of the Company are reliable for preparing
the fnancial and other statements and for maintaining accountability of
assets of the Company.
The Company has also constituted an Audit Committee comprising of 3
(Three) professionally qualifed directors, who regularly interact with
the Statutory Auditors and Internal Auditors in dealing with the
matters specifed within its terms of reference. The Committee mainly
deals with accounting matters, fnancial reporting and internal
controls.
15. AUDIT COMMITTEE RECOMMENDATION
During the year under review there was no such recommendation of the
Audit Committee which was not accepted by the Board. Hence there is no
need for disclosure of the same in this report.
16. RISK MANGEMENT SYSTEM
Risks are an integral part of any business and the risk profle, to a
great extent, depends on the climatic conditions, economic and business
conditions and the markets and customers we serve.
Your Company has adopted a comprehensive & effective system of Risk
Management. The Company has adopted a procedure for risk assessment and
its minimization. It ensures that all the risks are timely identifed
and mitigated in accordance with the well-structured Risk Management
process. The Board of directors & the Audit Committee periodically
review the Risk management process.
17. LISTING
The Equity shares of the Company continue to remain listed on Bombay
Stock Exchange Limited (BSE) and National Stock Exchange of India
Limited and the stipulated listing fees for FY 2013-14 have been paid
to both the Stock Exchanges.
18. PUBLIC DEPOSITS
During the year under review the company has not accepted any deposit
from public within the meaning of section 58A of the Companies Act,
1956 and rules made there under.
19. AUDITORS AND AUDITORÂS REPORT
M/s. Walker Chandiok & Co. Chartered Accountants, Statutory Auditors of
the Company will hold offce up to the conclusion of the ensuing Annual
General Meeting and being eligible have offered themselves for
re-appointment.
On recommendation of the Audit Committee the Board has recommended the
re-appointment of M/s Walker, Chandiok & Co., Chartered Accountants as
Statutory Auditors. M/s Walker, Chandiok & Co., Chartered Accountants,
if appointed by members as Statutory auditor shall hold offce from the
conclusion of ensuing Annual General Meeting up to the next Annual
General Meeting of the Company.
Certifcate from the said Auditors has been obtained to the effect that
their re-appointment, if made, would be within the limits specifed
under Section 224 (1B) of the Companies Act, 1956.
The auditorÂs report presented by M/s Walker Chandiok & Co., Statutory
Auditors on the accounts of the company for the fnancial year ended
31st March, 2013 is self-explanatory and requires no comments and the
Management replies to the audit observations are as under:
Explanation to para 7 (a) of AuditorÂs report on Consolidated
Financials of A2Z Maintenance & Engineering Services Limited, its
subsidiaries and joint ventures & para 7 (a) of AuditorÂs report on
Standalone Financials of A2Z Maintenance & Engineering Services Limited
The Company has outstanding recoverable of Rs 64.38 Million and Rs
60.64 Million being deductions proposed/ made by the respective
customers on invoices raised by Company for services rendered, price
escalations on certain supply items and certain other items.
In one of the cases, involving amount of Rs 64.38 Million, the Company
had fled an application with the High Court for appointment of
arbitrator in response to which the High Court had appointed an
arbitrator to settle the dispute. In the other case, involving
outstanding receivables of Rs 60.64 Million, the Company has fled a
Special leave petition with the HonÂble Supreme Court against the
honÂble High CourtÂs order for appointment of arbitrator, accordingly
the HonÂble Supreme Court has given stay on the proceedings of the
arbitrator appointed by the customer. The Management based on the legal
advice, believes that the outcome of legal matters is likely to be in
its favor and has thus classifed the said amount as recoverable in the
books and no adjustment have been made with respect of the same in the
fnancial statements of the Company.
Explanation to para 7 (b) of AuditorÂs report on Consolidated
Financials of A2Z Maintenance & Engineering Services Limited, its
subsidiaries and joint ventures
One of the subsidiary company, A2Z Infrastructure Limited, has
outstanding recoverable of Rs 76.27 Million, being receivable from a
customer for collection and transportation of municipal solid waste.
The subsidiary company has fled a writ petition with High Court of
Patna for recovery of dues. An interim order was passed directing the
customer to release 75% of the amount recoverable. Against the interim
order, the customer has fled Letters Patent Appeal (ÂLPAÂ) which has
been dismissed, confrming the interim order. Subsequently, the writ
petition has been allowed by the Court and customer has been directed
to pay the entire amount along with the interest at the rate of 8% p.a
from the due date.
Explanation to para 7 (c) of AuditorÂs report on Consolidated
Financials of A2Z Maintenance & Engineering Services Limited, its
subsidiaries and joint ventures ¶ 7 (b) of AuditorÂs report on
Standalone Financials of A2Z Maintenance & Engineering Services Limited
The Company has incurred a loss of Rs. 538.10 Million for the year
ended 31st March, 2013 and is presently facing acute liquidity problems
on account of delayed realisation of trade receivables coupled with
delays in commencement of commercial production at its biomass based
power generation plants. Management is evaluating various options and
addition to consolidation of business by focusing on core operations
and disposing off the non-core assets, has also made reference to
Corporate Debt Restructuring Cell (ÂCDR CellÂ) under the CDR
mechanismas approved by the Board of Directors in their meeting duly
held on 22nd March, 2013. The CDR Cell has accepted the CompanyÂs
application in the meeting held on 26th April, 2013. The Company is in
the process of complying with the conditions precedent to the
restructuring process and obtaining the approval of the lending banks
and the CDR Cell Empowered Group.The Management believes that the
Company will be able to receive the approval of the CDR Cell in the due
course and in view of the proposed restructuring of debt obligations,
no adjustments are required in the fnancial statements and accordingly,
these have been prepared on a going concern basis.
Explanation to Point No. (ix) (a) & (xi) of the Annexure to the
AuditorÂs Report on Standalone Financials of A2Z Maintenance &
Engineering Services Limited
In respect of auditorÂs observation in standalone fnancial statements
regarding certain default in payment of interest and repayment of dues
of banks and delay in depositing statutory dues:
It is clarifed that the delay arose on account of delayed realisation
of trade receivables coupled with delays in commencement of commercial
production at its biomass based power generation plants.
Explanation to Point No. (xxi) of the Annexure to the AuditorÂs Report
on Standalone Financials of A2Z Maintenance & Engineering Services
Limited
During the year theft by unidentifed individual of materials amounting
to Rs. 29.17 Million and of cash amounting to Rs 3.82 Million have been
reported against which the Company has fled an insurance claim with the
Insurance Company. We have taken adequate safeguards to prevent theft
of materials in future.
Branch Audit:
Pursuant to section 228(3) (a) and other applicable provisions, if any,
of the Companies Act, 1956 and subject to the approval in the General
Meeting, the accounts of a branch can be audited otherwise than by the
CompanyÂs auditors and the Board of Directors, in consultation with the
CompanyÂs auditors, can appoint such branch auditors.
Accordingly the approval of the shareholders is sought to authorise the
Board of Directors of your Company to appoint in consultation with the
Statutory Auditors of the Company any person other than the Statutory
Auditors, the Auditors for any branch offce of your Company, which is
already opened or is to be opened.
Further the accounts of the abovementioned branches have been
consolidated in the CompanyÂs fnancials.
20. COST AUDITOR:
M/s. Harendra Singh & Company, Cost Accountants were appointed as Cost
Auditors of the Company to conduct cost audit for the fnancial year
2012-13. The Cost Audit Report for the Financial year 2012-13 is due to
be fled with MCA on or before 27th September, 2013(being within 180
days from the end of reporting year).
21. PARTICULARS OF EMPLOYEES
The information required under the provisions of Section 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975, as amended, is attached as Annexure II to DirectorÂs
Report.
22. CORPORATE GOVERNANCE REPORT
Your Company strongly believes in maintaining high corporate governance
standards. The company is regularly complying with the regulatory norms
of Corporate Governance as stipulated under clause 49 of the listing
agreement. A detailed report on compliance of corporate governance
along with Management Discussion & Analysis forms part of the Annual
Report.
The requisite Certifcate from the Practicing Company Secretary Mr.
Deepak Gupta, a partner of M/s DR Associates, Company Secretaries
regarding Compliance with the conditions of Corporate Governance as
stipulated in Clause 49 is annexed as Annexure-III to Corporate
Governance.
Certifcate of the CEO/CFO, inter alia, confrming the correctness of the
fnancial statements, compliance with Company''s Code of Conduct,
adequacy of the Internal Control measures and reporting of matters to
the Audit Committee in terms of Clause 49 of the Listing Agreement with
the Stock Exchanges, is attached in the Corporate Governance Report and
forms part of this Report.
23. DIRECTORÂS RESPONSIBILITY STATEMENTS:
In accordance with the provisions of section 217(2AA) of the Companies
Act, 1956, your directors state that:
1. In the preparation of the annual accounts, applicable accounting
standards have been followed along with proper explanation relating to
material departures.
2. Accounting policies selected were applied consistently. Reasonable
and prudent judgments and estimates are made so as to give a true and
fair view of the state of affairs of the Company as on 31st March, 2013
and of the profts or loss of the Company for the year ended on that
date.
3. Proper and suffcient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
4. The annual accounts of the company have been prepared on a going
concern basis.
24. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Particulars required to be furnished pursuant to section 217(1)(e) of
the Companies act, 1956 read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988:
i. Part A and B of the Rules pertaining to conservation of energy and
technology absorption are not applicable to the Company.
ii. Foreign Exchange earnings and outgo:
Earnings: Revenue from Engineering Services - Rs. 491.89 Million
Outgo - Expenditure in Foreign Currency - Rs. 3.80 Million
CIF value of Imports - Rs. 12.82 Million
25. ACKNOWLEDGEMENT
Your Directors would like to express their gratitude and appreciation
for the co-operation and support extended by the Bankers, Vendors,
Investors, Business Associates and various Government
Agencies/Authorities during the year under review. Your Directors also
wish to place on record their deep sense of appreciation for the
committed services and untiring efforts of the executives, staff and
workers of the Company at all the levels.
For and on behalf of Board of Directors
Sd/-
Date: August 24, 2013 (Surender Kumar Tuteja)
Place: Gurgaon Chairman
Mar 31, 2012
The directors have pleasure in presenting the 11th Annual Report on
the affairs of the Company together with the Audited Accounts for the
Financial Year ended on 31st March, 2012.
1. FINANCIAL RESULTS & PERFORMANCE:
The Operating and financial results on Standalone and Consolidated basis
for the financial year ended 31st March, 2012 are as follows:
(Rs. in Million)
Standalone Consolidated
2011-12 2010-11 2011-12 2010-11
Particulars Current Year Previous
Year Current
Year Previous
Year
Revenue from Operations 9,682.31 11,073.44 13,522.98 13,491.29
Add: Other Income 83.55 89.86 105.11 105.61
Total Income 9,765.86 11,163.30 13,628.09 13,596.90
Profit before Interest,
Tax & Depreciation 955.08 2,059.28 889.81 2,192.06
Less: Interest 559.75 530.15 745.34 618.28
Profit before Tax &
Depreciation 395.33 1,529.13 144.47 1,573.78
Less: Depreciation/
Amortisation 69.90 111.84 192.79 194.71
Profit/(Loss) before Tax
& Extra Ordinary Items 325.43 1,417.29 (48.32) 1,379.07
Less : Tax Expenses 128.09 476.94 130.62 498.27
Net Profit/(Loss) after
Tax but before
Extraordinary item 197.34 940.35 (178.94) 880.80
Less: Previous Period Item - - (2.05) -
Less : Extraordinary Item - 86.83 - 86.83
Net Profit/(Loss) after
Tax & before
Minority Interest 197.34 853.52 (176.89) 793.97
Less: Share in
Minority Interest - - 2.58 22.79
Net Profit/(Loss) after
Tax & Minority Interest 197.34 853.52 (179.47) 771.18
Balance brought forward
from previous year 2,866.21 2,249.70 2,746.89 2,217.52
Net Profit available for
appropriation 3,063.55 3,103.22 2,567.42 2,988.70
Standalone:
- During the year under review, the Company has achieved total income
of Rs. 9,765.86 Million as against Rs. 11,163.30 Million in the
previous year. The company has made net Profit after tax and
extraordinary item of Rs. 197.34 Million as against Rs. 853.52 Million
in the previous year.
- The Net Worth of the Company has increased to Rs. 11,584.20 Million
as at the end of the current year from Rs.11,386.86 Million as at the
end of the previous year.
- The Debt Equity ratio of the Company has gone up to 0.54 as at the
end of the current year as compared to 0.29 as at the end of the
previous year.
Consolidated:
- The Consolidated total income of the Company for the current financial
year is Rs. 13,628.09 Million as against Rs. 13,596.90 Million in the
previous year. The Company on consolidated basis has made a Loss after
minority interest and extra ordinary items of Rs. 179.47 Million as
against Profit of Rs. 771.18 Million in the previous year.
- The consolidated Net Worth of the Company has come down to Rs.
11,086.99 Million as at the end of the current year from Rs. 11,520.98
Million as at the end of previous year.
- The consolidated Debt Equity ratio of the Company has gone up to 1.02
as at the end of the current year compared to 0.41 as at the end of
previous year.
2. DIVIDEND
Since the magnitude of the Profits of the company is not very high your
directors have decided to plough back the Profits and not to declare
dividend for this financial year.
3. TRANSFER TO RESERVE
Since no dividend is recommended for the current year, no amount is
required to be transferred to reserve this year.
4. NATURE OF OPERATIONS
Leveraging our years of experience in providing Facility Management
Services (FMS) and Engineering, Procurement and Construction (EPC)
services, the Company, is now expanding into being an Infrastructure
company that is building businesses with annuity revenue streams in the
areas of Clean and Green energy.
In the EPC business, our main area of operation is the Power
Distribution segment, though we also provide services in the Power
Transmission segment, to Power Generation companies and to other
verticals such as Telecommunication. In the Power Distribution segment,
we are helping build power lines to bring power to areas which lack
electricity. We are also helping to reduce the Technical and Commercial
losses. Additionally, we are now building businesses that include the
following: (i) generating power from renewable energy sources such as
biomass and fuel derived from household waste (Renewable Energy
Generation); (ii) providing municipal solid waste (MSW) management
services which involve collection of waste and its scientific processing
and disposal like recycling, manufacturing of organic compost and green
fuel such as Refused Derived Fuel (RDF) & subsequent disposal of
remnants; and (iii) developing information technology (IT) solutions
for power utilities (Power IT Solutions). Through multiyear contracts,
the MSW and Renewable Energy Generation businesses should provide
stable revenue streams in the years to come. Our business operations
are geographically spread across India and conducted through the
Company and its direct and indirect subsidiaries.
5. CAPITAL STRUCTURE
The paid up Share Capital of the company is Rs. 741.78 Million
(approximately) divided into 7,41,77,694 Fully Paid-up Equity Shares of
Rs. 10 each. There is no change in the paid up share capital during the
year.
6. ALTERATION IN MEMORANDUM &ARTICLES OF ASSOCIATION
There was no alteration in the Memorandum and Articles of Association
of the Company during the year.
7. BOARD OF DIRECTORS
a) Composition of Board:
The Board comprises of Nine (9) Directors and Two (2) Alternate
Directors with a Non- executive Independent Chairman, Two (2) Executive
Directors, one of whom is Managing Director, Four (4) Non-executive Non
Independent Director and Two (2) Non Executive Independent Directors.
b) Change in Composition of Board:
During the year under review, Mr. Anshuman Goenka, Alternate Director
to Mr. Brij Raj Singh vacated the office of director on 25th July, 2011
on the return of Mr. Brij Raj Singh in the state of Haryana where the
meetings of board of directors are ordinarily held and Mr. Arjun Balan
has been appointed as an Alternate Director to Mr. Brij Raj Singh on
29th day of August, 2011 by the Board of Directors.
c) Retirement by Rotation
In accordance with requirements of the Companies Act, 1956 and Articles
of Association of Company, Mr. Surender Kumar Tuteja and Ms. Dipali
Mittal, Directors are liable to retire by rotation at the ensuing
Annual General Meeting of the Company and being eligible, offers
themselves for re-appointment.
8. PAYMENT OF COMMISSION TO NON EXECUTIVE DIRECTORS
The members of the Company in their meeting held on 7th December, 2010
authorized the Board of Directors of the Company to approve the payment
of commission to Directors, being not in the whole-time employment of
the Company or not the Managing Director, for three years commencing
from Financial Year 2010-11 for an amount not exceeding one percent of
the net Profits of the Company over and above the sitting fee subject to
availability of adequate Profits in Company.
As the company is having Profits, the Board in its meeting held on 12th
May, 2012 has approved payment of commission of Rs. 1,000,000 (One
Million) each to Mr. Surender Kumar Tuteja, Mr. Vinod Sagar Wahi, and
Mr. Rajeev Thakore, Non Executive / Independent Directors of the
Company, in aggregate amounting to Rs. 3 Million within the overall
limit of 1% of net Profits, for the Financial Year ended 31st March,
2012.
9. MAJOR ACQUISITIONS, INVESTMENTS & DISINVESTMENTS
During the financial year under review the company has
acquired/disinvested in the following companies:
a) Acquisition of 20% stake in A2Z Infraservices Limited and Imatek
Solutions Private Limited During the year under review, the Company has
acquired 20% stake of A2Z Infraservices Limited and Imatek Solutions
Private Limited, subsidiary companies of the Company from
Infrastructure Leasing & Financial Services Limited (IL&FS) on 25th
October, 2011. By virtue of such acquisition the share holding of the
Company in A2Z Infraservices Limited has been increased to 92.22% of
total paid up capital and Imatek Solutions Private Limited has became a
wholly owned subsidiary of the Company.
b) Acquisition of A2Z Disaster Management & Innovative Response
Education Private Limited ("ADMIRE")
The Company has acquired 100% shareholding of Mithila Bijlee Private
Limited with effect from 15th November, 2011. Further the name and
object of the company were changed to A2Z Disaster Management &
Innovative Response Education Private Limited with effect from 17th
November, 2011. The Company's main object are to carry on the business
of providing services & consultancy in the area of disaster management,
risk mitigation, emergency response, rehabilitation, infrastructure
creation and restoration of drains & embankments, roads, storm shelters
and electricity transmission etc.
c) Acquisition of Pioneer Waste Management Private Limited ("PIONEER")
The Company has acquired 100% stake in Pioneer Waste Management Private
Limited with effect from 15th November, 2011. The Company's main
objects are to carry on the business of collection, segregation, and
transportation of municipal solid wastes on Design, Renovate, Operate,
Maintain and Transfer (DPROMT) and to design, develop, operate, own,
sell, renovate, maintain, power generation units based on all
conventional and non-conventional energy sources including municipal or
industrial or other kind of wastes.
d) A2Z Singapore Waste Management Holdings Private Limited ("A2Z
Singapore")
The Company has incorporated a wholly owned subsidiary in Singapore
under the name and style of A2Z Singapore Waste Management Holdings
Private Limited with effect from 1st September, 2011. A2Z Singapore is
a company engaged, in the business of investment holding and to
purchase, subscribe for or otherwise acquire and hold shares, stocks,
debentures, debenture stocks, bonds, deposits, obligations and
securities issued or guaranteed by any company whether constituted or
carrying on business in Singapore or elsewhere and debentures,
debenture stocks, bonds, obligations and securities issued or
guaranteed by any government, sovereign ruler, commissioners, public
body or authority, supreme, municipal, local or otherwise, whether at
home or abroad and to carry on the business of dealing in solid waste
in all manners.
e) A2Z Waste Management ( Nainital) Private Limited ("A2Z Nainital")
The Company has acquired 48 % stake in A2Z Waste Management (Nainital)
Private Limited with effect from 23rd December, 2011, which is Special
Purpose Vehicle Company for development of integrated solid waste
management facilities in Nainital city for Nagar Palika Parishad,
Nainital, Uttarakhand and is engaged in the business of collection,
segregation, and transportation of municipal solid wastes on Design,
Procure, Renovate, Operate, Maintain and Transfer (DPROMT) or on
commercial basis and also dispose of the Municipal solid waste at the
designated sites, implement a scientific solid waste management system
in the City of Nainital as per the guidelines issued by Nagar Palika
Parishad, Nainital, Uttarakhand.
f) Acquisition of 20% stake in A2Z Waste Management (Jaipur) Limited
("A2Z Jaipur") After the year under review, the Company has acquired
20% stake of A2Z Waste Management (Jaipur) Limited ("A2Z Jaipur") from
A2Z Infrastructure Limited on 11th July, 2012. The main object of A2Z
Jaipur are to carry on the business of collection, segregation, and
transportation of municipal solid wastes on Design, Build, Own, Operate
and Transfer (DBOOT) basis or on commercial basis and also dispose of
the Municipal solid waste at the designated sites, implement a
scientific solid waste management system in the City of Jaipur as per
the guidelines issued by Nagar Nigam Jaipur, Rajasthan.
g) Sale of 2% Stake in Star Transformers Limited During the year under
review the Company's stake in Star Transformers Limited had come down
to 49% from 51% by sale of 40,413 equity shares constituting 2% paid up
share capital of the company. However the financials of Star
Transformers Limited have been taken in the consolidated financial
statement of the Company as the Company is having control over the
composition of the board of directors of Star Transformers Limited.
h) Amalgamation of A2Z Infra Management & Services Limited, Imatek
Solutions Private Limited, CNCS Facility Solutions Private Limited,
subsidiary Companies with A2Z Infraservices Limited, a subsidiary
company During the year under review a Scheme of Arrangement for
Amalgamation of M/s. A2Z Infra Management & Services Limited, M/s.
Imatek Solutions Private Limited and M/s. CNCS Facility Solutions
Private Limited with A2Z Infraservices Limited on a going concern basis
was fled with Hon'ble High Court of Punjab & Haryana at Chandigarh.
Further after the Financial year under review, the Hon'ble High Court
has approved the said Scheme of Arrangement vide its order dated 19th
July, 2012 w.e.f. 1st April, 2011 (the appointed date) and as ordered
by the Hon'ble High Court the copy of the said order has also been fled
with the Registrar of Companies, NCT of Delhi & Haryana (ROC) vide
E-Form no. 21 on 6th August, 2012 and as per the provisions of
Companies Act, 1956, the said Scheme has been effective from 6th
August, 2012 w.e.f the appointed date i.e. 1st April, 2011. 10. A2Z
STOCK OPTION PLAN, 2010
Your Company pursuant to a special resolution of the shareholders of
the Company at an extraordinary general meeting held on 30th March,
2010 adopted the Employee Stock Options Plan ("A2Z ESOP") for the grant
of options.
The said option was granted on 2nd June, 2010 ("Grant Date") and the
20% of the granted option get vested to each of the eligible employee
on each anniversary of the Grant Date.
The plan shall be administered and supervised by the
Remuneration-cum-Compensation Committee under the powers delegated by
Board. Each option shall entitle the Option Grantee to apply for and
get Equity Shares of the company transferred to his account on
exercise of option. The maximum number of options that can be granted
to any employee in any year under the A2Z ESOP shall be less than 5% of
the issued share capital of the Company (excluding any outstanding
warrants or other securities convertible into Equity Shares) at the
time of grant of options, subject to the overall ceiling of 2,865,056
options in the aggregate. However no option has been exercised under
ESOP till date. Auditor's Certificate under clause 14.1 of SEBI (ESOP)
Guidelines 1999 shall be placed at ensuing Annual General Meeting.
Complete detail & Status of A2Z ESOP as on 31st March, 2012 is attached
as Annexure I to Director's Report.
11. CREDIT RATING
CARE has assigned 'CARE A' (Single A) to long term bank facilities of
Rs. 6394.2 Million of your Company as per their rating letter dated
02nd December, 2011 and respective rationale rating letter dated 19th
December, 2011. This rating is applicable to facilities having tenure
of more than one year. Instruments with this rating are considered to
offer adequate safety for timely servicing of financial obligations.
Such instruments carry low credit risk.
CARE has assigned CARE A1 (A One) rating to the short term facilities
of Rs. 15,580 Million of your Company as per their rating letter dated
2nd December, 2011 and respective rationale rating letter dated 19th
December, 2011. This rating is applicable to facilities having a tenure
up to one year. Instruments with this rating are considered to have
strong degree of safety regarding timely payment of financial
obligations and carry lowest credit risk.
Further CARE has also assigned CARE A (Single A) rating to Non
Convertible Debenture of Rs. 2000.00 Million and CARE A1 (A One) for
Commercial Paper /short term debt of Rs. 250.0 Million (carved out of
working capital limits) of the Company as per their rating letter dated
19th December, 2011.
12. UTILIZATION OF ISSUE PROCEEDS
During the year under review, the Board of directors have decided to
vary the objects as stated in the prospectus and for this purpose a
postal ballot was conducted in order to get consent of the members by
way of ordinary resolution. The said ordinary resolution was
successfully passed. The result of the said postal ballot was declared
on Tuesday, the 30th day of August, 2011 at the registered office of the
company. The result of the same was displayed on company's website i.e.
www.a2zgroup.co.in and
14. SUBSIDIARY COMPANIES
DIRECT SUBSDIARIES
The Company is having following 17 (Seventeen) direct subsidiaries :-
- A2Z Infrastructure Limited( "A2Z Infrastructure")
A2Z Infrastructure Limited was incorporated on 22nd March, 2007 with
the name and style of a2z Infrastructure Private Limited as a wholly
owned subsidiary of the Company. With effect from 30th August, 2010,
A2Z Infrastructure became a public limited company under the Companies
Act, 1956. A2Z Infrastructure was established to carry on the business
of collection, segregation and transportation of municipal solid wastes
on design, renovate, operate, maintain and transfer or on commercial
basis for municipal corporations/local authorities/ governmental
authorities.
- A2Z Infraservices Limited ("A2Z Infraservices")
A2Z Infraservices Limited was incorporated on 15th April, 2008 with the
name and style of a2z Infraservices Private Limited as a subsidiary of
the Company and with effect from 30th August, 2010, A2Z Infraservices
became a public company under the Companies Act, 1956. A2Z
Infraservices was established to provide back-end management services
for efficient functioning of shopping malls, airport, multiplexes,
corporate and business establishments like housekeeping services,
security services etc., upkeep of railway trains and stations and to
provide transportation services.
- A2Z Powercom Limited ("A2Z Powercom")
A2Z Powercom Limited was incorporated on 28th April, 2008 with the name
and style of a2z Powercom Private Limited as a subsidiary of the
Company and with effect from 30th August, 2010, A2Z Powercom became a
public company under the Companies Act, 1956. A2Z Powercom was
established to manufacture, produce and distribute power transformers,
transmission line conductors, establish power plants and undertake
associated activities of engineering, drawing, installation and
commissioning in India and abroad.
- A2Z Powertech Limited ("A2Z Powertech")
A2Z Powertech was incorporated on 28th April, 2008 with the name and
style of a2z Powertech Private Limited as a subsidiary of the Company
and with effect from 30th August, 2010, A2Z Powertech became a public
company under the Companies Act, 1956. A2Z Powertech was established to
carry on the business of system integrators in the power sector using
IT applications, autoreclousers with magnetic actuators, RMUs, CSS,
sub-station automation, network energy management solution etc.
- Selligence Technologies Services Private Limited ("Selligence")
Selligence was incorporated on 12th August, 2008 and became subsidiary
of the Company on 9th March, 2009. Selligence was established to
provide appropriate cost-effective and efficient technological solutions
to accelerate implementation of quality ERP for development, and to
provide a variety of efficient and effective services for implementation
of development programs.
- Mansi Bijlee & Rice Mills Limited ("Mansi Bijlee") Mansi Bijlee was
incorporated on 10th June, 2010 with name and style of Mansi Bijlee
Private Limited. With effect from 25th October, 2010, the name of the
company was changed to Mansi Bijlee & Rice Mills Private Limited. Mansi
Bijlee was established to carry on the business of generating,
distributing, transmitting, supplying and dealing in any manner in
electricity and all forms of energy and to generate power through
conventional and/or non-conventional sources, including biomass and
waste materials. It has become the subsidiary of the Company with
effect from 20th July, 2010. Mansi Bijlee got converted into Public
Limited Company with effect from 28th March, 2012.
- A2Z Maintenance Engineering Services (Uganda) Private Ltd.("A2Z
Uganda")
A2Z Maintenance & Engineering Services (Uganda) Private Limited was
incorporated under the laws of the Republic of Uganda on 27th August,
2010 as a wholly owned subsidiary of the Company. A2Z Uganda was
established to carry on the business to generate, accumulate, transmit,
commission, maintain, distribute, purchase, sell and supply electricity
power or any other energy from conventional/non- conventional energy
sources on a commercial basis and to construct, lay down, establish,
operate and maintain power/energy generating stations including
buildings, structures, works, machineries, equipments, cables and to
undertake or to carry on the business of managing, owing, controlling,
erecting, commissioning, operating, running, leasing or transferring to
third person/s, power plants and plants based on conventional or
non-conventional energy sources, bio-mass, solar energy plants, wind
energy plants, mechanical, electrical, hydel and to deal all kinds of
energy systems and products.
- Mirage Bijlee Private Limited (" Mirage Bijlee") Mirage Bijlee was
incorporated on 11th June, 2010. Mirage Bijlee was established to
carry on in India or abroad the business to generate, accumulate,
transmit, commission, maintain, distribute, buy, sell, supply and deal
in any manner in electricity and all forms of energy and to generate
power through conventional and/or non-conventional sources. It has
become a subsidiary of the Company with effect from 15th September,
2010.
- Madhya Bijlee Private Limited ("Madhya Bijlee") Madhya Bijlee was
incorporated on 14th June, 2010. Madhya Bijlee was established to
carry on in India or abroad the business to generate, accumulate,
transmit, commission, maintain, distribute, buy, sell, supply and deal
in any manner in electricity and all forms of energy and to generate
power through conventional and/or non-conventional sources. It has
become a subsidiary of the Company with effect from 18th October, 2010.
- Star Transformers Limited ("Star Transformers") Star Transformers was
Incorporated on 21st January, 2011 as a Part IX Company under the
provision of Companies Act, 1956 and subsequently it became a
subsidiary of the Company. The company basically deals in, either
directly or in partnership, high tension and low tension transformers
and transformer equipments of all types. Also business of service,
execution, and repair or otherwise of power distribution projects.
The Company was holding 51% stake in the Star Transformer during the
year under review. However on 16th March, 2012 the company's stake has
come down to 49% of the total paid up capital and Star Transformer is
treated as subsidiary company of the Company as the Company is having
control over the composition of the board and as per Accounting
Standard 21 shall be treated as subsidiary of the Company.
- Chavan Rishi International Limited ("Chavan")
Chavan Rishi International Limited, is a wholly owned subsidiary of the
Company. The Company is engaged in the business of build, contract,
establish, own, purchase, sell, take on lease, acquire hold or maintain
and manage industrial, commercial or residential buildings, apartment,
hotels, motels, restaurant etc.
- A2Z E Waste Management Limited ("A2Z E Waste")
A2Z E waste Management Limited was incorporated on 10th February, 2011
as a subsidiary of the Company. The company is engaged in the business
of managing, processing and scientific disposal of Computer waste,
electronic waste and all other types of waste, including collection,
de-manufacturing, remarketing and recycling, collection, storage,
dismantling, segregation transportation trading, processing, extraction
of valuable metals, reuse and recycling, treatment and disposal of all
types computer and electronic waste (E-waste), hazardous waste and to
bid for obtaining rights to implement electronic waste and related
projects.
- A2Z Water Solutions Limited ("A2Z Water")
A2Z Water Solutions Limited was incorporated on 10th February, 2011 as
a subsidiary of the Company. The company provides integrated water and
waste water solutions including ways to control water pollution through
various technologies and is basically engaged in the feld of water and
waste water management.
- A2Z Singapore Waste Management Holdings Private Limited ("A2Z
Singapore")
A2Z Singapore is a company incorporated on 1st September, 2011 as per
the laws in the Republic of Singapore. A2Z Singapore is a company
engaged, in the business of investment holding and to purchase,
subscribe for or otherwise acquire and hold shares, stocks, debentures,
debenture stocks, bonds, deposits, obligations and securities issued or
guaranteed by any company whether constituted or carrying on business
in Singapore or elsewhere and debentures, debenture stocks, bonds,
obligations and securities issued or guaranteed by any government,
sovereign ruler, commissioners, public body or authority, supreme,
municipal, local or otherwise, whether at home or abroad and to carry
on the business of dealing in solid waste in all manners. The company
is a wholly owned subsidiary of the Company and has its Registered
Office at 3 Shenton Way, #22-09A, Shenton House, Singapore (068805).
- A2Z Disaster Management and Innovative Response Education Private
Limited ("ADMIRE")
ADMIRE was incorporated on 14th June, 2010 with the name and style of
Mithila Bijlee Private Limited. The Company acquired 100% stake in it
on 15th November, 2011 and Its name was changed to A2Z Disaster
Management and Innovative Response Education Private Limited with
effect from 17th November, 2011. The Company is engaged in the business
of providing services & consultancy in the area of disaster management,
risk mitigation, emergency response, rehabilitation, infrastructure
creation and restoration of drains & embankments, roads, storm shelters
and electricity transmission and distribution with an objective of
preparing, supporting, rebuilding society to achieve quick/speedy
recovery and rehabilitation of affected communities immediately after
disaster strikes whether natural, industrial or man-made and to provide
consultancy and solutions for awareness and management of natural
disasters in meteorological, hydrological, seismological, environmental
including knowledge product, high end technology such as Management
information system (MIS), Geographical information system (GIS), IT
solutions and Focus on protection of the environment.
- Pioneer Waste Management Private Limited ("Pioneer")
The Company acquired 100% stake in Pioneer on 15th November, 2011. The
Company is engaged in the business of collection, segregation, and
transportation of municipal solid wastes on Design, Renovate, Operate,
Maintain and Transfer (DPROMT) or on commercial basis for Municipal
Corporations/ Local authorities/ Govt. Agencies and Semi Govt.
Agencies and to dispose municipal solid waste at designated sites,
implement a scientific solid waste management system as per guideline
issued by Municipal Corporation Local authority/ Govt. Agency and Semi
Govt. Agency or on such innovative commercial collection system.
- A2Z Waste Management ( Nainital) Private Limited ("A2Z Nainital")
The Company is having 48 % stake in A2Z Waste Management (Nainital)
Private Limited directly effective from 23rd December, 2011 and 26%
through A2Z Infrastructure Limited, a direct subsidiary company. A2Z
Nanital is a Special Purpose Vehicle Company for development of
integrated solid waste management facilities in Nainital city for Nagar
Palika Parishad, Nainital, Uttarakhand and is engaged in the business
of collection, segregation, and transportation of municipal solid
wastes on Design, Procure, Renovate, Operate, Maintain and Transfer
(DPROMT) or on commercial basis and also dispose of the Municipal solid
waste at the designated sites, implement a scientific solid waste
management system in the City of Nainital as per the guidelines issued
by Nagar Palika Parishad, Nainital, Uttarakhand
INDIRECT SUBSIDIARIES
The Company is having following 23 (Twenty Three) indirect subsidiaries
:- - A2Z Waste Management (Aligarh) Limited: ("A2Z Aligarh")
A2Z Aligarh was incorporated on 4th December, 2009 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Aligarh was established for the
development of integrated solid waste management facilities in Aligarh
city for Aligarh Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Varanasi) Limited: ("A2Z Varanasi")
A2Z Varanasi was incorporated on 4th December, 2009 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Varanasi was established for the
development of integrated solid waste management facilities in Varanasi
city for the Varanasi Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Merrut) Limited: ("A2Z Merrut")
A2Z Merrut was incorporated on 4th December, 2009 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Merrut was established for the
development of integrated solid waste management facilities in Meerut
for the Meerut Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Moradabad) Limited: ("A2Z Moradabad")
A2Z Moradabad was incorporated on 4th December, 2009 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Moradabad was established for the
development of integrated solid waste management facilities in
Moradabad city for the Moradabad Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Badaun) Limited: ("A2Z Badaun")
A2Z Badaun was incorporated on 10th November, 2010 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Badaun was established for the
development of integrated solid waste management facilities in Badaun
city for Badaun Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Balia) Limited: ("A2Z Balia")
A2Z Balia was incorporated on 10th November, 2010 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Balia was established for the
development of integrated solid waste management facilities in Balia
city for Balia Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Basti) Limited: ("A2Z Basti")
A2Z Basti was incorporated on 10th November, 2010 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Basti was established for the
development of integrated solid waste management facilities in Basti
city for Basti Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Fatehpur) Limited: ("A2Z Fatehpur")
A2Z Fatehpur was incorporated on 10th November, 2010 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Fatehpur was established for the
development of integrated solid waste management facilities in Fatehpur
city for Fatehpur Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Jaunpur) Limited: ("A2Z Jaunpur")
A2Z Jaunpur was incorporated on 9th November, 2010 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Jaunpur was established for the
development of integrated solid waste management facilities in Jaunpur
city for Jaunpur Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Loni) Limited: ("A2Z Loni") A2Z Loni was
incorporated on 10th November, 2010 as a subsidiary of the A2Z
Infrastructure Limited. A2Z Loni was established for the development
of integrated solid waste management facilities in Loni city for Loni
Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Mirzapur) Limited: ("A2Z Mirzapur")
A2Z Mirzapur was incorporated on 10th November, 2010 as a subsidiary of
the A2Z Infrastructure Limited.
A2Z Mirzapur was established for the development of integrated solid
waste management facilities in Mirzapur city for Mirzapur Municipal
Corporation, Uttar Pradesh.
- A2Z Waste Management (Sambhal) Limited: ("A2Z Sambhal")
A2Z Sambhal was incorporated on 10th November, 2010 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Sambhal was established for the
development of integrated solid waste management facilities in Sambhal
city for Sambhal Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Ranchi) Limited; (A2Z Ranchi")
A2Z Ranchi was incorporated on 01st March, 2011 as a subsidiary of the
A2Z Infrastructure Limited. A2Z Ranchi was established for the
development of integrated solid waste management facilities in Ranchi
city for Ranchi Municipal Corporation, Jharkhand.
- A2Z Waste Management (Ludhiana) Limited: ("A2Z Ludhiana")
A2Z Ludhiana was incorporated on 14th July, 2011 as a subsidiary of the
A2Z Infrastructure Limited. A2Z Ludhiana was established for the
development of integrated solid waste management facilities in Ludhiana
city for Ludhiana Municipal Corporation, Punjab.
- Shree Hari Om Utensils Private Limited ("Shree Hari Om")
A2Z Waste Management (Varanasi) Limited, an indirect subsidiary
company, had acquired 100 % stake in Shree Hari Om Utensils Private
Limited with effect from 30th April, 2012. The Company's main objects
are to carry on the business as manufacturers, processors, sellers,
dealers,importers and exporters in all kinds of ferrous and non-ferrous
metals,particularly stainless steel in the form of all kinds of
utensils, cutlery,hospitalware, canteen.
- Shree Balaji Pottery Private Limited ("Shree Balaji")
A2Z Waste Management (Moradabad) Limited, an indirect subsidiary
company, had acquired 100% stake in Shree Balaji Pottery Private
Limited with effect from 30th April, 2012. The Company's main objects
are to manufacture, produce, buy, sell, dispose of and deal in all kind
of glassware, cups, saucers, plates, crockery, fre bricks, fre blocks,
potteries, refectories, earthen and pottery works of all kinds, glass,
sand, silica, soda, potash, lime and chemicals and substance of all
kinds and all the residuary products resulting from the manufacture of
glass and pottery and other substances to carry on all the allied
business that are usually or may be conveniently carried on by the
Company.
- A2Z Waste Management (Haridwar) Private Limited: ("A2Z Haridwar")
A2Z Infrastructure Limited had acquired 100 % stake in Mahrishi Bjijlee
Private Limited on 17th November, 2011. The name and object of the
Company were changed with effect from 21st November, 2011 and the new
name of the Company is A2Z Waste Management (Haridwar) Private Limited.
The Company is a Special Purpose Vehicle Company for development of
integrated solid waste management facilities in Haridwar city for Nagar
Nigam Haridwar, Uttarakhand and is engaged in the business of
collection, segregation, and transportation of municipal solid wastes
on Design, Procure, Renovate, Operate, Maintain and Transfer (DPROMT)
or on commercial basis and also dispose of the Municipal solid waste at
the designated sites, implement a scientific solid waste management
system in the City of Haridwar as per the guidelines issued by Nagar
Nigam Haridwar, Uttarakhand.
- A2Z Waste Management (Dhanbad) Private Limited: ("A2Z Dhanbad")
A2Z Infrastructure Limited had acquired 100 % stake in Mahanadi Bjijlee
Private Limited on 28th October, 2011. The name and object of the
Company were changed with effect from 15th November, 2011 and the new
name of the Company is A2Z Waste Management (Dhanbad) Private Limited.
The Company is a Special Purpose Vehicle Company for development of
integrated solid waste management facilities in Dhanbad Municipal
Corporation, Jharkhand, and is engaged in the business of collection,
segregation, and transportation of municipal solid wastes on Design,
Procure, Renovate, Operate, Maintain and Transfer (DPROMT) or on
commercial basis and also dispose of the Municipal solid waste at the
designated sites, implement a scientific solid waste management system
in the City of Dhanbad as per the guidelines issued by Dhanbad
Municipal Corporation, Jharkhand.
- A2Z Waste Management (Jaipur) Limited ("A2Z Jaipur")
A2Z Infrastructure Limited, a subsidiary company has incorporated a
subsidiary company with the name and style of A2Z Waste Management
(Jaipur) Limited which is a Special Purpose Vehicle Company for
development of integrated solid waste management facilities in Jaipur
city for Nagar Nigam Jaipur, Rajasthan. A2Z Infrastructure is having
80% stake and the Company is having 20% stake in it. The company was
incorporated on 10th July, 2012 with the main object of carrying on the
business of collection, segregation, and transportation of municipal
solid wastes on Design, Build, Own, Operate and Transfer (DBOOT) basis
or on commercial basis and also dispose of the Municipal solid waste at
the designated sites, implement a scientific solid waste management
system in the City of Jaipur as per the guidelines issued by Nagar
Nigam Jaipur, Rajasthan.
- A2Z Mayo SNT Waste Management (Nanded) Private Limited ("A2Z Nanded")
A2Z Infrastructure Limited, a subsidiary company has incorporated a
subsidiary company with the name and style of A2Z Mayo SNT Waste
Management (Nanded) Private Limited which is a Special Purpose Vehicle
Company for processing & disposal of Municipal Solid Waste for Nanded
Waghala City Municipal Corporation, Nanded, Maharashtra. A2Z
Infrastructure is having 60% stake and M/s MAYO SNT Infrastructure
Private Limited is having 40% stake in it. The company was
incorporated on 7th August, 2012 with the main object of carrying on
the business of processing and disposing of the Municipal solid waste
at the designated sites, implement a scientific solid waste management
system in the City of Nanded as per the guidelines issued by Nanded
Waghala City Municipal Corporation, Nanded, Maharashtra.
- A2Z Dataserv Limited ("A2Z Dataserv")
A2Z Dataserv Limited is a direct subsidiary of A2Z E Waste Management
Limited and was incorporated on 15th December, 2011. A2Z Dataserv is
engaged in the business of, whether within or outside India, of
managing, processing and scientific disposal of electronic waste (which
includes computer waste and electronic products) and all other types of
waste, including collection, de-manufacturing, remarketing and
recycling, collection, storage, dismantling, segregation transportation
trading, processing, extraction of valuable metals, reuse and
recycling, treatment and disposal of all types of electronic waste and
hazardous waste and to bid for obtaining rights to manage electronic
waste and related projects.
- A2Z Waste Management Private Limited ("A2Z Waste")
A2Z Waste Management Private Limited is a wholly owned subsidiary of
A2Z Singapore Waste Management Holdings Private Limited. A2Z Singapore
has acquired 100% stake in A2Z Waste with effect from 16th January,
2012. The Company is engaged in the business of collection,
segregation, and transportation of municipal solid wastes on Design,
Renovate, Operate, Maintain and Transfer (DPROMT) or on commercial
basis for Municipal Corporations/ Local authorities/ Govt. Agencies and
Semi Govt. Agencies and to dispose municipal solid waste at designated
sites, implement a scientific solid waste management system as per
guideline issued by Municipal Corporation Local authority/ Govt. Agency
and Semi Govt. Agency or on such innovative commercial collection
system.
- A2Z Dataserv JLT
A2Z Dataserv Limited has incorporated a wholly owned subsidiary company
in the Dubai Multi Commodities Centre in Dubai à United Arab Emirates
with the name and style of A2Z Dataserv JLT on 31st July, 2012. The
company shall trade in used Electrical and Electronic Appliances.
EXEMPTION UNDER SECTION 212 FOR SUBSIDIARIES
As per section 212 of the Companies Act, 1956 we are required to attach
Balance Sheet, P & L A/c, Director's Report and Auditor's Report of the
Subsidiary companies with the Balance Sheet of the Company. Ministry
of Corporate Affairs vide its Circular No: 51/12/2007-CL-III dated 8th
February, 2011, has, subject to compliance with certain conditions,
granted general exemption to the companies from applicability of
Section 212 of the Companies Act, 1956.
The members of the Board of Directors of the Company vide resolution
passed in their meeting has decided not to attach the Balance Sheet, P
& L A/c, Director's Report and Auditor's Report of the Subsidiary
companies with the Balance Sheet of the Company and decided to complied
the provisions of the said Circular, i.e. the consolidated Financial
Statement of the Company for the Financial Year ended 31st March, 2012
duly audited by Statutory Auditors is included in the Annual Report.
The Annual Accounts of these subsidiaries and the related detailed
information will be made available to any Member of the Company/ its
subsidiaries seeking such information at any point of time and are also
available for inspection by any Member of the Company/its subsidiary
(ies) at the Registered Office of the Company/its subsidiaries.
Further Pursuant to the Listing Agreement with the Stock Exchanges and
the general exemption granted by the Ministry of Corporate Affairs, the
Consolidated Financial Statements of the Company, including the
financial details of all the subsidiary companies, which forms part of
the Annual Report, has been prepared in accordance with the Accounting
Standards issued by the Institute of Chartered Accountants of India.
15. INTERNAL CONTROL SYSTEMS
The Company has a proper, efficient & adequate internal control system.
It ensures that all the assets are safeguarded and protected against
loss from unauthorized use or disposition and the transactions are
authorized, recorded and reported correctly.
An effective programme of internal audit and management review
supplements the process of internal control. Properly documented
policies, guidelines and procedures are laid down for this purpose. The
internal control system has been designed so as to ensure that the
financial and other records of the Company are reliable for preparing
the financial and other statements and for maintaining accountability of
assets of the Company.
The Company has also constituted an Audit Committee comprising of 4
(Four) professional qualified directors, who regularly interact with the
Statutory Auditors and Internal Auditors in dealing with the matters
specified within its terms of reference. The Committee mainly deals
with accounting matters, financial reporting and internal controls.
16. AUDIT COMMITTEE RECOMMENDATION
During the year under review there was no such recommendation of the
Audit Committee which was not accepted by the Board. Hence there is no
need for disclosure of the same in this report.
17. RISK MANGEMENT SYSTEM
Your Company follows a comprehensive & effective system of Risk
Management. The Company has adopted a procedure for risk assessment and
its minimization. It ensures that all the risks are timely identified
and mitigated in accordance with the well structured Risk Management
process. The Board of directors & the Audit Committee periodically
review the Risk management process.
18. PUBLIC DEPOSITS
During the year under review the company has not accepted any deposit
from public within the meaning of section 58A of the Companies Act,
1956 and rules made there under.
19. AUDITORS AND AUDITOR'S REPORT
M/s. Walker Chandiok & Co. Chartered Accountants, Statutory Auditors of
the Company will hold office up to the conclusion of the ensuing Annual
General Meeting and being eligible have offered themselves for
re-appointment.
On recommendation of the Audit Committee the Board has suggested the
re-appointment of M/s Walker, Chandiok & Co., Chartered Accountants as
Statutory Auditors. M/s Walker, Chandiok & Co., Chartered Accountants,
if appointed by members as Statutory auditor shall hold office from the
conclusion of ensuing Annual General Meeting up to the next Annual
General Meeting of the Company. A Certificate has been received from
them as required under section 224(1B) of the Companies Act, 1956 to
the effect that their appointment, if made, would be within the limits
specified in the said section.
The auditor's report presented by M/s Walker Chandiok & Co., Statutory
Auditors on the accounts of the company for the financial year ended
31st March, 2012 is self-explanatory and requires no comments and the
Management replies to the audit observations are as under:
Explanation to para 5 of Auditor's report on Standalone Financials of
A2Z Maintenance & Engineering Services Limited & para 5 of Auditor's
report on Consolidated Financials of A2Z Maintenance & Engineering
Services Limited, its subsidiaries and joint ventures.
a) The Company has outstanding recoverable of Rs 64.38 Million and Rs
83.07 Million being deductions proposed/ made by the respective
customers on invoices raised by Company for services rendered, price
escalations on certain supply items and certain other items. In one of
the cases, involving amount of Rs 64.38 Million, the Company had fled
an application with the High Court for appointment of arbitrator in
response to which the high court had appointed an arbitrator to settle
the dispute. In the other case, involving outstanding receivables of Rs
83.07 Million, the Company has fled a Special leave petition with the
Hon'ble Supreme Court against the Hon'ble High Court's order for
appointment of arbitrator, accordingly the Hon'ble Supreme Court has
given stay on the proceedings of the arbitrator appointed by the
customer. In the latter case, subsequent to March 31, 2012, the Company
has recovered Rs 22.43 Million from the customer, however, no
settlement has been arrived at with the customer.
b) One of the subsidiary company, A2Z Infrastructure Limited, has
outstanding recoverable of Rs 76.27 Million, being receivable from a
customer for collection and transportation of municipal solid waste.
The subsidiary company has fled a writ petition with High Court of
Patna for recovery of dues. An interim order was passed directing the
customer to release 75% of the amount recoverable. Against the interim
order the customer has fled Letters Patent Appeal ('LPA') which has
been dismissed, confirming the interim order. Subsequently, the writ
petition has been allowed by the Court and customer has been directed
to pay the entire amount along with the interest at the rate of 8% p.a
from the due date.
The management, based on legal advice, believes that the outcome of
above legal matters is likely to be in its favor and has thus classified
the said amounts as recoverable in the books and no adjustments have
been made with respect of the same in the financial results.
Explanation to para 4 of Auditor's report on Consolidated Financials of
A2Z Maintenance & Engineering Services Limited, its subsidiaries and
joint ventures.
During the year, the subsidiary company, A2Z Infrastructure Limited,
has raised Rs 454.66 Million as external commercial borrowings (ECB)
from banks for two municipal solid waste projects. However, pending the
execution of these two projects Rs 373.10 Million has been utilised for
capital expenditure of other projects in the subsidiary company and Rs
75.37 Million has been utilized for other business purposes. The
subsidiary company intends to take appropriate steps to ensure the
necessary compliances.
Explanation to Point No. (ix) (a) of the Annexure to the Auditor's
Report on Standalone Financials of A2Z Maintenance & Engineering
Services Limited
The Company has been depositing statutory dues regularly with the
appropriate authorities though there has been a slight delay in a few
cases which will be taken care in future.
Explanation to Point No. (xxi) of the Annexure to the Auditor's Report
on Standalone Financials of A2Z Maintenance & Engineering Services
Limited
During the year theft by unidentified individual of materials amounting
to Rs. 38.56 Millions and of cash amounting to Rs 0.02 Million has been
reported against which the company has fled an insurance claim with the
Insurance Company and received a sum of Rs. 6.51 Millions We have taken
adequate safeguards to prevent theft of materials.
Branch Audit:
The Company has a branch office in Uganda to represent and to do the
businesses of Company over there. Further the accounts of the said
branch has been reviewed by M/s Hitesh Mehta & Co., Certified Public
Accountants and has been consolidated in the Company's financials.
20. PARTICULARS OF EMPLOYEES
The information required under the provisions of Section 217 (2A) of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975, as amended, is set out in the Annexure II to
the Director's Report.
21. CORPORATE GOVERNANCE REPORT
The company is regularly complying with the requirements of Corporate
Governance as stipulated under clause 49 of the listing agreement. A
detailed report on compliance of corporate governance along with
Management Discussion & Analysis forms part of the Annual Report.
The requisite Certificate from the Practicing Company Secretary Mr.
Ankit Bhatia, a partner of M/s. DR Associates, Company Secretaries
regarding Compliance with the conditions of Corporate Governance as
stipulated in Clause 49 is annexed as Annexure to Corporate Governance
Report.
22. DIRECTOR'S RESPONSIBILITY STATEMENTS:
In accordance with the provisions of section 217(2AA) of the Companies
Act, 1956, your directors state that:
1. In the preparation of the annual accounts, applicable accounting
standards have been followed along with proper explanation relating to
material departures.
2. Accounting policies selected were applied consistently. Reasonable
and prudent judgments and estimates are made so as to give a true and
fair view of the state of affairs of the Company as on 31st March, 2012
and of the Profits of the Company for the year ended on that date.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
4. The annual accounts of the company have been prepared on a going
concern basis.
23. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Particulars required to be furnished pursuant to section 217(1)(e) of
the Companies act, 1956 read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988: '
i. Part A and B of the Rules pertaining to conservation of energy and
technology absorption are not applicable to the Company.
ii. Foreign Exchange earnings and outgo: Earnings: Revenue from
Engineering Services à Rs. 495.25 Million
Outgo - Expenditure in
Foreign Currency à Rs. 5.21 Million
CIF value of Imports à Rs. 49.86 Million
24. ACKNOWLEDGEMENT
Your Directors would like to express their gratitude and appreciation
for the co-operation and support extended by the Bankers, Vendors,
Investors, Business Associates and various Government
Agencies/Authorities during the year under review. Your Directors also
wish to place on record their deep sense of appreciation for the
committed services and untiring efforts of the executives, staff and
workers of the Company at all the levels.
For and on behalf of Board of Directors
Sd/-
Date : August 23, 2012 (Surender Kumar Tuteja)
Place: Gurgaon Chairman
Mar 31, 2011
To,
The Members,
The directors have pleasure in presenting the 10th Annual Report on
the affairs of the Company together with the Audited Accounts for the
Financial Year ended on 31st March, 2011.
1. FINANCIAL RESULTS & PERFORMANCE:
The Operating and financial results on Standalone and Consolidated basis
for the financial year ended 31st March, 2011 are as follows:
(Rs.in Million)
Standalone Consolidated
2010-11 2009-10 2010-11 2009-10
Particulars Current
Year Previous
Year Current
Year Previous
Year
Income from Operations 11,028.71 11,183.93 13,443.86 12,148.95
Add: Other Income 134.59 57.86 155.09 60.11
Total Income 11,163.30 11,241.79 13,598.95 12,209.06
Profit before Interest,
Tax & Depreciation 2,059.27 1,949.86 2,192.06 1,986.17
Less: Interest 530.15 461.86 618.28 489.37
Profit before Tax & Depreciation 1,529.12 1,488.00 1,573.78 1,496.80
Less: Depreciation/Amortisation 111.84 24.46 194.71 35.77
Profit before Tax 1,417.28 1,463.54 1,379.07 1,461.03
Less : Tax Expenses 476.93 514.50 498.27 533.92
Net Profit after Tax 940.35 949.04 880.80 927.11
Less : Extraordinary Item 86.83 - 86.83 -
Net Profit after Tax & before
Minority Interest 853.52 949.04 793.97 927.11
Less: Share in Minority Interest - - 22.79 3.72
Net Profit After Tax &
Minority Interest 853.52 949.04 771.18 923.39
Balance brought forward from
previous year 2,249.70 1,300.66 2,217.52 1,294.13
Net Profit available for
appropriation 3,103.22 2,249.70 2,988.70 2,217.52
Proposed dividend on
Equity Shares 148.36 - 148.36 -
Tax on Dividend 24.64 - 24.64 -
Transfer to General Reserve 64.01 - 64.01 -
Surplus carried to
Balance Sheet 2,866.21 2,249.70 2,751.69 2,217.52
Standalone:
- During the year under review, the Company has achieved total income
of Rs. 11,163.30 Million as against Rs. 11,241.79 Million in the
previous year. The company has made EBIDTA of Rs. 2,059.27 Million as
against Rs. 1,949.86 Million in the previous year showing an increase
of 5.61%. The company has made net profit after tax of Rs. 940.35
Million as against Rs. 949.04 Million in the previous year despite
tough competition in the Market.
- The Net Worth of the Company has increased from Rs. 4,244.85 Million
as at the end of the previous year to Rs. 11,386.86 Million as at the
end of the current year.
- The Debt Equity ratio of the Company has come down to 0.29 as at the
end of the current year as compared to 0.83 as at the end of the
previous year.
Consolidated:
- The Consolidated total income of the Company for the current financial
year is Rs. 13,598.95 Million as against Rs. 12,209.06 Millions in the
previous year showing an increase of 11.38%. The company has made
consolidated EBIDTA of Rs 2,192.06 Million as against Rs. 1,986.17
Million in the previous year showing an increase of 10.37% The Company
on consolidated basis has made net profit after tax before minority
interest and extra ordinary items of approximately Rs. 880.80 Million
as compare to Rs. 927.11 Million in the previous year.
- The consolidated Net Worth of the Company has increased from Rs.
4,212.67 Millions as at the end of previous year to Rs. 11,520.98
Millions as at the end of the current year.
- The consolidated Debt Equity ratio of the Company has come down to
0.41 as at the end of the current year compared to 0.96 as at the end
of previous year.
2. DIVIDEND
The Board has recommended a dividend of Rs. 2/-per equity share on
equity share of Rs. 10/- each i.e @ 20% on the paid up equity share
capital for the financial year ended 31st March, 2011, amounting to Rs.
148.36 Million and dividend distribution tax of Rs. 24.64 Million
The dividend, if declared at the ensuing Annual General Meeting, will
be paid on or before the 30th day from the date of declaration of
dividend i.e. 29th September, 2011
o For shares held in physical form - to those members whose names will
appear in the Register of Members on the close of the day on 23rd
September, 2011 after giving effect to all valid transfers in physical
forms lodged with the Company or its RTA on or before 23rd September,
2011. o For shares held in dematerialised form - to those beneficiaries,
whose names are furnished by the National Securities Depository Limited
(NSDL) and Central Depository Services Limited (CDSL) as beneficial
owner on 23rd September, 2011
3. TRANSFER TO RESERVE
Out of net profits available for appropriation aggregating to Rs.
3,103.22 Millions on standalone basis for the financial year ended 31st
March, 2011 an amount of Rs. 64.01 Million has been transferred to the
General Reserve
4. NATURE OF OPERATIONS
Leveraging our years of experience in providing Facility Management
Services (FMS) and Engineering, Procurement and Construction (EPC)
services, the Company, is now expanding into being an Infrastructure
Company that is building businesses with annuity revenue streams in the
areas of Clean and Green energy.
In the EPC business, our main area of operation is the Power
Distribution segment, though we also provide services in the Power
Transmission segment, to Power Generation companies and to other
verticals such as Telecommunication. In the Power Distribution segment,
we are helping build power lines to bring power to areas which lack
electricity. We are also helping to reduce the Technical and Commercial
losses.
Additionally, we are now building businesses that include the
following: (i) generating power from renewable energy sources such as
biomass and fuel derived from household waste (Renewable Energy
Generation); (ii) providing municipal solid waste (MSW) management
services which involve collection of waste and its scientific processing
and disposal like recycling, manufacturing of organic compost and green
fuel such as Refused Derived Fuel (RDF); and (iii) developing
information technology (IT) solutions for power utilities (Power IT
Solutions). Through multi year contracts, the MSW and Renewable Energy
Generation businesses should provide stable revenue streams in the
years to come. Our business operations are geographically spread across
India and conducted through the Company and its direct and indirect
subsidiaries.
5. SUCCESSFUL LISTING OF SHARES WITH BSE AND NSE
The Company had undertaken the Intial Public Offer ('IPO') through the
100% book building route. The IPO opened for subscription on 8th
December, 2010 and closed on 10th December, 2010. The IPO comprised a
fresh issue of 16,845,189 equity shares of face value Rs 10 each, at a
premium of Rs 390 per equity share to the general public and 31,380
equity shares of face value Rs 10 each, at a premium of Rs 370 per
equity share to the employees aggregating to Rs. 6,750.00 Million by
the company and an offer for sale of 2,531,181 equity shares of Rs. 10
each, at a premium of Rs. 390 each, aggregating Rs. 1,012.47 Million,
by the selling shareholders.
The Equity Shares of your company got listed with Bombay Stock Exchange
Limited and National Stock Exchange of India Limited on 23rd December,
2010.
6. CAPITAL STRUCTURE
The paid up Share Capital of the Company was Rs. 573.01 Millions
divided into 57,301,125 Equity Shares of Rs. 10 each before IPO. After
this issue, the paid up share capital of the company has increased to
Rs. 741.78 Millions (approximately) divided into 74,177,694 Equity
Shares of Rs. 10 each
7. CHANGE IN OBJECT CLAUSE OF MEMORANDUM OF ASSOCIATION
The Reserve Bank of India (RBI) while granting its approval for the IPO
vide letters no. FE.CO.FID No./11090/10.21.209/2010-11 dated 3rd
November 2010 and FE.CO.FID.No./11849/10.21.209/2010-11 dated 11th
November, 2010, has suggested that the Company shall seek shareholders
approval to amend clause 6 of the main objects of the Company's
Memorandum of Association and delete references to the words "atomic
power" appearing therein. We have been directed by the RBI to amend
this clause within 90 days from the date of commencement of listing and
trading of the Equity Shares on the Stock Exchanges. We had confrmed to
the RBI that the Company neither undertake any activity in the atomic
power sector nor have we announced any plans to do so. The Company
conducted the postal ballot during the year and amended the object
clause of Memorandum of Association by deleting the words atomic power.
The notice of postal ballot was sent to all the members on 14th
February, 2011 and the result was declared on 18th March, 2011
8. ALTERATION IN ARTICLES OF ASSOCIATION
In order to make the Initial public offer of the equity shares, the
Articles of Association of the Company were amended to incorporate the
necessary provisions of the listing agreements by the members of the
Company in the Extra Ordinary General Meeting held on 8th June, 2010 by
way of passing of Special Resolution.
9. BOARD OF DIRECTORS
a) Composition of Board:
The Board comprises of Nine (9) Directors and Two (2) Alternate
Directors with a Non-executive Independent Chairman, Two (2) Executive
Directors one of whom is Managing Director, Four (4) Non-executive Non
Independent Director and Two (2) Non Executive Independent Directors
b) Change in Composition of Board:
- Mr. Vinod Sagar Wahi and Mr. Rajeev Thakore who were appointed as
Additional Director were regularized as Director by the members of the
Company in the last Annual General Meeting held on 7th December, 2010
- Mr. Anshuman Goenka, Alternate Director to Mr. Brij Raj Singh vacated
the office of director on 25th July, 2011 on the return of Mr. Brij Raj
Singh in the state of Haryana where the meetings of board of directors
are ordinarily held. The Board places on record its gratitude for
services rendered by Mr. Goenka during his tenure as a member of Board
of Directors.
- Mr. Arjun Balan has been appointed as an Alternate Director to Mr.
Brij Raj Singh on 29th day of August, 2011 by the Board of Directors.
c) Retirement by Rotation
In accordance with the requirements of the Companies Act, 1956 and
Articles of Association of Company, Mr. Vinod Sagar Wahi and Mr. Rajeev
Thakore, Directors are liable to retire by rotation and being eligible,
offers themselves for reappointment.
10. PAYMENT OF COMMISSION TO NON EXECUTIVE DIRECTORS
The members of the Company in their meeting held on 7th December, 2010
authorized the Board of Directors of the Company to approve the payment
of commission to Directors, being not in the whole-time employment of
the Company or not the Managing Director, for three years commencing
from Financial Year 2010-11 for an amount not exceeding one percent of
the net profits of the Company over and above the sitting fee subject to
availability of adequate profits in Company.
As the Company is having adequate profits, the Board in its meeting held
on 30th May, 2011 approved payment of commission of Rs. 1.20 Millions
each to Mr. Surender Kumar Tuteja, Mr. Vinod Sagar Wahi and Mr. Rajeev
Thakore, Non Executive /Independent Directors of the Company, amounting
Rs. 3.60 Million within the overall limit of 1% of net profits, for the
Financial Year ended 31st March, 2011
11. MAJOR ACQUISITIONS
During the financial year under review the Company has acquired the
following Firms/Companies:
a) Acquisition of Business of Surender Chowdhury & Brothers Pursuant to
a business transfer agreement dated 1st May, 2010 among the Original
Owners and the Company, the Company purchased as a going concern the
entire business of M/s Surender Chowdhury & Brothers, a partnership
firm, engaged in the business of construction of electrical substations
and railway electrification work.
b) Acquisition of Business of Mohd. Rashid Contractors Pursuant to a
business transfer agreement dated 10th June, 2010 among the Original
Owners and the Company, the Company purchased as a going concern the
business of M/s Mohd. Rashid Contractors, a partnership firm, engaged in
the business of telecom cable laying, civil works and other
engineering, procurement and construction work.
c) Acquisition of Business of En-Tech Engineers and Contractors
Pursuant to a business transfer agreement dated 10th June, 2010 among
the Original Owners and the Company, the Company purchased as a going
concern the business of M/s En-Tech Engineers and Contractors, a
partnership firm, engaged in the business of telecom cable laying, civil
works and other engineering, procurement and construction work.
d) Acquisition of Star Transformers Pursuant to a memorandum of
understanding dated 3rd August , 2010 (the "MoU") among the Original
Owners and the Company, the Company acquired 1% partnership of Star
Transformers, a partnership firm, engaged in the business of
manufacturing transformers. Later on the said Firm was converted into a
private limited company under Part IX of the Companies Act, 1956 with
effect from 21st January, 2011 and subsequently your Company has
maintained 51% stake in said Company.
e) Acquisition of Mansi Bijlee & Rice Mills Private Limited
The Company has acquired 100% shareholding of Mansi Bijlee & Rice Mills
Private Limited (Previously Known as Mansi Bijlee Private Limited)
which is engaged in the business of generating, distributing,
transmitting, supplying and dealing in any manner in electricity and
all forms of energy and to generate power through conventional and/ or
non-conventional sources, including biomass and waste material. It has
become the wholly owned subsidiary of the Company with effect from 20th
July, 2010.
f) Acquisition of Mirage Bijlee Private Limited
The Company has acquired 100% shareholding of Mirage Bijlee Private
Limited which is engaged in the business to generate, accumulate,
transmit, commission, maintain, distribute, buy, sell, supply and deal
in any manner in electricity and all forms of energy and to generate
power through conventional and/or non-conventional sources including
biomass. It has become the wholly owned subsidiary of the Company with
effect from 15th September, 2010.
g) Acquisition of Madhya Bijlee Private Limited
The Company has acquired 90% shareholding of Madhya Bijlee Private
Limited which is engaged in the business to generate, accumulate,
transmit, commission, maintain, distribute, buy, sell, supply and deal
in any manner in electricity and all forms of energy and to generate
power through conventional and/or non-conventional sources. It has
become the subsidiary of the Company with effect from 18th October,
2010.
h) Acquisition of IL&FS Property Management & Services Limited (IPMSL)
by A2Z Infraservices Limited, a subsidiary of the Company Pursuant to
agreement dated 27th September, 2010 A2Z Infraservices Limited , a
subsidiary of the Company has acquired 100% shareholding of IL&FS
Property Management & Services Limited which is engaged in the business
of building, property and office managers and of providing, supplying,
maintaining and operating administrative, secretarial and office
services, facilities, conveniences, bureau and the like and to provide
or procure the provision by others of every and any service, need, want
or requirement of any business nature required by any person, company,
corporate body, trust, association, society or organization whatsoever
in or in connection with any business carried on by them. It became
indirect subsidiary of the Company with effect from 1st October, 2010
and wholly owned subsidiary of A2Z Infraservices Limited.
i) Acquisition of Chavan Rishi International Limited The Company has
acquired 100% shareholding of Chavan Rishi International Limited which
is engaged in business of building, contracting, establishing, own,
purchase, sell, take on lease, acquire hold or maintain and manage
industrial, commercial or residential buildings, apartment, hotels,
motels, restaurant etc. It has become the subsidiary of the Company
with effect from 2nd March, 2011. 12. A2Z STOCK OPTION PLAN, 2010 Your
Company pursuant to a special resolution of the shareholders of the
Company at an extraordinary general meeting held on 30th March, 2010
adopted the Employee Stock Options Plan ("A2Z ESOP") for the grant of
options.
The said option was granted on 2nd June, 2010 ("Grant Date") and the 20
% of the granted option shall be vested to each of the eligible
employee on each anniversary of the Grant Date.
The plan shall be administered and supervised by the
Remuneration-cum-Compensation Committee under the powers delegated by
Board. Each option shall entitle the Option Grantee to apply for and
get Equity Shares of the Company transferred to his account on exercise
of option. The maximum number of options that can be granted to any
employee in any year under the A2Z ESOP shall be less than 5% of the
issued share capital of the Company (excluding any outstanding warrants
or other securities convertible into Equity Shares) at the time of
grant of options, subject to the overall ceiling of 2,865,056 options
in the aggregate. Auditor's Certificate under clause 14.1 of SEBI (ESOP)
Guidelines 1999 shall be placed at ensuing Annual General Meeting.
Complete detail & Status of A2Z ESOP as on 31st March, 2011 is attached
as Annexure I to Director's Report.
13. CREDIT RATING
CARE has assigned 'CARE A' (Single A) to long term bank facilities of
Rs. 6,880 Million of your Company as per their rating letter dated 04th
January, 2011 and respective rationale rating letter dated 10th
January, 2011. This rating is applicable to facilities having tenure of
more than one year. Facilities with this rating are considered to offer
adequate safety for timely servicing of debt obligations. CARE has also
assigned 'PR1' (PR One) rating to Commercial Paper /short term debt
(Carved out of sanctioned working capital limits) of the Company as per
their rating letter dated 6th October, 2010. Further CARE has assigned
PR1 (PR One) rating to the short term facilities of Rs. 17,000 Million
of your Company as per their rating letter dated 04th January, 2011 and
respective rationale rating letter dated 10th January, 2011. This
rating is applicable to facilities having a tenure up to one year.
Facilities with this rating are considered to have strong capacity for
timely payment of short term debt obligations and carry lowest credit
risk. 14. UTILIZATION OF ISSUE PROCEEDS Pursuant to the provisions of
Clause 43 of Listing Agreement with the Exchanges, the utilization of
the net proceeds of IPO as on 31st March, 2011 are as follows:
(Rs in Million)
Particulars of funds utilised for Objects as per Actual Unutilized
prospectus utilization funds
Investment in three biomass
(bagasse)-based power cogeneration 680.31 543.20 137.11
projects of 15 MW each in the State
of Punjab
Investment in five biomass-based power
generation projects of 15 MW 1,200.00 88.60 1,111.40
each in the State of Rajasthan
Investment in subsidiaries
(i) Share capital in A2Z Infrastructure
Limited and its subsidiaries for 673.42 673.42 -
the 15 MW biomass-based power
generation project in Kanpur and
for MSW projects
(ii) Share capital in Mansi Bijlee &
Rise Mills Private Limited, the subsid- 1,023.32 78.26* 945.06
iary that will implement one rice mill
and associated rice-husk based biomass
power generation project in the State
of Punjab
Repayment of loan granted by L&T
Infrastructure Finance Limited to 416.67 416.67 -
the Company
Working capital requirements 1,250.00 1,250.00 -
General corporate purposes 1,128.20 1,128.20 -
Share issue related expenses (on cash
basis) 378.08 141.77 236.31
Total 6,750.00 4,320.11 2,429.89
* Represent Share Application Money given to Mansi Bijlee & Rice Mills
Private Limited (Formerly Mansi Bijlee Private Limited), a wholly owned
subsidiary of the Company.
Pending utilization, net proceeds of the IPO have been invested in high
quality interest bearing liquid instruments, including money market
mutual funds and deposits with banks for the necessary duration or for
reducing the working capital facilities being availed by the Company as
mentioned herein below:
(Rs in Million)
Particulars Amount
(a) In Mutual Fund 500.00
(b) In Public issue account with bank (earmarked
against share issue expenses) 200.00
(c ) Utilised against reducing availment in cash
credit accounts with banks 1,729.89
Total 2,429.89
15. VARIATION IN UTILISATION OF IPO PROCEEDS
In the prospectus dated 16th December, 2010, the IPO of the Company was
planned with certain objects, as more particularly stated and described
under section titled "Objects of the Issue" on page 38 of the
Prospectus, as were considered appropriate and necessary by the
management at that point of time.
After IPO there was change in various factors and circumstances which
necessitated a revision in the planned utilization of the net proceeds
of the IPO. The board in its meeting held on 25th July, 2011 decided to
vary the utilization of net IPO proceeds from the objects as were
stated in the Prospectus.
Proposed Variation in utilization of Net IPO Proceeds are as follows:
S. Utilization as Funds
Utilized
till Balance Proposed Utilization
No envisaged in June 25,
2011 Funds
(Rs Particulars Amount
the Prospectus (Rs in
Million) in
Million) (Rs in
Million)
1 Rs. 1,023.32 78.26 945.06 Investment in
Subsidiaries
Millions in the 1. Rs. 180.00 Millions
(excluding Rs.78.26 180.00
Share capital Millions already spent)
in the share
in Mansi capital of Mansi Bijlee
& Rice Mills Private
Bijlee & Rice Limited, a subsidiary,
to part finance
Mills Private the setting up of 20 TPH
Rice Mills and
Limited, the associated rice-husk
based 2MW bio-
subsidiary that mass based power
generation project
will implement each in district
Ferozepur and Tarantarn
one rice mill in the State of Punjab.
and associated 2. Rs. 172.28 Millions in
the share capital of 172.28
rice-husk based A2Z Infrastructure
Limited, a subsidiary,
biomass power to part finance the
setting up of a 10 MW
generation bio-mass based power
plant at Ramraj in
project at Moga the State of Uttar
Pradesh.
in the State of 3. Rs. 936.68 Millions
in the share capital 936.68
Punjab. of A2Z Infrastructure
Limited and its
subsidiaries to part
finance the setting
up of Municipal Solid
Waste Management
2 Rs. 1,200.00 101.54 1,098.46
projects in the cities
of Ghaziabad,
Millions invest- Sambhal, Mirzapur,
Jaunpur, Basti,
ment in five bio- Fatehpur, Loni, Balia,
and Badaun in the
mass-based
State of Uttar Pradesh,
at Ranchi in the
power genera- State of Jharkhand, at
Amravati in the
tion projects of State of Maharashtra,
and at Ludhiana in
15 MW each in the State of Punjab.
the State of Ra- Investment in Company's
own Projects
jasthan.
4.Rs. 410.00 Millions
for acquiring 20% 410.00
stake in A2Z
Infraservices Limited
and Imatek Solutions
Private Limited from
Infrastructure Leasing
& Financial Services
Limited (IL&FS).
5. Rs. 344.56 Millions
to be utilized by the 344.56
3 Rs. 378.08 Mil- 288.51 89.57 Company to part finance
the setting up
lions for issue of 10 MW biomass based
power plants
(IPO) related each at Indore in the
State of Madhya
expenses. Pradesh and at Bellari
in the State of Uttar
Pradesh.
6. Rs. 89.57 Millions
to be utilized by the 89.57
Company for general
corporate purposes.
Total 2,133.09 2,133.09
For this purpose board decided to conduct postal ballot in order to get
consent of the members by way of ordinary resolution. The postal ballot
notices have been sent to members on 29th July, 2011 and the result of
the said postal ballot will be declared on Tuesday, the 30th day of
August, 2011 at the registered office of the Company. Further the
results will be displayed at Company's website i.e. www.a2zgroup.co.in
and shall be intimated promptly to Bombay Stock Exchange and National
Stock Exchange.
After the proposed changes, the utilization of Funds shall be as under:
(Rs. In Million)
Particulars of funds utilized for Total amount to be Total amount to be
financed from the financed from the
proceeds of the
Fresh proceeds of the
Fresh
Issue as per the Issue after
proposed
prospectus changes
Investment in three biomass
(bagasse)-based power 680.31 680.31
cogeneration projects of 15 MW
each in the State of Punjab
Investment in five biomass-based
power generation projects of 1,200.00 101.54
15 MW each in the State of Rajasthan
Investment in two biomass-based
power generation projects of Nil 344.56
10 MW each in the State of
Uttar Pradesh & Madhya Pradesh
Investment in subsidiaries
(i) Share capital in A2Z Infrastructure
Limited for the 15 MW 250.00 250.00
biomass-based power generation
project in Kanpur.
(ii) Share capital in A2Z
Infrastructure Limited and its
subsidiaries 423.42 423.42
for certain MSW projects
(iii) Share capital in Mansi Bijlee
& Rice Mills Private Limited, the 1,023.32 258.26
subsidiary that will implement
rice mill and associated rice-husk
based biomass power generation
project in the State of Punjab
(iv) Share capital in A2Z
Infrastructure Limited for the 10 MW Nil 172.28
biomass-based power generation project
in Uttar Pradesh
(v) Share capital in A2Z Infrastructure
Limited and its subsidiar- Nil 936.68
ies for certain additional MSW projects
Repayment of loan granted by L&T
Infrastructure Finance to the 416.67 416.67
Company
Acquisition of stake held by IL&FS
in A2Z Infraservices Limited Nil 410.00
& Imatek Solutions Private Limited
Working capital requirements 1,250.00 1,250.00
General corporate purposes 1,128.20 1,217.77
Issue (IPO) related expenses 378.08 288.51
Total 6,750.00 6,750.00
16. SHARES HELD IN SUSPENSE ACCOUNT
At the time of public issue 1,035 Equity Shares were transferred to
suspense account as were unclaimed. During the year 810 Equity Shares
have been transferred from suspense account to shareholders. Detail of
Shares in Suspense Account are as follows:
Particulars No. of Cases No. of Shares
Aggregate No. of Shareholders and outstanding
shares in suspense account lying 06 1,035
on December, 2010
Number of Shareholders who approached to issuer
/registrar for transfer of shares 04 810
from suspense account up to 31st March, 2011
Number of Shareholders to whom shares were
transferred from suspense account 04 810
up to 31st March, 2011
Aggregate No. of Shareholders and outstanding
shares in the suspense account 02 225
lying at the end of the year as on 31st
March, 2011
17. SUBSIDIARY COMPANIES
The Company is having following 14 (Fourteen) direct subsidiaries :--
A2Z Infrastructure Limited ("A2Z Infrastructure")
A2Z Infrastructure Limited was incorporated on 22nd March, 2007 with
the name and style of a2z Infrastructure Private Limited as a wholly
owned subsidiary of the Company. With effect from 30th August, 2010,
A2Z Infrastructure became a public limited company under the Companies
Act, 1956. A2Z Infrastructure was established to carry on the business
of collection, segregation and transportation of municipal solid wastes
on design, renovate, operate, maintain and transfer or on commercial
basis for municipal corporations/ local authorities/governmental
authorities.
- A2Z Infraservices Limited ("A2Z Infraservices") A2Z Infraservices
Limited was incorporated on 15th April, 2008 with the name and style of
a2z Infraservices Private Limited as a subsidiary of the Company and
with effect from 30th August, 2010, A2Z Infraservices became a public
company under the Companies Act,1956. A2Z Infraservices was established
to provide backend management services for efficient functioning of
shopping malls, airport, multiplexes, corporate and business
establishments like housekeeping services, security services etc.,
upkeep of railway trains and stations and to provide transportation
services.
- A2Z Powercom Limited ("A2Z Powercom")
A2Z Powercom Limited was incorporated on 28th April, 2008 with the name
and style of a2z Powercom Private Limited as a subsidiary of the
Company and with effect from 30th August, 2010, A2Z Powercom became a
public company under the Companies Act, 1956 . A2Z Powercom was
established to manufacture, produce and distribute power transformers,
transmission line conductors, establish power plants and undertake
associated activities of engineering, drawing, installation and
commissioning in India and abroad.
- A2Z Powertech Limited ("A2Z Powertech")
A2Z Powertech was incorporated on 28th April, 2008 with the name and
style of a2z Powertech Private Limited as a subsidiary of the Company
and with effect from 30th August, 2010, A2Z Powertech became a public
company under the Companies Act,1956. A2Z Powertech was established to
carry on the business of system integrators in the power sector using
IT applications, autoreclousers with magnetic actuators, RMUs, CSS,
sub-station automation, network energy management solution etc.
- Selligence Technologies Services Private Limited ("Selligence")
Selligence was incorporated on 12th August, 2008 as a subsidiary of the
Company. Selligence was established to provide appropriate
cost-effective and efficient technological solutions to accelerate
mplementation of quality ERP for development, and to provide a variety
of efficient and effective services for implementation of development
programs
- Imatek Solutions Private Limited ("Imatek")
Imatek has become the subsidiary of the Company w.e.f 13th August,
2009. Imatek was established to carry on the business of running,
hiring, operating constructing, installing, acquiring, undertaking
promoting, owning and organizing photography and imaging laboratories,
photography and
Imaging studios, developing and printing of photo flms, computerized
digital work, photography and imaging technology in India and abroad.
- Mansi Bijlee & Rice Mills Private Limited("Mansi Bijlee")
Mansi Bijlee was incorporated on 10th June 2010 with name and style of
Mansi Bijlee Private Limited. With effect from 25th October, 2010, the
name of the company was changed to Mansi Bijlee & Rice Mills Private
Limited. Mansi Bijlee was established to carry on the business of
generating, distributing, transmitting, supplying and dealing in any
manner in electricity and all forms of energy and to generate power
through conventional and/or non-conventional sources ncluding biomass
and waste materials. It has become the subsidiary of the Company with
effect from 20th July, 2010.
- A2Z Maintenance Engineering Services (Uganda) Private Ltd.("A2Z
Uganda")
A2Z Maintenance & Engineering Services (Uganda) Private Limited was
incorporated under the laws of the Republic of Uganda on 27th August,
2010 as a wholly owned subsidiary of the Company. A2Z Uganda was
established to carry on the business to generate, accumulate, transmit,
commission, maintain, distribute, purchase, sell and supply electricity
power or any other energy from conventional/non-conventional energy
sources on a commercial basis and to construct, lay down, establish,
operate and maintain power/energy generating stations including
buildings, structures, works, machineries equipments, cables and to
undertake or to carry on the business of managing, owing, controlling
erecting, commissioning, operating, running, leasing or transferring to
third person/s, power plants and plants based on conventional or
non-conventional energy sources, bio-mass, solar energy plants, wind
energy plants, mechanical, electrical, hydel and to deal all kinds of
energy systems and products.
- Mirage Bijlee Private Limited (" Mirage Bijlee") Mirage Bijlee was
incorporated on 11th June, 2010. Mirage Bijlee was established to carry
on in India or abroad the business to generate, accumulate, transmit,
commission, maintain, distribute, buy, sell, supply and deal in any
manner in electricity and all forms of energy and to generate power
through conventional and/or non-conventional sources. It has become a
subsidiary of the Company with effect from 15th September, 2010.
- Madhya Bijlee Private Limited ("Madhya Bijlee") Madhya Bijlee was
incorporated on 14th June, 2010. Madhya Bijlee was established to carry
on in India or abroad the business to generate, accumulate, transmit,
commission, maintain, distribute, buy, sell, supply and deal in any
manner in electricity and all forms of energy and to generate power
through conventional and/ or non-conventional sources. It has become a
subsidiary of the Company with effect from 18th October, 2010.
- Star Transformers Private Limited ("Star Transformers")
Star Transformers was Incorporated on 21st January, 2011 as a Part IX
Company under the provision of Companies Act, 1956 and subsequently it
became a subsidiary of the Company. The company basically deals in,
either directly or in partnership, high tension and low tension
transformers of all types and also carries on the business of service,
execution, repair or otherwise of power distribution under various
schemes.
- Chavan Rishi International Limited
During the year under review, Chavan Rishi International Limited a
company engaged in the business of build, contract, establish, own,
purchase, sell, take on lease, acquire hold or maintain and manage
industrial, commercial or residential buildings, apartment, hotels,
motels, restaurant etc. It has become the wholly owned subsidiary of
the company with effects from 2nd March, 2011.
- A2Z E Waste Management Limited
A2Z E waste Management Limited was incorporated on 10th February, 2011
as a subsidiary of the Company . The company is engaged in the business
of managing, processing and scientific disposal of Computer waste,
electronic waste and all other types of waste, including collection,
de-manufacturing, remarketing and recycling, collection, storage,
dismantling, segregation transportation trading, processing, extraction
of valuable metals, reuse and recycling, treatment and disposal of all
types computer and electronic waste (E-waste), hazardous waste and to
bid for obtaining rights to implement electronic waste and related
projects. - A2Z Water Solutions Limited
A2Z Water Solutions Limited was incorporated on 10th February, 2011 as
a subsidiary of the Company. The company provides integrated water and
waste water solutions including ways to control water pollution through
various technologies and is basically engaged in the feld of water and
waste water management.
INDIRECT SUBSIDIARIES
The Company is having following 16 (Sixteen) indirect subsidiaries :-
- CNCS Facility Solutions Private Limited: ("CNCS") CNCS was
incorporated on 22nd November, 2006 with object to own, maintain, set
up, run, clean, service, manage, facilitate and commercialize services
in all types of residential, commercial, industrial, entertainment and
amusement, infrastructural, public and private utility services. It has
become the indirect subsidiary of the company with effect from 21st
October, 2009 and subsidiary of Imatek Solutions Private Limited.
- IL & FS Property Management & Services Limited: ("IPMSL")
IPMSL was incorporated on 26th November, 1991 with object to carry on
the business of building, property and office managers and of providing,
supplying, maintaining and operating administrative, secretarial and
office services, facilities, conveniences, bureau and the like and to
provide or procure the provision by others of every and any service,
need, want or requirement of any business nature required by any
person, company, corporate body, trust, association, society or
organization whatsoever in or in connection with any business carried
on by them. It has become indirect subsidiary of the company with
effect from 1st October, 2010 and wholly owned subsidiary of A2Z
Infraservices Limited.
- A2Z Waste Management (Aligarh) Limited: ("A2Z Aligarh")
A2Z Aligarh was incorporated on 4th December, 2009 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Aligarh was established for the
development of integrated solid waste management facilities in Aligarh
city for Aligarh Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Varanasi) Limited: ("A2Z Varanasi")
A2Z Varanasi was incorporated on 4th December, 2009 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Varanasi was established for the
development of integrated solid waste management facilities in Varanasi
city for the Varanasi Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Merrut) Limited: ("A2Z Merrut")
A2Z Merrut was incorporated on 4th December, 2009 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Merrut was established for the
development of integrated solid waste management facilities in Meerut
for the Meerut Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Moradabad) Limited: ("A2Z Moradabad")
A2Z Moradabad was incorporated on 4th December, 2009 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Moradabad was established for the
development of integrated solid waste management facilities in
Moradabad city for the Moradabad Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Badaun) Limited: ("A2Z Badaun")
A2Z Badaun was incorporated on 10th November, 2010 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Badaun was established for the
development of integrated solid waste management facilities in Badaun
city for Badaun Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Balia) Limited: ("A2Z Balia") A2Z Balia was
incorporated on 10th November, 2010 as a subsidiary of the A2Z
Infrastructure Limited. A2Z Balia was established for the development
of integrated solid waste management facilities in Balia city for Balia
Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Basti) Limited: ("A2Z Basti") A2Z Basti was
incorporated on 10th November, 2010 as a subsidiary of the A2Z
Infrastructure Limited. A2Z Basti was established for the development
of integrated solid waste management facilities in Basti city for Basti
Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Fatehpur) Limited: ("A2Z Fatehpur")
A2Z Fatehpur was incorporated on 10th November, 2010 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Fatehpur was established for the
development of integrated solid waste management facilities in Fatehpur
city for Fatehpur Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Jaunpur) Limited: ("A2Z Jaunpur")
A2Z Jaunpur was incorporated on 9th November, 2010 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Jaunpur was established for the
development of integrated solid waste management facilities in Jaunpur
city for Jaunpur Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Loni) Limited: ("A2Z Loni")
A2Z Loni was incorporated on 10th November, 2010 as a subsidiary of the
A2Z Infrastructure Limited. A2Z Loni was established for the
development of integrated solid waste management facilities in Loni
city for Loni Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Mirzapur) Limited: ("A2Z Mirzapur")
A2Z Mirzapur was incorporated on 10th November, 2010 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Mirzapur was established for the
development of integrated solid waste management facilities in Mirzapur
city for Mirzapur Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Sambhal) Limited: ("A2Z Sambhal")
A2Z Sambhal was incorporated on 10th November, 2010 as a subsidiary of
the A2Z Infrastructure Limited. A2Z Sambhal was established for the
development of integrated solid waste management facilities in Sambhal
city for Sambhal Municipal Corporation, Uttar Pradesh.
- A2Z Waste Management (Ranchi) Limited; (A2Z Ranchi")
A2Z Ranchi was incorporated on 01st March, 2011 as a subsidiary of the
A2Z Infrastructure Limited. A2Z Ranchi was established for the
development of integrated solid waste management facilities in Ranchi
city for Ranchi Municipal Corporation, Jharkhand.
- A2Z Waste Management (Ludhiana) Limited: ("A2Z Ludhiana")
A2Z Ludhiana was incorporated on 14th July, 2011 as a subsidiary of the
A2Z Infrastructure Limited. A2Z Ludhiana was established for the
development of integrated solid waste management facilities in Ludhiana
city for Ludhiana Municipal Corporation, Punjab.
EXEMPTION UNDER SECTION 212 FOR SUBSIDIARIES
As per section 212 of the Companies Act, 1956 we are required to attach
Balance Sheet, P & L A/c, Director's Report and Auditor's Report of the
Subsidiary companies with the Balance Sheet of the Company. Ministry of
Corporate Affairs vide its Circular No: 51/12/2007-CL-III dated 8th
February, 2011, has, subject to compliance with certain conditions,
granted general exemption to the Companies from applicability of
Section 212 of the Companies Act, 1956.
The members of the Board of Directors of the Company vide resolution
passed in their meeting has decided not to attach the Balance Sheet, P
& L A/c, Director's Report and Auditor's Report of the Subsidiary
companies with the Balance Sheet of the Company and complied the
provisions of the said Circular, i.e. the consolidated Financial
Statement of the Company for the Financial Year ended 31st March, 2011
duly audited by Statutory Auditors is included in the Annual Report.
The Annual Accounts of these subsidiaries and the related detailed
information will be made available to any Member of the Company/its
subsidiaries seeking such information at any point of time and are also
available for inspection by any Member of the Company/its subsidiary
(ies) at the Registered Office of the Company/its subsidiaries.
Further Pursuant to the Listing Agreement with the Stock Exchanges and
the general exemption granted by the Ministry of Corporate Affairs, the
Consolidated Financial Statements of the Company, including the
financial details of all the subsidiary companies, which forms part of
the Annual Report, has been prepared in accordance with the Accounting
Standards issued by the Institute of Chartered Accountants of India.
18. INTERNAL CONTROL SYSTEMS
The Company has a proper, efficient & adequate internal control system.
It ensures that all the assets are safeguarded and protected against
loss from unauthorized use or disposition and the transactions are
authorized, recorded and reported correctly.
An effective programme of internal audit and management review
supplements the process of internal control. Properly documented
policies, guidelines and procedures are laid down for this purpose. The
internal control system has been designed so as to ensure that the
financial and other records of the Company are reliable for preparing
the financial and other statements and for maintaining accountability of
assets of the Company.
The Company has also constituted an Audit Committee comprising of 4
(Four) professional qualifed directors, who regularly interact with the
Statutory Auditors and Internal Auditors in dealing with the matters
specifed within its terms of reference. The Committee mainly deals with
accounting matters, financial reporting and internal controls.
19. AUDIT COMMITTEE RECOMMENDATION
During the year under review there was no such recommendation of the
Audit Committee which was not accepted by the Board. Hence there is no
need for disclosure of the same in this report.
20. RISK MANGEMENT SYSTEM
Your Company follows a comprehensive & effective system of Risk
Management. The Company has adopted a procedure for risk assessment and
its minimization. It ensures that all the risks are timely identifed
and mitigated in accordance with the well structured Risk Management
process. The Board of directors & the Audit Committee periodically
review the Risk management process.
21. PUBLIC DEPOSITS
During the year under review the company has not accepted any deposit
from public within the meaning of section 58A of the Companies Act,
1956 and rules made there under.
22. AUDITORS AND AUDITOR'S REPORT
M/s. S.R. Batliboi & Associates, Chartered Accountants, Statutory
Auditors of the Company will hold office up to the conclusion of the
ensuing Annual General Meeting and shall not be reappointed as they
have conveyed their intent not to seek reappointment as Statutory
Auditor of the Company in the ensuing AGM.
On recommendation of the Audit Committee the Board has suggested the
appointment of M/s Walker, Chandiok & Co., Chartered Accountants as
Statutory Auditors in place of M/s S.R Batliboi & Associates, the
retiring Auditors. M/s Walker, Chandiok & Co., Chartered Accountants,
if appointed by members as Statutory auditor shall hold office from the
conclusion of ensuing Annual General Meeting up to the next Annual
General Meeting of the Company. A Certificate has been received from
them as required under section 224(1B) of the Companies Act, 1956 to
the effect that their appointment, if made, would be within the limits
specifed in the said section.
The auditor's report presented by M/s S.R. Batliboi & Associates,
Statutory Auditors on the accounts of the company for the financial year
ended 31st March, 2011 is self-explanatory and requires no comments and
the Management replies to the audit observations are as under:
Explanation to Point No. (ix) (a) of the Annexure to the Auditor's
Report
The Company has been depositing statutory dues regularly with the
appropriate authorities though there has been a slight delay in a few
cases which will be taken care in future.
Explanation to Point No. (xxi) of the Annexure to the Auditor's Report
During the year theft by unidentifed individual of materials amounting
to Rs. 19.29 Millions has been reported against which the company has
fled an insurance claim with the Insurance Company and received a sum
of Rs. 5.13 Millions We have taken adequate safeguards to prevent theft
of materials.
Branch Audit:
The Company has established a branch office in Uganda to represent and
to do the businesses of Company over there. Further the accounts of the
said branch has been reviewed by M/s Hitesh Mehta & Co., Independent
Accountants and has been consolidated in the Company's financials.
23. PARTICULARS OF EMPLOYEES
The information required under the provisions of Section 217 (2A) of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975, as amended, is set out in the Annexure II to
the Director's Report.
24. CORPORATE GOVERNANCE REPORT
The company is regularly complying with the requirements of Corporate
Governance as stipulated under clause 49 of the listing agreement. A
detailed report on compliance of corporate governance along with
Management Discussion & Analysis forms part of the Annual Report.
The requisite Certificate from the Practicing Company Secretary M/s DR
Associates, Company Secretaries regarding Compliance with the
conditions of Corporate Governance as stipulated in Clause 49 is
annexed as Annexure to Corporate Governance Report.
25. DIRECTOR'S RESPONSIBILITY STATEMENTS
In accordance with the provisions of section 217(2AA) of the Companies
Act, 1956, your directors state that:
1. In the preparation of the annual accounts, applicable accounting
standards have been followed along with proper explanation relating to
material departures.
2. Accounting policies selected were applied consistently. Reasonable
and prudent judgments and estimates are made so as to give a true and
fair view of the state of affairs of the Company as on 31st March, 2011
and of the profits of the Company for the year ended on that date.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
4. The annual accounts of the company have been prepared on a going
concern basis.
26. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
Particulars required to be furnished pursuant to section 217(1)(e) of
the Companies act, 1956 read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988:
i. Part A and B of the Rules pertaining to conservation of energy and
technology absorption are not applicable to the Company.
ii. Foreign Exchange earnings and outgo:
Earnings: Revenue from Engineering Servicesà Rs. 85.72 Million
Outgo-Expenditure in Foreign Currency- Rs. 28.44 Million
CIF value of Imports - Rs. 868.62 Million
27. ACKNOWLEDGEMENT
Your Directors would like to express their gratitude and appreciation
for the co-operation and support extended by the Bankers, Vendors,
Investors, Business Associates and various Government
Agencies/Authorities during the year under review. Your Directors also
wish to place on record their deep sense of appreciation for the
committed services and untiring efforts of the executives, staff and
workers of the Company at all the levels.
For and on behalf of Board of Directors
Sd/-
Date : 29.08.2011 (Surender Kumar Tuteja)
Place : Gurgaon Chairman
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