Simmonds Marshall Ltd Management Discussions.


The main business of the Company is manufacturing and sale of Industrial Fasteners used in Auto Industry, railways, white goods, farm equipment amongst others.


With the outbreak of COVID-19, things have become more challenging. As governments across the world focus on containment of the disease, the measures adopted have led to lockdowns, curtailed production, shortage of labour supply and movement of goods. These measures not only adversely affected the economies sharply but have also disrupted financial and commodity markets, global trade, supply chains, travel and tourism. However, the global economy is projected to grow when economic activity normalises.

Therefore, the global economy reported de-growth of 3.5% in 2020 compared to a growth of 2.9% in 2019. This steep decline in global economic growth was largely due to the outbreak of the novel coronavirus and consequent suspension of economic activities across the world. The global economy is projected to grow by 5.5% in 2021 largely due to the successful roll-out of vaccines across the globe, coupled with policy support in large economies.

The global economy is expected to see a rebound in 2021 with the International Monetary Fund (IMF) expecting 6% growth, with US stimulus and vaccine optimism leading to further opening up of the economies. The growth recovery is likely to be led by the US and China – the US is estimated to grow 6.4% in 2021 and China by 8.4%. Governments and Central Banks are expected to maintain supportive policies until the recovery is firmly underway. The strength of recovery will depend on vaccine roll-out.

Indian Economy Review:

In 2020-21, Indias economic growth slowed and contracted by 7.3%. The second wave of Covid-19 in India was four times worse than the first wave in terms of infections and deaths seen in the country. The second wave disrupted the already battered growth process from the first wave. The economic activity declined sharply at the peak of the second Covid-19 wave and is gradually recovering from the impact of the second wave of coronavirus, supported by several government policy measures, targeted fiscal relief and rapid roll out of the vaccination drive across the country. In June 2021, the government announced an economic relief package worth Rs. 6.29 lakh crore (US$ 84.18 billion) to overcome impact of the second wave. Going forward, sustained pace of the vaccination drive, along with strict adherence to COVID-19-appropriate behaviour, is expected to contribute to further economic growth and safeguard citizens from the probable third wave. Outlook for FY22 looks favourable, considering high-frequency indicators that continued to accelerate amid the COVID-19 challenges. Indias economy is expected to grow at 8.3% for Fiscal Year 2021-22 as per the World Banks latest projections. This rate, however, masked the damage caused by the "enormous" second wave of COVID-19

Business Outlook 2021-22:

Company expects a decent performance for the financial year 2021-22, but the second wave of Covid-19 is set to impact our performance severely during the first quarter of the year. The Indian auto-industry (including components manufacturing) is expected to record strong growth in 2021-22, post recovering from effects of Covid-19 pandemic. Electric vehicles, especially two-wheeler is likely to witness positive sales in 2021-22


Export market was also affected by the pandemic and during the year total export stood at Rs. 1005.82 Lakhs as against Rs. 1326.98 lakhs in the previous year. Company is expecting an increase in Export once the situation is stabilized.


Internal Control Systems are designed to ensure the reliability of financial and other records and accountability of executive action to the managements authorization. The internal control systems are reviewed by the top management and by the audit committee of the board and proper follow up action is ensured wherever required. Regular audit committee meetings are held where statutory auditors as well as internal auditors participate and internal audit reports are discussed and reviewed. The internal audit of the transactions of the Company is carried out and the Company is planning to enlarge the scope of work of the internal auditors.


As the global industrial fasteners market su_ered a downfall during the COVID-19 crisis as most economic activities were halted during Q1 and Q2 2020. Major revenue-generating end-users of construction, automotive, machinery, and aerospace manufacturing activities were affected, leading to a decline in demand for new fasteners.

During the year under review, the Company has achieved the Total Revenue of Rs. 12465.59 Lakhs as against the Total Revenue of Rs. 14199.60 Lakhs in the previous year. The Company has reported net loss before tax of Rs. 1791.65 Lakhs during the year as against the net loss before tax of Rs. 1041.73 Lakhs in the previous year.

Details of significant changes in key financial ratios:

Sr. No Key Ratios UOM 2020-21 2019-20 Detailed explanation in case change is 25% or more in comparison to previous year
1 Debtors Days 62 71 Not Applicable
2 Inventory Days 169 156 Not Applicable
3 Interest Times -1.15 -1.14 Not Applicable
Coverage Ratio
4 Current Ratio Times 1.12 1.38 Not Applicable
5 Debt Equity Ratio Times 1.22 0.74 On account of loss and increased borrowings
6 Operating Profit Margin (%) % -7.86 -4.36 Pandemic has severely impacted the sales and profitability
7 Net Profit Margin (%) % -14.66 -6.04 Pandemic has severely impacted the sales and profitability
8 Return on Net Worth % -45.43 -14.68 Pandemic has severely impacted the sales and profitability


The Company believes that Human Resources are its key assets. The total number of employees of the Company is three hundred and eight. The Companys HR policy focuses on developing the skill and competencies of all the employees, facilitating team work and total employee involvement, providing a happy work environment to the employees and support to their families and remaining a socially responsible Company contributing to the society.

Learning is given the utmost importance in the Company. Training programs focus on improving employees current skills and competencies as well as developing them for their future roles as part of their career development. The Company ensures overall development of every employee and all inputs are provided to reach the expert level of their skill and competency.

In the Company, HR processes are aligned to make employees feel that they are a part of the Company family.

The Company creates the platform for employees to voice their opinion and make suggestions to improve the working environment. The Company maintains regular communication with employees to make them feel connected with the Company and perform their jobs most effectively.

The Company focuses on inculcating the habit of continuous improvement and motivating employees to participate in improvement activities for the organisation. The Company continues to maintain its record of industrial harmony.


The Company strives to manufacture products with zero pollution and zero accidents, by continuously improving its environmental and occupational health and safety management systems. The Company accords paramount importance to the health and safety of its employees. Major factories have obtained certification for conformance to ISO 45001-2018 (Occupational Health and Safety Management System). Manufacturing facility is also certified with ISO 14001-2015 (Environmental Management System).


Statement in the Management Discussion and Analysis describing the Companys objectives, expectations, estimates or predictions may be "forward looking statements" within the meaning of applicable laws and regulations. Actual results may differ substantially or materially from those expressed or implied. Important developments that could influence the Companys operations include a downtrend in the automobile industry – global or domestic or both, significant changes in political and economic environment in India or key markets abroad, tax laws, litigation, labour relations, foreign currency fluctuations and interest costs.