Dear Shareholders,
 
 2010-11 was a year of excellent all round performance for Carborundum
 Universal Limited (CUMI) across the world. The company, its
 subsidiaries, joint ventures and associates turned in a record
 performance in the wake of improving economic conditions worldwide,
 more particularly in India, South East Asia, Russia and to an extent in
 Australia and South Africa. Customer demand for CUMIs range of
 products across all divisions and the increasing need for value added
 services have contributed substantially to this performance.
 
 The year also witnessed many challenges relative to rising costs of
 input materials and utilities critical to CUMIs operations. Infl
 ationary trends in India and fl uctuating currencies across the world
 added to this challenge. Amidst this rather mixed environment CUMI
 continued to maintain and enhance its growth trajectory in both, 
 revenues and profits.
 
 Consolidated sales grew by 25 percent to Rs 16 billion and operating
 profits by 30 percent to Rs 2.6 billion, the best performance in the
 past decade.
 
 The Board is pleased to declare a fi nal dividend of Re 1/- per share
 taken together with the interim dividend declared in February 2011
 making it Rs. 2.5 per share overall. This refl ects current performance
 and the confi dence in maintaining and improving upon it in the future.
 
 Strong performances were recorded by the Abrasives and Electro Minerals
 divisions both, in India and Russia. The Abrasives related subsidiary
 i.e. Sterling Abrasives India which manufactures specialist
 conventional abrasives, Volzhsky Abrasive Works, Russia manufacturing
 abrasives and electrominerals, and Wendt India, which manufactures
 super abrasives and precision components also had their best year ever.
 The year was marked by better consumer demand, greater focus on product
 distribution and reach and an emphasis on developing strong customer
 partnerships in India and across the world. This has enabled the
 company to address comprehensively, the entire range of grinding and fi
 nishing requirements of user industries with strong product and
 application support. The Chinese operations improved considerably but
 continued to incur losses.  However this situation is set to improve
 with better capacity utilization and price realizations based on a
 detailed exercise of production rationalization between the
 manufacturing units in China, India and Russia. A new facility for
 making non-woven abrasives was commissioned towards the end of the year
 and this will serve to enhance the product range particularly in fi
 nishing applications across user industries.
 
 Electrominerals had a very good year too. Despite a challenge of
 availability and costs of input materials, the operations in Russia and
 India worked to near full capacity. The focus on enhancing production
 of silicon carbide micro grits which fi nd extensive use in solar cell
 manufacturing contributed to the business growth and value addition.
 Stabilized Zirconia production in South Africa improved substantially
 over the previous year but the operations were constrained by rising
 raw materials costs and a fl uctuating rand.
 
 Ceramics and Refractories built high quality partnerships with
 customers in India, Australia and Russia. New breakthroughs in design
 and development of products for the emerging energy sector in the
 United States and other parts of the world will progressively provide a
 unique positioning of the ceramics division to address opportunities in
 this sector. The expertise developed in the Australian operations to
 provide design and application services to the mining industry was
 extended to customers in South East Asia, South Africa and India. In
 the refractories business although the growth was lower than planned
 the emphasis on strong customer partnerships both in India and Russia
 have led to consistent customer recognition which will result in
 enhanced revenues going forward.
 
 CUMI is well positioned to address opportunities in a variety of
 industry sectors and its eff orts are gaining momentum in emerging
 sectors such as power and renewable energy, based on both, product
 development and research initiatives in- house and in collaboration
 with universities and research institutions. This, together with
 enhanced customer partnerships will be the basis on which CUMIs growth
 will be fashioned in the years ahead. The emphasis on technology
 excellence cannot stand alone. Therefore, CUMI continues its eff orts
 in building world class facilities, enhancing capacities and improving
 its operations across the world both, in terms of ensuring consistently
 high product quality, manufacturing efficiency and strong application
 support. This quite naturally will mean greater investment in its
 people, their skills and leadership abilities.
 
 CUMIs development and progress over the years has been based on the
 relentless pursuit of a clear vision, strong ethical values, its
 commitment to customers, good governance, high standards of quality,
 application service, adherence to safety standards, environmental and
 regulatory compliance and above all committed leadership. Mr K
 Srinivasan, our Managing Director has led his team which comprises of
 people from many nationalities across the world very ably in a year of
 record performances. Mr N Kishore, President of the Abrasives Division
 together with the Technology responsibility across the company, retired
 during the year. We wish him well in his retirement. CUMI teams across
 the world worked very well together addressing both opportunities and
 challenges with equal vigour. To the company leadership and to our
 colleagues worldwide my sincere gratitude and appreciation for the
 wonderful work that they do.
 
 Our Board is a great source of strength to the company and to me
 personally. Our Directors have visited key operating sites, interacted
 with our various teams, encouraging and challenging them to set their
 sight on higher levels of achievement across all facets of the
 companys operations.  I thank them for their interest, sharing their
 expertise and their wise counsel and look forward to their continued
 support.
 
 As shareholders, your support to us has been invaluable. Many of you
 take a very keen interest in the development and progress of the
 company and have expressed kind words of appreciation.  To everyone of
 us in CUMI this is indeed both, gratifying and inspiring.
 
 Looking ahead we will continue our journey towards the larger vision of
 addressing opportunities in ceramics and related specialist materials
 worldwide. We strongly believe that we have the necessary ingredients
 to evolve into a global company which will focus on Making Materials
 Work For Man.
 
                                                     M.M.Murugappan
 
 April 30, 2011                                            Chairman