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Ucal Fuel Systems Ltd.

BSE: 500464 Sector: Auto
NSE: UCALFUEL ISIN Code: INE139B01016
BSE 00:00 | 22 Oct 148.80 -2.20
(-1.46%)
OPEN

152.20

HIGH

152.45

LOW

147.15

NSE 00:00 | 22 Oct 148.65 -2.20
(-1.46%)
OPEN

151.00

HIGH

152.80

LOW

147.85

OPEN 152.20
PREVIOUS CLOSE 151.00
VOLUME 2380
52-Week high 206.10
52-Week low 108.20
P/E 7.53
Mkt Cap.(Rs cr) 329
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 152.20
CLOSE 151.00
VOLUME 2380
52-Week high 206.10
52-Week low 108.20
P/E 7.53
Mkt Cap.(Rs cr) 329
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ucal Fuel Systems Ltd. (UCALFUEL) - Director Report

Company director report

The Directors hereby present the 35th Annual Report together with theaudited accounts of the company for the year ended 31st March 2021.

FINANCIAL HIGHLIGHTS

The performance of the company for the year ended 31st March 2021 is asfollows: (` in lakhs)

For the year ended

Particulars 31.03.2021 31.03.2020
Revenue from operations 49263.43 50967.70
Total Expenditure 43874.13 43964.26
Operating Income 5389.30 7003.44
Other Income 466.22 766.39
Profit before Interest Depreciation Tax and Exceptional items 5855.52 7769.83
Interest 2356.18 2185.44
Depreciation 2108.15 2051.98
Profit before Tax & Exceptional items 1391.20 3532.41
Exceptional items - (10509.00)
Profit/(Loss) before Tax 1391.20 (6976.59)
Tax Expense/(credit) (2141.72) 1598.45
Profit/(Loss) after Tax 3532.92 (8575.04)
Balance of profit brought forward from last year 10264.97 21316.27
Amount Available for appropriation 13797.89 12741.23
Appropriations
Transfer to general reserves - -
Dividend paid during the year - (1990.23)
Tax on dividend - (392.93)
Other comprehensive Income/ (loss) 72.29 (93.10)
Balance Profit Carried to balance sheet 13870.18 10264.97

DIVIDEND

The Board has out of the profits available for appropriation recommended a dividend of`2 per equity share for the financial year 2020-21 on the 22113625 equity shares offace value of `10 each for the approval of the shareholders at the ensuing Annual GeneralMeeting. The total dividend amount would be `442.27 lakhs. The dividend if approved bythe shareholders will be paid within the due date to all the eligible shareholders whosenames appear in the register of members of the company as on the record date fixed forthis purpose. The dividend declared is as per the dividend policy of the company. Thedividend policy is disclosed in the website of the company www.ucalfuel.com weblink:http://www. ucalfuel.com/policy-dividend.pdf.

TRANSFER TO GENERAL RESERVE

There has been no transfer to the general reserve of the company for the financial year2020-2021.

SHARE CAPITAL

The paid-up equity share capital of the company as on 31st March 2021 was`221136250. The company has not issued any Equity Shares Sweat Equity Shares EmployeeStock Options and not called for Buy back of Shares during the financial year.

FINANCIAL PERFORMANCE

The net revenue from the operations of the company stood at `49263 lakhs in thefinancial year 2020-2021 as against `50968 lakhs in the financial year 2019-20 resultingin a decreased revenue of 3.46%. This can be attributed to the reduced offtake by theexisting customers owing to the ensuing change in the emission norms from 1stApril 2020 and also due to a general slowdown in the economy during COVID-19. Theearnings before Interest Tax and Depreciation (EBITDA) stood at `5856 lakhs inthe financial year 2020-2021 as against `7770 lakhs in the financial year 2019-20 as inaddition to a decrease in the net revenue from operations there was also a constraint inraising selling prices despite an increase in the input cost.

The exports stood at `984 lakhs in the financial year 2020-2021 as compared to `740lakhs in the financial year 2019-20. Continuous efforts are on to enhance thecompany’s presence in the export market. The spares sales of the company in thefinancial year 2020-2021 stood at `9270 lakhs as against `6690 lakhs in the previousfinancial year. The offtake by the dealers and the Original Equipment Manufacturers (OEMs)increased in 2020-2021 resulting in a 39% increase. The company has put in extra effortsto expand its dealership network and become competitive in the spares market which isbeset with spurious products. The Profit/(Loss) After Tax (PAT) for the financial year2020-2021 stood at `3533 lakhs as against a loss of `(8575) lakhs of the previousfinancial year. The company’s earnings per share is `16 in financial year 2020-21 ascompared to "Nil" for the financial year 2019-2020 due to the exceptional itemof `10509 lakhs which is the provision for impairment of value of investment made in UcalHoldings Inc as mandated under the Accounting Standards. However the consolidatedfinancial statements of the company show a profit of `2886 lakhs with earnings per shareof `13. To augment its capacity to meet the requirements of its customers under thestringent BSVI emission norms the company has spent `1630 lakhs in capital investment inthe financial year 2020-2021 as compared to `6092 lakhs spent in the financial year2019-20. The company continues its thrust on R&D and has spent `1184 lakhs in thefinancial year 2020-2021 as against an amount of `1585 lakhs spent in the previousfinancial year. The new BSVI emission norms came into effect from 1st April2020 and the company has successfully developed and commercialised the electroniccarburettor and other relevant components. Efforts are on to expand the indigenous marketfor the same. The company continues to supply the mechanical carburettor for the exportmarket in addition to supplying spares to both OEMs and dealers.

DIRECTORS

Mr. Ram Ramamurthy (DIN: 06955444) retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for reappointment. Necessary resolution for hisreappointment has been set out in detail in the Notice convening the ensuing AnnualGeneral Meeting. The Board recommends his reappointment as Director of the company.

Mr. Jayakar Krishnamurthy’s (DIN: 00018987) term as Managing Director ends on 31stAugust 2021. It is proposed to reappoint him as Managing Director for a further period of5 five years from 1st September 2021 to 31st August 2026 on aremuneration as detailed in the Notice convening the Annual General Meeting.

Mr.S. Natarajan (DIN: 0155988) resigned from the Board with effect from 19.07.2021. TheCompany has benefited greatly from his association and the Board places on record itssincere appreciation for the services rendered by him during his tenure as director.

Mr. I.V. Rao (DIN: 00329370) was appointed as Additional Director (non-executive andindependent category) in the Board meeting held on 13th August 2021 subject tothe appointment being approved by the shareholders at the ensuing Annual General Meeting.Appropriate resolution for the appointment has been set out in detail in the Noticeconvening the ensuing Annual General Meeting. The Board recommends his appointment asIndependent Director.

The information on Board meetings committees of the Board independent directorsBoard diversity remuneration policy familiarization program for independent directorsand Board evaluation are mentioned in the Corporate Governance Report.

Brief resume/details of Directors who are to be reappointed as mentioned herein hasbeen furnished along with the explanatory statement in the Notice convening the ensuingAnnual General Meeting.

DIRECTORS’ RESPONSIBILITY STATEMENT

In terms of section 134(3)(c) read with section 134(5) of the Companies Act 2013 thedirectors to the best of their knowledge and belief and according to information andexplanation obtained by them confirm that

a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to any material departures;

b) Such accounting policies have been selected and applied consistently and suchjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the company at the end of the financial year31st March 2021 and of the profit and loss of the company for the year ended 31stMarch 2021.

c) Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets 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) Proper internal financial controls to be followed by the company have been laid downand such internal financial controls are adequate and are operating effectively.

f) Proper systems to ensure compliance with the provisions of all applicable laws havebeen devised and such systems are adequate and are operating efficiently.

RESIGNATION OF COMPANY SECRETARY

Ms. Rekha Raghunathan stepped down as Company Secretary Compliance Officer and KeyManagerial Personnel of the Company with effect from the end of the working day of 10thJune 2021.

AUDIT COMMITTEE

The audit committee conforms to the requirements of Section 177 of the Companies Act2013 and Regulation 18 of the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015. Mr.S. Natarajan resigned from theBoard with effect from 19th July 2021. Ms.Lakshminarayanan Priyadarshini andMr.I.V. Rao were inducted into the Audit Committee on 13th August 2021. Themembers of the Audit Committee as on date of this report are Mr.S.Balasubramanian Mr.Jayakar Krishnamurthy Ms.Lakshminarayanan Priyadarshini and Mr.I.V.Rao. Mr.S.Balasubramanian is the Chairman of the Audit committee. The committee met 5 times duringthe year. Detailed disclosure on the terms of reference and meetings are mentioned in thecorporate governance report.

STATUTORY AUDITORS

M/s R. Subramanian and Company LLP Chartered Accountants Chennai (RegistrationNumber: 004137S/S200041) were appointed statutory auditors of the company for a period offive consecutive years commencing from the conclusion of the 31st AnnualGeneral Meeting held on 28th September 2017 till the conclusion of the 36thAnnual General meeting subject to the ratification of their appointment by theshareholders at the Annual General Meeting every year. However as per the amendment inSection 40 of the Companies Amendment Act 2017 the ratification of the appointment ofstatutory auditor at the Annual General Meeting every year is not required. The emphasisof matter specified in the Independent auditor’s report on the Standalone FinancialStatements has been explained in Note No. 38 (c) of the notes to accounts.

SECRETARIAL AUDITOR

Pursuant to the provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hadappointed M/s. P. Sriram & Associates a firm of practising company secretaries assecretarial auditor of the company to undertake secretarial audit of the company for thefinancial year 2020-2021. The report of the secretarial auditor is given in Annexure-I andforms part of this report. It does not contain any qualification reservation adverseremark or disclaimer except the following; (a) No woman Independent Director on the Boardof the listed entity (from April 1 2020 till December 06 2020) (b) There was a shortfallin the minimum number of Independent Directors on the Board of the listed entity for theperiod from October 25 2020 (after considering the 3 months period allowed forreplacement by a new Independent Director from the date of resignation of an IndependentDirector) till December 06 2020 (c) The composition of Nomination and RemunerationCommittee as stipulated under the said regulation is not met for the period from October25 2020 (after considering the 3 months period allowed for replacement by a newIndependent Director from the date of resignation of an Independent Director) tillDecember 06 2020.

It was clarified that due to covid pandemic prevailing prior to 1.4.2020 with variouskinds of lock down by the central government state government and containment zonesresulted in additional disturbances and precaution action by the company. This hasresulted in the company additionally taking one and half months’ time to comply withthe requirement of appointing a woman independent director on the Board on 7thDecember 2020. Further the resignation of an Independent Director on 24th July2020 was a sudden one and the company had 3 months time to replace such vacancy of theIndependent Director till 23rd October 2020. The company has complied with theappointment of woman director on the Board with effect from 7th December 2020.

INTERNAL AUDITORS

M/s. P. Chandrasekar Chartered Accountants continue as internal auditors of thecompany. Their scope of work is periodically reviewed and updated by the audit committee.It includes among other things a review of the operational efficiency effectiveness ofsystems and controls in existence review of the processes to safeguard the assets of thecompany and assessing the strength of the internal control in all areas. The internalauditor’s report is discussed with the concerned stakeholders and corrective remedialaction is taken on a regular basis in consultation with the audit committee. Theinternal auditors were present at the audit committee meetings as and when required.

COST AUDITOR

In terms of Section 148 of the Companies Act 2013 (the Act) read with Companies (CostRecords and Audit) Rules 2014 as amended the Board of Directors have appointed Mr. L.Thriyambak Cost Accountant as Cost Auditor for the financial years 2020-2021 and2021-2022 on a remuneration of `180000 and `200000 per annum respectively subject tothe remuneration being ratified by the shareholders at the ensuing Annual General Meeting.The audit committee had recommended his appointment and remuneration subject to thecompliance of all the requirements as stipulated under the Act and circulars issuedthereunder. As specified by the Central Government under Section 148(1) of the CompaniesAct 2013 the cost records are required to be maintained by the Company and accordinglysuch accounts and records are made and maintained. Mr. L. Thriyambak has sent his consentfor appointment as Cost Auditor for the financial years 2020-2021 and 2021-2022.

THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY ANDBANKRUPTCY CODE 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THEFINANCIAL YEAR.

Not applicable to the company.

THE DETAILS OF DIFFERENCE BETWEEN THE AMOUNT OF THE VALUATION DONE AT THE TIME OF ONETIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIALINSTITUTIONS ALONG WITH THE REASONS THEREOF.

Not Applicable to the company.

SUBSIDIARY COMPANIES

The company has two wholly-owned subsidiaries.-.

Ucal Polymer Industries Limited (UPIL)-The revenue from operation of UPIL stood at`3832 lakhs in the financial year 2020-2021 as against `4994 lakhs in the financial year2019-2020. The decreased revenue can be attributed to the decreased offtake by UCAL FuelSystems Limited (UFSL) which continues to be the only major customer of UPIL. The net Profit/(Loss)after tax stood at `(56) lakhs in the financial year 2020-2021. UPIL continues to supportthe operations of UFSL by providing it an advantage in terms of pricing quality andtimeliness of supplies. UPIL has successfully met the new business requirements of UFSL asper BSVI emission norms.

Ucal Holdings Inc. (UHI)-The revenue from operations of UHI was `19186 lakhs in thefinancial year 2020-2021 as against `21780 lakhs in the financial year 2019-2020. Interms of US dollar the revenue from operations was $ 258 lakhs during financial year2020-2021 as compared to $ 300 lakhs in the financial year 2019-2020 recording a decreaseof 16%. UHI has earned a net profit/ (loss) after tax of `(502) lakhs during the financialyear 2020-2021 as against a net profit/(loss) of `(757) lakhs in the financial year2019-2020.

The reduced revenue from operations and the profitability is due to the down turn inthe US economy which had a direct impact on the operations of the company.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements for the year ended 31st March 2021 ofthe company and its subsidiaries together with the auditor’s report thereon areenclosed. The statement pursuant to sub section(3) of Section 129 of the Companies Act2013 read with Rule 5 of Companies (Accounts) Rules 2014 in the prescribed form AOC-1relating to the subsidiary companies is given in Annexure-II.

The consolidated results of the company and its subsidiaries show that a net profitafter tax of `2886 lakhs has been achieved during the financial year 2020-2021 as against`2115 lakhs in the financial year 2019-2020. The consolidated financial statements of2020-2021 have been prepared taking into account the audited financial statements of allthe subsidiary companies for the financial year 2020-2021 and all adjustments have beengiven effect to in the consolidated statements.

In terms of section 136 of the Companies Act 2013 the company has not attached thefinancial statements of the subsidiary companies. However the financial information ofthe subsidiary companies is disclosed in the annual report. The annual accounts reportsand other documents of the subsidiary companies will be available for inspection duringbusiness hours by any shareholder of the company at the registered office of the companyand also at the registered office of the concerned subsidiary and has also been posted onthe website of the company www.ucalfuel.com. The annual accounts reports and otherdocuments of the subsidiary companies will be dispatched to the shareholders upon receiptof a request from them.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The company’s CSR activities are in the field of education sports healthsanitation and preservation of culture and heritage. As per Section 135 of the CompaniesAct 2013 the CSR Policy was formulated by the CSR Committee and thereafter approved bythe Board. The CSR policy is displayed on the website of the company www.ucalfuel.comweblink: http://www.ucalfuel.com/policycsrp.pdf. Mr.S.Balasubramanian is thechairman of the committee and Mr. Ram Ramamurthy and Mr. Jayakar Krishnamurthy are theother members of the committee. For the financial year 2020-2021 the report on corporatesocial responsibility is given as Annexure-III and forms part of the Board’s Report.

PUBLIC DEPOSITS

During the financial year 2020-2021 the company has not accepted any deposits from thepublic within the meaning of Section 73 of the Companies Act 2013 read with Companies(Acceptance of Deposits) Rules 2014 and there is no outstanding amount on account ofprincipal or interest on deposits from public as on date.

INTERNAL CONTROL SYSTEMS AND ADEQUACY

The company has an efficient internal control system commensurate with its size andnature of business to safeguard the assets of the company and to ensure effectiveutilisation of resources. These controls ensure that transactions are completed on timeand in an accurate manner and by following proper procedures and systems. The Company hasexternal teams carrying out audit to strengthen the internal audit and risk managementfunctions. The internal auditors cover a wide area of operations and this is beingcontinuously reviewed by the audit committee. Internal audit is conducted on a quarterlybasis by a team of internal auditors and the reports together with the action takenreports are reviewed by the audit committee periodically. The Board and Audit Committeeensure that the internal financial control system operates effectively and they regularlyreview the effectiveness of internal control system in order to ensure due and properimplementation and due compliance with applicable laws accounting standards andregulatory norms. A system of management controls is also in place to ensure higher levelsof efficiency and to keep the organisation competitive. All the critical functions of thecompany i.e. Sourcing and Procurement Manufacturing Costing Finance Dispatch andSales are handled through Oracle system which is well-integrated. Checks and controls havebeen built into the system to handle the transactions. Existing internal controls provideadequate assurance to the management for all the transactions covering operationsinventory fixed assets financial records and compliance to statuary requirements. Thesystems and controls are reviewed periodically to ensure their effectiveness. The Boardhas adopted various policies like Material Subsidiary Policy Whistle Blower Policy andRelated Party Transactions Policy to safeguard the assets of the company to ensure timelyinformation and to prevent and detect frauds and errors.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information required under Section 134(3)(m)of the Companies Act 2013 read with Rule 8of the Companies (Accounts) Rules 2014 on energy conservation technology absorptionforeign exchange earnings and outgo is given in Annexure-IV.

EXTRACT OF ANNUAL RETURN

An extract of Annual Return in form MGT–9 is given in Annexure-V and forms part ofthis report. In accordance with Section 92(3) of the Companies Act 2013 the AnnualReturn of the Company as on March 31 2021 is available on the Company’s websitewww.ucal.com. weblink: http://www.ucal.com/investors/Extract of Annual Return-MGT 9.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013

Particulars of loans and advances given guarantees given securities provided andinvestments made are provided in the Note No.3411 and 43 of the notes to accounts of theStandalone Financial Statements.

MATERIAL CHANGES AND COMMITMENTS

The lockdown due to the Covid pandemic and the transition to BSVI emission norms had animpact on the turnover and the profitability of the company for the first two quarters ofthe financial year 2020-21. The impact of COVID-19 will be felt in the financial year2021-22 as it is expected to further drag the slowness in the auto / auto componentindustry and the revival is bound to be slow. The Company has gradually resumed operationsin its facilities as per the guidelines issued by the Ministry of Health and FamilyWelfare the Government of India. The Company has taken steps to build in all the safetyand precautionary measures across all its facilities and locations. In spite of thevarious challenges due to the lockdown the overall financial position of the companycontinues to remain stable. Except otherwise stated herein in this Report there are noother material changes and commitment affecting financial position of the Company from theend of Financial Year March 31 2021 and till the date of this Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Company has framed a Related Party Transaction Policy in compliance with Section177 of the Companies Act 2013 and Regulation 23 of SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 in order to ensure proper reporting andapproval of transactions with related parties. The Policy is available on the websitwww.ucal.com : http://www.ucal.com/policy-rpp.pdf.

The company did not enter into any material transaction with any related party whichmay have potential conflict with the interest of company at large during the financialyear 2020-2021 as per Section 188 of Companies Act 2013. All transactions entered intowith related parties were at an arm’s length basis and in the ordinary course ofbusiness. Form AOC-2 as required under Section 134(3)(h) of the Companies Act 2013 readwith Rule 8(2) of the Companies (Accounts) Rules 2014 is given in Annexure-VI and formspart of this report. The company’s related party transactions have been entered intofor meeting the requirements of operations and at an arm’s length basis and in theordinary course of business.

CHANGE IN NATURE OF BUSINESS

There was no change in the nature of business of the company during the year underreview.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS OF THE COMPANY

During the year 2020-2021 no significant and material orders were passed by the courtsregulators or tribunals affecting the going concern status of the company and its futureoperations.

NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE COMPANY’S SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

No company has become or ceased to be the company’s subsidiary joint venture orassociate company during the financial year 2020-2021.

PARTICULARS OF EMPLOYEES AND REMUNERATION

Mr. Jayakar Krishnamurthy Mr. Ram Ramamurthy Ms.Rekha Raghunathan Mr. V Ramanathanand Mr.Syed Abdul Hadi hold the office of key managerial personnel of the company as on 31stMarch 2021. Ms. Rekha Raghunathan stepped down as Company Secretary Compliance Officerand Key managerial Personnel with effect from the end of the working day of 10thJune 2021. The Company has received the necessary declarations from each IndependentDirector in accordance with Section 149(7) of the Act confirming that he/she meets thecriteria of independence as laid out in Section 149(6) of the Act and in accordance withRegulations 16(1) (b) and 25(8) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The Information required pursuant to Section 197 of theCompanies Act 2013 read with Rule 5 of the Companies (Appointment & Remuneration ofManagerial Personnel) Rules 2014 in respect of directors key managerial personnel andemployees are given in Annexure-VII to this report. The information as per Rule 5(2) and5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014forms part of this Report.

INDUSTRIAL RELATIONS/MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

UCAL’s HR function is aligned with the Company’s overall growth vision andcontinuously works on areas such as recruitment and selection policies disciplinaryprocedures reward/recognition policies learning and development programmes as well asall-round employee development. UCAL provides a safe and rewarding environment thatattracts and retains a talented team and where employees are engaged in deliveringexceptional results to the customers and investors. The Company acknowledges theindispensable role of all employees in driving continued success.

During the year cordial and healthy relations were maintained with all sections/levelsof employees.

WHISTLE BLOWER POLICY

With a view to establish a mechanism for protecting employees reporting unethicalbehaviour frauds or violation of the Company’s Code of Conduct the Board hasadopted a Whistle Blower Policy. No person has been denied access to the Audit Committee.The details are explained in the Corporate Governance Report and are also posted on thecompany’s website www.ucalfuel.com weblink: http://www.ucalfuel.com/policy-wbp.pdf.

SEXUAL HARASSMENT POLICY:

The company has in place a policy for prevention of sexual harassment in line with therequirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. An internal committee has been set up at each plant to redresssexual harassment complaints. All employees (permanent contractual temporary trainees)are covered under this policy. No complaint was received during the financial year2020-2021.

RISK MANAGEMENT POLICY:

The Company has a risk management mechanism in place to manage uncertainties throughidentification analysis assessment implementing and monitoring to reduce the impact ofrisks to the business. Key business risks are identified and reviewed on a regular basis.A strategy development committee has been formed to strategise on ways to mitigate thevarious risks. The necessary actions and precautions are taken on time to deal withvarious risks associated with the company and the Board discusses the same from time totime. The details and the process of Risk Management as were existing and implemented inthe Company are provided as part of Management Discussion and Analysis which forms partof this Report.

PREVENTION OF INSIDER TRADING

The company has framed a code of conduct for prevention of insider trading based onSecurities and Exchange Board of India (prohibition of insider trading) Regulations 2015.This code is applicable to all the board members/employees/ officers/designated persons ofthe company. This Code requires pre-clearance for dealing in the Company’s shares andprohibits the purchase or sale of Company shares by the Directors and the DesignatedPersons while in possession of unpublished price sensitive information in relation to theCompany and during the period when the Trading Window is closed.

CORPORATE GOVERNANCE

The company adheres to all the requirements of the code of corporate governance asstipulated in the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. A report on corporate governance along with certification of the Chief ExecutiveOfficer and Chief Financial Officer is attached in Annexure-VIII. Certificate from theStatutory Auditor regarding compliance of the conditions of corporate governance asstipulated by SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 isgiven in Annexure-IX. The Management Discussion and Analysis Report is attached inAnnexure-X.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report as applicable to the Company in terms of Regulation34(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 for thefinancial year 2020-21 is provided in Annexure-XI to this report. The Company practicesvarious business responsibility initiatives as per the framework developed under theguidance of the chairman and managing director who is also responsible for theimplementation of the same. The Business Responsibility Policies and the BusinessResponsibility Report are displayed on the website of the company website:www.ucalfuel.com. weblink: http://www.ucalfuel.com/policy.asp and weblink:http://www.ucalfuel.com/business-responsibility-report.asp

STATEMENT ON COMPLIANCE TO APPLICABLE SECRETARIAL STANDARD

The company has complied with all the applicable secretarial standards as issued by theInstitute of Company Secretaries of India during the year 2020-2021.

ANNUAL GENERAL MEETING

In view of government advisories on travel and public gatherings to combat theprevailing COVID-19 pandemic and to support the health and well-being of all stakeholdersthe 35th AGM of the company would be conducted through Video Conferencing (VC)or Other Audio Visual Means (OAVM) on 30th September 2021 at 15:30 hrs IST asper the framework notified by the Ministry of Corporate Affairs and Securities andExchange Board of India (SEBI). The notice convening the 35th AGM shall containdetailed instructions and notes in this regard. The electronic copies of the annual reportand the notice convening the 35th AGM would be sent to the shareholders whosee-mail addresses are registered with the Company or their respective DepositoryParticipants (DP). In terms of General Circulars no. 20/2020 dated May 05 2020 and02/2021 dated 13th January 2021 issued by the Ministry of Corporate Affairs(MCA) read with SEBI circular no. SEBI/ HO/CFD/CMD1/CIR/P/2020/84 dated May 12 2020 theCompany has not printed physical copies of annual report for distribution. The full AnnualReport shall be made available on the website of the Company and also shall bedisseminated to the stock exchanges where shares of the Company are listed.

ACKNOWLEDGEMENT

The Board thanks all its employees customers bankers vendors suppliers andgovernmental agencies for their continued support. The Board is grateful to theshareholders for their continued trust and confidence in the company.

For and on behalf of the Board
Place: Chennai JAYAKAR KRISHNAMURTHY
Date: 2nd September 2021 CHAIRMAN AND MANAGING DIRECTOR

.