Simplex Projects Ltd Directors Report.
It is our pleasure to present the 27th Annual Report of your Company together with the Audited Financial Statements for the financial year ended 31st March, 2017.
1. FINANCIAL RESULTS
The performance of the Company for the financial year ended 31st March, 2017, compared with the previous financial year, is summarized below: (Rs. in lacs)
|Year ended||Year ended|
|31st March, 2017||31st March, 2016|
|Profit / (Loss) before exceptional and extra-ordinary items||32.23||(8,531.38)|
|Profit before extra-ordinary items & tax||32.23||(8,751.88)|
|Less: Provisions for Taxation||(241.42)||(218.37)|
|Profit After Tax||273.65||(8,533.51)|
|Add: Balance brought forward from last year||(4,107.72)||4,425.79|
|Profit Available For Appropriation||3,834.07||(4,107.72)|
|Less: Proposed Dividend (including tax on dividend)||NIL||NIL|
|Transfer to General Reserve||NIL||NIL|
|Balance Profit after appropriation||(3,834.07)||(4,107.72)|
2. OPERATIONAL PERFORMANCE :
On Consolidated basis, for the financial year ended March 31, 2017, your Company has achieved a Gross Turnover of Rs 49,996.12 Lacs as against Rs 43,227.12 Lacs for the previous period. The turnover of the Company has thus shown an increment of 15.66%.
On Standalone basis, your Company has achieved a Gross Turnover of Rs 49,718.64 Lacs for the financial year 2016-17 which has shown an increment by 16.52% over last year (Rs 42,671.30 Lacs in financial year 2015-16). The Company has incurred a profit of Rs 273.65 Lacs (after interest and depreciation charges) as against a loss of Rs 8,533.51 Lacs for the previous year, thus showing an increase of Rs 8,807.16 Lacs.
The financial year under review witnessed increase in cost of Subcontracting and Other Site Expenses and also Administrative Expenses resulting in escalation in total cost. Moreover, 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 is proceeding with Arbitration. The overseas order for construction work at Kuwait is going on smoothly.
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 increase in the order book position.
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.
During the year under review, no amount which remained unclaimed and unpaid dividend for a period of seven years was transferred to Investor Education & Protection Fund.
There is no amount available for transfer to Reserves for the year ended March 31, 2017.
5. SUBSIDIARY, ASSOCIATES & JOINT VENTURES
As on 31st March, 2017, Your Company has one Subsidiary, namely Simplex Agri-Infra Services Pvt. Ltd., two Associates namely, (i) Simpark Infrastructure Pvt Ltd. (ii) Simplexprojects Road & Highway Construction Pvt Ltd and two Joint Ventures i.e. (i) Simplex Projects (Netherlands) Cooperative U.A. (ii) Triveni Engicon Pvt Ltd Simplex Projects Limited.
Simplex Agri-Infra Services Pvt. Ltd. which had been awarded contracts by FCI to construct and maintain warehouses at different parts of Jammu & Kashmir and Himachal Pradesh on Build, own and Operate/ Lease basis is running its commercial operation.
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 subsidiaries in Form AOC-1 is appended to this Report as Annexure I. The Consolidated Financial Statements of your Company are prepared in accordance with the Accounting Standard 21, issued by the Institute of Chartered Accountants of India.
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, 2017, the applicable accounting standards read with requirements set out under Schedule III to the Act, 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, 2017 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 FY 2016-17.
7. DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of your Company consists of six directors as on 31st March, 2017, 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.
Mr. Sudarshan Das Mundhra, Whole-time Director of the Company retires by rotation, in terms of Section 152(6) of the Act, read with the Articles of the Company, at the forthcoming Annual General Meeting and being eligible, offers himself for reappointment.
During the year under review Mr. Pradeep Kumar Mishra, and Mr. Abirlal Das Gupta resigned from the post of Chief Financial Officer and Company Secretary as on 13th November, 2016 and 17th March, 2017 respectively.
As on the date of this report Mr. Sudarshan Das Mundhra, and Mr. Vikram Kumar Mishra, has been appointed as the Chief Financial Officer and Company Secretary of the Company respectively.
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 SEBI Listing Regulations, your Company has framed and adopted a Policy on Familiarization of the Independent Directors. Accordingly, the Company had arranged a familiarization program for the Independent Directors of your Company on 31st December, 2016. The Independent Directors met with some of the Senior Technical Team members and discuss over the existing projects of the Company and working conditions at various sites of the Company. The details of the familiarization program as required under Regulation 46 of SEBI (LODR) Regulations, 2015 is available on the website of the Company.
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.
9. REMUNERATION POLICY
Pursuant to Section 178(1) of the Act, the Company had constituted Nomination and Remuneration Committee to perform such functions as enumerated in the Act and the SEBI Listing Regulations. Your Company follows the Policy on Remuneration of Directors and Senior Management Employees, as approved by the Nomination and Remuneration Committee. A detailed report on the same is given in the Corporate Governance Report, which forms an integral part of this report.
10. MEETINGS OF THE BOARD
The Board of Directors met 7 (Seven) times during the financial year 2016-17, 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, has also been followed by the Company.
11. AUDIT COMMITTEE
Pursuant to Section 177 of the Act and the SEBI Listing Regulations, the Audit Committee of your Company consists of majority of Independent Directors and the details pertaining to composition and meetings of the committee are included 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 2016-17.
12. AUDITORS & AUDIT REPORTS:
In terms of the provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014 an audit firm can hold office as statutory auditors for two terms of five consecutive years each i.e. for a maximum period of ten years. They can be re-appointed after a cooling period of five years thereafter. In computing the period of ten years, the period for which the statutory auditors would have held office before the commencement of the Act i.e. before April 1, 2014 is also to be taken into account.
M/s. Chaturvedi & Company, has been acting as the statutory auditors of the Company for more than ten years and to comply with the provisions of the Act, a new auditor must be appointed in their place to act as Statutory Auditors after the conclusion of 27th AGM. The Board has recommended the appointment of M/s. H.S. Bhattacharjee & Co., Chartered Accountants, Kolkata as the Statutory Auditors of the Company in place of M/s. Chaturvedi & Company, to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the 32nd Annual General Meeting of the Company, subject to ratification by the members at every AGM. The resolution seeking shareholders approval on this item is included in the Notice convening the AGM.
The Company has received a confirmation from M/s. H.S. Bhattacharjee & Co., Chartered Accountants, that their appointment, if made, at the 27th AGM will be in accordance with Sections 139 and 141 of the Act and Rules made thereunder. Accordingly, the Members are requested to approve the appointment of the Statutory Auditors at the 27th AGM.
The qualifications in the Auditors Report read with Annexure referred to in Paragraph 7 of the Auditors Report are repetitive and not significant in nature. Comments under Annexure to the Auditors Report are self-explanatory and, therefore, require no further comments from the Board of directors.
In terms of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, on recommendation of the Audit Committee, the Board of Directors have appointed M/s. S. Chhaparia & Associates, Cost Accountants, Kolkata (Firm Registration No. 101591) as Cost Auditors of the Company to conduct the audit of cost records of your Company for the financial year 2017-18. The remuneration of the Cost Auditors has been approved by the Board, on the recommendation of the Audit Committee, and the requisite resolution for ratification of remuneration of Cost Auditors by the members has been set out in the Notice of the 27th Annual General Meeting of the Company.
Pursuant to Section 204 of the Act, the Board of Directors had appointed Mr. Asit Kumar Labh of M/s. A.K. Labh & Co., Company Secretaries, Kolkata to conduct the secretarial audit of the Company for the financial year 2016-17. The Secretarial Audit Report for the financial year 2016-17 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.
13. 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.
14. 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.
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.
16. INTERNAL FINANCIAL CONTROLS
Your Company has adequate Internal Control Systems and Procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. The Financial Statements of the Company are prepared through the process which has automated as well as manual controls to ensure accuracy of recording all transactions which have taken place during any accounting period, and the resultant financial position at period end. Management Information System has been established which ensures that adequate and accurate information is available for reporting and facilitating decision making.
The Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of fraud and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures.
Internal Audit, pursuant to Section 138 of the Act, is conducted by independent firm of auditors. Internal Auditors regularly checked the adequacy of the system and their observations were reviewed by the management and remedial measures, as necessary, were undertaken. Internal Auditors directly report to the Chairman of the Audit Committee of the Company to maintain its objectivity and independence.
17. 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 2016-17 and the date of this report.
18. SIGNIFICANT AND MATERIAL ORDERS PASSED BY
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.
19 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. During the year under review, it invested in attraction, retention and development of talent on an ongoing basis.
Your Company has zero tolerance towards sexual harassment at the workplace. To strengthen the security against sexual harassment, as required under Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013, the Company has adopted "Anti-Sexual Harassment Policy" and also constituted an Internal Complaints Committee (ICC). No complaints with allegation of any sexual harassment were reported during the year under review.
Particulars of employees as required under Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure III
20. CHANGES IN THE SHARE CAPITAL OF THE COMPANY
During the financial year 2016-17, 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.
21. VIGIL MECHANISM :
In terms of Section 177(9) & (10) of the Act, Vigil Mechanism for directors and employees to report genuine concerns has been established by your Company. The Board has adopted a Whistle Blower policy to promote reporting of any unethical or improper practice or violation of the companys Code of Conduct or complaints regarding accounting, auditing, internal controls or disclosure practices of the company. It gives a platform to the whistle blower to report any unethical or improper practice (not necessarily violation of law) and provides a formal process for all directors, employees and vendors to approach the Chairman of the Audit Committee and make protective disclosures about any concern. The Vigil Mechanism Policy has been uploaded on the website of the Company and is reviewed by the Audit Committee as well as the Board at regular intervals.
22. CORPORATE GOVERNANCE
Your Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements as stipulated by the Act and SEBI Listing Regulations. The report on Corporate Governance as stipulated under Regulation 34(3) read with the Schedule V of the SEBI Listing Regulations, together with the Certificate received from Mr. A K Labh, Practising Company Secretary (FCS-4848/ CP-3238) is attached and forms an integral part of this Annual Report.
23. 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, 2017 is attached and forms an integral part of this report.
24. 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 published in the Companys website.
25. 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.
26. 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.
c) 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 (Rs in lacs)
|Particulars||As on 31st||As on 31st|
|March, 2017||March, 2016|
|On Contract Work|
|(Gross Billing at|
D. Foreign exchange outgo (Rs in lacs)
|Particulars||As on 31st March, 2017||As on 31st March, 2016|
27. CORPORATE SOCIAL RESPONSIBILITY
The provisions of Corporate Social Responsibility are not applicable to your Company.
28. 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.
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
|Chairman & Managing Director|
|Registered Office :|
|12/1, Nellie Sengupta Sarani|
|Kolkata - 700 087|
|Date: 14th August, 2017|