Usher Agro Ltd.
|BSE: 532765||Sector: Agri and agri inputs|
|NSE: USHERAGRO||ISIN Code: INE235G01011|
|BSE 00:00 | 29 Mar||Usher Agro Ltd|
|NSE 05:30 | 01 Jan||Usher Agro Ltd|
|BSE: 532765||Sector: Agri and agri inputs|
|NSE: USHERAGRO||ISIN Code: INE235G01011|
|BSE 00:00 | 29 Mar||Usher Agro Ltd|
|NSE 05:30 | 01 Jan||Usher Agro Ltd|
To The Members of Usher Agro Ltd.
Your Directors have pleasure in presenting 21st Annual Report on the business andoperations of the Company and the financial accounts for the Year ended 31st March 2017.
STATE OF COMPANY'S AFFAIRS
Your Board is reporting the affairs of the Company for the FY 2016-17 as under:
The financial performance of the Company for the Financial Year ended 31st March 2017is summarised below:
(Rs. in Lakhs)
During the year under review the sales and other income of your Company have decreasedto Rs. 43727.18 lakh within the period of as compare to Rs. 158097.02 lakh in theprevious financial year. There is the loss in the financial year 2016-17. The loss aftertax is Rs. 41746.95 lakh against loss of Rs. 29913.76 lakh in previous year.
In view of the loss incurred by the Company during the year the Directors have notrecommended 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.
The Company has not accepted any deposit from the public under section 73 and 74 of theCompanies Act 2013.
During the year under review the following changes in the Authorized Share Capital andPaid 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 havedecided to undertake SDR Scheme of Reserve Bank of India. Accordingly the Company wasrequired to issue and allot further equity shares to the lenders as per the SDR Scheme forwhich the Authorized Capital was required to be increased. Therefore in the AnnualGeneral Meeting of the Company held on 30.09.2016 the Authorized Share Capital of theCompany was increased from Rs. 500000000/- (Rupees Fifty Crores Only) to Rs.800000000/- (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) ofReserve Bank of India on May 13 2016 and in pursuance of the same the Company in itsBoard 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 to7767.15 lakh.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company and its subsidiaries viz UsherEco Power Limited and Usher Worldwide FZE are prepared in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 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 theConsolidated Financial Statements of the Company.
The Company has adopted a Policy for determining Material Subsidiaries in terms ofRegulation 16 (c) of SEBI (LODR) Regulations 2015 of the Listing Agreement. The Policyas approved by the Board is uploaded on the Company's 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 Companyhas commissioned the 16MW Rice husk based Co- generation Eco friendly power plant atChhata Dist- Mathura U.P. which is using Rice husk as a fuel. This Power Plant iseligible for CDM & REC benefits. The project is already registered in the UNFCCC andavailed CDM benefits from this year. The subsidiary Company's financial statement isattached to this annual financial report. This plant will further enhance its operationalefficiency and will ensure uninterrupted availability of power at competitive prices. UEPLplanned and started to setting up a new rice husk/multi fuel based biomass power plantwhich capacity would be 18 MW and company is in the process of setting up a 50TPD Silicaextraction facility to generate silica from the ensuing rice husk ash. For setting up boththe project UEPL closed the financial deal with FMO-DEG. UEPL also signed agreement withGoodyear 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 theSharjah Airport International Free Zone (SAIF Zone) United Arab Emirates has commencedcommercial operations from FY 2014-15. This company has been incorporated in UAE for thepurpose of general trading in rice and other commodities. This Company will provide strongfoot hold to your Company in Middle East Asia and African market which is the largestexport market for rice as well as enable us to procure pulses from global market in mostefficient and competitive terms which is also a basic raw materials for us post expansionof pulses milling project.
During the year under review no Company has become or ceased to be a subsidiary of theCompany. A statement containing the salient features of the financial position of thesubsidiary companies in Form AOC.1 is annexed as ANNEXURE 2.
The Subsidiary Company viz. M/s. Usher Eco Power Limited is in process of expansion ofits 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. UsherEco Power Limited is also in process of setting up of proposed 50TPD Precipitated SilicaExtraction facility using Rice Husk Ash (RHA) at Chhata Mathura. The technology ofextracting high quality tire grade silica from Rice Husk Ash (RHA) has been developed byIndian 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 scaleplant for producing high quality tire grade silica from Rice Husk Ash generated by itsexisting 16MW rice husk fired biomass power plant. Silica is used as filler in the tyresand technology has the potential of becoming the first established source of"Green" filler for the tyre industry. Usher Eco Power Limited is a licensee ofpatented Technology developed by IISc Bangalore for extracting silica from rice husk ashgenerated by the boiler of the Power Plant. This will further improve operationalefficiency 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 & ChiefFinancial 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 ofthe 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 theCompany w.e.f. 08.10.2016.
4. After the end of the financial year 31/03/2017 following changes in the compositionof the Board were held
Mr. Prem Chand Tiwari and Mr. Shri Prakash Arora Independent Directors haveresigned from the Board of Directors of the Company w.e.f. 25.04.2017.
Mrs. Shikha Sethia Bhura was appointed as Independent Non Executive WomanDirector 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 criteriaof Independence laid down in sub-section (6) of section 149 of the Companies Act 2013. Thedeclaration in respect of the same is received at the first Board meeting of the FinancialYear.
The Company has devised a Policy for performance evaluation of the Board Committeesand other individual Directors (including Independent Directors) which includes criteriafor performance evaluation of the Non-executive Directors and Executive Directors. Theevaluation process inter alia considers attendance of Directors at Board and committeemeetings acquaintance with business communicating inter se board members effectiveparticipation domain knowledge compliance with code of conduct vision and strategybenchmarks established by global peers etc which is in compliance with applicable lawsregulations and guidelines. The Board carried out annual performance evaluation of theBoard Board Committees and Individual Directors and Chairperson. The Chairman of therespective Board Committees shared the report on evaluation with the respective Committeemembers. The performance of each Committee was evaluated by the Board based on report onevaluation received from respective Board Committees. The reports on performanceevaluation 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 competencyrequirements for the Board based on the industry and strategy of the Company. Boardcomposition analysis reflects in-depth understanding of the Company including itsstrategies environment operations and financial condition and compliance requirements.The Committee is also responsible for reviewing and vetting the CVs of potentialcandidate's vis--vis the required competencies and meeting potential candidates priorto making recommendations of their nomination to the Board. At the time of appointmentspecific requirements for the position including expert knowledge expected iscommunicated to the appointee.
Number of Meetings of the Board
During the Financial Year 2016-17 seven meetings of the Board of Director were heldviz. 30th May 2016 20th June 2016 13th August 2016 31st August 2016 14th November2016 08th December 2016 and 14th February 2017. Detailed information on the meetings ofthe Board is included in the report on Corporate Governance which forms part of thisAnnual 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 CorporateSocial Responsibility (CSR) Committee and statutory disclosures with respect to the CSRCommittee 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 Preventionof Sexual Harassment (POSH) Committee to inquire into complaints of sexual harassment andrecommend appropriate action. There have been no cases reported to the Committee for thefinancial year 2016-17.
Your Company is committed to achieve the highest standards of Corporate Governance andadheres to the Corporate Governance requirements set by the Regulators/applicable laws.Accordingly your Board functions as trustees of the shareholders and seeks to ensure thatthe long term economic value for its shareholders is achieved while balancing the interestof all the stakeholders. A separate section on Corporate Governance as stipulated underRegulation of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015with the Stock Exchanges is enclosed as an Annexure to this report. The report onCorporate Governance also contains certain disclosures required under the Companies Act2013.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report for the year under review as stipulatedunder SEBI (LODR) Regulations 2015 is presented in a separate section forming part ofthis Annual Report.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has implemented a Whistle Blower Policy pursuant to which Whistle Blowerscan raise concerns such as breach of Code of Conduct fraud bribery corruption employeemisconduct etc. Further the mechanism adopted by the Company encourages the WhistleBlower to report genuine concerns or grievances and provides for adequate safeguardsagainst victimization of Whistle Blower who avail of such mechanism and also provides fordirect access to the Chairman of the Audit Committee in exceptional cases. Thefunctioning 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 CorporateGovernance and also available on the website of the Company (www.usheragro.com).
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 diversityof the Board of Directors. The Board Diversity Policy is available on our websitewww.usheragro.com.
LOANS GUARANTEES OR INVESTMENTS IN SECURITIES
There have been no loans / guarantees given or securities provided during the financialyear 2016-17 under the provisions of Section 185 / 186 of the Companies Act 2013. Thedetails of investments covered under the provisions of Section 186 of the Act are given innotes 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 futureoperations.
MATERIAL CHANGES & COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY
Pursuant to the extant directions framed by Reserve Bank of India dated. February 262014 on Revitalizing Distressed Assets in the Economy Guidelines on Jointlenders Forum (JLF) and Corrective Action Plan (CAP)' (the JLF Guidelines') thelenders of the Company identified the stress in the account of the Company and reportedthe account of the Company to CRILC and accordingly all the lenders of the Company formeda committee of Joint Lenders' Forum (JLF) on 16th March 2016.
In the JLF meetings for the purpose of working towards revival of the Company theCompany as well as the lenders have amongst other aspects also proactively discussed andworked on aspects of exploring alternate business plans approaching potential investorsand other possibilities. The authorized representatives of the lenders have been presentand privy to all these aspects and participated in the deliberations.
Accordingly in the meeting of the JLF members held on May 13 2016 the lenderscollectively agreed that the SDR Scheme of RBI is a viable option to proceed withrestructuring 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 meetingheld on December 08 2016 had allotted 39612472 equity shares @ Rs. 11.09 per share to theJLF lenders of the Company.
The Company has in place a Nomination Remuneration and Evaluation Policy for theDirectors Key Managerial Personnel and other employees pursuant to the provisions of theAct and SEBI (LODR) Regulations 2015 same is uploaded on the website of the Companywww.usheragro.com
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All transactions entered with related parties during the financial year 2016-17 were onarm's length basis and in ordinary course of business. Further there were no materialrelated party transactions during the year with the Promoters Directors or Key ManagerialPersonnel. The Company has adopted a Related Party policy and procedure which isavailable at company's website.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has laid down set of standard process structures which enables toimplement internal financial control across the organisation and ensure that the same areadequate and operating effectively.
AUDITORS AND AUDITORS' REPORT Statutory Auditors
M/s. Jayesh Sanghrajka & Co.LLP Chartered Accountants Mumbai (Firm RegistrationNo104184W/W100075) were the Statutory Auditors for the FY 2016-17. They have audited theFinancial Statements for the Financial Year 2016-17 and submitted their report which formspart of this report. Notes to the Accounts referred to in the Auditors Report areself-explanatory and therefore do not call for any further comments. There arequalification in the Auditors Report on the Financial Statements of the company.
With reference to the Auditors' qualified opinion matter of emphasis and observationsin the Auditors' Report the explanation/comments of the Board in accordance with theprovisions of Section 134(3)(f) of the Companies Act 2013 are set out in Annexure1' to this Report.
Pursuant to section 204 of the companies act 2013 Company engaged Mr. AnshumanChaturvedi Practising Company secretary Mumbai for conducting Audit for the FinancialYear 2016-17. Mr. Anshuman Chaturvedi has issued Secretarial Audit Report. The report ofthe Secretarial Auditor for the FY 2016-17 in the prescribed form MR-3 is annexed to thisreport 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 notcovered for maintenance of cost records and therefore the Company discontinued the costaudit and consequently the Company has not appointed cost auditor for the financial year2016-17.
In view of the losses incurred by the Company the Company has not paid remuneration toany Director of the Company and there was no increase in the managerial remuneration ofDirectors KMP and Employees under Section 197 of the Companies Act 2013. The percentageincrease in the salaries of employees and so also of managerial personnel and KMP in theprevious financial year and so also in the FY 2016-17 is Nil. There is no increment in theprevious financial year and also in FY 2016-17. The number of permanent employees on therolls of company 140. The Company has in place remuneration policy and if anyremuneration will be paid it will be as per the remuneration policy of the company.
The disclosures to be made under sub-section (3) (m) of Section 134 of the CompaniesAct 2013 read with Rule (8)(3) of the Companies (Accounts) Rules 2014 by your Company areexplained 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 itand continuously making sincere efforts towards conservation of energy. The maintenance ofthe Boiler and Electrical Equipment is carried out regularly with optimum care with thehelp of the technical professionals and modern equipment. The Company is in fact engagedin the continuous process of further energy conservation through improved operational andmaintenance practices. Your Company is having a rice husk fired 1 MW co-generation captivepower plant at Mathura which helped to save the cost of power consumption and alsogenerating 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 Mathurato use its rice husk which is waste product during the production of rice the company hasalso installed 16MW biomass power plant in its subsidiary company M/s Usher Eco Power Ltdto generate the energy through renewal sources of energy.
(iii) the capital investment on energy conservation equipments - NIL (B) TechnologyAbsorption
i. The Company is using latest technology in rice and wheat milling which is wellestablished the world over. The Company has installed new equipment with latest technologyfor the purpose of rice processing. The Company has carried out R&D in house so as toimprove 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 developmentor import substitution.
iii. In case of imported technology (The Company has not imported any technology duringthe last three financial years.)
iv. Expenditure on research & development the company has activelyparticipated in research & development of new technology of Silica extraction withIISc 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. 5.17lakh (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 theCompanies 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
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with Section 134(5) of the Companies Act 2013 your Board of Directorsconfirms that:
a) in the preparation of the annual accounts the applicable Accounting Standards havebeen followed and that there is no material departure;
b) the directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for the year;
c) proper and sufficient care has been taken for maintenance of adequate accountingrecords as provided in the Companies Act 2013 for safeguarding the assets of the Companyand 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 theCompany and that such controls are adequate and were operating effectively; and
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively
The Directors wish to convey their appreciation to all of the Company's employees fortheir enormous personal efforts as well as their collective contribution. The Directorswould also like to thank the shareholders customers dealers suppliers bankersGovernment and all the other business associates for the continuous support given by themto the Company and their confidence in its management.