MIRA INFORM REPORT

Report No. :	324115
Report Date :	25.05.2015

IDENTIFICATION DETAILS

Name :	CARBORUNDUM UNIVERSAL LIMITED
Registered Office :	Parry House, 43, Moore Street, Chennai – 600001, Tamilnadu
Tel. No.:	91-44-25306789/ 30006199
Country :	India
Financials (as on) :	31.03.2015
Date of Incorporation :	21.04.1954
Com. Reg. No.:	18-000318
Capital Investment / Paid-up Capital :	Rs. 188.200 Million
CIN No.: [Company Identification No.]	L29224TN1954PLC000318
IEC No.:	0488033471
TAN No.: [Tax Deduction & Collection Account No.]	Not Available
PAN No.: [Permanent Account No.]	AAACC2474P
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturer, Exporter, Importer and Seller of Abrasives, Ceramics (Industrial Ceramics, Refractories) and Electro minerals.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

A (67)

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

Maximum Credit Limit :	USD 290000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established company having fine track record. The company possesses a favourable financial profile marked by adequate networth base, comfortable capital structure and adequate debt protection metrics. Trade relations are fair. Business is active. Payment terms are reported as regular and as per commitments. In view of well diversified revenue stream, experienced promoters and leadership position in domestic market, the company can be considered good for business dealings at usual trade terms and conditions.

NOTES:

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

ECGC Country Risk Classification List – March 31, 2015

Country Name	Previous Rating (31.12.2014)	Current Rating (31.03.2015)
India	A1	A1

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

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	Long term rating: “AA+”
Rating Explanation	High degree of safety and very low credit risk.
Date	09.04.2015

Rating Agency Name	CRISIL
Rating	Short term rating: “A1+”
Rating Explanation	Very strong degree of safety and lowest credit risk.
Date	09.04.2015

RBI DEFAULTERS’ LIST STATUS

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

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2014.

LOCATIONS

Registered Office :	Parry House, 43, Moore Street, Chennai – 600001, Tamilnadu, India
Tel. No. :	91-44-25306789/ 30006199
Fax No. :	91-44-2535817/ 30006149
E-Mail :	cumigeneral@cumi.murugappa.com investorservices@cumi.murugappa.com
Website :	www.cumi.murugappa.com
Factories :	a) 655, Thiruvottiyur High Road, P B No.2272, Tiruvottiyur, Chennai - 600019, Tamilnadu, India b) Plot No.48, SIPCOT Industrial Complex, Hosur, Krishnagiri District - 635126, Tamilnadu, India c) Gopalpur Chandigarh, P.O. Ganga Nagar, Kolkata - 700132, West Bengal, India d) C-4 and C-5, Kamarajar Salai, MMDA Industrial Complex, Maraimalai Nagar, Kancheepuram District - 603209, Tamilnadu, India e) F-1/2, F2 - F5, SIPCOT Industrial Park, Pondur “A” Village, Sriperumbudur, Kanchipuram District - 602105, Tamilnadu, India f) K3, ASAHI Industrial Estate, Latherdeva Hoon, Mangalore Jhabrera Road, PO Jhabrera Tehsil Roorkee, Hardwar District – 247667, Uttarkhand, India g) Plot No.77, Bommasandra, Jigani Link Road, Jigani Industrial Area, Jigani, Bengaluru - 526106, Karnataka, India h) PB No.1 Kalamassery, Development Plot P.O, Kalamassery, Ernakulam District - 683109, Kerala, India i) PB No. 3 Nalukettu, Koratty, Trichur District - 680308, Kerala, India j) Bhatia Mines, Bhatia Western Railway, Jamnagar District - 361315, Gujarat, India k) P.B No.2 Okha Port P.O., Jamnagar District - 361350, Gujarat, India l) Plot No.7 and 18, Cochin Special Economic Zone (CSEZ), Kakkanad, Kochi - 682037, Kerala, India m) Maniyar Hydroelectric Works, Maniyar P.O. Vadasserikara, Pathanamthitta District - 689662, Kerala, India n) Plot No.47, SIPCOT Industrial Complex, Hosur, Krishnagiri District - 635126, Tamilnadu, India o) Super Refractories Division, Plot No.102 & 103, SIPCOT Industrial Complex (Phase II), Ranipet - 632403, Tamilnadu, India p) Super Refractories Division - Plant 2, Serkaddu Village, Vinnampalli Post, Katpadi Taluk, Vellore District - 632516, Tamilnadu, India q) Plot Nos. 35, 37, 48-51, Adhartal Industrial Estate, Jabalpur - 482004, Madhya Pradesh, India

DIRECTORS

As on 31.03.2014

Name :	Mr. M M Murugappan
Designation :	Chairman
Date of Birth/Age :	58 Years
Qualification :	Master’s degree in Chemical Engineering from University of Michigan, USA
Name :	T L Palani Kumar
Designation :	Non-Executive Independent Director
Date of Birth/Age :	64 Years
Qualification :	Graduate in Chemical Engineering from IIT, Madras and holds a Post Graduate Diploma in Business Administration from IIM, Ahmedabad
Name :	Shobhan M Thakore
Designation :	Non-Executive Independent Director
Date of Birth/Age :	66 Years
Qualification :	Bachelor’s degree in Arts (Politics) and Law from Mumbai University
Name :	M Lakshminarayan
Designation :	Non-Executive Independent Director
Date of Birth/Age :	67 Years
Qualification :	Master’s degree in Mechanical Engineering from IIT, Mumbai
Name :	Mr. Sanjay Jayavarthanavelu
Designation :	Non-Executive Independent Director
Date of Birth/Age :	45 Years
Qualification :	Master’s degree in Business Administration from Philadelphia University, USA
Name :	Aroon Raman
Designation :	Non-Executive Independent Director
Date of Birth/Age :	54 Years
Qualification :	Master’s degree in Economics from JNU, New Delhi and Master’s degree in Business Administration from Wharton School, USA
Name :	Mr. K Srinivasan
Designation :	Managing Director
Date of Birth/Age :	56 Years
Qualification :	B. Tech (Mech)
Experience :	34 Years
Date of Appointment :	30.01.2002

KEY EXECUTIVES

MANAGEMENT COMMITTEE:
Name :	Mr. K Srinivasan
Designation :	Managing Director
Name :	Mr. N Ananthaseshan
Designation :	President - Abrasives
Name :	P L Deepak Dorairaj
Designation :	Senior Vice President-International Business and Exports-Abrasives
Name :	Mr. Rajesh Khanna
Designation :	Senior Vice President – Ceramics
Name :	Mr. R Rajagopalan
Designation :	Senior Vice President - Refractories and Prodorite
Name :	M Muthiah
Designation :	Senior Vice President - Human Resources
Name :	Mr. Sridharan Rangarajan
Designation :	Chief Financial Officer

MAJOR SHAREHOLDERS

As on 31.03.2015

Category of Shareholder	Total No. of Shares	Total Shareholding as a % of Total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	14917392	7.93
Bodies Corporate	67243064	35.73
Sub Total	82160456	43.66
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	82160456	43.66
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	20347722	10.81
Financial Institutions / Banks	55220	0.03
Insurance Companies	6832723	3.63
Foreign Institutional Investors	38434139	20.42
Sub Total	65669804	34.90
(2) Non-Institutions
Bodies Corporate	5931140	3.15
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	24755942	13.16
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	7598998	4.04
Any Others (Specify)	2062702	1.10
Clearing Members	18559	0.01
Trusts	1910	0.00
Non Resident Indians	2042233	1.09
Sub Total	40348782	21.44
Total Public shareholding (B)	106018586	56.34
Total (A)+(B)	188179042	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	188179042	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer, Exporter, Importer and Seller of Abrasives, Ceramics (Industrial Ceramics, Refractories) and Electrominerals.
Products :	· Abrasives · Ceramics (Industrial Ceramics, Refractories) · Electrominerals
Brand Names :	Not Available
Agencies Held :	Not Available
Exports :	Not Available
Imports :	Not Available
Terms :
Selling :	Not Available
Purchasing :	Not Available

PRODUCTION STATUS = NOT AVAILABLE

GENERAL INFORMATION

Suppliers :

Reference:	Not Available
Name of the Person (with Designation):	Not Available
Contact Number:	Not Available
Since How Long Known:	Not Available
Maximum Limit Dealt:	Not Available
Experience :	Not Available
Remarks :	Not Available

Customers :

Reference:	Not Available
Name of the Person (with Designation):	Not Available
Contact Number:	Not Available
Since How Long Known:	Not Available
Maximum Limit Dealt:	Not Available
Experience :	Not Available
Remarks :	Not Available

No. of Employees :

Not Available

Bankers :

· State Bank of India

· Standard Chartered Bank

· Bank of America

· The Hongkong and Shanghai Banking Corporation Limited

· Royal Bank of Scotland

· BNP Paribas

Facilities :

SECURED LOANS	31.03.2015 (Rs. In Million)	31.03.2014 (Rs. In Million)
LONG TERM BORROWINGS
Long term maturities of Finance lease obligation (Secured against the assets purchased under the arrangement)	NA	8.640
SHORT TERM BORROWINGS
Cash Credit (repayable on demand)	NA	132.630
Other Borrowings (Secured by a pari-passu first charge on the current assets of the Company, both present and future and a pari-passu second charge on immovable properties, both present and future, relating to various manufacturing locations)	NA	481.530
Total	NA	622.800

Statutory Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountants
Address :	No:52, ASV N Ramana Towers, Venkatanarayana Road, T Nagar, Chennai -600017, Tamilnadu, India
Tel. No.:	91-44-66885000
Fax No.:	91-44-66885050
Cost Auditor :
Name :	S Mahadevan and Company Cost Accountants
Address :	No.1 ‘Lakshmi Nivas’, K.V. Colony, Third Street, West Mambalam, Chennai – 600033, Tamilnadu, India
Internal Auditor :
Name :	Ernst and Young Private Limited Chartered Accountants
Address :	6^th & 7^th Floor, A Block, Tidel Park, 4, Rajiv Gandhi Salai, Taramani, Chennai 600 113
Parties where control exists – Subsidiaries (As on 31.03.2014) :	Direct Holding : · Net Access India Limited [Net Access] · Southern Energy Development Corporation Limited [SEDCO] · Sterling Abrasives Limited [Sterling] · CUMI (Australia) Pty Limited [CAPL] · Cellaris Refractories India Limited [CRIL] · CUMI International Limited [CIL] Holding through Subsidiary: · Volzhsky Abrasives Works [VAW] · Foskor Zirconia (Pty) Limited [Foskor] · CUMI America Inc [CAI] · CUMI Middleeast FZE [CME] · CUMI Canada Inc [CCI] · CUMI Abrasives and Ceramics Company Limited [CACCL] · Thukela Refractories Isithebe Pty Limited [TRIL]
Joint Ventures (As on 31.03.2014) :	· Murugappa Morgan Thermal Ceramics Limited [MMTCL] · Ciria India Limited [Ciria] · Wendt India Limited [Wendt]

CAPITAL STRUCTURE

As on 31.03.2015

Authorised Capital : NA

Issued, Subscribed & Paid-up Capital : Rs. 188.200 Million

As on 31.03.2014

Authorised Capital :

No. of Shares	Type	Value	Amount
250,000,000	Equity Shares	Re.1/- each	Rs. 250.000 Million

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
187,756,218	Equity Shares	Re.1/- each	Rs. 187.760 Million

NOTE

Reconciliation of the shares outstanding at the beginning and at the end of the reporting period

Particulars	As at 31.03.2014
	No. of Shares	Value of Shares
Equity shares with voting rights
Number of shares at the beginning of the year	187468344	187.470
Add : Shares issued against ESOP scheme	287874	0.290
Total number of shares outstanding at the end of the year	187756218	187.760

Terms / Rights attached to Equity Shares

The Company has only one class of Equity shares having a par value of Re. 1/- per share. Each holder of equity shares is entitled to one vote per share.

For the year ended March 31, 2014, Final dividend of Re. 0.50 per share has been proposed by the Board of Directors (previous year Re. 0.75 per share). An interim dividend of Re. 0.75 per share was declared at the meeting of the Board of Directors held on January 31, 2014 and the same has been paid (previous year Re. 0.50 per share).

The dividends proposed by the Board of Directors is subject to approval of the shareholders in the Annual General Meeting.

Repayment of capital will be in proportion to the number of equity shares held.

Details of shares held by shareholders holding more than 5% of the aggregate shares in the Company

Name of Shareholder	As at 31.03.2014
	No. of Shares	Value of Shares
Murugappa Holdings Limited	55432284	29.52%
Nalanda India Fund Limited	16793362	8.94%

FINANCIAL DATA

[all figures are in Rupees Million]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2015	31.03.2014	31.03.2013
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	188.200	187.760	187.470
(b) Reserves & Surplus	8410.700	7147.940	6657.940
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	8598.900	7335.700	6845.410
(3) Non-Current Liabilities
(a) long-term borrowings	512.200	508.640	11.820
(b) Deferred tax liabilities (Net)	412.500	473.120	490.320
(c) Other long term liabilities	0.000	0.000	0.000
(d) long-term provisions	44.900	39.400	35.080
Total Non-current Liabilities (3)	969.600	1021.160	537.220
(4) Current Liabilities
(a) Short term borrowings	316.200	672.600	761.790
(b) Trade payables	933.700	845.920	913.890
(c) Other current liabilities	501.800	469.390	955.110
(d) Short-term provisions	135.700	126.260	174.730
Total Current Liabilities (4)	1887.400	2114.170	2805.520
TOTAL	11455.900	10471.030	10188.150
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	4069.700	4055.200	4102.900
(ii) Intangible Assets	2375.000	91.340	38.430
(iii) Capital work-in-progress	0.000	136.600	144.340
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	0.000	1306.180	1246.180
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	184.800	174.750	188.950
(e) Other Non-current assets	0.000	0.000	0.000
Total Non-Current Assets	6629.500	5764.070	5720.800
(2) Current assets
(a) Current investments	0.000	0.000	0.000
(b) Inventories	2084.200	1861.350	1799.570
(c) Trade receivables	2242.900	2266.200	2023.650
(d) Cash and cash equivalents	66.600	116.280	88.720
(e) Short-term loans and advances	432.700	463.130	555.410
(f) Other current assets	0.000	0.000	0.000
Total Current Assets	4826.400	4706.960	4467.350
TOTAL	11455.900	10471.030	10188.150

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2015	31.03.2014	31.03.2013
	SALES
		Income	11517.900	11485.980	11008.920
		Other Income	478.600	194.500	183.150
		TOTAL	11996.500	11680.480	11192.070
Less	EXPENSES
		Cost of Materials Consumed	4528.400	4590.850	4171.120
		Purchases of Stock-in-Trade	621.200	625.120	651.820
		Changes in inventories of finished goods, work-in-progress and Stock-in-Trade	(161.400)	(84.970)	(9.900)
		Employees benefits expense	1295.900	1258.480	1121.990
		Power and Fuel	1223.900	0.000	0.000
		Other expenses	2672.500	3646.090	3545.530
		TOTAL	10180.500	10035.570	9480.560
	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION		1816.000	1644.910	1711.510
Less	FINANCIAL EXPENSES		87.000	129.380	163.750
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION		1729.000	1515.530	1547.760
Less/ Add	DEPRECIATION/ AMORTISATION		588.300	491.390	467.410
Less/ Add	EXCHANGE GAIN/(LOSS)		15.900	0.000	0.000
Less/ Add	EXCEPTIONAL ITEMS		(869.200)	0.000	0.000
	PROFIT/ (LOSS) BEFORE TAX		1994.000	1024.140	1080.350
Less	TAX		510.700	296.300	335.020
	PROFIT/ (LOSS) AFTER TAX		1483.300	727.840	745.330
	EARNINGS IN FOREIGN CURRENCY
		Value of Exports on FOB basis		2049.280	2201.430
		Royalty		3.620	4.540
		Dividend		45.540	57.610
		Management Fees		37.090	16.290
	TOTAL EARNINGS		NA	2135.530	2279.870
	IMPORTS
		Raw Materials		2287.040	1838.320
		Components and Spare Parts		68.050	55.130
		Capital Goods		136.960	150.590
	TOTAL IMPORTS		NA	2492.050	2044.040
	Earnings / (Loss) Per Share (Rs.)
	Basic		7.89	3.88	3.97
	Diluted		7.87	3.88	3.97

CURRENT MATURITIES OF LONG TERM DEBT DETAILS

Particulars	31.03.2015	31.03.2014	31.03.2013
Current Maturities of Long term debt	NA	NA	NA
Cash generated from operations	NA	1291.520	1440.140

KEY RATIOS

PARTICULARS		31.03.2015	31.03.2014	31.03.2013
Net Profit Margin (PAT / Sales)	(%)	12.88	6.34	6.77
Operating Profit Margin (PBIDT/Sales)	(%)	15.77	14.32	15.55
Return on Total Assets (PBT/Total Assets}	(%)	17.41	11.34	12.28
Return on Investment (ROI) (PBT/Networth)		0.23	0.14	0.16
Debt Equity Ratio (Total Debt/Networth)		0.10	0.16	0.11
Current Ratio (Current Asset/Current Liability)		2.56	2.23	1.59

FINANCIAL ANALYSIS

[all figures are in Rupees Million]

DEBT EQUITY RATIO

Particular	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Share Capital	187.470	187.760	188.200
Reserves & Surplus	6657.940	7147.940	8410.700
Net worth	6845.410	7335.700	8598.900
long-term borrowings	11.820	508.640	512.200
Short term borrowings	761.790	672.600	316.200
Total borrowings	773.610	1181.240	828.400
Debt/Equity ratio	0.113	0.161	0.096

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Sales	11008.920	11485.980	11517.900
		4.333	0.278

NET PROFIT MARGIN

Net Profit Margin	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Sales	11008.920	11485.980	11517.900
Profit	745.330	727.840	1483.300
	6.77%	6.34%	12.88%

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check list by info agents	Available in Report (Yes/No)
1	Year of establishment	Yes
2	Constitution of the entity -Incorporation details	Yes
3	Locality of the entity	Yes
4	Premises details	No
5	Buyer visit details	----------------------
6	Contact numbers	Yes
7	Name of the person contacted	No
8	Designation of contact person	No
9	Promoter’s background	Yes
10	Date of Birth of Proprietor / Partners / Directors	Yes
11	Pan Card No. of Proprietor / Partners	No
12	Voter Id Card No. of Proprietor / Partners	No
13	Type of business	Yes
14	Line of Business	Yes
15	Export/import details (if applicable)	No
16	No. of employees	No
17	Details of sister concerns	Yes
18	Major suppliers	No
19	Major customers	No
20	Banking Details	Yes
21	Banking facility details	Yes
22	Conduct of the banking account	----------------------
23	Financials, if provided	Yes
24	Capital in the business	Yes
25	Last accounts filed at ROC, if applicable	Yes
26	Turnover of firm for last three years	Yes
27	Reasons for variation <> 20%	----------------------
28	Estimation for coming financial year	No
29	Profitability for last three years	Yes
30	Major shareholders, if available	Yes
31	External Agency Rating, if available	No
32	Litigations that the firm/promoter involved in	----------------------
33	Market information	----------------------
34	Payments terms	No
35	Negative Reporting by Auditors in the Annual Report	No

INDEX OF CHARGES

S. NO.	CHARGE ID	DATE OF CHARGE CREATION/MODIFICATION	CHARGE AMOUNT SECURED	CHARGE HOLDER	ADDRESS	SERVICE REQUEST NUMBER (SRN)
1	10369672	20/12/2012 *	1,153,278,000.00	STATE BANK OF INDIA	CAG BRANCH, 3RD FLOOR, SIGAPI ACHI BUILDING, 18/3, RUKMANI LAKSHMIPATHI ROAD, EGMORE, CHENNAI - 600008, TAMILNADU, INDIA	B65427312
2	10119321	20/12/2012 *	1,700,000,000.00	STATE BANK OF INDIA	CAG BRANCH, 3RD FLOOR, SIGAPI ACHI BUILDING, 18/3, RUKMANI LAKSHMIPATHI ROAD, EGMORE, CHENNAI - 600008, TAMILNADU, INDIA	B65428302

* Date of charge modification

UNSECURED LOANS

PARTICULAR	31.03.2015 (Rs. In Million)	31.03.2014 (Rs. In Million)
LONG TERM BORROWINGS
Term Loan from Bank (@ 9.8% per annum, repayable in October 2016)	NA	500.000
SHORT TERM BORROWINGS
Other loans	NA	58.440
Total	NA	558.440

CORPORATE INFORMATION (As on 31.03.2014)

Subject was incorporated as a Public Limited Company in 1954 and the shares of the Company are listed in National and Bombay Stock Exchanges in India. Subject manufactures and sells mainly Abrasives, Ceramics (Industrial Ceramics, Refractories) and Electrominerals.

ECONOMIC OVERVIEW AND COMPANY PERFORMANCE (As on 31.03.2014)

ECONOMIC OVERVIEW (As on 31.03.2014)

The year 2013-14 was marked by many challenges in the global and domestic business environments. Cyprus bail out, strengthening of US economy, flash floods in Himalayas, Ukraine crisis coupled with weak rupee and higher interest rate levels were some of the key events which unfolded during the year.

As per the data from International Monetary Fund (IMF), the global economic growth decelerated to 3.0 per cent from 3.2 per cent in the previous year. However, the growth picked up in the second half of 2013, majorly due to sharp increase in performance from advanced economies. The strengthening in activity was mirrored in global trade and industrial production. Major impulse to global growth has come from the United States of America, whose economy grew at 3.25 per cent in the second half of 2013, as per IMF data. In the Euro area also, growth turned positive on the back of supportive monetary conditions and robust labor market conditions. In emerging market economies, an export rebound was the main driver behind better performance, while domestic demand within those emerging economies generally remained subdued, except in China.

As per the interim Union Budget announced in February 2014, Indian economy for 2013-14 is expected to grow at 4.9 per cent marginally higher than 4.5 per cent clocked last year. The marginal growth is attributable to the expected 4.6 per cent growth in Agriculture sector, higher than 1.4 per cent growth registered last year. The expansion during the current fiscal year was hurt by contraction in the key sectors- Mining and Manufacturing. While the Mining sector is expected to dip by 1.9 per cent due to delayed approvals and environmental issue, that of Manufacturing sector is likely to drop by 0.2 per cent. This is the first time since 1991-92 that the Manufacturing sector is expected to contract. It is impacted by slowing investments and delayed policy decisions.

The service sector, which accounts for nearly 60 per cent of the economy, is expected to grow 6.9 per cent, slightly slower than the previous year’s expansion of 7 per cent.

On the financial side, the interest rate for most parts of the year continued to be on the higher side, despite the inflation cooling off during the later parts of the year. The rupee weakened during the first half of the year; however it recovered over the second half. On the fiscal stability front, the country’s fiscal deficit (current account deficit) is expected to improve significantly at 4.6 per cent Gross Domestic Product (GDP) in 2013-14, on the back of lower gold imports, a moderate pick-up in exports and drop in capital goods import.

COMPANY PERFORMANCE (As on 31.03.2014)

REVENUES

The Company’s worldwide revenues grew from last year levels. While revenue from India increased by 11.5 per cent, that from rest of the world increased by 4.3 per cent.

Sales of Abrasives and Electrominerals business grew by 6.2 percent and 21.1 per cent respectively and that of Ceramics segment dropped by 5.7 per cent.

Capex postponement, moderate customer demand from user industries, competition from low price products, power rate hike and tight liquidity in trade resulted in weak demand.

On a standalone basis, the Company registered growth on quarter on quarter basis for all the four quarters during the year. Electrominerals led the growth on the back of higher Aluminas business and Abrasives segment had a moderate increase in sales in line with the GDP growth. Ceramics segment de grew on account of a weak Wear Ceramics and Refractories market.

MANUFACTURING

Most of the plants in India, Russia and South Africa ran at about 70 per cent capacity utilisation levels. The manufacturing team used the opportunity to implement Total Productive Maintenanance (TPM) at shop floors leading to maximising efficiency in machines and the entire production process.

This year, the Company also had to face input cost pressure in the form of hike in power cost, fuel cost and select raw material inputs in Indian, Russian and South African operations. The cost pressures were contained by way of using alternate cost effective raw materials, improvement in raw material consumption and process improvements.

Capital expenditure during the year across all geographies was in the nature of maintenance, automation, quality enhancement, line balancing and general infrastructure.

ABRASIVES (As on 31.03.2014)

BUSINESS PROFILE

On a consolidated basis, this business comprises the following major product groups viz. Bonded Abrasives, Coated Abrasives (including non-wovens), Super Abrasives, Metal Working Fluids and Power Tools. The operations are carried out through thirteen manufacturing facilities located in India, Russia, China and Thailand. The marketing entities located in North America and Middle East support this business in getting an extended customer reach. Abrasives are used in a wide spectrum of industries, the key among them being Automobile, Engineering, Fabrication, Wood working, Construction, Home maintenance and Infrastructure.

The Company caters to customers located in over fifty countries through its network of manufacturing facilities and marketing establishments. It is one of the major players in India and Russia.

INDUSTRY SCENARIO (As on 31.03.2014)

The global industry continues to be led by few players who have a complete portfolio of Abrasive products. There are also a large number of players specialising in specific categories of Abrasives.

The Indian Abrasives industry continues to be catered to by a few large players, numerous smaller players specialising in select products and imports from China catering to low end of the market. Due to the soft market conditions in many advanced economies, India is becoming a focus market for major global players resulting in intense competition.

In the domestic Russian market there are three major players. The Company is a major player in Vitrified Bonded Abrasives. Imports service a sizeable portion of the market.

CERAMICS (As on 31.03.2014)

BUSINESS PROFILE

As a consolidated entity, the Ceramics business has three product groups viz. Industrial Ceramics, Super Refractories and Anti-Corrosives. Industrial Ceramics business offers Alumina and Zirconia products of technical ceramic grades addressing wear protection, electrical insulation, thermal protection and ballistic protection applications.

The Super Refractories product group supplies fired, monolithic and fibre as also Refractory design and installation services addressing the insulation and thermal resistance requirements of industries. The Refractory fibre and Refractory design and installation businesses are addressed through Murugappa Morgan Thermal Ceramics Limited and Ciria India Limited.

The Anti-Corrosives product group offers acid resistant cements, polymer concrete cells and various other products addressing the anti-corrosion requirements of industries.

The key user industries for Ceramics business are power generation and transmission, coal washeries, grain handling, sanitary tiles and sanitary ware, ballistic protection, cement, non-ferrous metals, iron and steel industries, carbon black, insulators, furnace building, glass, petrochemicals and construction industries.

The operations are carried out through twelve manufacturing / service facilities located in India, Australia, South Africa and Russia. The subsidiaries in North America, Middle East and China also support this business in getting an extended customer reach.

The Company is one of the major players in India, Australia and Russia in specific product groups. The Company caters to customers located in over thirty countries.

INDUSTRY SCENARIO (As on 31.03.2014)

There has been no material change in the Ceramics industry structure in India, which is catered to by a few major players. CUMI is a highly respected player in certain market segments.

In Australia, CUMI Australia is one of the major players in the Lined Equipment and Industrial Ceramic tiles industry. There are about a dozen players in the industry, most of whom market products that are imported from China and USA.

The Refractory industry in Russia is a highly fragmented market with several players. The Company is a small player in the industry.

ELECTROMINERALS (As on 31.03.2014)

BUSINESS PROFILE

As a consolidated entity, the major product groups of this business segment are fused Alumina (comprising brown and white Alumina), Silicon Carbide, Fused Zirconia, Alumina Zirconia and Zirconia Mullite. The Company also manufactures a range of ‘specialities’ like Semifriable, Azure-S and plasma powders for niche markets. The operations are carried out through seven manufacturing facilities located in India, Russia and South Africa. Products are sold to customers located in over 40 countries. Key user industries for this business are Abrasives, Refractories and Steel. The business also has captive mines and a captive power plant.

INDUSTRY SCENARIO (As on 31.03.2015)

The market structure in the global Electrominerals business remained largely unchanged with the Company continuing as one of the leading players in Silicon Carbide and Fused Zirconia.

In Fused Alumina, the Company is largely a national player with customers based in India. The Indian market continues to be catered by two players. Apart from the domestic players, imported products have a visible share in the market.

In the global Electrominerals business, the Company continues to retain its position as one of the reputed manufacturers of Silicon Carbide and Fused Zirconia.

FINANCE (As on 31.03.2015)

During the year, the Company generated Rs. 1261.000 Million cash surplus from its operations on a consolidated basis.

All debts were serviced in time including repayment of long term external commercial borrowings and the redemption of its debentures issued to LIC. At a consolidated level, the Company’s total debt position excluding current maturities of loans, increased from Rs. 3578.000 Million to Rs. 3924.000 Million. The capital expenditure program was financed largely from internal accruals.

CUMI International Limited, which holds majority stake in overseas subsidiaries, infused fresh funds to support operations in China, America, Canada and South Africa.

The Company’s credit ratings, ‘P1+’ for short-term borrowings and ‘AA+ Stable’ for long-term borrowings was reaffirmed by CRISIL in 2014. 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 has come down from Rs. 163.8 million to Rs. 129.4 million. The finance cost at a consolidated level has increased from Rs. 272.1 million to Rs. 281.8 million.

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. In the last year, the Company received in-house recognition for Research and Development facility which enabled the Company to get weighted tax deduction benefits for research and development expenses. This year they have added one more RANDD facility.

The Company’s debt equity ratio continues to be healthy at 0.16 and is the lowest ever on a standalone basis and 0.41 on a consolidated basis.

AWARDS AND ACCOLADES (As on 31.03.2015)

CUMI’s employment practices received recognition in international forums were awarded the ‘Best Organizational Staff Development Initiative’ by World HRD Congress in June 2013 for work on the Career Development Programs in Abrasives. The “Best Programme for the Cause of Learning” award was also conferred on the Company for the development of CUMI Centre for Skill Development in Hosur. CUMI also swept the award contributions at the Murugappa Group’s 10th Best Practice Sharing session winning many quality and process awards. A team from Maniyar unit, had their contributions in the area of quality recognised by awards from CII, QCFI and participated in the International Quality Circle Convention held at Taipei.

BUSINESS OUTLOOK AND OPPORTUNITIES (As on 31.03.2014)

According to the World Economic Outlook - April 2014 of the IMF, global economy is expected to improve in 2014-15, with much of the impetus for growth coming from advanced economies. The report forecasts global growth projected to strengthen from 3 per cent in 2013 to 3.6 per cent in 2014 to 3.9 per cent in 2015. In advanced economies, growth is expected to increase to about 2¼ per cent in 2014-15, an improvement of about 1 percentage point compared with 2013. Growth in emerging market and developing economies is expected to increase to 5.1 per cent in 2014 and to 5.4 per cent in 2015.

As per the Asian Development Outlook 2014, released on 1st April 2014, GDP of India is forecasted to rise to 5.5 per cent in 2014-15. The reports mention that GDP will improve due to performance of the Industry and Services. However, it will take some time for the Indian economy to reach its potential growth rate of 6%. The report mentions that the Cabinet Committee on Investment’s progress in resolving delays in several large infrastructure projects is likely to provide traction in raising investment. Though India has been seeing a muted growth over the last two years, the long term growth opportunities for the country continue to appear positive. India’s economic outlook for 2014-15 looks better than the last fiscal year due to resurgence in exports, global economic revival and moderation in inflation. Currency depreciation is also expected to increase competitiveness and bolster external demand. However, the economy will not reach its potential until structural bottlenecks, that have impeded industry and investment are overcome. The new government’s economic program after elections, including its first budget due in July 2014, will be largely determined by the party that wins the elections.

A revival in domestic growth would result in kick starting several postponed projects in Steel, Power, Glass, Cement, Insulation and General Engineering industry which would help the Company to register a good growth. Considering the country’s facilities are majorly confined to RICSA (Russia, India, China, South Africa) countries, it gives the Company necessary positioning to leverage the benefits of any uptrend in these economies.

However, given the uncertain outlook, the Company will pursue growth with caution. Efforts will be taken to control costs. Considering that the plants are running at lower utilisation levels and the fact that facilities have been expanded over the last years, the Company would invest majorly in maintenance capex. With this approach, it is expected that the Company would deliver better results in the next year.

EXPORTS (As on 31.03.2014)

As a result of the market downturn in the served international markets, export revenues were Rs. 2091.000 Million as against Rs. 2244.000 Million in the previous year.

Overseas revenues of Abrasives business grew by 20% compared to the previous year. Visits from major distributors and customers of Abrasives to the manufacturing facilities added confidence on their supply and quality capabilities. The business continues to focus on servicing of project orders from key global players, product specific approach for select geographies and lateral deployment of products in SAARC and South East Asian countries.

The Electrominerals business focused its efforts to obtain customer acceptance for alternative applications for Silicon Carbide micro grits other than photovoltaic application like semi-conductor applications, which resulted in commercial sales and also getting customer approvals / evaluations. Setting up of a distribution point and channel partners for the European and US markets are expected to promote applications of specialty products offered by the Electrominerals business.

Strategic partnerships for promoting the Ceramics products for the Glass Industry and specialised alloys market are expected to yield more orders in future.

Efforts to open new customer accounts and to enter into new export markets yielded encouraging results. Relationship with existing customers was strengthened with repeat orders from several customers. Product approvals have also been received from a few prospective customers which is expected to translate into order inflow in future.

Overseas subsidiaries played a critical role in garnering orders for several key product segments and supplemented the Company’s efforts in its foray into new markets. The marketing structure and distribution process of the Chinese subsidiary has been restructured and is expected to yield significant growth opportunities, going forward.

The Company continued to adopt country specific strategies for market entry and development, nurture strategic relationships with large volume buyers and foster customer intimacy by customising products to meet their specific requirements. The various approaches adopted during the current year will continue to be pursued next year to increase export sales.

CONTINGENT LIABILITIES:

PARTICULARS	31.03.2015 (Rs. In Million)	31.03.2014 (Rs. In Million)
a. No provision is considered necessary for disputed income tax, sales tax,service tax, excise duty and customs duty demands which are under various stages of appeal proceedings as given below :
i. Income Tax Act, 1961	NA	127.150
ii. Central Sales Tax Act,1956 & Local Sales Tax laws of various states	NA	9.300
iii. Central Excise Act,1944	NA	6.200
iv. Service Tax, 1994	NA	3.000
v. Customs Act, 1962	NA	0.000
b. Outstanding letters of comfort / guarantee given on behalf of subsidiaries	NA	4431.810
c. Outstanding letters of credit	NA	100.830
d. Outstanding bills discounted	NA	0.880
e. Claims against the company not acknowledged as debts	NA
i. Urban Land Tax	NA	3.090
ii. Stamp duty	NA	1.900
iii. Claim filed by ship liner towards damages	NA	14.000
iv. Claim filed before Consumer Dispute Redressal Forum	NA	1.000
v. Mining Royalty	NA	42.800
f. Employees demands pending before Labour Courts - quantum not ascertainable at present	NA	62.790

FIXED ASSETS

Tangible Assets

· Land

· Buildings

· Plant and Equipment

· Furniture and Fixtures

· Vehicles

· Vehicles taken on lease

Intangible Assets

· Goodwill

· Trade Mark

· Software

· Technical Know How

CMT REPORT (Corruption, Money Laundering & Terrorism]

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

1] INFORMATION ON DESIGNATED PARTY

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

2] Court Declaration :

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

3] Asset Declaration :

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

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

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

Charges or investigation registered against subject: None

7] Criminal Records

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

8] Affiliation with Government :

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

9] Compensation Package :

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

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

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

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

CONTRAVENTION

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 63.57
UK Pound	1	Rs. 99.66
Euro	1	Rs. 70.92

INFORMATION DETAILS

Analysis Done by :	SUM
Report Prepared by :	PNM

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	7
--RESERVES	1~10	8
--CREDIT LINES	1~10	7
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		67

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

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

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

RATING EXPLANATIONS

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

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

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