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Artefact Projects Ltd.

BSE: 531297 Sector: Engineering
NSE: N.A. ISIN Code: INE885B01014
BSE LIVE 14:53 | 26 May 41.50 -0.10
(-0.24%)
OPEN

39.65

HIGH

41.50

LOW

39.55

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 39.65
PREVIOUS CLOSE 41.60
VOLUME 75
52-Week high 41.60
52-Week low 20.25
P/E 118.57
Mkt Cap.(Rs cr) 23
Buy Price 0.00
Buy Qty 0.00
Sell Price 41.50
Sell Qty 402.00
OPEN 39.65
CLOSE 41.60
VOLUME 75
52-Week high 41.60
52-Week low 20.25
P/E 118.57
Mkt Cap.(Rs cr) 23
Buy Price 0.00
Buy Qty 0.00
Sell Price 41.50
Sell Qty 402.00

Artefact Projects Ltd. (ARTEFACTPROJECT) - Auditors Report

Company auditors report

To

The Members

ARTEFACT PROJECTS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of ARTEFACTPROJECTS LIMITED ("the Company") which comprise the Balance Sheet asat 31st March 2016 the Statement of Profit and Loss the Cash Flow Statement for theyear then ended and a summary of significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Standalone 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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules2015.

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 standalone financial statementsbased on our audit.

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 the Act and the Rules made thereunder and the Order under section 143 (11)of the Act.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

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 standalone financial statements.

Basis for Qualified Opinion:

Attention is drawn to:

i) Note no. 15.01 to the standalone financial statements wherein the management of thecompany has considered Trade Receivables outstanding for more than 6 months amounting toRs 102543978 as good and fully recoverable. In absence of balance confirmations /reconciliations from the customers from whom these amounts are due or other alternateaudit evidence to corroborate management's assessment of recoverability of these balancesand having regard to the age of these balances we are unable to comment the extent towhich these balances are recoverable.

ii) Note no.19.01 to the standalone financial statements wherein the liabilities inrespect of Retainership Fees amounting to Rs 2813792 has been written back by theCompany. In the absence of the documents for full & final settlement with theretainers or other alternative audit evidence we are unable to comment the extent towhich the Company's liability to these retainers ceased to exist.

Qualified 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 standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2016 and its profit and its cash flows for theyear ended on that date.

Other Matters

The Standalone Financial Statements and other financial information includes theCompany's proportionate share in jointly controlled total assets of Rs 91662474 as at 31March 2016 total revenue of Rs 37215 and total expenditure of Rs 1710991 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's and furnished to us.

Our Opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act 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 standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act as applicable read with Rule7 of the Companies(accounts)Rules 2015.;

e. The matter i) described in the 'Basis for Qualified Opinion' paragraph above in ouropinion may have an adverse effect on the functioning of the company.

f. On the basis of the written representations received from the directors as on 31stMarch 2016 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms of Section164 (2) of the Act.

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 "Annexure A".

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. 27 (iii) to the standalonefinancial statements.

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.

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 "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.

For Chaturvedi & Shah For Naresh Patadia & Co.
Chartered Accountants Chartered Accountants
(Firm Registration No. - 101720W) (Firm Registration No. - 106936W)
R. Koria Naresh Patadia
Partner Proprietor
Membership No. - 35629 Membership No. - 35620
Place: Mumbai Place: Nagpur
Date : 13th June 2016 Date : 13th June 2016

"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 standalone financial statements of ArtefactProjects Limited for the year ended 31st March 2016)

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

We have audited the internal financial controls over financial reporting of ARTEFACTPROJECTS LIMITED ("the Company") as of 31 March 2016 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

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 Companies Act 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 on Auditing 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 over Financial 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.

Qualified 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 31st March 2016 inrespect of: a) Trade receivables reconciliations of balances outstanding specificallyreceivables for more than six months are not available that has effect on disclosure ofFinancial Statements which indicates that management is not taking effective steps forthe same and consequently it affects the collection from customers and may result intounder provision of doubtful debts. b) Accounting software used for maintenance of books ofaccounts enables to delete any transaction without appropriate authorization. Furtherthere is lack of audit trail available in Tally Software to provide us with the auditevidence to completely rely on system.

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 31st March 2016 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 31st March 2016standalone financial statements of the Company and the material weaknesses describedabove does not affect our qualified opinion on the standalone financial statements of theCompany.

For Chaturvedi & Shah For Naresh Patadia & Co.
Chartered Accountants Chartered Accountants
(Firm Registration No.-101720W) (Firm Registration No.-106936W)
R. Koria Naresh Patadia
Partner Proprietor
Membership No.-35629 Membership No.-35620
Place: Mumbai Place: Nagpur
Date : 13th June 2016 Date : 13th June 2016

"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 standalone financialstatements of Artefact Projects Limited for the year ended 31 March 2016)

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 their relatives (Refer Note No. 11.01 to the Standalone FinancialStatements).

ii. In respect of its inventories:

The Company is a service company primarily rendering Project management services.Accordingly it does not hold any inventories. Therefore the provisions of Clause (ii) ofParagraph 3 of the Order 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 the Act:

a. The Company has given advances in the nature of loan to its wholly owned subsidiaryand as per 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 the Act asapplicable in respect of loans granted investments made and guarantees and securitiesprovided.

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 theprovisions of Clause (vi) of paragraph 3 of the Order are not applicable to 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 duesincluding Provident Fund Employees' State Insurance Income tax Service tax ExciseDuty Cess and any other statutory dues with the appropriate authorities during the year.However delays have been noticed in depositing undisputed statutory dues in respect ofService Tax Income Tax and Sales Tax with the appropriate authorities during the year.According to the information and explanations given to us no undisputed amounts payablein respect of such statutory dues were outstanding as at 31st March 2016 for a period ofmore than six months from the date they became payable except in respect of TDS &Service Tax aggregating to Rs 32069979 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 15 to August 15 2457719
The Finance Act 1994 Service Tax April 14 to August 15 29612260
Total 32069979

b. There are no disputed statutory dues of Income Tax Sales Tax Wealth Tax ServiceTax Duty of Excise Value added tax and Cess which have not been deposited on account ofdisputed 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 31st March 2016 the Company hasnot defaulted in repayment of dues to Financial Institutions and Banks.

ix. The Company has raised new term loans during the year under audit. To the best ofour knowledge and according to the information and explanations given to us the term loanstaken during the year have been applied for the purposes for which they were raised.

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 the Act.

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 personsconnected with him. Therefore the provisions of Clause (xv) of paragraph 3 of the Orderare not applicable 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-IA of the Reserve Bank of IndiaAct 1934.

For Chaturvedi & Shah For Naresh Patadia & Co.
Chartered Accountants Chartered Accountants
(Firm Registration No. - 101720W) (Firm Registration No.- 106936W)
R. Koria Naresh Patadia
Partner Proprietor
Membership No. - 35629 Membership No. - 35620
Place: Mumbai Place: Nagpur
Date : 13th June 2016 Date : 13th June 2016