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Art Nirman Ltd.

BSE: 538384 Sector: Infrastructure
NSE: ARTNIRMAN ISIN Code: INE738V01013
BSE 05:30 | 01 Jan Art Nirman Ltd
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Art Nirman Ltd. (ARTNIRMAN) - Director Report

Company director report

Dear Members

Your Director's take pleasure in presenting the 10th Annual Report of thecompany along with Audited Financial Statements for the financial year ended on 31stMarch 2021. Further in compliance with the Companies Act 2013 the company has made allrequisite disclosures in the Board Report with the objective of accountability andtransparency in its operations and to make you aware about its performance and futureperspective. The Board of Directors feels pleasure and is very much thankful to all thestakeholders of the company who have shown their trust and interest in Company.

FINANCIAL PERFORMANCE:

The highlights of financial figures for the year 2020-21 in comparative format are asunder:

Particulars for the year ended March 31 2021 March 31 2020
T otal Revenue 851978000 622298000
Financial Expense 19882000 64700000
Profit Before Depreciation and Tax 7361000 19891000
Less: Depreciation 7253000 7515000
Profit Before Tax 108000 12376000
Less: Tax Expense (including deferred tax) 96000 4209000
Profit After Tax 204000 8166000
Surplus Brought Forward 42064000 33897849
Balance Carried to Balance Sheet 42268000 42064000

STATE OF COMPANY'S AFFAIRS:

> During the year under review your Company has achieved total net sales of INR8505.69 lakhs and achieved Net Profit After Tax (NP) of INR 2.04 Lakhs.

> The Scheme "Shree Vishnudhara Gardens" 2 & 3 BHK Apartmentsshowrooms Shops and offices Residential and Commercial scheme at Gota Ahmedabad iscompleted and almost 80% units are sold.

> The company has made works contract with Art Club Private Limited for constructionof "Club Babylon" an upcoming leading Club situated near Village Bhadaj S.P.Ring Road Ahmedabad. The construction and development expenses incurred during the yearhave been shown as Construction work in progress "Club Babylon" for whichCompany has generated total revenue of INR 57460684/- during the financial year2020-21.

DIVIDEND:

Your Board of Directors feel that it is prudent to plough back the profits of theCompany for future growth of the Company and therefore do not recommend any dividend forthe year ended March 31 2021.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

Since there was no unpaid/unclaimed dividend the provision of Section 125 of theCompanies Act 2013 does not apply during the year.

CHANGE IN THE NATURE OF BUSINESS. IF ANY:

During the year there is no change in the nature of business of the Company.

RESERVES:

During the year under review the Company has closing balance of 42268000/-asReserve and Surplus as on 31.03.2021.

SUBSIDIARY JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any subsidiary Joint Ventures or associate company duringthe year. CONSOLIDATED FINANCIAL STATEMENTS:

Company doesn't have any subsidiaries and hence company is not required to prepareconsolidated financial statement for the F. Y. 2020-21.

PUBLIC DEPOSIT:

The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 ("the Act") read with theCompanies (Acceptance of Deposit) Rules 2014 during the period under review. Hence therequirement for furnishing the details of deposits which are not in compliance withChapter V of the Act is not applicable.

SHARE CAPITAL:

The authorized capital of the company is 25 crores no change made during the financialyear 2020-21.

The paid up capital of the company is INR 249560000/- .

PARTICULARS OF LOAN GUARANTEES OR INVESTMENT:

Your company provided loan to the one trust and details of Loans Guarantees andInvestments covered under the provisions of Section 186 of the Companies Act 2013 aregiven in the notes of financial statement.

PARTICULARS OF RELATED PARTY TRANSACTION:

During the year Company has entered in to related party transactions at Arm's lengthprice and disclosures in that regard have been made in Annexure A in prescribed formatAOC-2 and forms part of this report.

There are no contracts entered into by the Company which are "Not at Arm's Lengthbasis" and hence no disclosure in that regard is made.

EXTRACT OF THE ANNUAL RETURN:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act the Annual Return ason March 31 2021is available on the company's website www.artnirman.com.

DIRECTORS AND KEY MANAGEMENT PERSONNEL:

> Composition of Board:

The Board of Directors of the Company has an optimum combination of ExecutiveNonExecutive and Independent Directors in compliance with provisions of Section 149 ofCompanies Act 2013. As on 31st March 2021 the Board of Company comprises of 6(Six)Directors. The Chairman of the Board is an Executive Director.

> Directors whose term is liable to determination by retirement by rotation:

In accordance with the provisions of Companies Act 2013 and its Articles ofAssociation the term of Mr. Piyushkumar Thakkar (DIN: 07555460) being ExecutiveDirector is liable to retire by rotation and being eligible offers himself forreappointment as Director of the Company. Necessary resolution for his reappointment isplaced before you for your approval in Annual General Meeting.

> Declaration from Independent Director:

The Company has received declarations from all Independent Directors of the Companythat they continue to meet the criteria of independence as prescribed under Section 149 ofthe Companies Act 2013 and Regulation 25 of the Listing Regulations. The IndependentDirectors complied with code of conduct.

Therefore Board is duly composed as per the Companies Act 2013 provisions and SEBI(Listing Obligation and Disclosure Requirements) 2015. There is no change held in thecomposition of Board of Directors during the Financial Year 2020-21.

BOARD AND COMMITTEE COMPOSITION AND MEETINGS:

> Board Meeting and Composition:

The Board of Directors met 7 times during the financial year 2020- 2021 in accordancewith the provisions of the Companies Act 2013 and rules made thereunder. The interveninggap between two board meetings was within the period prescribed under the Companies Act2013 and as per Secretarial Standard-1. The prescribed quorum was presented for all theMeetings and Directors of the Company actively participated in the meetings andcontributed valuable inputs on the matters brought before the Board of Directors from timeto time.

7 board meeting are held as under:

20.07.2020 09.04.2020
28.10.2020 11.11.2020
12.08.2020 01.09.2020
02.04.2021
Name of Director Designation Category No ofBoard Meetings entitled to attend during the year. No of Board Meetings attended during the year
Ashokkumar Thakker CMD Promoter 7 7
Piyushkumar Thakkar ED Promoter 7 7
Dharmisthaben Thakkar NED Promoter 7 7
Krunal Mistry NED Independent 7 7
Hemang Shah NED Independent 7 5

CMD - Chairman and Managing Director ED - Executive Director NED- Non- ExecutiveDirector

> Meeting of Independent Directors:

During the year under review the Independent Directors duly met on 16thFebruary 2021 in absence of other non-independent Directors and reviewed the performanceof Non-Independent Directors and the Board as a whole reviewed the performance ofChairperson of the Company taking into account the views of the other Executive andNon-Executive Directors.

> Committee Meeting and Composition

The Company has three committees viz; Audit Committee Nomination and RemunerationCommittee Stakeholders Relationship Committee which has been established as a part of thebetter corporate governance practices and is in compliance with the requirements of therelevant provisions of applicable laws and statutes.

> Audit Committee:

The Audit Committee of the Company was originally constituted on 07.09.2016 incompliance with requirements of SEBI (LODR) Regulations 2015 and provisions of Section 177of the Companies Act 2013 read with Rule 6 of the Companies (Meetings of the Board andits Powers) Rules 2014 as amended from time to time. It adheres to the terms of referencewhich is prepared in compliance with Section 177 of the Companies Act 2013 and SEBI(LODR) Regulations 2015.

5 (Five) Audit Committee meetings were held during the year 2020-21 at the RegisteredOffice of the Company respectively on 09.04.2020 20.07.2020 12.08.2020 11.11.2020 and03.01.2021. The Company Secretary acts as Secretary to the Audit Committee.

Pursuant to provisions of Rule 7 of Companies (Meetings of Board and its Powers) Rules2014 Vigil Mechanism is being reviewed by the Audit Committee. The provisions ofRegulation 22 of SEBI (LODR) Regulations 2015 are not applicable to the Company assecurities of the Company are listed on SME platform of Stock Exchange.

The Members of the Committee are:-

ame Category Position Number of meetings entitled to attend Number of meetings attended
Krunal Mistry Independent Chairman 5 5
Ashokkumar Thakker Promoter Member 5 5
Hemang Shah Independent Member 5 5

Two third of the members of the Committee are Independent Directors and all the membersare financially literate. The composition role functions and powers of the AuditCommittee are in line with the requirements of applicable laws and regulations. The AuditCommittee shall oversee financial reporting process and disclosures review financialstatements internal audit reports related party transactions financial and riskmanagement policies auditors qualifications compliance with Accounting Standard etc. andoversee compliance with Stock Exchange and requirements concerning financial statementsand fixation of legal audit fee as well as payment for other services etc.

> Nomination and Remuneration Committee

The Nomination and Remuneration Committee was originally constituted on 07.09.2016 inaccordance with SEBI (LODR) Regulation 2015 and Section 178 of the Companies Act

2013 read with Rule 6 of the Companies (Meetings of the Board and its Powers) Rules

2014 as amended from time to time.

The Board has in accordance with the provisions of sub-section (3) of Section 178 ofthe Companies Act 2013 formulated the policy setting out the criteria for determiningqualifications positive attributes independence of a Director and policy relating toremuneration of Directors Key managerial Personnel and other employees. The said policyis available on the website of the Company.

2 (Two) meetings of the committee were held during the year 2020-21 at the RegisteredOffice of the Company on 04.09.2020 and 09.01.2021.

the Members of the Committee are as follow:

Name Category Position Number of meetings entitled to attend No. of meetings attended
Krunal Mistry Independent Chairman 2 2
Hemang Shah Independent Member 2 2
Dharmisthaben Thakkar Non Executive Director Member 2 2

> Stakeholders Relationship Committee

The Stakeholders Relationship Committee was originally constituted on 07.09.2016 incompliance with provisions of section 178 of Companies Act 2013 and requirements ofRegulation 20 of SEBI (LODR) Regulations 2015. Company Secretary is the ComplianceOfficer who acts as the Secretary to the Committee.

4 (Four) meetings were held during the year 2020-21 at the Registered Office of theCompany on 13.04.202010.07.202021.10.2020 and 09.01.2021.

The Members of the Committee are as under:

Name Category Position Number of meetings entitled to attend Number of meetings attended
Krunal Mistry Independent Chairman 2 2
Ashokkumar Thakker Promoter Member 2 2
Hemang Shah Independent Member 2 2

The Stakeholders Relationship Committee looks into shareholders' complaints related totransfer of shares non-receipts of balance sheet besides complaints from SEBI StockExchanges Court and various Investor Forums. It oversees the performance of the Registrarand Transfer Agent and recommends measures for overall improvement in the quality ofinvestor services. The Company is in compliance with the SCORES which was initiated bySEBI for processing the investor complaints in a centralized web based redress system andonline redressal of all the shareholder's complaints.

POLICY ON DIRECTORS' APPOINTMENT:

Pursuant to provisions of section 178 read with 134(3)(e) of Companies Act 2013 TheNomination and Remuneration Committee (NRC) has approved the criteria and process foridentification/ appointment of Directors which are as under:

> Criteria for Appointment:

The proposed Director shall meet all statutory requirements and should:

> Possess highest values ethics and integrity.

> Not have any direct or indirect conflict with business operations.

> Be willing to devote time and efforts.

> Have relevant experience.

> Have understanding about corporate functionality.

> Understand real value of stakeholders.

> Process for identification of Directors / Appointment of Directors:

> Board Members may suggest any potential person to the Chairman of the Companymeeting the above criteria. If the chairman deems fit recommendation will be made by himto NRC.

> Chairman himself can also recommend a person to NRC.

> NRC shall process and evaluate the proposal and shall submit their recommendationto Board.

> Board shall consider such proposal on merit and decide suitably.

> Criteria for Performance Evaluation:

The Board considered and approved criteria for performance evaluation of itself andthat of its committees and individual directors.

> Criteria for Board Evaluation:

> Focus on strategic decisions.

> Qualitative discussion and processes.

> Criteria for Committee Evaluation:

> Fulfillment of allotted responsibilities.

> Effectiveness of recommendation meetings.

> Criteria for Independent and Non Independent Directors' evaluation:

> Contribution through their experience and expertise.

> Focus on Stakeholders' interest.

MANNER OF EVALUATION OF BOARD. ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

The Evaluation of Board its Committees and Individual Directors was carried out as perprocess and criteria laid down by the Board of Directors based on the recommendation ofthe Nomination and Remuneration Committee.

The obtaining and consolidation of feedback from all Directors in this regards wascoordinated by the Chairman of Independent Directors' meeting for Board andNon-Independent Directors while the process of evaluation of the Independent Directors wascoordinated by the Chairman of the Company. Based on this Chairman of the Company briefthe Board and each of the Individual Directors as applicable.

REMUNERATION POLICY:

The Company has formulated a policy relating to the remuneration of the Directors KeyManagerial Personnel and other employees of the Company which is as under:

Components of Remuneration:

> Fixed Pay comprising Basic Salary HRA Car Allowance (applicable to GeneralManagers &above employees) Conveyance Allowances / Reimbursement Company'scontribution to Provident Fund Superannuation Fund Gratuity etc.

> Variable Pay which is either in the form of: Commission to Managing Directors andCommission to Whole-time Directors

A) Annual Appraisal process:

- Annual Appraisals are conducted following which annual increments and promotions indeserving cases are decided once in a year based on:

- Employees self-assessment

- Assessment by Immediate Superior and

- Assessment by Head of Department

Annual Increment leading to an increase in Fixed Pay consists of Economic Rise based onAll India Consumer Price Index published by the Government of India or Internal Surveywherein inflation on commonly used items is calculated.

B) Remuneration of Independent Directors:

The Company has formulated a policy for the remuneration of Independent Directors asfollows:

> Reimbursement of Expenses incurred by Independent Directors for attending anymeeting of the Board.

CHIEF FINANCIAL OFFICER:

Mr. Chetankumar Modi appointed as a Chief Financial Officer of the Company on September11 2019.

COMPANY SECRETARY:

Ms. Yesha Yatishbhai Shah a member of Institute of Company Secretaries of India isholding post of Company Secretary of the Company from June 01 2019.

COMPLIANCE OFFICER:

The Compliance officer of the Company is Ms. Yesha Yatishbhai Shah being the member ofInstitute of Company Secretaries of India designated as Company Secretary and holding thepost of compliance officer since June 01 2019.

STATEMENT ON FORMAL ANNUAL EVALUATION OF BOARD:

Nomination and Remuneration Committee annually evaluates the performance of individualdirectors Committees and of the Board as a Whole in accordance with the formal systemadopted

by the Board. Further the Board also regularly in their Board Meeting held forvarious purposes evaluates the performance of the individual directors committees and ofthe Board as a whole. The Board considers the recommendation made by Nomination andRemuneration Committee in regard to the evaluation of Board Members.

DIRECTORS' RESPONSIBILITY STATEMENT:

In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:

(a) In the preparation of the annual accounts for the financial year ended March 312021 the applicable accounting standards have been followed along with proper explanationrelating to material departures.

(b) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 and loss of the Company for that period under review.

(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 had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

(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.

MATERIAL CHANGES AND COMMITMENTS. IF ANY. AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAS OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

After the close the Financial Year on 31st March 2021 and before the date ofthe Report no material changes affecting the financial position of the Company haveoccurred:

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 are no significant and material orders passed by the regulators or courts ortribunals impacting the going concerns status and Company's operations in future.

AUDITORS:

> Statutory Auditor:

M/s. Arpan Shah & Associates Chartered Accountants (FRN.: 125049W Peer ReviewCertificate No. 011646) Ahmedabad appointed as a Statutory Auditors of the Company to

hold office until the conclusion of 13th Annual General Meeting of the Company held onFY 2023-2024."

There are no qualifications reservations or adverse remarks made by M/s. Arpan Shah& Associates Chartered Accountants the Statutory Auditors of the Company in theirreport.

> Board's Comment on the Auditors' Report:

Notes to Accounts & Auditors remarks in the Auditors' report are self explanatoryand do not call for any further comments.

> Secretarial Auditor:

As required under provisions of Section 204 of the Companies Act 2013 and Rules framedthereunder the Board has appointed the Secretarial Auditors of the Company M/s YashMehta & Associates Practicing Company Secretaries for conducting the SecretarialAudit for the FY 2020-21.

Secretarial Audit Report in Form MR-3 issued by the Secretarial Auditor of the Companyfor the year ended on March 31 2020 is attached to the Director's Report as Annexure- B.

> Board's Comment on the Secretarial Audit Report:

a. Further the Company is irregular in depositing the Statutory dues to the regulatingauthority such as EPFO ESIC etc.

- The company is regularly deposit the dues but last year due COVID19 it is notpossible for the company to deposit dues within time due to scarcity of resourcesotherwise that company regularly deposit all the dues to the authority.

b. The Company has not made any provisions for the gratuity payable to the employees.

- The company is under process of adopting the gratuity policy for its employees.

> Cost Audit & Cost Record:

Central Government has notified audit of the cost records maintained by the company inrespect of the Products/services manufactured by the company for the year under review.Our company is not manufactured any products so it is not required to be maintained anycost record and conducting any cost audit as per central government direction undersection 148 of the Companies Act 2013 and the Companies (Cost Records and Audit) rules2014.

> Internal Audit:

D. K. Thakkar & Co Chartered Accountant Ahmedabad was appointed as InternalAuditor of the Company to conduct Internal audit pursuant to the provisions of Section 138of the Companies Act 2013 and rules made there under.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The information required under Section 197 of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are provided in separate annexure forming part of this Report as Annexure-C.

The statement containing particulars of employees as required under Section 197 of theCompanies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 will be provided upon request. In terms of Section 136of the Companies Act 2013 the Report and Accounts are being sent to the Members andothers entitled thereto excluding the information on employees' particulars which isavailable for inspection by the members at the Registered Office of the Company duringbusiness hours on working days of

the Company. If any member is interested in obtaining a copy thereof such Member maywrite to the Company Secretary in this regard.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The provisions of Corporate Social Responsibility (CSR) are not applicable to theCompany and hence no disclosures have been made in this regard.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO

The Company is not engaged in manufacturing of goods and hence Company does notconserve energy. Company has neither adopted any Technology nor has spent amount foradoption of Technology during the year. There is no amount of Foreign Exchange inflow oroutflow during the year and hence no disclosures have been made in this regard.

ENVIRONMENT HEALTH AND SAFETY (EHS)

The Company accords the highest priority to health environment and safety. The Companydoes not carry on manufacturing operations. The Company takes at most care for theemployees and ensures compliance with the applicable rules and regulation applicable tothe Company.

STATEMENT REGARDING THE DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY:

The Company has developed risk management policy. The Company has in place a mechanismto identify assess monitor and mitigate various risks towards the key businessobjectives of the Company. Major risks identified by the business and functions aresystematically addressed through mitigating actions on a continuing basis. The RiskManagement is being taken care by the Audit Committee of the Company.

ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls with reference tofinancial statements. The Board has inter alia reviewed the adequacy and effectiveness ofthe Company's internal financial controls relating to its financial statements.

During the year no reportable material weakness was observed.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As stipulated in Rule 34(2)(e) read with Schedule V of SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 the Management Discussion and Analysis Reportis annexed as Annexure D and forms part of this Annual Report.

CORPORATE GOVERNANCE REPORT

Your Company has been complying with the principals of good Corporate Governance overthe years and is committed to the highest standards of compliance. Pursuant to regulation15(2)(b) of the SEBI (LODR) Regulations 2015 the compliance with the corporate governanceprovisions as specified in regulations 17 to 27 and clauses (b) to (i) of Regulation 46(2) and para C D and E

of schedule V shall not apply to the listed entity which has listed its specifiedsecurities on the SME Exchange.

Therefore the Corporate Governance Report is not applicable on the Company andcertificates related thereto have not been obtained and therefore not disclosed in theAnnual Report.

DISCLOSURE WITH RESPECT TO DEMAT SUSPENSE ACCOUNT / UNCLAIMED SUSPENSE ACCOUNT:

Pursuant to Para F of Schedule V of SEBI (LODR) Regulations 2015 there are no sharesheld in the Demat Suspense Account or Unclaimed Suspense Account.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION& REDRESSAL) ACT. 2013.

The Company has always been committed to provide a safe and conducive work environmentto its employees. Your Directors further state that during the year under review therewere no cases filed pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

ACKNOWLEDGEMENT

The Directors place on record their sincere thanks to the Bankers Business associatesconsultants customers employees for their continued support extended to your Companiesactivities during the year under review. Your Directors also acknowledges gratefully theshareholders for their support and confidence reposed on your Company.

Date: 02.09.2021 For and on behalf of the Board of Directors
Place: Ahmadabad
Ashokkumar Raghuram Thakker
Chairman & Managing Director
DIN: 02842849

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