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Solitaire Machine Tools Ltd.

BSE: 522152 Sector: Engineering
NSE: N.A. ISIN Code: INE410A01013
BSE 15:40 | 23 Feb 67.30 -0.20
(-0.30%)
OPEN

63.55

HIGH

67.90

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63.55

NSE 05:30 | 01 Jan Solitaire Machine Tools Ltd
OPEN 63.55
PREVIOUS CLOSE 67.50
VOLUME 4766
52-Week high 73.00
52-Week low 33.00
P/E 15.72
Mkt Cap.(Rs cr) 31
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 63.55
CLOSE 67.50
VOLUME 4766
52-Week high 73.00
52-Week low 33.00
P/E 15.72
Mkt Cap.(Rs cr) 31
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Solitaire Machine Tools Ltd. (SOLITAIREMACH) - Director Report

Company director report

TO THE MEMBERS

The Directors have pleasure in presenting before you the Twenty Fifth Annual Report ofthe Company together with the Audited Statements of Accounts for the year ended 31stMarch 2017.

FINANCIAL RESULTS:

The performance during the period ended 31st March 2017 has been as under:

Particulars Year Ended 31st March 2017 Year Ended 31st March 2016 Year Ended 31st March 2015 Year Ended 31st March 2014 Year Ended 31st March 2013
Sales (Net) 1834.07 1565.5 1079.42 923.08 1036.45
Other Income 31.51 26.80 15.44 20.66 14.71
Increase/ (Decrease) in stocks (19.99) 179.04 (159.21) 84.90 57.00
Profit Before Taxation 248.49 169.54 104.63 58.52 141.85
Less: Taxation 100.00 66.50 56.00 25.00 50.00
Add/Less: Deferred Tax 5.39 6.43 26.08 3.70 1.11
Net Profit after Tax 140.36 108.87 62.94 37.21 88.17
Add: Profit brought Forward from 601.82 547.45 525.39 514.75 466.16
Previous Year
Profit available for appropriation 742.18 656.32 588.33 551.96 554.34
Proposed Dividend 56.77 45.42 34.06 22.71 34.07
Corporate Tax on Proposed 11.56 9.08 6.81 3.86 5.53
Dividend
Transfer to General Reserve 0.00 0.00 0.00 0.00 0.00
Balance Carried to Balance Sheet 673.85 601.82 547.45 525.39 514.75

DIVIDEND:

Your Directors recommend dividend of Rs. 5677720/- which would be 12.5% on 4542176equity shares of Rs. 10/- each for the year ended March 31 2017 subject to members'approval.

OPERATIONS:

The operation for the year has shown moderate growth and the momentum to get biggershare of market has sustained. New customers have been added during the year especially inInternational market. The company increased sales by 17 % and Export share was almost 40%. During the year Machines / Spares were sold in Australia New Zealand Turkey ItalyUK and USA. The single order from Turkey was for over 2 Crores from a new customer. Thisshows the faith and trust entrusted by our overseas customers in SMT. The sales would havebeen bit higher if the machines ready would have been collected by the customers. This isone of the reason for increase in inventory.

Once again the Company recorded highest ever revenue of Rs.1834.06 Lacs. The netprofit of Rs. 140 Lacs was up by 29 % from previous year. The EPS went to Rs. 3.09against previous year of Rs. 2.40.

Your company has remained DEBT FREE and has been DEBT FREE since 2011-2012. The Companyinvested Rs. 80 Lacs in Capital Goods and Rs. 50 Lacs in Bank Deposits during the yearfrom its own internal accruals. The Company was able to manage funds requirement so thateven use of cash Credit facility of Bank was used to minimum.

EEPC has for Third consecutive time recognized the Export Achievements of the Companyand awarded Star Performer for the year 2014-2015. The award was handed over by CentralRenewable Energy Minister Shri Piyush Goyal to Ms. Shilpa Taneja in Mumbai. During theyear Company went a step further to extend use of Renewable Energy by installing SolarPower system at Chhani plant. The plant capacity is 45 KW about 50 % of allowedsanctioned load as per the norms of Gujarat Government. During the six-month period fromOctober to March average monthly saving was 5500 units of Power equivalent of Rs.49500 / month. This is also equivalent of saving close to 250 trees / year. Besides therent collected by allowing use of Gorwa plant roof for solar power generation was Rs. 2.69Lacs. The year started with healthy order book and more orders are under negotiation. Thegood monsoon could mean boom in Vehicle production and expected growth in Machine Toolsproduction. The new Thrust on Aerospace and Defense manufacturing would call for Precisiongrinders. Your Company has already become part of AeroDef group of our Association IMTMA.All new inquiries from these group of industries would be passed on to this group. Theseindustries have large potential and we should see benefit in next 3 to 5 years. During theyear Company worked with a German group to design grinder to their specifications. Withjoint effort the grinder was perfected to European standards and was delivered to theirplant in India. The group has presence in over 60 countries and are targeting to use ourgrinders for their worldwide requirements in years to come. In similar scenario theCompany has taken an order for Rebuilding and CNC retrofitting of six grinders for anAmerican company under their guidance and standards. The work is progressing well on thisproject. The grinders have been received from USA. The Company continuedits socialresponsibility with its own resources for its own employees and their families. As you areaware this is Silver Jubilee year for Company since it became a Public LimitedCompany. We have shown graphs on inside cover page of Company's growth in Sales Profitand Value of shares as traded on March 31 of each year on BSE. The Milestone depictionalso shows Progress of Company and its achievements since the inception. We have many moreMiles to go and with continued support of all we hope to climb greater heights in years tocome.

The Company thanks all its Customers for continuous support and faith in meeting theirrequirements. The Company's personnel have worked as a team and continues to work forbetter tomorrow. The Company thanks its Bankers Vendors Government agencies for theircontinued support.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As required under Regulation 34 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Management Discussion and Analysis Report is enclosedas a part of this report.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

Report on Corporate Governance and Management Discussion and Analysis Reports alongwith Certificate of the Company Secretary in Practice pursuant has been included in thereport. Your company has been practicing the principle of good Corporate Governance overthe year. The Board of Directors supports the broad principles of Corporate Governance. Inaddition to the basic governance issues the Board lays strong emphasis on transparencyaccountability and integrity.

LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2017-18 toBSE where the Company's Shares are listed.

DEMATERIALISATION OF SHARES:

88.32% of the company's paid up Equity Share Capital is in dematerialized form as on31st March 2017 and balance 11.68% is in physical form.

NUMBER OF BOARD MEETINGS HELD:

The Board of Directors duly met 4 times during the financial year from 1st April 2016to 31st March 2017. The dates on which the meetings were held are as follows : 21st May2016 30th July 2016 28th October 2016 and 4th February 2017.

DIRECTORS:

The Board of Directors are duly constituted. As per provisions of Companies Act 2013for retirement by rotation all executive directors are now liable to retire by rotation.

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Clause 49 ofthe Listing Agreement.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act 2013 Directors of your Company herebystate and confirm that:

a) In the preparation of the annual accounts for the year ended 31st March 2017 theapplicable accounting standards have been followed along with proper explanation relatingto material departures;

b) They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitof the company for the same period;

c) The directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

d) They have prepared the annual accounts on a going concern basis;

e) They have laid down internal financial controls in the company that are adequate andwere operating effectively.

f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and these are adequate and are operating effectively.

COMMENTS ON AUDIT OBSERVATIONS:

With respect to the Statutory Auditors' observations regarding dues of custom pleasenote that the same have not been deposited by the company on account of dispute which ispending before Delhi High Court.

COMMENTS ON SECRETARIAL AUDITOR'S OBSERVATIONS:

There is no malafide intention on the part of company and delay if any in the matteris inadvertently and caused due to oversight. The Company is in process of complying allthe requirements of the Companies Act 2013 and amended listing agreement.

AUDITORS:

Statutory Auditors:

As per Section 139 (2) of the Companies Act 2013 M/s. Ajmera Ajmera & AssociatesChartered Accountants Mumbai are not eligible to be re-appointed as an Auditors of theCompany since they have completed their term as an Auditors of the Company. Board ofDirectors have recommended appointment of M/s. Ajay Shobha & Co. (Firm RegistrationNo. 317031E) Chartered Accountants Mumbai who are required to be appointed at thisAnnual General Meeting.

Secretarial Audit :

According to the provision of section 204 of the Companies Act 2013 read with Rule 9of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theSecretarial Audit Report submitted by Company Secretary in Practice is enclosed as a partof this report Annexure-A.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:

a. CONSERVATION OF ENERGY:

The company's operations do not involve substantial consumption of power in comparisonto costs of production. However regulatory measures are there to ensure that theconsumption of power is within the norms.

b. TECHNOLOGY ABSORPTION:

The company has fully absorbed the technical know-how received from USA and Italy.

c. FOREIGN EXCHANGE EARNING AND OUTGO:

Foreign exchange earnings of the company during the year 2016-2017 were Rs. 667.10 Lacs(Previous Year Rs. 608.05 Lacs) while outgoings were Rs. 32.35 Lacs (Previous Year Rs.2.82 Lacs).

VIGIL MECHANISM:

In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company atwww.smtgrinders.com under http://www.smtgrinders.com/policies link.

RELATED PARTY TRANSACTIONS:

Related party transactions that were entered during the financial year were on an arm'slength basis and were in the ordinary course of business. There were no materiallysignificant related party transactions with the Company's Promoters Directors Managementor their relatives which could have had a potential conflict with the interests of theCompany. Transactions with related parties entered by the Company in the normal course ofbusiness are periodically placed before the Audit Committee for its omnibus approval andthe particulars of contracts entered during the year as per Form AOC-2 is enclosed asAnnexure-B.

The Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a policy to regulate transactions between the Company and its RelatedParties in compliance with the applicable provisions of the Companies Act 2013 the Rulesthere under and the Listing Agreement. This Policy was considered and approved by theBoard has been uploaded on the website of the Company at www.smtgrinders.com underhttp://www.smtgrinders.com/policies link.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as Annexure-C.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

There are no Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 during the current Financial Year.

REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and Companies(Particulars of Employees) Rules 1975 in respect of employees of the Company andDirectors is furnished hereunder:

S. No. Name Designation Remuneration paid FY 16-17 Remuneration paid FY 15-16 Increase in remuneration from previous year Ratio/Times per Median of employee remuneration
1 Mr. Ashok Sheth Chairman and Managing Director Rs. 1324014/- Rs. 1063223/- Rs. 260791/- 5.61
2 Mr. Hemendra Badani Managing Director Rs. 1377097/- Rs. 1088535/- Rs. 288562/- 5.84
3 Mr. Harsh Badani Whole Time Director Rs. 1120000/- Rs. 864101/- Rs. 255899/- 4.75

DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY:

The Company has been addressing various risks impacting the Company and the policy ofthe Company on risk management is provided elsewhere in this Annual Report in ManagementDiscussion and Analysis.

PARTICULARS OF EMPLOYEES

Details of employees which are covered under Rule 5(2) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 is as follows: A. Top ten employeesin terms of remuneration:

Name of Employee Date of Commence ment Date of resignation Total Remunera tion paid Qualification and experience Designation / nature of Duties Age Last employment held by employee Relation with Director
Ashok Sheth 10/09/1987 - Rs. 1324014/- B.S.- Mechanical Engineering USA with 48 years of experience Chairman and MD 69 N. A. himself
Hemendra Badani 10/09/1987 - Rs. 1377097/- B.Com Graduate with 43 years of experience Vice Chairman and MD 64 N. A. himself
Harsh Badani 31/01/2015 - Rs. 1120000/- B.E.- Mechanical and MBA with 10 years of experience WTD 32 N. A. himself
N M B Khan 15/06/1992 - Rs. 679279/- Commerce Graduate with 33 years of experience Compliance Officer 54 K R Kanakiya & Co . N. A.
M. I. Gohil 01/04/2001 - Rs. 505185/- ITI with 27 years of experience Assembly Manager 53 N. A. N. A.
M. A. Bidiwala 09/11/1991 - Rs. 502110/- DME with 26 years of experience QC and Development Manager 45 N. A. N. A.
Atul Modi 01/11/1996 - Rs. 409868/- M.Com with 21 years of experience Purchase Officer 49 Geeta valves N. A.
V. S. Uttekar 01/09/1991 - Rs. 348474/- ITI with 26 years of experience Sr. Assembly operator 49 N. A. N. A.
V. D. Parmar 01/09/1991 - Rs. 344865/- ITI with 26 years of experience Sr. Machine shop operator 50 N. A. N. A.
I. A. Patel 01/02/1996 - Rs. 343973/- ITI with 21 years of experience Sr. Marking and Scheduler 50 Plastic Pulverising Mill N. A.

B. Employed throughout the year under review & were in receipt of remuneration inaggregate of not less than Rs. 10200000/- p. a. or Rs. 850000/- per month if employedfor part of the year: N. A. C. Person who are getting more remuneration than MD WTD ormanager and hold 2% or more equity shares together with spouse and dependent children: N.A.

INTERNAL FINANCIAL CONTROLS

Your Company has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.

POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy against sexual harassment at the workplace in line with the provisions of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and the Rules there under. The Policy aims to provide protection to employees at theworkplace and prevent and redress complaints of sexual harassment and for mattersconnected or incidental thereto with the objective of providing a safe workingenvironment where employees feel secure. The Company has not received any complaint ofsexual harassment during the financial year 2016-17.

DETAILS OF FRAUDS REPORTED BY THE AUDITORS

No frauds have been reported by the auditors under sub-section 12 of section 143 of thecompanies Act 2013.

ACKNOWLEDGEMENT:

Directors take this opportunity to express their thanks to various departments of theCentral and State Government Bankers Material Suppliers Customers and Shareholders fortheir continued support and guidance. The Directors wish to place on record theirappreciation for the dedicated efforts put in by Employees of the Company at all levels.

For and on behalf of Board of Directors

ASHOK J SHETH

Chairman and Managing Director

DIN: 00174006

Place: Mumbai

Date: 13/05/2017