Wendt India Ltd

(Including Management Discussion and Analysis)

TO THE MEMBERS OF WENDT (INDIA) LIMITED

Your Directors have the pleasure in presenting the 42 Annual Report of Wendt (India) Limited (hereinafter referred to as 'the Company') together with the Audited Financial Statements for the year ended 31 March 2024. The Management Discussion & Analysis Report which is required to be furnished as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as 'the Listing Regulations') has been included in this Report to avoid duplication and overlap.

ECONOMIC OVERVIEW

The world continued witnessing unprecedented challenges in FY 2023-24 in terms of Russia-Ukraine conflict, conflict in middle east, geopolitical uncertainties, China-America cold war, rising fuel and commodity prices which had a toll on the global economic situation.

As per the latest World Economic Outlook released by the International Monetary Fund (IMF), the global economic growth is expected to be slightly better in 2024 at 3.1% i.e. 0.2% higher than the previous release. While the IMF Report estimates softer landing in the advanced economies, lagged impacts of the quantitative tightening and inflation remaining above targets in most of the economies will continue to create headwinds for growth. As per World Bank Report, global Trade growth in 2023 was amongst the slowest in the past 50 years, with contraction in merchandise trade and slow recovery in services trade. Global commodity prices weakened in 2023 but remained above pre-pandemic levels.

India remained resilient throughout 2023 despite the challenging global environment. India continues as the fastest growing economy amongst major economies with a fundamentally sound growth story. India has solidified its position as the world's third-largest fintech economy, following only the USA and the UK. This success is credited to both domestic and international investor interest, along with sustained IPO activity. As per first advance estimate of national income, Gross Domestic Product (GDP) growth is projected at 7.3% in financial year FY24 on YoY basis, with 7% growth expected in second half. This strong growth of GDP was mainly propelled by large government expenditure on demand side. There was approximately 31% YoY increase in Central Government capital expenditure (capex) and 43% increase in State Government capex during April-November 2023.

On the supply side, mining, manufacturing, construction and certain services emerged stronger. Mining sector benefitted from policy reforms, increased domestic and global demand and rising prices which led to robust production of several minerals including coal, natural gas and iron ore. The strong growth in manufacturing was driven mainly by easing of global commodity prices across energy, metal and food categories, which boosted profitability of manufacturing firms. Construction sector gained from higher government capex and an increase in Economic outlook demand for office spaces and housing, especially in urban areas. Additionally, financial, real estate and professional services are expected to witness robust growth, likely due to buoyant bank credit growth, strong demand for real estate especially in urban areas and growth in professional services, especially global capability centers in India. However, growth in private consumption is continuing to show weakness with the first advanced estimate pegging it at 4.3%. This has been due to rural stress from uneven rains, inflation and income stress in low to middle income households. High frequency indicators also suggest that consumption demand is not yet broad based and largely driven by urban consumption and high-income households. In addition, private investment also did not pick up strongly during the year and exports remained muted due to global economic slowdown and geopolitical volatility.

Global economic growth is expected to slow down in 2024, mainly due to lagged impact of monetary tightening, fiscal consolidation, reduced savings buffers and waning pentup demand for services. However, the latest World Economic Outlook released by IMF states that the economy may perform better than was earlier estimated. Global growth is likely to pick up in 2025 based on declining inflation and more supportive monetary policy in the long run. Global crude oil prices are expected to ease in 2024 based on subdued global growth and improvement in oil supply from non-OPEC+ countries subject to geopolitical risks not escalating. Global trade can gain some strength in 2024 compared to 2023 based on slow recovery of demand for goods especially in advanced economies in the second half of FY 2023-24. For India, the economic growth in FY 2024-25 will continue to be driven by government capex and revenue expenditure in the first half. Private investment can pick up in second half of FY 2024-25 if the agricultural output is stronger with fading El Nino, thus leading to broad based consumption revival. The bond markets will get support and cost of borrowing is likely to go down with fiscal deficit target set at 5.1% and gross borrowings in FY 2024-25 estimated lower than FY 2023-24 will help bond markets with cost of borrowing going down. The private sector can then commence its investment cycle with their deleveraged balance sheets and the support of banks with historically low non-performing assets.

Though India is better placed than its global peers, the path to sustained recovery, however, will be distorted, given three major challenges India is likely to face. First, inflation is likely to remain high in the coming year even though it has already peaked. This also depends on the rainfall during the coming monsoon and the resultant surplus income with the rural folks to spend on capital goods; Second, aggressive tightening of monetary policies across the central banks of the advanced economies has led to global slowdown in 2023, impacting domestic investment and consumer demand as the propensity to save increases. Tighter liquidity conditions may further result in capital outflows. Third, the labour market reforms are yet to happen, and the rising unemployment rate is a matter of concern. These factors could derail the strong recovery in consumer demand and service sector both of which are critical to GDP growth. In short, FY 2024-25 will be a challenging year as the General elections are due and the formation of a new government which is expected to continue the reform momentum in the future.

DEVELOPMENTS

The demand for Super Abrasive products is closely linked to the level of industrial production. Super Abrasives are used to manufacture long-lasting, expensive items like auto and aircraft parts, demand for which is highly cyclical. Diamond and Cubic Boron Nitride (CBN) Super Abrasive products are used extensively in aerospace industry and other industrial applications where price considerations are less significant as they incur high initial costs. They are used in the machining of materials such as nickel, cast iron and cobalt-based super alloys, where precision in machining operations is of prime importance.

Increasing complexity of Super Abrasive technology in high performance applications and its high initial cost provide entry barriers for small-scale and medium-scale companies to compete with the global market leaders.

While industry leaders can afford significant research operations, most unorganised players do not have access to substantial R&D resources. This disparity can make it difficult for small and medium-scale companies to compete in the market, in terms of developing products that may require advanced technologies. However, the global companies are setting up manufacturing base in India.

The Company being a total Grinding Solution provider, innovation is at the core of the Company's products and processes. As such majority of our products are customised to fulfil the customer's requirements.

The Company is a preferred supplier for many of the automobile, auto component, engineering, aerospace, defense, ceramics customers for their Super Abrasive Tooling solutions, Grinding & Honing Machines and Precision components. A major contribution to the Company's revenues comes from these industries.

COMPANY PERFORMANCE OVERVIEW (STANDALONE)

During the year the Company recorded its highest ever sales of Rs.20626 lakhs, higher by 8% per cent over the previous year.

Super Abrasive Business

The Super Abrasive Business comprising Diamond/CBN Grinding Wheels in various Bonding Systems, Rotary Dressers, Stationary Dressers, Hones and Segmented products is the biggest business vertical of the Company. The Company continues to take several initiatives including product development, new customer acquisition, price correction, horizontal deployment of successful applications and products, new markets, leveraging all its products as a complete package solution to serve customers better, etc., to grow the Super Abrasive Business.

The Super Abrasive Business achieved sales of Rs.13161 lakhs, which is lower by 2% over the previous year.

The Domestic Super Abrasive Business sales grew by 7% over last year. This is the highest ever sales for Domestic Super Abrasive Business. The higher sales was from industries like auto, auto ancillaries, steel, bearings, engineering, cutting tools etc. The sales growth was recorded in select products. Some of the initiatives for higher sales are close working on product development, key account management for top customers, appointment of precision dealers, horizontal deployment of successful applications, application teams support to the sales team and new product launches etc.

The Export Super Abrasives sales during the year was lower by 19% over the previous financial year. The lower exports were due to reduced off take from key customers from few countries. The volatile geopolitical scenario with continued Russia-Ukraine and Israel-Palestine conflict led to economic instability and changes in global trade route leading to lower off take from Europe and other developed countries. The China plus one strategy adopted by major economies with localisation led to reduced demand and continued economic depression. The Company is focusing on for identifying, targeting and onboarding new distributors, including industry specific distributors like glass, aerospace, steel in targeted countries, horizontal deployment of successful applications and products, dedicated customer meetings/calls, enhanced use of digital media, e-commerce, technical webinars, social media posts, marketing campaigns and participation in international exhibitions in focus countries etc.

Machines Business

Machine tool sales comprises of sales of machines both domestic and export, spares and service and refurbishing of old machines. In the Machines Business, sales was Rs. 4732 lakhs, a growth of 70% over the previous year. The Machines Business recorded its highest ever sales despite continued supply chain issues owing to global shortage of semi-conductor chips and other related parts which go into the manufacturing of machines. The timely execution and delivery of machines to various customers was ensured by better planning, bulk ordering of some of the critical parts for the year, working closely with critical vendors and developing alternate vendors. The initiatives like advance schedule release helped to execute delivery on time. Further, other initiatives like design for parts standardisation, dynamic contract reviews and micro level planning, senior management interaction and visits to major suppliers, application demonstration and improving operational efficiency through Total Employee Involvement (TEI), relay-out of shop to increase the number of assembly bays, cost optimisation etc., also helped in meeting the plan.

During the year, the Company manufactured 45 machines. The industry-wise Machine sales during last year comprises majority to steel followed by cutting tools, engineering and auto. The Company executed several new machines during the current year which was well accepted by the customers. The Company's strategy of moving from industry specific to application-based machines has yielded good results during the year. These machines have been well received by the customers, projecting a good performance. Machine sales in the export market achieved good growth and acceptance by the customers.

Precision Products

The Precision Products business clocked sales of Rs. 2733 lakhs, lower by 5% over the previous year. The precision components sales was impacted during the previous year due to schedule deferment and lower volume off take by end customers. Besides, delays in establishing new products also added to the lower sales.

The Company continues to focus on developing new products for its components business as a part of its de-risking strategy and looking at alternate opportunities wherever possible.

Digital Marketing

The Company has uploaded its new products and

applications on social media platforms like LinkedIn,

YouTube etc., to create awareness amongst its customers. The Company had launched its new website during the FY 2021-22 with modified and improved content for better interaction and engagement with the customers. The website's look and feel has been enhanced with graphics and user interface. The customers can choose the Company's products and successful applications and place their order online. These initiatives are focused on Digital Marketing and ease of doing business in terms of servicing customers better.

Information Technology

On the Information Technology side, the Company had achieved some success in the Digitisation initiative of its core processes during the previous year for ease of doing business and eliminate duplication and non-value additions. Phase 1 and 2 of Vendor portal has been implemented and around 40% of vendors have been on boarded. This portal will improve communication between the vendor and the purchase team of the Company by providing visibility to the vendors on Request for quote raised, purchase order acceptance, tracking of materials and order status. The Company implemented CRM Application-standard module to achieve better engagement with the key customers and key account and capture significant data related to customers, industry and the market. Besides, digitisation of Hire to retire function through ESS Portal is underway which is expected to ease the human resource function.

Exhibitions and Seminars

During the year, the Company participated in several exhibitions to showcase its products and to build rapport with customers. Some of the exhibitions where the Company participated in and displayed its products are IMTOS Delhi, Texibition 2023, Indomach Hyderabad, Engimach Exhibition Gandhinagar, Steel Expo Raipur etc. Besides, the Company also conducted several Technology Days and technical seminars at various customer places to educate the customer on our products and applications and to minimise their issues. Besides, the Company completed building Dashboard for trial and application establishment, preparation of Data Bank of all products, applications, customers based on their potential and market size and case studies of successful applications.

The Company leverages its core strength like complete product range- Super Abrasives, Machine Tools and Precision Components with access to German technology, renowned global brand 'Wendt', global connect, domain knowledge and continued patronage from customers to grow its business and serve its customers better. It continues its focus on exploring new business opportunities in Aerospace, Compressor

& Hydraulic parts, Special Inserts, Carbide industry, deploying its core competencies - Expertise, Experience and Knowledge on Grinding, Machines & Super Abrasive Tools for producing related precision components.

Manufacturing

The Super Abrasives manufacturing had been regrouped as Bonded and Coated. There was successful development of new products in Vitrified cell and Quantapole Hybrid wheels which resulted in higher revenue. The successful running of QRM aligned manufacturing layout for some cells resulted in higher production. To ensure optimum usage of resources and attain cost leadership, three shifts operations were started in majority of Super Abrasives manufacturing cells. Successful pilot implementation of Dynamic Buffer Management (DBM) in Resin Bond ensured that there was no loss of production due to timely raw materials planning based on the lead time. Diamond hand setting automation is one of the areas of successful implementation.

Focus on Process Efficiency

The Company continues to focus on improving operational efficiency as well as optimal utilisation of various resources-man, material and machines in manufacturing and production areas. The Company has implemented various initiatives to improve efficiency of its processes and products. Some of the key ones are

l The QRM (Quick Response Management) Initiative Paired cell Overlapping Loops of Cards with

Authorisation (POLCA) which was started as a pilot in the earlier years has been deployed successfully in three of the production cells. This envisages reorganising the machine layout in the shopfloor thereby reducing lead-time/waiting time between workstations and improvement in shopfloor inventory and other resources. This initiative is beneficial in addressing some of the key areas like planning and scheduling, production reliability, materials availability, and product delivery. This needs to be extended not only in manufacturing process but also in support functions.

l Reliability on Product Delivery (ROPD) improvement in product delivery for all major cells

through POLCA.

l Loss reduction in major cells through Cross Functional Teams (CFT) to reduce in process

rejections.

l Method Engineering- CFT to work on Methods improvement through productivity enhancement

projects, automating repetitive and manual tasks, value engineering, process simplification and eliminating redundancies or NVAs, flexible manufacturing and capacity utilisation ensuring all resources are utilised to the optimum. The Company had adopted cost leadership strategy to achieve a competitive advantage by producing goods at lowest possible cost. This envisages identifying the cost drivers, re-engineering the existing processes to remove redundancies and NVAs, streamlining outsourcing activities, creating economies of scale and focus on the core competencies. With this objective, the engineering team has undertaken some projects in both bonded and coated cells to eliminate, combine, rearrange and simplify processes and achieve cost reduction. The preliminary results are encouraging and it will be extrapolated for higher value in future.

Supply Chain efficiency is one of the Company's key focus areas. The Company continues its focus in reducing product lead time and improving operational efficiency by reducing Work in Progress (WIP).

On the raw materials front, the Company continuously develops alternative, reliable and competitive sources/suppliers for critical raw materials including Diamond/CBN, machine castings, systems, electrical, chemicals etc. However, to mitigate supply chain disruption, the Company has tied up with critical suppliers with annual orders delivery schedules.

FUTURE PROSPECTS AND OUTLOOK

India's GDP is expected to grow to USD 7.5 trillion in 2030 from present USD 3.5 trillion in 2023. This implies India adds another India in 7 years and become the Manufacturing Hub for the World. This is a big positive for India as none other economy in the world has such high growth rate. India has the following advantages to capitalise on this unique opportunity: the potential for significant domestic demand, the Indian Government's drive to encourage manufacturing, and with a distinct demographic edge, including considerable proportion of young workforce. The Government's push to sectors like roads, railways and metro rail, urban transport, ports, inland waterways and airports, renewable energy (based on India's commitment to Net Zero by 2070), Green infrastructure in terms of green hydrogen, EV and thrust to defence production and exports is expected to boost domestic manufacturing.

The Company's products are used extensively for Auto, Auto Ancillaries, Engineering, Cutting Tools, Steel, Ceramics, Refractories, Defence, Aerospace, Construction and other industry segments. As such the Company closely monitors the developments in these sectors and accordingly devises its business strategy.

In the Auto Ancillary segment, rising middle class income and huge youth population in India is expected to be key demand driver. The Indian passenger car (PV) market was valued at USD 32.70 billion in 2021, and it is expected to reach a value of USD 54.84 billion by 2027 while registering a CAGR of over 9% between 2022-27. Indian automotive industry is targeting to increase the export of vehicles by five times during 2016-26.

The global EV market was estimated at approximately USD 250 billion in 2021 and it is projected to grow by 5 times to USD 1318 billion by 2028.

India could be a leader in shared mobility by 2030, providing opportunities for electric and autonomous vehicles. With the continued emphasis on green planet and reducing carbon emission, focus is shifting to Electric Vehicles (EV). The EV industry is expected to create 5 crores jobs by 2030 {Indian Brand Equity Foundation (IBEF)}. India enjoys a strong position in the global heavy vehicles market as it is the largest tractor producer, second-largest bus manufacturer, and third-largest heavy truck manufacturer in the world. Further, initiatives like the PLI schemes for automobile and auto components, Automotive Mission Plan 2026, vehicle scrap page policy, flexi fuels etc., is expected to provide growth opportunities to the automobile sector.

The EV market is estimated to reach Rs.50,000 crore (USD 7.09 billion) in India by 2025. A study by CEEW Centre for Energy Finance recognised a USD 206 billion opportunity for electric vehicles in India by 2030. This will necessitate a USD 180 billion investment in vehicle manufacturing and charging infrastructure.

With regards to the Steel industry, India's finished steel consumption is anticipated to increase to 230 Million Tonnes (MT) by FY 2030-31 from 119 MT in FY 2022-23. India is the world's second-largest producer of crude steel, with an output of 125.32 MT of crude steel and finished steel production of 121.29 MT in FY 2022-23. India's steel production is estimated to grow 4-7% to 123-127 MT in FY 2023-24 and exceed to 300 million tonnes by 2030-31. The growth in the Indian steel sector is driven by the domestic availability of raw materials such as iron ore and cost-effective labour. Consequently, the steel sector has been a major contributor to India's manufacturing output due to the

Government's continued thrust on infrastructure development including building railways, roadways and highways etc., and the demand for Indian steel is expected to increase further.

Indian Abrasives market is valued at USD 363.26 million in 2021 and is expected to project a robust growth with a CAGR of 6.61% to reach USD 541 million by FY 2026-27. Initiatives like 'Smart Cities Mission' and 'Housing for All' along with rising demand for electronics and automobiles are driving the growth of Indian Abrasives market.

The global Super Abrasives market is estimated to grow at a CAGR of 6.78% to USD 14.45 billion (Rs. 11.82 trillion) during 2021-2030. The dominating region is the Asia Pacific with major countries being China, India, Japan, South Korea and other regions being North America-US, Canada, Europe -Germany, UK, France, Italy etc. The largest segment of Super Abrasives market is the diamond segment accounting to 67% out of which the largest market is the electroplated diamond. By the end user industry, the electronic segment has the highest demand of Super Abrasives occupying 49% market share followed by automotive and oil and gas, which accounted for 14% and 10% market share respectively. Major factors responsible for the growth of global Super Abrasives market include growing awareness for adoption of high-end technologies and their benefits coupled with the continuing growth of the automotive industry. Besides, the product is widely popular due to its long life cycle, high scale hardness and superlative performance, which is anticipated to spur the global Super Abrasives market growth.

The expected growth of the above sectors provides good opportunities for the Company's products - Super Abrasives, Machines, and Precision Components in future.

The Company's growth lies in constantly monitoring changes in the external environment and adapting to the emerging customer needs. Accordingly, mega trends and underlying new opportunities that unfold are being tracked continuously.

The growing usage of Super Abrasive products for various medical applications such as Surgical Instruments, Hypodermic Needles, Dental implants, Knee, Hip and Shoulder joints create new opportunities for the Company to explore through technical collaboration and new products development. Also, growing Consumer Electronic Segment with manufacturing facilities in India is expected to provide a wide array of opportunities for consumption of Super Abrasives in the coming years. The focus on semi-conductor industry which will make India a major hub for manufacturing semiconductors is expected to be a major growth engine. The success of addressing these sectors lies in the technology which the Company is exploring through necessary tie-ups and collaboration.

Wendt Grinding Technologies Limited, Thailand

The Company's wholly owned subsidiary, Wendt Grinding Technologies Limited, Thailand, (the Subsidiary) achieved sales of Thai Baht 913 lakhs (Rs. 2146 lakhs) which is 5% higher than last year. This is despite unprecedented challenges and industry slowdown on account of EV impetus, geopolitical uncertainties due to anti-China thrust and China - Taiwan relations, rising costs and all odds. The Subsidiary continues to demonstrate its strong resolve and business acumen challenging the unfavorable conditions and churning out results on a consistent basis.

The Profit Before Tax was Thai Baht 87 lakhs (Rs. 205 lakhs), 25% lower than previous year and the Profit After Tax has been Thai Baht 70 lakhs (Rs. 164 lakhs), 24% lower over previous year.

During this challenging year, the Subsidiary resorted to strict cost and receivables control, clear business focus in terms of increasing product and customer basket and strengthening the export business. These initiatives have helped in de-risking the business by compensating for the decline in existing products. Focus on providing value added services, enhancing product basket, new customer additions and entering new geographies have yielded desirable results.

The Subsidiary will continue to focus on core business & value-added service and increased customer/product base along with measures to ensure OPEX, safety and cash flow to achieve sustainable & profitable growth.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company for the financial year 2023-24 are prepared in compliance with the applicable provisions of the Companies Act, 2013, Accounting Standards as prescribed by Regulation 33 of the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Consolidated Financial Statements have been prepared based on the audited financial statements of the Company and its subsidiary, as approved by their respective Board of Directors.

Pursuant to provisions of Section 136 of the Act, the Financial Statements of the Company, the Consolidated Financial Statements along with the relevant documents and the Auditors' Report thereon form part of this Annual Report. A statement of summarised financials of all subsidiaries of the Company in form AOC-1 forms part of the Annual Report. The audited annual accounts and related information of the subsidiaries is available on our website www.wendtindia.com.

KEY CONSOLIDATED FINANCIAL SUMMARY

Considering the past dividend pay-out ratio and the current year's operating profit, the Board has recommended a final dividend of Rs.20/- per equity share of Rs.10/- each for the year ending 31 March 2024. Besides, in January 2024, an interim dividend at the rate of Rs. 30/- per equity share of Rs.10/- each was declared and paid in February 2024. This aggregates to a total dividend of Rs.50/- per equity share of Rs.10/- each.

The Company has adopted the Dividend Distribution Policy as approved by the Board in line with the Listing Regulations and the same is available on the Company's website h t t p s : / / w e n d t i n d i a . c o m / w p -content/themes/wendtindia/pdf/dividend-distribution-policy.pdf

The objective of this policy is to establish the parameters to be considered by the Board of Directors of your Company before declaring or recommending dividend.

The interim dividend paid in February 2024 and the proposed final dividend for the year ended 31 March 2024 are in line with this policy.

TRANSFER TO RESERVES

The Company transferred Rs.395 lakhs to the General Reserve. An amount of Rs.11729 lakhs is retained in the Statement of Profit & Loss.

APPROPRIATIONS

(CSR)

The Company believes that social responsibility is not just a corporate obligation that has to be carried out, but an opportunity to make a difference. All our CSR programs are aimed at inclusive growth and sustainable development of the community.

The Company's Corporate Social Responsibility pursuits have always been based on the foundation of ethical behavior in all its business transactions and contributions for economic development extending to the local communities and the society at large. The Company, being a part of the Murugappa Group, has been upholding this tradition by allocating a part of its profits for fulfilling its social responsibilities. The Group's philosophy is to serve the communities in which it operates through the services of service-oriented philanthropic institutions with education and healthcare being the core focus areas.

The Company's Skill Development Program was set up in 2012 in collaboration with Carborundum Universal Limited. The major focus was to provide high quality vocational and technical training to less privileged youth from weaker sections of society by uplifting their lives and equipping them with employable skill sets. This training program is designed based on the coaching methodology defined by Government of India, Ministry of Skill Development and Entrepreneurship. This builds up a skill bank of technically competent and industry ready work force benefitting the less privileged sections of society.

The three-year training program is based on the National Council of Vocational Training syllabus. This training is imparted with stipend to the enrolled students and free boarding facilities ensuring that they earn while they learn. Not only does this initiative help in imparting formal education, but also helps them in honing them to become a valuable citizen while helping them in seeking gainful employment upon successful completion of the course.

During the year, the Company undertook projects for promotion of education including construction of class rooms for a Government High School in Zuzuvadi, provision of potable drinking water systems (RO Purifier), providing Smart board for classes, Class room desks, Library furniture, CCTV Setup, Public Address system, Table & Chairs for teachers, Xerox machine to various Government Schools around Hosur plant location. The Company focuses its CSR activities on rejuvenating schools as most of the schools are in yearning need of an overhaul and lack even the most basic facilities.

The CSR projects were also focused on promotion of healthcare encompassing contribution of essential medical equipment and hygiene items to the Government Hospital and Urban Primary Health centre in Hosur. The Company focuses on the Government Hospitals as they lack basic infrastructure and medical equipments for the treatment of poor and needy patients from nearby rural and remote locations.

The Company gives importance to green environment and tree plantation in the nearby communities by distributing and planting free saplings every year. Employees are encouraged to participate in activities like blood donation camps, creating awareness on road safety, nominating employees with RTO as traffic wardens, 5S campaigns towards cleaner environment, imparting special education to the school children to name a few.

The Company, in line with the amendments in Companies Act, 2013, formulated annual action plan, which was approved by the Board of Directors, in pursuance of the CSR Policy of the Company, based on which spending on CSR activities were executed. The Company, during the year 2023-24 has spent Rs.71 Lakhs on CSR activities and no amount remain unspent as at the end of the year. Further, the unspent CSR amount of Rs.12 Lakhs pertaining to the on-going project of construction of classroom in Zuzuvadi which was transferred to the Unspent CSR account previous year pursuant to section 135(6) of the Companies Act, 2013 was also spent during the year on the project.

In accordance with requirements of the Companies Act, 2013, the Company has a CSR policy incorporating the requirements therein which is also available on Company's website at the following link https://wendtindia.com/wp-content/themes/wendtindia/pdf/csrpolicy.pdf.

The Annual Report on CSR activities in the prescribed format is annexed herewith as Annexure C.

EDUCATION & PROTECTION FUND (IEPF)

In terms of Section 124 (5) of the Companies Act, 2013, an amount of Rs.5,09,350 being unclaimed dividend during the year, pertaining to the Final dividend for the FY 2015-16 (Rs.3,12,810) and the Interim Dividend of FY 2016-17 (Rs.1,96,540) was transferred to IEPF after sending due reminders to the shareholders.

FIXED DEPOSITS

The Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the rules framed thereunder, and no amount of principal or interest was outstanding as on the balance sheet date.

LOANS AND INVESTMENTS

Particulars of Loans, Guarantees and Investments covered under section 186 of the Companies Act, 2013 are given below. There were no loans or guarantees covered under section 186 granted during the year.

Current Investments: Investments in Mutual Funds as on 31.03.2024 was Rs.6831 Lakhs.

KEY RATIOS

There is no significant change in the ratios and the decrease in Return on Equity (Return on Networth) is on account of lower Profit after tax (PAT) during the year.

QUALITY

The Company follows a quality assurance system with stringent tests built into every stage of production ensuring the quality of its products. The quality consciousness built in the Company's DNA backed by a thorough understanding of customer application needs and “one to one” customer support, has made the Company a synonym for quality and reliability. The product quality was enhanced by introducing Gemba inspection and risks were reduced resulting in improvement of production efficiencies thereby garnering customer loyalty, ensuring that Process & Product audits are being performed and regular testing of the product and ensuring that the quality is within the standard.

The Company has implemented 'Green Channel Suppliers & Vendors' which will eliminate incoming inspection thereby reducing production lead time & faster customer delivery. The Green channel suppliers are selected after assessment and evaluation of their processes and facilities. The Company continued planned supplier audits for assessing supplier gaps if any thereby improving incoming materials' quality performance. The Company also introduced Quality assurance agreements with suppliers which will help suppliers to understand their roles, responsibilities, and expectations.

The Company has certifications of ISO 9001: 2015, ISO 14001: 2015, ISO 45001: 2018, EN9100: 2018, IATF 16949: 2016 and EN 13236: 2019 reinforcing its commitment to ensure that Quality Management Standards are met.

IATF 16949: 2016 pertains to manufacturing of precision products and EN9100: 2018 pertains to Aerospace applications. In order to comply with the safety norms and requirements of overseas customers, the Company has successfully renewed ISO 9001: 2015, IS0 14001: 2015, ISO 45001: 2018, EN9100: 2018 and IATF 16949: 2016 Standards during the year and re-certified for EN13236: 2019. Quality being the uncompromised differentiator, the Company aims to ensure that product quality is built by deploying and embracing effective quality control management, process robustness, quality assurance and discipline at every stage of material flow.

SAFETY, HEALTH AND ENVIRONMENT (SHE)

Safety continues to be the key area of focus for the Company. Behavior based training both in person as well as virtually were conducted to promote a culture of safe working. The Company recognises the need and is committed to providing Safe, Healthy and Socially Accountable Work Culture in the Organisation.

All personnel on a periodical basis receive effective health and safety training, including on-site training, job specific training etc. During the year, the Company has provided trainings for creating awareness about the significance of safety amongst employees and visitors including by way of setting up of safety training kiosk.

The Annual medical check-up facility continues to assess the health status and risk of our employees. Employees benefitted from awareness sessions organised on the theme- FHH (Fitness, Health and Happiness) and employees were encouraged to take initiatives to improve their health and fitness.

Quarterly mock drills for fire safety, special medical attention for employees working in special process & sensitive areas, use of personal protection equipment (PPEs), zero discharge of ETP/STP and hazardous waste handling are some of the initiatives, which the Company continued to undertake during this year.

RECOGNITIONS AND AWARDS

The Company encourages its employees to participate in customer audits, group competitions, various national and international events & competitions. During the year, the Company received many awards and accolades from well recognised organisations, establishments and certifying bodies for various distinctive achievements. Needless to mention that these recognitions and accolades enhance the passion and optimism among the employees and act as key motivator for the Company as a whole. Some of the key recognitions received during the year are as follows:

ICAI Silver Award for Excellence in Sustainability Reporting (BRSR) FY 2022-23

The Company's Business Responsibility and Sustainability Report (BRSR) for the FY 2022-23 was honored with Silver Award under Small Cap Manufacturing Sector market capitalisation less than Rs.3000 crores by The Institute of Chartered Accountants of India. This accolade highlights Wendt's steadfast commitment to environmental, social, and governance principles, as well as supply chain integrity and human rights.

ICMAI Award for Excellence in Cost Management FY 2021-22

Wendt (India) Limited adjudged First Position under the category Manufacturing-Private-Small companies for (Turnover of Rs.100 to Rs.500 crores) by the Institute of Cost Accountants of India

(ICMAI) for the FY 2021-22.

CFO 100 -Roll of Honor 2024

The Company's CFO, Mukesh Kumar Hamirwasia was conferred with the CFO 100 Roll of Honor 2024 from CFO Collective (IMA India).

QCFI -CCQC 2023 Competition

8 teams participated in CCQC Competition during Oct 2023, and all 8 teams won Gold Award and the Company also bagged an individual gold award for poster competition.

l CUFEST 2023 Awards

Employees participated in Group-level Quality competition 'CUFEST 2023' (Quality festival of CUMI), and won awards for Marketing Excellence, SCM & Commercial Excellence, SGA, Slogan, Product Innovation, Theme Video, 5s and Idea King categories.

l Shine Awards

Murugappa Group recognises the best role Models for its five lights- Integrity, Passion, Quality, Respect and Responsibility. During the year, 3 of the Company's employees were declared shine award winners under the category of Integrity, Quality and Responsibility.

l Individual Excellence Award

The Organisation Organisation awarded employees who demonstrated high sense of ownership and responsibility and delivered consistent results in various areas such as Highest Sales, Highest Order booking, Lowest credit period, productivity, cycle time reduction, Safety, Quality, Problem solving, Customer satisfaction, Innovation, QRM, and best 5S practices, etc.

OPPORTUNITIES & THREATS OPPORTUNITIES

Disruptive technologies like Electric Automobiles, the recent emerging trend in the automotive industry, although a threat to the IC engine, also provides opportunities to explore this segment and find opportunity in vehicles.

Nano Cubic Boron Nitride abrasives are likely to augment applicability of Super Abrasives in many medical and electronic industry applications. The

Company is exploring to venture into EV, medical and electronics segments by collaboration and technology tie-ups with global partners to grow further.

The industries in the Auto, Aerospace, and Electronics manufacturing space demand high-performance applications. Improvements in the design of diamond wheels used to finish ceramics can be key to cost-effective manufacturing. Metal-bond specially design wheels for longer wheel life can lead to shorter process cycle times while also ensuring longer life, thereby reducing the overall grinding cost. The Company achieving the aerospace certification is a step in looking at growing this segment in future.

The Company would continue to leverage upon its vast experience and technical expertise, deep understanding of customer requirements, comprehensive product range, superior technology and the resultant competitive edge emerging out of its complementary business verticals namely Super Abrasives, Machine Tools and Precision Components.

Further, the Government's focus on Projects like 'Make in India' and 'Make for World' are expected to give a boost to the Company's products being import substitute, thus helping in conservation of precious foreign exchange during these difficult times.

THREATS

Industry leaders across the globe, with high brand value afford significant Research operations. Investment in R&D activities by these major players to innovate in the existing products and develop new technologies to sustain competition in the market is very high. On the other hand, there are many unorganised, regional proprietary run entities that are smaller in size with limited offerings, which address customers' requirements in a specific region only.

In order to counter both the extremes, the Company strives to evolve a unique approach to improve its market presence, market share and address both the segments. To address the price competitive market, the Company has launched fast-moving and Standard Super Abrasives and other tooling products and has been aggressively conducting promotional activities at the vicinity of high potential customers. For addressing the high performance, quality conscious segment, the Company is working with foreign Research Institutes and is on lookout for product specific, niche manufacturers for acquiring state-of-the-art technology.

ENTERPRISE VALUE ADDITION (EVA)

The Company has been able to continuously add value, the summary of which is given below:

l Gross Value Added is Revenue less Expenditure (excluding depreciation, expenditure on employee & directors service). l Payment to Government is current tax + dividend distribution tax. l Replacement and expansion is retained earnings +depreciation + deferred tax. l The Company has been constantly investing towards replacement and expansion expenditure to ensure fulfilment of market demand.

Risks and Concerns

The Company has constituted a Risk Management Committee (RMC) aligned with the requirements of the Companies Act, 2013 and Listing Regulations. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of this Report.

The Company has a robust business risk management process to identify, evaluate and mitigate risks impacting the business including those which may threaten the existence of the Company. This framework seeks to create transparency, minimise adverse impact on the business objectives and enhance the Company's competitive advantage. This also defines risk management approach across the organisation across various levels including documentation and reporting.

In an ever-changing economic landscape marked by dynamic customer demand, we proactively monitor risks to evaluate their potential short term and long term impact and strategically plan for effective mitigation.

The Company determines the categories of risk from strategic, operational, environmental, legal, social, cyber risks, extended enterprise and financial which the organisation may be exposed to and could impact its ability to conduct its business operations without disruption, to provide customer satisfaction and achieve sustainable success.

The Risk Management also forms an integral part of

the Company's Business Plan.

The Company has also developed a structured Risk Management Policy encompassing the risk management objectives, principles, processes, responsibility for implementation, maintenance of risk registers, review of risk movements, risk reporting framework etc.

After the risk is identified, risk prioritisation is undertaken which involves assigning a score based on the impact (potential outcome) & likelihood (probability of occurrence). The risks are also assessed for velocity (how fast a risk can impact an organisation) to assess the need for crisis plan. The risk response of the Company is of the following types: l Avoidance i.e., not to start or continue with an

activity which gives rise to a risk.

l Sharing the risk i.e., sharing with another party, the burden of loss or the benefit of gain, from a risk.

l Mitigating risk, an action that reduces the impact

or likelihood of a risk.

l Retention, where no worthwhile controls actions are feasible, and the risk is within the Company's tolerance level.

INDIAN ACCOUNTING STANDARDS (IND AS) - IFRS CONVERGED STANDARDS

The Company had adopted Ind AS with effect from 1 April 2016 pursuant to the Companies (Indian Accounting Standard) Rules, 2015 notified by the Ministry of Corporate Affairs on 16 February 2015.

ADEQUACY

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

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

l Safeguarding the assets of the Company.

l Financial proprietary of business transactions.

l Compliance with prevalent statutes regulations, policies and procedures.

l Control over capital and revenue expenditure with reference to approved budgets.

l Investment decisions are subject to detailed evaluation and formal approval according to the authority schedule in place.

The Internal Audit function is delegated to an external firm which evaluates the effectiveness and adequacy of internal controls, compliance with operating systems, policies and procedures of the Company and recommends improvements. The scope of the Internal Audit is annually determined by the Audit Committee considering inputs from the Statutory Auditors and the Management Team. Significant audit observations and the corrective/ preventive actions taken by the process owners is presented to the Audit Committee. A Periodic review of the adherence to the agreed action plan is carried out.

The Audit Committee of the Board periodically reviews audit plans, observations, and recommendations of the internal and external auditors, with reference to the significant risk areas and adequacy of internal controls and keeps the Board of Directors informed of its observations, if any, from time to time.

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

INTERNAL FINANCIAL CONTROLS (IFC)

Internal Control is a process, effected by an entity's Board of Directors, Management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting and compliance as defined by the Committee of Sponsoring Organisations (COSO) of the Treadway Commission (appointed by SEC, USA).

As per Section 134(5)(e) 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 accounting policies, 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 establish appropriate Code of Conduct, Enforcement and Delegation of Authority, Hiring and Retention practices, Whistle Blower mechanism, and other policies and procedures.

2. Process Level Controls (PLC) to ensure processes are stable, predictable and consistently operating at the targeted level of performance classified into Manual or Automated or IT dependent Controls. They are also classified as Preventive or Detective.

3. General IT Controls to ensure appropriate functioning of IT applications and systems built by Company to enable accurate and timely processing of financial data are-User Access rights; Management and Logical Access; Change Management controls; password policies and practices; Patch management and License management; back up and recovery of data.

The adequacy of IFC is ensured by:

l Documentation of risks and controls associated with major processes; l Validation classification of existing Controls to mitigate risks; l Identification of improvements and upgrades to the control; l Improving the effectiveness of controls through data analytics; l Performing testing of controls by Independent Internal Audit firm; l Implementation of sustainable solutions to Audit observations;

The IFC Audit is conducted annually by an independent firm of Chartered Accountants by testing of controls to ensure that all controls are operational, effective, adequate and identifying improvements to controls wherever necessary which is reviewed by the Audit Committee.

Liquidity and Cash Equivalents

The Company follows efficient working capital management. This requires being prudent in capital expenditure. Also, making its cash conversion cycle more efficient through faster collections from debtors, faster conversion from raw materials to finished goods through QRM resulting in healthy cash generation. Thereby, the Company is able to maintain its debt-free status.

The Company's robust Cash Management Policy is based on:

a. Uses cash to provide sufficient working capital to address business objectives of the Company and to add value to all stakeholders by continued enhancement.

b. Conserves sufficient cash as reserves that will aid the Company in venturing into meaningful business opportunities that unfold in future.

c. Prudently invest surplus funds that the business generates in liquid investments including AAA rated debt schemes of mutual funds as per the Board approved policy. This ensures the availability, safety and liquidity of the Company's funds while ensuring reasonable yield as per the prevailing market rates. The surplus funds are generated through stringent control of working capital.

As on 31 March 2024, the Company's investment in debt mutual funds was Rs.6831 lakhs in securities holding papers with high credit rating.

Costs

The Company continues the cost optimisation initiatives which was started during COVID times. This leads to continued focus on controllable costs in terms of reduction of losses and rejections, better negotiations with suppliers and vendors, price increase with customers and better price realisation from sale of scrap etc. The year started with high commodity price along with supply chain disruption which improved as the year progressed. The Company managed its cost by negotiating annual price with critical suppliers and buying in bulk based on annual demand projection. To combat supply chain disruption, the Company continues developing alternate suppliers as a part of its de-risking strategy. Also, the Company continues looking at the indigenisation of some of the supplies.

Initiatives like Vendor Managed Inventory (VMI) has ensured continuity of supplies of critical items including rationalisation of costs. Focus on Cost Optimisation has yielded savings in all the business segments. The rigorous variable and fixed cost reduction initiatives undertaken in the previous year has resulted in good improvement in the bottom line.

Share Capital

The paid-up equity share capital as on 31 March 2024 was 200 lakhs. During the year under review, the Company has not issued shares with differential voting

rights nor granted stock options nor sweat equity.

Shareholders' Funds

The shareholders' fund as on 31 March 2024 was Rs.19201 lakhs against Rs.16933 lakhs of previous year. Accordingly, the book value of the share stands at Rs. 960/- as compared to Rs.847/- during the previous year.

Loan Funds

The Company continues its debt free status as it does not have any long-term borrowing. It continues to utilise its cash credit limit with the banks to bridge the short-term fund requirement and for meeting the temporary mismatches in its cash flow.

Credit Rating

Your Company's credit rating as on 31 March 2024 are as follows:

The working capital limits of the Company continued to be rated by ICRA as AA- (pronounced ICRA double A minus) rating assigned to the Rs. 2 Crore Long-term Fund facilities of the Company which signifies low credit risk and stable. The short-term rating assigned to Rs. 19 crore Non-Fund Based working capital limit also continued to be reaffirmed as A1+ (pronounced ICRA A one plus).

There are no material changes and commitments affecting the financial position of the Company which have occurred between 31 March 2024 and the date of this Report.

CAPITAL EXPENDITURE

The Company follows the policy of being prudent in its capex spend. During the current year, the capital expenditure was Rs. 1115 lakhs (Previous year: 1152 Lakhs). The major capex spent was on addition of new plant & machinery towards capability building in fast growing products and new products 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 internal accruals. The Company reviews all its capex investments performance periodically against the projected rate of interest and payback period.

INVENTORIES AND SUNDRY DEBTORS

The Company follows rigorous Working Capital

Management, based on a robust process of continuous monitoring and control of receivables, inventories and other parameters. The overall inventory level as on 31 March 2024 is Rs. 3385 lakhs which is higher than previous year by Rs. 230 lakhs, an increase by 7%. In order to mitigate the supply chain disruption and ensure continuity of production, the Company holds strategic inventory of around Rs.250 lakhs.

Receivables (Gross) as on 31 March 2024, were at Rs. 5220 lakhs against Rs.3848 lakhs during the previous year. The higher receivables is due to record highest sales executed during March 2024. The Company closely monitors the Days Sales Outstanding (DSO) through an aggressive receivable management system including close follow ups and credit lock through the SAP system. This ensures that receivables are kept under control and payments received on time. The Company has been able to maintain the receivable average credit days at 79 days.

FOREIGN EXCHANGE HEDGING

The Company, being a net exporter, continues to practice natural hedging of foreign exchange earnings and outflow and does not take forward covers. The net forex gain during the year was Rs.93 lakhs (Previous Year: Rs.107 lakhs). During the year, the Company managed its exchange volatility by opening EEFC account in USD. Based on the success, the Company wishes to extrapolate the success of EEFC USD account to Euro currency also.

HUMAN RESOURCE

Wendt, being an engineering-knowledge-based Company, considers employees as its most precious assets. The Company has a strong and diverse workforce where every employee is involved as “Partners” in the progress. The intangible asset comprises all the competencies of the people within the organisation in terms of education, experience, potential and capacity. The Company encourages & motivates diversity amongst employees and encourages them to take active part in activities such as Cross Functional Teams (CFTs), Kaizens, Small Group Activities (SGAs), and Suggestions.

The Company emphasises Safety at the workplace with focused and highest attention from the Board. Periodic training and awareness sessions continue to be conducted for identification and elimination of unsafe working conditions.

Cordial relations continue to be maintained with the employees and the work atmosphere remained congenial throughout the year. The manpower strength of confirmed employees of the Company as on 31 March 2024 was 378.

The Company has a policy on prevention of sexual harassment at workplace in line with the requirement of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. The Company had constituted an Internal Complaints Committee as required under Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. No complaints were received during the year under review.

Enabling Change Management

l Initiated Job profiling through subject matter expert to identify unique job roles with job description and career lattice for each role.

l Organisation restructuring has been done to ensure right people are placed at right place.

l Enhance new joinee experience through best on boarding experience by hand holding them through mentoring and buddy network, periodic dialogues, improved induction etc.

l High Potential (HIPO) employees are identified and initiated Individual Development Plan (IDPs) and various leadership programs. This would ensure that are ready for succession to key roles.

l Wage restructuring has been done to support higher retiral benefits to employees. l Strategy & Business Development workshop are conducted to large audience so that they can understand Business plan process and contribute to its success which gives a sense of belongingness to all employees.

l Signed permanent wage settlement timely with all Non-Management Staffs (NMS) so that industrial harmony is maintained.

l Created opportunities for all employees to interact with CEO and Senior Leadership Team to showcase their accomplishments, aspirations etc.

Hiring & Skill Development

l Recruited around 30 key talents laterally to support business needs.

l As part of competency enhancement, specific programs have been organised through Subject Matter Experts towards Customer centricity, Sales excellence, Supervisory Development, Advanced communications, topics on Sustainability, Accounting and Finance, Internal audit, Audit trail, Cyber security etc., and Knowledge sharing sessions were conducted for the benefit of larger groups.

l Exclusive development program conducted for all Sales team including Key account management and Field Coaching Tool.

l Around 3-man days of trainings have been provided for each employee as part of capability enhancement on various competencies.

Improving employee engagement levels

l Interaction with every shopfloor employee by HR team to understand workplace issues, safety, grievances, scope for improvement etc., and taking timely action.

l Established business partnership of HR to extend focused support to business.

l Platforms are provided to employees by way of monthly structured reviews to share their highlights & plans and to seek support. Employees started focusing on Common objective as business goal rather than individual focus.

l Leveraged Reward scheme effectively to identify the best performers and recognise and reward them timely to cover almost 80% of employees in one or other categories of performance.

l Emphasised focus on TEI (ie. suggestions, Kaizen, Cross Functional Team, Small Group Activity through various celebrations, competitions, communications etc.

Digitalisation of HR process

l Identified partner and started working on digitisation of HR function starting from Hire to Exit/Retire. Phase 1 of the digitisation of HR process is underway.

RELATED PARTY TRANSACTIONS

The Company, as per the requirements of the Companies Act, 2013 and Regulation 23 of the Listing Regulations has a Policy for dealing with Related Parties. Further, in line with the amendments made in Listing Regulations pertaining to related party transactions which are effective on prospective basis

i.e. w.e.f. 1 April 2022 onwards, the policy on dealing with related party transactions was amended to adapt to the changes.

In line with its stated policy, all Related Party transactions both under the Companies Act, 2013 as well as the Listing Regulations are placed before the Audit Committee for its review and approval. Prior approval of the Committee is obtained on a quarterly basis for the transactions that are foreseen and repetitive in nature. Omnibus approval in respect of transactions which are not routine, or which cannot be foreseen or envisaged are also obtained as permitted under the applicable laws and the thresholds are periodically reviewed. The list of Related parties is reviewed and periodically updated as per the prevailing regulatory conditions.

The details of transactions proposed to be entered with Related Parties are placed before the Audit Committee for approval on an annual basis before the commencement of the financial year. Thereafter, a statement containing the nature and value of the transactions entered by the Company with Related Parties is presented for quarterly review by the Committee. Further, revised estimates or changes, if any to the proposed transactions for the remaining period are also placed for approval of the Committee on a quarterly basis. Besides, the Related Party transactions entered during the year are also reviewed by the Board on an annual basis. During the Audit

Committee meeting held on 14 March 2024, the transactions of the subsidiary company with their Related Parties as well as those envisaged with the Related parties of the Company were placed before the Audit Committee of the Company. The approval of estimates and revisions to this list of transactions is planned in the same manner as done for the parent company (detailed above).

All transactions with Related Parties under the Companies Act, 2013 entered during the financial year were in the ordinary course of business and on an arm's length basis and hence no particulars are required to be entered in the Form AOC-2. Further, all transactions entered into with Related Parties during the year even at arms' length basis in the ordinary course did not exceed the thresholds prescribed under the Companies (Meetings of Board and its Powers) Rules, 2014 or Listing Regulations or the Company's Policy in this regard and hence no disclosure was required to be made in Form AOC-2. Accordingly, there are no contracts or arrangements entered with Related Parties during the year to be disclosed under Sections 188(1) and 134(h) of the Companies Act, 2013 in Form AOC- 2. The Form AOC-2 in the prescribed format is annexed to this report as Annexure-B.

There are no materially significant Related Party transactions made by the Company with its Promoters, Directors, Key Managerial Personnel, or their relatives may have a potential conflict with the interest of the Company at large.

The Policy on Related Party Transactions as approved by the Board is uploaded on the Company's website h t t p s : / / w e n d t i n d i a . c o m / w p -content/uploads/2024/04/Policy-on-Related-Party-Transactions.pdf. None of the Directors and KMPs had any pecuniary relationship or transaction with the Company other than those relating to remuneration in their capacity as Directors/Executives and corporate action entitlements in their capacity as shareholders of the Company.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

In November 2018, the Ministry of Corporate Affairs (MCA) constituted a Committee on Business Responsibility Reporting (“the Committee”) to finalise business responsibility reporting formats for listed and unlisted companies, based on the framework of the National Guidelines on Responsible Business Conduct (NGRBC). Through its report, the Committee recommended that Business Responsibility Reporting (BRR) be upgraded to Business Responsibility and Sustainability Reporting (BRSR) where disclosures are based on ESG parameters, mandating organisations to holistically engage with stakeholders and go beyond regulatory compliances in terms of business measures and their reporting. SEBI, vide its circular dated 10 May 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalisation) from fiscal year 2023, while disclosure was voluntary for fiscal year 2022. The Company is ranked 896 position as per the market capitalisation at NSE as on 31 March 2024.

A copy of the Policy is available at h t t p s : / / w e n d t i n d i a . c o m / w p -content/uploads/2023/06/busines-responsibility-policy.pdf.

The Business Responsibility and sustainability Report for the year ended 31 March 2024 in terms of amended Regulation 34 of the Listing Regulations is annexed to this Report as Annexure E.

BOARD OF DIRECTORS

As on 31 March 2024, the Board of the Company comprised six Directors of which half (three) are independent.

During the FY 2023-24, Mr. Sridharan Rangarajan was appointed as an additional Director at the Board meeting held on 19 October 2023. Approval of Members for his appointment by way of Postal ballot was obtained on 15 December 2023. Mr. C Srikanth was appointed as an Executive Director & Chief Executive Officer effective 19 October 2023 and the same was approved by the shareholders by way of postal ballot on 15 December 2023. Consequent to the changes in the Board composition, the constitution of Committees of the Board was reviewed and revised more fully detailed in the Corporate Governance section of the Report.

Mr. Muthiah Venkatachalam retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. A proposal for his re-appointment is included in the Notice convening the 42 Annual General Meeting forconsideration and approval by the shareholders.

Further, during the year, Mr. N Ananthaseshan, Non- Executive Non- Independent Director stepped down from the Board effective 2 August 2023.

Mr. N Lakshminarayan on completion of his second term retired as a Non-Executive Independent Director with effect from 30 November 2023.The Board placed on record its appreciation for the services rendered by Mr. M Lakshminarayan and Mr. N Ananthaseshan during their tenure of office as Directors of the Company including as members of its various Committees.

The Company has received declarations from all its Independent Directors confirming that they meet the criteria of independence prescribed both under the Companies Act, 2013 and the Listing Regulations. In the opinion of the Board, all the Directors appointed during the year are persons with integrity, expertise and possess relevant experience in their respective fields.

All the Independent Directors of the Company have registered their names in the Independent Directors Data bank and had completed test/exempted as required under the Companies Act, 2013 and the Rules referred therein.

KEY MANAGERIAL PERSONNEL (KMP)

Mr. C Srikanth, Executive Director & Chief Executive Officer, Mr. Mukesh Kumar Hamirwasia, Chief Financial Officer and Mr. P Arjun Raj, Company Secretary are the Key Managerial Personnel of the Company as per Section 203 of the Companies Act, 2013.

BOARD MEETINGS

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

During the year, five (5) Board Meetings were convened and held in accordance with the provisions of the Act. The date(s) of the Board Meeting and attendance of the directors are given in the Corporate Governance Report forming an integral part of this report.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its various Committees as per the evaluation framework adopted by the Board on the recommendation of the Nomination and Remuneration Committee. Structured assessment forms were used in the overall Board evaluation comprising various aspects of the Board's functioning in terms of structure, its meetings, strategy, governance and other dynamics of its functioning besides the financial reporting process, internal controls and risk management. The evaluation of the Committees was based on their terms of reference fixed by the Board besides the dynamics of their functioning in terms of meeting frequency, effectiveness of contribution etc.

Separate questionnaires were used to evaluate the performance of individual Directors on parameters such as their level of engagement and contribution, objective judgement etc. The Executive Director's evaluation was based on leadership qualities, strategic planning, communication, engagement with the Board etc.

The Chairman was also evaluated based on the key aspects of his role. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman, the Board as a whole and the Non-Independent Directors was carried out by the Independent Directors at their separate meeting held during the year.

REMUNERATION OF DIRECTORS

Pursuant to Section 178(3) of the Companies Act 2013, the Nomination and Remuneration Committee of the Board has formulated the criteria for Board nominations as well as the policy on remuneration for Directors and employees of the Company.

The criteria for Board nominations lays down the qualification norms in terms of personal traits, experience, background and standards for independence besides the positive attributes required for a person to be inducted into the Board of the Company. Criteria for induction into Senior Management positions have also been laid down.

The Remuneration policy provides the framework for remunerating the members of the Board, Key Managerial Personnel and other employees of the Company. This Policy is guided by the principles and objectives enumerated in Section 178(4) of the Companies Act, 2013 and reflects the remuneration philosophy and principles of the Murugappa Group to ensure reasonableness and sufficiency of remuneration to attract, retain and motivate competent resources, a clear relationship of remuneration to performance and a balance between rewarding short and long-term performance of the Company. The policy lays down broad guidelines for payment of remuneration to Executive and Non-Executive Directors within the limits approved by the shareholders. Further details are available in the Corporate Governance Report.

The Board Nomination criteria and the Remuneration policy are available on the website of the Company at h t t p s : / / w e n d t i n d i a . c o m / w p -content/uploads/2024/02/Remuneration-Policy.pdf.

COMPOSITION OF AUDIT COMMITTEE

The Audit Committee of the Board comprises four members out of which three are independent. Mr. Shrinivas G. Shirgurkar is the Chairman and other members are Mrs. Hima Srinivas, Mr. Bhagya Chandra Rao and Mr. Sridharan Rangarajan. During the year, five Audit Committee meetings were held, the details of which are provided in the Corporate Governance Report.

COST AUDIT

Pursuant to Section 148 of the Companies Act, 2013, read with Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Company is required to maintain cost accounting records in respect of products of the Company covered under CETA category of Machinery & Mechanical appliances. Further, the cost accounting records maintained by the Company are required to be audited.

The Board, on the recommendation of the Audit Committee, had appointed M/s. B Y & Associates (Firm No. 003498), Cost Accountants, Chennai to audit the cost accounting records maintained by the Company under the said Rules for the FY 2021-22, FY 2022-23 and FY 2023-24 on a remuneration of Rs.1,00,000/-for each financial year. Further, they have been appointed by the Board to conduct the cost audit for the FY 2024-25 at the same remuneration of Rs.1,00,000/-.

The Companies Act, 2013, mandates that the remuneration payable to the Cost Auditor is to be ratified by the shareholders. Accordingly, a resolution seeking the shareholders' ratification of the remuneration payable to the Cost Auditor for the FY 2024-25 is included in the notice convening the 42 Annual General Meeting.

PARTICULARS OF EMPLOYEES

The information on employees and other details required to be disclosed under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to and forms part of this Report as Annexure D.

REPORT

In line with the requirements of the Companies Act,2013, the Company, with the approval of the shareholders at the Annual General Meeting held on 22 July 2022 re-appointed M/s. Price Waterhouse Chartered Accountants LLP (Reg. No. FRN 012754N/N500016) (PWC) as the Statutory Auditors of the Company to hold office from the conclusion of 40

Annual General Meeting until the conclusion of the 45 Annual General Meeting (AGM) on a remuneration of Rs.12,50,000/- (excluding out of pocket expenses incurred by them in connection with the Audit and applicable taxes) for the FY 2022-23 and the remuneration to be decided by the Board for the subsequent years based on the recommendation of the Audit Committee.

As required under Regulation 33 of the Listing Regulations, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The Report given by M/s. Price Waterhouse Chartered

Accountants LLP on the Financial Statements of the Company for the year ended 31 March 2024 is provided in the financial section of the Annual Report.

There are no qualifications, reservations, adverse remarks or disclaimers given by the Auditors in their report. The auditors have commented on the availability of the audit trail to which the Company's response is as follows:

The Company is using SAP software for maintaining its books of accounts. SAP software keeps a complete record of all changes made to the system's data for front-end transactions, thereby audit trail is ensured. The Audit Trail feature is activated at the database level for all the active users, to track and evaluate data modifications.

Further, SAP has in-built feature of recording audit trail (edit log). However, in respect of audit trail not maintained at the application level for modification by certain users with specific access for value changes during transaction debugging, the Company had removed such access that was existing only with user ID basis, with effect from April 2024. However, as part of mitigation procedure, financial transactions have been reviewed randomly and found that during the audit period there were no such instances of value changes during debugging of transactions through the user id in the subject.

There were no material changes or commitments affecting the financial position after the end of the financial year and date of this report.

SECRETARIAL AUDIT

M/s. Srinidhi Sridharan & Associates, Practicing Company Secretaries, Chennai were appointed as the Secretarial Auditor to undertake the Secretarial Audit of the Company for the FY 2023-24. The report of the Secretarial Auditor for year ended 31 March 2024 is annexed to and forms part of this Report. There are no qualifications, reservations, adverse remarks or disclaimers given by the Secretarial Auditor in the Report except on appointment of Cost Auditors.

With respect to the statement made by the Secretarial Auditor in their audit report on appointment of Cost auditors for the financial years 2021-22, 2022-23 and 2023-24, considering the turnover in respect of machine tools and precision components exceeded the thresholds prescribed under the Companies (Cost Records and Audit) Rules, 2014, from the financial year 2020-21, the details of the applicability of the requirement to conduct the cost audit was provided tothe Board by CFO at its meeting held on 19 January 2024. The Board forthwith appointed M/s. B Y & Associates (Firm No. 003498), Cost Accountants, Chennai as Cost Auditors on 19 January 2024 to conduct the Cost Audit for the FYs 2021-22, 2022-23 and 2023-24 and provide their report. The reports have been received on 14 March 2024 and duly submitted by the Company on 25 March 2024. M/s. B Y & Associates (Firm No. 003498), Cost Accountants, Chennai have been appointed as the Cost Auditor for conduct of cost audit for the FY 2023-24. All requisite forms in connection with the Cost Audit for the FYs 2021-22, 2022-23 and 2023-24 as well as the appointment of the Cost Auditors for the above referred years have been submitted by the Company.

In terms of Regulation 24A of the Listing Regulations, there is no material unlisted subsidiary incorporated in India. Material unlisted subsidiary for the purpose of this Regulation is a subsidiary whose income/net worth exceeds 20 per cent of the consolidated income/net worth respectively of the Company and its subsidiaries in the immediately preceding accounting year. Hence, the requirement prescribed under Regulation 24A of the Listing Regulations is not applicable to the Company, in so far as material subsidiary is concerned.

SECRETARIAL STANDARDS

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

CORPORATE GOVERNANCE

In terms of Regulation 34(3) read with Schedule V of the Listing Regulations, a separate section on Corporate Governance including the certificate from a Practicing Company Secretary confirming compliance is annexed to and forms an integral part of this Report.

CEO/CFO CERTIFICATE

Mr. C Srikanth, Executive Director & Chief Executive Officer and Mr. Mukesh Kumar Hamirwasia, Chief Financial Officer have submitted a certificate to the Board on the integrity of the financial statements and other matters as required under Regulation 17(8) of the Listing.

BLOWER POLICY

The Company has a well-established whistle blower policy as part of vigil mechanism for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of conduct or ethics policy. This mechanism also provides for adequate safeguards against victimisation of Director(s)/employee(s) who avail of the mechanism and provides for direct access to the Chairman of the Audit Committee in exceptional cases. The Whistle blower policy is available on the Company' s website at the following link h t t p s : / / w e n d t i n d i a . c o m / w p -content/themes/wendtindia/pdf/Whistle-Blower-Policy.pdf. It is affirmed that during the year, no employee was denied access to the Audit Committee.

ANNUAL RETURN

The Annual Return in Form MGT-7 is available at h t t p s : / / w e n d t i n d i a . c o m / w p -content/uploads/2024/06/Annual-Return-Form-MGT-7.pdf .

STATEMENT

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

l in the preparation of the annual accounts for the financial year ended 31 March 2024, the applicable accounting standards have been followed and there have been no material departures from the same;

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

l proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

l proper internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

l proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The information on energy conservation, technology absorption, expenditure incurred on Research & Development and forex earnings/outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed to and forms part of this Report as

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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

OTHER CONFIRMATIONS

No application under the Insolvency and Bankruptcy Code, 2016 (IBC) was made on the Company during the year. Further, no proceeding under the IBC was initiated or is pending as at 31 March 2024. There was no instance of one-time settlement with any Bank or Financial Institution.

ACKNOWLEDGMENTS

The Board gratefully acknowledges the co-operation received from various stakeholders of the Company viz., customers, suppliers, partners, banks, government and other statutory authorities, auditors, business associates and shareholders. The Directors extend their gratitude to all the regulatory agencies like SEBI, Registrar of Companies, Stock Exchanges and other Central and State Government authorities/agencies, vendors and sub-contracting partners for their support. The Board also acknowledges the unstinted co-operation, commitment and dedication made by all the employees of the Company in the previous financial year.

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