INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GODREJ AGROVET LIMITED Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of GODREJ AGROVET LIMITED (hereinafter referred to as “the Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) its associates and jointly controlled entities, comprising of the Consolidated Balance Sheet as at March 31, 2016, the Consolidated Statement of Profit and Loss, the Consolidated Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”). Management’s Responsibility for the Consolidated Financial Statements The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as “the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group including its associates and jointly controlled entities in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The respective Board of Directors of the companies included in the Group and of its associates and jointly controlled entities are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid. Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph (a) to (d) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group, its associates and jointly controlled entities as at March 31, 2016, and their consolidated profit and their consolidated cash flows for the year ended on that date. Emphasis of Matters We draw attention to the following matters in the Notes to the consolidated financial statements: a) Note 37 to the consolidated financial statements where in Honourable High Court of Judicature at Bombay has approved a Scheme of Arrangement whereby the assets and liabilities of Seeds business of the transferor company (Godrej Seeds & Genetics Limited) have been taken over and record at their book values as on April 01, 2015 by the Holding Company. i. In accordance with the Scheme of Arrangement an amount of Rs. 1,694.46 lac on account of Goodwill has been charged to the surplus in Statement of Profit & Loss instead of amortising the same in the Statement of Profit & Loss over a period of ten years. Had the scheme not prescribed this treatment, the profit for the year would have been lower by Rs. 169.45 lac, the Goodwill would have been higher by Rs. 1,525.01 lac (net written down value) and the Surplus in the Statement of Profit & Loss would have been higher by Rs. 1,525.01 lac. ii. The cost and expenses arising out of or incurred in carrying out and implementing the scheme amounting to Rs. 19.38 lac have been directly charged against the Surplus in Statement of Profit & Loss of the Holding Company. Had this amount been charged to the Statement of Profit and Loss, the profit for the year would have been lower by Rs. 19.38 lac. b) Note 38 to the consolidated financial statements, wherein the order passed by the Honourable High Court of Judicature at Bombay had approved a Scheme of Arrangement whereby the assets and liabilities of the transferor company (Goldmuhor Agrochem & Feeds Limited) have been taken over and recorded at their book values as on October 01, 2013 by the Holding Company. i. In accordance with the Scheme of Arrangement an amount of Rs. 71.11 lac on account of Goodwill on Merger has been charged to the General Reserve Account instead of amortising the same in the Statement of Profit & Loss over a period of ten years. Had the scheme not prescribed this treatment, the profit for the year would have been lower by Rs. 7.11 lac, the Goodwill would have been higher by Rs. 53.33 lac (net written down value) and the General Reserve would have been higher by Rs. 71.11 lac. ii. The cost and expenses arising out of or incurred in carrying out and implementing the scheme amounting to Rs. 40.73 lac have been directly charged against the balance in the General Reserve Account of the Holding Company. Had this amount been charged to the Statement of Profit and Loss, the Surplus in Statement of Profit and Loss would have been lower and the General Reserve Account would have been higher by Rs. 40.73 lac. iii. An amount of Rs. 2,000.00 lac has been transferred from the General Reserve Account and used to increase the Reserve for Employee Compensation Expenses. Had the scheme not prescribed this treatment the balance in the General Reserve Account would have been higher and the balance in the Reserve for Employee Compensation Expenses would have been lower by Rs. 2,000.00 lac c) Note 39 to the consolidated financial statement, wherein the Honorable High Court of Judicature at Bombay had approved as Scheme of Arrangement whereby the assets and liabilities of the transferor company (Golden Feed Products Limited) have been taken over and recorded at their book values as on March 31, 2014 by the Holding Company. In accordance with the Scheme of Arrangement an amount of Rs. 97.06 lac on account of Goodwill on Merger has been charged against the balance in the Surplus in Statement of Profit and Loss instead of amortising the same in the Statement of Profit and Loss over a period of ten years. Had the scheme not prescribed this treatment, the profit for the year would have been lower by Rs. 9.71 lac, the Goodwill would have been higher by Rs. 77.65 lac (net written down value) and the balance in the Surplus in Statement of Profit and Loss would have been higher by Rs. 77.65 lac. d) Note 40 to the consolidated financial statement, wherein the Honorable High Court of the Judicature at Bombay had approved a Scheme of Arrangement whereby the assets and liabilities of the transferor companies (Godrej Oil Palm Limited, Godrej Gokarna Oil Palm Limited and Cauvery Palm Oil Limited) have been taken over and recorded at their book values as on April 1, 2011 by the Holding Company. i. Amortisation amounting to Rs 425.12 lac on Intangible Assets taken over as per the Scheme is charged against the balance in the General Reserve Account of the Company in the current year and Rs. 1,700.47 lac in the previous years. Had this amount been charged to the Statement of Profit and Loss, the profit for the year would have been lower by Rs. 425.12 lac, the opening balance in the Surplus in statement of Profit and Loss would have been lower by Rs. 1,700.47 lac and the balance in the general reserve would have been higher by Rs.