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Directors Report of A2Z Infra Engineering Ltd.

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 2014–15, 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 year–01.04.2014 - 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 Company’s 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 Hon’ble 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 Director’s Report.

Auditor’s 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 company’s 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 Company’s 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 AUDITOR’S 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 auditor’s 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 Auditor’s report on Consolidated Financials of A2Z Maintenance & Engineering Services Limited, its subsidiaries and joint ventures & para 7 (a) of Auditor’s 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 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. 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 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 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, 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 Auditor’s report on Consolidated Financials of A2Z Maintenance & Engineering Services Limited, its subsidiaries and joint ventures ¶ 7 (b) of Auditor’s 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 (‘CDR Cell’) 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 Company’s 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 Auditor’s Report on Standalone Financials of A2Z Maintenance & Engineering Services Limited

In respect of auditor’s 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 Auditor’s 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 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 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 Company’s 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 Director’s 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. 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, 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 – 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 – Rs. 495.25 Million

Outgo - Expenditure in Foreign Currency – Rs. 5.21 Million

CIF value of Imports – 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 Services– 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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