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Udaipur Cement Works Ltd.

BSE: 530131 | NSE: JKUDYOG | Series: NA | ISIN: INE225C01029 | SECTOR: Cement - Major

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Udaipur Cement Works is not listed on NSE

Annual Report

For Year :
2018 2017 2016 2015 2014 2012 2011 2010 2008

Director’s Report

Dear Members,

The Directors are pleased to present the 21st Annual Report together with the Audited financial statements of the Company for the Financial Year ended 31st March 2017.

PERFORMANCE

During the year, the Company’s overall performance has been satisfactory. It has achieved cement production of 2.71 Lac tonnes and sales of 2.75 Lac tonnes. The Company continues to lay emphasis on cost optimization at all levels. The Company has successfully completed its Revival and Rehabilitation Scheme with start of its commercial production from 31st March 2017 at its integrated Cement plant at Udaipur. The dispatches of cement & clinker have since begun.

FINANCIAL RESULTS

Amount Rs. in Lacs

Particulars

2016-17

2015-16

Sales & Other Income

9770.95

10056.03

Profit / (Loss) before Interest & Depreciation

385.23

133.21

Profit / (Loss) before Depreciation

369.90

(94.52)

Depreciation

489.20

554.22

Profit / (Loss) before Exceptional Items & Tax

(119.30)

(648.74)

Exceptional Items - Net Income

404.12

244.27

Deferred Tax

-

(1186.85)

Other comprehensive Income

(10.82)

(1.54)

Total Comprehensive Income

274.00

780.84

PROGRESS OF THE PROJECT

The Company has commissioned its 1.24 MTPA clinkerisation facility in March 2017 making the unit an integrated cement plant with cement grinding capacity of 1.60 MTPA. The Company has so far spent Rs.763 Crores towards revival and rehabilitation of the Company with modernization and upgradation of its Cement Plant.

EXTRACT OF ANNUAL RETURN

An extract of the Annual Return as on 31st March 2017 in the prescribed form MGT-9 is attached as Annexure ‘A’ to this Report and forms part of it.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees or securities and investments covered under the provisions of section 186 of the Companies Act, 2013 are given in the financial statements.

RELATED PARTY TRANSACTIONS

As the Members are aware, the Company has been receiving technical and financial support from both JK Lakshmi Cement Ltd., the Holding Company (JKLC) and Hansdeep Industries & Trading Company Ltd., the Fellow Subsidiary (HITCL). The Company also does sourcing of its requirements of clinker & sale of cement/clinker etc. from the above companies. All the contracts or arrangements or transactions entered into by the Company with the said Related Parties were in the ordinary course of business and on arms’ length basis and were in compliance with the applicable provisions of the Companies Act, 2013 (Act) and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. A statement showing particulars of contracts or arrangements entered into with JKLC & HITCL in the prescribed Form AOC-2, pursuant to Section 134(3)(h) of the Act, is attached as Annexure ‘B’.

The Board has recommended resolutions for approval of the Members at the forthcoming Annual General Meeting in respect of Material Related Party Transactions to be entered into with JKLC in the ordinary course of business and on arm’s length basis.

The Related Party Transaction Policy approved by the Board is available on the website of the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to Section 152 of the Companies Act, 2013 (Act), Shri Rohni Kumar Gupta retires by rotation and being eligible offers himself for re-appointment at the forthcoming Annual General Meeting (AGM). The Board of Directors of the Company has also re-appointed Shri Gupta as Wholetime Director of the Company, for a term of one year w.e.f. 1st April 2017, subject to requisite approval of Members of the Company at the forthcoming AGM. The Board recommends his re-appointment(s) as stated above.

Ms. Kumud Pahuja, Independent Director, resigned from the Directorship of the Company with effect from 18th March 2017 owing to personal reasons. The Board places on record its appreciation for the valuable services rendered by Ms. Pahuja during her tenure as the Independent Director of the Company.

The Board has appointed Ms. Poonam Singh as an Additional (Independent) Director of the Company for a term of five consecutive years with effect from 14th February 2017, subject to the approval of Members of the Company at the forthcoming AGM. In terms of Section 161 of the Act, Ms. Poonam Singh shall hold office as Director up to the date of the forthcoming AGM. The Company has received a notice in writing together with requisite deposit from a Member of the Company proposing her candidature as a Director. The Board recommends the appointment of Ms. Poonam Singh as an Independent Director of the Company.

All the Independent Directors of the Company have given requisite declarations that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

CONSERVATION OF ENERGY ETC.

The details as required under Section 134 (3) (m) read with the Companies (Accounts) Rules, 2014 is annexed to this Report as Annexure ‘C’ and forms part of it.

DEPOSITS

The Company has neither invited nor accepted any deposits from the public.

AUDITORS

(a) Statutory Auditors and their Report

M/s Om Prakash S. Chaplot & Co., Chartered Accountants, were appointed as Auditors of the Company for a term of three consecutive years to hold the office from conclusion of the 18th Annual General Meeting (AGM) held in the year 2014 till the conclusion of its 21st AGM to be held in the year 2017, being the maximum permissible term. Accordingly, pursuant to Section 139 (2) of the Companies Act 2013, (Act) they will not be eligible for re-appointment as the Auditors of the Company at the forthcoming AGM.

The Board of Directors places on record its appreciation of the valuable services rendered by M/s Om Prakash S. Chaplot & Co., as the 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.

Subject to the approval of the Members, the Board of Directors of the Company has recommended the appointment of M/s Bansilal Shah & Co., Chartered Accountants (Firm Registration Number: 000384W) as the Auditors of the Company for a period of two years commencing from the conclusion of 21st AGM till the conclusion of 23rd AGM pursuant to Section 139 of the Act. Requisite Resolution regarding their appointment is included in the Notice of forthcoming AGM for approval by the Members.

(b) Secretarial Auditor and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013, 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 2016-17. 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, Delhi conducted the audit of cost records of the Company for the Financial Year ended 31st March 2016 and as required, Cost Audit Report was duly filed with the Ministry of Corporate Affairs, Government of India.

The Audit of the cost accounts of the Company for the Financial Year ended 31st March 2017 is being conducted by the said firm and their Report will also be filed.

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 Companies Act, 2013 (Act) read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, 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 said Act, the Report and Accounts are 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 forthcoming AGM. Any Member interested in obtaining such particulars may write to the Company Secretary.

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 would impact the going concern status of the Company and its future operations.

CORPORATE GOVERNANCE

Your Company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to Regulation 34 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a Management Discussion and Analysis, Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance are made a part of this Report. The Corporate Governance Report also covers the following:

a) Particulars of the four Board Meetings held during the Financial Year under review.

b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, the criteria for performance evaluation of Directors.

c) The manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors.

d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism.

e) Details regarding Risk Management.

DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 134(3)(c) of the Companies Act, 2013, 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) the 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 were adequate and operating effectively.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation for the continued support and cooperation received from various Government Authorities, Lending Institutions and Business Associates. Your Directors also thank our valued customers and the esteemed Members for their trust and patronage.

Your Directors also wish to place on record their appreciation of the contribution made by the Company’s employees at all levels whose hard work, solidarity and indomitable spirit have made the Company’s revival possible. A special thanks to JK Lakshmi Cement Limited, our Holding company and Hansdeep Industries & Trading Company Limited, a Fellow subsidiary, to whom the Company owe a great deal of gratitude without whose support financial turnaround and revival of the Company would not have been possible.

On behalf of the Board of Directors

New Delhi (Onkar Nath Rai)

Date: 10th May 2017 Chairman

Director’s Report