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Simplex Projects Ltd.

BSE: 532877 Sector: Infrastructure
NSE: SIMPLEX ISIN Code: INE898F01018
BSE 00:00 | 10 Jun Simplex Projects Ltd
NSE 05:30 | 01 Jan Simplex Projects Ltd
OPEN 11.33
PREVIOUS CLOSE 11.33
VOLUME 1100
52-Week high 11.33
52-Week low 0.00
P/E 51.50
Mkt Cap.(Rs cr) 14
Buy Price 14.10
Buy Qty 900.00
Sell Price 11.33
Sell Qty 1901.00
OPEN 11.33
CLOSE 11.33
VOLUME 1100
52-Week high 11.33
52-Week low 0.00
P/E 51.50
Mkt Cap.(Rs cr) 14
Buy Price 14.10
Buy Qty 900.00
Sell Price 11.33
Sell Qty 1901.00

Simplex Projects Ltd. (SIMPLEX) - Director Report

Company director report

Dear Members

It is our pleasure to present the 27th Annual Report of your Companytogether with the Audited Financial Statements for the financial year ended 31stMarch 2017.

1. FINANCIAL RESULTS

The performance of the Company for the financial year ended 31st March2017 compared with the previous financial year is summarized below: (Rs. in lacs)

Year ended Year ended
31st March 2017 31st March 2016
Total Income 49718.64 42671.30
Less: Expenses 49686.41 51022.68
Profit / (Loss) before exceptional and extra-ordinary items 32.23 (8531.38)
Exceptional Items 0 (400.50)
Profit before extra-ordinary items & tax 32.23 (8751.88)
Less: Provisions for Taxation (241.42) (218.37)
Profit After Tax 273.65 (8533.51)
Add: Balance brought forward from last year (4107.72) 4425.79
Profit Available For Appropriation 3834.07 (4107.72)
Less: Proposed Dividend (including tax on dividend) NIL NIL
Tax thereon NIL NIL
Transfer to General Reserve NIL NIL
Balance Profit after appropriation (3834.07) (4107.72)

2. OPERATIONAL PERFORMANCE :

On Consolidated basis for the financial year ended March 31 2017 your Company hasachieved a Gross Turnover of Rs 49996.12 Lacs as against Rs 43227.12 Lacs for theprevious period. The turnover of the Company has thus shown an increment of 15.66%.

On Standalone basis your Company has achieved a Gross Turnover of Rs 49718.64 Lacsfor the financial year 2016-17 which has shown an increment by 16.52% over last year (Rs42671.30 Lacs in financial year 2015-16). The Company has incurred a profit of Rs 273.65Lacs (after interest and depreciation charges) as against a loss of Rs 8533.51 Lacs forthe previous year thus showing an increase of Rs 8807.16 Lacs.

The financial year under review witnessed increase in cost of Subcontracting and OtherSite Expenses and also Administrative Expenses resulting in escalation in total cost.Moreover due to competitive pressure Infrastructure development in India has been goingthrough a very difficult phase over the last few years affecting the overall performance.Consequently players in the construction space especially those in business of buildinglarge infrastructure for the state and central governments have had to face severefinancial operational and regulatory challenges such as very tight liquidity conditionsserious stress on cash flows as well as other sundry issues.

The operations of the company's branch at Libya was stopped due to prevailingpolitical situation. However in view of the prolonged uncertainty of resumption thecompany is proceeding with Arbitration. The overseas order for construction work at Kuwaitis going on smoothly.

Our focus area continues to be the execution of civil engineering projects withspecialization in piling building bridge and flyovers. Further your Company had beensuccessful in bagging various contracts for execution of Infrastructure Projects. TheCompany expects substantial increase in the order book position.

3. DIVIDEND :

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

During the year under review no amount which remained unclaimed and unpaid dividendfor a period of seven years was transferred to Investor Education & Protection Fund.

4. RESERVES

There is no amount available for transfer to Reserves for the year ended March 312017.

5. SUBSIDIARY ASSOCIATES & JOINT VENTURES

As on 31st March 2017 Your Company has one Subsidiary namely SimplexAgri-Infra Services Pvt. Ltd. two Associates namely (i) Simpark Infrastructure Pvt Ltd.(ii) Simplexprojects Road & Highway Construction Pvt Ltd and two Joint Ventures i.e.(i) Simplex Projects (Netherlands) Cooperative U.A. (ii) Triveni Engicon Pvt Ltd –Simplex Projects Limited.

Simplex Agri-Infra Services Pvt. Ltd. which had been awarded contracts by FCI toconstruct and maintain warehouses at different parts of Jammu & Kashmir and HimachalPradesh on Build own and Operate/ Lease basis is running its commercial operation.

The Consolidated Financial Statements comprises the financial statements of the Companyand its subsidiary Joint Ventures and its Associate Companies. Pursuant to provisions ofsection 129(3) of the Act a statement containing salient features of the financialstatements of the Company's subsidiaries in Form AOC-1 is appended to this Report asAnnexure I. The Consolidated Financial Statements of your Company are prepared inaccordance with the Accounting Standard 21 issued by the Institute of CharteredAccountants of India.

6. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(3)(c) read with Section 134(5) of theAct with respect to Directors' Responsibility Statement the Directors hereby confirmthat:-

a) In the preparation of the annual accounts for the financial year ended March 312017 the applicable accounting standards read with requirements set out under ScheduleIII to the Act have been followed and there are no material departures from the same;

b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2017 and of the profitand loss of the Company for the year ended on that date;

c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; d)The Directors have prepared the annual accounts on a going concern basis;

e) The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

Based on the framework of Internal Financial Controls and compliance systemsestablished by the Company work performed by the Internal Statutory and SecretarialAuditors and the reviews performed by management and the audit committee of the Companythe board is of the opinion that the Internal Financial Controls of the Company wereadequate and effective during FY 2016-17.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of your Company consists of six directors as on 31st March 2017with an optimum mix of Executive and Non-executive Directors. Details of the compositionof the Board have been disclosed in details in the Corporate Governance Report whichforms an integral part of this report.

Mr. Sudarshan Das Mundhra Whole-time Director of the Company retires by rotation interms of Section 152(6) of the Act read with the Articles of the Company at theforthcoming Annual General Meeting and being eligible offers himself for reappointment.

During the year under review Mr. Pradeep Kumar Mishra and Mr. Abirlal Das Guptaresigned from the post of Chief Financial Officer and Company Secretary as on 13thNovember 2016 and 17th March 2017 respectively.

As on the date of this report Mr. Sudarshan Das Mundhra and Mr. Vikram Kumar Mishrahas been appointed as the Chief Financial Officer and Company Secretary of the Companyrespectively.

All the directors of the Company including the Independent Directors have disclosedtheir concern and interest in other companies bodies corporate firms and otherassociation of individuals including the shareholding in Form MBP-1. Further all theIndependent Directors have confirmed that they meet the criteria of independence as laiddown under Section 149(6) of the Act read with the Regulation 16(1)(b) of the SEBIListing Regulations.

Pursuant to SEBI Listing Regulations your Company has framed and adopted a Policy onFamiliarization of the Independent Directors. Accordingly the Company had arranged afamiliarization program for the Independent Directors of your Company on 31st December2016. The Independent Directors met with some of the Senior Technical Team members anddiscuss over the existing projects of the Company and working conditions at various sitesof the Company. The details of the familiarization program as required under Regulation 46of SEBI (LODR) Regulations 2015 is available on the website of the Company.

8. BOARD EVALUATION

The Nomination & Remuneration Committee of the Company has framed a Policy onevaluation of the Board evaluation of Board Committees their functioning and evaluationof individual Director. The Company believes that it is the collective effectiveness ofthe Board and the senior management that determines the Company performance.

The Board of Directors had carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by SEBI Listing Regulations. Theperformance of the Board was evaluated after seeking inputs from all the directors and thesenior management of the Company on the parameters derived from Board's core role oftrusteeship to protect and enhance shareholder value as well as fulfill expectations ofother stakeholders through strategic supervision. Board performance is assessed againstthe role and responsibilities of the Board as provided in the Act and the SEBI ListingRegulations.

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

The Board as well as the Nomination and Remuneration Committee of the Company reviewedthe performance of the individual directors on the basis of the role played by eachDirector as a member of the Board contribution to the Company relationship with thestakeholders peer evaluation etc. In addition the Chairman and Managing Director wasalso evaluated on the key aspects of his role.

Pursuant to Clause VII of the Schedule IV to the Act in a separate meeting theIndependent Directors of the Company evaluated the performance of non-independentdirectors performance of the board as a whole and performance of the Chairman takinginto account the views of the Non-independent Directors and the senior management. Thesame was discussed in the board meeting that followed the meeting of the independentdirectors at which the performance of the board its committees and individual directorswas also discussed. Performance evaluation of Independent Directors was done by the entireboard excluding the director being evaluated.

9. REMUNERATION POLICY

Pursuant to Section 178(1) of the Act the Company had constituted Nomination andRemuneration Committee to perform such functions as enumerated in the Act and the SEBIListing Regulations. Your Company follows the Policy on Remuneration of Directors andSenior Management Employees as approved by the Nomination and Remuneration Committee. Adetailed report on the same is given in the Corporate Governance Report which forms anintegral part of this report.

10. MEETINGS OF THE BOARD

The Board of Directors met 7 (Seven) times during the financial year 2016-17 inaccordance with the provisions of the Act and the rules made there under. The details ofthe Board meetings and the attendance of Directors are provided in the CorporateGovernance Report which forms a part of this report.

The intervening gap between the Meetings was within the stipulated period prescribedunder the Act and the principles & guidelines prescribed by the SecretarialStandard-1 issued by The Institute of Company Secretaries of India has also beenfollowed by the Company.

11. AUDIT COMMITTEE

Pursuant to Section 177 of the Act and the SEBI Listing Regulations the AuditCommittee of your Company consists of majority of Independent Directors and the detailspertaining to composition and meetings of the committee are included in the CorporateGovernance Report which forms part of this report. The Board has accepted all therecommendations made by the Audit Committee during the financial year 2016-17.

12. AUDITORS & AUDIT REPORTS:

Statutory Auditors

In terms of the provisions of Section 139 of the Act read with the Companies (Audit andAuditors) Rules 2014 an audit firm can hold office as statutory auditors for two terms offive consecutive years each i.e. for a maximum period of ten years. They can bere-appointed after a cooling period of five years thereafter. In computing the period often years the period for which the statutory auditors would have held office before thecommencement of the Act i.e. before April 1 2014 is also to be taken into account.

M/s. Chaturvedi & Company has been acting as the statutory auditors of the Companyfor more than ten years and to comply with the provisions of the Act a new auditor mustbe appointed in their place to act as Statutory Auditors after the conclusion of 27th AGM.The Board has recommended the appointment of M/s. H.S. Bhattacharjee & Co. CharteredAccountants Kolkata as the Statutory Auditors of the Company in place of M/s. Chaturvedi& Company to hold office from the conclusion of the ensuing Annual General Meetinguntil the conclusion of the 32nd Annual General Meeting of the Company subjectto ratification by the members at every AGM. The resolution seeking shareholders' approvalon this item is included in the Notice convening the AGM.

The Company has received a confirmation from M/s. H.S. Bhattacharjee & Co. CharteredAccountants that their appointment if made at the 27th AGM will be inaccordance with Sections 139 and 141 of the Act and Rules made thereunder. Accordinglythe Members are requested to approve the appointment of the Statutory Auditors at the 27thAGM.

The qualifications in the Auditors' Report read with Annexure referred to in Paragraph7 of the Auditors' Report are repetitive and not significant in nature. Comments underAnnexure to the Auditors' Report are self-explanatory and therefore require no furthercomments from the Board of directors.

Cost Auditors

In terms of Section 148 of the Act read with the Companies (Audit and Auditors) Rules2014 as amended from time to time on recommendation of the Audit Committee the Board ofDirectors have appointed M/s. S. Chhaparia & Associates Cost Accountants Kolkata(Firm Registration No. 101591) as Cost Auditors of the Company to conduct the audit ofcost records of your Company for the financial year 2017-18. The remuneration of the CostAuditors has been approved by the Board on the recommendation of the Audit Committee andthe requisite resolution for ratification of remuneration of Cost Auditors by the membershas been set out in the Notice of the 27th Annual General Meeting of theCompany.

Secretarial Auditor

Pursuant to Section 204 of the Act the Board of Directors had appointed Mr. Asit KumarLabh of M/s. A.K. Labh & Co. Company Secretaries Kolkata to conduct the secretarialaudit of the Company for the financial year 2016-17. The Secretarial Audit Report for thefinancial year 2016-17 is appended to this Report and the matter on which the emphasis hasbeen laid down in the Report has been duly taken care of.

13. LOANS GUARANTEES OR INVESTMENTS

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

14. RELATED PARTY TRANSACTIONS

None of the transactions with the Related Parties fall under the ambit of Section188(1) of the Act since all the agreement and transactions were in the ordinary course ofbusiness and on an arm's length basis. None of the transactions could be considered asmaterial in accordance with the policy of your Company on Materiality of Related PartyTransactions which is available on the Company's website. Further none of thetransactions with related parties required approval of the shareholders as the same werewithin the prescribed limits under Section 188(1) of the Act and the Rules framed thereunder as amended from time to time.

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

15. DEPOSITS

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

16. INTERNAL FINANCIAL CONTROLS

Your Company has adequate Internal Control Systems and Procedures in place foreffective and smooth conduct of business and to meet exigencies of operation and growth.The Financial Statements of the Company are prepared through the process which hasautomated as well as manual controls to ensure accuracy of recording all transactionswhich have taken place during any accounting period and the resultant financial positionat period end. Management Information System has been established which ensures thatadequate and accurate information is available for reporting and facilitating decisionmaking.

The Company has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies safeguarding ofits assets prevention and detection of fraud and errors accuracy and completeness of theaccounting records and timely preparation of reliable financial disclosures.

Internal Audit pursuant to Section 138 of the Act is conducted by independent firm ofauditors. Internal Auditors regularly checked the adequacy of the system and theirobservations were reviewed by the management and remedial measures as necessary wereundertaken. Internal Auditors directly report to the Chairman of the Audit Committee ofthe Company to maintain its objectivity and independence.

17. MATERIAL CHANGES & COMMITMENTS

Except as disclosed elsewhere in this report there have been no material changes orcommitments which could affect the financial position of your Company between the end ofFinancial Year 2016-17 and the date of this report.

18. SIGNIFICANT AND MATERIAL ORDERS PASSED BY

THE REGULATORS/COURTS.

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

19 HUMAN RESOURCE

Your Company treats its "Human Resource" as one of its most important assets.It has always provided a congenial atmosphere for work to all its employees that are freefrom discrimination and harassment. During the year under review it invested inattraction retention and development of talent on an ongoing basis.

Your Company has zero tolerance towards sexual harassment at the workplace. Tostrengthen the security against sexual harassment as required under Sexual Harassment ofWomen at Work Place (Prevention Prohibition and Redressal) Act 2013 the Company hasadopted "Anti-Sexual Harassment Policy" and also constituted an InternalComplaints Committee (ICC). No complaints with allegation of any sexual harassment werereported during the year under review.

Particulars of employees as required under Section 197(12) of the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedas Annexure III

20. CHANGES IN THE SHARE CAPITAL OF THE COMPANY

During the financial year 2016-17 the Company has not issued any Equity Shares.Accordingly the details of Shares issued with Differential Voting Rights Issue of SweatEquity Shares and Issue of Employee Stock Option Scheme are not applicable on yourCompany.

21. VIGIL MECHANISM :

In terms of Section 177(9) & (10) of the Act Vigil Mechanism for directors andemployees to report genuine concerns has been established by your Company. The Board hasadopted a Whistle Blower policy to promote reporting of any unethical or improper practiceor violation of the company's Code of Conduct or complaints regarding accountingauditing internal controls or disclosure practices of the company. It gives a platform tothe whistle blower to report any unethical or improper practice (not necessarily violationof law) and provides a formal process for all directors employees and vendors to approachthe Chairman of the Audit Committee and make protective disclosures about any concern. TheVigil Mechanism Policy has been uploaded on the website of the Company and is reviewed bythe Audit Committee as well as the Board at regular intervals.

22. CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance andadheres to the Corporate Governance requirements as stipulated by the Act and SEBI ListingRegulations. The report on Corporate Governance as stipulated under Regulation 34(3) readwith the Schedule V of the SEBI Listing Regulations together with the Certificatereceived from Mr. A K Labh Practising Company Secretary (FCS-4848/ CP-3238) is attachedand forms an integral part of this Annual Report.

23. MANAGEMENT DISCUSSION AND ANALYSIS

In terms of the provisions of Regulation 34(2) of the SEBI Listing Regulations theManagement Discussion and Analysis for the year ended 31st March 2017 isattached and forms an integral part of this report.

24. RISK MANAGEMENT

The Company is exposed to uncertainties owing to the sectors in which it operates.These uncertainties create new business opportunities with inherent risks. The Company hasbeen proactive in adopting new and effective tools to protect the interests of itsstakeholders. The Company's Risk Management processes focus on ensuring that the risks areidentified on a timely basis and reasonably addressed.

The Directors of your Company has formed a Risk Management Committee and also adopted apolicy on the same which enables the Company to proactively manage uncertainties fromchanges in the internal and external environment and also capitalize on the opportunities.The Audit Committee has additional oversight in the area of financial risk and controls.The Risk management Policy of the Company is published in the Company's website.

25. EXTRACT OF ANNUAL RETURN:

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

26. CONSERVATION OF ENERGY TECHNOLOGY

ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

A. CONSERVATION OF ENERGY:

a) Energy Conservation measures taken:

All efforts are made to conserve and optimize use of energy continuous monitoring andimprovement in maintenance and distribution systems and through improved operationaltechniques. Energy conservation continues to receive priority attention at all levels.

Company is continuing with energy saving measures initiated earlier like usage of moresophisticated Machinery which can do more work in lesser time and thereby reducing therequirement of equipment that programmes to maximize saving in two specific areas:

i) Electric Energy

ii) Fuel oil consumption

In this industry 99% equipments are powered by either electrical motor or by fuel oilpowered engines. The scope of energy efficiency in our industry will be energyconservation through well planned actions such as quality preventive maintenancemachinery up-gradation modernization and introduction of sophisticated control system.Fuel oil consumption has been reduced by implementing vigorous preventive maintenancemeasures and introducing new fuel efficient engines coupled with newer machinery andreducing idle running of equipments.

b) Additional investments and proposals if any being implemented for reduction ofconsumption of energy:

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

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

Energy conservation measures continue to reduce the production cost.

d) Total energy consumption and energy consumption as per unit of production as perprescribed Form A of the annexure in respect of industries specified in Schedule thereto:

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

B. TECHNOLOGY ABSORPTION:

i. Research and Development:-

The Company is not having any Research and Development activity at present.

ii. Technology Absorption Adoption and Innovation: -

Efforts in brief made towards technology absorption adoption and innovation:

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

Benefit derived as a result of the above efforts:

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

Technology imported during the last five years:

a) Technology imported : Nil

b) Year of import : Not applicable

c) Has the technology been fully absorbed : Not applicable

C. Foreign Exchange Earnings (Rs in lacs)

Particulars As on 31st As on 31st
March 2017 March 2016
On Contract Work
(Gross Billing at
Overseas Branch) 16773.04 12318.12

D. Foreign exchange outgo (Rs in lacs)

Particulars As on 31st March 2017 As on 31st March 2016
Travelling 147.45 157.88
Contract Expenses 17028.44 13228.50
(Overseas Branch)

27. CORPORATE SOCIAL RESPONSIBILITY

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

28. LISTING WITH STOCK EXCHANGES:

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

29. ACKNOWLEDGEMENTS

Your Directors like to express their sincere appreciation for the co-operation theCompany has received from the Statutory Authorities Banks Other Financial InstitutionsStakeholders and Customers during the year under review. Your Directors also wish to thankand place on record their deep appreciation for the committed services by the Company'sexecutives employees and workers. For and on behalf of the Board of Directors

B.K.Mundhra
Chairman & Managing Director
(DIN-00013125)
Registered Office :
12/1 Nellie Sengupta Sarani
Kolkata - 700 087
Date: 14th August 2017

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