CUMI's nine-month turnover up by 15 per cent; net profits up by 51 per cent

Chennai, January 31, 2005: The Board of Directors of Carborundum Universal Limited met today and approved the unaudited financial results for the quarter ended December 31, 2004.

Third quarter performance
Sales at Rs. 91 crore were 11 per cent higher than the third quarter of the previous year (Rs. 82 crore). The growth in sales was made possible because of the good off-take from user industries and the thrust given to specific product lines.

Profits before exceptional items increased from Rs. 11.9 crore to Rs. 13.5 crore. The improvement in profits resulted from process improvements and higher power generation at the hydel plant which helped to reduce power costs. Net profits at Rs. 9.27 crore (previous year Rs. 5.65 crore) registered a growth of 64 per cent as compared to the year-to-date (YTD) figure of last year.

April-December 2004 performance
Sales at Rs. 255 crore grew at 15 per cent as compared to the YTD sales of the previous year (Rs. 221 crore). Exports registered a growth of 19 per cent over the YTD of last year. Profit before exceptional items increased by 24 per cent, from Rs. 27.81 crore to Rs. 34.35 crore. Profit before tax at Rs. 35.92 crores grew by 64 per cent as compared to the YTD of the previous year at Rs. 21.94 crore. Net profits at Rs. 24.97 crore registered a growth of 51 per cent as compared to the YTD of previous year (Rs. 16.55 crore).

Operations for the first 9 months
Growth in the business was mainly due to the good domestic order in both the OEM and mass market segment.

Abrasives
Sales at Rs. 197.76 crore (previous YTD Rs. 167.59 crore) saw a growth of 18 per cent. Sales growth was lower than the first half due to a drop in export turnover which is expected to be temporary.

Ceramics
The YTD sales at Rs. 41.09 crore was higher by 9 per cent as compared to the previous period (Rs. 37.85 crore). There were good project orders in the domestic market from user segments. The division consolidated its position with many overseas customers.

Electrominerals
Sales for the nine months of the current year was at Rs. 38.46 crore, a growth of 11 per cent as compared to the corresponding period of previous year (Rs. 34.64 crore) as a result of the strong off-take from abrasives and specialty markets. This growth was achieved despite the exit from low end refractory markets.

Outlook
With positive trends in the economy, we expect the growth trend to continue.

Changes in Senior Management
Mr. Ramesh Agarwal (59), Managing Director of the company retired from the Board today following his superannuation. Mr. Agarwal became the President and Wholetime Director of Carborundum Universal Limited (CUMI), in January 2000 and was elevated as Managing Director in August 2003.

During his tenure, Mr. Ramesh Agarwal has been instrumental in building and nurturing a fine blend of people with a focus on improving and streamlining operations. He has played an important role in putting CUMI and its associate companies on a growth threshold with emphasis on domestic and export market development, quality, productivity and profitability.

In Mr. Ramesh Agarwal's place, the Board has appointed Mr. K Srinivasan (currently Vice President — Marketing of the Abrasives Division) as President and Wholetime Director. Mr. Srinivasan (47) holds a B.Tech (Mechanical) degree from REC, Surathkal. He has nearly 25 years of experience in the machine tools and abrasives industries in sales, technical, production and general management. He has been with Wendt India Ltd. (CUMI's associate company) since 1983. He has handled CUMI's industrial ceramics business between 1999 to 2002, and took charge as Vice President — Marketing of CUMI's Abrasives division from October 2002.

The Board has also appointed Mr. N Srinivasan (47) as Chief Financial Officer of CUMI in the place of Mr. P R Ravi, who has moved to head the Ceramics and Electrominerals business of CUMI. Mr. Srinivasan is a chartered accountant and company secretary by qualification. He has over 22 years of experience in the areas of finance and general management.