Dec 31, 2014
(a) Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires management to make judgements, estimates and assumptions that
affect the reported amounts of revenues, expenses, assets and
liabilities and disclosure of contingent liabilities, at the reporting
year end. Although, these estimates are based on the management''s best
knowledge of current events and actions, uncertainty about these
assumptions and estimates could result in the outcomes requiring a
material adjustment to the carrying amounts of assets or liabilities in
future periods.
(b) Tangible fixed assets
Fixed assets are stated at cost, net of accumulated depreciation and
impairment losses if any. The cost comprises the purchase price and
directly attributable cost of bringing the asset to its working
condition for its
intended use. Borrowing costs relating to acquisition of fixed assets
which take substantial period of time to get ready for intended use are
also included to the extent they relate to the period till such assets
are ready to be put to use.
Subsequent expenditure related to an item of fixed asset is added to
its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.
All other expenses on existing fixed assets, including day-to- day
repair and maintenance expenditure and cost of replacing parts, are
charged to the Statement of Profit and Loss for the period during which
such expenses are incurred.
Gains or losses arising from derecognition of fixed assets are measured
as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the Statement of Profit and
Loss when the asset is derecognized.
(c) Depreciation on tangible fixed assets
Depreciation on building and plant and machinery is provided for in the
accounts on straight line method in accordance with the rates
prescribed in Schedule XIV of the Companies Act, 1956 which coincides
with the useful life of the assets estimated by the Management.
Depreciation on other assets is provided using the Straight Line Method
as per the useful life of the assets estimated by the management, or at
the rates prescribed under Schedule XIV of the Companies Act, 1956
whichever is higher.
Individual fixed assets costing less than H5,000 are fully depreciated
in the year of purchase.
Lease hold improvements are depreciated over the period of lease which
is generally ten years.
Included in Plant and machinery.
(d) Impairment of tangible and intangible assets
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
greater of the asset''s net selling price and value in use. In assessing
value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and risks specific to the
asset. After impairment, depreciation is provided on the revised
carrying amount of the asset over its remaining useful life.
An assessment is made at each reporting date as to whether there is any
indication that previously recognized impairment losses may no longer
exist or may have decreased. If such indication exists, the Company
estimates the asset''s or cash-generating unit''s recoverable amount. A
previously recognized impairment loss is reversed only if there has
been a change in the assumptions used to determine the asset''s
recoverable amount since the last impairment loss was recognized. The
reversal is limited so that the carrying amount of the asset does not
exceed its recoverable amount, nor exceed the carrying amount that
would have been determined, net of depreciation, had no impairment loss
been recognized for the asset in prior years. Such reversal is
recognized in the Statement of Profit and Loss unless the asset is
carried at a revalued amount, in which case the reversal is treated as
a revaluation increase.
(e) Intangible assets
An intangible asset is recognised, only where it is probable that
future economic benefits attributable to the asset will accrue to the
enterprise and the cost can be measured reliably. Intangible assets are
stated at cost less accumulated amortisation.
Costs relating to intangible assets, which are acquired, are
capitalised and amortised on a straight-line basis over their useful
lives.
Useful life
Technical Knowhow 10 years
Technology license fees 5 years
Germ plasm 10 years
Software 10 years
Trade marks/brands 10 years
Goodwill arising on acquisition of business is not amortised, but
tested for impairment at the end of each
balance sheet date and any impairment loss arises is recognized in the
Statement of Profit and Loss.
(f) Research and development
Research expenditure is charged to revenue in the year in which it is
incurred. Development expenditure is carried forward when its future
recoverability can reasonably be regarded as assured and is amortised
over the period of expected future benefit.
(g) Operating leases
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognized as an expense
in the Statement of Profit and Loss on a straight-line basis over the
lease term.
(h) Government grants
Grants from the government are recognized when there is reasonable
assurance that the grant will be received and all attached conditions
will be complied with.
When the grant relates to revenue, it is recognized as income on a
systematic basis in the Statement of Profit and Loss over the periods
necessary to match them with the related costs, which they are intended
to compensate. Where the grant relates to an asset, it is recognized as
deferred income and released to income in equal amounts over the
expected useful life of the related asset.
Government grants received in the nature of investment subsidy are
treated as capital reserve.
(i) Investments
Investments which are readily realisable and intended to be held for
not more than a year from the date on which such investments are made,
are classified as current investments. All other investments are
classified as long-term investments. On initial recognition, all
investments are measured at cost. Current investments are carried at
lower of cost and fair value determined on an individual investment
basis. Long-term investments are carried at cost. However, provision
for diminution in value is made to recognise a decline other than
temporary in the value of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
Statement of Profit and Loss.
(j) Inventories
Inventories are valued as follows:
Raw materials, Packing Materials:
Lower of cost and net realizable value. However, materials and other
items held for use in the production of inventories are not written
down below cost if the finished products in which they will be
incorporated are expected to be sold at or above cost. Cost is
determined on a weighted average basis.
Work-in-progress and finished goods:
Lower of cost and net realizable value. Cost includes direct materials
and labour and a proportion of manufacturing overheads based on normal
operating capacity. Cost is determined on weighted average basis.
Traded goods:
Lower of cost and net realizable value. Cost includes cost of purchase
and other costs incurred in bringing the inventories to their present
location and condition. Cost is determined on a weighted average
basis.
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 the sale.
(k) Revenue recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognised:
i) Revenue from sale of goods is recognized when significant risks and
rewards of ownership of the goods have passed to the buyer which
generally coincides with dispatch of goods (including sale of remnants)
to the customer. The sales are net of sales return.
ii) Interest is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head "Other income" in the
Statement of Profit and Loss.
iii) Dividend is recognized when the company''s right to receive payment
is established by the Balance Sheet date.
iv) Royalty is recognised on an accrual basis in accordance with the
terms of the relevant agreement.
(l) Foreign currency translation Initial recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are translated using the exchange rate
prevailing at the reporting date. Non-monetary items which are
measured in terms of historical cost denominated in a foreign currency
are reported using the exchange rate at the date of the transaction.
Exchange differences
Exchange differences arising on a monetary item that, in substance,
form part of the company''s net investment in a non-integral foreign
operation is accumulated in a foreign currency translation reserve in
the financial statements until the disposal of the net investment.
Exchange differences arising on the settlement of monetary items not
covered above, or on reporting such monetary items of company at rates
different from those at which they were initially recorded during the
year, or reported in previous financial statements, are recognized as
income or as expenses in the year in which they arise.
Exchange difference arising on financing activities are reflected under
finance cost.
(m) Derivative instruments
As per the ICAI announcement, accounting for derivative contracts,
other than those covered under AS 11, are marked to market on a
portfolio basis, and the net loss is charged to the Statement of Profit
and Loss. Net gains are ignored.
(n) Retirement and other employee benefits
i) Retirement benefit in the form of provident fund and superannuation
are defined contribution scheme. The company has no obligation, other
than the contribution payable to the provident fund and superannuation
fund. The Company recognizes contribution payable to the provident fund
scheme and superannuation scheme as an expenditure, when an employee
renders the related service. If the contribution payable to the schemes
for service received before the balance sheet date exceeds the
contribution already paid, the deficit payable to the scheme is
recognized as a liability after deducting the contribution already
paid. If the contribution already paid exceeds the contribution due for
services received before the balance sheet date, then excess is
recognized as an asset to the extent that the pre-payment will lead to,
for example, a reduction in future payment or a cash refund.
ii) Gratuity liability is defined benefit obligations and are provided
for on the basis of an actuarial valuation on projected unit credit
method made at the end of each financial year.
iii) Accumulated leave, which is expected to be utilized within the
next 12 months, is treated as short-term employee benefit. The Company
measures the expected cost of such absences as the additional amount
that it expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward
beyond twelve months, as long-term employee benefit for measurement
purposes. Such long-term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year-end. The Company presents the leave as a current liability in the
balance sheet, to the extent it does not have an unconditional right to
defer its settlement for 12 months after the reporting date. Where the
Company has the unconditional legal and contractual right to defer the
settlement for a period beyond 12 months, the same is presented as
non-current liability.
iv) Actuarial gains / losses are immediately taken to the Statement of
Profit and Loss and are not deferred.
(o) Income taxes
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Income Tax Act, 1961 enacted in India. Deferred
income taxes reflects the impact of current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised.
In situations where the company has unabsorbed depreciation or carry
forward tax losses, all deferred tax assets are recognised only if
there is virtual certainty supported by convincing evidence that they
can be realised against future taxable profits.
At each balance sheet date the Company re-assesses unrecognised
deferred tax assets. It recognises unrecognised deferred tax assets to
the extent that it has become reasonably certain or virtually certain,
as the case may be that sufficient future taxable income will be
available against which such deferred tax assets can be realised.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date. The company writes-down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realised. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available.
Minimum alternate tax (MAT) paid in a year is charged to the Statement
of Profit and Loss as current tax. The Company recognizes MAT credit
available as an asset only to the extent that there is convincing
evidence that the Company will pay normal income tax during the
specified period, i.e., the period for which MAT credit is allowed to
be carried forward. In the year, in which the Company recognizes MAT
credit as an asset in accordance with the Guidance Note on Accounting
for Credit Available in respect of Minimum Alternative Tax under the
Income-tax Act, 1961, the said asset is created by way of credit to the
Statement of Profit and Loss and shown as "MAT Credit Entitlement." The
Company reviews the "MAT credit entitlement" asset at each reporting
date and writes down the asset to the extent the Company does not have
convincing evidence that it will pay normal tax during the specified
period.
(p) Earnings per share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. For the
purpose of calculating diluted earnings per share, the net profit or
loss for the period attributable to equity shareholders and the
weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
(q) Provisions
A provision is recognized when the Company has a present obligation as
a result of past event, it is probable that an outflow of resources
will be required to settle the obligation and a reliable estimate can
be made of the amount of the obligation. Provisions are not discounted
to their present value and are determined based on the best estimate
required to settle the obligation at the reporting date. These
estimates are reviewed at each reporting date and adjusted to reflect
the current best estimates.
(r) Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short- term investments with an
original maturity of three months or less.
(s) Borrowing costs
All borrowing costs are expensed in the period they occur. Borrowing
costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds.
(t) Employee stock compensation cost
Measurement and disclosure of the employee share- based payment plans
is done in accordance with SEBI (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note
on Accounting for Employee Share- based Payments, issued by the
Institute of Chartered Accountants of India. The Company measures
compensation cost relating to employee stock options using the
intrinsic value method. Compensation expense is amortised over the
vesting period of the
option on a straight line basis.
(u) Segment reporting Identification of segments:
Segments are identified in line with AS 17 "Segment Reporting", taking
into consideration the internal organization and management structure
as well as the differential risk and returns of the segment.
Based on the Company''s business model, research, production and
distribution of Hybrid seeds have been considered as the only
reportable segment and hence no separate financial disclosure is
provided in respect of its single business segment.
Segment 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.
(v) Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The Company does not
recognize a contingent liability but discloses its existence in the
financial statements.
(b) Terms/rights attached to equity shares
The Company has one class of equity shares having par value of H2/- per
share. Each holder of equity shares is entitled to one vote per share.
The Company declares and pays dividends in Indian rupees. The dividend
proposed by the Board of Directors is subject to the approval of the
shareholders in the Annual General Meeting. In the event of liquidation
of the Company, the holders of the equity shares will be entitled to
receive the remaining assets of the Company after distribution of all
preferential amounts. The distribution will be in proportion to the
number of equity shares held by the shareholders.
(e) Shares reserved for issue under options
For details of shares reserved for issue under the employee stock
option (ESOP) plan of the Company, refer note 32.
For details of shares reserved for issue on conversion of FCCB, please
refer note 5 regarding terms of conversion/ redemption of FCCB.
Dec 31, 2013
1 Corporate information
Advanta Limited (Formerly Advanta India Limited) (''the Company'') is a
public company domiciled in India and incorporated under the provisions
of the Companies Act, 1956. Its shares are listed on National Stock
Exchange and Bombay Stock Exchange. The Company is engaged in the
business of research, production and sale of field crop and vegetable
seeds through distributors to farmers.
2 Basis of preparation
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The Company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under the Companies (Accounting Standards) Rules, 2006, (as amended)
and the relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on an accrual basis and under the
historical cost convention except for derivative financial instruments
which have been measured at fair value. The accounting policies have
been consistently applied and are consistent with those used in the
previous year.
2.1 Summary of significant accounting policies
(a) Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires management to make judgments, estimates and assumptions that
affect the reported amounts of revenues, expenses, assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the
reporting year end. Although, these estimates are based on the
management''s best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
(b) Tangible fixed assets
Fixed assets are stated at cost, net of accumulated depreciation and
impairment losses if any. The cost comprises the purchase price and
directly attributable cost of bringing the asset to its working
condition for its intended use. Borrowing costs relating to acquisition
of fixed assets which take substantial period of time to get ready for
intended use are also included to the extent they relate to the period
till such assets are ready to be put to use.
Subsequent expenditure related to an item of fixed asset is added to
its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.
All other expenses on existing fixed assets, including day-to-day
repair and maintenance expenditure and cost of replacing parts, are
charged to the statement of profit and loss for the period during
which such expenses are incurred.
Gains or losses arising from derecognition of fixed assets are
measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognized in the Statement of
Profit and Loss when the asset is derecognized.
(c) Depreciation on tangible fixed assets
Depreciation on building and plant and machinery is provided for in the
accounts on straight line method in accordance with the rates
prescribed in Schedule XIV of the Companies Act, 1956 which coincides
with the useful life of the assets estimated by the Management.
Depreciation on other assets is provided using the Straight Line Method
as per the useful life of the assets estimated by the management, or at
the rates prescribed under Schedule XIV of the Companies Act, 1956
whichever is higher.
Individual fixed assets costing less than Rs. 5,000 are fully
depreciated in the year of purchase. Lease hold improvements are
depreciated over the period of lease which is generally ten years.
(d) Impairment of tangible and intangible assets
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the asset''s net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and risks s
pecific to the asset.
Goodwill is tested for impairment at the end of each balance sheet date
and any impairment loss arises is recognized in the statement of
profit and loss.
(e) Intangible assets
Costs relating to intangible assets, which are acquired, are
capitalised and amortised on a straight-line basis over their useful
lives.
Goodwill arising on acquisition of business is not amortised.
(f) Research and development
Research expenditure is charged to revenue in the year in which it is
incurred. Development expenditure is carried forward when its future
recoverability can reasonably be regarded as assured and is amortised
over the period of expected future benefit.
(g) Operating leases
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term are classified as
operating leases. Operating lease payments are recognized as an expense
in the Statement of Profit and Loss on a straight-line basis over the
lease term.
(h) Government grants
Grants from the government are recognized when there is reasonable
assurance that the grant will be received and all attached conditions
will be complied with.
When the grant relates to revenue, it is recognized as income on a
systematic basis in the Statement of Profit and Loss over the periods
necessary to match them with the related costs, which they are intended
to compensate. Where the grant relates to an asset, it is recognized as
deferred income and released to income in equal amounts over the
expected useful life of the related asset.
Government grants received in the nature of investment subsidy are
treated as capital reserve.
(i) Investments
Investments which are readily realisable and intended to be held for
not more than a year from the date on which such investments are made,
are classified as current investments. All other investments are
classified as long-term investments. Current investments are carried
at lower of cost and fair value determined on an individual investment
basis. Long-term investments are carried at cost. However, provision
for diminution in value is made to recognise a decline other than
temporary in the value of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
Statement of Profit and Loss.
(j) Inventories
Inventories are valued as follows:
Raw materials, Packing Materials:
Lower of cost and net realizable value. However, materials and other
items held for use in the production of inventories are not written
down below cost if the finished products in which they will be
incorporated are expected to be sold at or above cost. Cost is
determined on a moving weighted average basis.
Work-in-progress and finished goods:
Lower of cost and net realizable value. Cost includes direct materials
and labor and a proportion of manufacturing overheads based on normal
operating capacity. Cost is determined on weighted average basis.
Traded goods:
Lower of cost and net realizable value. Cost includes cost of purchase
and other costs incurred in bringing the inventories to their present
location and condition. Cost is determined on a weighted average basis.
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 the sale.
(k) Revenue recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognised:
i) Revenue from sale of goods is recognized when significant risks and
rewards of ownership of the goods have passed to the buyer which
generally coincides with dispatch of goods (including sale of remnants)
to the customer. The sales are net of sales return.
ii) Income from services are recognized as and when the services are
rendered.
iii) Interest is recognized on a time proportion basis taking into
account the amount outstanding and the rate applicable. Interest income
is included under the head "Other income" in the Statement of Profit
and Loss.
iv) Dividend is recognized when the shareholders'' right to receive
payment is established by the balance sheet date.
v) Royalty is recognised on an accrual basis in accordance with the
terms of the relevant agreement.
(l) Foreign exchange translation
Initial recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction.
Exchange differences
Exchange differences arising on the settlement of monetary items or on
reporting monetary items of company at rates different from those at
which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise except those arising from investments
in non-integral operations.
Exchange differences arising on a monetary item that, in substance,
form part of the company''s net investment in a non-integral foreign
operation is accumulated in a foreign currency translation reserve in
the financial statements until the disposal of the net investment, at
which time they are recognized as income or as expenses. Exchange
differences arising on the settlement of monetary items not covered
above, or on reporting such monetary items of company at rates
different from those at which they were initially recorded during the
year, or reported in previous financial statements, are recognized as
income or as expenses in the year in which they arise.
Exchange difference arising on financing activities are reflected
under finance cost.
(m) Derivative instruments
As per the ICAI announcement, accounting for derivative contracts,
other than those covered under AS 11, are marked to market on a
portfolio basis, and the net loss is charged to the statement of
profit and loss. Net gains are ignored.
(n) Retirement and other employee benefits
i) Retirement benefit in the form of provident fund and
superannuation are defined contribution scheme. The company has no
obligation, other than the contribution payable to the provident fund
and superannuation fund. The Company recognizes contribution payable to
the provident fund scheme and super annotation scheme as an expenditure,
when an employee renders the related service. If the contribution
payable to the schemes for service received before the balance sheet
date exceeds the contribution already paid, the deficit payable to the
scheme is recognized as a liability after deducting the contribution
already paid. If the contribution already paid exceeds the contribution
due for services received before the balance sheet date, then excess is
recognized as an asset to the extent that the pre-payment will lead to,
for example, a reduction in future payment or a cash refund.
ii) Gratuity liability is defined benefit obligations and are
provided for on the basis of an actuarial valuation on projected unit
credit method made at the end of each financial year.
iii) Accumulated leave, which is expected to be utilized within the
next 12 months, is treated as short- term employee benefit. The
Company measures the expected cost of such absences as the additional
amount that it expects to pay as a result of the unused entitlement
that has accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward
beyond twelve months, as long-term employee benefit for measurement
purposes. Such long-term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year- end. The Company presents the leave as a current liability in the
balance sheet, to the extent it does not have an unconditional right to
defer its settlement for 12 months after the reporting date. Where the
Company has the unconditional legal and contractual right to defer the
settlement for a period beyond 12 months, the same is presented as
non-current liability.
iv) Actuarial gains / losses are immediately taken to the Statement of
Profit and Loss and are not deferred.
(o) Income taxes
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Income Tax Act, 1961 enacted in India. Deferred
income taxes reflects the impact of current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits.
At each balance sheet date the Company re-assesses unrecognised
deferred tax assets. It recognises unrecognised deferred tax assets to
the extent that it has become reasonably certain or virtually certain,
as the case may be that sufficient future taxable income will be
available against which such deferred tax assets can be realised.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date. The company writes-down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realised. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available.
Minimum alternate tax (MAT) paid in a year is charged to the Statement
of Profit and Loss as current tax. The Company recognizes MAT credit
available as an asset only to the extent that there is convincing
evidence that the Company will pay normal income tax during the
specified period, i.e., the period for which MAT credit is allowed to be
carried forward. In the year, in which the Company recognizes MAT
credit as an asset in accordance with the Guidance Note on Accounting
for Credit Available in respect of Minimum Alternative Tax under the
Income-tax Act, 1961, the said asset is created by way of credit to the
Statement of Profit and Loss and shown as "MAT Credit Entitlement".
The Company reviews the "MAT credit entitlement" asset at each
reporting date and writes down the asset to the extent the Company does
not have convincing evidence that it will pay normal tax during the
specified period.
(p) Earnings per share
Basic earnings per share are calculated by dividing the net profi t or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
(q) Provisions
A provision is recognized when the Company has a present obligation as
a result of past event, it is probable that an outflow of resources
will be required to settle the obligation and a reliable estimate can
be made of the amount of the obligation. Provisions are not discounted
to their present value and are determined based on the best estimate
required to settle the obligation at the reporting date. These
estimates are reviewed at each reporting date and adjusted to reflect
the current best estimates.
(r) Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
(s) Borrowing costs
All borrowing costs are expensed in the period they occur. Borrowing
costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds.
(t) Employee stock compensation cost
Measurement and disclosure of the employee share-based payment plans is
done in accordance with SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on
Accounting for Employee Share-based Payments, issued by the Institute
of Chartered Accountants of India. The Company measures compensation
cost relating to employee stock options using the intrinsic value
method. Compensation expense is amortised over the vesting period of
the option on a straight line basis.
(u) Segment reporting
Identification of segments:
Segments are identified in line with AS 17 "Segment Reporting", taking
into consideration the internal organization and management structure
as well as the differential risk and returns of the segment.
Based on the Company''s business model, research, production and
distribution of Hybrid seeds have been considered as the only
reportable segment and hence no separate financial disclosure is
provided in respect of its single business segment.
Segment 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.
(v) Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The Company does not
recognize a contingent liability but discloses its existence in the
financial statements.
(b) Terms/rights attached to equity shares
The Company has one class of equity shares having par value of Rs.2/-
per share (Previous year: Rs.10/- per share). Each holder of equity
shares is entitled to one vote per share. The Company declares and pays
dividends in Indian rupees. The dividend proposed by the Board of
Directors is subject to the approval of the shareholders in the Annual
General Meeting. In the event of liquidation of the Company the holders
of the equity shares will be entitled to receive the remaining assets
of the Company after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held
by the shareholders.
As per records of the Company, including its register of
shareholders/members and other declarations received from shareholders
regarding beneficial interest, the above shareholding represents both
legal and beneficial ownerships of shares.
*Shareholding appearing as at December 31, 2013 stands adjusted
consequent upon sub-division of existing equity share of face value of
Rs.10/- each into five equity shares of face value of Rs.2/- each.
(e) Shares reserved for issue under options
For details of shares reserved for issue under the employee stock
option (ESOP) plan of the Company, refer note 33.
a) Unsecured redeemable non convertible debentures
Dec 31, 2012
(a) Presentation and disclosure of financial statements
During the year ended 31st December 2012, the revised Schedule VI
notified under the Companies Act 1956, has become applicable to the
company, for preparation and presentation of its financial statements.
The company has also reclassified the previous year figures in
accordance with the requirements applicable in the current year.
(b) Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make judgments,
estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements and the results of
operations during the reporting year end. Although these estimates are
based upon management''s best knowledge of current events and actions,
actual results could differ from these estimates.
(c) Fixed Assets
Fixed assets are stated at cost, less accumulated depreciation and
impairment losses if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use. Borrowing costs relating to acquisition of fixed
assets which take substantial period of time to get ready for intended
use are also included to the extent they relate to the period till such
assets are ready to be put to use.
(d) Depreciation
Depreciation on building and plant and machinery is provided for in the
accounts on straight line method in accordance with the rates
prescribed in Schedule XIV of the Companies Act, 1956.
Depreciation on other assets is provided using the Straight Line Method
as per the useful life of the assets estimated by the management, or at
the rates prescribed under Schedule XIV of the Companies Act, 1956
whichever is higher.
Individual fixed assets costing less than Rs. 5,000 are fully
depreciated in the year of purchase.
Lease hold improvements are depreciated over the period of lease which
is generally ten years.
(e) Impairment of tangible and intangible assets
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the asset''s net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and risks
specific to the asset.
Goodwill is tested for impairment at the end of each balance sheet date
and any impairment loss arises is recognized in the statement of profit
and loss.
(f) Intangible Assets
Costs relating to intangible assets, which are acquired, are
capitalised and amortised on a straight-line basis over their useful
lives.
Useful life
Technical Knowhow 10 years
Technology License Fees 5 years
Germ Plasm 10 years
Software 10 years
Trade Marks / Brands 10 years
Goodwill arising on acquisition of business is not amortised
(g) Research and Development
Research expenditure is charged to revenue in the year in which it is
incurred. Development expenditure is carried forward when its future
recoverability can reasonably be regarded as assured and is amortised
over the period of expected future benefit.
(h) Leases
Where the Company is the Lessee
Finance leases, which effectively transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalised at the lower of the fair value of the leased property
and present value of the minimum lease payments at the inception of the
lease term and disclosed as leased assets. Lease payments are
apportioned between the finance charges and reduction of the lease
liability based on the implicit rate of return. Finance charges are
charged directly against income. Lease management fees, legal charges
and other initial direct costs are capitalised.
If there is no reasonable certainty that the Company will obtain the
ownership by the end of the lease term, capitalised leased assets are
depreciated over the shorter of the estimated useful life of the asset
or the lease term.
Leases where the lesser effectively retains substantially all the risks
and benefits of ownership of the leased term are classified as
operating leases. Operating lease payments are recognized as an expense
in the Profit and Loss account on a straight-line basis over the lease
term.
(i) Government Grants
Grants from the government are recognized when there is reasonable
assurance that the grant will be received and all attached conditions
will be complied with.
When the grant relates to an expense item, it is recognized as income
over the periods necessary to match them on a systematic basis to the
costs, which it is intended to compensate.
Government grants received in the nature of Investment Subsidy are
treated as Capital Reserve.
(j) Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognise a
decline other than temporary in the value of the investments.
(k) Inventories Inventories are valued as follows:
Raw materials, Packing Materials:
Lower of cost and net realizable value. However, materials and other
items held for use in the production of inventories are not written
down below cost if the finished products in which they will be
incorporated are expected to be sold at or above cost. Cost is
determined on a moving weighted average basis.
Work-in-progress and finished goods:
Lower of cost and net realizable value Cost includes direct materials
and labour and a proportion of manufacturing overheads based on normal
operating capacity. Cost is determined on standard cost basis.
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 the sale.
In case of a contract where company has a firm commitment, company has
recognised inventory of agricultural crop at net realisable value.
(l) Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured.
i Revenue from sale of goods is recognized when significant risks and
rewards of ownership of the goods have passed to the buyer which
generally coincides with dispatch of goods (including sale of remnants)
to the customer. The sales are net of sales return and expected sales
return.
ii Income from services are recognized as and when the services are
rendered.
iii Interest is recognized on a time proportion basis taking into
account the amount outstanding and the rate applicable.
iv Dividend is recognized when the shareholders'' right to receive
payment is established by the balance sheet date.
v Royalty is recognised on an accrual basis in accordance with the
terms of the relevant agreement.
(m) Foreign Exchange Translation/Currency Transaction Initial
Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction.
Exchange Differences
Exchange differences arising on the settlement of monetary items or on
reporting monetary items of company at rates different from those at
which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise except those arising from investments
in non-integral operations.
Exchange differences arising on a monetary item that, in substance,
form part of the company''s net investment in a non-integral foreign
operation is accumulated in a foreign currency translation reserve in
the financial statements until the disposal of the net investment, at
which time they are recognized as income or as expenses. Exchange
differences arising on the settlement of monetary items not covered
above, or on reporting such monetary items of company at rates
different from those at which they were initially recorded during the
year, or reported in previous financial statements, are recognized as
income or as expenses in the year in which they arise.
Exchange difference arising on financing activities are reflected under
finance cost.
(n) Derivative Instruments
As per the ICAI announcement, accounting for derivative contracts,
other than those covered under AS 11, are marked to market on a
portfolio basis, and the net loss is charged to the statement of profit
and loss. Net gains are ignored.
(o) Retirement and other employee Benefits
(i) Retirement benefits in the form of Provident Fund and
Superannuation Fund are a defined contribution scheme and the
contributions to the scheme are charged to the statement of Profit and
Loss of the year when the contributions to the respective funds are
due. The Superannuation Fund scheme is funded with an insurance company
in the form of a qualifying insurance policy.
(ii) Gratuity liability is defined benefit obligations and are provided
for on the basis of an actuarial valuation on projected unit credit
method made at the end of each financial year.
(iii) Short term compensated absences are provided for on based on
estimates. Long term compensated absences are provided for based on
actuarial valuation. The actuarial valuation is done as per projected
unit credit method
(iv) Actuarial gains / losses are immediately taken to the statement of
profit and loss and are not deferred.
(p) Taxation
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Income Tax Ac,1961 enacted in India. Deferred
income taxes reflects the impact of current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits.
At each balance sheet date the Company re-assesses unrecognised
deferred tax assets. It recognises unrecognised deferred tax assets to
the extent that it has become reasonably certain or virtually certain,
as the case may be, that sufficient future taxable income will be
available against which such deferred tax assets can be realised.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date. The company writes- down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realised. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available.
(q) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
(r) Provisions
A provision is recognised when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. Contingent Liabilities
are not recognized but are disclosed in the Notes. Contingent Assets
are neither recognized nor disclosed in the financials statements.
(s) Cash and Cash Equivalents
Cash and cash equivalents on the balance sheet comprise cash at bank
and in hand and short-term investments with an original maturity of
three months or less.
(t) Borrowing Costs
All borrowing costs are expensed in the period they occur. Borrowing
costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds.
(u) Employee Stock Compensation Cost
Measurement and disclosure of the employee share-based payment plans is
done in accordance with SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on
Accounting for Employee Share-based Payments, issued by the Institute
of Chartered Accountants of India. The Company measures compensation
cost relating to employee stock options using the intrinsic value
method. Compensation expense is amortised over the vesting period of
the option on a straight line basis.
(v) Segment Reporting Policies Identification of segments:
Segments are identified in line with AS 17 "Segment Reporting", taking
into consideration the internal organization and management structure
as well as the differential risk and returns of the segment.
Based on the Company''s business model, research, production and
distribution of Hybrid seeds have been considered as the only
reportable segment and hence no separate financial disclosure is
provided in respect of its single business segment.
Segment 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.
Dec 31, 2011
(a) Basis of Preparation
The financial statements have been prepared to comply in all material
respects with the Notified accounting standard by Companies Accounting
Standards Rules, 2006 (as amended) and the relevant provisions of the
Companies Act, 1956. The financial statements have been prepared under
the historical cost convention on an accrual basis except in case of
assets for which provision for impairment is made. The accounting
policies have been consistently applied by the Company and are
consistent with those used in the previous year.
(b) Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
year end. Although these estimates are based upon management's best
knowledge of current events and actions, actual results could differ
from these estimates.
(c) Fixed Assets
Fixed assets are stated at cost, less accumulated depreciation and
impairment losses if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use. Borrowing costs relating to acquisition of fixed
assets which takes substantial period of time to get ready for its
intended use are also included to the extent they relate to the period
till such assets are ready to be put to use.
(d) Depreciation
Depreciation on building and plant and machinery is provided for in the
accounts on straight line method in accordance with the rates
prescribed in Schedule XIV of the Companies Act, 1956.
Depreciation on other assets is provided using the Straight Line Method
as per the useful life of the assets estimated by the management, or at
the rates prescribed under Schedule XIV of the Companies Act, 1956
whichever is higher.
Individual fixed assets costing less than Rs 5,000 are fully depreciated
in the year of purchase. Lease hold improvements are depreciated over
the period of lease which is generally ten years.
(e) Impairment
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the asset's net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and risks
specific to the asset.
Goodwill is tested for impairment at the end of each balance sheet date
and any impairment loss arises is recognized in the profit and loss
account.
Goodwill arising on acquisition of business is not amortised.
(f) Research and Development
Research expenditure is charged to revenue in the year in which it is
incurred. Development expenditure is carried forward when its future
recoverability can reasonably be regarded as assured and is amortised
over the period of expected future benefit.
(g) Leases Where the Company is the Lessee
Finance leases, which effectively transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed
as leased assets. Lease payments are apportioned between the finance
charges and reduction of the lease liability based on the implicit rate
of return. Finance charges are charged directly against income. Lease
management fees, legal charges and other initial direct costs are
capitalised.
If there is no reasonable certainty that the Company will obtain the
ownership by the end of the lease term, capitalized leased assets are
depreciated over the shorter of the estimated useful life of the asset
or the lease term.
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term are classified as
operating leases. Operating lease payments are recognized as an expense
in the Profit and Loss account on a straight-line basis over the lease
term.
(h) Government Grants
Grants from the Government are recognized when there is reasonable
assurance that the grant will be received and all attaching conditions
will be complied with.
When the grant relates to an expense item, it is recognized as income
over the periods necessary to match them on a systematic basis to the
costs, which it is intended to compensate.
Government grants received in the nature of Investment Subsidy are
treated as Capital Reserve.
(i) Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognise a
decline other than temporary in the value of the investments.
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 the sale.
(j) Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured.
Sale of Goods
Revenue is recognized when significant risks and rewards of ownership
of the goods have passed to the buyer which generally coincides with
dispatch of goods (including sale of remnants) to the customer. The
sales are net of sales return and expected sales return.
Income from Services
Revenues from services are recognized as and when the services are
rendered.
Interest
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable.
Dividends
Revenue is recognized when the shareholders' right to receive payment
is established by the balance sheet date. Dividend from subsidiaries
is recognized even if same are declared after the balance sheet date
but pertains to period on or before the date of balance sheet as per
the requirement of Schedule VI of the Companies Act, 1956.
(k) Foreign Exchange Translation/Currency Transaction Initial
Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction.
Exchange Differences
Exchange differences arising on the settlement of monetary items or on
reporting monetary items of company at rates different from those at
which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise except those arising from investments
in non-integral operations.
Exchange differences arising on a monetary item that, in substance,
form part of the company's net investment in a non-integral foreign
operation is accumulated in a foreign currency translation reserve in
the financial statements until the disposal of the net investment, at
which time they are recognized as income or as expenses. Exchange
differences arising on the settlement of monetary items not covered
above, or on reporting such monetary items of company at rates
different from those at which they were initially recorded during the
year, or reported in previous financial statements, are recognized as
income or as expenses in the year in which they arise.
(l) Derivative Instruments
As per the ICAI announcement, accounting for derivative contracts,
other than those covered under AS 11, are marked to market on a
portfolio basis, and the net loss is charged to the income statement.
Net gains are ignored.
(m) Retirement and other employee Benefits
(i) Retirement benefits in the form of Provident Fund and
Superannuation Fund are a defined contribution scheme and the
contributions to the scheme are charged to the Profit and Loss Account
of the year when the contributions to the respective funds are due. The
Superannuation Fund scheme is funded with an insurance company in the
form of a qualifying insurance policy.
(ii) Gratuity liability is defined benefit obligations and are provided
for on the basis of an actuarial valuation on projected unit credit
method made at the end of each financial year.
(iii) Short term compensated absences are provided for on based on
estimates. Long term compensated absences are provided for based on
actuarial valuation. The actuarial valuation is done as per projected
unit credit method
(iv) Actuarial gains / losses are immediately taken to the profit and
loss account and are not deferred.
(n) Income taxes
Tax expense comprises of current and deferred. Current income tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Indian Income Tax Act. Deferred income taxes
reflects the impact of current year timing differences between taxable
income and accounting income for the year and reversal of timing
differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits.
At each balance sheet date the Company re-assesses unrecognised
deferred tax assets. It recognises unrecognised deferred tax assets to
the extent that it has become reasonably certain or virtually certain,
as the case may be that sufficient future taxable income will be
available against which such deferred tax assets can be realised.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date. The company writes-down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realised. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available.
(o) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
(p) Provisions
A provision is recognised when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. Contingent Liabilities
are not recognized but are disclosed in the Notes. Contingent Assets
are neither recognized nor disclosed in the financials statements.
(q) Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank
and in hand and short-term investments with an original maturity of
three months or less.
(r) Borrowing Costs
All borrowing costs are expensed in the period they occur. Borrowing
costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds.
(s) Employee Stock Compensation Cost
Measurement and disclosure of the employee share-based payment plans is
done in accordance with SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on
Accounting for Employee Share-based Payments, issued by the Institute
of Chartered Accountants of India. The Company measures compensation
cost relating to employee stock options using the intrinsic value
method. Compensation expense is amortized over the vesting period of
the option on a straight line basis.
(t) Segment Reporting Policies Identification of segments:
Segments are identified in line with AS 17 "Segment Reporting",
taking into consideration the internal organization and management
structure as well as the differential risk and returns of the segment.
Based on the Company's business model, research, production and
distribution of Hybrid seeds have been considered as the only
reportable segment and hence no separate financial disclosure is
provided in respect of its single business segment.
Segment 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.
Dec 31, 2010
(a) Basis of Preparation
The financial statements have been prepared to comply in all material
respects in respects with the Notifed accounting standard by Companies
Accounting Standards Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis
except in case of assets for which provision for impairment is made.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
(b) Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
year end. Although these estimates are based upon managementÃs best
knowledge of current events and actions, actual results could differ
from these estimates.
(c) Fixed Assets
Fixed assets are stated at cost, less accumulated depreciation and
impairment losses if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use. Borrowing costs relating to acquisition of fixed
assets which takes substantial period of time to get ready for its
intended use are also included to the extent they relate to the period
till such assets are ready to be put to use.
(d) Depreciation
Depreciation on building and plant and machinery is provided for in the
accounts on straight line method in accordance with the rates
prescribed in Schedule xIV of the Companies Act, 1956.
Depreciation on other assets is provided using the Straight Line Method
as per the useful life of the assets estimated by the management, or at
the rates prescribed under Schedule xIV of the Companies Act, 1956
whichever is higher.
Rate (SLM)
Furniture and Fixtures 10%
Computers 20%
Vehicles 20%
office Equipments 10%
Individual fixed assets costing less than Rs. 5,000 are fully
depreciated in the year of purchase.
Lease hold improvements are depreciated over the period of lease term.
(e) Impairment
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assetÃs net selling price and value in use. In
assessing value in use, the estimated future cash fows are discounted
to their present value at the weighted average cost of capital.
Goodwill is tested for impairment at the end of each balance sheet date
and any impairment loss arises is recognized in the Profit and loss
account.
(f) Intangible Assets
Costs relating to intangible assets, which are acquired, are
capitalised and amortised on a straight-line basis over their useful
lives.
Useful life
Technical Knowhow 10 years
Technology License Fees 5 years
Germ Plasm 10 years
Software 10 years
Trade Marks / Brands 10 years
Goodwill arising on acquisition of business is not amortised.
(g) Research and Development
Research and Development expenditure is charged to revenue in the year
in which it is incurred. Development expenditure is carried forward
when its future recoverability can reasonably be regarded as assured
and is armortised over the period of expected future Benefit.
(h) Leases
Where the Company is the Lessee
Finance leases, which effectively transfer to the Company substantially
all the risks and Benefits incidental to ownership of the leased item,
are capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed
as leased assets. Lease payments are apportioned between the fnance
charges and reduction of the lease liability based on the implicit rate
of return. Finance charges are charged directly against income. Lease
management fees, legal charges and other initial direct costs are
capitalised.
If there is no reasonable certainty that the Company will obtain the
ownership by the end of the lease term, capitalized leased assets are
depreciated over the shorter of the estimated useful life of the asset
or the lease term.
Leases where the lessor effectively retains substantially all the risks
and Benefits of ownership of the leased term are classifed as operating
leases. Operating lease payments are recognized as an expense in the
Profit and Loss account on a straight-line basis over the lease term.
(i) Government Grants
Government grants received in the nature of Investment Subsidy are
treated as Capital Reserve.
(j) Investments
Investments that are readily realisable and intended to be held for not
more than a year are classifed as current investments. All other
investments are classifed as long-term investments. Current investments
are carried at lower of cost and fair value determined on an individual
investment basis. Long-term investments are carried at cost. However,
provision for diminution in value is made to recognise a decline other
than temporary in the value of the investments.
(k) Inventories
Inventories are valued as follows:
Raw materials,
components,
stores and spares Lower of cost and net realizable value.
However, materials and other items held
for use in the production of inventories
are not written down below cost if the
finished products in which they will be
incorporated are expected to be sold at
or above cost. Cost is determined on a
moving weighted average basis.
Work-in-progress and
finished goods Lower of cost and net realizable value.
Cost includes direct materials and labour
and a proportion of manufacturing overheads
based on normal operating capacity. Cost is
determined on standard cost basis.
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 the sale.
(l) Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic Benefits will fow to the Company and the revenue can be
reliably measured.
Sale of Goods
Revenue is recognized when signifcant risks and rewards of ownership of
the goods have passed to the buyer which generally coincides with
dispatch of goods (including sale of remnants) to the customer. The
sales are net of sales return and expected sales return.
Income from Services
Revenues from services are recognized as and when the services are
rendered.
Interest
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable.
Dividends
Revenue is recognized when the shareholdersà right to receive payment
is established by the balance sheet date. Dividend from subsidiaries
is recognized even if same are declared after the balance sheet date
but pertains to period on or before the date of balance sheet as per
the requirement of Schedule VI of the Companies Act, 1956.
(m) Foreign Exchange Translation/Currency Transaction
Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction.
Exchange Differences
Exchange differences arising on the settlement of monetary items or on
reporting monetary items of company at rates different from those at
which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise except those arising from investments
in non-integral operations.
Exchange differences arising on a monetary item that, in substance,
form part of the companyÃs net investment in a non-integral foreign
operation is accumulated in a foreign currency translation reserve in
the financial statements until the disposal of the net investment, at
which time they are recognized as income or as expenses.
(n) Retirement and other employee Benefits
(i) Retirement Benefits in the form of Provident Fund and
Superannuation Fund are a defned contribution scheme and the
contributions to the scheme are charged to the Profit and Loss Account
of the year when the contributions to the respective funds are due. The
Superannuation Fund scheme is funded with an insurance company in the
form of a qualifying insurance policy.
(ii) Gratuity liability is defned Benefit obligations and are provided
for on the basis of an actuarial valuation on projected unit credit
method made at the end of the each financial year.
(iii) Short term compensated absences are provided for on based on
estimates. Long term compensated absences are provided for based on
actuarial valuation. The actuarial valuation is done as per projected
unit credit method
(iv) Actuarial gains / losses are immediately taken to the Profit and
loss account and are not deferred.
(o) Income taxes
Tax expense comprises of current and deferred. Current income tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Indian Income Tax Act. Deferred income taxes
refects the impact of current year timing differences between taxable
income and accounting income for the year and reversal of timing
differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that suffcient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable Profits.
At each balance sheet date the Company re-assesses unrecognised
deferred tax assets. It recognises unrecognised deferred tax assets to
the extent that it has become reasonably certain or virtually certain,
as the case may be that suffcient future taxable income will be
available against which such deferred tax assets can be realised.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date. The company writes- down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that suffcient future taxable
income will be available against which deferred tax asset can be
realised. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
suffcient future taxable income will be available.
MAT credit is recognised as an asset only when and to the extent there
is convincing evidence that the company will pay normal income tax
during the specifed period. In the year in which the Minimum
Alternative tax (MAT) credit becomes eligible to be recognized as an
asset in accordance with the recommendations contained in Guidance Note
issued by the Institute of Chartered Accountants of India, the said
asset is created by way of a credit to the Profit and loss account and
shown as 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 no longer convincing evidence to the
effect that Company will pay normal Income Tax during the specifed
period.
(p) Earnings Per Share
Basic earnings per share are calculated by dividing the net Profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
Profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
(q) Provisions
A provision is recognised when an enterprise has a present obligation
as a result of past event; it is probable that an outfow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. Contingent Liabilities
are not recognized but are disclosed in the Notes. Contingent Assets
are neither recognized nor disclosed in the financials statements.
(r) Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank
and in hand and short-term investments with an original maturity of
three months or less.
(s) Employee Stock Compensation Cost
Measurement and disclosure of the employee share-based payment plans is
done in accordance with SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on
Accounting for Employee Share-based Payments, issued by the Institute
of Chartered Accountants of India. The Company measures compensation
cost relating to employee stock options using the intrinsic value
method. Compensation expense is amortized over the vesting period of
the option on a straight line basis.
Dec 31, 2009
(a) Basis of Preparation
The financial statements have been prepared to comply in all material
respects in respects with the Notified accounting standard by Companies
Accounting Standards Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis
except in case of assets for which provision for impairment is made.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
(b) Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
year end. Although these estimates are based upon managements best
knowledge of current events and actions, actual results could differ
from these estimates.
(c) Fixed Assets
Fixed assets are stated at cost, less accumulated depreciation and
impairment losses if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use. Borrowing costs relating to acquisition of fixed
assets which takes substantial period of time to get ready for its
intended use are also included to the extent they relate to the period
till such assets are ready to be put to use.
(d) Depreciation
Depreciation on building and plant and machinery is provided for in the
accounts on straight line method in accordance with the rates
prescribed in Schedule XIV of the Companies Act, 1956.
Depreciation on other assets is provided using the Straight Line Method
as per the useful life of the assets estimated by the management, or at
the rates prescribed under Schedule XIV of the Companies Act, 1956
whichever is higher.
Rate (SLM) Furniture and Fixtures 10%
Computers 20%
Vehicles 20%
Office Equipments 10%
Individual fixed assets costing less than Rs. 5,000 are fully
depreciated in the year of purchase.
(e) Impairment
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital.
(f) Intangible Assets
Costs relating to intangible assets, which are acquired, are
capitalised and amortised on a straight-line basis over their useful
lives.
Useful life
Technical Knowhow 10 years
Technology License Fees 10 years
Germ Plasm 10 years
Software 10 years
Trade Marks / Brands 10 years
Goodwill arising on acquisition of business is not amortised
(g) Research and Development
Research and Development expenditure is charged to revenue in the year
in which it is incurred.
(h) Leases
Where the Company is the Lessee
Finance leases, which effectively transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed
as leased assets. Lease payments are apportioned between the finance
charges and reduction of the lease liability based on the implicit rate
of return. Finance charges are charged directly against income. Lease
management fees, legal charges and other initial direct costs are
capitalised.
If there is no reasonable certainty that the Company will obtain the
ownership by the end of the lease term, capitalized leased assets are
depreciated over the shorter of the estimated useful life of the asset
or the lease term.
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term are classified as
operating leases. Operating lease payments are recognized as an expense
in the Profit and Loss account on a straight-line basis over the lease
term.
(i) Government Grants
Government Grants received in the nature of Investment Subsidy are
treated as Capital Reserve.
(j) Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognise
a decline other than temporary in the value of the investments.
(k) Inventories
Inventories are valued as follows:
Raw materials, components, stores and spares
Lower of cost and net realizable value. However, materials and other
items held for use in the production of inventories are not written
down below cost if the finished products in which they will be
incorporated are expected to be sold at or above cost. Cost is
determined on a moving weighted average basis.
Work-in-progress and finished goods
Lower of cost and net realizable value. Cost includes direct materials
and labour and a proportion of manufacturing overheads based on normal
operating capacity. Cost is determined on standard cost basis.
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 the sale.
(I) Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured.
Sale of Goods
Revenue is recognized when significant risks and rewards of ownership
of the goods have passed to the buyer which generally coincides with
despatch of goods to the customer. The sales are net of sales return
and expected sales return.
Income from Services
Revenues from services are recognized as and when the services are
rendered.
Interest
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable.
Dividends :
Revenue is recognized when the shareholders right to receive payment
is established by the balance sheet date. Dividend from subsidiaries
is recognized even if same are declared after the balance sheet date
but pertains to period on or before the date of balance sheet as per
the requirement of Schedule VI of the Companies Act, 1956.
(m) Foreign Exchange Translation
Foreign Currency Transaction
Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction.
Exchange Differences
Exchange differences arising on the settlement of monetary items or on
reporting monetary items of company at rates different from those at
which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise except those arising from investments
in non-integral operations.
Exchange differences arising on a monetary item that, in substance,
form part of the companys net investment in a non-integral foreign
operation is accumulated in a foreign currency translation reserve in
the financial statements until the disposal of the net investment, at
which time they are recognized as income or as expenses.
(n) Retirement and other Employee Benefits
(i) Retirement benefits in the form of Provident Fund and
Superannuation Fund are a defined contribution scheme and the
contributions to the scheme are charged to the Profit and Loss Account
of the year when the contributions to the respective funds are due.
There are no other obligations other than the contribution payable to
the respective trusts. The Superannuation Fund scheme is funded with an
insurance company in the form of a qualifying insurance policy.
(ii) Gratuity liability is defined benefit obligations and are provided
for on the basis of an actuarial valuation on projected unit credit
method made at the end of each financial year.
(iii) Short term compensated absences are provided for on based on
estimates. Long term compensated absences are provided for based on
actuarial valuation. The actuarial valuation is done as per projected
unit credit method.
(iv) Actuarial gains / losses are immediately taken to the profit and
loss account and are not deferred.
(o) Income taxes
Tax expense comprises of current, deferred and fringe benefit tax.
Current income tax and fringe benefit tax is measured at the amount
expected to be paid to the tax authorities in accordance with the
Indian Income Tax Act. Deferred income taxes reflects the impact of
current year timing differences between taxable income and accounting
income for the year and reversal of timing differences of earlier
years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits.
At each balance sheet date the Company re-assesses unrecognised
deferred tax assets. It recognises unrecognised deferred tax assets to
the extent that it has become reasonably certain or virtually certain,
as the case may be that sufficient future taxable income will be
available against which such deferred tax assets can be realised.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date. The company writes-down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realised. Any such write-down is reversed to the extent that it
becomes reasonably certain or virtually certain, as the case may be,
that sufficient future taxable income will be available.
MAT credit is recognised as an asset only when and to the extent there
is convincing evidence that the company will pay normal income tax
during the specified period. In the year in which the Minimum
Alternative Tax (MAT) credit becomes eligible to be recognized as an
asset in accordance with the recommendations contained in Guidance Note
issued by the Institute of Chartered Accountants of India, the said
asset is created by way of a credit to the profit and loss account and
shown as 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 no longer convincing evidence to the
effect that Company will pay normal Income Tax during the specified
period.
(p) Segment Reporting Policies
Identification of Segments
The Companys operating businesses are organized and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and serves different markets. The analysis of geographical
segments is based on the areas in which major operating divisions of
the Company operate.
Inter Segment Transfer
The Company generally accounts for inter segment sales and transfers as
if the sales or transfers were to third parties at current market
prices.
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
The Corporate and Other segment includes general corporate income and
expense items which are not allocated to any business segment.
(q) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
(r) Provisions
A provision is recognised when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. Contingent Liabilities
are not recognized but are disclosed in the Notes. Contingent Assets
are neither recognized nor disclosed in the financials statements.
(s) Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank
and in hand and short-term investments with an original maturity of
three months or less.
(t) Employee Stock Compensation Cost
Measurement and disclosure of the employee share-based payment plans is
done in accordance with SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on
Accounting for Employee Share-based Payments, issued by the Institute
of Chartered Accountants of India. The Company measures compensation
cost relating to employee stock options using the intrinsic value
method. Compensation expense is amortized over the vesting period of
the option on a straight line basis.
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