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Simmonds Marshall Ltd.

BSE: 507998 Sector: Engineering
NSE: N.A. ISIN Code: INE657D01021
BSE 00:00 | 01 Feb 53.00 0.90
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NSE 05:30 | 01 Jan Simmonds Marshall Ltd
OPEN 52.10
PREVIOUS CLOSE 52.10
VOLUME 381
52-Week high 71.20
52-Week low 37.65
P/E
Mkt Cap.(Rs cr) 59
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 52.10
CLOSE 52.10
VOLUME 381
52-Week high 71.20
52-Week low 37.65
P/E
Mkt Cap.(Rs cr) 59
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Simmonds Marshall Ltd. (SIMMMARSHALL) - Auditors Report

Company auditors report

To The Members of Simmonds Marshall Limited Opinion

We have audited the accompanying standalone financial statements of SimmondsMarshall Limited ("the Company") which comprises of Balance Sheet as at 31stMarch 2021 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then endedand notes to the financial statements including a summary of significant accountingpolicies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (the Act) in the manner so required and give a true and fairview in conformity with the Indian Accounting Standards prescribed under section 133 ofthe Act read with Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and accounting principles generally accepted in India of the stateof affairs of the Company as at 31st March 2021 its loss (including othercomprehensive income) changes in equity and cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (ICAI) togetherwith the ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Emphasis of Matter

We draw your attention to Note 40 of the standalone financial statements with regardto management's assessment about the impact on Company's operations due to COVID 19pandemic outbreak and lockdown. The management apart from considering the internal andexternal information up to the date of approval of these standalone financial statementsthe Company has also performed sensitivity analysis on the assumptions used inter-aliaincluding in respect of realisability of inventories of Rs.5319.21 lakhs recoverabilityof trade receivables of Rs.2509.13 lakhs and good will of Rs. 267.30 lakhs andutilization of deferred tax assets of Rs.162.21 lakhs and based on current indicators offuture economic conditions the Company expects to recover the carrying amount of theseassets.

The impact of the global health pandemic may be different from that estimated as at thedate of approval of these financial statements. Considering the continuing uncertaintiesthe Management will continue to closely monitor any material changes to future economicconditions.

Our report is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr. No. Key Audit Matters Auditor's response
1. Inventory – existence and valuation Audit procedures performed:
As at 31st March 2021 the Company held inventories of Rs. 5319.21Lakhs. [Also refer Note 9 of the standalone financial statements] Inventories existence and valuation was an audit focus area because of the frequency of physical verification of inventories during the year by the Company. We have performed following alternative audit procedures over inventory existence and valuations.
The Company shifted its factory from Kasarwadi to Chakan during the year and physical verification of inventory was carried out only in February2021 by an independent Chartered Accountant Firm. Material discrepancies were observed between the physical stock and book stock and the same has been duly adjusted in the books. (a) Ensuring the effectiveness of the design implementation and maintenance of controls over changes in inventory to determine whether the conduct of physical inventory verification at a date other than the date of the financial statement is appropriate and testing of those controls whether those have operated effectively.
In view of the above the matter has been determined to be a key audit matter. (b) Performing procedures to ensure that the changes in inventory are properly recorded.
(c) Performing substantive analytical procedures to test the correctness of inventory existence and valuation.
(d) Testing of accuracy of inventory reconciliations with the general ledgers at period end including test of reconciling items.
(e) Verifying the entries passed in the books of account and discussing with the management in respect of discrepancies found between physical verification and book records.
Also refer clause (ii) of Annexure A.
The procedures performed gave us a sufficient evidence to conclude about the inventory existence and valuation.
2. Trade receivables-collectability and certainty Audit procedures performed:
As at 31st March 2021 the Company carried trade receivables of Rs. 2509.13 lakhs. [Also refer Note no. 10 of the standalone financial statements] We have performed following alternative audit procedures over trade receivables:
Trade receivables collectability and certainty was an audit focus area because of nationwide lockdown imposed by the Government of India in view of pandemic coronavirus (COVID 19). (a) Performing procedures to ensure that the changes in trade receivables between the last confirmation receipt and date of the Balance sheet are properly recorded (Roll forward procedures).
(b) Performing substantive analytical procedures to test the correctness of receivables valuation including provisioning thereof.
As explained by the Management due to COVID 19 related restriction on account of nationwide lockdown resulted in non-receipt of direct confirmations and reconciliations from the customers. (c) Testing of accuracy of trade receivables reconciliations with the general ledgers during the year including test of reconciling items.
In view of the above the matter has been determined to be a key audit matter. (d) We obtained a list of long outstanding receivables and assessed the recoverability of these through inquiry with management.
The procedures performed gave us a sufficient evidence to conclude about the collectability and certainty of trade receivables.
3. Information Technology (IT) Systems and Controls Audit procedures performed:
During the year the Company shifted its operations from three factories to one factory and accordingly ERP was reintegrated. Our audit approach consisted testing of design and operating effectiveness of internal controls and substantive testing around the reintegrated ERP system. We also performed sufficient test of details as a part of our audit. We have performed the test of details for areas where the Management has implemented manual controls. We have performed the test of controls regarding the appropriateness of system access and an effective maker and checker system built in the reintegrated ERP system for proper authorizations of transactions and posting of accounting entries. The combination of these tests of controls and procedures performed gave us a sufficient evidence to enable us to rely on the operations of the reintegrated ERP system for the purpose of the audit of the financial statements.
Reintegration of ERP has a risk of loss of integrity of key financial data without replacing them with the new effective controls measures monitoring of IT controls which are relating to critical business processes such as purchase production sales inventory and including recording of transactions which could lead to financial errors or mis-statements and inaccurate financial reporting and also there is risk that automated accounting procedures and related IT manual controls might not work.
We have accordingly designated this as a focus area in the audit

Information Other than the Standalone Financial Statements and Auditor's report thereon

The Company's Board of Directors is responsible for the preparation of otherinformation. The Other information comprises the information included in the Board'sReport including Annexures to the Board report Corporate Governance report and ManagementDiscussion and Analysis but does not include the standalone financial statements and ourauditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of standalone financial statements our responsibility isto read the other information and in doing so consider whether such other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management and Those charged with Governance for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance (includingother comprehensive income) changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the accountingStandards specified under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements the Management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these standalone financial statements. As part of an audit in accordance withSAs we exercise professional judgment and maintain professional skepticism throughout theaudit. We also:

Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the management.

Conclude on the appropriateness of Management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the entity'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work and (ii) to evaluate the effect of anyidentified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant de_ciencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in the Annexure "A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books and records.

(c) The Balance sheet the Statement of Profit & Loss (including othercomprehensive income) Statement of Changes in Equity and the statement of Cash Flow dealtwith by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on records by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a Director in termsof Section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure "B".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of Section 197 of the Act.

(h) With respect to the matters to be included in the Auditor's report in accordancewith the rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and tothe best of our information and according to the explanations given to us: i. The Companyhas disclosed the impact of pending litigations on its financial performance in itsstandalone financial statements. Refer Note No.- 32 to the standalone financialstatements. ii. The Company did not have any long-term contracts including derivativecontracts for which there were any material foreseeable losses. iii. There has been nodelay in transferring amounts required to be transferred to the Investor Education andProtection Fund by the Company.

For LODHA & COMPANY
Chartered Accountants
Firm registration No. – 301051E
R. P. Baradiya
Mumbai Partner
30th June 2021 Membership No. 44101
UDIN: 21044101AAABNR4054

"ANNEXURE A"

ANNEXURE REFERRED TO IN "REPORT ON OTHER LEGAL AND REGUALTORY REQUIREMENTS"SECTION OF OUR REPORT TO THE MEMBERS OF SIMMONDS MARSHALL LIMITED OF EVEN DATE:

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we state that:1.a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment (fixed assets). b) Asexplained to us the Company has a phased program for physical verification of theproperty plant and equipment (fixed assets). In our opinion the frequency ofverification is reasonable considering the size of the Company and nature of itsproperty plant and equipment (fixed assets). Pursuant to the program of the physicalverification of property plant and equipment (fixed assets) physical verification of theassets has been carried out during the year and no material discrepancies were noticed onsuch verification. c) Based on the information and explanations given to us there are noimmovable properties owned by the Company. Accordingly the provisions of clause 1(iii) ofthe Order are not applicable to the Company.

2. The inventories have been physically verified only once during the year in February2021 by an independent Chartered Accountant Firm. Material discrepancies were noticed onphysical verification as compared to book records have duly been accounted for in thebooks of account. The procedures of physical verification of the inventories followed bythe management need to be strengthened considering the size of the Company and nature ofits business.

3. The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Act. Accordingly the provisions of clause 3(iii) of the Order are notapplicable to the Company.

4. During the year the Company has not granted any loans made any investmentprovided any guarantee or security to parties covered under Section 185 and 186 of theAct. Accordingly the provisions of clause 3(iv) of the Order are not applicable to theCompany.

5. No deposits have been accepted by the Company within the meaning of Section 73 to 76or any other relevant provisions of the Act and the Companies (Acceptance of Deposits)Rules 2014 (as amended). Accordingly the provisions of clause 3(v) of the Order are notapplicable to the Company.

6. We have broadly reviewed the books of account maintained by the Company pursuant torules made by the central government for the maintenance of cost records under sub section1 of section 148 of the Act in respect of Company's products and are of the opinion thatprima facie the prescribed accounts and records have been made and maintained. Howeverwe have not made a detailed examination of the cost records with a view to determinewhether they are accurate and complete.

7. a) According to the information and explanations given to us and on the basis of ourexamination of the records the Company is generally regular in depositing undisputedstatutory dues including provident fund employees' state insurance income- tax goodsand service tax duty of customs cess and other statutory dues applicable to the Companywith appropriate authorities. No undisputed amounts in respect of the aforesaid statutorydues were outstanding as at the last day of the financial year for a period of more thansix months from the date they became payable. b) According to the information andexplanations given to us and on the basis of our examination of the records of theCompany there are no dues of income tax sales tax goods and service tax duty ofcustoms duty of excise value added tax which have not been deposited on account of anydispute except those mentioned in the table below:

Name of the statute Nature of dues Period to which it relates Amount (` in lakhs) Forum where dispute is pending
Income Tax Act 1961 Income Tax AY 2013-14 7.51 CIT (Appeal)
The Central Sales Tax 1956 Central Sales Tax FY 2012-13 53.54 Joint Commissioner of Sales Tax

8. The Company has not defaulted in repayment of loans or borrowings to banks andfinancial institutions during the year. Further the Company did not have any outstandingdues to debenture holder and Government during the year.

9. The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) during the year or in the recent past. Based on theinformation and explanations given to us by the management term loans were applied forthe purpose for which the loans were obtained.

10. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by or on the Company by its officers or employees noticed or reportedduring the year nor have we been informed of such case by the management.

11. According to the information and explanations given to us and based on ourexamination of the records the Company has paid / provided for the managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V of the Act.

12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Therefore the provisions of clause 3(xii) of the Orderare not applicable to the Company. 13. According to the information and explanations givento us and based on our examination of the records of the Company all the transactionswith related parties are in compliance with section 177 and 188 of the Act and all thedetails have been disclosed in the standalone financial statements as required by theapplicable Accounting Standard. (Refer Note no. 39 to the standalone financialstatements).

14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year. Therefore the provisions ofclause 3(xiv) of the Order are not applicable to the Company.

15. Based on the information and explanations given to us the Company has not enteredinto any non-cash transactions prescribed under Section 192 of the Act with directors orpersons connected with them during the year.

16. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

l For Lodha & Co.
Chartered Accountants
Firm Registration No: 301051E
R. P. Baradiya
Mumbai Partner
30th June 2021 Membership No. 44101
UDIN: 21044101AAABNR4054

"ANNEXURE B"

ANNEXURE REFERRED TO IN "REPORT ON OTHER LEGAL AND REGUALTORY REQUIREMENTS"SECTION OF OUR REPORT TO THE MEMBERS OF SIMMONDS MARSHALL LIMITED OF EVEN DATE

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofsub-section 3 of Section 143 of the Act

We have audited the internal financial controls over financial reporting of SimmondsMarshall Limited ("the Company") as of 31st March 2021 inconjunction with our audit of the Standalone Financial Statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemed tobe prescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the Standalone financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the

financial statements; and (4) also provide reasonable assurance by the internalauditors through their internal audit reports given to the organisation from time to time.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us read with what is stated in clause 2 of Annexure A regarding strengthening ofprocedures for physical verification of inventories the Company has broadly in allmaterial respects an adequate internal financial controls system over financial reportingand such internal financial controls over financial reporting were operating effectivelyas at 31st March 2021 based on the internal control over financial reportingcriteria established by the Company considering the essential component of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the ICAI.

For Lodha & Co.
Chartered Accountants
Firm Registration No: 301051E
R. P. Baradiya
Mumbai Partner
30th June 2021 Membership No. 44101
UDIN: 21044101AAABNR4054

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