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EQUITY - MARKET SCREENER

Rallis India Ltd
Industry :  Pesticides / Agrochemicals - Indian
BSE Code
ISIN Demat
Book Value()
500355
INE613A01020
93.9197467
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
RALLIS
55.13
5467.49
EPS(TTM)
Face Value()
Div & Yield %
5.1
1
0.89
 

As on: Apr 20, 2024 07:43 PM

To the Members of Rallis India Limited

The Directors present their Seventy-Fifth (75th) Annual Report on the business and operations of Rallis India Limited (‘the Company' or ‘Rallis') along with the Audited Financial Statements for the Financial Year (‘FY') ended March 31, 2023.

Financial Results

(` in crore)

Particulars 2022-2023 2021-2022
Revenue from operations 2,966.97 2,603.93
Other income 12.71 27.44
Total Income 2,979.68 2,631.37
Profit before finance cost, depreciation and tax 231.04 301.58
Finance costs 12.24 4.79
Depreciation 91.36 74.31
Profit before exceptional items and tax 127.44 222.48
Exceptional items 0.62 -
Profit before tax 128.06 222.48
Provision for tax 45.19 62.18
Deferred tax (9.07) (3.97)
Profit for the year 91.94 164.27
Profit for the year attributable to:
- Owners of the Company 91.94 164.27
- Non-controlling interests - -
Other comprehensive income (‘OCI') (0.20) (0.65)
Total comprehensive income 91.74 163.62
Profit for the year 91.74 163.62
Balance of Profit brought forward from previous year 1,233.77 1,128.50
1,325.51 1,292.12
Appropriations
Others - (0.01)
Dividend on Equity Shares# (58.34) (58.34)
Transfer to Reserve for equity instruments through OCI* 0.00 0.00
Transfer to Cash flow hedge reserve 0.24 -
Balance Profit carried forward to Balance Sheet 1,267.41 1,233.77

 

# Dividend declared in the previous year and paid during the respective reporting year * Value is less than ` 1 crore

Dividend

The Directors are pleased to recommend a dividend of ` 2.5 per share (i.e. 250%) on the Equity Shares of the Company of ` 1 each for the year ended March 31, 2023 (previous year ` 3 per share i.e. 300%). If the dividend, as recommended above, is declared at the ensuing Annual General Meeting (‘AGM'), the total outflow towards dividend on Equity Shares for the year would be ` 48.62 crore (previous year ` 58.34 crore).

Dividend Distribution Policy

Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations'), the Board of Directors of the Company have adopted a Dividend Distribution Policy which aims to maintain a balance between Profit retention and a fair, sustainable and consistent distribution of Profits among its Members. The said Policy is available on the website of the Company under the ‘Investors' section at https://www.rallis.com/dividend-distribution-policy.

Transfer to Reserves

The Board of Directors has decided to retain the entire amount of Profits for FY 2022-23 in the Profit and loss account.

Share Capital

The paid-up Equity Share Capital as on March 31, 2023 was

` 19.45 crore. During the year under review, the Company has not issued any shares.

Rooted in Values, Seeding Growth – 75 Years and Beyond

Rallis, incorporated in 1948, is known for its deep understanding of Indian agriculture, connect with farmers and quality agri-inputs. In its endeavour to be at the forefront of strategic advances centred on science and innovation, Rallis has come a long way in digital transformation over the years.

A key success attribute of over a seven-decade business journey is the consistent focus on creating value for the stakeholders and accelerating farm prosperity. With the goal of evolving as a future-ready organisation, Rallis heads towards a greener chemistry by aligning its Mission, Vision and Values with sustainable business practices and stakeholder value creation.

Driven by its core value of ‘Serving Farmers through Science', Rallis shall continue to accelerate its journey and enhance value in areas of environmental sustainability, societal initiatives, digitisation and long-lasting partnerships.

Company's Performance

The Company's revenue from operations for FY 2022-23 was

` 2,967 crore compared to ` 2,604 crore in the previous year, an increase of 14% over the previous year. The Company's Profit before exceptional items was ` 127 crore during the year compared to ` 222 crore in the previous year. The Company earned a net Profit after tax of ` 92 crore, lower by 44%, as against a net Profit after tax of ` 164 crore in the previous year.

The Company's performance in FY 2022-23 was also impacted due to reassessment of intangible assets under development which has resulted in impairment of technical know-how of seed development technology amounting to ` 30.41 crore. Also, reassessment of future sales potential has resulted in the Company recognising the provision for slow moving inventory in seeds amounting to ` 52.81 crore.

Business Context

Agriculture sector in India continued to experience the impact of climate change which is respected in the adverse yield impact in wheat due to the early heat wave towards the end of previous wheat growing season and the decline in the sown area in Kharif Paddy due to delayed monsoons and de_cient rainfall. The 2022 rainfall over the country as whole was 108% of its long-period average (‘LPA'). As second Advance Estimate for 2022-23, total foodgrains production in the country is estimated at 324.6 million tonnes which is 2.5% higher than the previous year.

Though India is one of the largest producers of agricultural output in the world, the intensity of crop protection usage is relatively low compared to other leading agriculture economies like USA, Brazil, China, etc. The Industry has taken various initiatives to promote safe use of crop protection solutions. Agriculture sector is well supported by the State and Central Government for ensuring economic prosperity to farmers, which is critical for balanced economic development of the country. Ministry of Agriculture and Farmers Welfare has brought out Standard Operation Procedures for use of drones in pesticide and nutrient application to promote drone technologies in Indian agriculture. The crop protection market in India is expected to sustain the growth trend as farmers seek solutions to protect their crops from emerging biotic and abiotic stress to ensure food security of the growing population.

India is the leading exporter of agrochemicals and the business environment is conducive for rapid export growth going forward. The Government and Industry is working together to tap the opportunities to make India a global hub for agrochemicals.

A. C rop Care

Dur ing the year under review, the Domestic Care business achieved a revenue of ` 1,643 crore as against ` 1,468 crore during FY 2021-22, a growth of 12%. The Exports business achieved a revenue of

` 979 crore during the year under review as against

` 787 crore during FY 2021-22, a growth of 24.5%.

D omestic Crop Protection:

T he Company registered 7.5% growth over the previous with the help of its new product introductions, commercial interventions, supportive trade policies and by enhancing channel reach and engagement. New formulations developed through R&D e_orts are Daksh Plus (Herbicide), Clasto (Insecticide), Capstone (Fungicide) & Castillo (Fungicide) for the domestic crop protection market. In a challenging environment, Industry is estimated to have sustained the recent growth trend.

Insecticides:

Insecticide growth was driven by paddy brown plant hopper and cotton sucking pest segments. In general, pest incidents were relatively low and missed sprays due to adverse weather conditions further impacted insecticide business for the industry and Rallis. During the year under review, the Company successfully launched Clasto for Cotton white _y, which is also the carrier of dreaded cotton leaf curl virus. The Paddy portfolio further strengthened with the launch of Clue for brown plant hopper menace and Dext for borer segment which can also be applied to sugarcane. The Company also launched Onto for control of sucking pests in tea and also having wider application in multiple crops.

Fungicides:

Fungicide demand was relatively low due to weather conditions in paddy and plantation crops and low disease incidence in potato. The Company achieved marginal growth in this challenging environment leveraging its strong portfolio including the scale up of recently launched Zaafu and Ayaan. Fungicide portfolio further strengthened with the introduction of Capstone to address the increasing leaf and neck blast challenges in Paddy and Castello, a broad spectrum fungicide for Fruits and Vegetables segments.

Herbicides:

Herbicide as an e_ective alternative to manual weeding is getting increasing acceptance in India as farmers are trying to mitigate cost and labour availability challenges. This trend is expected to continue and to tap these opportunities, the

Company has been strengthening its portfolio across crops like paddy, sugarcane, maize, wheat and soybean which is also respected in the growth of herbicide segment during the year. In addition to successfully scaling up Prodim for weed control in soybean and paddy herbicides Pepe and Preetplus, the Company launched Daksh Plus, a highly di_erentiated wheat herbicide during Rabi 2022.

Exports:

Global crop protection market is estimated to have grown by around 12% representing the strongest growth rate for the market in last two decades to reach a total value of USD 74 billion during calendar year (‘CY') 2022 compared to USD 66 billion during CY 2021. Total agrochemical market including no-crop usage has grown to USD 83 billion in CY 2022 from USD 73 billion reported for CY 2021. Revenue growth registered is mostly attributed to price increase undertaken to ofset volatile and high input cost and relatively low volume growth. Herbicide in particular was benefited from Significant price increase of major herbicides like Glyphosate and Glufosinate.

Rallis' exports have grown by 24.5% from ` 787 crore in FY 2021-22 to ` 979 crore in FY 2022-23. During the year, Significant growth was recorded in Latin America (278%), Middle East (90%) and Europe (22%) compared to last year. During the year under review, the Company has gained 7 registrations in overseas markets and onboarded new customers from European territory. The Significant devaluation of currency against dollar in many South East Asian and African countries has impacted the sales volume of formulation products.

C rop Nutrition:

Cr op Nutrition is a critical and necessary input for production, productivity and quality of farm produce. Rallis has a range of unique and di_erentiated products in Organic fertilisers, Biofertiliser, Biostimulants, Secondary and Micronutrients and Water Soluble Fertilisers categories. During FY 2022-23, the Crop Nutrition business sustained the high growth trend to record 21.8% growth. Addition of three new products viz. Rallizin, Paclo and GeoGreen P plus GR strengthened the portfolio to cater to wider geographies and crop segments.

Biopesticides are an integral part of integrated pest management and play an important role in resistance management and residue management. The Company entered this segment a couple of years ago and established its presence in Biopesticides solutions which is getting increasing acceptance in India.

B. Seeds

R allis' Seeds business is research based. Hybrid

Paddy, Maize, Cotton, Bajra, Mustard & Vegetables are made available for sale across the country. The Company is one among the few Indian companies engaged in both conventional and biotechnology based research and development, supported by national and international collaborations.

The year was challenging for the Seeds business.

The Company continued to leverage its strong channel engagement, customer loyalty and diversi_ed portfolio which is respected in the success it achieved in North Cotton Market. Rallis was able to navigate a challenging environment to maintain the revenue by adapting to changing market dynamics. Rallis will continue to focus on opitimising costs to improve margins for sustained growth going forward.

Farmer Engagement

Rallis Samrudh Krishi (RSK):

RSK is a Crop solution centric approach wherein the Company understands what crop the farmer is growing, at what stage the crop is, what are the likely interventions the crop will need and accordingly suggest solutions to farmers. In FY 2022-23, the focus was on further strengthening the planning & implementation e_orts among sales and marketing team. Enhancements were made in the Sampark mobile application to capture detailed inputs with respect to demand creation activities through both digital and physical means.

Samrudh Krishi (SK):

SK delivers Good Agriculture Practices with expertise in crop protection, nutrition and canopy management. SK now provides services to more than 5,000 customers. Rallis has updated SK services according to the gap needs of grape farmers. The Company has introduced Aquafert Grape Fertigation grades which is a complete solution for Nutrient management of Grapes.

Drishti:

Drishti is the Company's _agship digital initiative aimed at climate-smart agriculture. In collaboration with Tata Consultancy Services Limited, Rallis co-developed Drishti, a state-of-the-art decision intelligence and crop monitoring system that harnesses the power of space borne remote sensing and arti_cial intelligence (AI) to generate predictive advisories on crop conditions, soil moisture, pest outbreaks and more. Rallis has been utilising

Drishti for internal planning to improve resilience toward climate change, monitoring hybrid seed production farms and providing of advisories to farmers and seed growers. During the year under review, the Company was conferred with the CII-DX award under the ‘Most Innovative' category and the NASSCOM Enterprise Cloud Adoption Awards ‘22 for leveraging Drishti to monitor its HSP farms and for internal planning.

Financial Statements

The Company did not have any subsidiary, associate or joint venture company as on March 31, 2023 and hence is not required to consolidate its financial statements with any other company.

Credit Ratings

There were no changes in the credit ratings of the Company during the year under review. As on March 31, 2023, the Company had a short-term credit rating of A1+ and a long-term rating of AA+/ Stable by CRISIL Limited for bank loan facilities aggregating to ` 440 crore. The Company had a short-term credit rating of A1+ for the Commercial Papers of ` 75 crore issued and repaid during the year.

Particulars of Loans, Guarantees or Investments

During the year under review, the Company has not made any investment. Further, the Company has not given any loan or corporate guarantee or provided any security during the year.

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.

Related Party Transactions

The Company formulated a Policy on Related Party Transactions in accordance with the Companies Act, 2013 (‘the Act') and the SEBI Listing Regulations including any amendments thereto for identifying, reviewing, approving and monitoring of Related Party Transactions (‘RPTs'). The said Policy is available on the Company's website at https://www.rallis.com/Upload/PDF/ Related-Party-Transactions-Policy.pdf. During the year under review, the Company also appointed Ernst & Young LLP (EY) as an external independent agency to review and validate the RPT processes and compliances with the applicable provisions as a measure of good governance.

All RPTs are placed before the Audit Committee for review and approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis for the transactions which are planned/repetitive in nature. A statement giving details of all

RPTs entered pursuant to omnibus approval so granted is placed before the Audit Committee on a quarterly basis for its review. All the RPTs under Ind AS-24 have been disclosed in note no. 38 to the Financial Statements forming part of this Integrated Annual Report.

The RPTs entered into during the year under review were on arm's length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act read with the rules framed thereunder and the SEBI Listing Regulations. Further, the Company did not enter into any contracts or arrangements with related parties in terms of Section 188(1) of the Act and no material related party transactions were entered into during the year under review. Accordingly, the disclosure of RPTs as required under Section 134(3)(h) of the Act in Form No. AOC-2 is not applicable to the Company for FY 2022-23 and hence does not form part of this Integrated Annual Report.

In terms of Regulation 23 of the SEBI Listing Regulations, the Company submits details of RPTs as per the prescribed format to the stock exchanges on a half-yearly basis.

Risk Management

The Company has a comprehensive Risk Management framework that seeks to minimise adverse impact on business objectives and capitalise on opportunities.

The Company has implemented a mechanism for risk management and formulated a Risk Management Policy. The said policy provides for creation of a risk register, identi_cation of risks and formulating mitigation plans. Major risks identi_ed by the business and functions are systematically addressed through mitigation actions on a continuing basis. The risk register is refreshed periodically to ensure that the risks remain relevant at all times and corresponding mitigation measures are timely and effective so that the risk profle is within identi_ed tolerance levels.

The Company has set up a Risk Management Committee which is chaired by Dr. Punita Kumar Sinha, Independent Director, to monitor the risks and their mitigation actions as well as formulating strategies towards identifying new and emergent risks. Further, the Board is apprised of any actual / emergent risk that may threaten the long term plans of the Company.

The major risks forming a 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.

Details of the risks identi_ed and mitigation plans are set out on page 48 of the Integrated Report.

Internal Financial Controls

The Company's internal financial controls framework is based on the ‘three lines of defence model'. The Company has laid down Standard Operating Procedures, policies, roles, responsibilities and authorities to guide the operations of the business.

Process owners are responsible to ensure compliance with the policies and procedures laid down by the Management. Robust and continuous internal monitoring mechanisms ensure timely identi_cation of risks and issues. The Statutory and Internal Auditors undertake rigorous testing of the control environment of the Company. During the year, two external _rms viz. Ernst & Young LLP and Mahajan & Aibara LLP, were engaged to perform the de_ned reviews. Independence of the Internal Auditor is ensured by way of direct reporting to the Audit Committee.

The Audit Committee reviews the adequacy and e_ectiveness of the Company's internal control environment and monitors the implementation of the audit recommendations including those relating to strengthening of the Company's risk management policies and systems. The ultimate objective being, a Zero Surprise, risk controlled organisation.

Further details of the internal control systems are provided in the Management Discussion & Analysis which forms part of this Integrated Annual Report.

Directors' Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, audit conducted 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 operating e_ectively during FY 2022-23.

Accordingly, pursuant to Sections 134(3)(c) and 134(5) of the Act, the Directors, to the best of their knowledge and ability, con_rm that for the year ended March 31, 2023: (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 a_airs 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 su_cient 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 e_ectively; and (vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating e_ectively.

Governance, Compliance and Ethics

The Governance, Corporate Secretarial and Legal functions of the Company ensure maintenance of good governance within the organisation. They assist the business in functioning smoothly by ensuring compliance and providing strategic business partnership in the areas including legislative expertise, corporate restructuring, regulatory changes and governance.

The Company has also adopted the governance guidelines on Board effectiveness to fulfill its responsibility towards its stakeholders. At Rallis, human rights are also an integral aspect of doing business and the Company is committed to respect and protect human rights to remediate adverse human rights impacts that may be resulting from or caused by the Company's businesses. In furtherance to this, the Company has adopted the ‘Business and Human Rights Policy' which aligns with the principles contained in the Universal Declaration of Human Rights, International Labour Organisations (ILO), Declaration on Fundamental Principles and Rights at Work and the United Nations Guiding Principles on Business and Human Rights and is consistent with the Tata Code of Conduct.

The Company has in place an online compliance management system for monitoring the compliances across its various plants and ofces. A compliance certi_cate is also placed before the Board of Directors every quarter. In compliance with the SEBI Listing Regulations, the Corporate Governance Report and the Auditor's Certi_cate form part of this Integrated Annual Report.

Management Discussion & Analysis

The Management Discussion & Analysis as required under the SEBI Listing Regulations forms part of this Integrated Annual Report.

Business Responsibility & Sustainability Report

The Company endeavours to cater to the needs of the communities it operates in thereby creating maximum value for the society along with conducting its business in a way that creates a positive impact and enhances stakeholder value. As per Regulation 34(2)(f ) of the SEBI Listing Regulations, the Business Responsibility & Sustainability Report depicting initiatives taken by the Company from an environmental, social and governance perspective which has been assured by Ernst & Young LLP forms part of this Integrated Annual Report.

Directors and Key Managerial Personnel

Directors

Re-appointment:

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. Bhaskar Bhat, Non-Executive Director of the Company (Chairman), retires by rotation at the ensuing AGM and being eligible, ofers himself for re-appointment and his term would be up to and inclusive of August 29, 2024 in view of the retirement age policy for Directors adopted by the Company.

Independent Directors:

Dr. Punita Kumar Sinha, Dr. C. V. Natraj and Ms. Padmini Khare Kaicker, 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 SEBI Listing Regulations. In terms of Regulation 25(8) of the SEBI Listing Regulations, they have con_rmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external in_uence. The Board of Directors of the Company has taken on record the declaration and con_rmation submitted by the Independent Directors after undertaking due assessment of the veracity of the same. In the opinion of the Board, they ful_ll the conditions of independence as speci_ed in the Act and the Rules made thereunder and are independent of the management. There has been no change in the circumstances a_ecting their status as Independent Directors of the Company.

The Board is of the opinion that all Directors including the Independent Directors of the Company possess requisite quali_cations, integrity, expertise and experience in the _elds of science and technology, industry experience, strategy, _nance and governance, IT and digitalisation, human resources, safety and sustainability, etc.

The Independent Directors of the Company have con_rmed that they have enrolled themselves in the Independent Directors' Databank maintained with the Indian Institute of Corporate A_airs (‘IICA') in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Quali_cation of Directors) Rules, 2014, as amended. They are exempt from the requirement to undertake the online profciency self-assessment test conducted by IICA.

Details of Familiarisation Programme for the Independent Directors are provided separately in the Corporate Governance Report.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committees of the Board.

Key Managerial Personnel (‘KMP'):

Mr. Yashaswin Sheth resigned as the Company Secretary with e_ect from the close of business hours on September 29, 2022 to pursue an opportunity within the Tata Group. The Board places on record its appreciation for Mr. Sheth's contribution during his association with the Company. The Board, on recommendation of the Nomination & Remuneration Committee (‘NRC'), appointed Mr. Srikant Nair as the Company Secretary of the Company with e_ect from September 30, 2022.

In terms of the provisions of Sections 2(51) and 203 of the Act, the following are the KMP of the Company:

• Mr. Sanjiv Lal, Managing Director & CEO

• Ms. Subhra Gourisaria, Chief Financial OFcer

• Mr. Srikant Nair, Company Secretary

Procedure for Nomination and Appointment of Directors:

The NRC is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. The Board composition analysis respects in-depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements.

The NRC is also responsible for reviewing the profle of potential candidates vis-?-vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board.

At the time of appointment, speci_c requirements for the position including expert knowledge expected are communicated to the appointee.

The Board has also reviewed the list of core skills, expertise and competencies of the Board of Directors as are required in the context of the businesses and sectors applicable to the Company which were mapped with each of the Directors on the Board. The same is disclosed in the Corporate Governance Report forming part of this Integrated Annual Report.

Criteria for determining Quali_cations, Positive Attributes and Independence of a Director:

The NRC has formulated the criteria for determining quali_cations, 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 to the SEBI Listing Regulations.

Independence: In accordance with the above criteria, a Director will be considered as an ‘Independent Director' if he / she meets the criteria for Independence as laid down in the Act and Rules framed thereunder, as amended and Regulation 16(1)(b) of the SEBI Listing Regulations.

Quali_cations: 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 NRC considers the manner in which the function and domain expertise of the individual will contribute to the overall skill- domain 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 behaviour, strong interpersonal and communication skills and soundness of judgement. 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 Directors:

Pursuant to the applicable provisions of the Act and the SEBI 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 NRC has de_ned the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors.

The performance of the Board and individual Directors was evaluated by the Board after seeking inputs from all the Directors. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee Members.

The criteria for performance evaluation of the Board included aspects such as Board composition and structure, e_ectiveness of Board processes, contribution in the long-term strategic planning, etc. The criteria for performance evaluation of the Committees included aspects such as structure and composition of Committees, e_ectiveness of Committee Meetings, etc. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India.

The Chairman of the Board had one-on-one meetings with each Independent Director and the Chairman of the NRC had one-on-one meetings with the Executive and Non-Executive, Non-Independent Directors.

ln a separate Meeting, the Independent Directors evaluated the performance of Non-Independent Directors and performance of the Board as a whole. They also evaluated the performance of the Chairman taking into account the views of the Managing Director and Non-Executive Directors. The NRC reviewed the performance of the Board, its Committees and the Directors. The same was discussed in the Board Meeting that followed the Meeting of the lndependent Directors and the NRC, at which the feedback received from the Directors on the performance of the Board and its Committees was also discussed. The Company follows a practice of implementing each of the observations from the annual evaluation by calendarising its implementation through the Action Taken Report which is reviewed by the Board of Directors from time to time.

The Annual Performance Evaluation is conducted in a paperless manner with documents being securely uploaded and accessed electronically. This has resulted in saving paper, reducing the cycle time of the process and increasing con_dentiality of the information.

Remuneration Policy

The Company has adopted a Remuneration Policy for the Directors, KMP and other employees, pursuant to the provisions of the Act and the SEBI Listing Regulations. The Remuneration Policy is attached as Annexure A which forms part of this Report.

Board and Committee Meetings

Regular meetings of the Board and its Committees are conducted to discuss and approve various strategies, policies, financial matters and such other businesses. A calendar of Board and Committee Meetings to be held during the year was circulated in advance to the Directors.

a. D etails of Board Meetings

Dur ing the year under review, eight (8) Board were held, details of which are provided in the Corporate Governance Report.

b. C omposition of Audit Committee

A s on March 31, 2023, the Audit Committee four (4) Members out of which three (3) were Independent Directors and one (1) was a Non-Independent, Non-Executive Director. During the year, seven (7) Audit Committee Meetings were held, details of which are provided in the Corporate Governance Report.

There have been no instances during the year when recommendations of the Audit Committee were not accepted by the Board.

c. C omposition of Corporate Social Responsibility (‘CSR') Committee

Dur ing the year under review, the CSR comprised three (3) Members out of which one (1) was an Independent Director. During the year under review, two (2) CSR Committee Meetings were held, details of which are provided in the Corporate Governance Report.

There have been no instances during the year when recommendations of the CSR Committee were not accepted by the Board.

Details on other committees including their composition, number of meetings held and terms of reference are included in the Corporate Governance Report.

Corporate Social Responsibility

CSR and A_rmative Action (‘AA') continued to be an integral part of the business journey of the Company. The Company has aligned its CSR and AA strategy and operations with Tata Chemicals Society for Rural Development (‘TCSRD'). The CSR framework of TCSRD as followed by the Company addresses a majority of the Sustainability goals.

Employees are one of the key stakeholders and they extend great support to the CSR and AA initiatives by their active participation through volunteering. During the year under review, the Company has achieved more than 12,600 volunteering hours through various activities in which 755 employees actively participated.

Under Natural Resource Management, the Company has focussed on water conservation through rainwater harvesting (‘Jal Dhan'), recharging groundwater and soil conservation.

In Education, the Company has focussed on Science, English, Mathematics and initiatives for special children. The Company has been engaged in capacity building of school teachers and has provided necessary training to teachers. The Company has also supported schools by providing teachers, especially in the stream of Science, English and special teachers for special children. The Company has branded its educational interventions as ‘RUBY' (Rallis Ujjwal Bhavishya Yojana).

Under Unnat gram initiative, the Company works to convert a backward Tribal Village into a Model Tribal Village.

Under the Integrated Village Development, the Company focusses on Education, Health and Skilling. During the year under review, the Company worked in 8 villages from Warangal and Karimnagar districts of Telangana.

The above projects are in accordance with Schedule VII to the Act. The Annual Report on CSR activities is attached as Annexure B which forms part of this Report.

The CSR Policy is available on the website of the Company at https://www.rallis.com/CSRPolicy.

Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘POSH Act') and Rules made thereunder, the Company has constituted requisite Internal Committees (ICs). The Company's POSH Policy is gender neutral, detailing the governance mechanisms for prevention and redressal of sexual harassment issues. All persons whether employed as permanent, contractual, temporary or trainees are covered under this policy. While maintaining the highest governance norms, the Company has appointed an external independent person with prior experience in the areas of women empowerment and prevention of sexual harassment as the external member on all the Internal Committees.

To build awareness in this area, the Company has been conducting related training programmes across locations in the organisation on a continuous basis. Moreover, the POSH e-learning module has also been uploaded on the Learning Management System (LMS) and is used extensively by employees including new entrants.

No complaints were pending at the beginning of the year. During the year under review, no complaints with allegations of sexual harassment were received by the Company and accordingly no complaints were pending as at the end of the year.

The said Policy is available on the website of the Company at https://www.rallis.com/posh-policy.

Vigil Mechanism and Whistleblower Policy

The Company has adopted a Whistleblower Policy as a part of its vigil mechanism. The purpose of this Policy is to enable any person including the directors, employees, other stakeholders, etc. to raise concerns regarding unacceptable or improper practices and / or any unethical practices, fraud or violation of any law, rule or regulation.

The Chief Ethics Counsellor's contact details have been mentioned in the Policy for easy access. Furthermore, employees are free to communicate their complaints directly to the Chairperson of the Audit Committee as stated in the Policy. The Audit Committee reviews reports made under this Policy and implements corrective actions wherever necessary.

The Company believes in the conduct of its a_airs by adopting the highest standards of professional conduct, honesty, integrity and ethical behaviour, in line with the Tata Code of Conduct. All the stakeholders are encouraged to raise their concerns or make disclosures on being aware of any potential or actual violation of the Company's Code of Conduct, policies or the law. Periodic awareness is also conducted for the same.

Additionally, the Company provides access to the third party helpline "Integrity Matters" through phone, web based, email facility for its Directors and employees across all locations.

Details of the Vigil Mechanism and Whistleblower Policy are made available on the Company's website at https://www.rallis. com/WhistleblowerPolicy.

Auditors

(1) S tatutory Auditors:

A t the 74th AGM of the Company held on June 24, pursuant to the provisions of the Act and the Rules made thereunder, B S R & Co. LLP, Chartered Accountants (‘BSR') (Firm Registration No. 101248W/W-100022), were re-appointed as Statutory Auditors of the Company for a second term of _ve (5) consecutive years i.e. from the conclusion of the 74th AGM till the conclusion of the 79th AGM to be held in the year 2027.

The Audit Report of BSR on the Financial Statements of the Company for FY 2022-23 forms part of this Integrated Annual Report. The Report does not contain any quali_cation, reservation, adverse remark or disclaimer.

(2) C ost Auditors:

T he Company is required to maintain cost records speci_ed by the Central Government as per Section 148(1) of the Act and the rules framed thereunder and accordingly, the Company has made and maintained such cost accounts and records.

In terms of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, based on the recommendations of the Audit Committee, the Board of Directors appointed D. C. Dave & Co., Cost Accountants (Firm Registration No. 000611), being eligible, to conduct Cost Audits relating to the business of the Company for the year ending March 31, 2024.

D. C. Dave & Co. have con_rmed that they are free from disquali_cation speci_ed under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Act and that their appointment meets the requirements of Section

141(3)(g) of the Act. They have further con_rmed their independent status and an arm's length relationship with the Company. The remuneration payable to the Cost Auditors is required to be placed before the Members in a General Meeting for their rati_cation. Accordingly, a resolution for seeking Members' rati_cation for the remuneration payable to D. C. Dave & Co. is included in the Notice of the 75th AGM forming part of this Integrated Annual Report.

(3) S ecretarial Auditors:

I n terms of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Parikh & Associates (Firm Registration No. P1988MH009800), a _rm of Company Secretaries in Practice, has been appointed as Secretarial Auditors of the Company. The Report of the Secretarial Auditors is enclosed as 2022, Annexure C which forms part of this Report. There has been no quali_cation, reservation, adverse remark or disclaimer given by the Secretarial Auditors in their Report.

Reporting of Frauds by Auditors

During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its ofcers or employees, to the Audit Committee under Section 143(12) of the Act, details of which are required to be mentioned in this Report.

Annual Return

Pursuant to Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014 read with as Section 134(3)(a) of the Act, the Annual Return in Form MGT-7 as on March 31, 2023 is available on the Company's website at https://www.rallis.com/MGT2023.htm.

Other Disclosures

• No sig ni_cant material orders have been passed Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations

• No applications were made or any proceedings were pending against the Company under the Insolvency and Bankruptcy Code, 2016

• No deposits have been accepted from the public during the year under review and no amount on account of principal or interest on deposits from the public was outstanding as on March 31, 2023

• T here has been no change in the nature of business Company as on the date of this Report

• There were no material changes and commitments a_ecting the financial position of the Company between the end of the financial year and the date of this Report

Secretarial Standards of ICSI

The Directors have devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems were adequate and operating e_ectively.

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 D which forms part of this Report.

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 E which forms part of this Report.

The information required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. Further, the Report and the Accounts are being sent to the Members excluding the aforesaid statement. In terms of Section 136 of the Act, the said statement thewill be open for inspection upon request by the Members. Any Member interested in obtaining the same may write to the Company Secretary at investor_relations@rallis.com. None of the employees listed in the said Annexure is related to any Director/ KMP of the Company.

Acknowledgements

The Directors appreciate and value the contribution, dedication, support, hard work and commitment made by all the employees towards continuous improvement in all functions and areas as well as e_cient utilization of the Company's resources for sustainable and Profitable growth.

The Directors 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, government authorities, farming community, business partners, shareholders, customers and other stakeholders. The Directors look forward to continuance of the supportive relations and assistance in the future.

On behalf of the Board of Directors

Bhaskar Bhat Chairman

Mumbai, April 27, 2023 DIN: 00148778