The Directors present their 54th Annual Report along with audited
 accounts of the Company for the year ended on March 31, 2007.
 
 The Turnover of the Company increased by Rs. 106.3 Crores to Rs. 542.8
 Crores earning the highest ever gross profit of Rs. 25.5 Crores (last
 year Rs. 1 9.6 Crores) and net profit of Rs. 14.3 Crores (last year Rs.
 10.4 Crores).
 
 Consolidated financial results of Usha International and its
 subsidiaries, The Jay Engineering Works Ltd., Shriram Fuel Injection
 Industries Ltd. and Avro Sales Pvt. Ltd., show net profits at Rs 18.29
 Crores. (last year Rs. 13.68 Crores)
 
 A sum of Rs. 143.4 Lacs is being transferred to General Reserve.
 
 The Directors have already paid Interim Dividend @ 1 25% on Equity
 Shares and have recommended further Dividend @ 100 % on Equity Shares.
 
 Fixed Deposits amounting to Rs. 33.13 Lacs pertaining to 92 depositors
 remained unclaimed at the close of the year; of these, deposits
 amounting to Rs. 10.38 Lacs have since been paid / renewed during the
 current financial year.
 
 Your Company also gained market share in its main product lines, i.e.
 Electric Fans and Sewing Machines in the domestic market.
 
 In order to harness the strengths / core skills of your Company, an
 internationally renowned Management Consultant has been engaged for
 crafting a strategic transformation programme for the Company.
 
 The information relating to Exports has been given in the Corporate
 Governance Report and the amount of foreign exchange earned / utilised
 during the year has been given in Notes to the Accounts which are
 attached herewith and form an integral part of this Report.
 
 Details of technology absorption as perform B are given in
 Annexure-l.
 
 Particulars of personnel required to be furnished under Section 21
 7(2A) of the Companies Act, 1 956 read with the Companies (Particulars
 of Employees) Rules, 1 975 are given in the statement annexed to this
 Report.
 
 The Central Government has granted exemption under Section 212(8) of
 the Companies Act, 1956 from attaching the documents of the
 subsidiaries as specified under Section 212(1) of the Companies Act,
 1956. Audited Consolidated Financial Statements of the Company and the
 Subsidiaries, prepared in accordance with the Accounting Standard - 21
 including the financial details of each subsidiary are attached
 herewith, which form part of the Annual Report / Accounts of the
 Company.
 
 The Annual Accounts and the related details of the Companys
 Subsidiaries will be made available on request. The Annual Accounts of
 the subsidiary companies are also available for inspection at the
 Registered / Head Office of the Company and also at the respective
 Registered Offices of the subsidiaries.
 
 In accordance with the provisions of Section 21 7(2AA) of the Companies
 Act, 1956, your Directors state that:
 
 (i) in the preparation of the annual accounts, the applicable
 Accounting Standards have been followed;
 
 (ii) the accounting policies selected and applied are consistent and
 the judgements and estimates made are reasonable and prudent so as to
 give a true and fair view of the state of affairs of the Company at the
 end of the financial year and of the profit of the Company for that
 period;
 
 (iii) proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1 956 for safeguarding the Assets of the Company and for
 preventing & detecting frauds and other irregularities;
 
 (iv) the Annual Accounts have been prepared on a going concern basis.
 The observations of the Auditors are self-explanatory and/or suitably
 explained in various notes to the Accounts.
 
 The Compliance Report on Corporate Governance forms part of the Annual
 Report. The Auditors Certificate on the Compliance of provisions of
 Corporate Governance stipulated under Clause 49 of the Listing
 Agreement is annexed to this Report.
 
 The Directors wish to place on record their sincere thanks to the
 Companys principals, its bankers, dealers and all its business
 associates for their continued support and record their appreciation of
 devoted services rendered by all ranks of the Companys personnel
 during the year.
 
                                             On behalf of the Board 
 
 Date: 25th May, 2007                           (SIDDHARTH SHRIRAM)
                                                           CHAIRMAN