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Notes to Accounts of Advanta Ltd.

Dec 31, 2014

1 Corporate information

Advanta Limited (Formerly Advanta India Limited) (''the Company'') is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on National Stock Exchange and Bombay Stock Exchange. The Company is engaged in the business of research, production and sale of field crop and vegetable seeds through distributors to farmers.

2 Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956, read with General circular 8/2014 dated 4 April 2014 issued by Ministry of Corporate Affairs. The financial statements have been prepared on an accrual basis and under the historical cost convention except for derivative financial instruments which have been measured at fair value. The accounting policies have been consistently applied and are consistent with those used in the previous year.

3. Contingent liabilities

a) Income tax matters under dispute: Pending with authorities at various Levels. Rs.1,419.52 lacs (Previous year: Rs.2,856.88 lacs) excluding interest and penalty.

b) Service tax matters under dispute: Pending with CESTAT, Bangalore Rs.490.13 lacs (Previous year: 490.13) exclusive of penal interest.

c) Claims against the Company not acknowledged as debts Rs.52.97 lacs (Previous year: Rs.73.75 lacs).

In respect of items above, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgments/decisions pending at various forums/authorities. The management believes that the ultimate outcome of above proceeding will not have a material adverse effect on the Company''s financial position and results of operations.

d) In January, 2013, the Company has received a show cause notice from the Directorate of Enforcement, alleging that the Company has contravened certain provisions of the Foreign Exchange Management Act, 1999 with regard to foreign direct investment made/received and its utilisation. The Management has replied to the show cause notice and had personal hearings to represent their matter and the same is pending before the authority and believes that there is a fair chance of defending the case based on internal assessment/legal opinion.

e) Guarantee given by the Company on behalf of subsidiary companies Rs.23,511.11 lacs (Previous year: Rs.17,279.03 lacs).

5. Capital and other commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) Rs.56.41 lacs (Previous year: Rs.44.15 lacs).

b) For commitments relating to lease arrangements, please refer note 37.

6. Government grants / subsidy

Capital reserve represents State Investment subsidy sanctioned by the Government of Andhra Pradesh, for setting up of a unit at Toopran Mandal, Andhra Pradesh under Target 2000 Scheme of the State Government.

7. Details of dues to Micro and Small Enterprises as defined under the MSMED Act, 2012

Based on the information available with the Company, there are no suppliers who are registered as micro, small or medium enterprises under "The Micro, Small and Medium Enterprises Development Act, 2006", to whom the Company has paid interest or any interest payable on balances outstanding as at December 31, 2014 and December 31, 2013.

8(i) Employees stock option plan (ESOP)

The Company provides share-based payments to its employees. During the year ended December 31, 2014, the following employee stock option plans (ESOPs) were in existence. The relevant details of the scheme and the grant are as follows:

a Employees stock option and share plan 2006

The Company instituted an Employees Stock Option Scheme ("ESOPs") for certain employees as approved by the shareholders on September 20, 2006 which provides for a grant of 840,000 options (each option convertible into share) to employees.

d Intrinsic value is H Nil for the options granted, hence no employee stock option compensation.

e Since, the Company used the intrinsic value method the impact on the reported net profit and earnings per share by applying the fair value method is as under:

9. Segment information

In accordance with accounting standard 17-Segment Reporting, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in the financial statements.

b Names of other related parties with whom transactions have taken place during the year

Enterprises having significant influence

UPL Limited (Formerly United Phosphorus Limited) Jai Research Foundation Demuric Holdings Private Limited Swal Corporation Limited

Key managerial person

Mr. Venkatram Vasantavada - Whole Time Director (appointed w.e.f. November 01, 2014) Mr. V. R. Kaundinya - Managing Director (resigned w.e.f. January 01, 2014)

10. Details of employee benefits

(i) Defined benefit plan-gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn basic salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled. There has been significant change in the expected rate of return on assets due to the improved stock market scenario.

(ii) Defined contribution plan

Contribution to provident fund and superannuation fund amounting to Rs.32.44 lacs (Previous year: Rs.41.32 lacs) has been recognised as an expense and included in note 24 under ''Contribution to provident and other funds'' in the Statement of Profit and Loss.

11. Operating leases

Company as lessee (Lease payments)

Office premises and motor vehicles are taken on operating lease. The lease term is in the range of three years to ten years and thereafter renewable. The lease is cancellable at any time and there is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases. Lease rental expense for the year for the agreements entered into is H364.32 lacs including land lease charges of Rs.238.96 lacs. (Previous year: H298.95 lacs including land lease charges of Rs.242.51 lacs).

Company as lessor (Lease receipts)

The Company entered into an agreement for lease of certain assets and Rs.150.00 lacs (Previous year: Rs.150.00 lacs) have been recognised as rental income in the Statement of Profit and Loss. The lease is cancellable at any time.

12. The remuneration paid to Mr. Venkatram Vasantavada, Whole-Time Director is in excess of the limits specified under Part II of Schedule V to the Companies Act, 2013. Subsequent to the balance sheet date, the Company has made an application to the Central Government for seeking its approval for payment of remuneration upto H250 lacs p.a for a period of 3 years commencing from November 1, 2014. The remuneration paid to Mr. Venkatram for the period November 1, 2014 to December 31, 2014 is subject to the approval of Central Government.

13. Previous year figures have been regrouped/reclassified, where necessary, to conform to the current year''s classification.


Dec 31, 2013

1) Rs.14,700 lacs (Previous year: Rs.14,900 lacs) non convertible debentures (NCDs) consisting of 1,470 (Previous year: 1,490) unsecured redeemable non convertible debentures of Rs.10 lacs each redeemable at par at the end of five years from the date of allotment viz March 13, 2010 or at every interest payment date, which is on quarterly basis at the option of the Company.

2) NCD''s carry a coupon rate of Indian Benchmark rate (INBMK) 2% with a minimum floor price of 10% per annum.

3) As per the Information Memorandum for Non-convertible Debentures issued by the Company, the Company is authorised to purchase its own NCDs from time to time from the open market in accordance with the applicable laws. Pursuant to the said Information Memorandum, the Company during the current year, has purchased 150 NCD''s and issued 130 NCDs. Outstanding NCDs referred in Note 1 excludes the debentures held in the name of the Company as on 31st December 2013, in respect of which the Company shall have the right to re-issue the debentures as and when the Company may deem fi t.

b) Foreign currency floating rate guaranteed convertible bonds are due in 2016. 250 Floating rate guaranteed convertible bonds of USD 200,000 each:

4) FCCB''s are convertible by the bondholders into ordinary equity or Global Depository Shares (GDSs) at any time on and after July 15, 2011 up to the close of business on July 2, 2016. The FCCB''s will be convertible at an initial conversion price of Rs. 56.57 per share of Rs.2/- each (Previous year: Rs. 282.84 per share of Rs.10/- each) and are listed on Singapore Stock Exchange.

5) FCCB''s are redeemable, in whole but not in part, at the option of the Company on or at any time after July 9, 2014, subject to the fulfillment of certain terms and obtaining requisite approvals.

6) FCCB''s are redeemable on maturity date of July 9, 2016 at par, if not redeemed or converted earlier.

7) FCCB''s carry an interest rate of LIBOR 3.5%.

(c) Term loans of Rs.2,500 lacs (Previous year: Rs.5,000 lacs) from bank carries interest rate 12% to 13.25% per annum and repayable in 8 quarterly installments of Rs. 625 lacs starting from January 2013.

(d) The Company has entered into an agreement with the BIRAC, Ministry of Science and Technology, Government of

ndia (''DBT'') for seeking assistance in the form of Grant/loan under the DBT scheme, viz. Biotechnology Industry Partnership Program (''BIPP scheme'') in relation to project of "Multi stacking genes to develop engineered rice with enhanced drought and multiple disease and pest tolerance ("Rice Project")" and "RNAi and other cutting edge technological interventions to develop insect-pest, diseases and viruses tolerant tomato hybrids for Indian and international markets ("Tomato Project")" ("the projects"), in connection with the same the Company has received assistance in the form of loan at interest rate of 2%/3% for 104.72 lacs (Previous year: Rs.63.93 lacs) and in the form of grant for 104.72 lacs (Previous year: Rs.63.93lacs). The unutilised grant of Rs.64.65 lacs (Previous year: Rs.46.07 lacs) is considered as "other long term liabilities".

Loan amounting to Rs. 72.17 lacs pertaining to rice project is repayable in 10 equal half yearly installments starting from August 2015 and loan amounting to Rs.32.55 lacs pertaining to tomato project is repayable in 10 equal half yearly installments starting from April 2015.

The loan is secured by way of hypothecation of all equipment, apparatus, machineries, machinery spares and other accessories, goods and/or other movable property, and/or immovable property of the Company acquired for the project through contribution by the Company and/or by the DBT to a value equivalent to loan amount and interest thereon. In view of the transfer of BIPP scheme from DBT to BIRAC, the Company has executed the Agreements and will shortly execute the Deed of hypothecation in favor of BIRAC.

8. Arrangement with UPL Limited

In previous year, the Company had entered into a License Agreement effective from April 2, 2012 with United Phosphorous Limited (UPL) to grant technical know-how for commercial exploitation, development, use and sale of its Licensed Products and use of brands. In consideration thereof, the Company has received a royalty at the rate of 7 % of net sales revenue of its Licensed Products amounting to Rs. 930.95 (Previous year: Rs. 640.51 lacs). Further, the Company carries out research and development activities, as agreed, in connection with the Licensed Products and accordingly, the Company has received an amount of Rs.709.01 lacs (Previous year: Rs.1,115.00 lacs) as per the agreement entered between both the parties.

9. Amalgamation of Unicorn Seeds Private Limited

Pursuant to the Scheme of Amalgamation (''the Scheme'') under Sections 391 to 394 of the Companies Act, 1956, the Honorable High Court of Andhra Pradesh had pronounced an order on October 9, 2012 sanctioning the Scheme of amalgamation of Unicorn Seeds Private Limited (''Unicorn''), a wholly owned subsidiary of the Company with the Company from the appointed date i.e. April 1, 2011. The Scheme became effective on November 23, 2012 upon fi ling of the said order with the Registrar of Companies, Hyderabad. Consequently, all the assets and liabilities of the Unicorn were transferred to and vested in the Company with effect from April 1, 2011.

The amalgamation was accounted for under the "pooling of interest" method referred to in the Accounting Standard 14 - Accounting for Amalgamation, as prescribed by the Scheme. Accordingly, all the assets, liabilities and other reserves of Unicorn as on April 1, 2011 had been aggregated at their respective book values.

The Company was holding the entire paid-up capital of Unicorn and hence no consideration had been issued for the aforesaid amalgamation. Further the share capital of Unicorn had been cancelled and the corresponding amount of Rs.136.10 lacs had been credited to the Capital Reserve account.

In accordance with the scheme, the cost of investment in the equity share capital and preference share capital of Unicorn aggregating to Rs. 4,966.32 had been debited to the Securities Premium of the Company.

The accounts of Unicorn for the year ended December 31, 2011 were finalized as a separate entity. The net loss amounting to Rs.160.36 lacs of Unicorn for the period April 1, 2011 to December 31, 2011 had been adjusted in the statement of profit and loss of the Company for previous year ended December 31, 2012.

Contingent liabilities

a) Income tax matters under dispute: Pending with authorities at various levels. Rs.2,856.88 lacs (Previous year: Rs. 2,347.14 lacs).

b) Service tax matters under dispute: Pending with CESTAT, Bangalore Rs.490.13 Lacs (Previous year: 490.13) exclusive of penal interest.

c) Claims against the Company not acknowledged as debts f 73.75 lacs (Previous year: Rs.151.00 lacs).

In respect of items above, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgments/decisions pending at various forums/authorities. The management believes that the ultimate outcome of above proceeding will not have a material adverse effect on the Company''s financial position and results of operations.

d) In January, 2013, the Company has received a show cause notice from the Directorate of Enforcement, alleging that the Company has contravened certain provisions of the Foreign Exchange Management Act, 1999 with regard to foreign direct investment made/received and its utilisation. The Management has replied to the show cause notice and had personal hearings to represent their matter and the same is pending before the authority and believes that there is a fair chance of defending the case based on internal assessment/ legal opinion.

e) Guarantee given by the Company on behalf of subsidiary companies Rs.17,279.03 lacs (Previous year: Rs.6,010.03 lacs).

10. Capital and other commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) Rs.44.15 lacs (Previous year: Rs.23.55 lacs).

b) For commitments relating to lease arrangements, please refer note 38.

11. Government grants / subsidy

Capital reserve represents State Investment subsidy sanctioned by the Government of Andhra Pradesh, for setting up of a unit at Toopran Mandal, Andhra Pradesh under Target 2000 Scheme of the State Government.

12. Details of dues to Micro and Small Enterprises as defined under the MSMED Act, 2012

Based on the information available with the Company, there are no suppliers who are registered as micro, small or medium enterprises under "The Micro, Small and Medium Enterprises Development Act, 2006", to whom the Company has paid interest or any interest payable on balances outstanding as at December 31, 2013 and December 31, 2012.

13(i) Employees stock option plan (ESOP)

a The Company instituted an Employees Stock Option Scheme ("ESOP") for certain employees as approved by the shareholders on September 20, 2006. During the year ended December 31, 2013, the following scheme is under operation:

13(ii) Advanta Employee Stock Option Plan 2013

During the financial year ended December 31, 2013, the Company introduced a new employee stock option plan under the captioned name, upon obtaining approval by the shareholders through Postal Ballot process.

Under the said plan, a maximum of 13,00,000 options have been reserved to be issued to such eligible employees of the Company and also to that of its subsidiaries as may be decided by the Remuneration Committee from time to time, which if exercised would give rise to equal number of shares of Rs.2/- each.

b Names of other related parties with whom transactions have taken place during the year:

Enterprises having significant influence

UPL Limited (Formerly United Phosphorus Limited)

Jai Research Foundation

Demuric Holdings Private Limited

Swal Corporation Limited

Key managerial person

Mr. V. R. Kaundinya Managing Director (resigned w.e.f. January 1, 2014)

14. Details of employee benefits

(i) Defined benefit plan-gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn basic salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

(ii) Defi ned contribution plan

Contribution to provident fund and superannuation fund amounting to Rs.41.32 lacs (Previous year: Rs.28.07 lacs) has been recognised as an expense and included in note 23 under ''Contribution to provident and other funds'' in the Statement of Profit and Loss.

15. Operating leases

Company as lessee (Lease payments)

Office premises and motor vehicles are taken on operating lease. The lease term is in the range of three years to ten years and thereafter renewable. The lease is cancellable at any time and there is no escalation clause in the ease agreement. There are no restrictions imposed by lease arrangements. There are no subleases. Lease rental expense for the year for the agreements entered into is Rs. 298.95 lacs including land lease charges of Rs. 242.51 lacs. (Previous year: Rs.98.82 lacs including land lease charges of Rs.2.71 lacs).

Company as lessor (Lease receipts)

The Company entered into an agreement for lease of certain assets and Rs.150.00 lacs (Previous year: Rs.112.50 lacs) have been recognised as rental income in the Statement of Profit and Loss. The lease is cancellable at any time.

16. Particulars of derivatives contracts entered into for hedging purpose outstanding as at balance sheet date

Purpose: Hedge of foreign currency advance given to subsidiary (in EURO) and hedge against exposure to variable interest outflow on loans. As per the full currency swap arrangement, the Company converts underlying INR liability to EURO liability to provide a natural hedge against the EURO loan given. As per the arrangement, the Company will receive 6.51%p.a on INR notional liability (Rs.10,000 lacs) for the period and pay Nil on EURO Notional. As on the balance sheet date, a mark to market valuation of the outstanding swaps resulting in a notional loss of Rs.2,313.78 lacs (Previous year: Rs. 690.53 lacs) is charged to Statement of Profit and Loss. Also, a corresponding unreaslized gain on restatement of EURO loan given of Rs. 2,342.83 lacs (Previous year: Rs. 642.14 lacs) and interest on swap arrangement of Rs. 629.58 lacs (Previous year: Rs. 557.98 lacs) has been credited to Statement of Profit and Loss.

17. Exceptional item

Exceptional item reflects a charge of Rs. Nil (Previous year Rs.470.42 lacs) arising out of settlement of litigation with a vendor.

18. The Company had incurred Rs.84.41 lacs until December 31, 2012 in connection with the proposed rights issue of its equity shares which was carried forward and disclosed under other current assets. However, the Company did not offer the proposed rights issue within the extended period provided by the SEBI and accordingly the same has been charged to Statement of Profit and Loss during the current year.

19. In the previous year, the Company had made an application to Central Government seeking its approval to pay remuneration to Mr. V.R.Kaundinya, Managing Director for a period of 3 years, i.e., from July 10, 2012 to July 9, 2015. During the current year vide its Letter dated, October 21, 2013, the Central Government approved the payment of remuneration for one year i.e. July 10, 2012 to July 9, 2013. Hence, the Company has made another application to the Central Government for seeking its approval for payment of remuneration to Mr. V.R.Kaundinya, Managing Director up to Rs.200 lacs p.a for the period starting from July 10, 2013 to December 31, 2013. Accordingly, the Company has paid the remuneration for the aforesaid period subject to approval of Central Government.

20. Previous year figures have been regrouped/reclassified, where necessary, to conform to the current year''s classification.


Dec 31, 2012

1 Corporate Information

Advanta India Limited (''AIL'' or ''the Company'') is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The Company is engaged in the business of research, production and sale of field crops and vegetable seeds through distributors to farmers.

2 Basis of Preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies have been consistently applied and are consistent with those used in the previous year.

(a) Terms/rights attached to equity shares

The Company has one class of equity shares having par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

(b) Shares reserved for issue under options

For details of shares reserved for issue under the employee stock option (ESOP) plan of the Company, refer note 31.

Notes:

a) Unsecured Redeemable Non Convertible Debentures

1) Rs. 14,900 lacs (Previous year: Rs. 16,200 lacs) non convertible debentures (NCDs) consisting of 1,490 (Previous year: 1,620) unsecured redeemable non convertible debentures of Rs. 10,00,000 each redeemable at par at the end of five years from the date of allotment viz 13th March 2010 or at every interest payment date, which is on quarterly basis at the option of the company.

2) NCD''s carry a coupon rate of INBMK 2% with a minimum floor price of 10% per annum.

3) As per the Information Memorandum for Non-convertible Debentures issued by the Company, the Company is authorised to purchase its own NCDs from time to time from the open market in accordance with the applicable laws. Pursuant to the said Information Memorandum, the Company, during the current year, has purchased and reissued NCDs and at year end, 130 NCDs are in the name of the Company as on 31st December 2012. Outstanding NCDs referred in Note No. 1 excludes the debentures held in the name of the Company as on 31st December 2012, in respect of which the Company shall have the right to re-issue the Debentures as and when the Company may deem fit.

b) Foreign Currency Floating Rate Guaranteed Convertible Bonds due 2016.

250 Floating Rate Guaranteed Convertible Bonds of USD 200,000 each:

1) FCCB''s are convertible by the bondholders into Ordinary Shares or Global Depository Shares (GDSs) at any time on and after 15th July 2011 up to the close of business on 2nd July 2016. The FCCB''s will be convertible at an initial conversion price of Rs. 282.84 per share and are listed on Singapore Stock Exchange.

2) FCCB''s are redeemable, in whole but not in part, at the option of the Company on or at any time after July 9, 2014, subject to the fulfillment of certain terms and obtaining requisite approvals.

3) FCCB''s are redeemable on maturity date of 9th July 2016 at par, if not redeemed or converted earlier.

4) FCCB''s carry an interest rate of LIBOR 3.5%.

c) Term loans of Rs. 5,000 lacs (Previous year: Rs. 5,000 lacs) from bank carries interest rate 12% to 13% per annum. and repayable in 8 quarterly installments of Rs. 625 lacs starting from Jan, 2013.

d) The Company has entered into an agreement with the Department of Biotechnology, Ministry of Science and Technology, Government of India (''DBT'') for seeking assistance in the form of Grant/loan'' under the DBT scheme, viz. Biotechnology Industry Partnership Program (''BIPP'' scheme'') in relation to projected of "Multi stacking genes to develop engineered rice with enhanced drought and multiple disease and pest tolerance" and "RNAi and other cutting edge technological interventions to develop insect-pest, diseases & viruses tolerant tomato hybrids for Indian & International markets" ("the projects"), in connection with the same the Company has received assistance in the form of loan at interest rate of 2%/3% for Rs. 63.93 lacs and in the form of Grant for Rs. 63.93 lacs. The unutilised grant of Rs. 46.07 lacs (Previous year - Rs. 58.47 lacs) is considered as other long term liabilities. The loan is secured by way of hypothecation of all equipment, apparatus, machineries, machinery spares and other accessories, goods and/or other movable property, and/ or immovable property of the Company acquired for the project through contribution by the Company and/or by the DBT to a value equivalent to loan amount and interest thereon.

3. Arrangement with United Phosphorous Limited

The Company has entered into a License Agreement effective from 2nd April 2012 with United Phosphorous Limited (UPL) to grant technical know-how for commercial exploitation, development, use and sale of its Licensed Products and use of brands. In consideration thereof, the Company has received a royalty at the rate of 7% of net sales revenue of its Licensed Products amounting to Rs. 640.51 lacs. Further, Company shall carry out research and development activity, as agreed, in connection with the Licensed Products and accordingly, the Company has received an amount of Rs. 1,115.00 lacs as per the agreement entered between both the parties.

4. Amalgamation of Unicorn Seeds Private Limited

Pursuant to the Scheme of Amalgamation (''the Scheme'') under Sections 391 to 394 of the Companies Act, 1956, the Honorable High Court of Andhra Pradesh has pronounced an order on October 9, 2012 sanctioning the Scheme of amalgamation of Unicorn Seeds Private Limited (''Unicorn''), a wholly owned subsidiary of the Company with the Company from the appointed date viz April 1, 2011. The Scheme became effective on November 23, 2012 upon filing of the said order with the Registrar of Companies, Hyderabad. Consequently, all the assets and liabilities of the Unicorn have been transferred to and vested in the Company with effect from April 1, 2011. The scheme has accordingly been given effect to in these accounts.

The amalgamation has been accounted for under the "pooling of interest" method referred to in the Accounting Standard 14 - Accounting for Amalgamation, as prescribed by the Scheme. Accordingly, all the assets, liabilities and other reserves of Unicorn as on April 1, 2011 have been aggregated at their respective book values.

The Company was holding the entire paid-up capital of Unicorn and hence no consideration has been issued for the aforesaid amalgamation. Further the share capital of Unicorn has been cancelled and the corresponding amount of Rs. 136.10 lacs has been credited to the Capital Reserve.

In accordance with the scheme, the cost of investment in the equity share capital and preference share capital of Unicorn aggregating to Rs. 4,966.32 has been debited to the Securities Premium of the Company.

The accounts of Unicorn for the year ended December 31, 2011 were finalised as a separate entity. The net loss amounting to Rs. 160.36 lacs of Unicorn for the period April 1, 2011 to December 31, 2011 has been adjusted in the statement of profit and loss of the Company.

5. Contingent Liabilities as at the Balance Sheet date

Income tax matters under dispute:

Pending with authorities at various levels - Rs. 2,347.14 lacs (Previous Year: Rs. 1,846.75 lacs)

Service tax matters under dispute:

Pending with CESTAT, Bangalore Rs. 490.13 Lacs (Previous Year: Nil) exclusive of penal interest

Claims against the Company not acknowledged as debts Rs. 151.00 lacs (Previous Year: Rs. 8,008.09 lacs).

In respect of items above, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgments/decisions pending at various forums/authorities. The management believes that the ultimate outcome of above proceeding will not have a material adverse effect on the company''s financial position and results of operations.

Guarantee given by company on behalf of subsidiary companies Rs. 6,010.03 lacs (Previous Year: Rs. 8,798.77 lacs)

6. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) Rs. 23.55 lacs (Previous Year: Rs. 54.39 lacs).

7. Government grants / subsidy

Capital Reserve represents State Investment subsidy sanctioned by the Government of Andhra Pradesh, for setting up of a unit at Toopran Mandal, Andhra Pradesh under Target 2000 Scheme of the State Government.

8 Details of dues to Micro and Small Enterprises as defined under the MSMED Act,2012:

Based on the information available with the Company, there are no suppliers who are registered as micro, small or medium enterprises under "The Micro, Small and Medium Enterprises Development Act, 2006", as at 31st December, 2012.

9. Employees Stock Option Plan (ESOP)

a. The Company instituted an Employees Stock Option Scheme ("ESOPS") for certain employees as approved by the shareholders on September 20, 2006. During the year ended December 31, 2012, the following scheme is under operation:

10. Segment Information

a. Business Segment:

The Company has considered Business segment as the primary segment for disclosure. The Company is engaged in research, production and distribution of Hybrid seeds, which in the context of Accounting Standards 17 issued by the Institute of Chartered Accountants of India is considered the only Business Segment.

b. Geographical Segment:

Secondary segmental information is based on the geographical location of the customers. The geographical segment have been disclosed based on revenues within India (sales to customers in India) and revenues outside India (sales to customer located outside India.)

b. Names of other related parties with whom transactions have taken place during the year: Enterprises having Significant Influence

United Phosphorus Limited Jai Research Foundation PT United Phosphorus Indonesia Demuric Holdings Private Limited Swal Corporation Limited

Key Managerial Personnel

Mr. V. R.Kaundinya — Managing Director

35. Details of Employee Benefits

(i) Defined Benefit Plans-Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

(ii) Defined contribution plan:

Amount of Rs. 28.07 lacs (Previous Year: Rs. 116.63 lacs) has recognised as an expense and included in Note 22 — ''Contribution to Provident and Other Funds'' in the statement of profit and loss

11. Leases:

Operating Lease

Office Premises, motorcars are obtained on operating lease. The lease term is in the range of 3 years to 10 years and thereafter renewable. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases. Lease rental expense for the year for the agreements entered into is X 98.82 lacs including land lease charges of Rs. 2.71 lacs. (Previous Year: Rs. 642.96 lacs including land lease charges of t 384.04 lacs)

12. Exceptional item

Exceptional item reflects a charge of Rs. 470.42 lacs arising out of settlement of litigation with a vendor.

13. Up to December 31, 2012, the Company has incurred Rs. 84.41 lacs (Previous Year: Rs. 48.41 lacs) in connection with the proposed rights issue of its equity shares. This amount shall be adjusted against securities premium arising from the proposed rights issue of equity shares, as permitted under section 78 of the Companies Act, 1956. Accordingly, this amount has been carried forward and disclosed under the note 16.2 ''Unamortized expenditure''.

14. In August 2012, the Company has made an application to the Central Government (MCA) seeking its approval for the re-appointment of Mr.V. R. Kaundinya as Managing Director of the Company for a period of 3 years at a maximum remuneration of Rs. 200 lacs per annum for the period starting from 10th July 2012,as the remuneration to be paid by the company is in excess of limit prescribed under the Companies Act,1956. The approval is awaited in this regard. Pending approval, the remuneration is paid to the Managing Director on the basis of existing approval.

15. During the year ended 31 December 2012, the revised Schedule VI notified under the Companies act 1956, has become applicable to the company. The company has reclassified previous year figures to conform to this year''s classification. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of balance sheet. In view of the arrangement with UPL (refer note 25) and amalgamation of Unicorn Seeds Private Limited (refer note 26) the figures for the current year are not comparable with previous year.


Dec 31, 2011

1. NATURE OF OPERATIONS

The Company is engaged in the business of manufacturing and sale of Telecommunication cables, other types of wires & cables, FRP rods/Glass rovings, etc. and Engineering, Procurement and Construction (EPC) business.

2. Government grants / subsidy:

a) Capital Reserve represents State Investment subsidy sanctioned by the Government of Andhra Pradesh, for setting up of a unit at Toopran Mandal, Andhra Pradesh under Target 2000 Scheme of the State Government.

b) The Company has entered into an agreements with the Department of Biotechnology, Ministry of Science and Technology, Government of India ('DBT') for seeking assistance in the form of 'Grant/loan' under the DBT scheme, viz. Biotechnology Industry Partnership Program ('BIPP' scheme') in relation to project of "Multi stacking genes to develop engineered rice with enhanced drought and multiple disease and pest tolerance" and "RNAI and other cutting edge technological interventions to develop insect-pest, diseases & viruses tolerant tomato hybrids for Indian & International markets" ("the projects"), in connection with the same the Company has received assistance in the form of loan at interest rate of 2%/3% for Rs 63.93 lacs and in the form of Grant for Rs 63.93 lacs. The unutilised grant of Rs 58.47 lacs is considered as liability.

3. Contingent Liabilities as at the Balance Sheet date:

(i) Income tax matters under dispute:

Pending with authorities at various levels - Rs 1,846.75 lacs (Previous Year: Rs 1922.35 lacs);

(ii) Claims against the Company not acknowledged as debts Rs 8,008.09 lacs. (Previous Year: Rs 8,019.59 lacs). Includes a claim of Rs 7,903.39 lacs made by a party which the Company has disputed and has filed a counter claim against the said party for an amount of Rs 2,739.07 lacs.

(iii) Guarantee is given by company on behalf of subsidiary companies Rs 8,798.77 lacs. (Previous Year: Rs 7,986.77 lacs)

4. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) Rs 54.39 lacs (Previous Year: Rs 34.90 lacs).

5. Based on the information available with the Company, there are no suppliers who are registered as micro, small or medium enterprises under "The Micro, Small and Medium Enterprises Development Act, 2006", as at 31st December, 2011.

6. Employees Stock Option Plan (ESOP)

The Company instituted an Employees Stock Option Scheme ("ESOPS") for certain employees as approved by the shareholders on 20th September, 2006. In accordance with the scheme, the Company granted options in respect of 178,779 equity shares to employees of the Company and its subsidiaries on one to one basis at an exercise price of Rs 285/- being the market price as per the valuation report from a Chartered Accountant on the date of grant. The options were granted with a vesting period spread over 4 years and 6 months. Out of the total options granted, vesting of 50% of the options granted is conditional upon the Company meeting annual performance benchmarks based on parameters set by the Remuneration Committee.

7. Segment Information

a. Business Segment:

The Company has considered Business segment as the primary segment for disclosure. The Company is engaged in research, production and distribution of Hybrid seeds, which in the context of Accounting Standards 17 issued by the Institute of Chartered Accountants of India is considered the only Business Segment.

b. Geographical Segment:

Secondary segmental information is based on the geographical location of the customers. The geographical segment have been disclosed based on revenues within India (sales to customers in India) and revenues outside India (sales to customer located outside India.)

* Includes Investments Rs36,252.19 lacs (Previous year Rs36,252.19 lacs), Loans and Advances Rs 40,360.94 lacs (Previous year Rs29,664.00 lacs), Debtors Rs 4.65 lacs (Previous year Rs120.80 lacs) and Other Current Assets Rs 296.60 lacs ( Previous year Rs 531.27 lacs)

Note: Figures in brackets represents amounts pertaining to the previous year.

A. Names of other related parties with whom transactions have taken place during the year:

Enterprises having Significant Influence

United Phosphorus Limited Jai Research Foundation PT United Phosphorus Indonesia Demuric Holdings Private Limited

Key Managerial Personnel

Mr. V. R . Kaundinya - Managing Director

8. Details of Employee Benefits - Gratuity

(i) Defined Benefit Plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled. There has been significant change in the expected rate of return on assets due to the improved stock market scenario.

Notes

1. The estimates of future salary increases, considered in actuarial valuation, takes account of Inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

2. The disclosure in respect of status of defined benefits obligation have been given for the current year and the three previous years since the Company have adopted AS 15 (Revised) in the year F2008.

(ii) Defined Contribution Plans

Amount of Rs116.63 lacs (Previous Year: Rs130.52 lacs) is recognised as an expense and included in Schedule Q - 'Contribution to Provident and Other Funds' in the Profit and Loss account.

9. Leases: Operating Lease

Office Premises, motorcars are obtained on operating lease. The lease term is in the range of 3 years to 10 years and thereafter renewable. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases. Lease rental expense for the year for the agreements entered into is Rs 258.92 lacs. (Previous Year: Rs 462.98 lacs)

Basic and Diluted earnings per share are calculated by dividing the net profit for the Year attributable to equity share holders by the weighted average number of equity shares outstanding during the year.

10. Provision for Milestone Payments

The Company had entered into a business purchase agreement (BPA) on January 4, 2008 with the erstwhile promoters of Unicorn Seeds Private Limited (USPL) for acquisition of their entire shareholding in USPL. Pursuant to the BPA, the Company had recognized a provision of Rs1,000 lacs for milestone payable on achievement of certain targets upto June 30, 2010. During the year the Company has executed agreement for settlement with erstwhile promoters of USPL, pursuant to which payment to the extent of Rs 650 lacs has been agreed and made. Further the company has written back the liability being no longer payable of Rs 34.47 lacs, with corresponding reduction in the carrying value of investment in USPL.

11. Research and Development Expenses:

a) Revenue Rs 673.64 lacs (Previous Year: Rs 790.87 lacs)

b) Capital Rs 105.78 lacs (Previous Year: Rs 32.35 lacs)

11. Foreign Currency Convertible Bonds (FCCBs) Floating Rate Guaranteed Convertible Bonds due 2016 250 Floating Rate Guaranteed Convertible Bonds of USD 200,000 each are:

a) Convertible by the bondholders into Ordinary Shares or Global Depository Shares (GDSs) at any time on and after 15th July 2011 up to the close of business on 2nd July 2016. The FCCB's will be convertible at a initial conversion price of Rs 282.84 per share and are listed in Singapore Stock Exchange.

b) Redeemable, in whole but not in part, at the option of the Company on or at any time after July 9, 2014, subject to the fulfillment of certain terms and obtaining requisite approvals.

c) Redeemable on maturity date of 9th July 2016 at par, if not redeemed or converted earlier.

Expense related to the issue of FCCB's are adjusted against the Securities Premium, accordingly an amount of Rs 695.77 Lacs (net of taxes: Rs Nil) has been adjusted against the securities premium account.

12. Non Convertible Debentures

The Company has redeemed Debenture of Rs 12,500 lacs (Unsecured Redeemable Non Convertible Debentures issued on 25th September 2010) and Rs 8,800 lacs (out of Rs 25,000 lacs Unsecured Redeemable Non Convertible Debentures issued on 13th March 2010) by exercising call options on 1st July, 2011.

As on 31st December 2011 the outstanding Non Convertible Debentures of Rs 16,200 lacs consisting of 1,620 Unsecured Redeemable Non Convertible Debentures of Rs 1,000,000 each redeemable at par at the end of five years from the date of allotment viz. 13th March 2010, or at every interest payment date, which is on quarterly basis at the option of the Company.

13. The Company has entered into a cost sharing agreement on 1st December 2011with Advanta Holding BV, Netherlands ("the subsidiary") with effective from 1st January 2011. Pursuant to that the Company has recovered Rs 825.79 Lacs (Previous Year: Rs Nil) from the subsidiary and the same has been adjusted against the respective expenses as under:

14. Up to December 31, 2011, the Company has incurred Rs 48.41 lacs (Previous Year: Rs 53.21 lacs) in connection with the proposed rights issue of its equity shares. This amount shall be adjusted against securities premium arising from the proposed rights issue of equity shares, as permitted under section 78 of the Companies Act, 1956. Accordingly, this amount has been carried forward and disclosed separately under the head 'Miscellaneous Expenditure' in the Balance Sheet.

15. Previous year's figures have been regrouped where necessary to confirm to this year's classification.


Dec 31, 2009

1. Nature of operations

Advanta India Limited (AIL or the Company) is engaged in the business of research, production and sale of field crops and vegetable seeds through distributors to farmers.

2. Capital Reserve represents State Investment subsidy sanctioned by the Government of Andhra Pradesh, for setting up of a unit at Toopran Mandal, Andhra Pradesh under Target 2000 Scheme of the State Government.

3. Contingent Liabilities as at the Balance Sheet date:

(i) Income tax matters under dispute:

a) Pending with authorities at various levels - Rs. 1,922.35 lacs (Previous Year: Rs. 1,577.54 lacs);

b) Estimated liability on the basis of past assessments in respect of pending assessments - Rs. 160.72 lacs (Previous Year :Rs 380.79 lacs);

(ii) Claims against the Company not acknowledged as debts Rs.8,035.59 lacs. (Previous Year: Rs. 56.61 lacs).

Includes a claim of Rs.7,903.39 lacs made by a party which the Company has disputed and has filed a counter claim against the said party for an amount of Rs.2,739.07 lacs.

(iii) Guarantee is given by company on behalf of subsidiary companies Rs. 3,542.10 lacs. (Previous Year: Rs.750 lacs)

(iv) Guarantee given by companys banker on behalf of the company Rs. Nil (Previous Year: Rs.100 lacs)

4. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) Rs. 33.54 lacs (Previous Year: Rs. 97.91 lacs).

5. Based on the information available with the Company, there are no suppliers who are registered as micro, small or medium enterprises under "The Micro, Small and Medium Enterprises Development Act, 2006", as at 31st December, 2009.

6. Employees Stock Option Plan (ESOP)

The Company instituted an Employees Stock Option Scheme ("ESOPS") for certain employees as approved by the shareholders on 20th September, 2006. In accordance with the scheme, the Company granted options in respect of 146,248 equity shares to employees of the Company and its subsidiaries on one to one basis at an exercise price of Rs.285/- being the market price as per the valuation report from a Chartered Accountant on the date of grant. The options were granted with a vesting period spread over 4 years and 6 months. Out of the total options granted, vesting of 50% of the options granted is conditional upon the Company meeting annual performance benchmarks based on parameters set by the Remuneration Committee.

7. Segment Information:

a. Business Segment:

The Company has considered Business segment as the primary segment for disclosure. The Company is engaged in research, production and distribution of Hybrid seeds, which in the context of Accounting Standards 17 issued by the Institute of Chartered Accountants of India is considered the only Business Segment.

b. Geographical Segment:

Secondary segmental information is based on the geographical location of the customers. The geographical segment have been disclosed based on revenues within India (sales to customers in India) and revenues outside India (sales to customer located outside India.)

8. Related Party Disclosures:

a. Names of related parties where control exist irrespective of whether transactions have occurred or not:

Subsidiaries

Name of the Company Country of Incorporation

Advanta Holdings B.V. Netherlands

Advanta Netherlands Holdings B.V. Netherlands

Advanta Finance B.V. Netherlands

Advanta International B.V. Netherlands

Pacific Seeds (Thai) Limited Thailand

Pacific Seeds Holdings (Thai) Limited Thailand

Pacific Seeds Pty. Limited Australia

Advanta Semillas SAIC Argentina

Advanta Seeds International Mauritius

Longreach Plant Breeders Management Pty. Limited Australia

Advanta Comercio De Sementas LTDA Brazil

PT Advanta Indonesia Indonesia

Advanta US Inc USA

Unicorn Seeds Private Limited India

Advanta Seeds Limited India

b. Names of other related parties with whom transactions have taken place during the year:

Enterprises having Significant Influence

United Phosphorous Limited Uniphos Enterprises Limited Jai Research Foundation

Key Managerial Personnel

Mr. V. R. Kaundinya - Managing Director

9. Details of Employee Benefits - Gratuity

(i) Defined Benefit Plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

10. Leases:

Operating Lease

Office Premises are obtained on Operating lease. The lease term is in the range of 3 years to 30 years and thereafter renewable. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases. Lease rental expense for the year for the agreements entered into is Rs. 418.94 lacs. (Previous Year: Rs. 409.01 lacs).

11. Research and Development Expenses :

a) Revenue Rs. 992.32 lacs (Previous Year: Rs. 1,048.27 lacs)

b) Capital Rs. 189.94 lacs (Previous Year: Rs. 83.27 lacs)

12. Supplementary Statutory Information:

a. Managerial Remuneration as above does not include Leave encashment and Gratuity benefit, since the same is computed actuarially for all the employees and the amount attributable to the Managerial person cannot be ascertained separately.

b. The remuneration to the Managing Director for the year ended 31st December 2008 and 31st December 2009 have exceeded the limit prescribed under the Companies Act, 1956. The Company had filed an application with the Central Government for approval of the remuneration to be paid to the Managing Director in excess of the limits prescribed by the Companies Act. The excess remuneration paid to the Managing Director for the year ended December 31, 2008 amounts to Rs. 62.61 lacs and for the year ended December 31, 2009 amounts to Rs. 74.76 lacs.

13. Previous years figures have been regrouped where necessary to conform to this years classification.

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