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Bayer CropScience Ltd.

BSE: 506285 Sector: Agri and agri inputs
NSE: BAYERCROP ISIN Code: INE462A01022
BSE 00:00 | 04 Jun 5398.65 89.50
(1.69%)
OPEN

5254.95

HIGH

5441.95

LOW

5254.95

NSE 00:00 | 04 Jun 5398.50 114.15
(2.16%)
OPEN

5279.00

HIGH

5438.00

LOW

5235.85

OPEN 5254.95
PREVIOUS CLOSE 5309.15
VOLUME 1201
52-Week high 5600.00
52-Week low 2952.00
P/E 42.06
Mkt Cap.(Rs cr) 24,262
Buy Price 5350.00
Buy Qty 1.00
Sell Price 5420.00
Sell Qty 125.00
OPEN 5254.95
CLOSE 5309.15
VOLUME 1201
52-Week high 5600.00
52-Week low 2952.00
P/E 42.06
Mkt Cap.(Rs cr) 24,262
Buy Price 5350.00
Buy Qty 1.00
Sell Price 5420.00
Sell Qty 125.00

Bayer CropScience Ltd. (BAYERCROP) - Auditors Report

Company auditors report

To The Members of Bayer CropScience Limited Report on the Audit of the FinancialStatements Opinion

We have audited the accompanying financial statements of Bayer CropScience Limited ("theCompany") which comprise the Balance Sheet as at March 31 2019 and the Statementof Profit and Loss (including Other Comprehensive Income) the Statement of Cash Flows andthe Statement of Changes in Equity for the year then ended and a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 and its profit total comprehensiveincome its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor's Responsibility for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules made thereunder and wehave fulfilled accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificancein our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matter described below to be the key audit matter to be communicatedin our report.

Key Audit Matter Auditor's Response
Revenue Recognition Rebates/ Discounts and Returns. A description of key accounting policies for revenue recognition rebates/ discounts and returns is disclosed in Note 1(d) Significant accounting policies of the financial statements. Principal audit procedures performed:
We obtained an understanding of the Company's process for making estimates in these areas and performed the following procedures:
Management is required to make certain judgments in respect of revenue recognition and level of expected rebates/ discounts and returns which are deducted in arriving at revenue. These estimates are material to the financial statement and require significant judgment. We tested the design and operating effectiveness of key controls related to rebates/ discounts and returns. We obtained an understanding of key contractual arrangements with customers for rebates/ discounts and returns.
To determine these estimates Management is required to consider historical experience specific contractual terms and future expectation of revenue. Management judgment is also significantly impacted by volatility in the market weather conditions and action of third parties. Hence the estimation of refund liabilities is complex subjective and susceptible to material misstatement if judgment is inaccurate. The Management has determined refund liabilities of र 1540 million as at March 31 2019. We considered the accuracy of management's estimates in previous years by comparing historical accrued liabilities to the actual settlements.
We assessed the completeness and accuracy of the refund liabilities by recalculating the amount based on historical actual returns adjusted for current volumes and market conditions.
We considered the adequacy of the Company's revenue recognition accounting policies including the recognition and measurement of deductions to gross sales relating to rebates/ discounts and returns and related disclosures.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation obtained at the date of this auditor's report is Director's Report CorporateGovernance Report and Management Discussion & Analysis Report but does not includethe financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financialstatements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror. for assessing the Company's ability to continue as a going concernInpreparingthefinancial disclosing as applicable matters related to going concern andusing the going concern basis of accounting unless management either intends to liquidatethe Company or to cease operations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatementsas a whole are free from material misstatement whether due to fraud or error and toissue an auditor's report that includes our opinion. Reasonable assurance is a high levelof assurance but is not a guarantee that an audit conducted in accordance with SAs willalways detect a material misstatement when it exists. Misstatements can arise from fraudor error and are considered material if individually or in the aggregate they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese financial statements. As part of an audit in accordance with SAs we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks financialstatements whether due to fraud or errordesign and of material misstatement of the perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficientand appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal financial control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events orconditionsthatmaycastsignificantdoubt on the Company's abilityto continue as a going concern. If we conclude that a material uncertainty exists we arerequired to draw attention in our auditor's report to the related disclosures in thefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

Evaluate theoverallpresentationstructureandcontentofthefinancialstatements includingthe disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation. statements thatindividually or in aggregate makes it probable Materialityisthemagnitudeofmisstatementsinthefinancial that the economic decisionsof financialstatementsmay be influenced. We consider quantitative reasonablyknowledgeableuserofthemateriality and qualitative factors in (i) planning the scope of our audit work and inevaluating the results of our work; and (ii) to evaluate the effect of any identifiedmisstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internalcontrolthatwe . audit identifyduringour We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit we report that: a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books. c) The Balance Sheet the Statement of Profitand Loss including Other Comprehensive Income the Statement of Cash Flows and Statementof Changes in Equity dealt with by this Report are in agreement with the books of account.d) In our opinion the aforesaid financial statements comply with the IndAS specifiedunder Section 133 of the Act. e) On the basis of the written representations received fromthe directors as on March 31 2019 taken on record by the Board of Directors none of thedirectors are disqualified as on March 31 2019 from being appointed as a director interms of Section 164(2) of the Act. f) With respect to the adequacy of the internalfinancial controls over financial effectiveness of such controls refer to our separateReport in "Annexure A". Our report expressesanunmodifiedopinion on the adequacyand operating effectiveness of the Company's internal financial controls over financialreporting. g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act. However as stated in note 40 to the financialstatements appointment of Managing Director of the Company is subject to approval of theShareholders in the ensuing general meeting and of the Central Government which isapplied for and is awaited. h) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 as amended in our opinion and to the best of our information and according to theexplanations given to us: i. The Company has disclosed the impact of pending litigationson its financial position in its financial statements Refer note 32. ii. The Company didnot have any long-term contracts including derivative contracts for which there were anymaterial foreseeable losses. iii. There were no amounts which were required to betransferred to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W/ W - 100018)
Sampada S Narvankar
Partner
(Membership No. 102911)
Mumbai May 27 2019

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reportingof BayerCropScience Limited ("the Company") as of March 31 2019 in conjunction withour audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India". These responsibilities include the designimplementation and maintenanceofadequateinternalfinancialcontrols that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompaniesAct 2013.

Auditor's Responsibility reporting of the Company Ourresponsibilityistoexpress anopinion based financialcontrols over financial theCompany'sinternal on our audit.We conducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") issued by the Instituteof Chartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internalfinancialcontrols over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company's internalfinancialcontrol over financial reporting is a process designed tothe reliability of financial reporting and the preparation of financialstatements forexternal purposes in accordance with generally accepted accounting principles. A Company'sinternal financial control over financialreporting includes those policies and proceduresthat (1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the Company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financialfinancialreporting to futureperiods are subject to the risk that the internal financial controlsover control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the criteria forinternal financial control over financial reporting established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W/ W - 100018)
Sampada S Narvankar
Partner
(Membership No. 102911)
Mumbai May 27 2019

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our Report of even date on financial statements of BayerCropScience Limited for the year ended March 31 2019)

i. In respect of its fixed assets: a) The Company has maintained proper records showingfull particulars including quantitative details and situation of fixed assets. b) TheCompany has a program of verification of fixed assets to cover all the items in a phasedmanner three years which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the Management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification. c)According to the information and explanations given to us and the records examined by usand based on the examination of the registered sale deed/ transfer deed/ conveyance deedprovided to us we report that the title deeds comprising all the immovable propertiesof land and buildings which are freehold are held in the name of the Company as at thebalance sheet date. In respect of immovable properties of land and buildings that havebeen taken on lease and disclosed as fixed assets in the financial statements the leaseagreements are in the name of the Company where the Company is the lessee in theagreement. ii. The physical verification of inventory [excluding goods in transit andstocks with third parties] have been conducted at reasonable intervals by the Managementduring the year. In respect of inventory lying with third parties this has beensubstantially confirmed by them as at the year-end. The discrepancies noticed on physicalverification of inventory as compared to book records were not material. iii. The Companyhas not granted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section 189 of theAct. Therefore the provisions of Clause 3(iii) (iii)(a) (iii)(b) and (iii)(c) of thesaid Order are not applicable to the Company. iv. In our opinion and according to theinformation and explanations given to us the Company has complied with the provisions ofSection 186 of the Act in respect of making investments. The Company has not granted anyloans or provided guarantees and securities. v. According to the information andexplanations given to us the Company has not accepted any deposit during the year andhence reporting under Clause (v) of the said Order is not applicable. vi. The maintenanceof cost records has been specified by the Central Government under section 148(1) of theAct. We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 as amended prescribed by the CentralGovernment under sub-section (1) of Section 148 of the Act and are of the opinion that primafacie the prescribed cost records have been made and maintained. We have howevernot made a detailed examination of the cost records with a view to determine whether theyare accurate or complete. vii. According to the information and explanations given to usin respect of statutory dues: a) The Company is generally regular in depositing undisputedstatutory dues in respect of Tax Deducted at Source Professional Tax and Labour WelfareFund though there have been slight delays in few cases and is regular in depositingundisputed statutory dues including Provident Fund Employees' State InsuranceIncome-tax Sales Tax Service Tax Customs Duty Excise Duty Value Added Tax Goods andservice tax cess and other material statutory dues applicable to it to the appropriateauthorities. b) There were no undisputed amounts payable in respect of Provident FundEmployees' State Insurance Income-tax Sales Tax Service Tax Customs Duty Excise DutyValue Added Tax Goods and service tax cess and other material statutory dues in arrearsas at March 31 2019 for a period of more than six months from the date they becamepayable.

c) Details of dues of Income-tax Sales Tax Service Tax Excise Duty Value Added Taxand Goods and service tax which have not been deposited as on March 31 2019 on account ofdisputes are given below:

Name of Statute Nature of Dues Forum where Dispute is Pending Period to which the Amount Relates Amount (र In Million)
Income Tax Act 19611 Income Tax Dues Appellate Authority up to Appellate Tribunal level Assessment Years 2003-2004 2004-2005 2005-2006 2007-2008 18
The Central Sales Tax Act 1956 and Local Sales Tax Acts2 Sales Tax and Value Added Tax liability Appellate Authority up to Commissioner's level Financial Years 1977-1978 1979-1980 to 1981-1982 1983-1984 to 1984-1985 1998-1999 to 2015-2016 424
Sales Tax Appellate Tribunal Financial Years 3
1989-1990 to 1990-1991 1995-1996 to 1996-1997 2009-2010
Central Excise Act 1944 Excise Duty liability Appellate Authority up to Commissioner's level Financial Years 4
1986-1987 to 1991-1992 1993-1994 to 1996-1997
Custom Excise and Service Tax Appellate Tribunal Financial Years 2
1993-1994 2000-2001 and 2002- 2003
High Court Financial Years 1993-1994 to 1994-1995 2000-2001 4
Supreme Court Financial Years 2000-2001 to 2002-2003 10
The Finance Act 19943 Service Tax Liability Appellate Authority up to Commissioner's level Custom Excise and Service Tax Appellate Tribunal Financial Years 2004-2005 to 2015-2016 39
Financial Years 2005-2006 to 2006-2007 11
The Custom Act 1962 Custom Duty Appellate Authority up to Commissioner's level Financial Years 2002-2003 8
The Central Goods and Service Tax Act 20174 Goods and Service Tax Appellate Authority up to Commissioner's level Financial Year 2018-2019 *

* Denotes figures below` Million.

1. Net of र 874 million paid;

3. Net of र 1 million paid;

2. Net of र 52 million paid;

4. Net of र 0.5 million paid.

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings to banks. The Companyhas not taken any loans or borrowings from financial institutions and government. TheCompany has not issued any debentures. ix. The Company has not raised moneys by way ofinitial public offer or further public offer (including debt instruments) or term loansand hence reporting under clause (ix) of the said Order is not applicable. x. To the bestof our knowledge and according to the information and explanations given to us no fraudby the Company and no material fraud on the Company by its officers or employees has beennoticed or reported during the year.

xi. In our opinion and according to the information and explanations given to us theCompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.However as stated in note 40 to the financialstatements appointment of Managing Directorof the Company is subject to approval of the Shareholders in the ensuing general meetingand of the Central Government which is applied for and is awaited. xii. The Company is nota Nidhi Company and hence reporting under clause (xii) of the said Order is notapplicable. xiii. In our opinion and according to the information and explanations givento us the Company is in compliance with Section 177 and 188 of the Act for alltransactions with the related parties and the details of related party transactions havebeen disclosed in the financial statements etc. as required by the applicable accountingstandards. xiv. During the year the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures and hence reportingunder clause (xiv) of said Order is not applicable to the Company. xv. In our opinion andaccording to the information and explanations given to us during the year the Companyhas not entered into any non-cash transactions with its directors or persons connectedwith them and hence provisions of section 192 of the Act are not applicable. xvi. TheCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W/ W - 100018)
Sampada S Narvankar
Partner
(Membership No. 102911)
Mumbai May 27 2019