Dear shareholders,
India has emerged as the fastest growing major economy in the world and is expected to
be one of the top three economic powers of the world over the next 10-15 years, backed by
its strong democracy and partnerships. India's GDP is estimated to have increased 7 per
cent in 2018-19.
India moved up by 23 places in the World Bank's Ease of Doing Business Index 2018 and
got 77th rank. This is attributed to 6 reforms this year- starting a business, getting
electricity, construction permits, getting credit, paying taxes and trading across
borders. The maximum improvement was of 129 places in construction permits to reach 52nd
rank in 2018 as compared to 181st in 2017. Infrastructure sector is a key driver for the
Indian economy. The sector is highly responsible for propelling India's overall
development and enjoys intense focus from Government for initiating policies that would
ensure time-bound creation of world class infrastructure in the country. Infrastructure
sector includes power, bridges, dams, roads and urban infrastructure development. As India
continues to ascend in the rankings of the world's largest economies, its contribution to
global GDP growth momentum will also increase. India will also play an increasingly
important role as one of the Asia-Pacific region's major economic growth engines, helping
to drive Asian regional trade and investment flows. The infrastructure sector was one of
the major focus areas in the FY19 budget and saw massive spending on roads, railways,
water, irrigation, and urban infrastructure.
The engineering and construction industry plays an integral role in building the future
of the modern world amidst a number of potential obstacles such as material price
volatility, talent shortages, and the rapid pace of technological change. However, there
are reasons to be optimistic. Simplex have proven track record of successfully completing
construction of several Flyovers, Jetties, Bridges, Highways, Roads, Water Treatment
Plants, Stadiums, Buildings, Ports, Railway Station, etc. It stands for quality and
reliability of works, timely completion of projects, closest supervision of all sites,
best project management, quick response to customer needs and technical support services.
The Company takes pride not only in our professional commitments of infrastructure
development that help in upgrading the life of people but also equally value of its
commitment to society. The company has successfully executed over 3000 projects across all
construction verticals-piling & ground engineering, industrial, building &
housing, power-thermal, nuclear and hydel, power transmission, marine ports, roads,
railways, bridges and urban infra. It boasts of an uninterrupted Profit track record since
inception. At Simplex, our diversified projects in sectors as well as geographies liberate
us from any adversities in one particular segment or geography. We know that with this
strategy, we are uniquely positioned in picking up the right signals and to discover
what's next. Simplex embraces the latest technology on a continuous basis to modify, train
, adapt new ideas, new technologies and new skills to become agile in our responses to a
rapidly changing external environment. Simplex promotes the adoption of safe working
procedures and practices to ensure safety for both our individual employees and the
community.
Your Company performed reasonably well on all key parameters. Order In3 ows, which are
the lifeblood of any business with Engineering, Procurement and Construction (EPC) as its
core, came in at Rs.31938 mns in FY19. The Order Book as on 31st March, 2019 stood at
Rs.160203 mns which gives us strong revenue and margin visibility for the next few years.
Revenues in FY19 have clocked in at Rs.60415 mns. PBT stood at Rs.1837 mns in FY19
representing a substantial growth of 22% over FY18. Even though awarding of infrastructure
projects continued to be unpredictable in terms of timelines and executions were impacted
in 2018-19 due to disruptions caused by implementation of GST as well as bottlenecks in
some projects due to delayed customer payments clearances and land acquisition, your
Company has fared reasonably well. Needless to emphasize that Human Resource is the
backbone of any organization. It is the best resource an organization can have, nourish
and motivate, which can make-up for all other resources which are in short supply. In
Simplex, the focus is always on continuous skill development and promoting core values
which would inspire the employees to achieve excellence in all endeavors and maximize the
stakeholder's value. It gives me great pleasure to inform you that the Board of Directors
has recommended a Dividend of Re.0.50 per share. In April 2018, the Company issued and
allotted 36,09,261 convertible equity warrants for an amount not exceeding Rs.2000 mns to
Promoters and in January 2019, 6,02,000 Equity Shares, having Face Value of Rs. 2/- each,
were allotted to one of the Warrant Holder pursuant to conversion of the aforesaid
warrants. QIP Issue made by the Company in May, 2018 received good response from the
Institutional Investors and the Company had successfully raised an amount of Rs.4000 mns.
This reflects enriched investors' confidence in the credentials of your organization.
Government of India, has ushered in various new and novel policy initiatives which are
bound to have long-term positive effect on Indian economy viz. Make-in-India, Swachh
Bharath Abhiyaan, 100 Smart Cities, Jan-Dhan Yojana, Digital India, Housing for all
movement by 2022 etc. Such initiatives shall lead to creation of a socially and
economically empowered nation promoting inclusive growth. While the Government has taken
several concrete measures, there is still a long way to go. We hope that the government
looks into some of the key concerns raised by the industry and addresses the same soon. To
bring back growth in the sector which is so vital to any developing economy, we expected
Government to impart industry status to the sector which would enable developers to cut
capital costs and pass on the benefits to consumers.
On behalf of the Board, I am grateful to all our shareholders for your trust and
confidence in us, to stay with us as we move forward in this journey. My gratitude to my
colleagues on the Board for their valuable guidance. I also convey my sincere thanks to
all our employees, customers, bankers and all other business associates and the Government
and various authorities for their continued support, interest and confidence in the
Company and its management.
Thanking you,
Rajiv Mundhra
Executive Chairman