Bayer CropScience Ltd Management Discussions

1. Overview of Indian Agriculture

India is one of the major players in the agriculture sector worldwide. The agriculture sector continues to be a vital part of economic development, contributing approximately 18.2% to overall GDP, as reported by the Ministry of Agriculture and Farmers Welfare (MoAFW) in its Economic Survey 2024-25. The sector has undergone significant transformation, improving the countrys food production and exports. Over the years, the Indian agriculture and food systems have exhibited remarkable resilience to complement the growing population and rising per capita income amidst global geopolitical instability. Agriculture is a crucial pillar of growth for India to become a developed nation.

The government has been making consistent efforts to enhance productivity, sustainability, and farmer welfare, leading to a rapid rise in investment in agricultural infrastructure such as irrigation facilities, warehousing, and cold storage. The Government of India has significantly increased budget allocations for agriculture, rising from Rs.11,915.22 Crore in 2008-09 to Rs.1,22,528.77 Crore in 2024-25, demonstrating its commitment to the sector (Source: Ministry of Finance, Union Budget 2025-26).

Rapid population growth and rising income levels have contributed to an increase in the demand for agricultural products. To meet this growing demand, the sector is being stimulated by the growing adoption of cutting-edge technologies, including Blockchain, Artificial Intelligence (AI), Geographic Information Systems (GIS), drones, and remote sensing, as well as the release of various e-farming applications. India is on the path to becoming self-sufficient in pulses with an unwavering focus on R&D.

2. Industry Overview

The macroeconomic environment plays a crucial role in shaping the performance of the agriculture industry in India. The Indian agriculture sector is characterized by its resilience and adaptability, with significant contributions from the crop protection industry, the seed industry, and advancements in digital farming technologies.

2.1 Crop Protection Industry

The Indian crop-protection industry is the worlds fourth-largest producer of crop-protection chemicals, significantly boosting agricultural production for both domestic markets and exports. In 2023, India emerged as the second-largest exporter of crop-protection chemicals, following China, with exports valued at $5.5 Billion (Source: MoAFW).

Despite this growth, the industry faces several challenges, including regulatory frameworks and low awareness among farmers regarding the effective use of crop-protection chemicals. The current consumption of crop protection products in India is relatively low at 0.60 Kg/ha, compared to 5 Kg/ha in the UK and 12 Kg/ha in Japan.

To address these challenges, a collaborative approach between the government and the private sector is essential for developing a safe, high-yielding, and sustainable agriculture sector. The increasing demand for food, driven by population growth and advancements in digital technologies, positions India favorably as a global manufacturing hub for crop-protection chemicals.

Moreover, the industry is increasingly focusing on sustainability by adopting practices such as integrated pest management and biopesticide development. The governments initiatives to promote sustainable agricultural practices and enhance productivity are expected to further strengthen the industrys growth trajectory.

2.2 Seed Industry

The Indian seed industry plays a vital role in enhancing agricultural productivity and ensuring food security. It encompasses a diverse range of crops, including cereals, pulses, oilseeds, and vegetables, with paddy, corn and wheat being dominant. The governments Sub-Mission on Seed and Planting Material (SMSP) aims to improve seed quality and production, significantly increasing Seed Replacement Rates (SRR) for key crops (Source: MoAFW).

Technological advancements, including hybrid seed development and biofortified varieties, are transforming the industry, helping to address challenges such as climate change and pest resistance. However, the sector faces issues like fragmented landholdings and limited access to quality seeds for smallholder farmers. Addressing these challenges is crucial for the continued growth of the seed industry and the overall agricultural sector.

2.3 Digital Farming

Digital farming is revolutionizing the agricultural landscape, leveraging technology to improve crop yield, efficiency, and sustainability. The governments Digital Public Infrastructure (DPI) initiative aims to enhance agricultural productivity by implementing digital technologies across the sector. This includes conducting digital crop surveys and utilizing data analytics to provide real-time information to farmers.

Precision agriculture technology plays a vital role in this transformation by enabling the precise application of inputs such as fertilizers, water, and pesticides. By utilizing tools like GPS, loT sensors, and remote sensing, farmers can monitor soil health, crop conditions, and environmental factors, allowing for data-driven decisions that maximize productivity while minimizing resource waste.

The National Digital Agriculture Mission (DAM) focuses on grassroots implementation, targeting farmers with Information and Communication Technologies (ICT)-based tools for expert advice and real-time solutions.

Digital tools are expected to streamline land records, financial transactions, and procurement, reducing disputes and enhancing policy efficiency. Other government initiatives furthering the digitization of the sector include the Kisan Suvidha app, satellite-based crop monitoring, weather monitoring systems, and drone technology. Digitization aims to provide timely, targeted information and services, ensuring farming becomes more profitable and sustainable, while enhancing the capability to deliver safe, nutritious, and affordable food for all.

3. Company Overview

Bayer CropScience Limited is a key player in the Indian agriculture industry. The Companys operations include four key business areas: Crop Protection, Seeds & Traits and Digital Farming.

Crop Protection: The Companys Crop Protection portfolio comprises a wide range of innovative chemical and biological pest management solutions. It also provides extensive customer service for modern and sustainable agriculture. The Company focuses on Insecticides, Fungicides, Herbicides, and Seed Growth under this category.

Seeds & Traits: Bayer hybrid seeds makes use of the natural genetic diversity within each crop family and can withstand environmental challenges like pests, disease, and drought while providing more choices for farmers. Bayers product portfolio consists of hybrid seeds for crops such as corn and paddy.

Digital Farming: Modern farming methods leverage technology to boost crop yields and efficiency while minimizing waste and environmental impact. These approaches use tools like remote sensing, IoT sensors, GPS, drones, AI, and data analytics to monitor and manage factors such as crop growth, soil health, and weather conditions. Digital can also add value in market linkage, financial inclusion, access to farm machinery and labor and removing information silos. At Bayer, we are committed to bringing digital innovations at scale to benefit farmers in smallholder markets as well through FarmRise_TM and various other digital applications.

Transformative Initiatives for Indian Farmers

The Company has distinguished itself by leveraging its proven capabilities in innovation-driven solutions, sophisticated processes and technologies, world-class services, and superior business models. It continues to work closely with Indian farmers to help them overcome agricultural challenges. Several transformative initiatives have been undertaken by the company to support Indian farmers. They include:

Better Life Farming: a multi-stakeholder partnership

As of 2024, more than 20 Million smallholder farmers across India were supported by Bayers agri-inputs, technologies, farm advisory, and digital solutions. One of the key programs that have helped us reach out to smallholder farmers and create a conducive eco-system is the Better Life Farming (BLF) Alliance, which works with partners across the agri-value chain to support smallholder farmers in developing economies to increase crop yields and farm incomes. The BLF Alliance has global partners that include Bayer with its expertise in seeds, crop protection, and agronomy; IFC, the development finance institution for impact assessment; and Netafim for drip irrigation technologies.

The BLF initiative has led to increased crop yields, and farm incomes among participating farmers while keeping an eye on water usage and integrated farm management. The initiative strongly aligns with the UN Sustainable Development Goals and strives to increase food security and alleviate poverty. It further promotes gender equality, sustainable agricultural practices and meaningful public-private partnerships.

The BLF Alliances agri-entrepreneurship model functions through BLF Centers run by local agri-entrepreneurs. At these centers, agri-entrepreneurs enable the transfer of technology to other smallholders on seeds, crop protection, crop nutrition, drip irrigation, mulching, etc. They also deliver services such as market linkages, access to inputs and crop advisory. Each center covers a group of 500 farmers from five to six nearby villages. These centers open up economic opportunities for smallholders by enabling knowledge and technology transfer on good agricultural practices (GAP) and delivering services such as market linkages, access to agri-inputs, financial solutions, and mechanization services as well as crop advisory.

Currently, over 1,200 BLF centers are operational in India, including over 85 empowered women agri-entrepreneurs. By the end of 2025, the BLF initiative aims to empower 0.6 Million smallholders in the Indian Subcontinent through access to modern agri-inputs and better public health. These smallholders will be served by 1,500 agri-entrepreneurs across horticulture, corn, and rice crops. The BLF Alliance has also adopted a gender-smart approach by promoting women agri-entrepreneurs to serve women smallholder farmers.

Food Value Chain Partnership

Food Value Chain Partnership is an innovative business model developed by Bayer to serve the needs of the food industry. The concept was introduced globally in 2005 and in India in 2007. Globally, there are 365 Food Value Chain Partnerships across 39 countries in 64 different crops. Bayers Food Value Chain Partnerships focus on collaboration between farmers, processors, exporters, and retailers to meet consumer demand for sustainable production of healthy, high-quality, and affordable food.

With its Food Value Chain Partnerships in India, Bayer provides farmers with innovative crop solutions and services, as well as advice on the optimal use of products and application technologies. It also helps farmers get certified and gain relevant knowledge and skills to successfully market their produce in local, regional, and international markets.

Project beneficiaries

• 60+ Food Chain Partnerships across 500,000 acres and 16 crops, benefiting 150,000 farmers.

• In 2024-25, Bayer conducted 56 Bayer Good Agricultural Practices (BayG.A.P.) training programs for 2,500 Indian farmers to help them learn good agricultural practices required for certification programs.

• Our top five Food Chain Partners in India by volumes include: Reliance Fresh (fruits & vegetables), PepsiCo (potato), LT Foods (rice), Fortune (rice) & ITC (hot peppers).

• Over the last six years, our Food Value Chain has been advancing thought leadership in sustainability and digital innovation and expanding partner engagement through emerging value pools such as bioethanol and silage - strengthening our reputation and outreach across the ecosystem.

Bayer Learning Center

In smallholder geographies, farm income and return on investment decreases due to inadequate crop performance. This is often due to a lack of appropriate agronomic advice, as most farmers depend on fellow farmers or channel partners for crop management advisory. To provide the right agronomic advice, Bayer piloted the Bayer Learning Centers (BLC) concept in 2020. Currently, there are over 54 BLCs established across India for single and multiple crops.

The centers are also digitally-enabled to support live telecasting that can deliver consistent, high-quality communication complementing the conventional methods such as in-house training, learning center visits, etc. Through digital channels, we reached out to over 0.25 Million stakeholders.

This initiative aims to provide seamless knowledge transfer, confidence, and competency building for farmers as well as employees. The centers are designed to showcase product performance, technical positioning of innovations, crop system interventions, agronomy practices, etc. Academia & Research Associates from State Agriculture Universities and Officials from the Department of Agriculture have also participated and appreciated Bayers effort in developing such platforms.

Advancing Regenerative Agriculture in the field

Farmers livelihoods are increasingly challenged by the changing climate, limited natural resources, and growing societal demands. Together with farmers, we continually seek to move agriculture forward, with our eyes on a more sustainable future. This comes to life through Bayer Forward Farming, a knowledge platform that fosters dialogue and demonstrates regenerative agriculture system blocks in practice, yielding nature-positive outcomes while increasing productivity & farmer income.

On Forward Farms around the world, farmers, value chain partners, academia, scientists and civil society engage in dialogue and experience modern sustainable agriculture first-hand. The Bayer Forward Farm in India demonstrates innovative farming techniques tailored to the needs of ~150 Million smallholder farmers in the country, with a particular focus on sustainable rice cultivation, thus promoting the transition towards regenerative agriculture.

Across the Forward Farming network, Bayer partners with independent farmers to show how a holistic system approach to tailored solutions, digital tools and modern practices, and partnerships are enabling farmers to run successful businesses while providing enough food for a growing population, and in a way that generates positive outcomes for nature. Bayer currently operates a network of 29 ForwardFarms in 14 countries.

Product Stewardship

Supporting our customers and partners in the safe handling of our seed and crop protection products is the cornerstone of our product stewardship strategy. Bayer markets crop protection products, seeds, and services, which have been granted regulatory approval by the concerned central and state authorities. All our crop protection products are safe for the operator and the environment when used in accordance with label instructions. We also observe the International Code of Conduct on Pesticide Management of the United Nations Food and Agriculture Organization (FAO). The principles of this code cover the entire life cycle of a product or technology, from its development to its application and beyond.

Our product stewardship measures also include displaying product information of the highest mandated standards and transparency in line with the law of land for labeling of our products. In addition to product information, it also offers key information such as Direction for Use (DFU) that enables our customers to utilize our products in ways that generate maximum value for their enterprises, including safety standards.

The Company continues to offer regular training and awareness programs to help farmers identify and purchase authentic crop protection products in a developing digital ecosystem and

4. Financial and Operational Performance

Financial Performance including ratio analysis

In financial year 2024-25, the Companys Revenue from Operations increased by 7% to Rs.54,734 Million, compared to Rs.51,062 Million in the previous year. Profit Before Tax stood at Rs.7,074 Million, compared to Rs.9,414 Million in the previous year.

Ratio Analysis

Ratio	Formula	Apr24- Mar25	Apr23- Mar24	Deviation (%)
Debtors Turnover Ratio (times)	[Revenue from Operations/Average Trade receivables]	5.7	5.3	8%
Inventories Turnover Ratio (times)	[COGS/Average Inventories]	1.7	1.7	0%
Interest Coverage Ratio (times)	[EBIT/Finance Cost]	42.6	49.0	-13%
Current Ratio (times)	[Current Asset/Current Liability]	2.0	2.4	-17%
Debt Equity Ratio (times)	[Debt/Shareholders Equity]	N.A	N.A.	-
Operating Profit Margin Ratio (%)	[EBIT/Revenue from Operations]	13.2%	18.8%	-30%
Net Profit Margin Ratio (%)	[Profit After Tax/Revenue from Operations]	10.4%	14.5%	-28%
Return on Net Worth (%)	[Profit for the year (before exceptional items and after tax)/Net Worth]	19.9%	26.0%	-23%

To cater to the evolving needs of the farmers. Bayer has launched a digital agriculture platform “AgrowSmart” - a one-stop agro solution that delivers localized best-in-class crop advisory on seeds & traits, crop protection solutions and provides agronomic insights to both internal and external stakeholders in the parameterized form to support business and sustainability goals. The crop protection products now have a QR code in each of the label to address counterfeiting issues.

Supporting our customers and partners in the safe handling of our seed and crop protection products is a focus of our product stewardship through regular training and awareness programs to help farmers identify and purchase authentic crop protection products. Training programs also focus on the safe & responsible use of crop protection products and the proper use of Personal Protection Equipment (PPE).

Operational Performance

Crop Protection: Our focus continues to be on liquidation, which is driven by crafting customer-centric messages and creating brand awareness at scale amongst farmers. These efforts have delivered a modest growth in liquidation. Despite challenges such as higher input costs, our strategic focus on channel inventory has ensured sustained market outperformance. Further, this has helped us to be resilient to market conditions and drive the right product at the right time. Despite the challenges of a difficult monsoon season during the year, farmers could still optimize their investments because of our vast portfolio mix. We continued to cater to smallholder farmers through our ‘Differentiated Portfolio solutions.

Seeds & Traits: High-quality seeds play a critical role in determining yield and outcomes. Rice and Corn, as the top two cereal crops in the country, are key to ensuring food, feed, and fuel security. With land being a finite resource and demand steadily rising, we are focused on improving crop yields through high-performing hybrid seeds to support farmers more effectively.

Our Seed business continued to grow on the back of strong customer acceptance, expanded acreages, and successful new hybrid launches. We also saw increased demand for existing high-value hybrids. This combination, along with rising corn demand and favorable commodity prices, contributed to strong business performance.

In 2024-25, the Company successfully launched the following new products and hybrid seeds in corn and rice:

DKC7240: DEKALB? 7240 is our new addition to the early maturity corn hybrids to serve the needs of the customers in the states of Rajasthan, Uttar Pradesh, Madhya Pradesh, Himachal Pradesh, where this fits well in the crop rotation. DEKALB? 7240 offers high-quality grains with yield punch in the early maturity segment.

DKC9247: DEKALB? 9247 is our new offering for the farmers of Karnataka, Telangana, Andhra Pradesh, Tamil Nadu, Madhya Pradesh, and Maharashtra. DEKALB? 9247 offers attractive grain color with good tip filling and serves the farmers of the South and West states in both Kharif and Rabi seasons.

DKC9248: DEKALB? 9248 is our latest offering to our Spring corn farmers in the states of Punjab and Uttar Pradesh. This is one of the best hybrids for the Spring season, offering very high yields to meet the customer needs of our farmers in these states with cylindrical cobs and a high shelling percentage.

Arize 6555 ST: A new rice hybrid designed for the mid-early duration segment across Uttar Pradesh, Bihar, Jharkhand, and Chhattisgarh. This hybrid offers high yield potential with a maturity window of 125-128 days and comes equipped with a native trait for Bacterial Leaf Blight (BLB) tolerance.

5. Opportunities and Outlook

With global food demand projected to rise by 68% by 2050, Indian agriculture must rapidly evolve to meet rising consumption, climate challenges, and the push for sustainability. Transformative shifts, driven by regenerative practices, advanced technologies, and market diversification, position India not only to secure national food needs but also to lead globally in sustainable agriculture.

Regenerative Agriculture

Regenerative agriculture is vital to the future of farming in India. Practices like no-till farming, crop rotation, and agroforestry are essential for rehabilitating the 29% of land in India that is currently degraded and for strengthening the resilience of its agricultural systems. These techniques also support Indias goal of achieving net-zero emissions by 2070. However, widespread adoption remains limited due to concerns about yield reductions and cultural barriers. Overcoming these challenges will require focused financial incentives, comprehensive farmer education, and supportive policies.

Water Conservation

With agriculture consuming over 85% of freshwater, efficiency is urgent. Methods like Direct-Seeded Rice (DSR) and Alternate Wetting and Drying (AWD) cut water use by 30%. Government programs such as Per Drop More Crop are accelerating micro-irrigation adoption to address water stress in key farming regions.

Technology and Public-Private Partnerships

Digital tools such as drones, AI, satellite data are transforming decision-making and input use. Platforms like the Governments AgriStack and FarmRise_TM from Bayer provide farmers with advisories and market access. Public-private partnerships are key to scaling innovation and delivering last-mile support to smallholders.

Diversification and High-Value Crops

A move from cereal-heavy farming to high-value crops like fruits, vegetables, and spices are driving better incomes. Horticulture now exceeds foodgrain output. Government support and private investment in post-harvest infrastructure are helping farmers access export markets and meet rising domestic demand.

Evolving Consumer Demands

Agriculture is expanding into biofuels, feed, pharma, and sustainable materials. Urban demand for traceable, health-focused produce is rising. Farmers adopting these trends are securing better prices and tapping new markets, reshaping value chains around sustainability and transparency.

Financial Inclusion and Value Chain Integration

Digital finance, insurance (PMFBY), and accessible credit are enabling tech adoption. Over 10,000 Farmer Producer Organizations (FPOs) are improving price realization and reducing intermediaries. FPOs are key to driving inclusive, tech-enabled growth.

Addressing Nutritional Security

Despite being a major producer, India faces nutrition gaps. Aligning productivity with nutrition-sensitive crops like pulses and millets and improving logistics and fortified food access is essential to ensure dietary diversity.

Challenges and Imperatives for Scale

Fragmented landholdings, limited skills, and resource constraints must be addressed. Innovations must scale beyond pilots through integrated policy support, climate-smart subsidies, farmer training, and inclusive financing. Speed and scale are vital for national impact.

The Road Ahead

To feed 1.6 Billion people by 2047 and lead globally, India must merge tradition with technology. Regenerative agriculture, digitization, water-smart practices, and crop diversification provide a blueprint for resilient, inclusive growth.

Through sustained public-private collaboration and farmer-first innovation, India can shape the global future of agriculture - producing more, restoring nature, and advancing sustainable food systems for generations to come.

6. Risks and Concerns

The Company has developed a comprehensive framework of robust mechanisms and processes to identify risks that may negatively impact its operations. It endeavors to review and identify threats and formulate mitigating measures to curtail them within set timeframes. It has well-placed risk monitoring systems for swift response to safeguard itself from the permanent loss of capital and ensure sustenance of operational performance.

7. Internal Control Systems

The Company has appropriate internal control systems for business processes with regard to its operations, financial reporting and compliance with applicable laws and regulations. The Audit Committee approves the Internal Audit Plan and internal audits are conducted at regular intervals across various locations and processes in line with the approved plan. Audit observations and follow-up actions are discussed by the internal audit team with the management of the company as well as the audit committee.

8. Cautionary Statement

The statements in the Management Discussion & Analysis, describing the Companys objectives, expectations and forecasts may be forward-looking within the meaning of applicable securities laws and regulations. The actual results may differ from those expressed or implied, depending upon the economic and climatic conditions, government policies and other incidental factors.

For and on behalf of the Board of Directors	Vinit Rajesh Jindal
For Bayer CropScience Limited	Executive Director & CFO
Simon-Thorsten Wiebusch	(DIN: 10849465)
Vice Chairman & Managing Director and CEO	Mumbai
(DIN:08335591)
Mumbai
May 26, 2025