Home  »  Company  »  BASF India Lt  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of BASF India Ltd.

Mar 31, 2016

1. Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided (net of advances) for Rs. 536.7 million (Previous Year Rs. 836.0 million).

2. Operating lease:

The Company has taken vehicles and office facilities under operating leases.

(a) Total minimum lease payments in respect of non cancellable leases are as follows:

(b) Lease rent of Rs. 580.3 million (Previous Year Rs. 508.2 million) towards cancellable and non cancellable leases has been included under "Rent" in the Statement of Profit and Loss.

3. Micro, Small and Medium Enterprises Development Act, 2006:

On the basis of information and records available with the Management, the following disclosure pursuant to the above Act are made for the amounts due to the Micro and Small enterprises, who have registered with the competent authorities:

4. Exceptional item:

During the current year, the Company has sold its non-core assets (i.e. residential properties) and has recognized profit of Rs. 820.6 million (Previous Year Rs. 291.9 million) which is being disclosed as an exceptional item.

During the current year, the Company has divested its textile chemical business pursuant to global divestment of textile business and has recognised profit of Rs. 900.5 million (Previous Year Rs. Nil) which is being disclosed as an exceptional item.

5. Employees benefits:

Defined contribution plans:

Company''s contribution to defined contribution funds amounting to Rs. 53.1 million (Previous year Rs. 98.5 million) has been charged to the Statement of Profit and Loss.

Defined benefit plans and other long term employee benefits:

Gratuity is payable to all eligible employees of the Company on superannuation, death, permanent disablement and resignation in terms of provisions of the Payment of Gratuity Act, 1972, or as per the Company''s scheme whichever is more beneficial. The Company irrevocably contributes funds to a separate Gratuity Trust which is recognised by Income Tax authorities.

Eligible employees can carry forward and encash leave on superannuation, death, permanent disablement and resignation as per Company''s policy.

Long Service Awards are payable to employees on completion of specified years of service.

The expected rate of return on assets is based on the expectation of the average long term rate of return on investment of the fund, during the estimated term of obligation.

The obligations are measured at the present value of estimated future cash flows by using a discount rate that is determined with reference to the market yields at the Balance Sheet date on Government Bonds which is consistent with the estimated terms of the obligation.

The estimate of future salary increase, considered in the actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

Provident fund

The Company has an obligation to fund any shortfall on the yield of the Company''s Trust investments over the administered interest rates on an annual basis. These administered rates are notified by the Government annually. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities. The actuary has accordingly provided a valuation based on the below provided assumptions and there is no shortfall as at 31 March 2016.

6. Segment Information:

(a) PRIMARY SEGMENT INFORMATION (by Business Segments) The previous year''s figures are given in light type below each item

7. Related Party Disclosure:

(a) Parties where control exists

BASF Societas Europaea (''SE'') Ultimate holding company

(b) Other related parties with whom transactions have taken place during the year Fellow Subsidiaries

BASF (China) Company Ltd.

BASF PLC

BASF (Malaysia) SDN. BHD.

BASF (Thai) Limited

BASF Advanced Chemicals Co. Ltd. (Formerly known as BASF Auxiliary)

BASF Agro B.V. Arnhem (NL)

BASF Agrochemical Products B.V.

BASF Antwerpen N.V.

BASF Asia-Pacific Service Centre SDN. BHD.

BASF Australia Ltd.

BASF Bangladesh Ltd.

BASF Belgium Coordination Center Comm. V.

BASF Business Services GmbH

BASF Business Services Holding GmbH

BASF Canada Inc.

BASF Care Chemicals (Shanghai) Company Ltd.

BASF Catalysts India Pvt. Ltd.

BASF Chemcat (Thailand) Ltd.

BASF Chemicals & Polymers Pakistan (Private) Ltd.

BASF Chemicals Co. Ltd.

BASF Chemicals India Pvt. Ltd.

BASF Chile SA

BASF Coatings GmbH

BASF Coatings Ltd.

BASF Coatings S.A.

BASF Coatings S.A.S.

BASF Coatings S.P.A.

BASF Company Ltd.

BASF Construction Chemical (China) Co. Ltd.

BASF Construction Chemicals Egypt S

BASF Construction Chemicals Espana S.L.

BASF Construction Chemicals Europe AG

BASF Construction Chemicals GmbH

BASF Construction Polymers GmbH

BASF Construction Solutions GmbH

BASF Construction Systems (China). Co. Ltd.

BASF Hock Mining Chemical (China) Co. Ltd.

BASF Hong Kong Ltd.

BASF Intertrade (Shanghai) Co. Ltd.

BASF Intertrade AG

BASF Italia S.P.A.

BASF Japan Ltd.

BASF Kanoo Gulf FZE

BASF Lanka (Private) Limited

BASF Metals Ltd.

BASF Mexicana S.A. DE C.V.

BASF Nederland B.V.

BASF New Zealand Ltd.

BASF Pakistan (Private) Ltd.

BASF Paper Chemicals (Huizhou) Co. Ltd.

BASF Performance Products Limited

BASF Personal Care and Nutrition GmbH

BASF Petronas Chemicals SDN. BHD.

BASF Pharma (Evionnaz) SA

BASF Philippines Inc.

BASF Plant Science Company GmbH

BASF Poliuretani Italia S.P.A.

BASF Poliurtanos Ltda

BASF Polyurethane Specialties (China) Co. Ltd.

BASF Polyurethanes (China) Co. Ltd.

BASF Polyurethanes GmbH

BASF Polyurethanes Licencing GmbH

BASF Poliuretanos Ltd.

BASF S.A.

BASF Schweiz AG

BASF Schwarzheide GmbH

BASF Shanghai Coatings Co. Ltd.

BASF South Africa (PTY) Ltd.

BASF South East Asia Pte. Ltd.

BASF Taiwan Ltd.

BASF Türk Kimya Sanayi

BASF Vietnam Co. Ltd.

BASF Corporation

BASF East Asia Regional Headquarters Ltd.

BASF Espanola S.L.

BASF France S.A.S.

BASF Grenzach GmbH

P.T. BASF Indonesia

P.T. BASF Care Chemicals Indonesia

Shanghai BASF Polyurethane Co. Ltd.

Shanghai Gaoqiao-BASF

Shanghai MBT & SCG High-tech Construction Chemicals Co. Ltd.

BTC Speciality Chemicals

Cognis IP Management GmbH

Construction Research & Technology GmbH

K S Kali GmbH

PCI Augsburg GmbH

Styrolution India Private Limited (till 17th November 2014)

Styrolution ABS (India) Limited (till 17th November 2014)

Thai Ethoxylate Co. Ltd.

Watson Bowman ACME Corp.

(c) Key management personnel

Chairman & Managing Director

Mr. Raman Ramachandran, Ph.D.

Whole – Time Directors

Mr. Narendranath J. Baliga (w.e.f. 1st January 2015)

Mr. Rajesh Naik (w.e.f. 1st August 2014)

Mr. Thilo Bischoff (till 30th April 2014)

Mr. S. Regunathan (till 31st December 2014)

Dr. G. Ramaseshan (till 31st July 2014)

8. Transfer pricing regulations:

The management is of the opinion that the Company''s international and domestic transactions are at an arm''s length so that aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

9. Corporate Social Responsibility (''CSR''):

As per Section 135 of the Act, a Company meeting the applicability threshold, needs to spend atleast 2% of its average net profit for the immediately preceding three financial years on CSR activities. The major areas for CSR activities are promoting education facilities, sanitation and making available safe drinking water. A CSR committee has been formed by the Company as per the Act.

(a) Gross amount required to be spent by the Company during the year: Rs. 18 million

(b) The areas of CSR activities and contributions made thereto are as follows:


Mar 31, 2015

The above cash flow statement has been prepared under the "Indirect Method" as set out in the Accounting Standard-3 on Cash Flow Statement.

The accompanying notes form an integral part of the financial statements.

Rs. in million Nature 2014-15 2013-14

Contingent Liabilities not Provided for

(a) Claim against the Company not acknowledged as debt 44.9 38.8

In respect of which the Company has counterclaim 68.7 68.7

(b) Demand for taxes and duties in respect of which the company has preferred appeals with appropriate authority

a. Income Tax 482.6 406.7

b. Customs, Excise, Service Tax and Sales Tax 1,053.1 240.0

Commercial taxes department has issued demand notices amounting to Rs. 865.0 Million (excludes interest and penalty) (Previous Year Rs. 91.9 Million) for the periods July 2006 - March 2007, July 2007 - March 2008, FY 08-09, FY 09-10 and periods February 2011 to March 2011 by treating 100% of the stock transfers as interstate sales to unregistered dealers.

The Company has filed/ is in the process of filing appeals against the aforesaid demand notices with the Honorable Karnataka Appellate Tribunal. The amount in respect of other periods, if any, are currently not determinable.

The Company, on the basis of legal opinions, does not consider these stock transfers as interstate sales.

The Honorable Karnataka Appellate Tribunal has set aside and remanded back the impugned reassessment orders for the period April 2006 to June 2006 and April 2007 to June 2007 aggregating to Rs. 91.9 Million for fresh assessment to lower authorities.

(b) Lease rent of Rs. 508.2 million (Previous Year Rs. 486.8 million) towards cancellable and non cancellable leases has been included under "Rent" in the Statement of Profit and Loss.

2. Micro, Small and Medium Enterprises Development Act, 2006

On the basis of information and records available with the Management, the following disclosure pursuant to the above Act are made for the amounts due to the Micro and Small enterprises, who have registered with the competent authorities:

3. Exceptional item

During the current year, the Company has sold its non-core assets (i.e. residential properties) and accordingly it has recognized a profit of Rs. 291.9 million which is being disclosed as an exceptional item.

During the previous year, the Company had declared voluntary retirement scheme for the Thane site and accordingly compensation aggregating Rs. 104.3 million had been paid and disclosed as an exceptional item.

4. Employees benefits:

Defined contribution plans:

Company's contribution to defined contribution funds amounting to Rs. 98.5 million (Previous year Rs. 113.6 million) has been charged to the Statement of Profit and Loss.

Defined benefit plans and other long term employee benefits:

Gratuity is payable to all eligible employees of the Company on superannuation, death, permanent disablement and resignation in terms of provisions of the Payment of Gratuity Act, 1972, or as per the Company's scheme whichever is more beneficial. The Company irrevocably contributes funds to a separate Gratuity Trust which is recognised by Income Tax authorities.

Eligible employees can carry forward and encash leave on superannuation, death, permanent disablement and resignation as per Company's policy.

Long Service Awards are payable to employees on completion of specified years of service.

The contribution expected to be made by the Company during the Financial Year 2015-16 is Rs. 61.7 million (2014-15 Rs. 127.1 million).

The plan assets under the Gratuity scheme are deposited under approved securities. The major categories of plan assets as a percentage of total plan assets are provided below:

The expected rate of return on assets is based on the expectation of the average long term rate of return on investment of the fund, during the estimated term of obligation.

The obligations are measured at the present value of estimated future cash flows by using a discount rate that is determined with reference to the market yields at the Balance Sheet date on Government Bonds which is consistent with the estimated terms of the obligation.

The estimate of future salary increase, considered in the actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

Provident fund

The Company has an obligation to fund any shortfall on the yield of the Company's Trust investments over the administered interest rates on an annual basis. These administered rates are notified by the Government annually. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities. The actuary has accordingly provided a valuation based on the below provided assumptions and there is no shortfall as at 31 March 2015.

The details of fund and plan assets position as at 31 March is given below:

During the year ended 31st March 2015, amount recognised in the statement of profit and loss for Employee provident fund is Rs. 125.1 million (Previous year Rs. 103.7 million).

5. Segment Information

(a) PRIMARY SEGMENT INFORMATION (by Business Segments)

The previous year's figures are given in light type below each item

Notes on Segment Information:

1. Segments have been identified in accordance with the Accounting Standard on Segment Reporting (AS-17).

Business Segments have been considered as primary segments.

2. Details of type of products included in each segment —

— Agricultural Solution - includes Agrochemicals. Agricultural Solution is seasonal in nature.

— Performance Products - includes Tanning agents, Leather Chemicals, Textile Chemicals, Dispersion Chemicals, Speciality Chemicals and high-value fine chemicals for the food, pharmaceuticals, animal feed and cosmetics industries. Speciality chemicals include additives, water treatment and paper treatment, home and fabric care chemicals.

— Chemicals - includes Monomers, Intermediates and Petrochemicals.

— Functional Materials & Solutions - includes Catalysts, Coatings, Construction chemicals, Polyurethanes system and Engineering plastics.

— Others - includes technical and service charges other than those specifically identifiable to above segments.

3. Un-allocable Corporate Assets mainly include advance tax (net of provisions) and cash and bank balances.

4. Un-allocable Corporate Liabilities mainly include Net deferred tax liabilities, proposed dividend, short term

loan and other un-allocable liabilities.

6. Related Party Disclosure

(a) Parties where control exists

BASF Societas Europaea ('SE') Ultimate holding company

(b) Other related parties with whom transactions have taken place during the year Fellow Subsidiaries

BASF Advanced Chemicals Co., Ltd.

(Formerly known as BASF Auxiliary)

BASF Agro B.V Arnhem (NL)

BASF Agrochemical Products B.V.

BASF Antwerpen N.V.

BASF Asia-Pacific Service Centre Sdn. Bhd.

BASF Australia Ltd.

BASF Bangladesh Ltd.

BASF Belgium Coordination Center Comm. V.

BASF Business Services Holding GmbH

BASF Business Services GmbH

BASF Canada Inc.

BASF Care Chemicals (Shanghai) Company Ltd.

BASF Catalysts India Pvt. Ltd.

BASF Chemicals & Polymers Pakistan (Private) Ltd.

BASF Chemicals India Pvt. Ltd. (Earlier known as Cognis Specialty Chemicals (India) Pvt. Ltd.)

BASF Chemcat (Thailand) Ltd.

BASF (China) Company Ltd.

BASF Coatings GmbH BASF Coatings Ltd.

BASF Coatings S.A.

BASF Coatings S.A.S.

BASF Coatings Spa BASF Company Ltd.

BASF Construction Chemical (China) Co., Ltd.

BASF Construction Chemicals (UK) Ltd.

BASF Construction Chemicals Espana S.L.

BASF Construction Chemicals Europe AG

BASF Construction Chemicals GmbH

BASF Construction Chemicals Italia Spa

BASF Construction Polymers GmbH

BASF Construction Systems (China) Co. Ltd.

BASF Corporation

BASF Construction Solutions GmbH

BASF East Asia Regional Headquarters Ltd.

BASF Espanola S.L.

BASF FRANCE S.A.S.

BASF Grenzach GmbH

BASF Pakistan (Private) Ltd.

BASF Paper Chemicals (Jiangsu) Co., Ltd.

BASF Paper Chemicals (Huizhou)

BASF Performance Products Limited

BASF Personal Care and Nutrition GmbH

BASF Petronas Chemicals Sdn. Bhd.

BASF Pharma (Evionnaz) SA BASF Philippines Inc

BASF Plant Science Company GmbH BASF PLC

BASF Poliuretani Italia SpA

BASF Polyurethane Licensing GmbH

BASF Poliurtanos Ltda

BASF Polyurethane Specialties (China) Co., Ltd.

BASF Polyurethanes (China) Co. Ltd.

BASF Polyurethanes GmbH

BASF Qingdao Pigments Co., Ltd.

BASF S.A.

BASF Schwarzheide GmbH

BASF Schweiz AG

BASF Shanghai Coatings Co. Ltd.

BASF South Africa (PTY) Ltd.

BASF South East Asia Pte. Ltd.

BASF Taiwan Ltd.

BASF (Thai) Limited

BASF Turk Kimya Sanayi BASF UK Ltd.

BASF Vietnam Co. Ltd.

BASF Vitamins Company Limited

BASF Yapi Kimyasallari SAN. A.S.

BASF - YPC Company Limited BTC Europe GmbH

Construction Research & Technology GmbH

Cognis IP Management GMBH

Inge Gmbh

K S Kali GmbH

OOO BASF

BASF Hong Kong Ltd.

BASF Intertrade (Shanghai) Co. Ltd.

BASF Italia Spa BASF Japan Ltd.

BASF Kanoo Gulf FZE

BASF Lanka (Private) Limited BASF LLC

BASF Mexicana S.A. DE C.V.

BASF (MALAYSIA) SDN. BHD.

BASF Nederland B.V.

BASF Oy

P.T. BASF Care Chemicals Indonesia P.T.

BASF Indonesia PCI Augsburg GmbH

Shanghai MBT & SCG High-tech Construction Chemicals Co. Ltd.

Shanghai BASF Polyurethane Co., Ltd.

Shanghai Gaoqiao-BASF

Styrolution India Private Limited

Styrolution South East Asia Pte. Ltd.

Styrolution ABS (India) Limited

Thai Ethoxylate Co., Ltd.

Watson Bowman ACME Corp

BASF Construction Chemicals UAE LLC

(c) Key management personnel

Chairman & Managing Director

Mr. Prasad Chandran (till 30th Sept 2013)

Mr. Raman Ramachandran, Ph.D. (from 1st Oct 2013)

Whole - Time Directors

Mr. S. Regunathan (till 31st December 2014)

Mr. N. Baliga (w.e.f. 1st January 2015)

Dr. G. Ramaseshan (till 31st July 2014)

Mr. R. Naik (w.e.f. 1st August 2014)

Mr. Thilo Bischoff (till 30th April 2014)

The above remuneration excludes provision for gratuity, leave encashment and long service award which is provided on an overall basis for the Company.

The Company has paid the above remuneration to the Directors as per the terms of their respective service contracts with the Company which were approved by the Board of Directors and shareholders. In view of inadequacy of profits in the current financial year, pursuant to provisions of Section 197 read with Section II of Part II of Schedule V of the Companies Act, 2013, the Company has made an application to the Central Government for payment of the excess remuneration amounting to Rs. 19.8 million to the said Directors, which is pending approval.

The terms of appointment of Mr. Narendranath J. Baliga as Wholetime Director is subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company and the Central Government.

7. Transfer pricing regulations:

The management is of the opinion that the Company's international and domestic transactions are at an arms length so that aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

8. Foreign currency exposure details:

The Company uses forward exchange contracts for the purposes of covering its foreign currency exposure:


Mar 31, 2014

1. Contingent Liabilities

Rs. in million

Nature 2013-14 2012-13

Contingent Liabilities not Provided for

(a) Claim against the Company not acknowledged as debt 38.8 24.1

In respect of which the Company has counterclaim 68.7 68.7

(b) Demand for taxes and duties in respect of which the company has preferred appeals with appropriate authority

a. Income Tax 406.7 262.8

b. Customs, Excise, Service Tax and Sales Tax* 240.0 174.8

* Commercial taxes department has issued demand notices amounting to Rs. 36.0 million and Rs. 55.9 million (excludes interest and penalty) for the period Apr 06-June 06 and Apr 07-June 07 respectively by treating 100% of the stock transfers as interstate sales to unregistered dealer. The amounts in respect of subsequent periods, if any, are currently not determinable. The Company is in the process of filing an appeal against the aforesaid demand notices. The Company, on the basis of a legal opinion, does not consider these stock transfer as interstate sales.

2. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided (net of advances) for Rs. 676.7 million (Previous Year Rs. 3,365.3 million).

3. Operating lease

The Company has taken vehicles and office facilities under operating leases.

4. Micro, Small and Medium Enterprises Development Act, 2006

On the basis of information and records available with the Management, the following disclosure pursuant to the above Act are made for the amounts due to the Micro and Small enterprises, who have registered with the competent authorities:

5. Exceptional item

The Board of Directors on 18 September 2012 approved the proposal to shut down the Expandable Polystyrene business forming part of "Plastics" segment including the Company''s Styropor® production facility at Thane. The Company has made a provision towards impairment of Rs. 95.4 million (based on estimated salvage value) in respect of the net fixed assets (mainly plant and machinery) related to this business which is forming part of exceptional item in the Statement of Profit and Loss in the previous year.

During the current year the Company had declared voluntary retirement scheme for the Thane site and accordingly compensation aggregating Rs. 104.3 million had been paid and disclosed as an exceptional item.

6. Employees benefits:

Defined contribution plans:

Company''s contribution to defined contribution funds amounting to Rs. 113.6 million (Previous Year Rs. 95.8 million) has been charged to the Statement of Profit and Loss.

Defined benefit plans and other long term employee benefits:

Gratuity is payable to all eligible employees of the Company on superannuation, death, permanent disablement and resignation in terms of provisions of the Payment of Gratuity Act, 1972, or as per the Company''s scheme whichever is more beneficial. The Company irrevocably contributes funds to a separate Gratuity Trust which is recognised by Income Tax authorities.

Eligible employees can carry forward and encash leave on superannuation, death, permanent disablement and resignation as per Company''s policy.

Long Service Awards are payable to employees on completion of specified years of service.

The expected rate of return on assets is based on the expectation of the average long term rate of return on investment of the fund, during the estimated term of obligation.

The obligations are measured at the present value of estimated future cash flows by using a discount rate that is determined with reference to the market yields at the Balance Sheet date on Government Bonds which is consistent with the estimated terms of the obligation.

The estimate of future salary increase, considered in the actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

Provident fund

The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the administered interest rates on an annual basis. These administered rates are notified by the Government annually. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities. The actuary has accordingly provided a valuation based on the below provided assumptions and there is no shortfall as at 31 March, 2014.

Notes on Segment Information:

1. The Company had reorganised its segment structure with effect from 1st April, 2013 to better align to market needs. Accordingly, the Plastic Segment has ceased to exist. Functional Solution Segment has now been renamed as Functional Materials and Solution. This segment includes Styropor, part of Engineering Plastics and part of Polyurethanes which were earlier in Plastic Segment. The remaining part of the earlier Plastic Segment are now included in the Chemicals Segment. Previous period segment figures are regrouped in accordance with revised segment structure.

2. Segments have been identified in accordance with the Accounting Standard on Segment Reporting (AS-17). Business Segments have been considered as primary segments.

3. Details of type of products included in each segment —

— Agricultural Solution - includes Agrochemicals. Agricultural Solution is seasonal in nature.

— Performance Producte-Tanning agents, Leather Chemicals, Textile Chemicals, Dispersion Chemicals, Speciality Chemicals and high-value fine chemicals for the food, pharmaceuticals, animal feed and cosmetics industries.

— Chemicals - Chemicals includes monomers, intermediates and petrochemicals.

— Functional Solutions - Functional Solutions includes catalysts, coatings, construction chemicals, styropor, polyurethanes system and engineering plastics.

— Others - includes technical and service charges.

4. Un-allocable Corporate Assets includes advance tax (net of provisions) and cash and bank balances.

5. Un-allocable Corporate Liabilities include Net deferred tax liabilities, proposed dividend, short term loan and other un-allocable liabilities.

7. Related Party Disclosure

(a) Parties where control exists

BASF Societas Europaea (''SE'') Ultimate holding company

(b) Other related parties with whom transactions have taken place during the year Fellow Subsidiaries

BASF A/S

BASF Agro B.V.

BASF Agro B.V. Arnhem (NL)

BASF Agrochemical Products B.V.

BASF Agricultural Specialties Pty Ltd.

BASF Antwerpen N.V.

BASF Asia-Pacific Service Centre Sdn. Bhd.

BASF Australia Ltd.

BASF Auxiliary Chemicals Company Ltd.

BASF Bangladesh Ltd.

BASF Beauty Care Solutions France S.A.S.

BASF Belgium Coordination Center Comm. V.

BASF Business Services Holding GmbH

BASF Canada Inc.

BASF Care Chemicals (Shanghai) Company Ltd.

BASF Catalysts India Pvt. Ltd.

BASF Chemicals & Polymers Pakistan (Private) Ltd

BASF Chemicals Company Ltd.

BASF Chemicals India Pvt. Ltd. (Earlier known as Cognis Specialty Chemicals Pvt. Ltd.

BASF Chemcat (Thailand) Ltd.

BASF (China) Company Ltd.

BASF Coatings GmbH

BASF Coatings Intl Trade (Shanghai) Co. Ltd.

BASF Coatings Intl Trade Co., Ltd.

BASF Coatings Ltd.

BASF Coatings S.A.

BASF Coatings S.A.S.

BASF Coatings Spa

BASF Color Solutions Germany GmbH

BASF Company Ltd.

BASF Construction Chemical (China) Co., Ltd.

BASF Construction Chemicals (UK) Ltd.

BASF Construction Chemicals Espana S.L.

BASF Construction Chemicals Europe AG

BASF Construction Chemicals France S.A.S.

BASF Construction Chemicals Italia Spa

BASF Mexicana S.A. DE C.V

BASF (MALAYSIA) SDN. BHD.

BASF Nederland B.V.

BASF Oy

BASF Pakistan (Private) Ltd.

BASF Paper Chemicals (Jiangsu) Co., Ltc

BASF Paper Chemicals (Huizhou)

BASF Performance Products pic

BASF Performance Products Limited

BASF Personal Care and Nutrition GmbH

BASF Peruana S.A.

BASF Petronas Chemicals Sdn. Bhd.

BASF Pharma (Evionnaz) SA

BASF Philippines Inc

BASF Plant Science Company GmbH

BASF PLC

BASF Poliuretani Italia SpA

BASF Polyurethane Licensing GmbH

BASF Polyurethane Specialties (China) C

BASF Polyurethanes (China) Co. Ltd

BASF Polyurethanes (Malaysia) Sdn. Bhd

BASF Polyurethanes (Thailand) Ltd.

BASF Polyurethanes GmbH

BASF Qingdao Pigments Co., Ltd.

BASF S.A.

BASF Schwarzheide GmbH

BASF Schweiz AG

BASF Shanghai Coatings Co. Ltd.

BASF Singapore Pte. Ltd.

BASF South Africa (PTY) Ltd.

BASF South East Asia Pte Ltd.

BASF Taiwan Ltd.

BASF (Thai) Limited

BASF UK Ltd.

BASF Vietnam Co. Ltd.

BASF Vitamins Company Limited

BASF Yapi Kimyasallari SAN. A.S.

BASF - YPC Company Limited

BASF Construction Chemicals UAE LLC

BASF Construction Polymers GmbH

BASF Construction Systems (China). Co. Ltd.

BASF Corporation

BASF Construction Solutions GmbH (Formerly known as BASF Construction Chemicals GmbH)

BASF East Asia Regional Headquarters Ltd.

BASF Espanola S.L.

BASF FZE

BASF Gao-Qiao Performance Chemicals (Shanghai) Co. Ltd.

BASF Grenzach GmbH

BASF Health and Care Products France S.A.S.

BASF Hong Kong Ltd.

BASF INOAC Polyurethanes Ltd.

BASF Intertrade (Shanghai) Co. Ltd.

BASF Iran (PJS) Company

BASF Italia Spa

BASF Japan Ltd.

BASF Kanoo Gulf FZE

BASF Kanoo Polyurethanes LLC

BASF Lanka (Private) Limited

BASF LLC

BTC Europe GmbH

Cognis Australia Pty Ltd.

Cognis Taiwan Ltd.

Construction Research & Technology GmbH

Elastogran Kanoo Polyurethane Systems LLC

Inge Gmbh

K S Aktiengesellschaft

K S Kali GmbH

RT. BASF Care Chemicals Indonesia

RT. BASF Indonesia

PCI Augsburg GmbH

PolyAd Services GmbH

Shanghai MBT & SCG High-tech Constructic Chemicals Co. Ltd.

Shanghai BASF Polyurethane Co., Ltd. Shanghai Gaoqiao-BASF Styrolution GmbH Styrolution India Private Limited Styrolution South East Asia Pte. Ltd. Styrolution ABS (India) Limited Watson Bowman ACME Corp

(c) Key management personnel Chairman & Managing Director

Mr. Prasad Chandran (till 30th Sept 2013)

Mr. Raman Ramachandran, Ph.D. (from 1st Oct 2013)

Whole -Time Directors

Mr. S. Regunathan Dr. G. Ramaseshan Mr. Thilo Bischoff

8. Transfer pricing regulations:

The management is of the opinion that the Company''s international and domestic transactions are at an arms length so that aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.


Mar 31, 2013

1. Contingent Liabilities

Rs. Mio. Nature 2012-13 2011-12

Contingent Liabilities not Provided for

(a) Claim against the Company not acknowledged as debt 24.1 22.2

In respect of which the Company has counterclaim 68.7 68.7

(b) Demand for taxes and duties in respect of which the company has preferred appeals with appropriate authority

a. Income Tax 262.8 18.4

b. Customs, Excise, Service Tax and Sales Tax 174.8 175.9

2. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided (net of advances) for Rs. 3,365.3 million (Previous Year Rs. 280.0 million).

3. Operating lease

The Company has taken vehicles and office facilities under operating leases.

(a) Total minimum lease payments in respect of non-cancellable leases are as follows:

(b) Lease rent of Rs. 418.1 million (Rs. 376.7 million) has been included under "Rent" in the Statement of Profit and Loss.

4. Micro, Small and Medium Enterprises Development Act, 2006

On the basis of information and records available with the Management, the following disclosure pursuant to the above Act are made for the amounts due to the Micro and Small enterprises, who have registered with the competant authorities:

5. Purchase of specialty chemicals business of BASF Chemicals India Private Limited (Formerly known as Cognis Specialty Chemicals Private Limited)

Pursuant to an Agreement entered into between BASF India Limited (''the Company'') and Cognis Specialty Chemicals Private Limited (''Cognis''), the specialty chemicals business of Cognis was acquired from 1st July 2011 for consideration of Rs. 134 Mio. The assets and liabilities of Cognis have been taken over at fair value as determined by an independent valuer and the difference between the fair value of the net assets purchased over the consideration paid aggregating to Rs. 68.8 Mio. has been accounted as Goodwill in the previous year.

6. Exceptional item

The Board of Directors on 18 September 2012 approved the proposal to shut down the Expandable Polystyrene business forming part of "Plastics" segment including the Company''s Styropor® production facility at Thane. The Company has made a provision towards impairment of Rs. 95.4 million (based on estimated salvage value) in respect of the net fixed assets (mainly plant and machinery) related to this business which is forming part of exceptional item in the Statement of Profit and Loss.

7. Employees benefits:

Defined contribution plans:

Company''s contribution to defined contribution funds amounting to Rs. 95.8 Mio. (Previous year Rs. 82.5 Mio.) has been charged to the Statement of Profit and Loss.

Defined benefit plans and other long term employee benefits:

Gratuity is payable to all eligible employees of the Company on superannuation, death, permanent disablement and resignation in terms of provisions of the Payment of Gratuity Act, 1972, or as per the Company''s scheme whichever is more beneficial. The Company irrevocably contributes funds to a separate Gratuity Trust which is recognised by Income Tax authorities.

Eligible employees can carry forward and encash leave on superannuation, death, permanent disablement and resignation as per Company''s policy.

8. Related Party Disclosure

(a) Parties where control exists

BASF Societas Europaea (''SE'') Ultimate holding company

(b) Other related parties with whom transactions have taken place during the year Fellow Subsidiaries

BASF - YPC Company Limited

BASF (China) Company Ltd.

BASF (Malaysia) Sdn. Bhd.

BASF (Thai) Limited

BASF A/S

BASF Agro B.V.

BASF Agro B.V. Arnhem (NL)

BASF Agrochemical Products B.V.

BASF Antwerpen N.V.

BASF Asia-Pacific Service Centre Sdn. Bhd.

BASF Australia Ltd.

BASF Auxiliary Chemicals Company Ltd.

BASF Bangladesh Ltd.

BASF Beauty Care Solutions France S.A.S.

BASF Belgium Coordination Center Comm. V.

BASF Canada Inc.

BASF Care Chemicals (Shanghai) Company Ltd.

BASF Catalysts India Pvt. Ltd.

BASF Chemicals & Polymers Pakistan (Private) Ltd.

BASF Chemicals Company Ltd.

BASF Chemicals India Pvt. Ltd. (Formerly known as Cognis Specialty Chemicals Pvt. Ltd.)

BASF Coatings GmbH

BASF Coatings Intl Trade (Shanghai) Co. Ltd.

BASF Coatings Intl Trade Co., Ltd.

BASF Coatings Ltd.

BASF Coatings S.A.

BASF Coatings S.A.S.

BASF Coatings Spa

BASF Kanoo Gulf FZE

BASF Kanoo Polyurethanes LLC

BASF Lanka (Private) Limited

BASF Mexicana S.A. DE C.V.

BASF Nederland B.V.

BASF Oy

BASF Pakistan (Private) Ltd.

BASF Paper Chemicals (Jiangsu) Co., Ltd.

BASF Performance Products plc

BASF Personal Care and Nutrition GmbH

BASF Peruana S.A.

BASF Petronas Chemicals Sdn. Bhd.

BASF Pharma (Evionnaz) SA

BASF Philippines Inc

BASF Plant Science Company GmbH

BASF PLC

BASF Poliuretani Italia SpA

BASF Polyurethane Licensing GmbH

BASF Polyurethane Specialties (China) Co., Ltd.

BASF Polyurethanes (China) Co. Ltd.

BASF Polyurethanes (Malaysia) Sdn. Bhd.

BASF Polyurethanes (Thailand) Ltd.

BASF Polyurethanes GmbH

BASF Qingdao Pigments Co., Ltd.

BASF S.A.

BASF Schweiz AG

BASF Shanghai Coatings Co. Ltd.

BASF Singapore Pte. Ltd.

BASF South Africa (PTY) Ltd.

BASF Color Solutions Germany GmbH

BASF Company Ltd.

BASF Construction Chemical (China) Co., Ltd.

BASF Construction Chemicals (UK) Ltd.

BASF Construction Chemicals Espana S.L.

BASF Construction Chemicals Europe AG

BASF Construction Chemicals France S.A.S.

BASF Construction Chemicals GmbH

BASF Construction Chemicals Italia Spa

BASF Construction Chemicals UAE LLC

BASF Construction Polymers GmbH

BASF Construction Systems (China) Co. Ltd.

BASF Corporation

BASF East Asia Regional Headquarters Ltd.

BASF Espanola S.L.

BASF FZE

BASF Gao-Qiao Performance Chemicals (Shanghai Co Ltd.)

BASF Grenzach GmbH

BASF Health and Care Products France S.A.S.

BASF Hong Kong Ltd.

BASF INOAC Polyurethanes Ltd.

BASF Intertrade (Shanghai) Co. Ltd.

BASF Iran (PJS) Company

BASF IT Services Holding GmbH

BASF Italia Spa

BASF South East Asia Pte Ltd.

BASF Taiwan Ltd.

BASF UK Ltd.

BASF Vietnam Co. Ltd.

BASF Vitamins Company Limited

BASF Yapi Kimyasallari SAN. A.S.

BTC Europe GmbH

BASF Japan Ltd.

Elastogran Kanoo Polyurethane Systems LLC

Cognis Australia Pty. Ltd.

Cognis Taiwan Ltd.

Construction Research & Technology GmbH

K S Aktiengesellschaft

K S Kali GmbH

P.T. BASF Care Chemicals Indonesia

P.T. BASF Indonesia

PCI Augsburg GmbH

PolyAd Services GmbH

Shanghai MBT & SCG High-tech Construction Chemicals Co. Ltd.

Shanghai BASF Polyurethane Co., Ltd.

Styrolution GmbH

Styrolution India Private Limited

Styrolution South East Asia Pte. Ltd.

Watson Bowman ACME Corp

(c) Key Management Personnel

Chairman & Managing Director

Mr. Prasad Chandran

Whole-Time Directors

Mr. S. Regunathan

Dr. G. Ramaseshan

Mr. Thilo Bischoff

9. Transfer pricing regulations:

The management is of the opinion that the Company''s international and domestic transactions are at an arms length so that aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

10. Foreign currency exposure details:

As on 31st March 2013, the Company has 35 forward contracts totaling to USD 124.9 Mio. (Rs. 6,791.9 Mio.) (Previous Year USD 73.6 Mio. (Rs. 3,671 Mio.)) for the purposes of covering its foreign currency exposure related to trade receivables, trade payables and borrowings. The unamortized premium of Rs. 689.4 Mio. (Previous Year Rs. 50.2 Mio.) pertaining to the same will be recognized subsequently. Foreign currency exposure that is not covered as at 31st March is as follows:

11. The Previous year figures have been regrouped and rearranged whereever necessary.


Mar 31, 2012

1. Contingent Liabilities

Rs. Mio.

Nature 2011-12 2010-11

Contingent Liabilities not Provided for

(a) Claim against the Company not acknowledged as debt 22.2 31.1

In respect of which the Company has counterclaim 68.7 67.0

(b) Demand for taxes and duties in respect of which the company has preferred appeals with appropriate authority

a. Income Tax 18.4 32.0

b. Customs, Excise, Service Tax and Sales Tax 175.9 142.7

2. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided (net of advances) for Rs. 280.0 million (Previous Year Rs. 257.2 million).

3. Purchase of specialty chemicals business of Cognis Specialty Chemicals India Private Limited

Pursuant to an Agreement entered into between BASF India Limited ('the Company') and Cognis Specialty Chemicals India Private Limited ('Cognis'), the specialty chemicals business of Cognis was acquired from 1st July, 2011 for consideration of Rs. 134 Mio. The assets and liabilities of Cognis have been taken over at fair value as determined by an independent valuer and the difference between the fair value of the net assets purchased over the consideration paid aggregating to Rs. 68.8 Mio. has been accounted as Goodwill.

4. Amalgamation of BASF Coatings (India) Private Limited (BCIN), BASF Construction Chemicals (India) Private Limited (BCC) and BASF Polyurethanes India Limited (BPIL) with BASF India Limited (BIL or the Company)

Pursuant to the Scheme of Amalgamation ('the scheme') as approved in the court convened shareholder meeting held on 3rd November, 2010 and subsequently sanctioned by the Honourable High Court of Bombay vide its order dated 14th January, 2011, BCIN, BCC, BPIL (wholly owned subsidiary of the Company) (collectively referred to as the amalgamating companies) were merged with the Company. The amalgamating companies were engaged in the business of manufacturing and trading of resins, thinners and varnishes, building & construction materials & polyurethane systems house and polyesterols.

As provided in the Scheme of Amalgamation, 619,589 equity shares of BIL (representing 1.43% of equity share capital as at 31st March, 2011) were issued against 37,175,399 shares of BCIN (representing 100% of equity share capital as at 1st April, 2010) and 1,896,064 equity shares of BIL (representing 4.38% of equity share capital as at 31st March, 2011) were issued against 2,464,885 shares of BCC (representing 100% of equity share capital as at 1st April, 2010). 9,000,000 equity shares (representing 100% of equity share capital as at 1st April, 2010 of BPIL) and BILs investment in such equity shares held by the Company were cancelled. Accordingly 2,515,653 equity shares of Rs. 10/- each fully paid up were issued to the equity share holders of the BCIN and BCC without payment being received in cash.

As per the Scheme of Amalgamation, the 'Appointed Date' is 1st April, 2010. The amalgamation was accounted under the "pooling of interests" method as prescribed by Accounting Standard 14 on "Accounting for Amalgamations". Accordingly:

(i) All the assets and liabilities of BCIN, BCC and BPIL were transferred and vested in the Company at book values with effect from 1st April, 2010. The reserves of the amalgamating companies appear in the same form in the financial statements of the Company.

(ii) As specified in the scheme of amalgamation, the difference between the amount recorded as share capital issued (Rs. 25.2 Mio.) and the amount of share capital of the amalgamating companies (Rs. 396.4 Mio.) aggregating to Rs. 371.2 Mio. was adjusted in amalgamation reserves.

(iii) The book values of the intercompany balances and holdings were cancelled.

5. Employees benefits:

Defined contribution plans:

Company's contribution to defined contribution funds amounting to Rs. 82.5 Mio. (Previous year Rs. 63.7 Mio.) has been charged to the Statement of Profit and Loss.

Defined benefit plans and other long term employee benefits:

Gratuity is payable to all eligible employees of the Company on superannuation, death, permanent disablement and resignation in terms of provisions of the Payment of Gratuity Act, 1972, or as per the Company's scheme whichever is more beneficial. The Company irrevocably contributes funds to a separate Gratuity Trust which is recognised by Income Tax authorities.

Eligible employees can carry forward and encash leave on superannuation, death, permanent disablement and resignation as per Company's policy.

Long Service Awards are payable to employees on completion of specified years of service at the rate of 0.5 month to 1.5 months eligible salary.

The expected rate of return on assets is based on the expectation of the average long term rate of return on investment of the fund, during the estimated term of obligation.

The obligations are measured at the present value of estimated future cash flows by using a discount rate that is determined with reference to the market yields at the Balance Sheet date on Government Bonds which is consistent with the estimated terms of the obligation.

The estimate of future salary increase, considered in the actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

Provident fund

The Company has an obligation to fund any shortfall on the yield of the trust's investments over the administered interest rates on an annual basis. These administered rates are notified by the Government annually. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities during the year ended March 31, 2012. The actuary has accordingly provided a valuation based on the below provided assumptions and there is no shortfall as at March 31, 2012.

Notes on Segment Information:

1. Segments have been identified in accordance with the Accounting Standard on Segment Reporting (AS-17). Business Segments have been considered as primary segments.

2. Details of type of products included in each segment —

— Agricultural Solution - includes Agrochemicals. Agricultural Solution is seasonal in nature.

— Performance Products - Tanning agents, Leather Chemicals, Textile Chemicals, Dispersion Chemicals, Specialty Chemicals and high-value fine Chemicals for the food, pharmaceuticals, animal feed and cosmetics industries.

— Plastics - Expandable Polystyrene (EPS), Engineering Plastics and Polyurethanes.

— Chemicals - Chemicals includes inorganic chemicals, intermediates and petrochemicals.

— Functional Solution - Functional Solution includes coatings and construction chemicals.

— Others - includes technical and service charges.

3. Un-allocable Corporate Assets include Net Deferred Tax Assets and other un-allocable assets.

4. Un-allocable Corporate Liabilities include Proposed Dividend and other un-allocable liabilities.

6. Transfer pricing regulations:

The management is of the opinion that the Company's international transactions are at an arms length so that aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

7. Foreign currency exposure details:

As on 31st March, 2012, the Company has 67 forward contracts totalling to USD 73.60 Mio. (Rs. 3,671.00 Mio.) for the purposes of hedging its foreign currency exposure. The unamortized premium of Rs. 50.15 Mio. pertaining to the same will be recognized subsequently. Foreign currency exposure that is not hedged as at 31st March is as follows:

8. Previous year figures are regrouped/reclassified pursuant to adoption of requirements of revised Schedule VI of Companies Act, 1956.


Mar 31, 2011

1. Amalgamation of BASF Coatings (India) Private Limited (BCIN), BASF Construction Chemicals (India) Private Limited (BCC) and BASF Polyurethanes India Limited (BPIL) with BASF India Limited (BIL or the Company)

Pursuant to the Scheme of Amalgamation ('the scheme') as approved in the court convened shareholder meeting held on 3rd November, 2010 and subsequently sanctioned by the Honourable High Court of Bombay vide its order dated 14th January, 2011, BCIN, BCC, BPIL (wholly owned subsidiary of the Company) (collectively referred to as the amalgamating companies) have been merged with the Company. The amalgamating companies were engaged in the business of manufacturing and trading of resins, thinners and varnishes, building & construction materials & polyurethane systems house and polyesterols.

As provided in the Scheme of Amalgamation, 619,589 equity shares of BIL (representing 1.43% of equity share capital as at 31st March, 2011) are issued against 37,175,399 shares of BCIN (representing 100% of equity share capital as at 1st April, 2010) and 1,896,064 equity shares of BIL (representing 4.38% of equity share capital as at 31st March, 2011) are issued against 2,464,885 shares of BCC (representing 100% of equity share capital as at 1st April, 2010). 9,000,000 equity shares (representing 100% of equity share capital as at 1st April, 2010 of BPIL) and BIL's investment in such equity shares held by the Company stands cancelled. Accordingly 2,515,653 equity shares of Rs. 10/- each fully paid up have been issued to the equity share holders of the BCIN and BCC without payment being received in cash.

As per the Scheme of Amalgamation, the 'Appointed Date' is 1st April, 2010. The amalgamation has been accounted under the "pooling of interests" method as prescribed by Accounting Standard 14 on "Accounting for Amalgamations". Accordingly:

(i) All the assets and liabilities of BCIN, BCC and BPIL have been transferred and vested in the Company at book values with effect from 1st April, 2010. The reserves of the amalgamating companies appear in the same form in the financial statements of the Company.

(ii) As specified in the scheme of amalgamation, the difference between the amount recorded as share capital issued (Rs. 25.2 Mio.) and the amount of share capital of the amalgamating companies (Rs. 396.4 Mio.) aggregating to Rs. 371.2 mio is adjusted in amalgamation reserves.

(iii) The book values of the intercompany balances and holdings stand cancelled.

In view of the aforesaid amalgamation with effect from 1st April, 2010, the figures for the current year are not strictly comparable to those of the prior year.

2. Amalgamation of Ciba India Limited (CIL), Diamond Dye-Chem Limited (DDL) and Ciba Research India Private Limited (CRIPL) with the Company

Pursuant to the Scheme of Amalgamation ('the scheme') as approved in the court convened shareholder meeting held on 16th December, 2009 and subsequently sanctioned by the Honourable High Court of Bombay vide its order dated on 26th February, 2010, CIL, DDL (wholly owned subsidiary of CIL) and CRIPL (collectively referred to as the amalgamating companies) have been merged with the Company. The amalgamating companies were engaged in the business of manufacturing and trading of specialty chemicals and in commoditized products.

As provided in the Scheme of Amalgamation,10,637,927 equity shares of BIL (representing 26.1% of equity share capital as at 31st March, 2010) were issued against 13,280,819 shares of CIL (representing 100% of equity share capital as at 1st February, 2010) and 1,941,912 equity shares of BIL (representing 4.76% of equity share capital as at 31st March, 2010) were issued against 10,788,401 shares of CRIPL (representing 100% of equity share capital as at 1st February, 2010). Accordingly 12,579,839 equity shares of Rs. 10/- each fully paid up have been issued to the equity share holders of the CIL, CRIPL whose names appear in the register of members on record date i.e 18th March, 2010, without payment being received in cash.

As per the Scheme of Amalgamation, the 'Appointed Date' is 1st February, 2010. The amalgamation has been accounted under the "pooling of interests" method as prescribed by Accounting Standard 14 on "Accounting for Amalgamations". Accordingly:

(i) All the assets and liabilities of CIL, DDL and CRIPL have been transferred and vested in the Company with effect from 1sl February, 2010.

(ii) As specified in the scheme of amalgamation, the difference between the amount recorded as share capital issued (Rs. 125.7 Mio.) and the amount of share capital of the amalgamating companies (Rs. 269.7 Mio.) aggregating to Rs.144.0 Mio. is adjusted in General Reserves.

(iii) The book values of the intercompany balances and holdings stand cancelled.

3. Contingent Liabilities not provided for:

(a) Claims against the Company not acknowledged as debts: Rs. 31.1 Mio. (Previous Year Rs. 30.2 Mio.) in respect of which the Company has counter claims of Rs. 67.0 Mio. (Previous Year Rs. 67.0 Mio.)

(b) Demands for taxes and duties in respect of which the Company has preferred appeals with appropriate authorities

a. Income tax : Rs. 32.0 Mio. (Previous Year Rs. 66.6 Mio.)

b. Customs, Excise and Sales tax : Rs. 142.7 Mio. (Previous Year Rs. 131.0 Mio.)

4. Estimated amount of contracts remaining to be executed on capital account and not provided (net of advances) for Rs. 257.2 Mio. (Previous Year Rs. 70.2 Mio.).

5. The exchange loss of Rs. 220.7 Mio. (Previous Year loss of Rs. 48.1 Mio.) has been included in the Profit and Loss Account for the year.

6. Expenditure on Research and Development charged to Profit and Loss Account Rs. 104.5 Mio. (Previous Year Rs. 80.0 Mio.).

7. Employees Benefits:

Defined contribution plans:

Company's contribution to defined contribution funds amounting to Rs. 125.7 Mio. (Previous Year Rs. 71.0 Mio.)

has been charged to the Profit & Loss Account.

Defined benefit plans and other Long term employee benefits :

Gratuity is payable to all eligible employees of the Company on superannuation, death, permanent disablement and resignation in terms of provisions of the Payment of Gratuity Act, 1972, or as per the Company's scheme whichever is more beneficial. The Company irrevocably contributes funds to a separate Gratuity Trust which is recognised by Income Tax authorities.

Eligible employees can carry forward and encash leave on superannuation, death, permanent disablement and resignation as per Company's policy.

Long Service Awards are payable to employees on completion of specified years of service at the rate of 0.5 month to 1.5 months eligible salary for every completed year.

8. Related Party Disclosures:

(a) Parties where control exists

BASF SE Holding Company

BASF Polyurethanes India Ltd*. 100% Subsidiary

(b) Other related parties with whom transactions have taken place during the year Fellow Subsidiaries

BASF PLC

BASF Asia Pacific Service Centre Sdn. Bhd.

BASF CANADA INC

BASF Bangladesh Ltd.

BASF Chemicals Company Ltd.

BASF Chemicals and Polymers Pakistan (Pvt) Ltd.

BASF China Limited

BASF Coatings (India) Private Ltd.*

BASF Company Ltd.

BASF Construction Chemicals (India) Private Ltd.*

BASF Corporation

BASF Curtex S.A.

BASF East Asia Regional Headquarters Limited

BASF Construction Chemicals, Dubai

BASF IT Services Holding GmbH

BASF Construction

BASF Kanoo Gulf FZE

BASF Construction Polymers GmbH

BASF Coatings GmbH

BASF Japan Ltd.

BASF Philippines, Inc.

BASF Chemtrade Gesellschaft Mbh

BASF Coating S.A.

BASF South East Asia Pte. Ltd.

Styrolution India Private Limited (Previously known as BASF Styrenics Private Limited)

BASF Tuerk Kimya Sanayi Ve Ticaret Ltd.Sti.

BASF Finlay (Private) Limited

BASF Coating S.A.S.

BASF Color Solutions Germany GmbH

BASF Italia SPA

Construction Research & Technology GmbH

P.T. BASF Indonesia

BASF Antwerpen N. V.

BASF Agrochemical Products B.V.

BASF Australia Ltd.

BASF South Africa (Pty) Ltd.

BASF Polyurethane Specialties (China) Company Ltd.

BASF Asia Pacific (India) Pvt. Ltd.

BASF Fine Chemicals Switzerland S.A.

BASF Catalysts India Pvt. Ltd.

Styrolution South East Asia

BASF Construction Systems (China)

BASF Construction Chemicals GmbH

BASF Coatings Japan Ltd.

BASF YPC Company Ltd.

BASF (China) Co. Ltd.

BASF A/S.

BASF Agro B.V.

BASF Agro B.V.Arnhem (NL)

BASF Auxiliary Chemicals

BASF Belgium S.A.

BASF Chemicals & Polymers

BASF Coatings Spa

BASF Construction Chemicals, (Europe) A.G.

BASF Construction Chemicals, (UK) Ltd.

BASF Iran AG

BASF JCIC Neopentylglycol Co. Ltd.

BASF Oy

BASF Paper Chemicals

BASF Performance Products LLC

BASF Performance Products Trading

BASF Petronas Chemicals Sdn. Bhd.

BASF Polyurethane (China) Co. Ltd.

BASF Singapore PTE. Ltd.

BASF Vietnam Co. Ltd.

Elastogran Kanoo Polyurethane Systems LLC

RELIUS Coatings GmbH & Co. KG

BASF FZE

BASF Mexican S.A DE. C.V

BASF Poliurethani Italia SPA

BASF Polyurethane Specialities

BASF Polyurethane (Thailand) Ltd.

BASF Shanghai Coatings Co. Ltd.

PCI Augsburg GmbH

* Merged with the Company w.e.f. 01st April, 2010.

BASF East Asia Regional

BASF Espanola S.L

BASF Schweiz AG

BASF S.A.

BASF Taiwan Ltd.

BASF (Malaysia) Sdn. Bhd.

BASF (Thai) Ltd.

BASF Agro B.V. - Wadenswil

BASF Asia-Pacific Service Center

BASF Auxiliary Chemicals Co. Ltd.

BASF CHEM Trade GmbH

BASF Chemicals & Polymers Pakistan

BASF Coatings International Trade (Shanghai)

BASF Construction Chemicals, (Shanghai) Co. Ltd.

BASF INOAC Polyurethanes Ltd.

BASF Italia Sri

BASF Lanka (Pvt) Ltd.

BASF Pakistan (Private) Ltd.

BASF Paper Chemicals (Jiangsu) Co. Ltd.

BASF Performance Products PLC.

BASF Peruana S.A.

BASF Pharma (Evionnaz) S.A.

BASF Qingdao Pigments Co. Ltd.

BASF Speciality Chemicals

BASF Vitamins Company Limited

Iranian BASF Construction Chemicals

Shanghai BASF Polyurethanes Company Ltd.

BASF Hongkong Ltd.

BASF Netherland B.V.

BASF Polyurethane Licensing GmbH

BASF Polyurethane (Malaysia)

BASF Polyurethane GmbH

BASF YAPI Kimyasallari

Shanghai Gao QIAO

(c) Key Management Personnel

Chairman & Managing Director

Mr. Prasad Chandran

Whole-Time Directors

Mr. S. Regunathan (Alternate to Mr. Hermann Althoff) w.e.f. 16th July, 2010 Mr. R. Y. Vaidya (Alternate to Dr. Rainer Diercks)

Mr. Thilo Bischoff (Alternate to Ms. Saori Dubourg) w.e.f. 20th October, 2010 Mr. Deepak Thuse (Alternate to Ms. Saori Dubourg) until 20,b October, 2010 Mr. S. Ramnath (Alternate to Mr. Hermann Althoff) until 16th July, 2010

9. The Previous Year's figures have been regrouped and rearranged wherever necessary.


Mar 31, 2010

1. Amalgamation of Ciba India Limited (CIL), Diamond Dye-Chem Limited (DDL) and Ciba Research (India) Private Limited (CRIPL) with the Company

Pursuant to the Scheme of Amalgamation (the scheme) as approved in the court convened shareholder meeting held on 16th December, 2009 and subsequently sanctioned by the Honourable High Court of Bombay vide its order dated on 26th February, 2010, CIL, DDL (wholly owned subsidiary of CIL) and CRIPL (collectively referred to as the amalgamating companies) have been merged with the Company. The amalgamating companies were engaged in the business of manufacturing and trading of specialty chemicals and in commoditized products.

As provided in the Scheme of Amalgamation,10,637,927 equity shares of BIL (representing 26.1% of equity share capital as at 31st March, 2010) are issued against 13,280,819 shares of CIL (representing 100% of equity share capital as at 1st February 2010) and 1,941,912 equity shares of BIL (representing 4.76% of equity share capital as at 31st March, 2010) are issued against 10,788,401 shares of CRIPL (representing 100% of equity share capital as at 1st February, 2010). Accordingly 12,579,839 equity shares of Rs 10/- each fully paid up have been issued to the equity share holders of the CIL, CRIPL whose names appear in the register of members on record date i.e. 18,h March, 2010, without payment being received in cash.

As per the Scheme of Amalgamation, the Appointed Date is 1st February, 2010. The amalgamation has been accounted under the "pooling of interests" method as prescribed by Accounting Standard 14 on "Accounting for Amalgamations". Accordingly:

i) All the assets and liabilities of CIL, DDL and CRIPL have been transferred and vested in the Company with effect from 1st February, 2010.

ii) As specified in the scheme of amalgamation, the difference between the amount recorded as share capital issued (Rs. 125.7 Mio.) and the amount of share capital of the amalgamating companies (Rs. 269.7 Mio.) aggregating to Rs. 144.0 Mio. is adjusted in General Reserves.

iii) The book values of the intercompany balances and holdings stand cancelled.

In view of the aforesaid amalgamation with effect from 1st February, 2010, the figures for the current year are not strictly comparable to those of the prior year.

In terms of the settlement agreement arrived at with Syngenta India Limited (the Lessor) on 28th July, 2009, Ciba India Limited (amalgamating company) has ceased its manufacturing operation at Santa Monica, Goa (the Site) and will exit the Site on or before 31s1 December, 2010. The company is in the process of dismantling movable assets. As per the settlement agreement, the Company will receive a consideration of Rs. 135 million from the Lessor towards sale of immovable assets (WDV Rs. 67 million) upon handing over the site and on the registration of the sale deed.

2. BASF SE, vide agreement dated 1sl July, 2006, has discretion to acquire the Companys investment in its wholly owned subsidiary BASF Polyurethanes India Limited (BPIL). BASF SE intends to acquire the shareholding in BPIL subject to certain conditions. Management is in the process of assessing the feasibility of these conditions.

3. Contingent Liabilities not provided for:

(a) Claims against the Company not acknowledged as debts: Rs. 30.2 Mio. (Previous Year Rs. 26 Mio.) in respect of which the Company has counter claims of Rs. 67.0 Mio. (Previous Year Rs. 67.0 Mio.).

(b) Demands for taxes and duties in respect of which the Company has preferred appeals with appropriate authorities -

a. Income tax : Rs. 66.6 Mio. (Previous Year Rs. 61.0 Mio.). The current year figure includes Rs. 5.6 Mio. being Income Tax claims of the amalgamating companies.

b. Customs and Excise: Rs. 130.1 Mio. for the amalgamating companies on account of Customs & Excise claims.

c. Others: Rs. 0.9 Mio. (Previous Year Rs. 2.2 Mio.).

4. Estimated amount of contracts remaining to be executed on capital account and not provided (net of advances) for Rs. 70.2 Mio. (Previous Year Rs. 83.2 Mio.).

5. The exchange loss of Rs. 48.1 Mio. (Previous Year loss of Rs. 75.0 Mio.) has been included in the Profit and Loss Account for the year.

6. Expenditure on Research and Development charged to Profit and Loss Account Rs. 80.0 Mio. (Previous Year Rs. 96.1 Mio.).

7. Micro, Small and Medium Enterprises Development Act, 2006 (MSME).

On the basis of the information and records available with the Management, the following disclosures pursuant to the above Act are made for the amounts due to the Micro and Small Enterprises, who have registered with the competent authorities:

8. Employees Benefits:

Defined contribution plans :

Companys contribution to defined contribution funds amounting to Rs. 71.0 Mio. (Previous year Rs. 60.6 Mio.) has been charged to the Profit and Loss Account.

Defined benefit plans and other Long term employee benefits :

Gratuity is payable to all eligible employees of the Company on superannuation, death, permanent disablement and resignation in terms of provisions of the Payment of Gratuity Act, 1972, or as per the Companys scheme whichever is more beneficial. The Company irrevocably contributes funds to a separate Gratuity Trust which is recognised by Income Tax authorities.

Eligible employees can carry forward and encash leave on superannuation, death, permanent disablement and resignation as per Companys policy.

Long Service Awards are payable to employees on completion of specified years of service at the rate of 0.5 month to 1.5 months eligible salary.

The expected rate of return on assets is based on the expectation of the average long term rate of return on investment of the fund, during the estimated term of obligation.

The obligations are measured at the present value of estimated future cash flows by using a discount rate that is determined with reference to the market yields at the Balance Sheet date on Government Bonds which is consistent with the estimated terms of the obligation.

The estimate of future salary increase, considered in the actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

The Guidance Note on implementing AS 15, Employee Benefits (revised 2005) issued by the Accounting Standards Board (ASB) states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. Pending the issuance of the Guidance Note from Actuarial Society of India, the required information can not be determined /exhibited as confirmed by the Companys actuary.

9. Managerial Remuneration under Section 198 of the Companies Act, 1956, (excluding provision for contribution to Gratuity Fund, Leave Encashment, Group Insurance and Long Service Awards) is Rs. 48.4 Mio. (Previous Year Rs. 41.1 Mio.).

Notes on Segment Information:

1. Segments have been identified in accordance with the Accounting Standard on Segment Reporting (AS-17). Business Segments have been considered as primary segments.

2. Details of type of products included in each segment —

— Agricultural Solution - Agrochemicals like pesticides and herbicides. Agricultural Solution is seasonal in nature.

— Performance Products-Tanning agents, Leather Chemicals, Textile Chemicals, Dispersion Chemicals, Speciality Chemicals and high-value fine chemicals for the food, pharmaceuticals, animal feed and cosmetics industries.

* Speciality Chemicals include coating chemicals, additives, water treatment and paper treatment, home and fabric care chemicals of the amalgamating companies.

— Plastics - Expandable Polystyrene (EPS) and engineering plastics.

— Chemicals - Chemicals includes inorganic chemicals, intermediates and petrochemicals.

— Others- Indent Commission income not relating to any of the above segments, Technical and Service charges.

3. Un-allocable Corporate Assets include Investments, Net Deferred Tax Assets and other un-allocable assets.

4. Un-allocable Corporate Liabilities include proposed dividend and other un-allocable liabilities.

(b) The installed capacity has been certified by Technical Management of the Company and not verified by the Auditors, this being a technical matter.

(c) The figures of production are excluding captive consumption and the figures of stocks are after adjustment of shortages/excesses.

(d) The Company has licenses to manufacture 300 M.T. of Expanded Polystyrene (Thermocole) and 200 M.T. of Dimethoate.

10. The Previous Years figures have been regrouped and rearranged wherever necessary.

Find IFSC