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