I will touch upon the broader context in which your Company is
 operating because the future of your Company will be shaped by changes
 in the macro environment. The Company performance and financial results
 will be presented by the Managing Director. It is noteworthy that your
 Company has crossed revenue milestone of Rs.1000 Crore and has posted
 its highest-ever net profit after tax, of Rs.126 Crore for the year
 ended March 31, 2011. Another significant achievement for your Company
 is the commissioning of a new manufacturing unit in Dahej which should
 be in commercial production during this quarter and would provide a new
 growth platform through contract manufacturing.
 
 In the past, I have spoken about how factors like increasing world
 population, growth in developing nations and increasing urbanization
 are spurring the demand for food. When it comes to India, the pressure
 to meet food requirements becomes even more acute. There have been
 estimates that India will grow at 8 to 9% in the coming years. This
 means that Indias ‘trillion dollar GDP will double every eight years.
 Consumption expenditure constitutes a major component of Indias GDP.
 This will include food, personal transportation, housing etc. Further,
 Indias population is going to increase gradually though at
 decelerating pace for the next two decades. This means more people with
 more income, and hence the need for more food.
 
 Higher food inflation in India continues to be of concern and, in turn,
 is punishing poor people hard. A 10% increase could push close to 30
 million Indians below the poverty line, says an ADB study titled
 ‘Global Food Price Inflation and Developing Asia. As per IMFs Asia
 desk, “India is a chronically supply-constrained economy, with chronic
 excess demand.  In the course of the economic cycle, therefore, price
 pressures tend to be exaggerated.”
 
 A scenario where food demand is far in excess of supply, is not
 unlikely in the years to come. Last year, I reiterated this fact
 through a chart on anticipated supply-demand gap for key food items
 with the gap escalating over the years.
 
 The crux of the matter is that world at large, and India in particular
 are short of food. There have been noteworthy initiatives by the
 Government to address this evolving situation. The ministry of
 agriculture has designed interventions to get more acreage for certain
 crops and to use better high-yielding seeds. The problem however, is
 complex and requires attention from several sectors.
 
 Your Company is well placed to play a positive role as it deals with
 increasing food production and productivity. Rallis can convert this
 challenge into an exciting opportunity, by leveraging its current
 product portfolio and extending into other agro-inputs and services to
 emerge as a complete service provider to the Indian farmer. Your
 Company realizes that for it to have a consistent and meaningful growth
 in the agricultural space, it must put together two halves of the same
 fruit: (a) Increasing crop productivity & production and (b) Reducing
 barriers to marketing for farmers.
 
 a. Increasing Crop production:
 
 Rallis has invested time and resources to understand farmers needs and
 created products that address impediments towards greater productivity.
 Its comprehensive range of crop protection chemicals and services are
 spread across 80% of Indias districts through an extensive
 distribution network of loyal and supportive dealers and retailers.
 Through its extensive relationship initiatives your Company listens to
 the evolving needs of farmers and comes out with new and relevant
 products. Your Company keenly monitors what is internally called
 ‘innovation turnover index to ensure that the sale from new products
 is a significant proportion of total sales. Over the last few years
 your Company has introduced new products, a testimony to the technical
 expertise and innovative streak that your Company has exhibited to
 cater its most important customer: the Indian farmer. As a progressive
 move towards sustainability, the Company has eliminated ‘red triangle
 products from its portfolio.
 
 Your Company has also done a noteworthy job in marketing and branding
 several new products so that ready adoption and consumption by farmers
 follows. The Company is now widely known for its quick establishment of
 brands through farmer-centric launches, field demonstrations and
 leveraging the immense goodwill garnered through farmer-relationship
 initiatives like Rallis Kisan Kutumba. A customer engagement survey by
 Gallup reveals that when it comes to awareness of brands in Indian crop
 protection market, your Company has 7 of the top 12 brands in the
 country. Top 3 brands of your Company by revenue also contribute close
 to Rs. 250 Crore in total sales.
 
 Source: Unaided recall, Gallup Customer Engagement Survey
 
 This year your Company completed acquisition of a majority stake in
 Metahelix Life Sciences, a research led seeds Company. Seed is the most
 important and primary Agriculture input. Its quality has a direct
 impact on production.  With Metahelix, your Company will be in a strong
 position to provide a trustworthy portfolio of seeds to the Indian
 farmer. Availability of such seeds will have a direct impact on
 farmers productivity. For instance, Bollworm and Spodoptera control
 are critical for ensuring a good commercial cotton crop and Metahelix
 is working on some exclusive solutions of Bt Cotton to achieve this
 objective. We are confident that in time to come we shall be able to
 come out with appropriate seeds for a wider range of crops to enhance
 productivity.
 
 b. Reducing barriers to marketing for farmers:
 
 Gains in productivity will not be sufficient unless it is complemented
 by appropriate market linkages. A large majority of farmers still
 struggle to get basic information on prices, trends and forecasts in
 order to take an informed decision on when and where to sell his
 produce. Structural reforms and an equal participation from private and
 public sector is essential to bridge information gap and generate
 infrastructure for farmers to get remunerative rates for their produce.
 
 States have been attempting to amend the Agricultural Produce Marketing
 Acts that will allow much more competition and greater participation of
 the private sector in the marketing of agricultural produce—thereby
 enabling farmers to get the right price and making the sector more
 dynamic. However the current situation is far from satisfactory.  The
 need is to free up marketing and create a reformed agri-marketing set
 up which gives farmers the value that they deserve.
 
 Your Company, through its relationship programmes and various
 initiatives, has empowered farmers by giving them timely information
 and also undertaken schemes where the final produce is bought from the
 farmers at a fair price and thus absolving the need for farmers to
 undertake a complicated journey of approaching mandis and negotiating a
 good price.
 
 Both the abovementioned points are illustrated through the Company
 initiative of MoPu (More Pulses) that was launched this year.
 
 More Pulses: An Example
 
 Pulses are the most economical and relevant source of protein in India
 where a predominant proportion of population is vegetarian. The need
 for the initiative was felt with the sky-rocketing prices of pulses and
 the realization that despite the massive growth in population and the
 resulting consumption, the production of pulses in India has been
 stagnant for the last 20 years. Despite being the largest producer of
 pulses, India imports close to 3mn tonnes per annum. What is worrisome
 is that demand for pulses will double in the next 9-10 years and the
 gap would need to be entirely filled by imports unless we double the
 acreage or double the productivity. Since either of the above may not
 be feasible in isolation, the MoPu initiative looked at a mix of both.
 
 The initiative started in Tamilnadu, where your Company worked along
 with a Tamilnadu-World Bank institution called IAMWARM. The objective
 of IAMWARM is to intensify efforts to improve productivity and income
 by productive use of water. The pilot started with the objective of
 enhancing the cultivation of black gram by providing farmers quality
 black gram seeds, critical technology interventions to increase yield
 through Rallis PoP (package of practice) and creating a mechanism for
 buy-back of the produce at fair prices.
 
 The following approach of the pilot has now been extended to other
 pulses and states, in what has become a national initiative for your
 Company:
 
 - Your Company has created multiple farmer commodity groups with the
 help of the Department of Agriculture
 
 - The groups engaged with Rallis for the right cultivation practices,
 inputs and selling of material
 
 - The buy-back plan was routed through the commodity group concept
 
 - Rallis developed seed farms to multiply and produce quality black
 gram seeds and supply the same to farmers
 
 - Rallis along with TNAU scientists identified stages for intervention
 in the agricultural practices followed by the farmers in the area that
 included seed treatment, soil health, techniques of cultivation and
 pest management
 
 The most gratifying result of the MoPu initiative has been to see yield
 improvement of up to 40% to 500 kg/ac in Tamilnadu which increased the
 farmer income by another Rs. 5000 per acre. The buyback provision also
 ensured that the farmers dont undertake the hassle of finding the
 right buyer. Electronic payment was directly made into the local
 account of farmers. Transparent pricing based on market rates ensured
 high level of trust and engagement.
 
 Acknowledgement
 
 I had mentioned last year that your Company had become subsidiary of
 Tata Chemicals and there was an interest to see how we could leverage
 synergies between the two companies to generate new business
 opportunities. I am happy to tell you that MoPu is a great example of
 how the two companies have come together. Pulses sourced from MoPu are
 being branded and marketed by Tata Chemicals Ltd under the i-Shakti
 brand in the retail market. Between the two companies we have empowered
 farmers across the value chain and taken care of his needs in entirety
 from sowing to harvesting to marketing. We now aspire to cover many
 more farmers and crops as part of the initiative to make a substantial
 impact on Indian farmers and agriculture.
 
 I would like to end by expressing my sincere appreciation for the
 continued support of the shareholders, employees, Tata Group, suppliers
 and commercial partners during the year. I would also like to thank my
 colleagues on the Board for their support and guidance to the Companys
 management, which goes a long way in encouraging the management in
 meeting the challenges in its quest for meaningful growth.
 
                                                               Chairman
 
 Mumbai
 May 18, 2011