Usher Agro Ltd Directors Report

To The Members of Usher Agro Ltd.

Your Directors have pleasure in presenting 21st Annual Report on the business and operations of the Company and the financial accounts for the Year ended 31st March, 2017.

STATE OF COMPANYS AFFAIRS

Your Board is reporting the affairs of the Company for the FY 2016-17 as under:

Financial Results

The financial performance of the Company, for the Financial Year ended 31st March, 2017 is summarised below:

(Rs. in Lakhs)

Particulars	Year ended 31/03/2017	Year ended 31/03/2016
Sales & Other Income	43727.18	158097.02
Profit before Financial Charges & Depreciation	(35244.78)	(13962.86)
Less : Financial Charges	3044.84	12009.32
Cash Profit for the year	(38289.62)	(25972.18)
Less : Depreciation	3457.33	3877.38
Profit before Tax	(41,746.95)	(29849.56)
Less : Provision for Tax including Fringe Benefit Tax	-	-
Less : Provision for Deferred tax	-	(73.41)
Less: Short Provision for tax of earlier years.	-	137.59
Profit after Tax	(41,746.95)	(29913.76)
Balance brought forward from Previous Year	(14281.06)	15632.70
Balance available for Appropriation	(56028.01)	(14281.06)
Appropriations :
Proposed Dividend	-	-
Corporate Dividend Tax	-	-
Transferred to General Reserve	-	-
Debt Redemption Reserve	-	-
Debenture Redemption Reserve	-	-
Earning per Share (EPS)	-	-
Balance carried to Balance Sheet	(56028.01)	(14281.06)

During the year under review, the sales and other income of your Company have decreased to Rs. 43,727.18 lakh within the period of as compare to Rs. 1,58,097.02 lakh in the previous financial year. There is the loss in the financial year 2016-17. The loss after tax is Rs. 41,746.95 lakh against loss of Rs. 29,913.76 lakh in previous year.

Dividend

In view of the loss incurred by the Company during the year, the Directors have not recommended any dividend for the financial year ended March 31, 2017.

Transfer to Reserves

No amount has been transferred to General Reserves for the financial year 2016-17.

Deposits

The Company has not accepted any deposit from the public under section 73 and 74 of the Companies Act, 2013.

SHARE CAPITAL

During the year under review, the following changes in the Authorized Share Capital and Paid up Capital were held

1. Increase in Authorized Share Capital From Rs. 50 Crore To Rs. 80 Crore

The lenders of the Company at their Joint Lenders meeting held on 13th May, 2016 have decided to undertake SDR Scheme of Reserve Bank of India. Accordingly, the Company was required to issue and allot further equity shares to the lenders as per the SDR Scheme for which the Authorized Capital was required to be increased. Therefore, in the Annual General Meeting of the Company held on 30.09.2016, the Authorized Share Capital of the Company was increased from Rs. 50,00,00,000/- (Rupees Fifty Crores Only) to Rs. 80,00,00,000/- (Rupees Eighty Crores Only).

2. Issue and allotment of 39612472 Equity Shares to the Lenders of the Company

The lenders of the Company have invoked Strategic Debt Restructuring Scheme (SDR) of Reserve Bank of India on May 13, 2016 and in pursuance of the same, the Company in its Board of Directors meeting held on December 08, 2016 has allotted 39612472 equity shares @ Rs. 11.09 per share aggregating to Rs. 439302314, to the lenders of the Company. Consequently, the paid up capital of the Company stands increased from Rs. 3805.90 lakh to 7767.15 lakh.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company and its subsidiaries viz, Usher Eco Power Limited and Usher Worldwide FZE, are prepared in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Companies Act, 2013 (Rs.the Act) read with Rule 7 of the Companies (Accounts) Rules, 2014, form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company.

The Company has adopted a Policy for determining Material Subsidiaries in terms of Regulation 16 (c) of SEBI (LODR) Regulations, 2015 of the Listing Agreement. The Policy, as approved by the Board, is uploaded on the Companys website at www.usheragro.com.

Performance of the Subsidiaries

a) USHER ECO POWER LIMITED

Usher Eco Power Limited is into a Biomass based Power Generation Activity. The Company has commissioned the 16MW Rice husk based Co- generation Eco friendly power plant at Chhata Dist- Mathura, U.P. which is using Rice husk as a fuel. This Power Plant is eligible for CDM & REC benefits. The project is already registered in the UNFCCC and availed CDM benefits from this year. The subsidiary Companys financial statement is attached to this annual financial report. This plant will further enhance its operational efficiency and will ensure uninterrupted availability of power at competitive prices. UEPL planned and started to setting up a new rice husk/multi fuel based biomass power plant which capacity would be 18 MW and company is in the process of setting up a 50TPD Silica extraction facility to generate silica from the ensuing rice husk ash. For setting up both the project UEPL closed the financial deal with FMO-DEG. UEPL also signed agreement with Goodyear Tyre & Rubber Company, USA for supply of RH-Silica.

b) USHER WORLDWIDE FZE

Usher Worldwide FZE which is registered in a Free Zone Establishment (FZE) in the Sharjah Airport International Free Zone (SAIF Zone), United Arab Emirates has commenced commercial operations from FY 2014-15. This company has been incorporated in UAE for the purpose of general trading in rice and other commodities. This Company will provide strong foot hold to your Company in Middle East Asia and African market, which is the largest export market for rice as well as enable us to procure pulses from global market in most efficient and competitive terms, which is also a basic raw materials for us post expansion of pulses milling project.

During the year under review, no Company has become or ceased to be a subsidiary of the Company. A statement containing the salient features of the financial position of the subsidiary companies in Form AOC.1 is annexed as ANNEXURE 2.

BUSINESS EXPANSION

The Subsidiary Company viz., M/s. Usher Eco Power Limited is in process of expansion of its existing rice husk based waste-to-energy facility by 18 MW (i.e. from 16MW to 34MW) and at Village - Chhata, Dist – Mathura in the state of Uttar Pradesh in India. Usher Eco Power Limited is also in process of setting up of proposed 50TPD Precipitated Silica Extraction facility using Rice Husk Ash (RHA) at Chhata, Mathura. The technology of extracting high quality tire grade silica from Rice Husk Ash (RHA) has been developed by Indian Institute of Science (IISc), Bangalore and licensed to Usher Eco Power Limited. Usher Eco Power Limited has become the first Company in India to set up a commercial scale plant for producing high quality tire grade silica from Rice Husk Ash generated by its existing 16MW rice husk fired biomass power plant. Silica is used as filler in the tyres and technology has the potential of becoming the first established source of "Green" filler for the tyre industry. Usher Eco Power Limited is a licensee of patented Technology developed by IISc, Bangalore for extracting silica from rice husk ash generated by the boiler of the Power Plant. This will further improve operational efficiency of the company by value added use of waste i.e. Rice Husk Ash (RHA).

BOARD OF DIRECTORS

During the year under review, the Company had Seven (7) Directors consisting of Four (4) Independent Directors, One (1) nominee director appointed by IDBI Bank Limited and One (1) Managing Director and One (1) Whole Time Director on its Board.

Managing Director and Chief Financial Officer

Mr. Vinod Kumar Chaturvedi has been serving as the Managing Director & Chief Financial Officer of the Company.

Appointments / Resignations of Directors and Key Managerial Personnel

Following appointment / resignation of director has taken place in the FY 2016-17

1. Mr. Manoj Pathak, Whole Time Director has resigned from the Board of Directors of the Company w.e.f. 07/12/2016

2. IDBI Bank Limited had withdrawn the nomination of Mrs. Baljinder Kaur Mandal w.e.f. 28.11.2016 and nominated Mr. Ajay Sharma as Nominee Director w.e.f. 30.11.2016.

3. Mrs. Sarika Singh – Company Secretary of the Company has resigned from the Company w.e.f. 08.10.2016.

4. After the end of the financial year 31/03/2017 following changes in the composition of the Board were held

• Mr. Prem Chand Tiwari and Mr. Shri Prakash Arora, Independent Directors have resigned from the Board of Directors of the Company w.e.f. 25.04.2017.

• Mrs. Shikha Sethia Bhura was appointed as Independent Non Executive Woman Director w.e.f. 30.05.2017.

Declaration by Independent Director under sub-section (6) of section 149

The Company has received Declaration that the Independent Director meets the criteria of Independence laid down in sub-section (6) of section 149 of the Companies Act 2013. The declaration in respect of the same is received at the first Board meeting of the Financial Year.

Annual Evaluation

The Company has devised a Policy for performance evaluation of the Board, Committees and other individual Directors (including Independent Directors) which includes criteria for performance evaluation of the Non-executive Directors and Executive Directors. The evaluation process inter alia considers attendance of Directors at Board and committee meetings, acquaintance with business, communicating inter se board members, effective participation, domain knowledge, compliance with code of conduct, vision and strategy, benchmarks established by global peers, etc, which is in compliance with applicable laws, regulations and guidelines. The Board carried out annual performance evaluation of the Board, Board Committees and Individual Directors and Chairperson. The Chairman of the respective Board Committees shared the report on evaluation with the respective Committee members. The performance of each Committee was evaluated by the Board, based on report on evaluation received from respective Board Committees. The reports on performance evaluation of the Individual Directors were reviewed by the Chairman of the Board.

Procedure for Nomination and Appointment of Directors:

The Nomination and Remuneration Committee is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, and financial condition and compliance requirements. The Committee is also responsible for reviewing and vetting the CVs of potential candidates vis--vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.

Number of Meetings of the Board

During the Financial Year 2016-17, seven meetings of the Board of Director were held viz. 30th May 2016, 20th June, 2016, 13th August, 2016, 31st August, 2016, 14th November, 2016, 08th December, 2016 and 14th February, 2017. Detailed information on the meetings of the Board is included in the report on Corporate Governance, which forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the company has established Corporate Social Responsibility (CSR) Committee and statutory disclosures with respect to the CSR Committee and an Annual Report on CSR Activities forms part of this Report at ANNEXURE – 3 POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment (POSH) Committee, to inquire into complaints of sexual harassment and recommend appropriate action. There have been no cases reported to the Committee, for the financial year 2016-17.

CORPORATE GOVERNANCE

Your Company is committed to achieve the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set by the Regulators/applicable laws. Accordingly, your Board functions as trustees of the shareholders and seeks to ensure that the long term economic value for its shareholders is achieved while balancing the interest of all the stakeholders. A separate section on Corporate Governance as stipulated under Regulation of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges is enclosed as an Annexure to this report. The report on Corporate Governance also contains certain disclosures required under the Companies Act, 2013.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review as stipulated under SEBI (LODR) Regulations, 2015 is presented in a separate section forming part of this Annual Report.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has implemented a Whistle Blower Policy pursuant to which Whistle Blowers can raise concerns such as breach of Code of Conduct, fraud, bribery, corruption, employee misconduct, etc. Further, the mechanism adopted by the Company encourages the Whistle Blower to report genuine concerns or grievances and provides for adequate safeguards against victimization of Whistle Blower who avail of such mechanism and also provides for direct access to the Chairman of the Audit Committee, in exceptional cases. The functioning of the Vigil mechanism is reviewed by the Audit Committee from time to time. The details of the Whistle Blower Policy are explained in the Report on Corporate Governance and also available on the website of the Company (www.usheragro.com).

BOARD DIVERSITY

The Company recognizes and embraces the importance of a diverse board in its success. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors. The Board Diversity Policy is available on our website, www.usheragro.com.

LOANS, GUARANTEES OR INVESTMENTS IN SECURITIES

There have been no loans / guarantees given or securities provided during the financial year 2016-17 under the provisions of Section 185 / 186 of the Companies Act, 2013. The details of investments covered under the provisions of Section 186 of the Act are given in notes to financial statements provided in this Annual Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the Regulators/ Courts/ Tribunals that would impact the going concern status of the Company and its future operations.

MATERIAL CHANGES & COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY

Pursuant to the extant directions framed by Reserve Bank of India dated. February 26, 2014 on ‘Revitalizing Distressed Assets in the Economy – Guidelines on Joint lenders Forum (JLF) and Corrective Action Plan (CAP) (the ‘JLF Guidelines) the lenders of the Company identified the stress in the account of the Company and reported the account of the Company to CRILC and accordingly all the lenders of the Company formed a committee of Joint Lenders Forum (JLF) on 16th March, 2016.

In the JLF meetings, for the purpose of working towards revival of the Company, the Company as well as the lenders have amongst other aspects also proactively discussed and worked on aspects of exploring alternate business plans, approaching potential investors and other possibilities. The authorized representatives of the lenders have been present and privy to all these aspects and participated in the deliberations.

Accordingly, in the meeting of the JLF members held on May 13, 2016, the lenders collectively agreed that the SDR Scheme of RBI is a viable option to proceed with restructuring of the account and further agreed that under Strategic Debt restructuring (SDR) scheme was a viable option to preserve the value of the Company and adopted the "Reference Date" for the purpose as May 13, 2016.

In pursuance of the SDR Scheme, the Board of Directors of the Company in their meeting held on December 08, 2016 had allotted 39612472 equity shares @ Rs. 11.09 per share to the JLF lenders of the Company.

REMUNERATION POLICY

The Company has in place a Nomination, Remuneration and Evaluation Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and SEBI (LODR) Regulations, 2015 same is uploaded on the website of the Company www.usheragro.com

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered with related parties during the financial year 2016-17 were on arms length basis and in ordinary course of business. Further, there were no material related party transactions during the year with the Promoters, Directors or Key Managerial Personnel. The Company has adopted a Related Party policy and procedure, which is available at companys website.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has laid down set of standard, process structures which enables to implement internal financial control across the organisation and ensure that the same are adequate and operating effectively.

AUDITORS AND AUDITORS REPORT Statutory Auditors

M/s. Jayesh Sanghrajka & Co.LLP, Chartered Accountants, Mumbai (Firm Registration No104184W/W100075) were the Statutory Auditors for the FY 2016-17. They have audited the Financial Statements for the Financial Year 2016-17 and submitted their report which forms part of this report. Notes to the Accounts referred to in the Auditors Report are self-explanatory and therefore do not call for any further comments. There are qualification in the Auditors Report on the Financial Statements of the company.

With reference to the Auditors qualified opinion, matter of emphasis and observations in the Auditors Report, the explanation/comments of the Board in accordance with the provisions of Section 134(3)(f) of the Companies Act, 2013 are set out in Annexure ‘1 to this Report.

Secretarial Auditor

Pursuant to section 204 of the companies act, 2013 Company engaged Mr. Anshuman Chaturvedi, Practising Company secretary Mumbai for conducting Audit for the Financial Year 2016-17. Mr. Anshuman Chaturvedi has issued Secretarial Audit Report. The report of the Secretarial Auditor for the FY 2016-17 in the prescribed form MR-3 is annexed to this report as Annexure 4 Cost audit/auditor

Pursuant to the provisions of section 148 of the Companies Act, 2013 and Companies (Cost Records and Audit) Rules, 2014, the products manufactured by the Company were not covered for maintenance of cost records and therefore, the Company discontinued the cost audit and consequently, the Company has not appointed cost auditor for the financial year 2016-17.

EMPLOYEE REMUNERATION

In view of the losses incurred by the Company, the Company has not paid remuneration to any Director of the Company and there was no increase in the managerial remuneration of Directors, KMP and Employees under Section 197 of the Companies Act, 2013. The percentage increase in the salaries of employees and so also of managerial personnel and KMP in the previous financial year and so also in the FY 2016-17 is Nil. There is no increment in the previous financial year and also in FY 2016-17. The number of permanent employees on the rolls of company – 140. The Company has in place remuneration policy and if any remuneration will be paid it will be as per the remuneration policy of the company.

STATUTORY DISCLOSURES

The disclosures to be made under sub-section (3) (m) of Section 134 of the Companies Act 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 by your Company are explained as under:

(A) Conservation of Energy

(i) the steps taken or impact on conservation of energy;

The Company is aware about energy consumption and environmental issues related with it and continuously making sincere efforts towards conservation of energy. The maintenance of the Boiler and Electrical Equipment is carried out regularly with optimum care with the help of the technical professionals and modern equipment. The Company is in fact engaged in the continuous process of further energy conservation through improved operational and maintenance practices. Your Company is having a rice husk fired 1 MW co-generation captive power plant at Mathura, which helped to save the cost of power consumption and also generating power in eco friendly manner by supporting environment.

(ii) the steps taken by the Company for utilizing alternate sources of energy

The company has already commissioned 1MW co-generation captive power plant at Mathura to use its rice husk which is waste product during the production of rice, the company has also installed 16MW biomass power plant in its subsidiary company M/s Usher Eco Power Ltd to generate the energy through renewal sources of energy.

(iii) the capital investment on energy conservation equipments - NIL (B) Technology Absorption

i. The Company is using latest technology in rice and wheat milling which is well established the world over. The Company has installed new equipment with latest technology for the purpose of rice processing. The Company has carried out R&D in house so as to improve the quality of the Rice Bran, one of the bye-products of rice milling process (8% of the total output). The Company has evolved the process to reduce the content of Nakku (Broken Rice) in the Rice Bran.

ii. The Benefit derived like product improvement, cost reduction, product development or import substitution.

iii. In case of imported technology (The Company has not imported any technology during the last three financial years.)

iv. Expenditure on research & development – the company has actively participated in research & development of new technology of Silica extraction with IISc Bangalore and has incurred around Rs. 40 Crore till now in establishing & commissioning its small plant at Chhata, Mathura

(C) Foreign Exchange Earnings and Outgo

During the year under review, the foreign exchange outgo was Rs.195.17 lakh (Prev. Yr. Rs. 928.90 lakh) and the foreign exchange earnings on exports on FOB Basis were Rs. 5.17 lakh (Prev. Yr. Rs. 500.35 lakh).

EXTRACTS OF ANNUAL RETURN

Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extract of Annual Return as at March 31, 2017 forms part of this report as

Annexure 5.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with Section 134(5) of the Companies Act, 2013, your Board of Directors confirms that:

a) in the preparation of the annual accounts, the applicable Accounting Standards have been followed and that there is no material departure;

b) the directors had selected such accounting policies and applied them consistently and made 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 at the end of the financial year and of the profit or loss of the Company for the year;

c) proper and sufficient care has been taken for maintenance of adequate accounting records as provided in the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

d) The annual accounts of the Company have been prepared on a "going concern" basis;

e) the directors had laid down internal financial controls to be followed by the Company and that such controls are adequate and were operating effectively; and

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

ACKNOWLEDGEMENT

The Directors wish to convey their appreciation to all of the Companys employees for their enormous personal efforts as well as their collective contribution. The Directors would also like to thank the shareholders, customers, dealers, suppliers, bankers, Government and all the other business associates for the continuous support given by them to the Company and their confidence in its management.

	For and on behalf of the Board of Directors
	Vinod Kumar Chaturvedi	Ajay Prakash Arora
Place: Mumbai	Managing Director & CFO	Independent Director
Date: 30.05.2017	Din No. 00325197	DIN No. 01055020