1. Contingent Liabilities
Nature 2011-12 2010-11
Contingent Liabilities not
(a) Claim against the Company not
acknowledged as debt 22.2 31.1
In respect of which the Company has
counterclaim 68.7 67.0
(b) Demand for taxes and duties in
respect of which the company
has preferred appeals with appropriate
a. Income Tax 18.4 32.0
b. Customs, Excise, Service Tax and
Sales Tax 175.9 142.7
Estimated amount of contracts remaining to be executed on capital
account and not provided (net of advances) for Rs. 280.0 million
(Previous Year Rs. 257.2 million).
3. Purchase of specialty chemicals business of Cognis Specialty
Chemicals India Private Limited
Pursuant to an Agreement entered into between BASF India Limited (''the
Company'') and Cognis Specialty Chemicals India Private Limited
(''Cognis''), the specialty chemicals business of Cognis was acquired
from 1st July, 2011 for consideration of Rs. 134 Mio. The assets and
liabilities of Cognis have been taken over at fair value as determined
by an independent valuer and the difference between the fair value of
the net assets purchased over the consideration paid aggregating to Rs.
68.8 Mio. has been accounted as Goodwill.
4. Amalgamation of BASF Coatings (India) Private Limited (BCIN), BASF
Construction Chemicals (India) Private Limited (BCC) and BASF
Polyurethanes India Limited (BPIL) with BASF India Limited (BIL or the
Pursuant to the Scheme of Amalgamation (''the scheme'') as approved in
the court convened shareholder meeting held on 3rd November, 2010 and
subsequently sanctioned by the Honourable High Court of Bombay vide its
order dated 14th January, 2011, BCIN, BCC, BPIL (wholly owned
subsidiary of the Company) (collectively referred to as the
amalgamating companies) were merged with the Company. The amalgamating
companies were engaged in the business of manufacturing and trading of
resins, thinners and varnishes, building & construction materials &
polyurethane systems house and polyesterols.
As provided in the Scheme of Amalgamation, 619,589 equity shares of BIL
(representing 1.43% of equity share capital as at 31st March, 2011)
were issued against 37,175,399 shares of BCIN (representing 100% of
equity share capital as at 1st April, 2010) and 1,896,064 equity shares
of BIL (representing 4.38% of equity share capital as at 31st March,
2011) were issued against 2,464,885 shares of BCC (representing 100% of
equity share capital as at 1st April, 2010). 9,000,000 equity shares
(representing 100% of equity share capital as at 1st April, 2010 of
BPIL) and BILs investment in such equity shares held by the Company
were cancelled. Accordingly 2,515,653 equity shares of Rs. 10/- each
fully paid up were issued to the equity share holders of the BCIN and
BCC without payment being received in cash.
As per the Scheme of Amalgamation, the ''Appointed Date'' is 1st April,
2010. The amalgamation was accounted under the pooling of
interests method as prescribed by Accounting Standard 14 on
Accounting for Amalgamations. Accordingly:
(i) All the assets and liabilities of BCIN, BCC and BPIL were
transferred and vested in the Company at book values with effect from
1st April, 2010. The reserves of the amalgamating companies appear in
the same form in the financial statements of the Company.
(ii) As specified in the scheme of amalgamation, the difference between
the amount recorded as share capital issued (Rs. 25.2 Mio.) and the
amount of share capital of the amalgamating companies (Rs. 396.4 Mio.)
aggregating to Rs. 371.2 Mio. was adjusted in amalgamation reserves.
(iii) The book values of the intercompany balances and holdings were
5. Employees benefits:
Defined contribution plans:
Company''s contribution to defined contribution funds amounting to Rs.
82.5 Mio. (Previous year Rs. 63.7 Mio.) has been charged to the
Statement of Profit and Loss.
Defined benefit plans and other long term employee benefits:
Gratuity is payable to all eligible employees of the Company on
superannuation, death, permanent disablement and resignation in terms
of provisions of the Payment of Gratuity Act, 1972, or as per the
Company''s scheme whichever is more beneficial. The Company irrevocably
contributes funds to a separate Gratuity Trust which is recognised by
Income Tax authorities.
Eligible employees can carry forward and encash leave on
superannuation, death, permanent disablement and resignation as per
Long Service Awards are payable to employees on completion of specified
years of service at the rate of 0.5 month to 1.5 months eligible
The expected rate of return on assets is based on the expectation of
the average long term rate of return on investment of the fund, during
the estimated term of obligation.
The obligations are measured at the present value of estimated future
cash flows by using a discount rate that is determined with reference
to the market yields at the Balance Sheet date on Government Bonds
which is consistent with the estimated terms of the obligation.
The estimate of future salary increase, considered in the actuarial
valuation, takes account of inflation, seniority, promotion and other
relevant factors such as supply and demand in the employment market.
The Company has an obligation to fund any shortfall on the yield of the
trust''s investments over the administered interest rates on an annual
basis. These administered rates are notified by the Government
annually. The Actuarial Society of India has issued the final guidance
for measurement of provident fund liabilities during the year ended
March 31, 2012. The actuary has accordingly provided a valuation based
on the below provided assumptions and there is no shortfall as at March
Notes on Segment Information:
1. Segments have been identified in accordance with the Accounting
Standard on Segment Reporting (AS-17). Business Segments have been
considered as primary segments.
2. Details of type of products included in each segment
Agricultural Solution - includes Agrochemicals. Agricultural
Solution is seasonal in nature.
Performance Products - Tanning agents, Leather Chemicals, Textile
Chemicals, Dispersion Chemicals, Specialty Chemicals and high-value
fine Chemicals for the food, pharmaceuticals, animal feed and cosmetics
Plastics - Expandable Polystyrene (EPS), Engineering Plastics and
Chemicals - Chemicals includes inorganic chemicals, intermediates
Functional Solution - Functional Solution includes coatings and
Others - includes technical and service charges.
3. Un-allocable Corporate Assets include Net Deferred Tax Assets and
other un-allocable assets.
4. Un-allocable Corporate Liabilities include Proposed Dividend and
other un-allocable liabilities.
6. Transfer pricing regulations:
The management is of the opinion that the Company''s international
transactions are at an arms length so that aforesaid legislation will
not have any impact on the financial statements, particularly on the
amount of tax expense and that of provision for taxation.
7. Foreign currency exposure details:
As on 31st March, 2012, the Company has 67 forward contracts totalling
to USD 73.60 Mio. (Rs. 3,671.00 Mio.) for the purposes of hedging its
foreign currency exposure. The unamortized premium of Rs. 50.15 Mio.
pertaining to the same will be recognized subsequently. Foreign
currency exposure that is not hedged as at 31st March is as follows:
8. Previous year figures are regrouped/reclassified pursuant to
adoption of requirements of revised Schedule VI of Companies Act, 1956.