Artefact Projects Ltd Management Discussions

This analysis report briefly describes the Company, current industry and business environment, ability of company to avail opportunities, exhibit strength, handling of threats/weaknesses, financial performance, internal controls and other related issues.

INDUSTRY DEVELOPMENTS:

The Union Budget 2025-26, re-emphasized its strategic focus on Viksit Bharat 2047 and infrastructure development, a key catalyst.

There are Plan to foster private sector engagement, a three-year pipeline of projects in the PPP mode.

The Union Government will also set up an Urban Challenge Fund of Rs 1 Trillion to implement the proposals for Cities as Growth Hubs, Creative Redevelopment of Cities.

Finance Minister proposed National Geospatial Mission to develop foundational geospatial infrastructure and data which will benefit urban planning.

An outlay of Rs 1.5 lakh crore was proposed for the 50-year interest free loans to states for capital expenditure and incentives for reforms. The second Asset Monetization Plan 2025-30 to plough back capital of Rs 10 lakh crore in new projects was also announced.

https: //pib.gov.in/PressReleasePage.aspx?PRID=2098352

BUSINESS OUTLOOK :

The Union Budget 2025-26 has emphasized economic strategy for economic resilience, infrastructure expansion, digital transformation, and inclusive growth.

The government is to upgrade infrastructure and warehousing for air cargo, including high- value perishable horticulture produce and Cargo screening and Customs protocols to be streamlined. The outlook is highly positive Transport sector, Railways and Urban Infrastructure which are the areas of focus for business for the company in next 10 year horizon.

www. ey. com/ content/ dam/ ey-unified-site / ey-com / en-in/ technical / alerts hub / documents /2025/ ey-union-budget-2025- www.pwc.in/assets/pdfs/union-budget-2025/india-budget-2025-key-proposals-financial-services-sector.pdf

THE INFRASTRUCTURE SECTOR - DEVELOPMENT, OPPORTUNITIES AND THREATS: DEVELOPMENT AND OPPORTUNITIES:-

The budget outlines several significant measures aimed at enhancing infrastructure development across India.

Connectivity to 120 new airport destinations to cany 4 crores passengers in next 10 years, A Maritime Development Fund to develop ports and shipping. Broadband connectivity for digital transformation, strengthening of Rural and Agriculture Infrastructure is also planned.

Overall the growth in Infrastructure will offer huge Business Potential and Opportunities.

https://prsmdia.org/files/budget/budget_parliament/2025/Union_Budget_Analysis_2025-26.pdf

THREATS:-

With a stable government and Protective Policy framework there are no perceivable threats or risks to the long-term viability of Companys business. External factors like Global wars, unrest or tariffs that create temporary aberrations

The company has acquired substantial new orders exceeding Rs.210.63 crores which is sufficient for Revenue stability and Visibility for foreseeable future.

Hence the Company perceives no immediate threat on short term.

RISKS AND CONCERNS:

The Companys ability to foresee and manage business risks since past 27 years in infrastructure services already proven in spite of adverse external conditions in past . The Companys long-term outlook is positive, inspite of short term external factors.

Your Company continues to focus on its core strength in Highways as it has a strong domain expertise. Your Company has collaborated with number of reputed Foreign and Domestic Consultancy organizations for expansion in similar verticals in the Infrastructure space, especially Railways and urban Infrastructure.

Appropriate and timely Management intervention reduce the risk of volatility of revenue receipts.

INTERNAL CONTROLS AND THEIR ADEQUACY:

Your Company has adequate system of internal controls. Such internal controls are supplemented by Internal Financial Control Manual and Programme of internal audits. These are designed to ensure that financial and other records are reliable for preparing financial information and other reports and for maintaining regular accountability of the Companys assets. The Internal Auditors of your Company present their report on a quarterly basis to the Audit Committee of the Board.

A Management Information System covers major operating parameters and is reviewed regularly by the Board of Directors. Material deviations from planning and budgeting are reviewed on a quarterly basis by the Board for corrective actions.

NET WORTH :

As on 31^st March, 2025, the Net Worth of the Company stood at Rs. 6567.59 Lacs as compared to Rs. 5928.95 lacs during the previous financial year. This increase of 10.77 % was mainly due to profits for the year of the Company. The Book value of the equity shares of the company stood at a healthy Rs. 90.28 per share (Previous year Rs. 81.50 per share).

SECURED LOANS :

Total Secured LongTerm Borrowing of the Company was Rs. 80.96 lacs. Working capital loan as Overdraft/Cash Credit, secured loan outstanding was of Rs. 1106.24 lacs. (Sanctioned limits of Rs. 1125 Lacs).

FIXED ASSETS :

The gross block of fixed assets stood at Rs. 2404.94 Lacs as against Rs. 2226.01 Lacs for the previous year. The increase in Gross block of Fixed Assets is as a result of Normal Capital Expenditure on account of Project expansion and new project offices set up to cater to Enhanced orders.

CURRENT ASSETS: SUNDRY DEBTORS :

Sundry Debtors stood at Rs. 1230.43 Lacs as on 31^st March 2025 as against Rs. 1578.22 Lacs during the previous financial year. Debtors include GST Receivable of Rs. 337.69 lacs. Debtors mainly comprise of project and quarter end billings and outstanding Bills due of last quarter pending approvals. All clients are Government/ PSU. Due to the formal prior approval based system of obtaining payments of the invoices, the Company has to sustain certain levels of Debtors as a normal business feature. The Company continues to make efforts to reduce the level of debtors constantly and during the year the level of Debtors was proportionately lesser as a of Receipts.

CASH & BANK BALANCES :

The Cash and Bank Balances stood at Rs. 264.40 Lacs. This is mainly includes due to fixed deposits pledged with Banks as 100% cash Collateral for Bank guarantees issued by the company to its Clients as per Contractual requirement.

LOANS & ADVANCES:

Current Short Term Business Loans and Advances stood at Rs. 3245.55 Lacs (Previous year Rs. 4858.90 Lacs).

CURRENT LIABILITIES & PROVISIONS (EXCLUDING CURRENT MATURITY OF SECURED LOAN):

The current liabilities and provisions stood at Rs. 1962.71 Lacs (previous year Rs. 2592.96 Lacs). This mainly consists of Trade Payables of Rs. 565.40 Lacs, Statutory Liability of Rs.612.92 Lacs and other payables and provisions amounting to Rs. 784.40 Lacs.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

The Company continues its committed priority on Human capital.

The Company has adopted Indian Accounting Standard (IND-AS), notified under the Companies (Accounting) Rules, 2015.

At the end of the Year 2024-2025, the break-up of Human Resource was employment of 156 Technical, 114 Non-Technical and 44 Supporting Staff, total being 314 number of staff.

DETAILS OF SIGNIFICANT CHANGES IN FINANCIAL RATIOS:

Particulars	2025	2024
Operating Ratio	37.16%	42.41%
PBIDT Ratio	31.33%	25.46%
PBT Ratio	28.41%	21.56%
PAT Ratio	21.91%	18.34%
Net Worth (Rs.)	6567.59	5928.95
Return on Net Worth	11.31%	8.83%
Return on Equity (PBT/Equity)	12.99%	8.79%
Interest Coverage Ratio	5.71	4.44
Debt Equity Ratio (Secured Loan/Equity)	0.22	0.17
Current Ratio	1.64	1.98
Debtors Turnover Ratio	2.44	1.58
EPS (Basic)*	10.23	7.33
EPS (Diluted)*	10.23	7.33

CAUTIONARY STATEMENT :

Statement in this Management Discussion and Analysis report describing the Companys objectives, projections, estimates and expectations may be forward looking statements with the meaning of applicable laws and regulations. Actual results might differ.