1 Accounting Convention

The financial statements are brpared under the historical cost convention and on the 'going concern basis', with revenues recognised and expenses accounted on their accrual in accordance with the generally accepted accounting principles, and in compliance with the applicable Accounting Standards and other requirements of the Companies Act, 1956.

For the purpose of administration of Employee Stock Option Plan of the Company, the Company has established GAVL ESOP Trust. In the current year, in accordance with the opinion issued by the Expert Advisory Committee (EAC) of the ICAI in 2014 on Consolidation of ESOP Trust in the standalone financial statements, the Company has included the financial statements of the ESOP trust for brparation of the standalone financial statements.

2 Use of Estimates

The brparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities as of the date of the financial statements and reported amounts of income and expenses during the period. Management believes that the estimates used in the brparation of financial statements are prudent and reasonable. Actual results could differ from the estimates.

3 Fixed Assets

Fixed assets have been stated at cost and include incidental and / or installation/development expenses incurred in putting the asset to use and interest on borrowing incurred during construction period. Pre-operative expenses for major projects are also capitalized, where appropriate.

Fixed Assets acquired under finance lease are capitalised at the lower of their face value and brsent value of the minimum lease payments.

The costs incurred for cultivating and maintaining Oil Palm Plantations during the initial four years of the plantation are capitalised as Tree Development Costs.

4 Intangible Assets

Intangible assets acquired separately are stated at cost of acquisition less accumulated amortisation. Development costs incurred on internally generated intangible assets are capitalised and any other related expenditure incurred is reflected in the statement of profit & loss in the period in which the expenditure is incurred.

5 Impairment of Assets

Carrying amount of cash generating units / assets are reviewed at balance sheet date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount is estimated as the net selling price or value in use, whichever is higher. Impairment loss, if any, is recognized whenever carrying amount exceeds the recoverable amount.

6 Borrowing Costs

Interest and commitment charges incurred in connection with borrowing of funds, which are directly attributable to the acquisition, construction or production of an asset that necessarily takes substantial period of time to get ready for its intended use, upto the time the said asset is put to use are capitalised, as a part of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

7 Debrciation /Amortisation

(a)The Company has grouped additions and disposals in appropriate time periods of a month for the purpose of charging pro rata debrciation in respect of additions and disposals of its assets keeping in view the materiality of the items involved.

(b) 1) Debrciation is provided on the straight line method at the rates specified in schedule XIV to the companies Act, 1956, except for computer hardware which is debrciated over its estimated useful life of four years. Assets costing less than Rs. 5,000 are fully debrciated in the year of purchase/acquisition.

2) Amortizations

Asset type Period
(i) Leasehold Land Primary lease period
(ii) Leasehold improvements and equipments Primary lease period or 16 years whichever is less
(iii) Technical Know-how of a capital nature 6 Years
(iv) Computer software 6.17 years
(v) Tree Development Cost 15 years
(vi) Grant of Licenses 10 years

8 Grants / Subsidies

(i) Investment Subsidy under the Central / State investment incentive scheme is credited to Capital Investment Subsidy Reserve and treated as part of the shareholders' funds.

(ii) Grants / Subsidies related to specific fixed assets are shown as a deduction from the gross value of the asset concerned in arriving at its book value.

(iii) Grants / Subsidies related to revenue are brsented as a credit to the profit and loss statement or are deducted in reporting the related expense.

9 Investments

Long Term investments are carried at cost. Provision for diminution, if any, in the value of each long term investment is made to recognise a decline, other than of a temporary nature. Current investments are stated at lower of cost and net realizable value.

10 Inventories

Raw materials, Stock in Trade and Stores & Spares are valued at weighted average cost. Finished goods, Poultry Stock and Stock under Cultivation are valued at lower of cost and net realisable value. These costs include cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition. 

11 Provisions and Contingent Liabilities

Provisions are recognised in the accounts in respect of brsent probable obligations, the amount of which can be reliably estimated.

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company.

12 Revenue Recognition

Revenue is recognised when goods are despatched to external customers and are recorded net of returns, sales tax, rebates, etc. Interest income is recognised on an accrual basis. Dividend income is recognised when the right to receive the same is established

13 Research and Development Expenditure

Revenue expenditure on Research and Development is charged to the Statement of Profit and Loss of the period in which it is incurred. Capital Expenditure incurred during the period on Research and Development is shown as an addition to Fixed Assets.

14 Retirement & other Employee Benefits

i) Short-term employee benefits (payable wholly within twelve months of rendering the service):

Short-term benefits such as salaries, wages, etc., are determined on an undiscounted basis and recognised in the period in which the employee renders the related service.

ii) Post-employment benefits:

Defined Contribution Plans: The Company's contributions paid/payable to Regional Provident Fund at certain locations, Super Annuation Fund, Employees State Insurance Scheme, Employees Pension Schemes, 1995 and other funds, are determined under the relevant approved schemes and/or statutes and are recognised as expense in the Statement of Profit and Loss during the period in which the employee renders the related service. There are no further obligations other than the contributions payable to the approved trusts/appropriate authorities. 

Defined Benefit Plans: The Company's gratuity and leave encashment/long-term compensated absences schemes are defined benefit plans. The Company's liability for the defined benefit schemes is actuarially determined based on the projected unit credit method. The Company's net obligations in respect of such plans is calculated by estimating the amount of future benefit that the employees have earned in return for their services and the current and prior periods that benefit is discounted to determine its brsent value and the fair value of the plan asset is deducted. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.

The company's contribution to the Provident Fund Trust as established by the Company, is also considered as a Defined Benefit Plan because, as per the rules of Company's Provident Fund Scheme, 1952, if the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. The Company's net obligations in respect of such plans is calculated by estimating the amount of future benefit that the employees have earned in return for their services and the current and prior periods that benefit is discounted to determine its brsent value and the fair value of the plan asset is deducted. Any actuarial losses are recognised immediately in the Statement of Profit and Loss.

Terminal Benefits: All terminal benefits including voluntary retirement compensation are fully written off to the Statement of Profit & Loss

Incentive Plans: The Company has a scheme of Performance Linked Variable Remuneration (PLVR) which is fully written off to the Statement of Profit & Loss. The Scheme rewards its employees based on Economic Value Addition (EVA), which is related to actual improvement made in EVA over the brvious period when compared with expected improvements.

15 Forward exchange contracts - Hedging

The company uses forward exchange contracts to hedge it's foreign exchange exposures and commodity futures contracts to hedge the exposure to oil price risks. Gains or losses on settled contracts is recognized in the statement of profit and loss. Futures contracts not settled as on the Balance Sheet date are marked to market and losses, if any, are recognized in the statement of profit and loss, whereas, the unrealized profit is ignored. Gains or losses on the commodity futures contracts is recorded in the statement of profit & loss under cost of materials consumed.

16 Foreign currency Transactions & Balances

Transactions in foreign currency are recorded at the exchange rates brvailing on the date of the transaction. Assets and liabilities related to foreign currency transactions, remaining unsettled at the end of the period, are translated at the exchange rates at the end of the period. Forward exchange contracts, remaining unsettled at the end of the period, backed by underlying assets or liabilities are also translated at the exchange rates at the end of the period. The brmium payable on foreign exchange contracts is amortised over the period of the contract. Exchange gains / losses are recognised in the Statement of Profit and Loss.

17 Income Tax

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. The tax effect is calculated on the accumulated timing difference at the end of the period, based on the tax rates and laws enacted or substantially enacted on the balance sheet date.

Tax expenses comprises both current and deferred tax. Current tax is the amount of tax payable on the assessable income for the year determined in accordance with the provisions of the Income-Tax Act, 1961.

18 Proposed Dividend

Proposed Dividend if any, subject to share holders approval at the Annual General Meeting, is provided in the books.

19 Earning per Share

The basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period, except where the results would be anti-dilutive.

20 Segment Reporting

The Accounting Policies adopted for segment reporting are in line with the accounting Policies of the Company. Segment assets include all operating assets used by the business segments and consists principally of fixed assets, debtors and inventories. Segment liabilities include the operating liabilities that result from the operating activities of the business. Segment assets and liabilities that cannot be allocated between the segments are shown as part of unallocated corporate assets and liabilities respectively. Income/Expenses relating to the enterprise as a whole and not allocable on a reasonable basis to business segments are reflected as unallocated corporate income/ expenses.

Godrej Agrovet Ltd. ("the Company") is a public limited company, which is domiciled and incorporated in the Republic of India. The Company, an erstwhile division of  Godrej Soaps limited was incorporated under the Companies Act, 1956 on November 25, 1991. The Company is a diversified agribusiness company and its principal activities include manufacturing and marketing of high quality animal feed, innovative agricultural inputs and palm oil & allied products.

Contribution to Gratuity Fund

The Company makes annual contributions to the Employees' Group Gratuity-cum-Life Assurance Scheme of ICICI Prudential Ltd, a funded defined benefit plan for qualifying employees. Gratuity is payable to all eligible employees on superannuation, death or on separation/termination in terms of the provisions of the Payment of Gratuity Act or as per the Company's policy whichever is beneficial to the employees.

Rs. in Lac

Particulars	Current Year	Previous Year
(a) Change in Present Value of Obligation
Present value of the obligation at the beginning of the year	802.68	621.75
Current Service Cost	60.46	49.6
Interest Cost	66.22	52.84
Actuarial (Gain) / Loss on Obligation	23.96	148.99
Benefits Paid	(79.18)	(70.5)
Present value of the obligation at the end of the year	874.14	802.68
(b) Change in Plan Assets
Fair value of Plan Assets at the beginning of the year	568.2	430.44
Expected return on Plan Assets	49.43	36.58
Fund Transfer In	-	-
Actuarial Gain / (Loss) on Plan Assets	9.81	(19.63)
Contributions	235	191.31
Benefits Paid	(79.18)	(70.5)
Fair value of Plan Assets at the end of the year	783.26	568.2
(c) Amounts Recognised in the Balance Sheet:
Present value of Obligation at the end of the year	874.14	802.68
Unrecognised Past Service Cost	-	-
Fair value of Plan Assets at the end of the year	783.26	568.2
Net Obligation at the end of the year	90.88	234.48
(d) Net gratuity cost for the year
Current Service Cost	60.46	49.6
Interest cost on Obligation	66.22	52.84
Expected return on Plan Assets	(49.43)	(36.58)
Expected return on Reimbursement Right recognised as an asset	-	-
Net Actuarial (Gain) / Loss recognised in the year	14.14	168.62
Past Service Cost	-	-
Effect of Curtailment or Settlement	-	-
Net gratuity cost	91.39	234.48
(e) Actuarial Assumptions
Discount Rate	9.33%	8.25%
Expected Rate of Return on Plan Assets	9.33%	8.70%
Salary Escalation Rate	5.00%	5.00%

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

The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets.

(i) Information about Primary business Segments For the year ended March 31, 2014

Rs. in Lac

Particulars	Animal Feed	Vegetable Oil	Agri	Other Business	Unallocated	Total
Total Sales	255,066.14	35,913.49	31,549.97	1,470.47		324,000.07
Result
Segment Result	14,685.49	6,629.21	6,074.07	(142.32)		27,246.45
Unallocated expenditure net of unallocated income					(7,191.44)	(7,191.44)
Interest expenses					(785.77)	(785.77)
Interest Income					361.81	361.81
Dividend Income and Profit on sale of Investments					89.26	89.26
Profit before taxation	14,685.49	6,629.21	6,074.07	(142.32)	(7,526.13)	19,720.32
Provision for taxation					5,333.71	5,333.71
Profit after taxation and before exceptional items	8,620.91	4,280.70	5,357.68	144.38	(9,280.93)	8,766.99
Profit after taxation	14,685.49	6,629.21	6,074.07	(142.32)	(12,859.84)	14,386.61
Other Information
Segment assets	68,406.15	20,696.17	16,630.57	2,907.97	42,903.06	151,543.92
Segment liabilities	65,946.44	1,782.85	8,714.74	114.15	30,373.75	106,931.92
Capital expenditure	12,898.39	2,945.26	946.86	130.63	1,257.39	18,178.53
Debrciation	1,174.78	912.58	53.60	167.21	298.28	2,606.44

(ii) Information about Secondary Segments

Revenue by geographical segment	India	Outside India	Total
Total Sales	323,066.04	934.03	324,000.07

(1) The company is organized into three main business segments, namely

(a) Animal Feeds - comprising of compound feed for cattle, poultry, aqua etc.

(b) Vegetable Oils business - comprising of Oil palm, Cotton Seed Oil Business and its allied products.

(c) Agri-business - comprising of plant growth promoters, pesticides etc.

(d) Other Business Segment includes, Tissue Culture Business, Pure Line Grand Parent Poultry Business & Energy Generation through Windmill Business Segment have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organisation structure, and the internal financing reporting systems.

(2) The Segment revenue in each of the above business segments consists of sales (net of returns, sales tax, rebates etc.)

(3) The Segment revenue in the geographical segments considered for disclosure are as follows :

(a) Revenue within India includes sales to customers located within India

(b) Revenue outside India includes sales to customers located outside India

(4) Segment Revenue, Results, Assets and liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

(i) Information about Primary business Segments (For the Previous Year) For the year ended March 31, 2013

Rs. in Lac

Particulars	Animal  Feeds	Vegetable Oil	Agri	Other  Business	Unallocated	Total
Total Sales	232,258.13	27,513.38	24,149.30	1,309.67		285,230.49
Result
Segment Result	12,379.42	5,406.20	4,519.88	(400.65)		21,904.85
Unallocated expenditure net of unallocated income					(5,916.89)	(5,916.89)
Interest expenses					(2,311.71)	(2,311.71)
Interest Income					340.87	340.87
Dividend Income and Profit on sale of Investments					75.77	75.77
Profit before taxation	12,379.42	5,406.20	4,519.88	(400.65)	(7,811.97)	14,092.88
Provision for taxation					4,076.99	4,076.99
Profit after taxation and before exceptional items	8,620.91	4,280.70	5,357.68	144.38	(9,280.93)	8,766.99
Profit after taxation	12,379.42	5,406.20	4,519.88	(400.65)	(11,888.96)	10,015.89
Other Information
Segment assets	53,025.65	18,143.45	13,587.04	2,798.36	32,766.58	120,321.07
Segment liabilities	49,776.32	2,486.64	4,989.61	70.54	24,364.67	81,687.77
Capital expenditure	8,128.03	3,981.10	51.75	43.18	4,838.34	17,042.40
Debrciation	798.79	684.43	31.47	170.34	186.36	1,871.39

(ii) Information about Secondary business Segments (For the Previous Year)

Revenue by geographical segment	India	Outside India	Total
Total Sales	284,495.56	734.93	285,230.49