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Conart Engineers Ltd.

BSE: 522231 Sector: Infrastructure
NSE: N.A. ISIN Code: INE714D01012
BSE 00:00 | 18 Apr 33.65 -0.45
(-1.32%)
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33.15

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35.45

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32.20

NSE 05:30 | 01 Jan Conart Engineers Ltd
OPEN 33.15
PREVIOUS CLOSE 34.10
VOLUME 2276
52-Week high 45.25
52-Week low 21.00
P/E 6.03
Mkt Cap.(Rs cr) 11
Buy Price 33.00
Buy Qty 75.00
Sell Price 34.90
Sell Qty 9.00
OPEN 33.15
CLOSE 34.10
VOLUME 2276
52-Week high 45.25
52-Week low 21.00
P/E 6.03
Mkt Cap.(Rs cr) 11
Buy Price 33.00
Buy Qty 75.00
Sell Price 34.90
Sell Qty 9.00

Conart Engineers Ltd. (CONARTENGINEERS) - Director Report

Company director report

To the Members of

CONART ENGINEERS LIMITED

Your Directors have pleasure in presenting forty forth Annual Report of ConartEngineers Limited along with the Audited Financial Statements for the year ended March 312018.

1 FINANCIAL PERFORMANCE (STANDALONE)

The Financial Performance for fiscal 2017-2018 is summarized in the following table:

(Rs. In Lacs)

Particulars 2017-2018 2016-2017
Revenue from Operations 2251.17 2043.37
Expenses 2067.62 1850.46
Profit Before Finance Cost Depreciation & Amortization Exp 183.55 192.91
Finance Cost 4.93 4.69
Depreciation & Amortization Exp 48.77 51.54
Profit from operations and Before Tax 129.85 136.68
Other Income 32.60 54.53
Profit before Tax 162.45 191.21
Tax Expenses: (a) Current Tax 46.19 65.83
(b) Deferred Tax (3.91) (3.16)
Profit for the period 120.15 128.54
Net Comprehensive Income (9.12) 1.65
Profit for the period after Comprehensive Income 111.03 130.19
Paid up Equity 314.00 300.00
Earnings Per Share (Rs.) 3.83 4.28

Company's Performance Overview

The construction industry is the second largest industry of the country afteragriculture. Government support is exemplified in expansionary budgetary allocations forinfrastructure projects and in regulatory reforms that are opening new sectors to privateinvolvement and investment. The Government has a positive outlook for India's constructionindustry and expects that growth over the next decade will draw upon increasing governmentand private-sector investments in infrastructure development and resident andnon-residential building and expects a growth rate of 7-8% per annum over the next 10years. Your directors are pursuing various strategies to cope with to ensure a promisingfuture in time to come.

The skilled labor shortage is a major concern for firms across India as employersstruggle to staff their job sites. A lack of technical training in schools and lessemphasis on the trades are also contributing to a smaller pool of workers entering theindustry. Combined with an aging workforce those factors are creating a struggle forconstruction firms seeking employees for positions ranging from skilled trades tomanagerial roles.

Despite adversities in Engineering and Construction (E&C) industry prevailing yourCompany has been able to maintain its profitability in the year under review as well. TheCompany has incurred a profit of Rs. 111.03 lacs during the year as compared to previousyear profit of Rs. 130.19 and an Earning per Shares of Rs. 3.83 for the year under review.

2. FINANCE

As on the date of Balance Sheet the Company is debt free in terms of long term loansexcept loan on vehicles.

3 DIVIDEND

The Board of Directors are of the opinion that the profit is to be ploughed back andhence do not recommend dividend this year.

4. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board in conjunction with its committees ensures transparency responsibility andaccountability with an aim to create long-term sustainable growth. All Directors areastute professionals coming from varied backgrounds possessing rich experience andexpertise. The Board of Directors (the Board) holds a fiduciary position to promote thesuccess of the Company for the benefit of its members. They are entrusted to directmonitor and guide the Management towards building of such goals and objectives thatguarantees effectiveness and enhancement of shareholder value and fulfils theiraspirations.

Composition of the Board and shares held in their individual names as on 31stMarch 2018

Sr. No. Name of the Director Category No. of Shares held
1. Mr. Jitendra S Sura Chairman & Managing Director 194601
2. Mr. Jimish J Sura Executive Director-Finance & CFO 662106
3. Mr. Sunil C Vakil Independent Director 4000
4. Mr. Chandrakant R Patel Independent Director 5000
5. Mr. Umed AFifadra Independent Director 0
6. Ms. Pooja J Sura Non-Executive Director 50000

Changes in the composition of the Board of Directors and other Key Managerial Personnel

During the year 2017-18 under review Ms. Ketki Parikh had been resigned from thedesignation of Company Secretary w.e.f. 31st October 2017 and Ms. KavaljitkaurDhillon has been appointed as Company Secretary w.e.f. 22nd January 2018. TheCompanies Act 2013 read with relevant Rules made there under facilitates theparticipation of Director in Board / Committee meetings through video conferencing orother audio visual mode. Accordingly the option to participate in the meeting was madeavailable for the Directors except in respect of such meetings and/or items which are notpermitted to be transacted through video conferencing.

Board Meetings held and attendance of Directors during the year 2017-18

Sr. No. Date of Board Meeting Total No. of Directors Total No. of Directors Present
1. 29th May 2017 6 4
2. 12th August 2017 6 6
3. 6th November 2017 6 6
4. 22nd January 2018 6 6
5. 9th February 2018 6 4
6. 26th March 2018 6 5

None of the Directors on the Board is a member in more than 10 Committees and Chairmanin more than 5 committees as specified in Regulation 26(1) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 [the "SEBI (LODR)Regulations 2015"] across all Companies in which he/she is a Director. Thenecessary disclosures regarding Committee positions have been made by the Directors.

Attendance at the last AGM and the number of other directorships as on 31st March2018

Name of the Director No. of Board Meetings attended Whether attended last AGM held on 5th No. of other Directorships as on 31.03.2018 No. of Directorships/ Chairmanship of Board Committee as on 31.03.2018
August 2017 As Director As Chairman As Member As Chairman
Mr. Jitendra S Sura 5 Yes - - - -
Mr. Jimish J Sura 5 Yes - - 1 -
Mr. Sunil C Vakil 6 Yes 4 - 1 1
Mr. Chandrakant R Patel 5 Yes 2 - 2 1
Mr. Umed A Fifadra 6 Yes - - 2 -
Ms. Pooja J Sura 4 - 1 - - -

The Committee positions held in Indian Listed and unlisted public Limited Companies areconsidered including the reporting Company. For this purpose only two Committees viz. theAudit Committee and the Stakeholders' Relationship Committee are considered.

Retirement by rotation

In accordance with the provision of Companies Act 2013 and the Articles of Associationof the Company Mr. Jimish Sura and Ms. Pooja Sura retires by rotation and is eligiblefor the re-appointment. Necessary information for Directors liable to retire by rotationhas been included in the notice convening the ensuing AGM and requisite details have beenprovided in the explanatory statement of the notice. Your directors recommend the saidappointment.

Independent Director

Your Company appointed Independent Directors who are renowned people having expertise /experience in their respective field/profession. In compliance with Section 149(6) of theCompanies Act 2013 and Regulation 16(1)(b) of the Listing Regulations all IndependentDirectors have given a declaration that they meet the criteria of independence as providedunder law. None of the Independent Directors are promoters or related to Promoters. TheNon-executive Independent Directors have no pecuniary relationship or transactions withthe Company in their personal capacity except for sitting fees drawn by them for attendingthe meeting of the Board and Committee(s) thereof and further do not hold two percent ormore of the total voting power of the Company.

During the year meeting of Independent Directors was held on 17th January2018 to review the performance of the Board as a whole on parameters of effectiveness andto assess the quality quantity and timeliness of flow of information between themanagement and the Board. The Independent Directors discussed among other matters theperformance of the Company and risk faced by it the flow of information to the Boardcompetition strategy leadership strengths and weaknesses governance compliance Boardmovements human resources matters and performance of executive directors includingChairman.

5. AUDIT COMMITTEE

The Audit Committee which acts as a link between the management external and internalauditors and the Board of Directors of the Company is responsible for overseeing theCompany's financial reporting process by providing direction to audit function andmonitoring the scope and quality of internal and statutory audits.

The composition of the Committee is in compliance with the provisions of Section 177 ofthe Companies Act 2013 and Regulation 18 SEBI (LODR) Regulations 2015. The Chairman ofthe Committee is a Non-Executive Independent Director.

Composition of Audit Committee of the Company:

Sr. No. Name of Director Category Designation
1. Mr. Sunil Chinubhai Vakil Independent Director Chairman
2. Mr. Chandrakant Revandas Patel Independent Director Member
3. Mr. Umed Amarchand Fifadra Independent Director Member

The Audit Committee also meets the Company's Statutory Auditors to ascertain theirviews on the financial statement. The Committee members meet regularly and make theirrecommendations in accordance with the terms of reference specified by the Board. Suchrecommendations are thoroughly discussed in Board meetings and by and large accepted forimplementation.

Audit Committee Meetings held and attendance of Directors during the year 2017-18

Sr. No. Date of Board Meeting Total No. of Directors Total No. of Directors Present
1. 29th May 2017 3 3
2. 12th August 2017 3 3
3. 22nd August 2017 3 3
4. 6th November 2017 3 3
5. 9th February 2018 3 2

The Audit Committee acts in accordance with the broad terms of reference specified bythe Board of Directors in adherence to Section 177 of the Companies Act 2013 (the‘Act'). The scope of activities of the Audit Committee includes the areas laid out inSection 177 of the Act and Part C of Schedule II of SEBI (LODR) Regulations 2015.

Terms of Reference in brief:

1. Ensuring integrity of the Company's financial statements;

2. Independent discussions and interactions with Statutory Internal and Cost Auditors;

3. Recommending to the Board the appointment re-appointment / replacement or removalof the statutory auditor and thefixation of audit fees;

4. Ensuring effectiveness of the Company's financial reporting systems and processes;

5. Evaluation and scrutiny of loans and investments if any;

6. Approval or any subsequent modification of transactions of the Company with relatedparties;

7. The Company's compliance with legal and regulatory requirements pertaining tofinancial reporting;

8. Reviewing the quarterly half-yearly and annual financial statements with themanagement before submission to theBoard for approval;

9. Reviewing with management the annual financial statements and auditors reportbefore submission to Board forapproval with particular reference to:

The Directors' Responsibility Statement;

Major accounting entries;

Compliance with listing and other legal requirements relating to financialstatements;

Significant adjustments in financial statements arising out of audit findings;

Changes if any in accounting policies and practices along with reasons for thesame.

10. Reviewing and monitoring the auditors' independence and performance;

11. Reviewing the functioning of Whistle Blower mechanism;

12. Assessing the performance of statutory auditors and internal auditors;

13. Reviewing the financial statements minutes and details of investments made by thecompany;

14. Mandatorily reviewing the following information:

Management discussion and analysis of financial condition and results of operations;

Statement of significant related party transactions submitted by management;

Internal audit reports relating to internal control weaknesses;

Management letters / letters of internal control weaknesses issued by the statutoryauditors;

Reviewing the appointment removal and terms of remuneration of the internalauditor.

6. STAKEHOLDERS RELATIONSHIP COMMITTEE

The composition of the Committee is in compliance with the provisions of Section 178 ofthe Companies Act 2013 and Regulation 20 SEBI (LODR) Regulations 2015. The Chairman ofthe Committee is a Non-Executive Independent Director.

Composition of Stakeholder's Relationship Committee of the Company:

Sr. No. Name of Director Category Designation
1. Mr. Chandrakant Revandas Patel Independent Director Chairman
2. Mr. Umed Amarchand Fifadra Independent Director Member
3. Mr. Jimish Jitendra Sura Executive Director Member

Ms. Kavaljitkaur Dhillon is Compliance Officer appointed forcomplying with therequirements of the Listing Regulations and requirements of securities laws includingSEBI (Prohibitionof Insider Trading) Regulations 2015.The role of Stakeholder'sRelationship Committee includes as specified in Part D of the Schedule II of the SEBI(LODR)Regulations 2015.

Stakeholder's Relationship Committee Meetings held and attendance of Directors duringthe year 2017-18

Sr. No. Date of Board Meeting Total No. of Directors Total No. of Directors Present
1. 29th May 2017 3 3
2. 12th August 2017 3 3
3. 6th November 2017 3 3
4. 9th February 2018 3 2

M/s. Sharex Dynamic (India) Pvt. Ltd. is the Registrar and Share Transfer Agent of theCompany. The delegated authority is taking measures so that the share transfer formalitiesare attended to atleast once in a fortnight. The Company Secretary is also authorized bythe Board to do all the acts deeds and matters and sign all the documents that may berequired in the matter relating to shares from time to time. No complaint was remainedunattended and pending to be resolved as on March 31 2018.

Status of Investor Complaints /other Correspondence

Subject matter of Correspondence Pending as on 31st March 2017 Received & resolved during the year Pending as on 31st March 2018
Non-receipt of Share Certificates - - -
Non-receipt of Dividend - - -
Non-receipt of Annual Report - - -
Query -Transfer of shares - - -
Total complaints - - -

7. NOMINATION AND REMUNERATION COMMITTEE

The composition of the Committee is in compliance with the provisions of Section 178 ofthe Companies Act 2013 andRegulation 19 of the of the SEBI (LODR) Regulations 2015. TheChairperson of the Committee is a Non-Executive Independent Director.

Composition of Nomination & Remuneration Committee of the Company:

Sr. No. Name of Director Category Designation
1. Mr. Chandrakant Revandas Patel Independent Director Chairman
2. Mr. Sunil Chinubhai Vakil Independent Director Member
3. Mr. Umed Amarchand Fifadra Independent Director Member

The role of NRC includes the areas laid out in Section 178 of the Act and Part D ofSchedule II of the SEBI (LODR) Regulations 2015. The Board of Directors on recommendationof the NRC has adopted a policy for evaluation of the Board its Committees. The detailsof remuneration paid to all Directors are provided under the head "Disclosures"in this Report. Nomination & Remuneration Policy has been framed adopted andimplemented by the Nomination and Remuneration Committee with broad objectivesfordetermining and recommending the remuneration of the Directors KMP and Senior Managementto the Board. The NRC meeting held on 29th May 2017 and on 17thJanuary 2018 during the year 2017-18.

Terms of Reference in brief:

1. Formulate Remuneration Policy and a policy on Board Diversity.

2. Formulate criteria for evaluation of Directors and the Board.

3. To ensure that the Remuneration Policy shall also include the criteria fordetermining qualifications positive attributes and independence of a Director andrecommend to the Board a policy relating to the remuneration for the Directors KeyManagerial Personnel and other employees.

4. Identify persons who are qualified to become Directors and who may be appointed inSenior Management in accordance with the criteria laid down recommend to the Board theirappointment and removal and shall carry out evaluation of every Director's performance.

5. To ensure that the level and composition of remuneration is reasonable andsufficient to attract retain and motivate Directors of the quality required to run theCompany successfully; relationship of remuneration to performance is clear and meetsappropriate performance benchmarks.

6. Remuneration to Directors Key Managerial Personnel and Senior Management involves abalance between fixed and incentive pay reflecting short and long term performanceobjectives appropriate to the working of the Company and its goals.

8. MANAGEMENT DISCUSSION AND ANALYSIS

A) Industry Overview and Business Prospects:

RERA brought real estate developers under the ambit of certain regulations primarily toprotect the interest of buyers implying a certain order and clarity into the sector. TheCentre had given certain flexibility to State governments only to bring minorchanges/deviations in the RERA Act but some State governments attempted meddling with theAct. Finance Minister is seeking more private investments in the infrastructure sector andhas announced an 80% increase in Infrastructure allocation to $58.64 billion in the Unionbudget.

B) Opportunities:

India is one of the world's most vibrant markets for building and interiors at themoment. Huge sums are being poured into a comprehensive range of construction projectsfrom major infrastructure upgrades sweeping residential housing programmes and wholesalecity building. Residential construction is definitely a market to watch in India rightnow. India is facing a huge housing backlog - some estimates claim as many as 30 millionfamilies need homes to try and tackle the ever-expanding need for affordable housing thegovernment is planning on building 20 million low cost units by 2022.

C) Threats:

The skilled labor shortage is a major concern for firms across India as employersstruggle to staff their job sites. A lack of technical training in schools and lessemphasis on the trades are also contributing to a smaller pool of workers entering theindustry. Construction industry expects to employ 80 million workers by 2020. Theproductivity of Indian construction workers is very low currently. If we can enhanceproductivity it will bring down project execution time drastically.

D) Segments or Product-Wise Performance:

The Company is engaged in only single segment i.e. construction activity sosegment-wise reporting does not apply to it.

E) Performance Review

Your Company has maintained profitability levels and margins for the year under review.The increase in price of Materials and Labor continues to marginally affect the profits ofyour Company. Your Company is aggressively marketing to increase orders and increaseturnover. Your directors are pursuing various strategies to ensure a promising future.

F) Business Prospects

The construction industry is changing and more and more growth opportunities are lyingin the emerging markets. Continuous private sector housing boom will create moreconstruction opportunities. Public sector projects through Public Private Partnershipswill bring further opportunities. Developing supply chain through involvement in largeprojects is likely to enhance the chances in construction. Renewable energy projects willoffer opportunities to develop skills and capacity in new markets. More flexible trainingdelivery techniques are now available. Financial supports like loan and insurance andgrowth in income of people is in support of construction industry. To benefit from trendsin the construction industry the Management always strives to adopt new constructionindustry strategies to better position themselves to manage the supply side and capturethe increased demand.

G) HRD/Industrial Relations

An orientation has been given to the personnel policies with emphasis on theperformance. Right person on the right job has increased the productivity level. Also theteamwork and sense of involvement among the employees has increased the efficiency andeffectiveness.Disclosures are being made at the proper places where the management haspersonal interest that may have potential conflict with the interest of the Company atlarge.

H) New Standard Adopted

Your Company has successfully renewed its accreditation as on ISO-9001-2015 Companyfrom British Standards Institutions (BSI) based at London-UK a most widely recognizedstandard in the world. The standard sets out the requirements for a quality managementsystem and helps businesses and organizations to be more efficient and improve customersatisfaction.

I) Cautionary Statement

The Statements in the Annual Report particularly those which relate to ManagementDiscussion and Analysis describing the Company's objectives projections estimates andexpectations may constitute ‘forward looking statements' within the meaning ofapplicable laws and regulations. Although the expectations are based on reasonableassumptions the actual results might differ.

9. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197(12) of Companies Act 2013 and read with Rule 5(1) and (2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2017are formingpart of this Annual Report.

10. AUDITORS

Statutory Auditors

M/s. S M Kapoor & Co. Chartered Accountants Mumbai resigned as Statutory Auditorsof the Company due to pre-occupation with effect from 15th June 2018. TheBoard has appointed M/s. Pereira & Subramanian Chartered Accountant Mumbai bearing(ICAI Membership Number 112364W) as auditors to fill up casual vacancy caused due toresignation with effect from 29th June 2018. The members are requested toapprove their appointment as Auditors. The Board recommends appointment of M/s. Pereira& Subramanian Chartered Accountants Mumbai (ICAI Firm Registration No. 112364W) asAuditors at ensuing AGM and to hold the office from conclusion of ensuing AGM till theconclusion of AGM to be held in the year 2023. The Company has received necessary consentunder section 141 of the Companies Act 2013 from M/s. Pereira & Subramanian and theyare eligible for appointment as required under the provisions of Section 139 of theCompanies Act 2013.

Secretarial Auditors

During the year Secretarial Audit was carried out by M/s. Sanjay Dholakia &Associates (Membership No. F2655) a firm of Company Secretaries in Practice theSecretarial Auditor of the Company for the financial year 2017-18 Pursuant to theprovisions of Section 204 of the Companies Act 2013 and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. The observations of the SecretarialAuditor are self explanatory. The detailed report on the Secretarial Audit is attached asforming part of this Annual Report.

11. CORPORATE GOVERNANCE

In view of the Regulation 15(1) of the Securities and Exchange Board of India (ListingObligation and Disclosure Requirements) Regulations 2015 the provisions related toCorporate Governance as specified in regulations 17 to 27 and clauses (b) to (i) ofsub-regulation (2) of regulation 46 and para C D and E of Schedule V are not applicableto the Company and hence the same is not given in the Report. However the Companycontinues to adheres the best practices prevailing in Corporate Governance and follows thesame in its true spirit.

12. INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2013

The Company has been employing women employees in various cadres. There were noinstances taken place in the Company during the year which are required to be reportedunder Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013.

13. COMPLIANCES UNDER COMPANIES ACT 2013

Share Capital

During the year under review Authorized Capital of the Company increased from Rs.30000000/- divided into 3000000 Equity Shares of Rs. 10/- each to Rs. 40000000divided into 4000000 Equity Shares of Rs. 10/- each.The Issued subscribed and Paid-upEquity Share Capital of Company increased from Rs. 30000000/- divided into 3000000Equity Shares of Rs. 10/- each to Rs. 31400000 divided into 3140000 Equity Shares ofRs. 10/- each by issuing 140000 Equity Shares to the Promoters of the Company onPreferential Basis at Rs. 51.24/- including premium of Rs. 41.24/-.During the year underreview the Company has not issued any convertible Warrants/Bonds and/or other debtsecurities which has likely impact on the Equity of the Company.

Extract of Annual Return

The extract of Annual Return pursuant to the provisions of Section 92 of the Act readwith Rule 12 of the Companies (Management and Administration) Rules 2014 is furnished inForm MGT - 9 is forming part of the Annual Report.

Particulars of Loans Guarantees or Investments under Section 186 of the Companies Act2013

Details Loans guarantees and Investments covered under the provisions of Section 186of the Companies Act 2013 are given in the notes to financial statements.

Insurance

Your Company has taken appropriate insurance for all assets against foreseeable perils.

Remuneration Policy of the Company

The Remuneration policy of the Company comprising with broad objectives fordetermining and recommending the appointment and remuneration of the Directors KeyManagerial Personnel and Senior Executives of the Company including criteria fordetermining qualifications positive attributes independence of a Directors.

Related Party Transactions

The Company has formulated a policy on dealing with Related Party Transaction. Thepolicy is placed on the website of the Company. All the transactions entered into withRelated Parties as defined under the Companies Act 2013 Regulation 2(1)(zc) andRegulation 23 of SEBI (LODR) Regulations 2015 during the financial year were in theordinary course of business and on an arm's length basis and do no attract the provisionsof Section 188 of the Companies Act 2013. During the year the Company has not enteredinto any contract / arrangement / transactions with related parties which can beconsidered material in nature. The Related Party Transactions are disclosed in the notesof financial statements for the financial year 2017-18 and the same is furnished in FormAOC-2 and is forming part of Annual Report.

Risk Management Policy and Framework

The Company's risk management policy and framework is based on a clear understanding ofvarious risks disciplined risk assessment and measurement procedures and continuousmonitoring. The policies and procedures established for this purpose are continuouslybenchmarked with industry best practices. The Board of Directors has oversight on all therisks assumed by the Company. The Board reviews the level and direction of major riskspertaining to market liquidity operational compliance and capital at risk as part ofrisk profile overview.

The Audit Committee of the Board provides direction to and monitors the quality of theinternal audit function and also monitors compliance with inspection and audit reports ofstatutory and internal auditors of the Company.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) of SEBI(LODR) Regulations 2015 the Board has carried out an annual performance evaluation of itsown performance and that it's statutory committee and that of the individual directors.Independent Directors at their meeting without the participation of the Non-independentDirectors and Management considered / evaluated the Boards' performance Performance ofthe Chairman and other Non-independent Directors. The Board has undergone a formal reviewwhich comprised Board effectiveness and review of materials.

Company's Code of Conduct for Prevention of Insider Trading

In accordance with the requirements of the Securities and Exchange Board of India(Prohibition of Insider Trading) Regulations 1992 the Company has also in place acomprehensive code of conduct for prevention of insider trading.

Company's Code of Practices and Procedure for "Fair Disclosure of UnpublishedPrice Sensitive lnformation."

With reference to Regulation 8.2 (Chapter - lV) of the SEBI (Prohibition of lnsiderTrading) Regulations 2015 the Board of Directors of Company has instituted a"Conart Engineers Limited Code of Practices and Procedure for "Fair Disclosureof Unpublished Price Sensitive lnformation".

Vigil Mechanism/ Whistle Blower Policy

Pursuant to Section 177(9) of the Companies Act 2013 read with Rule 7 of the Companies(Meetings of Board and its Powers) Rules 2014 the Company has in place a Policy on VigilMechanism/ Whistle Blower and the same has been hosted on the website of the Company. ThisPolicy inter-alia provides a direct access to the Chairman of the Audit Committee. Apolicy enables stakeholders (including Directors and employees) to report unethicalbehavior actual or suspected fraud or violation of the Company's Code of Conduct.YourCompany hereby affirms that no Director/employee has been denied access to the Chairman ofthe Audit Committee and that no complaints were received during the year.

Quality Policy

Your Company strive for ‘excellence' by providing customized solutions products& services that best satisfies the requirements of our Customers and continuouslyimprove quality reliability & service with the help of an effective QualityManagement System encompassing all statutory regulatory health safety &environment requirements at our work place.

Familiarisation Programme for Independent Directors

Independent Directors are familiarised with their roles rights and responsibilities inthe Company as well as with the nature of industry and business model of the Companythrough induction programmes at the time of their appointment as Directors and throughpresentations on economy & industry overview key regulatory developments strategyand performance which are made to the Directors from time to time.

Subsidiary Associate and Joint Venture Companies

Your Company does not have any material subsidiary associate or joint venture Companyas defined under the SEBI (LODR) Regulations 2015 as on March 31 2018.

Deposits

During the year under review your Company did not accept any deposits within themeaning of provisions of Chapter V –Acceptance of Deposits by Companies of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.

Significant and Material Orders

There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status and the Company's operations infuture.

Human Resource

Your Company's Human Resource agenda remained focused on reinforcing the key thrustareas building an inclusive culture and a strong talent pipeline institutionalisingmission critical capabilities in the organisation driving greater employee engagement andcontinuing to focus on progressive employee relation policies.

Internal Control and Its Adequacy

The Company has adequate internal controls and processes in place with respect to itsfinancial statements which provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements. These controls andprocesses are driven through various policies procedures and certifications. Theprocesses and controls are reviewed periodically. The Company has a mechanism of testingthe controls at regular intervals for their operating effectiveness to ascertain thereliability and authenticity of financial information.

Corporate Social Responsibility

Since the Company's net worth does not exceed Rs. 500 crores or Company's turnover doesnot exceed Rs. 1000 crores or the Company's net profit does not exceed Rs. 5 crore forany financial year the provisions of section 135 of the Companies Act 2013 relating toCorporate Social Responsibility activities are not applicable to the Company.

Absorption Foreign Exchange Earnings and Outgo

The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134(3) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished

(A) Conservation of energy:

Steps taken / impact on conservation of energy with special reference to thefollowing:

(i) Steps taken by the company for utilizing alternate sources of energy includingwaste generated: Nil

(B) Technology absorption:

(i) Efforts in brief made towards technology absorption. Benefits derived as a resultof the above efforts e.g. product improvement cost reduction product developmentimport substitution etc: The Company has not taken any technical know-how from anyone andhence not applicable.

(ii) In case of imported technology (imported during the last 3 years reckoned from thebeginning of the financial year) following information may be furnished: The Company hasnot imported any technology and hence not applicable.

(iii) Expenditure incurred on Research and Development : Nil

(C) Foreign exchange earnings and Outgo:

(i) Foreign exchange earnings: Nil

(ii) Foreign exchange outgo: Rs. 72390

The Company has used information technology extensively in its operation and iscontinuously upgrading in consonance with the latest technology as per industry standard.

Material changes and commitments affecting the financial position of the Company whichhave occurred between March 31 2018 and date of this Report.

There were no material changes and commitments affecting the financial position of theCompany between the end of financial year (March 31 2018) and the date of this Report.

Disclosure under Rule 5 of the Companies (Appointment & Remuneration) Rules 2014

Disclosure required under Section 197 of the Companies Act 2013 read with Rule 5 ofthe Companies (Appointment & Remuneration) Rules 2014 have been annexed to thisreport.

Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:

a) In the preparation of the annual financial statements for the year ended March 312018 the applicable Accounting Standards have been followed and there are no materialdepartures.

b) They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of financial year and of the Profit andLoss of the Company for that period.

c) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

d) The annual financial statements have been prepared on a going concern basis.

e) Proper internal financial controls were followed by the Company and that suchinternal financial controls are adequate and are operating effectively.

f) Proper systems to ensure compliance with the provisions of all applicable laws arein place and that such systems are adequate and operating effectively.

Based on the framework of internal financial control and compliance systems establishedby the Company work performed by internal statutory and Secretarial Auditors andexternal consultant(s) and reviews performed by Management and the relevant BoardCommittees including the Audit Committee the Board is of opinion that the Company'sinternal financial controls were adequate and effective during the financial year 2017-18.

Secretarial Standards

Section 118 (10) of the Companies Act 2013 requires every company to observeSecretarial Standards with respect to General and Board Meetings specified by theInstitute of Company Secretaries of India (ICSI) and approved as such by the CentralGovernment. The Secretarial Standards on Meetings of the Board of Directors (SS-1) andSecretarial Standards on General Meetings (SS-2) issued by the Institute of CompanySecretaries of India (ICSI) under Section 118(10) of the Companies Act 2013 are effectivew.e.f. 1st July 2015. Since then the SS-1 and SS-2 have been revised by the ICSI andapproved by the Central Government under Section 118(10) of the Companies Act 2013 whichare applicable w.e.f. 1st October 2017. The Company Secretary while preparing theagenda notes on agenda and minutes of the meeting(s) is responsible for and is requiredto ensure adherence to all applicable laws and regulations including the Companies Act2013 read with rules issued thereunder Listing Regulations and Secretarial Standardsissued by the Institute of Company Secretaries of India.

14. AUDITORS' REPORT

The Report given by the Auditors on the financial statements of the Company is part ofthis Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Statutory Auditors in their Report and by Company Secretary inpractice in his Secretarial Audit Report.

15. APPRECIATION

The Board wishes to place on record its gratitude to the Company's customersconsultants auditors and various Government authorities for their valuable support andguidance. The Board also places on record its sincere gratitude to all stakeholdersincluding shareholders valued clients architect consultant contractors suppliers andwell wishers for their goodwill patronage and wholehearted support. The Board alsorecords the concentrated efforts put in and the valuable contribution made by the staff atall levels of your Company and looks forward to their unwavering commitment and teamworkfor the all round progress of the Company.

As part of the Company's Green Initiative the Company will send documents like Noticeconvening the general meetings Financial Statements Directors' Report etc. to thee-mail address provided by the members.

We therefore appeal to the members who have yet not registered themselves to be apart of the said ‘Green Initiative' and request the members to register their namefor receiving the said documents in electronic mode by sending an email giving theirRegistered Folio Number and/or DP ID/Client ID to the dedicated email address atsharexindia@vsnl.com and register their request.

Your Directors are thankful to the shareholders for actively participating in the GreenInitiative and seek your continued support for implementation of the green initiative.

On behalf of the Board
Sd/-
Place : Vadodara Jitendra Shankerlal Sura
Date : 29th June 2018 Chairman & Managing Director
DIN : 0480172