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Directors Report of Bayer Cropscience Ltd.

Mar 31, 2015

Dear Members,

The Directors take pleasure in presenting the 57th Annual Report on the business and operations of the Company together with the audited Financial Statements along with the Report ofthe Auditors for the financial year ended March 31,2015.

Financial Performance:

(Rs. in Millions)

Particulars 2014*15 2013*14

Revenue from Operation (Net) 37,233 32,452

Other Income 879 909

Total Revenue 38,112 33,361

Profit before Finance Costs, Depreciation, Exceptional Items and Taxation 6,034 5,102

Less : Finance Costs (46) (48)

Less: Depreciation and Amortisation Expense (including Impairment) (253) (646)

Profit before Exceptional Items and Taxation 5,735 4,408

Add/(Less): Exceptional Items * *

Profit Before Tax 5,735 4,408

Less: TaxExpense (1,905) (1,513)

Profit After Tax 3,830 2,895

Add : Surplus in Statement of Profit and Loss at the beginning of the year 14,134 16,314

Amountavailablefor Appropriation 17,964 19,209

Appropriations:

Interim Dividend 146 *

Dividend Distribution Tax on Interim Dividend 25 *

Proposed Dividend 623 201

Dividend Distribution Tax on Proposed Divided 130 34

Transferred to General Reserve 383 290

Premium paid on Buy*back of shares * 4,521

Transfer to Capital Redemption Reserve * 29

Operations:

Your Company's Revenue from Operation (Net) has increased by 15%, from Rs. 32,452 Millions in 2013*14 to Rs. 37,233 Millions in 2014*15. Profit before Exceptional Items and Taxation has increased by 30%, from Rs. 4,408 Millions in 2013*14 to Rs. 5,735 Millions in 2014*15. Dividend:

The Board of Directors is pleased to recommend the payment of final dividend of Rs. 17.00 per Equity Share of Rs. 10 each for the financial year ended March 31, 2015, subject to the approval ofthe members (previous year Rs. 5.50 per Equity Share of Rs. 10 each). With the final dividend of Rs. 17.00 per Equity Share proposed by the Board of Directors and an interim dividend of Rs. 4.00 per Equity Share already paid, the total dividend for the financial year ended March 31,2015 amounts to Rs. 21.00 per Equity Share. The Register of Members will remain closed from Saturday, September 05, 2015 to Tuesday, September 15, 2015 (both days inclusive).

Exports:

Your Company is a recognised Export House. The export sale (FOB) for the year ended March 31, 2015 was Rs. 6,287 Millions compared to Rs. 4,960 Millions during the previous year.

Insurance:

The Company's assets continue to be adequately insured against the risk of fire, riot, earthquake, terrorism and the risk of loss of profits, amongst other things. In addition, adequate coverage has been taken to cover public liability, environmental liability and product liability claims. Also, all the employees are covered against the risk of hospitalisation and personal accident.

Foreign Exchange Management:

The Company's exposure to foreign exchange risk comprises the risk of a foreign currency versus the local currency. The goal is to reduce the negative impact of the risks arising from fluctuations in exchange rates in the earnings. The majority of the forex transactions are denominated in US dollar. To mitigate the currency fluctuations, the net exposure of the Bayer Group is hedged after taking advantage of the natural hedge on fortnightly basis. Foreign currency loans, including interest, ifany, are completely hedged.

The exports receivables are offset against the imports payables pertaining to the major party on fortnightly basis and the balance receivables / payables are hedged to mitigate the currency risk.

Directors' Responsibility Statement:

Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and belief, confirm that:

1. in the preparation of the annual accounts, the applicable accounting standards had been followed;

2. appropriate accounting policies have been selected and applied consistently and such judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit ofthe Company for the financial year ended March 31,2015;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities;

4. the annual accounts have been prepared on a going concern basis;

5. internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively and

6. proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems were adequate and operating effectively.

Responsible Care and Quality:

Your Company observed National Safety Week and Fire Prevention Week during the year and conducted various activities throughout the week to spread awareness on safety amongst employees. September 16, 2014 was observed as the Bayer Safety Day. Your Company observed Environment Day at Himatnagar site during the year. A"Road Safety Campaign" was launched in 2012 and was continued in 2014 to increase awareness amongst Bayer employees in India. This year, the theme was "Responsible Driving". Himatnagar Site completed 15 years without lost time injury in 2014.

Your Company, covering all the manufacturing sites, all India business operations and supporting services, was audited on Quality Management System by TUV India Pvt. Ltd. (TUV) and the Company was recertified for ISO 9001:2008. The Environmental Management System for Himatnagar site was audited by TUV and was recertified for ISO 14001:2004.

Your Company accords high priority to health, safety and environment.

Corporate Sustainability and Social Responsibility:

To Bayer CropScience Limited, sustainability basically means future viability and it forms an integral part of our business strategy. We believe that innovation is essential for achieving sustainable economic success. We at Bayer carefully develop products and services specifically designed to benefit people. In this endeavour, we are committed to achieving the economic, ecological and social responsibility objectives of Sustainable Development.

Sustainable agriculture, higher crop yields and improved crop quality are becoming increasingly important. In this context, ensuring ample food supplies is one of the biggest challenges of our time. Bayer CropScience Limited is developing solutions to this problem and has firmly established the topic of "high*quality food for all" as a central objective of its sustainability programme. For us, the only way to achieve this goal is through sustainable agriculture.

Two key prongs of our commitment to sustainability are improving resource and energy efficiency. At Bayer CropScience Limited, we are constantly working to reduce environmental impact and find innovative product solutions that benefit the environment.

Our mission states ** "Bayer: Science For A Better Life" For us, it is therefore important to contribute to society's future viability and create value in diverse ways. Within the scope of our social commitment, we thus make targeted strategic investments in the areas of science and education, health, social needs and community projects. This commitment is an integral element of our corporate policy.

For Bayer CropScience Limited, India's traditional CSR spend was focussed on rural development. For the future, we intend to make India, a Role Model, with a focus on innovative CSR projects and system*changing social seed*funding under Bayer's strategic CSR policy areas.

The CSR for India portfolio target structure has three distinct pillars:

1. Society Progress Pilots for pioneering ideas and topics of nationwide importance

2. Science Excellence with focus on life science talents and frontier research

3. Community developmentfor neighbourhood projects on farming/rural topics, health and education Corporate Social Responsibility:

In accordance of the requirements of Section 135 of the Companies Act, 2013, your Company has constituted a Corporate Social Responsibility Committee. The Composition and terms of reference of the Corporate Social Responsibility Committee is provided in the Corporate Governance Report. The Brief outline ofthe CSR Policy ofthe Company and the initiatives undertaken by the Company on CSR Activities during the financial year 2014*15 are set out in Annexure "A" of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Human Resources:

Employee engagement is an important factor in your Company's success. Central to this engagement are culture and LIFE values. They provide the employees with guidance for daily work and encourage them for sustainable performance.

Your Company reaffirmed its commitment to personal growth and learning with the launch of 24 different training & development initiatives to support the employees in an increasingly dynamic and complex business landscape. The year was marked with special focus on enhancing the feedback culture and on leadership development. Additionally, our employees were nominated to 39 identified external training programs. Your Company launched its Employer Value proposition * its Employer Brand * 'Passion to Innovate Power to Change'. Bayer's Employer Brand promise is based upon the Bayer strong Corporate Brand * Bayer: Science for a Better Life. It is a reflection of what makes Bayer and what is expected of every employee who joins Bayer. The Employer Brand brings a strong value proposition for future talents and further strengthens Bayeras an Employer ofchoice.

It further continued its strong Employer Branding initiatives by continuing the "Bayer Scholarship Program" with front ranking universities in India, with the aim to further strengthen the interface between the educational institutes and the industry.

Roll out of the global Bayer Competency Model which forms the base for all HR subsystems. The Model conveys our focus on 8 core and 8 leadership competencies that link our People Processes, Performance Management, Talent Development initiatives across the employee lifecycle.

To establish on*boarding practices to integrate employees smoothly into the organization and to make them productive as quickly as possible, the Bayer Group in India launched an on*boarding process which includes the 'Hello Bayer' portal. New employees are curious to know more about the organization they are going to join. Hello Bayer is an internet based customized India on*boarding portal which offers new employees information so as to help them quickly acclimatize to the organization.

In line with Bayer's talent management philosophy of "Building the Leadership Pipeline" & "Valuing the Expertise of employees", a number of employees went through various Development Centres. These exercises not only built capabilities, but also presented opportunities for employees to move into different roles and positions. Our strong work on XCEDO, the Bayer CropScience Training Academy was recognised at the Asia Pacific level. An addition to the academy was the SKILL CAMP which is a global marketing and sales initiative.

In continuation to last year's efforts towards providing opportunities for Learning and Development to the employees, additional batches of our employee development initiatives like NIEV * Bayer Management Program and My Growth My Life * Employee Development Program were launched.

Employee relations during the year were harmonious and cordial.

Directors:

Mr. Kaikobad B. Mistry retires by rotation and being eligible, offers himself for re*appointment. Dr. Regine Juergens was appointed as an Additional Director of the Company with effect from February 02, 2015. Brief profile of both Directors is given in the explanatory statement annexed to the Notice.

Mr. Tobias Marchand, Non*Executive Non*Independent Director resigned from the Board of the Directors of the Company with effect from closing hours of January 31,2015.

Dr. Vijay Mallya, Mr. Sharad M. Kulkarni, Mr. A.K.R Nedungadi and Mr. Vimal Bhandari, the Independent Directors have given declaration to the Board that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Meetings ofthe Board:

During the financial year ended March 31, 2015, five Board Meetings were convened and held. The details of which are given in the Corporate Governance Report.

Audit Committee:

All the recommendations made by the Audit Committee were accepted by the Board. The composition of the Audit Committee is given in the Corporate Governance Report.

Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance and that of its committees and individual directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Nomination and Remuneration Policy:

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a Nomination and Remuneration Policy in accordance with Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The Policy provides for appointment and removal of Directors, Key Managerial Personnel and Senior Management employees and their remuneration. The Policy is stated in the Corporate Governance Report.

Whistle Blower Policy (Vigil Mechanism):

In terms of Section 177 of the Companies Act, 2013 and requirements of Clause 49 of Listing Agreement, the Company has a Whistle Blower Policy as its vigil mechanism. The details of this Policy is explained in the Corporate Governance Report and also posted on the website of the Company.

Risk Management Policy:

The Company has adopted a Risk Management Policy which outlines the risk management framework of the Company. The policy contains the following aspects:

* overview of risk management

* roles and responsibilities of the Board of Directors, Audit Committee and other key personnel of the company with regards to risk management.

* structure for identification, escalation, and minimization of risks

* procedure for risk identification, escalation, and minimization of risks.

The risks identified can be of various types/categories (Risk categorisation). The categories that are being used are Operational/Business, Regulatory/Compliance, People, Information Technology, Environmental and Reputation. The details on risk management are given in the Corporate Governance Report.

Information pursuant to Section 197(12) ofthe Companies Act, 2013:

The information as prescribed under Section 197(12) of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is set out as an Annexure "E" to the Directors' Report. However, as per the proviso to Rule 5, the Directors' Report and Financial Statements are being sent to the Members excluding the statement giving particulars of employees under Section 197(12). Any Member interested in obtaining a copy of such statement may write to the Company Secretary at the Registered Office of the Company.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 with respect to these matters forms part of this Report and is enclosed as Annexure "B" hereto.

Particular of Loans, guarantees or investments under Section 186 ofthe Companies Act, 2013:

During the financial year ended March 31,2015 the Company gave loan to its group companies. As on March 31,2015 no loan is outstanding. The particulars of the loans is given under Note No. 37 in Financial Statement. The Company did not give any guarantee or provide security in connection with any loan or acquire any securities during the financial year ended March 31, 2015.

Related Party Transactions:

In terms of the requirements as per the Companies Act, 2013 and the Listing Agreement, your Company has formulated a Related Party Transaction Policy. All the transactions entered with related parties are as per the Related Party Transaction Policy and are in the ordinary course of business and at arm's length. Information on transactions with the related parties pursuant to Section 134(3)(h) of the Companies Act, 2013 read with rule 8(2) ofthe Companies (Accounts) Rules, 2014 are given under Annexure "C".

Prevention of Sexual Harassment at Workplace:

The Company has in place an Anti*Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during each calendar year.

* Noofcomplaintsreceived : Nil

* No of complaints disposed off : Nil

Extract of Annual Return:

The details forming part of the extract of the Annual Return in Form MGT 9 is enclosed as Annexure "D" hereto.

Corporate Governance:

Your Company believes in transparency and has always maintained a very high level of Corporate Governance. As required by Clause 49 of the Listing Agreement, a detailed Corporate Governance Report is given as an Annexure to this Report. The Company is in full compliance with the requirements and disclosures that have to be made in this regard. The Certificate from a Company Secretary in whole*time practice confirming compliance ofthe Corporate Governance requirements by the Company is attached to the Corporate Governance Report.

Management Discussion and Analysis Report:

A detailed review of operations, performance and future outlook of the Company is given separately under the head Management Discussion and Analysis Report.

Cost Audit:

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of 'Insecticides' is required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed M/s. N. I. Mehta & Co. to audit the cost accounts of the Company pertaining to 'Insecticides' for the financial year ending March 31, 2016.

Statutory Auditors:

M/s. Price Waterhouse, Chartered Accountants, (Firm Registration Number 301112E) retire as Statutory Auditors at the conclusion of the ensuing Annual General Meeting and are eligible for re*appointment. The Company has received a letter from the retiring Auditors that their appointment as Statutory Auditors, if made, would be within the limits prescribed under the Companies Act, 2013. The Audit Committee and the Board recommends the re*appointment of M/s. Price Waterhouse, Chartered Accountants, (Firm Registration Number 301112E) as Statutory Auditors for the financial year ending March 31,2016.

Members are requested to consider and re*appoint M/s. Price Waterhouse, Chartered Accountants, (Firm Registration Number 301112E) as the Statutory Auditors of the Company for conducting the audit for the financial year ending March 31,2016.

Secretarial Audit:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. BNP & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is enclosed as Annexure "F" hereto.

Acknowledgements:

The Board of Directors wishes to express its sincere appreciation for the dedicated services rendered by employees at all levels and the constructive co*operation extended by them. Your Directors would like to express their grateful appreciation for the assistance and support extended by all customers, government authorities, financial institutions, banks, shareholders, suppliers and other business associates. We also acknowledge the consistent support and guidance from Bayer AG, Bayer CropScience AG, Bayer SAS and Bayer Vapi Private Limited.

For and on behalf of the Board of Directors

Dr. Vijay Mallya Chairman

Thane, May 27, 2015


Mar 31, 2013

Dear Members,

The Directors take pleasure in presenting the 55th Annual Report on the business and operations of the Company together with the audited Financial Statements along with the Report of the Auditors for the financial year ended March 31, 2013.

Financial Performance:

Rs. in Millions

Particulars 2012-13 2011-12

Revenue from Operation (Net) 27,253 22,723

Other Income 689 453

Total Revenue 27,942 23,176

Profit before Finance Costs, Depreciation, Exceptional Items and Taxation 4,288 2,980

Less : Finance Costs (37) (17)

Less : Depreciation and Amortisation (366) (340)

Profit before Exceptional Items and Taxation 3,885 2,623

Add/(Less): Exceptional Items 11,747 (579)

Profit Before Tax 15,632 2,044

Less : Taxes (4,015) (654)

Profit After Tax 11,617 1,390

Add : Surplus in Statement of Profit and Loss at the beginning of the year 6,090 5,032

Amount available for Appropriation 17,707 6,422

Appropriations:

Proposed Dividend 197 166

Taxation on Proposed Dividend 34 27

Transferred to General Reserve 1,162 139

Profit & Loss Balance Carried Forward 16,314 6,090

Operations:

Your Company''s Revenue from Operation (Net) has increased by 19.94%, from Rs. 22,723 Millions in 2011-12 to Rs. 27,253 Millions in 2012-13. Profit before Exceptional Items and Taxation has increased by 48.11%, from Rs. 2,623 Millions in 2011-12 to Rs. 3,885 Millions in 2012-13.

Material Developments during the year:

Pursuant to the approval of Board vide its resolution dated July 19, 2010 and December 22, 2010, for the sale / transfer/disposal of Land and Buildings situated at Kolshet Road, Thane (the said Property), the Company and Agile Real Estate Private Limited ("Agile") have accepted Rs. 12,500 Millions as full and final aggregate consideration for the sale and transfer of the said Property to Agile. The Company and Agile have, on November 29, 2012, executed two Agreements and other incidental documents and undertaken all the requisite acts for concluding the transaction. On execution as aforesaid, the Company has received balance consideration of Rs. 7,300 Millions (net of advance of Rs. 5,200 Millions) as full and final consideration. The Company has no further obligations relating to the transfer of the said Property. The execution of deed of conveyance in favour of Agile shall be undertaken subsequently.

The Company has sold the Building situated at Powai, Mumbai pursuant to an agreement dated March 15,2013 for Rs. 823 Millions. Consequent to the sale of Powai Building, the Board of Directors have approved the change of Registered Office from Bayer House, Central Avenue, Hiranandani Gardens, Powai, Mumbai - 400 076 to Olympia, First Floor, Central Avenue, Hiranandani Gardens, Powai, Mumbai - 400 076.

Dividend:

The Board of Directors is pleased to recommend the payment of dividend of Rs. 5.00 per Equity Share of Rs. 10 each for the financial year ended March 31, 2013, subject to the approval of the members (previous year Rs. 4.20 per Equity Share of Rs. 10 each). The proposed dividend will absorb a sum of Rs. 197 Millions. The Register of Members will remain closed from Wednesday, August 14, 2013 to Thursday, August 29, 2013 (both days inclusive).

Exports:

Your Company is a recognised Export House. The export sale (FOB) for the year ended March 31, 2013 was Rs. 4,582 Millions compared to Rs. 3,096 Millions during the previous year.

Public Deposits:

A sum of Rs. 15,000 relating to 1 deposit has been transferred to Investor Education and Protection Fund. No interest was payable on such unclaimed deposit. During the year under review, your Company has not accepted any public deposits. As on March 31, 2013, the Company has Nil deposits.

Insurance:

The Company''s assets continue to be adequately insured against the risk of fire, riot, earthquake, terrorism and the risk of loss of profits, amongst other things.

In addition to the above, adequate coverage has been taken to cover public liability, environmental liability and product liability claims. Also, all the employees are covered against the risk of hospitalisation and personal accident.

Foreign Exchange Management:

The Company''s exposure to foreign exchange risk comprises the risk of a foreign currency versus the local currency. The goal is to reduce the negative impact of the risks arising from fluctuations in exchange rates in the earnings. The majority of the forex transactions are denominated in US dollar. To mitigate the currency fluctuations, the net exposure of the Bayer Group is hedged after taking advantage of the natural hedge on every month end. Foreign currency loans, including interest, are completely hedged.

The exports receivables are offset against the imports payables pertaining to the major party on monthly basis and the balance receivables payables are hedged to mitigate the currency risk.

Directors'' Responsibility Statement:

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors confirm that, to the best of their knowledge and belief:

1. in the preparation of the annual accounts, the applicable accounting standards have been followed;

2. appropriate accounting policies have been selected and applied consistently, and such judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2013 and of the profit of the Company for the financial year ended March 31, 2013;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. the annual accounts have been prepared on a going concern basis.

Responsible Care and Quality:

Your Company observed National Safety Week and Fire Prevention Week in the year and conducted various activities throughout the week to spread awareness on safety amongst employees. September 18, 2012 was observed as the Bayer Safety Day. Your Company observed Environment Day at Ankleshwar and Himatnagar sites during the year. A Special Road Safety campaign was launched in 2012 to increase awareness amongst employees.

Your Company, covering all the manufacturing sites, all India business operations and supporting services, was audited on Quality Management System by TUV India Pvt. Ltd. and the Company was recommended continuation of ISO 9001:2008 certificate. The Environmental Management System for Himatnagar and Ankleshwar sites was audited by TUV and was recommended continuation of ISO 14001:2004 certificate.

Continual improvement and sustainability resulted in conservation of energy, reduction in waste generation and recycling of resources and cost savings.

Your Company accords high priority to health, safety and environment.

Corporate Sustainability and Social Responsibility:

Growing population and demographic changes present enormous challenges for society and companies. These include, in particular, sufficient food, and environmental and climate protection and access to appropriate health care for everyone. We consider ourselves a part of society and see our commitment as living up to the role of a good corporate citizen. Sustainable Development, therefore, forms an integral part of our business strategy.

Together with our value concept LIFE - which stands for Leadership, Integrity, Flexibility and Efficiency - our mission forms the basis of our sustainable actions. As an innovation company with the mission "Science For A Better Life," the Bayer Group continues to focus on its core competencies in the development of new solutions in the fast-growing, innovation-driven areas of health care, nutrition and high-tech materials.

Social commitment is an established part of Bayer''s sustainability strategy and corporate policy. We view the promotion of worthy causes in the areas of education, health care, environment, sports and culture as a long-term investment in society''s future viability and as a contribution to a positive business environment.

Progress on Model Village Project

Acknowledging that agriculture is the first source to create a significant value addition in rural areas, agricultural development is being planned to further foster many measures that include, in particular, a strong focus on knowledge transfer on how sustainable crop production can increase productivity. This is the principle objective of the Model Village Project.

The Model Village Project being implemented in two villages - Mangalgudda and Kadivala in North Karnataka, aims to foster rural development through ''empowerment''. Based on the insights gained during the implementation of Child Care Programme, the project is being tried out on a pilot basis. The overall approach for execution of the project is being implemented through Bayer Prayas Rural Development Association.

Acomprehensive approach is being adopted to further the objectives of the Model Village Project. A number of initiatives are being implemented in the Model Village such as introduction of drip irrigation, facilitating soil testing, organising Animal Health Camp, implementing Vidya Prayas scholarships for school-going children, productivity enhancement training for farmers, establishing an Information and Communication Technology (ICT) lab for Model Village children which has led to positive outcome with adoption of such progressive technologies.

Similarly, Bayer has organised three diagnostic health camps for determining the health burdens in the Model Village and to facilitate possible interventions for the local population. .

IT-enabled schooling in Model Villages

Bayer''s achievements as an innovation company with a long tradition are based on progress in science and research. We focus not only on our own research activities, but also on promoting and strengthening education and research in general. Through various initiatives, Bayer systematically supports the training of young people, the development of scientific talent and innovative approaches to research.

As a part of our ongoing activities to nurture education in the Model Villages, we are establishing an ICT lab for rural children in Mangalgudda Village. Towards this end, we have tied up with Pearson Education Services to provide us with Kannada content in major subjects - Science, Mathematics and Social Sciences. This ICT lab will benefit approximately 150 children studying in the school from Class V to VIII.

Project evaluation by external stakeholder

The Model Village Project is continuously academically evaluated by a team of professors and students of the Pforzheim University, Germany. About five students have got the opportunity to do an internship at Bayer in India, to do their own experiences and to gain a lot of interesting and incredible impressions of the current situation of the affected people in the villages.

Employee-volunteering in Model Village

Mannschaft - A Leadership Development Programme has been envisaged as an employee-volunteering programme across the sub-groups of Bayer in India. Mannschaft represents the German word for''team''. In each Mannschaft, about 10-15 employees from across sub-groups and functions travel together on a week-end and get the opportunity to work in the village on various development activities related to the Model Village Project. So far, four Mannschaft have been organised by the Sustainable Development team in Kadivala and Chandippa villages.

Exemplary contribution

Two key prongs of Bayer''s commitment to sustainability are improving resource and energy efficiency and finding solutions for the challenges posed by the consequences of climate change. Bayer''s climate commitment also has economic benefits. Not only does improved energy efficiency lead to significant savings in energy costs, the Company is also developing and marketing products that help our customers to protect the climate and adapt to climate change.

Bayer''s Ankleshwar site has demonstrated this aptly. The site won the prestigious National Energy Conservation Award 2012 in the chemical sector for demonstrating excellence in energy conservation during 2011. The award was received by the Company from the President of India, Shri Pranab Mukherjee.

The National Energy Conservation awards, instituted by the Bureau of Energy efficiency under the Indian Government''s Ministry of Power to promote and support energy conservation initiatives in the country, are presented to organisations that have made systematic and serious attempts to conserve energy and use it efficiently. .

In the year 2011, the Ankleshwar site undertook various initiatives to enhance energy conservation that included the implementation of a ''Daily Energy Balance Sheet'' to optimise energy saving, an in-house training for employees to create awareness about the topic, analysis of energy-intensive processes and a brainstorming activity to find solutions for further reduction of energy consumption.

Our long-term commitment to sustainability

We want to tap new market opportunities to safeguard the future long-term viability of the Company. All our activities are geared to achieving ecological, economic and social benefits for our customers and for society. This is made possible by innovative products, efficient and responsible use of resources and the environment and a global commitment to good working conditions and human rights.

Human Resources:

Employee engagement is an important factor in your Company''s success. Central to this engagement are culture and LIFE values. They provide the employees with guidance for daily work and encourage them for sustainable performance.

Your Company reaffirmed its commitment to personal growth and learning with the launch of 23 different training & development initiatives to support the employees in an increasingly dynamic and complex business landscape. The year was marked with special focus on general management, self-leadership and leading people initiatives. Additionally, our employees were nominated to 20 identified external training programs.

Your Company further continued its strong Employer Branding initiatives by continuing the "Bayer Scholarship Program" with front ranking universities in India, with the aim to further strengthen the interface between the educational institutes and the industry.

In line with Bayer''s talent management philosophy of "Building the Leadership Pipe line'''' & "Valuing the Expertise of employees", a number of employees went through various Development Centres. These exercises not only build capabilities, but also presented opportunities for employees to move into different roles and positions. Our strong work on XCEDO, the Bayer CropScience Training Academy was recognised and conferred with two external awards - Best Corporate University Award at the TISS LEAPVAULT CLO Awards and The Best Learning Organisations Award from L&OD Roundtable.

In continuation to last year''s efforts towards providing opportunities for Learning and Development to the employees, an initiative which strengthens the performance and feedback culture was launched.

Employee relations during the year were harmonious and cordial.

Information pursuant to Section 217(2A) of the Companies Act, 1956:

The information as prescribed by Section 217(2A) of the Companies Act, 1956, read along with the Companies (Particulars of Employees) Rules, 1975, as amended is set out as an Annexure to the Directors'' Report. However, as per the provisions of Section 219(1 )(b)(iv) of the Companies Act, 1956, the Directors'' Report and Financial Statements are being sent to the Members excluding the statement giving particulars of employees under Section 217(2A). Any Member interested in obtaining a copy of such statement may write to the Company Secretary at the Registered / Corporate Office of the Company.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The information required under Section 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to these matters forms part of this Report and is annexed hereto.

Corporate Governance:

Your Company believes in transparency and has always maintained a very high level of Corporate Governance. As required by Clause 49 of the Listing Agreement, a detailed Corporate Governance Report is given as an Annexure to this Report. The Company is in full compliance with the requirements and disclosures that have to be made in this regard. The Certificate from a Company Secretary in whole-time practice confirming compliance of the Corporate Governance requirements by the Company is attached to the report on Corporate Governance.

Management Discussion and Analysis Report:

A detailed review of operations, performance and future outlook of the Company is given separately under the head Management Discussion and Analysis Report.

Directors:

Dr. Vijay Mallya and Mr. A.K.R. Nedungadi retire by rotation and, being eligible, offer themselves for re-appointment.

Dr. Thomas Hoffmann was appointed as an Additional Director and Whole-time Director of the Company with effect from April 2, 2013.

Brief profile of the above Directors are given under the Corporate Governance Report.

Cost Audit:

In accordance with the directive received from the Central Government, an audit of the cost accounts relating to Insecticides manufactured by the Company is required to be conducted every year, by an auditor with the requisite qualifications as prescribed under Section 233B of the Companies Act, 1956.

The Board of Directors has appointed M/s. N. I. Mehta and Co., qualified CostAccountantsforthe conduct of the audit of''Insecticides''for the year ending March 31, 2014. In terms of the Cost Audit Report Rules, 2011, the cost audit report is required to be filed within 180 days from the end of the financial year or as per the date notified by Ministry of Corporate Affairs (MCA) in XBRL. Your Company filed the Cost Audit Report in XBRL for the financial year ended March 31, 2012 within the date notified by MCA.

Auditors:

M/s Price Waterhouse, Chartered Accountants, (Firm Registration Number 301112E) retire as Statutory Auditors at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from the retiring Auditors that their appointment as Statutory Auditors, if made, would be within the limits prescribed under Section 224(1 B) of the Companies Act, 1956. The Audit Committee and the Board recommends the re-appointment of M/s. Price Waterhouse, Chartered Accountants, (Firm Registration Number 301112E) as Statutory Auditors for the financial year ending March 31, 2014.

Members are requested to consider and re-appoint M/s. Price Waterhouse, Chartered Accountants, (Firm Registration Number 301112E) as the Statutory Auditors of the Company for the financial year ending March 31, 2014.

Acknowledgements:

The Board of Directors wishes to express its sincere appreciation for the dedicated services rendered by employees at all levels and the constructive co-operation extended by them. Your Directors would like to express their grateful appreciation for the assistance and support extended by all customers, government authorities, financial institutions, banks, shareholders, suppliers and other business associates. We also acknowledge the consistent support and guidance from Bayer AG, Bayer CropScience AG and Bayer SAS.

For and on behalf of the Board of Directors

Dr. Vijay Mallya

Chairman

Mumbai, May 20, 2013


Mar 31, 2012

The Directors take pleasure in presenting the 54th Annual Report on the business and operations of the Company together with the audited Financial Statements along with the Report of the Auditors for the financial year ended March 31, 2012.

Financial Performance:

Rs. in Millions

Particulars 2011 -121 2010 -11

Revenue from Operation (Net) 22,723 21,373

Other Income 453 205

Total Revenue 23,176 21,578

Profit before Finance costs, Depreciation, Exceptional Items and Taxation 2,980 2,436

Less: Finance Costs (17) (83)

Less: Depreciation and Amortisation (340) (327)

Profit before Exceptional Items and Taxation 2,623 2,026

Less: Exceptional Items (579) (38)

Profit Before Tax 2,044 1,988

Less: Taxes (654) (672)

Prof it After Tax 1,390 1,316

Add : Surplus in Statement of Profit and Loss at the beginning of the year 5,032 4,032

Amount available for Appropriation 6,422 5,348

Appropriations:

Proposed Dividend 166 158

Taxation on Proposed Dividend 27 26

Transferred to General Reserve 139 132

Profit & Loss Balance Carried Forward 6,090 5,032

Operations:

Your Company's profit after tax increased to Rs. 1,390 Millions during the financial year ended March 31, 2012 as compared to Rs. 1,316 Millions in previous year, an increase of 5.62 %.

Dividend:

The Board of Directors is pleased to recommend the payment of dividend of Rs. 4.20 per Equity Share of Rs. 10 each for the financial year ended March 31, 2012, subject to the approval of the Members (previous year Rs. 4 per Equity Share of Rs. 10 each). The proposed dividend will absorb a sum of Rs. 166 Millions. The Register of Members will remain closed from Friday, August 10, 2012, to Friday, August 24, 2012 (both days inclusive).

Exports:

Your Company is a recognised Export House. The export sale (FOB) for the year ended March 31, 2012 was Rs. 3,096 Millions compared to Rs. 2,363 Millions during the previous year.

Public Deposits:

A sum of Rs. 15,000 relating to 1 deposit, which was claimed, but not encashed, remained balance as on March 31, 2012. No interest is payable on such unclaimed deposit after the maturity date. During the year under review, your Company has not accepted any public deposits.

Insurance:

The Company's assets continue to be adequately insured against the risk of fire, riot, earthquake, terrorism and the risk of loss of profits, among other things.

In addition to the above, adequate coverage has been taken to cover public liability, environmental liability and product liability risks. All the employees are also covered against the risk of hospitalisation and personal accident.

Foreign Exchange Management:

The Company's exposure to foreign exchange risk comprises the risk of a foreign currency versus the local currency. The goal is to reduce the negative impact of the risks arising from fluctuations in exchange rates in the earnings. The majority of the forex transactions are denominated in US dollar. To mitigate the currency fluctuations, the net exposure of the Bayer Group is hedged after taking advantage of the natural hedge on every month end. Foreign currency loans, including interest, are completely hedged.

Directors' Responsibility Statement:

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors confirm that, to the best of their knowledge and belief:

1. in the preparation of the annual accounts, the applicable accounting standards have been followed;

2. appropriate accounting policies have been selected and applied consistently, and such judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2012 and of the profit of the Company for the financial year ended March 31, 2012;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. the annual accounts have been prepared on a going concern basis.

Responsible Care and Quality:

Your Company observed National Safety Week and Fire Prevention Week in the year and conducted various activities throughout the week to spread awareness on safety amongst employees. September 13, 2011 was observed as the Bayer Safety Day.

Your Company, covering all the manufacturing units, all India business operations and supporting services, was audited on Quality Management System by TUV India Private Limited (TUV) and the Company was recommended continuation of ISO 9001:2008 certificate. The Environmental Management System for Himatnagar and Ankleshwar plants was audited by TUV and was recommended continuation of ISO 14001:2004 certificate.

Continual improvement and sustainability resulted in conservation of energy, reduction in waste generation and recycling of resources and cost savings.

Your Company accords high priority to health, safety and environment.

Corporate Sustainability and Social Responsibility:

In our mission statement "Bayer: Science For A Better Life" we summarise what we stand for as a Company: "Innovative solutions to socially relevant problems". Our new values concept 'LIFE - which stands for Leadership, Integrity, Flexibility and Efficiency' combine innovative performance with the personal actions of each employee, thus providing orientation for our everyday business.

Sustainability - which essentially means future viability - forms an integral part of our business strategy. We are convinced that we can only be commercially successful in the long run, if we balance economic growth with ecological and social responsibility.

Bayer Model Village Project

As a key player in the agricultural industry, Bayer CropScience in India is playing an important role in driving innovation to improve agricultural productivity in the country.

Agriculture is the key to economic growth and prosperity. In order to provide livelihood for a majority of Indian farmers living in rural areas, Bayer CropScience has been taking a lead in developing a broad variety of measures that include, in particular, a strong focus on knowledge transfer on how sustainable crop production can increase productivity.

Child Care Programme (CCP) has been envisaged as a social intervention model to eliminate child labour in the seed supply chain and for protecting their right to education. CCP has been acknowledged as an exemplary model by NGOs and companies alike, for getting children off the farms of contract seed growers and into schools.

As a next step towards empowerment, Bayer is now using the insights gained during the implementation of CCP to launch the Model Village Project.

The "Model Village Project" is an inspired extension of CCP's objective - to usher in comprehensive rural development, by means of a variety of purposeful projects that focus on improving quality of life in Indian villages.

In the framework of the project, interim storage space for harvested crops, weather insurance schemes and micro loans for farm investments will also be included as core components. These programmes will help farmers to directly access markets by eliminating the ineffective and traditional ways of trade, e.g. through middlemen. Education and training opportunities for children are an essential part of this initiative.

The Model Village Project in India is to be implemented in two villages - Mangalgudda and Kadivala, both in Karnataka as pilots. Based on the success of the two pilot projects, Bayer intends to scale up this project in all seed production villages across the country.

Bayer's approach

Bayer and its partners will help farmers to improve their agricultural productivity and profitability by providing advice and making available quality inputs. Bayer and its partners intend to carry out various projects to contribute to the improvement of educational standards and the livelihood situation of the villagers.

The overall approach for execution of the project will be through developing partnerships with like-minded organisations and bringing their expertise to the table. To act as a focal point and incubator, Bayer has incorporated a separate legal entity, "Bayer Prayas Rural Development Association".

Bayer Prayas will facilitate community involvement, strong partnerships and possibility of turning the Model Villages into a hub of development activities, with the organisation working as a point of convergence and project sustainability.

Implementation update

Drip Irrigation

As an integral part of the Model Village Project, a drip irrigation project has been implemented in four cotton seed production plots located in the Gajendragada and the Sira districts of Karnataka on an experimental basis (pilot trial) for the Kharif (wet) season 2011. The results of the trial are very encouraging and, therefore, Bayer will replicate this irrigation scheme in the selected Model Villages.

Water Purification plant

Bayer has invited the company Smaat Aqua Water Technologies to partner in establishing water purification and distribution plants in two Model Villages. The objective is to help in improving the overall health and hygiene standards in the villages and facilitate the availability of safe drinking water.

The first Bayer-Smaat Water Purification Plant has been commissioned in Kadivala village on January 24, 2012. Mr. Stephan Gerlich formally inaugurated the plant which has a capacity of 500 litres per hour to serve safe drinking water to about 180 households.

Bayer Vidya Prayas Scholarships

Under Bayer Vidya Prayas initiatives, employees of Bayer and its associated companies in India can sponsor a child's education by voluntarily donating Rs. 5,000 every year. This donation will be utilised for the child's school fee and study material. Bayer Vidya Prayas is being implemented in the Model Villages and will cover 200 children initially. Bayer Vidya Prayas was formally launched by Mr. Stephan Gerlich on January 24, 2012 at Kadivala village. On the same day, about 50 children belonging to Kadivala, the beneficiaries of Bayer Vidya Prayas in the first phase, received school kits.

Bayer Rural Service Centres

Envisaged as a service delivery hub, Bayer Rural Service Centres located in the project villages provide comprehensive solutions to the local farming needs from 'Seed to Harvest' and help the farmers to improve their productivity and profitability. Training on farm mechanisation, commodity trading and quality consciousness are some of the key elements of this initiative.

Currently, 11 Bayer Rural Service Centres are operational serving around 262 villages in the State of Karnataka in and around the Model Villages. As on date, 2,408 farmers have registered with the Bayer Rural Service Centres.

Long-term Commitment

Bayer regards itself as a member of society and believes it needs society's long-term acceptance to be able to act entrepreneurially. Model Village Project is a shining example to illustrate this point. Through this project, our objectives clearly show the direction in which, we want to go, namely towards an even stronger integration of sustainability into our activities. In this way, we aim to further improve our position as a responsible enterprise and drive forward more strategically our contribution to the sustainable development of society.

Human Resources:

Employee engagement is an important factor in your Company's success. Central to this engagement are culture and our LIFE values. They provide the employees with guidance for daily work and encourage them for sustainable performance.

Your Company reaffirmed its commitment to personal growth and learning with the launch of 30 different training and development initiatives to support the employees in an increasingly dynamic and complex business landscape. The year was marked with special focus on self-leadership, leading people and customer service initiatives. Additionally, our employees were nominated to 22 identified external training programs.

Your Company further continued its strong Employer Branding initiatives and built upon its Corporate Image in the market by launching "Bayer Scholarship Program" with six top ranking universities in India, with the aim to further strengthen the interface between the educational institutes and the industry.

In line with Bayer's talent management philosophy of "Building the Leadership Pipeline" and "Valuing the Expertise of employees", a number of employees went through Development Centre exercises during the year and qualified for promotion at National Level. The assessments were conducted based on the specific skills, beliefs and competencies identified in XCEDO, the Bayer CropScience Training Academy.

In continuation to last year's efforts towards providing opportunities for learning and development to the employees, an initiative was launched to further strengthen the leadership abilities and feedback culture. Also, employees participated in the third batch of Bayer Management Program "NIEV".

Employee relations during the year were harmonious and cordial.

Information pursuant to Section 217(2A) of the Companies Act, 1956:

The information as prescribed by Section 217(2A) of the Companies Act, 1956, read along with the Companies (Particulars of Employees) Rules, 1975, as amended is set out as an Annexure to the Directors' Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Directors' Report and Financial Statements are being sent to the Members excluding the statement giving particulars of employees under Section 217(2A). Any Member interested in obtaining a copy of the aforesaid statement may write to the Company Secretary at the Registered Office of the Company.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The information required under Section 217(1)(e) of the Companies Act, 1956 read along with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to these matters, form part of this Report and is annexed hereto.

Corporate Governance:

Your Company believes in transparency and has always maintained a very high level of Corporate Governance. As required by Clause 49 of the Listing Agreement, a detailed Corporate Governance Report is given as an Annexure to this Report. The Company is in full compliance with the requirements and disclosures that have to be made in this regard. The Certificate from a Company Secretary in whole-time practice confirming compliance of the Corporate Governance requirements by the Company is attached to the Corporate Governance Report.

Management Discussion and Analysis Report:

A detailed review of operations, performance and future outlook of the Company is given separately under the head Management Discussion and Analysis Report.

Directors:

Mr. Sharad M. Kulkarni and Mr. Vimal Bhandari retire by rotation and, being eligible, offer themselves for re-appointment.

Mr. Peter Mueller and Mr. Tobias Marchand were appointed as Directors with effect from August 1, 2011 in the casual vacancies caused due to the resignations of Mr. Johannes Dietsch and Mr. Bernd Naaf respectively. Mr. Mueller and Mr. Marchand hold office till the ensuing Annual General Meeting as Directors appointed in casual vacancies and, being eligible, offer themselves for re-appointment.

Brief profiles of the above Directors are given under the Corporate Governance Report.

Cost Audit:

In accordance with the directive received from the Central Government, every year, an audit of the cost accounts relating to Insecticides manufactured by the Company is required to be conducted by an auditor with the requisite qualifications as prescribed under Section 233B of the Companies Act, 1956.

The Board of Directors has appointed M/s. N. I. Mehta and Co., qualified Cost Accountants for the conduct of the audit of Insecticides - Technical Grade for the year ending March 31, 2013. In terms of the Companies (Cost Audit Report) Rules, 2011 the cost audit report is required to be filed within 180 days from the end of the financial year. Your Company filed the Cost Audit Report for the financial year ended March 31, 2011 on September 23, 2011. The Cost Audit Report for the financial year ended March 31, 2012 will be filed within 180 days from the end of the financial year.

Auditors:

M/s. Price Waterhouse, Chartered Accountants, (Firm Registration Number 301112E) retire as Statutory Auditors at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from the retiring Auditors that their appointment as Statutory Auditors, if made, would be within the limits prescribed under Section 224(1 B) of the Companies Act, 1956. The Audit Committee and the Board recommends the re-appointment of M/s. Price Waterhouse, Chartered Accountants, (Firm Registration Number 301112E) as Statutory Auditors for the financial year ending March 31, 2013.

Members are requested to consider and re-appoint M/s. Price Waterhouse, Chartered Accountants, (Firm Registration Number 301112E) as the Statutory Auditors of the Company for the financial year ending March 31, 2013.

Acknowledgements:

The Board places on record its sincere appreciation for the dedicated services rendered by employees at all levels and the constructive co-operation extended by the staff unions and the officers' association. Your Directors would like to express their grateful appreciation for the assistance and support extended by all customers, government authorities, financial institutions, banks, shareholders, suppliers and other business associates. We also acknowledge the continual support and guidance from Bayer AG, Bayer CropScience AG and Bayer SAS.

For and on behalf of the Board of Directors

Bayer CropScience Limited

Dr. Vijay Mallya

Chairman

Mumbai, May 29, 2012


Mar 31, 2011

Dear Members,

The Directors take pleasure in presenting the 53rd Annual Report on the business and operations of the Company together with the audited Statements of Accounts along with the Report of the Auditors for the financial year ended 31st March, 2011.

Financial Performance:

Rs. in million

Particulars 2010-11 2009-10

Net Sales and Other Operating Income 21,392.71 17,241.06

Other Income 184.96 252.53

Total Income 21,577.67 17,493.59

Profit before Interest, Depreciation, Exceptional Items and Taxation 2,433.44 2,430.15

Less : Interest (79.11) (114.50)

Less : Depreciation/ Amortisation (326.89) (264.42)

Profit before Exceptional Items and Taxation 2,027.44 2,051.23

Less : Exceptional Items (37.78) (86.78)

Profit for the year Before Tax 1,989.66 1,964.45

Less : Taxes (674.22) (691.91)

Profit for the year After Tax 1,315.44 1,272.54

Add : Profit & Loss balance brought forward from previous year 4,032.03 3,070.98

Amount available for Appropriation 5,347.47 4,343.52

Appropriations:

Proposed Dividend 158.00 158.00

Taxation on Proposed Dividend 25.63 26.24

Transferred to General Reserve 131.54 127.25

Profit & Loss Balance Carried Forward 5,032.30 4,032.03

Operations:

Your Company's profit after tax increased to Rs. 1,315.44 million during the year ended 31 st March, 2011 as compared to Rs. 1,272.54 million in the previous year, an increase of 3.37%.

Dividend:

The Board of Directors is pleased to recommend the payment of dividend of Rs.4 per Equity Share ofRs. 10 each for the financial year ended 31st March, 2011, subject to the approval of members (previous year Rs. 4 per Equity Share of Rs. 10 each). The proposed dividend will absorb a sum of Rs. 158 million. The Register of Members will remain closed from Thursday, 11th August, 2011 to Thursday, 25th August, 2011 (both days inclusive).

Exports:

Your Company is a recognised Export House. The export sales (FOB) for the year ended 31st March, 2011 was Rs. 2,362.89 million compared to Rs. 1,518.46 million during the previous year.

Public Deposits:

A sum ofRs. 15,000 relating to 1 deposit, which was claimed, but not encashed, remained balance as on 31st March, 2011. No interest is payable on such unclaimed deposit after the maturity date. During the year under review, your Company has not accepted any public deposits.

Insurance:

The Company's assets continue to be adequately insured against the risk of fire, riot, earthquake, terrorism and the risk of loss of profits, among other things.

In addition to the above, adequate coverage has been taken to cover public liability and product liability claims. Also, all the employees are covered against the risk of hospitalisation and personal accident.

Foreign Exchange Management:

The Company's exposure to foreign exchange risk comprises the risk of a foreign currency versus the local currency. The goal is to reduce the negative impact of the risks arising from fluctuations in exchange rates in the earnings. The majority of the Forex transactions are denominated in US dollar. To mitigate the currency fluctuations, the net exposure of the Bayer Group is hedged after taking advantage of the natural hedge at the end of each month. Foreign currency loans including interest are completely hedged.

Directors' Responsibility Statement:

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors confirm that, to the best of their knowledge and belief;

1. in the preparation of the annual accounts, the applicable accounting standards have been followed;

2. appropriate accounting policies have been selected and applied consistently and such judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2011 and of the profit of the Company for the financial year ended 31st March, 2011;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. the annual accounts have been prepared on a going concern basis.

Responsible Care and Quality:

Your Company was awarded "The Best Green Belt Award" from the Chief Minister of Gujarat for its Ankleshwar plant.

Your Company observed National Safety week and Fire Prevention week and conducted various activities throughout the week to spread awareness amongst its employees.

Your Company, covering all the manufacturing units, all India business operations and supporting services, was audited on Quality Management System by TUV India Private Limited (TUV) and the Company was recertified to ISO 9001:2008 certificate. The Environmental Management System for Himatnagar and Ankleshwar plants was audited by TUV and was recommended continuation of ISO 14001:2004 certificate.

Continual improvement and sustainability resulted in conservation of energy, reduction in waste generation, recycling of resources and cost savings.

Your Company accords high priority to health, safety and environment.

Material Developments during the financial year:

In follow up to the incident that occurred at the Ankleshwar site, Gujarat, on 11th March 2010, the Company on 11th April, 2011 was granted permanent re-instatement of all permissions for production of all products, except Ethoprophos from the relevant authorities' in Gujarat. Subsequently permanent re-instatement of permission for production of Ethoprophos was granted on 20th April, 2011.

Your Company's Board had approved the sale of around 100 acres of land at Thane. The Company has entered into a non-binding and exclusive agreement, for the proposed sale of the land, with Agile Real Estate Private Limited. The Company has received an earnest amount ofRs. 2,600 million for this exclusive arrangement. The Conveyance, Transfer, Sale and Possession of the said Thane land will be completed at a future date, subject to relevant approvals and permissions from the Government & other Statutory Authorities, as may be deemed necessary.

Corporate Sustainability and Social Responsibility:

The Bayer Group believes that its technical and commercial expertise entails a duty to contribute to sustainable development. The main areas that Bayer in India is involved in include Learning & Child Education, Youth Environmental Partnerships, Emergency Response, Partnerships with Associations to combat social and environmental problems and activities in the vicinity of the sites where Bayer has operations.

Making Science Make Sense Program (MSMS)

MSMS is an initiative that advances science literacy among students through hands-on, inquiry-based science learning. The program is designed in a specific way that includes live demonstrations, experiments, audio-visual tools and interactive sessions to enhance the learning experience and make sure that science is taught in a way that's enjoyable and fun. Currently, 20 schools in Mumbai and 4 schools in Ankleshwar participated in this program.

Bayer Young Environmental Envoy Program

As a research-based enterprise, Bayer also places great emphasis on promoting science education for the youth and has, therefore, been committed to promoting youth environmental programs for many years. In cooperation with the United Nations Environment Program, Bayer organises and promotes a number of specific projects which aim to improve knowledge about the environment among the youth and support them in their environmental commitment. Under the Bayer Young Environment Envoy Program, the participating students win a chance to represent India, alongwith youth delegates from other countries on an 'all - expense' paid study trip to Germany every year. The week long study trip gives students the unique opportunity to gain a first hand experience of best environmental protection practices by the Company, people and Government in industrialised countries.

Child Care Program (CCP): A social intervention model for tackling child labour and protecting their right to education

The CCP is one of the most successful initiatives of Bayer in India. No children in the hybrid cotton seed fields - that's the principle of Bayer. For the past 5 years, Bayer has worked effectively to implement a comprehensive multilevel CCP. The program has been rolled out in Andhra Pradesh, Karnataka and Tamil Nadu where Bayer has contract cotton seed production. It aims at getting children off the fields of contract farmers and into schools.

Learning for Life project - Impacting lives

A key component of the CCP is the educational module under the broader 'Learning for Life' initiative. It provides out-of-school children from cotton seed production farms with an access to education.

The Bayer-Ramanaidu Vignana Jyothi School of Agriculture was established as a part of the 'Learning for Life' strategy to foster education. This is a first-of-its-kind model developed and successfully implemented in an industry with a farm-based supply chain.

Your Company remains committed to Social Responsibility by continuing to be involved in community projects. The Bayer Group also undertakes several initiatives around the sites where it has operations. For example your Company organised transport and books for the differently abled children of Holy Cross Convent School, Thane and also distributed school uniforms, medicines and other school supplies to schools in the vicinity of Ankleshwar and Thane. Over the years, tree plantation drives have also been successfully implemented.

As an extension of the Company's activities in Sustainable Development and Climate Program, Bayer in India has enrolled itself as an invitational member with The Energy and Resources Institute - Business Council for Sustainable Development (TERI - BCSD). TERI- BCSD India is an independent and credible platform for corporate leaders to address issues related to sustainable development and promote leadership in environmental management, social responsibility and economic performance.

Bayer considers sustainable development to be the central model for companies in the 21st century. As a result, Bayer is committed to structuring its business processes in such a way that they meet the economic, ecological and social needs of society without compromising on development opportunities for future generations.

Human Resources:

This year, the employees of your Company participated in the Bayer Employee Survey and achieved excellent results. The survey was held across the Bayer Group Companies worldwide and Bayer CropScience in India showed significantly higher engagement scores. The engagement score of Bayer CropScience in India was 97%.

The importance of personal growth was reaffirmed with the launch of 26 different training and development initiatives to help the employees find their bearings in an increasingly challenging and complex work environment. More than 900 employees participated in 26 training initiatives and 72 participants were nominated for 37 external training programs.

In line with Bayer's philosophy of "Grow from Within", a large number of employees went through Assessment Center exercise during the year and qualified for promotion at National Level. The Assessment Center was conducted based on the specific skills and competencies identified in the XCEDO (BCS Training Academy).

In continuation to last year's efforts towards providing opportunities for Learning and Development to the employees, the second batch of Bayer Management Program "NEIV" was rolled out in October 2010 with 32 participants from across the Bayer Group in India.

An extension of BCS Training Academy - Kalpavruksh Prabodhini continued with providing training programs focusing on our Industrial Operations Group.

Your Company further continued its strong Employer Branding initiatives and built upon its Corporate Image in the market.

Employee relations during the year were harmonious and cordial.

Information pursuant to Section 217(2A) of the Companies Act, 1956:

The information as prescribed by Section 217(2A) of the Companies Act, 1956, read along with the Companies (Particulars of Employees) Rules, 1975, as amended is set out as an annexure to the Directors' Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Directors' Report and Accounts are being sent to the members excluding the statement giving particulars of employees under Section 217(2A). Any member interested in obtaining a copy of the statement may write to the Company Secretary at the Registered Office of the Company.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The information required under Section 217(1)(e) of the Companies Act, 1956 read along with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to these matters forms part of this Report and is annexed hereto.

Corporate Governance:

Your Company believes in transparency and has always maintained a very high level of Corporate Governance. As required by Clause 49 of the Listing Agreement, a detailed Report on Corporate Governance is given as an Annexure to this Report. Your Company is in full compliance with the requirements and disclosures that have to be made in this regard. A certificate from a Company Secretary in whole-time practice confirming compliance of the Corporate Governance requirements by the Company is attached to the Corporate Governance Report.

Management Discussion and Analysis:

A detailed review of operations, performance and future outlook of the Company is given separately under the head Management Discussion & Analysis Report.

Directors:

Dr. Vijay Mallya and Mr. A.K.R. Nedungadi retire by rotation and being eligible, offer themselves for re-appointment. A brief profile of Dr. Mallya and Mr. Nedungadi is given under the Corporate Governance Report.

Cost Audit:

In accordance with the directive received from the Central Government, every year, an audit of the cost accounts relating to Insecticides manufactured by the Company is required to be conducted by an auditor with the requisite qualifications as prescribed under Section 233B of the Companies Act, 1956.

The Board of Directors has appointed M/s. N. I. Mehta and Co., qualified Cost Accountants for the conduct of the audit of Insecticides - Technical Grade for the year ending 31 st March, 2012. The requisite approval from the Central Government for their appointment has been received. In terms of the Cost Audit Report Rules, 2001 the Cost Audit Report is required to be filed within 180 days from the end of the financial year. Your Company filed the Cost Audit Report for the year ended 31st March, 2010 on 19th September, 2010. The Cost Audit Report for the year ended 31st March, 2011 will be filed on or before 30th September, 2011.

Auditors:

M/s. Price Waterhouse, Chartered Accountants, (Firm Registration No. 007568S) retire as Statutory Auditors at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. M/s. Price Waterhouse, (Firm Registration No. 007568S) have communicated their unwillingness to be re-appointed as Auditors. The Board of Directors has on recommendation of the Audit Committee proposed the appointment of M/s. Price Waterhouse (Firm Registration No. 301112E) for the approval of the members at the ensuing Annual General Meeting. The Company has received a special notice from a member, in terms of provisions of Section 225 of the Companies Act, 1956, read with Section 190, proposing the appointment of M/s. Price Waterhouse (Firm Registration No. 301112E) as the Auditors of the Company from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting. Members are requested to consider and appoint M/s. Price Waterhouse (Firm Registration No. 301112E) as the Auditors of the Company for the year ending 31 st March, 2012.

A certificate from them has been received, to the effect that their appointment as Auditors of the Company, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956.

Acknowledgements:

The Board places on record its sincere appreciation for the dedicated services rendered by employees at all levels and the constructive cooperation extended by the staff unions and the officers' association. Your Directors would like to express their grateful appreciation for the assistance and support extended by all customers, government authorities, financial institutions, banks, shareholders, suppliers and other business associates. We also acknowledge the continual support and guidance from Bayer AG, Bayer CropScience AG and Bayer SAS.

For and on behalf of the Board of Directors

Bayer CropScience Limited

Dr. Vijay Mallya Chairman

Leverkusen, Germany, 19th May, 2011

 
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