20th Annual Report 2014-2015 - Bombay Stock · PDF fileKindly note that soft copies of the Notice and Annual Report will be sent to the shareholders to their ... Ranga Reddy Dist

th20 Annual Report

2014-2015

Dear Shareholders,

Sub: Updation of contact details and Email-Ids

As you all know that The Ministry of Corporate Affairs has taken a 'Green Initiative in Corporate Governance' by issuing circulars allowing paperless compliances by Companies through electronic mode. The Shareholders can now receive various notices and documents through electronic mode by registering their e-mail addresses with the Company. Shareholders who have not registered their e-mail address with the Company can now register the same by submitting there Email Ids at [email protected]

Kindly note that soft copies of the Notice and Annual Report will be sent to the shareholders to their respective email id's. The shareholders who do not want to receive Notice and Annual Report through electronic mode may communicate the same to the email id of the Company mentioned above. Kindly also update the contact details if there are any changes in the registered contact details with us.

We are sure that as a responsible citizen, you will whole heartedly support this green initiative and co-operate with the Company to make it a success.

Thanking YouFor M/s. Farmax India Limited Sd/-M Srinivasa Reddy

Managing Director

th20 Annual Report 2014-2015

mailto:[email protected]

C O N T E N T S


1. Corporate Information

2. Notice of Annual General Meeting

3. Directors’ Report

4. Management’s Discussion and Analysis

5. Secretarial Audit Report

6. Auditor’s Report

7. Annexure to Auditor’s Report

8. Balance Sheet

9. Pro�it and Loss Account

10. Cash Flow Statement

11. Notes Forming part of the Financial Statements

12.

Proxy Form & Attendance Slip

1


CORPORATE INFORMATION

Board of Directors:

1. Mr. M. Srinivas Reddy - Chairman & Managing Director (DIN: 00882956)2. Ms. P. Priyanka - Independent Director (DIN: 02925766)3. Mr. A. V. Rama Raju - Independent Director (DIN: 01408193)4. Mr. E. Sudheer Reddy - Independent Director (DIN: 06402499) Chief Financial Officer

Ch. Vara Prasad

Registered Office:

Survey No. 658, Bowrampet Village , Qutubullapur Mandal,(Sub- Urban of Hyderabad) Ranga Reddy Dist.Telangana - 500043

Subsidiary:

Farmax International FZE - UAE

Auditors:

M/s Vijay Sai Kumar & Associates210/3RT, Vijayanagar ColonyHyderabad- 500057

Audit Committee: 1. Mr. A. V. Rama Raju - Chairman 2. Ms. P. Priyanka - Member3. Mr. E. Sudheer Reddy - Member Nomination & Remuneration Committee:

1. Mr. A. V. Rama Raju - Chairman 2. Ms. P. Priyanka - Member3. Mr. E. Sudheer Reddy - Member

Stakeholders Relationship Committee:

1. Ms. P. Priyanka - Chairperson 2. Mr. A. V. Rama Raju - Member 3. Mr. E. Sudheer Reddy - Member

2


Risk Management Committee

1. Mr. A. V. Rama Raju - Chairman2. Mr. M. Srinivas Reddy - Member 3. Ms. P. Priyanka - Member 4. Mr. E. Sudheer Reddy - Member

Bankers:

State Bank of India

Listing:

BSE Limited (Indonext Model)National Stock Exchange India LimitedAhmedabad Stock Exchange LimitedLuxembourg Stock Exchange (GDR's)

Registrar & Share Transfer Agents:

Bigshare Services Pvt Limited306, Right Wing, 3rd Floor, Amrutha Ville, Opp. Yashoda Hospital Somajiguda, Rajbhavan Road, Hyderabad 500082, Telanganawww.bigshareonline.comE- mail: [email protected]

Demat ISIN Number CDSL & NSDL:INE890I01035

Website:www.farmax.co.in

Investor Email-Id:[email protected]

Corporate Identity Number:

L27109TG1995PLC022190

http://www.bigshareonline.com


http://www.farmax.co.in

http://[email protected]

3

NOTICE

thNotice is hereby given that the 20 Annual General Meeting of the Shareholders of M/s FARMAX INDIA thLIMITED will be held on Wednesday, the 30 day of September, 2015 at 9:00 A.M. at registered office situated at

Survey No. 658, Bowrampet Village, Qutubullapur Mandal, (Sub- Urban of Hyderabad) Ranga Reddy Dist. Telangana - 500043, to transact the following business:

ORDINARY BUSINESS:

st1. To receive, consider and adopt the Audited Balance Sheet as at 31 March, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date together with the Notes attached thereto, along with the Report of Auditors and Directors thereon.

2. To appoint a director in place of Mr. Srinivasa Reddy Morthala (DIN: 00882956) who retires by rotation and being eligible, offers himself for re-appointment.

3. To ratify the appointment of M/s. Vijay Sai Kumar & Associates Chartered Accountants, Hyderabad, as Statutory Auditors and to fix their remuneration and for the purpose to consider and if, thought fit, to pass with or without modification(s), the following Ordinary Resolution thereof:

“RESOLVED THAT pursuant to the provisions of Section 139(2) and 142 of the Companies Act, 2013 and rules made there under and pursuant to recommendation of Audit Committee, and pursuant to the resolution passed

thby the Members at the 19 Annual General Meeting (AGM) held on 30th September, 2014 for the appointment of M/s. Vijay Sai Kumar & Associates (Firm Registration No. 004694S) as Statutory Auditors of the Company to hold office till the conclusion of the AGM to be held in the year 2019, be and is hereby ratified and that the Board of Directors be and is hereby authorized to fix the remuneration payable to them for the financial year ending 31st March, 2016 as may be determined by the Audit Committee in consultation with the Auditor from time to time.”

SPECIAL BUSINESS:

4. To Appoint Mr. A. V. Rama Raju as Independent Director of the Company

To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED that pursuant to the provisions of Sections 149, 150, 152, 160 and any other applicable

provisions of the Companies Act, 2013 and the rules made there under (including any statutory modification(s)

or re-enactment thereof for the time being in force) read with Schedule IV to the Companies Act, 2013, Mr. A. V.

Rama Raju (holding DIN: 01408193), Director of the Company whose period of office is not liable to

determination by retirement of directors by rotation and in respect of whom the Company has received a notice

in writing from a member proposing his candidature for the office of Director, be and is hereby appointed as an

Independent Director of the Company to hold office for five consecutive years for a term up to 31st March,

2019.”


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5. Amendment of Article of Association of the Company

To consider and if thought fit, to pass, with or without modification(s) the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to provisions of Section 5 read with section 14 and all other applicable provisions of the Companies Act, 2013 (including any statutory modification(s) or re-enactment thereof, for the time being in force) and the new draft Articles as contained in the Articles of Association submitted be and are hereby approved and adopted in substitution, and to the entire exclusion of the regulations contained in the existing Articles of Association of the Company.”

“RESOLVED FURTHER THAT the Board of Directors of the Company (which term shall be deemed to include any Committee of the Board constituted to exercise its powers, including the powers conferred by this resolution), be and are hereby severally authorised to take all such steps as may be necessary, proper and expedient to give effect to this resolution.”

For and on behalf of the Board of

Farmax India Limited

Sd/-

Place: Hyderabad M. Srinivasa Reddy

Date: 29.08.2015 Managing Director

DIN: 00882956


5


NOTES:

1. VOTE INSTEAD OF HIMSELF/HERSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. The instrument of Proxy in order to be effective shall be deposited at the Corporate Office of the Company by not less than 48 hours before the commencement of the Meeting.

Pursuant to the provisions of Section 105 of the Companies Act, 2013, a person can act as a proxy on behalf of not more than fifty (50) members and holding in aggregate not more than 10% of the total share capital of the Company carrying voting rights. A member holding more than 10% of the total share capital of the Company carrying voting rights may appoint a single person as proxy, who shall not act as a proxy for any other person or shareholder. The appointment of proxy shall be in the Form No. MGT.11 annexed herewith.

2. Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, in respect of the Special

Business to be transacted at the Annual General Meeting as set out in the Notice is annexed hereto.

3. The Register of Members and Share Transfer Books of the Company will remain closed from 26.09.2015

to 30.09.2015 (Both days inclusive).4. Members holding shares in the electronic form are requested to inform any changes in address/bank

mandate directly to their respective Depository Participants.

5. Members are requested to hand over the enclosed Attendance Slip, duly signed in accordance with their specimen signature(s) registered with the Company for admission to the meeting hall. Members who hold shares in dematerialised form are requested to bring their Client ID and DP ID Numbers for identification.

6. Corporate Members are requested to send to the Company's Registrar & Transfer Agent, a duly certified copy of the Board Resolution authorizing their representative to attend and vote at the Annual General Meeting.

7. In case of joint holders attending the Meeting, only such joint holders who are higher in the order of names will be entitled to vote.

8. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore requested to submit the PAN to their Depository Participant with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to the Company/Registrar and Share Transfer Agents (M/s. Bigshare Services Private Limited).

9. As a measure of austerity, copies of the annual report will not be distributed at the Annual General Meeting. Members are therefore, requested to bring their copies of the Annual Report to the Meeting.

10. Members holding shares in the same name under different ledger folios are requested to apply for

Consolidation of such folios and send the relevant share certificates to M/s. Bigshare Services Private

Limited, Share Transfer Agents of the Company for their doing the needful.

6


11. Members are requested to send their queries at least 10 days before the date of meeting so that

information can be made available at the meeting.

12. In respect of shares held in physical mode, all shareholders are requested to intimate changes, if any, in

their registered address immediately to the registrar and share transfer agent of the company and

correspond with them directly regarding share transfer/transmission /transposition, Demat / Remat,

change of address, issue of duplicate shares certificates, ECS and nomination facility.

13. In terms of Section 72 of the Companies Act, 2013, a member of the company may nominate a person on

whom the shares held by him/her shall vest in the event of his/her death. Members desirous of

availing this facility may submit nomination in prescribed Form-SH-13 to the company/RTA in case

shares are held in physical form, and to their respective depository participant, if held in electronic

form.

14. Electronic copy of the Annual Report for 2014-2015 is being sent to all the members whose email Ids are registered with the Company/Depository Participants(s) for communication purposes unless any

member has requested for a hard copy of the same. For members who have not registered their email address, physical copies of the Annual Report for 2014-2015 is being sent in the permitted mode.

th15. Members may also note that the Notice of the 20 Annual General Meeting and the Annual Report for 2014-2015 will also be available on the Company's website www.farmax.co.in for their download. The physical copies of the aforesaid documents will also be available at the Company's Registered Office for inspection during normal business hours on working days. Even after registering for e-communication, members are entitled to receive such communication in physical form, upon making a request for the same, by post free of cost. For any communication, the shareholders may also send requests to the Company's investor email id [email protected]

16. Voting through electronic means

Pursuant to Section 108 of the Companies Act, 2013, read with the relevant Rules of the Act, the Company is pleased to provide the facility to Members to exercise their right to vote by electronic means. The remote e-voting period will commence on Sunday, 27th September 2015 at 9.00 a.m. on and will end on Tuesday, 29th September, 2015. The facility for voting through ('Insta Poll') shall be made available at the meeting and the members attending the meeting who have not cast their vote by remote e-voting shall be able to vote at the meeting through 'Insta Poll'. The Company has appointed Mr. S. Sarveswar Reddy, Practicing Company Secretary, to act as the Scrutinizer, to scrutinize the Insta Poll and remote e-voting process in a fair and transparent manner. The Members desiring to vote through remote e-voting refer to the detailed procedure given hereinafter.

Procedure for remote e-voting

I. The Company has engaged the services of Karvy Computershare Private Limited (Karvy) for facilitating remote e-voting for AGM. The instructions for remote e-voting are as under:

(a) In case of Members receiving an e-mail from Karvy: (i) Launch an internet browser and open https://evoting.karvy.com

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(ii) Enter the login credentials (i.e. User ID and password). The Event No.+Folio No. or DP ID- Client ID will be your User ID. However, if you are already registered with Karvy for e- voting, you can use your existing User ID and password for casting your vote.

(iii) After entering the above details click on - Login.(iv) Password change menu will appear. Change the Password with a new Password of your choice. The new password shall comprise minimum 8 characters with at least one upper case (A-Z), one lower case (a-z), one numeric (0-9) and a special character (@,#,$,etc.) The system will also prompt you to update your contact details like mobile number, email ID, etc. on first login. You may also enter a secret question and answer of your choice to retrieve your password in case you forget it. It is strongly recommended that you do not share your password with any other person and that you take utmost care to keep your password confidential. You need to login again with the new credentials. (v) On successful login, the system will prompt you to select the E-Voting Event (vi) Select the EVENT of Farmax India Limited and click on - Submit . (vii) Now you are ready for e-voting as 'Cast Vote' page opens. (viii) Cast your vote by selecting appropriate option and click on 'Submit'. Click on 'OK' when

prompted. (ix) Upon confirmation, the message 'Vote cast successfully' will be displayed. (x) Once you have voted on the resolution, you will not be allowed to modify your vote. (xi) Institutional shareholders (i.e. other than individuals, HUF, NRI, etc.) are required to send scanned copy (PDF/JPG Format) of the relevant Board Resolution/ Authority Letter, along with attested specimen signature of the duly authorised signatory(ies) who are authorised to vote, to the Scrutinizer by an e-mail at They may also upload the same in the [email protected] module in their login. The scanned image of the above mentioned documents should be in the naming format “Corporate Name_EVENT NO.”

(b) In case of Shareholders receiving physical copy of the Notice of AGM and Attendance Slip

(I) INITIAL PASSWORD IS PROVIDED, AS FOLLOWS, AT THE BOTTOM OF THE ATTENDANCE SLIP.

EVEN (E-Voting Event Number) USER ID PASSWORD

(ii) Please follow all steps from Sr. No. (i) to Sr. No. (xi) above, to cast vote.

II. In case of any queries, you may refer to the 'Frequently Asked Questions' (FAQs) and 'e-voting user manual' available in the downloads section of Karvy's e-voting website

https://evoting.karvy.com.

III. If you are already registered with Karvy for e-voting then you can use your existing User ID and Password for casting vote.


https://evoting.karvy.com

8


thIV. The voting rights shall be as per the number of equity share held by the Member(s) as on 25 September, 2015. Members are eligible to cast vote electronically only if they are holding shares as on that date.

V. The Companies (Management and Administration) Amendment Rules, 2015 provides that the electronic voting period shall close at 5.00 p.m. on the date preceding the date of AGM.

thAccordingly, the voting period shall commence at Sunday, 27 September 2015 and will end at th5.00 p.m. on Tuesday, 29 September, 2015. The e-voting module shall be disabled by Karvy at

5.00 p.m. on the same day.

VI. Once the vote on a resolution is cast by a member, the member shall not be allowed to change it subsequently.

VII. The members who have cast their vote by remote e-voting may also attend the meeting but shall not be entitled to cast their vote again.

VIII. Members who have acquired shares after the despatch of the Annual Report and before the book closure may approach the Company for issuance of the User ID and Password for exercising their right to vote by electronic means.

a. If the mobile number of the member is registered against Folio No. / DP ID Client ID, the member may send SMS: MYEPWD <space> Event number+Folio No. or DP ID Client ID to 9212993399

Example for NSDL : MYEPWD <SPACE> IN12345612345678 Example for CDSL : MYEPWD <SPACE> 1402345612345678 Example for Physical : MYEPWD <SPACE> XXX1234567

b. If e-mail or mobile number of the member is registered against Folio No. / DP ID Client ID, then on the home page of https://evoting.karvy.com, the member may click “forgot password” and enter Folio No. or DP ID Client ID and PAN to generate a password.

c. Member may call Karvy's toll free number 1-800-3454-001

d. Member may send an e-mail request [email protected]

VI. The results shall be declared on or after the AGM. The results along with the Scrutinizer's Report shall also be placed on the website of the Company. In compliance with provisions of Section 108

of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014, the Company is pleased to provide members facility to exercise their right to vote at

ththe 20 Annual General Meeting (AGM) by electronic means and the business may be transacted through e-Voting Services provided by M/s Karvy Computershare Private Limited.

17. The voting rights of shareholders shall be in proportion to their shares of the paid up equity share capital of the Company as on the cut-off date (record date) of 23.09.2015.

18. Mr. S.Sarveswara Reddy, Practicing Company Secretary, bearing C.P. Number 7478 has been appointed as the Scrutinizer to scrutinize the e-voting process.

9

19. The Scrutinizer shall within a period not exceeding three (3) working days from the conclusion of the e-voting period unblock the votes in the presence of at least two (2) witnesses not in the employment of the Company and make a Scrutinizer's Report of the votes cast in favour or against, if any, forthwith to the Chairman of the Company.

20. The Results shall be declared on or after the AGM of the Company. The Results declared along with the Scrutinizer's Report shall be placed on the Company's website and on the www.farmax.co.in website of Karvy within two(2) days of passing of the resolutions at the AGM of the Company and communicated to the BSE Limited and National Stock Exchange limited.



Sd/-



DIN: 00882956


http://www.farmax.co.in

10

EXPLANATORY STATEMENT (Pursuant to Section 102(2) of the Companies Act, 2013)

Item No. 4:

In accordance with the relevant provisions of the Articles of Association of the Company and the erstwhile provisions of the Companies Act, 1956, Mr. A. V. Rama Raju (DIN: 01408193) was appointed as independent director by the Members of the Company. The provisions of the Companies Act, 2013 with respect to appointment and tenure of the Independent Directors have come into effect. As per the said provisions, the Independent Directors shall be appointed for not more than two terms of five years each and shall not be liable to retire by rotation at every AGM.

The Board of Directors of the Company have decided to adopt the provisions with respect to appointment and tenure of Independent Directors which is consistent with the Companies Act, 2013 and the amended Listing Agreement. Accordingly, the Independent Directors will serve for not more than two terms of five years each on the Board of the Company. In line with the requirements of the Companies Act, 2013, it is therefore proposed to appoint him, as Independent Director on the Board of the Company for a term up to five consecutive years, commencing from 01.04.2014. A brief profile of proposed Independent Director, including nature of his expertise, is provided in this Annual Report.

Notice has been received from a member proposing candidature of the above Director for the office of Independent Director of the Company. In the opinion of the Board, he fulfils the conditions specified in the Companies Act, 2013 and the Rules made thereunder for appointment as Independent Director of the Company.

None of the Directors or Key Managerial Personnel of the Company and their relatives, other than Independent Director, Mr. A. V. Rama Raju, are concerned or interested, financially or otherwise, in these Resolution.

Item: 5

Due to the enactment of majority provisions of the Companies Act, 2013 certain changes are required to be made in the Articles of Association of the Company. Some new articles/clauses are proposed to be inserted in relation to use of electronic mode for voting by members, participation in meeting of the Board by Directors, service of documents and maintenance of registers and records.

A general clause is also proposed to be inserted to the effect that if any provision as mentioned in the articles is inconsistent with the provisions of the Companies Act, 2013 and Rules made therein, then the provisions of the Companies Act, 2013 and rules made therein shall override the provisions of these Articles.


11

The Board therefore recommends the resolution under section 5 read with section 14 of the Companies Act, 2013 as a special resolution for your approval.

None of the Directors or key managerial personnel of the Company or their relatives are concerned or interested in the resolution



Sd/-



DIN: 00882956


12

DIRECTOR'S REPORT

To,The Members of Farmax India Limited,

We take pleasure in presenting the Twentieth Annual report together with Audited accounts for the year ended st31 March, 2015.

FINANCIAL SUMMARY/HIGHLIGHTS, OPERATIONS, STATE OF AFFARIS: The performance during the period ended 31st March, 2015 has been as under:

CONSOLIDATED PERFORMANCE REVIES:The Company has recorded a turnover of Rs. 2104.56 Lakhs and a Loss of Rs. (214.36) Lakhs in the current year against the turnover of Rs. 1740.53 Lakhs and a Loss of Rs. (888.39) Lakhs in the previous financial year ending 31.03.2014.

The Audited Consolidated Financial Statements, based on the financial statements received from subsidiary of the Company, as approved by their respective Board of Directors have been prepared in accordance with Accounting Standard (AS) 21 – Consolidated Financial Statements, Accounts Standard (AS) 23 –Accounting for Investments in Associates and Accounting Standard (AS) – 27 – Financial Reporting of interest in Joint Ventures in consolidated financial statement notified under Section 211 (3C) of the Companies Act, 1956, read with the Companies (Accounting Standards) Rules, 2006 (as amended). The said consolidated financial statements form part of this Annual Report and Accounts.

STANDALONE PERFORMANCE REVIEW:

The Company has recorded a turnover of Rs. 2104.56 Lakhs and a Loss of Rs. (210.11) Lakhs in the current year against the turnover of Rs. 1740.53 Lakhs and a Loss of Rs. (884.30) Lakhs in the previous financial year ending 31.03.2014.


(Rs. In Lakhs)

Particular

Consolidated Results Standalone Results

2014-2015 2013-2014 2014-2015 2013-2014

Total Income 2282.97 1778.33 2282.97 1778.33

Total Expenditure 2497.33 2464.60 2493.08 2662.63

Profit Before Tax (214.36) (888.39) (210.11) (884.30)

Provision for Tax 0 0 0 0

Profit/(Loss) after Tax (214.36) (888.39) (210.11) (884.30)

Transfer to General Reserves

0 0 0 0

Profit available for appropriation

0 0 0 0

Provision for Proposed Dividend

0 0 0 0

Provision for Corporate Tax

0 0 0 0

Balance Carried to Balance Sheet

0 0 0 0

13


EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

There were no material changes and commitments affecting financial position of the company between 31st March and the date of Board's Report (29.08.2015).

CHANGE IN THE NATURE OF BUSINESS:

During the year the Company has not changed its business activities.

DIVIDEND:

Your Directors have decided not to recommend dividend for the year as the Company do not have profit.

BOARD MEETINGS:

The Board of Directors met 12 times during the year on 29.05.2014, 14.08.2014, 28.08.2014, 25.10.2014, 10.11.2014, 12.12.2014, 02.02.2015, 04.03.2015, 05.03.2015, 06.03.2015, 09.03.2015, and 10.03.2015 and the maximum gap between any two meetings was less than four months, as stipulated under Clause 49.

DIRECTORS AND KEY MANANGERIAL PERSONNEL:

Mr. G. Omkareswar and Mr. I. Srinivasa Raju has resigned from the office of Directorship citing personal reasons during the year. The Board placed on record its sincere appreciation for the valuable services rendered by him during his tenure as director of the Company.

Pursuant to Sec. 149 and other applicable provisions of Companies Act, 2013, your Directors are seeking appointment of Mr. A. V. Rama Raju as Independent Director for five consecutive years for a term upto 31st March, 2019. Details of the proposal for appointment of Mr. A. V. Rama Raju is mentioned in the Explanatory

thStatement under Section 102 of Companies Act, 2013 of the Notice of 20 Annual General Meeting.

In accordance with the Companies Act, 2013 read with Articles of Association of the company the Director namely Mr. M. Srinivasa Reddy retires by rotation and being eligible, offers himself for re-appointment at this ensuing Annual General Meeting. Your Directors recommend his re-appointment.

During the year, Mr. Vara Prasad Ch, appointed as CFO of the Company

POLICY FOR SELECTION OF DIRECTORS AND DETERMINING DIRECTORS' INDEPENDENCE:

1. Scope:

This policy sets out the guiding principles for the Nomination & Remuneration Committee for identifying persons who are qualified to become Directors and to determine the independence of Directors, in case of their appointment as independent Directors of the Company.

2. Terms and References:

2.1 “Director” means a director appointed to the Board of a Company.

2.2 “Nomination and Remuneration Committee means the committee constituted in accordance with the provisions of Section 178 of the Companies Act, 2013 and clause 49 of the Equity Listing Agreement.

1414

2.3 “Independent Director” means a director referred to in sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49(II)(B) of the Equity Listing Agreement.

3. Policy:

Qualifications and criteria

3.1.1 The Nomination and Remuneration Committee, and the Board, shall review on annual basis, appropriate skills, knowledge and experience required of the Board as a whole and its individual members. The objective is to have a board with diverse background and experience that are relevant for the Company's operations.

3.1.2 In evaluating the suitability of individual Board member the Nomination and Remuneration Committee may take into account factors, such as:

Ø General understanding of the company's business dynamics, global business and social perspective;Ø Educational and professional backgroundØ Standing in the profession;Ø Personal and professional ethics, integrity and values;Ø Willingness to devote sufficient time and energy in carrying out their duties and responsibilities

effectively.

3.1.3 The proposed appointee shall also fulfill the following requirements:

Ø shall possess a Director Identification Number;Ø shall not b disqualified under the companies Act, 2013;Ø shall Endeavour to attend all Board Meeting and Wherever he is appointed as a Committee Member,

the Committee Meeting;Ø shall abide by the code of Conduct established by the company for Directors and senior Management

personnel;Ø shall disclose his concern or interest in any company or companies or bodies corporate, firms, or other

association of individuals including his shareholding at the first meeting of the Board in every financial year and thereafter whenever there is a change in the disclosures already made;

Ø Such other requirements as any be prescribed, from time to time, under the companies Act, 2013, Equity listing Agreements and other relevant laws.

3.1.4 The Nomination & Remuneration Committee shall evaluate each individual with the objective of having a group that best enables the success of the company's business.

3.2 criteria of independence

3.2.1 The Nomination & Remuneration Committee shall assess the independence of Directors at time of appointment/ re-appointment and the Board shall assess the same annually. The Board shall re-assess determinations of independence when any new interest or relationships are disclosed by a Director.

3.2.2 The criteria of independence shall be in accordance with the guidelines as laid down in companies Act, 2013 and Clause 49 of the Equity Listing Agreement.

3.2.3 The independent Director shall abide by the “code for independent Directors “as specified in Schedule IV to the companies Act, 2013.


15


3.3 other directorships/committee memberships

3.3.1 The Board members are expected to have adequate time and expertise and experience to contribute to effective Board performance Accordingly, members should voluntarily limit their directorships in other listed public limited companies in such a way that it does not interfere with their role as director of the company. The Nomination and Remuneration Committee shall take into account the nature of, and the time involved in a director service on other Boards, in evaluating the suitability of the individual Director and making its recommendations to the Board.

3.3.2 A Director shall not serve as director in more than 20 companies of which not more than 10 shall be public limited companies.

3.3.3 A Director shall not serve an independent Director in more than 7 listed companies and not more than 3 listed companies in case he is serving as a whole-time Director in any listed company.

3.3.4 A Director shall not be a member in more than 10 committee or act chairman of more than 5 committee across all companies in which he holds directorships.

For the purpose of considering the limit of the committee, Audit committee and stakeholder's relationship committee of all public limited companies, whether listed or not, shall be included and all other companies including private limited companies, foreign companies and companies under section 8 of the companies Act, 2013 shall be excluded.

Remuneration policy for Directors, key managerial personnel and other employees

1.� Scope:

1.1� This policy sets out the guiding principles for the Nomination and Remuneration committee for recommending to the Board the remuneration of the directors, key managerial personnel and other employees of the company.

2.� Terms and Reference:

In this policy the following terms shall have the following meanings:

2.1� “Director” means a director appointed to the Board of the company.

2.2� “key managerial personnel” means (i)� The Chief Executive Officer or the managing director or the manager;(ii)� The company secretary;(iii)� The whole-time director;(iv)� The chief financial Officer; and (v)� Such other office as may be prescribed under the companies Act, 2013

2.3� “Nomination and Remuneration committee” means the committee constituted by Board in accordance with the provisions of section 178 of the companies Act, 2013 and clause 49 of the Equity Listing Agreement.

16


3.� Policy:

3.1� Remuneration to Executive Director and key managerial personnel

3.1.1� The Board on the recommendation of the Nomination and Remuneration (NR) committee shall review and approve the remuneration payable to the Executive Director of the company within the overall approved by the shareholders.

3.1.2� The Board on the recommendation of the Nomination and Remuneration committee shall also review and approve the remuneration payable to the key managerial personnel of the company.

3.1.3� The remuneration structure to the Executive Director and key managerial personnel shall include the following components:(i)� Basic pay(ii)� Perquisites and Allowances (iii)� Stock Options(iv)� Commission (Applicable in case of Executive Directors)(v)� Retrial benefits(vi)� Annual performance Bonus

3.1.4� The Annual plan and Objectives for Executive committee shall be reviewed by the NR committee and Annual performance Bonus will be approved by the committee based on the achievement against the Annual plan and Objectives.

3.2 Remuneration to Non – Executive Directors

3.2.1� The Board, on the recommendation of the Nomination & Remuneration Committee, shall review and approve the remuneration payable to the Non – Executive Directors of the Company within the overall limits approved by the shareholders as per the provisions of Companies Act, 2013.

3.2.2� Non – Executive Directors shall be entitled to sitting fees attending the meetings of the Board and the Committees thereof. The Non- Executive Directors shall also be entitled to profit related commission in addition to the sitting fees.

3.3. Remuneration to other employees

3.3.1. Employees shall be assigned grades according to their qualifications and work experience, competencies as well as their roles and responsibilities in the organization. Individual remuneration shall be determined within the appropriate grade and shall be based on various factors such as job profile skill sets, seniority, experience and prevailing remuneration levels for equivalent jobs.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has received necessary declaration from Mr. A. V. Rama Raju, Ms. P. Priyanka and Mr. E. Sudheer Reddy, Independent Directors of the Company under Section 149(7) of the Companies Act, 2013 that they as Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6).(Annexure II)

17

AUDIT COMMITTEE:

The Audit Committee of the Company is constituted in line with the provisions of Clause 49 of the Listing Agreements with the Stock Exchanges read with Section 177 of the Companies Act, 2013.

II)� The terms of reference of the Audit Committee include a review of the following:

§ Overview of the Company's financial reporting process and disclosure of its financial information to ensure that the financial statements reflect a true and fair position and that sufficient and credible information is disclosed.

§ Recommending the appointment and removal of external auditors, fixation of audit fee and also approval for payment for any other services.

§ Discussion with external auditors before the audit commences, of the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

§ Reviewing the financial statements and draft audit report including quarterly / half yearly financial information.

§ Reviewing with management the annual financial statements before submission to the Board, focusing on:

1. Any changes in accounting policies and practices;2. Qualification in draft audit report;3. Significant adjustments arising out of audit;4. The going concern concept;5. Compliance with accounting standards;6. Compliance with stock exchange and legal requirements concerning financial statements and7. Any related party transactions

§ Reviewing the company's financial and risk management's policies.§ Disclosure of contingent liabilities.§ Reviewing with management, external and internal auditors, the adequacy of internal control systems.§ Reviewing the adequacy of internal audit function, including the audit character, the structure of the

internal audit department, approval of the audit plan and its execution, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit.

§ Discussion with internal auditors of any significant findings and follow-up thereon.§ Reviewing the findings of any internal investigations by the internal auditors into the matters where

there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

§ Looking into the reasons for substantial defaults in payments to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.

§ Reviewing compliances as regards the Company's Whistle Blower Policy.

III)� The previous Annual General Meeting of the Company was held on 30.09.2014 and Chairman of the Audit Committee, attended previous AGM.

IV)� The composition of the Audit Committee and the attendance of each member of the Audit Committee are given below:


18

Name Designation Category

Mr. A. V. Rama Raju Chairman NED(I)

*Ms. P. Priyanka Member NED(I)

*Mr. E. Sudheer Reddy Member NED(I)

#Mr. G. Omkareswar Member NED(I)

# Mr. I. Srinivasa Raju Member NED(I)

The Company has complied with all the requirements of Clause 49 (II) (A) of the Listing Agreement relating to the composition of the Audit Committee. During the financial year 2014-2015, (5) four meetings of the Audit Committee were held on the 29.05.2014, 14.08.2014, 10.11.2014 and 02.02.2015.

The details of the composition of the Committee and attendance of the members at the meetings are given below:

NED (I): Non Executive Independent DirectorED (P): Executive Director Promoter

*Appointed w.e.f. 30.09.2014#Resignation w.e.f 21.10.2014

NOMINATION & REMUNERATION COMMITTEE:

The details of composition of the Committee are given below:




Name Designation Category No. of meetings held during their tenure

No. of meetings attended

Mr. A. V. Rama Raju Chairman NED(I) 4 4

*Ms. P. Priyanka Member NED(I) 2 2

*Mr. E. Sudheer Reddy Member NED(I) 2 2

#Mr. G. Omkareswar Member NED(I) 2 2

# Mr. I. Srinivasa Raju Member NED(I) 2 2

19

Terms of reference:

The main term of reference of the Committee is to approve the fixation/revision of remuneration of the Managing Director/Whole Time Director of the Company and while approving:

· To take into account the financial position of the Company, trend in the industry, appointee's qualification, experience, past performance, past remuneration etc.

· To bring out objectivity in determining the remuneration package while striking a balance between the interest of the Company and the Shareholders.

Remuneration Policy:

The objectives of the remuneration policy are to motivate Directors to excel in their performance, recognize their contribution and retain talent in the organization and reward merit.

The remuneration levels are governed by industry pattern, qualifications and experience of the Directors, responsibilities shouldered, individual performance etc.

STAKEHOLDER RELATIONSHIP COMMITTEE (SHAREHOLDERS/INVESTOR GRIEVANCE AND SHARE TRANSFER COMMITTEE):

Composition, meetings and the attendance during the year:

The Shareholders/Investors Grievance Committee was constituted to look into the redressing of Shareholders and Investors complaints concerning transfer of shares, non receipt of Annual Reports, and non receipt of Dividend and other allied complaints.

A. The details of composition of the Committee are given below:





*Ms. P. Priyanka Chairman NED(I)

Mr. A. V. Rama Raju Member NED(I)


#Mr. G. Omkareswar Member NED(I)

# Mr. I. Srinivasa Raju Member NED(I)

20

B. Powers:

The Committee has been delegated with the following powers:

§ to redress shareholder and investor complaints relating to transfer of shares, Dematerialization of Shares, non-receipt of Annual Reports, non-receipt of declared dividend and other allied complaints.

§ to approve, transfer, transmission, and issue of duplicate / fresh share certificate(s)§ Consolidate and sub-division of share certificates etc.§ To redress, approve and dispose off any, other complaints, transactions and requests etc., received

from any shareholder of the company and investor in general.

The Board has delegated the power to process the transfer and transmission of shares to the Registrar and Share Transfer Agents, who process share transfers within a week of lodgment in the case of shares held in physical form.

The Board has designated Mr. Vara Prasad Ch, CFO of the Company as the Compliance Officer. The Company has designated an e-mail ID called for redressal of shareholders' [email protected]

complaints/grievances.

RISK MANAGEMENT COMMITTEE

A.) Composition:

The Details of composition of the Committee are given below:

NED (I) : Non Executive Independent DirectorNED (NI)� : Non Executive Non-Independent


Role and Responsibilities of the Committee includes the following:

Ø Framing of Risk Management Plan and PolicyØ Overseeing implementation of Risk Management Plan and PolicyØ Monitoring of Risk Management Plan and PolicyØ Validating the process of risk managementØ Validating the procedure for Risk minimization.Ø Periodically reviewing and evaluating the Risk Management Policy and practices with respect to

risk assessment and risk management processes.Ø Continually obtaining reasonable assurance from management that all known and emerging risks

have been identified and mitigated or managed.



Mr. A. V. Rama Raju Chairman NED (I)

#Mr. M. Srinivas Reddy Member NED(I)

*Ms. Priyanka Palacharla Member NED(I)


21


VIGIL MECHANISM:

Vigil Mechanism Policy has been established by the Company for directors and employees to report genuine concerns pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013. The same has been placed on the website of the Company.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Sec. 134(5) of the Companies Act, 2013 the Board of Directors of your Company hereby certifies and confirms that:

a.� In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b.�The Directors have selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

c.� The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities;

d.�The Directors have prepared the Annual accounts on a going concern basis.

e. The Directors of the Company had laid down internal financial controls and such internal financial controls are adequate and were operating effectively.

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

INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES COMPANY:

Your Company does have subsidiary Company M/s. Farmax International FZE in Dubai floated for the purpose of the expansion of the business of the Company and its products in the overseas market, for this purpose your company has issued GDR’s in year 2010 and raised USD 71.1 Million. However your company has not received the GDR amount, due to which there is no business activity in M/s. Farmax International FZE. The consolidated Financial Result of the Subsidiary is also presented along with the Company's financials.

22

EXTRACT OF ANNUAL RETURN:

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report (FORMAT IN ANNEXURE I)

AUDITORS AND AUDITORS REPORT

thIn the previous Annual General Meeting ( 19 AGM), the Company appointed M/s. Vijay Sai Kumar & thAssociates, Chartered Accountants as statutory Auditors to hold office until the conclusion of the 20 Annual

General Meeting. The Company has already received letter from them to the effect that their ratification, if made by the shareholders, would be within the prescribed limits and that they are not disqualified for re-appointment within the meaning of the Companies act 2013. The Board of Directors recommend their re-appointment/ ratification for the financial year 2015-16.

INTERNAL AUDIT:

Kushindhar is the internal Auditors of the Company.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of managerial personnel) Rules 2014, Mr. S. Sarveswar Reddy, Practicing Company Secretary has conducted Secretarial Audit of the Company for the FY 2014-15. The Secretarial Audit Report for the FY 2014-15 is annexed hereto and forms part of this Annual report. Secretarial Audit Report is self explanatory and the company will take necessary steps to appoint company secretary.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUT GO:

The required information as per Sec. 134 (3) (m) of the Companies Act 2013 is provided hereunder:

A. Conservation of Energy

Adequate measures have been taken to reduce energy consumption, wherever possible. Total energy consumption and energy consumption per unit of production is not applicable as company is not included in the industries specified in the schedule.

B. Technology Absorption

�

1. Research and Development (R&D) � : Nil

� 2. Technology absorption, adoption and innovation � : Nil

C. Foreign Exchange Earnings and Out Go

� Foreign Exchange Earnings� � � : Nil

� Foreign Exchange Outgo� � � : Nil


23

PUBLIC DEPOSITS:

Your Company has not accepted any deposits falling within the meaning of Sec.73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 during the financial year under review.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:

During the period under review there were no significant and material orders passed by the regulators or Courts or Tribunals impacting the going concern status and the company's operations in future.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

Your Company has well established procedures for internal control across its various locations, commensurate with its size and operations. The organization is adequately staffed with qualified and experienced personnel for implementing and monitoring the internal control environment. The internal audit function is adequately resourced commensurate with the operations of the Company and reports to the Audit Committee of the Board.

INSURANCE:

The company's properties have been adequately insured against major risks. All the insurable interests of your Company including inventories, buildings, plant and machinery, stock and liabilities under legislative enactments are adequately insured.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The company has not given loans, Guarantees or made any investments during the year under review.

RISK MANAGEMENT POLICY:

Your Company follows a comprehensive system of Risk Management. Your Company has adopted a procedure for assessment and minimization of probable risks. It ensures that all the risks are timely defined and mitigated in accordance with the well structured risk management process.

CORPORATE SOCIAL RESPONSIBILTY POLICY:

Since your Company does not has the net worth of Rs. 500 crores or more, or turnover of Rs. 1000 crores or more, or a net profit of Rs. 5 crores or more during the financial year, so section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is not applicable to the Company and hence the Company need not adopt any Corporate Social Responsibility Policy.

RELATED PARTY TRANSACTIONS:

During the year, the Company had entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the policy of the company on materiality of related party transactions. Relevant details or furnished in schedule 28 of financial statement.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at www.farmax.co.in


24

FORMAL ANNUAL EVALUATION:

As per section 149 of the Companies Act, 2013 read with clause VII (1) of the schedule IV and rules made thereunder, the independent directors of the company had a meeting on 28.03.2015 without attendance of non-independent directors and members of management. In the meeting the following issues were taken up:

(a) Review of the performance of non-independent directors and the Board as a whole;

(b) Review of the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors;

(c) Assessing the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

The meeting also reviewed and evaluated the performance of non-independent directors. The company has 1 (One) non-independent directors namely:

Mr. Srinivasa Reddy Morthala

The meeting recognized the significant contribution made by non-independent directors in the shaping up of the company and putting the company on accelerated growth path. They devoted more time and attention to bring up the company to the present level.

The meeting also reviewed and evaluated the performance of the Board as whole in terms of the following aspects:

§ Preparedness for Board/Committee meetings

§ Attendance at the Board/Committee meetings

§ Guidance on corporate strategy, risk policy, corporate performance and overseeing acquisitions and

disinvestments.

§ Monitoring the effectiveness of the company's governance practices

§ Ensuring a transparent board nomination process with the diversity of experience, knowledge,

perspective in the Board.

§ Ensuring the integrity of the company's accounting and financial reporting systems, including the

independent audit, and that appropriate systems of control are in place, in particular, systems for

financial and operational control and compliance with the law and relevant standards. It was noted that the Board Meetings have been conducted with the issuance of proper notice and circulation of the agenda of the meeting with the relevant notes thereon.

DISCLOSURE ABOUT COST AUDIT:

Cost Audit is not applicable to your Company.


25

RATIO OF REMUNERATION TO EACH DIRECTOR:

Under section 197(12) of the Companies Act, 2013, and Rule 5(1)(2) & (3) of the Companies(Appointment & Remuneration) Rules, 2014, a remuneration of Rs. 22,50,000 p.a. is being paid to Mr. Srinivasa Reddy Morthala , Chairman & Managing Director of the Company.

FIXED DEPOSITS:

Your Company does not accept or hold any fixed deposits within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under and as such, no amount on account of principal or interest on fixed deposits was outstanding as on date of the Balance Sheet.

Fixed Deposits with Euram Bank:

a. In 2010 the Company made a GDR Issue of an amount of USD 71.1 mn and deposited the proceeds in a Bank Account with European American Investment Bank AG, Vienna (EURAM Bank). Advisors to the Company who planned and coordinated various functions during to the GDR Issue obtained operational control of our Bank Accounts with EURAM Bank ostensibly to make payments to the intermediaries of the GDR Issue. We were eventually informed that control of the Bank Accounts passed on to one Vintage FZE (now known as Alta Vista International FZE). The Company later discovered that without its knowledge or approval, amounts aggregating USD 15.6 mn were transferred from the Company's Vienna Bank Account to the Bank Account of Company's wholly-owned subsidiary in the UAE (FZE). Further, the Company also discovered that a nearly identical amount was transferred from FZE's Bank Account to entities with which neither the Company nor the FZE has any business relationship. When we made inquiries with Vintage FZE, the company promised to return the funds, but we have not received any funds so far. Pending recovery by FZE and their onward remittance back to the Company, these amounts have been shown by the FZE as “Amounts payable to Farmax India Limited” on the Liabilities side and the “amounts receivable from suppliers” on the assets side. Reflecting this treatment, the Company also showed this amount as receivable from FZE. Despite repeated efforts, FZE is unable to recover any of these monies so far and is planning to initiate legal action to recover the funds. However, in line with the prudential accounting principles, in the Statements of Accounts for the year March 31, 2013, these amounts have been written off by FZE without prejudice to the right to recover these amounts. Due to the above reason the money receivable from FZE has also become unrecoverable. Therefore, following prudential accounting principles, the Company has also written off the amount receivable from its wholly-owned UAE subsidiary. Notwithstanding this accounting treatment, based on legal opinion, the Company is confident of recovering the amounts. Company has also filed a criminal complaint against Mr. Arun Panchariya the then Managing Director of (now known as Alta Vista International FZE) at that time and other suspects in the matter in the Medchal Court of Rangareddy vide S.R No. 7751 of 2013 dated 18.10.2013 and an FIR was issued in the matter vide FIR No. 664/2013 dated 29.10.2013 in Dundigal Police Station

b. As for the remaining amount of USD 56.6 million (equivalent to Rs. 2515.62 million as per the exchange rates prevalent at the time) on deposit with EURAM Bank, the Company, in August 2012, received a letter from EURAM Bank claiming that the remaining amount had been seized to repay a third party loan to the same Vintage FZE (now known as Alta Vista International FZE) pursuant to a Pledge Agreement alleged to have been executed by the Company with EURAM Bank. The Company did not authorize or execute any such Pledge Agreement and was not aware of any loan from Euram Bank to Vintage FZE. Pending the recovery of the amounts and without prejudice to its rights, the Company has written off the amounts, in line with the prudential accounting principles.


26

Accordingly, in the previous year, the balance of USD 56.6 million (equivalent to Rs. 2515.62 million as per the exchange rates prevalent at the time) on deposit with EURAM Bank was written off with a corresponding decrease in the securities premium account. Notwithstanding this accounting treatment, based on legal opinion, the Company is confident of recovering the amounts. We have also submitted the GDR case file to PMO office, Finance Minister Office & External Affairs Minister office and recently our GDR case has been forwarded from PMO office to Reserve Bank Of India through letter dated 24th Oct, 2014. We have also received a letter from SEBI asking information regarding the GDR issue and we have submitted all the information called for.

INDUSTRY BASED DISCLOSURES AS MANDATED BY THE RESPECTIVE LAWS GOVERNING THE COMPANY:

The Company is not a NBFC, Housing Companies etc., and hence Industry based disclosures is not required.

SECRETARIAL STANDARDS

EVENT BASED DISCLOSURES1. Issue of sweat equity share: NA2. Issue of shares with differential rights: NA3. Issue of shares under employee's stock option scheme: NA4. Disclosure on purchase by company or giving of loans by it for purchase of its shares: NA5. Buy back shares: NA 6. Disclosure about revision: NA7. Preferential Allotment of Shares:

Preferential Allotment of Shares: During the year the Company has allotted 12,58,71,427 Equity shares at an issue price of Rs 1.32. to the promoters and others and passed the following resolutions to give effects to such allotment. The proceeds of the issue were spent towards the objectives mentioned in the explanatory statement annexed to the notice of EGM dated 12.12.2014.


S.No. Particulars No. of shares allotted

Category Date ofEGM

Date of BM for allotment of shares

1. Increase in theauthorised capital of the Company from 50,00,00,000 to60,00,00,000

- - 24.01.2015 -

2. Alteration ofMemorandum ofAssociation forchange in authorised capital

- - 24.01.2015 -

3. Preferential Allotment of equity shares

12,58,71,427 Promoters and others

24.01.2015 04.03.2015, 05.03.2015, 06.03.2015, 09.03.2015 10.03.2015

27

EMPLOYEE RELATIONS:

Your Directors are pleased to record their sincere appreciation of the contribution by the staff at all levels in the improved performance of the Company. None of the employees is drawing Rs 5,00,000/- and above per month or Rs.60,00,000/- and above in aggregate per annum, the limits prescribed under Section 134 of the Companies Act, 2013

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy.The following is the summary of sexual harassment complaints received and disposed during the calendar year.� No. of complaints received: Nil� No. of complaints disposed off: Nil

ACKNOWLEDGEMENTS:

Your directors would like to express their grateful appreciation for assistance and co-operation received from clients, banks, investors, Government, other statutory authorities and all others associated with the company. Your directors also wish to place on record their deep sense of appreciation for the excellent contribution made by the employees at all levels, which enabled the company to achieve sustained growth in the operational performance during the year under review.


� � � � � Farmax India Limited

� �

Sd/-

Place: Hyderabad� � � � � M. Srinivasa Reddy

Date: 29.08.2015 � � � � Managing Director

� � � � � � � DIN: 00882956


28

MANAGEMENT DISCUSSION AND ANALYSIS(Forming part of Directors' Report)

Management Discussion and Analysis Report: The Management's views on the Company's performance and outlook are discussed below:

Economic OutlookThe economy of India has developed a lot in the F.Y 2014-15. Real gross domestic product (GDP) grew by 7.4 per cent, year on year, in the first half of the current fiscal year. This is better than the past years. The economy of India has developed and the impact can be seen on all major sectors of the economy, industry and services. However the deficient rainfall in the current year has resulted in the slowdown of the agriculture sector. But the industrial growth in newly formed Telangana state was severely affected due to power cuts.

Growth seems to be certain and economy has recovered very well. All this is a good sign for the FMCG Industry

The FMCG Sector and Indian consumers

Fast moving consumer goods (FMCG) is the fourth largest sector in the Indian economy The overall FMCG market is expected to increase at a compound annual growth rate (CAGR) of 14.7 per cent to touch US$ 110.4 billion during 2012-2020, with the rural FMCG market anticipated to increase at a CAGR of 17.7 per cent to reach US$ 100 billion during 2012-2025.

The FMCG sector has grown at an annual average of about 11 per cent over the last decade. Food products is the leading segment, accounting for 43 per cent of the overall market. Personal care (22 per cent) and fabric care (12 per cent) come next in terms of market share. Growing awareness, easier access, and changing lifestyles have been the key growth drivers for the sector.

The Government of India's policies and regulatory frameworks such as relaxation of license rules and approval of 51 per cent foreign direct investment (FDI) in multi-brand and 100 per cent in single-brand retail are some of the major growth drivers in this sector. The government has also amended the Sugarcane Control Order, 1966, and replaced the Statutory Minimum Price (SMP) of sugarcane with Fair and Remunerative Price (FRP) and the State Advised Price (SAP).

There is a lot of scope for growth in the FMCG sector from rural markets with consumption expected to grow in these areas as penetration of brands increases. Also, with rising per capita income, which is projected to expand at a CAGR of 7.4 per cent over the period 2013-19, the FMCG sector is anticipated to witness some major growth.

Performance of BusinessesYour Company's performance for the year 2014-15 has to be viewed in the context of the aforesaid economic and market environment. Some highlights are given below:

Ø Sales: During the year under review, Net Sales stood at Rs. 2104.56 Lakhs as against Rs. 1740.53

Lakhs registering a considerable increase in sales.


29

Ø Net profit/ Loss: During the year under review the company has incurred a net loss of Rs. 210.11

Lakhs as against Rs. 884.30 Lakhs in the previous financial year.

Note: As per Bank Statement the bank has not charged any interest on the loans availed. And it is not

possible to calculate the exact interest to debit the profit and loss account. Which resulted in

decrease in loss.

The financial condition of the Company is not at all good. The entire networth of Company was eroded.

Subsequently the Company was required to make a reference to the BIFR. Hence, a reference was made

dated 01.08.2013 to the BIFR and the reference of the Company has been registered vide case No. 91/2013

by BIFR vide their order as mentioned in their letter dated No. 3(F-1)/BC/2013 dated 19.12.2013.

Risk ManagementBusiness, Finance & Operational risksThe Company has adopted adequate risk management policy. Adequate measures have been adopted by the Company to combat the various risks including business risks (competition, consumer preferences, technology changes), finance risks (cost, credit, liquidity, foreign exchange) and so on.

The Company has in place a very stringent and responsive system under which all its distributors and vendors are assessed before being selected. Further, there exists a system by which all distributors' and vendors' site and operations are periodically reviewed by the Company for managing risks, if any.�

Regulatory and Compliance risksYour Company operates within the letter and spirit of all applicable laws such as:�

ü To obey all legal requirements at all times;�ü To understand exactly what legal requirements apply to the work function;�ü To consult the legal personnel if there are conflicting legal requirements in different

jurisdictions;�ü To strictly follow the directions from the legal personnel;�ü To address and resolve, in a timely manner, any legal compliance issues that have been identified;�ü Absolutely no violation of any law;�ü To immediately report any instance of violations to the Legal Department.

Your Company has set in place the requisite mechanism for meeting with the compliance requirements,

periodic monitoring of compliance, to avoid any deviations and regular updations to keep pace with the

regulatory changes.

Security RisksYour Company has installed comprehensive security programs to protect employees and assets at all its Offices and Plants.

During the Financial Year under review, no breaches or major accidents occurred at any of the Company's Plants. Your Company has installed the best of the security measures and processes to protect its personnel and assets.


30

Internal Controls & their adequacyYour Company has put in place an adequate system of internal controls commensurate with its size and nature of operations to ensure that the transactions are properly recorded, authorized and the assets are continuously monitored and safeguarded. The internal control system is backed up by well-documented policies, guidelines and procedures and concurrent reviews are carried out by the internal auditors, who submit reports monthly to the Audit Committee of the Board and the Management. The internal audit process is designed, inter alia, to cover all significant areas of the Company's operations such as accounting, finance, inventory, insurance, treasury, safeguarding of assets, IT processes and protection against unauthorized use etc. The Audit Committee reviews significant observations made in the internal audit reports along with actions initiated and reports to the Board periodically.

Your Company has a well-defined internal control system which is being adequately monitored. Checks and balances and control systems have been established to ensure that assets are safeguarded, utilized with proper authorization and recorded in the books of account.

Human Resource Development and industrial relationsThe Company operates in a highly competitive environment vis-à-vis attracting the best talent for its operations and therefore the human resources management has assumed vital importance in your Company. Your Company focuses on attracting, motivating and retaining the best talent. As we have been growing we are putting in place new HR programs to ensure that the organization is geared up to deliver the future.

Your Company's Human Resource agenda for the year focused on strengthening four key areas: building a robust talent pipeline, enhancing individual and organizational capabilities for future readiness, driving greater employee engagement and strengthening employee relations further through progressive people practices at the shop floor.

Forward Looking StatementThe Statements in the Management Discussion and Analysis Report may be seen as forward looking statements. The actual results may differ materially for those expressed or implied in the statement depending on circumstances.

Cautionary StatementStatement in the Management Discussion and Analysis describing the company's objectives, projections, estimates and expectations may be 'forward securities laws and regulations. As 'forward looking statements' are based on certain assumptions and expectations of future events over which the company exercises no control, the company cannot guarantee their accuracy nor can it warrant that the same will be realised by the company. Actual results could differ materially from those expressed or implied. Significant factors that could make a difference to the company's operations include domestic and international economic conditions affecting demand, supply and price conditions in the hospitality industry, changes in government regulations, tax regimes and other statutes.� � � � � � � � � � For and on behalf of the Board of

� Farmax India Limited

Sd/-

Place: Hyderabad�� M. Srinivasa Reddy

Date: 29.08.2015 � � � � Managing Director

� � � � � � � DIN: 00882956


31

DECLARATION BY MANAGING DIRECTOR OF AFFIRMATION BY DIRECTORS AND SENIOR MANAGEMENT PERSONNEL OF COMPLIANCE WITH THE CODE OF CONDUCT:

The shareholders

I, Srinivasa Reddy Morthala, managing Director of the Company do hereby declare that the directors and senior management of the Company have exercised their authority and powers and discharged their duties and functions in accordance with the requirements of the code of conduct as prescribed by the company and have adhered to the provisions of the same. � � For and on behalf of the Board of Farmax India Limited

�

Sd/-Place: Hyderabad�� M. Srinivasa Reddy Date: 29.08.2015� � � � � � Managing Director� � � � � � � 00882956DIN:


32


MGT 9

Extract of Annual Return

as on the Financial Year 31.03.2015[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and

Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i. CIN:- L27109TG1995PLC022190

ii. Registration Date

11.08.1995

iii. Name of the Company


iv. Category / Sub-Category of the Company

Company limited by shares/Non government company

v. Address of the Registered office and contact details

Survey No. 658, Bowrampet Village, Qutubullapur Mandal Sub-Urban Of Hyderabad-

500043, Telangana

vi. Whether listed company Yes / No

Yes

vii. Name, Address and Contact details of Registrar and Transfer Agent, if any

Bigshare Services Pvt. Ltd.

306, 3rd Floor, Right Wing, Amrutha Ville, Opp. Yashoda Hospital, Rajbhavan Road , Somajiguda, Hyderabad -

500082, Telangana

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY: All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

Sl. No. Name and Description of main products /services

NIC Code of the Product / service

% to total turnover of the company

1. Vermicelli

9961

66.75%

2. Atta

9961

22.68%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)i) Category-wise Share Holding;-

Category of

Shareholders

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

%Changeduringthe year

Demat

Physical

Total % of TotalShares

Demat Physical


S.No Name & Address CIN/GLN Holding/ Subsidiary

% of Shares held

Applicable Sec

1. Farmax International FZE NA Subsidiary 100 2(87)

33


A. Promoters

(1)Indian Demat Physical


Demat Physical

Total

% of TotalShares

Individual/

HUF

115269552

0

115269552

36.92

115470249

0

115470249

26.36

Central Govt

0

0

0

0

0

0

0

0

State Govt (s)

0

0

0

0

0

0

0

0

Bodies Corp.

36908300

0

36908300

11.82

36908300

50000000

86908300

19.84

Banks / FI

0

0

0

0

0

0

0

0

Any Other….

0

0

0

0

0

0

0

0

Sub-total(A) (1) :-

152177852

0

152177852

48.74

152378549

50000000

202378549

46.20

(2) Foreign

a) NRIs -

Individuals

0

0

0

0

0

0

0

0

b) Other –Individuals

0

0

0

0

0

0

0

0

c) Bodies Corp.

0

0

0

0

0

0

0

0

d) foreign Institutional Investors

0

0

0

0

0

0

0

0

e) AnyOther….

0

0

0

0

0

0

0

0

Sub-total(A) (2):-

0 0 0 0 0 0 0 0

Totalshareholding of

Promoter (A) = (A)(1)+(A)(2)

152177852 0 152177852 48.74 152378549 50000000 202378549 46.20

B. PublicShareholding

1.Institutions

a) Mutual Funds

0

0

0

0

0

0

0

0

b) Banks / FI

0

0

0

0

0

0

0

0

c) Central Govt

0

0

0

0

0

0

0

0

d) State Govt(s)

0

0

0

0

0

0

0

0

e) Venture Capital Funds

0

0

0

0

0

0

0

0

f) Insurance

Companies

0

0

0

0

0

0

0

0

g) FIIs 19825000

0

19825000

6.35

4638745

0

4638745

1.06

h) Foreign

Venture Capital Fund

0

0

0

0

0

0

0

0

i) Others

(specify)

0 0 0 0 0 0 0 0

2. Non Institutions

a) Bodies Corp. 26243219 49500000

75743219 24.26 33991410 54442856 88434266 20.19

34


i) Indian 0 0 0 0 0 0 0 0

ii) Overseas 0 0 0 0 0 0 0 0

b) Individuals 0 0 0 0 0 0 0 0

i) Individualshareholdersholding nominal share

capital up to Rs. 1 lakh

31781637 300030 32081667 10.28 30669604 301080 30970684 7.07

ii) Individual

shareholdersholding nominal share capital inexcess of Rs 1

lakh

29803993

0

29803993

9.55

82315312

21428571

103743883 23.86

c) Others (specify)

2568269

0

2568269

0.82

7905300

0

7905300

1.80

NRI’s 1769600

0

1769600

0.49

1742248

0

1742248

0.40

Clearing Member

796969

0

796969

0.26

6161352

0

6161352

1.41

Trust 1700

0

1700

0.00

1700

0

1700

0.00

Sub-total (B)(2):-

Total PublicShareholding(B)=(B)(1)+(B)(2)

110222118

49800030

160022148

51.26

159520371

0

235692878 53.80

C. Shares held byCustodian for

GDRs & ADRs

0

0

0

0

0

0

0

0

Public 96100000

0

96100000

0.00

96100000

0

96100000

0.00

Grand Total(A+B+C)

358499970 49800030

408300000 100 407998920 126172507 534171427 100

(ii)Shareholding of Promoters

Si. No

Shareholder’s Name

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

%Changeduringthe year

Demat

Physical

Total

% of TotalShares

Demat

Physical

Total

% of TotalShares

Nil

1. Mortala Srinivasa Reddy

101025000 Nil 101025000 24.74 101025000 Nil 101025000 18.91 -5.83

35

2. MSR India Ltd 36908300 Nil 36908300 9.04 86908300 Nil 86908300 16.27 7.23

3. Malla Reddy MortalaReddy

14244552 Nil 14244552 3.49 14445249 Nil 14445249 2.70 -0.79

(iii) Change in Promoters’ Shareholding ( please specify, if there is no change)Sl. No. Shareholder’s

Name

Shareholding at the beginning of the year

Share holding at the end of the year

No. of

Shares

% of total shares of the company

No. of

Shares

% of total sharesof the company

At the

beginning of

the year

15,21,77,852

37.27

20,23,78,549

37.89

At the beginning of the year Date wise Increase / Decrease in Promoters Share holding during the year specifying

the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc):

At the End

of the year

20,23,78,549

37.89

-

-

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

Sl. No. Shareholder

Name Shareholding at the

beginning of the year

Share holding at the end

of the year

No. of Shares

% of total shares of The company

No. of Shares

% of total sharesof the company

At the beginning of

the year

1. Navchetan Foods & Marketing Pvt Ltd.

14000000

3.42

0

0

2. Tridiva Foods and Distributorspvt ltd

14000000

3.42

0

0

3. Astiva agro foods pvt limited

13500000

3.30

0

0

4. Vaishali food suppliers pvt limited

11000000

2.69

0

0

5. Aqul foods

and marketing pvt limited

11000000

2.69

0

0

6. Leman diversified fund

9900000 2.42 0 0


36


7. Cresta fund ltd

5320000 1.30 3503745 0.65

8. Lotus Global investments

ltd

3470000 0.84 0 0

9. Rishab marketing&

distribution services hyderabad pvt ltd

3336999

0.81

27510000

5.15

10. Overskud multi asset managementprivate limited

2514089

0.61

27000000

5.05

Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc):

At the End

of the year

1. A C Foods and

Trading pvt ltd

25871428

4.84

2. C N Foods private

limited

21428571 4.01

3. Anantha reddy baddam

14285714

2.67

4. Chintapally

Gangadhar

10168000

1.90

5. Munkuntla

Subhash

8619807

1.61

6. Charanjit Singh arora

8600296

1.61

7. Navchetan

Foods & Marketing pvt ltd

7988596

1.49

8. Sanjeev Gorwara

7633663

1.42

9. SakaleswaraReddy

7142857

1.33

10. SNR Films India private limited

7142857

1.33

(v) Shareholding of Directors and Key Managerial Personnel:

Sl.No.

For Each of theDirectors and KMP

Shareholding at the beginning of the year

Cumulative Shareholding during the year

37


1. Srinivasa Reddy Morthala No. ofshares

% of totalshares ofthe company

No. ofshares

% of total shares of the company

At the beginning of the year

101025000 101025000 18.9124.74

Date wise Increase /

Decrease in Promoters

Share holding during the

year specifying the

reasons

for increase / decrease

(e.g. allotment / transfer /

bonus/ sweat equity etc):

At the End of the year

10,10,25,000

18.91

2. Priyanka Palacharla


7957840 (7472726)

1.94




year specifying the reasons

for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc):


485114

0.09

3. A.V . Rama Raju


800000 800000 0.14

0.19




year specifying the reasons

for increase / decrease

(e.g. allotment / transfer /

bonus/ sweat equity etc):


800000

0.14

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment

Indebtedness at the

beginning of the financial year

Secured Loansexcludingdeposits

UnsecuredLoans

Deposits TotalIndebtedness

38


Principal Amountii) Interest due but not paidiii) Interest accrued but not due

41,48,72,046

Total (i+ii+iii)

41,48,72,046

Change in Indebtedness during the financial year

Addition

Reduction

46,35,301

Net Change

46,35,301

Indebtedness at the end of the financial yeari) Principal Amount

ii) Interest due but not paid iii) Interest accrued but not due

41,02,36,745

Total (i+ii+iii)

41,02,36,745

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

Sl.no.

Particulars of Remuneration

Name of MD/WTD/ Manager

Total

Amount

MD

WTD

Manager

1. Gross salary

(a) Salary as per provisions

contained in section 17(1)

of the Income-tax Act,

1961

(b) Value of perquisites u/s

17(2) Income-tax Act,

1961

(c) Profits in lieu of salary

under section 17(3) Income tax

Act, 1961

M Srinivasa Reddy, 22,50,000/-

pa

Nil

Nil

Nil

Nil

Nil

Nil

Nil

22,50,000/-

2. Stock Option

Nil

Nil

Nil

3. Sweat Equity Nil Nil Nil

4. Commission- as % of profit- Others, specify…

Nil Nil Nil

5. Others, please specify Nil Nil Nil

39


6. Total (A) Nil Nil Nil

7. Ceiling as per the Act

B. Remuneration to other directors: Not Applicable

Sl.no.

Particulars of Remuneration

Name of Director

Total

Amount

3. Independent Directors

· Fee for attending board / committee meetings ·

Commission ·

Others, please specify

-

-

-

-

-

Total (1)

-

-

-

-

-

4. Other Non-Executive Directors · Fee for attending board / committee meetings · Commission · Others, please specify

-

-

-

-

-

-

-

-

-

-

Total (2)

-

-

-

-

-

Total (B)=(1+2)

-

-

-

- -

Total Managerial Remuneration

-

-

-

- -

Overall Ceiling as per the Act - - - - -

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

Sl.no.

Particulars of

Remuneration

Key Managerial Personnel

Ch. Varaprasad

CEO

Company

Secretary

CFO

Total

1. Gross salary

(a) Salary as per

provisions

contained in

section 17(1) of

the Income-tax

Act, 1961

(b) Value of

perquisites u/s

17(2) Income-tax

Act, 1961© Profits in lieu ofsalary under section17(3) Income-taxAct, 1961

-

-

3,97,000

3,97,000 August to March

40


2. Stock Option Nil Nil Nil

3. Sweat Equity Nil Nil Nil

4. Commission

-

as % of profit

-

others, specify…

Nil

Nil

Nil

5. Others, please

specify2

Nil

Nil

Nil

6. Total

3,97,000 pa

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of the Companies Act

Brief

Description Details of

Penalty /

Punishment/

Compounding fees imposed

Authority

[RD / NCLT / COURT]

Appeal

made,

if any

(give Details)

A. COMPANY Penalty

Punishment

Compounding

B. DIRECTORS

Penalty

Punishment

Compounding

C. OTHER OFFICERS IN DEFAULT

Penalty

Punishment

Compounding

41


ANNEXURE II

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Board of Directors M/s Farmax India Limited

Dear Sir,

I undertake to comply with the conditions laid down in Sub-clause of Clause 49 read with section 149 and Schedule IV of the Companies Act, 2013 in relation to conditions of independence and in particular:(a) I declare that upto the date of this certificate, apart from receiving director's remuneration, I did not have any material pecuniary relationship or transactions with the Company, its promoter, its directors, senior management or its holding Company, its subsidiary and associates as named in the Annexure thereto which may affect my independence as director on the Board of the Company. I further declare that I will not enter into any such relationship/transactions. However, i f and when I intend to enter into such relationships/transactions, whether material or non-material I shall keep prior approval of the Board. I agree that I shall cease to be an independent director from the date of entering into such relationship/transaction.(b) I declare that I am not related to promoters or persons occupying management positions at the Board level or at one level below the board and also have not been executive of the Company in the immediately preceding three financial years.(c) I was not a partner or an executive or was also not partner or executive during the preceding three years, of any of the following: (i) the statutory audit firm or the internal audit firm that is associated with the Company and (ii) the legal firm(s) and consulting firm(s) that have a material association with the company(d) I have not been a material suppliers, service provider or customer or lessor or lessee of the company, which may affect independence of the director, and was not a substantial shareholder of the Company i.e., owning two percent or more of the block of voting shares.Thanking You.

Yours Faithfully,Date: 29-8-2015� � � � � � Priyanka PalacharlaPlace: Hyderabad � � � DIN: 02925766

42

ANNEXURE II



Dear Sir,


Yours Faithfully,Date: 29-8-2015� � � � � � A. V. Rama RajuPlace: Hyderabad � � � DIN: 01408193


43

ANNEXURE II



Dear Sir,


Yours Faithfully,Date: 29-8-2015� � � Sudheer Reddy EndreddyPlace: Hyderabad � � � DIN: 06402499


44

FORM MR-3SECRETARIAL AUDIT REPORT

(Pursuant to section 204(1) of the Companies Act, 2013 and

Rule 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014STFOR THE FINANCIAL YEAR ENDED 31 MARCH, 2015

To

The Members of

M/s. Farmax India Limited

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence

to good corporate practices by M/s. Farmax India Limited (hereinafter called “the Company”). Secretarial

Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate

conducts/statutory compliances and expressing my opinion thereon.

Based on our verification of the Company's Books, Papers, Minute Books, Forms and Returns filed and other

Records maintained by the Company and also the information provided by the Company, its officers, agents

and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the st stcompany has, during the financial year commencing from 1 April, 2014 and ended 31 March, 2015, complied

with the statutory provisions listed hereunder and also that the Company has proper Board process and

compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

1. We have examined the books, papers, minute books, forms and returns filed and other records maintained by stM/s. Farmax India Limited (“The Company”) for the financial year ended on 31 March, 2015, according to

the provisions of:

i. The Companies Act, 2013 (the Act) and the rules made there under for specified sections notified and th stcame in to effect from 12 September, 2013 and sections and Rules notified and came in to effect from 1

April, 2014;

ii. The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the Rules made there under;

iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

iv. Foreign Exchange Management Act, 1999 and the Rules and Regulations made there under to the

extent of Foreign Direct Investment (FDI) and Overseas Direct Investment and External Commercial

Borrowings;

v. The Securities and Exchange Board of India Act, 1992 ('SEBI Act');


45

2. During the year the Company has allotted 12,58,71,427 equity shares on preferential basis to promoters and

others in accordance with The Securities and Exchange Board of India (Issue of Capital and Disclosure

Requirements) Regulations, 2009 as amended from time to time. And got them listed on NSE.

3. Provisions of the following Regulations and Guidelines prescribed under the Securities and Exchange Board

of India Act, 1992 (SEBI Act) were not applicable to the Company under the financial year under report

except yearly or event based disclosures in terms of SEBI Takeover Regulations & Insider Trading

Regulations.

i. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)

Regulations, 2011;

ii. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;

iii. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

iv. The Securities and Exchange Board of India (Registrars to an issue and Share Transfer Agents)

Regulations, 1993, regarding the Companies Act and dealing with client;

v. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008

vi. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock

Purchase Scheme) Guidelines, 1999;

4. We have also examined compliance with the applicable clauses of the following:

i. Secretarial Standards issued by the Institute of Company secretaries of India under the provisions of

Companies Act, 1956 and

ii. The Listing Agreements entered into by the Company with NSE Limited;


46

We further report that:-

The Company since engaged in the manufacture of FMCG is subjected to compliance of The Labour laws, The

Contract Labour (Regulation & Abolition) Act, 1970, Food Safety and Standards Act, 2006, The Environment

(Protection) Act, 1986, The Water (Prevention & Control of Pollution) Act, 1974, The Air (Prevention & Control

of Pollution) Act, 1981 and accordingly obtained licenses from State Pollution Control Board, Registering

Officer & Deputy Commissioner of Labour under the Contract Labour (Regulation & Abolition) Act, 1970, Food

Safety Designated Officer for carrying on operations and also filed necessary returns with in the time period.

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-

Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that

took place during the period under review were carried out in compliance with the provisions of the Act.

However it is observed that:

i. The Company has not appointed Company secretary for the period 2014-15.

ii. The Company has come out with GDR issue in the year 2010 for an issue size of 51 lakh GDRs at an issue price

of 14.1 dollar per GDR which are liable to be converted in to 25 equity shares of Re.1/- each.

It is noted that the Company has not received proceeds of GDR issue and for recovery of the same, FIR was

filed with Dundigal police station at Hyderabad vide no.664/2013 on 29.10.2013 and the issue is still

pending.

iii. The Securities and Exchange Board of India vide notice dated May 26, 2015 called for certain information

and the same has been furnished by the Company vide letter dated June 05, 2015 as part of investigation

proceedings in to GDR issues by SEBI.

� � � � � � � � For S.S. Reddy & Associates

Place: Hyderabad � Sarveswar Redd Date: 29.08.2015 S. Sarveswar Reddy Practicing Company Secretaries

� C. P. No: 7478


Sd/-

47

Annexure A

To

The Members of

M/s. Farmax India Limited

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the management of the company. Our responsibility

is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance

about the correctness of the secretarial records. The verification was done on test basis to ensure that correct

facts are reflected in secretarial records. We believe that the processes and practices we followed provide a

reasonable basis for our opinion.

3. Where ever required, we have obtained the Management representation about the compliance of laws, rules

and regulations and happening of events etc.

4. The compliance of provisions of Corporate and other applicable laws, rules, regulations, standards is the

responsibility of management. Our examination was limited to the verification of procedures on test basis.

5. The secretarial Audit report is neither an assurance as to future viability of the company nor of the efficacy or

effectiveness with which the management has conducted the affairs of the company.

� � � � � � � � For S.S. Reddy & Associates

Place: Hyderabad �Sarveswar Redd Date: 29.08.2015 S. Sarveswar Reddy Practicing Company Secretaries

� C. P. No: 7478


Sd/-

48

FORM NO. AOC.2Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto (Pursuant to clause (h) of sub-section (3)of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

1. Details of contracts or arrangements or transactions not at arm's length basis

(a)� Name(s) of the related party and nature of relationship(b)� Nature of contracts/arrangements/transactions(c)� Duration of the contracts/arrangements/transactions(d)� Salient terms of the contracts or arrangements or transactions including the value, if any(e)� Justification for entering into such contracts or arrangements or transactions(f)� date(s) of approval by the Board(g)� Amount paid as advances, if any:(h)� Date on which the special resolution was passed in general meeting as required under first proviso

to section 188

2. Details of material contracts or arrangement or transactions at arm's length basis

(a)� Name(s) of the related party and nature of relationship(b)� Nature of contracts/arrangements/transactions�(c)� Duration of the contracts/arrangements/transactions(d)� Salient terms of the contracts or arrangements or transactions including the value, if any:(e)� Date(s) of approval by the Board, if any:(f)� Amount paid as advances, if any:


49


INDEPENDENT AUDITORS' REPORT

To

The Members of

M/s. FARMAX INDIA LIMITED

Hyderabad.

Report on the Financial Statements

We have audited the accompanying financial statements of FARMAX INDIA LIMITED (“the Company”), stwhich comprise the Balance Sheet as at 31 March, 2015, the Statement of Profit and Loss and the Cash Flow

Statement for the year then ended and a summary of the 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 stated 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 flow 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 maintenance of adequate accounting records in accordance with the provisions of the Act for

safeguarding the assets of the Company and for preventing and detecting 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 adequate internal financial

controls, that were operating effectively for ensuring the accuracy and completeness of the accounting

records, relevant to the preparation and presentation of the financial statements that give a true and fair view

and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these 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 to be included in the audit report under the provisions of the Act and rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of

the Act. Those Standards require that we comply with the ethical requirements and plan and perform the

audit to obtain reasonable assurance about whether the financial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the 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 a true and fair view in order to design audit procedures that

50


are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the

accounting policies used and the reasonableness of the accounting estimates made by the Company's

Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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, 2015, and its profit and its cash flows for

the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 (“the Order”) issued by the

Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in

the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

a) We have sought and obtained all the information and explanations which to the best of our

knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company

so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt

with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards

specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,

2014.

e) On the basis of the written representations received from the directors as on 31st March, st2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31

March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

For Vijay Sai Kumar & Associates

Chartered Accountants

Firm Registration No.: 004694S

Place: Hyderabad B. Vijay Sai Kumar

Date : 28.05.2015 Proprietor

Membership No. : 027813

Sd/-

51


ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING “REPORT ON OTHER

LEGAL AND REGULATORY REQUIREMENTS” OF OUR REPORT OF EVEN DATE TO THE

MEMBERS OF FARMAX INDIA LIMITED

On the basis of such checks as we considered appropriate and according to the information and

explanations given to us during the course of audit, we state that:

(I) (a) The Company is maintaining proper records showing full particulars including quantitative

details and situation of fixed assets.

(b) The assets have been physically verified by the management in accordance with the phased

program of verification adopted by the Company, which in our opinion is reasonable having regard to

the size of the Company and nature of its assets. According to the information and explanations given to

us, no discrepancy between the book records and physical inventory was noticed on such verification.

(ii) (a) The inventory has been physically verified by the management at reasonable intervals during

the year. Inventory lying with third parties and in-transit have been verified by the management with

reference to the confirmations received from them and/or with reference to subsequent receipt of goods.

(b) In our opinion, the procedures for physical verification of inventory followed by the

management are reasonable and adequate in relation to the size of the Company and the nature of its

business.

(c) In our opinion and according to the information and explanations given to us, the Company

is maintaining proper records of inventory. The discrepancies noticed on verification between the

physical stock and book records were not material in relation to the operations of the Company and have

been properly dealt with in the books of account.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms or other

parties covered in the register maintained under Section 189 of the Act. Consequently, paragraphs iii (a)

and iii (b) of the said Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an

adequate internal control system commensurate with the size of the Company and the nature of its

business, for the purchase of inventory and fixed assets and for the sale of goods and services. During

the course of our audit, we have not observed any continuing failure to correct major weaknesses in the

internal control system.

(v) No deposits within the meaning of directives issued by RBI (Reserve Bank of India) and

Sections 73 to 76 or any other relevant provisions of the Act and rules framed thereunder have been

accepted by the Company.

52


(vi) On the basis of the records produced, we are of the opinion that prima facie, the cost records and

accounts prescribed by the Central Government under subsection (1) of section 148 of the Act have been

maintained by the Company. However, we are not required to and thus, have not carried out any detailed

examination of such accounts and records, with a view to ascertain whether these are accurate and complete.

(vii) (a) The Company is generally regular in depositing undisputed statutory dues including

provident fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of

customs, duty of excise, value added tax, cess and any other statutory dues applicable with the

appropriate authorities. According to the information and explanations given to us there were no stoutstanding statutory dues as on 31 of March, 2015 for a period of more than six months from the date

they became payable except central sales tax of Rs. 19,65,912.

(b) According to the information and explanations given to us there are amounts payable in respect of

income tax and excise duty which have not been deposited on account of disputes as detailed below:

(viii) The company has accumulated losses of Rs.133,91,90,300 which have exceeded the net worth of the

company by more than 50% during the current year. The company has earned cash profit of Rs.11,94,458 during

the current year and incurred cash loss of Rs. 6,82,18,815 in the preceding year.

The Company has made an application in Form A (Annexure 1) on 01-08-2013 for the registration as a sick unit under

provision of Sick Industrial Companies (Special provisions) Act, 1985 as the net worth of the Company is completely

eroded. The same has been registered in the Board as Case No. 91/2013 as per order dated 17-12-2013 of the Secretary,

Board for Industrial and Financial Reconstruction. It is pending for determination of sickness.

(ix) Based on our audit procedures and on the information and explanations given by the management, we

are of the opinion that, the Company has defaulted in repayment of dues to the bank. We draw your attention to

Note.5 & 7 of Notes to accounts.

Name of The Statute

Nature of Dues

Amount Period to which the Amount Relates

Forum Where Pending

The Central Excise Act

1944

Excise Duty

and Penalty

37,39,962 2007-08,

2008-09,

2009-10 &

2011-12

Appellate Authority - Commissioner

The Income Tax Act,

1961

Income Tax

1,74,89,574 2008-09,

2009-10 &

2010-11

CIT/Tribunals –Appeals

AP VAT

Act, 2005

VAT Audit Tax

23,84,775 2007-08,

2008-09,

2009-10

Commercial Tax Office, Hydernagar Circle

53


(x) In our opinion and according to the information and explanations given to us, the Company

has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) In our opinion and according to the information and explanations given to us, the term

loans outstanding at the beginning of the year were applied, for the purpose for which they

were obtained.

(xii) During the course of our examination of the books and records of the Company, carried

out in accordance with the generally accepted auditing practices in India and according to the

information and explanations given to us, we have neither come across any instances of

fraud on or by the Company, noticed or reported during the year, nor have we been informed of

any such case by the management.

For Vijay Sai Kumar & AssociatesChartered Accountants

Firm Registration No.: 004694S

B. Vijay Sai Kumar

Place : Hyderabad Proprietor

Date : 28.05.2015 Membership No. : 027813

Sd/-

54


note: 1 significant accounting policies

Basis for preparation of accounts

The accounts have been prepared to comply in all material aspects with applicable accounting principles in

India, the applicable Accounting Standards notified under Section 211(3c) of the Companies Act, 1956 and

the relevant provisions thereof. All assets and liabilities have been classified as current or non-current as per

the Company's normal operating cycle and other criteria set out in Revised Schedule VI to the Companies

Act, 1956. Based on the nature of products and the time between acquisition of assets for processing and their

realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for

the purpose of current / non-current classification of assets and liabilities.

Use of Estimates:

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that

affect the reported amounts of Assets and Liabilities, revenues and expenses, and related disclosures of

contingent liabilities in the financial statements and accompanying notes. Estimates are used for, but not

limited to valuation of investments, collect ability of receivables, sales returns, incentive discount offers,

valuation of inventory, depreciable lives of fixed assets and valuation of acquired intangibles and goodwill,

income taxes, stock based compensation and contingencies. Actual results could differ materially from

those estimates.

Fixed Assets and Depreciation

I) Fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses, if

any. Subsequent expenditures related to an item of fixed asset are added to its book value only if they

increase the future benefits from the existing asset beyond its previously assessed standard of

performance. Items of fixed assets that have been retired from active use and are held for disposal are

stated at the lower of their book value and net realizable value and are shown separately in the financial

statements under Other Current Assets if any. Any expected loss is recognized immediately in the profit

and loss account. Losses arising from the retirement of, and gains or losses arising from disposal of fixed

assets which are carried at cost are recognized in the profit and loss account if any.

ii) Depreciation has been provided under the written down value method at the rates prescribed under

Schedule XIV of the Companies Act, 1956. In respect of assets added / assets sold during the year, pro-

rata depreciation has been provided at the rates prescribed under Schedule XIV. Depreciation in respect

of assets acquired during the year whose cost does not exceed Rs. 5,000/- has been provided at 100%.

Revenue Recognitioni. Sales are recognized when the substantial risks and rewards of ownership in the goods are

transferred to the buyer, upon supply of goods, and are recorded net of trade discounts, rebates, sales taxes and excise duties.

ii. Income from services rendered is recognized as the service is performed and is booked based on agreements / arrangements with the concerned parties.

Interest income on Deposits is recognized during the time proportion method, based on interest

rates implicit in the transaction.

55


Expenditure

Expenses are accounted on accrual basis and the Provisions are made for all expected losses and liabilities.

Investments

Investments are classified into current and long term investments. Current investments are stated at the

lower of cost and fair value. Long term investments are stated at cost. A provision for diminution is made to

recognize a decline, other than temporary, in the value of long term investments. Investments that are

readily realizable and are intended to be held for not more than one year from the date, on which such

investments are made, are classified as current investments. All other investments are classified as long term

investments.

Employee benefits

Disclosure is made as per the requirements of the standard and the same is furnished below:1. Defined contribution plan

Contribution to provident fund is in the nature of defined contribution plan and is made

to EPFO.

2. Defined Benefit Plan

The company doesn't have policy of contribution to Gratuity and Leave encashment.

Hence no provision is made in the books.

Foreign Exchange Transactions

a) Foreign currency transactions arising during the year are recorded as per the prescribed foreign exchange

rates prevailing on the date of the transaction.

b) Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of

the year are stated at the contract rates and / or at the transaction Schedule :

Earnings per share

A basic earnings per share is calculated by dividing the net profit for the period attributable to equity

shareholders by the weighted average number of equity shares outstanding during the period. The

weighted average number of equity shares outstanding during the period and for all periods presented is

adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have

changed the number of equity shares outstanding, without a corresponding change in resources. For the

purpose of calculating diluted earnings per share, the net profit for the period attributable to equity

shareholders and the weighted average number of shares outstanding during the period is adjusted for the

effects of all dilutive potential equity shares if any.

56


Inventories

Inventories are valued at the lower of cost, computed on a weighted average basis, and estimated net

realizable value, after providing for cost of obsolescence and other anticipated losses, wherever considered

necessary. Finished goods and work-in-progress include costs of conversion and other costs incurred in

bringing the inventories to their present location and condition.

Impairment of Assets:

At each balance sheet date, the carrying amount of assets is tested for impairment so as to determinea) The provision for impairment loss, if any, required or

b) The reversal, if any, required for impairment loss recognized in previous periods.

Impairment loss is recognized if the carrying amount an asset exceeds its recoverable amount

Borrowing Costs:

Borrowing Costs that are directly attributable to long term project management and development activities

are capitalized as part of the projects cost when the activities that are necessary to prepare the asset for its

intended use or sale are in progress. Other borrowing costs are recognized as expenses in profit and loss

account in the period in which they are occur.

Income Taxes

Current tax is determined as the amount of tax payable in respect of taxable income for the year.

Deferred tax is recognized , subject to the consideration of prudence, on timing differences being

differences between taxable income and accounting income, that originate in one period and are

capable of reversal in one or more subsequent periods.

Deferred tax assets are not recognized on unabsorbed depreciation and losses unless there is a virtual

certainty that sufficient taxable profits will be available against which such deferred tax assets can be

realized

Cash and Cash Equivalents

Cash and cash equivalents include cash in hand, demand deposits with banks, other short-term highly

liquid investments with original maturities of three months or less.

Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are

classified as operating leases. Payments under such leases are charged to profit and loss account on a

straight line basis over the lease term.

57


Provisions and Contingent Liabilities

A provision is recognized when there is a present obligation as a result of a past event, it is probable that an

outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be

made. Provision is not discounted to its present value and is determined based on the best estimate required

to settle the obligation at the year end date. These are reviewed at each year end date and adjusted to reflect

the best current estimate.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence

of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events

not wholly within the control of the company or a present obligation that arises from past events where it is

either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount

cannot be made.

For M/s. Vijay Sai Kumar & Associates For Farmax India Limited


Firm Regn. No. 004694S

(B Vijay Sai Kumar) � � (M. Srinivasa Reddy) (A.V. Rama Raju)

Proprietor � � � � � Managing Director� Director

M.No.027813

Place: Hyderabad

Date: 28-05-2015

Sd/-Sd/- Sd/-

58


Rs in Lacs

Particulars Sch. No. As at 31st March

2015

As at 31st March

2014

Rs. Rs.

I. EQUITY AND LIABILITIES

(1) Shareholder's Funds

(a) Share Capital 1 5,341.71

4,083.00

(b) Reserves and Surplus 2 8,131.34

7,728.55

(c) Money received against share warrants -

-

(2) Share Application money pending allotment -

-

(3) Non-Current Liabilities

(a) Long-Term Borrowings 3 44.88

42.16

(b) Deferred Tax Liabilities (Net) -

-

(c) Other Long Term Liabilities -

-

(d) Long Term Provisions -

-

(4) Current Liabilities

(a) Short-Term Borrowings 4 4,057.49

4,106.56

(b) Trade Payables 5 249.18

158.42

(c) Other Current Liabilities 6 25.47

127.39

(d) Short-Term Provisions 7 16.38

30.22

Total Equity & Liabilities 17,866.45

16,276.30

II.ASSETS ` `

(1) Non-Current Assets

(a) Fixed Assets 8

(i) Gross Block 3,729.24

3,710.11

(ii) Depreciation 1,722.09

1,505.45

(iii) Net Block 2,007.15

2,204.66

(c) Deferred tax assets (net) -

-

(d) Long term loans and advances 9 450.03

449.39

(e) Other non-current assets 10 89.63

83.84

(2) Current Assets

(b) Inventories 11 884.91

335.67

(c) Trade receivables 12 693.36

17.37

(d) Cash and cash equivalents 13 23.61

1.42

(e) Short-term loans and advances 14 325.85

2.16

(f) Other current assets -

-

(g) Profit and Loss Account 15 13,391.91

13,181.79

Total Assets 17,866.45

16,276.30

NOTES TO ACCOUNTS 24

Schedules referred to above and notes attached there to form an integral part of Balance Sheet

This is the Balance Sheet referred to in our Report of even date.

FOR Vijay Sai Kumar and Associates

CHARTERED ACCOUNTANTS

(B VIJAY SAI KUMAR)

PROPRIETOR

Membership No. : 027813 PLACE : HYDERABAD

Sd/-

Sd/-

Firm Reg. No.: 004694S DATE : 28-05-2015

FARMAX INDIA LTD

Sy No 658, Bowrampet, Qutubullapur Mandal,

BALANCE SHEET AS AT 31ST MARCH, 2015

For Farmax India Ltd

Rangareddy District

(M SRINIVASA REDDY)

MANAGING DIRECTOR

59


Rs in Lacs

Sr.

NoParticulars Sch. No.

As at 31st March

2015

As at 31st March

2014

Rs. Rs.

I Revenue from operations 16 2,104.56

1,740.54

II Other Income 17 178.42

37.79

III III. Total Revenue (I +II) 2,282.97

1,778.33

IV Expenses:

Cost of materials consumed 18 2,777.95

1,582.77

Manufacturing Expenses 88.01

93.40

Changes in inventories of finished goods, work-in-progress and

Stock-in-Trade 19 (762.29)

16.80

Employee Benefit Expense 20 121.11

103.08

Financial Costs 21 6.01

617.72

Depreciation and Amortization Expense 22 222.06

202.12

Other Administrative Expenses 23 40.23

46.74

Total Expenses (IV) 2,493.09

2,662.63

V Profit before exceptional and extraordinary items and tax (III - IV) (210.12)

(884.30)

VI Exceptional Items - -

VII Profit before extraordinary items and tax (V - VI) (210.12) (884.30)

VIII Extraordinary Items - - IX Profit before tax (VII - VIII) (210.12)

(884.30)

X Tax expense:

(1) Current tax -

-

(2) Deferred tax -

-

XI Profit(Loss) from the perid from continuing operations (IX-X) (210.12)

(884.30)

XII Profit/(Loss) from discontinuing operations -

-

XIII Tax expense of discounting operations -

-

XIV Profit/(Loss) from Discontinuing operations (XII - XIII) -

-

XV Profit/(Loss) for the period (XI + XIV) (210.12)

(884.30)

XVI Earning per equity share:

(1) Basic (0.04)

(0.22)

(2) Diluted (0.04)

(0.22)

Schedules referred to above and notes attached there to form an integral part of Profit & Loss Statement

This is the Profit & Loss Statement referred to in our Report of even date.



(B VIJAY SAI KUMAR)

PROPRIETOR


Firm Reg. No.: 004694S DATE : 28-05-2015

MANAGING DIRECTOR

FARMAX INDIA LTD


PROFIT & LOSS STATEMENT FOR THE PERIOD ENDED ON 31ST MARCH, 2015

Rangareddy District


(M SRINIVASA REDDY)

Sd/-

Sd/-

60

Rs in Lacs

Particulars

A. Cash flow from operating activities

Net Profit / (Loss) before tax as per Profit and Loss Account (210.12)

(884.30)

Adjustments for:

Depreciation and amortisation Expenses 216.64

194.14

Finance costs on Account of Term Loans 6.01

613.69

Other Income (178.42)

(37.79)

Provision for advance to subsidiary -

-

Provison for Bills Receivables -

-

Provison for diminution in value Investments -

44.23

-

770.05

Operating Profit / (Loss) before working capital changes (165.89)

(114.26)

Adjustments for:

Trade and Other Receivables (675.99)

(1.75)

Inventories (549.24)

(52.47)

Other current assets (326.45)

2.49

Trade and Other Payables (25.00)

119.13

Net Working Capital (1,576.68)

67.40

Increase / (Decrease) in Working Capital (1,742.56)

(46.86)

Less Taxes Paid -

-

Cash Generated from Operating Activities (1,742.56)

(46.86)

B Cash flow from Investments

(Increase) / Decrease in Fixed Assets - Purchase and Disposal of Assets (19.14)

(0.65)

(Increase) / Decrease in Fixed Investments - Other Non Current Assets (3.67) 5.14

Other Income 178.42 37.79 Net Cash Flow from Investment Activities 155.61 42.28

C Cash Flow from Financing Activities

Proceeds from issue of Share Capital 1,661.50

-

Proceeds from Borrowings (Increase in Borrowings) (49.07)

611.92 Repayment of Term Loans 2.72

(1.31)

Repayment of Other long Term Liabilities -

Interest Paid (6.01)

(613.69)

Net Cash Flow from Financing Activities 1,609.14

(3.09)

Net cash flow during the year 22.19

(7.67)

Cash and Cash Equivalents at the beginning of the period 1.42

9.10

Cash and Cash Equivalents at the end of the period 23.62

1.42

Cash & Cash Equivalents Comprise of:

(i) Cash on hand 20.46

0.52

(ii) Balances with banks

(a) In current accounts 3.15

0.90

23.61

1.42

Summary of Significant Accounting Policies

In terms of our Report attached for and on behalf of the Board

FOR Vijay Sai Kumar and Associates FARMAX INDIA LIMITED


(M. SRINIVASA REDDY) (A V RAMA RAJU)

(B VIJAY SAI KUMAR) MANAGING DIRECTOR DIRECTOR

PROPRIETOR


Firm Reg. No.: 004694S

Place : Hyderabad

FARMAX INDIA LIMITED

Sy. No. 658, Bowrampet Village, Quthbullapur Mandal

Ranga Reddy Dist.

Cash Flow Statement for the period ending 31 March, 2015

For the Year ended 31-03-2015 For the Year ended 31-03-2014

Sd/- Sd/-Sd/-


61


61

Schedules Forming Integral Part of the Balance Sheet as at 31St March, 2015

Schedule : 1 Share Capital Rs in Lacs

Sr.

NoParticulars

As at 31st

March 2015

As at 31st

March 2014

Amount Amount

1 AUTHORIZED CAPITAL

Equity Shares of Rs.1/- each with voting rights 6,000.00 5,000.00

6,000.00 5,000.00

2 ISSUED , SUBSCRIBED SHARE CAPITAL


0 0

3 SUBSCRIBED AND FULLY PAID UP SHARE CAPITAL


Total in 5,341.71 4,083.00

Note 2b : Reconcialiation of Equity Shares Outstanding at the beginning and end of the year:

Opening

Balance

Closing

Balance

Equity Shares with voting rights at

Year ended 31-03-2014

Number of Shares 4,083.00 4,083.00

Amount Rs. 4,083.00 4,083.00


Number of Shares 5,341.71 5,341.71

Amount Rs. 5,341.71 5,341.71

Note 2 C: Terms / Rights attached to Equity Shares:

The Company has only one class of Equity Shares having par Value of Rs.1/- per share. Each holder of Equity Shares is entitled

to one vote per share

In the event of liquidation of the Company the holder of Equity Share will be entitled to receive remaining assets of the Company in

proportion to number of Equity Shares held.

Note 2-d: Details of Shareholders holding more than 5% Equity Shares in the Company:

No of Shares % held No of Shares % held

Equity Shares with voting rights

Mortala Srinivasa Reddy 1,010 19.00 1,010 24.74

FARMAX INDIA LTD

Particulars

Class of Shares / Name of the Shareholder As at 31-03-2014As at 31-03-2015

62


Schedule : 2 Reserve & Surplus Rs in Lacs -

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Capital Reserve

a) Gasifier Subsidy 0.65

0.65

2 Capital Redemption Reserve -

-

3 Securities Premium reserve 7,024.96

7,024.96

Add Additions during the year - on issue of Preferential Shares 402.79

-

Less Deposits Written Off -

-

7,428.40

7,025.61

3 Revaluation Reserve 702.95

702.95

Total 8,131.34

7,728.55

Schedule : 3 Long Term Borrowings Rs in Lacs -

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Bonds / Debentures -

-

2 Term Loan

- From Bank - -

- From Other Parties 44.88 39.41

3 Deferred Payment Liabilities - -

4 Deposit - -

5 Loans & Advances From Related Parties - -

6 Long Term Maturities of Finane lease obligation - - 7 Loans From Directors - - 8 Hire Purchas Loans (Secured by Hypothecation of Vehicles) - 2.75

Total 44.88 42.16

Schedule : 4 Short Term Borrowings Rs in Lacs -

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Loan Repayable on Demand

- From Bank

Rupee Loans 1. Cash Credit 1,112.00

3,131.54

2. S L C Loan 114.66

304.25

2. SBI Term Loan 2,830.82

670.77

- From Other Parties -

-

2 Loans & Advances From Related Parties -

-

3 Depsoits -

-

4 Others -

-

Total 4,057.49 4,106.56

FARMAX INDIA LTD

* The above loans have been sanctioned by SBI against Hypothecation of stocks and receivables, Plant and Machinery and

equitable mortgage of various properties and personal guarantee of director. Due to default in repayment of dues by the

company the bank has issued a notice on 15th November 2014 U/s 13 (2) of SARFAESI Act calling upon the company to

discharge entire liability within 60 days. The above amount has become due for payment.

63


FARMAX INDIA LTD

Schedule : 5 Trades Payable Rs in Lacs -

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Sundry Creditors for Material Supplies 247.44

153.73

2 Sundry Creditors for Services 1.74

4.69

Total 249.18

158.42

Schedule : 6 Other Current Liabilities Rs in Lacs -

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Advance received from Television Eighteen - 105.72

2 VAT Payable 0.52 0.19

3 TDS Paybale 5.29 1.47

4 Central Sales Tax Payable 19.66 20.01

Total 25.47 127.39

Schedule : 7 Short Term Provisions Rs in Lacs - Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

I Provision For Employees Benefit

1 Salaries Payable 11.16

11.30 2 EPF and ESIC Payable 0.37

0.32

II Others

1 Electricity & Power Charges Payable 3.97

5.07 2 Profession Tax Payable 0.03

-

3 Rent Payable 0.45

10.40

4 Rental Advance -

1.10

5 Audit Fee Payable 0.40

2.02

Total 16.38

30.22

64

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5.19

18

.87

-

1,

754.

06

1,02

5.72

129.

06

-

1,

154.

78

599.

27

70

9.46

4L

ab E

qu

imen

t25.

89%

120.

90

-

-

12

0.90

83.9

9

9.

56

-

93.5

5

27.3

5

36.9

1

5

Fu

rnit

ure

s &

Fix

ture

s25.

89%

31.8

2

-

-

31

.82

22

.44

2.

43

-

24.8

7

6.95

9.38

6

Veh

icle

s (C

ars)

25.

89%

149.

90

-

-

14

9.90

106.

72

11.1

8

-

117.

90

32

.00

43

.18

7O

ffic

e E

qu

ipm

ent

45.

07%

7.13

-

-

7.

13

2.72

1.

99

-

4.

71

2.43

4.42

8

Ele

ctri

cal

Inst

alla

tio

ns

25.

89%

50.4

7

-

-

50.4

7

28.9

5

5.57

-

34.5

2

15.9

5

21.5

2

9C

om

pu

ters

63.

16%

10.6

3

0.27

-

10.8

9

8.97

1.15

-

10.1

2

0.78

1.66

10

Sh

ed a

nd

Uti

liti

es4.

87%

75.8

4

-

-

75.8

4

30.4

4

2.21

-

32.6

5

43.1

9

45.4

0

To

tal

[A

+ B

+ C

+ D

] (

Cu

rren

t Y

ear)

3,71

0.11

19.1

4

-

3,72

9.24

1,50

5.45

216.

64

-

1,72

2.09

2,00

7.16

2,20

4.66

(P

rev

iou

s Y

ear)

- 2

013

-14

3,70

9.46

3.45

2.80

3,71

0.11

1,31

1.30

194.

14

-

1,50

5.45

2,20

4.66

2,39

8.15

FA

RM

AX

IN

DIA

LT

D

Sch

edu

les

Fo

rmin

g In

tegr

al

Pa

rt o

f th

e B

ala

nce

Sh

eet

as

at

31st

Ma

rch

, 20

15

Sr.

No

Par

ticu

lars

Rate

Gro

ss B

lock

D

epre

ciat

on

Net

Blo

ck

65


Schedules Forming Integral Part of the Balance Sheet as at 31st March, 2015

Schedule : 10 Long Term Loans and Advances Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

I) Capital Assets

a) Secured, Considered Good : 409.25

409.25

b) Unsecured, Considered Good : -

-

c) Doubtful -

-

II) Security Deposit

Telephone Deposit 0.02

0.02

Electricity Deposit 15.26

15.26

Excise Deposit 3.00

3.00

Rental Advance 1.09

0.45

Taxes paid under Protest 21.42

21.42

III) Loans & Advances to related parties -

-

IV) Other Loans & Advances -

-

Total 450.03

449.39

Schedule : 11 Other Non Current Assets Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Unamortised Expenses - -

Opening Balance - 13.40

Add Additions : RoC Filing Fees for Enhancement of Share Capital 9.09 -

9.09 13.40

Less Amortised during the year - 7.98 Closing Balance 9.09 5.42

2 Margin Money on Bank Guarantee 46.20 42.28 3 CENVAT Credit 8.72 10.52 4 Service Tax Credit 25.62 25.62

Total 89.63

83.84

Schedule : 13 Inventories Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Raw Material 43.99

268.17 2 Finished Goods 825.01

62.72

3 Packing Matrerial 15.79

4.40

4 Stores & Spares 0.12

0.39

Total 884.91

335.67

Schedule : 14 Trade Recievables Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Outstanding for more than six months

a) Secured, Considered Good : -

-


c) Doubtful -

2 Others


17.37


c) Doubtful -

Total 693.36

17.37

FARMAX INDIA LTD

66



FARMAX INDIA LTD

Schedule : 15 Cash & Cash Equivalent Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Cash-in-Hand

Cash Balance 20.46

0.52

Sub Total (A) 20.46

0.52

2 Balance in Current Accounts 3.15

0.90

Sub Total (B) 3.15

0.90

Total [ A + B + C ] 23.61

1.42

Schedule :16 Short Terms Loans and Advances Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

Advance Recoverable in cash or in kind or for value to be considered good

Advance paid to Parties 322.76 0.95 Input Tax Receivable 1.96 - Interest Receivable on Electricity Deposit 0.63 0.70 TDS Receivable on Interest on Electricity Deposit 0.07 - Prepaid Expenses 0.42

0.51

Total 325.85

2.16

Schedule : 17 Profit and Loss Account Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

5 Loss Balance Brought Forward from Previous Year 13,181.79

12,297.49

Less: Tax on Regular Assessment Paid -

-

Add: Profit / (Loss) for the period 210.12

884.30

Net Surplus (Deficit) in statement of Profit and Loss Account 13,391.91

13,181.79

Total 13,391.91

13,181.79

67


Schedules Forming Part of the Profit & Loss Accounts as at 31st March, 2015

Schedule : 18 Revenue from Operations Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

Sales 2,104.56

1,740.54

Schedule : 19 Other Income Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Cash Discounts Received 23.77

28.58

2 Rents Received 1.10

4.95

3 Interest received from Bank 3.92

2.99

4 Reversal of Interest Excess Charged By the Bank 38.60

-

5 Insurance Claim Received 4.60

-

6 Interest received from Electricity Deposit 0.70

1.28

7 Other Income 105.72

-

Total 178.42

37.79

Schedule : 20 Cost of Material Consumed Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

a) PURCHASES OF RAW MATERIALS AND PACKING MATERIAL

1 Opening Stock of Raw Material 272.56 203.68

Add Purchase of Raw Material 2,563.84 1,642.13

2,836.41 1,845.82

Less Closing Stock of Raw Material 59.77 272.56 Sub-total (a) 2,776.63 1,573.25

b) Cost of Stores and Spares Consumed

Opening Stock 0.39 - Add Purchase 1.06 9.90

1.44 9.90 Less Closing Stock 0.12 0.39

Sub-total (b) 1.32

9.52

Total 2,777.95

1,582.77

Schedule : 21 Change in Inventories Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

As at 31st March

2015

As at 31st March

2014

1 Opening Stock 62.72

79.52 2 Closing Stock 825.01

62.72

Total (762.29)

16.80

Schedule : 22 Manufacturing Expenses Rs. Rs.

Sr.

NoParticulars

1 Power and Fuel 54.57

75.75

2 Excise Duty 1.53

-

3 Factory Rent 6.00

6.00

4 Repairs and Maintenance - Plant and Machinery 24.15

9.18

5 Hamali Charges, Loading and Unloading 1.77

2.48

Total 88.01 93.40

FARMAX INDIA LTD

68



FARMAX INDIA LTD

Schedule : 23 Employement Benefit Expenses Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Salaries and Wages 118.70

100.17

2 Staff Welfare Expenses 0.04

0.30

3 Provident Fund and ESI 2.37

2.61

Total 121.11

103.08

Scedule :24 Financial Cost Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Interest on Mortgage Loan 5.71

6.59

2 Interest on S L C -

52.64

4 Interest on Term Loan -

99.73

5 Interest on Working Capital Loan -

454.74

6 Bank Charges 0.30

4.03

Total 6.01

617.72

Schedule : 25 Depreciation & Amortised Cost Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Depreciation 216.64 194.14

2 Amortised Expenses - Product Launch Expenses 5.42 7.98

Total 222.06 202.12

As per Bank Statement there were no entries / debits appeared pertains to Interest on SLC Loan, Term Loans and Working

Capital Loans. And it is not possible to acertain to find out the exact interest to debit the profit and loss account. The

interest amounts will be taken into account as and when the Bank debits to our above mentioned loans accounts.

69

Schedule : 26 Administrative, Selling and Distribution Expenses Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Advertisement Expenses 0.11 0.15

2 Discounts Issued 4.87 8.50

3 Other Selling and Distribution Expenses - 8.57

4 Auditors Remuneratio 1.02 2.25

5 Stock Audit Fees - 0.10

6 Legal, Professional and Consultancy Charges 2.87 3.26

7 Postage and Courier 0.34 0.38

8 Rent 0.63

9 Rates and Taxes 2.50 0.30

10 Listing Fee 4.98 3.12

11 Trademark Expenses - 0.12

12 Repairs and Maintenance 0.07 2.26

13 Travelling and Conveyance 7.58 5.38

14 Vehicle Maintenance 5.67 2.85

15 Printing and Stationery 3.72 4.43

16 Telephone Expenses 1.32 0.62

17 Transportation Charges 0.35 -

18 Sales Tax FY 2010-2013 1.71 -

19 Insurance 2.47 4.46

20 General Expenses 0.02 -

21 Sundry Balances Written Off - 0.02 -

Total 40.23

46.74

Sr.

No

Particulars As at 31st March

2015

As at 31st March

2014

Net Profit after tax as per statement of Profit and Loss Attributable

to Equity Shareholders 210.12-

884.30-

Weighted Average number of Equity Shares used as denominator

for calculating EPS 5,341.71

4,083.00

Face Value Per Share (Rs.) 1.00

1.00

Basic and Diluted Earnings Per Share (Rs.) 0.04-

0.22-


FARMAX INDIA LTD


70


Schedule : 27Contingent Liabilities and CommitmentsThe amount for which the Company is contingently liable is disclosed below:

Name of The

Statute

Nature of

Dues

Amount Period to which

the Amount Relates

Forum Where

Pending

The Central Excise Act 1944

Excise Duty and

Penalty

37,39,962 2007-08,2008-09,

2009-10 &

2011-12

Appellate Authority -

Commissioner

The Income Tax Act, 1961

Income Tax

1,74,89,574

2008-09,

2009-10

&

2010-11


AP VAT

Act, 2005

VAT Audit Tax

23,84,775

2007-08,

2008-09,

2009-10

Commercial Tax Office, Hydernagar

Circle

Schedule :28Related party disclosures

List of Related Parties:

i) Subsidiaries

ii) Key Management Personnel

: Farmax International FZE.(100%)

: Mr. M. Srinivasa Reddy, Chairman & MD.

Disclosure of transactions between the Company and

Related Parties and the status of outstanding balances as on

31st March,

2015

For the year ended For the year ended

31st March, 2015 31st March, 2014

i) Subsidiaries : Investment in Equity

Bad Debts for

diminution in Value

of Investments

Balance

Loan to Subsidiary

Bad Debts for

Advance

To subsidiary

Balance

ii) Key Management Personnel: Remuneration: Land Lease

-

-

-

-

-

-

-6, 00, 000

-

-

-

-

-

-

-6, 00,000

71


Schedule :29Consumption of Raw Materials, Spare parts and Components.

Imported

Particulars

Value(Rs.)

%

Raw Materials

Nil(Nil)

NIL

Spare Parts and Components

Nil(Nil)

NIL

Total

Nil(Nil)

NIL

Indigenous

Particulars

Value(Rs.)

%

Raw Materials

14,70,88,767(C.Y)

15,73,25,302 (P.Y)

100


1,67,54,249(C.Y)

9,51,725 (P.Y)

100

Total 16,38,43,016 (C.Y) 15,82,77,027 (P.Y)

100

Schedule :30

Consumption of Raw Materials, Stores, Spares & Consumables (As the details relating to item wise material consumed, sales, and inventories were not available, the same is not provided)

Particulars

Amount in Rs.

(As at 31-03-2015)

Amount in Rs.

(As at 31-03-2014)

Atta, Rawa, Maida Furnace Oil and Packing Materials, spares

16,38,43,016

15,82,77,027

Sales and Inventory details:

Particulars

Sales

(Rs.)

Closing Inventory

(Rs.)

Opening Inventory

(Rs.)

Atta, Pasta, Vermicelli, Maida, Rawa

21,04,55,504

(C.Y)

17,40,79,387

(P.Y)

8,84,91,168

3,30,88,834

Schedule :31

The Company operates in one major segment only. Hence the requirement of giving segmental information as per the

accounting standard AS - 17 ‘Segmental Reporting’ issued by ICAI is not applicable.

Schedule :32Deferred tax asset as per AS-22 “Accounting for Taxes on Income” has not been provided since there is no virtual certainty of

taxable income in near future.

Schedule :33

The Management is of the opinion that as on the Balance Sheet date, there are no indications of a material impairment loss on

Fixed Assets, hence the need to provide for impairment loss

as per AS-28 “Impairment Of Assets”

does not arise.

72


Schedule :34Foreign Currency Transactions:

i)

Earnings in foreign exchange

For the year ended

For the year ended

31st

March, 2015

31st

March, 2014

Export Sales on FOB Basis

-

-

ii)

Expenditure in foreign exchange

For the year ended

For the year ended

31st

March, 2015

31st

March, 2014

Schedule :35

Imports on CIF Basis -

Nil

Schedule :36

Auditors Remuneration:

Particulars

For the year ended 31-Mar-15


i. Statutory and Tax Audit Fees 1,00,000 2,00,000

ii. Other Services NIL NIL Total remuneration paid 1,00,000 2,00,000

Schedule :37

a)

The Company has made an application in Form A (Annexure 1) on 01-08-2013 for the registration as a sick unit under provision of Sick Industrial Companies (Special provisions) Act, 1985 as the net worth of the Company is

completely eroded. The same has been registered in the Board as Case No. 91/2013 as per order dated 17-12-2013 of the Secretary, Board for Industrial and Financial Reconstruction. It is pending for determination of sickness.

b)Previous year’s figures have been regrouped wherever necessary to confirm to the current year’s classification




(B Vijay Sai Kumar)

(M. Srinivasa Reddy) (A.V. Rama Raju)

Proprietor

Managing Director

Director

M.No.027813

Place: HyderabadDate: 28-05-2015

Sd/-Sd/-Sd/-

73


CONSOLIDATED FINANCIAL STATEMENTS

74

INDEPENDENT AUDITOR'S REPORT ON CONSOLIDATED FINANCIAL STATEMENT OF

M/S FARMAX INDIA LIMITED & ITS SUBSIDIARY

To The Members of Farmax India Limited.

Report on the Consolidated Financial StatementsWe have audited the accompanying consolidated financial statements of M/s Farmax India Limited, and its subsidray (the company and the subsidiary constitute “the Group”) which comprise the consolidated Balance Sheet as at March 31, 2015, and the consolidated Statement of Profit and Loss and Consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for Financial Statements:

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,

2013 (“the Act”) with respect to the preparation of these consolidated financial statements that give a true and

fair view of the financial position, financial performance and Cash flow 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

maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the

assets of the Company and for preventing and detecting 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 adequate internal financial controls, that were

operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the

preparation and presentation of the financial statements that give a true and fair view and are free from material

misstatement, whether due to fraud or error.

Auditors Responsibility:

Our responsibility is to express an opinion on these 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 to be included in the audit report under the provisions of the Act and rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the

Act. Those Standards require that we comply with the ethical requirements and plan and perform the audit to

obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the 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.


75

In making those risk assessments, the auditor considers internal financial control relevant to the Company's

preparation of the financial statements that give a true and fair view in order to design audit procedures that are

appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting

policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as

evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

audit opinion on the consolidated financial statements.

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid

consolidated 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:

a) In the case of the consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2015;

b) In the case of the consolidated Profit and Loss Account, of the loss of the group for the year ended on that date; and

c) In the case of the consolidated Cash Flow Statement, of the consolidated cash flows of the group for the year

ended on that date.

Other matters:

We did not audit the financial statements of the subsidiary, whose financial statements reflect total assets (net) of stRs.NIL, as at March 31 2015, total revenues of Rs. NIL and net cash outflows amounting to Rs.NIL for the year

then ended. These financial statements have been audited by other auditors whose reports have been furnished

to us be the Management, and our opinion is based solely on the reports of the other auditors. Our opinion is not

qualified in respect of this matter.

Our opinion is not qualified in respect of the above matter.

For M/s Vijay Sai Kumar & AssociatesChartered AccountantsFirm Regn. No. 004694SSd/-(B. Vijay Sai Kumar)ProprietorMembership No. : 027813



76

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1. SIGNIFICANT ACCOUNTING POLICIES

Basis for preparation of accountsa)� The financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) of India under the historical cost convention on the accrual basis, except for certain tangible assets which are carried at revalued amounts. GAAP comprises mandatory accounting standards notified under the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act, 2013. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard required a change in accounting policy hitherto in use.

b)� All assets and liabilities have been classified as current or non-current as per the Company`s normal operating cycle and other criteria set out in the Schedule III to the Companies Act 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle to be 12 months for the purpose of current and non-current classification of assets and liabilities.

Principles Of consolidationThe consolidated financial statements have been prepared in accordance with Accounting Standard As-21,' Consolidated Financial Statements” as notified under the companies (Accounting Standard) rules,2006.The consolidated financial statements relate to Farmax India Limited (“the company”) and its only 100% subsidiary “Farmax International FZE”. The company and its subsidiary comprise the Group. The consolidated financial statements are prepared on the following basis.

· The Financial Statements of the company and its subsidiary have been combined on a line –by-line basis by adding together the book values of like items of assets, liabilities, income and expenses after fully eliminating intra-group balances and intra-group transactions resulting in unrealized profits and losses.

· As the subsidiary is foreign, revenue and balance sheet items are consolidated at closing rate. Exchange gains /losses arising on conversion are recognized under Foreign Currency Translation Reserve.

· The Financial statement of the subsidiary are drawn up to the same reporting period as that of the stcompany i.e.31 March,2015

· As the subsidiary is wholly owned, no goodwill or Capital reserve or minority interest arises.

The subsidiaries considered in preparation of consolidated financial statements are:

Revenue Recognition

Sales are recognized when the substantial risks and rewards of ownership in the goods are transferred to the

buyer, upon supply of goods, and are recorded net of trade discounts, rebates, sales taxes and excise duties.

Income from services rendered is recognized as the service is performed and is booked based on agreements

/ arrangements with the concerned parties. Interest on investments is booked on a time proportion basis

taking into account the amounts invested and the rate of interest. Dividend income on investments is

accounted for when the right to receive the payment is established.


Name of the subsidiary Country of incorporation % of ownership

Farmax International FZE UAE 100

77

InvestmentsInvestments are classified into current and long term investments. Current investments are stated at the lower of cost and fair value. Long term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long term investments. Investments that are readily realizable and are intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long term investments.

Income TaxesCurrent tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognized , subject to the consideration of prudence, on timing differences being differences between taxable income and accounting income, that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognized on unabsorbed depreciation and losses unless there is a virtual certainty that sufficient taxable profits will be available against which such deferred tax assets can be realized

Cash and Cash EquivalentsCash and cash equivalents include cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less.

Accounting for effects of changes in foreign exchange ratesForeign currency transactions are accounted for at the exchange rates prevailing at the date of the transaction. Gains and losses resulting from the settlement of such transactions are recognized in the Profit and Loss account. Monetary and Non monetary Current Assets and liabilities are carried at fair value and other assets and liabilities are carried at historical cost.

Employee benefitsDisclosure is made as per the requirements of the standard and the same is furnished below:

1. Defined contribution planContribution to provident fund is in the nature of defined contribution plan and is made to EPFO.

2. Defined Benefit PlanThe company doesn't have policy of contribution to Gratuity and Leave encashment. Hence no provision is made in the books.

LeasesLeases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments under such leases are charged to profit and loss account on a straight line basis over the lease term.

Earnings per share

A basic earnings per share is calculated by dividing the net profit for the period attributable to equity

shareholders by the weighted average number of equity shares outstanding during the period. The weighted

average number of equity shares outstanding during the period and for all periods presented is adjusted for

events, such as bonus shares, other than the conversion of potential equity shares that have changed the

number of equity shares outstanding, without a corresponding change in resources. For the purpose of

calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the

weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive

potential equity shares if any.


78

Provisions and Contingent LiabilitiesA provision is recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. Provision is not discounted to its present value and is determined based on the best estimate required to settle the obligation at the yearend date. These are reviewed at each year end date and adjusted to reflect the best current estimate.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

Previous year's figures have been regrouped wherever necessary to conform to the current year's classification.

For M/s. Vijay Sai Kumar & Associates For M/s. Farmax India LimitedChartered AccountantsFirm Regn. No. 004694S

(B. Vijay Sai Kumar) � � � (M. Srinivasa Reddy) (A V Rama Raju)Proprietor� � � � � Managing Director� DirectorM.No.027813

Place: Hyderabad

Date: 28-05-2015


Sd/- Sd/- Sd/-

79


Rs in lacs

Particulars Sch. No. As at 31st March

2015

As at 31st March

2014

Rs. Rs.

I. EQUITY AND LIABILITIES

(1) Shareholder's Funds

(a) Share Capital 1 5,341.71

4,083.00

(b) Reserves and Surplus 2 9,816.86

9,414.08

(c) Money received against share warrants -

-

(2) Share Application money pending allotment -

-

(3) Non-Current Liabilities

(a) Long-Term Borrowings 3 44.88

42.16

(b) Deferred Tax Liabilities (Net) -

-

(c) Other Long Term Liabilities -

-

(d) Long Term Provisions -

-

(4) Current Liabilities

(a) Short-Term Borrowings 4 4,057.49

4,106.56

(b) Trade Payables 5 249.18

158.42

(c) Other Current Liabilities 6 25.47

127.39

(d) Short-Term Provisions 7 32.87

42.47

Total Equity & Liabilities 19,568.47

17,974.08

II.ASSETS ` `

(1) Non-Current Assets

(a) Fixed Assets 8

(i) Gross Block 3,729.24

3,710.11 (ii) Depreciation 1,722.09

1,505.45

(iii) Net Block 2,007.16

2,204.66

(c) Deferred tax assets (net) -

-

(d) Long term loans and advances 9 450.03

449.39

(e) Other non-current assets 10 89.63

83.84

(2) Current Assets

(b) Inventories 11 884.91

335.67

(c) Trade receivables 12 693.36

17.37

(d) Cash and cash equivalents 13 23.61

1.42

(e) Short-term loans and advances 14 325.85

2.16

(f) Other current assets -

-

(g) Profit and Loss Account 15 15,093.93

14,879.57

Total Assets 19,568.47

17,974.08

NOTES TO ACCOUNTS 24

Schedules referred to above and notes attached there to form an integral part of Balance Sheet

This is the Balance Sheet referred to in our Report of even date.



(B VIJAY SAI KUMAR)

PROPRIETOR


Sd/-

Sd/-

Firm Reg. No.: 004694S DATE : 28-05-2015

FARMAX INDIA LTD


Consolidated BALANCE SHEET AS AT 31ST MARCH, 2015


Rangareddy District

(M SRINIVASA REDDY)

MANAGING DIRECTOR

80


Rs in lacs

Sr.

NoParticulars Sch. No.

As at 31st March

2015

As at 31st March

2014

Rs. Rs.

I Revenue from operations 16 2,104.56 1,740.54

II Other Income 17 178.42 37.79

III III. Total Revenue (I +II) 2,282.97 1,778.33

IV Expenses:

Cost of materials consumed 18 2,777.95 1,582.77

Manufacturing Expenses 88.01 93.40

Changes in inventories of finished goods, work-in-progress and

Stock-in-Trade 19 (762.29) 16.80

Employee Benefit Expense 20 121.11 103.08

Financial Costs 21 6.01 617.72

Depreciation and Amortization Expense 22 222.06 202.12

Other Administrative Expenses 23 44.47 50.83

Total Expenses (IV) 2,497.33 2,666.72

V Profit before exceptional and extraordinary items and tax (III - IV) (214.36) (888.39)

VI Exceptional Items 0.00 0.00

VII Profit before extraordinary items and tax (V - VI) (214.36) (888.39)

VIII Extraordinary Items 0.00 0.00

IX Profit before tax (VII - VIII) (214.36) (888.39)

X Tax expense:

(1) Current tax 0.00 0.00

(2) Deferred tax 0.00 0.00

XI Profit(Loss) from the perid from continuing operations (IX-X) (214.36) (888.39)

XII Profit/(Loss) from discontinuing operations 0.00 0.00

XIII Tax expense of discounting operations 0.00 0.00

XIV Profit/(Loss) from Discontinuing operations (XII - XIII) 0.00 0.00

XV Profit/(Loss) for the period (XI + XIV) (214.36) (888.39)

XVI Earning per equity share:

(1) Basic (0.04) (0.22)

(2) Diluted (0.04) (0.22)

Schedules referred to above and notes attached there to form an integral part of Profit & Loss Statement

This is the Profit & Loss Statement referred to in our Report of even date.



(B VIJAY SAI KUMAR)

PROPRIETOR


Firm Reg. No.: 004694S DATE : 28-05-2015

MANAGING DIRECTOR

FARMAX INDIA LTD


Consolidated PROFIT & LOSS STATEMENT FOR THE PERIOD ENDED ON 31ST MARCH, 2015

Rangareddy District


(M SRINIVASA REDDY)

Sd/-

Sd/-

81


Rs in lacs

Particulars

A. Cash flow from operating activities

Net Profit / (Loss) before tax as per Profit and Loss Account (214.36)

(888.39)

Adjustments for:

Depreciation and amortisation Expenses 216.64

194.14

Finance costs on Account of Term Loans 6.01

613.69

Other Income (178.42)

(37.79)

Provision for advance to subsidiary -

-

Provison for Bills Receivables -

-

Provison for diminution in value Investments -

44.23

-

770.05

Operating Profit / (Loss) before working capital changes (170.13)

(118.34)

Adjustments for:

Trade and Other Receivables (675.99)

(1.75)

Inventories (549.24)

(52.47)

Other current assets (326.45)

2.49

Trade and Other Payables (20.76)

123.21

Net Working Capital (1,572.44)

71.48

Increase / (Decrease) in Working Capital (1,742.57)

(46.86)

Less Taxes Paid -

-

Cash Generated from Operating Activities (1,742.57)

(46.86)

B Cash flow from Investments

(Increase) / Decrease in Fixed Assets - Purchase and Disposal of Assets (19.14)

(0.65)

(Increase) / Decrease in Fixed Investments - Other Non Current Assets (3.67) 5.14 Other Income 178.42 37.79 Net Cash Flow from Investment Activities 155.61

42.28

C Cash Flow from Financing Activities

Proceeds from issue of Share Capital 1,661.50

-

Proceeds from Borrowings(Increase in Borrowings) (49.07)

611.92

Repayment of Term Loans 2.72

(1.31)

Repayment of Other long Term Liabilities -

Interest Paid (6.01)

(613.69)

Net Cash Flow from Financing Activities 1,609.14

(3.09)

Net cash flow during the year 22.18

(7.67)

Cash and Cash Equivalents at the beginning of the period 0.42

9.10

Cash and Cash Equivalents at the end of the period 22.61

0.42

Cash & Cash Equivalents Comprise of:

(i) Cash on hand 20.46

0.52

(ii) Balances with banks

(a) In current accounts 3.15

0.90Summary of Significant Accounting Policies

In terms of our Report attached for and on behalf of the Board

FOR Vijay Sai Kumar and Associates FARMAX INDIA LIMITED


(M. SRINIVASA REDDY) (A V RAMA RAJU)

(B VIJAY SAI KUMAR) MANAGING DIRECTOR DIRECTOR

PROPRIETOR


Firm Reg. No.: 28-05-2015

Place : Hyderabad

FARMAX INDIA LIMITED

Sy. No. 658, Bowrampet Village, Quthbullapur Mandal

Ranga Reddy Dist.

Cash Flow Statement for the period ending 31 March, 2015

For the Year ended 31-03-2015 For the Year ended 31-03-2014

Sd/- Sd/-Sd/-

82


Schedules Forming Integral Part of the Balance Sheet as at 31St March, 2015

Schedule : 1 Share Capital Rs Rs

Sr.

NoParticulars

As at 31st

March 2015

As at 31st

March 2014

Amount Amount

1 AUTHORIZED CAPITAL

Equity Shares of Rs.1/- each with voting rights 6,000.00

5,000.00

6,000.00

5,000.00

2 ISSUED , SUBSCRIBED SHARE CAPITAL


4,106.37

-

-

3 SUBSCRIBED AND FULLY PAID UP SHARE CAPITAL


4,083.00

Total in 5,341.71

4,083.00

Note 2b : Reconcialiation of Equity Shares Outstanding at the beginning and end of the year:

Opening

Balance

Closing

Balance


Number of Shares 4,083.00

4,083.00

Amount Rs. 4,083.00

4,083.00 Year ended 31-03-2015

Number of Shares 5,341.71

5,341.71

Amount Rs. 5,341.71

5,341.71

Note 2 C: Terms / Rights attached to Equity Shares:

The Company has only one class of Equity Shares having par Value of Rs.1/- per share. Each holder of Equity Shares is entitled

to one vote per share

In the event of liquidation of the Company the holder of Equity Share will be entitled to receive remaining assets of the Company in

proportion to number of Equity Shares held.

Note 2-d: Details of Shareholders holding more than 5% Equity Shares in the Company:

No of Shares % held No of Shares % held

Equity Shares with voting rights

Mortala Srinivasa Reddy 1,010.25

19.00

1,010.25

24.74

FARMAX INDIA LTD

Particulars

Class of Shares / Name of the Shareholder As at 31-03-2014As at 31-03-2015

Equity Shares with voting rights at

83


Schedule : 2 Reserve & Surplus Rs Rs

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Capital Reserve

a) Gasifier Subsidy 0.65

0.65

2 Capital Redemption Reserve -

-

3 Securities Premium reserve 7,427.75

7,024.96

Foreign Currency Transalation Reserve 1,685.52

1,685.52

Less Deposits Written Off -

-

9,113.92

8,711.13

3 Revaluation Reserve 702.95

702.95

Total in 9,816.86

9,414.08

Schedule : 3 Long Term Borrowings Rs Rs

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Bonds / Debentures -

-

2 Term Loan

- From Bank -

-

- From Other Parties 44.88

39.41

3 Deferred Payment Liabilities - -

4 Deposit - -

5 Loans & Advances From Related Parties - -

6 Long Term Maturities of Finane lease obligation - - 7 Loans From Directors - - 8 Hire Purchas Loans (Secured by Hypothecation of Vehicles) - 2.75

Total in 44.88

42.16

Schedule : 4 Short Term Borrowings Rs Rs

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Loan Repayable on Demand

- From Bank

Rupee Loans 1. Cash Credit 1,112.00

3,131.54

2. S L C Loan 114.66

304.25

2. SBI Term Loan 2,830.82

670.77

- From Other Parties -

-

2 Loans & Advances From Related Parties -

-

3 Depsoits -

-

4 Others -

-

Total in 4,057.49 4,106.56

FARMAX INDIA LTD

* The above loans have been sanctioned by SBI against Hypothecation of stocks and receivables, Plant and Machinery and

equitable mortgage of various properties and personal guarantee of director. Due to default in repayment of dues by the

company the bank has issued a notice on 15th November 2014 U/s 13 (2) of SARFAESI Act calling upon the company to

discharge entire liability within 60 days. The above amount has become due for payment.

84


FARMAX INDIA LTD

Schedule : 5 Trades Payable Rs Rs

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Sundry Creditors for Material Supplies 247.44

153.73

2 Sundry Creditors for Services 1.74

4.69

Total 249.18

158.42

Schedule : 6 Other Current Liabilities Rs Rs

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Advance received from Television Eighteen - 105.72

2 VAT Payable 0.52 0.19

3 TDS Paybale 5.29 1.47

4 Central Sales Tax Payable 19.66 20.01

Total in 25.47 127.39

Schedule : 7 Short Term Provisions Rs Rs

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Provision For Employees Benefit

Salaries Payable 11.16

11.30

EPF and ESIC Payable 0.37

0.32

2 Others

Electricity & Power Charges Payable 3.97

5.07

Profession Tax Payable 0.03

-

Rent Payable 0.45

10.40

Rental Advance -

1.10

Audit Fee Payable 0.40

2.02

Acrued Expenses 16.49

12.25

Total in 32.87

42.47

85

th20

An

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2015

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du

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31st

Ma

rch

2015

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du

rin

g

the

yea

r

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ion

du

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e

yea

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As

at

31st

Ma

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201

5

As

at

31st

Ma

rch

2015

As

at

31st

Ma

rch

2014

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

IT

an

gib

le A

sset

s

1L

and

0%9

65.

21

-

-

96

5.21

-

-

-

-

965.

21

96

5.21

2B

uil

din

gs

9.5

0%5

63.

03

-

-

56

3.03

19

5.50

5

3.49

-

24

8.99

314.

04

36

7.53

3P

lan

t an

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ach

iner

y18

.10%

1,7

35.

19

18.8

7

-

1,75

4.06

1,02

5.72

129

.06

-

1,15

4.78

59

9.27

709.

46

4L

ab E

qu

imen

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12

0.90

-

-

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83

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9.56

-

93.5

5

27.3

5

36.9

1

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25.8

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-

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-

24

.87

6.

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9.38

6V

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les

(Car

s)25

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14

9.90

-

-

149.

90

106.

72

11.1

8

-

117.

90

32.0

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43.1

8

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e E

qu

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45.0

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.13

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7.13

2.72

1.99

-

4.71

2.43

4.42

8E

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50.4

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-

-

50.4

7

28.9

5

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-

34.5

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15.9

5

21.5

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63.1

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.63

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9

8.97

1.15

-

10.1

2

0.78

1.66

10

Sh

ed a

nd

Uti

liti

es4

.87%

75.8

4

-

-

75.8

4

30.4

4

2.

21

-

32.6

5

43.1

9

45.4

0

To

tal

[A

+ B

+ C

+ D

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Cu

rren

t Y

ear

)3,

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0.11

19.1

4

-

3,72

9.24

1,50

5.45

21

6.64

-

1,72

2.09

2,00

7.16

2,20

4.66

(

Pre

vio

us

Ye

ar)

- 20

13

-14

3,7

09.

46

3.45

2.80

3,71

0.11

1,31

1.30

19

4.14

-

1,50

5.45

2,20

4.66

2,39

8.15

FA

RM

AX

IN

DIA

LT

D

Sch

edu

les

Fo

rmin

g In

tegr

al

Pa

rt o

f th

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ala

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Sh

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as

at

31st

Ma

rch

, 201

5

Sr.

No

Par

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Ra

te

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D

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on

Net

Blo

ck

86



Schedule : 10 Long Term Loans and Advances Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

I) Capital Assets


409.25


-

c) Doubtful -

-

II) Security Deposit

Telephone Deposit 0.02

0.02

Electricity Deposit 15.26

15.26

Excise Deposit 3.00

3.00

Rental Advance 1.09

0.45

Taxes paid under Protest 21.42

21.42

III) Loans & Advances to related parties -

-

IV) Other Loans & Advances -

-

Total in 450.03

449.39

Schedule : 11 Other Non Current Assets Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Unamortised Expenses -

-

Opening Balance -

13.40 Add Additions : RoC Filing Fees for Enhancement of Share Capital 9.09

-

9.09

13.40

Less Amortised during the year -

7.98

Closing Balance 9.09

5.42

2 Margin Money on Bank Guarantee 46.20

42.28

3 CENVAT Credit 8.72

10.52

4 Service Tax Credit 25.62

25.62

Total in 89.63

83.84

Schedule : 13 Inventories Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Raw Material 43.99

268.17

2 Finished Goods 825.01

62.72

3 Packing Matrerial 15.79

4.40

4 Stores & Spares 0.12

0.39

Total in 884.91

335.67

FARMAX INDIA LTD

87



FARMAX INDIA LTD

Schedule : 14 Trade Recievables Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Outstanding for more than six months

a) Secured, Considered Good : -

-


c) Doubtful -

2 Others


17.37


c) Doubtful -

Total in 693.36

17.37

Schedule : 15 Cash & Cash Equivalent Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Cash-in-Hand

Cash Balance 20.46

0.52

Petty Cash Balance - -

Sub Total (A) 20.46 0.52 2 Balance in Current Accounts 3.15 0.90

Sub Total (B) 3.15 0.90 Total [ A + B + C ] 23.61

1.42

Schedule :16 Short Terms Loans and Advances Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

Advance Recoverable in cash or in kind or for value to be considered good

Advance paid to Parties 322.76

0.95

Input Tax Receivable - Telangana VAT 1.96

-

Interest Receivable on Electricity Deposit 0.63

0.70

TDS Receivable on Interest on Electricity Deposit 0.07

-

Prepaid Expenses 0.42

0.51

Total in 325.85

2.16

Schedule : 17 Profit and Loss Account Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

5 Loss Balance Brought Forward from Previous Year 14,879.57

13,991.18

Less: Tax on Regular Assessment Paid -

-

Add: Profit / (Loss) for the period 214.36

888.39

Net Surplus (Deficit) in statement of Profit and Loss Account 15,093.93

14,879.57

Total in 15,093.93 14,879.57

88



Schedule : 18 Revenue from Operations Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

Sales 2,104.56

1,740.54

Schedule : 19 Other Income Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Cash Discounts Received 23.77

28.58

2 Rents Received 1.10

4.95

3 Interest received from Bank 3.92

2.99

4 Insurance Claim Received 4.60

-

5 Interest received from Electricity Deposit 0.70

1.28

6 Reversal of Interest Excess Charged by the Bank 38.60

-

7 Other Income 105.72

-

Total in 178.42 37.79

Schedule : 20 Cost of Material Consumed Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

a) PURCHASES OF RAW MATERIALS AND PACKING MATERIAL

1 Opening Stock of Raw Material 272.56 203.68 Add Purchase of Raw Material 2,563.84 1,642.13

2,836.41

1,845.82

Less Closing Stock of Raw Material 59.77

272.56

Sub-total (a) 2,776.63

1,573.25

b) Cost of Stores and Spares Consumed

Opening Stock 0.39

- Add Purchase 1.06

9.90

1.44

9.90

Less Closing Stock 0.12

0.39

Sub-total (b) 1.32

9.52

Total in 2,777.95

1,582.77

Schedule : 21 Change in Inventories Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Opening Stock 62.72

79.52

2 Closing Stock 825.01

62.72

Total in (762.29)

16.80

FARMAX INDIA LTD

89



FARMAX INDIA LTD

Schedule : 22 Manufacturing Expenses Rs. Rs.

Sr.

NoParticulars - -

1 Power and Fuel 54.57

75.75

2 Excise Duty 1.53

-

3 Factory Rent 6.00

6.00

4 Repairs and Maintenance - Plant and Machinery 24.15

9.18

5 Hamali Charges, Loading and Unloading 1.77

2.48

Total in 88.01

93.40

Schedule : 23 Employement Benefit Expenses Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Salaries and Wages 118.70 100.17

2 Staff Welfare Expenses 0.04 0.30

3 Provident Fund and ESI 2.37 2.61 Total in 121.11 103.08

Scedule :24 Financial Cost Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Interest on Mortgage Loan 5.71

613.69

4 Interest on Term Loan -

- 5 Interest on Working Capital Loan -

-

6 Bank Charges 0.30

4.03 Total in 6.01

617.72

Schedule : 25 Depreciation & Amortised Cost Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Depreciation 216.64

194.14

2 Amortised Expenses - Product Launch Expenses 5.42

7.98

Total in 222.06

202.12

As per Bank Statement there were no entries / debits appeared pertains to Interest on SLC Loan, Term Loans and Working

Capital Loans. And it is not possible to acertain to find out the exact interest to debit the profit and loss account. The

interest amounts will be taken into account as and when the Bank debits to our above mentioned loans accounts.

90



FARMAX INDIA LTD

Schedule : 26 Administrative, Selling and Distribution Expenses Rs. Rs.

Sr.

NoParticulars

As at 31st March

2015

As at 31st March

2014

1 Advertisement Expenses 0.11 0.15

2 Discounts Issued 4.87 8.50

3 Other Selling and Distribution Expenses - 8.57

4 Auditors Remuneration 1.02 2.25

5 Stock Audit Fees - 0.10

6 Legal, Professional and Consultancy Charges 2.87 3.02

7 Postage and Courier 0.34 0.38

8 Rent 0.63

9 Renewal Fees 4.24 4.09

10 Rates and Taxes 2.50 0.30

11 Listing Fee 4.98 3.12

12 Trademark Expenses - 0.12

13 Service Tax on Auditors Remuneration - 0.25

14 Repairs and Maintenance 0.07 2.26

15 Travelling and Conveyance 7.58 5.38

16 Vehicle Maintenance 5.67 2.85

17 Printing and Stationery 3.72 4.43

18 Telephone Expenses 1.32 0.62

19 Transportation Charge 0.35 -

20 Sales Tax FY 2010-2013 1.71 -

21 Insurance 2.47 4.46

22 General Expenses 0.02 -

23 Sundry Balances Written Off - 0.02 -

Total in 44.47

50.83

Sr.

No

Particulars As at 31st March

2015

As at 31st March

2014

Net Profit after tax as per statement of Profit and Loss Attributable

to Equity Shareholders 214.36-

888.39-

Weighted Average number of Equity Shares used as denominator

for calculating EPS 4,083.00

4,083.00 Face Value Per Share (Rs.) 1.00

1.00

Basic and Diluted Earnings Per Share (Rs.) 0.05-

0.22-

91


Note:

I) Out of the GDR proceeds of USD 71.91 mn, USD 15.60 mn (equivalent to Rs 698,256,000/- as per the exchange rates prevalent at the time) were found to have been transferred from the company's Euram Bank Account, Vienna to the Bank Account of the Company's wholly owned subsidiary in the UAE, Farmax International FZE (FZE) which were further transferred to entities with which neither the Company nor the FZE has any business relationship. These amounts were shown by the Company as the amount receivable from the FZE. Though these amounts of were promised to be returned to FZE, no amount was returned so far to the FZE and the Company initiated legal action to recover the funds, about the success of which the Company is confident. Pending their recovery, the FZE, provided for these amounts in its accounts during the year ended 31st March, 2013. Correspondingly, in line with the prudent accounting practices, the Company, without prejudice to its right to recover these amounts, also wrote off these amounts in the previous year 2012-13 and also provide for diminution in value of investment in subsidiary.

(ii) As regards the other amounts of the GDR, the Company learnt that the remaining amount of USD 56.60 Million (equivalent of Rs. 2515.62 million as per the exchange rates prevalent at the time) on deposit with EURAM Bank, was seized by the Bank to recover a third party loan to one Vintage FZE (now known as Alta Vista International (FZE) pursuant to a Pledge Agreement alleged to have executed by the Company with EURAM Bank. The Company has no relationship with the said Vintage FZE nor did it authorize or execute any such Pledge Agreement. Therefore, the Company demanded the amounts back from the Bank. Pending the recovery and without prejudice, and in line with the prudent account practices, the Company wrote off these amounts in the previous years with a corresponding decrease in the securities premium account. The Company filed a criminal complaint against Mr. Arun Panchariya the then Managing Director of Alta Vista International FZE at that time and other suspects in the matter in the Medchal Court of Rangareddy District vide S.R. No. 7751 of 2013 dated 18.10.2013 and an FIR was issued in the matter vide FIR No. 664/2013 dated 29.10.2013 in Dundigal Police Station. We have also submitted the GDR case file to PMO office, Finance Minister Office & External Affairs Minister office and recently our GDR case has been forwarded from PMO office to Reserve Bank Of India through letter dated 24th Oct, 2014. We have also received a letter from SEBI asking information regarding the GDR issue and we have submitted all the information called for.

92


Schedule : 27Contingent Liabilities and CommitmentsThe amount for which the Company is contingently liable is disclosed below:

Name of The

Statute

Nature of

Dues

Amount Period to which

the Amount Relates

Forum Where

Pending

The Central Excise Act 1944

Excise Duty and

Penalty

37,39,962 2007-08,2008-09,

2009-10 &

2011-12

Appellate Authority -

Commissioner

The Income Tax Act, 1961

Income Tax

1,74,89,574

2008-09,

2009-10

&

2010-11


AP VAT

Act, 2005

VAT Audit Tax

23,84,775

2007-08,

2008-09,

2009-10

Commercial Tax Office, Hydernagar

Circle

Schedule :28Related party disclosures

List of Related Parties:

i) Subsidiaries

ii) Key Management Personnel

: Farmax International FZE.(100%)

: Mr. M. Srinivasa Reddy, Chairman & MD.

Disclosure of transactions between the Company and

Related Parties and the status of outstanding balances as on

31st March,

2015

For the year ended For the year ended

31st March, 2015 31st March, 2014

i) Subsidiaries : Investment in Equity

Bad Debts for

diminution in Value

of Investments

Balance

Loan to Subsidiary

Bad Debts for

Advance

To subsidiary

Balance

ii) Key Management Personnel: Remuneration: Land Lease

-

-

-

-

-

-

-6, 00, 000

-

-

-

-

-

-

-6, 00,000

93


Schedule :29Consumption of Raw Materials, Spare parts and Components.

Imported

Particulars

Value(Rs.)

%

Raw Materials

Nil(Nil)

NIL


Nil(Nil)

NIL

Total

Nil(Nil)

NIL

Indigenous

Particulars

Value(Rs.)

%

Raw Materials

14,70,88,767(C.Y)

15,73,25,302 (P.Y)

100


1,67,54,249(C.Y)

9,51,725 (P.Y)

100

Total 16,38,43,016 (C.Y) 15,82,77,027 (P.Y)

100

Schedule :30

Consumption of Raw Materials, Stores, Spares & Consumables (As the details relating to item wise material consumed, sales, and inventories were not available, the same is not provided)

Particulars

Amount in Rs.

(As at 31-03-2015)

Amount in Rs.

(As at 31-03-2014)

Atta, Rawa, Maida Furnace Oil and Packing Materials, spares

16,38,43,016

15,82,77,027

Sales and Inventory details:

Particulars

Sales

(Rs.)

Closing Inventory

(Rs.)

Opening Inventory

(Rs.)

Atta, Pasta, Vermicelli, Maida, Rawa

21,04,55,504

(C.Y)

17,40,79,387

(P.Y)

8,84,91,168

3,30,88,834

Schedule :31

The Company operates in one major segment only. Hence the requirement of giving segmental information as per the

accounting standard AS - 17 ‘Segmental Reporting’ issued by ICAI is not applicable.

Schedule :32Deferred tax asset as per AS-22 “Accounting for Taxes on Income” has not been provided since there is no virtual certainty of

taxable income in near future.

Schedule :33

The Management is of the opinion that as on the Balance Sheet date, there are no indications of a material impairment loss on

Fixed Assets, hence the need to provide for impairment loss

as per AS-28 “Impairment Of Assets”

does not arise.

94

2013 for the registration as a sick unit under provision of Sick Industrial Companies (Special provisions) Act, 1985 as the net worth of the Company is

2013 of

classification


Sl.No. Name of the

Subsidiary

Reporting

Currency

Capital Total

Assets

Total

Liabilities

Retained

Earnings

Revenue Net

Profit/(Loss) for the year

1 Farmax

International FZE-UAE

Dirhams 1,50,000 0 57,353,847

-57,353,847

Nil

-57,353,847 0 -25,000

Schedule :34Foreign Currency Transactions:

i)

Earnings in foreign exchange

For the year ended

For the year ended

31st March, 2015

31st March, 2014

Export Sales on FOB Basis

-

-

ii)

Expenditure in foreign exchange

For the year ended

For the year ended

31st

March, 2015

Professional and Legal Consultant fees

-

-

31st March, 2014

Schedule :35

Imports on CIF Basis -

Nil

Schedule :36

Auditors Remuneration:

Particulars



i. Statutory and Tax Audit Fees 1,00,000 2,00,000

ii. Other Services NIL NIL Total remuneration paid 1,00,000 2,00,000

Schedule :37

a)

The Company has made an application in Form A (Annexure 1) on 01-08-

completely eroded. The same has been registered in the Board as Case No. 91/2013 as per order dated 17-12-the Secretary, Board for Industrial and Financial Reconstruction. It is pending for determination of sickness.

b)Previous year’s figures have been regrouped

wherever

necessary to confirm to the current year’s




(B Vijay Sai Kumar)

(M. Srinivasa Reddy) (A.V. Rama Raju)

Proprietor

Managing Director

Director

M.No.027813


Sd/-Sd/- Sd/-

Gist of the financial performance of the Subsidiary for the year 2014 - 2015

95


Form No. MGT-11Proxy form

[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]

CIN: � � � L27109TG1995PLC022190Name of the company: � Farmax India LimitedRegistered Office: Survey No. 658, Bowrampet Villag, Equtubullapur Mandal Sub-Urban Of

Hyderabad, Hyderabad, Telangana, 500043 Name of the member(s):

Registered Address:E-mail Id:Folio No./Client Id:DP ID:

I/We, being the member (s) of …………. shares of the above named companyappoint1. Name : ……………………Address :_

I/We, being the member (s) of …………. shares of the above named company, hereby appoint1. Name : ……………………Address :_E-mail Id :Signature: ……………., or failing him

2. Name : ……………………Address:E-mail Id :Signature: ……………., or failing him

3. Name : …………………Address:E-mail Id:Signature: …………….

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 20th Annual General Meeting of the Company, to be held on Wednesday, 30th day of September, 2015 at 9 A.M. at Survey No. 658, Bowrampet Village, qutubullapur Mandal Sub-Urban Of Hyderabad, Hyderabad, Telangana, 500043 and at any adjournment thereof in respect of such resolutions as are indicated below:Resolution No.

1. Approval of financial statements for the year ended 31.03.2015.2. To Appoint a Director in place of Mr. Srinivasa Reddy Morthala (DIN: 00882956) who retires by rotation and being eligible, offers himself for re-appointment.3. To ratify the appointment of M/s. Vijay Sai Kumar & Associates, Chartered Accountants as Statutory Auditors 4. To Appoint Mr. A. V. Rama Raju as Independent Director of the Company5. Amendment of Article of Association of the Company.

Signed this …..… day of………… 2015Signature of shareholder Signature of Proxy holder(s)Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.

96


FARMAX INDIA LIMITEDSurvey No. 658, Bowrampet,Quthbullapur, Ranga Reddy Dist, HYDERABAD, TELANGANA - 500043ATTENDANCE SLIP(Please present this slip at the Meeting venue)

I hereby record my presence at the 20th Annual General Meeting of the members of the company to be held on Wednesday, 30th day of September, 2015 at 9A.M. at Survey No. 658, Bowrampet Villag, Equtubullapur Mandal Sub-Urban Of Hyderabad, Hyderabad, Telangana, 500043and at any adjourned meeting thereof.

Shareholders/Proxy's Signature___________________________________Shareholders/Proxy's full name___________________________________ (In block letters) Folio No./ Client ID___________________

No. of shares held_________

Note:Shareholders attending the meeting in person or by proxy are required to complete the attendance slip and hand it over at the entrance of the meeting hall.

98

20 th Annual Report 2014-2015

E-mail: [email protected] Visit us at: www.farmax.co.in

Survey No. 658, Bowrampet Village, Qutubullapur Mandal, (Sub- urban of Hyderabad) Ranga Reddy Dist.

Telangana- 500043

ISO 9001:2008 Certified Company

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20th Annual Report 2014-2015 - Bombay Stock · PDF fileKindly note that soft copies of the Notice and Annual Report will be sent to the shareholders to their ... Ranga Reddy Dist