Bayer CropScience seeks shareholder nod to hike related party trades

19 Jul 2022

Bayer CropScience Ltd is seeking shareholder approval to raise the limit towards material related party transactions with its ultimate holding company Bayer AG to 30 bln rupees from 18 bln rupees, according to its annual report for 2021-22 (Apr-Mar) released on Tuesday.

At its annual general meeting on August 22, the company’s shareholders will vote on an ordinary resolution seeking their approval to enable the company to buy goods from, or to sell them to, Bayer AG, among other specified types of related party transactions upto 30 bln rupees every year from 2022-23 to 2026-27.

Bayer AG is the ultimate holding company of Bayer Cropscience.

As of Jun 30, the domestic promoter entities included Bayer Vapi and Monsanto Investments India, while the foreign promoter entities included Bayer AG, Monsanto Company and two others. The collective holding by promoters was 71.4%.

The proposed 30 bln rupees of related party transactions make up for 63% of Bayer CropScience’s annual turnover in 2021-22 and 70% of the 2020-21 annual turnover. It was also 2% of Bayer AG’s consolidated turnover in 2021 (Jan-Dec).

The company said the related party transactions with Bayer AG helped it to “access scientific know-how and benefit from being part of Bayer’s global supply chain.”

In 2021-22, the value of related party transactions with Bayer AG was 16.7 bln rupees, close to the 18-bln-rupees annual threshold that shareholders had approved in August 2017.

The company said it was seeking the increase in related party transaction annual threshold to 30 bln rupees from 18 bln rupees due to “its future growth plans.”

The listing rules of the Securities and Exchange Board of India specify that transactions with a related party exceeding 10% of annual turnover of any of the two previous financial years, or 10 bln rupees, whichever is higher, were material in nature and the company was required to carry them out only if shareholders had given their approval.