CARBORUNDUM UNIVERSAL SHARE: Recent Annual Report

ABOUT CARBORUNDUM UNIVERSAL SHARE 

• Carborundum Universal share manufactures and sells Abrasives, Ceramics (Industrial Ceramics, Refractories) and Electro minerals. 
•  Abrasives are substances which clean or remove solid material by rubbing action or by impact. 
• Carborundum Universal share’s operations are carried out through over 10 manufacturing facilities located pan India, Russia and other countries. 
• The Ceramics segment consists of super refractories, industrial ceramics, anti-corrosives and bioceramics.  
• Power generation and transmission, coal washers, grain handling, ballistic protection and construction are the industries which utilize their products. 
• The Electrominerals segment includes abrasive/refractory grains, micro grits for the photovoltaic industry and captive power generation from hydel power plant. 

Sustainability Matters of Carborundum Universal share 

• When they work with Materials, and work with Nature’s Building Blocks – finite resources, with infinite possibilities.  
• 2020 – 21, when the global pandemic ravaged the world, creating havoc in the lives of people and economies, they reaffirmed their alignment to their true purpose, re-pledged their commitment to sustainability: building new capabilities in plant and processes, creating a dynamic people asset, developing innovative product streams, deploying new strategies for business growth and creating shareholder value. 
• Six decades and more in the journey, at Carborundum Universal share, sustainability has always been part of DNA. 

FOR MORE ANNUAL REPORTS DO CHECK BELOW ARTICLES:

KIRLOSKAR FERROUS: Important points of Annual report. (learntwotrade.com)

ANNUAL REPORT: KPR MILL – Learn Two Trade

GUJARAT AMBUJA EXPORTS SHARE: Annual Report Summary (learntwotrade.com)

PHILOSOPHY 

• Carborundum Universal share are committed to the People and Planet by relentlessly working towards conservation and responsible use of all scarce natural resources, going further in their quest to Make Materials Matter for a better tomorrow.  
• They will conserve and improve the initiatives by substantively including sustainability in all aspects of their Business Operations with focus on innovation & process upgradation through purposeful Research & Development and collaboration with leaders in Materials Technology.  
• Sustainability measures are integrated to the business models and Growth strategies of Carborundum Universal share. 

SUSTAINABILITY PILLARS 

• Economic Sustainability 
• Environmental Sustainability 
• Human and Social Sustainability 

They will achieve this through: 

• Materializing the focus on 3 E – Energy, Engineering and Environment by continuously improving our products & Processes.  
• Minimizing pollution to Air, Land and Water by assiduously promoting Cleaner & Greener environment and eliminating health hazards to the people & society. 
• Carborundum Universal share focuses on 4 R’s – Reduce, Reuse, Recycle and Repurpose to enhance the ecological balance. 
• Sustainability measures are monitored and improved by setting appropriate goals. 

• They focus on sustainable practices for the entire bandwidth of operations such as responsible mining and sourcing of raw material from our captive mines, the high efficient fusion process, our lean production systems with an emphasis on minimal environmental impact, green energy utilization such as wind, solar and natural gas, innovative product design, engineering expertise for greater gain in customer efficiencies and a streamlined supply chain and distribution channel across the world, with greater customer proximity to minimize carbon footprint. 

WOW – Waste to Wealth programmes across business seeded the discipline of recycling, reusing and re-purposing to promote the wisdom of a sustainable circular economy. 

WOW Project Objective: 

• To view ‘waste’ as a valuable ‘resource’ that can be converted into a variety of useful products. 

• To promote the use of recovered and recycled materials. 

 • To Provide a sustainable model: concept of 5 R [Refuse – Reduce – Reuse – Recycle – Recover]  

• To explore market opportunities for the recovered and recycled materials. 

• To Promote CIRCULAR Initiatives. 

Methods Used 

A)  Circular Initiatives: Encourage Recycling & promote reuse. 

B) Circular Initiatives: Reuse Process Waste. 

C) Circular Initiatives: Develop Market for recycled materials- Project Stheyas. 

Strong Governance standards and a sustainable ecosystem creating shared value for all stakeholders. 

• Carborundum Universal share’s journey, marking nearly seven decades in business, is a demonstration of its sustainability, and its strong fundamentals. 
• Inherent in Carborundum Universal share’s framework of sustainability is the principle of creating shared value for all stakeholders: employees, shareholders, customers, community and the larger society. 

COMPANY PERFORMANCE 

• The growth story among subsidiaries is mixed. While Volzhsky Abrasive Works and Sterling Abrasives Limited performed well recording growth, CUMI (Australia) Pty Limited (CAPL), CUMI America Inc., CUMI Abrasives and Ceramics Company Limited, China (CACCL), and CUMI Middle East (CME) were drastically impacted by a number of parameters. 

•  The Electro minerals segment grew 3.8% at a consolidated level, and 7% at a standalone level, supported by growth in volumes and realization. 
• The Ceramics segment de-grew by 2.2% on a standalone level and 0.3% on a consolidated level. 

PERFORMANCE OF BUSINESS SEGMENTS 

• This SBU is in the business of engineering surfaces. It develops and delivers rigid and flexible abrasives. The important segments of products are Bonded Abrasives, Coated Abrasives, Metal Working Fluid, Super Abrasives and allied products. 
• This Business has more than sixty years of experience in Abrasives manufacturing, application engineering and distribution. Strength of the business is strong Research & Development. 
• Ten manufacturing plants are located across India, Russia and Thailand. The marketing entities in North America, Middle East, China and distributors across the globe provide a good reach in India and over 55 markets globally. 

FINANCIAL PERFORMANCE OF CARBORUNDUM UNIVERSAL SHARE 

FINANCIAL KEY METRICS	VALUE
MARKET CAPITALIZATION	₹ 12,924 Cr.
STOCK P/E	38.8
INDUSTRY P/E	50.2
ROE	14.8 %
ROCE	20.1 %
DEBT TO EQUITY RATIO	0.10

• During the year, the Company generated Rs 2711 million cash surplus from its operations on a standalone basis. 
• All debts have been serviced on time.  
• Carborundum Universal share’s long- and short-term borrowings as on 31st March 2021 stands Nil.  
• The capital expenditure program of Rs 595 million was financed from internal accruals. 
• The debt equity ratio for the Company is Nil at a standalone level and 0.02 at a consolidated level. The Company’s Balance Sheet remains robust and it augurs well for the growth in the prevailing conditions. 
• The credit ratings of the Company, ‘A1+’ for short-term borrowings and ‘AA+ Stable’ for long-term borrowings were re-affirmed by CRISIL. 

• The Company earned Rs 100 million by investing surplus cash available for short term. 

ACHIEVEMENTS OF CARBORUNDUM UNIVERSAL SHARE 

• The year 2020-21 despite being challenging from an operational perspective continued to be a year of recognition for the Company in varied fields.  
• This is the 2nd consecutive year of recognition by this body of Accountants from SAARC Region, thus reinforcing our transparency, excellence in financial reporting and governance standards. 

BUSINESS OUTLOOK AND OPPORTUNITIES 

• Once investment climate improves, the performance of core sectors could improve. The performance of Construction and Auto, the two major end users of Abrasives will depend on the level of discretionary spending by consumers in the economy, which in turn will depend on the course of the second wave. 
• At the same, the Company continues to explore and identify alternate and new opportunities for its various product segments across all its businesses in sectors including Healthcare, Digital, Defense etc. to leverage growth during these unprecedented times. 

SHAREHOLDING PATTERN/DISTRIBUTION AS ON 31ST MARCH 2021 

Category Capital	% Total paid up
Promoter/Promoter Group	42.01
Foreign Institutional Investors	7.37
Financial Institutions including Insurance Companies	0.85
Non-resident (NRI’s / OCBs)	1.92
Mutual Funds	24.69
Banks	0.01
Indian Bodies Corporate, AIFs & QIBs	5.88
Individuals	16.83
Others – Trusts/ Clearing Members/IEPF	0.44
Total	100.00

 EMPLOYEE BENEFITS OF CARBORUNDUM UNIVERSAL SHARE 

1. Defined contribution plans  

Contribution retirement benefit plans for all qualifying employees is operated by the company. 

2. Defined benefit plans 

The Company sponsors funded defined benefit plans for employees. The employees are entitled to post-retirement benefits by way of gratuity amounting to 57.69% of last drawn salary for each year of completed service until the retirement age of 58 which is provided by the company. 

• Company is drawn into following risks due to the employee benefits which are as follows:  
• Investment risk, 
• Interest rate,  
• Longevity and  
• Salary risk.