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P I Industries Ltd.

BSE: 523642 Sector: Agri and agri inputs
NSE: PIIND ISIN Code: INE603J01030
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OPEN 736.00
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VOLUME 8687
52-Week high 950.10
52-Week low 674.15
P/E 23.53
Mkt Cap.(Rs cr) 10,134
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Sell Qty 0.00
OPEN 736.00
CLOSE 725.40
VOLUME 8687
52-Week high 950.10
52-Week low 674.15
P/E 23.53
Mkt Cap.(Rs cr) 10,134
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

P I Industries Ltd. (PIIND) - Director Report

Company director report

To the Members of

PI Industries Limited

Your Directors have pleasure in presenting their report and audited accounts for theyear ended on March 31 2016:

1. FINANCIAL HIGHLIGHTS

(Rs In Cr.)
Particulars FY 2015-16 FY 2014-15
Gross Sales & Other Operating Income 2386.47 2188.78
Excise Duty 101.07 92.88
Discount 188.71 156.25
Net Sales 2096.69 1939.65
Other Income 34.34 41.52
Profit before Interest Depreciation and Tax 467.05 411.49
Interest 9.53 9.73
Depreciation 53.76 49.16
fore Tax & Exceptional items be Profit 403.76 352.60
Current Tax inclusive of earlier year Tax 70.90 114.63
Deferred Tax Asset/Liability 19.50 (5.28)
Profit after Tax 313.36 243.25
Balance of profitbrought forward from previous year 587.99 413.44
Interim Dividend on Equity Shares 42.51 16.39
Dividend of Previous Years - -
Income Tax on Interim Dividend 8.63 3.83*
Transfer to General Reserve 31.33 24.33
Depreciation of NIL assets - 2.76
Proposed Final Dividend on Equity Shares - 17.76
Income Tax on Final Dividend proposed on Equity shares - 3.63
Balance Profit / (-) Loss carried forward 818.88 587.99

* includes dividend tax paid for earlier year

There have been no material changes and commitmentsifanyaffecting the financialposition of the Company which have occurred between the end of the financialyear of theCompany to which the financial statements are related and the date of the report.

2. KEY HIGHLIGHTS

Your Company’s Net Sales for the year grew to Rs 2096.69 cr from Rs1939.65 cr last year registering a growth of 8.10% YoY. The OperatingProfit Rs 432.71 crfrom Rs 369.97 cr last year i.e. an increase of 16.96% YoY. The Net Profit for the year onstand-alone basis grew to Rs 313.36 cr from Rs 243.25 cr in the previous year i.e.an increase of 28.82% YoY. EBIDTA margin improved 157 basis points to 20.64% in 2015-16over 2014-15 and PAT margin strengthened 241 basis points to 14.95% in 2015-16 over2014-15. uniqueness of the product and its Your Company proposes to transfer an amount ofRs 31.33 cr to the General Reserves.

Your Company’s Net Profit on a consolidated basis increased to Rs 315.33 cr duringthe year as compared to Rs 245.89 cr in the previous year a growth of 28.24% YoY.

The Earnings per share (EPS) for the year stood at Rs 22.90 per share an increase of28.36 % compared to Rs 17.84 per share for the previous year.

During the year your Company launched "VIBRANT" a highly caneffective generationgranular insecticide new attack two pests (stem borer andlepidoptera/leaf folder) in a application under the exclusive in license agreement.

As a part of its strategy to provide crop solutions your Company has also introduced "PERIDO"a broad spectrum fungicide (recommended to be used in rice wheat groundnut tea andsoyabean) which will complement the application of various agri-chem products of PI andalso increase their benefits to farmers. Your Company has launched new avatar of Biovitanamed

"BIOVITAX"

in domestic

Your Company commercialized three new molecules for custom next synthesis exportswhich are expected to gain traction few years.

Your Company has made significant capital investments to the of Rs 321.44 cr in thisyear including setting up two new state-of-the art manufacturing facilities at Jambusarand world class R&D centre engineering enhancements at Udaipur.

3. PERFORmANCE REVIEw

Last two years have been quite challenging for Indian Agriculture. The growth rates inagriculture have been fluctuating at 1.5 per cent in 2012-13 4.2 per cent in 2013-14 and(-) 0.2 per cent in 2014-15. According to the CSO (Central Statistics Office) estimatethe in the agri sector is estimated at 1.1 per cent for the year 2015-16. Deficit in themonsoon for two consecutive years has been unfavourable totheagrisector.Theunevenspatialand temporal distribution of monsoon impacted the cropacreages and productivity in rain fed regions mainly Gujarat Maharashtra KarnatakaTelangana parts of Uttar Pradesh. The acreages and productivity key crops like ricecotton pulses & oilseeds suffered which adversely impacted the consumption ofagrochemicals.

In a tough year when the industry struggled to maintain its top line and bottom-linenumbers your Company outperformed the industry and registered a growth of 6% in thedomestic The flagship rice herbicide brand "NOmINEE GOLD" continued forthe year grew to to maintain its growth chart while and "VIBRANT"

"BIOVITAX"

have been received well by the farmers in all crops. In addition to maintaining aleadership position your started strengthening its footprints into other key crops mainlyhorticulture "KEEFUN" which was lauched a year ago has seen a tremendousresponse from the market. The experience of first broad year of commercializationspectrum of target pests on a number of economically important crops will help expand KEEFUN’sapplication in coming Building strong pipeline has been a key focus area to ensuresustained growth in the long term. Your Company has been working very closely with theglobal innovator Companies to evaluate their products for Indian markets. Your Company isworking on a rich pipeline which will enable one to two new product launches every year.In the review year your Company has moved into advanced stages of arrangements withinnovator Company’s to evaluate ~10 new products; Some of them have been identifiedas potential candidates for further evaluation and Your Company’s exports grew by9.5% during the year despite a slowdown in the global market situation. Commercializationof three new molecules (two active ingredients and one strategic key intermediate for ablockbuster herbicide) along with commissioning of two new multi-purpose plants atJambusar SEZ is expected to provide growth momentum to the exports in the coming years.Your Company has invested in top quality state-of-the-art technologies in theconstruciton of these two plants to ensure the highest level of safety productivity andconsistency in output. Consistent delivery performance was achieved providing a boost tothe strong customer satisfaction levels. Initiatives in the areas of process innovationand cost improvement tune resulted in yield improvement waste reduction and greener-synthesis routes. Further high plant uptime time-anddue to de-bottleneckingactivitiesupgradations brought about greater efficiencies.

Research & Development (R&D)

During this year R&D initiated laboratory development work on 15 new projectscovering Agro Pharma and Electronic chemical applications. Some of these molecules arestill in early phase of their life cycle and are patented.

Capability enhancements were also one of the key focus area for R&D namelyinfrastructure upgradation external collaboration and training in the areas such asautomation of laboratory reactor set-up process safety high pressure chemistry flowchemistryfluorination and hydrazine synthesis. During the year under review the R&Dteam successfully carried out synthesis of several new molecules. In the custom synthesisarea eleven new molecules progressed to the next stage and three molecules werecommercialized during the year. The R&D team also worked on process improvementsprojects for several existing products to identify cost improvement opportunities and thenimplement these improvements by the Management of theat the plant level. EnvironmentHealth and Safety (EHS) considerations were given the usual special emphasis in theprocess development work. Further the R&D & manufacturing are constantly workingto reduce environmental load and enhance safety.

You will be glad to know that your Company has completed first phase of the expansionof R&D set up by constructing one floor of two-story building planned of approx.60000 square feet containing "state-of-the-art" process synthesis and analysislaboratory within the existing campus at Udaipur. This new infrastructure would supportthe increasing R&D projects under various disciplines of chemistry library synthesisand joint research assignments with global innovator partners.

Finance

Your Company continued to focus on managing cash efficiently and ensured that it hadadequate liquidity and back up lines of credit. Net cash from operations for the yearstood at Rs 352.70 cr. Your Company follows a prudent financial policy and aims atmaintaining an optimum financial gearing. The Company’s Debt to Equity Ratio was 0.11as on March 31 2016. Your Company has been credit rated by CRISIL Limited. TheCompany’s credit rating for long term was revised from Stable to Positive for longterm loans i.e ‘CRISIL AA-/Positive and for short term loans rating was reaffirmeddegree of safety regarding timely servicing of financial obligations and also a vote ofconfidence reposed in your

4. DIVIDEND

During the year the Board of your Company has declared an interim dividend of Rs 1.2per equity share of Rs 1 each in its Board Meeting on October 27 2015 and second interimdividend of Rs 1.9 per equity share of Rs 1 each in its meeting held on March 14 2016aggregating toRs 3.10 each on equity shares of Rs 1 each which was paid on November 242015 and March 30 2016 In view of the two interim dividends declared the Board has notrecommended any final dividend.

5. SUBSIDIARY COmPANIES

Your Company has three Wholly-owned Subsidiary Companies as on March 31 2016. Themembers may refer to the financial statements forming part of the Annual Report asrequired under the provisions of Section 129(3) of the Companies Act 2013. The keyhighlights of these subsidiary companies are as under:

(i) PI Life Science Research Ltd.

During the year the Company posted a profit ofRs 170.24 lacs earned on account ofvarious R&D activities for developing new products.

(ii) PI Japan Company Ltd.

The Company posted a net profitof JPY 18.60 lacs during the year. Due to the size ofoperations and local laws the annual accounts of this Company are not required to beaudited. The same have been certified.

(iii) PILL Finance and Investments Ltd.

The Company posted a profit ofRs 16.08 lacs during the year. A statement containingsalient features of the financial statements of the Subsidiary Companies in form AOC-1 isgiven in Annexure ‘A’ to this Report. Further in accordance with the provisionsof Section 136 of the Companies Act 2013 the Annual Report of the Company containingthe Standalone and the Consolidated Financial Statements alongwith the Audited AnnualAccounts of each Subsidiary Company have been placed on the website of the Company i.e.www.piindustries.com.

6. RISK mANAGEmENT POLICY AND INTERNAL CONTROLS

Your Company has in place a mechanism to identify assess monitor and mitigate variousrisks associated with the business. Major risks identified by the business and functionsare systematically addressed through mitigating actions on continuing basis. The same arereviewed by the Audit Committee and the Board of Directors of your Company from time totime.

Your Company’s Internal Control Systems are commensurate with the nature of itsbusiness and the size and complexity of its operations. It comprises of audit andcompliance by in-house internal audit team supplemented by internal audit checks by M/sKPMG India LLP. at CRISIL A1+’. This reflects a very high Internal Auditors of theCompany.

The Internal Auditors independently evaluate the adequacy of financials. internalcontrols and concurrently audit the financial transactions and review various businessprocesses. Independence of the Internal Auditors and therefore compliance is ensuredthrough direct reporting of internal audit division and Internal Auditors to the AuditCommittee.

7. MANAGEMENT DISCUSSION AND ANALYSIS

A detailed report on the Management Discussion and Analysis is respectively. providedseparately in this Annual Report.

8. RELATED PARTY TRANSACTIONS

All the related party transactions are entered on an arm’s length basis and are incompliance with the applicable provisions of the Companies Act and the ListingRegulations. There are no materially significant related party transactions made by theCompany with Promoters Directors or Key Managerial Personnel etc. which may havepotential conflict with the interest of the Company at large. All Related PartyTransactions are presented to the Audit Committee. Omnibus approval is obtained for thetransactions which are foreseen and repetitive in nature. A statement of all related partytransactions is presented before the Audit Committee on a quarterly basis specifying thenature value and terms and conditions of the transactions.

The Related Party Transactions Policy as approved by Board on recommendation of theAudit Committee is uploaded on the Company’s website at the following weblink:http://www.piindustries.com/sites/default/files/RPT%20Policy_ PI.pdf.

Your Company does not have any contracts or arrangements with its related parties underSection 188(1) of the Companies Act which are not on arm’s length basis or materialin nature. Hence the details of such contracts or arrangements with its relatedpartiesare not disclosed in Form AOC-2 as prescribed under the Companies Act 2013 and theRules framed thereunder. Your Directors draw attention of the Shareholders to Note No.38of the financial statements which set out related party disclosures.

9. AUDITORS

Statutory Auditors and Auditor’s Report

The Statutory Auditors of the Company M/s S.S. Kothari Mehta & Co. CharteredAccountants New Delhi (Firm Regn No: 000756N) hold office till the conclusion of theensuing Annual General Meeting of the Company and being eligible offer themselves forre-appointment. The Company has received their written consent and certificate that theymeet the criteria provided under Section of the Companies Act 2013 and that theappointment if made shall be in accordance with the applicable provisions of theCompanies Act 2013 and rules framed thereunder. The Audit Committee and the Board ofDirectors recommends the re-appointment of M/s S.S. Kothari Mehta & Co.Chartered Accountants as the and Auditors of the Company in relation to the financialyear2016-17. The re-appointment proposed is within the time frame for transition under thethird provision to sub-section (2) of Section 139 of the Companies Act 2013.

Auditors Report does not contain any qualification; hence same does not call for anyexplanation.

Cost Auditor

Pursuant to the directives issued by the Central Government an audit of the costrecords relating to Insecticides (Technical grade and formulations) manufactured by theCompany is required be conducted by an auditor with therequisitequalifications asprescribed 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 ofthe Audit Committee for the conduct of the audit of cost records of Insecticides(Technicalgrade and formulations) for the year ending March 31 2017. Pursuant to the provisions ofSection 148 of the Companies Act 2013 and the Rules made thereunder Members arerequested to consider the ratification of the remuneration payable to M/s K Goyal &Co. Cost Accountants.

Secretarial Auditor

The Board had appointed Mr. R.S. Bhatia (CP No.2514). Practicing Company Secretary tocarry out Secretarial Audit in accordance with the provisions of Section 204 of theCompanies Act 2013 and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 for the financial year ended March 31 2016. The Secretarial AuditReport for the financialyear ended March 31 2016 has been obtained and does not containany qualification which requires any comments from the Board. The Secretarial AuditReport for financialyear ended March 31 2016 is annexed to this report as Annexure‘B’.

10. PARTICULARS OF LOANS GUARANTEES OR INVESTmENTS

Your Company has not made any investment during the year under the provisions ofSection of loans and guarantees covered under the aforesaid provisions are mentioned inNote No. 14 of the Notes to the financial statements.

11. DEPOSITS

Your Company has not accepted any deposits during the financial year 2015-16. Furtherthere are no deposits unclaimed or pending in the books of the Company.141

12. TRANSFER OF UNCLAImED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Dividend remaining unclaimed and unpaid for more than seven years has been transferredto the Investor Education Protection Fund. Pursuant to the provisions of InvestorEducation and Protection Fund (Uploading of information regarding unpaid and unclaimedamounts lying with Companies) Rules 2012 the Company has uploaded the details of unpaidand unclaimed amounts lying with the Company as on September 15 2015 (date of last AnnualGeneral Meeting) on the Company’s website and on the website of the Ministry ofCorporate Affairs. The weblink for the same ishttp://www.piindustries.com/sites/default/files/Copy%20of%20Unpaid%20Div%2015%209%2015%20all.pdf.

13. BOARD AND COmmITTEES a) Board of Directors

Your Company is managed and controlled by an experienced Board comprising an optimumblend of Executives and Non-Executive Professional Directors. Since the Chairperson of theBoard is an Executive Chairperson more than half of the Board comprises of IndependentDirectors. As on March 31 2016 the Board of Directors consists of eight Directorsincluding Chairman & Managing Director Managing Director & CEO .G. Whole timeDirector and five Non-executive Directors out of which four are Independent Directorsincluding one Woman Director. The composition of the Board is in conformity withRegulation 17 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations

2015 and the relevant provisions of the Companies Act 2013. All the Directors possessthe requisite qualifications and experience in general corporate Management financebanking and fields which enable them to contribute their capacity as Directors of theCompany.

All Independent Directors have given a declaration confirming they meet the criteria ofindependence as prescribed both under the Companies Act 2013 and the Listing Regulations.Mr. Anurag Surana has tendered his resignation from the Board of the Company w.e.f May 112016. The Board places on record the appreciation of the services rendered by him duringhis association with the Company.

Based on the recommendation of Nomination and Remuneration Committee Mr. Ravi Narainhas been inducted as an Additional Director on the Board of the Company w.e.f May 24 2016and accordingly he holds his office up to Annual General Meeting. The Company is inreceipt of from the shareholder proposing his appointment as Independent Director on theBoard. The Board recommends his appointment as Independent Director to the Board forapproval of the members in the forthcoming Annual General Meeting. irregularities; Inaccordance with the provisions of Companies Act 2013 and Articles of Association of06429468) shall retire at the forthcoming Annual General Meeting and being eligibleoffers himself for re-appointment. The Board recommends his re-appointment for theapproval of the members at the forthcoming Annual General Meeting.

b) Evaluation of the Board Performance

In compliance with the Companies Act 2013 and Regulation 17 (10) of the SEBI (ListingObligations and Disclosure Requirement) Regulations2015 the Board has carried out anevaluation of its own performance Committees and performance of individual Directorsduring the year under review. The evaluation framework for assessing the performance ofDirectors comprised of criteria like quality of e or perspectivcontributiontotheBoarddeliberations strategic inputs regarding future growth of Companyand its performance attendance of Board Meetings and Committee Meetings commitment toshareholder and other stakeholder interests. The evaluation involves Self-Evaluationformation. by the Board Members and subsequent assessment by the Board of Directors. Amember of the Board does not participate in the discussion of his/her evaluation Detailsof performance evaluation are provided in Report.

c) Number of Board Meetings conducted during the year under review

A calendar of Meetingsis prepared and circulated in advance to the Directors. Duringthe year Board of Directors met fivetimes.The details of the Board meetingsand attendanceof the Directors are provided in the Corporate Governance Report.

d) Composition of Audit

The Board has a duly constituted Audit Committee which comprises allied of Mr. NarayanK. Seshadri as the Chairman Mr. Rajnish Sarna and to the Company in Mrs. Ramni Nirula asthe members. Details on the Committee are given in the Corporate Governance Report.

e) Directors’ Responsibility Statement

In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility statement:

(a) in the preparationof the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the end of the financial year the conclusion of forthcomingand of the profit of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) Based on the framework of internal financial controls compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed byManagement and the relevant Board Committees including the Audit Committee the Board isof the opinion that the Company’s internal financial controls were adequate andeffective during FY 2015-16 ensuring the orderly and efficient conduct of its businessincluding adherence to the Company’s policies the safeguarding of its assets theprevention and detection and of frauds and errors the accuracy and completeness of theaccounting records and the timely financial

14. KEY MANAGERIAL PERSONNEL

.

During the year Mr. Rajnish Sarna Whole-time Director who was . also holding theposition of CFO relinquished his office in the capacity of CFO and continuedas Whole-timeDirector on the Board of the Company. Ms. Jayashree Satagopan was appointed as ChiefFinancial Officer of the Company w.e.f July 28 2015. There has been no change in anyother Key Managerial Personnel of the Company during the year.

15. EXTRACT OF ANNUAL RETURN

The extracts of Annual Return in Form MGT-9 pursuant to the provisions of Section 92read with Rule 12 of the Companies (Management and Administration) Rules 2014 isfurnished in Annexure ‘C’ attached to this Report.

16. EMPLOYEES

a) Remuneration policy of the Company

The Remuneration appointment and remuneration of the Directors Key ManagerialPersonnel and Senior Executives of the Company including the attributes criteria fordetermining qualifications independence of a Director and other related provided in theCorporate Governance Report which forms a part of this report.

b) Human Resources and Trade Relations

Acquisition and retention of right talent is critical to maintain desired operationalstandards. The success of any organization is driven by its people and your Companybelieves that its employees are one of its biggest assets. Various Training &Development programmes are organized to harness the skills of Company employees. Lot ofefforts are put in Talent Management Strong Performance Management learning and traininginitiatives in order to ensure that your Company en in Annexure ‘E’.consistently develops strong inspiring and credible leadership at various levels of theorganization.

During 2015-16 your Company continued to have cordial relationship with all itsemployees and maintained healthy cordial and harmonious industrial relations at alllevels.

Total permanent workforce of your Company stood at 1749 as on March 31 2016.

c) Prevention of Sexual Harassment at Workplace

Redressal Your Company has a Policy on Prohibition Prevention of Sexual Harassment ofWomen at Workplace and matters connected therewith or incidental thereto covering all theaspects as required under the "The Sexual Harassment of Women at Workplace(Prohibition Prevention and Redressal) Act 2013. The Company has constituted InternalComplaints Committee (ICC) known as Prevention of Sexual Harassment (POSH) enquire in tocomplaints of Sexual Harassment and recommend appropriate action. There were no complaintsreceived under the aforesaid policy during the year.

d) Particular s of Employees and related disclosures

The information required under Section 197 of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014forms part of this Report and annexed as Annexure ‘D’. However as per firstproviso to Section 136(1) of of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the Report and Financial Statements are being sent to the Membersof the Company excluding the statement of particulars of employees under Rule 5(2). Anymember interested in obtaining a copy of the said statement may write to the CompanySecretary at the Registered Office of the Company.

Your Directors place on record their appreciation contribution made by the employees ofyour Company.

e) Employee Stock Option Plan / Scheme

During the year your Company granted 277126 performance options to eligibleemployees under PII-ESOP Scheme 2010 as per the criteria laid down by CompensationCommittee of the Board. The aforesaid options shall vest after a lock in period of oneyear have been from the date of grant. The vesting period of aforesaid options is fouryears. The exercise price of options granted have been arrived by giving discount to theclosing market price of the equity share on National Stock Exchange India Limited one dayprior to the date of grant of option. Voting rights on the shares issued to employeesunder the ESOP Scheme are either exercised by them or through their appointed proxy. Noemployee has been issued share options during the year equal to or exceeding 1% of theissued capital of the Company at the time of grant. Details of options as required underSEBIregulationsis

17. CORPORATE GOVERNANCE

Your Company takes pride in its Corporate Governance structure and strives to maintainthe highest possible standards. A detailed report on the Corporate Governance code andpractices of the Company along with a certificate from the auditors of the Companyregarding compliance of the conditions of Corporate Governance as stipulated underRegulation 34 of SEBI (LODR) Regulations 2015 are given in separate section of annualreport.

18. VIGIL MECHANISM – WHISTLE BLOWER POLICY

Your Company has established a vigil mechanism for Directors and employees to reporttheir genuine concerns as approved by the Board on the recommendation of the AuditCommittee. The Whistle Blower Policy of the Company is formulated and uploaded on theCompany’s website at the following weblink: http://www.piindustries.com/sites/default/files/PI_Whistle%20Blower%20 toPolicy%20or%20Vigil%20Mechanism.pdf The Policy provides for adequate safeguards againstvictimization of employees who avail of the mechanism and also provides for direct accessto the Chairman of the Audit Committee. It is affirmed that no personnel of the Companyhas been denied access to the Audit Committee.

19. CORPORATE SOCIAL RESPONSIBILITY ("CSR") ANDRELATED MATTERS

Your Company’s commitment to CSR is well know. In accordance with the requirementsof Section 135 of the Companies Act 2013 your Company has a CSR Committee comprisingfive Mr. Salil Singhal as Chairman and Mr. Mayank Singhal Mr. Rajnish Sarna Mr. PravinK. Laheri and Mrs. Ramni Nirula as Members. Your of energy technology Company has alsoformulated a Corporate Social Responsibility Policy (CSR Policy) which is available on thewebsite of the Company at http://www.piindustries.com/sites/default/files/PI%20CSR%20Policy.pdf

CSR

Your activities throughCompany carried out the CSR a Trust set up by PI Industries Ltd.During the year PIFoundation PI Foundation undertook several CSR mentioned below:

a) Promotion of Direct Seeded Rice (DSR technology) awareness program forfarmerstoincreaseproductivity.

b) Agri Skilled Development for Rural Youth to increase employability.

c) Agro Advisory Programs to improve yield and conserve environment.

d) Farmar Engagement Programs.

e) Certified V ocational Training Program For Chemical Plant Operators.

f) Swachh Bharat Abhiyan Programme - provision of toilets in 11 schools near Panoli.

g) Sanitation and Hygiene Awareness Programme in 11 schools near Panoli.

h) Preventive Healthcare through Mobile Health Units covering 59 villages in Jambusar

i) Supporting eductionthrough distribution books science and maths kit.

j) Engagement with Women to Promote Security Equality Dignity & Peace underCommunity Development Project.

k) PurifiedWater Supply (RO Water) to villagers in north Karnataka Andhra Pradesh andJambusar.

During the financial year 2015-16 the Company has contributed an amount of Rs 5.14 cr.to PI Foundation aggregating to 2% of its average net profits for last 3 years i.eRs257.15 cr. PI Foundation has been able to spend an amount of Rs 3.87 cr. duringthefinancial or commission from Though PI Foundation had earmarked not able to spendentire amount as shortlisting agencies through which various projects would be routed hadtaken time.Moreover few projects considered are ongoing and spread over 2 to 3 yearsandwouldthusrequireacontinuousoutflow in respect of the same.

The by the Company are details of CSR highlighted in the report format provided underthe Companies (Corporate Social Responsibility Policy) Rules 2014 in Annexure‘F’ which is attached to this report.

20. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO

The informationpertaining to conservation absorption foreign exchange earnings andoutgo 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 ‘G’ attached tothis report.

21. CHANGES IN SHARE CAPITAL

During the year your Company had issued 551040 Equity Shares of Rs 1 each which wereallotted to PII ESOP Trust (Trust) set up some of which are to administer PII EmployeeStock Option Plan-2010. The Trust allocates these shares to the employees of the Companyand of its subsidiaries on exercise of stock options from time to time under the aforesaidScheme. As a result of this allotment the paid-up equity share capital of your Companyincreased to Rs 13.71 cr (comprising of 137127222 Equity Shares of Rs 1 each as onMarch 31 2016) from Rs 13.65 cr (comprising of 136576182 Equity Shares of Rs 1 each ason March 31 2015).

22. JOINT VENTURE

The Board of Directors in its meeting held on May 24 2016 approved the proposal toenter in to a Joint Venture Agreement with Mitsui Chemical Agro Inc. Japan (MCAG). TheJoint Venture would provide registration services for MCAG’s proprietoryagrochemicals and leverage PI’s deep understanding of Indian agriculture farmersneed regulatory system etc. and MCAG’s capability of delivering innovativeagrochemicals.

23. GENERAL

Your Directors state that nodisclosure oflibrarybooksnote reportingis required inrespect of the following items as there were no transactionson these items during the yearunder review:-a) Issue of equity shares with differential rights as to dividend voting orotherwise b) Issue of shares (including sweat equity shares) to employees of the Companyunder any scheme saved and except issued under ESOP Scheme as referred to in this Report.c) Neither the Managing Directors nor the Whole-timeDirector of the Company received anyremuneration year2015-16. the projectsforCSRitwas any of its subsidiaries d) Nosignificant or material orders were passed by the Regulators the implementing or Courts orTribunals which impact the going concern status and Company’s operations in

24. ACKNOwLEDGmENTS

Your Directors wish to express their grateful appreciation for the valuable support andco-operation received from bankers business associates institutions shareholdersvarious lenders financial departments of the Government of India as well as the StateGovernments of Rajasthan & Gujarat the farming community and all our otherstakeholders.

The Board places on record its sincere appreciation towards the Company’s valuedcustomers in India and abroad for the support and confidence reposed by them in theorganization and looks forward to the continuance of this supportive relationship in thefuture.

Your Directors proudly acknowledge the contribution and hard work of the employees ofthe Company and its subsidiaries at all levels who through their competence hard worksolidarity and commitment have enabled the Company to achieve consistent growth.

On behalf of the Board of Director
For PI Industries Ltd.
Sd/-
Place: Gurgaon Salil Singhal
Date: May 24 2016 Chairman & Managing Directors
DIN: 00006629

ANNExURE - A

Form AOC-I

Statement containing salient features of the Financial Statement of Subsidiaries/Associate Co/JV.

(Pursuant to first proviso to Sub-section (3) of Section 129 read with Rule 5 ofCompanies (Accounts) Rules 2014)

Part "A": Subsidiaries

Particulars Name of the subsidiary
PI Life Science Research Ltd. PI Japan Ltd. PILL Finance and Investments Ltd.
1 Reporting period for the subsidiary concerned if different from the holding Company’s reporting period NA NA NA
2 Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries. INR JPY; 1 JPY = 0.58985 INR INR
3 Share capital 94.50 29.49 36.00
4 Reserves & surplus 1219.94 82.16 288.65
5 Total assets 1345.37 132.96 333.11
6 Total Liabilities 30.93 21.31 8.46
7 Investments - - 4.13
8 Turnover 273.95 281.27 24.65
9 Profit before taxation 162.33 13.42 23.96
10 Provision for taxation (7.91) 3.33 7.88
11 Profit after taxation 170.24 10.09 16.08
12 Proposed Dividend - - -
13 % of shareholding 100% 100% 100%

Notes:

1 Names of subsidiaries which are yet to commence operations NIL
2 Names of subsidiaries which have been liquidated or sold during the year. NIL
3 Part B of the Annexure is not applicable as there are no Associate Companies/ Joint Ventures of the Company as on March 31 2016.

 

On behalf of the Board of Director
For PI Industries Ltd.
Sd/-
Place: Gurgaon Salil Singhal
Date: May 24 2016 Chairman & Managing Directors
DIN: 00006629

ANNEXURE - B

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED mARCH31 2016

[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]

The Members

PI Industries Limited

Regd. Office: Udaisagar Road Udaipur 313001 Rajasthan. CIN No: L24211RJ1946PLC000469

I haveconductedtheSecretarialAuditinrespectofcompliance . egulations with specificapplicable statutory provisions and adherence to good corporate practices by PI INDUSTRIESLIMITED (hereinafter called Regulations 2008 - Not the Company).

Secretarial Audit was conducted in a manner that provided me with a reasonable basisfor evaluating the corporate conduct /statutory compliance and expressing my opinionthereon. Based on my verification of the Company’s books papers minute books formsand returns filed and other records maintained by the Company the information provided bythe Company its officers agents and authorized representatives during the conduct ofsecretarial audit the explanations and clarifications given to me the representationsmade by the Management I hereby report that in my opinion the Company has during theaudit period covering the financial year ended on March 31 2016 complied with statutoryprovisions listed hereunder and also that the Company has proper Board processes andcompliance mechanism in place to the extent in the manner and subject to the reportingmade hereinafter: Regulations 1998 - Not applicable as I have examined the books papersminute books forms and returns filed and other records maintained by the Company for thefinancial year ended on March 31 2016 according to the provisions of:

(i) The Companies Act 1956 and Companies Act 2013 ("the Acts’) and therules made thereunder as applicable;

(ii) The SecuritiesContracts (Regulation) Act 1956 (‘SCRA’) and the rulesmade thereunder;

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act 1999 and the rules and regulationsmade thereunderto the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings; (v) The following Regulations prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’):

a. Securities and Exchange Board of India (Substantial 2011; AcquisitionofSharesandTakeoversRegulations

b. Securities and Exchange Board of India (Prohibitionof InsiderTrading)Regulations c.Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)Regulations 2009 - Not applicable as the Company did not issue any security during thefinancial year under review;

d. Securities and Exchange Board of India (Share Based EmployeeBenefits)

e. Securities and Exchange Board of India (Issue and Listing as of Debt Securities) theCompany has not issued any debt securities during the financial year under review;

f. Securities and Exchange Board of India (Registrars to an Issue and Share TransferAgents) Regulations1993 regarding the Companies Act and dealing with client - NotApplicable as the Company is not registered as Registrar to an Issue and Share TransferAgent during the financial year under review;

g. Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009 - Not applicable as the Company has not delisted its equity shares from any stockexchange during the financial year under review; and h. Securities and Exchange Board ofIndia (Buy back of the Securities) Company has not bought back any of its securitiesduring the financial year under review.

vi) The Management has identified and confirmed the following laws as beingspecifically applicable to the Company:

a. Insecticides Act 1968

b. Indian Boiler Act 1932

c. Explosives Act 1884

d. Poison Act 1919

e. Handling of Hazardous Waste Rules 1988

f. Petroleum Act 1934 Though the previous year’s report contains sixteen (16)laws under this category but on perusal of the applicability of remaining ten (10) laws itis found by the management that these laws were general in nature therefore not mentionedin the report.

I have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) The Listing Agreement entered into by the Company with BSE Limited and National

Based on my verification of the Company’s books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the officers agents and authorized Company its representatives during theconduct of Secretarial Audit I hereby report that in my opinion the Company has duringthe financial year ended March 31 2016 complied with the aforesaid laws.

Based on the information received and records made available I further report that:

1. The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the financial year underreview were carried out in compliance with the provisions of the Acts and the ListingAgreement;

2. Adequate notice was given to all the Directors regarding holding of the BoardMeetings. Agenda was sent in advance before the meeting. There exists a system forDirectors to seek and obtain further information and clarifications items before themeeting and for meaningful participation the meeting;

3. Decisions at the Board Meetings were taken unanimously & recorded as part of theminutes of the meetings. was there nor any dissent recorded).

In my opinion there are adequate systems ofIndiaLimited. & processes in the Companycommensurate with the size & operations of the Company to monitor & ensurecompliance with applicable laws rules regulations & guidelines & applicablegeneral laws like labour laws environmental laws & competition laws etc.

Based on the compliance mechanism established by the Company and on the basis of theCompliance Certificate(s) of the Managing Director and Chief Financial Officer and takenon record by the Board of Directors at its meeting(s) I am of the opinion that themanagement has adequate systems and processes commensurate with its size and operationsto monitor and ensure compliance with the specifically applicable laws rules regulationsand guidelines as mentioned in this report and applicable general laws like labour lawscompetition laws environmental laws etc. I further report that the Company has allotted551040 equity shares to PII ESOP Trust on October 15 2015 under the PII- ESOP Scheme2010.

Sd/-
R. S. Bhatia
Place: New Delhi Practicing Company Secretary
Dated: May 24 2016 CP No: 2514

ANNEXURE - B (1)

To The Members

PI Industries Limited

Regd. Office: Udaisagar Road Udaipur 313001 Rajasthan. CIN No: L24211RJ1946PLC000469

i. Maintenance of Secretarial record is the responsibility of the Management of theCompany. My responsibility is to express an opinion on these secretarial records based onaudit undertaken.

ii. I have followed the audit practices and process as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected inSecretarial records. I believe that the processandpractices followed provide areasonable basis for my opinion.

iii. I have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company. Compliance of applicable financial laws including Directand Indirect tax laws by the Company has not been reviewed in this Audit & the samehas been subject to review by the Statutory Auditors & other designated professionals.

iv. Where ever required I have obtained the Management representation about theCompliance of laws rules and regulations and happening of events etc.

v. The Compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the Management. My examination was limited to the verificationof procedure on test basis.

i. The Secretarial Audit report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the Management has conductedthe affairs of the Company.

Sd/-
R. S. Bhatia
Place: New Delhi Practicing Company Secretary
Dated: May 24 2016 CP No: 2514

ANNEXURE - D Statement of Disclosure of Remuneration under Section 197 of CompaniesActof 2013 and Rule5 the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014

1. The ratio of the remuneration of each Director to the median remuneration2015-16 as well as the percentage increase in remuneration of each Director ChiefFinancial Officer / Company Secretary is as under:

(Explanation:(i) the expression "median" means the numerical value separatingthe higher half of a population from the lower half and the median of a finite list ofnumbers may be found by arranging all the observations from lowest value to highest valueand picking the middle one; (ii) if there is an even number of observations the medianshall be the average of the two middle values)

Name of Director Ratio to Median Remuneration Percentage increase in remuneration over previous year
Non-Executive Director
Mr. Narayan K. Seshadri 3.75:1 26.69
Mr. Pravin K. Laheri 3.40:1 27.34
Mrs. Ramni Nirula 3.90:1 43.38
Mr. Anurag Surana 3.20:1 26.98
Dr. Venkatrao S. Sohoni 3.40:1 27.34
Executive Director
Mr. Salil Singhal Chairman & Mg. Director 140:1 19.5
Mr Mayank Singhal Mg. Director & CEO 132:1 22.68
Mr Rajnish Sarna Whole-time Director 80:1 28.62

Note:

a) Remuneration to Non-Executive Director comprises of sitting fees and Commission.Commission relates to the financial year ended March 31 2016.

b) Value of stock options has not been considered while determining the increase inremuneration. The percentage increase in remuneration of the Company Secretary is 12 %.

2. The percentage increase in median remuneration of employees in Financial Year2015-16: 15.47%.

3. The number of permanent employees on the rolls of Company: 1749.

4. The explanation on the relationship between average increase in remunerationand Company performance.

Business goals are set up in beginning of the year based on the Company’s businessstrategy these goals are then deployed in individuals KRA’s. Performance evaluationis done on the basis of grading assigned to the individual on basis of their performance.Remuneration of employees has a close linkage with the performance of the Company. ThePerformance Linked Reward (PLR) which is a variable component in the remuneration of allthe managerial staff has a direct correlation with the Company’s performance. PLR iscalculated on the basis of individual’s and Company’s performance. CompanyPerformance has a higher weightage for senior positions and lower weightage for juniorpositions.

5. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company:

Aggregate remuneration of Key Managerial Personnel (KMP) in FY 2015-16 ( Rs /Cr) 20.57
Revenue (Rs /Cr) 2096.69
Remuneration of KMPs (as % of revenue) 0.98
Profit Rs /Cr) 313.36
Remuneration of KMP (as % of PAT) 6.56

In line with Company’s remuneration policy the salary increase and the annualbonus pay-outs to its Employees including Key Managerial Personnel are directly linked toindividual performance as well as that of the business. Given the superior businessperformance and the performance rating of the Key Managerial Personnel appropriate rewardby way of salary increase or variable pay have been awarded to the Key ManagerialPersonnel for the current year. This was duly reviewed and approved by the Nomination& Remuneration Committee of the Company. During the year the Company’s net salesgrew by 8.10% operating profit grew by 16.96% and net profit grew by 28.82%.

6. Variations in the market capitalization of the Company price earnings ratioas at the closing date of the current financial year and previous financial year andpercentage increase over decrease in the market quotations of the shares of the Company incomparison to the rate at which the Company cameoutwiththelastpublicoffer in case oflisted Companies:

As on March 31 2016 As on March 31 2015 % Change
Market Capitalisation ( Rs /Cr) 7794.99 8313.39 (6.20)
Price Earnings Ratio 24.82 34.12 (27.25)

The data for comparison of Company shares with respect to public offer has not beenprovided since the Company has never come out with public offering. The market quotationof the Equity Shares of the Company as at March 31 2016 was Rs 568.45 with face value ofRs 1 each.

7. Average percentile increase already made in the salaries of employees otherthan the managerial personnel in the last financial year and its comparison with thepercentile increase in the managerial remuneration and justification any exceptionalcircumstances for increase in the managerial remuneration:

% change in Remuneration
Average increase in salary of employees (other than managerial personnel) 20.50 %
Average increase in remuneration of Managerial personnel 23.58 %

The increment given to each individual employee is based on the employees’potential experience performance and contribution to the Company’s progress over aperiod of time and also benchmarked against a comparable basket of relevant companies inIndia. It may however be noted that Executive Directors are also entitled to commissionwhich is decided by Board on the basis of the recommendation(s) received from Nomination& Remuneration Committee. Further stock optionshave been granted to Whole-timeDirector and Company Secretary. Hence the same is strictly not comparable to percentileincrease in salary of other employees. It is clarified here that value of stock option hasnot been taken in to account for computing this increase.

8. Comparison of the each remuneration of the Key Managerial Personnel againstthe performance of the Company:

Mr. Salil Singhal Mr. Mayank Singhal Mr. Rajnish Sarna Ms. Jayashree Satagopan Mr. Naresh Kapoor
CmD MD & CEO wTD CFO CS
Remuneration in FY 2015-16 (InRs) 680.96 643.21 550.50* 126.68# 55.74*
Remuneration of each KMP as % of Total Revenue of Rs 2096.69 Cr 0.32 0.30 0.26 0.06 0.02
Remuneration of each KMP as a % of Profit After Tax of Rs 313.36 Cr 2.17 2.05 1.75 0.40 0.17

*Includes value of stock options.

# employed for part of year.

9. The key parameters for any variable components of remuneration availed by theDirectors.

The variable component of Non-Executive Directors’ remuneration comprises ofcommission. In terms of the Shareholders’ approval obtained at the Annual GeneralMeeting held on September 10 2014 commission is paid at a rate not exceeding 1% perannum of the profits of the Company computed in accordance with the provisions of theCompanies Act 2013. The distribution among the Non-Executive Directors is recommended bythe Nomination and Remuneration Committee and approved by the Board. The commission isdistributed on the basis of their attendance and contribution at the Board and provided tosenior Management other than at meetings.

The Company pays remuneration by way of commission as variable component to theExecutive Directors. Commission is calculated with reference to the net profits of theCompany in a particular financial year and is determined by the Board of Directors at thefinancial year based on the recommendations of the Nomination and Remuneration Committeeand subject to the overall ceilings stipulated in the Companies Act 2013. Specific amountpayable as commission is based on the performance criteria laid down by the Board whichbroadly takes into account the profits earned by the Company for the year. In addition tosame stock options are also granted to Whole-time Director.

10 The ratio of the remuneration of the highest paid Director to that of theemployees who are not Directors but receive remuneration in excess of the highest paidDirector during the year.

The highest paid Director is the Chairman & Managing Director. None of the employeehas received remuneration in excess of that paid to the Chairman & Managing Directorduring the year.

11. Affirmation that the remuneration is as per the Remuneration Policy of the Company.

It is affirmed that the remuneration is as per the Remuneration Policy for DirectorsKey Managerial Personnel and other employees adopted by the Company.

On behalf of the Board of Director
For PI Industries Ltd.
Sd/-
Place: Gurgaon Salil Singhal
Date: May 24 2016 Chairman & Managing Directors
DIN: 00006629

ANNEXURE - E Details of Shares issued under Employee Stock Option Plan (ESOPs)

The position of the existing scheme is summarized as under-

Particulars Remarks
I. Details of ESOS
1. Date of Shareholder’s Approval January 21 2011
2. Total number of options approved 6262090
3. Vesting Requirements Options shall vest after a Lock-in-period of one year from the date of grant. Option shall vest in four years as per the Company’s ESOP plan.
4. The Pricing formula 10% discount to market price on NSE a day prior to date of grant.
5. Maximum term of Options granted (years) 10 years
6. Source of shares Primary -Fresh equity allotment by Company to the Trust
7. Variation in terms of ESOP scheme Nil

II. Option Movement during the year:

1. No. of options outstanding at the beginning of the year. 2023684
2. Options granted during the year 277126
3. Options forfeited/lapsed during the year 139940
4. Options vested during the year 582364
5. Options exercised during the year 601363
6. Total no. of shares arising as a result of exercise of options 601363
7. Money realized by exercise of options ( Rs /Cr) 5.93
8. Loan Repaid by the trust during the year exercise price received (Rs/Cr) 4.10
9. No. of options outstanding at the end of year 1559507
10. No. of options exercisable at the end of year 228134
III. Weighted average Fair Value of Options granted during the year whose
(a) Exercise price equals market price -
(b) Exercise price is greater than market price -
(c) Exercise price is less than market price Rs 355.10
Weighted average Exercise price of options granted during the year whose
(a) Exercise price equals market price -
(b) Exercise price is greater than market price -
(c) Exercise price is less than market price Rs 613.00
IV. The weighted average market price of options exercised during the year Rs 630.06

V. Employee-wise details of optionsgranted during the financial year 2015-16.

(i) Senior managerial personnel - None

Name of employee Designation No. of Options granted Exercise Price
- - - -

(ii) Employees who were granted during the year options amounting to 5% or more ofthe options granted during the year

Name of employee Designation No. of Options granted Exercise Price( Rs)
Mr. Vijay Kumar Naidu Deputy General Manager - Business Development 36658 613.00
Mr.Shitanshu 29315 613.00
Mr. Vikas Ratra General Manager - Agri HR 25658 613.00
Mr. Praveen Singh Chambial Deputy General Manager - Product Management 14881 613.00
Mr. Sumanta Layak Senior Manager- HR & Administration 14597 613.00

(iii) MethodandAssumptions o estimate the fair value of options granted during theyear: used

The fair value has been calculated using the Black Scholes Option Pricing model. Theassumptions used in model are as follows:-

Variables Weighted Average
1. Risk Free Interest Rate(%) 7.49% to 7.57%
2. Expected Life(in years) 4 to 7 years
3. Expected Volatility (%) 41.39% to 42.31%
4. Dividend Yield (%) 0.64%
5.Price of the underlying share in market at the time option 682.85

Assumptions:

• Stock Price: Closing price on National Stock Exchange on the date of grant hasbeen considered

• Volatility: The historical volatility over the expected life has been consideredto calculate the fair value.

• Risk-free rate of return: The risk-free interest rate being considered for thecalculation is the interest rate

• Exercise Price: Exercise Price of each specific grant has been considered.

• Time to Maturity: Time to Maturity Expected Life of options is the period forwhich the Company expects

• Expected divided yield: Expected dividend yield has been calculated as anaverage of dividend yields for five years.

VI. (i) Method of Caluclating Employee Compensation Cost

The Company has calculated the employeecompensationcost using the intrinsic valuemethod of accounting to account for option issued under the ESOP Scheme.

(ii) Difference Between the Employee Compensation Cost so computed in (i) above and theEmployeeCompensationCost that shall have been recognised if it had used the fair value ofthe Options.

The stock based compensation cost calculated as per the intrinsic value method for thefinancial year 2015-16 is Rs 123.74 lakhs. If the stock based compensation cost wascalculated as per the fair market value method the total cost to be recognized in thefinancial statements for the financial year 2015-16 would beRs 659.20 lakhs.

(iii) The impact of this differ ence on profits and on EPS of the Company is presentedbelow:- Proforma adjusted Net Income and Earnings per Share

Particulars Rs/Lakhs
Net Income as reported 31336.41
Add: Intrinsic Value Compensation Cost 123.74
Less: Fair Value Compensation Cost (659.20)
Adjusted Pro Forma Net Income 30800.95
Earnings per Share : Basic (Rs)
As Reported 22.90
Adjusted Pro forma 22.51
Earnings Per share: Diluted (Rs)
As Reported: 22.72
Adjusted Pro forma 22.33

 

On behalf of the Board of Director
For PI Industries Ltd.
Sd/-
Place: Gurgaon Salil Singhal
Date: May 24 2016 Chairman & Managing Directors
DIN: 00006629

ANNEXURE F

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES

1. A brief outline of the Company’s CSR policy including overview ofprojects or programs proposed to be undertaken and a reference to the web-link to the CSRpolicy and projects or programs.

Your company lays special emphasis on enhancing the quality of life and economicwell-being of communities around PI plant sites and small & marginal farmers over aperiod of time. The Thrust is on vocational training programs agricultural skilldevelopment preventive health care sanitation and hygiene promotion of DSR and farmeconomics community and rural development projects etc.

The CSR Policy has been framed for successful and sustainable implementation of CSRprojects in concurrence with The Companies ame of 3-5 years. frAct2013.AsustainableCSRplanandagendaissetforatime The CSR Policy as approved by Board ofDirectors is available on the Corporate website. Web Link - http://www.piindustries.com/corporate-social-responsibility.html.

2. TheComposition ofthe CSR

PI CSR Committee Members
Mr. Salil Singhal Chairman & Managing Director Chairman of the Committee
Mr. Mayank Singhal Managing Director & CEO Member
Mr. Rajnish Sarna Whole-time Director Member
Mr. Pravin K. Laheri Independent Director Member
Ms. Ramni Nirula Independent Director Member

 

3. Average net profit of the company for last three financial years (Amount in Cr.) Rs 257.15Cr.
4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above) (Amount in Cr.) Rs 5.14 Cr.
5. Details of CSR spent during the financial year.
(a) Total amount spent for the F.Y. Rs 3.87 Cr.
(b) Amount unspent if any; Rs 1.27 Cr.

(c) Manner in which the amount spent during the financial year is detailed below:Kindly refer to the details given in the table on the following page.

6. In case the Company has failed to spend the two per cent oftheaveragenetprofitof the last three financial years or any part thereof the Companyshall provide the reasons for not spending the amount in its Board report.

Your Company has contributed an amountof for carrying out CSR activities. TheFoundation Rs 5.14 cr.toPIFoundation amount of Rs 3.87 cr towards the same during theyear.

Though PI Foundation had earmarked the projects for CSR it was not able to spendentire amount as short listing the implementing agencies through whom various projectswould be routed had taken time. Moreover few projects considered are ongoing and spreadover 2 to 3 years.

7. A responsibility statement of the CSR Committee that the implementation andmonitoring of CSR Policy is in compliance with CSR objectives and Policy of the company.

The implementation and monitoring of CSR Policy is in compliance with CSR objectivesand Policy of the Company.

On behalf of The Board of Directors
For PI Industries Ltd.
Sd/- Sd/-
Mayank Singhal Salil Singhal
Place: Gurgaon Managing Director & CEO Chairman - CSR Committ ee
Date: May 24 2016 DIN: 00006651 DIN: 00006629

The position of the existing scheme is summarized as under-

CSR Project or activity identified Sector in which the project is covered Projects or Programs (1) Local area or other (2) specify the state and district where projects or programs was undertaken Amount outlay (budget) project or programs wise in lacs Amount spent on the projects or programs in lacs (1) Direct Expenditure on projects or programs (2) Overheads Cumulative expenditure up to the reporting period in lacs Amount spent: Direct or through implementing agency
1 Promotion of DSR & Farm Economics Environmental Sustainability & Conservation of Natural Resources • Sustainable Rice Production with Conservation of Natural Resources (PAU Punjab) 62.19 53.07 53.07 Spent through PI Foundation
• Awareness Creation amongst Farmers on Sustainable Rice Production from Transplanted toDirect Seeded Rice (RAU Pusa Bihar)
• Training Farmers on Water Conservation in Rice Production through Change in Method of Cultivation(UAS Raichur Karnataka)
• Water Conservation through Accelerating the Adoption of Direct Seedling of Rice (DSR) Technology in Madhya Pradesh
• Development and Dissemination of Efficient on-Farm Water Conservation and Management Technologies to Farmers (IARI) in Punjab Haryana Uttar Pradesh Chhattisgarh and Bihar
2 Improving Agri Productivity in Cotton Environmental Sustainability & Conservation of Natural Resources • Management of CLCV and White Fly in cotton crop by Community based Approach In Punjab 50.00 13.58 13.58 Spent through PI
3 Agri Skill Development Promoting employment enhancing vocation skills • Industry Orientation Agri Skill Development for Rural Youth in Telangana 23.00 23.00 23.00 Spent through PI Foundation
4 Vocational Training Program on Chemical Plant Operators Promoting employment enhancing vocation skills • PI-DDU Vocational Training Program on Chemical Plant Operators - 3rd 4th & 5 batches 61.84 34.10 34.10 Spent through PI Foundation
5 Swachhata Abhiyan Promoting Preventive Health Care and Sanitation • Construction of school oilets in 11 schools of Bharuch Gujarat 113.50 104.17 104.17 Spent through PI Foundation
• School Sanitation Awareness & Behavioural Change programme In 11 schools of Bharuch Gujarat
6 Rural Development Making available safe drinking water • Purified W ater Supply (RO Water) to Villagers in North Karnataka & Andhra Pradesh 20.00 12.00 12.00 Spent through PI Foundation
7 Community Development Projects at Jambusar & Panoli Plant Locations Livelihood enhancement • Support to Sarod Sarvajanik High School (Renovation of Science Lab & 50 Bench desks) 77.05 81.70 81.70 Spent through PI Foundation
• Support of Library books Science kit Note Books and Sports material in surrounding 5 schools
• Supporting Mobile Education Van-Ankleshwar
• Preventing Healthcare through 3 Mobile Health Units covering 59 villages around Jambusar
? Women Empowerment programs.
8 Promotion of Indian Art & Culture Promotion of National • Promotion of Indian Art & Culture 30.00 29.50 29.50 Spent through PI
Heritage Art & Culture and Deelopment of Traditional Arts & Handicraft • Promotion of "Pichhwai" Art Foundation
9 Educational Scholarships for Doctoral Research Promoting education including special education • Educational Scholarship granted to 5 students 17.25 17.24 17.24 Spent through PI Foundation
10 Training and Capacity Building of CSR Team (5% of Actual CSR Exp) 19.52 18.42 18.42
Total 474.35 386.78 386.78

ANNEXURE - G

Conservation of Energy Technology Absorption to provisionsofSection read with Rule8(3) the Companies 134 ofthe Companies Act 2013 (Accounts) Rules 2014.

A. CONSERVATION OF ENERGY

1. Energy conservation measures taken

Energy conservation and Management continuedto be a key area for the manufacturingunits of the Company. Continuousmonitoring tribution and consumptiontrendswerecarriedoutforeffectiveutilization of energy. dis ofenergygeneration

For the year 2015-16 we have implemented following major energy reduction measures asa part of conservation these include:- ages using ultrasound technologies leak

Audit of airN2 &Instrumentairandsteamsystemsforidentification of

• Audit of insulation in "Refrigeration system" for identification ofHeat Losses.

• Installation of 200 KVA Capacitor bank and LED Lights (48 W capacity) forefficient power consumption

• Installation of Energy meters for identification of energy losses betweengeneration points and user points and constitution of a dedicated energy cell to focus onminimization consumption . ofthegapbetweenenergygenerationand Your Company is committed toimprove energy performance on a continuous basis by looking at new options / innovationsavailable in the fields of electrical and thermal energy.

2. Steps taken for utilization of Alternate sources of Energy

As part of its long term sustainability plan the Company has initiated various ofenergy. Some of the key initiatives implemented by the Company are:

• Replacing 125W HPMV Light with 48 W LED Lights to reduce energy consumption

• Installation of 100 KWP roof top solar power plant

• Use of Flash Steam Recovery System in boiler and VAM machine and Installation ofblow down cooler to recover heat from boiler blow down water

• Testing the feasibility of fuel emulsion technology for firing liquid fuel inthe boiler

• Installation of a new cooling tower for the separation of utility and processrequirement. This will allow lower head pump for utility area and will help to realizeenergy savings on pump running cost.

B. TECHNOLOGY ABSORPTION

1. Efforts made towards technology absorption

Your Company has createdstate-of-the-artR&DCentreandPilotPlantfacilityatUdaipurandhasbeeninvestingto augmentits R&D technological innovations. Working on new age chemistry it has carried outsynthesis and capabilities development of molecules in the fields of Agrochemicals FineChemicals Specialty Chemicals and Photographic chemicals. Continuous improvement of thecommercial production processes have been made possible through technology absorptionmethods which include:-

• Regular training programs including internal technical training across groupstroubleshootingand cost reduction sessions for our scientists chemists &technologists to equip them to cope with new scientific and technical challenges.

• Interactionwith National Laboratories IITs CSIR Institutions and UniversitiesR&D laboratories of knowledge and coordinating withthemfor development of new productsand training of scientists.

2. Benefits derived like product improvementcostreductionproduct developmentor import substitution:

• Development of indigenous technology has led to cost reduction use ofenvironment friendly synthesis routes and conservation of foreign exchange.

• Developmental processes have been initiated at lab scale. This will convert fewbatch processes into continuous processes which will ultimately result into consistency ofthe product under manufacture.

• Training sessions among different groups of R&D have resulted in effectiveand innovative solutions.

• Improvement in manufacturing processes for existing molecules and development ofnew products for exports have led to wider knowledge base and capability enhancement ofthe R & D staff.

• Replacement of hazardous and toxic reagents with less hazardous environmentfriendly substitutes have helped in pollution abatement and odor control. Thus the Companyhas been successful in adapting the national norms and working towards protecting theenvironment along with other industries.

3. Imported Technology

(a) The details of technology imported: The Company has not imported any technologyduring the last three financial years.

(b) The year of import: Not applicable

(c) Whether the technology has been fully absorbed: Not applicable

(d) If not fully absorbed areas where absorption has not taken place and the reasonthereof: Not applicable

4. Expenditure on R&D

(Rs In lacs)
Particulars Current year 2015-16 Previous year 2014-15
a. Capital Expenditure 6034.04 219.30
b. Revenue Expenditure 2117.49 1249.49
c. Total 8151.53 1468.79
d. Total R&D expenditure as percentage of Total Turnover 3.42% 0.67%

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

Details of total foreign exchange used and earned have been provided below:-

(Rs In Cr.)
Particulars Current year 2015-16 Previous year 2014-15
Foreign Exchange Earned 1241.53 1147.99
Outgo of Foreign Exchange 603.98 647.10

 

On behalf of the Board of Director
For PI Industries Ltd.
Sd/-
Place: Gurgaon Salil Singhal
Date: May 24 2016 Chairman & Managing Directors
DIN: 00006629