CARBORUNDUM UNIVERSAL LIMITED ANNUAL REPORT 2019-20 CONTENTS True Grit

True Grit CARBORUNDUM UNIVERSAL LIMITED ANNUAL REPORT 2019-20 CONTENTS True Grit True Grit i | Board of Directors xx | Chairman’s Message xxii | 2019-20 tested the reserves - in performance, perseverance and Corporate Information 1 | Financial Highlights 2 | resilience. Something in our six decades and more of experience we have constantly demonstrated. Upheavals, downturns, economic crisis- Directors’ Report 4 | Corporate Governance Report 57 | at CUMI, we have witnessed the different cycles and managed to ride Independent Auditors’ Report on Consolidated Financial Statements 76 | the tide, stay passionate and pioneer new paths. Consolidated Financial Statements 82 | Independent Auditors’ Report on Standalone Financial Statements 150 | It was an unprecedented year which started with an economic Standalone Financial Statements 156 | slowdown and ended with the ‘Great Lockdown’ - the global shuttering of business and the economy grinding to a halt. At CUMI, the impact was felt, but we continued to remain resilient. An Ode to the Grit Our long term strategic initiatives, our capacity enhancement projects, Look at this small grit, this tiny grain, so small one must rub hundreds of them between finger and thumb to feel their sharpness. Insignificant little grits and easily slighted in our sophisticated technological world, our focus on innovation and new product development, our capability but without this small fragment of abrasive, transformed when viewed under a microscope, into jagged heroic building programmes, were on track as per the roadmap we had drawn blocks - without these small grits ours might still largely be an agricultural society and the conquest of space merely a dream. With these grits are grinding wheels made. for the year. Excerpt from the book ‘The Grinding Wheel’ by Kenneth Lewis, published in 1951. The pandemic crisis has given us yet another lesson in the importance of prudence, of self reliance and the ability to navigate turbulent times by staying strong. As we engineer Material Science Solutions for an Enduring Planet, we understand that whatever be the cycles, that Note: Across this Report, the word “CUMI” refers to “Carborundum Universal Limited.” which endures, sustains and forges ahead is always True Grit. Cautionary Statement This Report contains statements relating to future business developments and economic performance that could constitute ‘forward looking statements’. While these forward looking statements represent the Company’s judgements and future expectations, a number of factors could cause actual developments and results to differ materially from expectations. The Company undertakes no obligation to publicly revise any forward looking statements to reflect future events or circumstances. Further, investors are requested to exercise their own judgement in assessing various risks associated with the Company and also the effectiveness of the measures being taken by the Company in tackling them, as those enumerated in this Report are only as perceived by the Management. At CUMI, we have always believed that agility and adaptability to million sq meters per annum. The new Coated Maker is designed In alignment with the investment in the New Maker, the conversion We believe a changing environment is what makes a company resilient and with the most advanced heating technology in the curing racks, capacity was also expanded at the Sriperumbudur Plant. stand the test of time. Just as important is the need to build new thereby ensuring consistent and optimum drying, with the lowest Investments were done in Flap disc, Flap wheel and Rolls modules true grit lies capabilities, new competencies, to accelerate the momentum of consumption of energy. The advanced PLC controls on each of the for enhancing the capabilities to the best-in-class conversion growth. surface coating heads, provide a uniform and consistent coating facility with faster deliveries. The new Laser technology was of any thickness while the unique coating technology helps to also introduced in the conversion for making niche products for in building new Despite the market slowdown, our capability building projects, improve product yield on par with the best in the world. specific markets. our capacity expansions, our new product manufacturing capabilities to facilities, our line balancing and general infrastructure building The new Maker comes with IoT enabled capabilities facilitating In Bonded Abrasives, a pilot facility for manufacturing Vitrified went as planned during the year. Optimising operational easy monitoring and control of process and machine parameters Super Abrasives and Hybrid wheels for meeting high-end efficiencies, a continued focus on Total Productive Maintenance while the online add-on measurement and control devices provide precision applications in Automotive and Bearing segments was accelerate (TPM), quality enhancement to meet benchmark standards with superior process capabilities. The process parameter monitoring also commissioned at Tiruvottiyur during the year. zero defect products and prudent cost management, provided a through IoT helps to control the process in line with global growth. resilient buffer to counter the slowdown. benchmark standards, thereby ensuring high quality product Building new capabilities with state-of-the-art manufacturing output. This new facility provides the Abrasives Business the Plants, benchmark quality standards and cutting edge Abrasives leverage to manufacture new product lines such as Sand Master technologies provides CUMI the edge to forge ahead into future Next Rolls, Concord Flap Discs, Stearated Paper Discs, Zirconia with true grit. We expanded our Coated Maker plant at Sriperumbudur, one of Flap Discs, Zirconia belts, etc., for new and emerging customer the largest and state-of-the-art, fully automated plants in Asia, segments in the global market. with a new Maker and Converter, doubling our capacity to 30 The Coated Maker Plant at Sriperumbudur ii iii True grit demands agility, change adaptability, and the speed for strategic variables. An agility to adapt to a constantly changing global business The work on the Lined Equipment (LE) 2.0 project was initiated environment, with tectonic disruptions in technologies, processes during the year. This strategic project would provide the Ceramics and market trends, demands resilience and grit. At CUMI, our business with enhanced capabilities to address the growing ability to anticipate and evolve, in sync with emerging market market needs of a wide spectrum of industries like Mineral needs has been our inherent strength. A strength, that has Processing, Steel, Cement, Coal and Bulk Material Handling, in enabled us to shift course, recraft business models with strategic Wear Protection applications. variables, build and upgrade facilities, spearhead transformational technologies and provide value driven solutions for customers. The Business has laid the foundation for building a facility for the manufacture of sintered Silicon Carbide products, which Electrominerals would enlarge opportunities in Fluid Handling, Armour and other applications. The Electrominerals Business demonstrated agility, converting the Zirconia Bubble facility to a modern, mechanised White Fused In the Metallized Cylinders segment, a capacity expansion project Alumina Fusion facility, deftly realigning its product range to with a continuous metallization furnace was undertaken and will address market demand. The White Fused Alumina expansion be commissioned in FY 2020-21. and process mechanization helped the Business to register growth from Refractory customers. Refractories & Composites In addition, two of the furnaces for Brown Fused Alumina As part of the strategy for growth of the Refractory Business and were upgraded with automated control systems to enhance to address the global demand, the Company expanded capacity productivity. The TPM focus across all Plants of the Business, of the Nitride Bonded Silicon Carbide facility at VAW, Russia. prudent cost management, effective utilisation of power and raw material rationalisation helped to counter balance the market In addition, capacity expansion has been planned at the Ranipet slowdown. Plant in India, for the next year, to meet the burgeoning demand in Composites. Ceramics The challenges of a global slowdown has only invoked our CUMI The Ceramics Business is consolidating its capabilities and spirit of pioneering and our grit for treading the unbeaten path. gearing up to meet the increasing global demand with Our strategic roadmap for the future will be aligned with this expansions, greenfield plants and new product lines, for undaunting spirit of resilience and staying ahead of the curve. addressing new customer segments and emerging markets. Modernisation of the White Fused Alumina Facility. iv v A Material Science Company providing solutions for an enduring Highlights for the FY 2019 - 20 in coal washeries and mineral handling, new variants for A relentless pursuit planet, CUMI has always been in the forefront of new and Kiln furniture application, RbSiC reinforced with coated emerging technologies. 7 DSIR Certified Labs engaged in future • Several IPs have been filed for products, process and design, Graphene material with superior PV value for pump sealing of innovation, driven research, patent protected products and processes, domain and a research paper on ‘Thin Film Chromium coating on applications, RbSiC composites for ballistic applications and expertise in cutting edge technology

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