Notes to Accounts of Bayer Cropscience Ltd.
Mar 31, 2023
Risk exposure:
The risks from defined benefit plans arise partly from the defined benefit obligations and partly from the investment in plan assets. The risks lie in the possibility that higher direct gratuity payments will have to be made to the beneficiaries and/ or that additional contributions will have to be made to plan assets in order to meet current and future defined benefit obligations.
i) Demographic risk
The gratuity plan provides a lump sum payment to vested employees at the time of retirement, death, incapacitation or termination of employment. Change in attrition rate or mortality assumption as compared to actual rate may result in change in benefit obligations, benefit expense and/or payments than previously anticipated.
ii) Investment risk
If the actual return on plan assets was below the return anticipated on the basis of the discount rate, the net defined benefit obligation would increase, assuming there were no changes in other parameters. This could happen as a result of a drop in return by LIC, Kotak or Aditya Birla.
iii) Interest rate risk
A decrease in prevailing market yield on Debt securities may increase the defined benefit obligation. This effect would be at least partially offset by the ensuing increase in the market values of the debt instruments held.
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.
b) Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year end are treated as short term employee benefits for measurement purpose. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end. Accumulated compensated absences, which are expected to be availed or encashed beyond 12 months from the end of the year end are treated as other long term employee benefits for measurement purpose. The Companyâs liability is actuarially determined by an independent actuary using the Projected Unit Credit Method at the end of each year. Actuarial losses/ gains are recognised in the Statement of Profit and Loss in the year in which they arise.
c) Provisions for other employee benefits mainly include those recorded for performance based bonus, variable payments and long-service awards.
e) Other Provisions represent provision for estimates made for probable liabilities/ claims arising out of pending disputes, litigations/ commercial transactions with statutory authorities/ third parties. The outflow with regard to the said matters depends on the exhaustion of remedies available to the Company under the law and hence the Company is not able to reasonably ascertain the timing of the outflow and hence expected utilisation is considered as more than 1 year.
During the year, 21 (Previous Year 22) is recognised under the head Finance Costs [Included in Note 29] as an additional provision towards Commercial and Other Matters.
f) Others includes gratuity obligations in respect of contractual manpower taken from outside agencies.
a) As at the year end, there are no amounts which are due for payment to Investor Education and Protection Fund (IEPF) under section 124 and 125 of the Companies Act, 2013, except the amount pertaining to unpaid dividend of 5 and the related equity shares. Subsequent to the balance sheet date, the said amount of unpaid dividend has been transferred to IEPF excluding 0.09 which is retained based on legal order pursuant to section 124 of the Companies Act, 2013. The transfer of related equity shares is under progress. Based on information and records available with the Company, all these relate to disputed shareholder matters of Monsanto India Limited, the erstwhile amalgamating company.
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35 Contingent Liabilities A) Claims against the Company not acknowledged as debts towards: |
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|
As At 31.03.2023 |
As At 31.03.2022 |
|
|
- Direct Tax Matters [Refer Note (a) below] |
1,872 |
2,026 |
|
- Indirect Tax Matters [Refer Note (b) below] |
1,640 |
1,391 |
|
- Litigation/ claims filed by customer/ third party [Refer Note (c) below] |
65 |
61 |
|
- Litigation/ demands raised by other Statutory Authorities [Refer Note (d) below] |
25 |
25 |
Future cash flows in respect of above, if any, is determinable only on receipt of judgement/ decisions pending with relevant authorities.
a) The contingent liability for direct tax matters mainly include 1,517 (Previous year 1,450) for issues in dispute relating to exemption of agriculture income. The Company has been consistently maintaining the position that such income is exempt from tax. The said claim has been in dispute, pending before various appellate authorities viz., Supreme Court, ITAT and CIT(A).
b) The disputed demands for indirect tax matters are mainly due to non-issuance of statutory forms, product classification, incorrect turnover, disallowance of input credit and sales return credit notes.
c) It mainly includes demand for crop failure.
d) It mainly includes demand raised towards provident fund.
B) The Company has received a notice from the Honâble Civil Court, Thiruvananthapuram intimating that a suit has been filed against the Company along with 15 other companies manufacturing Endosulfan, making them jointly and severally liable, for an amount of 1,617 in respect of recovery of amount paid as compensation by the State of Kerala to victims of Endosulfan. The Company is of the view that there is no link between use of Endosulfan and the health problems of the victims and hence it is not liable to repay the damages/ compensation. The matter is at the stage of filing written statement by some of the defendants. The next hearing is scheduled on June 5, 2023.
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36 Commitments |
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As At |
As At |
|
|
31.03.2023 |
31.03.2022 |
|
|
a) Capital Commitments |
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Property, Plant and Equipment |
92 |
140 |
|
Intangible Assets |
29 |
19 |
|
121 |
159 |
|
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b) Other Commitments |
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Contractual obligation for future repairs and maintenance on |
4 |
4 |
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Investment properties |
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Dividend on shares in abeyance [Refer Note 16(g)] |
_* |
_* |
37 Events occurring after the reporting period
Refer Note 40(b)(ii) Capital Management for the final dividend recommended by the directors which is subject to the approval of shareholders in the ensuing annual general meeting.
Fair Value Hierarchy:
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are:
a) recognised and measured at fair value and
b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed in Ind AS 113 - Fair Value Measurement. An explanation of each level follows underneath the table.
Level 1: It represents mutual funds measured using the closing Net Asset Value (NAV) as on Balance sheet date.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The fair value forward foreign exchange contracts is determined using forward exchange rates at the Balance Sheet date.
Level 3: If one or more of the significant inputs is not based on observable market data (Security Deposits), the instrument is included in level 3. The fair value of the security deposits with definite maturity period is determined using discounted cash flow analysis using an adjusted lending rate.
The carrying amounts of Trade Receivables, Cash and Cash Equivalents, Bank Balances, Accrued Interest Receivables, Advance recoverable in cash, Other Receivables, Trade Payables, Unpaid Dividends, Deposit from customers, Payable for capital purchases and Other Financial Liabilities are considered to be the same as their fair values, due to their short term nature.
The Company has financial opportunities at its disposal in the form of the market prices it can command, and is exposed to financial risks in the form of credit, liquidity and market risks. Market risks include currency, interest rate and price risk. The following paragraphs provide details of these and other financial opportunities and risks and how they are managed.
The management of financial opportunities and risks takes place using established, documented processes. One component is financial planning, which serves as the basis for determining liquidity risk and the future foreign currency and interest-rate risks.
a) Credit Risk:
Credit risks arise from the possibility that the value of receivables or other financial assets of the Company may be impaired because counterparties cannot meet their payment or other performance obligations.
To manage credit risks from trade receivables other than related party, the credit managers from Order to Cash department of the Company regularly analyse customerâs receivables, overdue and payment behaviors. Some of these receivables are collateralised and the same is used according to conditions. These could include advance payments, security deposits, post-dated cheques etc. Credit limits for this trade receivables are evaluated and set in line with Companyâs internal guidelines. There is no significant concentration of default risk.
Credit risks from financial transactions are managed independently by Treasury department. For banks and financial institutions, the Company has policies and operating guidelines in place to ensure that financial instrument transactions are only entered into with high quality banks and financial institutions. The Company had no other financial instrument that represents a significant concentration of credit risk. The surplus funds are invested in bank deposits and mutual funds.
(i) Expected Credit Loss (ECL) for Trade Receivables and Deposits:
The Company provides for ECL for trade receivables under simplified approach. The Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking information.
ECL for deposits are measured considering 12-month''s ECL.
b) Liquidity Risk:
Liquidity risks result from the possible inability of the Company to meet current or future payment obligations due to lack of cash or cash equivalents. The liquidity risk is assessed and managed by the Treasury department as a part of day to day and medium term liquidity planning.
The Companyâs liquidity risk policy is to maintain sufficient liquidity reserve at all times based on cash flow projections to meet payment obligation when it falls due. The primary source of liquidity is cash generated from operations.
Liquid assets are held mainly in the form of bank deposits and mutual fund investments. The Company has set up credit lines with the banks as additional source of funds, if required, totalling 3,864 as on March 31,2023.
The payment obligations from financial instruments are explained below:
The table below analyse the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for all financial liabilities essential for an understanding of timing of cash flows.
c) Market Risk:
(i) Currency Risk:
Foreign currency opportunities and risks for the Company result from changes in exchange rates and the related changes in the value of financial instruments (including receivables and payables) in the functional currency (INR). The Company is exposed to foreign exchange risk arising from foreign currency transactions primarily with respect to US Dollar.
To mitigate the currency fluctuation, receivables and payables in foreign currencies which arises from export and import of goods and services are hedged on net basis through forward exchange contracts. Majority of Company''s import and export of goods are denominated in INR currency thereby reducing foreign exchange risk to a very large extent.
The Company''s exposure to changes in foreign currency is not material.
(ii) Interest Rate Risk:
Interest-rate opportunities and risks result for the Company through changes in capital market interest rates, which in turn could lead to changes in the fair value of fixed-rate financial instruments and changes in interest payments/ income in case of floating-rate instruments.
Interest rate risk arising from borrowing is managed by negotiating fixed coupon interest rates from banks for the entire tenure.
(iii) Price Risk:
The Company is mainly exposed to the price risk due to its investment in mutual funds. In order to manage its price risk arising from investment in mutual funds, the Company diversifies its portfolio based on past performance. The impact of price risk with respect to investment in mutual fund is insignificant.
a) Risk management
I n the context of Capital Management of the Company, Capital includes issued capital, all other equity reserves attributable to the equity shareholders of the company and debts. The Company''s objective while managing capital is to safeguard its ability to continue as a going concern, so that it can continue to provide optimum returns to the shareholders and benefit for other stakeholders. Further its objective is to maintain an optimal capital structure to reduce the cost of capital. There has not been any change in this from the previous period.
The Vice Chairman & Managing Director & CEO, and Executive Director & CFO are identified as Chief Operating Decision Maker of the Company. They are responsible for allocating resources and assessing the performance of the operating segments. Accordingly, they have determined "Agri Care" as its operating Segment.
Thus the segment revenue, interest revenue, interest expense, depreciation and amortisation, segment assets and segment liabilities are all as reflected in the Financial Statement as at and for the year ended March 31,2023.
vi) Terms and conditions
There have been no guarantees provided or received for any related party receivables or payables. Outstanding balances at the year end are unsecured and interest free, and settlement occurs in cash. The Company has not recorded any impairment of receivables relating to amounts owed by related parties for the year ended March 31,2023 and March 31,2022.
Lease contracts in which the Company is the lessee mainly pertain to offices, residential premises, warehouses, vehicles, and plant and machinery. Lease contracts are negotiated individually and each contain different arrangements on extension, termination or purchase options except in case of vehicle leases. Offices, residential premises, vehicles and warehouses leases generally contain clauses that prohibit subleasing except with the consent of the lessor.
The details pertaining to right-of-use assets, additions to right-of-use assets and amortisation on right-of-use assets are provided in Note 2 - Property, Plant and Equipment. The maturities of the outstanding lease payments are provided in Note 39 - Financial Risk Management. Cash outflows related to lease activities for the current year amounted to 409 (Previous Year 263).
The Company has recognised 395 (Previous Year 242) towards amortisation, 45 (Previous Year 24) towards Interest expense for the unwinding of discount on lease liabilities and 120 (Previous Year 114) towards expenses for short-term leases in the Statement of Profit and Loss.
(i) Exceptional items for the current year amounting to 1,038 represents profit on sale of its Environmental Science Business (Divested Products) which offers solutions to control pests, diseases, and weeds in nonagricultural areas to â2022 ES Discovery India Private Limitedâ (âESDIPLâ) on a slump sale basis effective October 1,2022 pursuant to the approval accorded by the Board at its meeting held on September 28, 2022.
Pending transfer of product and import registrations in its favour, âESDIPLâ has entered into an interim arrangement to procure the Divested Products from the Company for further sale/ distribution.
(ii) Exceptional items for the previous year amounting to 585 represents profit on sale of part of Companyâs seeds distribution business, viz. cotton, millet, mustard and sorghum crops along with investment property at Patancheru, Telangana to Crystal Crop Protection Limited on a slump sale basis on December 1,2021, pursuant to approval accorded by the Board of Directors of the Company at its meeting held on October 13, 2021.
47 (i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(ii) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
48 In terms of the MCA notification dated August 05, 2022, the Central Government has notified the Companies (Accounts) Fourth Amendment Rules, 2022, the Company is in the process of complying with the requirement of maintenance of back-up of its books of account maintained in electronic mode on server(s) physically located in India on a daily basis. The books of account of the Company are maintained in electronic mode and these are readily accessible in India at all times. Currently, the Company is maintaining back-up of books of account on server physically located in India on a periodic basis.
49 By its order published in the Official Gazette on October 25, 2022, the Ministry of Agriculture and Farmersâ Welfare, Government of India has notified that Glyphosate will be used only through pest control operators. Further to writ petitions filed by industry associations challenging the said notification before the Honâble Delhi High Court, and the hearings held on various dates thereafter, the Government of India submitted that it will not implement the said notification and committed to revisit the matter and take a conscious decision which will be communicated to the court before the next hearing date. The Management continues to work with all stakeholders to best serve the critical weed management needs of the farmers.
50 The financial statements are approved for issue by the Companyâs Board of Directors on May 24, 2023.
Mar 31, 2022
Recent Accounting Pronouncements
The Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards. On March 23, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, as below.
The amendments to Ind AS along with impact evaluation carried out by the Company is given below:
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Amendments to standards/ interpretations |
Impact |
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Amendment to Ind AS 101 - First time Adoption of Indian Accounting Standards amendments relating to allowing Subsidiary to measure cumulative translation differences for all foreign operations at the carrying amount that would be included in the parentâs consolidated financial statements |
Not applicable |
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Amendment to Ind AS 103 - Business Combination amendment relating revised Conceptual Framework for Financial Reporting under Indian Accounting Standards, application of Ind AS 37 to determine whether at the acquisition date a present obligation exists as a result of past events and no recognition of contingent assets acquired in a business combination |
Not applicable |
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Amendment to Ind AS 109 - Financial Instruments amendment relating to the nature of fees that an entity could include when it applies the â10%â test in assessing whether to derecognise a financial liability |
No impact |
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Amendment to Ind AS 16 - Property, Plant and Equipment amendment clarifying that excess of net sale proceeds of items produced over the cost of testing, if any, shall not be recognised in the statement of profit or loss but deducted from the directly attributable costs considered as part of cost of an item of property, plant and equipment |
No impact |
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Amendment to Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets amendment relating to the costs that relate directly to the contract for the purpose of assessing whether a contract is onerous |
No impact |
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Ind AS 41 - Agriculture amendment relating to exclusion of cash flows for taxation when measuring fair value |
Not applicable |
Estimation of fair value:
The fair value of Land and Building under Investment Properties has been determined by an external independent registered property valuer having recognised professional qualifications. The current prices in an active market for similar properties has been used to determine fair value of investment properties. The fair value measurement investment properties has been categorised as Level 3 based on the inputs in the valuation.
13 Trade Receivables [Refer Note 42] (Contd.)
(a) The Company is distributor of Bayer BioScience Private Limited (BBPL) operating in the territory of India and Nepal for distribution of seeds. As the Company is a limited risk distributor in this commercial arrangement, BBPL recognises the risk of overdue receivables to its account. The Company has recovered, overdue outstanding receivables towards distribution of seeds to third parties, from BBPL amount aggregating 20 (Previous Year 20) towards recoupment of loss as recovery is less probable. As and when the Company recovers any amount against such overdue, or any part thereof, from the respective customers, the Company is required to pay to BBPL such amounts so recovered. Accordingly, the amount recovered from BBPL as on March 31, 2022 (net) 305 (Previous Year 359) towards is included in âOther Financial Liabilitiesâ in Note 21.
(b) There are no customers with receivables exceeding 5% of total trade receivables.
a) Rights, preferences and restrictions attached to Equity Shares:
The Company has one class of Equity Shares having a par value of '' 10/- per share. Each Shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation, the Equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
g) Shares reserved for issue under commitment:
In Monsanto India Limited (MIL/ Transferor Company), there has been a dispute with regards to the transfer of 100 shares, held by a shareholder. In view of the pending dispute, bonus entitlement relating to this 100 shares has been kept in abeyance by the Transferor Company. Pursuant to the amalgamation of MIL with the Company effective from September 16, 2019, the Company shall continue to keep such entitlements in abeyance.
a) Employee Benefit Obligation
Disclosure as required under Ind AS 19 - Employee Benefits:
A. Defined contribution plan:
The Companyâs defined contribution plans are Superannuation, Employeesâ State Insurance Scheme and Provident Fund administered by Government authorities/ trustees since the Company has no further obligation beyond making the contributions.
B. Defined benefit obligation:
The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972/ Company policy. Employees who are in continuous service for a period of 5 years or more are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employeeâs last drawn salary per month computed proportionately as per the Payment of Gratuity Act, 1972/ Company policy multiplied for the number of years of service.
The plan asset for the funded gratuity plan is invested in insurer managed fund administered by Life Insurance Corporation of India (âLICâ), Kotak Life Insurance Limited (Kotak) and Aditya Birla Sun Life Insurance Company Limited (Aditya Birla) independently. 71% of the plan asset is invested in debt securities and 29% of the plan asset is invested in equity instruments.
Provisions were established for defined benefit obligations pertaining to gratuity. The net obligation was accounted as follows:
4. Risk exposure:
The risks from defined benefit plans arise partly from the defined benefit obligations and partly from the investment in plan assets. The risks lie in the possibility that higher direct gratuity payments will have to be made to the beneficiaries and/ or that additional contributions will have to be made to plan assets in order to meet current and future defined benefit obligations.
i) Demographic risk
The gratuity plan provides a lump sum payment to vested employees at the time of retirement, death, incapacitation or termination of employment. Change in attrition rate or mortality assumption as compared to actual rate may result in change in benefit obligations, benefit expense and/or payments than previously anticipated.
ii) Investment risk
If the actual return on plan assets was below the return anticipated on the basis of the discount rate, the net defined benefit obligation would increase, assuming there were no changes in other parameters. This could happen as a result of a drop in return by LIC, Kotak or Aditya Birla.
iii) Interest rate risk
A decrease in prevailing market yield on Debt securities may increase the defined benefit obligation. This effect would be at least partially offset by the ensuing increase in the market values of the debt instruments held.
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.
Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year end are treated as short term employee benefits for measurement purpose. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end. Accumulated compensated absences, which are expected to be availed or encashed beyond 12 months from the end of the year end are treated as other long term employee benefits for measurement purpose. The Companyâs liability is actuarially determined by an independent actuary using the Projected Unit Credit Method at the end of each year. Actuarial losses/ gains are recognised in the Statement of Profit and Loss in the year in which they arise.
Provisions for other employee benefits include those recorded for performance based bonus, variable payments, long-service awards and expense in relation to separation of employees.
Other Provisions represent provision for estimates made for probable liabilities/ claims arising out of pending disputes, litigations/ commercial transactions with statutory authorities/ third parties. The outflow with regard to the said matters depends on the exhaustion of remedies available to the Company under the law and hence the Company is not able to reasonably ascertain the timing of the outflow and hence expected utilisation is considered as more than 1 year.
During the year, 22 (Previous Year 22) is recognised under the head Finance Costs [Included in Note 29] as an additional provision towards Commercial and Other Matters.
Others includes gratuity obligations in respect of contractual manpower taken from outside agencies.
Future cash flows in respect of above, if any, is determinable only on receipt of judgement/ decisions pending with relevant authorities.
(a) The contingent liability for direct tax matters mainly include 1,450 (Previous year 1,388) for issues in dispute relating to exemption of agriculture income. The Company has been consistently maintaining the position that such income is exempt from tax. The said claim has been in dispute, pending before various appellate authorities viz., Supreme Court, ITAT and CIT(A).
(b) The disputed demands for indirect tax matters are mainly due to non-issuance of statutory forms, product classification, incorrect turnover and disallowance of input credit.
(c) It mainly includes demand for crop failure.
(d) It mainly includes demand raised towards provident fund.
(B) The Company has received a notice from the Honâble Civil Court, Thiruvananthapuram intimating that a suit has been filed against the Company along with 15 other companies manufacturing Endosulfan, making them jointly and severally liable, for an amount of 1,617 in respect of recovery of amount paid as compensation by the State of Kerala to victims of Endosulfan. The Company is of the view that there is no link between use of Endosulfan and the health problems of the victims and hence it is not liable to repay the damages/ compensation. The matter is at initial stage and scheduled for hearing on June 8, 2022.
Fair Value Hierarchy:
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are:
(a) recognised and measured at fair value and
(b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed in Ind AS 113 - Fair Value Measurement. An explanation of each level follows underneath the table.
Level 1: It represents mutual funds measured using the closing Net Asset Value (NAV).
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The fair value forward foreign exchange contracts is determined using forward exchange rates at the Balance Sheet date.
Level 3: If one or more of the significant inputs is not based on observable market data (Security Deposits), the instrument is included in level 3. The fair value of the security deposits with definite maturity period is determined using discounted cash flow analysis using an adjusted lending rate.
There are no transfers between level 1, level 2 and level 3 during the year.
The carrying amounts of Trade Receivables, Cash, Bank Balances, Accrued Interest Receivables, Other Receivables, Trade Payables, Unpaid Dividends, Deposit from customers, Payable for capital purchases and Other Financial Liabilities are considered to be the same as their fair values, due to their short term nature.
The Company has financial opportunities at its disposal in the form of the market prices it can command, and is exposed to financial risks in the form of credit, liquidity and market risks. Market risks include currency, interest rate and price risk. The following paragraphs provide details of these and other financial opportunities and risks and how they are managed.
The management of financial opportunities and risks takes place using established, documented processes. One component is financial planning, which serves as the basis for determining liquidity risk and the future foreign currency and interest-rate risks.
39 Financial Risk Management (Contd.)
(a) Credit Risk:
Credit risks arise from the possibility that the value of receivables or other financial assets of the Company may be impaired because counterparties cannot meet their payment or other performance obligations.
To manage credit risks from trade receivables other than Related Party, the credit managers from Order to Cash department of the Company regularly analyse customerâs receivables, overdue and payment behaviours. Some of these receivables are collateralised and the same is used according to conditions. These could include advance payments, security deposits, post-dated cheques etc. Credit limits for this trade receivables are evaluated and set in line with Companyâs internal guidelines. There is no significant concentration of default risk.
Credit risks from financial transactions are managed independently by Treasury department. For banks and financial institutions, the Company has policies and operating guidelines in place to ensure that financial instrument transactions are only entered into with high quality banks and financial institutions. The Company had no other financial instrument that represents a significant concentration of credit risk. The surplus funds are invested in bank deposits and mutual fund investments.
(i) Expected Credit Loss (ECL) for Trade Receivables and Deposits:
The Company provides for ECL for trade receivables under simplified approach. The Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking information.
(ii) Expected Credit Loss (ECL) for Financial Assets other than Trade Receivables and Deposits:
There is no credit risk on Financial Assets other than mentioned in (i) above from initial recognition. Accordingly, no provision for ECL has been recognised.
(b) Liquidity Risk:
Liquidity risks result from the possible inability of the Company to meet current or future payment obligations due to lack of cash or cash equivalents. The liquidity risk is assessed and managed by the Treasury department as a part of day to day and medium term liquidity planning.
The Companyâs liquidity risk policy is to maintain sufficient liquidity reserve at all times based on cash flow projections to meet payment obligation when it falls due. The primary source of liquidity is cash generated from operations.
Liquid assets are held mainly in the form of bank deposits and mutual fund investments. The Company in addition has set up credit lines with the banks as additional source of funds, if required, for value 5,369 as on March 31,2022.
39 Financial Risk Management (Contd.)
The payment obligations from financial instruments are explained below:
The table below analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for all financial liabilities essential for an understanding of timing of Cash Flows.
(c) Market Risk:
(i) Currency Risk:
Foreign currency opportunities and risks for the Company result from changes in exchange rates and the related changes in the value of financial instruments (including receivables and payables) in the functional currency (INR). The Company is exposed to foreign exchange risk arising from foreign currency transactions primarily with respect to US Dollar.
To mitigate the currency fluctuation, receivables and payables in foreign currencies which arises from export and import of goods and services are considered for hedging on net basis through forward exchange contracts. Majority of Companyâs import and export of goods are denominated in INR currency thereby reducing foreign exchange risk to a very large extent.
The Companyâs exposure to changes in foreign currency is not material.
(ii) Interest Rate Risk:
Interest-rate opportunities and risks result for the Company through changes in capital market interest rates, which in turn could lead to changes in the fair value of fixed-rate financial instruments and changes in interest payments/ income in case of floating-rate instruments.
Interest rate risk arising from borrowing is managed by negotiating fixed coupon interest rates from banks for the entire tenure.
(iii) Price Risk:
The Company is mainly exposed to the price risk due to its investment in mutual funds. In order to manage its price risk arising from investment in mutual funds, the Company diversifies its portfolio based on past performance. The impact of price risk with respect to investment in mutual fund is insignificant.
(a) Risk management
The Companyâs objective while managing capital is to safeguard its ability to continue as a going concern, so that it can continue to provide optimum returns to the shareholders and to other stakeholders. Further its objective is to maintain an optimal capital structure to reduce the cost of capital.
The Vice Chairman & Managing Director & CEO, and Executive Director & CFO are identified as Chief Operating Decision Maker of the Company. They are responsible for allocating resources and assessing the performance of the operating segments. Accordingly, they have determined âAgri Careâ as its operating Segment.
Thus the segment revenue, interest revenue, interest expense, depreciation and amortisation, segment assets and segment liabilities are all as reflected in the Financial Statement as at and for the year ended March 31, 2022.
vi) Terms and conditions
There have been no guarantees provided or received for any related party receivables or payables. Outstanding balances at the year end are unsecured and interest free, and settlement occurs in cash. The Company has not recorded any impairment of receivables relating to amounts owed by related parties for the year ended March 31,2022 and March 31,2021.
Earnings per share are determined according to Ind AS 33 - Earnings per Share by dividing Profit after tax attributable to shareholders of the Company by the weighted average number of equity shares outstanding during the financial year.
Lease contracts in which the Company is the lessee mainly pertain to offices, residential premises, warehouses, vehicles, and plant and machinery. Lease contracts are negotiated individually and each contain different arrangements on extension, termination or purchase options except in case of vehicle leases. Offices, residential premises and warehouses leases generally contain clauses that prohibit subleasing except with the consent of the lessor.
The details pertaining to right-of-use assets, additions to right-of-use assets and amortisation on right-of-use assets are provided in Note 2 - Property, Plant and Equipment. The maturities of the outstanding lease payments are provided in Note 39 - Financial Risk Management. Cash outflows related to lease activities for the current year amounted to 263 (Previous Year 355).
The Company has recognised 242 (Previous Year 316) towards amortisation, 24 (Previous Year 30) towards Interest expense for the unwinding of discount on lease liabilities and 114 (Previous Year 97) towards expenses for short-term leases in the Statement of Profit and Loss.
(i) Profit After Tax - Exceptional items (net of tax) Depreciation and Amortisation Finance Cost Profit/ Loss on Tangible/ Intangible assets ECL provision for Trade Receivables Unrealised profit/ gain on Investment/ Foreign Exchange
(ii) Repayment of Lease Liabilities Repayment of Short term borrowings
(iii) Earnings available for debt service has increased mainly due to additional tax expense recognised in the previous year under The Direct Tax Vivad Se Vishwas Act, 2020 [Refer Note 32(e)]
(iv) Profit After Tax has increased mainly due to additional tax expense recognised in the previous year under The Direct Tax Vivad Se Vishwas Act, 2020 [Refer Note 32(e)]
(v) Reduction in interest rates in previous year due to ample liquidity arising from Reserve Bank of India measures during Covid -19
46 Exceptional items consist of:
(i) Reversal of provision expense in relation to separation of employees arising from restructuring measures due to amalgamation of Monsanto India Limited with Bayer CropScience Limited and Bayer 2022 global efficiency program.
(ii) Profit on sale of part of Companyâs seeds distribution business, viz. cotton, millet, mustard and sorghum crops along with investment property at Patancheru, Telengana to Crystal Crop Protection Limited on a slump sale basis on December 1,2021, pursuant to approval accorded by the Board of Directors of the Company at its meeting held on October 13, 2021.
47 (i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies),
including foreign entities (Intermediaries) with the understanding that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(ii) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
48 Bayer AG in a press release dated March 10, 2022 announced the global sale of Bayerâs Environmental Science Professional business to Cinven. The Companyâs sale of this Environmental Science business is subject to finalisation of arrangement with the acquirer and necessary approval(s) by the Board of Directors of the Company. Revenue from operation for the year ended March 31,2022 includes sale of goods of 683 from the Environmental Science business.
Mar 31, 2021
Defined benefit obligation:
The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972/ Company policy. Employees who are in continuous service for a period of 5 years or more are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employee''s last drawn salary per month computed proportionately as per the Payment of Gratuity Act, 1972/ Company policy multiplied for the number of years of service.
The plan asset for the funded gratuity plan is invested in insurer managed fund administered by Life Insurance Corporation of India (''LIC''), Kotak Life Insurance Limited (Kotak) and Aditya Birla Sun Life Insurance Company Limited (Aditya Birla) independently. 79% of the plan asset is invested in debt securities and 21% of the plan asset is invested in equity instruments.
Provisions were established for defined benefit obligations pertaining to gratuity. The net obligation was accounted as follows:
Risk exposure:
The risks from defined benefit plans arise partly from the defined benefit obligations and partly from the investment in plan assets. The risks lie in the possibility that higher direct gratuity payments will have to be made to the beneficiaries and/ or that additional contributions will have to be made to plan assets in order to meet current and future defined benefit obligations.
Demographic risk
The gratuity plan provides a lump sum payment to vested employees at the time of retirement, death, incapacitation or termination of employment. Change in attrition rate or mortality assumption as compared to actual rate may result in change in benefit obligations, benefit expense and/or payments than previously anticipated.
Investment risk
If the actual return on plan assets was below the return anticipated on the basis of the discount rate, the net defined benefit obligation would increase, assuming there were no changes in other parameters. This could happen as a result of a drop in return by LIC, Kotak or Aditya Birla.
Interest rate risk
A decrease in prevailing market yield on Debt securities may increase the defined benefit obligation. This effect would be at least partially offset by the ensuing increase in the market values of the debt instruments held.
Measurement parameters and their sensitivities
The following parameters were used to measure the obligation
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.
Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year end are treated as short term employee benefits for measurement purpose. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end. Accumulated compensated absences, which are expected to be availed or encashed beyond 12 months from the end of the year end are treated as other long term employee benefits for measurement purpose. The Companyâs liability is actuarially determined by an independent actuary using the Projected Unit Credit Method at the end of each year. Actuarial losses/ gains are recognised in the Statement of Profit and Loss in the year in which they arise.
Provisions for other employee benefits include those recorded for performance based bonus, variable payments, long-service awards and expense in relation to separation of employees.
It represents provision for estimates made for probable liabilities/ claims arising out of pending disputes, litigations/ commercial transactions with statutory authorities/ third parties. The outflow with regard to the said matters depends on the exhaustion of remedies available to the Company under the law and hence the Company is not able to reasonably ascertain the timing of the outflow and hence expected utilisation is considered as more than 1 year.
During the year, 22 (Previous Year 21) is recognised under the head Finance Costs [Included in Note 29] as an additional provision towards Commercial Matters.
Others include gratuity obligations towards contractual manpower taken from outside agencies.
The contingent liability for direct tax matters mainly include issues in dispute relating to exemption of agriculture income. The Company has been consistently maintaining the position that such income is exempt from tax. The said claim has been in dispute, pending before various appellate authorities viz., Supreme Court, ITAT and CIT(A). It includes 1,388 related to agriculture income which is pending dispute before Supreme Court, ITAT and CIT(A).
During the year, the Company had filed an application under The Direct Tax Vivad Se Vishwas Act, 2020 (VSV Act) and related rules, in respect of certain past years, with a view to give certainty and effectively close long pending disputes and litigations under the Income Tax Act, 1961. Consequent to tax authority''s order under VSV Act, tax expense of 1,272 (net) was recognised in current year which resulted in reduction of related contingent liability of 5,381. This settlement will not prejudice the claim for exemption made with respect to remaining past and future years in accordance with the provisions of VSV Act and related rules.
The disputed demands for indirect tax matters are mainly due to non-issuance of statutory forms, product classification, incorrect turnover and disallowance of input credit.
It mainly includes demand for crop failure.
It mainly includes demand raised towards provident fund.
The Company has received a notice from the Hon''ble Civil Court, Thiruvananthapuram intimating that a suit has been filed against the Company along with 15 other manufacturing companies of Endosulfan, making them jointly and severally liable, for an amount of 1,617 in respect of recovery of amount paid by the State of Kerala to victims of Endosulfan as compensation. The Company is of the view that there is no link between use of Endosulfan and the health problems of the victims and hence it is not liable to the repay the damages/ compensation.
38 Fair value measurement (contd.)
Fair Value Hierarchy:
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are:
(a) recognised and measured at fair value and
(b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed in Ind AS 113 - Fair Value Measurement. An explanation of each level follows underneath the table.
Level 1: It includes financial instruments measured using quoted prices and the mutual funds are measured using the closing Net Asset Value (NAV).
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The fair value of the forward foreign exchange contracts is determined using forward exchange rates at the Balance Sheet date.
Level 3: If one or more of the significant inputs is not based on observable market data (Security Deposits), the instrument is included in level 3. The fair value of the security deposits with definite maturity period is determined using discounted cash flow analysis using an adjusted lending rate.
There are no transfers between level 1, level 2 and level 3 during the year.
The carrying amounts of Trade Receivables, Cash and Cash Equivalents, Bank Balances, Accrued Interest Receivables, Other Receivables, Trade Payables, Unpaid Dividends, Deposit from customers, Payable for capital purchases and Other Financial Liabilities are considered to be the same as their fair values, due to their short term nature.
The Company has financial opportunities at its disposal in the form of the market prices it can command, and is exposed to financial risks in the form of credit, liquidity and market risks. Market risks include currency, interest rate and price risk. The following paragraphs provide details of these and other financial opportunities and risks and how they are managed.
The management of financial opportunities and risks takes place using established, documented processes. One component is financial planning, which serves as the basis for determining liquidity risk and the future foreign currency and interest-rate risks.
i Credit Risk:
Credit risks arise from the possibility that the value of receivables or other financial assets of the Company may be impaired because counterparties cannot meet their payment or other performance obligations.
To manage credit risks from trade receivables other than Related Party, the credit managers from Order to Cash department of the Company regularly analyse customer''s receivables, overdue and payment behaviors. Some of these receivables are collateralised and the same is used according to conditions. These could include advance payments, security deposits, post-dated cheques etc. Credit limits for this trade receivables are evaluated and set in line with Companyâs internal guidelines. There is no significant concentration of default risk.
Credit risks from financial transactions are managed independently by Finance department. For banks and financial institutions, the Company has policies and operating guidelines in place to ensure that financial instrument transactions are only entered into with high quality banks and financial institutions. The Company had no other financial instrument that represents a significant concentration of credit risk. The surplus funds are invested in bank deposits and mutual fund investments.
(i) Expected Credit Loss (ECL) for Trade Receivables and Deposits:
The Company provides for ECL for trade receivables under simplified approach. The Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking information.
ECL for deposits are measured considering 12-month''s ECL.
) Liquidity Risk:
Liquidity risks result from the possible inability of the Company to meet current or future payment obligations due to lack of cash or cash equivalents. The liquidity risk is assessed and managed by the Finance department as a part of day to day and medium term liquidity planning.
The Companyâs liquidity risk policy is to maintain sufficient liquidity reserve at all times based on cash flow projections to meet payment obligation when it falls due. The primary source of liquidity is cash generated from operations.
Liquid assets are held mainly in the form of bank deposits and mutual fund investments. The Company in addition has set up credit lines with the banks as additional source of funds, if required, for value 5,662 as on March 31, 2021.
Financial Risk Management (contd.)
The payment obligations from financial instruments are explained below:
The table below analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for all financial liabilities essential for an understanding of timing of cash flows.
Market Risk:
(i) Currency Risk:
Foreign currency opportunities and risks for the Company result from changes in exchange rates and the related changes in the value of financial instruments (including receivables and payables) in the functional currency (INR). The Company is exposed to foreign exchange risk arising from foreign currency transactions primarily with respect to US Dollar.
To mitigate the currency fluctuation, receivables and payables in foreign currencies which arises from export and import of goods and services are considered for hedging on net basis through forward exchange contracts. Majority of Company''s import and export of goods are denominated in INR currency thereby reducing foreign exchange risk to a very large extent.
The Company''s exposure to changes in foreign currency is not material.
(ii) Interest Rate Risk:
Interest-rate opportunities and risks result for the Company through changes in capital market interest rates, which in turn could lead to changes in the fair value of fixed-rate financial instruments and changes in interest payments/ income in case of floating-rate instruments.
Interest rate risk arising from borrowing is managed by negotiating fixed coupon interest rates from banks for the entire tenure.
(iii) Price Risk:
The Company is mainly exposed to the price risk due to its investment in mutual funds. In order to manage its price risk arising from investment in mutual funds, the Company diversifies its portfolio based on past performance. The impact of price risk with respect to investment in mutual fund is insignificant.
(a) Risk management
The Company''s objective while managing capital is to safeguard its ability to continue as a going concern, so that it can continue to provide optimum returns to the shareholders and to other stakeholders. Further its objective is to maintain an optimal capital structure to reduce the cost of capital.
The Vice Chairman & Managing Director & CEO, and Executive Director & CFO are identified as Chief Operating Decision Makers of the Company. They are responsible for allocating resources and assessing the performance of the operating segments. Accordingly, they have determined "Agri Care" as its operating segment.
Thus the segment revenue, interest revenue, interest expense, depreciation and amortisation, segment assets and segment liabilities are reflected in the Financial Statement as at and for the year ended March 31,2021
(b) Revenues from transactions with a single customer in no case exceeded 10% of the Companyâs sales in current as well as previous year.
(c) Non-current assets (excluding Deferred/ Current Tax and Financial Assets)
Terms and conditions
There have been no guarantees provided or received for any related party receivables or payables. Outstanding balances at the year end are unsecured and interest free, and settlement occurs in cash. The Company has not recorded any impairment of receivables relating to amounts owed by related parties for the year ended March 31, 2021 and March 31, 2020.
Earnings per share are determined according to Ind AS 33 - Earnings per Share by dividing Profit after tax attributable to shareholders of the Company by the weighted average number of equity shares outstanding during the financial year.
i Amalgamation of Monsanto India Limited (MIL):
(i) Monsanto India Limited (MIL) was engaged in business of production and sale of chemicals and hybrid seeds. It has a chemical production unit at Silvassa, hybrid seeds drying and processing unit at Hyderabad and breeding stations at Bangalore and Udaipur.
(ii) I n previous year, the Scheme of Amalgamation (''the Scheme'') of Monsanto India Limited (MIL) with Bayer CropScience Limited (''BCSL) was approved by Hon''ble National Company Law Tribunal vide its order dated September 13, 2019 (âthe NCLT Orderâ). The certified copy of the NCLT Order was filed with Registrar of Companies on September 16, 2019. Consequently the Scheme had become operative from September 16, 2019 (''Effective Date'') and effective from April 1, 2019 (''Appointed Date'').
The Company had accounted the amalgamation as per Appendix C of Ind AS 103 - âBusiness Combinations'' as common control transaction from June 7, 2018, the date on which common control was achieved by Bayer AG because of global acquisition of Monsanto Company, USA.
In consideration of the amalgamation, BCSL had allotted 2 (two) equity shares of '' 10/- each credited as fully paid up shares of BCSL, for every 3 (three) equity shares of '' 10/- each in MIL, to those whose name were recorded in the register of members on September 30, 2019 (''Record date'') on receipt of listing approval from BSE on November 14, 2019.
Lease contracts in which the Company is the lessee mainly pertain to offices, residential premises, warehouses, vehicles, and plant and machinery. Lease contracts are negotiated individually and each contain different arrangements on extension, termination or purchase options except in case of vehicle leases. Offices, residential premises and warehouses leases generally contain clauses that prohibit subleasing except with the consent of the lessor.
The details pertaining to right-of-use assets, additions to right-of-use assets and depreciation on right-of-use assets are provided in Note 2 - Property, Plant and Equipment. The maturities of the outstanding lease payments are provided in Note 39 - Financial Risk Management. Cash outflows related to lease activities for the current year amounted to 355 (Previous Year 243).
The Company has recognised 316 (Previous Year 212) towards depreciation, 30 (Previous Year 41) towards Interest expense for the unwinding of discount on lease liabilities and 97 (Previous Year 119) towards expenses for short-term leases in the Statement of Profit and Loss.
Leases: (contd.)
Transition Impact:
Effective April 1, 2019, the Company had adopted Ind AS 116 - Leases using the modified retrospective method. On transition, the first-time application of Ind AS 116 as of April 1,2019 had resulted in the recognition of lease liabilities of 464 and Right-of-use assets of 480 adjusted by the amount of prepaid lease payments of 16. The adoption of Ind AS 116 did not have any material impact on Statement of profit and loss and earnings per share.
The Management has considered the possible effects, if any, that may result from second wave of COVID-19 pandemic in the country on the carrying amounts of current assets after considering internal and external sources of information as at the date of approval of these financial statements. Given the uncertainties associated with pandemic''s nature and duration, the actuals may differ from the estimates considered in these financial statements. The Company continues to closely monitor the situation.
(i) Expense in relation to separation of employees arising from restructuring measures due to amalgamation of Monsanto India Limited with Bayer CropScience Limited and Bayer 2022 global efficiency program.
(ii) Amalgamation related expenses i.e. stamp duty, professional/ consulting fees and other costs.
Mar 31, 2019
1. Company Profile
Bayer CropScience Limited (âthe Companyâ) is a Company incorporated under the Companies Act, 1956 and having its registered office at Bayer House, Central Avenue, Hiranandani Estate, Thane (West) - 400 607, India. The Company is engaged in âAgri Care'' business which primarily includes manufacture, sale and distribution of insecticides, fungicides, herbicide and various other agrochemical products, and sale and distribution of hybrid seeds. Out of the total paid-up share capital of the Company, 68.69% is held by its promoters. The ultimate parent company is Bayer AG, Germany. The Company is listed on the Bombay Stock Exchange, Mumbai. The Company has its own manufacturing site at Himatnagar in the state of Gujarat.
a) Deemed cost of leasehold improvements as on April 1, 2015 is Nil i.e. fully depreciated over a period of time and hence the same has not been presented in the above table.
b) Figures shown in brackets are in respect of previous year.
* Amount is below the rounding off norm adopted by the Company.
** Additions to Buildings, Plant and Equipment represent amount of expenditure incurred in the course of its construction.
a) Figures shown in brackets are in respect of previous year.
b) The Company had given Land and portion of a Building on operating lease under cancellable lease arrangement. Investment properties are distinguished from owner-occupied property based on area covered under lease arrangements. Refer Note 33 for disclosure of contractual obligations to purchase, construct or develop investment properties and for its repairs, maintenance or enhancements respectively.
Estimation of fair value:
The fair value of investment properties has been determined by an external independent property valuer having recognised professional qualifications for Land and based on internal valuation for Building. The current prices in an active market for similar properties has been used to determine fair value of investment properties. The fair value measurement of investment properties has been categorised as Level 3 based on the inputs in the valuation.
a) Deemed cost of Goodwill and Technical Knowhow as on April 1, 2015 is Nil i.e. fully amortised over a period of time and hence the same has not been presented in the above table.
b) Figures shown in brackets are in respect of previous year.
* Amount is below the rounding off norm adopted by the Company.
a) The Company has acquired 1,350,000 equity shares of Monsanto India Limited (MIL) at a price of Rs. 2,926.87 per share, aggregating 3,951 (âInvestmentâ), while acting as Person Acting in Concert (the âPACâ) in the Open offer made by Bayer AG (Acquirer) to the public shareholders of MIL, pursuant to the resolution passed by the Board of Directors of the Company at its meeting held on May 31, 2018. As per Ind AS 109 Financial Instruments, the Company has recognised loss of 48 in Other Expenses [Refer Note 28] on account of initial recognition of Investments at fair value as on the date of Closing and Acceptance of the Open Offer i.e. September 6, 2018.
a) The Company is the distributor of Bayer BioScience Private Limited (BBPL) operating in the territory of India and Nepal for distribution of seeds. As the Company is a limited risk distributor in this commercial arrangement, BBPL recognises the risk of overdue receivables to its account. As of March 31, 2019, the Company has certain overdue outstanding receivables towards distribution of seeds to third parties aggregating 4 (Previous Year 5). The Company has recovered this amount from BBPL towards recoupment of loss arising out of the third party overdue for which recovery is less probable. Accordingly, the amount recovered from BBPL is included in âOther Financial Liabilitiesâ in Note 18. As and when the Company recovers any amount against such overdue, or any part thereof, from the respective customers, the Company is required to pay to BBPL such amounts so recovered. During the year, the Company has recovered 8 (Previous Year Nil) out of such over dues and is paid to BBPL subsequent to year end.
b) Current Year does not include receivable exceeding 5% of total trade receivables (Previous Year: Bayer AG 607).
a) Rights, preferences and restrictions attached to Equity Shares:
The Company has one class of Equity Shares having a par value of Rs. 10/- per share. Each Shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation, the Equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
c) Pursuant to the approval of the Board of Directors on June 6, 2017 and Shareholders of the Company through postal ballot, results of which were declared on July 21, 2017, the Company bought back 1,020,408 equity shares (representing 2.89% of the equity capital) at a price of Rs. 4,900/- per equity share aggregating Rs. 4,999,999,200/- through the tender offer route, in terms of public announcement dated July 25, 2017. After extinguishment of 1,020,408 equity shares on September 26, 2017, the Issued, Subscribed and Paid-up Equity Capital of the Company reduced from 35,354,001 equity shares to 34,333,593 equity shares.
Accordingly: (i) the face value of issued, subscribed and paid-up equity share capital was reduced by 11; (ii) 11 had been transferred from Retained Earnings to Capital Redemption Reserve as per the provision of section 69(1) the Companies Act, 2013; (iii) the premium aggregating to 4,989 had been adjusted from Retained Earnings during the year ended March 31, 2018.
a) Employee Benefit Obligation
Disclosure as required under Ind AS 19 - Employee Benefits:
A. Defined contribution plan:
The Company''s defined contribution plans are Superannuation, Employees'' State Insurance Scheme and Provident Fund administered by Government authorities/ trustees since the Company has no further obligation beyond making the contributions.
B. Defined benefit obligation:
The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972/ Company policy. Employees who are in continuous service for a period of 5 years or more are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employee''s last drawn salary per month computed proportionately as per the Payment of Gratuity Act, 1972/ Company policy multiplied for the number of years of service.
The plan asset for the funded gratuity plan is invested in insurer managed fund administered by Life Insurance Corporation of India (âLIC'') and Kotak Life Insurance Limited (Kotak) independently. 80% of the plan asset is invested in debt securities and 20% in equity instruments.
2. Risk exposure:
The risks from defined benefit plans arise partly from the defined benefit obligations and partly from the investment in plan assets. The risks lie in the possibility that higher direct gratuity payments will have to be made to the beneficiaries and/ or that additional contributions will have to be made to plan assets in order to meet current and future defined benefit obligations.
i) Demographic risk:
The gratuity plan provides a lump sum payment to vested employees at the time of retirement, death, incapacitation or termination of employment. Change in attrition rate or mortality assumption as compared to actual rate may result in change in benefit obligations, benefit expense and/ or payments than previously anticipated.
ii) Investment risk:
If the actual return on plan assets is below the return anticipated on the basis of the discount rate, the net defined benefit obligation would increase, assuming there were no changes in other parameters. This could happen as a result of a drop in return by LIC or Kotak.
iii) Interest rate risk:
A decrease in prevailing market yield on Government securities may increase the defined benefit obligation. This effect would be at least partially offset by the ensuing increase in the market values of the debt instruments held.
The estimates of future salary escalations, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factor such as supply and demand factors in the employment market.
The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the Projected Unit Credit Method at the end of the reporting period) has been applied while calculating the defined benefit obligation recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.
b) Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits for measurement purpose. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end. Accumulated compensated absences, which are expected to be availed or encashed beyond 12 months from the end of the year are treated as other long term employee benefits for measurement purpose. The Company''s liability is actuarially determined by an independent actuary using the Projected Unit Credit Method at the end of each year. Actuarial losses/ gains are recognised in the Statement of Profit and Loss in the year in which they arise.
c) Provisions for other employee benefits mainly include those recorded for performance based bonus, variable payments and long-service awards.
e) Other Provisions represent:
i) Provision for estimates made for probable liabilities/ claims arising out of pending disputes, litigations/ commercial transactions with statutory authorities/ third parties. The outflow with regard to the said matters depends on the exhaustion of remedies available to the Company under the law and hence the Company is not able to reasonably ascertain the timing of the outflow and hence expected utilisation is considered as more than 1 year.
During the year, 13 (Previous Year 26) is recognised under the head Finance Costs [included in Note 26] as an additional provision towards Commercial and Other Matters.
ii) Provision for anticipated sales return: In the Previous Year this was recognised on a net basis at the gross margin on the sales. Revenue is adjusted for the expected value of the returns and cost of sales are adjusted for the value of the corresponding goods to be returned. It is expected to be utilised within 12 months from the end of the year.
iii) Provision for discount, incentive and compensation: It is expected to be utilised within 12 months from the end of the year.
* Current Year 0.02 (Previous Year Nil)
The above information has been determined to the extent such parties have been identified on the basis of information available with the Company.
a) It includes sales in accordance with a sales and distribution arrangement, net of material cost 4,398 (Previous Year 4,235).
b) The Government of India introduced the Goods and Service tax (GST) with effect from July 1, 2017. Revenue from Operations for the period from July 1, 2017 is presented net of GST. Revenue from Operations for period up to June 30, 2017 included Excise duty.
The aggregated amount of the transaction price allocated to the performance obligations that are unsatisfied as on March 31, 2019 is 1,216. Contract liabilities resulting from advance payments by customers for delivery of goods and incentive schemes are predominantly recognised as sales within one year. Contract liability resulting from customer loyalty programmes is recognised as sales when obligation is fulfilled based on the points redeemed. Generally, redemption of points happens towards the end of the respective scheme tenure.
Certification fees of Nil (Previous Year 1) paid to Auditors related to buy-back of Equity shares is included in Note 15(iii) Other Equity - âTransaction cost for buy-back of Equity shares''.
Future cash flows in respect of above, if any, is determinable only on receipt of judgement/ decisions pending with relevant authorities.
a) The disputed demands for direct tax matters are mainly due to disallowance for certain expenses and for indirect tax matters are mainly due to product classification and related to forms.
b) It mainly includes demand for crop failure.
c) It mainly includes demand raised towards provident fund and for shortfall of stamp duty related to a property.
B The Company has received a notice from the Hon''ble Civil Court, Thiruvananthapuram intimating that a suit has been filed against the Company along with 15 other manufacturing companies of Endosulfan, making them jointly and severally liable, for an amount of 1,617 for recovery of amount paid by the State of Kerala to victims of Endosulfan as compensation. The Company is of the view that there is no link between use of Endosulfan and the health problems of the victims and hence it is not liable to the repay the damages/ compensation.
The Company has entered into cancellable leasing arrangements for office, residential, guest house and warehouse premises. The lease rental of 138 (Previous Year 132) which are equivalent to minimum lease payments has been recognised under the head Other Expenses - âRent'' under Note 28 to the Statement of Profit and Loss.
Further, the Company has recovered sub-lease rental of 3 (Previous Year 7) which has been recognised under the head Other Income - âRent Income'' under Note 22 to the Statement of Profit and Loss.
The Company has given portion of building, other than classified as investment properties and certain other assets, on operating lease under cancellable lease arrangement during the year. The lease rental aggregating to 22 (Previous Year 28) has been recognised under the head Other Income - âRent Income'' under Note 22 to the Statement of Profit and Loss.
3 EVENTS OCCURRING AFTER THE REPORTING PERIOD
a) Refer Note 37(b)(ii) Capital Management for the final dividend recommended by the directors which is subject to the approval of shareholders in the ensuing Annual General Meeting.
b) The draft Voluntary Separation Scheme (VSS-2019) was presented to the Board of Directors at its meeting held on May 27, 2019. The Board took the note of the same and authorised the executive management to make necessary amendment, if required and implement the same during the financial year 2019-20 as it may deem fit.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are:
(a) recognised and measured at fair value and
(b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed in Ind AS 113 - Fair Value Measurement. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market (Foreign exchange forward contracts) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The fair value of forward foreign exchange contracts is determined using forward exchange rates at the Balance Sheet date.
Level 3: If one or more of the significant inputs is not based on observable market data (Security Deposits), the instrument is included in level 3. The fair value of the security deposits with definite maturity period is determined using discounted cash flow analysis using an adjusted lending rate.
There are no transfers between level 1, level 2 and level 3 during the year.
The carrying amounts of Trade Receivables, Cash and Cash Equivalents, Bank Balances, Foreign exchange forward contracts, Accrued Interest Receivables, Advance recoverable in cash, Other Receivables, Trade Payables, Unpaid Dividends, Deposit from Customers, Payable for Capital Purchases and Other Financial Liabilities are considered to be the same as their fair values, due to their short term nature.
4. FINANCIAL RISK MANAGEMENT
The Company has financial opportunities at its disposal in the form of the market prices it can command, and is exposed to financial risks in the form of credit, liquidity and market risks. Market risks include currency, interest-rate and price risk. The following paragraphs provide details of these and other financial opportunities and risks and how they are managed.
The management of financial opportunities and risks takes place using established, documented processes. One component is financial planning, which serves as the basis for determining liquidity risk and the future foreign currency and interest-rate risks.
a) Credit Risk:
Credit risks arise from the possibility that the value of receivables or other financial assets of the Company may be impaired because counterparties cannot meet their payment or other performance obligations.
To manage credit risks from trade receivables other than Related Party, the credit managers from Order to Cash department of the Company regularly analyse customer''s receivables, overdue and payment behaviors. Some of these receivables are collateralised and the same is used according to conditions. These could include advance payments, security deposits, post-dated cheques etc. Credit limits for this trade receivables are evaluated and set in line with Company''s internal guidelines. There is no significant concentration of default risk.
Credit risks from financial transactions are managed independently by Finance department. For banks and financial institutions, the Company has policies and operating guidelines in place to ensure that financial instrument transactions are only entered into with high quality banks and financial institutions. The Company had no other financial instrument that represents a significant concentration of credit risk. The surplus funds are invested in bank deposits and mutual fund investments.
i) Expected Credit Loss (ECL) for Trade Receivables and Deposits:
The Company provides for ECL for trade receivables under simplified approach. The Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking information.
ii) Expected Credit Loss (ECL) for Financial Assets other than Trade Receivables and Deposits:
There is no credit risk on Financial Assets other than mentioned in (i) above from initial recognition. Accordingly, no provision for ECL has been recognised.
b) Liquidity Risk:
Liquidity risks result from the possible inability of the Company to meet current or future payment obligations due to lack of cash or cash equivalents. The liquidity risk is assessed and managed by the Finance department as a part of day to day and medium term liquidity planning.
The Company''s liquidity risk policy is to maintain sufficient liquidity reserve at all times based on cash flow projections to meet payment obligation when it falls due. The primary source of liquidity is cash generated from operations.
Liquid assets are held mainly in the form of bank deposits and mutual fund investments. The Company maintains flexibility in funding by maintaining availability under committed credit lines set up with the banks. These include, in particular, an undrawn credit facility of as at March 31, 2019 of 5,515 (Previous Year 1,608).
The payment obligations from financial instruments are explained below:
c) Market Risk:
i) Currency Risk:
Foreign currency opportunities and risks for the Company result from changes in exchange rates and the related changes in the value of financial instruments (including receivables and payables) in the functional currency (INR). The Company is exposed to foreign exchange risk arising from foreign currency transactions primarily with respect to US Dollar.
To mitigate the currency fluctuation, receivables and payables in foreign currencies which arises from export and import of goods and services are hedged on net basis through forward exchange contracts. From January''18 onwards, majority of Company''s import and export of goods are denominated in INR currency thereby reducing foreign exchange risk to large extent.
Sensitivities were determined on the basis of a hypothetical adverse scenario in which the INR appreciated/ depreciated by 4% (March 31, 2018 2%) against USD compared with the year-end exchange rates. In this scenario, the estimated hypothetical loss of cash flows from financial instruments would have increased/ diminished earnings as of March 31, 2019 by 2 (as of March 31, 2018 by 0.5) on net receivable exposure of 61 (USD 0.88 Million) as on March 31, 2019 [on net payable exposure of 27 as on March 31, 2018 (USD 0.41 Million)]. The Company''s exposure to changes in foreign currency other than USD is not material.
ii) Interest Rate Risk:
Interest rate opportunities and risks result for the Company through changes in capital market interest rates, which in turn could lead to changes in the fair value of fixed-rate financial instruments and changes in interest payments/ income in case of floating-rate instruments.
Interest rate risk arising from borrowing is managed by negotiating fixed coupon interest rates from banks for the entire tenure. The Company has surplus cash position and does not have any borrowings as on Balance Sheet date.
iii) Price Risk:
The Company is mainly exposed to the price risk due to its investment in equity shares of Monsanto India Limited (MIL) and investment in mutual funds.
The Company''s equity investments in MIL is for the strategic purpose. If the equity prices had been higher/ lower by 5% from the market price existing as on March 31, 2019, Other Comprehensive Income for the year would increase/ decrease by 175 (before consequential tax impact, if any) with a corresponding increase/ decrease in the Total Equity of the Company as of March 31, 2019.
In order to manage its price risk arising from investment in mutual funds, the Company diversifies its portfolio based on past performance. The impact of price risk with respect to investment in mutual fund is insignificant.
5. CAPITAL MANAGEMENT
a) Risk management:
The Company''s objective while managing capital is to safeguard its ability to continue as a going concern, so that it can continue to provide optimum returns to the shareholders and to other stakeholders. Further its objective is to maintain an optimal capital structure to reduce the cost of capital.
6. SEGMENT REPORTING
The Vice Chairman & Managing Director and CEO, and Executive Director & CFO are identified as Chief Operating Decision Maker of the Company. They are responsible for allocating resources and assessing the performance of the operating segments. Accordingly, they have determined âAgri Careâ as its operating segment.
Thus the segment revenue, interest revenue, interest expense, depreciation and amortisation, segment assets and segment liabilities are all as reflected in the Financial Statement as at and for the year ended March 31, 2019.
iii) Employee Benefits Plans where significant influence exists
Bayer CropScience Limited Employees Group Gratuity-cum-Life Assurance Scheme Bayer CropScience Limited Managerial Employees Superannuation Scheme
v) Terms and conditions
There have been no guarantees provided or received for any related party receivables or payables. Outstanding balances at the year end are unsecured and interest free, and settlement occurs in cash. The Company has not recorded any impairment of receivables relating to amounts owed by related parties for the year ended March 31, 2019 and March 31, 2018.
7. The Board of Directors has approved the appointment of Mr. Duraiswami Narain as Managing Director & Chief Executive Officer of the Company with effect from December 1, 2018, which is subject to the approval, of the Shareholders in the ensuing Annual General Meeting, and of the Central Government for which necessary application is made and approval is awaited.
8. The Board of Directors at its meeting held on November 14, 2018 approved the Scheme of Amalgamation of Monsanto India Limited (MIL) with Bayer CropScience Limited (BCSL) and their respective shareholders under Section 230 and 232 of the Companies Act, 2013 and other applicable provision, if any. In consideration of the amalgamation, BCSL will issue and allot 2 (two) equity shares of 10/- each credited as fully paid-up shares of BCSL, for every 3 (three) equity shares of 10/- each in MIL to those whose names are recorded in the register of members on the record date. The Scheme of Amalgamation is subject to various regulatory and other approvals.
9. EARNINGS PER SHARE
Earnings per share are determined according to Ind AS 33 - Earnings per Share by dividing Profit after tax attributable to shareholders of the Company by the weighted average number of equity shares outstanding during the financial year.
10. IMPACT OF FIRST TIME ADOPTION OF IND AS 115
Effective April 1, 2018, the Company adopted Ind AS 115 - Revenue from Contracts with Customers using the cumulative catch-up transition method, applied to contracts that were not completed as of April 1, 2018. In accordance with the cumulative catch-up transition method, the comparative information has not been reinstated. The impact of adoption of the standard on the financial statements of the Company is insignificant.
Changes in the timing of recognition:
There is no impact on the timing of recognition of Revenue on adoption of Ind AS 115 for the Company.
Presentational changes:
The Company recognises provision for anticipated sales return towards saleable returns. Ind AS 115 changes the presentation of provision for anticipated sales return within the Balance Sheet from net to gross basis. The Right of Return Asset is disclosed in âOther Assetsâ [Refer Note 9] at the former carrying amount of saleable returns less expected costs to recover and potential impairment. The Refund Liabilities disclosed under âOther Liabilitiesâ [Refer Note 19] represents amounts expected to be refunded upon sales return. Prior to the adoption of Ind AS 115, the Company presented the margin of anticipated sales returns on a net basis in Balance Sheet under âProvisionsâ [Refer Note 16].
In the Statement of Cash Flows, the increase in Other Assets resulting from gross presentation is compensated by a corresponding decline in Other Liabilities and Provisions.
Mar 31, 2018
Company Profile
Bayer CropScience Limited (âthe Companyâ) is a Company incorporated under the Companies Act, 1956 and having its registered office at Bayer House, Central Avenue, Hiranandani Estate, Thane (West) - 400 607, India. The Company is engaged in âAgri Careâ business which primarily includes manufacture, sale and distribution of insecticides, fungicides, herbicide and various other agrochemical products, and sale and distribution of hybrid seeds. Out of the total paid-up share capital of the Company, 68.69% is held by its promoters. The ultimate parent company is Bayer AG, Germany. The Company is listed on the Bombay Stock Exchange, Mumbai. The Company has its own manufacturing site at Himatnagar in the state of Gujarat.
a) Deemed cost of leasehold improvements as on April 1, 2015 is Nil i.e. fully depreciated over a period of time and hence the same has not been presented in the above table.
b) Figures shown in brackets are in respect of previous year.
* Amount is below the rounding off norm adopted by the Company.
** Additions to Buildings, Plant and Equipment represent amount of expenditure incurred in the course of its construction.
1 INVESTMENT PROPERTIES
a) Figures shown in brackets are in respect of previous year.
b) The Company had given Land and portion of a Building on operating lease under cancellable lease arrangement. Investment properties are distinguished from owner-occupied property based on area covered under lease arrangements. Refer Note 33 for disclosure of contractual obligations to purchase, construct or develop investment properties and for its repairs, maintenance or enhancements respectively.
Estimation of fair value:
The fair value of investment properties has been determined by an external independent property valuer having recognised professional qualifications for Land and based on internal valuation for Building. The current prices in an active market for similar properties has been used to determine fair value of investment properties. The fair value measurement of investment properties has been categorised as Level 3 based on the inputs in the valuation.
2 INTANGIBLE ASSETS [Refer Note 33(a)]
a) Deemed cost of Goodwill and Technical Knowhow as on April 1, 2015 is Nil i.e. fully amortised over a period of time and hence the same has not been presented in the above table.
b) Figures shown in brackets are in respect of previous year.
* Amount is below the rounding off norm adopted by the Company.
a) The Company is the distributor of Bayer BioScience Private Limited (BBPL) operating in the territory of India and Nepal for distribution of seeds. As the Company is a limited risk distributor in this commercial arrangement, BBPL recognises the risk of overdue receivables to its account. As of March 31, 2018, the Company has certain overdue outstanding receivables towards distribution of seeds to third parties aggregating 5 (Previous Year 354). The Company has recovered this amount from BBPL towards recoupment of loss arising out of the third party overdue for which recovery is less probable. As and when the Company recovers any amount against such overdue, or any part thereof, from the respective customers, the Company is required to pay to BBPL such amounts so recovered. Accordingly, the amount recovered from BBPL is recognised as âOther Financial Liabilitiesâ in Note 18.
b) It includes receivable from Bayer AG 607 (Previous Year 500) which exceeds 5% of total trade receivables.
a) Rights, preferences and restrictions attached to Equity Shares:
The Company has one class of Equity Shares having a par value of? 10/- per share. Each Shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation, the Equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
c) Pursuant to the approval of the Board of Directors on June 6, 2017 and Shareholders of the Company through postal ballot, results of which were declared on July 21, 2017, the Company bought back 1,020,408 equity shares (representing 2.89% of the equity capital) at a price ofRs. 4,900/- per equity share aggregating Rs. 4,999,999,200/- through the tender offer route, in terms of public announcement dated July 25, 2017. After extinguishment of 1,020,408 equity shares on September 26, 2017, the Issued, Subscribed and Paid-up Equity Capital of the Company reduced from 35,354,001 equity shares to 34,333,593 equity shares.
Accordingly: (i) the face value of issued, subscribed and paid-up equity share capital was reduced by 11; (ii) 11 had been transferred from Retained Earnings to Capital Redemption Reserve as per the provision of section 69(1) the Companies Act, 2013; (iii) the premium aggregating to 4,989 had been adjusted from the Retained Earnings during the year ended March 31,2018.
a) Employee Benefit Obligation:
Disclosure as required under Ind AS19- Employee Benefits:
A. Defined contribution plan:
The Companyâs defined contribution plans are Superannuation, Employeesâ State Insurance Scheme and Provident Fund administered by Government authorities/ trustees since the Company has no further obligation beyond making the contributions.
B. Defined benefit obligation:
The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972/ Company policy. Employees who are in continuous service for a period of 5 years or more are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employeeâs last drawn salary per month computed proportionately as per the Payment of Gratuity Act, 1972/ Company policy multiplied for the number of years of service. Quantum of gratuity benefits may vary depending on the eligible employeeâs date ofjoining and salary grade.
The plan asset for the funded gratuity plan is invested in insurer managed fund administered by Life Insurance Corporation of India (âLICâ) and Kotak Life Insurance Limited (Kotak) independently. 84% of the plan asset is invested in debt securities and 16% of the plan asset is investmented in equity instruments.
3. Risk exposure:
The risks from defined benefit plans arise partly from the defined benefit obligations and partly from the investment in plan assets. The risks lie in the possibility that higher direct gratuity payments will have to be made to the beneficiaries and/ or that additional contributions will have to be made to plan assets in order to meet current and future defined benefit obligations.
i) Demographic risk:
The gratuity plan provides a lump sum payment to vested employees at the time of retirement, death, incapacitation or termination of employment. Change in attrition rate or mortality assumption as compared to actual rate may result in change in benefit obligations, benefit expense and/ or payments than previously anticipated.
ii) Investment risk:
If the actual return on plan assets was below the return anticipated on the basis of the discount rate, the net defined benefit obligation would increase, assuming there were no changes in other parameters. This could happen as a result of a drop in return by LIC or Kotak.
iii) Interest-rate risk:
A decrease in prevailing market yield on Government securities may increase the defined benefit obligation. This effect would be at least partially offset by the ensuing increase in the market values of the debt instruments held.
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the Projected Unit Credit Method at the end of the reporting period) has been applied while calculating the defined benefit obligation recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.
b) Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year end are treated as short term employee benefits for measurement purpose. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end. Accumulated compensated absences, which are expected to be availed or encashed beyond 12 months from the end of the year end are treated as other long term employee benefits for measurement purpose. The Companyâs liability is actuarially determined by an independent actuary using the Projected Unit Credit Method at the end of each year. Actuarial losses/ gains are recognised in the Statement of Profit and Loss in the year in which they arise.
c) Provisions for other employee benefits mainly include those recorded for performance based bonus, variable payments and long-service awards.
e) Other Provisions represent:
i) Provision for estimates made for probable liabilities/ claims arising out of pending disputes, litigations/ commercial transactions with statutory authorities/ third parties. The outflow with regard to the said matters depends on the exhaustion of remedies available to the Company under the law and hence the Company is not able to reasonably ascertain the timing of the outflow and hence expected utilisation is considered as more than 1 year.
During the year, 26 (Previous Year 26) is recognised under the head Finance Costs [included in Note 26] as an additional provision towards Commercial and Other Matters.
ii) Provision for anticipated sales return. This is recognised on a net basis at the gross margin on the sales. Revenue is adjusted for the expected value of the returns and cost of sales are adjusted for the value of the corresponding goods to be returned. It is expected to be utilised within 12 months from the end of the year.
iii) Provision for trade discount, cash discount, incentive schemes and compensation. It is expected to be utilised within 12 months from the end of the year.
a) It includes sales in accordance with a sales and distribution arrangement, net of material cost 4,235 (Previous Year4,018).
b) The Government of India introduced the Goods and Service tax (GST) with effect from July 1, 2017. Sales for the period from July 1, 2017 is presented net of GST. Sales of earlier periods up to June 30, 2017 included Excise duty. Sales for the year ended March 31, 2018 includes Excise duty for the quarter ended June 30, 2017.
* Amount is below the rounding off norm adopted by the Company.
Certification fees of 1 (Previous Year Nil) paid to Auditors related to buyback of Equity shares is included in Note 14(iii) Other Equity -âTransaction cost for buyback of Equity sharesâ.
Future cash flows in respect of above, if any, is determinable only on receipt of judgement/ decisions pending with relevant authorities.
a) The disputed demands for direct tax matters are mainly due to disallowance for certain expenses and for indirect tax matters are mainly due to product classification and related to forms.
b) It mainly includes demand for crop failure.
c) It mainly includes demand raised for shortfall of stamp duty related to a property.
b) Non-cancellable operating leases
The Company has taken certain residential flats and offices under non-cancellable operating leases. Some of the arrangements include escalation clause to cover inflation. Lease rent amounting to 22 (Previous Year 18) has been recognised under the head Other Expenses- âRentâ under Note 28 to the Statement of Profit and Loss.
The Company has entered into cancellable leasing arrangements for office, residential, guest house and warehouse premises. The lease rental of 132 (Previous Year 142) which are equivalent to minimum lease payments has been recognised under the head Other Expenses- âRentâ under Note 28 to the Statement of Profit and Loss.
Further, the Company has recovered sub-lease rental of 7 (Previous Year 8) which has been recognised under the head Other Income - âRent Incomeâ under Note 22 to the Statement of Profit and Loss.
The Company has given portion of building, other than classified as investment properties and certain other assets, on operating lease under cancellable lease arrangement during the year. The lease rental aggregating to 28 (Previous Year 29) has been recognised under the head Other Income - âRent Incomeâ under Note 22 to the Statement of Profit and Loss.
4 EVENTS OCCURRING AFTER THE REPORTING PERIOD
Refer Note 37(b)(ii) Capital Management for the final dividend recommended by the directors which is subject to the approval of shareholders in the ensuing Annual General Meeting.
Fair Value Hierarchy:
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are:
(a) recognised and measured at fair value and
(b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed in Ind AS 113- FairValue Measurement. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices and the mutual funds are measured using the closing Net Asset Value (NAV).
Level 2: The fair value of financial instruments that are not traded in an active market (Foreign exchange forward contracts) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The fair value forward foreign exchange contracts is determined using forward exchange rates at the Balance Sheet date.
Level 3: If one or more of the significant inputs is not based on observable market data (Security Deposits), the instrument is included in level 3. The fair value of the security deposits with definite maturity period is determined using discounted cash flow analysis using an adjusted lending rate.
There are no transfers between level 1, level 2 and level 3 during the year.
The carrying amounts of Trade Receivables, Cash and Cash Equivalents, Bank Balances, Accrued Interest Receivables, Advance Recoverable in Cash, Other Receivables, Trade Payables, Unpaid Dividends, Deposit from Customers, Payable for Capital Purchases and Other Financial Liabilities are considered to be the same as their fair values, due to their short term nature.
5 FINANCIAL RISK MANAGEMENT
The Company has financial opportunities at its disposal in the form of the market prices it can command, and is exposed to financial risks in the form of credit, liquidity and market risks. Market risks include currency, interest rate and price risk. The following paragraphs provide details of these and other financial opportunities and risks and how they are managed.
The management of financial opportunities and risks takes place using established, documented processes. One component is financial planning, which serves as the basis for determining liquidity risk and the future foreign currency and interest-rate risks.
a) Credit Risk:
Credit risks arise from the possibility that the value of receivables or other financial assets of the Company may be impaired because counterparties cannot meet their payment or other performance obligations.
To manage credit risks from trade receivables other than Related Party, the credit managers from Order to Cash department of the Company regularly analyse customerâs receivables, overdue and payment behaviors. Some of these receivables are collateralised and the same is used according to conditions. These could include advance payments, security deposits, postdated cheques etc. Credit limits for this trade receivables are evaluated and set in line with Companyâs internal guidelines. There is no significant concentration of default risk.
Credit risks from financial transactions are managed independently by Finance department. For banks and financial institutions, the Company has policies and operating guidelines in place to ensure that financial instrument transactions are only entered into with high quality banks and financial institutions. The Company had no other financial instrument that represents a significant concentration of credit risk. The surplus funds are invested in bank deposits and mutual fund investments.
i) Expected Credit Loss (ECL) for Trade Receivables and Deposits:
The Company provides for ECL for trade receivables under simplified approach. The Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking information.
ECL for deposits are measured considering 12-monthâs ECL.
ii) Expected Credit Loss (ECL) for Financial Assets other than Trade Receivables and Deposits:
There is no credit risk on Financial Assets other than mentioned in (i) above from initial recognition. Accordingly, no provision for ECL has been recognised.
b) Liquidity Risk:
Liquidity risks result from the possible inability of the Company to meet current or future payment obligations due to lack of cash or cash equivalents. The liquidity risk is assessed and managed by the Finance department as a part of day to day and medium term liquidity planning.
The Companyâs liquidity risk policy is to maintain sufficient liquidity reserve at all times based on cash flow projections to meet payment obligation when it falls due. The primary source of liquidity is cash generated from operations.
Liquid assets are held mainly in the form of bank deposits and mutual fund investments. The Company maintains flexibility in funding by maintaining availability under committed credit lines set up with the banks. These include, in particular, an undrawn credit facility of as at March 31, 2018 of 1,608 (Previous Year 1,257).
The payment obligations from financial instruments are explained below:
The table below analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for all financial liabilities essential for an understanding of timing of cash flows.
Balance due within 12 months equals their carrying balance as the impact of discounting is not significant.
c) Market Risk:
i) Currency Risk:
Foreign currency opportunities and risks for the Company result from changes in exchange rates and the related changes in the value of financial instruments (including receivables and payables) in the functional currency (INR). The Company is exposed to foreign exchange risk arising from foreign currency transactions primarily with respect to US Dollar.
To mitigate the currency fluctuation, receivables and payables in foreign currencies which arises from export and import of goods and services are hedged on net basis through forward exchange contracts. From Januaryâ18 onwards, majority of Companyâs import and export transactions are denominated in INR currency thereby reducing foreign exchange risk to large extent.
Sensitivities were determined on the basis of a hypothetical adverse scenario in which the INR appreciated/ depreciated by 2% (March 31, 2017 5%) against USD compared with the year-end exchange rates. In this scenario, the estimated hypothetical loss of cash flows from financial instruments would have increased/ diminished earnings as of March 31, 2018 by 0.5 (as of March 31, 2017 by 63) on net payable exposure of 27 (USD 0.41 Million) as on March 31, 2018 [on net payable exposure of 1,253 as on March 31, 2017 (USD 19 Million)]. The Companyâs exposure to changes in foreign currency other than USD is not material.
ii) Interest Rate Risk:
Interest-rate opportunities and risks result for the Company through changes in capital market interest rates, which in turn could lead to changes in the fair value of fixed-rate financial instruments and changes in interest payments/ income in case of floating-rate instruments.
Interest rate risk arising from borrowing is managed by negotiating fixed coupon interest rates from banks for the entire tenure. The Company has surplus cash position and does not have any borrowings as on Balance Sheet date.
iii) Price Risk:
The Company is mainly exposed to the price risk due to its investment in mutual funds. In order to manage its price risk arising from investment in mutual funds, the Company diversifies its portfolio based on past performance. The impact of price risk with respect to investment in mutual fund is insignificant.
6 CAPITAL MANAGEMENT
a) Risk management:
The Companyâs objective while managing capital is to safeguard its ability to continue as a going concern, so that it can continue to provide optimum returns to the shareholders and to other stakeholders. Further its objective is to maintain an optimal capital structure to reduce the cost of capital.
b) Dividends:
7 OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES
The following table represents the recognised financial instruments that are offseted in the Balance Sheet based on legally enforceable right and intention to settle or realise on a net basis.
8 SEGMENT REPORTING
The Vice Chairman & Managing Director and CEO, and Executive Director & CFO are identified as Chief Operating Decision Maker of the Company. They are responsible for allocating resources and assessing the performance of the operating segments. Accordingly, they have determined âAgri Careâ as its operating segment.
Thus the segment revenue, interest revenue, interest expense, depreciation and amortisation, segment assets and segment liabilities are all as reflected in the Financial Statement as at and for the year ended March 31, 2018.
9 RELATED PARTY TRANSACTIONS
i) Ultimate Holding Company:
Bayer AG
ii) Entities under Common Group Control *:
Bayer (China) Limited, China Bayer(Proprietary) Limited, South Africa Bayer(South East Asia) Pte. Ltd., Singapore Bayer BioScience Private Limited, India Bayer Business Services GmbH, Germany Bayer Business Services Philippines Inc., Philippines Bayer Business and Technology Services LLC, U.S.A. Bayer CropScience AG, Germany BayerCropScience Ltd, Korea BayerCropScience Inc., Philippines BayerCropScience LP, U.S.A.
BayerCropScience Limited, Bangladesh
Bayer Direct Services GmbH, Germany
Bayer East Africa Ltd., Kenya
Bayer Holding Ltd., Japan
Bayer Healthcare Pharmaceuticals Inc., U.S.A.
Bayer Intellectual Property GmbH, Germany Bayer Middle East FZE, UAE Bayer Pakistan (Private) Limited, Pakistan Bayer Pharmaceuticals Private Limited, India
BayerS.A.S., France
BayerSeeds Private Limited, India (formerly Nunhems India Private Limited, India)
Bayer Sp. z.o.o., Poland
Bayer Thai Company Limited, Thailand
BayerVapi Private Limited, India (the Enterprise in respect ofwhich, the Company is an Associate effective April 28, 2014)
BayerZydus Pharma Private Limited, India
Covestro (India) Private Limited, India (upto May 4, 2018)
PT. Bayer Indonesia, Indonesia
United Breweries Limited, India (upto June 30, 2016)
* The list of parties above have been limited to entities with whom transactions have taken place during the current or previous year or balances are outstanding as at the year end.
a) During the previous year, the Company had given loan to Bayer BioScience Private Limited for working capital which was repaid during the year. This loan was given in compliance with section 186 of the Companies Act, 2013 and in accordance with the terms and conditions of agreement entered with the party.
iv) Terms and conditions
There have been no guarantees provided or received for any related party receivables or payables. Outstanding balances at the year end are unsecured and interest free, and settlement occurs in cash. The Company has not recorded any impairment of receivables relating to amounts owed by related parties for the year ended March 31, 2018 and March 31, 2017.
10 EARNINGS PER SHARE
Earnings per share are determined according to Ind AS 33 - Earnings per Share by dividing Profit after tax attributable to shareholders of the Company by the weighted average number of equity shares outstanding during the financial year.
Mar 31, 2017
1. Risk exposure:
The risks from defined benefit plans arise partly from the defined benefit obligations and partly from the investment in plan assets. The risks lie in the possibility that higher direct gratuity payments will have to be made to the beneficiaries and/ or that additional contributions will have to be made to plan assets in order to meet current and future defined benefit obligations.
i) Demographic risk:
The gratuity plan provides a lump sum payment to vested employees at the time of retirement, death, incapacitation or termination of employment. Change in attrition rate or mortality assumption as compared to actual rate may result in change in benefit obligations, benefit expense and/ or payments than previously anticipated.
ii) Investment risk:
If the actual return on plan assets were below the return anticipated on the basis of the discount rate, the net defined benefit obligation would increase, assuming there were no changes in other parameters. This could happen as a result of a drop in return by âLICâ.
iii) Interest-rate risk:
A decrease in prevailing market yield on Government securities may increase the defined benefit obligation. This effect would be at least partially offset by the ensuing increase in the market values of the debt instruments held.
The estimates if future salary escalations, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factor such as supply and demand factors in the employment market.
ii) The following parameter sensitivities were computed by an independent actuary which results in increase/ (decrease) in defined benefit obligation:
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the Projected Unit Credit Method at the end of the reporting period) has been applied while calculating the defined benefit obligation recognized in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.
Future cash flows in respect of above, if any, is determinable only on receipt of judgment/decisions pending with relevant authorities.
a) The disputed demands are for income tax, excise duty, customs duty, service tax, sales tax and value added tax.
b) It mainly includes demand for crop failure and vehicle accidental claims.
c) It represents demand raised by the Collector of Stamps, Thane for shortfall of stamp duty along with interest on the Deed of Conveyance for Bayer House located at Thane and demand towards before provident fund for the labour contractor.
The Company has entered into cancellable leasing arrangement for office, residential, guest house and warehouse premises. The lease rental of 142 (Previous Year 163) which are equivalent to minimum lease payments has been recognized under the head Other Expenses - âRentâ under Note 28 to the Statement of Profit and Loss.
Further, the Company has recovered sub-lease rental of 8 (Previous Year 12) which has been recognized under the head Other Income - âRent Incomeâ under Note 22 to the Statement of Profit and Loss.
The Company has given portion of building, other than classified as investment properties and certain other assets, on operating lease under cancellable lease arrangement during the year. The lease rental aggregating to 29 (Previous Year 29) has been recognized under the head Other Income - âRent Incomeâ under Note 22 to the Statement of Profit and Loss.
2 EVENTS OCCURRING AFTER THE REPORTING PERIOD
Refer Note 37(b)(ii) Capital Management for the final dividend recommended by the directors which is subject to the approval of shareholders in the ensuing Annual General Meeting.
This section explains the judgments and estimates made in determining the fair values of the financial instruments that are:
a) recognized and measured at fair value and
b) measured at amortized cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed in Ind AS 113- Fair Value Measurement. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices and the mutual funds are measured using the closing Net Asset Value (NAV).
Level 2: The fair value of financial instruments that are not traded in an active market (Foreign exchange forward contracts) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The fair value forward foreign exchange contracts is determined using forward exchange rates at the Balance Sheet date.
Level 3: If one or more of the significant inputs is not based on observable market data (Security Deposits), the instrument is included in level 3. The fair value of the security deposits with definite maturity period is determined using discounted cash flow analysis using an adjusted lending rate.
The carrying amounts of trade receivables, cash and cash equivalents, bank balances, accrued interest receivables, advance recoverable in cash or kind, other receivables, trade payables, unpaid dividends, deposit from customers, payable for capital purchases and other financial liabilities are considered to be the same as their fair values, due to their short term nature.
3 FINANCIAL RISK MANAGEMENT
The Company has financial opportunities at its disposal in the form of the market prices it can command, and is exposed to financial risks in the form of credit, liquidity and market risks. Market risk includes currency, interest rate and price risk. The following paragraphs provide details of these and other financial opportunities and risks and how they are managed.
The management of financial opportunities and risks takes place using established, documented processes. One component is financial planning, which serves as the basis for determining liquidity risk and the future foreign currency and interest-rate risks.
a) Credit Risk:
Credit risks arise from the possibility that the value of receivables or other financial assets of the Company may be impaired because counterparties cannot meet their payment or other performance obligations.
To manage credit risks from third party trade receivables, the credit managers from Order to Cash department of the Company regularly analyze customerâs receivables, overdue and payment behaviors. Some of these receivables are collateralized and the same is used according to conditions. These could include advance payments, security deposits, post-dated cheques etc. Credit limits for the third party trade receivables are evaluated and set in line with Companyâs internal guidelines. There is no significant concentration of default risk.
Credit risks from financial transactions are managed independently by Finance department. For banks and financial institutions, the Company has policies and operating guidelines in place to ensure that financial instrument transactions are only entered into with high quality banks and financial institutions. The Company had no other financial instrument that represents a significant concentration of credit risk. The surplus funds are invested in bank deposits and mutual fund investments.
i) Expected Credit Loss (ECL) for Trade Receivables and Deposits:
The Company provides for expected credit loss for trade receivables under simplified approach. The Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates.
Expected Credit Losses for deposits are measured considering 12-monthâs expected credit loss.
Trade Receivables
The Company provides ECL based on following provision matrix:
The Company does not have high credit risk customer where the probability of default is high. Following is the movement in Provision for Expected Credit Loss on Trade Receivables:
ii) Expected Credit Loss (ECL) for Financial Assets other than Trade Receivables and Deposits:
There is no credit risk on financial assets other than mentioned in (i) above from initial recognition. Accordingly, no provision for ECL has been recognized.
b) Liquidity Risk:
Liquidity risks result from the possible inability of the Company to meet current or future payment obligations due to lack of cash or cash equivalents. The liquidity risk is assessed and managed by the Finance department as a part of day to day and medium term liquidity planning.
The payment obligations from financial instruments are explained according to their maturity in Note I below.
The Company holds sufficient liquidity to ensure the fulfillment of all planned payment obligations at maturity. The Companyâs liquidity risk policy is to maintain sufficient liquidity reserve at all times based on cash flow projections to meet payment obligation when it falls due. The primary source of liquidity is cash generated from operations.
Liquid assets are held mainly in the form of bank deposits and mutual fund investments. The Company maintains flexibility in funding by maintaining availability under committed credit lines set up with the banks. These include, in particular, an undrawn credit facility as at March 31,2017: 1,257 (March 31,2016: 774; April 1, 2015: 735).
Note I: Maturity of Financial Liabilities
The table below analyze the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for all financial liabilities essential for an understanding of timing of cash flows.
Balance due within 12 months equals their carrying balance as the impact of discounting is not significant.
c) Market Risk:
i) Currency Risk:
Foreign currency opportunities and risks for the Company results from changes in exchange rates and the related changes in the value of financial instruments (including receivables and payables) in the functional currency (INR). The Company is exposed to foreign exchange risk arising from foreign currency transactions primarily with respect to US Dollar.
To mitigate the currency fluctuation, receivables and payables in foreign currencies which arises from export and import of goods are hedged on net basis through forward exchange contracts.
Sensitivities were determined on the basis of a hypothetical adverse scenario in which the INR appreciated/ depreciated by 5% against USD compared with the year end exchange rates. In this scenario, the estimated hypothetical loss of cash flows from financial instruments would have increased/diminished earnings as of March 31, 2017 by 63 (March 31, 2016: 32) on net payable exposure of 1,253 (USD 19 Million) as on March 31, 2017 [March 31, 2016: 642 (USD 10 Million)]. The Companyâs exposure to changes in foreign currency other than USD is not material.
ii) Interest Rate Risk:
Interest-rate opportunities and risks result for the Company through changes in capital market interest rates, which in turn could lead to changes in the fair value of fixed-rate financial instruments and changes in interest payments in case offloading-rate instruments.
Interest rate risk arising from borrowing is managed by negotiating fixed coupon interest rates from banks for the entire tenure. The Company has surplus cash position and does not have any borrowings as on Balance Sheet date.
iii) Price Risk:
The Company is mainly exposed to the price risk due to its investment in mutual funds. In order to manage its price risk arising from investment in mutual funds, the Company diversifies its portfolio based on past performance. The impact of price risk with respect to investment in mutual fund is insignificant.
4 CAPITAL MANAGEMENT a) Risk management:
The Companyâs objective while managing capital is to safeguard its ability to continue as a going concern, so that it can continue to provide optimum returns to the shareholders and to other stakeholders. Further its objective is to maintain an optimal capital structure to reduce the cost of capital.
5 SEGMENT REPORTING
The Vice Chairman & Managing Director and CEO, and Executive Director & CFO are identified as Chief Operating Decision Maker of the Company. They are responsible for allocating resources and assessing the performance of the operating segments. Accordingly, they have determined âAgri Careâ as its operating segment.
Thus the segment revenue, interest revenue, interest expense, depreciation and amortization, segment assets and segment liabilities are all as reflected in the Financial Statement as at and for the year ended March 31,2017.
ii) Entities under Common Group Control *:
Bayer (China) Limited, China
Bayer (Proprietary) Limited, South Africa
Bayer(South East Asia) Pte. Ltd., Singapore
Bayer A/S, Denmark
Bayer Animal Health GmbH, Germany
Bayer BioScience Private Limited, India
Bayer Business Services GmbH, Germany
Bayer Business Services Philippines Inc., Philippines
Bayer Business and Technology Services LLC, U.S.A.
Bayer Co. (Malaysia) Sdn Bhd, Malaysia Bayer Crop S cience AG, Germany Bayer Crop Science LP, U.S.A.
Bayer Crop Science Limited, Bangladesh Bayer de Mexico S.A. de C.V., Mexico Bayer Direct Services GmbH, Germany Bayer East Africa Ltd., Kenya Bayer Holding Ltd., Japan Bayer Intellectual Property GmbH, Germany Bayer Middle East FZE, UAE Bayer Pakistan (Private) Limited, Pakistan Bayer Pharmaceuticals Private Limited, India Bayer S.A.S., France
Bayer Seeds Private Limited, India (formerly Nunhems India Private Limited, India)
Bayer Sp. z.o.o., Poland
Bayer Thai Company Limited, Thailand
Bayer Vapi Private Limited, India (the Enterprise in respect of which, the Company is an Associate effective April 28, 2014) BayerZydus Pharma Private Limited, India Covestro Deutschland AG, Germany Covestro (India) Private Limited, India
Nunhems Vegetable Seeds Private Limited, India (merged with Bayer Seeds Private Limited, India w.e.f. April 1, 2015)
PT. Bayer Indonesia, Indonesia United Breweries Limited, India
* The list of parties above have been limited to entities with whom transactions have taken place during the year or balances are outstanding as at the year end.
# The amount is disclosed on gross basis, against which revenue is recognized at margin (sales less material cost) since the Company is acting as an agent.
* Amount is below rounding off norm adopted by the Company.
a) The Company had given loans to Bayer Bio Science Private Limited for working capital and to Bayer Vapi Private Limited for capital investment and general business purpose which were repaid during respective years by both the parties. These loans were given in compliance with Section 186 of the Companies Act, 2013 and in accordance with the terms and conditions of agreements entered with both the parties.
iii) Key management personnel: Name Designation
- Dr. Vijay Mallya Chairman (Upto June 30, 2016)
- Mr. Pankaj Patel Chairman (from July 5, 2016)
- Mr. Richard van der Merwe Vice Chairman & Managing Director and CEO
- Dr. Thomas Hoffmann Executive Director & CFO (Upto March 31, 2016)
- Mr. Ulrich Stefer Executive Director & CFO (from April 1, 2016)
- Mr. Sharad Kulkarni Non-executive Director
- Mr. A.K.R. Nedungadi Non-executive Director
- Mr. Vimal Bhandari Non-executive Director
iv) Terms and conditions
All the transactions with related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the yearend are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. The Company has not recorded any impairment of receivables relating to amounts owed by related parties for the year ended March 31, 2017 and March 31, 2016.
6 EARNINGS PER SHARE
Earnings per share are determined according to Ind AS 33 - Earnings per Share by dividing Profit after tax attributable to shareholders of the Company by the weighted average number of equity shares outstanding during the financial year.
7 FIRST-TIME ADOPTION OF IND AS Reconciliation between previous GAAP and Ind AS
Ind AS 101- First-time Adoption of Indian Accounting Standards requires the Company to reconcile equity, total comprehensive income and cash flows for previous years. The following reconciliations provide the explanations and quantification of the differences arising from the transition from previous GAAP to Ind AS in accordance with Ind AS 101:
a) Proposed dividend including dividend distribution tax:
Under the previous GAAP, dividends proposed by the Board of Directors after the Balance Sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend including dividend distribution tax was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend including dividend distribution tax of 723 as at March 31, 2016 (753 as at April 1, 2015) included under provisions has been derecognized with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.
b) Product Registration cost for marketing rights:
Product registration cost is paid to government and private agricultural universities to generate data required for obtaining license to sell a product in India. As per recognition criterion under Ind AS 38 - Intangible Assets for internally generated intangible assets, expenses of 99 capitalized under Intangible assets. Consequently, the profit before tax for the year ended March 31,2016 and total equity as at March 31, 2016 is increased by an equivalent amount.
c) Transaction Cost for Buyback of Equity shares:
Under Ind AS, transaction cost related to buyback of own equity shares is recognized as deduction from equity. Under the previous GAAP, this cost was forming part of the profit or loss for the year. As a result of this change, the profit before tax for the year ended March 31, 2016 increased by 41. There is no impact on the total equity as at March 31, 2016.
d) Linked Transaction as job work arrangement:
Ind AS stipulates a âsubstance over formâ principle with additional guidance available on Linked Transaction. Where raw material is supplied for further processing and conversion into finished product, the transaction is not regarded as a sale and instead, tolling charges are recognized in the Statement of Profit and Loss for conversion done by supplier. The margin on the said transaction is recognized when goods are sold to final customer. As a result, the profit before tax for the year ended March 31, 2016 decreased by 5.
e) Actuarial Loss on Defined Benefit plans:
Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit obligation, are recognized in Other Comprehensive Income instead of the Statement of Profit and Loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit before tax for the year ended March 31, 2016 increased by 18. There is no impact on the total equity as at March 31, 2016.
f) Expected Credit Loss on Trade Receivables:
As per Ind AS 109 - Financial Instruments, the Company has applied expected credit loss model for recognizing the allowance for doubtful debts. As a result, the provision for Expected Credit Loss decreased by 56 as at March 31, 2016 (April 1, 2015: 28). As a result, the total equity as at March 31, 2016 increased by 56 (April 1, 2015: 28) and profit for the year ended March 31, 2016 increased by 28.
g) Deferred Tax:
Deferred tax has been recognized on the adjustments made on transition to Ind AS i.e. April 1, 2015 as per Ind AS 12 - Income Taxes. It also includes deferred tax asset recognized at the tax rate applicable for long term capital gains as prescribed under Income Tax Act, 1961 on Freehold land which is expected to be disposed off in future through normal sale with indexation benefit.
h) Other Comprehensive Income:
Under Ind AS, all items of income and expense recognized in the year should be included in the Statement of Profit and Loss for the year, unless a standard requires or permits otherwise. Items of income or expense that are not recognized in the Statement of Profit and Loss but are shown in statement of profit and loss as âOther Comprehensive Incomeâ includes remeasurement of defined benefit plans. The concept of Other Comprehensive Income did not exist under previous GAAP.
8 Previous yearâs figures have been regrouped/ reclassified to conform to current yearâs presentation.
Mar 31, 2015
COMPANY PROFILE
1. Bayer CropScience Limited ("The Company") is a Company incorporated
under the Companies Act, 1956. At a meeting held on November 11,2014,
the Board of Directors have approved change in registered office from
Olympia, First Floor, Central Avenue, Hiranandani Gardens, Powai,
Mumbai * 400 076 to Bayer House, Central Avenue, Hiranandani Estate,
Thane * 400 607 effective January 1,2015. The Company is engaged into
'Agri Care' business which primarily includes manufacture, sale and
distribution of insecticides, fungicides, weedicides and various other
agrochemical products. Out of the total paid*up share capital of the
Company 68.96% is held by its promoters. The Company is listed on the
Bombay Stock Exchange, Mumbai. The Company has its own manufacturing
site at Himatnagar in the State of Gujarat.
2. Rights, preferences and restrictions attached to Equity Shares:
The Company has one class of Equity Shares having a par value of Rs.
10/* per share. Each Shareholder is eligible for one vote per share
held. The dividend proposed by the Board of Directors is subject to the
approval of the Shareholders in the ensuing Annual General Meeting. In
the event of liquidation, the Equity Shareholders are eligible to
receive the remaining assets of the Company after distribution of all
preferential amounts, in proportion to their shareholding.
3. During the Previous Year, the Company bought back 2,879,746 equity
shares (representing 7.29% of the equity share capital) at a price of
Rs. 1,580/* per equity share aggregating to 4,550. After extinguishment
of 2,879,746 Equity Shares on November 29, 2013, the Issued, Subscribed
and Paid*up equity share capital of the Company reduced from 39,498,747
equity shares to 36,619,001 equity shares. Accordingly, 29 had been
transferred from the Surplus in Statement of Profit and Loss to Capital
Redemption Reserve as per the provision of Section 69(1) the Companies
Act, 2013 and the premium aggregating to 4,521 has been adjusted from
the Surplus in Statement of Profit and Loss.
a) Pursuant to the approval of Board of Director's vide its resolution
dated July 30, 2013, the Company had entered into a 'Business Transfer
Agreement' with Deccan Fine Chemicals (India) Private Limited, to sell,
convey, assign and transfer the Chemical Manufacturing Facility at
Ankleshwar, as a going concern on a slump sale basis and an 'Asset
Transfer Agreement' with Bayer MaterialScience Private Limited, to sell
and transfer all the assets related to the Poly*isocynate Unit located
within the Ankleshwar facility. The Company had received all the
necessary permissions and approvals from the relevant authorities for
giving effect to both the agreements and accordingly both the
transactions were concluded at the close of business hours of May
31,2014. Upon conclusion of both the transactions, the Company has
recognised net gain of 3 (net of impairment loss of 144 recognised
during the year ended March 31,2014) during the year ended March 31,
2015.
b) The Depreciation and Amortization Expense for the previous year
ended March 31, 2014 includes additional depreciation charge of 134 on
account of revision in economic useful life of the fixed assets of the
Company.
4. CONTINGENT LIABILITIES
Claims against the Company not acknowledged as debts towards:
a) Direct Tax Matters 332 585
b) Indirect Tax Matters (Excise duty, Customs duty,
Service tax and Sales tax) 773 732
c) Litigation/ claims filed by customer/ vendor/ labour 48 51
d) Litigation/demandsraisedbyotherStatutory Authorities 25 53
Future cash flows in respect of above, if any, is
determinable only on receipt of judgement/ decisions
pending with relevant authorities.
5. RELATED PARTY TRANSACTIONS (as identified by the Management)
(i) Ultimate Holding Company : Bayer AG,Germany
(ii) Parties under common control * :
* Bayer (China) Limited, China
* Bayer (Proprietary) Limited, South Africa
* Bayer (South East Asia) Pte Ltd, Singapore
* Bayer A/S, Denmark
* Bayer AnimalHealthGmbH,Germany
* Bayer BioScience Private Limited, India
* Bayer Business Services GmbH, Germany
* Bayer Business Services Philippines Inc, Philippines
* Bayer Business and Technology Services LLC, U.S.A.
* Bayer Co. (Malaysia) Sdn Bhd, Malaysia
* Bayer CropScience AG, Germany
* Bayer CropScience K.K., Japan
* Bayer CropScience LP, U.S.A.
* Bayer CropScience Limited, Bangladesh
* Bayer de Mexico S.A. de C.V., Mexico
* Bayer Direct Services GmbH, Germany
* Bayer East Africa Limited, Kenya
* Bayer Healthcare Pharmaceuticals Inc. Pine Brook, U.S.A.
* Bayer Intellectual Property GmbH, Germany
* Bayer Material Science Limited, Hong Kong
* Bayer MaterialScience Private Limited, India
* Bayer Middle East FZE, UAE
* Bayer Pakistan (Private) Limited, Pakistan
* Bayer Pharmaceuticals Private Limited, India
* Bayer S.A., Argentina
* Bayer S.A.S., France
* Bayer Thai Company Limited, Thailand
* Bayer Vietnam Limited, Vietnam
* Bayer Vapi Private Limited, India (Formerly Bilag Industries Private
Limited, India)
(the Enterprise in respect of which, the Company is an Associate
effective April 28, 2014)
* Currenta GmbH & Co. OHG, Germany
* Nunhems India Private Limited, India
* PT. Bayer Indonesia, Indonesia
* The list of parties above have been limited to entities with whom
transactions have taken place during the year or balances are
outstanding as at the year end.
(iii) Key Management Personnel :
* Mr. Richard van der Merwe : Vice Chairman and Managing Director
(from February 1,2014)
* Dr. Thomas Hoffmann : ExecutiveDirector&Chief Financial
Officer(from April 2, 2013)
* Mr.Stephan Gerlich : ViceChairmanandManagingDirector
(uptoJanuary31,2014)
The disclosures required as per Accounting Standard 15 * Employee
Benefits (Revised 2005), are as under: a) Brief description of the
Plans:
The Company has various schemes for employee benefits such as provident
fund, superannuation, gratuity, pension and long service award. In case
of funded schemes, the funds are administered through trustees/
appropriate authorities. The Company's defined contribution plans are
superannuation and provident fund since the Company has no further
obligation beyond making the contributions. The Company's defined
benefit plans include gratuity and pension. The employees of the
Company are entitled to compensated absences and long service award as
per the Company's policy.
The Plan Asset for the funded gratuity plan is administered by Life
Insurance Corporation of India ('LIC') as per the Investment Pattern
stipulated for Pension and Group Schemes Fund by Insurance Regulatory
and Development Authority regulations.
Additionally, the Company had given Land (disclosed as Investment
Property) and portion of Building on operating lease under cancellable
lease arrangement during the year. The lease rentals aggregating to 56
(Previous Year 1) has been recognised under the head Other Income *
'Rent Income' under Note 18 to the Statement of Profit and Loss.
The Company has identified business segment as its primary segment. In
accordance with Accounting Standard 17 * "Segment Reporting", the
Company has determined its business segment as "Agri Care". Since,
entire Company's business is from Agri Care there are no other primary
reportable segments. Thus the segment revenue, segment results, total
carrying value of segment assets, total carrying amount of segment
liabilities, total cost incurred to acquire segment assets, total
amount of charge of depreciation and amortisation during the year are
all as reflected in the Financial Statement as at and for the year
ended March 31,2015.
5. The Company had given loans to Bayer Material Science Private
Limited for working capital and Bayer Vapi Private Limited for capital
investment purpose which are repaid during the year. The loans given
are in compliance with the respective sections [Section 372A of the
Companies Act, 1956 and Section 186 (4) of the Companies Act, 2013] and
in accordance with the terms and conditions of agreements entered with
both the parties.
6. Previous year figures have been regrouped/ reclassified to conform
to current year's presentation..
Mar 31, 2014
COMPANY PROFILE
Bayer CropScience Limited ("The Company") is a Company incorporated
under the Companies Act, 1956 and having its registered office at
Olympia, First Floor, Central Avenue, Hiranandani Gardens, Powai,
Mumbai - 400 076. The Company is engaged into ''AgriCare'' business which
primarily includes manufacture, sale and distribution of insecticides,
fungicides, weedicides and various other agrochemical products. Out of
the total paid-up share capital of the Company 68.96% is held by its
promoters. The Company is listed on the Bombay Stock Exchange, Mumbai.
The Company has its own manufacturing sites at Ankleshwar and
Himatnagar in the State of Gujarat.
1. DEPRECIATION AND AMORTISATION EXPENSE (INCLUDING IMPAIRMENT)
(contd.)
a) Pursuant to the Board of Director''s approval for proposal to sell
either the whole or in part the manufacturing unit(s) and facilities of
the Company located at Ankleshwar and subsequent execution of ''Business
Transfer Agreement'' to sell, convey, assign and transfer chemical
manufacturing facility at Ankleshwar, as a going concern on slump sale
basis, to Deccan Fine Chemicals (India) Private Limited and ''Assets
Transfer Agreement'' to sell and transfer all assets related to
Poly-isocyanate unit located within the Ankleshwar facility to Bayer
MaterialScience Private Limited, the Company has recognized impairment
loss of 144 during year ended March 31, 2014. The sale pursuant to both
the agreements will be recognised subject to satisfactory fulfi llment
of certain conditions and receipt of such government approval or
permission, as may be required.
b) The Depreciation and Amortization Expense for the year ended March
31, 2014 includes additional depreciation charge of 134 on account of
revision in economic useful life of the fixed assets of the Company
[Refer Note 1(c)].
As at As at
31.03.2014 31.03.2013
2. CONTINGENT LIABILITIES
Claims against the Company not
acknowledged as debts towards:
a) Direct Tax Matters 585 784
b) Indirect Tax Matters (Excise
duty, Customs duty, Service tax and
Sales tax) 732 757
c) Litigation/ claims filed by
customer/ vendor/ labour 51 41
d) Litigation/ demands raised by
other Statutory Authorities 53 53
Future cash flows in respect of above, if any, is determinable only on
receipt of judgement/ decisions pending with relevant authorities.
3. RELATED PARTY TRANSACTIONS (as identified by the Management) (i)
Ultimate Holding Company : Bayer AG, Germany
(ii) Parties under common control * :
- Bayer (China) Limited, China
- Bayer (South East Asia) Pte Ltd, Singapore
- Bayer A/S, Denmark
- Bayer Animal Health GmbH, Germany
- Bayer Australia Limited, Australia
- Bayer BioScience Private Limited, India
- Bayer Business Services GmbH, Germany
- Bayer Business Services Private Limited, India (merged with Bayer
MaterialScience Private Limited, India effective from April 1, 2013)
- Bayer Business and Technology Services LLC, U.S.A.
- Bayer CropScience (China) Company Limited, China
- Bayer CropScience (Private) Limited, Pakistan (merged with Bayer
Pakistan (Private) Limited, Pakistan effective from July 1, 2012)
- Bayer CropScience AG, Germany
- Bayer CropScience K.K., Japan
- Bayer CropScience LP, U.S.A.
- Bayer CropScience Limited, Bangladesh
- Bayer Direct Services GmbH, Germany
- Bayer HealthCare Pharmaceuticals Inc. Pine Brook, U.S.A.
- Bayer Intellectual Property GmbH, Germany
- Bayer Sheets India Private Limited, India (Formerly Bayer Malibu
Polymers Private Limited, India) (merged with Bayer MaterialScience
Private Limited, India effective from April 1, 2013)
- Bayer MaterialScience AG, Germany
- Bayer MaterialScience Limited, Hong Kong
- Bayer MaterialScience Private Limited, India
- Bayer Pakistan (Private) Limited, Pakistan
- Bayer Pharmaceuticals Private Limited, India
- Bayer S.A.S., France
- Bayer Technology Services GmbH, Germany
- Bayer Thai Company Limited, Thailand
- Bayer Turk Kimya Sanayi Limited Sirketi, Turkey
- Bayer Vietnam Limited, Vietnam
- Bayer Vapi Private Limited, India (Formerly Bilag Industries Private
Limited, India)
- Currenta GmbH & Co. OHG, Germany
- Nunhems India Private Limited, India
- PT. Bayer Indonesia, Indonesia
* The list of parties above have been limited to entities with whom
transactions have taken place during the year or balances are
outstanding as at the year end.
(iii) Key Management Personnel :
- Mr. Richard van der Merwe : Vice Chairman and Managing Director (from
February 1, 2014)
- Mr. Stephan Gerlich : Vice Chairman and Managing Director (upto
January 31, 2014)
- Dr. Thomas Hoffmann : Whole-time Director (from April 2, 2013)
- Mr. Kaikobad B. Mistry : Whole-time Director (upto January 31, 2013)
4. EMPLOYEE BENEFITS
The disclosures required as per Accounting Standard 15 - Employee
Benefits (Revised 2005), are as under:
a) Brief description of the Plans:
The Company has various schemes for employee benefits such as
provident fund, superannuation, gratuity, pension and long service
award. In case of funded schemes, the funds are administered through
trustees/ appropriate authorities. The Company''s defi ned contribution
plans are superannuation and provident fund since the Company has no
further obligation beyond making the contributions. The Company''s defi
ned benefit plans include gratuity and pension. The employees of the
Company are entitled to compensated absences and long service award as
per the Company''s policy.
5. OPERATING LEASE
a) Assets taken on lease:
The Company has taken certain residential fl ats and offices under
non-cancellable operating lease and lease rent amounting to 28
(Previous Year 28) has been recognised under the head Other Expenses -
''Rent'' under Note 24 to the Statement of Profit and Loss.
The Company has entered into cancellable leasing arrangement for offi
ce, residential and warehouse premises. The lease rental of 268
(Previous Year 172) has been recognised under the head Other Expenses -
''Rent'' under Note 24 to the Statement of Profit and Loss.
Further, the Company has recovered sub-lease rental of 56 (Previous
Year 22) which has been recognised under the head Other Income  ''Rent
Income'' under Note 18 to the Statement of Profit and Loss.
b) Assets given on lease:
Additionally, the Company had given Land (disclosed as Investment
Property) and portion of Building on operating lease under cancellable
lease arrangement during the year. The lease rentals aggregating to 1
(Previous Year 36) has been recognised under the head Other Income Â
''Rent Income'' under Note 18 to the Statement of Profit and Loss.
6. SEGMENT REPORTING
The Company has identifi ed business segment as its primary segment. In
accordance with Accounting Standard 17 - "Segment Reporting", the
Company has determined its business segment as "Agri Care". Since,
entire Company''s business is from Agri Care there are no other primary
reportable segments. Thus the segment revenue, segment results, total
carrying value of segment assets, total carrying amount of segment
liabilities, total cost incurred to acquire segment assets, total
amount of charge of depreciation and amortisation during the year are
all as reflected in the Financial Statement as at and for the year
ended March 31, 2014.
7. The Company uses forward contracts to hedge its risks of net
exposure associated with foreign currency fl uctuations. The Company
does not enter into any forward contract which is intended for trading
or speculative purposes.
8. 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") had
accepted 12,500 as full and fi nal aggregate consideration for the sale
and transfer of the said Property to Agile. The Company and Agile had,
on November 29, 2012 executed two agreements and other incidental
documents and undertaken all the requisite acts for concluding the
transaction. In the Previous Year, the Company had received balance
consideration of 7,300 as full and fi nal consideration. The Company
has no further obligations relating to the transfer of the said
Property.
Consequent to the acceptance of sale consideration of the Property, the
Company had ascertained and paid an additional Compensation
(capitalised to the cost of Thane land) of 178 in the Previous Year to
Lanxess India Private Limited (LIPL) pursuant to an Exit agreement
dated February 28, 2008.
Additionally, the Company had sold building situated at Powai, Mumbai
in the Previous Year pursuant to an agreement dated March 15, 2013.
The Exceptional item in the Previous Year represents profit of 11,083
arising from sale of Thane Land and Buildings and 823 arising from sale
of Powai Building.
9. The Bayer Companies worldwide place great importance on protecting
the environment and conserving natural resources. Pursuant to the
cessation of manufacturing activities at Thane, in the Previous Year,
the Company had incurred an expenditure (net) of 159 including
depreciation of 96 towards Demolition and Remediation activities. The
expenditure is net of one time recovery of 143 reimbursed by LIPL
pursuant to the Exit agreement dated February 28, 2008.
10. Approval of the Central Government and shareholders of the Company
are awaited for appointment of and payment of remuneration of 11 to
Vice Chairman and Managing Director of the Company, Mr. Richard van der
Merwe, for the period February 1, 2014 to March 31, 2014.
11. Previous year figures have been regrouped/ reclassified to
conform to current year''s presentation.
Mar 31, 2013
COMPANY PROFILE
Bayer CropScience Limited ("The Company") is a Company incorporated
under the Companies Act, 1956. At a meeting held on May 20, 2013, the
Board of Directors have approved 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. The Company is engaged into ''Agri Care'' business
which primarily includes manufacture, sale and distribution of
insecticides, fungicides, weedicides and various other agrochemical
products. Out of the total paid-up share capital of the Company 71.11%
is held by its promoters. The Company is listed on the Bombay Stock
Exchange, Mumbai. The Company has its own manufacturing sites at
Ankleshwar and Himatnagar in the State of Gujarat.
1. RELATED PARTY TRANSACTIONS (as identified by the Management)
(i) Ultimate Holding Company : Bayer AG, Germany
(ii) Parties under common control* :
- Bayer (China) Limited, China
- Bayer (South East Asia) Pte Ltd, Singapore
- Bayer A/S, Denmark
- Bayer Animal Health GmbH, Germany
- Bayer Australia Limited, Australia
- Bayer BioScience Private Limited, India
- Bayer Business Services GmbH, Germany
- Bayer Business Services Private Limited, India
- Bayer CropScience (China) Company Limited, China
- Bayer CropScience (Private) Limited, Pakistan (Upto June 30, 2012)
- Bayer CropScience AG, Germany
- Bayer CropScience K.K., Japan
- Bayer CropScience LP, U.SA.
- Bayer CropScience Limited, Bangladesh
- Bayer Direct Services GmbH, Germany
- Bayer Healthcare Pharmaceuticals Inc. Pine Brook, U.S.A.
- Bayer Intellectual Property GmbH, Germany
- Bayer Malibu Polymers Private Limited, India
- Bayer MaterialScience AG, Germany
- Bayer MaterialScience Limited, Hong Kong
- Bayer MaterialScience Private Limited, India
- Bayer Middle East FZE, United Arab Emirates
- Bayer Pakistan (Private) Limited, Pakistan
- Bayer Pharmaceuticals Private Limited, India
- Bayer S.A.S., France
- Bayer Taiwan Company Limited, Taiwan
- Bayer Technology Services GmbH, Germany
- Bayer Thai Company Limited, Thailand
- Bayer Turk Kimya Sanayi Limited Sirketi, Turkey
- Bayer Vietnam Limited, Vietnam
- Bayer Yakuhin Limited, Japan
- Bilag Industries Private Limited, India
- Currenta GmbH & Co. OHG, Germany
- Nunhems India Private Limited, India
- PT. Bayer Indonesia, Indonesia
* The list of parties above have been limited to entities with whom
transactions have taken place during the year or balances are
outstanding as at the year end.
(iii) Key Management Personnel :
- Mr. Stephan Gerlich : Vice Chairman and Managing Director
- Mr. Kaikobad B. Mistry : Whole-time Director (Upto January 31, 2013)
2. EMPLOYEE BENEFITS
The disclosures required as per Accounting Standard 15 - Employee
Benefits (Revised 2005), are as under:
a) Brief description of the Plans:
The Company has various schemes for employee benefits such as provident
fund, superannuation, gratuity, pension and long service award. In case
of funded schemes, the funds are administered through trustees/
appropriate authorities. The Company''s defined contribution plans are
superannuation and provident fund since the Company has no further
obligation beyond making the contributions. The Company''s defined
benefit plans include gratuity and pension. The employees of the
Company are entitled to compensated absences and long service award as
per the Company''s policy.
3. OPERATING LEASE ''
a) Assets taken on lease:
The Company has taken residential flats and office under
non-cancellable operating lease and lease rent amounting to 28
(Previous Year 33) has been recognised under the head Other Expenses -
''Rent'' under Note 23 to the Statement of Profit and Loss.
b) Assets given on lease:
The Company had given portion of the building, office area and parking
area under non-cancellable operating lease and lease rent amounting to
Nil (Previous Year 15) has been recognised under the head Other Income
- ''Rent Income'' under Note 17 to the Statement of Profit and Loss.
This Lease expired on December 31, 2011.
Additionally, the Company had given portion of Building on operating
lease under cancellable lease arrangement during the year. The lease
rentals aggregating to 36 (Previous Year 53) has been recognised under
the head Other Income - ''Rent Income'' under Note 17 to the
Statement of Profit and Loss.
4. SEGMENT REPORTING
The Company has identified business segment as its primary segment. In
accordance with Accounting Standard 17 - "Segment Reporting", the
Company has determined its business segment as "Agri Care". Since,
entire Company''s business is from Agri Care there are no other primary
reportable segments. Thus the segment revenue, segment results, total
carrying value of segment assets, total carrying amount of segment
liabilities, total cost incurred to acquire segment assets, total
amount of charge of depreciation and amortisation during the year are
all as reflected in the Financial Statement as at and for the year
ended March 31, 2013.
The Company has identified the Secondary Segment as geographical
segment based on the location of customers.
5. 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 12,500 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. The Company has received balance consideration of 7,300
(net of advance of 5,200) as full and final consideration. The Company
has no further obligations relating to the transfer of the said
Property.
Consequent to the acceptance of sale consideration of the Property, the
Company has ascertained and paid an additional Compensation
(capitalised to the cost of Thane land) of 178 in the current year to
Lanxess India Private Limited (LIPL) pursuant to an Exit agreement
dated February 28, 2008.
Additionally, the Company has sold building situated at Powai, Mumbai
pursuant to an agreement dated March 15, 2013.
The Exceptional item represents profit of 11,083 arising from sale of
Thane Land and Buildings and 823 arising from sale of Powai Building.
6. The Bayer Companies worldwide place great importance on protecting
the environment and conserving natural resources. Pursuant to the
cessation of manufacturing activities at Thane, the Company has
incurred an expenditure of 159 (net) during the year (Previous Year
579) including depreciation of 96 (Previous Year 110) towards
Demolition and Remediation activities. The expenditure for the current
year is net of one time recovery of 143 (Previous Year Nil) reimbursed
by LIPL pursuant to the exit agreement dated February 28, 2008.
7. Previous year figures have been regrouped/ reclassified to conform
to current year''s presentation.
Mar 31, 2012
COMPANY PROFILE
Bayer CropScience Limited ("The Company") is a Company incorporated
under the Companies Act, 1956 and having its registered office at Bayer
House, Central Avenue, Hiranandani Gardens, Powai, Mumbai - 400 076.
The Company is engaged into 'Agri Care' business which primarily
includes manufacture, sale and distribution of insecticides,
fungicides, weedicides and various other agrochemical products. Out of
the total paid-up share capital of the Company 71.11% is held by its
promoters. The Company is listed on the Bombay Stock Exchange, Mumbai.
The Company has its own manufacturing sites at Ankleshwar and
Himatnagar in the State of Gujarat.
a) Rights, preferences and restrictions attached to Equity Shares:
The Company has one class of Equity Shares having a par value of Rs. 10/-
per share. Each Shareholder is eligible for one vote per share held.
The dividend proposed by the Board of Directors is subject to the
approval of the Shareholders in the ensuing Annual General Meeting. In
the event of liquidation, the Equity Shareholders are eligible to
receive the remaining assets of the Company after distribution of all
preferential amounts, in proportion to their shareholding.
* There are no shareholders holding more than 5% of the aggregate
Equity Shares of the Company except those marked above.
The Board of Directors, in their meeting held on May 29, 2012 proposed
a dividend of Rs. 4.20 per share for the year ended March 31, 2012
(Previous Year Rs. 4.00 per share) amounting to 166 (Previous Year 158)
and corporate dividend tax of 27 (Previous Year 26). The proposal is
subject to approval of shareholders at the Annual General Meeting.
a) There are no amounts as at year-end which are due for payment to
Investor Education and Protection Fund under Section 205C of the
Companies Act, 1956.
b) Amount is below the rounding off norm adopted by the Company.
Provisions represent estimates made for probable liabilities/ claims
arising out of pending disputes, litigations/ commercial transactions
with statutory authorities/ third parties. The outflow with regard to
the said matter depends on the exhaustion of remedies available to the
Company under the law and hence the Company is not able to reasonably
ascertain the timing of the outflow. During the year, an amount of 42
is recognised under the head "Purchases of Stock-in-Trade" and 20 under
the head "Exceptional Items" [Refer Note 37] as an additional provision
towards Commercial and Other Matters.
b) A portion of Buildings has been given on operating lease to Group
Companies and Third Parties, the cost of which is not readily
ascertainable.
c) The Company has entered into a non-binding and exclusive arrangement
with Agile Real Estate Private Limited vide Memorandum of Understanding
dated March 31, 2011 for the proposed sale of Land and Buildings
situated at Village Balkum, Thane at a consideration to be finalised at
a future date. The net book value of the Land and Buildings as on March
31, 2012 is 915 (Previous year 915) and 122 (Previous year 129)
respectively and is classified under the head "Other Current Assets" as
at March 31, 2012. [Refer Note 16]
The Company has received an earnest amount of 2,600 on March 31, 2011
and an advance payment of 2,600 on December 30, 2011 for this exclusive
arrangement, which is disclosed under the head "Other Liabilities". The
conveyance, transfer, sale and possession of the aforesaid Thane Land
and Buildings will be completed at a future date subject to relevant
approvals, permissions from the government and other statutory bodies,
as may be deemed necessary and on receipt of sale consideration on or
before September 30, 2012.
d) Figures shown in brackets are in respect of previous year.
(a) Amount is below the rounding off norm adopted by the Company.
(b) Aggregate Book Value of Unquoted Investments 402 (Previous Year
868).
(b) The amount of excise duty disclosed as deduction from turnover is
the total excise duty for the year except the excise duty related to
the difference between the closing stock and opening stock and excise
duty paid but not recovered for free goods, breakages/ damages, captive
consumption and expired goods, which has been disclosed as excise duty
expense in Note 24.
(a) Includes 40 (Previous Year 50) on account of Write off/ Write down
in carrying values of semi-finished, finished goods and stock-in-trade.
As at As at
31.03.2012 31.03.2011
1. CONTINGENT LIABILITIES
Claims against the Company not
acknowledged as debts towards:
a) Direct Tax matters 461 171
b) Indirect Tax matters (Excise duty,
Customs duty, Service tax and Sales
tax) 763 754
c) Litigation/ claims filed by
customer/ vendor/ labour 33 33
d) Litigation/ demands raised by other
Statutory Authorities 53 28
Future cash flows in respect of above, if any, is determinable only on
receipt of judgement/ decisions pending with relevant authorities.
2. RELATED PARTY TRANSACTIONS (as identified by the Management)
(i) Ultimate Holding Company Bayer AG, Germany
(ii) Parties under common control :
- Bayer (China) Limited, China
- Bayer (South East Asia) Pte Ltd, Singapore
- Bayer A/S, Denmark
- Bayer Animal Health GmbH, Germany
- Bayer Australia Limited, Australia
- Bayer BioScience Private Limited, India
- Bayer Business and Technology Services LLC, U.S.A.
- Bayer Business Services GmbH, Germany
- Bayer Business Services Private Limited, India (from December 1,
2010)
- Bayer Co. (Malaysia) Sdn. Bhd., Malaysia
- Bayer CropScience (China) Company Limited, China
- Bayer CropScience (Private) Limited, Pakistan
- Bayer CropScience AG, Germany
- Bayer CropScience K.K., Japan
- Bayer CropScience LP, U.S.A.
- Bayer CropScience Limited, Korea
- Bayer CropScience Limited, Bangladesh
- Bayer CropScience Inc., Philippines
- Bayer Direct Services GmbH, Germany
- Bayer HealthCare Limited, Hong Kong
- Bayer HealthCare LLC, U.S.A.
- Bayer Korea Limited, Korea
- Bayer Malibu Polymers Private Limited, India
- Bayer MaterialScience AG, Germany
- Bayer MaterialScience Limited, Hong Kong
- Bayer MaterialScience Private Limited, India
- Bayer Middle East FZE, United Arab Emirates
(ii) Parties under common control (contd.)
- Bayer Pharmaceuticals Private Limited, India
- Bayer Public Limited Company, United Kingdom
- Bayer S.A.S., France
- Bayer Taiwan Company Limited, Taiwan
- Bayer Technology and Engineering (Shanghai) Company Limited, China
- Bayer Technology Services GmbH, Germany
- Bayer Thai Company Limited, Thailand
- Bayer Vietnam Limited, Vietnam
- Bayer Yakuhin Limited, Japan
- Bilag Industries Private Limited, India
- Currenta GmbH & Co. OHG, Germany
- Nunhems India Private Limited, India
- PT. Bayer Indonesia, Indonesia
3. EMPLOYEE BENEFITS
a) Brief description of the Plans:
The Company has various schemes for employee benefits such as provident
fund, superannuation, gratuity, pension and long service award. In case
of funded schemes, the funds are administered through trustees/
appropriate authorities. The Company's defined contribution plans are
superannuation and provident fund since the Company has no further
obligation beyond making the contributions. The Company's defined
benefit plans include gratuity and pension. The employees of the
Company are entitled to compensated absences and long service award as
per the Company's policy.
* Represents liability takenover/ (discharged) in respect of employees
transferred from/ (to) Group Companies
The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factor such as supply and demand factors in the employment
market.
(viii) Asset Information:
The Plan Asset for the funded gratuity plan is administered by Life
Insurance Corporation of India ('LIC') as per the Investment Pattern
stipulated for Pension and Group Schemes Fund by Insurance Regulatory
and Development Authority regulations.
The above information pertains only to those shareholders where direct
remittances are made by the Company.
4. OPERATING LEASE
a) Assets taken on lease:
The Company has taken residential flats and office under
non-cancellable operating lease and lease rent amounting to 33
(Previous Year 32) has been recognised under the head Other Expenses -
'Rent' under Note 24 to the Statement of Profit and Loss.
The Company has entered into cancellable leasing arrangement for
office, residential and warehouse premises. The lease rental of 112
(Previous Year 119) has been recognised under the head Other Expenses -
'Rent' under Note 24 to the Statement of Profit and Loss.
b) Assets given on lease:
The Company had given portion of the building, office area and parking
area under non-cancellable operating lease and lease rent amounting to
15 (Previous Year 19) has been recognised under the head Other Income -
'Rent Income' under Note 18 to the Statement of Profit and Loss. This
lease expired on December 31, 2011.
Additionally, the Company has given portion of Building on operating
lease under cancellable lease arrangement. The lease rentals
aggregating to 63 (Previous Year 57) has been recognised under the head
Other Income-'Rent Income' under Note 18 to the Statement of Profit and
Loss.
5. SEGMENT REPORTING
The Company has identified business segment as its primary segment. In
accordance with Accounting Standard 17 - "Segment Reporting", the
Company has determined its business segment as "Agri Care". Since
entire Company's business is from Agri Care, there are no other primary
reportable segments. Thus the segment revenue, segment results, total
carrying value of segment assets, total carrying amount of segment
liabilities, total cost incurred to acquire segment assets, total
amount of charge of depreciation and amortisation during the year are
all as reflected in the Financial Statement as at and for the year
ended March 31, 2012.
The Company has identified the Secondary Segment as geographical
segment based on the location of customers.
6. The Company uses forward contracts to hedge its risks of net
exposure associated with foreign currency fluctuations. The Company
does not enter into any forward contract which is intended for trading
or speculative purposes.
Figures shown in brackets are in respect of previous year.
* Amount is below the rounding off norm adopted by the Company.
7. The Bayer Companies worldwide place great importance on protecting
the environment and conserving natural resources. Pursuant to the
cessation of manufacturing activities at Thane, the Company has
incurred an expenditure of 579 during the year (Previous Year 38)
including depreciation of 110 (Previous Year Nil) towards Demolition
and Remediation activities.
8. The financial statements for the year ended March 31, 2011 were
prepared as per the then applicable, pre-revised Schedule VI to the
Companies Act, 1956. Consequent to the notification of Revised Schedule
VI under the Companies Act, 1956, the financial statements for the year
ended March 31, 2012 are prepared as per Revised Schedule VI.
Accordingly, the previous year figures have also been reclassified to
conform to current year's classification. The adoption of Revised
Schedule VI for previous year figures does not impact recognition and
measurement principles followed for preparation of financial
statements.
Notes:
1) The above Cash Flow Statement has been prepared under the "Indirect
Method" setout in Accounting Standard - 3 on Cash Flow Statements
notified under Section 211 (3C) of the Companies Act, 1956.
2) Short-term highly liquid investment comprise of Investments in
Mutual Funds which are highly liquid and have an insignificant risk of
change in value.
3) Previous year's figures have been reclassified to conform to the
current year's presentation.
@ Revenue from operations are net of excise duty. Sales upto year 2003
are gross of trade discount.
Includes figures of erstwhile Bayer Cropscience India Limited on
account of amalgamation, with effect from April 01, 2003 and excludes
transfer of non-CropScience business to wholly owned subsidiary Bayer
Polychem (India) Limited with effect from November 01, 2003 and sale of
consumer care division to S.C. Johnson Private Limited with effect from
June 01, 2003.
* The shares of the Company were sub-divided from a face value of X
100/- per share to X 10/- per share, pursuant to the Scheme of
Amalgamation between the Company and erstwhile Bayer Cropscience India
Limited.
$ Figures of the period 2007-08 are for fifteen months.
** Figures based on Revised Schedule VI.
Figures have been regrouped wherever necessary.
Mar 31, 2011
1. Estimated amount of contracts net of advances remaining to be
executed on capital account Rs. 144,631 ('000s) [Previous Year Rs. 217,843
('000s)].
2. Contingent Liabilities
Rs. '000s
Particulars As at As at
March 31, March 31,
2011 2010
(a) In respect of Bank Guarantees issued
in favour of statutory authorities 4,986 7,945
(b) Counter Guarantee by the Company
issued in favour of Gujarat Industrial
Development 2,967 2,967
Corporation
(c) In respect of customs duty on
outstanding Export obligation against
advance licenses 123,765 171,981
acquired by the Company
(d) Claims against the Company not
acknowledged as debts in respect of
litigation/ claims 32,889 17,559
filed by customer/ vendor/ labour
(e) In respect of Indirect Tax matters
(Excise duty, Customs duty, Service tax
and Sales tax) 753,559 736,545
(f) In respect of Direct Tax matters 170,901 168,895
(g) Demand raised by Ministry of
Chemicals and Fertilisers, Department
of Chemicals and Petro 27,581 27,581
Chemicals for the difference between the
pooled price and the retention price on
the production of Chloroquine Phosphate
from 1979-1980 upto December 14,1988.
The Company has filed a writ petition in the Hon'able High Court of
Mumbai, challenging this demand.
Note: Future cash flows in respect of (d) to (g) above, if any, is
determinable only on receipt of judgement/ decisions pending with
relevant authorities.
3. Operating Lease
a) Assets taken on lease:
The Company has taken residential flats and office under
non-cancellable operating lease and lease rent amounting to Rs. 31,631
('000s) [Previous Year f 44,008 ('000s)] has been debited to Profit and
Loss Account.
4. Segment Reporting
The Company has only one reportable business segment "Agri Care" as
primary segment. The Company has identified the Secondary Segment as
geographical segment based on the location of customers.
5. Related Party Transactions (as identified by the Management) (i)
Ultimate Holding Company : Bayer AG, Germany (ii) Parties under common
control :
- Bayer (China) Limited, China
- Bayer (Malaysia) Sdn. Bhd., Malaysia
- Bayer A/S, Denmark
- Bayer Animal Health GmbH, Germany
- Bayer Australia Limited, Australia
- Bayer BioScience Private Limited, India
- Bayer Business and Technology Services LLC, U.S.A.
- Bayer Business Services GmbH, Germany
- Bayer Business Services Private Limited, India (from December 1,
2010)
- Bayer CropScience (China) Co. Limited, China
- Bayer CropScience (Pvt.) Limited, Pakistan
- Bayer CropScience AG, Germany
- Bayer CropScience K.K., Japan
- Bayer CropScience Limited, Bangladesh
- Bayer CropScience Limited, Korea
- Bayer CropScience OHQ (Malaysia) Sdn. Bhd., Malaysia
- Bayer CropScience Pty Limited, Australia
- Bayer CropScience S.A., France (upto December 31, 2009)
- Bayer CropScience Inc., U.S.A.
- Bayer Direct Services GmbH, Germany
- Bayer Health Care AG, Germany
- Bayer HealthCare Aktiengesellschaft, Germany
- Bayer HealthCare LLC, U.S.A.
- Bayer HealthCare Limited, Hongkong
- Bayer HealthCare Pharmaceuticals Inc., U.S.A.
- Bayer Industry Services GmbH, Germany
- Bayer Korea Limited, Korea
- Bayer Malibu Polymers Private Limited, India
- Bayer MaterialScience AG, Germany
- Bayer MaterialScience Limited, Hongkong
- Bayer MaterialScience Private Limited, India
- Bayer Middle East FZE, U.A.E.
- Bayer New Zealand Limited, New Zealand
- Bayer Parsian AG, Iran
- Bayer Pharmaceuticals Private Limited, India
- Bayer Public Limited Company, United Kingdom
- Bayer S.A., Brazil
- Bayer S.A.S., France (from January 1, 2010)
- Bayer South East Asia Pte Limited, Singapore
- Bayer Taiwan Company Limited, Taiwan
- Bayer Technology and Engineering (Shanghai) Co. Limited, China
- Bayer Technology Services, Germany
- Bayer Thai Company Limited, Thailand
- Bayer Turk Kimya Sanayi Limited Sti., Turkey
- Bayer Vietnam Limited, Vietnam
- Bayer Yakuhin Limited, Japan
- Bilag Industries Private Limited, India
- EuroServices Bayer GmbH, Germany
- Nunhems Seeds Private Limited, India
- PT Bayer Indonesia, Indonesia (iii) Key Management Personnel:
Mr. Stephan Gerlich Vice Chairman and Managing Director
Mr. Kaikobad B. Mistry Whole-time Director
6. Employee Benefits
The disclosures required as per Accounting Standard 15 - "Employee
Benefits" (revised 2005) are as under:
a) Brief description of the Plans:
The Company has various schemes for employee benefits such as provident
fund, superannuation, gratuity, pension and long service award. In case
of funded schemes, the funds are administered through trustees/
appropriate authorities. The Company's defined contribution plans are
superannuation and provident fund since the Company has no further
obligation beyond making the contributions. The Company's defined
benefit plans include gratuity and pension. The employees of the
Company are entitled to leave encashment, compensated absences and long
service award as per the Company's policy.
7. The amount of excise duty disclosed as deduction from turnover is
the total excise duty for the year except the excise duty related to
the difference between the closing stock and opening stock and excise
duty paid but not recovered, which has been disclosed as excise duty
expense in the Schedule 19.
8. The Bayer Companies worldwide place great importance on protecting
the environment and conserving natural resources. Pursuant to the
cessation of manufacturing activities at Thane, till date the Company
has incurred Rs. 37,785 ('000s) during the year 2010-11 [Previous Year Rs.
54,904 ('000s)] towards Demolition and Remediation activities. These
ongoing activities will allow the Thane Site to be left in a safe state
with human health and environmental risks mitigated to generally
accepted levels in industrialised countries.
9. The Company has entered into a non-binding and exclusive
arrangement with Agile Real Estate Private Limited (AREPL) vide
Memorandum of Understanding ("MOU") dated March 31, 2011 for the
proposed sale of Land and Buildings situated at Village Balkum, Thane
at a consideration to be finalised at a future date. The net book value
of the Land and Buildings as on March 31, 2011 is Rs. 915,389 ('000s) and
Rs. 128,716 ('000s), respectively.
The Company has received an earnest amount of Rs. 2,600,000 ('000s) for
this exclusive arrangement, which is disclosed under the head "Current
Liabilities". The conveyance, transfer, sale and possession of the
aforesaid Thane Land and Buildings will be completed at a future date
subject to relevant approvals, permissions from the government and
other statutory bodies, as may be deemed necessary and on receipt of
sale consideration on or before September 30, 2012.
10. Previous year figures have been re-grouped/ re-classified wherever
necessary.
Mar 31, 2010
1. Estimated amount of contracts net of advances remaining to be
executed on capital account Rs. 217,843 (000s) [Previous Year Rs.
381,279 (000s)].
2. Contingent Liabilities
Rupees in Ã000s
Particulars As at As at
March 31, March 31,
2010 2009
(a) In respect of Bank Guarantees
issued in favour of statutory authorities 7,945 19,915
(b) Counter Guarantee by the Company
issued in favour of Gujarat Industrial 2,967 2,967
Development Corporation
(c) In respect of custom duty on
outstanding Export obligation against
advance 171,981 83,027
licenses acquired by the Company
(d) Claims against the Company not
acknowledged as debts in respect of
litigation/ 17,559 18,719
claims fi led by customer/ vendor/ labour
(e) In respect of Indirect tax matters
(Excise duty, Customs duty,
Service tax and 736,545 389,232
Sales tax)
(f) In respect of Direct tax matters 168,895 140,326
(g) Demand raised by Ministry of
Chemicals and Fertilisers, Department of 27,581 27,581
Chemicals and Petro Chemicals for the
difference between the pooled price and
the retention price on the production of
Chloroquine Phosphate from 1979-1980 upto
December 14, 1988. The Company has fi led
a writ petition in the HonÃable High
Court of Mumbai, challenging this demand.
Note: Future cash fl ows in respect of (d) to (g) above, if any, is
determinable only on receipt of judgement/ decisions pending with
relevant authorities.
Direct and Indirect tax
Provisions in this category represents estimates made for probable
liabilities arising out of pending disputes/ litigations with various
tax authorities. The outfl ow with regard to the said matter depends on
the exhaustion of remedies available to the Company under the law and
hence the Company is not able to reasonably ascertain the timing of the
outfl ow.
Commercial and other matters
Provisions in this category represent estimates made for probable
liabilities/ claims arising out of commercial transaction with third
parties. The outfl ow with regard to the said matter depends on the
exhaustion of remedies available to the Company under the law and hence
the Company is not able to reasonably ascertain the timing of the outfl
ow.
3. Segment Reporting
The Company has only one reportable business segment ÃAgri Careà as
primary segment. The Company has identified the Secondary Segment as
geographical segment based on the location of customers.
4. Related Party Transactions (as identifi ed by the Management) (i)
Ultimate Holding Company : Bayer AG, Germany (ii) Parties under common
control :
- Bayer (China) Limited, China
- Bayer (Malaysia) Sdn. Bhd., Malaysia
- Bayer Animal Health GmbH, Germany
- Bayer Australia Ltd., Australia
- Bayer BioScience Private Limited, India
- Bayer Business Services GmbH, Germany
- Bayer Corporate and Business Services GmbH, Germany
- Bayer CropScience (China) Co. Ltd., China
- Bayer CropScience (Pvt.) Ltd., Pakistan
- Bayer CropScience AG, Germany
- Bayer CropScience K.K., Japan
- Bayer CropScience Limited, Bangladesh
- Bayer CropScience L P, U.S.A.
- Bayer CropScience Ltd., Korea
- Bayer CropScience OHQ (Malaysia) Sdn Bdh, Malaysia
- Bayer CropScience Pty Limited, Australia
- Bayer CropScience S.A., France (upto December 31, 2009)
- Bayer CropScience Inc., U.S.A.
- Bayer Direct Services GmbH, Germany
- Bayer S.A.S., France (from January 1, 2010)
- Bayer HealthCare AG, Germany
- Bayer HealthCare Aktiengesellschaft, Germany
- Bayer HealthCare Berkeley, U.S.A.
- Bayer HealthCare, NJ U.S.A.
- Bayer Industry Services GmbH, Germany
- Bayer Korea Limited, Korea
- Bayer MaterialScience AG, Germany
- Bayer MaterialScience Limited, Hongkong
- Bayer MaterialScience Private Limited, India
- Bayer Middle East FZE, U.A.E.
- Bayer New Zealand Ltd., New Zealand
- Bayer Parsian AG, Iran
- Bayer Pharmaceuticals Private Limited, India
- Bayer Polychem (India) Limited, India (upto March 31, 2009)
- Bayer Public Limited Company, United Kingdom
- Bayer S.A., Brazil
- Bayer S.A., Colombia
- Bayer South East Asia Pte Limited, Singapore
- Bayer Taiwan Company Ltd., Taiwan
- Bayer Technology and Engineering (Shanghai) Co. Limited, China
- Bayer Technology Services, Germany
- Bayer Thai Company Limited, Thailand
- Bayer Türk Kimya Sanayi Limited Sti., Turkey
- Bayer Vietnam Limited, Vietnam
- Bayer Yakuhin Ltd., Japan
- Bilag Industries Private Limited, India
- EuroServices Bayer GmbH, Germany
- Nunhems Seeds Private Limited, India
- PT Bayer Indonesia, Indonesia
(iii) Key Management Personnel:
Mr. Stephan Gerlich : Vice Chairman and Managing Director
Mr. Kaikobad B. Mistry : Whole Time Director (From July 1, 2008)
Ms. Christiane Kunze : Whole Time Director (Upto May 31, 2008)
5. Employee Benefits
The disclosures required as per Accounting Standard 15 Ã "Employee
Benefi ts" (revised 2005) are as under:
a) Brief description of the Plans:
The Company has various schemes for employee benefits such as provident
fund, superannuation, gratuity, pension and long service award. In case
of funded schemes, the funds are administered through trustees/
appropriate authorities. The CompanyÃs defined contribution plans are
superannuation and provident fund since the Company has no further
obligation beyond making the contributions. The CompanyÃs defined
benefit plans include gratuity and pension. The employees of the
Company are entitled to leave encashment, compensated absences and long
service award as per the CompanyÃs policy.
(viii) Asset Information:
The Plan Asset for the funded gratuity plan are administered by Life
Insurance Corporation of India (ÃLICÃ) as per the Investment Pattern
stipulated for Pension and Group Schemes Fund by Insurance Regulatory
and Development Authority regulations.
6. The amount of excise duty disclosed as deduction from turnover is
the total excise duty for the year except the excise duty related to
the difference between the closing stock and opening stock and excise
duty paid but not recovered, which has been disclosed as excise duty
expense in the Schedule 19.
7. The Company uses forward contracts to hedge its risks of net
exposure associated with foreign currency fluctuations. The Company
does not enter into any forward contract which is intended for trading
or speculative purposes.
8. The Bayer Companies worldwide place great importance on protecting
the environment and conserving natural resources. Pursuant to the
cessation of manufacturing activities at Thane, till date the Company
has incurred Rs. 54,904 (000s) during the year 2009-10 [Previous year
Rs. 60,325 (000s)] towards Demolition and Remediation activities.
These ongoing activities will allow the Thane Site to be left in a safe
state with human health and environmental risks mitigated to generally
accepted levels in industrialised countries.
9. Previous year figures have been re-grouped/ re-classified
wherever necessary.
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