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Simmonds Marshall Ltd.

BSE: 507998 Sector: Engineering
NSE: N.A. ISIN Code: INE657D01021
BSE 00:00 | 28 Sep 49.95 8.15
(19.50%)
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44.05

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50.15

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NSE 05:30 | 01 Jan Simmonds Marshall Ltd
OPEN 44.05
PREVIOUS CLOSE 41.80
VOLUME 221511
52-Week high 51.90
52-Week low 24.80
P/E
Mkt Cap.(Rs cr) 56
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 44.05
CLOSE 41.80
VOLUME 221511
52-Week high 51.90
52-Week low 24.80
P/E
Mkt Cap.(Rs cr) 56
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 standalone financial statements of SimmondsMarshall Limited ("the Company") which comprise of Balance Sheet as at 31stMarch 2020 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 theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (the Act) in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at 31st March 2020 and its lossother comprehensive income changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw your attention to Note 40 of the standalone financialstatements with regard to management's assessment about the impact on Company'soperations due to COVID 19 pandemic outbreak and lockdown. The management apart fromconsidering the internal and external information up to the date of approval of thesefinancial statements the Company has also performed sensitivity analysis on theassumptions used interalia including in respect of realisability of inventories ofRs.6154.44 lakhs recoverability of trade receivables of Rs.1733.59 lakhs and impairmentof capital work-in-progress of Rs. 1889.60 lakhs good will of Rs. 267.30 lakhs &utilization of deferred tax assets of Rs.162.21 lakhs and based on current indicators offuture economic conditions the Company expects to realize /recover the carrying amount ofall these assets.

The impact of the global health pandemic may be different from thatestimated as at the date of approval of these financial statements. Considering thecontinuing uncertainties the Management will continue to closely monitor any materialchanges to future economic conditions.

Our report is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

Sr. No Key Audit Matters Auditor's response
1. Inventory - existence and valuation Audit procedures performed:
As at March 31 2020 the Company held inventories of Rs. 6154.44 Lakhs. [Also refer Note no. 9 of the standalone financial statements] We have performed following alternative audit procedures over inventory existence and valuations.
(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.
Inventories existence and valuation was an audit focus area because of nationwide lockdown imposed by the Government of India in view of pandemic coronavirus (COVID 19).
As explained by the Management due to COVID 19 related restriction on account of nationwide lockdown physical verification of inventories as on the Balance sheet date couldn't be carried out by the Company.
(b) Performing procedures to ensure that the changes in inventory are properly recorded.
In view of the above the matter has been determined to be a key audit matter. (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 year end including test of reconciling items.
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 March 31 2020 the Company held trade receivables of Rs. 1733.59 lakhs. [Also refer Note no. We have performed following alternative audit procedures over trade receivables :
10 of the standalone financial statements] (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)
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).
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. (b) Performing substantive analytical procedures to test the correctness of receivables valuation
(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 oflong 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.

Information Other than the Standalone Financial Statements andAuditor's report thereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Annual reportbut does not include the financial statements and our auditor's report thereon. The Annualreport is expected to be made available to us after the date of this auditor's report.

Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance thereon.

In connection with our audit of financial statements ourresponsibility is to read the other information and in doing so consider whether suchother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the annual report if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance.

Management responsibilities for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performance(including other comprehensive income) changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management and Board ofDirectors is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of Management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theentity's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work and (ii) to evaluatethe effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the Annexure "A" a statement on the mattersspecified in paragraphs 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books andrecords.

(c) The Balance sheet the Statement of Profit & Loss (includingother comprehensive income) Statement of Changes in Equity and the Statement of CashFlows dealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statementscomply with the Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from thedirectors as on 31st March 2020 taken on records by the Board of Directors none of thedirectors are disqualified as on 31st March 2020 from being appointed as a Director interms of Section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure "B".

(g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of Sec 197(16) of the Act as amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of Section 197 of the Act.

(h) With respect to the other matters to be included in the Auditor'sreport in accordance with the rule 11 of the Companies (Audit and Auditors) Rules 2014in our opinion and to the best of our information and according to the explanations givento us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements. Refer Note No.- 32 to thestandalone financial statements.

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

For LODHA & COMPANY
Chartered Accountants
Firm registration No. - 301051E
R. P. Baradiya
Partner
Membership No. 44101
Mumbai13th July 2020 UDIN: 20044101AAAAEI3505

"ANNEXURE A"

ANNEXURE REFERRED TO IN PARAGRAPH "REPORT ON OTHER LEGAL ANDREGUALTORY REQUIREMENTS"

OF OUR REPORT TO THE MEMBERS OF "THE COMPANY"FOR THE YEARENDED 31ST MARCH 2020

On the basis of such checks as we considered appropriate and accordingto the information and explanations

given to us during the course of our audit we state that:

1. a) The Company has maintained proper records showing fullparticulars including quantitative details

and situation of property plant and equipment (fixed assets).

b) The Company has a regular programme of physical verification of its property plantand equipment (fixed assets) by which all property plant and equipment (fixed assets) areverified in a phased manner over a period of three years. However due to COVID 19related nationwide lockdown the Management was not able to perform year end physicalverification of fixed assets as per the phased programme. According to the information andexplanations given to us management does not expect any material discrepancy as and whenthe physical verification is carried out.

c) Based on the information and explanations given to us there are no immovableproperties owned by the Company. Accordingly the provisions of clause 1(iii) of the Orderare not applicable to the Company.

2. The inventory has been physically verified by the management at reasonable intervalsduring the year. Due to COVID 19 related nationwide lockdown the Management was not ableto perform year end physical verification of inventory. According to the information andexplanations given to us management does not expect any material discrepancy as and whenthe physical verification is carried out.

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. The Company has not granted any loans or provided guarantees or security to theparties covered under Section 185 of the Act. The Company has complied with the provisionsof Section 186 of the Act with respect to the investment made.

5. No deposits have been accepted by the Company within the meaning of directivesissued by RBI (Reserve Bank of India) and Sections 73 to 76 or any other relevantprovisions of the Act and Rules framed there under.

6. We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 prescribed by the Central Government underSection 148(1) (d) of the Act and are of the opinion that prima facie the prescribedaccounts and cost records have been maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

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 undisputed statutory duesincluding provident fund employees' state insurance income- tax goods and service taxduty of customs cess and other statutory dues applicable to the Company with appropriateauthorities. No undisputed amounts payable in respect of the aforesaid statutory dues wereoutstanding as at the last day of the financial year for a period of more than six monthsfrom the date they became payable.

b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there are no dues of income tax sales taxservice tax duty of customs duty of excise value added tax which have not beendeposited on account of any dispute 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 banksfinancial institutions during the year. Further the Company has not taken any loans orborrowings from 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 managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith 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. 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 all transactions with therelated party are in compliance with Section 177 and 188 of the Act and the details havebeen disclosed as required by the applicable Accounting Standard. (Refer Note no 39 to thestandalone financial statements).

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.

For LODHA & COMPANY Chartered Accountants Firm registration No. - 301051E

R. P. Baradiya
Partner
Membership No. 44101
Mumbai13th July 2020 UDIN: 20044101AAAAEI3505

"ANNEXURE B"

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Act

We have audited the internal financial controls over financial reporting of SimmondsMarshall Limited ("the Company") as of 31st March 2020 in conjunction with ouraudit of the Standalone Financial Statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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; (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 internal auditors through their internal auditreports 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 internalfinancial controls over financial reporting to future periods are subject to the risk thatthe internal financial control over financial reporting may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

In our opinion the Company has broadly in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2020 except certainyear end controls related to inventory and trade receivables due to prevailing pandemiccondition reference is also invited to Key Audit Matters para in main audit report basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For LODHA & COMPANY Chartered Accountants Firm registration No. - 301051E

R. P. Baradiya
Partner
Membership No. 44101
Mumbai13th July 2020 UDIN: 20044101AAAAEI3505

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