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Notes to Accounts of Farmax India Ltd.

Mar 31, 2015

1. 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.

2. Details of Shareholders holding more than 5% Equity Shares in the Company:

* 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.

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.

3. Contingent Liabilities and Commitments

The amount for which the Company is contingently liable is disclosed below:

Name of The Nature of Amount Period to which Statute Dues the Amount Relates

The Central Excise 37,39,962 2007-08, Excise Act 1944 Duty and 2008-09, Penalty 2009-10 & 2011-12

The Income Tax Income 1,74,89,574 2008-09, Act, 1961 Tax 2009-10 & 2010-11

AP VAT VAT 23,84,775 2007-08, Act, 2005 Audit Tax 2008-09, 2009-10

Name of The Forum Where Statute Pending

The Central Appellate Excise Act 1944 Authority - Commissioner

The Income Tax CIT/Tribunals - Act, 1961 Appeals

AP VAT Commercial Tax Act, 2005 Office, Hydernagar Circle

4. Related party disclosures

List of Related Parties:

i) Subsidiaries : Farmax International FZE.(100%)

ii) Key Management Personnel : Mr. M. Srinivasa Reddy, Chairman &MD.

5. The Company operates in one major segment only. Hence the requirement of giving segmental information as per the accounting standard AS - 1 7 'Segmental Reporting ' issued by ICAI is not applicable.

6. Deferred 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.

7. 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.

8. Imports on CIF Basis - Nil

9. 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


Mar 31, 2014

1. 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.

*The above loans have been sanctioned by SBI against hypothecation of stocks and receivables, Plant & 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 28th January,2013 u/s.13(2) of SARFAESI Act calling upon the company to discharge entire liability within 60days.The above amount has become due for payment.

*Term loan has been sanctioned by SBI against hypothecation of stocks and receivables, Plant & Machinery and equitable mortgage of factory Land, Buildings and various properties and personal guarantee of Director. As mentioned innote.no.5, bankhas issued a noticeon28thJanuary,2013u/s.l3(2)ofSARFAESIActcallingupontheCompanyto discharge entire liability within 60days.The entire term loan has become due for payment.

2. i) Out ofthe GDR proceeds of USD 71.91 mn,USD 15.60mn(equivalent to Rs 698.256/- millions as per theexchange 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, during the year ended 31st March, 2013 has written off the amounts.

Correspondingly, in line with the prudent accounting practices, the Company has, without prejudice to its right to recover these amounts. Also decided to write 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. There-fore, 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 has written off these amounts in the previous years with a corres-ponding decrease in the securities premium account. The Company retained legal counsel in Austria to initiate legal action to recover the amount.

Simultaneously, Company also filed a criminal complaint against Mr. Arun Panchariya the then Managing Director to 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.

3. Contingent Liabilities and Commitments

The 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

The Central Excise Act Excise Duty and 37.40 2007-08, 1944 Penalty 2008-09, 2009-10 & 2011-12

The Income Tax Act, Income Tax 473.48 2008-09, 1961 2009-10 & 2010-11

AP VAT VAT Audit Tax 23.85 2007-08, Act, 2005 2008-09, 2009-10

Name of The Statute Forum Where Pending

The Central Excise Act Appellate Authority 1944 - Commissioner

The Income Tax Act, CIT/Tribunals - 1961 Appeals AP VAT Commercial Tax Act, 2005 Office, Hydemagar Circle

Note.4 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.

Note.5

Deferred 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.

Note.6

The Management is of the opinion that as on the Balance Sheet date, there are no indications of a material impairment loss on Fixed Asset, hence the need to provide for impairment loss as per AS-28 "Impairment of Assets" does not arise.

Note.7

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


Mar 31, 2013

Note.1

Related party disclosures

List of Related Parties:

i) Subsidiaries : Farmax International FZE (100%)

ii) Key Management Personnel : Mr. M. Srinivasa Reddy, Chairman & MD.

iii) Enterprises over which Key

Management personnel exercise significant influence. : MSR India Limited.

Note.2

Consumption of Raw Materials, Spare parts and Components

Note.3

The Company operates in one segment only. Hence the requirement of giving segmental information as per the accounting standard AS - 17 ‘Segmental Reporting'' issued by ICAI is not applicable.

Note.4

In the opinion of the management there is no virtual certainty of taxable income in future. Hence the deferred tax Asset of Rs. 72, 28,166/ has been written off as per AS - 22 "Accounting for Taxes on Income” issued by ICAI.


Mar 31, 2012

(aa) AS - 1 Provisions, contingent liabilities and contingent assets

The amount for which the Company is contingently liable is disclosed are disclosed below:

The company had an amount ofRs. 2515.62 millions as fixed deposits as on 31- Mar-2012 with M/s EURAM Bank. Farmax India Limited never entered in to any pledge documentation with any party against the company's Fixed Deposits. M/s. EURAM Bank has adjusted the total balance available in our account against settlement of purported (without prior intimation/ notice to M/s. F armax India Limited) loan taken by M/s Alta Vista International FZE vide letter of realization dated August 14,2012 from EURAM Bank.

The Management is in the process of initiating legal action against all parties involved in the case upon a favorable judgment subject to cost if any would be treated as contingent assets in the company at this point of time. The management is unsure in quantifying the associated cost subject to which an amount ofRs. 2515.62 millions.

The GDR Expenses shown as payable during March 31, 2011 amounting to Rs. 122.61 millions is no longer payable on account of the new developments according to this the said amount is added back to Securities

Premium Account.

(bb) AS 2 - Financial instruments: Recognition and Measurement

The Company has chosen not to adopt the Accounting Standard 30 "Financial Instruments: Recognition and Measurement".


Mar 31, 2011

1. Figures have been rounded off to the nearest rupee.

2. There are no outstanding over dues to small-scale industrial undertakings and/or ancillary industrial suppliers on account of principal and /or interest at the close of the financial year. This disclosure is based on the documents/information available with the company.

3. Balance Sheet abstract and Company's general business profile are attached separately.

4. Previous Year figures have been regrouped wherever necessary. Schedules form an integral part of the Balance Sheet and the Profit and Loss Account.


Mar 31, 2010

1. Contingent assets and liabilities:

There is no Contingent Asset or Liability for or against the Company not acknowledge as debt during the period. The Company has vide its Special Resolution in the Extra-ordinary General Meeting dated October 24, 2009 approved to offer 11,00,000 stock options under Farmax ESOS - 2009 with each option convertible into one equity share of Rs.10/-each out of which the Board of Directors in their meeting held on October 31, 2009 has granted 6,00,000 stock options with an exercise price of Rs.40/- per share. However, no employee has exercised the options as on March 31,2010.

2. Balances appearing undersecured Loans, unsecured loans, sundry Debtors, Sundry Creditors, Loans and advances are subject to confirmation and / or reconciliation, if any.

3. Foreign currency transactions:

The Company has no other Foreign Currency Transactions during the period. Since, the Company has no Foreign exchange Income or Expenditure, disclosures required under Schedule VI of the Companies Act, 1956 is not applicable.

4. There are no outstanding over dues to small-scale industrial undertaking and/or ancillary industrial suppliers on account of principal and /or interest at the close of the financial year. This disclosure is based on the documents/information available with the company.

5. Balance sheet abstract and companys general business profile are attached separately.

6. Related Party Disclosures:

i) Key Management Personnel Mr. M. Srinivasa Reddy, Managing Director in Remidicherla Infra & Power Limited.

ii) The transactions are carried out with related parties in the course of business:

Particulars Key managerial Persons

Loans Taken Rs.31.64 lakhs

7. Previous yearfigures have been regrouped wherever necessary.

8) Authorized Capital of the Company is enhanced to Rs.50 Crores from Rs. 12 Crores.


Mar 31, 2009

1. Figures have been rounded off to the nearest rupee.

2. There are no outstanding over dues to small-scale industrial undertaking and/or ancillary industrial suppliers on account of principal and/or interest at the close of the financial year. This disclosure is based on the documents/information available with the company.

3. Balance sheet abstract and companys general business profile are attached separately.

4. Previous year figures have been regrouped wherever necessary.

Schedules form an integral part of the Balance Sheet and the Profit and Loss Account.


Aug 31, 2008

1. Contingent Assets and Liabilities: There is no Contingent Asset or Liability for or against the Company not acknowledgeasdebt during the period.

2. Balances appearing under Secured Loans, Unsecured Loans, Sundry Debtors, Sundry Creditors, Loans and Advances are subject to confirmation and / or reconciliation, if any

3. Quantitative Details:

The Company has not maintained quantitative details of the information required under paragraphs 3 and 4 C of Part II of Schedule VI of the Companies Act, 1956 and hence are not furnished.

4. Foreign Currency Transactions:

Transactions arising in Foreign Currency during the period are converted at the rates prevailingon transaction dates

The Company has paid Rs. 953693/- in Foreign Currency towards balance payment for the purchase of Plant & Machinery. The Company has no other Foreign Currency Transactions during the period. Since, the Company has no Foreign Exchange Income or Expenditure, disclosures required under Schedule VI of the Companies Act, 1956 isnot applicable.

5. Figures have been rounded off tothe nearest rupee.

19. There are no outstanding over dues to small-scale industrial undertakings and/or ancillary industrial suppliers on account of principal and /or interest at the close of the financial year. This disclosure is based on the documents/information available with the company.

6. Balance Sheet abstract and Companys general business profile are attached separately.

7. Previous Year figures have been regrouped wherever necessary. Schedules forman integral part of the Balance Sheet and the Profit and Loss Account.

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