Simmonds Marshall Ltd Directors Report.

To

The Members,

Simmonds Marshall Limited

Your Directors have pleasure in presenting the 59th Annual Report, together with the Audited Financial Statements of the Company for the financial year ended March 31, 2019. The consolidated performance of the company and its associate has been referred to wherever required.

FINANCIAL HIGHLIGHTS:

(Rs. in Lakhs)

Particulars

Standalone

Consolidated

Year ended Year ended Year ended Year ended
31.03.2019 31.03.2018 31.03.2019 31.03.2018
Revenue from operation (Net of tax) 18178.47 17500.76 19469.20 18764.77
Other Income 87.92 79.50 84.22 60.58
Total Income 18266.39 17580.26 19553.42 18825.35
Profit before Finance Cost and 1586.15 2165.95 1597.39 2185.08
Depreciation
Less: Finance Cost 362.90 329.26 364.17 329.26
Less: Depreciation & Amortization expenses 449.41 395.50 457.64 403.62
Profit Before Tax 773.84 1441.19 775.57 1452.20
Tax Expenses
-- Current Tax 234.18 460.33 236.79 472.67
-- Deferred Tax (30.67) (24.53) (31.59) (26.11)
-- Tax for earlier year (6.26) (6.26)
Net Profit After Tax 576.59 1005.39 586.26 1000.98
Other Comprehensive Income 41.98 39.75 41.98 39.75
(Net of tax)
Total Comprehensive Income After Tax 534.61 965.64 544.28 961.23
Earing Per Share 5.15 8.98 5.15 8.94

OVERVIEW OF COMPANYS FINANCIAL PERFORMANCE:

The Company has recorded total Revenue of Rs. 18266.39 Lakhs during the year as against Rs. 17580.26 Lakhs in the previous year. The Company has recorded net profit of Rs. 576.59 Lakhs during the financial year as against Rs. 1005.39 Lakhs in the previous year.

On consolidated basis, during the Financial year, the Company recorded Total Revenue of Rs. 19553.42 Lakhs as against Rs. 18825.35 Lakhs in the previous year. The Company has recorded net profit of Rs. 586.26 Lakhs during the financial year as against Rs. 1000.98 Lakhs in the previous year.

PERFORMANCE AND FINANCIAL POSITION OF THE ASSOCIATE:

Formex Private Limited: Formex Private Limited achieved a total turnover of Rs.1230.92 Lakhs as against Rs. 941.11 Lakhs in the previous year. The Company has recorded net profit of Rs.19.68 during the financial year as against the loss of Rs. 9 Lakhs in the previous year.

DIVIDEND:

Your Directors have pleasure in recommending, for approval of the Members, at its 59th Annual General Meeting, a Dividend of Rs. 0.50/- per share i.e. @ 25% for the year ended March 31, 2019. If approved at the forthcoming Annual General Meeting, it will result in an outflow of Rs. 56.00 Lakhs to the Members of the Company, coupled with Rs. 11.51 Lakhs as Dividend Distribution Tax.

TRANSFER TO RESERVES:

During the financial year, the Company has not transferred any amount to General Reserves.

EXPORTS:

During the year under review, the Company exported goods worth F.O.B. Rs. 1707.06 Lakhs against Rs.1780.10 Lakhs in the previous year.

RESEARCH & DEVELOPMENT:

The R&D Department of the Company has been arduously working to provide quality and value for money to the customer in keeping with market trends.

PUBLIC DEPOSITS:

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

SHARE CAPITAL OF THE COMPANY:

The Paid up Equity Share Capital, as at March 31, 2019 was Rs. 2,24,00,000 /- divided into 1,12,00,000 Equity Shares, having face value of Rs. 2/- each fully paid up. During the year under review, the Company has not issued shares or convertible securities or shares with differential voting rights nor has granted any stock options or sweat equity or warrants. As on March 31, 2019, none of the Directors of the Company hold instruments convertible into Equity Shares of the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The details of loans, advances and/or guarantee provided by the Company as per section 186 of the Companies Act, 2013, which are required to be disclosed in the annual accounts of the Company pursuant to Regulation 34 (3) read with Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the SEBI Listing Regulations) are provided in the standalone financial statements.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

DIRECTORS:

COMPOSITION:

The Board of Directors includes the Executive and Independent Directors so as to ensure proper governance and management. The Board consists of Six (6) Directors comprising of Three (3) Executive Director and Three (3) Independent Directors including One (1) Woman Director as on March 31,2019.

RE-APPOINTMENTS:

In accordance with the provisions of Section 152(6) of the Companies Act, 2013 and the Articles of Association of the Company, Mr. I. M. Panju, Director of the Company, retires by rotation, and being eligible, has offered himself for reappointment.

KEY MANAGERIAL PERSONNEL:

The Company is having the following persons as the Key Managerial Personnel.

Name of Personnel Designation
1. Mr. S. J. Marshall Chairman and Whole-time Director
2. Mr. N. S. Marshall Managing Director
3. Mr. I. M. Panju Whole time Director
4. Mr. Vikash Verma Chief Financial Officer
5. Mr. Nirmal Gupta Company Secretary

During the Financial Year under review, there was no change in the Key Managerial Personnel of the Company. DECLARATION BY INDEPENDENT DIRECTOR(S):

All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1) (b) of the Listing Regulations. In the opinion of the Board, the Independent Directors, fulfill the conditions of independence specified in Section 149(6) of the Act and Regulation 16(1) (b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with the Companys Code of Business Conduct & Ethics.

SUBSIDIARIES & ASSOCIATE COMPANIES:

The Company has one Associate Company i.e. Formex Private Limited within the meaning of Section 2(6) of the Companies Act, 2013.

The Associate Company is carrying on the business of Manufacturing of Bolts, Nuts etc. and the Company holds 49% of the Equity Share Capital in Formex Private Limited as on March 31, 2019. There has been no material change in the nature of the business of the Associate Company.

Pursuant to provisions of Section 129(3) of the Act read with rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the Companys Associate Company in Form AOC-1 is appended as Annexure A and forms part of the Annual Report.

In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Audited Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company, www.simmondsmarshall.com .

The Company does not have any subsidiary or joint venture as on March 31,2019.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9, as required under Section 92 of the Act, is annexed as Annexure B which forms an integral part of this Report and is also available on the Companys website viz. www.simmondsmarshall.com .

NUMBER OF MEETINGS:

a) Board of Directors

The Board of Directors met Four (4) times in the financial year. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report, which forms part of the Annual Report.

b) Audit Committee

During the year, Four (4) Audit Committee Meetings were convened and held. The details pertaining to composition of Audit Committee and the attendance of the Audit Committee members are provided in the Corporate Governance Report, which forms part of the Annual Report.

c) Nomination & Remuneration Committee

During the year, Three (3) Nomination and Remuneration Committee Meetings were convened and held. The details pertaining to composition of Nomination and Remuneration Committee and the attendance of the Nomination and Remuneration Committee members are provided in the Corporate Governance Report, which forms part of the Annual Report.

d) Stakeholders Relationship Committee

During the year, Four (4) Stakeholders Relationship Committee Meetings were convened and held. The details pertaining to composition of Stakeholders Relationship Committee and the attendance of the Stakeholders Relationship Committee members are provided in the Corporate Governance Report, which forms part of the Annual Report.

e) Corporate Social Responsibility Committee

During the year, One (1) Corporate Social Responsibility Committee Meetings was convened and held. The details pertaining to composition of Corporate Social Responsibility Committee and the attendance of the Corporate Social Responsibility Committee members are provided in the Corporate Governance Report, which forms part of the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134 of the Companies Act, 2013, the Directors confirm that:

i. that in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

ii. that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the company for that period;

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities

iv. the Directors had prepared the annual accounts on a going concern basis.

v. the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively

vi. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ANNUAL PERFORMANCE EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 the company has implemented a system of evaluating performance of the Board of Directors and of its Committees and individual directors on the basis of evaluation criteria suggested by the Nomination and Remuneration Committee and the SEBI (LODR) Regulations, 2015. Accordingly, the Board has carried out an evaluation of its performance after taking into consideration various performance related aspects of the Boards functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, remuneration, obligations and governance. The performance evaluation of the Board as a whole, Chairperson and Non-Independent Directors was also carried out by the Independent Directors in their meeting held on February 14, 2019.

Similarly, the performance of various committees, individual Independent and Non Independent Directors was evaluated by the entire Board of Directors (excluding the Director being evaluated) on various parameters like engagement, analysis, decision making, communication and interest of stakeholders.

The Board of Directors expressed its satisfaction with the performance of the Board, its committees and individual directors.

POLICY ON DIRECTORS APPOINTMENT, REMUNERATION AND OTHER DETAILS:

The Board of Directors as per recommendations of the Nomination & Remuneration Committee has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company.

The policy lays down the criteria for selection and appointment of Board Members. The details of the policy are explained in the Corporate Governance Report. The policy has been posted on the website of the Company www.simmondsmarshall.com .

RELATED PARTY TRANSACTIONS:

Your Company has formulated a policy on related party transactions which is also available on Companys website www.simmondsmarshall.com . This policy deals with the review and approval of related party transactions. The Board of Directors of the Company had approved the criteria for making the omnibus approval by the Audit Committee within the overall framework of the policy on related party transactions. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and on an arms length basis. All related party transactions are placed before the Audit Committee for review and approval.

All related party transactions entered during the Financial Year were in ordinary course of the business and on an arms length basis. No material related party transactions were entered during the Financial Year by your Company. Accordingly, no disclosure is made in respect of related party transactions, as required under Section 134(3)(h)of the Act in Form AOC 2. Members may refer to Note No. 39 of the financial statements which sets out related party disclosures pursuant to IND-AS-24.

AUDITORS:

a) Statutory Auditor

M/s. Lodha & Co., Chartered Accountants, Mumbai, were appointed as the Statutory Auditors of the Company at the 57th Annual General Meeting (AGM) held on September 8, 2017 and will hold office until the conclusion of the 62nd AGM to be held in 2022.

The first proviso to section 139(1) of the Companies Act, 2013 has been omitted vide section 40 of the Companies (Amendment) Act, 2017 notified on May 7, 2018. Therefore, it is not mandatory for the Company to place the matter relating to appointment of statutory auditor for ratification by members at every Annual General Meeting. Hence the Company has not included the ratification of statutory auditors in the Notice of AGM.

The Report given by M/s. Lodha & Co., Chartered Accountants, on the financial statements of the Company for the financial year 2018-2019 is a part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report.

During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

b) Internal Auditor

Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the Board on recommendation of the Audit Committee has re-appointed M/s. SHR & Co., as internal auditors of the Company.

c) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. GMJ &

Associates, Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is appended as Annexure C forms part of this report.

There has been no qualification, reservation or adverse remark or disclaimer in their Report.

During the year under review, the Secretarial Auditors have not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.

d) Cost Auditor

Based on the recommendations of the Audit Committee, the Board has appointed M/s. Joshi Apte & Associates, Cost Accountants (Firm Registration No. 000240), as the Cost Auditors of the Company for the year ending March 31, 2020, subject to the ratification of the remuneration payable to them by the members in the ensuing Annual General Meeting pursuant to Section 148 of the Companies Act, 2013.

The Cost Audit Report for the Financial Year 2018-2019 pursuant to the Companies (Cost Accounting Records) Rules, 2011 will be filed within the period stipulated under the Companies Act, 2013.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

The Company has constituted a Corporate Social Responsibility Committee in accordance with the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 (the Rules). The details required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in the CSR Report is appended as Annexure D and forms part of this report.

CODE OF CONDUCT:

Your Company is committed to conducting its business in accordance with the applicable laws, rules and regulations and highest standards of business ethics. In recognition thereof, the Board of Directors has implemented a Code of Conduct for adherence by the Directors, Senior Management Personnel and Employees of the Company. This will help in dealing with ethical issues and also foster a culture of accountability and integrity. The Code made in accordance with the requirements of SEBI (LODR) Regulations, 2015 has been posted on the Companys website www.simmondsmarshall.com

All the Board Members and Senior Management Personnel have confirmed compliance with the Code. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined by the Audit Committee. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board /and to the Managing Director.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company.

Based on the report of internal audit function, the Company undertakes corrective action in their respective areas and thereby strengthens the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

RISK MANAGEMENT POLICY:

Company has a Risk Management Policy with the Objective to formalize the process of Identification of Potential risk and adopt appropriate risk mitigation measures through a risk management structure. The Policy is a step by the Company towards strengthening the existing internal controls and updating the same as may be required from time to time.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has adopted a Whistle Blower Policy to provide a formal mechanism to the Directors and Employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct or Ethics Policy. The policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The Whistle Blower Policy has been posted on the website of the Company www.simmondsmarshall.com

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment.

The following table shows the nature of complaints received from the employees during the years 2018-2019.

Category No. of Complaints filed during the Financial Year No. of complaints pending as on end of the Financial Year
Child labour/forced labour/involuntary labour -- --
Sexual harassment -- --
Discriminatory employment -- --

INVESTOR EDUCATION & PROTECTION FUND (IEPF):

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the Rules"), all unpaid or unclaimed dividends are required to the transferred by the Company to the IEPF established by the Government of India, after the completion of seven years. Further, according to the Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the Demat account of IEPF Authority. Accordingly, the Company has transferred the unclaimed and unpaid dividends of Rs. 12,30,814/- in respect of financial year 2010-11. Further, 6500 Equity shares were transferred as per the requirements of IEPF rules. The details are available on our website www.simmondsmarshall.com

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS:

The Company adheres to the requirements set out by the Securities and Exchange Board of Indias Corporate Governance practices and have implemented all the stipulations prescribed. The Company has implemented several best corporate governance practices.

The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as separate Annexures, together with the Certificate from the Auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in SEBI (LODR) Regulation, 2015.

HEALTH, SAFETY AND ENVIRONMENT:

The Company is aware of the importance of environmentally clean and safe operations. The Companys policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances, environmental regulations and preservation of natural resources at the Plant.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relate and on the date of this report.

THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:

There are no significant or material orders which were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Companys operations in future.

DEPOSITORY SERVICES:

The Companys Equity Shares have been admitted to the depository mechanism of the National Securities Depository Limited (NSDL) and also the Central Depository Services (India) Limited (CDSL). As a result the investors have an option to hold the shares of the Company in a dematerialized form in either of the two Depositories. The Company has been allotted ISIN No. NE657D01021.

Shareholders therefore are requested to take full benefit of the same and lodge their holdings with Depository Participants [DPs] with whom they have their Demat Accounts for getting their holdings in electronic form.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is appended as Annexure E and forms part of this report.

PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 appended as Annexure F and G and forms part of this report.

AFFIRMATION ON COMPLIANCE OF SECRETARIAL STANDARDS:

The Board of Directors of the Company has affirmed with the compliances of Secretarial Standards issued by Institute of Company Secretaries of India.

APPRECIATION:

Your Directors would like to express their sincere appreciation to the Companys Shareholders, Vendors and Stakeholders including Banks, Government authorities, other business associates, who have extended their valuable sustained support and encouragement during the year under review. Your Directors also wish to place on record their appreciation for impressive growth achieved through the competence, hard work, solidarity, cooperation and support of employees at all levels.

Registered Office: For and on behalf of the Board of Directors,

Mumbai-Pune Road, SIMMONDS MARSHALL LIMITED

Kasarwadi,

Pune-411 034.

S. J. MARSHALL (DIN:00085682)

May 28, 2019. CHAIRMAN