Artefact Projects Ltd

To,

Your Directors present the 35^th Annual Report of the Company together with the Audited Financial Statements for the year ended on 31“ March, 2023.

During the year under review, there is decrease in Net Revenue was mainly due to completion of certain past Project assignments and gap before commencement of new project assignments. However, there was reduction in project expenses and other overheads in consonance. Hence, the profit after tax is increased as compared to the previous financial year.

Manpower Cost; The manpower cost of the Company has decreased by 18.68 % as compared to last year due to reduction in Project Staff Salaries and Consultancy fees owing to project completions.

Administrative, Selling & Other Expenses: The Administrative, selling and other expenses during the year are 6.70 % of Net Receipts. There has been decrease of 19.31% of Net Receipts as compared to last financial year, due to reduction in project site expenses on Project Completions.

Project Expenses: Project expenses during the year stood at 12% of Net Receipts. These have marginally decreased compared to 13.29% in previous year.

Interest & Other Financial Charges: Interest and other financial charges of Rs. 198.02 lacs for the year have decreased by Rs. 40.63 lacs mainly on account of repayment of Term Loan and reduction of Overdraft/ Cash Credit loans by Rs. 500 lacs in January 2023 and consequent interest thereon for part of the year. The impact on reduction during current year shall be more.

Depreciation: The Depreciation is calculated as per statute.

In order to consolidate the financial position of the company to reduce debt and liabilities for future growth of the Company, your Directors do not recommend dividend for the year under review.

During the year under review, there was no change in the Share Capital of the Company.

The Issued, Subscribed and Paid up equity share capital of your Company as on 31“ March, 2023 stood at Rs. 7,27,50,000/ - (Rupees Seven Crore Twenty seven lacs fifty thousand only) divided into 72,75,000 Equity shares of face value of Rs.10/- (Rupees Ten) each.

Management's Discussion and Analysis Report for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate Section, forming part of the Annual Report.

During the year under review, the Net Profit after tax reported by the Company stands at Rs. 534.42 lacs. However, as per calculation under Section 198 of the Companies Act, 2013, the Net Profit after tax stands at Rs. 474 lacs.

Hence, pursuant to the provisions of Section 135 of the Companies Act, 2013, Corporate Social Responsibility is not applicable to the Company. Therefore, the Company has not developed or implemented any policy on Corporate Social Responsibility initiatives.

The Annual Return of the Company as on March 31,2023 in Form MGT - 7 is in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, and is available on the website of the Company at www.artefactprojects.com.

The Board meets at regular intervals to discuss and decide on Company's business policy and strategy apart from other business of the Board. A tentative annual calendar of the Board and Committee Meetings is informed to the Directors in advance to facilitate them 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 the Company. Usually, meetings of the Board are held at the registered office of the Company. The agenda of the Board / Committee meetings is circulated prior to the meeting.

During the year under review, the Board met 11 (Eleven) times as per details given in the Report on Corporate Governance. The intervening gap between the two consecutive meetings was within the period prescribed under the Companies Act, 2013.

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 and attendance at the meetings held during the year, are provided in the Report on Corporate Governance, forming part of this Annual Report.

The Audit Committee is duly constituted as per the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of Listing Regulations. The composition of the Audit Committee is provided in Report on Corporate Governance.

During the year under review, the recommendations made by the Audit Committee were accepted by the Board.

All the Related Party Transactions that were entered into during the Financial Year were in Ordinary course of business and on an arm's Length Basis and are reported in the Notes to Financial Statements.

There are no materially significant related party transactions that may have potential conflict with interest of the Company at large. There were no transactions of the Company with any person or entity belonging to the Promoter(s)/Promoter(s) Group which individually holds 10% or more shareholding in the Company. Hence, accordingly disclosure as required under Section 134(3) of the Companies Act, 2013 in Form AOC-2 is not applicable to the company

In accordance with the provisions of Regulation 23 of Listing Regulations, the Company has formulated the Policy on Related Party Transactions and the same is uploaded on the website of the Company i.e. http://www.artefactprojects.com/Policy%20on%20Related%20Party%20Transaction.pdf

The Company has complied with provisions of Section 186 of the Act, to the extent applicable with respect to Loans, Guarantees or Investments during the year. The details of loans, guarantee or investment under Section 186 of the Companies Act, 2013 are given under Notes to Financial Statements.

The Company has zero tolerance towards sexual harassment at the workplace and to this end, has adopted a policy in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. All employees are covered under the said Policy The Company has complied with the provisions relating to the constitution of Internal Committee (IC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to redress complaints received regarding sexual harassment.

During the financial year under review, no complaint was received by the Committee on sexual harassment.

The Company is committed to providing a safe and conducive work environment to all its employees and associates.

The Company has complied with the corporate governance requirements under the Companies Act, 2013 and the Listing Regulations. A separate Section on corporate governance, along with a certificate from the auditors confirming compliance is annexed and forms part of the Annual Report.

The Company has laid down a well-defined Risk Management Policy covering the risk mapping, trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitoring of both business and non-business risk. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

The establishment of an effective corporate governance and internal control system is essential for sustainable growth and long-term improvements in corporate value, and accordingly the Company works to strengthen such structures. The Company believes that a strong internal control framework is an important pillar of Corporate Governance.

The Company has in place adequate systems for ensuring the orderly and efficient conduct of its business. The current system of internal financial control is in line with the statutory requirements. Effectiveness of internal financial control is ensured through Audit Committee and management reviews, controlled self- assessment and independent testing by the Internal Auditor.

Creating a fraud and corruption-free culture has always been at the Company's core. In view of the potential risk of fraud, corruption and unethical behavior that could adversely impact the Company's business operations, performance and reputation, it has emphasized addressing these risks. To meet this objective, a comprehensive Whistle-Blower Policy has been laid down pursuant to the provisions of Section 177 of the Companies Act, 2013 and Regulation 22 of Listing Regulations.

The mechanism provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee, in the exceptional cases. The details of Vigil Mechanism/ Whistle Blower Policy is explained in the Report on Corporate Governance and also posted on the website of the Company at http://www.artefactprojects.com/Revised%20Whistle%20Blower%20Policy.pdf

We affirm that during the financial year 2022-23, no employee or director or any other person was denied access to the Audit Committee.

The Company has laid down a robust Code of Business Conduct and Ethics, which is based on the principles of ethics, integrity and transparency. More details about the Code is given in the Corporate Governance Report.

Mr. Sandeep Batta (DIN: 02220509) who was appointed as an Independent Director of the Company, resigned from the post of Directorship with effect from 2T* April, 2023 due to his personal reasons. The Board expresses its sincere gratitude on behalf of the Company for the contribution made by him in the growth of the Company with his specialized inputs to the Board.

Mr. Shourya Batta was appointed as Independent Director (Additional) with effect from 30^th May, 2023 to hold office till the ensuing Annual General Meeting.

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Companies (Management & Administration) Rules, 2014 and Articles of Association of the Company, Mrs. Ankita Shah (DIN: 06772621), Director of the Company retires by rotation at the ensuing Annual General Meeting ('AGM') and being eligible, has offered herself for re-appointment. The Notice convening the forthcoming AGM includes the proposal for re-appointment of aforesaid Director along with brief resume and other details as required under the Listing Regulations and Secretarial Standard on General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI).

The Key Managerial Personnel of the Company as on 31^s* March, 2023 are:

The Independent Directors have submitted the Declaration of Independence, stating that they continue to fulfil the criteria of independence as required pursuant to Section 149 of the Companies Act, 2013 and Regulations 16 of the Listing Regulations. This Section require companies to have at least one-third of the total number of Directors as Independent Director and the Company complies with this requirement. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

In terms of the provisions of Section 134(3)(p) of the Companies Act, 2013 and Regulation 17(10) of the Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of the committees of the Board. The Board performance was evaluated based on inputs received from all the Directors after considering the criteria such as Board Composition and structure, effectiveness of Board / Committee processes and information provided to the Board, etc. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report forming part of the Annual Report.

The remuneration paid to the Directors, Key Managerial Personnel and Senior Management is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19 read with Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further details on the same are given in the Corporate Governance Report which forms part of this Annual Report.

Pursuant to Section 134 of the Companies Act, 2013, the Board of Directors to the best of their knowledge and ability confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

ii) Accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year March 31, 2023 and of the profit of the Company for that year ended on that date;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this act for safeguarding the assets of the Company and detecting fraud and other irregularities;

iv) Annual accounts for the year ended March 31, 2023 have been prepared on a going concern basis;

v) Internal Financial controls were in place and that the financial controls were adequate and were operating effectively; and

vi) Systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules made there under, M/s Naresh Patadia & Co., Chartered Accountants, Nagpur (FRN: 106936W) were appointed as Statutory Auditors of the Company in the 34^th Annual General Meeting till the conclusion of 39^th Annual General Meeting of the Company.

M/s Naresh Patadia & Co., Chartered Accountants have confirmed their eligibility and qualification in accordance with Sections 139,141 and other applicable provisions of the Companies Act, 2013 and Rules issued thereunder (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

The Auditor's Report for the year ended 31“ March, 2023 on the financial statements of the Company is a part of this Annual Report. The notes on Financial Statements referred in the Annual Report are self-explanatory and do not call for any further comments. The Auditor's Report for the financial year 2022-23 does not contain any qualification, reservation or adverse remark.

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 the Company.

The Secretarial Audit for the year 2022-23 was undertaken by Mr. Khushal Bajaj, Practicing Company Secretary, the Secretarial Auditor of the Company. The Secretarial Audit Report for the financial year ended March 31, 2023 under the Act, read with Rules made thereunder and Regulation 24A of the Listing Regulations of the Company is annexed herewith as " Annexure III".

The Secretarial Audit Report for the financial year 2022-23, does not contain any qualification, reservation, or adverse remark.

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014, during the year under review the Internal Audit of the functions and activities of the Company was undertaken by the Internal Auditors of the Company M/s. LNJ & Associates, Chartered Accountants, Nagpur (FRN: 135772W).

Based on the report of internal audit, management undertakes corrective action in the respective areas and strengthens the levels of Internal Financial and other operational controls.

The Board of Directors of the Company has appointed M/s. LNJ & Associates, Chartered Accountants, Nagpur (FRN: 135772W) to conduct the Internal Audit as per Rule 13 of the Companies (Accounts) Rules, 2014 prescribed under Section 138 of the Companies Act, 2013 for the financial year 2023-24.

The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.

The Company has complied with all the applicable provisions of Secretarial Standard on Meetings of Board of Directors (SS-1), Secretarial Standard on General Meetings (SS-2) issued by Institute of Company Secretaries of India.

There are no significant or material orders passed by any regulator or court or tribunal, which can impact the going concern status of the Company or will have bearing on Company's operations in future.

The details relating to Unclaimed Dividend and Unclaimed Shares forms part of the Corporate Governance Report forming part of this Report.

Information in terms of requirement of clause (m) of Sub-Section (3) of Section 134 of the Companies Act, 2013 regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, read along with Rule 8 of the Companies (Accounts) Rules, 2014 is as follows:

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 greener energy.

iv. Use of Solar Energy for reducing thermal energy usage and conserving energy.

v. Extensive use of LED lights and bulbs for energy saving.

With the advent of new infrastructure, the IT Systems and software's used by the Company are installed as per standards. The major technological base includes the following:-

i) Undertook up gradation to contemporary IT Hardware and Infrastructure to save time and costs.

ii) Use of Internet leased lines for communication systems for quicker and transparent information systems.

iii) The benefits derived from Technology absorption are higher efficiency, better reliability and availability, reduced maintenance, environment friendly atmosphere and reduction 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 digitization to adopt to the new working norms.

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

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

As on 31“ March, 2023, the Company does not have any subsidiary or associate companies hence preparation of Consolidated Financial Statements is not applicable to the Company. However, the Company has 2 Joint Ventures namely:-

• Zaidun Leeng Sdn. Bhd.-Artefact Projects.

• Sheladia Associates Inc.-Artefact Projects-Zaidun Leeng Sdn. Bhd.

The salient features of Joint Ventures in Form AOC-1 as per the provisions of Section 129 of the Companies Act, 2013 is provided in Annexure TV. which is appearing after the Financial Statements.

In accordance with Section 136 of the Companies Act, 2013, the Audited Financial Statements and related information of the Company are available on our website at www.artefactprojects.com.

No disclosure or reporting is made with respect to the following items, as there were no transactions during the year under review:

• Details relating to deposits that are covered under Sections 73 and 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

• No issue of equity shares with differential rights as to dividend, voting or otherwise.

• There was no change in the nature of business.

• There were no material changes and commitments affecting financial position of the 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 under review.

No application was made or any proceedings were pending under the Insolvency and Bankruptcy Code, 2016 during the period; further there have been no one-time settlement of any loan taken by the company from Banks/ Financial Institutions during the period under review.

Your Directors would like to place on record their gratitude for all the guidance and co-operation received from the shareholders and other government and regulatory agencies. Your Directors would also like to take this opportunity to express their appreciation for the hard work and dedicated efforts put in by the employees and look forward to their continued contribution and support.