Updater Services Ltd Management Discussions

Global Economy

The global economy has shown remarkable resilience, maintaining steady growth and seeing inflation return to target levels. Following a tumultuous period marked by supply-chain disruptions post-pandemic, the Russia-Ukraine war, and a significant surge in inflation, a globally coordinated monetary policy tightening helped avoid a recession. The banking system remained stable, and major emerging markets did not experience sudden stops. Inflation, despite its initial spike, has been decreasing. Global growth bottomed out at 2.3% in late 2022, and the IMF projects growth of around 3.2% for 2024 and 2025, with inflation dropping from 2.8% at the end of 2024 to 2.4% by the end of 2025, indicating a soft landing.

While fiscal stimulus could temporarily boost growth, it may complicate future adjustments. Productivity gains from structural reforms could have widespread benefits, but potential risks include supply disruptions, sustained inflation, and geopolitical tensions, such as conflicts in the Red Sea. Additionally, growth could be hampered by unexpected tax hikes, budget cuts, or issues in Chinas property sector. Despite the challenges of recent rate hikes by major central banks, these actions have laid the groundwork for reduced borrowing costs and lower inflation expectations, supporting continued economic progress.

World Economic Outlook Growth Projections

*Growth Projections (%) 2023

2024	2025
Global Economy	3.1	3.1	3.2
Advanced Economies	1.6	1.5	1.8
Emerging Markets and	4.1	4.1	4.2
Developing Economies

*Note these estimates are on Current Year Basis and not Financial Year basis

Outlook

The global economic outlook remains positive, with resilient growth despite geopolitical tensions and cost of living challenges. Inflation has decreased faster than expected, wage growth has moderated, and labour markets have improved. In 2023, higher-than-expected government and private spending boosted growth. Strong performances in China and India are expected to stabilise growth in 2024. Multilateral coordination is needed to address debt and climate change issues, while structural reforms are necessary for productivity and debt sustainability.

Europe, especially the Euro Area, faces the highest recession risks due to high sovereign debt, monetary tightening, and potential financial crises. Prudent policymaking is essential to sustain global economic growth amidst evolving uncertainties.

World Economic Outlook Growth Projections

(Real GDP, annual percent change)	Projections
	2023	2024	2025
World Output	3.2	3.2	3.2
Advanced Economies	1.6	1.7	1.8
United States	2.5	2.7	1.9
Euro Area	0.4	0.8	1.5
Germany	(0.3)	0.2	1.3
France	0.9	0.7	0.7
Italy	0.9	0.7	0.7
Spain	2.5	1.9	2.1
Japan	1.9	0.9	1.0
United Kingdom	0.1	0.5	1.5
Canada	1.1	1.2	2.3
Other Advanced Economies	1.8	2.0	2.4
Emerging Market and Developing Economies	4.3	4.2	4.2
Emerging and Developing Asia	5.6	5.2	4.9
China	5.2	4.6	4.1
India	7.8	6.8	6.5
Emerging and Developing Europe	3.2	3.1	2.8
Russia	3.6	3.2	1.8
Latin America and the Caribbean	2.3	2.0	2.5
Brazil	2.9	2.2	2.1
Mexico	3.2	2.4	1.4
Middle East and Central Asia	2.0	2.8	4.2
Saudi Arabia	(0.8)	2.6	6.0
Sub-Saharan Africa	3.4	3.8	4.0
Nigeria	2.9	3.3	3.0
South Africa	0.6	0.9	1.2
Memorandum
Emerging Market and Middle-Income Economies	4.4	4.1	4.1
Low-Income Developing Countries	4.0	4.7	5.2

Growth Projections

(Real GDP Growth, Percent Change)

The Indian Economy

Indias Gross Domestic Product (GDP) grew 8.2% in the fiscal year 2023-24, an increase from the 7% growth recorded in FY23.

Indias economy has shown remarkable resilience and sustained growth over the past three years, defying global economic challenges. This remarkable trajectory has been supported by a combination of stringent policy and regulatory measures, alongside the gradual resurgence of the private sector. The nation is on the cusp of further economic flourishing, propelled by substantial investments in emerging sectors, continued government spending, and efficiency gains driven by advancements in digitalisation and infrastructure.

The vibrancy of Indias economy is underpinned by several factors, including the strengthening of consumer purchasing power through disinflation, expected robust agricultural outputs, and a revitalisation in private capital expenditure. Furthermore, governmental initiatives aimed at bolstering rural incomes and enhancing infrastructure spending solidify Indias status as the fastest-growing major economy.

https://www.crisil.com/e n/home/our-analysis/reports/2024/03/ india-outlook-2024-report/growth-marathon.html

Outlook on the Indian Economy

India is on track to approach the $ 7 trillion mark by 2030, becoming the worlds third-largest economy. This growth will be fuelled by enhancements in capital and productivity, spurred by the comprehensive integration of digital and physical infrastructure. The manufacturing sector is expected to see a resurgence, supported by global opportunities, domestic policy initiatives, and a focus on transitioning to green energy. Future growth is projected to be driven by significant capital expenditure, backed by industrial strength and efficient infrastructure development. This positive outlook is reinforced by the strong financial health of Indian corporations, steady revenue growth, and favourable commodity prices.

The governments Production Linked Incentive (PLI) scheme is designed to boost Indias manufacturing capabilities on the global stage, complemented by a strong banking sector and innovative financing options. Indias economic progress is underpinned by domestic reforms, competitive advancements, and a commitment to value-added growth, all supported by extensive infrastructure development.

https://www.crisil.com/en/home/our-analysis/reports/2024/03/ india-outlook-2024-report/growth-marathon.html

Our Market Opportunities and Regulatory Impetus

We are conscious of the environment that we operate in the context of business as well as the underlying trends that we see and which we believe may impact our future business. Some of these underlying trends are as follows:

¦ Commercial Real Estate: The burgeoning demand for commercial real estate, including office buildings, retail centres, and industrial parks, underscores the need for robust IFM services. These services encompass maintenance, security, cleaning, and other essential functions to ensure these properties operate smoothly. As businesses seek modern, efficient workplaces, IFM providers play a crucial role in delivering high-quality services that meet evolving needs and enhance tenant satisfaction.

¦ Residential Real Estate: With urbanisation and population growth, the residential real estate sector experiences significant expansion, marked by the construction of residential complexes, gated communities, and apartment buildings. In these settings, IFM solutions are vital for managing common areas, facilities, and amenities, ranging from landscaping and maintenance to security and waste management. By ensuring well-maintained and secure living environments, IFM services contribute to the overall quality of life for residents

¦ Rapid Urbanisation: Indias urban population is increasing significantly, leading to the expansion of urban areas and the construction of new residential, commercial, and industrial buildings. This urban growth necessitates the need for efficient management and maintenance of these facilities, creating a substantial demand for IFM services

¦ Smart Cities and Infrastructure Projects: Government initiatives like the Smart Cities Mission and other large-scale infrastructure projects are boosting the construction of modern and complex facilities. These projects require specialised IFM services to ensure they are managed sustainably and efficiently.

¦ Outsourcing of Non-core Activities: Businesses are increasingly turning to outsourcing facilities management services as a strategic approach to gain competitive advantages and achieve market leadership goals. The outsourcing landscape has evolved significantly worldwide over the past decade. While cost optimisation was the primary objective in the past, todays organisations seek to outsource facilities management services to unlock internal resources and deliver strategic value. This shift reflects a broader trend of focusing on core business activities while leveraging strategic partnerships to attain marketable benefits or cost efficiencies through outsourcing arrangements.

¦ Outsourcing of Revenue Generating Activities:

Amidst evolving business dynamics and increasing complexity, various services, including employee background verification checks and sales enablement, previously managed internally, are now being outsourced. This shift towards outsourcing is anticipated to continue growing in the long term, consequently driving the demand for Business Support Services (BSS). The evolving market landscape has underscored the significance of sales enablement services, reflecting changing buyer preferences and heightened awareness among buyers. In this context, sellers emphasising value delivery are poised for business success. The growing imperative to enhance internal business processes and leverage advanced technology to bolster sales efforts are pivotal drivers propelling the sales enablement services market in India. Among the primary customer requirements is the enhancement of target accuracy and efficiency of business development teams through the provision of qualified leads. This trend mirrors a global phenomenon, with multinational clients outsourcing activities to delivery partners and centers worldwide, akin to practices observed in the IT industry.

¦ Production Linked Incentives (PLI) Schemes: This was announced in March 2020 and later updated in November 2020 to create national manufacturing champions. The key objectives of the scheme are to scale up domestic manufacturing facilities, increase import substitution through domestic production and generate employment opportunities. The PLI scheme provides turnover linked incentives to investors upon meeting the set criteria in terms of investment, capacity, and turnover.

¦ Industry 4.0: This refers to implementing big data, robotics, the internet of things (IoT), artificial intelligence, machine learning and cloud services for industrial operations. India is at a nascent stage in the adoption of Industry 4.0 and has higher growth potential in India, supported by the industrial and digital initiatives by the government.

¦ China Plus One Strategy: This refers to the diversification of supply chains from China. The recent Ukraine-Russia war has caused supply chain disruptions. So, the global companies are looking beyond China for supply chains. India, with its cost competitiveness could benefit from this strategy and develop its manufacturing sector. This would drive demand for IFM services and other support services.

SWOT Analysis of UDS based on Economy Outlook and Market Opportunity:

Strengths

¦ Unique Integrated Business Support Services Platform: The company offers the widest range of services in the industry

¦ Long-standing Presence in India: Extensive market understanding due to prolonged operations in the region

¦ Successful Acquisition and Integration: Proven track record of acquiring and integrating high-margin business segments

¦ Technological Leadership: Focus on technology to drive current and future business initiatives

Weaknesses

¦ Operational Risks: Potential for operational disruptions due to unforeseen events such as natural disasters or pandemics

¦ Cost Pressures due to industry fragmentation:

Intense competition leading to pressure on pricing and margins

¦ Workforce Management: High turnover rates and the need for continuous training of a large, diverse workforce

¦ Client Retention: Dependence on large major clients can pose risks if contracts are lost

¦ Innovation Lag: Slower adoption of innovative practices compared to more agile competitors

Opportunities

¦ Rising Investments in Commercial Real Estate:

Increased capital flow into the commercial real estate sector

¦ Growing Government Awareness on Outsourcing Benefits: Greater recognition of outsourcing advantages by the government sector

¦ Sophisticated Building Requirements: Higher demand for professional companies to operate and maintain advanced buildings

¦ Anticipated Public Infrastructure Investments:

Expected funding in public infrastructure and government initiatives for smart, sustainable growth

¦ Investments in Infrastructure and Industrial Segments: Increased investments in infrastructure and industrial sectors

Threats

¦ Economic Downturns: Economic recessions can lead to reduced spending by corporates on services

¦ Intense Competition: High competition from both established players and new entrants can erode market share and margins

¦ Geopolitical Instability: Political instability and conflicts can impact operations, particularly in international markets

¦ Labour Shortage: Difficulty in finding and retaining skilled labour, leading to potential service delivery issues and increased training costs

Significant Factors Affecting our Results of Operations and Financial Condition

We believe that the following factors have significantly affected our results of operations and financial condition during the periods under review and may continue to affect our results of operations and financial condition in the future:

Maintaining our Customer Relationships

Our company has built long-term customer relationships, leading to recurring business through customised services across various verticals, reducing vulnerability to economic cycles and dependence on specific customers. Our strong brand, market position, and commitment to quality and operational excellence, supported by technology, drive customer retention and satisfaction. This approach allows us to cross-sell services and increase our share of customer business. However, a slowdown in customer demand could adversely impact our revenues and operations.

What value UDS is bringing to the industry?

UDS stands out in the Integrated Facilities Management (IFM) space due to its comprehensive service offerings and its ability to cater to a wide range of industries. Unlike many competitors who focus primarily on either soft services like housekeeping or hard services such as mechanical and electrical support, UDS provides a holistic solution under one roof. This unique approach allows clients to streamline their facilities management processes, reducing the complexity and cost of dealing with multiple vendors. UDSs extensive portfolio includes everything from housekeeping and landscaping to sophisticated engineering support services for auto manufacturers and airports, demonstrating its versatility and capability to meet diverse client needs efficiently.

Another significant advantage of UDS is its deep commitment to quality and continuous improvement, which is evident in its range of training programmes and the expertise of its workforce. With a structured 30-day training capsule for new employees and a focus on covering the entire skill pyramid from unskilled to highly skilled labour, UDS ensures that its staff are well- prepared to handle various operational challenges. This dedication to developing a highly skilled workforce not only enhances service delivery but also builds long-term partnerships with clients, as seen with companies like Saint-Gobain India, which has enjoyed a two-decade- long relationship with UDS marked by consistent growth and mutual trust.

Furthermore, UDSs strategic vision to diversify and integrate its services into a cohesive business services platform significantly boosts its value proposition. By expanding into higher-margin business services and acquiring companies in various sectors, UDS has managed to maintain profitability despite the traditionally low margins in the facilities management industry. This integrated approach allows UDS to offer a comprehensive suite of services to clients, ranging from background verification to food services, thereby adding significant value and convenience. The ability to offer such a broad spectrum of services, combined with the implementation of technology and robotics to address resource shortages, positions UDS as a forward-thinking and reliable partner in the IFM sector.

Industry Structure and Developments (IFM)

In 2024, the Indian facility management market is expected to be valued at $2,328 billion. implying a CAGR of 14.6% This market is highly fragmented with significant potential for consolidation. Its growth is driven by increased outsourcing, government infrastructure investments, rising environmental compliance standards, and a shift towards Integrated Facility Management services. Technological advancements continue to drive the field, enhancing efficiencies and providing greater value to clients. Large customers are moving from input-based relationships to outcome-focused strategic partnerships, recognising cleaning and workplace management services as vital to corporate culture, employee wellness, and engagement. As economies recover from the COVID-19 pandemic and related restrictions, the Facility Management market is expected to expand. Businesses now view Facility Management solution providers as hygiene partners rather than just janitorial service providers.

Exhibit: Outsourced IFM Market: Historic and Forecast Revenue Trend, FY2018 - FY2027

Soft Services: The Indian Commercial Office segment experienced a strong recovery in returning to office work over the past year, leading to a significant increase in demand for Housekeeping, Cleaning, and Disinfection Services. With the continued trend towards hybrid work models, the demand for these services in the Office segment is expected to remain high in the coming years. Analysing market growth drivers and investments in key end-user segments, the market is projected to reach 325,078.17 million by FY2028, with a compound annual growth rate (CAGR) of 14.8%.

Warehouse Management Industry

Indias warehousing sector has significant growth potential, fuelled by investments from E-commerce, FMCD, FMCG, Manufacturing, and Retail sectors. Despite this potential, Indias per capita warehousing stock is much lower compared to the US, China, and the UK, making it an attractive market due to rising per capita income and population growth. The sector is highly fragmented, with 40% organised and 60% unorganised. Multinational corporations mainly focus on Tier 1 and Tier 2 cities, while local enterprises primarily serve Tier 3 cities.

Institutional Catering Services Industry

Economic growth in India, coupled with increased investments in services, industry, education, and tourism sectors, has significantly expanded the Catering Services Market. The growth is further propelled by industries and offices relocating to semi-urban areas, boosting demand for on-site kitchens to cater to employees commuting long distances. Additionally, the rise in Meetings, Incentives, Conferences, and Exhibitions (MICE) tourism has driven market expansion, with India now capable of hosting world-class events. The Ministry of Tourisms National Strategy for the MICE Industry is expected to fuel longterm growth, supporting demand for catering services. Valued at 287,600 million in FY2023, the Catering Services Market in India experienced a compound annual growth rate (CAGR) of 12.8% from FY2018 to FY2023.

Industry Structure and Developments (BSS) Sales Enablement

The Sales Enablement Platform Market size is estimated at USD 3.5 billion in 2024, and is expected to reach USD 8.79 billion by 2029, growing at a CAGR of 20.23% during the forecast period (2024-2029). Organisations across industries are adopting the sales enablement platform, enabling their sales and marketing teams to enhance their efficiencies in various areas, including sales communication, content management, onboarding, and training. The BSS market is expected to grow at a CAGR of 15.3% from FY2022 - FY2028 and reach 14,477.6 crores

(Source: https://www.mordorintelliqence.com/industrv-reports/ sales-enablement-platform-market)

Employee Background Verification Industry (Global)

Global Background Check Market size was valued at USD 12.35 billion in 2022 and is poised to grow from USD 13.83 billion in 2023 to USD 34.25 billion by 2031, growing at a CAGR of 12% in the forecast period (2024-2031).

Airport Ground Handling Services Industry

The Airport Ground Handling Systems Market, valued at USD 4.52 billion in 2024, is projected to reach USD 8.44 billion by 2029, growing at a CAGR of 13.33% during this period.

(Source: https://www.mordorintelliqence.com/industrv-reports/ airport-ground-handling-systems-market)

IFM & BSS Industry Outlook

The Integrated Facilities Management (IFM) and Business Support Services (BSS) sector in India is poised for significant growth and evolution in the coming years. Indias shift towards a formal economy, driven by initiatives like GST expansion and digital payment adoption, is expected to fuel sustained demand for organised IFM services. Additionally, the competitive manufacturing sector, supported by digitalisation efforts, is driving industrial growth and export opportunities, further boosting demand for IFM and BSS.

In 2024, the Indian facility management market is expected to be valued at $2,328 billion and is expected to grow at a CAGR of 14.6% going forward.

Outsourcing facility management and support functions enables businesses to optimise operations, access specialised skills, and enhance agility, driving continued growth in the IFM and BSS sectors. With businesses increasingly recognising the strategic advantages of outsourced services, the demand for organised facility management and business support services is expected to continue growing.

As the industry evolves, there will likely be a greater emphasis on technological integration and innovation to meet the evolving needs of clients. The proliferation of sophisticated building management systems driven by digitalisation will expand the scope for IFM and BSS companies, offering opportunities for service differentiation and value addition.

Overall, the IFM and BSS sector in India is poised for robust growth, driven by the countrys economic transition, increasing adoption of outsourcing, and technological advancements. Companies operating in this space are well-positioned to capitalise on these opportunities by delivering comprehensive solutions that optimise efficiency, productivity, and sustainable growth for their clients.

Inorganic Growth through Strategic Acquisitions

Our company has strategically pursued targeted acquisitions to enhance operational scope, global competitiveness, and capitalise on synergies. Each acquisition has expanded our customer base, service portfolio, or geographic reach, enriching our offerings with high-margin services such as employee background verification, audit and assurance, feminine hygiene care, sales enablement, and airport ground handling. These acquisitions have diversified revenue streams, attracted top talent, and extended our presence along the value chain, primarily financed through internal resources. We plan to continue this strategy selectively, aiming to strike a balance between valuation and potential benefits. The Integrated Facilities Management (IFM) market in India is witnessing consolidation, driven by demand for organised and professional services. Leveraging this trend, we aim to enhance our business through strategic inorganic growth initiatives.

We will look to focus on opportunities to undertake acquisitions:

1. That allows us to enhance our scale and market position

2. That allows us to achieve operating leverage in critical markets by unlocking potential efficiency and synergy benefits

3. That provides us with a platform to extend our reach to new geographic markets within India and selected overseas markets, particularly for sales enablement, audit, and assurance, and employee background verification services

4. That adds new services complementary to our service offerings or allows us to enter strategic businesses to capture additional revenue opportunities from our existing customer base to better our margin profile

However, acquisitions present a multitude of challenges, including the financial implications stemming from the historical liabilities of prospective acquisitions, complexities associated with integrating acquired business management and personnel, potential difficulties in retaining or transitioning existing customers of the acquired entity, and legal considerations pertaining to operational restructuring. While we maintain confidence that the incorporation of our acquisitions and the consolidation of their financial outcomes in our consolidated statements will enhance our financial performance, it remains plausible that we may encounter obstacles in fully realising the expected benefits of future acquisitions within our anticipated timeframe.

Regulatory Environment for the Labour Market in India

Our company is subject to labour legislations that protect the interests of workers, as well as laws and regulations relating to employee welfare and benefits such as minimum wage and maximum working hours, overtime, working conditions, non-discrimination, employee compensation, employee insurance, bonus, gratuity, provident fund, leave benefits and other such employee benefits. These laws in India are enacted both by the Central Government and the State Governments in India. These laws and regulations vary from state to state in India and are subject to changes. This legislation requires compliance from time to time, which may, among others, involve payments to be made depending upon their period of employment.

UDS Strategy Going Forward:

¦ Retain, strengthen and grow the customer base: We emphasise deepening relationships with customers through long-term, renewable contracts, creating a stable revenue model. Our strong brand and quality service enable customer retention and cross-selling.

¦ Grow market share in key segments: We aim to expand in key segments like commercial real estate and industrial facilities through customer-focused mining and business development. Our 70-member sales and marketing team drives new customer acquisitions and strengthens existing relationships.

¦ Introduce new products and services: To expand our market share, we will introduce new products and services targeting lucrative segments, leveraging Indias economic growth and initiatives like Make in India. We plan to achieve this through organic development, partnerships, and acquisitions, broadening our offerings in integrated facilities management and business support services, including BPO, infrastructure solutions, and specialised staffing.

¦ Continue to improve operating margins: Our focus on high-value added and highly technical services combined with increased revenue contribution from the BSS Segment should help us boost operating margins by 25-50 bps going forward per year.

¦ Pursuing inorganic growth: We aim to achieve inorganic growth through strategic acquisitions of high-margin businesses that complement our operations. Our successful acquisition history and seamless integration empower us to diversify our service portfolio, offering higher value-added, higher- margin services to customers.

Internal Control Systems and their Adequacy

¦ Our company maintains all its records and routes all approvals using an ERP system.

¦ Our company has laid down adequate systems and well-drawn procedures for ensuring internal financial controls. It has appointed an external audit firm to check and monitor internal control measures periodically. Internal auditors are present at the audit committee meetings where internal audit reports get discussed alongside management comments and the final observation of the internal auditor.

¦ The Board of directors have adopted various policies put in place controls and monitoring measures for ensuring the orderly and efficient conduct of the business of the company, the safeguarding of the assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

¦ Our company has availed the services of an external firm of chartered accountants to evaluate the adequacy of the internal financial control systems adopted by the company. They have expressed satisfaction with the existing internal financial control system prevalent in the company.

¦ The statutory auditors have also expressed satisfaction with their audit report to the shareholders.

¦ The audit trail feature, as mandated by the Companies (Accounts) Rules 2014 (as amended) with effect from 1 April 2023, has been enabled in the accounting software used by the Company. Our Company also has set up practices for daily backup of the entire database and applications in remote locations.

Discussion on Standalone Financial Performance with Respect to Operational Performance

Particulars	Standalone (in millions)
	31 March 2024	31 March 2023
Revenues from Operations	14171.16	13,085.42
Other Income	286.53	285.51
Total Income	14457.69	13,370.93
Profit Before Tax, Finance Charges/Income, depreciation, and Exceptional Items	694.35	654.16
Finance Charges (Net)	138.56	46.91
Provision for Depreciation	156.59	151.50
Profit Before Tax	399.2	378.54

Material Developments in Human Resources/Industrial Relations Front, including Number of People Employed

Relations between the management and the employees were cordial throughout the year under review. Currently our Company employs 65,232 employees across ranks.

Financial Ratios:-

The details of significant changes (ie., change of 25% or more as compared to the immediate previous financial year) in key financial ratios, along with detailed explanations, therefore:

Ratio	As on 31st March, 2024	As on 31st March, 2023	% variance	Reason for variance
a) Current ratio (Times)	1.6	0.8	90%	The ratio has increased from 0.83 for the year ended March 31, 2023 to 1.58 for the year ended March 31, 2024 primarily on account of unutilised IPO funds amounting to 2,215.05 million which were temporarily invested in fixed deposits with banks and held in monitoring agency bank account as at March 31, 2024.
b) Debtors Turnover (Times)	4.44	4.69	(5.26%)	-
c) Net profit ratio (%)	2.49%	2.48%	0.58%	-

 

Ratio	As on 31st March, 2024	As on 31st March, 2023	% variance	Reason for variance
d) Inventory Turnover	Not Applicable			NA
e) Debt-equity ratio (Times)	0.07	0.55	(88%)	The ratio has decreased from 0.55 for the year ended March 31, 2023 to 0.07 for the year ended March 31, 2024 on account of repayments of borrowings during the year and increase in total equity pursuant to IPO.
Trade receivables turnover ratio	4.44	4.69	(5.3%)	-
g) Interest Coverage Ratio	0.06	0.06	(10%)	-
h) Operating Profit Margin	4.29%	4.74%	9.4%	-
i) Return on Equity	6.5%	10.5%	(38.1%)	The ratio has decreased from 10.52% for the year ended March 31, 2023 to 6.52% for the year ended March 31, 2024 due to increase in average total equity during the year ended March 31, 2024.

*Note all Ratios are calculated on consolidated basis

¦ Current Ratio Formula: Current Assets/Current Liabilities

¦ Debtors Turnover Formula: Revenue from Operations/Average Trade Receivable

¦ Net Profit Ratio Formula: Net Profit/Revenue from Operations

¦ Debt to Equity Ratio: Gross Debt/Total Equity

¦ Interest Coverage Ratio Formula: EBIT/Finance Cost

¦ ROE Formula: PAT/Average Equity

Notice

Notice is hereby given that the 21^st Annual General Meeting (AGM) of the Company will be held on Monday, July 08, 2024, at 12.00 PM through Video Conferencing (VC)/Other Audio Visual means, to transact the following business.

Ordinary Business

1. To receive, consider, approve and adopt the Audited Standalone Financial Statements along with the Reports of the Board of Director and Auditors of the Company for the financial year ended March 31, 2024

To consider and if thought fit to pass the following resolution as an Ordinary Resolution:

RESOLVED THAT the audited standalone financial statements of the Company which includes the Audited Balance Sheet as at March 31, 2024, the Statement of Profit and Loss for the financial year ended as on that date and the Cash Flow Statement together with reports of the Board of Directors and the Statutory Auditors thereon, as circulated to the members, be and are hereby considered and adopted.

2. To receive, consider, approve and adopt the Audited Consolidated Financial Statements along with the Reports of the Auditors of the Company for the financial year ended March 31, 2024

To consider and if thought fit to pass the following resolution as an Ordinary Resolution:

RESOLVED THAT the audited consolidated financial statements of the Company which includes the Audited Balance Sheet as at March 31, 2024, the Statement of Profit and Loss for the financial year ended as on that date and the Cash Flow Statement together with reports of the Statutory Auditors thereon, as circulated to the members, be and are hereby considered and adopted.

3. To appoint Mr Amitabh Jaipuria (DIN: 01864871) who retires by rotation, as a Director of the Company:

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

“RESOLVED THAT in accordance with the provisions of Section 152 and other applicable provisions of the Companies Act, 2013 Mr Amitabh Jaipuria (DIN:

01864871) Non-Executive Non-Independent Director, who retires by rotation at this meeting be and is hereby appointed as a Director of the Company.”

Special Business

4. To consider and approve the Payment of Commission to Mr Sunil Rewachand Chandiramani, Non-Executive Independent Director

To consider and, if thought fit, to pass the following resolution as a Special Resolution:

RESOLVED THAT pursuant to the provisions of Sections 149 (9), 197, 198 read with Schedule V and other applicable provisions of the Companies Act, 2013 (“the Act”), the underlying rules (including any statutory modification(s) or reenactment(s) thereof for the time being in force), and Regulation 17(6) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, framework for remuneration to non-executive directors and subject to such regulatory approvals as may be required and subject to availability of net profits at the end of financial year and as per NRC recommendation, approval of the Members is hereby accorded to the payment and distribution of such sum in the form of profit related commission (exclusive of applicable taxes) subject to not exceeding 1% of net profits of the Company calculated in accordance with the provisions of Section 198 of the Act, to Mr Sunil Rewachand Chandiramani, Non-Executive Independent Director of the Company as per details given below, for the financial year ending 31 March 2025:

Sl. Name of the no Director	Period	Commission to be paid
1 Sunil Rewachand Chandiramani, Non-Executive Independent Director	1st April 2024 to 31st March 2025	As per NRC recommendation subject to not exceeding 1% of net profits of the Company calculated in accordance with the provisions of Section 198 of the Act

RESOLVED FURTHER THAT the above payment of commission is in addition to sitting fees and reimbursement of expenses for attending the meetings of the Board of Directors and/or other meetings being paid to the Non-Executive Directors.

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all such acts, deeds, matters and things including deciding on the manner of payment of commission and settle all questions or difficulties that may arise with regard to the aforesaid resolution as it may deem fit and to execute any agreements, documents, instructions, etc. as may be necessary or desirable in connection with or incidental to give effect to the aforesaid resolution.

NOTES

1. AGM through Video Conference (VC)

The Ministry of Corporate Affairs (“MCA”) inter-alia vide its General Circular Nos. 20/2020, 14/2020, 17/2020, 02/2021, 21/2021, 02/2022, 03/2022, 10/2022, 11/2022, 09/2023,) (collectively referred to as “MCA Circulars”) and Circular numbers SEBI/ HO/CFD/CMD1/CIR/P/2020/79 and SEBI/HO/CFD/ CMD2/CIR/P/2022/62 issued by the Securities and Exchange Board of India (SEBI) (hereinafter collectively referred to as “the Circulars”), Companies are allowed to hold AGM through Video Conferencing (VC)/Other Audio Visual Means (OAVM), without the physical presence of members at a common venue. The deemed venue for the AGM shall be the Registered Office of the Company. The detailed procedure for participating in the meeting through VC / OAVM is appended herewith and also available at the Companys website www.uds.in

2. Proxy

Since the AGM is being held in accordance with the MCA Circulars through VC, physical attendance of Members has been dispensed with. Accordingly, the facility for appointment of Proxies by the Members will not be available for the AGM and hence, the Proxy Form and Attendance Slip are not annexed to this Notice.

However, Body Corporates Members, are entitled to appoint authorised representatives to attend the AGM through VC/OAVM and participate thereat and cast their votes through e-Voting, provided certified copy of the Board Resolution/Power of Attorney authorising their representative to attend and vote in the AGM, pursuant to Section 113 of the Act, is sent to the Company through e-mail at compliance. officer@uds.in or by post to the Registered Office of the Company at 1^st Floor, 42 Gandhi Mandapam Road, Kotturpuram, Chennai - 600 085.

3. Quorum

The attendance of the Members attending the AGM through VC/OAVM will be reckoned for the purpose of quorum, under Section 103 of the Companies Act, 2013 (“the Act”).

4. Register of Directors

The Register of Directors and Key Managerial Personnel and their shareholding, as maintained under Section 170 of the Companies Act, 2013 and the Register of Contracts or Arrangements in which the Directors are interested, as maintained under Section 189 of the Companies Act, 2013, and all other documents referred to in this Notice and Statement will be available electronically for inspection by the Members during the AGM without payment of any fee by the Members from the date of circulation of this Notice up to the date of AGM, i.e. 8^th July 2024. The said documents will also be available for inspection by Members at the Registered Office of the Company between 10:00 hrs (IST) and 17:00 hrs (1ST) on all working days of the Company upto the date of the AGM. Members, seeking to inspect such documents, can send an e-mail to compliance. officer@uds.in.

5. Particulars of Directors

Particulars of Director seeking reappointment, pursuant to Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard-2 (SS-2), are given in Appendix - A.

6. I n compliance with the MCA and SEBI Circulars, Notice of the AGM along with the Annual Report for 2023-24 is sent only through electronic mode, to those Members whose e-mail addresses are registered with their Depository Participants or with the RTA.

Members may note that he Notice and Annual Report for 2023-24 will also be available on the Companys website www.uds.in, websites of the Stock Exchanges viz., BSE Limited and National Stock Exchange of India Limited at www.bseindia. com and www.nseindia.com respectively, and on the website of NSDL, https://www.evoting.nsdl. com. Instructions to Members for attending the AGM through Video Conference is given in Appendix - B.

7. Voting Facilities

(a) Remote e-Voting

Pursuant to Section 108 of the Companies Act, 2013, read with Rule 20 of the Companies (Management & Administration) Rules, 2014, Circulars issued by MCA and SEBI in this regard and as amended from time to time and Regulation 44 of SEBI (Listing Obligation & Disclosure Requirements) Regulations 2015, as amended from time to time, the Company provides facility for its Members to exercise their voting right by electronic means in respect of the business to be transacted at the AGM.

The Company has availed the services of National Securities Depository Limited (NSDL) for facilitating voting through electronic means.

The remote e-voting period commences on, Thursday 4^th July 2024 - (9:00 a.m. IST) and ends on, -Sunday -7^th July 2024 (5:00 p.m. IST). During this period, Members holding shares as on 1^st July 2024, i.e. cut-off date, may cast their vote electronically.

The voting rights of Members shall be in proportion to their shares in the paid up equity share capital of the Company as on the cut-off date for e-voting Monday, 1^st July 2024

The Board of Directors has appointed SPNP associates Practising Company Secretary as the Scrutinizer to scrutinize the e-voting process in a fair and transparent manner.

Process and manner of e-Voting, containing detailed instructions, is given in Appendix -B

(b) Voting at Annual General Meeting (E-Voting during the AGM)

Members present in the AGM through VC and who have not cast their vote on the Resolutions through Remote e-Voting and are otherwise not barred from doing so, shall be eligible to vote through the e-Voting system during the AGM.

The Procedure for e-Voting on the day of AGM is same as the instructions given for Remote E-Voting in Appendix - B

Members who need assistance before or during the AGM in the use of technology, can send a request to evoting@nsdl.com or call at 022 -4886 7000 or 022 -2499 7000 or Contact Ms Prajakta Pawle, NSDL at the designated e-mail ID: evoting@nsdl.co.in.

8. Permanent Account Number

SEBI has mandated the submission of the Permanent Account Number (PAN) by every participant in the securities market. Members holding shares in electronic form are, therefore, requested to submit their PAN to their Depository Participant(s).

9. Route Map

Since the AGM will be held through VC, the Route Map is not annexed in this Notice.

10. Nomination Facility

As per the provisions of Section 72 of the Act, the facility for making nomination is available for the Members in respect of the shares held by them. Members who have not yet registered their nomination are requested to register the same by submitting Form No. SH-13. The form can be downloaded from the Companys website www. uds.in. Members are requested to submit these details to their DP.

11. M embers are requested to intimate to their Depository Participants the changes, if any, pertaining to their name, postal address, e-mail address, telephone/mobile numbers, Permanent Account Number (‘PAN), mandates, nominations, power of attorney, bank details such as, name of the bank and branch details, bank account number, MICR code, IFSC code, etc., for equity shares held in dematerialised form.

12. SEBI vide its notification dated January 25, 2022 has amended Regulation 40 of the SEBI (LODR) Regulations and has mandated that all requests for transfer of securities including transmission and transposition requests shall be processed only in dematerialised form. In view of the above and to eliminate the risks associated with physical shares, Members are advised to maintain their shares in demat mode.

13. Members may please note that SEBI vide its Circular No. SEBI/HO/MIRSD/MIRSD_ RTAMB/P/CIR/2022/8 dated January 25, 2022 has mandated the listed companies to issue securities in dematerialised form only while processing service requests, viz., Issue of duplicate securities certificate; claim from unclaimed suspense account; renewal/exchange of securities certificate; endorsement; sub-division/splitting of securities certificate; consolidation of securities certificates/folios; transmission and transposition.

14. Members are advised to not leave their demat account(s) dormant for long. Periodic statement of holdings should be obtained from the concerned Depository Participant and holdings should be verified from time to time.

15. Declaration of results on the resolutions:

a) The Scrutinizer shall, immediately after the conclusion of voting at the AGM, unblock the votes cast during the AGM and votes cast through remote e-voting and shall submit a consolidated Scrutinizers Report of the total votes cast in favour or against, if any, to the Chairperson or a person authorised by him in writing, who shall countersign the same. The results will be announced within the time stipulated under the applicable laws.

b) The result declared along with the Scrutinizers Report shall be placed on the Companys website www.uds.in and on the website of e-voting service provider (NSDL) within two (2) working days from the conclusion of the Meeting. The Company shall simultaneously forward the results to National Stock Exchange of India Limited and BSE Limited, where the shares of the Company are listed.

c) Subject to receipt of requisite number of votes, the resolutions shall be deemed to be passed on the date of the Meeting i.e. day 8^th July 2024