Your Directors are pleased to present the 72nd Annual Report on the businessand operations of the Company together with the Audited Financial Statements for thefinancial year ended March 31 2019.
1. FINANCIAL HIGHLIGHTS
| || ||(Rs. in Mn) |
|Particulars ||FY 2018-19 ||FY 2017-18 |
|Revenue from Operations ||28409 ||22771* |
|Other Income ||600 ||600 |
|Profit Before Interest Depreciation and Tax ||6331 ||5521 |
|Interest ||59 ||59 |
|Depreciation ||926 ||826 |
|Profit before Tax & ||5346 ||4636 |
|Exceptional items || || |
|Less: Current Tax inclusive of earlier year Tax ||1169 ||995 |
|Deferred Tax Asset/Liability (it should have been deferred tax) ||(100) ||25 |
|Profit after Tax ||4077 ||3666 |
|Other Comprehensive Income ||77 ||(75) |
|Total Comprehensive Income ||4154 ||3591 |
|Balance of retained earning brought forward from previous year ||14908 ||11893 |
|- Profit for the year ||4077 ||3666 |
|- Other Comprehensive ||(1) ||11 |
|Income (OCI) for the year || || |
|Appropriations:- || || |
|Final Dividend on Equity Shares 2017-18 ||345 ||344 |
|Interim Dividend on Equity Shares 2018-19 ||345 ||206 |
|Dividend Distribution Tax on Equity Shares ||142 ||112 |
|Transfer to General Reserve ||0 ||0 |
|Balance Profit / (-) Loss carried forward ||18368 ||14908 |
|Earning Per Share (EPS) (Rs. ) ||29.56 ||26.62 |
|Basic Diluted (Rs.) ||29.54 ||26.55 |
|* net of excise - 316 Mn || || |
2. KEY HIGHLIGHTS
Your Company's Revenue from Operations for the year stood at Rs. 28409 Mn as comparedto Rs.771 Mn (net of excise) last year registering a growth of 25 % on YoY basis.
The Operating Profit for the year was at Rs. 5731 Mn as compared to Rs. 4921 Mn lastyear i.e. an increase of 16.46 % YoY. The Net Profit for the year on stand-alonebasis stood at Rs. 4077 Mn as compared to Rs. 3666 Mn in the previous year i.e. a growthof 11.21 %YoY.
Your Company's Net Profit on a consolidated basis stood at Rs. 4102 Mn during the yearas compared to Rs. 3676 Mn in the previous year a growth of 11.58% YoY.
The Earnings per share (EPS) for the year stood Rs. 29.56at per share a growth of11.04% as compared to Rs. 26.62 per share for the previous year.
Your Company made an addition of Rs. 3757 Mn. in gross fixed assets for expansion ofmanufacturing and & Development capacities.
Your Company also commissioned new MPP plant at Jambusar during February 2019.
3. PERFORMANCE REVIEW
Domestic revenues grew by 16.5% YOY and achieved milestone of Rs. 10000 Mn. In brandsales growth was recorded across the portfolio which was well supported by successful newlaunches. In Dinotefuran growth in co-marketing was achieved with increased brandawareness activities for Osheen. In the herbicide segment our leading brand Nominee Golddespite facing fierce competition from generics expanded its customer base and achievedhighest ever treated acreages. The products launched during FY and newly launched COSKOand FANTOM also contributed to the top line.
The introduction of new innovative products strengthening of existing partnerships& forging of new ones channel expansion and focus on customer connect are some of thekey strategic initiatives expected to drive the growth in coming years.
Your Company Introduced two new products in FY 19 viz. COSKO and FANTOM.These launches have given the opportunity to leverage the channel presence very wellexploit the available market opportunity and gain a better market share from ourstronghold markets. On the other hand your Company was also able to make an entry in themarkets with relatively weak presence.
Your Company's exports grew by 29.4% during the year in line with overall improvementin global sentiment. Your Company is working with innovator partners to introduce novelmolecules globally. The Company continued to develop alternate vendors in domestic marketto reduce its dependency on Chinese raw material suppliers that shall help the Company inthe coming years. Commercialisation of 3 new molecules during the year along with theenhanced utilization of multi-purpose plants at Jambusar SEZ and commissioning of newplant is expected to provide further growth momentum to the exports in the coming years.Your Company also won numerous awards and received much recognition. Your Company'smanufacturing site at Panoli has won
Golden Peacock Environment Management' award for in the thirdtime on accountof its significant field of Environment Management. Besides this awarded ISO27001:2013 Certification from British Standards Institute for implementation ofinformation security based on global standards and frameworks.
For its CSR initiatives your Company's CSR arm PI Foundation won prestigious SKOCHAWARD 2018 for Integrated Community Development. Your Company was also rated by ECOVADISin GOLD Category' for second consecutive year demonstrating Company's qualityin integrating the principles of CSR into their business (Environment Labor/Social Fairbusiness/ Ethics and Supply Chain. PI in top global 1% in labour practices (Safety)amongst pesticides and agrochemical products sector.
4. RESEARCH & DEVELOPMENT (R&D)
During the year under review the Research & Development team successfully carriedout synthesis of 48 new development molecules. Out of these 18 molecules were scaled upsuccessfully for their next stage of development and 6 molecules were transferred to thenext stage. Apart from synthesis and scale up of new products the
Research & Development team also undertook process improvements for 23 projects inorder to identify cost improvement opportunities and then implement 16 such projectimprovements at the plant level. Environment Health and Safety (EHS) considerations weregiven the usual special emphasis in the process development work.
You r Company has state of art R&D set up with house facilities for biologicaltesting. This facility supports various R&D projects under disciplines of cropprotection products. Scientifically it involves molecular design synthesis structuralelucidation purifications scale-ups laboratory testing green house fieldtesting SAR's(structureactivity relationship) knowledge management and patenting. The research assignmentsinvolve global innovator partners.
Your Company's research strategy and implementation are well supported by a strong teamcomprising of more than 250 research scientists having expertise and experience inchemistry analytical techniques biological testing mode of action tox studies IPmanagement and basic / detailed process engineering. During the year R&D undertookdevelopment work on various new projects covering different sectors i.e. Agro Pharma andElectronic chemical applications. You will be further glad to know that your Company hasidentifiedpatentable molecules & processes and has initiated the patenting process.
Your Company continues to pursue cost which R&D team played vital role on processinnovations for several existing products to identify cost improvement opportunities andat the same time maintaining highest standards of Quality Health Safety and Environment(QHSE). The Company's R&D and manufacturing team are constantly working together toreduce environmental load enhance safety and reduce cost.
Your Company continued to focus on managing cash adequate liquidity and efficientlyback up lines of credit. Net Cash from operations for the year stood at Rs. 3848 Mn. YourCompany follows a prudent financial policy and aims at maintaining an optimum financialgearing. The Company's Debt to Equity Ratio was zero as on March 31 2019. namely YourCompany has been credit rated by CRISIL Limited.
The Company's credit rating for long term was reaffirmed to AA/Positive and for shortterm loans rating was reaffirmed at CRISIL A1+. This reflects a very high degreeof safety regarding timely servicing of financial obligations and also a vote ofconfidence reposed in your Company's financials.
During the year the Board of your Company has declared an interim dividend of Rs. 2.50(250%) per equity share of Rs. 1/- each in its Board Meeting held on October 262018. The Directors are pleased to recommend a final dividend of Rs. 1.50 (150%) perequity share of Rs. 1/- each. This will take the Total dividend for the year to Rs. 4/-(400%) per equity share of Rs. 1/- each. If the dividend as recommended above is declaredby the members at the Annual General Meeting the Total outflow towards dividend on EquityShares for the year would be Rs. 552 Mn (dividend distribution tax of Rs. 114 Mn)as compared Rs. 551 to Mn (dividend distribution tax of Rs. 114 Mn) lastyear. The dividend if approved at the ensuing Annual General Meeting will be paid tothose shareholders whose names appear on the register of members of the Company as on therecord date i.e. September 2 2019.
DIVIDEND DISTRIBUTION POLICY green
PI believes in maintaining a fair balance between cash retention and dividenddistribution. Cash retention is required to finance acquisitions and future growth andalso as a means to meet any unforeseen contingency.
PI Dividend Policy specifies the financial parameters that will be considered whendeclaring dividends internal and external factors that would be considered for declaringdividends. The Policy has been put up on the website of the Company athttp://www.piindustries.com/Media/Documents/ Dividend%20Policy%20(f).pdf
7. SUBSIDIARY ASSOCIATES & JOINT VENTURES
As on March 31 2019 the Company had three (3) Wholly-owned Subsidiary and two (2)Joint Venture Companies. In accordance with Section 129(3) of the Companies Act 2013 theCompany has prepared a consolidated financial statement of the Company and all itssubsidiary Companies.
The key highlights of these subsidiary and associate Companies are as under:
SUBSIDIARY COMPANIES - PI Life Science Research Ltd.
During the year the Company posted a net profit of Rs..06 Mn earned on account ofvarious R&D activities for developing new products.
- PI Japan Co. Ltd.
The Company posted a net profit of JPY 3.15 Mn during the year ended March 31 2019.Due to the size of operations and local laws the annual accounts of this Company are notrequired to be audited. The same have been certified by the Management of the Company.
- PILL Finance and Investments Ltd.
The Company posted a net profit of Rs. 1.21 Mn during the year ended March 31 2019.
- Solinnos Agro Sciences Pvt. Ltd
Your Company holds 49% equity in Solinnos Agro Sciences Pvt. Ltd through its subsidiaryCompany namely PI Life Science Research Limited and hence an associate Company. TheCompany posted a net profit ofRs. 0.62 Mn during the year ended March 31 2019.
- PI Kumai Pvt. Ltd
Your Company holds 50% equity in PI Kumai Pvt. Ltd through its subsidiary Companynamely PI Life Science Research Ltd and hence an associate Company. The Company posted anet profit of Rs. 0.29 Mn during the year ended March 31 2019.
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014a statement containing salient features of the financial statementsof the Subsidiary and Associate Companies is given in form AOC-1. Refer AnnexureA' to this Report. Your Company does not have any material listed subsidiaryCompany. In accordance with the provisions of Section 136 of the Companies Act 2013 theAnnual Report of the Company containing the Standalone and Consolidated FinancialStatements along with the Audited Annual Accounts of each Subsidiary Company have beenplaced on the website of the Company i.e. www.piindustries.com.
8. RISK MANAGEMENT POLICY AND INTERNAL CONTROLS
PI Industries' Risk Management structure spans across different levels and the Companycontinuously identifies classifies and formulates mitigation measures. During the yearRisk Management Committee was formed comprising of 5 members including 3 Directorsincluding one Independent Director. Major risks identified by the business and functionsare systematically addressed through mitigating actions on continuing Related PartyTransactions basis. Risk assessment is conducted periodically and the Company has amechanism to identify assess mitigate and monitor various risks to key businessobjectives. The Internal Audit Function regularly reviews various risks and places thereport before the Audit Committee of your Company from time to time.
The Board has adopted policies and procedures for ensuring orderly and efficientconduct of its business including adherence to the Company's policies safeguarding ofits assets prevention and detection of frauds and errors accuracy and completeness ofthe accounting records and timely preparation of reliable financial disclosures.
Internal Control Systems are commensurate with the nature and size of Company'sbusiness and in view of the complexity of its business operations these are designed tomeet the challenges. The control system comprises of continuous audit and compliance byin-house internal audit team supplemented by internal audit checks by M/s KPMG India LLP.Internal Auditors of the Company. M/s PKF Sridhar & Santhanam have been engaged as theDepot uditors to perform the internal audit function assess the internal controls andstatutory compliances in various areas and also provide suggestions for improvement.
The Internal Auditors independently evaluate the adequacy of internal controls andconcurrently audit the financial transactions and review the various business processes.Internal Audit reports are periodically placed before the Audit Committee of the Board.Independence of internal auditors is ensured through direct reporting to Audit Committee.
9. INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
The Company has in place an adequate Internal Financial Controls with reference tofinancial statements. The Company has identified and documented all key internal financialcontrols as part of its Internal Financial Control reporting framework. The Company haslaid down well defined policies and procedures for all critical processes across Company'splant offices wherein financial transactions are undertaken. The policies and procedurescover the key risks and controls in all the processes identified to respective processowner. In addition the Company has a well-defined financial delegation of authority whichensures approval of financial transaction by appropriate personnel. The Company uses SAPERP to process financial transactions and maintain its books of accounts to ensure itsadequacy integrity and reliability.
The financial controls are evaluated for operating effectiveness through Management'songoing monitoring and review process and independently by Internal Auditors. In our viewthe Internal Financial Controls over Financial Reporting are adequate and operatingeffectively as on March 31 2019.
10. RELATED PARTY TRANSACTIONS
All Related Party Transactions entered during the year were in the ordinary course ofbusiness and on arms length basis. Most of the related party transactions were undertakenby the Company with its subsidiary Companies engaged in business development activities.There were no made by materially significant the Company during the year that would haverequired shareholder approval under the Listing Regulations/ Companies Act 2013.
Prior omnibus approval of Audit Committee is obtained for the transactions which areforeseen and repetitive in nature. A statement of all Related Party Transactions ispresented before the Audit Committee for its review on a quarterly basis specifying thenature value and terms and conditions of the transactions.
The Policy on Materiality of and Dealing with Related Party Transactions as approved bythe Board is uploaded on the Company's website and can be accessedhttp://www.piindustries.com/Media/Documents/Related%20Party%20Transactions%20Policy(r).pdf Your Company does not have any contracts orarrangements with its related parties falling under Section 188(1) of the Companies Act2013. Hence the details of such contracts or arrangements with its related parties arenot disclosed in Form AOC-2 as prescribed under the Companies Act 2013 and the Rulesframed thereunder. Your Directors draw attention of the Shareholders to Note No. 35 of thestandalone financial statements which set out related party disclosures.
Statutory Auditors and Auditor's Report
The shareholders of the Company at 70th AGM held on September 06 2017 hadappointed M/s. Price Waterhouse Chartered Accountants LLP (ICAI Registration No-012754N/N500016) as the Statutory Auditors of the Company for an initial term of 5 years andaccordingly they hold their office till the conclusion of Annual General Meeting to beheld in 2022.
The Auditors' Report is unmodified i.e. it does not contain any qualificationreservation or adverse remark or disclaimer.
As per the requirements of the Section 148 of the Act read with the Companies (CostRecords and Audit) Rules 2014 as amended from time to time your Company is required tomaintain cost records and accordingly such accounts are made and records have beenmaintained relating to Insecticides (Technical grade and formulations) every year.
The Board of Directors on the recommendation Committee has appointed M/s K.G. Goyal& Co. Cost Accountants Jaipur as Cost Auditors to audit the cost accounts of theCompany for the financial year 2019-20.
As required under the Act a resolution seeking member's approval for the remunerationpayable to the Cost Auditor forms part of the Notice convening the Annual General Meetingfor their ratification.
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 2019. The Secretarial AuditReport for the financial year ended March 31 2019 has been obtained and does not containany qualification which requires any comments from the Board. The Secretarial AuditReport for financial year ended March 31 2019 is annexed to this report as AnnexureB'.
In terms of SEBI circular no. CIR/CFD/CMD1/27/2019 dated February 08 2019 yourCompany has also obtained Secretarial Audit Report for the financial year ended March 312019 issued by Mr. R.S. Bhatia Practicing Company Secretary and the same has beensubmitted with SEBI in accordance with aforesaid circular.
12. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The details of loans guarantees and investments covered the provisions of CompaniesAct 2013 are mentioned in Note No. 7(c) forming part of the Notes to the financialstatements.
Your Company has not accepted any public deposits during the financial year 2018-19 andas such no amount of principal or interest was outstanding as on March 31 2019.
14. TRANSFER OF UNCLAIMED DIVIDEND AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND
During the year company had transferred an amount of Rs. 357530/- towardsunclaimed or unpaid dividend pending for more than seven years. Pursuant to the provisionsof Investor Education and Protection Fund (Uploading of information regarding unpaid andunclaimed amounts lying with Companies) Rules 2012 the Company has uploaded the detailsof unpaid and unclaimed amounts lying with the Company as on August 06 2018 (date of lastAnnual General Meeting) on the Company's website and on the website of the Ministry ofCorporate Affairs. The details can be viewed at company's website at followinglink: http://www.piindustries.com/sites/default/files/Copy%20of%20Unpaid%20Div%2015%209%2015%20all.pdf In accordance with the provisions of theCompanies Act 2013 read with IEPF Authority (Accounting Audit Transfer and Refund)Rules 2016 the Company has transferred 66010 equity shares pertaining to shareholdersin respect of which dividend was unclaimed for seven consecutive years to IEPF demataccount through NSDL Audit corporate action pursuant to the provisions as contained in Sec124(6) of the Companies Act 2013 and rules made thereunder.
15. BOARD AND COMMITTEES
a) Board of Directors
Your Company is managed and controlled by a Board comprising an optimum blend ofExecutive and Non-Executive Professional Directors. The Chairman of the Board is aNon-Executive Independent Director. As on March 31 2019 the Board of Directors comprisedof Eight (8) Directors consisting of Managing Director & CEOWhole-time Director andsix (6) Non-executive Directors out of which five (5) are Independent Directors includingone Woman Director. The composition of the Board is in conformity with Regulation 17 ofthe SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 and therelevant provisions of the Companies Act 2013. All the Directors possess requisitequalifications and experience in general corporate management operations technicalexpertise strategy governance finance banking and other allied fields which enablethem to contribute effectively to the Company in their capacity as Directors of theCompany.
Declaration from all Independent Directors has been received confirming that they meetthe criteria of independence as prescribed both under the Companies Act 2013 and theListing Regulations 2015. under Mr. Ravi Narain ceases to be the Non-ExecutiveIndependent Director of the Company w.e.f. 1st May 2019 consequent upon theorder passed by SEBI in the matter of National Stock Exchange of India Ltd. on April 302019. Board places on record its appreciation for the services rendered by Mr. Ravi Narainduring his association with the Board of the Company.
In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Rajnish Sarna shall retire by rotation at the forthcomingAnnual General Meeting and being eligible offers himself for re-appointment. The Boardrecommends his re-appointment for the approval of the shareholders at the ensuing AnnualGeneral Meeting.
b) Evaluation of the Board's Performance
In compliance with the provisions of Companies Act 2013 and Regulation 17 (10) of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board hascarried out an evaluation of its own performance Committees and performance of individualDirectors during the year under review. The evaluation framework for assessing theperformance of Directors comprised of criteria like quality of contribution to the Boarddeliberations strategic perspective or inputs regarding future growth of Company and itsperformance attendance of Board Meetings and Committee Meetings and commitment toshareholder and other stakeholder interests. The evaluation involves Self-Evaluation bythe Board Members and subsequent assessment by the Board. A member of the Board does notparticipate in the discussion of his/her evaluation.
c) Number of Board Meetings conducted during the year under review
A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year Board of Directors met four (4) times. The details of the Board meetings andattendance of the Directors are provided in the Corporate Governance Report.
d) Composition of Committees Audit Committee
As on March 31 2019 Audit Committee comprises of Mr. Narayan K. Seshadri as theChairman Mr. Rajnish Sarna Ms. Ramni Nirula and Mr. Ravi Narain as the members. Furtherdetails on the Audit Committee reference meetings held during the year are givenalongwith other committee details as provided in the Corporate Governance Report.
e) Recommendations of Audit Committee
There have been no instances during the year when recommendations of the AuditCommittee were not accepted by the Board. Details on other committees including theircomposition terms of reference are given in the Corporate Governance Report.
f) 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 preparation of the annualaccounts for the year ended March 31 2019 the applicable accounting standards had beenfollowed; (b) the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company as at March 31 2019 andof the profit of the Company for that period;
(c) the Directors had taken proper and sufficientcare 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 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 theCompany and that such internal financial controls are adequate and were operatingeffectively ensuring the orderly and efficient conduct of its business including adherenceto Company's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information and (f) the Directors had devised propersystems to ensure compliance with the provisions of all applicable laws and that suchsystems were adequate and operating effectively.
16. CHANGES IN KEY MANAGERIAL PERSONNEL
There has been no change in any Key Managerial Personnel of the Company during the yearended March 31 2019.
17. ANNUAL RETURN
Pursuant to Sec 92(3) and Section 134 (3) of the Companies Act 2013 read with Rule 12of the Companies (Management and Administration) Rules 2014 the extract of Annual Returnis available on Company's website and can be accessed at:https://www.piindustries.com/investor-relations/Financials/ annual-reports
a) Remuneration policy of the Company
The Remuneration policy of your Company comprising the appointment and remuneration ofthe Directors Key Managerial Personnel and Senior Executives of the Company including thecriteria for determining qualifications positive attributes independence of a Directorand other related matters have been provided in the Corporate Governance Report whichforms a part of this report.
b) Human Resources and Trade Relations
During the year under review your Company augmented its workforce by welcoming 669 newemployees across all businesses functions and locations. With a view to enhancingcapability and making the organisation future ready special emphasis was placed onupgrading the level and quality of learning and development initiatives. The LearningManagement Solution launched during the year enables employees to own and take charge oftheir learning. Participation levels and feedback helps management calibrate and makeadjustments to the curricula and its deployment. In addition embracing technology yourCompany added 104 e-learning courses to the LMS platform providing employees a richcornucopia of programmes to choose from tailored to their needs. These were supplementedby structured management development and leadership development programmes.
With a view to systematically identifying and developing the next generation ofleaders a structured Talent Review was conducted for senior management personnel acrossbusinesses. The review focused on the strengths development areas and potential of thetarget personnel and identified action plans for each of them. Inputs from this reviewwere used in the succession planning process. Demonstrating that "we care" yourCompany launched a holistic wellness initiative for employees and their families focusingon their physical mental and emotional well-being. Programmes were held throughout theyear in accordance with a pre-published wellness calendar. The stepathlon competitionlaunched during the year saw enthusiastic participation. This was supplemented by healthcamps yoga sessions and fitness programs all of which were well received.
Communication is a key element in employee engagement and employee town halls were heldto cascade the Company's vision strategy and performance. Other employee friendlymeasures launched during the year included:
- Advancing pay day from the 5th to the 1st working day of themonth by recasting the payroll processing schedule.
- Restructuring sales incentives to better align it with industry practice; ourfinancial results testify to the success of this initiative.
- Advancing the dates of completion and appraisals and increments.
Technology is and will be a key game-changer and your Company is an industry leader inthe use of technology to drive efficiency and performance.
In the field of HR the year saw the continued implementation of HR solutions throughSuccess Factor and improvements to the modules implemented in earlier years. Not alltechnology initiatives need be big and glamorous. By the simple expedient of introducingelectronic increment letters not only did we ensure quicker transmission to employees butalso contributed to the environment by saving copious quantities of paper. To provide ourvisitors a richer visitor experience at our offices and plants a new tech-enabled visitormanagement system was launched during the year.
While much has been done we are acutely conscious of the fact that much remains to bedone to make PI a leading employer. We are committed to intensifying our efforts in thecoming years to achieve this objective.
During 2018-19 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 2331 as on March 31 2019.
c) Policy on Prevention Prohibition and Redressal of Sexual Harassment at Workplace
Your Company has a zero tolerance for any abuse against Women at Workplace. Policy onProhibition Prevention and Redressal of Sexual Harassment of Women at Workplace andmatters connected therewith or incidental thereto covering all the aspects as requiredunder the "The Sexual Harassment of Women at Workplace (Prohibition Prevention andRedressal) Act 2013". The Company has constituted Internal Complaints Committee(ICC) known as Prevention of Sexual Harassment (POSH) Committee to enquire in tocomplaints of Sexual Harassment and recommend appropriate action. The Company has notreceived any complaint of sexual harassment during the financial year 2018-19.
d) Particulars of Employees and related disclosures
The information required under Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 forms part of this Report and annexed asAnnexure C'. However as perfirst proviso to Section 136(1) of the Act and second proviso of Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Reportand Financial Statements are being sent to the Members of the Company excluding thestatement of particulars of employees under Rule 5(2). However they are available forinspection during business hours upto the date of the next Annual General Meeting at theregistered office of the Company. Any member interested in obtaining a copy of the saidstatement may write to the Company Secretary at the Registered Office of the Company.
Your Directors place on record their appreciation of the valuable contribution made bythe employees of your Company.
e) Employee Stock Option Plan / Scheme
Your Company discontinued in the year 2017-18 grant of stock options under PII-ESOPScheme 2010 as per the recommendations of Nomination & Remuneration Committee of theBoard. The stock options already granted would vest as per the conditions contained in thegrant letter. As per the ESOP scheme stock options shall vest after a lock in period ofone year from the date of grant. The stock options vest in graded manner over a vestingperiod of four (4) years. The exercise price of stock options granted have been arrived bygiving discount to the closing market price of the equity share on National Stock ExchangeIndia Limited one day prior to the date of grant of option. Voting rights on the equityshares issued to employees under the ESOP Scheme are either exercised by them or throughtheir appointed proxy. No employee has been issued stock options equal to or exceeding 1%of the issued capital of the Company at the time of grant. Details of options as requiredunder SEBI regulations is given in Annexure D'.
19. 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/Media/Documents/Whistle%20Blower%20Policy(r).pdf
The Policy provides for adequate safeguards against victimization of employees whoavail of the mechanism and also provides for direct access to the Chairman of the AuditCommittee. It is affirmed that no personnel of the Company has been denied access to theAudit Committee.
20. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in AnnexureE' attached to this report.
21. CORPORATE SOCIAL RESPONSIBILITY ("CSR") AND RELATED MATTERS
In accordance with the requirements of Section 135 of the Companies Act 2013 yourCompany has a CSR Committee comprising four members with Mr. Pravin K. Laheri as ChairmanMr. Mayank Singhal Mr. Rajnish Sarna and Ms. Ramni Nirula as Members. Your Company alsohas formulated a Corporate Social Responsibility Policy (CSR Policy) which is available onthe website of the Company at http://www.piindustries.com/sustainability/CSR/CSR-PolicyYou r Company carried out the CSR activities Foundation a Trust set up by PI IndustriesLtd During the year PI Foundation undertook several CSR initiatives under the followingfew categories:
- Education and Talent Nurturing
- Hygiene & Sanitation
- Livelihood Enhancement
- Sustainable Agriculture
- Skill Development
- Employee Engagement through CSR
During the financial year 2018-19 the Company has contributed an amount of Rs. 92.9Mn. to PI Foundation aggregating to 2% of its average net profits for preceding 3financial years. The PI Foundation has spent an amount of Rs. 98.54 Mn during thefinancial year 2018-19.
The details of CSR activities undertaken by the Company are highlighted in the reportprovided under the Companies (Corporate Social Responsibility Policy) Rules 2014 in AnnexureF' which is attached to this report.
22. 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) Regulations2015 forms part of the report. AnnexureG'.
23. MANAGEMENT DISCUSSION AND ANALYSIS
A detailed report on the Management Discussion and Analysis is provided separatelyforms part of the Annual Report.
24. BUSINESS RESPONSIBILITY REPORT
SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 requires top500 listed Companies by Market capitalisation to provide Business Responsibility Report intheir Annual Report.
Your Company falls under the top 500 Listed Companies by market capitalisation andaccordingly a Business Responsibility Report describing the initiatives taken by theCompany from an environmental social and governance perspective forms part of thisReport.
25. CHANGES IN SHARE CAPITAL
During the year your Company had issued 123333 Equity Shares of Re. 1/- each whichwere allotted to PII ESOP Trust (Trust) set up to administer PII Employee Stock OptionPlan-2010. The Trust allocates these shares to the employees of the Company and itssubsidiaries upon exercise of stock options from time to time under the aforesaid Scheme.As a result of this allotment the paid-up equity share capital PI of your Companyincreased to Rs. 13.80 cr.(comprising of 138030651 Equity Shares of Rs. 1/- each as onMarch 31 2019) from Rs. 13.79 cr. (comprising of 137907318 Equity Shares of Rs. 1/-each as on March 31 2018).
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year underreview:- 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 Company underany 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 anyremuneration or commission from any of its subsidiaries were passed by d) the Nosignificant
Regulators or Courts or Tribunals which impact the going concern status and Company'soperations in future.
Furt her there have been no material changes commitments if any affecting thefinancial position of the Company which have occurred between the end of the financialyear of the Company to which the financial statements are related and the date of thereport.
Your Directors wish to express their grateful appreciation for the valuable support andco-operation received from bankers business associates lenders financial institutionsshareholders various 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 alongwith its joint venture partners for the support andconfidence reposed by them in the organization and looks forward to the continuance ofthis supportive relationship in the future.
Your Directors proudly acknowledge the contribution and hard work of the employees ofthe Company and its and subsidiaries at all levels who through their competence hardwork solidarity and commitment have enabled the Company to achieve consistent growth.
| ||On behalf of the Board of Director |
| ||For PI Industries Ltd. |
| ||Sd/- |
| ||Narayan K. Seshadri |
|Place: Gurugram ||Chairman |
|Date: May 17 2019 ||DIN: 00053563 |