Your Directors present the 30th Annual Report ofthe Company together withthe Audited Financial Statements for the year ended on 31st March 2018.
(' in Lacs)
|PARTICULARS || |
|2017-2018 ||2016-2017 |
|Net Income from operation and other income ||2409.94 ||2533.06 |
|Profit before Depreciation & Amortization expenses Finance Cost and tax (EBIDTA) ||240.77 ||500.92 |
|Less: Depreciation and Amortization Expenses ||81.62 ||80.45 |
|Finance Cost ||445.02 ||369.28 |
|Profit before tax ||(285.87) ||51.19 |
|Less: Provision for tax ||24.48 ||31.93 |
|Profit after tax ||(310.35) ||19.26 |
|Less: Minority Interest in Income ||- ||- |
|Add: Share in Profits/Loss of Associates ||- ||- |
|Balance of Surplus as per last Balance Sheet ||1441.11 ||1421.58 |
|Balance available for appropriation ||1131.78 ||1441.11 |
|Balance of profit carried to Balance Sheet ||1131.78 ||1441.11 |
2017 - 2018 IN RETROSPECT:
During the year Company witnessed a marginal reduction in turnover by around by ' 1.46Crores mainly on account of conclusion of projects resulting into reduction of billablerevenue. The award of certain new DPR Consultancy work orders are expected to generaterevenue during FY 2018-19.
Manpower Cost: The manpower cost of the Company increased due to cost of additionalmanpower for new projects. The ratio of Manpower Cost is increased by 12.18% as comparedto last year. There is a substantial surge in demand for specialized manpower due to hugescope in the sector.
Administrative Selling & Other Expenses : Inspite of reduction in Turnover theAdministrative selling and other expenses has been marginally increased which is stillcomparable to last financial year.
Project Expenses: Project expenses have decreased in line with previous year on accountof conclusion of projects.
Interest & Other Financial Charges: Interest and other financial charges haveincreased mainly on account of Interest on Term Loan and Interest on other dues.
Depreciation: There is Marginal increase in Depreciation.
Emphasizing that infrastructure is the growth driver of economy the Governmentestimated that investment in excess of ' 50 lakh crore is needed to increase growth of GDPand connect the nation with a network of roads airports railways ports and inlandwaterways. The Government announced increase of budgetary allocation on infrastructure for2018-19 to ' 5.97 lakh crore against estimated expenditure of ' 4.94 lakh crore in2017-18. A large number of Projects are being taken up through EPC and Hybrid AnnuityModel with extensive Government funding and budget allocations.
During the financial year 2017-18 your Company was awarded the following projects:
Company bagged the contracts for Highway Assignments as Consultant for Detailed ProjectReport from National Highways Authority of India and other state Govt. Authority in theState of Maharashtra Tamil Nadu & Uttar Pradesh with contracted fees of ' 12.12Crores.
Company has also been awarded the contracts for Highway Assignments as Consultant forDetailed Engineering Construction Supervision Supervision of Operation & Maintenanceand Project Management from National Highways Authority ofIndia and other state Govt.Authority with contracted fees of ' 52.53 Crores.
There are bids under submission and finalization involving fees exceeding ' 145.00Crores
Further in reference to the petition filed by the Airport Authority of India(AAI') before the Hon'ble High Court of Delhi against the Company in connection withthe construction services for the Airport at Trivandrum the Hon'ble High Court dismissedthe said petition and passed the judgment vide Order No. O.M.P. (COMM) 87/2016 on 30thMay 2017 in favour of the Company. The Law Board of AAI has also issued a letter statingpayment to be made to the Company of ' 12573102/-. The Company has filed the decree forexecution of the said order for ' 12573102/- plus applicable interest till the date ofreceipt of payment which was duly received by the Company in October 2017.
During the year the company has incurred capital expenditure of ' 39.78 Lacs mainly onaddition of Equipment Furniture Vehicles Computers and Software.
In order to conserve the resources for future growth of the Company your Directors donot recommend dividend for the year under review.
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.
There was no change in share capital of the Company during the Financial Year 2017-18.
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):
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. Siddharth Shah (DIN: 05304116) Executive Director of the Company retires byrotation at the ensuing Annual General Meeting and being eligible has offered himself forre-appointment.
During the year under review in accordance with the provisions of sections 149 and 152of the Companies Act 2013 read with Companies (Appointment and Qualification ofDirectors) Rules 2014 the term of office of Mr. Sudhir Kumar Gupta (DIN: 07780511)Independent Director of the Company expired on 30th March 2018. Onrecommendation of the Nomination and Remuneration Committee the Board of Directors intheir meeting held on 31st March 2018 approved the appointment of Mr. SudhirKumar Gupta as Additional (Independent) Director for a further term of 5 years w.e.f. 31stMarch 2018 upto 30th March 2023 subject to approval of members at theensuing Annual General Meeting. This shall be his second term as Independent Director ofthe Company
Further in accordance with the provisions of sections 149 and 152 of the CompaniesAct 2013 read with Companies (Appointment and Qualification of Directors) Rules 2014the term of office of Mr. Sandeep Batta (DIN: 02220509) Independent Director of theCompany shall expire on 31st March 2019. On recommendation of the Nominationand Remuneration Committee the Board of Directors in their meeting held on 14thAugust 2018 approved the reappointment of Mr. Sandeep Batta as Independent Director for afurther term of 5 years w.e.f. 1st April 2019 upto 31st March2024 subject to approval of members at the ensuing Annual General Meeting. This shall behis second term as Independent Director of the Company.
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 Obligations and Disclosure Requirements) Regulations2015 (hereinafter referred to as Listing Regulations') and Secretarial Standards onGeneral Meetings (SS-2) issued by the Institute of Company Secretaries of India are givenin the Notice convening the 30th Annual General Meeting of the Company.
Mr. Deepak Mehta Independent Director of the Company resigned w.e.f.14thDecember 2017. Also Mr. Sanjay Khare resigned from the office of Chief FinancialOfficer of the Company w.e.f. 30th April 2018. The Board expresses itsappreciation for their valuable guidance during their association with 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 Companies Act 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 / 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. 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 6 (Six) 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 Companies Act 2013 and Listing Regulations theevaluation of the Board and its performance the directors individually and the working ofits Audit Nomination & Remuneration and Stakeholders' 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 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 ofthe 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 Committee/s after re-constitution as at 31st March2018 is detailed 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 ||Chairman ||Chairman ||Chairman |
|2. Mr. Siddharth Shah ||- ||- ||- ||Member ||- ||Member |
|3. Mrs. Ankita Shah ||- ||- ||- ||- ||- ||- |
|4. Mr. Sandeep Batta ||Chairman ||Chairman ||Chairman ||Member ||- ||- |
|5. Mr. Deepak Mehta ||Member (upto 13.12.2017) ||Member (upto 13.12.2017) ||Member (upto 13.12.2017) ||Member (upto 13.12.2017) ||Member (upto 13.12.2017) || |
|6. Mr. Sudhir Gupta ||Member (w.e.f. 14.12.2017) ||Member (w.e.f. 14.12.2017) ||Member (w.e.f. 14.12.2017) ||Member (w.e.f. 14.12.2017) ||Member (w.e.f. 14.12.2017) || |
|7 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.
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 Policy todeal with instance of fraud mismanagement and unethical behavior if any. The mechanismprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairman of the Audit Committee inthe exceptional cases. The details of Vigil Mechanism/ Whistle Blower Policy is explainedin the Report on Corporate Governance and also posted on the website of the Company athttp://www.artefactprojects.com/Revised%20Whistle%20 Blower%20Policy.pdf
We affirm that during the financial year 2017-18 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 oft he 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 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 loss 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.
DETAILS IN RESPECT OF FRAUD REPORTED BY AUDITORS:
Pursuant to Section 143(12) of the Companies Act 2013 there were no frauds reported bythe Auditors of the Company during the year under review to the Audit Committee or theBoard of Directors as such there is nothing to report under Section 134(3)(ca) of theCompanies Act 2013.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The details of loans guarantee or investment under Section 186 of the Companies Act2013 are given under Notes to 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 Financial Statements. Pursuant to provisions of Section 134 (3) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 Form AOC-2 is appendedto this Report as Annexure - II.
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.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 AnnexureIII- B.
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.
vi. Extensive use of LED lights and bulbs for energy saving.
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.
vi. The Company's operations do not require significant import oftechnology.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO:
(Amount in ')
|Particulars ||For the year ended 31st March 2018 ||For the year ended 31st March 2017 |
|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.
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 tohold office from the conclusion of 29th AGM till the conclusion of 34thAGM subject to ratification of their appointment at every AGM.
Your Directors recommend the ratification of appointment of M/s. Banthia Damani &Associates Chartered Accountants Nagpur (FRN: 126132W) as the Statutory Auditors of theCompany and to fix their remuneration for the remainder of their term.
Members are informed that the provision relating to ratification of appointment of theAuditors as per Companies (Amendment) Act 2017 which was notified on 7th May2018 has been done away with. As such no requirement of ratification/confirmation shallhenceforth be necessary for the appointment of the Auditors for their remainder period ofappointment.
REPLIES TO THE OBSERVATIONS MADE IN THE STATUTORY AUDITORS' REPORT:
1. Auditor's comments in their Independent Auditors Report under Point No. (i) forQualified Opinion read along with the Note No. 9.01 are self-explanatory. The tradereceivables are entirely from Government Authorities whose accounting system does notenable issue of any balance confirmation. The company has on record Receipted Bills andcorrespondences for contractual compliance for the receivables as per express provisionsof agreement. Hence the said debtors are considered recoverable in the normal course ofbusiness. The delay of payments is mainly due to procedural reasons. Management isreasonably assured of its recovery.
The debtors exceeding six months are calculated and stated as per Auditors Report is '1092.69 Lacs. Auditors to arrive at the Debtors ageing of more than six months haveconsidered only FIFO method of Billing. However as per the contract agreement thedebtors exceeding six months based on RA Bill payment basis for continuous current andongoing project assignment stood at ' 641.44 Lacs. The fact is supported by Clause No.6.4(C) of the Consultancy Contract being current month outstanding as mentioned in ClauseNo.6.4 (d) of the Consultancy Contract executed with client NHAI (National HighwayAuthority of India).
2. The Auditors comments in the Independent Auditors Report at Point No. (ii) as perNote No. 20.01 the Order has been passed dated 27th March 2018 and thesubstantial part of the Appeal has been allowed and the penalty of ' 188.89 Lacs has beenwaived.
3. Auditors comments in the Independent Auditors Report at Point No. (iii) under thebasis for Qualified Opinion read along with Note No. 20.02 is self explanatory. Themanagement has filed Service Tax Returns upto June 2017 to comply with transit to theGST. The liability payable is also accounted for to pay in current year. Part of thepayment so made shall be reimbursable from clients as tax.
4. Auditors comments in the Independent Auditors Report at Point No. (iv) under thebasis for Qualified Opinion read along with Note No.20.02 submitted regarding payment ofGST Net ofInput Tax Credit of' 272.58 Lacs was pending payment due to non receipt of GSTreimbursement from Government clients amounting to ' 228.73 Lacs. Filing of return thereofon receipt of claim from client interest thereon due to delay in payment of GSTaccordingly has been provided and the note is self explanatory.
5. Auditor's comments in the Independent Auditors Report at Point No. (v) under thebasis for Qualified Opinion read along with Note No. 20. 03 is self explanatory and TDSshall be paid before filing of Income Tax return. The company has also claimed for refundof Income Tax paid in excess of its provisions to the extent of '435.89 Lacs.
6. Auditor's comments in the Independent Auditors Report at Point No. (vi) under Basisfor Qualified Opinion read alongwith Note No. 12.03 where Auditors have expressedinability to comment on the recover ability of the amount advanced to party of ' 72.72Lacs. Management has paid sponsorship cost for higher studies at abroad for Engineering.The Sponsored Engineer is yet to render the services of 2 years after studies and returnto India The Management is expecting of availment of services or taking up steps for itsrecovery otherwise during the ensuing financial year.
7. Auditors comments in the Independent Auditors Report at Point No. (vii) under thebasis for Qualified Opinion read along with Note No.9.02 20.04 21.01 the said amount hasbeen reversed pending approval in the accounts of client and substantial time has beenelapsed. Based on the prudent financial management policies of the management the samehas been reversed for now without prejudice to any claims made by the company from theclient.
8. Auditors comments in the Independent Auditors Report at Point No. (viii) under thebasis for Qualified Opinion read along with Note No.20.04 regarding unrealized service taxof ' 120.72 lacs of earlier year written back represents service tax liability excessprovided and not due based on filing of service tax returns.
9. Auditors comments in the Independent Auditors Report at Point No. (ix) under thebasis for Qualified Opinion read along with Note No.6.01 the Management of company feelsthat the investment in financial instruments amounting to ' 12.90 Crores shall be realizedto the extent of investment. The investment is made for a long term mining investment.
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:
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 fromthe client. During past two years company has recovered ' 154.65 lacs thereof besidesthis the Company has been awarded a favourable Arbitration Award of ' 123 lacs for duesfrom 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.
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 Secretarial Auditors of theCompany for the Financial Year 2017-18. 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:
a. The Secretarial Auditors reported that the vacancy in the office of Independentdirector which is to be filled-up by the Board at the earliest but not later thanimmediate next Board meeting or three months from the date of such vacancy whichever islater; is yet to be filled up. During the period of such vacancy the Company receivedcertain profiles for the said position of Independent Director and after due evaluation& identification by Nomination & Remuneration Committee the Board shall selectthe most suitable candidate for the said position.
b. The Secretarial Auditors also reported that the transfer of shares (on which thedividend has remained unpaid or unclaimed for last 7 years) to the Investor Education andProtection Fund Authority was completed beyond the statutory timeline. The said delay wasinadvertent and unintentional in nature and was caused due to procedural aspects involvedin the said process.
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. The Internal Auditor submits his reports on quarterly basis to the AuditCommittee. 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 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 Directors andSenior Management
Auditor's Certificate regarding compliance with conditions of CorporateGovernance
SUBSIDIARY AND ASSOCIATE COMPANIES:
As on 31st March 2018 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.
Meinhardt Singapore Pte. Ltd.-Artefact Projects.
Sheladia Associates 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 Annexure V 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 atwww.artefactprojects.com
CORPORATE SOCIAL RESPONSIBILITY:
The provisions of Section 135 of the Companies Act 2013 on Corporate SocialResponsibility are not applicable to the Company.
INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
The Company adopted a Policy on prevention prohibition and redressal of sexualharassment at workplace in line with the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013. The Company has constitutesan Internal Complaint Committee under Section 4 of the Sexual Harassment of Women atworkplace (Prevention Prohibition and Redressal) Act 2013.
There was no complaint on sexual harassment during the year under review.
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 2017-18 to which this financial statementrelates and the date of this report.
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.
COMPLIANCE WITH SECRETARIAL STANDARDS:
The Company has devised proper system to ensure compliance with the applicableSecretarial Standard issued by the Institute of Company Secretaries of India and theCompany complies with all the applicable provisions of the same during the year underreview.
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
| || || |
|Place: Nagpur ||Siddharth Shah ||PankajShah |
|Date: 14th August 2018 ||Director ||Director |
| ||DIN:05304116 ||DIN: 00010504 |