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Accounting Policies of Venky's (India) Ltd. Company

Mar 31, 2015

A. Basis of preparation of financial statements

* Basis of accounting:

The financial statements are prepared under historical cost convention on an accrual basis of accounting to comply in all material respects with mandatory accounting standards as notified by the Companies (Accounting Standards) Rules, 2006 (as amended) issued by the Central Government, in consultation with National Advisory Committee on Accounting Standards ("NACAS") read with rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 1956 to the extent applicable and Companies Act, 2013 to the extent notified and applicable to the Company.

* Classification of assets and liabilities:

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

b. Use of estimates:

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities on the date of the financial statements and reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates.

c. Valuations of inventories:

Inventories are valued as under:

* Poultry for livestock : At cost breeding

* Raw materials and : At cost or net realizable packing materials value, whichever is lower

* Work-in-progress : At cost or net realizable value, whichever is lower

* Finished goods : At cost or net realizable value, whichever is lower

* Stores and spares : At cost or net realizable value, whichever is lower

* By products : At estimated selling price

* Cost of raw materials (except oilseeds), packing material and stores & spares is determined on first in first out (FIFO) basis and it is net of taxes/duties for which input credit is available.

* Cost of oilseeds inventories is determined on quarterly moving weighted average basis.

* Cost of finished goods and work-in-progress include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

* Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make sale.

d. Tangible fixed assets:

* Fixed assets are stated at cost of acquisition less accumulated depreciation and impairment loss, if any. Cost includes all expenditure incurred necessary to bring the asset to its working condition for its intended use and is net of taxes/duties which are eligible for credit. In respect of self constructed assets, the expenditure incurred prior to commencement of commercial production and specifically attributable to the construction of the asset are capitalised upon the commencement of commercial production. The cost of fixed assets acquired in a business purchase is their fair value determined as at the date of purchase by an independent valuer.

* Fixed assets acquired in a business purchase are depreciated over the remaining useful life as determined by an independent valuer as at the date of purchase.

* Capital work-in-progress comprises the cost of fixed assets that are yet not ready for their intended use at the balance sheet date.

e. Depreciation:

* The Company has adopted estimated useful life of the fixed assets as stipulated by Schedule II to the Companies Act, 2013 for the purpose of computing depreciation that takes an effect from 1 April 2014.

* Assets costing Rupees 5,000/- or less are depreciated fully in the year of purchase.

* Leasehold improvements are amortised over a period of lease or useful life whichever is less.

* Depreciation is provided on a pro-rata basis for assets purchased/sold during the year.

* Estimated life of Individual assets costing Rs. 5,000/- or less is considered as 1 year and has been depreciated accordingly.

f. Revenue recognition:

* Sale of goods

Revenues from sales of goods are recognized when risks and rewards of ownership of goods are passed on to the customers, which are generally on dispatch of goods and are recorded net of taxes and duties.

* Income from services

Incomes from services are recognised pro-rata as and when services are rendered.

* Interest income

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

* Dividend income

Dividend income is recognised when the Company's right to receive is established by the reporting date.

g. Foreign currency transactions:

* Transactions denominated in foreign currency are recorded at the exchange rates prevailing on the date of transactions.

* Exchange differences arising on foreign exchange transactions settled during the year are recognised in the statement of profit and loss for the year.

* Monetary assets and liabilities in foreign currency, which are outstanding as at the year end, are translated at the year-end at the closing exchange rate and the resultant exchange differences are recognized in statement of profit and loss for the year.

* Exchange differences arising in respect of fixed assets acquired from outside India are charged to the statement of profit and loss for the year.

* Exchange differences arising in respect of foreign currency loan for acquisition of fixed assets

* Forward Contracts, other than those entered into to hedge foreign currency risks on highly probable forecasted transactions, existing financial assets and liabilities, are treated as foreign currency transactions and accounted accordingly as per AS 11. Exchange differences arising on such contracts are recognized in the period in which they arise.

* Gains and losses arising on account of roll over/ cancellation of forward contracts are recognized as income/expenses of the period in which such roll over/ cancellation takes place.

* All the other derivative contracts, including forward contracts entered into to hedge foreign currency risks on highly probable forecast transactions, existing financial assets and liabilities are recognized in the financial statements at fair value as on the Balance Sheet date, in pursuance of the announcement of the Institute of Chartered Accountants of India (ICAI) dated March 29, 2008 on accounting of derivatives. The Company has adopted Accounting Standard (AS) 30 ["Financial Instruments Recognition and Measurement"] for the accounting of such derivative contracts, not covered under Accounting Standards (AS) 11 ["The Effects of Changes in Foreign Exchange Rates"] as mandated by the ICAI in the aforesaid announcement since April 1, 2011.

* Accordingly, the resultant gains and losses on fair valuation/ settlement of the derivative contracts covered under Accounting Standard (AS) 30 ["Financial Instruments: Recognition and Measurement"] are recognized in the Statement of profit and loss for the year or Balance Sheet as the case may be after applying the test of hedge effectiveness. Where the hedge is effective, the gains or losses are recognized in the "Hedging Reserve" which forms part of "Reserves and Surplus" in the Balance Sheet, while the same is recognized in the statement of profit and loss where the hedge is ineffective. The amount recognized in the "Hedging Reserve" is transferred to the statement of profit and loss in the period in which the underlying hedged item affects the statement of profit and loss.

* The Company uses derivative financial instruments such as Forwards, Swaps and Options to hedge its risks associated with foreign exchange fluctuations. The Company uses Interest Rate Swaps specifically to protect against Interest Rate Volatility on the floating rate of External Commercial Borrowings (ECBs). It also uses Cross Currency Swaps to protect against foreign currency exchange rate as well as interest rate fluctuations on its foreign currency loans. Swaps and Forwards are also used to hedge the currency risk inherent in the settlement of the Liabilities denominated in foreign exchange.

* The fair values of all such derivative financial instruments are recognized as assets or liabilities at the balance sheet date. Such derivative financial instruments are used as risk management tools only and not for speculative purposes.

* For derivative financial instruments and foreign currency monetary items designated as cash flow hedges, the effective portion of the fair value of the derivative financial instruments are recognized in hedging reserve and reclassified to the statement of profit and loss as per guidance in AS 30.

* The ineffective portion of the change in fair value of such instruments is recognised in the statement of profit and loss in the period in which they arise. The various cash flows with reference to the hedged items and the hedging instruments are expected to occur over the next ten years and are expected to affect the statement of profit and loss over the same period of time. If the hedging relationship ceases to be effective or it becomes probable that the expected transaction will no longer occur, hedge accounting is discontinued and the fair value changes arising from the derivative financial instruments are recognized in statement of profit and loss.

* For derivative financial instruments designated as fair value hedges, the fair value of both the derivative financial instrument and the hedged item are recognized in the statement of profit and loss till the period the relationship is found to be effective. If the hedging relationship ceases to be effective or it becomes probable that the expected transaction will no longer occur, future gains or

* If no hedging relationship is designated, the fair value of the derivative financial instruments is marked to market through statement of profit and loss.

h. Government grants & subsidies:

* Non-refundable capital grants towards project undertaken by the Company are transferred to revenue account to the extent of depreciation on assets acquired out of the grants.

* Grant received against specific fixed assets are reduced from the cost of that asset.

* Subsidy in respect of air freight for export development is accounted for on accrual basis.

* Grants in the nature of Promoter's Contributions are treated as a part of Capital reserve.

i. Investments

* Investments are classified as current investments and long-term investments based on intention of the management at the time of purchase.

* Current investments are stated at the lower of cost and fair value.

* Long-term investments are stated at cost.

* Provision for diminution in value is made to recognize a decline, other than temporary, in the value of long-term investments.

j. Employee benefits:

a. Short term employee benefits

All employee benefits which fall due wholly within twelve months after the end of the period in which employee renders the related service are classified as short-term employee benefits. Undiscounted value of short term benefits such as salaries, wages, bonus and ex-gratia are recognized in the period in which the employee renders the related service.

b. Post-employment benefits

* Defined Contribution Plans:

The Company's Employee's Provident Fund scheme, Employee's State Insurance Scheme and Employee's Superannuation Scheme are defined contribution plans. The Company's contribution paid/payable under the schemes are recognized as an expense in the statement of profit and loss during the period in which the employee renders the related service.

* Defined Benefit Plans:

The Company's gratuity scheme is a defined benefit plan. The present value of the obligation under the plan is determined based on independent actuarial valuation using the Projected Unit Credit Method. The gratuity liability is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognized immediately in the statement of profit & loss.

c. Other long term employee benefits:

Entitlement to annual leave is recognized when they accrue to employees. Annual leave can either be availed or en-cashed subject to a restriction on the maximum number of accumulation of leaves. The present value of the liability is determined based on independent actuarial valuation using the Projected Unit credit method. The discount rates used for determining the present value of the liability is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognized immediately in the statement of profit & loss.

k. Borrowing costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of the qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to the -statement of profit and loss.

l. Segment reporting

* Identification of segments

* The Company's operating businesses are organised and managed separately according to the nature of products, with each segments representing a strategic unit that offers different products and serves different markets. The analysis of the geographical segments is based on the areas in which major operating divisions of the Company operate.

* Intersegment transfers

* The Company accounts for intersegment sales on the basis of price charged for inter segments transfers.

* Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

* Unallocated items

Unallocated items include general corporate income and expense items which are not allocated to any business segment.

* Segment accounting policies

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

m. Operating leases:

Lease arrangements where risks and rewards incidental to ownership of an asset substantially vests with lessor are classified as operating lease. Rental income on assets given and rental expenses on assets obtained under operating lease arrangements are recognised in the statement of profit and loss for the year as per the terms and conditions of the respective lease agreement.

n. Earnings per share:

Earnings per share (EPS) is calculated by dividing the net profit for the year attributable to the equity shareholders by weighted average number of equity shares outstanding during the year.

o. Taxes on income

* Tax expense for a year comprises of current tax and deferred tax.

* Tax on income for the current year is determined on the basis of the taxable income and tax credits computed in accordance with the provisions of Income Tax Act, 1961, and based on expected outcome of assessment / appeals.

* Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date. Deferred tax assets are recognized and carried forward to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

* Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is a convincing evidence that the Company will pay income tax higher than the tax computed under MAT, during the period under which MAT is permitted to be setoff under applicable laws.

* In the year in which MAT credit becomes eligible to be recognised as an asset in accordance with recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India (ICAI), the said asset is created by way of a credit to the statement of profit and loss and shown as a MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is longer convincing evidence to the effect that Company will pay income tax higher than MAT during the specified period.

p. Research and development:

Revenue expenditure on research and development is charged to Statement of profit and loss for the year.

q. Intangible assets:

* Intangible assets are recorded at the consideration paid for their acquisition.

* Intangible assets are amortised over their useful economic life, as estimated by the management, on a straight line basis commencing from the date the asset is available to the company for its use. Management estimates of useful life of Intangible assets are as follows:

Goodwill/Trade mark/Technical know-how/License cost - 5 years

Software - 3 years

r. Impairment of fixed assets:

The Company assesses at each balance sheet date whether there is any indication that an asset or a group of assets (cash generating unit) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or a group of assets. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the statement of the profit and loss.

s. Provisions:

* Provisions are recognised when the Company recognizes that it has a present obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated.

* Disclosures for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

* Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.


Mar 31, 2014

A. Basis of preparation of financial statements

- Basis of accounting :

The financial statements are prepared under historical cost convention on an accrual basis of accounting except for certain financial instruments which are measured at fair values and comply in all material respects with mandatory accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 (read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013) and relevant provisions of the Companies Act, 1956 (to the extent applicable) and the relavent provisions of the Companies Act, 2013 (to the extent notified and effective).

- Classification of assets and liabilities :

All assets and liabilities have been classified and disclosed as current or non-current as per the Company''s normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle for the purpose of current - non-current classification of assets and liabilities.

b. Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities on the date of the financial statements and reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates.

c. Valuations of inventories

Inventories are valued as under:

- Poultry for livestock breeding At cost

- Raw materials and packing materials At cost or net realizable value, whichever is lower

- Work-in-progress At cost or net realizable value, whichever is lower

- Finished goods At cost or net realizable value, whichever is lower

- Stores and spares At cost

- By products At estimated selling price

- Cost of raw materials (except oilseeds), packing material and stores & spares is determined on first in first out (FIFO) basis.

- Cost of oilseeds inventories is determined on quarterly moving weighted average basis.

- Cost of finished goods and work-in-progress include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

- Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make sale.

d. Tangible fixed assets

- Fixed assets are stated at cost of acquisition less accumulated depreciation and impairment loss, if any. Cost includes all expenditure incurred necessary to bring the asset to its working condition for its intended use. In respect of self constructed assets, the expenditure incurred prior to commencement of commercial production and specifically attributable to the construction of the asset are capitalised upon the commencement of commercial production. The cost of fixed assets acquired in a business purchase is their fair value determined as at the date of purchase by an independent valuer.

- Capital work-in-progress comprises the cost of fixed assets that are yet not ready for their intended use at the balance sheet date.

e. Depreciation

- Depreciation is provided on straight line method except in respect of assets of Narmada Hatcheries Division of the Company which are depreciated by the written down value method.

- Depreciation is charged at the rates specified in Schedule XIV to the Companies Act, 1956.

- Depreciation is provided on a pro-rata basis for assets purchased/sold during the year.

f. Revenue recognition

- Sale of goods

Revenues from sales of goods are recognized when risks and rewards of ownership of goods are passed on to the customers, which are generally on dispatch of goods and are recorded net of taxes and duties.

- Income from services

Incomes from services are recognised pro-rata as and when services are rendered.

- Interest income

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

- Dividend income

Dividend income is recognised when the Company''s right to receive is established by the reporting date.

g. Foreign currency transactions

- Transactions denominated in foreign currency are recorded at the exchange rates prevailing on the date of transactions.

- Exchange differences arising on foreign exchange transactions settled during the year are recognised in the statement of profit and loss for the year.

- Monetary assets and liabilities in foreign currency, which are outstanding as at the year end, are translated at the year-end at the closing exchange rate and the resultant exchange differences are recognized in statement of profit and loss for the year.

- Exchange differences arising in respect of fixed assets acquired from outside India are charged to the statement of profit and loss for the year.

- Forward Contracts, other than those entered into to hedge foreign currency risks on highly probable forecasted transactions, existing financial assets and liabilities, are treated as foreign currency transactions and accounted accordingly as per AS 11. Exchange differences arising on such contracts are recognized in the period in which they arise.

- Gains and losses arising on account of roll over/ cancellation of forward contracts are recognized as income/expenses of the period in which such roll over/ cancellation takes place.

- All the other derivative contracts, including forward contracts entered into to hedge foreign currency risks on highly probable forecast transactions, existing financial assets and liabilities are recognized in the financial statements at fair value as on the Balance Sheet date, in pursuance of the announcement of the Institute of Chartered Accountants of India (ICAI) dated March 29, 2008 on accounting of derivatives. The Company has adopted Accounting Standard (AS) 30 ["Financial Instruments : Recognition and Measurement"] for the accounting of such derivative contracts, not covered under Accounting Standards (AS) 11 ["The Effects of Changes in Foreign Exchange Rates"] as mandated by the ICAI in the aforesaid announcement since April 1, 2011.

- Accordingly, the resultant gains and losses on fair valuation/ settlement of the derivative contracts covered under Accounting Standard (AS) 30 ["Financial Instruments : Recognition and Measurement"] are recognized in the Statement of profit and loss for the year or Balance Sheet as the case may be after applying the test of hedge effectiveness. Where the hedge is effective, the gains or losses are recognized in the "Hedging Reserve" which forms part of "Reserves and Surplus" in the Balance Sheet, while the same is recognized in the statement of profit and loss where the hedge is ineffective. The amount recognized in the "Hedging Reserve" is transferred to the statement of profit and loss in the period in which the underlying hedged item affects the statement of profit and loss.

- The Company uses derivative financial instruments such as Forwards, Swaps and Options to hedge its risks associated with foreign exchange fluctuations. The Company uses Interest Rate Swaps specifically to protect against Interest Rate Volatility on the floating rate of External Commercial Borrowings (ECBs). It also uses Cross Currency Swaps to protect against foreign currency exchange rate as well as interest rate fluctuations on its foreign currency loans. Swaps and Forwards are also used to hedge the currency risk inherent in the settlement of the liabilities denominated in foreign exchange.

- The fair values of all such derivative financial instruments are recognized as assets or liabilities at the balance sheet date. Such derivative financial instruments are used as risk management tools only and not for speculative purposes.

- For derivative financial instruments and foreign currency monetary items designated as cash flow hedge, the effective portion of the fair value of the derivative financial instruments are recognized in hedging reserve and reclassified to the Statement of Profit and Loss as per guidance in AS 30.

- The ineffective portion of the change in fair value of such instruments is recognised in the statement of profit and loss in the period in which they arise. The various cash flows with reference to the hedged items and the hedging instruments are expected to occur over the next ten years and are expected to affect the statement of profit and loss over the same period of time. If the hedging relationship ceases to be effective or it becomes probable that the expected transaction will no longer occur, hedge accounting is discontinued and the fair value changes arising from the derivative financial instruments are recognized in Statement of Profit and Loss.

- For derivative financial instruments designated as fair value hedge, the fair value of both the derivative financial instrument and the hedged item are recognized in the statement of profit and loss till the period the relationship is found to be effective. If the hedging relationship ceases to be effective or it becomes probable that the expected transaction will no longer occur, future gains or losses on the derivative financial instruments are recognized in the Statement of Profit and Loss.

- If no hedging relationship is designated, the fair value of the derivative financial instruments is marked to market through the Statement of Profit and Loss.

h. Government grants & subsidies

- Non-refundable capital grants towards project undertaken by the Company are transferred to revenue account to the extent of depreciation on assets acquired out of the grants.

- Grant received against specific fixed assets are reduced from the cost of that asset.

- Subsidy in respect of air freight for export development is accounted for on accrual basis.

- Grants in the nature of Promoter''s Contributions are treated as a part of Capital reserve. i. Investments

- Investments are classified as current investments and long-term investments based on intention of the management at the time of purchase.

- Current investments are stated at the lower of cost and fair value.

- Long-term investments are stated at cost.

- Provision for diminution in value is made to recognize a decline, other than temporary, in the value of long-term investments.

j. Employee Benefits

a. Short term employee benefits

All employee benefits which fall due wholly within twelve months after the end of the period in which employee renders the related service are classified as short-term employee benefits. Undiscounted value of short term benefits such as salaries, wages, bonus and ex-gratia are recognized in the period in which the employee renders the related service.

b. Post-employment benefits

- Defined Contribution Plans

The Company''s Employee''s Provident Fund scheme, Employee''s State Insurance Scheme and Employee''s Superannuation Scheme are defined contribution plans. The Company''s contribution paid/payable under the schemes are recognized as an expense in the statement of profit and loss during the period in which the employee renders the related service.

- Defined Benefit Plans

The Company''s gratuity scheme is a defined benefit plan. The present value of the obligation under the plan is determined based on independent actuarial valuation using the Projected Unit Credit Method. The gratuity liability is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognized immediately in the statement of profit & loss.

c. Other long term employee benefits

Entitlement to annual leave is recognized when they accrue to employees. Annual leave can either be availed or en-cashed subject to a restriction on the maximum number of accumulation of leaves. The present value of the liability is determined based on independent actuarial valuation using the Projected Unit credit method. The discount rates used for determining the present value of the liability is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognized immediately in the statement of profit & loss.

k. Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of the qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to the statement of profit and loss.

I. Segment reporting

Identification of segments

The Company''s operating businesses are organised and managed separately according to the nature of products, with each segments representing a strategic unit that offers different products and serves different markets. The analysis of the geographical segments is based on the areas in which major operating divisions of the Company operate.

Intersegment transfers

The Company accounts for intersegment sales on the basis of price charged for inter segments transfers.

Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

Unallocated items

Unallocated items include general corporate income and expense items which are not allocated to any business segment.

Segment accounting policies

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

m. Operating Leases

Lease arrangements where risks and rewards incidental to ownership of an asset substantially vests with lessor are classified as operating lease. Rental income on assets given and rental expenses on assets obtained under operating lease arrangements are recognised in the statement of profit and loss for the year as per the terms and conditions of the respective lease agreement.

n. Earnings Per Share

Earnings per share (EPS) is calculated by dividing the net profit for the year attributable to the equity shareholders by weighted average number of equity shares outstanding during the year.

o. Taxes on Income

- Tax expense for a year comprises of current tax and deferred tax.

- Tax on income for the current year is determined on the basis of the taxable income and tax credits computed in accordance with the provisions of Income Tax Act, 1961, and based on expected outcome of assessment / appeals.

- Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date. Deferred tax assets are recognized and carried forward to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

- Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is a convincing evidence that the Company will pay income tax higher than the Tax computed under MAT, during the period under which MAT is permitted to be setoff under applicable laws.

- In the year in which MAT credit becomes eligible to be recognised as an asset in accordance with recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India (ICAI), the said asset is created by way of a credit to the statement of profit and loss and shown as a MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is longer convincing evidence to the effect that Company will pay income tax higher than MAT during the specified period.

p. Research and Development

Revenue expenditure on research and development is charged to Statement of profit and loss for the year.

q. Intangible Assets

- Intangible assets are recorded at the consideration paid for their acquisition.

- Intangible assets are amortised over their useful economic life, as estimated by the management, on a straight line basis commencing from the date the asset is available to the company for its use. Management estimates of useful life of Intangible assets are as follows:

Goodwill - 5 years

Trademark - 5 years

Technical Know How - 5 years

Software - 3 years

r. Impairment of Fixed Assets

The Company assesses at each balance sheet date whether there is any indication that an asset or a group of assets (cash generating unit) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or a group of assets. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the statement of the profit and loss.

s. Provisions

- Provisions are recognised when the Company recognizes that it has a present obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated.

- Disclosures for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

- Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.

- Contingent assets are not recognised in the financial statements.

Details of securities, terms of repayments and rate of interest :

(i) Rupee loan-l (Secured) :

Rupee term loan from ICICI Bank Limited amounting to Rupees 939.11 Lacs outstanding as at 31st March, 2014 (previous year Rupees 1,408.67 lacs) carries an interest rate of sum of base rate as increased by appropriate term premia and spread per annum, subject to minimum rate of ICICI bank base rate 2.25%. The payment of interest shall be subject to statutory levies, if any. The loan is repayable in 9 half yearly equal installments commencing from 25th March, 2012. The loan is secured by an exclusive mortgage of land and buildings located at (a) Village Dikadla, Tehsil Samalkha, Dist. Panipat, State Haryana, (b) Plot no. 55, Sansarpur terrace, Dist. Kangra, State Himachal Pradesh and (c) Village Laider, Tehsil Bara, District Allahabad, State Uttar Pradesh and by way of hypothecation of movable fixed assets acquired/to be acquired out of said loan at these locations.

(ii) Rupee loan- II (Secured) :

Rupee term loan from IDBI Bank Limited amounting to Rupees 5,000 Lacs outstanding as at 31st March, 2014 (previous year Rupees 5,000 Lacs) carries an interest rate of sum of bank borrowing rate (BBR) as increased by 150 basis points per annum. The loan is repayable in 54 equal monthly installments commencing from 1th April, 2014. The loan is secured by way of second charge on movable fixed assets of the Company in form of plant & machinery, electrical installations, vehicles, furniture and fixtures, office equipments, etc and also by way of second charge on the entire current assets of the Company.

(iii) Rupee loan - III (Secured) :

Rupee term loan from Axis Bank Limited amounting to Rupees 5,000 Lacs outstanding as at 31st March, 2014 (previous year Rupees NIL) carries an interest rate of sum of base rate as increased by 50 basis points per annum. The loan is repayable in 12 equal quarterly installments commencing from June, 2014. The loan is secured by an exclusive charge by way of hypothecation of plant and machinery and mortgage of land and buildings of the Feed Mill situated at Village Morwadi (Kikwi), Taluka Bhor Pune - 412206 and of the Animal Health Plant & Feed Mill unit located at Village - Osade, 19/2 Milestone, Pune - Panshet Road, Taluka - Velhe District Pune - 411041.

(iv) External commercial borrowings - I (Secured) :

The Company has availed external commercial borrowing (ECB -1) from ICICI Bank Limited amounting to Rupees 9,557.47 Lacs outstanding as at 31st March, 2014 (previous year Rupees 8,956.20 Lacs) into two tranches for financing its expansion plans. ECB - I is repayable in 11 half yearly predetermined installments commencing from 3rt April, 2013 and is denominated in US$. It carries an interest rate of 6 month USD LIBOR plus 4.5 percent per annum. Taking into considerations, the currency risks in the cash flows arising out of fluctuations of USD LIBOR rates and also the currency fluctuations, the Company has entered into hedge agreements with its bankers. Further the repayment of said liability in respect of the ECB-I is also fixed at predetermined exchange rate pursuant to the hedge agreements. ECB-I is secured by an exclusive mortgage of land, buildings and immovable plant and machinery at processing plant situated at Baur Kamshet, Pune, Feed Mill and Oilseed plant at Solapur, poultry farm at Village Bhigwan and SPF plant at Pasure Bhor. Further ECB - I is secured by an exclusive hypothecation of movable assets of the company acquired/to be acquired from the loan facilities extended by the bank.

(v) External commercial borrowings - II (Secured) :

The Company has availed external commercial borrowing (ECB - II) from ICICI Bank Limited amounting to Rupees 6,468.69 Lacs outstanding as at 31st March, 2014 (previous year Rupees Nil) for financing it''s expansion plans. ECB - II is repayable in 11 half yearly predetermined installments commencing from 5th August, 2015 and is denominated in US$. It carries an interest rate of 6 month USD LIBOR plus 4.25 percent per annum. Taking into considerations, the currency risks in the cash flows.


Mar 31, 2013

A. Basis of preparation of financial statements

- Basis of accounting

The financial statements are prepared under historical cost convention on an accrual basis of accounting to comply in all material respects with mandatory accounting standards as notified by the Companies (Accounting Standards) Rules, 2006.

- Classification under Companies Act, 1956

The Company is a Non-Small and medium sized Company (Non-SMC) as defined in the General Instructions in respect of accounting standards as notified by the Companies (Accounting Standards) Rules, 2006.

- Change in accounting policy

Presentation and disclosure of financial statements

The revised Schedule VI as per notification dated 28th February 2011 (as amended by notification dated 30th March 2011) issued by the Central Government, has become applicable to the Company for the preparation and presentation of its financial statements. The revised schedule VI does not contain and affect the recognition and measurement principles applied while preparing the financial statements except to the extent it relates to accounting for dividend from investments in subsidiary companies. However it has a significant impact on classification, presentation and disclosures made in the financial statements. The previous year''s figures have been reclassified in accordance with the requirements of the revised schedule VI.

- Classification of assets and liabilities

All assets and liabilities have been classified and disclosed as current or non-current as per the Company''s normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle for the purpose of current - non-current classification of assets and liabilities.

b. Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities on the date of the financial statements and reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates.

c. Valuations of Inventories

Inventories are valued as under:

- Poultry for livestock breeding : At cost

- Raw materials and packing materials : At cost or net realizable value, whichever is lower

- Work-in-progress : At cost or net realizable value, whichever is lower

- Finished goods : At cost or net realizable value, whichever is lower

- Stores and spares : At cost

- By products : At estimated selling price

V Cost of raw materials (except oilseeds), packing material and stores & spares is determined on first in first out (FIFO) basis.

Cost of oilseeds inventories is determined on quarterly moving weighted average basis.

a. Cost of finished goods and work-in-progress include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

- Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make sale.

d. Tangible Fixed Assets

Fixed assets are stated at cost of acquisition less accumulated depreciation and impairment loss, if any. Cost includes all expenditure incurred necessary to bring the asset to its working condition for its intended use. In respect of self constructed assets, the expenditure incurred prior to commencement of commercial production and specifically attributable to the construction of the asset are capitalised upon the commencement of commercial production.

- Capital work-in-progress comprises the cost of fixed assets that are yet not ready for their intended use at the balance sheet date.

e. Depreciation

- Depreciation is provided on straight line method except in respect of assets of Narmada Hatcheries Division of the Company which are depreciated by the written down value method.

- Depreciation is charged at the rates specified in Schedule XIV to the Companies Act, 1956.

- Depreciation is provided on a pro-rata basis for assets purchased/sold during the year.

f. Revenue Recognition

- Sale of goods

Revenues from sales of goods are recognized when risks and rewards of ownership of goods are passed on to the customers, which are generally on dispatch of goods and are recorded net of taxes and duties.

- Income from services

Incomes from sen/ices are recognised pro-rata as and when services are rendered.

- Interest income

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

- Dividend income

Dividend income is recognised when the Company''s right to receive is established by the reporting date.

g. Foreign Currency Transactions

- Transactions denominated in foreign currency are recorded at the exchange rates prevailing on the date of transactions.

- Exchange differences arising on foreign exchange transactions settled during the year are recognised in the statement of profit and loss for the year.

- Monetary assets and liabilities in foreign currency, which are outstanding as at the year end, are translated at the year-end at the closing exchange rate and the resultant exchange differences are recognized in statement of profit and loss for the year.

- Exchange differences arising in respect of fixed assets acquired from outside India are charged to the statement of profit and loss for the year.

- Forward Contracts, other than those entered into to hedge foreign currency risks on highly probable forecasted transactions, existing financial assets and liabilities, are treated as foreign currency transactions and accounted accordingly as per AS 11. Exchange differences arising on such contracts are recognized in the period in which they arise.

- Gains and losses arising on account of roll over/ cancellation of forward contracts are recognized as income/expenses of the period in which such roll over/ cancellation takes place.

- All the other derivative contracts, including forward contracts entered into to hedge foreign currency risks on highly probable forecast transactions, existing financial assets and liabilities are recognized in the financial statements at fair value as on the Balance Sheet date, in pursuance of the announcement of the Institute of Chartered Accountants of India (ICAI) dated March 29, 2008 on accounting of derivatives. The Company has adopted Accounting Standard (AS) 30 ["Financial Instruments Recognition and Measurement"] for the accounting of such derivative contracts, not covered under Accounting Standards (AS) 11 ["The Effects of Changes in Foreign Exchange Rates"] as mandated by the ICAI in the aforesaid announcement since April 1, 2011.

- Accordingly, the resultant gains and losses on fair valuation/ settlement of the derivative contracts covered under Accounting Standard (AS) 30 ["Financial Instruments: Recognition and Measurement"] are recognized in the Statement of profit and loss for the year or Balance Sheet as the case may be after applying the test of hedge effectiveness. Where the hedge is effective, the gains or losses are recognized in the "Hedging Reserve" which forms part of "Reserves and Surplus" in the Balance Sheet, while the same is recognized in the statement of profit and loss where the hedge is ineffective. The amount recognized in the "Hedging Reserve" is transferred to the statement of profit and loss in the period in which the underlying hedged item affects the statement of profit and loss.

- The Company uses derivative financial instruments such as Forwards, Swaps and Options to hedge its risks associated with foreign exchange fluctuations. The Company uses Interest Rate Swaps specifically to protect against Interest Rate Volatility on the floating rate External Commercial Borrowings (ECBs). It also uses Cross Currency Swaps to protect against foreign currency exchange rate as well as interest rate fluctuations on its foreign currency loans. Swaps and Forwards are also used to hedge the currency risk inherent in the settlement of the Liabilities denominated in foreign exchange.

- The fair values of all such derivative financial instruments are recognized as assets or liabilities at the balance sheet date. Such derivative financial instruments are used as risk management tools only and not for speculative purposes.

- For derivative financial instruments and foreign currency monetary items designated as Cash Flow hedges, the effective portion of the fair value of the derivative financial instruments are recognized in Hedging Reserve and reclassified to Profit and Loss as per guidance in AS 30.

- The ineffective portion of the change in fair value of such instruments is recognised in the statement of profit and loss in the period in which they arise. The various cash flows with reference to the hedged items and the hedging instruments are expected to occur over the next ten years and are expected to affect the statement of profit and loss over the same period of time. If the hedging relationship ceases to be effective or it becomes probable that the expected transaction will no longer occur, hedge accounting is discontinued and the fair value changes arising from the derivative financial instruments are recognized in statement of profit and loss.

- For derivative financial instruments designated as Fair Value hedges, the fair value of both the derivative financial instrument and the hedged item are recognized in the statement of profit and loss till the period the relationship is found to be effective. If the hedging relationship ceases to be effective or it becomes probable that the expected transaction will no longer occur, future gains or losses on the derivative financial instruments are recognized in statement of profit and loss.

- If no hedging relationship is designated, the fair value of the derivative financial instruments is marked to market through statement of profit and loss.

h. Government Grants & Subsidies

- Non-refundable capital grants towards project undertaken by the Company are transferred to revenue account to the extent of depreciation on assets acquired out of the grants.

- Grant received against specific fixed assets are reduced from the cost of that asset.

- Subsidy in respect of air freight for export development is accounted for on accrual basis.

- Grants in the nature of Promoter''s Contributions are treated as a part of Capital reserve.

i. Investments

- Investments are classified as current investments and long-term investments based on intention of the management at the time of purchase.

- Current investments are stated at the lower of cost and fair value.

- Long-term investments are stated at cost.

- Provision for diminution in value is made to recognize a decline, other than temporary, in the value of long-term investments.

j. Employee Benefits

a. Short term employee benefits

All employee benefits which fall due wholly within twelve months after the end of the period in which employee renders the related service are classified as short-term employee benefits. Undiscounted value of short term benefits such as salaries, wages, bonus and ex-gratia are recognized in the period in which the employee renders the related service.

b. Post-employment benefits

- Defined Contribution Plans

The Company''s Employee''s Provident Fund scheme, Employee''s State Insurance Scheme and Employee''s Superannuation Scheme are defined contribution plans. The Company''s contribution paid/payable under the schemes are recognized as an expense in the statement of profit and loss during the period in which the employee renders the related service.

- Defined Benefit Plans

The Company''s gratuity scheme is a defined benefit plan. The present value of the obligation under the plan is determined based on independent actuarial valuation using the Projected Unit Credit Method. The gratuity liability is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognized immediately in the statement of profit & loss.

c. Other long term employee benefits

Entitlement to annual leave is recognized when they accrue to employees. Annual leave can either be availed or en-cashed subject to a restriction on the maximum number of accumulation of leaves. The present value of the liability is determined based on independent actuarial valuation using the Projected Unit credit method. The discount rates used for determining the present value of the liability is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognized immediately in the statement of profit & loss.

k. Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of the qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to the statement of profit and loss.

I. Segment reporting

Identification of segments

The Company''s operating businesses are organised and managed separately according to the nature of products, with each segments representing a strategic unit that offers different products and serves different markets. The analysis of the geographical segments is based on the areas in which major operating divisions of the Company operate.

Intersegment transfers

The Company accounts for intersegment sales on the basis of price charged for inter segments transfers.

Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

Unallocated items

Unallocated items include general corporate income and expense items which are not allocated to any business segment.

Segment accounting policies

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

m. Operating Leases

Lease arrangements where risks and rewards incidental to ownership of an asset substantially vests with lessor are classified as operating lease. Rental income on assets given and rental expenses on assets obtained under operating lease arrangements are recognised in the statement of profit and loss for the year as per the terms and conditions of the respective lease agreement.

n. Earnings Per Share

Earnings per share (EPS) is calculated by dividing the net profit for the year attributable to the equity shareholders by weighted average number of equity shares outstanding during the year.

o. Taxes on Income

- Tax expense for a year comprises of current tax and deferred tax.

- Tax on income for the current year is determined on the basis of the taxable income and tax credits computed in accordance with the provisions of Income Tax Act, 1961, and based on expected outcome of assessment / appeals.

- Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date. Deferred tax assets are recognized and carried forward to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

- Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is a convincing evidence that the Company will pay income tax higher than the computed under MAT, during the period under which MAT is permitted to be setoff under applicable laws.

- In the year in which MAT credit becomes eligible to be recognised as an asset in accordance with recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India (ICAI), the said asset is created by way of a credit to the statement of profit and loss and shown as a MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is longer convincing evidence to the effect that Company will pay income tax higher than MAT during the specified period.

p. Research and Development

Revenue expenditure on research and development is charged to Statement of profit and loss for the year.

q. Intangible Assets

- Intangible assets are recorded at the consideration paid for their acquisition.

- Intangible assets are amortised over their useful economic life, as estimated by the management, on a straight line basis commencing from the date the asset is available to the company for its use. Management estimates of useful life of Intangible assets are as follows:

Trademark - 5 years

Technical Know How - 5 years

Software - 3 years

r. Impairment of Fixed Assets

The Company assesses at each balance sheet date whether there is any indication that an asset or a group of assets (cash generating unit) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or a group of assets. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the statement of the profit and loss.

s. Provisions

- Provisions are recognised when the Company recognizes that it has a present obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated.

- Disclosures for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

- Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.

- Contingent assets are not recognised in the financial statements.


Mar 31, 2012

A. Basis of preparation of financial statements

- Basis of accounting

The financial statements are prepared under historical cost convention on an accrual basis of accounting to comply in all material respects with mandatory accounting standards as notified by the Companies (Accounting Standards) Rules, 2006.

- Classification under Companies Act, 1956

The Company is a Non-Small and medium sized Company (Non-SMC) as defined in the General Instructions in respect of accounting standards as notified by the Companies (Accounting Standards) Rules, 2006.

- Change in accounting policy

Presentation and disclosure of financial statements

The revised Schedule VI as per notification dated 28th February 2011 (as amended by notification dated 30th March 2011) issued by the Central Government, has become applicable to the Company for the preparation and presentation of its financial statements. The revised schedule VI does not contain and affect the recognition and measurement principles applied while preparing the financial statements except to the extent it relates to accounting for dividend from investments in subsidiary companies. However it has a significant impact on classification, presentation and disclosures made in the financial statements. The previous year's figures have been reclassified in accordance with the requirements of the revised schedule VI.

- Classification of assets and liabilities

All assets and liabilities have been classified and disclosed as current or non-current as per the Company's normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle for the purpose of current - non-current classification of assets and liabilities.

b. Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities on the date of the financial statements and reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates.

c. Valuations of Inventories

Inventories are valued as under:

- Poultry for livestock breeding : At cost

- Raw materials and packing materials : At cost or net realizable value, whichever is lower

- Work-in-progress : At cost or net realizable value, whichever is lower

- Finished goods : At cost or net realizable value, whichever is lower

- Stores and spares : At cost

- By products : At estimated selling price

- Cost of raw materials (except oilseeds), packing material and stores & spares is determined on first in first out (FIFO) basis.

- Cost of oilseeds inventories is determined on quarterly moving weighted average basis.

- Cost of finished goods and work-in-progress include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

- Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make sale.

d. Tangible Fixed Assets

- Fixed assets are stated at cost of acquisition less accumulated depreciation and impairment loss, if any. Cost includes all expenditure incurred necessary to bring the asset to its working condition for its intended use. In respect of self constructed assets, the expenditure incurred prior to commencement of commercial production and specifically attributable to the construction of the asset are capitalised upon the commencement of commercial production.

- Capital work-in-progress comprises the cost of fixed assets that are yet not ready for their intended use at the balance sheet date.

e. Depreciation

- Depreciation is provided on straight line method except in respect of assets of Narmada Hatcheries Division of the Company which are depreciated by the written down value method.

- Depreciation is charged at the rates specified in Schedule XIV to the Companies Act, 1956.

- Depreciation is provided on a pro-rata basis for assets purchased/sold during the year.

f. Revenue Recognition

- Sale of goods

Revenues from sales of goods are recognized when risks and rewards of ownership of goods are passed on to the customers, which are generally on dispatch of goods and are recorded net of taxes and duties.

- Income from services

Incomes from services are recognised pro-rata as and when services are rendered.

- Interest income

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

- Dividend income

Dividend income is recognised when the Company's right to receive is established by the reporting date.

g. Foreign Currency Transactions

- Transactions denominated in foreign currency are recorded at the exchange rates prevailing on the date of transactions.

- Exchange differences arising on foreign exchange transactions settled during the year are recognised in the statement of profit and loss for the year.

- Monetary assets and liabilities in foreign currency, which are outstanding as at the year end, are translated at the year-end at the closing exchange rate and the resultant exchange differences are recognized in statement of profit and loss for the year.

- Exchange differences arising in respect of fixed assets acquired from outside India are charged to the statement of profit and loss for the year.

- Forward Contracts, other than those entered into to hedge foreign currency risks on highly probable forecasted transactions, existing financial assets and liabilities, are treated as foreign currency transactions and accounted accordingly as per AS 11. Exchange differences arising on such contracts are recognized in the period in which they arise.

- Gains and losses arising on account of roll over/ cancellation of forward contracts are recognized as income/expenses of the period in which such roll over/ cancellation takes place.

- All the other derivative contracts, including forward contracts entered into to hedge foreign currency risks on highly probable forecast transactions, existing financial assets and liabilities are recognized in the financial statements at fair value as on the Balance Sheet date, in pursuance of the announcement of the Institute of Chartered Accountants of India (ICAI) dated March 29, 2008 on accounting of derivatives. The Company has adopted Accounting Standard (AS) 30 ["Financial Instruments Recognition and Measurement"] for the accounting of such derivative contracts, not covered under Accounting Standards (AS) 11 ["The Effects of Changes in Foreign Exchange Rates"] as mandated by the ICAI in the aforesaid announcement since April 1, 2011.

- Accordingly, the resultant gains and losses on fair valuation/ settlement of the derivative contracts covered under Accounting Standard (AS) 30 ["Financial Instruments: Recognition and Measurement"] are recognized in the Statement of profit and loss for the year or Balance Sheet as the case may be after applying the test of hedge effectiveness. Where the hedge is effective, the gains or losses are recognized in the "Hedging Reserve" which forms part of "Reserves and Surplus" in the Balance Sheet, while the same is recognized in the statement of profit and loss where the hedge is ineffective. The amount recognized in the "Hedging Reserve" is transferred to the statement of profit and loss in the period in which the underlying hedged item affects the statement of profit and loss.

- The Company uses derivative financial instruments such as Forwards, Swaps and Options to hedge its risks associated with foreign exchange fluctuations. The Company uses Interest Rate Swaps specifically to protect against Interest Rate Volatility on the floating rate External Commercial Borrowings (ECBs). It also uses Cross Currency Swaps to protect against foreign currency exchange rate as well as interest rate fluctuations on its foreign currency loans. Swaps and Forwards are also used to hedge the currency risk inherent in the settlement of the Liabilities denominated in foreign exchange.

- The fair values of all such derivative financial instruments are recognized as assets or liabilities at the balance sheet date. Such derivative financial instruments are used as risk management tools only and not for speculative purposes.

- For derivative financial instruments and foreign currency monetary items designated as Cash Flow hedges, the effective portion of the fair value of the derivative financial instruments are recognized in Hedging Reserve and reclassified to Profit and Loss as per guidance in AS 30.

- The ineffective portion of the change in fair value of such instruments is recognised in the statement of profit and loss in the period in which they arise. The various cash flows with reference to the hedged items and the hedging instruments are expected to occur over the next ten years and are expected to affect the statement of profit and loss over the same period of time. If the hedging relationship ceases to be effective or it becomes probable that the expected transaction will no longer occur, hedge accounting is discontinued and the fair value changes arising from the derivative financial instruments are recognized in statement of profit and loss.

- For derivative financial instruments designated as Fair Value hedges, the fair value of both the derivative financial instrument and the hedged item are recognized in the statement of profit and loss till the period the relationship is found to be effective. If the hedging relationship ceases to be effective or it becomes probable that the expected transaction will no longer occur, future gains or losses on the derivative financial instruments are recognized in statement of profit and loss.

- If no hedging relationship is designated, the fair value of the derivative financial instruments is marked to market through statement of profit and loss.

h. Government Grants & Subsidies

- Non-refundable capital grants towards project undertaken by the Company are transferred to revenue account to the extent of depreciation on assets acquired out of the grants.

- Grant received against specific fixed assets are reduced from the cost of that asset.

- Subsidy in respect of air freight for export development is accounted for on accrual basis.

- Grants in the nature of Promoter's Contributions are treated as a part of Capital reserve.

i. Investments

- Investments are classified as current investments and long-term investments based on intention of the management at the time of purchase.

- Current investments are stated at the lower of cost and fair value.

- Long-term investments are stated at cost.

- Provision for diminution in value is made to recognize a decline, other than temporary, in the value of long-term investments.

j. Employee Benefits

a . Short term employee benefits

All employee benefits which fall due wholly within twelve months after the end of the period in which employee renders the related service are classified as short-term employee benefits. Undiscounted value of short term benefits such as salaries, wages, bonus and ex-gratia are recognized in the period in which the employee renders the related service.

b. Post-employment benefits

- Defined Contribution Plans

The Company's Employee's Provident Fund scheme, Employee's State Insurance Scheme and Employee's Superannuation Scheme are defined contribution plans. The Company's contribution paid/payable under the schemes are recognized as an expense in the statement of profit and loss during the period in which the employee renders the related service.

- Defined Benefit Plans

The Company's gratuity scheme is a defined benefit plan. The present value of the obligation under the plan is determined based on independent actuarial valuation using the Projected Unit Credit Method. The gratuity liability is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognized immediately in the statement of profit & loss.

c. Other long term employee benefits

Entitlement to annual leave is recognized when they accrue to employees. Annual leave can either be availed or en-cashed subject to a restriction on the maximum number of accumulation of leaves. The present value of the liability is determined based on independent actuarial valuation using the Projected Unit credit method. The discount rates used for determining the present value of the liability is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognized immediately in the statement of profit & loss.

k. Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of the qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to the statement of profit and loss.

l. Segment reporting

Identification of segments

The Company's operating businesses are organised and managed separately according to the nature of products, with each segments representing a strategic unit that offers different products and serves different markets. The analysis of the geographical segments is based on the areas in which major operating divisions of the Company operate.

Intersegment transfers

The Company accounts for intersegment sales on the basis of price charged for inter segments transfers.

Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

Unallocated items

Unallocated items include general corporate income and expense items which are not allocated to any business segment.

Segment accounting policies

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

m. Operating Leases

Lease arrangements where risks and rewards incidental to ownership of an asset substantially vests with lessor are classified as operating lease. Rental income on assets given and rental expenses on assets obtained under operating lease arrangements are recognised in the statement of profit and loss for the year as per the terms and conditions of the respective lease agreement.

n. Earnings Per Share

Earnings per share (EPS) is calculated by dividing the net profit for the year attributable to the equity shareholders by weighted average number of equity shares outstanding during the year.

o. Taxes on Income

- Tax expense for a year comprises of current tax and deferred tax.

- Tax on income for the current year is determined on the basis of the taxable income and tax credits computed in accordance with the provisions of Income Tax Act, 1961, and based on expected outcome of assessment / appeals.

- Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date. Deferred tax assets are recognized and carried forward to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

- Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is a convincing evidence that the Company will pay income tax higher than the computed under MAT, during the period under which MAT is permitted to be setoff under applicable laws.

- In the year in which MAT credit becomes eligible to be recognised as an asset in accordance with recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India (ICAI), the said asset is created by way of a credit to the statement of profit and loss and shown as a MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is longer convincing evidence to the effect that Company will pay income tax higher than MAT during the specified period.

p. Research and Development

Revenue expenditure on research and development is charged to Statement of profit and loss for the year.

q. Intangible Assets

- Intangible assets are recorded at the consideration paid for their acquisition.

- Intangible assets are amortised over their useful economic life, as estimated by the management, on a straight line basis commencing from the date the asset is available to the company for its use. Management estimates of useful life of Intangible assets are as follows:

Trademark - 5 years

Technical Know How - 5 years

Software - 3 years

r. Impairment of Fixed Assets

The Company assesses at each balance sheet date whether there is any indication that an asset or a group of assets (cash generating unit) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or a group of assets. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the statement of the profit and loss.

s. Provisions

- Provisions are recognised when the Company recognizes that it has a present obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated.

- Disclosures for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

- Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.

- Contingent assets are not recognised in the financial statements.


Mar 31, 2011

A. Basis of Accounting

- The financial statements are prepared by following the going concern concept on historical cost convention on an accrual basis and are in conformity with the statutory provisions and standard accounting practices, except wherever otherwise stated.

- Estimates and assumptions used in the preparation of the financial statements are based upon management's evaluation of the relevant facts and circumstances as of the date of the financial statements, which may differ from the actual results at a subsequent date.

b. Inventories

Inventories are valued as under:

- Poultry for livestock breeding : At cost

- Raw materials and packing materials : At cost or net realizable value, whichever is lower

- Work-in-process : At cost or net realizable value, whichever is lower

- Finished goods : At cost or net realizable value, whichever is lower

- Stores and spares : At cost

- By products : At estimated selling price

i. Cost of raw materials (except oilseeds), packing material and stores & spares inventories is determined on first in first out (FIFO) basis.

ii. Cost of oilseeds inventories is determined on periodic weighted average basis.

iii.Cost of finished goods and work in process include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

c. Fixed Assets and Depreciation

- Fixed assets are stated at historical cost less accumulated depreciation.

- Historical cost is arrived at after deducting tax / duty credits, if any.

- Depreciation is provided on straight line method except in respect of assets of Narmada Hatcheries Division of the Company which are depreciated by the written down value method.

- Depreciation is charged at the rates specified in Schedule XIV to the Companies Act, 1956.

- Depreciation on additions during the year is charged on pro-rata basis.

- Pre-operative expenses up to the date the asset is put to use, are capitalised as part of the cost of asset.

d. Operating Leases

- Lease arrangements where risks and rewards incidental to ownership of an asset substantially vests with lessor are classified as operating lease.

- Rental incomes on assets given under operating lease arrangements are recognised in the statement of profit and loss account as per the respective lease agreement.

- Rental expenses on assets obtained under operating lease arrangements are recognised in the statement of profit and loss account as per the respective lease agreement.

e. Impairment of Fixed Assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company's fixed assets. If any indication exists, an asset's recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

f. Research and Development

Revenue expenditure on research and development is charged to profit and loss account.

g. Revenue Recognition

- Sales are recognized when goods are invoiced on dispatch to customers and are recorded inclusive of excise duty and net of trade discounts and sales tax / VAT.

- Dividend income is accounted for in the year in which it is declared.

h. Foreign Currency Transactions

- Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Foreign currency monetary assets and liabilities are translated at the year end exchange rate and the related exchange gain / loss is recognized in profit and loss account.

- In respect of forward exchange contracts, the difference between the forward rate and the exchange rate at the inception of the contract is recognized as income or expense over the life of contract.

i. Government Grants & Subsidies

- Non-refundable capital grants towards project undertaken by the Company are transferred to revenue account to the extent of depreciation on assets acquired out of the grants.

- Grant received against specific fixed assets are reduced from the cost of that asset.

- Subsidy in respect of air freight for export development is accounted for on accrual basis.

- Grants in the nature of Promoter's Contributions are treated as a part of Capital reserve.

j. Investments

- Investments are classified as current investments and long-term investments based on intention of the management at the time of purchase.

- Current investments are stated at the lower of cost and fair value.

- Long-term investments are stated at cost.

- Provision for diminution in value is made to recognize a decline, other than temporary, in the value of long-term investments.

k. Employee Benefits

- Short term employee benefits

All employee benefits which fall due wholly within twelve months after the end of the period in which employee renders the related service are classified as short-term employee benefits. Undiscounted value of short term benefits such as salaries, wages, bonus and ex-gratia are recognized in the period in which the employee renders the related service.

- Post-employment benefits

i. Defined Contribution Plans:

The Company contributes to the following defined contribution plans:

- Superannuation Scheme

- Provident Fund scheme

- State Insurance Scheme

The Company's contribution paid / payable under the schemes are recognized as an expense in the profit and loss account during the period in which the employee renders the related service.

ii. Defined Benefit Plans:

The Company's gratuity scheme is a defined benefit plan. The present value of the obligation under the plan is determined based on actuarial valuation. Long term accumulated compensated absences are provided for based on actuarial valuation.

Actuarial valuation is based on the Projected Unit Credit Method. The liability is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognized immediately in the Profit & Loss Account.

I. Borrowing Costs

- Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as a part of the cost of that asset.

- Other borrowing costs are recognised as an expense in the period in which they are incurred.

m. Earnings Per Share

Earnings per share is calculated by dividing the net profit for the year attributable to the equity shareholders by weighted average number of equity shares outstanding during the period.

n. Taxes on Income

- Current tax is determined on the basis of the taxable income and tax credits computed for the year in accordance with the provisions of Income Tax Act, 1961, and based on expected outcome of assessment / appeals.

- Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

- Deferred tax assets are recognized and carried forward to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

o. Intangible Assets

- Intangible assets are recognised at the consideration paid for acquisition and are stated at cost less accumulated amortisation.

- Intangible assets are amortised over their useful economic lives, as estimated by the management, on a straight line basis, commencing from the date the asset is available to the company for its use. Management estimates of useful life are as follows:

i. Trademark - 5 years

ii. Technical Know How - 5 years

iii. Software - 3 years

p. Provisions

- Provisions are recognised when the Company recognizes that it has a present obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated.

- Disclosures for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

- Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.

- Contingent assets are not recognised in the financial statements.


Mar 31, 2010

A. Basis of Accounting

- The financial statements are prepared by following the going concern concept on historical cost convention on an accrual basis and are in conformity with the statutory provisions and standard accounting practices, except wherever otherwise stated.

- Estimates and assumptions used in the preparation of the financial statements are based upon managements evaluation of the relevant facts and circumstances as of the date of the financial statements, which may differ from the actual results at a subsequent date.

b. Inventories

Inventories are valued as under:

- Poultry for livestock breeding : At cost

- Raw materials and packing materials : At cost or net realizable value, whichever is lower

- Work-in-process : At cost or net realizable value, whichever is lower

- Finished goods : At cost or net realizable value, whichever is lower

- Stores and spares : At cost

- By products : At estimated selling price

i. Cost of raw materials (except oilseeds), packing material and stores & spares inventories is determined on first in first out (FIFO) basis.

ii. Cost of oilseeds inventories is determined on periodic weighted average basis.

iii. Cost of finished goods and work in process include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

c. Fixed Assets and Depreciation

- Fixed assets are stated at historical cost less accumulated depre -ciation.

- Historical cost is arrived at after deducting tax / duty credits, if any.

- Depreciation is provided on straight line method except in respect of assets of Narmada Hatcheries Division of the Company which are depreciated by the written down value method.

- Depreciation is charged at the rates specified in Schedule XIV to the Companies Act, 1956.

- Depreciation on additions during the year is charged on pro-rata basis.

- Pre-operative expenses up to the date the asset is put to use, are capitalised as part of the cost of asset.

d. Operating Leases

- Lease arrangements where risks and rewards incidental to ownership of an asset substantially vests with lessor are classified as operating lease.

- Rental incomes on assets given under operating lease arrangements are recognised in the statement of profit and loss account as per the respective lease agreement.

- Rental expenses on assets obtained under operating lease arrangements are recognised in the statement of profit and loss account as per the respective lease agreement.

e. Impairment of Fixed Assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Companys fixed assets. If any indication exists, an assets recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

f. Research and Development

Revenue expenditure on research and development is charged to profit and loss account.

g. Revenue Recognition

- Sales are recognized when goods are invoiced on dispatch to customers and are recorded inclusive of excise duly and net of trade discounts and sales tax / VAT.

- Dividend income is accounted for in the year in which it is declared.

h, Foreign Currency Transactions

- Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Foreign currency monetary assets and liabilities are translated at the year end exchange rate and the related exchange gain / loss is recognized in profit and loss account.

- In respect of forward exchange contracts, the difference between the forward rate and the exchange rate at toe inception of the contract is recognized as income or expense over the life of contract.

i. Government Grants & Subsidies

- Non-refundable capital grants towards project undertaken by the Company are transferred to revenue account to the extent of depreciation on assets acquired out of the grants.

- Grant received against specific fixed assets are reduced from the cost of that asset.

- Subsidy in respect of air freight for export development is accounted for on accrual basis.

- Grants in the nature of Promoters Contributions are treated as a part of Capital reserve.

i. Investments

- Investments are classified as current investments and long-term investments based on intention of the management at the time of purchase.

- Current investments are stated at the lower of cost and fair value.

- Long-term investments are stated at cost.

- Provision for diminution in value is made to recognize a decline, other than temporary, in the value of long-term investments.

k. Employee Benefits

- Short term employee benefits

All employee benefits which fall due wholly within twelve months after the end of the period in which employee renders the related service are classified as short-term employee benefits. Undiscounted value of short term benefits such as salaries, wages, bonus and ex-gratia are recognized in the period in which the employee renders the related service.

- Post-employment benefits

i. Defined Contribution Plans:

The Company contributes to the following defined contribution plans:

- Superannuation Scheme

- Provident Fund scheme

- State Insurance Scheme

The Companys contribution paid / payable under the schemes are recognized as an expense in the profit and loss account during the period in which the employee renders the related service.

ii. Defined Benefit Plans:

The Companys gratuity scheme is a defined benefit plan. The present value of the obligation under the plan is determined based on actuarial valuation. Long term accumulated compensated absences are provided for based on actuarial valuation.

Actuarial valuation is based on the Projected Unit Credit Method, The liability is measuwed at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognized immediately in the Profit & Loss Account.

I. Borrowing Costs

- Borrowing costs that are directly attributable to the acquition, construction or production of a qualifying asset are capitalised as a part of the cost of that asset

- Other borrowing costs are recognised as an expense In the period in which they are incurred,

m. Earnings Per Share

Earnings per share is calculated by dividing the net profit for the year attributable to the equity shareholders by weighted average number of equity shares outstanding during the period.

n. Taxes on Income

- Current tax: is determined on the basis of the taxable income and tax credits computed for the

year in accordance with the provisions of Income Tax Act 1901, and based on expected outcome of assessment / appeals.

- Deterred tax is recognized on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

- Deferred tax assets are recognized and carried forward to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

o. Intansible Assets

- Intangible assets are recognised at the consideration paid for acquisition and are stated at cost less accumulated amortisation.

- Intangible assets are amortised over their useful economic lives, as estimated by the management, on a straight line basis, commencing from the date the asset is availabile to the company for its use. Management estimates of useful life are as follows:

i. Trademark - 5 years

ii. Technical Know How - 5 years

iii. Software - 3 years

p. provisions

- Provisions are recognised when the Company recognizes that it has a present obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated,

- Disclosures for contingent liability is made when there is a possibe obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

- Loss contingencies arising from claims, litigation, assessment fines, penalties, etc. are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.

- Contingent assets are not recognised in the financial statements,

 
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