To,

The Members

Your Directors present the 29^th Annual Report of the Company together with the Audited Financial Statements for the year ended on 31^st March, 2017.

_(Rs in Lacs)

During the year Company achieved increase in turnover by around by Rs, 8.38 Crores, mainly on account of commencement of execution of new DPR & AE projects assignments resulting into increase in revenue and orders in hand. The award of IE project works & DPR Consultancy work orders with value of Rs, 19.935 Crores have commenced to generate revenue during FY 2016-17.

Manpower Cost: The manpower cost of the Company increased due to cost of additional manpower for new projects. The ratio of Manpower Cost is comparable to last year.

Administrative, Selling & Other Expenses: Administrative, selling and other expenses has in fact decreased even after write off of Bad Debts amounts to Rs, 45.22 Lacs.

Project Expenses: Project expenses are in line with the previous year expenses with respect to revenues.

Interest & Other Financial Charges: Interest and other financial charges have marginally increased mainly on account of Interest on Term Loan and Interest on other dues.

Depreciation: There is a Marginal decrease in Depreciation. Overall the Company's operating profits compares well and is consistent with previous years.

The Government has give a big boost to PPP, (Public Private Partnerships) projects in Infrastructure Building. The Public Utility (Resolution of Disputes) Bill was introduced in the last Budget to resolve disputes in PPP project in speedier & time bound manner. Infrastructure Projects including Road, Railway, Petroleum, Power & Coal are being expedited to maintain their implementation schedule by attracting finance, quicker land acquisition, environmental, clearances & infrastructure support & linkages. A large number of projects are being taken up through EPC route with extensive Government funding and budget allocations.

During the Financial year 2016-17, your Company was awarded the following projects:

Consultancy Services for Appointment of Technical Consultant to Carry Out the Feasibility Study and Preparation of Detailed Project Report for Four Laning of National Highway Projects in the State of Tamil Nadu and in the State of Maharashtra, with contracted fees of Rs, 5.735 Crores.

During the first quarter of the Financial Year, your Company bagged contracts for Independent Engineer Services for Four lane stand alone Ring Road/bypasses in the state of Maharashtra under NHDP Phase-VII on BOT (Hybrid Annuity) basis with contracted fees of Rs, 14.02 Crores. There are Bids under submission and finalization involving fees exceeding Rs, 160 crores.

During the year the company has incurred capital expenditure of Rs, 20.74 Lacs mainly on addition of computers and fire systems.

In order to conserve the resources for future growth of the Company, your Directors do not recommend dividend for the year under review.

During the year under review, your Company has not accepted any deposits within the meaning of Section 73 and 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

There was no change in share capital of the Company during the Financial Year 2016-17.

An extract of Annual Return in Form MGT-9 is appended to this Report as Annexure - I.

Upon recommendation of Nomination and Remuneration Committee, the Board of Directors at its meeting held on 2^nd January, 2017 re-designated Ms. Ankita Shah from Non-Executive Director to Whole-Time Director of the Company for a period of 3 years w.e.f. 2^nd January, 2017, subject to approval of the shareholders of the Company.

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, Ms. Ankita Shah, Whole-Time Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, has offered herself for re-appointment.

During the year under review, in accordance with the provisions of section 149 and 152 of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, Mr. Sudhir Gupta was appointed as an Additional (Independent) Director of the Company for a period of 1 year w.e.f 31^st March, 2017, subject to approval of shareholders at the ensuing Annual General Meeting. The Company has received notice along with requisite deposit from a member of the Company under Section 160 of Companies Act, 2013 proposing his candidature for the office of 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 under Regulation 36(3) of SEBI (Listing Obligation and Disclosure Requirements), Regulations, 2015 (hereinafter referred to as “Listing Regulations') and Secretarial Standards (SS-2) issued by the Institute of Company Secretaries of India (ICSI) are given in the Notice convening the 29^th Annual General Meeting of the Company.

Mr. Mohandas Adige, Independent Director of the Company resigned w.e.f 30^th May, 2016. The Board expresses its appreciation for his valuable guidance as Director of the Company.

The Company has received declaration from all the Independent Directors of the Company confirming 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.

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 in the registered office of the Company. The agenda of the Board/ Committee meetings is circulated Seven days prior to the date of the meeting. In case of any business exigencies, meetings are called and convened at Shorter Notice or the resolutions are passed by Circulation and later placed in the ensuing Board Meeting.

During the year under review, the Board met 8 (Eight) 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.

In terms of applicable provisions read with Schedule IV of the Companies Act, 2013 and Rules framed there under and Regulation 17 of Listing Regulations read with Part D of Schedule II of the Listing Regulations, the Board of Directors has put in place a process to formally evaluate the effectiveness of the Board along with performance evaluation of each Director to be carried out on an annual basis.

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the evaluation of the Board and its performance, the directors individually and the working of its Audit, Nomination & Remuneration and Stakeholder's Relationship Committee of the Company was carried out by the Board. A questionnaire to evaluate the performances of each of executive and non-executive and Independent Directors is devised and the directors are evaluated on the basis of this questionnaire. Such questions are prepared considering the business of the Company and the expectations that the Board have from each of the Directors. The evaluation framework for assessing the performance of Directors comprises of the following key areas:

i. Attendance of Board Meetings and Committee Meetings;

ii. Quality of contribution to Board deliberations;

iii. Strategic perspectives or inputs regarding future growth of Company and it's performance;

iv. Providing perspectives and feedback going beyond information provided by the management.

There are currently following Committees of the 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 Committees after re-constitution as at 31^st March, 2017 is detailed below:

Details of 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.

Pursuant to the provisions of Section 177 of the Companies Act, 2013 and Regulation 22 of Listing Regulations, the Company has devised a Vigil Mechanism/ Whistle Blower Policy to deal with instance of fraud, mismanagement and unethical behavior, if any. 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 2016-17, no employee or director or any other person was denied access to the Audit Committee.

Pursuant to provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of Listing Regulations and on the recommendation of the Nomination & Remuneration Committee, the Board has adopted a policy for selection, appointment and remuneration of Directors and Key Managerial Personnel. The salient features of Remuneration Policy are stated in the Report on Corporate Governance.

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. Adetailed 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.

Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013, your directors state and confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

c. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the company and that such internal financial controls are adequate and were operating effectively; and

f. the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

The details of loans, guarantee or investment under Section 186 of the Companies Act, 2013 are given under Notes on Financial Statements.

All the Related Party Transactions that were entered into during the Financial Year were in Ordinary course of business and on Arm's Length Basis and are reported in the Notes to the Financial Statements. Pursuant to provisions of Section 134 (3) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, Form AOC-2 is appended to this Report as Annexure - II.

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

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- III - A.

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 III- B.

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:

A. CONSERVATION OF ENERGY:

i. Installation of Energy saving devices like Infra-Red motion detectors, light sensors avoids wastage of energy by switching off bases upon activity in the area.

ii. Improved monitoring of energy consumption through smart metering and integration with building management systems.

iii. Creating awareness among employees to conserve energy and follow protocols while leaving the workplace.

iv. While procurement of equipment, focus is on energy efficient systems for greener future.

v. Use of Solar Energy for consumption at Head Office instead of water heater thereby reducing thermal energy usage and conserving energy.

B. TECHNOLOGYABSORPTIONAND BENEFITS:

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

i. Installation of contemporary IT Hardware and Infrastructure including GPS system, VPN Connectivity, Professional Audio System, SQL Server Database, Life-Size Video Conferencing etc.

ii. Use of Internet based communication and advanced technology has reduced paper communication wherever possible and has resulted in a quicker and transparent information sharing system.

iii. Purchase of printers which use low ink thus saving costs and resources.

iv. The benefits derived from Technology absorption are higher efficiency, better reliability and availability, reduced maintenance, environment friendly atmosphere and reduction in printing cost.

v. The Company continues to use the latest technologies for improving the quality of its services.

vi. The Company's operations do not require significant import of technology.

C. FOREIGNEXCHANGEEARNINGSANDOUTGO:

(Amount in Rs,)

COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:__

As per Section 139 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, the term of M/s. Chaturvedi & Shah, Chartered Accountants, Mumbai (FRN: 101720W) and M/s. Naresh Patadia & Co. Chartered Accountants, Nagpur (FRN: 106936W) as the Joint Statutory Auditors of the Company expires at the conclusion of the ensuing Annual General Meeting. The Joint Auditors has functioned as such for more than 5 consecutive years & has been appointed for a period of 3 consecutive years at the 26^th Annual General Meeting held on 29^th September, 2014. The existing Joint Auditors cannot continue after the completion of the said transitional period of three years. Hence, the company proposes to appoint new Statutory Auditor to comply with Section 139 of the Companies Act, 2013 in their place.

On recommendation of Audit Committee, the Board of Directors of the Company at its meeting held on 23^rd May, 2017 have appointed M/s. Banthia Damani & Associates, Chartered Accountants, Nagpur (FRN: 126132W), as the Statutory Auditor of the Company for a period of 5 years to hold office from the conclusion of 29^thAnnual General Meeting till the conclusion of 34^thAnnual General Meeting of the Company, subject to approval of shareholders in place of retiring auditors M/s. Chaturvedi & Shah, Chartered Accountants, Mumbai (FRN: 101720W) and M/s. Naresh Patadia & Co. Chartered Accountants, Nagpur (FRN: 106936W).

The Company has received written consent and a certificate that they satisfy the criteria provided under Section 141 of the Companies Act, 2013 and if appointed, their appointment would be within the limits prescribed under Section 139 of the Companies Act, 2013.

Your Directors recommend the appointment of M/s. Banthia Damani & Associates, Chartered Accountants, Nagpur (FRN: 126132W), as the Statutory Auditor of the Company to hold office from the conclusion of the 29^thAnnual General Meeting up to the conclusion of 34^thAnnual General Meeting of the Company and to audit financial statements of the Company.

The Board also places on record its sincere appreciation for the very high quality of Professional services rendered by M/s. Chaturvedi & Shah, Chartered Accountants, Mumbai and M/s. Naresh Patadia & Co. Chartered Accountants, Nagpur.

REPLIES TO THE OBSERVATIONS MADE IN THE STATUTORY AUDITORS' REPORT:

1. Auditor's comments in their Independent Auditors Report under Basis for Qualified Opinion, read along with the note no.

15.01 are self-explanatory. The trade receivables are entirely from Government Authorities whose accounting system does not have any system of balance confirmation. But the Receipted Bills and confirmatory documents and correspondences of compliances are available on record for contractual compliances for receivable. Hence, the said debtors are recoverable in the normal course of business, being contractually payable as per express provisions of agreement.

The debtors exceeding six months are calculated and stated as per Auditors Report is Rs, 992.47 Lacs. However as per the contract agreement, the debtors exceeding six months based on RA Bill Payment Basis for current and ongoing project assignments stood at Rs, 582.58 Lacs. The fact is supported by Clause No. 6.4 (C) of the Consultancy Contract, being current month outstanding as mentioned in Clause No. 6.4(d) of the Consultancy Contract executed with the client NHAI (National Highway Authority of India).

Auditors to arrive at the Debtors ageing of more than six months have considered only FIFO method of Billing. The delay of payments being mainly due to procedural reasons, management is confident about its recovery being as per agreement and well documented.

2. Auditor's comments in the Independent Auditors Report, under Basis for Qualified Opinion read along with note no. 9.01 is self-explanatory. The management has reconciled its Service Tax liability and available Cenvat Credit for set off against the payable dues and has taken up the filling of Service Tax Returns on urgency to comply with transit to the GST.

The Company has made adequate provision towards possible liability towards interest for delayed payments and delayed filling of Returns. There is remote possibility of any additional liability thereon, as per management.

3. Auditor's comments in the Independent Auditors Report, under Basis for Qualified Opinion read along with note no. 19.01 where company has written back Retainership Fees & salaries payable amounting to Rs, 26.89 Lacs for the reasons that the claims are not payable. Management is of the view that, as the claims are not payable due to lack of compliances on part of the payee and absence of client certification thereof, as well as considering the period lapsed beyond limitation period, and being barred by limitation, are not payable contractually. In view thereof, the management is of the opinion that no liability shall accrue in these cases.

4. Auditor's comments in the Independent Auditors Report, under Basis for Qualified Opinion read along with note no. 17.04 where Auditors have expressed inability to comment on the recoverability of the amount advanced to a party of Rs, 72.72 Lacs. Management has actually paid the sponsorship cost of higher studies abroad of Engineering. As per the contracted terms, the Sponsored Engineer is yet to render the services of 2 years after the studies and return to India thereafter. There has been delay but the management is confident of a ailment of services as envisaged as per the executed contract, or its recovery in case otherwise.

REPLIES TO THE OBSERVATIONS MADE IN THE STATUTORY AUDITORS' REPORT ON THE INTERNAL FINANCIAL CONTROLS:

In the paragraph titled “Qualified Opinion” in the Annexure A to the Independent Auditor's Report related to the Internal Financial Controls, your directors submit the following explanation to the observations of the Auditors:

i) Management has strengthened the recovery efforts for timely recovery of Bills by assignment to a specialized Team solely which includes Financial Expert, Qualified Engineers etc. to felicitate efforts on technical issues and contractual issues if any, for clearance of dues. We have also utilized the Centralized Public Grievance Redressal and Monitoring System (PG Portal) to address delay in recovery of Contractual Dues from the client. During past two years company has recovered Rs, 154.65 Lacs thereof, besides this the Company has been awarded a favorable Arbitration Award of Rs, 123 Lacs for dues from Airport Authority of India.

Further substantial dues are expected to be recovered in the current Financial Year due to the systematic assignment to the specialized task force team.

ii) The accounting software used is Tally ERP 9. The option for amendment, editing, deleting is blocked for all employees. Once Internal & Statutory Audit is completed and the entries and provision as required are made the books are closed quarterly for all users. Hence, there is unlikely chance of deletion of any entry in the books of accounts audited and finalized.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. Manish Ghia &Associates, Company Secretaries, Mumbai are the Secretarial Auditors of the Company for the Financial Year 2016-17. The Secretarial Audit Report for the Financial Year under review is appended to this report as Annexure IV.

REPLY TO THE OBSERVATIONS MADE IN THE SECRETARIAL AUDITOR'S REPORT :

The Secretarial Auditors reported that the vacancy in the office of Independent director was filled beyond the time limit as provided under the Companies Act, 2013 & Listing Regulations, 2015. During the period of such vacancy, the Company received certain profiles for the said position of Independent Director and after due evaluation & identification by Nomination & Remuneration Committee, the Board selected most suitable candidate for the said position and appointed Mr. Sudhir Gupta as an Independent Director of the Company. As on 31^st March, 2017, the composition of Board of Directors was in compliance of Listing Regulations, 2015.

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 Auditors of the Company. The Internal Auditor submits his reports on quarterly basis to the Audit Committee. 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 has adopted a formal policy for ensuring the orderly and efficient conduct of its business.

The Audit Committee evaluates the efficacy and adequacy of financial control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and strives to maintain the Standard in Internal Financial Controls.

Pursuant to Regulation 34(3) read with Schedule V of Listing Regulations, the following 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 and Senior Management

- Auditor's Certificate regarding compliance with conditions of Corporate Governance.

During the year under review, the members of the Company approved the sale/transfer of 81.63% (40,00,000) equity shares held in Artifact Infrastructure Limited, Wholly Owned Subsidiary of the Company by Special Resolution passed through postal ballot process, the result of which was declared on 5^th October, 2016. Further, Artefact Infrastructure Limited ceased to be subsidiary of the Company w.e.f 2^nd January, 2017.

As on 31^st March, 2017, 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 3 Joint Ventures namely:-

- ZaidunLeeng Sdn. Bhd.-Artefact Projects.

- Meinhardt Singapore Pte. Ltd.-Artefact Projects.

- SheladiaAssociates Inc. - Artefact Projects- Zaidun Leeng Sdn. Bhd.

The salient features of Joint Ventures in AOC-1 as per the provisions of Section 129 of the Companies Act, 2013 is provided in Annexure V, 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

The provisions of Section 135 of the Companies Act, 2013 on Corporate Social Responsibility is not applicable to the Company.

The Company has zero tolerance for sexual harassment at workplace and adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (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. We are constantly upgrading the quality systems to improve our services.

The Company is conscious of its strong corporate reputation and the positive role it can play by focusing on Environment, Safety & Health (ESH) issues. Towards this, the Company has set very exacting standards in ESH management. The Company recognizes the importance of ESH issues in its operations and has established indicators to track performance in these areas.

The Company values the safety of its employees and constantly enhances the same for ensuring a safe work place.

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year 2016-17 to which this financial statement relates and the date of this report.

The Contingent Liabilities of the Company mainly include Bank Guarantees to client as Performance Securities. Hence, no cash outflow is expected.

As a risk mitigation measure and to safeguard your Company's Financial Liability of Bank Guarantees, in case of any remote unlikely possibility of any professional liability, the performance of the Company's services is also entirely covered by a comprehensive Professional Liability Insurance Policy. Besides this the cases filed against the Company are also reported.

Change in Registered Office Address of the Company from "Artefact Towers", 54/3, Chhatrapati Square, Wardha Road, Nagpur-440015 to Block No.107, 4^th Floor, "Artefact Towers", 54/3, Chhatrapati Square, Wardha Road, Nagpur - 440015, within the local limits of the City w.e.f. 23^rd May, 2017.

Your Directors would like to place on record their gratitude for all the guidance and co-operation received from the shareholders, banks 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.

For and on behalf of the Board of Directors

Siddharth Shah Pankaj Shah

^{Place: Nagpur} Executive Director Director

Date: 23^rd May, 2017 DIN: 05304116 DIN: 00010504