To,
The Members of
A2Z Infra Engineering Ltd.
Your Directors take pleasure in presenting the 23rd Annual Report together with the annual audited financial statements for the year ended March 31, 2024.
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, 2024 are as follows:
(INR in Lakh)
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 an increase as compared to that of the previous year by 23.58%. The Company has achieved a Turnover of INR 8,599.77 Lakh as against INR 6,958.65 Lakh in the previous year. The net loss of the Company has been reduced from INR 9,154.14 Lakh in the previous year to INR 871.27 Lakh in the current year.
The Net Worth of the Company has decreased to INR 837.10 Lakh as at the end of the current year from INR 1,656.62 Lakh as at the end of the previous year representing decrease in Net Worth by 49.47%.
The Debt Equity ratio of the Company has changed to 20.69 as at the end of the current year as compared to 15.81 as at the end of the previous year.
Consolidated:
The consolidated Turnover of the Company for the current financial year is INR 38,848.80 Lakh as against
INR 34,944.16 Lakh in the previous year representing increase in Turnover by 11.17%. On a consolidated basis, the net loss of the Company has been reduced form INR 12,605.48 Lakh in the previous year to INR 736.48 Lakh in the current year.
The consolidated Net Worth of the Company has decreased to INR 3,217.95 Lakh as at the end of the current year from INR 3,805.01 Lakh as at the end of previous year representing decrease in Net Worth by 15.43%.
The consolidated Debt Equity ratio of the Company has changed to 6.15 as at the end of the current year compared to 8.23 as at the end of previous year.
2. Consolidated Financial Statements
The Audited Consolidated Financial Statements of your Company as on March 31, 2024, 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 applicable 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 subsidiaries and associates companies of the Company, forms a part of this Annual Report.
3. Corporate Governance
Good governance practices are the norm at our Company. The Company is committed to focusing on long term value creation and protecting stakeholders' interests by applying proper care, skill and diligence to business decisions. Company has adopted and evolved various practices of governance conforming to highest ethical and responsible standards of business.
The report on Corporate Governance as stipulated under the SEBI (Listing Obligations & Disclosure Requirement) Regulations, 2015 ("hereinafter referred to as SEBI Listing Regulations") forms part of the Annual Report. A certificate from Secretarial Auditors of the Company regarding compliance of the conditions of Corporate Governance, as stipulated under Schedule V of the SEBI Listing Regulations is annexed as "Annexure - III" and forms part of the report on Corporate Governance.
4. Operational highlights
The key highlights of the Company's various businesses are as follows:
Power Transmission & Distribution:
Your Company is an experienced company in Engineering & Urban Infrastructure Services sector. As part of the services, the Company provides integrated design, testing, installation, construction and commissioning services on a turn-key basis to its clients. The Company's projects include rural electrification, railway overhead electrification, reduction of AT&C losses, feeder renovation, underground cabling, feeder segregation, installing High Voltage Distribution System ("HVDS") and Low Voltage Distribution System ("LVDS") distribution lines and transmission lines. The Company has strong capabilities to build, operate and maintain:
• Substations & Switchyards up to 765 kV.
• Transmission lines up to 765 kV.
• 11 / 33 kV distribution lines comprising of Feeder Renovation Projects, Tube Well Connection, Segregation of Domestic and Agriculture load, Augmentation of Lines, Providing Laying of HT & LT Aerial Bunched Cables and Offering BPL Connections along with New connection & replacement of old meter works.
The Company has its overseas presence in Nepal, Uganda and Tanzania.
The Company has also completed projects in various states of India including Jammu & Kashmir, Rajasthan, Orissa, Bihar, Arunachal Pradesh, Jharkhand, Kerala, Chhattisgarh, Haryana, Uttar Pradesh and Himachal Pradesh.
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:
• Optical Fiber Cable NLD / Access Networking Construction & Maintenance
• Network Integration
• Telecom Infrastructure Operation & Maintenance Services
• Material Planning & Project Management
• Engineering Construction & Infrastructure 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 the remote border areas of the Eastern and North Eastern States of India, which will help in building a dedicated optical Network for the defence forces of India, to connect their remote border posts to the mainland.
Further, Company has tied up with Telesonic Network Ltd. (an Airtel group company) for work to be carried out on continuing basis at various circles including obtaining permission from applicable authority for HDD/Open Trench/Moiling/First level restoration/Duct Pulling up to 4 number/DIT/All Fiber Blowing & Pulling/Splicing/Manhole and Hand hole Supply and installation/ODF and OTB installation/AT Testing and sign off/Handover to O&M Team and such other work as may be specified/required from time to time.
The Company combine a proven track record and professional skills woven together with a culture of trust.
Going Concern
The Auditors of Company has modified its opinion on the financial statements as on March 31, 2024 that they are unable to comments on the ability of the Company to continue as a going concern. As on March 31, 2024, Company has accumulated losses amounting to INR 1,07,546.89 Lakhs and is presently facing acute liquidity problems on account of delayed realization of trade receivables. Also, certain lenders have filed applications with the Debt Recovery Tribunal (DRT) for recovery of their dues. Further, two parties have also filed applications with the NCLT for recovery of their dues. The said outstandings are disputed in nature, and Company is pursuing the same before the NCLT, hence, at present said matters are sub-judice.
The Company has been in discussions with the lenders regarding settlement of their outstanding borrowing/ dues. Further, the expected realisation of the amounts outstanding from certain customers, within the next 12 months, with whom the Company is in discussions, is uncertain in the absence of any confirmations from such customers. As per the Auditors, the Conditions explained above, indicate existence of uncertainties that may cast significant doubt on the Company's ability to continue as a going concern due to which the Company may not be able to realise its assets and discharge its liabilities in the normal course of business. Further, the Branch auditor of the Company's Tanzania Branch has also reported a material uncertainty related to going concern section in their auditor's report on the financial statements of the branch for the year ended 31st March 2024.
However, the Board of Directors is evaluating various options and has entered into one-time settlement agreements with various lenders for settlement of their outstanding with Company and is in further negotiation on the terms of settlement with the remaining lenders for settlement of their existing debt obligations. Further, the Board of Directors is in discussions with certain customers for an immediate recovery of the amount due from them and believes that the substantial portion of such trade receivables shall be realized in the upcoming year. The Board of Directors believes that the Company will be able to settle its remaining debts in due course and in view of the proposed settlement of debt obligations together with the expected increased realisation from the trade receivables, no adjustments are required in the financial statements and accordingly, these have been prepared on a going concern basis.
5. Dividend
Due to losses incurred by the Company, the Board of Directors does not recommend any dividend for the financial year ended March 31, 2024.
6. Transfer to Reserves
The Company has not transferred any amount to reserves during the year under review.
7. Share Capital Authorised Share Capital:
During the year under review, the Authorised Share Capital of the Company is INR 24,000 Lakh divided into 2400.00 Lakh equity shares of INR 10/- (Indian Rupees Ten only) each.
Paid up Share Capital:
The Company has not issued any shares during the year, the paid up share capital of the Company stood INR 176,11,98,580/- (Indian 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 INR 10/- each as at March 31, 2024.
8. Subsidiaries and Associate Companies
As on March 31,2024, the Company had 11 (Eleven) direct and step down subsidiary Companies and 17 (Seventeen) Associate Companies. Further, the Company has entered into Joint Venture agreements with unincorporated JV's for bidding of tenders & contracts the details of which is given in the note no. 34 & 35 to the standalone and note no. 35 & 36 to the consolidated financial statements. Also, the Company is a member of an association of person (AOP) in which Company is having 60% share in profits.
As per sub-section (3) of Section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements and performance of the Company's subsidiaries and associate companies for the year ended March 31, 2024, 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 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 up to the date of the Annual General Meeting.
During FY 2023-24, there has been no major change in the nature of business of the subsidiaries.
During the year under review, to consolidated the operations and to take steps for the non-operational companies, Management has discussed and has taken steps for closure of the said Company(ies). Accordingly, A2Z Waste Management (Ahmedabad) Ltd. ("Ahmedabad"), associate of the Company has has been striked off w.e.f. June 11, 2024. Further, Magic Genie Services Ltd.("Magic Genie"), Subsidiary of the Company has been striked off w.e.f. June 26, 2024.
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://media.a2zgroup.co.in/pdf/Policy_on_material_subsidiary_13.02.2021.pdf
Report on the performance and financial position of each of the subsidiaries and associates has been provided in Form AOC-1 and forms part of the Annual Report as Annexure A.
9. Directors and Key Managerial Personnel
1. Appointment/Re-appointment & Cessation of Directors/KMP's
Appointment/Re-appointment:
During the year under review:
i) Ms. Ritu Goyal was appointed as "Additional Director (Non-Executive Independent Director)" of the Company w.e.f. August 11, 2023 and regularized as "Non-Executive Independent Director" in the Annual General Meeting held on September 29, 2023 for the financial year 2022-23.
ii) Mr. Parmatma Singh Rathor was appointed as "Additional Director (Non-Executive Independent Director)" of the Company w.e.f. August 11, 2023 and regularized as "NonExecutive Independent Director" in the Annual General Meeting held on September 29, 2023 for the financial year 2022-23.
Retirement/Cessation:
i) Mr. Surender Kumar Tuteja who was appointed under the category of " "Non-Executive Independent Director" effective from July 25, 2008, has resigned from his position w.e.f. August 18, 2023 due to his other preoccupations and commitments and there is no other material reason for his resignation other than as specified above.
The Board has placed on record their appreciation for the valuable contributions and the tremendous work ethics and professionalism exhibited by him during his tenure of service with the Company.
2. Retire by Rotation
In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Manoj Tiwari (DIN: 03597274), Director liable to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-appointment.
3. Key Managerial Personnel
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's (KMP's) of the Company as on date of this report; are:
1. Mr. Amit Mittal, Managing Director cum CEO
2. Mr. Lalit Kumar, Chief Financial Officer
3. Mr. Atul Kumar Agarwal, Company Secretary
In compliance with sub-regulation (3) of Regulation 36 of SEBI Listing Regulations and Secretarial Standard - 2 on General Meetings, brief resume, expertise and other details of Director(s) proposed to be re-appointed are given in the Notice convening the ensuing Annual General Meeting.
10. Policy on Directors' appointment and Remuneration
As on March 31, 2024, the Board consists of Seven members, One(1) is Executive Director-Managing director Cum CEO, three (3) are Non-Executive and NonIndependent Directors one of whom is the Woman director and other three (3) are Non-Executive Independent Directors two of whom are Women Independent Directors.
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 policy covers the criteria for making payments to the NEDs.
The Remuneration Policy of the Company can be accessed via following link.-
http://media.a2zgroup.co.in/pdf/Remuneration_Policy_13.02.2021.pdf
11. Declaration by Independent Director(s)
The Company has received necessary declaration from each of the Independent Directors under section 149(7) of the CompaniesAct, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 that they meet the criteria of independence as laid down in section 149(6) of the Companies act, 2013 and Regulation 16(1)(b) of the SEBI Listing Regulations. Further, the Independent Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses, if any, incurred by them for the purpose of attending meetings of the Company.
The Company has also received from them, declaration of compliance of Rule 6(1) & (2) of the Companies (Appointment and Qualifications of Directors) Rules, 2014, regarding online registration with the Indian Institute of Corporate Affairs, Manesar, for inclusion/ renewal of name in the data bank of Independent Directors. With regard to integrity, expertise and experience (including the proficiency) of the Independent Directors, the Board of Directors have taken on record the declarations and confirmations submitted by the Independent Directors and is of the opinion that they are persons of integrity and possess relevant expertise and experience and their continued association as Director will be of immense benefit and in the best interest of the Company. With regard to proficiency of the Independent Directors, ascertained from the online proficiency self-assessment test conducted by the Institute, as notified under Section 150(1) of the Act, the Board of Directors have taken on record the information submitted by Independent Directors that they have complied with the applicable laws.
12. Annual evaluation of Board Performance and Performance of its Committees and Individual Directors
Annual evaluation of the performance of the Board, its Committees and individual directors has been made pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.
The performance of the Board was evaluated by the members of the Board on the basis of the guidance note and criteria laid down such as the Board composition and structure, effectiveness of board processes, information and functioning, Board culture and dynamics, quality of relationship between the Board and the Management and efficacy of communication with external stakeholders,competence and experience of Board to conduct its affairs effectively, operations are in line with strategy, integrity of financial information and the robustness of financial and other controls, effectiveness of risk management processes, etc.
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the guidance note and criteria laid down such as the composition of committees, effectiveness of committee meetings, committees are appropriate with the right mix of knowledge and skills, effectiveness and advantage of the Committee, independence of the Committees, etc.
The Board and the Nomination & Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, willingness to devote time and effort to understand the company and its business by the directors, competency to take the responsibility and having adequate qualification, experience and knowledge, quality and value of their contributions at board meetings, effectiveness of Leadership quality of the Chairperson etc.
In a separate meeting of Independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairperson 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.
13. Number of meetings of the Board of Directors
During the year, Five (5) 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.
14. Meetings of the Audit Committee
During the year under review, the Audit Committee met 4 (Four) times. The details of the meetings, composition and terms of the reference of the Committee are given in the Corporate Governance Report which forms a part of this Annual Report.
15. Change in the nature of business
There has been no change in the nature of business during the year under review.
16. Material Changes and Commitments
There were no material changes and commitments affecting the financial position of the Company, which occurred between the end of the financial year of the Company and the date of this report.
17. Updates on One Time Settlement (OTS) with the Lender(s)
During the year under review, due to stressed cash flows, Company was not able to pay the balance amount to some Lenders with whom Company has entered into one time settlement arrangement and hence, Company has entered into revised Settlement agreement(s) with them and also have done Settlement Arrangement with some other Lenders as mentioned below:
1. Company has entered into Settlement Arrangement on October 27, 2023 with Kotak Mahindra Bank Ltd., to settle all its outstanding dues through full cash One Time Settlement (OTS) for a deferred Consideration of INR 1,500 Lakh against the total fund based outstanding amount of INR 9,381 Lakh.
2. Company has entered into revised Settlement Arrangement on November 15, 2023 with Edelweiss Asset Reconstruction Co. Ltd. acting in its capacity as trustee of EARC Trust SC 217 for the Loan assigned by ICICI Bank Ltd., to settle all its outstanding dues through full cash One Time Settlement (OTS) for a deferred Consideration of INR 1,100 Lakh against the outstanding amount of INR 3,525 Lakh.
3. Company has entered into Settlement Arrangement on March 20, 2024 with Axis Bank Ltd., to settle all its outstanding dues through full cash One Time Settlement (OTS) for a deferred Consideration of INR 1,700 Lakh against the total fund based outstanding amount of INR 10,270 Lakh.
4. After the Year under review, Company has entered into Settlement Arrangement on May 28, 2024 with Union Bank of India, to settle all its outstanding dues through full cash One Time Settlement (OTS) for a deferred Consideration of INR 900 Lakh against the total outstanding amount of INR 2,618 Lakh.
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 (OTS) with various Lenders, wherein it had settled the outstanding borrowings by upfront payments and deferred installments. During the year under review, Company has done OTS with Kotak Mahindra Bank Ltd., Edelweiss Asset Reconstruction Company Limited as representative of EARC trust SC 217 for the Loan assigned by ICICI Bank, Axis Bank Ltd. and after the year under review, Company has done OTS with Union Bank of India. Company is also in discussion with the remaining Lenders for finding a prudent resolution of their respective fund/non-fund based exposure to the Company by doing one time settlement with them.
18. 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 date of Financial Statements.
19. 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.
20. 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.
The Company's Books of Accounts are maintained in tally and transactions are executed through tally (ERP) setups to ensure correctness/ effectiveness of all transactions, integrity and reliability of reporting. Significant observations including recommendations for improvement of the business processes are reviewed by the Management before reporting to the Audit Committee. The Audit Committee 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 auditors 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.
The Statutory Auditors have given their disclaimer of opinion on the financial reporting in their Report on the effectiveness of the Company's internal financial controls with reference to the Company's ability to continue as a going concern, accrual of interest expenditure in accordance with Ind AS 23 and reconciliation of the same with the lenders, estimating the investment and other dues recoverable in an associate company. Your Directors reiterate their clarifications on the same as above mentioned elsewhere in the Report.
21. Secretarial Standards
The Company is in Compliances 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).
22. Auditors
Statutory Auditors and Auditors' Report
M/s MRKS and Associates ("MRKS") (Firm Registration No. 023711N), Chartered Accountants, were appointed as auditors of the Company for a period of five consecutive years from the conclusion of the 20th Annual General Meeting (AGM) to the conclusion of the 25th Annual General Meeting of the Company.
The auditor's report presented by M/s MRKS and Associates, Auditors on the accounts of the company for the financial year ended March 31,2024 is self-explanatory and requires no comments and the Management replies to the audit observations are as under:
Explanation to Para 3.a. of Auditor's report on Standalone Financials of A2Z Infra Engineering Ltd. and Para 3.a. of Auditor's report on Consolidated Financials of A2Z Infra Engineering Ltd., its subsidiaries and associates of A2Z Infra Engineering Ltd.
Based upon management analysis and assumptions, the management is evaluating various options and has entered into one-time settlement agreements with various lenders (as described in note 22.1 of the financial statements), including interest and other related terms and conditions apart from further negotiating the terms with the remaining lenders for settlement of its existing debt obligations. Further the management is in discussions with certain customers for an immediate recovery of the amount due from them and believes that the substantial portion of such trade receivables shall be realized within the upcoming year. Management believes that the Company will be able to settle its remaining debts in the due course and in view of the proposed settlement of debt obligations together with the expected increased realisation from the trade receivables, no adjustments are required in the standalone financial statements and accordingly, these have been prepared on a going concern basis. Refer Note 31 of standalone financial statements and Note 51 of consolidated financial statements for details.
Explanation to Para 3.b. of Auditor's report on standalone Financials of A2Z Infra Engineering Ltd., & Para 3.b. of Auditor's report on Consolidated Financials of A2Z Infra Engineering Ltd. its subsidiaries, joint ventures and associates of A2Z Infra Engineering Ltd.
Based upon management analysis and assumptions, management is confident that no additional liability on account of borrowing settlement shall devolve on the Company in addition to the carrying value of such liability as at March 31, 2024. The Company is in the process of negotiations/ reconciliations of its outstanding obligations carried in these financial statements. Hence, directors believe that there is no material financial impact on the said disclaimer of opinion. Refer Note 22.1 of standalone financial statements and Note 50 of consolidated financial statements for details.
Explanation to Para 3.c. of Auditor's report on Standalone Financials of A2Z Infra Engineering Ltd., & Para 3.c. of Auditor's report on Consolidated Financials of A2Z Infra Engineering Ltd. its subsidiaries, joint ventures and associates of A2Z Infra Engineering Ltd.
Based upon management analysis and assumptions, the recoverable amount from the underlying investments/ assets is higher than the net worth of Greeneffect Waste Management Group. There are assumptions and estimates used in such future projections such as discount rate, long term growth rate, arbitration claims etc. which management believes are fair and appropriate. Therefore, the management believes that the realisable amount from the aforementioned associate company and its subsidiaries is higher than the carrying value of the non-current investments, other current financial assets and current financial assets-loans due to which these are considered as good and recoverable. Hence, directors believe that there is no material financial impact on the said disclaimer of opinion. Refer Note 5.2 of standalone financial statements and Note 6.2 of consolidated financial statements for details.
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 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, Company Secretaries as Secretarial Auditors to conduct Secretarial Audit of the company and its material unlisted Subsidiary Company(ies), namely M/s A2Z Infraservices Ltd., M/s Ecogreen Envirotech Solutions Limited and M/s Mansi Bijlee & Rice Mills Ltd., for the Financial year 2023-24.The Secretarial Audit Report of the Company together with its material unlisted subsidiary(ies) is given as Annexure B (Form MR-3) which forms part of this report.
The said Secretarial Audit Reports do not contain any qualification, reservation or adverse remark made by the secretarial auditors
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 SKG & Co. (Firm Registration No. 000418), as the Cost Auditors of the Company for the Financial Year ended March 31, 2025.
In accordance with the above provisions, the remuneration payable to the cost auditors for the financial year ended March 31, 2025 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.
Further, the Cost Auditors' Report as given by M/s SKG & Co. (Firm Registration No. 000418) for financial year 2023-24 do not contain any qualifications, reservations, adverse remarks or disclaimer which call for any explanation/comment from the Board of Directors.
23. Corporate Social Responsibility (CSR)
As the Company has incurred losses and is not fulfilling the criteria as specified in Section 135 of the Companies Act, 2013 in the preceding financial year i.e. F.Y 2022-23. Hence, the provisions of Section 135 are not applicable on the Company for the F.Y. 2023-24 and it was not required to spend any amount towards CSR activities during the financial year.
The CSR Policy of the Company 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_22.pdf
24. Investor Education and Protection Fund
During the year under review, no unclaimed dividend is pending to be transferred to IEPF.
Further, during the year under review, the Company had transferred the 105 unclaimed shares which were lying in A2Z Maintenance & Engineering Services Ltd.-unclaimed suspense account to the Investor Education and Protection Fund (IEPF) pursuant to the provisions of Companies Act, 2013, read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.
25. Vigil Mechanism / Whistle Blower Policy
The Board has pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, framed "Vigil Mechanism (Whistle Blower) Policy" ("the Policy")' to deal with instances of fraud and mismanagement, if any. This Policy has been formulated to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns from time to time. The said policy is placed on the website of the Company and may be accessed at a link:-
http://media.a2zgroup.co.in/pdf/VIGIL_(WHISTLE%20BLOWER)_POLICY_13.02.2021.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 the vigil mechanism and also provide direct access to the Chairperson of the Audit Committee in appropriate or exceptional circumstances.
26. Particulars of Loans, Guarantees or Investments under Section 186
Being an 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.
27. Related Party Transactions
With reference to Section 134 (3) (h) of the Act, all contracts and arrangements with related party under Section 188 (1) of the Act, entered by the Company during the financial year, were in the ordinary course of business and on an arm's length basis. A statement giving details of all Related Party Transactions are placed before the Audit Committee on a quarterly basis for its review.
During the year under review, Company had not entered into any contract or arrangement with the related parties which could be considered 'material' (i.e. transactions entered into individually or taken together with previous transactions during the financial year, exceeding rupees one thousand crore or ten percent of the annual consolidated turnover as per the last audited financial statements of the Company, whichever is lower) according to the policy of the Company on the materiality of Related Party Transactions. Accordingly, there are no transactions that are required to be reported in Form-AOC 2. However, you may refer to Related Party transactions in Note No. 35 of the standalone financial statements.
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://media.a2zgroup.co.in/pdf/A2Z-%20Policy%20on%20Materiality%20of%20 and%20Dealing%20with%20Related%20Party%20Transactions_01.04.2022.pdf
28. Employee Stock Option Plan
The Nomination & Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the A2Z Employees Stock Option Plan 2013 (ESOP 2013), A2Z Employees Stock Option Plan 2014 (ESOP 2014) and A2Z Employees Stock Option Plan 2018 (ESOP 2018) of the Company in accordance with the applicable SEBI Guidelines.
The applicable disclosures as stipulated under Regulation 14 of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 with regard to ESOP 2013, ESOP 2014 and ESOP 2018, including ESOP re-granted under the above specified scheme(s), if any, are available on the website of the Company at www.a2zgroup.co.in.
The certificates from the Secretarial Auditor of the Company stating that the Schemes have been implemented in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the resolution passed by the members will be available for inspection in electronic mode during the meeting to any person having right to attend the meeting and same may be accessed by sending an e-mail to investor.relations@a2zemail.com.
29. Annual Return
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on 31st March, 2024 is available on the Company's website at a2zgroup.co.in under the Investors Section.
30. 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.
The Company has complied with provisions relating to the constitution of Internal Complaints Committee (ICC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to redress complaints received regarding sexual harassment.
During the year under review, there were no complaints pertaining to sexual harassment.
31. Disclosure on Cost Records
Pursuant to provisions of Section 134 of the Act read with Rule 8(5)(ix) of the Companies (Accounts) Rules, 2014, it is confirmed that maintenance of cost records as specified by the Central Government under sub-section (1) of Section 148 of the Act, is required by the Company and accordingly such accounts and records are made and maintained
32. 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 C.
33. Conservation of Energy, Technology absorption, Foreign Exchange Earnings and Outgo
Due to various reasons beyond the control of the Company as mentioned herein above, the power plants of the Company are not operational. Further, there is no any other manufacturing plant owned by the Company.
Hence, most of the Information required to be provided under Section 134(3) (m) of the Act read with the Companies (Accounts) Rules, 2014, are Nil/Not applicable during the year under review. The information, as applicable, are given hereunder:
Conservation of Energy: Your Company requires minimal energy consumption and every endeavor is made to ensure optimal use of energy, avoid wastages and conserve energy as far as possible.
Further, during the year there are no foreign exchange earnings and outgo.
34. Disclosure requirements
a. As per Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, 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 website of the Company http://media.a2zgroup.co.in/pdf/AIEL_Familiarization%20Programme%20 for%20Independent%20Directors_2023-24.pdf
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 and taken on record by the Board.
35. Listing
The Equity Shares of the Company continue to remain listed on BSE Limited and National Stock Exchange of India Limited (NSE). The stipulated listing fees for FY 2024-25 have been paid to both the Stock Exchanges.
36. 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.
The Company has a mechanism in place to inform Board members about risk assessment, minimization procedures and periodical review thereof. The Board of Directors and Audit Committee of Board of Directors of the Company inter alia reviews Enterprise Risk Management functions of the Company and ensures appropriate methodology, processes and systems are in place to monitor and evaluate risks associated with the business of the Company.
The main objective of this policy is to ensure sustainable business growth with stability and to promote a proactive 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.
37. Directors' Responsibility Statement
Pursuant to Section 134(3)(c) and 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 March 31,2024, the applicable accounting standards have been followed and no material departures have been made from the same;
b. we 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, 2024 and of the profit and loss of the company for that period;
c. we 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. we have prepared the annual accounts on a going concern basis; and
e. we 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. we have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
38. 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.
39. Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year.
Details of proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) are as follows:
40. Details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.
Not Applicable
41. 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 Voluntary revision of Financial Statements or Board's Report.
2. No director who is in receipt of any commission from the Company and who is a Managing Director or Whole-time Director of the Company has received any remuneration or commission from any Holding Company or Subsidiary Company of the Company.
i. Mr. Amit Mittal was appointed as Whole-Time Director in Ecogreen Envirotech Solutions Limited ("Ecogreen"), subsidiary of the Company with effect from November 01,2021 and he is in receipt of remuneration of INR 78.96 Lakh from Ecogreen during the year under review.
42. Acknowledgement
Your Directors place on record their gratitude to the Central Government, State Government Departments, Organizations and Agencies in India and Governments of various countries where the Company has its operations for their continued support and co-operation. The Directors are also thankful to all valuable stakeholders viz., customers, vendors, suppliers, banks, financial institutions, joint venture partners and other business associates for their continued co-operation and excellent support provided to the Company during the year. The Directors acknowledge the unstinted commitment and valuable contribution of all employees of the Company.
The Directors also appreciate and value the trust reposed in them by Members of the Company. Your Directors also thank and appreciate all the Bankers of the Company for their support extended by them to the Company in difficult times and for accepting the settlement process for settling the debt amount in an amicable manner.