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Simplex Infrastructures Ltd.

BSE: 523838 Sector: Infrastructure
NSE: SIMPLEXINF ISIN Code: INE059B01024
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VOLUME 8397
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OPEN 53.95
CLOSE 54.20
VOLUME 8397
52-Week high 102.70
52-Week low 32.90
P/E
Mkt Cap.(Rs cr) 306
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Simplex Infrastructures Ltd. (SIMPLEXINF) - Director Report

Company director report

Dear Members

The Board of Directors hereby submits the One Hundredth and FourthAnnual Report of your Company ("the Company" or "Simplex") along withCompany's Audited Financial Statements for the financial year ended 31st March 2022.

Financial Results

The financial performance of the Company for the year ended 31st March2022 is summarized below:

H in mns

Particulars

Standalone

Consolidated

31st March 2022 31st March 2021 31st March 2022 31st March 2021
Revenue from Operations 17363 20202 20468 22000
Earning before finance costs tax depreciation and amortization (EBITDA) 735 655 869 750
Less: Finance Costs 7461 6348 7548 6436
Less: Depreciation and amortization 1040 1244 1047 1250
Share of net profit/ (loss) of Associates and Joint Ventures accounted for using equity method - - (288) (84)
Exceptional Item 246 - - -
Profit/(loss) after exceptional Items and before tax (8012) (6937) (8014) (7020)
Less: income tax expenses
Current Tax 18 28 21 28
Deferred Tax (2767) (2355) (2764) (2355)
Excess Current tax provision for earlier years written back (net) - * - *
Profit/(loss) for the year (5263) (4610) (5271) (4693)
Attributable to:
Owners of the Company (5263) (4610) (5281) (4693)
Non-Controlling Interest - - 10 *
Other Comprehensive Income for the year net of tax 105 (249) 108 (255)
Attributable to:
Owners of the Company 105 (249) 107 (306)
Non-Controlling Interest - - 1 51
Total Comprehensive Income for the year (5158) (4859) (5163) (4948)
Attributable to:
Owners of the Company (5158) (4859) (5174) (4999)
Non-Controlling Interest - - 11 51
Profit /(loss) for the period (5263) (4610) (5281) (4693)
Balance at the beginning of the year (445) 4168 (595) 4102
Profit / (loss) available to owners for appropriation (5708) (442) (5876) (591)
Measurements of post-employment benefit obligations (63) (3) (63) (4)
Balance carried to Balance Sheet (5771) (445) (5939) (595)

*Amount is below the rounding off norm adopted by the Company/Group.

Review of Operations

During the year under review on standalone basis revenue fromoperations were H17363 mns as against H20202 mns in the previous year. The Companyreported loss after exceptional items and before tax of H8012 mns as against H6937 mns inthe previous financial year and net loss for the year was H5263 mns as against H4610 mnsin previous financial year. Other Comprehensive Income for the year (net of tax) is H105mns as against loss of H249 mns in the previous year. After considering othercomprehensive income total comprehensive loss stood at H5158 mns as against H4859 mns inthe previous year.

On a consolidated basis the revenue from operations was H20468 mns asagainst H22000 mns in the previous year. Loss before tax was H8014 mns as compared toH7020 mns in the previous year and loss for the year was H5271 mns as against H4693 mns inthe previous year. Other Comprehensive income for the year (net of tax) is H108 mns asagainst H255 mns loss in the previous year. After considering other comprehensive incometotal Comprehensive loss stood at H5163 mns as against H4948 mns in the previous year.

Business Review

During the year under review the Company bagged new orders amountingto H6243 mns in various vertical it operates - civil works for coal gasification unit ofTalcher Plant Talchar Civil Work for JSP Odisha Limited Construction of 2 Nos SingleFlue RCC Chimney PKG-2 Thermal Power Plant for BHEL Civil package for 1710 TPD OxygenPlant at JSPL Angul Civil Construction Works for blast furnace project JaipurCivil& Finishing Works of 22 &Crest Project 197 Units of Grand West project Bangaloreand several other ground engineering and industrial structures project making the orderbook to H56606 mns as on 31st March 2022.

Transfer to General Reserves

The Company has not transferred any amount to the General Reservesduring the current financial year.

Dividend

In view of the loss during the year under review your Directors do notrecommend any dividend for the Financial Year 20212022.

Material changes and commitments

There are no material changes or commitments affecting the financialposition of the Company which have occurred after March 31 2022 till the date of thisreport except as mentioned under 'financial restructuring plan' of this report.

Deposits

During the year under review the Company has not accepted depositsfrom the public falling within the ambit of Section 73 of the Companies Act 2013.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 isnot considered as deposits.

Financial Restructuring Plan

The Company is under financial stress and defaulted in servicing itspayment obligations including towards the banks and financial institutions (the"Lenders") who have extended various credit facilities to the Company. TheCompany is in need of funds to continue its operations as a going concern. As a part ofthe resolution plan for the Company the Board of Directors of the Company have been indiscussion with the Lenders for fund raising and for resolution of debt of the Company.Following the above the Company received a proposal ("Proposal") from SwanConstructions Private Limited ("Subscriber") a private limited companyincorporated under the laws of India having company identification number (CIN)U45309MH2017PTC302915 and having its registered office at Feltham House 2nd Floor 10 JN Heredia Marg Ballard Estate Mumbai -400 001 Maharashtra India for infusion ofcapital in the Company to meet its business requirement and for restructuring theobligations of the Company under the Facilities in accordance with the Reserve Bank ofIndia (Prudential Framework for Resolution of Stressed Assets) Directions 2019 issued bythe Reserve Bank of India vide its circular dated June 7 2019. The Proposal inter-aliarequires the Company as a part of the Resolution Plan to offer issue and allot to theSubscriber:

a. 57511000 (Five Crore Seventy Five Lakh Eleven Thousand) equityshares of the Company of the face value of H2 (Rupees Two) each ("EquityShares") at a price of H56.61/- (Rupees Fifty Six and Paisa Sixty One only) whichincludes a premium of H54.61/- (Rupees Fifty Four and Paisa Sixty One only) per EquityShare aggregating to H3255697710/- (Rupees Three Hundred Twenty Five Crore Fifty SixLakh Ninety Seven Thousand Seven Hundred and Ten Only); and

b. 17000000 (One Crore Seventy Lakhs) warrants("Warrants") each carrying a right exercisable by the Subscriber to subscribeto 1 (one) Equity Share per Warrant within 18 (eighteen) months from allotment. Aggregateconsideration for subscribing to Equity Shares upon exercise of the Warrants isH962370000/- (Rupees Ninety Six Crore Twenty Three Lakhs and Seventy Thousand only) ofwhich (a) H240592500/- (Rupees Twenty Four Crores Five Lakh Ninety Two Thousand andFive Hundred only) constituting 25% (Twenty Five per cent) of this aggregate considerationwill be paid on Warrant subscription by the Subscriber; and (b) the balance 75% (SeventyFive per cent) will be paid on the conversion of the Warrants by the Subscriber withineighteen months;

Accordingly the Investment Agreement dated 12th April 2022 wasexecuted by the Company with the Subscriber and special resolution for the aforementionedpreferential issue was passed in the extra ordinary general meeting of the shareholdersheld on 12th May 2022. As per the terms of the Investment Agreement the completion of theProposed Transaction (including the issuance and allotment of the Equity Shares andWarrants to the Subscriber as part of the Resolution Plan) is subject to the fulfilment ofall the conditions precedent set out under the Investment Agreement which include theLenders unanimously approving the Resolution Plan submitted by the Subscriber and theCompany inter alia involving restructuring obligations of the Company under theFacilities. However if the conditions precedent set out in the Investment Agreement arenot fulfilled the Investment Agreement will be terminated and the Proposed Transactionwill be cancelled.

Extract of the Annual Return

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

Number of meetings of the Board

Five meetings of the Board were held during the year. The details ofthe meetings of the Board are provided in the corporate governance report which formspart of this Report.

Audit Committee

The details pertaining to composition of Audit Committee are includedin the Corporate Governance Report which forms part of this report.

Directors' Responsibility Statement

The financial statements are prepared in accordance with IndianAccounting Standards (Ind AS) as prescribed under Section 133 of the Act read with Rule 3of the Companies (Indian Accounting Standards) Amendment Rules 2016. Accounting policieshave been consistently applied except where a newly issued accounting standard isinitially adopted or a revision to an existing accounting standard requires a change inthe accounting policy.

Your Directors to the best of their knowledge and belief and accordingto the information and explanations obtained by them make the following statements interms of section 134 (3)(c) & 134 (5) of the Companies Act 2013:

(a) In the preparation of the annual accounts for the financial yearended 31st March 2022 the applicable accounting standards have been followed along withproper explanation relating to material departures;

(b) that appropriate accounting policies were selected and consistentlyapplied and judgments and estimates were made that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the loss of the company for that period;

(c) That proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

(d) That the annual financial statements have been prepared on a goingconcern basis;

(e) That proper internal financial controls were followed by thecompany and such internal financial controls are reviewed by the Management andIndependent Internal Auditors and any material weakness noticed during such reviewremedial action is taken by the management so that internal control system as also itsimplementation is adequate and effective; and

(f) That proper systems to ensure compliance with the provisions of allapplicable laws were in place and that such systems were adequate and operatingeffectively.

Policy on Directors' Appointment and remuneration and other details

The Company's policy on Directors' appointment and remuneration andother matters provided in Section 178(3) of the Companies Act 2013 is hosted on theCompany's website at www.simplexinfra.com. The details relating to Nomination andRemuneration Committee are given in the Corporate Governance Report which forms part ofthis Report.

Particulars of Employees and other additional information

The details of remuneration as required to be disclosed under theCompanies Act 2013 and the Rules made thereunder are given in Annexure '1' forming partof this Board Report. Disclosures as contained in Rule 5 (1) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided at Table 1(a) of theAnnexure-1.

The information in respect of employees of the Company requiredpursuant to Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial 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 Actand the rules made thereunder the Report and Accounts are being sent to the shareholdersexcluding the aforesaid Table 1 (b). Any Shareholder interested in obtaining a copy of thesame may write to the Company Secretary.

The employees are neither relatives of any Directors of the Companynor hold 2% or more of the paid-up equity share capital of the Company as per Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

Any Shareholder interested in obtaining the details of employees postedoutside India and in receipt of a remuneration of H60 Lakhs per financial year or H5 lakhsper month or more may write to the Company Secretary of the Company.

Particulars of Loans Guarantees or Investments

The Company is engaged in the business of contract constructinginfrastructural facilities as specified in Schedule VI of the Companies Act 2013. Inaccordance with the exemption provided by Section 186 (11) to the companies engaged in thebusiness 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 bodycorporate/ person do not apply to the Company.

Related Party Transactions

All the related party transactions were in the ordinary course ofbusiness or at arm's length. The Company periodically review and monitors related partytransactions. A statement of all related party transactions is presented before the AuditCommittee on a quarterly basis.There are no materially significant related partytransactions made by the Company with Promoters Directors or Key Managerial Personneletc. 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 Companies Act 2013 in Form AOC 2 is not applicable.

However the details of the related party transactions are set out inNote 30 to the standalone financial statements forming part of this Annual Report.

The Company has a Policy on materiality of and dealing with RelatedParty Transactions as approved by the Board which is available at its websitewww.simplexinfra.com.

Risk Management

The Board of Directors of the Company has formed a Risk ManagementCommittee to frame implement and monitor the risk management plan for the Company. TheCompany also has in place a Risk Management Policy to identify and assess the key riskareas.The Members of the Risk Management Committee monitors and reviews the implementationof various aspects of the Risk management policy. Major risks identified by the Companyare systematically addressed through mitigating actions on a continuous basis. At presentno particular risk whose adverse impact may threaten the existence of the Company isvisualized.

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

Corporate Social Responsibility (CSR)

The Company has constituted a Corporate Social Responsibility Committeecomprising Mr. Rajiv Mundhra Executive Chairman as the Chairman of the Committee Mr. S.Dutta Whole-time Director and Mr. S.K. Damani Independent Director of the Company andhas framed a corporate social responsibility policy which is available at the website ofthe Company at www.simplexinfra.com.

The Company endeavors to fulfill its CSR responsibilities in itsidentified segments- education healthcare welfare of poor and girl child preservationof art and heritage. Construction industry as a whole is going through a critical time andis facing strong challenges in terms of liquidity. Since the Company is also aconstruction industry therefore it is not an

exception and is also facing the same critical situation as felt byothers in the sector. Moreover the Company has negative average net profit of threeimmediately preceding financial year therefore the Company was not required to spend anyamount 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 IndividualDirectors

During the year formal annual evaluation of the Board its Committeesand Individual Directors were carried out as per the framework laid down by the Board forformal annual evaluation of the performance of the Board Committees and IndividualDirectors. It includes circulation of questionnaires to all Directors for evaluation ofthe Board and its Committees which entails a wide range of parameters facilitating properevaluation 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 theperformance of Whole-time Directors performance of the Board as a whole and performanceof the Chairman of the Company taking into account the views of Executive Directors andNon-Executive Directors.

Performance evaluation of independent directors was done by the entireBoard excluding the independent director being evaluated.

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

Subsidiaries Associates & Joint Ventures

As on 31st March 2022 your Company has seven Subsidiaries namely(i)Simplex (Middle East) Limited UAE (ii) Simplex Infrastructures Libya Joint VentureCo. Libya (iii) Simplex Infra Development Private Limited (iv) Maa Durga ExpresswaysPrivate Limited (v) Jaintia Highway Private Limited (vi) Simplex (Bangladesh)PrivateLimited and (vii) PC Patel Mahalaxmi Simplex Consortium Private Limited three Associatesnamely (i)Shree Jagannath Expressways Private Limited (ii) Raichur Sholapur TransmissionCompany Private Limited and (iii) Simplex Infrastructures LLC Oman and two

Joint Venture Companies namely (i) Arabian Construction Co-SimplexInfra Private Limited and (ii) Simplex Almoayyed W.L.L

Pursuant to provisions of Section 129 (3) of the Act a statementcontaining 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 theconsolidated financial statements of the Company.

In accordance with Section 136 of the Companies Act 2013 the auditedfinancial statements including the consolidated financial statements and relatedinformation of the Company and audited accounts of each of its subsidiaries are availableon our website www.simplexinfra.com. These documents will also be available forinspection electronically up to the date of AGM. Members seeking to inspect such documentscan send an email to secretarial.legal@simplexinfra.com

Formation/Cessation of Company's Subsidiaries/ Associate/ Joint Venture

During the year under review no company has become or has ceased to besubsidiary joint venture or associate company.

Directors

The tenure of Mr. S. Dutta (DIN 00062827) as Whole-time Director of theCompany is due to expire on 31.08.2022.

Based on performance evaluation and the recommendation of theNomination and Remuneration Committee and subject to the approval of shareholders at theensuing annual general meeting the Board recommends appointment of Mr.S.Dutta for afurther period of 1 year effective from 1.09.2022. The proposal for re-appointmentincluding remuneration are set out in the notice convening the 104th annual generalmeeting.

The Company is in default in payment of dues to Banks/ FinancialInstitutions and Non-convertible debenture holders. In terms of Section 197 of theCompanies Act 2013 the Company has applied for permission to the Lead Banker for paymentof remuneration to the above Whole Time Directors. Till the approval is not received fromBanks/ Financial Institutions Debenture holders etc. the remuneration received by theabove whole-time directors will be held in Trust.

In accordance with the provisions of the Act Mr.D.N. Basu Whole-timeDirector retires by rotation and being eligible has offered himself for reappointment atthe ensuing annual general meeting. Based on performance evaluation and the recommendationof the Nomination and Remuneration Committee and subject to the approval of shareholdersat the ensuing annual general meeting the Board recommends his re-appointment.

Pursuant to the provisions of Section 149 of the Act and ListingRegulations Mr. Sheo Kishan Damani Mr. Pratap Kumar Chakravarty and Ms. Indira BiswasIndependent Directors of the Company have submitted their declaration that they meet withthe criteria of independence as provided in Section 149 (6) of the Act and are notdisqualified from continuing as Independent Directors of the Company.

All the Directors have submitted the requisite disclosures/declarations as required under the relevant provisions of the Companies Act 2013.

Appropriate resolution seeking your approval and brief resume / detailsfor re-appointment of Directors is furnished in the notice of the ensuing Annual GeneralMeeting.

Key Managerial Personnel

Mr. Rajiv Mundhra Executive Chairman Mr. S. Dutta Wholetime Director& CFO and Mr. B. L. Bajoria Sr. Vice President & Company Secretary continue to bethe Key Managerial Personnel of the Company in terms of the provisions of Section 203 ofthe Act.

Remuneration and other details of the said Key Managerial Personnel forthe financial year ended March 312022 are mentioned in the Corporate Governance Reportunder the heading 'compensation structure' in Nomination and Remuneration Policy of theCompany 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 materialorders passed by the Regulators/ Courts/Tribunals impacting the going concern status ofthe Company and its operations in future.

Internal Control Systems and their adequacy

The details in respect of internal control systems and their adequacyare included in the management discussion & analysis report which forms part of thisreport.

Vigil Mechanism (Whistle Blower Policy)

The Company has formulated a Whistle Blower Policy to provide a formalmechanism to Directors and employees to report their concerns about unethical behaviouractual 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 availthe 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 bythe Board as and when the complaints are received.

The Whistle Blower policy is available on the website of the Companywww.simplexinfra.com.

Secretarial Standards

The Company has generally complied with all applicable SecretarialStandards 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) consecutiveyears at the Annual General Meeting of the Company held on the 30th day of September2019 to hold office till the conclusion of the 106th Annual General Meeting to be held in2024. M/s. Chaturvedi & Co. Chartered Accountants continue to be the Auditors of theCompany.

M/s. Binayak Dey & Co. Chartered Accountants (Firm RegistrationNo.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 theExtra Ordinary General Meeting of the Company held on 12th day of May 2022 till theconclusion of 109th Annual General Meeting of the Company to be held in the year 2027.

Therefore M/s. Binayak Dey & Co. Chartered Accountants (FirmRegistration No.328896E) continue to be the Statutory Auditors of the Company.

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

Boards' Explanation on Auditors' Qualification on Financial Statements

The Board has duly examined the Statutory Auditors' Report to theaccounts and the Board's clarifications regarding the qualified opinions of the StatutoryAuditors on Financial Statements of the Company are given hereunder:

Standalone Financial Statements

I. 'Basis for Qualified Opinion' under Independent Auditors Report onthe Audit of the Standalone Financial Statements

a) We refer to Clause (a) of Basis for Qualified Opinion of IndependentAuditors Report where the Auditors have qualified- 'Note 41(a) to the accompanying Ind ASStandalone Financial Statements regarding old pending certifications of unbilled revenuespertaining to earlier years aggregating H3318 lacs (PY H2858 lacs) as per themanagement they are in regular discussion with the concerned customers for completion ofnecessary certification which often takes significant period of time and varies fromproject to project and also believes that above unbilled revenue will be billed andrealized in due course. In the absence of any convincing evidence to support themanagement's estimates of such future assumptions we are unable to comment whether theaforesaid balances are recoverable at this stage. The Management is of the view thatrecognition of unbilled revenue is based on Cost to Complete (CTC) estimates as perPercentage of Completion Method (POCM) under Ind AS 115 'Revenue from Contracts withCustomers'. This CTC is regularly reviewed and necessary changes are effected by theManagement. Certification of unbilled revenue by customers and acceptance of final billsby customers often takes significant period of time and varies from project to project. Atthis stage based on discussions with concerned customers the Management believes thatunbilled revenue of H3318 lacs of Auditors Qualified opinion on the Financial Statementsas at 31st March 2022 (PY H2858 lacs) included in H37460 lacs (PY H31661 lacs) asmentioned in note no. 41(a) of Financial Statements as at 31st March 2022 will be billedand realised in due course. The matter has been explained in note 41(a) forming part ofthe standalone financial statements.

b) We refer to Clause (b) of Basis for qualified opinion of IndependentAuditors Report where the Auditors have qualified- 'Note 38 to the accompanying Ind ASStandalone Financial Statements

1. Regarding certain old balances of trade receivables of H8216 lacs(PY H9598 lacs) due from customer against various projects are outstanding for aconsiderable period of time but management is of view these are good at this stage andrecoverable. In the absence of confirmation or any other convincing evidence to supportthe management's estimates of such future assumptions we are unable to comment whetherthe aforesaid balances are recoverable at this stage

2. Regarding old inventories aggregating H770 lacs (PY H1862 lacs)pertaining to certain completed projects are good and readily useable in the view ofmanagement. In the absence any convincing evidence to support the management's estimatesof such future assumptions we are unable to comment whether the aforesaid inventories aregood and readily usable at this stage.

3. Regarding retention monies amounting of H2890 lacs (PY H3320 lacs)which are receivable only after contracts are completed and clearance of final bill bycustomer and after expiry of defect liability period was pending for settlement in certaincompleted contracts. As informed by the management regularly reviewed the old outstandingreceivables and in the opinion of the management the retention amount is good andrecoverable. In the absence of confirmation or any other convincing evidence to supportthe management's estimates of such future assumptions we are unable to comment whetherthe aforesaid balances are recoverable at this stage.

The Management is of the view that Trade receivables aggregating H8216lacs of Auditors Qualified opinion on the Financial Statements as at 31st March 2022 (PYH9598 lacs) included in H11867 lacs (PY H12926 lacs) as mentioned in note no. 38 ofFinancial Statements as at 31st March 2022 from customers in respect of various projectsites are outstanding for a long period of time. At this stage based on discussions andcorrespondences with customers the management believes the above balances are good andrecoverable. Inventories aggregating H770 lacs (PY H 1862 lacs) as on 31st March 2022pertaining to certain completed project sites are readily usable. Retention monies duefrom

customers are receivable only after clearance of final bill bycustomers and after expiry of defect liability period after execution of contracts. In theopinion of the management such retention amounts aggregating H2890 lacs of AuditorsQualified opinion on the Financial Statements as at 31st March 2022 (PY H3320 lacs)included in H3151 lacs (PY H3704 lacs) as mentioned in note no. 38 of FinancialStatements as at 31st March 2022 of certain completed contracts as on 31st March 2022are good and recoverable. The matter has been explained in Note 38 forming part of thestandalone financial statements.

c) We refer to Clause (c) of Basis for qualified opinion of IndependentAuditors Report where the Auditors have qualified -'Note 39 to the accompanying Ind ASStandalone Financial Statements regarding loans and advances pertaining to earlier yearsamounting to H33478 lacs (PY H8022 lacs) as informed to us the company is in activepursuit and confident of recovery/settlement of these advances. In the absence ofconfirmation or any other convincing evidence to support the management's estimates ofsuch future assumptions we are unable to comment whether the aforesaid balances arerecoverable at this stage.

The Management is of the view that Loans and Advances amounting toH33478 Lakhs (PY H8022 lacs) as on 31st March2022 for which the Company is in activepursuit and confident of recovery/ settlement of such advances within a reasonable periodof time. The matter has been explained in Note 39 forming part of the standalone financialstatements.

d) We refer to Clause (d) of Basis for qualified opinion of IndependentAuditors Report where the Auditors have qualified- 'Note 36 to the accompanying Ind ASStandalone Financial Statements regarding company's default in payment of principal andinterest of H275193 lacs (PY H 181528 lacs) due on revolving facilities like cashcredit WCDL obtained from banks and also defaulted in repayment of interest and principalaggregating H82938 lacs (PY H43701 lacs) due and payable to Debenture holders on thenon-convertible debentures and term loan. The Management is of the view that the Companyhas incurred net loss of H52631 Lakhs for the year ended 31st March 2022 as also therewas default in payment of financial debts to its bankers and others amounting toH358131 Lakhs as on 31st March 2022. The Company is in the process of finalizing aresolution plan with its lenders having underlying strength of the Company's healthy orderbook position and future growth outlook. The Company is confident of improving the creditprofile including time bound realization of its assets arbitration claims etc. whichwould result in meeting its obligation in due course of time. Accordingly the Managementconsiders it appropriate to prepare these financial results on going concern basis.

The matter has been explained in Note 36 forming part of the standalonefinancial statements.

(e) We refer to Clause (e) of Basis for qualified opinion ofIndependent Auditors Report where the Auditors have qualified- 'The Company hasrecognized net deferred tax assets amounting to H61947 lacs as at March 31 2022 mainlyon account of carried forward unabsorbed tax losses unused tax credit and other taxabletemporary differences on the basis of expected availability of future taxable profit forutilization of such deferred tax assets which depends on successful implementation of theresolution plan as referred to in Note 13 of the accompanying Statement.

The Management is of the view that Deferred Tax Asset will be adjustedagainst future projected current tax liability. The Management is confident that theResolution Plan which is under process of finalization will be approved by the Lenders andthe said projected profit and current tax liability will be adjusted against the DeferredTax Asset.

The matter has been explained in Note 41(c) forming part of thestandalone financial statements.

The Board is of the opinion that the matter being elucidated in detailabove and also at Note no.36 38 39 41(a) and 41(c) of the standalone financialstatements are self-explanatory and do not call for further explanation.

II. 'Matter of Emphasis" under Independent Auditors

Report on the Audit of the Standalone Financial

Statements

a) We refer to Clause (a)(1) of Emphasis of Matter of IndependentAuditors Report where the Auditors have emphasized -'Note 41(a) to the accompanying IndAS Standalone Financial Statements regarding old pending certification of unbilledrevenues pertaining to earlier years aggregating H34142 lacs (PY H28803 lacs). Asinformed to us by the management they are in regular discussion with the concernedcustomers for completion of necessary certification which often takes significant periodof time and varies from project to project and also believes that above unbilled revenuewill be billed and realized in due course.'

The Management is of the view that recognition of unbilled revenue isbased 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 reviewedand necessary changes are effected by the Management. Certification of unbilled revenue bycustomers and acceptance of final bills by customers often takes significant period oftime and varies from project to project. At this stage based on discussions withconcerned customers the Management believes that unbilled revenue of H34142 lacs (PYH28803 lacs) as on 31st March 2022 which has been shown by the auditors under"Matter of Emphasis" and included in H37460 Lakhs (PY H31661 lakhs) asmentioned in the said note no. 41(a) will be billed and realised in due course. Thematter has been explained in note 41(a) forming part of the standalone financialstatements.

b) We refer to Clause (a)(2) of Emphasis of Matter of IndependentAuditors Report where the Auditors have emphasized -'Note 38 to the accompanying Ind ASStandalone Financial Statements regarding certain old balances of trade receivables ofH3651 lacs (PY H3328 lacs) due from customers against various projects are outstandingfor a considerable period of time but management is of view that these are good at thisstage and recoverable.'

The Management is of the view that Trade receivables aggregating H3651lacs (PY H3328 lacs) as on 31st March 2022 which has been shown by the auditors under"Matter of Emphasis" and included in H11867 Lacs (PY H12926 Lacs) as mentionedin the said note no. 38 from customers in respect of various project sites are outstandingfor a long period of time. At this stage based on discussions and correspondences withcustomers the management believes the above balances are good and recoverable. The matterhas been explained in Note 38 forming part of the standalone financial statements.

c) We refer to Clause (a)(3) of Emphasis of Matter of IndependentAuditors Report where the Auditors have emphasized-'Note 38 to the accompanying Ind ASStandalone Financial Statements regarding retention monies amounting of H261 lacs (PY H384lacs) which are receivable only after contracts are completed and clearance of final billby customer and after expiry of defect liability period is long pending for settlement. Asinformed to us the management regularly reviewed the old outstanding receivables and inthe opinion of the management the retention amount is good and recoverable.'

The Management is of the view that Retention monies due from customersare receivable only after clearance of final bill by customers and after expiry of defectliability period after execution of contracts. In the opinion of the management suchretention amounts aggregating H261 lacs (PY H384 lacs) which has been shown by theauditors under "Matter of Emphasis" and included in H3151 Lakhs (PY H3704lakhs) as mentioned in the said note no. 38 of certain completed contracts as on 31stMarch 2022 are good and recoverable. The matter has been explained in Note 38 formingpart of the standalone financial statements.

d) We refer to Clause (a)(4) of Emphasis of Matter of IndependentAuditors Report where the Auditors have emphasized- 'Bank balance confirmation of certaincurrent accounts of H141.31 lacs have not been received by us for March 31 2022.

Further certain loans closing balance have not been considered by therespective banks management has recognized interest liabilities on such outstandingbalances on provisional basis (as per last sanction letters).

e) We refer to Clause (a)(5) of Emphasis of Matter of IndependentAuditors Report where the Auditors have emphasized-'Note 41(b) to the accompanying Ind ASStandalone Financial Statements which describe the uncertainties and the managementassessment of possible impact of COVID-19 pandemic on its business operations financialassets contractual obligations and its overall

liquidity position as at March 31 2022. As informed to us themanagement will continue to monitor in future any material changes arising on financialand operational performance of the company due to the impact of this pandemic andnecessary measure to address the situation.'

The Management is of the view that due to lockdown/ restrictions asdeclared by Central and State Governments on account of further outbreak of Covid-19 timeto time operations in its many working sites/offices was slowed down which has an adverseimpact on the normal business operations of the Company for the quarter and year ended31st March 2022. The Company has also taken various cost reduction measures and also madeassessment of carrying value of its Assets. Based on such assessment no adjustment isrequired in these Financial Statements at this stage. The matter has been explained inNote 41 (b) forming part of the standalone financial statements.

f) We refer to Clause (b) of Emphasis of Matter of Independent AuditorsReport were the Auditors have emphasized-'As per Note 36 to the accompanying Ind ASStandalone Financial Statements the Company has incurred net loss of H52631 lacs (PYH46097 lacs) during the year ended March 31 2022 as also there is a default inrepayment of financial debts to its bankers and others amounting to H358131 lacs (PYH225229 lacs). The Company is in the process of formulating a resolution plan with itslenders underlying strength of the Company's business plan having a healthy order bookposition and future growth outlook. The Company is confident of improving the creditprofile including time bound realization of its assets arbitration claims etc. whichwould result in meeting its obligation in due course of time. Accordingly the Managementconsiders it appropriate to prepare these financial statements on going concern basis.'

The Management is of the view that the Company has incurred net loss ofH52631 lakhs for the year ended 31st March 2022 as also there was default in payment offinancial debts to its bankers and others amounting to H358131 lakhs as on 31st March2022.The Company is in the process of finalising a resolution plan with its lenders havingunderlying strength of the Company's healthy order book

position and future growth outlook. The Company is confident ofimproving the credit profile including time bound realization of its assets arbitrationclaims etc. which would result in meeting its obligation in due course of time.Accordingly the Management considers it appropriate to prepare these financial results ongoing concern basis. The matter has been explained in Note 36 forming part of thestandalone financial statements.

III. Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct") (Annexure 'B' to the Independent Auditors Report)

We refer to 'Qualified Opinion' of Report on the Internal FinancialControls over Financial Reporting of Independent Auditors Report were the Auditors havequalified:-

"According to information and explanation given to us and based onthe report issued by other auditors on internal financial controls over financialreporting the following material weakness have been identified as at March 312022

a. The Company's internal financial controls for evaluation ofrecoverability of old balances of unbilled revenue loans/ advances trade receivablesretention monies inventories at project sites and claims recoverable were not operatingeffectively as on March 31 2022 which could potential result in the company notrecognizing appropriate provision on the standalone financial statement in respect ofassets that are doubtful of recovery/ credit impaired.

b. The Company's internal financial controls for assessing the periodover which old balances of unbilled revenue loans/advances trade receivables retentionmonies and claim recoverable are expected to be recovered were not operating effectivelyas on March 31 2022 which could potentially result in the holding company notappropriately measuring the fair values of those financial assets.

All the qualifications mentioned above have been explained in detailhave been explained under 'Basis of Qualified Opinion' or ''Matter of Emphasis" underIndependent Auditors Report on the Audit of the Standalone Financial Statements' in theforegoing paragraph.

The Board is of the opinion that the matter being elucidated in detailabove and also at Note no.363841(a) and 41(b) of the standalone financial statements areselfexplanatory and do not call for further explanation.

Consolidated Financial Statements

All the qualifications on Consolidated Financial Results appearingunder clause (a) (b) (c) (d) and (e) under 'basis for qualified opinion' and alsoappearing under clause (a) (1) (a)(2)(a)(3)(a)(4) and (b) of ' matter of emphasis' andalso qualification appearing under clause (a) and (b) under 'qualified opinion' onInternal Financial Controls Over Financial Reporting are similar to that of StandaloneFinancial Results and have been explained in detail in the foregoing paragraph details ofwhich is appearing under 'Standalone Financial Statements'

The Board is of the opinion that the matter being elucidated in detailabove as appearing under 'Standalone Financial Statements' and also at Note no. 35373840(a) 40(b) and 40(c) of the consolidated financial statements is selfexplanatory and donot call for further explanation.

Secretarial Auditor and Secretarial Audit Report

Secretarial Audit for the FY 2021-2022 was conducted by Mr. Atul KumarLabh Practising Company Secretary (Membership No. FCS-4848 and C.P. No 3238) inaccordance with the provisions of Section 204 of the Act. The Secretarial Auditors' Reportis annexed herewith as "Annexure -3".

The Board is of the opinion that the matter is self-explanatory and donot call for further explanation.

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

Cost Audit

Pursuant to Section 148 of the Companies Act 2013 read with Companies(Cost Record & Audit) Amendment Rules 2014 as amended from time to time yourCompany has appointed M/s Mukesh Kumar & Associates Cost Accountants (FirmRegistration No:00140) to conduct the audit of cost records of the Company for thefinancial year 2021-2022.

As required under the Act a resolution seeking Members' approval forratification of remuneration of the Cost Auditors forms part of the notice convening theAnnual General meeting.

Consolidated Financial Statement

Your Company has prepared Consolidated Financial Statements inaccordance with Section 129 (3) of the Act and applicable accounting principles generallyaccepted in India including the Indian Accounting Standards specified in the Companies(Indian Accounting Standards) Rules 2015 (as amended) under Section 133 of the Act. TheConsolidated Statements reflect the results of the Company and that of its SubsidiariesJoint Ventures and Associates. As required by Regulations 33 of the Listing Regulationswith the Stock Exchanges the Audited Consolidated Financial Statements together with theAuditors Report thereon are annexed and form part of this Annual Report.

The Consolidated Financial Statement comprises of the financialstatements of the Company and those of its subsidiaries Joint Ventures and its AssociateCompanies. Further pursuant to the provisions of Section 136 of the Act the financialstatements of the Company including the consolidated financial statements and separateaudited accounts in respect of its subsidiaries are available on the website of theCompany www.simplexinfra.com.The financial statements of the Subsidiary Companies are keptopen for inspection by the Shareholders at the Registered Office of the Company and astatement containing the salient features of the Company's financial statement of theCompany's subsidiary/ associate/ joint ventures is attached as aforesaid

Energy Conservation Technology Absorption and Foreign ExchangeEarnings and Outgo

The particulars relating to conservation of energy technologyabsorption foreign exchange earnings and outgo as required to be disclosed under Section134(3)(m) of the Act read with Companies (Accounts) Rules 2014 are provided in theAnnexure - 4 to this Report.

Management Discussion and Analysis

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

Corporate Governance Report

A separate report on 'Corporate Governance' including a certificatefrom M/s. Binayak Dey & Co. Chartered Accountants Joint Statutory Auditors of theCompany confirming compliance of the Regulation 34 of the Listing Regulations is annexedhereto and forms a part of the report.

Capital Expenditure

During the year under review the Company has made additions of H47 mnsto its Fixed Assets consisting of only tangible assets.

Prevention of Sexual Harassment of Women

The Company has formulated a policy on Prevention of Sexual Harassmentof 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 ofrepresentatives has been set up to redress complaints relating to sexual harassment ifany received from women employees.

During the financial year ended March 31 2022 the Committee has notreceived any complaints pertaining to sexual harassment.

Acknowledgment

Your Directors would like to express their sincere appreciation for theco-operation and support received from the Financial Institutions Banks CustomersVendors Central and State Government Authorities Regulatory Authorities Stock Exchangesand the Company's all valued stakeholders. Your Directors also take this opportunity toplace on record their gratitude for the efforts and continuous hard work of all theemployees.

By Order of the Board
For Simplex Infrastructures Limited
Rajiv Mundhra
Executive Chairman
Place: Kolkata DIN:00014237
Date: May 30 2022

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