Directors’Report The members of PI Industries Limited Your Directors are pleased to present the Annual report of the company together with the Audited Accounts for the year ended March 31, 2015. 2. key highlights The Net Sales for the year grew to Rs.1,939.65 crore from Rs.1,594.92 crore last year i.e., a growth of 21.61% YoY. The Operating Profit for the year grew to Rs.369.97 crore from Rs.285.59 crore last year i.e., an increase of 29.55% YoY. The Net Profit for the year on stand-alone basis grew to Rs.243.25 crore from Rs.183.74 crore in the previous year i.e. an increase 32.39% YoY. EBIDTA margin improved 117 basis points to 19.07% in 201415 over 2013-14 and PAT margin strengthened 102 basis points to 12.54% in 2014-15 over 2013-14. The Company's Net Profit on a consolidated basis increased to Rs.245.89 crore during the year as compared to Rs.188.00 crore in the previous year, a growth of 30.79% YoY. The Earnings per share (EPS) for the year stood at Rs.17.84 per share an increase of 31.95% compared to Rs.13.52 per share for the previous year. The Company introduced two new products during the year under review - KEEFUN, a novel insecticide with broad spectrum focus under exclusive in-licensing agreement and BUNKER, a broad spectrum herbicide. The Company commercialized two new molecules for custom synthesis exports, which are expected to gain traction over the next few years. The Company signed three new agreements with their patent holders in the insecticide/ herbicide / fungicide segments to evaluate their potential in the domestic market. The Company invested Rs.168.49 Cr. in addition of fixed assets for expansion of manufacturing and R&D capacities. 3. performance review For India as a whole, the rainfall for the South West (SW) monsoon season (June-September) was 88% of its long period average (LPA). Delayed arrival of SW monsoon in June and July followed by excess rains in August and September affected the key crops of kharif such as rice, cotton, pulses and oilseeds. The unseasonal rains in rabi heavily impacted fields crops mainly wheat and horticultural crops in the northern and central parts of the Country. As compared to last year's production of 265.57 million tonnes, production of food-grains in 2014 is lower by 8.5 million tonnes. This decline is on account of lower production of rice, coarse cereals and pulses due to erratic rainfall conditions during the monsoon season 2014. Despite deficiency of 12% in the monsoon rainfall during the year, the loss in production was restricted to just around 3% over the previous year and exceeded the average production during the last five years by 8.15 million tonnes. Increasing costs of production due to increased input costs (fertilizers, manpower, fuel etc) and inability to realize MSPs in most of the cases affected the crop economics for farmers. Factors such as subsidy withdrawal on fertilizers, unfavorable rains for crops such as cotton, pulses and soybean negatively impacted the farmers' investment in plant protection chemicals impacting the agchem industry. Even in a challenging year, your company's Agri-Input Business once again outperformed the industry growth by growing at 19% YoY. This growth was mainly on account of increased contribution from innovation based products, expansion of the distribution channel network, volume expansion of some of the key existing products and inclusion of some new brands to give complete crop solutions in key focused crops. In the tough year of agribusiness, new innovative products launched by your Company again proved to be the growth drivers further strengthening the Company's position in industry's leading crop 'rice'. We could successfully expand the flagship brand 'Nominee Gold' in some of the virgin markets for rice herbicides. In these new markets, Nominee Gold is expected to be a key enabler for rice productivity enhancement for farmers and business driver for PI in the coming years. Our new insecticide 'OSHEEN' has now been accepted very well to manage the Brown Plant Hopper (BPH) in rice crop. Introduction of New Products In the review year your company has launched 'KEEFUN', a unique insecticide innovated in Japan and developed and marketed by PI in India under the in-licensing model of business. KEEFUN is a broad spectrum insecticide initially launched on cabbage and okra. In the coming years, your Company will expand the label of KEEFUN to other crops for the management of various insects, pests and some fungal diseases which are difficult to manage. The inclusion of KEEFUN in our portfolio will help strengthen our position in horticultural crop and cotton. Your Company is committed to create and further strengthen its brands through sustained campaigns. In this line, we launched the new pack and new image of our specialty nutrition product 'BIOVITA'. The new avtaar of Biovita has been very well received by all stakeholders and has helped achieve growth. As a part of its strategy to provide crop solutions, your Company also introduced "Super Spreader" a Tri Siloxane Alcoxylate (TSA) adjuvant in sourced under strategic partnership with US based company having leadership position in the business. Super Spreader will complement the application of various agrichem products of PI and also increase their benefits to farmers. Building strong pipeline has been a key pre-requisite to ensure sustained growth. Your company has been working very closely with the global innovator companies to evaluate the fitment of their products for Indian markets. In the review year, your company has signed agreements with innovator companies to evaluate ~10 new products; some of them have been identified as potential candidate for further evaluation and development. In custom synthesis exports, your Company successfully commercialised two new molecules. Based on the product mix planned for production during Rs.2 FY15, major product deliveries happened during this period. The resultant performance was due to improved capacity planning leading to better asset utilization, yield improvements through process improvements, debottlenecking leading to time cycle reductions and high plant uptime. The construction of two new multi-product plants at Jambusar is on track and both the plants are expected to be operational in the 2nd half of FY 2016 which will support further growth of custom synthesis exports. This was also the year wherein your Company has moved to the next level in the Operations Excellence journey it started two years ago. Your Company has also decided to have long-term strategic view on utilities adequacy, critical spares management and engineering management based predictive maintenance. Predictive maintenance is an evolved science which goes beyond the purview of preventive maintenance concepts. Your Company's continuous efforts to improve the asset lifetime, right usage of the assets has led to the idea to embrace the predictive and autonomous maintenance concept. Research & Development During the year under review, the Research & Development team successfully carried out synthesis of several new molecules. In the custom synthesis area, eight new molecules progressed to the next stage and two molecules were commercialized during the year. Apart from synthesis and scale up of new molecules, the Research & Development team also worked on process improvements projects for ten existing products to identify cost improvement opportunities and then implement these improvements at the plant level. Environment, Health and Safety (EHS) considerations were given the usual special emphasis in the process development work. During the year, your Company has also initiated expansion of R&D set up and in the first phase of expansion, a two-story building is being constructed within the existing campus at Udaisagar Road, Udaipur (Rajasthan) to carry out increasing R&D projects under custom synthesis, library synthesis and other joint research assignments from its global innovator partners. Finance Your Company continued to focus on managing cash efficiently and ensured that it had adequate liquidity and back up lines of credit. Cash from operations for the year stood at H180.65 crores. Your company follows a prudent financial policy and aims at maintaining an optimum financial gearing. The Company's Debt to Equity Ratio improved to 0.09 as on March 31, 2015 against 0.13 as on March 31, 2014 owing to increase in net worth coupled with significant reduction in long term borrowings. Your Company has been credit rated by CRISIL Limited for bank facilities. The Company's credit rating was reaffirmed to 'CRISIL AA-/Stable/CRISIL A1+'. This reflects a very high degree of safety regarding timely servicing of financial obligations and also a vote of confidence reposed in your Company's management. 4. DIVIDEND The Board of Directors recommended a final dividend of Rs.1.30 per Equity Share of the face value of H1 each for the year ended March 31, 2015, amounting to Rs.17.76 crore. This is in addition to the interim dividend of Rs.1.20 per equity share for 2014-15, paid in November, 2014 amounting to Rs.16.39 crore. The total dividend per equity share for year ended March 31, 2015 is Rs.2.50 and total dividend payout is Rs.34.15 crore (net of tax). Subject to the approval of shareholders at the ensuing Annual General Meeting, the final dividend will be paid to those shareholders whose name appear on the register of members of the Company as on September 09, 2015. 5. subsidiary companies The Company has three Wholly-owned Subsidiary Companies as on March 31, 2015. The members may refer to their Financial Statements forming part of the Annual Report as required under the provisions of Sec 129(3) of the Companies Act, 2013. The key highlights of these subsidiary companies are as under: (i) PI Life Science Research Ltd. (PILSR) During the year, the Company posted a profit of H235.72 lacs, earned on account of various R&D activities for developing new products. (ii) PI Japan company Ltd. The Company posted a net profit of JPY 18.35 lacs during the year. Due to the size of operations and local laws, the annual accounts of this Company are not required to be audited. The same have been certified by the Management of the Company. (iii) PILL Finance and Investments Ltd. (PILL-F) The Company posted a profit of Rs.16.78 lacs during the year. A statement containing salient features of the financial statements of the subsidiary companies in form AOC-1 is also included in the Consolidated Financial Statements forming part of the Annual Report. The Board has also formulated Policy for determining the "Material Subsidiaries" as per the recommendation of Audit Committee. The same has been placed on the website of the company on the following weblink. http://www.piindustries.com/sites/defaul^files/Policy%20_%20 Material%20Subsidiaries.pdf Further, in accordance with the third provision of Sec 136 (1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company www.piindustries.com . Further, as per fourth provision to the said section, audited annual accounts of each of the subsidiary companies have also been placed on the website of the Company. 6. APPROVAL OF THE SCHEME OF AMALGAMATION Your Directors are pleased to inform you that Hon'ble High Court of Jodhpur vide its formal order dated March 27, 2015 approved the Scheme of Amalgamation entailing merger of Parteek Finance & Investment Company Ltd with PI Industries Ltd. The appointed date for aforesaid merger is April 01, 2014 and effective date is March 30, 2015 i.e. date of filing the certified copy of the orders with ROC, Jaipur and ROC, Delhi. Pursuant to the Scheme of Amalgamation, 7,38,51,390 equity shares of Re. 1/- were issued to the shareholders of erstwhile Parteek Finance & Investment Company Limited and cross holding representing 7,38,51,390 equity shares of Re. 1/- each held by Parteek Finance & Investment Company Ltd was cancelled. It may further be noted that there has been no change in the paid up equity share capital of the Company and the promoter holding also remains same pursuant to this merger. The Company has also received necessary approvals from BSE Ltd. and National Stock Exchange of India Ltd. with respect to listing of 7,38,51,390 equity shares issued to shareholders of Parteek Finance & Investment Company Ltd. in terms of the approved Scheme. 7. RISK MANAGEMENT POLICY AND INTERNAL CONTROLS The Company has in place a mechanism to identify, assess, monitor and mitigate various assessed risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on continuing basis. These are discussed at the meeting of the Audit Committee and the Board of Directors of the Company. The Company's Internal Control Systems are commensurate with the nature of its business and the size and complexity of its operations. It comprises audit and compliance by in-house internal audit team supplemented by internal audit checks by M/s Grant Thornton LLP., Internal Auditors of the Company. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the financial transactions and review various business processes. Independence of the Internal Auditors and therefore compliance is ensured through direct reporting of internal audit division and Internal Auditors to the Audit Committee. 8. MANAGEMENT DISCUSSION AND ANALYSIS A detailed report on the Management Discussion and Analysis is provided separately in this Annual Report. 9. RELATED PARTY TRANSACTIONS All the related party transactions are entered on an arm's length basis and are in compliance with the applicable provisions of the Act and the Listing Agreement. There are no materially significant related party transactions made by the company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the company at large. All Related Party Transactions are presented to the Audit committee. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. The Related Party Transactions Policy as approved by Board on recommendation of the Audit Committee is uploaded on the company's website at the following weblink: <http://www.piindustries.com/sites/default/files/RPT%20Policy_> PI.pdf The Company does not have any contracts or arrangements with its related parties under Section 188(1) of the Companies Act, 2013, which are not on arms' length basis or material in nature. Hence the details of such contracts or arrangements with its related parties are not disclosed in Form AOC-2 as prescribed under the Companies Act, 2013 and the rules framed thereunder. Your Directors draw attention of the Shareholders to Note no. 38 of the financial statement which set out related party disclosures. 10. AUDITORS Statutory Auditors and Auditors Report The Statutory Auditors of the Company, M/s S.S. Kothari Mehta & Co., Chartered Accountants, New Delhi, hold office till the conclusion of the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment. The Company has received their written consent and certificate that they meet the criteria provided under Section 141 of the Companies Act, 2013 and that the appointment, if made, shall be in accordance with the applicable provisions of the Companies Act, 2013 and rules framed thereunder. The Audit Committee and the Board of Directors recommends the reappointment of M/s S.S. Kothari Mehta & Co., Chartered Accountants, as the Auditors of the Company in relation to the financial year 2015-16 till the conclusion of the next Annual General Meeting. The reappointment proposed is within the time frame for transition under the third provision to subsection (2) of Sec 139 of the Companies Act, 2013. Auditor's Report does not contain any qualification(s), hence same does not call for any explanation. Cost Auditors Pursuant to the directives issued by the Central Government, an audit of the cost records relating to Insecticides (Technical grade and formulations) manufactured by the Company is required to be conducted by an auditor with the requisite qualifications as prescribed under Section 148 of the Companies Act, 2013. Your Board has appointed M/s K.G. Goyal & Co., Cost Accountants, Jaipur, as Cost Auditors based on the recommendation of the Audit Committee for the conduct of the audit of cost records of Insecticides (Technical grade and formulations) for the year ending March 31, 2016. Pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Rules made thereunder, Members are requested to consider the ratification of the remuneration payable to M/s K.G. Goyal & Co., Cost Accountants. Secretarial Auditor The Board had appointed Mr R.S. Bhatia (PCS no.2514). Practicing Company Secretary, to carry out Secretarial Audit in accordance with the provisions of Sec 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, for the financial year ended March 31, 2015. The Secretarial Audit Report for the financial year ending March 31, 2015 has been obtained and does not contain any qualification, which requires for any comments from the Board. The Secretarial Audit Report for financial year ended March 31, 2015 is annexed to this report as Annexure 'A'. 11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The Company has not made any investment during the year under the provisions of section 186 of the Companies Act, 2013. The details of loans and guarantees covered under the aforesaid provisions are mentioned in Note No.14 of the Notes to the financial statements. 12. DEPOSITS The company has neither accepted nor renewed any deposits during the financial year 2014-15. Further, the Company has repaid all deposits during the year that were due for repayment in the financial year 2014-15 or thereafter that were accepted under the erstwhile provisions of Sec 58A of the Companies Act, 1956. As at March 31, 2015, there are no deposits unclaimed or pending in the books of the Company. Since the Company has repaid all deposits, no details are required to be furnished under Chapter V of the Companies Act, 2013 and rules made thereunder. 13. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUcATION AND PROTECTION FUND Dividend amount remaining unclaimed for more than seven years has been transferred to the Investor Education and Protection Fund. 14. BOARD OF DIRECTORS The Company is managed and controlled by a professional Board of Directors comprising a blend of Executives and Nonexecutive professional Directors. As on March 31, 2015, the Board of Directors consists of 8 Directors including Chairman & Managing Director, Managing Director & CEO, Whole time Director and 5 Non-executive Directors, out of which 4 are Independent Directors including one Woman Director. The composition of the board is in conformity with Clause 49 of the Listing Agreement and relevant provisions of the Companies Act, 2013. Mr P. N. Shah, due to health and age, resigned from the Board w.e.f April 01, 2014 after serving on the Board of the Company for more than two decades. The Board places on record its deep appreciation, gratitude and thanks for his valuable contribution to the Company's growth. Mr Raj Kaul stepped down from the Board w.e.f October 6, 2014. The Board records its appreciation for the valuable services rendered by Mr Raj Kaul during his long association with the Company. Mr Bimal K. Raizada, a Director on the Board of the Company, expired on March 19, 2015. The Board, while condoling the death of Mr. Bimal K. Raizada, records its appreciation for the valuable services rendered by him. In last AGM of the Company held on September 10, 2014, the shareholders had approved the appointment of existing Independent Directors viz. Dr Venkatrao S. Sohoni, Mrs Ramni Nirula, Mr Bimal K. Raizada, Mr Pravin K. Laheri and Mr Narayan K. Seshadri as Independent Directors under the provisions of Companies Act, 2013 each for a term of 3 years. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Sec 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. In accordance with the provisions of Companies Act, 2013 and Articles of Association of the Company, Mr Rajnish Sarna, Whole-time Director shall retire at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment. The Board recommends his re-appointment for approval of the members at the forthcoming Annual General Meeting. Evaluation of the Board's Performance In compliance with the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, committees and performance of individual directors during the year under review. The evaluation framework for assessing the performance of Directors comprised of attributes like quality of contribution to the Board deliberations, strategic perspective or inputs regarding future growth of Company and its performance, attendance of Board Meetings and Committee Meetings and commitment to shareholder and other stakeholder interests. The evaluation involves Self- Evaluation by the Board Members and subsequently assessment by the Board of Directors. A member of the Board does not participate in the discussion of his/her evaluation. Details of performance evaluation are provided in Corporate Governance Report. Familiarization Program for Independent Directors An induction program is done for Independent Director to familiarize them with the nature of business in which the company operates, and business model of the Company. It also includes the familiarization with important statutory & regulatory provisions governing the Industry. Periodic presentations are made at the Board and its committees, on business and performance updates of the Company, business strategies etc. Apart from that regular updates on relevant statutory changes and presentations on same are done in meetings held to familiarize them with the updates. The details of such familiarization programmes for Independent Directors are posted on the website of the Company and can be accessed on following weblink <http://piindustries.com/sites/default/files/> POLICY%20ON%20FAMILIARIZATION%20PROGRAMS%20 FOR%20INDEPENDENT%20DIRECTORS.pdf Number of board meetings conducted during the year under review A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, Board of Directors met 4 (four) times. The details of the board meetings and attendance of the Directors are provided in the Corporate Governance Report. Meeting of Independent Directors A meeting of Independent Directors was held during the year without the attendance of Non-Independent Directors and members of the management as required under Schedule IV to the Companies Act, 2013 and Clause 49 of the listing agreement. The meeting was conducted in a flexible manner to enable the Independent Directors to discuss matters pertaining to, inter alia, review of performance of Non-Independent Directors and the Board as a whole, review the performance of the Chairman of the Company (taking into account the views of the Executive and Non-Executive Directors), assess the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. Composition Of Audit Committee The Board has a duly constituted Audit Committee which comprises of Mr Narayan K. Seshadri as the Chairman, Mr Rajnish Sarna and Mrs Ramni Nirula as the members. Details on the committee are given in the Corporate Governance Report. Directors Responsibility Statement In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility statement: (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had 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 affairs of the company at the end of the financial year and of the profit of the company for that period; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) the directors had prepared the annual accounts on a going concern basis; (e) the directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively- ensuring the orderly and efficient conduct of its business including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information; and (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 15. EMPLOYEES Remuneration policy of the company The Remuneration policy of the Company comprising the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Executives of the Company including the criteria for determining qualifications, positive attributes, independence of a Director and other related matters have been provided in the Corporate Governance Report which forms a part of this report. Human resources and trade relations Your Company considers people as its biggest assets and "Believing in People" is at the heart of its human resource strategy. Lot of efforts are put in talent management, strong performance management, learning and training initiatives in order to ensure that your Company consistently develops inspiring strong and credible leadership. During 2014-15, your Company continued to have cordial relationship with all its employees and maintained healthy, cordial and harmonious industrial relations at all levels. Total workforce of the Company stood at 1576 as on March 31, 2015. Prevention of sexual harrasment at workplace The Company has a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of women at workplace and matters connected therewith or incidental thereto covering all the aspects as required under the "The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013. There were no such complaints received under the aforesaid policy during the year. Particulars of employees and related disclosure The information required under Sec 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure 'E' to the Directors' Report. Your Directors place on record their appreciation of the valuable contribution made by the employees of your Company. Employee stock option plan/ scheme During the year, the Company granted 4,67,102 performance options to eligible employees under PII-ESOP Scheme 2010 as per the criteria laid down by Compensation Committee of the Board. The aforesaid options shall vest after a lock in period of one year from the date of grant. The vesting period of aforesaid options is four years. The exercise price of options granted have been arrived at, by giving discount to the closing market price of the equity share on National Stock Exchange one day prior to the date of grant of option. Voting rights on the shares issued to employees under the ESOP Scheme are either exercised by them or through their appointed proxy. No employee has been issued share options, during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant. The details as required under Regulation 12 of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given in Annexure 'F' and forms part of this Report. 16. CORPORATE GOVERNANCE The Company is proud of its Corporate Governance structure and strives to maintain the highest possible standards. A detailed report on the Corporate Governance code and practices of the Company along with a certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement are given in a separate section in this Annual Report. 17. VIGIL MECHANISM - WHISTLE BLOWER POLICY The Company has established a vigil mechanism for Directors and employees to report their genuine concerns, as approved by Board on recommendation of the Audit Committee. The Wistle Blower Policy of the Company is uploaded on the Company's website at the following weblink: <http://www.piindustries.com/sites/default/files/PI_Whistle%20> Blower%20Policy%20or%20Vigil%20Mechanism.pdf The policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. 18. CORPORATE SOCIAL RESPONSIBILITY AND RELATED MATTERS Corporate Social Responsibility Policy Your Company has framed the Corporate Social Responsibility Policy in accordance with the provisions of Sec 135 of the Companies Act, 2013 read with rules made thereunder. CSR Committee Your Company has constituted a CSR Committee comprising five members with Mr. Salil Singhal, as Chairman and Mr. Mayank Singhal, Mr. Rajnish Sarna, Mr. Pravin K. Laheri and Mrs Ramni Nirula as Members. CSR Initiatives CSR activities are carried out through PI Foundation, a Trust set up by PI Industries Ltd to carry out CSR activities. Some of the major activities carried out during the year relates to: a) Swachh Bharat Abhiyan Programme - provision of household toilets and school toilets, particularly for girls. b) Certified Vocational Training Course on Chemical Plant Operators - for skill generation in chemical sector. c) Promotion of Direct Seeded Rice (DSR) Technology -awareness program for farmers to reduce cost and increase productivity. d) Farm Engagement Programmes - agro advisory programs to improve yield and conserve environment. e) Community Development Programmes at Plant locations. f) Academic Recognition. g) Affirmative Action - Scholarships for SC/ST Students. The average net profit of the Company, computed as per Section 198 of the Companies Act, 2013 during the three immediate preceding financial years was H173.82 crore. The Company was required to spend H3.48 crore on CSR activities during the financial year 2014-15, being 2% of the aforesaid average net profits. The Company had contributed an amount of H3.48 crore to PI Foundation, out of which the foundation has spent H1.02 crore. The Foundation was not able to spend the entire amount since this was an initial year for CSR spending as per the mandate of new law. Your Company had to earmark the projects and shortlist the implementing agencies through whom various projects would be routed. Moreover, few projects considered are ongoing and spread over 2 to 3 years. The details of CSR activities undertaken by the Company are highlighted in report format provided under the Companies (Corporate Social Responsibility Policy) Rules, 2014 in Annexure 'C' attached to this report. 19. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure ' B' attached to this report. 20. CHANGES IN SHARE CAPITAL In terms of the Scheme of Amalgamation of Parteek Finance & Investment Company Ltd. with PI Industries Ltd. as approved by Hon'ble High Court of Jodhpur, the Authorised Share Capital of the Company stands increased from Rs. 70,00,00,000/- (H Seventy crores only) to Rs.72,30,00,000/- (Seventy Two Crores and Thirty lacs only) divided in to 22,30,00,000 (Twenty two crores thirty lacs) Equity Shares of Re.1/- (Rupee one only) each and 50,00,000 (Fifty lac) Preference Shares of Rs.100/- (Rupees Hundred only) each. Further, during the year, the Company had issued 4,67,102 Equity Shares of Re.1/- each which were allotted to PII ESOP Trust (Trust), set up to administer PII Employee Stock Option Plan-2010. The Trust allocates these shares to the employees of the Company and of its subsidiaries on exercise of stock options from time to time under the aforesaid Scheme. As a result of this allotment, the paid-up equity share capital of your Company stands increased to Rs.13,65,76,182 (13,65,76,182 Equity Shares of Re. 1/- each as on March 31, 2015 from Rs.13,61,09,080 divided into 13,61,09,080 Equity Shares of Re. 1/-each as on March 31, 2014). 21. EXTRACTS OF ANNUAL RETURN The extracts of Annual Return in Form MGT-9 pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure 'D' attached to this Report. 22. GENERAL The Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:- a) Issue of equity shares with differential rights as to dividend, voting or otherwise. b) Issue of shares (including sweat equity shares) to employees of the Company under any scheme saved and except issued under ESOP Scheme as referred to in this Report. c) Neither the Managing Directors nor the Whole-time Director of the Company received any remuneration or commission from any of its subsidiaries. d) No significant or material orders were passed by the Regulators or Courts or Tribunals, which impact the going concern status and Company's operation in future. 23. ACKNOWLEDGMENTS Our Directors wish to express their grateful appreciation for the valuable support and co-operation received from bankers, business associates, lenders, financial institutions, shareholders, various departments of the Government of India, as well as the State Governments of Rajasthan, Gujarat and Jammu & Kashmir, the farming community and all our other stakeholders. The Board places on record its sincere appreciation towards the Company's valued customers in India and abroad for the support and confidence reposed by them in the organisation and looks forward to the continuance of this supportive relationship in the future. Your Directors also place on record, their appreciation for the contribution and hard work of the employees of the Company and its subsidiaries at all levels, who, through their competence, hard work, solidarity and commitment have enabled the Company to achieve consistent growth. On behalf of the Board of Directors For PI Industries Ltd. Sd/- (Salil Singhal) Chairman & Managing Director DIN : 00006629 Place: Gurgaon Date: May 23, 2015 |