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Artefact Projects Ltd.

BSE: 531297 Sector: Engineering
NSE: N.A. ISIN Code: INE885B01014
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OPEN 39.65
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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) - Director Report

Company director report

To

The Members

Your Directors present the 28th Annual Report of the Company together with the AuditedFinancial Statements for the year ended on 31st March 2016.

FINANCIAL HIGHLIGHTS:

( Rs in Lacs)
STANDALONE CONSOLIDATED
PARTICULARS 2015 -2016 2014 -2015 2015 -2016 2014 -2015
Net Income from operation and other income 1733. 22 2102.38 3142.74 4836.05
Profit before Depreciation & Amortization expenses Finance Cost and tax 450.12 533.46 101.64 796.12
Less: Depreciation and Amortisation Expenses 80.56 84.89 91.66 96.29
Finance Cost 323. 55 307.94 479.03 407.79
Profit before tax 46.01 140.63 (469.05) 292.02
Less: Provision for tax 45.05 50.48 43.32 102.10
Profit after tax 0.96 90.15 (512.37) 189.92
Less: Minority Interest in Income - - 0.56 0.34
Add: Share in Profits/Loss of Associates - - 20.87 (2.34)
Balance of Surplus as per last Balance Sheet 1420.61 1294.29 1697.15 1691.79
Balance available for appropriation 1421.58 1420.61 1415.58 1697.15
Proposed Rate of dividend - - -
Proposed dividend - - -
Previous years’ dividend Reversed - 41.44* -
Tax on dividend - - -
Tax on Dividend Reversed - 7.04* - 7.04*
Transfer to General Reserve - - -
Balance of profit carried to Balance Sheet 1421.58 1420.61 1415.58 1697.15

* The dividend proposed for the year ended 31st March 2014 was not approved by theshareholders in Annual General Meeting held on 29th September 2014; hence provisionsprovided in the year 2013-14 were reversed in the year 2014-15.

During the year your Company witnessed a reduction in turnover by around by Rs 3.69Crores mainly on account of conclusion of two projects resulting into reduction ofbillable revenue of approx. Rs 4 Crores. The award of new DPR Consultancy work orders areexpected to generate revenue during FY 2016-17.

Manpower Cost: The manpower cost of the Company reduced due to completion ofcertain projects but the ratio thereof is same as compared to last year.

Administrative Selling & Other Expenses: Administrative selling and otherexpenses are reduced as compared to last year. However due to the provision for Bad &Doubtful debts of Rs 50.22 Lacs it shows increase.

Project Expenses: Project expenses are in line with the previous year expenses withrespect to revenues.

Interest & Other Financial Charges: Interest and other financial charges havemarginally increased mainly on account of Interest on Term Loan and Interest on Servicetax payments.

Depreciation: There is marginal decrease in Depreciation due to sale of Plant &Machinery of Rs 16.63 Lacs.

BUSINESS OUTLOOK:

The Business Outlook on Domestic demand for the services is very optimistic due tolarge plans outlays and reforms to expedite massive infrastructure development push topropel double digit growth rate of economy. Several opportunities are likely to emergefrom related sectors like Railways Airports Ports Smart Cities and Housing besidesRoadways. A mix of long term strategies and agile responses for short term expansion ofmarket is planned. Your Company shall strive to expand its footprints intensifyoperations in domestic geographies and widen its client base. Your Company is effectivelytargeting specific opportunities to maximize stakeholder's wealth.

During the financial year 2015-16 your Company was awarded with the following project:

Consultancy services for preparation of feasibility study and detailed project reportof Access Control Nagpur- Mumbai Super Communication Expressway (covering 80 kms)Package- V (Konkan Revenue Section) with contracted fees of Rs 4 Crores. Thereafterduring the first quarter of Current Financial Year DPR Consultancy Contracts withcontracted fees of Rs 18.23 Crores were bagged by the Company and Contracts with fees ofRs 4.92 Crores are eligible for award on Bid Opening. The revenues thereof shall getreflected from Financial Year 2016-17 onwards.

CAPITAL EXPENDITURE:

During the year the company has incurred capital expenditure of Rs 2.06 Lacs mainly onaddition of computers and fire systems.

DIVIDEND:

In order to conserve the resources for future growth of the Company your Directors donot recommend dividend for the year under review.

PUBLIC DEPOSITS:

During the year under review your Company has not accepted any deposits within themeaning of Section 73 and 76 of the Companies Act 2013 read with Companies (Acceptance ofDeposits) Rules 2014.

SHARE CAPITAL:

There was no change in share capital of the Company during the Financial Year 2015-16.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

In accordance with the provisions of Section 152 of the Companies Act 2013 read withCompanies (Management & Administration) Rules 2014 and Articles of Association of theCompany Mr. Pankaj Shah Director of the Company retires by rotation at the ensuingAnnual General Meeting and being eligible has offered himself for re-appointment.

Mr. Siddharth Shah was re-appointed as an Executive Director of the Company w.e.f. 6thJuly 2016 subject to approval of the shareholders of the Company.

Your Board recommends their re-appointment.

Brief resume of the Directors proposed to be appointed/re-appointed as stipulated underRegulation 36(3) of SEBI (Listing Obligation and Disclosure Requirements) Regulations2015 (hereinafter referred to as 'Listing Regulations') and SS-2 are given in the Noticeconvening the 28th Annual General Meeting of the Company.

Mr. Manoj Shah Chairman and Managing Director of the Company resigned w.e.f. 13thOctober 2015.

Mr. Ashok Mehta and Mr. Mohandas Adige Independent Directors of the Company resignedw.e.f. 14th August 2015 and 30th May 2016 respectively.

The Board expresses its appreciation for their valuable guidance as Director of theCompany.

The Company has received declaration from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under sub-section (6)of Section 149 of the Companies Act 2013 and Listing Regulations.

During the year under review Mr. Pankaj Shah Whole-Time Director re-designated asNon-Executive Director w.e.f. 13th October 2015.

During the year under review In accordance with the provisions of Section 203 of theCompanies Act 2013 read with Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 Mr. Sanjay Khare was appointed as Chief Financial Officer of theCompany w.e.f. 9th February 2016 in place of Mr. Nileshkumar Jain who resigned w.e.f.13th October 2015.

MEETINGS OF THE BOARD:

The Board meets at regular intervals to discuss and decide on Company's / businesspolicy and strategy apart from other business of the Board. A tentative annual calendar ofthe Board and Committee Meetings is informed to the Directors in advance to facilitatethem to plan their schedule and to ensure meaningful participation in the meetings.

The notice of Board meeting is given well in advance to all the Directors of theCompany. Usually meetings of the Board are held at the registered office of the Company.The agenda of the Board / Committee meetings is circulated Seven days prior to the date ofthe meeting.

During the year under review the Board met 5 (Five) times as per details given in theReport on Corporate Governance. The intervening gap between the two consecutive meetingswas within the period prescribed under the Companies Act 2013.

ANNUAL EVALUATION OF PERFORMANCE BY THE BOARD:

In terms of applicable provisions of the Companies Act 2013 read with Rules framedthereunder and Regulation 17 of Listing Regulations read with Part D of Schedule II of theListing Regulations the Board of Directors has put in place a process to formallyevaluate the effectiveness of the Board along with performance evaluation of each Directorto be carried out on an annual basis.

Pursuant to the provisions of the Companies Act 2013 and Listing Regulations theevaluation of the Board and its performance the directors individually and the working ofits Audit Nomination & Remuneration Committee and Stakeholder's RelationshipCommittee of the Company was carried out by the Board. A questionnaire to evaluate theperformances of each of executive and non-executive and Independent Directors is devisedand the directors are evaluated on the basis of this questionnaire. Such questions areprepared considering the business of the Company and the expectations that the Board havefrom each of the Directors. The evaluation framework for assessing the performance ofDirectors comprises of the following key areas:

i. Attendance of Board Meetings and Board Committee Meetings;

ii. Quality of contribution to Board deliberations;

iii. Strategic perspectives or inputs regarding future growth of Company and it'sperformance;

iv. Providing perspectives and feedback going beyond information provided by themanagement.

COMMITTEES OF THE BOARD:

There are currently following Committees of the Board:

1. Audit Committee

2. Stakeholders' Relationship Committee

3. Nomination and Remuneration Committee

4. Ad-hoc Committee

In addition to the aforesaid Committees the Company also has following Committees:

1. Borrowing Committee

2. Management Committee

The composition of the Committee/s after re-constitution as at 31st March 2016 isdetailed below:

Sr. No. Name of Director Audit Committee Stakeholders’ Relationship Committee Nomination & Remuneration Committee Ad Hoc Committee Borrowing Committee Management Committee
1. Mr. Manoj Shah - Member (upto 13.10.2015) - Chairman (upto13.10.2015) Chairman (upto 13.10.2015) Chairman (upto 13.10.2015)
2. Mr. Pankaj Shah Member Member - Member (upto 13.10.2015) Chairman (w.e.f. 13.10.2015) Chairman (w.e.f. 13.10.2015)
3. Mr. Siddharth - - - Chairman (w.e.f.13.10.2015) - Member
Shah Member (w.e.f.13.10.2015) (w.e.f.13.10.2015)
4. Mr. Ashok Mehta Member (upto 14.08.2015) - Member (upto 14.08.2015) - - -
5. Mr. Mohandas Adige Member (upto 30.05.2016) - - - Member (upto 30.05.2016) Member (upto 30.05.2016)
6. Mr. Sandeep Batta Chairman Chairman Chairman Member - -
7. Mr. Deepak Mehta Member Member Member Member Member -
8. Ms. Ankita Shah - - Member (w.e.f.14.08.2015) - - -
9. Mr. Chetan Shah - - - - Member Member

Details of the Committees with respect to their terms of reference meetings andattendance at the meetings held during the year are provided in the Report on CorporateGovernance forming part of this Annual Report.

AUDIT COMMITTEE AND ITS COMPOSITION:

The Audit Committee is duly constituted as per the provisions of Section 177 of theCompanies Act 2013 and Regulation 18 of Listing Regulations. The composition of the AuditCommittee is provided in Report on Corporate Governance.

APPOINTMENT AND REMUNERATION POLICY:

Pursuant to provisions of Section 178 of the Companies Act 2013 and Regulation 19 ofListing Regulations and on the recommendation of the Nomination & RemunerationCommittee the Board has adopted a policy for selection appointment and remuneration ofDirectors and Key Managerial Personnel. The salient features of Remuneration Policy arestated in the Report on Corporate Governance.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Pursuant to the provisions of Section 177 of the Companies Act 2013 and Regulation 22of Listing Regulations the Company has devised a Vigil Mechanism (Whistle Blower) Policyto deal with instance of fraud mismanagement and unethical behavior if any. Themechanism provides for adequate safeguards against victimization of employees who avail ofthe mechanism and also provides for direct access to the Chairman of the Audit Committeein the exceptional cases. The details of Vigil Mechanism (Whistle Blower) Policy isexplained in the Report on Corporate Governance and also posted on the website of theCompany at http://www.artefactprojects.com/Revised%20Whistle%20Blower%20Policy.pdf

We affirm that during the financial year 2015-16 no employee or director or any otherperson was denied access to the Audit Committee.

RISKS AND AREAS OF CONCERN:

The Company has laid down a well-defined Risk Management Policy covering the riskmapping trend analysis risk exposure potential impact and risk mitigation process. Adetailed exercise is being carried out to identify evaluate manage and monitoring ofboth business and non-business risk. The Board periodically reviews the risks and suggestssteps to be taken to control and mitigate the same through a properly defined framework.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134(3)(c) of the Companies Act 2013 yourdirectors state and confirm that:

a. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;

b. the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit of the company for that period;

c. the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 thecompany and that such internal financial controls are adequate and were operatingeffectively; and

f. the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

EXTRACT OF ANNUAL RETURN:

An extract of Annual Return in Form MGT-9 is appended to this Report as Annexure - I.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The details of loans guarantee or investment under Section 186 of the Companies Act2013 are given under Notes on Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All the Related Party Transactions that were entered into during the Financial Yearwere on Arm's Length Basis and were in Ordinary course of business. Pursuant to Section134 (3) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules2014 Form AOC-2 is appended to this Report as Annexure - II.

However there are certain transactions which are material in nature as per theRegulation 23 of Listing Regulations and Company seeks approval of the shareholders forthe same in the ensuing Annual General Meeting of the Company.

In accordance with the provisions of Regulation 23 of Listing Regulations the Companyhas formulated the Related Party Transactions Policy (the Policy) and the same is uploadedon the website of the Company i.e.http://www.artefactprojects.com/Policy%20on%20Related%20Party%20Transaction.pdf

PARTICULARS OF EMPLOYEES AND REMUNERATION:

Pursuant to Section 197 of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 details ofremuneration paid to all the Directors/Employees and the details of the ratio ofremuneration of each Director to the median employee's remuneration is provided in Annexure-III - A.

Other information as required under the said provisions is appended to this report as AnnexureIII - B.

During the year under review no employee was in receipt of remuneration exceeding thelimits as prescribed under provisions of Section 197 of the Companies Act 2013 and Rule5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO:

Information in terms of requirement of clause (m) of Sub-Section (3) of Section 134 ofthe Companies Act 2013 regarding Conservation of Energy Technology Absorption andForeign Exchange Earnings and Outgo read along with Rule 8 of the Companies (Accounts)Rules 2014 is as follows:

A. CONSERVATION OF ENERGY:

i. Installation of Energy saving devices like Infra-Red motion detectors light sensorsavoids wastage of energy by switching off bases upon activity in the area.

ii. Improved monitoring of energy consumption through smart metering and integrationwith building management systems.

iii. Creating awareness among employees to conserve energy and follow protocols whileleaving the workplace.

iv. While procurement of equipment focus is on energy efficient systems for greenerfuture.

v. Use of Solar Energy for consumption at Head Office instead of water heater therebyreducing thermal energy usage and conserving energy.

B. TECHNOLOGY ABSORPTION AND BENEFITS:

With the advent of new infrastructure the IT Systems and software's used by theCompany are installed as per international standards. The major technological baseincludes the following:-

i. Installation of contemporary IT Hardware and Infrastructure including GPS systemVPN Connectivity Professional Audio System SQL Server Database Life-Size VideoConferencing etc.

ii. Use of Internet based communication and advanced technology has reduced papercommunication wherever possible and has resulted in a quicker and transparent informationsharing system.

iii. Purchase of printers which use low ink thus saving costs and resources.

iv. The benefits derived from Technology absorption are higher efficiency betterreliability and availability reduced maintenance environment friendly atmosphere andreduction in printing cost.

v. The Company continues to use the latest technologies for improving the quality ofits services. The Company's operations do not require significant import of technology.

A) Foreign Exchange Earnings and outgo:

(Amount in Rs )
Particulars For the year ended 31st March 2016 For the year ended 31st March 2015
Foreign exchange earned Nil Nil
Expenditure in foreign currency Nil Nil

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:

There were no significant or material orders passed by any regulator or court ortribunal which can impact the going concern status of the Company or will have bearing onCompany's operations in future.

STATUTORY AUDITORS:

M/s. Chaturvedi & Shah Chartered Accountants Mumbai (FRN: 101720W) and M/s.Naresh Patadia & Co. Chartered Accountants Nagpur (FRN: 106936W) were appointed asJoint Statutory Auditors in the 26th Annual General Meeting (AGM) to hold office from theconclusion of 26th AGM till the conclusion of 29th AGM to be held for financial yearending 31st March 2017.

Your Directors recommend the ratification for appointment of M/s. Chaturvedi &Shah Chartered Accountants Mumbai (FRN: 101720W) and M/s. Naresh Patadia & Co.Chartered Accountants Nagpur (FRN: 106936W) as Joint Statutory Auditors of the Companyand to fix the remuneration for the Financial Year ending 31st March 2017.

AUDITOR'S REPORT:

REPLIES TO THE OBSERVATIONS MADE IN THE STATUTORY AUDITORS' REPORT:

i. Auditors' comments in their Independent Standalone Auditors' Report under Basis forQualified Opinion and in Independent Consolidated Auditors' Report under Basis forQualified Opinion read along with note no.15.01 to the Standalone Financial Statementsand note no.16.01 to the Consolidated Financial Statements respectively areself-explanatory. However the Trade Receivables outstanding are mostly from theGovernment Authorities who do not have a practice of issuing balance confirmation and thesaid debts are recovered in the normal course of business working cycle.

However from the experience in dealing with such clients where payments are usuallydelayed due to procedural reasons management is fully confident about recovery of thecontracted and documented outstandings and hence no provision for doubtful debts isrequired.

ii. Auditors' comments in their Independent Standalone Auditors' Report under Basis forQualified Opinion and in Independent Consolidated Auditors' Report under Basis forQualified Opinion read along with note no.19.01 to the Standalone Financial Statements andnote no.20.01 to the Consolidated Financial Statements respectively. The amount writtenoff in the books is after serving due notices since the above amounts are not payable asper the retainership contract. In one case it is contested. None of the other retainershave made any claims. The liabilities are time barred too.

REPLIES TO THE OBSERVATIONS MADE IN THE STATUTORY AUDITORS' REPORT ON THE INTERNALFINANCIAL CONTROLS:

In the paragraph titled "Qualified Opinion" in the Annexure A to theIndependent Auditor's Report related to the Internal Financial Controls your directorssubmit the following explanation to the observations of the Auditors : i. Management hasalready strengthened the recovery efforts focusing on outstanding project recovery. Due tothis efforts the company succeeded in recovery of Rs 68.51 Lacs in past three months andothers are in progress. The recovery of an amount of Rs 140.31 Lacs from Airport Authorityof India (AAI) is a case where an Arbitrator has been decreed in favor of company. AAI hasapplied to High Court to stay the Award which is yet to be admitted. Management isconfident of its recovery and therefore the provision made in their opinion for Bad &Doubtful Debts is sufficient.

ii. The accounting software used is Tally.ERP 9. The option for amendment editingdeleting is blocked for all employees.

Once Internal & Statutory Audit is completed and the entries and provision asrequired are made the books are closed quarterly for all users. Hence there is unlikelychance of deletion of any entry in the books of accounts audited and finalized.

SECRETARIAL AUDITORS:

Pursuant to the provisions of Section 204 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Boardhad appointed M/s. Manish Ghia & Associates Company Secretaries Mumbai as theSecretarial Auditors to conduct Secretarial Audit of the Company for the Financial Year2015-16. The Secretarial Audit Report for the Financial Year under review is appended tothis report as Annexure IV.

INTERNAL AUDITORS:

Pursuant to the provisions of Section 138 of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 on recommendation of Audit Committee the Boardappointed M/s. Nitin Alshi & Associates Chartered Accountants Nagpur (FRN: 116875W)as Internal Auditor of the Company. The Internal Auditor has given his reports onquarterly basis to the Audit Committee. Based on the report of internal audit managementundertakes corrective action in the respective areas and strengthens the levels ofInternal Financial and other operational controls.

INTERNAL FINANCIAL CONTROL:

The Board has adopted a formal policy for ensuring the orderly and efficient conduct ofits business. The Audit Committee evaluates the efficacy and adequacy of financial controlsystem in the Company its compliance with operating systems accounting procedures andpolicies at all locations of the Company and strives to maintain the Standard in InternalFinancial Controls.

REPORT ON CORPORATE GOVERNANCE:

Pursuant to Regulation 34 (3) read with Schedule V of Listing Regulations thefollowing have been made a part of the Annual

Report and are attached to this report:

• Management Discussion and Analysis

• Report on Corporate Governance

• Declaration affirming Compliance with Code of Conduct of Board of Directorsand Senior Management

• Auditor's Certificate regarding compliance with conditions of CorporateGovernance

SUBSIDIARY AND ASSOCIATE COMPANIES:

As on 31st March 2016 the Company had One Subsidiary Company & One step downsubsidiary.

In accordance with Section 129(3) of the Companies Act 2013 we have preparedConsolidated Financial Statements of the Company its subsidiaries and associates whichform part of the Annual Report. A statement on the performance and financial position ofthe subsidiary and associate of the Company in the prescribed Form AOC-1 is enclosed atthe end of Consolidated Financial Statements of the Company.

In accordance with Section 136 of the Companies Act 2013 the Audited FinancialStatements including the Consolidated Financial Statements and related information of theCompany are available on our website www.artefactprojects.com.These documents will also beavailable for inspection at the registered office of the Company and of the subsidiarycompanies during business hours on all working days and during the Annual General Meeting.

During the year under review there was dilution of stake held in following 3 (Three)LLPs and hence ceased to be associates of the Company

1. Rising Minerals and Metals LLP (Ceased to be associate w.e.f. 13.03.2016)

2. Glowide Infradevelopment LLP (Ceased to be associate w.e.f. 25.03.2016)

3. Artefact Inframining LLP (Ceased to be associate w.e.f. 30.03.2016)

The Board of Directors f the Company at its meeting held on 13th August 2016approved to divest its 81.63% equity stake in its wholly owned subsidiary i.e. ArtefactInfrastructure Limited subject to approval of shareholders due to change in BusinessEnvironment in metal & mining industry change of regulatory environment. Hence it'sin the Company's interest to divest its investment in the Subsidiary.

CORPORATE SOCIAL RESPONSIBILITY:

The provisions of Section 135 of the Companies Act 2013 on Corporate SocialResponsibility is not applicable to the Company.

INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013:

The Company has zero tolerance for sexual harassment at workplace and adopted a Policyon prevention prohibition and redressal of sexual harassment at workplace in line withthe provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. There was no complaint on sexual harassment during the year underreview.

QUALITY ASSURANCE:

The Company is determined in providing consistent quality services to our clients. Weare constantly upgrading the quality systems to improve our services.

ENVIRONMENT SAFETY & HEALTH (ESH):

The Company is conscious of its strong corporate reputation and the positive role itcan play by focusing on Environment Safety & Health (ESH) issues. Towards this theCompany has set very exacting standards in ESH management. The Company recognizes theimportance of ESH issues in its operations and has established indicators to trackperformance in these areas.

The Company values the safety of its employees and constantly enhances the same forensuring a safe work place.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATESAND THE DATE OF THE REPORT:

No material changes and commitments affecting the financial position of the companyoccurred between the end of the financial year 2015-16 to which this financial statementrelates and the date of this report.

CONTINGENT LIABILITIES:

The Contingent Liabilities of the Company mainly include Bank Guarantees to client asPerformance Securities Corporate Guarantees to Bank as part of loan stipulation. Henceno cash outflow is expected.

As a risk mitigation measure and to safeguard your Company's Financial Liability ofBank Guarantees in case of any remote unlikely possibility of any professional liabilitythe performance of the Company's services is also entirely covered by a comprehensiveProfessional Liability Insurance Policy.

ACKNOWLEDGEMENT:

Your Directors would like to place on record their gratitude for all the guidance andco-operation received from the shareholders banks and other government and regulatoryagencies. Your Directors would also like to take this opportunity to express theirappreciation for the hard work and dedicated efforts put in by the employees and lookforward to their continued contribution and support.

For and on behalf of the Board of Directors
Sd/- Sd/-
Siddharth Shah Pankaj Shah
Place: Nagpur Executive Director Director
Date: 13 August 2016 DIN: 05304116 DIN: 00010504