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Artefact Projects Ltd.

BSE: 531297 Sector: Engineering
NSE: N.A. ISIN Code: INE885B01014
BSE LIVE 15:40 | 19 Sep 28.00 1.25
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NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 25.45
PREVIOUS CLOSE 26.75
VOLUME 1326
52-Week high 42.95
52-Week low 20.25
P/E
Mkt Cap.(Rs cr) 15
Buy Price 28.05
Buy Qty 10.00
Sell Price 0.00
Sell Qty 0.00
OPEN 25.45
CLOSE 26.75
VOLUME 1326
52-Week high 42.95
52-Week low 20.25
P/E
Mkt Cap.(Rs cr) 15
Buy Price 28.05
Buy Qty 10.00
Sell Price 0.00
Sell Qty 0.00

Artefact Projects Ltd. (ARTEFACTPROJECT) - Auditors Report

Company auditors report

To

The Members

ARTEFACT PROJECTS LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of ARTEFACT PROJECTS LIMITED("the Company") which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility forthe Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of theAct read with Rule 7 of the Companies(Accounts) Rules 2015.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of theAct and the Rules made thereunder and the Order under section 143 (11) ofthe Act.

We conducted our audit of the financial statements in accordance with the StandardsonAuditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the financial statements.

ATTENTION IS DRAWN TO:

i) Note no. 9.01 to the financial statements regarding the non payment / reconciliationof Service Tax and non filing of Service Tax Returns since April 2015 the impact of whichon the financial statements cannot be quantified and will be accounted for as and whendetermined.

ii) Note no. 15.01 to the financial statements wherein the management of the companyhas considered Trade Receivables outstanding for more than 6 months amounting to Rs99246872 as good and fully recoverable. In absence of balanceconfirmations/reconciliations from the customers from whom these amounts are due or otheralternate audit evidence to corroborate management's assessment of recoverability of thesebalances and having regard to the age of these balances we are unable to comment theextent to which these balances are recoverable.

iii) Note no. 17.04 to the financial statements wherein the Management of the Companyhas considered the receivable amounting to Rs 7272300 given as sponsorship for highereducation in the earlier years as good and fully recoverable even though he has failed tofulfill his stipulated commitments and obligations. In the absence of balance confirmationfrom the said individual or other alternate audit evidence to corroborate management'sassessment of recoverability of this balance and having regard to the age of this balancewe are unable to comment the extent to which this balance is recoverable.

iv) Note no. 19.01 to the financial statements wherein the liabilities in respect ofSalary and Retainership Fees payable amounting to Rs 2689983 has been written back bythe Company. In the absence of the documents for full & final settlement with theseemployees and retainers or other alternative audit evidence we are unable to comment theextent to which the Company's liability to these employees and retainers ceased to exist.

Quali!ed Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the basis forqualified opinion paragraph above the aforesaid financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2017 and its profit and its cash flows for the year ended on thatdate.

OtherMatters

The Financial Statements and other financial information includes the Company'sproportionate share in jointly controlled total assets of ! 51951718 as at March 312017 total revenue of ! 14022228 and total expenditure of ! 13839193 for the yearended on that date and the elements making up the cash flow statements and relateddisclosures in respect of unincorporated Joint Ventures which is based on auditedfinancial statements of the respective Joint Ventures audited by one of the JointAuditor'sand furnished to us.

Our Opinion is not modified in respect of this matter.

Report on OtherLegal and Regulatory Requirements

1. As required by Section 143 (3) of theAct we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit except for thematters described in the 'Basis for Qualified Opinion' paragraph above.

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

c. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

d. Except for the matters described in the 'Basis for Qualified Opinion' paragraphabove in our opinion the aforesaid financial statements comply with theAccountingStandards specified under Section 133 of theAct as applicable read with Rule 7 of theCompanies (Accounts) Rules 2015.; e. The matter described in the 'Basis for QualifiedOpinion' paragraph above in our opinion may have an adverse effect on the functioning ofthe Company.

f. On the basis of the written representations received from the Directors as on March31 2017 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2017 from being appointed as a director in terms of Section164 (2) of theAct.

g. With respect to the adequacy of the internal financial controls over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate Report in RsAnnexureA".

h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2016 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements as referred to in Note no. 28(ii) to the financialstatements.

ii. The Company does not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

iv. The Company has provided the requisite disclosures in the financial statements asregards to its holdings and dealings in Specified Bank Notes as defined in theNotification S.O 3407(E) dated November 8 2016 of the Ministry of Finance during theperiod from November 8 2016 to December 30 2016 and based on audit procedure performedand the representation provided by the Management we report that the disclosures are inaccordance with the books of account maintained by the Company and as produced to us bythe management.

2 As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in RsAnnexure B" a statement on the matters specified in paragraphs3 and 4 of the Order.

For CHATURVEDI & SHAH For NARESH PATADIA & CO.
Chartered Accountants Chartered Accountants
(Firm Registration No. 101720W) (Registration No. 106936W)
R KORIA NARESH PATADIA
Partner Proprietor
Membership No. 35629 Membership No. 35620
Place: Mumbai Place: Nagpur
Date: May 23 2017 Date: May 23 2017

"ANNEXURE A" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 (g) under 'Report on Other Legal and RegulatoryRequirements' of our report of even date on !nancial statements ofArtefact ProjectsLimited forthe yearended March 31 201 )7

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the CompaniesAct 2013 ("theAct")

We have audited the Internal Financial Controls over financial reporting of ARTEFACTPROJECTS LIMITED ("the Company") as of March 31 2017 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the CompaniesAct 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards onAuditing issued by the ICAI and deemed to beprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls overFinancial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Quali!ed opinion

According to the information and explanations given to us and based on our audit thefollowing material weaknesses have been identified in the operating effectiveness of thecompany's internal financial control over financial reporting as on March 31 2017 inrespect of:

a) Trade receivables & Service Tax reconciliations of balances outstandingspecifically trade receivables for more than six months CENVAT receivable/balances withService Tax Authorities are not available that has effect on disclosure of FinancialStatements which indicates that management is not taking effective steps for the same andconsequently it affects the collection from customers and may result into under provisionof doubtful debts and amount of CENVAT not receivable continue to be disclosed as an assetand not charged to statement of profit & loss.

b) Accounting software used for maintenance of books of accounts enables to delete anytransaction without appropriate authorization. Further there is lack of audit trailavailable in Tally Software to provide us with the audit evidence to completely rely onsystem.

A'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the company's annual or interim financial statements willnot be prevented or detected on a timely basis.

In our opinion except for the effects/possible effects of the material weaknessesdescribed above on the achievement of the objectives of the control criteria the Companyhas maintained in all material respects adequate internal financial controls overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as of March 31 2017 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note issued by the ICAI except for the materialweakness described above and the effects/possible effects thereof.

We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the March 31 2017financial statements of the Company and the material weaknesses described above does notaffect our qualified opinion on the financial statements of the Company.

For CHATURVEDI & SHAH For NARESH PATADIA & CO.
Chartered Accountants Chartered Accountants
(Firm Registration No. 101720W) (Registration No. 106936W)
R KORIA NARESH PATADIA
Partner Proprietor
Membership No. 35629 Membership No. 35620
Place: Mumbai Place: Nagpur
Date: May 23 2017 Date: May 23 2017

"ANNEXURE B" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2 under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date on !nancial statements ofArtefactProjects Limited forthe yearended March 31 2017)

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.

b. According to the information and explanations given to us the Company hasphysically verified all the fixed assets and no material discrepancies were noticed onsuch physical verification as compared with the available records.

c. According to the information and explanations given to us the original title deedsof immovable properties have been pledged as security for loans with a lender we havebeen produced the photocopy of the title deeds of these immovable properties and based onsuch documents the title deeds are held in the name of the Company except in case of theLand on which the building has been constructed is jointly owned by the Company somedirectors and his relatives (Refer Note No. 11.01 to the Financial Statements).

ii. In respect of its inventories:

The Company does not have any Inventories of Raw Material Finished Goods and Stores& Spares. The inventory at the year and represents the Project Management ConsultancyServices which remained unbuilt as on the reporting date and accordingly the provisions ofClause (ii) of Paragraph 3 of the Order as far as it relates to Physical Verification ofInventories are not applicable to the Company.

iii. In respect of loans secured or unsecured granted by the Company to CompaniesFirms Limited Liability Partnerships or other parties covered in the register maintainedunder section 189 of theAct:

a. The Company has given advances in the nature of loan to one of the company and asper information and explanations given to us the above loan is repayable on demand.Receipt of interest is regular.

b. As the loan is repayable on demand the question of overdue amount does not arise.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of theAct as applicablein respect of loans granted investments made and guarantees and securities provided.

v. According to the information and explanations given to us the Company has notaccepted any deposit from the public.

Therefore the provisions of Clause (v) of paragraph 3 of the Order are not applicableto the Company.

vi. According to the information and explanations given to us the Central Governmenthas not prescribed maintenance of the cost records under sub section (1) of section 148 ofthe act in respect of business activities carried on by the company.

Therefore the provisions of Clause (vi) of paragraph 3 of the Order are not applicableto the Company.

vii. According to the information and explanations given to us in respect of statutorydues:

a. The Company has generally been regular in depositing undisputed statutory dues inrespect of Provident Fund and Employees' State Insurance with the appropriate authoritiesduring the year. Substantial delays have been noticed in depositing undisputed statutorydues in respect of Service Tax and Income Tax with the appropriate authorities during theyear.According to the information and explanations given to us no undisputed amountspayable in respect of such statutory dues were outstanding as at March 31 2017 for aperiod of more than six months from the date they became payable except in respect of TDS& Service Tax aggregating to ! 39331354 as detailed below.

Name of the Statute Nature of the Dues Period to which it relates Amount (in Rs)
The Income Tax Act 1961 Tax Deducted at Source (TDS) April 16 to August 16 3007305
The Finance Act 1994 Service Tax April 15 to August 16 36324049
Total 39331354

b. There are no disputed statutory dues of Income tax Sales tax Wealth tax Servicetax Duty of Customs Duty of Excise Value added tax and Cess which have not beendeposited on account of disputed matters pending before appropriate authorities.

viii. Based on our audit procedures and according to the information and explanationsgiven by the management we are of the opinion that as on March 31 2017 the Company hasnot defaulted in repayment of dues to Financial institutions and banks.

ix. According to the information and explanations given to us the Company did notraise any term loans during the year.

Accordingly provisions of paragraph 3 (ix) of the CARO 2016 is not applicable to theCompany.

x. Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and on the basis of information and explanationsgiven by the management no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the year.

xi. According to the information and explanations given to us the managerialremuneration has been paid or provided in accordance with the provisions of section 197read with Schedule V to theAct.

xii. In our opinion the Company is not a Nidhi Company. Therefore the provisions ofClause (xii) of paragraph 3 of the Order are not applicable to the Company.

xiii. According to the information and explanations given to us the transactionsentered with the related parties are in compliance with section 177 and 188 of the Actwhere applicable and the details of related party transactions have been disclosed in thefinancial statements as required by the applicable accounting standards.

xiv. According to the information and explanations give to us and based on ourexamination of the records of the Company during the year the company has not raised anymoney by preferential allotment or private placement of share or debentures. Thereforethe provisions of Clause (xiv) of paragraph 3 of the Order are not applicable to theCompany.

xv. According to the information and explanations given to us during the year thecompany has not entered into any non-cash transactions with directors or persons connectedwith him. Therefore the provisions of Clause (xv) of paragraph 3 of the Order are notapplicable to the Company.

xvi. In our opinion and according to information and explanations provided to us theCompany is not required to be registered under section 45-IAof the Reserve Bank ofIndiaAct 1934.

For CHATURVEDI & SHAH For NARESH PATADIA & CO.
Chartered Accountants Chartered Accountants
(Firm Registration No. 101720W) (Registration No. 106936W)
R KORIA NARESH PATADIA
Partner Proprietor
Membership No. 35629 Membership No. 35620
Place: Mumbai Place: Nagpur
Date: May 23 2017 Date: May 23 2017