Udaipur Cement Works : Letter of offer (Final Offer Document filed with Stock Exchanges)

Letter of Offer

June 9, 2023

For Eligible Equity Shareholders only

UDAIPUR CEMENT WORKS LIMITED

Our Company was originally incorporated under the provisions of the Companies Act, 1956 as "J.K. Udaipur Udyog Limited", a public limited company, pursuant to a certificate of incorporation dated March 15, 1993 issued by the Registrar of Companies, Rajasthan at Jaipur ("RoC"). Subsequently, the name of our Company was changed to "Udaipur Cement Works Limited", pursuant to which a fresh certificate of incorporation, dated May 19, 2006 was issued by the RoC. For details of the changes to the address of the registered office of our Company, please see "General Information - Changes in the registered office of our Company" on page 47.

Registered Office: Shripati Nagar, CFA, P.O. Dabok, Udaipur 313 022, Rajasthan, India; Tel.: [phone]

Corporate Office: Nehru House 4, Bahadur Shah Zafar Marg, New Delhi 110 002, Delhi, India; Tel.: [phone] Contact Person: Poonam Singh, Company Secretary and Compliance Officer

E-mail: [e-mail]; Website: www.udaipurcement.com Corporate Identification Number: L26943RJ1993PLC007267

OUR PROMOTER: JK LAKSHMI CEMENT LIMITED

FOR PRIVATE CIRCULATION TO THE ELIGIBLE EQUITY SHAREHOLDERS OF OUR COMPANY ONLY

ISSUE OF UP TO 24,91,27,853 FULLY PAID-UP EQUITY SHARES OF FACE VALUE OF ₹ 4 EACH OF OUR COMPANY (THE "RIGHTS EQUITY SHARES") FOR CASH AT A PRICE OF ₹ 18 PER RIGHTS EQUITY SHARE (INCLUDING A PREMIUM OF ₹ 14 PER EQUITY SHARE) AGGREGATING UP TO ₹ 448.43 CRORES* ON A RIGHTS BASIS TO THE ELIGIBLE EQUITY SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF 4 RIGHTS EQUITY SHARES FOR EVERY 5 FULLY PAID-UP EQUITY SHARES HELD BY THE ELIGIBLE EQUITY SHAREHOLDERS ON THE RECORD DATE, THAT IS JUNE 14, 2023 ("RECORD DATE") (THE "ISSUE"). FOR FURTHER DETAILS, PLEASE SEE "TERMS OF THE ISSUE" ON PAGE 213.

*Assuming full subscription

WILFUL DEFAULTERS OR FRAUDULENT BORROWERS

Neither our Company, nor our Promoter or our Directors are categorized as Wilful Defaulters (as defined hereinafter) or Fraudulent Borrowers (as defined hereinafter).

GENERAL RISKS

Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in the Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in the Issue. For taking an investment decision, investors must rely on their own examination of our Company and the Issue including the risks involved. The securities being offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India ("SEBI") nor does SEBI guarantee the accuracy or adequacy of this Letter of Offer. Specific attention of investors is invited to the statement of "Risk Factors" on page 15 before making an investment in this Issue.

ISSUER'S ABSOLUTE RESPONSIBILITY

Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information with regard to our Company and the Issue, which is material in the context of the Issue, that the information contained in this Letter of Offer is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Letter of Offer as a whole or any such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING

The existing Equity Shares of our Company are listed on BSE Limited ("BSE") ("Designated Stock Exchange" or "Stock Exchange", as the context may require). Our Company has received an "in-principle" approval dated June 5, 2023 from BSE for listing of the Rights Equity Shares to be allotted pursuant to the Issue. Our Company will also make applications to BSE to obtain trading approvals for the Rights Entitlements as required under the SEBI circular bearing reference number SEBI/HO/CFD/DIL2/CIR/P/2020/13 dated January 22, 2020. For the purposes of the Issue, the Designated Stock Exchange is BSE.

LEAD MANAGER

REGISTRAR TO THE ISSUE

JM Financial Limited	KFin Technologies Limited
7th Floor, Cnergy	Selenium Tower-B, Plot 31 & 32
Appasaheb Marathe Marg	Gachibowli, Financial District
Prabhadevi, Mumbai 400 025	Nanakramguda, Serilingampally
Maharashtra, India	Hyderabad 500 032
Tel.: [phone]	Telangana, India
E-mail: [e-mail]	Tel.: [phone]
Investor grievance E-mail:[e-mail]	E-mail: [e-mail]
Contact person: Prachi Dhuri	Investor grievance E-mail:[e-mail]
Website: www.jmfl.com	Contact Person: M Murali Krishna
SEBI Registration: INM000010361	Website: www.kfintech.com
	SEBI Registration No.: INR000000221

ISSUE PROGRAMME

ISSUE OPENS ON	LAST DATE FOR ON MARKET	ISSUE CLOSES ON**
	RENUNCIATION*
Wednesday, June 21, 2023	Friday, June 30, 2023	Wednesday, July 5, 2023

*Eligible Equity Shareholders are requested to ensure that renunciation through off-market transfer is completed in such a manner that the Rights Entitlements are credited to the demat accounts of the Renouncees on or prior to the Issue Closing Date.

**Our Board or the Rights Issue Committee will have the right to extend the Issue Period as it may determine from time to time but not exceeding 30 days from the Issue Opening Date (inclusive of the Issue Opening Date). Further, no withdrawal of Application shall be permitted by any Investor after the Issue Closing Date.

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TABLE OF CONTENTS
SECTION I - GENERAL	1
DEFINITIONS AND ABBREVIATIONS	1
NOTICE TO INVESTORS	8
PRESENTATION OF FINANCIAL INFORMATION AND OTHER INFORMATION	10
FORWARD LOOKING STATEMENTS	12
SUMMARY OF LETTER OF OFFER	13
SECTION II - RISK FACTORS	15
SECTION III: INTRODUCTION	46
THE ISSUE	46
GENERAL INFORMATION	47
CAPITAL STRUCTURE	52
OBJECTS OF THE ISSUE	54
STATEMENT OF SPECIAL TAX BENEFITS	64
OUR MANAGEMENT	68
SECTION IV: ABOUT OUR COMPANY	71
INDUSTRY OVERVIEW	71
OUR BUSINESS	97
SECTION V: FINANCIAL INFORMATION	109
FINANCIAL STATEMENTS	109
ACCOUNTING RATIOS	175
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS	176
OUTSTANDING LITIGATION AND DEFAULTS	199
GOVERNMENT AND OTHER APPROVALS	202
MATERIAL DEVELOPMENTS	204
OTHER REGULATORY AND STATUTORY DISCLOSURES	205
SECTION VII: ISSUE INFORMATION	213
TERMS OF THE ISSUE	213
SECTION VIII: STATUTORY AND OTHER INFORMATION	239
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION	239
DECLARATION	241

SECTION I - GENERAL

DEFINITIONS AND ABBREVIATIONS

This Letter of Offer uses certain definitions and abbreviations which, unless the context otherwise indicates or implies or unless otherwise specified, shall have the meaning as provided below.

References to any legislation, act, circular, regulation, rules, guidelines or policies shall be to such legislation, act, circular, regulation, rules, guidelines or policies as amended, supplemented, or re-enacted from time to time and any reference to a statutory provision shall include any subordinate legislation made from time to time under that provision.

The words and expressions used in this Letter of Offer, but not defined herein shall have the meaning ascribed to such terms under the SEBI ICDR Regulations, the SEBI LODR Regulations, the Companies Act, the SCRA, the Depositories Act, and the rules and regulations made thereunder.

The following list of capitalised terms used in this Letter of Offer is intended for the convenience of the reader/prospective investor only and is not exhaustive.

Company Related Terms

Term		Description
Annual	Financial	The audited financial statements of our Company as at and for the financial years ended March
Statements			31, 2023 (along with comparative financial statements for the financial year ended March 31,
			2022) prepared in accordance with applicable accounting standards, which comprises the
			balance sheet as at March 31, 2023 (along with comparative balance sheet as at March 31,
			2022) and the statement of profit and loss, including other comprehensive income, the
			statement of cash flows and the statement of changes in equity for the years then ended, and
			notes to the financial statements, including a summary of significant accounting policies and
			other explanatory information. For details, please see "Financial Statements" on page 109
Articles		of	Articles of association of our Company, as amended from time to time
Association/Articles/AoA
Board of	Directors	or	Board of directors of our Company
Board
Captive Limestone Mines	Together, Limestone Mine-1 and Limestone Mine-2 as defined below
Company	Secretary	and	The company secretary and compliance officer of our Company, namely Poonam Singh
Compliance Officer
Corporate Office		The corporate office of our Company situated at Nehru House 4, Bahadur Shah Zafar Marg,
			New Delhi 110 002, Delhi, India
CRISIL			CRISIL Limited
CRISIL Report		Report on 'Overview of Indian Cement Industry' dated May 2023, prepared by CRISIL
			Research, a division of CRISIL Limited, commissioned and paid for by our Company
CRPS			Cumulative redeemable preference shares of face value ₹ 1,00,000 each issued by our
			Company
Director(s)			The directors on the Board of our Company
Equity Shareholder(s)		A holder of Equity Share(s) of our Company, from time to time
Equity Shares		Equity shares of face value of ₹ 4 each of our Company
Executive Director(s)		Executive director(s) of our Company. For details, see "Our Management" on page 68
Expansion Project		Ongoing project for the expansion and development of our Udaipur Manufacturing Plant. For
			details, see "Objects of the Issue" on page 54
Group Companies		Group companies in relation to our Company as defined under Regulation 2(1)(t) of the SEBI
			ICDR Regulations
Independent Director(s)	Independent Directors on the Board, who are eligible to be appointed as independent directors
			under the provisions of the Companies Act, 2013 and the SEBI LODR Regulations
Key Managerial Personnel	The Key Managerial Personnel of our Company determined in accordance with Regulation
			2(1)(bb) of the SEBI ICDR Regulations. For details, see "Our Management" on page 68
Limestone Mine-1		Our captive mining facility of 703.305 hectares located at Udaipur, Rajasthan, India under
			mining lease bearing ML No. 186/2008 granted by the State Government of Rajasthan
Limestone Mine-2		Our captive mining facility of 213.33 hectares located at Udaipur, Rajasthan, India under
			mining lease bearing ML No. 23/2001 granted by the State Government of Rajasthan
Materiality Threshold		Materiality threshold adopted by our Company solely for the purposes of the Issue in relation
			to the disclosure of outstanding civil and tax proceedings, involving our Company, where the

amount involved is ₹ 35.86 lakhs (being 1% of the profit after tax of our Company, in terms of the Annual Financial Statements as at and for the financial year ended March 31, 2023)

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	Term	Description
Memorandum	Memorandum of Association of our Company, as amended from time to time
of Association/Memorand
um/MoA
Non-Executive Director(s)	Non-executive director(s) of our Company. For details, see "Our Management" on page 68
OCCRPS		Optionally convertible cumulative redeemable preference shares of face value ₹ 100 each
		issued by our Company
Promoter		The promoter of our Company being JK Lakshmi Cement Limited
Promoter Group	The entities constituting the promoter group of our Company determined in accordance with
		Regulation 2(1)(pp) of the SEBI ICDR Regulations
Promoter	Group	Bengal & Assam Company Limited, a member of our Promoter Group which held 756 Equity
Shareholder	Shares of our Company as on March 31, 2023
Registered Office	The registered office of our Company situated at Shripati Nagar, CFA, P.O. Dabok, Udaipur
		313 022, Rajasthan, India
Registrar of Companies or	Registrar of Companies, Rajasthan at Jaipur
RoC
Senior Management	Senior management of our Company determined in accordance with Regulation 2(1)(bbbb)
		of the SEBI ICDR Regulations. For details, see "Our Management" on page 68
Stakeholders'	Stakeholders' relationship committee of our Board constituted in accordance with Regulation
Relationship Committee	20 of the SEBI LODR Regulations and currently comprising Vinit Marwaha, Independent
		Director, as chairperson of the committee, Onkar Nath Rai, Independent Director and
		Surendra Malhotra, Independent Director
Statutory Auditors	Statutory auditors of our Company namely, M/s. Bansilal Shah & Co., Chartered Accountants
Udaipur	Manufacturing	Integrated cement manufacturing unit of the Company at Udaipur, Rajasthan, India
Plant
Whole-Time Director	The whole-time director of our Board namely, Naveen Kumar Sharma

Issue Related Terms

Term		Description
Abridged	Letter	of	The abridged letter of offer to be sent to the Eligible Equity Shareholders with respect to the
Offer/ALOF		Issue in accordance with the provisions of the SEBI ICDR Regulations and the Companies
			Act, 2013
Additional	Rights	Equity	The Rights Equity Shares applied for or allotted under this Issue in addition to the Rights
Shares			Entitlement
Allotment/Allot/Allotted	Allotment of Rights Equity Shares pursuant to the Issue
Allotment Accounts	The accounts opened with the Banker(s) to this Issue, into which the Application Money
			blocked by Application Supported by Blocked Amount in the ASBA Account, with respect to
			successful Investors will be transferred on the Transfer Date in accordance with Section 40(3)
			of the Companies Act, 2013
Allotment	Account	Bank(s) which are clearing members and registered with SEBI as bankers to an issue and with
Bank(s)			whom the Allotment Accounts will be opened, in this case being, Axis Bank Limited
Allotment Advice		Note, advice or intimation of Allotment sent to each successful Investor who has been or is to
			be Allotted the Rights Equity Shares pursuant to the Issue
Allotment Date		Date on which the Allotment is made pursuant to the Issue
Allottee(s)			Person(s) to whom the Rights Equity Shares are Allotted pursuant to Issue
Application			Application made through submission of the Application Form or plain paper application to
			the Designated Branch(es) of the SCSBs or online/electronic application through the website
			of the SCSBs (if made available by such SCSBs) under the ASBA process to subscribe to the
			Rights Equity Shares at the Issue Price
Application Form		Unless the context otherwise requires, an application form used or application through the
			website of the SCSBs (if made available by such SCSBs) under the ASBA process used by an
			Investor to make an application for the Allotment of Rights Equity Shares in this Issue
Application Money		Aggregate amount payable at the time of Application i.e., ₹ 18 per Rights Equity Share in
			respect of the Rights Equity Shares applied for in the Issue at the Issue Price
Application Supported by	Application (whether physical or electronic) used by an Investor to make an application
Blocked Amount/ASBA	authorizing the SCSB to block the Application Money in a specified bank account maintained
			with the SCSB
ASBA Account		An account maintained with SCSBs and as specified in the Application Form or plain paper
			Application, as the case may be, by the Investor for blocking the amount mentioned in the
			Application Form or in the plain paper Application
Banker to the Issue		Agreement dated June 9, 2023 entered into by and among our Company, the Registrar to the
Agreement			Issue, the Lead Manager and the Banker to the Issue for collection of the Application Money
			from Investors, transfer of funds to the Allotment Account from the SCSBs, Allotment
			Account to our Company and other persons and where applicable, refunds of the amounts

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