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Attain leadership in developing, adopting andassimilation state of the art technology forcompetitive advantage.
Cultivate high standards of business ethics andTotal Quality Management for a strongcorporate identity and brand equity
K
K
BOARD OF DIRECTORS
Promotor Directors :
Mr. V. K. Chaturvedi • Managing Director
Mr. Manoj Pathak • Whole Time Director
Non - Executive Independent Directors :
Mr. Vijay Ranchan (IAS Retd.) • Director
Major Gen. (Retd.) Mr. Vinod K. Khanna • Director
Mr. Ajay Prakash Arora • Director
Dr. Shri Prakash Arora • Director
Mr. Pandoo Naig • Director
Mr. E. E. Fernandes • Nominee Director - IDBI Bank Ltd.
AUDITOR
Parekh Shah & Lodha, Chartered Accountant
COMPANY SECRETARY
Mrs. Rutika Pawar
BANKERS
Industrial Development Bank of India Ltd.
Allahabad Bank
United Bank of India
HDFC Bank Ltd.
REGISTERED OFFICE
212, Laxmi Plaza, Laxmi Ind. Estate,New Link Road, Andheri (W),Mumbai - 400 053.Tel. No. : (022) 3068 1174/5/6Fax : (022) 3068 1173/61Email - [email protected] - www.usheragro.com
PLANTS
MATHURA
239, Maholi, Off. Delhi-Agra Highway,
Mathura - 281 004 (U.P.)
Tel. No. : 0565 - 2460421, 2460210/1
Fax : 0565 - 2461068
BUXAR
Plot No. 1898, Chaubeji Ki Chhavani
Sikrol, Dist.: Buxar (Bihar)
Tel. No. : 06183 - 225846
CHATTA, MATHURAPlot No. 158, Gohari,
Delhi-Agra Highway, Chatta,
Dist. : Mathura (U.P.)
REPORT BROWSER Page No.
Financial Highlights 2
Directors’ Report 6
Management Discussion & Analysis 11
Corporate Governance Report 19
Auditors’ Certificate on Corporate Governance 28
Auditors’ Report 29
Balance Sheet 32
Profit & Loss Account 33
Schedules 34
Cash Flow Statement 55
Balance Sheet Abstract 56
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th12 ANNUAL REPORT
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DIRECTORS� REPORT
Dear Members,
Your Directors take pleasure in presenting Twelth Annual Report together with Audited Statement of Accounts for the yearended 30th June, 2008.
1. FINANCIAL RESULTS (Rs. In lacs)
Particulars 30.06.2008 30.06.2007
Sales & Other Income 14,154.27 6,972.71
Profit before Financial Charges & Depreciation 1,910.66 727.45
Less : Financial Charges 195.10 177.12
Cash Profit for the year 1,715.56 550.33
Less : Depreciation 158.79 77.53
Profit before Tax 1,556.77 472.80
Less : Provision for Tax including Fringe Benefit Tax 233.72 68.56
Less : Provision for Deferred tax 53.32 16.24
Less : Short Provision for tax of earlier years. 5.61 -
Profit after Tax 1,264.12 388.00
Balance brought forward from Previous Year 646.28 386.32
Balance available for Appropriation 1,910.40 774.32
Appropriations :
Proposed Dividend 106.31 75.25
Corporate Dividend Tax 18.07 12.79
Transferred to General Reserve 130.00 40.00
Balance carried to Balance Sheet 1,656.02 646.28
During the year your Company was engaged in expansion of business activity at grass root level that is in enhancementof production capacities and consolidation of processes and systems to derive the synergies and optimize the use ofavailable resources.
During the year under review total turnover of the Company was Rs.14,154.27 lacs as against Rs.6,972.71 lacs in theprevious year. The Company earned the profit after tax of Rs.1,264.12 lacs as against Rs. 388.00 lacs in the previousyear. This depicts the growth of 103% and 225.80% in turnover and profitability respectively.
2. APPROPRIATION
DIVIDEND
The Directors are pleased to recommend the dividend at Re.0.50/- per equity share (5% on face value of Rs. 10/- each)for the financial year ended 30th June, 2008. The dividend is proposed to be paid for 21,262,239 equity shares. The totalpayout on account of the dividend including corporate dividend tax will be Rs. 12,437,879/- which represents 9.84% ofthe profit after tax.
TRANSFER TO RESERVES
The Company has transferred Rs. 130 Lacs in the General Reserve during the financial year under review in pursuanceto the provisions of companies ( Transfer of profits to Reserves) Rules, 1975.
3. UTILISATION OF PUBLIC ISSUE PROCEEDS
During the year 2006-07 the Company made an entry in capital market through Initial Public offer (IPO) of the companyresulting in the allotment of 12,012,239 equity shares of Rs. 10 each for cash at a premium of Rs.5 per equity share. Theissue was oversubscribed 2.04 times and the equity shares were listed on the Bombay Stock Exchange Limited w.e.f.6th October 2006.
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The objects of the IPO inter alia were:
• To part finance Wheat Roller Flour Mill project at Mathura.
• To modernize the existing Rice Mill Plant situated at Mathura.
• To set up a Co generation Power project at Mathura for captive utilization.
The fund raised through IPO of the company has been utilized in the following manner:
(Rs. in Lacs)
Funds Raised through IPO
Equity Share Capital 1,201.22
Share Premium 600.61_______________
1,801.83_______________
Utilization of Funds Projected Actual till 30-06-08
Rs. In Lacs Schedule Rs. In Lacs Schedule
Wheat Roller Flour Mill
(including Working Capital) 747.90 Sep. 2006 757.85 Nov. 2006
Modernization of Rice Mill at Mathura 413.75 Jan. 2007 387.44 June 2007
Co. Generation Power Plant 345.18 Jan. 2007 313.51 UnderImplementation
Working Capital for existing operations 175.00 - 181.63 -
Issue Exp 120.00 - 161.40 -
Total 1,801.83 - 1,801.83 -
Pending deployment in power project, the balance amount has been utilized for Working Capital being one of theobjects of the issue
4. PREFERENTIAL OFFER
On 31st May 2007 the Company allotted 40 Lacs equity warrants on preferential basis in aggregate to the followingpersons - Mr. V. K. Chaturvedi (7.50 Lacs equity warrants), Mr. Manoj Pathak (7.50 Lacs equity warrants), the promotersof the Company and Oodnap Agrotech Limited (25 Lacs equity warrants) . The warrant holders be entitled to apply theunderlying equity shares in one or more trenches within 18 months of the date of allotment.
The above preferential issue has been done interalia to partly fund the ongoing rice milling capacity expansion projectof the company at Chatta, near to Mathura (U.P.) The total size of above preferential issue was Rs.1,200 Lacs, out ofwhich the Company has already received Rs. 760.42 Lacs, which has been shown as share application moneyreceived in the schedule 1 of the Balance Sheet.
The above amount has been utilized towards the ongoing rice milling capacity expansion project and for working capitalpurposes being one of the object of the said preferential issue.
5. BOARD OF DIRECTORS
The Board of Directors of the Company comprises of qualified individuals possessing the skills, experience andexpertise necessary to guide the Company. They have contributed immensely for the growth of the Company.
Mr. Ajay Prakash Arora and Mr. Shri Prakash Arora, the Directors of the Company retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offers themselves for reappointment. Your Directors recommend their reappointment.
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6. AUDITORS
M/s Parekh Shah & Lodha, Chartered Accountants, have expressed their consent for the re-appointment as StatutoryAuditors from the conclusion of ensuing Annual General Meeting of the Company and have confirmed that the appointment,if made, will be in accordance with the limits specified under section 224(1B) of the Companies Act, 1956.
7. AUDITORS’ REPORT
The observations made by the Statutory Auditors in the Auditors’ Report are self-explanatory and do not require anyfurther clarification.
8. DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors report that
i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed and there are nomaterial departures;
ii) the Directors have selected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true & fair view of the state of affairs of the Company asat 30th June, 2008 and of the profit of the Company for the year ended on that date.
iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance withthe provision of the Companies Act, 1956 for safeguarding the assets of the Company and preventing and detectingfraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis.
9. ENVIRONMENTAL PROTECTION & POLLUTION CONTROL
Your Company regards preservation of the environment as one of its primary social responsibilities. Accordingly, theCompany places great emphasis on compliance with pollution control norms.
10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
a. Conservation of Energy & Technology Absorption:
i. Energy Conservation Measures taken:
The Company is aware about energy consumption and environmental issues related with it and is continuouslymaking sincere efforts towards conservation of energy. The maintenance of the Boiler and Electrical Equipmentsis carried out regularly with optimum care with the help of the technical professionals and modern equipments.
The Company is in fact engaged in the continuous process of further energy conservation through improvedoperational and maintenance practices.
ii. Additional Investments/Proposals, if any, being implemented for reduction of consumption of energy
During the year, the company has made substantial progress in installing state of the art equipments. Theseequipments are highly efficient and consume less energy for the same productivity. It is also implementing a 1MW husk based power plant. With the present resources, the Company had taken overall measures to reducethe consumption of energy. This was rendered possible through proper maintenance on regular intervals ofPlant & Machinery and other electricals installed in the manufacturing/processing unit of the Company.
iii. Impact of i & ii above for reduction of energy consumption
On completion of the husk based power plant the company would have captive power which alongwith theenergy conservation measures would result in lesser energy consumption.
iv. Total Energy consumption and Energy consumption per unit of production as per Form ‘A’
The additional information as required under the provisions of Section 217(1)(e) of the Companies Act, 1956read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 aregiven as Annexure-I to this report and forms part of it.
b. Technology AbsorptionThe Company is using latest technology in rice and wheat milling which is well established the world over. Underthe modernization project implemented during the year under review the Company has installed new equipmentswith latest technology for the purpose of rice processing. However, the Company has not carried any R&D and hasnot incurred any expenditure during the year as it is not feasible to carry out R&D in house.
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11. DEPOSITS
During the year, the Company did not accept any deposits from the public within the meaning of section 58A of theCompanies Act, 1956.
12. FOREIGN EXCHANGE EARNINGS AND OUTGO
There were no earnings or expenditures in foreign exchange, incurred by the Company during the period under reviewexcept travelling expenses of Rs. 220,234/- (p.y. - Nil).
13. PARTICULARS OF EMPLOYEES
The Company has not paid any remuneration attracting the provisions of section 217(2A) of the Companies Act, 1956read with Companies (Particulars of Employees) Rules, 1975. Hence no information is required to be appended to thisreport in this regard.
14. MANAGEMENT DISCUSSION AND ANALYSIS
A separate report on Management Discussion and Analysis is appended herewith and forms a part of Directors’ Report.
15. CORPORATE GOVERNANCE REPORT
Pursuant to clause 49 of the Listing Agreement with Stock Exchanges, a separate section titled ‘Report on CorporateGovernance’ has been included in this Annual Report along with the certificate on its compliance.
16. HUMAN RESOURCE DEVELOPMENT & INDUSTRIAL RELATIONS
The Company continued to maintain good industrial relations. The Directors would like to record their appreciation forthe sense of commitment displayed by the working staff, officers and executives and acknowledge their contribution tothe growth of the Company.
17. ACKNOWLEDGEMENT
Your Directors wish to place on record their sincere thanks to all Government departments and agencies, Bankers,shareholders and customers for their continued support.
For and on Behalf of the Board
Place : Mumbai V. K. Chaturvedi
Date : 5th December, 2008 Managing Director
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Annexure I to Directors’ ReportFORM ‘A’Disclosure of Particulars with respect to conservation of engergy
2007-08 2006-07A. POWER AND FUEL CONSUMPTION
1. Electricity(a) Purchase- Unit (in KWH) 1,881,880 653,780- Total Amount (in Rs.) 8,577,160 3,321,203- Rate/ Unit (in Rs.) 4.55 5.08(b) Own Generation(I) Through Diesel Generator- Unit (in KWH) 259,956 150,670- Unit Per ltr. of Diesel 3.79 3.81- Rate/ Unit (in Rs.) 9.10 9.06(II) Through Steam Turbine/Generator - Unit (in KWH) - -- Rate/ Unit (in Rs.) - -
2. Coal- Quantity (MTS) - -- Total Cost (in Rs.) - -- Average rate (Rs. Per MT) - -
3. Furnance Oil- Quantity (K lts.) - -- Total Cost (in Rs.) - -- Average rate (Rs. Per lt.) - -
4. Other/Internal Generation- Quantity - -- Total Cost - -- Rate/Unit - -
B. CONSUMPTION PER MT- Electricity (KWH)
Paddy - Rice 14.38 15.69Flour - Atta 30.63 -
- Paddy/Rice - -- Furnance Oil - -- Coal (Kgs.) - -
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COMPANY OVERVIEW
Usher Agro is an agri-processing company focused on basic food segment of the food processing industry. The company’scurrent portfolio of wares includes various forms and varieties of rice and wheat products. In the rice segment, the companyis primarily focused on the non-basmati segment whereas in the wheat business it is into wheat flour (atta), maida and suji.The company will eventually cover the entire value in the rice segment by launching newer products, based on rice, such asbroken rice, puffed rice (locally known as kurmura or murmura) and flat rice (poha).
INDUSTRY SCENARIO
FOOD PROCESSING INDUSTRY
The Food Processing Industry sector in India is one of the largest in terms of production, consumption, export and growthprospects. The Government has accorded it a high priority, with a number of fiscal reliefs and incentives, to encouragecommercialization and value addition to agricultural produce; for minimizing pre/post harvest wastage, generating employmentand export growth. As a result of several policy initiatives undertaken since liberalisation in August 1991, the industry haswitnessed fast growth in most of the segments. As per a recent study on the food processing sector, the turnover of the totalfood market is approximately Rs.250,000 crores (US$ 69.4 billion) out of which value-added food products compriseRs.80,000 crores (US$ 22.2 billion). Since liberalisation in Aug’91 and up-till Feb 2000 proposals for projects of overRs.53,800 crores (US$ 13.4 billion) have been proposed in various segments of the food and agro-processing industry.Besides this, Govt. has also approved proposals for joint ventures, foreign collaboration, industrial licenses and 100%export oriented units envisaging an investment of Rs.19,100 crores (US$ 4.80 billion) during the same period. Out of this,foreign investment is over Rs. 9100 crores (US$ 18.2 billion). Processed food exports were at over Rs.13,500 crores (US$3.2 billion ) in 1998-99. Out of these exports, rice accounted for 46%.
Primary food processing is a major industry with thousands of rice-mills/hullers, flour mills, pulse mills and oil-seed millsin unorganised sector and in the organised sector, there are over 820 flour mills. India produces about 200 million tonnesof different food grains every year.
Primary milling of rice, wheat and pulses is the most important activity in food grains. There are over 91,000 rice hullers and260,000 small flour mills engaged in primary milling. Further there are about 43,000 modernised rice mills/huller-cumshellers and the quantity of rice bran processed for bran-oil extraction stood at 3.4 million tonnes in 1999-2000. Around 820large flourmills in the country convert about 10.5 million tonnes of wheat into wheat products. Also there are 10,000 pulsemills milling about 75% of pulse production of 14 million tonnes in the country. Ninety-Four foreign investment and 100%EOU proposals have been approved in the rice milling sector, with a total investment of about Rs.949 crores (US$ 235million).(Source - Ministry of Food Processing Industries, Annual Report 1999-2000)
RICE INDUSTRY
Rice is the most important staple food for about one-half of the world population and provides over 20 percent of the globalcalorie intake. India is the second largest producer of rice & the fourth largest exporter in the world. India has one of theworld’s biggest harvesting area. Amongst the major rice producing states are West Bengal, Uttar Pradesh, Madhya Pradesh,Orissa and Bihar. There are generally two growing season for rice. The early Kharif growing season lasts from March-Mayto June- October; the mid-Kharif season from June- October to November- February and the Rabi season last from November-February to March-June. Rice is one of the important cereal food crops of India. Rice contributes about 43% of total food grainproduction and 46% of total cereal production in the country.
MANAGEMENT DISCUSSIONS AND ANALYSIS
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Chart : All India Area, Production and Yield of Rice
Surce: Ministry of Agriculture, India
Chart: Share of total production during the year 2006-07 of major states
Source: Ministry of Agriculture, India
0
20
40
60
80
100
120
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Year
Are
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Yie
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Area (million hectares) Production (million tones) Yield (kg per hectare)
Production in %
16%
13%
12%
11%7%5%
5%
3%
28%
West Bengal
Andhra Pradesh
Uttar Pradesh
Punjab
Orissa
Chattisgarh
Bihar
Assam
Other
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Non-basmati Rice is cultivated in almost all the states in India and the sector is largely unorganized. On the contrary, thebasmati rice market is more or less organized and dominated by few big players. The high concentration in basmati rice isprimarily on account of lower production (owing to geographical limitations). Production of basmati rice accounts for lessthan four per cent of total rice produced in India.
WHEAT INDUSTRY
India is the world’s second largest wheat producer behind China. India’s wheat production in 2007 was 74.89 milliontonnes, a 14% increase from 65.76 million tonnes in 2003. In 2002, India exported a total of 2.6 million tonnes of wheat butin 2006, India merely exported 745,560 tonnes of wheat.
Major wheat growing states in India are Uttar Pradesh, Punjab, Haryana, Rajasthan, Madhya Pradesh, Gujarat and Bihar.Given that wheat is a temperature-sensitive crop (i.e. it requires low temperatures) most of the wheat in India is primarilycultivated in the northern parts of the country. In comparison, most of the other parts of the country are tropical. As a result, ithas a narrow geographic coverage under cultivation as compared to rice or pulses.
Chart : All India Area, Production and Yield of Wheat
Source: Ministry of Agriculture, India* Advance estimates for the year
Chart : Share of total production during the year 2006-07 of major states
Source: Ministry of Agriculture, India
0.00
20.00
40.00
60.00
80.00
100.00
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08*
Year
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Yie
ldArea (in million hectares) Production (in million tonnes) Yield (kg. Per hectare)
Production in %
33%
19%13%
10%
9%
5%
11%Uttar Pradesh
Punjab
Haryana
Madhya Pradesh
Rajasthan
Bihar
Other
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POWER GENERATION INDUSTRY
Energy is a vital building block of economic growth. In an attempt to meet the demands of a developing nation, the Indianenergy sector has witnessed a speedy development. Today, India has one of the main potentials for the efficient use ofrenewable energy. There is a significant potential in India for production of power from renewable energy sources—wind,small hydro, biomass, and solar energy.
The importance and potential of Biomass Power can be envisaged from following chart:
Sources Units Potential (India) Achievement Potential (U.P.) Achievement
Wind MW 45,000 2,483.00 0 0
Hydro (upto 25 mw) MW 15,000 1,603.60 167 21.5
Biomass Power MW 16,000 303.20 1,400 20
Cogeneration MW 3,500 422.00 1,000 150
Waste to Energy MW 2,705 41.43 176 8.0
Solar PV MW/km2 20 29.87 MW 20 3.28 MW
The Rice husk, a crucial bye product of rice milling process can be used to generate the ‘Green Power’ lured by CarbonCredit benefits. India grows 90 mn tones rice and since husk is 20% of grain’s weight, we have considerably 18 mn tonescheap, eco friendly and widely available feedstock. When the United Nations decided to give carbon credits to biomasspower plants to help them break even, it became a dream opportunity for the companies like Usher Agro. India now has morethan 300 husk based power plants with links to state grids. Around 40 plants have started generating carbon credits.
The Rice husk based biomass power industry brings about following benefits :-
• Good response from captive power producers using rice husk as feed stock• State of Uttar Pradesh has more than 1,200 rice mills in operation• Central ministry is providing attractive subsidies.• Income tax benefit, as depreciation, is available to power producer.• Investment opportunities are to the tune of Rs 5,600 Crs.• CDM benefits could be availed.
OPERATIONAL OVERVIEW
During the year the Company has improved operational efficiencies and levels accross the board and with our best effortsyour Company is being able to achieve the highest operational growth in the history.
The last financial year was the first complete financial year for the new wheat milling capacity and the said wheat millingfacilities have been 60% plus capacity utilisation in the very first year of the operation.
One of the rice milling front also the Company has achieved impresive to optimum 95% capacity utilisation level as comparedto only 65% in the immediate previous financial year.
FINANCIAL OVERVIEW
The Company has achieved another two milestones in the previous financial year :-
• Networth has crossed Rs. 5,006/- lacs.
• Turnover has crossed benchmark level of 10,000/- lacs.
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We have continued to maintain excellent growth year-on-year. You will indeed be glad to note that the year under review wascharacterized by a significant improvement in operational and financial performance of the Company attaining all time highphysical and financial levels:
• Top line (total income) growth by 103 %, rising to Rs.14,154 lacs from Rs.6,972 lacs in the previous year.• Bottom line (net profit after tax) growth of 225.8%, reaching Rs.1,264 lacs from Rs.388 lacs in the previous year.• Highest ever production of 1,007,041 quintals, an increase of 84.24% over the previous year’s generation of
546,588 quintals.• The Earning per share of the company (EPS) has increase from Rs. 2.58 in year 2007 to Rs. 7.05 in year 2008.• The Net Worth of the company increased to Rs.5,006/- lacs from Rs. 3,308/- lacs in the previous year.
OUTLOOK FOR THE YEAR AHEAD
CAPACITY EXPANSION
Your Company plans to add substantially to the installed capacities in both Rice and Wheat segment. We are fully preparedto achieve this target and it has already taken concrete steps towards that.
Rice Milling Plant at Chhata, Mathura
We are in the process of setting up another rice milling plant at Chhata in Mathura which is approximately 30 kms. from ourexisting rice milling plant. The proposed expansion is in line with our strategy to continuously expand our capacities. Thesaid plant would have an installed capacity of 194,400 MTPA and it would be operational by January 2009. Once fullyoperational the combined installed capacity of all three rice milling plants would be 252,000 MTPA.
Wheat Milling Plant at Chhata, Mathura
We propose to set up a new wheat milling plant at Chhata, Mathura with an installed capacity of 301,125 MTPA. The saidplant would be operational by January 2010. Once fully operational the combined installed capacity of both the wheat millingplants would be 376,125 MTPA.
Both the projects being located adjacent to the existing works will reap the benefit of optimum utilization of the administrativeand operational task force. The aforesaid expansion plans are expected to culminate in fiscal 2009-10 catapulting UsherAgro into the big league of basic food (wheat and rice) millers in India. At full capacity, the company will be in a position toachieve a turnover of around Rs.1,000 crore.
As a part of our overall business strategy, we aim to be among the top three players in the rice milling segment and thelargest wheat flour miller in the next three years.
DIVERSIFIED GROWTH FOR VALUE-CREATION
As Usher Agro, we are constantly exploring opportunities, both within and outside the realms of our business. Our strategyto focus on non-basmati rice is also an important one. Creating large scale in the non-basmati rice gives us the opportunityto explore the by-products (bran and husk), both of which are produced in significant quantities during the milling process.
BIOMASS BASED POWER GENERATION
Your company has taken concrete steps to diversify into the area of clean, non-conventional and renewable energy sourcesby setting up a 16MW rice husk based biomass cogeneration power plant. The Rice Husk, the major by product of the ricemilling process, has high calorific value, which can be harnessed to generate non-conventional energy. In this direction, wehave promoted a power generation company – Usher Eco Power Limited that will produce power using rice husk (to besourced from Usher Agro) as the feedstock. The project outlay will be funded by term loan by State Bank of India and theproceeds of Initial Public Offering (IPO). The Company has approached the regulatory authorities for vetting of the offerdocument to be issued to the public.
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LOGISTICS SERVICES
Opportunities for investment exist not only in food production, but also in infrastructure development (in terms of procurement,storage and transportation), marketing, inspection and testing services and technology development. The sector, is therefore,likely to be among the leading growth drivers of the incomes in the hinterland, thereby driving the overall economic growthfurther.
VALUE ADDED FOOD PRODUCTS
In the process of conversion from paddy, Broken Rice, Rice Husk and Rice Bran are generated as by products. While ricebran is used for oil extraction and in feed formulations, the husk is generally used as a fuel, for generating heat for parboilingof paddy or other applications.
There are several nascent segments which are likely to acquire significant scale over a period of time such as Ready-to-Eatfoods, convenience foods. We are witnessing dramatic changes in food production methods, consumption patterns anddemographics in India as well as in countries of the world. We will also explore the opportunity in the sector by utilizing theby products of the rice milling viz. Rice bran and Broken Rice to produce the value added products.
From the nutritional point of view, broken rice is as good as whole rice itself. However, owing to an admixture of broken ricewith grit, stones and clay particles, it has very low economic value. Therefore, broken rice is mostly used as a part of animalfeed. However, if improved for quality it can be utilized and marketed straightway for preparation of idli & dosa and other suchpreparation in which rice flour or wet-ground rice paste is needed.
The company, in future, is also planning to launch value-added rice products such as crushed rice flakes (known as pohain local parlance) or puffed rice (also known as kurmura or murmura and is predominantly used in a famous Indian fast foodbhel).
The Rice Bran can produce edible oil if processed within short span of time. Rice Bran oil, popularly known as “Health Oil”is considered to be the best oil for heart having fat reduction qualities. Usher Agro will have a capacity to mill around 1000tonnes of paddy per day and will therefore be in a position to utilize rice bran as a source of edible oil in a far superior manner,i.e. by either setting up its own rice bran oil extraction plant or attaining quick turnaround in supply of rice bran to the nearbyoil extraction units.
OPPORTUNITIES
FOOD BUSINESS
Government emphasis on facilitating its rapid growth and positive demand side drivers are all contributing to the transformationof Indian Agribusiness, from a traditional, low-value supply- driven sector to a vibrant, high-value demand-driven sector.
The market size of the Food & Agribusiness sector is estimated at over US$ 230 bn and is expected to double by 2015, onthe back of demand driven by increasingly younger population with higher disposable incomes and changing demographicsleading to increasing demand for processed, value-added foods and higher share of out-of-home food consumption.
POWER GENERATION
Besides enjoying cost savings out of the economies of large scale by creating the gigantic production capacities Usher Agrowill save on the power cost substantially. The 1MW biomass based cogeneration captive power plant is operational andhave partly replaced diesel generated power, reducing the total cost of production.
CDM is slowly emerging as a significant source of additional financial inflows for the developing economies like India andUsher Agro will also gain the premium by generating eco friendly captive power and exploring the hot profit opportunity bycarbon credits.
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RISKS AND CONCERNS
Your Company has planned approach for identifying and managing of internal and external risks. The risk managementprocess involves ranking of risks, implementing the controls to manage them and monitoring their effectiveness. Theidentified area for the risk management is operations. The steps have been taken by the management to control theprocurement cost for the raw material and to reduce the production losses.
HUMAN RESOURCE DEVELOPMENT
To support this growth, the most important element is manpower. Your Company is giving equal importance to develop theintellectual infrastructure by building the talent pool at operational level.
Organised RetailAn Ocean of Opportunities & It’s Impact on the
Agro Processing SectorIndia’s retail market, estimated to reach US$ 450 billion in sales by 2015, despite its constraints and challenges, is apromising consumer market and offers a great opportunity for organised retail. Innovation is going to be the main driver ofsustainable growth in retail sector of India. Consumer markets in India are currently in a transformational stage. Emergenceof hyper and super markets are trying to provide customer with 3V’s – Value, Variety and Volume.
Some of names in this list include domestic business houses like Reliance (Mukesh Ambani-led), the Tatas, and the AdityaBirla group. International players eyeing to corner a significant pie of this market include Walmart (in a tie-up with the BhartiMittal group), Carrefour and UK-based Tesco. Those already present and rapidly expanding include – the Future Group(erstwhile Pantaloon group), Subhiksha, Spinach, and D-Mart, among others.
Retail of Food & Grocery
Of all the segments in the retail market, the single most important is the food and grocery segment. This segment accountsfor a phenomenal 74% of total retail sales (i.e. of both the organized and the unorganized sector).
Food and grocery is the second-largest segment of the retail industry and also it is the least organized. The potential for newentrants in this segment is enormous, particularly in untapped markets like rural and semi-urban areas.
According to a recent report by Ernst & Young, food and grocery account for almost 54% (US$ 152 billion) of the total Indianannual retail business. However, food retail continues to be dominated by small local stores in the unorganized sector. Theorganized food retail sector is expected to grow by 30% to become worth US$ 2.4 billion in 2010.
It is the foods and grocery segment that is likely to engine the growth of the overall organized retail market in India. And, asa company that has developed a strong presence in some of the aforesaid segments, Usher Agro is likely to benefitimmensely, going forward. This is because the Companies like Usher Agro are at the starting point in the Grocery RetailChain, being the source station for Retail Stores, providing supply chain and Logistics management and resultantly actingas a complete inventory management solution.
Your Company has also initiated to be part of this revolution by supplying its products to “Spinach ,” a food and groceryconvenience retail stores chain owned by Wadhawan Food Retail (WFRL), part of Delhi-based Housing Finance majorDHFL.
• Experienced Promoters
Our promoters are successfully running rice-milling business for last twelve years. We have long-term vision for ourbusiness. We are a profit making Company since the commencement of our business.
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• Recognition from Government and external authorities
In the Year 2003-04 we have supplied largest quantity of Rice i.e. 5,820 MT to U.P. state Government in Agra regionunder Levy Scheme of State Government of Uttar Pradesh for which, we have been awarded a recognition certificateby Regional Food Controller (RFC), Agra Region.
We have also been awarded with ISO 9001:2000 certification for Quality Management System and Hazard Analysisand Critical Control Point (HACCP) Management system certificate from IIC Korea.
From Buxar station an outward train load with Rice was dispatched, which was from Buxar plant to Mathura and forwhich we have been awarded a certificate by the railway Authorities of Buxar.
• Automated and Modernised Plant
Our both the plants at Mathura and Buxar (Bihar) are fully automated and modernized plant with an installedcapacity of 10,800 MTPA and 46,800 MTPA respectively. Modernized rice milling activity has improved its efficiency toreduce the breakage of rice and improve the yield.
• Locational Advantage
Our Rice Milling Plants and Wheat Flour Mill are located in Uttar Pradesh and Bihar which are amongst top fivestates in production of paddy in India The location of Mathura and Buxar plants are beneficial in terms of easyaccessibility and transportation. We have an adequate infrastructure with regard to land, utilities and space forstorage, etc
• Popular Brand
Our Company has also Trade Mark registration for our Brand “ RASOI RAAJA ” for our Rice and Wheat products.
19
1. Company’s Philosophy on Corporate Governance
The Company’s philosophy on corporate governance is to ensure that information disclosure to present and potentialinvestor is maximized and to ensure that the directors, employees and all concerned are fully committed to maximizinglong term value of their Shareholders and the Company. Usher’s Corporate Governance philosophy is based on ethicalvalues including honesty, integrity, justice, transparency and responsiveness to stakeholders. Your Company recognizesthat good Corporate Governance is a continuing exercise and reiterates its commitment to pursue highest standards ofCorporate Governance in overall interest of the Company and its stakeholders.
2. Board of Directors
The business of the Company is managed by the Board of Directors. The Board formulates the strategy, regularlyreviews the performance of the Company and ensures that the previously agreed objectives are met on a consistentbasis.
a) Composition of the Board
As on June 30, 2008, Board of Directors of the Company consists of 8 Directors, with a mix of Executive and Non-executive Directors. The Board consists of 2 Executive Directors and 6 Non-Executive Directors. All the 6 Non-executive Directors are Independent Directors. The composition of the Board is in conformity with Clause 49 of theListing Agreement.
Further, Independent Directors do not have any material pecuniary relationship or transactions with the Company,its promoters, its management or its associates, which in the judgment of the Board may affect independence ofjudgment of the Director, apart from the sitting fees received by them for attending the meetings of the Board. Further,as mandated by Clause 49, none of the Directors are members of more than ten committees of Boards nor are theychairman of more than five committees in which they are members.
The composition of the Directors on the Board and related information as on 30th June 2008 is as under :
Directors Executive/ No. of the Whether No. of outside No. ofNon-executive/ Board Meetings last AGM Director CommitteeIndependent Attended Attended ships held Membership
Promoter Directors
Mr. V.K. Chaturvedi Managing Directorand Executive Director 5 Yes 7 2
Mr. Manoj Pathak Whole time Directorand Executive Director 5 Yes 6 0
Non-Executive andIndependent Directors
Mr Vijay Ranchan Independent and(Retd. IAS officer) Non-Executive 5 No 4 3
Mr A.P. Arora Independent andNon-Executive 5 Yes 1 5
Mr S.P. Arora Independent andNon-Executive 5 No 1 1
Mr Vinod K. Khanna, Independent and[Major Gen. (Retd.)] Non-Executive 4 No 2 1
Mr. E.E. Fernandes Independent andNon-Executive 4 No Nil 1
Mr. Pandoo Naig Independent andNon-Executive 4 Yes 12 3
CORPORATE GOVERNANCE REPORT
20
Disclosure Regarding Appointment & Re appointment of Directors
Mr. A. P. Arora and Mr. S. P. Arora are Directors who shall be retiring in this AGM, being eligible have offered themselvesfor re-appointment. Brief particulars of these directors are as follows :
Particulars Mr. A. P. Arora Mr. S. P. Arora
Father’s Name Mr. Madho Prasad Arora Mr. Jagat Prasad Arora
Date of Birth 08.05.1941 11.03.1940
Date of Appointment 20.06.2008 18.08.2003
Address 305, Wing 3-B, Dheeraj Enclave, 503-504, C Wing, Dheeraj Enclave, BorivaliBorivali (East), Mumbai – 66. (East), Mumbai – 66.
Designation Non-executive Independent Director Non-executive Independent Director
Qualification & Experience He holds a Master’s Degree in He is a Bachelor in Science and is aCommerce (M. Com) and is also qualified Veterinarian With over 35qualified as a Certified Associate of years of working experiencethe Indian Institute of Bankers (CAIIB). with prominent companies like Pfizer.He joined the Central Bank of India in He brings to the Company his strategic1963 and retired in 2001. During his inputs and informed decision-making.tenure with the Central Bank of Indiahe has worked in various capacitieslike Senior Internal Auditor,Investigations/Enquiry officer,Branch Manager, Chief Managerin Branches and Zonal officer.He has been the principal of trainingcolleagues for banking operations.
Salary etc. NIL NIL
Companies in • Usher Eco Power Limited • Bapa Consultants Private Limitedwhich holdsDirectorship
Membership of Usher Agro Limited Usher Agro LimitedCommittee Audit Committee- Chairman Shareholder’s Grievanceof Board of Directors Shareholder’s Grievance Committee – Chairmanof theCompany Committee – Member
Usher Eco Power LimitedRemuneration Committee – ChairmanShareholder’s Grievance Committee – MemberAudit Committee – Member
Equity Shares held 389 NIL
The Board Meetings held during the year:
During the year under review, the Board of Directors met five (5) times. The meetings were held on July 31 2007;October31, 2007; November 17, 2007; January 31, 2008; April 30, 2008; respectively.
Information Supplied to the Board
The Board was supplied with all relevant information and supporting papers, which were required, to transact thebusiness specified in the agenda of Board Meetings held.
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3. Audit Committee
The Board has constituted the Audit Committee, which deals in all matters relating to financial reporting and internalcontrols. The minutes of the Audit Committee meeting are placed before the Board for information.
The primary objective of the Audit Committee is to monitor and effectively supervise the Company’s financial reportingprocess with a view to provide accurate, timely and proper disclosures and the integrity and quality of the financialreporting, review of the quarterly and annual financial statements, the adequacy of internal control systems, the financialand risk management policies etc.
The Committee at present comprises of all non-executive and independent directors. All the members of the Committeehave good financial knowledge. The members of the Committee are Mr. E.E. Fernandes, Mr. Vijay Ranchan and Mr. A. P.Arora, a non-executive independent director as the Chairman of the Committee.
Meeting held during the year and the Attendance thereat:
During the year 5 (five) Audit Committee Meeting were held on July 31, 2007; October 31, 2007; November 17, 2007;January 31, 2008; April 30, 2008.
The attendance of members of the Audit Committee at these Meetings is as follow:
Sr. No. Director No. of Meetings Attended
1 Mr. A.P. Arora 5
2 Mr. Vijay Ranchan 4
3 Mr. E.E. Fernandes 4
a. The Chairman of the Audit Committee was present at the Annual General Meeting of the company held on 15th
December 2007.
b. Mrs. Rutika Pawar, Company Secretary acts as the Secretary of the Committee. Mr. V.K. Chaturvedi, ManagingDirector and Mr. Amit Sakhlecha from Parekh Shah & Lodha as the Statutory Auditor attended the meeting of theCommittee as the invitees.
4. Remuneration of Directors
Remuneration Policy
The remuneration paid to Promoter Director(s) is approved by the shareholders in the General Meeting. The PromoterDirector(s) and interested Director (s) do not participate in the proceedings of the said business. The remunerationstructure comprises Basic Salary, Perquisites and Allowances, payment and expenses incurred on perquisites. Thenon-executive Directors do not draw any remuneration from the Company except sitting fees for attending each meetingof the Board.
At present the Company does not have any Employee Stock Option Scheme (ESOS).
Remuneration Committee
At present the Company does not have any Remuneration Committee.
Shareholdings of directors
All directors have disclosed their shareholding in the company. Details of Shareholding of Director as on June 30, 2008is as follows:
Name of the Director Shares
Mr. V.K. Chaturvedi 3856340
Mr. Manoj Pathak 2534060
Mr. Vijay Ranchan NIL
Mr. A.P. Arora 389
Mr. S.P. Arora NIL
Mr. Vinod Kumar Khanna NIL
Mr. E.E. Fernandes NIL
22
5. Shareholders’ Grievance Committee
Composition & Terms of reference
The Shareholders’ Grievance committee of the company comprises of three non-executive directors namely, Mr A.P.Arora, Mr V. K. Khanna and Mr. S. P. Arora as the Chairman of the Committee.
The Board has constituted the Shareholders’ Grievance committee as per the guidelines set out in listing agreementswith the Stock Exchanges that inter alia include redressing investors’ complaints regarding transfer of shares, non-receipt of any correspondence from the Company etc. The Committee also oversees the performance of the Registrar& Transfer Agents and recommends measures for the overall improvement of the quality of the investor services.
Mrs. Rutika Pawar, Company Secretary acts as the Secretary of the Committee.
Meeting held during the year and the Attendance thereat:
During the year 3 (Three) Shareholder Grievance Committee Meetings were held on July 31, 2007; October31, 2007;April30, 2008.
The attendance of members of the Shareholder Grievance Committee at these Meetings is as follow:
Sr. No. Director Category No. of Meetings Attended
1 Mr. S.P. Arora Chairman 3
2 Mr. A.P. Arora Member 3
3 Mr. V.K. Khanna Member 2
CEO Certification
Mr. V.K. Chaturvedi, Managing Director has certified to the Board that:
(a) He has reviewed financial statements and the cash flow statement for the year and that to the best of hisknowledge and belief:
(i) These statement do not contain any materially untrue statement or omit any material fact or contain statementsthat might be misleading;
(ii) These statements together present a true and fair view of the company’s affairs and are in compliance withexisting accounting standards, applicable laws and regulations.
(b) There are, to the best of his knowledge and belief, no transactions entered into by the company during the yearwhich are fraudulent, illegal or violative of the company’s code of conduct.
(c) He accepts responsibility for establishing and maintaining internal controls and that he has evaluated theeffectiveness of the internal control systems of the company and he has disclosed to the auditors and the AuditCommittee, deficiencies in the design or operation of internal controls, if any, of which he is aware and the stepshe has taken or propose to take to rectify these deficiencies.
(d) He has indicated to the auditors and the Audit committee.
(i) Significant changes in internal control during the year, if any;
(ii) Significant changes in accounting policies during the year, if any and that the same have been disclosed inthe notes to the financial statement; and
(iii) Instance of significant fraud of which he has become aware and the involvement therein, if any, of themanagement or an employee having a significant role in the company’s internal control system.
The above certificate was placed before the Board Meeting held on 5th December, 2008.
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6. General Body Meetings
Details of Annual General Meetings held during last three financial years:
Year Date Venue Time Summary of Special Business conducted
2007 15.12.2007 Nandkripa Banquet Hall, 11.00 a.m. • Appointment of Shri Pandoo Naig as aFour Bungalow Road, Director of the companyMain Market, Andheri (West), • Appointment of AuditorsMumbai-400 058 • Increase in Authorized Capital of the
company• Qualified Institutions Placement (QIP)• Authority under Section 293(1)(d)• Authority under Section 293(1)(a)
2006 29.12.2006 6th Floor, Subkuch Super 10.00 a.m. • Consent under section 293(1)(a)Market, Near Kasturi Park, • Consent to borrow fund under sectionLinking Road, Malad (West), • Resolution under section 81(1A)Mumbai – 400 064. • Increase in remuneration of Mr. V.K.
Chaturvedi, Managing DirectorIncrease in remuneration of Mr. ManojPathak, Wholetime Director
2005 17.11.2005 C-617, Hilton Tower, 03:00 p.m. • Increase in Authorised Capital of thePump House, Andheri (East), CompanyMumbai 400 093. • Issue of Share by way of Public Issue
• Change in Memorandum & Article ofAssociation of the Company
7. DISCLOSURES
a) There was no such materially significant related party transaction(s) with its promoters, the directors or themanagement their relatives, etc. that may have the potential conflict with the interest of the company at large. Theother related party transactions are given in the notes of accounts annexed to and forming the part of Balance sheetand Profit and Loss Account of the Company.
b) Your company has followed all relevant Accounting Standards while preparing the financial statement.
c) Your company has a comprehensive risk management policy and the same is periodically reviewed by the Board ofDirectors.
d) During the last three years, there were no instance of imposition of penalties, strictures by Stock Exchange or SEBIor any statutory authority on the company on any matter related to capital markets, hence no details thereof could beprovided.
e) Your company is fully compliant with the mandatory requirements of the Clause 49 of the Listing Agreement. Thecompany has not adopted the non-mandatory requirement as prescribed in Annexure I D to Clause 49 of the ListingAgreement.
8. MEANS OF COMMUNICATION
i) Quarterly results of the Company are published regularly in Business Standard and Sakal newspapers and alsodisplayed on the website of the Company www.usheragro.com shortly after its submission to the Stock Exchange.
ii) Management Discussion and Analysis Report has been included in this Annual Report and forms the part of thisAnnual Report being sent to the shareholders of the Company.
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9. GENERAL SHAREHOLDER INFORMATION
AGM Details
Day & Date 31st December 2008
Time 11 a.m.
Venue NandKripa Hall, Four Bungalow, Andheri West Mumbai 400053
Financial year of the company: July 1 to June 30 each year
Calendar for the financial year ending 30 th June 2009
Events T entative time frame
Financial Reporting for the first quarter ended 30th September 2009 31st October, 2009 (Actual)
Financial Reporting for the second quarter ending 31st December 2009 Last week of January 2009
Financial Reporting for the third quarter ending 31st March 2009 Last week of April, 2009
Financial Reporting for the fourth quarter ending 30th June 2009 Last week of July, 2009
Annual General Meeting for the year ended 30th June 2009 December 2009
Book Closure Date 27.12.2008 TO 31.12.2008
(Both days inclusive)
Dividend Payment
The Directors are pleased to recommend the dividend at Re.0.50/- per equity share (5% on face value of Rs. 10/- each)
for the financial year ended 30th June, 2008. The dividend is proposed to be paid for 21,262,239 equity shares allotted
during the year. The total payout on account of the dividend including corporate dividend tax will be Rs. 12,437,879/-
which represents 9.84% of the profit after tax. The dividend, as recommended by the Board, if sanctioned at the Meeting,
will be paid on or after 31st December 2008 to those members or their mandates whose names are registered on the
Company’s Register of members:
a. As beneficial owners as at the end of business on 26th December, 2008 as per the lists to be furnished by national
Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) in respect of the
shares held in electronic form, and
b. as Members in the Register of members of the Company after giving effect to valid share transfers in physical form
lodged with the Company on or before 26th December, 2008.
Listing on the stock exchanges
The company is presently listed on Bombay Stock Exchange Limited , Phiroz Jeejeebhoy Towers, Dalal Street,
Mumbai - 400 001.
Listing Fees
The Company has paid the listing fees for the year 2008-09 to the Stock Exchange wherein the equity shares of the
Company are listed.
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Stock Codes
ISIN (for equity shares) INE 235G01011
BSE Stock Code 532765
Market price Date and Performance in comparison to BSE Sensex
Month Share Price at BSE BSE Sensex
Jul 07 51.90 15550.99
Aug 07 60.45 15318.60
Sep 07 59.40 17291.10
Oct 07 76.60 19837.99
Nov 07 71.75 19363.19
Dec 07 132.55 20286.99
Jan 08 162.00 17648.71
Feb 08 181.65 17578.72
Mar 08 165.85 15644.44
Apr 08 167.05 17287.31
May 08 147.80 16415.57
Jun 08 129.00 13461.60
Company’s Share Price MovementVis a Vis BSE Sensex
Registrar and Share Transfer Agents
The Company has appointed M/s Investor Services of India Limited (ISIL) as its Registrar and Transfer Agent.
Name Investor Services of India Limited (ISIL)
Contact Person Mr. Nasir Nomani
Address IDBI Building, 2nd Floor A Wing, Sector 11, Plot nos 39, 40, 41, Rajiv Gandhi Marg,CBD-Belapur, Navi Mumbai- 400 614
Telephone No. +91-22 2757 9636 to 46 • Fax No. : +91-22 2757 9645
E mail [email protected]
Usher Share Prices vs BSE Sensex
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Share Transfer System
The work related to share transfer in terms of both physical and electronic mode is being dealt at single point withInvestor Services of India Limited. After the completion of preliminary formalities of transfer/transmission by the ShareTransfer Agent, the approval of transfer of shares in the physical form is given by the share Transfer Committee.
The Share transfer committee, constituted specifically for this purpose, meets periodically as the need arise to approvethe Share Transfer etc.
The Company has complied with the provisions of the requisite guidelines issued by the regulatory authorities inrespect of the transfer of shares and other related matters.
Investor Services of India Limited (ISIL) has been appointed as Registrar & Share Transfer Agent for processing,transfer, sub-division, consolidation, splitting of shares and for rendering depository services such as dematerializationand rematerialisation of the company’s shares.
The share transfers, which are received in physical form, are processed and the share certificates returned with in 15days of lodgment, subject to the documents being valid and complete in all respect.
Shareholders/investors are requested to forward share transfer documents, dematerialization requests and otherrelated correspondence directly to Investor Services of India Limited (ISIL) at the above address for speedy response.
Distribution of Holding as on 30 th June 2008
No. of Equity Shares held Shareholders Shareholding
Number % to total Shares % to total
Upto 5000 2903 80.59 491238 2.73
5001-10000 350 9.72 269976 1.50
10001-20000 154 4.28 240451 1.33
20001-30000 59 1.64 154609 0.86
30001-40000 23 0.64 79689 0.44
40001-50000 18 0.50 85225 0.47
50001-100000 38 1.05 290182 1.61
100001 and above 57 1.58 16400869 91.05
Total 3602 100 18012239 100.00
Shareholding Pattern as on 30 th June 2008
Sl. No. Category of No. of Total % of totalShareholder Shareholders no. of shares shareholding
1 Promoter and Promoter Group 3 6722500 37.32
2 Financial Institutions / Banks 2 4589 0.02548
3 Foreign Institutional Investors 6 2607823 14.48
4 Bodies Corporate 161 2755116 15.30
5 Indian Public 3430 5922211 32.88
Total 3602 18012239 100.00
Outstanding Convertible Warrants
On 31st May 2007 the Company allotted 40 Lacs equity warrants in aggregate to Mr V.K. Chaturvedi and Mr Manoj Pathak,the promoters of the Company and Oodnap Agrotech Limited. The warrant holders shall be entitled to apply the underlyingequity shares in one or more tranches within 18 months of the date of allotment.
27
Plant Locations
a) Mathura Plant b) Buxar Plant
239, Maholi, Off. Delhi-Agra Highway, 1898, Chaubeji ki Chhawani
Mathura - 281004, U.P. Village-Sikrol, Dist-Buxar Bihar
Tel.: 0565 - 2460421, 2460210/1 Tel.: 06183-225846
Fax: 0565 - 2461068
c) Chatta (U.P.) Plant
Plot No. 158, Gohari,Delhi - Agra Highway, Chatta,Dist. : Mathura U.P
Address for correspondence
Particular Registrar & Share Transfer Agent Company
Place of Contact Investor Services of India Limited Usher Agro Limited
IDBI Building, 2nd Floor A Wing, Sector 11, 212, Laxmi Plaza, Laxmi Industrial Estate,
Plot nos 39, 40, 41, Rajiv Gandhi Marg, New Link Road, Andheri (West),
CBD-Belapur, Navi Mumbai- 400 614 Mumbai 400 053
Contact Person Mr. Nasir Nomani Mrs. Rutika Pawar
Telephone Nos. +91-22 2757 9636 to 46 +91-22 30681174/5/6
Fax No. +91-22 2757 9645 +91-22 30681173/61
E mail [email protected] [email protected]
For and on Behalf of the Board
Place: Mumbai V. K. Chaturvedi
Date : 5th December 2008 Managing Director
28
AUDITOR�S CERTIFICATE ON CORPORATE GOVERNANCE
To the Shareholders of
USHER AGRO LIMITED
We have examined the compliance of Corporate Governance by Usher Agro Limited for the year ended on 30th June, 2008,as stipulated in the clause 49 of the Listing Agreements of the said company with the Stock Exchanges.
The Compliance of the conditions of Corporate Governance is the responsibility of Management. Our examination waslimited to procedures and implementations thereof, adopted by the company to ensure compliance with the conditions ofCorporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the company.
We further state that such compliance is neither an assurance as to future viability of the company nor the effectiveness withwhich the management has conducted the affairs of the company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the companyhas complied within all material respect the conditions of Corporate Governance, as stipulated in the above mentionedListing Agreements and that no investor grievances are pending for a period exceeding one month against the company asper the records maintained by the company.
For PAREKH SHAH & LODHA Chartered Accountants
Place : Mumbai. Amit R. SaklechaDate : 5
th December, 2008 (Partner)
M. No. 401133
29
To,
The Members of USHER AGRO LTD.
We have audited the attached Balance Sheet of USHER AGRO LTD., as at 30th June, 2008 and also the annexed CashFlow Statement and Profit & Loss Account for the year ended on that date. These financial statements are the responsibilityof the Company’s management. Our responsibility is to express an opinion on this financial statement based on our audit.
1. We conducted our audit in accordance with the auditing standards generally accepted in India. These Standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements arefree from any material misstatement. An audit includes, examining on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes, assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall presentation of the financial statements.We believe that our audit provides a reasonable basis for our opinion.
2. As required by the Companies (Auditor’s Report) Order, 2003 (as amended) issued by the Central Government interms of Sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on thematters specified in paragraphs 4 and 5 of the said Order.
3. Further to our comments in the Annexure referred on in paragraph (2) above, we report that:
a) We have obtained all the information and explanation, which to the best of our knowledge and belief werenecessary for the purpose of our audit.
b) In our opinion, proper Books of Account as required by law have been kept by the Company so far as appear fromour examination of the books.
c) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books ofaccounts.
d) In our opinion, the Balance Sheet and Profit and Loss Account comply with the Accounting Standards referred toin section 211(3C) of the Companies Act, 1956.
e) In our opinion and based on information and according to explanation given to us, none of the directors aredisqualified as on 30th June, 2008 from being appointed as directors in terms of clause (g) of subsection (1) ofsection 274 of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to the explanations given to us, the said BalanceSheet and Profit and Loss account read with the notes thereon and attached thereto give the information requiredby the Companies Act, 1956 the manner so required and also give a true and fair view:
i) in the case of the Balance Sheet, of the state of affairs of the Company as at 30th June, 2008 and
ii) in the case of Profit & Loss Account, of the PROFIT for the year ended on that date.
iii) in case of Cash Flow Statement, of the cash flows for the year ended on that date.
For PAREKH SHAH & LODHAChartered Accountants
Amit R. SaklechaPlace : Mumbai (Partner)Date : 5th December, 2008 M. No. : 401133
AUDITOR�S REPORT
30
Referred to in paragraph 2 of our report of even date.
1. In respect of its fixed assets :
a) The Company has maintained proper records to show full particulars including quantitative details and situationof fixed assets on the basis of available information.
b) We were given to understand that the management has physically verified the fixed assets during the year andthis revealed no material discrepancies during such verification between book records and physical balance. Inour opinion the frequency of the verification is reasonable, having regard to the size of the Company and the natureof its business.
(c) In our opinion the Company has not disposed off any major asset/ substantial part of its business during the yearand the ‘Going Concern’ status of the Company is not affected.
2. In respect of its inventories :
a) The inventories have been physically verified by management at reasonable intervals during the financial year.
b) In our opinion, the procedures of physical verification of inventories followed by management are reasonable andadequate in relation to the size of the Company and the nature of its business.
c) The company has maintained proper records of inventory. As explained to us, there were no material discrepanciesnoticed on physical verification of inventory as compared to the book records.
3. In respect of loans covered u/s 301:-
a) The Company has not granted any loan to the parties listed in the register to be maintained u/s. 301 of theCompanies Act, 1956.
b) The Company had taken interest free unsecured loan from one party. In respect of the said loan, the maximumamount outstanding at any time during the period under audit was Rs. 1,00,00,000/- and the year end balance isRs. 60,00,000/-.
c) In our opinion and according to the information and explanation given to us, the rate of interest and other termsand conditions of the loan taken by the Company are not prima facie prejudicial to the interest of the Company.
d) The loans taken were re-payable on demand. As informed, repayment have been made during the year wheneverdemanded by the lender, thus there has been no default on the part of the company. The loans taken by thecompany are interest free hence the question of payment of interest dues does not arise.
4. In our opinion and according to the explanations given to us there is an adequate internal control procedurecommensurate with the size of Company and nature of its business, for the purchase of fixed assets, inventory and forthe sale of goods and services. During the course of our audit no major weakness has been observed in internalcontrols.
5. In respect of transactions covered under section 301 of the Companies Act, 1956.
a) Based on the audit procedures applied by us and according to the explanations provided by the management, weare of the opinion that there are transactions that need to be entered into a register in pursuance of Section 301of the Companies Act, 1956 and have been so entered.
b) In our opinion and according to the information and explanations given to us, the transactions made in pursuanceof contracts or arrangements entered in the register in pursuance of Section 301 of the Companies Act, 1956 andexceeding the value of Rs. 5 lacs in respect of any party during the year, have been made at prices which arereasonable having regard to the prevailing market prices at the relevant time.
6. Sections 58A and 58AA of the Companies Act, 1956 is not applicable to the Company as it has not accepted anydeposits from the public. Hence, the clause (vi) of the Order is not applicable.
7. In our opinion the company has an internal audit system commensurate with the size of the Company and the natureof its business.
8. The Central Government has not prescribed the maintenance of cost records under Section 209 (1) (d) of the CompaniesAct, 1956 for the Company.
ANNEXURE TO AUDITOR�S REPORT
31
9. In respect of Statutory dues :
a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund, InvestorEducation and Protection Fund, Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty, Service Tax, Cessand any other statutory dues with the appropriate authorities. According to the information made available to us,no undisputed arrears of statutory dues are outstanding as at 30th June 2008 for more than six months from thedate when they became payable.
b) According to the information and explanations given to us and the records of the company examined by us, nodues of Sales Tax, Income Tax, Custom duty, Wealth tax, Excise duty, Service Tax, Cess and any other statutorydues as at 30th June 2008 which have not been deposited on account of a dispute except the following:
Nature of Statue Nature of dues Period Amount Forum where dispute is(Rs. in lacs) pending
Central Sales Tax Sales Tax F.Y. 2003-04 31.82 Joint CommissionerAct, 1956 & 2004-05 (Appeals)
10. There are no accumulated losses of the Company as on 30th June 2008. The company has not incurred any cashlosses during the financial year covered by our audit and the immediately preceding financial year.
11. Based on our audit procedures and as per the information and explanations given by the management, we are of theopinion that the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.
12. Based on our audit procedures and as per the information and explanations given by the management, the Companyhas not granted any loans and advances on the basis of security by way of pledge of shares, debentures and othersecurities during the financial year 2007-2008.
13. The provision of any special statutes applicable to the Chit Funds, Nidhi or Mutual Benefit Society are not applicableto the Company.
14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments.Accordingly the provisions of this clause are not applicable on the Company.
15. According to the information and the explanations given to us, the Company has not given any guarantee for loanstaken by others from bank or financial institutions.
16. According to the information and the explanations given to us, the company has availed term loans during the year andthe said term loan were prima facie utilized by the Company for the purposes for which the said loans were obtained.
17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of thecompany, we are of the opinion that there are no funds raised on a short-term basis, which have been used for long-term investments.
18. During the current financial year, the Company has not made any preferential allotment of shares to parties andcompanies covered in the Register maintained under Section 301 of the Companies Act, 1956.
19. No debentures have been issued during the current financial year.
20. No money has been raised by public issues during the current financial year.
21. On the basis of our examination and according to the information and explanations given to us, no fraud on or by theCompany has been noticed or reported during the current financial year.
For PAREKH SHAH & LODHAChartered Accountants
Amit R. Saklecha
Place : Mumbai (Partner)
Date : 5th December, 2008. M. No. : 401133
32
(Amount in Rs.)
PARTICULARS SCH. 30.6.2008 30.6.2007
SOURCES OF FUNDS
SHARE HOLDERS FUNDShare Capital 1 256,163,890 197,122,390
Reserves & Surplus 2 244,407,108 133,661,160
LOAN FUNDSSecured Loans 3 397,799,046 151,019,093
Unsecured Loans 4 9,000,000 5,000,000
Deferred Tax Liability 5 16,812,906 11,480,928
Total 924,182,950 498,283,571APPLICATION OF FUNDS
FIXED ASSESTS 6
Gross Block 284,951,611 208,235,580
Less :- Depreciation 39,650,924 23,771,512
245,300,687 184,464,068
Capital Work in Progress 272,743,577 102,978,637
Net Block 518,044,264 287,442,705INVESTMENTS 7 10,856,900 -
CURRENT ASSESTS LOANS & ADVANCES.Inventories 8 245,435,318 123,842,814
Sundry Debtors 244,438,837 113,129,549
Cash & Bank Balance 8,263,173 6,682,074
Loans & Advances 6,530,957 5,344,199
504,668,284 248,998,636
LESS:- CURRENT LIABILITIES & PROVISIONS 9
Liabilities 94,787,447 43,708,373
Provisions 25,178,460 8,134,440
119,965,907 51,842,813
Net Current Assests 384,702,378 197,155,823MISCELLANEOUS EXPENDITURE 10 10,579,408 13,685,043
(to the extent not written off or adjusted)
NOTES ON ACCOUNT 16
Schedules referred to here in form an integral part of the Balance Sheet
Total 924,182,950 498,283,571
As per our report of even dateFOR PAREKH SHAH & LODHA FOR AND ON BEHALF OF THE BOARDChartered Accountants
Amit R. Saklecha Rutika Pawar V .K. Chaturvedi Manoj PathakPartner Company Secretary Managing Director Whole Time DirectorM. No. 401133
Place : MumbaiDate : 5th December, 2008
BALANCE SHEET AS AT 30TH JUNE, 2008
33
(Amount in Rs.)
PARTICULARS SCH. 30.6.2008 30.6.2007
INCOME
Gross Sales 1,412,399,354 695,955,335
Other Income 11 3,027,340 1,315,836
Increase/(Decrease) in Stocks 12 58,360,574 26,373,654
1,473,787,268 723,644,825
EXPENDITURE
Cost of Material Consumed 13 1,227,731,264 623,381,220
Manufacturing,Administrative & Other Expenses 14 54,990,059 27,518,440
Financial Expenses 15 19,509,982 17,711,882
Depreciation 6 15,879,412 7,753,584
1,318,110,717 676,365,126
Profit for the year 155,676,551 47,279,700
Less: i) Provision for Current Tax 23,000,000 6,654,000
ii) Deferred Tax Provision 5 5,331,978 1,624,051
iii) Provision for Frienge Benefit Tax 371,701 201,540
iv) Short Provision for Tax for earlier year’s 560,997 -
Profit after Tax 126,411,875 38,800,109
Add: Balance b/f from Previous Year 64,628,013 38,631,965
Balance available for appropriation 191,039,888 77,432,074
Less: i) Proposed Dividend 10,631,120 7,525,160
ii) Corporate Dividend Tax 1,806,759 1,278,900
iii) Transfer to General Reserves 13,000,000 4,000,000
Surplus carried over to Balance Sheet 165,602,009 64,628,014
Earnings Per Share (EPS) of face value of Rs. 10 each fully paid up
Basic Ref. note 17 7.05 2.58
Diluted of Sch. 16 5.97 2.58
NOTES ON ACCOUNTS 16
Schedules referred to here in form an integral part of Profit & Loss Account
As per our report of even dateFOR PAREKH SHAH & LODHA FOR AND ON BEHALF OF THE BOARDChartered Accountants
Amit R. Saklecha Rutika Pawar V .K. Chaturvedi Manoj PathakPartner Company Secretary Managing Director Whole Time DirectorM. No. 401133
Place : MumbaiDate : 5th December, 2008
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON 30TH JUNE, 2008
34
(Amount in Rs.)
PARTICULARS 30.6.2008 30.6.2007
SCHEDULE - 1: Share Capital
Authorised Capital
34,000,000 Equity Shares of Rs.10/- each 340,000,000 250,000,000
(P. Y. 25,000,000 Equity Share of Rs. 10/- each)
Issued Subscribed & Paid up Capital
18,012,239 Equity Shares of Rs.10/- each fully paid up 180,122,390 180,122,390
(Previous Year 18,012,239)
Application Money: Equity Shares/Warrants 76,041,500 17,000,000
TOTAL 256,163,890 197,122,390
SCHEDULE - 2 Reserve & Surplus
General Reserves at the beginning of the year 12,200,000 8,200,000
Add: During the year 13,000,000 4,000,000
A 25,200,000 12,200,000
Securities Premium 56,833,147 60,061,195
Less: Public issue expenses write off 3,228,048 3,228,048
B 53,605,099 56,833,147
Profit & Loss Account balance C 165,602,009 64,628,013
TOTAL (A+B+C) 244,407,108 133,661,160
SCHEDULE - 3 Secured Loans
- Term Loan from I.D.B.I. Bank Ltd.
Opening Balance 67,250,000 67,870,000
Add: Disbursed during the year 182,000,000 15,880,000
249,250,000 83,750,000
Less : Installments repaid during the year 18,740,000 16,500,000
(Repayment of principal due in next oneyear Rs. 30,360,000/-) (P.Y. Rs. 18,740,000/-) A 230,510,000 67,250,000
- Vehicle Loans B 381,456 973,381
(Repayment of principal due in next oneyear Rs. 349,945/-) (P.Y. Rs. 381,456/-)
- Working Capital Loans
From Allahabad Bank 41,834,303 32,338,740
From HDFC Bank 29,575,381 10,049,315
From HDFC Bank Crop Loan 58,662,500 -
From United Bank of India 36,835,406 40,407,656
C 166,907,590 82,795,712
TOTAL (A+B+C) 397,799,046 151,019,093
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 30TH JUNE, 2008
35
(Amount in Rs.)
PARTICULARS 30.6.2008 30.6.2007
SCHEDULE - 4 Unsecured Loans
Intercorporate Deposit 9,000,000 5,000,000
TOTAL 9,000,000 5,000,000
SCHEDULE - 5 Deferred Tax Liability
As per last Balance Sheet 11,480,928 9,856,877
Add : Additions during the year 5,331,978 1,624,051TOTAL 16,812,906 11,480,928
SCHEDULE - 6 Fixed Assets
PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK
AS ON ADDITION DEDUCTION TOTAL AS AS ON FOR THE DEDUC AS ON AS ON AS ON
1.7.2007 DURING THE DURING ON 30.6.2008 1.7.2007 YEAR -TIONS 30.6.2008 30.6.2008 30.6.2007
YEAR THE YEAR
LAND 2,498,148 23,790,968 - 26,289,116 - - - - 26,289,116 2,498,148
OFFICE BUILDING 4,060,580 3,282,687 - 7,343,267 35,538 110,778 - 146,316 7,196,951 4,025,042
BUILDING 59,627,416 10,672,467 - 70,299,883 5,017,349 2,348,017 - 7,365,366 62,934,517 54,610,067
PLANT & MACHINERY 132,624,385 34,427,166 - 167,051,551 16,659,430 12,354,498 - 29,013,928 138,037,623 115,964,955
ELECTRICAL INSTALLATION 4,187,418 - - 4,187,418 511,361 310,708 - 822,069 3,365,349 3,676,057
COMPUTER & PRINTER 438,356 750,184 - 1,188,540 291,497 152,661 - 444,158 744,382 146,859
TUBE WELL,WATER TANKS & 342,701 - - 342,701 29,594 5,587 - 35,181 307,520 313,107
PIPINGS
FURNITURE & FIXTURE 363,795 1,535,855 - 1,899,650 113,875 104,046 - 217,921 1,681,729 249,920
VEHICLE 3,710,066 1,275,801 - 4,985,867 1,086,322 435,983 - 1,522,305 3,463,562 2,623,744
OFFICE EQUIPMENT 382,717 337,629 - 720,346 26,545 49,179 - 75,724 644,622 356,172
LABORATORY & STORE EQUPT. - 643,274 - 643,274 - 7,955 - 7,955 635,319 -
TOTAL 208,235,582 76,716,031 - 284,951,613 23,771,511 15,879,412 - 39,650,923 245,300,690 184,464,071
PREVIOUS YEAR TOTAL 117,136,233 91,447,821 348,472 208,235,582 16,119,997 7,753,584 102,070 23,771,511 184,464,071 101,016,236
36
(Amount in Rs.)
PARTICULARS 30.6.2008 30.6.2007
SCHEDULE -7 Investment
A. Long Term Investment - Non Trade
Unquoted - 4,34,200 (P.Y. Nil) Equity Share of Rs. 10/- eachfully paid up of Usher Eco Power Limited 4,342,000 -
In share application money - pending for allotment 6,514,900 -
TOTAL 10,856,900 -
SCHEDULE -8 Current Assests,Loan & Advances
Inventories (taken, valued & certified by the Director)
- Raw Material 130,590,526 67,869,370
- Packing Material 1,487,614 976,840
- Finished Goods 105,592,291 51,045,525
- Others 7,764,887 3,951,079
245,435,318 123,842,814
Sundry Debtors (Unsecured considered good)
Exceeding six months 1,130,063 12,714,729
Others 243,308,774 100,414,820
244,438,837 113,129,549
Cash & Bank Balances
Cash on Hand 3,863,294 2,632,560
Balance with schedule bank
- In Current A/c 683,852 2,054,735
- In Margin Money A/c 2,995,883 1,976,184
- In Fixed Deposits A/c 690,000 -
- In No Lien A/c. 30,144 18,595
8,263,173 6,682,074
Loans & Advances
(Unsecured, considered good recoverable in cash or kind
for value to be received) 5,978,357 2,767,799
Deposits 552,600 2,576,400
6,530,957 5,344,199
TOTAL 504,668,284 248,998,636
37
(Amount in Rs.)
PARTICULARS 30.6.2008 30.6.2007
SCHEDULE - 9 Current Liabilities & Provisions
Current Liabilites
Sundry Creditors for goods 17,181,387 31,265,755
Bills Payables 58,078,375 -
Sundry Creditors for expenses 6,577,675 4,814,359
Proposed Dividend 10,631,120 7,525,160
Interest Accrued But not due 2,318,889 103,099
94,787,447 43,708,373
Provision for Tax
For A.Y. 2008-2009 23,000,000 -
For A.Y. 2007-2008 - 6,654,000
Corporate Dividend Tax 1,806,759 1,278,900
Frindge Benefit Tax 371,701 201,540
25,178,460 8,134,440
TOTAL 119,965,907 51,842,813
SCHEDULE - 10 Miscellaneous Expenditure
(To the extent not written off or adjusted)
Preliminery Expenses
As per last Balance Sheet 375,529 442,605
Add :- Incurred during the year 630,301 -
1,005,830 442,605
Less :- Written off during the year 193,136 67,076
812,694 375,529
Deferred Interest on Term Loan
As per last Balance Sheet 354,572 886,432
Add :- Incurred during the year - -
354,572 886,432
Less:- Written off during the year 354,572 531,860
- 354,572
Deferred Revenue Expenses
As per last Balance Sheet 12,954,942 1,455,918
Add :- Incurred during the year (Public Issue Exp.) 60,462 14,727,072
13,015,404 16,182,990
Less: Written off during the year from securities premium 3,248,690 3,228,048
9,766,714 12,954,942
TOTAL 10,579,408 13,685,043
38
(Amount in Rs.)
PARTICULARS 30.6.2008 30.6.2007
SCHEDULE - 11 Other Income
Service Charges / Disc Received 8,050 52,866
Misc Income and Tempo Hiring Charges 846,457 11,593
Interest on Margin Money/FDR (TDS of Rs. 31,687/- P.Y.Rs. 25,521/-) 202,243 109,873
Hulling Charges 1,970,590 1,141,504
TOTAL 3,027,340 1,315,836
SCHEDULE - 12 Increase/(Decrease) in Stocks
Closing Stock
Work in Progress - -
Finished Goods 113,357,178 54,996,604
113,357,178 54,996,604
Opening Stock
Work in Progress
Finished Goods 54,996,604 28,622,950
54,996,604 28,622,950
Increase/(Decrease) in Stocks 58,360,574 26,373,654
SCHEDULE - 13 Cost of Material Consumed
Opening Stock
Raw Materials 67,869,370 29,553,228
Packing Materials 976,840 1,586,188
68,846,210 31,139,416
Purchases
Raw Materials including Packing Material 1,290,963,194 661,088,014
SUB TOTAL 1,359,809,404 692,227,430
Less :- Closing Stock
Raw Materials 130,590,526 67,869,370
Packing Materials 1,487,614 976,840
TOTAL 1,227,731,264 623,381,220
SCHEDULE - 14 Manufacturing, Administrative & Other Expenses
Wages & Salaries 12,864,010 6,828,275
Staff Welfare Exp. 298,205 284,254
Power & Fuel 11,106,324 4,685,553
Freight & Cartage 4,308,541 2,182,430
Stores & Spares 1,837,794 736,008
Travelling & Conveyance 1,348,729 1,140,943
SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE
YEAR ENDED ON 30TH JUNE, 2008
39
(Amount in Rs.)
PARTICULARS 30.6.2008 30.6.2007
Printing & Stationery 392,824 226,556
Directors Remuneration 1,020,000 732,000
Director’s Sitting Fee 375,000 235,000
Postage ,Courier & Telephone 467,080 380,638
Insurance 509,609 648,530
Rent 391,270 308,000
Warehousing Charges/Rent 3,938,661 625,000
Repairs & Maintenance - Plant & Machinery 856,358 537,582
Repairs & Maintenance - Building 648,114 167,713
Repairs & Maintenance - Vehicle 621,928 419,182
Repairs & Maintenance - Others 324,927 373,853
Legal & Professional Fees 749,925 229,499
Membership & Subscription 146,874 14,620
Office & Misc Expenses 1,036,508 695,309
Loss on Car Sale - 133,402
Internal Audit Fee 44,944 -
Gratuity 69,214 -
Gratuity for earliar years 543,172 -
Rebate & Discount 84,598 149,762
Preliminary Expenses Written off 193,136 67,076
Filing fees R.O.C 35,690 152,333
Brokerage & Commission 901,591 -
Advertisement & Sales Promotion 659,738 302,020
Audit fees 168,540 168,540
Handling Charges 752,593 562,201
Mandi Tax/Trade Tax 8,294,162 4,532,161
TOTAL 54,990,059 27,518,440
SCHEDULE - 15 Financial Expenses
Bank charges 577,097 1,851,366
Bank Interest 18,636,802 15,767,434
Interest Others 296,083 93,082
TOTAL 19,509,982 17,711,882
40
1. Nature of Operations
Usher Agro Limited is engaged in the business of food processing, mainly basic food i.e. wheat and rice. The Companyis having manufacturing facilities for rice and wheat milling.
2. Statement of Significant Accounting Policies
(a) Basis of preparation
The financial statements have been prepared to comply in all material respects with the mandatory AccountingStandards issued by the Institute of Chartered Accountants of India and the relevant provisions of the CompaniesAct, 1956. The financial statements have been prepared under the historical cost convention on an accrual basisThe accounting policies have been consistently applied by the Company and except for the changes in accountingpolicy, if any, as discussed below in detail, are consistent with those used in the previous year.
(b) Changes in Accounting Policies
Adoption of Accounting Standard AS15 (Revised 2005) Employee Benefits
(i) Till June 30th ,2007 the Company was providing, the provision or Gratuity on estimate basis. In Current year, theCompany has adopted the Accounting Standard 15 (Revised 2005) which is mandatory from April 1, 2006.Accordingly the company has changed method of providing the provision for Gratuity on estimate basis toactuarial valuation basis. This change is not having material impact on the profit for the current year. In thisconnection total Rs. 543,172/- (P.Y. Nil) have been charged to the current years profit & loss account in theschedule 14.
(c) Fixed Assets
Fixed assets are stated at cost (or revalued amounts, as the case may be), less accumulated depreciation andimpairment losses if any. Cost comprises the purchase price and any attributable cost (including pre-operative andtrial & run expenses) of bringing the asset to its working condition for its intended use. Borrowing costs relating toacquisition of fixed assets which takes substantial period of time to get ready for its intended use are also includedto the extent they relate to the period till such assets are ready to be put to use.
(d) Depreciation
Depreciation is provided using the Straight Line Method as per the rates prescribed under schedule XIV of theCompanies Act, 1956. Depreciation on addition/deletion to the assets during the year is provided on pro-rata basis
(e) Impairment
i. The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairmentbased on internal/external factors. An impairment loss is recognized wherever the carrying amount of an assetexceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price andvalue in use. In assessing value in use, the estimated future cash flows are discounted to their present valueat the weighted average cost of capital.
ii. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining usefullife.
(f) Leases
Finance Lease Transaction:
Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental toownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum leasepayments at the inception of the lease term and disclosed as leased assets. Lease payments are apportionedbetween the finance charges and reduction of the lease liability based on the implicit rate of return. Finance chargesare charged directly against income. Lease management fees, legal charges and other initial direct costs arecapitalised.
If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term,capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.
SCHEDULE -16- SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS
41
Operating Lease Transaction :
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, areclassified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss accounton a straight-line basis over the lease term.
(g) Investments
Investments that are readily realisable and intended to be held for not more than a year are classified as currentinvestments. All other investments are classified as long-term investments. Current investments are carried atlower of cost and fair value determined on an individual investment basis. Long-term investments are carried atcost. However, provision for diminution in value is made to recognise a decline other than temporary in the value ofthe investments.
(h) Inventories
Raw materials, components, Lower of cost and net realizable value. However, materials and otherstores and spares items held for use in the production of inventories are not written down
below cost if the finished products in which they will be incorporated areexpected to be sold at or above cost. Cost is determined on FIFO basis.
Work-in-progress and finished goods Lower of cost and net realizable value. Cost includes direct materialsand labour and a proportion of manufacturing overheads based onnormal operating capacity.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs ofcompletion and estimated costs necessary to make the sale.
(i) Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and therevenue can be reliably measured.
Sale of Goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.Sales Tax and VAT deducted from turnover (gross) is the amount that is included in the amount of turnover (gross)and not the entire amount of liability arised during the year.
Income from Services
Revenues from Job work & stock processing of material are recognised as and when services are rendered.
Interest
Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.
(j) Deferred Revenue Expenditure
Preliminary expenses are amortized equally over a period of 10 years or 5 years, beginning from the year in whichthey are incurred.
Expenses relating to public issue are amortized equally over a period of 5 years against security premium account.
(k) Foreign currency translation
(i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amountthe exchange rate between the reporting currency and the foreign currency at the date of the transaction.
(ii) Conversion
Foreign currency monetary items are reported using the closing rate at the end of the reporting period. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported
42
using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value orother similar valuation denominated in a foreign currency are reported using the exchange rates that existedwhen the values were determined.
(iii) Exchange Differences
Exchange differences arising on the settlement of monetary items or on reporting company’s monetary itemsat rates different from those at which they were initially recorded during the year, or reported in previous financialstatements, are recognised as income or as expenses in the year in which they arise. Exchange differencesarising in respect of fixed assets acquired from outside India are capitalized as a part of fixed asset.
(l) Retirement and other employee benefits
i. Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions arecharged to the Profit and Loss Account of the year when the contributions to the respective funds are due. Thereare no other obligations other than the contribution payable to the respective funds.
ii. Gratuity liability are defined benefit obligations and are provided for on the basis of an actuarial valuation madeat the end of each financial year.
iii. Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.
(m) Income taxes
Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax ismeasured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act,1961. Deferred income taxes reflects the impact of current year timing differences between taxable income andaccounting income for the year and reversal of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balancesheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficientfuture taxable income will be available against which such deferred tax assets can be realised. If the company hasunabsorbed depreciation or carry forward tax losses, deferred tax assets are recognised only if there is virtualcertainty supported by convincing evidence that such deferred tax assets can be realised against future taxableprofits.
At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognises unrecogniseddeferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be thatsufficient future taxable income will be available against which such deferred tax assets can be realised.
(n) Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity is capitalised. Indirect expenditure incurred during constructionperiod is capitalised as part of the indirect construction cost to the extent to which the expenditure is indirectly relatedto construction or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during theconstruction period which is not related to the construction activity nor is incidental thereto is charged to the Profitand Loss Account. Income earned during construction period is deducted from the total of the indirect expenditure.
All direct capital expenditure on expansion are capitalized. As regards indirect expenditure on expansion, only thatportion is capitalized which represents the marginal increase in such expenditure involved as a result of capitalexpansion. Both direct and indirect expenditure are capitalized only if they increase the value of the asset beyond itsoriginal standard of performance.
(o) Segment Reporting Policies
Identification of segments :
The Company’s is operating in only one business segment i.e. food processing & only one geographical segmenti.e. within India hence there is no separate identification of segments and accounting thereof.
(p) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity
43
shareholders (after deducting preference dividends and attributable taxes, if any) by the weighted average numberof equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity shareto the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reportingperiod. The weighted average numbers of equity shares outstanding during the period are adjusted for events ofbonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split(consolidation of shares).
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equityshareholders and the weighted average number of shares outstanding during the period are adjusted for theeffects of all dilutive potential equity shares.
(q) Provisions
A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that anoutflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.Provisions are not discounted to its present value and are determined based on best estimate required to settle theobligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect thecurrent best estimates. Provision for expenditure relating to voluntary retirement is made when the employeeaccepts the offer of early retirement.
(r) Cash and Cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investmentswith an original maturity of three months or less.
3. Segment Information
Business Segments :
The Company is operating in only one Business Segment i.e. Food Processing, hence no Segment Reporting is givenfor Business/Product Segment as per Accounting Standard (AS) 17 on Segmental Reporting issued by the Institute ofChartered Accountants of India (ICAI)
Geographical Segments :
The Company is carrying all of its operational activities only in the domestic market i.e. India and not having anyoperations in the overseas market hence there is only one Geographical Segment i.e. India, accordingly no details arerequired to be given for the ‘Geographical Segments’.
4. Details of Security given for secured loans
(I) Term Loan:
• The Term Loans are secured by extension of first mortgage and charge on all immovable and movable assetsof the company both present and future, subject to charges created to be created on specific movable assets infavor of bankers for securing working capital borrowings.
• Unconditional and irrevocable personal guarantee of Shri Vinod Kumar Chaturvedi and Shri Manoj Pathak, theDirectors of the Company.
• Second charge on all current assets of the Company.
(II) Working Capital Loans:
• First pari passu charge on the entire stock of inventories and receivables (Rice & Flour Mill) and other currentassets of the company both present and future.
• Unconditional and irrevocable personal guarantee of Shri Vinod Kumar Chaturvedi and Shri Manoj Pathak, theDirectors of the Company.
• Second pari-passu over the entire immovable fixed assets of the Company, both present and future, by way ofequitable mortgage.
• Letter of Credit (LC)/Bank Guarantee (BG) facilities are also secured with predefined percentage of margin byway of fixed deposit with the respective banks.
44
(III) Crop Loan:
• The Company has availed ‘Crop Loan’ facility from HDFC Bank Limited, under which HDFC Bank Limited hasfinanced/provided loans to the farmers through the Company for the purchases made by the Company from theFarmers.
• The said crop loan is secured by way of hypothecation of standing crops of respective farmers with the corporateguarantee of the Company.
• The Company has also hypothecated warehousing receipts under which the said purchased goods have beenstored with the warehouse. The outstanding balance at the end of the year for the above crop loan is shown aspart of working capital loans under the schedule-3 ‘Secured Loans’ of this Balance Sheet.
(IV) Vehicle Loans:
• Vehicle loans are secured against the respective vehicles financed through said loans.
5. Details of capital work in progress
Capital Work in Progress includes expenses incurred on captive Power Plant of Rs. 36,870,982/-, Rs. 235,347,474/- onNew Rice Mill at Chhata, Mathura and Rs. 525,121/- on other miscellaneous Fixed Assets.
The above CWIP also included preoperative expenses of Rs. 30,929,372/- (P.Y. Rs. 506,845/-) comprising of conveyance,Generator Expenses, Legal & Professional Charges, Misc. Expenses, Postage & Courier, Printing & Stationery, Salaries,Staff Welfare, Telephone Expenses, Traveling Expenses, Vehicle Running & Maintenance, Freight, Licensing Fee andInterest & processing fee for the Term Loan taken for the respective projects.
6. Related Parties
(I) Names of related parties
Names of related parties where control exists irrespectiveof whether transactions have occurred or not Nil
Names of other related parties with whom transactionshave taken place during the year
Associates Usher Eco Power Limited (w.e.f.15.10.2007)
Key Management Personnel Mr. V. K. Chaturvedi (Managing Director)
Mr. Manoj Pathak (Whole time Director)
Relatives of key management personnel Mrs. Samta Chaturvedi, wife of M.D. Mr. V. K.Chaturvedi
Enterprises owned or significantly influenced bykey management personnel or their relatives Usher Oils & Foods Limited (w.e.f 20.02.2008)
Usher Logistic Limited (w.e.f 20.02.2008)
Vedika Finance Pvt. Limited (w.e.f. 21.10.2007)
Note: Loans taken from enterprises owned by key management personnel or significantly influenced by them, do notstipulate any repayment schedule.
45
(II) Related Party Disclosure
(Amount in Rupees)
Associates Key Management Relatives of Key Enterprises owned T otalPersonnel Management or significantly
(Managing Director, Personnel influenced by keyWhole time director, (Spouse, son, managementmanager and other daughter, brother, personnel or their
managerial sister, father, relativespersonnel) mother who may
influence or beinfluenced by
such personnel inhis dealings with
the Company)2008 2007 2008 2007 2008 2007 2008 2007 2008 2007
Employee Benefits forKey ManagementPersonnel
Mr. V. K. Chaturvedi - - 600,000 450,000 - - - - 600,000 450,000
Mr. Manoj Pathak - - 420,000 282,000 - - - - 420,000 282,000
Share ApplicationMoney received
Mr. V. K. Chaturvedi 20,166,500 2,250,000 - - - - - - 20,166,500 2,250,000
Mr. Manoj Pathak 22,500,000 - - - - - - - 22,500,000 -
Loans Taken
Vedika Finance (P) Ltd. - - - - - - 10,000,000 - 10,000,000 -
Loans Repayments -
Vedika Finance (P) Ltd. - - - - - - 4,000,000 - 4,000,000 -
Rent Expense / (Income)
Mrs. Samta Chaturvedi - - - - 120,000 120,000 - - 120,000 120,000
Investments(including ShareApplication Money)
Usher Eco Power Ltd. 5,032,500 - - - - - - - 5,032,500 -
Usher Oils & Foods Ltd. - - - - - - 4,310,100 - 4,310,100 -
Usher Logistic Ltd. - - - - - - 1,514,300 - 1,514,300 -
Balances Outstandingat the year end*
Mr. V. K. Chaturvedi - - - - - - - - - -
Mr. Manoj Pathak - - - - - - - - - -
Vedika Finance (P) Ltd. - - - - - - 6,000,000 - 6,000,000 -
Mrs. Samta Chaturvedi - - - - - - - - - -
Total 47,699,000 2,250,000 1,020,000 732,000 120,000 120,000 25,824,400 - 74,663,400 3,102,000
* excluding investments and share application money received and paid.
46
7. Leases
In case of assets taken on lease
Finance Lease :
There are no finance lease transactions in the reporting period hence no disclosure is required to be made under AS 19– Accounting for Lease, issued by the ICAI
Operating Lease :
Office premises, godwons and warehouses are obtained on operating lease. The lease term are normally for 11months and renewable at the option of the Company. There are no restrictions imposed by lease arrangements. Thereare no subleases.
Operating Lease
Rupees Rupees2008 2007
Lease payments for the year 4,329,931 933,000
Minimum Lease Payments :
Not later than one year 5,338,254 -
Later than one year but not later than five years - -
Later than five years - -
9,668,185 933,000
8. Impairment of assets
As on the Balance Sheet date the carrying amounts of the assets net of accumulated depreciation is not less than therecoverable amount of those assets. Hence, in the opinion of the management, there is no provision for impairment losson the assets of the Company as required under Accounting Standard-28 (Impairment of Assets) issued by the ICAI.
9. Capital Commitments
2008 2007Rupees Rupees
Estimated amount of contracts remaining to be executed oncapital account and not provided for. 41,921,699 Nil
10. Provisions and Contingencies
Contingent Liabilities not provided for (Rupees in lacs)
2008 2007Letter of Credit issued by the Bankers of the Company in favour of suppliers( Fixed deposits in the form of margin money including interest thereon ofRs. 29.96 Lacs (P.Y. Rs. 19.76 Lacs) have been kept with respective bankersfor the said letter of credit) 202.93 -
Letter of Credit issued by the Bankers of the Company for import of capital goods* 571.21 -
* Converted on the foreign exchange conversion rate prevailing on the date ofBalance Sheet.
Bank guarantees issued by the bankers of the Company 6.90 -( Fixed deposits of Rs.6.90 Lacs (P.Y. Rs. Nil) have been kept with respectiveBanks for the said bank guarantees)
Sales Tax Liability in respect of A.Y. 2003-04 and 2004-05 for which the company 31.82 31.82Has gone in to the appeals with the appropriate forums.
812.86 31.82
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11. The Balances of Debtors, Creditors, Loans & Advances and other parties are subject to confirmation and reconciliation,if any.
12. In the opinion of the Board the Current Assets, Loans & Advances are approximately of the value stated if realized in theordinary course of business and the provisions of all known liabilities are adequate.
13. The Company does not owe to any small scale industrial undertaking for more than 30 days.
14. The Company has not received any intimation from its ‘suppliers’ regarding their status under the Macro, Small andMedium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year endtogether with interest paid/payable as required under the said Act can not be ascertained and accordingly no disclosureshave been given in this regards.
15. Benefits to Employees :
As per Accounting Standard 15 “Employee Benefits”, the disclosures of Employee benefits as defined in the AccountingStandard are given below :
i) Defined Contribution Plan
Contribution to Defined Contribution Plan, recognized as expenses for the year are as under :
Particulars 30.06.2008 30.06.2007Rupees Rupees
Employer’s contribution to Provident Fund & ESIC 182,702 142,126
ii) Changes in the present value of the deferred benefit obligation are as follows:
Particulars 30-06-2008Rupees
Opening defined benefit obligation 1,140,288
Interest cost 94,074
Current service cost 253,263
Benefits paid -
Actuarial (gains) / losses on obligation (278,123)
Closing defined benefit obligation 1,290,502
iii) Changes in the fair value of plan assets are as follows:
Particulars 30-06-2008
Rupees
Opening fair value of plan assets -
Expected return -
Contributions by employer -
Benefits paid -
Actuarial gains / (losses) -
Closing fair value of plan assets -
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iv) Fair value of plan assets:
Particulars 30-06-2008
Rupees
Fair value of plan assets at the beginning of period -
Actual Return of plan assets -
Contributions -
Benefits paid -
Fair value of the plan assets at the end of period -
Funded status (1,290,502)
Excess of actual over estimated return on plan assets (1,290,502)
v) Actuarial gain/(loss) recognized
Particulars 30-06-2008Rupees
Actuarial gain/(loss) for the period – obligation 278,123
Actuarial gain/(loss) for the period – plan assets -
Total gain/(loss) for the period 278,123
Actuarial gain/(loss) recognized for the period 278,123
Unrecognized actuarial gains / (loss) at the end of the period -
vi) The amount recognised in the Balance Sheet
Particulars 30-06-2008Rupees
Present value of obligation at the end of the year 1,209,502
Fair value of plan assets at the end of the year -
Funded status (1,209,502)
Excess of actual or estimated -
Unrecognized actuarial gains / (loss) -
Net assets/(liabilities) recognized in the Balance Sheet (1,209,502)
vii) Expenses recognized in the Profit & Loss account
Particulars 30-06-2008Rupees
Current service cost 253,263
Interest cost on benefit obligation 94,074
Expected return on plan assets -
Net actuarial( gain) / loss recognised in the year (278,123)
Past service cost -
Expenses recognized in the Profit & Loss A/c 69,214
49
Balance sheet
viii) Details of Provision for gratuity
Particulars 30-06-2008Rupees
Net liability at the beginning of the year 1,140,288
Expenses recognized during the year 69,214
Contribution paid during the year -
Net liability at the end of the year 1,209,502
ix) The principal assumptions used in determining gratuity obligations for the Company’s plans are shown below:
Particulars 30-06-2008Rupees
Mortality table (LIC) duly modified 1994-96
Interest/Discount rate 8.75%
Expected rate of return on plan assets -
Increase in Compensation cost 10.00%
Employee turnover 1.00%
Expected average remaining service 25.37 Yrs.
Note :- Previous year figures have not been given since the Company has implemented Revised AS – 15 on Accounting forRetirement Benefits only in current year.
16. Derivative Instruments and Unhedged Foreign Currency Exposure
Particulars of Derivatives Purpose
Forward contract outstanding as at Balance Sheet date: Nil ( P.Y. Nil )
Particulars of Unhedged foreign Currency Exposure as at the Balance Sheet date
Particulars Amount
Import Creditors for Capital Goods Rs. 40,243,500 (JPY 99,000,000)* (P. Y. Nil)
Advance for Import of Capital Goods Rs. 1,017,150 (EURO 15,000 )* (P. Y. Nil)
* Converted at the foreign exchange conversion rate prevailing on the date of Balance Sheet.
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17. Earning Per Share (EPS)
( Rs. In Lacs except EPS)
Sr. No. Particulars 2007-08 2006-07
I) Net Profit after tax as per profit and loss account 1,264.12 388.00
ii) Net Profit attributable to equity share holders 1,264.12 388.00
iii) Net Profit before exceptional item 1,264.12 388.00
iv) Weighted Average number of equity shares used as
denominator for calculation of Basic EPS 18,012,239 15,050,320
v) Weighted Average number of equity shares used as denominator
for calculation of Diluted EPS* 21,262,239 15,050,320
vi) Basic and Diluted EPS - Basic 7.05 2.58
- Diluted 5.97 2.58
vii) Face Values per equity share 10 10
* For calculation of Diluted EPS 32.50 Lacs warrants has been considered for which Company has received in principal approval of listing from BSE.
18. Provision for Taxation
a) Current Tax
Provision for current tax has been made as per provisions of the Income Tax Act, 1961, after considering deduction/exemptions, if any, available to the Company under the said Act. Further the provision for current tax has been madeupto 31st March, 2008, financial year ending as per the said Act.
b) Deferred Tax
As per Accounting Standard 22 on ‘Taxes on Income’ – the details of deferred tax liabilities/assets are as under :-
(Amount in Rs.)
Particulars As at 30.06.08 As at 30.06.07
Deferred Tax Liabilities
Difference between carrying Amount of Fixed assets
in the books and the Income Tax Return 17,334,437 16,305,990
Deferred Tax Assets
Provision for Gratuity 411,110 -
Others disallowances under the Income Tax Act, 1961 110,421 4,825,062
Total 521,531 14,195,535
Net Deferred Tax Liability 16,812,906 11,480,928
Net Deferred Tax (Credit)/Charge to Profit & Loss A/c 5,331,978 1,624,051
51
19. Auditors Remuneration is as under:
Particulars 2007-2008 2006-2007Rupees Rupees
Audit Fees 100,000 100,000
Tax Audit Fees 50,000 50,000
Certification and other matters 16,500 28,500
Service Tax 20,575 22,028
Total 187,075 200,528
20. Details of utilisation of proceeds raised through public issue during the financial year 2006-07:
Fund Raised through IPO (Rs. In Lacs)
Equity Share Capital 1,201.22
Share Premium 600.61
1,801.83
Utilization of Funds Projected Actual till 30-06-08
Rs. In Lacs Schedule Rs. In Lacs Schedule
Wheat Roller Flour Mill(including Working Capital) 747.90 Sep. 2006 757.85 Nov. 2006
Modernization of Rice Mill at Mathura 413.75 Jan. 2007 387.44 June 2007
Co. Generation Power Plant 345.18 Jan. 2007 313.51 UnderImplementation
Working Capital for existing operations 175.00 - 181.63 -
Issue Exp 120.00 - 161.40 -
Total 1,801.83 - 1,801.83 -
Pending deployment in co-generation captive power project, the balance amount has been utilized for working Capitalbeing one of the objects of the issue.
21. Preferential Offer
On 31st May 2007 the Company allotted 40 Lacs equity warrants on preferential basis in aggregate to the followingpersons - Mr. V. K. Chaturvedi (7.50 Lacs equity warrants), Mr. Manoj Pathak (7.50 Lacs equity warrants), the promotersof the Company and Oodnap Agrotech Limited (25 Lacs equity warrants) . The warrant holders be entitled to a p p l ythe underlying equity shares in one or more trenches within 18 months of the date of allotment.
The above preferential issue has been done interalia to partly fund the ongoing rice milling capacity expansion projectof the company at Chatta, near to Mathura (UP). The total size of above preferential issue was Rs.1,200 Lacs, out ofwhich the Company has already received Rs. 760.42 Lacs, which has been shown as share application moneyreceived in the schedule 1 of the Balance Sheet.
The above amount has been utilized towards the ongoing rice milling capacity expansion project and for working capitalpurposes being one of the object of the said preferential issue
52
22. Supplementary Statutory Information
22.1 Directors’ Remuneration 2008 2007Rupees Rupees
Salaries 1,020,000 732,000
1,020,000 732,000
Note:- As the future liability for gratuity and leave encashment is provided on an actuarial basis for the Company as awhole, the amount pertaining to the directors is not ascertainable and, therefore, not included in the above remuneration.
22.2 Comsputation of Net Profit in accordance with section 349 of the Companies Act, 1956 for calculation ofcommission payable to directors
2008 2007Rupees Rupees
Profit as per Profit and Loss Account 126,411,875 38,800,109
Add:
Directors’ remuneration 1,020,000 732,000
(Loss)/Profit on sale of fixed assets as per Section 349 of theCompanies Act, 1956 - -Provision for doubtful debts and advances - -
Less:
Profit on sale of fixed assets (net) as per Profit and Loss account - -
Net profit as per Section 349 of the Companies Act, 1956 127,431,875 39,532,109
Maximum permissible commission to Managing andWholetime Directors at 10% of the net profits as calculated above 12,743,188 3,953,211
Maximum permissible commission to other directors at 1%of the net profits as calculated above 1,274,319 395,321
Actual commission paid to the Managing and Wholetime Director Nil Nil
14,017,507 4,348,532
22.3 Earnings in foreign currency (Cash/Accrual basis) Nil Nil
22.4 Expenditure in foreign currency (Cash/Accrual basis)
Travelling 220,234 -
220,234 -
22.5 Value of imports calculated on CIF basis
Capital goods 40,080,500 -
40,080,500 -
22.6 Net dividend remitted in foreign exchange Nil Nil
53
23. Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI to theCompanies Act, 1956
23.1 Licensed Capacity, Installed Capacity and Actual Production
Class of Goods Unit Licensed Capacity Installed Capacity Actual Production
2008 2007 2008 2007 2008 2007
Paddy Milling MT 57,600 57,600 57,600 57,600 52,663 36,815
Wheat Processing MT 75,000 75,000 75,000 75,000 45,200 15,842
A Details of Materials, Consumption & Inventory :
Particulars Qty V alue Qty Value in Qtls Rupees in Qtls Rupees
30th June, 2008 30
th June, 2008 30
th June, 2007 30
th June, 2007
A. Opening Stock
Paddy & Dehusked Raw Rice - - - -
Finished Rice 40,695 49,519,056 28,347 26,645,579
Wheat 67,870 67,869,370 34,769 29,553,228
Wheat Products 1,504 15,26,469 - -
Husk - - - -
Bran 10,929 3,951,079 5,650 1,977,371
Packing Material - 976,840 - 1,586,188
B Purchases
Paddy & Dehusked Raw Rice 546,655 695,756,694 368,151 463,483,023
Wheat 485,520 585,184,074 191,518 191,522,925
Husk - - 5,000 1,193,375
Packing Material - 10,022,427 - 4,888,690
C Material consumed
Paddy & Dehusked Raw Rice 526,633 676,736,231 368,151 463,483,024
Wheat Consumed 452,000 541,483,381 158,417 153,206,783
Husk Consumed - - 5,000 1,193,375
Packing Material Consumed - 9,511,653 - 5,498,038
D Sales
Rice 422,406 798,257,663 296,893 516,136,171
Wheat Product 445,425 591,016,078 158,417 169,633,115
Bran 18,042 13,482,034 7,217 3,659,952
Husk 46,049 9,643,579 31,829 6,526,097
54
Particulars Qty V alue Qty Value in Qtls Rupees in Qtls Rupees
30th June, 2008 30
th June, 2008 30
th June, 2007 30
th June, 2007
E Closing Inventories
Finished Rice 47,752 90,729,664 40,695 49,519,056
Husk 1,692 304,483 - -
Paddy & Dehusked Raw Rice 20,022 19,020,463 - -
Bran 13,287 7,460,404 10,929 3,951,079
Wheat 101,390 111,570,063 67,870 67,869,370
Wheat Product 11,974 14,862,627 1,504 1,526,469
Packing Materials - 1,487,614 976,840
24. Previous Year Comparatives
Previous year’s figures have been regrouped where necessary to conform to this year’s classification.
As per our report of even date For and on behalf of the Board
For PAREKH SHAH & LODHA
Chartered Accountants
Amit R. Saklecha Rutika Pawar V .K. Chaturvedi Manoj PathakPartner Company Secretary Managing Director Whole Time Director
Place : Mumbai
Date : 5th December, 2008
55
( Rs. in Lacs )
Particulars 30.06.2008 30.06.2007A. CASH FLOW FROM OPERATING ACTIVITIES :
Net Profit before Tax & Extraordinary Activites 1,556.77 472.80Add.Depreciation 158.79 77.54Preliminary Expenses written off 1.93 0.67Miscellaneous/Deffered Expenses written off 3.55 5.32Loss on sale of Fixed Assets - 1.33Less:Other Income (30.27) (13.16)Less: Prior Period ItemsOPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 1,690.76 544.49Inventories (1,215.93) (640.80)Debtors (1,313.09) (469.45)Loans, Advances & Deposits 70.04 (39.75)Trade Payables 404.48 195.00Other Current Liabilites/Provisions - -Sub Total (2,054.49) (955.01)CASH GENEREATED FROM OPERATIONS (363.73) (410.51)Other Income 30.27 13.16Taxes Paid (80.63) (32.85)Sub Total (50.36) (19.69)NET CASH FROM OPERATING ACTIVITIES (414.09) (430.20)
B CASH FLOW FROM INVESTMENT ACTIVITIESPurchase of Fixed Assets /Investments (767.16) (914.47)Capital Work in progress (1,697.65) (188.02)Sale of fixed Assets / Investments - 1.13 Investments (108.57) -NET CASH USED IN INVESTING ACTIVITES (2,573.38) (1,101.36)
C CASH FLOW FROM FINANCING ACTIVITIESProceeds from Issue of Shares & Share Application Money 590.42 1,564.31Proceeds from Borrowings ( Net ) 2,507.80 146.43Dividend Paid (75.25)Corporate Dividend Tax Paid (12.79)Miscellaneous/Deffered Expenses (6.90) (147.27)NET CASH USED IN FINANCING ACTIVITIES 3,003.28 1,563.47Net increase / decrease in Cash and Cash equivalents 15.81 31.90Cash and Cash Equivalents 01.07.2007 66.82 34.92Cash and Cash Equivalents 30.06.2008 82.63 66.82
FOR PAREKH SHAH & LODHA For and on behalf of the BoardChartered Accountants
Amit R. Saklecha Rutika Pawar V .K. Chaturvedi Manoj PathakPartner Company Secretary Managing Director Whole Time DirectorPlace : Mumbai
Date : 5th December, 2008
CASH FLOW STATEMENT FOR THE YEAR ENDED ON 30TH JUNE, 2008
56
1 Registration Details
Registration No. 11-100380 State Code 11
Balance sheet date 30/06/2008
2 Capital raised during the year (Amount in Rs. 000)
Public Issue NIL Right Issue NIL
Bonus Issue NIL Private Placement NIL
3 Position of Mobilisation and Deployment of fund (Amount in Rs.000)
Total Liabilities 924,183 Total Assests 924,183Sources of Fund
Paid up Capital 256,164 Reserves & Surplus 244,407Secured Loans 397,799 Unsecured Loans 9,000Share Application Money 0 Other Tax Liability 16,813
Application of Funds
Net fixed Assests 518,044 Investments 10,857Net Current Assests 384,702 Misc Expenditure 10,579Accumalated Losses NIL
4 Performance of Company (Amount in Rs. 000)
Turnover 1,473,787 Total Expenditure 1,318,111Profit/Loss Before Tax 155,677 Profit/Loss after Tax 126,412(Please tick appropriate box + for profit, - for loss)
Earning per Share in Rs. 7.05 Dividend Rate 5%
5 Generic Names of Three Principle Products/Services of Company(As per Monetary Terms)
Item Code No. NIL
Product Description RICE, BRAN,WHEAT PRODUCT, & HUSK
As per our report of even date FOR AND ON BEHALF OF BOARD
FOR PAREKH SHAH & LODHA
Chartered Accountants
Amit R. Saklecha Rutika Pawar V .K. Chaturvedi Manoj PathakPartner Company Secretary Managing Director Whole Time Director
Place : Mumbai
Date : 5th December, 2008
BALANCE SHEET ABSTRACT & COMPANY GENERAL BUSINESS PROFILE
O U R P L A N T
To emerge as one of the India's leading
agro-processing companies with a special focus
on the basic foods segment
(Rice and Wheat).We envision a
refreshing green, the personality of Usher,
to be the symbol of nation's booming economy and the
indication of the affluence of world agriculture.
Maximize creation of wealth, value andsatisfaction for the stakeholders.
Attain leadership in developing, adopting andassimilation state of the art technology forcompetitive advantage.
Cultivate high standards of business ethics andTotal Quality Management for a strongcorporate identity and brand equity
We intend to emerge as the one stop sourcefor all the basic food products in India.
On the Wings of Green
K
K
