Your Directors present the 33rd Annual Report of the Company together withthe Audited Financial Statements for the year ended on 31st March 2021.
(Rs. In Lacs)
|Particulars ||For the year ended 31st March 2021 ||For the year ended 31st March 2020 |
|Net Income from operations ||3460.14 ||3352.05 |
|Profit before Depreciation & Amortization expenses Finance Cost and tax (EBIDTA) ||844.13 ||817.31 |
|Less: Depreciation and Amortization Expenses ||82.51 ||101.52 |
|Finance Cost ||226.54 ||270.18 |
|Profit/ (Loss) before tax ||535.08 ||445.61 |
|Less: Provision for tax ||142.67 ||86.42 |
|Profif/(Loss) after tax ||392.41 ||359.19 |
|Add: Other Comprehensive Income ||5.80 ||14.81 |
|Total Comprehensive Income ||398.21 ||374.00 |
OVERVIEW OF FINANCIAL PERFORMANCE:
During the year there is increase in Net Income as compared to the previous yearmainly on account of revenues from new projects awarded and from fees of DPR projects.
Manpower Cost: The manpower cost of the Company has decreased by 8.03 % as compared tolast year. The Manpower Cost was 32% of Net receipts vs. 35 % of last year.
Administrative Selling & Other Expenses: The Administrative selling and otherexpenses during the year of 3.69 % of Net Receipts. There has seen a decrease of 48% ofNet Receipts as compared to last financial year.
Project Expenses: Project expenses have during the year of 12.57% of Net Receipts.These have increased compared to 8.64% in previous year.
Interest & Other Financial Charges: Interest and other financial charges of Rs.226.53 lacs for the year have decreased by Rs. 43.64 lacs mainly on account of repaymentof Term Loan and reduction of interest thereon for part of the year.
Depreciation: The Depreciation is calculated as per statute.
In order to consolidate the financial position of the company to reduce debt andliabilities for future growth of the Company your Directors do not recommend dividendfor the year under review.
During the year under review the Company had converted 1475000 share warrants into1475000 Equity shares of Rs. 10/- each and allotted to Promoters & Non-Promoters atthe issue price of Rs. 32/- including premium of Rs. 22/- per share amounting to Rs.47200000/- on Preferential issue basis in 4 tranches as follows:
|Sr. No. of Shares No. ||Date of Allotment ||Face Value ||Share Premium (Rs. 22/-) ||Total Consideration |
|1 275000 ||22.02.2021 ||10/- ||6050000 ||8800000 |
|2 200000 ||24.02.2021 ||10/- ||4400000 ||6400000 |
|3 500000 ||01.03.2021 ||10/- ||11000000 ||16000000 |
|4 500000 ||02.03.2021 ||10/- ||11000000 ||16000000 |
| || || ||TOTAL ||47200000 |
After conversion and allotment the Issued Subscribed and Paid up equity share capitalof your Company as on 31st March 2021 stood at Rs. 72750000/- (Rupees SevenCrore Twenty seven lacs fifty thousand only) divided into 7275000 Equity shares of facevalue of Rs.10/- (Rupees Ten) each.
The Company has utilized the said funds to meet its Long Term working capitalrequirements and growth as approved at the EGM held on 26th August 2019.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:
Management's Discussion and Analysis Report for the year under review as stipulatedunder the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 is presented in a separate Section forming part of theAnnual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) AND SUSTAINABILITY:
The provisions of Section 135 of the Companies Act 2013 on Corporate SocialResponsibility are not applicable to the Company. Therefore the Company has not developedor implemented any policy on Corporate Social Responsibility initiatives.
DISCLOSURES UNDER THE COMPANIES ACT 2013 AND LISTING REGULATIONS:
As required under section 92(3) of the Companies Act 2013 read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 copy of the Annual Return for theperiod under review has been uploaded on the website of the companywww.artefactprojects.com.
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 at 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 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.
Committees of the Board:
There are currently following Committees of the Board:
1. Audit Committee
2. Stakeholders' Relationship Committee
3. Nomination and Remuneration Committee
In addition to the aforesaid Committees the Company also has the following Committees:
1. Borrowing Committee
2. Management Committee
3. Ad-hoc Committee
Details of all 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.
Composition of Audit Committee
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.
During the year under review the recommendations made by the Audit Committee wereaccepted by the Board.
Related Party Transactions
All the Related Party Transactions that were entered into during the Financial Yearwere in Ordinary course of business and on an arm's Length Basis and are reported in theNotes to Financial Statements.
No material related party transactions were entered during the year under review byyour Company. Ffence accordingly disclosure as required under Section 134(3) of theCompanies Act 2013 in Form AOC-2 is not applicable to the company.
In accordance with the provisions of Regulation 23 of Listing Regulations the Companyhas formulated the Policy on Related Party Transactions and the same is uploaded on thewebsite of the Company i.e.
http://www.artefactproiects.com/Policv%20on%20Related%20Partv%20Transaction.pdfParticulars of loans guarantees or investments:
The Company has complied with provisions of Section 186 of the Act to the extentapplicable with respect to Loans Guarantees or Investments during the year. The detailsof loans guarantee or investment under Section 186 of the Companies Act 2013 are givenunder Notes to Financial Statements.
Policy on Sexual Harassment of Women at Workplace:
The Company has zero tolerance towards sexual harassment at the workplace and to thisend has adopted a policy in line with the provisions of Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder. Allemployees are covered under the said Policy. An Internal Complaints Committee has alsobeen set up to redress complaints received on sexual harassment. During the financial yearunder review no complaint was received by the Committee on sexual harassments.
The Company is committed to providing a safe and conducive work environment to all itsemployees and associates.
The Company has complied with the corporate governance requirements under the CompaniesAct 2013 and the Listing Regulations. A separate Section on corporate governance alongwith a certificate from the statutory auditors confirming compliance is annexed and formspart of the Annual Report.
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.
INTERNAL AUDITS AND CONTROLS:
The establishment of an effective corporate governance and internal control system isessential for sustainable growth and long-term improvements in corporate value andaccordingly the Company works to strengthen such structures. The Company believes that astrong internal control framework is an important pillar of Corporate Governance.
The Company has in place adequate systems for ensuring the orderly and efficientconduct of its 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 Internal FinancialControls.
MANAGING THE RISKS OF FRAUD CORRUPTION AND UNETHICAL BUSINESS PRACTICES:
Vigil Mechanism/Whistle-Blower Policy:
Creating a fraud and corruption-free culture has always been at the Company's core. Inview of the potential risk of fraud corruption and unethical behaviour that couldadversely impact the Company's business operations performance and reputation it hasemphasised addressing these risks. To meet this objective a comprehensive Whistle-BlowerPolicy has been laid down pursuant to the provisions of Section 177 of the Companies Act2013 and Regulation 22 of Listing Regulations.
The mechanism provides for adequate safeguards against victimization of employees whoavail of the mechanism and also provides for direct access to the Chairman of the AuditCommittee in the exceptional cases. The details of Vigil Mechanism/ Whistle Blower Policyis explained in the Report on Corporate Governance and also posted on the website of theCompany at http://www.artefactproiects.com/Revised%20Whistle%20Blower%20Policy.pdf
We affirm that during the financial year 2020-21 no employee or director or any otherperson was denied access to the Audit Committee.
Code of Conduct:
The Company has laid down a robust Code of Business Conduct and Ethics which is basedon the principles of ethics integrity and transparency. More details about the Code isgiven in the Corporate Governance Report.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Mr. Kaustubh Paunikar (DIN: 08621592) who was appointed as an Additional (Independent)Director of the Company w.e.f. 26th November 2019 was reappointed as Director(Independent)at the AGM held on 30th September 2020 upto 25thNovember 2025.
None of the Director ceased from Directorship during the financial year under review.Retirement by Rotation:
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 (DIN: 06772621) Director of the Company retires by rotation atthe ensuing Annual General Meeting ('AGM') and being eligible has offered herself forre-appointment. The Notice convening the forthcoming AGM includes the proposal forreappointment of aforesaid Director alongwith brief resume and other details as requiredunder the Listing Regulations and Secretarial Standard on General Meetings (SS-2) issuedby the Institute of Company Secretaries of India (ICSI).
Key Managerial Personnel:
There is no change in the Chief Financial Officer and Company Secretary &Compliance Officer during the year under review.
The Independent Directors have submitted the Declaration of Independence stating thatthey continue to fulfil the criteria of independence as required pursuant to Section 149of the Companies Act 2013 and Regulations 16 of the Listing Regulations. This Sectionrequire companies to have at least one-third of the total number of Directors asIndependent Director and the Company complies with this requirement. There has been nochange in the circumstances affecting their status as Independent Directors of theCompany. The profile of the Independent Directors forms part of the Corporate GovernanceReport. In the Board's opinion the Independent Directors are persons of high reputeintegrity and possess the relevant expertise and experience in their respective fields.
Evaluation of the Board's Performance:
The Nomination and Remuneration Committee of the Board of the Company has devised apolicy for performance evaluation of the Directors Board and its Committees whichincludes criteria for performance evaluation.
Pursuant to the provisions of the Act and Regulation 17(10) of the Listing Regulationsthe Board has carried out an annual performance evaluation of its own performance thedirectors individually as well as the evaluation of the working of the committees of theBoard. The Board performance was evaluated based on inputs received from all the Directorsafter considering the criteria such as Board Composition and structure effectiveness ofBoard / Committee processes and information provided to the Board etc.
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.
Pursuant to Section 134 of the Companies Act 2013 the Board of Directors to the bestof their knowledge and ability confirm that:
i) in the preparation of the annual accounts the applicable accounting standards havebeen followed and that no material departures have been made from the same;
ii) 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;
iii) the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
iv) the directors have prepared the annual accounts on a going concern basis;
v) 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
vi) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
AUDITORS & AUDITORS' REPORT:
M/s. Banthia Damani & Associates Chartered Accountants Nagpur (FRN: 126132W) wereappointed as the Statutory Auditors of the Company for a period of 5 years in the 29thAnnual General Meeting ('AGM') of the Company held on 30th June 2017 to holdoffice from the conclusion of 29th AGM till the conclusion of 34thAGM on terms and conditions as may be decided by the Board.
The Statutory Auditors have given a confirmation to the effect that they are eligibleto continue with their appointment and that they have not been disqualified in any mannerfrom continuing as the Statutory Auditors of the Company.
Maintenance of Cost Record Cost Auditor:
The provisions of Rule 8(5) (ix) of Companies (Accounts) Rules 2014 of Section 134(3)of Companies Act 2013 regarding maintenance of cost records are not applicable to theCompany.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 Mr. JigarGorsia Practising Company Secretary is appointed as the Secretarial Auditor of theCompany for the Financial Year 2020-21. The Secretarial Audit Report for the FinancialYear under review is appended to this report as Annexure III.
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 Internal Auditorsof the Company for the year under review. The Internal Auditor submits 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.
Reporting of Fraud:
The Auditors of the Company have not reported any fraud as specified under Section143(12) of the Companies Act 2013.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS:
The Company has complied with the Secretarial Standards issued by the Institute ofCompany Secretaries of India on Board Meetings and Annual General Meetings.
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.
TRANSFER OF UNCLAIMED DIVIDEND AND UNCLAIMED SHARES:
The details relating to Unclaimed Dividend and Unclaimed Shares forms part of theCorporate Governance Report forming part of this Report.
ENERGY TECHNOLOGY AND FOREIGN EXCHANGE:
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 Sensors and Energy saving devices to avoid wastage of energy.
ii. Implementing practices among Employees to conserve energy and follow its protocols.
iii. Procurement of equipment with focus on energy efficient systems for greenerenergy.
iv. Use of Solar Energy for reducing thermal energy usage and conserving energy.
v. Extensive use of LED lights and bulbs for energy saving.
B. TECHONOLOGY 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) Undertook up gradation to contemporary IT Hardware and Infrastructure to save timeand costs.
ii) Use of Internet leased lines for communication systems for quicker and transparentinformation systems.
iii) The benefits derived from Technology absorption are higher efficiency betterreliability and availability reduced maintenance environment friendly atmosphere andreduction in printing cost.
iv) The Company's operations do not require significant import of technology.
v) The company commenced implementation of complete process automation and digitizationto adopt to the new working norms.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO:
(Amount in Rs.)
|Particulars ||For the year ended 31st March 2021 ||For the year ended 31st March 2020 |
|Foreign exchange earned ||Nil ||Nil |
|Expenditure in foreign currency ||Nil ||Nil |
PARTICULARS OF EMPLOYEES:
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-1.
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 AnnexureII.
SUBSIDIARY/ASSOCIATE COMPANIES/JOINT VENTURES:
As on 31st March 2021 the Company does not have any subsidiary orassociate companies hence preparation of Consolidated Financial Statements is notapplicable to the Company. However the Company has 3 Joint Ventures namely: -
Zaidun Leeng Sdn. Bhd.-Artefact Projects.
Sheladia Associates Inc.-Artefact Projects- Zaidun Leeng Sdn. Bhd.
Meinhardt Singapore Pte. Ltd.-Artefact Projects. (Dissolved w.e.f. 31stMarch 2021)
The salient features of Joint Ventures in Form AOC-1 as per the provisions of Section129 of the Companies Act 2013 is provided in Annexure IV which is appearing after theFinancial Statements.
In accordance with Section 136 of the Companies Act 2013 the Audited FinancialStatements and related information of the Company are available on our website atwww.artefactproiects.com.
No disclosure or reporting is made with respect to the following items as there wereno transactions during the year under review:
Details relating to deposits that are covered under Sections 73 and 76 of theCompanies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014.
The issue of equity shares with differential rights as to dividend voting orotherwise.
There was no change in the nature of business.
There were no material changes and commitments affecting financial position ofthe Company between the end of the financial year and the date of this report.
The Company has not transferred any amount to reserves during the year underreview.
DISCLOSURE IN RESPECT OF STATUS OF APPLICATION OR PROCEEDING PENDING UNDER THEINSOLVENCY AND BANKRUPTCY CODE 2016 AND DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONEAT THE TIME OF ONE TIME SETTLEMENT AND VALUATION DONE WHILE TAKING LOAN FROM BANK ORFINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF:
No application was made or any proceedings were pending under the Insolvency andBankruptcy Code 2016 during the period; further there have been no one-time settlement ofany loan taken by the company from Banks/Financial Institutions during the period underreview.
Your Directors would like to place on record their gratitude for all the guidance andco-operation received from the shareholders and other government and regulatory agencies.Your Directors would also like to take this opportunity to express their appreciation forthe hard work and dedicated efforts put in by the employees and look forward to theircontinued contribution and support.
| ||For and on behalf of the Board of Directors of ARTEFACT PROJECTS LIMITED || |
|Place: Nagpur ||Sd/- SIDDHARTH SHAH ||Sd/- SANDEEPBATTA |
|Date: 1st September 2021 ||WHOLE-TIME DIRECTOR ||DIRECTOR |
| ||DIN: 05304116 ||DIN: 02220509 |