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Directors Report of Rallis India Ltd.

Mar 31, 2015

TO THE MEMBERS OF RALLIS INDIA LIMITED

The Directors hereby present their Sixty-seventh Annual Report on the business and operations of the Company and the fnancial accounts for the year ended 31st March, 2015.

FINANCIAL RESULTS Rs.in crores Standalone Consolidated 2014-15 2013-14 2014-15 2013-14

Revenue from operations (Gross) 1,622.16 1,633.57 1,925.53 1,849.28

Excise Duty (103.69) (102.72) (103.69) (102.72)

Revenue from operations (Net) 1,518.47 1,530.85 1,821.84 1,746.56

Other Income 1.72 5.76 4.16 6.38

1,520.19 1,536.61 1,826.00 1,752.94

Profit/ (-) Loss before Finance cost,

Depreciation and Tax 255.13 253.07 281.30 267.67

Finance Costs (4.79) (8.05) (10.13) (12.60)

Depreciation (44.59) (35.97) (49.58) (40.66)

Profit before Tax 205.75 209.05 221.59 214.41

Provision for Tax (56.47) (58.32) (56.45) (58.32)

Deferred Tax (3.87) (4.37) (5.34) (3.42)

Profit for the year before minority

interest 145.41 146.36 159.80 152.67

Minority Interest - - 2.58 0.80

Profit for the year 145.41 146.36 157.22 151.87

Balance of Profit brought forward from previous year 361.90 284.80 366.41 283.80

507.31 431.16 523.63 435.67

Appropriations

Transfer from/ (to) General Reserve (14.54) (14.64) (14.54) (14.64)

Interim Dividend (19.45) (19.45) (19.45) (19.45)

Income Tax on Interim Dividend (3.89) (3.31) (3.89) (3.31)

Proposed Equity Dividend (29.17) (27.23) (29.17) (27.23)

Income tax on Equity Dividend (5.83) (4.63) (5.83) (4.63)

Depreciation on transition to Schedule II of the Companies Act, 2013 (2.37) - (2.37) -

Balance Profit/(-) Loss carried forward to Balance Sheet 432.06 361.90 448.38 366.41

Footnote:

Figures have been rounded off to crores.

The Company proposes to transfer an amount of Rs. 14.54 crores to the General Reserves. An amount of Rs. 70.16 crores is proposed to be retained in the Statement of Profit and Loss.

DIVIDEND

The Board of Directors had declared an interim dividend ofRs. 1/- per share (100%) on the Equity Shares of the Company, in October 2014. The Directors are pleased to recommend a final dividend ofRs. 1.50 per share (150%) on the Equity Shares. This will take the total dividend for the year toRs. 2.50 per share (250%) (Previous yearX 2.40 per share, i.e. 240%). If the final dividend, as recommended above, is declared by the Members at the Annual General Meeting, the total outflow towards dividend on Equity Shares for the year would be Rs. 58.34 crores (including dividend tax) (Previous YearX 54.62 crores).

SHARE CAPITAL

The paid up Equity Share Capital as on 31st March, 2015 was Rs. 19.45 crores. During the year under review, the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company. As on 31st March, 2015, none of the Directors of the Company hold shares of the Company.

COMPANY PERFORMANCE

The Company achieved a new landmark in revenues, crossing the Rs. 1,900 crores milestone on a consolidated basis. The Company''s profit before tax on a consolidated basis is Rs. 221.59 crores during the year, as compared to Rs. 214.41 crores in the previous year, an increase of 3.4% over the last year. The Company earned a net profit ofRs. 157.22 crores, as against a net profit ofRs. 151.87 crores in the previous year, on a consolidated basis.

OPERATIONS

(1) CROP PROTECTION

The financial year 2014-15 witnessed many swings in weather pattern throughout the year, leading to tough market conditions for agri input businesses. The south-west monsoon turned out to be unfavourable, with a delayed set-in coupled with deficient rainfall all through the season. This set back Kharif operations in many parts of the country, impacting sowing of key crops such as paddy, cotton, oilseeds etc. Both the temporal and spatial distribution of rainfall was poor, affecting the acreage as well as crop yields for Kharif. While the cumulative average south-west monsoon was deficient by 12%, late rains raised the hope of a good Rabi crop. Though the Rabi season started on a promising note, weather disturbances in the form of frequent unseasonal rains and hailstorms impacted the quality and quantum of standing crops across the western, northern and central parts of the country.

The shortfall in monsoon led to a 7% drop in Kharif grain output. According to estimates by the Government, the country''s grain production is expected to decline by 3.2% to 257.07 million tonnes in the 2014-15 crop year. Agriculture and allied sectors'' growth is estimated at 1.1% this fiscal, down from 3.7% in the previous year, due to decline in production of food grains and oilseeds.

Despite challenging market conditions, the branded Domestic Formulation Business registered a growth during the year. Keeping to the proposition of offering relevant solutions to the Indian farming community, your Company introduced four new products in the domestic market. These are:

HUNK, first time ever launch of a high purity product. It is a solution for larvae and sucking pests in paddy and other crops.

ORIGIN, first ever insecticide and fungicide combination product in India, it is a solution for leaf folder and sheath blight in paddy crop.

DUTON, first time ever launch at the same time as the inventor Company, a post emergent herbicide for paddy crop.

BLEND, a unique fungicide combination product for control of downy mildew disease in grapes.

New sales Units including regional, area sales offices and territories were created to cater to the needs of customers more effectively and increasing reach and penetration. The sales team has optimally utilized available resources during the year in achieving growth targets. The initiatives introduced by the Company during previous years, such as EAGLE (Expansion and Aggressive Growth through Leadership and Excellence), RKK (Rallis Kisan Kutumb) and SAMPARK have now become a way of life for the sales and marketing team and are being interlinked for more effective results. These drive market access and customer connect activities. The RKK data is being utilized in a major way in establishing farmer connect. Channel finance and channel partner studies have been introduced during the year for channel optimization. E-Bandhan, for enhancing connect between Rallis dealers and the Company, has been introduced.

The International Business Division grew during 2014-15, contributing to 28% of overall revenues of the Company. This performance is noteworthy in the wake of varying demands in the different crop protection segments during the year. A number of registrations were obtained during the year and the International Business Division commercialized two products in different geographies. Contract Manufacturing Business also grew, led by higher volume sales in new geographies. The Company''s effort to augment its Contract Manufacturing Business is receiving encouraging response, and several evaluations are under progress. One new product was also commercialized during the year.

(2) NON-PESTICIDE PORTFOLIO (NPP)

Your Company''s efforts in building a Non-Pesticide Portfolio to cater to the changing needs of the farmers and agriculture, gained momentum during the year. The share of NPP sales was 33% of the total revenue. The Non-Pesticide Portfolio gives an opportunity to the Company to serve the emerging needs of the farming community, by leveraging its traditional connection with the farmers. This enables the farmers to look at the Company as a solution for all their agriculture related needs.

During the year, your Company has taken several steps to strengthen the non-pesticide portfolio business; one of them is appointing dedicated Managers to focus on this business.

Seeds and Plant Growth Nutrients: The Seeds business, largely driven by the subsidiary Company Metahelix Life Sciences, performed well during the year. Sales grew by 37.9%, to Rs. 309.99 crores during 2014-15, while profits, at Rs. 16.54 crores, rose by 79.3%. This business recorded impressive gains in the market share, particularly in hybrid paddy and maize seeds.

In Plant Growth Nutrient (PGN) business, the Company''s strategy is to identify, create, establish and scale up brands quickly, for achieving profitable and sustainable growth.

Your Company has launched a new solution AMPLUS and AMPLUS ACTIVE. It is an innovative and modern technology HYT™ based microbial bio product and helps in enhancing the soil fertility by fixing atmospheric nitrogen, thus decomposing organic wastes and thereby stimulating plant growth.

The Company offers several products across all the sub categories of PGN. Ralligold, Tata Bahaar, Tata Upahaar RDS, Solubor, Tracel and Gluco Beta have become prominent brands in the Indian PGN segment. During 2014-15, the Company successfully established and scaled up the sales of its new organic product Gluco Beta. This was possible through use of innovative marketing approaches.

Agri Services: Agri Services portfolio comprises the organic manure product GeoGreen, Samrudh Krishi (SK) initiative, MoPu (More Pulses) initiative and agri implements. During the financial year, sales of GeoGreen organic manure increased significantly, albeit on a small base. SK initiative continued to make good progress on grapes, with grapes farmer enrolment registering handsome improvement. The MoPu initiative was extended to Madhya Pradesh in addition to Maharashtra and Karnataka. While both SK and MoPu initiatives continue to add significant value to farmers, climate related uncertainties especially towards the latter stage of crop, affected the final output. Our Agri implements presence currently consists of sprayers. During the year, we have introduced state-of-the-art battery and power sprayers for test marketing in a few key markets.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with Accounting Standard 21 issued by the Institute of Chartered Accountants of India, form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company.

The annual accounts of the subsidiaries and related detailed information will be kept at the Registered Office of the Company, as also at the registered offices of the respective subsidiary companies and will be available to investors seeking information at any time.

The consolidated financial results reflect the operations of the following subsidiaries: Metahelix Life Sciences Ltd., Zero Waste Agro Organics Ltd. and Rallis Chemistry Exports Ltd.

The Company has adopted a Policy for determining Material Subsidiaries in terms of Clause 49 of the Listing Agreement. The Policy, as approved by the Board, is uploaded on the Company''s website at the web link: http://www.rallis.co.in/Material_Subsidiaries_Policy.htm

PERFORMANCE OF SUBSIDIARIES

(1) Metahelix Life Sciences Ltd.

Net sales of Metahelix Life Sciences Ltd. (Metahelix) increased from Rs. 224.81 crores in the previous year to Rs. 309.99 crores during 2014-15. Net profit during the period is Rs. 16.54 crores, as compared to a net profit ofRs. 9.23 crores in the previous year.

Metahelix has performed well during the year, by significantly growing volumes in all the crops and improving its market share in each of the key market segments. The farmer base for Metahelix increased by more than a million to about 3.5 million farmers and its channel reach also improved significantly during the year. Metahelix is also exploring opportunities in select countries in the South East Asia Region, which would have a demand for crops of its interest such as corn and paddy.

(2) Zero Waste Agro Organics Ltd.

During the year, the Company has acquired additional Equity Shares in Zero Waste Agro Organics Ltd. (ZWAOL), pursuant to the Share Subscription and Share Purchase Agreement dated 23rd April, 2012. Consequently, the shareholding of the Company in ZWAOL has increased from 51.02% to 73.59%.

Net sales of ZWAOL increased from Rs. 8.09 crores in the previous year to Rs. 11.35 crores during 2014-15. Net loss during the period is Rs. 0.92 crores, as compared to a net loss ofRs. 2.45 crores in the previous year.

During the year, ZWAOL has successfully established its organic compost product under the brand name GeoGreen. GeoGreen is scientifically manufactured organic compost derived out of wastes from sugar industry which helps in improving deteriorating soil health and driving agriculture productivity. GeoGreen has been introduced on key cash crops such as grapes, banana, vegetables, pomegranates, arecanut, ginger, potato, apple including commercial crops like sugarcane and cotton. The product has been introduced in many States and has been well accepted by the farmers.

(3) Rallis Chemistry Exports Ltd.

The Company has not commenced commercial activities since incorporation and currently is not operational.

During the year under review, no Company has become or ceased to be a subsidiary of the Company. The Company does not have any associate or joint venture companies. A statement containing the salient features of the financial position of the subsidiary companies in Form AOC.1 is annexed as Annexure A.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has made an investment during the year in acquiring an additional 16,627 Equity Shares in its subsidiary, Zero Waste Agro Organics Ltd., at Rs. 7,719/- per share, aggregating to Rs. 12.83 crores. The Company has not given any loans or guarantees or provided any security during the year.

FIXED DEPOSITS

Your Company has not accepted any public deposits during the financial period under review.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were on an arm''s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 (''the Act'') and the Listing Agreement. There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholder approval under Clause 49 of the Listing Agreement.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company''s website at the web link: http://www.rallis.co.in/Related_Party_Transactions_Policy.htm

Details of the transactions with Related Parties are provided in the accompanying financial statements.

RISK MANAGEMENT

The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Clause 49 of the Listing Agreement. It establishes various levels of accountability and overview within the Company, while vesting identified managers with responsibility for each significant risk.

The Internal Audit Department facilitates the execution of Risk Management Practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting. Through this programme, each Function and Unit addresses opportunities and risks through a comprehensive approach aligned to the Company''s objectives. The Company has laid down procedures to inform the Audit Committee as well as the Board of Directors about risk assessment and management procedures and status.

Sustainability is embedded in the Corporate Enterprise Risk Management programme, which gives an opportunity to increase the effectiveness of risk management practices and for improving business efficiency. The Company''s social and environmental policies correlate strongly with the risk management strategy and ultimately the financial performance.

This risk management process, which is facilitated by internal audit, covers risk identification, assessment, analysis and mitigation. Incorporating sustainability in the process also helps to align potential exposures with the risk appetite and highlights risks associated with chosen strategies. The current risk slate and the comprehensive risk policy have been further redefined during the year. The major risks forming part of the Enterprise Risk Management process are linked to the audit universe and are covered as part of the annual risk based audit plan.

INTERNAL CONTROLS SYSTEMS AND ADEQUACY

The Company''s internal audit systems are geared towards ensuring adequate internal controls commensurate with the size and needs of the business, with the objective of efficient conduct of operations through adherence to the Company''s policies, identifying areas of improvement, evaluating the reliability of Financial Statements, ensuring compliances with applicable laws and regulations and safeguarding of assets from unauthorized use.

Details of the internal controls system are given in the Management Discussion and Analysis Report, which forms part of the Directors'' Report.

Appointment of Directors:

At the Annual General Meeting of the Company held on 30th June, 2014, the Members had approved the appointment of Mr. B. D. Banerjee, Mr. E. A. Kshirsagar, Mr. Prakash R. Rastogi, Dr. Y. S. P. Thorat and Dr. (Mrs.) Punita Kumar-Sinha as Independent Directors for a term of five years or until their completing 75 years of age, whichever is earlier.

All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Clause 49 of the Listing Agreement entered into with the Stock Exchanges. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management.

No Director or Key Managerial Person has been appointed or has retired or resigned during the year.

In accordance with the provisions of Section 152 of the Act and in terms of Article 112 (2) of the Articles of Association of the Company, Mr. Bharat Vasani retires and is eligible for re-appointment.

Governance Guidelines:

The Company has adopted Governance Guidelines on Board Effectiveness. The Governance Guidelines cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Director term, retirement age and Committees of the Board. It also covers aspects relating to nomination, appointment, induction and development of Directors, Director remuneration, Subsidiary oversight, Code of Conduct, Board Effectiveness Review and Mandates of Board Committees.

Procedure for Nomination and Appointment of Directors:

The Nomination and Remuneration Committee is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements.

The Nomination and Remuneration Committee conducts a gap analysis to refresh the Board on a periodic basis, including each time a Director''s appointment or re-appointment is required. The Committee is also responsible for reviewing and vetting the CVs of potential candidates vis-à-vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.

Criteria for Determining Qualifications, Positive Attributes and Independence of a Director:

The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and Clause 49 of the Listing Agreement.

Independence: In accordance with the above criteria, a Director will be considered as an ''Independent Director'' if he/ she meets with the criteria for ''Independent Director'' as laid down in the Act and Clause 49 of the Listing Agreement.

Qualifications: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age and gender. It is also ensured that the Board has an appropriate blend of functional and industry expertise. While recommending the appointment of a Director, the Nomination and Remuneration Committee considers the manner in which the function and domain expertise of the individual will contribute to the overall skill-domain mix of the Board.

Positive Attributes: In addition to the duties as prescribed under the Act, the Directors on the Board of the Company are also expected to demonstrate high standards of ethical behavior, strong interpersonal and communication skills and soundness of judgment. Independent Directors are also expected to abide by the ''Code for Independent Directors'' as outlined in Schedule IV to the Act.

Annual Evaluation of Board Performance and Performance of its Committees and of Directors:

Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.

The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors.

The Board''s functioning was evaluated on various aspects, including inter alia degree of fulfillment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning.

Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Managing Director & CEO.

Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.

The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors.

The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights, learning and action points with respect to the evaluation were presented to the Board.

REMUNERATION POLICY

The Company has adopted a Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and Clause 49 of the Listing Agreement.

The philosophy for remuneration of Directors, Key Managerial Personnel and all other employees of the Company is based on the commitment of fostering a culture of leadership with trust. The Remuneration Policy of the Company is aligned to this philosophy.

The Nomination and Remuneration Committee has considered the following factors while formulating the Policy:

(i) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

(ii) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(iii) Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

It is affirmed that the remuneration paid to Directors, Key Managerial Personnel and all other employees is as per the Remuneration Policy of the Company. Details of the Remuneration Policy are given in the Corporate Governance Report. None of the Directors of the Company, who may be a Managing or Whole-time Director of the Company''s holding or subsidiary companies, have received any remuneration, including commission from the Company during the year.

Details of the Remuneration Policy are given in the Corporate Governance Report.

BOARD AND COMMITTEE MEETINGS

A calendar of Board and Committee Meetings to be held during the year was circulated in advance to the Directors. Eight Board Meetings were convened and held during the year.

The Board has constituted an Audit Committee with Mr. E. A. Kshirsagar as Chairman and Mr. B. D. Banerjee, Mr. Prakash R. Rastogi and Dr. Y. S. P. Thorat as Members. There have not been any instances during the year when recommendations of the Audit Committee were not accepted by the Board.

Details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Agreement.

DIRECTORS'' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2014-15.

Accordingly, pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CORPORATE SOCIAL RESPONSIBILITY

At Rallis, Participatory Sustainable Development has been an integral part of the Company''s Community Development Policy. The Company has adopted an Integrated Sustainability Model, representing the Social and Environment aspects.

The Board has constituted a Corporate Social Responsibility Committee headed by Mr. Bharat Vasani as Chairman, with Dr. Y. S. P. Thorat and Mr. V. Shankar as Members. The Company has adopted a Corporate Social Responsibility (CSR) Policy in compliance with the provisions of the Act. As part of its CSR initiatives, the Company has undertaken projects in the areas of Natural Resource Management, including water conservation programmes (Jal Dhan) through water shed and water harvesting and improving soil health; Enhancing Employability through Skill Development and Education, including Affirmative Action initiatives through its RUBY (Rallis Ujjwal Bhavishya Yojana) and TARA (Tata Rallis Women Empowerment Initiative) programmes; Greening projects, including afforestation drive in designated areas at Anegaon in Maharashtra and others States; and health and sanitation projects in Gujarat and Maharashtra.

The above projects are in accordance with Schedule VII of the Act. The Company has spent Rs. 2.13 crores towards the CSR projects during the current Financial Year 2014-15.

The average net profit of the Company, computed as per Section 198 of the Act, during the three immediately preceding fnancial years was Rs. 174.88 crores. It was hence required to spend Rs. 3.50 crores on CSR activities during the Financial Year 2014-15, being 2% of the average net profits of the three immediately preceding financial years. Since some of the projects undertaken by the Company are ongoing projects where the Company will have a continuing engagement over 2 to 3 years, part of the spend out of the total allocated budget for such projects will be in the next year. To that extent, the Company has an unspent amount ofRs. 1.37 crores in its CSR spend for the current year, which will be spent in the coming years.

The Annual Report on CSR activities is annexed as Annexure B.

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment (POSH) Committee, to inquire into complaints of sexual harassment and recommend appropriate action.

The Company has not received any complaint of sexual harassment during the financial year 2014-15.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

AUDITORS

(1) Statutory Auditors:

M/s. Deloitte Haskins & Sells LLP (DHS) are the statutory auditors of the Company and hold office till the conclusion of the forthcoming Annual General Meeting (AGM). DHS have furnished a certificate, confirming that if re-appointed, their re-appointment will be in accordance with Section 139 read with Section 141 of the Act. Pursuant to the provisions of the Act and the Rules made there under, it is proposed to appoint DHS as the statutory auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the 69th AGM to be held in the year 2017, subject to ratification of their appointment at the AGM to be held in 2016. Members are requested to consider the re-appointment of DHS and authorize the Board of Directors to fix their remuneration.

(2) Cost Auditors:

M/s. N. I. Mehta and Co., Cost Accountants have been appointed to conduct Cost Audits relating to Insecticides (Liquid, Solid and Technical Grade) and Chemicals (Plastics and Polymers) of the Company for the year ending 31st March, 2016. Pursuant to the provisions of Section 148 of the Act read with The Companies (Audit and Auditors) Rules, 2014, Members are requested to consider the ratification of the remuneration payable to M/s. N. I. Mehta & Co.

The due date for filing of the Cost Audit Report for the financial year 2013-14 was 30th September, 2014. The Company has filed the Report with the Ministry of Corporate Affairs on 24th September, 2014.

(3) Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. Parikh & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended 31st March, 2015. The Secretarial Audit Report is annexed as Annexure C.

The Auditors'' Report and the Secretarial Audit Report for the financial year ended 31st March, 2015 do not contain any qualification, reservation, adverse remark or disclaimer.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed as Annexure D.

PARTICULARS OF EMPLOYEES AND REMUNERATION

The information required under Section 197 (12) of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure E.

The information required under Rule 5 (2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of the Report. In terms of the first proviso to Section 136 of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in form MGT.9 is annexed as Annexure F.

MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE

The Management Discussion and Analysis Report and the Report on Corporate Governance, as required under Clause 49 of the Listing Agreement, forms part of the Annual Report.

ACKNOWLEDGEMENT

Your Directors wish to thank all the employees of the Company for their dedicated service during the year. They would also like to place on record their appreciation for the continued co-operation and support received by the Company during the year from bankers, financial institutions, business partners and other stakeholders.

On behalf of the Board of Directors

R. GOPALAKRISHNAN Chairman Mumbai, 22nd April, 2015


Mar 31, 2014

The Directors hereby present their Sixty-sixth Annual Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS

Rs. Crores

Standalone Consolidated

2013-14 2012-13 2013-14 2012-13 Revenue from operations (Gross) 1633.57 1418.58 1849.28 1552.98 Excise Duty (102.72) (94.80) (102.72) (94.80) Revenue from operations (Net) 1530.85 1323.78 1746.56 1458.18

Other Income 5.76 11.45 6.38 11.74

1536.61 1335.23 1752.94 1469.92

Profit/ (-) Loss before Finance cost, Depreciation and Tax 253.06 214.68 267.66 222.31

Finance Costs (8.05) (12.52) (12.60) (18.49)

Depreciation (35.97) (28.81) (40.66) (31.53)

Profit before Tax 209.04 173.35 214.40 172.29

Provision for Tax (58.31) (38.72) (58.31) (38.72)

Deferred Tax (4.37) (15.25) (3.42) (14.77)

Profit for the year before minority interest 146.36 119.38 152.67 118.80

Minority Interest - - 0.80 0.21

Profit for the year 146.36 119.38 151.87 119.01 Balance of Profit brought forward from previous year 284.80 242.03 283.80 241.40

431.16 361.41 435.67 360.41

Appropriations

Debenture Redemption Reserve - (12.50) - (12.50)

Transfer from/ (to) General Reserve (14.64) (11.93) (14.64) (11.93)

Interim Dividend (19.45) (19.45) (19.45) (19.45)

Income Tax on Interim Dividend (3.30) (3.15) (3.30) (3.15) Proposed Equity Dividend (27.23) (25.28) (27.23) (25.28)

Income tax on Equity Dividend (4.62) (4.30) (4.62) (4.30)

Balance Profit/(-) Loss carried forward to Balance Sheet 361.92 284.80 366.43 283.80

DIVIDEND

The Board of Directors had declared an interim dividend of Rs.1/- per share (100%) on the Equity Shares of the Company, in October 2013. The Directors are pleased to recommend a final dividend of Rs.1.40 per share (140%) on the Equity Shares. This will take the total dividend for the year to Rs. 2.40 per share (240%) (Previous year 2.30 per share, i.e. 230%). If the final dividend, as recommended above, is declared by the Members at the Annual General Meeting, the total outflow towards dividend on Equity Shares for the year would be Rs. 54.60 Crores (including dividend tax) (Previous Year Rs.52.18 Crores).

COMPANY PERFORMANCE

The Company achieved a new landmark in revenues, crossing the Rs. 1,800 Crores milestone. The Company''s profit before tax on a consolidated basis, is Rs. 214.40 Crores during the year, as compared to Rs.172.29 Crores in the previous year, an increase of 24% over the last year. The Company earned a net profit of Rs. 151.87 Crores, as against a net profit of Rs.119.01 Crores in the previous year on a consolidated basis.

OPERATIONS

(1) CROP PROTECTION

The financial year 2013-14 started on a positive note, with predictions of a good monsoon. The industry performance was good in the first half of the year; your Company also registered a good growth and sales as well as collections were highest ever during the first half of the year. However, the third quarter did not prove to be conducive for the crop protection industry. The quarter started with Cyclone Phailin hitting the key coastal States in the very first fortnight. The cyclone badly damaged the Kharif crops like paddy, cotton, chili and Bengal gram in the States of Andhra Pradesh, West Bengal, Odisha and Bihar. This was further aggravated by the continuous rains that followed the cyclone. Overall, the rainfall also helped in improving reservoir levels.

Aided by a favorable monsoon and a supportive input supply environment, Indian agricultural production bounced back in the current year, after a year of low growth in the previous year when the monsoons delivered uneven and deficient rainfall. The advance estimates (as per NCAER) suggest that the growth rate of agriculture and allied sectors would be 4.6% in 2013-14 as against 1.4% in 2012-13. Although excess rainfall towards the end of the monsoon period in some parts of Eastern and Central India led to crop damage, the late rains helped improve prospects of the rabbi crops with reported increases in sown area of the rabbi crops. The first assessment of the overall production of crop output for the full year 2013-14 shows that food grain production for the year is expected to achieve a new record exceeding 263 million tonnes, as against 257 million tonnes in 2012-13. The overall contribution of agriculture and allied sectors to the Indian GDP is estimated to be 13.9% in 2013-14.

Among the commercial crops, the production of oilseeds is estimated to grow by 6% during the Kharif season of 2013-14, while the production of sugarcane and cotton is estimated to have grown by 1.4% and 4% respectively, during the agriculture year 2013-14. Among the horticulture crops, production of fruits and vegetables is expected to increase by 4.1% during the year 2013-14 over the previous agriculture year. Government rice stocks (including rice equivalent of un-milled paddy rice) on January 1, 2014, stood at 30.2 million tonnes compared to 29.7 million tonnes a year ago. In contrast, following a steep decline in Government wheat procurement this marketing year, Government wheat stocks have declined, with January 1, 2014 stocks at 31 million tonnes compared to 34.4 million tonnes a year ago.

Your Company has registered an overall double digit growth during the financial year 2013-14. This growth is driven by an all-round performance and in particular, rise in sales of megabrands.

The branded Domestic Formulation Business registered a good growth during the year over the previous year.

New sales Units including regional and area sales offices and teritories were created to cater to the needs of customers more effectively and increasing reach and penetration. The sales team has optimally utilized available resources during the year, in achieving growth targets. The initiatives introduced by the Company during previous years, such as EAGLE (Expansion and Aggressive Growth through Leadership and Excellence), RKK (Rallis Kisan Kutumb) and SAMPARK have now become a way of life for the sales and marketing team and are being interlinked for more effective results. The RKK data is being utilized in a major way in establishing farmer connect. Channel finance and channel partner study have been introduced during the year for channel optimization.

New growth business segments of the Company, such as Samruddh Krishi, MoPu (Grow More Pulses) and sprayer business have taken further roots and have integrated very well into our main crop protection business.

The International Business Division showed a significant growth over 2012-13 and continues to be above 30% of the overall revenue of the Company for the past two years. Brands launched in overseas markets during the year received encouraging response. International Business received new registrations and has further applied for a host of new registrations, which are expected to be received over the next 3 to 5 years. Order for one new contract manufacturing product was received and trials were conducted for more than five new contract manufacturing projects in the pilot plant at Dahej.

During the year, the Domestic Institutional Business focused on the sales of seed treatment chemicals and household pesticide products, which registered satisfactory growth during the year. The Company focused on the quality of sales, which was achieved by significant reduction of credit days and changing product mix.

(2) NON-PESTICIDE PORTFOLIO (NPP)

Your Company''s efforts in building a robust Non-Pesticide Portfolio of businesses, to cater to the changing needs of the farmers and agriculture, gained momentum during the year. The share of NPP sales was 31% of total revenue. The Non-Pesticide Portfolio gives an opportunity to the Company to serve the emerging needs of the farming community, by leveraging its traditional connection with the farmers. This enables the farmers to look at the Company as a solution for all their agriculture related needs.

During the year, the Company has taken several steps to strengthen the non pesticide portfolio business; one of them is appointing dedicated Managers to focus on this business.

Seeds and Plant Growth Nutrients: The Company''s acquisition of a majority stake in Metahelix Life Sciences (Metahelix), a research-led Seeds Company in December 2010, has started yielding results. In three years, the revenue of Metahelix has grown significantly, to reach Rs.180 crores during 2013-14, one of the highest growth rates among seed companies in the country. The Company plans to introduce new hybrids during 2014-15, including own Bt cotton hybrids, which will help in sustainable and profitable growth in the future.

In Plant Growth Nutrient (PGN) business, the Company''s strategy is to identify, create, establish and scale up brands quickly, for achieving profitable and sustainable growth. The Company offers several products across all the sub categories of PGN. Ralligold, Tata Bahaar, Tata Upahaar RDS, Solubor, Tracel and Gluco Beta have become prominent brands in the Indian PGN segment. During 2013-14, the Company successfully established and scaled up the sales of its new organic product Gluco Beta. This was possible through use of innovative marketing approach.

Agri Services: MoPu, the pulses productivity initiative of Rallis, under a Public Private Partnership (PPP) project with the Maharashtra Government, was evaluated by FICCI and improvement in pulses productivity recorded by target farmer groups was validated. This initiative was extended to Madhya Pradesh, Karnataka and Tamilnadu to cover over 3.5 lakh farmers. The farmer advisory service, Samrudh Krishi was expanded to cover more geographies. The Samrudh Krishi APEDA - GAP certified grapes were introduced for the first time to Indian consumers through the Tata Star Bazaar outlets in Mumbai and Pune, which has received a very positive response from both farmers and consumers. Farm mechanization: To address the issue of severe labour shortage faced by rice farmers, the Company deployed some rice transplanters in Odisha State, resulting in up to 15% higher paddy yields, and saving in the use of irrigation water.

Soil Conditioner: During the year, the Company has acquired additional stake of equity shares in Zero Waste Agro Organics Limited (ZWAOL), taking its shareholding in ZWAOL to 51.02%. ZWAOL is a Company manufacturing scientifically prepared organic compost, a soil conditioner. ZWAOL has recorded a four-fold growth in its sales volumes, as its high quality organic compost "GeoGreen" gained market acceptance.

Tata Rallis Agri Inputs Training Scheme (TRAITS): This initiative aims at promoting employability of non-graduate, rural youth from the farming background, by imparting them training in the Agri-marketing and crop advising field, to enable them to take up a career in Agri marketing and crop advising. TRAITS has helped in providing employment to and improving employability of rural unemployed youth with Agri background. This year, your Company extended TRAITS to Bhubaneswar in Odisha and Nalanda in Bihar.

RESEARCH & DEVELOPMENT

The Company''s Research and Development (R&D) Centre (Rallis Innovation Chemistry Hub - RICH) provides a unique opportunity for interaction and synergy to all sections of the R&D Department, resulting in greater efficiencies. Many multinational companies have visited the RICH facility for potential contract manufacturing and alliance opportunities.

A state-of-the-art Pilot Plant has been set up at Dahej to scale up the processes, which is the backbone of commercialization, developed by RICH.

RICH also worked jointly with Tata Chemicals'' Innovation Centre at Pune for developing nano based granules and slow release formulations to offer new solutions as innovative products to the farmer.

For the first time in India, the Company obtained the registration of a combination of an insecticide and a fungicide to offer a superior solution to the farmer.

INDUSTRIAL RELATIONS

The Ankleshwar Unit of the Company has 76 non management employees. The overall relations with these bargainable employees at Ankleshwar were cordial and harmonious during the year 2013-14. The number of employees on the rolls of the Company increased from 843 to 881 during the year.

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, to provide protection to employees at the workplace and for prevention and redressal of complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment (POSH) Committee, to inquire into complaints of sexual harassment and recommend appropriate action.

The Company has not received any complaint of sexual harassment during the financial year 2013-14.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

During the year, the Company has acquired additional stake of equity shares in Zero Waste Agro Organics Limited (ZWAOL), pursuant to the Share Subscription and Share Purchase Agreement dated 23rd April, 2012. Consequently, the shareholding of the Company in ZWAOL has increased from 22.81% to 51.02%. During the year, the Company has also acquired additional stake of equity shares in Metahelix Life Sciences Ltd. (Metahelix), pursuant to the Share Purchase Agreement dated 9th December, 2010. Consequently, the shareholding of the Company in Metahelix has increased from 77.02% to 80.5%.

The Ministry of Corporate Affairs, Government of India, has granted a general exemption to companies, by General Circular No.2/2011 dated 8th February, 2011, under Section 212 (8) of the Companies Act, 1956, from attaching individual accounts of subsidiaries with their annual reports, subject to fulfillment of certain conditions. Accordingly, the Board of Directors of the Company has, by resolution, given consent for not attaching the Balance Sheet, Statement of Profit and Loss and other documents of its subsidiaries in the Annual Report of the Company for the financial year ended 31st March, 2014.

However, the Consolidated Financial Statements of the subsidiaries (prepared in accordance with Accounting Standard 21 issued by the Institute of Chartered Accountants of India), form part of the Annual Report and are reflected in the Consolidated Accounts of the Company. In addition, the financial data of the subsidiaries have been furnished under Note No.37 to the Consolidated Financial Statements and forms part of this Annual Report.

The annual accounts of the subsidiaries and related detailed information will be kept at the Registered Office of the Company, as also at the head offices of the respective subsidiary companies and will be available to investors seeking information at any time.

The consolidated financial results reflect the operations of the following subsidiaries: Metahelix Life Sciences Ltd. (Metahelix), Zero Waste Agro Organics Ltd. and Rallis Chemistry Exports Ltd. Dhaanya Seeds Ltd., the wholly owned subsidiary of Metahelix has been amalgamated with Metahelix with effect from 1st April, 2013.

DIRECTORS

During the year, Dr. K. P. Prabhakaran Nair, Mr. H. R. Khusrokhan and Dr. Yoginder K. Alagh have retired as Directors of the Company, on reaching the retirement age under the guidelines for the retirement age of Directors adopted by the Company. The Directors wish to place on record their appreciation of the valuable services rendered by these Directors during their tenure as Directors of your Company.

Dr. Punita Kumar-Sinha has been appointed as Additional Director of the Company with effect from 26th March, 2014. Pursuant to the provisions of Section 161 of the Companies Act, 2013 (the ''Act'') and Article 116 of the Articles of Association of the Company, Dr. Kumar-Sinha vacates office and is eligible for appointment.

As per the provisions of Section 149 of the Act, which has come into force with effect from 1st April, 2014, an Independent Director shall hold office for a term up to five consecutive years on the Board of a company and is not liable to retire by rotation. In compliance with the provisions of Section 149 read with Schedule IV of the Act, the appointment of Mr. B. D. Banerjee, Mr. E. A. Kshirsagar, Mr. Prakash R. Rastogi, Dr. Y. S. P. Thorat and Dr. Punita Kumar-Sinha as Independent Directors is being placed before the Members in General Meeting for their approval. In the opinion of the Board, they fulfil the conditions specified in the Act and the Rules made there under for appointment as Independent Directors and are independent of the management. Members are requested to refer to the Notice of the Annual General Meeting and the Explanatory Statement for details of the qualifications and experience of the Directors and the period of their appointment. The Board commends the passing of the Resolutions at Item Nos. 5 to 9 of the Annual General Meeting Notice.

In accordance with Article 112(2) of the Articles of Association of the Company, Mr. R. Gopalakrishnan retires and is eligible for re-appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently, and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE AND INTERNAL AUDIT

The Internal Audit Department undertook a substantial number of internal audit reviews with a view to encompass a larger coverage of existing areas as well to tap new audit areas. This enhanced coverage has resulted in providing adequate assurance on compliances and sustenance of internal controls.

The processes of Enterprise Risk Management framework, as well as control mapping and testing over financial reporting controls under CEO/ CFO certification framework required under Clause 49 of the Listing Agreements with the Stock Exchanges, was well established.

A Report on Corporate Governance and the Management Discussion and Analysis Report, as required under Clause 49 of the Listing Agreement, forms part of the Annual Report.

AUDITORS

At the Annual General Meeting, Members will be required to appoint Auditors for the current year. M/s. Deloitte Haskins & Sells LLP, the existing Auditors have furnished a certificate, confirming that if re-appointed for the financial year 2014- 15, their re-appointment will be in accordance with Section 139 read with Section 141 of the Companies Act, 2013. The Members are requested to consider their re-appointment as Auditors of the Company for the current year and authorize the Board of Directors to fix their remuneration.

COST AUDITORS

M/s. N. I. Mehta and Co., Cost Accountants have been appointed to conduct Cost Audits relating to Insecticides (Technical Grade and Formulations), Fertilizers and Seeds of the Company for the year ending 31st March, 2015. Pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Rules made there under, Members are requested to consider the ratification of the remuneration payable to M/s. N. I. Mehta & Co.

The due date for filing of the Cost Audit and Compliance Reports for the financial year 2012-13 was 30th September, 2013. The Company has filed the Reports with the Ministry of Corporate Affairs on 23rd September, 2013.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988, the information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed.

PARTICULARS OF EMPLOYEES

The information required under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is provided in the Annexure forming part of the Report. In terms of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.

ACKNOWLEDGEMENT

Your Directors wish to thank all the employees of the Company for their dedicated service during the year. They would also like to place on record their appreciation for the continued co-operation and support received by the Company during the year from bankers, financial institutions, business partners and other stakeholders.

On behalf of the Board of Directors

R. GOPALAKRISHNAN

Chairman

Mumbai, 22nd April, 2014


Mar 31, 2013

TO THE MEMBERS OF RALLIS INDIA LIMITED

The Directors hereby present their Sixty-fifth Annual Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS

Rs. Crores

Standalone Consolidated

2012-13 2011-12 2012-13 2011-12

Revenue from operations (Gross) 1418.58 1260.07 1552.98 1353.70

Excise Duty (94.80) (78.82) (94.80) (78.82)

Revenue from operations (Net) 1323.78 1181.25 1458.18 1274.88

Other Income 11.45 7.50 11.74 6.87

1335.23 1188.75 1469.92 1281.75

Profit/ (-) Loss before Finance cost, Depreciation and Tax 214.68 204.76 222.31 209.83

Finance Costs (12.52) (10.37) (18.49) (14.59)

Depreciation (28.81) (27.11) (31.53) (28.66)

Profit/ (-) Loss before exceptional item 173.35 167.28 172.29 166.58

Exceptional item:

- Cessation cost - (17.19) - (17.19)

Profit before Tax 173.35 150.09 172.29 149.39

Provision for Tax (38.72) (38.18) (38.72) (38.19)

Deferred Tax (15.25) (10.52) (14.77) (10.51)

Profit for the year before minority interest 119.38 101.39 118.80 100.69

Minority Interest - - 0.21 (1.51)

Profit for the year 119.38 101.39 119.01 99.18

Balance of Profit brought forward from previous year 242.03 213.01 241.40 214.58

361.41 314.40 360.41 313.76

Appropriations

Debenture Redemption Reserve (12.50) (12.50) (12.50) (12.50)

Transfer from/ (to) General Reserve (11.93) (10.14) (11.93) (10.14)

Interim Dividend (19.45) (19.45) (19.45) (19.45)

Income Tax on Interim Dividend (3.15) (3.15) (3.15) (3.15)

Proposed Equity Dividend (25.28) (23.34) (25.28) (23.34)

Income tax on Equity Dividend (4.30) (3.78) (4.30) (3.78)

Balance Profit/(-) Loss carried forward to Balance Sheet 284.80 242.03 283.80 241.40

DIVIDEND

The Board of Directors had declared an interim dividend of Rs.1/- per share (100%) on the Equity Shares of the Company, in October 2012. The Directors are pleased to recommend a final dividend of Rs.1.30 per share (130%) on the Equity Shares. This will take the total dividend for the year to Rs.2.30 per share (230%) (Previous year Rs.2.20 per share, i.e. 220%). If the final dividend, as recommended above, is declared by the Members at the Annual General Meeting, the total outflow towards dividend on Equity Shares for the year would be Rs.52.18 Crores (including dividend tax) (Previous Year Rs.49.72 Crores).

COMPANY PERFORMANCE

The Company achieved a new landmark in revenues, crossing the Rs.1,500 Crores milestone. The Company''s profit before tax on a consolidated basis, is Rs.172.29 Crores during the year, as compared to Rs.149.39 Crores in the previous year, an increase of 15% over the last year. The Company earned a net profit of Rs.119.01 Crores, as against a net profit of Rs.99.18 Crores in the previous year on a consolidated basis.

OPERATIONS

1. CROP PROTECTION

The year 2012-13 was a challenging year for Indian agriculture, as monsoon played truant during the main cropping season. Tough times such as Neelam cyclone and worst drought in few key States were also added challenges faced during the year. The Central Statistical Organization (CSO) has estimated the growth of agriculture (which includes food grains, oilseeds, sugarcane and fibre crops) and allied activities (which includes livestock, fisheries and forestry) at 1.8% in 2012-13, as compared to 3.6% during 2011-12. However, food grain production during 2012-13 crop year is estimated to fall to 255.36 million tonnes, from a record 259.32 million tonnes in the previous year, due to irregular rainfall in 2012, which took a toll on kharif cultivation and productivity. There was a decline in production of food grains, oilseeds, sugarcane and fibers. The share of agriculture and allied sectors in India''s GDP also declined to 13.7% in 2012-13 on account of higher growth in the non-farm sectors.

Good progress has been made though, over the last few years in segments of agriculture. Per capita availability of fruits in the country has increased from 138 gms per person per day in 2005 to 175 gms per person per day in the current year. Similarly, per capita availability of vegetables also increased from 279 gms per person per day to 316 gms per person per day during the same period. While in 2011-12, Agri-exports touched $37 billion against imports of only $17 billion, in 2012-13, exports are likely to cross $40 billion against imports of roughly $20 billion. Grain stocks in Government godowns have been the highest at 82 million tonnes in June 2012, and is likely to cross 90 million tonnes in June-July 2013, breaking all records in India.

The branded Domestic Formulation Business registered a growth of 8% during the year over the previous year, despite seasonal aberrations in crops like paddy and pulses. The industry is estimated to have recorded a low growth during the year. Aggressive planning and implementation of sales and promotion on paddy, cotton, pulses, sugarcane and fruits & vegetables, taking into account on-ground realities was a key to success. EAGLE (Expansion and Aggressive Growth through Leadership and Excellence) roll out across India has helped the Company in opportunity identification, drawing actionable insights and achievement of aggressive growth targets at crop, pest and molecule level for each territory. This resulted in significant increase in volumes for our key products such as Tata Mida, Manik, Asataf, Ergon, Blitox, Tata Panida, Atrataf, Tata Metri, Fujione and Taarak.

Our customer relationship building activities, branded under the umbrella of Rallis Kisan Kutumba (RKK) moved into the next orbit, with a connect to one Million RKK farmers being digitized into the system, successful introduction of key initiatives such as Samruddh Krishi, expansion of MoPu (grow More Pulses), State partnership, Prerna and others. These initiatives, along with customer centric promotional activities and product portfolio current with the market needs, has helped farmers to a great extent in protecting their crops effectively, improving quality and yield of produce and ultimately in improving their standard of living.

The International Business Division registered an increase of 9% in sales, as compared to 2011-12. The increase in sales was due to rising demand for crop commodities and price improvement in wheat and cotton. International Business comprised 32% of the total revenues of the Company. This is in line with our APOLLO aspirations as part of our Long Term strategy. While the rupee depreciation translated into higher revenue growth, there was also a significant volume growth in key manufactured products exported to Latin America and USA under contract manufacturing business.

The Domestic Institutional Business continued with its sales of crop protection and seed treatment chemicals and household pesticide products to major customers during the year. In seed treatment chemicals, the Company consolidated its position and there are plans for significant growth in this segment.

2. NON-PESTICIDE PORTFOLIO (NPP)

Alongside growing the Crop Protection business, your Company is also building a robust Non-Pesticide Portfolio of businesses to cater to the changing needs of the farmers and agriculture. This not only leverages the deep farmer connect your Company has, but also provides a large platform to serve the emerging needs of the sector.

Seeds and Plant Growth Nutrients: After acquiring a majority stake in Metahelix Life Sciences, a research-led Seeds Company in December 2010, this year the Company focused its efforts on establishing seed brands in various segments. During the year, your Company has intensified the branding activities to establish the brands which were launched last year.

Your Company is giving focused attention to improving the quality of life of the Agriculture community in India. As a move towards sustainable agriculture, your Company is increasing its focus on greener and cleaner products. Launch of Tata Uphaar, a 100% organic growth Promoter and Gluco Beta, a unique blend of Carbon, Proteins, Primary Nutrients (N and K), Secondary Nutrients (Ca and Mg) and Micro Nutrients (Zn, Fe and B) in Organic form is a move in that direction. Ralligold, a Plant Growth Nutrient, which partially reduces fertilizers consumption by enabling crops to better utilize the applied phosphorus, will not only help the farmer increase his income, but will also help in arresting soil deterioration due to imbalanced use of chemical fertilizers.

Agri Services: Initiatives such as the Samrudh Krishi services started by the Company at Nasik for grape farmers and at Gujarat for cumin farmers have received an encouraging response from the farmers. Grow More Pulses (MoPu) programme of the Company, where the Company is actively engaged with the farmers in increasing the productivity of pulses, as also helping them in marketing the produce, aims at embracing the entire value chain of products and services to the farming community.

Soil Conditioner: During the year, the Company acquired an equity stake in Zero Waste Agro Organics Private Limited (ZWAOPL), a Maharashtra based Company manufacturing scientifically prepared organic compost, a soil conditioner. Your Company has introduced the product GeoGreen in key cash crops such as grapes, banana, vegetables, pomegranates, sugarcane, arecanut, ginger, potato and apple. The product acceptance has been good, as reflected in field demonstrations and farmer testimonials. Besides existing sites for production, new production sites are being added to scale up volumes. GeoGreen is derived out of wastes from sugar industry, to improve soil health and drive agriculture productivity. The technology supports sustainable agriculture and will help farmers in addressing the challenge of food security.

Tata Rallis Agri Inputs Training Scheme (TRAITS): This initiative aims at promoting employability of non-graduate, rural youth from the farming background, by imparting them training in the Agri-marketing and crop advising field, to enable them to take up a career in Agri marketing and crop advising. TRAITS facilitates skill development as a larger cause, while also creating a competent field team for Rallis. This year, your Company extended TRAITS to Bhubaneswar in Odisha and Nalanda in Bihar.

RESEARCH & DEVELOPMENT

The Company has reinforced its Research and Development Centre (Rallis Innovation Chemistry Hub - RICH) at Bengaluru during the year. RICH is a state of the art R & D centre, comprising Chemistry, Product Development and Registration Departments. The Chemistry Department further comprises Process Chemistry, Formulation Development and Analytical Research sections. Bioscience laboratories have also been set up for quick evaluation of new products.

The Company''s Research and Development efforts are focused on new and safer formulations for better efficacy, improved value and services to the farmers. A number of registration dossiers have been submitted during the year for supporting domestic and international business.

Process Chemistry focused on developing cost effective processes for molecules that are off patent, in the areas of crop protection and having relevant market potential. Six patents were filed during the last year. Some of these are also being filed for world patents in relevant areas of interest. Process improvement projects were undertaken for improving product quality, yields and productivity of manufacturing processes. Process development projects for contract manufacturing opportunities were also taken up as a major activity. Environment, Health and Safety (EHS) considerations were given special emphasis.

Some molecules arising out of NMITLI (New Millennium Indian Technology Leadership Initiative) project were evaluated as lead molecules. Structural Activity Relationship (SAR) showed few more molecules that would be potentially useful. The project will be pursued further.

Product Development of new formulations was also undertaken with the help of field trials in different areas, so as to assess their bio efficacy and ensuring that these formulations are safe to use.

INDUSTRIAL RELATIONS

The overall relations with bargainable employees of the Company were cordial and harmonious during the year 2012-13. The number of employees on the rolls of the Company marginally reduced from 857 to 843 during the year.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

During the year, the Company has acquired and subscribed to equity shares representing 22.81% of the paid-up equity share capital of Zero Waste Agro Organics Private Limited (ZWAOPL). Furthermore, the Company has been granted the right, under the Shareholders Agreement, to nominate a majority of the Directors on the Board of ZWAOPL. As a result of this, ZWAOPL has become a subsidiary of the Company pursuant to Section 4 of the Companies Act, 1956, with effect from 18th October, 2012.

The Ministry of Corporate Affairs, Government of India, has granted a general exemption to companies, by General Circular No.2/2011 dated 8th February, 2011, under Section 212 (8) of the Companies Act, 1956, from attaching individual accounts of subsidiaries with their annual reports, subject to fulfilment of certain conditions. Accordingly, the Board of Directors of the Company has, by resolution, given consent for not attaching the Balance Sheet, Statement of Profit and Loss and other documents of its subsidiaries in the Annual Report of the Company for the financial year ended 31st March, 2013.

However, the Consolidated Financial Statements of the subsidiaries (prepared in accordance with Accounting Standard 21 issued by the Institute of Chartered Accountants of India), form part of the Annual Report and are reflected in the Consolidated Accounts of the Company. In addition, the financial data of the subsidiaries have been furnished under Note No.38 to the Consolidated Financial Statements and forms part of this Annual Report.

The annual accounts of the subsidiaries and related detailed information will be kept at the Registered Office of the Company, as also at the head offices of the respective subsidiary companies and will be available to investors seeking information at any time.

The consolidated financial results reflect the operations of the following subsidiaries: Metahelix Life Sciences Ltd. (consolidated with its wholly owned subsidiary Dhaanya Seeds Ltd.), Rallis Chemistry Exports Ltd. and Zero Waste Agro Organics Pvt. Ltd.

DIRECTORS

Dr. K. P. Prabhakaran Nair will retire as Director of the Company at the conclusion of the forthcoming Annual General Meeting. The Directors wish to place on record their appreciation of the valuable services rendered by Dr. Nair during his tenure as Director of your Company.

In accordance with Article 112(2) of the Articles of Association of the Company, Mr. R. Mukundan, Dr. Yoginder K. Alagh and Mr. E. A. Kshirsagar retire and are eligible for re-appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures''

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently, and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period''

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE AND INTERNAL AUDIT

The Internal Audit Department undertook a substantial number of internal audit reviews with a view to encompassing a large coverage. This resulted in providing adequate assurance on compliance and sustenance in internal controls.

The Enterprise Risk Management framework, as well as control testing pertaining to the financial reporting for the CEO/ CFO certification framework as required under Clause 49 of the Listing Agreements with the Stock Exchanges, was well established.

A Report on Corporate Governance and the Management Discussion and Analysis Report, as required under Clause 49 of the Listing Agreement, forms part of the Annual Report.

AUDITORS

At the Annual General Meeting, Members will be required to appoint Auditors for the current year. M/s. Deloitte Haskins & Sells, the existing Auditors have furnished a certificate, under Sections 224(1B) and 226 of the Companies Act, 1956, regarding their eligibility for re-appointment. The Members are requested to consider their re-appointment as Auditors of the Company for the current year and authorize the Board of Directors to fix their remuneration.

COST AUDITORS

Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956, M/s. N. I. Mehta and Co., Cost Accountants have been appointed to conduct Cost Audits relating to Insecticides (Technical Grade and Formulations) and Fertilizers of the Company.

By General Circular No. 8/2012 dated 10th May, 2012 issued by the Ministry of Corporate Affairs, Government of India, it has been made mandatory for companies to file Cost Audit Reports from the Financial Year 2011-12 onwards in XBRL (Extensible Business Reporting Language) format. The due date for filing of the Cost Audit Reports for the financial year 2011-12 was 28th February, 2013. The Company has filed the Reports with the Ministry of Corporate Affairs on 30th January, 2013.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988, the information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed.

PARTICULARS OF EMPLOYEES

The information required under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is provided in the Annexure forming part of the Report. In terms of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.

ACKNOWLEDGEMENT

Your Directors wish to thank all the employees of the Company for their dedicated service during the year. They would also like to place on record their appreciation for the continued co-operation and support received by the Company during the year from bankers, financial institutions, business partners and other stakeholders.

On behalf of the Board of Directors

R. GOPALAKRISHNAN

Chairman

Mumbai, 25th April, 2013


Mar 31, 2012

TO THE MEMBERS OF RALLIS INDIA LIMITED

The Directors hereby present their Sixty-fourth Annual Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS

Crores

2011-12 2010-11

Gross Sales 1260.07 1148.17

Excise Duty (78.82) (80.91)

Net Sales 1181.25 1067.26

Other Income 7.50 13.55

1188.75 1080.81

Profit/ (-) Loss before Finance cost, Depreciation and Tax 204.76 203.79

Interest (10.37) (3.06)

Depreciation (27.11) (17.16)

Profit/ (-) Loss before exceptional item 167.28 183.57 Exceptional item:

- Cessation cost (17.19) -

Profit before Tax 150.09 183.57

Provision for Tax (38.18) (50.70)

For Prior Years - 2.12

Deferred Tax (10.51) (8.78)

Profit/ (-) Loss after Tax 101.39 126.21

Balance of Profit brought forward from previous year 213.01 157.19

314.40 283.40

Appropriations

Debenture Redemption Reserve (12.50) (12.50)

Transfer from/ (to) General Reserve (10.14) (12.62)

Interim Dividend (19.45) (17.50)

Income Tax on Interim Dividend (3.15) (2.91)

Proposed Equity Dividend (23.34) (21.39)

Income tax on Equity Dividend (3.79) (3.47)

Balance Profit/(-) Loss carried forward to Balance Sheet 242.03 213.01

DIVIDEND

The Board of Directors had declared an interim dividend of Rs 1/- per share (100%) on the Equity Shares of the Company, in October 2011. The Directors are pleased to recommend a final dividend of Rs 1.20 per share (120%) on the Equity Shares. This will take the total dividend for the year to Rs 2.20 per share (220%) on the sub-divided equity share capital of the Company (Previous year Rs 20/- per share on equity shares of Rs10/- each, i.e. 200%). If the final dividend, as recommended above, is declared by the Members at the Annual General Meeting, the total outflow towards dividend on Equity Shares for the year would be Rs 49.72 Crores (including dividend tax) (Previous Year Rs 45.27 Crores).

COMPANY PERFORMANCE

The Company's profit before tax on a consolidated basis, decreased to Rs 149.39 Crores during the year, as compared to Rs 184.47 Crores in the previous year, a decrease of 19% over the last year. Exceptional items such as cessation costs of Rs 17.19 Crores and losses relating to foreign exchange of Rs 9.66 Crores impacted the profits. The Company earned a net profit of Rs 99.18 Crores, as against a net profit of Rs 126.04 Crores in the previous year on a consolidated basis.

OPERATIONS

Crop Protection

The Second Advance Estimates has projected a marginal increase in the agricultural production, driven by a reasonable growth of cereals and cotton. Pulses and coarse cereals have shown a slight downtrend in production. The total rainfall during the period June to September at a national level exceeded 2% compared to normal, though the geographical spread and distribution was uneven. In the Rabi season, there was a deficit of 48%, which affected crop acreages, pest/ disease incidence and had an adverse impact on yield in crops such as paddy, chili, black gram and red gram. The States of Andhra Pradesh, particularly Rayalseema and Maharashtra reported more than 40% deficit in rainfall.

The Domestic Formulation Business registered a modest growth of 2% during the year over the previous year due to seasonal aberrations in crops like paddy and pulses. The industry is estimated to have recorded a decrease during the year. Aggressive planning and implementation of sales and promotion on paddy, cotton, pulses, sugarcane and fruits & vegetables, taking into account on-ground realities was a key to success. EAGLE (Expansion and Aggressive Growth through Leadership and Excellence) roll out across pan India has helped the Company in opportunity identification, drawing actionable insights and achievement of aggressive growth targets at crop, pest and molecule level for each territory. This resulted in significant increase in volumes for our key products such as Tata Mida, Manik, Asataf, Ergon, Blitox, Tata Panida, Atrataf, Tata Metri and Taarak. The Company has completely discontinued the sales of Red triangle (Extremely toxic) products, which had in the past contributed to 10% of the revenues.

Our customer relationship building activities, branded under the umbrella of Rallis Kisan Kutumba (RKK) moved into the next orbit with successful introduction of key initiatives such as Samruddh Krishi, expansion of MoPu (grow More Pulses), State partnership, Prerna and others. These initiatives, along with customer centric promotional activities and product portfolio current with the market needs, has helped farmers to a great extent in protecting their crops effectively, improving quality and yield of produce and ultimately in improving their standard of living. The RKK today directly services over seven lakh farmers.

The International Business Division registered an increase of 48% in sales, as compared to 2010-11. The increase in sales was due to rising demand for crop commodities and price improvement in wheat and cotton. International Business comprised 33% of the total revenues of the Company. This is in line with our APOLLO aspirations as part of our Long Term Strategy. While the rupee depreciation translated into higher revenue growth, there was also a considerable volume growth in key manufactured products exported to Latin America and USA under contract manufacturing.

The Domestic Institutional Business continued with its sales of crop protection and seed treatment chemicals and household pesticide products to major customers during the year. In seed treatment chemicals, the Company consolidated its position and there are plans for significant growth in this segment.

Seeds and Plant Growth Nutrients

After acquiring a majority stake in Metahelix Life Sciences, a research-led Seeds Company in December 2010, this year the Company focused its efforts on establishing seed brands in various segments. During the year, your Company has launched ten new seed hybrids in its portfolio and extensive field activities were conducted to establish these new brands.

As a move towards sustainable agriculture, your Company is increasing its focus on greener and cleaner products. Launch of Tata Bahaar, a 100% organic growth promoter, is a move in that direction. Ralligold, a Plant Growth Nutrient, which partially reduces fertilizers consumption by enabling crops to better utilize the applied phosphorus, will not only help the famer increase his income, but will also help in arresting soil deterioration due to imbalanced use of chemical fertilizers.

ACQUISITION OF ORGANIC COMPOST BUSINESS

Subsequent to the year under review, your Board has approved the acquisition of a majority equity stake in Zero Waste Agro Organics Private Limited (ZWAOPL), a Maharashtra based company, manufacturing scientifically prepared organic compost. Your Company will also have exclusive sales and marketing arrangements with ZWAOPL for domestic and international markets.

With this acquisition, the product portfolio of the Company will be strengthened with scientifically prepared organic compost rich in nutrients and organic carbon, derived out of wastes from sugar industry, to improve deteriorating soil health and drive agriculture productivity. The technology supports sustainable agriculture and will help farmers in addressing the challenge of food security.

RESEARCH & DEVELOPMENT

Research and Development efforts are focused on developing new formulations for better efficacy, improved value for the farmers, including combination products and facile handling and delivery and sustainable product solutions. Various new formulations have been developed and are being commercialized. A number of registration dossiers have been submitted during the year for supporting International Business.

Some compounds from the NMITLI (New Millennium Indian Technology Leadership Initiative) project have shown bioactivity on the basis of field trial results. An International Patent has been taken on these initiatives. Further work is now planned with the National Chemical Laboratory, Pune.

Process development (Reverse Engineering) of molecules which are off-patent, but with relevant market potential in the areas of crop protection, was carried out. Several patents are being filed for protecting the technology developed. Process improvement projects were undertaken for improving product quality and productivity of the manufacturing processes. Environment, Health and Safety (EHS) considerations were given special emphasis in the process development work. Process Development for contract manufacturing opportunities has also been undertaken.

Product Development of new formulations is also undertaken for confirming the bio efficacy, effective dosage level and ensuring that the product is safe to use.

ADDITIONAL MANUFACTURING FACILITY

During the year, the Company has successfully commissioned and started commercial production at its additional manufacturing facility at the PCPIR (Petroleum, Chemicals and Petrochemical Investment Region), Dahej in Gujarat. The Dahej plant is a multi-purpose technical manufacturing facility for a number of crop protection products. This has enhanced the Company's ability to handle different type of chemistries, leading to an increase in the potential to attract contract manufacturing from suitable alliance partners.

FINANCE

The Company has sub-divided its Equity Shares of the face value of Rs 10/- each fully paid-up into Equity Shares of the face value of Rs 1/- each fully paid-up, with effect from 18th July, 2011, with consequential amendments to the Capital Clauses in the Memorandum and Articles of Association of the Company.

The Financial Statements have been prepared as per the revised Schedule VI of the Companies Act, 1956, as notified by the Ministry of Corporate Affairs. Accordingly, previous year's figures have also been regrouped/ restated wherever necessary to conform to the classification of the current year.

INDUSTRIAL RELATIONS

The overall relations with bargainable employees at all Units of the Company were cordial and harmonious during the year 2011-12. The overall manpower of the Company has decreased from 918 to 857 during the year. This decrease is mainly due to Voluntary Retirement Scheme given to the non management staff at Turbhe, on cessation of manufacturing operations at the Unit. The management staff at the Unit is being relocated to other locations as per the Company's requirement.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

The Ministry of Corporate Affairs has granted a general exemption to companies, by General Circular No.2/2011 dated 8th February, 2011, under Section 212 (8) of the Companies Act, 1956, from attaching individual accounts of subsidiaries with their annual reports. Accordingly, the Board of Directors of the Company has, by resolution, given consent for not attaching the Balance Sheet, Profit and Loss Account and other documents of its subsidiaries in the Annual Report of the Company for the financial year ended 31st March, 2012.

However, the Consolidated Financial Statements of the subsidiaries (prepared in accordance with Accounting Standard 21 issued by the Institute of Chartered Accountants of India), form part of the Annual Report and are reflected in the Consolidated Accounts of the Company. Further, the financial data of the subsidiaries have been furnished under Note No. 38 to the Consolidated Financial Statements and forms part of this Annual Report. The annual accounts of the subsidiaries and related detailed information will be kept at the Registered Office of the Company, as also at the head offices of the respective subsidiary companies and will be available to investors seeking information at any time.

The consolidated financial results reflect the operations of the following subsidiaries: Metahelix Life Sciences Ltd. (consolidated with its wholly owned subsidiary Dhaanya Seeds Ltd.) and Rallis Chemistry Exports Ltd.

Rallis Australasia Pty Ltd. was liquidated with effect from 31st December, 2011 and hence ceased to be a subsidiary of the Company from that date.

DIRECTORS

Dr. V. S. Sohoni will retire as Director of the Company on 28th May, 2012. The Directors wish to place on record their appreciation of the valuable services rendered by Dr. Sohoni during his tenure as Director of your Company.

Dr. Yashwant S. P. Thorat has been appointed as Additional Director of the Company with effect from 1st July, 2011. Pursuant to Section 260 of the Companies Act, 1956 and Article 116 of the Articles of Association of the Company, Dr. Thorat vacates office and is eligible for appointment.

The Board of Directors, at its meeting held on 20th January, 2012, subject to the approval of the Members at the Annual General Meeting, re-appointed Mr. V. Shankar as the Managing Director of the Company, for a further 5 year term with effect from 13th March, 2012. Members are requested to refer to Item No.8 in the Notice of the Annual General Meeting for the terms of re-appointment and remuneration of Mr. Shankar.

In accordance with Article 112(2) of the Articles of Association of the Company, Mr. Homi R. Khusrokhan, Mr. Prakash R. Rastogi and Mr. Bharat Vasani retire and are eligible for re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently, and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE AND INTERNAL AUDIT

Besides continuing the usage of expertise of a single firm of Internal Auditors, the Internal Audit Department, under the direction of the Head - Internal Audit, also undertook a substantial number of internal audits by using internal resources, with a view to encompassing a larger universe. The benefits through this twin-pronged approach resulted in providing more assurance on compliance and sustenance in internal controls. Besides, this approach has also helped in establishing and evolving partnership with the various Function Owners.

The Enterprise Risk Management framework, as well as the CEO/ CFO Certification framework as required under Clause 49 of the Listing Agreements with the Stock Exchanges, for controls testing pertaining to financial reporting, were well established.

A Report on Corporate Governance and the Management Discussion and Analysis Report, as required under Clause 49 of the Listing Agreement, forms part of the Annual Report.

AUDITORS

At the Annual General Meeting, Members will be required to appoint Auditors for the current year and fix their remuneration. M/s. Deloitte Haskins & Sells, the existing Auditors have furnished a certificate regarding their eligibility for re-appointment. The Directors recommend that they be re-appointed as Auditors of the Company for the current year.

COST AUDITORS

Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956, M/s. N. I. Mehta and Co., Cost Accountants have been appointed to conduct Cost Audits relating to Insecticides (Technical Grade and Formulations) and Fertilizers of the Company.

The due date for filing of the Cost Audit Reports for the financial year 2010-11 was 30th September, 2011. The Company has filed the Reports with the Ministry of Corporate Affairs on 29th August, 2011.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988, the information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed.

PARTICULARS OF EMPLOYEES

The information required under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is provided in the Annexure forming part of the Report. In terms of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.

ACKNOWLEDGEMENT

Your Directors wish to thank all the employees of the Company for their dedicated service during the year. They would also like to place on record their appreciation for the continued co-operation and support received by the Company during the year from bankers, financial institutions, business partners and other stakeholders.

On behalf of the Board of Directors

R. GOPALAKRISHNAN Chairman

Mumbai, 23rd April, 2012

 
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