Simplex Castings Ltd Directors Report.

Dear Members,

Your Directors take pleasure in presenting their 38th Annual Report of the Company, together with the audited accounts for the financial year ended 31st March, 2018.

FINANCIAL RESULTS

Financial results are presented in the table below:

(Rs in Lacs

Particulars

Financial Year ended 31st March, 2018

Financial Year ended 31st March, 2017

Revenue from Operations (Gross)

22442.04

23676.33

Other Income

145.11

177.71

Earnings Before Interest , Taxes, Depreciation and Amortization

2735.70

2281.55

Less: Finance Costs

1163.14

1128.61

Less: Depreciation and amortization expenses

1244.58

782.37

Profit Before Tax

327.97

370.57

Less: Tax Expense

(7.50)

147.07

Profit After Tax

335.47

223.51

Other Comprehensive Income

(103.08)

42.93

Total Comprehensive Income

232.40

266.44

Your Company financial statements for the year ended March 31,2018 are the financial statements prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016, as applicable. The figures for all the comparative periods have been restated to give impact to the IND AS.

DIVIDEND

The Board of Directors of your Company are pleased to recommend dividend Rs 0.50 (5%) on Equity Shares of Rs 10/- each for the FY ended 31st March,2018 subject to approval of the shareholding at the ensuring Annual General Meeting.

BUSINESS PERFORMANCE

The financial year 2017-18 was yet another challenging year for the economy. While the domestic economy was looking for improvement post demonetization led slowdown in growth, the same was delayed caused by the further disruptions followed by implementation of Goods and Service Tax (GST). While GST in long term is beneficial for domestic economy, the implementation of the same delayed due to initial teething troubles, the process of industrial recovery by couple of months.

The robust domestic demand, focused cost reduction drive and value added special product portfolio helped the Company deliver strong profitable performance and consequently the Companys profitability improved during F.Y 2017-18.

Revenue from operations for the F.Y. 2017-18 stood at Rs 22442.04 Lacs against the Rs 23676.33 Lacs of previous year. However Net Profit after tax for the F.Y 2017-18 was Rs 335.47 Lacs, an increase of 50.10% over the previous year of Rs 223.51 Lacs. EBIDTA for the F.Y 2017-18 Rs 2735.70 Lacs as compared to previous year Rs 2281.55 Lacs, an increase of 19.91%.

SUBSIDIARY, JOINT VENTURE (JV) AND ASSOCIATE COMPANIES

The Company does not have any subsidiary, associate or joint venture company.

RESERVES

Your Company did not transfer any amount to the General Reserves Account during the Financial Year 2017-18.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed report on the Management Discussion and Analysis in terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided as a separate chapter in the annual report.

MATERIAL CHANGES AND COMMITEMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes or commitments occurring after 31st March 2018, which may affect the financial position of the company or may require disclosure.

CREDIT RATINGS

The Companys financial disciple and Prudence is reflected in the strong credit ratings ascribed rating agencies as given below:

Instrument Rating Agency Rating Outlook
Long Term SMERA BBB- Stable
Short Term SMERA A3 Stable

PUBLIC DEPOSITS

During the year under review, your Company has not accepted any deposits within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with Companies (Acceptance of Deposits )Rules, 2014 (including any statutory Modification(s) or re-enactment(s) for the time being in force).

CORPORATE GOVERNANCE

The Company has taken the requisite steps to comply with the recommendations concerning Corporate Governance.

A separate statement on Corporate Governance together with a certificate from the auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

There was no change in the nature of business of the Company during the Financial Year ended 31st March, 2018.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Regulation 16(1)(b) of Listing Regulations (including any statutory modification(s) or reenactments) for the time being in force).

In accordance with the provisions of the Companies Act, 2013, none of the Independent Directors are liable to retire by rotation.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mr Piyush Shah (DIN: 00199205), retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for reappointment.

The Shareholders have approved the Change of Designation of Mrs Sangeeta K Shah (DIN:05322039) from Whole Time Director to Managing Director and Mr Ketan M Shah from Chairman & Managing Director (DIN:00312343) to Chairman & Whole Time Director of the Company through Postal Ballot Dated 24th March,2018 during the year.

PERFORMANCE EVALUATION

Meeting the requirements of the statute and considering Board Performance Evaluation as an important step for a Board to transit to a higher level of performance, the Nomination and Remuneration Committee has laid down a comprehensive framework for carrying out the evaluations prescribed in the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The framework was developed to give all Board members an opportunity to evaluate and discuss the Boards performance openly from multiple perspectives and enhance governance practices within the Board. The framework describes the evaluation coverage and the process thereof.

A structured questionnaire each for evaluation was prepared and a separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board.

The performance evaluation of the Independent Directors was also carried by the entire Board. The performance evaluation of the Chairman, Managing Director & Executive Directors was carried out by the independent Directors at its separate meeting held on 10th February, 2018. The Directors expressed their satisfaction with the evaluation process.

FAMILIARISATION PROGRAMME OF INDEPENDENT DIRECTORS

The Company conducts Familiarization Programme for the Independent Directors to provide them an opportunity to familiarize with the Company, its Management and its operations so as to gain a clear understanding of their roles, rights and responsibilities and contribute significantly towards the growth of the Company. The initiatives undertaken by the Company in this respect has been disclosed on the website of the Company and can be accessed through the following link: http://www. simplexcastings.com/investors/notice-announcements/ docs/notices/2017-18/Familirisation-Programme-for- Independent-Director-on-10-02-2018.pdf

NOMINATION AND REMUNERATION POLICY

The remuneration paid to the Directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force). The silent aspects covered in the Nomination and Remuneration Policy have been outlined in the Corporate Governance Report which forms part of this report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required under Section 197 of the Companies Act, 2013 and Rule 5 (1) Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or reenactments) thereof for the time being in force is set out in the Annexure-I to this report.

The Company does not have any employee, whose particulars are required to be given pursuant to the provisions of section 197 of the Companies Act, 2013 read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The statement containing the names of top ten employees in terms of remuneration drawn as required under Section 197(12) of the Act read with Rule 5(2) of the aforementioned Rules are open for inspection at the Registered Office of the Company on all working days (except Saturdays, Sundays and Public holidays) between 11.00 am to 1.00 pm up to the date of AGM.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013 (including any statutory modifications or re-enactments thereof for the time being in force), the Directors of the Company confirm that:

a. in the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable Accounting Standards and Schedule III of the Companies Act, 2013 have been followed and there are no material departures from the same;

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 as at 31st March, 2018 and of the profit and loss of the Company for the financial year ended 31st March, 2018;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the Annual Accounts have been prepared on a going concern basis;

e. proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and operating effectively; and

f. proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems are adequate and operating effectively.

BOARD AND COMMITTEES

The details of the meetings of the Board of Directors and its Committees, convened during the financial Year 2017-18 are given in the Corporate Governance Report which forms a part of Annual Report.

STATUTORY AUDITORS AND THEIR REPORT

M/s O P Singhania & Co, Chartered Accountants (Firm Registration No. 002172C), Statutory Auditors of the Company were appointed until the conclusion of the 38th Annual General Meeting of the Company.

The Board of Directors in its meeting held on 11th August, 2018 have approved the reappointment of M/s O P Singhania & Co, Chartered Accountants (Firm Registration No. 002172C), as the Statutory Auditors of the Company for a period of 5 years.

They have confirmed their eligibility to the effect that their appointment, if made, would be within the prescribed limit under the Act and that they are not disqualified for appointment.

A resolution proposing reappointment of M/s O P Singhania & Co Chartered Accountants as Statutory Auditors of the Company pursuant to Section 139 of the Companies Act, 2013, forms part of the Notice for the ensuing AGM.

Explanations response to Point 2(e) of Independent Auditors Report:

Point 2(e) -On the basis of Written Representations received from the Directors as on 31st March 2018 taken on record by the Board of Directors, we report that one of the Director is disqualified as on 31st March ,2018 from being appointed as a Director in terms of section 164(2) of the Act.

Management Reply - Mr Goverdhana Gopalswamy (DIN:02101651), Director of the Company has filed the petition in Bombay High Court against his disqualification.

Observations other than above made by the Statutory Auditors in their report for the Financial year ended 31st March, 2018 read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board under section 134(3) of the Companies Act, 2013.

COST AUDITOR AND THEIR REPORT

Pursuant to Section 148(2) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, your Company is required to get its cost accounting records audited by a Cost Auditor.

Accordingly, the Board, at its meeting held on May 26, 2018, has on the recommendation of the Audit Committee, re-appointed M/s Arindam & Associates, Cost Accountants to conduct the audit of the cost accounting records of the Company for F. Y 2018-19 on a remuneration of Rs 2.00 lacs plus taxes as applicable and out-of-pocket expenses. The remuneration is subject to the ratification of the Members in terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and is accordingly placed for your ratification. The due date for filing the Cost Audit Report of the Company for the Financial Year ended March 31, 2017 was September 30, 2017 and the Cost Audit Report was filed in XBRL mode on August 29, 2017.

SECRETARIAL AUDITOR AND THEIR REPORT

In terms of Section 204 of the Companies Act, 2013, the Board of Directors of the Company at their meeting held on 26th May, 2018 has reappointed Satish Batra & Associates, Practicing Company Secretary (Certificate of Practice No. 2875), as the Secretarial Auditor to conduct an audit of the secretarial records, for the financial year 2018-19.

Your Company has received consent from Satish Batra & Associates to act as the auditor for conducting audit of the Secretarial records for the financial year ending 31st March, 2019.

The Secretarial Audit Report for the financial year ended 31st March, 2018 is annexed herewith as Annexure II to this report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

INTERNAL AUDITORS

M/s. Agrawal Jain & Co, Chartered Accountants were reappointed as Internal Auditors for the FY 2018-19.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

The Statutory Auditors, Cost Auditor or Secretarial Auditor of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made thereunder.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return as on 31st March, 2018 in Form MGT - 9 in accordance with Section 92(3) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, is set out herewith as Annexure III to this report.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into by the Company during the year under review were on arms length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with promoters, directors, key managerial personnel or related parties which may have a potential conflict with the interest of the Company at large.

Members may refer to Note No 36 to the financial statement which sets out related party disclosures pursuant to Ind AS.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the Financial Year ended 31st March, 2018, no Loan under section 186 of the Companies Act, 2013 was made by the Company. Details of Loan, Guarantees and Investments are given in the notes to the financial statements.

SHARE CAPITAL

Your Company has increased its authorised share capital from Rs 7.50 Cr to Rs 10.00 Cr.

During the year the Company has received 7.97 Crores (25% of the issue price) from the issue and allotment of 19,93,700 warrants (11,37,900 Warrants Dated 28/03/2018, 7,01,500 Warrants Dated 31/03/2018 and 1,54,300 Warrants Dated 03/04/2018 ) of 10/- each at a premium of 150/- to non promoters on preferential basis , in pursuance of the approval of the shareholder accorded through Postal Ballot on 24th March, 2018 from the objects of the issue stated in the explanatory statement to the Notice of Postal Ballot dated 15th February, 2018. The proceeds of convertible warrants have been utilized for procurement of raw material and components along with routine expenses of working capital requirement of the company.

Presently the Companys shares is listed on Bombay Stock Exchange. The Delisting application is pending before delisting Committee at Delhi Stock Exchange. The Company is also listed on Calcutta Stock Exchange but trading is suspended.

Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise; and does not have any ESOP Scheme for its employees/Directors.

RISK MANAGEMENT

The Company has in place comprehensive risk assessment and minimization procedures, which are reviewed by the Board periodically .The Company has been addressing various risks impacting the Company.

DISCLOSURE ON AUDIT COMMITTEE

The Audit Committee as on 31st March, 2018 comprises of the following Independent Directors:

Mr Kisan Ratilal Choksey (Chairman), Ms Ushma Nitin Khabaria, Mr Rajendra Amratlal Shah and Mr Champak Kalyanji Dedhia as Members.

The Board has accepted all recommendations made by the Audit Committee during the year.

IMPLEMENTATION OF SAP

The Company has implemented SAP a leading ERP solution with effect from 1st April , 2018 by switching over from existing ERP. The implementation of SAP shall integrate all the business process across the organization. The new Regime of SAP shall Facilitate by transforming the work culture thereby increase transparency & structured information system. The SAP implementation is under stabilization process & shall soon get established across all the activities. After full stabilization of the same it will enhance the productivity & improve efficiency of the organization in the entire gamut of activities.

VIGIL MECHANISM

A Vigil Mechanism Policy for Directors and employees of the Company is constituted, to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimization on rising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any, financial statements and reports, etc.

All employees of the Company have access to the Chairman of the Audit Committee in case they want to report any concern. The Policy on Vigil Mechanism is available on your Company website.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The brief outline of the Corporate Social Responsibility (CSR) Policy of the company and the initiatives undertaken by the company on CSR activities during the year are set out in Annexure of this Report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014. (Annexure-IV).

The Policy is available on the website of the Company i.e www.simplexcastings.com.

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

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given pursuant to Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure - V to this report.

INTERNAL FINANCIAL CONTROL

Internal Financial Controls are an integrated part of the risk management process, addressing financial and financial reporting risks. The internal financial controls have been documented, digitized and embedded in the business processes.

Assurance on the effectiveness of internal financial controls is obtained through management reviews, control selfassessment, continuous monitoring by functional experts as well as testing of the internal financial control systems by the internal auditors during the course of their audits. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its operation in future.

TRANSFER OF UNPAID OR UNCLAIMED DIVIDEND AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND :

During the year, dividend amounting to Rs 3.99 lacs that had not been claimed by the shareholders for the year ended 31st March, 2010, was transferred to the credit of Investor Education and Protection Fund as required under Act. As on 31st March, 2018, dividend amounting to Rs 14.46 lacs has not been claimed by shareholders of the Company. Shareholders are required to lodge their claims with the Registrar, Link Intime India Pvt Ltd., for unclaimed

dividend. Pursuant to the provisions of Investor Education and Protection Fund (Uploading of Information regarding unpaid and unclaimed amounts lying with Companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company on 14th September , 2017 (date of the last Annual General Meeting) on the website of the Company, www. simplexcastings.com

The same is also available on the website of the Ministry of Corporate Affairs, www.mca.gov.in.

HUMAN RESOURCE AND INDUSTRIAL RELATIONS

The Company takes pride in the commitment, competence and dedication of its employees in all areas of the business. The Company has a structured induction process at all locations and management development programs to upgrade skills of managers. Objective appraisal systems based on key result areas (KRAs) are in place for senior management staff.

The Company is committed to nurturing, enhancing and retaining its top talent through superior learning and organizational development. This is a part of our Corporate HR function and is a critical pillar to support the organizations growth and its sustainability in the long run.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

During the year under review, there were no complaint received pursuant to the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENT

The Board of Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. The Board of Directors also wish to place on record its deep sense of appreciation for the committed services by the Companys executives, staff and workers.

For and on behalf of the Board of Directors

Sangeeta K Shah Managing Director DIN:05322039

Ketan M Shah

Chairman

DIN:00312343

Place : Mumbai Date:11.08.2018