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Wendt (India)
BSE: 505412|NSE: WENDT|ISIN: INE274C01019|SECTOR: Abrasives
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Download Annual Report PDF Format 2013 | 2012 | 2011 | 2010
Directors Report Year End : Mar '13    Mar 12
The Directors are pleased to present the 31st Annual Report together
 with the Audited Financial Statements for the year ended 31st March
 2013. The Management Discussion & Analysis Report has been included in
 the Directors Report so as to avoid duplication and repetition.
 
 ECONOMIC OVERVIEW
 
 The year 2012-13 has been one of the most difficult years with the
 Indian economy slowing down significantly on account of lowered
 domestic demand, declining exports, continued high energy prices
 alongside successive weakening of the Indian Rupee and stalling
 investments. High inflation rates and spiraling prices of raw materials
 continued with no respite thereby adding to the deceleration. Execution
 of high value projects such as Mining, Steel, Coal, Power continued to
 be mired by regulatory and environmental issues affecting .''the growth
 and investments by the downstream projects. Even the bellwether service
 sector of the Indian economy could clock the lowest-ever growth of just
 6% over the last year. The average capacity utilization by the
 manufacturing sector remained subdued between 60-75% level specifically
 for Automotive, Engineering and Cutting Tool industries sectors
 resulting in lowering of the capex plans. The other contributory
 factors include continued sovereign debt crisis in Euro Zone,
 successive recessionary trend in
 
 -3r Japan and political instability in major oil producing countries
 fueling rise in oil prices have had their & adverse impact on the
 overall growth of the economy.
 
 The export demand was also hard hit due to continued global slowdown
 except some of the South East Asian countries such as Thailand,
 Malaysia, and Indonesia. While industry segments such as Automobile,
 Auto Components, Cutting Tools, Machine Tools & Refractory are the
 worst affected due to the deepening of industrial slowdown, segments
 like Steel, Ceramics, Glass and Defence have demonstrated marginally
 better results on a comparable basis. While the slow and subdued global
 scenario has had its share in the growth of Indian economy, in the
 domestic front it has cut across all the sectors resulting in lowest
 GDP (Gross Domestic Product) growth in the last decade.
 
 The Industrial Production numbers remained weak on account of poor
 performance of the manufacturing and mining sectors which recorded a
 meager 1% growth compared to 3.7% of previous year. The decline in
 manufacturing numbers has mainly been driven by contraction of orders
 and investments by capital goods, engineering, consumer goods and
 allied industry segments. However, the Government with its recent
 announcement of reforms and policy change measures has demonstrated
 some encouragement & rekindled the business confidence on recovery.
 
 COMPANY PERFORMANCE OVERVIEW
 
                                                        (Rs in Lacs)
                                         31st March 
                                         2013            31st March
                                                         2012
 
 Sales                                   8895             10001
 
 Other Income                             225               278
 
 Profit Before Tax                        528              2552
 
 Provision for Tax                        435               759
 
 Provision for Deferred Tax                81                64
 
 Profit After Tax                        1012              1729
 
 Earnings per Share- Rs                 50.59             86.45
 
 RESULTS OF OPERATIONS
 
 Despite the industry slowdown and sluggish market condition, your
 Company has put in its best efforts to achieve a Top line of Rs.8895
 Lacs during the year which is 11 % lower than the previous year. The
 major contributory industry segments in the domestic business which had
 their adverse impact on your company''s sales of 11 % lower than last
 year are Automobile, Auto component, Cutting Tools, Steel, Refractory
 and Ceramics. The Export business was also affected by continued
 volatility and global slowdown with achieving a total sale of 12% lower
 compared to the previous year.
 
 Your Company continued its efforts on pursuing business in three
 verticals namely Superabrasives, Non- Superabrasives and International
 Business. The current slowdown being considered temporary and in
 keeping with your Company''s long-term growth, would continue to commit
 the required investments and resources in identified growth areas.
 
 Superabrasive Business consisting of Diamond/CBN Grinding Wheels &
 Tools, Precision Dressing Rolls, Hones, Segmented Products & Stationary
 Dressers achieved a performance level of 91% over the last year which
 is better than the industry average. This has been possible due to
 continued focus by your Company on the development of new products and
 new applications. During the year, your Company successfully introduced
 some new products including Resin Bond Wheels for Steel and Cutting
 Tools, Hones for Auto Component, Vitrified CBN Wheels for Paper &
 Textile and Auto Component, Precision Electroplated CBN Wheels for
 Engineering, Brazed Diamond Products for Ceramic & Glass and Precision
 Dressing Rolls for Aerospace and Gear Manufacturing.
 
 During the year, the technical collaboration with its parent company
 Wendt GmbH got discontinued. Your Company, over the years has gained
 competency to have its own fully equipped Research & Development
 Center. You will be happy to know that your Company''s R&D Center has
 obtained Department of Science & Industrial Research (DSIR)
 recognition, Government of India. This recognition and approval would
 not only help your Company to carry out research & development work for
 itself but also provide ample opportunity to jointly work with some of
 the leading research institutes and laboratories on cutting-edge
 technologies in future.
 
 Non-Superabrasive Business which comprises of machine tools and
 precision components could achieve a performance of 83% of the previous
 year. This lower performance is on account of capex freeze and
 postponement
 
 of investment decisions by many of the targeted customers. However,
 during the period, your Company has developed many new models/variants
 of machines and successfully executed some of the new machines like
 CNCTC Roll Grinding Machine, CNC Surface Grinding Machine with
 reciprocating table and Honing Machine. Introduced three years back to
 the basket, the Delapena range of Honing Machines has been well
 accepted in the market.  Recognizing the need for catering to a wider
 range of honing applications, your Company has started work on
 development of 4 new models of Wendt -Delapena Honing Machines.
 
 On the precision components front, during the year, your Company has
 successfully completed the development of two variants of components
 for new applications. This is expected to enhance the precision
 component basket and de-risk from dependency on single customer. In
 addition, your Company continued to embark on its new initiative of
 producing Precision Ground and Honed Components by leveraging its
 competencies in Machines and related Superabrasive Tools. Process
 establishment, trials and component prove-out have been done. On
 commercial production, your Company''s position would get further
 strengthened in Precision Component Business while also being a new
 growth engine.
 
 t FOCUS ON CUSTOMER CENTRICITY
 
 In order to enhance the Company''s market reach and better visibility
 for both fm Super abrasives and Machines in the domestic market, your
 Company launched the I unique nationwide initiative Wendt-On-Wheels
 (WOW) during the year.  Through this r initiative, your Company could
 make the customers abreast of the latest products and new launches
 besides demonstrating your Company''s capabilities in the field of
 Precision Grinding and Honing by going to the Cities and Doorsteps of
 the customers. In its first six r months of journey covering the
 Western, Northern and parts of Central India, the Company - received
 many appreciations besides generating business opportunities. Having
 had a good ^T response, this initiative would now be extended to
 Eastern, South Central and Southern regions - of the domestic market.
 Your Company is confident of generating new business opportunities
 while developing better understanding of the customers'' exacting needs
 and requirements.  - Your Company would be implementing Customer
 Relationship Management (CRM) and is working with ^^ SAP for effective
 implementation. With a comprehensive approach towards customer, this
 will enable seamless integration of every aspect of process that
 touches the customer - marketing, sales, customer service and field
 support by connecting people, process, knowledge and technology. This
 initiative is aimed at enhancing business relationship, creating new
 opportunities for engagement and generating long term value for both
 customer and the company based on mutual trust, openness and win-win
 situation. With this Wendt would be the first tooling company globally
 which would link the Knowledge Portal and provide real-time
 technological solutions in Grinding and Honing to its customers while
 also helping to take commercial decisions promptly.
 
 Some of the major benefits your Company sees from the CRM Application
 are:
 
 - Extend reach to customers worldwide through offering value
 proposition and effectively addressing their needs.
 
 - Act as platform of Solution Knowledge Base by interfacing with
 Company''s Knowledge Management Portal and helping the team to respond
 to customers with accuracy and minimum effort
 
 - Better and faster customer service
 
 - Enable the Company to gain competitive edge over its peers
 
 - Provide 360 degree view of customer, insightful analytics and reports
 
 FUTURE PROSPECTS
 
 With the business processes aligned with the Strategies and Objectives,
 your Company strives in its endeavors by focusing on product and
 process Innovation for delivering superior performances and sustainable
 growth. Adoption and deployment of appropriate technologies for
 indigenous Bond development, streamlining processes and introduction of
 automation in critical areas is the key for the future growth for your
 Company. The Company thrives to seize new business opportunities in new
 growing industrial segments which it addresses through New Products for
 New Markets. Secondly, it continuously explores  for the
 existing range of products that can find applications in the New
 Industries and Markets. Accordingly the Company would continue to
 aggressively pursue business in Construction, Infrastructure,
 Aerospace, Ceramics, Defense, Railways and Health Care to ensure future
 growth in both Indian and Global scenario. Thirdly, under key account
 management, the existing range of products would be aggressively
 promoted with the existing identified key customers as a part of Market
 Penetration.  Complementing these pursuits would be through active
 participation in major national and international trade shows,
 exhibitions, providing customer education and value added services.
 
 The acquisition of Winterthur Technology Group (WTG) by the US
 Multinational 3M Corporation and resultant indirect acquisition of 40%
 equity share holding in your Company has been a matter of contention.
 The impending 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
 
 Your Company''s wholly owned Subsidiary in Thailand demonstrated yet
 another year of commendable performance despite the turbulent economic
 situation and subdued industrial activities, During the year, your
 Company''s Subsidiary achieved a top line sales of Thai Baht63 Million
 (Rs.1108 Lacs), 8% growth over last year. The Profit Before Tax was
 Thai Baht 17.3 Million (Rs.292Lacs) and Profit After Tax was Thai Baht
 13 Million (Rs.219Lacs), a growth of 23% over last year.
 
 The improved profit level was possible as a result of various cost
 reduction initiatives, operational efficiency measures, enhanced
 product basket as well as market expansion undertaken by the Subsidiary
 Company during the year.
 
 Your Company''s Subsidiary maintained leadership position in
 re-profiling business in Thailand and achieved highest ever re-profiles
 for auto industry since inception. While many of the customers in the
 existing industries operated between 50-60% capacity level during the
 year, focused approach by your Company''s Subsidiary on exploring new
 business opportunities with industries like Glass, Automobile, Steel,
 Auto parts, Wood, Furniture and Construction industry, well compensated
 for the drop. During the year, your Company''s Subsidiary added
 Industrial Ceramic Products into its basket for catering to Power and
 Cement Industries in Thailand. Initial responses from customers have
 been encouraging forthese products.
 
 Your Company''s Subsidiary continued to participate in major Industrial
 Trade Exhibitions with clear focus on brand building and increasing the
 market reach. It also conducted Technical Seminars, Sales Meets and
 organized Plant Tours for its key customers to showcase its capability.
 Addition of new products to its existing basket helped in generating
 new opportunities forthe Subsidiary.
 
 Wendt Middle East FZE, Sharjah
 
 Your Company''s second wholly owned Subsidiary in Sharjah, Wendt Middle
 East FZE, has demonstrated a turnaround despite all odds. It has
 achieved an annual sale of AED 19.81 Lacs (Rs.293Lacs). During the
 year, it has undertaken major restructuring and cost control measures
 which helped the Subsidiary to end the year with PBT of AED 3.72 Lacs
 (Rs.62 Lacs) against a loss of AED 2.41 Lacs (Rs.27 Lacs) in previous
 year. As a part of restructuring, the Subsidiary has continued its
 operations by keeping the employee strength lean and efficient with
 greater emphasis on multi- tasking apart from maintaining strict
 control on fixed costs.
 
 During the year, the manufacturing sector in the entire region has been
 severely impacted due to continued socio-
 
 economic and political instability resulting in average capacity
 utilization of less than 50% with no new investments in sight.
 Moreover, UAE being a trading economy primarily driven by Oil and
 Construction, continued fluctuation in the oil prices has resulted in
 higher inflation compared to previous year.
 
 Ff Despite the many challenges posed by the slowdown, the Subsidiary
 has worked on many new initiatives such as increased product range,
 addressing new markets and better service levels in the region. With
 the renewed focus the Subsidiary is expected to perform even better in
 coming years.
 
 * APPROPRIATIONS
 
 Available for appropriation                 (Rs in Lacs)
 
 Profit After Tax                                1012
 
 Add: Balance brought forward from previous year 2184
 
 Total                                           3196
 
 Recommended appropriations
 
 Transfer to General Reserve                      101
 
 Proposed dividend Rs 15/- per 
 share of face value of Rs 10/- each
 (150%)                                           300
 
 Dividend Tax                                      49
 
 Balance carried forward                         2746
 
 Total                                           3196
 
 
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 As a responsible Corporate, your Company''s Corporate Social
 Responsibility pursuits have always been based on the foundation of
 ethical behavior in all its business transactions and contributions for
 economic development of not only the workforce and their families but
 also extending to the local communities and society at large.
 
 Your Company, befitting its size & operations, makes contributions to
 various social causes such as education, healthcare, employability and
 environment preservation. It also places emphasis on tree plantation
 and forestation not only in the premises but also adjoining areas by
 distributing free saplings.
 
 During the year, your Company has established the Skill Development
 Centre - CUMI CENTRE FOR SKILL DEVELOPMENT (CCSD) by joining hands with
 its parent company CUMI housed within the factory premises. The
 objective of this initiative is to provide vocational education,
 training, employability and create highly skilled & productive
 workforce for the Company and outside industry in future. Through this,
 the Company not only ensures livelihood and gainful employment but
 makes a conscious effort to bring transformation and uplift the lives
 of young children drawn from poor, underprivileged and back-ward
 classes of the society. In addition to a monthly stipend, all other
 expenses such as accommodation, food, books & writing materials etc are
 provided free of cost to each student during the training period. Apart
 from this, your Company uses every opportunity to make contributions to
 the Old Age Homes and to the Weaker Sections of the Society.
 
 During the year, your Company has also got SA8000 certification
 accredited by the TUV. This is towards social accountability which lays
 high emphasis on work culture, healthy practices and protection of
 interests of work force at large.
 
 DIVIDEND
 
 Despite having a tough year impacting the profits and the need to
 conserve cash for capital expenditure, which as a philosophy has been
 addressed through it''s internal accruals, the Board of Directors have
 recommended a dividend of Rs 15/- per equity share of face value of Rs.
 10/- each (150%). The Dividend on approval at the 31 st Annual General
 Meeting will be paid to those shareholders whose names appear on the
 Register of Members of the Company as on 25th July, 2013.
 
 The Dividend will be tax-free in the hands of the shareholders.
 
 TRANSFERTO RESERVES
 
 Your Company proposes to transfer Rs 101 lacs to the General Reserve.
 An amount of Rs 2746 lacs is proposed to be retained in the Statement
 of Profit & Loss.
 
 CONSOLIDATED FINANCIAL RESULTS
 
 The Ministry of Corporate Affairs (MCA) vide its circular no. 2/2011
 dated 8th February 2011 has granted general exemption to holding
 companies from complying with the provisions of Section 212 (8) of the
 Companies Act, 1956 with regard to attaching the Balance Sheet, Profit
 and Loss Account and other documents of its Subsidiary
 
 Companies provided such companies publish the Audited Consolidated
 Financial Statements in their Annual Report.  Accordingly, the Annual
 Report 2012-13 of your Company does not contain the standalone
 financial statements of the Subsidiaries. The audited annual accounts
 and related information of the Subsidiaries is available in our
 website- www, wendtindia.com.
 
 The Consolidated Financial Statements (incorporating the operations of
 the Company and its two 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
 form part of this Annual Report. The key financial data for the
 consolidated operations are as given below:-
 
 KEY CONSOLIDATED FINANCIAL SUMMARY
 
                                                 (Rs in Lacs) 
 
                                    31st March
                                    2013           31st March
                                                   2012
 
 Sales                                  10059       11056
 
 Other Income                             236         246
 
 Profit Before Tax                       1874        2849
 
 Profit After Tax                        1286        1946
 
 Earnings per share-Rs                  64.30       97.29
 
  QUALITY
 
 IIf The products manufactured by your Company have high level of
 precision and accuracies meeting exacting customer requirements.
 In, the product range includes Diamond & CBN
 Grinding Wheels and Special Tools. In Non-Superabrasives, it
 includes customized CNC W Grinding, Notch Milling, Honing Machines and
 Accessories meeting the international standards and CE certifications.
 Precision Components which form a
 
 Fpart of Non Superabrasives require considerable degree of precision
 and higher tolerances thus requiring to go through stringent quality
 checks at every stage.
 
 Company, Quality being the cornerstone as well as a differentiator, it
 ensures that through effective quality management, adequate process
 controls and quality assurance at each stage of operation.
 
 Your Company has ensured that international standards and practices are
 adopted like Integrated Management System (IMS) focusing on Quality
 Management and Environment Management and TS 16949 for manufacturing
 precision components. As a part of driving the quality culture deeper
 into the organization, your Company continues to prioritize the needs
 for training on latest trends besides investment in standard equipment,
 machineries & application software.
 
 SAFETY, HEALTH AND ENVIRONMENT (SHE)
 
 Your Company accords top priority for Safety, Health and Environment
 Management System and ensures that it is efficient and effective. The
 top management is committed to maintaining highest standards of safety,
 health and environment fully complying with the applicable statutory
 requirements as per OHSAS 18001 and ISO 14001 EMS standards.
 
 Your Company considers its employees as the most valuable assets and
 that the safety and health of each employee is of utmost importance.
 Employee safety and health is not just another aspect rather a
 necessity for your Company and treated at par with Quality and
 Manufacturing.
 
 Against this backdrop, your Company is committed to meet highest level
 of health, safety and wellness standards by ensuring adherence to
 safety norms and a work environment free of accidents, incidents,
 injuries and occupational illness.
 
 Health and Safety being the key performance measurements of your
 Company, it continuously promotes awareness programs and provides
 relevant training, workshops to all employees to perform their
 activities in a safe manner.
 
 During the year, your Company again recorded Zero Accident and had no
 loss of man days in its operations. Apart from the employees, adherence
 of Safety, Health and Environmental Practices are also ensured for its
 guests and visitors.
 
 Through various programs such as Annual Health Check-up Plan, Eye Camp,
 Physiotherapy, Fitness Center, Blood Donation Camps etc, your Company
 makes all efforts for its employees and their families to maintain
 sound health.
 
 RECOGNITIONS AND AWARDS
 
 Your Company continues to maintain its wining streak of Awards,
 Recognitions and bring Accolades by showcasing its performance,
 achievements and practices at various platforms. These recognitions and
 honours raise the morale and motivation levels of employees and the
 Company as a whole. During the year your Company has received the
 following major awards
 
 - Engineering Export Promotion Council (EEPC) Award
 
 Your Company has for the ninth consecutive year received the Silver
 Shield for Star Performer under Large Enterprise categoryfor export of
 Miscellaneous Engineering Goods from Engineering Export Promotion
 Council (EEPC), India.
 
 - ICAI Award for Excellence in Financial Reporting
 
 Your Company has been conferred with Plaque for Excellence in Financial
 Reporting by ICAI for the year 2011 - 12 under Manufacturing Sector
 Category for turnover less than Rs. 500 crores. This is the second
 consecutive year that your Company has got this recognition for
 Excellence in Financial Reporting,
 
 Conferred by the apex body, The Institute of Chartered Accountants of
 India (ICAI), this coveted acknowledgment signifies thatthe accounting
 practices & policies followed byyourCompanyareamongstthe best in the
 industry. It also takes into cognizance the review of accounting
 practices adopted in the preparation of financial statements and the
 policies for disclosure and presentation of both financial and
 non-financial information in the Annual Report in
 
 terms of philosophy of transparent disclosures, integrity and
 reliability.
 
 - Significant Achievement in the Cll -EXIM Bank Award for Business
 Excellence
 
 Second year in the row, your Company achieved another milestone this
 year by receiving the Commendation Certificate for Significant
 Achievement in the Cll-Exim Bank Award for Business Excellence. For
 Wendt (India) Ltd., it is a journey in pursuit of Business Excellence
 and this higher level award as compared to earlier year is a testimony
 of the continuous improvement in the journey towards Business
 Excellence.
 
 - ECGC-D&B Award
 
 Your Company was adjudged as the winner of ECGC-D&B Award for Best
 Risk Management Practices for 2011 -12 for exports from Export Credit
 Guarantee Corporation- Dun & Bradstreet.
 
 - Quality Circle Awards
 
 Your Company''s employees continued to exhibit their skills in Quality
 Circle Competitions and three of the teams were recognized with Par
 Excellence/ Excellence Awards. The teams had won these awards at the
 national level have been selected for participation at the
 International Level Competition to be held in Taiwan at the
 International Convention for Quality Circle.
 
 National Level organized by NCQC at Kanpur
 
 - Par Excellence Award for Kaizen & SGA (Small Group Activity)
 
 - Excellence Award for SGA
 
 Regional Level organized by QCFI at Bangalore
 
 - Golden Award for Small Group Activity (SGA) and Kaizen
 
 Cufest 2012 Awards
 
 rYour Company''s employees participated in Group-level Quality
 Competitions Cufest 2012 (Quality Festival of C U MI), and won awards
 for Innovation, Best Practice, 5S, Poster, Idea King & Quality Quiz
 events.
 
 FINANCIAL REVIEW
 
 Earnings
 
 Revenues
 
 During the year, your Company achieved total sales of Rs.8895 Lacs as
 compared to 2011-12 which was Rs.10001 Lacs. While the domestic sales
 declined by 11%, the export sales recorded a drop of 12% compared to
 the previous year. As briefed, this lower performance is due to
 depressed market conditions and continued economic recession which
 prevailed during the year.
 
 Profit before Tax
 
 Accordingly, the profit before tax is lower by 40% at Rs.1528 Lacs
 compared to Rs.2552 Lacs in 2011 -12.
 
 Profit after Tax
 
 The profit aftertax is lower by 41 %, at Rs. 1012 Lacs, compared to
 Rs.1729 Lacs in year 2011 -12.
 
 Investments
 
 Your Company''s investments as on 31-03-2013 grew from Rs.1370 Lacs to
 Rs.1496 Lacs. The Investment comprises of trade investment in the two
 wholly owned Subsidiaries viz. Wendt Grinding Technologies Ltd,
 Thailand & Wendt Middle East FZE, Sharjah and the balance is in Debt
 Schemes. The mutual funds investment portfolio increased from Rs.1016
 Lacs to Rs.1142 Lacs, a growth of 12% during the year due to prudent
 investment policies followed by your Company.
 
 Your Company follows the Group norms by investing the surplus generated
 by the business in liquid debt funds which yield sizeable returns. This
 ensures safety and liquidity of Company''s funds along with reasonable
 yield as per the prevailing market rates.
 
 The investment in mutual funds ensures meeting the internal fund
 requirements for capital expenditure purpose, as your Company does not
 have any borrowing.
 
 Costs
 
 The Fixed Costs have grown by 2% compared to last year. However, due to
 lower topline, the Fixed Cost as percentage of sales is higher at 32%.
 Due to higher capital expenditure incurred during the earlier years,
 
 depreciation has grown by 20%. However, your Company believes that this
 addition to fixed assets will generate additional revenue in future
 years. Affected by frequent power cuts, the utilities cost has gone up
 by 26% due to DG Set running for longer periods. Travel, transport
 expenses has gone up by 40% due to higher travel necessitated by the
 Wendt-on - Wheel (WOW) initiative.
 
 The variable costs have increased during the year due to increase in
 the raw material cost and bond prices which has put pressure on the
 margins of the Company. Your Company has initiated price correction
 from both customers and key suppliers during the current year to
 improve its bottom line which is expected to yield results in the
 coming year.
 
 Financial Position Shareholders Funds
 
 The Shareholders Fund as on 31.03.2013 was Rs.7625 Lacs against Rs.6962
 Lacs of previous year, an increase of 10%.  Accordingly, the book value
 of the share stands at Rs.381/- as compared to Rs.348/- during the
 previous year, an increase of 9%.
 
 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 also, the working capital limits of your Company
 have been rated by ICRA. ICRA has reaffirmed 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 has been 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 has been prudent in it''s capex spend, during the current
 year in view of the continued economic slowdown. The capital
 expenditure during the year was contained to Rs.1087 Lacs. The major
 Capex Spend is on addition of New Plant & Machinery and other
 identified areas which are critical for the future growth of the
 Company.
 
 Inventories and Sundry Debtors
 
 The overall inventory levels as on 31st March, 2013 has been largely
 similar to last year at Rs.1385 Lacs. There was a reduction in the Raw
 Material Inventory by Rs.23 Lacs and Finished Goods Inventory by
 Rs.6Lacs. However, the Work- in - Progress machine inventory was higher
 by Rs.20 Lacs. This was due to delay in dispatch/clearance for some of
 the items from few customers.
 
 The Sales have decreased by 11%; and hence the Receivables are lesser
 from Rs.2010 Lacs to Rs.1916 Lacs as on 31st March, 2013. The current
 slowdown has resulted in working capital pressure and delayed payments
 by the customers. Your Company adopted an aggressive Receivable
 Management System including close follow ups and credit control
 measures through the SAP System to ensure that receivables were kept
 under control and payments were received in time.
 
 Foreign Exchange Hedging
 
 Your Company continues to follow the policy of natural hedging of
 foreign exchange earnings and outflow and hence it does not take
 forward covers. The net forex gain during the year was Rs.39 Lacs.
 
 Financial Performance with respect to Operational Performance
 
 Your Company''s Operating Profit and Contribution has been better than
 the industry average on account of measures taken for improved
 operational efficiency and better product mix. This was aided by
 accurate information & customer data, newly implemented centralized
 drawing management system, better planning & scheduling through SAP ERP
 System and effective vendor management. Your Company also improved its
 response time & service levels and was able to supply the right product
 at the right time with right specifications there by providing value
 addition to the customer.
 
 HUMAN RESOURCE
 
 Nurturing and development of the Human Capital is accorded high
 importance by your Company. Accordingly, the HR policies and the
 practices of your Company are geared towards this objective. The
 processes for attracting, retaining and rewarding talent are well
 laid-down and your Company follows a transparent system to identify and
 reward performers.
 
 Your Company''s Human Resource Policies are constantly 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
 the industry best practices and aligning them with the strategic
 directions, goals and objectives in terms of people processes.
 
 In order to meet growth plans set by the Company and to fulfill the
 ever-changing needs and expectations of the customers, your Company
 continues to focus on competency building, skill enhancement and
 overall development so that its people are well prepared to take on the
 challenges.
 
 Personnel development plans focus on how each individual''s strength can
 be best leveraged to deliver to his/her full potential. Your Company
 believes that this can be achieved through specialized training
 programmes and cross functional learning exposure. The Company gives
 very high importance to enhancing employees'' competency and skills
 through on the job training and external training programmes. Special
 attention is given to the health and safety of the employees. Training,
 welfare measures and individual development of employees continue to be
 high priority area for your Company. This in turn, translates into
 improved quality and operational efficiency.
 
 Your Company lays special focus to Business Excellence and continual
 improvement journey (TQM) in its quest to improve the quality of its
 products, processes and systems. Continuous learning, job enrichment,
 high engagement levels, conducive work environment and a cordial
 industrial relationship has been the hallmark of your Company resulting
 in an attrition rate well below the industry average. Your Company
 strongly believes that higher Employee Engagement Level is prerequisite
 for Customer Delight.
 
 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. Compensation package offered by your Company
 is one of the best in industry.
 
 The manpower strength of confirmed employees of your Company as on 31
 st March, 2013 was 279.  Employee relations have been smooth and
 cordial and the work atmosphere remained congenial during the year.
 
 TUV''s accreditation to Wendt with SA8000 Certification is a testimony
 to the importance that your organization gives on health & safety,
 working hours, child labour as well as employee discrimination.
 
 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 274
 (1 )(g)of the Companies Act, 1956.
 
 Auditors and Auditors'' Report
 
 M/s Deloitte Haskins & Sells, Chartered Accountants, the Statutory
 Auditors of your Company are due for retirement at the ensuing Annual
 General Meeting and are eligible for re-appointment. Your Directors
 recommend their reappointment as Statutory Auditors for the coming
 year. The Statutory Auditors of your Company have submitted a
 certificate to the Company that if appointed as the Statutory Auditors
 for the coming year, such appointment shall be in accordance of the
 provisions of Section 224 (1B) of the Companies Act, 1956. Further, the
 Statutory Auditors have also submitted a certificate to the Company
 that they have subjected themselves for the peer review process of the
 Institute of Chartered Accountants of India.
 
 The notes on accounts referred to in the Auditors'' Report are self
 explanatory and do not call for any further comments.
 
 COST AUDITOR
 
 In compliance with the Central Government''s order F.No.52/26/CAB-2010
 dated 24th January 2012, your Board has appointed M/s M.R. Rajhshekar &
 Co, Cost Accountant to carry out the cost audit of two of the products
 of the company namely. Synthetic Coolants and Grinding Machines, Pump
 Vanes & Accessories for the financial year 2012-13 to which the Cost
 Audit Order applies. The Cost Audit Report will be filed with the
 Central Government as per timeline.
 
 Fixed Deposits
 
 Your Company has not accepted any fixed deposits during the year
 2012-13 and as such, there are no outstanding fixed deposits from the
 public as on 31 st March, 2013.
 
 CORPORATE GOVERNANCE
 
 Your Company has inculcated strong culture of values, ethics and
 integrity living with the Five Lights - The Spirit of the Murugappa
 Group. The Company strives to be a sustainable and trusted organization
 as sustained governance is the cornerstone for building and maintaining
 relationships with its stakeholders. 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 system to review them. 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 along with 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(V) of the Listing
 Agreement a certificate from the Chief Executive and the Chief
 Financial Officer of your Company is being annexed with this Report.
 
 TRANSFER TO THE INVESTOR EDUCATIONS PROTECTION FUND
 
 In terms of Section 205C of the Companies Act, 1956 an amount of Rs.
 1.90 lacs being unclaimed dividend was transferred during the year to
 the Investor Education and Protection Fund established by the Central
 Government
 
 Directors Responsibility Statement
 
 In accordance with the provisions of Section 217(2AA) of the Companies
 Act, 1956 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, 2013, the applicable accounting standards have been
 followed and no material departures have been made from the same.
 
 - The Directors have selected such accounting policies and applied them
 consistently and made judgments and estimates that are reasonable and
 prudent, so as to give a true and fair view of the state of affairs of
 the Company as at the end of accounting year and of the profit of the
 Company for the year ended 31st March,2013.
 
 - The Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 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.
 
 Disclosure of Statutory Particulars
 
 Information required under Section 217 (1) (e) and Section 217 (2A) of
 the Companies Act 1956 are given in Annexu re A and Band forms part of
 this Report.
 
 APPRECIATION
 
 Your Directors take this opportunity to place on record their
 appreciation to all employees for their hard work, spirited efforts,
 dedication and loyalty to the Company.
 
 The employees have worked based on principles of honesty, integrity and
 fair play and this has helped your Company to survive a very difficult
 year. The Directors also wish to place on record their appreciation to
 Investors, Bankers, Customers, Suppliers, Auditors, Company''s
 Associates and Subsidiaries for their continued support during the
 year.  Your Directors extend their sincere gratitude to all the
 regulatory agencies like SEBI, Stock Exchanges, Registrar of Companies
 and other Central and State Government Authorities/ Agencies,
 Stakeholders, Suppliers, Vendors and Sub-contracting Partners, Business
 Associates for their support.
 
 Finally, the Directors also wish to place on record their special
 appreciation to the valued Shareholders of the
 
 Company for their Continued Confidences Support. ,
 
                                   By order of the Board
 
                                   For Wendt (India) Limited
 
 Place: Chennai                    M M Murugappan
 
 Date: 18th Aoril 2013             Chairman
Source : Dion Global Solutions Limited
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