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Wendt India Ltd.

BSE: 505412 Sector: Engineering
NSE: WENDT ISIN Code: INE274C01019
BSE 12:37 | 07 Jul 2665.00 -37.00






NSE 12:31 | 07 Jul 2638.95 -53.45






OPEN 2600.30
52-Week high 3390.00
52-Week low 1590.00
P/E 57.07
Mkt Cap.(Rs cr) 533
Buy Price 2630.00
Buy Qty 4.00
Sell Price 2679.00
Sell Qty 1.00
OPEN 2600.30
CLOSE 2702.00
52-Week high 3390.00
52-Week low 1590.00
P/E 57.07
Mkt Cap.(Rs cr) 533
Buy Price 2630.00
Buy Qty 4.00
Sell Price 2679.00
Sell Qty 1.00

Wendt India Ltd. (WENDT) - Director Report

Company director report


The Board of Directors have pleasure in presenting the 37th Annual Report of theCompany together with the Audited Financial Statements for the year ended 31st March 2019.The Management Discussion & Analysis Report which is required to be furnished as perSEBI

(Listing Obligations and Disclosure Requirements) Regulations 2015 (herein afterreferred to as listing regulations) has been included in the Directors Report to avoidduplication and repetition.


After strong growth in 2017 and early 2018 global economic activity slowed downnotably in the second half of the financial year reflecting a confluence of factorsaffecting major economies.

The escalation of US China trade tensions macroeconomic stress in Argentina andTurkey disruptions in the auto sector in Germany tighter credit policies in China andfinancial tightening alongside the normalization of monetary policy in the larger advancedeconomies have all contributed to a significantly weakened global expansion especially inthe second half of 2018.

The Indian economy started the fiscal year 2018 19 with a healthy 8.2 percent growth inthe first quarter on the back of domestic resilience. Despite softer growth the Indianeconomy remains one of the fastest growing emerging markets and possibly the leastaffected by global turmoil. The structural and financial sector reforms like theInsolvency and Bankruptcy Code (IBC) which helps resolve non performing loans andgradually changes debtors' behavior along with back to back rate cuts announced by theReserve Bank of India (RBI) is expected to boost the economy in the upcoming financialyear.

The Indian economy is likely to sustain the rebound in FY 2018 19 and the growth isprojected to be in the range of 7.2 percent to 7.5 percent. Hence India maintains itsstatus of being the fastest growing economy in the world. Additionally the upcoming LokSabha election and the formation of the new government in the coming financial year isexpected to continue the momentum of growth going forward.

Demonetisation GST and tax amnesties have spurred the formalisation of the economy andresulted in an increase in the number of taxpayers. However the hike in public wages andpensions stress in corporate and bank balance sheets debt waivers for farmers and cutsin excise taxes did show some pressure on fiscal outcomes.

The ongoing subsidy reform of replacing price subsidies by direct cash transfers tohouseholds via their bank account and using a unique identification number makes householdsupport more equitable and efficient. It also improves financial inclusion reduces marketdistortions and generates public savings.

Despite the positive outlook the economy remains vulnerable to domestic andgeopolitical risks especially economic and political changes global trade wars and therisk of a poor upcoming monsoon that can affect relative prices and hurt current andfiscal account deficit.


(Rs in Lakhs)
FY 2018 - 2019 FY 2017 - 2018
Sales 13986 12685
Other Income 709 685
Profit Before Tax 1904 1651
Profit After Tax 1347 1230
Earnings per Share - Rs 67.33 61.49


Your Company achieved sales of Rs.13986 Lakhs 10% higher when compared to Rs. 12685Lakhs (net) during the previous year by focusing efforts in the domestic and exportmarket. The demand for your company's products and services in the domestic market hasseen reasonable traction from industry segments such as Steel Automobile Cutting ToolBearing Industry resulting in a growth of 10% over the previous year.

On the export front while some countries witnessed moderate growth advanced countrieslike US & China continued facing weakened demand. However your Company has been ableto achieve modest growth of 10% over the previous year due to increase in demand frommajor countries like Germany Indonesia Korea Spain Thailand UK Singapore.

In the pursuit of growth and taking cognizance of medium and long-term perspectivesyour Company continues its focus on pursuing business in its three verticals namely SuperAbrasives Machines and Components.

Your Company continued its focus on high growth areas and other resources so as toattain its long-term business objectives. Your Company continues putting efforts inenhancing its presence in 10 identified focus countries for growing the export businessin addition to focusing on the potential customers in the domestic market which isexpected to contribute significantly to your Company's overall business.

During the year your Company actively participated in the IMTEX 2019 exhibitionwhere it showcased its products and capabilities to the domestic and internationalaudience and launched new machines during the exhibition under Total Grindingand Honing Solutions along - with CUMI.

The Super Abrasive Business consisting of Diamond/CBN grinding Wheels in variousbonding systems Rotary Dressers Stationary Dressers Hones and Segmented productsachieved a growth of 7% over the previous year amidst many challenges and shrinking demandin both domestic and overseas markets. This has been possible because of continuedefforts various initiatives for new application and product developments includingdevelopment of import substitutions. Your Company successfully introduced some newproducts such as Spiral CBN Wheel for Razor Blade grinding Brazed wheels for Textile(Knife) Industry Double Disc Fine Grinding Wheels for Automotive Rotary Tool Ceramicand Engineering Applications.

The Machines business vertical witnessed a decent growth of 18% over theprevious year due to good orders from Defense Steel Ceramic industries in Domesticmarket. During the year your company focused on development & launch of many newmodels / variants which includes Single Pass Honing Machine (WSP 350) Fine GrindingMachine (Precifine 720) and Tool Regrinding Machine (CTG 25). As mentioned earlier thesemachines were launched by the customers during IMTEX 2019. Besides this your Company hassuccessfully built and added new features to existing machines and introduced machineslike Universal Surface Grinding Machine (WXG 300V) CNC TC Ring Grinding machine (WGM 20)CNC Profile Dressing Machine (PDM400) for domestic as well as overseas markets.

On the Precision Components front your Company during the year has enhanced thevolume of production by adding two new components to its basket of products anddemonstrated a growth of 30%. The Precision Components business now contributes to morethan 12% of your Company's business. Your Company is constantly exploring opportunitieswhere it can deploy its core competency - Expertise Experience and Knowledge on GrindingMachines & Super Abrasive Tools for producing related precision components. YourCompany focuses on providing Sustained competitive advantage to its customers and stronglybelieves in great potential this segment holds for growth and is pursuing on strengtheningthe Precision Component business. Your Company also focused on de-risking & enhancingthe product basket by adding components for Non-Auto Industry and Non Ferrous component.


Your Company continues to focus on LEAN initiatives in order to enhance operationalefficiency and optimum use of resource in the area of manufacturing and support functions.During the year your Company has found this initiative extremely meaningful instrengthening some of the key operational areas like planning and scheduling productionreliability materials availability and reliable product delivery.

Overall the implementation of Lean management system in your Company has been veryeffective. It ensured elimination of non-value added activities process streamliningeffective utilization of resources and high level of customer satisfaction.

Your Company continues to develop alternative reliable and competitive sources for fewselect critical raw materials such as Diamond CBN Chemicals Machine Elements includingSpindles CNC/Electrical Systems for maintaining minimum inventory levels while ensuringon-call supplies and on-time delivery to customers.

The key focus continues to be on formulating and developing

New Bond for improving performance of products and reducing cost through processre-engineering. To make our products competitive we continue to focus on improvingefficiency by adopting new technology and associating with external research institutesconsultants and partners.

Your Company has taken initiatives to reduce overall supply chain cost by outsourcingmost non critical non-value-added services while doing all Precision machining in house.The Company also continues to share common resources machines and facility across allproduct cells.


There has been an increasing technological development in the automotive manufacturingprocesses in order to achieve better fuel efficiencies and enhance the life of motorvehicles. The usage of Super Abrasives for manufacturing automotive components has provento be useful in increasing the life of wheels. Also growing Consumer Electronic Segmentare expected to provide a wide array of opportunities for the consumption of superabrasives in the coming years.

Your Company makes every effort to capture the weak signals of the Mega Trends andaccordingly align its strategic moves and actions so as to sieze the opportunities thatthese Mega Trends offer in terms of new applications and industries includingopportunities for innovations.

Your Company continually works on narrowing the gap between its strategies andobjectives based on the market dynamics so as to achieve the set goals and improvedperformance year on year through various initiatives.

While the existing products would continue to be offered to the customers newproducts new application developments including development of import substitutes wouldbe the focus areas for your Company.

Adoption and deployment of appropriate technologies for indigenous bond developmentstreamlining processes and introduction of automation in critical areas and workingon industry 4.0 has been the key focus points for your Company.

To ensure future growth in both Domestic and Global scenario the Company thrives toseize new business opportunities in new upcoming industrial segments. Your

Company continues its efforts on developing high end products and addressing newopportunities. The existing range of products are also in focus to explore and replicatesuccess unfolding in the New segments and markets like Razor Blade Industry DefenceSector Aerospace Railways and Health Care. Your Company would fully supplement theseefforts and maximize the benefits by active participation in major national andinternational exhibitions trade shows including digital initiatives collaborations andpartnerships.

The focus on growing the export business has been one of the key areas for your Companyin the last few years. We will continue to put efforts and initiatives towards increasingthe global presence in identified countries through strategic alliances and co-operationspartnership and appointment of management representatives besides taking advantage of theCUMI distribution network CUMI (PAPs) that is readily available to the Company.


Wendt Grinding Technologies Limited Thailand

Your Company's 100% owned subsidiary Wendt Grinding Technologies Limited Thailandhas achieved a top line of Thai Baht 1126 Lakhs (Rs.2423 Lakhs) which is 31% higher thanthe previous year despite continued industry slowdown falling export politicalinstability rising cost and all odds. The subsidiary continues to demonstrate its strongresolve and business acumen challenging the unfavorable conditions and churning out goodresults on a consistent basis.

The Profit Before Tax was Thai Baht 227 Lakhs (Rs 485 lakhs) and the Profit After Taxhas been Thai Baht 181 Lakhs (Rs. 385 Lakhs) being at 36% growth over previous year.

Like earlier years continued initiatives and efforts have been the key to thisperformance sustainability of the subsidiary. Focus on enhancing the product basket newcustomer additions and entering new geographies have yielded desirable results.

The subsidiary company continues to take part in the important Industrial and TradeExhibitions as part of exploring new businesses and strengthening networking with industryleaders for business promotion and development.

Wendt Middle East FZE Sharjah

Wendt Middle East FZE Sharjah the other wholly owned subsidiary of your Company hasclocked an annual sale of AED 24 Lakhs (Rs. 455 Lakhs) which is 11% higher than the lastyear. The sluggish topline is attributable to the continuing oil crisis politicaldisturbance and a slowdown in new projects in the region. Also due to the worseningcredit situation in the Middle East the subsidiary has been cautious and prudent ingrowing the topline. Despite the tough market situation the profits have maintained atlast year level of AED 0.2 Lakhs (Rs.3 Lakhs).

Available for appropriation (Rs in Lakhs)
Profit After Tax 1347
Add: Other Comprehensive Income (87)
Add: Balance brought forward from previous year 4859
Total 6119
Recommended appropriations
Transfer to General Reserve (135)
-Interim Rs 15/-per share (300)
-Final (Dividend paid for 2017-18 Rs 15/- per share of face value of Rs 10/- each) (300)
Dividend Tax
-Interim (44)
-Final (for 2017-18) (62)
Balance carried forward 5278
Total 6119


As a responsible Corporate your Company's Corporate Social Responsibility pursuitshave always been based on the foundation of ethical behavior in all its businesstransactions and contributions for economic development of not only the workforce andtheir families but also extending to the local communities and society at large. YourCompany being a part of the Murugappa Group has been upholding this tradition byallocating a part of its income for carrying out its social responsibilities.

Corporate Social Responsibility for your Company has been the core of the businessalong with transparency in all dealings.

Your Company's initiative of running the Skill Development Centre has been yetanother social responsibility. The main purpose being providing high quality vocationaland technical training for uplifting the lives of young children from under privilegedbackgrounds. This training program is designed based on the coaching methodology definedby the Government of India Ministry of Skill Development and Entrepreneurship.

The program includes stipend payment along with free meals and boarding facilities tothe enrolled students ensuring that they earn while they learn. Not only does thisinitiative help continuance of formal education for these apprentices but also helps themto seek gainful employment and lead a meaningful life upon successful completion of thecourse aiding them to become a valuable citizen.

Befitting its size your Company continues to make contributions to various socialcauses such as education for underprivileged school children old age homes orphanagesas well as providing sanitation facilities. Your Company also gives importance to greenenvironment and tree plantation in the nearby communities by distributing free saplingsevery year during World Environmental day which is widely celebrated.

In accordance with the requirements of the Companies Act 2013 your Company has a CSRpolicy which is available on the Company's website at the following link

Your Company during the year 2018-19 has spent of Rs 31.70 lakhs towards the CSRactivities in line with the provisions of the Companies Act 2013.


The Company has voluntarily adopted the Dividend Distribution Policy as approved by theBoard in line with the Listing Regulations and the same is available on the Company'swebsite

In line with the policy the Board of Directors have recommended a Final Dividend of Rs15/- per equity share of face value Rs 10/- each (150%) for the year ended 31st March2019. This is in addition to the Interim Dividend of Rs 15/- per equity share of facevalue of Rs 10/- each which was paid on 8th February 2019.

The Final Dividend is subject to approval of members at the 37th Annual GeneralMeeting & will be paid to those shareholders whose names appear on the register ofmembers of the Company as on 22nd July 2019. If approved the total Dividend for thefinancial year including the interim dividend would amount to Rs 30/- per equity share.


Your Company proposes to transfer Rs. 135 lakhs to the General Reserve. An amount ofRs. 5278 Lakhs is proposed to be retained in the Statement of Profit & Loss.


During the year the Company has not accepted deposits from the public falling withinthe ambit of Section 73 of the Companies Act 2013 and the rules framed there under and noamount of principal or interest was outstanding as on the balance sheet date.


Details of investments covered under section 186 of the Companies Act 2013 are givenin the note no. 6 to the financial statements. There were no loans or guarantees coveredunder section 186 granted during the year.


In terms of Section 124 (5) of the Companies Act 2013 an amount of Rs.4.14 lakhsbeing unclaimed dividend during the year pertaining to the financial year 2010-11 wastransferred to IEPF after sending due reminders to the shareholders.


The Consolidated Financial Statements of the Company (incorporating the operations ofthe Company and its two wholly owned overseas subsidiaries) for the financial year2018-19 are prepared in compliance with the applicable provisions of the Companies ActAccounting Standards and prescribed by Regulation 33 of the Listing Regulations. TheConsolidated Financial Statements have been prepared based on the audited financialstatements of the Company its subsidiaries as approved by their respective Board ofDirectors.

Pursuant to provisions of Section 136 of the Act the Financial Statements of theCompany the Consolidated Financial Statements along with the relevant documents and theAuditors' Report thereof form part of this Annual

Report. A statement of summarized financials of all subsidiaries of your Company inform AOC-1 forms part of the Annual Report. The audited annual accounts and relatedinformation of the subsidiaries is available in our website-

The key financial data for the consolidated operations are as follows: -


(Rs in Lakhs)
FY 2018-2019 FY 2017-2018
Sales 16178 14432
Other Income 520 492
Profit Before Tax 2193 1804
Profit After Tax 1541 1312
Earnings per share-Rs. 77.07 65.62


While conducting the business your Company accords high level of importance to Qualityin all spheres. The most critical aspect for your Company's products is high level ofprecision accuracy and assurance in terms of meeting the exact standards of the productsas per customer requirements and application specifications.

Your Company's Super Abrasives product range comprises of Diamond & CBNgrinding wheels and Tools in various bonding systems. The Machine Tools businessinclude a range of machines such as Rotary Surface Grinding Notch Milling TC RingGrinding Vertical & Horizontal Honing Cylindrical grinding and also a wide range ofaccessories that are fully compliant. Precision Components requires high level ofprecision as well as tolerance limits necessitating utmost care and adherence to qualityparameters and process controls.

In order to ensure that your Company's products meet these requirements it has put inplace the necessary Management standards such as ISO 9001 ISO 14001 TS 16949 OHSAS andSA 8000.

Apart from this in order to comply with the safety norms and requirements of overseascustomers your Company has also successfully implemented EN 13236 Standards during theyear. Superior quality and consistency in performance of the products being the maindifferentiators your Company has ensured deployment of an effective Quality ControlManagement and practiced at each stage of material flow in the manufacturing cycle.

The necessary investments on machines equipment & application software solutionsare also being done to update & address Quality Standards.


Your Company accords high importance towards safety and health of employees and ensuresthat work environment is conducive for smooth operations. Towards this the top managementstays ever committed for maintaining high standards of safety health and environmentmanagement by being fully compliant to applicable statutory requirements as per OHSAS18001:2007 and ISO 14001:2015 EMS standards and guideline.

Your Company has complied with the requirements of Social accountability SA 8000:2014Standard and on product safety EN-13236:2010+A1:2015 for meeting safety requirements ofthe European standard of Super Abrasive products. Every year Wendt observes a SafetyWeek with sprawling events spread over the week to emphasize the importance of safetyto the employees. This year it was held on 4th March 2019 which included competitions onslogans posters skits and mock drills.

Recognizing that the employees are the most valuable assets of the Company and thatSafety and Health of each employee is of utmost importance the Company continues toundertake initiatives and pursue programs including Annual health check-ups employeesand their family special medical attention for employees working in special process &sensitive areas. During the year your Company conducted a special awareness program onuse of personal protection equipment (PPEs) zero discharge of ETP/STP and hazardous wastehandling so that employees and their family maintain good health and overall wellness.

Your Company continues to periodically conduct safety mock drills and various trainingprograms to educate and prepare employees for chemical electrical and medical urgencies.

Your Company continues its commitment to employ and empower women through variousinitiatives including extended maternity leave policies and friendly work place policies.The Company has a policy on prevention of Sexual Harassment at workplace in line with therequirement of the Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. An Internal Complaints Committee (ICC) has been set up toaddress any complaint regarding sexual harassment and it did not receive any complaintduring the year.


Your Company employees are encouraged to participate in customer audits groupcompetitions various national and international events & competitions. Your Companycontinues to get accolades and awards from its customers and other prestigiousdomestic/international forums. Some of the awards and recognitions the Company receivedduring the year are as follows:

• Economic Times Best Brand

Conferred with the ''Economic Times Best Brands in Metal Cutting 2018 list in theGrinding Field”

• EEPC India's Regional Export Award

Conferred with “Star Performer Large Enterprises” for outstandingexport performance during year 2016-17 by Engineering Export and Promotion Council

• CII Innovation Award 2018

Conferred with “Innovative Company” for Glass Grinding Wheels Double DiscFine Grinding Wheels and Razor Blade Grinding Wheels and selected by CII IndustrialInnovation Awards 2018.


• Excellence Award for Green


Conferred with Award (Runner up) for Green business Category from ASSHOCHAM

• Lean Management Practices

Conferred with Platinum Award for Lean Management Practices from ABK AOTS

• Quality Circle/KAIZEN Awards by QCFI (Quality Circle forum of India):

Your Company's employees continued to exhibit their skills in various Quality Circlecompetitions as below:

• Regional Level

Gold award for Kaizen (5 teams) and SGA (1 team) Silver award for Kaizen (1 team) andSGA (2 teams)

• National Level

Gold award for Kaizen (5 teams) and SGA (1 team)

• POKAYOKE conclave by QCFI at Regional Level : Conferred with Gold Award

Cufest 2018 Awards

Your Company's employees participated in Group-level Quality competitions “Cufest2018” (Quality Festival of CUMI) and won awards for SGA 5S Best Slogan and IdeaKing

MGTC Shuttle Tournament

Your Company's employees participated in the Group level shuttle tournament and won“Winner” title in singles.


In the sections that follow the information required to be given in the ManagementDiscussion and Analysis have been provided.


The Indian manufacturing sector has witnessed a steady recovery in the last 2 yearswith the growth rate increasing from 2.8% in 2015 16 to 4.4% and 4.6% in 2016 17 and 201718 respectively. Needless to say a number of proactive Government initiatives like Makein India a forward-looking and simple FDI Policy and Skill India along with thecountry's higher rank on the Ease of Doing Business Index have been instrumental inreviving growth.

Your Company also strongly believes that the steps taken by the Government to ensuresustainable growth in the sector and a continuous inflow of foreign direct investmentsthrough several flagship initiatives and sectoral reforms would provide the much-neededimpetus for growth. Accordingly your Company continues to make necessary investments inidentified growth areas and deploy resources in order to sustain long term businessgrowth.


India has already surpassed many countries to become the sixth-largest economy. By2019 it is expected to become the fifth-largest economy and possibly the third-largestin next 25 years.

Tighter financial conditions higher oil prices adverse terms of trade lower growthin partner countries and rising political uncertainties in India and abroad may tend toreduce growth a bit. Although economic activity is projected to slow marginally in thefirst half of fiscal year recent improvements in the GST administration enablingexporters to get faster tax refunds and the depreciation of the rupee will boost exports.Corporate investment will remain vigorous supported by recent structural reforms ease ofdoing business and better infrastructure.

Investment is expected to grow steadily driven by the gradual increase in capacityutilisation large infrastructure programmes and recent structural reforms which aresupporting investors' confidence in particular the new Insolvency and Bankruptcy Code andpublic bank recapitalisation. The rebound in exports is supported by a weaker rupee and aneasier-to-comply-with Goods and Services Tax.


The purchasing power of people has increased due to the rise in per capita income. Thisis driving the global demand for vehicles. Vehicle restoration process is also fueling theglobal Super Abrasives market. Super Abrasives are also used for better finishing ofsurfaces in the automotive sector due to the increase in demand for electric andfuel-efficient vehicles. The demand on usage of Light vehicle is also expected to fuelrequirement of your company's products.

Further rise in Middle class Higher disposable income Health care EducationEntertainment Mobility: will create business opportunities for industries likeautomotive engineering and FMCG affordable healthcare and telecom as a result ofdemographic change which in turn create opportunity for Super Abrasives and Machine ToolBusiness

The Indian Super Abrasive tooling market continues to remain fragmented in nature andoperates in a highly competitive environment mostly dominated by the presence of feworganized players such as your Company and many owner driven small companies with strongfocus on regional presence. With its comprehensive range and being Total Grinding &Honing Solution provider your Company continues to be a preferred supplier many a timesas a single-source supplier for many major customers for a wide spectrum of industry forSuper Abrasive products. As a result of this your Company's growth mirrors the growth ofthese industries and customers.

Major contribution to your Company's top line would continue to be coming from sectorssuch as Automotive Engineering Cutting Tools Refractory Aerospace Defense SteelCeramics and Construction which incidentally are focus areas for the economic growth.

In pursuit of higher growth the Company constantly puts efforts and focuses onexploring new projects new opportunities new customers and new industrial segments.Accordingly Company has initiated its work on many new projects and continues to add newproducts every year to the product basket. On the other hand in order to minimizedependency on few industry segments your Company is relentlessly working on developingproducts for other industry segments which have long term growth prospects. As a result ofthese efforts your Company has been able to develop and offer many new products forindustries like Glass Blade Turbine Textile Gears Defense Construction Painting andAuto components.

Key Financial Summary
(Rs. in Lakhs)
Particulars 2018-19 2017-18 % change
Domestic Sales 9733 8828 10%
Export Sales 4253 3857 10%
Total Sales 13986 12685 10%
Operating Profit before Finance cost 1495 1243 20%
Capital Employed 11461 10908 5%

Key Ratios

Ratios 31.03.2019 31.03.2018
Performance Ratios
Operating Profit / Net Sales (%) 11 10
EBIDTA / Net Sales (%) 21 21
PBIT / Net Sales (%) 14 13
ROCE (%) 17 15
ROE (%) 12 11
Fixed Asset Turnover Ratio (times) 2.48 2.17
Activity Ratios
Inventory Turnover Ratio (days) 54 54
Receivable Turnover Ratio (days) 80 90
Liquidity Ratio
Current Ratio (times) 2.17 2.52

There were no significant changes in the Key ratios mentioned of the Company ascompared to previous year



The Indian Engineering sector has witnessed a remarkable growth over the last few yearsdriven by increased investments in infrastructure and industrial production. TheEngineering sector being closely associated with the manufacturing and infrastructuresectors is of strategic importance to India's economy.

Your Company would continue to be on constant search for potential businessopportunities in new industries and markets as they unfold resultant to the emerging Megatrends.

Your Company would continue to leverage upon its vast experience comprehensive productrange superior technology and the resultant competitive advantage emerging out of itsthree-complementing business vertical - the Super Abrasives the PrecisionGrinding / Honing Machines and the Precision Componentmanufacturing. Your Company would continue to leverage this unique advantage and derivemaximum benefits from its core strength of being the provider of Total Grinding &Honing Solutions which only few can aspire to have.

To compete with local player and to address the huge price sensitive market of standardand mass consumed Super Abrasives product your Company has also started promoting andselling the standard products under STAR Brand. This year the Company will stronglyfocus on Digital Marketing Initiatives to complement the marketing effort andextend its marketing reach.


The Domestic Super Abrasive Tool market is marked by the presence of both organized& unorganized players. At one end we have many unorganized regional proprietary-runentities that are smaller in size and operations. They have their presence in only limitedrange of Super Abrasive Products. Focusing on specific regions and addressing customerrequirements with lower prices has been one of their forte. On the other end there are afew organized and large players from both domestic and global markets. Almost always theglobal players rely on OEM Tie-ups with established Grinding / Honing machinemanufacturers thus making use of their long-established parental backgrounds offeringcombination of methods involving performance cost and technology service lock-ins andwarranty clauses.

In order to counter both the ends arising out of this polarization your Companycontinues to evolve a unique approach to improve its market presence and market share andaddress both segments. To address the low-end competition the Company offers innovativecost competitive products and enhanced the product range offered in STAR Brand. It wouldalso put the products on digital marketing platform. The high-end segment would continueto be serviced by developing import substitutes based on price-performance measures andvalue addition backed by its local strong technological service support. For addressingthe high performance quality conscious segment your company is working with foreignResearch Institutes and is on the lookout for product specific niche manufacturers foracquiring state of the art technology.


In terms of revenue Asia Pacific dominates the Super Abrasives market owing to therise in demand for vehicles across the globe. This rise can be attributed to the growth inper capita income and increase in purchasing power of people in emerging economies incountries such as China and India. Additionally Super Abrasives are extensively employedin finishing applications. Furthermore rise in activities such as rebuildingrefurbishing and renovation of old buildings has augmented investments in the building& construction industry thereby fueling the demand for Super Abrasives.

The Company's efforts will be primarily to retain its leadership position by offeringits comprehensive range of products increased market reach & penetration and addingnew products to its basket. In addition to this your Company would continue to intensifyits efforts in improving its market presence not only in domestic but also in the globalarena to address competition.

In the Super Abrasive business your Company will continue to drivegrowth through New Product Development Indigenization Efforts and Focus products. Whilethis would give stability to the business it will also focus on capitalizing on newopportunities in industry segments with high growth potential to ensure future growth. Asmentioned earlier your company has enhanced the existing product basket by adding allstandard products to be offered under STAR Brand through the distribution channel andonline marketing which is expected to make significant contribution to the overall growthof your Company. In addition building capability / capacity in identified products cellsincluding enhancing self-sufficiency and development of new products. Research andDevelopment will continue to be the focus of your Company.

On Machines your Company will continue to work towards strengthening itsMachine Tool business by Standardization of machines for Steel Industry and offer both inDomestic & Overseas markets and by consolidating various machine models / range toincrease the customer / industry base and our overall offering.

Precision component business is another growing area and your company will befocusing on enhancing the capacity of existing products and expanding it to the globalmarket. Your Company has planned addition of a few more precision components in line withEURO 6 Norms in the coming year.

Your Company's Thailand subsidiary Wendt Grinding Technologies Ltdwould continue to complement the mother business by churning out better results year onyear despite being affected by muted global recovery auto industry downtrend lowerdemand falling exports and political instability. As evident in the past the subsidiaryshows steadfastness and confidence for achieving the results in the coming year. In orderto accelerate its growth your subsidiary company has been strongly looking at newprojects and new markets in the coming year for which the finer specifics including thepotential benefits are under evaluation.

Your second subsidiary Wendt Middle East FZE Sharjah has beenconsistent in its performance over the last few years. Due to the on-going slow down andworsening liquidity situation in the Middle East the subsidiary is showing stagnatedperformance. Despite these difficulties and hardships your subsidiary continues to putall its efforts on certain markets and industries that have given good results duringthese tough times. Your subsidiary will continue to operate as the Product AvailabilityPoint (PAP) for the entire GCC region with focus on General Engineering Aerospace SteelCeramics Auto component & associated industry segments and holds enough promise forbetter performance in the coming year.

Particulars 2018-19 2017-18 2016-17 2015-16 2014-15
Generation of Gross Value added 5800 5272 4902 4417 4373
Breakup on Application of Value added
Payment to Employees 2892 2588 2363 2077 1812
Payment to Shareholders (on payment basis) 600 500 500 500 500
Payment to Government 740 692 490 539 270
Payment to Directors 21 16 5 5 5
Towards replacement and expansion 1547 1476 1544 1296 1787
Total 5800 5272 4902 4417 4373

• Gross Value Added is Revenue less Expenditure (excluding depreciationexpenditure on employee & directors service)

• Payment to Government is Current tax + Dividend distribution tax

• Replacement and expansion is Retained earnings + Depreciation + Deferred tax

• Payment to Employees grew at a CAGR of 12% over the last 5 years.

• Payment to Government grew at 29% CAGR over the similar period.

• The Company had been constantly investing towards replacement and expansionexpenditure to ensure fulfilment of market demand.


The company has a robust Risk management framework to identify evaluate and mitigatebusiness risks and opportunities. The framework seeks to create transparency minimizeadverse impact on the business objectives and enhance the Company's competitive advantage.

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 relatedconsequences

• 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

Some of the risks associated with the business and the related mitigation plans aregiven below. However the risks given below are not exhaustive and assessment of risk isbased on management perception

User Industry Concentration Risk

Why is it considered as a Risk?

• Significant exposure to select few sectors like auto and auto ancillaries

• Decline in demand due to global economic slowdown

• Loss of any of our significant customers changes in their requirements for ourproducts or change in ownership

• Failure to sustain a continuing economic recovery could have an adverse effecton our business

• Adverse impact brought in by new laws regulations or policies of governmentalorganizations

• Rebranding of products and the resultant delay in brand establishment

• Disruptive innovation & process changes.

Mitigation Plan / Counter Measure to address

• De-risking the business by widening the customer base / new industry segment& new geographies.

• Exploring growth opportunities in sectors like Aerospace Bearing Razor BladeGlass etc. based on Mega Trends.

• Continuously pursuing product innovation and new application development indiverse areas.

• Improving the On-Time Delivery levels through operational efficiency measureslike LEAN addressing the sustained competitive advantage.

• Aligning strategy towards delighting most significant customers both in domesticand as well as overseas market.

• Leveraging relationship and Engagement with the customer - e.g. WOW initiative /Exhibitions like IMTEX participation in international exhibitions like GRINDTEC GermanyMAC United Kingdom IMTS USA CIMT - China CRM & Knowledge Management application.

• Working with research institutes and product specific consultants

• Working with additive manufacturing like 3 D Printing

• In-house DSIR approved R&D centre. Also thrust on innovation with focus onNew Product Development to yield long term results.

• Branding promoting and selling Standard range of products under STAR Brand.

• Focus on Make In India.

Competition Risk

Why is it considered as a Risk?

• Cheaper Imports from countries like China and Taiwan.

• Imports directly and through OEM route

• Presence of unorganized regional players often adopting Low pricing strategyfree samples higher credit days etc.

• Entry of New Organized Players by setting up manufacturing base in Indiaconsequent to Make in India Drive.

Mitigation Plan / Counter Measure to address

• Focus on Lean & Address QCD Superior Quality Cost competitiveproducts & Reliable Faster Delivery

• Offering sustainable competitive advantage to customer through operationalefficiencies

• Enhancing value added services

• Internal Efficiency Measures/ process automation/ Reduce throughput time

• Creating entry barriers for competition / exit barriers for customers - keyaccount management

• Greater focus on New product development

• Increasing the product basket & offerings

• Building agile Supply chain by capitalizing on CUMI dealer network

• Explore E-Commerce and online sales

• Automation and Robotization to address Lower manufacturing cost and enhanceCompetitiveness

Technology Risk

Why is it considered as a Risk?

• The rapid changes taking place in the fields of grinding / honing technology andmaterial science.

• Technology gap in certain product ranges as a result of product upgradation byglobal competitors.

• Access to New Alternate technology following the expiry & Non- renewal oftechnical collaboration agreement with Wendt GmbH post Sept 2012.

• Adoption of Disruptive technologies like 3D printing.

Mitigation Plan / Counter Measure to address

• Collaboration with external consultants

• Established DSIR approved R&D center and build on self-sufficiency intechnology

• Indigenous development of Bonds with external consultant support and workingwith Research Institutes.

• Association with external Research laboratories / Technical institutes fortechnology upgradation.

• Working on Product and Process Innovations

HR & Legal Risk

Why is it considered as a Risk?

• Attrition of skilled / trained manpower leading to disruption of operations orknowledge gap

• Contractual liability e.g. Product liability

• Millennial work force No Long term interest

Mitigation Plan / Counter Measure to address

• Career Development l Succession planning

• Performance Management System

Knowledge Management Portal whereby all major establishedapplications are safely documented for reference and trail

• CCSD (CUMI Centre for Skill Development) providing employable technicians

• Market linked revision in Compensation

• Focus on multi skilling & skill upgradation.

• All contracts cleared by the Legal team

• lMentoring and Coaching program for the employees for enhancing engagement level

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

• Disaster Recovery Strategy & Business Continuity Plan in place.

• Policy in place for Technical Controls

• Data center access limited to authorized personnel

• Crisis Management Group in Place.

• Strengthening network security

• Enhancing Information Security policies & procedures


One of the key success factors for your Company's sustainability and consistentoperations has been the use of technology and SAP ERP system. During the year integrationhas been made within SAP modules to meet eWay Bill Compliance thus leveraging onthe benefits for smooth functioning and steady flow of information across variousfunctions and ensuring government norms.

Your Company has implemented SIEM (Security Information and Event Management)for identifying monitoring recording and analyzing security events or incidents in areal-time IT environment and EPDM (Enterprise Product Data Management) for Machinetools design team for effective utilization of Common drawings / Parts & leverageworkflow's within production / electrical teams to speed-up the manufacturing process asper time lines.


The Company had adopted Ind AS with effect from 1st April2016 pursuant to theCompanies (Indian Accounting Standard) Rules 2015 notified by the Ministry of CorporateAffairs on 16th February'2015.


The Company has an Internal Control system commensurate with the size scale andcomplexity of its operations. The controls have been designed and categorized based on thenature type and the risk rating so as to effectively ensure the reliability of operationswith adequate checks and balances.

The Company's internal control system covers the following aspects:

• Safeguarding the assets of the Company.

• Financial proprietary of business transactions.

• Compliance with prevalent statues regulations policies and procedures.

• Control over capital and revenue expenditure with reference to approved budgets

The Internal Audit team evaluates the effectiveness and adequacy of internal controlscompliance with operating systems policies and procedures of the Company and recommendsimprovements if any. The Audit Committee of the Board periodically reviews audit plansobservations and recommendations of the internal and external auditors with reference tothe significant risk areas and adequacy of internal controls and keeps the Board ofDirectors informed of its observations if any from time to time.

During the year there were no changes in internal control over financial reportingthat have materially affected or are likely to have any financial reporting lapse.

Internal Financial Controls

As per Section 134 of the Companies Act 2013 the term 'Internal Financial Control'(IFC) means the policies and the procedures adopted by the Company for ensuring:

a) Orderly and efficient conduct of its business including adherence to accountingpolicies

b) Safeguarding of its assets

c) Prevention and detection of frauds and errors

d) Accuracy and completeness of accounting records and

e) Timely preparation of reliable financial information.

The key components of IFC followed by the Company are:

1. Entity Level Controls (ELC) that the management relies on to establishappropriate Code of Conduct Hiring and Retention practices Whistle Blower mechanismDelegation of Authority and other policies and procedures.

2. Process Level Controls (PLC) to ensure processes are stable predictable andconsistently operating at targeted level of performance classified into Manual orAutomated Controls.

3. General IT Controls to ensure appropriate functioning of IT applications andsystems built by company to enable accurate and timely processing of financial data are -User Access rights Management and Logical Access Change Management controls; passwordpolicies and practices Patch management and License management; backup and recovery ofdata.

The adequacy of IFC is ensured by:

• Documentation of risks and controls associated with major processes.

• Validation classification of existing controls to mitigate risks.

• Identification of improvements and upgradation of the controls

• lImproving the effectiveness of controls through data analytics

• Performing testing of controls by Independent Internal Audit firm.

• Implementation of sustainable solutions to Audit observations.

The Audit Committee periodically evaluates Internal Financial Controls to ensure theyare adequate and operating effectively.


Earnings Revenues

During the year your Company clocked total sales of Rs.13986 Lakhs 10% higher thanthe previous year. Both the domestic and export sales grew by 10% over the previous yearat Rs.9733 Lakhs and 4253 lakhs respectively. As briefed earlier the major industrysegments which contributed to the growth of the domestic business are steel automobilecutting tools bearings etc. The higher export was due to higher sales to 10 focuscountries like Germany Indonesia Korea Spain Thailand UK and Singapore.

Profit before Tax

The Profit before Tax is higher by 15% at Rs.1904 Lakhs compared to Rs.1651 Lakhs in2017-18. The higher profit is because of the improved product and process efficiencymeasures taken by the Company and control over the fixed cost.

Profit after Tax

The Profit after Tax is higher by 10% at Rs.1347 Lakhs compared to Rs.1230 Lakhs in2017-18.

Liquidity and Cash Equivalents

Your Company continues to be debt free maintaining sufficient cash and cashequivalents to meet its futuristic strategic initiatives. This is achieved by beingprudent in its investment policy over the years maintaining a reasonably high level ofcash and cash equivalents which enables the Company to completely eliminate short andmedium-term liquidity risks.

The Company has a robust Cash Management Policy whereby it: a. Conserves sufficientcash as reserves that will aid the Company in venturing into meaningful businessopportunities that unfold during the year. b. Use cash to provide sufficient workingcapital to address business objectives of the Company & to add value to allstakeholders by continued enhancement. c. Prudently invest surplus funds that the businessgenerates in debt schemes of mutual funds as per Group norms and prior approval from theBoard. This ensures availability safety and liquidity of Company's funds while allowingreasonable yield as per the prevailing market rates. The surplus funds are generatedthrough stringent control on working capital.

During the year your Company's investment in mutual funds increased from Rs.1799 Lakhsto Rs.3166 Lakhs i.e. a growth of 76%.

As the earnings are ploughed back the capital expenditure need of your Company for theyear was met entirely from the internal accruals.


Your Company has done judicious cost control where by the fixed cost as percentage ofsales has been controlled at last year's level.

The variable costs have been controlled during the year through indigenization of rawmaterial and control on other input costs which has helped in improving the margins of theCompany. The Lean Management Initiative undertaken by your Company has also helped insignificant savings during the year.

Financial Position

Share Capital

The paid-up equity share capital as on 31st March 2019 was Rs.200 Lakhs. During theyear under review the Company has not issued shares with differential voting rights norgranted stock options nor sweat equity.

Share-holders Funds

The shareholders fund as on 31st March 2019 was Rs. 11461 Lakhs against Rs.10908 Lakhsof the previous year an increase of 5%. Accordingly the book value of the share standsat Rs. 573/- as compared to Rs.545/- during the previous year.

Loan Funds

Your Company is a debt free company. However it continues to utilize its cash creditlimit with State Bank of India to bridge the short-term fund requirement and for meetingthe temporary mismatches in its cash flow. Your Company does not have any interest-bearing term loan.

During the current year also the working capital limits of your Company continues tobe rated by ICRA as AA- (pronounced ICRA double A minus) rating assigned to the Rs.2 croreLong-term Fund facilities of your Company which signifies low credit risk and stability.The short-term Rating assigned to the Rs 6 crore Non-Fund Based working capital limit alsocontinued to be reaffirmed as A1+ (pronounced ICRA A one plus). Overall your Company'srating continues to be stable and low credit risk.


Fixed Assets

Your Company follows the policy of being prudent in its capex spend. During the currentyear the capital expenditure was Rs. 1207 Lakhs. The major capex spent was on addition ofnew plant & machinery towards capability building in fast growing products and newproducts capacity enhancements which are critical for the future growth of the Company.As in the past the Company follows the policy of funding all the capex through theinternal accruals.

Inventories and Sundry Debtors

The Company follows rigorous Working Capital Management based on a well-organizedprocess of continuous monitoring and control on Receivables Inventories and otherparameters. The overall inventory levels as on 31st March 2019 is Rs. 2272 Lakhs which ishigher than the previous year by Rs.396 Lakhs.

Receivables (Gross) as on 31st March 2019 were at Rs. 2781 Lakhs against last year'sfigure of Rs.3421 Lakhs. Despite the tough liquidity position your Company has been ableto maintain the receivable average credit days at 76 days which is lower by 3 days overthe previous year. This is possible through aggressive receivable management systemincluding close follow ups and credit lock through the SAP system to ensure thatreceivables are kept under control and payments received in time.

Foreign Exchange Hedging

Being the net exporter & based on its export & import position your Companycontinues to follow the natural hedging of foreign exchange earnings and outflow and doesnot take forward covers. The net forex gain during the year has been 42 lakhs (PreviousYear 115 lakhs).

Financial Performance with respect to Operational Performance

Your Company kept its Operating profit and Contribution better than the industryaverage by adopting stringent control measures for improved operational efficiency led bythe LEAN Initiative. This was aided by accurate information & customer datacentralized drawing management system better planning & scheduling through SAP ERPSystem and effective vendor management. Your Company's improved MIS reporting and abilityto respond to customer with real time information helped in giving rich experience to thecustomers there by providing value addition to the customer.

There are no material changes and commitments affecting the financial position of theCompany which have occurred between 31st March 2019 and the date of this report.


Your Company considers employees as its biggest assets. The Human Resource agendacontinues to support the business in achieving sustainable and responsible growth bybuilding the right capabilities in the organisation. It continues to focus on progressiveemployee relations policies creating an inclusive work culture and a strong talentpipeline.

Your Company is focused on building a high-performance culture with a growth mindsetwhere employees are engaged and empowered to be the best they can be. Developing andstrengthening capabilities of all employees in your Company has remained an ongoingpriority. Your Company has taken initiatives - Unnatham (meaning excellence) for ShopFloor supervisor to build a result-oriented shop floor team and sustain it.

For newly joined Graduate Engineer Trainees your Company conducted YOLO (Your OwnLearning Opportunities) program for enhancement of behavioral & technical skillsdeveloping relationships identifying and upgrading organizational behavioral needs.

In order to meet the growth plans set by the Company and to fulfil the ever changingneeds and expectations of the customers your Company continues to focus on competencybuilding skill enhancement and overall development so that its people are well preparedto take on the challenges.

The Company has a strong and diverse workforce where every employee is involved as“partners” in the progress. The intangible asset comprises all the competenciesof the people within the organization in terms of education experience potential andcapability. For High Potential Individuals the Company encourages them to undergomentoring and personality development programs to prepare them for leadership roles andbigger business challenges in futures.

Employee relations continue to be smooth and cordial and the work atmosphere remainedcongenial throughout the year. The manpower strength of confirmed employees of yourCompany as on 31st March 2019 was 415.


The Company as per the requirements of the Companies Act 2013 and Regulation 23 of theListing Regulations has a Policy for dealing with Related Parties.

In line with its stated policy all Related Party transactions are placed before theAudit Committee for review and approval. Prior approval of the Committee is taken on aquarterly basis for the estimated value of transactions which are foreseen and repetitivein nature. Omnibus approval in respect of transactions which are not routine or whichcannot be foreseen or envisaged are also obtained as permitted under the applicable laws.The list of related parties is reviewed and periodically updated as per the prevailingregulatory conditions.

During the year there were no materially significant related party transactions madeby the Company with its Promoters Directors Key Managerial Personnel or their relativesor other designated persons which may have a potential conflict with the interest of theCompany at large. There are no contracts or arrangements entered into with Related Partiesduring the year to be disclosed under Sections 188(1) and 134(h) of the Companies Act2013. None of the Directors or KMP had any pecuniary relationships or transactionsvis-a-vis the Company other than those in relation to remuneration in their capacity asDirectors/Executives and corporate action entitlements in their capacity as shareholdersof the Company.

The Policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website



As on 31st March 2019 the Board of Directors comprises of six Directors of whichmajority (four) are independent. During the year Mr. Rajesh Khanna who was the ChiefExecutive Officer of the Company was appointed as an Additional Director on 24th July 2018and further appointed as a Whole-Time Director (Executive Director) & CEO for a termcommencing from 24th July 2018 to 20th October 2020 by the Board with the recommendationof the Nomination and Remuneration Committee. Accordingly his appointment as a Directorunder Section 152 of the Companies Act 2013 and as an Executive Director for the aboveterm is placed before the shareholders for approval and hence forms part of the Noticeconvening the 37th Annual General Meeting of the Company.

Mr. M M Murugappan ceased to be a Director of the Company consequent to his resignationfrom the Board with effect from closing hours of 24th July 2018 pursuant to hisprofessional commitments. The Board places on record its appreciation for the servicesrendered by Mr. M M Murugappan as the Chairman of the Board. Consequent to hisresignation Mr. Shrinivas G Shirgurkar was appointed as the Chairman of the Board.

Pursuant to Section 167 of the Companies Act 2013 since Mr. Edmar Allitsch and hisalternate Mr. Peter Johannes Verholen have not been attending any meetings of theBoard/shareholders despite the Company promptly sending them notices convening themeetings the office of Mr. Edmar Allitsch and Mr. Peter Johannes Verholen stands vacatedwith effect from 7th March 2019. While Mr. Edmar Allitsch and his alternate Director Mr.Peter Johannes

Verholen have not attended any meetings since January 2011 the Company was restrainedto effect the vacation of office since the matter of altering the composition wassub-judice. Consequent to the vacation of the interim stay dated 18th January 2011 by theHon'ble National Company Law Tribunal vide order dated 7th March 2019 the Board at itsmeeting held on 25th April 2019 took note of the automatic vacation of office of Mr. EdmarAllitsch and Mr. Peter Johannes Verholen.

In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. K Srinivasan Director retires by rotation at theforthcoming Annual General Meeting and being eligible offers himself for re-appointment.The necessary resolution is being placed before the shareholders for approval. The Boardof Directors of your Company believe that his continued association with the Company willbe beneficial to the Company and recommends his re-appointment.

Mr. Shrinivas Shirgurkar and Mr. K S Shetty who were appointed as Independent Directorsat the Annual General Meeting (AGM) held on 24th July 2014 for a period of five years fromthe AGM date will hold office till the close of business hours of 23rd July 2019.Considering their technical expertise business knowledge and their contribution to theCompany and that they satisfy the independence criteria laid down under the Act and theListing Regulations the Board at its meeting held on 25th April 2019 considered theirre-appointment as Independent Directors for a second term of five years commencing from24th July 2019 and recommended the same to the shareholders. Mr. Shrinivas Shirgurkar andMr. K S Shetty who are eligible for re-appointment as Independent Directors of the Companyhave expressed their willingness to seek re-appointment for a second term of five yearssubject to the approval of the shareholders vide a special resolution at the ensuing AGM.Accordingly necessary resolutions in this regard is being placed before the shareholdersat the 37th AGM.

All the Directors of the Company have confirmed that they are not disqualified frombeing appointed as Directors in terms of Section 164 of the Companies Act 2013. TheCompany has received declarations from all its Independent Directors confirming that theymeet the criteria of Independence prescribed both under the Companies Act 2013 andListing Regulations.


The Board has appointed Ms. Janani T A as the Company Secretary with effect from 16thNovember 2018 in place of Ms. Akanksha Bijawat who had resigned from the services of theCompany with effect from closing hours of 15th November 2018.

Mr. Rajesh Khanna Executive Director & CEO Mr. Mukesh Kumar Hamirwasia ChiefFinancial Officer and Ms. Janani T A Company Secretary are the Key Managerial Personnelof the Company as per Section 203 of the Companies Act 2013.


A calendar of Board Meetings is prepared and circulated in advance to the Directors.

During the year five Board Meetings were convened and held in accordance with theprovisions of the Act. The date(s) of the Board Meeting attendance by the Directors aregiven in the Corporate Governance Report forming an integral part of this report.


In compliance with the provisions of Sections 135 177 178 of the Companies Act 2013the Board has constituted Corporate Social Responsibility Committee Audit CommitteeNomination and Remuneration Committee and Stakeholders Relationship Committee. During theyear pursuant to the changes in the composition of the Board the constitution of variousCommittees of the Board was also reviewed and revised. The details of composition of theCommittees their meeting and attendance of the members are given in the CorporateGovernance Report forming an integral part of this report.


Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of ListingRegulations the Board had carried out an annual evaluation of its own performance theDirectors individually and the Committees of the Board. Structured assessment forms whichwere duly reviewed were used in the overall Board evaluation process comprising variousaspects.

The manner in which evaluation has been carried out has been explained in the CorporateGovernance Report.


The Board has framed a policy for selection and appointment of Directors SeniorManagement and their remuneration. Brief particulars of the Remuneration policy forms partof the Corporate Governance Report. During the year the Board had reviewed theRemuneration Policy of the Company in line with the amendments to the Companies Act 2013and Listing Regulations.


The information required pursuant to Section 197(12) of the Act read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended bythe Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules 2016forming part of Directors report for the year ended 31st March 2019 is annexed in AnnexureD.


Pursuant to the provisions of Section 139 of the Companies Act 2013 and the rulesframed thereunder M/s Price Waterhouse Chartered Accountants LLP were appointed asStatutory Auditors for a term of 5 consecutive years at the 35th Annual General Meeting ofthe Company held on July 24 2017 subject to ratification of their appointment at everyAGM.

The Report given by M/s Price Waterhouse Chartered Accountants LLP on the FinancialStatements of the Company for the year ended 31st March 2019 is provided in the financialsection of the Annual Report. There are no qualifications reservations adverse remarksor disclaimers given by the Auditors in their report. The notes on the accounts referredto in the Auditors' Report are self- explanatory and do not call for any further comments.

The Companies (Amendment) Act 2017 has dispensed with the requirement of annualratification of the Statutory Auditors' appointment. Hence the proposal seeking approvalof the shareholders for ratification of the Statutory Auditor's appointment is not placedbefore the shareholders at the 37th Annual General Meeting.


Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Rulesframed thereunder the Company has appointed M/s Apeksha Nagori Practicing CompanySecretary to undertake the secretarial audit for the financial year 2018-19. The Report ofthe Secretarial Auditor confirming compliance with the applicable provisions of theCompanies Act 2013 and other rules and regulations issued by SEBI/other regulatoryauthorities forms part of the Annual Report. There were no qualifications or adverseremarks in the audit report except an observation in respect of compliance with theminimum public shareholding of 25% of the paid-up capital of the Company.

M/s. Carborundum Universal Limited promoter had in 2011 filed a petition against theCompany and 8 other respondents (Wendt GmBh 3M and others) for oppression andmismanagement of the affairs under Sections 397/398 of the erstwhile Companies Act 1956.The Company Law Board had passed an interim order on 18th January 2011 restricting theRespondents 2-8 from altering the composition of the Board and the shareholding pattern ofthe Company. Pursuant to the interim order the Company has been unable to maintainminimum public shareholding of 25%.

The Hon'ble National Company Law Tribunal (NCLT) at the hearing held on 7th March 2019had dismissed the petitions filed by Carborundum Universal Limited against the Company and8 others and has directed SEBI to take appropriate judicious decision as expeditiously aspossible on the issue of the purchase of 20% of the public shareholding” of Wendt(India) Limited in view of the open offer made by M/s. 3M (Schweiz) AG after providingproper opportunity to Carborundum Universal Limited to put forward their views on theissue. The Company awaits direction from SEBI on the open offer already made by M/s. 3M(Schweiz) AG.


The Company is in compliance with the Secretarial Standard on Meetings of the Board ofDirectors (SS-1) and Secretarial Standard on General Meetings (SS-2).


The Governance Philosophy of your Company is firmed up on a bedrock of ethical valuesand professionalism which in more than 3 decades of the Company's existence has become apart of its culture. Wendt (India) Limited looks upon good Corporate Governance practicesas a key driver of sustainable corporate growth and long-term stakeholder value creation.

The Company's practices and policies reflect true spirit of Corporate Governanceinitiatives.

In terms of Regulation 34(3) read with Schedule V of the Listing Regulations aseparate section on Corporate Governance including the certificate from a PractisingCompany Secretary confirming compliance is annexed to and forms an integral part of thisReport.


The Chief Executive and the Chief Financial Officer have submitted a certificate to theBoard on the integrity of the financial statements and other matters as required underRegulation 17(8) of the Listing Regulations.


The Company has a well-established whistle blower policy as part of vigil mechanism forDirectors and employees to report concerns about unethical behavior actual or suspectedfraud or violation of the Company's Code of conduct or ethics policy. This mechanism alsoprovides for adequate safeguards against victimization of Director(s)/employee(s) whoavail of the mechanism and also provides for direct access to the Chairman of the AuditCommittee in exceptional cases.


The extract of the Annual Return in form MGT 9 as required under Section 92(3) of theAct and the Rules framed thereafter is annexed to and forms part of this report. TheAnnual Return in Form MGT 7 is available at


Pursuant to the provisions of Section 134(3)(c) of the Companies Act 2013 the Boardto the best of its knowledge and belief and according to the information and explanationsobtained by it confirm that:

• in the preparation of the annual accounts for the year ended 31st March 2019applicable accounting standards have been followed and there have been no materialdepartures thereof;

• they have selected appropriate accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at the end of the financial year andof the profits of the Company for that period;

• proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

• the annual accounts have been prepared on a going concern basis;

• proper internal financial controls have been laid down to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively;

• proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.


The information on energy conservation technology absorption expenditure incurred onResearch & Development and forex earnings/outgo as required under Section 134(3)(m) ofthe Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 isannexed to and forms part of this Report (refer Annexure A).


There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status of the Company and its future operations.


There were no significant changes in the Key ratios of the Company as compared toprevious year. Further the change in Return on Networth are compared to previous year wason account of increased profits.


The Board would like to record their sincere appreciation for the co-operation receivedfrom various stakeholders of the Company viz. customers suppliers bankers investorschannel partners government and other statutory authorities auditors businessassociates and shareholders. Your Directors extend their gratitude to all the regulatoryagencies like SEBI Registrar of Companies stock exchanges and other Central and StateGovernment authorities/agencies vendors and sub-contracting partners for their support.The Board also acknowledges the unstinted co-operation commitment and dedication made byall the employees of the Company.

The Directors also wish to place on record their gratitude to the members of theCompany for their unrelenting support & confidence.

On behalf of the Board
For Wendt (India) Limited
Place: Hosur Shrinivas G Shirgurkar
Date: 25th April 2019 Chairman

Annexure to the Directors Report

A) Information under section 134(3)(m) of the Companies Act2013 read with Rules 8(3)of The Companies (Accounts) Rules 2014 and forming part of Director's Report.

a) Conservation of Energy

Your Company does not fall under the category of power intensive industries. Howeveryour Company adopts sustained efforts to reduce energy consumption. The organization is anISO 14001 certified company which is an International Management System Standard. Theenvironmental policy of your Company focusses on conservation of natural resources andminimization of pollution. The following energy conservation measures were taken by yourCompany during the year:

• Replacement of all conventional high energy consumption lightening byinstallation of LED and Induction Lights in major areas;

• Introduction of LDR- light dependent resistance sensor harnessing naturaldaylight for all outdoor lighting with automatic controls;

• Introduction of Natural Turbo Ventilation which is reckoned as a perfect andnatural air exhausting option for the industry;

• Installation of Solar Heater in Canteen Area to wash vessels and utensils;

• Installation of APFC (Automatic Power Factor Controllers) to improve/stabilizePower factor;

• Installation of occupancy sensors in washrooms & lavatories;

• Optimum utilization of energy through process redesigning as well as maximumutilization of equipment that offers improved energy efficiency;

• Time switches installed at various places for automatic control of streetlights;

• Your Company has taken measures to save water whereby 100% of the domesticeffluent and the trade effluent are treated and used for gardening and electroplatingprocesses (Zero discharge).

b) Technology Absorption Adaptation and Innovation

Your Company thrives on quick absorption of latest technology and its adaptation inboth Super abrasive and Machine Tools business. Your Company develops its own technology& appended process by aggressively pursuing its R&D efforts through theestablishment of R&D Centre and also collaborating with renowned institutes &laboratories who have gained sufficient knowledge in your Company's product lines.

As a result your Company has been able to develop some of the products that areextensively used in wide range of industries like Refractory Ceramics ConstructionGlass and Composite Cutting Tools Steel and Textile & Paper. Your Company has alsoidentified and initiated few more areas for bond development for industries such as RotaryTools Ceramics Bearing Glass Automobile etc with the help of a well-qualified andexperienced external consultant.

Through its independent endeavours to strengthen the technology base and R&Dactivities your Company has had close association with one of the renowned researchinstitutes based in Europe for in house development and manufacture of Brazed products.Your Company also banks on the rich experience knowledge pool and R&D facility of itsIndian Joint venture partner Carborundum Universal who are leaders in the field onconventional abrasive & material science for some of the application developments forspecific areas.

Your Company continuously focuses towards the re-engineering of processes and works oncost economical raw material alternatives for its products in order to improve operationalefficiency thereby reducing costs and waste elimination. No technology was imported byyour Company during the last three years.


The R&D of Wendt (India) Limited is involved in design and development of superabrasive products through advancement of Material Science & Machining Techniquestowards providing the “Complete Grinding Solutions” to its Customers &Market at large accordingly. To maintain rapid changing needs of automobile (such aspowertrain bearing gears tool grinding etc.) aerospace electronics and oil & gassectors the need of precise grinding and finishing solution with modern technologies iscritical to sustain in the market. Research & Development at the Company has beenplaying an important role to lead innovation and developing competitive technology. YourCompany's R&D Centre is recognized by DSIR under the Ministry of Department of Scienceand Technology Government of India.

Your Company R&D is equipped with state-of-the-art research facilities for thedevelopment of Technology/Products/Processes and it is very well supported by a highlyqualified experienced and dedicated team. Having fully equipped R&D has takenseveral initiatives to work on most expedient objectives of the Company with a view to addkey features to the grinding & finishing applications. It is being done to improveexisting products through technology up-gradation as well as launching the new products inthe market. Research on customized grits and alternate raw materials with a view to offera better value proposition to its customers.

One of the key strategies of the Company is to form consortiums withUniversities/Institutes in India and abroad to develop next generation smart grindingsolutions. It is to be noted that projects have already been initiated to accomplishnano-finishing with CMMRF (Chemical Mechanical Magneto Rheological Finishing) Technologylight weight grinding wheels for high speed grinding applications self-dressing &self-lubricating grinding wheels to gain insights into and providing effective grindingsolutions.

Projects completed in R&D: -

• Development of Metal bonded Wheels for Glass Grinding Application with newprocess for Solar Automotive and Structural Application.

• Bond Development and Spiral Wheel design for Razor Blade Grinding application

• Create state-of-the-art testing and R&D infrastructure for internalvalidation.

• Development of indigenized Polyamide Bonds for grinding WC Rolls.

• Development of Double Disc Fine Grinding wheels for grinding of Ceramics andSintered metal parts

• Development of Bonding material for Resin bonded wheel.

• Development of WAM wheels for Fuel Pump part's grinding application.

Following projects are under progress in R&D: -

• Development of Vitrified bond for Crankshaft and Camshaft applications.

• Development of glass grinding wheels for Auto Ophthalmic application.

• Development of CFRP super abrasive wheels for high speed grinding applications.

• Development of Hybrid bonding system for Fluting applications

• Development of Carbide Insert grinding wheels

• Developing nanometric surface finishing of optical lenses electro ceramics andbio-implants using Chemo-Mechanical Magneto-Rheological Finishing (CMMRF).

• Development of Gruff (Progressive grinding) wheel for blade grinding application

• Development of super abrasive (SA) grits / modified SA grits.

• Vitrified bonded CBN ID grinding wheels for fuel injection nozzle bore and seatface grinding applications

Following are the benefits accruing out of R&D activities:

• Development of bonds for self-sufficiency.

• Indigenization of Bonding raw Materials for super abrasives as importSubstitution.

• Grinding Solutions for New applications like glass razor blade vanesceramics & carbide grinding which has contributed in company's Top Line

• Upgrading Manufacturing Technologies to match changing needs of the customer aswell as to venture into new markets.

• Your Company's R&D facility has got the recognition and approval from DSIR& earned certain fiscal benefits from the Govt. of India towards carrying out R&Dactivities.

Your Company's continued investment in research and development has resulted indevelopment of some of the new products with special features for the grinding andfinishing applications in the previous year.

Some of the new products and processes developed by your Company last year are

• Glass grinding wheels for Structural and Solar applications.

• Development of Double Disc Fine Grinding Wheels l Development of metal bondedwheels using improved system.

• Adopted improved process technology for pressing of vitrified segments

l Development of Diamond Grinding Wheel for Insert Grinding Application

Benefits derived: Your Company mainly caters to niche market where majority ofcustomers are OEMs and look for technologically superior products with consistentperformance. With majority of the customers considering your Company as a One-Stop Shopfor Complete Grinding and Honing Solutions offering technologically superior productswith reliable performance. Your Company can address the ever-changing needs &expectations of the customers by virtue of its strong focus on R&D and focus oncustomer centricity. This facilitates your Company to retain its dominant position in themarket and also enable to justify the due premium for its product reflecting on yourCompany's profitability.

(i) Expenditure on R&D (Rs. In Lakhs)
Particulars 2018-19 2017-18
a) Capital Expenditure 33 64
b) Recurring (revenue expenditure) 217 163
c) Total Expenditure 250 227
d) Total R&D Expenditure as a percentage of turnover 1.79% 1.79%
(net of excise duty)
(ii) Foreign Exchange Earnings and Outgo (Rs. In Lakhs)
Particulars 2018-19 2017-18
a) Foreign Exchange Outgo 3375 2822
b) Foreign Exchange Earned 4462 4061


On behalf of the Board
For Wendt (India) Limited
Place: Hosur Shrinivas G Shirgurkar
Date: 25th April 2019 Chairman

Safe Harbor

This communication contains statements relating to future business developments andeconomic performance that could constitute 'forward looking statements'. While theseforward-looking statements represent the Company's judgments and future expectationsseveral factors could cause actual developments and results to differ materially fromexpectations. Your Company undertakes no obligation to publicly revise any forward-lookingstatements to reflect future events or circumstances. Further investors are requested toexercise their own judgment in assessing various risks associated with the Company and theeffectiveness of the measures being taken by the Company in tackling them as thoseenumerated in this report are only as perceived by the management.



A. The details of top ten employees in terms of remuneration drawn during the financialyear 2018-19 as per Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 duly amended by the Companies (Appointment and Remuneration ofManagerial Personnel)

Amendment Rules 2016 are as follows:

Sl. No. Name and Age Designation/ Nature of duties Gross remunerati on paid (Rs in Lakhs) Qualification & experience (years) Date of commencement of employment Previous employment
1. Rajesh Khanna (58) Chief Executive Officer 131.48 B.E (Mech) PGDBA (36 years) 01-10-1982 Nil
2. M S Venkatesh (53) Unit Head 48.69 B.E. (29 years) 25-03-1996 Mysore Kirloskar Ltd.
3. S Sundariya (55) Business Head- Machine & Precision Components 36.74 IIIE (36 years) 03-08-1992 Rane Brake Lining Limited
4. Mukesh Kumar Hamirwasia (47) Chief Financial Officer 35.70 B.COM (Hons) ACA AICWA (21 years) 15-04-2010 Ecom Gill Coffee Trading Pvt. Ltd.
5. D K Hotta (55) Business Head- Super Abrasives 28.26 B.E. PGDBA (28 years) 16-09-2002 ICFAI Business School
6. Santosh Kulkarni P (48) Marketing Head -SA - Domestic & Exports 23.23 B.E. (26 years) 02-05-1997 Ultra Filter Pvt. Ltd.
7. Prasanna Kumar H K (58) General Manager - TQM Lean & Management Standards 21.97 DME (34 years) 09-09-1985 WIDIA
8. Uday R B (50) Senior General Manager - SA Manufacturing 21.88 M. Tech (26 years) 08-01-2005 Sundram Fasteners
9. Ponnuvel C (58) General Manager - Precision Components 21.65 DME (39 years) 10-12-1984 Usha Telehoist Ltd.
10. Rathinam P (48) DGM - SA Manufacturing 21.57 M. Tech (29 years) 08 - 06 - 1992 Nil

1. Remuneration shown above includes salary allowances Company's contribution toprovident superannuation and gratuity funds medical facilities and perquisites valued asper income tax rules.

2. The employment of the above persons is whole-time in nature and terminable with 3months' notice on either side.

3. The above mentioned employees are not relatives (in terms of the Companies Act2013) of any Director of the Company. Further no employee of the Company is covered bythe Rule 5(2)(iii) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 (employee holding by himself or with his family shares of 2% or more in theCompany and drawing remuneration in excess of the Managing Director). Hence the detailsrequired under Rule 5(3) (viii) is not applicable.

4. The remuneration details are for the financial year 2018-19 and all otherparticulars are as on 31st March 2019.

5. None of the employees of the Company other than Mr. Rajesh Khanna ExecutiveDirectorwere in receipt of remuneration for the FY 2018-19 in excess of Rupees one croreand two lakh Rupees per year or eight lakh and fifty thousand Rupees per month.

6 Mr. Rajesh Khanna who was the Chief Executive Officer was appointed as an AdditionalDirector and an Executive Director with effect from 24th July 2018 subject to the approvalof the shareholders of the Company. He is subject to the service conditions of theCompany.

B. The details of remuneration during the year 2018-19 as per Rule 5(1) of theCompanies (Appointment & Remuneration of Managerial Personnel) Rules 2014 as amendedby the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules2016 as are as follows:

(i) The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year. K Srinivasan - Nil
K S Shetty 0.95
Shrinivas G Shirgurkar - 0.94
Hima Srinivas - 0.97
M Lakshminarayan - 0.97
Rajesh Khanna 0 NA
(ii) Percentage increase in remuneration of each director Chief Financial Officer Chief Executive Officer Company Secretary in the financial year. K Srinivasan Non-Executive Director - Nil
K S Shetty Independent Director - (7.41)
Shrinivas G Shirgurkar Chairman - (7.55)
Hima Srinivas Independent Director - NA
M Lakshminarayan Independent Director - NA
Rajesh Khanna Executive Director & CEO - NA
Mr. Mukesh Kumar Hamirwasia CFO - 8.36
Ms. Janani Company Secretary - NA*
Ms. Hima Srinivas and Mr. M Lakshminarayan joined the Board during FY 2017-18 and hence remuneration is not comparable.
Mr. Rajesh Khanna was appointed as an Executive Director on 24th July 2018 and hence his remuneration is not comparable. *deputed from Carborundum Universal Limited
The decrease in remuneration of Non-Executive Directors was mainly on account of the number of Board meetings attended by them during the year.
(iii) percentage increase in the median remuneration of employees in the financial year. 11% (employees who were in employment for the whole of FY 2017-18 and whole of FY 2018-19 considered for this purpose in the respective financial years)

(iv) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year: 9.90%

(v) Percentile increase in the managerial remuneration: Not applicable as Mr. RajeshKhanna was appointed as an Executive Director during the year.

Annual increase in employee's remuneration is based on Company and individualperformance. The individual performance parameters varies based on employee cadres. TheManagerial remuneration is subject to regulatory ceiling limits. Other than the ExecutiveDirector the remuneration of Directors comprises only sitting fees and commission.

(vi) Affirmation that the remuneration is as per the remuneration policy of the company. The Company is in compliance with its Remuneration Policy.