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Notes to Accounts of Usha Martin Ltd.

Mar 31, 2015

(a) 3,58,33,550 (31st March, 2014 : 4,40,93,175) Equity Shares are represented by Global Depository Receipts (GDRs) out of above paid up Equity Shares.

(b) Rights, preference and restrictions attached to shares issued:

The Company has only one class of equity shares having a par value of Re.1/- per share. Each shareholder is eligible for one vote per share held (except in case of GDRs). The dividend if proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

2 B. Equity Warrant application money pending allotment

At the Extraordinary General Meeting held on 16th March, 2015, the consent of the Company was accorded to the issuance of 34,285,600 Equity Warrants, each convertible into one Equity Shares of Re. 1/- each at the option of holders within a period of eighteen months from the date of allotment, at a price ("Consideration") of Rs. 35/- (which includes premium of Rs. 34/- per share), on preferential allotment basis to promoter/promoters' group and their relatives and associates in keeping with related SEBI Regulations. As per the terms of the issue, 25% of the Consideration is payable by the applicants before allotment of Equity Warrants and the balance 75% of consideration will be payable before the conversion of such Warrants into Equity Shares. In case the conversion option is not exercised within the stipulated time, the amount paid at the time of application (being 25% of the Consideration) shall be forfeited.

Nature of Security and terms of repayment for secured borrowings : Nature of Security

All Term Loans from Financial Institution and Banks are secured by way of Joint Equitable Mortgage by deposit of title deeds of certain immovable properties and hypothecation over movable assets of the Company both present and future subject to prior charges of the Company's Bankers on specified movable assets for Working Capital requirements.

Secured Loans - Terms of Repayment

(a) Rupee term loan from a Financial Institution amounting to Rs.16,000 (31st March, 2014 : Rs. 19,000) is repayable in six quarterly installments from 20th June, 2016 to 20th September, 2017. Interest is payable on monthly basis at Long-term minimum lending rate plus 1.85% p.a.

(b) Rupee term loan from a Financial Institution amounting to Rs.18,000 (31st March, 2014 : Rs. 19,000) is repayable in ten quarterly installments from 20th June, 2016 to 20th September, 2018. Interest is payable on monthly basis at Long-term minimum lending rate plus 1.85% p.a.

(c) Rupee term loan from a Bank amounting to Rs. 3,200 (31st March, 2014 : Rs. 4,800) is repayable in seven quarterly installments from 29th April, 2016 to 29th October, 2017. Interest is payable on monthly basis at Base rate of the Bank plus 1.75% p.a.

(d) Rupee term loan from a Bank amounting to Rs. 8,000 (31st March, 2014 : Rs. 14,000) is repayable in two quarterly installments from 30th June, 2016 to 30th September, 2016. Interest is payable on monthly basis at Base rate of the Bank plus 1.55% p.a.

(e) Rupee term loan from a Bank amounting to Rs. 23,750 (31st March, 2014 : Rs. 25,000) is repayable in twenty four quarterly installments from 30th June, 2016 to 31st March, 2022. Interest is payable on monthly basis at Base rate of the Bank plus 2.00% p.a.

(f) Rupee term loan from a Bank amounting to Rs. 23,750 (31st March, 2014 : Rs. 25,000) is repayable in twenty four quarterly installments from 29th June, 2016 to 29th March, 2022. Interest is payable on monthly basis at

Base rate of the Bank plus 2.50% p.a.

(g) Rupee term loan from a Bank amounting to Rs. 5,500 (31st March, 2014 : Rs. 8,000) is repayable in five quarterly installments from 31st May, 2016 to 31st May, 2017. Interest is payable on monthly basis at Base rate of the Bank plus 1.55% p.a.

(h) Rupee term loan from a Bank amounting to Rs. 55,000 (31st March, 2014 : Rs. 35,000) is repayable in thirty-one quarterly installments from 30th June, 2016 to 31st December, 2023. Interest is payable on monthly basis at Base rate of the Bank plus 2.50% p.a.

(i) Rupee term loan from a Bank amounting to Rs.14,812 (31st March, 2014 : Rs. 15,000) is repayable in twenty seven quarterly installments from 30th June, 2016 to 31st December, 2022. Interest is payable on monthly basis at Base rate of the Bank plus 2.00% p.a.

(j) Rupee term loan from a Bank amounting to Rs. 14,625 (31st March, 2014 : Rs. 15,000) is repayable in twenty six quarterly installments from 30th June, 2016 to 30th September, 2022. Interest is payable on monthly basis at Base rate of the Bank plus 2.50% p.a.

(k) Rupee term loan from a Bank amounting to Rs. 14,000 (31st March, 2014 : Rs.Nil) is repayable in thirty quarterly installments from 30th April, 2016 to 31st July, 2023. Interest is payable on monthly basis at Base rate of the Bank plus 1.50% p.a.

(l) Foreign Currency term loan from a Bank amounting to Rs. 62,500 (31st March, 2014 : Rs.74,894) is repayable in eight equal quarterly installments from 29th April, 2016 to 31st January, 2018. Interest is payable on quarterly basis at three months USD LIBOR plus 2.85% p.a.

(m) Outstanding balances of loans as indicated in (a) to (l) above are exclusive of current maturities of such loans as disclosed in Note 11.

Unsecured Loan - terms of repayment

(a) Rupee term loans from a Body Corporate amounting to Rs.890 is repayable in nineteen installments from 1st April, 2016 to 1st January, 2020. Interest is payable on quarterly basis at 11.81% p.a. and is exclusive of current maturities of such loan as disclosed in Note 11

(a) The Company's ownership interest and other particulars relating to the Joint Venture Companies have been set out in Note 49.

(b) During the year the Company has purchased 60 Equity Shares of face value of Rs.10 each of Usha Marin Power and Resources Limited to make it a wholly owned subsidiary.

(c) During the year the Company has purchased 76,500 Equity Shares of face value of Rs.10 each of Gustav Wolf Speciality Cords Limited, an erstwhile Joint Venture Company to make it a wholly owned subsidiary.

3. Contingent Liabilities

As at As at 31st March, 31st March, 2015 2014

(a) Claims against the Company not acknowledged as debt

Disputed Tax and Duty for which the Company has preferred appeal before appropriate authorities.

Demand for Income Tax Matters 1,940 1,940

Demand for Sales Tax & Entry Tax # 6,063 3,232

Demand for Excise Duty and Service Tax # 6,583 6,498

Demand for Customs Duty 83 83

Outstanding Labour Disputes 59 48

Disputed Electricity duty rebate matters which is subjudice 552 551

Disputed Demand for Fuel Surcharge matter 1,637 1,637

The writ petition filed by the Company before the Hon'ble High Court of Jharkhand at Ranchi was dismissed by Learned Single Judge vide order dated 8th May 2015. Based on legal opinion obtained, the Company has a strong case and is in a process of filing Letters Patent Appeal (LPA) before the Appellate Jurisdiction of the Hon'ble High Court of Jharkhand at Ranchi to contest the matter.

Disputed Demand for Mining matter for which the Company has filed writ petition before The Hon'ble High 7,033 1,940

Court of Jharkhand at Ranchi.

# Out of the above, stay orders against demand for Sales Tax amounting to Rs. 237 (31st March, 2014 : Rs. 237) and demand for Excise Duty and Service Tax amounting to Rs. 6,404 (31st March, 2014 : Rs. 4,324) have been obtained by the Company.

4 (a). The Company had been allocated two Coal Blocks namely, Kathautia Coal Block and Lohari Coal Block in the State of Jharkhand for captive use. Pursuant to the Supreme Court order dated 24thSeptember, 2014 followed by promulgation of the Coal Mines (Special Provisions) Act, 2015 ( CMSP Act), the allocation of all Coal Blocks since 1993, including the aforesaid Coal Blocks allocated to the Company stands cancelled with effect from 24th September, 2014 in case of Lohari Coal Block, which was yet to commence mining operations and with effect from 1st April , 2015 in case of Kathautia Coal Block, which has been carrying out mining operations.

Thereafter, through the process of public auction as envisaged in the CMSP Act and in which the Company had also participated, the aforesaid Coal Blocks of the Company have been allocated to other successful bidders by the Central Government. Pursuant to conclusion of such auction, the Central Government has issued vesting orders for Kathautia and Lohari Coal Blocks transferring and vesting all the rights, title and interest of the Company in and over the Land and Mine Infrastructure of the said Coal Blocks to the successful bidders.

Upon de-allocation of aforesaid coal blocks, the Company has reclassified its related non-current assets in form of land, movable and immovable properties, advances etc. and presented the same in the Balance Sheet as follows:

Under the CMSP Act, the Company is entitled to receive compensation for its investment in the land with Interest @12% p.a. from the date of purchase/acquisition till the date of the execution of the vesting order and compensation for mine infrastructure as per the written down value reflected in the audited balance sheet of the Company for the previous financial year. Under the said Act, a successful bidder or allottee may negotiate with prior allottee, being the Company, to own or utilize movable properties of the latter used in coal mining operations on such terms and conditions as may be mutually agreed. Further in respect of advance payments made by the Company to the Jharkhand State Government for acquisition of lands for its coal mining projects, the Company also has an option of recovering it from Government.

The Nominated Authority, Ministry of Coal, Government of India has sanctioned an interim claim for the Company's Kathautia Coal Block against which the Company has filed a representation letter. In the meantime to expedite the process, the Company is also under negotiation with the successful bidder of Kathautia Coal Block for realization of compensation/ investments in the said mine.

Any profit or loss arising on aforesaid disposal/settlement, if any, shall be shown in the accounts, as and when the amount of compensation or refund is finally determined by the Government authorities or the amount of consideration is mutually agreed with the successful bidders as the case may be.

After taking into consideration the present development, progress of negotiation with successful bidder and recourse available to the Company for recovery of the investments from the concerned authorities/ parties on the basis of advice of legal counsel, Management is of the opinion that the realizable value of the aforesaid assets will not be less than their carrying values.

5 (a). The Company had decided to close down the Construction Steel Division at Agra and its subsequent disposal of Land, Building and Plant and Equipment. The written down value of such assets amounting to Rs.926 (31st March, 2014:Nil) has been disclosed under Other Current Assets as "Assets held for disposal".

Accordingly, the unutilized portion of Excise Duty and Service Tax amounting to Rs.746 (31st March, 2014:Nil) has been provided for the books.

@ Contribution towards Provident Fund for certain employees is made to the regulatory authorities. Such Provident Fund benefit is classified as Defined Contribution Scheme as the Company does not carry any further obligations, apart from the contribution made on a monthly basis which is recognised as expense in the Statement of Profit and Loss, as indicated above.

(b) Post Employment Defined Benefit Plans I. Gratuity (Funded)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Trust Funds managed by the Life Insurance Corporation of India (LIC) and other insurance companies make payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's eligible salary for specified number of days (ranging from fifteen days to one month) depending upon the tenure of service subject to a maximum limit of twenty months' salary. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note 2.12 (b) above, based upon which, the Company makes contributions to the Gratuity Funds.

II. Provident Fund

Provident Fund contributions in respect of employees [other than those covered in (a) above] are made to Trusts administered by the Company and such Trusts invest funds following a pattern of investments prescribed by the Government. Both the employer and the employees contribute to this Fund and such contribu- tions together with interest accumulated thereon are payable to employees at the time of their separation from the Company or retirement, whichever is earlier. The benefit vests immediately on rendering of services by the employee. The interest rate payable to the members of the Trusts is not lower than the rate of interest declared annually by the Government under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company. In terms of the Guidance on implementing Accounting Standard (AS) 15 on Employee Benefits issued by the Accounting Standards Board of the Institute of Chartered Accountants of India, a provident fund set up by the Company is treated as a defined benefit plan in view of the Company's obligation to meet interest shortfall, if any.

The Actuary has carried out actuarial valuation of plan's liabilities and interest rate guarantee obligations as at the balance sheet date using PUCM and Determin- istic Approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, there is no future anticipated shortfall with regard to interest rate obligation of the Company as at the balance sheet date. Further during the period, the Company's contribution of Rs. 613 (31st March, 2014 : Rs.663) to the Provident Fund Trust, has been expensed under "Contribution to Provident and Other Funds". Disclosures given hereunder are restricted to the information available as per the Actuary's report.

6. Exceptional items in the Statement of Profit and Loss comprise the following:

(a) Pursuant to the Order dated 24th September, 2014 issued by The Hon'ble Supreme Court of India for cancellation of Kathautia and Lohari Coal Blocks of Steel Division, allotted to the Company in earlier years, as well as imposition of additional levy of Rs. 295/- per metric ton of coal extracted from the date of extraction till 31st March 2015, the Company has made a provision of Rs. 8,373 (Previous Year ; Rs. Nil) during the year on prudent basis and without prejudice to its rights.

Further, during the year, the Company has paid Rs. 7,057 (Previous Year ; Rs. Nil) to an appropriate authority out of the aforesaid provision made up to 31st March, 2015.

(b) Write down of the carrying amount of certain assets and other adjustments of Rs. 1,643 (Previous Year ; Rs. Nil) pertaining to the Coal Blocks refer to in (a) above.

7. Segment Information for the year ended 31st March, 2015 A. primary Segment Reporting (by Business Segments)

Composition of Business Segments

Segments have been identified in accordance with the Accounting Standard on Segment Reporting (AS-17) prescribed under the Act. Details of products included in each of the above Segments are given below :

Steel : Steel Wire Rods, Rolled Products, Billets, Pig Iron and allied products.

Wire and Wire Ropes : Steel Wires, Strands, Wire Ropes, Cord, Bright Bar, related accessories, etc.

Others : Jelly Filled Telecommunication Cables, Wire Drawing and allied machineries, etc.

8. Lease Commitments

(a) Operating Lease Commitments

The Company has two non-cancellable operating lease agreements both having a tenure of fifteen years, in connection with establishment and operation of plants, by the lessor, for production of gaseous oxygen to cater to the Company's Steel Plant at Jamshedpur. One of such agreements became operative in 2001-02 (Lease A) and the other one has become operative in 2007-08 (Lease B). Both these lease agreements had been extended till 2026-27. The Company pays minimum lease rent and fixed, as well as, variable operating and maintenance charges for both the leases.

In respect of lease A, 30% of lease rent, fixed and variable operation and maintenance charges are escalated every quarter in the same proportion as increase in Wholesale Price Index published by the Reserve Bank of India in its bulletin (base period 1st August, 1999 ).

In respect of lease B, 70% of lease rents and operation and maintenance charges are escalated every quarter in the same proportion as increase in Wholesale Price Index published by the Reserve Bank of India in its bulletin ( base period 20th April, 2007)

(b) The Company has entered into cancellable operating lease arrangements for taking on lease gaseous oxygen plant, accommodation for office spaces, employees residential accommodation etc. Tenure of leases generally vary between 1 and 10 years. Terms of the lease include operating term for renewal, increase in rent in future periods and term of cancellation. Related lease rentals aggregating Rs. 636 (31st March, 2014 Rs. 600) have been debited to the Statement of Profit and Loss.

09. The remuneration payable to the Joint Managing Director of the Company aggregating Rs. 41 (Previous Year ; Rs. Nil) for the period from 1st February, 2015 to 31st March, 2015 has been approved by the Shareholders of the Company and being in excess of the limits specified in Schedule V (read with Section 197) to the Companies Act, 2013, the Company has filed an application for approval of the Central Government, which is pending. The Company however, has paid remuneration amounting to Rs. 36 for the said period to the Joint Managing Director as per the terms of the earlier appointment.

10. The previous year figures have been reclassified where considered necessary to conform to this year's classification.


Mar 31, 2014

1. Contingent Liabilities As 31st March, As at 31st March, 2014 2013

(a) Claims against the Company not acknowledged as debt

Disputed Tax and Duty for which the Company has preferred appeal before appropriate authorities.

Demand for Income Tax Matters 1,940 1,940

Demand for Sales Tax & Entry Tax # 3,232 1,977

Demand for Excise Duty and Service Tax # 6,498 6,493

Demand for Customs Duty 83 83

Outstanding Labour Disputes 48 44

Disputed Electricity duty rebate matters which is sub judice 551 528

Disputed Demand for Fuel Surcharge matter for which the Company has filed writ petition 1,637 - before The Hon''ble High Court of Jharkhand at Ranchi.

Disputed Demand for Mining matter for which the Company has filed writ petition before 1,940 - The Hon''ble High Court of Jharkhand at Ranchi.

# Out of the above, stay orders against demand for Sales Tax amounting to Rs.237 (31st March, 2013 : Rs. 744) and demand for Excise Duty and Service Tax amounting to Rs. 4,324 (31st March, 2013 : Rs. 2,606) have been obtained by the Company.

(b) Guarantees

Corporate Guarantee Given by the Company to secure the financial assistance/accommo- 15,056 12,878 dation extended to other Bodies Corporate_

(c) Bills discounted with Banks including against Letter of Credit 15,433 8,189

(d) In respect of the contingent liabilities mentioned in Note 23(a) above, pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any. In respect of matters mentioned in Note 23 (b) above, the cash outflows, if any, could generally occur during the validity period of the respective guarantees. The Company does not expect any reimbursements in respect of the above contingent liabilities.

(b) Post Employment Defined Benefit Plans

I. Gratuity (Funded)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Trust Funds managed by the Life Insurance Corporation of India (LIC) and other insurance companies make payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s eligible salary for specified number of days (ranging from fifteen days to one month) depending upon the tenure of service subject to a maximum limit of twenty months'' salary. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note 2.12 (b) above, based upon which, the Company makes contributions to the Gratuity Funds.

The expected return on plan assets is determined after taking into consideration composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets, the Company''s policy for plan asset management and other relevant factors.

II. Provident Fund

Provident Fund contributions in respect of employees [other than those covered in (a) above] are made to Trusts administered by the Company and such Trusts invest funds following a pattern of investments prescribed by the Government. Both the employer and the employees contribute to this Fund and such contributions together with interest accumulated thereon are payable to employees at the time of their separation from the Company or retirement, whichever is earlier. The benefit vests immediately on rendering of services by the employee. The interest rate pay- able to the members of the Trusts is not lower than the rate of interest declared annually by the Government under the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company. In terms of the Guidance on implementing Accounting Standard (AS) 15 on Employee Benefits issued by the Accounting Standards Board of the Institute of Chartered Accountants of India, a provident fund set up by the Company is treated as a defined benefit plan in view of the Company''s obligation to meet interest shortfall, if any.

The Actuary has carried out actuarial valuation of plan''s liabilities and interest rate guarantee obligations as at the balance sheet date using PUCM and Deterministic Approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, there is no future anticipated shortfall with regard to interest rate obligation of the Company as at the balance sheet date. Further during the year, the Company''s contribution of Rs. 663 (31st March, 2013 : Rs.528) to the Provident Fund Trust, has been expensed under "Contribution to Provident and Other Funds". Disclosures given hereunder are restricted to the information available as per the Actuary''s report.

2. Segment Information for the year ended 31st March, 2014

A. Primary Segment Reporting (by Business Segments)

Composition of Business Segments

Segments have been identified in accordance with the Accounting Standard on Segment Reporting (AS-17) prescribed under the Act.

Details of products included in each of the above Segments are given below :

Steel : Steel Wire Rods, Rolled Products, Billets, Pig Iron and allied products.

Wire and Wire Ropes : Steel Wires, Strands, Wire Ropes, Cord, Bright Bar, related accessories, etc.

Others : Jelly Filled Telecommunication Cables, Wire Drawing and allied machineries, etc.

3. Lease Commitments

(a) Operating Lease Commitments

The Company has two non-cancellable operating lease agreements both having a tenure of fifteen years, in connection with establishment and operation of plants, by the lessor, for production of gaseous oxygen to cater to the Company''s Steel Plant at Jamshedpur. One of such agreements became operative in 2001-02 (Lease A) and the other one has become operative in 2007-08 (Lease B). Both these lease agreements had been extended till 2026-27. The Company pays minimum lease rent and fixed, as well as, variable operating and maintenance charges for both the leases.

In respect of Lease A, 30% of lease rent, fixed and variable operation and maintenance charges are escalated every quarter in the same proportion as increase in Wholesale Price Index published by the Reserve Bank of India in its bulletin (base period 1st August, 1999).

In respect of Lease B, 70% of lease rents and operation and maintenance charges are escalated every quarter in the same proportion as increase in Wholesale Price Index published by the Reserve Bank of India in its bulletin (base period 20th April, 2007).

(b) The Company has entered into cancellable operating lease arrangements for taking on lease gaseous oxygen plant, accommodation for office spaces, employees residential accommodation etc. Tenure of leases generally vary between 1 and 10 years. Terms of the leases include operating term for renewal, increase in rent in future periods and term of cancellation. Related lease rentals aggregating Rs. 600 (31st March, 2013 Rs. 554) have been debited to the Statement of Profit and Loss.

4. The previous year figures have been reclassified where considered necessary to conform to this year''s classification.


Mar 31, 2013

1. General Information

Usha Martin Limited (the ''Company'') is a public limited company domiciled in India, incorporated under the provisions of the Companies Act, 1956 and is listed on two stock exchanges in India and its GDRs are listed on stock exchange in Luxembourg. The Company is engaged in the manufacturing of speciality steel and value added steel products. The Company caters to both domestic and international markets.

2. Segment Information for the year ended 31st March, 2013

A. Primary Segment Reporting (by Business Segments)

Composition of Business Segments

Segments have been identified in accordance with the Accounting Standard on Segment Reporting (AS-17) prescribed under the Act.

Details of products included in each of the above Segments are given below :

Steel : Steel Wire Rods, Rolled Products, Billets, Pig Iron and allied products.

Wire and Wire Ropes : Steel Wires, Strands, Wire Ropes, Cord, Bright Bar, related accessories, etc.

Others : Jelly Filled Telecommunication Cables, Wire Drawing and allied machineries, etc.

Change in Segment Composition :

Based on a review of product portfolio of various segments, related risks and returns, business developments etc., Wire Drawing and allied machinery products, hitherto included in ''Wire and Wire Ropes'' segment, have been identified with ''Others'' segment with effect from this year. Accordingly previous year figures relating to ''Wire and Wire Ropes'' and ''Others'' segments have been regrouped / rearranged to conform to this year''s presentation.

3. Lease Commitments

(a) Operating Lease Commitments

The Company has two non-cancellable operating lease agreements both having a tenure of fifteen years, in connection with establishment and operation of plants, by the lessor, for production of gaseous oxygen to cater to the Company''s Steel Plant at Jamshedpur. One of such agreements became operative in 2001-02 (Lease A) and the other one has become operative in 2007-08 (Lease B). During the year, both these agreements have been extended till 2026-27. The Company pays minimum lease rent and fixed, as well as, variable operating and maintenance charges for both the Leases.

In respect of Lease A, 30% of lease rent, fixed and variable operation and maintenance charges are escalated every quarter in the same proportion as increase in Wholesale Price Index published by the Reserve Bank of India in its bulletin (base period 1st August, 1999 ).

In respect of Lease B, 70% of lease rents and operation and maintenance charges are escalated every quarter in the same proportion as increase in Wholesale Price Index published by the Reserve Bank of India in its bulletin ( base period 20th April, 2007).

(b) The Company has entered into cancellable operating lease arrangements for taking on lease accommodation for office spaces, employees residential accommodation etc. Tenure of leases generally vary between 1 and 3 years. Terms of the lease include operating term for renewal, increase in rent in future periods and term of cancellation. Related lease rentals aggregating Rs. 554 (31st March, 2012 : Rs. 558) have been debited to the Statement of Profit and Loss.

4. During the year, the management has identified fraudulent encashment of four cheques aggregating Rs.9 from one of the bank accounts of the Company, which have since been fully recovered from the concerned bank upon lodgement of claim.

5. The previous year figures have been reclassified where considered necessary to conform to this year''s classification.


Mar 31, 2012

1. General Information

Usha Martin Limited (the 'Company') is a public limited company domiciled in India, incorporated under the provisions of the Companies Act, 1956 and is listed on two stock exchanges in India and its GDRs on one stock exchange in Luxembourg. The Company is engaged in the manufacturing of specialty steel and value added steel products. The Company caters to both domestic and international markets.

(a) 8,019,495 (31 March, 2011: 4,729,370) Equity Shares are represented by Global Depository Receipts (GDRs) out of above paid up Equity Shares.

(b) Rights, preference and restrictions attached to shares issued:

The Company has only one class of equity shares having a par value of Re.1 per share. Each shareholder is eligible for one vote per share held (except in case of GDRs). The dividend if proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Nature of Security and terms of repayment for secured borrowings : Nature of Security

All Term Loans from Financial Institution and Banks are secured by way of Joint Equitable Mortgage by deposit of title deeds of certain immovable properties and hypothecation over movable assets of the Company both present and future subject to prior charges of the Company's Bankers on specified movable assets for Working Capital requirements.

Terms of Repayment

(a) Rupee term loan from a Financial Institution amounting to Rs.25,000 (31st March, 2011:Rs. 25,000) is repayable in eighteen quarterly installments commencing from 20th June 2013 to 20th September 2017. Interest is payable on monthly basis at One Year Gsec plus 2.85% p.a.

(b) Rupee term loan from a Financial Institution amounting to Rs.20,000 (31st March, 2011:Rs. Nil) is repayable in eighteen quarterly installments commencing from 20th June 2014 to 20th September 2018. Interest is payable on monthly basis at One Year Gsec plus 3.25% p.a.

(c) Rupee term loan from a Bank amounting to Rs.10,000 (31st March, 2011 :Rs. 10,000) is repayable in twenty quarterly installments commencing from 1st April 2013 to 1st January 2018. Interest is payable on monthly basis at Base rate of the Bank plus 2% p.a.

(d) Rupee term loan from a Bank amounting to Rs. 8,000 (31st March, 2011:Rs. 9,600) is repayable in nineteen quarterly installments from 29th April 2013 to 29th October 2017. Interest is payable on monthly basis at Base rate of the Bank plus 1.75% p.a.

(e) Rupee term loan from a Bank amounting to Rs. 20,000 (31st March, 2011:Rs. 24,000) is repayable in eleven quarterly installments from 30th June 2013 to 31st December 2015. Interest is payable on monthly basis at Base rate of the Bank plus 2.15% p.a.

(f) Rupee term loan from a Bank amounting to Rs.20,000 (31st March, 2011:Rs. Nil) is repayable in twelve quarterly installments commencing from 31st December 2013 to 30th September 2016. Interest is payable on monthly basis at Base rate of the Bank plus 1.15% p.a.

(g) Rupee term loans from Banks aggregating to Rs. Nil (31st March, 2011 Rs. 10224) carrying interest at Base rate of the banks plus 2.25% p.a. have been prepaid during the year.

(h) Foreign Currency term loan from a Bank amounting to Rs. 63,588 (31st March, 2011:Rs. 11,138) is repayable in ten equal quarterly installments commencing from 30th October 2015 to 31st January 2018. Interest is payable on quarterly basis at three months USD LIBOR plus 2.85% p.a.

(i) Foreign Currency term loan from a Bank amounting to Rs. 12,717 (31st March, 2011 :Rs.20,048) is repayable in five equal quarterly installments from 16th May 2013 to 16th May 2014. Interest is payable on half yearly basis at six months JPY LIBOR plus 1.40% p.a.

(j) Foreign Currency term loan from a Bank amounting to Rs. 17,804 (31st March , 2011:Rs. 15,592) is repayable in five equal quarterly installments commencing from 16th August 2013 to 16th August 2014. Interest is payable on half yearly basis at six months JPY LIBOR plus 2% p.a.

(k) Foreign Currency term loan from a Bank amounting to Rs. Nil (31st March, 2011:Rs. 2,339) is repayable in two equal installments on 15th August, 2012 and 15th February, 2013 respectively. Interest is payable on half yearly basis at six months USD LIBOR plus 1.50% p.a.

(l) Foreign Currency term loan from a Bank amounting to Rs. Nil (31st March, 2011:Rs. 4,009) is repayable on 5th June, 2012 and 3rd July, 2012 respectively. Interest is payable on monthly basis at six months USD LIBOR plus 1.50% p.a.

(m) Outstanding balances of loans as indicated in (a) to (l) above are exclusive of current maturities of such loans as disclosed in Note 11.

2. Contingent Liabilities

As at 31st As at 31st March, 2012 March, 2011

A Claims against the Company not acknowledged as debt

Disputed Tax and Duty for which the Company has preferred appeal before appropriate authorities.

Demand for Income Tax Matters 1,940 1,940

Demand for Sales Tax 465 84

Demand for Excise Duty and Service Tax 5,812 4,433

Demand for Customs Duty 83 124

Outstanding Labour Disputes 31 34

Disputed Electricity duty rebate matters which is subjudice 504 -

B Guarantees

Corporate Guarantee given by the Company to secure the financial assistance/accommodation 6,779 6,851 extended to other Bodies Corporate

C Bills discounted with Banks including against Letter of Credit 12,682 11,034

@ Contribution towards Provident Fund for certain employees is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contribution made on a monthly basis and recognised as expense in the statement of Profit and Loss, indicated above.

(b) Post Employment Defined Benefit Plans

I. Gratuity (Funded)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Trust Funds managed by the Life Insurance Corporation of India (LIC) and other insurance companies make payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's eligible salary for specified number of days (ranging from fifteen days to one month) depending upon the tenure of service subject to a maximum limit of twenty months' salary. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note 2.13 (b) above, based upon which, the Company makes contributions to the Gratuity Funds.

II. Provident Fund

Provident Funds contributions in respect of employees [other than those covered in (a) above] are made to Trusts administered by the Company and such Trusts invest funds following a pattern of investments prescribed by the Government. Both the employer and employee contribute to this Fund and such contributions together with interest accumulated thereon are payable to employees at the time of their separation from the Company or retirement, whichever is earlier. The benefit vests immediately on rendering of services by the employee, The interest rate payable to the members of the Trusts is not lower than the rate of interest declared annually by the Government under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company. In terms of the Guidance on implementing Accounting Standard (AS) 15 on Employee Benefits issued by the Accounting Standards Board of the Institute of Chartered Accountants of India, a provident fund set up by the Company is treated as a defined benefit plan in view of the Company's obligation to meet interest shortfall, if any.

Unlike in earlier years, the Actuary has carried out actuarial valuation of plan's liabilities and interest rate guarantee obligations as at the balance sheet date using PUCM and Deterministic Approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, there is no future anticipated shortfall with regard to interest rate obligation of the Company as at the balance sheet date. Further during the year, the Company's contribution of Rs.412 (Previous year:Rs.333) to the Provident Fund Trust, has been expensed under "Contribution to Provident and Other Funds". Disclosures given hereunder are restricted to the information available as per the Actuary's report,

3. Lease Commitments

(a) Operating Lease Commitments

The Company has two non-cancellable operating lease agreements both having a tenure of fifteen years, in connection with establishment and operation of plants, by the lessor, for production of gaseous oxygen to cater to the Company's Steel Plant at Jamshedpur. One of such agreements became operative in 2001-02 (Lease A) and the other one has become operative in 2007-08 (Lease B). The Company pays minimum lease rent and fixed, as well as, variable operating and maintenance charges for both the Leases.

In respect of Lease A, 30% of lease rent, fixed and variable operation and maintenance charges will be escalated every quarter in the same proportion as increase in Wholesale Price Index published by the Reserve Bank of India in its bulletin (base period 1st August, 1999 ).

In respect of Lease B, 70% of lease rents and operation and maintenance charges will be escalated every quarter in the same proportion as increase in Wholesale Price Index published by the Reserve Bank of India in its bulletin ( base period 20th April, 2007)

(b) The Company has entered into cancellable operating leases and transactions for leasing of accommodation for office spaces, employees residential accommodation etc. Tenure of leases generally vary between 1 and 3 years. Terms of the lease include operating term for renewal, increase in rent in future periods and term of cancellation. Related lease rentals aggregating Rs.558 (Previous year Rs.393 ) have been debited to the Profit and Loss Account.

a - denotes Subsidiaries

b - denotes Loans outstanding as at 31st March, 2012

c - denotes amount due on account of accrued interest, management service charges and recovery of expenses outstanding as at 31st March, 2012

d - denotes maximum amount outstanding during the year ended 31st March, 2012 e - denotes no repayment schedule or repayment beyond seven years.

II. In view of voluminous data furnishing of particulars such as name, amount outstanding at the year end and maximum amount outstanding during the year in respect of loans and advances in the nature of loan given to employees for medical, furniture, housing, vehicle etc. with interest rate varying from 0 - 6 per cent and repayment terms varying from 1 - 10 years is not considered practicable. Aggregate amount of such advances and loans outstanding at the year end is Rs.124 [31st March 2011 ; Rs.132).

4. Provision for Dividend Tax is net of write back of excess provision Rs.Nil (Pervious Year : Rs.12) made in earlier year,

5. The financial statements for the year ended 31st March, 2011 had been prepared as per the then applicable, pre-revised Schedule-VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended 31st March, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to confirm to this year's classification.


Mar 31, 2011

1. Outstanding Capital Commitments are estimated at Rs. 4,392,989 (Net of advances ) (Previous Year Rs. 1,214,365)

2. a) According to the usual practice, Electricity Charges are being accounted for on the basis of bills received. Any supplementary bill arising out of revision in the rates will be accounted for as and when such bills are received.

b) Provision for Fuel Surcharge upto December, 2003 had been made as per interim order passed by the Honble High Court of Patna .

3. Research and Development Expenditure

For the year ended For the year ended 31st March, 2011 31st March, 2010

Revenue 7,428 5,001

Capital 927 1,022

4. There are Contingent Liabilities in respect of :

a) Bills discounted with Banks Rs.1,103,368 (Previous Year Rs.1,073,915) including against Letter of Credit Rs.589,536 (Previous Year Rs.329,942)

b) Bank Guarantees outstanding Rs.295,103 (Previous Year Rs.341,697)

c) Disputed Income Tax matters amounting to Rs.194,022 (Previous Year Rs.55,178 ) for which the Company has preferred appeal before appropriate authorities.

d) Demand for Sales Tax amounting to Rs.8,431 (Previous Year Rs.7,963) for earlier years not acknowledged as debts and in respect of which the Company has preferred appeals before appropriate authorities.

e) Demand for Excise Duty and Service Tax Rs.443,346 (Previous Year Rs.134,982) not acknowledged as debts and in respect of which the Company has preferred appeal before appropriate authorities.

f) Demand for Customs Duty Rs.12,439 (Previous year Rs.12,439 ) not acknowledged as debts and in respect of which the Company had preferred appeal before appropriate authorities.

g) Corporate Guarantees given by the Company to secure the financial assistance / accommodation extended to other Bodies Corporate amounting to Rs.685,107 (Previous Year Rs.659,318).

h) Claims against the Company not acknowledged as debts Rs.3,390 (Previous Year Rs.75,974).

5. Lease Commitments

a) Operating Lease Commitments

The Company has two non-cancelable operating lease agreements both having a tenure of fifteen years, in connection with establishment and operation of plants, by the lessor, for production of gaseous oxygen to cater to the Companys Steel Plant at Jamshedpur. One of such agreements became operative in 2001-02 (Lease A) and the other one has become operative in 2007-08 (Lease B). The Company pays minimum lease rent and fixed, as well as, variable operating and maintenance charges for both the Leases.

In respect of Lease A, 30% of lease rent, fixed and variable operation and maintenance charges will be escalated every quarter in the same proportion as increase in Wholesale Price Index published by the Reserve Bank of India in its bulletin (base period 1st August, 1999 ).

In respect of Lease B, 70% of lease rents and operation and maintenance charges will be escalated every quarter in the same proportion as increase in Wholesale Price Index published by the Reserve Bank of India in its bulletin (base period 20th April, 2007)

(b) The Company has entered into cancelable operating leases and transactions for leasing of accommodation for office spaces, employees residential accommodation etc. Tenure of leases generally vary between 1 and 3 years. Terms of the lease include operating term for renewal, increase in rent in future periods and term of cancellation. Related lease rentals aggregating Rs.39,312 (Previous year Rs.15,949 ) have been debited to the Profit and Loss Account.

$ As certified by the Management.

a. Including internal consumption 192,229 M.T. (Previous Year 175,423 M.T.)

b. Including internal consumption 16,006 M.T. (Previous Year 27,404 M.T.) ; excluding trial production Nil M.T. (Previous Year 48,049 M.T.)

c. Including internal consumption 503,410 M.T. (Previous Year 378,925 M.T. ) and purchase (net) 6,895 M.T. (Previous Year 27,749 M.T. ); excluding trial production Nil M.T. (Previous Year 77,100 M.T.)

d. Including internal consumption 312,286 M.T. (Previous Year 119,650 M.T. ) excluding trial run production 45,669 M.T. (Previous year Nil M.T.)

e. Including internal consumption 240,123 M.T. (Previous Year 147,303 M.T. ) ; excluding trial production Nil M.T. (Previous Year 39,283 M.T.)

f. Including internal consumption 99 M.T. ( Previous Year 2,371 M.T.)

g. Including internal consumption 3,100 M.T. (Previous Year 3,663 M.T. )

h. including internal consumption 7,447 M.T. (Previous Year 6,155 M.T.)

i. Including internal consumption 2,977 M.T.(Previous Year 1,070 M.T.) ; excluding trial production Nil M.T. (Previous Year 995 M.T.)

j. Including internal consumption 6 Nos. (Previous Year 3 Nos. ).

k. Including internal consumption Nil Sets. (Previous Year 2 Sets ).

l. Including internal consumption 16,277 Pcs. (Previous Year 61,029 Pcs. ).

m. Including internal consumption Nil Pcs. (Previous Year 5 Pcs. ).

n. Including internal consumption 2 Sets (Previous Year Nil set ).

6. Segment Information for the year ended 31st March, 2011

A. Primary Segment Reporting (by Business Segments)

I. Composition of Business Segments

Segments have been identified in accordance with the Accounting Standard on Segment Reporting (AS-17) prescribed under the Act.

Details of products included in each of the above Segments are given below : Steel : Steel Wire Rods, Rolled Products, Billets, Pig Iron and allied products.

Wire and Wire Ropes : Steel Wires, Strands, Wire Ropes, Cord, Bright Bar, related accessories including Wire Drawing and allied machines, etc.

Others : Jelly Filled Telecommunication Cables, etc.

II Inter Segment Transfer Pricing

Inter segment prices are normally negotiated amongst the segments with reference to the costs, market prices and business risks, within an overall optimisation objective for the Company.

Legends to classification :-

a - denotes Subsidiaries

b - denotes Loans outstanding as at 31st March, 2011

c - denotes amount due on account of accrued interest, management service charges and recovery of expenses outstanding as at 31st March, 2011 d - denotes maximum amount outstanding during the year ended 31st March, 2011

e - denotes no repayment schedule or repayment beyond seven years.

II. In view of voluminous data furnishing of particulars such as name, amount outstanding at the year end and maximum amount outstanding during the year in respect of loans and advances in the nature of loan given to employees for medical, furniture, housing, vehicle etc. with interest rate varying from 0 - 6 per cent and repayment terms varying from 1 - 10 years is not considered practicable. Aggregate amount of such advances and loans outstanding at the year end is Rs.13,249 (Previous year Rs.19,098).

7. Employee Benefits

(I) Post Employment Defined Contribution Plans

During the year an amount of Rs. 45,594 (Previous year Rs.38,539) has been recognised as expenditure towards Defined Contribution Plans of the Company.

(II) Post Employment Defined Benefit Plans

Gratuity (Funded)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Trust Funds managed by the Life Insurance Corporation of India ( LIC ) and other insurance companies make payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees eligible salary for specified number of days (ranging from fifteen days to one month) depending upon the tenure of service subject to a maximum limit of twenty months salary. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note 1 (j) (ii) above, based upon which, the Company makes contributions to the Gratuity Funds.

The estimate of future salary increases takes into account inflation, seniority, promotion and other relevant factors.

The expected return on plan assets is determined after taking into consideration composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets, the Companys policy for plan asset management and other relevant factors.

(i) Contributions towards provident funds are recognised as expense. Provident fund contributions in respect of employees are made to Trusts administered by the Company and such Trusts invest funds following a pattern of investments prescribed by the Government. The interest rate payable to the members of the Trusts is not lower than the rate of interest declared annually by the Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company. In terms of the Guidance on implementing Accounting Standard (AS) 15 on Employee Benefits issued by the Accounting Standards Board of the Institute of Chartered Accountants of India, a provident fund set up by the Company is treated as a defined benefit plan in view of the Companys obligation to meet interest shortfall, if any. However, there is no such interest shortfall at the year end which is required to be made good by the Company. The Actuary has expressed his inability to provide an actuarial valuation of the provident fund liability as at the year end in the absence of any guidance from the Actuarial Society of India. Accordingly, complete information required to be considered as per AS 15 in this regard are not available and the same could not be disclosed. During the year, the Company has contributed Rs. 35,720 ( Previous year Rs.25,397) to the Provident Fund.

8. Provision for Dividend Tax is net of write back of excess provision Rs.1,177 ( Previous year Rs. Nil ) made in earlier year.

9. Figures for the previous year have been regrouped/ rearranged wherever necessary to make them comparable with the current years figures.


Mar 31, 2010

1. Outstanding Capital Commitments are estimated at Rs.1,214,365 (Net of advances) (Previous Year Rs. 2,468,874)

2. There are Contingent Liabilities in respect of :

a) Bills discounted with Banks Rs.1,073,915 (Previous Year Rs.615,535) including against Letter of Credit Rs.329,942 (Previous year Rs. 571,527)

b) Bank Guarantees outstanding Rs. 341,697 (Previous Year Rs.197,287)

c) Disputed income tax matter amounting to Rs.55,178 for which the company has preferred appeal before appropriate authorities.

d) Demand for Sales Tax amounting to Rs. 7,963 (Previous Year Rs.2,374) for earlier years not acknowledged as debts and in respect of which the Company has preferred appeals before appropriate authorities.

e) Demand for Excise Duty and Service Tax Rs.134,982 (Previous Year Rs.40,979) not acknowledged as debts and in respect of which the Company has preferred appeal before appropriate authorities.

f) Demand for interest Rs. Nil (Previous Year Rs.11,434) for non-payment of Excise Duty on electricity raised by Bihar State Electricity Board not admitted and which is subjudice.

g) Demand for Customs Duty Rs. 12,439 (Previous year Rs.12,229) not acknowledged as debts and in respect of which the Company had preferred appeal before appropriate authorities.

h) Demand for Wealth Tax Rs.Nil (Previous Year Rs. 569).

i) Corporate Guarantees given by the Company to secure the financial assistance / accommodation extended to other Bodies Corporate amounting to Rs.659,318 (Previous Year Rs.947,907).

j) Claims against the Company not acknowledged as debts Rs. 75,974 (Previous Year Rs.51,122).

Footnotes :

i) The Investments in overseas subsidiaries have been accounted for at the exchange rate prevailing on the date of remittance/ advice.

ii) During the year, Brunton Shaw Americas Inc, (BSAI) a wholly owned subsidiary of the Company merged with Usha Martin Americas Inc (UMAI) another wholly owned subsidiary of the Company with effect from 1st April, 2009 and accordingly 3,300,000 shares held by the Company in BSAI were allotted to the Company in UMAI pursuant to the scheme of merger.

iii) In case of unquoted long term investments in Subsidiary Companies, diminution, if any, in the year-end carrying amount, worked out solely on the basis of their respective break-up values is considered to be temporary, in nature, having regard to long term strategic value, benefits arising out of continuing business relationships etc.

iv) The Companys ownership interest and other particulars relating to GWSCL, PUMWPL, CCLUMSSL, DAPL and BMPL, the Joint Venture Companies have been set out in Note 28 below.

v) During the year the Company has purchased 100,000 Equity Shares of face value of Rs.10 each of Bharat Minex Private Limited (BMPL), an erstwhile Joint Venture Company to make it a Wholly Owned Subsidiary.

vi) Transfer of 3,044,451 Ordinary Shares in UMICOR Africa (Proprietary) Limited in the name of the Company could not be processed as the said UMICOR have gone into liquidation and placed under final winding up vide Order dated 30th July, 2008 of the High Court of South Africa (Witwatersrand Local Division).

3. Segment Information for the year ended 31st March, 2010

A. Primary Segment Reporting (by Business Segments)

I. Composition of Business Segments

Segments have been identified in accordance with the Accounting Standard on Segment Reporting (AS-17) prescribed under the Act.

Details of products included in each of the above Segments are given below :

Steel : Steel Wire Rods, Rolled Products, Billets,

Pig Iron and allied products.

Wire and Wire Ropes : Steel Wires, Strands, Wire Ropes, Cord, Bright

Bar, related accessories including Wire

Drawing and allied machines, etc.

Others : Jelly Filled Telecommunication Cables, etc.

II Inter Segment Transfer Pricing

Inter segment prices are normally negotiated amongst the segments with reference to the costs, market prices and business risks, within an overall optimisation objective for the Company.

h) Contributions towards provident funds are recognised as expense. Provident fund contributions in respect of employees are made to Trusts administered by the Company and such Trusts invest funds following a pattern of investments prescribed by the Government. The interest rate payable to the members of the Trusts is not lower than the rate of interest declared annually by the Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company. In terms of the Guidance on implementing Accounting Standard (AS) 15 on Employee Benefits issued by the Accounting Standards Board of the Institute of Chartered Accountants of India, a provident fund set up by the Company is treated as a defined benefit plan in view of the Companys obligation to meet interest shortfall, if any. However, there is no such interest shortfall at the year end. The Actuary has expressed his inability to provide an actuarial valuation of the provident fund liability as at the year end in the absence of any guidance from the Actuarial Society of India. Accordingly, complete information required to be considered as per AS 15 in this regard are not available and the same could not be disclosed. During the year, the Company has contributed Rs. 25,397 (Previous year Rs.21,150) to the Provident Fund.

4. Figures for the previous year have been regrouped/ rearranged wherever necessary.

 
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