Solitaire Machine Tools Ltd

To,

The Members of

Solitaire Machine Tools Limited.

Your Directors are pleased to present the 32^nd Annual Report and the Audited Financial Statements for the year ended 31^st March, 2024. The Financial results are shown as below:

1. FINANCIAL RESULTS:

Your Company's financial performance for the year ended March 31, 2024 is as below:

(? in Lakhs)

2. DIVIDEND

Your Directors recommend dividend of Rs. 79,48,808- which would be 17.5 % on 45,42,176 equity shares of Rs. 10/- each for the year ended March 31, 2024 subject to members' approval.

3. REVIEW OF OPERATIONS:

The operations of the year has shown growth in Sales and Net Profit. The year saw the highest Sales ever achieved by the Company and for first time it crossed 20 crore sales in the year. The sales was 11.7% higher than previous year. The Net profit also jumped up by 13% over the previous year. The growth was possible by positive confidence in Indian Economy and Exports. The automotive industry has seen good results with emphasis on quality automotive components meeting stringent quality parameters for exports. Solitaire's efforts were fruitful to be able to meet customer's expectations and help our country reach economic heights to be world's Fifth Largest Economy.

The Export market was slow this year. However, new inquiries are coming up from different markets as manufacturing is shifting from industrialized countries to developing countries. The Export to U.S.A. and U.K. continues and would possibly increase in new year.

The year saw a leap in supply of machines to Department of Atomic Energy, Government of India. Over 20% of sales for the year to this organization. As dependence increases on nuclear power to meet need of energy, the requirement for Grinders will come up in coming years.

The new plant in Halol-Maswad GIDC is nearing completion. The building is almost ready and other infrastructure facilities are being installed. The Plant has it's own sewage treatment plant, fire fighting infrastructure with it's own 1,50,000 liter water storage tanks, water harvesting wells, electrical infrastructure and would have over 150 trees planted this monsoon. The Solar Power modules would be taken up later in the year. The Year ended shows total investment of over 5 Crores in this plant and only about 2 Crore as term loan. Rest of the funding was done from internal accrual, of which about 2 Crores have been spent during this year. The shifting of equipment from Chhani and Gorwa plant should start around September and would take about 4 months to complete the process. All efforts would be made to ensure that production of machines' does not get affected as far as possible.

Company has sanctioned term loan from ICICI Bank for 6.5 Crores. During last year, we borrowed about 2 Crores to meet Halol construction activities. More funds would be drawn as required.

The Company further invested approximately Rs. 83 lakhs in other capital expenses during the year in existing plant and it was also met from internal accrual.

We would be participating in IMTEX 2025 in Bangalore. We plan to exhibit 3-4 machines at the exhibition.

The Company continues with our own Social Responsibility program for our own employees and their families. Employee's children are provided with cash gift and school/collage kits for the year through our Chairman Emeritus P. J. Sheth Education Fund. Dussehra, Rangoli competition for employees and get-togather lunch of all employees are planned to strengthen bonding of SMT family. SMT has 90 employees including contract employees. It also includes 5 female employees.

The Company continues to train employees for better skill and able to handle work in plant as well as at customer's site. Company Thanks all employees for their co-operation.

The Company thanks all the customers who supported us during the year and put their F aith in us to meet their requirements.

The Company thanks its Bankers, Vendors, various Government agencies for their continued support.

4. TRANSFER TO RESERVE

The Board of Directors of your company has decided not to transfer amount to the Reserves for the year under review.

5. SHARE CAPITAL

As at March 31, 2024, and as at the date of this report, the authorized share capital of the company is 5,75,00,000 (Rupees Five Crore Fifty Seven Lakhs only) divided into 57,50,000 equity shares of 10/- each. The paid up capital of the company is 4,54,21,760/- (Rupees Four Crore Fifty Four Lakhs Twenty One Thousand Seven Hundreds Sixty Only) divided into 45,42,176 equity shares of 10/- each.

During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.

6. BOARD OF DIRECTORS

Mr. Ashok J. Sheth (DIN: 00174006), Mr. Hemandra Badani (DIN: 0014330), Mr. Harsh Badani (DIN: 02282965), Mr. Bharat Shah (DIN: 08392598), Ms. Kesha Tanna (DIN: 08439863) and Ms. Nishita Rajput (DIN: 08392556) were the Directors on the Board at the beginning of financial year. However, the following changes were occurred till the date of the approval of Directors Report.

? Mr. Ashok J. Sheth, Chairman & Managing Director of the Company liable to retire by rotation has been reappointed in the 31^st Annual General Meeting of the Company held on 1^st July, 2023.

? Ms. Shilpa Taneja, Director of the Company liable to retire by rotation has been reappointed in the 31^st Annual General Meeting of the Company held on 1^st July, 2023.

? Mr. Ashok J. Sheth, Chairman &Managing Director of the Company had resigned from the post of Managing Directorship of the Company w.e.f. 31^st August, 2023 and appointed as Chief Financial Officer w.e.f. 01^st September, 2023 but he will continue as Chairman of the Company

? Mr. Hemandra Badani, Managing Director & Chief Financial Officer of the Company has resigned as Chief Financial Officer w.e.f. 31^st August, 2023, he will continue as Managing Director and appointed as Vice-Chairman.

? Your Company has 7 (Seven) Directors as on 31^st March, 2024 namely:

? As per the provisions of the Companies act, 2013, Mr. Harsh Badani, Whole-Time Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment.

7. KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and Section 203 of the Companies Act, 2013 are as mentioned below:

-I- Mr. Ashok Sheth has resigned from the post of Managing Director w.e.f. 31^st August, 2023.

4- Mr. Hemandra Badani has resigned from the post of Chief Financial Officer w.e.f. 31^st August, 2023.

4- Mr. Raman Prajapat has resigned from the post of Company Secretary & Compliance Officer w.e.f. 30^th September, 2023.

* Mr. Ashok Sheth has been appointed as Chief Financial Officer of the Company w.e.f. 1^st September, 2023.

@Ms. Krishna Naik has been appointed as Company Secretary & Compliance Officer of the Company w.e.f. 10^th November, 2023.

8. CHANGE IN NATURE OF BUSINESS

During the year under review, there is no change in the nature of business of the company.

9. MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS 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 statements relate on the date of this report. There has been no change in the nature of business during the year.

10. 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 31^st March, 2023, 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.

11. SUBSIDIARIES. JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company does not have any Subsidiaries, Joint Ventures and Associate Companies.

12. PUBLIC DEPOSITS

During the financial year 2023-24, your Company has neither accepted nor renewed any fixed deposits within the meaning of section 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.

13. SHIFTING OF REGISTERED OFFICE OF THE COMPANY

The Company has received approval of Registrar of Companies on 26^th July, 2023 for shifting of Registered Office from Mumbai in the State of Maharashtra to Vadodara in the State of Gujarat. Hence the Registered office of the Company has shifted from Mumbai to Vadodara.

14. DISCLOSURE RELATING TO REMUNERATION AND NOMINATION POLICY

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The details of this policy may be accessed from company's website at www. smtgrinders.com.

15. INDEPENDENT DIRECTORS' MEETING

Independent Directors of the Company had met during the year under review, details of which are given in the Corporate Governance Report.

16. BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and Individual Directors pursuant to the provisions of the Companies Act, 2013 and the Corporate Governance requirements as prescribed by the SEBI Regulations.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning, etc.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of Committees, effectiveness of Committee meetings, etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of the Individual Directors on the basis of the criteria such as the contribution of the Individual Director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of Executive Director and Non-Executive Director. The same was discussed in the Board Meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its Committees and Individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire board, excluding the Independent Director being evaluated.

17. MEETINGS

The details of the number of Board and other Committee meetings of your Company are set out in the Corporate Governance Report which forms part of this Report.

18. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) and 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Board relies on their declaration of independence.

19. COMMITTEES OF THE BOARD

There are currently three Committees of the Board, as follows:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders' Relationship Committee

Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the “Report on Corporate Governance”, a part of this Annual Report.

20. CORPORATE GOVERNANCE REPORT

As per Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Auditors confirming compliance forms an integral part of this Report.

21. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

1. Industry Structure and Development:

The Company is part of the industry broadly known as Capital Goods. The Capital Goods Industry consists of various products in different segments like Auto Ancillary industry, General Engineering industry, Aerospace and Defence Industry, Steel and Textile Industry. The Company is part of Capital Goods Industry known as Machine Tools Industry catering to various segments as explained above. Being part of Capital Goods Industry, fortunes of company is directly linked to the growth and progress of the industry to which it caters. The other relevant factors having bearing on the industry are government policies, import export policies, and incentive for investment available to the industries.

The Centerless Grinders manufactured by the company are used in the industry like Automobile, Automobile Ancillaries, Textiles Machinery, Steel Industry, Bearing Industry etc.

2. Opportunities and Threats:

The growth opportunity for the machine tools industry is in direct proportion to the industrial growth of other industries like Textile Machinery Industry, Automobile Industry, Steel Industry, Bearing Industry, etc. to which the Machine Tool Industry is supplementary Industry. During the last few years, the phenomenal growth in Automobiles Industry has largely contributed to the growth of machine tools industry and opportunity lies in the further growth anticipated in the Automobiles Industry as several multinational car manufacturer shifts their production base to India. Another potential growth opportunity lies in outsourcing of Automobile ancillary products from India, which has tremendous growth potential in the coming years.

3. Segment wise Performance:

Presently, company is dealing in single segment activity namely Machine Tools - Centerless Grinding Machine.

4. Outlook:

The long-term outlook for the industry is optimistic based upon the product innovation and cutting age technology for sustaining growth. The export market especially to U.S.A., Europe, etc. will sustain and an additional avenue is opened for exports to Australia, South America, Asia & others. The domestic demand will also grow in the current year.

5. Internal Control Systems and Their Adequacy:

Considering the size and nature of the business, presently adequate internal control systems are in place. However, as and when company achieves further growth and higher level of operations, company will review the internal control system to match with changed requirement.

The company has proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against unauthorized use or disposition and that transaction are authorized and recorded correctly.

The company has constituted Audit Committee consisting of non-executive and independent Directors to look into various aspects of Accounts. The company has a clearly defined organization structure in place.

6. The Financial and Operational Performance:

The financial statement is in confirmation with the provisions of the Companies Act, 2013 and applicable accounting standard recommended by the Institute of Chartered Accountants of India. The financial statement reflects the genuine desire for the transparency and best judgment for the estimates made on prudent and reasonable bases to correctly reflect the true and fair affairs of the company.

7. Human Resource Development:

The company believes that the main strength of any organization is its people. It is the people who build the system and create a climate to suit the growth and excellence in the company. The industrial relations, during the year were cordial.

8. Cautionary statement:

Statement in this Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations or predictions may be “forward-looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company's operations include raw material availability and prices, cyclical demand and pricing in the Company's principal markets, changes in Government regulations, tax regimes, economic developments and Industrial growth within India and the countries in which the Company conducts business and other incidental factors.

22. AUDITORS:

A. Statutory Auditors

M/s. K. C. MEHTA & CO. LLP, Chartered Accountants, Vadodara, (Firm Reg. No. 106237W/W100829), were appointed as Statutory Auditors of the company in the 30th AGM of the company held on 16^th July, 2022 to hold office for a period of 5 years i.e. till the conclusion of 35^th AGM for the Financial Year 2026-27.

B. Secretarial Auditor

Mr. Hemang Mehta, Practicing Company Secretary, Vadodara was appointed to conduct the secretarial audit of the Company for the financial year 2023-24, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The secretarial audit report for FY 2023-24 forms part of the Annual Report as “Annexure A” to the Board's report.

The Board has appointed Mr. Hemang Mehta, Practicing Company Secretary, Vadodara, as secretarial auditor of the Company for the financial year 2024-25.

C. Internal Auditor

During the year, your company has appointed Mr. Naaz Mohammad Barhanuddin Khan, Mumbai on 20th May, 2023 as internal auditors of the company for F.Y. 2023-24. The Board has appointed Mr. Naaz Mohammad Barhanuddin Khan, Mumbai, as Internal auditor of the Company for the financial year 2024-25.

23. 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-

A.

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.

24. LOANS. GUARANTEES AND INVESTMENTS

There are no Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 during the Financial Year 2023-24.

25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, are as under -

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 2023-2024 were Rs. 123.91 Lakhs (Previous Year Rs. 471.50 Lakhs) while outgoings were Rs. 26.94 Lakhs (Previous Year Rs. 13.96 Lakhs).

26. COMPLIANCE CERTIFICATE

A certificate from the Auditors of the company regarding compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this report.

27. COMPLIANCE WITH SECRETARIAL STANDARDS

Your Directors confirm that the Secretarial Standards issued by the Institute of Company Secretaries of India, as applicable to the Company, have been duly complied with except those mentioned in Secretarial Audit Report.

28. ANNUAL RETURN

In terms of the provisions of Section 92 and Section 134 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of your Company as on 31st March 2024 is available on Company's website www.smtgrinders.com.

29. CASH FLOW ANALYSIS

The Cash Flow Statement for the year under reference in terms of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.

30. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a vigil mechanism and formulated the Whistle Blower Policy (WB) to deal with instances of fraud and mismanagement, if any. The details of the WB Policy are explained in the Corporate Governance Report and also posted on the website of the Company www.smtgrinders.com. No complain was received during the year.

31. DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT. 2013.

As required by the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at the workplace with a mechanism of lodging complaints and the same is posted on the website of the company www.smtgrinders.com. Your company has not received any complaint on sexual harassment during the financial year 2023-24.

32. DISCLOSURE ON MAINTENANCE OF COST AUDIT

Pursuant to the rules made by the Central Government of India, the Company is not required to maintain cost records as specified under Section 148(1) of the Act in respect of its products therefore the Company has not maintained the same.

33. RISK MANAGEMENT

A well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process is in place. The objective of the

mechanism is to minimize the impact of risks identified and taking advance actions to mitigate it. The mechanism works on the principles of probability of occurrence and impact, if triggered. A detailed exercise is being carried out to identify, evaluate, monitor and manage both business and non-business risks.

34. LISTING ON STOCK EXCHANGE

The Company's shares are listed at the BSE Limited since the year 1993 and the Company confirms that it has paid the Annual Listing Fees for the year 2024-25.

35. PARTICULARS OF EMPLOYEES

The statement of disclosure of remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (the Rules) are set out as Annexure - B.

36. CORPORATE SOCIAL RESPONSIBILITY

As per the provisions of the Companies Act, Corporate Social Responsibility was not applicable during the F.Y. 2023-24.

37. DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

Your Company has adopted accounting policies which are in line with the Indian Accounting Standards prescribed in the Companies (Indian Accounting Standards) Rules, 2015 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. These are in accordance with generally accepted accounting principles in India.

38. SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review, no significant or material orders were passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its operations in future.

39. INDUSTRIAL RELATIONS

During the year under review, the relations with the most valuable human resources of the company remained cordial and peaceful. Your Directors wish to place on record their appreciation for the devoted services rendered by the staff of the company.

40. HUMAN RESOURCES:-

The Company treats its “Human Resources” as one of its most important assets. The Company's culture promotes an environment that is transparent, flexible, fulfilling and purposeful. The Company is driven by passionate and highly engaged workforce. This is evident from the fact that the Company continues to remain the industry benchmark for talent retention.

Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. The Company thrust is on the promotion of talent internally through job rotation and job enlargement.

During the year under review, there was a cordial relationship with all the employees. The Directors would like to acknowledge and appreciate the contribution of all employees towards the performance of the Company.

41. ACKNOWLEDGEMENT AND APPRECIATION

Your Directors wish to place on record their appreciation towards all associates including Customers, Collaborators, Strategic Investors, Government Agencies, Financial Institutions, Bankers, Suppliers, Shareholders, Employees and other who have reposed their confidence in the company during the period under review.

Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff, which enable the Company to deliver a good all-round record performance.

The Directors also place on record their gratitude to the Members for their continued support and confidence.