Dear Members,
Your Directors are pleased to present the 28th Annual Report together with the Audited Financial Statements of the Company for the Financial Year ended 31st March 2024.
FINANCIAL RESULTS ?, n CrQre
RIGHTS ISSUE OF EQUITY SHARES
During the year, the Company successfully completed the Rights Issue of ' 448 Crore. The Rights Issue was open from 21st June 2023 to 5th July 2023 and was oversubscribed by 32%. After the allotment of Equity Shares in Rights Issue, the Issued, Subscribed and Paid-up Equity Share Capital of the Company increased from ' 124.56 Crore to ' 224.22 Crore and the shares were listed at BSE Ltd.
REDEMPTION OF DEBENTURES
Your Company had issued and allotted 3,500 nos. of Secured Rated Listed Guaranteed Redeemable Non-Convertible Debentures ("NCDs") of face value of ' 10,00,000 (Rupees Ten Lac) each for cash at par aggregating ' 350 Crore (Rupees Three Hundred Fifty Crore) During the year, the Company by exercising its Call Option, has fully redeemed the said NCDs of ' 350 Crore.
PROGRESS OF THE PROJECTS & EXPANSION
Your Company has successfully completed its Expansion Project - involving additional Clinker Line of 1.50 Million Tonnes Per Annum and Cement Grinding Unit of 2.50 Million Tonnes Per Annum. With this the Total Clinker Capacity stands doubled viz., from 1.50 Million Tonnes Per Annum to 3.00 Million Tonnes Per Annum (Phase I) and Total Cement Capacity stands enhanced from 2.20 Million Tonnes Per Annum to 4.70 Million Tonnes Per Annum (Phase II). Your Company stands well aligned on the right path to strengthen its existing base and make deeper penetration in the market.
LISTING OF SHARES
The Directors are pleased to inform that the Equity Shares of the Company have been listed on National Stock Exchange of India Ltd. w.e.f. 23rd April 2024 to provide more liquidity and enhanced visibility to the Equity Shares of the Company.
PERFORMANCE REVIEW
Indian economy continued to grow at a fast pace in FY23-24 beating the 7% mark. According to IMF, the growth trajectory for India in FY24-25 is to remain in similar order. To keep in pace with India's growth and growing space for infrastructure your Company is already set forth in right direction. In FY 2023-24, your Company achieved a combined growth of Cement (Incl. Clinker) Volume in the order of 28% on YoY basis.
The Company also reaped benefits of lowered fuel prices (Petcoke and coal) and thereby other input costs which have positively impacted the profitability. Your Company continues working on adopting innovative solutions such as waste heat recovery, solar or renewable energy and improving its operational efficiencies at all levels and maximizing its realisation per tonne by optimising the product mix, introduction of new brands and augmenting the distribution network and optimising its distribution cost. The Company has always followed the philosophy of sustainable growth. Share of renewable energy stood at 43% of our total energy basket. Similarly, we are continuously working to increase the use of Alternative Fuels and Raw Materials (AFR); reduce water consumption; and reduce carbon emissions. These measures towards sustainable operations shall stand in good stead in time to come and help the Company to raise finances at a lower cost for its future growth plans and ambitions. It may be noted that due to efficiencies displayed by your Company and effective management strategies, we were able to grow to current levels.
AWARDS AND RECOGNITIONS
Your Company is pleased to mention some of the prestigious awards and accolades won during the year:
• Fastest Growing Cement Company in India's small category at the Indian Cement Review Awards.
• Economic Times Iconic Brand of India.
• Our Brand Platinum Heavy Duty Cement awarded as "Economic Times Promising Brand of India 2022" (Received in 2023).
• 21st Greentech Foundation Awards 2023 for outstanding achievement in Safety Excellence and Construction Safety.
• "Gold Award in Safety Excellence Category" instituted by " FAME" (Foundation for Accelerated Mass Empowerment).
• CII's 24th National Award for Excellence in Energy Management.
• CII's Performance Excellence Awards 2023 for Solar, Wind and Hybrid Plants, UCWL was awarded for "Excellence in Performance" under "Ground Mounted Solar Category".
• JKO Customer champion Awards (Team Category)
INTERNAL FINANCIAL CONTROLS
The Company has in place a strong Internal Financial Control System, Policies & Procedures which ensures accuracy & completeness of Accounting Records and helps also in timely preparation of the reliable Financial Statements. These Internal Financial Control Systems are designed for safeguarding the assets of the Company and for the prevention and detection of errors & frauds commensurate with the size, nature & complexities of the Operations of the Company. These Policies & Procedures were found by the Statutory Auditors of the Company to be adequate for smooth, orderly & efficient conduct of the business of the Company.
The Company has in place specific Standard Operating Practices (SOPs) for its various functions. These SOPs are periodically reviewed by the External & Internal Auditors of the Company and exceptions are reported for corrective actions.
The Internal Financial Control Systems are regularly reviewed to ensure their effectiveness, taking into account the essential components of Internal Financial Controls as stated in the Guidance Note on the Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on such assessments carried out by the Management, no reportable material weaknesses in the adequacy in the System of Operations of Internal Financial Controls were observed during the year.
CORPORATE SOCIAL RESPONSIBILITY
Serving the society towards improving the quality of life of the community at large has always been a priority of your Company. The concept of socially responsible business is deeply ingrained in our corporate DNA right from the inception and since we have been pioneering and delivering multiple need based and high impact CSR projects for needy and vulnerable communities & families living around our business operations. The Company's CSR vision clearly states to strengthen community relationship and to bring sustainable change in the quality of life of neighborhood community through innovative solutions in Education, Health, Water & Sanitation, Skills Development, Livelihood Promotion and Rural Development.
CSR is the continuing commitment by the Company to behave ethically and contribute to economic development, while improving the quality of life of the work force, their families as well as of the local community and society at large. The Company is committed to bring long term transformational changes in the lives of the neighborhood communities of the plant through sustainable and impactful projects around the key development issues in the local area. Through its various CSR projects the Company has been able to directly impact and bring positive changes in the lives of more than 40,000 people living in the villages around the plant at Dabok in Udaipur.
During the reporting year the Company designed and implemented community need based CSR projects and targeted marginalised & vulnerable families with an aim to improve their lives through projects like UCWL Aarogya, Vidya, Aajivika, Swajal & Swachhta, Gramin Vikas, Kaushal Prashikshan etc. Some of the key initiatives taken during the reporting year were health camps, career counselling program for Standard X-XII students in government schools, schools' infrastructure development, job linked skill development training and placement for school & college drop-outs, agriculture and livestock development, rural infrastructure development among others.
The Company demonstrated its commitments towards inclusive development and implemented several "Ongoing Projects" in thrust areas of Health; Water & Sanitation; Education, Skilling & Livelihoods and Rural Development. Under UCWL Aarogya project regular health camps were organized to provide quality health services at the doorsteps, which benefitted more than 21000 people. Under UCWL Vidya project career counselling sessions were organized for students in the government schools; schoolbags with inbuilt detachable table were provided to more than 500 students of government primary school; Jawahar Navodaya Entrance Examination Coaching was started for Standard V students and several eye and dental camps were organized in government schools. To improve livelihoods under Project Aajivika, the Company undertook multiple on-farm and off-farm activities including employability skills trainings viz. dairy & vermicompost, domestic home appliances repairing, artificial jewellery making etc. to support youths, women and families to ensure sustainable income. Number of youths were provided employability trainings and were facilitated for the placement locally. Number of small and marginal farmers were supported with soil testing, seeds, and training on improved agriculture practices. Livestockdevelopment has also been one of the key activities to strengthen livelihoods of the communities and families. As a part of livestock development, the Company had undertaken door-to-door veterinary services including infertility treatment, awareness on disease management and fodder development in villages. Under UCWL Aajivika Project, vermicompost support was provided to number of farmers which resulted in reduction in the use of chemical fertilizer and increase in family income. To give impetus to youth skilling & education, the Company had set up skilling centre. Under UCWL Swajal & Swacchta project the Company undertook repair of anicut for watershed development among others. Under UCWL Gramin Vikas project, the Company undertook renovation of Gram Panchayat building, constructed washroom & changing room for women. The Company also undertook repair of government school buildings in the plant nearby area.
Your Company is also promoting employee engagement in various CSR projects to create socially responsible behaviour among its employees.
The Company received number of appreciation letters for its meaningful and life changing CSR initiatives during the year.
The Company has requisite Corporate Social Responsibility Policy in accordance with the provisions of the Companies Act, 2013 (Act) and Rules made there under, as amended. The CSR Policy along with brief description of CSR projects are disclosed on the website of the Company at www.udaipurcement.com .
The Annual Report on the CSR activities undertaken by the Company during the Financial Year under review, in the prescribed format, is annexed to this Report as Annexure 'A'.
RELATED PARTY TRANSACTIONS
During the Financial Year ended 31st March 2024, all the contracts or arrangements or transactions entered into by the Company with the Related Parties were in the ordinary course of business, on an arm's length basis and were in compliance with the applicable provisions of the Companies Act, 2013 ('Act') and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).
Form AOC-2 containing the details of the material Related Party Transactions entered into during the Financial Year 2023-24 as per the Related Party Transactions Policy is attached as Annexure 'B' to this Report. The Related Party Transaction Policy is available on the website of the Company.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT
The particulars of loans given, guarantees or securities provided, and investments made as required under Section 186 of the Act, if any, are given in the Notes to the Financial Statements and forms part of it.
CONSERVATION OF ENERGY ETC.
The details as required under Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 are annexed to this Report as Annexure 'C' and forms part of it.
AUDITORS
(a) Statutory Auditors and their Report
M/s Bansilal Shah & Co., Chartered Accountants (Firm Registration Number: 000384W), were appointed as the Statutory Auditors of the Company for their second term of five consecutive years to hold office from the conclusion of the 23rd Annual General Meeting (AGM) held on 17th August 2019 until the conclusion of the 28th AGM to be held in the year 2024, being the maximum permissible term. Accordingly, pursuant to Section 139 (2) of the Act, they will not be eligible for re-appointment as the Auditors of the Company at the ensuing AGM.
The Board of Directors places on record its appreciation of the valuable services rendered by M/s Bansilal Shah & Co., as the Statutory Auditors of the Company. The observations of the Auditors in their report on Accounts and the financial statements, read with the relevant notes are self-explanatory. The Auditors' Report does not contain any qualification, reservation, adverse remark or disclaimer. Further, no fraud has been reported by the Auditors to the Audit Committee or the Board.
Subject to the approval of the Members, the Board of Directors of the Company has recommended the appointment of M/s. S.S. Kothari Mehta & Co. LLP, Chartered Accountants (Firm Registration Number: 000756N) as the Statutory Auditors of the Company for a period of five consecutive years commencing from the conclusion of 28th AGM till the conclusion of 33rd AGM pursuant to Section 139 of the Act. Requisite Resolution regarding their appointment is included in the Notice of ensuing AGM for approval by the Members.
(b) Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Act, the Board of Directors appointed Shri Namo Narain Agarwal, Company Secretary in Practice, as Secretarial Auditor to carry out Secretarial Audit of the Company for the Financial Year 2023-24.
The Report given by him for the said Financial Year in the prescribed format is annexed to this Report as Annexure 'D'. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
(c) Cost Auditor and Cost Audit Report
M/s HMVN & Associates, Cost Accountants, conducted the Audit of cost records of the Company for the Financial Year ended 31st March 2023 and as required, Cost Audit Report was duly filed with the Ministry of Corporate Affairs, Government of India. The Company has duly maintained requisite Cost Accounts and Records pursuant to Section 148(1) of the Act.
The Audit of the Cost Records of the Company for the Financial Year ended 31st March 2024 is being conducted by the said Firm and the Report will be duly filed.
DEPOSITS
The Company has neither invited nor accepted any deposits from the public.
PARTICULARS OF REMUNERATION
Disclosure of the ratio of the remuneration of each Director to the median employee's remuneration and other requisite details pursuant to Section 197(12) of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to this Report as Annexure 'E'.
Further, particulars of employees pursuant to Rule 5(2) & (3) of the above Rules, form part of this Report. However, in terms of provisions of Section 136 of the Act, the Annual Report including Accounts for the Financial Year 2023-24, is being sent to all the Members of the Company and others entitled thereto, excluding the said particulars of employees. The said information is available for inspection at the Registered Office of the Company during business hours on working days of the Company upto the ensuing AGM. Any Member interested in obtaining such particulars may write to the Company Secretary.
EXTRACT OF ANNUAL RETURN
The Annual Return as required under Section 92 and Section 134 of the Act, read with Rules made thereunder is available on the website of the Company and can be accessed at https://udaipurcement.com/annual-return/
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant to Section 152 of the Act, Smt. Vinita Singhania (DIN: 00042983), Chairperson retires by rotation at the ensuing AGM of the Company and being eligible, has offered herself for re-appointment. The Board recommends her re-appointment.
Based on the recommendations of Nomination & Remuneration Committee (NRC), the Board has re-appointed:
(i) Shri Shrivats Singhania (DIN: 02359242) as Director & CEO for a term of 5 years w.e.f. 1st April 2025 and;
(ii) Shri Naveen Kumar Sharma (DIN: 08152305) as Whole-time Director, for a term of 3 years w.e.f. 1st October 2024, subject to requisite approval of Members of the Company in the ensuing AGM.
Further, based on the recommendations of NRC, the Board has appointed:
(i) Shri Sadhu Ram Bansal (DIN: 06471984) as an Additional Director in the category of Independent Director on the Board of Directors of the Company for a term of three consecutive years w.e.f. 1st July 2024. The Company has received requisite declaration from Shri Bansal regarding his independence pursuant to Section 149 of the Act and Regulation 16 of the Listing Regulations. As an Independent Director, Shri Bansal shall not be liable to retire by rotation. In the opinion of the Board, he possesses requisite expertise, integrity, proficiency and experience.
(ii) Shri Sudhir A. Bidkar (DIN:00113646) as an Additional Director in the category of Non-Executive Non-Independent Director on the Board of Directors of the Company, w.e.f. 1st July 2024. As Non-Executive Non-Independent Director, Shri Bidkar shall be liable to retire by rotation.
The Company has received requisite Notices under Section 160 of the Act from Members proposing the names of above Directors for appointment in the ensuing AGM. Relevant details regarding their appointment are given in the Notice of ensuing AGM. As
Additional Directors, Shri Sadhu Ram Bansal and Shri Sudhir A.Bidkar hold office upto the date of ensuing AGM. The Board recommends their appointments to the Members for their approval in the ensuing AGM.
The Board has also taken on record the declarations and confirmations received from all the Independent Directors of the Company regarding their independence pursuant to Section 149 of the Act read with Rules made thereunder and Regulation 16 of the Listing Regulations.
Shri O. N. Rai (DIN: 00033142), an Independent Director on the Board of the Company, passed away on 1st April 2024. The Board places on record its sincere appreciation for the valuable contribution and guidance received from him during his tenure.
Except as stated above, there was no other change in Directors and Key Managerial Personnel of the Company, during the year under review.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the Financial Year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals which could impact the going concern status of the Company and its future operations. Further, no application was made or no proceeding was pending as at the end of the year under the Insolvency and Bankruptcy Code, 2016.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company and the date of this report.
CHANGE IN THE NATURE OF BUSINESS
During the Financial Year under review, there was no change in the nature of business of the Company.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility and Sustainability Report of the Company for the Financial Year 2023-24 in the prescribed format containing disclosures on Environmental, Social & Governance is given in a separate section of the Annual Report and forms a part of it.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT
Your Company reaffirms its commitment to the highest standards of Corporate Governance practices. Pursuant to the Listing Regulations, Corporate Governance Report and Management Discussion & Analysis along with Statutory Auditors' Certificate regarding compliance of conditions of Corporate Governance are made part of this Report as Annexure 'F' & 'G' respectively.
The Corporate Governance Report which forms part of this Report, inter alia, covers the following:
(a) Particulars of the four Board Meetings held during the Financial Year under review;
(b) Salient features of the Nomination and Remuneration Policy;
(c) The manner in which formal annual evaluation of the performance of the Board of Directors, of its Committees and of individual Directors has been made;
(d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism;
(e) Details regarding Risk Management Committee;
(f) Dividend Distribution Policy;
(g) Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. COMPLIANCE OF SECRETARIAL STANDARDS
Based on the Secretarial Audit Report of the Secretarial Auditor, the Company has duly complied with the applicable Secretarial Standards on Meetings of the Board of Directors and General Meetings issued by the Institute of Company Secretaries of India.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Act, your Directors state that:-
(a) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) such accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and
prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit and loss of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) the internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively; and
(f) the proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems are adequate and operating effectively.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation for the continued support and cooperation received from various State Governments. The Directors also thank the Financial Institutions, Banks, Shareholders, Suppliers, Dealers and in particular the valued Customers for their trust and patronage. The overwhelming response to the Rights issue reflects the trust and confidence reposed by you, in the Company. We value the same.
Your Directors record their appreciation for the dedication and hard work put in by 'Team-UCWL', which has enabled the Company to continue to grow stronger in these challenging times. Last but not the least, the Directors also wish to place on record their sincere gratitude towards JK Lakshmi Cement Limited, our Holding Company for all the financial, technical, marketing and operational assistance extended by them.