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Rallis India Ltd.

BSE: 500355 Sector: Agri and agri inputs
NSE: RALLIS ISIN Code: INE613A01020
BSE 00:00 | 24 Apr Rallis India Ltd
NSE 05:30 | 01 Jan Rallis India Ltd
OPEN 202.25
PREVIOUS CLOSE 204.85
VOLUME 31958
52-Week high 255.60
52-Week low 127.10
P/E 28.65
Mkt Cap.(Rs cr) 4,073
Buy Price 209.40
Buy Qty 100.00
Sell Price 211.00
Sell Qty 100.00
OPEN 202.25
CLOSE 204.85
VOLUME 31958
52-Week high 255.60
52-Week low 127.10
P/E 28.65
Mkt Cap.(Rs cr) 4,073
Buy Price 209.40
Buy Qty 100.00
Sell Price 211.00
Sell Qty 100.00

Rallis India Ltd. (RALLIS) - Chairman Speech


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Company chairman speech

Dear Shareholders

In FY 2018-19 we continued our efforts to drive farmer prosperity with our innovationdriven products agronomic services and digital technology. Farmers continue to remain atthe core of our strategy and we remain motivated to serve their composite needs. The themeof this Annual Report ‘Accelerating Farm Prosperity' aptly captures this message.

This report marks the beginning of our Integrated Reporting journey. The reportingformat is in line with our efforts to present a fair transparent and holistic view of ourvalue creation process to our stakeholders.

PERFORMANCE REVIEW

FY 2018-19 was a challenging year attributed to external and internal factors.Externally environmental crackdowns in China continued and disrupted operations ofseveral upstream suppliers some of whom even shut down. This triggered a raw materialscarcity and led to price hikes. Closer home erratic monsoon uneven rainfalldistribution and its prolonged withdrawal in certain locations led to a drastic shiftingin crop and pest load along with rural distress. While crops such as paddy and cottonexperienced a bad season soybean and groundnut despite undergoing a good seasonwitnessed low output price. Further restrictions on co-marketing of products in certainStates impacted sales. Consequently greater levels of credit and sales returns togetherwith expenses towards new technology absorption impacted cash flows.

Amidst a challenging scenario our strong portfolio distribution network and brandequity enabled us to deliver a steady performance. In the domestic business althoughvolumes were largely flat with margins being under pressure an encouraging sign has beenthe growing acceptance of our Rallis Samrudh Krishi (RSK) package. Through RSK weprovide holistic solutions to the farmers –right from seeds to harvest digitaltechnology-enabled agronomy and weather information services. Increasing number of farmersfor RSK validates its effectiveness in enhancing their yield and income. This is a bigpositive for our future growth. Our international business performed well. Disruptions inChina led to customers looking for better avenues for consistent and reliable supply ofagro chemical products. A proven track record along with the advantage of being a Tatagroup company worked in our favour. We added new customers achieved new productregistrations and also retained existing customers through strong customer relationsmanagement. This led to an improved demand in the key markets of Brazil the US Europeand South East

Asia. Though issues of capacity constraints perforce led us to forego several spotbusiness opportunities we remained focused on addressing this by ramping up the capacityof our Dahej plant. Our subsidiary Metahelix Life Sciences (Metahelix) also facedchallenges leading to marginal growth in revenues and a decline in the bottom line.Despite difficult market conditions it continued to maintain and grow its market shareacross various product lines. This is a positive trend which indicates the strength ofour product line-up and the robustness of its marketing and distribution initiatives.Overall for FY 2018-19 our consolidated revenue from operations grew by 10% to र1984crores whereas pressure on margins led to EBITDA and PAT declining by 9% and 7%respectively to र241 crores and र155 crores respectively.

FOCUSED ON REGAINING MOMENTUM

Even as the numbers have been on the lower side it is important to consider the strongfundamentals of the organisation. We are one of the few companies serving the compositeneeds of farmers. We have a strong portfolio of seeds crop protection organic compostand plant growth nutrient products coupled with agronomic services backed with digitaltechnology. This is being further fortified with a strong line-up of products.

We are determined to fill our portfolio gaps supported by products from alliances anda strong R&D drive.

We are looking at achieving deeper market penetration by expanding our distributionnetwork and supporting them with enhanced incentive programmes and digital technology. Ourproduct development teams are also working towards alternate product delivery mechanisms.We remain optimistic about our international business. In fact we consider this segmentto be our key growth driver with significant in product distribution and contractmanufacturing space led by our strong partnerships. We are making the right investmentsto scale this business higher. We have already made investments towards expanding ourmanufacturing capacities setting up new capacities for critical inputs as part ofbackward integration acquiring more product registrations and thrust on R&D fordeveloping relevant products for key markets. In the contract manufacturing space we arereaching out to more customers to build new partnerships leveraging our process andformulation development track record and our low-cost manufacturing advantage.

STREAMLINING OPERATIONS

The seeds segment is an important growth business for us. Until now this portfolio washandled by both Rallis and Metahelix separately. There was a need to optimise resourceallocation and make the operations lean and hence we took a strategic call ofdiscontinuing our internal seeds operations. During the year under review the Board hasapproved the merger of Metahelix into Rallis to achieve operational synergies. The mergeris subject to necessary statutory and regulatory approvals.

Safety & Sustainability

Despite robust safety management processes there was an unfortunate incident of flashfire at the Ankleshwar unit during the year resulting in fatality of one employee. We haveprovided all support to the family of deceased employee. We are also taking variousmeasures to further strengthen our process safety to ensure safe and healthy environmentat all our units.

As much as we are contributing towards transforming India's agricultural scenario wealso remain committed to improve the communities around us and nurture the planet.Investment in renewable energy sources effluent management and water recycling hasenabled us to significantly reduce consumption of natural resources and the impact of ouroperations on the environment. Our efforts on reducing emission harmful liquid dischargeand toxicity of our products by shifting to an environment-friendly portfolio hassignificantly reduced our carbon footprint.

Additionally we are also adopting key initiatives to make all our buildings green. Oursocial initiatives are directed towards education farmer awareness skill development andensuring the safety of our people.

WAY FORWARD

Our intent going forward will be to accelerate farm prosperity while striving forlong-term sustainable growth. We have devised key strategies and embarked on severalinitiatives towards this goal. Our focus continues to be on effective implementation ofthese strategies to maximise value creation. I would like to place on record theappreciation of the Boardopportunities for the contribution of Mr. V. Shankar who steppeddown from the Board to lead the Centre of Sustainable Agriculture and Farm Excellence(C-SAFE) an initiative to commemorate the 150 years of the Tata group. I also welcome Mr.Sanjiv Lal as the Managing Director & CEO effective 1st April 2019.

I thank all our stakeholders for their whole-hearted support. As we move towards abetter tomorrow our intent will be to create value for each stakeholder – to ensurewe can grow together.

Regards

Bhaskar Bhat

Chairman.