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Directors Report of Solitaire Machine Tools Ltd.

Mar 31, 2015

Dear members,

The Directors have pleasure in presenting before you the Twenty Third Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2015.

FINANCIAL RESULTS:

The performance during the period ended 31st March, 2015 has been as under:

(Rs. in Lacs) Particulars Year Year Year Ended Ended Ended 31st 31st 31st March, March, March, 2015 2014 2013

Sales (Net) 1079.42 923.08 1036.45

Other Income 15.44 20.66 14.71

Increase/ (Decrease) in stocks 150.75 84.90 57.00

Profit Before Taxation 104.63 58.52 141.85

Less:

Taxation 56.00 25.00 50.00

Fringe Benefit Tax - - -

Add/Less: Deferred Tax 26.08 3.70 1.11

Net Profit after Tax 62.94 37.21 88.17

Add: Profit brought Forward from 525.39 514.75 466.16 Previous Year

Profit available for appropriation 588.33 551.96 554.34

Proposed Dividend 34.06 22.71 34.07

Corporate Tax on Proposed Dividend 6.81 3.86 5.53

Transfer to General Reserve 0.00 0.00 0.00

Balance Carried to Balance Sheet 547.45 525.39 514.75

(Rs. in Lacs)

Particulars Year Year Ended Ended 31st 31st March, March, 2012 2011

Sales (Net) 1407.65 954.97

Other Income 15.21 7.38

Increase/ (Decrease) in stocks (32.02) (45.51)

Profit Before Taxation 192.41 136.62

Less:

Taxation 65.14 48.00

Fringe Benefit Tax - -

Add/Less: Deferred Tax 5.80 (6.63)

Net Profit after Tax 134.62 77.17

Add: Profit brought Forward from 417.13 392.93

Previous Year

Profit available for appropriation 551.75 470.11

Proposed Dividend 68.13 45.42

Corporate Tax on Proposed Dividend 11.05 7.54

Transfer to General Reserve 6.41 -

Balance Carried to Balance Sheet 466.16 417.14

DIVIDEND:

Your Directors recommend dividend of Rs. 34,06,632/- per share (7.5%) on 4542176 equity shares of Rs. 10/- each for the year ended March 31, 2015 subject to members' approval.

OPERATIONS:

The operation for the year has shown growth after two years of decline in Sales and profits. The market has started slow recovery for Machine Tools industry. The acceptability of our quality and service was recognized in International market and it resulted in higher exports. Export constituted close to 45 % of total sales of the year. During the year our Grinders were sold in Australia, New Zealand, China, Italy, UK and USA. This helped the company to show the growth and profitability for the year. There was some delay in taking delivery of the grinders ready with us by customers due to various reasons. This resulted in higher inventory. However, the delayed consignments are now cleared and would help improve results for the current financial year.

The total sales were up by about 17 % to Rs. 1079.42 Lacs against previous year's sales of Rs. 923.07 Lacs. The net profit also increased by about 69 % to Rs. 62.94 lacs against previous year's Rs. 37.20 lacs.

Your company has been able to remain Debt Free for the year. The borrowings from bank are in Cash Credit account. The company has earned more from Bank deposits than the interest paid to banks.

The New Year has started with good orders in hand and general optimism in the industry for higher growth in future. The expected growth in Infrastructure, Defense, Aerospace and Energy sector would help in having more disposable income in hands of working people. This normally results in higher sales in Automotive and Engineering industry. Similarly exports of automotive and other components has seen higher demand and resulted in higher exports in time to come. On Export Front also your Company has orders in hands from Brazil, Argentina, UK and USA. More orders are expected from other export markets. The Domestic Front is also looking up.

EEPC has recognized the Export efforts of Your Company and has awarded Star Performer for the Year 2012 -2013 for western region. The award was handed over by Gujarat Chief Minister, Mrs. Anandiben Patel to Mr. Harsh Badani in Ahmedabad.

The company has been able to reduce the input cost by about 1 % during the year inspite of higher cost in some area of procurement and higher cost of import due to depreciation of Rupee. The total cost was reduced by about 4 % by curtailing expenses. Further cuts in expenses are being planned to improve the working.

The Company had participated in IMTEX 2015 at Bangalore in January 2015. The Micro Centerless Grinder and Double Disk Grinder were launched at the exhibition. The response to new as well as existing product range was good. The first Micro Centerless grinder is being tooled up for a tiny medical implement component and is expected to be supplied to an Export Oriented customer. The company is developing another model for Engine valve industry and it expects to have orders for the same in current and future years. The continuous Development activity has helped Your Company to stay ahead of competition and compete with International manufacturers in Europe, USA, Japan etc.

The Company continued it's social responsibility as far as possible with it's own resources.

The company thanks it's customers for continuous support and faith in meeting their requirements. The Company's personnel have worked hard to achieve these targets and work for better future. The Company thanks it's Bankers and all other agencies for their continued support.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As required under Clause 49 of the Listing Agreements with Stock Exchanges, the Management Discussion and Analysis Report is enclosed as a part of this report.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

Report on Corporate Governance and Management Discussion and Analysis Reports along with Certificate of the Company Secretary in Practice pursuant to clause 49 of the Listing Agreement with the Stock Exchanges has been included in the report. Your company has been practicing the principle of good Corporate Governance over the year. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2015-16 to BSE where the Company's Shares are listed.

DEMATERIALISATION OF SHARES:

84.94% of the company's paid up Equity Share Capital is in dematerialized form as on 31st March, 2015 and balance 15.06% is in physical form.

NUMBER OF BOARD MEETINGS HELD:

The Board of Directors duly met 4 times during the financial year from 1st April, 2014 to 31st March, 2015. The dates on which the meetings were held are as follows:

10th May, 2014, 2nd August, 2014, 1st November, 2014 and 31st January, 2015.

DIRECTORS:

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

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

DIRECTORS RESPONSIBILITY STATEMENT:

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

a) In the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) They have 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 of the company for the same period;

c) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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 and were operating effectively.

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

COMMENTS ON AUDIT OBSERVATIONS:

With respect to the Statutory Auditors' observations regarding dues of custom, please note that, the same have not been deposited by the company on account of dispute which is pending 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 matter is inadvertently and caused due to oversight. The Company is in process of complying all the requirements of the Companies Act, 2013 and amended listing agreement.

AUDITORS:

Statutory Auditors:

The Auditors, M/s. Ajmera Ajmera & Associates, Chartered Accountants, Mumbai retire at this Annual General Meeting and being eligible, offer themselves for reappointment.

Secretarial Audit :

According to the provision of section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report submitted by Company Secretary in Practice is enclosed as a part of 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 comparison to costs of production. However, regulatory measures are there to ensure that the consumption 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 2014-2015 were Rs. 490.84 Lacs (Previous Year Rs. 292.89 Lacs) while outgoings were Rs. 0.74 Lacs (Previous Year Rs. 1.88 Lacs).

VIGIL MECHANISM:

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.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's length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Company's Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as per Form AOC-2 is enclosed as Annexure-B.

The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules there under and the Listing Agreement. This Policy was considered and approved by the Board has been uploaded on the website of the Company at www.smtgrinders.com under http://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 annexed herewith as Annexure-C.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

There are no Loans, Guarantees and Investments covered under the provisions of Section 186 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 and Directors is furnished hereunder:

S. Name Designation Remuneration No. paid FY 14-15

1 Mr. Ashok Chairman Rs. 10,58,502/- Sheth and Managing Director

2 Mr. Hemendra Managing Rs. 10,54,310/- Badani Director

3 Mr. Harsh Whole Time Rs. 7,10,265/- Badani Director

S. Name Remuneration Increase in Ratio/Times No. paid FY 13-14 remuneration per Median from of employee previous remuneration year

1 Mr. Ashok Sheth Rs. 10,35,000/- Rs. 23,502/- 5.75



2 Mr. Hemendra Badani Rs. 9,52,000/- Rs. 1,02,310/- 5.73



3 Mr. Harsh Badani Rs. 5,84,000/- Rs. 1,26,265/- 3.86

DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY:

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

ACKNOWLEDGEMENT:

Directors take this opportunity to express their thanks to various departments of the Central and State Government, Bankers, Material Suppliers, Customers and Shareholders for their continued support and guidance. The Directors wish to place on record their appreciation 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: 17/06/2015


Mar 31, 2013

TO THE MEMBERS: The Directors have pleasure in presenting 21st Annual Report of your company together with the Audited Accounts for the year ended March 31, 2013. FINANCIAL RESULTS: The financial results of the company for the year under review with comparison thereof with last four year's results are summarized below: (Rs. in Lacs) Particulars Year Year Year Year Year Ended Ended Ended Ended Ended 31st 31st 31st 31st 31st March, March, March, March, March, 2013 2012 2011 2010 2009 Sales (Net) 1036.45 1407.65 954.97 626.41 757.05 Other Income 14.71 15.21 7.38 12.42 17.64 Increase/(Decrease) in stocks 57.00 (32.02) (45.51) (38.02) 131.75 Cash Profit Before Depreciation 207.34 278.58 210.59 97.24 163.25 and Taxation Less: Depreciation 65.49 75.43 71.17 68.81 64.73 Taxation 50.00 65.00 48.02 6.50 30.00 Fringe Benefit Tax - - 2.00 Add/Less: Deferred Tax 1.11 5.80 (6.63) 4.83 3.59 Net Profit after Tax 88.17 134.62 77.17 17.14 62.22 Add: Profit brought Forward from 466.16 417.13 392.93 375.79 313.56 Previous Year Profit available for appropriation 554.34 551.75 470.11 392.93 375.79 Proposed Dividend 34.07 68.13 45.42 - - Corporate Tax on Proposed 5.53 11.05 7.54 - - Dividend Transfer to General Reserve 0.00 6.41 - - - Balance Carried to Balance Sheet 514.75 466.16 417.13 392.93 375.79 DIVIDEND: Your Directors recommend dividend of Rs. 0.75/- per share (7.50%) on 45,42,176 equity shares of Rs. 10/- each for the year ended March 31, 2013 subject to members' approval. OPERATIONS: The operation for the year has shown decline in sales and profit. The Capital Goods industry has slowed down substantially in past year due to slow down in Infrastructure projects and Automotive industry. Machine Tools are heavily dependent on Automotive industry and India had seen first time decline in vehicle production in almost a decade. The total net sales has declined by about 26 % to Rs. 1036.45 Lacs against previous year Rs. 1407.65 Lacs. The net profit has also declined by about 34 % from Rs. 134.62 Lacs to Rs. 88.17 Lacs. The decline was principally due to the fact that some of the customers did not pick up their ordered machines in time. In spite all this downturn in the year, your company has still remained Debt Free except small loans in Cash Credit account. The prospect for current financial year has been steadily improving. We have about six months orders in hand. Our sales of machines to USA will grow from 13 grinders in last financial year to over 20 grinders in current financial year. We have also started small parts exports to U.K. and it is slowly growing. Efforts are continuing to explore markets, in Argentina, Brazil, Malaysia, Turkey and New Zealand. The inquiry for machines has grown in last 3 months and it gives us hope that there will be upturn in coming few months. During the last year, the company entered in to Technical Klnow how agreement with an Italian company, Laboratorio Eccellenza Italiana for development of CNC Double Disk Grinder. A conceptual photo is on last inner page of this report. Double disk grinders are used in mass production of components like Bearings, Piston Pins, Connecting rods, U J Cross, Engine valves and variety of automotive and engineering components. The development work is in progress and first grinder is expected to be ready for trials in September 2013. . The slowdown in work was also used by our Engineering colleagues to start development activity for other grinders to augment our capability to serve wider industry group and also use available manufacturing capacity to meet future demand from all sectors. A MICRO Centerless grinder is being developed to grind components used in Medical Implement field and this requirement is currently being met by imports from Europe and USA. One of the major Automotive industry segment being served by the company is Engine Valve and practically entire grinding operation in this manufacturing are being met by Solitaire. One of the operation of grinding was not feasible with Centerless grinding. The new process and grinder is being developed to meet with this requirement. The company has been able to maintain the raw material and manufacturing cost in line of the sales. The inventory has grown due to non-shipment of the machines to customers. The company in the year distributed funds to Employees children's education as part of our Corporate Social Responsibility. The company thanks its customers for continuous support and help to improve quality, service and capability to do better for the future. The company's personnel have worked with zeal to meet the growing expectations of customers. The company thanks its bankers for continued support during the year. DIRECTORS: Mr. Anil J. Kothari, Director and Dr. Amita S. Shah, Director of the company are liable to retire by rotation being eligible, offers themselves for re-appointment. The Board recommends their reappointment. The Board of Directors is duly constituted. DIRECTORS RESPONSIBILITY STATEMENT AS REQUIED UNDER SECTION 217(2AA) OF THE COMPANIES ACT, 1956: The Directors state: i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to the material departures. ii) That the directors have selected such accounting policies and applied them consistently and made judgements 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) That the directors have 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) That the directors have prepared the annual accounts on a going concern basis. CORPORATE GOVERNANCE: Report on Corporate Governance and Management Discussion and Analysis Reports along with Certificate of the Company Secretary in Practice pursuant to clause 49 of the Listing Agreement with the Stock Exchanges has been included in the report. Your company has been practicing the principle of good Corporate Governance over the year. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNING AND OUTGO: a. CONSERVATION OF ENERGY: The company's operations do not involve substantial consumption of power in comparison to costs of production. However, regulatory measures are there to ensure that the consumption 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 2012-2013 were Rs. 135.07 Lacs (Previous Year Rs. 359.64 Lacs) while outgoings were Rs. 3.59 Lacs (Previous Year Rs. 60.15 Lacs). MANAGEMENT DISCUSSION AND ANALYSIS REPORTS: The Management Discussion and Analysis on Company's Performance industry trends and other material changes with respect to company wherever applicable are annexed hereto and forms part of the report. AUDITORS: , M/s Ajmera Ajmera & Associates, Chartered Accountants, Mumbai hold their office until the conclusion of the ensuing Annual General meeting and are eligible for reappointment. The members are requested to re-appoint them as Auditors of the Company till the conclusion of the next Annual General meeting. COMPLIANCE CERTIFICATE: The secretarial compliance certificate pursuant to the provision of Sec. 383A(1) of the Act, is obtained from Mr. Sachin Chhadawa, Practicing Company Secretary, Mumbai and is attached herewith for your kind perusal and forms part of this Director's Report. COST AUDIT CERTIFICATE: The cost audit certificate pursuant to the provision of Sec 209 (1) (d) of the Companies Act, 1956. is obtained from Mr H R Kapadia, a practicing Cost Accountant, Vadodara. FIXED DEPOSIT: During the financial year under consideration, the Company had not accepted nor renewed any deposits from public within the meaning of Section 58-A of the Companies Act, 1956. PARTICULARS OF EMPLOYEES: None of the employees are drawing salary whose particulars are to be included in the Directors' Report as required u/s 217(2 A) of the Companies Act, 1956. PERSONNEL & INDUSTRIAL RELATIONS: Relations with all employees were cordial and congenial atmosphere prevailed. Your Directors acknowledge the committed efforts of the employees at all levels and their satisfying contribution in management and company affairs. INSURANCE: Your Company continued to cover all assets mainly; plant & machinery, building, materials, furniture & fixtures, employees, for the possible risks like fire, flood, public liability, break- down, terrorism, Earthquake and accidents. INVESTOR EDUCATION AND PROTECTION FUND: The Company has transferred Rs. 143,043/- to Investor Education and Protection Fund during the year under review. ACKNOWLEDGEMENT: Your Director's take this opportunity to thank the customers, shareholders, suppliers, bankers, financial institutions, and central and state government for their continued support to the company. BY ORDER OF THE BOARD ASHOK J SHETH Place: Mumbai Chairman Date: 04.05.2013


Mar 31, 2012

The Directors have pleasure in presenting 20th Annual Report of your company together with the Audited Accounts for the year ended March 31,2012.

FINANCIAL RESULTS:

The financial results of the company for the year under review with comparison thereof with last four year's results are summarized below:

(Rs. in Lacs)

Particulars Year Year Year Year Year Ended Ended Ended Ended Ended 31st 31st 31st 31st 31st March, March, March, March, March, 2012 2011 2010 2009 2008

Sales (Net) 1407.65 954.97 626.41 757.05 883.48

Other Income 16.40 7.38 12.42 17.64 15.45

Increase/ (Decrease) in stocks (32.02) (45.51) (38.02) 131.75 (25.49)

Cash Profit Before Depreciation 278.58 210.59 97.24 163.25 242.92 and Taxation

Less: Depreciation 75.43 71.17 68.81 64.73 59.61

Taxation 65.00 48.02 6.50 30.00 57.00

Fringe Benefit Tax - - - 2.00 1.62

Add/Less: Deferred Tax 5.80 (6.63) 4.83 3.59 6.59

Net Profit after Tax 134.62 77.17 17.14 62.22 118.41

Add: Profit brought Forward from 417.13 392.93 375.79 313.56 245.01 Previous Year

Profit available for appropriation 551.75 470.11 392.93 375.79 363.42

Proposed Dividend 68.13 45.42 - - 34.06

Corporate Tax on Proposed 11.05 7.54 - - 5.79 Dividend

Transfer to General Reserve 6.41 - - - 10.00

Balance Carried to Balance Sheet 466.16 417.13 392.93 375.79 313.56

DIVIDEND:

Your Director's recommends dividend of Rs. 1.50 per share (15 %) on 45,42,176 equity shares of Rs. 10/- each for the year ended March 31,2012 subject to member's approval.

OPERATIONS:

The operation of the year has shown growth in terms of Sales and Net Profit. The Indian economy for Capital Goods has slowed down in recent months. However, your company did not have any serious impact on order execution or booking.

The total sales has grown by 45 % to Rs. 1539.75 lacs from previous year of Rs.1064.94 lacs. The net profit has grown by over 74% from Rs.77.17 lacs to Rs. 134.62 lacs. Export Sales has grown from Rs.68 lacs to Rs.360 lacs.

The company has paid back all its Term Loan to the bank during the year. The company is now "Debt free".

The prospect for current financial year are bright with order booking for first six months at the time of beginning of the year. Your company is also making efforts to export machines to various countries.

During the year, the company developed Bocca R 50 CNC Centerless grinder. A Line of two grinders were supplied to Lakshmi Machine Works, Coimbatore. The machines were highly automated and developed with state of the art technology.

During the current year, the company will be exhibiting machines at IMTEX 2013 in Bangalore in the month of January. New products and attachments will be launched at IMTEX.

The company has been able to maintain the raw material and manufacturing cost at lower percentage of sales inspite of increase in raw material prices and all other expenses. The inventory management and cost rationalization has helped to maintain the cost of manufacturing.

The company has adopted an Anganwadi school renovation as part of its social commitment to the community (Corporate Social Responsibility Initiative). The company expects to take up more such projects in current year.

The company thanks its customers, for continuous support and help to improve quality and productivity of the machines for better utilization.

The company's personnel have worked diligently to meet the growing demand. The result of their efforts can be seen with the growth in the business.

The company thanks its bankers for excellent support during the year.

DIRECTORS:

Ms. Padmaja K. Mukundan, Director and Ms. Shilpa Taneja, Director of the company are liable to retire by rotation being eligible, offers themselves for re-appointment. The Board recommends their reappointment. The Board of Directors is duly constituted.

DIRECTORS RESPONSIBILITY STATEMENT AS REQUIED UNDER SECTION 217(2AA) OF THE COMPANIES ACT, 1956:

The Directors state:

i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to the material departures.

ii) That the Directors have selected such accounting policies and applied them consistently and made judgements 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) That the Directors have 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) That the Directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE:

Report on Corporate Governance and Management Discussion and Analysis Reports along with Certificate of the Company Secretary in Practice pursuant to clause 49 of the Listing Agreement with the Stock Exchanges has been included in the report. Your company has been practicing the principle of Good Corporate Governance over the year. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

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

a. CONSERVATION OF ENERGY:

The company's operations do not involve substantial consumption of power in comparison to costs of production. However, regulatory measures are there to ensure that the consumption 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 2011-2012 were Rs. 359.64 Lacs (Previous Year Rs. 67.92 Lacs) while outgoings were Rs. 60.15 Lacs (Previous Year Rs. 0.16 Lacs).

MANAGEMENT DISCUSSION AND ANALYSIS REPORTS:

The Management Discussion and Analysis on Company's Performance industry trends and other material changes with respect to company wherever applicable are annexed hereto and forms part of the report.

AUDITORS:

M/s Ajmera Ajmera & Associates, Chartered Accountants, Mumbai hold their office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The members are requested to re-appoint them as Auditors of the Company till the conclusion of the next Annual General meeting.

COMPLIANCE CERTIFICATE:

The secretarial compliance certificate pursuant to the provision of Sec. 383A(1) of the Act, is obtained from Mr. Sachin Chhadawa, Practicing Company Secretary, Mumbai and is attached herewith for your kind perusal and forms part of this Director's Report.

FIXED DEPOSIT:

During the financial year under consideration, the Company had not accepted nor renewed any deposits from public within the meaning of Section 58-A of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES:

None of the employees are drawing salary whose particulars are to be included in the Directors' Report as required u/s 217(2A) of the Companies Act, 1956.

PERSONNEL & INDUSTRIAL RELATIONS:

Relations with all employees were cordial and congenial atmosphere prevailed. Your Directors acknowledge the committed efforts of the employees at all levels and their satisfying contribution in management and company affairs.

INSURANCE:

Your Company continued to cover all assets mainly; plant & machinery, building, materials, furniture & fixtures, employees for the possible risks like fire, flood, public liability, break-down, terrorism, Earthquake and accidents.

INVESTOR EDUCATION AND PROTECTION FUND:

The Company has transferred Rs. 67,769/- to Investor Education and Protection Fund during the year under review.

ACKNOWLEDGEMENT:

Your Director's take this opportunity to thank the customers, shareholders, suppliers, bankers, financial institutions, and central and state government for their continued support to the company.

BY ORDER OF THE BOARD

ASHOK J. SHETH

Place: Vadodara Chairman

Date : 28/4/2012


Mar 31, 2011

The Directors have pleasure in presenting 19th Annual Report of your company together with the Audited Accounts for the year ended March 31st,2011.

FINANCIAL RESULTS:

The financial results of the company for the year under review are summarized below:

Particulars (Rs. in Lacs) (Rs. in Lacs) Year Ended Year Ended March 31, March 31, 2011 2010

Sales (Net) 954.97 626.41

Other Income 7.37 12.42

Increase/(Decrease) in stocks (45.50) (38.02)

Cash Profit Before Depreciation & Taxation 210.59 97.24

Less : Depreciation 71.16 68.81

: Taxation 48.00 6.5

: Fringe Benefit Tax

Add/Less: Deferred Tax (6.62) 4.83

Net Profit after Tax 77.17 17.14

Add: Profit brought Forward from 392.93 375.79 Previous year

Profit available for appropriation 470.10 392.93

Proposed Dividend 45.42 -

Corporate Tax on Proposed Dividend 7.54 -

Transfer to General Reserve - -

Balance Carried to Balance Sheet 417.13 392.93

DIVIDEND:

Your directors recommend dividend of Rs. 1/-per share (10%) on 4542176 equity shares of Rs. 10/-each for the year ended March 31,2011 subject to members approval.

OPERATIONS:

The operation for the current year has shown growth in terms of Sales & Net Profit. The Indian economy is growing at unprecedented level and same is being reflected in the performance of your company.

The total sale has grown by 54% to Rs. 1060.94 lacs from previous year of Rs.685.80 lacs. The Net Profit has grown by over 300 % from Rs. 17.14 lacs to Rs.75.17 lacs.

The prospects for current financial year are also bright with good order booking for the first 6 to 7 months at the beginning of the year. The company has been able to make breakthrough in exports by receiving orders from Australia and Turkey besides regular orders from USA. Negotiations are also being made now to manufacture machines for Bocca & Malandrone Sunebo S.p.A for European market.

During the year company has now developed 5 Axis CNC Centerless Grinder and a line of 3 Grinders was supplied to Rane Engine Valve, Trichy. During the current year, similar lines of high quality grinders are being manufactured to meet customers demand.

During the year company had exhibited several grinders at IMTEX 2011. The response was positive and new inquiries were generated and several orders have been received.

The company has been able to maintain the raw material and manufacturing cost at lower percentage of sales inspite of increase in raw material prices and all other expenses. The inventory management and cost rationalization has helped to main the cost of manufacturing.

The company thanks its customers for continuous support and help improve quality and productivity of the machines for better utilization.

The companys personnel have worked diligently to meet the growing demand. The results of their efforts can be seen with the growth in the business.

The company thanks its bankers for excellent support during the year.

DIRECTORS:

Dr. Amita S.Shah, Director and Ms. Rashmi Desai, Director of the company are liable to retire by rotation being eligible, offers themselves for re-appointment. The Board recommends their reappointment. The Board of Directors is duly constituted.

DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 217(2AA) OF THE COMPANIES ACT, 1956:

The Directors state:

i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to the material departures.

ii) That the directors have 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) That the directors have 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.

That the directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE:

Report on Corporate Governance and Management Discussion and Analysis Reports along with Certificate of the Company Secretary in Practice pursuant to clause 49 of the Listing Agreement with the Stock

Exchanges has been included in the report. Your company has been practicing the principle of good Corporate Governance over the year. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

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

a. CONSERVATION OF ENERGY:

The companys operations domot involve substantial consumption of power in comparison to costs of production. However, regulatory measures are there to ensure that the consumption 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 2010-2011 were Rs. 67.92 Lacs (Previous Year Rs. 59.93 Lacs) while outgoings were Rs. 0.16 Lacs (Previous Year Rs. 5.28 Lacs).

MANAGEMENT DISCUSSION AND ANALYSIS REPORTS:

The Management Discussion and Analysis on Companys Performance industry trends and other material changes with respect to company wherever applicable are annexed hereto and forms part of the report.

AUDITORS:

M/s Ajmera Ajmera & Associates, Chartered Accountants, Mumbai hold their office until the conclusion of the ensuing Annual General meeting and are eligible for reappointment. The members are requested to re- appoint them as Auditors of the Company till the conclusion of the next Annual General meeting.

COMPLIANCE CERTIFICATE:

The secretarial compliance certificate pursuant to the provision of Sec. 3 83 A( 1) of the Act, is obtained from Mr. Sachin Chhadawa, Practicing Company Secretary, Mumbai and is attached herewith for your kind perusal and forms part of this Directors Report.

FIXED DEPOSIT:

During the financial year under consideration, the Company had not accepted nor renewed any deposits from public within the meaning of Section 5 8-Aof the Companies Act, 1956.

PARTICULARS OF EMPLOYEES:

None of the employees are drawing salary whose particulars are to be included in the Directors Report as required u/s 217(2 A) of the Companies Act, 1956.

PERSONNEL & INDUSTRIAL RELATIONS:

Relations with all employees were cordial and congenial atmosphere prevailed. Your Directors acknowledge the committed efforts of the employees at all levels and their satisfying contribution in management and company affairs.

INSURANCE:

Your Company continued to cover all assets mainly; plant & machinery, building, materials, furniture & fixtures, employees for the possible risks like fire, flood, public liability, break-down, terrorism, Earthquake and accidents.

INVESTOR EDUCATION AND PROTECTION FUND:

The Company has not required to transfer any amount to Investor Education and Protection Fund during the year under review.

ACKNOWLEDGEMENT:

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, financial institutions, and central and state government for their continued support to the company.

BY ORDER OF THE BOARD

ASHOKJ.SHETH Chairman

Place: Mumbai Date: 14/05/2011


Mar 31, 2010

The Directors have pleasure in presenting 18th Annual Report of your company together with the Audited Accounts for the year ended March 31,2010.

FINANCIAL RESULTS:

The financial results of the company for the year under review with comparison thereof with last four years results are summarized below:

(Rs. in Lacs) Particulars Year Year Year Year Year Ended Ended Ended Ended Ended 31st 31st 31st 31st 31st March March March March March 2010 2009 2008 2007 2006 Sales (Net) 626.41 757.05 883.48 702.63 545.08 Other Income 12.42 17.64 15.45 12.57 7.26 Increase/(Decrease) in stocks (38.02)131.75 (25.49) 32.55 23.24 Cash Profit Before Depreciation and Taxation 97.24 163.25 242.92 188.94 156.89 Less: Depreciation 68.81 64.73 59.61 44.60 39.68 Taxation 6.50 30.00 57.00 45.00 45.00 Fringe Benefit Tax - 2.00 1.62 1.54 0.95 Add/Less: Deferred Tax 4.83 3.59 6.59 2.75 10.27 Net Profit after Tax 17.14 62.22 118.41 101.01 81.53 Add: Profit brought Forward from Previous Year 375.79 313.56 245.01 185.84 139.20 Profit available for appropriation 392.93 375.79 363.42 286.85 220.73 Proposed Dividend - - 34.06 27.25 22.71 Corporate Tax on Proposed Dividend - - 5.79 4.59 3.19 Transfer to General Reserve - - 10.00 10.00 9.00 Balance Carried to Balance Sheet 392.93 375.79 313.56 245.01 185.84

DIVIDEND:

In view of the uncertainty prevailing in the Industry and decline in profits due to recession in last year, your board has considered it prudent to not recommend the dividend for the year under review.

OPERATIONS:

The operations for the current year have not kept pace with the industry. The downward trend was based on Export market. The export to USA had gone down by almost 62% in current year due to down turn in demand. The severe recession in Europe also did not help, as we could not get any orders from customers, as was envisaged earlier.

The other factors contributing to down ward trend was non co operation by some of our employees during the last quarter of the year. This resulted in loss of production and sales. The issues are b^ing resolved for better co operation in current year and future.

We were still req uired to hold inventory of some of the special purpose grinders built for customers and not picked up by them, due tothcir own problems. The order value of such grinders approximates to Rs. 1.25 crores.

The company was able to reduce the inventories with proper controls on purchase and better utilization of resources. No major capital expenses were made, as the company had built enough capacity in terms of building and equipment in previous years. The cost rationalization at various stages of manufacturing was implemented to improve on productivity.

The company thanks its customers and suppliers for excellent support provided in the current year.

The company also received excellent support from its bankers to tide over the difficult times in past two years.

The company has started the current year with pending orders of about Rs.5.00 crores and as industrial growth is foreseen, the company can expand its sales in current year. In January 2011, company will participate in IMTEX 2011 exhibition in Bangalore and hope to receive good response from customers in India and abroad.

DIRECTORS:

Ms. Shilpa Taneja, Director and Mr. A. J. Kothari, Director of the company are liable to retire by rotation being eligible, offers themselves for re-appointment. The Board recommends their reappointment. The Board of Directors is duly constituted.

DIRECTORS RESPONSIBILITY STATEMENT AS REQUIED UNDER SECTION 217(2AA) OF THE COMPANIES ACT, 1956:

The Directors state:

i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to the material departures.

ii) That the directors have selected such accounting policies and applied them consistently and made judgements 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) That the directors have 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) That the directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE:

Report on Corporate Governance and Management Discussion and Analysis Reports along with Certificate of the Company Secretary in Practice pursuant to clause 49 of the Listing Agreement with the Stock Exchanges has been included in the report. Your company has been practicing the principle of good Corporate Governance over the year. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

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

a. CONSERVATION OF ENERGY:

The companys operations do not involve substantial consumption of power in comparison to costs of production. However, regulatory measures are there to ensure that the consumption of power is within the norms.

b. TECHNOLOGYABSORPTION:

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

MANAGEMENT DISCUSSION AND ANALYSIS REPORTS:

The Management Discussion and Analysis on Companys Performance industry trends and other material changes with respect to company wherever applicable are annexed hereto and forms part of the report.

AUDITORS:

M/s Ajmera Ajmera & Associates, Chartered Accountants, Mumbai hold their office until the conclusion of the ensuing Annual General meeting and are eligible for reappointment. The members are requested to re-appoint them as Auditors of the Company till the conclusion of the next Annual General meeting.

COMPLIANCE CERTIFICATE:

The secretarial compliance certificate pursuant to the provision of Sec. 383A(1) of the Act, is obtained from Mr. Sachin Chhadawa, Practicing Company Secretary, Mumbai and is attached herewith for your kind perusal and forms part of this Directors Report.

FIXED DEPOSIT:

During the financial year under consideration, the Company had not accepted nor renewed any deposits from public within the meaning of Section 58-Aof the Companies Act, 1956.

PARTICULARS OFEMPLOYEES:

None of the employees are drawing salary whose particulars are to be included in the Directors Report as required u/s 217(2A) ofthe CompaniesAct, 1956.

PERSONNEL & INDUSTRIAL RELATIONS:

Relations with employees were cordial. However, certain sections of employees have not contributed as much as required of them. Your Directors expects better commitment of the employees at all levels and their satisfying contribution in management and company affairs.

INSURANCE:

Your Company continued to cover all assets mainly; plant & machinery, building, materials, furniture & fixtures, employees for the possible risks like fire, flood, public liability, break-down, terrorism, Earthquake and accidents.

INVESTOR EDUCATION AND PROTECTION FUND:

The Company has not required to transfer any amount to Investor Education and Protection Fund during the year under review.

ACKNOWLEDGEMENT:

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, financial institutions, and central and state government for their continued support to the company.

BY ORDER OF THE BOARD A.J.SHETH Place: Vadodara Chairman Date: 22nd May, 2010

 
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