To,

The Members of USHER AGRO LIMITED

Report on the Financial Statements

We have audited the accompanying standalone financial statements of USHER AGRO LIMITED, ("the Company"), which comprises the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act, except with regard to the matters set out below in Basis of Qualified Opinion, where we have not been able to perform audit in conformity with relevant auditing standards in the absence of sufficient appropriate evidence. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained, except with regard to the matters set out below in Basis of Qualified Opinion, is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial statements.

Basis for Qualified Opinion

1. CFSIT Inc, USA has filed Winding-up Petition against the company for recovery of their outstanding Dues of Rs. 6,548.14 lakh ($10 Million) with the interest @12% p.a. as per the advance payment and supply contract. An interest amount comes to Rs. 336.08 lakh ($0.507 Million) approx. for which the company has not made any provision in the financial statements.

Had the company made such Interest provision in the Statement of Profit and loss, the loss for the year would have been higher by Rs. 336.08 lakh and the accumulated profit would have been lower by an equivalent amount.

2. PT Bank Maybank Indonesia Tbk, Mumbai has filed Winding up petition against the company for recovery of their outstanding Dues of Rs. 1778.18 lakh with the interest @16.4% p.a. The proceeding is pending before Hon'ble Bombay High Court. An interest amount comes to Rs. 6.28 lakh approx. for which the company has not made any provision in the financial statements.

Had the company made such Interest provision in the Statement of Profit and loss, the loss for the year would have been higher by Rs. 6.28 lakh and the accumulated profit would have been lower by an equivalent amount.

3. Axis bank has imposed Penal charges amounting to Rs. 70.45 lakh. However such expenditure has not been expensed out in the statement of profit and loss and the same is adjusted against short term borrowing from bank.

Had the company expensed out such Penal Charges in the statement of profit and loss, the loss for the year would have been higher by Rs. 70.45 lakh and accumulated profit would have been lower by an equivalent amount and short term borrowing would have been lower by an equivalent amount.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects, which are not quantifiable, of the matters described in the Basis for Qualified Opinion paragraph, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the company as at 31st March 2016 and its loss and its cash flows for the year ended on that date:

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

a. All the lenders of the Consortium in Joint Lenders forum (JLF) meeting held on 13th of May, 2016, agreed for opting option of Strategic Debt Restructuring (SDR) scheme for better financial situation of the company. Referral date for SDR is decided 13th May, 2016.

b. Reference is invited to Note No. 47 to the Standalone financial statements, which states that balances of Sundry Debtors, Creditors, Loans & Advances and other parties are subject to confirmation and consequent adjustments, if required.

c. Reference is invited to noteno.48 to the Standalone Financial Statement, which state that substantial portion of the company net worth is eroded in the March quarter. In the June quarter company has also incurred losses as a result of which company net worth is fully eroded.

Considering the matters set out in the above notes, Financial Statements are prepared on a going concern basis.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure "A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by section 143(3) of the Act, we report that:

a. We have sought and except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, in our opinion, proper books of account, as required by law, have been kept by the Company so far as appears from our examination of those books.

c. The Company has not appointed a person other than Companies auditor for audit of accounts of branch offices under Section 143(8); hence clause (c) of sub-section (3) of section 143 is not applicable.

d. The Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

e. except for the possible effects of the matters described in the Basis of Qualified Opinion paragraph, in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended).

f. the matters described under the Basis for Qualified Opinion paragraph, Emphasis of Matter paragraph read further with para vii b, and viii of our report in Annexure "A" , may have an adverse effect on the functioning of the Company.

g. on the basis of written representations received from the directors as on 31st March, 2016, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016, from being appointed as a director in terms of Section 164(2) of the Act.

h. the qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.

i. with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, we give our separate Report in "Annexure B".

j. with respect to the other matters included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit &Auditor's ) Rules,2014, in our opinion and to our best of our information and according to the explanations given to us :

i. As detailed in Note No. 2 to the Standalone Financial Statements, the Company has disclosed the impact of pending litigations on its standalone financial position.

ii. The Company has made provisions as required under the applicable law or accounting standards for material foreseeable losses if any, on long term contracts including derivative contracts.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company.

The Annexure referred to in our report to the members of USHER AGRO LIMITED ('The Company') on the standalone financial statements for the year ended 31st March, 2016. We report that:

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b. As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. We are informed that no material discrepancies were noticed on such physical verification.

c. According to the information and explanations given to us and the records examined by us and based on the examination of the records maintained by company and intimation received from IDBI Trusteeship Services Limited provided, we report that the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date.

ii. In respect of inventories,

a. According to the information and explanation given to us, the physical verification of inventory has been conducted at reasonable intervals by the management during the year. However, we could not observe inventory verification in the absence of intimation from the management in this regard.

b. As per the information and explanation given to us, no material discrepancies between physical inventory and book records were noticed on physical verification.

iii. According to information and explanations given to us, the Company has granted unsecured loans to parties covered in the register maintained under Section 189 of the Companies Act, 2013. In respect of these loans;

a. In our opinion and as per information and explanation given to us, terms and conditions of grant of such loans are not prejudicial to the company's interest.

b. the terms of repayment of the principal amount and the payment of the interest have not been stipulated and hence we are unable to comment as to whether receipt of the principal amount and the interest are regular and

c. in the absence of stipulated terms and conditions, we are unable to comment as to whether there is any overdue amount for more than ninety days and whether reasonable steps have been taken by the Company for recovery of the principal amount and interest

iv. In our opinion and according to the information and explanations given to us, in respect of loans, investments, guarantees, and security, provisions of section 185 and 186 of the Companies Act, 2013 have been complied with.

v. According to the information and explanations given to us, the Company has not accepted deposits from the public. Hence provisions of clause (v) of paragraph 3 of the Report is not applicable to the company.

vi. According to the information and explanations given to us, we are of the opinion that maintenance of cost records has not been specified by the Central Government under sub section (1) of section 148 of the Act.

vii. In respect of statutory dues:

a. According to information and explanations given to us and on the basis of our examination on test check basis, the company was generally regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Service Tax, duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues to the appropriate authorities.

b. According to the information and explanations given to us, undisputed amounts, which were outstanding as at March 31, 2016 for a period of more than six months from the date of becoming payable are as follows:

c. According to the information and explanations given to us, dues that have not been deposited by the Company on account of disputes are as follows:

viii. In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of following dues to the financial institutions and banks during the year:

Further, company has issued debentures during the year.

ix. During the year, the company has not raised money by way of initial public offer or further public office (including debt instrument).According to the information and explanation given to us and on the basis of our examination on test check basis, we are of the opinion that the Company has used term loans for the purposes for which they were raised.

x. According to the information and explanation given to us, no fraud by the company or on the Company by its officers or employees has been noticed or reported during the year.

xi. According to the information and explanation given to us, the managerial remuneration has been paid in accordance with the provisions of section 197 read with Schedule V to the Companies Act.

xii. According to the information and explanation given to us, the company is not the Nidhi Company. Therefore, provisions of clause 3(xii) of the order are not applicable to the company.

xiii. According to the information and explanation given to us, transactions entered into by the company with the related parties are in compliance with sections 177 and 188 of Companies Act,2013 and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards;

xiv. The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

xv. According to the information and explanation given to us, the company has not entered into any non-cash transactions with directors or persons connected with them during the year.

xvi. According to the information and explanation given to us, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

[Referred to under 'Report on Other Legal and Regulatory Requirements' in the Independent Auditor's Report of even date to the members of USHER AGRO LIMITED on the standalone financial statements for the year ended 31st March 2016]

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

1. We have audited the internal financial controls over financial reporting of USHER AGRO Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

2. Management’s Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

3. Auditors’ Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the Company's internal financial controls system over financial reporting.

4. Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

5. Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified as at March 31, 2016:

6. Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by "the Institute of Chartered Accountants of India"

For Jayesh Sanghrajka & Co. LLP

Chartered Accountants

ICAI Firm Regn. No.: 104184W/W100075

Viraj Savla

Designated Partner

M. No.: 153525

Place: Mumbai

Date: 13^th August 2016