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Artefact Projects Ltd.

BSE: 531297 Sector: Engineering
NSE: N.A. ISIN Code: INE885B01014
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P/E 94.29
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OPEN 33.00
CLOSE 31.45
VOLUME 5
52-Week high 42.95
52-Week low 20.25
P/E 94.29
Mkt Cap.(Rs cr) 18
Buy Price 0.00
Buy Qty 0.00
Sell Price 33.00
Sell Qty 190.00

Artefact Projects Ltd. (ARTEFACTPROJECT) - Director Report

Company director report

To

The Members

Your Directors present the 29 th Annual Report of the Company together with theAuditedFinancial Statements for the year ended on 31 st March 2017.

FINANCIAL HIGHLIGHTS:

(Rs in Lacs)

PARTICULARS STANDALONE
2016-2017 2015-2016
Net Income from operation and other income 2533.06 1733.22
Profit before Depreciation & Amortization expenses Finance
500.92 450.12
Cost and tax (EBIDTA)
Less: Depreciation and Amortization Expenses 80.45 80.56
Finance Cost 369.28 323.55
Profit before tax 51.18 46.01
Less: Provision for tax 31.93 45.05
Profit after tax 19.25 0.96
Less: Minority Interest in Income - -
Add: Share in Profits/Loss of Associates - -
Balance of Surplus as per last Balance Sheet 1421.58 1420.61
Balance available for appropriation 1440.83 1421.58
Balance of profit carried to Balance Sheet 1440.83 1421.58

2016-2017 IN RETROSPECT:

During the year Company achieved increase in turnover by around by Rs 8.38 Croresmainly on account of commencement of execution of new DPR & AE projects assignmentsresulting into increase in revenue and orders in hand. The award of IE project works &DPR Consultancy work orders with value of Rs 19.935 Crores have commenced to generaterevenue during FY 2016-17.

Manpower Cost: The manpower cost of the Company increased due to cost of additionalmanpower for new projects. The ratio of Manpower Cost is comparable to last year.

Administrative Selling & Other Expenses: Administrative selling and otherexpenses has in fact decreased even after write off of Bad Debts amounts to Rs 45.22 Lacs.

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 otherdues.

Depreciation: There is a Marginal decrease in Depreciation. Overall the Company'soperating profits compares well and is consistent with previous years.

BUSINESS OUTLOOK:

The Government has give a big boost to PPP (Public Private Partnerships) projects inInfrastructure Building. The Public Utility (Resolution of Disputes) Bill was introducedin the last Budget to resolve disputes in PPP project in speedier & time bound manner.Infrastructure Projects including Road Railway Petroleum Power & Coal are beingexpedited to maintain their implementation schedule by attracting finance quicker landacquisition environmental clearances & infrastructure support & linkages. Alarge number of projects are being taken up through EPC route with extensive Governmentfunding and budget allocations.

During the Financial year 2016-17 your Company was awarded the following projects:

Consultancy Services for Appointment of Technical Consultant to Carry Out theFeasibility Study and Preparation of Detailed Project Report for Four Laning of NationalHighway Projects in the State of Tamil Nadu and in the State of Maharashtra withcontracted fees of Rs 5.735 Crores.

During the first quarter of the Financial Year your Company bagged contracts forIndependent Engineer Services for Four lane stand alone Ring Road/bypasses in the state ofMaharashtra under NHDP Phase-VII on BOT (Hybrid Annuity) basis with contracted fees of"14.02 Crores. There are Bids under submission and finalization involving feesexceeding Rs 160 crores.

CAPITAL EXPENDITURE:

During the year the company has incurred capital expenditure of Rs 20.74 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 CompaniesAct 2013 read with Companies (Acceptance ofDeposits) Rules 2014.

SHARE CAPITAL:

There was no change in share capital of the Company during the Financial Year 2016-17.

EXTRACT OF ANNUAL RETURN:

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

Upon recommendation of Nomination and Remuneration Committee the Board of Directors atits meeting held on 2nd January 2017 re-designated Ms.Ankita Shah from Non-ExecutiveDirector to Whole-Time Director of the Company for a period of 3 years w.e.f. 2nd January2017 subject to approval of the shareholders of the Company.

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 Ms. Ankita Shah Whole-Time Director of the Company retires by rotation at theensuingAnnual General Meeting and being eligible has offered herself for re-appointment.

During the year under review in accordance with the provisions of section 149 and 152of the Companies Act 2013 read with Companies (Appointment and Qualification ofDirectors) Rules 2014 Mr. Sudhir Gupta was appointed as an Additional (Independent)Director of the Company for a period of 1 year w.e.f 31st March 2017 subject to approvalof shareholders at the ensuing Annual General Meeting. The Company has received noticealongwith requisite deposit from a member of the Company under Section 160 ofCompaniesAct 2013 proposing his candidature for the office of Independent Director of theCompany.

The Board recommends the appointment/ re-appointment of Directors aforesaid.

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 Secretarial Standards(SS-2) issued by the Institute of Company Secretaries of India (ICSI) are given in theNotice convening the 29th Annual General Meeting of the Company.

Mr. Mohandas Adige Independent Director of the Company resigned w.e.f 30th May 2016.The Board expresses its appreciation for his valuable guidance as Director of the Company.

The Company has received declaration from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under Section 149(6)of the CompaniesAct 2013 and Regulation 16(1)(b) of Listing Regulations.

MEETINGS OF THE BOARD:

The Board meets at regular intervals to discuss and decide on Company's business policyand strategy apart from other business of the Board. A tentative annual calendar of theBoard and Committee Meetings is informed to the Directors in advance to facilitate them toplan 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 in the registered office of the Company.The agenda of the Board / Committee meetings is circulated Seven days prior to the date ofthe meeting. In case of any business exigencies meetings are called and convened atShorter Notice or the resolutions are passed by Circulation and later placed in theensuing Board Meeting.

During the year under review the Board met 8 (Eight) 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 read with Schedule IV of the Companies Act 2013 andRules framed thereunder and Regulation 17 of Listing Regulations read with Part D ofSchedule II of the Listing Regulations the Board of Directors has put in place a processto formally evaluate the effectiveness of the Board along with performance evaluation ofeach Director to be carried out on an annual basis.

Pursuant to the provisions of the CompaniesAct 2013 and Listing Regulations theevaluation of the Board and its performance the directors individually and the working ofits Audit Nomination & Remuneration and Stakeholder's Relationship Committee of theCompany was carried out by the Board. A questionnaire to evaluate the performances of eachof executive and non-executive and Independent Directors is devised and the directors areevaluated on the basis of this questionnaire. Such questions are prepared considering thebusiness of the Company and the expectations that the Board have from each of theDirectors. The evaluation framework for assessing the performance of Directors comprisesof the following key areas:

i. Attendance of Board Meetings and Committee Meetings; ii. Quality of contribution toBoard deliberations; iii. Strategic perspectives or inputs regarding future growth ofCompany and it's performance; iv. Providing perspectives and feedback going beyondinformation provided by the management.

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 the following Committees:

1. Borrowing Committee

2. Management Committee

The composition of the Committees after re-constitution as at 31st March 2017 isdetailed below:

Name of Director Audit Committee Stakeholders' Relationship Committee Nomination & Remuneration Committee Ad Hoc Committee Borrowing Committee Management Committee
1. Mr. Pankaj Shah Member Member Member (w.e.f 02.01.2017) Chairman Chairman Chairman
2. Mr. Siddharth Shah - - - Member - Member
3. Ms. Ankita Shah - - Member (upto 02.01.2017) - - -
4. Mr. Sandeep Batta Chairman Chairman Chairman Member - -
5. Mr. Mohandas Adige Member (upto 30.05.2016) - - - Member (upto 30.05.2016) Member (upto 30.05.2016)
6. Mr. Deepak Mehta Member Member Member Member Member -
7. Mr. Sudhir Gupta (w.e.f. 31.03.2017) - - - - - -
8. 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 thisAnnual 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 theAuditCommittee is provided in Report on Corporate Governance.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Pursuant to the provisions of Section 177 of the CompaniesAct 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 theAudit 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 2016-17 no employee or director or any otherperson was denied access to the Audit Committee.

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.

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 mitigationprocess.Adetailed exercise is being carried out to identify evaluate manage andmonitoring of both business and non-business risk. The Board periodically reviews therisks and suggests steps to be taken to control and mitigate the same through a properlydefined framework.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134(3)(c) of the CompaniesAct 2013 yourdirectors state and confirm that: a. in the preparation of the annual accounts theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any; b. the directors have selected such accounting policiesand applied them consistently and made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the company at theend of the financial year and of the profit of the company for that period; c. thedirectors have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of thecompany and for preventing and detecting fraud and other irregularities; d. the directorshave prepared the annual accounts on a going concern basis; e. the directors have laiddown internal financial controls to be followed by the company and that such internalfinancial controls are adequate and were operating effectively; and f. the directors havedevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively.

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 in Ordinary course of business and on Arm's Length Basis and are reported in theNotes to the Financial Statements. Pursuant to provisions of Section 134 (3) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 Form AOC-2is appended to this Report as

Annexure - II.

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 athttp://www.artefactprojects.com/Policy%20on%20Related%20Party%20Transaction.pdf

PARTICULARS OF EMPLOYEES AND REMUNERATION:

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

Further the information as required as per the provisions of Section 197 of theCompanies Act 2013 read with Rule 5(2) and Rule 5 (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is appended to this report as

Annexure III- B.

PARTICULARS OF CONSERVATION OF ENERGY TECHONOLOGY 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 OFENERGY:

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. Improvedmonitoring of energy consumption through smart metering and integration with buildingmanagement systems. iii. Creating awareness among employees to conserve energy and followprotocols while leaving the workplace. iv. While procurement of equipment focus is onenergy efficient systems for greener future. v. Use of Solar Energy for consumption atHead Office instead of water heater thereby reducing thermal energy usage and conservingenergy.

B. TECHNOLOGYABSORPTIONAND 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 SQLServer Database Life-Size VideoConferencing etc. ii. Use of Internet based communication and advanced technology hasreduced paper communication wherever possible and has resulted in a quicker andtransparent information sharing system. iii. Purchase of printers which use low ink thussaving costs and resources. iv. The benefits derived from Technology absorption are higherefficiency better reliability and availability reduced maintenance environment friendlyatmosphere and reduction in printing cost. v. The Company continues to use the latesttechnologies for improving the quality of its services. vi. The Company's operations donot require significant import of technology.

C. FOREIGN EXCHANGE EARNINGSAND OUTGO:

(Amount in Rs)

Particulars For the year ended 31st March 2017 For the year ended 31st March 2016
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:

As per Section 139 of the Companies Act 2013 read with Companies (Audit and Auditors)Rules 2014 the term of M/s. Chaturvedi & Shah Chartered Accountants Mumbai (FRN:101720W) and M/s. Naresh Patadia & Co. Chartered Accountants Nagpur (FRN: 106936W) asthe Joint Statutory Auditors of the Company expires at the conclusion of the ensuingAnnual General Meeting. The Joint Auditors has functioned as such for more than 5consecutive years & has been appointed for a period of 3 consecutive years at the 26th Annual General Meeting held on 29 th September 2014. The existing Joint Auditorscannot continue after the completion of the said transitional period of three years.Hence the company proposes to appoint new Statutory Auditor to comply with Section 139 ofthe CompaniesAct 2013 in their place.

On recommendation of Audit Committee the Board of Directors of the Company at itsmeeting held on 23 rd May 2017 have appointed M/s. Banthia Damani & AssociatesChartered Accountants Nagpur (FRN: 126132W) as the Statutory Auditor of the Company fora period of 5 years to hold office from the conclusion of 29 thAnnual General Meeting tillthe conclusion of 34 thAnnual General Meeting of the Company subject to approval ofshareholders in place of retiring auditors M/s. Chaturvedi & Shah CharteredAccountants Mumbai (FRN: 101720W) and M/s. Naresh Patadia & Co. CharteredAccountants Nagpur (FRN: 106936W).

The Company has received written consent and a certificate that they satisfy thecriteria provided under Section 141 of the CompaniesAct 2013 and if appointed theirappointment would be within the limits prescribed under Section 139 of the Companies Act2013.

Your Directors recommend the appointment of M/s. Banthia Damani & AssociatesChartered Accountants Nagpur (FRN: 126132W) as the Statutory Auditor of the Company tohold office from the conclusion of the 29 thAnnual General Meeting upto the conclusion of34 thAnnual General Meeting of the Company and to audit financial statements of theCompany.

The Board also places on record its sincere appreciation for the very high quality ofProfessional services rendered by M/s. Chaturvedi & Shah CharteredAccountants Mumbaiand M/s. Naresh Patadia & Co. CharteredAccountants Nagpur.

AUDITOR'S REPORT:

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

1. Auditor's comments in their Independent Auditors Report under Basis for QualifiedOpinion read along with the note no. 15.01 are self-explanatory. The trade receivablesare entirely from GovernmentAuthorities whose accounting system does not have any systemof balance confirmation. But the Receipted Bills and confirmatory documents andcorrespondences of compliances are available on record for contractual compliances forreceivable. Hence the said debtors are recoverable in the normal course of businessbeing contractually payable as per express provisions of agreement.

The debtors exceeding six months are calculated and stated as per Auditors Report is Rs992.47 Lacs. However as per the contract agreement the debtors exceeding six months basedon RA Bill Payment Basis for current and ongoing project assignments stood at Rs 582.58Lacs. The fact is supported by Clause No. 6.4 (C) of the Consultancy Contract beingcurrent month outstanding as mentioned in Clause No. 6.4(d) of the Consultancy Contractexecuted with the client NHAI (National HighwayAuthority of India).

Auditors to arrive at the Debtors ageing of more than six months have considered onlyFIFO method of Billing. The delay of payments being mainly due to procedural reasonsmanagement is confident about its recovery being as per agreement and well documented.

2. Auditor's comments in the Independent Auditors Report under Basis for QualifiedOpinion read along with note no. 9.01 is self-explanatory. The management has reconciledits Service Tax liability and available Cenvat Credit for set off against the payable duesand has taken up the filling of Service Tax Returns on urgency to comply with transit tothe GST.

The Company has made adequate provision towards possible liability towards interest fordelayed payments and delayed filling of Returns. There is remote possibility of anyadditional liability thereon as per management.

3. Auditor's comments in the IndependentAuditors Report under Basis for QualifiedOpinion read along with note no. 19.01 where company has written back Retainership Fees& salaries payable amounting to Rs 26.89 Lacs for the reasons that the claims are notpayable. Management is of the view that as the claims are not payable due to lack ofcompliances on part of the payee and absence of client certification thereof as well asconsidering the period lapsed beyond limitation period and being barred by limitationare not payable contractually. In view thereof the management is of the opinion that noliability shall accrue in these cases.

4. Auditor's comments in the IndependentAuditors Report under Basis for QualifiedOpinion read along with note no. 17.04 where Auditors have expressed inability to commenton the recoverability of the amount advanced to a party of Rs 72.72 Lacs. Management hasactually paid the sponsorship cost of higher studies abroad of Engineering. As per thecontracted terms the Sponsored Engineer is yet to render the services of 2 years afterthe studies and return to India thereafter. There has been delay but the management isconfident of availment of services as envisaged as per the executed contract or itsrecovery in case otherwise.

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

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 theAuditors:

i) Management has strengthened the recovery efforts for timely recovery of Bills byassignment to a specialized Team solely which includes Financial Expert QualifiedEngineers etc. to felicitate efforts on technical issues and contractual issues if anyfor clearance of dues. We have also utilized the Centralized Public Grievance Redressaland Monitoring System (PG

Portal) to address delay in recovery of Contractual Dues from the client. During pasttwo years company has recovered Rs 154.65 Lacs thereof besides this the Company has beenawarded a favourableArbitrationAward of Rs 123 Lacs for dues from Airport Authority ofIndia.

Further substantial dues are expected to be recovered in the current Financial Year dueto the systematic assignment to the specialized task force team.

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 M/s. ManishGhia &Associates Company Secretaries Mumbai are the SecretarialAuditors of theCompany for the Financial Year 2016-17. The Secretarial Audit Report for the FinancialYear under review is appended to this report as Annexure IV.

REPLY TO THE OBSERVATIONS MADE IN THE SECRETARIAL AUDITOR'S REPORT :

The SecretarialAuditors reported that the vacancy in the office of Independent directorwas filled beyond the time limit as provided under the Companies Act 2013 & ListingRegulations 2015. During the period of such vacancy the Company received certainprofiles for the said position of Independent Director and after due evaluation &identification by Nomination & Remuneration Committee the Board selected mostsuitable candidate for the said position and appointed Mr. Sudhir Gupta as an IndependentDirector of the Company. As on 31 st March 2017 the composition of Board of Directorswas in compliance of Listing Regulations 2015.

INTERNAL AUDITORS:

Pursuant to provisions of Section 138 of the Companies Act 2013 read with Companies(Accounts) Rules 2014 on recommendation of Audit Committee M/s. P.T. Chhabria &Co. Chartered Accountants Nagpur (FRN: 101790W) are appointed as the InternalAuditors ofthe Company. The InternalAuditor submits his reports on quarterly basis to theAuditCommittee. Based on the report of internal audit management undertakes corrective actionin the respective areas and strengthens the levels of Internal Financial and otheroperational 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 control system inthe Company its compliance with operating systems accounting procedures and policies atall locations of the Company and strives to maintain the Standard in Internal FinancialControls.

REPORT ON CORPORATE GOVERNANCE:

Pursuant to Regulation 34(3) read with Schedule V of Listing Regulations the followinghave been made a part of the Annual Report and are attached to this report:

Management Discussion andAnalysis

Report on Corporate Governance

Declaration affirming Compliance with Code of Conduct of Board of Directors andSenior Management

Auditor's Certificate regarding compliance with conditions of Corporate Governance.

SUBSIDIARY AND ASSOCIATE COMPANIES:

During the year under review the members of the Company approved the sale/transfer of81.63% (4000000) equity shares held in Artefact Infrastructure Limited Wholly OwnedSubsidiary of the Company by Special Resolution passed through postal ballot process theresult of which was declared on 5 th October 2016. Further Artefact InfrastructureLimited ceased to be subsidiary of the Company w.e.f 2 nd January 2017.

As on 31 st March 2017 the Company does not have any subsidiary or associatecompanies hence preparation of Consolidated Financial Statements is not applicable to theCompany. However the Company has 3 Joint Ventures namely:-

Zaidun Leeng Sdn. Bhd.-Artefact Projects.

Meinhardt Singapore Pte. Ltd.-Artefact Projects.

SheladiaAssociates Inc.-Artefact Projects- Zaidun Leeng Sdn. Bhd.

The salient features of Joint Ventures in AOC-1 as per the provisions of Section 129 ofthe Companies Act 2013 is provided in AnnexureV which is appearing after the FinancialStatements.

In accordance with Section 136 of the Companies Act 2013 the Audited FinancialStatements and related information of the Company are available on our website

CORPORATE SOCIAL RESPONSIBILITY:

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

INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND 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 THISFINANCIALSTATEMENTRELATESANDTHE DATE OFTHE REPORT:

No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year 2016-17 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. Hence no 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. Besides this the cases filed against the Companyare also reported.

CHANGE IN THE ADDRESS OF REGISTERED OFFICE OF THE COMPANY:

Change in Registered Office Address of the Company from "Artefact Towers"54/3 Chhatrapati Square Wardha Road Nagpur-440015 to Block No.107 4 th Floor"Artefact Towers" 54/3 Chhatrapati Square Wardha Road Nagpur - 440015within the local limits of the City w.e.f. 23 rd May 2017.

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
Siddharth Shah Pankaj Shah
Place: Nagpur Executive Director Director
Date: 23rd May 2017
DIN: 05304116 DIN: 00010504