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

2 Basis of preparation

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

3. Contingent liabilities

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

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

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

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

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

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

5. Capital and other commitments

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

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

6. Government grants / subsidy

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

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

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

8(i) Employees stock option plan (ESOP)

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

a Employees stock option and share plan 2006

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

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

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

9. Segment information

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

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

Enterprises having significant influence

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

Key managerial person

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

10. Details of employee benefits

(i) Defined benefit plan-gratuity

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

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

(ii) Defined contribution plan

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

11. Operating leases

Company as lessee (Lease payments)

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

Company as lessor (Lease receipts)

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

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

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