Rallis India

1.  We have audited the attached Balance Sheet of RALLIS INDIA LIMITED
 as at 31st March, 2009, the Profit and Loss Account for the year ended
 on that date and the Cash Flow Statement for the year ended on that
 date, both annexed thereto.  These financial statements are the
 responsibility of the Companys management. Our responsibility is to
 express an opinion on these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with auditing standards
 generally accepted in India.Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis,evidence supporting the amounts and
 disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management,as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors Report) Order 2003, (the
 Order) issued by the Central Government of India in terms of Section
 227(4A) of the Companies Act, 1956, we give in the Annexure a statement
 on the matters specified in paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report as follows:
 
 (a) we have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 (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 Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (d) in our opinion, the Balance Sheet, the Profit and Loss Account and
 Cash Flow Statement dealt with by this report comply with the
 Accounting Standards referred to in Section 211 (3C) of the Companies
 Act, 1956;
 
 (e) in our opinion, and to the best of our information and according to
 the explanations given to us, the said accounts, give the information
 required by the Companies Act, 1956, in the manner so required and give
 a true and fair view in conformity with the accounting principles
 generally accepted in India:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2009;
 
 (ii) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 5.  On the basis of the written representations from the directors as
 on 31st March,2009 and taken on record by the Board of Directors, we
 report that none of the directors is disqualified as on 31st March,
 2009 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Companies Act, 1956.
 
 ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our
 report of even date)
 
 1.  In respect of its fixed assets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of most of its fixed
 assets.
 
 (b) Most of the Companys fixed assets were physically verified by the
 management in accordance with a programme of verification, which
 provides physical verification of all fixed assets at intervals which
 in our opinion are reasonable. According to the information and
 explanations given to us no material discrepancies were noticed on such
 verification.
 
 (c) The fixed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of the fixed assets of the Company
 and such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 2.  In respect of its inventories
 
 (a) As explained to us, inventories,excluding materials in transit and
 materials lying with third parties, were physically verified by the
 management at all locations at reasonable intervals.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the management are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on physical
 verification.
 
 3.  According to information and explanation given to us,Company has
 not taken or granted any secured or unsecured loan from or to
 companies, firms or other parties covered by the register maintained
 under Section 301 of the Companies Act, 1956.Therefore, the provisions
 of clauses (iii) (a) to (iii) (g) of the Order are not applicable to
 the Company.
 
 4.  In our opinion and according to the information and explanations
 given to us, having regard to the explanation that some of the items
 purchased are of special nature and suitable alternative sources do not
 exist for obtaining comparable quotations, there are adequate internal
 control systems commensurate with the size of the Company and the
 nature of its business for the purchase of inventory and fixed assets
 and for the sale of goods and services. During the course of our audit
 and according to the information and explanation given to us, we have
 neither come across nor have we been informed of any continuing failure
 to correct major weaknesses in such internal control system.
 
 5.  In respect of contracts or arrangements entered in the register
 maintained in pursuance of Section 301 of the Companies Act, 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) the particulars of contracts or arrangements referred to in Section
 301 have been entered in the register required to be maintained under
 that section; and
 
 (b) in our opinion and having regard to our comments in paragraph 4
 above, the transactions exceeding the value of Rupees Five lacs in
 respect of any party during the year, have been made at prices which
 are prima facie reasonable having regard to the prevailing market
 prices at the relevant time, where such market prices are available.
 
 6.  According to the information and explanations given to us:
 
 (a) during the year the Company has not accepted any new deposits from
 the public within the purview of Sections 58A and 58AA of the Companies
 Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975.
 
 (b) the deposits unpaid as at the year end are in the nature of
 unclaimed deposits; and
 
 (c) no Order under the aforesaid sections has been passed by the
 Company Law Board or National Company Law Tribunal or the Reserve Bank
 of India or any court or any other Tribunal in this respect.
 
 7.  In our opinion, the Company has an adequate internal audit system
 commensurate with the size and nature of its business.
 
 8.  We have broadly reviewed the books of account maintained by the
 Company in respect of its fertilisers and insecticides business
 pursuant to the Order made by the Central Government for the
 maintenance of cost records under Section 209(1 )(d) of the Companies
 Act, 1956,We are of the opinion that prima facie, the prescribed
 accounts and records have been made and maintained. We have, however,
 not made a detailed examination of the records with a view to
 determining whether they are accurate or complete. To the best of our
 knowledge and according to the information and explanations given to
 us, the Central Government has not prescribed the maintenance of cost
 records for any other product of the Company.
 
 9.  In respect of statutory and other dues:
 
 (a) In our opinion and according to the information and explanation
 given to us, the Company has generally been regular in depositing
 undisputed statutory dues relating to Provident Fund,Employees State
 Insurance, Income Tax, Sales Tax, Value Added Tax, Service Tax, Customs
 Duty, Excise Duty, Wealth Tax, Investors Education and Protection Fund,
 Cess and other material statutory dues applicable to it with the
 appropriate authorities during the year.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of Provident Fund, Employees
 State Insurance, Income Tax, Sales Tax, Value Added Tax, Service Tax,
 Customs Duty, Excise Duty, Wealth Tax, Investors Education and
 Protection Fund, Cess and other material statutory dues applicable to
 it, were in arrears, as at 31st March, 2009 for a period of more than
 six months from the date they became payable.
 
 (c) According to the information and explanation given to us;
 
 (i) there were no disputed dues as regards Wealth Tax and Cess; and
 
 (ii) details of disputed amounts of Income Tax, Sales Tax, Service Tax,
 Customs Duty, and Excise Duty which have not been deposited as at the
 year end are given below:
 
 Name of the             Nature of              Amount
 Statute                 dues                  (Rs. in lacs)
 
 Sales Tax Laws       Sales Tax (including        481.94
                      interest and
                      penalty)
                                                  332.98
                                                  187.99
                                                   79.04
                                                  140.84
                                                   46.66
 Finance Act, 1994    Service Tax                   1.50
 Customs Act, 1962    Custom Duty                 144.10
 Central Excise Act,  Excise duty                  65.66
 1944                 (including Interest
                      and Penalty)
                                                   62.80
                                                    8.48
                                                  935.46
 Income Tax Act,      Income tax                  139.61
 1961                 (includinq interest)
 
 
 Financial year to which         Forum where pending
 the matter pertains
 
 1998-99,1999-00,                Joint Commissioner
 2000-01, 2001 -02 and           (Appeals)
 2006-07
 1990-91,1998-99,                Additional
 2000-01 and 2001-02             Commissioner
 1983-84,1992-93,                Deputy Commissioner
 1994-95,1996-97,
 1997-98,1998-99,
 1999-00,2000-01,
 2001-02,2002-03 and
 2003-04
 1993-94,1998-99,                Assistant
 1997-98,1999-00,                Commissioner
 2001-02,2003-04,
 2004-05 and 2007-08
 1992-93,1994-95,                Tribunal
 1997-98,1998-99,
 1999-00,2000-01,
 2001-02 and 2002-03
 1990-91,1995-96,                Commercial Tax Officer
 1996-97,1997-98 and
 1998-99
 2001 -02 and 2006-07            Assistant
                                 Commissioner
 1990-91                         High Court
 1988 to 1992,                   Commissioner
 2001-02 and 2005-06
 1999-2001                       Joint Commissioner
 1999-00                         Deputy Commissioner
 1986-87,1990-91 and             Tribunal
 1996 to 2002
 Asst. Yr. 2005-06,              Commissioner of
 2006-07                         IncomeTax (Appeals)
 
 10.  The Company does not have any accumulated losses as at the year
 end. The Company has not incurred cash losses during the financial year
 covered by our audit and in immediately preceding financial year.
 
 11.  According to the information and explanations given to us, the
 Company has not defaulted in repayment of dues to financial
 institutions and/or banks. There were no amounts outstanding on account
 of debentures during the year.
 
 12.  In our opinion and according to the information and explanations
 given to us, the Company has not granted any loans and advances on the
 basis of security by way of pledge of shares, debentures and other
 securities. Therefore, the provisions of clause 4
 
 (xii) of the Order are not applicable to the Company.
 
 13.  In our opinion and according to the information and explanations
 given to us, the Company is not a chit fund, nidhi or a mutual benefit
 society. Therefore, the provisions of clause 4(xiii) of the Order are
 not applicable to the Company.
 
 14.  In our opinion and according to the information and explanations
 given to us, the Company is not a dealer or trader in shares,
 securities, debentures and other investments. Therefore, the provisions
 of clause 4
 
 (xiv) of the Order are not applicable to the Company.
 
 15.  According to the information and explanation given to us, the
 Company has given a guarantee for a loan taken by its subsidiary from a
 bank. Having regard to the explanation that the subsidiary is wholly
 owned, in our opinion, the terms and conditions of the guarantee are
 not prima facie prejudicial to the interest of the Company.
 
 16.  To the best of our knowledge and belief and according to the
 information and explanations given to us, in our opinion, term loans
 availed by the Company were, prima facie, applied by the Company for
 the purposes for which the loans were obtained, other than temporary
 deployment pending application.
 
 17.  According to the information and explanations given to us, and on
 an overall examination of the balance sheet of the Company, funds
 raised on short term basis have, prima facie, not been used during the
 year for long term investment.
 
 18.  According to the information and explanations given to us, the
 Company has not made preferential allotment of shares during the period
 covered by pur audit. Therefore, the provisions of clause 4(xviii) of
 the Order are not applicable to the Company.
 
 19.  According to the information and explanations given to us, there
 are no amounts outstanding in respect of secured debentures as at the
 year end. Therefore, the provisions of clause 4(xix) of the Order are
 not applicable to the Company.  .
 
 20.  According to the information and explanation given to us, the
 Company has not raised any money by public issue,during the period
 covered by our audit.
 
 21.  To the best of our knowledge and belief and according to the
 information and explanations given to us, no fraud on or by the Company
 was noticed or reported during the year.
 
                                          For DELOITTE HASKINS & SELLS
                                                 Chartered Accountants
 
                                                 Sanjiv V. Pilgaonkar
                                                              Partner
                                                 Membership No. 39826
 Mumbai, 15th April, 2009