Artson Engineering Ltd Directors Report.

To the Members,

The Board presents the 42nd Annual Report of Artson Engineering Limited (the Company or AEL) along with the Audited Financial Statements for the year ended 31st March, 2021.

1. FINANCIAL RESULTS

(Amount (Rs. in Lakhs)
PARTICULARS 2020-21 2019-20
Gross Turnover (including Other Income) 15232.17 16958.87
Profit before Interest and Depreciation (EBIDTA) 613.15 1805.96
Finance Charges 1018.17 1002.07
Depreciation and Amortization 106.16 181.23
Total Expenditure 15743.35 16336.21
Net Profit/(Loss) Before Tax (PBT) (511.18) 622.66
Less: Tax expense (56.70) (696.37)
Net Profit After Tax (PAT) (567.88) (73.71)
Other Comprehensive Income 7.07 5.99
Total Comprehensive income (560.81) (67.72)
Balance of Profit brought forward 146.71 190.25
Balance available for appropriation (414.10) 146.71
Surplus carried to Balance Sheet (414.10) 146.71

2. COMPANYS PERFORMANCE

The Companys revenue from operations for the year under review aggregated to Rs.15,028.21 lakhs (Previous Year: Rs.16,300.21 lakhs), a 8% decline in growth over previous year. The reduction in total revenue was largely due to Covid-19 related locked down for 47 days, which resulted in stoppage of work. This also had cascading effect to the EBIDTA year on year. In FY 2021, the decline in cost of depreciation by 41.4% to Rs.106.16 lakhs (PY: Rs.181.23 lakhs) is due to change of depreciation method from Written Down Value to Straight-Line Method.

The operations of the Company for the year under review resulted in profit/ (loss) before tax of Rs.(511) lakhs (Previous Year: Rs.623 lakhs) and profit/ (loss) after tax of Rs.(568) lakhs (Previous Year: Rs.(74) lakhs).

The Companys operations were affected to some extent due to the lockdown imposed by Government of India in view of COVID-19 pandemic. Government permitted certain activities in the month of April 2020 subject to certain restrictions. Accordingly, the Company re-started its operations in phased manner from June 2020 and thereafter all the plants and sites are ramping up to the normal course.

The Company has completed construction of tanks at BPCL, Haveli, Pune project and achieved over 85 % completion of tankage project for IOCL at Dhumad, Gujarat. The Company also completed automated warehouse project for ITC at Kapurthala, Punjab, Crude oil storage tanks project at IOCL Paradip, Odisha and Aluminium Dross project for Runaya resource at Jharsuguda, Odisha.

The Nagpur unit of the Company has executed orders for supply of over 6100 MT of steel structures to various clients, including ThyssenKrupp, BHEL, John Zink and Tata Projects Limited (TPL), ISRO.

The Nashik unit of Company delivered over 1308 tonnes of process equipment and achieved highest turnover of Rs.3597 lakhs. The unit also booked orders worth Rs.6378 lakhs during the financial year. The unit has also completed supply and erection and handed over all 6 sets of Air storage vessels to TPL for their prestigious ISRO project.

This year, the unit has completed delivery of Air Vessels under PESO approval, Cladded Water Tanks under ASME ‘U stamp, Preheater of SS 304, Super Heater of T-22 material, Monol-400 cladded vessels and heat exchangers to prestigious client like TPL-oGh, Hindalco Industries Limited, Grasim Industries Limited, Finolex Limited, Schenk Process Etc. The unit has also marked its entry into metallurgically complex Hastelloy cladded plate segment by delivering 1520 MT (9870 Sq. Mtr) of cladded plates to TPL.

During the year under review, the Company received new orders with estimated value of approximately INR 25450 lakhs. The closing order backlog of the Company for the year ended 31st March 2021 stood at approx. INR 26518 lakhs.

Some of the major orders received during the year are as follows:

• From IOCL, Paradip refinery for Construction of 3 Nos. Large Diameter Storage Tanks on LSTK Basis.

• From TPL:

? For Supply, Fabrication and Erection of Pipe Rack Structures for their NFC Kota Project.

? For Tankages and Mechanical Works at ONGC Kakinada.

? For Manufacture and Supply of Hastelloy Cladded Plates for their FGD Projects.

? For Manufacturing of Shop Fabricated Tanks, Pressure Vessels for their NFC Kota Project.

? For Fabrication of Technological Structures for their ONGC Kakinada and ISRO Projects

BUSINESS OUTLOOK

Before the pandemic hit in 2020, the Indian manufacturing industry was working to regain the momentum it had reached after the 2008 recession. However, after the first wave of pandemic-driven shutdowns, segment recoveries for various manufacturers have been uneven. Looking ahead to 2021, the virus resurgence adds uncertainty to Indias growth forecast for 2021; however, it is likely that the economic damage will remain restricted to the April-June quarter. It is expected Indias real GDP to grow at 9.6 per cent in 2021 and 7 per cent in 2022.

Agility will be key to your Companys resilience. The Company will focus on rebuilding lost revenue streams where we have felt the greatest impact from the pandemic and recalibrate supply networks to serve increasing client demands. The Company will be continuing to invest in initiatives to upgrade the manufacturing process and supply network.

The near-term future is now for the Oil and Gas sector. The stance and commitment of Government on clean energy has turned into a "fast-forward" scenario for the industry, where what might have taken years to happen has instead unfolded in a matter of months. Several new prospects in fabrication of storage tanks and structures, manufacturing process vessels, heat exchangers, columns and industrial structures are visible in near future. Your Company, being one of the key players in these sectors, expect to be largely benefitted from these opportunities.

In India Pre-Engineered Steel Buildings (PEB) market is experiencing fair growth fuelled by infrastructure development and the increasing popularity of PEB systems in the industrial sector. Sectors such as automotive, power, logistics, Pharma, FMCG, and capital goods provide good growth opportunity for PEB in India. Stemming from the PEB industry, what is taking shape is the new Heavy Engineering and larger Infrastructure projects which is the next in line for the infrastructural development of the country. Projects like Airports, International terminals, power plants, ports, refinery, and metallurgical plants etc require heavy steel structures and a different approach in comparison to PEB.

The Company is consolidating its focus on EPC and tankage construction. Company shall focus on high quality fabrication/project construction work only from reputed customers. This shall ensure timely execution, continuous cashflows and improvement in our Balance Sheet.

The Company continues to maintain excellent record on Employees Health and Safety at all factory locations and project sites and has received token of appreciation from its clients.

The Company has taken several measures to ensure the well-being of its employees including leveraging the power of technology to enable them to work from home. For those employees who are working in sales offices and manufacturing locations their safety was ensured by stringent use of protective gear, abiding by social distancing norms, and taking all safety precautions. Standing by its core commitment the Company is navigating through these unprecedented times by building stronger and deeper relationships with consumers and its partners.

The Companys Management, with the support of TPL, is making sincere efforts to further improve the operations of the Company and record better performance over the impending years.

3. AWARDS, RECOGNITION AND ACHIEVEMENTS

• Received a certificate of appreciation from GMR Hyderabad International Airport Limited (GHIAL) for continuous improvement and excellent performance in Occupational Health, Safety & Environment at their Additional Fuel Tanks and Associated Project Works at Hyderabad.

• Enlisted with Engineers India Limited (EIL) for a period of Three years for manufacturing of Pressure Vessels of shell thickness upto 60mm.

4. CHANGE IN THE NATURE OF BUSINESS

The basic nature of the business of the Company i.e., construction of storage tanks and associated works, manufacturing of process plant equipment, fabrication of structures, etc. remains the same and there was no change in the nature of business of the Company during the year under review.

5. CREDIT RATING

M/s. India Rating and Research Private Limited (Ind-Ra) has assigned a long-term issuer rating of ‘IND AA-. The Outlook is stable. The instrument-wise rating is as follows:

• "IND AA-/Stable" for the Term Loan.

• "IND AA-/Stable/IND A1+" for the fund based working capital facilities.

• "IND AA-/Stable/IND A1+" for the non-fund based working capital facilities.

6. DIVIDEND

Considering the financial position of the Company, the Board of Directors have not recommended dividend for the year 2020-21. Further, as the members are aware, pursuant to the revised terms of the loan (interest free for 20 years), conversion of Rs.10.00 Crores payables into loans (interest free for ten years) given by the Holding Company, Tata Projects Limited (TPL), your Company is not permitted to declare dividend to the equity Shareholders (including the Holding Company/ promoter) until the re-payment of loan to TPL.

7. TRANSFER OF AMOUNT TO RESERVES

The Company does not propose to transfer any amount to General Reserve for the year ended 31st March 2021.

8. BORROWINGS

The total borrowings of the Company including long-term loans and working capital facilities stood at Rs.5295 lakhs as on 31st March 2021.

9. ANNUAL RETURN

The Annual Return of the Company for the FY 2020-21 in the prescribed form MGT-7 as required under section 92(3) of the Act is available on the website of the Company i.e., www.artson.net

10. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material changes and/ or commitments affecting the financial position of the Company, occurred between the end of the financial year of the Company to which the financial statements relate i.e., 31st March 2021 and the date of the report i.e., 23rd July 2021.

11. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a) Cessation of Directors

During the year under review, Mr. Arvind Chokhany, resigned from the position of Non-Executive Director of the Company, consequent to his resignation as Chief Financial Officer of the Holding Company.

b) Directors retiring by rotation

As per the provisions of the Act and the Articles of Association of the Company, Mr. Pralhad Anant Pawar, Director, retires by rotation and being eligible, offers himself for re-appointment. The proposal for reappointment of Mr. Pralhad Anant Pawar is being placed at the AGM along with the necessary details.

c) Changes in Directorship

Mr. Sunil Sheshagirirao Potdar, Mr. K. Satyanarayana and Mr. Arvind Chokhany were appointed as Additional Directors of the Company at the Board meeting held on 30th April 2020. Their appointment(s) were confirmed/regularised at the 41st AGM of the Company held on 15th September 2020.

d) Changes in the Key Managerial Personnel

The Board of Directors at their meeting held on 27th October 2020, had re-appointed Mr. Saket Mathur as the Manager and COO of the Company for a period of One-year w.e.f. 1st January 2021. In terms of the provisions of the Companies Act 2013 and the rules made thereunder, the ratification of the aforesaid re-appointment is placed at the ensuing AGM for approval of the members.

e) Declaration by Independent Directors

As per the requirement of Section 149 (7) of the Act, Mr. Nalin M. Shah, Ms. Leja Hattiangadi and Mr. Sunil Sheshagirirao Potdar, the Independent Directors of the Company, have submitted their respective declarations that they fulfil the criteria of independence under Section 149 of the Act, read with Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

12. NUMBER OF BOARD MEETINGS

During the financial year, the Board met Six (6) times i.e., on 30th April 2020, 11th May 2020, 31st July 2020, 27th October 2020, 22nd January 2021; and 19th March 2021. The gap between any two consecutive Board Meetings did not exceed One Hundred and Twenty days.

13. ANNUAL EVALUATION

Pursuant to the provisions of the Act and Regulation 25 of the Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors individually as well as the evaluation of the working of the Committees.

The following process was adopted for Board evaluation:

i. Feedback was sought from each Director about their views on the performance of the Board covering various criteria such as degree of fulfilment of key responsibilities, Board structure and composition, establishment, and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning, Board culture and dynamics, quality of relationship between the Board and the Management and efficacy of communication with external stakeholders.

ii. The feedback received from all the Directors was discussed at the Meeting of Independent Directors and the NRC. The performance of the Non-Independent Non-Executive Directors and Board Chairman was also reviewed by them.

iii. The collective feedback on the performance of the Board (as a whole) was discussed by the Chairperson of the NRC with the Chairman of the Board. It was also presented to the Board.

iv. Assessment of performance of every statutorily mandated Committee of the Board was conducted and these assessments were presented to the Board for consideration. Areas on which the Committees of the Board were assessed included degree of fulfilment of key responsibilities, adequacy of Committee composition and effectiveness of Meetings.

v. During the year under review, the recommendations made in the previous year were satisfactorily implemented.

Based on the annual evaluation process and the overall engagement of the Independent Directors in the affairs of the Company during the year, the Board of Directors are of the opinion that the Independent Directors of the Company possess, practice, and preach highest standards of integrity and have the required experience and expertise in their respective areas which enable them to provide guidance to the Management and adds value in the Companys decision process.

14. DIRECTORS RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the Internal, Statutory and Secretarial Auditors and the reviews performed by the Management and the relevant Board Committees, including the Audit Committee, the Board believes that the Companys internal financial controls were adequate and effective during the year ended 31st March 2021. Accordingly, pursuant to Section 134(5) of the Act, based on the above and the representations received from the Operating Management, the Board of Directors, to the best of their knowledge and ability confirm that:

• In the preparation of the annual accounts, the applicable accounting standards have been followed and that there was no material departure therefrom.

• They have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied their recommendations consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company as at 31st March 2021 and of the profit/ loss of the Company for the year ended on that date.

• They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities.

• They have prepared the annual accounts on a going concern basis.

• They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively during the year ended 31st March 2021; and proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively during the year ended 31st March 2021.

15. AUDIT COMMITTEE

The Audit Committee (AC) of the Company comprises of 3 Independent Director(s) and 1 Non-Executive

Director.

S. No. Name Role Designation
1 Mr. Nalin M. Shah Chairman Independent Director
2 Ms. Leja Hattiangadi Member Independent Director
3 Mr. Pralhad Anant Pawar Member Non-Executive Director
4 Mr. Sunil Sheshagirirao Potdar Member Independent Director

The composition of the Committee is as per the requirements of the provisions of Section 177 of the Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). During year under review, Mr. Sunil Sheshagirirao Potdar, Independent Director was inducted as the member of Audit Committee.

The Audit Committee continues to provide valuable advice and guidance in the areas of costing, finance, and internal financial controls. The Committee is governed by terms of reference, which are in line with the regulatory requirements mandated by the Companies Act, 2013 and Listing Regulations.

During the financial year, the Audit Committee met Four (4) times i.e., on 11th May 2020, 31st July 2020, 27th October 2020; and 22nd January 2021.

16. NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee (NRC) of the Company comprises of 2 Independent Director(s) and 1 Non-Executive Director.

S. No. Name Role Designation
1 Ms. Leja Hattiangadi Chairperson Independent Director
2 Mr. Vinayak K. Deshpande Member Non-Executive Director
3 Mr. Nalin M. Shah Member Independent Director

The composition of the Committee is as per the requirements of the provisions of Section 178 of the Act and the Listing Regulations. During the year under review, there were no changes in the composition of the NRC.

The Committee is governed by terms of reference, which are in line with the regulatory requirements mandated by the Companies Act, 2013 and Listing Regulations

During the financial year, the NRC met Five (5) times i.e., on 28th April 2020, 31st July 2020, 27th October 2020, 22nd January 2021; and 19th March 2021.

17. STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee (SRC) of the Company comprises of 2 Independent Director(s) and 1 Non-Executive Director.

S. No. Name Role Designation
1 Ms. Leja Hattiangadi Chairperson Independent Director
2 Mr. Nalin M. Shah Member Independent Director
3 Mr. Pralhad Anant Pawar Member Non-Executive Director

The composition of the Committee is as per the requirements of the provisions of Section 178 of the Act and the Listing Regulations. During the year under review, there were no changes in the composition of the SRC.

The Committee is governed by terms of reference, which are in line with the regulatory requirements mandated by the Companies Act, 2013 and Listing Regulations

During the financial year, the SRC met four (4) times i.e., on 11th May 2020, 31st July 2020, 27th October 2020; and 22nd January 2021.

18. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Corporate Social Responsibility Committee (CSRC) of the Company comprises of 1 Independent Director and 2 Non-Executive Director(s).

S. No. Name Role Designation
1 Ms. Leja Hattiangadi Chairperson Independent Director
2 Mr. Vinayak K. Deshpande Member Non-Executive Director
3 Mr. Pralhad Anant Pawar Member Non-Executive Director

The composition of the Committee is as per the requirements of the provisions of Section 135 of the Act and the Listing Regulations. During the year under review, there were no changes in the composition of the CSRC.

During the financial year, the CSRC met once (1) i.e., on 19th March 2021.

Per provision of the Companies Act 2013, the Rules made thereunder and in compliance with the CSR policy adopted by the Board, an amount of Rs.7.86 lakhs, being 2% of the average net profit for the preceding 3 financial years was required to be spent on CSR activities. Accordingly, the Company has sponsored scholarship for 11 students through the Foundation for Academic Excellence and Access (FAEA), Delhi, under its "TATA- FAEA SCHOLARS" program totalling to Rs.7.70 lakhs. Further, an amount of Rs.20,000 was donated to the Prime Ministers Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) towards CSR expenditure for the FY 2020-21.

The CSR policy and details of spending in the format as per the provision of the Act and listing Regulations is enclosed as Annexure 1.

19. REMUNERATION POLICY

Based on the recommendations of the NRC, the Board of Directors approved and adopted a Remuneration Policy for Directors, Key Managerial Personnel and other employees of the Company as required under Section 178(3) of the Act. The Company has adopted Governance Guidelines which inter alia covers the composition and role of the Board, Board Appointment, Induction and Development, Directors Remuneration, Code of Conduct, Board Effectiveness Review, and mandates of the Board Committees. The Remuneration Policy is placed on the website of the Company www.artson.net for reference and enclosed as Annexure 2.

20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has neither given any loans or guarantee, nor provided any security in connection with any loan to any Body Corporate or person, nor has it acquired by subscription, purchase or otherwise, the securities of any Body Corporate as provided under Section 186 of the Act.

21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All the contracts/ arrangements/ transactions entered by the Company during the year under review with related parties were in the ordinary course of business and at arms length basis. The particulars of such contracts or arrangements with related parties, pursuant to the provisions of Section 134(3)(h) and Rule 8 of the Companies (Accounts) Rules, 2014, in the prescribed form AOC-2 is enclosed as Annexure 3.

22. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars as prescribed under Section 134(3)(m) of the Act pertaining to the conservation of energy, technology absorption and foreign exchange earnings and outgo is enclosed as Annexure 4.

23. RISK MANAGEMENT POLICY

The Company has adopted measures for risk management and mitigation thereof. A formal risk reporting system has been devised by the Company. Project Review Committee has been constituted comprising of Directors and senior officials of the Company to review, assess and mitigate the risks, conversion of risk into opportunities, problems/ irregularities related to implementation and execution of projects (including project delay, change in scope and estimation errors) and implementation of checks and balances for proper execution of future work. The key risk management and mitigation practices include those relating to identification of key risks associated with the business objectives, impact assessment, risk evaluation and reporting.

24. PARTICULARS OF SUBSIDIARY COMPANIES OR JOINT VENTURES OR ASSOCIATE COMPANY

The Company neither has any joint venture with nor does it have any associate or subsidiary Company as defined under various provisions of the Act.

25. PARTICULARS OF DEPOSITS

During the year under review, the Company has neither accepted any deposit covered under Chapter V of the Act nor has it contravened the compliance requirements of Chapter V of the Act.

26. PARTICULARS OF SIGNIFICANT/ MATERIAL ORDERS PASSED, IF ANY

During the year under review, there were no significant and/ or material orders passed by any Regulator/ Court/ Tribunal which could impact the going concern status of the Company and its operations in future.

27. AUDITORS

a) Statutory Auditors

Pursuant to the provisions of Sections 139, 142 and other applicable provisions of the Act read with Rules made thereunder, the Shareholders at the 38th Annual General Meeting (AGM) of the Company held on 21st September 2017, approved the appointment of M/s. Price Waterhouse & Co Chartered Accountants LLP, (PwC) (Firm Registration Number - 304026E/E-300009) as the Statutory Auditors of the Company to hold office for a period of 5 years commencing from the conclusion of the 38th AGM till the conclusion of the 43rd AGM to be held in the year 2022.

The Auditors Report issued by PwC for the financial year 2020-21 does not contain any qualification, reservations, adverse remark, or disclaimer.

b) Internal Auditors

In terms of the provisions of Section 139 of the Act and based on the recommendation of Audit Committee, the Board of Directors at their Meeting held on 21st April 2021 re-appointed M/s. Ernst & Young LLP (EY) (AAB-4343) as the Internal Auditors of the Company. EY confirmed their willingness to be re-appointed as the Internal Auditors of the Company. Further, the Audit Committee in consultation with Internal Auditors, formulated the scope, functioning, periodicity and methodology for conducting the internal audit.

c) Cost Auditors

In terms of the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules 2014, and based on the recommendation of the Audit Committee, the Board of Directors at their Meeting held 21st April 2021 re-appointed M/s. Sagar and Associates, Cost Accountants (Firm Registration No. 000118), as the Cost Auditors for the financial year 2021-22 to conduct the audit of Steel Products of the Company. The necessary consent letter and certificate of eligibility was received from M/s. Sagar & Associates, confirming their eligibility to be re-appointed as the Cost Auditors of the Company.

A resolution seeking ratification of remuneration payable to M/s. Sagar and Associates, Cost Accountants (Firm Registration No. 000118) to conduct the audit of Steel Products of the Company for the financial year 2020-21 has been included in the notice convening 42nd AGM of the Company.

d) Secretarial Auditors

In terms of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and based on the recommendation of the Audit Committee, the Board of Directors at their Meeting held on 11th May 2020 had appointed M/s. MKS & Associates, Company Secretaries (Firm Registration No. S2017TL460500) as the Secretarial Auditors for the financial year 2020-21. The Secretarial Audit Report for the financial year 2020-21 in the prescribed form MR-3 on the audit carried out by the said Auditor is enclosed to this Report as Annexure 5.

Further, based on the recommendation of the Audit Committee, the Board of Directors at their Meeting held on 21st April 2021 re-appointed M/s. MKS & Associates, Company Secretaries (Firm Registration No. S2017TL460500) as the Secretarial Auditors of the Company for the financial year 2021-22. The necessary consent letter and certificate of eligibility was received from M/s. MKS & Associates, Company Secretaries, confirming their eligibility to be re- appointed as the Secretarial Auditors of the Company.

28. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adopted adequate internal financial controls, commensurate with the size and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations was observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial information.

The Company has adopted accounting policies which are in line with the Indian Accounting Standards (Ind-AS) and the Act. These are in accordance with the generally accepted accounting principles in India. Changes in policies, if required, are made in consultation with the Auditors and are approved by the Audit Committee.

The Companys internal audit system is geared towards ensuring adequate internal controls commensurate with the size and needs of the business, with the objective of efficient conduct of operations through adherence to the Companys policies, identifying areas of improvement, evaluating the reliability of financial statements, ensuring compliances with applicable laws and Regulations, and safeguarding of assets from unauthorized use.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors, including audit of the internal financial controls over financial reporting by the Statutory Auditors, and the reviews performed by the Management and the relevant Board and Committees, including the Audit Committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during the financial year 2020-21.

29. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has 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 and the Rules made thereunder. The Company has also constituted a Committee for Prevention of Sexual Harassment at workplace. POSH theme training was conducted for employees and allied resources. No complaints were received under the said policy during the year under review.

30. PARTICULARS OF EMPLOYEES

During the year under review, no employee in the Company drew remuneration in excess of the amounts prescribed under Section 197(12) of the Act, read with Rule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Further the information pursuant to Section 197 of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time is enclosed as Annexure 6.

31. SHARE CAPITAL

The authorised share capital of the Company is Rs.17,00,00,000/- comprising of 15,00,00,000 equity shares of Rs.1/- and 2,00,000 preference shares of Rs.100/- each. Further, the paid-up equity share capital of the Company is Rs.3,69,20,000/- divided into 3,69,20,000 equity shares of Rs.1/- each. During the year under review, there was no change in the capital structure of the Company. Disclosure under Section 67(3)(c) of the Act in respect of voting rights not exercised directly by the employees of the Company is not applicable.

32. ISSUE OF SHARES

During the year under review, the Company has not:

i. Issued any shares with differential voting rights pursuant to the provisions of Rule 4 of the Companies (Share Capital and Debenture) Rules, 2014.

ii. Issued any sweat equity shares to any of its employees, pursuant to the provisions of Rule 8 of the Companies (Share Capital and Debenture) Rules, 2014.

iii. Implemented any Employee Stock Option Scheme for its employees.

33. PURCHASE OF SHARES OF THE COMPANY

During the period under review, the Company has not given any loan, guarantee or security, or any financial assistance to the employees of the Company for the purpose of purchase or subscription for any shares of the Company or its Holding Company pursuant to Section 67(2) of the Act.

34. VIGIL MECHANISM

The Company has adopted a Whistle Blower Policy to report to the Management, the instances of unethical behaviour, actual or suspected, fraud or violation of the Companys code of conduct or ethics policy. Under the policy, the employees can approach the Companys Ethics Counsellor/ Chairman of the Audit Committee for reporting.

35. REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT (MDAR)

Pursuant to the Regulation 15(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, compliance with the Corporate Governance provisions as specified in Regulations 17 to 27 and 46 (2) and para C, D and E of Schedule V are not applicable to the Company because, neither the paid-up share capital exceeds Rs.10 Crore nor the net-worth exceeds Rs.25 Crore as on the last day of previous financial year i.e., 31st March 2021. Accordingly, the report pertaining to the Code of Corporate Governance have not been annexed to this report.

Further, pursuant to the provision of Regulation 34 read with para B of schedule V, the Management Discussion Analysis Report is enclosed as Annexure 7.

36. ACKNOWLEDGEMENTS

The Directors wish to place on record their sincere appreciation for the unrelenting support received during the year from the Shareholders, Tata Projects Limited (Holding Company), customers - both in India and abroad, suppliers and vendors, Banks, and other Government and Regulatory authorities, Financing, and lending institutions. The Board wishes to record its deep appreciation to all the employees and workers of the Company for their dedication and commitment.

Registered Office By Order of the Board
2nd Floor, One Boulevard, Lake Boulevard Road, For Artson Engineering Limited
Hiranandani Business Park, Powai, Mumbai - 400076, Maharashtra
Email: investors@artson.net; Website: www.artson.net Vinayak K. Deshpande
Date: 23rd July 2021 Chairman
Place: Pune DIN:00036827