| Dear Members,
We take pleasure in presenting the Twentieth Annual report together
with Audited accounts for the year ended 31st March, 2015.
FINAN IAL SUMMARY/HIGHLIGHTS, OPERATIONS, STATE OF AFFARIS:
The performance during the period ended 31st March, 2015 has been as
under:
(Rs. In Lakhs)
Consolidated Results
Particular 2014-2015 2013-2014
Total Income 2282.97 1778.33
Total Expenditure 2497.33 2464.60
Profit Before Tax (214.36) (888.39)
Provision for Tax 0 0
Profit/(Loss) after Tax (214.36) (888.39)
Transfer to General 0 0
Reserves
Profit available for 0 0
appropriation
Provision for Proposed 0 0
Dividend
Provision for Corporate 0 0
Tax
Balance Carried to 0 0
Balance Sheet
(Rs. In Lakhs)
Standalone Results
Particular 2014-2015 2013-2014
Total Income 2282.97 1778.33
Total Expenditure 2493.08 2662.63
Profit Before Tax (210.11) (884.30)
Provision for Tax 0 0
Profit/(Loss) after Tax (210.11) (884.30)
Transfer to General 0 0
Reserves
Profit available for 0 0
appropriation
Provision for Proposed 0 0
Dividend
Provision for Corporate 0 0
Tax
Balance Carried to 0 0
Balance Sheet
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.
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 Statement under Section 102 of
Companies Act, 2013 of the Notice of 20th 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.
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:
* General understanding of the company's business dynamics, global
business and social perspective;
* Educational and professional background 0 Standing in the profession;
* Personal and professional ethics, integrity and values;
* 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:
* shall possess a Director Identification Number;
* shall not b disqualified under the companies Act, 2013;
* shall Endeavour to attend all Board Meeting and Wherever he is
appointed as a Committee Member, the Committee Meeting;
* shall abide by the code of Conduct established by the company for
Directors and senior Management personnel;
* 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;
* 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.
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.
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)
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 and
7. 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:
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:
Name Designation Category No. of meetings
held during their
tenure
Mr. A. V. Rama Raju Chairman NED(I) 4
*Ms. P. Priyanka Member NED(I) 2
*Mr. E. Sudheer Reddy Member NED(I) 2
*Mr. G. Omkareswar Member NED(I) 2
* Mr. I. Srinivasa Raju Member NED(I) 2
Name No. of meetings
attended
Mr. A. V. Rama Raju 4
*Ms. P. Priyanka 2
*Mr. E. Sudheer Reddy 2
*Mr. G. Omkareswar 2
* Mr. I. Srinivasa Raju 2
NED (I): Non Executive Independent Director ED (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
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)
NED (I): Non Executive Independent Director ED (P) : Executive Director
Promoter
*Appointed w.e.f. 30.09.2014
*Resignation w.e.f 21.10.2014
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:
Name Designation Category
*Ms. P. Priyanka Chairman NED(I)
Mr. A. V. Rama Raju Member NED(I)
*Mr. E. Sudheer Reddy Member NED(I)
*Mr. G. Omkareswar Member NED(I)
* Mr. I. Srinivasa Raju Member NED(I)
NED (I): Non Executive Independent Director ED (P) : Executive Director
Promoter
*Appointed w.e.f. 30.09.2014
*Resignation w.e.f 21.10.2014
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 cs@farmax.co.in for
redressal of shareholders' complaints/grievances.
RISK MANAGEMENT COMMITTEE
A.) Composition:
The Details of composition of the Committee are given below:
Name Designation Category
Mr. A. V. Rama Raju Chairman NED (I)
*Mr. M. Srimvas Reddy Member NED(I)
*Ms. Priyanka Palacharla Member NED(I)
*Mr. E Sudheer Reddy Member NED(I)
NED (I) : Non Executive Independent Director NED (NI) : Non Executive
Non-Independent
*Appointed w.e.f. 30.09.2014
*Resignation w.e.f 21.10.2014
Role and Responsibilities of the Committee includes the following:
* Framing of Risk Management Plan and Policy
* Overseeing implementation of Risk Management Plan and Policy
* Monitoring of Risk Management Plan and Policy
* Validating the process of risk management
* Validating the procedure for Risk minimization.
* Periodically reviewing and evaluating the Risk Management Policy and
practices with respect to risk assessment and risk management
processes.
* Continually obtaining reasonable assurance from management that all
known and emerging risks have been identified and mitigated or managed.
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.
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
In the previous Annual General Meeting ( 19th AGM), the Company
appointed M/s. Vijay Sai Kumar & Associates, Chartered Accountants as
statutory Auditors to hold office until the conclusion of the 20th
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
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
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.
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.
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 DISCLOSURES
1. Issue of sweat equity share: NA
2. Issue of shares with differential rights: NA
3. Issue of shares under employee's stock option scheme: NA
4. Disclosure on purchase by company or giving of loans by it for
purchase of its shares: NA
5. Buy back shares: NA
6. Disclosure about revision: NA
7. 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 Category
shares
allotted
1. Increase in the - -
authorised capital of
the Company from
50.00. 00.000 to
60.00. 00.000
2. Alteration of - -
Memorandum of
Association for
change in authorised
capital
3. Preferential 12,58,71,427 Promoters
Allotment of equity and others
shares
S.No. Particulars Date of Date of BM for
EGM allotment of shares
1. Increase in the 24.01.2015 -
authorised capital of
the Company from
50.00. 00.000 to
60.00. 00.000
2. Alteration of 24.01.2015 -
Memorandum of
Association for
change in authorised
capital
3. Preferential 24.01.2015 04.03.2015,
Allotment of equity 05.03.2015,
shares 06.03.2015,
09.03.2015
10.03.2015
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.
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
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