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Notes to Accounts of Rallis India Ltd.

Mar 31, 2017

1. Critical accounting judgments and key sources of estimation uncertainty

The preparation of the financial statements in conformity with the Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and disclosures as at date of the financial statements and the reported amounts of the revenues and expenses for the years presented. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates under different assumptions and conditions.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods Critical Judgments

In the process of applying the Company''s accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognized in the financial statements:

Discount rate used to determine the carrying amount of the Company''s defined benefit obligation

In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

Contingences and commitments

I n the normal course of business, contingent liabilities may arise from litigations and other claims against the Company. Where the potential liabilities have a low probability of crystallizing or are very difficult to quantify reliably, we treat them as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements. Although there can be no assurance regarding the final outcome of the legal proceedings, we do not expect them to have a materially adverse impact on our financial position or profitability.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

Useful lives of property, plant and equipment

As described in Note 3, the Company reviews the estimated useful lives and residual values of property, plant and equipment at the end of each reporting period. During the current financial year, the management determined that there were no changes to the useful lives and residual values of the property, plant and equipment.

Allowances for doubtful debts

The Company makes allowances for doubtful debts based on an assessment of the recoverability of trade and other receivables. The identification of doubtful debts requires use of judgement and estimates. Where the expectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and doubtful debts expenses in the period in which such estimate has been changed.

Allowances for inventories

Management reviews the inventory age listing on a periodic basis. This review involves comparison of the carrying value of the aged inventory items with the respective net realizable value. The purpose is to ascertain whether an allowance is required to be made in the financial statements for any obsolete and slow-moving items. Management is satisfied that adequate allowance for obsolete and slow-moving inventories has been made in the financial statements.

Liability for sales return

I n making judgment for liability for sales return, the management considered the detailed criteria for the recognition of revenue from the sale of goods set out in Ind AS 18 and in particular, whether the Company had transferred to the buyer the significant risk and rewards of ownership of the goods. Following the detailed quantification of the Company''s liability towards sales return, the management is satisfied that significant risk and rewards have been transferred and that recognition of the revenue in the current year is appropriate, in conjunction with the recognition of an appropriate liability for sales return.

Accruals for estimated product returns, which are based on historical experience of actual sales returns and adjustment on account of current market scenario is considered by Company to be reliable estimate of future sales returns.

2. Explanation of transition to Ind AS

As stated in Note 2, the Company''s financial statements for the year ended 31 March, 2017 are the first annual financial statements prepared by the Company in order to comply with Ind AS. The adoption of Ind AS was carried out in accordance with Ind AS 101, using 1 April, 2015 as the transition date. The transition was carried out from Previous GAAP (based on the AS framework) to Ind AS. The effect of adopting Ind AS has been summarized in the reconciliations provided below.

Ind AS 101 generally requires full retrospective application of the Standards in force at the first reporting date. However, Ind AS 101 allows certain exemptions in the application of particular Standards to prior periods in order to assist companies with the transition process.

Reconciliations

The accounting policies as stated above in Note 3 have been applied in preparing the financial statements for the year ended 31 March, 2017, the financial statements for the year ending 31 March, 2016 and the preparation of an opening Ind AS statement of financial position as at 1 April, 2015. In preparing its opening Ind AS Balance Sheet and Statement of Profit and Loss for the year ended 31 March, 2016, the Company has adjusted amounts reported in financial statements prepared in accordance with Previous GAAP

An explanation of how the transition from Previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flow is set out in the following tables.

iii. Explanation of material adjustments to Statement of Cash Flows for the year ended 31 March, 2016:

The transition from Previous GAAP to Ind AS has no material impact on the Statement of Cash Flows except bank overdraft which has been considered as part of cash & cash equivalent.

footnotes:

(i) The cost of inventories recognized as an expense during the year wasRs,80,660.81 lac (Previous year:''Rs,73,445.50 lac)

(ii) The cost of inventories recognized as an expense includesRs,733.68 lac (Previous year:'' 583.84 lac) in respect of adjustment of inventories to net realisable value/slow moving, and has been reduced byRs,381.49 lac ( Previous year:Rs, 326.34 lac) in respect of reversal of such write-downs.

(iii) The mode of valuation of inventories has been stated in note 3.11

(iv) Loans are secured by first paripassu charge on stock (including raw material, finished goods and work in progress) and book debts (refer note 11 and 18).

footnotes:

(i) The credit period ranges from 15 days to 180 days.

(ii) Before accepting any new customer, the Company assesses the potential customer''s credit quality and defines credit limits by customer. Limits attributed to customers are reviewed annually. Of the trade receivable balance as at 31 March, 2017Rs,3,819.27 lac is due from one customer (as at 31 March, 2016Rs,3,543.14 lac are due from two customers, as at 1 April, 2015Rs,4,917.10 lac is due from one customer). The credit risk in respect of these customers is mitigated by export credit guarantee. There are no other customer who represent more than 5% of the total balance of trade receivable.

(iii) No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person. Nor any trade or other receivables are due from firms or private companies respectively in which any director is a partner, a director or a member.

(v) Loans are secured by first paripassu charge on stock (including raw material, finished goods and work in progress) and book debts (refer note 10 and 18).

footnote:

The Company intends to dispose of assets relating to a non current asset it no longer utilizes in the next 12 months. The Company is currently in negotiation with some potential buyers. No impairment loss was recognized on reclassification of the assets as held for sale nor as at reporting date as the management of the Company expect that the fair value (estimated based on the recent market prices of similar assets in similar locations) less costs to sell is higher than the carrying amount.

b. The Company has issued one class of equity shares having a par value ofRs,1 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Summary of borrowing arrangements

(i) Sales tax deferral scheme:

The loan is repayable in annual installments which range from a maximum ofRs,113.37 lac to a minimum ofRs,7.78 lac over the period stretching from 1 April, 2016 to 31 March, 2027. The amount outstanding is free of interest.

The balance outstanding as at 31 March, 2017 isRs,588.18 lac (as at31 March, 2016Rs,598.94 lac, as at 1 April, 2015Rs,704.35lac) of whichRs,9.47 lac (as at31 March, 2016Rs,10.64 lac, as at 1 April, 2015Rs,47.44 lac) has been grouped under note 21- other current financial liabilities.

Notes to the financial statements for the year ended 31 March, 2017 All amounts are inRs,lac unless otherwise stated 33 Segment information

Products and services from which reportable segments derive their revenues

Information reported to the chief operating decision maker (CODM) for the purpose of resources allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. No operating segments have been aggregated in arriving at the reportable segments of the Company.

The Company has determined its business segment as "Agri -Inputs" comprising of Pesticides, Plant Growth Nutrients, Organic Compost and Seeds. The other segment comprises "Polymer" and other non reportable elements.

Notes:

(i) Segment revenue consist of sales of products including excise duty.

(ii) Segment revenue reported above represents revenue generated from external customers. There were no inter-segment sales in the current year (2015-16Rs,Nil) The accounting policies of the reportable segments are the same as described in note 3.18.

(iii) Segment profit represents the profit before tax earned by each segment without allocation of central administration cost and directors fees and commission, other income, as well as finance cost. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

For the purpose of monitoring segment performance and allocation resources between segments:

- All assets are allocated to reportable segments other than investments, other financial assets, non current tax assets, fixed deposits and interest accrued thereon.

- All liabilities are allocated to reportable segments other than borrowings, other financial liabilities, interest accrued on loans, provision for supplemental pay, unpaid dividend, current and deferred tax liabilities.

Geographical information

The company operates in two principal geographical areas - India and outside India

* Non-current assets exclude those relating to financial assets.

Information about major customers

No single customer contributed 10% or more to the Company''s revenue for both 2016-17 and 2015-16.

3 Lease arrangements

Operating lease arrangements:

Company as Lessee

The Company has procured motor vehicles and computer network under non-cancellable operating leases. Lease rent charged to the Statement of Profit and Loss during the year isRs,620.61 lac (Previous Year ''605.09lac) net of amount recovered from employeesRs,16.73 lac (Previous Year Rs,26.73 lac). Disclosures in respect of non-cancellable leases are given below:

36 Employee benefit plans Defined contribution plans

The Company makes provident fund contributions to defined contribution retirement benefit plans for eligible employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as specified under the law are paid to the provident fund set up as a trust by the Company in case of certain locations and government authorities (PF commissioner) at other locations. The Company is liable for contributions and any deficiency compared to interest computed based on the rate of interest declared by the Central Government under the Employees'' Provident Fund Scheme, 1952 and recognizes, if any, as an expense in the year it is determined.

As at 31 March, 2017, the fair value of the assets of the fund and the accumulated members'' corpus isRs,6,306.63 lac andRs,5,849.88 lac respectively. In accordance with an assets and liability study, there is no deficiency as the present value of the expected future earnings on the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest.

Amount recognized as expense and included in the Note 29 - in the head "Contribution to provident and other funds" for 31 March, 2017Rs,563.27 lac (for31 March, 2016Rs,541.52 lac).

Defined benefit plans

The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount) and a supplemental pay scheme (a lifelong pension). The gratuity scheme covers substantially all regular employees, while supplemental pay plan covers certain former executives. In the case of the gratuity scheme, the Company contributes funds to Gratuity Trust, which is irrevocable, while the supplemental pay scheme is not funded. Commitments are actuarially determined at year-end. The actuarial valuation is done based on "Projected Unit Credit" method.

These plans typically expose the Company to actuarial risk such as: investment risk, interest rate risk, longevity risk and salary risk Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create plan deficit.

Notes to the financial statements for the year ended 31 March, 2017 All amounts are in Rs,lac unless otherwise stated

Interest risk:

A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the plan assets.

Longevity risk:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary risk:

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

The principal assumptions used for the purpose of actuarial valuation were as follows.

The current service cost and the net interest expenses for the year are included in the Employee benefits expense line item in the Statement of Profit and Loss. The remeasurement of the net defined benefit liability/ asset is included in Other Comprehensive Income

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant

4. If the discounting rate is 100 basis point higher (lower), the defined benefit obligation would decrease byRs,315.12 lac (increase byRs,362.08 lac) (as at31 March, 2016: decrease byRs,280.31 lac (increase byRs,321.27 lac)) (as at 1 April, 2015: decrease byRs,274.46 lac (increase byRs,315.14 lac)).

5. If the expected salary growth increases (decreases) by 1%, the defined benefit obligation would increase byRs,235.13 lac (decrease byRs,207.85 lac) (as at 31 March, 2016: increaseRs,201.94 lac (decrease byRs,178.76 lac)) (as at 1 April, 2015: increase byRs,189.64 lac (decrease byRs,167.62 lac)).

6. If the life expectancy increases (decreases) by 1 year, the defined benefit obligation would increase byRs,41.03 lac (decrease byRs,41.55 lac) (as at31 March, 2016: increaseRs,36.96 lac (decrease byRs,37.58 lac)) (as at 1 April, 2015: increase byRs,36.95 lac (decrease byRs,37.68 lac)).

The sensitivity analysis presented above may not representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Notes to the financial statements for the year ended 31 March, 2017 All amounts are in Rs,lac unless otherwise stated

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using "Projected Unit Credit" method at the end of the reporting period which is the same as that applied in calculating the defined benefit obligation liability recognized in Balance Sheet.

There were no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

The Company expects to make a contribution ofRs,222.05 lac (as at31 March, 2016Rs,168.50 lac, as at 1 April, 2015Rs,280.01 lac) to the defined benefit plans during the next financial year.

7 Financial instruments Capital management

The Company manages its capital to ensure that the Company will be able to continue as going concern while maximizing the return to stakeholders through optimisation of debt and equity balance.

The capital structure of the Company consists of net debt (borrowings as detailed in notes 17, 18 and 21 offset by cash and bank balances) and total equity of the Company.

The Company is not subject to any externally imposed capital requirements.

(i) Debt is defined as long-term borrowings, short-term borrowings and current maturities of long term borrowings (excluding financial guarantee contracts and contingent consideration), as described in notes 17,18 and 21.

Financial risk management objectives

The Company''s corporate treasury function provides services to the business, co-ordinates access to domestic financial markets, monitors and manages the financial risk relating to the operation of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The use of financial derivatives is governed by the Company''s policies approved by the board of directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivatives financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Company does not enter into or trade financial instrument, including derivative financial instruments, for speculative purposes.

The corporate treasury function reports quarterly to the Company''s risk management committee, an independent body that monitors risks and policies implemented to mitigate risk exposures.

Market risk

The Company''s activities expose it primarily to the financial risk of changes in foreign currency exchange rates. The Company enters into a variety of derivative financial instruments to manage its exposure to foreign currency risk including:

Forward foreign exchange contracts to hedge the exchange rate risk arising on imports and exports.

Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilizing forward foreign exchange contracts.

Foreign currency sensitivity analysis

The Company is mainly exposed to the currency : USD, EUR, JPY and GBP.

The following table details the Company''s sensitivity to a 5% increase and decrease in the '' against the relevant foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in foreign exchange rates. This is mainly attributable to the exposure outstanding on receivables and payables in the Company at the end of the reporting period. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% charge in foreign currency rate. A positive number below indicates an increase in the profit or equity where the '' strengthens 5% against the relevant currency. For a 5% weakening of the '' against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.

The Company, in accordance with its risk management policies and procedures, enters into foreign currency forward contracts to manage its exposure in foreign exchange rate variations. The counter party is generally a bank. These contracts are for a period between one day and four years. The above sensitivity does not include the impact of foreign currency forward contracts which largly mitigate the risk.

Derivative instruments:

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to accounts receivable and accounts payable. The use of foreign currency forward contracts is governed by the Company''s strategy approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the Company''s Risk Management Policy. The Company does not use forward contracts for speculative purposes.

Note: JPY = Japanese Yen.

The line item in the Balance Sheet that includes the above hedging instruments are "other financial assets and other financial liabilities".

Equity risk

There is no material equity risk relating to the Company''s equity investments which are detailed in note 7 "Other investments". The Company''s equity investments majorly comprises of strategic investments rather than trading purposes.

Interest risk

There is no material interest risk relating to the Company''s financial liabilities which are detailed in note 17, 18 and 21.

Credit risk management

Credit risk refers to the risk that a counter party will default on its contractual obligation resulting in financial loss to the Company. The Company uses its own trading records to evaluate the credit worthiness of its customers. The Company''s exposure are continuously monitored and the aggregate value of transactions concluded, are spread amongst approved counter parties (refer note 11 - Trade receivable).

The credit risk on investment in mutual funds and derivative financial instruments is limited because the counter parties are reputed banks or funds sponsored by reputed bank.

In addition, during the year, the Company has issued a corporate guarantee to debenture trustee in respect of issuance of debentures ofRs,27,000.00 lac by Advinus Therapeutics Ltd. (Advinus), to the extent of 16.89% of the total subscription of debentures issued by Advinus. The Company''s maximum exposure in this respect is ofRs,4,560.30 lac at 31 March, 2017 (31 March, 2016:'' Nil, 1 April, 2015:'' Nil) as disclosed in contingent liabilities (refer note 39).

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company''s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

All current financial liabilities are repayable within one year. The contractual maturities of noncurrent liabilities are disclosed in note no. 17.

Liquidity risk table

The following table detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the company can be required to pay.

Sale of goods to related parties were made at the Company''s usual list prices, less average discounts. Purchases were made at market price discounted to reflect the quantity of goods purchased and the relationship between the parties.

The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or taken other than guarantee disclosed below. No expense has been recognized in the current or prior years for bad & doubtful debts in respect of the amounts owed by related parties.

During the year, the Company has issued a corporate guarantee to debenture trustee in respect of issuance of debentures ofRs,27,000.00 lac by Advinus Therapeutics Ltd. (Advinus), to the extent of 16.89% of the total subscription of debentures issued by Advinus. The Company''s maximum exposure in this respect is ofRs,4,560.30 lac as at 31 March, 2017 (as at 31 March, 2016:Rs,Nil, as at 1 April, 2015:'' Nil) as disclosed in contingent liabilities (refer note 39).

The remuneration of key management personnel is determined by the remuneration committee having regard to the performance of individuals and market trends. The same excludes gratuity and compensated absence.

8 Contingent liabilities

The Company is involved in a number of appellate, judicial and arbitration proceedings (including those described below) concerning matters arising in the course of conduct of the Company''s businesses. Some of these proceedings in respect of matters under litigation are in early stages, and in some other cases, the claims are indeterminate. A summary of claims asserted on the Company in respect of these cases have been summarised below.

Guarantees

During the year, the Company has issued a corporate guarantee to debenture trustee in respect of issuance of debentures ofRs,27,000.00 lac by Advinus Therapeutics Ltd. (Advinus), to the extent of 16.89% of the total subscription of debentures issued by Advinus. The Company''s maximum exposure in this respect is ofRs,4,560.30 lac as at 31 March, 2017 (as at31 March, 2016:'' Nil, as at 1 April, 2015:'' Nil).

The management believes that the claims made are untenable and is contesting them. As of the reporting date, the management is unable to determine the ultimate outcome of above matters. However, in the event the revenue authorities succeed with enforcement of their assessments, the Company may be required to pay some or all of the asserted claims and the consequential interest and penalties, which would reduce net income and could have a material adverse effect on net income in the respective reported period.

Management is generally unable to reasonably estimate a range of possible loss for proceedings or disputes other than those included in the estimate above, including where:

(i) plaintiffs / parties have not claimed an amount of money damages, unless management can otherwise determine an appropriate amount;

(ii) the proceedings are in early stages;

(iii) there is uncertainty as to the outcome of pending appeals or motions or negotiations;

(iv) there are significant factual issues to be resolved; and/or

(v) there are novel legal issues presented.

However, in respect of the above matters, management does not believe, based on currently available information, that the outcomes of the litigation, will have a material adverse effect on the Company''s financial condition, though the outcomes could be material to the Company''s operating results for any particular period, depending, in part, upon the operating results for such period.

9 Commitments

i) Estimated amount of contracts remaining to be executed on capital account of property, plant and equipment isRs,301.15 lac as at 31 March, 2017 (asat31 March,2016:'' 298.55lac,asat1 April,2015:'' 774.96lac) and Intangible assets isRs,48.28 lac as at 31 March, 2017 (as at31 March, 2016:'' 105.00 lac, as at 1 April, 2015:'' 274.27lac) against which advances paid aggregateRs,84.59 lac as at 31 March, 2017 (as at31 March, 2016:Rs,232.32 lac, as at 1 April, 2015:Rs,200.02 lac).

ii) During the year, the Company exercised its call option on 19,421 equity shares of Zero Waste Agro Organics Limited ("ZWAOL") on 23 November, 2016, at an aggregate cost ofRs,1,948.84 lac. The commitments in the form of put option granted to the erstwhile owners of 73,645 equity shares in ZWAOL stand extinguished.

iii) During the year 2015-16, the Company exercised its call option on 20,953 equity shares of Metahelix Life Sciences Limited ("Metahelix") on 15 February, 2016 at an aggregate cost ofRs,7,332.95 lac. The commitments in the form of put option granted to the erstwhile owners of 6,895 equity shares in Metahelix stand extinguished.

iv) During the year 2015-16, the Company had agreed to assign its leasehold rights in a property at Turbhe Navi Mumbai, for a gross consideration ofRs,21,393.00 lac to Ikea India Private Limited. The arrangement was subject to the Company obtaining necessary approvals under various regulations in respect of which the Company was liable to make payment aggregating toRs,9,778.19 lac against which the Company was entitled to be reimbursed ofRs,4,400.19 lac.

v) For lease commitments refer note no 35.

During the year the Company has also incurred Rs, 102.92 lac (Previous Year Rs, 543.73 lac) towards capital development expenditure which is included under intangible assets under development. The total amount included in Intangible assets under development as at 31 March, 2017 is Rs, 1,113.77 lac (asat31 March,2016 Rs, 1,092.25lac, asat1 April,2015Rs, 665.86 lac). footnote:

The above figures include the amounts based on separate accounts for the Research and Developments ("R&D") Centre recognized by the Department of Scientific & Industrial Research ("DSIR"), Ministry of Science and Technology for in-house research (consonance with the DSIR guidelines for in-house R & D Centre will be evaluated at the time of filing the return with DSIR).

Notes to the financial statements for the year ended 31 March, 2017 All amounts are inRs,lac unless otherwise stated

10 Other current liabilities include provision held in respect of indirect tax matters in dispute : (refer note 23)

While denying liabilities, on an evaluation of each of its disputed claims, the Company holds an overall provision for contingency in respect of certain indirect tax matters in dispute which, as at the year-end, aggregates Rs, 193.82 lac (as at 31 March, 2016 Rs, 193.82 lac, as at Rs, 1 April, 2015 193.82 lac). The movement during the year is as under:

Due to the numerous uncertainties and variables associated with certain assumptions and judgments, and the effects of changes in the regulatory and legal environment, both the precision and reliability of the resulting estimates of the related contingencies are subject to substantial uncertainties. The Company regularly monitors its estimated exposure to such loss contingencies and, as additional information becomes known, may change its estimates significantly. However, no estimate of the range of any such change can be made at this time.

* out of above amount overdue is Rs, Nil (Previous year: Rs, Nil)

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management.

Notes to the financial statements for the year ended 31 March, 2017 All amounts are inRs,lac unless otherwise stated

11 The gross amount required to be spent by the Company during the year towards Corporate Social Responsibility (CSR) as per the provision of section 135 of the Companies Act, 2013 amounts to Rs, 391.00 lac (Previous Year Rs,388.40 lac). Amount spent during the year on CSR activities (included in Note 29 and Note 32 of the Statement of Profit and Loss) as under.

12 During the year, the Company had Specified Bank Notes (SBN) or other denomination note as defined in the MCA notification G.S.R. 308(E) dated 31 March, 2017 on the details of SBN held and transacted during the period from 8 November, 2016 to 30

Explanation: For the purpose of this clause, the term ''Specified Bank Notes'' shall have the same meaning provided in the notification of the Government of India,in the Ministry of Finance, Department of Economics Affairs number S.O. 3407 (E), dated the 8 November, 2016.

*The above balance includes cash in hand ofRs,2.25 lac relates to SBN, held by employees as at 8 November, 2016 which was accounted and deposited on 19 November, 2016.

13 Exceptional item comprises profit on assignment of leasehold rights to a plot of land in the MIDC Area, Turbhe, Navi Mumbai. The profit is net of costs including a premium levied, under the repealed Urban Land (Ceiling and Regulation) Act, 1976 which has been paid under protest.

14 Subsequent event

The Board of Directors at its meeting held on 24 April, 2017 has recommended a dividend ofRs,2.50 per equity share. The Board has also recommended a one-time special dividend ofRs,1.25 per equity share, out of the profit on assignment of leasehold rights in the Turbhe land.


Mar 31, 2015

Corporate Information:

Rallis India Limited (the "Company") is an Indian public limited company, incorporated on 23 August, 1948, which is a subsidiary of Tata Chemicals Limited. It has been engaged primarily in the business of manufacture and marketing of Agri Inputs. The Company has its manufacturing facilities in India and sells both in India and across the globe. The Company is listed on the Bombay Stock Exchange ("BSE") and the National Stock Exchange ("NSE").

2. contingent liabilities and commitments (to the extent not provided for) (Refer Note 30):

The Company is involved in a number of appellate, judicial and arbitration proceedings (including those described below) concerning matters arising in the course of conduct of the Company''s businesses. Some of these proceedings in respect of matters under litigation are in early stages, and in some other cases, the claims are indeterminate. A summary of claims asserted on the Company in respect of these cases have been summarised below.

Tax contingencies

Amounts in respect of claims asserted by various revenue authorities on the Company, in respect of taxes, which are in dispute, have been tabulated below:

rs lac Nature of Tax As at As at 31 March, 2015 31 March, 2014

Sales Tax 1,836.30 1,808.34

Excise Duty 360.84 401.56

Customs Duty 144.10 144.10

Income Tax 6,904.98 6,900.28

Service Tax 113.06 93.74

Property Cases 47.36 47.36

The management believes that the claims made are untenable and is contesting them. As of the reporting date, the management is unable to determine the ultimate outcome of above matters. However, in the event the revenue authorities succeed with enforcement of their assessments, the Company may be required to pay some or all of the asserted claims and the consequential interest and penalties, which would reduce net income and could have a material adverse effect on net income in the respective reported period.

Management is generally unable to reasonably estimate a range of possible loss for proceedings or disputes other than those included in the estimate above, including where:

(i) plaintiffs / parties have not claimed an amount of money damages, unless management can otherwise determine an appropriate amount; " (ii) the proceedings are in early stages;

(iii) there is uncertainty as to the outcome of pending appeals or motions or negotiations; (iv) there are significant factual issues to be resolved; and/or (v) there are novel legal issues presented.

However, in respect of the above matters, management does not believe, based on currently available information, that the outcomes of the litigation, will have a material adverse effect on the Company''s financial condition, though the outcomes could be material to the Company''s operating results for any particular period, depending, in part, upon the operating results for such period.

(ii) commitments

(A) During the financial year 2010-11, the Company had acquired a majority of the equity shares of Metahelix Life Sciences Limited ("Metahelix"). Besides, the shares already acquired, it has allowed the founder shareholders, a put option exercisable over a period of 1 years (Previous Year: 2 years), 6,895 shares held by them for an amount aggregating Rs. 1,348.59 lac (Previous Year: 6,895 shares for an amount aggregating Rs. 1,348.59 lac). At the end of 3 years, the Company has a call option to acquire the balance shares held by the founder shareholders, at the fair market value as at the date of exercise.

(B) Estimated amount of contracts remaining to be executed on capital account of tangible assets is Rs. 774.96 lac (Previous YearX 826.79 lac) and Intangible assets is Rs. 274.27 lac (Previous YearX 144.01 lac) against which advances paid aggregate X 200.02 lac (Previous YearX 303.93 lac).

(C) For lease commitments and derivatives, refer note no 26 and 37 respectively.

During the year the Company has also incurred Rs. 234.83 lac (Previous Year Rs. 242.20 lac) towards capital research and development expenditure which is included under Intangible Assets under Development. The total amount included in Intangible Assets under Development as at 31st March 2015 is Rs. 665.86 lac (Previous YearRs.693.42 lac).

The above figures include the amounts based on separate accounts for the Research and Developments ("R&D") Centre recognised by the Department of Scientific & Industrial Research ("DSIR"), Ministry of Science and Technology for in- house research (consonance with the DSIR guidelines for in-house R & D Centre will be evaluated at the time of filing the return with DSIR).

Due to the numerous uncertainties and variables associated with certain assumptions and judgments, and the effects of changes in the regulatory and legal environment, both the precision and reliability of the resulting estimates of the related contingencies are subject to substantial uncertainties. The Company regularly monitors its estimated exposure to such loss contingencies and, as additional information becomes known, may change its estimates significantly. However, no estimate of the range of any such change can be made at this time.

4 SEGMENT REPORTING

The Company has determined its business segment as "Agri - Inputs" comprising of Pesticides, Plant Growth Nutrients and Seeds. The other business segment comprises "Polymer" and is non reportable.

(i) Segment Revenue includes Sales of Products less Excise Duty.

(ii) Unallocable assets include Investments, Advance Income Tax, Advance Fringe Benefit Tax, Interest Accrued on Investments and Fixed Deposits.

(iii) Unallocable liabilities includes Long Term Borrowings (includes current maturities on long-term debt), Short Term Borrowings, Provisions for Equity Dividend and tax thereon, Provision for Supplemental Payments, Provision for Income and Fringe Benefit Tax and Deferred Tax Liabilities.

(iv) Unallocable income includes income from investment activities.

(v) Unallocable expenditure includes charge in respect of Supplemental Payments on retirement valued on actuarial basis.

5 FOREIGN cURRENcY EXPOSURES :-

The Company, in accordance with its risk management policies and procedures, enters into foreign currency forward contracts and currency option contracts to manage its exposure in foreign exchange rate variations. The counter party is generally a bank. These contracts are for a period between one day and four years.

(a) Derivative Instruments:

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The use of foreign currency forward contracts is governed by the Company''s strategy approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the Company''s Risk Management Policy. The Company does not use forward contracts for speculative purposes.

6 EMPLOYEE BENEFIT OBLIGATIONS:

Defined-Benefits Plans:

The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount) and a supplemental pay scheme (a life long pension). The gratuity scheme covers substantially all regular employees, while supplemental pay plan covers former certain executives. In the case of the gratuity scheme, the Company contributes funds to Gratuity Trust, which is irrevocable, while the supplemental pay scheme is not funded. Commitments are actuarially determined at year-end. The actuarial valuation is done based on "Projected Unit Credit" method. Gains and losses of changed actuarial assumptions are charged to the Statement of profit and loss.

The estimates of future salary increases, considered in the actuarial valuation, take into account inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market.

The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.

Defined-contribution Plans:

The Company makes Provident Fund contributions to defined contribution retirement benefit plans for eligible employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as specified under the law are paid to the provident fund set up as a trust by the Company in case of certain locations. The Company is generally liable for annual contributions and any deficiency compared to interest computed based on the rate of interest declared by the Central Government under the Employees'' Provident Fund Scheme, 1952 and recognises, if any, as an expense in the year it is determined.

As of 31 March, 2015, the fair value of the assets of the fund and the accumulated members'' corpus is Rs. 4,277.07 lac and Rs. 4,086.86 lac respectively. In accordance with an actuarial valuation, there is no deficiency as the present value of the expected future earnings on the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest of 8.75%. The actuarial assumptions include discount rate of 7.74% and an average expected future period of 6 years.

Amount recognised as expense and included in the Note 22 — "Contribution to Provident and Other Funds" — Rs. 495.10 lac (Previous Year Rs. 440.65 lac).

Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be Nil as on 1 April, 2014, and has adjusted an amount ofRs. 236.63 lac (net of deferred tax ofRs. 121.92 lac) against the opening surplus balance in the Statement of Profit and Loss under Reserves and Surplus.

The depreciation expense in the Statement of Profit and Loss for the year is higher by Rs. 557.99 lac consequent to the change in the useful life of the assets.

7 The Company had invested Rs. 880.00 lac in Non-Convertible Debentures ("NCDs") of Advinus Therapeutics Ltd. having a coupon rate of 4.25%. The NCDs were redeemable between December 2010 and May 2013 at a premium of 25%.

Income recognised during the year includes Nil (Previous YearRs. 0.38 lac) in respect of redemption premium determined on the basis of the internal rate of return. During the year debentures amounting to Nil (Previous YearRs. 103.84 lac) were redeemed at a 25% premium which aggregated Nil (Previous YearRs.25.96 lac).

8 Previous years'' figures have been regrouped / restated wherever necessary to conform to the classification of the current year.


Mar 31, 2014

1. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR):

(i) Contingent Liabilities:

Rs. lacs

Particulars As at As at 31st March, 31st March, 2014 2013

a. Claims against the Company not acknowledged as debts:

- Sales Tax 2,032.72 2,000.40 - Excise Duty 401.56 360.84

- Customs Duty 144.10 144.10

- Income Tax 6,900.28 6,838.48

- Service Tax 93.74 65.21

- Property Cases 47.36 47.36

- Labour Cases 98.79 109.00

- Other cases 89.98 109.56

- Number of cases where amount is not quantifiable 41 Nos. (Previous Year 41 Nos.)

b. Other money for which the company is contingently liable:

- Bills Discounted (fully covered by buyer''s letters of credit) 458.01 1,547.36

10,266.54 11,222.31

Note :

The Company does not expect any liability in respect of items (a) and (b ) to devolve in respect of its exposure and therefore no provision has been made in respect thereof.

(ii) Commitments

(A) During the financial year 2010-11, the Company had acquired a majority of the equity shares of Metahelix Life Sciences Limited ("Metahelix"). Besides, the shares already acquired, it has allowed the founder shareholders, a put option exercisable over a period of 2 years (Previous Year: 3 years), 6,895 shares held by them for an amount aggregating Rs.1,348.59 lacs (Previous Year: 8,433 shares for an amount aggregating Rs.1,649.11 lacs). The Commitment made in the previous year to acquire 2,591 equity shares from certain shareholder (other than founder shareholder) for an amount aggregating Rs.506.77 lacs has been fulfilled during the year.

At the end of 3 years, the Company has a call option to acquire the balance shares held by the founder shareholders, at the fair market value as at the date of exercise.

(B) Estimated amount of contracts remaining to be executed on capital account of tangible assets isRs.826.79 lacs (Previous Year Z934.83 lacs) and Intangible assets is Rs.144.01 lacs (Previous Year Z12.80 lacs) against which advances paid aggregate Rs.303.93 lacs (Previous Yeart144.54 lacs).

(C) For lease commitments and derivatives, refer note no 28 and 39 respectively.

2. FOREIGN CURRENCY EXPOSURES :-

The Company, in accordance with its risk management policies and procedures, enters into foreign currency forward contracts and currency option contracts to manage its exposure in foreign exchange rate variations. The counter party is generally a bank. These contracts are for a period between one day and four years.

(a) Derivative Instruments:

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The use of foreign currency forward contracts is governed by the Company''s strategy approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the Company''s Risk Management Policy. The Company does not use forward contracts for speculative purposes.

3. RELATED PARTY DISCLOSURES :

Disclosure as required by Accounting Standard (AS) - 18 "Related Party Disclosures" as prescribed under section 211 (3C) of the Companies Act, 1956.

(a) Names of the related parties and description of relationship:

(i) Holding / Ultimate Holding Company : Tata Chemicals Limited

(ii) Subsidiary Companies: Rallis Chemistry Exports Ltd

Metahelix Life Sciences Ltd

Dhaanya Seeds Ltd (Merged with Metahelix Life Sciences Ltd. w.e.f 1st April, 2013)

Zero Waste Agro Organics Ltd. w.e.f 18th October,2012

(iii) Key Management Personnel : Mr.V.Shankar - Managing Director & CEO

4. EMPLOYEE BENEFIT OBLIGATIONS: Defined-Benefits Plans:

The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount) and a supplemental pay scheme (a life long pension). The gratuity scheme covers substantially all regular employees, while supplemental pay plan covers certain former executives. In the case of the gratuity scheme, the Company contributes funds to Gratuity Trust, which is irrevocable, while the supplemental pay scheme is not funded. Commitments are actuarially determined at year-end. The actuarial valuation is done based on "Projected Unit Credit" method. Gains and losses of changed actuarial assumptions are charged to the Statement of profit and loss.

Defined-Contribution Plans:

Amount recognised as expense and included in the Note 24 - "Contribution to Provident and Other Funds" - Rs. 440.65 lacs (Previous Year Z408.53 lacs).

5. Trade Payable includes amount payable to Micro, Small and Medium Enterprises as follows:

a The total amount of delayed payments during the year aggregate Rs. 58.48 lacs in respect of 28 parties with amounts ranging from Rs. 0.02 lacs to Rs.20.96 lacs. (Previous Year Rs. *14.94 lacs in respect of 7 parties with amounts ranging from Rs. 0.03 lacs to T4.01 lacs).

b The amount of principal outstanding in respect of the above as at Balance Sheet date is Rs. 843.45 lacs in respect of 45 parties (Previous Year T596.34 lacs in respect of 31 parties with amounts ranging from f0.13 lacs to 144.29 lacs) with amounts ranging from Rs. 0.15 lacs to Rs. 152.90 lacs.

c The total interest payable on account of delayed payment during the year is Rs. 0.15 lacs. The Company has made payment of Rs. 0.15 lacs during the year. The total interest payable aggregates Rs. NIL (Previous Year Rs. NIL) and outstanding balance as at the year end is Rs. NIL (Previous Year Rs. NIL).

6. The Company had invested Rs. 880.00 lacs in Non-Convertible Debentures ("NCDs") of Advinus Therapeutics Ltd. having a coupon rate of 4.25%. The NCDs is redeemed between December 2010 and May 2013 at a premium of 25%. Income recognised during the year includes Rs. 0.38 lacs (Previous Year T28.49 lacs) in respect of redemption premium determined on the basis of the internal rate of return. During the year debentures amounting to Rs. 103.84 lacs (Previous Year T296.15 lacs) were redeemed at a 25% premium which aggregated Rs. 25.96 lacs (Previous Year T74.04 lacs).

7. Previous years’ figures have been regrouped / restated wherever necessary to conform to the classification of the current year.


Mar 31, 2013

A. The Equity Shares of the Company have voting rights and are subject to the preferential rights as prescribed under law or those of the preference shareholders, if any. The Equity Shares are also subject to restrictions as prescribed under the Companies Act, 1956.

b. As per records of the company, no calls remain unpaid by the directors and officers of the Company as on 31st March, 2013.

a. 750 (Previous Year: 750) 9.05% Secured Redeemable Non-Convertible Debentures (2010-11 Series 1) having a face value of Rs. 10 lacs each redeemable at par on 29th October, 2013.

b. These Non Convertible Debentures are secured by a first pari-passu mortgage over factory building and certain plant and machinery of Ankleshwar and Lote units.

c. The Company can repurchase some or all of the debentures at any time prior to date of redemption. The Company has the right to re-issue debentures bought back subject to provisions of the Companies Act, 1956.

Notes :

(i) # Other guarantees issued by Bank for which the Company is contingently liable. These are covered by the charge created in favour of Company''s bankers by way of hypothecation of stock and debtors.

(ii) The Company does not expect any liability in respect of items (a), (b) and (c ) to devolve in respect of its exposure and therefore no provision has been made in respect thereof.

(ii) Other Commitments :

(A) During the financial year 2010-11, the Company had acquired a majority of the equity shares of Metahelix Life Sciences Limited (Metahelix). Besides, the shares already acquired, it has made the following Commitmets:

(a) to acquire shares from certain shareholders (other than founder shareholders) 2,591 equity shares for an amount aggregating Rs. 506.77 lacs. (previous year 2,591 equity shares held by them for an amount aggregating Rs. 506.77 lacs.)

(b) to allow the founder shareholders, a put option exercisable over a period of 3 years (Previous Year: 4 years), 8,433 shares held by them for an amount aggregating Rs. 1,649.11 lacs (Previous Year: 11,244 shares for an amount aggregating Rs. 2,199.21 lacs).

At the end of 3 years, the Company has a call option to acquire the balance shares held by the founder shareholders, at the fair market value as at the date of exercise.

(B) During the financial year 2012-13, the Company has acquired 12,956 equity shares of Zero Waste Agro Organics Private Limited (ZWAOPL) for an amount aggregating to Rs. 1,000.07 lacs. Besides, the shares already acquired, it has made the following commitments:

(a) Investment of Rs. 1,900.03 lacs in respect to ZWAOPL effectively taking the shareholding of Rallis to 50.06%.

(C) Estimated amount of contracts remaining to be executed on capital account of tangible assets is Rs. 934.83 lacs (Previous Year Rs. 1,848.66 lacs) against which advances paid aggregate Rs. 144.54 Lacs (Previous Year Rs. 150.21 lacs) and Intangible assets is Rs. 12.80 lacs (Previous Year Rs. 95.79 lacs).

(D) For derivatives and lease commitments, refer note no 42 and 28 respectively.

1 The Company has procured motor vehicles under non-cancellable operating leases. Lease rent charged to the Statement of Profit and Loss during the year is Rs. 427.84 lacs (Previous Year Rs. 203.53 lacs) net of amount recovered from employees Rs. 3.59 lacs (Previous Year Rs. 2.34 lacs). Disclosures in respect of non-cancellable leases are given below:

During the year the Company has also incurred Rs. 919.94 lacs (Previous Year Rs.471.14 lacs) towards development expenditure which is included under Intangible Assets under Development/Capital work in progress. The total amount included in Intangible Assets under Development/Capital work in progress as at 31st March 2013 is Rs. 1,094.17 lacs (Previous Year Rs. 1,638.98 lacs).

Included in the foregoing is an amount of Rs. 422.69 lacs (Previous Year Rs. 582.94 lacs) paid to an external agency.

2 SEGMENT REPORTING:

Segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standard (AS-17) on Segment Reporting as notified under the Companies (Accounting Standards) Rules, 2006.

3 FOREIGN CURRENCY EXPOSURES

The Company, in accordance with its risk management policies and procedures, enters into foreign currency forward contracts and currency option contracts to manage its exposure in foreign exchange rate variations. The counter party is generally a bank. These contracts are for a period between one day and four years.

Derivative Instruments:

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The use of foreign currency forward contracts is governed by the Company''s strategy approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the Company''s Risk Management Policy. The Company does not use forward contracts for speculative purposes.

The net loss on the derivative instrument of Rs. 63.40 lacs (net of Deferred Tax Asset of Rs. 30.45 lacs) recognised in 2011-2012 in the Hedging Reserve Account has been recycled in the Statement of Profit and Loss in 2012-2013.

4 RELATED PARTY DISCLOSURES :

Disclosure as required by Accounting Standard (AS) - 18 "Related Party Disclosures" as prescribed under section 211 (3C) of the Companies Act, 1956.

(a) Names of the related parties and description of relationship:

(i) Holding / Ultimate Holding Company : Tata Chemicals Limited

(ii) Subsidiary Companies: Rallis Chemistry Exports Ltd

Metahelix Life Sciences Ltd Dhaanya Seeds Ltd

Zero Waste Agro Organics Pvt. Ltd. w.e.f 18th October,2012 Rallis Australasia Pty Ltd.(Liquidated on 25th January, 2012)

(iii) Key Management Personnel : Mr.V.Shankar - Managing Director & CEO

5 EMPLOYEE BENEFIT OBLIGATIONS:

Defined-Benefits Plans:

The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount) and a supplemental pay scheme (a life long pension). The gratuity scheme covers substantially all regular employees, while supplemental pay plan covers certain executives. In the case of the gratuity scheme, the Company contributes funds to Gratuity Trust, which is irrevocable, while the supplemental pay scheme is not funded. Commitments are actuarially determined at year-end. The actuarial valuation is done based on "Projected Unit Credit" method. Gains and losses of changed actuarial assumptions are charged to the Statement of profit and loss.

Defined-Contribution Plans:

Amount recognised as expense and included in the Note 24 — "Contribution to Provident and Other Funds" — Rs.408.53 lacs (Previous Year Rs.413.78 lacs).

6 TRADE PAYABLE INCLUDES AMOUNT PAYABLE TO MICRO, SMALL AND MEDIUM ENTERPRISES AS FOLLOWS:

a The total amount of delayed payments during the year aggregate Rs. 14.94 lacs in respect of 7 parties with amounts ranging from Rs. 0.03 lacs to Rs. 4.01 lacs. (Previous Year Rs.37.62 lacs in respect of 7 parties with amounts ranging from Rs.0.57 lacs to Rs.17.11 lacs).

b The amount of principal outstanding in respect of the above as at Balance Sheet date is Rs. 596.34 lacs in respect of 31 parties (Previous Year Rs.379.67 lacs in respect of 28 parties with amounts ranging from Rs.0.02 lacs to Rs.166.60 lacs) with amounts ranging from Rs. 0.13 lacs to Rs. 144.29 lacs.

c The total interest payable on account of delayed payment during the year is Rs. 0.03 lacs. The Company has made payment of Rs. 0.14 lacs during the year. The total interest payable aggregates Rs. Nil (Previous Year Rs.0.12 lacs) and this entire amount was paid, outstanding balance as at the year end is Nil.

7 The Company has invested Rs. 880.00 lacs in Non-Convertible Debentures ("NCDs") of Advinus Therapeutics Ltd. having a coupon rate of 4.25%. The NCDs will be redeemed between December 2010 and May 2013 at a premium of 25%. Income recognised during the year includes Rs. 28.49 lacs (Previous Year Rs. 22.72 lacs) in respect of redemption premium determined on the basis of the internal rate of return. During the year debentures amounting to Rs. 296.15 lacs (Previous Year Rs. 290.40 lacs) were redeemed at a 25% premium which aggregated Rs. 74.04 lacs (Previous Year Rs. 72.60 lacs).

8 During the year, the Company has acquired / subscribed to equity shares comprising 22.81% of the equity shares of Zero Waste Agro Organics Private Limited (ZWAOPL).

9 During the previous year, Rallis Australasia Pty. Ltd. a subsidiary of the Company has been liquidated. The Company has received an amount of Rs. 107.69 lacs as a surplus over its investment on account of liquidation.

10 Previous years''s figures have been regrouped / restated wherever necessary to conform to the classification of the current year.


Mar 31, 2012

A. The Equity Shares of the Company have voting rights and are subject to the preferential rights as prescribed under law or those of the preference shareholders, if any. The Equity Shares are also subject to restrictions as prescribed under the Companies Act, 1956.

b. Shares held by Holding /Ultimate Holding Company and /or its subsidiaries /associates:

Out of total equity shares issued by the Company, shares held by its holding company, ultimate holding company and its subsidiaries/associates are as below:

Footnotes:

a. A sum of Rs Nil (Previous Year Rs437.83 lacs) representing amount received by the Company in earlier years on surrender of tenancy rights has been transferred to the General Reserve.

b. An amount of Rs Nil (Previous Year Rs648.23 lacs) out of the Capital Redemption Reserve was utilised for the issue of Nil (Previous Year 6,482,295) fully paid up Bonus Shares of Rs 10 each.

c. An amount of Rs Nil (Previous Year Rs17.80 lacs)appropriated to Investment Allowance Reserve has been fully utilized for acquisition of new plant and machinery, the balance has been transferred to General Reserve.

d. As the entity is not engaged in non banking finance activities the amount appropriated to Reserve under section 45IC of the Reserve Bank of India Act, 1934, a balance of Rs Nil (Previous Year Rs10.39 lacs) has been transferred to General Reserve.

e. The amount appropriated/transferred to General Reserve during the year comprises

(a) Rs Nil (Previous Year Rs466.02 lacs) transferred as per footnotes a,c and d.

(b) Rs 1,013.90 lacs (Previous YearRs 1,262.13 lacs) has been appropriated out of the Statement of Profit and Loss to the General Reserve during the year.

a. 750 (Previous Year: 750) 9.05% Secured Redeemable Non-Convertible Debentures (2010-11 Series 1) having a face value of Rs 10 lacs each redeemable at par on 29th October, 2013.

b. These Non Convertible Debentures are secured by a first pari-passu mortgage over factory building and certain plant and machinery of Ankleshwar and Lote units.

c. The Company can repurchase some or all of the Debentures at any time prior to date of redemption. The Company has the right to re-issue debentures bought back subject to provisions of The Companies Act, 1956.

Footnotes:

1. Cost of buildings includes cost of 50 shares (Previous Year 50 shares) of Rs 50 each fully paid and cost of 5 shares (Previous Year 5 shares) of Rs 100 each fully paid in respect of ownership flats in 7 (Previous Year 7) Co-operative Societies.

2. Buildings include an asset having gross block of Rs 169.29 lacs (Previous Year Rs 181.63 lacs) and net block of Rs 116.06 lacs (Previous Year Rs127.10 lacs) where the conveyance in favour of the Company is not completed.

3. Fixed assets include Rs 434.98 lacs (Previous Year Rs449.45 lacs) representing the book value of assets held for disposal. The Management expects to recover amounts higher than the carrying value of these assets.

1 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR) :

(i) Contingent Liabilities: lacs

Particulars 2011-12 2010-11

a. Claims against the Company not acknowledged as debts:

- Sales Tax 2,158.63 1,916.59

- Excise Duty 360.84 360.84

- Customs Duty 149.50 149.50

- Income Tax 6,655.04 6,583.76

- Service Tax 42.14 35.03

- Property Cases 47.36 47.36

- Labour Cases 109.00 103.75

- Other cases 472.01 453.79

- Number of cases where amount is not quantifiable 41 Nos.

(Previous Year 29 Nos.)

b. Guarantees # 3.10 1.10

c. Other money for which the company is contingently liable:

- Bills Discounted 104.10 338.56

10,101.72 9,990.28

(ii) Other Commitments:

(A) During the financial year 2010-11, the Company had acquired a majority of the equity shares of Metahelix Life Sciences Limited (Metahelix). Besides, the shares already acquired, it has made the following commitments:

(a) to acquire shares from certain shareholders (other than founder shareholders) 2,591 equity shares amount aggregating Rs 506.77 lacs. (previous year 16,099 equity shares held by them for an amount aggregating Rs3,148.80 lacs.)

(b) to allow the founder shareholders, a put option exercisable over a period of 4 years (Previous Year: 5 years), 11,244 shares held by them for an amount aggregating Rs 2,199.21 lacs (Previous Year: 14,055 shares for an amount aggregating Rs2,749.02 lacs).

At the end of 4 years, the Company has a call option to acquire the balance shares held by the founder shareholders, at the fair market value as at the date of exercise.

(B) Estimated amount of contracts remaining to be executed on capital account is Rs 1,944.45 lacs ( Previous Year Rs 2,451.22 lacs) against which advances paid aggregate to Rs 144.15 Lacs (Previous Year Rs 1,676.34 lacs).

Notes :

(i) # Other guarantees issued by Bank for which the Company is contingently liable. These are covered by the charge created in favour of Company's bankers by way of hypothecation of stock and debtors.

(ii) The Company does not expect any liability in respect of items (a), (b) and (c ) of item (i) to devolve in respect of its exposure and therefore no provision has been made in respect thereof.

2 The Company has procured 126 motor vehicles (Previous Year 44 Nos) under non-cancellable operating leases. Lease rent charged to the Statement of Profit and Loss during the year is Rs 203.53 lacs (Previous Year Rs 23.81 lacs) net of amount recovered from employees Rs 2.34 lacs (Previous Year Rs8.22 lacs). Disclosures in respect of non-cancellable leases are given below:

During the year the Company has also incurred Rs 471.14 lacs (Previous Year Rs 445.98 lacs) towards capital research and development expenditure which is included under Intangible Assets under Development/Capital work in progress. The total amount included in Intangible Assets under Development/Capital work in progress as at 31st March 2012 is Rs 1,638.98 lacs (Previous Year Rs 1,167.84 lacs).

Included in the foregoing is an amount of Rs 582.94 lacs (Previous Year Rs364.14 lacs) paid to an external agency.

Footnotes:

(i) Licensed Capacity - Delicensed vide Gazette Notification No. S.O.477 (E) dated 25.07.1991.

(ii) Figures in italics are in respect of the previous year.

(iii) Production figures are net of captive consumption and exclude by-products.

(iv) Production includes quantities manufactured at sub-contracting plants. Installed capacity represents capacity installed at the Company's facilities.

(v) N.A. = Not Applicable.

# During the year ended 31st March, 2012, the Company's Equity Shares of face value of Rs 10 each were sub-divided into ten Equity Shares of face value of Rs 1 each. Hence Basic and Diluted Earning Per Share for previous year presented has been adjusted as required by Accounting Standard 20 "Earning Per Share'.

3 FOREIGN CURRENCY EXPOSURES :

The Company, in accordance with its risk management policies and procedures, enters into foreign currency forward contracts and currency option contracts to manage its exposure in foreign exchange rate variations. The counter party is generally a bank. These contracts are for a period between one day and four years.

Derivative Instruments:

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The use of foreign currency forward contracts is governed by the Company's strategy approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the Company's Risk Management Policy. The Company does not use forward contracts for speculative purposes.

(a) The following derivative instruments are outstanding as at balance sheet date:

4 EMPLOYEE BENEFIT OBLIGATIONS:

Defined-Benefits Plans:

The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount) and a supplemental pay scheme (a life long pension). The gratuity scheme covers substantially all regular employees, while supplemental pay plan covers certain executives. In the case of the gratuity scheme, the Company contributes funds to Gratuity Trust, which is irrevocable, while the supplemental pay scheme is not funded. Commitments are actuarially determined at year-end. The actuarial valuation is done based on "Projected Unit Credit" method. Gains and losses of changed actuarial assumptions are charged to the Statement of profit and loss.

*The figures in respect of previous one period is not available.

The contributions expected to be made by the Company during the financial year 2012-13 amount to Rs 230.18 lacs. Defined-Contribution Plans:

Amount recognised as expense and included in the Note 23 — "Contribution to Provident and Other Funds" — Rs 413.78 lacs (Previous Year Rs450.21 lacs).

5 TRADE PAYABLE INCLUDES AMOUNT PAYABLE TO MICRO, SMALL AND MEDIUM ENTERPRISES AS FOLLOWS:

a The total amount of delayed payments during the year aggregate Rs 37.62 lacs in respect of 7 parties with amounts ranging from Rs 0.57 lacs to Rs 17.11 lacs. (Previous Year Rs 1,552.36 lacs in respect of 61 parties with amounts ranging from Rs 0.01 lacs to Rs 47.48 lacs). b The amount of principal outstanding in respect of the above as at Balance Sheet date is Rs 379.67 lacs in respect of 28 parties (Previous Year Rs 339.06 lacs in respect of 35 parties with amounts ranging from Rs 0.06 lacs to Rs 83.39 lacs) with amounts ranging from Rs 0.02 lacs to Rs 166.60 lacs.

c The total interest payable on account of delayed payment during the year is Rs 0.12 lacs. The Company has made payment of Rs 34.37 lacs during the year. The total interest payable aggregates Rs 0.12 lacs (Previous Year Rs 40.78 lacs) and this entire amount was outstanding as at the year end.

6 The Company has invested Rs 880.00 lacs in Non-Convertible Debentures ("NCDs") of Advinus Therapeutics Pvt. Ltd. having a coupon rate of 4.25%. The NCDs will be redeemed between December 2010 and May 2013 at a premium of 25%. Income recognised during the year includes Rs 22.72 lacs (Previous Year Rs30.44 lacs) in respect of redemption premium determined on the basis of the internal rate of return. During the year debentures amounting to Rs 290.40 lacs (Previous Year Rs 189.62 lacs) were redeemed at a 25% premium which aggregated Rs 72.60 lacs (Previous Year Rs47.96 lacs).

7 During the year, Rallis Australasia Pty. Ltd. a subsidiary of the Company has been liquidated. The Company has received an amount of Rs 107.69 lacs as a surplus over its investment on account of liquidation.

8 Previous years's figures have been regrouped / restated wherever necessary to conform to the classification of the current year.


Mar 31, 2011

1. Contingent Liabilities: -

(a) Demands contested by the Company Rs. lacs

As at 31st March 2011 2010

- Sales Tax* 1,916.59 1,917.82

- Excise Duty 360.84 378.77

- Customs Duty 149.50 144.10

- Income Tax 6,583.76 3,754.60

- Service Tax 35.03 1.85

- Property Cases 47.36 47.36

- Labour Cases 103.75 156.71

- Other Cases 453.79 449.82

- Number of cases where amount is not quantifiable 29 Nos; (Previous year 31 Nos)

(b) Bills discounted 338.56 Nil

(c) Uncalled partly paid shares held as Investments Nil 4.34

(d) Other guarantees issued by Bank for which the Company is contingently liable to Rs. 1.10 lacs (Previous Year Rs.2.00 lacs). These are covered by the charge created in favour of Companys bankers by way of hypothecation of stock and debtors.

The Company does not expect any liability in respect of item (a), (b) and (d) to devolve in respect of its exposure and therefore no provision has been made in respect thereof.

2. Estimated amount of contracts remaining to be executed on capital account is Rs. 2,451.22 lacs (Previous Year Rs. 8,550.75 lacs) against which advances paid aggregate to Rs. 1,676.34 lacs (Previous Year Rs.3,145.49 lacs).

3. During the year, the Company acquired a majority of the equity shares of Metahelix Life Sciences Limited (Metahelix). Besides, the shares already acquired, it has made the following commitments:

(a) to acquire from certain shareholders (other than founder shareholders) 16,099 equity shares held by them for an amount aggregating Rs. 3,148.80 lacs;

(b) to allow the founder shareholders, a put option exercisable over a period of 5 years, 14,055 shares held by them for an amount aggregating Rs. 2,749.02 lacs;

At the end of 5 years, the Company has a call option to acquire the balance shares held by founder shareholders, at the fair market value as at the date of exercise.

4. The shareholders approved the issue of 6,482,296 fully paid up Equity Shares of Rs. 10 each as bonus share in the proportion of one bonus share for every two equity shares held by postal ballot on May 29, 2010. Accordingly, a sum of Rs. 648.23 lacs has been transferred to Equity Share Capital Account from Capital Redemption Reserve Account. Consequently, the earnings per share have been adjusted for all the periods presented. As no cash flows were involved, the same has not been disclosed under financing activity.

5. Fixed assets include Rs. 449.45 lacs (Previous Year Rs. 720.14 lacs) representing the book value of assets held for disposal. The Management expects to recover amounts higher than the carrying value of these assets.

6. Amount payable to Micro, Small and Medium Enterprises are as follows:

(a) The total amount of delayed payments during the year aggregates Rs. 1,552.36 lacs in respect of 61 parties (Previous Year Rs. 1174.14 lacs in respect of 106 parties with amounts ranging from Rs. 0.01 lacs to Rs. 34.61 lacs) with amounts ranging from Rs. 0.01 lacs to Rs. 47.48 lacs.

(b) The amount of principal outstanding in respect of the above as at Balance Sheet date is Rs. 339.06 lacs in respect of 35 parties (Previous Year Rs. 387.20 lacs in respect of 90 parties with amounts ranging from Rs. 0.01 lacs to Rs. 171.41 lacs) with amounts ranging from Rs. 0.06 lacs to Rs. 83.39 lacs.

(c) The total interest payable on account of delayed payment during the year is Rs. 17.09 lacs. The Company has made payments of Rs. 1.20 lacs during the year. The total interest payable aggregates to Rs. 40.78 lacs (Previous Year Rs. 28.49 lacs) and this entire amount was outstanding as at the year end.

7. Secured Loans :-

(a) Bank overdrafts and temporary loans have been secured by a first charge by way of hypothecation of stocks and receivables. The hypothecation also extends to guarantees issued by the Companys Bankers in the ordinary course of business.

(b) Loans from others on account of purchase of vehicles have been secured by way of hypothecation of vehicles.

(c) 750 Secured, Redeemable, Non Convertible Debentures 2010-11 Series I (Non Convertible Debentures) of face value of Rs. 10 lacs each were issued on 29.10.2010 amounting to Rs. 7,500.00 lacs with redemption period of 3 years at 9.05% rate of interest. These Non Convertible Debentures are secured by a first pari-passu mortgage over factory building and certain plant and machinery of Ankleshwar and Lote units.

The terms of operating lease do not contain any exceptional / restrictive covenants. Premises are taken by the Company on operating leases that are cancellable.

8. “Sundry Debtors” include Rs. Nil (Previous Year Rs. Nil), being amount receivable from Rallis Australasia Pty. Ltd. (RAPL), a wholly owned subsidiary. The maximum amount outstanding during the year was Rs. 5.85 lacs (Previous Year Rs.1,101.46 lacs).

Also, included in “Loans and Advances” is a sum of Rs. 18.61 lacs (Previous Year Rs.18.61) being amount due from Rallis Chemistry Exports Ltd., a wholly owned subsidiary. The maximum amount outstanding during the year was Rs. 18.61 lacs (Previous Year Rs. 18.61 lacs).

* includes amount of Rs. 364.14 lacs (Previous Year Rs. 129.37 lacs) paid to an external agency.

# Recast

During the year the Company has also incurred Rs. 445.98 lacs (Previous Year Rs. 271.31 lacs) towards product development and registration which is included under Capital Work in Progress (“CWIP”). The total amount included in CWIP as at 31st March 2011 Rs. 1,161.53 lacs (Previous Year Rs. 715.57 lacs). Out of the CWIP a sum of Rs. Nil lacs (Previous Year Rs. 398.44 lacs) was written off during the year.

* Commission payable to Managing Director for the year 2010-11 includes Rs. 40 lacs relating to the previous year (Previous Year Rs. 5 lacs).

# Commission payable to Non Whole Time Directors for the year 2009-10 includes Rs. 5 lacs relating to the corresponding previous year.

(b) Directors Remuneration

The remuneration reported above excludes contributions to gratuity fund and provision for leave encashment since the same are ascertained on an aggregated basis for the Company as a whole by way of actuarial valuation and separate values attributable to the Managing Director are not available.

9. “Other Income” includes net gain of Rs. 177.14 lacs (Previous Year net gain of Rs. 134.34 lacs grouped under “Other Income”) on account of foreign currency translation differences.

10. Segment Reporting

The Company has determined its business segment as “Agri - Inputs” comprising of Pesticides, Plant Growth Nutrients and Seeds. The other business segment comprises “Polymer” and is non reportable.

b. Secondary Segment Information

Figures in italics relate to the previous year.

All tangible and intangible fixed assets of the Company are situated in India and therefore cost incurred during the year for acquisition of such assets under different geographic segments is not furnished.

Footnotes:

(i) Unallocable assets include Deferred Tax Assets, Investments, Advance Income Tax, Advance Fringe Benefits Tax and Interest Accrued on Investments.

(ii) Unallocable liabilities includes Secured Loans, Unsecured Loans, Provisions for Equity Dividend and tax thereon, Provisions for Preference Dividend and tax thereon, Provision for Supplemental Payments on Retirement, Provision for Pension under Voluntary Retirement Schemes and Provision for Income and Fringe Benefit Tax.

(iii) Unallocable income includes income from investment activities.

(iv) Unallocable expenditure includes charge in respect of Supplemental Payments on retirement valued on actuarial basis.

11. Related Party Disclosures

Disclosure as required by Accounting Standard (AS) - 18 “Related Party Disclosures” as prescribed under section 211 (3C) of the Companies Act, 1956.

(a) Names of the related parties and description of relationship:

(i) Promoters: Tata Chemicals Limited

Tata Tea Limited - up to 18.08.2009

Tata Sons Limited - up to 18.08.2009

Tata Investment Corporation

Ewart Investments Limited

Tata AIG Life Insurance Co. Limited (w.e.f.- 21.05.2010)

(ii) Holding Company: Tata Chemicals Limited on and from 09.11.2009

(iii) Subsidiary Companies: Rallis Australasia Pty. Ltd. (Under liquidation from-31.03.2011) Rallis Chemistry Exports Ltd. as and from 07.07.2009 Metahelix Life Sciences Ltd (w.e.f -30.12.2010) Dhaanya Seeds Ltd. (w.e.f -30.12.2010)

(iv) Key Management Personnel: Mr.V.Shankar - Managing Director & CEO

Footnotes: -

(i) Licensed Capacity - Delicensed vide Gazette Notification No. S.O.477 (E) dated 25.07.1991.

(ii) Figures in italics are in respect of the previous year.

(iii) Production figures are net of captive consumption and exclude by-products (Previous Year Recast).

(iv) Production includes quantities manufactured at sub-contracting plants. Installed capacity represents capacity installed at Companys facilities.

(v) N.A. = Not Applicable.

Footnote: -

Figures in italics are in respect of the previous year.

Out of investments made during the year disclosed above, Rs. 31,736.06 lacs (Previous Year Rs. 67,914.74 lacs) were on account of switches not requiring the use of Cash and Cash Equivalents. Therefore, these amounts are not included under “Investing Activities” in the Cash Flow Statement.

12. The Company has invested Rs. 880.00 lacs in Non - Convertible Debentures (“NCDs”) of Advinus Therapeutics Pvt. Ltd. having a coupon rate of 4.25%. The NCDs will be redeemed between December 2010 and May 2013 at a premium of 25%. Income recognised during the year includes Rs. 30.44 lacs (Previous Year Rs. 33.32 lacs) in respect of redemption premium determined on the basis of the internal rate of return. During the year debentures amounting to Rs. 189.62 lacs were redeemed at a 25% premium which aggregated Rs. 47.96 lacs.

13. Foreign Currency Exposures :-

The Company, in accordance with its risk management policies and procedures, enters into foreign currency forward contracts and currency option contracts to manage its exposure in foreign exchange rate variations. The counter party is generally a bank. These contracts are for a period between one day and four years.

Derivative Instruments:

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The use of foreign currency forward contracts is governed by the Companys strategy approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the Companys Risk Management Policy. The Company does not use forward contracts for speculative purposes.

The net gain on the derivative instrument of Rs. 73.66 lacs (net of Deferred Tax Liability of Rs. 35.38 lacs) is recognised in the Hedging Reserve Account as at 31st March, 2011 of which Rs. 62.02 lacs (Previous Year Rs. 64.49 lacs) is expected to be reclassified in the Profit and Loss Account by 31st March 2012.

14. Employee Benefit Obligations

Defined-Contribution Plans

The Company makes contributions towards provident fund, family pension fund and superannuation fund to defined contribution retirement benefit plans for qualifying employees. The provident fund is administered by the Trustees of Rallis India Limited Provident Fund Trust, the family pension fund is administered by the Government of India and the superannuation fund is administered by the Life Insurance Corporation of India and HDFC Standard Life Insurance Company Ltd. Under the schemes, the Company is required to contribute a specified percentage of salary to the retirement benefit schemes to fund the benefit. The rules of the Companys Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest at the rate declared by the Employees Provident Fund by the Government under paragraph 60 of the Employees Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. Having regard to the assets of the Fund and the return on the investments, the Company does not expect any deficiency in the foreseeable future.

A sum of Rs. 450.21 lacs (Previous Year Rs. 383.96 lacs) has been charged to the revenue account in this respect.

Defined-Benefits Plans

The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount) and a supplemental pay scheme (a life long pension). Benefits under the defined benefit plans are typically based either on years of service and the employees compensation (generally immediately before retirement). The gratuity scheme covers substantially all regular employees, while supplemental pay plan covers certain executives. In the case of the gratuity scheme, the Company contributes funds to Gratuity Trust, which is irrevocable, while the supplemental pay scheme is not funded. Commitments are actuarially determined at year-end. The actuarial valuation is done based on “Projected Unit Credit” method. Gains and losses of changed actuarial assumptions are charged to the profit and loss account.

The plan assets are managed by the Gratuity Trust formed by the Company. The management of funds is entrusted with the Life Insurance Corporation of India and HDFC Standard Life Insurance Company Limited.

15. Rallis Australasia Pty. Ltd., a subsidiary of the Company, has applied for voluntary liquidation as of 31st March, 2011. The Company expects to recover an amount higher than the carrying value of the investment.

16. Previous years figures have been regrouped / restated wherever necessary to conform to the classification of the current year.


Mar 31, 2010

Rs. lacs

As at As at 31st March, 31st March, 2010 2009

1. Contingent Liabilities :-

(a) Demand contested by the Company

Sales tax 1,917.82 1,651.18

Excise duty 378.77 378.77

Customs Duty 144.10 144.10

Income Tax 3,754.60 1,455.55

Service tax 1.85 1.85

Property cases 47.36 63.56

Labour cases 156.71 197.86

Other Cases 449.82 536.87

Number of cases where amount is not quantifiable 31 Nos.; (Previous Year 26 Nos.)

(b) Bills discounted Nil 987.36

(c) Uncalled partly paid shares held as Investments 4.34 4.34

(d) The Company has given a guarantee to a bank against the borrowings of its subsidiary. As at 31st March, 2010, the amount outstanding in respect of the borrowing in the financial statements of the subsidiary amounts to Rs. Nil (AUD Nil) (Previous Year Rs. 192.38 lacs) (AUD 0.55 million).

(e) Other guarantees given to Government authorities for which the Company is contingently liable to Rs. 2.00 lacs (Previous Year Rs. 41.60 lacs).

The Company does not expect any liability in respect of item (a), (b), (d) and (e) to devolve in respect of its exposure and therefore no provision has been made in respect thereof.

2. Estimated amount of contracts remaining to be executed on capital account is Rs. 8,550.75 lacs (Previous Year Rs. 1,703.28 lacs) including advances paid aggregating Rs. 3,145.49 lacs (Previous Year Rs. 1,083.94 lacs).

3. Fixed assets include Rs. 720.14 lacs (Previous Year Rs. 769.52 lacs) representing the book value of assets held for disposal. The Management expects to recover amounts higher than the carrying value of these assets.

4. Amount payable to Micro, Small and Medium Enterprises are as follows:

a. The total amount of delayed payments during the year aggregated to Rs. 1,174.14 lacs in respect of 106 parties (Previous Year Rs. 514.02 lacs in respect of 117 parties with amounts ranging from Rs. 0.01 lac to Rs. 61.74 lacs) with amounts ranging from Rs. 0.01 lac to Rs. 34.61 lacs.

b. The amount of principal outstanding in respect of the above as at Balance Sheet date is Rs.387.20 lacs in respect of 90 parties (Previous Year Rs. 100.89 lacs in respect of 30 parties with amounts ranging from Rs. 0.06 lacs to Rs. 17.66 lacs) with amounts ranging from Rs. 0.01 lac to Rs. 171.41 lacs.

c. The total interest payable on account of delayed payment aggregates to Rs. 28.49 lacs (Previous Year Rs. 26.96 lacs) and this entire amount was outstanding as at the year end.

5. The charge in favour of the Company’s bankers by way of hypothecation of stocks and receivables has been created to secure facilities granted by the bankers in the normal course of business including guarantees executed, bank overdrafts and temporary loans.

6. Secured Loans :-

a. Bank overdrafts and temporary loans have been secured by a first charge by way of hypothecation of stocks and receivables.

b. Loans from others on account of purchase of vehicles have been secured by way of hypothecation of vehicles.

7. The Company has procured certain equipments under a non-cancellable operating lease which has expired last year. There are no future lease rentals payable by the Company against the operating lease arrangements as at the year end. Lease rent charged to Profit and Loss Account during the year is Rs. Nil (Previous Year Rs. 234.47 lacs).

8. “Sundry Debtors” include Rs. Nil (Previous Year Rs. 1,062.87 lacs), being amount receivable from a company under the same management, Rallis Australasia Pty. Ltd. (RAPL) (wholly owned subsidiary). The maximum amount outstanding during the year was Rs. 1,101.46 lacs (Previous Year Rs. 1,062.87 lacs). Also, included in “Loans and Advances” is a sum of Rs. 18.61 lacs (Previous Year Rs. Nil) being amount due from Rallis Chemistry Exports Ltd. The maximum amount outstanding during the year was Rs. 18.61 lacs (Previous Year Rs. Nil).

9. Consumption of raw materials, packing materials and stores and spare parts includes provisions of Rs. 340.92 lacs (Previous Year Rs. 280.95 lacs) for slow, non-moving and damaged stocks.

10. “Other Income” includes net gain of Rs. 134.34 lacs (Previous Year net loss Rs. 452.87 lacs grouped under “Other Expenses”) on account of foreign currency translation differences.

11. Segment Reporting :-

The Company has determined its business segment as “Agri - Inputs” comprising of Pesticides, Plant Growth Nutrients and Seeds. The other business segment comprises “Fine Chemicals” and is non-reportable.

12. Related Party Disclosures :-

Disclosure as required by Accounting Standard (AS) - 18 “Related Party Disclosures” as prescribed under Section 211(3C) of the Companies Act, 1956.

(a) Names of the related parties and description of relationship :

(i) Promoters:

Tata Tea Limited - up to 18/08/2009 Tata Sons Limited - up to 18/08/2009 Tata Chemicals Limited Tata Investment Corporation Limited Ewart Investments Limited

(ii) Holding Company: Tata Chemicals Limited on and from 09/11/2009

(iii) Subsidiary Companies: Rallis Australasia Pty. Ltd.

Rallis Chemistry Exports Ltd. as and from 07/07/2009 (iv) Key Management Personnel: Mr. V. Shankar - Managing Director & CEO

13. The Company has invested Rs. 880.00 lacs in Non-Convertible Debentures (NCDs) of Advinus Therapeutics Pvt. Ltd. having a coupon rate of 4.25% and will be redeemed in three equal instalments in the years 2011, 2012 and 2013 at a premium of 25%. Income recognised during the year includes Rs. 33.32 lacs (Previous Year Rs. 33.32 lacs) in respect of redemption premium determined on the basis of the internal rate of return.

14. Foreign Currency Exposures :-

The Company, in accordance with its risk management policies and procedures, enters into foreign currency forward contracts and currency option contracts to manage its exposure in foreign exchange rate variations. The counter party is generally a bank. These contracts are for a period between one day and four years.

Derivative Instruments:

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The use of foreign currency forward contracts is governed by the Company’s strategy approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the Company’s Risk Management Policy. The Company does not use forward contracts for speculative purposes.

15. Employee Benefit Obligations :-

Defined-Contribution Plans

The Company makes contributions towards provident fund, family pension fund and superannuation fund to defined- contribution retirement benefit plans for qualifying employees. The provident fund is administered by the Trustees of Rallis India Limited Provident Fund Trust, the family pension fund is administered by the Government of India and the superannuation fund is administered by the Life Insurance Corporation of India and HDFC Standard Life Insurance Company Ltd. Under the schemes, the Company is required to contribute a specified percentage of salary to the retirement benefit schemes to fund the benefit. The rules of the Company’s Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest at the rate declared by the Employees’ Provident Fund by the Government under paragraph 60 of the Employees’ Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. Having regard to the assets of the Fund and the return on the investments, the Company does not expect any deficiency in the foreseeable future.

A sum of Rs. 383.96 lacs (Previous Year Rs. 382.31 lacs) has been charged to the revenue account in this respect.

Defined-Benefits Plans

The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount) and a supplemental pay scheme (a life long pension). Benefits under the defined-benefit plans are typically based either on years of service and the employee’s compensation (generally immediately before retirement). The gratuity scheme covers substantially all regular employees, while supplemental pay plan covers certain executives. In the case of the gratuity scheme, the Company contributes funds to Gratuity Trust, which is irrevocable, while the supplemental pay scheme is not funded. Commitments are actuarially determined at year-end. The actuarial valuation is done based on “Projected Unit Credit” method. Gains and losses of changed actuarial assumptions are charged to the Profit and Loss Account.

16. Previous year’s figures have been regrouped/restated wherever necessary to conform to the classification of the current year.

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