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Notes to Accounts of Monsanto India Ltd.

Mar 31, 2014

1. COMPANY BACKGROUND:

Monsanto India Limited (the ''Company'') was incorporated on December 8, 1949. The Company is presently engaged in the business of production and sale of agricultural inputs, namely, chemicals and hybrid seeds. The Company''s corporate office is located in Mumbai. It has a chemical production unit at Silvassa, hybrid seeds processing and drying units at Hyderabad and breeding stations at Bangalore and Hyderabad.

2. RELATED PARTY DISCLOSURE:

Names of related parties and description of relationship

A. Holding Company:

Holding Company- Monsanto Holdings Private Limited Ultimate Holding Company- Monsanto Company, USA

B. Fellow Subsidiaries:

Monsanto Pakistan Agritech (Pvt) Ltd, Seminis Seeds (Beijing) Co Ltd, Mahyco Monsanto BioTech Pvt Ltd, PT Monagro Kimia, PT Branita Sandhini, Monsanto Philipines Inc, Monsanto Singapore Co PTE Ltd, Monsanto Thailand Ltd, Beijing New Millenium Fen., Monsanto Europe SA, Monsanto SAS, Monsanto Hungaria KFT, Monsanto International SARL, Monsanto Argentina SAIC., Monsanto Ag Product LLC, Seminis Vegetable Seeds Inc.

C. Key Managerial Personnel:

Mr. Gyanendra Shukla, Managing Director

3. The Company has continually maintained a position that its income from agricultural activities (which involves growing seeds in various states through local growers), is not taxable. This contention has been upheld by the Honorable Bombay High Court for the Assessment Years 1993-94 to 2001-02 and Assessment years 2003-04 to 2005-06 respectively. In the previous year, the income tax authorities have filed special leave petitions with the Supreme Court against favorable orders received for the aforesaid assessment years. Additionally, the issue has been decided in favor of the company by Commissioner of Income – tax (Appeals) for Assessment Years 2002-03, 2006-07, 2007-08 and 2008-09 respectively and which are now pending before the Income-tax Appellate Tribunal.

4. Monsanto Company USA (MC), the ultimate holding company, has established the Monsanto Company Long

Term Incentive Plan. As part of the plan, employees of Monsanto India Limited are provided with an opportunity to acquire shares of MC via stock option / equity-based awards. The eligible employees are granted the options / rights which vest over a period of 3/4 years from the date of the grant and can be exercised after the vesting period through any of the following three methods viz., i) cashless sell; ii) cashless hold and iii) cash purchase.

Monsanto India Limited measures the compensation expense for the stock options and equity- based awards (net of forfeitures) at their fair values determined using a Lattice binomial model on the date of grant and amortised over the vesting period. Accordingly an amount of Rs. 4.43 Crores (Previous year Rs. 0.33 Crores) has been debited to the statement of profit and loss for the year, which includes a charge by the parent company – MC on exercise of the equity based awards by employees adjusted by the compensation provision available in the books of the company.

During the year MC has granted to employees of the Company 11,852 (Previous Year 14,860) options / stock awards on various dates of which none are vested. However 2,238 (Previous Year 5,171) options / stock-awards were withdrawn on account of employee resignations 27,689 (Previous Year 30,982) options were exercised and 1695 (Previous year 7,518) options (net) were transferred to other Companies during the year, resulting in an outstanding balance of 42,075 (Previous year 58,455) options/ stock-awards at the end of the year.

5. In the current year, the assets held for disposal at Bellary were written down to net realizable value, considered on the asset block basis in accordance with Accounting Standard 10 – Accounting for Fixed Assets, resulting in a charge of Rs. 6.90 crores to the statement of profit and loss shown as ''depletion in value of fixed assets held for disposal'' under Exceptional Items in the statement of profit and loss.

6. COMPARATIVE FINANCIAL INFORMATION:

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

1 a) Net profit before tax and (Increase) / Decrease in Trade and Other Receivables includes unrealised foreign exchange loss ( previous year gain) amounting to Rs. 0.03 Crores ( Previous Year Rs. 0.20 Crores).

b) Also, Net profit before tax and Increase / (Decrease ) in Trade and Other Payables includes unrealised foreign exchange loss (previous year (loss) ) amounting to Rs.( 0.50) Crores ( Previous Year Rs.(0.90) Crores).


Mar 31, 2013

1. COMPANY BACKGROUND:

Monsanto India Limited (the ''Company'') was incorporated on 8th December 1949. The Company is presently engaged in the business of production and sale of agricultural inputs, namely, chemicals and hybrid seeds. The Company''s corporate office is located in Mumbai. It has a chemical production unit at Silvassa, hybrid seeds processing and drying units at Hyderabad and breeding stations at Bangalore and Hyderabad.

As at As at 31st March, 2013 31st March, 2012

2. CONTINGENT LIABILITIES IN RESPECT OF THE FOLLOWING MATTERS:

i) Income-tax

ii) Sales tax 87.28 56.61

iii) Claims against the Company not acknowledged as debts 2.23 3.12

1.75 1.33

Note: In respect of items mentioned above, till matters are finally decided, the financial effect cannot be ascertained.

3. RELATED PARTY DISCLOSURE:

Names of related parties and description of relationship

A. Holding Company:

Holding Company- Monsanto Holdings Private Limited Ultimate Holding Company- Monsanto Company, USA

B. Fellow Subsidiaries:

P.T. Branita Sandhini, Monsanto Philippines INC, Monsanto Thailand Ltd, Monsanto Singapore Pte Ltd, Monsanto Pakistan Agri-tec (Pvt) Ltd, P.T. Monagro Kimia, Monsanto AG Product LLC, Monsanto S.A.S, Seminis Beijing Co. Ltd., Mahyco Monsanto Biotech (I) Ltd. Monsanto International SARL, Monsanto Hungaria KFT, Beijing New Millenium FEN, Monsanto Europe SA, Seminis Vegetable Seeds INC, Monsanto Argentina, SAIC.

C. Key Managerial Personnel:

Mr. Amitabh Jaipuria, Managing Director (upto 28-Feb-2013)

Mr Gyanendra Shukla, Managing Director (w.e.f Ql-Mar-2013)

4. The dominant source and nature ofthe risks and returns ofthe agricultural chemistry and seeds activities ofthe Company not being significantly different, the Company operates a single segment of activity, "Agricultural Inputs", within the same geography.

5. The Company has incurred the following expenses towards operating leases pertaining to vehicles, office equipments, warehouses and residential premises. Lease agreements are executed for a period ranging from H to48 months.

6. The Company has continually maintained a position that its income from agricultural activities (which involves growing seeds in various states through local growers), is not taxable. This contention has been upheld by the Honorable Bombay High Court for the Assessment Years 1993-94 to 2001-02 and Assessment years 2003-04 to 2005-06 and by the Commissioner of Income tax (Appeals) for Assessment Year 2002-03, 2006-07, 2007-08 and 2008-09. In the current year, the income tax authorities have filed special leave petitions with the Supreme Court against favorable orders received for the assessment years as mentioned above.

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

The Company''s best estimate of contributions expected to be paid to the plan during the annual period beginning after March 31, 2013 is Rs. 4.11 Crores (Previous YearRs. 1.88 Crores)

7. The Company has accrued the liability for compensated absences based on the actuarial valuation as at the balance sheet date conducted by an independent actuary and provided for the actuarial liability atRs. 7.69 Crores (Previous Year Rs. 6.29 Crores).

8. Monsanto Company, USA (MC) has established the Monsanto Company Long Term Incentive Plan. As part of the plan, employees of Monsanto India Limited are provided with an opportunity to acquire shares of MC via stock option / equity- based awards. The eligible employees are granted the options which shall vest with the employees over a period of 3 years from the date of the grant and they can exercise the stock options after their vesting period through any of the following three methods viz., i) cashless sell; ii) cashless hold and iii) cash purchase. The employee can exercise the option within a stipulated period mentioned in the plan.

Monsanto India Limited measures compensation expense for stock options and equity- based awards (net of forfeitures) at their fair value determined using a Lattice binomial model on the date of grant and amortised over the vesting period. Accordingly an amount ofRs. 0.33 Crores (Previous yearRs. 2.59 Crores) has been debited to the statement of profit and loss for the year, after adjusting an amount ofRs. 1.94 Crores reversed on lower actual compensation expense consequent to exercise of options by employees.

During the year MC has granted to employees of the Company 14,860 (Previous Year 15,354) options / stock awards on various dates of which none are vested. However 5,171 (Previous Year 3,270) options / stock-awards were withdrawn on account of employee resignations 30,982 (Previous Year 1,184) options were exercised and (7,518) (Previous year 6,070) options (net) were transferred to other Companies during the year, resulting in an outstanding balance of 58,455 (Previous year 72,230) options/ stock-awards at the end ofthe year.

9. In an earlier year, as a part of consolidation of manufacturing operations in Hyderabad to achieve operational savings, the Company shifted the seed processing and drying operations from Bellary and Eluru to Hyderabad and related assets were shown under ''Assets held for sale'' in the Balance Sheet. The said assets were valued at the lower of net book value and net realizable value in accordance with Accounting Standard 10 - Accounting for Fixed Assets. Accordingly, in case ofthe assets at Eluru, the net realizable value was lower byRs. 12.17 Crores and the loss was recognized in the statement of profit and loss. In the previous year, the said assets at Eluru were sold at a gain ofRs. 0.26 Crores, which was recognized in the statement of profit and loss. In respect the assets held for sale at Bellary, the management expects to realize value higher than the net book value ofthe assets. Accordingly, the assets at Bellary are carried at net book value.

10. The Year end Foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:

11. COMPARATIVE FINANCIAL INFORMATION:

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2012

1. Company Background:

Monsanto India Limited (the "Company") was incorporated on 8th December 1949. The company is presently engaged in the business of production and sale of agricultural inputs, namely, chemicals and hybrid seeds. The company's corporate office is located in Mumbai. It has a chemical production unit at Silvassa, hybrid seeds processing and drying units at Hyderabad and breeding stations at Banglore and Hyderabad. During the previous year hybrid seeds processing and drying operations at Bellary and Eluru were shifted to Hyderabad.

(Rs in crore)

As at As at

31st March, 2012 31st March, 2011

2. CONTINGENT LIABILITIES IN RESPECT OF THE FOLLOWING MATTERS:

i) Income tax 56.61 28.21

ii) Sales tax 3.12 3.91

iii) Claims against the Company not acknowledged as debts 1.33 0.92 Note: In respect of items mentioned above, till matters are finally decided, the financial effect cannot be ascertained.

3. RELATED PARTY DISCLOSURE:

Names of related parties and description of relationship

A. Holding Company:

Holding Company- Monsanto Holdings Private Limited Ultimate Holding Company- Monsanto Company, USA

B. Fellow Subsidiaries:

P.T. Branita Sandhini, Monsanto Philippines INC, Monsanto Thailand Ltd, Bretco Holding (Mauritius) Ltd, Monsanto Singapore Pte Ltd, Monsanto Pakistan Agri-tec (Pvt) Ltd, PT Monagro Kimia, Monsanto AG Products LLC, Monsanto Ag Technology LLC, Monsanto Inter-America Co, Monsanto S.A.S, Monsanto Far East Ltd., Seminis Beijing Co. Ltd., Mahyco Monsanto Biotech (I) Ltd. Monsanto International SARL, Monsanto Hungaria KFT.

C. Key Managerial Personnel:

Mr. Amitabh Jaipuria, Managing Director

4. The dominant source and nature of the risks and returns of the agricultural chemistry and seeds activities of the company not being significantly different, the Company operates a single segment of activity, "Agricultural Inputs", within the same geography.

The Company is obligated under non-cancellable leases pertaining to vehicles and office equipment to pay the following amounts in future as given below:

5. The Company has continually maintained a position that its income from agricultural activities (which involves growing seeds in various states through local growers), is not taxable. This contention has been upheld by the Honorable Bombay High Court for the Assessment Years 1993-94 to 2001-02 and Assessment years 2003-04 to 2005-06 and by the Commissioner of Income - tax (Appeals) for Assessment Year 2002-03, 2006-07 and 2007-08.

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

6. The Company has accrued the liability for compensated absences based on the actuarial valuation as at the balance sheet date conducted by an independent actuary and provided for the actuarial liability at Rs. 6.29 crore (Previous Year Rs. 5.77 crore).

Note: Pursuant to the approval of the shareholders at the Annual General meeting held on 26th September, 2011, the Company allotted 8,631,174 equity shares of Rs. 10 each as fully paid bonus shares in the ratio of one equity share for each existing equity share held by equity shareholders as on the record date viz, 8th October, 2011. Consequently, Earnings Per Share (EPS) has been adjusted for previous year in the financial statements as required under AS-20 Earnings Per Share.

7. Monsanto Company USA (MC) has established the Monsanto Company Long Term Incentive Plan. As part of the plan, employees of Monsanto India Limited are provided with an opportunity to acquire shares of MC via stock option / equity-based awards. The eligible employees are granted the options which shall vest with the employees over a period of 3 years from the date of the grant and they can exercise the stock options after their vesting period through any of the following three methods viz.,

i) cashless sell;

ii) cashless hold and

iii) cash purchase. The employee can exercise the option within a stipulated period mentioned in the plan.

Monsanto India Limited measures compensation expense for stock options and equity- based awards (net of forfeitures) at their fair value determined using a Lattice binomial model on the date of grant and amortised over the vesting period. Accordingly an amount of Rs. 2.59 crore (Previous year Rs. 2.59 crore) has been debited to the statement of profit and loss for the year. This amount includes an amount of Rs. 0.04 crore (Previous Year Rs. 0.03 crore) incurred by the company towards employee stock option plan for the Managing Director.

During the year MC has granted to employees of the Company 15,354 (Previous Year 23,290) options / stock awards on various dates of which none are vested. However 3,270 (Previous Year 5,573) options / stock-awards were withdrawn on account of employee resignations, 1,184 (Previous Year Nil) options were exercised and 6,070 (Previous year 4,820) options (net) were transferred to other Companies during the year, resulting in an outstanding balance of 72,230 (Previous year 67,400) options/ stock-awards at the end of the year.

8. In the previous year, as a part of consolidation of manufacturing operations in Hyderabad to achieve operational savings, the Company shifted the seed processing and drying operations from Bellary and Eluru to Hyderabad and related assets were shown under "Assets held for sale" in the Balance Sheet. The said assets were valued at the lower of net book value and net realizable value in accordance with Accounting Standard 10 - Accounting for Fixed Assets. Accordingly, in the previous year, in case of the assets at Eluru, the net realizable value was lower by Rs. 12.17 crore based on a letter of intent issued by the Company to a prospective buyer and the loss was recognised in the statement of profit and loss. In the current year, the said assets at Eluru were sold at a gain of Rs. 0.26 crore, which is recognised in the statement of profit and loss. In respect the assets held for sale at Bellary, the management expects to realise value higher than the net book value of the assets. Accordingly, the assets at Bellary are carried at net book value.

9. COMPARATIVE FINANCIAL INFORMATION:

The Revised Schedule VI has become effective from 1st April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.


Mar 31, 2011

I. COMPANY BACKGROUND:

Monsanto India Limited (the `Company') was incorporated on 8th December, 1949. The Company is presently engaged in the business of pr oduction and sale of agricultur al inputs, namely, chemicals and hybrid seeds. The C ompany's corporate office is located in Mumbai. It has a chemical production unit at Silvassa, hybrid seeds processing and drying units at Hyderabad and breeding stations at Bangalore and Hyderabad. During the year hybrid seeds processing and drying operations at Bellary and Eluru were shifted to Hyderabad.

(Rs. in Lacs)

31st March, 2011 31st March, 2010

2. Contingent Liabilities in respect of the following matters:

i) Income-tax 2,820.79 2,165.27

ii) Sales tax 390.95 1,457.94

iii) Claims against the Company not acknowledged 91.58 59.77

as debts Note: In respect of items mentioned above, till matters are finally decided, the financial effect cannot be ascertained.

16. Related Party Disclosure:

Names of related parties and description of relationship

A. Holding Company:

Monsanto Holdings Private Limited (from 23rd November, 2010) (MHPL) Ultimate Holding Company- Monsanto Company, USA (MUSA)

B. Fellow Subsidiaries:

P . T . B r anita Sandhini, Monsanto Philippines INC , Monsanto Thailand L td, Bretco Holding (Mauritius) L td, Monsanto Singapore Pte Ltd, Monsanto Pakistan Agri-tec (Pvt) Ltd, Seminis Vegetable Seeds Inc., PT Monagro Kimia, Monsanto A G Products LLC, Monsanto A g Technology LLC, Monsanto Inter -America Co, Monsanto Chile S.A., Monsanto Holland B V, Monsanto F ar East L td., Monsanto K orea Inc, Seminis Beijin g Co. Ltd., Monsanto Holdings Private Limited (till 22nd November, 2010)

20. The Company has continually maintained a position that its income from agricultural activities (which inv olves growing seeds in v arious states thr ough local gr owers), is not tax able. This contention has also been upheld by the Honorable Income-tax Appellate T ribunal, Mumbai for Assessment Years 1993-94 through 2001-02 and Assessment years 2003-04 and 2004-05. This position is also followed by CIT (Appeals) fo r Assessment Year 2002- 03 and 2006-07.

23. Operation, Administration and Other Expenses in Schedule 13 includes xepenses after reduction of reimbursements amounting to Rs. 955.40 Lacs (Previous year Rs. 2,923.46 Lacs) by Holding Co. and Fellow Subsidiaries towards the value of costs apportioned of the Company's employees and facilities in accordance with the agr eements on allocation of expenses with the companies.

3. The Company has accrued the liabilit y for compensated absences based on the actuarial v aluation as at the balance sheet date conducted by an independent actuary and provided for the actuarial liability at Rs. 577.19 Lacs (Previous Year Rs. 551.24 Lacs)

4. Monsanto Company, USA (MC) has established the Monsanto Company Long Term Incentive Plan. As a part of the plan, employees of Monsanto India Limited ar e provided with an oppor tunity to acquire shares of MC via stock option/equity-based awards. The eligible employees are granted the options which shall vest with the employees over a period of 3 y ears from the date of the gr ant and they can e xercise the stock options af ter their vesting period through any of the following three methods viz., i) cashless sell; ii) cashless hold and iii) cash purchase. The employee can exercise the option within a stipulated period mentioned in the plan.

Monsanto India Limited measur es compensation e xpense for stock options and equit y- based awards (net of forfeitures) at their fair value determined using a Lattice binomial model on the date of grant and amortized over the vesting period. Accordingly, an amount of Rs. 259.33 Lacs (previous year Rs. 152.53 Lacs) has been debited to the profit and loss account for the year. This amount includes an amount of Rs. 2.83 Lacs (Previous Year Rs. 2.59 Lacs) incurred by the Company towards employee stock option plan for the Managing Director.

During the y ear MC has gr anted to emplo yees of the C ompany 23,290 (Previous Year 23,450) options/stock awards on various dates of which none ar e vested. However 5,573 (Previous Year 11,210) options/stock-awards were withdrawn on account of employee resignations and 4,820 options were transferred from (Previous Year 713 options were transferred to) other group companies on employees being transferred resulting in an outstanding balance of 67,400 (Previous year 54,503) options/stock-awards at the end of the year.

5. As a part of consolidation of manufacturing operations in Hyderabad to achieve operational savings, the Company decided to shift the seed processing and drying operations from Bellary and Eluru to Hyder abad and hence the related fixed assets are shown under `Assets held for sale' in the Balance Sheet. The said assets are valued at the lower of net book value and net realizable value in accordance with Accounting Standard 10 - Accounting for Fixed Assets. Accordingly, in the case of the assets at Eluru, the net r ealizable value is lower by Rs. 1,217.00 Lacs based on a letter of intent issued by the Company to the prospective buyer and the loss has been recognized in the Profit and Loss Account and shown under Schedule 13 - Oper ation, Administration and Other e xpenses. In respect of fixed assets at Bellary, the management expects to obtain net realizable value higher than the net book value of the assets. Accordingly, the fixed assets at Bellary are carried at net book value.

6. Comparative financial information:

Comparative financial information (i.e. the amounts and other disclosures for the preceding year presented above), is included as an integral part of the current year's financial statements and is to be read in relation to the amounts and other disclosures relating to the current year. Figures of the previous year have been regrouped/reclassified wherever necessary to correspond to figures of the current year.

 
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