Carborundum Universal Ltd Directors Report.

Your Directors have the pleasure in presenting the 67th Annual Report together with the Audited Financial Statements for the year ended 31st March 2021. 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 the Directors Report to avoid duplication and overlap.


Economic Overview

The year 2020, which began with concerns over an unfamiliar epidemic spreading in a few provinces of China,has left unimaginable losses on a global scale in its wake - both in terms of loss of lives and livelihood. As global growth contracted sharply by 3.3% over the year, almost every single major economy, except for China, saw steep declines in national output, albeit with a marked divergence in the pattern and intensity of the decline. This divergence in economic output was caused by two sets of factors - first, the differences in the fundamental economic structures of various countries such as the dependence on tourism and exports, and the fiscal muscle of their respective Governments; and second, differences in the policy routes adopted with respect to tackling the pandemic, and the rigour of implementation of these measures.

India early on, saw one of the strictest lockdowns in the world. The country, which began its financial year amid the lockdown, recorded one of the steepest contractions in GDP among major economies - an abysmal 24% compared to the single digit declines seen in the same quarter among its peers. However, with the gradual easing of the lockdown restrictions over Q2, demand pent-up within some sections of the economy, came back strongly, fuelled by the ‘forced cost savings over previous quarters. Particularly, construction and home renovations outperformed expectations. With the sudden influx of an able workforce into the rural economy, after the wave of ‘reverse migration, some sections of this economy helped impede the overall decline in growth - particularly in affordable housing, tractors, and two wheeler segments. As expected, the preference for personal modes of transportation increased, and over the festive season, certain segments of passenger vehicles grew. Notwithstanding these tailwinds, the Indian economy entered technical recession in Q2, recording a decline of 7.3%. The interest of consumers, which gained traction over the festive season, buoyed demand towards the end of Q2 and in Q3, the economy teetered towards positive territory, growing at 0.4%. Around this time, Europe began to experience the second wave of the pandemic, and growth in the region was hampered yet again. Not only have economic divisions widened between nations, but also within nations. In a grim estimate, the IMF suggests that an additional 95 million people could have entered extreme poverty in 2020. The damage caused by COVID-19 to economies still looms large - human capital formation and capability building has been impeded, owing to educational institutions in many developing economies remaining closed for prolonged periods or operating with sub-par online infrastructure. With plants and factories across the world being operated intermittently for a good part of H1, shocks to supply chain were felt across economies, with acute shortages in minerals, commodities, metals and logistics. In complete discord to this were market sentiments, which remained surprisingly bullish, especially over the second half of the year. While valuations were rising on one-hand, safe-haven assets were rising on the other. Asset markets were buoyed by expectations of vaccines and fiscal stimulus.

Going forward, the IMF estimates that the Indian Economy will grow by 12.5 % in FY 2021-22. There are clear headwinds and tailwinds to the economy now; the Union Budgets heavy focus on infrastructure and the PLI scheme are expected to keep investment sentiments positive. Many organisations have sizeable corpus for investment due to the inability to invest over FY 2020-21 - however, the pace of investment remains to be seen. The IMF has, as recently as April 2021, revised its global growth estimate to 6% in 2021 and 4.4% in 2022. With massive stimulus packages being announced by advanced economies such as the US, spill-over effect on trading partners such as India is expected to be positive.

However, uncertainties caused by the emergence of new variants with higher rates of transmission cast a shadow over growth prospects. Even as this report goes into publication, India is at the brink of the second wave and has been dubbed the ‘new ground zero of the pandemic. There could be little respite from commodity markets; average oil prices are expected to reach USD 58.52/bbl in 2021, a 30% rise from the low base of 2020. Metal prices are expected to rise, owing to Chinas strong rebound. As of the beginning of the calendar year 2021, Indias industrial output was still in decline and inflation was inching up. Continued inflationary pressures could dampen consumer sentiments and reduce consumption expenditure. In short, 2021 will also be a testing year - as businesses and governments strive to get back on their feet and to make up for the growth lost over 2020, while prioritising the health and safety of people above everything else.

Company Performance


During the FY 2020-21, standalone revenues marginally increased by 1.6 per cent and the consolidated revenues also marginally increased by 1.4 per cent. The Company began its financial year at the peak of a nation-wide lockdown. Plants, except for the power-generating units / continuous processes - had been quickly, and safely shut down. IT infrastructure to enable remote working options were rolled out. As the lockdown was lifted, utilisations across plants slowly ramped up over Q2 and in Q3, many segments saw strong demand from domestic and export markets. However, the shortage of materials, rising input costs, and the availability of containers posed a challenge. Some segments also witnessed a higher share of exports, with incremental growth coming from export customers wishing to de-risk their supply chains. The growth story among subsidiaries is mixed. While Volzhsky Abrasive Works, and Sterling Abrasives Limited performed well recording growth, CUMI (Australia) Pty Limited (CAPL), CUMI America Inc., CUMI Abrasives and Ceramics Company Limited, China (CACCL), and CUMI Middle East (CME) were impacted by a host of factors. CAPL was especially impacted by the brewing trade tensions between China and Australia - which manifested in the form of lower iron ore off-take from China. The Abrasives segment is almost flat on a consolidated level, and marginal increase at a standalone level. The Electrominerals segment grew 3.8% at a consolidated level, and 7% at a standalone level, supported by growth in volumes and realisation. Higher productivity, and prudent cost control helped almost double the profits at a standalone level. The Ceramics segment de-grew by 2.2% on a standalone level and 0.3% on a consolidated level. While demand from domestic core industries has been tepid this year, the demand for Technical Ceramics, driven by technology transformations in the Auto industry and the interest towards clean energy, has driven growth. The following table summarises the standalone and consolidated revenues - both segment and geography wise:



% share Amount % share Amount %
Abrasives 50 8177 50 8147 0
Ceramics 30 5007 32 5120 (2)
Electrominerals 27 4396 25 4109 7
Eliminations (7) (1087) (7) (1145) (5)
Total 100 16493 100 16231 2
India 75 12425 76 12261 1
Rest of the world 25 4068 24 3970 2
Total 100 16493 100 16231 2


2019 - 20

% share Amount % share Amount %
Abrasives 38 9931 39 9953 (0)
Ceramics 24 6272 24 6290 (0)
Electrominerals 41 10644 40 10258 4
Power 1 229 1 237 (3)
IT Services 2 410 2 471 (13)
Eliminations (6) (1445) (6) (1515) (5)
Total 100 26041 100 25694 1
India 51 13289 51 13097 1
Rest of the world 49 12752 49 12597 1
Total 100 26041 100 25694 1

The Companys consolidated revenues from India and from rest of the world increased by 1 per cent.


The manufacturing team played a vital role in safely closing or scaling down operations following the announcement of the nation-wide lockdown and in restarting operations as and when permitted. The teams have also realigned shop-floor layouts to ensure safe work environment. Continued focus on cost control helped the Company make gains in profit margins. All major capexes have been executed as planned.

Earnings & Profitability

The Companys standalone financial results are summarised in the table below:

As % of Sales 2020-21 As % of Sales 2019-20 Increase %
Sales 16494 16231 2
Other Operating Income 229 281 (18)
Revenue from Operations 16723 16512 1
Other Income 423 473 (11)
Total Income 17146 16985 1
Cost of material consumed 36 5999 39 6267 (4)
Purchase of stock in trade 3 530 4 626 (15)
Movement of Inventory 3 559 (2) (296) (289)
Employee benefits expense 12 1962 12 1959 0
Finance Cost 0 3 0 4 (23)
Depreciation and amortisation 4 614 4 670 (8)
Power & Fuel 10 1671 11 1809 (8)
Other expenses 20 3251 22 3551 (8)
Total Expenses 88 14589 90 14590 0
Profit before tax before exceptional item 16 2557 15 2395 7
Exceptional items(net) (1) (112) - - -
Profit before tax 15 2445 15 2395 2
Profit after tax 11 1840 12 1913 (4)
Total Comprehensive Income 12 1913 11 1740 10

Standalone profit before tax stood at 2445 million as compared to

2395 million during the previous year.

The Company uses a variety of raw materials for its products - Bonds, Cotton Yarn, Grains, Calcined Alumina, Tabular Alumina, Brown fused Alumina, White fused Alumina, Silicon Carbide, Mullite, Pet Coke, Bauxite, Zircon Sand amongst others. The sourcing is a prudent mix of indigenous and imported materials. Aided by judicious sourcing and optimising throughput in production, material consumption continued to marginally improve during the year.

Other expenses decreased by 8.4% to 3251 million in the current year from 3551 million in the preceding year.

Power and fuel cost decreased by 7.6% from 1809 million in the preceding year to 1671 million during the current year owing to reduction in the volume and better power generation from the Companys Hydel power unit in Maniyar.

Employee benefits expense remained flat and the overall employee cost was at 11.9 per cent of the revenues.

Profit before finance cost and tax margin expanded in all segments due to more favourable cost structures, and better realisation in some segments.

Finance costs were at 2.7 million compared to 3.5 million in the previous year. Despite the nation-wide lockdown in Q1, revenues were maintained at almost flat levels over last year. Profit after Tax was maintained at last years levels due to strong cost control measures across the Company. In addition to the above, the enhanced Profits is also attributable to the increase in income by way of sale of 2.37% of the shareholding in Wendt (India) Ltd., by an offer for sale mechanism on the exchange platform to comply with the minimum public shareholding requirement in Wendt (India) Ltd. Total Comprehensive Income increased from 1740 million to 1913 million.

The consolidated profit before tax (before share of profit from Associate and Joint ventures) entity-wise is represented below:

2020-21 2019-20
CUMI Standalone 2445 2395
Subsidiaries including step down subsidiaries:
Net Access India Limited 29 37
Southern Energy Development Corporation Limited 103 76
Sterling Abrasives Limited 167 100
CUMI (Australia) Pty Limited 148 185
CUMI International Limited 308 329
Volzhsky Abrasive Works 1354 1119
Foskor Zirconia (Pty) Limited (105) (205)
CUMI America Inc. 7 18
CUMI Middle East FZE 5 1
CUMI Abrasives & Ceramics Company Limited 5 (8)
CUMI Europe s.r.o. - (0)
Thukela Refractories Isithebe Pty Limited - -
Total of Subsidiaries 2021 1652
Inter Company Eliminations (670) (719)
Consolidated profit before tax and share of profit from Associate and Joint ventures 3796 3328
Consolidated profit after tax attributable to owners 2843 2724

On a consolidated basis, the profit before tax (before share of profit from Associate and Joint Ventures) increased to 3796 million from 3328 million. Profit after tax and non-controlling interests has increased to 2843 million from 2724 million. The performance of the subsidiaries is detailed separately in this Report.

Financial Position

An overview of the Companys financial position - on a standalone and consolidated basis is given below: ( million)

Financial position Standalone Consolidated
31.03.2021 31.03.2020 % change 31.03.2021 31.03.2020 % change
Net Fixed assets (including goodwill and 4293 4344 (1) 8052 7870 2
Right of use assets)
Investments - Non current 2507 2458 2 1271 1212 5
Other assets:
- Inventories 2951 3263 (10) 4605 5076 (9)
- Trade receivables 3177 2593 23 4776 4016 19
- Cash and cash equivalents 2548 2231 14 4783 3595 33
- Other assets 2980 841 255 3398 1147 196
Total assets 18456 15730 17 26885 22916 17
Liabilities (Other than loans) 3108 2059 51 4676 3261 43
Net assets 15348 13671 12 22209 19655 13
Sources of funding:
Total equity attributable to owner 15348 13671 12 21315 18584 15
Non - Controlling interest - - - 464 455 2
loan outstanding:
- Long term borrowings - - - 50 42 18
- Payable within one year - - - 25 21 18
- Short term borrowings - - - 355 553 (36)
Total loans - - - 430 616 (30)
15348 13671 12 22209 19655 13
loans (net of cash and cash equivalents) (2548) (2231) 14 (4353) (2979) 46

On a consolidated basis, the total equity attributable to owners as on 31st March 2021 was 21315 million. There was an increase (net of dividend) to the extent of 2731 million. Non-controlling interest was at 464 million.

Liabilities (other than loans) was 4676 million. The loans outstanding reduced to 430 million from 616 million. Net fixed assets (including goodwill and Right of use assets) increased to 8052 million during the current year from 7870 million in the last year.

Cash Flow

The Companys cash flow is healthy. The following table summarises the Companys standalone and consolidated cash flows for the current and previous year:

Cash flow



2020-21 2019-20 2020-21 2019-20
Cash flow from Operations 3301 2921 5534 5061
Taxes paid (590) (610) (1026) (992)
Cash flow from operating activities 2711 2311 4508 4069
Capital Expenditure (Net of disposal) (558) (677) (1026) (1226)
Cash flow from other investing activities (1578) 369 (1669) 296
Cash flow from investing activities (2136) (308) (2695) (930)
Cash flow from financing activities (258) (864) (662) (1346)
Net increase/(Decrease) in Cash & Cash equivalents 317 1139 1151 1793
Net Cash and Cash equivalents at the beginning of the year 2231 1092 3596 1921
Effect of exchange rate changes on the balances of cash and cash equivalents - - 36 (118)
held in foreign currencies
Cash and Cash equivalents at the end of the year 2548 2231 4783 3596

On a standalone basis, net cash generation from operations was

2711 million in FY 2020-21 compared to previous years 2311 million. Net cash outflow on account of investing activities was 2136 million majorly towards investment in bank deposits and addition of property, plant and equipment. Net cash outflow on account of financing activities was 258 million which is attributable primarily to repayment of borrowings and dividends paid. The net increase in cash and cash equivalents was 317 million against 1139 million in FY 2019-20. On a consolidated basis, net cash generation from operations was

4508 million in FY 2020-21. Net cash outflow on account of investing activities was 2695 million. Net cash outflow on account of financing activities was 662 million which is attributable primarily to repayment of borrowings and dividends paid. The net increase in cash and cash equivalents was 1151 million against 1793 million in FY 2019-20.

Key Financial Ratios (on a standalone basis)

Parameter 2020-21 2019-20 Favourable/ Comments
(Adverse) in %
R O C E % 17.64 18.14 (3) Due to increase in capital employed
Debt Equity (times) - - - CUMI is a debt free Company
PBT % to Sales* 14.82 14.76 0 Marginal increase
Asset turnover (times) 1.15 1.33 (13) Due to increase in total assets
Receivable turnover (days) 64 66 4 Supported by effective collection efforts
Inventory turnover (days) 69 75 8 Effective inventory management.
Interest Coverage Ratio (times) 1171.11 871.79 34 Reduction in Finance cost.
Current Ratio(times) 3.90 4.65 (16) Due to increase in current liabilities
Operating Profit Margin (%) * 12.95 11.86 9 Better product mix
Net Profit Margin (%) 11.15 11.79 (5) Due to decrease in Profit after tax mainly on
account of exceptional items.
Return on Net Worth (%) 12.68 14.47 (12) Due to decrease in Profit after tax mainly on
account of exceptional items.


*excluding exceptional income/expenses (Net)


The paid up equity share capital as on 31st March 2021 was 189.59 million. The capital increased during the year by 0.18 million, consequent to allotment of shares upon exercise of Stock Options by employees under the Companys Employee Stock Option Scheme 2007 and Employee Stock Option Plan 2016.


Considering the past dividend payout ratio and the current years operating profit, the Board has considered it appropriate to recommend a final dividend of 1.50/- per equity share of 1/- each. It may be recalled that in February 2021, an interim dividend at the rate of 1.50/- per equity share of 1/- each was declared and paid. This aggregates to a total dividend of 3.00/- per equity share of 1/- each for the year, which is higher than the previous year. The Companys Dividend Policy is available at

The dividend paid as well as being recommended for the year ended 31st March 2021 is in line with this policy.


An amount of 500 million has been transferred to the General Reserve of the Company as at 31st March 2021.


The business profile, market developments and current year performance are elaborated in the following sections:


Business Profile

This SBU is in the business of engineering surfaces. It manufactures and distributes rigid and flexible abrasives and adjacent products that are used in the generation of precision, functional or enduring surfaces. The key product segments are Bonded Abrasives, Coated Abrasives, Metal Working Fluid, Super Abrasives and allied products.

Rigid or Bonded Abrasives products grind, clean, scour, abrade or remove solid material through a rubbing action. Bonded Abrasives are made using Glass Bonds (vitrified), or Phenolic Resin Bonds. Coated Abrasives are basically hard synthetic minerals coated on to paper, fibre, cloth or film and finally formed into different shapes, sizes and types according to application needs. Abrasive materials and Abrasive products are utilised in several end user industries such as Automobiles Auto Ancillary, Metalworking, Building and Construction, Wood Working, Railways, Aerospace and General Engineering.

This Business has more than sixty years of experience in Abrasives manufacturing, application engineering and distribution. Strong Research & Development backed by application engineering and supported by multi generation channel partners are the strengths of this Business. Over the years, it has built world class facilities with strong processes, which gives it a cutting edge. This has been reinforced with the commissioning of an automated, world-class coated Maker plant at Sriperumbudur during March 2020, thereby doubling the installed capacity of Coated Abrasives which is expected to cater to the growing demand for coated products in the domestic and international markets.

The competitive advantage of the Business comes from its raw materials sourced from the Electrominerals Business of the Company and from the best suppliers within India and across the world. These inputs are then formulated, and the products are designed based on a deep understanding of the end-use applications that is exhibited by the very experienced team of application engineers across the globe.

Cost competitiveness is the overarching strategy for the Business while ensuring that the supply requirements and changing needs of the market are met in full.

The Business has ten manufacturing plants located across India, Russia and Thailand. The marketing entities in North America, Middle East, China and distributors across the globe provide strong market reach in India and over 55 markets globally.

Industry Scenario

The global Abrasives market witnessed a slowdown due to COVID-19 pandemic and the resultant lockdown scenario across the globe impacting consumption in Americas, Europe, and Asia Pacific. Still, Asia Pacific represents the largest and the fastest growing market for the Abrasives industry and China continues to be the largest producer of Abrasive materials and Abrasive products. The demand for Abrasives from industries such as transportation, building and construction and other durable goods industries is on the recovery path owing to easing of lockdown restrictions across the globe. The industry is dominated by several leading players operating across the globe.

The Indian market has been continuously witnessing a shift from manual grinding methods to mechanised processes, ushering in opportunities for new products in the Coated Abrasives segment. The Bonded Abrasives segment constitutes a key consumable in the Construction and Transportation industries, which has demonstrated high growth in the past decade due to rapid urbanisation and increase in disposable income. During FY 2020-21, the Indian Abrasives market was marred by slowdown across several key end user segments such as Automotive, Construction, Foundry & Forgings. But the overall business scenario in India had shown signs of recovery beginning Q2 of FY 2020-21 due to ease of lockdown and improved further during Q3 and Q4 resulting in major recovery across key end user segments such as Automotive and Construction. The growth momentum is expected to continue through FY 2021-22 due to positive macro-economic and micro-economic factors subject to the severity of the second wave of the pandemic which has just started surging in India.

The unorganised market that constitutes about 30 per cent of overall market largely dominated by imports suffered a headwind due to product unavailability largely due to lockdown situations thereby benefitting the reputed domestic Abrasives manufacturers. This segment of the market is predominantly price driven commensurate with performance requirement.

Sales Overview

As the financial year began under lockdown, the primary focus as across all businesses of the Company was to protect the health of its employees and operate the plants under strict guidelines mandated by Central and State governments. During the year, opportunities risen out of pandemic situation such as imports substitution, higher agricultural output, pent-up demand in automotive segment and higher growth opportunities in tier 2 and tier 3 cities were leveraged and some of the initiatives are expected to sustain during FY 2021-22 as well. Despite the COVID-19 related challenges, Business continued to make steady progress in building distribution leadership, a key strategic pillar for the Companys growth. During the year, the Business appointed new channel partners and expanded its dealer network across India. Retail development and market storming initiatives were conducted for better market penetration and several new digital initiatives were introduced that is expected to give a sustainable competitive advantage, better and faster connect with the end user communities. New products were continued to be developed and introduced in meeting the needs of customers.


The segment continued its focus on products made with high performance grains by working in coordination with the Electrominerals Business. This helped to build competitive advantage by developing and establishing new range of products. The newly invested Coated Abrasives manufacturing capacity through an additional Maker line at Sriperumbudur has been fully commercialised and the capacity utilisation is progressing as per plan. The new Maker is equipped with state-of-the-art IOT enabled process monitoring and improvement features for real-time monitoring ultimately enhancing the quality and volume. Business had faced headwinds in terms of higher cost push and raw material availability during Q3 and Q4 and a part of it has been negated by price increase and cost savings initiatives adopted by Business using Total Productive Management tools. To develop competitive products and to cater to the need of customer, quality has been enhanced by imbibing the voice of customer through Quality Function Deployment techniques.

The elements of Industry 4.0 have been imbibed in the day-to-day operations, to leverage the gains of IOT and data analytics. Several digital initiatives are being pursued to remain competitive. Considering the changing landscape of manufacturing technologies, the Business would continue its effort to build capabilities in newer fields and technologies. Horizontal deployment of such steps is likely to give it a competitive advantage in the changing landscape.

Key Financial Summary

Particulars Standalone Consolidated
2020-21 2019-20 Change (%) 2020-21 2019-20 Change (%)
Revenue 8177 8147 0 9931 9953 (0)
Segment results (PBIT) 1179 1083 9 1343 1129 19
Capital employed 3132 3469 (10) 4690 5008 (6)
Share to total revenue of CUMI (%) 50 50 38 39
(without eliminations)
Share to segment results (PBIT) of CUMI (%) 46 45 34 33


Business Profile

The Ceramics Business comprises of the Industrial Ceramics and the Refractories product groups.

Industrial Ceramics

Industrial Ceramics Business offers advanced Ceramics in Alumina, Zirconia, Zirconia Toughened Alumina and Silicon Carbide products addressing wear and corrosion protection, electrical insulation, thermal protection and ballistic protection applications. The key user industries for Ceramics Business are Power Generation and Distribution, Mining & Ore processing, Cement, Ferrous and Non-Ferrous Industries, Automotive, Battery, Glass, Paper, Food Grain handling, Petrochemicals and Ceramic Tiles. The operations are carried out through manufacturing/service facilities located in India, Australia and the US. The subsidiaries in North America, Middle East and China also support this Business in increasing market reach.

The Industrial Ceramics Business based out of India is largely a global business and majority of the sales volumes are through exports. The Company is one of the major players in India, Australia and Europe and in specific product groups in Japan and China.


Refractory is a material that has the ability to withstand load when subjected to high temperatures up to 2000 degrees Celsius in the presence of metals, non-metals and chemical reactions. It is used in applications that require extreme resistance to heat, such as reactors and furnace linings.

The Company is a leading player in complex shaped high temperature application Refractories, Refractory cements, Monolithic castables, and pre-cast pre-fired Refractories. The key user industries for Refractory Business are Iron & Steel, Secondary Steel, Glass melting, Cement kilns, Carbon black reactors, Rocket launch pads, Ceramics, Petrochemicals, Thermal power plants, Non-ferrous melting, Foundry, Heat treatment furnaces etc.


Prodorite branded Anti-corrosive material is used in highly acidic or basic environment. The Company is a major player in this industry, serving a wide range of Chemical process industries and other industries dealing with treatment of effluents. The Companys product range include Acid resistant wall and floor tiles, Carbon bricks, Tiles, anticorrosive Lining, Epoxy and PU Flooring, Screeding, PU and Epoxy Coatings, Piping, Sealants and Water proof construction chemicals. The Companys Poly Concrete Cells (Tanks) are also used in Copper and Zinc extraction units across the world.


Composites are primarily Glass or Carbon Fibre reinforced polymer products manufactured through Vacuum infusion, Pultrusion, Filament winding, Grating and hand lay-up methods. The product range includes large Chemical storage tanks, Chimneys, Flue Gas Desulphurisation (FGD) spray headers, Abrasion resistant Anti-corrosive pipes & Gratings, Windmill nacelle covers and nose cones, Automotive and Railway body panels, Gratings, Pallets, Cable trays, Flooring, Chequered plates, Roof sheets, Chimney ladders, Platforms, Bridges, Louvers, Fencing etc. High precision Carbon Fibre Reinforced Polymers for defence applications is a new foray and growing area.

The operations are carried out through manufacturing/service facilities located in India (Ranipet, Serkadu & Jabalpur) and Russia.

Industry Scenario Industrial Ceramics

The Industrial Ceramics Business has two verticals - Wear Materials offering Wear solutions for various industrial applications; Engineered Technical Ceramics manufacturing high end Engineered Ceramics and Metallized Ceramics.

Under Wear Materials, the Company offers wear protection solutions using Advanced Ceramics, Rubber backed Ceramics and Composites in the form of Wear Resistant Liners, Ceramic Lined Equipment for OEM (Original Equipment Manufacturer) customers and Repair & Maintenance across key industries mentioned above. The Business has expanded its product offerings and developed new applications across key industry segments. A solutions-based approach to solve customer problems through on-site wear audits, superior design and simulation, on-site installation services, enhances equipment performance, productivity and life. The Company is a leader in Australian market and has expanded its customer base in America, Russia and Commonwealth of Independent States and Japan.

The Business is working on enhancing capability of Ceramic Lined Equipment by offering Complete Fabricated System Assemblies, Catering to OEM and Repair & Maintenance customers.Project LE 2.0 is currently under progress and is expected be commissioned this year. Under Technical Ceramics, the Company is a significant manufacturer of Metallized Cylinders in India for high voltage power transmission and distribution and caters to leading customers globally.

The Business has drawn up a clear plan to be a global leader in Metallized Ceramics for Vacuum Interrupters. Towards this, capacities have been further expanded by the addition of a new Continuous Metallization furnace. The Furnace has been successfully commissioned this year and has been released for regular production. This facility would help increase volumes with existing customers and in entering new markets. In the Engineered Ceramics product segment, the Business has further strengthened its position in Solid Oxide Fuel Cell market and has started forays into Hydrogen applications. The Business has also commenced bulk supplies of Ceramics for the global Electric Vehicle market. This Business is expected to grow exponentially in the coming years. At the same time, the Business continues to produce Ceramic insulator bodies for Spark Plugs, the demand for which has reached record levels after the COVID-19 lockdown. An important capability that was added in Engineered Ceramics was that of Sintered Silicon Carbide, comprising of a state-of-the-art Vacuum Sintering furnace that can operate at temperatures above 2,000 Degrees Celsius. The facility has been commissioned and the Business is poised to cater to a wide range of demanding wear and corrosion resistance applications. Towards attaining Cost Leadership across all product segments, the Business is working closely with Gas Authority India Limited (GAIL) for bringing Piped Natural Gas (PNG) to the facility. The pipeline project was executed successfully and the transition from liquid fuel to natural gas in all the Kilns used for Ceramic Sintering is underway. This transition would significantly improve cost competitiveness of key products segments and importantly reduce emissions with the use of this clean burning fuel.


With respect to Refractories, on account of the pandemic condition across the globe, considering the lower demand, there was an expectation across various customer segments for a price reduction. Iron & Steel industry and Cement industry registered good profits during the year also backed by reduction in prices. Due to lower demand, and rescheduling of projects execution, these customers exercised higher bargaining power amongst its suppliers. During the previous years, players in the Carbon black industry had been undertaking capacity addition, driven by the demand in the tyre industry. This industry suffered during the financial year on account of low capacity utilisation and lower demand due to the pandemic which saw a marginal improvement towards the end of Q4. To de-risk their supply chain, export customers who were earlier looking to diversify their sourcing strategy have gone back to sourcing locally on account of challenges imposed by the varied lockdown conditions in countries in different periods of time.

Anti-Corrosive and Composites

The Anti-corrosives Business has launched construction chemical products for water proofing, hygiene grade Polymer and Polyurethane flooring products for Hospitals, Pharma and Food industry. Business has also launched industrial adhesives for various applications during the last year. Considering the challenges from the pandemic, the penetration in the global market could not be undertaken as per plan. However, with continued efforts, these products have gained market share locally and have been proven successful.

The Composites Business is comprised of project-based and standard product segments. Standard products have grown significantly, through introduction of Abrasion resistant gratings, Chequered plates, Automotive panels; in addition to the pre-existing product basket of pipes, tanks, windmill nacelle cover and other products. Business has successfully executed three projects of Flue Gas Desulphurisation spray headers and has gained significant project orders for spray headers and the customer base has expanded. Business also bagged new orders for wear shield abrasion resistant, anticorrosive piping from thermal power plants for chemical treatment circuit desulphurisation. The Composite business has also gained orders for structural components to be used in defence applications.

In order to replace the conventional Steel TMT bar in construction, especially in corrosive environments, the Business has launched FRP Composite rebar, which has double the tensile strength than TMT bars. This rebar finds its application at construction sites in coastal areas, chemical plants and in electrical installations where EMF (Electromotive Force) and inductive current are of concern.

Sales Overview

Revenues of the Ceramics Business decreased by 2.2 per cent on standalone basis from 5120 million to 5007 million. The profitability of Ceramic Business increased owing to higher volume and selective price increase.

Industrial Ceramics

Metallized Cylinders, Engineered Ceramics and Wear Materials Business focused on servicing and retaining key customers during the lockdown and post lockdown period by catering to the changing demand patterns in an agile manner. Renewed marketing efforts in targeting newer markets and partnering with global customers to garner long term sustainable business has helped in making forays into new geographies and applications. Selective price increases were undertaken for majority of the products to mitigate cost push. Significant efforts in converting conventional wear resistant materials to Advanced Ceramic and Rubberised Ceramic Composite Wear Resistant Materials yielded higher business volumes in repair and maintenance segment of domestic sector in Steel, Mineral Processing and Cement Industry. The Business strengthened its position in Japanese markets by winning key long term project orders for supply of Ceramic lined bend assemblies.


Notwithstanding the difficult operating conditions, the Refractory Business exhibited resilience and ended the year with the same top line as previous year despite the temporary suspension of operations due to lockdown in Q1 of FY 2020-21. This indicates significant growth during the balance three quarters of the year. The end customer segments like Cement, Iron and Steel, Carbon black have deferred their planned capital expenditure projects which has impacted the Refractory project orders. However, the Business had identified alternate business opportunities to ensure that the Business growth objectives are met.

Anti-Corrosive and Composites

Anti-corrosive Business performed well during the year with market share gain in Carbon bricks for the Phosphoric acid industry and Poly concrete cells. Composites Business has registered a decline in growth in the windmill industry as projects have been deferred. Composites Business has developed few customer specific products like structural components for defence applications, Construction Rebar, which is expected to bring growth in the coming years.

Manufacturing Industrial Ceramics

In the Metallized Cylinder space, as stated earlier, further capacity expansion, through the addition of a Continuous Metallization furnace was initiated during the year. In addition, a project on Smart

Manufacturing has been initiated during the year. With this capacity addition, the Business is now a leading global player in Metallized Cylinders, Refractories, Anticorrosive and Composites Business and has obtained "TPM Excellence Award" under category A, from JIPM Japan.

Due to pandemic restrictions, the TPM assessments were conducted through Virtual online mode, and the assessors could appreciate the operational efficiency and maintenance excellence which yielded the results in line with growth strategy.

Key Financial Summary

Particulars Standalone Consolidated
2020-21 2019-20 Change (%) 2020-21 2019-20 Change (%)
Revenue 5007 5120 (2) 6272 6289 (0)
Segment results (PBIT) 1056 1001 6 1359 1317 3
Capital employed 3484 3159 10 4619 4160 11
Share to total revenue of CUMl (%) (without eliminations) 30 32 24 24
Share to segment results (PBIT) of CUMI(%) 41 42 34 39


Business Profile

The Mineral Business of the Company spans India, Russia and South Africa with eight manufacturing facilities covering product groups - Fused Alumina (comprising Brown and its variants and White Fused Alumina), Silicon Carbide (crude, macro and fine), and Alumina Zirconia. The Company also manufactures a range of ‘specialties like Semi Friable Alumina, Surface and thermally treated grains, Solgel derived Alumina called as Azure S, Specialty Alumina and Ceramic fine powders for niche markets. To enhance its operational competencies, the Business operates its own Bauxite and sand mines and a 12 MW Hydel power plant to insulate it from fluctuations in power tariffs. The Business focusses on aggressive growth in the domestic and export market while catering to the requirements from internal customers. With a diversified product portfolio, the Electrominerals Business provides customers with application specific products and solutions, aimed at attaining improved product performance, value and profitability. For this, the Business ensures speedy execution of projects, enhanced asset utilisation and undertakes joint product development programs with customers. Business also spearheads its Research and Development through a DSIR approved research facility located at Kochi.

The Business continues to pursue its focus on new and emerging areas of opportunities like Graphene, battery materials and related areas through tie-ups for technology and by commissioning pilot scale plants. The Graphene facility started functioning during the last year and the products are being adapted/functionalised for various applications. Key user industries for this Business are Abrasives, Refractories, Steel, Brake linings, Nuclear energy, Wooden Laminates, Friction composites, Diesel Particulate Filter, Semiconductor and others.

Industry Scenario

As in the case of other businesses, the year 2020-21 commenced with unprecedented challenges for the world and the business community alike, on account of the outbreak of COVID-19 and the consequent lockdown declared across nations. The first quarter of Business was really hit by the slowdown in the domestic/global economy, which in turn impacted the demand for minerals and materials. The Business has also undertaken austerity measures, to control the fixed costs, deferring of capital spending, holding back of new recruitments/replacement, improvement in efficiency, optimum sourcing of inputs etc. With the lifting of lockdown in many parts of the country and world, the Business started limping back to normalcy from end of Q2.

The Business has seen an ever-increasing demand for its minerals from Q2 onwards due to the revival of Auto and Steel sector. The increased focus of the Government in infrastructure spending, double-digit growth recorded by the domestic Auto segment and the revival of Steel industry has pushed the demand for Abrasives and Refractory products in the domestic market. While there was a growth in demand in the domestic segment, the response from the international market was not satisfactory, except for the spurt in demand noticed from isolated segments like Diesel Particulate Filters (DPF) and semi-conductors. The logistic issues on container availability and vessel schedules erupted in the later part of Q3 adding to the challenges and complexities of international trade and the Electrominerals Business.

Improvements in the fusion process has helped the Business to address the additional demand for WFA from Refractory markets. The fine powder business volumes have seen a revival on account of the increased off take of material by key end users, while the demand from semiconductors continued to be a stable support. The Business has also seen some spurt in demand for Ceramic grains from domestic and Chinese Abrasives customers. The commercial launch of new high performing Marlin grade Alumina Zirconia grain for Coated Abrasives application marks another positive note for the Business during a challenging year. The transformational products like Graphene is evolving with different variants and the Business has come out with three variants for commercial applications.

Sales Overview

The Electrominerals Business on a standalone basis recorded revenue of

4396 million compared to 4109 million in the previous year.

The growth in the domestic Business can be attributed to the revival of domestic Abrasives and Refractory customers, who are the biggest consumers of Electrominerals.

Business has seen a significant growth in White Fused Alumina Business, mainly due to the better performance of user industries like Steel during last year. Brown fused Alumina business was affected marginally due to shortage of availability of key raw material Abrasive grade Bauxite. The fine powder business has shown an improved performance due to higher offtake by user industries like in Diesel Particulate Filters and Semi-Conductor application. The demand for other micro powders especially from laminates has helped the Business marginally.

Global players looking to reduce sourcing dependence on China can present opportunities for the Minerals Business.

The Russian subsidiary ran at near full capacity. Higher demand for Refractory grade materials aided the growth.


Manufacturing strategies focused mainly on improving efficiencies through TPM initiatives and value creation through grain treatments. Continued focus on innovation, TPM measures and fixed cost enabled the Business to be competitive and efficient in bettering the performance. The focused Joint Development Programs in selected areas with customers brought faster scaling up and co-solutions.

The Business has established and scaled up its new synthetic Alumina variant ABV+ as a replacement for ABV and by improving the process further, targets to replace the Bauxite-based Brown Fused Alumina. This helped the Business in augmenting the production and sales volume of Alumina from the new facilities, while satisfying the additional demand from Abrasives Business of the Company.

The year saw highest volatility in the availability and price of critical raw materials like Bauxite, Quartz and Raw Petroleum Coke (RPC) in international and domestic market. The strategy to source Alumina internationally has helped the Business to insulate from higher prices. Foskor Zirconia which is into production of Monoclinic Zirconia and Calcia Stabilised Zirconia was also affected due to volatile input pricing as well as the ill effects of the pandemic. However better volumes of low radioactive products for the Nuclear industry and for the Steel industry shored up volumes resulting in a better performance compared to the previous year.

The Business has successfully produced Graphene from its new facility and established three variants for commercial applications. The Business has set up a pilot scale facility for Graphite Synthesis and also has set up a pilot facility for development of High Purity Silicon Carbide. The Business continued in its journey of introducing application specific product variants.

Key Financial Summary

Particulars Standalone Consolidated
2020-21 2019-20 Change (%) 2020-21 2019-20 Change (%)
Revenue 4396 4109 7 10644 10258 4
Segment results (PBIT) 317 217 46 1359 1042 31
Capital employed 2014 2575 (22) 5760 5656 2
Share to total revenue of CUMI (%)(without eliminations) 27 25 41 40
Share to segment results (PBIT) of CUMI (%) 12 9 34 31


During the year, the Company generated 2711 million cash surplus from its operations on a standalone basis.All debts have been serviced on time. The Companys long and short term borrowings as on 31st March 2021 stands Nil. The capital expenditure program of

595 million was financed from internal accruals.

The Company continued to have a healthy cash generation during the year, due to prudent capital expenditure and efficient working capital management. The liquid surplus has been parked in fixed deposits with banks. The Company continues to be debt free. On similar lines, the debt at a consolidated level has come down to 430.2 million.The cash and cash equivalent level (net of borrowings) at a consolidated level stands at 6441 million including deposits with tenure exceeding 3 months. The debt equity ratio for the Company is Nil at a standalone level and 0.02 at a consolidated level. The Companys Balance Sheet remains robust and it augurs well for the growth in the prevailing conditions.

The credit ratings of the Company, ‘A1+ for short-term borrowings and ‘AA+Stable for long-term borrowings were re-affirmed by CRISIL. Over the years, the Company has been resorting to a prudent mix of rupee and foreign currency borrowings to finance its operations and achieve reduction in financing cost. The Finance Cost at a standalone level is at 3 million compared to 4 million last year. The Company earned

100 million by investing surplus cash available for short term.

At a consolidated level, the finance cost has come down to 36 million from 63 million. The repayment of loans has helped in bringing down the finance cost. The capital expenditure program of 1064 million was financed majorly out of internal accruals.

With the Indian entity enjoying a significant natural hedge, a cautious approach was adopted to hedge the remaining exposures. The Company adopts prudent tax management policies.

There are no material changes and commitments, affecting the financial position of the Company which have occurred between 31st March 2021 and the date of this report.


The Company, its Subsidiaries, Joint Ventures and Associate in India adopted lnd AS with effect from 1st April 2016 pursuant to the Companies (Indian Accounting Standard) Rules, 2015 notified by Ministry of Corporate Affairs on 16th February 2015.


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 Internal Audit team evaluates the effectiveness and adequacy of internal controls, compliance with operating systems, policies and procedures of the Company and recommends improvements, if any. Significant audit observations and the corrective/preventive action taken or proposed to be taken by the process owners are presented to the Audit Committee. Periodic review of adherence to the agreed action plan is carried out. The scope of Internal Audit is annually determined by the Audit Committee considering the inputs from the Statutory Auditor and the Management. Capital and revenue expenditures are monitored and controlled with reference to approved budgets. Investment decisions are subject to detailed evaluation and formal approval according to schedule of authority in place. Periodical review of capital expenditure with reference to benefits forecasted is done. Physical verification of assets is also periodically undertaken.

The Audit Committee reviews the overall functioning of Internal Audit on a periodical basis. The Committee also discusses with the Auditors periodically on their views on the financial statements including the financial reporting system, compliance with accounting policies & procedures, adequacy and effectiveness of the Internal Control Systems in the Company.

During the year, the Board with the recommendation of the Audit Committee appointed M/s. Deloitte Touche Tohmatsu India LLP as Internal Auditors of the Company for the period from 1st July 2020 to 30th June 2021.


Internal Control is a process, effected by an entitys 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 of the Companies Act, 2013, the term ‘Internal Financial Controls (IFC) means the policies and procedures adopted by the Company for ensuring: (a) orderly and efficient conduct of its business including adherence to companys policies; (b) safeguarding of its assets;

(c) prevention and detection of frauds and errors;

(d) accuracy and completeness of the accounting records; and (e) timely preparation of reliable financial information.

The three key components of IFC followed by the Company are: i. Entity Level controls (ELC) that the Management relies on to establish the appropriate "tone at top" relative to financial reporting are - Code of Conduct, Enforcement of Delegation of Authority, Hiring and Retention practices, Whistle blower mechanism and other approved policies and procedures. ii. Process Level controls (PLC), to ensure that processes are predictable, stable and consistently operating at the targeted level of performance, with only a normal variation are classified into Manual or IT - Dependent or Automated Controls. They are also classified as Preventive or Detective. iii. General IT Controls to ensure appropriate functioning of IT applications and systems built by the 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; Backup and Recovery of data.

The adequacy of Internal Financial Controls is ensured by:

Documentation of the risks and controls associated with the major processes;

Validation and classification of existing controls to mitigate risks;

Identification of improvements and upgrades to the controls;

Improving the effectiveness of controls on residuary risks through data analytics;

Performing testing of controls by the independent Internal Audit;

Implementation of sustainable solutions to Audit observations.

The Audit Committee periodically reviews Internal Financial Controls to ensure that they are adequate and operating effectively.


Coping up with the challenges posed by the unprecedented pandemic and enabling the workforce adapt to the new normal - both from a work and wellness perspective was the priority for the Human Resources function this year.

During the year, the Human Resources strategy was focused on balancing employee wellness, technology adaptation, and business continuity. From taking learning and development initiatives online to promoting a sense of togetherness, every effort was made to help employees feel connected even during the unprecedented crisis. A special communication channel was created to keep employees updated on heath protocols - both international and national guidelines. Communication channels were created for continuous dialoguing with employees to reduce anxiety, stress and preserve their mental wellness even during a ‘locked down economy.

Combating COVID-19

In March 2020, as the COVID-19 pandemic spread to India, actions were taken to create employee awareness on health and safety. Across business units, COVID-19 communication and awareness sessions were held to sensitise employees on the importance of social distancing norms, sanitisation, hand wash, and personal protective equipment. Protocols on visitor/vendor management, meetings, travel etc., were drawn up and communicated. These protocols underwent weekly reviews in line with the changing statutory guidelines. With the lockdown announced, a swift transition to work from home was initiated and implemented. Communication platforms like MS Teams were adopted across the organisation to ensure teams were connected always.

A C-Safe app was created for employees to voluntarily declare their health status as a sign-in process. It was also a way to help identify employees with symptoms and implement preventive measures proactively.

The impact of the pandemic and the first lockdown made it vital to have a contingency plan in place for a prolonged lockdown. In line with the evolving business realities, Business Continuity Planning and Scenario planning were undertaken which continue to be reviewed. A dedicated quarantine centre was set up to handle the sudden spurt of infections at plant locations. Employees who were recommended home quarantine were able to use the quarantine centre and this reduced their stress levels and enabled speedy recovery.

Preventive and other steps taken included steps taken included mass testing in infection-prone areas, special COVID leave policies, counselling facility for employees and their family members to ensure mental wellness.

Employee Safety and Health

Safety remains the key area of focus for the Company. Behaviour-based training both in-person as well as virtually were conducted to promote a culture of safe working. The behaviour-based safety model has been piloted in select units of Electrominerals, Industrial Ceramics and Abrasives Business. Once the lockdown was relaxed, the annual medical check-up was reinstated to track employees health and fitness. In addition to the routine safety training, specific training and webinars were conducted to sensitise employees on the pandemic protocols. While the safety precautions mandated to combat the spread of the pandemic, the routine and normal safety protocols in operating the plants were also ensured.

The Internal Complaints Committee, set up under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, organised awareness campaigns across units. While the e-learning modules improved employees awareness level, mime acts under various themes were conducted to increase awareness for the workforce. Poster and mailer campaigns to increase awareness were also carried out. During the year, no referrals or complaints were received under the policy for Prevention of Sexual Harassment.

Capability Building

The learning and development function needed a rejig considering the new way of operating businesses amidst a lockdown situation.

Functional and business requirements for management staff were identified, and access to online courses were given. Approximately 2500 (behavioural and functional) modules were completed during the lockdown period. The key learning programmes conducted during the year include:

Competency-based behaviour event interview session organised for sales leaders to strengthen the hiring process.

Focused sessions on data analytical tools like Power BI for HR teams.

Pilot programme on Sales Excellence.

LEAD (Leadership Education and Development) programme organised in association with a leading business school for Band 3 employees;

Employee Relation: weekly sessions from domain experts (external & internal) spread over 30 weeks; and

YOLO (Your Own Learning Opportunity) workshops for Management and Graduate Trainees to help identify their area of interest in learning.

The Performance Enhancement Process (PEP) piloted in the Abrasives Business during the previous year was deployed across other businesses in India. This has helped develop the goal setting and feedback capabilities of people across the Company. The Catalyst, a voluntary, self-directed mentoring programme where employees directly sign up for dialogues with mentors, continued its role in people development. During the year, 14 new mentors were added to the programme.

Platform for Accelerated Career Experience (PACE) - a new platform for cross-functional experiential learning was launched during the year. The platform is envisioned to provide employees with an opportunity to work on different projects of their choice. 26 new projects were launched on PACE this year. 49 ‘Career Sherpas were given an orientation on how to guide and mentor project aspirants. PACE has helped develop capability in different functional areas and improve employee engagement levels, especially of millennials.

Employee Engagement

The work from home policy continued even after the lockdown conditions were relaxed to enable employees who could perform their role and functions under remote working to work safely in their homes. Even at offices, the safety protocols were followed to those who opted to work from office/plant locations. With work from home continuing, employee engagement gained greater significance. The leadership team ensured regular communication through different channels to dialogue with employees, communicate updates and contingency plans. Communication channels included regular communication through mailers, town halls, MDs communication "Thinking Aloud", and "Ask the President" sessions with millennials. Virtual Town Halls were also organised covering employees across the globe. Keeping these communication channels activated has helped foster a sense of connection and the leadership teams to get employees pulse and plan resources accordingly. Employees who had taken extraordinary efforts to ensure business continuity during the lockdown were honoured as ‘Unsung Heroes in recognition for their efforts. To end the year on a positive note, an Appreciation Week was organised to promote the culture of appreciation and to encourage individuals and teams to recognise the good work done during a challenging year through the Rewards and Recognition portal.

HR Excellence

CUMI participated in the 11th CII HR Excellence Assessment during the year and was awarded "Significant Achievement in HR Excellence". The assessment included a review of our HR processes enabling benchmarking with other best in class companies. The Assessment Team comprised 4 eminent professionals who carried out nearly 250 man-hours of virtual and on-site assessment. CUMI was one among the 12 companies awarded "Significant Achievement in HR Excellence". This recognition re-affirms the Companys constant endeavour towards HR Excellence and the exercise provided an opportunity to align our processes to the best in class.

Employee Relations

Cordial relationships have been maintained with employees and unions despite the disruptions and volatile conditions caused by the pandemic, and the wage settlements have brought in greater flexibility in operations, adherence to TPM practices ensuring high standards of productivity.

Talent Acquisition & Talent Management

The focus was to continue creating a talent pipeline in the middle management level by hiring Graduate and Management trainees. Lateral hires with greater emphasis on referrals, job boards and internal transfers lowered sourcing costs. The Talent Management process was reviewed and revised during the year. The process based on Aspiration, Ability and Engagement identified 83 High potential talents. These talents undertook a 360-degree assessment. Each individuals development plan is being formed based on the assessment report.

Cost focus

The pandemic and lockdown brought in new challenges on Fixed Cost. Through a structured approach, the year saw a significant reduction of the same with focus on processes such as:

Zero-based budgeting;

Higher focus on automation;

Improving the productivity through Six Sigma and identification of non-value added processes through tools like value stream mapping.


The year 2020-21 despite being challenging from an operational perspective continued to be a year of recognition for the Company in varied fields.

The Companys Annual Report for the FY 2018-19 was selected by the South Asian Federation of Accountants of SAARC Region and conferred the Certificate of Merit in the Manufacturing Sector category. This is the 2nd consecutive year of recognition by this body of Accountants from SAARC Region, thus reinforcing our transparency, excellence in financial reporting and governance standards.

The Companys HR Processes won the recognition of ‘Significant Contribution to HR Excellence from Confederation of Indian Industry (CII). This recognition which benchmarks Human Resource practices with best-in-class companies underlines the robustness of our processes and commitment to people wellbeing. The Companys Refractories Business at Serkadu, Tamil Nadu received the ‘TPM Excellence Award in Category A in recognition of its achievement towards Manufacturing Excellence. The Companys plant in Edapally, Kerala won the CII TPM Strong Commitment to TPM Excellence for its TPM Excellence in manufacturing. Our commitment to safety has also been fostered through recognitions at different units. The Companys Maniyar hydel power plant won the "Sreshta Suraksha Puraskar" and the Cochin SEZ plant won the "Suraksha Puraskar" from Factories & Boilers Department, Kerala. The Companys Maramalai Nagar plant secured a 4 star from CII Southern Region for its commitment to EHS practices.

The Companys team were declared winners in IQ Fest organized by IIM Trichy under Quality Improvement category. The Industrial Ceramics Business won "Gold" awards in Kaizen under Champions Trophy and Challenger trophy category. The Industrial Ceramics Team also won "Gold" in Makigami Competition under Champions Trophy category from CII.

Our efforts on Innovation and Quality improvements won recognition for Kaizen Award and Excellence Award for Quality Control Concept category from CII. Our Team also won "Par Excellence" Award in National Convention for Quality Concepts competition held at Varanasi, Uttar Pradesh.

The total staff on rolls of the Company (including Joint Ventures and Subsidiaries) as of 31st March 2021 was 5256 with 3488 employees in India (previous year 5172 with 3416 employees in India).


The Russian subsidiary, recorded sales of RUB 6625 million against RUB 5994 million during the previous year. Growth was driven by the SiC and Refractories Business. Volumes remained encouraging throughout the year and there is a clear trend of global consumers looking to de-risk, or reduce exposure to China. Foskor Zirconia, South Africa, recorded sales of ZAR 293 million, compared to ZAR 213 million in last year. The entitys loss reduced to ZAR 23 million as against ZAR 43 million in last year. Raw Material scarcity and soft realisations impacted the margins of the subsidiary.

Considering that its liabilities have exceeded its assets, the subsidiarys Auditors have in their report made an observation on material uncertainty relating to going concern. Hence, the Auditors of the Company have reproduced the same in their Consolidated Audit Report without modifying their opinion. Considering the challenging business conditions in South Africa, the Board of Foskor Zirconia (Pty) Limited is reviewing the business for initiating suitable measures in due course. CUMI Australia was impacted by the trade tensions between China and Australia. The availability of containers also impacted order fulfilment. Sales declined to AUD 18.8 million from AUD 21.8 million. The de-growth in the business is due to COVID challenges and the logistics problem due to port congestion. Profit after tax declined to AUD 2.0 million from AUD 2.7 million. Sterling Abrasives reported a sales of 870 million, compared to the last years sales of 799 million. Profit after tax increased to 122 million from 80 million. Higher agri acreage and the reception of certain new products among end users helped growth.

CUMI Abrasives and Ceramics Company, the subsidiary based in China, had a sales of CNY 19 million for the year, compared to CNY 18 million last year.

The sales of CUMI America during the year was at USD 9 million as against USD 10 million last year. The marginal reduction is due to COVID impact. The Profit after Tax for year was USD 0.1 million as against USD 0.3 million. For CUMI Middle East, sales increased from USD 2.7 million to USD 3.1 million. Profit for the year was at USD 0.10 million against a profit of USD 0.008 million during the previous year.

Southern Energy Development Corporation Limited (SEDCO), the gas based power generation subsidiary recorded a sale of 229 million as against 237 million last year. The profit after tax grew to 80 million from 55 million majorly due to reduction in gas price.

Net Access India, which provides IT facilities management and other allied services decreased its sales to 410 million from 471 million. The profit after tax decreased to 20.6 million from 27.2 million. CUMI International Limited, Cyprus recorded a revenue of USD 4.43 million representing mainly dividend income as against last years income of USD 5.24 million.

CUMI Europe s.r.o is not in operation.

During the year, voluntary de-registration of Thukela Refractories Isithebe Pty Limited, South Africa (TRI), the Companys wholly owned step down subsidiary (subsidiary of M/s.CUMI International Limited, Cyprus) which had ceased operations was approved by the Companies and Intellectual Property Commission (CIPC), South Africa. By virtue of the finalisation of the de-registration, Thukela Refractories Isithebe Pty Limited, South Africa has ceased to be a subsidiary of CUMI International Limited and accordingly a step down subsidiary of the Company.

Performance of Associate and Joint Ventures are given in note no. 6A and 6B respectively of the consolidated financials. Consolidated Financial Statements (incorporating the financial results of the Company, its Subsidiaries and Associate/Joint Venture) have been provided in the Annual Report. Other than the Associate/Joint Venture companies referred in the Annual Report, there are no Associate/Joint Venture within the meaning of Section 2(6) of the Companies Act, 2013. A statement containing the key financial highlights of each subsidiary, based on the financial statements prepared by them under applicable local regulations is also provided in the Annual Report.


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

Particulars 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16
Generation of Gross Value added (excludes exceptional items (net)) 5153 5044 5072 4550 3959 3789
Breakup on Application of Value added
Payment to Employees and Directors 1982 1979 1839 1760 1549 1429
Payment to Shareholders (on payment basis) 284 757 520 330 189 377
Payment to Government 638 709 946 732 543 564
Payment to Lender - - - - 33 64
Towards replacement and expansion 2249 1599 1768 1728 1645 1355
5153 5044 5072 4550 3959 3789


- Gross value added is Revenue Less Expenditure (excluding depreciation + expenditure on Employees & Directors service + Long term interest)

- Payment to Government is Current tax+ Dividend distribution tax

- Towards replacement and expansion is Retained earnings + Depreciation + Deferred tax


The Company has constituted a Risk Management Committee 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 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 Companys competitive advantage. This also defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risk trends, exposure and potential impact analysis at a Company level as also separately for the business segments. The Company also has developed a structured risk management policy encompassing the risk management objectives, principles, process, responsibility for implementation, maintenance of risk registers, review of risk movements, risk reporting framework etc. Risk management also forms an integral part of the Companys business plan.

The Company operates across various technology platforms and product verticals built over the years. Relative advantages and disadvantages of such technologies are studied and advances are tracked. Any new technology may impact the performance of the Company in the long run. The Company seeks to address these technology gaps through continuous benchmarking of the existing manufacturing processes with developments in the industry and in this connection has made arrangements with technical research institutions and technology consultants. The Company has been making investments in the next level of Industry 4.0 in select modules. Industry 4.0 is the current trend of automation and data exchange in manufacturing technologies. The requirements of power for the Company is driven by the requirements of the Electrominerals Business. The power requirement is partly met out of own generation from the Maniyar Hydroelectric plant. The entire production of power from Maniyar is utilised by the Electrominerals Business. Apart from this, electricity is generated at the Companys subsidiary SEDCO and consumed at all its locations in Tamil Nadu. The rest of the requirement of electricity is managed by purchase from respective State Electricity Boards. Utilisation of power remains one of the key factors which can impact the profitability either favourably or adversely based on the changes in the power cost. As part of its strategy to build competitiveness, the Company continues to look for opportunities to add to its captive power generation. In Russia, the Silicon Carbide operations which also consumes large quantities of power sources it from local utility.

The requirement of fuel is driven by the high temperature processes in the Abrasives and Ceramics Businesses. Any increase in the cost of fuel impacts the profitability. Hence, the Company has put in place plans and implement energy conservation measures to improve its competitiveness.

The Company uses various raw materials such as Bauxite, Calcined Alumina, Zirconia sand, Raw Pet coke, Quartz and Graphite which have high price volatility. This is addressed through annual contracts to cover volatility due to price fluctuations and also mitigated through programs to identify alternative sources.

The Company deals with multiple currencies and is thus exposed to exchange risk on account of adverse currency movements. Foreign Exchange risk in foreign denominated loans, imports and exports are mitigated by adopting a country-based forex policy, periodic monitoring and use of hedging instruments. Efforts are being taken to manage both exports and imports to ensure that at a Company level, there is a natural hedging mechanism.

As a risk mitigation measure to address cyber security threat, the Company has undertaken a penetration assessment testing of its internet facing applications during the year. The security threat awareness is published and promoted periodically to create awareness among stakeholders on handling the risk proactively. The security process is included as an important step in the IT strategy of the Company. There is considerable amount of work undertaken on scoping of information specific to the role defined to prevent any data or information leak. During the year, considering that work from home/remote working has become the new normal, data security and protection against the risk of phishing, malware attacks was given priority. Awareness mailers were disseminated across to mitigate risk of such attacks and requisite infrastructure upgrade to support the remote working conditions in a secured manner was initiated.

The Companys input materials are not commoditised and does not warrant for any specific hedging to be undertaken. With respect to output materials, adverse impact of changes in commodity prices on user industries could impact the sales which are mitigated by development of alternate products, establishing new range of applications etc. as detailed above. The other mitigation measures for dealing with increase in fuel costs, non-availability of raw materials etc. have been dealt separately in above paragraphs.

The risks associated with COVID-19 has been dealt with in the section below:


The outbreak of the COVID-19 pandemic developed into a global crisis in the last quarter of the FY 2019-20 forcing countries globally to impose lockdown conditions on all activities impacting the economy at large. At the onset of the pandemic spread in India, the priority for the Company was the safety and health of all its employees and other stakeholders with minimal disruption to operations. In adherence to the Government advisories and considering the well-being of our stakeholders, all the plants of the Company were shut down in a safe manner following due protocols. However, considering that most of our plants have operations involving continuous processes at high temperature, as a safeguard measure, minimal essential staff required for safety and maintenance were deployed in such locations after undertaking due health and hygiene precautions.

For a Company with a legacy of operating on a model of working out of plants and offices over 6 decades, a seamless transition to remote working was made swiftly, by putting in place a policy framework for operating from home with well-established protocols. The robust IT platform of the Company enabled significant personnel to continue to perform their services remotely in a safe and secured manner.

Some of the plants especially those located in green zones resumed operations quickly by mid-April after ensuring receipt of requisite permissions from the local authorities and in adherence to the standard operating procedures laid down by the Ministry of Home Affairs from time to time. This adherence was ensured not only from a regulatory compliance perspective but by keeping in mind the well-being of our employees, customers and other stakeholders. All plants of the

Company resumed operations by May 2020 with permitted workforce and necessary steps were taken by the Company to meet the customer demand globally reinforcing their confidence in the Company amidst these unprecedented and challenging conditions.

The COVID-19 pandemic has caused unprecedented disruption in business and operations models globally. This has cascading uncertainties making market and business conditions volatile. While the overall business scenario in Q1 and early Q2 of FY 2020-21 was on a slowdown, the ease of restrictions subsequently resulted in recovery across major segments in Q3 and Q4 of FY 2020-21. The Company has been able to reposition itself in Q3 through efficient liquidity management supported by diversified global operations, reliable supply chain partners, passionate and dedicated employees supported by the true grit built over 67 years. With markets slowly opening up and restoring to normalcy, the Company adapted to the new normal conditions and the last quarters of the year saw an uptick in performance. However, the

FY 2021-22 is witnessing the second wave of the pandemic which is likely to cause disruption with some states announcing partial lockdowns to curb the spread of the pandemic which is at a much faster pace than the first wave last year. Vaccination will be a key element in managing the second wave as Governments seek to balance virus management against maintaining economic activity. However, having navigated the unprecedented volatile situation last year and on the back of the strength of its continuity plans, the Company believes that it will be able to steer through these recurring challenges for a sustainable growth in future.

With respect to material changes or commitments impacting the financial position of the Company in respect of events occurring after end of the year but before the date of this report, the Board is of the opinion that no material adjustments in the accounting entries or estimates, accounting policies are relevant to the financial statements for the year ended 31st March 2021.

The key risks identified owing to COVID-19 which could impact the future performance of the Company are given below:

Risk Impact Mitigation plan
Business disruption and uncertainty Operations of the Company could be impacted due to the second wave of the continuing pandemic situation with restrictions on manpower, logistical hindrances or delays, low customer demands etc. which could impact the growth and profitability. Rigorous review of the business plan as well as contingency plan based on scenario planning was undertaken for a three-year period and is closely monitored by the Business Group Management Committee (BGMC) duly supported by the operating teams with timely and relevant information. Continuous engagement with customers and updating them on the status of operations and assuring them of delivery and performance.
Prudent cash management and efficient working capital management with sharp focus on collections and payments, cost reduction and management.
Based on the robust safety measures deployed as well as prevailing demand position, wherever permissible, approvals relaxing the manpower requirements to be obtained in case stricter lockdown conditions are imposed. Employees of the Company especially the workforce are being sensitised to take the vaccination as per the eligibility announced by the Government. Assistance in the form of vaccination camps, tie-ups with hospitals etc. are in progress to ensure the employees are vaccinated.
Exploring new opportunities in emerging sectors like food and pharma post COVID-19. Technological and digital advancement proposals to keep up with the transformation in the operations model and product offerings.
Employee Risk Growth momentum could be lowered due to any employee or his/her family being exposed to the infection, emotional stress and impact on their wellbeing during quarantine or lockdown conditions, employees not being able to adapt to remote working or not being able to carry out their functions or operations where remote working is not feasible owing to logistical, contractual or security issues, non -availability of migrant labour. Right from the onset of the pandemic, dedicated clear communication and awareness programs to sensitise the employees on the cause and effect of the disease is being continuously conducted. Dedicated periodic calls to enquire about the health status of the employee and his or her family including neighbourhood are being made.
Dedicated Task forces for taking concerted and quick decision on matters relating to COVID-19 have been set up under the supervision of Head-HR.
In certain factories, preliminary health checkups are being undertaken before a worker resumes duty. Continuous guidance on social distancing norms and hygiene given. Contractual, emotional and operational guidance on remote working being given periodically.
A C-Safe app has been created for employees to voluntarily declare their health status as a sign-in process.
This helps in tracking the health status of the employees besides the annual health check-ups resumed during the year.
Special communication channel has been set up to keep employees updated on health protocols stated in both international and national guidelines.
Separate helplines 24*7 to counsel employees who require customised guidance or information has been set up.
Online learning and development programmes rolled out to keep employees engaged and up skilled during the lockdown.
Automation of routine and repeated processes to minimise the dependency on manual processes being explored continuously.
Quarantine centre to handle any sudden spurt of infections at the Companys plant location. Employees who are recommended home quarantine can use the quarantine centre.
With remote working continuing in phases since March 2020, employees have adapted to the new normal and the necessary IT infrastructure is being upgraded.
Supply chain risk Non-availability of raw materials and services to continue operations. Regular coordination with key suppliers as well as identification of alternate suppliers for expediting the services/materials critical for operations.
Regulatory or legal risk Non-adherence to the Government Advisories, Standard Operating Procedures etc., exposing the Company to legal and compliance risks including those arising out of force majeure obligations. Closely monitoring the information on government circulars, notifications, advisories and instantly disseminating the same to the operating team for implementation as well as monitoring adherence through robust compliance management system.
Cyber security risk As more digital our operations become, we are prone to cyber threats causing havoc in operations and reputation. Robust IT security policy, implementation with a periodic review mechanism.

With the Companys strong track record and value focus, we expect the competitiveness to increase in future and with ongoing risk assessment and minimisation efforts, we anticipate to suitably minimise the impact. However, the forecast for growth depends on the pandemic being brought under control.


As stated in the Economic Overview section, India is expected to grow at low double digits in FY 2022. The greatest uncertainty looming at the moment is the trajectory of the second wave of the pandemic in India. While businesses have corpuses to invest, when, and how much they will invest remains unclear. Once investment climate improves, the performance of core sectors could improve. The performance of Construction and Auto, the two major end users of Abrasives will depend on the level of discretionary spending by consumers in the economy, which in turn will depend on the course of the second wave. Notwithstanding the same, the Company continues to explore and identify alternate and new opportunities for its various product segments across all its businesses in sectors including Healthcare, Digital, Defence etc. to leverage growth during these unprecedented times.


The Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 and no amount of principal or interest was outstanding as on the Balance Sheet date.


The particulars of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 are given below: ( million)

Description As on 31.03.2020 Movement (Net of Deletions) As on 31.03.2021
Loans given by the Company - - -
Corporate guarantee given by the Company 550.76 (301.76) 249.00
Investments made by the 2458.42 48.89* 2507.31


* Deletion of 0.62 million on account of divestment of marginal stake investments in Wendt (India) Limited to meet minimum public shareholding requirement and balance is due to fair valuation of investment.

As at 31st March 2021, there were no investments made in liquid funds.


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.

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

The details of transactions proposed to be entered into 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 into 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.

All transactions with Related Parties entered during the financial year were in the ordinary course of business and on an arms length basis and hence not requiring particulars 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 Companys 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 into with Related Parties during the year to be disclosed under Sections

188(1) and 134(3)(h) of the Companies Act, 2013 in Form AOC- 2. The form is enclosed as Annexure E.

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

The Companys policy on dealing with Related Parties as approved by the Board is available on the Companys website in the following link 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.


The Murugappa Group is known for its tradition of philanthropy and community service. The Groups philosophy is to reach out to the community by establishing service oriented philanthropic institutions in the field of education and healthcare as the core focus areas. The Company being a constituent of the Group has been upholding this tradition by earmarking a part of its income for carrying out its social responsibilities.

The Company continues to engage in Corporate Social Responsibility (CSR) activities directly as well as through implementation agencies in line with its stated CSR policy. The Company set up the CUMI Centre for Skill Development (CCSD) in the year 2012 at Hosur, to build a skill bank of a technically competent and industry ready work force from the less privileged sections of the society. During the FY 2015-16, the Company replicated this model in Edapally, Cochin. During the FY 2018-19, the Company along with its Joint Venture - Murugappa Morgan Thermal Ceramics Limited has replicated this model in Ranipet, Tamil Nadu. CCSD provides specialised training based on National Council on Vocational Training syllabus for the rural youth drawn from socially and underprivileged sections of the society. Three year training is imparted with a stipendiary payment and free boarding facilities, thus enabling the enrolled students to earn while they learn. The job-oriented skill training enhances their employability and aids in uplifting their socio-economic status. The technically trained students can be employed by any industrial entity once they complete the training programme. The Company continues to harness the potential of CCSD centres so far established. The Company takes pride in informing that few students have earned accolades at national/regional level for their par excellence performance in academic and technical areas. During the previous year, to yield benefits to the student community, as a part of its expansion plan, a state-of-the-art building for imparting training to students of CCSD was inaugurated. During lockdown, training sessions could not be conducted, but the Centre was able to keep students engaged through online sessions. In addition to the CCSD, the Company has also been contributing to the cause of health and education by making grants to AMM Foundation. Further, during the year, grants were also made to Shri A M M Murugappa Chettiar Research Centre (MCRC) for Research and Development on Biological waste water treatment using Microbials, enzymes etc., for rural areas. AMM Foundation, an autonomous charitable trust, is engaged in philanthropic activities in the field of education and healthcare since 1953. The Companys focus areas for grants to implementing agencies continued to be in the education and health sector. The grant to AMM Foundation for the education sector was through contributions to Vellayan Chettiar Higher Secondary School, Tiruvottiyur (VCHSS) - which has been making a difference in the field of education for the past 50 years. The school runs with the vision - To provide Quality Education with good virtues, for the underprivileged and marginalised communities around Tiruvottiyur. Further, the Company has provided the students of the VCHSS a playground (football ground) developed with adequate facilities for excelling in sports and set up a new basketball court for the students to play. Owing to the COVID-19 situation the spend for the school during the year was less than the previous years.

With respect to healthcare, a grant to AMM foundation was made for establishing and operating a mobile health van at Jhabera, Uttarakhand in order to provide free primary healthcare at doorstep, diagnosis of diseases, if any through the mobile health lab, providing treatment through free medicines and creating awareness on the importance of healthcare in the nearby communities. Further, a grant to AMM Foundation was made for purchase of Magnetic Resonance Imaging scanning equipment at Sir Ivan Stedford Hospital. Sir Ivan Stedford Hospital, a multi-speciality hospital set up in 1966 located in Ambattur, Chennai aims at providing quality medical care through latest technology to cater to the medical needs of the poor and needy sections of the society at an affordable cost.

MCRC is a non-governmental voluntary research organisation working on devices and technologies for rural application of eco-friendly technologies to combat pollution. MCRC is recognised by Department of Scientific and Industrial Research, Government of India as a Scientific and Industrial Research Organisation to conduct research in various areas and is approved by the University of Madras, Chennai to offer Ph.D. programmes in the areas of Energy, Bioenergy and Biomass for rural development.

During the year, a grant was made to Hosur Industrial Association towards construction of building for a Skill Development Centre. Hosur Industrial Association was set up in the year 1981 with an aim to protect and promote the interests of industrial establishments located in and around Hosur. Considering the increasing unemployment due to lack of requisite skill and to bridge the gap between the skill requirement versus the actual skills available, a Skill Development Centre is being built by HIA in Hosur to promote education in the field of technical trades as well as commercial education like ERP, use of computers etc. Since mid of March 2020, the novel Corona Virus pandemic 2019 (COVID-19) has posed an unparalleled and enormous challenge to the nation and world at large. Having been declared a ‘pandemic by the World Health Organisation, it caused massive disruption not only to business operations but also to normal life during most of the FY 2020-21. Hence, in order to support the efforts of the Governments (Centre & State) to combat the ongoing crisis and also aid the Government to deal with emergency or distress situation posed by COVID-19, the Company made a contribution of 20 million to the PM Cares Fund in April 2020. During the times of need, the Companys canteens at various factory locations functioned as community kitchens to serve the needy during the nationwide lockdown. At various locations where the Company is situated, contributions to combat or contain the spread of the disease were made mostly in the form of supplies and materials. Besides the above, the Company also actively pursued local community assistance programmes in and around its plant and office locations anchored by its employees. Owing to the lockdown situations and schools being closed, the Company was unable to conduct its other CSR related activities such as sessions on Child rights & parenting, terrace farming for women, importance of waste management & environment sanitation, "The Adolescent Girl Child Program" targeted at imparting education on Good Touch, Bad Touch and menstrual hygiene for adolescent girls of villages in and around Vellore district and other similar programmes.

The Companys CSR policy is available on the Companys website at the following link The Annual report on the CSR activities in the prescribed format is annexed hereto as Annexure B and forms part of this Report. As at 31st March 2021, the CSR spend made directly and through implementing agencies has been utilised in full and hence the Company is in compliance with the provisions of Section 135 of the Act and the rules referred therein.


The Companys ethical and responsible behaviour complements its corporate culture. Being a public listed company, the Company recognises that its accountability is not limited only to its shareholders from a financial perspective but also to the larger society in which it operates. During 2016-17, consequent to the mandatory reporting of its business responsibility initiatives under the Listing Regulations, the Company had formulated a consolidated policy on Business Responsibility which lays down the broad principles guiding the Company in delivering its various responsibilities to its stakeholders. The policy is intended to ensure that the Company adopts responsible business practices in the interest of the social set up and the environment so that it contributes beyond financial and operational performance. A copy of the policy is available at and the Business Responsibility Report for the year ended 31st March 2021 in terms of Regulation 34(2) of the Listing Regulations is annexed to this Report as Annexure C.


Board of Directors and Key Managerial Personnel

As at 31st March 2021, the Board of the Company comprised seven Directors of which majority (five) are independent.

During the year, Mrs. Soundara Kumar was appointed as an Independent Director under Section 149 of the Companies Act, 2013 at the 66th Annual General Meeting by the shareholders for a term of five years commencing from 3rd August 2019.

Mr. M A M Arunachalam, Non-Executive Director resigned from the Board with effect from closing hours of 2nd February 2021. The

Board placed on record its appreciation for the services rendered by Mr. M A M Arunachalam during his tenure of office as a Director of the Company including as a member of the Stakeholders Relationship Committee.

Mr. M M Murugappan retires by rotation at the forthcoming Annual General Meeting and being eligible has offered himself for re-appointment. A proposal for his re-appointment is included in the Notice convening the 67th Annual General Meeting for consideration and approval by the shareholders.

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/re-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 Databank as required under the Companies Act, 2013 and the Rules referred therein. The Independent Directors are also required to take up an online proficiency self-assessment test within two years from the date of inclusion of their name in the Independent Directors databank with an exemption provided to Directors fulfilling the criteria prescribed under the Act and the Rules referred therein. While the requirement of completion of the online proficiency self-assessment test is exempt for few of the Companys Independent Directors, considering the two year time available from the date of inclusion of the name in the databank, the eligible Independent Directors would complete the assessment within the prescribed time. Considering the time available for the Independent Directors to complete the online proficiency test, the requirement for the Board to provide its opinion on the experience of the Independent Directors with specific reference to proficiency ascertained from passing the online proficiency self-assessment test does not arise.

During the year, the Board based on the recommendation of the Nomination and Remuneration Committee as well as the Audit Committee, appointed Mr. P Padmanabhan as the Chief Financial Officer with effect from 28th October 2020. As on date of this report, Mr. N Ananthaseshan, Managing Director, Mr. P Padmanabhan, Chief Financial Officer and Ms. Rekha Surendhiran,Company Secretary are the Key Managerial Personnel of the Company as per Section 203 of the Companies Act, 2013.

Board Meetings

During the year, seven Board Meetings were held, the details of which are given in the Corporate Governance 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 Boards 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 Managing Directors 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.

During the year, the Board evaluation process transitioned to a paperless mode with the automation of the process.

Policy on Appointment and 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 https://www.cumi-murugappa. com/policies-disclosure/.

Composition of Audit Committee

The Audit Committee of the Board comprises only Independent Directors. Mr. Sanjay Jayavarthanavelu is the Chairman and other members are Mr. Aroon Raman, Mr. Sujjain S Talwar and Mrs. Soundara Kumar.

During the year, five Audit Committee meetings were held, the details of which are provided in the Corporate Governance Report.

Statutory Auditors

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 31st July 2017, 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 63rd Annual General Meeting until the conclusion of the 68th Annual General Meeting subject to annual ratification by the shareholders at every AGM, if required under the relevant provisions of the Act at a remuneration to be decided by the Board based on the recommendation of the Audit Committee. However, as the Companies (Amendment) Act, 2017 has dispensed with the requirement of annual ratification of the Statutory Auditors appointment, there is no requirement to seek an annual ratification of their appointment this year.

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 31st March 2021 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. During the year under review, the Auditors have not reported any matter under Section 143(12) of the Companies Act, 2013 and hence there are no details to be disclosed under Section 134(3)(ca) of the Act.

Cost Auditors

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 categories like Organic and Inorganic chemicals, Electrical or Electronic machinery, Steel, Plastic and Polymers, Ores and Mineral products, other Machinery, Base Metals etc. 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. S Mahadevan & Co. (firm no. 000007), Cost Accountants, Chennai to audit the cost accounting records maintained by the Company under the said Rules for the FY 2020-21 on a remuneration of 4,50,000/-. Further, they have also been appointed by the Board to conduct the cost audit for the FY 2021-22 at the same remuneration.

The Companies Act, 2013 mandates that the remuneration payable to the Cost Auditor is ratified by the shareholders. Accordingly, a resolution seeking the shareholders ratification of the remuneration payable to the Cost Auditor for the FY 2021-22 is included in the Notice convening the 67th Annual General Meeting.

Secretarial Audit

M/s. R Sridharan & Associates, Practising Company Secretaries, Chennai was appointed as the Secretarial Auditor to undertake the Secretarial Audit of the Company for the FY 2020-21. The report of the Secretarial Auditor is annexed to and forms part of this Report (refer Annexure F). There are no qualifications, reservations, adverse remarks or disclaimers given by the Secretarial Auditor in the Report.

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 10 per cent of the consolidated income/net worth respectively of the Company and its Subsidiaries in the immediately preceding accounting year. Hence, there is no requirement for a Secretarial audit to be conducted for any of the Companys Subsidiaries in India.

Compliance Management

The compliance management system, KOMRISK tracks compliances across the various factories and offices of the Company. This tool has a comprehensive coverage of the various applicable laws including auto updation based on the regulatory changes from time to time.

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 Practising Company Secretary confirming compliance is annexed to and forms an integral part of this Report.

CEO/CFO Certificate

Mr. N Ananthaseshan, Managing Director and Mr. P Padmanabhan, Chief Financial Officer has 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 Regulations.


Pursuant to the provisions contained in 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 confirms that: in the preparation of the annual accounts, for the financial year ended 31st March 2021, applicable accounting standards have been followed and no material departures have been made from the same; the accounting policies mentioned in Note 3 of the Notes to the Financial Statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; 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 for preventing and detecting fraud and other irregularities; the annual accounts have been prepared on a going concern basis; that internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and operating effectively; proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.


The Annual Return in Form MGT-7 is available in www.cumi.


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


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 (refer Annexure D).


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.


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 (refer Annexure A).

Under the Companys Employee Stock Option Scheme 2007, no Option grants have been made since February 2012. The Employee Stock Option Plan 2016 (ESOP 2016) was implemented in February 2017 with the approval of the shareholders and currently governs the grant of Options to employees. No grants were made during the year under the ESOP Plan 2016. The disclosures with respect to Options granted under the ESOP 2007 and ESOP 2016 are contained in the Corporate Governance Report. Further, the disclosures relating to Stock Options as per Securities and Exchange Board of India (Share Based Employees Benefits) Regulations, 2014 read with the circular issued by SEBI on 16th June 2015 have been provided on the Companys website and is available in the link Both the ESOP Scheme 2007 and ESOP 2016 are in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014.


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 31st March 2021. There was no instance of onetime settlement with any Bank or Financial Institution.


The Board gratefully acknowledges the co-operation received from various stakeholders of the Company viz., customers, investors, channel partners, suppliers, government authorities, banks and other business associates during the year. The Board also places on record its sincere appreciation of all the employees of the Company for their commitment and continued contribution to the Company.

On behalf of the Board
Chennai M M Murugappan
April 28, 2021