Uttam Galva Steel

The Directors have pleasure in presenting the Twenty Third Report on
 the business and operations of the Company, along with the Audited
 Statement of Accounts for the Financial Year ended 31st March, 2008.
 
 1.  FINANCIAL RESULTS                       (Stand Alone Basis):
 
 PARTICULARS                                 Yrar ended    Year ended
                                        31st March,2006  31st March,2007
                                        (Rs.In Crores)   (Rs.in Crores)
 
 Gross Sales                                  3288.47         2679.90
 Gross Profit before Depreciation              302.97          271.75
 and Interest
 Less: Interest & Financial Charges            113,88          109.25
 Cash Profit                                   189.09          162.50
 Less: Depreciation                             64.78           49.02
 Profit before Tax                              12443          113.48
 Less: Provision for Tax                         1455           13.28
 Add: MAT Credit Entitlement                     1408           12.86
 Profit after tax                              123.87          113.06
 Balance Carried to Balance Sheet              423.50          301.13
 
 2.  OPERATIONS:
 
 Your Company has achieved a turnover of Rs. 3288.47 Crores as against
 Rs. 2679.90 Crores in the previous year. Your Company has recorded
 Profit Before Tax of Rs. 124.33 Crores as against Rs. 113.48 Crores in
 the previous year. Your Company has recorded the highest ever Sales
 Turnover and Profit before Tax during the year.
 
 Owing to expansions and importance of timely execution of projects,
 your Board is of the opinion that cash flow should not be disturbed and
 hence has decided to plough back earnings for the time being & not to
 recommend dividend payout.
 
 3.  EXPORTS:
 
 Your Company has exported to 135 countries across the Globe & continues
 to expand its wings. This year, your Company has serviced 259 export
 customers across most continents, of which 36 are new recipients of
 Uttam products. Your Companys average market-share in top 10 countries
 of exports is 0.6%.  Your Company has registered a growth in exports to
 Europe by 15% & Africa by 43% mainly due to change in product mix &
 emerging market scenario in developing nations, where demand exists.
 Your Company remains the highest exporter to USA from India for the
 Galvanised product group for the 3rd year in succession.
 
 The new wide width 1650 mm - Galvanising line SGL which got
 operational during the year is going to help broaden your Companys
 product range further enhancing value addition.  The SGL will make
 your Company one of the worlds most ,
 
 wide ranged product serving organisation which can service galvanized
 sheets as thin as 0.12 mm & as thick as 3.00 mm.  Very few mills in the
 World can produce such a wide product range. The SGL will also help
 in enhancing Market mix while focusing on exports to developing
 economies in East Europe, Middle East, Africa & South America.  Your
 Company has been awarded for the last 10 successive years by the
 Engineering Export Promotion Council (Ministry of Commerce. Govt, of
 India) for outstanding exports. By also bagging the State Level Export
 Award for the year 2006-2007 by the Govt, of Maharashtra, your Company
 has achieved a double distinction.
 
 4.  DOMESTIC MARKET:
 
 In the domestic market the volume increase in sales has been 55 %
 compared to sales in the same period last year.  Your Directors are
 pleased to inform you that your Company continues to enjoy the goodwill
 & business of reputed customers such as Mahindra & Mahindra, Bajaj
 Auto, Force Motors & others as is evident from the renewals of
 contracts.  Your Company has been quite successful with the white goods
 industry during the year and is now the vendor to customers like
 Voltas, Godrej Appliances, Bajaj Electricals and Haier Appliances. Your
 Company also continues to supply the vendors of TATA Motors, General
 Motors, Piaggio, Whirlpool, LG Electronics etc.
 
 During the year, your Company successfully continued supply of colour
 coated coils/sheets to the Indian roofing industry and continues to
 gain repeat business.
 
 The segments supplied include Construction, Telecon shelters, Bus body
 building & appliances.
 
 Your Company is continuing to enhance the reach in the domestic market
 by opening offices at various locations across the Country.
 
 5.  MANAGEMENT DISCUSSION AND ANALYSIS:
 
 Pursuant to Clause 49(IV) (B) & (F) of the Listing Agreement your
 Directors wish to report as follows:
 
 a) Industry Structure & Development:
 
 The World economy is today primarily driven by BRIC economy & India is
 part of BRIC, with GDP Growth in the range of 8-9%. Your Company is all
 set to serve the booming Domestic Market with enhanced capacity of
 value added products like Galvanised & Pre-painted steel sheets without
 disturbing the overseas customer base.  The demand for these products
 is set to grow at the rate of 20% domestically & your Company can
 fulfill the market demands to keep a satisfied customer base.
 
 b) Opportunities & threats:
 
 There exist good opportunities for your Company in markets like the
 USA, East Europe & Middle East countries with value added products like
 Structural Grade
 
 Gl in thicker gauges, and wider PPG! products which very few mills in
 the world can serve.
 
 Your Company can cater to White goods customers as well as the
 Automobile Industry, located overseas, with its new product mix.
 
 With the Indian Economy growing at such a fast pace & the growing
 demands in construction & infrastructure segments there will be a good
 opportunity for your Company to offer its expanded range of products in
 the Indian Market.
 
 However, there exists a threat with regard to volatile raw material
 prices, shipping & exchange rates. These hold valid tor our competitors
 too both in international as well as Domestic markets.
 
 c) Segment - wise Performance:
 
 Since your Company operates only in one Segment, Segment wise or
 product wise analysis or performance is not applicable.
 
 d) Outlook:
 
 The outlook for the Steel Industry looks quite promising with Worlds
 crude steel capacity over 1.2 Billion tonnes & India poised to cross 50
 Million tonnes. The new construction norms demand superior grades of
 steel, which your Company can serve with its new facilities in place.
 Your Companys strategic location allows it to serve domestic markets
 as well as export markets within the shortest time which is the demand
 of the hour
 
 World steel consumption could increase by. 71% in the next ten years,
 to exceed 2 Billion tonnes/year of finished steel products by 2017.
 Global consumption is forecast to grow at an annual rate of 5.2%
 between 2006 to 2012, to reach 1.5 Billion tonnes/year. The compound
 annual grown rate will then accelerate to 6% in the period 2012- 2017.
 
 Fastest growth in consumption will be seen in Asia, which will average
 a 7.4% per year increase in steel demand upto 2017. This will be driven
 by an 8% annual rise in China, which will be consuming more than 800
 Million tonnes/year by 2017. Indias steel usage is also growing fast,
 and its consumption is forecast to overtake South Korea by 2012 and
 Japan by 2017.
 
 Consumption in the CIS is forecast to rise by more than 3% per year,
 reaching 73.7 Million tonnes by 2017. North American and European
 consumption is forecast to dip between 2007 and 2009 because of the
 sub-prime crisis.  But both regions should see a recovery from 2010
 onwards. In Europe the rise in consumption will be led by Eastern
 Europe and Turkey which should see annual growth of more than 6% per
 year upto 2017: while growth in the rest of Europe wiil be 1% per year,
 or less.
 
 In India the Union Steel Ministry has revised its original documents
 production target specified in the National Steel Policy. The
 Government, which had earlier set,an annual production target of 110
 Million tonnes by 2020.  now expects to achieve this by 2011-2012
 itself.
 
 Accordingly, domestic production for 2020 has been revised to a
 staggering 300 Million tonnes. The spurt in production would be led by
 the 13% growth in national consumption.
 
 Indias annual steel production capacity is growing at 10%.  While
 India ranks fifth in global steel production, it expects to achieve the
 second slot by 2020.
 
 e) Risks and Concerns:
 
 Your Company has appointed M/s. KPMG to carry out a study of risks
 involved in our business. Your Company has adequate systems and
 measures to take care of all the risk exigencies involved in our
 business.
 
 f) Internal Control Systems and their adequacy:
 
 Effective internal operational control systems and regular internal
 audit mechanisms to monitor and review the same under the overall
 control and supervision of the Audit Committee of Directors are in
 place and functioning well. KPMG has been appointed to carry out the
 Internal Audit of the Company. Efforts for continued improvements are
 being consistently made in this regard.
 
 g) Discussion on Financial Performance with respect to Operational
 Performance:
 
 The financial performance with respect to the operational performance
 during the year under review was good due to which your Company has
 been able to achieve good financial results, which would help your
 Company to complete the on-going expansion.
 
 h) Material Development in Human Resources / Industrial Relations
 Front, including Number of People Employed
 
 Implementation of healthy HRD practices for overall development of
 human resources and induction of professionally qualified and skilled
 manpower including internal and external training programmes are
 constant features of your Company. Presently, your Company employs 1200
 employees. Your Company is proud of its healthy Industrial Relations
 record.
 
 i) Material Financial and Commercial Transactions with related parties:
 
 Thare are no materially significant financial and commercial
 transactions with the related parties conflicting with the interest of
 the Company during the financial year under review. The Promoters and
 the Directors are not dealing in the Equity Shares of the Company.
 
 6.  CORPORATE GOVERNANCE:
 
 Your Company has implemented all the mandatory requirements pursuant to
 Clause 49 (as amended) of the Listing Agreement. A detailed report on
 Corporate Governance along with a certificate from the Auditors
 confirming the compliance is annexed hereto and forms part of the
 Directors Report as Annexure-lll.
 
 7.  DIRECTORS:
 
 Shri Praveen Miglani, Shri S T Parikh and Shri Ankit Miglani, retire by
 rotation and being eligible have offered themselves for re-appointment.
 The Board of Directors recommends their re-appointment.
 
 8.  PARTICULARS OF EMPLOYEES U/S 217 (2A) OF THE COMPANIES ACT, 1956:
 
 Informafion required for particulars of Employees as required under
 Section 217(2A) of the Companies Act, 1956 is enclosed herewith as
 Annexure - II.
 
 9.  DIRECTORS RESPONSIBILITY STATEMENT:
 
 Pursuant to Section 217(2AA) of the Companies (Amendment) Act. 2000,
 the Directors confirm that:
 
 i) In the preparation of the annual accounts, the applicable accounting
 standards have been followed.
 
 ii) Appropriate Accounting Policies have been selected and applied
 consistently. Judgements and estimates that are reasonable and prudent
 so as to give a true and fair view of the state of affairs of the
 Company as at 31st March, 2008 and of the Profit and Loss Account for
 the financial year 2007-2008 have been made.
 
 iii) Proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956, for safeguarding the assets of the Company and
 preventing and detecting fraud and other irregularities.
 
 iv) The Annual Accounts have been prepared on a going concern basis.
 
 10.  AUDITORS REPORT:
 
 Notes to the Accounts as referred in the Auditors Report are self -
 explanatory and therefore, do not call for any further comments or
 explanations.
 
 11.  AUDITOR:
 
 M/s. Prakkash Muni & Associates Chartered Accountants, the retiring
 Auditor is eligible for re-appointment.
 
 12.  FIXED DEPOSITS:
 
 Your Company has not accepted Deposits from Public u/s.58A of the
 Companies Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975.
 
 13.  INSURANCE:
 
 Your Company has taken adequate insurance cover for all its Assets.
 
 14.  LISTING OF SECURITIES:
 
 113,97.3443 Equity Shares of Rs. 10/- each are listed with the Stock
 Exchanges at Mumbai and National Stock Exchange of India, Mumbai.
 
 The Company has paid the listing lees for the financial year 2007-2008
 to BSE, NSE and DSE Approval lor de-listing of Equity Shares is awaited
 from the Calcutta Slock Exchange Association Ltd
 
 15.  DEMAT OF SECURITIES:
 
 Nearly 75 34% of total Equity Share Capital is held in dematerialized
 form with NSDL/CDSI
 
 16.  SUSIDIARY COMPANY:
 
 There is one wholly-owned subsidiary Company namely MKR International
 Limited incorporated in British Virgin Islands as an International
 Business Company, the accounts of which are consolidated along with the
 accounts of your Company pursuant to Section 212 of the Companies Act.
 1956.
 
 The Consolidated Audited Annual Accounts of the Company together with
 its Subsidiary for the Financial Year 2007-2008 are being published in
 the Annual Report of the Company pursuant to Clause 32 of the Listing
 Agreement.
 
 As per Section 212 of the Companies Act 1956, we are required to attach
 the Directors Report. Balance Sheet, and Profit and Loss Account of
 the subsidiary. We have applied to the Ministry of Company Affairs for
 an exemption from such attachment, as we present the audited
 consolidated financial statement in the Annual Report. Accordingly, the
 Annual Report does not contain separate financial statement for this
 Subsidiary Company
 
 17.  DISCLOSURES:
 
 Information on conservation of energy, technology absorption, foreign
 exchange earnings and outgo required to be given pursuant to Section
 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of
 Particulars in the Report of the Board of Directors) Rules. 1988 is
 annexed hereto (Annexure - I) and forms part of this report.
 
 18.  ACKNOWLEDGEMENT:
 
 Your Directors take this opportunity to express their deep gratitude to
 the Central, State & Local Governments, Financial Institutions and
 Banks for their continued support, co-operation and guidance.
 
 Your Directors also like to place on record their sincere appreciation
 for the total commitment, dedication and hard work put in by every
 member of the Uttam Family.
 
 Your Directors express their gratitude to the esteemed customers of the
 Company for their continued confidence and faith, which they have shown
 in the products and services of your Company.
 
 And to you our Shareholders, we are deeply grateful for the confidence
 and faith which you have always placed in us.
 
                                       For and on behalf of the Board
 
 Place : Mumbai                                    Rajinder Miglani
 Date  : 30th April, 2008               Chairman & Managing Director