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Accounting Policies of Monsanto India Ltd. Company

Mar 31, 2019

1. Significant accounting policies:

1.1 Basis of preparation of financial statements:

A. Statement of compliance:

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards ("Ind ASs") notified under section 133 of the Companies Act, 2013 ("the Act") [ Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.

Accounting policies have been consistently applied to all the years presented except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

B. Basis of measurement:

The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.

All assets and liabilities have been classified as current or non-current as per the Company''s operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of services and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for current and noncurrent classification of assets and liabilities.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is calculated as per Ind AS 113 being the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company considers the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 or value in use in Ind AS 36.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

- Level 3 inputs are unobservable inputs for the asset or liability.

All amounts disclosed in the financial statements and notes have been rounded off to the nearest crores as per the requirements of Schedule III, unless otherwise stated.

C. Use of estimates:

The preparation of financial statements in conformity with Ind AS requires the Management to make estimate and assumptions that affect the reported amount of assets and liabilities as at the Balance Sheet date, reported amount of revenue and expenses for the year and disclosures of contingent liabilities as at the Balance Sheet date. The estimates and assumptions used in the accompanying financial statements are based upon the Management''s evaluation of the relevant facts and circumstances as at the date of the financial statements. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates, if any, are recognized in the year in which the estimates are revised and in any future years affected. Refer Note 3 for detailed discussion on estimates and judgments.

D. Property, plant and equipment and depreciation

Property, plant and equipment held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at historical cost less accumulated depreciation and accumulated impairment losses, if any. Freehold land is carried at historical cost and is not depreciated.

Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to statement of profit and loss during the year in which they are incurred.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non-current assets and the cost of assets not put to use before such date are disclosed under ''Capital work-in-progress''.

Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

* Based on technical evaluation, management believes that the useful lives of Dryers should be 20 years as that best represents the period over which the management expects to use the assets.

Hence the useful lives for these assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act, 2013.

# Buildings and Plant and Equipments include associated electrical installations. Plant and Equipments also include laboratory equipments. These assets (electrical installations and laboratory equipments) are being depreciated as per useful life defined in Part C of Schedule II of the Companies Act, 2013.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

E. Intangible assets and amortisation

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.

F. Non-current assets held for sale

The Company classifies assets as held for sale if their carrying amounts will be recovered principally through a sale rather than through continuing use of the assets and actions required to complete such sale indicate that it is unlikely that significant changes to the plan to sell will be made or that the decision to sale will be withdrawn. Also, such assets are classified as held for sale only if the management expects to complete the sale within one year from the date of classification.

Assets classified as held for sale are measured at the lower of carrying amount and the fair value less cost to sell. Such assets are not depreciated or amortised.

G. Impairment

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

H. Foreign currency transactions:

i. Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (''the functional currency''). The financial statements are presented in Indian rupee (INR), which is the Company''s functional and presentation currency.

ii. Transactions and balances:

On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction. Gains/Losses arising out of fluctuation in foreign exchange rate between the transaction date and settlement date are recognised in the Statement of Profit and Loss.

All monetary assets and liabilities in foreign currencies are restated at the year end at the exchange rate prevailing at the year end and the exchange differences are recognised in the Statement of Profit and Loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

I. Inventories:

Inventories are measured at the lower of their cost and net realizable value after providing for obsolescence and other losses.

Inventory includes an asset recognized for right to recover products from customers with respect to sales with a right of return.

Costs of inventories comprise all costs of purchase - net of Goods and Services Tax and other costs incurred in bringing the inventory to their present location and condition.

Cost of raw materials, packing materials and finished goods (traded goods) are determined on weighted average cost basis.

Cost of work in progress and finished goods (manufactured) inventories is determined on the weighted average basis and comprises direct material, cost of conversion and other costs incurred in bringing these inventories to their present location and condition.

Provision for inventory obsolescence is considered on the basis of management estimate.

Net realizable value is the estimated selling price in the ordinary course of business less the estimate cost of completion and the estimated costs necessary to make the sale.

J. Biological assets:

The biological assets of the Company represent the unharvested / standing crops of Corn as on the reporting date.

I nd AS 41, Agriculture, requires that biological assets shall be recognized at its fair value less point of sale costs, except when there is inability to measure fair value reliably.

There are neither observable market prices for these Biological assets nor are there alternative estimates of fair value that are determined to be clearly reliable that give a fair expression of the fair values. Hence, the standing crops of corn are measured at initial recognition and at each financial reporting date at cost. This comprises any cost attributable in bringing Biological assets to its location and condition intended by the management.

K. Research and development expenditure:

Expenditure on research is recognised as and when it is incurred. Expenditure on development which does not meet the criteria for recognition as an intangible asset is recognised as an expense when it is incurred.

Items of property, plant and equipment for research and development are capitalized and depreciated in accordance with the policies stated for property, plant and equipment.

L. Financial instruments:

Financial assets and financial liabilities are recognised when a Company becomes a party to the contractual provisions of the instruments.

1. Initial recognition:

Financial assets

At initial recognition, financial asset is measured at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss and at amortized cost, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of payables, net of directly attributable transaction costs.

2. Financial assets

2.1 Classification and subsequent measurement of financial assets:

Classification of financial assets:

The Company classifies its financial assets in the following measurement categories:

- those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and

- those measured at amortised cost.

The classification is done depending upon the Company''s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income, as elected.

3. Subsequent measurement

3.1 Amortised cost:

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method (EIR).

3.2 Fair value through other comprehensive income (FVOCI):

Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in Statement of Profit and Loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to Statement of Profit and Loss and recognized in other gains/ (losses). Interest income from these financial assets is included in other income using the effective interest rate method.

3.3 Fair value through profit or loss (FVTPL):

Assets that do not meet the criteria for amortised cost or fair value through OCI, are measured at fair value through profit or loss e.g. investments in mutual funds. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss is recognised in profit or loss and presented net in the Statement of Profit and Loss within other gains/ (losses) in the period in which it arises.

i. Impairment of financial assets:

In accordance with Ind AS 109, Financial Instruments, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on financial assets that are measured at amortized cost and FVOCI.

The Company measures the loss allowance at an amount equal to lifetime expected credit losses. For the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used a practical expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.

ECL impairment loss allowance (or reversal) recognized during the year is recognized as income/expense in the statement of profit and loss. In balance sheet, ECL for financial assets measured at amortized cost is presented as an allowance, i.e. as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write off criteria, the Company does not reduce impairment allowance from the gross carrying amount.

ii. Derecognition financial assets:

A financial asset is derecognised only when Company has transferred the rights to receive cash flows from the financial asset. Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised.

On derecognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset.

iii. Foreign exchange gains and losses :

The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period.

For foreign currency, denominated financial assets measured at amortised cost and FVTPL, the exchange differences are recognised in profit or loss except for those which are designated as hedging instruments in a hedging relationship.

iv. Income recognition

Interest income

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.

Dividends

Dividends on all equity instruments whether measured at FVTOCI or FVTPL, are recognised in the Statement of Profit and Loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

M. Impairment of non-financial assets

The Company assesses at each year end whether there is any objective evidence that a non-financial asset or a group of non-financial assets is impaired. If any such indication exists, the Company estimates the asset''s recoverable amount and the amount of impairment loss.

An impairment loss is calculated as the difference between an asset''s carrying amount and recoverable amount. Losses are recognized in Statement of Profit and Loss and reflected in an allowance account. When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off.

N. Cash and cash equivalent

Cash and cash equivalent in the balance sheet comprise cash at banks, cash on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purposes of the cash flow statement, cash and cash equivalents include cash on hand, cash in banks and shortterm deposits.

O. Revenue recognition:

With effect from 1st April, 2018 on adoption of Ind-AS 115:

Revenue from sales of goods is measured based on the consideration received or receivable from the customer. The Company recognizes revenue when it transfers control of goods to the customer. Control is passed on to the customer when goods are dispatched from Company''s premises. Revenue is reported net of taxes and duties as applicable.

Appropriate provisions are recorded for returns and discounts/incentives which are estimated on the basis of historical experience, market assessment and various discount programs launched in the market. It is unlikely that the factors other than these could materially affect revenue deductions of the Company. A refund liability (included in other current liabilities) is recognized for expected returns and discounts/incentives, payable to customers in relation to sales made until the end of the reporting period.

Receivable is recognized when the goods are dispatched from Company''s premises as this is the point in time that the consideration is unconditional because only passage of time is required before the payment is due.

Royalty arrangements that are based on production, sales and other measures are recognised by reference to the underlying arrangement.

Revenue in respect of interest income is recognised on a basis of effective interest method as set out in Ind AS 109, Financial Instruments, and where no significant uncertainty as to measurability or collectability exists.

For the comparative year:

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates, discounts, other similar allowances and goods and service tax (GST), as applicable.

Revenue is recognized when it is earned, it can be measured reliably and no significant uncertainty exists as to its realization or collection.

Revenue on sale of products is recognized on delivery or dispatch of the products, when all significant contractual obligations have been satisfied, the property in the goods is transferred for a price, significant risks and rewards of ownership have been transferred and no effective ownership control is retained.

Royalty arrangements that are based on production, sales and other measures are recognised by reference to the underlying arrangement.

Revenue in respect of interest income is recognised on a basis of effective interest method as set out in Ind AS 109, Financial Instruments, and where no significant uncertainty as to measurability or collectability exists.

P. Employee benefits:

Contributions to provident fund, a defined contribution scheme are made as required by the statute and expensed to the statement of profit and loss.

Contributions to superannuation fund, a defined contribution scheme managed by a life insurance company are expensed to the statement of profit and loss.

The Company participates in a group gratuity cum life insurance scheme administered by a life insurance company. Being a defined benefit plan, annual contributions made to the scheme are as per the intimations received from the life insurance company. The Company accounts for liability for future gratuity benefits based on an actuarial valuation by an independent actuary. The net present value of the Company''s obligation is determined based on the projected unit credit method as at the Balance Sheet date. Shortfall if any, between the balance in the fund with life insurance company and the actuarial valuation is expensed to the statement of profit and loss. The actuarial gains and losses are recognized in Other Comprehensive Income which gets reflected immediately in retained earnings and is not reclassified to the statement of profit and loss.

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by an employee is recognized during the period when the employee renders the service.

The liability for compensated absences is another long-term benefit and is wholly unfunded. The liability for number of days of unutilized leave at each Balance Sheet date is provided for based on an independent actuarial valuation. The actuarial gains and losses are recognized immediately in the statement of profit and loss.

O. Share based payment transactions:

- Till announcement of merger deal between Monsanto Company and Bayer AG

The Company has not provided any equity-based compensation to its employees. However, the immediate holding Company, Monsanto Company, USA ("the grantor"/"parent company") had a Monsanto Company Long Term Incentive Plan (ESOP scheme) in which eligible employees of the Company participated. Eligible employees were granted stock options (SO''s) and restricted share units (RSU''s), which were to vest over a period of 3 years from the date of the grant, as per original terms and conditions of the scheme.

As per terms and conditions of the scheme, SO and RSU issued by the intermediate holding company were accounted for as equity settled as the Company had no obligation to settle the shared-based payment transaction and the shares granted were of the intermediate holding company. Company recognised the expense over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied, based on the fair value of the SO/ RSU, as determined on the grant date. At the end of each period, the Company revised its estimates of the number of options that were expected to vest based on the non-market vesting and service conditions, Company recognised the impact of the revision to original estimates, if any, in the Statement of profit and loss, with a corresponding adjustment to Other equity.

- Post announcement of merger deal between Monsanto Company and Bayer AG

Pursuant to the global merger scheme announced between Monsanto and Bayer on 7th June, 2018 (merger deal closure date), the ESOP scheme has been discontinued. All outstanding stock options and RSU''s granted on or before 16th September, 2016 vested automatically based on stock price on merger deal closure date and differential between vesting price and fair value of the SO''s/RSU''s on the grant date has been recognised through other equity. Restricted share units granted or after 16th September, 2016 were converted into cash incentive awards based at stock price on merger deal closure date without any change in vesting conditions.

At the end of each reporting period, the entity recognises expense towards cash incentive award based on the vesting schedule with a corresponding adjustment to liability towards employees based on the agreed vesting price as of merger deal closure date.

R. Leases:

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. The Company has only operating leases.

Company as Lessor:

Rental income from operating leases is generally recognised on a straight-line basis over the term of the relevant lease. Where the rentals are solely to increase in line with expected general inflation to compensate for the Company''s expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue.

Company as Lessee:

Rental expense from operating leases is generally recognised on a straight-line basis over the term of the relevant lease. Where the rentals are solely to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue.

S. Provisions, contingent liabilities and contingent assets:

Provisions involving a substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

A restructuring provision is recognised when the Company has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.

Contingent liabilities are not recognized but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

T. Taxation:

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current. Tax:

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax:

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income, in which case, the current and deferred tax are also recognised in other comprehensive income.

U. Earnings per share:

The Company Reports Earnings Per Share (EPS) in accordance with Ind AS 33 on Earnings Per Share. Basic EPS is computed by dividing the net profit after tax for the year by the weighted average number of equity shares outstanding during the year.

V. Cash flow statement:

The Cash flow statement is prepared by the indirect method set out in Ind AS 7 on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consists of cash on hand, balances with banks in current accounts and demand deposits with banks with original maturity less than 3 months.

W. Segment reporting:

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating segments of the Company.

3. Critical accounting judgements and key sources of estimation uncertainty:

In the application of the Company''s accounting policies, which are described in note 2, the management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

3.1 Useful lives of property, plant and equipment and intangible assets

The Management reviews the estimated useful lives and residual value of Property, plant and equipment at the end of each reporting period. The factors such as changes in the expected level of usage, number of shifts of production, technological developments and product life-cycle, could significantly impact the economic useful lives and the residual values of these assets. Consequently, the future depreciation charge could be revised and thereby could have an impact on the profit of the future years.

3.2 Impairment of property, plant and equipment and intangible assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset''s recoverable amount. An asset''s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset''s value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset.

3.3 Agriculture activity / Biological asset

The biological assets of the Company represent the unharvested / standing crops of Corn as on the reporting date.

Ind AS 41, Agriculture, requires that biological assets shall be recognized at its fair value less point of sale costs, except when there is inability to measure fair value reliably.

There are neither observable market prices for these Biological assets nor are there alternative estimates of fair value that are determined to be clearly reliable that give a fair expression of the fair values. Hence, the standing crops of corn are measured at initial recognition and at each financial reporting date at cost. This comprises any cost attributable in bringing Biological assets to its location and condition intended by the management.

3.4 Discount/incentives and sales return

Revenue is recognized in accordance with Ind AS 115, net of actual and estimated discount/incentive to and sales returns from customers. The estimates are on the basis of historical experience, market assessment and various discount programs launched in the market.

3.5 Inventory obsolescence

Provision for inventory obsolescence is based on the management''s review considering historical trend and market conditions.

3.6 Deferred income tax assets and liabilities

Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits. The amount of total deferred tax assets could change if estimates of projected future taxable income or if tax regulations undergo a change.

3.7 Employee benefits obligation

Employee benefit obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its longterm nature, employee benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

3.8 Contingent liabilities

From time to time, the Company is subject to legal proceedings, the ultimate outcome of each being always subject to many uncertainties inherent in litigation. A provision for litigation is made when it is considered probable that a payment will be made and the amount of the loss can be reasonably estimated. Significant judgement is made when evaluating, among other factors, the probability of unfavorable outcome and the ability to make a reasonable estimate of the amount of potential loss. Litigation provisions are reviewed at each accounting period and revisions made for the changes in facts and circumstances.

4. Standards issued but not yet effective:

The standards and interpretations that are issued, but not yet effective up to the date of issuance of the financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

(a) Ind AS 116- Leases

On 30th March, 2019, Ministry of Corporate Affairs ("MCA") has notified the Ind AS 116, Leases. This Standard sets out the principles for the recognition, measurement, presentation and disclosure of leases. The objective of the standard is to ensure that lessees and lessors provide relevant information in a manner that faithfully represents those transactions. The effective date for adoption of Ind AS 116 is financial periods beginning on or after 1st April, 2019. The Company is currently evaluating the requirements of amendments. The Company believes that the adoption of this amendment will not have a material effect on its financial statements.


Mar 31, 2018

A. Basis of preparation of financial statements:

The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is calculated as per Ind AS 113 being the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company considers the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 or value in use in Ind AS 36.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

- Level 3 inputs are unobservable inputs for the asset or liability.

B. Non-current assets held for sale:

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use as per Ind AS 105. This condition is regarded as met only when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such asset (or disposal group) and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.

C. Property, Plant and Equipment and Depreciation

Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses. Freehold land is not depreciated.

Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. Cost includes all costs incurred to bring the assets to their present location and condition. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

Fixtures and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

The estimated useful lives of the assets are as follows:

* Based on technical evaluation, management believes that the useful lives of Dryers should be 20 years as that best represents the period over which the management expects to use the assets. Hence the useful lives for these assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act, 2013.

# Buildings and Plant and Equipments include associated electrical installations. Plant and Equipments also include laboratory equipments. These assets (electrical installations and laboratory equipments) are being depreciated as per useful life defined in Part C of Schedule II of the Companies Act, 2013.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

D. Intangible assets and amortisation

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.

The estimated useful lives of the assets are as follows:

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.

E. Non-current assets held for sale

The Company classifies assets as held for sale if their carrying amounts will be recovered principally through a sale rather than through continuing use of the assets and actions required to complete such sale indicate that it is unlikely that significant changes to the plan to sell will be made or that the decision to sale will be withdrawn. Also, such assets are classified as held for sale only if the management expects to complete the sale within one year from the date of classification.

Assets classified as held for sale are measured at the lower of carrying amount and the fair value less cost to sell. Such assets are not depreciated or amortised.

F. Impairment

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

G. Inventories:

Inventories are measured at the lower of their cost and net realizable value after providing for obsolescence and other losses.

Costs of inventories comprise all costs of purchase -net of Goods and Services Tax and other costs incurred in bringing the inventory to their present location and condition.

Cost of Raw Materials, Packing Materials and finished goods (traded goods) are determined on weighted average cost basis.

Cost of Work in Progress and Finished Goods (manufactured) inventories are determined by the absorption costing method.

H. Biological assets:

The biological assets of the Company represent the unharvested / standing crops of Corn as on the reporting date.

Ind AS 41, Agriculture, requires that biological assets shall be recognized at its fair value less point of sale costs, except when there is inability to measure fair value reliably.

There are neither observable market prices for these Biological assets nor are there alternative estimates of fair value that are determined to be clearly reliable that give a fair expression of the fair values. Hence, the standing crops of corn are measured at initial recognition and at each financial reporting date at cost. This comprises any cost attributable in bringing Biological assets to its location and condition intended by the management.

I. Research and development expenditure

Expenditure on research is recognised as and when it is incurred. Expenditure on development which does not meet the criteria for recognition as an intangible asset is recognised as an expense when it is incurred.

Items of property. plant and equipment for research and development are capitalized and depreciated in accordance with the policies stated for property. plant and equipment.

J. Financial instruments:

Financial assets and financial liabilities are recognised when a Company becomes a party to the contractual provisions of the instruments.

1. Initial Recognition:

Financial assets

At initial recognition, financial asset is measured at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss and at amortized cost, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of payables, net of directly attributable transaction costs.

2. Financial assets

2.1 Classification and subsequent measurement of financial assets:

Classification of financial assets:

The Company classifies its financial assets in the following measurement categories:

- those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and

- those measured at amortised cost.

The classification is done depending upon the Company’s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income, as elected.

3. Subsequent measurement

3.1 Amortised cost:

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method (EIR).

3.2 Fair value through other comprehensive income (FVOCI):

Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in Statement of Profit and Loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to Statement of Profit and Loss and recognized in other gains/ (losses). Interest income from these financial assets is included in other income using the effective interest rate method.

3.3 Fair value through profit or loss (FVTPL):

Assets that do not meet the criteria for amortised cost or fair value through OCI, are measured at fair value through profit or loss e.g. investments in mutual funds. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss is recognised in profit or loss and presented net in the Statement of Profit and Loss within other gains/(losses) in the period in which it arises.

i. Impairment of financial assets:

I n accordance with Ind AS 109, Financial Instruments, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on financial assets that are measured at amortized cost and FVOCI.

The Company measures the loss allowance at an amount equal to lifetime expected credit losses. For the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used a practical expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.

ECL impairment loss allowance (or reversal) recognized during the year is recognized as income/expense in the statement of profit and loss. In balance sheet, ECL for financial assets measured at amortized cost is presented as an allowance, i.e. as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write off criteria, the Company does not reduce impairment allowance from the gross carrying amount.

ii. Derecognition financial assets:

A financial asset is derecognised only when Company has transferred the rights to receive cash flows from the financial asset. Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised.

On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset.

iii. Foreign exchange gains and losses :

The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period.

For foreign currency, denominated financial assets measured at amortised cost and FVTPL, the exchange differences are recognised in profit or loss except for those which are designated as hedging instruments in a hedging relationship.

iv. Income recognition

9.1 Interest income

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

9.2 Dividends

Dividends on all equity instruments whether measured at FVTOCI or FVTPL, are recognised in the Statement of Profit and Loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

K. Impairment of non-financial assets

The Company assesses at each year end whether there is any objective evidence that a non-financial asset or a group of non-financial assets is impaired. If any such indication exists, the Company estimates the asset’s recoverable amount and the amount of impairment loss.

An impairment loss is calculated as the difference between an asset’s carrying amount and recoverable amount. Losses are recognized in Statement of Profit and Loss and reflected in an allowance account. When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off.

L. Cash and cash equivalent

Cash and cash equivalent in the balance sheet comprise cash at banks, cash on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purposes of the cash flow statement, cash and cash equivalents include cash on hand, cash in banks and short-term deposits.

M. Revenue recognition:

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates, discounts, other similar allowances and goods and service tax (GST), as applicable.

Revenue is recognized when it is earned, it can be measured reliably and no significant uncertainty exists as to its realization or collection.

Revenue on sale of products is recognized on delivery or dispatch of the products, when all significant contractual obligations have been satisfied, the property in the goods is transferred for a price, significant risks and rewards of ownership have been transferred and no effective ownership control is retained.

Royalty arrangements that are based on production, sales and other measures are recognised by reference to the underlying arrangement.

Revenue in respect of interest income is recognised on a basis of effective interest method as set out in Ind AS 109, Financial Instruments, and where no significant uncertainty as to measurability or collectability exists.

N. Foreign currency transactions:

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements are presented in Indian currency (INR) which is the Company’s functional and presentation currency.

Transactions in foreign currency (i.e. transaction in a currency other than the Company’s functional currency) are recorded at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction. Exchange differences arising on settlement of revenue transactions are recognized in the statement of profit and loss.

Monetary items denominated in foreign currency are restated using the exchange rates prevailing at the date of the balance sheet. Gains / losses arising on restatement and on settlement of such assets and liabilities are recognized in the statement of profit and loss.

O. Employee benefits:

Contributions to provident fund, a defined contribution scheme are made as required by the statute and expensed to the statement of profit and loss.

Contributions to superannuation fund, a defined contribution scheme managed by a life insurance company are expensed to the statement of profit and loss.

The Company participates in a group gratuity cum life insurance scheme administered by a life insurance company. Being a defined benefit plan, annual contributions made to the scheme are as per the intimations received from the life insurance company. The Company accounts for liability for future gratuity benefits based on an actuarial valuation by an independent actuary. The net present value of the Company’s obligation is determined based on the projected unit credit method as at the Balance Sheet date. Shortfall if any, between the balance in the fund with life insurance company and the actuarial valuation is expensed to the statement of profit and loss. The actuarial gains and losses are recognized in Other Comprehensive Income which gets reflected immediately in retained earnings and is not reclassified to the statement of profit and loss.

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by an employee is recognized during the period when the employee renders the service.

The liability for compensated absences is another longterm benefit and is wholly unfunded. The liability for number of days of unutilized leave at each Balance Sheet date is provided for based on an independent actuarial valuation. The actuarial gains and losses are recognized immediately in the statement of profit and loss.

P. Share based payment transactions:

The Company does not provide any equity-based compensation to its employees. However, the parent Company, Monsanto Company, USA (“the grantor” / “parent company”) has established the Monsanto Company Long Term Incentive Plan in which eligible employees of the Company participate. Eligible employees are granted stock options (SO’s) and restricted share units (RSU’s), which vest over a period of 3 years from the date of the grant.

Employee Stock Options (SOs’) and restricted share units (RSUs) issued by the parent company are accounted for as equity-settled as the Company has no obligation to settle the share-based payment transaction and the shares granted are of parent Company. Company recognises the expense over the vesting period, which is the period over which all the specified vesting conditions are to be satisfied, based on the fair value of the SO’s/RSUs as determined on the grant date. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in the Statement of Profit and Loss, with a corresponding adjustment to other equity.

In case where there is a recharge from the parent company, the Company will account for the same as an adjustment to other equity.

Q. Leases:

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. The Company has only operating leases.

Company as Lessor:

Rental income from operating leases is generally recognised on a straight-line basis over the term of the relevant lease. Where the rentals are solely to increase in line with expected general inflation to compensate for the Company’s expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue.

Company as Lessee:

Rental expense from operating leases is generally recognised on a straight-line basis over the term of the relevant lease. Where the rentals are solely to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue.

R. Provisions, contingent liabilities and contingent assets:

Provisions involving a substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

A restructuring provision is recognised when the Company has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.

Contingent liabilities are not recognized but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

S. Taxation:

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current. Tax:

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company’s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred Tax:

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income, in which case, the current and deferred tax are also recognised in other comprehensive income.

T. Earnings per share:

The Company Reports Earnings Per Share (EPS) in accordance with Ind AS 33 on Earnings Per Share. Basic EPS is computed by dividing the net profit after tax for the year by the weighted average number of equity shares outstanding during the year.

U. Cash flow statement:

The Cash Flow Statement is prepared by the indirect method set out in Ind AS 7 on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consists of cash on hand, balances with banks in current accounts and demand deposits with banks with original maturity less than 3 months.

V. Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating segments of the Company.


Mar 31, 2017

1. Company Background:

Monsanto India Limited (the ''Company'') was incorporated on 8th December 1949. The Company is 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. Significant Accounting Policies:

(A) Basis of preparation of financial statements:

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 (the Act), and the relevant provisions of the Act, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention.

(B) Use of estimates:

The preparation of the financial statements in conformity with Indian GAAP requires Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported amounts of income and expenditure during the year. Actual results could differ from these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

(C) Tangible Fixed Assets (Property, Plant and Equipment) and Depreciation :

Tangible Fixed Assets are carried at their historical cost of acquisition or construction less accumulated depreciation/amortization and impairment losses, if any. Cost includes all costs incurred to bring the assets to their present location and condition.

Depreciation on tangible fixed assets has been provided, prorata for the period of use, by the Straight Line Method. Assets (other than dryers) are depreciated over the useful lives specified in Schedule II to the Companies Act 2013. Dryers are depreciated over 20 years in accordance with technical evaluation made by the Company.

(D) Intangible Fixed Assets and Amortization :

Intangible Fixed Assets are valued at cost less accumulated amortization. Cost includes all costs incurred to bring the assets to their present location and condition.

(E) Impairment:

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at balance sheet date there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the asset''s net selling price and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Statement of Profit and Loss.

(F) Asset held for disposal:

Fixed assets that have been retired from active use and held for disposal are stated at the lower of their book value and net realizable value. The net realizable value is reckoned with reference to individual items of fixed assets or a disposal group, as relevant.

(G) Investments:

Current investments are stated at the lower of cost and fair value.

(H) Inventories:

Inventories are measured at the lower of cost and net realizable value, after providing for obsolescence.

Costs of inventories comprise all costs of purchase

- net of CENVAT, costs of inputs for standing crops, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Cost of raw materials, packing materials and finished goods (traded goods) are determined on weighted average cost basis. Cost of Work in Progress and Finished Goods (manufactured) are determined by the absorption costing method.

(I) Revenue Recognition:

(i) Revenue is recognized when it is earned and no significant uncertainty exists as to its realization or collection. Revenue on sale of products is recognized when all significant contractual obligations have been satisfied, the property in the goods is transferred for a price, significant risks and rewards of ownership have been transferred and no effective ownership control is retained.

Sales are stated inclusive of excise duty and net of sales tax and value added tax.

(ii) Royalty is recognized in accordance with contractual obligations.

(iii) Interest income is recognized on time proportion basis.

(J) Foreign Currency Transactions:

Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction. Monetary items denominated in foreign currency are restated using the exchange rates prevailing at the date of the balance sheet. Exchange differences arising on settlement or restatement are recognized in the Statement of Profit and Loss.

(K) Employee Benefits:

(i) Contributions to provident fund, a defined contribution scheme are made as required by the statute and expensed to the Statement of Profit and Loss.

(ii) Contributions to superannuation fund, a defined contribution scheme managed by a life insurance company are expensed to the Statement of Profit and Loss.

(iii) The Company participates in a group gratuity cum life insurance scheme administered by a life insurance company. Being a defined benefit plan, annual contributions made to the scheme are as per the intimations received from the life insurance company. The Company accounts for liability for future gratuity benefits based on an actuarial valuation by an independent actuary. The net present value of the Company''s obligation is determined based on the projected unit credit method as at the balance sheet date. Shortfall if any, between the balance in the fund with the life insurance company and the actuarial valuation is expensed to the Statement of Profit and Loss.

(iv) The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by an employee is recognized during the period when the employee renders the service.

(v) The liability for compensated absences, a long term benefit is wholly unfunded. The liability for number of days of unutilized leave at each balance sheet date is provided for based on an independent actuarial valuation.

(vi) Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss.

(L) Earnings per Share:

The Company reports Earnings per Share (EPS) in accordance with Accounting Standard- 20 on Earnings per Share. Basic EPS is computed by dividing the net profit for the year by the weighted average number of equity shares outstanding during the year.

(M) Taxation:

Income tax is accounted for in accordance with Accounting Standard- 22 on Accounting for Taxes on Income. Taxes comprise both current and deferred tax.

Current tax is measured at the amount expected to be paid to the taxation authorities, using the applicable tax rates and tax laws.

The tax effect of timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using the substantively enacted tax rates and tax laws. The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably or virtually certain, as relevant, that sufficient future taxable income will be available against which the deferred tax asset can be realized.

(N) Operating Lease:

Operating lease payments are recognized as expenditure in the Statement of Profit and Loss on a straight-line basis.

(O) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

(P) Cash Flow Statement:

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard - 3 on Cash Flow Statements and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the Cash Flow Statement consist of cash on hand and balances in current accounts and demand deposits with banks.


Mar 31, 2014

(A) Basis of preparation of financial statements:

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 (Accounting Standards) Rules, 2006 (as amended) ("the 1956 Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 ("the 2013 Act") in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the 1956 Act/ 2013 Companies Act, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

(B) use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and differences between actual results and estimates are recognized in the periods in which the results are known / materialize.

(C) Tangible Fixed Assets and Depreciation

Fixed Assets are valued at their historical cost of acquisition or construction less accumulated depreciation. Cost includes all costs incurred to bring the assets to their present location and condition.

Depreciation on Tangible Fixed Assets is provided for on straight line basis in accordance with Section 205 (2) (b) of the Companies Act, 1956 (the Act) as follows:

(i) On fixed assets (except as stated below), at the rates specified in Schedule XIV to the Act.

(ii) Field vehicles are depreciated at the rate of 20%.

(iii) Plant and Machinery other than dryer is depreciated at the rate of 10%. Dryer is depreciated at the rate of 5%.

(iv) Mobile phones have been depreciated at the rate of 33.33%

(v) Leasehold improvements are amortised over the unexpired primary period of lease.

(vi) Factory Buildings are depreciated at the rate of 5%.

(vii) Computers are depreciated at the rate of 25%.

(D) Intangible Assets and Amortisation

Intangible Assets are valued at their cost less accumulated amortisation. Cost includes all costs incurred to bring the assets to their present location and condition.

(E) Impairment

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at balance sheet date there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the asset''s net selling price and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the statement of profit and loss.

(F) Investments:

Current investments are stated at the lower of cost and fair value.

(G) Inventories:

Inventories are measured at the lower of cost and net realizable value, after providing for obsolescence. Costs of inventories comprise all costs of purchase – net of CENVAT, costs of inputs for standing crops, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Cost of Raw Materials, Packing Materials and finished goods (Traded Goods) are determined on weighted average cost basis. Cost of Work in Progress and Finished Goods (manufactured) are determined by the absorption costing method.

(H) Revenue Recognition:

(i) Revenue is recognized when it is earned and no significant uncertainty exists as to its realization or collection. Revenue on sale of products is recognised on delivery of the products, when all significant contractual obligations have been satisfied, the property in the goods is transferred for a price, significant risks and rewards of ownership have been transferred and no effective ownership control is retained.

Sales are stated inclusive of excise duty and net of returns, trade discounts and sales tax recovered. The amount of excise duty that is included in the amount of turnover (gross) is presented as a reduction from gross.

(ii) Interest income is recognized on a time proportion basis.

(I) Foreign Currency Transactions:

Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction. Monetary items denominated in foreign currency are restated using the exchange rates prevailing at the date of the balance sheet. Exchange differences arising on settlement or restatement are recognized in the statement of profit and loss.

(J) Employee Benefits:

(i) Provident fund is a defined contribution scheme and the contributions as required by the statute made to Government Provident Fund are charged to the statement of profit and loss.

(ii) Superannuation fund is a defined contribution scheme. The Company contributes a sum equivalent to 15% of eligible employees salary to Superannuation Fund administered by Trustees and managed by a life insurance Company. The Company recognizes such contribution as an expense when incurred.

(iii) The Company participates in a group gratuity cum life insurance scheme administered by the Birla Sun Life Insurance Company Ltd. Being a defined benefit plan, annual contributions made to the scheme are as per the intimations received from the Birla Sun Life Insurance Company Ltd. The Company accounts for liability for future gratuity benefits based

on an actuarial valuation conducted by an independent actuary. The net present value of the Company''s obligation is determined based on the projected unit credit method as at the Balance Sheet date. Additionally shortfall if any, between the balance in the fund with Tata AIG Life Insurance Company Ltd. and actuarial valuation obtained from an independent actuary is charged to the statement of profit and loss.

(iv) The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by an employee is recognized during the period when the employee renders the service.

(v) The liability for compensated absences is another long term benefit and is wholly unfunded. The liability for number of days of unutilized leave at each Balance Sheet date is provided for based on an independent actuarial valuation.

(vi) The actuarial gains and losses are recognized immediately in the statement of profit and loss.

(K) Earnings per Share:

The Company reports Earnings per Share (EPS) in accordance with Accounting Standard 20 on Earnings per Share. Basic EPS is computed by dividing the net profit for the year by the weighted average number of equity shares outstanding during the year.

(L) Taxation:

Income tax is accounted for in accordance with Accounting Standard 22 on Accounting for Taxes on Income. Taxes comprise both current and deferred tax.

Current tax is measured at the amount expected to be paid to the taxation authorities, using the applicable tax rates and tax laws.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using the substantively enacted tax rates and tax regulations. The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which the deferred tax asset can be realized.

(M) operating Lease:

Operating lease payments are recognized as expenditure in the statement of profit and loss on a straightline basis, which is representative of the time pattern of benefits received from the use of assets taken on lease.

(N) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving a substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

(o) Cash Flow Statement:

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard – 3 on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consist of cash on hand and balances in current and demand deposits with banks.


Mar 31, 2013

(A) Basis of preparation of financial statements:

The accompanying financial statements have been prepared under the historical cost convention, in accordance with Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

(B) Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and differences between actual results and estimates are recognized in the periods in which the results are known / materialize.

(C) Tangible Fixed Assets and Depreciation

Fixed Assets are valued at their historical cost of acquisition or construction less accumulated depreciation. Cost includes all costs incurred to bring the assets to their present location and condition.

Depreciation on Tangible Fixed Assets is provided for on straight line basis in accordance with Section 205 (2) (b) of the Companies Act, 1956 (the Act) as follows:

(i) On fixed assets (except as stated below), at the rates specified in Schedule XIV to the Act.

(ii) Field vehicles are depreciated at the rate of 20%.

(iii) Plant and Machinery other than dryer is depreciated at the rate of 10%. Dryer is depreciated at the rate of 5%.

(iv) Mobile phones have been depreciated at the rate of 33.33%

(v) Leasehold improvements are amortised over the unexpired primary period of lease.

(vi) Factory Buildings are depreciated at the rate of 5%.

(vii) Computers are depreciated at the rate of 25%.

(D) Intangible Assets and Amortisation

Intangible Assets are valued at their cost less accumulated amortisation. Cost includes all costs incurred to bring the assets to their present location and condition.

Intellectual Property Rights are amortised on a Straight Line basis over its useful life which is estimated by the management to be 5 years.

Computer Software is amortised on a Straight Line basis over its useful life which is estimated by the management to be upto 6 years.

(E) Impairment

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment ofAssets when at balance sheet date there are indications of impairment and the carrying amount ofthe asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher ofthe asset''s net selling price and value in use). In assessing the value in use, the estimated future cash flow expected from the continuing use of the asset and its ultimate disposal are discounted to their present value using a predetermined discount rate. The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the statement of profit and loss.

(F) Investments:

Current investments are stated at the lower of cost and fair value.

(G) Inventories:

Inventories are measured at the lower of cost and net realizable value, after providing for obsolescence.

Costs of inventories comprise all costs of purchase - net of CENVAT, costs of inputs for standing crops, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Cost of Raw Materials, Packing Materials and finished goods (Traded Goods) are determined on weighted average cost basis. Cost of Work in Progress and Finished Goods (manufactured) are determined by the absorption costing method.

(H) Revenue Recognition:

(i) Revenue is recognized when it is earned and no significant uncertainty exists as to its realization or collection. Revenue on sale of products is recognised on delivery of the products, when all significant contractual obligations have been satisfied, the property in the goods is transferred for a price, significant risks and rewards ofownership have been transferred and no effective ownership control is retained.

Sales are stated inclusive of excise duty and net of returns, trade discounts and sales tax recovered. The amount of excise duty that is included in the amount of turnover (gross) is presented as a reduction from gross sales in accordance with the Accounting Standard (AS) - 9 "Revenue Recognition".

(ii) Revenue in respect of royalty, commission, etc. is recognized in accordance with contractual obligations.

(iii) Interest income is recognized on a time proportion basis.

(I) Foreign Currency Transactions:

(i) Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date ofthe transaction. Exchange differences arising on settlement of revenue transactions are recognized in the statement of profit and loss.

(ii) Monetary items denominated in foreign currency are restated using the exchange rates prevailing at the date of the balance sheet. Gains / Losses arising on restatement and on settlement of such liabilities are recognized in the statement of profit and loss.

(J) Employee Benefits:

(i) Provident fund is a defined contribution scheme and the contributions as required by the statute made to Government Provident Fund are charged to the statement of profit and loss.

(ii) Superannuation fund is a defined contribution scheme. The Company contributes a sum equivalent to 15% of eligible employees salary to Superannuation Fund administered by Trustees and managed by a life insurance Company. The Company recognizes such contribution as an expense as and when incurred.

(iii) The Company participates in a group gratuity cum life insurance scheme administered by the TATA AIG Life Insurance Company Ltd. Being a defined benefit plan, annual contributions made to the scheme are as per the intimations received from the TATA AIG Life Insurance Company Ltd. The Company accounts for liability for future gratuity benefits based on an actuarial valuation conducted by an independent actuary. The net present value of the Company''s obligation is determined based on the projected unit credit method as at the Balance Sheet date. Additionally shortfall, if any, between the balance in the fund with Tata AIG Life Insurance Company Ltd. and actuarial valuation obtained from an independent actuary is charged to the statement of profit and loss.

(iv) The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by an employee is recognized during the period when the employee renders the service. These benefits include performance incentives and non vesting accumulated compensated absences.

(v) The liability for compensated absences is another long term benefit and is wholly unfunded. The liability for number of days of unutilized leave at each Balance Sheet date is provided for based on an independent actuarial valuation.

(vi) The actuarial gains and losses are recognized immediately in the statement of profit and loss.

(K) Earnings per Share:

The Company reports Earnings per Share (EPS) in accordance with Accounting Standard 20 on Earnings per Share. Basic EPS is computed by dividing the net profit for the year by the weighted average number of equity shares outstanding during the year.

(L) Taxation:

Income tax is accounted for in accordance with Accounting Standard 22 on Accounting for Taxes on Income. Taxes comprise both current and deferred tax.

Current tax is measured at the amount expected to be paid to the taxation authorities, using the applicable tax rates and tax laws.

The tax effect ofthe timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using the substantively enacted tax rates and tax regulations. The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which the deferred tax asset can be realized.

(M) Operating Lease:

Operating lease payments are recognized as expenditure in the statement of profit and loss on a straight-line basis, which is representative of the time pattern of benefits received from the use of assets taken on lease.

(N) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving a substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

(O) Cash Flow Statement:

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard - 3 on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consist of cash on hand and balances in current and demand deposits with banks.


Mar 31, 2012

(A) Basis of preparation of financial statements:

The accompanying financial statements have been prepared under the historical cost convention, in accordance with Indian Generally Accepted Accounting Principles and as per the provisions of the Companies Act, 1956.

(B) Use of estimates:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and differences between actual results and estimates are recognized in the periods in which the results are known / materialize.

(C) Tangible Fixed Assets and Depreciation

Fixed Assets are valued at their historical cost of acquisition or construction less accumulated depreciation. Cost includes all costs incurred to bring the assets to their present location and condition.

Depreciation on Tangible Fixed Assets is provided for on straight line basis in accordance with Section 205(2)(b) of the Companies Act, 1956 (the Act) as follows:

(i) On fixed assets (except as stated below), at the rates specified in Schedule XIV to the Act.

(ii) Field vehicles are depreciated at the rate of 20%.

(iii) Plant and Machinery other than dryer is depreciated at the rate of 10%. Dryer is depreciated at the rate of 5%.

(iv) Mobile phones (Blackberry) have been depreciated at the rate of 33.33%

(v) Leasehold improvements are amortised over the unexpired primary period of lease.

(vi) Factory Buildings are depreciated at the rate of 5%.

(D) Intangible Assets and Amortisation

Intangible Assets are valued at their cost less accumulated amortisation. Cost includes all costs incurred to bring the assets to their present location and condition.

Intellectual Property Rights are amortised on a Straight Line basis over its useful life which is estimated by the management to be 5 years.

Computer Software is amortised on a Straight Line basis over its useful life which is estimated by the management to be upto 6 years.

(E) Impairment

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at balance sheet

date there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the asset'™s net selling price and value in use). In assessing the value in use, the estimated future cash flow expected from the continuing use of the asset and its ultimate disposal are discounted to their present value using a predetermined discount rate. The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the statement of profit and loss.

(F) Investments:

Current investments are stated at the lower of cost and fair value.

(G) Inventories:

Inventories are measured at the lower of cost and net realizable value.

Costs of inventories comprise all costs of purchase - net of CENVAT, costs of inputs for standing crops, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Cost of Raw Materials, Packing Materials and Finished Goods (Traded Goods) are determined on FIFO basis. Cost of Work in Progress and Finished Goods (manufactured) are determined by the absorption costing method.

(H) Revenue Recognition:

(i) Revenue is recognized when it is earned and no significant uncertainty exists as to its realization or collection. Revenue on sale of products is recognised on delivery of the products, when all significant contractual obligations have been satisfied, the property in the goods is transferred for a price, significant risks and rewards of ownership have been transferred and no effective ownership control is retained.

Sales are stated inclusive of excise duty and net of returns, trade discounts and sales tax recovered. The amount of excise duty that is included in the amount of turnover (gross) is presented as a reduction from gross sales in accordance with the Accounting Standard (AS) - 9 "Revenue Recognition".

(ii) Revenue in respect of royalty, commission, etc. is recognized in accordance with contractual obligations.

(iii) Interest income is recognized on a time proportion basis.

(I) Foreign Currency Transactions:

(i) Transactions in foreign currency are recorded at the average monthly exchange rates, during the months in which the transactions are effected.

(ii) Exchange differences arising on settlement of revenue transactions are recognised in the statement of profit and loss.

(iii) Monetary items denominated in foreign currency are restated using the exchange rates prevailing at the date of the balance sheet. Gains / Losses arising on restatement and on settlement of such liabilities are recognized in the statement of profit and loss.

(J) Employee Benefits:

(i) Provident fund is a defined contribution scheme and the contributions as required by the statute made to Government Provident Fund are charged to the statement of profit and loss.

(ii) Superannuation fund is a defined contribution scheme. The company contributes a sum equivalent to 15% of eligible employees salary to Superannuation Fund administered by Trustees and managed by a life insurance company. The company recognizes such contribution as an expense as and when incurred.

(iii) The Company participates in a group gratuity cum life insurance scheme administered by the TATA AIG Life Insurance Company Ltd. Being a defined benefit plan, annual contributions made to the scheme are as per the intimations received from the TATA AIG Life Insurance Company Ltd. The company accounts for liability for future gratuity benefits based on an actuarial valuation conducted by an independent actuary. The net present value of the company's obligation is determined based on the projected unit credit method as at the Balance Sheet date. Additionally shortfall, if any, between the balance in the fund with Tata AIG Life Insurance Company Ltd. and actuarial valuation obtained from an independent actuary is charged to the statement of profit and loss.

(iv) The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by an employee is recognized during the period when the employee renders the service. These benefits include performance incentives and non vesting accumulated compensated absences.

(v) The liability for compensated absences is another long term benefit and is wholly unfunded. The liability for number of days of unutilized leave at each Balance Sheet date is provided for based on an independent actuarial valuation.

(vi) The actuarial gains and losses are recognized immediately in the statement of profit and loss.

(K) Earnings per Share:

The Company reports Earnings per Share (EPS) in accordance with Accounting Standard 20 on Earnings per Share. Basic EPS is computed by dividing the net profit for the year by the weighted average number of equity shares outstanding during the year.

(L) Taxation:

Income tax is accounted for in accordance with Accounting Standard 22 on Accounting for Taxes on Income. Taxes comprise both current and deferred tax.

Current tax is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the applicable tax rates and tax laws.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using the substantively enacted tax rates and tax regulations. The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which the deferred tax asset can be realised.

(M) Operating Lease:

Operating lease payments are recognized as expenditure in the statement of profit and loss on a straight-line basis, which is representative of the time pattern of benefits received from the use of assets taken on lease.

(N) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving a substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

(O) Cash Flow Statement:

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the company. Cash and cash equivalents presented in the cash flow statement consist of cash on hand and balances in current and demand deposits with banks.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.

2. Significant Accounting Policies:

(A) Basis of preparation of financial statements:

The accompanying financial statements have been prepared under the historical cost convention, in accordance with Indian Generally Accepted Accounting Principles and as per the provisions of the Companies Act, 1956.

(B) Use of estimates:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and differences between actual results and estimates are recognized in the periods in which the results are known / materialize.

(C) Tangible Fixed Assets and Depreciation

Fixed Assets are valued at their historical cost of acquisition or construction less accumulated depreciation. Cost includes all costs incurred to bring the assets to their present location and condition.

Depreciation on Tangible Fixed Assets is provided for on straight line basis in accordance with Section 205(2)(b) of the Companies Act, 1956 (the Act) as follows:

(i) On fixed assets (except as stated below), at the rates specified in Schedule XIV to the Act.

(ii) Field vehicles are depreciated at the rate of 20%.

(iii) Plant and Machinery other than dryer is depreciated at the rate of 10%. Dryer is depreciated at the rate of 5%.

(iv) Mobile phones (Blackberry) have been depreciated at the rate of 33.33%

(v) Leasehold improvements are amortised over the unexpired primary period of lease.

(vi) Factory Buildings are depreciated at the rate of 5%.

(D) Intangible Assets and Amortisation

Intangible Assets are valued at their cost less accumulated amortisation. Cost includes all costs incurred to bring the assets to their present location and condition.

Intellectual Property Rights are amortised on a Straight Line basis over its useful life which is estimated by the management to be 5 years.

Computer Software is amortised on a Straight Line basis over its useful life which is estimated by the management to be upto 6 years.

(E) Impairment

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at balance sheet

date there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the asset'™s net selling price and value in use). In assessing the value in use, the estimated future cash flow expected from the continuing use of the asset and its ultimate disposal are discounted to their present value using a predetermined discount rate. The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the statement of profit and loss.

(F) Investments:

Current investments are stated at the lower of cost and fair value.

(G) Inventories:

Inventories are measured at the lower of cost and net realizable value.

Costs of inventories comprise all costs of purchase - net of CENVAT, costs of inputs for standing crops, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Cost of Raw Materials, Packing Materials and Finished Goods (Traded Goods) are determined on FIFO basis. Cost of Work in Progress and Finished Goods (manufactured) are determined by the absorption costing method.

(H) Revenue Recognition:

(i) Revenue is recognized when it is earned and no significant uncertainty exists as to its realization or collection. Revenue on sale of products is recognised on delivery of the products, when all significant contractual obligations have been satisfied, the property in the goods is transferred for a price, significant risks and rewards of ownership have been transferred and no effective ownership control is retained.

Sales are stated inclusive of excise duty and net of returns, trade discounts and sales tax recovered. The amount of excise duty that is included in the amount of turnover (gross) is presented as a reduction from gross sales in accordance with the Accounting Standard (AS) - 9 "Revenue Recognition".

(ii) Revenue in respect of royalty, commission, etc. is recognized in accordance with contractual obligations.

(iii) Interest income is recognized on a time proportion basis.

(I) Foreign Currency Transactions:

(i) Transactions in foreign currency are recorded at the average monthly exchange rates, during the months in which the transactions are effected.

(ii) Exchange differences arising on settlement of revenue transactions are recognised in the statement of profit and loss.

(iii) Monetary items denominated in foreign currency are restated using the exchange rates prevailing at the date of the balance sheet. Gains / Losses arising on restatement and on settlement of such liabilities are recognized in the statement of profit and loss.

(J) Employee Benefits:

(i) Provident fund is a defined contribution scheme and the contributions as required by the statute made to Government Provident Fund are charged to the statement of profit and loss.

(ii) Superannuation fund is a defined contribution scheme. The company contributes a sum equivalent to 15% of eligible employees salary to Superannuation Fund administered by Trustees and managed by a life insurance company. The company recognizes such contribution as an expense as and when incurred.

(iii) The Company participates in a group gratuity cum life insurance scheme administered by the TATA AIG Life Insurance Company Ltd. Being a defined benefit plan, annual contributions made to the scheme are as per the intimations received from the TATA AIG Life Insurance Company Ltd. The company accounts for liability for future gratuity benefits based on an actuarial valuation conducted by an independent actuary. The net present value of the company's obligation is determined based on the projected unit credit method as at the Balance Sheet date. Additionally shortfall, if any, between the balance in the fund with Tata AIG Life Insurance Company Ltd. and actuarial valuation obtained from an independent actuary is charged to the statement of profit and loss.

(iv) The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by an employee is recognized during the period when the employee renders the service. These benefits include performance incentives and non vesting accumulated compensated absences.

(v) The liability for compensated absences is another long term benefit and is wholly unfunded. The liability for number of days of unutilized leave at each Balance Sheet date is provided for based on an independent actuarial valuation.

(vi) The actuarial gains and losses are recognized immediately in the statement of profit and loss.

(K) Earnings per Share:

The Company reports Earnings per Share (EPS) in accordance with Accounting Standard 20 on Earnings per Share. Basic EPS is computed by dividing the net profit for the year by the weighted average number of equity shares outstanding during the year.

(L) Taxation:

Income tax is accounted for in accordance with Accounting Standard 22 on Accounting for Taxes on Income. Taxes comprise both current and deferred tax.

Current tax is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the applicable tax rates and tax laws.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using the substantively enacted tax rates and tax regulations. The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which the deferred tax asset can be realised.

(M) Operating Lease:

Operating lease payments are recognized as expenditure in the statement of profit and loss on a straight-line basis, which is representative of the time pattern of benefits received from the use of assets taken on lease.

(N) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving a substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

(O) Cash Flow Statement:

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the company. Cash and cash equivalents presented in the cash flow statement consist of cash on hand and balances in current and demand deposits with banks.


Mar 31, 2011

(A) Basis of preparation of financial statements:

The accompanying financial statements have been prepared under the historical cost convention, in accordance with Indian Generally Accepted Accounting Principles and as per the provisions of the Companies Act, 1956.

(B) Use of estimates:

The preparation of financial statements in conf ormity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and dif ferences between actual results and estimates are recognized in the periods in which the results are known/materialize.

(C) Tangible Fixed Assets and Depreciation

Fixed Assets are valued at their historical cost of acquisition or construction less accumulated depr eciation. Cost includes all costs incurred to bring the assets to their present location and condition.

Depreciation on Tangible Fixed Assets is provided for on straight line basis in accordance with Section 205 (2) (b) of the Companies Act, 1956 (the Act) as follows:

(i) On fixed assets (except as stated below), at the rates specified in Schedule XIV to the Act.

(ii) Field vehicles are depreciated at the rate of 20%.

(iii) Plant and Machinery other than dryer is depreciated at the rate of 10%. Dryer is depreciated at the rate of 5%.

(iv) Mobile phones (Blackberry) have been depreciated at the rate of 33.33%

(v) Leasehold improvements are amortized over the unexpired period of lease.

(vi) Factory Buildings are depreciated at the rate of 5%.

(D) Intangible Assets and Amortization

Intangible Assets are valued at their cost less accumulated amortization. Cost includes all costs incurred to bring the assets to their present location and condition.

Intellectual Property Rights are amortized on a Straight Line basis over its useful life which is estimated by the management to be 5 years.

Computer Software is amortized on a Straight Line basis over its useful life which is estimated by the management to be 6 years.

(E) Impairment

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at balance sheet date there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the asset's net selling price and value in use). In assessing the value in use, the estimated future cash flow expected from the continuing use of the asset and its ultimate disposal are discounted to their present value using a predetermined discount rate. The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the profit and loss account.

(F) Investments:

Current investments are stated at the lower of cost and fair value.

(G) Inventories:

Inventories are measured at the lower of cost and net realizable value.

Costs of inventories comprise all costs of pur chase - net of CENVAT, costs of inputs f or standing crops, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Cost of Raw Materials, Packing Materials and finished goods (T raded Goods) are determined on FIF O basis. Cost of Work in Process and Finished Goods (manufactured) are determined by the absorption costing method.

(H) Revenue Recognition:

(i) Revenue is recognized when it is earned and no significantuncertainty exists as to its realization or collection. Revenue on sale of pr oducts is r ecognized on deliv ery of the pr oducts, when all significant contr actual obligations have been satisfied, the pr operty in the goods is tr ansferred for a price, significant risks and rewards of ownership have been transferred and no effective ownership control is retained.

Sales are stated inclusive of excise duty and net of r eturns, trade discounts and sales tax r ecovered. The amount of excise duty that is included in the amount of turno ver (gross) is presented as a reduction from gross sales in accordance with the A ccounting Standard interpretation ASI 14 ªDisclosure of revenue from sales transactionsº.

(ii) Revenue in respect of royalty, commission, etc. is recognized in accordance with contractual obligations.

(iii) Interest income is recognized on a time proportion basis.

(I) Foreign Currency Transactions:

(i) Transactions in foreign currency are recorded at the average monthly exchange rates, during the months in which the transactions are effected.

(ii) Exchange differences arising on set tlement of r evenue transactions are recognized in the Pr ofit & L oss Account.

(iii) Monetary items denominated in f oreign currency are restated using the exchange rates prevailing at the date of the balance sheet . Gains/losses arisin g on r estatement and on set tlement of such liabilities ar e recognized in the profit and loss account.

(J) Employee Benefits:

(i) Provident fund is a defined contribution scheme and the contributions as r equired by the statute made to Government Provident Fund are charged to profit and loss account.

(ii) Superannuation fund is a defined contribution scheme . The Company contributes a sum equivalent to 15% of eligible employees salary to Superannuation Fund administered by trustees and managed by life insured company. The Company recognizes such contribution as an expense as and when incurred.

(iii) The Company participates in a group gratuity cum life insurance scheme administered by the TATA AIG Life Insurance Company Ltd. Being a defined benefit plan, annual contributions made to the scheme ar e as per the intimations received from the TATA AIG Life Insurance Company Ltd. The Company accounts for liability for future gratuity benefits based on an actuarial v aluation conducted by an independent actuar y. The net present value of the C ompany's obligation is determined based on the pr ojected unit credit method as at the Balance Sheet date . Additionally shortfall, if any, between the balance in the fund with T ata AIG Life Insurance Company Ltd. and actuarial v aluation obtained from an independent actuar y is charged to the profit and loss account.

(iv) The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by emplo yee is r ecognized during the period when the emplo yee renders the ser vice. These benefits include performance incentives and non vesting accumulated compensated absences.

(v) The liability for compensated absences is an other lon g term benefit and is wholly unfunded. The liabilit y for number of days of unutilized leave at each Balance Sheet date is provided for based on an independent actuarial valuation.

(vi) The actuarial gains and losses are recognized immediately in the statement of Profit and Loss Account.

(K) Earnings Per Share:

The Company reports Earnings Per Share (EPS) in accordance with Accounting Standard 20 on Earnings Per Share. Basic EPS is computed by dividin g the net profit for the year by the weighted a verage number of equit y shares outstanding during the year.

(L) Taxation:

Income tax is accounted for in accordance with Accounting Standard 22 on Accounting for Taxes on Income. Taxes comprise both current and deferred tax.

Current tax is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the applicable tax rates and tax laws.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using the substantively enacted tax rates and tax regulations. The carrying amount of deferred tax assets at each balance sheet date is r educed to the extent that it is no lon ger reasonably certain that sufficient future taxable income will be available against which the deferred tax asset can be realized.

(M) Operating Lease:

Operating lease payments are recognized as expenditure in the profit and loss account on a str aight-line basis, which is representative of the time pattern of benefits received from the use of assets taken on lease.

(N) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving a substantial degree of estimation in measur ement are recognized when there is a present obligation as a r esult of past ev ents and it is pr obable that there will be an out flow of resources. Contingent liabilities are not recognized but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

(O) Cash Flow Statement:

The Cash Flow Statement is pr epared by the indir ect method set out in A ccounting Standard- 3 on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement c onsist of cash on hand and balances in curr ent and demand deposits with banks.


Mar 31, 2010

A) Basis of preparation of fnancial statements:

The accompanying fnancial statements have been prepared under the historical cost convention, in accordance with Indian Generally Accepted Accounting Principles and as per the provisions of the Companies Act, 1956.

B) Use of estimates:

The preparation of fnancial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the fnancial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and differences between actual results and estimates are recognized in the periods in which the results are known/materialize.

C) Tangible Fixed Assets and Depreciation:

Fixed Assets are valued at their historical cost of acquisition or construction less accumulated depreciation. Cost includes all costs incurred to bring the assets to their present location and condition.

Depreciation on Tangible Fixed Assets is provided for on straight line basis in accordance with Section 205 (2) (b) of the Companies Act, 1956 (the Act) as follows: i) On fxed assets (except as stated below), at the rates specifed in Schedule XIV to the Act.

ii) Field vehicles are depreciated at the rate of 20%.

iii) Plant and Machinery other than dryer is depreciated at the rate of 10%. Dryer is depreciated at the rate of 5%.

iv) Mobile phones (Blackberry) have been depreciated at the rate of 33.33%

v) Leasehold improvements are amortized over the unexpired period of lease.

vi) Factory Buildings are depreciated at the rate of 5%.

D) Intangible Assets and Amortization:

Intellectual Property Rights are amortized on a Straight Line basis over its useful life, which is estimated by the management to be 5 years.

Computer Software is amortized on a Straight Line basis over its useful life, which is estimated by the management to be 6 years.

E) Impairment:

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at balance sheet date there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the assets net selling price and value in use). In assessing the value in use, the estimated future cash fow expected from the continuing use of the asset and its ultimate disposal are discounted to their present value using a predetermined discount rate. The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the proft and loss account.

F) Investments:

Current investments are stated at the lower of cost and fair value.

G) Inventories:

Inventories are measured at the lower of cost and net realisable value. Costs of inventories comprise all costs of purchase – net of CENVAT, costs of inputs for standing crops, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Cost of Raw Materials, Packing Materials and fnished goods (Traded Goods) are determined on FIFO basis. Cost of Work in Process and Finished Goods (manufactured) are determined by the absorption costing method.

H) Revenue Recognition:

i) Revenue is recognized when it is earned and no signifcant uncertainty exists as to its realization or collection. Revenue on sale of products is recognized on delivery of the products, when all signifcant contractual obligations have been satisfed, the property in the goods is transferred for a price, signifcant risks and rewards of ownership have been transferred and no effective ownership control is retained. Sales are stated inclusive of excise duty and net of returns, trade discounts and sales tax recovered. The amount of excise duty that is included in the amount of turnover (gross) is presented as a reduction from gross sales in accordance with the Accounting Standard interpretation ASI 14 "Disclosure of revenue from sales transactions."

ii) Revenue in respect of royalty, commission, etc. is recognized in accordance with contractual obligations.

iii) Interest income is recognized on a time proportion basis.

I) Foreign Currency Transactions:

i) Transactions in foreign currency are recorded at the average monthly exchange rates, during the months in which the transactions are effected.

ii) Exchange differences arising on settlement of revenue transactions are recognized in the Proft and Loss Account.

iii) Monetary items denominated in foreign currency are restated using the exchange rates prevailing at the date of the Balance Sheet. Gains/losses arising on restatement and on settlement of such liabilities are recognized in the Proft and Loss Account.

J) Employee Benefts:

i) Provident fund is a defned contribution scheme and the contributions as required by the statute made to Government Provident Fund are charged to Proft and Loss Account.

ii) The Company participates in a group gratuity cum life insurance scheme administered by the TATA AIG Life Insurance Company Ltd. Being a defned beneft plan, annual contributions made to the scheme and accounting for liability for gratuity benefts are as per the intimations received from the TATA AIG Life Insurance Company Ltd which are based on actuarial valuations, conducted as at the Balance Sheet date.

iii) The undiscounted amount of short-term employee benefts expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee renders the service. These benefts include performance incentives and non-vesting accumulated compensated absences.

iv) The liability for compensated absences is an other long term beneft and is wholly unfunded. The liability for number of days of unutilized leave at each Balance Sheet date is provided for based on an independent actuarial valuation.

v) The actuarial gains and losses are recognized immediately in the statement of Proft and Loss Account.

K) Earnings Per Share:

The Company reports Earnings Per Share (EPS) in accordance with Accounting Standard-20 on Earnings Per Share. Basic EPS is computed by dividing the net proft for the year by the weighted average number of equity shares outstanding during the year.

L) Taxation:

Income tax is accounted for in accordance with Accounting Standard-22 on Accounting for Taxes on Income. Taxes comprise both current and deferred tax.

Current tax is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the applicable tax rates and tax laws.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using the substantively enacted tax rates and tax regulations. The carrying amount of deferred tax assets at each Balance Sheet date is reduced to the extent that it is no longer reasonably certain that suffcient future taxable income will be available against which the deferred tax asset can be realized.

Fringe Benefts Tax (FBT) payable under the provisions of Section 115WC of the Income Tax Act, 1961 is, in accordance with the Guidance Note on Accounting for Fringe Benefts Tax issued by the ICAI, regarded as an additional income tax and considered in determination of the profts for the year. Tax on distributed profts payable in accordance with the provisions of Section 115O of the Income Tax Act, 1961, is in accordance with the Guidance Note on Accounting for Corporate Dividend Tax, regarded as a tax on distribution of profts and is not considered in determination of the profts for the year.

M) Operating Lease:

Operating lease payments are recognized as expenditure in the Proft and Loss Account on a straight line basis, which is representative of the time pattern of benefts received from the use of assets taken on lease.

N) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving a substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outfow of resources. Contingent liabilities are not recognized but are disclosed in the fnancial statements. Contingent assets are neither recognized nor disclosed in the fnancial statements.

O) Cash Flow Statement:

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard – 3 on Cash Flow Statement and presents cash fows by operating, investing and fnancing activities of the Company. Cash and cash equivalents presented in the cash fow statement consist of cash on hand and balances in current and demand deposits with banks.

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