BOARD’S REPORT TO THE MEMBERS OF RALLIS INDIA LIMITED The Directors hereby present their Sixty-eighth Annual Report on the business and operations of the Company and the financial statements for the year ended 31st March, 2016 DIVIDEND The Directors are pleased to recommend a dividend of Rs. 2.50 per share (250%) on the Equity Shares of the Company (Previous year Rs. 2.50 per share including Rs. 1 per share towards interim dividend, i.e. 250%). If the dividend, as recommended above, is declared by the Members at the Annual General Meeting, the total outflow towards dividend on Equity Shares for the year would be Rs. 58.51 crores (including dividend tax) (Previous Year Rs. 58.34 crores). SHARE CAPITAL The paid up Equity Share Capital as on 31st March, 2016 was Rs. 19.45 crores. During the year under review, the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company. As on 31st March, 2016, none of the Directors of the Company hold shares of the Company. COMPANY PERFORMANCE The Company’s consolidated revenues during the year are Rs. 1,726.54 crores, as compared to Rs. 1,918.27 crores in the previous year. The Company’s profit before tax on a consolidated basis is Rs. 185.68 crores during the year, as compared to Rs. 221.59 crores in the previous year, a decrease of 16.2% over the last year. The Company earned a net profit of Rs. 143.03 crores, lower by 9%, as against a net profit of Rs. 157.23 crores in the previous year, on a consolidated basis. OPERATIONS 1. CROP PROTECTION The financial year 2015-16 witnessed very challenging times, with back to back drought years, accompanied by low farmer netbacks and tough market conditions. This had an adverse impact on the usage of crop protection products. Below than normal rainfall and a later-than-normal withdrawal from northern and central parts of India pushed the countrywide cumulative rainfall deficiency to 14%. Rainfall deficit in 2015 affected crops spread over an area of 19 million hectares. Additionally, 3.2 million hectares of crop area were damaged by storms and floods since April. This year’s monsoon was extremely weak over Gujarat, Madhya Maharashtra, Marathwada, North interior Karnataka, Telangana, East Uttar Pradesh and Punjab. Delay in start of the monsoon led to late overall Kharif sowing, which eventually pushed the season till end October. This set back Kharif operations in many parts of the country, impacting sowing of key crops such as Paddy, Cotton, Soybean, Ground Nut etc. Both the temporal and spatial distribution of rainfall was poor, affecting the acreage as well as crop yields for Kharif. Overall Kharif 2015 ended on a poor note. It was expected that the situation would improve in the month of October - the beginning of the Rabi season; but due to low farm sentiments and poor cash reserves with farmers, they could not afford to go for full-fledged sowing. This resulted in decrease in Rabi acreages by more than 25 lakh hectares till December compared to the previous year. While sowing was under way, unavailability of canal water due to low reservoir levels and dry spells after initial rains impacted crop health, due to which the required sprays could not happen as expected. Crops impacted due to drought: The Company has a major presence in States such as Punjab, Haryana, Maharashtra, Gujarat and the southern States. Maharashtra, Karnataka and Gujarat experienced one of the worst phases of long run droughts. After a good start to the monsoon, July and August months were completely dry. This impacted key crops such as Soybean, Cotton, Paddy and Pulses, on which the industry is dependent. Whitefly attack in Cotton in North and its impact on overall industry: During the year, States like Punjab and Haryana experienced an unprecedented epidemic of pest attack in Cotton. Whitefly attack on cotton distressed farmers, the trade as well as the State Governments. Government actions to curb sub-standard products being sold for containing the impact, led to overall slowdown in trade. Actions by the Company to address the challenges: Your Company’s domestic sales team optimally utilized available resources during the year to meet the challenges of the severe seasonal aberrations. Greater focus was given to Fruits & Vegetables (F&V), where resources were utilized to scale up the business. Initiatives introduced by the Company during previous years, such as EAGLE (Expansion and Aggressive Growth through Leadership and Excellence), RKK (Rallis Kisan Kutumb) and SAMPARK were interlinked for more effective results. Your Company is also progressing well on ICT implementation and tried pilot projects in some areas. ICT interventions will enable the Company in more effectively providing necessary services to farmers. The RKK data is being utilized in a major way in establishing farmer connect. Rallis is fully aligning all its channels digitally to connect with the farmers. Channel finance and channel partner studies have been introduced during the year for distribution optimization. e-Bandhan adds a dimension of connect between the dealers and the Company and has got a good response during the period. New Products introduced during the year: One new Insecticide was introduced during the year. Your Company is strengthening its presence in the Herbicide segment and has introduced two new Herbicides during the year – ¡ ZEENY: An insecticide, is an advanced formulation for the control of Jassids on Okra, strengthening the F&V portfolio of the Company. ¡ MARK: A new generation, pre-emergent herbicide for the control of weeds in Soybean. ¡ Panida Grande: A novel broad spectrum formulation of pendimethlin for the control of weeds in various crops. The global crop protection sales are down by 8.5% to US$ 51.8 billion at the distributor level in 2015, as against US$ 56 billion in 2014. Key reasons for this are lower prices of agricultural commodities, high inventory levels at distributor level in many countries, strengthening of US dollar against most major currencies, variable weather patterns including a weak monsoon due to the ongoing El Nino phenomenon. The market has been further weakened by low pest/ disease pressure. Weather conditions turned very dry in 2015. El Nino factor delayed rains in Brazil and Argentina, leading to late sowing of crops. This phenomenon prevailing in most of the African and other countries, a weak monsoon in Asia and a dry summer in Northern Europe and Canada affected sentiments. The global planted areas of wheat and soybeans rose, while all other major crops experienced a decline. Maize and rice planting areas marginally declined, while cotton, oilseed, rape and sunflower areas suffered a greater fall in planted areas. There was an increase in the area of stacked trait varieties. Given these adverse conditions, the International Business Division achieved sales of Rs. 402 crores in the current year, as against Rs. 500 crores in 2014. A number of registrations have been obtained during the year and the International Business Division commercialized two products in different geographies. The Company made major forays in the African continent, with several product launches. While there is a drop in insecticide sales, herbicides and fungicides in Latin America did comparatively better. Alliances and Domestic Institutional Business: Managing alliances relationship is one of the strategic pillars of your Company for achieving sustainable and profitable growth. Our strong Alliance business model with a mix of valueadded and off-patent products, allows us to offer certain distinctive products. 2. NON-PESTICIDE PORTFOLIO (NPP) The Company’s Non-Pesticide Portfolio gives it an opportunity to serve the emerging needs of the farming community, by leveraging its traditional connection with the farmers. This enables the farmers to look at the Company as a solution provider for all their agriculture related needs. Your Company continues its efforts to strengthen its nonpesticide portfolio business. The share of NPP sales during the year was 31% of the total revenue. Seeds and Plant Growth Nutrients (PGN): Your Company is continuing its efforts to establish its own seed brands in various segments of cotton, rice, maize, millet, wheat and mustard. High potential segments along with geographies were identified and suitable products selected, with the support of consistent, strong and extensive field activities. As a move towards 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 will not only act as a vehicle for addressing the concerns of deteriorating soil health and crop health, but also facilitate catering to small and marginal farmers. Agri Services: Agri Services portfolio comprises the organic manure product GeoGreen, Samrudh Krishi (SK) initiative, MoPu (More Pulses) initiative and agri implements. During the financial year, sales of GeoGreen were impacted due to severe drought conditions across India. SK initiative was migrated to technology platform, which enables farmers to access our advisory services over android based mobile app. The MoPu initiative continues to add value for farmers covered under the programme. Our Agri implements presence currently consists of sprayers. ASSIGNMENT OF LEASEHOLD RIGHTS FOR TURBHE LAND The Company has signed an Agreement with Ikea India Pvt. Ltd., for assignment of its leasehold rights in respect of its leasehold land at Turbhe, Navi Mumbai, for a gross consideration of Rs. 214 crores. The arrangement is subject to the Company obtaining necessary approvals under various regulations. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS The Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Companies Act, 2013 (Rs.the Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014, form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company. 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., 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 Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (’Listing Regulations’). The Policy, as approved by the Board, is uploaded on the Company’s website. PERFORMANCE OF SUBSIDIARIES (1) Metahelix Life Sciences Ltd. During the year, the Company has acquired the balance Equity Shares in Metahelix Life Sciences Ltd. (Metahelix). Consequently, the shareholding of the Company in Metahelix has increased from 80.51% to 100%, making Metahelix a wholly owned subsidiary of your Company The revenue from operations of Metahelix increased from Rs. 309.99 crores in the previous year, to Rs. 334.08 crores during 2015-16, registering a growth of 7.8% over the previous year. Net profit during the period is Rs. 20.62 crores, as compared to Rs. 16.52 crores in the previous year, which includes an amount of Rs. 6.81 crores of non-operating income. The seed industry experienced one of the worst years in a long time, leading to drop in industry volumes across all the major crops. Under the circumstances, Metahelix continued its impressive performance with growth in volumes and market shares in most crops. Metahelix was one of the few Companies to buck the lower trend in the industry and show growth in sales and volumes. In addition to strong business performance, Metahelix during the year strengthened its brand presence in the market, helping it to realize better prices in the market. It has also strengthened its supply capabilities with the addition of newer locations. (2) Zero Waste Agro Organics Ltd. Net sales of Zero Waste Agro Organics Ltd. (ZWAOL) increased from Rs. 11.35 crores in the previous year to Rs. 11.45 crores during 2015-16. Net profit during the period is Rs. 0.26 crores, as compared to a net loss of Rs. 0.92 crores in the previous year. During the year, ZWAOL has modified its production arrangements with third parties, to move to a comprehensive efficient model of turnkey manufacture, while having stringent quality assurance processes. This process will continue to cover all sites in the coming year. (3) Rallis Chemistry Exports Ltd. The Company is yet to commence commercial activities and currently is not operational. During the year under review, no Company has become or ceased to be a subsidiary of the Company. The Company does not have any associate or joint venture Companies. A statement containing the salient features of the financial position of subsidiary Companies in Form AOC.1 is attached as Annexure A. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The Company has made an investment during the year in acquiring an additional 20,953 Equity Shares in its subsidiary, Metahelix Life Sciences Ltd., for a total consideration of Rs. 73.33 crores. During the year, the Company’s Board approved granting of a Corporate Guarantee in respect of credit facilities of up to Rs. 270 crores availed by Advinus Therapeutics Ltd. (Advinus), to the extent of 16.89% of the total obligations of Advinus under such borrowings. The Guarantee has been issued during the first week of April 2016. The Company has not given any loans or provided any security during the year. FIXED DEPOSITS Your Company has not accepted any public deposits during the financial period under review. RELATED PARTY TRANSACTIONS All Related Party Transactions that were entered into during the financial year were on an arm’s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Regulations (erstwhile Listing Agreement entered into with the Stock Exchanges). There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholder approval under the Listing Regulations. All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company’s website. Details of the transactions with Related Parties are provided in the accompanying financial statements. There were no transactions during the year which would require to be reported in Form AOC.2. RISK MANAGEMENT The Company has in place a Risk Management Policy, pursuant to Section 134 of the Act. During the year, the Company has constituted a new internal Risk Management Committee as a measure of good governance. The Committee reviews the key risks, mitigation plans and progress of the risk management process at periodic intervals. This robust Risk Management framework enables identification and evaluation of business risks and opportunities, seeks to create transparency, minimize adverse impact on business objectives and enhance the Company’s competitive advantage. It also describes the risk management approach across the enterprise at various levels. Major risks identified by the business and functions are systematically addressed through mitigation actions on a periodic basis. Existing control measures are evaluated against the relevant Key Performance Indicators. The Company has laid down procedures to inform the Audit Committee as well as the Board of Directors about risk assessment and management procedures and status. These procedures are periodically reviewed to ensure that the executive management monitors and controls risks. The Internal Audit Department is responsible for coordinating with the various heads of Departments with respect to risk identification, assessment, analysis and mitigation. The major risks forming part of the Enterprise Risk Management process are linked to the audit universe and are also covered as part of the annual risk based audit plan. INTERNAL CONTROLS SYSTEMS AND ADEQUACY The Company has in place an adequate system of internal controls. It has documented policies and procedures covering all financial and operating functions and processes. These have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls for ensuring reliability of financial reporting, monitoring of operations, protecting assets from unauthorized use or losses and compliance with regulations. Details of the internal controls system are given in the Management Discussion and Analysis Report, which forms part of the Board’s Report. DIRECTORS Appointment and Retirement: During the year, Mr. R. Gopalakrishnan retired as a Non-Executive, Non-Independent Director and Chairman of the Company, on reaching the retirement age as per the Board Governance Guidelines adopted by the Company. The Directors wish to place on record their deepest appreciation of the tremendous contribution of Mr. Gopalakrishnan in the success achieved by the Company during his tenure as a Director and Chairman of the Company. Mr. Bhaskar Bhat has been appointed as Additional Director on the Board of the Company with effect from 8th October, 2015. He has been appointed as the Chairman of the Company with effect from 25th December, 2015. Pursuant to the provisions of Section 161 of the Act and Article 116 of the Articles of Association of the Company, Mr. Bhat vacates office and is eligible for appointment. Members are requested to refer to Item No.6 of the Notice of the Annual General Meeting for details. All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Regulation 16 (1) (b) of the Listing Regulations. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management. No Key Managerial Person has been appointed or has retired or resigned during the year. In accordance with the provisions of Section 152 of the Act and in terms of Article 112 (2) of the Articles of Association of the Company, Mr. R. Mukundan retires and is eligible for re-appointment. Governance Guidelines: The Company has adopted Governance Guidelines on Board Effectiveness. The Governance Guidelines cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence Director term, retirement age and Committees of the Board. It also covers aspects relating to nomination, appointment, induction and development of Directors, Director remuneration, Subsidiary oversight, Code of Conduct, Board Effectiveness Review and Mandates of Board Committees. Procedure for Nomination and Appointment of Directors: The Nomination and Remuneration Committee is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements. The Nomination and Remuneration Committee conducts a gap analysis to refresh the Board on a periodic basis, including each time a Director’s appointment or re-appointment is required. The Committee is also responsible for reviewing and vetting the CVs of potential candidates vis-à-vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee. Criteria for Determining Qualifications, Positive Attributes and Independence of a Director: The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and Regulation 19 read with Part D of Schedule II of the Listing Regulations. Independence: In accordance with the above criteria, a Director will be considered as an ‘Independent Director’ if he/ she meets with the criteria for ‘Independent Director’ as laid down in the Act and Regulation 16 (1) (b) of the Listing Regulations. Qualifications: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age and gender. It is also ensured that the Board has an appropriate blend of functional and industry expertise. While recommending the appointment of a Director, the Nomination and Remuneration Committee considers the manner in which the function and domain expertise of the individual will contribute to the overall skilldomain mix of the Board. Positive Attributes: In addition to the duties as prescribed under the Act, the Directors on the Board of the Company are also expected to demonstrate high standards of ethical behavior, strong interpersonal and communication skills and soundness of judgment. Independent Directors are also expected to abide by the ‘Code for Independent Directors’ as outlined in Schedule IV to the Act. Annual Evaluation of Board Performance and Performance of its Committees and of Directors: Pursuant to the applicable provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees. The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors. The Board’s functioning was evaluated on various aspects, including inter alia degree of fulfillment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning. Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Managing Director & CEO. Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings. The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors, who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors. The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights, learning and action points with respect to the evaluation were presented to the Board. REMUNERATION POLICY The Company has adopted a Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and the Listing Regulations. The Remuneration Policy is attached as Annexure B. BOARD AND COMMITTEE MEETINGS A calendar of Board and Committee Meetings to be held during the year was circulated in advance to the Directors. Eight Board Meetings were convened and held during the year. The Board has constituted an Audit Committee with Mr. E. A. Kshirsagar as Chairman and Mr. B. D. Banerjee, Mr. Prakash R. Rastogi and Dr. Y. S. P. Thorat as Members. There have been no instances during the year when recommendations of the Audit Committee were not accepted by the Board. Details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Regulations. DIRECTORS’ RESPONSIBILITY STATEMENT Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors, including audit of the internal financial controls over financial reporting by the Statutory Auditors, and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2015-16. Accordingly, pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that: (i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures; (ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; (iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) they have prepared the annual accounts on a going concern basis; (v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; (vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. CORPORATE SOCIAL RESPONSIBILITY At Rallis, Participatory Sustainable Development has been an integral part of the Company’s Community Development Policy. The Company has adopted an Integrated Sustainability Model, representing the Social and Environment aspects. The Board has constituted a Corporate Social Responsibility Committee headed by Mr. Bharat Vasani as Chairman, with Dr. Y. S. P. Thorat and Mr. V. Shankar as Members. The Company has adopted a Corporate Social Responsibility (CSR) Policy in compliance with the provisions of the Act. As part of its CSR initiatives, the Company has undertaken projects in the areas of Natural Resource Management, including water conservation programmes (Jal Dhan) through water shed and water harvesting and improving soil health; Enhancing Employability through Skill Development and Education, including Affirmative Action initiatives through its RUBY (Rallis Ujjwal Bhavishya Yojana) and TARA (Tata Rallis Women Empowerment Initiative) programmes; Greening projects, including afforestation drive in designated areas at Anegaon in Maharashtra and other States; and health and sanitation projects in Gujarat and Maharashtra. The above projects are in accordance with Schedule VII of the Act. The Company has spent Rs. 3.99 crores towards the CSR projects during the current Financial Year 2015-16. The average net profit of the Company, computed as per Section 198 of the Act, during the three immediately preceding financial years was Rs. 193.97 crores. It was hence required to spend Rs. 3.88 crores on CSR activities during the Financial Year 2015-16, being 2% of the average net profits of the three immediately preceding financial years. The Annual Report on CSR activities is attached as Annexure C. POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment (POSH) Committee, to inquire into complaints of sexual harassment and recommend appropriate action. The Company has not received any complaint of sexual harassment during the financial year 2015-16. VIGIL MECHANISM/ WHISTLE BLOWER POLICY The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations. AUDITORS (1) Statutory Auditors: At the Annual General Meeting (AGM) of the Company held last year, pursuant to the provisions of the Act and the Rules made there under, Deloitte Haskins and Sells LLP (DHS) Chartered Accountants, were appointed as Statutory Auditors of the Company from the conclusion of the 67th AGM held on 29th June, 2015 till the conclusion of the 69th AGM to be held in the year 2017, subject to ratification of their appointment at the AGM to be held in 2016. Members are requested to consider the ratification of the appointment of DHS and authorize the Board of Directors to fix their remuneration. DHS have submitted a certificate, confirming that their appointment, if ratified, will be in accordance with Section 139 read with Section 141 of the Act. (2) Cost Auditors: M/s. N. I. Mehta and Co., Cost Accountants have been appointed to conduct Cost Audits relating to Insecticides (Liquid, Solid and Technical Grade), Fertilizers and Chemicals (Plastics and Polymers) of the Company for the year ending 31st March, 2017. Pursuant to the provisions of Section 148 of the Act read with The Companies (Audit and Auditors) Rules, 2014, Members are requested to consider the ratification of the remuneration payable to M/s. N. I. Mehta & Co. During the year under review, no product of the Company fell under any class of products covered by the Companies (Cost Records and Audit) Rules, 2014 and hence the requirement of filing of the Cost Audit Report with the Ministry of Corporate Affairs was not applicable to the Company for the year. (3) Secretarial Auditors: Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. Parikh & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended 31st March, 2016. The Secretarial Audit Report is attached as Annexure D. The Auditors’ Report and the Secretarial Audit Report for the financial year ended 31st March, 2016 do not contain any qualification, reservation, adverse remark or disclaimer. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, is attached as Annexure E. PARTICULARS OF EMPLOYEES AND REMUNERATION The information required under Section 197 (12) of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure F. The information required under Rule 5 (2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of the Report. In terms of the first proviso to Section 136 of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company. EXTRACT OF ANNUAL RETURN Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT.9 is attached as Annexure G. MANAGEMENT DISCUSSION AND ANALYSIS, CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY REPORT The Management Discussion and Analysis Report and the Report on Corporate Governance, as required under the Listing Regulations, forms part of the Annual Report. The Business Responsibility Reporting is in line with the SEBI Circular dated 4th November, 2015 and the Company has reported its performance as per the BRR framework, describing initiatives taken from an environmental, social and governance perspective. The BRR is uploaded on the website of the Company at the following weblink: http://www. rallis.co.in/BRR.htm ACKNOWLEDGEMENT Your Directors wish to thank all the employees of the Company for their dedicated service during the year. They would also like to place on record their appreciation for the continued co-operation and support received by the Company during the year from bankers, financial institutions, business partners and other stakeholders. On behalf of the Board of Directors BHASKAR BHAT Chairman Place : Mumbai, date : 26th April, 2016 |