Cumi Financial results for FY 2004-05
Sales grew by 13 per cent, Net profit by 21 per cent,
100 per cent Dividend and One for one Bonus

Chennai, April 27, 2005: The Board of Directors met today and approved the audited financial results for the year ended 31st March 2005.

Full year performance

Sales recorded a growth of 13 per cent. Both domestic and export markets witnessed improved off-take. All the business segments viz. abrasives, ceramics and electro minerals reported higher revenues. In the domestic market, strong macro-economic fundamentals generated a strong demand- pull for the Company's products leading to a 13 per cent growth in domestic sales. Abrasives division set the momentum by registering an increase of 15 per cent in sales. The ceramics division registered a 11 per cent growth in sales aided by the strong growth in the super refractories business. Sales of electro minerals increased by 8per cent.

In the export market, the Company focused on business development in Europe, North America and Asia by customizing products to meet customer requirements, leveraging strategic alliances, establishing distribution channels and working closely with channel partners. Abrasives and ceramics, which constitute 95 per cent of the export turnover, registered a growth of 20 per cent and 24 per cent respectively.

The Company undertook modernization / upgradation of its various manufacturing facilities involving a total investment of Rs.36 crores. In the Tiruvottiyur plant, state-of-the art facilities were established for certain product lines. In the Hosur industrial ceramics plant and the Ranipet super refractories plant new kilns were installed. These investments have enabled the Company to deliver a new range of products and also strengthened the Company's capability to deliver consistent product quality and lower production cost in certain product lines.

Input cost increases were encountered across all businesses, particularly in abrasives and ceramics. To counter the resultant cost push, a slew of measures were initiated which included indigenisation of certain inputs, identification of alternative sources, process efficiency improvements, process automation and energy conservation measures. The process of rationalizing manufacture of certain product lines across locations was also completed.

Higher revenue flows without any significant increase in indirect costs resulted in profit before tax increasing by 30 per cent. Profit after tax increased by about 21 per cent.

Q4 PERFORMANCE
The Company's sales for the quarter increased to Rs. 102 crores from Rs.93 crores, a growth of 10 per cent over the corresponding period of last year. Abrasives division grew by 8 per cent and ceramics by 19 per cent. Electro minerals were at last year levels. Operating profits increased by 14 per cent and profit before exceptional items by 11 per cent. Profit after tax was Rs.13.45 crores vs. Rs.16.89 crores.

DIVIDEND
The Board has recommended a dividend of 100 per cent (i.e. Rs.2 per equity share of Rs 2/- each) for 2004-05 as compared to a dividend of 125 per cent (which included a special dividend of 25 per cent in commemoration of the Company's Golden Jubilee) last year.

BONUS SHARES
Considering the strong reserves position and the future prospects of the Company, the Board of Directors recommended a proposal for issue of bonus shares in the ratio of ONE equity share of Rs 2/- each for every ONE equity share of Rs 2/- each held by the shareholders. The new bonus shares would rank pari passu in all respects with the existing equity shares and would rank for dividend commencing from financial year 2005-06.

CAPITAL EXPENDITURE PROPOSALS
During 2005-06, the Company has plans to incur capital expenditure to the tune of Rs.75 crores. The plan includes setting up of a state of the art coated abrasives plant at Sriperambudur (near Chennai), establishment of facilities for manufacture of certain premium electro mineral products and also expansion / modernization of the existing facilities for various abrasive, industrial ceramics, super refractories and electro mineral products.

CARBORUNDUM UNIVERSAL LIMITED is part of the over US $ 1.2 billion Murugappa Group. A pioneer and market leader in several fields of business with manufacturing operations across 12 states in the country, the Group has a strong presence in Abrasives, Engineering, Bio-products, Sanitaryware, Sugar, Fertilizers, Pesticides, Finance, General Insurance, Plantations and Nutraceuticals.

For further details please contact:
Mr. N Srinivasan,
Chief Financial Officer
Tel: (044) 52216132