(a) During the year, the Company had completed the acquisition of M/s. Silicon Carbide Products LLC ('SCP LLC') through its newly incorporated subsidiary CUMI USA Inc. The closing was effected on October 30, 2024 by making a payment of USD 6.87 million to the sellers. The enterprise value of the transaction (on debt free and cash free basis) was agreed at USD 6.66 million in the Purchase agreement. The purchase consideration of USD 6.87 million paid reflected adjustment for cash on hand, net working capital and transaction expenses at the closing. The purchase consideration was based on the estimated financials as at 30th October 2024 and was subject to further adjustment based on the verification by the Purchaser on the actual closing financial statements. The closing had also been completed during the year and the final consideration was determined at USD 7.05 million.
(b) Before acquisition, PLUSS Advanced Technologies Limited [PLUSS] had an ESOP scheme wherein the employees of PLUSS were granted shares based on satisfaction of certain service condition or the happening of a liquidation event. All the options had vested as on the acquisition date. The Company had modified the terms of the ESOP by increasing the service condition and had also agreed to purchase ESOP shares in future from the employees of PLUSS once vested and exercised. Consequently, to the extent of service received from employees of PLUSS, this has been accounted as an investment with corresponding increase to other financial liability. Of the said balance during the year, the Company has purchased 3293 equity shares at ^3127 per share (March 31, 2024 - 3511 equity shares at ^3127 per share). The Company has also performed a detailed impairment assessment of investment in PLUSS and based on the assessment performed no impairment is deemed necessary.
(a) Trade receivables are generally due between 30 to 60 days. The Company's terms includes charging of interest for delayed payment beyond agreed credit days. However, the Company charges interest after considering the historical trend, business prospects, reason for delay, market conditions etc.
(b) Credit risk is managed at the operational segment level. The credit limit and credit period are fixed for each customer after evaluating the financial position, past performance, business opportunities, credit references etc. The credit limit and the credit period are reviewed regularly at periodical intervals.
(c) Concentration risk considers significant exposures relating to industry, counterparty, geography, currency etc. The concentration of credit risk is not significant as the customer base is large and diversified.
(d) The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on provision matrix which takes into account the historical credit loss experience adjusted for forward looking information.
(e) Some trade receivable may be past due over 365 days without being impaired considering the certainty of realisation.
(f) Trade Receivable includes dues from Related party amounting ^582.31 million (Previous year: ^534.11 million).
b) Terms / Rights attached to Equity Shares
The Company has only one class of Equity shares having a par value of Re.1/- per share. Each holder of equity shares is entitled to one vote per share. Repayment of capital and surplus, if any, will be in proportion to the number of equity shares held.
c) Dividend details
Final dividend of ^2.50/- per share was proposed for the year ended March 31, 2025 at the meeting of the Board of Directors held on May 12,2025 (previous year final dividend of ^2.50/- was proposed and paid). The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, upon which the liability will be recorded in the books. An Interim Dividend of ^1.50/- per share was declared at the meeting of the Board of Directors held on February 13, 2025 and the same has been paid (previous year an interim dividend of ^1.50/- per share was declared at the meeting of the Board of Directors held on January 31, 2024 and the same had been paid).
28. Segment information
Carborundum Universal Limited provides solutions for following industrial manufacturing needs by developing, manufacturing and marketing products using the properties of materials known as electrominerals:
• Surface engineering (material removal, cutting, polishing) known as Abrasives. This segment comprises of Bonded, Coated, Processed cloth, Polymers, Power tools and Coolants.
• Technical ceramics and super refractory solutions to address wear protection, corrosion resistance, electrical resistance, heat protection and ballistic protection known as Ceramics.
• Electrominerals for surface engineering, refractories, energy and environment. It includes fused alumina, silicon carbide, zirconia, specialty minerals and captive power generation from hydel power plant.
The Business Group Management Committee headed by the Managing Director (CODM) and consisting of Chief Financial Officer, Leaders of Strategic Business Units, functional heads such as Human Resources, Information technology, Environmental Health and Safety, Risk & Taxation, Manufacturing and Company Secretary have identified the above three reportable business segments. It reviews and monitors the operating results of the business segments for the purpose of making decisions about resource allocation and performance assessment using profit or loss and return on capital employed.
b. Defined benefit plans
The Company sponsors funded defined benefit plans for employees. Under the plans, 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. The defined benefit plans are administered by separate funds, independent of the Company.
These plans typically expose the Company to actuarial risks such as: Investment, Interest rate, longevity and salary risk
i) Investment risk: The present value of the defined benefit obligation is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.
ii) Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan's debt investments.
iii) Longevity risk: The present value of the defined benefit obligation is calculated by reference to the best estimate of the mortality of plan participants during their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.
iv) Salary escalation risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.
The actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at March 31, 2025 by a certified actuary of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
No other post-retirement benefits are provided to the employees. In respect of the contribution made to provident funds, the employer guarantees the interest notified by the appropriate authority and to the extent of interest rate guaranteed, the liability is considered as defined benefit. For the financial year ended March 31, 2025, the interest yield is adequate to meet the guaranteed interest.
33. Financial Instruments(i) Capital management
For the purpose of the Company's capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company's capital management is to maximise the shareholder value.
The Company's objective when managing capital are to:
• safeguard their ability to continue as a going concern, so that they can continue to provide return for shareholders and benefits for other stakeholders and
• Maintain an optimal capital structure to reduce the weighted average cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividend paid to shareholders, return capital to shareholders, issue new shares or sell non-core assets to reduce the debt.
a. Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
a. (i) Trade receivables
Customer credit risk is managed by each business unit under the guidance of the credit policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on financial position, past performance, business/economic conditions, market reputation, expected business etc. Based on this evaluation, credit limit and credit terms are decided. Exposure on customer receivables are regularly monitored and managed through credit lock and release. For export customers, credit insurance is generally taken.
The impairment is based on expected credit loss model considering the historical data and ageing profile of receivable at each reporting period. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note: 10. The Company does not hold any collateral as security.
The Company has low concentration of risk with respect to trade receivables, as its customers are widely spread and belong to diversified industries and operate in largely independent markets.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. In grouping the receivables, the management has deemed the probability of default in relation to related party receivables are considered to be negligible given its historical experience and the relative networth of the related parties except, in relation to a subsidiary.
The expected loss rates are based on the payment profiles of sales over the past 24 months before the reporting date and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables.
a(ii) Financial Instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Company's treasury department in accordance with the Company's policy. Investments of surplus funds are made for short-term in liquid funds of rated mutual funds and deposits with banks. The Investment limits are set out per Mutual fund and the value of total fixed deposit in Banks to minimise the concentration risk. Investments are reviewed by the Board of Directors on a quarterly basis. The Company has no exposure to credit risk relating to these cash deposits as at: March 31, 2025 and March 31, 2024. The Corporate guarantees given by the Company to bankers on behalf of its subsidiaries and Joint venture are duly approved by the Board of Directors and are reviewed on a quarterly basis. The total exposure to corporate guarantees is limited to figures reported in Note: 29C.
In respect of other financial instruments, these primarily comprised of security deposit with Company's suppliers/regulatory authorities with whom Company has recurring transactions, the credit risk of which is assessed to be negligible given the historical experience and recurring nature of transaction among others.
b. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risks: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, Investments (FVTOCI) and derivative financial instruments.
Market risk exposures are measured using sensitivity analysis. There has been no change in the measurement and management of the Company's exposure to market risks.
b(i) Foreign currency risk management
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. Foreign exchange rate exposures are managed within policy parameters approved by Board of Directors. The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum of 12 month period of forecasted receipts and payments. When a derivative is entered into for the purpose of hedging, the Company negotiates the terms of those derivatives to match with the terms of the hedged exposure. The Company hedges around 50% of the net material exposure by currency. Exposures relating to capital expenditure beyond a threshold are hedged as per Company policy at the time of commitment.
The Company's sensitivity impact to foreign currency has increased during the current year end mainly due to the increase in quantum of exposure in USD as at the end of the reporting period.
b(ii) Interest rate risk Management
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Company has not availed any borrowings as at March 31, 2025, hence the Company is not subject to interest rate risk. b(iii) Price risks
The Company does not have any material investments designated at Fair Value through Other Comprehensive Income as at March 31, 2025, consequently the impact of change in equity price on non-current investment recorded at Fair value through Profit and Loss and other investment designated as Fair value Through Other Comprehensive Income is not significant.
c. Liquidity risk management
The Company's treasury under the guidance of Board of Directors have established an appropriate liquidity risk management framework. The Company manages liquidity risk through cash generation from business and have adequate banking facilities. The Company continuously forecasts and monitors actual cash flows and matches the maturity profiles of financial assets and liabilities.
Borrowing facilities - both funded and non-funded are secured by a pari-passu charge on the current assets and immovable properties of the Company - both present and future.
(iii)Fair value measurements
This note provides information about how the Company determines fair value of various financial assets and financial liabilities.
Fair value of the Company's financial assets and financial liabilities that are measured at fair value on a recurring basis.
Some of the Company's financial assets and financial liabilities are measured at fair value at the end of the reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation techniques and inputs used):
Assumptions:
Stock Price: Closing price on National Stock Exchange of India Ltd. as on the date prior to the date of the Nomination and Remuneration Committee approving the grant has been considered.
Volatility: The expected price volatility is based on the historic volatility, adjusted for any expected changes to future volatility due to public available information.
Risk-free rate of return: The risk-free interest rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero-coupon yield curve for Government Securities.
42. Corporate Social Responsibility: (Refer Corporate Social Responsibility Report)
During the year, the Company incurred an aggregate amount of ^77.70 million (Previous year: ^57.18 million) towards corporate social responsibility. In addition an amount of ^0.68 million has been set off from the brought forward excess CSR spent in the earlier years and an amount of ^0.15 million has been carried forward for adjustment in subsequent years. Thus fulfilling the current year's mandatory obligation of ^78.23 million (Previous year: ^63.38 million) to be spent as per provision of Section 135 of the Companies Act, 2013 read with relevant schedule and rules made thereunder.
Note 43: Events after the reporting period
Refer Note: 12 for the Final dividend recommended by the Directors which is subject to the approval of the shareholder in the ensuing Annual General Meeting.
Note 44: Additional regulatory information required by Schedule III(i) Details of benami property held
No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(ii) Borrowing secured against current assets
The Company has borrowings from banks on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with banks are in agreement with the books of accounts.
(iii) Wilful defaulter
The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
(iv) Relationship with struck off companies
The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.
(v) Compliance with number of layers of companies
The Company has complied with the number of layers prescribed under the Companies Act, 2013.
(vi) Compliance with approved scheme(s) of arrangements
The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
(vii) Utilisation of borrowed funds and share premium
The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
(viii) Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of accounts.
(ix) Details of crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
(x) Valuation of Property, Plant and Equipment, intangible asset and investment property
The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.
(xi) The Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) has 2 CICs as part of the Group.
46. Rounding off
All amounts disclosed in the financial statements and notes have been rounded off to the nearest millions as per the requirement of Schedule III, unless otherwise stated.
47. Approval of financial statements
The financial statements were reviewed and recommended by the Audit Committee and has been approved by the Board of Directors at their meeting held on May 12, 2025
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