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Udaipur Cement Works Ltd.

BSE: 530131 Sector: Industrials
BSE 12:48 | 24 May 31.80 -0.60






NSE 12:37 | 24 May 31.75 -0.55






OPEN 32.75
VOLUME 20374
52-Week high 51.75
52-Week low 24.55
P/E 19.27
Mkt Cap.(Rs cr) 990
Buy Price 31.75
Buy Qty 100.00
Sell Price 31.80
Sell Qty 191.00
OPEN 32.75
CLOSE 32.40
VOLUME 20374
52-Week high 51.75
52-Week low 24.55
P/E 19.27
Mkt Cap.(Rs cr) 990
Buy Price 31.75
Buy Qty 100.00
Sell Price 31.80
Sell Qty 191.00

Udaipur Cement Works Ltd. (UDAICEMENT) - Director Report

Company director report



Dear Shareholders

Your Directors are pleased to present the 25th Annual Report together with the AuditedFinancial Statements of the Company for the Financial Year ended 31st March 2021.


2020-21 2019-20
Sales & Other Income 737.66 686.88
Profit before Interest & 151.28 126.04
Profit/(Loss) before 97.50 61.09
Profit/(Loss) after Tax 54.74 14.89
Surplus/(Deficit) brought forward (29.05) (43.94)
Surplus/(Deficit) carried to 25.69 (29.05)
Balance Sheet


The Financial Year 2020-21 would go down as one of the most memorable year in theCompany's history. The year as we all know started with continued lockdown from last monthof the previous financial year on account of first wave of the global pandemic. Despitethis lockdown upto 17th May 2020 when everything was looking too bleak we could achievea capacity utilization of 71% in the first quarter thanks to rural demand and our abilityto leverage the same. This performance gave us the hope and built enthusiasm in the teamthat despite uncertain year looming ahead we can convert a tough situation into anopportunity and strive to achieve a good performance. Your Company precisely did the sameand achieved still better.

During the year varying segments gave us opportunities at different times and we couldgrab all the possible opportunities because of effective coordination and agility of ourteams whether it is sales and marketing at the front end or manufacturing/supportfunctions at the back end. During this pandemic year our Manufacturing/R&D team alsodeveloped one of the best premium products i.e. Platinum Supremo that we launched in March21. The most satisfactory part is that in its very first month of launch product has gotvery enthusiastic acceptance from our customers. This same customer satisfaction acts astonic for us to bring further improvement in our portfolio of various products andservices.

During Financial Year 2020-21 the Company's Cement Production & Sales stood at9.64 and 9.66 Lakh tonnes respectively. Additionally we sold 5.81 Lakh tonnes of PlatinumHeavy Duty Cement through trading activities and 4.89 Lakh tonnes of clinker. TherebyCompany recorded an all-time High Sales of Rs.737.66 Crores showing a jump of 7% oversales of Rs.686.88 Crores achieved in the previous Financial Year.

Your Company has been working very aggressively on various operational efficiencyimprovement levers. Financial Year 2020-21 has seen significant uptick in improvement inour geo and product mix besides improvement in our supply chain efficiency. In FinancialYear 2020-21 despite significant diesel's price rise Company has been able to containits logistics cost by reducing its lead and improving its direct deliveries from Plantsignificantly. All these levers combined resulted into a healthy EBIDTA numbers for theFinancial Year 2020-21 i.e. Rs.151.28 Crores against Rs.126.04 Crores achieved in theprevious Financial Year this corresponds to a satisfactory rise of 20 %. After providingfor Interest Depreciation & Tax the Profit After Tax (PAT) for the Financial Year2020-21 stood at Rs.54.74 Crores as against Rs.14.89 Crores recorded in the previousFinancial Year registering a rise of 268 %.

Based on the stupendous performance of the Company during the Financial Year 2020-21the Market Cap of the Company has also jumped from Rs.234 Crores as of 31st March 2020 toover

Rs.800 Crores as on date.


As mentioned last year the Company had taken up for implementation a De-bottlenecking& Balancing Scheme wherein the Clinker Capacity was being enhanced from 1.20 MillionTonnes to 1.50 Million Tonnes and the Cement Capacity from 1.60 Million Tonnes to 2.20Million Tonnes by September 2021. Despite all adversities posed by the COVID-19 crisisyour Company has successfully commissioned the capacity augmentation Project. Some minorleft out jobs are under progress and shall be completed as per the target.

Your Company is also working towards installation of new Clinkerization Line andGrinding Unit at Udaipur. This shall boost Clinker Capacity by additional 1.5 MillionTonnes and Cement Grinding Capacity by another 2.5 Million Tonnes. After the completion ofthe Expansion the Company's total Clinker Capacity shall be 3.00 Million Tonnes andCement Capacity shall be 4.7 Million

Tonnes. This Project has an estimated capital outlay of

Rs.1400 Crores and expected to be commissioned over a period of 3 years. The Companyhas received Environmental Clearance for the Project and other clearances like approvalfrom the Airport Authority of India Rajasthan State Pollution Control Board etc. are inprocess.


In the just concluded Quarter of Jan to Mar' 2021 the demand recovery across thecountry was clearly visible and believing that the Covid disaster is behind us theIndustry was bracing itself to meet surge of demand in the new Financial Year. Howeverthe Second Wave has hit us with a ferocity and suddenness that has taken the entirecountry completely unaware and unprepared bringing us back to almost similar positionwhich was experienced from 3rd week of March last year or even worse in some markets.

The Second wave has given us a grim reminder that uncertainty as we are presentlyexperiencing is a likely situation that we are going to be in for some time to come.However despite these uncertainties it is also obvious that deficiencies in theinfrastructure and not just health even otherwise have added to woes of our country in thetwo Covid waves that we have witnessed and therefore as soon some semblance of normalcy isrestored correction of these deficiencies would assume top priority. Constructionactivities can therefore be one of the first economic activity to commence as soon thisWave subsides. So while Q1 can be expected to follow more or less pattern of last year'sQ1 the famed resilience our economy will propel Q2 and subsequent quarters to perhapsmore than make up for shortfall in Q1.

We also expect that some of the behavioral changes induced by the pandemic would havelong term impact on the composition of demand especially in residential and institutionalsectors. Permanently Work From Home being adopted in certain sectors would create the newmarket for low rise and larger residential units slightly away from the congested urbancenters. This auger well for the Cement industry in the short to medium terms.


The pandemic has induced behavioural changes in the life and work styles; some of whichmay become permanent. Such changes are both opportunities and threats for the industry.Work From Home is increasingly being adopted across various sectors in the industry somuch so that a few of them have already announced this as a permanent option for theirwork force. This move on one hand would reduce the demand for large office spaces but atthe same time would create the need for a larger homes for many families. Less visits tomarket place on one hand would reduce the need for retail space but at the same time wouldcreate the need for larger warehouses and redistribution centres. Developers and Builderswill look forward to undertake a fewer projects but would strive to complete them fast andin defined time frame. These changes would call for a big change in the constructiontechnologies construction practices and products used in construction. ‘Time Saved'shall now have a realistic tangible value assigned to it as the pressure to reduce Stockin Process and Working Capital locked in it builds up.


Since March'20 COVID-19 has impacted the SocioEconomic and Financial fabric of theeconomy both at macro as well as at micro level. Due to pandemic the Central Governmentreforms have not been able to fully unleash themselves to their full potential. Some ofthe projects will either remain deferred or postponed at least for the near future.Resources are getting dried up in combatting the pandemic and sustaining rather thangrowth. We see Construction and Real Estate as being one of the worst hit sectors.Globally we see second wave badly hitting nations like us and some countries are nowreeling under a third wave impact. To add to the woes fuel/coal prices have seenexorbitant rise globally thereby increasing variable costs. Distribution channels andsupply chains in all sectors are hit. Needless to say this has resulted in increase ininput costs.

However your Company through its prudent management and efficient and economic use ofresources has managed to mitigate the risk and has been able to present the said financialresults.

A lingering concern for the Cement Industry viz. High GST Slab of 28% does stillremain. The Industry has already made several representations to the government in thepast for reduction in the GST rates on Cement from 28% to 18%. In the backdrop of theslowdown of the Economy the Industry is ever hopeful that the government will reduce theGST rate of Cement which will help it to come out of this current difficult phase.


On account of improved performance and profitability there was significant improvementin the following financial ratios in comparison to previous year as given hereunder:

Sl. Ratios No. Unit of measure As on 31.3.2021 As on 31.3.2020
1 Operation Profit Margin % 20.2 18.2
2 Net Profit Margin % 7.45 2.17
3 Return on Net Worth % 25.44 8.48
4 Current Ratio Times 0.99 0.36
5 Interest Times 2.81 1.94
Coverage ratio
6 Debt Service Times 2.08 1.88
Coverage Ratio
7 Debt Equity Ratio Times 2.31 3.09
8 Net Debt Equity Ratio Times 1.88 2.95
9 Debtors Turnover Times 237 157
10 Inventory Times 12 13


Your Company is known for its people centric approach i.e. caring for their people.The year under report is characterized by unprecedented pandemic (COVID-19) of epicproportion. Your Company has responded strongly to the crisis and fought against thispandemic at several fronts in collaboration with the District Authorities LocalPanchayats etc. by supporting the local communities around its plant and mines helpingmigrants and contractual labours and other needy sections of the society. The outstandingwork being carried out by your Company has been appreciated by the local administrationtoo.

Various HR initiatives in the times of COVID-19 for developing learning culture weretaken. Your Company organized number of online programmes/discussions for the employees onEmerging Leadership Strengthening PMS system through SMART based KRAs programmes onenergy saving employees Skill development both on functional and leadership aspects etc.

In order to retain talent in your Company we have focused on various key parameterslike recruitment career development performance management award and recognitionexecutive coaching and mentoring motivating employees employee survey exit interviewsetc. In view of increasing digitalization developing HR modules online and making HRtechnology employee friendly involving IT modern techniques have been a focus area for HRinterventions. Your Company also focusses on job enrichment/rotation to ensure retention.

Workers are given adequate opportunities/ encouragement to share new ideas. Companyalso gives due weightage to job enrichment of workers and their contributions. Fair andconsistent HR Policies followed by the Management ensure that Industrial Relationscontinue to be peaceful and cordial.

Your Company is constantly improving on People Management Practices and taking everystep to enrich our major HR thrust areas which in turn has helped the Company in gettingexcellence in development of Human Capital and as a result during the year the Company wasawarded with “Certificate of Excellence” under the “Best EmployerAward” by Employer's Association of Rajasthan.


Environment Health and Safety have always been at the core of Your Company'soperations. Use of state of art pollution control equipment extensive plantationsourcing of power from Renewable sources replacing conventional non-renewable sources ofenergy are some of the key strengths of the Company. Occupational Health and Safetyimprovement programs for employees are regular features. Various initiatives with regardto protection of employees and business associates from COVID-19 have been taken likedistribution of face masks installation of sanitizer dispenser for hand sanitizationplaying of pre- recorded safety instructions with regard to COVID-19 at various locationsoffice sanitization and fumigation and installation of awareness posters in and around theplant etc.

Your Company uses IT based portal for recording and analysing the safety performance.Various agencies have appreciated our efforts toward EHS and have recognized by awardingthe Company.

The Following awards/recognitions were received during FY 2020-21 :

Special Recognition certificate for “Green Belt” developed in UCWL premisesfrom SDM Mavli received on 26th January 2021.

National Winner in “CII EnerCon 2020” under category of “CreatingAwareness on Efficiency & Energy Conservation” for “Prime Generation ofGreen Energy”.

Won Gold Award for “Best Practices in Industrial Security” at 8th ExceedOccupational Health Safety Security & HR Award and Conference organised bySustainable Development Foundation.

Winner at “Industry Sector Safety Excellence” at 19th Annual Greentech SafetySummit held on 12th February 2021.

Secured 7th Position in the category of Specific Power Consumption upto Clinkerisationin the List of Top Ten Energy Efficient Plants in the CII Study based on Energy AwardPerformance.


The Company has in place adequate Internal Control System commensurate with the sizeand level of operations of the Company and the same were operating effectively throughoutthe year. The Company has an independent Corporate Internal Audit Department whichcarries-out the Internal Audit of its Plant Sales depots & registered office. ThisInternal Audit Department submits its report on the Efficacy & Adequacy of InternalControl Systems to the Chairman of Audit Committee of the Board. There are adequate checks& balances in place wherein deviation from the systems laid-out are clearlyidentified and corrective actions are taken in respective areas wherever required.

During the year the Company's Budgetary Control System and MIS were workingeffectively to map the actual performance viz-a-viz Budget for taking corrective actionsin the areas where deviations were found.


The Company has also institutionalized its Internal Financial Control Systems Policies& Procedures in line with the size and the complexity of its operations. This ensuresaccuracy & comprehensiveness of the Accounting records. These Internal FinancialControl Systems are adequate for safeguarding the Assets of the Company and are effectivetowards prevention & detection of frauds & errors. The Policies & Proceduresare also adequate for orderly and efficient conduct of business of the Company. TheCompany has in place specific Standard Operating Practices (SOPs) for its variousfunctional areas. These SOPs are periodically reviewed by the Internal Audit Team; andexceptions if any are reported. The Company also has a robust management informationsystem for the timely preparation of reliable financial information. No reportablematerial weaknesses were observed in the system during the previous fiscal.


The Annual Return as required under Section 92 and Section 134 of the Companies Act2013 (Act) read with Rules made thereunder is available on the website of the


During the Financial Year ended 31st March 2021 all the contracts or arrangements ortransactions entered into by the Company with the Related Parties were in the ordinarycourse of business and on an arms' length basis and were in compliance with the applicableprovisions of the 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 enteredinto during the Financial Year 2020-21 as per the Related Party Transactions Policy isattached as Annexure ‘A' to this Report and forms a part of it. The RelatedParty Transaction Policy as approved by the Board is available on the website of theCompany.


The particulars of loans given guarantees or securities provided and investments madeas required under Section 186 of the Act are given in the Notes to Financial Statements.


Pursuant to Section 152 of the Act Smt. Vinita Singhania

(DIN: 00042983) retires by rotation at the ensuing Annual General Meeting (AGM) andbeing eligible offers herself for re-appointment. The Board recommends her re-appointment.

The Board of Directors of the Company on the recommendation of the Nomination andRemuneration Committee has re-appointed Shri Naveen Kumar Sharma (DIN: 08152305) asWhole-time Director for a further term of 3 years w.e.f. 1st October 2021 subject torequisite approval of Members of the Company. The Board has recommended necessary SpecialResolution in this behalf for approval of the Members at the ensuing AGM.

The Board has taken on record the declarations and confirmations received from all theIndependent Directors regarding their independence pursuant to Section 149 of the Act andRegulation 16 of Listing Regulations.

There are no changes in the Directors/Key Managerial Personnel of the Company duringthe year under review.


The details as required under Section 134(4)(m) of the Act read with the Companies(Accounts) Rules 2014 are annexed to this Report as Annexure 'B' and forms part ofit.


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


(a) Statutory Auditors

In accordance with the provisions of the Act and Rules thereunder M/s Bansilal Shah& Co. Chartered Accountants (Firm Registration Number: 000384W) were appointed asthe Statutory Auditors of the Company for their second term of five consecutive years tohold office from the conclusion of the 23rd AGM held on 17th August 2019 until theconclusion of the 28th AGM to be held in the year 2024.

The observations of the Auditors in their Report on Accounts and the FinancialStatements read with the relevant notes are self-explanatory. The Auditors' Report doesnot contain any qualifications reservations or adverse remarks.

(b) Secretarial Auditor and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Act the Board of Directors appointedShri Namo Narain Agarwal Company Secretary in Practice as Secretarial Auditor to carryout Secretarial Audit of the Company for the Financial Year 2020-21.

The Report given by him for the said Financial Year in the prescribed format is annexedto this Report as Annexure 'C'. The Secretarial Audit Report does not contain anyqualifications reservations or adverse remarks.

(c) Cost Auditor and Cost Audit Report

M/s. HMVN & Associates Cost Accountants conducted the Audit of cost records ofthe Company for the Financial Year ended 31st March 2020 and as required Cost AuditReport was duly filed with the Ministry of Corporate Affairs Government of India. TheCompany has duly maintained requisite Cost Records pursuant to Section 148(1) of the Act.

The Audit of the Cost Records of the Company for the Financial Year ended 31st March2021 is being conducted by the said Firm and the Report will be duly filed.


Serving the Society towards improving the quality of life of the community at large hasalways been a priority of the Company. The concept of socially responsible business isdeeply ingrained into our corporate DNA right from the initial years and till date we havepioneered and delivered several CSR projects for needy and vulnerable communities andfamilies.

The Company works towards overall development and welfare of the society by focusing onareas such as Health Sanitation Water Education Skill Development and LivelihoodInterventions to name a few. As the beginning of Financial Year saw outbreak of COVID-19Pandemic your Company responded to this unprecedented crisis taking several initiativesin collaboration with local panchayats and district administration. Number of food kitssanitizers cotton masks and hand wash were distributed to the needy families as well assessions and meetings were organized to create awareness on COVID-19.

Your Company also undertook multiple CSR activities like medical camps; skills trainingfor the women and girls and supporting them for income earning under its flagship project“Swavalamban” among others. Projects like farmer's trainings exposure visitsand veterinary camps were organized to improve agricultural and cattle rearing practicesto strengthen livelihoods of the marginalized families. These CSR projects have impactedpositively the lives of the beneficiaries around the Plant.


Disclosure of the ratio of the remuneration of each Director to the median employee'sremuneration and other requisite details pursuant to Section 197(12) of the Act read withRule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed to this Report as

Annexure 'D'.

Further particulars of Employees pursuant to Rule 5(2) & (3) of the above Rulesform part of this Report. However in terms of provisions of Section 136 of the Act theReport and Accounts are being sent to all the Members of the Company and others entitledthereto excluding the said Particulars of Employees. The said information is availablefor inspection at the Registered Office of the Company during business hours on workingdays of the Company up to the ensuing AGM. Any Member interested in obtaining suchparticulars may write to the Company Secretary.


During the Financial Year under review there were no significant and material orderspassed by the Regulators or Courts or Tribunals which would impact the going concernstatus of the Company and its future operations.


During the Financial Year under review there was no change in the nature of business.


Pursuant to Regulation 34(2)(f) of the Listing

Regulations the Business Responsibility Report of the Company for the Financial Year2020-21 ended 31st March 2021 in the prescribed format giving an overview of theinitiatives taken by the Company from an environmental social and governance perspectiveis given in a separate section of the Annual Report and forms a part of it.


Your Company reaffirms its commitment to the highest standards of corporate governancepractices. Pursuant to Regulation 34 of the Listing Regulations Corporate GovernanceReport and Auditors' Certificate regarding compliance of conditions of CorporateGovernance are made a part of this Report. The Corporate Governance Report also covers thefollowing:

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

(b) Salient features of the Nomination and Remuneration Policy including changestherein.

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

(d) The details with respect to composition of Audit Committee & establishment ofVigil Mechanism;

(e) Details regarding Risk Management.

(f) Disclosures in relation to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.


Based on the Secretarial Audit Report of the Secretarial Auditor the Company has dulycomplied with the applicable Secretarial Standards on Meetings of the Board of Directorsand General Meetings issued by the Institute of Company Secretaries of India.


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 havebeen followed along with proper explanation relating to material departures;

(b) such accounting policies have been selected and applied consistently and judgmentsand estimates made are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the Financial Year and of the profit andloss of the Company for that period;

(c) proper and sufficient care have been taken for the maintenance of adequateaccounting records in accordance with the provisions of the said Act 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) the internal financial controls to be followed by the Company have been laid downand 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 lawshave been devised and that such systems are adequate and operating effectively.


The Board gratefully acknowledge the continuing faith reposed in the Company by theFinancial Institutions Banks Government Authorities Dealers Suppliers BusinessAssociates and esteemed Shareholders who have extended their splendid co-operation andsupport to the Company. The Directors also take this opportunity to thank Company's valuedCustomers who have patronized its products.

The Board places on record its appreciation towards “Team UCWL” for theirdedication and excellence displayed in conducting all operations of the Company andwithout whose whole-hearted efforts and solidarity the Company's consistent growth wouldnot have been possible in these challenging times. Last but not the least the Board alsowish to place on record their sincere gratitude towards JK Lakshmi Cement Limited ourHolding Company and Hansdeep Industries & Trading Company Limited a Fellowsubsidiary for all the financial technical marketing and operational assistanceextended by them to make turnaround and revival of the Company a realty.


The Directors' Report & Management Discussion and Analysis contains forward-lookingstatements which may be identified by the use of words in that direction or connotingthe same. All statements that address expectations or projections about the futureincluding but not limited to statements about your Company's strategy for growth productdevelopment market positions expenditures and financial results are forward lookingstatements.

Your Company's actual results performance and achievements could thus differmaterially from those projected in such forward looking statements. The Company assumes noresponsibility to publicly amend modify or revise any forward-looking statements on thebasis of any subsequent development information or events.

On behalf of the Board of Directors
Place: New Delhi Vinita Singhania
Date: 15th May 2021 Chairperson