Rallis India

The Directors hereby present their Sixtieth Annual Report on the
 business and operations of the Company and the financial accounts for
 the year ended 31st March, 2008.
 
 FINANCIAL RESULTS
 
                                                          Rs. Crores
 
                                                   2007-08    2006-07
 
 Turnover                                          671.07     618.97
 Other Income                                      111.20      83.78
                                                   782.27     702.75
 Profit/(-) Loss before Interest, Depreciation 
 and Tax                                           169.90      96.91
 Interest                                           (3.66)    (10.89)
 Depreciation                                      (20.07)    (31.00)
 Profit/(-) Loss before Tax                        146.17      55.02
 Provision for Tax                                 (20.33)     (6.00)
 Fringe Benefit Tax                                 (1.66)     (1.57)
 Deferred Tax                                        1.01       8.86
 Tax Provision written back                           -         1.80
                                    
 Profit/-) Loss after Tax                          125.19      58.11
 Balance of Profit brought forward from previous 
 year                                               66.68      33.32
                                                   191.87      91.43
 Appropriations
 Transfer from/(to) General Reserve                (12.52)     (5.81)
 Proposed Preference Dividend                       (6.60)     (6.60)
 Income tax on Preference Dividend                  (1.12)     (1.12)
 Proposed Equity Dividend                          (19.17)     (9.59)
 Income tax on Equity Dividend                      (3.26)     (1.63)
 Balance Profit/(-) Loss carried forward to 
 Balance Sheet                                     149.20      66.68
 
 DIVIDEND
 
 The Directors are pleased to recommend a dividend of 160% on the Equity
 Shares of the Company (Previous year 80%). Dividend is also recommended
 on the 7.5%, Cumulative Redeemable Preference Shares of the Company.
 
 COMPANY PERFORMANCE
 
 During the year, the Company earned a net profit of Rs.125.31 Crores,
 as against a net profit of Rs.58.57 Crores in the previous year, on
 consolidated basis.
 
 OPERATIONS
 
 Pesticides
 
 The pesticide industry experienced a healthy growth estimated at 10%
 during the year. This was driven by a well distributed and normal South
 West Monsoon, leading to normal acreages of most crops. The domestic
 formulation business registered a growth of 12% over the previous year.
 Your Company has significantly improved volumes in the domestic market
 for its key products during the year. While the products launched in
 the previous year, such as APPLAUD and TAQAT have performed extremely
 well, new products launched during the year 2007-08 like TAKUMI and
 SEDNA have also received good response from Rice and Chilli farmers.
 
 During the year your Company has taken several initiatives to
 strengthen farmer contact programmes. The Company has also initiated
 programs like Bhagidari Sabhas towards strengthening the relationship
 with channel partners who are vital links to the farmers.
 
 The International business registered an underlying volume growth of 8%
 over the previous year. While the international business was impacted
 by sharp appreciation of Rupee during the year against dollar, its
 growth has been driven by successful implementation of APOLLO
 initiatives that resulted in additional business through supply
 contracts, registration based sales and entry into new geographies.
 
 Domestic Institutional Business also registered a reasonable growth
 during the year.  Seeds and Plant Growth Nutrients
 
 Your Company has progressed its seeds business through distribution of
 Bt Cotton and Paddy hybrid seeds.  Bt Cotton seeds registered a growth
 over the previous year.
 
 In the Plant Growth Nutrient segment your Companys initiative of
 product rationalization and focusing on high value creating products
 has yielded good results. The performance of the Plant Growth Nutrient
 business improved during the year. The Company is evaluating addition
 of few new products in its range for addressing the growing demand for
 improving plant health and quality of produce.
 
 Leather Chemicals
 
 Leather Chemicals sales including export of myrobalan extract was
 higher by 5% compared to 2006-07. Gross margins were higher by 10% in
 spite of difficult marketing conditions on account of the rupee
 strengthening against the US Dollar.
 
 Research & Development
 
 There was continued progress in the NMITLI (New Millennium Indian
 Technology Leadership Initiative) project.  Eight lead molecules were
 identified as Fungicides and are being evaluated on major crop diseases
 under field conditions for further development. The application to file
 the patents for the new molecules developed under NMITLI Project is
 ready and is being submitted through CSIR (Council of Scientific and
 Industrial Research), New Delhi.
 
 Developing new formulations and combinations to ensure better efficacy
 and differentiation are focus areas under Research and Development.
 Number of new formulations and combinations are at various stages of
 development. A number of registration dossiers have been submitted
 during the year.
 
 INDUSTRIAL RELATIONS
 
 Harmonious industrial relations prevailed at all Units of the Company
 during 2007-08.  The overall manpower of the Company reduced from 1038
 to 1016 during the year.
 
 SUBSIDIARY
 
 The Company has been granted exemption by the Ministry of Corporate
 Affairs, from attaching with its accounts, the individual accounts of
 its subsidiary, Rallis Australasia Pty Ltd. However,the Consolidated
 Financial Statements of the Subsidiary (prepared in accordance with
 Accounting Standard 21 issued by the Institute of Chartered Accountants
 of India), form part of the Annual Report and are reflected in the
 Consolidated Accounts of the Company. Further, as directed by the
 Ministry of Corporate Affairs, the financial data of the subsidiary
 have been furnished underSummary of Financial Information of
 Subsidiary Companyand forms part of this Annual Report.  The annual
 accounts of the subsidiary and related detailed information will be
 kept at the registered office of the Company and will be available to
 investors seeking information at any time.
 
 DIRECTORS
 
 Dr. V. S. Sohoni has been appointed as Additional Director of the
 Company with effect from 1st March, 2008.  Pursuant to Section 260 of
 the Companies Act, 1956 and Article 116 of the Articles of Association
 of the Company, Dr. Sohoni vacates office and is eligible for
 appointment.
 
 Mr. Prasad R. Menon has stepped down from the Board with effect from
 26th May, 2007. The Directors place on record their appreciation of the
 valuable services rendered by Mr. Menon during his tenure as Director
 of your Company.
 
 In accordance with Article 112(2) of the Articles of Association of the
 Company, Mr. H. R. Khusrokhan and Mr. E. A. Kshirsagar retire and are
 eligible for re-appointment.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors,
 based on the representations received from the Operating Management,
 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, in the selection of the accounting policies, consulted
 the Statutory Auditors and have applied them consistently, and made
 judgements 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, to the best of their
 knowledge and ability, for the maintenance of adequate accounting
 records in accordance with the provisions of the Companies Act, 1956,
 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.
 
 CORPORATE GOVERNANCE AND INTERNAL AUDIT
 
 Besides continuing the usage of expertise of a single large firm of
 Internal Auditors, the Internal Audit Department, under the direction
 of the Chief Internal Auditor, also undertook a substantial number of
 internal audits by using internal resources, with a view to
 encompassing a larger universe. The benefits through this twin- pronged
 approach resulted in providing more assurance on compliance and
 sustenance in internal controls.  Besides, this approach has also
 helped in establishing an evolving partnership with the various
 Function Owners.
 
 As a further Value addition, Internal Audit Department also took up
 reviews in the areas of Quality Assurance as well as Environment,
 Health and Safety, as a support to the work already being done by the
 respective Functions.
 
 Besides these, as a Consulting initiative, Internal Audit Department
 continued the active facilitation and training efforts in the areas of
 Standard Operating Procedures and Control Self Assessment.
 
 The Enterprise Risk Management framework, as well as the CEO/ CFO
 certification as required under Clause 49 of the Listing Agreement with
 Stock Exchanges, for controls testing pertaining to financial
 reporting, were well established.
 
 A Report on Corporate Governance, as required under Clause 49 of the
 Listing Agreement is annexed.
 
 AUDITORS
 
 At the Annual General Meeting, members will be required to appoint
 Auditors for the current year and fix their remuneration. M/s. Deloitte
 Haskins & Sells, the existing Auditors have furnished a certificate
 regarding their eligibility for re-appointment. The Directors recommend
 that they be re-appointed as Auditors of the Company for the current
 year.
 
 COST AUDITORS
 
 Pursuant to the directives of the Central Government under the
 provisions of Section 233B of the Companies Act, 1956 qualified Cost
 Auditors have been appointed to conduct Cost Audits relating to
 Insecticides (Technical Grade and Formulations) and Fertilizers of the
 Company.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 As required under Section 217(1 )(e) of the Companies Act, 1956 read
 with the Companies (Disclosure of Particulars.  in the Report of
 Directors) Rules, 1988, the information relating to conservation of
 energy, technology absorption and foreign exchange earnings and outgo
 is annexed.
 
 PARTICULARS OF EMPLOYEES
 
 In accordance with the provisions of Section 217 (2A) of the Companies
 Act, 1956, read with the Companies (Particulars of Employees) Rules,
 1975 as amended, the statement giving the required information of the
 employees covered by this section of the Act is given in the Annexure
 forming part of this Report.
 
 ACKNOWLEDGEMENT
 
 Your Directors acknowledge the continued co-operation and support
 received by the Company during the year from bankers, financial
 institutions, business partners and other stakeholders. The Board would
 also like to acknowledge the employees for their dedicated service.
 
                                     On behalf of the Board of Directors
 
                                             R. GOPALAKRISHNAN
                                                   Chairman
 Mumbai, 15th April, 2008.