MOA AOA Format For Farmer Producer Company

THE COMPANIES ACT,2013

(Reference Section 378(A) of the Companies Act, 2013)

CHAPTER XXIA

(Producer Company)

Company Limited by Shares

ARTICLES OF ASSOCIATION

OF

SHASTRI AGRI PRODUCER COMPANY LIMITED

1. General

1.1 Wherever in the Act it is provided that the Company shall have any right, privilege or authority if so authorised by its Articles, then by virtue of this Article, the Company is hereby specifically authorised, empowered and entitled to have such right, privilege or authority, as have been permitted by the Act without there being any specific provision and or separate Article in that behalf herein provided.

1.2 i. the Company is a producer company within the meaning of Section 378A of the Companies Act, 2013.

ii. The Company is deemed to be a Private Company within the meaning of section 378A of the Companies Act, 2013 and accordingly,

a. Restricts the right to transfer its shares in the manner and to the extent here in after provided;

b. Prohibits any invitation to the public to subscribe for any shares in, or debentures of, the Company; and

c. Prohibits any invitation or acceptance of deposits from persons other than its Members, directors or their relatives.

2. Definitions

2.1 In the Articles and the Memorandum of Association of the Company, unless the context otherwise requires, words or expressions shall have the meanings as provided below.

i. ‘The Companies Act’ means The Companies Act, 2013 and its statutory modifications from time to time, with following section 378A of the Companies Act, 2013, the provision of Chapter XXIA of the Companies Act, 2013 shall be applicable mutatis mutandis to a Producer Company Hence, reference in the Articles to section shall refer to the Companies Act, 2013

ii. ‘Active Member’ means a Member who fulfils the quantum and period of patronage of the Producer Company as may be required by the articles.

iii. ‘Articles’ means Articles of Association of the Company for the time being in force.

iv. ‘Board’ or ‘Board of Directors’ means the board of directors of the Company constituted under the provisions of the Act and the Articles.

v. ‘Chairman or Chairperson’ means Chairman of the Board of Directors, for the time being of the Company.

vi. ‘Chief Executive’ means an individual appointed as such under the provisions of the sub-section (1) of section 378W.

vii. ‘Limited Return’ means the maximum dividend, as may be specified by the Articles.

viii. ‘Member’ means a person or Producer Institution (whether incorporated or not) admitted as a Member of a Producer Company and who retains the qualifications necessary for continuance as such;

ix. ‘Officer’ includes any Director or Chief Executive or Secretary or any person in accordance with whose directions or instructions part or whole of the business of the business of the Producer Company is carried on.

x. ‘Mutual Assistance Principles’ means the principles set out in sub-section (2) of section 378G.

xi. ‘Patronage’ means the use of services offered by the Producer Company to its Members by participation in its business activities.

xii. ‘Patronage Bonus’ means payments made by the Company out of its surplus income to the Members in proportion to their respective Patronage.

xiii. ‘Primary Produce’ means (i) produce of farmers, arising from agriculture (including animal husbandry, horticulture, floriculture, pisciculture, viticulture, forestry, forest products, re-vegetation, bee raising and farming plantation products), or from any other primary activity or service which promotes the interest of the farmers or consumers; or (ii) produce of persons engaged in handloom, handicraft and other cottage industries; or (iii) any product resulting from any of the above activities, including by-products of such products; or (iv) any product resulting from an ancillary activity that may assist or promote any of the aforesaid activities or anything ancillary thereto; or  (v) any activity which is intended to increase the production of anything referred to in sub-clauses (i) to (iv) or improve the quality thereof..

xiv. ‘Producer’ means any person engaged in any activity connected with or relatable to any primary produce.

xv. ‘Producer Company’ means a body corporate having objects or activities specified in section 378B and registered as Producer Company under this Act.

xvi. ‘Producer Institution’ means a Producer Company or any other institution having only producer or producers or Producer Company or Producer Companies as its member whether incorporated or not having any of the objects referred to in section 378B and which agrees to make use of the services of the Producer Company or Producer Companies as provided in its articles.

xvii. ‘Secretary’ means an individual appointed as such under the Provisions of the Act.

xviii. ‘Withheld Price’ means part of the price due and payable for goods supplied by any Member to the Producer Company; and as withheld by the Producer Company for payment on a subsequent date.

xix. “inter-State co-operative society” means a multi-State co-operative society as defined in clause (p) of section 3 of the Multi-State Co-operative Societies Act, 2002 and includes any co-operative society registered under any other law for the time being in force, which has, subsequent to its formation extended any of its objects to more than one State by enlisting the participation of persons or by extending any of its activities outside the State, whether directly or indirectly or through an institution of which it is a constituent.

2.2 Interpretation

In the Articles unless the context otherwise requires:

i Words importing the masculine gender shall be taken to include feminine; and

ii. The term ‘article’ refers to the specified provision(s) of the Articles hereof.

3. Mutual Assistance Principles

3.1 The Membership shall be voluntary and available to all eligible persons who can participate or avail of the facilities or services of the Producer Company and are willing to accept the duties of membership.

3.2 Each Member shall, save as otherwise provided in this Chapter, have only a single vote irrespective of the shareholding.

3.3 The Producer Company shall be administered by a Board consisting of persons elected or appointed as directors in the manner consistent with the provisions of this Chapter and the Board shall be accountable to the Members.

3.4 Particulars on limited return on share capital.

3.5 The surplus arising out of the operations of the Producer Company shall be distributed in an equitable manner by-

(i) providing for the development of the business of the Producer Company.

(ii) providing for common facilities; and

(iii) distributing amongst the Members, as may be admissible in proportion to their respective participation in the business.

3.6 Provision for the education of Members, employees and others, on the principles of mutuality and techniques of mutual assistance.

3.7 The Producer Company shall actively co-operate with other Producer Companies (and other organisations following similar principles) at local, national or international level so as to best serve the interest of their Members and the communities it purports to serve.

4. Membership

4.1 The Company may have individual Producers or Producer Institutions or a combination of both as its Members as decided by the Board.

4.2 Qualifications and procedure for obtaining Membership

i. A member of any Producer Groups/Farmers Groups / Learning Group/Kisan Club / Self Help Groups /Water User Group or any non- member/individual belongs to the above category of producer or farmers and desirous to becoming a member shall subscribe at least one share to the Producer Company.

ii. Member who didn’t declared as defaulter in repayment of any advances or loans or services taken from the Producers Company or similar institutions and don’t have the possibility to repeat such act again and same guaranteed by the any member of the producer company, if already exists in the same area.

iii. He/ She did not convict by the Board/Committee formed by the board / any court in producer company matter and his membership seized.

iv. No person shall become a Member of the Company if,

a. He/she has any business interest which is in conflict with business of the Company or

v. Such an individual Producer or a Producer Institution shall become a Member after the Board of Directors passes a resolution accepting his/its admission as a Member.

4.3 Conditions for continuation and cancellation of Membership

i. Membership shall continue as long as a Member does not fail to meet the criteria as may be prescribed by the Board from time to time.

ii. In addition, the Member is not eligible to continue as a Member, if:

a. the Member acquires any business interest which is in conflict with the business of the Company.

b. the member is indulging / has indulged in an act which is detrimental to the functioning of the Company or which has damaged or likely to damage the interest and reputation of the company.

iii. Any Member who is not eligible to continue as a Member shall be served a written notice by the Company for removal as Member and given an opportunity of being heard. The Member would need to reply to the notice within the stipulated period as specified in the notice. Such notice shall be sent by Registered Post to the Member at his last known address and be deemed to be served five days after posting. Thereafter, the Board shall take a decision in the matter.

4.4 Voting Rights of Member

i. In a case where the membership consists solely of individual producers, the voting rights shall be based on a single vote for every Member.

ii. In a case where the membership consists of producer institutions only, the voting rights shall be determined on the basis of patronage i.e. their participation in the business of the Company in the previous year. Provided that during the first year of registration of the Company, the voting rights shall be determined on the basis of the shareholding by such producer institutions.

iii. In a case where the membership consists of both individual Producer and Producer institutions, the voting rights shall be computed on the basis of a single vote for every Member.

4.5 Price to be paid to the Members

i. The Company may pay a differential price to its Members for the procurement of commodity based on prevailing price in that area and any other criteria as may be decided from time to time. The Company may pay a lower price to its Non-members.

ii. A farmer may initially receive part of the price payable and due as may be decided from time to time and the Withheld Price may be disbursed later in cash or in kind or by allotment of equity shares in proportion to the commodity supplied to the Company during the financial year or otherwise, to such extent and in such manner and subject to such conditions as may be decided by the Board.

iii. The Company may pay incentive/bonus to the members with such attributes and to such extent and in such manner and subject to such conditions as may be decided by the Board.

iv. The surplus, if any, remaining after making provision for payment of limited return and reserves referred to in section 378ZJ, may be disbursed as patronage bonus, amongst the Members, in proportion to their participation in the business of the producers company, either in cash or by way of allotment of equity shares or both, as may be decided by the Members at the general meeting

4.6 PROVISIONS FOR SPECIAL USER RIGHTS

i. The Board of the Producer Company may from time to time, based on measurable criteria, issue special user rights valid for a specific duration to the active members, to promote the business interests of the Producer Company. Such user rights shall be issued in the form of appropriate instruments.

ii. The instruments so issued shall, subject to the approval of the Board in that behalf, be transferable to any other active member of the Producer Company.

4.7 Active Member

The Board, if so desires, lay down the criteria with respect to quantum & period of Patronage for an Active Member.

5. Funds

Funds may be raised by

i. issue of equity shares to Members,

ii. admission fee and deposits from Members,

iii. loans and advances and

iv. grants, aid, subsidies and donations.

6. Share Capital

6.1 The authorized share capital of the Company shall be as stated in clause VI of the Memorandum of Association of the Company.

6.2 The share capital of the Company shall consist of fully paid-up equity shares only.

6.3 The shares held by the Member in the Company, shall as far as may be, be in proportion to his or its patronage.

6.4 The share capital of the Company shall be under the control of the Board who may allot or otherwise dispose of the same to such members in proportion to the Patronage, as far as may be, and on such terms and conditions against payment in cash or kind or in lieu of the whole or part of the sale proceeds of produce or products supplied by the Members, and at such times and for such consideration as the Board may decide.

6.5 The Company may, by Ordinary Resolution:

i. increase the share capital;

ii. consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;

iii. sub-divide its existing shares or any of them, into shares of smaller amount than is fixed by the Memorandum of Association, subject, nevertheless, to the provisions of the Act; and

iv. cancel any shares which have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled.

6.6 The Company may reduce in any manner in accordance with the provisions of the Act,

i. its share capital,

ii. balance in the securities premium account,

iii. capital reserves, and

iv. reserves arising out of amalgamation, merger, division, reorganization, reconstruction or in any other manner.

6.7 The Company may purchase its own equity shares in accordance with the provisions made under the Act.

7. Transfer of equity shares

Subject to the provision under Section 378ZC and Sec 378ZD of the Act, A Member may transfer the whole or part of his /its shares to a Member after obtaining the prior approval of the Board.

8. Surrender of equity shares

8.1 Where the Board is satisfied that any Member has failed to retain the qualifications as a Member, the Board shall direct the Member to surrender his/its shares to the Company at par value or such other value as may be determined by the Board.

8.2 The Member also, if so desires, apply to the Company to surrender his/its equity shares. After the receipt of application from the Member, the Board may take a decision in the matter. The Board shall prescribe the procedure for surrender of equity shares.

8.3 A surrendered equity share shall be deemed to be the property of the Company and may be sold to members or otherwise cancelled as the Board thinks fit.

Management of Producer Company

9. Board of Directors

9.1. The Company shall be governed by the Board consisting of persons elected or appointed as Directors.

9.2. The Board of the Company shall have at least five and not more than fifteen Directors. The Board may co-opt one or more Expert Directors with domain expertise not exceeding one-fifth of the total number of Directors for such period as the Board may deem fit.

Following are the First Directors of the Company:

1. MD SAHAJAHAN MALLICK

2. MD JAHANGIR MALLIK

3. ABDULLA MALLIK

4. MAKBUL AHMMED

5. NIKHIL CHANDRA DAS

9.3. The subscriber who have signed the Memorandum and the Articles of Association have designated Five Directors, who shall govern the affairs of the Company until the directors, who shall govern the affairs of the company until the directors are elected. The election of Directors shall be conducted Within a Period of ninety days of the registration of the company.

9.4. The conduct of elections of directors to the board of the Producer Company shall  be the responsibility of the incumbent board of the Producer Company, in the manner specified in these articles of association and election rules at least 10 days before the term of office of the outgoing directors comes to an end. The outgoing directors shall cease just after the expiry of the term and new directors shall takeover from the very next day

9.5. Election of directors shall normally take place at the annual general meeting. The   election rules shall be formulated by the Board and approved by the general meeting.

9.6. The first election of the Board after its incorporation shall take place within 90 days. The candidates for contesting the election shall have to fulfill all the qualifications required for obtaining the membership except in case of the first election of the Board after its incorporation

9.7. Where a board fails to conduct elections before the expiry of the term of the directors or where there are no directors remaining on the board, the chief executive of the Company shall call an extra ordinary general meeting, within twenty days after the expiry of the term of the directors for the purpose. If the Board is not constituted in the meeting, a three-member ad-hoc board shall be appointed from among members for the specific purpose of conducting elections and to perform all functions of the articles of association.

9.8. The term of the ad-hoc board so appointed shall not exceed three months and the ad-hoc board shall cease to function as soon as a regular board is elected in accordance with the articles of association.

9.9. Every person shall hold office of a director for a period not less than one year and maximum as decided by the board

9.10. Every director, who retires in accordance with the articles, shall be eligible for reappointment as a director

9.11. The Directors at its meeting shall elect a Chairman from amongst the Directors, other than the Expert Director and the Chief Executive, for a period of four years. For the election of the Chairman of the Company, the Expert Director and the Chief Executive will not have voting rights.

9.12. The Chairman shall preside over the meetings of the Board. In his absence, the Directors present shall elect one of the elected Directors to preside over the meeting.

9.13. A meeting of the Board shall be held not less than once in every three months and at least four such meetings shall be held every year.

9.14. Notice of every meeting of the Board of Directors shall be given in writing to every Director for the time being in India, and at his usual address in India to every other Director.

9.15. The Chief Executive shall give notice as aforesaid not less than seven days prior to the date of the meeting of the Board. Provided that a meeting of the Board may be called at shorter notice and the reasons thereof shall be recorded in writing by the Board.

9.16. The quorum for a meeting of the Board shall be one-third of the total strength of directors, subject to a minimum of three including the presence of at least one elected Director and one Expert Director. Notwithstanding the above, the quorum for the meeting of the Board of Directors shall not require the presence of the Expert Director in case there is no Expert Director on the Board of the Company.

9.17. All the decisions of the Board shall be decided by a majority vote. Each Board Member shall have one vote. In the case of equality of votes, the Chairman or the person presiding shall have a casting vote.

9.18. No Director shall participate on any matter in which he/she has personal interest except as a member.

9.19. An elected Director shall cease to be member of the Board on his/her losing the status as a Member of the Company. Also, a Member shall not be eligible for appointment as a Director on the Board or the office of the director shall become vacant if:

i. He/she is convicted by a Court of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months;

ii. The Producer Company, in which he/she is a director, has made a default in repayment of any advances or loans taken from: any company or institution or any other person and such default continues for ninety days;

iii. He/she has made a default in repayment of any advances or loans taken from the Producer Company in which he/she is a director:

iv. The Producer Company, in which he/she is a director:

a) has not filed the annual accounts and annual return for any continuous three financial years commencing on or after the 1^stday of April, 2002; or

b) has failed to, repay its deposit or withheld price or patronage bonus or interest thereon on due date, or pay dividend and such failure continues for one year or more:

v. default is made in holding election for the office of director, in the Producer Company in which he/she is a director, in accordance with the provisions of the Act and articles:

vi. The member has committed any act which has damaged the interest and reputation of the Company;

vii. The members have willfully deceived the company

viii. The annual general meeting or extraordinary general meeting of the producer company, in which he/she is a director, is not called in accordance with the provision of this act except due to natural calamity or such other reason.

ix. She has failed to satisfactory complete the prescribed training programme, as prescribed by the board from time to time, within six months of being elected/appointed as a director. This training program is intended for quipping him/her with the requisite skill sets and knowledge to satisfactorily discharge his/her responsibilities.

x. He/she or his/her relative has or had any pecuniary relationship or transaction directly or indirectly with company (except membership benefit).

9.20. The Directors may be entitled to such fees and allowances including travelling and hotel expenses for attendance at the meetings of the Board and its Committees, if any constituted by the Board in terms of provisions of the Act, as may be decided by the Board.

9.20. Powers and Functions of the Board

i. Subject to the provisions of the Act and the Articles, the Board shall exercise all such powers and to do all such acts and things, as that the Company is authorised so to do.

ii. In particular and without prejudice to the generality of the foregoing powers, such powers may include the following matters, namely:

a. determination of the dividend payable;

b. determination of the quantum of withheld price;

c. recommends patronage bonus to be approved at General Meeting;

d. admission of new Members;

e. pursues and formulate the organizational policy, objectives, establish specific long-term and annual objectives, and approve corporate strategies and financial plans;

f. appointment of a Chief Executive;

g. approval of organization structure of the Company;

h. acquisition or disposal of property of the Company in its ordinary course of its business;

i. investment of the funds of the Company in the ordinary course of its business;

j. sanction any loan or advance, in connection with the business activities of the Company to any Member, not being a Director or his relative;

k. to constitute a Nominating Committee in terms of the provisions of section 378U of the Act, to scrutinize applications received from eligible Members for positions on the Board based on the defined criteria as approved in the General meeting and as provided in these Articles, and accordingly recommend eligible members to the Board for its consideration. In turn the Board, after due consideration in the Board meeting, shall recommend Members for the position on the Board to be elected or appointed by the Members in the Annual General Meeting; and

l. approves interim budget which shall form integral part of the budget to be approved at Annual General Meeting (AGM);

m. takes such other measures or do such other acts as may be required in the discharge of its functions or exercise of its powers.

n. cause proper books of account to be maintained; prepare annual accounts to be placed before the annual general meeting with the report of the auditor and the replies on qualifications, if any, made by the auditors;

iii. The Board shall exercise its powers at its duly convened meeting where the required quorum is present to transact the business.

9.21. Liability of Directors

i. When the directors vote for a resolution, or approve by any other means, anything done in contravention of the provisions of the Act or any other law for the time being in force or the Articles, they shall be jointly and severally liable to make good any loss or damage suffered by the Company.

ii. The Company shall have the right to recover from its Directors:

a. Where such Director has made any profit as a result of the contravention specified in the Act, an amount equal to the profit so made.

b. Where a company incurred a loss or damage as a result of the contravention specified in the Act, an amount equal to that loss or damage.

iii. The liability imposed under article 9.19 (ii) shall be in addition to and not in derogation of a liability imposed on a Director under any other provision of the Act or any other law for the time being in force.

9.22. Removal of Director

A Director may be removed by simple majority of the Members present and voting at the General Meeting in accordance with the provisions of the Act.

10. Chief Executive and his functions

10.1 The Company shall have a full time Chief Executive, by whatever name called, who shall be appointed by the Board.

10.2 The Chief Executive shall be Ex officio Director of the Board and such Director shall not retire by rotation.

10.3 The qualifications experience and the terms and conditions of service of the Chief Executive, including the remuneration payable to Chief Executive, shall be such as may be determined by the board.

10.4 Chief Executive shall be entered with substantial powers of management as the Board may determine. Without prejudice to the generality of the foregoing, he shall also exercise powers and discharge the functions laid down in the act.

11. General Meetings

11.1 The Company shall be each year, hold, in addition to any other meetings, as its annual General Meeting and shall specify the meeting as such in the notices calling it, and not more than fifteen months shall elapse between the date of one annual general meeting of the company and that of the next.

11.2 Every General Meeting Shall be called, for a time during business hours, on a day that is not a public holiday and shall be held at the registered office of company or at some other place within the city, town or village in which the registered office of the company is situated.

11.3 A general meeting of the company shall be called by giving not less than fourteen days prior notice in writing.

11.4 i. At any General Meeting, a resolution put to the vote of the meeting shall unless a poll is demanded under the Articles, be decided by show of hands.

ii. Before or on the declaration of the result of the voting on any resolution on a show of hands, a demand for a poll can be made by one-tenth of the total number of Members or 100 Members, whichever is lower, present in person or by proxy.

11.5 The Company may, if permissible, allow the Members of the Company to participate in any General Meeting through electronic mode.

11.6

i.

a) Attendance of such number of Members as provided in the Act shall form the quorum for the General Meeting.

b) Attendance either in person or by proxy shall be considered for the purpose of quorum.

c) No person shall be appointed a proxy unless he is a Member.

d) A proxy shall be entitled to vote on a show of hands as well as in a poll.

ii. If there is no quorum within half an hour from the time of meeting, the meeting shall stand dissolved if it was called upon requisition. But in other cases, the meeting is automatically adjourned to reassemble on the same day in next week. And if at the reassembled meeting also quorum is not present within half an hour, as many members as are actually present shall constitute the quorum

11.7 The Company shall hold its first Annual General Meeting within a period of ninety days from the date of its incorporation.

11.8 The Memorandum and Articles of the Company shall be laid before the first Annual General Meeting.

11.9 The Members shall adopt the Articles of the Company and appoint directors of its Board in the first Annual General Meeting.

11.10 The notice calling the Annual General Meeting shall be accompanied by the following documents, as approved by the Board namely:

i. the agenda of the Annual General Meeting;

ii. the minutes of the previous Annual General Meeting or the Extra-ordinary general meeting;

iii. the names of candidates, if any, to the office of director including a statement of qualifications in respect of each candidate;

iv. the audited balance sheet and profit and loss accounts of the Company and its subsidiary, if any, together with a report of the Board of Directors of the Company with respect to:

a. the amount proposed to be carried to reserves;

b. the amount to be paid as Limited Return on share capital;

c. the amount proposed to be disbursed as Patronage Bonus;

d. any other matter of importance relating to energy conservation, environmental protection, expenditure or earnings in foreign exchanges;

e. any other matter which is required to be, or may be, specified by the Board;

f. the material changes and commitments, if any, affecting the financial position of the Producer Company and its subsidiary, which have occurred in between the date of the annual accounts of the Producer Company to which the balance-sheet relates and the date of the report of the Board;

v. the text of the draft resolution for the appointment of Auditors; and

vi. the text of any draft resolution proposing amendment to the Memorandum or Articles to be considered at the General Meeting, along with the recommendations of the Board.

11.11 The following powers shall be exercised only at the Annual General Meeting, namely:

i. approval of budget and adoption of annual accounts of the Company;

ii. approval of Patronage Bonus;

iii. issue of Bonus Shares;

iv. declaration of Limited Return and decision on the distribution of Patronage;

v. specifies the conditions and limits of loans that may be given by the Board to any Director;

vi. approval of the criteria for category using members into different classes; and

vii. approval of guidelines for constitution of Nominating Committee in order to Scrutinize the application for vacant position by eligible members and recommend the same for consideration at the Annual General Meeting through the Board; and

viii. Approve of any transaction of the nature as is to be reserved in the Articles for approval by the Members.

11.12 An Extra-Ordinary General meeting may be called at any time:

i. the Board; or by the Board on the requisition made in writing, duly signed and setting out the matters for the consideration, made by one-third of the Members entitled to vote in any General Meeting, proceed to call an Extra-Ordinary General Meeting in accordance with the provisions contained in the Act.

ii. If the meeting is called upon requisition by Members and there is no quorum within half an hour from the appointed time of the meeting, the meeting shall stand dissolved.

iii. All items of business to be transacted at the General Meeting shall be deemed as Ordinary.

12. Appropriation of net profit

i. The Producer Company shall maintain a general reserve fund in which 10% of the Net profit shall be transferred to the general reserves.

ii. There shall be a limited return as may be specified by the board and approved by the Board from time to time, on paid share capital;

iii. Patronage bonus may be disbursed as, amongst the Members, in proportion to their participation in the business of the producers company, either in cash or by way of allotment of equity shares or both, as may be decided by the Members at the general meeting if any, remaining after making provision for payment of limited return and reserves referred to in section 378ZJ.

iv. After making appropriation for bonus to members the balance surplus arising out of operations of the Company shall be distributed in an equitable manner by-

a. for development of the business of the Producer Company on year to year basis;

b. for common services;

c. for the education and welfare of Members, employees and others, on the principles of mutuality and techniques of mutual assistance;

d. price fluctuation or withheld price fund distributing amongst the Members of the excess, as may be admissible in proportion to their respective participants in the business;

13. Investments out of the General reserves

Investments out of the General reserves shall be made in accordance with the provisions of Act and Rules framed there under from time to time.

14. Bonus Shares

The Company may, upon recommendation of the Board and passing of resolution in the General Meeting, issue bonus shares by capitalization of amounts from General reserves in proportion to the shares held by the Members on the date of the issue of such shares.

15. PATRONAGE BONUS

The Board shall;

i. Evolve a system for ascertaining the patronage that is, use of services offered by the company and participation in the business activities of the company, of each member.

ii. Determine the patronage bonus to each member in the ratio of patronage.

iii. Disburse such bonus either in cash or by issue of equity shares of partly in cash and partly by shares.

16. Amalgamation, Merger and Division

As provided under the provisions of the Act, the Company by a resolution passed at its General Meeting may decide to transfer its assets and liabilities, in whole or in part, to any other Producer Company, to divide itself into two or more new Producer Companies, to amalgamate and form a new Producer Company, or to merge with any other Producer Company.

17. Loans and advances etc. to the Members and to any Director or his relative

17.1 Subject to the provisions of the Act, the Board may provide financial assistance to the Members by way of

a. credit facility, to any Member, in connection with the business of the Company, for a period not exceeding six months;

b. loans and advances, against security specified in articles to any Member, repayable within a period exceeding three months but not exceeding seven years from the date of disbursement of such loan or advances:

17.2 Any loan or advance to any Director of the Company or his relative shall be granted only after the approval by the Members at a General meeting.

18. Investment in other companies, formation of subsidiaries, etc.

Subject to the provision of the Act, the company by previous approval of members at its general meeting, may make investments and dispose of any such investment in other companies, enter into partnership, agreement or engagements with any person or body corporate whether by way of formation of subsidiary company, joint venture, partnership, or in any other manner, and to promote any other company or companies including producer company or companies for, the purpose of promoting and consistent with object of the company.

19. Internal Audit

The Company shall have internal audit of its accounts carried out at such interval and in such manner as may be decided by the board.

20. Books of account

The books of account shall be kept at the Registered office of the Company in accordance with and as provided under the provisions of act. If the Company has any branch office, the books of accounts shall be kept as per the provisions of the Act applicable for keeping the books of accounts of branch office.

21. MISCELLANEOUS

i. In addition to the sum as provided in the provision of these articles of association all subsidies, entrance fees, receipts on account of forfeited shares and fines other than those collected from the employees shall be carried to the Reserve Fund

ii. Any other income other than normal trading income, excess provisions and reserves, donations other than those for specific purposes etc. can be carried to a General Reserve Fund and shall be utilized with the permission of the Board from time to time.

iii. The accounting year of the Producer Company shall be from 1st April to 31st March. The books of accounts and other records shall be maintained as prescribed.

iv. The Producer Company shall not alter the conditions contained in its memorandum except in the cases, by the mode and to the extent for which express provision is made in the Act.

v. The Producer Company may, by special resolution, not inconsistent with section 378B, alter its objects specified in its memorandum.

vi. A copy of the amended memorandum, together with a copy of the special resolution duly certified by two directors, shall be filed with the Registrar within thirty days from the date of adoption of any resolution.

vii. Any amendment of the articles shall be proposed by not less than two thirds of the elected directors or by not less than one-third of the Members of the Producer Company, and adopted by the Members by a special resolution. A copy of the amended articles together with the copy of the special resolution, both duly certified by two directors, shall be filed with the Registrar within thirty days from the date of its adoption.

viii. The members shall be entitled to obtain information relating to General Business of the company if requisition is made in writing. The Board may however refuse to divulge any information, which the Board considers confidential in the interest of the company.

22. Common Seal

i. The Board shall provide for the safe custody of the Seal and subject to the provisions contained in the Companies (Issue of Share Certificates) Rules,1960, the Seal shall not be affixed to any instrument except by the authority previously given by the Board or a Committee of the Board authorised by the Board in that behalf; the Board may designate such person(s) who shall sign every instrument to which the Seal is affixed in his or their presence.

ii. All deeds, agreements, instruments, letters, bonds, affidavits, declaration, indemnities, power of attorney and other documents of any nature whatsoever entered into by the Company shall be executed by such person(s) duly authorised by the Board or the Committee thereof.

23. Secrecy Clause.

i. Every Director, Chief Executive, Officer, manager, secretary, trustee, Member of a committee, servant, agent, accountant or any other person employed in the business of the Company shall observe strict secrecy respecting all transactions of the Company except when required so to do by a Court of Law and except so far as may be necessary in order to comply with any of the provisions contained in the Articles.

ii. No Member shall be entitled to inspect the Company’s books or will be given any confidential information relating to the business of the Company without the permission of the Board of Directors of the Company.

24. APPOINTMENT OF THE COMPANY SECRETARY

i. Every Producer Company having an average annual turnover exceeding five crore rupees or such other amount as may be prescribed in each of three consecutive financial years shall have a whole-time secretary.

ii. No individual shall be appointed as whole-time secretary unless he possesses membership of the Institute of Company Secretaries of India constituted under the Company Secretaries Act, 1980.

25. WINDING-UP

i. If the Company shall be wound up and the assets available for distribution among the members as such shall be insufficient to repay the whole or the paid up Capital, such assets shall be distributed so that, as nearly as may be the losses shall be borne by the member in proportion to the capital paid up at the Commencement of the winding up, on the Shares held by them respectively at that time.

ii. If in winding up, the assets available for distribution among the members shall be more than sufficient to repay the whole of the paid up capital such assets shall be distributed amongst the Members in proportion to the Capital paid up at the commencement of the winding up on the shares held by them respectively, but the provision of this Article are to be without prejudice to the right of the holders of Shares issued upon special terms and conditions.

26. Resolution of Disputes

Any dispute relating to the formation, management or business of the company as provided under the provisions of the Act shall be settled by conciliation or by arbitration as provided under the Arbitration and Conciliation Act, 1996, and the decision of the arbitrator on the dispute shall be final.

27. AMENDMENT

Any of these articles may be amended as per the provision of Section 378-I of the Companies Act, 2013.