The file Makefile included in the Simulation directory does not have the standard Makefile format for make/gmake. Instead, the setup script generates a complete compilation Makefile from the machine/system specific one (see Sec:SetupMakefile) and the unit Makefiles (see Sec:unitMakefiles).
In general, standard module and routine dependencies are figured out by the setup script or are inherited from the directory structure. The Makefile for this example is very simple, it only adds the object file for Simulation_data to the Simulation unit Makefile. The additional object files such as Simulation_init.o are already added in the directory above SimulationMain.