Simplex Realty’s record is technically unqualified, but audit emphasis of matter on two fully eroded associates in FY2026 and a related-party funding base make the clean opinion feel thin. The FY2026 loss was driven by a deferred tax asset write-down, while past profits leaned on a land sale.
Key findings
- A deferred tax asset write-down turned a modest pre-tax loss into a substantial net loss
Major- The company carried a deferred tax asset on unused tax losses of 3.53 crore as at 31 March 2025, which fell to ₹18.03 lakh a year later, driving the net loss for FY2026. For five straight years through FY2025, the company had asserted “reasonable certainty” of generating sufficient taxable income to utilise those losses. The FY2024 profit included a surplus of ₹4.24 crore from the sale of land at Gondia, shown as an exceptional item. - Contingent liabilities exceed ₹89 crore, led by a property tax demand and an unchanged stamp duty claim
Minor- An MCGM property tax demand of ₹48.78 crore plus a penalty of ₹23.56 crore rests on potential FSI of open land; the Bombay High Court directed the company to deposit 50%, and the company deposited that amount by 18 November 2024. A separate demand of ₹17.16 crore from the State Revenue Department for transfer of flats in the “Planet Godrej” project has remained unchanged from FY2021 through FY2026. - A new redevelopment subsidiary sits alongside two balance-sheet zombies with unrecognised losses
Minor- Simplex Realty incorporated Simplex Modern Homes Private Limited on 25 March 2025, transferred its Bandra Anand Vihar redevelopment project to it, and on 25 July 2025 agreed to sell a 49% stake to Modern India Ltd while retaining 51%. Meanwhile, the two legacy associates have had accumulated losses fully eroding their net worth every year from FY2021 through FY2026, and Simplex Realty’s share of losses in Simplex Papers has exceeded its interest, so no further losses are being recognised in consolidation. - Promoter-family directors seek re-appointment with rising pay despite persistent operating losses
Minor- Shri Nandan Damani’s total remuneration rose from ₹59.77 lakh in FY2022 to ₹64.60 lakh in FY2026, while the company reported negative operating profit margins every year from FY2021 through FY2026. His son Shri Sanjay N Damani’s pay rose from ₹10.88 lakh to ₹13.99 lakh over the same period, and his monthly salary was revised upward to ₹1,10,000 upon re-designation as Joint Managing Director effective 1 June 2024. Their re-appointments require special resolutions because aggregate promoter-group executive director remuneration may exceed 5% of net profits under SEBI rules.
What to watch
- AGM vote on promoter-family re-appointments. The 113th AGM, scheduled 5 August 2026, will vote on special resolutions for Shri Nandan Damani as Chairman & MD and Shri Sanjay N Damani as Joint MD, each for three-year terms.
- Going-concern assumption for legacy associates. Simplex Papers and Simplex Mills had fully eroded net worth as at 31 March 2026, with no impairment recognised on loans recoverable from Simplex Papers by Simplex Mills.
- Terms and recovery of FY2026 unsecured loans. The auditor notes these were granted without stipulating any repayment schedule or interest payment terms.
- Realisation of the remaining deferred tax asset. The company carried ₹18.03 lakh of deferred tax asset on unused tax losses as at 31 March 2026, against a backdrop of continued pre-tax losses.
Bottom line: This is a disclosed record with unqualified audit opinions, but the clean label rests on management’s going-concern assumptions for two associates whose net worth has been gone for six years. The company is funded by a related-party deposit base, past profits were shaped by a land sale, and the FY2026 loss was delivered by a deferred tax asset write-down. Watch the AGM vote on promoter pay, the fate of the ₹48 crore ICD base, and whether the new redevelopment subsidiary generates enough substance to offset the weight of the legacy associates.