REPORT OF THE DIRECTORS (Including Management Discussion and Analysis) The Board of Directors has pleasure in presenting the 33rd Annual Report together with the Audited Financial Statements for the year ended 31st March 2015. The Management Discussion & Analysis Report has been included in the Directors Report so as to avoid duplication and repetition ECONOMIC OVERVIEW The Indian economy has been experiencing slow revival with gradual pick-up in domestic demand after continued slowdown for last three years. Undoubtedly, both Indian & Global economy appear to be in a better shape now than by gone years. Growth projection for India in coming year remains positive, mainly due to the new Government at helm and its various growth oriented programmes being planned towards boosting the demand. During the year, the Indian industry achieved a moderate growth of around 6% helped by positive expansion in manufacturing which witnessed similar growth in last few quarters although there is still some amount of reluctance and caution when it comes to capital investments for expansions and new projects. Negative sentiments that were affecting the Domestic consumer demand is now tapering. The performance of basic goods, intermediate goods and consumer durables has also improved mildly in last few quarters. Improved coal production and higher electricity generation during the year has helped raise the overall output for mining, cement, fertilizer, agriculture and other core industries. The automobile sector, except the commercial vehicle segment, closed the year on a positive note despite interest costs with major companies reporting sales growth during the fiscal. While other industry segments such as Cutting Tools, Engineering, Ceramics, Glass, Refractories have achieved moderate growth over the previous year, segments like Steel have continued to be affected due to prolonged slowdown and weak global demand. India's export continued to be positive in major export markets such as US and European countries excepting the OPEC economies which are facing Oil crisis for some time now. The improvement in industrial output in last two quarters has signalled positive trend and has an overall favourable effect on the GDP. Although the CPI inflation is experiencing sharp rise mainly driven by higher food inflation, the edging down of core inflation has more than offset the same which has resulted in a comfortable headline inflation of around 6% - much lower than 9.5% in 2013-14. RESULTS OF OPERATIONS Amidst slow pace of recovery in the domestic market and weak global demand, your company continued to put its best efforts to achieve a Top line of Rs.10560 Lacs during the year under review with a growth of 12% as compared to the previous year. With the gradual pick-up in demand in the domestic market, some of the industry segments such as Automobile, Ceramics, Cutting Tools, Engineering, Refractory and Glass have positively contributed resulting in 11% growth over the previous year. On the export front, while some of the advanced countries witnessed a moderate growth, in the developing nations especially in the South East Asian region, the demand continued to remain weak due to persistent negative forces. However, your company's good efforts in addressing some of these challenges have more than offset the uncertainties resulting in a 14% growth compared to the previous year. In the pursuit of growth and taking cognizance of medium and long term perspective, your company continues its business by focusing on three verticals- Super abrasives, Non-Super abrasives and International Business. Your company also strongly believes that the "Make in India" initiative by the Indian Government, which is slowly gaining momentum, would provide the much needed impetus for growth. Accordingly, your company continues to make necessary investments in the identified growth areas and deploy resources in order to sustain long term business growth. Super abrasive Business comprises of Diamond/CBN grinding Wheels in various bonding systems, Hones, Diamond Dressing Rolls, Segmented products & Stationary Dressers, achieved a growth of 9% over the previous year against stiff competition from both global and local. This above average industry growth achieved mainly on account of continued focused initiatives on new product developments & new application Areas including some of the import substitutions. During the year under review, your Company successfully launched some of new products which include Resinoid Wheels for Cutting Tools, Vitrified Products for Auto Component, Electroplated products for Engineering, Gear and Ceramics, Brazed Diamond Products for Textile and Precision Dressing Rolls for Defence, Gears and Bearing and certain other automotive applications. Three years back your company established its Research and Development Centre and since then, it has been strengthening its capabilities and continued augmenting the efforts in Bond / Matrix formulations & development towards building self-reliance on the technological front. During the year, your company has added new capabilities and competencies in developing some of the new applications / products for various industries. As you may be aware, your company's R & D Centre being recognized by Department of Science and Industrial Research (DSIR), Government of India also provided ample opportunity for jointly taking up research work and projects along with other well- established research laboratories on emerging technologies and new developments. The Machine Tools & Precision Components business achieved a growth of 18% over the previous year. It has been another difficult year for the Machine Tool business due to continued capex-hold / deferment of investments on projects by the targeted customers. Despite these difficulties, the performance has rather been a decent one. During the year, your company has continued to develop & launch many new models / variants of machines including CNC Rotary Surface Grinding Machines and Honing Machines. The Company has launched 7 new machines during the year which includes Vertical Single & Double spindle Honing machines, Angular Head Grinding machine and Surface Grinding Machine. These new models are expected to cater to a wider range of applications areas , while also increasing the customer and reference base, enhancing also the product basket. Your company has participated in IMTEX - 2015 exhibition held at Bangalore and showcased its growing strength & Focus on Machine Tools along with Precision Super Abrasive products. On the Precision Components front, your company, during the year has enhanced the volume of production of two new components which got added to its basket last year. Your company is constantly exploring opportunities, where it can deploy its core competency - Expertise, Experience and Knowledge on Machines & Super Abrasive Tools for producing related precision components. Your company focuses on providing Sustained competitive advantage to its customers. Consequently your company is in advanced stage of discussion with some of the prospective customers to further strengthen the precision component business and to eventually roll it out as a separate vertical for growth, going forward FOCUS ON CUSTOMER CENTRICITY Your Company has completed implementation of Customer Relationship Management (CRM) application in association with SAP. This Initiative would benefit your company in enhancing the reach and building better relationships with the customers spread not just in India but across the Globe. The CRM system will enhance the company's approach towards customer along with seamless integration of all the minute facet of marketing and sales process, which directly influence customers both in domestic and export market. Besides enhancing business relationship, it would create new opportunities for long term value creation for both customers as well as the company. Some of the major benefits: Global reach through offering value proposition and effectively addressing customer needs Effective Knowledge Management & one-stop solution platform through integration with company's Knowledge Portal, helping the team with faster responses, real time accurate information against queries and higher productivity Faster and better service levels thereby strengthening company's competitive position 360 degree view of customers and insightful customer analysis through dashboards FOCUS ON PROCESS EFFICIENCY Your Company continues to invest on its journey of Lean Management in order to enhance operational efficiency and optimum use of resource in the area of manufacturing. During the year, your company has found this initiative extremely meaningful, this addresses some of the key operational areas such as process bottlenecks, process integration in quality, planning, scheduling, and production. Your company has started realising benefits by optimal utilization of machines and equipment through proper planning and scheduling of material movement besides streamlining the process in order to drive efficiency, improvement in on time delivery and waste elimination. Overall, the implementation of lean management system in your company would ensure elimination of non-value added activities, process streamlining, effective utilization of resources and higher level of customer satisfaction. Some of the major benefits are Reduction in lead time for product delivery Reduction in rejection levels Better control on Work in Progress and Raw Material Planning Reduction in outsourcing cost Improved employee productivity Cost effective products FUTURE PROSPECTS Your Company continuously strives to align its Strategies and Business Objectives with the market in order to achieve better performance on a sustainable basis. Your company recognizes that focus on product and process innovation, adoption and deployment of new technologies and processes are critical in order to achieve its long term objectives. Accordingly, your company continues to accord high level of importance in areas such as Bond development, new product development and automation. Special efforts would be accorded to encash on the new and emerging opportunities through New Products and Applications. It will continue to expand its business in New Markets by offering Existing range of products and applications through marketing initiatives. Based on the Mega trends, in the past few years, your company has been strengthening its presence by developing new products for industry segments such as Infrastructure, Construction, Aerospace, Defense, Railways and Health care to ensure future growth and would continue its efforts in this direction to explore new opportunities in other emerging industries. All these pursuits and efforts by your company in the direction would be supplemented by participation in major national and international exhibitions, trade shows, and presence in leading industry forums, e-commerce initiatives. Your Company harnessing requisite technology on CRM and knowledge management and other value added services would enable to address the surfacing Mega trends. On the export front, your company will continue to enhance its global presence in identified countries through strategic alliances and tie-ups, exclusive Industry wise Management Representatives and continue to take advantage of the CUMI network in certain geographies enhancing global market presence. The acquisition of Winterthur Technology Group (WTG) by the US multinational 3M Corporation and resultant indirect acquisition of 40% equity shareholding in your Company continues to be a matter of contention while not being an issue. The matter continues to be under the purview of The Honorable Company Law Board (CLB), Chennai and your company expects the ownership matter to be resolved soon. SUBSIDIARY COMPANIES Wendt Grinding Technologies Limited, Thailand Wendt Grinding Technologies Limited, Thailand, your company's 100% owned subsidiary has once again delivered superior performance. During the year, it has achieved a top line of Thai Baht 858Lacs (Rs.1620 Lacs) 19% growth over last year. The Profit Before Tax was Thai Baht 139 Lacs (Rs.274 Lacs) 5% higher and the Profit After Tax has been Thai Baht 112 Lacs (Rs.222 Lacs) 8% higher than last year. This better performance has been achieved despite continued slowdown, political issues and upheaval in the region. Delivering consistent results year-on-year has been the hallmark for your subsidiary company and its steadfastness to repeat the same in the coming year as well. New customer additions, enhancing product basket and exploring new business opportunities have made up for the drop that arose as a result of decline in automobile production, lower export as well as shifting of some of the Japanese businesses out of Thailand. During the year, your subsidiary company continued its focus on participation in many Industrial and Trade Exhibitions for networking and promotions besides organizing plant visits for some of the key customers. These efforts are expected to yield long term benefits for your subsidiary. Wendt Middle East FZE, Sharjah The second wholly owned subsidiary of your Company, Wendt Middle East FZE, Sharjah has churned out another superior performance for the year under review. During the year, it has achieved an annual sale of AED 38 lacs (Rs.627 Lacs) a commendable growth of 51% over the previous year. The Profits have been AED 8 Lacs (Rs.139 Lacs) which is 28% higher when compared to previous year. As you may be aware, the manufacturing scenario in the entire region including the neighbouring countries has been severely impacted on account of continued socio-economic instability and mired by political issues resulting in contraction of average capacity utilization to around 50% level with hardly any sizeable new investments announcement by the Government and Foreign players. The UAE region being a primarily an economy driven by Oil, Construction and Tourism, continuous fluctuation in these sectors has resulted in sharp rise in inflation. Despite these challenges and continued slowdown and adversaries, your subsidiary has put its best efforts and focused on many initiatives like addition of new markets and customers, better service levels addition to enhancing product basket in the region to churn out a better than expected results CORPORATE SOCIAL RESPONSIBILITY Your Company firmly believes that an organization's true worth lies beyond its business and is best reflected by the service it renders to the community and the society. For your company, Corporate Social responsibility has always been based on the core values and transparency in all its business dealings and as such the contributions your company makes for economic development which is not limited to the workforce and their families alone but extends to the local communities, schools and society at large. Your Company makes regular contributions to various social causes like education of underprivileged school children, old age homes, orphanages and basic sanitation and toilet facility. In addition, your company lays special emphasis on tree plantation and green environment not only within its premises but also the surrounding communities by distributing free saplings. Your Company has been successfully running the Government Approved Skill Development Centre for last four years now with sole objective of providing formal vocational training in five industrial trades for uplifting the lives of young children drawn from poor, underprivileged and back-ward classes of the society. This initiative not only serves continuance of formal educations for these children but also helps them to seek gainful employment in various industries in future. With the enactment of the CSR provisions in the Companies Act 2013, the Company has put in place a CSR policy incorporating the requirements therein which is also available on the Company's website at the following link As per the provisions of the Companies Act, 2013, the Company is required to spend Rs 38.49 Lacs out of which the Company has already spent Rs 36.33 Lacs towards CSR activities during the year 2014-15. The Annual Report on CSR activities in the prescribed format is annexed herewith as ANNEXURE II. DIVIDEND Your Directors are pleased a recommend a Final Dividend of Rs 15/- per equity share of face value Rs 10/- each (150%) for the year ended 31st March 2015. This is in addition to the Interim Dividend of Rs 10/- per equity share of face value of Rs 10/- each, which was paid on 23rd February 2015. The Final Dividend, subject to approval of members at the 33rd Annual General Meeting will be paid to those shareholders whose names appear on the register of members of the company as on 23rd July'2015. If approved, the total Dividend for the financial year, including the interim dividend, amounts to Rs 25/- per equity share and will absorb Rs . 600 lacs including dividend distribution tax of Rs 100 Lacs. The Dividend will be tax-free in the hands of the shareholders TRANSFER TO RESERVES Your Company proposes to transfer Rs. 400 lacs to the General Reserve. An amount of Rs. 3592 Lacs is proposed to be retained in the Statement of Profit & Loss. FIXED DEPOSITS Your Company has not accepted any fixed deposits during the year 2014-15 and as such, there are no outstanding fixed deposits from the public as on 31st March 2015. NVESTMENT Details of investments covered under section 186 of the Companies Act 2013 are given in the notes no 13 to the financial statements TRANSFER TO THE INVESTOR EDUCATION & PROTECTION FUND Pursuant to the provision of Section 124 of the Companies Act, 2013, your Company has transferred an amount of Rs. 2.45 lacs being unclaimed dividend during the year to the Investor Education and Protection Fund (IEPF) established by the Central Government. CONSOLIDATED FINANCIAL RESULTS The Consolidated Financial Statements (incorporating the operations of the Company and its two wholly owned overseas subsidiaries), in terms of Clause 32 of the Listing Agreement and prepared in accordance with Accounting Standard 21 as specified in Companies (Accounting Standards) Rules, 2006 & also as per Sec 129 of the Companies Act'2013 , form part of this Annual Report. A statement of summarized financials of all subsidiaries of your company including capital, reserves, total assets, total liabilities, details of investment, turnover etc pursuant to General Circular issued by MCA forms part of this report. The audited annual accounts and related information of the subsidiaries is available in our website www. wendtindia.com KEY CONSOLIDATED FINANCIAL SUMMARY QUALITY High level of precision, accuracy and engineering are the most critical aspects for your company's products which in turn calls for meeting the exacting quality standards demanded by the customers across the range of industry segments. The Super Abrasives product range for your company comprises of Diamond & CBN grinding wheels and Tools in various bonding systems. The Machine Tools & Precision Components vertical include a range of precision machines, often customized, like Rotary Surface Grinding, Notch Milling, TC Ring Grinding, Honing Machines and accessories complying with the international standards and CE certifications in terms of their safety and operations Precision Components which is again falling under Non Super abrasives require very high level of precision as well as tolerance limits requiring strict adherence to quality standards and process controls and measurements. In order to ensure these requirements, your company has put in place all the Management standards such as ISO 9001, ISO 14001, TS 16949, OHSAS and SA8000. In addition, in order to fulfill the safety features and requirements of overseas customers, your company has successfully implemented and obtained the coveted EN 13236 Standards during the year. For your company, superior product Quality and consistent performance have been the main differentiators. Towards this, your company ensures that deployment of quality management standards, process robustness and practicing the standards and norms at every stage of flow is strictly adhered to by all. In order to avoid overlapping and process duplication in line with the international best practices, your company has implemented Integrated Management System (IMS). As you may be aware, your company constantly endeavors to build quality and consistency in every aspect of its business. As a result, it continues to accord high importance on training its employees on emerging technologies, makes investments on equipment and high-end machines besides application softwares such as CAD/CAM, ERP, Inspection Tools, Automation and Applications. SAFETY, HEALTH AND ENVIRONMENT (SHE Your Company is ever committed towards Safety and Health of its workforce and also places equal importance on Environment management not just within the company premises but its neighborhood as well. In order to ensure this, the senior management of the company keeps vigil on maintaining high safety standards, health and environment protection by fully complying and deploying appropriate processes and underlying guidelines as per OHSAS 18001 and ISO 14001 EMS standards. Your Company always considers its employees as the most valuable assets for the company and that the safety and health of each employee is of utmost importance and is not just a mundane necessity to ensure quality in every aspect of the business. In order to ensure this, your company continues to take various initiatives and programs such as annual health check-up plan, eye camp, physiotherapy, fitness center, blood donation camps etc., so that the employees and their families maintain good health and overall wellness. In addition, Your company continuously provides awareness training programmes and makes efforts to encourage the workforce to actively participate in relevant training programmes, workshops to perform their activities in a safe manner. Your Company continues its commitment towards sound health and workplace safety of its employees. And for this, the company ensures following and practicing safety standards and practices by all by keeping the work places free of accidents, injuries, incidents and occupational related hazards. You will be pleased to know that your company has again recorded Zero accident with no loss of man days in its operations during the year. Adherence to Safety, Health and Environmental practices are also ensured for its guests and visitors. RECOGNITIONS AND AWARDS During the year under review, Your Company received many awards and felicitations conferred by respectable organizations and apex bodies for superior achievements in different areas. These recognitions and accolades enhance the enthusiasm and optimism of the employees and is a morale booster for the Company as a whole. Your company has received the following major awards during the year. Quality Circle Awards Your Company's employees continued to exhibit their skills in various Quality Circle competitions as below National Level organized by NCQC - "Par Excellence" Award for Kaizen- 2 teams - "Par Excellence" Award for SGA- 1 team Regional Level organized by CCQC - "Golden Award" - SGA & Kaizen:3 teams - "Silver Award"- Kaizen: 1 team Environment, Health & Safety (EHS) Award Your Company has received the "4 Star" Award from CII, Southern Region in recognition of its "Excellent Commitment in Environment Health and Safety". Also received "Sectorial Award" under manufacturing sector and "Excellence Award" in Medium Scale category. Preferred Supplier Certificate Your Company has received the "Preferred Supplier Certificate" from Bosch Group. With this recognition, your company now becomes one among three preferred suppliers in India and among twenty one worldwide. This prestigious certification enables the company to become a supplier to the Bosch Group globally for supply of precision components. Green Manufacturing Award Your Company has received "Silver Medal" for Green Manufacturing from International Research Institute for Manufacturing, India (IRIM) for Environmental Care and Eco friendliness. This prestigious award focuses on assessment of four critical aspects of the organization such as Human element, Quality of input materials Operational efficiencies and Environmental friendly products Cufest 2014 Awards Your Company's employees participated in Group-level Quality competitions "Cufest 2014" (Quality Festival of CUMI), and won awards for 5S, Poster, Idea King and Quality Quiz events during the year MANAGEMENT DISCUSSION AND ANALYSIS REPORT In the sections that follow, the information required to be given in the Management Discussion and Analysis Report have been provided GENERAL PERFORMANCE REVIEW After three consecutive years of down turn and global disarray marked by muted growth, the Indian economy is finally seeing some signals of gradual pick up in the activities and positive growth trend. Although the pace of recovery has been slow, there seems to be some optimism backed by positive sentiments across all segments. Thanks to the new government and its announcements of various pro-growth programmes and fiscal measures since it came into power with absolute majority one year back. As a consequence, the Indian economy could achieve a moderate growth rate of around 5.9%, highest growth in the last four years. Backed by revival in the economy in some of the developed countries such as US, slow rise in demand in the domestic market and inflation being in comfortable zone as well as expansion of manufacturing activities, all this supplement the positivity thereby boosting demand. This has resulted in better performance of industry segments like Automobile, Auto Component, Engineering, Ceramics, Refractory and Cutting Tools compared to previous year although sectors like Steel, Construction, and Infrastructure etc are yet to return to positive zone. As mentioned in earlier section, your company's domestic business achieved a growth of 11% and the export has achieved a growth of 14% compared to the previous year with an overall 12% growth for the year on overall basis. In the domestic business, the Super abrasives products sales to industry segments like Automotive, Cutting Tools, Engineering, Ceramics, Refractories and Glass has achieved better performance over the previous year, sales to Steel and Machine tools has been lower with few project orders. During the year, your company continued to put its best efforts and new initiatives for new developments of products and applications besides working closely with customers to explore new opportunities for its products which could serve as import substitutions. For the Machine Tools & Precision Components, on the other hand, the performance level was 18% higher than last year mainly on account higher volume offtake of precision components and improved order inflow for machines during the second half of the year which as a whole helped to company to achieve the above respectable growth compared to previous year. As you may be aware, for most of the year, the customers continued their reluctance towards new capacity additions, expansions and fresh capital investments resulting in fewer machine orders from Engineering, Refractory, Steel and Automobile customers. ECONOMIC OUTLOOK The Indian economy is expected to achieve a growth rate around 6.5% in the coming year and according to the latest predictions by IMF, India growth rate will overtake China in next two years. India has become a promising investment destination for many of the foreign Companies looking forward to do business here following the launch of 'Make in India' initiative by the Government. This initiative is expected to increase the purchasing power of the common man, boost demand, and hence spur development, in addition to benefiting investors. Some of the policy measures focusing on development of agriculture, fast tracking of infrastructure projects, special emphasis on manufacturing and capital markets are expected to result in building business confidence in the coming year. The major Industry segments which are expected to benefit from the above measures are Automotive, Construction, Infrastructure, Mining, General Engineering, Steel, Defense and Aerospace, Power, Food, Services and Consumer durables during 2015-16. New investments, capacity expansions and implementation of projects in Infrastructure and Construction, Power, Engineering and allied industries are expected to take advantage of the opportunities in the coming year. INDUSTRY STRUCTURE & DEVELOPMENTS The Indian Super abrasive tooling market continues to remain fragmented in nature and operates in a highly competitive environment, mostly dominated by the presence of few organized players such as your Company and many owner driven small companies with strong focus on regional presence. Your company continues to be a preferred supplier, many a times as a single-source supplier for many major customers for a wide spectrum of industry for Super Abrasive products, with its comprehensive range and considered as Total Grinding & Honing Solution Provider. As a result of this, your company's growth continues to be dependent on the performance of these industries and customers. Major contribution to your Company's topline in the coming year is expected to come from sectors such as Automotive, Engineering, Cutting Tools, Refractory, Aerospace, Defence, Steel, Ceramics and Construction. Therefore, your Company's performance will also be in commensurate with the performance levels of these industries. As mentioned earlier, it is a constant endeavor of your company to focus on exploring every new opportunity, new projects, tenders, new customers and new industrial segments. As such, it has been working on various projects and has added some of the new products to enhance the product basket especially in the precision grinding areas. At the same time it is also consciously working on progressively minimizing dependency on few specific industries e.g Automobile and its related industries. The effect of this endeavor is evident from the fact that your company has developed many new products for precision applications for industries like Aerospace, Turbine, Gears, Defence, Construction, Infrastructure, Healthcare, Paper and Printing and Bearing. OPPORTUNITIES & THREATS Opportunities: While the growth in Indian economy is expected to remain modest in the medium term, your company would continue to have high confidence and resultant higher growth levels on account of the industry spread and wide business canvas. Added to this, the comprehensiveness of the product range be on constant search for potential business opportunities in new industries and markets as they unfold resultant to the emerging Mega trends. Your Company heavily leverages on its long experience in the industry with its comprehensive product range catering into every industry and its superior technology for manufacturing Super abrasive tooling and The Precision Grinding/Honing machines. Extension of this advantage to Precision component manufacturing in last few years has only been a natural choice for your company which has been turned out to be sizeable business for your company. It would strive to utilize the maximum and derive benefits from being the provider of Total Grinding & Honing Solution by extending its offerings "from Tools-To- Machines- To- Components". The spirit of Innovation lies behind every action at your company. This has been gaining momentum as a process for development of new products and processes. It would continue to work on this pursuit for adding more number of innovative products to the existing basket. Your Company continues to work on some of the identified new projects in both Super abrasive tooling, Machines Tools and precision components. Like previous year, it has planned some more new machine models / ranges for introduction during the coming year. As a part of driving aggressive growth, your company has also been working on few new projects for Machine Tools & Precision Components vertical which would further strengthen the business Threats As you may be aware, the Domestic Super abrasive tooling market is marked by the presence of few organized players such as your company and many unorganized players. Due to the polarized nature of the market structure where there are unorganized players in one end who are small time proprietary-driven companies often with strong regional focus and on the other end, there are organized players. The small companies, by virtue of their size and operations, continue to cater to a small section of customers and industries with a limited range of products. Focus on specific regions and addressing customer requirements with lower prices has been one of their forte. The few large organized players from both domestic and global arena focus on technology and application engineering. Almost always, the global players rely on OEM Tie-ups with established Grinding / Honing machine manufacturers, thus making use of their long established parental backgrounds right from the beginning stages, offering combination of methods involving performance, cost and technology, service lock-ins and warranty clauses. In order to address this divergence, your company continues to adopt its unique approach to improve the market presence and market share and reach both segments. While the low cost and innovative products are offered to address the low end competition, for the high end segment, it focuses on developing import substitutes based on approaches like price-to-performance measures and value addition backed by regional technical supports, hand-holding and use of customer facing technology like CRM and customer education etc. The competitive advantage for your company is derived from continuous efforts in application development and market development. This is well complemented by Product and Process innovation where it brings new developments for the customers including import substitutions in order to stay ahead of competition and create entry barrier. Your company makes all attempts to constantly harness the knowledge base and competency levels of the people in the respective product verticals BUSINESS OUTLOOK A lot depends on the Government's reform-based approach where there has been a steady flow of reforms focusing on areas like governance, ease of doing business and fiscal prudence. During the past few months, the new government has announced labour reforms, diesel price de-control; the 'Make in India' movement along with progress in GST roll out consideration. Such concrete initiatives could herald an era of sustainable growth for India. In the optimistic and cautious business environment, your Company's primary focus would be to retain its leadership position in the domestic market by continuing to offer its wide range of products, increased market reach & penetration as well as addition of new products to its basket. Besides this, your company would continue its endeavor of strengthening its presence especially in the overseas market. In order to enhance the awareness levels, brand recall and improve customer engagement levels, your company will continue its active participation in both domestic and international exhibitions & trade fairs to promote its products and services In the Super abrasive business, your Company will continue to drive the three chosen growth drivers, Innovation, New Product Development and Indigenization Efforts. While this would give stability to your company, it will also focus on capitalizing on new opportunities in industry segments with high growth potential in conjunction to ensure future growth. Machine Tools & Precision Components vertical has been gaining strength year on year and is expected to yield dividend in the coming years, with new machine launches. Increased population of machines supplied has been a point of good reference base in the industry and translates into gaining good traction in the machine tool business. Like previous years, your company has already planned few new machine launches and developments in the coming year especially for steel, refractory, engineering, auto components and automobile industries. In order to strengthen the design capabilities and automation competencies, your company in the meantime, has forged a strategic partnership with one of local leading companies well-known for its capability in design, automation and controls. The precision component business also is being strengthened with addition of new components and new accounts for long term growth. Already the new component business is seeing steady increase in volume and ramped up volumes are expected in the coming year. Simultaneously, your company is actively considering adding few more precision components to its offering in near future and accordingly will make suitable investments in creating the physical infrastructure, capacity, machineries, equipment, and human resources in this area. Towards the International Businesses, your company continues its focus on pursuing & growing the business through the established Wendt / 3M channel. Further to enhance the market reach for it's products , your company also uses CUMI's overseas marketing channels , and the other Strategic partners / Alliances in identified countries for boosting the exports. Accordingly your company has started promoting its products under CUMI & Neutral Brand as well , thereby opening up new business opportunities . Your 100% owned subsidiary in Thailand, Wendt Grinding Technologies Ltd, continues to churn out superior results year on year despite the region being repeatedly affected by global slowdown, declined demand and shifting of manufacturing base by many Japanese companies as also labor and political disturbances. The subsidiary shows enough confidence and resolve for a better performance in the coming year too. Your company's subsidiary will continue to embark on new opportunities, addition of new industry segments and markets with improved service levels, while increasing it's product basket. Your Company's second fully owned subsidiary, Wendt Middle East FZE, Sharjah has been delivering consistently better performances over last three years. As mentioned earlier, it operates in an environment that is affected by prolonged slowdown, market volatility, fall in oil prices, socio-economic crisis and declined investments in key areas in the region. However despite the turbulent uncertain conditions, restructuring and change in our Business strategy have started delivering positive results. Your subsidiary will continue to operate as the Product Availability Point (PAP) for the entire GCC region with focus on General Engineering, Aerospace, Steel, Ceramics, Auto component, Oil and Gas and associated industry segments & is expected to better it's performance in the coming year too. RISK & CONCERN Your Company follows a comprehensive and robust risk appraisal, mitigation and management process in the areas of operations, finance, technology and other business functions. Risks are uncertainties and possible outcomes from the environment which can impact a company's performance and future prospects. The Senior management of your Company is involved in mapping the risks arising out of both internal and external environment and comes out with effective plans for mitigation of these risks. Business risk mitigation helps your Company to find ways to manage situations that could adversely impact the financial, physical and human capital of the organization. The risk management and mitigation strategies enable your Company to retain its market leadership position and also improve upon the operational efficiencies to insulate it from various risks. The Risk management process for your Company encompasses the following sequence: •Identification of risks with the associated risk owners •Evaluation of the risks as to the likelihood of occurrences and related Consequences • Assessment of options for risk mitigation • Prioritizing the risk management actions • Development of risk management plans • Authorization for the execution of the risk management plans • Implementation and review of the risk management process Risk management reinforces the robustness of the business. The Senior Management of your company takes the overall responsibility of total risk management processes in the organization. Through its quest on anticipation and identifying risks before risks govern your company's actions, the Risk Management Committee of your Company analyses the potential impact of risks on the current business portfolio and decides which business should receive more focus, where to invest, what needs to be added or discontinued from the product portfolio etc. to alleviate the risks. Your Company incessantly seeks to identify, assesses, review, manage and works on developing the robustness of the system in terms of adequate internal controls and compliances. The business risks of your company are managed through cross functional Team involvement and communications. Some of the risks associated with the business and the related mitigation plans are given below. However, the risks given below are not exhaustive and the assessment of risk is based on management's perception. User Industry Concentration Risk Why is it considered as a Risk? • Significant Business exposure to select & limited sectors. • Time lag in passing of the price correction / variations in input costs to the customers. • Effect on Customer Relationship with change in guard / ownership. • Global economic scenario leading to decline in demand. • Cessation of the technology agreement and access to new developments in the super abrasive. • Rebranding of products and the resultant delay in brand establishment. • Disruptive innovation & process changes. Mitigation Plan / Counter Measure to address • De risking the business with widening the customer base, identify new industry segment & new geographies . • Exploring growth opportunities in Construction, Infrastructure, Steel, Defense, Aerospace, Glass, Ceramics and other industries. • Continuously pursuing product innovation and new application development for diverse sectors. • Improving the on time delivery levels through operational efficiency measures like Lean addressing the sustained competitive advantage. • Leveraging relationship and Engagement with the customer-WOW initiative / Exhibitions like IMTEX, participation in international shows & CRM application. • Setting up of the In-house DSIR approved R&D center. Also the innovation focusing on New Product Development, is now well embraced at Wendt to yield results. • Developing and promoting alternative brands-one being well-known-"CUMI". • Entering new geographies Competition Risk Why is it considered as a Risk? • Presence of too many unorganized small regional players often offering Low pricing strategy, free samples, higher credit days etc • Cheaper Imports from China. • Imports Direct and through OEM route. • New Big Player entry - Setting up manufacturing base in India consequent to Make in India Drive. Mitigation Plan / Counter Measure to address • Offer sustained competitive advantage to customer through operational efficiencies • Focus on Lean & Address QCD - Superior Quality, Cost competitive products & Reliable, Consistent Delivery • Internal Efficiency Measures/ process automation/ Reduce throughput time • Creating entry barriers for competition / exit barriers for customers - key account management • Continued drive on Innovation on products, process and applications • Enhancing value added services • Enhance the product basket & offerings • Increased focus on New product development • Central Monitoring System • Building agile Supply chain • Drive E-Commerce • Automation and Robotization to address Lower manufacturing cost and enhance Competitiveness Technology Risk Why is it considered as a Risk? • The rapid changes taking place in the fields of grinding technology and material science. • Adoption of Disruptive technologies like 3D printing. • Access to New Alternate technology following the expiry & Non renewal of technical collaboration agreement with Wendt GmbH post Sept 2012. Mitigation Plan / Counter Measure to address • Indigenous development of Bonds independently /external consultant • Collaboration with external consultants • Established DSIR approved R&D centre and build on self-sufficiency in technology & new products • Association with external Research laboratories / Technical institutes for technological upgradation. • Product and Process Innovations • Online Data & Information Security Risk Why is it considered as a Risk? Data breach leading to loss and critical information infrastructure breakdown Mitigation Plan / Counter Measure to address • Policy in place for Technical Controls • Business Continuity Plan and Disaster Recovery Strategy in place. • Security operations centre under process • Authorized access to the Data centre • Crisis Management Group in Place. INFORMATION TECHNOLOGY For your company harnessing the use of Technology and SAP ERP system has been an integral part of the business. A unified incorporation between various modules, being the key for deriving full benefits of the ERP had been identified and given priority by your company. Accordingly it has continued to work on some of the critical business processes such production planning, materials management, stores and receipts, financials and controls as a part SAP-CIP integration project towards productivity improvement, prioritization. This year with lean integration through SAP is been embarked on for scheduling and cycle time & Cost reduction. IT enabled Knowledge Management System which your company has been has been embarking on is expected to enhance the company's application engineering capabilities and offering technology solutions to the customers. During the year, your company has accomplished the implementation of SAP CRM business application (Customer Relationship Management) ,yet another demonstration of becoming more customer-centric. This initiative will take your company one step closer to the customers in terms of relationship management and real time interactions, better understanding of their requirements and addressing them with precise technology solutions besides giving a unique experience . In addition to this CRM is interfaced with the Knowledge Portal making it a single technology driven platform for all users to access any time and service the customers globally with insightful technology solutions with least effort and ease. INTERNAL CONTROL SYSTEM & ADEQUACY Your Company has a well-defined and documented internal control system which is effectively monitored. These measures are regularly reviewed and updated by incorporating changes in the regulatory provisions. These are regularly tested for their effectiveness by Statutory as well as Internal auditors. Your company remains committed in its endeavor & ensures an effective internal control environment that provides assurance on the efficiency and effectiveness of operations, reliability of financial reporting, statutory compliance and security of company's assets. The checks and balances in the internal control system have been time-honored to ensure that all assets are safeguarded and all transactions are authorized, recorded and correctly reported. Material errors and irregularities are detected and prevented in time. Capital and revenue expenditures are meticulously monitored and controlled with reference to approved budgets. The Company has well established, time tested, robust internal processes in place to ensure smooth functioning of the operations. This is ensured by well documented policies, authorization guidelines commensurate with the level of responsibility and standard operating procedure specific to the respective business. This is enhanced by an extensive review & monitoring system whereby the management regularly reviews your company's performance periodically as per its' relevance for both financial and operational parameters and takes timely measures to address variances, if any. The internal audit function is carried by external independent Chartered Accountant firm which covers all operational areas and ensures that the revenue has been correctly deployed and that there is no wastage / leakage of any resources. The Wendt Board, Audit Committee and the Management, review the findings and the recommendations of the Internal Audit and take corrective measures wherever necessary. Risk assessment supports identification and giving focused attention to on all high - risk expanses. The periodic reviews includes all the business critical functions, such as revenue assurance, collection, credit and risk, MIS, information technology, network security, procurement and financial reporting. The Audit Committee regularly reviews the audit plans, audit observations of both external and internal audits risk assessment and adequacy of internal controls. During the year there were no changes in internal control over financial reporting that have materially affected, or are likely to have any financial reporting lapse. The company continues its efforts to align all its processes and controls with best global practices. FINANCIAL REVIEW Earnings Revenues During the year, your company achieved total sales of Rs.10560 Lacs, higher by 12% as compared to 2013-14. While the domestic sales is 11% higher than last year at Rs. 7890 Lacs, the export sales recorded a growth of 14% compared to the previous year at Rs 2670 Lacs. As briefed earlier, the major industry segments which contributed to the growth of domestic business are auto, auto component, engineering, cutting tool, ceramics, glass, refractories etc. The improved performance in export is contributed by the higher exports to countries like UK, USA, UAE, Spain, Belgium, Austria, Australia etc. during the year. Profit before Tax Accordingly, the profit before tax is higher by 7% at Rs.1764 Lacs compared to Rs.1640 Lacs in 2013-14 Profit after Tax The profit after tax is higher by 25%, at Rs.1485 Lacs, compared to Rs.1187 Lacs in 2013-14. Liquidity and Cash Equivalents Your Company retains its status of debt free company, maintaining sufficient cash and cash equivalents to meet its futuristic strategic initiatives. Your company has been prudent in its investment policy over the years, maintaining a reasonably high level of cash and cash equivalents which enable the company to completely eliminate short and medium term liquidity risks. The objective of cash management at Wendt India is to : a. Conserve sufficient cash as reserves that will aid the company in seizing meaningful business opportunities that unfolds during the year. b. Use cash to provide sufficient working capital to address business objectives of the company & to add value to all stakeholders by continued enhancement. c. Prudently Invest surplus funds that the business generates in debt schemes of mutual funds as per Group norms. This ensures availability, safety and liquidity of Company's funds while allowing reasonable yield as per the prevailing market rates. During the year your company's investment in mutual funds increased from Rs.1272 Lacs to Rs.1436 Lacs in 2014-15, a growth of 13%, following the prudent investment policies. As the earnings are ploughed back, the capital expenditure need of your company for the year was met entirely form the mutual funds investment. Costs The Fixed costs excluding depreciation has increase by 14% compared to last year. However, fixed cost as percentage of sales controlled at 32% against 36% of last year. During the year the company has charged depreciation based on revised remaining useful life of its fixed assets as per requirement of Schedule II of the Companies Act 2013. As a result, the depreciation for the year has increased by 73%. However, your company believes the additional depreciation will even out in the coming years and also it will help in replacement of the asset faster. The variable costs have been controlled during the year through indigenization of raw material and other input costs which has helped marginally in improving the margins of the company. The Lean Management Initiative undertaken by your company has also helped in significant savings during the year. Your company's price correction initiative from both customers and key suppliers during the current year is expected to improve its profitability in the coming year. Financial Position Share Capital The paid up equity share capital as on March 31, 2015 was Rs. 200 Lacs. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. Shareholders Funds The shareholders fund as on 31.03.2015 was Rs.8990 Lacs against Rs.8231 Lacs of previous year, an increase of 9%. Accordingly, the book value of the share stands at Rs.450/- as compared to Rs.412/- during the previous year. Loan Funds Your Company has a cash credit limit with State Bank of India to bridge the short term fund requirement and only to supplement the temporary mismatches in its cash flow. Your Company does not have any interest bearing term loan. During current year, the working capital limits of your Company continues to be rated by ICRA as AA- (pronounced ICRA double A minus) rating assigned to the Rs.2.0 crore Long term Fund facilities of your Company which signifies low credit risk and stable. The short Term (Non Fund based) Rating also continued to be reaffirmed as A1+ (pronounced ICRA A one plus). Overall your Company's rating continues to be stable and low credit risk. ASSETS FIXED ASSETS Your Company continues with the policy of being prudent in its capex spend. During the current year, the capital expenditure was Rs.1102 Lacs. The major capex spent was on addition of new plant & machinery towards capability building in fast growing products and other identified areas like R&D and new products capacity enhancements, which are critical for the future growth of the company. Company continued to adopt policy of funding all the capex through the internal accruals Inventories and Sundry Debtors The overall inventory levels as on 31st Mar'2015 is Rs. 1644 Lacs, an increase by 6% over the last year. There was an increase in the work in progress inventory by Rs.58 Lacs (mainly comprising of machine inventory for sale during 15- 16), stores and spares inventory by Rs.27 Lacs and the trading inventory by Rs. 24 Lacs. This was due to delay in dispatch / clearance for from few customers. The higher inventory was also strategically necessary for addressing the On call supplies . Receivables as on 31st March'2015, were marginally higher at Rs. 2111 Lacs from last year of Rs.2021 Lacs , mirroring sales growth of 12% . However, the average credit days has come down from 67 days to 64 days due to the adoption of stringent credit control measures. Your Company's aggressive receivable management system including close follow ups and credit lock through the SAP system has ensured that receivables were kept under control and payments were received in time. Foreign Exchange Hedging Being the net exporter & Based on its export & import position, your Company continues to follow the natural hedging of foreign exchange earnings and outflow and do not take forward covers. The net forex gain during the year has been Rs.35 Lacs Financial Performance with respect to Operational Performance Despite the tough Business Scenario, your Company's Operating profit and Contribution has been better than the industry average and recorded reasonable growth. This was on account of stringent control measures taken for improved operational efficiency led by the Lean Initiative undertaken by your company and the better product mix also made it's due contribution. This was aided by accurate information & customer data, centralized drawing management system, better planning & scheduling through SAP ERP System and effective vendor management. Your Company's improved MIS reporting and ability to respond to customer with real time information helped in giving rich experience to the customers there by providing value addition to the customer. INSURANCE Your Company continued its adequate care on providing required insurance cover for your company's asset buildings, plant and machinery including inventories, and for liabilities under legislative enactments. HUMAN RESOURCE Your Company, in order to sustain its leadership position in India, finds it compelling to be relentlessly customer focused competition differentiated, performance-driven and future-capable. Your Company's Human Resource Development strategy seeks to fulfill this mandate through careful selection and rigorous implementation of a wide range of programmes and interventions. The human resource policies of your company motivate the employees to give their best and remain committed to achieve the overall objective of the company. Nurturing and development of the Human Capital is accorded high importance and is considered as valuable asset for your company. The HR policies and practices of your company are aligned to the organizational goals and objectives. The wellcrafted processes for attracting, retaining , nurturing and rewarding talent and following a transparent system to identify and reward performers has been some of the key success factors for your company boasting of longer average tenure of its employees. Individual KRAs are derived from the annual BSC (Balanced Score Card) parameters which are carefully deployed at all level and are reviewed periodically. Your Company's Human Resource policies are continuously reviewed and realigned based on people expectations, making it more employee-friendly thereby creating an engaged workforce which focuses on productivity. It is a constant endeavor for your company to adopt some of the industry best practices and aligning them with the strategic directions, goals and objectives in terms of people processes. Your Company has having undertaken the initiative job description last year would focus on, competency mapping .This will lead to identification of gaps and areas for development. These gaps would be adequately bridged through structured training programs, skill enhancement and multi-tasking. This would also ensure that the company finds the right talent for the right job thereby improving productivity and long term individual developmental plans. Employees being the only appreciating asset, Personnel development plans focus on how each individual's strength can be best leveraged to deliver to his/her full potential. To this effect, your company provides specific training programmes and cross functional learning opportunities. The company attains high degree importance to enhancing employees' competency and skills through on the job training and external training programmes. Special attention is given on improving the health and safety of the employees. Training, welfare measures and individual development plans for the employees continue to be high primacy area for your company. Your Company focuses on Business Excellence and continual improvement journey (TQM) in its quest to improve the quality of its products, processes and systems your company during the year has also embarked on Lean Manufacturing journey. All these necessitates ongoing learning, job enrichment, aligning rewards and recognition with performance, high engagement levels, conducive work environment and a cordial industrial relationship . These continues to be the hallmark of your company resulting in continued low attrition rate, well below industry average. Your Company continues to have a smooth and enabling work climate that promotes performance, customer focus and innovative thinking while adhering to the highest standards of quality, integrity and ethics. Your Company continues to enjoy the support of a committed, experienced and satisfied workforce. To this effect, your company offers a compensation package which is one of the best in industry. Employee relations continue to be smooth and cordial and the work atmosphere remained congenial throughout the year. The manpower strength of confirmed employees of your company as on 31st March 2015 was 321. Your Company strongly believes that Employee engagement as the prime mover for the Customer Satisfaction and a real must for the organization growth. Accordingly during last year your company has conducted employee engagement survey by an external consultancy. In the coming years Aon Hewitt consultancy has been employed for scientific intervention and to put in place action plan against the finding thus derived towards further strengthening the engagement levels of the employee. RELATED PARTY TRANSACTIONS All related party Transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Directors, key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee for their approval on quarterly basis The Policy on Related Party Transactions as approved by the Board is uploaded on the Company's website. None of the Directors has any pecuniary relationships or transactions vis-à-vis the Company GOVERNANCE BOARD OF DIRECTORS Mr. K Srinivasan, Director retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The necessary Resolution is being placed before the shareholders for approval. The Board of Directors of your company is of the opinion that his continued association with the Board will be beneficial to the company and recommends his re-election. All the Directors of the company have confirmed that they are not disqualified from being appointed as directors in terms of Section 164 of the Companies Act, 2013. All the independent Directors have given a declaration under section 149(6) of the Companies Act 2013, confirming their independence MEETINGS A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, five Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. BOARD EVALUATION Pursuant to the provision of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Stakeholder Relationship, CSR and Nomination & Remuneration Committees. The manner in which evaluation has been carried out has been explained in the Corporate Governance Report REMUNERATION POLICY The Board has framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration policy is stated in the Corporate Governance Report. AUDITORS AND AUDITORS' REPORT The statutory auditors of the Company, M/s Deloitte Haskins & Sells, Chartered Accountants, (FR No.008072S) Bangalore were appointed as auditors at the 32nd Annual General Meeting to hold office upto the conclusion of the 34th Annual General Meeting, subject to the ratification of the appointment by members every year. The auditors of your Company have submitted a certificate of their eligibility for reappointment under Section 139 of the Companies Act, 2013 and being eligible have expressed their willingness to continue as the auditors of the Company. Consequently, ratification of their appointment is recommended to the shareholders. As per the relevant provisions of Listing Agreement, your company has ensured that the auditors are subject to the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer review Board of the ICAI. The statutory auditors have confirmed their compliance with the relevant provisions. The notes on accounts referred to in the Auditors' Report are self explanatory and do not call for any further comments. SECRETARIAL AUDIT During the year your company has appointed M/s Apeksha Nagori, practicing Company Secretary to conduct secretarial audit under section 204 of the Companies Act 2013, for the financial year 2014-15. The secretarial auditor has submitted the Report confirming compliance with the applicable provisions of the Companies Act 2013 and other rules and regulations issued by SEBI/other regulatory authorities. The Secretarial Audit Report forms part of the Annual Report. The explanation to the observations of the Secretarial Audit Report by the Secretarial Auditor has been furnished in the respective sections of the Corporate Governance Report. KEY MANAGERIAL PERSONNEL Mr. Rajesh Khanna, Chief Executive, Mr. Mukesh Kumar Hamirwasia, Chief Financial Officer and Ms. Akanksha Bijawat, Company Secretary are the Key Managerial Personnel of the Company as per section 203 of the Companies Act 2013. CORPORATE GOVERNANCE Your Company continues to maintain high standards of Corporate Governance in all its interactions with various stakeholders. The company strives to be a sustainable and trusted organization as sustained governance is the cornerstone in building and maintaining relationship with all its stakeholders. It has inculcated into its system the strong culture of values, ethics and integrity living with the Five Lights - The spirit of the Murugappa Group. The company's relationship with its investors is an important component of Corporate Governance. It rigorously pursues a policy of 100% compliance with all statutory requirements and has a robust review system in place. The Board fully supports and endorses Corporate Governance practices in accordance with provisions of Clause 49 of the Listing Agreement. The Report on Corporate Governance alongwith the Auditors' Certificate regarding compliance of the conditions of Corporate Governance pursuant to Clause 49 of the Listing Agreement is annexed hereto and forms part of the Annual Report. Further, as required under Clause 49(IX) of the Listing Agreement a certificate from the Chief Executive and the Chief Financial Officer of your Company is being annexed with this Report. VIGIL MECHANISM UNDER WHISTLE BLOWER POLICY The Company has a vigil mechanism under Whistleblower Policy to provide necessary safeguards for protection of Directors, employees from reprisals or victimization. The details of the policy is explained in the Corporate Governance Report and also posted on the website of the Company. Extract of Annual Return The extract of the Annual Return in form MGT 9 is annexed to and forms part of this report. (FORMAT IN ANNEXURE I) RATIO OF REMUNERATION TO EACH DIRECTOR: Details / Disclosures of Ratio of Remuneration to each Director to the median employee's remuneration as ANNEXURE - Directors Responsibility Statement In accordance with the provisions of Section 134(3)© of the Companies Act, 2013 and on the basis of the information furnished to them by the statutory auditors and the management, your Directors confirm that: In the preparation of the annual accounts for the financial year ended 31st March 2015 and the Balance Sheet as at that date ("Financial Statements"), the applicable accounting standards have been followed and no material departures have been made from the same. The Directors have selected appropriate 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 as at the end of accounting year and of the profit of the Company for the year ended 31st March'2015. 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. The Directors have prepared the annual accounts on a going concern basis. The Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Disclosure of Statutory Particulars The particulars as prescribed under Section 134(3)(m) of the Companies Act,2013, read with Rules 8(3) of The Companies (Accounts) Rules 2014 are set out in Annexure A which forms part of this report. The information required under Section 197(12) of The Companies Act'2013 read with Rules 5(2) & (3) of The Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014 and forming part of Directors report for the year ended 31st March'2015 is annexed in Annexure B. ACKNOWLEDGEMENTS Your Directors place on record their sincere gratitude to the continuing patronage and trust of our valued customers, bankers, investors, suppliers, business associates, shareholders, auditors and other statutory authorities who have extended their precious continued support and encouragement to your company. Your Directors sincerely appreciate the high degree of professionalism, commitment and dedication displayed by employees at all levels of the company and look forward to their continued involvement and support. Finally, the Directors also wish to place on record their gratitude to the members of the Company for their Continued Support & Confidence. By order of the Board M M Murugappan Chairman For Wendt (India) Limited Place: Chennai Date: 21st April 2015 |