MIRA INFORM REPORT

Report Date :

07.07.2014

IDENTIFICATION DETAILS

Name :	WENDT (INDIA) LIMITED
Registered Office :	Flat No.105, 1^st Floor, Cauvery Block, National Games Housing Complex, Koramangala, Bangalore – 560047, Karnataka
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	21.08.1980
Com. Reg. No.:	08-003913
Capital Investment / Paid-up Capital :	Rs.20.000 Millions
CIN No.: [Company Identification No.]	L85110KA1980PLC003913
TAN No.: [Tax Deduction & Collection Account No.]	BLRW00459E
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturer of Super Abrasive Grinding Wheels (Diamond and Cubic Boron Nitride), Special Purpose Grinding Machines and Tools.
No. of Employees :	279 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

A (68)

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 3050000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company having fine track record. The rating reflects company’s strong financial risk profile marked by sustained market position in the domestic super-abrasive industry and its diversified customer as well as product mix lending business stability. Further rating also reflects adequate liquidity position and decent profitability levels of the company. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31, 2014

Country Name	Previous Rating (31.12.2013)	Current Rating (31.03.2014)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

INDIAN ECONOMIC OVERVIEW

N E W S

The economy grew 4.7 %in 2013/14, marking a second straight year of sub-5 % growth – the worst slowdown in more than a quarter of a century. The data was below an official estimate of 4.9 % annual growth and compared with 4.5 % in the last fiscal year. However, the current account deficit narrowed sharply to $ 32.4 billion at 1.7 % of gross domestic product, in 2013/14 from a record high of $ 98.8 billion or 4.7 %, the year before.A sharp fall in gold imports due to restrictions on overseas purchases and muted import of capital goods helped shrink the current account deficit.

Online retailer Flipkart has acquired fashion portal Myntra as it prepares to battle with the rapidly expanding India arm of the global e-commerce giant Amazon. The company raised $ 210 million from Russian Investment firm DST Global which has also invested in companies like Facebook, Twitter and Alibaba Group.

General Motors will start exporting vehicles from its Talegaon plant near Pune in the second half of 2014. GM was one of the few global carmakers that was using its India plant only for the domestic market.

Google has overtaken Apple as the world’s top brand in terms of value, according to global market research agency Millward Brown. Google’s brand value shot up 40 % in a year to $ 158.84 billion. The top 10 of the 100 slots were dominated by US companies.

Infosys lost another heavy weight when B G Srinivas, a board member put in his papers. He is the third CEO-hopeful to quit after Chairman N R Narayana Murthy’s return to the company – Ashok Vemuri and V Balakrishnan being the other two.While Vemuri went on to lead IGate, Balakrishnan joined politics.

Naresh Goyal – promoted Jet Airways posted biggest quarterly loss – Rs 2153.37 crore – in the three months ended March 31, mainly because it has been offering discounts to passengers to fill planes.

William S Pinckney – Chairman and CEO of Amway India was arrested by the Andhra Pradesh Police in connection with a complaint against the direct selling firm. This is the second time that he has been taken into custody. A year, ago the Kerala Police had arrested Pinckney and two company directors on charges of financial irregularities.

China has told its state-owned enterprises to sever links with American consulting firms after the United States charged five Chinese military officers wih hacking US companies. China’s action which targets consultancies like McKinsey & Co. and the Boston Consulting Group, sterns from fears that the first are providing trade secrets to the US governments.

India has emerged as a country with some of the highest unregistered businesses in the world. Indonesia has the maximum number of shadow businesses, says a study of 68 countries by Imperial College Business School in London.

Pfizer has abandoned its attempt to buy AstraZeneca for nearly $ 118 billion after the latter refused an offer of 55 pounds a share.

EXTERNAL AGENCY RATING

Rating Agency Name	ICRA
Rating	AA- (Long Term fund based limits)
Rating Explanation	High degree of safety and very low credit risk.
Date	May 2014

Rating Agency Name	ICRA
Rating	A1+ (Short Term Fund Based Limits)
Rating Explanation	Very strong degree of safety and lowest credit risk.
Date	May 2014

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

INFORMATION DENIED

Management Non Co-Operative (91-80-25701423)

LOCATIONS

Registered Office :	Flat No.105, 1^st Floor, Cauvery Block, National Games Housing Complex, Koramangala, Bangalore – 560047, Karnataka, India
Tel. No.:	91-80-25701423/ 1424
Fax No.:	91-80-25701425
E-Mail :	wil@wendtindia.com investorservices@wendtinidia.com apekshanagori@wendtindia.com akankshab@wendtindia.com investorservices@wendtindia.com
Website :	http://www.wendtindia.com
Factory :	Plot 69/ 70, SIPCOT Industrial Estate, Hosur – 635126, Tamilnadu, India
Tel. No.:	91-4344-276851/ 276852/ 276854/ 405500/ 405501
Fax No.:	91-4344-405620/ 405619/ 405630

DIRECTORS

As on: 31.03.2013

Name :	Mr. M. M. Murugappan
Designation :	Chairman
Name :	Mr. Edmar Allitsch
Designation :	Director
Name :	Mr. Shrinivas G. Shirgurkar
Designation :	Director
Date of Birth/ Age :	08.04.1948
Qualification :	BE (Mechanical)
Date of Appointment :	17.04.2006
Name :	Mr. K S Shetty
Designation :	Director
Name :	Mr. Peter Verholen
Designation :	(Alternate to Edmar Allitsch)
Name :	Mr. K. Srinivasan
Designation :	Director
Date of Birth/ Age :	22.11.1957
Qualification :	B Tech(Mechanical)
Date of Appointment :	30.01.2002

KEY EXECUTIVES

Name :	Mr. Rajesh Khanna
Designation :	Chief Executive
Name :	Mr. D. R. Kulkarni
Designation :	Head - Technology and R and D
Name :	Mr. M S Venkatesh
Designation :	Business Head - Superabrasives
Name :	Mr. S Sundariya
Designation :	Business Head - Non-Superabrasives
Name :	Mr. Mukesh Kumar Hamirwasia
Designation :	Chief Financial Officer
Name :	Akanksha Bijawat
Designation :	Company Secretary (w.e.f. 29.04.2013)

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on: 31.03.2014

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	797352	39.87
Sub Total	797352	39.87
(2) Foreign
Individuals (Non-Residents Individuals / Foreign Individuals)	797352	39.87
Sub Total	797352	39.87
Total shareholding of Promoter and Promoter Group (A)	1594704	79.74
(B) Public Shareholding
(1) Institutions
Financial Institutions / Banks	1850	0.09
Sub Total	1850	0.09
(2) Non-Institutions
Bodies Corporate	12808	0.64
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	370296	18.51
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	13529	0.68
Any Others (Specify)	6813	0.34
Non Resident Indians	3597	0.18
Clearing Members	566	0.03
Directors & their Relatives & Friends	2650	0.13
Sub Total	403446	20.17
Total Public shareholding (B)	405296	20.26
Total (A)+(B)	2000000	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	2000000	0.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Super Abrasive Grinding Wheels (Diamond and Cubic Boron Nitride), Special Purpose Grinding Machines and Tools.

GENERAL INFORMATION

No. of Employees :	279 (Approximately)
Bankers :	State Bank of India
Facilities :	--

Banking Relations :	--
Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountants
Address :	Bangalore, Karnataka, India
Cost Auditors :
Name :	M.R. Rajhshekar and Company Cost Accountants
Address :	Hosur, Tamilnadu, India
Party with whom control exists –Subsidiaries :	· Wendt Grinding Technologies Limited, Thailand · Wendt Middle East FZE, Sharjah
Ventures to the joint venture with whom transactions have taken place during the year :	· Carborundum Universal Limited (CUMI) · Wendt GmbH Germany

CAPITAL STRUCTURE

As on: 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
3000000	Equity Shares	Rs.10/- each	Rs.30.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
2000000	Equity Shares	Rs.10/- each	Rs.20.000 Millions

NOTE 2 (i)

Particulars	As at 31st March, 2013
	No of shares	Rs. In Millions
Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the year:
No of shares outstanding at the beginning of the year	2000000	20.000
Add: Additional shares issued during the year	--	--
Less: Shares forfeited / Bought back during the year	--	--
No of shares outstanding at the end of the year	2000000	20.000

Details of Shares held by each Shareholder holding more than 5% Shares in the Company

Particulars	As at 31st March, 2013
	No of shares	Percentage of holding %
Equity Shares : (with equal voting rights)
Wendt GmbH, Germany	797352	39.87
Carborundum Universal Limited, India	797352	39.87

Rights, Preferences and Restrictions attached to shares

The Company has only one class of equity shares with voting rights (one vote per share). The dividends proposed by the Board of directors is subject to approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the equity shareholders are entitled to receive only the residual assets of the Company. The distribution of dividend is in the proportion to the number of equity shares held by the shareholders.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2013	31.03.2012	31.03.2011
EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	20.000	20.000	20.000
(b) Reserves & Surplus	742.535	676.219	590.462
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	762.535	696.219	610.462
(3) Non-Current Liabilities
(a) long-term borrowings	0.000	0.000	0.000
(b) Deferred tax liabilities (Net)	38.366	30.297	23.846
(c) Other long term liabilities	5.290	4.221	2.825
(d) long-term provisions	9.030	9.126	11.498
Total Non-current Liabilities (3)	52.686	43.644	38.169
(4) Current Liabilities
(a) Short term borrowings	0.000	0.000	6.691
(b) Trade payables	138.493	171.249	129.680
(c) Other current liabilities	55.480	30.727	46.348
(d) Short-term provisions	35.391	59.547	85.891
Total Current Liabilities (4)	229.364	261.523	268.610
TOTAL	1044.585	1001.386	917.241
ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	467.401	377.324	335.695
(ii) Intangible Assets	8.909	8.816	4.375
(iii) Capital work-in-progress	26.426	50.136	18.094
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	35.399	35.399	0.000
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	20.091	20.818	22.122
(e) Other Non-current assets	0.000	0.000	0.000
Total Non-Current Assets	558.226	492.493	380.286
(2) Current assets
(a) Current investments	114.225	101.598	0.000
(b) Inventories	138.478	136.327	191.853
(c) Trade receivables	191.622	201.017	109.451
(d) Cash and cash equivalents	8.353	30.739	158.287
(e) Short-term loans and advances	27.077	33.256	57.506
(f) Other current assets	6.604	5.956	19.858
Total Current Assets	486.359	508.893	536.955
TOTAL	1044.585	1001.386	917.241

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Income	893.795	1005.105	916.870
		Other Income	18.215	22.709	15.712
		TOTAL (A)	912.010	1027.814	932.582
Less	EXPENSES
		Cost of materials consumed	295.058	311.095	245.960
		Purchases of stock-in-trade	19.660	17.991	45.141
		Changes in inventories of finished goods, work-in-progress and stock-in-trade	(2.825)	(14.762)	(7.528)
		Employee benefits expense	143.898	145.020	111.411
		Other expenses	263.099	278.583	246.110
		TOTAL (B)	718.890	737.927	641.094
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		193.120	289.887	291.488
Less	FINANCIAL EXPENSES (D)		0.076	1.107	0.696
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		193.044	288.780	290.792
Less/ Add	DEPRECIATION/ AMORTISATION (F)		40.292	33.542	35.710
	PROFIT BEFORE TAX (E-F) (G)		152.752	255.238	255.082
Less	TAX (H)		51.569	82.331	86.727
	PROFIT AFTER TAX (G-H) (I)		101.183	172.907	168.355
	EARNINGS IN FOREIGN CURRENCY
		F.O.B. Value of goods exported	171.899	194.643	144.602
		Others	3.414	6.423	14.439
	TOTAL EARNINGS		175.313	201.066	159.041
	IMPORTS
		Raw Materials	193.035	191.422	162.849
		Traded goods	11.928	11.693	7.955
		Stores and Spare parts	8.192	15.780	12.015
		Capital Goods	15.314	56.294	16.713
	TOTAL IMPORTS		228.469	275.189	199.532
	Earnings Per Share (Rs.)		50.59	86.45	84.18

QUARTERLY RESULTS

PARTICULARS	30.06.2013	30.09.2013	31.12.2013	31.03.2014
	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter
	UnAudited	UnAudited	UnAudited	UnAudited
Net Sales	220.800	253.000	218.000	260.000
Total Expenditure	178.100	203.100	183.200	231.600
PBIDT (Excl OI)	42.700	49.900	34.800	28.400
Other Income	4.300	7.600	5.100	37.200
Operating Profit	47.000	57.500	39.900	65.600
Interest	0.000	0.200	0.000	0.000
Exceptional Items	0.000	0.000	0.000	0.000
PBDT	47.000	57.300	39.900	65.600
Depreciation	11.000	11.000	11.600	12.200
Profit Before Tax	36.000	46.300	28.300	53.400
Tax	11.600	16.100	9.200	8.400
Provisions and contingencies	0.000	0.000	0.000	0.000
Profit After Tax	24.400	30.200	19.100	45.000
Extraordinary Items	0.000	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000	0.000
Other Adjustments	0.000	0.000	0.000	0.000
Net Profit	24.400	30.200	19.100	45.000

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	11.09	16.82	18.05
Net Profit Margin (PBT/Sales)	(%)	17.09	25.39	27.82
Return on Total Assets (PBT/Total Assets}	(%)	15.54	27.88	28.367
Return on Investment (ROI) (PBT/Networth)		0.20	0.37	0.42
Debt Equity Ratio (Total Debt/Networth)		0.00	0.00	0.01
Current Ratio (Current Asset/Current Liability)		2.12	1.95	2.00

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Share Capital	20.000	20.000	20.000
Reserves & Surplus	590.462	676.219	742.535
Net worth	610.462	696.219	762.535
long-term borrowings	0.000	0.000	0.000
Short term borrowings	6.691	0.000	0.000
Total borrowings	6.691	0.000	0.000
Debt/Equity ratio	0.011	0.000	0.000

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	916.870	1005.105	893.795
		9.624	(11.074)

NET PROFIT MARGIN

Net Profit Margin	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	916.870	1005.105	893.795
Profit	168.355	172.907	101.183
	18.36%	17.20%	11.32%

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	No
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	--
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	--
22]	Litigations that the firm / promoter involved in	--
23]	Banking Details	Yes
24]	Banking facility details	No
25]	Conduct of the banking account	--
26]	Buyer visit details	--
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

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 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 and 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 and rekindled the business confidence on recovery.

RESULTS OF OPERATIONS

Despite the industry slowdown and sluggish market condition, the Company has put in its best efforts to achieve a Top line of Rs.889.500 Millions 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 the 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.

Superabrasive Business consisting of Diamond/CBN Grinding Wheels and Tools, Precision Dressing Rolls, Hones, Segmented Products and 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 the Company on the development of new products and new applications. During the year, the Company successfully introduced some new products including Resin Bond Wheels for Steel and Cutting Tools, Hones for Auto Component, Vitrified CBN Wheels for Paper and Textile and Auto Component, Precision Electroplated CBN Wheels for Engineering, Brazed Diamond Products for Ceramic and Glass and Precision Dressing Rolls for Aerospace and Gear Manufacturing.

During the year, the technical collaboration with its parent company Wendt GmbH got discontinued. The Company, over the years has gained competency to have its own fully equipped Research and Development Center. You will be happy to know that the Company's R and D Center has obtained Department of Science and Industrial Research (DSIR) recognition, Government of India. This recognition and approval would not only help the Company to carry out research and 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, the Company has developed many new models/variants of machines and successfully executed some of the new machines like CNC TC 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, the Company has started work on development of 4 new models of Wendt –Delapena Honing Machines.

On the precision components front, during the year, the 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, the 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, the Company's position would get further strengthened in Precision Component Business while also being a new growth engine.

FUTURE PROSPECTS

With the business processes aligned with the Strategies and Objectives, the 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 the 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 opportunities 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 the 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 the Company expects the ownership matter to be resolved soon.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

GENERAL PERFORMANCE REVIEW

In the last two years the Indian economy has been adversely affected by a string of domestic and global upheavals which have negatively impacted the growth. As a result, the Indian economy could achieve growth rate of around 5%, the lowest growth rate since 2002 against earlier projection of over 6%. On the external front, while the slow recovery of global economy and weak environment has been a cause of major concern, in the domestic front continued spiraling commodity prices, high inflation, rise in raw material prices, declining exports, deepening industrial performance, acute power shortage, high interest rates, political instability and policy delays are some of the most noticeable factors responsible for this low growth rate. The subdued industrial performance is discernable despite the slew of measures and reforms introduced by the Government in order to arrest the downward spiral. This was most visible in segments like Automobile, Auto Component, Engineering, Ceramics, Cutting Tools and some of the other allied industries.

As mentioned earlier, during the year, while the domestic business of the Company achieved a performance level of 89% compared to previous year, the export could finally achieve 88% performance level of previous year. In the domestic business, while the sales of Superabrasive Products to some industry segments like Automotive, Cutting Tools, Machine Tools, Ceramics was lower between 10-15% as compared the previous year, the drop was more pronounced by more than 20% in segments like Steel and Refractory. Despite the depressing situation and looking at long term benefits, the Company continued to put efforts and initiatives towards development of new products and applications, besides working closely with customers in the developmental process of import substitutions.

In the Non-Superabrasive business, the performance level was 83% of last year on account of lesser inflow of machine orders and lower demand of precision components and accessories. Capacity expansion plans and fresh investments on machines have been shelved or postponed by the customers in view of the continued depressed market situation resulting in lesser orders from industry segments like Steel, Engineering, Ceramics, Refractory and Cutting Tools.

The Company continues to maintain its leadership position in the domestic market on account of its focus on increased service levels and direct marketing efforts well-supported with efforts on new product developments and enhanced customer engagement levels.

In order to ensure sustained growth in both domestic and export market, the Company continually endeavors to enlarge the customer base and provide distinctive prompt services. As mentioned earlier, in the coming year the Company would be implementing CRM (Customer Relationship Management) application working with SAP As its implementation partner. This would not only strengthen the Company's existing sales and service network but also would improve market presence and customer reach, providing competitive edge over the competition.

ECONOMIC OUTLOOK

In the backdrop of Global and Indian Economy still remaining weak and shaky despite the efforts of the Government for fiscal consolidation and recent announcement of policy reforms to arrest further deceleration, it is estimated that the Indian GDP would achieve a growth of around 6% in the coming year. Government's focus on sustainable development of agriculture, infrastructure, manufacturing and capital market will bolster the business confidence and reverse the declining trend. This clearly indicates that more focus is towards driving higher domestic consumption and investments.

Some of the major Industry Segments that are expected to benefit from the above measures are Automotive, General Engineering, Steel, Infrastructure, Housing and Construction, Power, Mining and Consumer Durables during 2013-14. Sizeable new investments, capacity creations including execution of large infrastructure projects in Steel, Power, Mining, Engineering and Allied Industries are expected to take advantage of the opportunities in the coming fiscal year.

BUSINESS OUTLOOK

The Indian Economy is expected to go through another year of muted growth in 2013-14 in view of the rising raw material prices, rising fuel and power cost, inflationary trend, low industrial output, slowing investments in key sectors, high interest rates as well as volatility in some of the developed countries. In this tough business scenario, the Company's efforts will be primarily to retain its leadership position by offering its comprehensive range of products, increased market reach and penetration and adding new products to its basket. In addition to this, the Company would continue to intensify its efforts in improving its market presence not only in domestic but also in global arena to address competition.

In the Superabrasive Business, the Company will continue to drive the two key growth engines, Innovation and

New Product Development. In conjunction with accelerating growth in coming years, the focus would be to grab every opportunity that unfolds in the performing industry segments.

The Non-Superabrasives business has been gaining strength year on year with its new machine launches. Its new machine models have been accepted well by the market. The increased machine population in the various industry segments has become a good reference base for machine reliability and productivity and helps us in getting the required traction for adding new customers in respective segment. With the completion of the new state of the art facility for machine tools, the Company has planned new launches and developments for the coming year for steel, engineering, automotive and defense industries. The Company is looking forward for strategic alliances towards strengthening the design capabilities and building machine automation competencies and add-ons as a value proposition to its customers.

The Precision Component Business is being strengthened and enhanced by adding new components and new customers. The initial test and approvals have been encouraging and their expect to benefit from this as additional business in coming years. The Company will accordingly commit the required investments in terms of machinery and equipment to establish growth in this area.

The initiative Wendt on Wheel (The WOW) taken last year has ensured increased visibility and as a consequence enhanced the Company's market awareness in especially the Tier II and III industrial hubs. With it's positive response in Karnataka, Maharashtra, Gujarat and Northern States, the Company would resume this initiative in the remaining States and is confident of being benefitted with identification of new customers, new opportunities and resultant growth avenues for both Superabrasive and Non Superabrasive Businesses.

The Company, during the year, while continuing its' focus on International Business through the Wendt/Winterthur network would also extend it's focus to other global locations with it's and CUMI's own direct marketing channels.

It has identified certain new geographies for export which until now were not addressed directly by the Company. The Company will now independently pursue business in these countries or through CUMI (Carborundum Universal) PAPs (Product Availability Points) depending on the cost effectiveness and ease of doing business.

Following the expiry and non-renewal of the technical collaboration with Wendt GmbH, continuance of using Wendt brand by the Company in the International market is likely to pose some confusion. Accordingly, the Company is planning to promote the use of CUMI brand and / or any other alternate brand for its products in those markets.

The Company’s 100% owned Subsidiary, Wendt Grinding Technologies Limited, Thailand, continues to show creditable performance year on year albeit Thailand being affected by slowdown and political disturbances. It demonstrates enough confidence for even better performance in the coming year. Certainly, this has been possible due to continuous efforts in exploring newer opportunities, scanning new industry segments, enhancing product basket as well as delivering superior value propositions to the customers in Thailand and adjoining countries.

You will be pleased to know that the second 100% owned Subsidiary, Wendt Middle East FZE, Sharjah has been turned around after three years of its inception and started showing profits despite continued socio-economical issues and depressed market sentiments in the region. Renewed focus and change in strategy from services to more of trading has yielded the desired positive results. The Subsidiary now operates as a Product Availability Point (PAP) for the entire GCC region by spreading its focus on Oil and Gas, General Engineering, Aerospace, Steel and other allied industries. In the coming year, the Subsidiary is expected to show an even better performance.

AUDITED FINANCIAL RESULTS FOR THE QUARTER AND HALF YEAR ENDED 31^ST MARCH 2014

(Rs. In Millions)

Sr. No.	Particulars	Standalone
		Three Months Ended		Year Ended
		31.03.2014	31.12.2013	31.03.2014
		(Unaudited)
	PART-I STATEMENT OF FINANCIAL RESULTS
1	Income from Operations
	(a) Net Sales/Income from Operations (Net of Excise duty)	257.600	216.500	944.900
	(b) Other Operating Income	2.400	2.200	11.600
	Total Income from Operations (net)	260.000	218.700	956.500
2	Expenses
	Cost of materials consumed	86.900	75.300	324.300
	Purchase of stock-in-trade	4.000	4.200	15.200
	Changes in inventories of finished goods, Work-in-Progress and Stock-in-trade	4.500	(2.100)	5.700
	Employee Benefits Expense	51.900	43.100	176.800
	Depreciation & Amortisation Expense	12.200	11.600	45.800
	Other Expenditure	84.300	62.700	274.000
	Total Expenses:	243.800	194.800	841.800
3	Profit/(Loss) from Operations before Other Income, finance cost and Exceptional Items (1-2)	16.200	23.900	114.700
4	Other Income	37.200	4.400	49.500
5	Profit/(loss) from ordinary activities before finance cost and Exceptional Items (3+4)	53.400	28.300	164.200
6	Finance Costs	-	-	0.200
7	Profit/(Loss) from ordinary activities after finance cost but before Exceptional Items (5-6)	53.400	28.300	164.000
8	Exceptional Items	-	-	-
9	Profit/(Loss) from Ordinary Activities before Tax (7-8)	53.400	28.300	164.000
10	Tax Expense	8.400	9.200	45.300
11	Net Profit /(Loss) from Ordinary Activities after Tax (9-10)	45.000	19.100	118.700
12	Extraordinary Items (net of tax expense Rs. In millions)	-	-	-
13	Net Profit(+)/Loss(-) for the period (11-12)	45.000	19.100	118.700
14	Paid Up Equity Share Capital (Face Value of Rs. 2/- each)	20.000	20.000	20.000
15	Reserve excluding Revaluation Reserves as per Balance sheet of previous accounting year
16.i	Earnings Per Share (EPS) (before extraordinary items) (of Rs. 2/- each) (not annualised)
	(a) Basic	22.49	9.54	59.34
	(b) Diluted	22.49	9.54	59.34
A	PARTICULARS OF SHAREHOLDING
1	Public Shareholding
	No. of Shares	405296	405296	405296
	Percentage (%) of Shareholding	20%	20%	20%
2	Promoters and Promoter Group Shareholding
	a)Pledge/Encumbered
	No. of Shares	--	--	--
	Percentage of Shares (as a % of the total Shareholding of promoter and promoter group)	--	--	--
	Percentage of shares (as a % of the total Share Capital of the Company)	--	--	--
	b)Non-encumbered
	No. of Shares	1594704	1594704	1594704
	Percentage of Shares (as a % of the total Shareholding of promoter and promoter group)	100%	100%	100%
	Percentage of shares (as a % of the total Share Capital of the Company)	80%	80%	80%

Particulars	3 months ended 31.03.2014
INVESTOR COMPLAINTS
Pending at the beginning of the quarter	0
Received during the quarter	11
Disposed of during the quarter	11
Remaining unresolved at the end of the quarter	0

SEGMENT WISE REVENUE, RESULTS AND CAPITAL EMPLOYED

(Rs. In millions)

Sr. No.	Particulars	Standalone
		Three Months Ended		Year Ended
		31.03.2014	31.12.2013	31.03.2014
		(Unaudited)
A	Segment Revenue
	a) Super Abrasive	207.200	173.500	716.800
	b) Machines, Accessories and Components	50.400	43.000	228.100
	c) Others
	TOTAL:	257.600	216.500	944.900
	Less: Inter Segment Revenue	-	-	-
	Net Sales / Income from Operations	257.600	216.500	944.900
B	Segment Results Profit (+) / Loss (-) before tax & Finance cost
	a) Super Abrasive	20.900	29.000	111.900
	b) Machines, Accessories and Components	6.700	81.00	46.900
	c) Others
	TOTAL:	27.600	37.100	158.800
	Less: (I) interest	-	-	0.200
	(ii) Other Un-allocable Expenditure net of Un-ailocable income	(25.800)	8.800	(5.400)
	(iii) Income Tax	8.400	9.200	45.300
	Total Profit After Tax	45.000	19.100	118.700

1. The "Other Income" shown under the Standalone financial results for the quarter ended March 31, 2014 includes dividend received from a subsidiary aggregating Rs. 24.400 Millions and reversal of provision for diminution in value of investment in a subsidiary aggregating Rs. 7.700 Millions.

Notes on Segment information

1) The company is organised into three business segments, namely :

a) Super Abrasives b) Machines, Accessories and Components 8 c) Others. The" Others" Segment Includes other trading products.

2) Segment Assets and Segment Liabilities of the Company's business have not been identified to any reportable segment, as these are used interchangeably between segments and hence segment disclosure relating to capital employed has not been given.

I) Statement of assets and liabilities as per Clause 41 (i) (ea) of the listing agreement

(Rs. In Millions)

SOURCES OF FUNDS	31.03.2014
EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	20.000
(b) Reserves & Surplus	803.100
Sub-total-Shareholders' funds	823.100
(2) Non-Current Liabilities
(a) Deferred tax liabilities (Net)	48.700
(b) Other long term liabilities	4.100
(c) long-term provisions	18.300
Sub-total-Non-current liabilities	71.100
(3) Current Liabilities
(a) Short term borrowings	0.000
(b) Trade payables	159.600
(c) Other current liabilities	47.600
(d) Short-term provisions	37.100
Sub-total-Current liabilities	244.300
TOTAL -EQUITY AND LIABILITIES	1138.500
ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	511.300
(ii) Intangible Assets	12.400
(iii) Capital Work in Progress	27.300
(b) Non-current Investments	43.100
(c) Long-term Loan and Advances	21.000
Sub-total-Non-Current assets	615.100
(2) Current assets
(a) Current investments	127.200
(b) Inventories	155.400
(c) Trade receivables	202.100
(d) Cash and cash equivalents	6.000
(e) Short-term loans and advances	30.800
(f) Other current assets	1.900
Sub-total-Current asset	523.400
TOTAL ASSETS	1138.500

2. 1. The above consolidated results include the results of two wholly owned subsidiaries, viz:-

a. Wendt Grinding Technologies Limited, Thailand and 

b. Wendt Middle East, FZE, Sharjah

3. The figures for the corresponding periods have been restated/ regrouped, wherever necessary to make the comparable. The figures of last quarter are the balancing figures between audited figures in respect of the full financial year and the published year to date figures upto the third quarter of the current financial year.

4. The Directors have recommended a final dividend of Rs. 15/- per share (150% on face value of equity share of Rs. 10/- each). The total dividend for the year 2013-14 is Rs. 25/- per share (250% on face value of equity share of Rs. 10/- each) including the interim dividend of Rs. 10/- per share (100% on face value of equity share of Rs. 10/- each) declared at the Board Meeting held on January 22, 2014 and paid subsequently. The payment of final dividend is subject to the approval of the shareholders in the ensuing Annual General meeting of the Company to be held on July 24, 2014.

5. The Consolidate financial statements are prepared in accordance with Accounting Standard 21 "Consolidated Financial Statements".

6. The audited financial results, after being reviewed by the Audit Committee, were taken on record by the Board of Directors at their meeting held on April 19, 2014.

FIXED ASSETS

Tangible Assets

· Land

· Buildings

· Plant and Equipment

· Furniture and Fixtures

· Vehicles

· Office Equipment

Intangible Assets

· Computer Software

· Technical Know How

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.59.79
UK Pound	1	Rs.102.66
Euro	1	Rs.81.32

INFORMATION DETAILS

Information Gathered by :	HNA
Analysis Done by :	KAR
Report Prepared by :	VRN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	8
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		68

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.