Annual Report 2016-17
Annual Report 2016-17
Annual Report 2016-17
Contents
Board of Directors and Corporate Information - - - - - - - - - - - - - - - - - - - 2
Chairman’s Statement - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 3-6
Notice of Meeting - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 7-24
Board’s Report - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 25-66
Management Discussion and Analysis - - - - - - - - - - - - - - - - - - - - - 67-81
Business Responsibility Report - - - - - - - - - - - - - - - - - - - - - - - - 82-95
Report on Corporate Governance - - - - - - - - - - - - - - - - - - - - - - - 96-118
Auditors’ Report - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 121-127
Balance Sheet - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 128
Statement of Profit and Loss - - - - - - - - - - - - - - - - - - - - - - - - - - 129
Cash Flow Statement - - - - - - - - - - - - - - - - - - - - - - - - - - - 130-131
Statement of change in Equity - - - - - - - - - - - - - - - - - - - - - - - - - 132
Notes to Financial Statements - - - - - - - - - - - - - - - - - - - - - - - 133-180
2
CHAIRMAN’S STATEMENT
Dear Shareholders,
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Jal Dhan and Jal Mitra
Water is a focus area for your Company under its Corporate Sustainability initiatives. This is explicit in our Integrated
Sustainability model developed to deploy the various interventions in this regard.
Our water management “Jal Dhan” and “Jal Mitra” project started from Lote (Chiplun), Maharashtra in 2013-14. The project
was aimed at increasing water availability for Agriculture of small and marginal farmers through watershed interventions.
In the said rain water harvesting project we focused on constructing various temporary and permanent structures like loose
boulder, Diversion dam, Check dam etc. These structures were initially created with the help of Rallis employee volunteers
and villagers from selected villages through shram daan i.e. providing ones’ service for community work. Looking at the
response and impact in the first year we have intensified the watershed project in 2014-15 and increased the number of
check dams, loose boulders, trenches, Vanarai bandhara, desilting of existing structures etc. By these interventions we have
harvested 140 million litres of water.
As a part of integrated approach we focused on enhancing livelihood of small and marginal farmers by providing them
knowledge of modern and improved techniques of farming. As Paddy is the major crop in this region, Rallis introduced SRI
technique under “Jal Mitra” (S R I – System of Rice Intensification - Improved method) for Paddy cultivation. This has resulted
in improving crop yields by 25% while reducing labor cost by 50% with lower seed cost and reduced water requirement
compared to normal method.
Your Company has now expanded its Jal Dhan programme to 20 villages of Ratnagiri, Vidarbha, Marathwada and Raigadh
regions covering 64,978 villagers including 22,639 Affirmative Action (AA) population. With the good rainfall during 2016
South West monsoon, 493.23 million litres of water was harvested through Rallis Jal Dhan intervention.
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Way Forward
As per our long term plan, in the year 2017-18 we have already started work in 8 more villages in Latur, Maharashtra to
intensify our Jal Dhan intervention and impact 1 lakh people with 25,000 AA population. This will be our continuing support
to TATA Group’s initiative towards water management and the National Water Mission.
RETURNS TO SHAREHOLDERS
Your Board is pleased to recommend a special one-time dividend of ` 1.25 per share out of the profit on assignment of
leasehold rights in the Turbhe land. If approved by the shareholders, the total dividend payout for the year will be ` 3.75
per share, including the one-time special dividend. The Total Shareholder Return (TSR) of an investment made in your
Company in March 2008, kept till the last trading day of March 2017 works out to be a healthy 35% per annum.
BOARD OF DIRECTORS
Mr. E. A. Kshirsagar and Mr. B. D. Banerjee have retired as Non-Executive, Independent Directors of your Company, on
reaching the retirement age as per the Governance Guidelines adopted by the Board. Your Board has placed on record its
sincere appreciation of the significant contribution made by Mr. Kshirsagar and Mr. Banerjee as Directors, especially on the
Committees which they chaired.
Dr. C. V. Natraj and Mrs. Padmini Khare Kaicker have joined the Board as Non-Executive, Independent Directors with effect
from 22nd July, 2016. The Board has also approved the re-appointment of Mr. V. Shankar as the Managing Director of the
Company, for a further term with effect from 13th March, 2017 upto 30th September, 2021, when he attains the retirement
age. Their appointments come up for shareholder approval at the Annual General Meeting, and your Board commends the
same for your approval.
ACKNOWLEDGEMENT
I would like to express my sincere appreciation for the continued support of the shareholders, Tata Group, suppliers and
commercial partners during the year. I would like to thank Mr. V. Shankar, Managing Director & CEO who, with his top
management team and the employees of the Company, have navigated Rallis through uncertainties during the year gone
by. I would also like to thank my colleagues on the Board for their invaluable support and guidance to the Company’s
management, which goes a long way in meeting the challenges in the Company’s growth journey.
Chairman
Mumbai
May 20, 2017
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RALLIS INDIA LIMITED
NOTICE OF MEETING
NOTICE is hereby given that the 69th Annual General Meeting of Rallis India Limited will be held at Walchand Hirachand Hall,
4th Floor, Indian Merchants’ Chamber Building, IMC Marg, Churchgate, Mumbai 400 020 on Friday, the 23rd June, 2017 at 3.00
p.m. to transact the following business:
ORDINARY BUSINESS
1. To receive, consider and adopt the Audited Financial Statements for the financial year ended 31st March, 2017 together
with the Reports of the Board of Directors and Auditors thereon.
2. To receive, consider and adopt the Audited Consolidated Financial Statements for the financial year ended 31st March,
2017 together with the Report of the Auditors thereon.
3. To declare dividend, including special dividend, for the financial year 2016-17 on Equity Shares.
4. To appoint a Director in place of Mr. Bharat Vasani (DIN: 00040243) who retires by rotation and being eligible offers himself
for re-appointment.
5. To appoint Statutory Auditors of the Company and fix their remuneration.
To consider and, if thought fit, to pass the following Resolution as an Ordinary Resolution:
RESOLVED THAT pursuant to the provisions of Section 139 and other applicable provisions, if any, of the Companies
Act, 2013 (‘the Act’) and The Companies (Audit and Auditors) Rules, 2014, as amended from time to time, B S R & Co.
LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022), be and is hereby appointed as Auditors of
the Company in place of the retiring auditors Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration
No. 117366W/W-100018), to hold office from the conclusion of this Annual General Meeting (‘AGM’) till the conclusion
of the Seventy Fourth (74th) AGM to be held in 2022 (subject to ratification of their appointment at every AGM, if
so required under the Act), at such remuneration including applicable taxes and out-of-pocket expenses, as may be
mutually agreed between the Board of Directors of the Company and the Auditors.
SPECIAL BUSINESS
6. Appointment of Dr. C. V. Natraj (DIN: 07132764) as Independent Director.
To consider and, if thought fit, to pass the following Resolution as an Ordinary Resolution:
RESOLVED THAT Dr. C. V. Natraj (DIN: 07132764), who was appointed as an Additional Director of the Company by the
Board of Directors with effect from 22nd July, 2016 and who holds office up to the date of this Annual General Meeting
under Section 161(1) of the Companies Act, 2013 (‘the Act’) and Article 116 of the Articles of Association of the Company,
but who is eligible for appointment and in respect of whom the Company has received a notice in writing under Section
160(1) of the Act from a Member, proposing his candidature for the office of Director, be and is hereby appointed a Director
of the Company.
RESOLVED FURTHER THAT pursuant to the provisions of Sections 149, 152, Schedule IV and other applicable provisions,
if any, of the Act and the Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended from time
to time, appointment of Dr. C. V. Natraj, who has submitted a declaration that he meets the criteria for independence as
provided in Section 149(6) of the Act and Regulation 16(b) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, as an Independent Director of the Company, not liable to retire by rotation, for a term of 5 years, with
effect from 22nd July, 2016 up to 21st July, 2021, be and is hereby approved.
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Notes:
1. The Explanatory Statement, pursuant to Section 102 of the Companies Act, 2013 (‘the Act’), in respect of the business
under Item Nos.5 to 9 above is annexed hereto. The relevant details of the Directors seeking re-appointment/ appointment
under Item Nos.4 and 6 to 8, pursuant to Regulations 26(4) and 36(3) of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) and as required under Secretarial
Standards - 2 on General Meetings issued by The Institute of Company Secretaries of India, are annexed.
2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND
VOTE INSTEAD OF HIM AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. Proxies, in order to be effective, must
be received at the Company’s Registered Office not less than 48 hours before the Meeting. Proxies submitted on behalf of
companies, societies, partnership firms, etc. must be supported by appropriate resolution/ authority, as applicable, issued
on behalf of the nominating organization.
Members are requested to note that a person can act as a proxy on behalf of members not exceeding 50 and holding in
the aggregate not more than 10% of the total share capital of the Company carrying voting rights. If a proxy is proposed to
be appointed by a Member holding more than 10% of the total share capital of the Company carrying voting rights, then
such proxy shall not act as a proxy for any other person or shareholder.
3. A route map giving directions to reach the venue of the 69th Annual General Meeting is given at the end of the Notice.
4. Process and manner for Members opting to vote through electronic means:
In compliance with the provisions of Section 108 of the Act, read with Rule 20 of The Companies (Management and
Administration) Rules, 2014, as amended from time to time, and Regulation 44 of the Listing Regulations, Members are
provided with the facility to exercise their right to vote electronically on all resolutions set forth in the Notice of the 69th
Annual General Meeting (‘AGM’). Members may cast their votes by using the e-voting services provided by National
Securities Depository Ltd. (‘NSDL’), i.e. facility of casting votes by using an electronic voting system from a place other than
the venue of the AGM (‘remote e-voting’). Instructions for remote e-voting are as under:
A. In case of Members receiving an email from NSDL (for Members whose email addresses are registered with the
Company/ Depository Participants):
(i) Open the email and open pdf file “Rallis India e-voting.pdf” with your Client ID or Folio No. as password. The
pdf file contains your user ID and password/ PIN for remote e-voting. Please note that this password is an initial
password.
(ii) Launch internet browser by typing the following URL: https://www.evoting.nsdl.com
(iii) Click on “Shareholder – Login”.
(iv) Insert User ID and password as initial password/ PIN noted in step (i) above. Click Login.
(v) You will now reach Password Change Menu, wherein you are required to mandatorily change your password/
PIN with new password of your choice, comprising of minimum 8 characters with at least one upper case (A-Z),
one lower case (a-z), one numeric value (0-9) and a special character (@,#,$, etc.). On first login, the system will
prompt you to change your password and update your contact details like mobile number, email address, etc. in
the user profile details of the folio, which may be used for sending future communications. You will also need to
enter a secret question and answer of your choice to retrieve your password in case you forget it. Note your new
password. It is strongly recommended that you do not share your password with any other person and that you
take utmost care to keep your password confidential.
(vi) You need to login again with the new credentials. Home page of e-voting will open. Click on “e-voting: Active
Voting Cycles”.
(vii) Select the “EVEN” (Electronic Voting Event Number) of Rallis India Limited. Now you are ready for e-voting as Cast
Vote page opens.
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(e) Mr. N. L. Bhatia (Membership No. FCS 1176/ CP No. 422) or failing him, Mr. Bhaskar Upadhyay (Membership No. FCS
8663/ CP No. 9625) of N L Bhatia & Associates, Practicing Company Secretaries have been appointed by the Board of
Directors of the Company as Scrutinizer for scrutinizing the remote e-voting process as well as voting through Poll
paper at the AGM, in a fair and transparent manner.
(f) The Scrutinizer shall, immediately after the conclusion of voting at the AGM, first count the votes cast at the AGM, and
thereafter unblock the votes cast through remote e-voting, in the presence of at least two (2) witnesses not in the
employment of the Company.
(g) The Scrutinizer will collate the votes cast at the AGM and votes downloaded from the e-voting system and make, not
later than twenty four hours from the conclusion of the AGM, a consolidated Scrutinizer’s Report of the total votes cast
in favour or against, if any, to the Chairman or a person authorized by him in writing, who shall countersign the same.
(h) The Chairman or the person authorized by him in writing shall forthwith on receipt of the consolidated Scrutinizer’s
Report, declare the result of the voting. The Results declared, along with the Scrutinizer’s Report, shall be placed on the
Company’s website www.rallis.co.in and on the website of NSDL immediately after their declaration, and communicated
to the Stock Exchanges where the Company’s shares are listed, viz. BSE Ltd. and National Stock Exchange of India Ltd.
(i) Subject to the receipt of requisite number of votes, the Resolutions forming part of the AGM Notice shall be deemed to
be passed on the date of the AGM, i.e. Friday, 23rd June, 2017.
6. Corporate Members intending to send their authorized representatives to attend the Meeting are requested to send to the
Company, a certified copy of the Board Resolution authorizing the representative to attend and vote on their behalf at the
Meeting.
7. Members/ Proxies should bring the enclosed Attendance Slip duly filled in, for attending the Annual General Meeting, along
with their copy of the Annual Report. Copies of the Annual Report will not be distributed at the Meeting.
8. Book Closure and Dividend:
(a) The Register of Members and the Share Transfer Books of the Company will be closed from Tuesday, 13th June,
2017 to Friday, 23rd June, 2017 (both days inclusive).
(b) If dividend on Equity Shares, as recommended by the Board, is approved at the AGM, it will be paid on 28th June, 2017
as under:
(i) To all Beneficial Owners in respect of shares held in electronic form, as per details furnished by the Depositories for
this purpose as on the beginning of 13th June, 2017.
(ii) To all Members in respect of shares held in physical form, whose names are on the Company’s Register of Members
after giving effect to valid transfers in respect of transfer requests lodged with the Company as of the close of
business hours on 12th June, 2017.
9. Payment of dividend through electronic means:
(a) To avoid loss of dividend warrants in transit and undue delay in receipt of dividend warrants, the Company provides
the facility to the Members for remittance of dividend directly in their bank accounts through electronic means. The
facility is available at all bank branches which have registered themselves as participating banks with National Payment
Corporation of India and have joined the Core Banking System. Members holding shares in physical form and desirous
of availing this facility are requested to provide their latest bank account details (Core Banking Solutions Enabled
Account Number, 9 digit MICR and 11 digit IFS Code), along with their Folio Number, to the Company’s Share Registrars
and Transfer Agents, TSR Darashaw Ltd. (‘TSRDL’). Members holding shares in electronic form are requested to provide
the details to their respective Depository Participants.
(b) Members holding shares in electronic form are hereby informed that bank particulars registered against their respective
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Members/ claimants whose shares, unclaimed dividend, sale proceeds of fractional shares etc. have been transferred
to the IEPF Demat Account or the Fund, as the case may be, may claim the shares or apply for refund by making an
application to the IEPF Authority in Form IEPF- 5 (available on iepf.gov.in) along with requisite fee as decided by the
IEPF Authority from time to time. The Member/ Claimant can file only one consolidated claim in a financial year as per
the IEPF Rules.
(b) Details of Unclaimed Dividend on Website:
In order to help Members to ascertain the status of unclaimed dividends, the Company has uploaded the information
in respect of unclaimed dividends for the financial year ended 31st March, 2010 and subsequent years on the website
of Investor Education and Protection Fund, www.iepf.gov.in and under “Investor Relations” Section on the website of
the Company, www.rallis.co.in.
14. The Securities and Exchange Board of India (‘SEBl’) has mandated the submission of Permanent Account Number (‘PAN’)
by every participant in the securities market. Members holding shares in electronic form are requested to submit their PAN
details to their respective Depository Participants. Members holding shares in physical form are requested to submit their
PAN details to the Company or TSRDL.
15. Updation of Members’ Details:
The format of the Register of Members prescribed by the Ministry of Corporate Affairs under the Companies Act, 2013
requires the Company/ Share Registrars and Transfer Agents to record additional details of Members, including their PAN
details, email address, bank details for payment of dividend, etc. A form for capturing the additional details is appended
at the end of this Annual Report. Members holding shares in physical form are requested to submit the filled in form to
the Company or TSRDL. Members holding shares in electronic form are requested to submit the details to their respective
Depository Participants.
16. Electronic copy of the Annual Report for 2016-17 is being sent to all Members whose email addresses are registered with
the Company/ Depository Participants for communication purposes, unless any Member has requested for a hard copy of
the same. For Members who have not registered their email addresses, physical copies of the Annual Report for 2016-17
are being sent in the permitted mode.
17. To support the “Green Initiative”, Members who have not registered their email addresses are requested to register the
same with TSRDL/ their Depository Participants, in respect of shares held in physical/ electronic mode respectively.
By Order of the Board of Directors
P. S. MEHERHOMJI
Company Secretary
Registered Office:
Rallis India Limited
156/157 15th Floor Nariman Bhavan
227 Nariman Point Mumbai 400 021
CIN: L36992MH1948PLC014083
Tel. No.: 91 22 6665 2700
Fax No.: 91 22 6665 2827
E-mail address: investor_relations@rallis.co.in
Website: www.rallis.co.in
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Pursuant to Section 102 of the Companies Act, 2013 (‘the Act’), the following Explanatory Statement sets out all material
facts relating to the business mentioned under Item Nos.5 to 9 of the accompanying Notice dated 24th April, 2017.
Item No. 5:
This Explanatory Statement is provided though strictly not required as per Section 102 of the Act.
Deloitte Haskins & Sells LLP (DHS), Chartered Accountants, Mumbai (ICAI Firm Registration No. 117366W/W-100018) have
been the Auditors of the Company since FY 2007-08 and have completed a term of ten years. Prior to this, Messrs S. B.
Billimoria & Co. (SBB), Chartered Accountants were the Auditors of the Company since 2000. SBB was an associate of DHS.
As per the provisions of Section 139 of the Act, no listed Company can appoint or re-appoint an audit firm as auditor for
more than two terms of five consecutive years. Section 139 of the Act has also provided a period of three years from the date
of commencement of the Act to comply with this requirement. In view of the above, DHS’s term as auditors of the Company
is up to the conclusion of the forthcoming Annual General Meeting (‘AGM’).
The Board of Directors has, based on the recommendation of the Audit Committee, at its meeting held on 24th April, 2017,
proposed the appointment of B S R & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022) as the
Statutory Auditors of the Company for a period of 5 years, to hold office from the conclusion of this AGM till the conclusion
of the Seventy Fourth (74th) AGM of the Company to be held in 2022, subject to ratification of their appointment at every
AGM, if required under the Act.
B S R & Co. LLP have consented to their appointment as Statutory Auditors and have confirmed that if appointed, their
appointment will be in accordance with Section 139 read with Section 141 of the Act.
The Board commends the Ordinary Resolution set out at Item No.5 of the Notice for approval by the Members.
None of the Directors or Key Managerial Personnel of the Company or their relatives is, in any way, concerned or interested
in the Resolution at Item No.5 of the Notice.
Item No.6:
Dr. C. V. Natraj (DIN: 07132764) was appointed as an Additional Director of the Company with effect from 22nd July,
2016, pursuant to Section 161 of the Act and Article 116 of the Articles of Association of the Company. As such,
Dr. Natraj holds office as Director up to the date of the forthcoming Annual General Meeting (‘AGM’) and is eligible for
appointment as a Director. Notice under Section 160 of the Act has been received from a Member indicating his intention
to propose Dr. Natraj for the office of Director at the forthcoming AGM.
Dr. C. V. Natraj holds a Ph.D. degree in Chemistry from the Indian Institute of Science, Bangalore and has more than 30 years
of experience in research. He also has post-doctoral research experience in Biochemistry from the University of Michigan,
Ann Arbor.
Dr. Natraj joined Hindustan Lever Limited (‘HLL’) in their Research Centre, where he gained experience working in a
number of scientific disciplines, eventually getting to head the function as Director on the Board of HLL. He went on to
lead the Corporate Research function for Unilever as Senior Vice President and was responsible for the global exploratory
research in Unilever. He is currently serving on the Science and Engineering Research Board of the Department of Science
and Technology. He is also the Technical Advisor to the Indian Institute of Science (‘IISC’), where he helps in setting up a
technology transfer process that will take the inventions in IISC to the market.
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As per the provisions of Section 149 of the Act, an Independent Director shall hold office for a term up to five consecutive
years on the Board of a Company and is not liable to retire by rotation.
Dr. C. V. Natraj has consented to act as Director of the Company and has given a declaration to the Board that he meets the
criteria of independence as provided under Section 149(6) of the Act and Regulation 16(b) of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015.
In the opinion of the Board, Dr. Natraj fulfills the conditions specified in the Act and the Rules made there under for
appointment as Independent Director and he is independent of the management. The Board, based on the recommendation
of the Nomination and Remuneration Committee, commends his appointment as Independent Director for a period of five
years from 22nd July, 2016 up to 21st July, 2021.
In compliance with the provisions of Section 149 read with Schedule IV of the Act, the appointment of Dr. C. V. Natraj as
Independent Director is now being placed before the Members in General Meeting for their approval.
The terms and conditions of appointment of Dr. Natraj, pursuant to the provisions of Schedule IV of the Act, shall be open
for inspection at the Registered Office of the Company by any Member during normal business hours on any working day
of the Company.
Dr. C. V. Natraj is interested and concerned in the Resolution mentioned at Item No.6 of the Notice. Other than
Dr. Natraj, no other Director, Key Managerial Personnel or their respective relatives are concerned or interested in the
Resolution mentioned at Item No.6 of the Notice
Item No.7:
Mrs. Padmini Khare Kaicker (DIN: 00296388) was appointed as an Additional Director of the Company with effect from
22nd July, 2016, pursuant to Section 161 of the Act and Article 116 of the Articles of Association of the Company. As such,
Mrs. Kaicker holds office as Director up to the date of the forthcoming Annual General Meeting (‘AGM’) and is eligible for
appointment as a Director. Notice under Section 160 of the Act has been received from a Member indicating her intention
to propose Mrs. Kaicker for the office of Director at the forthcoming AGM.
Mrs. Padmini Khare Kaicker is the Managing Partner of B. K. Khare & Co., one of the leading and respected Indian Accounting
Firms, serving the profession for almost five decades. She joined the accountancy profession in 1990 after completing her
B. Sc. Degree in Mathematics. She is also a Certified Public Accountant (USA) and a Diploma holder in Business Finance
from the Institute of Chartered Financial Analysts of India. She has over 24 years of experience serving large and mid-
sized clients in several sectors in areas of Audit, Taxation, Corporate Finance, Corporate Advisory, Risk Management and
Corporate Governance. She has been involved in Corporate Advisory, M&A and restructuring initiatives and has also been
serving on the Boards of some Companies, including being Chairperson of Audit Committee.
As per the provisions of Section 149 of the Act, an Independent Director shall hold office for a term up to five consecutive
years on the Board of a Company and is not liable to retire by rotation.
Mrs. Padmini Khare Kaicker has consented to act as Director of the Company and has given a declaration to the Board that
she meets the criteria of independence as provided under Section 149(6) of the Act and Regulation 16(b) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
In the opinion of the Board, Mrs. Kaicker fulfills the conditions specified in the Act and the Rules made there under for
appointment as Independent Director and she is independent of the management. The Board, based on the recommendation
of the Nomination and Remuneration Committee, commends her appointment as Independent Director for a period of five
years from 22nd July, 2016 up to 21st July, 2021.
In compliance with the provisions of Section 149 read with Schedule IV of the Act, the appointment of Mrs. Padmini Khare
Kaicker as Independent Director is now being placed before the Members in General Meeting for their approval.
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The Board of Directors (‘the Board’) of your Company has, at its meeting held on 20th January, 2017, re-appointed
Mr. V. Shankar (DIN: 01385240) as Managing Director & CEO of the Company with effect from 13th March, 2017 upto 30th
September, 2021 (till he attains the retirement age). The re-appointment is subject to the approval of the Members of the
Company. The re-appointment was made based on recommendation by the Nomination and Remuneration Committee
(NRC) comprising Dr. C. V. Natraj (Chairman), Mr. Bhaskar Bhat, Mr. Prakash R. Rastogi and Mr. R. Mukundan.
Mr. V. Shankar joined Rallis India Limited (‘Rallis’) on 1st December, 2005 as Chief Operating Officer. He was appointed
as Executive Director of the Company with effect from 13th March, 2007, and subsequently as Managing Director with
effect from 15th January, 2009. As Managing Director, Mr. Shankar exercises substantial powers of management over the
Company, subject to the superintendence, control and directions by the Board of Directors.
Prior to joining Rallis, Mr. Shankar had worked with Tata Chemicals Ltd. as Chief Operating Officer, Phosphates Business,
before which, he was with Hindustan Lever Ltd. from 1986 to 2004. He served in various capacities in the Unilever Group of
Companies and was responsible for the Seeds business and later Fertilizers Business. Mr. Shankar is a Chartered Accountant,
Cost & Management Accountant, Company Secretary and a Law Graduate. He is a University and CA Institute Rank Holder.
Under Mr. Shankar’s leadership, Rallis set out on its Rallis Poised growth agenda, moving from strength to strength as
it changed from being a predominantly India centric, crop protection and insecticides dominated Company to having
a healthy mix of insecticides, fungicides and herbicides in its portfolio, besides a robust second pillar of non-pesticides
portfolio (NPP) of seeds, plant growth nutrients, soil health, contract manufacturing and agri services. About a third of
its revenues now come from international markets. After due consolidation of its performance, Rallis has been on its
Rallis Poised growth journey steadily under the stewardship of Mr. Shankar, to a position of a composite business portfolio
spread across India and International markets and a NPP portfolio including contract manufacturing moving towards
contributing to 40% of the turnover.
Some significant investments driving these strategies include commissioning of its new manufacturing facility at Dahej
during 2010-11 and the acquisition of majority stakes in Metahelix Life Sciences Ltd., a research based Seeds Company
and Zero Waste Agro Organics Ltd., which manufactures organic manure. Both Metahelix and Zero Waste are now wholly
owned subsidiaries of Rallis. All these investments are beginning to bear fruits and contributing well to the profitable
growth of Rallis.
The Company’s Rallis Kisan Kutumb platform now reaches more than one million farmers. Its R&D capabilities aim to
introduce new and greener products at regular intervals, as well as expand in contract manufacturing services. Its MoPu
(More Pulses) and Rallis Samrudh Krishi® initiatives providing end-to-end solutions are the next level differentiators now
set to transform the Company’s offering to its customers.
Under Mr. Shankar, Environment, Health and Safety (EHS) are prime focus areas and the Company has been recognized by
the Indian Chemical Council in 2012-13, by permitting it to use the Responsible Care logo, which permission was extended
for a further three years during 2015-16. The Company’s manufacturing Units have won several environment and safety
awards over the years.
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During Mr. Shankar’s tenure, operational and business excellence has also received due recognition, with the Company
winning the JRD QV Award for Business Excellence 2011, the CII-EXIM Prize for excellence in 2012 and again in 2015 and the
Porter Prize in 2012. The Company also received the Certificate of Recognition from the Institute of Company Secretaries of
India in 2015, for adopting Exemplary Corporate Governance Practices.
Employee Engagement scores at Rallis have consistently out-performed industry benchmarks and have been above the
scores for similar Companies in India.
The community focused activities also led by Mr. Shankar have been useful to a large number of beneficiaries with the Jal-
Dhan intervention on water being specially acknowledged by the State.
On a consolidated basis, the Company’s operating revenues have steadily grown from ₹ 659 crores in FY07 to ₹ 1,783 crores
in FY 17 despite the back-to-back period of two years of drought. Its operating profits (before exceptional items) from
existing assets also grew from ₹ 55.48 crores in FY07 to ₹ 221.56 crores in FY 17. Over a 10 year period, the CAGR on revenues
have been 10%, and profits grew at a CAGR of 15%.
The Company issued bonus shares in 2009, in the ratio of one equity share for every two equity shares held. The Total
Shareholder Return, i.e. the yearly rate of return of an investment made, considering capital appreciation plus dividends
over time, is 36% per annum, for an investment made in the Company in March 2007, kept till the last trading day of March
2017. Rallis’ share price has significantly out-performed the BSE Sensex over the years.
The appointment and terms of remuneration of Mr. Shankar as the Managing Director are pursuant to the provisions
of Article 135 of the Company’s Articles of Association and Sections 196, 197, 203, Schedule V and other applicable
provisions, if any, of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, as amended from time to time. Mr. Shankar shall not, while he continues to be the Managing Director, be subject
to retirement by rotation pursuant to the provisions of Section 152 of the Act and Article 135 of the Company’s Articles
of Association.
The principal terms and conditions of appointment of Mr. V. Shankar as Managing Director & CEO (hereinafter referred to as
‘Mr. Shankar’ or ‘Managing Director & CEO’) and the main clauses of the Agreement to be executed between the Company
and Mr. Shankar are as follows:
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18
C. Commission: Such remuneration by way of commission, in addition to the salary and benefits, perquisites and
allowances payable, calculated with reference to the net profits of the Company in a particular financial year, as may
be determined by the Board at the end of each financial year, subject to the overall ceiling stipulated in Section 197
of the Act. The specific amount payable will be based on performance as evaluated by the Board or a Committee
thereof duly authorized in this behalf and will be payable annually after the Annual Financial Statements have
been adopted by the Board.
D. Incentive remuneration: In cases where the net profits of the Company are inadequate for payment of profit linked
commission, incentive remuneration, not exceeding 200% of the annual basic salary, to be paid at the discretion
of the Board annually, based on certain performance criteria and such other parameters as may be considered
appropriate from time to time.
An indicative list of factors that may be considered for determination of the extent of Commission/ Incentive
Remuneration by the Board (as recommended by the NRC) are:
o The Company’s performance on certain defined qualitative and quantitative parameters, as may be decided by
the Board from time to time.
o Industry benchmarks of remuneration.
o Performance of the individual.
3.2. Minimum Remuneration: Notwithstanding anything to the contrary herein contained, where in any financial year,
during the currency of the tenure of the Managing Director & CEO, the Company has no profits or its profits are
inadequate, the Company will pay to him remuneration by way of salary, benefits, perquisites and allowances and
incentive remuneration as specified above.
4. The terms and conditions of the appointment of the Managing Director & CEO and/ or the Agreement may be altered
and varied from time to time by the Board as it may, in its discretion deem fit, irrespective of the limits stipulated under
Schedule V to the Act or any amendments made hereafter in this regard in such manner as may be agreed to between
the Board and the Managing Director & CEO, subject to such approvals as may be required.
5. The Managing Director & CEO, so long as he functions as such, undertakes not to become interested or otherwise
concerned, directly or through his spouse and/ or children, in any selling agency of the Company.
6. All Personnel Policies of the Company and the related Rules which are applicable to other employees of the Company
shall also be applicable to the Managing Director & CEO, unless specifically provided otherwise.
7. The employment of the Managing Director & CEO may be terminated by the Company without notice or payment in lieu
of notice:
a. if the Managing Director & CEO is found guilty of any gross negligence, default or misconduct in connection with
or affecting the business of the Company or any subsidiary or associated company to which he is required by the
Agreement to render services; or
b. in the event of any serious or repeated or continuing breach (after prior warning) or non-observance by the
Managing Director & CEO of any of the stipulations contained in the Agreement; or
c. in the event the Board expresses its loss of confidence in the Managing Director & CEO.
8. In the event the Managing Director & CEO is not in a position to discharge his official duties due to any physical or mental
incapacity, the Board shall be entitled to terminate his contract on such terms as the Board may consider appropriate in
the circumstances.
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RALLIS
10. If and when the Agreement expires or is terminated for any reason whatsoever, Mr. Shankar will cease to be the Managing
Director & CEO and also cease to be a Director of the Company. If at any time, the Managing Director & CEO ceases to
be a Director of the Company for any reason whatsoever, he shall cease to be the Managing Director & CEO and the
Agreement shall forthwith terminate. If at any time, the Managing Director & CEO ceases to be in the employment of the
Company for any reason whatsoever, he shall cease to be a Director and Managing Director & CEO of the Company.
11. The terms and conditions of the appointment of the Managing Director & CEO also include clauses pertaining to
adherence with the Tata Code of Conduct, Intellectual Property, maintenance of confidentiality, non-competition and
non-solicitation.
12. For all intents and purposes, Mr. Shankar’s date of joining will be the date on which he joined the Group and he will also
enjoy all benefits of continuity with regard to Gratuity and other benefits.
13. Remuneration paid/ payable to the Managing Director & CEO for FY 2016-17 is commensurate with industry standards
and Board level positions held in similar sized companies, taking into consideration the individual responsibilities
shouldered by them. The table below illustrates the comparative data:
(Amount in ` crores)
Market - CTC with long term incentives
Note:
i) Based on Executive Compensation Study conducted by AON Hewitt in April 2017.
ii) Market data is for Companies with revenue size between ` 1,000 crores to ` 4,000 crores.
iii) CTC includes basic salary, benefits, perquisites & allowances, commission/ performance linked bonus and long term incentives and
housing.
The remuneration of Mr. Shankar for FY 2016-17 was ₹ 3.74 crores, including commission for 2015-16, paid during
FY 2016-17.
Rallis is a major player in the agrochemicals industry and its Seeds entity Metahelix has emerged to be amongst the leading
Seed Companies within a short period of time. The Company is now embarking on its next transformation journey to move
from an agri products major to an agri solutions based Company, with its Rallis Samrudh Krishi® initiative. This will make
it a composite business solution provider for its customers and create a differentiated position in the market place. The
Directors are of the view that the re-appointment of Mr. V. Shankar as Managing Director & CEO leading all of these will
be beneficial to the functioning and future growth opportunities of the Company and the remuneration payable to him is
commensurate with his abilities and experience and accordingly, commend Resolution No.8 of the accompanying Notice
for approval by the Members of the Company.
20
Pursuant to the provisions of Sections 196, 197, 203 and other applicable provisions of the Act, read with Schedule V to the
Act, the terms of remuneration specified above are now being placed before the Members for their approval.
Mr. V. Shankar is concerned and interested in the Resolution mentioned at Item No.8 of the Notice. Other than Mr. Shankar,
no other Director, Key Managerial Personnel or their respective relatives are concerned or interested in the Resolution
mentioned at Item No.8 of the Notice.
Mr. Shankar is not related to any other Director or Key Managerial Personnel of the Company.
Item No.9:
Pursuant to Section 148 of the Act, read with The Companies (Cost Records and Audit) Rules, 2014 (‘the Rules’), as amended
from time to time, the Company is required to have the audit of its cost records conducted by a cost accountant in practice.
The Board of your Company has, on the recommendation of the Audit Committee, approved the appointment of D. C. Dave
& Co. (Firm Registration No.000611) as the Cost Auditors of the Company to conduct Cost Audits relating to Insecticides
(Liquid, Solid and Technical Grade), Fertilizers and Chemicals (Plastics and Polymers) of the Company for the year ending
31st March, 2018, at a remuneration of ₹ 4 lakhs plus applicable taxes and out-of-pocket expenses.
D. C. Dave & Co. have the necessary experience in the field of cost audit, and have submitted a certificate regarding their
eligibility for appointment as Cost Auditors of the Company.
In accordance with the provisions of Section 148 of the Act read with the Rules, the remuneration payable to the Cost
Auditors has to be ratified by the Shareholders of the Company.
The Board commends the remuneration of ₹ 4 lakhs plus applicable taxes and out-of-pocket expenses to D. C. Dave & Co. as
the Cost Auditors and the approval of the Shareholders is sought for the same by an Ordinary Resolution.
None of the Directors or Key Managerial Personnel of the Company or their relatives is, in any way, concerned or interested
in the Resolution at Item No.9 of the Notice.
By Order of the Board of Directors
P. S. MEHERHOMJI
Company Secretary
Registered Office:
Rallis India Limited
156/157 15th Floor Nariman Bhavan
227 Nariman Point
Mumbai 400 021
CIN: L36992MH1948PLC014083
Tel. No.: 91 22 6665 2700
Fax No.: 91 22 6665 2827
E-mail address: investor_relations@rallis.co.in
Website: www.rallis.co.in
21
RALLIS
Qualifications B. Com., L.L.B. and Member of the Ph.D. in Chemistry from the Indian
Institute of Company Secretaries of India. Institute of Science, Bangalore. Post-
doctoral research experience in
Biochemistry from the University of
Michigan, Ann Arbor.
Expertise in specific functional areas Mr. Vasani is the Chief, Legal and Group Dr. Natraj has more than 30 years of
General Counsel for the Tata Group experience in research. He headed
and has been with Tata Sons Ltd. since the Research function as Director on
December 2000. He has over 37 years’ the Board of Hindustan Lever Ltd. and
experience as a corporate lawyer and has later went on to lead the Corporate
worked with Phillips India Ltd., NOCIL Research function for Unilever as Senior
and Dow Chemical International Ltd. Vice President, responsible for global
exploratory research. He is currently
serving on the Science and Engineering
Research Board of the Department of
Science and Technology. He is also the
Technical Advisor to the Indian Institute
of Science.
Terms and conditions of appointment/ Appointed as Non-Executive Director Refer Item No.6 of the Notice
re-appointment liable to retire by rotation
List of Companies in which Directorship 1. Rallis India Ltd. # 1. Rallis India Ltd. #
held as on 31.03.2017 (excluding foreign, 2. Tata Communications Ltd. # 2. Metahelix Life Sciences Ltd.
private and Section 8 Companies) 3. Tata Sky Ltd. 3. Advinus Therapeutics Ltd.
22
Name of Director Mrs. Padmini Khare Kaicker Mr. V. Shankar
Director Identification Number (DIN) 00296388 01385240
Date of Birth/ Age 15.04.1965/ 52 18.09.1956/ 60
Date of first appointment 22.07.2016 13.03.2007
Qualifications B. Sc. in Mathematics, Certified Public B.Com (Honours), FCA, ACMA, ACS, LL.B
Accountant (USA) and Diploma holder
in Business Finance from the Institute of
Chartered Financial Analysts of India.
Expertise in specific functional areas Mrs. Kaicker is the Managing Partner Mr. V. Shankar joined the Company on
of B. K. Khare & Co., one of the leading 1st December, 2005 as Chief Operating
and respected Indian Accounting Firms. Officer and was appointed as Executive
She has over 24 years of experience Director with effect from 13th March,
serving large and mid-sized clients 2007 and subsequently as Managing
in several sectors in areas of Audit, Director from 15th January, 2009.
Taxation, Corporate Finance, Corporate Prior to joining the Company, he had
Advisory, Risk Management and worked with Tata Chemicals Ltd. as Chief
Corporate Governance. She has been Operating Officer, Phosphates Business,
involved in Corporate Advisory, M&A and before which, he was with Hindustan
restructuring initiatives. Lever Ltd. from 1986 to 2004. He served in
various capacities in the Unilever Group
of Companies and was responsible for
the Seeds business and later Fertilisers
Business.
Terms and conditions of appointment/ Refer Item No.7 of the Notice Refer Item No.8 of the Notice
re-appointment
Details of remuneration last drawn ` 24.95 lakhs ` 4.24 crores
(2016-17) *
No. of Board Meetings attended during 5 7
the year
Relationships between Directors inter-se None None
No. of shares held in the Company:
(a) Own NIL NIL
(b) For other persons on a beneficial basis NIL NIL
List of Companies in which Directorship 1. Rallis India Ltd. # 1. Rallis India Ltd. (Managing Director)#
held as on 31.03.2017 (excluding foreign, 2. Tata Cleantech Capital Ltd. # 2. Metahelix Life Sciences Ltd. (Chairman)
private and Section 8 Companies) 3. Maharashtra Natural Gas Ltd. 3. Zero Waste Agro Organics Ltd.
4. TAL Manufacturing Solutions Ltd. (Chairman)
5. Kotak Mahindra Investments Ltd. # 4. Rallis Chemistry Exports Ltd.
(Chairman)
Chairperson/ Member of the Mandatory 1. Rallis India Ltd. 1. Rallis India Ltd.
Committees of the Board of the - Audit Committee (Chairperson) - Stakeholders Relationship Committee
companies on which he/ she is a Director 2. Tata Cleantech Capital Ltd.
as on 31.03.2017 - Audit Committee (Chairperson)
3. Maharashtra Natural Gas Ltd.
- Audit Committee (Chairperson)
4. TAL Manufacturing Solutions Ltd.
- Audit Committee (Chairperson)
5. Kotak Mahindra Investments Ltd.
- Audit Committee (Chairperson)
* Includes commission for 2016-17 payable in 2017-18
# Listed Entities (including entities whose debt is listed on a Stock Exchange)
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RALLIS
24
BOARD’S REPORT
TO THE MEMBERS OF RALLIS INDIA LIMITED
The Directors hereby present their Sixty-ninth Annual Report on the business and operations of the Company
and the financial statements for the year ended 31st March, 2017.
FINANCIAL RESULTS ` in crores
Standalone Consolidated
2016-17 2015-16 2016-17 2015-16
Revenue from operations 1,505.17 1,386.72 1,782.98 1,627.79
Other Income 10.51 4.66 12.79 14.28
1,515.68 1,391.38 1,795.77 1,642.07
Profit/ (-) Loss before Finance cost,
245.55 210.93 276.16 243.31
Depreciation and Tax
Finance Costs (2.67) (7.92) (7.29) (13.59)
Depreciation (41.94) (37.83) (47.31) (43.61)
Profit before exceptional items and tax 200.94 165.18 221.56 186.11
Exceptional items 158.39 - 158.39 -
Profit before Tax 359.33 165.18 379.95 186.11
Provision for Tax (79.26) (35.75) (83.90) (39.58)
Deferred Tax (14.04) (3.27) 1.02 0.56
Profit for the year 266.03 126.16 297.07 147.09
Profit for the year attributable to:
Owners of the Company 266.03 126.16 297.46 143.39
Non-controlling interests - - (0.39) 3.70
Other comprehensive income (net of taxes) (0.46) 0.32 (0.51) 0.10
Total comprehensive income 265.57 126.48 296.56 147.19
Profit for the year 265.57 126.48 296.95 143.49
Balance of Profit brought forward from previous year 540.51 461.63 510.60 478.03
806.08 588.11 807.55 621.52
Appropriations
Transfer to General Reserve - (12.60) - (12.60)
Equity Dividend (48.62) (29.17) (48.62) (29.17)
Income tax on Equity Dividend (9.90) (5.83) (9.90) (5.83)
Post acquisition Goodwill - - (15.70) (63.32)
Balance Profit carried forward to Balance Sheet 747.56 540.51 733.33 510.60
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RALLIS
DIVIDEND
The Directors are pleased to recommend a dividend of ` 2.50 per share (250%) on the Equity Shares of the Company
(Previous year ` 2.50 per share). The Directors are also pleased to recommend a one-time special dividend of ` 1.25 per
share (125%), out of the profit on assignment of leasehold rights in the Turbhe land. If the dividend and special dividend, as
recommended above, is declared by the Members at the Annual General Meeting, the total outflow towards dividend on
Equity Shares for the year would be ` 87.77 crores (including dividend tax) (Previous Year ` 58.51 crores).
Accordingly, the Board of the Company has adopted a Dividend Distribution Policy, which is attached as Annexure A. The
Policy is also available on the website of the Company under the “Investor Relations” section.
SHARE CAPITAL
The paid up Equity Share Capital as on 31st March, 2017 was ` 19.45 crores. During the year under review, the Company
has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee
stock options nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the
Company. As on 31st March, 2017, Dr. C. V. Natraj holds 4,831 (0.002%) Equity Shares of the Company. No other Director
holds any shares in the Company.
COMPANY PERFORMANCE
The Company’s consolidated revenues during the year are ` 1,782.98 crores, as compared to ` 1,627.79 crores in the
previous year. The Company’s profit before exceptional items and tax on a consolidated basis is ` 221.56 crores during the
year, as compared to ` 186.11 crores in the previous year, an increase of 19.0% over the previous year. Exceptional item of
` 158.39 crores for year ended 31st March, 2017 comprises profit on assignment of leasehold rights to a plot of land in the
MIDC Area, Turbhe, Navi Mumbai. The Company earned a net profit of ` 170.22 crores (excluding exceptional item ` 126.85
crores), higher by 15.7%, as against a net profit of ` 147.09 crores in the previous year, on a consolidated basis.
OPERATIONS
1. CROP PROTECTION
Indian Agriculture in 2016-17 started on an optimistic note, on account of better monsoon forecast followed by good
initial rainfall. The year did mark an increase in acreages as well as production, as compared to the previous year, with
an encouraging effect on the Agri input industry as well. However, growth was not uniform across India due to various
factors. Some areas experienced delayed onset of monsoon or dry spells, whereas there was excess rainfall in some
areas. Absence of the North East monsoon had a severe impact in the southern States.
The year also saw lower crop pest pressure in many areas, impacting the insecticides segment to a certain extent.
Inventory levels of crop protection products in the industry remains high due to poor liquidation in the Rabi season.
Major crops impacted due to North East monsoon: The North East monsoon, which sweeps across the Southern States
between October and December, ended with a deficit of 60%. This resulted in a drastic fall in the acreage of key crops in
these States during the Rabi season, impacting sales of the Company’s products in these States.
26
New Products introduced during the year: Domestic Formulations Business achieved a revenue growth of 8% during
the year with a higher increase in the underlying volume growth. There is a rising demand for advanced chemistries
and farmers are readily adopting new technologies. As a response to market changes and in order to meet farmers’
expectations, your Company has launched three new products during the year:
Epic: Epic is an improved and advanced WDG formulation of Hexaconazole, with lowest formulation dose of fungicide
in Indian history. It was launched in the main market of paddy.
Summit: An advanced new generation insecticide based on Spinetoram, Summit is effective against thrips and almost
all caterpillar pests.
Neonix: Neonix is the first ever seed treatment product in India, which controls both soil insects and soil borne diseases
in groundnut and wheat crops.
Your Company has taken various initiatives to bring meaningful changes in the life of the Agri community. The key
initiatives of the Company are:
Agri-Solution: The Mission of your Company is to provide agri solutions enhancing value for customers. To this effect,
the Company has been working on several crops such as pulses, grapes, chilli, etc. over last few years, adding value to
farmers by improving productivity. During the year, the Company experimented on Agri Solutions across the country
on various crops, which gave further learning on deploying this to all our farmers. This initiative is called Rallis Samrudh
Krishi®.
Digital Initiatives: The Company is progressing well on its ICT initiatives, which will enable it to more effectively provide
necessary services to the agri community. With an aim to be a partner in the digitization of Indian agriculture, Rallis
has undertaken “Project Udaan”. One of the most critical needs of the farming community is availability of predictive
advisory services, which the Company provides through its digital platform, Drishti.
The Company is also digitally aligning its channel partners and sales team to stay connected with the farmers. The launch
of Vistaar, a Geospatial Analytics engine, is intended to help the sales and marketing team in effective planning based on
real time data, thus improving overall efficiency. These are all intended to be key enablers to our Rallis Samrudh Krishi®
programme.
Customer Promise: In addition to providing new, safer products, your Company is also committed to providing
quality service to the farmers. The Company has enunciated its “Customer Promise”, which is aimed at “Enhancing farm
prosperity and building customer relationship”.
Fruits and Vegetables: Fruits & Vegetables are considered high potential crops, capable of increasing farm prosperity.
Rallis has developed and implemented customized Package of Practices for key fruits and vegetable crops to increase
productivity and harvest of residue free produce. It is efficiently utilizing its resources to increase its business from this
key crop segment.
Global crop protection sales declined by 2.5% to reach US$ 49.9 billion at the distributor level in 2016 as against US$
51.2 billion in 2015. The key factors leading to the decline of revenue included high distributor inventory in many
countries, strengthening of the US dollar against local currencies, weak crop prices for all major commodities and weak
prices of Glyphosate. The market was further weakened by low pest/ disease pressure.
Asian markets benefitted from an improved but still not optimal monsoon, weather conditions in Western Australia
improved but the market was affected by low crop prices. El Niño weather patterns affected many countries in 2016.
European market benefitted from a mild winter and early spring. However, summer in Northern Europe was cool and
dry with sporadic heavy rainfall affecting crop production. US market benefitted from better growing conditions and
27
RALLIS
28
The annual financial statements of the subsidiaries and related detailed information will be kept at the Registered Office
of the Company, as also at the registered offices of the respective subsidiary companies and will be available to investors
seeking information at any time.
The consolidated financial results reflect the operations of the following subsidiaries: Metahelix Life Sciences Ltd.
(‘Metahelix’), PT Metahelix Lifesciences Indonesia (subsidiary of Metahelix), Zero Waste Agro Organics Ltd. and Rallis
Chemistry Exports Ltd.
The Company has adopted a Policy for determining Material Subsidiaries in terms of Regulation 16(1)(c) of the Listing
Regulations. The Policy, as approved by the Board, is uploaded on the Company’s website.
PERFORMANCE OF SUBSIDIARIES
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RALLIS
30
INTERNAL CONTROLS SYSTEMS AND ADEQUACY
The Company has appropriate internal control systems for business processes with regard to its operations, financial
reporting and compliance with applicable laws and regulations. It has documented policies and procedures covering
financial and operating functions and processes. These policies and procedures are updated from time to time and
compliance is monitored by the internal audit function as per the audit plan. The Company continues its efforts to align all
its processes and controls with best practices.
Details of the internal controls system are given in the Management Discussion and Analysis Report, which forms part of
the Board’s Report.
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RALLIS
32
Board evaluation and facilitating Independent Directors to perform their role effectively; evaluation of management’s
performance and feedback, independence of management from the Board, access of Board and management to each
other, succession plan and professional development; degree of fulfillment of key responsibilities, establishment and
delineation of responsibilities to Committees, effectiveness of Board processes, information and functioning and quality of
relationship between the Board and management.
Directors were evaluated on aspects such as professional qualifications, prior experience, especially experience relevant to
the Company, knowledge and competency, fulfillment of functions, ability to function as a team, initiative, availability and
attendance, commitment, contribution, integrity, independence and guidance/ support to management outside Board/
Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including effectiveness of
leadership and ability to steer meetings, impartiality, ability to keep shareholders’ interests in mind and effectiveness as
Chairman.
Areas on which the Committees of the Board were assessed included mandate and composition; effectiveness of the
Committee; structure of the Committee; regularity and frequency of meetings, agenda, discussion and dissent, recording
of minutes and dissemination of information; independence of the Committee from the Board; contribution to decisions of
the Board; effectiveness of meetings and quality of relationship of the Committee with the Board and management.
The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director
being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the
Independent Directors, who also reviewed the performance of the Board as a whole. The NRC also reviewed the performance
of the Board, its Committees and of the Directors.
The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights,
learning and action points with respect to the evaluation were presented to the Board.
REMUNERATION POLICY
The Company has adopted a Remuneration Policy for the Directors, Key Managerial Personnel and other employees,
pursuant to the provisions of the Act and the Listing Regulations. The Remuneration Policy is attached as Annexure C.
33
RALLIS
34
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition
and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide
protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters
connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure.
The Company has also constituted Internal Committees at all its locations, known as the Prevention of Sexual Harassment
(POSH) Committees, to inquire into complaints of sexual harassment and recommend appropriate action.
The Company has not received any complaint of sexual harassment during the financial year 2016-17.
AUDITORS
(1) Statutory Auditors:
Deloitte Haskins & Sells LLP (DHS), Chartered Accountants, have been the Auditors of the Company since FY 2007-08
and have completed a term of ten years. Their term as auditors is up to the conclusion of the forthcoming AGM. In
accordance with the provisions of Section 139 of the Act, B S R & Co. LLP, Chartered Accountants (BSR) (Firm Registration
No. 101248W/W-100022) are proposed to be appointed as auditors for a period of 5 years commencing from the
conclusion of this AGM till the conclusion of the 74th AGM of the Company to be held in 2022, subject to ratification of
their appointment at every AGM, if so required under the Act.
BSR have consented to their appointment as Statutory Auditors and have confirmed that their appointment, if made,
will be in accordance with Section 139 read with Section 141 of the Act. Members are requested to approve the
appointment of BSR and authorize the Board of Directors to fix their remuneration.
(2) Cost Auditors:
M/s. N. I. Mehta & Co., Cost Accountants have been conducting cost audit for the Company for the past several years. On
retirement of Mr. N. I Mehta, Senior Partner of the Firm, the Company has appointed D. C. Dave & Co., Cost Accountants,
to conduct Cost Audits relating to Insecticides (Liquid, Solid and Technical Grade), Fertilizers and Chemicals (Plastics
and Polymers) of the Company for the year ending 31st March, 2018. Pursuant to the provisions of Section 148 of the
Act read with The Companies (Audit and Auditors) Rules, 2014, Members are requested to consider ratification of the
remuneration payable to D. C. Dave & Co.
The due date for filing of the Cost Audit Report for the financial year 2015-16 was 30th September, 2016. The Company
has filed the Report with the Ministry of Corporate Affairs on 26th September, 2016.
35
RALLIS
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated
under Section 134(3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, is attached as Annexure F.
MANAGEMENT DISCUSSION AND ANALYSIS, BUSINESS RESPONSIBILITY REPORT AND CORPORATE GOVERNANCE
The Management Discussion and Analysis Report, the Business Responsibility Report and the Report on Corporate
Governance, as required under the Listing Regulations, forms part of the Annual Report.
ACKNOWLEDGEMENT
Your Directors acknowledge the dedicated service of the employees of the Company during the year. They would also like
to place on record their appreciation for the continued co-operation and support received by the Company during the year
from bankers, financial institutions, business partners and other stakeholders.
On behalf of the Board of Directors
BHASKAR BHAT
Chairman
Mumbai, 24th April, 2017
36
ANNEXURE A TO THE BOARD’S REPORT
DIVIDEND DISTRIBUTION POLICY
2.1 Securities and Exchange Board of India (hereinafter referred to as “SEBI”) has, by its Notification dated July 8,
2016, inserted Regulation 43A in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
(hereinafter referred to as “the Listing Regulations”).
2.2 Regulation 43A of the Listing Regulations requires the Company to formulate a Dividend Distribution Policy which
shall be disclosed in the Annual Report and on the website of the Company.
2.3 In view of the above, the Company has framed this Dividend Distribution Policy (hereinafter referred to as “the
Policy”) to determine the parameters on the basis of which the Company may or may not declare dividend.
2.4 The Policy seeks to balance the objectives of rewarding the shareholders through dividends and retaining capital
to invest in the growth of the Company, while ensuring fairness, sustainability and consistency in distributing
profits to the shareholders.
3. PAYMENT FREQUENCY
The dividend shall, subject to the parameters hereinafter described, be payable annually and shall be declared at the
Annual General Meeting of the Company, based on the recommendation of the Board of Directors of the Company
(hereinafter referred to as “the Board”). The Board may declare interim dividend during any financial year out of the
surplus in the profit and loss account and out of profits of the financial year in which the interim dividend is sought to
be declared. The Board may recommend special dividend in years of exceptional gains or on occasions of significance.
4. DECLARATION OF DIVIDEND
It is the intention of the Board of Directors, subject to applicable laws, to pay dividend on the Company’s outstanding
Equity shares. The Company does not have any class of Shares other than Equity Shares.
37
RALLIS
5.3 Circumstances under which the shareholders of the Company may or may not expect dividend:
The Shareholders may ordinarily expect dividend if the Company has made profits during the current year.
Recommending dividend out of profits of previous financial years or out of retained earnings shall be at the
discretion of the Board, subject to the compliance with the Companies (Declaration and Payment of Dividend)
Rules, 2014, as amended from time to time. The Board may not recommend a dividend if:
o Proposed expansion plans require higher allocation of capital; or
o Significantly higher working capital requirements adversely impact free cash flow; or
o The Company undertakes any acquisitions or investments including in joint ventures, new product launches,
etc., requiring significant capital outflow; or
o In case of proposal for buyback of shares; or
o In the event of inadequacy of profits.
If the Board proposes not to distribute profit, the grounds thereof and information on utilization of undistributed
profit, if any, shall be disclosed to the shareholders in the Annual Report of the Company.
5.4 Financial Parameters for declaring dividend:
The Board shall consider the following financial parameters while declaring dividend:
o the Company’s Financial results of operations and earnings;
o working capital requirements for the operations and growth of the Company and its subsidiaries;
o quantum of profits and liquidity position;
o future fund requirements, including for brand building, business acquisitions, business expansion,
modernization of existing business;
o level of debt;
o providing for unforeseen events and contingencies;
o any other financial factor as the Board may deem fit.
5.5 Internal and External Factors for declaring dividend:
The Board may consider the following internal and external factors while declaring dividend:
Internal Factors:
o the level of dividends paid historically;
o contractual restrictions and financing agreement covenants;
o likelihood of crystallization of contingent liabilities, if any.
External Factors:
o general business conditions, risk and uncertainties;
o industry outlook and business cycles for underlying businesses;
o prevailing economic, competitive and regulatory environment;
o tax law and the Company’s taxpayer status;
o capital market.
This is not intended to be an all-inclusive list, but rather a representative list of factors which may be considered
while declaring dividend.
38
5.6 Manner in which the retained earnings shall be utilised:
Retained earnings are the sum of the Company’s profits after dividend payments, since the Company’s inception.
The retained earnings of the Company will be utilised in one or more of the following manner:
o for expansion and growth of business;
o for contributing towards the fixed as well as working capital needs of the Company;
o major repairs and maintenance, including replacement of old assets which have become obsolete;
o renovation/ modernization for improving working efficiency of plants and equipments and for capacity
enhancements;
o to make the Company self dependent of finance from external sources;
o for redemption of loans and debentures (if any);
o for upgradation of technical knowhow;
o non organic growth initiatives, including acquisition of brands/ businesses;
o for issuing fully paid-up bonus shares to the Shareholders.
6. REVIEW OF POLICY
This Policy has been adopted by the Board of Directors of the Company and the Board may review and amend the Policy
from time to time, pursuant to any change in law or otherwise.
7. DISCLOSURES
Rallis shall disclose the Dividend Distribution Policy in the Board’s Report forming part of the Annual Report. This Policy
shall also be disclosed on the website of the Company at www.rallis.co.in. Any changes in the Policy, along with the
rationale for the same, shall also be disclosed in the Annual Report and on the website of the Company.
On behalf of the Board of Directors
BHASKAR BHAT
Chairman
Mumbai, 24th April, 2017
39
RALLIS
` in crores
Name of the Subsidiary
Sl. Zero Waste Rallis PT Metahelix
Particulars Metahelix Life
No. Agro Organics Chemistry Lifesciences
Sciences Ltd.
Ltd. Exports Ltd. Indonesia
1. Reporting period for the subsidiary concerned,
if different from the holding company’s NA NA NA NA
reporting period
2. Reporting currency and Exchange rate as on Reporting Reporting Reporting Reporting
the last date of the relevant Financial year in Currency: INR Currency: INR Currency: INR Currency: IDR
the case of foreign subsidiaries Exchange Exchange Exchange Exchange
Rate: 1 Rate: 1 Rate: 1 Rate: 0.004900
3. Share Capital 0.11 0.07 0.05 1.69
4. Reserves & Surplus 85.58 14.18 (0.22) (0.84)
5. Total Assets 288.76 15.71 0.02 1.08
6. Total Liabilities (excluding Share Capital and 203.07 1.46 0.19 0.23
Reserves & Surplus)
7. Investments 0.82 10.95 - -
8. Turnover 288.55 7.55 - 0.03
9. Profit before taxation 21.92 0.36 (0.01) (0.84)
10. Provision for taxation (10.42) 0.30 - -
11. Profit after taxation 32.34 0.07 (0.01) (0.84)
12. Proposed Dividend - - - -
13. % of shareholding 100.00% 100.00% 100.00% 65.77%
Notes:
1. Rallis Chemistry Exports Ltd. is yet to commence commercial activities and currently is not operational.
2. Indian rupee equivalents of the figures given in foreign currencies in the accounts of the subsidiary Companies, are based on the exchange
rates as on 31.03.2017.
3. Reporting period of the above subsidiaries is the same as that of the Company.
4. Part B of the Annexure is not applicable as there are no associate companies/ joint ventures of the Company as on 31st March, 2017.
BHASKAR BHAT
Chairman
Mumbai, 24th April, 2017
40
ANNEXURE C TO THE BOARD’S REPORT
REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL
AND OTHER EMPLOYEES
The philosophy for remuneration of directors, Key Managerial Personnel (“KMP”) and all other employees of Rallis India
Limited (“Company”) is based on the commitment of fostering a culture of Leadership with Trust. The remuneration policy
is aligned to this philosophy.
This remuneration policy has been prepared pursuant to the provisions of Section 178(3) of the Companies Act, 2013 (“Act”)
and Regulation 19(4) read with Para A (1) of Part D of Schedule II of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”). In case of any inconsistency between
the provisions of law and this remuneration policy, the provisions of the law shall prevail and the Company shall abide by
the applicable law. While formulating this policy, the Nomination and Remuneration Committee (“NRC”) has considered the
factors laid down under Section 178(4) of the Act, which are as under:
“(a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the
quality required to run the Company successfully;
(b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
(c) remuneration to directors, key managerial personnel and senior management involves a balance between fixed and
incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and
its goals.”
Key principles governing this remuneration policy are as follows:
Remuneration for independent directors and non-independent non-executive directors
o Independent directors (“ID”) and non-independent non-executive directors (“NED”) may be paid sitting fees (for attending
the meetings of the Board and of Committees of which they may be members) and commission within regulatory limits.
o Within the parameters prescribed by law, the payment of sitting fees and commission will be recommended by the NRC
and approved by the Board.
o Overall remuneration (sitting fees and commission) should be reasonable and sufficient to attract, retain and motivate
directors aligned to the requirements of the Company (taking into consideration the challenges faced by the Company
and its future growth imperatives).
o Overall remuneration should be reflective of size of the Company, complexity of the sector/ industry/ Company’s
operations and the Company’s capacity to pay the remuneration.
o Overall remuneration practices should be consistent with recognized best practices.
o Quantum of sitting fees may be subject to review on a periodic basis, as required.
o The aggregate commission payable to all the NEDs and IDs will be recommended by the NRC to the Board based on
Company performance, profits, return to investors, shareholder value creation and any other significant qualitative
parameters as may be decided by the Board.
o The NRC will recommend to the Board the quantum of commission for each director based upon the outcome of the
evaluation process which is driven by various factors including attendance and time spent in the Board and Committee
meetings, individual contributions at the meetings and contributions made by directors other than in meetings.
o In addition to the sitting fees and commission, the Company may pay to any director such fair and reasonable expenditure,
as may have been incurred by the director while performing his/ her role as a director of the Company. This could include
reasonable expenditure incurred by the director for attending Board/ Board Committee meetings, general meetings, court
convened meetings, meetings with shareholders/ creditors/ management, site visits, induction and training (organized
by the Company for directors) and in obtaining professional advice from independent advisors in the furtherance of his/
her duties as a director.
41
RALLIS
BHASKAR BHAT
Chairman
Mumbai, 24th April, 2017
42
ANNEXURE D TO THE BOARD’S REPORT
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES
1. A brief outline of the Company’s CSR Policy, Rallis is committed to improve quality of lives of people in the community
including overview of projects or programs it serves through long term stakeholder value creation, with special focus
proposed to be undertaken and a reference on empowerment of communities in rural India. Our CSR initiatives focus
to the web-link to the CSR Policy and projects on Natural Resources Management (Water, Soil Health, Public Healthcare
or programs. and Sanitation), Employability through skills building and education, and
Road Safety. CSR activities at Rallis are implemented by the in-house CSR
team, through Participatory Approach involving beneficiaries, through
NGOs or through Tata Group Focus Initiatives.
The Company has framed its CSR Policy in compliance with the provisions
of the Companies Act, 2013 and the same is placed on the Company’s
website at the weblink: http://www.rallis.co.in/CSR_Policy.htm
7. A responsibility statement of the CSR The implementation and monitoring of CSR Policy is in compliance with
Committee that the implementation and CSR objectives and Policy of the Company.
monitoring of CSR Policy, is in compliance with
CSR objectives and Policy of the Company.
43
RALLIS
44
Annexure to CSR Report (Point 5 (c) of the CSR Report)
` in lakhs
S. No CSR project or Sector in which Projects or programs (a) Local area or Amount Amount spent Cumulative Amount Details of
activity identified the project is other (b) Specify the state and district outlay on the projects expenditure spent: Direct implementing
covered where projects or programs was (budget) or programs upto the or through agency if
Rallis India Limited
(2) Overheads
1 Jal Dhan (Watershed 1. Rural Watershed program in Maharashtra. 185.00 191.19 191.19 Direct
project, Water development Villages covered from Ratnagiri, Latur,
Harvesting and 2. Ensuring Beed, Akola, Raigad, Palghar and Thane
Roof top harvesting) Environment districts
sustainability
Board’s Report
2 RUBY project 1. Promoting Various interventions for students from 103.00 96.98 98.11 Direct
Education Education, 1st to 12th std. at Mumbai, Lote and
(Career guidance, enhancing Akola in Maharashtra and Dahej and
Soft skill training, vocational skills Ankleshwar in Gujarat and through
IT interventions, 2. Road safety volunteering across locations
Science
programs
interventions, Road safety interventions across 1.13
English intervention, locations
Educational support
to unprivileged
students,
Skill training to
Shenva students as
per need).
Road safety
Programs
3 TARA Project 1. Enhancing Imparting various skill trainings and 11.20 2.80 2.80 Direct
Skill Development vocational skills motivating women and youths to be
2. Empowering financial independent at Lote, Akola
Women and Mumbai in Maharashtra and Dahej
3. Rural and Ankleshwar in Gujarat
development
Annexure to CSR Report (Point 5 (c) of the CSR Report)
` in lakhs
S. No CSR project or Sector in which Projects or programs (a) Local area or Amount Amount spent Cumulative Amount Details of
activity identified the project is other (b) Specify the state and district outlay on the projects expenditure spent: Direct implementing
covered where projects or programs was (budget) or programs upto the or through agency if
undertaken project or (a) Direct reporting implementing engaged
programs expenditure period agency
wise on projects or
programs
(2) Overheads
4 Greening Project 1. Ensuring Planting 5,000 new trees and 11.10 11.09 11.09 Direct, except A K Rural
Afforestation environment maintaining 27,627 trees planted through NGO Development
(Conserving soil and sustainability earlier in deforested land near Mumbai at Anegaon Trust
water, increasing (Anegaon), Lote (Songaon) and Akola
ground water level, (Shivar, Malkapur Khadan and Shivani)
green cover) in Maharashtra. Tree plantation at
Dahej (Gujarat) and across all locations.
5 Agri interventions 1. Rural SRI Technique for paddy cultivation and 1.00 0.01 0.01 Direct
for small and development vegetable cultivation as second crop at
marginal farmers 2. Capacity Lote, Mumbai (Maharashtra).
building of
Farmers
3. Livelihood
enhancement
projects
6 Rural Development, Healthcare and Developing model village, focusing on 60.00 72.45 72.45 Direct, except All India
Healthcare and sanitation non conventional energy projects like Jawhar Institute of
Sanitation Rural hydro power, solar and wind power, project Local Self
development construction of toilets Governance
45
RALLIS
46
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable to the
Company during the audit period) and
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; (Not applicable to the
Company during the audit period)
(vi) Other laws specifically applicable to the Company namely:-
a) Insecticides Act, 1968 read with Insecticide Rules, 1971;
b) Fertilizer Control Order 1985;
c) Seeds Act, 1966 read with Seeds Rules, 1968.
We have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India with respect to board and general
meetings.
(ii) The Listing Agreements entered into by the Company with National Stock Exchange of India Limited and BSE Limited
read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines,
standards etc. mentioned above.
We further report that:
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive
Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the
period under review were carried out in compliance with the provisions of the Act.
Adequate notice was given to all directors to schedule the Board Meetings. Agenda and detailed notes on agenda were
sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on
the agenda items before the meeting and for meaningful participation at the meeting.
Decisions at the Board Meetings were taken unanimously;
We further report that there are adequate systems and processes in the Company commensurate with the size and
operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
We further report that during the audit period no events occurred which had bearing on the Company’s affairs in pursuance
of the above referred laws, rules, regulations, guidelines etc.
47
RALLIS
‘Annexure A’
To,
The Members
Rallis India Limited
48
ANNEXURE F TO THE BOARD’S REPORT
[Pursuant to Section 134(3)(m) of The Companies Act, 2013 read with Rule 8(3)
of The Companies (Accounts) Rules, 2014]
(ii) Steps taken by the Company for utilizing alternate sources of Energy:
As part of its long term sustainability plan, the Company has initiated various steps towards utilizing alternate
sources/ renewable source of energy. Some of the key initiatives implemented by the Company are:
o The Company has installed 4 MW Solar power plant at its Unit in Dahej, Gujarat. The electrical energy generated
from the solar power saves 2,898 tons of carbon dioxide against DGVCL power generation.
o An 8 TPH Briquette fire boiler has been commissioned successfully at Dahej SEZ plant. Expected reduction in
carbon dioxide emission due to this will be approximately 7,546 MT as compared to usage of furnace oil.
o Solar water heater is installed for employees in the amenity building bathrooms.
o The Company’s Ankleshwar Administrative building has been successfully converted into Green building. Our
application for Green building certification from Indian Green Building Council is under process.
49
RALLIS
(ii) Benefits derived like product improvement, cost reduction, product development or import substitution:
(a) New process development will benefit potential Contract Manufacturing projects.
(b) Ten products were registered in the international market. Ten registration dossiers were submitted in various
international markets.
(c) A total of five products were registered in India for the domestic/ export market and label claim expansion
approval obtained on 3 products with 8 crops. A total of 7 dossiers were submitted under various categories of
new registration.
(d) Dossier has been submitted to Central Insecticides Board and Registration Committee for leading products like
Neon on cotton; Zeeny on rice crop; Takumi on sugarcane and Nagata on chillies as label expansion.
(e) Four products were commercialized during 2016-17:
1. Epic 75% WG: It is a non-solvent based Water Dispersible Granular broad spectrum systemic fungicide for
the management of major fungal diseases on paddy. It is highly effective against sheath blight and sheath
rot. Feedback from framers and channel partners is very positive in terms of superior efficacy on the target
diseases on paddy, with quick action, long duration control, safe for the crop and higher yield, with reasonable
cost of application.
2. Summit 120 SC: It is a broad spectrum insecticide for the management of caterpillar pests, thrips and
serpentine leaf miners on cotton and chillies. It provides faster effect on insects and is relatively safe to
beneficial insects. It is a water based formulation thus, it is eco- friendly. Summit is very well accepted by both
cotton and paddy farmers for clean control of all target insects with long duration control and crop safety.
3. Neonix: This is a novel seed treatment product developed and manufactured by Rallis for the first time in
India as a pre-mix of insecticide and fungicide, as a solution for the management of both soil insect pests
and fungus diseases, which attack at the early stage of groundnut and wheat crops. It is an eco-friendly
50
formulation, has low particle size with better spreading quality, results in uniform coverage and complete
transfer of formulation on the seed surface and hence, will not contaminate the environment. Neonix is a blue
triangle product, having no adverse effect to beneficial insects, and provides better crop health, resulting in
higher yield.
4. Surplus: Surplus is a multi micro nutrient, nano technology based liquid fertilizer, launched in Maharashtra
during the year, with plans to launch it in other States in the coming year.
(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the
financial year):
(a) the details of technology imported: The Company has not imported any technology during the last three
financial years.
(b) the year of import: Not applicable
(c) whether the technology has been fully absorbed: Not applicable
(d) if not fully absorbed, areas where absorption has not taken place, and the reason thereof: Not applicable
(iv) Expenditure on R & D:
` in crores
2016-17 2015-16
Capital expenditure 0.85 1.50
Revenue expenditure * 20.82 19.43
21.67 20.93
Total R&D expenditure as a percentage of net sales (excluding excise duty) 1.55% 1.62%
* Included in the above is an amount of ` 0.78 crores (Previous year ` 0.77 crores) paid to an external agency.
BHASKAR BHAT
Chairman
Mumbai, 24th April, 2017
51
RALLIS
1. The ratio of the remuneration of each Director to the median remuneration of the Employees of the Company for the
financial year:
(Explanation: (i) the expression “median” means the numerical value separating the higher half of a population from
the lower half and the median of a finite list of numbers may be found by arranging all the observations from lowest
value to highest value and picking the middle one; (ii) if there is an even number of observations, the median shall be
the average of the two middle values)
2. The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company
Secretary, or Manager, if any, in the financial year:
The ratio of remuneration of each Director to the Median Remuneration of all employees who were on the payroll of
the Company and the percentage increase in remuneration of the Directors during the financial year 2016-17 are given
below:
* Part year
The percentage increase in remuneration of the Chief Financial Officer is 9.4% and of the Company Secretary is 16.7%.
52
3. The percentage increase in the median remuneration of employees in the financial year: 10%
5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last
financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof
and point out if there are any exceptional circumstances for increase in the managerial remuneration:
The percentage increase in the salaries of employees other than the managerial personnel in the last financial year
is 9% on a cost to Company basis, as against a decrease of 1.6% in the salary of the Managing Director (managerial
personnel as defined under the Act). The increment given to each individual employee is based on the employees’
potential, experience as also their performance and contribution to the Company’s progress over a period of time and
also benchmarked against a comparable basket of relevant companies in India.
6. Affirmation that the remuneration is as per the Remuneration Policy of the Company:
It is affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and
other employees, adopted by the Company.
On behalf of the Board of Directors
BHASKAR BHAT
Chairman
Mumbai, 24th April, 2017
53
RALLIS
54
S. No Name and Address of the CIN/GLN Holding/ % of Shares Applicable
Company Subsidiary/ Held Section
Associate
3. PT Metahelix Lifesciences Not applicable Subsidiary 65.77 2(87)(ii)
Indonesia* Company
Rukan Thamrin Residence RB/15F,
JI. Kebon Kacang Raya, Kel. Kebon
Melati Kec. Tanah abang, Jakarta
Pusat
4. Zero Waste Agro Organics Limited U01400PN2011PLC141307 Subsidiary 100 2(87)(ii)
Kapil Towers, First Floor, Company
S. No. 40-1/B Near Sagam Bridge,
Dr. Ambedkar Road, Pune 411 001
5. Rallis Chemistry Exports Limited U74990MH2009PLC193869 Subsidiary 100 2(87)(ii)
156/ 157 15th Floor Nariman Company
Bhavan, 227 Nariman Point,
Mumbai 400 021
* Metahelix Life Sciences Limited is holding 65.77%
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
(i) Category-wise Share Holding
Category of No. of Shares held at the beginning No. of Shares held at the end %
Shareholders of the year of the year Change
during
Demat Physical Total % of Demat Physical Total % of the
Total Total year
Shares Shares
A. Promoters
(1) Indian
a) Individual / HUF 0 0 0 0 0 0 0 0 0
b) Central Govt. 0 0 0 0 0 0 0 0 0
c) State Govt.(s) 0 0 0 0 0 0 0 0 0
d) Bodies Corporate 9,74,16,610 0 9,74,16,610 50.09 9,74,16,610 0 9,74,16,610 50.09 0
e) Banks / FI 0 0 0 0 0 0 0 0 0
f) Any Other…. 0 0 0 0 0 0 0 0 0
Sub-Total (A)(1): 9,74,16,610 0 9,74,16,610 50.09 9,74,16,610 0 9,74,16,610 50.09 0
(2) Foreign
a) NRIs – Individuals 0 0 0 0 0 0 0 0 0
b) Other – Individuals 0 0 0 0 0 0 0 0 0
c) Bodies Corporate 0 0 0 0 0 0 0 0 0
d) Banks / FI 0 0 0 0 0 0 0 0 0
e) Any Other…. 0 0 0 0 0 0 0 0 0
Sub-Total (A)(2): 0 0 0 0 0 0 0 0 0
Total Shareholding 9,74,16,610 0 9,74,16,610 50.09 9,74,16,610 0 9,74,16,610 50.09 0
of Promoters (A) =
(A)(1)+(A)(2)
55
RALLIS
Category of No. of Shares held at the beginning No. of Shares held at the end %
Shareholders of the year of the year Change
during
Demat Physical Total % of Demat Physical Total % of the
Total Total year
Shares Shares
B. Public Shareholding
(1) Institutions
a) Mutual Funds / UTI 2,07,43,072 3,360 2,07,46,432 10.67 1,92,07,558 3,360 1,92,10,918 9.88 -0.79
b) Banks / FI 2,35,945 40,500 2,76,445 0.14 6,52,932 40,500 6,93,432 0.36 0.21
c) Central Govt. 0 0 0 0 0 0 0 0 0
d) State Govt.(s) 0 8,01,150 8,01,150 0.41 0 8,01,150 8,01,150 0.41 0
e) Venture Capital 0 0 0 0 0 0 0 0 0
Funds
f) Insurance 27,30,330 0 27,30,330 1.40 61,85,497 0 61,85,497 3.18 1.78
Companies
g) FIIs 73,60,506 0 73,60,506 3.78 2,29,822 0 2,29,822 0.12 -3.67
h) Foreign Venture 0 0 0 0 0 0 0 0 0
Capital Funds
i) Others (specify) 73,49,483 0 73,49,483 3.78 84,54,196 0 84,54,196 4.35 0.57
Foreign Portfolio
Investors (Corporate)
Sub-Total (B)(1): 3,84,19,336 8,45,010 3,92,64,346 20.18 3,47,30,005 8,45,010 3,55,75,015 18.29 -1.89
(2) Non-Institutions
a) Bodies Corporate
i) Indian 1,43,12,197 74,850 1,43,87,047 7.40 1,65,06,324 74,850 1,65,81,174 8.53 1.13
ii) Overseas 0 3,900 3,900 0 0 3,900 3,900 0 0
b) Individuals
i) Individual 1,64,94,478 17,88,560 1,82,83,038 9.40 1,92,22,790 17,35,100 2,09,57,890 10.78 1.38
Shareholders holding
nominal share capital
upto ` 1 lakh
ii) Individual 2,51,04,549 0 2,51,04,549 12.91 2,30,50,866 0 2,30,50,866 11.85 -1.06
Shareholders holding
nominal share capital
in excess of `1 lakh
c) Others (specify)
i) Trusts 9,400 0 9,400 0 8,83,435 0 8,83,435 0.45 0.45
Sub-Total (B)(2): 5,59,20,624 18,67,310 5,77,87,934 29.72 5,96,63,415 18,13,850 6,14,77,265 31.61 1.89
Total Public 9,43,39,960 27,12,320 9,70,52,280 49.91 9,43,93,420 26,58,860 9,70,52,280 49.91 0
Shareholding
(B)=(B)(1)+(B)(2)
C. Shares held by 0 0 0 0 0 0 0 0 0
Custodian for GDRs
& ADRs
Grand Total (A+B+C) 19,17,56,570 27,12,320 19,44,68,890 100.00 19,18,10,030 26,58,860 19,44,68,890 100.00 0
56
(ii) Shareholding of Promoters
Sl. Shareholder’s Shareholding at the beginning Shareholding at the % change
No. Name of the year end of the year in share
holding
No. of Shares % of total % of Shares No. of % of total % of Shares
during
Shares of the Pledged/ Shares Shares of the Pledged/
the year
Company encumbered Company encumbered
to total to total
shares shares
1 Tata Chemicals Limited 9,73,41,610 50.06 0 9,73,41,610 50.06 0 0
2 Ewart Investments Limited 75,000 0.04 0 75,000 0.04 0 0
Total 9,74,16,610 50.09 0 9,74,16,610 50.09 0 0
(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):
Sl. For Each of the Shareholding at the Date Reason Increase/ Decrease Cumulative shareholding
No. Top 10 beginning of the year in shareholding during the year
Shareholders
No. of % of total No. of shares % of total No. of shares % of total
shares shares shares shares
of the of the of the
Company Company Company
1 Mr. Rakesh 2,01,05,820 10.34 2,01,05,820 10.34
Jhunjhunwala
08.04.2016 Sale of shares 7,50,000 0.39 1,93,55,820 9.95
22.04.2016 Sale of shares 1,00,000 0.05 1,92,55,820 9.90
16.09.2016 Purchase of shares 1,00,000 0.05 1,93,55,820 9.95
23.09.2016 Purchase of shares 13,50,000 0.69 2,07,05,820 10.64
23.09.2016 Sale of shares 13,50,000 0.69 1,93,55,820 9.95
07.10.2016 Purchase of shares 6,40,000 0.33 1,99,95,820 10.28
07.10.2016 Sale of shares 6,40,000 0.33 1,93,55,820 9.95
20.01.2017 Purchase of shares 2,00,000 0.10 1,95,55,820 10.05
20.01.2017 Sale of shares 2,20,000 0.11 1,93,35,820 9.94
31.03.2017 At the end of the year - - 1,93,35,820 9.94
57
RALLIS
Sl. For Each of the Shareholding at the Date Reason Increase/ Decrease Cumulative shareholding
No. Top 10 beginning of the year in shareholding during the year
Shareholders No. of % of total No. of shares % of total No. of shares % of total
shares shares shares shares
of the of the of the
Company Company Company
58
Sl. For Each of the Shareholding at the Date Reason Increase/ Decrease Cumulative shareholding
No. Top 10 beginning of the year in shareholding during the year
Shareholders No. of % of total No. of shares % of total No. of shares % of total
shares shares shares shares
of the of the of the
Company Company Company
2 ICICI Prudential 11.11.2016 Sale of shares 72,228 0.04 1,26,82,356 6.55
(various accounts)
25.11.2016 Purchase of shares 9,560 0.00 1,26,91,916 6.55
59
RALLIS
Sl. For Each of the Shareholding at the Date Reason Increase/ Decrease Cumulative shareholding
No. Top 10 beginning of the year in shareholding during the year
Shareholders No. of % of total No. of shares % of total No. of shares % of total
shares shares shares shares
of the of the of the
Company Company Company
60
Sl. For Each of the Shareholding at the Date Reason Increase/ Decrease Cumulative shareholding
No. Top 10 beginning of the year in shareholding during the year
Shareholders No. of % of total No. of shares % of total No. of shares % of total
shares shares shares shares
of the of the of the
Company Company Company
61
RALLIS
Sl. For Each of the Shareholding at the Date Reason Increase/ Decrease Cumulative shareholding
No. Top 10 beginning of the year in shareholding during the year
Shareholders No. of % of total No. of shares % of total No. of shares % of total
shares shares shares shares
of the of the of the
Company Company Company
13. FIL Investments 26,35,136 1.36 26,35,136 1.36
(Mauritius) Ltd
08.04.2016 Purchase of shares 7,85,492 0.40 34,20,628 1.76
62
(v) Shareholding of Directors and Key Managerial Personnel:
For Each of the Directors Shareholding at the beginning Cumulative Shareholding during the
of the year year
No. of shares % of total shares of No. of shares % of total shares of
the Company the Company
Dr. C. V. Natraj, Non-Executive,
Independent Director (Appointed w.e.f. 22nd July, 2016)
At the beginning of the year 0 0.00 0 0.00
Purchase of shares on 20.05.2016 4,831 0.002 4,831 0.002
At the end of the year 4,831 0.002 4,831 0.002
* None of the Directors, other than Dr. C.V. Natraj, holds any shares in the Company.
For Each of the KMP Shareholding at the beginning Cumulative Shareholding during the
of the year year
No. of shares % of total shares of No. of shares % of total shares of
the Company the Company
Mrs. P. S. Meherhomji, Company Secretary
At the beginning of the year 3,000 0.002 3,000 0.002
Date wise Increase/ Decrease in Shareholding 0 0 0 0
during the year specifying the reasons for
increase/ decrease (e.g. allotment/ transfer/
bonus/ sweat equity etc):
At the end of the year 3,000 0.002 3,000 0.002
Mr. Ashish Mehta, Chief Financial Officer
At the beginning of the year 0 0 0 0
Date wise Increase/ Decrease in Shareholding 0 0 0 0
during the year specifying the reasons for
increase/ decrease (e.g. allotment/ transfer/
bonus/ sweat equity etc):
At the end of the year 0 0 0 0
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding/ accrued but not due for payment
` in crores
Secured Loans Unsecured Deposits Total
excluding Loans Indebtedness
deposits
Indebtedness at the beginning of the financial year
i) Principal Amount 2.08 27.88 - 29.96
ii) Interest due but not paid - - - -
iii) Interest accrued but not due - 0.25 - 0.25
Total (i+ii+iii) 2.08 28.13 - 30.21
Change in Indebtedness during the financial year
Addition - 0.39 - 0.39
63
RALLIS
1 Fee for attending Board/ 2,50,000 2,10,000 4,20,000 4,20,000 2,00,000 15,00,000
Committee Meetings
64
Sl. Particulars of Remuneration Name of Directors Total
No. Amount
Dr. C.V. Natraj Mrs. Padmini Khare Kaicker
(w.e.f. 22.07.2016) (w.e.f. 22.07.2016)
2 Commission NA NA -
Overall Ceiling as per the Act for payment of commission to Non Executive Directors 2,08,09,936
Notes: 1. Commission is for the year 2015-16, paid in the year 2016-17.
2. Ceiling limits are for the year 2016-17. Commission approved for the year 2016-17 and payable in 2017-18 is
within the ceiling limits and is given in the Corporate Governance Report.
(b) Value of perquisites under Section 17(2) of the 3,60,385 4,68,549 8,28,934
Income Tax Act, 1961
65
RALLIS
2 Stock Options - - -
3 Sweat Equity - - -
4 Commission - - -
- as % of profit - - -
- others, specify…. - - -
Penalty
Punishment None
Compounding
B. DIRECTORS
Penalty
Punishment None
Compounding
Penalty
Punishment None
Compounding
BHASKAR BHAT
Chairman
Mumbai, 24th April, 2017
66
MANAGEMENT DISCUSSION AND ANALYSIS
INDUSTRY STRUCTURE
India is the fourth largest global producer of agrochemicals after USA, Japan and China. The industry size was to the tune
of USD 4.4 billion in FY15 and is expected to grow at 7.5% per annum to reach USD 6.3 billion by FY20. Approximately 50%
of the demand comes from domestic consumers and the rest from exports. While the domestic demand is expected to
grow at 6.5% per annum, exports are estimated to grow at 9% per annum during the same period, as per a report on Indian
Agrochemical Industry published by FICCI in July, 2016.
Global population is expected to cross 9 billion by 2050. Rising population has led to increasing food demand. India is the
second most populous country in the world, with its population estimated to grow over time.
To meet the food and nutrition needs of a growing population requires a sustainable approach that puts thrust on increasing
productivity against a background of lower yields and decreasing farm sizes. It requires a push from all stakeholders – the
farmer, the government and the industry collectively, so that the changing needs of the nation are met. Approximately
25% of the global crop output is lost due to attacks by pests, weeds and diseases, says the FICCI report cited above.
Agrochemicals can play a major role in enhancing productivity and protection of crop post-harvest. Insecticides are the
largest sub-segment of agrochemicals with 60% market share, whereas herbicides with 16% market share are the fastest
growing segment in India.
Increasing demand of food grains for the growing population and declining farmlands have intensified pressure for
improving farm yields and reducing crop losses due to pest attacks. Yields in India stand at 3 tons/ha compared to the
global average of 4 tons/ha. Developed countries like USA (7), UK (7), France (7.5) and Germany (7) are able to achieve
higher per hectare yields than India due to better farming practices. Current low consumption of crop protection products
in India, at 0.6 kg/ ha compared to the world average of 3 kg/ ha, offers opportunities for increased usage to drive up farm
productivity.
Current year’s budget allocation and initiatives aspire to double agriculture income in five years. Government’s support,
with increased funds for irrigation, crop insurance and credit facilities to help the farmers deal with weather-related risk,
income security, increase their production and productivity and to deal with post-harvest challenges, have raised the
prospects of growth of the Agriculture sector.
Indian agrochemicals market will be driven by growth in herbicides and fungicides, increasing awareness towards judicious
use of agrochemicals, contract manufacturing and export opportunities. Challenges such as non-genuine products,
appropriate focus on R&D, inefficiencies in the supply chain etc. need to be addressed on priority. In addition to the use
of crop protection chemicals, Indian agriculture needs to focus on specific solutions to enhance crop productivity. It is
imperative for us to adopt efficient agronomy practices, fertigation, seed treatment, biotechnology and integrated pest
management to reduce wastage and attain self-sufficiency in agricultural output.
The total number of pests attacking major crops has increased significantly from 1940s. For instance, the number of pests
which are harmful for crops such as rice has increased from 10 to 17 whereas for wheat they have increased from 2 to 19.
Increased damage to crops from pests and subsequent losses poses a serious threat to food security and further underscores
the importance of agrochemicals. The most recent example is the large scale whitefly infestation of Bt cotton crop in North
India last year. Due to this, cotton area in Punjab and Haryana has declined by 27% to 7.56 lakh hectares in the FY 17 crop
year, as farmers shifted to other crops after incurring losses owing to whitefly pest attack.
67
RALLIS
INDIAN MARKETS
Crop protection:
A pick-up in agricultural growth on the back of an improved South West monsoon followed the two previous years of
drought. The agrochemicals market in 2016-17 is estimated to have grown by 8-10% over the previous year. Growth has
come from the Northern, Eastern and Western parts of India, while South India suffered severe drought conditions because
of the failure of North East monsoon.
Kharif Paddy segment showed promise, with slightly increased growth facilitated by availability of water unlike in the
previous year. Pulses segment recorded higher growth rate compared to the previous year. Cotton segment remained in
de-grown state due to last year’s whitefly infestation and other issues.
The year started on a positive note, with a forecast of a normal monsoon and good initial rainfall. Growth of agriculture
and allied sectors has improved in 2016-17, with an increase in acreages and production. The area sown under Kharif and
Rabi crops during 2016-17 was 3.5% and 5.9% higher respectively compared to 2015-16. Production of Kharif food-grains is
estimated at 135.0 million tonnes for the year, as compared to 124.1 million tonnes in the previous year.
Growth was however not uniform across India. Delayed onset of monsoon, excess rainfall in certain geographies and dry
spells in some areas, especially in the southern States due to absence of the North East monsoon, impacted cropping.
The North East monsoon, which covers Tamil Nadu, coastal Andhra Pradesh, south interior Karnataka and Kerala between
October and December, ended with a deficit of 60%. This was the worst North East monsoon recorded in the country since
1876. This severely impacted the acreage of key crops like rice, vegetables, spices and pulses in the southern States during
the Rabi season.
During the Rabi season, area sown under wheat rose by 7.9% over the year-ago period, pulses rose by 11.4%, while area
under oilseeds increased by 6.7%. On the other hand, area sown under rice decreased by 15.1% and that under coarse
cereals declined by 5.5% over the previous year.
Lower crop pest pressure was reported in many areas, such as brown plant hopper in paddy in South India, whitefly
on cotton, pest load on pulses and vegetables. This resulted in limited growth in the insecticides segment. However,
herbicides segment received a good response from the market, whereas normal growth in fungicide use was reported.
Business was impacted by poor cash flow rotation, which was also contributed by low prices of key crops during the year.
Overall pipeline stock of crop protection chemicals in the market for the industry is very high due to poor liquidation in
the Rabi season.
Despite challenges, your Company achieved a revenue growth of 8% in the Domestic Formulations Business over the
previous year with a higher increase in the underlying volume growth. Your Company introduced three new products
during the year, in response to market changes and to meet farmers’ expectations for advanced chemistries and new
technologies. These are Epic, an improved and advanced WDG formulation of Hexaconazole, launched in paddy; Summit,
an advanced new generation insecticide, effective against thrips and almost all caterpillar pests; and Neonix, the first ever
seed treatment product in India to control both soil insects and soil borne diseases in groundnut and wheat crops.
68
Epic is a versatile broad spectrum fungicide developed by Rallis indigenously
in the form of WG (water dispersible granule) for effective management of
large number of fungal diseases of multiple crops. It is a highly powerful
fungicide, which acts very quickly against diseases with a very low dose. It is
an eco-friendly formulation, as it is free from solvents, recommended at very
low dose, low particle size, quickly absorbed by the plant system, with hardly
any quantity going to the environment. Epic is used as both preventive and
curative applications, as well as providing long duration of control, hence it
can increase the spray intervals and reduce the number of sprays. It can offer
better crop health and higher yield.
69
RALLIS
Sub-optimal agricultural practices in many parts of the country over the years have led to depleting micronutrients from
the soil and multiple nutrient deficiencies. This has become a major constraint in increasing agricultural productivity on
our farms. There is an urgent need to promote balanced use of fertilization and educating the Indian farmer about the
deficiencies of secondary and micronutrients in the soil.
To support sustainable agriculture, your Company is increasing its focus on plant growth nutrients. Rallis has a wide range
of specialty nutrient products and is focused on greener and cleaner products to address sustainable agriculture. These
products are geared to address the concerns of deteriorating soil health and crop health concerns, and also serve the needs
of small and marginal farmers.
Revenues in plant growth nutrients increased by 15% during 2016-17 over the previous year. The Company launched
Surplus, a multi micro nutrient, nano technology based liquid fertilizer in Maharashtra. It will be launched in other States in
the coming year. Going forward, focus will be on product development activities and building Ralligold as a major brand
in the next 3-5 years.
During the year, sales for GeoGreen, the organic manure brand of the Company, were higher by about 10% over previous
year. However, severe drought in Southern India impacted sales to some extent. A new product, Geo Green P plus was
introduced during the year and has been well accepted by the market.
There was a good increase in enrolments in the Company’s Grapes Samrudh Krishi programme. This is an advisory with
knowledge intensive, service oriented initiative to increase farm productivity. Services like weather and pest forecasting by
SMS, weekly visit by advisory expert, query call answers, soil and water testing, crop seminar and field days are provided to
the registered farmers.
MoPu (More Pulses) initiative continues to make good progress in Madhya Pradesh and Maharashtra and adds significant
value for farmers who are covered under this programme.
AGRI SOLUTIONS
Your Company’s Mission is to create value for farmers by enhancing productivity and farm income through end to end Agri
Solutions. This initiative has been branded as Rallis Samrudh Krishi®. Beginning with understanding the complete needs
and expectations of Indian farmers, your Company offers complete Package of Practices (PoP) for major crops, comprising
70
agri inputs (crop protection, plant growth nutrients, seeds and organic fertilizer) at the right time and place. The Integrated
Crop Management initiative provides complete solution from land preparation to harvesting to address production
constraints viz., insect pests, diseases & weeds, nutritional disorders, labour scarcity, increased fertilizer use in major crops
viz., rice, cotton, grape, soybean, groundnut, potato, etc. Rallis Samrudh Krishi® demonstrates cultivation practices in the
form of PoPs across the country, as one-stop solution for farmers to get maximum yield with reduced cost of cultivation.
Important concerns viz., soil health management, nutrient use efficiency, water management, plant nutrient management,
effective management of pests and diseases with need based applications are addressed with Rallis’ key interventions,
starting from sowing to harvesting, which will reflect in terms of higher yields with reduced cost of cultivation.
The Company also offers agronomic practices and procedures, information and pest and weather forecast services using
e-interventions and building relationship with farmers and channel partners through experience sharing. This friendly and
consultative approach demonstrated to the farmer helps him to consider us as his best friend and guide to enhance his
productivity and net farm income.
Rallis Samrudh Krishi® - Agri solutions, as a concept, is principally aimed at creating value for the farmer through improving
the quality and yield of their existing crops, enabling him to add one more crop/ harvest and helping him with crop rotation/
mix change to deliver higher value. It also creates value for the Company through higher sales of both crop protection and
non pesticide products.
Key Enablers: Your Company has identified the following key enablers to achieve its aim of being an end to end Agri
Solutions provider to the Indian farmer:
1. Package of Practices (PoP): Customized and dynamic PoP are designed and developed for key crops such as paddy,
cotton and tomato. Innovative solutions for inputs and practices are also developed. The aim is yield enhancement of
target crops.
2. Digital initiatives: The Company’s ICT initiatives are aimed at more effectively providing necessary services to the agri
community through -
a. Predictive and advisory services covering critical pests, weather, output and price trends.
b. Access to apps such as Rallis Krishi Samadhan app for farmers for information on the go and Sampark app for field
force to complement their competency.
Digital interventions also play a key role in the capability enhancement of the sales team through regular training
programmes.
3. Channel relationship and alignment, through timely support of inputs and agri solutions to channel community.
4. Capability building and cultural transformation by developing customized knowledge and skills and through timely
intervention.
During 2016-17, Rallis Samrudh Krishi® approach has been tested and tried in 200+ locations, covering 17 crops in Kharif
and Rabi seasons. The results achieved are very encouraging and farmers are satisfied with the approach and execution
of the concept. Key learnings from these experiments will help the Company in building the knowledge and skill of the
implementing team, enable timely interventions at critical crop stages, ensure timely availability of required agri inputs,
execution of agronomic and other practices as per PoP and allow differentiation through introduction of unique products
which enhance value for the farmers through improvement in the quality of their produce. Engagement and alignment of
dealers with Rallis Samrudh Krishi® will also be an area of continuous focus. Going forward, these learnings will help the
Company in scaling up the concept in the coming years. During 2017-18, the Company aims to cover all 250 territories with
focus on key crops, with an aim to reach 1 million farmers through institutional and retail models.
71
RALLIS
Most leading agrochemical companies recorded lower sales in dollar terms in 2016. Sales of crop protection products
declined in almost all regions, with the highest fall of 5.5% occurring in Latin America (LATAM). In terms of real growth,
NAFTA recorded a modest growth of +0.9%, while Europe and Asia declined by 1.6% and 2.6% respectively. Economic
weakness continued to affect Russia and Ukraine. Canada benefitted due to improved rainfall over the previous year. Season
in LATAM was characterized by further shift of maize acres into soybean due to depressed crop prices.
At the start of the year, there was some optimism for a more positive market environment in 2016. However, as the
year progressed, this potential weakened, mainly due to high distributor inventories affecting ex-manufacturer sales.
Low crop prices also affected farm profitability, resulting in restrained purchasing by farmers, notably in the USA. Brazil
continued to be depressed by dry conditions and a weak economy, whilst some recovery was seen in Argentina with
the new Government removing export tax on maize and wheat and reducing it for soybeans. The European Union was
affected by the full impact of the 2015 CAP reform, a poor farm economy and adverse weather. Asia was more positive
due to a better monsoon, although many of the major markets in the region suffered a decline. Weather conditions in
Western Australia improved, but the market was affected by low crop prices. The Chinese market suffered due to the ‘zero
growth’ policy. Rice prices generally improved as de stocking by Thailand appears to be complete, with developing East
Asian markets performing strongly.
Various factors like variable weather patterns, drought/ El Niño phenomenon, lower prices of agricultural commodities,
high inventory at distributor level in many countries, strengthening of US dollar and a weak monsoon lead to the decline in
global crop protection market of 2016 to 49.9 billion USD.
Despite adverse conditions, your Company achieved revenues of ` 441 crores in its international business, registering
a growth of 10% over the previous year. The Company is also focusing on building a business platform on Contract
Manufacturing for leading global players. During the year, discussion and activities with some leading Companies
progressed well. There are several projects which are at various phases of evaluation, with a couple of these being qualified
for commercial orders going forward.
72
to support the farm sector by means of extended credit facilities, dedicated micro and macro irrigation fund, post-harvest
support, market reforms, crop insurance and basic infrastructure facilities. These will lead to positive sentiments in the
farming community to bring more area under cultivation.
Per hectare consumption of agrochemicals in India is much lower than the global average; the journey of bridging this
gap will create huge opportunities in coming years. To meet the demand for food grains production (both at domestic and
international level) from limited arable land demands productivity improvement, which will further create opportunities
for high quality agricultural inputs. Furthermore, about 15-25% potential crop production in India is lost due to insects,
pests, weeds and diseases. A UN study on global population trends predicts that India will surpass China to become the
most populous nation in the world by 2022. With a size of 1.32 billion, India currently supports nearly 17.84% of the world
population, with 2.4% land resources and 4% of water resources. Keeping pace with the growing population and their
changing demand for quality food, the country will need to raise the quantity and quality of agricultural production as
also productivity, to ensure food and nutrition security of the nation. Crop protection chemicals, agronomy, fertigation,
seed treatment, bio-technology development, etc. are some of the emerging solutions.
Food inflation is a persistent problem in Indian economy. While demand patterns in food category are more predictable;
estimating supply is a bit of a challenge. Consumers often see more price volatility in perishable crops like potato, tomato,
coriander and onion. In recent times, staples like oilseeds and pulses have also shown sharp price variations, both on the
upside and downside.
The solution to this problem is timely availability of data for sowing, harvesting and production. Indian agriculture is silently
but steadily embracing IT tools, which will bring the biggest change in the future as an opportunity. Indian farm economy
can benefit enormously by availability of timely, accurate and actionable data. Investment in ag-data will benefit the farmer
by making agriculture more predictable and remunerative for him.
Current forecasting methods include time-series analysis for predicting crop output. Past data will become less relevant for
future predictions in the context of climate change and fast changing weather patterns across the globe. The need of the
hour is to have tools to get the data on a real-time basis.
Soil fertility and productivity can be improved with data application. Poor productivity in India in most crops can be largely
attributed to lack of soil fertility. Soil fertility in India is deteriorating due to erroneous application of fertilizers (more
Nitrogen (N) and less of Phosphorus (P) and Potash (K) than the recommended mix). NPK mapping at each field is necessary
for the right prescription, including type of seed, seed rate, irrigation, plant growth regulators, fertilizers, etc. Data obtained
from a combination of on-field devices and satellite imagery can estimate nutrient value of soil at a given point of time. This
can be complemented with data obtained from soil health cards.
Apart from agriculture, the animal husbandry industry can also benefit by use and application of data. Data from RFID tags
can track cow movement and data from collar tags can be used to monitor body/ neck movement which can help in heat
detection and understand cow health. The data can be used to improve feed intake, lactation cycles and ultimately increase
milk productivity.
Financing to farmers is another challenge which data can solve. Lending to farmers can become very efficient, logical and
data-driven, if bankers have access to data on likely crop output from the farmer’s field. Likewise, insurance companies can
ascertain risk premium if they have access to weather, soil, pest and output data.
Thus, use of IT and data has the potential to solve most ag-supply-chain problems. “Green revolution” in the sixties and
seventies in the last century made our country self-sufficient in food. Indian population has more than doubled since then.
73
RALLIS
Your Company is also gearing up to avail of the opportunities through Rallis Samrudh Krishi®, its end to end agri solutions
approach. It is also leveraging the opportunities arising out of the IT revolution, by more effectively providing necessary
services to the agri community through its digital interventions.
Agrochemical industry works under stringent regulatory environment, wherein chances of frequent changes in regulatory
guidelines are very high. This could lead to delays in obtaining necessary approvals.
Dependency on global economy, business environment, fluctuation in currency, global logistics and socio-political
environment have direct or indirect impact on the Agrochemicals Industry and can lead to disruption of business in
specified products.
This year, contract manufacturing was carried out for two products on pilot and commercial level at the Company’s
Dahej manufacturing facility. One product has shown potential; further work is in progress to increase our production
capacity.
Process Chemistry, along with engineering, is focused on developing efficient and robust processes for molecules in
areas of crop protection that have good market potential. Process improvement projects of existing products have been
instrumental in improving product quality, yields and productivity of manufacturing processes. Process developments for
many contract manufacturing opportunities were also taken up as a major activity. Environment, Health and Safety (EHS)
considerations were given prime importance. The developed processes are tested at the state-of-the-art Pilot Plant facility
at Dahej to ensure robustness and adoptability for effective commercialization.
Research development activities also focused on the development of newer and safer formulations to meet the needs of the
farmers and environment for better efficacy, improved value and services. Special emphasis is given for the development
of solvent free water based formulations as well as dust free granular formulations. A number of registration dossiers have
been submitted during the year for supporting domestic and international business.
Product development of new formulations in areas of Crop Protection, Plant Growth Promoters (PGPs) and Plant Growth
Nutrients (PGNs) was also undertaken with the help of field trials on different crops and in different agro climatic areas to
assess their bio efficacy and ensuring that these formulations are safe to use.
74
Joint Research and Development activities between RRC and the Innovation Centre, TCL, Pune continued to make good
progress. A novel technology based liquid micronutrient formulation is ready for launch in 2017-18 on fruits and vegetable
crops. Similarly, a plant based extract for the management of mite pests on plantation crops is at an advanced stage of
development and field trials.
For the first time in India, registration of a combination of an Insecticide and a Fungicide for seed treatment was obtained
to offer a superior solution to the farmer.
The Company’s initiative of New Solution Development and Introduction (NSDI) process has identified several new
products to be developed over the next 5 years. Several products are at various stages of development. Improvement
plans for existing products are also underway with an objective of cost reduction and being competitive in the market.
Process Development for contract manufacturing opportunities is also undertaken and some of these are being scaled up
for commercialization shortly.
The Company has also initiated a few product safety studies under the advice of Central Insecticides Board and Registration
Committee, which will continue in the coming year.
75
RALLIS
Going beyond regulations in Environment Sustainability continues to be an area of utmost importance. This is one of
the key elements in our corporate sustainability model which drives business sustainability. Your Company has, through
the years, endeavored to use more renewable sources of energy, reduction and reutilization of industrial wastes, water
conservation through internal and external initiatives to become water neutral and reducing our carbon footprint. This has
happened due to various initiatives, including rain water harvesting projects in the community and installation of 4.0 MW
of solar plant at Dahej.
As a part of our commitment towards greening, Rallis is continually working on developing green products, water based
formulations and organic fertilizers. At Rallis, we monitor carbon dioxide emissions in terms of carbon footprint as per
International standards ISO 14064 covering all three scopes i.e. Scope-1, Scope-2 and Scope-3.
Ankleshwar plant administration building has been renovated and constructed as per Indian Green Building Council (IGBC )
requirements, considering various aspects such as water savings, energy savings, zero discharge of waste water, onsite solid
waste disposal treatment, rain water harvesting, use of eco-friendly construction material etc. We have applied for green
building certification by IGBC.
Your Company has laid out a system, going beyond regulations, by continuously working on different technologies in
effluent management to upgrade waste water treatment in all its manufacturing units.
As a part of its greening initiative, the Company has installed an 8.0 TPH briquettes boiler at its Dahej SEZ plant. This will
fulfill the entire steam requirement of the plant and reduce the use of furnace oil substantially, thereby reducing the carbon
footprint of the Company. Briquette boiler uses biomass as a fuel, which is a greener fuel and replaces the use of fossil fuel.
Total Shareholder Return (TSR) is the yearly rate of return of an investment made, considering capital appreciation plus
dividends over time. Your Company has enhanced shareholder value through increase in investor returns, which is reflected
in a healthy TSR for our Shareholders over the years.
The TSR of an investment made in your Company in March 2008, kept till the last trading day of March 2017 works out to be
35% per annum. This means that if one had invested ` 100 in Rallis’ stock in March 2008, the total value that the investment
would have earned would be ` 1,145, if one had sold the stock on the last trading day of March 2017.
The dividend payout of the Company has seen a steady improvement over the same period. From ` 16/- per share in
2008 (on Equity Shares of ` 10/- each), dividend increased to ` 2.50 per share in 2016 (on Equity Shares of ` 1/- each). If
the recommended dividend is approved by the Shareholders, the dividend payout of the Company in 2017 will be ` 3.75
per share, including a one-time special dividend of `1.25 per share. The EVA (Economic Value Added) of the Company is
` 21crores during 2016-17, as compared to ` 22 crores during 2015-16.
76
Rallis’ stock price has significantly out-performed the BSE Sensex during the past 10 years. If both the Rallis stock price and
Sensex were indexed to 100 as on the last trading day of March 2008, the y-o-y performance of the Rallis stock and Sensex
till FY 2017 is shown in the chart.
1168
1000.00
Index
500.00
189
100
0.00
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
Rallis Share Price 335 392 1,255 1,321 121 115 173 226 170 261
Sensex 15,644 9,709 17,528 19,445 17,404 18,836 22,386 27,957 25,342 29,621
Your Company is committed to ensuring an effective internal control environment that provides reasonable assurance
regarding the effectiveness and efficiency of operations, adequacy of safeguards for assets, reliability of financial controls
and compliance with applicable laws and regulations. For this, the Company has laid down standard operating procedures
and policies to guide the operations of the business.
The internal audit processes, both at the business and corporate levels provide reasonable assurance on the adequacy
and effectiveness of such internal controls and compliances, through the reviews of the functions and processes, as per
the annual audit plan agreed with the Audit Committee. A risk control mapping is in place for each audit unit. To maintain
independence, the internal audit function reports to the Chairperson of the Audit Committee of the Board.
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Additionally, there has been a continued focus on IT enablement and computerisation of key process controls through the
ERP systems to maximise automated control transactions across key functions. IT enabled controls are verified as part of
the review of functions and processes undertaken under annual internal audit plan. Also, a new IT workflow tool is in place
in the Internal Audit Department to enable the audit team to make meaningful contributions to the Organization’s overall
governance, risk management and internal controls.
HUMAN RESOURCES
People management is the backbone of your Company and it is regarded as one of the important resources for the success
of Rallis. Over the years, your Company has strengthened its HR processes to ensure continual development and growth of
its employees. HR processes are fine-tuned and updated to attract and recruit talent into the Company.
Though Rallis is an equal opportunity employer, special focus is given to enhance diversity and promote employment
opportunities for under-privileged segments of society by way of affirmative action to ensure that these segments get their
due in building Team Rallis.
The Company has well documented and updated policies in place to prevent any kind of discrimination and harassment,
including sexual harassment. The Whistle Blower Policy plays an important role as a watchdog. The Company measures the
satisfaction of internal customers through in-house ICSS (Internal Customer Satisfaction Survey) wherein it is seen that the
satisfaction of internal customers of HR is as high as 75%.
The Company participates in external assessment by various expert bodies to measure the effectiveness of HR related
matters. Last year, Rallis participated in the assessment under the Tata Affirmative Action Programme (TAAP) wherein
significant progress was observed by the assessors over the last assessment. The Company runs a scheme called Tata Rallis
Agri Input Training Scheme (TRAITS) for providing training to rural youths in agri marketing to make them employable in
agri inputs industry in rural India.
CAD (Competency Assessment and Development), which is a continuous process to build functional competencies, has
been taken to a higher level, involving more departments and roles as per plan. Several skill development programmes
such as RISE (Rise Initiative for Skill Enrichment), Gyanpeeth (Train the Trainer), Mentoring and Arjun were also undertaken.
The Ankleshwar Unit of the Company has 67 non-management employees. The overall relations with these employees
at Ankleshwar continued to be cordial and harmonious during the year 2016-17. As on 31st March, 2017, the employee
strength of the Company was 952, as compared to 957 as on 31st March, 2016 (excluding trainees).
BUSINESS EXCELLENCE
The year 2016-17 witnessed several key events and initiatives at Rallis. After winning the prestigious JRD QV Award in
2011, your Company has continued the journey of excellence in the Tata Business Excellence Model (TBEM) and worked for
strengthening its operational excellence. During the year, the Company participated in National Excellence competition
organized by CII and won in the regional round in the manufacturing sector.
Being a gap year for TBEM assessment, your Company strengthened its excellence journey through intensive internal
assessment ROCK (Ralliites on Continuous Karma) covering all locations and functions. Within the Company, a group of
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excellence assessors have been developed, who are able to assess the Company across functions and locations. Feedback
on improvement is shared across Departments and high scoring functions and locations recognized.
As a part of its excellence journey, the Company has an online digital platform for employees to register their innovative
thoughts. The Company also participated in the Tata Group Innovation Forum, Tata Innovista with 53 entries this year.
Learning and sharing of knowledge is leveraged through Knowledge Management on the Company’s intranet. To strengthen
manufacturing, DWM (Daily Work management), a visual management concept based on Statistical Quality Control (SQC)
is implemented in all areas of importance and significant results are achieved in terms of process control. More than 80% of
people in factories are trained on DWM principles.
The Company will continue to progress in its journey of excellence through some focus areas such as customer centricity,
sustainability and operational excellence.
INFORMATION TECHNOLOGY
Information Technology continues to be integral to the Company’s processes, improvement and transformational
initiatives. Your Company continues to explore and implement new emerging technologies on predictive analytics, farmer
advisory and industrial automations to leverage ICT for enabling Agri Solutions business. During the year, the Company has
strengthened its core ERP and BW systems with upgrades and enhancements, implemented geo-special analytics system,
embarked on a journey on mobility initiatives, thereby helping the Company align business segments and simplify business
processes. Investments also continue to be made in IT infrastructure to support the various business applications.
The Company is working on a well-defined IT Strategy and roadmap to leverage ICT for enhancing customer reach and
operational efficiency. ICT is one of the key pillars of the Company’s growth strategy. Its key business enablement initiatives
are gaining grounds and will continue to support its growth strategy in the years to come.
Sustainable way of doing business is deeply entrenched in the Company’s business strategy. This is achieved through
alignment of long term sustainability plans with business strategy. Long term sustainability plans of the Company include:
o No Red Triangle product in the portfolio and shifting from Yellow to safer Blue and Green Triangle products.
o All Units to achieve total recycling of treated water by 2017-18 and be water neutral by 2016-17.
o 10% reduction in specific energy consumption by 2020-21, from base year 2013-14. 50% energy to come from
renewable sources by 2020-21.
o At least two water based formulation products every year.
o Impacting more than 1 lakh people through our CSR projects by year 2020-21, out of which 25% will be from
communities requiring affirmative action.
Integrated Approach:
The integrated Sustainability Model adopted by the Company focuses on Social and Environment issues. Social issues are
covered under Corporate Social Responsibility (CSR) and Affirmative Action (AA) initiatives. Key focus areas under CSR and
AA are Natural Resource Management, Education and Tribal Model Village development. CSR and AA initiatives are planned,
implemented and monitored by the Company’s CSR team at the corporate level and Sustainability Champions across
locations drive the implementation at their respective locations. The CSR Committee monitors and reviews the progress
of CSR projects at regular intervals, including through site visits at the project locations. Highlights of the Company’s CSR
programmes are given below:
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The Company focuses on water management to address the severe water crisis issue facing the country. Its flagship
programme under water management is named “Jal Dhan”.
Jal Dhan was started four years ago in Lote (Konkan region in Maharashtra), which inspite of being blessed with heavy
rainfall during monsoons, experiences water scarcity during summer due to inadequate conservation measures. Based
on assessment and survey, rain water harvesting project was designed and implemented. The impact was encouraging,
which led to the Company scaling-up the project in 8 villages of drought prone areas of Latur and Beed in Maharashtra. The
impact was overwhelming in the first year itself. Rain water harvested through the Jal Dhan project has lasted for the entire
year, making the villages tanker free from July and receiving water once in 7 days, instead of once in 45 days earlier. Ground
water levels have also increased due to the project. Availability of water for domestic and agriculture use has also enabled
farmers to opt for a second crop.
Increase in water availability has also encouraged one village to convert stored water into hydro power with support from
the Company, enabling it to install street lights for the first time in the village.
In Latur, the project is being converted into an integrated project, covering water, education and support in establishing
linkage for small and marginal farmers with the State and Central Government projects and schemes. Rallis has also initiated
Jal Dhan in Akola in Vidarbha region, which also faces water crisis every year.
In the current year, the Company has been able to harvest 0.521 MCM water, covering 20 villages and more than 64,000
beneficiaries, of which over 22,000 are from the AA community. Going forward, the Company plans to cover 50 more villages
in Marathwada region in the coming years.
Along with rain water harvesting, the Company has also initiated soil conservation projects, with 5,724 new saplings being
planted in the current year and maintaining 39,007 trees with 90% survival rate. Mix forest species and horticulture plants
are planted, to increase bio diversity and villagers and tribals are encouraged to take care of the planted species.
Your Company’s CSR intervention for educational programmes, branded as RUBY (Rallis Ujjwal Bhavishya Yojana), is aimed
at encouraging children to opt for formal education through various educational programmes. For holistic development
of students, the programme focuses on improving quality of education, teachers’ training, support for infrastructure
development in schools and providing educational aids to needy students.
Science, English and Information Technology have been emphasized, to improve the academic performance of students.
The Company supports conversion of Government schools into “Digital schools” by providing Smart boards and e-learning
materials. Rallis has started science sessions for 5th to 8th standard students and has revived the science stream at Dahej
village in Gujarat, as also provided one science teacher for the school in Lote in Maharashtra.
Under infrastructure support, the Company analyzes needs and provides science laboratory, classroom construction, roof
water harvesting structures, toilet blocks, drinking water facilities, etc.
In the current year, Rallis has worked with 28 schools across Maharashtra and Gujarat, benefiting 8,731 students of which
4,193 belong to the Affirmative action group.
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Tribal Model School intervention:
Under RUBY, the Company has identified a tribal school near Dahej in Gujarat, and since 2015-16, is working on converting
it into a Model Tribal school. In the current year, the school was supported academically by initiating various educational
interventions from Fun with Learn concept, teachers’ training and experts’ interactions. Rallis has also supported its
infrastructure enhancement by providing smokeless chulla, water filter, developing kitchen garden, constructing new
classroom, etc. Going forward, the Company is planning to identify two new schools and convert them into Model schools.
As a Tata Group Company, Rallis works for the betterment of Affirmative Action community, especially tribals. Since 2015-
16, the Company has started working for converting a tribal village into a Model Village. In the current year, we are working
with five tribal villages near Mumbai.
Model village concept focuses on basic amenities, Government entitlements, health, education, capacity building
and economic empowerment for tribals. Based on need assessment report, various interventions were planned and
implemented. Rallis is associated with TISS (Tata Institute of Social Sciences) and All India Institute of Local Self Governance
to sustain the project in the long run.
The Model village project started with basic amenities like water and is now focusing on enhancing livelihood opportunities
for the tribal population. For empowering women, various skills were imparted, including tailoring, beautician course,
cloth bag making and toran making by inviting experts to train the women. During the current year, 220 women from
Maharashtra have been trained. Many of them have initiated home based businesses and have started earning.
Going forward, these projects will be further intensified in terms of impact and area of operation across Maharashtra and
Gujarat.
Cautionary Statement
Statements in the Management Discussion and Analysis describing the Company’s and its direct and indirect subsidiaries'
objectives, projections, estimates and expectations may be “forward looking statements” within the meaning of applicable
laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make
a difference to the Company’s operations include among others, climatic conditions, economic conditions affecting demand/
supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government
regulations, tax laws and other statutes and other incidental factors.
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INTRODUCTION
Rallis believes that sustainable business is founded on good Corporate Governance (business principles), with triple bottom
line i.e. economic, environmental and social performance creating value for all stakeholders, driven by robust business
processes and continued growth. The Company focuses on efficient deployment of resources, including people, processes
and materials, for the production of safe and eco-efficient products, with a view to creating value for all its stakeholders. This
ensures that we embed balance in our engagement with all stakeholders, keeping the community at the core of whatever
we do.
8. Three key products/ services that the Company manufactures/ provides (as in balance sheet):
(i) The Company principally manufactures “agri inputs”, comprising crop protection products, plant growth
nutrients, organic compost and seeds and provides agri-solutions.
(ii) It also manufactures polymers, which is about 2% of the turnover.
(b) Number of national locations: The Company’s manufacturing operations are situated at four locations, viz.
Ankleshwar and Dahej in Gujarat and at Lote and Akola in Maharashtra.
10. Markets served by the Company: The markets for the Company’s products are across India. Globally, it serves
markets in Asia, Latin America and Africa, with some sales in Europe.
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5. List of activities in which expenditure in 4 above has been incurred:
(a) Water Harvesting (Jal Dhan)
(b) Model Village development (Rural development)
(c) Education (RUBY)
(d) Livelihood
(e) Environment (Greening)
(f ) Skill development (TARA)
Tata Group Affirmative Action (AA) Policy: Rallis works towards inclusion of socially disadvantaged and marginalized
sections of society (Scheduled Castes and Scheduled Tribes). The AA interventions focus on Education, Employment,
Employability, Entrepreneurship and Essential Amenities.
SECTION D: BR INFORMATION
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The National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business released by the
Ministry of Corporate Affairs has adopted nine areas of Business Responsibility. These are as follows:
P1 Businesses should conduct and govern themselves with Ethics, Transparency and Accountability.
P2 Businesses should provide goods and services that are safe and contribute to sustainability throughout their
life cycle.
P4 Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are
disadvantaged, vulnerable and marginalized.
P6 Businesses should respect, protect and make efforts to restore the environment.
P7 Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner.
P9 Businesses should engage with and provide value to their customers and consumers in a responsible manner.
No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1 Do you have a policy/ policies for: Y Y Y Y Y Y Y Y Y
2 Has the policy been formulated Y Y Y Y Y Y Y Y Y
in consultation with the relevant
stakeholders?
3 Does the policy conform to any national/ Y Y Y Y Y Y Y Y Y
international standards? If yes, specify?
The spirit and intent of the Tata Code of Conduct (TCoC) and all
(50 words)
applicable national laws are captured in the policies articulated
by Rallis. In addition, they reflect the purpose and intent of the
United Nations Global Compact, international standards such as
Responsible Care Logo, ISO 14001 and OHSAS 18001.
4 Has the policy been approved by the Yes,
Board? If yes, has it been signed by MD/ Signed by MD & CEO
owner/ CEO/ appropriate Board Director?
5 Does the Company have a specified Yes
Committee of the Board/ Director/ Official
to oversee the implementation of the
policy?
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6 Indicate the link for the policy to be The Tata Code of Conduct is available at:
viewed online? http://www.rallis.co.in/TCoC.htm
Rallis Environment Health & Safety Policy is available at:
http://www.rallis.co.in/EHS_Policy.htm
Rallis Quality Policy is available at:
http://www.rallis.co.in/QualityPolicy.htm
Rallis CSR Policy is available at:
http://www.rallis.co.in/CSR_Policy.htm
Rallis Whistle Blower Policy is available at:
http://www.rallis.co.in/WhistleblowerPolicy.htm
7 Has the policy been formally The policies have been communicated to all internal stakeholders.
communicated to all relevant internal and Tata Code of Conduct and other policies are communicated to
external stakeholders? suppliers, vendors, dealers and channel partners based on their
relevance to these external stakeholders.
8 Does the Company have in-house The Company has established in-house structures to implement
structure to implement the policy/ these policies.
policies?
9 Does the Company have a grievance The Whistle Blower Policy provides a mechanism to employees
redressal mechanism related to the to report any concerns or grievances pertaining to any potential
policy/ policies to address stakeholders’ or actual violation of Tata Code of Conduct, which covers all
grievances related to the policy/ policies? aspects of BR. An Investor grievance mechanism is in place
to respond to investor grievances. The Customer Complaints
mechanism records the grievances of customers on product and
service quality and other issues of interest to them. The supplier,
vendor, dealer and channel partner forums and ongoing
communication captures their concerns and grievances. The
continual community engagement, needs assessments, impact
assessments serve as means for communities to represent their
concerns and grievances.
10 Has the Company carried out independent The implementation of the Tata Code of Conduct and other
audit/ evaluation of the working of this policies are reviewed through Internal Audit function/ Ethics
policy by an internal or external agency? Counsellor. External assessment of Tata Business Excellence
Model (TBEM) covers the review of implementation of all
Company policies. The Quality, Safety & Health and Environmental
policies are subject to internal and external audits as part of
different certification processes, including ISO-9001, ISO-14001
and OHSAS-18001. In addition to this, there are audits from
statutory authorities, customers and experts from TATA Group.
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No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1 The Company has not understood the
Principles.
2 The Company is not at a stage where it finds
itself in a position to formulate and implement
the policies on specified principles.
3 The Company does not have financial or Not Applicable
manpower resources available for the task.
4 It is planned to be done within next 6 months.
5 It is planned to be done within the next 1 year.
6 Any other reason (please specify).
Principle 1 - Businesses should conduct and govern themselves with Ethics, Transparency and Accountability.
1. Does the policy relating to ethics, bribery and corruption cover only the Company? Yes/ No. Does it extend to the
Group/ Joint Ventures/ Suppliers/ Contractors/ NGOs/ Others? -
Yes, the Policy covers not only the Company but also its Associates. The Tata Code of Conduct (TCoC) (available on
http://www.rallis.co.in/TCoC.htm) serves as the ethical roadmap for all Tata companies. All suppliers, partners and joint
ventures are expected to adopt TCoC or a joint code of conduct incorporating all elements of the TCoC. TCoC is imbibed
in all aspects of the business and its dealing with various stakeholders. Training and awareness on TCoC is provided to
all employees and other stakeholders are also made aware of the same from time to time.
2. How many stakeholder complaints have been received in the past financial year and what percentage was
satisfactorily resolved? If so, provide details thereof, in about 50 words or so.
A total of 5 stakeholder complaints were received in the Financial Year 2016-17. All of them have been satisfactorily
resolved during the year.
Stakeholder wise Concerns received during FY 2016-17
Anonymous 2
Contract Employee 1
Employee 0
Non-Employee 2
Vendor NIL
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Concern Analysis
Status 2015-16 - We received and addressed In 2016-17 - We received and addressed
all 6 concerns. No TCoC violation was all 5 concerns. No TCoC violation was
detected. detected.
Open NIL NIL
Principle 2 - Businesses should provide goods and services that are safe and contribute to sustainability
throughout their life cycle.
1. List up to 3 of your products or services whose design has incorporated social or environmental concerns, risks and/
or opportunities.
Neonix: Neonix a novel seed treatment product, is an eco-friendly formulation with low particle size and better
spreading quality, resulting in uniform coverage and complete transfer of formulation on the seed surface. It is a blue
triangle product, providing better crop health and higher yield, does not contaminate the environment and has no
adverse effect to beneficial insects like predators, parasitoids and honey bees.
Epic: Epic, a fungicide, is an eco-friendly formulation as it is free from solvents, recommended at very low dose, low
particle size, quickly absorbed by plant system, with hardly any quantity going to the environment. It offers better crop
health and higher yield.
GeoGreen: Scientifically enriched eco-friendly organic soil conditioner, GeoGreen gives improved yield, sustains soil
health, improves soil productivity and results in higher yield. It is approved by National Organic Certification Agency
(NOCA) and is considered to be the best tool for Organic farming.
Customer centric initiatives - Rallis Samrudh Krishi® (RSK) and Package of practices (PoPs):
Rallis Samrudh Krishi®: RSK is the Agri Solutions platform engaged by your Company working with farmers to create
value through advisory intervention with knowledge intensive, service oriented initiatives to increase farm productivity.
RSK provides services such as weather and pest forecasting, weekly visit by advisory expert, query call answers, soil and
water testing, crop seminar and field days to the farmers.
PoPs: The Company also demonstrates cultivation practices in the form of PoPs across the country, as one-stop solution
for farmers to get maximum yield with reduced cost of cultivation.
2. For each such product, provide the following details in respect of resource use (energy, water, raw material etc.) per
unit of product (optional):
(a) Reduction during sourcing/ production/ distribution achieved since the previous year throughout the value
chain?
The Company has taken up energy conservation programmes involving our own team and experts from outside.
After successful implementation of recommendations, every manufacturing Unit has registered savings in terms of
KWh and utility specific consumptions.
(b) Reduction during usage by consumers (energy, water) has been achieved since the previous year?
One initiative of the Company, “SRI” (System for Rice Intensification) started under CSR at Songaon, Lote (Chiplun),
Aghai (Thane District) and Kelcha Mal (Raigad) and as business initiative to educate farmers in Kolkata Zone has not
only improved the productivity of rice, but it has saved almost 50% water in rice production.
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As a Responsible Care Company, sourcing is covered under distribution code which addresses efforts towards sustainable
sourcing. The Company has initiated many efforts in reducing the carbon footprint in sourcing and supply chain. Few
examples are:
Developing local suppliers instead of importing raw materials. During the year, import substitute suppliers have
been developed for products such as MAHCL, 4NOX, MNS 90, etc.
Our products are exported in bulk packing rather than small bags or drums, thus increasing volume per trip, resulting
in carbon reduction.
We have collaborated with packaging suppliers and encouraged some of them to have warehouse near our and
other customers’ premises. This will help them in combining their customers’ requirements rather than catering to
every customer’s small requirements individually. We have jointly developed some packaging suppliers near our job
workers’ factory to reduce lead time and ultimately carbon footprint.
We are also planning to have a few dedicated nominated suppliers who will consolidate our requirements and
supply our total requirements for particular SKUs.
4. Has the Company taken any steps to procure goods and services from local and small producers, including
communities surrounding their place of work? If yes, what steps have been taken to improve their capacity and
capability of local and small vendors?
Yes, the Company has a vendor development programme, which encourages local contractors and service providers
and offers them opportunities. Additionally, the Company has also promoted skills and livelihood development in the
neighboring community through various training and community development programmes. Under TATA Affirmative
Action programme, the Company provides support to people from socially backward community background, including
from the SC/ ST communities.
5. Does the Company have a mechanism to recycle products and waste? If yes, what is the percentage of recycling
of products and waste (separately as <5%, 5-10%, >10%). Also, provide details thereof, in about 50 words or so.
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Principle 3 - Businesses should promote the well-being of all employees.
1. Please indicate the total number of employees: 952, as on March 31, 2017.
2. Please indicate the total number of employees hired on temporary/ contractual/ casual basis: 890, as on
March 31, 2017.
3. Please indicate the number of permanent women employees: 39, as on March 31, 2017.
4. Please indicate the number of permanent employees with disabilities: None, as on March 31, 2017.
5. Do you have an employee association that is recognized by management: Yes, Rasayanki Kamdar Sangh,
Ankleshwar.
6. What percentage of your permanent employees are members of this recognized employee association: 7.04%, as on
March 31, 2017.
7. Please indicate the number of complaints relating to child labour, forced labour, involuntary labour, sexual
harassment in the last financial year and pending, as on the end of the financial year:
(i) Child labour/ forced labour/ involuntary labour: No complaints, as on March 31, 2017.
8. What percentage of your under mentioned employees were given safety and skill up-gradation training in the
last year?
100% employees were covered for various safety trainings, as on March 31, 2017.
Principle 4 - Businesses should respect the interests of, and be responsive towards all stakeholders, especially
those who are disadvantaged, vulnerable and marginalized.
Yes. The Company has mapped its stakeholders as part of its stakeholder engagement process.
2. Out of the above, has the Company identified the disadvantaged, vulnerable and marginalized stakeholders?
Yes.
3. Are there any special initiatives taken by the Company to engage with the disadvantaged, vulnerable and
marginalized stakeholders? If so, provide details thereof, in about 50 words or so.
While developing our CSR strategy, we have ensured that all communities benefit from our CSR activities, with special
focus on groups that are socially and economically marginalized, including rural unemployed youth, women, scheduled
castes and tribes. We focus on Affirmative Action (AA) initiatives, with 25% of total CSR budget allocated to AA action, with
emphasis on Employability through Skill development and Education. Based on need assessment in the AA community,
it was felt that basic needs like potable water, water for irrigation, electricity, sanitation, etc. need immediate attention.
Hence this year onwards, we will focus on Essential amenities, in addition to Employability and Education.
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1. Does the policy of the Company on human rights cover only the Company or extend to the Group/ Joint Ventures/
Suppliers/ Contractors/ NGOs/ Others?
The Company follows the principles of the International Declaration of Human Rights. Its policies support, respect and
protect the human rights of its direct as well as indirect employees. The TCoC, adopted by Rallis, which covers our
Associates as well, addresses these aspects. All suppliers, partners and joint ventures are expected to adhere to these
principles covered under the TCoC.
2. How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily
resolved by the management?
Principle 6 - Business should respect, protect and make efforts to restore the environment.
1. Does the policy related to Principle 6 cover only the Company or extends to the Group/ Joint Ventures/ Suppliers/
Contractors/ NGOs/ others.
The Company’s EHS Policy focuses on preventing/ minimizing adverse environmental impacts, so far as is reasonably
practicable, through continual improvements in environment management systems, processes, practices and effective
environment management and mitigation strategies, responding sensitively to the environmental concerns of the
communities and taking necessary measures for implementing product stewardship practices. While the EHS Policy
is applicable to the Company and its employees, the Company is committed to enhance awareness on Environment
sustainability, focusing on the 3 Rs, i.e. Reduce, Reuse and Recycle amongst its employees, associates and supply chain
partners through effective engagement, communication, consultation and training.
2. Does the Company have strategies/ initiatives to address global environmental issues such as climate change, global
warming, etc.? Y/N. If yes, please give hyperlink for webpage, etc.
Yes. The Company has adopted Tata Group’s Climate Change Policy to guide Organizational efforts towards mitigating
and adapting to climate change. The Company is aligning itself with India’s commitment to combating Climate Change,
i.e. Intended Nationally Determined Contributions (INDC) and Tata Group climate change initiatives. In this direction,
the Company has a long term plan to achieve following:
o At least 50% thermal energy from bio mass in each Unit by year 2020.
3. Does the Company identify and assess potential environmental risks? Y/N
The Company makes all efforts to identify environment aspects and manage its environmental impact and continually
improve its environmental performance, driven by its Environment Health & Safety Policy. All our manufacturing plants
are certified to ISO 14001 Environmental Management Systems (EMS) standard. Two of our manufacturing Units at
Gujarat (Ankleshwar and Dahej) are certified for ISO-50001. As part of EMS implementation, potential environmental
risks are identified and appropriate mitigation strategies to reduce the risks are in place.
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4. Does the Company have any project related to Clean Development Mechanism? If so, provide details thereof, in
about 50 words or so. Also, if yes, whether any environmental compliance report is filed?
The Company has not registered any projects under Clean Development Mechanism.
5. Has the Company undertaken any other initiatives on - clean technology, energy efficiency, renewable energy, etc.?
Y/N. If yes, please give hyperlink for web page, etc.
Yes, under its long term Sustainability plans, the Company has initiated a number of green initiatives, including setting
up solar power generation, moving to biomass fueled boilers, etc. For more information, visit http://www.rallis.co.in/
Greening.htm
6. Are the emissions/ waste generated by the Company within the permissible limits given by CPCB/ SPCB for the
financial year being reported?
Yes. All manufacturing plants comply with the prescribed permissible limits for air emissions, effluent quality and
discharge, solid and hazardous waste generation and disposal as per their Regulatory Consents/ Authorizations.
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Principle 7 - Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible
manner.
1. Is your Company a member of any trade and chamber or association? If Yes, name only those major ones that your
business deals with.
Yes. Rallis is part of:
i. CropLife India
ii. Crop Care Federation of India
iii. Pesticides Manufacturers & Formulators Association of India
iv. Confederation of Indian Industry (CII)
v. Federation of Indian Chambers of Commerce & Industry (FICCI)
vi. Indian Chemical Council (ICC)
vii. Bombay Chambers of Commerce and Industry (BCCI)
2. Have you advocated/ lobbied through above associations for the advancement or improvement of public good?
Yes/No. If yes specify the broad areas.
Yes, we do from time to time take up issues through the Associations on matters of public interest.
1. Does the Company have specified programmes/ initiatives/ projects in pursuit of the policy related to Principle
8? If yes, details thereof.
As per the Company’s Sustainability Model, we have taken Employability embedded with Education as the major focus
area. Under Employability, the Company has two programmes, namely TATA Rallis Agri Input Training Scheme (TRAITS)
and Fixed Term Trainees (FTT) to have a visible impact on society. This intervention nurtures and equips youth and gives
them an opportunity in the Company and elsewhere, with skill sets that are in demand across Organizations.
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Under CSR initiatives, various educational activities have been taken up across locations, focusing on holistic development
of students and providing educational aids to deprived students. The Company is also engaged in developing a tribal
school at Dahej into a Model School.
During 2016-17, we have covered 28 schools under our Education projects, benefiting over 8,731 students, of which
4,193 were from among background deserving Affirmative Action.
2. Are the programmes/ projects undertaken through in-house team/ own foundation/ external NGO/ government
structures/ any other organization?
Rallis is committed to improve quality of lives of people in the community it serves through long term stakeholder value
creation, with special focus on empowerment of communities in rural India. CSR activities at Rallis are implemented by
the in-house CSR team, through Participatory Approach involving beneficiaries, involving NGOs, experts or through Tata
Group Focus Initiatives. Volunteering by the employees is focused on and this is engrained into the team at Rallis.
Yes, the Company has done impact assessment for the following projects, involving Delhi based NGO Development
Professionals’ Group (DPG):
4. What is your Company’s direct contribution to community development projects - Amount in INR and the details of
the projects undertaken?
The Company has spent ` 3.95 crores, which is 2.02% of the average net profit of the Company for the last three financial
years. Our key CSR projects are focused on the following:
Tata Group Affirmative Action (AA) Policy: Rallis works towards inclusion of socially disadvantaged and marginalized
sections of society (Scheduled Castes and Scheduled Tribes). The AA interventions focus on Education, Employment,
Employability, Entrepreneurship and Essential Amenities
Under Natural Resource Management projects, the main thrust is to combat the impact of climate change in rain-
fed areas, through activities relating to rainwater harvesting, soil conservation, land shaping, pasture development,
vegetative bunding and water resources conservation on the basis of the entire compact micro-watershed, which
would include both cultivated and uncultivated lands. This intervention was started in Lote (Konkan Region of
Maharashtra), where the Company’s manufacturing Unit is located. An Integrated Watershed Project was designed,
focusing on harvesting rain water to make villagers water sufficient, motivate small farmers to opt for second
crop from available water and focusing on overall development of villagers. Water conservation work focuses on
desilting, deepening and repairing existing structures and creating new structures like check dams. This year, impact
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Under the Jal Dhan project across Maharashtra, 64,978 people from 20 villages were benefited, out of which 22,639
belong to Affirmative community. The positive impact has been seen by way of increase in ground water levels, water
availability throughout the year, sparing time and efforts of women spent in fetching water, enabling farmers to go for
second and third crops, thus increasing incomes and improving livelihoods.
Along with water conservation, the Company has also focused on afforestation, to increase ground water level and soil
conservation. In the last 5 years, Rallis has planted 39,007 trees with 90% survival rate.
For empowering women, various skills training were imparted like beautician, tailoring, cloth bag making, etc. by
inviting experts. To support the women and encourage them to initiate home based business, support like providing
raw materials, exposure visits, business planning skills were provided by the Company. Under TARA project, 220 women
from Maharashtra were covered, out of which 83 belong to the AA community.
Under Model tribal village initiative, in 2016-17, Rallis has added 4 new Tribal villages/ wadi. The Company is now working
in 5 villages to convert them into model villages. Tribal model village concept focuses on basic amenities, capacity
building, education, economic empowerment, health and entitlements. Similarly, in Gujarat near our Dahej factory, an
Ashram school at Atali has been identified to develop as a Model school, by improving the school infrastructure, along
with educational interventions.
Going forward, these projects will be further intensified by covering additional areas in Maharashtra, Gujarat and other
States.
5. Have you taken steps to ensure that the community successfully adopts this community development initiative?
Please explain in 50 words, or so.
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Principle 9 - Businesses should engage with and provide value to their customers and consumers in a responsible
manner.
1. What percentage of customer complaints/ consumer cases are pending as on the end of financial year.
Product and packaging related customer complaints are listed below. All complaints are resolved and addressed, none
are pending for resolution.
External 55 7 62 100
Internal 6 - 6 100
Total 61 7 68 100
2. Does the Company display product information on the product label, over and above what is mandated as per local
laws? Yes/No/N.A./Remarks (additional information).
We display what is required as per regulatory requirements. We comply with Insecticides Act, 1968; Insecticide Rules,
1971, Fertiliser (Control) Order 1985; Seeds Act, 1966; Seeds Rules, 1968; Legal Metrology Act, 2009 and Legal Metrology
(Packaged Commodities) Rules, 2011 on respective product labels.
3. Is there any case filed by any stakeholder against the Company regarding unfair trade practices, irresponsible
advertising and/ or anti-competitive behavior during the last five years and pending as on end of financial year? If
so, provide details thereof, in about 50 words or so.
In the last five years, no case has been filed against the Company, and there is no pending case as on end of the financial
year, regarding unfair trade practices, irresponsible advertising and/ or anti-competitive behavior.
4. Did your Company carry out any consumer survey/ consumer satisfaction trends?
The Company carries out Farmer and Channel partners’ satisfaction survey once in every two years. Last survey was
done in 2016-17.
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2. BOARD OF DIRECTORS
Composition
The Board of Directors, along with its Committees, provides leadership and guidance to the management and directs and
supervises the performance of the Company, thereby enhancing stakeholder value. The Board has a fiduciary relationship
in ensuring that the rights of all stakeholders are protected. Your Company has an engaged and well informed Board with
qualifications and experience in diverse areas. The Board composition is in conformity with the Listing Regulations and
the Companies Act, 2013 (‘the Act’).
The Board of Directors, as on 31st March, 2017, comprised 9 Directors, of which 8 were Non-Executive Directors and one
Managing Director. The Company has a Non-Executive Chairman and the 5 Independent Directors (including two women
Directors) comprise more than one-half of the total number of Directors. All Directors possess relevant qualifications and
experience in general corporate management, finance, banking and other allied fields which enable them to effectively
contribute to the Company in their capacity as Directors. None of the Directors are related to each other.
None of the Directors on the Board is a Member of more than 10 Committees and Chairperson of more than 5
Committees (Committees being Audit Committee and Stakeholders Relationship Committee, as per Regulation 26(1)
of the Listing Regulations), across all the Companies in which he/ she is a Director. The necessary disclosures regarding
committee positions have been made by all the Directors.
None of the Directors hold office in more than 20 Companies and in more than 10 public Companies. None
of the Independent Directors serve as an Independent Director in more than seven listed Companies. All
Directors are also in compliance of the limit on Independent Directorships of listed Companies as prescribed in
Regulation 25(1) of the Listing Regulations. The Managing Director does not serve as Independent Director in
any listed Company.
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Category and Attendance of Directors
The names and categories of Directors, their attendance at the Board Meetings held during the year and at the
last Annual General Meeting, as also the number of Directorships and Committee positions held by them in public
limited Companies are given below:
Director Category No. of Board Attendance No. of Directorships* No. of committee positions
Meetings at AGM held (As on 31.03.2017) in Mandatory Committees*
attended on 24th (As on 31.03.2017)
during June, 2016 Chairman Member Total Chairman Member Total
2016-17
Mr. Bhaskar Bhat Non-Independent 7 Yes 4 5 9 - 3 3
(Chairman) Non-Executive
DIN - 00148778
Mr. B. D. Banerjee Independent 4 Yes - 2 2 - 2 2
(upto 31.10.2016) Non-Executive
DIN - 00064354
Mr. E. A. Kshirsagar Independent 3 Yes - 6 6 5 1 6
(upto 30.09.2016) Non-Executive
DIN - 00121824
Mr. Prakash R. Rastogi Independent 7 Yes - 2 2 - 1 1
DIN - 00110862 Non-Executive
Mr. Bharat Vasani Non-Independent 7 Yes - 3 3 - - -
DIN - 00040243 Non-Executive
Mr. R. Mukundan Non-Independent 7 Yes - 4 4 - 1 1
DIN - 00778253 Non-Executive
Dr. Y. S. P Thorat Independent 7 Yes - 4 4 1 3 4
DIN - 02652734 Non-Executive
Dr. (Mrs.) Punita Independent 7 Yes - 10 10 2 4 6
Kumar-Sinha Non-Executive
DIN - 05229262
Dr. C.V. Natraj Independent 5 NA - 3 3 - 2 2
(w.e.f. 22.07.2016) Non-Executive
DIN - 07132764
Mrs. Padmini Khare Independent 5 NA - 5 5 5 - 5
Kaicker Non-Executive
(w.e.f. 22.07.2016)
DIN - 00296388
Mr. V. Shankar Non-Independent 7 Yes 3 1 4 - 1 1
(Managing Director Executive
& CEO)
DIN - 01385240
* Excludes Directorships in Associations, Private Limited Companies, Foreign Companies, Government Bodies and Companies registered under Section 8 of the Act.
Only Audit Committee and Stakeholders Relationship Committee of Indian Public Companies have been considered for committee positions.
The Company held 7 Board Meetings during 2016-17 and the gap between two meetings did not exceed 120 days. The
dates on which the Board Meetings were held were: 26th April, 2016; 24th June, 2016; 22nd July, 2016; 24th October,
2016; 17th November, 2016; 20th January, 2017 and 17th March, 2017.
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Dr. C. V. Natraj holds 4,831 (0.002%) Equity Shares of the Company. No other Director holds any shares in the Company.
Board Procedure
The annual calendar of Board Meetings is agreed upon at the beginning of the year. The agenda is circulated well in
advance to the Board members, along with comprehensive background information on the items in the agenda to
enable the Board to arrive at appropriate decisions. The agenda and related information is circulated in electronic form
through a highly secure web based application, which is accessible through IPads. This has reduced paper consumption,
thereby enhancing the sustainability efforts of the Company.
At Board Meetings, the Managing Director & CEO apprises the Board on the overall performance of the Company. The
Board also, inter alia, reviews the strategy, annual business plan and capital expenditure budgets, quarterly, half-yearly
and annual financial results, compliance reports on all laws applicable to the Company, EHS (Environment, Health and
Safety) performance of the Company, people, process matters, minutes of Board Meetings of subsidiaries and minutes of
meetings of Committees of the Board. In addition, the Board is kept informed of all major events, including information
listed under Part A of Schedule II to the Listing Regulations.
Code of Conduct
The Company has adopted the Tata Code of Conduct for all employees of the Company, including the Managing Director.
The Board has also approved a Code of Conduct for the Non-Executive Directors of the Company, which incorporates the
duties of Independent Directors as laid down in Schedule IV to the Act. Both the Codes are available on the Company’s
website.
All Board members and senior management personnel (as per Regulation 26(3) of the Listing Regulations) have affirmed
compliance with the applicable Code of Conduct. A declaration to this effect, signed by the Managing Director & CEO
forms part of this Report.
Apart from receiving remuneration that they are entitled to under the Act as Non-Executive Directors and reimbursement
of expenses incurred in the discharge of their duties, none of the Non-Executive Directors has any other material pecuniary
relationship or transactions with the Company, its promoters, its Directors, its senior management or its subsidiaries and
associates.
Directors and senior management of the Company have made disclosures to the Board confirming that there are no
material financial and/ or commercial transactions between them and the Company that could have potential conflict of
interest with the Company at large.
Independent Directors
All Independent Directors of the Company have been appointed as per the provisions of the Act, Listing Regulations and
the Governance Guidelines for Board Effectiveness adopted by the Company. Formal letters of appointment have been
issued to Independent Directors. The terms and conditions of their appointment are disclosed on the Company’s website.
A separate meeting of Independent Directors of the Company, without the attendance of Non-Independent Directors and
members of management, was held on 26th April, 2016, as required under Schedule IV to the Act (Code for Independent
Directors) and Regulation 25(3) of the Listing Regulations. At the Meeting, the Independent Directors:
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Reviewed the performance of Non-Independent Directors and the Board as a whole;
Reviewed the performance of the Chairman of the Company, taking into account the views of the Managing Director
and Non-Executive Directors; and
Assessed the quality, quantity and timeliness of flow of information between the Company management and the
Board that is necessary for the Board to effectively and reasonably perform its duties.
All Independent Directors of the Company attended the Meeting of Independent Directors. Mr. B. D. Banerjee chaired
the Meeting.
The Company has an orientation programme upon induction of new Directors, as well as other initiatives to update
Directors on a continuous basis.
The Company facilitated the smooth induction of Dr. C. V. Natraj and Mrs. Padmini Khare Kaicker, who joined the
Company’s Board as Independent Directors in July 2016. The Managing Director & CEO introduced them to the senior
leadership of the Company and advised them on the Company, its operations, business, industry and environment in
which it functions and the regulatory environment applicable to it. An Induction Manual was handed over to them,
giving detailed information on the Board processes, Committee Charters, duties, functions and powers of the Board
and individual Directors, Performance Evaluation process for the Board, its Committees and Directors, Code of Conduct
applicable to the Directors, periodic declarations to be submitted by the Directors to the Company and other matters of
relevance. They were also issued Appointment Letters, giving terms and conditions of their appointment, as well as their
roles, duties and responsibilities.
The Company also has an ongoing familiarization programme for its Independent Directors, with the objective of
familiarizing them with the Company, its operations and business model, nature of the industry and environment in which
it operates, the regulatory environment applicable to it and also the roles, rights and responsibilities of Independent
Directors.
Details of familiarization programmes imparted to Independent Directors are available on the Company’s website at the
following weblink: http://www.rallis.co.in/DFPID.htm
During the year, the Board has carried out an annual evaluation of its own performance, performance of the Directors, as
well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee (NRC) has defined the evaluation criteria, procedure and time schedule
for the Performance Evaluation process for the Board, its Committees and Directors. The criteria for Board Evaluation
include inter alia, structure of the Board, including qualifications, experience and competency of Directors, diversity
in Board and process of appointment; Meetings of the Board, including regularity and frequency, agenda, discussion
and dissent, recording of minutes and dissemination of information; functions of the Board, including strategy and
performance evaluation, corporate culture and values, governance and compliance, evaluation of risks, grievance
redressal for investors, stakeholder value and responsibility, conflict of interest, review of Board evaluation and facilitating
Independent Directors to perform their role effectively; evaluation of management’s performance and feedback,
independence of management from the Board, access of Board and management to each other, succession plan and
professional development; degree of fulfillment of key responsibilities, establishment and delineation of responsibilities
to Committees, effectiveness of Board processes, information and functioning and quality of relationship between the
Board and management.
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Criteria for evaluation of the Committees of the Board include mandate and composition; effectiveness of the Committee;
structure of the Committee; regularity and frequency of meetings, agenda, discussion and dissent, recording of minutes
and dissemination of information; independence of the Committee from the Board; contribution to decisions of the
Board; effectiveness of meetings and quality of relationship of the Committee with the Board and management.
The procedure followed for the performance evaluation of the Board, Committees and Directors is detailed in the Board’s
Report.
3. AUDIT COMMITTEE
Terms of reference
The Audit Committee functions according to its Charter that defines its composition, authority, responsibilities and
reporting functions. The terms of reference of the Audit Committee, inter alia, are as follows:
Oversight of the Company’s financial reporting process and disclosure of its financial information to ensure that the
financial statements are correct, sufficient and credible.
Discuss and review with the management the annual/ half yearly/ quarterly financial statements and the auditor’s
report thereon, before submission to the Board for approval.
Review of the Company’s accounting policies, internal accounting and financial controls, risk management policies
and such other matters.
Discuss with the statutory auditors, before the audit commences, about the nature and scope of audit, as well as post-
audit discussion to ascertain any area of concern.
Hold timely discussions with the statutory auditors regarding critical accounting policies and practices and significant
financial reporting issues and judgments made.
Recommend to the Board the appointment, re-appointment and, if required, the replacement or removal of statutory
auditors, remuneration and terms of appointment of auditors, fixation of audit fees and to approve payment for any
other services rendered by the statutory auditors.
Review and monitor the auditor’s independence, qualification and performance and effectiveness of audit process.
Review with the management, performance of the statutory and internal auditors.
Review the adequacy of the internal audit function and the adequacy and efficacy of the internal control systems,
including the structure of the internal audit department, approval of the audit plan and its execution, staffing and
seniority of the official heading the department, reporting structure, budget, coverage and frequency of internal
audit.
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Scrutinize inter-corporate loans and investments.
Discuss any significant findings with internal auditors and follow-up thereon.
Review the findings of any internal investigations by the internal auditors into matters where there is suspected fraud
or irregularity or failure of internal control systems of a material nature and reporting the matter to the Board.
Look into the reasons for substantial defaults in payments to depositors, debenture holders, shareholders and
creditors.
Approve transactions, including any subsequent modifications, of the Company with related parties.
Valuation of undertakings or assets of the Company, wherever it is necessary.
Review and monitor the statement of use and application of funds raised through public offers and related matters.
Review the functioning of the Whistle Blower mechanism.
Review the effectiveness of the system for monitoring compliance with laws and regulations and oversee compliance
with legal and regulatory requirements, including the Tata Code of Conduct for the Company and its subsidiaries.
Provide guidance to the Compliance Officer for setting forth policies and implementation of the Code of Conduct for
Prevention of Insider Trading and the Code of Corporate Disclosure Practices.
Oversee financial reporting controls and process for subsidiary companies.
Approve the appointment of the Chief Financial Officer after assessing the qualifications, experience and background
of the candidate.
Generally, all items listed in Part C of Schedule II to the Listing Regulations and in Section 177 of the Act and any other
function as is mentioned in the terms of reference of the Audit Committee.
The Audit Committee has been given the powers prescribed under Regulation 18(2)(c) of the Listing Regulations.
The Audit Committee of the Company is constituted in accordance with the provisions of Regulation 18 of the Listing
Regulations and the provisions of Section 177 of the Act. All members of the Committee are financially literate, with
Mrs. Padmini Khare Kaicker, Chairperson of the Committee, having the relevant accounting and financial management
expertise.
The composition of the Audit Committee and the details of Meetings attended by the Directors during the year are given
below:
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During the year, the Audit Committee reviewed key audit findings covering operational, financial and compliance
areas, internal financial controls and financial reporting systems, functioning of the Whistle Blower mechanism and
implementation of the Code of Conduct for Prevention of Insider Trading and the Code of Corporate Disclosure
Practices. The Chairperson of the Committee briefs the Board about the significant discussions at Audit Committee
Meetings. The minutes of each Audit Committee Meeting are placed at the next meeting of the Board.
The meetings of the Audit Committee are usually attended by the Managing Director & CEO, the Chief Financial Officer,
the Head of Internal Audit, the Company Secretary and a representative of the Statutory Auditors. The Business and
Operation Heads are invited to the Meetings, when required. The Company Secretary acts as the secretary to the
Committee. Occasionally, the Audit Committee also meets without the presence of any Executives of the Company.
The then Chairman of the Audit Committee, Mr. E. A. Kshirsagar was present at the Annual General Meeting of the
Company held on 24th June, 2016.
The Company has adopted a Code of Conduct for Prevention of Insider Trading, under the SEBI (Prohibition of Insider
Trading) Regulations, 2015. The Code lays down guidelines for procedures to be followed and disclosures to be made
by insiders while trading in the securities of the Company. Mr. Ashish Mehta, Chief Financial Officer has been appointed
as the Compliance Officer for ensuring compliance with and for the effective implementation of the Regulations and
the Code across the Company. Details of dealing in the Company’s shares by Designated Persons are placed before the
Audit Committee on a quarterly basis.
The Company has also adopted a Code of Corporate Disclosure Practices, for ensuring timely and adequate disclosure
of Unpublished Price Sensitive Information by the Company, to enable the investor community to take informed
investment decisions with regard to the Company’s shares. Mr. Ashish Mehta, Chief Financial Officer, has been
designated as the Chief Investor Relations Officer to ensure timely, adequate, uniform and universal dissemination of
information and disclosure of Unpublished Price Sensitive Information.
Terms of reference
The terms of reference of the Nomination and Remuneration Committee (NRC) are as follows:
Recommend to the Board the setup and composition of the Board, including formulation of the criteria for
determining qualifications, positive attributes and independence of a Director.
Periodical review of composition of the Board with the objective of achieving an optimum balance of size, skills,
independence, knowledge, age, gender and experience.
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Support the Board in matters related to the setup, review and refresh of the Committees.
Recommend to the Board how the Company will vote on resolutions for appointment of Directors on the Boards
of its material subsidiaries.
Recommend to the Board, the appointment of Key Managerial Personnel (KMP) and executive team members.
Carry out the evaluation of every Director’s performance and support the Board and Independent Directors in
the evaluation of the performance of the Board, its Committees and individual Directors, including formulation of
criteria for evaluation of Independent Directors and the Board.
Oversee the performance review process for the KMP and executive team with the view that there is an appropriate
cascading of goals and targets across the Company.
Recommend the Remuneration Policy for the Directors, KMP, executive team and other employees.
On an annual basis, recommend to the Board the remuneration payable to Directors, KMP and executive team of
the Company.
Review matters related to remuneration and benefits payable upon retirement and severance to MD/ EDs, KMP
and executive team.
Review matters related to voluntary retirement and early separation schemes for the Company.
Recommend to the Board how the Company will vote on resolutions for remuneration of Directors on the Boards
of its material subsidiaries.
Assist the Board in fulfilling its corporate governance responsibilities relating to remuneration of the Board, KMP
and executive team members.
Review HR and People strategy and its alignment with the business strategy periodically, or when a change is made
to either.
Review the efficacy of HR practices, including those for leadership development, rewards and recognition, talent
management and succession planning.
Perform other activities related to the Charter as requested by the Board from time to time
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The NRC is constituted in accordance with the provisions of Regulation 19 of the Listing Regulations and the provisions
of Section 178(1) of the Act. The composition of the NRC and the details of Meetings attended by the Directors during
the year are given below:
The NRC met three times during the year, on 26th April, 2016; 26th August, 2016 and 20th January, 2017.
The then Chairman of the NRC, Mr. B. D. Banerjee was present at the Annual General Meeting of the Company held on
24th June, 2016.
Remuneration of Directors
The Company’s philosophy for remuneration of Directors, KMP and all other employees is based on the commitment
of fostering a culture of leadership with trust. The Company’s Remuneration Policy is aligned to this philosophy. The
principles governing the Company’s Remuneration Policy are given in the Board’s Report.
The Company pays remuneration by way of salary, benefits, perquisites and allowances (fixed component) and
commission (variable component) to its Managing Director & CEO. Annual increments are recommended by the
NRC within the salary scale approved by the Members and are effective 1st April each year. The NRC recommends
commission payable to the Managing Director & CEO out of the profits for the financial year, within the overall
ceilings stipulated in the Act. Specific amount payable as commission is based on the performance criteria laid
down by the Board, which broadly takes into account the profits earned by the Company for the year.
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The aggregate value of salary, perquisites and commission paid to Mr. V. Shankar, Managing Director & CEO, during the
year 2016-17 is ₹ 3,73,67,227/-, comprising:
Salary : ` 66,00,000/-
Commission of ₹ 250 lakhs is also payable to Mr. Shankar for the year 2016-17 and shall be paid after the annual Financial
Statements are adopted by the Members at the Annual General Meeting.
Non-Executive Directors:
The Company paid sitting fees of ₹ 20,000/- per meeting to the Non-Executive Directors for attending meetings of
the Board, Executive Committee of the Board, Audit Committee, NRC, Corporate Social Responsibility Committee and
Risk Management Committee and ₹ 10,000/- per meeting for attending the meetings of the Stakeholders Relationship
Committee and Property Committe. ₹ 20,000/- was also paid as sitting fees to the Independent Directors who attended
the Meeting of the Independent Directors.
In terms of the Members’ approval obtained at the Annual General Meeting of the Company held on 24th June,
2013, commission is paid to Non-Executive Directors at a rate not exceeding 1% per annum of the profits of the
Company, computed in accordance with the provisions of the Act. The distribution of commission among the Non-
Executive Directors is recommended by the NRC and approved by the Board. The commission is distributed on the
basis of their attendance and contribution at the Board and Committee Meetings as well as guidance provided to
senior management other than at meetings and is paid after the annual Financial Statements are adopted by the
Members at the Annual General Meeting. The Company also reimburses any expenses incurred by the Directors for
attending meetings.
The sitting fees paid during the financial year 2016-17 to the Non-Executive Directors for attending the Board and
Committee Meetings for the year 2016-17, the commission paid to them during 2016-17 for the year 2015-16 and the
commission payable for the year 2016-17, are as follows:
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The Governance Guidelines on Board Effectiveness adopted by the Company provides for the retirement age of Directors.
As per the Guidelines, Managing and Executive Directors retire at the age of 65 years, Non-Independent Non-Executive
Directors retire at the age of 70 years and the retirement age for Independent Directors is 75 years, subject to the tenure
specified under Section 149 of the Act.
The terms of reference of the Stakeholders Relationship Committee (SRC) are as follows:
Consider and resolve the grievances of security holders of the Company, including complaints related to transfer of
securities, non-receipt of annual report/ declared dividends/ notices/ balance sheet.
Oversee compliances in respect of dividend payments and transfer of unclaimed amounts to the Investor Education
and Protection Fund.
Oversee and review all matters related to the transfer of securities of the Company.
Ensure setting of proper controls and oversee performance of the Registrar and Share Transfer Agent.
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Composition and Attendance during the year
The SRC met twice during the year, on 22nd July, 2016 and 20th January, 2017.
The composition of the SRC and the details of the Meetings attended by the Directors during the year are given below:
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The Board has adopted the CSR Policy as formulated and recommended by the CSR Committee. The same is displayed
on the website of the Company. The Annual Report on CSR activities for the year 2016-17 forms a part of the Board’s
Report.
The CSR Committee of the Company is constituted in accordance with the provisions of Section 135 of the Act. The
composition of the CSR Committee and the details of the Meetings attended by the Directors during the year are
given below:
The CSR Committee met twice during the year, on 24th June, 2016 and 20th February, 2017.
Regulation 21 of the Listing Regulations mandates top 100 listed entities, determined on the basis of market capitalization
as at the end of the immediate previous financial year, to constitute a Risk Management Committee (RMC). Although
non-mandatory, the Company has constituted a RMC of the Board during the year.
Terms of reference
The terms of reference of the RMC are as follows:
Approve the Risk Management Policy and plan integration through training and awareness programmes.
Approve the process of risk identification.
Set up risk strategy policies, including agreeing on risk tolerance and appetite levels, recognizing contingent
risks, inherent and residual risks.
Monitor the Company’s compliance with the risk structure. Assess whether the current exposure to the risk it
faces is acceptable and that there is an effective remediation of non-compliance on an on-going basis.
To approve major decisions affecting the risk profile or exposure and give appropriate directions.
To consider the effectiveness of decision making process in crisis and emergency situations.
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Generally, assist the Board in the execution of its responsibility for the governance of risk.
Attend to such other matters and functions as may be prescribed from to time.
The composition of the RMC and the details of the Meetings attended by the Directors during the year are given below:
The RMC met twice during the year, on 16th November, 2016 and 10th January, 2017.
The Chief Financial Officer and Head - Internal Audit are permanent invitees to the RMC. Business and Operation Heads are
invited to the Meetings when required. The Company Secretary acts as the Secretary to the Committee.
The Company has a well-defined risk management framework in place. The risk management framework of the Company is
given in detail in the Management Discussion and Analysis Report.
The Executive Committee of the Board (ECOB) is responsible for reviewing, before presentation to the full Board, items
such as Business and strategy review, long-term financial projections and cash flows, capital and revenue budgets,
acquisitions, divestments and business restructuring proposals. The Committee is also responsible for advising the
management on development of business plans and future strategies for the Company.
The composition of the ECOB and the details of the Meetings attended by the Directors during the year are given below:
The ECOB met once during the year, on 2nd March, 2017.
The Chief Financial Officer is a permanent invitee to the Committee.
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The Property Committee has been constituted to advice the management on unlocking the value of the surplus assets of
the Company.
The composition of the Property Committee and the details of the Meetings attended by the Directors during the year
are given below:
The Property Committee met once during the year, on 19th September, 2016.
Regulation 16(1)(c) of the Listing Regulations defines a ‘material subsidiary’ as a subsidiary, whose income or net
worth exceeds 20% of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the
immediately preceding accounting year. As per this definition, during the year, Metahelix Life Sciences Ltd. (Metahelix),
was a material subsidiary of the Company.
Regulation 24 of the Listing Regulations requires at least one Independent Director of the listed entity to be a Director
on the Board of an unlisted material subsidiary incorporated in India. Two Independent Directors of the Company, viz.
Dr. (Mrs.) Punita Kumar-Sinha and Dr. C. V. Natraj are appointed as Independent Directors on the Board of Metahelix.
The Company’s Audit Committee reviews the consolidated financial statements of the Company as well as the financial
statements of the subsidiaries, including the investments made by the subsidiaries. The minutes of the Board Meetings,
along with a report of the significant transactions and arrangements of the unlisted subsidiaries of the Company are
periodically placed before the Board of Directors of the Company.
The Company has formulated a policy for determining material subsidiaries and the Policy is disclosed on the
Company’s website.
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11. GENERAL BODY MEETINGS
Location, date and time of Annual General Meetings held during the last 3 years and special resolutions passed:
Day, Date and Time Location Special Resolutions
Friday, 24th June, 2016 at Walchand Hirachand Hall, 4th Floor, Indian There was no matter that required passing
3.00 pm Merchants’ Chamber Building, IMC Marg, of Special Resolution.
Churchgate, Mumbai 400 020.
Monday, 29th June, 2015 Walchand Hirachand Hall, 4th Floor, Indian There was no matter that required passing
at 3.00 pm Merchants’ Chamber Building, IMC Marg, of Special Resolution.
Churchgate, Mumbai 400 020.
Monday, 30th June, 2014 at Walchand Hirachand Hall, 4th Floor, Indian 1) Approval of borrowing limits of the
3.00 pm Merchants’ Chamber Building, IMC Marg, Company.
Churchgate, Mumbai 400 020. 2) Creation of Charge on the assets of the
Company.
All resolutions moved at the last Annual General Meeting were passed by the requisite majority of shareholders.
No Extra-ordinary General Meeting of the shareholders was held during the year. During the year under review, no
resolution was put through by Postal Ballot.
12. DISCLOSURES
a) There are no materially significant related party transactions of the Company which have potential conflict
with the interests of the Company at large. During the year, there were no materially significant related party
transactions, i.e. transactions of the Company of material nature, with its promoters, their subsidiaries, the
Directors, the KMP, the management or relatives, or other designated persons, that may have a potential conflict
with the interests of the Company at large. Declarations have been received from the senior management
personnel to this effect.
b) All related party transactions entered into during the year were on arms’ length basis, in the ordinary course of
business and were in compliance with the applicable provisions of the Act and Listing Regulations. The Company
has adopted a Related Party Transactions Policy and the same is displayed on the Company’s website at the following
weblink: http://www.rallis.co.in/Related_Party_TransactionsPolicy.htm
c) The Company has adopted a Policy on Material Subsidiaries and the same is displayed on the Company’s website
at the following weblink: http://www.rallis.co.in/Material_SubsidiariesPolicy.htm
d) The Company has complied with the requirements of the Stock Exchanges, SEBI and statutory authorities on all
matters related to the capital markets during the last three years. No penalty or strictures were imposed on the
Company by these authorities.
e) The Managing Director & CEO and the Chief Financial Officer have certified to the Board in accordance with
Regulation 17(8) read with Part B of Schedule II to the Listing Regulations pertaining to CEO/ CFO certification for
the Financial Year ended 31st March, 2017.
f ) The Company has a well defined risk management framework in place. The Company periodically places
before the RMC and the Board, the key risks and the risk assessment and mitigation procedures followed by the
Company.
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RALLIS
h) The Company has prepared the Financial Statements in accordance with the Indian Accounting Standards notified
under the Companies (Indian Accounting Standards) Rules, 2015 (‘Ind AS’).
Up to the year ended 31st March, 2016, the Company prepared its financial statements in accordance with generally
accepted accounting principles in India, including accounting standards read with Section 133 of the Act notified
under the Companies (Accounting Standards) Rules, 2006 (‘Previous GAAP’). These are the Company’s first Ind AS
Financial Statements.
i) The Company has complied with all mandatory and non-mandatory requirements of the Listing Regulations relating
to Corporate Governance and also complied with Clauses (b) to (i) of Regulation 46(2) relating to dissemination
of information on the website of the Company. The status of compliance with the non-mandatory requirements
listed in Part E of Schedule II of the Listing Regulations, is as under:
The Non-Executive Chairman maintains a separate office, for which the Company is not required to reimburse
expenses.
Half yearly financial performance of the Company is sent to all shareholders.
The financial statements of the Company are with unmodified audit opinion.
The Chairman of the Board is a Non-Executive Director and his position is separate from that of the Managing
Director & CEO.
The Internal Auditor reports to the Audit Committee.
i) The quarterly and the half yearly results, published in the format prescribed by the Listing Regulations read with
the Circular issued there under, are approved and taken on record by the Board of Directors of the Company
within one month of the close of the relevant quarter. The approved results are forthwith uploaded on the
designated portals of the Stock Exchanges where the Company’s shares are listed, viz. NSE Electronic Application
Processing System (NEAPS) of the National Stock Exchange of India Ltd. (NSE) and BSE Online Portal of BSE Ltd.
(BSE). The results are also published within 48 hours in Hindu Business Line (in English) and Mumbai Lakshadweep
(in Marathi) and also displayed on the Company’s website, www.rallis.co.in.
ii) The Company publishes the audited annual results within the stipulated period of sixty days from the close of
the financial year as required by the Listing Regulations. The annual audited results are also uploaded on NEAPS
and BSE Online Portal of NSE and BSE respectively, published in the newspapers and displayed on the Company’s
website.
iii) Official news releases and presentations made to institutional investors and analysts are uploaded on NEAPS and
BSE Online Portal of NSE and BSE respectively and posted on the Company’s website.
iv) Comprehensive information about the Company, its business and operations and press releases can be viewed
on the Company’s website. The “Investor Relations” section on the website gives information relating to financial
112
results, annual reports, shareholding pattern and presentations made to analysts and at Annual General
Meetings. Information about unclaimed dividends and details of Equity Shares required to be transferred to the
IEPF Demat account are also available in this section.
Members also have the facility of raising their queries/ complaints through the Shareholder Query Form available
under “Investor Information” in the “Investor Relations” section of the website.
v) The quarterly Shareholding Pattern and Corporate Governance Report of the Company are filed with NSE
through NEAPS and with BSE through BSE Online Portal. The Shareholding Pattern is also displayed on the
Company’s website under the “Investor Relations” section.
vi) Material events or information, as detailed in Regulation 30 of the Listing Regulations, are disclosed to the
Stock Exchanges by filing them with NSE through NEAPS and with BSE through BSE Online Portal. They are also
displayed on the Company’s website under the “Investor Relations” section.
vii) The Company sends an annual reminder to shareholders who have not claimed their dividends. Circulars are
also sent periodically to shareholders urging them to opt for the electronic mode for receiving dividends.
viii) Management Discussion and Analysis Report forms a part of the Annual Report.
The Company is registered with the Registrar of Companies, Maharashtra, Mumbai. The Corporate Identity Number (CIN)
allotted to the Company by the Ministry of Corporate Affairs (MCA) is L36992MH1948PLC014083.
Friday, 23rd June, 2017 at 3.00 pm at Walchand Hirachand Hall, 4th Floor, Indian Merchants’ Chamber Building, IMC
Marg, Churchgate, Mumbai 400 020.
As required under Regulation 36(3) of the Listing Regulations, particulars of the Directors seeking re-appointment/
appointment are given in the Explanatory Statement to the Notice of the Annual General Meeting to be held on 23rd
June, 2017.
Financial Calendar : April to March
Date of book closure: 13th June, 2017 to 23rd June, 2017 (both days inclusive)
Dividend payment date: 28th June, 2017
Listing on Stock Exchanges: The Company’s Equity Shares are listed on the following Stock Exchanges:
BSE Ltd. The National Stock Exchange of India Ltd.
Phiroze Jeejeebhoy Towers Exchange Plaza, 5th Floor
Dalal Street Plot No.C/1, G Block
Mumbai 400 001 Bandra-Kurla Complex
Bandra (E) Mumbai 400 051
The Company has paid the listing fees to these Stock Exchanges for the year 2016-17.
Stock Code on BSE Ltd. : 500355
Stock Code on the National Stock Exchange of India Ltd. : RALLIS EQ
Demat International Security Identification Number (ISIN)
in NSDL and CDSL for Equity Shares : INE613A01020
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RALLIS
High Low No. of Value of No. of High Low No. of Value of No. of
(`) (`) Shares Shares Trades (`) (`) Shares Shares Trades
Traded Traded Traded Traded
(` Lakhs) (` Lakhs)
April 2016 205.00 165.75 10,75,274 1,979.55 19,611 205.40 165.20 52,87,210 9,956.58 92,295
May 2016 216.45 192.00 14,28,692 2,942.38 22,942 216.80 192.50 59,47,377 12,189.94 93,802
June 2016 226.50 204.00 10,15,347 2,194.49 24,410 230.00 203.20 64,06,329 13,837.42 97,005
July 2016 225.90 206.00 9,62,999 2,085.19 20,212 226.45 206.00 66,43,681 14,378.07 85,346
August 2016 235.00 215.40 11,04,380 2,469.01 23,007 235.00 215.20 83,68,148 18,686.82 96,606
September 2016 235.00 210.80 16,46,921 3,697.65 19,252 234.85 210.00 44,43,015 9,991.82 68,623
October 2016 245.95 218.10 11,28,584 2,631.38 23,454 246.00 218.35 62,26,761 14,505.67 1,04,896
November 2016 225.50 180.25 11,37,945 2,308.19 15,304 224.90 180.40 42,63,885 8,551.84 87,140
December 2016 209.00 188.45 8,28,345 1,622.52 6,537 209.15 188.00 37,84,330 7,409.13 39,617
January 2017 242.00 191.35 17,35,030 3,763.60 23,540 242.25 191.20 71,84,038 15,605.61 1,15,181
February 2017 253.80 230.85 14,91,530 3,643.15 17,387 254.20 231.25 48,73,811 11,856.53 71,540
March 2017 264.60 232.20 22,17,779 5,484.53 19,625 265.25 232.10 96,00,623 23,466.06 1,12,180
Performance of Rallis Share Price in comparison Indexed Performance of Rallis Share Price in comparison with
with BSE Sensex BSE Sensex
36,000 300 160
33,000 270
140
BSE Sensex
30,000 240
Indexed Price
120
27,000 210
100
24,000 180
21,000 150 80
Apr/16 May/16 Jun/16 Jul/16 Aug/16 Sep/16 Oct/16 Nov/16 Dec/16 Jan/17 Feb/17 Mar/17 Apr/16 May/16 Jun/16 Jul/16 Aug/16 Sep/16 Oct/16 Nov/16 Dec/16 Jan/17 Feb/17 Mar/17
114
Registrars and Share Transfer Agents:
Members may correspond with the Company’s Registrars and Share Transfer Agents, TSR Darashaw Ltd. (TSRDL), quoting their
folio numbers/ DP ID and Client ID at the following addresses:
For the convenience of shareholders based in the following cities, transfer documents and letters will also be accepted at the
following Branch Offices/ agencies of TSRDL:
Branches of TSRDL
TSR Darashaw Ltd., TSR Darashaw Ltd., TSR Darashaw Ltd.,
503, Barton Centre, (5th Floor), Tata Centre, 1st Floor, 2/42, Ansari Road,
84, Mahatma Gandhi Road, 43, J. L. Nehru Road, 1st Floor, Daryaganj, Sant Vihar,
Bengaluru 560 001. Kolkata 700 071. New Delhi 110 002.
Tel.: 91 80 2532 0321 Tel.: 91 33 2288 3087 Tel.: 91 11 2327 1805
Fax: 91 80 2558 0019 Fax: 91 33 2288 3062 Fax: 91 11 2327 1802
Email: tsrdlbang@tsrdarashaw.com Email: tsrdlcal@tsrdarashaw.com Email: tsrdldel@tsrdarashaw.com
Secretarial Audit:
Parikh & Associates, Practicing Company Secretaries have conducted the Secretarial Audit of the Company for the year
2016-17. Their Audit Report confirms that the Company has complied with its Memorandum and Articles of Association,
the applicable provisions of the Act and the Rules made there under, Listing Regulations, applicable SEBI Regulations and
other laws applicable to the Company. The Secretarial Audit Report forms part of the Board’s Report.
Pursuant to Regulation 40(9) of the Listing Regulations, certificates have been issued on a half-yearly basis, by a Company
Secretary in practice, certifying due compliance of share transfer formalities by the Company.
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RALLIS
116
Outstanding ADRs/ GDRs/ Warrants or any convertible instruments, conversion date and likely impact on equity:
The Company does not have any outstanding ADRs/ GDRs/ Warrants or any convertible instruments.
Commodity price risk or foreign exchange risk and hedging activities:
During the year, the Company has managed foreign exchange risk and hedged to the extent considered necessary. Net open
exposures are reviewed regularly and covered through forward contracts. The details of foreign currency exposure are disclosed
in Note No.37 to the Standalone Financial Statements.
Plant locations:
(i) GIDC Estate, Plot No.3301, Ankleshwar 393 002, Dist. Bharuch, Gujarat.
(ii) GIDC Estate, Plot No.2808, Ankleshwar 393 002, Dist. Bharuch, Gujarat.
(iii) GIDC Estate, Plot No.3000, Ankleshwar 393 002, Dist. Bharuch, Gujarat.
(iv) C 5/6, MIDC Industrial Area, Phase III, Shivani, Akola 444 104, Maharashtra.
(v) Plot No.D-26, Lote Parashuram, MIDC, Near Hotel Vakratunda, Taluka Khed, Dist. Ratnagiri 415 722, Maharashtra.
(vi) Plot Nos. Z/ 110 and Z/112, Dahej SEZ Part - II, P.O. Lakhigam, Taluka Vagra, Dist. Bharuch 392 130, Gujarat.
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RALLIS
I, V. Shankar, Managing Director & CEO of Rallis India Limited hereby declare that all the members of the Board of Directors and
senior management personnel have affirmed compliance with the Code of Conduct, as applicable to them, for the year ended
31st March, 2017.
V. Shankar
Mumbai, 24th April, 2017 Managing Director & CEO
118
STANDALONE
FINANCIAL STATEMENTS
119
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF RALLIS INDIA LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Rallis India Limited (the “Company”), which
comprise the Balance Sheet as at 31 March, 2017, and the Statement of Profit and Loss (including Other Comprehensive Income),
the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
Auditor’s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters
which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified
under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material
misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the
auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements
that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes
evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the
Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the
standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS
financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March, 2017, and its profit,
total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
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RALLIS
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our
examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows
and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards
prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March, 2017 taken on record by the Board
of Directors, none of the directors is disqualified as on 31 March, 2017 from being appointed as a director in terms of
Section 164(2) of the Act.
f ) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating
effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on
the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the
explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial
statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material
foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection
Fund by the Company except in cases wherein disputes relating to the ownership of the underlying shares have
remained unresolved;
iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as regards its holding and
dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8 November, 2016 of the Ministry
of Finance, during the period from 8 November, 2016 to 30 December, 2016. Based on audit procedures performed
and the representations provided to us by the management we report that the disclosures are in accordance with the
books of account maintained by the Company and as produced to us by the Management.
2. As required by the Companies (Auditor’s Report) Order, 2016 (the “Order”) issued by the Central Government in terms of
Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.
Sanjiv V. Pilgaonkar
Partner
(Membership No.039826)
Place: Mumbai
Date: 24 April, 2017
122
ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph (f) under ‘Report on Other Legal and Regulatory Requirements’ section of
our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of
Section 143 of the Companies Act, 2013 (the “Act”)
We have audited the internal financial controls over financial reporting of Rallis India Limited (the “Company”) as of 31 March,
2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit.
We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
(the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under
Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards
and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such
controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system
over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The
procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the
Company’s internal financial controls system over financial reporting.
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RALLIS
Opinion
In our opinion, to the best of our information and according to the explanations given to us the Company has, in all material
respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial
reporting were operating effectively as at 31 March, 2017, based on the internal control over financial reporting criteria established
by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Our opinion is not modified in respect of this matter.
.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm’s Registration No. 117366W/W-100018)
Sanjiv V. Pilgaonkar
Partner
(Membership No.039826)
Place: Mumbai
Date: 24 April, 2017
124
ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of
our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of
fixed assets.
(b) The fixed assets were physically verified during the year by the Management in accordance with a regular program
of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals.
According to the information and explanation given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records examined by us and based on the examination
of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising
all the immovable properties of land and buildings are held in the name of the Company as at the balance sheet date,
except the following:
Land / No of Leasehold / Gross block Net block Remark
Building cases Freehold ` in lac ` in lac
Building 12 Freehold 2.83 0.94 The original agreements were not available for verification.
Building 2 Freehold 57.35 26.59 The Company has filed a declaration suit with regards to
the title and awaiting a decree certificate in share held in
the Cooperative Housing Society have been verified.
Land 7 Leasehold 4,801.53 4,223.78 1. In 5 cases, the original agreements were not available
for verification.
2. In 2 cases, while the plots have been allotted and are in
the possession of the Company, the lease deeds have
not yet been executed by lessors.
3. In 1 case, copy of lease deed was available and has
been verified.
(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and
no material discrepancies were noticed on physical verification.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other
parties covered in the register maintained under section 189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions
of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees
and securities, as applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year. In
respect of unclaimed deposits, the Company has complied with the provisions of Sections 73 to 76 or any other relevant
provisions of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014, as amended, with regard
to the deposits accepted. According to the information and explanations given to us, no order under aforesaid section has
been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or
any other Tribunal in this regard in respect of the respective entities.
(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies
Act, 2013 for fertilizers, insecticides and polymers. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under
sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost
records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view
to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in respect of statutory dues:
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(a) The Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees’
State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material
statutory dues applicable to it to the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax,
Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as
at 31 March, 2017 for a period of more than six months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not
been deposited as on 31 March, 2017 on account of disputes are given below:
Name of Nature of Forum where Period to which the Amount Relates Amount Amount
Statute dues dispute is pending involved Unpaid
( ` lac ) ( ` lac )
Sales Tax/VAT Sales Tax/VAT Joint Commissioner 2000-01, 2001-02, 2005-06 to 2010- 606.53 519.65
Laws (including (Appeals) 11, 2012-13 to 2014-15
interest and Additional 1990-91, 2000-01, 2001-02, 2006-07 285.95 275.37
payment) Commissioner to 2013-14
Deputy 1983-84, 1992-93, 1994-95, 1996-97 798.85 545.72
Commissioner to 2001-02, 2003-04 to 2012-13
Assistant 1993-94, 1998-99, 1999-00, 2001-02, 111.42 65.84
Commissioner 2003-04, 2004-05, 2007-08 to 2009-
10, 2014-15
Tribunal 1992-93, 1995-96 to 1999-2000, 495.35 428.07
2001-02, 2003-04,2009-10, 2011-12,
2012-13, 2015-16
Commercial Tax 1990-91, 1996-97, 1997-98, 2001-02, 70.68 28.16
Officer 2002-03
Finance Act, Service Tax Assistant 2007-08, 2010-11 6.74 6.74
1994 Commissioner
Superintendent of 2007-08 to 2015-16 186.71 186.71
Excise and Custom
Joint Commissioner 2005-06 to 2009-10 10.23 10.23
Tribunal 2007-08 2.66 1.33
Customs Act, Customs High Court 1999-00 144.10 144.10
1962 Duty
Central Excise Excise Duty Joint Commissioner 1999-2001, 2016-17 105.52 105.52
Act, 1994 (including (Appeals)
penalty and Deputy 1999-00, 111.94 86.79
interest) Commissioner 2001-02, 2006-07, 2011-15
Tribunal 1986-87, 1990-91, 1996 - 97 to 573.59 433.14
2001-02
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the
repayment of loans or borrowings to banks and government. The Company has not obtained any loan from financial
institutions and debenture holders.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term
loans and hence reporting under clause (ix) of the CARO 2016 Order is not applicable.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and
no fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial
remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to
the Companies Act, 2013.
126
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 188
and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related
party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly
convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered
into any non-cash transactions with its directors or persons connected with them and hence provisions of section 192 of the
Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Sanjiv V. Pilgaonkar
Partner
(Membership No.039826)
Place: Mumbai
Date: 24 April, 2017
127
RALLIS
Current assets
a) Inventories 10 24,448.87 25,750.10 27,659.27
b) Financial assets
i) Investments 7 20,957.36 - -
ii) Trade receivables 11 22,583.75 18,279.14 22,422.74
iii) Cash and cash equivalents 12.1 392.94 262.06 99.29
iv) Bank balances other than (iii) above 12.2 320.37 335.14 409.85
v) Other financial assets 8 73.76 58.54 199.18
c) Other current assets 13 5,503.44 5,167.27 4,407.20
74,280.49 49,852.25 55,197.53
Liabilities
Non-current liabilities
a) Financial liabilities - long term borrowings 17 2,117.26 2,107.13 1,944.57
b) Provisions 22 1,764.27 1,663.19 1,804.64
c) Deferred tax liabilities (Net) 19 4,982.42 3,578.83 3,252.05
Total non-current liabilities 8,863.95 7,349.15 7,001.26
Current liabilities
a) Financial liabilities
i) Short term borrowings 18 9.82 208.37 4,277.07
ii) Trade payables 20 22,950.64 19,144.61 20,524.89
iii) Other financial liabilities 21 6,656.06 8,530.65 7,538.51
b) Provisions 22 917.26 818.64 747.37
c) Current tax liabilities (Net) 9 389.93 611.13 1,552.19
d) Other current liabilities 23 2,747.73 2,498.54 2,837.55
Total current liabilities 33,671.44 31,811.94 37,477.58
Total liabilities 42,535.39 39,161.09 44,478.84
Total equity and liabilities 155,075.11 130,995.74 127,165.66
See accompanying notes to the financial statements
128
All amounts are in ` lac except for earning per share information
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2017
For the year ended For the year ended
Notes
31 March, 2017 31 March, 2016
I Revenue from operations 24 150,517.27 138,672.32
II Other income 25 1,050.81 466.06
III Total Income (I+II) 151,568.08 139,138.38
IV Expenses
Cost of materials consumed 26 65,015.23 61,816.68
Purchases of stock in trade 27 12,483.87 12,129.97
Changes in inventories of finished goods, stock-in-trade and 28 3,514.18 (244.39)
work-in-progress
Excise duty on sale of goods 10,467.88 9,867.97
Employee benefits expense 29 11,400.76 10,245.14
Finance costs 30 266.63 791.62
Depreciation and amortisation expense 31 4,194.12 3,782.66
Other expenses 32 24,131.83 24,230.80
Total expenses (IV) 131,474.50 122,620.45
V Profit before exceptional items and tax (III -IV) 20,093.58 16,517.93
VI Exceptional items 47 15,839.16 -
VII Profit before tax (V+VI) 35,932.74 16,517.93
129
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130
All amounts are in ` lac unless otherwise stated
NET INCREASE IN CASH AND CASH EQUIVALENTS (A) + (B) + (C) 329.43 3,231.47
131
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Other Equity
Other
Equity Reserves & Surplus Comprehensive
Total other
Particulars share Income Total equity
equity
capital
Securities Retained Capital Capital General Equity
premium earnings reserve redemption reserve instrument
reserve reserve through OCI
As at 1 April, 2015 1,944.71 8,793.88 46,163.63 1,243.10 8,151.77 16,389.73 - 80,742.11 82,686.82
At 31 March, 2016 1,944.71 8,793.88 54,051.25 1,243.10 8,151.77 17,649.93 0.01 89,889.94 91,834.65
At 31 March, 2017 1,944.71 8,793.88 74,755.94 1,243.10 8,151.77 17,649.93 0.39 110,595.01 112,539.72
132
Notes to the financial statements for the year ended 31 March, 2017
1. Corporate Information
Rallis India Limited (the ‘’Company’’) is a public limited company domiciled in India and is incorporated under the provisions
of the Companies Act applicable in India. 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’s
registered office is at 156/157, 15th Floor, Nariman Bhavan, 227 Nariman Point, Mumbai 400 021.
Tata Chemicals Limited (“Tata Chemicals”) owns 50.06% of the Company’s equity share capital.
The financial statements for the year ended 31 March, 2017 were approved by the Board of Directors and authorised for issue
on 24 April, 2017.
2. Recent accounting pronouncement
2.1 Standards issued but not yet effective
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments)
Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of Cash Flows’ and Ind AS 102, ‘Share-based payment.’ These
amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to
IAS 7, ‘Statement of Cash Flows’ and IFRS 2, ‘Share-based payment,’ respectively. The amendments are applicable from 1 April,
2017.
Amendment to Ind AS 7:
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate
changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes,
suggesting inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising
from financing activities, to meet the disclosure requirement.
The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.
Amendment to Ind AS 102:
The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-
settled awards and awards that include a net settlement feature in respect of withholding taxes.
It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled
awards. Market-based performance conditions and non-vesting conditions are reflected in the ‘fair values’, but non-market
performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to
vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are
modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for
as such from the date of the modification. Further, the amendment requires the award that include a net settlement feature
in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated
as if it was part of an equity settlement.
The requirements of the amendment have no impact on the financial statements as the standard is not applicable to the
Company.
3. Significant accounting policies
3.1 Statement of compliance
These financial statements of the Company have been prepared in accordance with Indian Accounting Standards notified
under the Companies (Indian Accounting Standards) Rules, 2015 (“Ind AS”).
Up to the year ended 31 March, 2016, the Company prepared its financial statements in accordance with generally accepted
accounting principles in the India, including accounting standards read with Section 133 of the Companies Act, 2013 notified
under Companies (Accounting Standards) Rules, 2006 (“Previous GAAP”). These are the Company’s first Ind AS financial
statements. The date of transition to Ind AS is 1 April, 2015. Refer note 4 for the details of first time adoption exemptions
availed by the Company.
3.2 Basis of preparation and measurement
The financial statements have been prepared on the historical cost basis, except for certain financial instruments which
133
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are measured at fair values at the end of each reporting period. Historical cost is generally based on the fair value of the
consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of whether that price is directly observable or estimated using
another valuation technique.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset
in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available
to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as
a whole:
• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly
or indirectly observable
• Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
3.3 Foreign currency translation
The functional currency of Rallis India Limited is Indian rupee (`).
On initial recognition, all foreign currency transactions are translated into the functional currency using the exchange
rates prevailing on the date of the transaction. As at the reporting date, foreign currency monetary assets and liabilities are
translated at the exchange rate prevailing on the Balance Sheet date and the exchange gains or losses are recognised in the
Statement of Profit and Loss
3.4 Property plant and equipment (PPE)
On adoption of Ind AS, the Company retained the carrying value for all of its property, plant and equipment as recognised
in the financial statements as at the date of transition to Ind ASs, measured as per the previous GAAP and used that as its
deemed cost as permitted by Ind AS 101 ‘First-time Adoption of Indian Accounting Standards’.
PPE are initially recognised at cost. The initial cost of PPE comprises its purchase price, including non-refundable duties
and taxes net of any trade discounts and rebates. The cost of PPE includes interest on borrowings (borrowing cost) directly
attributable to acquisition, construction or production of qualifying assets subsequent to initial recognition, PPE are stated
at cost less accumulated depreciation (other than freehold land, which are stated at cost) and impairment losses, if any.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be
measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced.
All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. However,
when there is no reasonable certainty that ownership will be obtained by the end of the lease term, assets are depreciated
over the shorter of the lease term and useful lives.
Depreciation is recognised so as to write off the cost of assets (other than freehold land and capital work in progress) less
their residual values over the useful lives, using the straight- line method (“SLM”). Management believes based on a technical
evaluation (which is based on technical advice, taking into account the nature of the asset, the estimated usage of the
asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers
134
Notes to the financial statements for the year ended 31 March, 2017
warranties and maintenance support, etc.) that the revised useful lives of the assets reflect the periods over which these
assets are expected to be used, which are as follows:
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable.
The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount,
method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the
future economic benefits embodied in the items of property, plant and equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected
to arise from the continued use of the asset. Any gain or loss arising on disposal or retirement of an item of property, plant and
equipment is determined as the difference between sales proceeds and the carrying amount of the asset and is recognised in
profit or loss. Fully depreciated assets still in use are retained in financial statements.
3.5 Intangible assets
Intangible assets are measured on initial recognition at cost and subsequently are carried at cost less accumulated
amortisation and accumulated impairment losses, if any.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal.
Gains or losses on derecognition are determined by comparing proceeds with carrying amount. These are included in profit
or loss within other gains/(losses).
The Company amortises intangible assets with a finite useful life using the straight-line method over the following range of
useful lives:
Asset Useful life
Product registrations 4 years
Licenses and commercial rights 4 years
Computer software 3-8 years
The estimated useful life is reviewed annually by the management.
3.6 Capital work-in-progress and intangible assets under development
Capital work-in-progress/intangible assets under development are carried at cost, comprising direct cost, related incidental
expenses and attributable borrowing cost.
3.7 Non-derivative financial instruments
Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the
instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable
to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair
value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or
financial liability.
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136
Notes to the financial statements for the year ended 31 March, 2017
higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does
not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is
determined for the cash generating unit (CGU) to which the asset belongs.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the
asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the Statement of Profit and Loss.
3.11 Inventories
Inventories are valued at lower of cost (on weighted average basis) and net realisable value after providing for obsolescence
and other losses, where considered necessary. Cost includes all charges in bringing the goods to their present location and
condition, including octroi and other levies, transit insurance and receiving charges. Work-in-progress and finished goods
include appropriate proportion of overheads and, where applicable, excise duty. Net realisable value is the estimated selling
price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make
the sale.
3.12 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer
returns, rebates and other similar allowances.
3.12.1 Sale of goods
Revenue from the sale of goods is recognised when the goods are delivered and titles have passed, at which time
all the following conditions are satisfied:
• the Company has transferred to the buyer the significant risks and rewards of ownership of the goods;
• the Company retains neither continuing managerial involvement to the degree usually associated with
ownership nor effective control over the goods sold
• the amount of revenue can be measured reliably;
• it is probable that the economic benefits associated with the transaction will flow to the Company; and the
costs incurred or to be incurred in respect of the transaction can be measured reliably.
3.12.2 Rendering of services
Income recognition for services takes place as and when the services are performed.
3.12.3 Interest Income
Interest income from financial assets is recognized when it is probable that economic benefits will flow to the
Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by
reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial assets to that asset’s net carrying
amount on initial recognition.
3.12.4 Dividend
Dividend income from investments is recognised when the shareholder’s right to receive payment has been
established (provided that it is probable that the economic benefits will flow to the Company and the amount of
income can be measured reliably).
3.12.5 Insurance claims
Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent
that there is no uncertainty in receiving the claims.
3.12.6 Royalty on trademark license arrangements
Royalty revenue is recognised on an accrual basis (provided that it is probable that the economic benefits will
flow to the Company and the amount of revenue can be measured reliably). Such arrangements are based on
sales made by the licensee and are recognised by reference to the compensation terms under the underlying
arrangement.
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138
Notes to the financial statements for the year ended 31 March, 2017
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 as at the year end.
Defined benefit plans
The Company operates various defined benefit plans- gratuity fund and supplemental pay.
The liability or asset recognised in the balance sheet in respect of its defined benefit plans is the present value
of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined
benefit obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the said obligation is determined by discounting the estimated future cash outflows, using
market yields of government bonds that have tenure approximating the tenures of the related liability.
The interest income / (expense) are calculated by applying the discount rate to the net defined benefit liability or
asset. The net interest income / (expense) on the net defined benefit liability or asset is recognised in the Statement
of Profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions
are recognised in the period in which they occur, directly in other comprehensive income. They are included in
retained earnings in the Statement of Changes in Equity and in the Balance Sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments
are recognised immediately in profit or loss as past service cost.
3.16.2 Short term employee benefit
Compensated absences which accrue to employees and which can be carried to future periods but are expected
to be encashed or availed in twelve months immediately following the year end are reported as expenses during
the year in which the employees perform the services that the benefit covers and the liabilities are reported at
the undiscounted amount of the benefits after deducting amounts already paid. Where there are restrictions on
availment of encashment of such accrued benefit or where the availment or encashment is otherwise not expected
to wholly occur in the next twelve months, the liability on account of the benefit is actuarially determined using
the projected unit credit method.
3.17 Borrowing cost
Borrowing costs are interest and ancillary costs incurred in connection with the arrangement of borrowings. General and
specific borrowing costs attributable to acquisition and construction of any qualifying asset (one that takes a substantial
period of time to get ready for its designated use or sale) are capitalised until such time as the assets are substantially ready
for their intended use or sale, and included as part of the cost of that asset. Investment income earned on the temporary
investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs
eligible for capitalisation. All the other borrowing costs are recognised in the Statement of Profit and Loss within Finance
costs of the period in which they are incurred.
3.18 Segment reporting
Operating segments are defined as components of an enterprise for which discrete financial information is available that is
evaluated regularly by the chief operating decision maker, in deciding how to allocate resources and assessing performance.
The Company’s chief operating decision maker is the Managing Director & CEO.
Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the
basis of their relationship to the operating activities of the segment. Inter segment revenue is accounted on the basis of
transactions which are primarily determined based on market / fair value factors. Revenue, expenses, assets and liabilities
which relate to the Company as a whole and are not allocable to segments on a reasonable basis have been included under
“unallocated revenue / expenses / assets / liabilities”.
3.19 Income tax
Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year.
Current and deferred taxes are recognised in Statement of Profit and Loss, except when they relate to items that are recognised
in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other
139
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140
Notes to the financial statements for the year ended 31 March, 2017
141
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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.
4. 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.
i. Reconciliations of equity:
` lac
Particulars As at As at
31 March, 2016 1 April, 2015
Equity as per Previous GAAP 86,546.04 79,795.52
Dividend and tax on dividend 5,851.45 3,500.27
Difference on account of revenue recognition net of (562.72) (608.74)
related costs
Others (0.12) (0.23)
Equity as per Ind AS 91,834.65 82,686.82
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.
142
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
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Cost or deemed cost Freehold Leasehold Buildings Plant and Furniture and Vehicles Office Equipment Total
land improvements equipment fixtures equipments under
finance lease
Balance at 1 April, 2015 251.68 165.11 12,110.48 18,162.46 333.83 86.25 125.55 - 31,235.36
Balance at 31 March, 2016 251.68 165.11 12,469.06 23,023.50 400.66 35.22 159.04 - 36,504.27
Balance at 31 March, 2017 244.91 165.11 13,212.65 25,457.50 380.16 21.97 215.11 38.11 39,735.52
Accumulated depreciation Freehold Leasehold Buildings Plant and Furniture Vehicles Office Equipment Total
land improvements equipment and equipments under
fixtures finance lease
Balance at 31 March, 2016 - 21.88 480.07 2,570.06 89.40 7.66 52.41 - 3,221.48
Depreciation expense - 21.89 629.51 2,855.19 92.21 9.06 76.91 1.06 3,685.83
Balance at 31 March, 2017 - 43.77 1,106.90 5,400.46 151.43 9.64 128.25 1.06 6,841.51
144
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
footnotes:
1. Cost of buildings includes cost of 60 shares (31 March, 2016 - 60 shares, 1 April, 2015 - 60 shares) of ` 50 each fully paid and
cost of 7 shares (31 March, 2016 - 7 shares, 1 April, 2015 - 7 shares) of ` 100 each fully paid in respect of ownership flats in 8
(31 March, 2016 - 8, 1 April, 2015 - 8) Co-operative Societies.
2. Buildings include assets carried at ` 0.94 lac (31 March, 2016 ` 1.07 lac, 1 April, 2015 ` 1.12 lac) where the conveyance in favor of
the Company has not been completed.
3. Plant and equipment includes general plant and machinery, electrical installations and equipments, laboratory equipments
and computers and data processing units. In addition, the Company’s obligations under finance leases are secured by the
lessor’s title to the leased assets.
4. The figures in italics are for the previous year.
6 Intangible assets
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Carrying amount of:
Product registrations 298.69 466.67 713.83
Licences and commercial rights 236.02 415.09 536.99
Computer software 58.44 48.00 52.96
593.15 929.76 1,303.78
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Disposals - - - -
Disposals - - - -
146
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
7 Investments
As at As at
Nominal As at
Quantity 31 March, Quantity 31 March, Quantity
value (in ` ) 1 April, 2015
2017 2016
Non-current
Quoted equity instruments
(all fully paid)
a) Investments carried at fair value
through other comprehensive
income (FVTOCI)
Spartek Ceramics India Ltd. 10 7,226 - 7,226 - 7,226 -
Nagarjuna Finance Ltd. 10 400 - 400 - 400 -
Pharmaceuticals Products of India
10 10,000 - 10,000 - 10,000 -
Limited
Balasore Alloys Ltd. 5 504 0.35 504 0.08 504 0.07
J.K. Cement Ltd. 10 44 0.41 44 0.30 44 0.30
Total aggregate quoted
A 0.76 A 0.38 A 0.37
investments
Unquoted equity instruments
(all fully paid)
a) Investment in subsidiaries at cost
Zero Waste Agro Organics Ltd. 10 73,645 6,134.39 54,224 4,185.55 54,198 4,183.55
Rallis Chemistry Exports Ltd. 10 50,000 5.00 50,000 5.00 50,000 5.00
Metahelix Life Sciences Ltd. 10 1,07,502 24,436.62 1,07,502 24,436.62 86,549 17,103.67
B 30,576.01 B 28,627.17 B 21,292.22
(ii) Current
a) Unbilled revenue 29.09 12.51 190.63
b) Advances/deposits considered doubtful of recovery 3,930.68 3,903.68 3,903.68
(refer footnote)
Less: Provision for doubtful loans and advances (3,930.68) (3903.68) (3903.68)
c) Interest accrued on fixed deposit with bank 10.80 12.16 8.55
d) Others 33.87 33.87 -
Total 73.76 58.54 199.18
*There is no amount due from director, other officer of the Company or firms in which any director is a partner or private companies
in which any director is a director or member at any time during the reporting period.
footnote:
Includes a sum of ` 18.61 lac (as at 31 March, 2016 ` 18.61 lac, as at 1 April, 2015 ` 18.61 lac) being amount due from Rallis Chemistry
Exports Ltd., a wholly owned subsidiary. The maximum amount outstanding during the year was ` 18.61 lac (as at 31 March, 2016
` 18.61 lac, as at 1 April, 2015 ` 18.61 lac).
148
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
9 Income Taxes
9.1 Current tax assets and liabilities
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Non current tax assets
Advance income tax (Net of provisions) 6,429.22 6,801.02 7,824.94
6,429.22 6,801.02 7,824.94
Current tax liabilities
Provision for current tax (Net of advance tax) 389.93 611.13 1,552.19
389.93 611.13 1,552.19
Deferred tax:
In respect of current year 569.60 326.78
Adjustments in respect of prior years 833.99 -
Total (B) 1,403.59 326.78
Income tax expense recognised in the Statement of Profit
9,329.34 3,901.72
and Loss (A+B)
The income tax expense for the year can be reconciled to the accounting profit as follows:
Particulars For the year ended For the year ended
31 March, 2017 31 March, 2016
Profit before tax 35,932.74 16,517.93
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11 Trade receivables
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Current
Secured, considered good 474.43 408.89 410.30
Unsecured, considered good 22,109.32 17,870.25 22,012.44
Doubtful 408.46 380.21 245.87
Allowance for doubtful debts (expected credit loss allowance) (408.46) (380.21) (245.87)
Total 22,583.75 18,279.14 22,422.74
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, 2017
` 3,819.27 lac is due from one customer (as at 31 March, 2016 ` 3,543.14 lac are due from two customers, as at 1 April, 2015
` 4,917.10 lac is due from one cutomer). 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.
(iv) Movement in the expected credit loss allowance
Particulars As at As at
31 March, 2017 31 March, 2016
Balance at the beginning of the year 380.21 245.87
Less: amount collected and hence reversal of provision 44.14 43.97
Add: provision made during the year 72.39 178.31
Balance at the end of the year 408.46 380.21
(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).
150
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
13 Other assets
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Non-current
Capital advances 84.59 232.32 200.02
Deposit with public bodies 96.57 140.09 153.02
Value Added Tax (VAT) credit receivable 460.97 1,228.81 1,211.48
Claims receivable 529.70 323.19 388.13
Prepaid lease rental (refer footnote) 3,818.66 4,508.57 4,643.03
Prepaid expenses 121.69 106.22 22.29
Total 5,112.18 6,539.20 6,617.97
Current
Statutory dues receivable from government authorities
Service tax credit receivable 263.68 282.65 382.57
Cenvat credit receivable 188.46 150.14 437.15
Others (custom duty) 12.74 5.43 14.66
Export benefit receivable 1,051.22 395.35 132.37
Inventory recoverable 1,653.82 2,007.92 2,152.12
Advances recoverable
Advances to suppliers 1,798.70 1,841.01 916.20
Advances to employees 129.56 116.95 96.94
Others 184.95 148.54 90.86
Prepaid lease rental (refer footnote) 113.61 134.46 102.33
Prepaid expenses 106.70 84.82 82.00
Total 5,503.44 5,167.27 4,407.20
footnote:
Prepaid lease rental include assets carried at ` 990.49 lac (as at 31 March, 2016 ` 1,583.59 lac, as at 1 April, 2015 ` 1,600.22 lac) for
which the Company has sought an extension for the fulfilment of pre-conditions of lease upon expiry of timeline.
151
RALLIS
Leasehold land and other assets held for sale 576.30 237.19 -
15 Share Capital
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Equity share capital 1,944.71 1,944.71 1,944.71
1,944.71 1,944.71 1,944.71
Authorised share capital :
500,000,000 equity shares of ` 1 each with voting rights 5,000.00 5,000.00 5,000.00
150,000,000 preference shares of ` 10 each 15,000.00 15,000.00 15,000.00
Issued and subscribed capital comprises:
Issued shares
194,470,890 equity shares of ` 1 each 1,944.71 1,944.71 1,944.71
Subscribed and fully paid up
194,468,890 equity shares of ` 1 each 1,944.69 1,944.69 1,944.69
Forfeited shares
2,000 equity shares of ` 1 each 0.02 0.02 0.02
1,944.71 1,944.71 1,944.71
footnotes:
a. Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the year:
Fully paid equity shares
b. The Company has issued one class of equity shares having a par value of ` 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.
152
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
d. Details of shares held by each shareholder holding more than 5% shares in the Company:
Rakesh Jhunjhunwala
e. As per records of the Company as at 31 March, 2017, no calls remain unpaid by the directors and officers of the Company.
153
RALLIS
16 Other equity
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
General reserve 17,649.93 17,649.93 16,389.73
Securities premium reserve 8,793.88 8,793.88 8,793.88
Retained earnings 74,755.94 54,051.25 46,163.63
Capital redemption reserve 8,151.77 8,151.77 8,151.77
Capital reserve 1,243.10 1,243.10 1,243.10
Reserve for equity instruments through Other Comprehensive Income 0.39 0.01 -
1,10,595.01 89,889.94 80,742.11
The general reserve is used from time to time to transfer profits from retained earnings for appropriations purposes. As the general
reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income , items
included in the general reserve will not be reclassified subsequently to profit or loss.
Amount received on issue of shares in excess of the par value has been classified as security share premium
154
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
(ii) The terms of repayment of term loans and other loans are stated below
As at 31 March, 2017
155
RALLIS
As at 31 March, 2016
Particulars Amount outstanding Terms of Repayment Rate of interest
Unsecured term loan 1,500.00 The loan is repayable in 20 quarterly installments. The repayment 9.50%
from bank begins after a moratorium of 24 months from February 2018. The
first repayment of ` 75.00 lac falls due in May 2018.
Loan from the Council 18.83 The loan is repayable in 2 annual installments of ` 18.83 lac (of 3.00%
of Scientific and which ` 18.83 lac has been grouped under note 21 other financial
Industrial Research liabilities)
As at 1 April, 2015
Particulars Amount outstanding Terms of Repayment Rate of interest
Unsecured Term loan 1,250.00 The loan is repayable in 8 quarterly installments. The repayment 9.90%
from bank begins after a moratorium of 12 months from March 2014. The first
repayment of ` 312.50 lac falls due in June 2015.
Loan from the Council 37.66 The loan is repayable in 3 annual installments of ` 18.83 lac 3.00%
of Scientific and (of which ` 18.83 lac has been grouped under note 21 other
Industrial Research financial liabilities)
(iii) Long term maturities of finance lease obligation:
Secured by the assets leased. The borrowing is fixed interest rate debt (7.05%) with repayment periods not exceeding 6 years.
footnotes:
(i) These 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 11).
(ii) The weighted average effective interest rate on the bank loans is 9.86% p.a. (for 31 March, 2016 9.27% p.a. ; for 1 April, 2015 10.14%
p.a.)
156
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
20 Trade payables
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Trade payables
(i) Total outstanding dues of micro enterprises and small 783.92 433.73 701.28
enterprises (refer note 44)
(ii) Total outstanding dues of creditors other than micro 18,037.94 14,768.12 15,664.82
enterprises and small enterprises
Other payables ( includes accrued expenses and amount due to 4,128.78 3,942.76 4,158.79
employees)
Total 22,950.64 19,144.61 20,524.89
footnote:
The average credit period on purchases of goods and services are within 120 days. The trade payables are non-interest bearing.
(b) Interest accrued but not due on borrowings 12.13 25.50 22.93
(c) Unclaimed dividends 146.53 134.82 132.32
(d) Others
Creditors for capital purchases 175.81 624.09 206.03
Customer deposits 1,250.66 1,142.56 1,010.16
Amounts due to customers 5,042.63 5,324.21 4,850.80
Total 6,656.06 8,530.65 7,538.51
footnote:
All amounts required to be transferred to the Investor Education and Protection Fund by the Company have been transferred
within the time prescribed for the same, except in cases of disputes relating to the ownership of the underlying shares that have
remained unresolved amounting to ` 0.19 lac (as at 31 March, 2016 ` 0.13 lac, as at 1 April, 2015 ` Nil).
157
RALLIS
22 Provisions
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Employee benefits (see footnote below)
Non current
Supplemental pay 1,542.22 1,494.69 1,524.63
Gratuity 222.05 168.50 280.01
Total 1,764.27 1,663.19 1,804.64
Current
Supplemental pay 196.09 198.48 200.43
Compensated absences 721.17 620.16 546.94
Total 917.26 818.64 747.37
footnote:
The provision for employee benefits includes gratuity, supplemental pay on retirement and compensated absences. The increase/
decrease in the carrying amount of the provision for the current year is mainly on account of net impact of incremental charge for
current year and benefits paid in the current year. For other disclosures, refer note 36.
158
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
25 Other income
For the year ended For the year ended
31 March, 2017 31 March, 2016
a) Interest income
Interest Income on bank deposits carried at amortised cost 21.43 22.79
Interest income on security deposits carried at amortised cost 17.57 52.31
b) Dividend income
Dividend on current investment in mutual fund carried at FVTPL 566.07 22.76
Dividend from equity instruments measured at FVTOCI 1.62 1.35
c) Other non-operating income
Insurance claim 16.69 33.39
Rental income 111.72 80.65
Miscellaneous income 315.71 249.41
d) Other gains and losses
Profit on disposal of property, plant and equipment - 3.40
Total 1,050.81 466.06
30 Finance costs
For the year ended For the year ended
31 March, 2017 31 March, 2016
Interest on bank overdrafts and loans 266.63 791.62
Total 266.63 791.62
32 Other expenses
For the year ended For the year ended
31 March, 2017 31 March, 2016
Freight, handling and packing 4,285.11 4,387.53
Changes in excise duty on inventory of finished goods 65.70 (22.27)
Travelling and conveyance 1,053.18 1,043.71
Power and fuel 4,083.70 4,637.31
Brand equity contribution 197.12 180.02
Repairs and maintenance
Plant and equipment 679.60 737.44
Property 165.14 183.45
Others 367.05 382.64
Stores and spares consumed 463.22 483.11
Rates and taxes 686.47 440.12
Commission 44.94 106.16
Insurance charges 238.13 221.29
Rent 1,533.75 1,465.35
Bank charges 182.31 234.99
Director fees & commission 392.50 393.90
Provision for doubtful debt (net) 28.25 134.34
Loss on sale of fixed asset (net) 70.18 -
Selling expenses 2,593.62 2,339.66
Legal and professional fees 909.92 729.87
Net loss on foreign currency transactions and translation 354.82 490.36
Other expenses (refer note 43) 5,737.12 5,661.82
Total 24,131.83 24,230.80
160
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` 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 (2015-16 ` 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.
161
RALLIS
Particulars As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Segment liabilities
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
The Company’s revenue from continuing operations from external customers by location of operations and information about its
non-current assets* by location of assets are detailed below:
Particulars Revenue from external customers Non-current assets*
162
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
Profit for the year used in the calculation of basic/diluted earnings per share 26,603.40 12,616.21
Weighted average number of equity shares for basic/diluted earnings per share 19,44,68,890 19,44,68,890
35 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 is ` 620.61 lac (Previous Year ` 605.09 lac) net of amount recovered from employees
` 16.73 lac (Previous Year ` 26.73 lac). Disclosures in respect of non-cancellable leases are given below:
Particulars As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Later than 1 year and not later than 5 years 864.43 782.05 538.55
163
RALLIS
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.
164
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` 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.
Particulars For the year ended For the year ended For the year ended
31 March, 2017 31 March, 2016 31 March 2015
Discount rates 7.29% p.a. 8.04% p.a. 7.97% p.a.
Expected rate of salary increase 8.00% p.a. 8.00% p.a. 8.00% p.a.
Average longevity at retirement age for current beneficiaries of 8.86 Years 8.54 Years 8.91 Years
the plan (years)*
Average longevity at retirement age for current employees (future 15 Years 15 Years 14 Years
beneficiaries of the plan) (years)
Based on Indian standard mortality table with modification to reflect expected changes in mortality.
Amount recognised in Statement of Profit and Loss in respect of these defined benefit plans are as follows
Particulars For the year ended For the year ended
31 March, 2017 31 March, 2016
Service cost:
Current service cost 206.25 185.72
Net interest expense 149.68 158.37
Components of defined benefit costs recognised in profit or loss 355.93 344.09
Remeasurement on the net defined benefit liability:
Return on plan assets (excluding amounts included in net interest expense) (83.15) (25.38)
Actuarial (gain)/losses arising from changes in demographic assumptions - 5.90
Actuarial (gain)/loss arising from changes in financial assumptions 240.30 (21.07)
Actuarial (gain)/losses arising from experience adjustments (93.88) (1.18)
Components of defined benefit costs recognised in Other Comprehensive 63.27 (41.73)
Income
Total 419.20 302.36
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
165
RALLIS
The amount included in the Balance Sheet arising from the entity’s obligation in respect of its defined benefit plan is as follows:
Particulars As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Net liability arising from defined benefit obligation 1,960.37 1,861.67 1,987.00
Movements in the present value of the defined benefit obligation are as follows:
Particulars As at As at
31 March, 2017 31 March, 2016
Opening defined benefit obligation 3,871.80 3,690.26
Current service cost 206.25 185.72
Interest cost 311.29 294.12
Remeasurement (gain)/loss:
Actuarial (gain)/loss arising from changes in demographic assumptions - 5.90
Actuarial (gain)/loss arising from changes in financial assumptions 240.30 (21.07)
Actuarial (gain)/loss arising from experience adjustments (93.88) (1.18)
Benefits paid (299.25) (281.95)
Closing defined benefit obligation 4,236.51 3,871.80
The plan assets are managed by the Gratuity Trust formed by the Company. The management of funds is entrusted with the Life
Insurance Corporations of India (“LIC”) and HDFC Standard Life Insurance Company Limited (“HSLIC”)
166
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
The fair value of the plan assets at the end of the reporting period for each category, are as follow:
Particulars As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
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
1. If the discounting rate is 100 basis point higher (lower), the defined benefit obligation would decrease by ` 315.12 lac
(increase by ` 362.08 lac) (as at 31 March, 2016: decrease by ` 280.31 lac (increase by ` 321.27 lac)) (as at 1 April, 2015 : decrease by
` 274.46 lac (increase by ` 315.14 lac)).
2. If the expected salary growth increases (decreases) by 1%, the defined benefit obligation would increase by ` 235.13 lac
(decrease by ` 207.85 lac) (as at 31 March, 2016: increase ` 201.94 lac (decrease by ` 178.76 lac)) ( as at 1 April, 2015 : increase by
` 189.64 lac (decrease by ` 167.62 lac)).
3. If the life expectancy increases (decreases) by 1 year, the defined benefit obligation would increase by ` 41.03 lac (decrease by
` 41.55 lac) (as at 31 March, 2016: increase ` 36.96 lac (decrease by ` 37.58 lac)) ( as at 1 April, 2015 : increase by ` 36.95 lac (decrease
by ` 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.
167
RALLIS
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 recognised 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 of ` 222.05 lac (as at 31 March, 2016 ` 168.50 lac, as at 1 April, 2015 ` 280.01 lac) to the
defined benefit plans during the next financial year.
The defined benefit obligations shall mature after year ended 31 March, 2017 as follows:
Particulars Defined benefit obligation
As at 31 March
2018 367.78
2019 240.33
2020 267.01
2021 348.41
2022 343.93
Thereafter 1,951.06
37 Financial instruments
Capital management
The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising 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.
Gearing ratio
The gearing ratio at the end of the reporting period was as follows
Particulars As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
(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.
168
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
Financial assets
(a) Investment in equity instruments designated upon initial 1,870.06 1,869.68 1,869.67
recognition
Financial liabilities
169
RALLIS
The following table provides the fair value measurement hierarchy of the Company’s financial assets that are measured at fair
value or where fair value disclosure is required as at 31 March, 2016:
There have been no transfers amount Level 1, Level 2 and Level 3 during the year.
The following table provides the fair value measurement hierarchy of the Company’s financial assets that are measured at fair
value or where fair value disclosure is required as at 1 April, 2015:
There have been no transfers amount Level 1, Level 2 and Level 3 during the year.
Reconciliation of fair value measurement of investment in unquoted equity instrument classified as FVTOCI (Level 3):
Particulars As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Opening balance 40.70 40.70 40.70
Remeasurement recognised in OCI - - -
Purchases - - -
Sales - - -
Closing balance 40.70 40.70 40.70
The Company determined the fair value measurements of investment - unquoted categorised in Level 2 based on price agreed in
a sale transaction between unrelated parties.
170
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
As at As at As at As at As at As at
31 March, 31 March, 1 April, 2015 31 March, 31 March, 1 April, 2015
2017 2016 2017 2016
As at As at As at As at As at As at
31 March, 31 March, 1 April, 2015 31 March, 31 March, 1 April, 2015
2017 2016 2017 2016
171
RALLIS
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.
172
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
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.
The following forward exchange contracts are outstanding as at balance sheet date:
As at As at As at
31 March, 2017 31 March, 2016 31 March, 2015
Particulars Number of ` lac Foreign Number of ` lac Foreign Number of ` lac Foreign
contracts currency contracts currency contracts currency
in lac in lac in lac
Payable 2 649.91 JPY 1,120.50 2 1,405.30 JPY 2,532.00 3 404.49 JPY 776.00
173
RALLIS
As at 31 March, 2016
Borrowings 1,487.84 981.53 1,125.60 3,594.97 3,594.97
Other financial liabilities at amortised cost 26,395.79 - - 26,395.79 26,395.79
27,883.63 981.53 1,125.60 29,990.76 29,990.76
As at 1 April, 2015
Borrowings 5,593.34 1,385.88 558.69 7,537.91 7,537.91
Other financial liabilities at amortised cost 7,537.91 - - 7,537.91 7,537.91
13,131.25 1,385.88 558.69 15,075.82 15,075.82
2. Trading transactions
During the year, Company entered into following trading transactions with related parties:
Sales of goods Purchases of goods
Particulars For the year ended For the year ended For the year ended For the year ended
31 March, 2017 31 March, 2016 31 March, 2017 31 March, 2016
Holding Company
Tata Chemicals Ltd. 1,443.03 2474.33 574.17 579.49
Subsidiary of Tata Sons Ltd.
Tata Africa Services (Nigeria) Ltd. 564.04 158.64 - -
Subsidiaries of the Company
Metahelix Life Science Ltd. 139.57 201.88 732.71 982.44
Zero Waste Agro Organics Ltd. - - 775.96 1,145.61
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.
174
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
3. Service transactions
Holding Company
175
RALLIS
The following balances were outstanding at the end of the reporting period:
As at As at As at As at As at As at
31 March, 31 March, 1 April, 31 March, 31 March, 1 April,
2017 2016 2015 2017 2016 2015
Holding Company
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 recognised 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 of `
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 of ` 4,560.30 lac as at 31 March, 2017 (as at 31 March, 2016: ` 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 abscence.
176
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
39 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 of
` 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 of ` 4,560.30 lac as at 31 March, 2017 (as at 31 March, 2016: ` Nil, as
at 1 April, 2015: ` Nil).
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:
As at As at As at
Nature of tax
31 March, 2017 31 March, 2016 1 April, 2015
Sales tax 1,950.30 1,868.71 1,836.30
Excise duty 433.03 369.31 360.84
Customs duty 144.10 144.10 144.10
Income tax 6,619.06 6,764.94 6,904.98
Service tax 90.81 81.06 113.06
Property cases 47.36 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.
Amount in respect of other claims
As at As at As at
Nature of claim
31 March, 2017 31 March, 2016 1 April, 2015
Matters relating to employee benefits 103.11 103.11 103.26
Others (claims related to contractual disputes) 55.07 55.07 68.50
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.
177
RALLIS
40 Commitments
i) Estimated amount of contracts remaining to be executed on capital account of property, plant and equipment is ` 301.15 lac as at
31 March, 2017 (as at 31 March, 2016: ` 298.55 lac, as at1 April, 2015: ` 774.96 lac) and Intangible assets is ` 48.28 lac as at 31 March,
2017 (as at 31 March, 2016: ` 105.00 lac, as at 1 April, 2015: ` 274.27 lac) against which advances paid aggregate ` 84.59 lac as at 31
March, 2017 (as at 31 March, 2016: ` 232.32 lac, as at 1 April, 2015: ` 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 of ` 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 of ` 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 of ` 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 to ` 9,778.19 lac
against which the Company was entitled to be reimbursed of ` 4,400.19 lac.
v) For lease commitments refer note no 35.
During the year the Company has also incurred ₹ 102.92 lac (Previous Year ₹ 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 ₹ 1,113.77 lac (as at 31 March, 2016 ₹ 1,092.25 lac, as at 1 April, 2015 ₹ 665.86 lac).
footnote:
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).
178
Notes to the financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
42 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 ₹ 193.82 lac (as at 31 March, 2016 ₹ 193.82 lac,
as at ₹ 1 April, 2015 193.82 lac). The movement during the year is as under:
As at As at As at
Particulars
31 March, 2017 31 March, 2016 1 April, 2015
Opening Balance as at 1 April 193.82 193.82 193.82
Additional provisions made during the year - - -
Total 193.82 193.82 193.82
Payments made adjusted against above sum - - -
Closing Balance as at 31 March 193.82 193.82 193.82
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.
43 Other expenses include Auditors’ Remuneration as under:
Particulars For the year ended For the year ended
31 March, 2017 31 March, 2016
(a) To statutory auditors
For audit 75.20 55.20
For taxation matters 23.00 50.00
For other services * 95.35 62.50
Reimbursement of expenses 3.22 1.46
Service tax which is being claimed for set-off as input credit has not been included in the expenditure above.
*excludes ` 4.00 lac (Previous Year ` 33.00 lac) paid to network firms.
44 Trade payable includes amount payable to Micro, Small and Medium Enterprises as follows
Particulars As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
(i) Principal amount remaining unpaid to any supplier as at the end of the
783.92 433.73 701.28
accounting year*
(ii) Interest due thereon remaining unpaid to any supplier as at the end of the
- - 0.22
accounting year
(iii) the amount of interest paid by the buyer in terms of section 16 of the Micro,
Small and Medium Enterprises Development Act, 2006, along with the amount
0.01 0.34 0.12
of the payment made to the supplier beyond the appointed day during each
accounting year
(iv) The amount of interest due and payable for the year 0.01 0.12 0.34
(v) the amount of further interest remaining due and payable even in the
succeeding years, until such date when the interest dues above are actually
paid to the small enterprise, for the purpose of disallowance of a deductible - - -
expenditure under section 23 of the Micro, Small and Medium Enterprises
Development Act, 2006.
* out of above amount overdue is ₹ Nil (Previous year: ₹ 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.
179
RALLIS
45 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 ₹ 391.00 lac (Previous Year ₹ 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.
Particulars For the For the
year ended year ended
31 March, 2017 31 March, 2016
Employee benefits expense 19.70 19.40
Other expenses ( for healthcare, education, women 375.65 379.32
empowerment, skill development , disaster relief, etc.)
395.35 398.72
46 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
December, 2016, the denomination wise SBNs and other notes as per the notification is given below:
SBNs Other Demonetisation Total
Particulars
Notes
Closing Cash in Hand as on 8 November, 2016* 4.68 1.41 6.09
(+) Permitted receipts - 9.28 9.28
(-) Permitted payments - 8.16 8.16
(-) Amount deposited in Banks 4.68 0.01 4.69
Closing Cash in Hand as on 30 December, 2016 - 2.52 2.52
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 of ` 2.25 lac relates to SBN, held by employees as at 8 November, 2016 which was
accounted and deposited on 19 November, 2016.
47 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.
48 Subsequent event
The Board of Directors at its meeting held on 24 April, 2017 has recommended a dividend of ` 2.50 per equity share. The Board
has also recommended a one-time special dividend of ` 1.25 per equity share, out of the profit on assignment of leasehold rights
in the Turbhe land.
180
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
CONSOLIDATED
FINANCIAL STATEMENTS
181
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
We have audited the accompanying consolidated Ind AS financial statements of Rallis India Limited (hereinafter referred to as the
“Parent”) and its subsidiaries (the Parent and its subsidiaries together referred to as the “Group”), comprising the Consolidated
Balance Sheet as at 31 March, 2017, the Consolidated Statement of Profit and Loss including other comprehensive income, the
Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, for the year then ended, and a summary
of the significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated Ind AS
financial statements”)
The Parent’s Board of Directors is responsible for the preparation of these consolidated Ind AS financial statements in terms of the
requirements of the Companies Act, 2013 (hereinafter referred to as the “Act”) that give a true and fair view of the consolidated
financial position, consolidated financial performance including other comprehensive income, consolidated statement of cash
flows and consolidated statement of changes in equity of the Group in accordance with the accounting principles generally
accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act. The respective
Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and
other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are
reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due
to fraud or error, which have been used for the purpose of preparation of the consolidated Ind AS financial statements by the
Directors of the Parent, as aforesaid.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated Ind AS financial statements based on our audit. In conducting our
audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required
to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards
require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether
the consolidated Ind AS financial statements are free from material misstatement.
183
183
RALLIS
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated
Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks
of material misstatement of the consolidated Ind AS financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant to the Parent’s preparation of the consolidated Ind AS
financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting
estimates made by the Parent’s Board of Directors, as well as evaluating the overall presentation of the consolidated Ind AS
financial statements.
We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports
referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit
opinion on the consolidated Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of
reports of the other auditors on separate financial statements of the subsidiaries referred to below in the Other Matters paragraph,
the aforesaid consolidated Ind AS financial statements give the information required by the Act in the manner so required and give
a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of
the Group as at 31 March, 2017, and their consolidated profit, consolidated total comprehensive income, their consolidated cash
flows and consolidated statement of changes in equity for the year ended on that date.
Other Matters
(a) We did not audit the financial statements of two subsidiaries, whose financial statements reflect total assets of ₹ 1,378.36
lac as at 31 March, 2017, total revenues of ₹ 70.30 lac and net cash inflows amounting to ₹ 3.74 lac for the year ended on
that date, as considered in the consolidated Ind AS financial statements. These financial statements have been audited by
other auditors whose reports have been furnished to us by the management and our opinion on the consolidated Ind AS
financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, and our
report in terms of sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries is based solely
on the reports of the other auditors.
(b) The comparative financial information for the year ended 31 March, 2016 and the transition date opening balance sheet
as at 1 April, 2015 in respect of two subsidiaries included in this consolidated Ind AS financial statements prepared in
accordance with the Ind AS have been audited by other auditors and have been relied upon by us.
Our opinion on the consolidated Ind AS financial statements above, and our report on Other Legal and Regulatory
Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and
the reports of the other auditors.
184
184
Report on Other Legal and Regulatory Requirements
As required by Section 143(3) of the Act, based on our audit and on the consideration of the report of the other auditors
on separate financial statements of subsidiaries referred in the Other Matters paragraph above we report, to the extent
applicable, that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purposes of our audit of the aforesaid consolidated Ind AS financial statements.
(b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated Ind AS
financial statements have been kept so far as it appears from our examination of those books and the reports of the other
auditors.
(c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss (including Other Comprehensive Income),
the Consolidated Statement of Cash Flows and Consolidated Statement of Changes in Equity dealt with by this Report are
in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated Ind AS
financial statements
(d) In our opinion, the aforesaid consolidated Ind AS financial statements comply with the Indian Accounting Standards
prescribed under Section 133 of the Act.
(e) On the basis of the written representations received from the directors of the Parent as on 31 March, 2017 taken on record
by the Board of Directors of the Parent and the reports of the statutory auditors of its subsidiary companies, none of the
directors of the Group companies is disqualified as on 31 March, 2017 from being appointed as a director in terms of
Section 164(2) of the Act.
(f ) With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of
such controls, refer to our separate Report in “Annexure A”, which is based on the auditors’ reports of the Holding company
and subsidiary companies. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of
the Parent and subsidiary company’s internal financial controls over financial reporting.
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies
(Audit and Auditor’s) Rules, 2014, as amended, in our opinion and to the best of our information and according to the
explanations given to us:
i. The consolidated Ind AS financial statements disclose the impact of pending litigations on the consolidated financial
position of the Group.
ii. The Group did not have any material foreseeable losses on long-term contracts including derivative contracts.
iii. There has been no delay in transferring amounts required to be transferred, to the Investor Education and Protection
Fund by the Parent and its subsidiary companies except in cases wherein disputes relating to the ownership of the
underlying shares have remained unresolved.
185
185
RALLIS
iv. The Parent has provided requisite disclosures in the consolidated Ind AS financial statements as regards the holding
and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8th November, 2016 of the
Ministry of Finance, during the period from 8th November, 2016 to 30th December, 2016 of the Group entities as
applicable. Based on audit procedures performed and the representations provided to us by the management we
report that the disclosures are in accordance with the relevant books of accounts maintained by those entities for the
purpose of preparation of the consolidated Ind AS financial statements and as produced to us and other auditors by
the managements of the respective Group entities.
Sanjiv V. Pilgaonkar
Partner
(Membership No.039826)
Place: Mumbai
Date: 24 April, 2017
186
ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph (f) under ‘Report on Other Legal and Regulatory Requirements’
section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i)
of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
In conjunction with our audit of the consolidated Ind AS financial statements of the Company as of and for the year ended
31 March, 2017, we have audited the internal financial controls over financial reporting of Rallis India Limited (hereinafter
referred to as the “Parent”) and its subsidiary companies, which are companies incorporated in India, as of that date.
The respective Board of Directors of the Parent and its subsidiary companies, which are companies incorporated in India, are
responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria
established by the respective Companies considering the essential components of internal control stated in the Guidance Note
on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These
responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating
effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies,
the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting
records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Parent and its subsidiary
companies which are companies incorporated in India, based on our audit. We conducted our audit in accordance with the
Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of
Chartered Accountants of India and the Standards on Auditing, prescribed under Section 143(10) of the Companies Act, 2013, to
the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial
controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system
over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The
procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error.
187
RALLIS
We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors of the subsidiary
companies, which are companies incorporated in India, in terms of their reports referred to in the Other Matters paragraph
below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial
reporting of the Parent and its subsidiary companies, which are companies incorporated in India.
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal financial control over financial reporting includes
those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection
of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or
improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also,
projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk
that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion to the best of our information and according to the explanations given to us and based on the consideration of
the reports of the other auditors referred to in the Other Matters paragraph below, the Parent and its subsidiary companies, which
are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial
reporting and such internal financial controls over financial reporting were operating effectively as at 31 March, 2017, based on the
internal control over financial reporting criteria established by the respective companies considering the essential components of
internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute
of Chartered Accountants of India.
188
Other Matters
Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial
controls over financial reporting insofar as it relates to two subsidiary companies, which are companies incorporated in India, is
based solely on the corresponding reports of the auditors of such companies incorporated in India.
Sanjiv V. Pilgaonkar
Partner
(Membership No.039826)
Place: Mumbai
Date: 24 April, 2017
189
RALLIS
Current Assets
a) Inventories 10 39,437.56 40,271.17 39,247.55
b) Financial assets
i) Investments 7 22,052.25 941.95 552.07
ii) Trade receivables 11 25,957.93 22,784.36 27,091.57
iii) Cash and cash equivalents 12.1 523.27 277.30 151.86
iv) Bank balances other than (iii) above 12.2 466.05 490.99 564.79
iv) Other financial assets 8 73.76 118.64 199.18
c) Other current assets 13 6,363.93 6,312.37 4,964.96
94,874.75 71,196.78 72,771.98
Liabilities
Non-current liabilities
a) Financial liabilities - long term borrowings 17 2,439.93 2,620.28 2,680.70
b) Other financial liabilities 19 562.59 481.89 403.91
c) Provisions 20 1,764.27 1,694.92 1,839.91
d) Deferred tax liabilities (net) 21 4,982.42 3,579.25 3,251.91
Total non-current liabilities 9,749.21 8,376.34 8,176.43
Current liabilities
a) Financial liabilities
i) Short term borrowings 18 1,248.85 4,857.86 8,373.76
ii) Trade payables 22 33,019.31 27,369.78 28,643.45
iii) Other financial liabilities 19 7,328.34 9,490.94 8,281.70
b) Provisions 20 1,076.08 965.81 875.45
c) Current tax liabilities (net) 9 389.93 611.13 1,552.19
d) Other current liabilities 23 8,883.61 8,374.99 6,816.43
Total current liabilities 51,946.12 51,670.51 54,542.98
Total liabilities 61,695.33 60,046.85 62,719.41
Total equity and liabilities 172,854.81 149,264.60 148,053.06
See accompanying notes to the financial statements
In terms of our report attached
For and on behalf of the Board of Directors
PRAKASH R. RASTOGI BHASKAR BHAT Chairman
For DELOITTE HASKINS & SELLS LLP
BHARAT VASANI
Chartered Accountants V. SHANKAR Managing Director &
R. MUKUNDAN
Chief Executive Officer
SANJIV V. PILGAONKAR Y.S.P. THORAT Directors
Partner PUNITA KUMAR-SINHA ASHISH MEHTA Chief Financial Officer
C.V. NATRAJ
P. S. MEHERHOMJI Company Secretary
Mumbai, 24 April, 2017 PADMINI KHARE KAICKER
190
All amounts are in ` lac unless otherwise stated
CONSOLIDATED STATEMENT OF
PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2017
For the year For the year
Notes ended ended
31 March, 2017 31 March, 2016
I Revenue from operations 24 178,298.26 162,779.56
II Other income 25 1,279.32 1,427.57
III Total Income (I+II) 179,577.58 164,207.13
IV EXPENSES
Cost of materials consumed 26 81,096.92 77,618.01
Purchases of stock in trade 27 10,996.48 9,800.04
Changes in inventories of finished goods, stock in trade and work-in-progress 28 2,948.79 (1,553.01)
Excise duty on sale of goods 10,467.88 9,867.97
Employee benefits expense 29 14,639.59 13,261.88
Finance costs 30 729.67 1,359.04
Depreciation and amortisation expense 31 4,730.92 4,361.02
Other expenses 32 31,811.94 30,881.01
Total expense (IV) 157,422.19 145,595.96
V Profit before exceptional items and tax (III -IV) 22,155.39 18,611.17
VI Exceptional items 47 15,839.16 -
VII Profit before tax (V+VI) 37,994.55 18,611.17
VIII Tax expense 9
(1) Current tax expense 8,389.77 3,957.94
(2) Deferred tax (102.19) (55.66)
Total tax expense 8,287.58 3,902.28
IX Profit for the year (VII-VIII) 29,706.97 14,708.89
191
RALLIS
192
All amounts are in ` lac unless otherwise stated
193
RALLIS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH, 2017
Attributable to the equity holders of the parent
Non-
Issued Securities Capital Equity controlling Total
capital premium Retained Capital redemption General instrument Total
earnings reserve reserve interests
reserve reserve through OCI
As at 1 April, 2015 1,944.71 8,793.88 47,802.43 1,243.10 8,151.77 16,389.73 - 82,380.91 1,008.03 85,333.65
Profit for the period - - 14,339.03 - - 1,260.20 - 15,599.23 369.86 15,969.09
Other comprehensive - - 10.41 - - - 0 .01 10.42 - 10.42
income
194
Notes to the Consolidated Financial Statements for the year ended 31 March, 2017
1. Corporate Information
Rallis India Limited (the ‘’Company’’) is a public limited company domiciled in India and is incorporated under the provisions
of the Companies Act applicable in India. Its parent and ultimate holding company is Tata Chemicals Limited. The principal
activities of the Company and its subsidiaries (hereinafter referred to as the “Group”) is manufacture and marketing of Agri
Inputs.
The Company’s registered office is at 156/157, 15th Floor, Nariman Bhavan, 227 Nariman Point, Mumbai 400 021.
The financial statements for the year ended 31 March, 2017 were approved by the Board of Directors and authorised for issue
on 24 April, 2017.
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments)
Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of Cash Flows’ and Ind AS 102, ‘Share-based Payment. ’ These
amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB)
to IAS 7, ‘Statement of Cash Flows’ and IFRS 2, ‘Share-based payment,’ respectively. The amendments are applicable from
1 April, 2017.
Amendment to Ind AS 7:
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate
changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes,
suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising
from financing activities, to meet the disclosure requirement.
The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.
The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled
awards and awards that include a net settlement feature in respect of withholding taxes.
It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled
awards. Market-based performance conditions and non-vesting conditions are reflected in the ‘fair values’, but non-market
performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest.
Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified
with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such
from the date of the modification. Further, the amendment requires the award that include a net settlement feature in respect
of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated as if it was
part of an equity settlement.
The requirements of the amendment have no impact on the financial statements as the standard is not applicable to the
Group.
195
RALLIS
These consolidated financial statements of the Group have been prepared in accordance with Indian Accounting Standards
notified under the Companies (Indian Accounting Standards) Rules, 2015 (“Ind AS”).
Up to the year ended 31 March, 2016, the Group prepared its financial statements in accordance with generally accepted
accounting principles in the India, including accounting standards read with section 133 of the Companies Act, 2013
notified under Companies (Accounting Standards) Rules, 2006 (“Previous GAAP”). These are the Group’s first Ind AS financial
statements. The date of transition to Ind AS is 1 April, 2015. Refer note 4 for the details of first time adoption exemptions
availed by the Group.
The consolidated financial statements have been prepared on the historical cost basis, except for certain financial instruments
which are measured at fair values at the end of each reporting period. Historical cost is generally based on the fair value of the
consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of whether that price is directly observable or estimated using
another valuation technique.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in
its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly
or indirectly observable
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
The consolidated financial statements incorporate the financial statements of the Company and entities (including structured
entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:
• is exposed, or has rights, to variable returns from its involvement with the investee; and
196
Notes to the Consolidated Financial Statements for the year ended 31 March, 2017
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control listed above. When the Company has less than a majority of the voting rights of an
investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant
activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not
the Company’s voting rights in an investee are sufficient to give it power, including:
• the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
• potential voting rights held by the Company, other vote holders or other parties;
• rights arising from other contractual arrangements; and
• any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct
the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’
meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company
loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are
included in the Consolidated Statement of Profit and Loss from the date the Company gains control until the date when the
Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the
non-controlling interests. Total comprehensive income •of subsidiaries is attributed to the owners of the Company and to the
non-controlling interests even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line
with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses, and cash flows relating to transactions between members of the
Group are eliminated in full on consolidation.
197
RALLIS
as capital reserve. This gain is attributed to the acquirer. If there does not exist clear evidence of the underlying reasons for
classifying the business combination as a bargain purchase, the Group recognises the gain, after reassessing and reviewing (as
described above), directly in equity as capital reserve.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the
entity’s net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests’
proportionate share of the recognised amounts of the acquiree’s identifiable net assets. The choice of measurement basis
is made on a transaction-by transaction basis. Other types of non-controlling interests are measured at fair value or, when
applicable, on the basis specified in another Ind AS.
When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a
contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and
included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent
consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments
against goodwill or capital reserve, as the case maybe. Measurement period adjustments are adjustments that arise from
additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date)
about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement
period adjustments depends on how the contingent consideration is classified.
Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent
settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at
fair value at subsequent reporting dates with the corresponding gain or loss being recognised in profit or loss.
When a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is remeasured
to its acquisition-date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from
interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income
are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed off.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination
occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts
are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new
information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected
the amounts recognised at that date.
3.5 Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less
accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of cash-
generating units) that is expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there
is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying
amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to
the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill
is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
198
Notes to the Consolidated Financial Statements for the year ended 31 March, 2017
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the
profit or loss on disposal.
199
RALLIS
Capital work-in-progress/intangible assets under development are carried at cost, comprising direct cost, related incidental
expenses and attributable borrowing cost.
Financial assets and liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument.
Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition
200
Notes to the Consolidated Financial Statements for the year ended 31 March, 2017
or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit
or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability.
The Group considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that
are subject to an insignificant risk of change in value and having original maturities of three months or less from the date
of purchase, to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for
withdrawal and usage.
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose
objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a
business whose objective is achieved by both collecting contractual cash flows that give rise on specified dates to solely
payments of principal and interest on the principal amount outstanding and by selling financial assets.
The Group has made an irrevocable election to present subsequent changes in the fair value of equity investments not held
for trading in Other Comprehensive Income.
Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through
other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial
assets and liabilities at fair value through profit or loss are immediately recognised in profit or loss.
Financial liabilities
Financial liabilities are measured at amortised cost using the effective interest method.
Equity instruments
An equity instrument is a contract that evidences residual interest in the assets of the Group after deducting all of its liabilities.
Equity instruments recognised by the Group are measured at the proceeds received net off direct issue cost.
Financial assets and financial liabilities are offset and the net amount is reported in Consolidated Financial Statements if there
is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to
realise the assets and settle the liabilities simultaneously.
The Group enters into certain derivative contracts to hedge risks which are not designated as hedges. Such contracts are
accounted for at fair value through profit or loss and are included in other gains/ (losses).
201
RALLIS
3.12 Impairment
The Group assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised
cost and FVTOCI debt instruments. The impairment methodology applied depends on whether there has been a significant
increase in credit risk.
For trade receivables only, the Group applies the simplified approach permitted by Ind AS 109 Financial Instruments, which
requires expected lifetime losses to be recognised from initial recognition of the receivables.
Property, plant and equipment and intangible assets with finite life are evaluated for recoverability whenever there is any
indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e.
higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does
not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is
determined for the cash generating unit (CGU) to which the asset belongs.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of
the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the Statement of Profit and
Loss.
3.13 Inventories
Inventories are valued at lower of cost (on weighted average basis) and net realisable value after providing for obsolescence
and other losses, where considered necessary. Cost includes all charges in bringing the goods to their present location
and condition, including octroi and other levies, transit insurance and receiving charges. Work-in-progress and finished
goods include appropriate proportion of overheads and, where applicable, excise duty. Net realisable value is the estimated
selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to
make the sale.
Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer
returns, rebates and other similar allowances.
Revenue from the sale of goods is recognised when the goods are delivered and titles have passed, at which time all the
following conditions are satisfied:
• the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
• the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor
effective control over the goods sold;
• it is probable that the economic benefits associated with the transaction will flow to the Group; and
• the costs incurred or to be incurred in respect of the transaction can be measured reliably.
202
Notes to the Consolidated Financial Statements for the year ended 31 March, 2017
Income recognition for services takes place as and when the services are performed.
Interest income from financial assets is recognised when it is probable that economic benefits will flow to the Group and
the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial assets to that asset’s net carrying amount on initial recognition.
3.14.4 Dividend
Dividend income from investments is recognised when the shareholder’s right to receive payment has been established
(provided that it is probable that the economic benefits will flow to the Group and the amount of income can be measured
reliably).
Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that there is no
uncertainty in receiving the claims.
Royalty revenue is recognised on an accrual basis (provided that it is probable that the economic benefits will flow to the
Group and the amount of revenue can be measured reliably). Such arrangements are based on sales made by the licensee and
are recognised by reference to the compensation terms under the underlying arrangement.
Research expenditure is charged to the Statement of Profit and Loss. Development costs of products are also charged to the
Statement of Profit and Loss unless a product’s technical feasibility has been established, in which case such expenditure is
capitalised. Tangible assets used in research and development are capitalised.
3.16 Leases
Leases are classified as finance leases whenever the terms of lease transfer substantially all the risks and rewards of ownership
to the lessee. Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified
as operating leases.
Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over
the lease term except where another systematic basis is more representative of the time pattern in which economic
benefits from leased assets are consumed. The aggregate benefit of incentives (excluding inflationary increases where
rentals are structured solely to increase in line with the expected general inflation to compensate for the lessor’s
inflationary cost increases, such increases are recognised in the year in which the benefits accrue) provided by the lessor
is recognised as a reduction of rental expense over the lease term on a straight-line basis.
203
RALLIS
Assets held under finance leases are initially recognised as assets of the Group at their fair value at the inception of
the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is
included in the Balance Sheet as a finance lease obligation.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets
or, where shorter, the term of the relevant lease. Lease payments are apportioned between finance expenses and
reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets,
in which case they are capitalised in accordance with the Group’s general policy on borrowing costs. Contingent rentals
are recognised as expenses in the periods in which they are incurred.
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset (or
disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary
for sales of such asset (or disposal group) and its sale is highly probable. Management must be committed to the sale, which
should be expected to qualify for recognition as a completed sale within one year from the date of classification.
When the Group is committed to a sale plan involving disposal of an investment, the investment that will be disposed of is
classified as held for sale when the criteria described above are met.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying amount and fair
value less costs to sell.
Employee benefits consist of contribution to provident fund, superannuation fund, gratuity fund, compensated absences and
supplemental pay.
Payments to defined contribution retirement benefit scheme for eligible employees in the form of superannuation fund are
charged as an expense as they fall due. Such benefits are classified as defined contribution schemes as the Group does not
carry any further obligations, apart from the contributions made.
The Group also makes provident fund contributions to defined contribution retirement benefit plans for eligible employees.
Under the scheme, the Group 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 Group in case of certain locations
and government authorities (PF commissioner) at other locations. The Group 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 recognises, if any, as an expense in the year it is determined.
The Group operates various defined benefit plans- gratuity fund and supplemental pay.
204
Notes to the Consolidated Financial Statements for the year ended 31 March, 2017
The liability or asset recognised in the balance sheet in respect of its defined benefit plans is the present value of the defined
benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is
calculated annually by actuaries using the projected unit credit method.
The present value of the said obligation is determined by discounting the estimated future cash outflows, using market yields
of government bonds that have tenure approximating the tenures of the related liability.
The interest income / (expense) are calculated by applying the discount rate to the net defined benefit liability or asset. The net
interest income / (expense) on the net defined benefit liability or asset is recognised in the Statement of Profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised
in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the
Statement of Changes in Equity and in the Balance Sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised
immediately in profit or loss as past service cost.
Compensated absences which accrue to employees and which can be carried to future periods but are expected to be
encashed or availed in twelve months immediately following the year end are reported as expenses during the year in which
the employees perform the services that the benefit covers and the liabilities are reported at the undiscounted amount of
the benefits after deducting amounts already paid. Where there are restrictions on availment of encashment of such accrued
benefit or where the availment or encashment is otherwise not expected to wholly occur in the next twelve months, the
liability on account of the benefit is actuarially determined using the projected unit credit method.
Borrowing costs are interest and ancillary costs incurred in connection with the arrangement of borrowings. General and
specific borrowing costs attributable to acquisition and construction of any qualifying asset (one that takes a substantial
period of time to get ready for its designated use or sale) are capitalised until such time as the assets are substantially ready
for their intended use or sale, and included as part of the cost of that asset. Investment income earned on the temporary
investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs
eligible for capitalisation. All the other borrowing costs are recognised in the Statement of Profit and Loss within Finance costs
of the period in which they are incurred.
Operating segments are defined as components of an enterprise for which discrete financial information is available that is
evaluated regularly by the chief operating decision maker, in deciding how to allocate resources and assessing performance.
The Group’s chief operating decision maker is the Managing Director & CEO.
Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of
their relationship to the operating activities of the segment. Inter segment revenue is accounted on the basis of transactions
which are primarily determined based on market / fair value factors. Revenue, expenses, assets and liabilities which relate to
the Group as a whole and are not allocable to segments on a reasonable basis have been included under “unallocated revenue
/ expenses / assets / liabilities”.
205
RALLIS
Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year.
Current and deferred taxes are recognised in Statement of Profit and Loss, except when they relate to items that are recognised
in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other
comprehensive income or directly in equity, respectively.
Current tax
Current tax is measured at the amount of tax expected to be payable on the taxable income for the year as determined in
accordance with the provisions of the Income Tax Act, 1961.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts
and there is an intention to settle the asset and the liability on a net basis.
Deferred tax
Deferred income tax is recognised using the Balance Sheet approach. Deferred income tax assets and liabilities are recognised
for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying
amount, except when the deferred income tax arises from the initial recognition of an asset or liability in a transaction that is
not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.
Deferred tax assets are recognised only to the extent that it is probable that either future taxable profits or reversal of deferred
tax liabilities will be available, against which the deductible temporary differences, and the carry forward of unused tax credits
and unused tax losses can be utilised.
The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be
utilised.
Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively
enacted by the end of the reporting period and are expected to apply when the related deferred tax asset is realised or the
deferred tax liability is settled.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority.
Provisions are recognised, when there is a present legal or constructive obligation as a result of past events, where it is probable
that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can
be made. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount
is the present value of those cash flows. Where the effect is material, the provision is discounted to net present value using an
appropriate current market-based pre-tax discount rate and the unwinding of the discount is included in finance costs.
Contingent liabilities are recognised only when there is a possible obligation arising from past events, due to occurrence or
non-occurrence of one or more uncertain future events, not wholly within the control of the Group, or where any present
obligation cannot be measured in terms of future outflow of resources, or where a reliable estimate of the obligation cannot
206
Notes to the Consolidated Financial Statements for the year ended 31 March, 2017
be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are
provided for.
Contingent assets are not disclosed in the Sonsolidated Financial Statements unless an inflow of economic benefits is probable.
Dividend to equity shareholders is recognised as a liability and deducted from shareholders’ Equity, in the period in which the
dividends are approved by the equity shareholders in the general meeting.
Basic EPS is computed by dividing the Profit or loss attributable to the equity shareholders of the Group by the weighted
average number of Ordinary shares outstanding during the year. Diluted EPS is computed by adjusting the profit or loss
attributable to the ordinary equity shareholders and the weighted average number of ordinary equity shares, for the effects of
all dilutive potential Ordinary shares.
The preparation of the Consolidated Financial Statements in conformity with the Ind AS requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities and disclosures as at date of the consolidated 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 Judgements
In the process of applying the Group’s accounting policies, management has made the following judgements, which have the
most significant effect on the amounts recognised in the consolidated financial statements:
Discount rate used to determine the carrying amount of the Group’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.
In the normal course of business, contingent liabilities may arise from litigations and other claims against the Group. 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 Consolidated 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.
207
RALLIS
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:
As described in Note 3, the Group 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.
The Group 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.
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 realisable value. The purpose is to ascertain whether an allowance is required
to be made in the consolidated 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 Consolidated Financial Statements.
In 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 Group had transferred to the buyer the
significant risk and rewards of ownership of the goods. Following the detailed quantification of the Group’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 Group to be reliable estimate of future sales returns.
The Group’s consolidated financial statements for the year ended 31 March, 2017 are the first annual Consolidated Financial
Statements prepared by the Group 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 summarised 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.
208
Notes to the Consolidated Financial Statements for the year ended 31 March, 2017
Reconciliations
The accounting policies as stated above in Note 3 above have been applied in preparing the consolidated financial
statements for the year ended 31 March, 2017, the consolidated 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 Group has adjusted amounts
reported in consolidated financial statements prepared in accordance with Previous GAAP.
An explanation of how the transition from Previous GAAP to Ind AS has affected the Group’s financial position, financial
performance and cash flows is set out in the following tables.
Particulars As at As at
31 March, 2016 31 March, 2015
Equity as per Previous GAAP 90,277.71 82,459.71
Adjustment relating to acquisition - post obtaining control (6,331.79) -
Dividend and tax on dividend 5,851.45 3,500.27
Difference on account of revenue recognition net of related costs (562.72) (608.74)
Capital subsidy (15.85) (17.36)
Others (1.05) (0.23)
Equity as per Ind AS 89,217.75 85,333.65
iii. Explanation of material adjustments to Statement of Cash Flow 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.
209
RALLIS
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Equipment
Cost or Freehold Leasehold Plant and Furniture Office under
Buildings Vehicles Total
deemed cost land improvements equipment and fixtures equipments finance
lease
Balance at 31
431.92 165.11 14,125.22 26,950.23 400.06 21.86 256.19 38.11 42,388.70
March, 2017
210
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
5 Property, plant and equipment and capital work-in-progress (continued)
Equipment
Accumulated Freehold Leasehold Plant and Furniture and Office
Buildings Vehicles under Total
depreciation land improvements equipment fixtures equipments
finance lease
Balance at 1 - - - - - - - - -
April, 2015
Depreciation - 21.88 532.17 2,737.42 93.03 31.67 61.97 - 3,478.14
expense
Eliminated on - - 0.11 22.43 - 24.01 - - 46.55
disposal of assets
Eliminated on - - 7.45 21.03 - - - - 28.48
reclassification
as held for sale
(w.e.f. 31 March,
2016)
Balance at 31 - 21.88 524.61 2,693.96 93.03 7.66 61.97 - 3,403.11
March, 2016
Depreciation - 21.89 676.58 3,021.85 96.37 9.06 86.98 1.06 3,913.79
expense
Eliminated on - - 2.68 52.55 30.18 7.08 3.03 - 95.52
disposal of assets
Balance at 31 - 43.77 1,198.51 5,663.26 159.22 9.64 145.92 1.06 7,221.38
March, 2017
Carrying Equipment
Freehold Leasehold Plant and Furniture and Office
Amount Buildings Vehicles under Total
land improvements equipment fixtures equipments
finance lease
Balance at 1
438.69 165.11 12,910.75 19,442.53 339.53 86.14 154.43 - 33,537.18
April, 2015
Additions - - 566.89 5,156.42 70.18 4.24 34.50 - 5,832.23
Disposals - - 0.34 54.93 - 31.26 0.39 - 86.92
Depreciation
- 21.88 532.17 2,737.42 93.03 31.67 61.97 - 3,478.14
expense
Reclassified as
held for sale
- - 188.57 43.76 - - - - 232.33
(w.e.f. 31 March,
2016)
Balance at 31
438.69 143.23 12,756.56 21,762.84 316.68 27.45 126.57 - 35,572.02
March, 2016
Additions - - 861.30 2,616.15 32.12 - 73.42 38.11 3,621.10
Disposals 6.77 - 14.57 70.17 11.59 6.17 2.74 - 112.01
Depreciation
- 21.89 676.58 3,021.85 96.37 9.06 86.98 1.06 3,913.79
expense
Balance at 31
431.92 121.34 12,926.71 21,286.97 240.84 12.22 110.27 37.05 35,167.32
March, 2017
footnotes:
1. Cost of buildings includes cost of 60 shares (31 March, 2016 - 60 shares, 1 April, 2015-60 shares) of `50 each fully paid and cost
of 7 shares (31 March, 2016- 7 shares, 1 April, 2015-7 shares) of `100 each fully paid in respect of ownership flats in 8 (31 March,
2016- 8, 1 April, 2015-8) Co-operative Societies.
2. Buildings include assets carried at `0.94 lac (31 March, 2016 `1.07 lac, 1 April, 2015 `1.12 lac) where the conveyance in favor of
the Company has not been completed.
3. Plant and equipment includes plant and machinery, electrical installations and equipments, laboratory equipments and
computers and data processing units.The Groups’s obligations under finance leases are secured by the lessor’s title to the
leased assets.
211
RALLIS
6 Intangible assets
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
6.1 Carrying amount of:
Goodwill 19,582.31 19,582.31 19,582.31
19,582.31 19,582.31 19,582.31
Goodwill includes amount of ` 16,522.26 lac (as at 31 March, 2016 ` 16,522.26 lac; as at1 April, 2015 ` 16,522.26 lac) allocated to the
business of Metahelix Life Sciences Ltd. The estimated value-in-use of this “CGU’’ is based on the future cash flows using a 5.00 %
annual growth rate for periods subsequent to the forecast period of 4 years and discount rate of 15.00 %.
Goodwill of ` 3,060.05 lac has been allocated to Zero Waste Agro Organics Ltd., an entity in the early stage of its development. The
amount is not regarded as significant in comparison to the total carrying amount of the goodwill of the Group.
“An analysis of the sensitivity of the computation to a combined change in key parameters (operating margin, discount rates and
long term average growth rate), based on reasonably probable assumptions, did not identify any probable scenario in which the
recoverable amount of the CGU would decrease below its carrying amount.
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
6.2 Carrying amount of:
Other intangible assets
Product Registrations 298.69 466.69 713.85
Licences and commercial Rights 236.03 415.09 536.98
Computer software 62.92 65.28 65.02
Technical knowhow 507.75 339.03 357.93
1,105.39 1,286.09 1,673.78
212
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
6.2 Other intangible assets (continued)
Disposals - - - - -
Disposals - - - -
7 Investments
Nominal Quantity As at Quantity As at Quantity As at
value (in `) 31 March, 31 March, 1 April,
2017 2016 2015
Non-current
Quoted equity instruments (all fully
paid)
a) Investments carried at fair value
through other comprehensive
income (FVTOCI)
Spartek Ceramics India Ltd. 10 7,226 - 7,226 - 7,226 -
Nagarjuna Finance Ltd. 10 400 - 400 - 400 -
Pharmaceuticals Products of India
10 10,000 - 10,000 - 10,000 -
Limited
Balasore Alloys Ltd. 5 504 0.35 504 0.08 504 0.07
J.K.Cement Ltd. 10 44 0.41 44 0.30 44 0.30
Total aggregate quoted equity
A 0.76 A 0.38 A 0.37
investments
213
RALLIS
214
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
7 Investments (continued)
Units As at Units As at Units As at
31 March, 31 March, 1 April,
2017 2016 2015
Aggregate book value of quoted investment 0.76 0.38 0.37
* There is no amount due from director, other officer of the Company or firms in which any director is a partner or private companies
in which any director is a director or member at any time during the reporting period.
9 Income Taxes
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
9.1: Current tax assets and liabilities
Non current tax assets
Advance income tax (Net of provisions) 7,163.83 7,226.09 8,072.44
7,163.83 7,226.09 8,072.44
Current tax liability
Provision for current tax (Net of advance tax) 389.93 611.13 1,552.19
Total 389.93 611.13 1,552.19
215
RALLIS
Deferred tax:
In respect of current year 387.03 (55.66)
Adjustments in respect of prior years 833.99 -
In respect of unused tax credit (1,323.21) -
Total (B) (102.19) (55.66)
Income tax expense recognised in the Statement of Profit and Loss in current year 8,287.58 3,902.28
(A+ B)
The income tax expense for the year can be reconciled to the accounting profit as follows:-
For the For the
year ended year ended
31 March, 2017 31 March, 2016
Profit before tax 37,994.55 18,611.17
footnote:
(i) The cost of inventories recognised as an expense during the year was ` 94,489.75 lac (Previous year 31 March, 2016
` 85,540.97 lac)
(ii) The cost of inventories recognised as an expense includes ` 933.93 lac (Previous year 31 March, 2016 ` 650.41 lac) in respect
of adjustment of inventories to net realisable value/slow moving, and has been reduced by ` 381.49 lac (Previous year 31
March, 2016 ` 326.34 lac) in respect of reversal of such write-downs.
216
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
(iii) The mode of valuation of inventories has been stated in note 3.13
(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).
11 Trade receivables
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Current
Secured, considered good 696.77 748.69 681.99
Unsecured, considered good 25,261.16 22,035.67 26,409.58
Doubtful 1,370.65 966.42 713.72
Allowance for doubtful debts (expected credit loss allowance) (1,370.65) (966.42) (713.72)
Total 25,957.93 22,784.36 27,091.57
footnotes:
(i) The average credit period ranges from 15 days to 180 days.
(ii) Before accepting any new customer, the Group 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, 2017 ` 3,819.27
lac is due from one customer (as at 31 March, 2016 ` 3,543.14 lac are due from two cutomers, as at 1 April, 2015 ` 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 Group 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.
(iv) Movement in the expected credit loss allowance
Particulars As at As at
31 March, 2017 31 March, 2016
Balance at the beginning of the year 966.42 713.72
Less: amount collected and hence reversal of provision 75.02 53.93
Add: provision made during the year 479.25 306.63
Balance at the end of the year 1370.65 966.42
(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).
217
RALLIS
13 Other assets
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Non-current
Capital advances 85.59 239.56 200.02
Deposit with public bodies 99.66 141.54 187.83
Value Added Tax (VAT) credit receivable 476.50 1,245.47 1,228.37
Claims receivable 529.70 323.19 388.13
Prepaid lease rental (refer footnote) 3,818.66 4,508.57 4,643.03
Prepaid expenses 121.69 120.82 39.40
Total 5,131.80 6,579.15 6,686.78
Current
Statutory dues receivable from government authorities
Service tax credit receivable 263.68 293.38 388.63
Cenvat credit receivable 188.46 150.25 436.97
Others (custom duty) 12.74 5.43 46.86
Export benefit receivable 1,051.22 395.35 132.37
Inventory recoverable 1,792.86 2,220.65 2,325.02
Advances recoverable
Advances to suppliers 2,265.63 2,417.18 967.53
Advances to employees 228.07 265.22 200.01
Others 290.35 312.28 221.21
Prepaid lease rental (refer footnote) 113.61 134.46 102.33
Prepaid expenses 157.31 118.17 144.03
Total 6,363.93 6,312.37 4,964.96
footnote:
Prepaid lease rental include assets carried at ` 990.29 (as at 31 March, 2016 ` 1,583.59 lac, as at 1 April, 2015 ` 1,600.22 lac) for which the Company
has sought an extension for the fulfilment of pre-conditions of lease upon expiry of timeline.
Leasehold land and other assets held for sale 576.30 237.19 -
576.30 237.19 -
footnote:
The Group intends to dispose of assets relating to a non current assets it no longer utilises in the next 12 months. The Company is
currently in negotiation with some potential buyers. No impairment loss was recognised on reclassification of the assets as held
for sale nor as at reporting date as the directors 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.
218
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
15 Share capital
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
b. The Company has issued one class of equity shares having a par value of ` 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.
219
RALLIS
Rakesh Jhunjhunwala
As at 1 April, 2015 20,105,820 10.34%
As at 31 March, 2016 20,105,820 10.34%
As at 31 March, 2017 19,335,820 9.94%
e. As per records of the Company as at 31 March, 2017, no calls remain unpaid by the directors and officers of the Company.
16 Other equity
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
General reserve 17,649.93 17,649.93 16,389.73
Securities premium reserve 8,793.88 8,793.88 8,793.88
Retained earnings 73,332.64 51,059.61 47,802.43
Capital redemption reserve 8,151.77 8,151.77 8,151.77
Capital reserve 1,243.10 1,243.10 1,243.10
Reserve for equity instruments through Other Comprehensive Income 0.39 0.01 -
109,171.71 86,898.30 82,380.91
Amount received on issue of shares in excess of the par value has been classified as securities premium reserve.
220
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
16.3: Retained earnings
As at As at
31 March, 2017 31 March, 2016
221
RALLIS
150.00 Term loan from ICICI Bank - is secured by hypothecation of movable assets, 7.50%
both present and future including its movable plant and equipment,
machinery spares, tools and accessories and other movables, both
present and future all piece and parcel of the immovable agricultural
property situated at Kokkanda village, Mulugu Mandal, Medak District.The
balance outstanding as at March 31, 2017 is ` 200.00 lac (of which ` 50.00
lac has been classified under note 19 other current financial liabilities)
repayable in balance 16 equated quarterly installments of ` 12.50 lac each.
222
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
223
RALLIS
224
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
Owed by Rallis India 1,250.00 The loan is repayable in 8 quarterly installments. The repayment begins 9.90%
Limited after a moratorium of 12 months from March, 2014. The first repayment of
` 312.50 lac falls due in June, 2015.
Owed by Rallis India 37.66 The loan is repayable in 3 annual installments of ` 18.83 lac (of which ` 18.83 lac 3.00%
Limited has been grouped under note 19 other financial liabilities)
Owed by Metahelix 58.29 The loan is repayable in 7 annual installments of ` 8.33 lac. 3.00%
Life Sciences Limited
Term loan from bank (refer footnote (ii)) 1,000.00 1,000.00 1,000.00
footnotes:
(i) These 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 11).
(ii) Term loan includes ` 1,000.00 lac owed by Metahelix Life Sciences Ltd. from HDFC Bank Ltd repayable on 14 May, 2017 which
was obtained in 2016-17.
(iii) The weighted average effective interest rate on the bank loans is 8.14% p.a. (for 31 March, 2016 9.04% p.a.; for 1 April, 2015
10.17% p.a).
.
225
RALLIS
footnote:
All amounts required to be transferred to the Investor Education and Protection Fund by the Group have been transferred within
the time prescribed for the same, except in cases of disputes relating to the ownership of the underlying shares that have remained
unresolved amounting to ` 0.19 lac (as at 31 March, 2016 ` 0.13 lac ; as at 1 April, 2015 ` Nil) .
20 Provisions
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Employee benefits (See footnote below)
Non Current
(a) Supplemental pay 1,542.22 1,494.69 1,524.63
(b) Gratuity 222.05 200.23 315.28
Total 1,764.27 1,694.92 1,839.91
Current
(a) Supplemental pay 196.09 198.48 200.43
(a) Compensated absences 879.99 767.33 675.02
Total 1,076.08 965.81 875.45
footnote:
The provision for employee benefits includes gratuity , supplemental payment on retirement and compensated absences. The
increase/decrease in the carrying amount of the provision for the current year is mainly on account of net impact of incremental
charge for current year and benefits paid in the current year For other disclosures, refer note 37.
226
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
As at Recognised in As at
2016-17
31 March, 2016 Statement of Profit 31 March, 2017
-Deferred tax assets and liabilities in relation to:
and Loss
Deferred tax assets (Net)
Provision for doubtful debts and advances 202.12 130.89 333.01
Defined benefit obligation 61.61 (6.64) 54.97
On unused tax losses 1,437.98 229.99 1,667.97
Property, plant and equipment (190.39) 9.57 (180.83)
On intangible assets (652.11) (181.25) (833.35)
Unused tax credit - 1,323.21 1,323.21
859.21 1,505.77 2,364.98
Deferred tax liabilities (Net) (a-b)
Provision for doubtful debts and advances (1,474.49) 814.64 (659.85)
Defined benefit obligation (210.61) (9.94) (220.55)
Provision for sales return (297.81) 297.81 -
Property, plant and equipment 5,561.99 273.23 5,835.22
Others 0.17 27.43 27.60
3,579.25 1,403.17 4,982.42
As at Recognised in As at
2015-16
1 April, 2015 Statement of Profit 31 March, 2016
-Deferred tax assets and liabilities in relation to:
and Loss
Deferred tax assets (Net)
Provision for doubtful debts and advances 162.32 39.80 202.12
Defined benefit obligation 56.53 5.08 61.61
On unused tax losses 880.72 557.26 1,437.98
Property, plant and equipment (82.37) (108.02) (190.39)
On intangible assets (540.99) (111.12) (652.11)
476.21 383.00 859.21
Deferred tax liabilities (Net) (a-b)
Provision for doubtful debts and advances (1,436.08) (38.41) (1,474.49)
Defined benefit obligation (155.61) (55.00) (210.61)
Voluntary retirement scheme (118.99) 118.99 -
Provision for sales return (313.90) 16.09 (297.81)
Property, plant and equipment 5,301.15 260.84 5,561.99
Others (24.66) 24.83 0.17
3,251.91 327.34 3,579.25
footnote:
There are no material deferred tax expense on unrecognised tax losses.
227
RALLIS
22 Trade payables
As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Trade payables 28,855.37 21,497.76 24,460.81
Other payables (includes accural expenses and amount due to 4,163.94 5,872.02 4,182.64
employees)
33,019.31 27,369.78 28,643.45
footnote:
The average credit period on purchases of goods and services are within 120 days. The trade payables are non-interest bearing.
25 Other income
For the year ended For the year ended
31 March, 2017 31 March, 2016
a) Interest income
Interest Income on bank deposits carried at amortised cost 38.31 38.09
Interest income on security deposits carried at amortised 89.37 141.00
cost
b) Dividend income
Dividend from current investment in mutual fund carried at 566.07 22.76
FVTPL
Dividend from equity instruments measured at FVTOCI 1.62 1.35
c) Other non-operating income
Insurance claim 16.69 33.39
Rental Income 111.72 80.65
Miscellaneous income (refer note 46) 455.54 1,103.49
d) Other gains and losses
Profit on disposal of property, plant and equipment - 6.84
Total 1,279.32 1,427.57
228
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
229
RALLIS
30 Finance Costs
For the year ended For the year ended
31 March, 2017 31 March, 2016
Interest on bank overdrafts and loans 729.67 1,359.04
Total 729.67 1,359.04
32 Other expenses
For the year ended For the year ended
31 March, 2017 31 March, 2016
Freight, handling and packing 5,505.15 5,812.91
Changes in excise duty on inventory of finished goods 65.70 (22.27)
Travelling and conveyance 1,917.99 1,913.00
Power and fuel 4,276.41 4,790.24
Brand equity contribution 197.12 180.02
Repairs and maintenance
Plant and equipment 687.03 748.37
Property 165.78 183.51
Others 479.59 470.50
Stores and spares consumed 464.74 483.53
Rates and taxes 785.36 520.07
Commission 44.94 106.16
Insurance charges 263.29 245.54
Rent 1,914.38 1,829.44
Bank charges 189.94 240.55
Director fees & commission 405.30 412.20
Provision for doubtful debt (Net) 404.23 252.70
Loss on sale of fixed asset (Net) 74.21 -
Selling expenses 3,243.68 2,671.39
Advertisement and promotion 3,034.29 2,995.39
Legal and professional fees 1,297.26 864.79
Net loss on foreign currency transactions and translation 357.22 490.36
Other expenses (refer note 36) 6,038.33 5,692.61
Total 31,811.94 30,881.01
230
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` 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 Group.
The Group has determined its business segment as “Agri -Inputs” comprising of Pesticides, Plant Growth Nutrients, Organic
Compost and Seeds .The other segment includes “Polymer” and other non reportable elements.
231
RALLIS
Particulars As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Segment liabilities
For the purpose of monitoring segment performance and allocating 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 Group operates in two principal geographical areas - India and outside India
The Group’s revenue from continuing operations from external customers by location of operations and information about its
non-current assets* by location of assets are detailed below.
*Non-current assets exclude those relating to financial assets and deferred tax assets.
232
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
35 Lease arrangements
The Group 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 is ` 620.61 lac (Previous Year ` 605.09 lac) net of amount recovered from employees
` 16.73 lac (Previous Year ` 26.73 lac). Disclosures in respect of non-cancellable leases are given below:
233
RALLIS
Group as lessee
The Group has finance lease for office equipment. The Group’s obligation under finance lease are secured by lessors title to the
leased assets. Future minimum lease payment under finance lease with the present value of the net minimum lease payments
are as follows:-
Particulars Minimum lease payments Present value fo minimum lease payments
As at As at As at As at As at As at
31 March, 31 March, 1 April, 31 March, 31 March, 1 April,
2017 2016 2015 2017 2016 2015
Not Later than one year 11.41 - - 11.36 - -
Later than one year and not later 31.12 - - 25.54 - -
than five years
Later than five years 2.44 - - 1.65 - -
44.97 - - 38.55 - -
Less: Future finance charges (6.42) - - - - -
Present value of minimum lease 38.55 - - 38.55 - -
payments
Service tax which is being claimed for set-off as input credit has not been included in the expenditure above.
*excludes ` 4.00 lac (Previous year ` 33.00 lac) paid to network firms.
234
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
As at 31 March, 2017, the fair value of the assets of the fund and the accumulated members’ corpus is ` 6,306.63 lac and
` 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 recognised as expense and included in the note 29 in the head “Contribution to Provident and other funds” for 31
March,2017 ` 683.79 lac ( for 31 March, 2016 ` 669.37 lac).
Defined benefit plans:
The Group 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 Group 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 Group 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.
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’s
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.
Particulars For the year ended For the year ended For the year ended
31 March, 2017 31 March, 2016 31 March, 2015
Discount rates 7.00% to 7.29% p.a. 7.60% to 8.04% p.a. 7.80% to 7.97% p.a.
Expected rate of salary increase 8.00% p.a. 8.00% p.a. 8.00% p.a.
Based on Indian standard mortality table with modification to reflect expected changes in mortality.
235
RALLIS
Amount recognised in Statement of Profit and Loss in respect of these defined benefit plans are as follows
Service cost:
Return on plan assets (excluding amounts included in net interest expense) (88.44) (21.79)
Components of defined benefit costs recognised in Other Comprehensive Income 67.36 (20.26)
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.
The amount included in the Balance Sheet arising from the entity’s obligation in respect of its defined benefit plan is as follows:
Particulars As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Net liability arising from defined benefit obligation 1,956.45 1,893.40 2,022.27
236
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
Movements in the present value of the defined benefit obligation are as follows:
Particulars As at As at
31 March, 2017 31 March, 2016
Remeasurement (Gain)/Losses:
Particulars As at As at
31 March, 2017 31 March, 2016
Return on plan assets (excluding amounts included in net interest expense) 88.44 21.79
The plan assets are managed by the Gratuity Trust formed by the Group. The management of funds is entrusted with the Life
Insurance Corporation of India (“LIC”) , HDFC Standard Life Insurance Company Limited (“HSLIC”) and Kotak Life Insurance.
237
RALLIS
The fair value of the plan assets at the end of the reporting period for each category are as follows:
Particulars As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
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.
238
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
1. If the discounting rate is 100 basis point higher (lower), the defined benefit obligation would decrease by ` 337.33 lac (increase
by ` 386.80 lac) (as at 31 March, 2016: decrease by ` 296.71 lac (increase by ` 339.52 lac)) ( as at 1 April, 2015: decrease by ` 286.64 lac
(increase by ` 3128.72 lac)).
2. If the expected salary growth increases (decreases) by 1%, the defined benefit obligation would increase by ` 259.49 lac
(decrease by ` 230.06 lac) (as at 31 March, 2016: increase ` 219.88 lac (decrease by ` 195.16 lac)) ( as at 1 April, 2015 : increase by
` 203.23 lac (decrease by ` 179.80 lac)).
3. If the life expectancy increases (decreases) by 1 year, the defined benefit obligation would increase by ` 41.03 lac (decrease by
` 41.55 lac) (as at 31 March, 2016: increase ` 36.96 lac (decrease by ` 37.58 lac)) ( as at 1 April, 2015: increase by ` 36.95 lac (decrease
by ` 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.
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 recognised in Balance Sheet.
There were no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
The Group expects to make a contribution of ` 282.05 lac (as at 31 March, 2016 ` 238.50 lac and as at 1 April, 2015 ` 350.01 lac) to
the defined benefit plans during the next financial year.
The defined benefit obligations (mainly related to Rallis India Limited) shall mature after year ended 31 March, 2017 as follows:
As at March, 31
2018 367.78
2019 240.33
2020 267.01
2021 348.41
2022 343.93
Thereafter 1,951.06
38 Financial instruments
Capital management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concern while maximising
the return to stakeholders through optimisation of debt and equity balance.
The capital structure of the Group consists of net debt (borrowings as detailed in note 17,18 and 19 offset by cash and bank
balances) and total equity of the Group.
The Group is not subject to any externally imposed capital requirements.
239
RALLIS
(i) Debt is defined as long-term borrowings, short-term borrowings and current maturity of long-term borrowings (excluding
financial guarantee contracts and contingent consideration), as described in notes 17,18 and 19.
Particulars As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Financial assets
Measured at amortised cost
(a) Cash and bank balances 989.32 768.29 716.65
(b) Other financial assets at amortised cost 26,834.62 23,709.92 28,026.93
Financial liabilities
Measured at amortised cost
(a) Borrowings 3,899.23 8,980.59 12,530.25
(b) Other financial liabilities at amortised cost 40,699.79 35,840.16 35,853.27
In respect of financial instruments measured at amortised cost, the fair value approximates the amortised cost.
240
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
Fair value hierarchy
The following table provides the fair value measurement hierarchy of the Group’s financial assets that are measured at fair value
or where fair value disclosure is required as at 31 March, 2017:
Particulars Total Fair value measurment using
Quoted prices Significant Significant
in active market observable unobservable
(Level 1) inputs (Level 2) inputs (Level 3)
FVTOCI financial investments
Quoted equity shares 0.76 0.76 - -
Unquoted equity shares 1,869.30 - 1,828.60 40.70
There have been no transfers among Level 1, Level 2 and Level 3 during the year.
The following table provides the fair value measurement hierarchy of the Group’s financial assets that are measured at fair value
or where fair value disclosure is required as at 31 March, 2016:
Particulars Total Fair value measurment using
Quoted prices Significant Significant
in active market observable unobservable
(Level 1) inputs (Level 2) inputs (Level 3)
FVTOCI financial investments
Quoted equity shares 0.38 0.38 - -
Unquoted equity shares 1,869.30 - 1,828.60 40.70
There have been no transfers among Level 1, Level 2 and Level 3 during the year.
The following table provides the fair value measurement hierarchy of the Group’s financial assets that are measured at fair value
or where fair value disclosure is required as at 1 April, 2015:
Particulars Total Fair value measurment using
Quoted prices Significant Significant
in active market observable unobservable
(Level 1) inputs (Level 2) inputs (Level 3)
FVTOCI financial investments
Quoted equity shares 0.37 0.37 - -
Unquoted equity shares 1,869.30 - 1,828.60 40.70
There have been no transfers among Level 1, Level 2 and Level 3 during the year.
241
RALLIS
Particulars As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Opening balance 40.70 40.70 40.70
Remeasurment recognised in OCI - - -
Purchases - - -
Sales - - -
Closing balance 40.70 40.70 40.70
The Group determined the fair value measurements of investments –unquoted categorized in Level 2 based on price agreed in a
sale transaction between unrelated parties.
Financial risk management objectives
The Group’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 Group through internal risk report which analyse 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 Group’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 Group does not enter into or trade financial instrument, including derivative financial
instruments, for speculative purposes.
The corporate treasury function reports quarterly to the Group’s risk management committee, an independent body that monitors
risks and policies implemented to mitigate risk exposures.
Market risk
The Group’s activities expose it primarily to the financial risk of changes in foreign currency exchange rates. The Group 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 Group undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations
arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.
The carrying amounts of the Group’s foreign currency dominated monetary assets and monetary liabilities at the end of the
reporting period are as follows:
Particulars Liabilities (foreign currency) Assets (foreign currency)
As at As at As at As at As at As at
31 March, 31 March, 1 April, 31 March, 31 March, 1 April,
2017 2016 2015 2017 2016 2015
In US Dollars (USD) 122.44 82.61 132.30 117.49 116.97 161.14
In Euro (EUR) - 0.03 0.01 0.46 0.64 0.26
In Japanese Yen (JPY) 1,120.50 2,559.01 800.01 - - -
In Great Britain Pound (GBP) - - - 0.06 - -
242
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
The Group, 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
largely mitigate the risk.
243
RALLIS
Derivative Instruments:
The Group 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 Group’s strategy
approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the Group’s
Risk Management Policy. The Group does not use forward contracts for speculative purposes.
The following forward exchange contracts are outstanding as at balance sheet date:
Payable 2 649.91 JPY 1,120.50 2 1,405.30 JPY 2,532.00 3 404.49 JPY 776.00
Equity risk
There is no material equity risk relating to the Group’s equity investments which are detailed in note 7. The Group equity
investments majorly comprises of strategic investments rather than trading purposes.
Interest risk
There is no material interest risk relating to the Group’s financial liability which are detailed in note note 17,18 and 19.
Credit risk refers to the risk that a counter party will default on its contractual obligation resulting in financial loss to the Group.
The Group uses its own trading records to evaluate the credit worthiness of its customers. The Group’s exposure are continuously
monitored and the aggregate value of transactions concluded, are spread amongst approved counter parties (refer note 11).
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 Group has issued a corporate guarantee to debenture trustee in respect of issuance of debentures
of ` 27,000.00 lac by Advinus Therapeutics Ltd. (Advinus), to the extent of 16.89% of the total obligations of Advinus under
such borrowings. The Group’s maximum exposure in this respect is the outstanding borrowing amount unpaid to the extent of
` 4,560.30 lac at 31 March, 2017 (31 March, 2016: ` NIL, 1 April, 2015: ` NIL) as disclosed in contingent liabilities (refer note 40).
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 non current liabilities are disclosed
in note 17.
244
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
2. Trading transactions
During the year, Group entered into following trading transactions with related parties:
Particulars Sales of goods Purchases of goods
For the For the For the For the
year ended year ended year ended year ended
31 March, 2017 31 March, 2016 31 March, 2017 31 March, 2016
Holding Company
Tata Chemical Ltd. 3,570.07 5,236.74 574.17 579.49
Subsidiaries of Tata Sons Limited
Tata Africa Services (Nigeria) Ltd. 564.04 158.64 - -
Sale of goods to related parties were made at the Group’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.
245
RALLIS
Holding Company
Tata Chemical Ltd. 110.69 111.72 - 15.81
The following balances were outstanding at the end of the reporting period:
Particulars Amounts owned by related parties Amounts owned to related parties
As at As at As at As at As at As at
31 March, 31 March, 1 April, 31 March, 31 March, 1 April,
2017 2016 2015 2017 2016 2015
Holding Company
Tata Chemical Ltd. 112.05 431.10 471.47 - 462.28 13.16
246
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
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 recognised in the current or prior years for bad & doubtful debts in respect of the amounts
owed by related parties.
During the year, the Group has issued a corporate guarantee to debenture trustee in respect of issuance of debentures of ` 27,000
lac by Advinus Therapeutics Ltd. (Advinus), to the extent of 16.89% of the total subscription of debentures issued by Advinus.
The Group’s maximum exposure in this respect is of ` 4,560.30 lac at 31 March, 2017 (31 March, 2016: ` Nil, 1 April, 2015: ` Nil) as
disclosed in contingent liabilities (refer note 40).
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.
40 Contingent liabilities
The Group 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 Group’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 Group in respect
of these cases have been summarised below.
Guarantees
During the year, the Group has issued a corporate guarantee to debenture trustee in respect of issuance of
debentures of ` 27,000 lac by Advinus Therapeutics Ltd. (Advinus), to the extent of 16.89% of the total subscription of
debentures issued by Advinus. The Group’s maximum exposure in this respect is of ` 4,560.30 lac at 31 March, 2017
(31 March, 2016: ₹ Nil, 1 April, 2015: ₹ Nil).
Tax contingencies
Amounts in respect of claims asserted by various revenue authorities on the Group, in respect of taxes, which are in dispute,
have been tabulated below:
Nature of tax As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Sales tax 1,950.30 1,868.71 1,836.30
Excise duty 433.03 369.31 360.84
Customs duty 144.10 144.10 144.10
Income tax 11,756.32 6,764.94 8,520.32
Service tax 90.81 81.06 113.06
Property cases 47.36 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 Group 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.
247
RALLIS
Nature of Claim As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
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 Group’s financial condition, though the outcomes could
be material to the Group’s operating results for any particular period, depending, in part, upon the operating results for such
period.
41 Commitments
(i) Estimated amount of contract with minimum commitment for plant activity ` 1,030.00 lac (Previous year 31 March 2016
` 1,955.00 lac; 1 April, 2015 ` 816.00 lac).
(ii) Estimated amount of contracts remaining to be executed on capital account of property, plant and equipment is ` 317.82 lac
(Previous year 31 March 2016 ` 317.00 lac; 1 April 2015 ` 862.60 lac) and Intangible assets is ` 48.28 lac (Previous year 31 March
2016 ` 105.00 lac; 1 April, 2015 ` 274.27 lac) against which advances paid aggregate ` 82.83 lac (Previous year 31 March 2016
` 232.32 lac; 1 April, 2015 ` 200.02 lac).
(iii) Capital commitment towards investment in joint venture in Indonesia ` NIL (Previous year 31 March, 2016 ` 81.16 lac (USD
1,22,500);1 April, 2015 ` 122.50 lac (USD 1,96,000)).
(iv) 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 of ` 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.
(v) 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 of ` 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.
(vi) During the previous year 2015-16, the Company had agreed to assign its leasehold rights in a property at Turbhe Navi
Mumbai, for a gross consideration of ` 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 to ` 9,778.19 lac against which the Company was entitled to reimbursed of ` 4,400.19 lac.
248
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
During the year the Group has also incurred ₹ 1,047.85 lac (Previous year 31 March, 2016 ₹ 1,365.10 lac; 1 April, 2015 ₹ 886.48 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 ₹ 3,016.38 lac (Previous year 31 March, 2016 ₹ 2,640.40 lac; 1 April, 2015
₹ 1,873.27 lac).
footnote:
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).
Particulars As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Opening balance as at 1 April 193.82 193.82 193.82
Additional provisions made during the year - - -
Total 193.82 193.82 193.82
Payments made adjusted against above sum - - -
Closing balance as at 31 March 193.82 193.82 193.82
249
RALLIS
Particulars As at As at As at
31 March, 2017 31 March, 2016 1 April, 2015
Opening balance as at 1 April 50.00 50.00 50.00
Additional provisions made during the year - - -
Total 50.00 50.00 50.00
Payments made adjusted against above sum - - -
Closing balance as at 31 March 50.00 50.00 50.00
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 Group 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.
44 Additional information related to the subsidiaries considered in the preparation of consolidated financial statements.
a ) As at and for the year ended 31 March, 2017
Name of the entity in As at For the year ended For the year ended For the year ended
the Group 31 March, 2017 31 March, 2017 31 March, 2017 31 March, 2017
Net assets* Share in profit or loss Share in other Share in total
comprehensive income comprehensive income
As % of Amount As % of Amount As % of Amount As % of Amount
consolidated consolidated consolidated consolidated
net assets profit or loss net assets profit or loss
Parent
Rallis India Ltd. 91.18% 101,359.60 89.40% 26,557.03 91.96% (46.87) 89.39% 26,510.16
Subsidiaries (Group's
share)
Metahelix Life Sciences
7.60% 8,452.56 10.77% 3,198.87 8.04% (4.10) 10.77% 3,194.77
Ltd.#
Zero Waste Agro
1.15% 1,279.81 0.12% 36.23 - - 0.12% 36.23
Organics Ltd.
Rallis Chemistry
-0.02% (16.92) 0.00% (0.91) - - 0.00% (0.91)
Exports Ltd.#
Foreign subsidiaries
PT. Metahelix
Lifesciences Indonesia
0.04% 41.37 -0.14% (41.28) - - -0.14% (41.28)
(incorporated in the
year 2016-2017)
Non-controlling
interests in all 0.04% 43.06 -0.14% (42.97) - - -0.14% (42.97)
subsidiaries
Consolidated net
100.00% 111,159.48 100.00% 29,706.97 100.00% (50.97) 100.00% 29,656.00
assets / Profit after tax
250
Notes to the consolidated financial statements for the year ended 31 March, 2017
All amounts are in ` lac unless otherwise stated
Subsidiaries
(Group's share)
Metahelix Life Sciences
5.98% 5,331.83 11.73% 1,725.23 -205.95% (21.46) 11.58% 1,703.77
Ltd.
Zero Waste Agro Organics
0.98% 870.31 0.20% 29.32 - - 0.20% 29.32
Ltd.
Rallis Chemistry Exports
-0.02% (16.05) 0.00% (0.61) - - 0.00% (0.61)
Ltd.#
Non-controlling interests
0.42% 374.74 2.49% 365.68 - - 2.48% 365.68
in all subsidiaries
Consolidated Net Assets /
100.00% 89,217.75 100.00% 14,708.89 100.0% 10.42 100.00% 14,719.31
Profit after tax
*Net assets = total assets minus total liabilities
# less than 0.01%
45 During the year, the Group 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 December, 2016, the denomination wise SBNs and other notes as per the notification is given below:
Particulars SBNs Other Total
Demonetisation
Notes
Closing Cash in Hand as on 08 November, 2016 * 6.64 2.33 8.97
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 of ` 2.25 lac relates to SBN, held by employees as at 8 November, 2016 which was
accounted and deposited on 19 November, 2016.
251
RALLIS
47 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.
48 Subsquent Event
The Board of Directors at its meeting held on 24 April, 2017 has recommended a dividend of ` 2.50 per equity share. The Board
has also recommended a one-time special dividend of ` 1.25 per equity share, out of the profit on assignment of leasehold
rights in the Turbhe land.
252
NOTES
NOTES
To,
TSR Darashaw Ltd.
Unit: Rallis India Limited
6-10 Haji Moosa Patrawala Industrial Estate,
20 Dr. E. Moses Road, Mahalaxmi,
Mumbai 400 011.
I/ We request you to record the following information against our Folio No.:
General Information:
Folio No.:
PAN: *
Mobile No.:
Email Id:
Bank Details:
IFSC: MICR:
(11 digit) (9 digit)
I/ We hereby declare that the particulars given above are correct and complete. If the transaction is delayed because of
incomplete or incorrect information, I/ We would not hold the Company/ RTA responsible. I/ We undertake to inform any
subsequent changes in the above particulars as and when the changes take place. I/ We understand that the above details
shall be maintained by you till I/We hold the securities under the above mentioned Folio No.
Place:
PROXY FORM
[Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014]
E-mail Id :
Folio No./ DP ID-Client ID No. :
I/ We, being the Member(s) of _ _ _ _ _ _ _ _ _ _ _shares of the above named Company, hereby appoint:
NOTES:
1. This form of Proxy, in order to be effective, should be duly completed and deposited at the Registered Office of the Company, at 156/157
15th Floor Nariman Bhavan 227 Nariman Point Mumbai 400 021, not less than FORTY-EIGHT (48) HOURS before the commencement of
the Meeting.
2. A proxy need not be a member of the Company.
3. For the Resolutions, Explanatory Statement and Notes, please refer to the Notice of the SIXTY-NINTH ANNUAL GENERAL MEETING of the
Company.
FINANCIAL STATISTICS ` Lacs
Year-end Financial Position 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008
Net Fixed Assets 35,797 36,608 33,977 40,775 39,866 40,243 36,761 26,478 18,766 14,787
Deferred Tax Asset/(Liability) (4,982) (3,579) (3,252) (3,301) (2,864) (1,308) (323) 535 1,016 1,323
Investments 53,403 30,497 23,162 21,878 19,348 18,094 15,193 14,028 13,615 5,551
Net Non current Assets 10,211 12,138 13,025 8,577 5,133 7,227 8,470
Total 94,429 75,664 66,911 67,929 61,483 64,256 60,101 41,040 33,397 21,661
Current Assets 53,899 50,089 55,198 41,008 38,749 35,657 33,877 32,450 34,727 33,431
Current Liabilities 33,633 30,324 31,884 33,629 29,654 32,990 34,406 30,400 25,914 20,022
Net Current Assets 20,266 19,765 23,313 7,380 9,095 2,668 (529) 2,050 8,813 13,409
TOTAL CAPITAL EMPLOYED 114,695 95,430 90,225 75,308 70,578 66,924 59,572 43,090 42,210 35,070
Capital
- Preference - - - - - - - - 8,800 8,800
- Equity 1,945 1,945 1,945 1,945 1,945 1,945 1,945 1,296 1,198 1,198
Total 1,945 1,945 1,945 1,945 1,945 1,945 1,945 1,296 9,998 9,998
Reserves 110,595 89,890 80,742 69,380 60,204 53,420 48,391 40,983 24,869 20,755
Less: Miscellaneous Expenditure - - - - - - - - 713 73
Net Worth 112,540 91,835 82,687 71,324 62,149 55,365 50,336 42,279 34,155 30,681
Borrowings
- Short term 10 208 4,277 1,642 - 3,122 972 161 2,455 3,604
- Long term 2,146 3,387 3,261 2,341 8,429 8,437 8,265 650 5,600 786
Total 2,155 3,595 7,538 3,983 8,429 11,559 9,236 811 8,055 4,389
TOTAL SOURCES 114,695 95,430 90,225 75,308 70,578 66,924 59,572 43,090 42,210 35,070
Summary of Operations
Revenue from operations 150,517 138,672 159,632 162,145 140,984 124,680 111,322 91,852 89,271 72,036
Other Income 1,051 466 172 576 1,145 750 3,436 2,882 2,262 11,163
Total Income 151,568 139,138 159,804 162,720 142,130 125,430 114,758 94,734 91,533 83,200
Expenses
Materials consumed 81,013 73,702 88,453 93,334 83,419 70,893 62,824 50,339 50,557 40,844
Personnel cost 11,401 10,245 10,354 8,869 7,784 8,033 6,958 7,498 7,274 6,135
Excise duty 10,468 9,868 10,369 10,272 9,480 7,882 8,230 6,000 7,291 6,847
Finance Cost 267 792 479 805 1,251 1,037 332 267 326 409
Depreciation 4,194 3,783 4,459 3,597 2,881 2,711 1,716 1,831 2,295 2,007
Other expenses 24,132 24,231 25,116 24,938 19,979 18,146 16,340 13,580 13,190 12,340
Total 131,474 122,620 139,229 141,816 124,794 108,702 96,400 79,515 80,932 68,582
Profit before tax and prior year adjustment and exceptional item 20,094 16,518 20,575 20,904 17,335 16,728 18,357 15,219 10,601 14,617
Exceptional item:Cessation Cost - - - - - 1,719 - - - -
Exceptional item:Sale of Turbhe Plant 15,839 - - - - - - - - -
Profit before tax 35,933 16,518 20,575 20,904 17,335 15,009 18,357 15,219 10,601 14,617
Tax 9,329 3,902 6,034 6,268 5,397 4,870 5,736 5,116 3,472 2,098
Profit after tax 26,603 12,616 14,542 14,636 11,938 10,139 12,621 10,104 7,129 12,519
Other comprehensive income (net of taxes) (47) 32 - - - - - - - -
Total comprehensive income 26,557 12,648 14,542 14,636 11,938 10,139 12,621 10,104 7,129 12,519
IMPORTANT RATIOS
Current Assets : Liabilities 1.6 1.7 1.7 1.2 1.3 1.1 1.0 1.1 1.3 1.7
Debt : Equity 0.0 0.0 0.1 0.1 0.1 0.2 0.2 0.0 0.2 0.1
PBT/Turnover % 13.3 11.9 12.9 12.9 12.3 13.4 16.5 16.6 11.9 20.3
Return (PBIT) on Capital Employed % 17.8 18.1 23.3 28.8 26.3 26.5 31.4 35.9 25.9 42.8
Dividend (per share) 3.8 2.5 2.5 2.4 2.3 2.2 20.0 18.0 16.0 16.0
Earnings (per share)* 14 6 7 8 6 5 65 52 53 22
Net Worth (per share)* 58 47 43 37 32 28 259 326 212 183
Previous years figures have been regrouped, wherever necessary.
* Earnings Per Share and Net Worth per share for 2012 is after stock split.
RALLIS
(` in Crores)
1500 150
140
119
(` in Crores)
1000 100
500 50
CONSOLIDATED
0 0
12-13 13-14 14-15 15-16 16-17 12-13 13-14 14-15 14-15 16-17
Note: Previous years figures have been regrouped, wherever necessary. * PAT excludes exceptional items.
60
Book Value Per Share* Market Capitalisation and Net Worth
57.16
1112 1200
50 45.88
43.88 4500
853 892 1000
(` in Crores)
40 36.92 718
31.92 800
(` in Crores)
621
30 3000
(`)
600
20 400
1500
10 200
2243 3360 4401 3309 5051
0 0 0
12-13 13-14 14-15 15-16 16-17 12-13 13-14 14-15 14-15 16-17
Market Capitalisation Net Worth
* Figures considering stock split and bonus issue for all years
Return (PBIT)* on Capital Employed 400 EBITDA* and EBITDA Margin 24%
50%
29%
(Percentage)
(Percentage)
30% 26%
23% 200 12%
20%
18% 18%
100 6%
10%
203 247 253 206 235
0 0%
STANDALONE
0%
12-13 13-14 14-15 15-16 16-17 12-13 13-14 14-15 14-15 16-17
EBIDTA EBITDA Margin
* PBIT excludes extra-ordinary gains and losses such as cessation costs. * EBITDA excludes extra-ordinary gains and losses such as other income & cessation costs*
(`)
0 2 -
12-13 13-14 14-15 15-16 16-17 12-13 13-14 14-15 15-16 16-17
Dividend Special Dividend EPS CIF Value of Imports International Revenue
Note: Previous years figures have been regrouped, wherever necessary.
RALLIS INDIA LIMITED
Corporate Identity No. L36992MH1948PLC014083
REGISTERED OFFICE 156/157 15TH FLOOR NARIMAN BHAVAN 227 NARIMAN POINT MUMBAI 400 021
Tel 91 22 6665 2700 Fax 91 22 6665 2827 Email Address: investor_relations@rallis.co.in Website: www.rallis.co.in
ATTENDANCE SLIP
69TH ANNUAL GENERAL MEETING ON FRIDAY, 23RD JUNE, 2017 AT 3.00 P.M.
at Walchand Hirachand Hall, 4th Floor, Indian Merchants’ Chamber Building, IMC Marg,
Churchgate, Mumbai 400 020
I/ We hereby record my/ our presence at the SIXTY-NINTH ANNUAL GENERAL MEETING of the Company
at Walchand Hirachand Hall, 4th Floor, Indian Merchants’ Chamber Building, IMC Marg, Churchgate,
Mumbai 400 020, on Friday, the 23rd June, 2017 at 3.00 p.m.
NOTES:
1. Only Member/ Proxyholder can attend the Meeting.
2. Please complete the Folio/ DP ID-Client ID No. and name of the Member/ Proxy, sign this Attendance
Slip and hand it over, duly signed, at the entrance of the Meeting Hall.
3. Shareholder/ Proxyholder desiring to attend the Meeting should bring his/ her copy of the Annual Report
for reference at the Meeting.
For Members opting to vote through electronic means, instead of voting at the Annual General Meeting,
facility is available at the web link: https://www.evoting.nsdl.com. Particulars for electronic voting are as
under:
EVEN
User ID Password
(E-Voting Event Number)
Note: Please refer to the instructions printed under the Notes of the Notice of the 69th Annual General
Meeting. The e-voting period starts from 9.00 am on Tuesday, 20th June, 2017 and will end at 5:00 pm
on Thursday, 22nd June, 2017. The voting module shall be disabled by NSDL for voting thereafter.