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Dear Shareholders,

In a year of great uncertainty, challenge and change, I am pleased to report that CUMI continues to maintain its progress towards becoming a globally recognized company in the field of material sciences. The global economy was impacted by a financial crisis of unprecedented dimension and this has its cascading influence in all sectors, wherein CUMI has its major customer base. However the product portfolio and geographical spread have helped CUMI to maintain its growth trajectory at a consolidated level. At this time half of CUMI's revenues are India centric while the remaining half is from worldwide operations.

The highlights of 2008-09 have been the integration and outstanding performance of Volzhsky Abrasive Works in Russia, CUMI Australia, Monolithics and the Electro Minerals Division in India. These have helped enhance the company's consolidated results while all other divisions, did well to contain costs through a relentless pursuit of cost management programmes to maintain profitability levels. This is particularly significant in view of the sharp market decline in the second half of the year, volatile input material prices, high cost and often limited availability of energy across the various manufacturing sites in India and worldwide. It is expected that these challenges will continue in the next year. The CUMI team continues to take steps to harness synergies across divisions and geographies.

The acquisition of a majority (51%) shareholding in Foskor Zirconia (FZL), South Africa has further enhanced CUMI's position as a comprehensive electrominerals producer. FZL's main products, calcia stabilized and monoclinic zirconia and fumed silica find use in refractories used in steel industry and specialist ceramics.

CUMI's focus on technology development and the establishment of world class manufacturing across its various product lines, continued during the year. Joint research programmes with research institutions in India, Russia and UK have provided some avenues for potential future products. A new plant site at Katpadi Taluk, Tamilnadu, India, for refractories and anticorrosives, and a new metallised ceramics line at Hosur, India are now in production and supplies have commenced to customers. A facility to manufacture nitride bonded silicon carbide refractories is in the commissioning stage at VAW, Russia.

CUMI's subsidiaries, joint ventures and associate companies have contributed in good measure towards CUMI's all round performance. Sterling Abrasives in Ahmedabad, India, and Ciria India, a refractory engineering services provider and Southern Energy Development Corporation have had outstanding performances while Murugappa Morgan Thermal Ceramics and Wendt India continued to maintain their market share and profitability. The IT Investments i.e. Laserwords and Netaccess contributed with strong performances as well. All this reinforces CUMI's ability to work in joint ventures and partnerships as an integral part of its overall strategy. I wish to acknowledge all our partners and associates for their support and contributions.

The operations of the associate company in China, Jingri-CUMI Super Hard Materials Company have been affected not only by the economic down turn but also the need to get greater business focus. The change in business strategy at CUMI Canada towards a good balance between Ceramics and Abrasives is slowly improving the operations. The challenges in these two locations will be addressed with greater vigour in the coming year and should yield better results going forward.

Maintaining technology leadership, gaining greater customer confidence and keeping a dedicated focus and commitment towards a larger company vision, particularly in turbulent times is always a great challenge. CUMI's emphasis on people and leadership development across all levels in the organization helps to ensure this. The CUMI team ably led by our Managing Director, Mr K Srinivasan, the Business Management Committee, the heads of all subsidiaries, joint ventures and associates have worked very hard to ensure a consistency in performance that continues to balance the interests of all stakeholders within a frame work of strong values and good corporate governance. To them, and the entire CUMI team worldwide, my most grateful thanks.

CUMI's Board of Directors provide the company great encouragement and strong direction while being custodians of good governance. Their contribution to the company and to me personally has been immense. I wish to acknowledge with gratitude their involvement, wisdom and wise counsel. Mr Shoban Thakore and Mr M Lakshminarayan joined the Board during the year, thus making its composition both, diverse and comprehensive. I welcome them to the Board and look forward to their contribution.

As business and trading conditions continue to be uncertain various teams at CUMI and associates within India and worldwide are working to mitigate risk, enhance competitiveness and build capability while ensuring that the company remains on a growth path deriving synergies from its operations worldwide. It is indeed most gratifying to see a fine group of people across different cultures working seamlessly in pursuit of a larger vision. This will not be possible without the confidence and support from all of CUMI's shareholders. To us this is the most important factor towards our goal in ‘Making Materials Work For Man’.