1.  We have audited the attached Balance Sheet of RALLIS INDIA LIMTED
 (the “Company”) as at 31st March, 2011, the Profit and Loss Account and
 the Cash Flow Statement of the Company 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 the 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 the disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and the significant estimates
 made by the 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 (“CARO”
 / the “Order”) issued by the Central Government in terms of Section
 227(4A) of the Companies Act, 1956, we enclose 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
 the Cash Flow Statement dealt with by this report are in compliance
 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, 2011;
 
 (ii) in the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on that date and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 5.  On the basis of the written representations received from the
 Directors as on 31st March, 2011 taken on record by the Board of
 Directors, none of the Directors is disqualified as on 31st March, 2011
 from being appointed as a director in terms of Section 274(1)(g) of the
 Companies Act, 1956.
 
 ANNEXURE TO THE AUDITORS REPORT
 (Referred to in paragraph 3 of our report of even date)
 
 (i) Having regard to the nature of the Companys
 business/activities/result, the provisions of clause 4(xiii) of CARO
 are not applicable.  
 
 (ii) In respect of its fixed assets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of the fixed assets.
 
 (b) Most of the Companys fixed assets were physically verified during
 the year by the Management in accordance with a regular programme of
 verification which, in our opinion, provides for the physical
 verification of all the fixed assets at reasonable intervals. The fixed
 assets were physically verified during the year by the Management in
 accordance with a regular programme 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) 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.
 
 (iii) In respect of its inventory:
 
 (a) As explained to us, the inventories, excluding materials in transit
 and materials lying with third parties were physically verified during
 the year by the Management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanation
 given to us, the procedures of physical verification of inventories
 followed by the Management were 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.
 
 (iv) The Company has neither granted nor taken any loans, secured or
 unsecured, to/from companies, firms or other parties listed in the
 Register maintained under Section 301 of the Companies Act, 1956.
 
 (v) In our opinion and according to the information and explanations
 given to us, having regard to the explanations that some of the items
 purchased are of special nature and suitable alternative sources are
 not readily available for obtaining comparable quotations, there is an
 adequate internal control system commensurate with the size of the
 Company and the nature of its business with regard to purchases of
 inventory and fixed assets and the sale of goods and services. During
 the course of our audit, we have not observed any major weakness in
 such internal control system.
 
 (vi) 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 Section
 301 that were required to be entered in the Register maintained under
 the said Section have been so entered.
 
 (b) Where each of such transaction is in excess of Rs. 5 lakhs in
 respect of any party, the transactions have been made at prices which
 are prima facie reasonable having regard to the prevailing market
 prices at the relevant time except in respect of certain purchases for
 which comparable quotations are not available and in respect of which
 we are unable to comment.
 
 (vii) According to the information and explanations given to us, the
 Company has not accepted any deposit from the public during the year.
 
 According to the information and explanations given to us, no order 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 respect.
 
 (viii) In our opinion, the Company has an adequate internal audit
 system commensurate with the size and the nature of its business.
 
 (ix) We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules made by the Central Government for the
 maintenance of cost records under Section 209(1)(d) of the Companies
 Act, 1956 in respect of fertilisers and insecticides business and 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.
 
 (x) According to the information and explanations given to us in
 respect of statutory dues:
 
 (a) The Company has generally been regular in depositing undisputed
 dues, including Provident Fund, Investor Education and Protection Fund,
 Employees State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
 Tax, Custom Duty, Excise Duty, Cess and other material statutory dues
 applicable to it with the appropriate authorities.
 
 (b) There were no undisputed amounts payable in respect of Income-tax,
 Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory
 dues in arrears as at 31st March, 2011 for a period of more than six
 months from the date they became payable.
 
 (c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
 Custom Duty, Excise Duty and Cess which have not been deposited as on
 31st March, 2011 on account of disputes are given below:
 
 Statute           Nature of Dues       Forum where Dispute
                                           is pending
 
 Sales Tax Laws    Sales Tax            Joint Commissioner
                   (including interest  (Appeals)
                   and penalty)
 
                                        Additional Commissioner 
 
                                        Deputy Commissioner
 
 
 
                                        Assistant Commissioner
 
                                        Tribunal
 
                                        Commercial Tax Officer
 
 Finance Act,      Service Tax          Assistant Commissioner
 1994
 
 Customs Act,      Custom Duty          High Court
 1962
 
                                        Additional Commissioner
 
 Central Excise    Excise duty          Commissioner
 Act, 1944         (including Interest
                   and Penalty)
 
                                        Joint Commissioner
 
                                        Deputy Commissioner
 
                                        Tribunal
 
 Income Tax        Income tax           Income Tax Appellant
 Act, 1961         (including interest  Tribunal, Mumbai
                   and Penalty)
 
                                        Commissioner of Income
                                        Tax (Appeals)
 
 
 Statute          Period to which the                     Amount
                  amount relates                         involved
                                                       (Rs. in lacs)
 
 Sales Tax Laws   1998-99, 1999-00, 2000-01,             503.72
                  2001-02, 2005-06, 2006-07,
                  2007-08, 2009-10, and 2010-11
 
 
                  1990-91, 1998-99, 1994-95,             346.06
                  2001-02 and 2007-08
 
 
                  1983-84, 1992-93, 1994-95,             622.81
                  1996-97, 1997-98, 1998-99,
                  1999-00, 2000-01, 2001-02,
                  2022-03, 2003-04, 2004-05,
                  2005-06, 2006-07
 
                  1993-94, 1998-99, 1999-00,             119.15
                  2001-02, 2003-04, 2004-05,
                  2007-08 and 2009-10
 
                  1992-93, 1995-96, 1996-97,             134.83
                  1997-98, 1998-99, 1999-00,
                  2000-01, 2001-02 and 2003-04
               
                  1990-91, 1996-97 and 1997-98            12.13
 
 Finance Act,     2001-02, 2005-08, 2006-07,              34.68
 1994             2007-08, and 2010
 
 
 Customs Act,     1990-91                                144.10
 1962
 
                  2008-09                                  5.40
 
 
 Central Excise   2001-02 and 2005-06                     47.73
 Act, 1944
                  1999-2000 and 2000-01                   62.80
 
                  1999-00                                  8.48
 
                  1986-87, 1990-911996 to 2002           910.46
 
 Incom Tax        Asst. Yr. 2006-07                       13.50
 Act, 1961
 
                  Asst. Yr. 2007-08 and 2008-09          609.35
 
 
 
 (xi) 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.
 
 (xii) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in the repayment of dues to
 banks, financial institutions and debenture holders.  
 
 (xiii) 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.  
 
 (xiv) 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.  
 
 (xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from
 banks and financial institutions. Therefore, the provisions of clause
 4(xv) of the Order are not applicable to the Company.  
 
 (xvi) In our opinion and according to the information and explanations
 given to us, the term loans have been applied for the purposes for
 which they were obtained, other than temporary deployment pending
 application.
 
 (xvii)In our opinion and according to the information and explanations
 given to us and on an overall examination of the Balance Sheet, we
 report that funds raised on short-term basis have not been used during
 the year for long- term investment.  
 
 (xviii)According to the information and explanation given to us, during
 the year, the Company has not made any preferential allotment of shares
 to parties and companies covered in the register maintained under
 section 301 of the Companies Act, 1956. Therefore, the provisions of
 paragraph 4(xviii) of CARO are not applicable to the Company.  
 
 (xix) According to the information and explanations given to us, during
 the period covered by our audit report, the Company had issued 750
 Secured, Redeemable, Non-Convertible Debentures of Rs. 10 lacs each.
 The Company has created security in respect of the debentures issued.  
 
 (xx) 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. Therefore, the provisions of paragraph 4(xx) of
 CARO are not applicable to the Company.
 
 (xxi) To the best of our knowledge and according to the information and
 explanations given to us, no fraud by the Company and no material fraud
 on the Company has been noticed or reported during the year.
 
 
                                          For DELOITTE HASKINS & SELLS
 
                                                 Chartered Accountants 
                                            (Registration No. 117366W)
 
                                                  Sanjiv V. Pilgaonkar
 
                                                               Partner
 
                                                (Membership No. 39826)
 
 Mumbai, 29th April, 2011.