During the financial year, your company has resumed operations in its Projects Construction and Contracts Divisions and Engineering Division apart from existing operations of infrastructure contracts and capital EPC, ENGG & consultancy contracts.

FINANCIAL RESULTS

                           For the year ended    for the year ended
                             31st March, 2012      31st March, 2011

Income                            22002114-00$       1,81,68,550-00

Expenditure                       12809983-00**      1,81,62,860-00*

Gross Profit                     (-9192131-00)              5690-00

Depreciation                       9210298-00            9210298-00

Provision for Tax                           0                     0

PATD                                -18167-00          (-9204598-00)

Net Profit                          -18167-00          (-9204598-00)

Reserves & Surplus                90994189-00        9,10,12,356-00

** Inclusive of the expenditure pertaining to the cleaning and over oiling of the plant and machinery pertaining to the welding division to revive the operations of the company.

$ The progress and income generated in the operations of the infrastructure development division and Projects division was not accounted as the result of the non approval as on 31st March, 2012 by the respective clients according to the contract between the clients and the company.

FUTURE OUTLOOK

Your company has revived its operations which were stalled due to a problem caused by the Department of Industries, Government of Andhra Pradesh.

As you are fully aware that the operations of the divisions of the company after de-merger of its four divisions will be functioning as independent companies, however, the proposed planning has been shown below.

Projects Division: This Division will be functioned as UBE Projects Limited. The company was incorporated on 4th September, 2006 vide incorporation/corporate identity no U 45101 AP 2007 PLC 051055 2006-2007 with the Registrar of Companies, Hyderabad, with main activities as EPC and Turnkey Projects including fabrication. The existing land and buildings of your company will be transferred to the division as per the scheme of de-mergerger.

Engineering Division: This Division will be functioned as UBE Tools Limited. The company was incorporated on 8th September, 2006 vide incorporation/corporate identity no U 74999 AP 2006 PLC 051086 2006-2007 with the Registrar of Companies, Hyderabad, with main activities as manufacturing the Special Purpose Machines, Tooling Systems and other light Engineering activities. This division is proposing to acquire the land and construct the buildings; however, soon after the approval of de-merger scheme, till the construction of buildings for operations, the division will be functioned in rented premises.

Welding Division: This Division will be functioned as UBE Weldproducts Limited. The company was incorporated on 28th August, 2006 vide incorporation/corporate identity no U 31909 AP PLC 050993 2006-2007 with the Registrar of Companies, Hyderabad, with main activities as Manufacture of Welding Consumables and Equipment. This division is proposing to acquire the land and construct the buildings; however, soon after the approval of de-merger scheme, till the construction of buildings for operations, the division will be functioned in rented premises.

Automotive Division: This Division will be functioned as UBE Automotive Limited. The company was incorporated on 4th September, 2006 vide incorporation/corporate identity no U63011 AP 2006 PLC 051054 2006-2007 with the Registrar of Companies, Hyderabad, with main activities as assembly of Low Cost People Car.

Your company is in the process of initiating the operations of the division, has been negotiating for the Technical Cooperation for long term association with M/s. Zastava Automobili of Belgrade for the manufacturing of their model Koral. Memorandum of Understanding is being executed with them during the next financial year.

Your company is also exploring the Technical Cooperation for long term association with few other reputed companies from Europe, USA and Australia, for Automotive Division.

On completion of the de-merger Scheme, your company will become as a Holding Company for the four companies and continue to be Engineering Company (without manufacturing activities in the field of Turn Key Projects and Integrated Consultancy Company, and Infrastructure Development Company including Marketing and Trading Company.

NOTES ON SUBSIDIARY COMPANIES

Your company has no subsidiary companies of now; however, your company is proposing to acquire the controlling equity in UBE Automotive Limited, UBE Projects Limited, UBE Tools Limited and UBE Weldproducts Limited, on approval of de-merger scheme, by Honorable High Court of Andhra Pradesh. Once the acquisition is complete, these companies will become as the subsidiary companies to your company.

Your company has initiated certain infrastructure projects with the Governments and Private corporate, one such project has been executed the Memorandum of Understanding with the Government of Gujarat and others are in pipeline, the same will be initiated as an SPV, which will become as the Subsidiary Companies to your company.

DIVIDEND

Considering the long term interest of the Members and as a matter of prudence it is proposed to plough back profits to build up own resources, your Directors, therefore, have not recommended payment of cash dividend for the period ended 31st March, 2012.

SOCIAL DEVELOPMENT

Your company continues to record high priority in its contribution to socio economic development particularly in the areas of Rural Health, education etc., among the villages in the vicinity of the plant.

ENERGY TECHNOLOGY AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption and foreign exchange earning/out go, as required to be disclosed in terms of Section 217(1) (e) of the companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules 1988, is annexed hereto and forms part of this report.

RESEARCH AND DEVELOPMENT

Your company is proposing to establish a Central Research Center in the areas of Material Sciences and Engineering.

AUDITORS

M/s. C.V.S. Balachandra Rao & Co, auditors of your Company, who are retiring at the Twenty Seventh Annual General Meeting and being eligible to offer themselves for reappointment. Your Directors recommend that the appointment of M/s. C.V.S. Balachandra Rao & Co, Chartered Accountants as Auditors of the company and recommend that authority be given to the Board of Directors to fix up the remuneration.

AUDIT COMMITTEE

Your company has constituted an Audit Committee to meet the requirements under the provisions of Sections 292A of the Companies Act, 1956 and the listing agreement with the stock exchanges. The committee is chaired by Mr. S. Rahmatullah has taken over as the Chairman of the committee, who has 47 years of wide experience in the field of Secretarial Services, Teaching and Fiscal.

CORPORATE GOVERNANCE REPORT

A report on Corporate Governance Report and Management Discussions & Analysis Report is annexed separately as part of the report.

CASH FLOW STATEMENT

A cash flow statement for the year's operation is appended.

FIXED DEPOSITS

Your company has not accepted any fixed deposits under the provisions of Section 58(a) of the Companies Act, 1956 hence not applicable to the company.

INSURANCE

All properties are insurable in the interest of the company including buildings, plant and machinery and stocks have been adequately insured. As required under Public Liability Insurance Act. 1991, your company has taken necessary insurance coverage.

DIRECTORS

Mr. M. Chandramouli and Mr. M. S. Rajaneesh Chandra retire by rotation and being eligible to offer themselves for reappointment.

ANCILLARY DEVELOPMENT

Your company has planned to develop ancillary companies wherein the products of ancillary Companies will be used in the products of your company.

HUMAN RESOURCES

Employee relations remained cordial at your company. Your Directors take this opportunity to record their appreciation for the out standing contribution of all employees of your company. Particulars of employees is required to be furnished in terms of the rules framed under Section 217 (2A) of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 1988. During the period, there were no employees drawing remuneration of more than Rs. 12,00,000/- or more per annum or Rs. 1,00,000/- per month, therefore, no particulars of employees. Towards the foreign travel by the executives if any during the year are reimbursed in INR as equivalent to the exchange rate prevailing the time of travel.

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION ETC.

In accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956, the required information relating to Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo is annexed.

DIRECTORS' RESPONSIBILITY STATEMENT AS PER SECTION 217(2AA) OF THE COMPANIES ACT, 1956

Responsibilities in relation to financial statements:

The financial statements have been prepared in conformity, in all material respects, with the generally accepted accounting principles in India and the accounting standards prescribed by ICAI in a consistent manner and supported by reasonable and prudent judgments and estimates. The Directors believe that the financial statements reflect true and fair view of the financial position as on 31.03.2012.

The financial statements have been audited by M/s. C.V.S. Balchandra Rao & Co., Chartered Accountants in accordance with generally accepted auditing standards which include an assessment of the systems of internal controls and tests of transactions to the extent considered necessary by them to support their opinion.

GOING CONCERN

In the opinion of the Directors, the Company has started the operation in the main business activities, Manufacturing of Welding Consumable and Equipment, Design, Fabrication, Erection and Commissioning of Process Plants (EPC and Heavy Fabrication), Design, Manufacture, Erect ion and Commissioning of Special Purpose Machine Tools and Tooling Systems, and Infrastructure Development and accordingly it is considered appropriate to prepare the financial statements on the basis of going concern. Maintenance of accounting records and internal controls

The company has taken proper and sufficient care for the maintenance of adequate accounting records as required by the Statute.

Directors have overall responsibility for the Company's internal control system which is designed to provide a reasonable assurance for safeguarding of assets, reliability of financial records and for preventing and detecting fraud and other irregularities.

The system of internal control is monitored by internal audit function, which encompasses the examination and evaluation of the adequacy and effectiveness of the system of internal control and quality of performance in carrying out assigned responsibilities. Internal Audit Department interacts with all levels of management and the Statutory Auditors, and reports significant issued to the Audit Committee of the Board.

Audit Committee supervises financial reporting process through review of accounting and reporting practices, financial and accounting controls and financial statements. Audit Committee also periodically interacts with internal and statutory auditors to ensure quality and veracity of company's accounts.

Internal Auditors and Statutory Auditors have full and free access to all the information and records as considered necessary to carry out their responsibilities. All the issues raised by them have been suitably acted upon and followed up.

ACKNOWLEDGEMENTS

Your Directors wish to thank the Central Government, Government of Andhra Pradesh, Financial Institutions and the Company's Bankers for a variety of help and regular encouragement to the company. Your Directors gratefully acknowledge the trust and confidence you as esteemed shareholders have placed in the company at all times. Your Directors also wish to place on record their appreciation of the dedicated services rendered by all the officers, staff and workers of the company at all levels and for their unfailing loyalty and sense of belonging which constituted the hall mark of your company.

                                      For and on behalf of the Board

                                                   S. Vijaya Bhaskar
                                                   Managing Director