simplex projects ltd share price Directors report

Dear Members,

It is our pleasure to present the 30th Annual Report of your Company together with the Audited Financial Statements for the financial year ended 31st March, 2020.

1. FINANCIAL RESULTS

The performance of the Company for the financial year ended 31st March, 2020, compared with the previous financial year, is summarized below: (Rs. in lacs)

	Year ended 31st March, 2020	Year ended 31st March, 2019
Total Income	17,913.32	25,137.30
Less: Expenses	17,907.26	25,127.34
Profit / (Loss) before exceptional and extra-ordinary items	6.06	9.96
Exceptional Items	0	0
Profit before extra-ordinary items & tax	6.06	9.96
Less: Provisions for Taxation	(82.36)	(187.44)
Profit After Tax	88.42	197.40
Add: Balance brought forward from last year	(3,684.67)	(3,850.31)
Profit Available For Appropriation	85	166
Less: Proposed Dividend (including tax on dividend)	NIL	NIL
Tax thereon	NIL	NIL
Transfer to General Reserve	NIL	NIL
Balance Profit after appropriation	(3,599.54)	(3,684.67)

2. OPERATIONAL PERFORMANCE :

On Consolidated basis, for the financial year ended March 31, 2020, your Company has achieved a Gross Turnover of Rs.17,657.61 Lakhs as against Rs. 24,871.95 Lakhs for the previous period.

On Standalone basis, your Company has achieved a Gross Turnover of Rs.17,657.61 Lakhs for the financial year ended March 31, 2020 as against (Rs. 24,680.40 Lakhs in financial year 2019-20). The company has incurred a profit of Rs. 88.42 Lakhs (after interest and depreciation charges) as against a profit of Rs. 197.40 Lakhs for the previous year.

Due to competitive pressure Infrastructure development in India has been going through a very difficult phase over the last few years, affecting the overall performance. Consequently players in the construction space, especially those in business of building large infrastructure for the state and central governments, have had to face severe financial, operational and regulatory challenges, such as very tight liquidity conditions, serious stress on cash flows, as well as other sundry issues.

The operations of the companys branch at Libya, was stopped due to prevailing political situation. However, in view of the prolonged uncertainty of resumption, the company has initiated international Arbitration. The overseas order for construction work at Kuwait is nearing completion.

Our focus area continues to be the execution of civil engineering projects with specialization in piling, building, bridge and flyovers. Further your Company had been successful in bagging various contracts for execution of Infrastructure Projects. The Company expects substantial improvements in the order book position.

2. COVID 19 IMPACT ON BUSINESS OPERATIONS

The World Health Organisation has declared COVID-19 a pandemic. The outbreak which has infected millions number of people globally has had an unprecedented impact on people and economies worldwide. In compliance with the directives of the Government of India / State Governments, the Company had during the lockdown period, suspended all its project site operations across India, except where specific permission was granted by the State Governments to resume operations.

On account of lockdown declared by Central Government and State Government on 23rd March, 2020 due to Covid-19 the Company suspended all its operations. The operations at our working sites and offices gradually resumed from May, 2020 with limited man power which has an adverse impact on the normal business operations of the company for the six months ended 30th September, 2020. The company has taken various cost cutting measures and also made assessment of carrying value of its Assets.

The Company has been taking necessary precautionary measures at all its project site operations to contain the spread of COVID-19 as advised by the Government and its Clients, from time to time. The Company has also followed Work from Home policy for its employees and continues to follow the Government guidelines pertaining to re-opening of offices. At this stage, the Company is unable to ascertain the financial impact on the business of the Company.

At the outset let us all remind ourselves that the relaxation of lockdown is for getting on with our lives and businesses but we need to take the safety norms more seriously with the number of Covid-19 cases rising exponentially in our country. Let us all stay safe and take a pledge that we will do our best to break the Covid-19 transmission chain. At our corporate office, regional offices and construction sites we have taken all necessary precautions to make our people and contract workers safe.

3. DIVIDEND

With a view to conserve the resources for the future development of the Company the Board of Directors of the Company did not recommend any dividend during the year.

4. RESERVES

There is no amount available for transfer to Reserves for the year ended March 31, 2020.

5. SUBSIDIARY, ASSOCIATES & JOINT VENTURES

As on 31st March, 2020, Your Company has two Associates namely, (i) Simpark Infrastructure Pvt Ltd. (ii) Simplex Projects Road & Highway Construction Pvt Ltd .

During the period under review, Simplex Agri Infra Services Private limited ceased to be subsidiary w.e.f.14.01.2020.

The Consolidated Financial Statements comprises the financial statements of the Company and its subsidiary, Joint Ventures and its Associate Companies. Pursuant to provisions of section 129(3) of the Act, a statement containing salient features of the financial statements of the Companys associates in Form AOC-1 is appended to this Report as Annexure I.

6. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(3)(c) read with Section 134(5) of the Act with respect to Directors Responsibility Statement, the Directors hereby confirm that:-a) In the preparation of the annual accounts for the financial year ended March 31, 2020, the applicable accounting standards 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 March 31, 2020 and of the profit and loss of the Company for the year ended on that date; c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) The Directors have prepared the annual accounts on a going concern basis; e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Based on the framework of Internal Financial Controls and compliance systems established by the Company, work performed by the Internal, Statutory and Secretarial Auditors and the reviews performed by management and the audit committee of the Company, the board is of the opinion that the Internal Financial Controls of the Company were adequate and effective during the financial year 2019-20.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of your Company consists of Four directors as on 31st March, 2020, with an optimum mix of Executive and Non-executive Directors. Details of the composition of the Board have been disclosed in details in the Corporate Governance Report, which forms an integral part of this report.

In pursuance of Section 152 of the Companies Act, 2013 and the Rules framed there under, Mr. Sudarshan Das Mundhra (DIN-00013158),Executive-Managing Director would liable to retire by rotation, at the ensuing Annual General Meeting and being eligible have offered himself for reappointment.

During the period under review Mrs. Sagarika Ghosh Chakraborty (DIN:08719309), joined the board on 12.03.2020 as an Independent Director during his tenure as Director of the Company.

All the directors of the Company, including the Independent Directors, have disclosed their concern and interest in other companies, bodies corporate, firms, and other association of individuals, including the shareholding, in Form MBP-1. Further, all the Independent Directors have confirmed that they meet the criteria of independence, as laid down under Section 149(6) of the Act, read with the Regulation 16(1) (b) of the SEBI Listing Regulations.

Pursuant to Listing Regulations, your Company had arranged a familiarization program for the Independent Directors of your Company on 16th March, 2020. The detail of the familiarization program is available on the website of the Company at http:// www.simplexprojects.com/form_doc/1584600696.pdf

8. BOARD EVALUATION

The Nomination & Remuneration Committee of the Company has framed a Policy on evaluation of the Board, evaluation of Board Committees, their functioning and evaluation of individual Director. The Company believes that it is the collective effectiveness of the

Board and the senior management that determines the Company performance.

The Board of Directors had carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by SEBI Listing Regulations. The performance of the Board was evaluated after seeking inputs from all the directors and the senior management of the Company, on the parameters derived from Boards core role of trusteeship to protect and enhance shareholder value as well as fulfill expectations of other stakeholders through strategic supervision. Board performance is assessed against the role and responsibilities of the Board as provided in the Act and the SEBI Listing Regulations.

The performance of the various committees of the Board was evaluated after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, flow of information, etc. Reports on functioning of Committees were placed by the respective Committee before the Board.

The Board as well as the Nomination and Remuneration Committee of the Company reviewed the performance of the individual directors on the basis of the role played by each Director as a member of the Board, contribution to the Company, relationship with the stakeholders, peer evaluation, etc. In addition, the Chairman and Managing Director was also evaluated on the key aspects of his role.

Pursuant to Clause VII of the Schedule IV to the Act, in a separate meeting, the Independent Directors of the Company evaluated the performance of non-independent directors, performance of the board as a whole and performance of the Chairman, taking into account the views of the Non-independent Directors and the senior management. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees and individual directors was also discussed. Performance evaluation of Independent Directors was done by the entire board, excluding the director being evaluated.

During the year a meeting of the Independent Directors was held on 30th March, 2020 The Independent Directors, inter-alia, reviewed the performance of non-independent directors, Chairman of the Company and the Board as a whole. The meeting was attended by all independent directors.

However, Mr. Bhabya Nath Thakur, Independent Director has done performance evaluation of non-independent directors, The Chairman of the Company and the Board as a whole for the financial year 2019-20. He expressed satisfaction with the quality, quantity and timeliness of flow of information between the Companys management and the Board.

9. MEETINGS OF THE BOARD

The Board of Directors held 19 (Nineteen) meetings during the financial year 2019-20, in accordance with the provisions of the Act and the rules made there under. The details of the Board meetings and the attendance of Directors are provided in the Corporate Governance Report, which forms a part of this report. The intervening gap between the Meetings was within the stipulated period prescribed under the Act and the principles & guidelines prescribed by the Secretarial Standard-1, issued by The Institute of Company Secretaries of India, have also been followed by the Company.

10. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as laid down under section 149(6) of the Act, and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended).

11. AUDIT COMMITTEE

Pursuant to Section 177 of the Act, 2013 and the SEBI Listing Regulations, the Company has in place Audit Committee which acts in accordance with the terms of reference specified in the Act and the details of composition, terms of reference and number of meetings held for the Committee is provided in the Corporate Governance Report, which forms part of this report. The Board has accepted all the recommendations made by the Audit Committee during the financial year 2019-20.

12. NOMINATION AND REMUNERATION COMMITTEE

Pursuant to Section 178(1) of the Act, 2013 and SEBI Listing Regulations, the Company has in place Nomination and Remuneration Committee to perform such functions as enumerated in the Act and the SEBI Listing Regulations. The details of composition, terms of reference and number of meetings held for the Committee is provided in the Corporate Governance Report, which forms part of this report.

Your Company has devised Remuneration Policy pursuant to recommendation of Nomination and Remuneration Committee applicable to Directors, Key Managerial Personnel and Senior Management Employees. A detailed report on the same is given in the Corporate Governance Report, which forms an integral part of this report.

13. AUDITORS & AUDIT REPORTS: Statutory Auditors

M/s. H.S. Bhattacharjee & Co., Chartered Accountants were appointed as Statutory Auditors of your Company at the Annual General Meeting held on 25th September, 2017, for a term of five consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting.

In accordance with the Companies Amendment Act, 2017, enforced on 7th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting. Hence, the resolution relating to ratification of Auditors appointment is not included in the Notice of the ensuing Annual General Meeting.

The Report given by the Auditors on the financial statement of the Company is part of this Report. The qualification, reservation, and adverse remark, if any given by the Auditors also forms part of this report.

Management views to audit qualifications 8(a), (b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (l), (m) of the Audit Report. 8(a) & (b). The Libyan project had been stopped since 2011 due to civil unrest in Libya.

8(c) The audit report of Kuwait branch is under process. 8(d) Provision for Interest amounting to Rs. 9201.96 Lakhs, has not been made as all the stated bank account are classified as NPA since long, as stated by the Auditor s in the Financial Statement.

8(e) The Investment made earlier in Simplex - Netherlands (JV) Rs. 542.94 Lakhs was only for the purpose of Libiyan Project procurement which is under Arbitration proceedings and the Management is confident about the recovery / settlement of the issue.

8(f) There are advances to suppliers, sub-contractors & staffs related to certain projects amounting to Rs.

4672.62 Lakhs on which the company is in active pursuit and is confident of recovery / settlement of these advances within a reasonable period of time and the amount of Rs. 924.67 Lakhs under the head of advance against project is fully recoverable as it is given to the subsidiaries.

8(g) Materials lying outside amounting to Rs. 1894 Lakhs as on 31st March, 2020. The work is put on hold due to Covid 19 panedemic.

8(h) Site Working Progress amounting to Rs. 6095.76 Lakhs and uncertified sales amounting to Rs. 1908.78 Lakhs has been lying as such since long, due to some dispute arise with the customer for some of the projects which are under regular follow up by the management and will be resolved shortly.

8(i) Arbitration proceedings are on with respect to certain trade receivables due from customers which are under legal proceedings amounting to Rs. 9746,90 Lakh & Work in Progress 4587.87 Lakh as on 31st March, 2020. the company considers the above amount as good and recoverable based on favourable progress of the proceedings.

8(j) The audit report of PF Trust is under process. 8(k) The substantial debtor of the Company constitutes Government departments, undertakings and central or state Government agencies, wherein no system for confirmation of payables or deposits prevails in respect of construction contracts. The trade receiveables, EMDs and trade payables are true and fair as per the record of the Company and all requisite documents were furnished. The Company is in the process of obtaining confirmation from the creditors.

8(l) The Company is obliged to submit and/or publish the financial results for the Quarterely /Annual Audited for the financial year ended on 31st March, 2020. 8(m) The matter is under subjudice.

Cost Auditors

In compliance with the provisions of Section 148 of the Companies Act, 2013, the Board of Directors of the Company at its meeting held on August 5, 2019 had appointed M/s. S. Chhaparia & Associates, Cost Accountants, Kolkata (Firm Registration No. 101591) as the Cost Auditors of the Company for the financial year 2019-20 and their remuneration has been approved at the previous Annual General Meeting. M/s. S. Chhaparia & Associates, have been reappointed as cost auditors for the financial year 2019-20 as required under the Companies Act 2013 and the remuneration payable to the cost auditors is required to be placed before the members in the ensuing annual general meeting (AGM) for their ratification. Accordingly, a resolution seeking members ratification for the remuneration payable to them is included in the notice convening the AGM. The Board recommends the same for approval by members at the ensuing AGM.

Secretarial Auditor

Pursuant to Section 204 of the Companies Act 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company had appointed Mr. Asit Kumar Labh, Practising Company Secretary of M/s. A. K. Labh & Co., Company Secretaries, Kolkata as its secretarial auditor to undertake the secretarial audit for the financial year 2019-20. The Secretarial Auditor Report for the financial year 2019-20 in the specified form MR-3 is appended to this Report and the matter on which the emphasis has been laid down in the Report has been duly taken care of.

14. LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees and investments covered under the provisions of Section 186 of the Act have been disclosed in the notes to the Financial Statements.

15. RELATED PARTY TRANSACTIONS

None of the transactions with the Related Parties fall under the ambit of Section 188(1) of the Act since all the agreement and transactions were in the ordinary course of business and on an arms length basis. None of the transactions could be considered as material in accordance with the policy of your Company on Materiality of Related Party Transactions, which is available on the Companys website. Further, none of the transactions with related parties required approval of the shareholders as the same were within the prescribed limits, under Section 188(1) of the Act and the Rules framed there under, as amended from time to time.

Information on transactions with related parties pursuant to section 134(3) (h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure II in Form AOC-2 and the same forms part of this report.

16. DEPOSITS

The Company, during the year under review, has not accepted any deposit from public and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

17. CHANGES IN THE SHARE CAPITAL OF THE COMPANY

During the financial year 2019-20, the Company has not issued any Equity Shares. Accordingly, the details of Shares issued with Differential Voting Rights, Issue of Sweat Equity Shares and Issue of Employee Stock Option Scheme are not applicable on your Company.

18. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Company has adopted accounting policies, which are in line with the Accounting Standards and the Companies Act, 2013.

19. MATERIAL CHANGES & COMMITMENTS

Except as disclosed elsewhere in this report, there have been no material changes or commitments which could affect the financial position of your Company, between the end of Financial Year 2019-20 and the date of this report.

20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY

THE REGULATORS/COURTS.

There are no significant material orders passed by any Regulator / Court which would impact the going concern status of your Company and its future operations.

21. ISSUE OF EMPLOYEE STOCK OPTION

Your Company has not provided any Employee Stock Option for the financial year 2019-20.

22. CORPORATE GOVERNANCE

Pursuant to the provisions of Chapter IV read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance has been incorporated in the Annual Report for the information of the shareholders. A certificate received from Mr. A K Labh, Practising Company Secretary (FCS-4848/ CP-3238) regarding compliance with the conditions of Corporate Governance as stipulated under the said Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 also forms part of this Annual Report.

23. HUMAN RESOURCE

Your Company treats its Human Resource as one of its most important assets. It has always provided a congenial atmosphere for work to all its employees that are free from discrimination and harassment. Your Company has zero tolerance towards sexual harassment at the workplace. To strengthen the security against sexual harassment, the Company has adopted Anti-Sexual Harassment Policy and also constituted an Internal Complaints Committee (ICC). The said policy is available at http://www.simplexprojects.com// form_doc/1529389295.pdf. No complaint has been received by the Internal Complaints Committee of the Company during the financial year 2019-20.

24. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Government of India under Section 118(10) of the Companies Act, 2013.

25. PARTICULARS OF EMPLOYEES AND RELATED

DISCLOSURES

The disclosure pertaining to remuneration and other details as required under the provisions of section 197(12) of the Companies Act, 2013 read with Rules 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 as amended from time to time forms part of the Directors Report as Annexure- III.

26. WHISTLE BLOWER POLICY/VIGIL MECHANISM :

In terms of Section 177(9) & (10) of the Companies Act, 2013 and the Listing Regulations, The Company has framed Whistle Blower Policy to establish a Vigil Mechanism for Directors and employees to report genuine concerns about unethical behavior, fraud or violation of the Company policies including Code of Conduct or complaints regarding accounting, auditing, internal controls without fear of reprisal. The Whistle Blower Policy is available at http:// www.simplexprojects.com//form_doc/1402298207.pdf

27. MANAGEMENT DISCUSSION AND ANALYSIS

In terms of the provisions of Regulation 34(2) of the SEBI Listing Regulations, the Management Discussion and Analysis for the year ended 31st March, 2020 is attached and forms an integral part of this report.

28. RISK MANAGEMENT

The Company is exposed to uncertainties, owing to the sectors in which it operates. These uncertainties create new business opportunities with inherent risks. The Company has been proactive in adopting new and effective tools to protect the interests of its stakeholders. The Companys Risk Management processes focus on ensuring that the risks are identified on a timely basis and reasonably addressed.

The Directors of your Company has formed a Risk Management Committee and also adopted a policy on the same which enables the Company to proactively manage uncertainties from changes in the internal and external environment and also capitalize on the opportunities. The Audit Committee has additional oversight in the area of financial risk and controls. The Risk management Policy of the Company is available on the website of the Company at http:// www.simplexprojects.com//form_doc/1433929235.pdf.

29. EXTRACT OF ANNUAL RETURN:

As required under Section 92(3) of the Act, the extract of annual return in MGT 9 is attached as a part of this Report as Annexure IV.

30. CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

A. CONSERVATION OF ENERGY : a) Energy Conservation measures taken:

All efforts are made to conserve and optimize use of energy, continuous monitoring, and improvement in maintenance and distribution systems and through improved operational techniques. Energy conservation continues to receive priority attention at all levels. Company is continuing with energy saving measures initiated earlier like usage of more sophisticated Machinery which can do more work in lesser time and thereby reducing the requirement of equipment that programmes to maximize saving in two specific areas: i) Electric Energy ii) Fuel oil consumption In this industry 99% equipments are powered by either electrical motor or by fuel oil powered engines. The scope of energy efficiency in our industry will be energy conservation through well planned actions such as quality preventive maintenance, machinery up-gradation, modernization and introduction of sophisticated control system. Fuel oil consumption has been reduced by implementing vigorous preventive maintenance measures and introducing new fuel efficient engines coupled with newer machinery and reducing idle running of equipments. b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy:

Continuous additional investments are made in phases to replace old machinery with newer more sophisticated and more fuel efficient ones. The replacement theory is applied in repairs and renewals.

Impact of the measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of the production of goods:

Energy conservation measures continue to reduce the production cost. d) Total energy consumption and energy consumption as per unit of production as per prescribed Form A of the annexure in respect of industries specified in Schedule thereto:

Not applicable as the Company is not covered under the list of specified industries.

B. TECHNOLOGY ABSORPTION : i. Research and Development :-

The Company is not having any Research and Development activity at present. ii. Technology Absorption, Adoption and Innovation:-

Efforts, in brief, made towards technology absorption, adoption and innovation:

The Company has absorbed advanced technology and technical know-how in the field of automated car parking systems.

Benefit derived as a result of the above efforts:

The technology implemented in parking projects has been economical and more effective in terms of ground coverage in comparison to conventional method of construction.

Technology imported during the last five years:

a) Technology imported	: Nil
b) Year of import	: Not applicable
c) Has the technology been fully absorbed	: Not applicable

C. FOREIGN EXCHANGE EARNINGS
Particulars	As on 31st March, 2019	As on 31st March, 2020
On Contract Work (Gross Billing at Overseas Branch)	8,300.25	NIL
D. FOREIGN EXCHANGE OUTGO
Particulars	As on 31st March, 2019	As on 31st March, 2020
Travelling	5.47	NIL
Contract Expenses (Overseas Branch)	NIL	NIL

31. CORPORATE SOCIAL RESPONSIBILITY

The provisions of Corporate Social Responsibly are not applicable to your Company.

32. LISTING WITH STOCK EXCHANGES

Your Company is presently listed with BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). The details of trading, listing fees etc. are given in the Corporate Governance Report.

33. ACKNOWLEDGEMENTS

Your Directors like to express their sincere appreciation for the co-operation the Company has received from the Statutory Authorities, Banks, Other Financial Institutions, Stakeholders and Customers during the year under review. Your Directors also wish to thank and place on record their deep appreciation for the committed services by the Companys executives, employees and workers.

For and on behalf of the Board of Directors
	B. K. Mundhra
Place : Kolkata	Chairman
Date : 22.01.2021	(DIN-00013125)