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Simplex Castings Ltd.

BSE: 513472 Sector: Engineering
NSE: SIMPLEXCAS ISIN Code: INE658D01011
BSE 14:01 | 09 Feb 44.20 -0.80
(-1.78%)
OPEN

44.10

HIGH

46.00

LOW

44.10

NSE 05:30 | 01 Jan Simplex Castings Ltd
OPEN 44.10
PREVIOUS CLOSE 45.00
VOLUME 704
52-Week high 54.75
52-Week low 32.60
P/E 4.64
Mkt Cap.(Rs cr) 27
Buy Price 44.25
Buy Qty 100.00
Sell Price 46.50
Sell Qty 100.00
OPEN 44.10
CLOSE 45.00
VOLUME 704
52-Week high 54.75
52-Week low 32.60
P/E 4.64
Mkt Cap.(Rs cr) 27
Buy Price 44.25
Buy Qty 100.00
Sell Price 46.50
Sell Qty 100.00

Simplex Castings Ltd. (SIMPLEXCAS) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 42nd AnnualReport on the business & operations of the Company with the Audited FinancialStatement for the year ended 31st March 2022.

FINANCIAL HIGHLIGHTS

Financial results are presented in the table below:

Particulars 31st March 2022 31st March 2021
Revenue from Operations 9183.85 8055.76
Other Income 82.96 225.82
Less: Finance Costs 877.75 1011.32
Less: Depreciation and amortization expenses 560.76 601.31
Profit Before Tax and Exceptional Item 202.95 (113.33)
Less: Exceptional Item - (260.00)
Less: Tax Expense 50.80 45.64
Profit After Tax 152.15 101.03
Other Comprehensive Income 59.88 48.32
Total Comprehensive Income 212.03 149.35

PERFORMANCE OF THE COMPANY

Our Company revenue from operations increased by 14.00% at Rs 9183.85Lacs compared to Rs 8055.76 Lacs in FY 2020-21. The Profit Before Tax (PBT) and ProfitAfter Tax (PAT) for the year 2021-22 were Rs 202.95 Lacs and Rs 152.14 Lacs respectivelyas against Rs 146. 67 Lacs and Rs 101.03 Lacs respectively during the previous year ended31 March 2021.

With the improvement of economic conditions in these markets weanticipate further increase in sales volume and profitability in the near future.

DIVIDEND

Your Company intends to conserve available resources to invest in thegrowth of the business and pursue strategic growth opportunities. Accordingly yourDirectors do not recommend any dividend for the year.

TRANSFER TO RESERVES

Your Company has not transferred any amount to the General ReservesAccount during the Financial Year 2021-22.

SUBSIDIARY JOINT VENTURE (JV) AND ASSOCIATE COMPANIES

The Company has filed the strike off application before Accounting andCorporate Regulatory Authority Singapore for closing of Simplex Castings InternationalPte Ltd and the same has been approved by the Authority. The Company does not have anyassociate or joint venture company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

MATERIAL CHANGES AND COMMITEMENT AFFECTING FINANCIAL POSITION OF THECOMPANY

There have been no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of the financialyear of the Company to which the financial statements relate and the date of this reportexcept an unfortunate fire accident occurred at around 2.00 am on 1st June2022 at one of our factory office building in our plant situated on Unit-1 5 IndustrialEstate Bhilai (C.G) — 490026. Company. The fire has been brought under control andthere is no loss or injury to Human Life. The estimated losses are adequately covered byInsurance. However the operations at the plant are not affected.

DEPOSITS

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

CORPORATE GOVERNANCE

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

A separate statement on Corporate Governance together with acertificate from the practicing Company Secretary regarding compliance of conditions ofCorporate Governance as stipulated under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 forms part of the Annual Report.

CHANGE IN THE NATURE OF BUSINESS IF ANY

There was no change in the nature of business of the Company during theFinancial Year ended 31st March 2022.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Retirement of director by rotation

In accordance with the provisions of Section 152 of the Act and theCompany's Articles of Association Mr Om Prakash Patel (DIN: 08301041) Directorretires by rotation at the forthcoming Annual General Meeting and being eligible offershimself for re-appointment.

The Board recommends his re-appointment for the consideration of theMembers of the Company at the forthcoming Annual General Meeting. Brief profile of Mr. OmPrakash Patel has been given in the Notice convening the Annual General Meeting.

KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the Company as on 31stMarch 2022:

1. Mrs Sangeeta K Shah: Managing Director

2. Mr. Avinash Hariharno: Chief Financial Officer

3. Mrs Akanksha Kotwani: Company Secretary

During the year following no changes took place in the Key ManagerialPersonnel

PERFORMANCE EVALUATION

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

The framework was developed to give all Board members an opportunity toevaluate and discuss the Board's performance openly from multiple perspectives andenhance governance practices within the Board. The framework describes the evaluationcoverage and the process thereof.

A structured questionnaire each for evaluation was prepared and aseparate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board.

The performance evaluation of the Independent Directors was alsocarried by the entire Board. The performance evaluation of the Chairman Managing Director& Executive Directors was carried out by the independent Directors at its separatemeeting held on 12th February 2022. The Directors expressed their satisfactionwith the evaluation process.

STATEMENT ON DECLARATION BY INDEPENDENT DIRECTOR:

All Independent Directors of the Company have given declarations asrequired under the provisions of Section 149 (7) of the Companies Act 2013 stating thatthey meet the eligibility criteria of independence as laid down under section 149(6) ofthe Companies Act 2013 and Regulation 25 of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015.

FAMILIARISATION PROGRAMME OF INDEPENDENT DIRECTORS

The Company conducts Familiarization Programme for the IndependentDirectors to provide them an opportunity to familiarize with the Company its Managementand its operations so as to gain a clear understanding of their roles rights andresponsibilities and contribute significantly towards the growth of the Company. Theinitiatives undertaken by the Company in this respect has been disclosed on the website ofthe Company at www.simplexcastings.com and weblink is

http://www.simplexcastings.com/public/asset/docs/investor/notice-announcements/notices/2021-22.pdf

NOMINATION AND REMUNERATION POLICY

The remuneration paid to the Directors is in accordance with theNomination and Remuneration Policy formulated in accordance with Section 178 of theCompanies Act 2013 and Regulation 19 of the Listing Regulations (including any statutorymodification(s) or re-enactment(s) for the time being in force). The silent aspectscovered in the Nomination and Remuneration Policy has been outlined in the CorporateGovernance Report which forms part of this report.

CRITERIA FOR DETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES ANDINDEPENDENCE OF A DIRECTOR

In terms of the provisions of Section 178(3) of the Act and Regulation19 of the Listing Regulations the NRC has formulated the criteria for determiningqualifications positive attributes and independence of Directors the key features ofwhich are as follows:

• Qualifications - The Board nomination process encouragesdiversity of thought experience knowledge age and gender. It also ensures that theBoard has an appropriate blend of functional and industry expertise.

• Positive Attributes - Apart from the duties of Directors asprescribed in the Act the Directors are expected to demonstrate high standards of ethicalbehaviour communication skills and independent judgment. The Directors are also expectedto abide by the respective Code of Conduct as applicable to them.

• Independence - A Director will be considered independent ifhe/she meets the criteria laid down in Section 149(6) of the Act the Rules framedthereunder and Regulation 16(1 )(b) of the Listing Regulations as amended from time totime.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required under Section 197 of the Companies Act 2013and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 (including any statutory modification(s) or re-enactment(s) thereof for the timebeing in force is set out in the Annexure-I to this report.

The Company does not have any employee whose particulars are requiredto be given pursuant to the provisions of section 197 of the Companies Act 2013 read withRule 5(2) & (3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.

The statement containing the names of top ten employees in terms ofremuneration drawn and the particulars of employees as required under Section 197(12) ofthe Companies Act 2013 read with Rule 5(2) of the aforementioned Rules will be madeavailable on request sent to the Company on cs@simplexcastings.com.

DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) and Section 134(5) of the Companies Act2013 (including any statutory modifications or re-enactments thereof for the time being inforce) the Directors of the Company confirm that:

a. In the preparation of the annual accounts for the financial yearended 31st March 2022 the applicable Accounting Standards and Schedule III ofthe Companies Act2013 have been followed and there are no material departures from thesame;

b. the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at 31st March2022 and of the profit and loss of the Company for the financial year ended 31stMarch 2022;

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

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

e. proper internal financial controls laid down by the Directors werefollowed by the Company and that such internal financial controls are adequate andoperating effectively; and

f. Proper systems to ensure compliance with the provisions of allapplicable laws were in place and that such systems are adequate and operatingeffectively.

MEETING OF BOARD AND COMMITTEES

The details of the meetings of the Board of Directors and itsCommittees convened during the financial Year 2021-22 are given in the CorporateGovernance Report which forms a part of Annual Report.

SEPARATE MEETING OF THE INDEPENDENT DIRECTORS

During the year under review the Independent Directors met on 12thFebruary 2022 without the attendance of Non-Independent Directors and members of themanagement inter alia to discuss on the following:

• To review the performance of the Non Independent Directors andthe Board as whole;

• Review the performance of the Chairperson of your Companytaking into account views of Executive/Non-Executive Directors; and

• Assess the quality quantity and timeliness of flow ofinformation between your Company's management and the Board that was necessary forthe Board to effectively and reasonably perform their duties.

All the Independent Directors of the Company attended the separateMeeting of Independent Directors. Mr Champak K Dedhia chaired the Meeting.

STATUTORY AUDITORS AND THEIR REPORT

At the 41st AGM of the Company held on 30th September2021 the shareholders had approved the reappointment of M/s APAS & Co CharteredAccountants (Firm Registration No. No.000340C) as Statutory Auditors of the Company tohold office till the conclusion of the 44th AGM.

The Auditors have issued an un modified opinion on the FinancialStatements for the financial year ended 31st March 2022.

The Emphasis of matter in Audited Financial Statement and managementreply thereto was as under: -

SL No Auditors' emphasis on matters Management's Reply
1. In view of the ongoing war in Ukraine company has written down semi-finished goods amounting to Rs. 318.04 lakhs (amount over ECGC cover of 5 crores) pertaining to inventory related to order from Ukraine company as there is no certainty of payments and dispatch for the said orders till the Geo political tension in the country is eased out. Looking into the uncertainty of dispatches related to such items due to continuing war situation between Ukraine and Russia management has decided to written down the underlying semi-finished stock in the Godown by cutting the same and using as raw material.

COST AUDITOR AND THEIR REPORT

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

Accordingly the Board at its meeting held on 28th May2022 has on the recommendation of the Audit Committee re-appointed M/s Arindam &Associates Cost Accountants to conduct the audit of the cost accounting records of theCompany for F.Y. 2022-23 on a remuneration of Rs 0.70 lacs plus taxes as applicable andout-of-pocket expenses. The remuneration is subject to the ratification of the Members interms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules 2014.

INTERNAL AUDITOR

Pursuant to the provisions of section 138 and rules made there underthe Board on recommendation of Audit Committee in the Board Meeting held on 28th May2022 has reappointed M/s Harshit Malviya & Associates Chartered Accountants for theFY 202223.

SECRETARIAL AUDITOR AND THEIR REPORT

Pursuant to the provisions of Section 204 of the Companies Act 2013and The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed M/s Divanshu Mittal & Associates Company Secretaries (FCS8703 CP No. 13800) to undertake the Secretarial Audit of the Company for the FinancialYear 2021-22.

The Secretarial Audit Report for the financial year ended 31st March2022 is annexed herewith as Annexure II to this report.

The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.

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

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

EXTRACT OF ANNUAL RETURN

The Extract of the Annual Return of the Company has been placed on thewebsite of the Company at www.simplexcastings.com.

RELATED PARTY TRANSACTIONS

All Related Party Transactions (RPTs) entered into by the Companyduring the year under review were on an arms' length basis and in the ordinary courseof business. These were no material RPTs under Regulation 23 of the Listing Regulations.Given that the Company does not have anything to report pursuant to Section 134(3)(h) ofthe Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 in Form No. AOC- 2therefore the same is not provided. All related party transactions are approved by theAudit Committee and are periodically reported to the Audit Committee. Prior approval ofthe Audit Committee was obtained on a periodic basis for the transactions which wereplanned and / or repetitive in nature and omnibus approvals were also taken as per thepolicy laid down for unforeseen transactions.

The Policy on Related Party Transactions as approved by the Board ofDirectors is available on the Company's website.

The details of the transactions with related parties during FY 2021-22are provided in the accompanying financial statements. The transactions with person orentity belonging to the promoter/ promoter group which hold(s) 10% or more shareholding inthe Company has been disclosed in the accompanying financial statements.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Details of loans guarantees and investments under the provisions ofSection 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules2014 as on 31st March 2022 are set out in Notes to the Financial Statements of theCompany.

SHARE CAPITAL

The paid-up Equity Share Capital as on 31st March 2022 isRs 613.12 Lacs.

Your Company has not issued equity shares with differential rights asto dividend voting or otherwise; and does not have any ESOP Scheme for itsemployees/Directors. As on March 312022 none of the Directors of the Company holdinstruments convertible into Equity Shares of the Company.

LISTING OF SHARES

The Company Securities are listed on Bombay Stock Exchange and CalcuttaStock Exchange.

RISK MANAGEMENT

The Company has in place comprehensive risk assessment and minimizationprocedures which are reviewed by the Board periodically. The Company has been addressingvarious risks impacting the Company.

DISCLOSURE ON AUDIT COMMITTEE

The Audit Committee as on 31st March 2022 comprises of thefollowing Independent Directors:

Mr Champak K Dedhia (Chairman) Ms Ushma Nitin Khabaria and Mrs S. MSwathi as Members.

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

VIGIL MECHANISM

A Vigil Mechanism Policy for Directors and employees of the Company isconstituted to provide a mechanism which ensures adequate safeguards to employees andDirectors from any victimization on rising of concerns of any violations of legal orregulatory requirements incorrect or misrepresentation of any financial statements andreports etc.

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

During the year under review the Company has not received anycomplaints under the Mechanism.

CORPORATE SOCIAL RESPONSIBILITY:

The CSR Committee has formulated a CSR policy of the Company forundertaking the activities as specified in Schedule VII to the Companies Act 2013. A copyof the CSR Policy has been posted on the website of the company at www.simplexcastings.comand also on the following weblink http://www.simplexcastings.com/investors/code-of-conduct/docs/policies/Corporate_Social_Responsibili ty_Policy.pdf.

The Composition of the CSR Committee:

Mr Champak K Dedhia (Chairman)

Mrs Sangeeta Ketan Shah (Member)

Mr Ketan M Shah(Member)

The Annual Report on Corporate Social Responsibility activities duringthe year are set out in Annexure III of this Report in the format prescribed in theCompanies (Corporate Social Responsibility Policy) Rules 2014.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

Information on conservation of energy technology absorption foreignexchange earnings and outgo required to be given pursuant to Section 134(3) (m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is annexedherewith as Annexure - IV to this report.

INTERNAL FINANCIAL CONTROL

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

Assurance on the effectiveness of internal financial controls isobtained through management reviews control self-assessment continuous monitoring byfunctional experts as well as testing of the internal financial control systems by theinternal auditors during the course of their audits. We believe that these systems providereasonable assurance that our internal financial controls are designed effectively and areoperating as intended.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS

There are no significant and material orders passed by the Regulatorsor Courts or T ribunals which would impact the going concern status of the Company and itsoperation in future.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 125 of the Companies Act 2013the outstanding amount of dividend which remained unpaid or unclaimed for a period ofseven years and shares whose dividend was unpaid/unclaimed for seven consecutive yearshave been transferred by the Company from time to time on due dates to the InvestorEducation and Protection Fund.

During the year under review the Company has credited Rs 0.80 Lacs tothe Investor Education and Protection Fund (IEPF) pursuant to Section 125 of the CompaniesAct 2013/ Section 205C of the Companies Act 1956 read with the Investor Education andProtection Fund (Awareness and Protection of Investors) Rules 2001 relating to theDividend paid by the Company for FY 2013-14.

During the year under review the Company has also transferred 9216Equity Shares to the Investor Education and Protection Fund (IEPF) relating to 79shareholders of the Company whose dividend were unclaimed/unpaid for seven consecutiveyears pursuant to Section 125 of the Companies Act 2013 read with the Investor Educationand Protection Fund (Awareness and Protection of Investors) Rules 2001 and the InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016.

Pursuant to the provisions of Investor Education and Protection Fund(Uploading of information regarding unpaid and unclaimed amounts lying with companies)Rules 2012 the Company has uploaded the details of unpaid and unclaimed amounts lyingwith the Company as on 30th September 2021 (date of last Annual GeneralMeeting) on the Company's website at www.simplexcastings.com and on the website ofthe Ministry of Corporate Affairs. Any person whose unclaimed or unpaid amount has beentransferred by the Company to IEPF may claim their refunds to the IEPF authority. Forclaiming such amount claimant needs to file form IEPF-5 along with requisite documents.

The detailed procedure for claiming shares and Dividend Amount has beenuploaded on the Website of the Company at www.simplexcastings.com and also available onthe website of IEPF (www.iepf.gov.in).

The Nodal Officer for the purpose of IEPF is Company Secretary and thewebsite address is www.simplexcastings.com.

HUMAN RESOURCE AND INDUSTRIAL RELATIONS

Your Company believes that its employees are one of the most valuableassets of the Company. During the year under review the Company organised varioustraining programs at all level to enhance skill of the employees. The employees are deeplycommitted to the growth of the Company.

DETAILS OF DIFFERENCES BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIMEOF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS ORFINANCIAL INSTITUTIONS ALONG WITH THE REASON THEREOF:

Your Company has not made any one-time settlement with any of itslenders.

DETAILS OF APPLICATIONS MADE OR ANY PROCEDDINGS PENDING UNDER THEINSOLVANCY AND BANKRUTCY 2016:

Cimmco Ltd. has filed an application before NCLT Mumbai for demandingRs.831.01 lacs for non-supply of Bogie which is on account of loss of profit goodwillharassment LD Interest etc. from the company whereas the company is having receivable ofRs.91.01 lacs against supply of Bogie to Cimmco Ltd. The company has also filed anapplication before NCLT Kolkata for demanding Rs.91.01 lacs but due COVID-19 the hearingwas adjourned. The Company has not provided for the liability towards the amount of claimsraised by Cimmco against the Company in view of strong defence of the Company themanagement believes ultimate outcome of the proceedings is expected to be in Company'sfavour.

COMPLIANCE OF SECRETARIAL STANDARD:

Your Company have complied with all Secretarial Standards issued by theInstitute of Company Secretaries of India (ICSI) and approved by Central Government fromtime to time.

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

The Company has adopted zero tolerance for sexual harassment at theworkplace and has formulated a policy on prevention prohibition and redressal of sexualharassment at the workplace in line with the provisions of the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the rules thereunderfor prevention and redressal of complaints of sexual harassment at workplace. Awarenessprograms were conducted at various locations of the Company. The Company has complied withprovisions relating to the constitution of the Internal Committee under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. Therewere no complaints relating to sexual harassment pending at the beginning of financialyear received during the year and pending as on the end of the Financial Year 202122.

ACKNOWLEDGEMENT

The Board of Directors would like to express their sincere appreciationfor the assistance and cooperation received from the financial institutions banksGovernment authorities customers vendors and members during the year under review. TheBoard of Directors also wish to place on record its deep sense of appreciation for thecommitted services by the Company's executives staff and workers.

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