simplex infrastructures ltd share price Directors report

Dear Members,

The Board of Directors hereby submits the One Hundredth and Fifth Annual Report of your Company ("the Company" or "Simplex") along with Companys Audited Financial Statements for the _nancial year ended 31st March, 2023.

Financial Results

The _nancial performance of the Company for the year ended 31st March, 2023 is summarized below:

Particulars	Standalone		Consolidated
	31st March, 2023	31st March, 2022	31st March, 2023	31st March, 2022
Revenue from Operations	15465	17363	18738	20468
Earning before _nance costs, tax, depreciation and
	621	735	1075	869
amortization (EBITDA)
Less: Finance Costs	8373	7461	8391	7548
Less: Depreciation and amortization	850	1040	857	1047
Share of net pro_t/ (loss) of Associates and Joint Ventures
	-	-	(73)	(288)
accounted for using equity method
Exceptional Item	-	246	-	-
Pro_t/(loss) after exceptional items and before tax	(8602)	(8012)	(8246)	(8014)
Less: income tax expenses
Current Tax	10	18	13	21
Deferred Tax Charge/ (Credit)	(3014)	(2767)	(3013)	(2764)
Excess Current tax provision for earlier years written back
	(536)	-	(536)	-
(net)
Pro_t/ (loss) for the year	(5062)	(5263)	(4710)	(5271)
Attributable to:
Owners of the Company	(5062)	(5263)	(4709)	(5281)
Non-Controlling Interest	-	-	(1)	10
Other Comprehensive Income/(Loss) for the year, net of tax	225	105	220	108
Attributable to:
Owners of the Company	225	105	222	107
Non-Controlling Interest	-	-	(2)	(1)
Total Comprehensive Income/(Loss) for the year	(4837)	(5158)	(4490)	(5163)
Attributable to:
Owners of the Company	(4837)	(5158)	(4487)	(5174)
Non-Controlling Interest	-	-	(3)	11
Pro_t /(loss) for the period	(5062)	(5263)	(4709)	(5281)
Balance at the beginning of the year	(5771)	(445)	(5939)	(595)
Pro_t/(loss) available to owners for appropriation	(10833)	(5708)	(10648)	(5876)
Measurements of post-employment bene_t obligations	(65)	(63)	(65)	(63)
Balance carried to Balance Sheet	(10898)	(5771)	(10713)	(5939)

Review of Operations

During the year under review, on standalone basis, revenue from operations were H15465 mns as against H17363 mns in the previous year. The Company reported loss after exceptional items and before tax of H8602 mns as against H8012 mns in the previous _nancial year and net loss for the year was H5062 mns as against H5263 mns in previous _nancial year. Other Comprehensive Income for the year (net of tax) is H225 mns as against income of H105 mns in the previous year. After considering other comprehensive income, total comprehensive loss stood at H4837 mns as against H5158 mns in the previous year.

On a consolidated basis, the revenue from operations was H18738 mns as against H20468 mns in the previous year. Loss before tax was H8246 mns as compared to H8014 mns in the previous year and loss for the year was H4710 mns as against H5271 mns in the previous year. Other Comprehensive loss for the year (net of tax) is H220 mns as against H108 mns loss in the previous year. After considering Other Comprehensive Income, Total Comprehensive Loss stood at H4490 mns as against H5163 mns in the previous year.

Business Review

During the year under review, the Company bagged new orders amounting to H6761.40 mns in various vertical it operates- maintenance work for Udali to Hatikhali Section- 86.25 Km, Assam for NHAI, civil construction package for reheating furnace project and rail forging plant project, Raigarh, civil & _nishing work for Cluster -G In "Shukhobristi", Newtown, Kolkata, Piling, Civil Structural, underground piping and electrical works at Panipat for Indian Oil Corporation Ltd, construction of rob and its approaches in lieu of level crossing for Govt. of West Bengal, Bhimgarh, to name a few and several other ground engineering and industrial structures project, making the order book to H39176 mns as on 31st March, 2023.

Transfer to General Reserves

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

Dividend

In view of the loss during the year under review, your Directors do not recommend any dividend for the Financial Year 2022-2023.

Material changes and commitments

There are no material changes or commitments a_ecting the _nancial position of the Company which have occurred after March 31, 2023 till the date of this report except as mentioned under Resolution Plan of this report.

Deposits

During the year under review, the Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013. Pursuant to the Ministry of Corporate A_airs (MCA) noti_cation amending the Companies (Acceptance of Deposits) Rules, 2014, the Company _les with the Registrar of Companies (ROC) the requisite returns for outstanding receipt of money/loan by the Company, which is not considered as deposits.

Resolution Plan

The operations of your company have su_ered in last few years mainly due to general economic slowdown as well as actions and inactions by various Government bodies/authorities, including policy paralysis and various other factors beyond control of the Company or its management. The major clients/customers of your Company are government bodies wherein the monies of the company are stuck since long and for which the claims of the Company are pending. The Company is under _nancial stress and defaulted in servicing its payment obligations including towards the banks and _nancial institutions (the "Lenders") who have extended various credit facilities to the Company. The Company could not come out of _nancial stress and the mismatch in the cash _ows was further widened with the non-release of sanctioned working capital credit facilities including Bank Guarantee limits. Due to the mismatch in the cash _ows, the Company has not been able to service its debts or meet the payment obligations to the Lenders. The Company is in need of funds to continue its operations as a going concern. The Lenders are in discussion for implementation of resolution plan for resolution of debt of the Company. If the resolution plan progresses, implementation of the same together with positive future growth outlook and expected realization of various contingent assets in the form of arbitration awards and claims, the management is con_dent of improving the overall _nancials of the Company.

Extract of the Annual Return

In accordance with the Companies Act, 2013, the annual return in the prescribed format is available at website of the Company at www.simplexinfra.com.

Number of meetings of the Board

Seven meetings of the Board were held during the year. The details of the meetings of the Board 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 Corporate Governance Report which forms part of this report.

Directors Responsibility Statement

The _nancial 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 issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy.

Your Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, make the following statements in terms of section 134 (3)(c) & 134 (5) of the Companies Act, 2013: (a) In the preparation of the annual accounts for the _nancial year ended 31st March, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures; (b) that appropriate accounting policies were selected and consistently applied and judgments and estimates were made that are reasonable and prudent so as to give a true and fair view of the state of a_airs of the company at the end of the _nancial year and of the loss of the company for that period; (c) That proper and su_cient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) That the annual _nancial statements have been prepared on a going concern basis; (e) That proper internal _nancial controls were followed by the company and such internal _nancial controls are reviewed by the Management and Independent Internal Auditors and any material weakness noticed during such review, remedial action is taken by the management so that internal control system as also its implementation is adequate and e_ective; and (f) That proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating e_ectively.

Policy on Directors appointment and remuneration and other details

The Companys policy on Directors appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 is hosted on the Companys website at www.simplexinfra.com. The details relating to Nomination and Remuneration Committee 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, 2013 and the Rules made thereunder are given in Annexure ‘1 forming part of this Board Report. Disclosures as contained in Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided at Table 1(a) of the "Annexure-1". 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) Rules, 2014, as amended from time to time, is provided at Table 1 (b) of the Annexure-1 forming part of this Report. In terms of Section 136(1) of the Act and the rules made thereunder, the 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 Company Secretary.

The employees are neither relatives of any Directors of the Company, nor hold 2% or more of the paid-up equity share capital of the Company as per Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Any Shareholder interested in obtaining the details of employees posted outside India and in receipt of a remuneration of H60 Lakhs per _nancial year or H5 lakhs per 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 infrastructural facilities as speci_ed in Schedule VI of the Companies Act, 2013. In accordance with the exemption provided by Section 186 (11) to the companies engaged in the business of providing infrastructural facilities, the provisions of Section 186 (2 ) to (13) of the Act, in respect of providing loan, guarantee or security to any other body corporate/ person do not apply to the Company.

Related Party Transactions

All the related party transactions were in the ordinary course of business or at arms length. The Company periodically reviews and monitors related party transactions. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis.There are no materially signi_cant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential con_ict with the interest of the Company at large. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable. However, the details of the related party transactions are set out in Note 30 to the standalone _nancial statements forming part of this Annual Report.

The Company has a Policy on materiality of and dealing with Related Party Transactions, as 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 frame, implement and monitor the risk management plan for the Company. The Company also has in place a Risk Management Policy to identify and assessthekeyriskareas.TheMembersoftheRiskManagement Committee monitors and reviews the implementation of various aspects of the Risk management policy. Major risks identi_ed by the Company are systematically addressed through mitigating actions on a continuous basis. At present no particular risk whose adverse impact may threaten the existence of the Company is visualized.

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

Corporate Social Responsibility (CSR)

The Company has constituted a Corporate Social Responsibility Committee comprising Mr. Rajiv Mundhra, Chairman of the Committee, Mr. S. Dutta, Whole-time Director and Mr. S.K. Damani, Independent Director of the Company and has framed a corporate social responsibility policy which is available at the website of the Company at www.simplexinfra.com. Mr. S.K.Damani resigned from the directorship of the Company from the close of business hours of 25th April, 2023 and accordingly ceased to be a Member of the Committee. Mr. P.K.Chakravarty was appointed as

Member of the Committee w.e.f. 25th April, 2023 in place of Mr. S.K.Damani.

The Company endeavors to ful_ll its CSR responsibilities in its identi_ed segments- education, healthcare, welfare of poor and girl child, preservation of art and heritage. Construction industry as a whole is going through a critical time and is facing strong challenges in terms of liquidity. Since the Company is also a construction industry, therefore it is not an exception and is also facing the same critical situation as felt by others in the sector. Moreover, the Company has negative average net pro_t of three immediately preceding _nancial year, therefore the Company was not required to spend any amount towards corporate social responsibility during the year.

The annual report on CSR containing particulars speci_ed in Companies (Corporate Social Responsibility Policy) Rules, 2014, is set out herewith as "Annexure-2".

Performance evaluation of the Board, its Committees and individual Directors

During the year, formal annual evaluation of the Board, its Committees and individual Directors were carried out as per the framework laid down by the Board for formal annual evaluation of the performance of the Board, Committees and individual Directors. It includes circulation of questionnaires to all Directors for evaluation of the Board and its Committees, which entails a wide range of parameters facilitating proper evaluation of the Board, its Committees and individual Directors. The response/ feedback/ comment received from each Director is carefully considered by the Board.

A separate meeting of Independent Directors was also held to review the performance of Whole-time Directors, performance of the Board as a whole and performance of the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors.

Performance evaluation of independent directors was done by the entire Board, excluding the independent director being evaluated.

The Board of Directors expressed their satisfaction with the evaluation process and also the performance of Directors, Independent Directors, Chairman and performance of the Board as a whole was found satisfactory.

Subsidiaries, Associates & Joint Ventures

As on 31st March, 2023, your Company has seven Subsidiaries namely (i)Simplex (Middle East) Limited, UAE (ii) Simplex

Infrastructures Libya Joint Venture Co., Libya (iii) Simplex Infra Development Private Limited (iv) Maa Durga Expressways PrivateLimited,(v)JaintiaHighwayPrivateLimited,(vi)Simplex (Bangladesh)Private Limited and (vii) PC Patel Mahalaxmi Simplex Consortium Private Limited, one Associate namely 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 the salient features of the _nancial statement of the Companys subsidiary/ associate/ joint venture companies is provided in the Form AOC-1, attached after the consolidated _nancial statements of the Company. In accordance with Section 136 of the Companies Act, 2013, the audited _nancial statements, including the consolidated _nancial statements and related information of the Company and audited accounts of each of its subsidiaries, are available on our website, www.simplexinfra.com. These documents will also be available for inspection electronically up to the date of AGM. Members seeking to inspect such documents can send an email to secretarial.legal@simplexinfra.com The Company has formulated a policy on identi_cation of material subsidiaries in line with Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same is placed on the Companys website at www.simplexinfra.com. The Company does not have any material subsidiaries as on the date of this report.

Formation/CessationofCompanysSubsidiaries/ Associate/Joint Venture

During the year under review, no company has become or has ceased to be a subsidiary or joint venture of the Company. Two Associates of the Company namely (i) Shree Jagannath Expressways Private Limited and (ii) Raichur Sholapur Transmission Company Private Limited were disposed o_ during the year, the details of which are given hereunder: Shree Jagannath Expressways Private Limited, a Special Purpose Vehicle between Bharat Road Network Limited (40%), Galfar Engineering (26%) and the Company (34%) was sold to Indian Highway Concession Trust, an infrastructure investment trust set up by Caisse de depot et placement du Quebec (CDPQ), a global institutional investor, in June 2022. Raichur Sholapur Transmission Company Private Limited, a Special Purpose Vehicle between Patel Engineering Limited (PEL), BS Limited (BSL) and the Company, each owning 33.33% stake was acquired by IndiGrid, power sector infrastructure investment trust.

Directors

Duringtheyearunderreview,Dr.DinabandhuMukhopadhyay (DIN-09778769) was appointed as an Additional Independent Director of the Company by the Board of Directors with e_ect from 14th November 2022. Based on the recommendations of the Nomination and Remuneration Committee and approval of the shareholders by way of postal ballot on 8th February 2023, he was appointed as an Independent Non-Executive Director of the Company, not liable to retire by rotation, to hold o_ce for a period of _ve consecutive years, commencing from 14th November, 2022 and upto 13th November, 2027.

The tenure of Mr. Dipak Narayan Basu (DIN-00981990), Whole-time Director of the Company expired on 21st November, 2022. Due to his persistent poor health and family commitments, he tendered resignation from the Directorship of the Company w.e.f. 21st November, 2022. The Board records their sincere appreciation for the service rendered by Mr. Basu during his tenure in the Company.

The tenure of Mr. Rajiv Mundhra (DIN-00014237) as a Whole-time Director of the Company ceased on 31st March, 2023. Thereafter, he consented to continue as a Non-Executive Director and Chairman of the Company w.e.f 1st April, 2023. Considering his knowledge of various aspects relating to Companys a_airs and long business experience and leadership, the Board of Directors felt that for smooth and e_cient running of business, the services of Mr. Rajiv Mundhra should be available to the Company. Therefore, his terms and conditions of his continuance in the Board of Directors of the Company as a Non-Executive Director and Chairman of the Company, not liable to retire by rotation, was recommended for Members approval by way of postal ballot, whose results will be declared on 15th June 2023. Mr. Shamik Dasgupta (DIN-01127296) was inducted to the Board of Directors as an Additional Director in the capacity of a Non-Executive Director, liable to retire by rotation, with e_ect from 25th April, 2023. Based on the recommendation of the Nomination and Remuneration Committee, his appointment has been recommended for shareholders approval by way of postal ballot, whose results will be declared on 15th June 2023.

Mr. Sheo Kishan Damani (DIN-00062780), Independent Director of the Company tendered his resignation with e_ect from close of business hours of 25th April, 2023 due to old age and persistent poor health. The Board records their sincere appreciation for the service rendered by Mr. Damani during his tenure in the Company.

The tenure of Mr. Sukumar Dutta (DIN 00062827) as Whole-time Director of the Company is due to expire on 31st August 2023. Mr. Dutta has been on the board for more than 21 years. Based on performance evaluation and the recommendation of the Nomination and Remuneration Committee and subject to the approval of shareholders at the ensuing annual general meeting, the Board recommends appointment of Mr. S. Dutta for a further period of 1 year e_ective from 1st September 2023.

The proposal for re-appointment including remuneration are set out in the notice convening the 105th annual general meeting.

The Company is in default in payment of dues to Banks/ Financial Institutions and Non-convertible debenture holders. In terms of Section 197 of the Companies Act, 2013, the Company has applied for permission to the Lead Banker for payment of remuneration to Mr. S.Dutta, Whole Time Director & CFO. Till the approval is not received from Banks/ Financial Institutions, Debenture holders etc. the remuneration received by him will be held in Trust.

In accordance with the provisions of the Act, Mr. Sukumar Dutta Whole-time Director & CFO retires by rotation and being eligible has o_ered himself for re-appointment at the ensuing annual general meeting. Based on performance evaluation and the recommendation of the Nomination and Remuneration Committee and subject to the approval of shareholders at the ensuing annual general meeting, the Board recommends his re-appointment.

Pursuant to the provisions of Section 149 of the Act and Listing Regulations, Independent Directors of the Company have submitted their declaration that they meet with the criteria of independence as provided in Section 149 (6) of the Act and are not disquali_ed from continuing as Independent Directors of the Company as per the criteria laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.The terms and conditions of appointment of the Independent Directors are in compliance with the provisions of the Companies Act, 2013 and are placed on the website of the Company www.simplexinfra. com.The Company has also disclosed on its website details of the familiarization programs to educate the Independent Directors regarding their roles, rights and responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, etc. All the Directors have submitted the requisite disclosures/ declarations as required under the relevant provisions of the Companies Act, 2013.

Appropriate resolutions seeking your approval and brief resume / details for re-appointment of Directors is furnished in the notice of the ensuing Annual General Meeting.

Key Managerial Personnel

Mr. Rajiv Mundhra ceased to be the Key Managerial Personnel of the Company as his o_ce of Whole-time Director ceased on 31st March, 2023.

Mr. S. Dutta, Whole-time Director & CFO and Mr. B. L. Bajoria, Sr. Vice President & Company Secretary continue to be the Key Managerial Personnel of the Company in terms of the provisions of Section 203 of the Act.

Remuneration and other details of the said Key Managerial Personnel for the _nancial year ended March 31,2023 are mentioned in the Corporate Governance Report under the heading ‘compensation structure in Nomination and Remuneration Policy of the Company, which forms a part of this Report.

Signi_cant and material orders passed by Regulators/Courts/Tribunals

During the year under review, there were no signi_cant or material orders passed by the Regulators/ Courts/Tribunals impacting the going concern status of the Company and its operations in future.

Internal Control Systems and their adequacy

The details in respect of internal control systems and their adequacy are included in the 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 to Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail the mechanism 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 by the Board as and when the complaints are received.

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

Secretarial Standards

The Company has generally complied with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Statutory Auditors

M/s. Chaturvedi & Co., Chartered Accountants (Firm Registration No: 302137E), were appointed as Joint Statutory Auditors for a term of 5 (_ve) consecutive years, at the Annual General Meeting of the Company held on the 30th day of September, 2019 to hold o_ce till the conclusion of the 106th Annual General Meeting, to be held in 2024.

M/s. Binayak Dey & Co., Chartered Accountants (Firm Registration No.328896E) were appointed as Joint Statutory Auditors of the Company for a term of 5 (_ve) years to conduct audit for FY 2022-23 to FY 2026-27 from the conclusion of the Extra Ordinary General Meeting of the Company held on 12th day of May, 2022 till the conclusion of 109th Annual General Meeting of the Company to be held in the year 2027. Therefore, M/s. Chaturvedi & Co. and M/s. Binayak Dey & Co., Chartered Accountants, continue to be the Statutory Auditors of the Company.

During the year under review, no frauds were reported by the Auditors under section 143(12) of the Act.

Boards Explanation on Auditors Quali_cation on Financial Statements

The Board has duly examined the Statutory Auditors Report to the accounts and the Boards clari_cations regarding the quali_ed opinions of the Statutory Auditors on Financial Statements of the Company are given hereunder:

Standalone Financial Statements

I. ‘Basis for Quali_ed Opinion under Independent Auditors Report of M/s. Chaturvedi & Co., on the Audit of the Standalone Financial Statements a) ‘Note 41(a) to the accompanying Standalone Financial Statements regarding uncertainties relating to recoverability of unbilled revenue pending for certi_cation amounting to H2,864 lacs

(PY H3,318 lacs), Note 38 regarding trade receivables and retention monies amounting to H8,858 lacs (PY H8,216 lacs) and H3,009 lacs (PY H2,890 lacs),

respectively, as at March 31, 2023, which represent receivables in respect of completed/ substantially completed/ suspended/terminated projects. As explained to us the Company is at various stages of negotiation/ discussion with the clients in respect of the aforementioned receivables. Considering the contractual tenability, progress of negotiations/ discussions the management is con_dent of recovery of these receivables. However, in the absence of con_rmation or any su_cient appropriate convincing audit evidence in respect of aforesaid balances mentioned above to support the signi_cant judgements and estimates related to underlying assumptions applied by the management, we are unable to comment on recoverability of such balances at this stage.

The Management is of the view that recognition of unbilled revenue is based on Cost to Complete (CTC) estimates as per Percentage of Completion Method (POCM) under Ind AS 115 ‘Revenue from Contracts with Customers. This CTC is regularly reviewed and necessary changes are e_ected by the Management. Certi_cation of unbilled revenue by customers and acceptance of _nal bills by customers often takes signi_cant period of time and varies from project to project. At this stage, based on discussions with concerned customers, the Management believes that unbilled revenue as on 31st March, 2023 will be billed and realized in due course. Further the Management is of the view that Trade receivables from customers in respect of various project sites are outstanding for a long period of time. At this stage, based on discussions and correspondences with customers, the management believes the above balances are good and recoverable. Retention monies due from customers are receivable only after clearance of _nal bill by customers and after expiry of defect liability period after execution of contracts. In the opinion of the management, such retention amounts of certain completed contracts as on 31st March, 2023 are good and recoverable. The matter has been explained in note 38 & 41(a) forming part of the Standalone Financial Statements. b) Note 38 to the accompanying Standalone Financial Statements regarding inventories aggregating H887 lacs (PY H770 lacs) pertaining to certain completed projects in the view of management are good and readily useable. In the absence of any su_cient appropriate convincing audit evidence to support the signi_cant judgements and estimates relating to support the managements view on usability of such items, we are unable to comment whether the aforesaid inventories are usable.

The management is of the view that Inventories as on 31st March, 2023 pertaining to certain completed project sites are readily usable. The matter has been explained in Note 38 forming part of the Standalone Financial Statements. c) Note 39 to the accompanying Standalone Financial Statements regarding loans and advances pertaining to earlier years amounting to H35,063 lacs

(PY H33,478 lacs), as informed to us the company is in active pursuit and con_dent of recovery of these advances. In the absence of con_rmation or any su_cient appropriate convincing audit evidence to support the signi_cant judgements and estimates relating to managements view on the recoverability of such amount, we are unable to comment whether the aforesaid balances are recoverable at this stage.

The Management is of the view that Loans and Advances as on 31st March, 2023, for which the Company is in active pursuit and con_dent of recovery/settlement of such advances within a reasonable period of time. The matter has been explained in Note 39 forming part of the standalone _nancial statements.

The above reasons explains the quali_cations of one of the Joint Auditors, M/s Chaturvedi & Co., Chartered Accountants, on these issues in their audit report on the Companys _nancial statements for the year ended 31st March 2023. Further, the other Joint Auditors M/s Binayak Dey & Co., have made these a part of "Emphasis of Matter " in their report, which have been explained in detail under the paragraph "Emphasis of Matter " under Independent Auditors Report of the Other Joint Auditor, M/s. Chaturvedi & Co.

. "Emphasis of Matter" under Independent Auditors Report of M/s. Chaturvedi & Co., on the Audit of the Standalone Financial Statements a) We refer to Clause (a)(1) of Emphasis of Matter of Independent Auditors Report, where the Auditors have drawn attention to – ‘The accompanying Standalone Financial Statements Note 41(a) regarding uncertainties relating to recoverability of unbilled revenue pending for certi_cation amounting to H38,720 lacs (PY H34,142 lacs), Note 38 regarding trade receivables and retention monies amounting to H5,077 lacs (PY H3,651 lacs) and H262 lacs (PY H261 lacs), respectively, as at March 31, 2023, which represent receivables in respect of completed/ substantially completed/ suspended / terminated projects. As explained to us the Company is at various stages of negotiation/ discussion with the clients in respect of the aforementioned receivables. Considering the contractual tenability, progress of negotiations/ discussions the management is con_dent of recovery of these receivables. The Management is of the view that recognition of unbilled revenue is based on Cost to Complete (CTC) estimates as per Percentage of Completion Method (POCM) under Ind AS 115 ‘Revenue from Contracts with Customers. This CTC is regularly reviewed and necessary changes are e_ected by the Management. Certi_cation of unbilled revenue by customers and acceptance of _nal bills by customers often takes signi_cant period of time and varies from project to project. At this stage, based on discussions with concerned customers, the Management believes that unbilled revenue as on 31st March, 2023 will be billed and realised in due course. The matter has been explained in note 41(a) forming part of the Standalone Financial Statements. b) We refer to Clause (a)(2) of Emphasis of Matter of Independent Auditors Report, where the Auditors have drawn attention to – ‘Note 36 to the accompanying Standalone Financial Statements, regarding default in payment of revolving facility like Cash Credit, WCDL availed from various Banks total amount outstanding to H3,85,175 Lacs( PY H2,75,193 lacs) and also default in repayment of principal and interest aggregating to H97,846 Lacs (PY H82,938 Lacs) due in case of term loan and payment to debenture holders on the non-convertible debentures. Certain closing balances have not been con_rmed by the respective banks amounting to H2,52,945 lacs (PY

H141.31 Lacs), the management has recognized interest liabilities on bank balances on a provisional basis as per last sanctioned letters. The Management is of the view that the Company has incurred net loss of H50,624 lakhs for the year ended 31st March, 2023 as also there was default in payment of _nancial debts, to its bankers and others amounting to H4,83,021 lakhs as on 31st March, 2023.The Company is in the process of _nalising a resolution plan with its lenders. The Company is con_dent of improving the credit pro_le including time bound realization of its assets, arbitration claims, etc. which would result in meeting its obligation in due course of time. Accordingly, the Management considers it appropriate to prepare these _nancial results on going concern basis. The matter has been explained in Note 36 forming part of the Standalone Financial statements. c) We refer to Clause (a)(3) of Emphasis of Matter of Independent Auditors Report, where the Auditors have drawn attention to - The Company has recognized net deferred tax assets amounting to H92,085 lacs(PY H61,947 lacs) as at March 31,

2023 which includes deferred tax assets on carried forward unused tax losses, unused tax credit and other taxable temporary di_erences on the basis of expected availability of future taxable pro_t for utilization of such deferred tax assets. The Management is con_dent that the deferred tax assets will be set-o_ against the future foreseeable pro_t by the Company.

The Management is of the view that the Deferred Tax Asset will be adjusted against future projected current tax liability. The Company is con_dent that the Resolution Plan which is under process of _nalization will be approved by the lenders and the said projected pro_t and current tax liability will be adjusted against the Deferred Tax Asset. The matter has been explained in Note 41(b) forming part of the Standalone Financial statements. d) We refer to Clause (b) of Emphasis of Matter of Independent Auditors Report, where the Auditors have drawn attention to - The accompanying Standalone Financial Statements the Company has incurred net loss of H50,624 lacs (PY H52,631 lacs) during the year ended March 31, 2023, as also there is default in payment of _nancial debts, to its bankers and others amounting to H4,83,021 lacs (PY H3,58,131 lacs). As stated in Note 36 to the accompanying statement, these _nancial statements are prepared by the management on going concern basis for the reasons stated therein.

The Management is of the view that the Company has incurred net loss of H50,624 lakhs for the year

ended 31st March, 2023 as also there was default in payment of _nancial debts, to its bankers and others amounting to H4,83,021 lakhs as on 31st March, 2023.The Company is in the process of _nalising a resolution plan with its lenders. The Company is con_dent of improving the credit pro_le including time bound realization of its assets, arbitration claims, etc. which would result in meeting its obligation in due course of time. Accordingly, the Management considers it appropriate to prepare these _nancial results on going concern basis. The matter has been explained in Note 36 forming part of the Standalone Financial statements.

The above reasons also explains the observations of the other Joint Auditors, M/s. Binayak Dey & Co., Chartered Accountants, on these issues in their audit report on the Companys _nancial statements for the year ended 31st March 2023 forming part of "Emphasis of Matter " in their report.

III. Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act") (Annexure ‘B to the Independent Auditors Report of M/s. Chaturvedi & Co.)

Standalone Financial Statements

(i) We refer to Clause (a) of Quali_ed Opinion of Independent Auditors Report - ‘The Companys internal _nancial controls for evaluation of recoverability of old balances of unbilled revenue, loans/advances, trade receivables, retention monies inventories at project sites and claims recoverable were not operating e_ectively as on March 31, 2023 which could potential result in the company not recognizing appropriate provision on the Standalone Financial Statement in respect of assets that are doubtful or recovery/credit impaired/measuring the fair values of those _nancial assets. (ii) We refer to Clause (b) of Quali_ed Opinion of Independent Auditors Report - ‘The Company did not have an appropriate internal control system with respect to compliance with the provisions of section 197 of the Companies Act, 2013 relating to obtaining prior approval from lenders for payment to whole time director & chief _nancial o_cer. The application for approval of the Payment of remuneration to WTD & CFO has already been made to the lenders.

All the quali_cations mentioned above have been explained in detail under ‘Basis for Quali_ed Opinion or ‘Emphasis of Matter under Independent Auditors Report on the Audit of the Standalone Financial Statements in the foregoing paragraphs, therefore are self explanatory and do not call for further explanation. The above reasons also explains Emphasis of Matter of the other joint Auditors, M/s Binayak Dey & Co., in their audit report on the Companys Financial Statements for the _nancial year ended 31st March 2023 on these issues.

Consolidated Financial Statements

All the quali_cations on Consolidated Financial Results appearing under clause (a), (b) and (c) under ‘basis for quali_ed opinion and also appearing under clause (a) (1), (a)(2),(a)(3) and (b) of ‘Emphasis of Matter and also quali_cation appearing under clause (a) and (b) under ‘quali_ed opinion on Internal Financial Controls Over Financial Reporting are similar to that of Standalone Financial Results and have been explained in detail in the foregoing paragraph, details of which is appearing under ‘Standalone Financial Statements.

The Board is of the opinion that the matter being elucidated in detail above as appearing under ‘Standalone Financial Statements and also at Note no. 35, 37, 38, 40(a) and 40(b) of the consolidated _nancial statements is self-explanatory and do not call for further explanation.

All the observations appearing under "Emphasis of Matter" on Consolidated Financial Statements in the Audit Report of the other Joint Auditor, M/s Binayak Dey & Co., and also quali_cation appearing under‘ quali_ed opinion‘ on Internal Financial Controls over Financial Reporting are similar to that of Standalone Financial Statements and have been explained in detail in the foregoing paragraphs, therefore is self explanatory and do not call for further explanation.

Secretarial Auditor and Secretarial Audit Report

Secretarial Audit for the FY 2022-2023 was conducted by Mr. Atul Kumar Labh, Practising Company Secretary (Membership No. FCS-4848 and C.P. No 3238) in accordance with the provisions of Section 204 of the Act. The Secretarial Auditors Report is annexed herewith as "Annexure-3".

The Board is of the opinion that the matter is self-explanatory and does not call for further explanation.

Pursuant to the SEBI circular no. CIR/CFD/ CMD1/27/2019 dated 8th February 2019, the Company has obtained an annual secretarial compliance report from Mr. Atul Kumar Labh, Practising Company Secretary (Membership No.FCS-4848 and C. P. No. 3238).

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 has appointed M/s Mukesh Kumar & Associates, Cost Accountants (Firm Registration No:00140) to conduct the audit of cost records of the Company for the _nancial year 2022-2023 As required under the Act, a resolution seeking Members approval for rati_cation of remuneration of the Cost Auditors forms part of the notice convening the Annual General meeting.

Consolidated Financial Statement

Your Company has prepared Consolidated Financial Statements in accordance with Section 129 (3) of the Act and applicable accounting principles generally accepted in India including the Indian Accounting Standards speci_ed in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. The Consolidated Statements re_ect the results of the Company and that of its Subsidiaries, Joint Ventures and Associates. As required by Regulations 33 of the Listing Regulations with the Stock Exchanges, the Audited Consolidated Financial Statements together with the Auditors Report thereon are annexed and form part of this Annual Report.

The Consolidated Financial Statement comprises of the _nancial statements of the Company and those of its subsidiaries, Joint Ventures and its Associate Companies. Further, pursuant to the provisions of Section 136 of the Act, the _nancial statements of the Company including the consolidated _nancial statements and separate audited accounts in respect of its subsidiaries are available on the website of the Company www.simplexinfra.com.The _nancial statements of the Subsidiary Companies are kept open for inspection by the Shareholders at the Registered O_ce of the Company and a statement containing the salient features of the Companys _nancial statement of the Companys 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, foreign exchange earnings and outgo as required to be disclosed under Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 are provided in the "Annexure-4" to this Report.

Management Discussion and Analysis

Management Discussion and Analysis for the year under review, as stipulated under Regulation 34 of the Listing Regulations with the Stock Exchange(s) in India is presented in a separate section forming part of the Annual Report.

Corporate Governance Report

A separate report on ‘Corporate Governance including a certi_cate from M/s. Binayak Dey & Co., Chartered Accountants, Joint Statutory Auditors of the Company con_rming compliance of the Regulation 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 H27.8 mns to its Fixed Assets consisting of only tangible assets.

Investor Education and Protection Fund (IEPF)

Pursuant to Provisions of Section 124 of the Companies Act 2013 read with Rule 6 of the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended from time to time, all unpaid or unclaimed dividends, which remains unpaid or unclaimed for a period of seven years are required to be transferred by the Company to the Investor Education and Protection Fund ("IEPF"), established by the Central Government. Further, the Company is also required to transfer all the shares in respect of which dividend has not been paid or claimed for Seven (7) consecutive years or more to the Demat Account created by the IEPF Authority. However, in case if any dividend is paid or claimed for any year during the said period of Seven (7) consecutive years, the shares in respect of which dividend is paid so paid or claimed shall not be transferred to demat account of IEPF. In compliance with the aforesaid provisions the Company has transferred the unclaimed and unpaid dividends and corresponding shares to IEPF. The details of the unclaimed / unpaid dividend during the last seven (7) years and also the details of the unclaimed shares transferred to IEPF are available on the website of the Company at www.simplexinfra.com.

Prevention of Sexual Harassment of Women

The Company has formulated a policy on Prevention of Sexual Harassment of Women at Workplace in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder.

An Internal Complaints Committee (ICC) with requisite number of representatives has been set up to redress complaints relating to sexual harassment, if any, received from women employees.

During the _nancial year ended March 31, 2023, the Committee has not received any complaints pertaining to sexual harassment.

Insolvency and Bankruptcy Code, 2016

No application has been admitted by NCLT or Corporate Insolvency Resolution process (CIRP) proceedings initiated as on 31.03.2023.

Details of di_erence between Valuation Amount on one time Settlement and Valuation while availing loan from Banks and Financial Institutions:

During the year under review, there has been no one time settlement of Loans taken from Banks and _nancial institutions.

Acknowledgment

Your Directors would like to express their sincere appreciation for the co-operation and support received from the Financial Institutions, Banks, Customers, Vendors, Central and State Government Authorities, Regulatory Authorities, Stock Exchanges and the Companys all valued stakeholders. Your Directors also take this opportunity to place on record their gratitude for the e_orts and continuous hard work of all the employees.