Dear Members,
The Board of Directors hereby submits the One Hundredth and Sixth
Annual Report of your Company ("the Company" or "Simplex") along with
Company?s Audited Financial Statements for the financial year ended 31st March, 2024.
Financial Results
The financial performance of the Company for the year ended 31st March,
2024 is summarized below:
|
Standalone |
Consolidated |
| Particulars |
31st March, 2024 |
31st March, 2023 |
31st March, 2024 |
31st March, 2023 |
| Revenue from Operations |
10109 |
15465 |
13885 |
18738 |
| Earning before finance costs, tax, depreciation and
amortization (EBITDA) |
456 |
621 |
462 |
1075 |
| Less: Finance Costs |
800 |
8373 |
795 |
8391 |
| Less: Depreciation and amortization |
691 |
850 |
697 |
857 |
| Share of net profit/ (loss) of Associates and Joint Ventures
accounted for using equity method |
- |
- |
(4) |
(73) |
| Profit/(loss) after exceptional items and before tax |
(1035) |
(8602) |
(1034) |
(8246) |
| Less: income tax expenses |
|
|
|
|
| Current Tax |
5 |
10 |
9 |
13 |
| Deferred Tax Charge/ (Credit) |
(321) |
(3014) |
(320) |
(3013) |
| Excess Current tax provision for earlier years written back
(net) |
- |
(536) |
- |
(536) |
| Profit/ (loss) for the year |
(719) |
(5062) |
(723) |
(4710) |
| Attributable to: |
|
|
|
|
| Owners of the Company |
(719) |
(5062) |
(723) |
(4709) |
| Non-Controlling Interest |
- |
- |
* |
(1) |
| Other Comprehensive Income / (Loss) for the year, net of
tax |
37 |
225 |
35 |
220 |
| Attributable to: |
|
|
|
|
| Owners of the Company |
37 |
225 |
35 |
222 |
| Non-Controlling Interest |
- |
- |
* |
(2) |
| Total Comprehensive Income/(Loss) for the year |
(682) |
(4837) |
(688) |
(4490) |
| Attributable to: |
|
|
|
|
| Owners of the Company |
(682) |
(4837) |
(688) |
(4487) |
| Non-Controlling Interest |
- |
- |
* |
(3) |
| Profit /(loss) for the period |
(719) |
(5062) |
(723) |
(4709) |
| Balance at the beginning of the year |
(10898) |
(5771) |
(10713) |
(5939) |
| Profit / (loss) available to owners for appropriation |
(11617) |
(10833) |
(11435) |
(10648) |
| Measurements of post-employment benefit obligations |
(17) |
(65) |
(18) |
(65) |
| Balance carried to Balance Sheet |
(11634) |
(10898) |
(11453) |
(10713) |
Review of Operations
During the year under review, on standalone basis, revenue from
operations were Rs.10109 mns as against Rs.15465 mns in the previous year. The Company
reported loss after exceptional items and before tax of Rs. 1035 mns as against Rs. 8602
mns in the previous financial year and net loss for the year was Rs.719 mns as against
Rs.5062 mns in previous financial year. Other Comprehensive Income for the year (net of
tax) is Rs.37 mns as against Rs.225 mns in the previous year. After considering other
comprehensive income, total comprehensive loss stood at Rs. 682 mns as against Rs. 4837
mns in the previous year.
On a consolidated basis, the revenue from operations was Rs.13885 mns
as against Rs.18738 mns in the previous year. Loss before tax was Rs.1034 mns as compared
to Rs. 8246 mns in the previous year and loss for the year was Rs.723 mns as against
Rs.4710 mns in the previous year. Other Comprehensive Income for the year (net of tax) is
Rs. 35 mns as against Rs.220 mns in the previous year. After considering Other
Comprehensive Income, Total Comprehensive Loss stood at Rs. 688 mns as against Rs.4490 mns
in the previous year.
Business Review
During the year under review, the Company bagged new orders amounting
to approx. Rs.3000 mns in various vertical it operates- construction work for civil,
structural and mechanical erection works for coal handling plant, piling work for
transmission line, supply and fixing of cement godown, weigh bridge room and borewell, to
name a few and several other engineering and industrial structures project, making the
order book above Rs.20000 mns as on 31st March , 2024.
Transfer to General Reserves
The Company has not transferred any amount to the General Reserves
during the current financial year.
Dividend
In view of the loss during the year under review, your Directors do not
recommend any dividend for the Financial Year 2023-2024.
Material changes and commitments
There are no material changes or commitments affecting the financial
position of the Company which have occurred after March 31, 2024 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
("the Act"). Pursuant to the Ministry of Corporate Affairs (MCA) notification
amending the Companies (Acceptance of Deposits) Rules, 2014, the Company files 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 Company is under financial stress since couple of years and
defaulted in servicing its payment obligations towards the banks and financial
institutions (the "Lenders") who have extended various credit facilities to the
Company. It tried to resolve the debt by offering several restructuring schemes pursuant
to RBI guidelines but could not sail through. Thereafter, the Lead Bank, Punjab National
Bank, on behalf of all the Lenders showcased the Company?s case to National Asset
Reconstruction Company Limited (NARCL) for their consideration for assignment of debt.
Accordingly, NARCL made an offer for the assignment of debt to which the Lead Bank and
other majority of the Lenders agreed and accordingly their exposure, financial assistance
granted by them to the Company, together with all underlying securities, rights, title and
interest in respect thereof for their entire exposure was assigned in favour of NARCL as
per the Assignment Agreement.
Extract of the Annual Return
In accordance with the Act, the annual return in the prescribed format
is available at website of the Company at www.simplexinfra.com.
Number of meetings of the Board
Six 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 the composition of Audit Committee are
included in the Corporate Governance Report which forms part of this report.
Directors? Responsibility Statement
The financial statements are prepared in accordance with Indian
Accounting Standards (Ind AS) as prescribed under Section 133 of the Act, read with Rule 3
of the Companies (Indian Accounting Standards) Amendment Rules, 2016. Accounting policies
have been consistently applied except where a newly 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 Act:
(a) In the preparation of the annual accounts for the financial year
ended 31st March, 2024, 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 affairs of the company at the end of the
financial year and of the loss of the company for that period;
(c) That proper and sufficient 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 financial statements have been prepared on a going
concern basis;
(e) That proper internal financial controls were followed by the
company and such internal financial 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 effective; 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
effectively.
Policy on Directors? appointment and remuneration and other
details
The Company?s policy on Directors? appointment and
remuneration and other matters provided in Section 178(3) of the Act is hosted on the
Company?s 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 Act
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).Shareholders 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.
Shareholders interested in obtaining the details of employees posted
outside India and in receipt of a remuneration of Rs. 60 Lakhs per financial year or Rs. 5
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 providing infrastructural
facilities as specified 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 arm?s 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 significant related party
transactions made by the Company with Promoters, Directors or Key Managerial Personnel
etc. which may have potential conflict with the interest of the Company at large.
Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)
(h) of the Act in Form AOC 2 is not applicable.
However, the details of the related party transactions are set out in
Note 30 to the standalone financial 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 identified 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. Pratap Kumar Chakravarty, 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.
The Company endeavors to fulfill its CSR responsibilities in its
identified segments- education, healthcare, welfare of poor and girl child, preservation
of art and heritage. However, the Company has negative average net profit of three
immediately preceding financial 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 specified 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 Whole Time Directors and
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, 2024, 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 Private Limited,
(v) Jaintia Highway Private Limited ,
(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 financial statement of the Company?s
subsidiary/ associate/ joint venture companies is provided in the Form AOC-1, is attached
after the consolidated financial statements of the Company. In accordance with Section 136
of the Act, the audited financial statements, including the consolidated financial
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 identification of material
subsidiaries in line with Regulation 16(1)(c) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (Listing Regulations) and the same is placed on
the Company?s website at www.simplexinfra.com. The Company does not have any material
subsidiaries as on the date of this report.
Formation/Cessation of Company?s Subsidiaries/ Associate/Joint
Venture
During the year under review, no company has become or has ceased to be
a Subsidiary/ Associate/ Joint Venture of the Company.
Directors
During the year under review, Mr. Sheo Kishan Damani (DIN-00062780),
Independent Director of the Company tendered his resignation with effect from close of
business hours of 25th April, 2023 due to old age and persistent poor health. The Board
records its sincere appreciation for the service rendered by Mr. Damani during his tenure
in the Company. Mr. Rajiv Mundhra (DIN-00014237) continues as a Non-Executive Director and
Chairman of the Company, not liable to retire by rotation, w.e.f 1st April, 2023, as
approved by the Members of the Company by way of postal ballot, whose results were
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 effect from 25th April, 2023. His appointment has been approved
by the Members of the Company by way of postal ballot , whose results were declared on
15th June 2023. The tenure of Mr. Sukumar Dutta (DIN 00062827) as Whole-time Director of
the Company is due to expire on 31st August 2024. Mr. Dutta has been on the board for more
than two decades. 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 re-appointment of Mr. S. Dutta for a further
period of 1 year effective from 1st September 2024.Mr. Dutta has given his consent to act
as a Director, if so appointed.
The proposal for re-appointment including remuneration are set out in
the notice convening the 106th 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 re-appointment of Mr. S. Dutta, Whole-time Director & CFO is
subject to the approval of NARCL and Shareholders, the remuneration received by him will
be held in Trust. In accordance with the provisions of the Act, Mr. Shamik Das Gupta (DIN
- 01127296), Non-Executive Non-Independent Director retires by rotation and being eligible
has offered 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 disqualified from continuing as Independent Directors of the Company as per the
criteria laid down in Section 149(6) of the Act and Regulation 16(1)(b) of Listing
Regulations. The terms and conditions of appointment of the Independent Directors are in
compliance with the provisions of the Act 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 Act.
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. 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 financial year ended March 31,2024 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.
Significant and material orders passed by Regulators/Courts/Tribunals
During the year under review, there were no significant 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 with 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 Company?s 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 (five) consecutive years, at the Annual
General Meeting of the Company held on the 30th day of September, 2019 to hold office 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
(five) 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.
During the year under review, no frauds were reported by the Auditors under section
143(12) of the Act.
Boards? Explanation on Auditors? Qualification on Financial
Statements
The Board has duly examined the Statutory Auditors? Report to the
accounts and the Board?s clarifications regarding the qualified opinions of the
Statutory Auditors on Financial Statements of the Company are given hereunder:
Independent Auditors Report of M/s. Chaturvedi & Co. LLP Standalone
Financial Statements I. ‘Basis for Qualified Opinion? under Independent Auditors
Report on the Audit of the Standalone Financial Statements
1. We refer to Clause (a) of Basis for Qualified Opinion of Independent
Auditors Report, where the Auditors have qualified- "Note 41 (a) to the accompanying
Standalone Financial Statements regarding uncertainties relating to recoverability of
unbilled revenue pending for certification amounting to Rs. 21,440 lacs (PY Rs. 2,864
lacs), Note 38 regarding trade receivables and retention monies amounting to Rs. 11,325
lacs (PY Rs. 8,858 lacs) and Rs. 3,204 lacs (PY Rs. 3,009 lacs), respectively, as at March
31, 2024, 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 confident of recovery of these receivables. However, in the absence of
confirmation or any sufficient appropriate convincing audit evidence in respect of
aforesaid balances mentioned above to support the significant judgments and estimates
related to underlying assumptions applied by 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 effected by the
Management. Certification of unbilled revenue by customers and acceptance of final bills
by customers often takes significant period of time and varies from project to project. At
this stage, based on discussions with concerned customers, the Management believes that
the unbilled revenue as on 31st March, 2024 will be billed and realized in due course. The
matter has been explained in note 41(a) forming part of the Standalone Financial
Statements.
Regarding, Trade receivables from customers, Management is of the view
that the trade receivables in respect of various project sites are outstanding for a long
period of time. At this stage, based on discussions and correspondence with customers, the
management believes the above balances are good and recoverable. Retention monies due from
customers are receivable only after clearance of final 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 31stMarch, 2024 are good and
recoverable. The matter has been explained in note 38 forming part of the Standalone
Financial Statements
2. We refer to Clause (b) of Basis for Qualified Opinion of Independent
Auditors Report, where the Auditors have qualified- "Note 38 to the accompanying
Standalone Financial Statements regarding inventories aggregating Rs. 843 lacs (PY Rs. 887
lacs) pertaining to certain completed/ suspended/ terminated projects in the view of
management are good and readily useable. In the absence of any sufficient appropriate
convincing audit evidence to support the significant judgments and estimates relating to
management?s 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
aggregating Rs.843 Lacs (31st March, 2023: Rs.887 Lacs) as on 31st March, 2024 pertaining
to certain completed project sites are readily usable. The matter has been explained in
note 38 forming part of the Standalone Financial Statements.
3. We refer to Clause (c) of Basis for Qualified Opinion of Independent
Auditors Report, where the Auditors have qualified-"Note 39 to the accompanying
Standalone Financial Statements regarding loans and advances pertaining to earlier years
amounting to Rs. 35,531 lacs (PY Rs. 35,063 lacs), as informed to us the company is in
active pursuit and confident of recovery of these advances. In the absence of confirmation
or any sufficient appropriate convincing audit evidence to support the significant
judgments and estimates relating to management?s 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 amounting to Rs.35,531
lacs (31st March, 2023: Rs.35,063 lacs) for which the Company is in active pursuit and
confident 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 Financial
Statements.
4. We refer to Clause (d) of Basis for Qualified Opinion of Independent
Auditors Report, where the Auditors have qualified-"Note 40 to the accompanying
Standalone Financial Statements, regarding non provision of interest, the Company
defaulted in servicing of its Debts (including interest) to all lenders. The Company has
not provided any interest on fund based borrowing facility provided by various lenders for
the year ended March 31, 2024 amounting to Rs. 71,062 lacs (PY Rs. Nil) as referred in the
Note. The interest is based on management?s assessment.
The Management is of the view that the Company has defaulted in
servicing of its Debts (including interest) to all Lenders. Hence, the accounts of the
Company have been classified as Non-Performing Asset (NPA) by its Lenders. Consequently,
majority of the Lenders stopped charging interest on facilities given to the Company, in
their books of account and subsequently majority of Lenders had assigned outstanding debt
to NARCL as stated in Note No.36 of the standalone financial statements. Accordingly, the
Company has decided not to provide any interest charge on fund based borrowing facilities
provided by various Lenders for the year ended 31st March, 2024 amounting to Rs.71,062
Lacs. Further interest debited by the Lenders who have not assigned their debts to NARCL
has not been reversed. The matter has been explained in note 40 forming part of the
Standalone Financial Statements.
II. ‘Emphasis of Matter" under Independent Auditors Report on
the Audit of the Standalone Financial Statements
We refer to Clause (a) of Emphasis of Matter of Independent Auditors
Report, where the Auditors have drawn attention to –
(1) TheaccompanyingStandaloneFinancialStatements Note 41(a) regarding
uncertainties relating to recoverability of unbilled revenue pending for certification
amounting Rs. 55,057 lacs (PY Rs. 38,720 lacs), Note 38 regarding trade receivables and
retention monies amounting Rs. 8,450 lacs (PY Rs. 5,077 lacs) and Rs. 2,839 lacs (PY Rs.
262 lacs), respectively, as at March 31, 2024, 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 or legal
action/arbitration (few cases) has been initiated in respect of the aforementioned
receivables. Considering the contractual tenability, progress of negotiations/ discussions
the management is confident of recovery of these receivables.
(2) Note 36 to the accompanying Standalone Financial Statement,
regarding borrowings the Company is in default in payment of Financial debts to its banker
and other financials lender amounting to Rs. 4,98,884 lacs (PY 4,83,021 lacs) as on March
31, 2024. Out of above majority of lender has assigned their outstanding debt as of July
29, 2023(cut-o_ date) in favour of National Asset Reconstruction Company Limited
("NARCL") for which confirmation is not available as on March 31, 2024.
(3) The Company has recognized net deferred tax assets amounting to Rs.
95,290 lacs (PY Rs. 92,085 lacs) as at March 31, 2024, which includes deferred tax assets
on carried forward unused tax losses, unused tax credit and other taxable temporary
differences on the basis of expected availability of future taxable profit for utilization
of such deferred tax assets. The management is confident that the deferred tax assets will
be set off against the future foreseeable profit by the Company.
The Management is of the view that regarding clause (1), the matter has
been explained above under ‘basis for qualified opinion?. Regarding clause (2),
the Management is of the view that the Company has incurred loss of Rs.7,189 lacs for the
year ended 31st March, 2024 (Rs.50,624 lacs for the year ended 31st March, 2023) as
also there was default in payment of Financial Debts to its Bankers and other financial
lenders amounting to Rs.498,884 lacs as on 31st March, 2024 (31st March, 2023: Rs.483,021
lacs). Based on deed of Assignment dated 28th March, 2024, the majority of Lenders had
assigned their outstanding debt as of 29th July, 2023 (cut-o_ date) in favour of National
Asset Reconstruction Company Limited ("NARCL"). NARCL has also appointed India
Debt Resolution Company Limited ("IDRCL") as their exclusive service agent as
intimated to us vide letter dated 03.04.2024 for debt Management and resolution of debt.
The Company is in the process of finalizing resolution plan with NARCL / IDRCL and other
Lenders who have not assigned their debts to NARCL. The company is confident of improving
its credit profile including time bound realisation of its asset, arbitration claim etc.
which would result in meeting its obligation in due course of time. Accordingly,
management consider it is appropriate to prepare these financial results on a going
concern basis. Regarding clause (3), the Management is of the view that the Deferred Tax
Asset will be adjusted against future projected current tax liability. The Company is
confident that the Resolution Plan which is under process of finalisation will be approved
by the Lenders and the said projected profit and current tax liability will be adjusted
against the Deferred Tax Asset.
The matter has been explained in detail in Note 41(a), 38, 36 and 41
(b) forming part of the Standalone Financial statements.
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 Rs. 7,189 lacs (PY
Rs. 50,624 lacs) during the year ended March 31, 2024, as also there is default in payment
of financial debts, to its bankers and others amounting to Rs. 4,98,884 lacs (PY Rs.
4,83,021 lacs). As stated in Note 36 to the accompanying statement, these financial
statements are prepared by the management on going concern basis for the reasons stated
therein." The Management?s views on this have been explained above and also
explained in detail in Note 36 forming part of the Standalone Financial Statements.
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)
We refer to ‘qualified opinion?, where the Auditors have
drawn attention to –
Qualified Opinion a. The Company?s internal financial 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 effectively as on March 31, 2024 which could potential result in the
company not recognizing appropriate provision on the Standalone Financial Statement in
respect of assets that are doubtful of recovery/credit impaired/ measuring the fair values
of those financial assets. b. 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 financial officer amounting to Rs. 37 Lacs during the year which has resulted
in a misstatement in the value of Company?s employee benefit expenses, financial
assets and its resultant impact on the loss after tax and the other equity including levy
of _ne, if any, on account of such non-compliance.
The Management?s views on clause (a) have been explained above and
also explained in detail in Note 38 and 39 forming part of the Standalone Financial
Statements. Regarding clause (b), the remuneration to Mr. S.Dutta, Whole Time Director
& CFO is subject to the approval of NARCL and Shareholders, the remuneration received
by him will be held in Trust.
Consolidated Financial Statements
All the qualifications on Consolidated Financial Results appearing
under clause (a), (b), (c) and (d) under ‘basis for qualified opinion? and also
appearing under clause (a) (1), (a)(2),(a)(3) and (b) of ‘ matter of emphasis?
and also qualification appearing under clause (a) and (b) under ‘qualified
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, 39 and 40 of the consolidated financial statements is self-explanatory and do
not call for further explanation.
Independent Auditors Report of M/s. Binayak Dey & Co. for
Standalone and Consolidated Financial Statements
The Management?s views set out under ‘Boards?
Explanation on Auditors? Qualification on Financial Statements? under
Independent Auditors Report of M/s. Chaturvedi & Co. LLP explains the joint
auditor?s, M/s Binayak Dey & Co. qualification and emphasis of matter on the same
issues in their Audit report on the Company?s financial statements for the year ended
31st March, 2024.
Secretarial Auditor and Secretarial Audit Report
Secretarial Audit for the FY 2023-2024 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 Act 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 financial year 2023-2024.
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 specified in the Companies
(Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. The
Consolidated Statements reflect 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 financial
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 financial
statements of the Company including the consolidated financial statements and separate
audited accounts in respect of its subsidiaries are available on the website of the
Company www.simplexinfra.com.The financial statements of the Subsidiary Companies are kept
open for inspection by the Shareholders at the Registered Office of the Company and a
statement containing the salient features of the Company?s financial statement of the
Company?s subsidiary/ associate/ joint ventures is attached as aforesaid.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars relating to conservation of energy, technology
absorption, 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
certificate from M/s. Binayak Dey & Co., Chartered Accountants, Joint Statutory
Auditors of the Company confirming 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 Rs.77
mns to its Fixed Assets consisting of only tangible assets.
Investor Education and Protection Fund (IEPF)
Pursuant to Provisions of Section 124 of the Act 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 financial year ended March 31, 2024, 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 31st March, 2024.
Details of difference 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 financial institutions. However, in relation to the debts of
the Company, details of which have been mentioned under the heading ‘ Resolution
Plan? in this Report.
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 Company?s all valued stakeholders. Your Directors also take this opportunity
to place on record their gratitude for the efforts and continuous hard work of all the
employees.
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