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Simplex Infrastructures Ltd.

BSE: 523838 Sector: Infrastructure
NSE: SIMPLEXINF ISIN Code: INE059B01024
BSE 00:00 | 24 Apr 2020 Simplex Infrastructures Ltd
NSE 05:30 | 01 Jan 1970 Simplex Infrastructures Ltd

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OPEN 32.40
PREVIOUS CLOSE 30.90
VOLUME 1473
52-Week high 176.00
52-Week low 16.45
P/E 6.02
Mkt Cap.(Rs cr) 185
Buy Price 32.40
Buy Qty 8931.00
Sell Price 32.30
Sell Qty 250.00
OPEN 32.40
CLOSE 30.90
VOLUME 1473
52-Week high 176.00
52-Week low 16.45
P/E 6.02
Mkt Cap.(Rs cr) 185
Buy Price 32.40
Buy Qty 8931.00
Sell Price 32.30
Sell Qty 250.00

Simplex Infrastructures Ltd. (SIMPLEXINF) - Director Report


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Company director report

Dear Members

Your Directors are pleased to present the One Hundredth and First Annual Report alongwith Company's Audited Financial Statements for the financial year ended 31st March 2019.

Financial Results

The financial performance of the Company for the year ended 31st March 2019 issummarized below:

? in mns

Standalone Consolidated
Particulars
31st March 2019 31st March 2018 31st March 2019 31st March 2018
Revenue from Operations 60415 57662 61172 57669
Earning before finance costs tax depreciation and amortization (EBITDA) 8222 7859 8212 7852
Less: Finance Costs 4708 4516 4707 4516
Less: Depreciation and amortization 1677 1834 1683 1840
Share of net Profit/ (loss) of Associates and Joint - - 6 (28)
Ventures accounted for using equity method
Profit before tax 1837 1509 1828 1468
Less: income tax expenses
Current Tax 247 425 247 425
Deferred Tax 503 143 500 143
Excess Current tax provision for earlier years written back (net) (139) (228) (139) (228)
Profit for the year 1226 1169 1220 1128
Attributable to:
Owners of the Company 1226 1169 1223 1128
Non-Controlling Interest - - (3) (*)
Other Comprehensive Income for the year net of tax 363 (97) 374 (125)
Attributable to:
Owners of the Company 363 (97) 375 (118)
Non-Controlling Interest - - (1) (7)
Total Comprehensive Income for the year 1589 1072 1594 1003
Attributable to:
Owners of the Company 1589 1072 1598 1010
Non-Controlling Interest - - (4) (7)
Profit for the period 1226 1169 1223 1128
Balance at the beginning of the year 8450 7613 8423 7627
Profit available to owners for appropriation 9676 8782 9646 8755
Impact of adopting Ind AS 115 and consequential amend- ments in Ind AS 109 as on 1.4.2018 (2095) - (2095) -
Remeasurements of post-employment benefitobligations 3 * 3 *
Impact of measurement of Financial Assets at Fair Value of an associate - - (3) -
Transfer to Debenture Redemption Reserve (98) (302) (98) (302)
Dividend (including Dividend Tax) (34) (30) (34) (30)
Balance carried to Balance Sheet 7452 8450 7419 8423

*Amount is below the rounding offnorm adopted by the Company.

Review of Operations

During the year under review on standalone basis revenue from operations were Rs.60415 mns as against Rs.57662 mns in the previous year. Profit before tax stood at Rs.1837 mns as against Rs. 1509 mns in the previous financial year and net Profit for theyear after tax was at Rs. 1226 mns as against Rs.1169 mns in previous financial year.Other Comprehensive income for the year (net of tax) is Rs. 363 mns as against Rs.(97) mnsin the previous year. After considering other comprehensive income total comprehensiveincome worked out at Rs. 1589 mns as against Rs.1072 mns in the previous year.

On a consolidated basis the revenue from operations increased to Rs. 61172 mns fromRs. 57669 mns in the previous year. Profit before tax was at Rs. 1828 mns as compared toRs. 1468 mns in the previous year and Profit for the year after tax stood at Rs. 1220 mnsas against Rs.1128 mns in the previous year. Other Comprehensive income for the year (netof tax) is Rs. 374 mns as against Rs (125) mns in the previous year. After consideringother comprehensive income total Comprehensive income stood at Rs. 1594 mns as againstRs.1003 mns in the previous year.

Business Review

The Order book of the Company as on March 31 2019 soared to Rs. 160203 mns. During theyear under review the Company bagged a number of new projects amounting to Rs. 31938 mnsin various vertical it operates which includes among others providing undergroundsewerage schemes to additional areas of Tirunelveli Corporation-Phase III under AMRUTTamil Nadu Building and Housing works at Tirupathi Pulivendula and Mydukuru executionof the civil and structural work of BTG & BOP area of package B 2X800MW AP JL PowerPlant Project Gooda construction of 400 KV DC Shamli -Aligarh twin moose transmissionline under tender specification no ETD 8 - 48/18 Shamli-Aligarh civil architectural andstructure works of ash handing plant and ash dyke for 1x660 MW Panki.

Change in Share Capital

??Qualified Institutional Placement

On 23rd May 2018 the Company has issued and allotted 7068490 Equity Shares of facevalue of Rs. 2/-each at an issue price of Rs. 569/- per share ((including premium of Rs.567/-) to raise Rs. 4022 mns by way of Qualified Institutional Placement ("QIP")under Chapter VIII of the Securities and Exchange Board of India (Issue of Capital andDisclosure Requirements) Regulations 2009 and Section 42 of the Companies Act 2013 readwith Rule 14 of the Companies (Prospectus and Allotment of Securities Rules 2014). Use ofthe net proceeds of the Qualified Institutional Placement is intended for augmenting itsworking capital resources to cater to growing business needs and for general corporatepurposes. After the QIP the paid-up share capital of the Company increased to Rs.113467507/-.

Preferential Issue of convertible warrants to Promoters

The Company has issued and allotted 3609261 convertible equity warrants at a price ofRs. 554.13 per warrant on a preferential basis in accordance with Chapter VII of the SEBI(Issue of Capital and Disclosure Requirements) Regulations 2009 not exceeding Rs.2000mns on 15th May 2018 with a right to Warrant Holders to apply for and get allotted oneequity share of face value of Rs. 2/- each for each warrant within a period of 18 monthsfrom the date of allotment of warrants to (i) Anupriya Consultants Private Limited

(ii) RBS Credit & Financial Developments Private Limited

(iii) Baba Basuki Distributors Private Limited and

(iv) JMS Mining Private Limited ("Warrant Holders") being companies formingpart of the Promoter Group of the Company. The Company had received Rs. 500 mns being 25percent of the price fixed per Warrant from the warrant holders at the time of allotment;and balance 75 percent shall be payable by the Warrant Holders on exercise of option toconvert each warrant to one equity share of face value of Rs. 2/- each in one or moretranches within the said period of 18 months. Further on 5th January 2019 602000 (SixLakh Two Thousand) Equity Shares having Face Value of Rs. 2/- each were allotted to oneof the Warrant Holder pursuant to conversion of the aforesaid warrants issued at thepredetermined price of Rs. 554.13/- per warrant aggregate value of Rs. 333586260/-.Subsequent to the aforesaid allotment the paid-up capital of the Company has increasedfrom Rs.113467507/- to

Rs.114671507/- comprising of 57142820 Equity Shares of face value of Rs.2/- each.The shareholding of the Promoters has increased from 49.29% to 49.83% of the total paid-upshare capital of the Company.

Material changes and commitments

There are no material changes or commitments affecting the financial position of theCompany which have occurred after March 31 2019 till the date of this report.

Dividend

The Board of Directors has recommended a dividend of Re. 0.50 per equity share for theFY 2018-19 (Previous year Re. 0.50 per equity share) of face value of Rs. 2/- each. Thedividend on 57142820 equity shares including dividend tax for the FY 2018-19 wouldaggregate Rs. 34.44 mns. The dividend payment is subject to approval of the Members at theensuing Annual General Meeting.

Transfer to General Reserves

The Company has not transferred any amount to the General Reserves during the currentfinancial year.

Extract of the Annual Return

An extract of the annual return in Form MGT-9 in accordance with section 92(3) of theCompanies Act 2013 (‘the Act') and relevant Rules made thereunder is annexedherewith as "Annexure- 1"

Number of meetings of the Board

Six meetings of the Board were held during the year. The details of the meetings of theBoard are provided in the corporate governance report which forms part of this Report.

Audit Committee

The details pertaining to composition of Audit Committee are included in the Corporategovernance Report which forms part of this report.

Directors' Responsibility Statement

The financial statements are prepared in accordance with Indian Accounting Standards(Ind AS) as prescribed under Section 133 of the Act read with Rule 3 of the Companies(Indian Accounting Standards) Amendment Rules 2016.

Accounting policies have been consistently applied except where a newly issuedaccounting standard is initially adopted or a revision to an existing accounting standardrequires a change in the accounting policy.

Your Directors to the best of their knowledge and belief and according to theinformation and explanations obtained by them make the following statements in terms ofsection 134 (3)(c) & 134 (5) of the Companies Act 2013:

(a) In the preparation of the annual accounts for the financial year ended 31st March2019 the applicable accounting standards have been followed along with proper explanationrelating to material departures;

(b) that appropriate accounting policies were selected and consistently applied andjudgments and estimates were made that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe Profits of the company for that period;

(c) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) That the annual financial statements have been prepared on a going concern basis;

(e) That proper internal financial controls were followed by the company and suchinternal financial controls are reviewed by the Management and Independent InternalAuditors and any material weakness noticed during such review remedial action is taken bythe management so that internal control system as also its implementation is adequate andeffective; and

(f) That proper systems to ensure compliance with the provisions of all applicable lawswere in place and that such systems were adequate and operating effectively.

Policy on Directors' Appointment and remuneration and other details

The Company's policy on Directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Companies Act 2013 is hosted on the Company's websiteat www.simplexinfra.com. The details relating to Nomination and RemunerationCommittee are given in the Corporate Governance Report which forms part of this Report.

Particulars of Employees and other additional information

The details of remuneration as required to be disclosed under the Companies Act 2013and the Rules made thereunder are given in Annexure ‘2' forming part of thisBoard Report. Disclosures as contained in Rule 5 (1) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided at Table 1(a) of the Annexure-2.

The information in respect of employees of the Company required pursuant to Rule 5(2)and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 as amended from time to time is provided at Table 1 (b) of the Annexure-2 formingpart of this Report. In terms of Section 136(1) of the Act and the rules made thereunderthe Report and Accounts are being sent to the shareholders excluding the aforesaid Table 1(b). Any Shareholder interested in obtaining a copy of the same may write to the CompanySecretary. None of the employees listed in the said table is related to any Director ofthe Company.

During the year under review there are no employees posted in India who are employedthroughout the year and are drawing a remuneration of Rs.1.02 Crore or more per annum oremployed for part of the year and drawing remuneration of Rs. 8.5 Lakhs or more per month.Further there were no employees of the Company who held 2% or more of the paid -upcapital and drew a remuneration which was in excess of that drawn by the Whole-timeDirectors. Any Shareholder interested in obtaining the details of employees posted outsideIndia and in receipt of a remuneration of Rs. 60 Lakhs per financial year or Rs. 5 lakhsper month or more may write to the Company Secretary of the Company.

Particulars of Loans Guarantees or Investments

The Company is engaged in the business of contract constructing infrastructuralfacilities as specified in

Schedule VI of the Companies Act 2013. In accordance with the exemption provided bySection 186 (11) to the companies engaged in the business of providing infrastructuralfacilities the provisions of Section 186 (2 ) to (13) of the Act in respect of providingloan guarantee or security to any other body corporate/ person do not apply to theCompany.

Related Party Transactions

All the related party transactions were in the ordinary course of business or at arm'slength.The Company periodically reviews and monitors related party transactions. Astatement of all related party transactions is presented before the Audit Committee on aquarterly basis.There are no materially significant related party transactions made by theCompany with Promoters Directors or Key Managerial Personnel etc. which may havepotential conflict with the interest of the Company at large. Accordingly the disclosureof Related Party Transactions as required under Section 134(3) (h) of the Companies Act2013 in Form AOC 2 is not applicable.

However the details of the related party transactions are set out in Note 30 to thestandalone financial statements forming part of this Annual Report.

The Company has a Policy on materiality of and dealing with Related Party Transactionsas approved by the Board which is available at its website www.simplexinfra.com.

Risk Management

The Board of Directors of the Company has formed a Risk Management Committee to frameimplement and monitor the risk management plan for the Company. The Company also has inplace a Risk Management Policy to identify and assess the key risk areas. The Members ofthe Risk Management Committee monitors and reviews the implementation of various aspectsof the Risk management policy. Major risks identified by the Company are systematicallyaddressed through mitigating actions on a continuous basis. At present no particular riskwhose adverse impact may threaten the existence of the Company is visualized.

The details of risk management are covered in the management discussion and analysiswhich forms part of this report.

Corporate Social Responsibility (CSR)

The Company has constituted a Corporate Social Responsibility Committee comprising Mr.Rajiv Mundhra Executive Chairman as the Chairman of the Committee Mr.S. DuttaWhole-time Director and Mr. S.K. Damani Independent Director of the Company and hasframed a corporate social responsibility policy which is available at the website of theCompany at www.simplexinfra.com. As part of CSR initiatives your Company focuseson promotion of education eradication of hunger and malnutrition art and culture andlivelihood enhancement projects. The Company will continue to support the social projectsthat are consistent with the policy.

The Company has every year fulfilled its CSR responsibilities in its identifiedsegments- education healthcare welfare of poor and girl child preservation of art andheritage. Construction industry as a whole is going through a critical time and is facingstrong challenges in terms of liquidity. Since the Company is also under the constructionindustry therefore it is not an exception and is also facing the same critical situationas felt by others in the sector. During the year the company contributed Rs. 25 lakhs toMAITRI for establishment of vocational training center for women and girl children andweaker section and Rs.1 Lakh to Coast Guard Region for welfare of coast guard personnels.In view of the above the Company was able to spend only Rs. 26 Lakhs towards its CSRobligations during the financial year as against the budgeted Rs. 2.07 crores as requiredunder the Companies Act 2013.It is expected that the Construction Industry will soonimprove with better liquidity and then the Company will be in a position to allocate morefunds towards its CSR activities.

The annual report on CSR containing particulars specified in Companies (CorporateSocial Responsibility Policy) Rules 2014 is set out herewith as "Annexure-3".

Performance evaluation of the Board its Committees and Individual Directors

During the year formal annual evaluation of the Board its Committees and individualDirectors were carried out as per the framework laid down by the Board for formal annualevaluation of the performance of the Board

Committees and individual Directors. It includes circulation of questionnaires to allDirectors for evaluation of the Board and its Committees which entails a wide range ofparameters facilitating proper evaluation of the Board its Committees and individualDirectors. The response/ feedback/ comment received from each Director is carefullyconsidered by the Board.

A separate meeting of Independent Directors was also held to review the performance ofWhole-time Directors performance of the Board as a whole and performance of the Chairmanof the Company taking into account the views of Executive Directors and Non-ExecutiveDirectors. Performance evaluation of independent directors was done by the entire Boardexcluding the independent director being evaluated. The Board of Directors expressed theirsatisfaction with the evaluation process and also the performance of DirectorsIndependent Directors Chairman and performance of the Board as a whole was foundsatisfactory.

Subsidiaries Associates & Joint Ventures

As on 31st March 2019 your Company has seven Subsidiaries namely (i) Simplex (MiddleEast) Limited UAE (ii)Simplex Infrastructures Libya Joint Venture Co. Libya (iii)Simplex Infra Development Private Limited (iv) Maa Durga Expressways Private Limited (v)Jaintia Highway Private Limited (vi) Simplex (Bangladesh)Private Limited and (vii) PCPatel Mahalaxmi Simplex Consortium Private Limited three Associates namely (i)ShreeJagannath Expressways Private Limited (ii) Raichur Sholapur Transmission Company PrivateLimited and (iii) Simplex Infrastructures LLC Oman and two Joint Venture Companies namely(i) Arabian Construction Co-Simplex Infra Private Limited and (ii) Simplex Almoayyed W.L.L

Pursuant to provisions of Section 129 (3) of the Act a statement containing thesalient features of the financial statement of the Company's subsidiary/associate/ jointventure companies is provided in the Form AOC-1 is attached after the consolidatedfinancial statements of the Company.

In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on our websitewww. simplexinfra.com. These documents will also be available for inspection till the dateof the AGM during business hours at our registered office .

Formation/Cessation of Company's Subsidiaries/ Associate/ Joint Venture

During the year under review no company has become or has ceased to be subsidiaryjoint venture or associate company.

Directors

In accordance with the provisions of the Act Mr. D. N. Basu Whole-time Directorretires by rotation and being eligible has offered himself for reappointment at theensuing annual general meeting.

The Board of Directors on the recommendation of Nomination and Remuneration Committeehas re-appointed Mr. D.N. Basu as Whole-time Director of the Company for a period of 2(two) years with effect from November 21 2019 subject to approval of the shareholders atthe ensuing Annual General Meeting as his current term of office is upto November 202019.

Pursuant to the provisions of Section 149 of the Act and Listing Regulations Mr.Asutosh Sen Mr. N. N. Bhattacharyya Mr. Sheo Kishan Damani and Ms. Leena GhoshIndependent Directors of the Company have submitted their declaration that they meet withthe criteria of independence as provided in Section 149 (6) of the Act and are notdisQualified from continuing as Independent Directors of the Company.

All the Directors have submitted the requisite disclosures/ declarations as requiredunder the relevant provisions of the Companies Act 2013. Appropriate resolution seekingyour approval and brief resume / details for re-appointment of Directors is furnished inthe notice of the ensuing Annual General Meeting.

Key Managerial Personnel

In terms of the provisions of Section 203 of the Act Mr.A.N.Basu Whole-time DirectorMr. S. Dutta Whole-time

Director & CFO and Mr. B. L. Bajoria Sr. Vice President & Company Secretaryare the Key Managerial Personnel of the Company.

Remuneration and other details of the said Key Managerial Personnel for the financialyear ended March 31 2019 are mentioned in the extract of the Annual Return (Annexure-1 ) which is attached to the Board's Report.

Public Deposits

The Company has not accepted/ renewed any fixed deposits from the public or itsemployees during the year under review.

Signi3 cant and material orders passed by Regulators/Courts/Tribunals

During the year under review there were no significant or material orders passed bythe Regulators/ Courts/Tribunals impacting the going concern status of the Company and itsoperations in future.

Internal Control Systems and their adequacy

The details in respect of internal control systems and their adequacy are included inthe management discussion & analysis report which forms part of this report.

Vigil Mechanism (Whistle Blower Policy)

The Company has formulated a Whistle Blower Policy to provide a formal mechanism toDirectors and employees to report their concerns about unethical behaviour actual orsuspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policyprovides for adequate safeguards against victimization of employees who avail themechanism and also provides for direct access to the Chairman of the Audit Committee.Appropriate steps are taken for redressing the grievances as per the mechanism approved bythe Board as and when the complaints are received.

The Whistle Blower policy is available on the website of the Company www.simplexinfra.com.

Statutory Auditors

M/s. S. R. Batliboi & Co. LLP Chartered Accountants (Firm Registration No.301003E/E300005) were appointed as Statutory Auditors for a term of 5 (3 ve) consecutiveyears at the Annual General Meeting of the Company held on September 22 2017 subject torati3 cation of their appointment by the shareholders every year . The Ministry ofCorporate A3 airs vide its Noti3 cation dated 7th May 2018 has dispensed with therequirement of rati3 cation of Auditor's appointment by the shareholders every year.Hence the resolution relating to rati3 cation of Auditor's appointment is not included inthe Notice of the ensuing Annual General Meeting.

M/s. S. R. Batliboi & Co. LLP continue to be the Statutory Auditors of theCompany. M/s. H. S. Bhattacharjee & Co. Chartered Accountants (Firm RegistrationNo.322303E) were appointed as Statutory Auditors for a term of 5 (3 ve) consecutive yearsat the Annual General Meeting of the Company held on September 4 2014 therefore theirterm expires at the conclusion of the ensuing annual general meeting and being eligibleoffer themselves for re-appointment . As required under the provisions of Section 139 ofthe Companies Act 2013 the Company has obtained a written consent and a certificate fromM/s. H. S. Bhattacharjee & Co. to the effect that their re-appointment if madewould be in accordance with Section 139(1) of the Companies Act 2013 and the Rules madethere under as may be applicable and within the limits prescribed under section 141(3)(g)of the Act and that they are not disQualified for reappointment. Based on therecommendations of the Audit Committee the Board has recommended the re-appointment ofM/s. H. S. Bhattacharjee & Co. as Statutory Auditors of the Company for a period oftwo consecutive years to hold office from the conclusion of the ensuing Annual GeneralMeeting of the Company till the conclusion of the 103rd Annual General Meeting to be heldin the year 2021 subject to the approval of the members in the ensuing Annual GeneralMeeting.

During the year under review no frauds were reported by the Auditors under section143(12) of the Act.

Boards' Explanation on Auditors' Qualification on Financial Statements

Standalone Financial Statements

(i) a) We refer to Clause (a) of Basis for Qualified Opinion of Independent AuditorsReport of M/s. S.R.Batliboi & Co.LLP where the Auditors have Qualified that Note 3839 and 41(a) regarding certain old balances of unbilled revenues loan/advances tradereceivables retention monies inventories at project sites and claims recoverableaggregating Rs.68924 lakhs Rs.28548 lacs Rs.1558feilakhs Rs.5354 Lakhs Rs.2854lakhs and Rs.6909 lakhs respectively in respect of which they have been informed thatthe management is in regular discussion with the concerned customers for completion ofnecessary certifications and /or recovery thereof. Based on the information andexplanations provided to them they are unable to comment upon the extent ofrecoverability of Rs.117772 lacs out of the aforesaid amounts and classification of theaforesaid amounts aggregating Rs.128172 lacs as current the likely period for collectionof these balances considered by the Company for determination of their fair values and anyother consequential adjustments that may be required in these financial statements in thisregard.

The Management is of the view that the certification of unbilled revenue by customersand acceptance of final bills by customers often takes significant period of time andvaries from project to project. At this stage based on discussion with concernedcustomers the management believes that unbilled revenue of Rs. 68924 lacs as on 31stMarch 2019 will be billed and realised in due course. The unbilled revenue also includespart of the revenue arising from Cost to Complete estimates as per Percentage ofCompletion Method (POCM) under Ind AS 115 "Revenue from Contracts withCustomers". The CTC computation is regularly reviewed and necessary revisions aremade as and when necessary by the Management. The aforesaid amounts have been consideredas current based on management's expectation of realization of these amounts in normaloperating cycle. The matter has been explained in Note 41(a) forming part of StandaloneFinancial Statements. The above reason explains the qualification of one of the jointauditors on this issue in their audit report on the Company's financial results for theyear ended 31st March 2019. Further on this issue the other joint auditors are inagreement with the views of the management. Loans and Advances amounting to Rs. 28548lacs have been considered as current and out of which for Rs. 18148 lacs the Company isin active pursuit and con3 dent of recovery/ settlement of these advances within areasonable period of time. On this issue the other joint auditors are in agreement withthe views of the management. The matter has been explained in Note 39 forming part ofStandalone Financial Statements.

The above reason explains the qualification of one of the joint auditors on this issuein their audit report on the Company's financial results for the year ended 31st March2019.

As on 31st March 2019 in respect of trade receivables of Rs.1558feilacs and claimsrecoverable of Rs.6909 lacs from customers in respect of various project sites areoutstanding for a long period of time. At this stage based on discussions andcorrespondences with customers the management believes the above balances are good andrecoverable. Inventories aggregating Rs.2854 lacs as on 31st March 2019 pertaining tocertain completed project sites are readily usable. Retention monies due from customersare receivable only after clearance of final bill by customers and after expiry of defectliability period after execution of contracts. In the opinion of the management suchretention amounts aggregating Rs.5354 lacs of certain completed contracts as on 31stMarch 2019 are good and recoverable. The aforesaid amounts have been considered ascurrent based on management's expectation of realisation of these amounts in normaloperating cycle. The matter has been explained in Note 38 forming part of StandaloneFinancial Statements. The above reasons explain the qualification of one of the jointauditors on this issue in their audit report on the Company's financial results for theyear ended 31st March 2019. On this issue other Joint Auditors are in agreement with theviews of the management.

Further on this issue there is a difference of opinion between the other Joint Auditorof the Company M/s. H. S. Bhattacharjee & Co. Chartered Accountants and they are inagreement with the views of the Management and they have issued a separate audit report inthis regard. The Board is of the opinion that the matter being explained in detail aboveand also at Note no.3839 and 41(a) of the standalone financial statements areself-explanatory and do not call for further explanation. b) We refer to Clause (b) ofBasis for Qualified Opinion of Independent Auditors Report of M/s. S.R.Batliboi &Co.LLP where the Auditors have mentioned that Note 41(b) in respect of current assetswhich includes certain balances of trade receivables retention monies unbilled revenuesstatutory advances pending assessment by relevant authorities and other balances includingthose subject to arbitration aggregating to Rs. 1196feilacs Rs. 337feilacs Rs. 29405lacs Rs. 24162 lacs and Rs. 18586 lacs respectively which in their opinion should havebeen classified as non-current assets. They are further unable to comment on any otherconsequential adjustments that may be required in these financial statements in thisregard The management is of the view that in respect of classification of certain currentassets into non-current assets the Company provides Expected Credit Loss (ECL) on thesecurrent assets. The Company considers an average normal operating cycle for its operationsthough the operating cycle for all the projects are not uniform the Company hasclassified certain trade receivables retention monies unbilled revenue statutoryadvances pending assessment by relevant authorities security deposits and other balancesincluding those subject to arbitrations amounting to Rs. 1196feilacs Rs. 337feilacsRs. 29405 lacs Rs.24162lacsRs.NilandRs.18586lacsrespectively as current assets. Theabove reason explain the qualification by one of the Joint Auditor's on this issue intheir Audit report on the Company's financial results for the year ended 31st March 2019.On this issue the other Joint Auditors are in agreement with the views of the management.Further on this issue there is a difference of opinion between the other Joint Auditor ofthe Company M/s. H. S. Bhattacharjee & Co. Chartered Accountants and they are inagreement with the views of the Management and they have issued a separate audit report inthis regard. The Board is of the opinion that the matter being explained in detail aboveand also at Note no. 41(b) of the standalone financial statements are self-explanatory anddo not call for further explanation. (ii) We refer to Qualified Opinion Para of Annexure 2to the Independent Auditors' Report of M/s. S.R.Batliboi & Co.LLP CharteredAccountants one of the joint statutory auditors on the Internal Financial Controls undersection 143(3)(i) of the Act have mentioned: "According to the information andexplanations given to us and based on our audit the following material weaknesses havebeen identified in the operating effectiveness of the Company's internal financialcontrols over financial reporting with reference to these standalone financial statementsas at March 31 2019:

a) The Company's internal financial controls for evaluation of recoverability of oldbalances of unbilled revenue loans/advances trade receivables retention moniesinventories at project sites and claims recoverable were not operating effectively as onMarch 312019 which could potentially result in the Company not recognising appropriateprovision in the standalone financial statements in respect of assets that are doubtful ofrecovery/credit impaired.

b) The Company's internal financial controls for assessing the period over which oldbalances of unbilled revenue loans/ advances trade receivables retention monies andclaims recoverable are expected to be recovered were not operating effectively as on March31 2019 which could potentially result in the Company not appropriately measuring thefair values of those financial assets

c) The Company's internal financial controls for classification of unbilled revenuesloans/advances trade receivables retention monies inventories at project sites claimsrecoverable statutory advances pending assessment by relevant authorities and otherbalances as current were not operating effectively as on March 312019 which couldpotentially result in the Company not appropriately classifying the above assets asnon-current.

All the qualifications mentioned above have been explained in detail in earlierparagraphs in respect of qualifications mentioned in one of the Joint Auditors Report M/s. S.R.Batliboi & Co.LLP and also at note no. 38 39 41(a) and 41(b) of thestandalone financial statements The Board is of the opinion that the matter beingexplained in detail above and also at Note no. 383941(a) and 41(b) of the standalonefinancial statements are self-explanatory and do not call for further explanation.

Consolidated Financial Statements

(i) a) We refer to clause (a) of Basis for Qualified Opinion of Independent Auditors'Report of M/s. S.R. Batliboi & Co. LLP where the Auditors have Qualified that in Note3738 and 40(a) regarding certain old balances of unbilled revenues loan/advances tradereceivables retention monies inventories at project sites and claims recoverableaggregating Rs. 68924 lakhs Rs. 28548 lacs Rs.1558feilakhs Rs. 5354 Lakhs Rs.2854 lakhs and Rs. 6909 lakhs respectively in respect of which they have been informedthat the management is in regular discussion with the concerned customers for completionof necessary certifications and /or recovery thereof. Based on the information andexplanations provided to them they are unable to comment upon the extent ofrecoverability of

Rs.117772 lacs out of the aforesaid amounts and classification of the aforesaidamounts aggregating Rs.128172 lacs as current the likely period for collection of thesebalances considered by the Company for determination of their fair values and any otherconsequential adjustments that may be required in these consolidated financial statementsin this regard.

We would like to inform that the matter has been explained in Note 3738 and 40(a)forming part of the Consolidated Financial Statements. b) We refer to clause (b) of Basisfor Qualified Opinion of Independent Auditors' Report of M/s. S.R. Batliboi & Co. LLPwhere the Auditors have Qualified that in Note 40(b) in respect of current assets whichincludes certain balances of trade receivables retention monies unbilled revenuesstatutory advances pending assessment by relevant authorities and other balances includingthose subject to arbitration aggregating to Rs. 1196feilacs Rs. 337feilacs Rs. 29405lacs Rs. 24162 lacs and Rs. 18586 lacs respectively which in their opinion should havebeen classified as non-current assets. They are further unable to comment on any otherconsequential adjustments that may be required in these consolidated financial statementsin this regard.

(ii) We refer to Qualified Opinion Para of Annexure 1 to the Independent Auditors'Report of M/s. S. R. Batliboi & Co. LLP Chartered Accountants one of the jointstatutory auditors on the Internal Financial Controls under section 143(3)(i) of the Acthave mentioned: "According to the information and explanations given to us and basedon the reports issued by other auditors on internal financial controls over financialreporting in case of subsidiary companies its associate companies and a joint venturewhich are companies incorporated in India the following material weakness have beenidentified as at March 31 2019:

a) the Holding Company's internal financial controls for evaluation of recoverabilityof old balances of unbilled revenue loans/advances trade receivables retention moniesinventories at project sites and claims recoverable were not operating effectively as onMarch 31 2019 which could potentially result in the Holding Company not recognisingappropriate provision in the consolidated financial statements in respect of assets thatare doubtful of recovery/credit impaired.

b) the Holding Company's internal financial controls for assessing the period overwhich old balances of unbilled revenue loans/advances trade receivables retentionmonies and claims recoverable are expected to be recovered were not operating effectivelyas on March 31 2019 which could potentially result in the Holding Company notappropriately measuring the fair values of those financial assets.

c) the Holding Company's internal financial controls for classification of unbilledrevenues loans/ advances trade receivables retention monies inventories at projectsites claims recoverable statutory advances pending assessment by relevant authoritiesand other balances as current were not operating effectively as on March 312019 whichcould potentially result in the Holding Company not appropriately classifying the aboveassets as non-current.

All the qualifications on Consolidated Financial Results are similar to that ofStandalone Financial Results and have been explained in detail in the foregoing paragraphdetails of which is appearing under 'Standalone Financial Results' Further on theseissues there is a difference of opinion between the other Joint Auditor of the CompanyM/s. H. S. Bhattacharjee & Co. Chartered Accountants and they are in agreement withthe views of the Management and they have issued a separate audit report in this regard.The Board is of the opinion that the matter being explained in detail above as appearingunder 'Standalone Financial Results' and also at Note no.3738 40 (a) and 40(b) of theconsolidated financial statements is self-explanatory and do not call for furtherexplanation.

Secretarial Auditor and Secretarial Audit Report

Secretarial Audit for the FY 2018-19 was conducted by Mr. Deepak Kumar KhaitanPractising Company Secretary (Membership No.FCS-5615 and C.P.No5207) in accordance withthe provisions of Section 204 of the Act and Regulation 24A of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. The Secretarial Auditors' Report isannexed herewith as "Annexure -4".

The Secretarial Audit Report contains the following observations:-"Board Meetingfor the approval of unaudited results of the company for the quarter ended 30th June 2018was held on 14th August 2018 which concluded at 9:00 P.M. However the results werepublished in the newspapers on 17th August 2018 instead of 16th August 2018 and hencethe requirement of publication within 48 hours of conclusion of board meeting asprescribed under Regulation 47(3) of SEBI LODR could not be complied with. As explained bythe management the Board Meeting concluded at 9:00 P.M. and hence it was not possible topublish the financial results on 15th August 2018 and further there was no newspaperpublication on 16th August 2018 because 15th August 2018 was a National Holiday andhence the Company could comply with the publication requirement as aforesaid only on 17thAugust 2018." The Board is of the opinion that the matter is self-explanatory and donot call for further explanation.

Cost Audit

Pursuant to Section 148 of the Companies Act 2013 read with Companies (Cost Record& Audit) Amendment Rules 2014 as amended from time to time your Company hasappointed M/s Bandyopadhyaya Bhaumik & Co. Cost Accountants to conduct the audit ofcost records of the Company for the financial year 2018-19.

As required under the Act a resolution seeking members approval for rati3 cation ofremuneration of the Cost Auditors will form part of the notice convening the AnnualGeneral meeting.

Consolidated Financial Statement

Your Company has prepared Consolidated Financial Statements in accordance with Section129 (3) of the Act and applicable accounting principles generally accepted in Indiaincluding the Indian Accounting Standards specified in the Companies (Indian AccountingStandards) Rules 2015 (as amended) under Section 133 of the Act. The ConsolidatedStatements reflect the results of the Company and that of its Subsidiaries Joint Venturesand Associates. As required by Regulations 33 of the Listing Regulations with the StockExchanges the Audited Consolidated Financial Statements together with the Auditors Reportthereon are annexed and form part of this Annual Report. The Consolidated FinancialStatement comprises of the financial statements of the Company and those of itssubsidiaries Joint Ventures and its Associate Companies. Further pursuant to theprovisions of Section 136 of the Act the financial statements of the Company includingthe consolidated financial statements and separate audited accounts in respect of itssubsidiaries are available on the website of the Company www.simplexinfra.com.Thefinancial statements of the Subsidiary Companies are kept open for inspection by theShareholders at the Registered OFFce of the Company and a statement containing the salientfeatures of the Company's financial statement of the Company's subsidiary/ associate/joint ventures is attached as aforesaid

Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under Section 134(3)(m) of the Actread with Companies (Accounts) Rules 2014 are provided in the Annexure – 5 tothis Report.

Management Discussion and Analysis

Management Discussion and Analysis for the year under review as stipulated underRegulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is presented in a separate section forming part of the Annual Report.

Corporate Governance Report

A separate report on 'Corporate Governance' including a certificate from M/s. H. S.Bhattacharjee & Co. Chartered

Accountants Joint Statutory Auditors of the Company confirming compliance of theRegulation 34 of the Listing Regulations is annexed hereto and forms a part of the report.

Capital Expenditure

During the year under review the Company has made additions of Rs.1063.3 mns to itsFixed Assets consisting tangible assets of Rs 1060.8 mns and intangible assets of Rs 2.5mns

Prevention of Sexual Harassment of Women

The Company has formulated a policy on Prevention of Sexual Harassment of Women atWorkplace in accordance with the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules framed thereunder. An InternalComplaints Committee (ICC) with requisite number of representatives has been set up toredress complaints relating to sexual harassment if any received from women employees .During the financial year ended March 31 2019 the

Committee has not received any complaints pertaining to sexual harassment.

Acknowledgment

Your Directors would like to express their sincere appreciation for the co-operationand support received from the Financial Institutions Banks Customers Vendors Centraland State Government Authorities Regulatory Authorities Stock Exchanges and theCompany's all valued stakeholders. Your Directors also take this opportunity to place onrecord their gratitude for the e3 orts and continuous hard work of all the employees andtheir contribution to the progress of the Company.

By Order of the Board

For Simplex Infrastructures Limited Rajiv Mundhra

Executive Chairman DIN: 00014237

Place: Kolkata

Date: May 30 2019


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