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Directors Report of Usha Martin Ltd.

Mar 31, 2015

Dear Shareholders,

The Board of Directors of Usha Martin Limited present the 29th Annual Report and audited accounts for the financial year ended 31st March, 2015. FINANCIAL SUMMARY / HIGHLIGHTS (Rs. in Crores)

Stand alone Consolidated

31st 31 31st 31 march, march, march, march, 2015 2014 2015 2014

Net Sales 3,746.05 3,287.12 4,561.10 4,073.83

Other Income 38.68 77.83 36.99 92.49

Net Sales and Other Income 3,784.73 3,364.95 4,598.09 4,166.32

Profit Before Interest, Depreciation & Tax (Before Exceptional Items) 646.38 692.82 753.48 799.43

Depreciation 383.00 303.51 418.42 333.20

Finance Costs 507.39 426.17 521.94 439.56

Profit Before Tax (Before Exceptional Items) (-)244.01 (-)36.86(-)186.88 26.67

Exceptional Items (-)100.16 - (-)100.16 -

Tax expenses (Current Tax, Deferred Tax, Net of MAT Credit Entitlement and reversal) (-)51.76 (-)11.18 (-)35.64 13.45

Profit After Tax (-) 292.41 (-)25.68 (-)251.40 13.22

Minority Interest - - (-)1.72 (-)2.52

Profit after Tax and Minority interest - - (-)253.12 10.70

Profit Brought Forward from Previous Year (-)3.31 22.37 335.17 332.70

Appropriations are made as under:

-Transfer to Capital Redemption Reserve - - 8.00 8.00

-Proposed Dividend on Equity Shares and Tax thereon - - 0.21 0.23

- Adjustment arising on acquisition of controlling interest in a Joint Venture - - 0.10 -

-Balance Carried Forward to next year (-)295.72 (-)3.31 73.74 335.17

Review of operations

The turnover for the year increased to Rs. 4561.10 crores on consolidated basis and Rs. 3746.05 crores on standalone basis from Rs. 4,073.83 crores and Rs. 3,287.12 Crore respectively in the previous year. Despite there being suboptimal business conditions for steel and mining industry, the Company could achieve a growth of 12% and 14% respectively. However, operating profit reduced on consolidated basis from Rs.799.43 crores in previous year to Rs.753.48 crores in the current financial year and on standalone basis from Rs.692.81 crores to Rs.646.38 crores. Consequently operating margins lowered to 16.5% and 17.3% on consolidated and standalone basis respectively.

As per decision of Hon'ble Supreme Court of India which de-allocated coal mines, there was an additional levy of Rs.83 crores on the production of coal since beginning of coal mining operations to 31st March, 2015. This, along with other write downs on investment made in coal mines amounting to Rs.16.43 crores, has been shown as exceptional items. The net loss after tax was Rs.253.1 2 crores on consolidated basis and Rs.292.41 crores on standalone basis for the financial year 2014-15.

The detailed review of operations under steel and wire & wire rope

businesses has been discussed in Management Discussion and Analysis which forms part of this report.

Dividend & Reserves

In view of there being no profits, the directors are unable to recommend dividend for the year under review, nor do they propose to carry any amount to reserves.

outlook and business

During the year there has been a formation of central government with clear majority after a long period of time in the past. This has ushered in positive hopes of government taking bold initiatives for accelerating the process of recovery and growth in business conditions with enduring sustainability.

However, during the year the steel industry has witnessed lowest production growth in the recent past and touching as low as 0.5%. The major segment which consumes the Company's product, i.e automobile, has also seen mixed conditions. During the 2nd half of the year, the increased cheaper imports have also created new threats for the industry.

These difficult conditions in steel industry have also been felt in wire & wire rope business as well across the global and in domestic markets.

In September, 2014 the Hon'ble Supreme Court of India de-allocated the coal mines allotted since 1993 and imposed additional levy @ Rs.295 per MT on the coal produced since beginning to 31st March, 2015. As a result, the Company's two coal mines viz. Kathautia and Lohari coal mines were also de-allocated and the Company had to incur Rs.83 crores on its' coal production from beginning. Kathautia coal mine was already operational whereas Lohari coal mine was yet to be made operational.

As a part of subsequent new policy initiatives, the Central Government decided to allocate coal mines through e-auctions. The Company participated in these auctions and successfully won Brinda & Sasai coal block in Jharkhand at a price of Rs.1804 per MT. This coal block is

expected to be commissioned for production in financial year 2017-18.

After completion of cost optimization projects during the previous financial year, beneficiation and pellet plants were under stabilization during the current financial year

The manufacturing unit of the Company at Nawalgang, Agra has been closed down and appropriate steps are being taken to dispose off the surplus assets lying in the said location.

No material changes and commitments have taken place since close of the previous financial year and till the date of this report which may significantly affect the financial position of the Company adversely.

TPM & Quality

Steel Division and Wire Ropes & Speciality Products Division continue to have certification for its quality management systems being in accordance with ISO 9001 2000 from BVQI.

The TQM journey of Wire & Wire Rope Division for further strengthening competitiveness is progressing well to ensure long term benefits to the Company.

Subsidiaries & Joint Ventures

The international subsidiaries provide significant synergy and support to the Company's wire rope business and performance. Further, all the operating subsidiaries of the Company have continued to perform reasonably well in the economic and business circumstances which prevailed during the year under review.

The key joint ventures formed by the Company namely, Pengg Usha Martin Wires Private Limited and Dove Airlines Private Limited have reported satisfactory results in the year under review.

During the year, Gustav Wolf Specialty Cords Limited, a Joint Venture of the Company and Usha Martin Power & Resources Limited, a subsidiary of the Company were converted into wholly owned subsidiary of the Company.

During the year under review EMM Caspian Limited, a step down subsidiary of the Company, has been dissolved after strategic review by the Company.

A statement covering report on the performance and financial position of each of the subsidiaries, associates and joint venture is provided separately and forms part of this report.

Environment

Steel Division and Wire Ropes & Speciality Products Division operate under ISO 14001 Environment Management Systems (EMS) Standards from Det Norseke Veritas (DNV), of U.K. The effectiveness of these systems is evident from reduced oil and water consumption, reuse of waste oils and water, utilization of iron containing wastes.

Wire Rope & Specialty Products Division is driving improvements in effluent treatment plant to eliminate sludge carry over by incorporation of filter press, the output of which is being used for non-critical applications, and continues to target zero discharge condition. The Division is also focused on reducing air pollution by converting from oil to LPG and eliminating emission of un-burnt fuels in atmosphere.

Deposits

During the year the Company has not accepted any deposit under Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014. As on 31st March, 2015, there are no unclaimed deposits with the Company. Further the Company has not defaulted in repayment of deposits or payment of interest thereon.

Significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Company's operations in future.

During the year no material orders were passed by any regulatory authority or court which may affect the status of going concern of the Company.

However, during the year the Hon'ble Supreme Court of India passed order relating to de - allocation of two coal mines of the Company namely Kathautia and Lohari Coal blocks. The Kathautia coal block was in operation since 2010 and up to March 2015.

Details in respect of adequacy of internal financial controls with reference to the financial statements.

Adequate internal financial controls exist in the Company with reference to the financial statements. The processes and controls were subjected to assessment by an independent agency and no reportable material weakness was observed in the same. However, the Company is in process of further strengthening the controls and processes.

Corporate Governance

Your Company has complied with requirements of Clause 49 of Listing Agreement and followed practice of getting disclosures from directors and senior management personnel relating to any material financial and

commercial transactions where they have any personal interest with a potential conflict of interest with the Company at large. A detailed report on Corporate Governance is annexed.

Directors

Mr. B K Jhawar and Mr. Brij K Jhawar are retiring by rotation and offer themselves for reappointment.

During the year Mr. P S Bhattacharyya was appointed as an Independent Director on 31st July, 2014 for a period of 5 years and the existing Independent Directors namely Mr. G N Bajpai, Mr. Jitender Balakrishnan, Mr. Salil Singhal and Mrs. Ramni Nirula were also appointed for a period of 5 years w.e.f 31st July, 2014 in accordance with provisions of the Companies Act, 2013 and the Listing Agreements.

Dr. Vijay Sharma ceased to be a Director with effect from 25th May, 2014, Mr. Nripendra Misra ceased to be a Director with effect from 26th May, 2014 and Mr. R S Thakur ceased to be a Director with effect from 10th July, 2014.

Details regarding the composition, terms and references, number of meetings and attendance of respective members of the various sub - committees of board are provided separately in the Corporate Governance Report.

Directors' Responsibility Statement

Pursuant to requirements under Section 134 (5) of the Companies Act, 2013 with respect to Directors Responsibility Statement, it is hereby confirmed that:

(i) the applicable accounting standards have been followed in preparation of annual accounts for financial year ended 31st March, 2015 and proper explanations have been furnished relating to material departures;

(ii) the accounting policies have been selected and applied consistently and prudent judgments and estimates have been made so as to give a true and fair view of state of affairs of the Company at end of financial year and of profit/loss of the Company for year under review;

(iii) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with provisions of the Companies Act, 2013 for safeguarding assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the annual accounts for financial year ended 31st March, 2015 have been prepared on a going concern basis.

(v) proper internal financial controls were in place and that the financial controls were generally adequate and operating effectively except in few cases which were dealt suitably.

(vi) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors.

Criterions have been formulated for formal evaluation of the individual directors, Board as a whole and various sub-committees. The directors evaluated performance of other directors (excepting themselves), the Board as a whole and its' various sub - committees and provided their feedback to the Nomination & Remuneration Committee. The Nomination & Remuneration Committee after reviewing the feedback received from directors provided its' recommendation to the Board for final evaluation.

Company's policy on Directors appointment and remuneration including criteria for determining qualification, positive attributes, independence of directors.

In accordance with the provisions of Companies Act, 2013 and Clause 49 (as amended), the Board of Directors of the Company on recommendation of the Nomination and Remuneration Committee have adopted a criteria for determination of qualification, positive attributes and independence of directors and Policy for Remuneration of Directors, a Policy for Remuneration of Senior Management Personnel (including Key Management Personnel) and a Policy for Remuneration of Other Employees.

The above mentioned Criteria and Policies are available at www. ushamartin.com/investor.

Vigil Mechanism and Whistle Blower Policy

The Company has adopted a Vigil Mechanism and Whistle Blower Policy to provide a framework to promote responsible and secure reporting of undesirable activities ("whistle blowing"). Through this Policy, the Company seeks to provide a mechanism to all the employees, or directors of the Company ("whistleblower") to disclose any misconduct, malpractice, unethical and improper practice taking place in the Company for appropriate action and reporting, without any fear of any kind of discrimination, harassment, victimization or any other unfair treatment or employment practice being adopted against the whistleblower. The same is available on the Company's website www.ushamartin.com. Human resource & managerial remuneration The required disclosures in accordance with Section 197 read with Rule 5 of Companies (Appointment of Managerial Personnel) Rules 2014 are provided separately and forms part of this report.

CEo and CFo Certification

In accordance with the provisions of the Clause 49 of the Listing Agreement, the Managing Director and Chief Financial Officer of the Company have submitted a certificate for the year ended 31st March, 2015, to the Board of Directors.

Additional Disclosures

In line with requirements of Listing Agreements and Accounting

Standards issued by the Institute of Chartered Accountants of India, the Company made additional disclosures in respect of Consolidated Financial Statements, Related Party Transactions and Segmental Reporting.

Auditors

In accordance with the provisions of Section 139 of the Companies Act, 2013 and the transition period mentioned therein, M/s Price Waterhouse, Chartered Accountants were appointed as Statutory Auditors of the Company for a period of two years at the 28th Annual General Meeting of the Company held on 31st July, 2014 and they will continue in office upto the conclusion of the 30th Annual General Meeting.

However, in accordance with the provisions of Section 139 of the Companies Act, 2013, their continuance of office as Auditors shall be subject to ratification of members at the forthcoming Annual General Meeting.

Yours Directors invite your attention to note 51 to the accounts referred to by auditors in para 8 of their report. This note is self explanatory and along with explanations given therein provide required clarification on references made by the auditors.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 and Rules made there under, the Board has appointed M/s. Guha, Ghosh, Kar & Associates, Cost Accountants, to conduct cost audit of the Company for the year 2014-15 and had recommended their remuneration to the shareholders which was ratified at the Annual General Meeting held on 31st July, 2014.

The Board of Directors have appointed M/s Guha, Ghosh and Kar as the Cost Auditors for the financial year 2015-16 and their remuneration is sought to be ratified from the shareholders at the forthcoming Annual General Meeting.

Secretarial Auditor

During the year under review the Board of Directors had appointed M/s Anjan Kumar Roy & Co. firm of Practicing Company Secretaries for conducting secretarial audit in accordance with the provisions of Companies Act, 2013 and the rules framed thereunder. The Secretarial Audit Report is annexed and forms part of this report.

Corporate Social Responsibility

Usha Martin Limited has been constantly involved in sustainable development of communities around its plants & mines and have also expanded its CSR activities to the other districts of Jharkhand. Commitment of founders of Usha Martin towards sustainable development has led KGVK, an non - profit seeking organization was started as CSR arm of the Company to reach more than 190 villages of Jharkhand.

In accordance with the provisions of the Companies Act, 2013 the

Company have constituted a Corporate Social Responsibility Committee which comprises of the following members:

Mr. B K Jhawar - Chairman (Non - executive director)

Mr. Brij K Jhawar - Member (Non - executive director)

Mrs. Ramni Nirula - Member (Independent Director)

The contents of the CSR Policy of the Company and the CSR activities undertaken by KGVK on behalf of the Company (including the Annual Report on CSR activities) has been annexed separately and forms part of this report.

Extract of Annual Return

The details forming part of the extract of the annual return is enclosed in Form MGT 9.

Number of Meetings of Board and its sub - committees

The details regarding meetings of the Board and its sub - committees have been provided in the corporate governance report.

Report on the performance and financial position of each of the subsidiaries, associates and joint ventures.

Analysis of the performance of key subsidiaries and joint ventures has been provided in the Management Discussion and Analysis section and the same forms part of this report.

Statement on declaration given by independent directors under Section 149 of the Companies act, 2013

As required under provisions of Companies Act, 2013 and Listing Agreements, all Independent Directors' of the Company have confirmed that they meet the criteria of independence.

Particulars of loans, guarantees and investments

The particulars of loans, guarantees or investments are provided in the Financial Statement.

Particulars of contracts or arrangements with related parties

All related party transactions are entered on arm's length basis and are in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Agreement. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel which may have potential conflict with the interest of the Company at large. Further, as required under Clause 49 (as amended) of the Listing Agreement, prior omnibus approval of the Audit Committee has been obtained for transactions with related parties (other than with wholly owned subsidiaries).

The related party transactions policy as approved by the Board has been uploaded on the Company's Website.

The details of the transactions with related parties are provided in Note 48 of the standalone financial statement. Further, the Form AOC - 2 is not attached with this Report as there were no such related party transactions for which disclosure under Rule 8 of the Companies (Accounts) Rules, 2014 is required.

Conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

A statement in accordance with the provisions of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is attached separately and forms part of this Report.

Risk Management

During the year under review, a Risk Management Committee as a sub - committee of the Board was formed with the following directors as members, to assist the Board in discharging its responsibilities towards management of material business risk (material business risks includes but not limited to operational, financial, sustainability, compliance, strategic, ethical, reputational, product quality, human resource, industry, legislative or regulatory and market related risks) including monitoring and reviewing of the risk management plan / policies in accordance with the provisions of clause 49 of the Listing Agreements.

Mr. P S Bhattacharyya - Chairman (Independent Director)

Mr. Rajeev Jhawar - Member (Managing Director)

Mr. P K Jain - Member (Jt. Managing Director

[Wire & Wire Rope Business]

Further, as on date there are no additional material risks (apart from the general market risks) which in the opinion of the Board may threaten the existence of the Company.

Appreciation

Your directors place on record their appreciation for the valuable co- operation and support of customers, suppliers, contractors, shareholders, investors, government authorities, financial institutions, banks, partners and collaborators.

On behalf of the Board of Directors

p Jhawar

Place: Kolkata Chairman

Date: 25th May, 2015


Mar 31, 2013

Dear Shareholders,

The Board of Directors of your Company takes pleasure in presenting 27th Annual Report and audited accounts of your Company for the financial year ended 31st March, 2013.

FINANCIAL RESULTS (Rs. in Crs.)

Stand Alone Consolidated 31 March, 31 March, 31 March, 31 March, 2013 2012 2013 2012

Gross Sales including inter company/division sales and excise duty 4403.96 3920.16 5516.20 4932.00

Less: Excise Duty 302.45 243.87 313.44 253.92

Less : Inter company/ division sales 1056.98 839.40 1580.93 1317.26

Net Sales excluding excise duty and inter company/division sales 3044.53 2836.89 3621.83 3360.82

Other Income 43.22 42.64 89.08 63.94

Net Sales and Other Income 3087.75 2879.53 3710.91 3424.76

Profit Before Depreciation & Tax 245.56 153.95 367.34 234.11

Depreciation 235.24 197.76 263.84 222.71

Profit Before Tax 10.32 (-)43.81 103.50 11.40

Tax expenses (including deferred tax) 3.27 (-)11.04 21.24 4.78

Profit After Tax 7.05 (-)32.77 82.26 6.62

Minority Interest (-)3.42 (-)3.01

Profit after Taxation and Minority interest 78.84 3.61

Profit Brought Forward from Previous Year 22.67 55.44 267.38 263.86

Appropriations are made as under:

-General Reserve 2.00 4.08

- Transfer to Capital Redemption Reserve - - 4.00 -

-Proposed Dividend on Equity Shares and tax thereon 5.35 5.44 0.09

-Balance Carried Forward to next year 22.37 22.67 332.70 267.38

REVIEW OF OPERATIONS

The Company''s operating profit increased to Rs. 705.20 Crs. on consolidated basis and Rs. 572.33 Crs on standalone basis from Rs. 497.77 Crs and Rs. 408.80 Crs respectively. On consolidated basis, the Company achieved profit after tax and minority interest of Rs. 78.84 Crs against Rs. 3.61 Crs. in previous year On standalone basis, the profit after tax is Rs. 7.05 Crs against loss of Rs. 32.77 Crs. in the previous year

The turnover for the year increased to Rs. 3621.83 Crs on consolidated basis and Rs. 3044.53 Crs on standalone basis against Rs. 3360.82 Crs and Rs. 2836.89 Crs respectively in the previous year

DIVIDEND

The Board of Directors recommends 15% dividend for the year ended 31st March, 2013, amounting to Rs. 5.35 Crs including dividend tax, surcharge and cess.

PROJECTS

The cost optimisation projects undertaken by the Company have progressed well. The major projects successfully commissioned during the financial year 12- 13 are 30 MW CPP, Char Beneficiation, DRI-V, 100 TPD Lime Kiln, Beneficiation Plant Phase-1, EBNER annealing furnace and Fume Exhaust System of SMS-2. The projects, which are under advanced stage of implementation, namely pellet plant, coke oven, Iron ore Beneficiation Plant Phase-2, DRI-IV, Waste Heat based 35 MW Captive Power plant and other related projects are expected to be commissioned in phases over FY 13-14. Upon completion, these projects would significantly strengthen cost base, which in turn would enhance profitability and competitiveness.

BUSINESS OUTLOOK

The adverse economic factors, such as higher level of fiscal deficit, expanding trade gap, deteriorating current account deficit, rising inflation and resultant higher interest rates which have caused industrial slow down and worsened economic environment in the financial year, continue to prevail with serious challenges to Indian economy even in current financial year However with the advantage of a higher level of integration with mineral resources and range of value added products, the Company is hopeful of performing better in future.

SUBSIDIARIES

The international subsidiaries provide significant synergy and support to the Company''s business and performance. All the operating subsidiaries of the Company have continued to perform reasonably well in the prevailing economic and business conditions during the year under review.

The facilities of Usha Siam Steel Industries Public Company Limited [USSIL], a key subsidiary of the Company which was severely affected in devastating floods in Thailand in October 2011, has resumed normal operations during the later part of the financial year.

The Statement under Section 212 of the Companies Act, 1956 in respect of subsidiaries of the Company is given separately.

JOINT VENTURES

All the key joint ventures formed by the Company namely, Pengg Usha Martin Wires Pvt. Ltd., Gustav Wolf Speciality Cords Ltd. and Dove Airlines Pvt. Ltd., have done reasonably well in the year under review.

During the year, Usha Siam Steel Industries Public Company Limited (USSIL) has entered into a Joint Venture Agreement with Tesac Wireropes Co Ltd (TWCL), Japan for setting up a new joint venture company named "Tesac Usha Wirerope Co. Ltd.” which shall manufacture specialty wire ropes for elevator and other applications. This new company had been incorporated under the laws of Thailand. USSIL, along with Usha Martin Singapore Pte Ltd. a wholly owned subsidiary of the Company, holds 50% equity in new JV, while the remaining 50% is being held by TWCL.

TPM & QUALITY

Steel Division and Wire Ropes & Speciality Products Division continue to have certification for its quality management systems being in accordance with ISO 9001 2000 from BVQI.

Wire & Wire Ropes Division has now embarked on the journey of TQM for further strengthening competitiveness of the Company.

The operational excellence recognised by these awards and quality management systems have resulted in tangible improvement in quality, cost, delivery and safety, besides intangible benefits like motivation and empowerment at all levels.

ENVIRONMENT

All manufacturing plants of your Company are running in an ecofriendly manner and have focus on workplace health and safety.

Steel Division and Wire Ropes & Speciality Products Division continue to enjoy Certification under ISO 14001 Environment Management Systems (EMS) Standards from Det Norseke Veritas (DNV), of U.K. The effectiveness of these systems is evident from reduced oil and water consumption, reuse of waste oils and water, utilization of iron containing wastes and improved green cover at steel plant site.

Wire Ropes & Speciality Products Division has been achieving significant improvements in effluent treatment to eliminate sludge carry over by incorporation of filter press, the output of which is being used for non-critical applications, and continues to target zero discharge condition. This Division has also reduced air pollution by converting from oil to LPG and eliminating emission of un-burnt fuels in atmosphere.

HUMAN RESOURCES

The Board of Directors expresses its appreciation for sincere efforts made by employees of your Company at all levels during 2012-13 and their co-operation in maintaining cordial relations.

Your directors believe and affirm the importance of developing of human resources, which is valuable and key in achieving all round improvement and growth.

The information required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, forms part of this Report.

DEPOSITS

As on 31st March, 2013, there are unclaimed deposits of Rs. 1.50 lacs.

CORPORATE GOVERNANCE

Your Company has complied with requirements of Clause 49 of Listing Agreement and followed practice of obtaining disclosures from directors and senior management personnel relating to any material financial and commercial transactions where they have any personal interest with a potential conflict of interest with the Company at large. Your Company recognizes importance of good Corporate Governance as a step for building stakeholders'' confidence, improving investor protection and enhancing long-term enterprise value.

A detailed report on Corporate Governance is annexed.

DIRECTORS

Mrs Ramni Nirula, Mr G N Bajpai, Mr N Misra and Mr J Balakrishnan are retiring by rotation and offer themselves for reappointment.

Mr. A K Chaudhri retired by rotation in last annual general meeting. Your directors place on record their warm appreciation for the contribution made by him in progress and growth of the Company.

Mr R S Thakur has been appointed as an additional director on the Board of the Company with effect from 30th January, 2013. He will hold office up to the date of ensuing Annual General Meeting. Your Directors recommend his appointment at the forthcoming Annual General Meeting in respect of which notice under Section 257 of the Companies Act, 1956 has been received.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to requirements under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed that:

(i) the applicable accounting standards have been followed in preparation of annual accounts for financial year ended 31st March, 2013 and proper explanations have been furnished relating to material departures;

(ii) the accounting policies have been selected and applied consistently and reasonably and prudent judgments and estimates have been made so as to give a true and fair view of state of affairs of the Company at end of financial year and of profit of the Company for year under review;

(iii) the proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956 for safeguarding assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the annual accounts for financial year ended 31st March, 2013 have been prepared on a going concern basis.

CEO / CFO CERTIFICATION

The Managing Director and Chief Financial Officer of the Company submitted a certificate to Board of Directors as required under Clause 49 of Listing Agreement for the year ended 31st March, 2013.

ADDITIONAL DISCLOSURES

In line with requirements of Listing Agreements and Accounting Standards issued by the Institute of Chartered Accountants of India, your Company made additional disclosures in respect of Consolidated Financial Statements, Related Party Transactions and Segmental Reporting.

AUDITORS

The auditors, M/s. Price Waterhouse, Chartered Accountants, retire at conclusion of forthcoming Annual General Meeting and being eligible, have offered themselves for re-appointment.

COST AUDITORS

During the year, Board appointed M/s. Guha, Ghosh, Kar & Associates, Cost Accountants, to conduct cost audit of the Company. The Company filed application with Central Government for financial year 2012-13 for appointment of Cost Auditor and the approval is deemed to have been received.

ENERGY CONSERVATION

As required under Section 217(1 )(e) of the Companies Act, 1956, details regarding conservation of energy, technology absorption and foreign exchange earning and outgo are given in the Annexure attached hereto and form part of this Report.

CORPORATE SOCIAL RESPONSIBILITY

Your Company has always been committed to its'' responsibility to the society and accordingly has accorded very high priority and commitment towards discharge of the same.

USSIL was awarded TLS 8001-2010 Certificate for having achieved requirements of Thai Corporate Social Responsibility by Ministry of Labour, Royal Thai Government.

A detailed report on initiatives in this regard is attached and forms part of this report.

APPRECIATION

Your directors place on record their appreciation for valuable co-operation and support of customers, suppliers, contractors, shareholders, investors, government authorities, financial institutions, banks, partners and collaborators.

On behalf of the Board of Directors

Kolkata P JHAWAR

9th May 2013 Chairman


Mar 31, 2012

The Board of Directors of your Company takes pleasure in presenting 26th Annual Report and audited accounts of your Company for the financial year ended 31st March, 2012.

(Rs. in Cr.)

Financial

31 March, 31 March, 31 March, 31 March, 2012 2011 2012 2011

Gross Sales including inter company/division sales and excise duty 3920.16 3475.71 4932.00 4406.66

Less: Excise Duty 243.87 215.53 253.92 221.83

Less : Intercompany/ division sales 839.40 735.47 1317.26 1140.24

Net Sales excluding excise duty and inter company/ division sales 2836.89 2524.71 3360.82 3044.59

Other Income 42.64 48.81 63.94 43.02

Net Sales and Other Income 2879.53 2573.52 3424.76 3087.61

Profit Before Depreciation & Tax 153.95 321.79 234.11 405.03

Depreciation 197.76 176.49 222.71 200.96

Profit Before Tax (-)43.81 145.30 11.40 204.07

Tax expenses (including deferred tax) (-)11.04 45.77 4.78 64.04

Profit After Tax (-)32.77 99.53 6.62 140.03

Minority Interest (-)3.01 (-)3.00

Profit after Taxation and Minority interest 3.61 137.03

Profit Brought Forward from Previous Year 55.44 41.11 263.86 212.14 Appropriations are made as under:

-General Reserve 50.00 50.01 Transfer to Capital Redemption Reserve

-Proposed Dividend on Equity Shares and tax thereon 35.20 0.09 35.30

-Balance Carried Forward to next year 22.67 55.44 267.38 263.86

Review of Operations

During the financial year 2011-12, the Company has faced challenges of high cost of inputs which could not be passed on to customers due to difficult business environment. In addition, Usha Siam Steel Industries Public Company Limited, a subsidiary of the Company remained out of operation for sizeable part in second half of year due to unprecedented floods in Thailand.

As a result, the Company's operating profit reduced to Rs.497.76 Crs. on consolidated basis and Rs.408.80 Crs on standalone basis from Rs.595.03 Crs and Rs.504.05 Crs respectively. The impact on profit before and after tax was even more severe. On consolidated basis, the Company could achieve profit after tax and minority interest of Rs.3.61 Crs. against Rs.137.03 Crs. in previous year. On standalone basis, there was loss after tax of Rs.32.77 Crs against profit after tax of Rs.99.53 Crs. in the previous year.

The turnover, however, increased to Rs.3360.82 Crs on consolidated basis and Rs.2836.89 Crs on standalone basis during the year against Rs.3044.59 Crs and Rs.2524.71 Crs respectively in the previous year.

Dividend

Under the circumstances, the Board of Directors express their inability to recommend payment of any dividend to shareholders for the year ended 31st March, 2012.

Projects

The capex plans undertaken by the Company to further perpetuate the advantage of cost competiveness are under various stages of implementation and are expected to be commissioned in phases over FY 2012-13 and 2013-14. The projects under implementation include pelletisation plant, coke oven, 2 DRI plants and Waste Heat based 65 MW Captive Power plants and other related projects. Upon completion, these projects would significantly strengthen cost base, which in turn would enhance profitability and competitiveness.

Business Outlook

The business conditions continue to remain sub-optimal amidst global and domestic challenges. While in inflationary economy, costs may rise further, uncertain business environment (which disturbs chain of economic activities) reduces ability to resist against such adverse pressures. However, the Company believes that with the hope of Government taking suitable initiatives to restore confidence and environment conducive for growth, the inherent advantages of business model, would enable the Company to improve its performance in FY 12-13 and subsequent years.

Subsidiaries

The international subsidiaries provide significant synergy and support to the Company's business and performance. All the operating subsidiaries of the Company have continued to perform reasonably well during the year under review.

The facilities of Usha Siam Steel Industries Public Company Limited [USSIL], a key subsidiary of the Company became in-operational due to unprecedented floods in Thailand in October'11 which inundated all major industrial areas of Thailand for over 2 months. The Navanakorn Industrial Area, where USSIL's facilities are located, had water accumulation of more than 6 ft. The industrial activities and other operations suffered for over 4 months. After receding of water, the restoration of normalcy in industrial activities is still under way in other parts, USSIL could start partial operations in February'12. Full level of activities are expected to be resumed by second quarter of FY 12-13. The insurance policy taken by USSIL covers consequential losses to assets and profits out of flood and other perils.

The Statement under Section 212 of the Companies Act, 1956 in respect of subsidiaries of the Company is given separately.

Joint Ventures

All the key joint ventures formed by the Company namely, Pengg Usha Martin Wires Pvt. Ltd., Gustav Wolf Specialty Cords Ltd. and Dove Airlines Pvt. Ltd., have done reasonably well in the year under review.

TPM & Quality

The Company attaches high importance to quality and TPM in all its operations for achieving tangible and intangible benefits to ensure operational excellence.

Steel Division and Wire Ropes & Specialty Products Division continue to have certification for its quality management systems being in accordance with ISO 9001 2000 from BVQI.

Both Steel Division & Wire Ropes and Specialty Products Division had received consistency awards for Total Productive Maintenance from JIPM.

Environment

All manufacturing plants have a focus on workplace health and safety.

Steel Division and Wire Ropes & Specialty Products Division continue to enjoy Certification under ISO 14001 Environment Management Systems (EMS) Standards from Det Norseke Veritas (DNV), of U.K. The effectiveness of these systems is evident from reduced oil and water consumption, reuse of waste oils and water, utilization of iron containing wastes and improved green cover in steel plant site.

Wire Rope & Specialty Products Division has been achieving significant improvements in effluent treatment plant to eliminate sludge carry over by incorporation of filter press, the output of which is being used for non critical applications, and continues to target zero discharge condition. This Division has also reduced air pollution by converting from oil to LPG and eliminating emission of un-burnt fuels in atmosphere.

Human Resources

The Board of Directors express their appreciation for sincere efforts made by employees of your Company at all levels during 2011-12 and their co-operation in maintaining cordial relations.

Your directors believe and affirm importance of development of human resources, which is most valuable and key element in bringing all round improvement and achieving growth of business.

USSIL, subsidiary of the Company, was awarded 'Outstanding Establishment on Labour Relation & Welfare' by Ministry of Labour, Royal Thai Government for the years 2008, 2009, 2010 and 2011.

The information required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, forms part of this Report.

Deposits

As on 31st March, 2012, there are unclaimed deposits of Rs.0.04 Crs.

Corporate Governance

Your Company has complied with requirements of Clause 49 of Listing Agreement and followed practice of getting disclosures from directors and senior management personnel relating to any material financial and commercial transactions where they have any personal interest with a potential conflict of interest with the Company at large. Your Company recognizes importance of good Corporate Governance as a step for building stakeholders' confidence, improving investor protection and enhancing long-term enterprise value.

A detailed report on Corporate Governance is annexed.

Directors

Mr. B K Jhawar, Mr Brij K Jhawar, Mr P K Jain and Mr A K Chaudhri are retiring by rotation.

Mr. A K Basu retired by rotation in last annual general meeting. Your directors place on record their warm appreciation for contribution made by him in progress and growth of the Company, During the year, Dr P Bhattacharya, Jt Managing Director retired from the services of the Company on attaining the age of superannuation. Your directors place on record their warm appreciation for contribution made by him in progress and growth of the Company, With effect from 1st February, 2012, Dr. Vijay Sharma and Mr. P K Jain, Executive Directors were designated as Jt. Managing Director [Steel Business] and Jt. Managing Director [Wire & Wire Ropes Business] respectively.

Directors' Responsibility Statement

Pursuant to requirements under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed that:

(i) the applicable accounting standards have been followed in preparation of annual accounts for financial year ended 31st March, 2012 and proper explanations have been furnished relating to material departures ;

(ii) the accounting policies have been selected and applied consistently and reasonably except to the extent of change in Accounting Policy mentioned hereinafter, and prudent judgments and estimates have been made so as to give a true and fair view of state of affairs of the Company at end of financial year and of profit of the Company for year under review ;

(iii) the proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956 for safeguarding assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the annual accounts for financial year ended 31st March, 2012 have been prepared on a going concern basis.

Accounting Policy

During the year, there has been a sharp depreciation in value of INR against US $ and other global currencies. Recognizing severity of the impact, Ministry of Corporate Affairs has amended AS-11, allowing an option to corporate to account for change in value of long term loans to respective fixed assets and depreciate over life of such assets if the loan is for acquisition of fixed assets, and in case of other loans, to Foreign Currency Monetary Item Translation Difference Account and amortize over balance period of liability. The Company has decided to exercise this option and accordingly there has been a change in Accounting Policy,

CEO / CFO Certification

The Managing Director and Chief Financial Officer of the Company submitted a certificate to Board of Directors as required under Clause 49 of Listing Agreement for the year ended 31st March, 2012.

Additional Disclosures

In line with requirements of Listing Agreements and Accounting Standards issued by the Institute of Chartered Accountants of India, your Company made additional disclosures in respect of Consolidated Financial Statements, Related Party Transactions and Segmental Reporting.

Auditors

The auditors, M/s. Price Waterhouse, Chartered Accountants, retire at conclusion of forthcoming Annual General Meeting and being eligible, have offered themselves for re- appointment.

Your directors invite your attention to note 41 to the accounts, referred to by Auditors in para 4 of their report. These notes are self explanatory and along with explanations given hereinabove under respective heads, provide required clarifications on references made by Auditors.

Cost Auditors

During the year, Board appointed M/s. Guha, Ghosh, Kar & Associates, Cost Accountants, to conduct cost audit of the Company. The Company filed application with Central Government for financial year 2011-12 for appointment of Cost Auditor and the approval is deemed to have been received.

Energy Conservation

As required under Section 217(1)(e) of the Companies Act, 1956, details regarding conservation of energy, technology absorption and foreign exchange earning and outgo are given in the Annexure attached hereto and form part of this Report.

Corporate Social Responsibility

Your Company has always been alive to its' responsibility to the society and accordingly been giving very high priority and commitment towards discharge of the same.

USSIL was awarded TLS 8001-2010 Certificate for having achieved requirements of Thai Corporate Social Responsibility by Ministry of Labour, Royal Thai Government.

A detailed report on various initiatives in this regard is attached and forms part of this Report.

Appreciation

Your directors place on record their appreciation for valuable co-operation and support of customers, suppliers, contractors, shareholders, investors, government authorities, financial institutions, banks, partners and collaborators.

On behalf of the Board of Directors

Kolkata P Jhawar

10th May 2012 Chairman


Mar 31, 2011

The Board of Directors of your Company takes pleasure in presenting 25th Annual Report and audited accounts of your Company for the financial year ended 31st March, 2011.

Financial Results

Stand Alone Consolidated

31 March, 31 March, 31 March, 31 March,

2011 2010 2011 2010

Gross Sales including inter company/division sales and excise duty 3477.70 2553.77 4389.35 3604.32

Less: Excise Duty 215.53 109.64 221.83 115.92

Less : Inter company/ division sales 735.47 593.74 1120.95 973.99

Net Sales excluding excise duty and inter company/division sales 2526.70 1850.39 3046.57 2514.41

Other Income 27.28 20.16 20.58 25.51

Net Sales and Other Income 2553.98 1870.55 3067.15 2539.92

Profit Before Depreciation & Tax 321.79 246.46 405.03 369.51

Depreciation 176.49 107.25 200.96 129.47

Profit Before Tax 145.30 139.21 204.07 240.04

Tax expenses (including deferred tax) 45.77 47.00 64.04 68.52

Profit After Tax 99.53 92.21 140.03 171.52

Minority Interest - - (3.00) (2.90)

Profit after Taxation and Minority interest - - 137.03 168.62

Profit Brought Forward from Previous Year 41.12 34.36 212.14 132.08 Appropriations are made as under:

-General Reserve 50.00 50.00 50.01 50.00

-Transfer to Capital Redemption Reserve - - - 3.00

-Proposed Dividend on Equity Shares and tax thereon 35.21 35.45 35.30 35.55

-Balance Carried Forward to next year 55.44 41.12 263.86 212.14

Dividend

The Board of Directors recommends a dividend, Re 1 per share (100%) on the equity shares of the Company for year ended 31st March 2011, amounting to Rs 35.21 cr. including dividend tax, surcharge and cess.

Review of Operations

During 2010-11, your Company recorded a growth of 36.6% by achieving net turnover of Rs. 2526.70 cr. as against Rs. 1850.39 cr. in previous year. Gross profit achieved during the year was also higher by 38.0% at Rs. 496.02 cr. against Rs. 359.49 cr. in the previous year. The gross sales before adjustment of inter divisional sales were Rs. 3477.70 cr., which is higher by 36.2% over that in previous year.

The Company achieved profit before tax of Rs. 145.30 cr. and net profit of Rs. 99.53 cr. as against Rs. 139.21 cr. and Rs.92.21 cr. in 2009-10, recording increase of 4.4% and 7.9% respectively.

The collective turnover of subsidiaries (without inter- company/division sales) was however lower by 13.2% at Rs. 911.64 cr. against that in previous year of Rs. 1050.55 cr. in previous year.

At consolidated level, net turnover (net of excise duty and inter-company/division sales) stood at Rs. 3046.57 cr. against Rs. 2514.41 cr. in 2009-10. Consolidated gross profit increased by 18.6% to Rs. 587.31 cr. However, profit before tax and profit after tax decreased by 15.0% and 18.4% to Rs. 204.07 cr. and Rs. 140.03 cr. respectively.

Projects

The capex plans undertaken by the Company for strengthening its advantage of cost competitiveness, are progressing satisfactorily and are expected to be commissioned in phases over FY 2011-12 and 2012-13. The projects under implementation include setting up of captive facilities namely pellet plant, coke oven plant, additional DRI and power plants and balancing facilities in Steel and Wire & Wire Ropes Divisions.

Business Outlook

While domestic economic conditions have restored to an extent from down turn and global economy is also showing signs of possible recovery, higher input prices and rising inflation, coupled with volatility in prices of finished goods due to external competitive pressures, may have impact on profitability in the sector and segments the Company operates. However with the advantage of reasonably higher level of integration with mineral resources and range of value added products, your directors are confident of the Company performing relatively better in near future.

Subsidiaries

All the operating subsidiaries of the Company have continued to perform well during the year under review. The international subsidiaries provide significant synergy and support to the Companys business and performance.

Usha Martin International Ltd. and Usha Martin Singapore Pte Ltd. wholly owned subsidiaries of the Company have given interim dividends of Rs. 10.57 cr. and Rs. 3.52 cr. respectively during the year under review. Brunton Wolf Wire Ropes FZCO, the Joint Venture of the Company, has given a dividend of Rs. 2.41 cr. during the year under review. U M Cables Ltd. another wholly owned subsidiary of the Company, has also paid dividend of Rs. 0.58 cr. on its outstanding preference shares allotted to and entirely held by the Company.

The Statement under Section 212 of the Companies Act, 1956 in respect of subsidiaries of the Company is annexed to this Report.

Joint Ventures

All the key joint ventures formed by the Company namely, Pengg Usha Martin Wires Pvt. Ltd., Gustav Wolf Speciality Cords Ltd. and Dove Airlines Pvt. Ltd., have done reasonably well in the year under review.

TPM & Quality

After getting TPM Excellence Award, Wire Ropes and Speciality Products Division received award for Excellence in Consistent TPM Commitment, from the Japan Institute of Plant Maintenance [JIPM] during 2009-10. Now Wire Ropes and Speciality Products Division plan to go on for Deming Award.

Steel Division of the Company, has already received Excellence and Consistency awards for total productive maintenance from JIPM.

Steel Division and Wire Ropes & Speciality Products Division continue to have certification for its quality management system being in accordance with ISO 9001 2000 from BVQI.

The operational excellence recognised by these awards and quality management systems have resulted in tangible improvement in quality, cost, delivery and safety, besides intangible benefits like motivation and empowerment amongst grass root levels.

Environment

All manufacturing plants of your Company are running in an eco-friendly manner and have a focus on workplace health and safety.

Steel Division and Speciality Products Divisions continue to enjoy Certification under ISO 14001 Environment Management Systems (EMS) Standards from Det Norseke Veritas (DNV), of U.K. The effectiveness of these systems is evident from reduced oil and water consumption, reuse of waste oils and water, utilization of iron containing wastes and improved green cover in steel plant site.

Wire Rope & Speciality Products Division has been achieving significant improvements in effluent treatment plant to eliminate sludge carry over by incorporation of filter press, the output of which is being used for non critical applications and continues to target zero discharge condition. This Division has also reduced air pollution by converting from oil to LPG and eliminating emission of unburnt fuels in atmosphere.

Human Resources

The Board of Directors expresses its appreciation for sincere efforts made by employees of your Company at all levels during 2010-11 and their co-operation in maintaining cordial relations.

Your directors believe and affirm importance of development of human resources, which is most valuable and key element in bringing all round improvement and achieving growth of business.

The information required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, forms part of this Report.

Deposits

As on 31st March, 2011, there are unclaimed deposits of Rs. 0.08 cr.

Corporate Governance

Your Company has complied with requirements of Clause 49 of Listing Agreement and followed practice of getting disclosures from directors and senior management personnel relating to any material financial and commercial transactions where they have any personal interest with a potential conflict with interest of the Company at large. Your Company recognizes importance of good Corporate Governance as step for building stakeholders confidence, improving investor protection and enhancing long-term enterprise value.

A detailed report on Corporate Governance is annexed.

Directors

Mr. P Jhawar, Mr. A K Basu, Mr. S Singhal and Dr. Vijay Sharma are retiring by rotation.

Mr. N J Jhaveri retired by rotation in last annual general meeting. Your directors place on record their warm appreciation for contribution made by him in progress and growth of the Company.

During the year under review, Mr. Jitender Balakrishnan was inducted as Director in Board of Directors of the Company. The Board appointed him as Chairman of the Audit Committee, filling up vacancy caused by retirement of Mr. N J Jhaveri.

Subsequent to resolution passed by the shareholders in Annual General Meeting held on 27th July, 2010, for payment of commission to Mr. Prashant Jhawar @ 1.5% of net profits of the Company for each of five financial years commencing from 1st April, 2010, approval from Central Government has since been received.

Directors Responsibility Statement

Pursuant to requirements under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed that:

(i) the applicable accounting standards have been followed in preparation of annual accounts for financial year ended 31st March, 2011 and proper explanations have been furnished relating to material departures;

(ii) the accounting policies have been selected and applied consistently and reasonably and prudent judgments and estimates have been made so as to give a true and fair view of state of affairs of the Company at end of financial year and of profit of the Company for year under review;

(iii) the proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956 for safeguarding assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the annual accounts for financial year ended 31st March, 2011 have been prepared on a going concern basis.

CEO / CFO Certification

The Managing Director and Chief Financial Officer of the Company submitted a certificate to Board of Directors as required under Clause 49 of Listing Agreement for the year ended 31st March, 2011.

Additional Disclosures

In line with requirements of Listing Agreements and Accounting Standards issued by the Institute of Chartered Accountants of India, your Company made additional disclosures in respect of Consolidated Financial Statements, Related Party Transactions and Segmental Reporting.

Auditors

The auditors, M/s. Price Waterhouse, Chartered Accountants, retire at conclusion of forthcoming Annual General Meeting and being eligible, have offered themselves for re- appointment.

Cost Auditors

During the year, Board appointed M/s. Guha, Ghosh, Kar & Associates, Cost Accountants, to conduct cost audit of the Company. The Company has already received approval from the Central Government for financial year 2010-11.

Energy Conservation

As required under Section 217(1)(e) of the Companies Act, 1956, details regarding conservation of energy, technology absorption and foreign exchange earning and outgo are given in the annexure attached hereto and form part of this Report.

Corporate Social Responsibility

Your Company has always been aware about its responsibility to the society and accordingly been giving very high priority and commitment towards discharge of the same.

A detailed report on various initiatives in this regard is attached and forms part of this report.

Appreciation

Your directors place on record their appreciation for valuable co-operation and support of customers, suppliers, contractors, shareholders, investors, government authorities, financial institutions, banks, partners and collaborators.

On behalf of the Board of Directors

Kolkata P Jhawar

11th May 2011 Chairman

 
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