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Directors Report of PI Industries Ltd.

Mar 31, 2015

To The Members of PI Industries Limited

The Directors are pleased to present the Annual report of the company together with the Audited Accounts for the year ended March 31, 2015:

1. Financial Highlights

(Rs. in Crores)

Particulars FY 2014-15 FY 2013-14

Gross Sales & Other Operating Income 2,188.78 1,846.64

Excise Duty 92.88 85.70

Discount 156.25 166.02

Net Sales 1,939.65 1,594.92

Other Income 41.52 15.61

Profit before Interest, Depreciation and Tax 411.49 301.20

Interest 9.73 11.82

Depreciation 49.16 31.37

Profit before Tax & and Exceptional items 352.60 258.01

Current Tax inclusive of earlier year Tax 114.63 78.83

Deferred Tax Asset/Liability (5.28) (4.56)

Profit after Tax 243.25 183.74

Balance of profit brought forward from previous year 413.44 280.06

Appropriations

Interim Dividend on Equity Shares 16.39 13.61

Dividend of Previous Years - 0.07

Income Tax on Interim Dividend 3.83* 2.39

Transfer to General Reserve 24.33 18.37

Depreciation of NIL assets 2.76 -

Proposed Final Dividend on Equity Shares 17.76 13.61

Income Tax on Final Dividend proposed on Equity shares 3.63 2.31

Balance Profit / (-) Loss carried forward 587.99 413.44

*Includes dividend tax paid for earlier year

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements are related and the date of the report.

2. KEY HIGHLIGHTS

The Net Sales for the year grew to Rs.1,939.65 crore from Rs.1,594.92 crore last year i.e., a growth of 21.61% YoY.

The Operating Profit for the year grew to Rs369.97 crore from Rs285.59 crore last year i.e., an increase of 29.55% YoY. The Net Profit for the year on stand-alone basis grew to Rs243.25 crore from Rs183.74 crore in the previous year i.e. an increase 32.39% YoY.

EBIDTA margin improved 117 basis points to 19.07% in 2014- 15 over 2013-14 and PAT margin strengthened 102 basis points to 12.54% in 2014-15 over 2013-14.

The Company''s Net Profit on a consolidated basis increased to Rs.245.89 crore during the year as compared to Rs.188.00 crore in the previous year, a growth of 30.79% YoY.

The Earnings per share (EPS) for the year stood at Rs.17.84 per share an increase of 31.95% compared to Rs.13.52 per share for the previous year.

The Company introduced two new products during the year under review – KEEFUN, a novel insecticide with broad spectrum focus under exclusive in-licensing agreement and BUNKER, a broad spectrum herbicide. The Company commercialized two new molecules for custom synthesis exports, which are expected to gain traction over the next few years.

The Company signed three new agreements with their patent holders in the insecticide/ herbicide / fungicide segments to evaluate their potential in the domestic market. The Company invested Rs.168.49 Cr. in addition of fixed assets for expansion of manufacturing and R&D capacities.

3. PERFORMANCE REVIEW

For India as a whole, the rainfall for the South West (SW) monsoon season (June-September) was 88% of its long period average (LPA). Delayed arrival of SW monsoon in June and July followed by excess rains in August and September affected the key crops of kharif such as rice, cotton, pulses and oilseeds. The unseasonal rains in rabi heavily impacted fields crops mainly wheat and horticultural crops in the northern and central parts of the Country.

As compared to last year''s production of 265.57 million tonnes, production of food-grains in 2014 is lower by 8.5 million tonnes. This decline is on account of lower production of rice, coarse cereals and pulses due to erratic rainfall conditions during the monsoon season 2014. Despite deficiency of 12% in the monsoon rainfall during the year, the loss in production was restricted to just around 3% over the previous year and exceeded the average production during the last five years by 8.15 million tonnes.

Increasing costs of production due to increased input costs (fertilizers, manpower, fuel etc) and inability to realize MSPs in most of the cases affected the crop economics for farmers. Factors such as subsidy withdrawal on fertilizers, unfavorable rains for crops such as cotton, pulses and soybean negatively impacted the farmers'' investment in plant protection chemicals impacting the agchem industry.

Even in a challenging year, your company''s Agri-Input Business once again outperformed the industry growth by growing at 19% YoY. This growth was mainly on account of increased contribution from innovation based products, expansion of the distribution channel network, volume expansion of some of the key existing products and inclusion of some new brands to give complete crop solutions in key focused crops.

In the tough year of agribusiness, new innovative products launched by your Company again proved to be the growth drivers further strengthening the Company''s position in industry''s leading crop ''rice''. We could successfully expand the flagship brand ''Nominee Gold'' in some of the virgin markets for rice herbicides. In these new markets, Nominee Gold is expected to be a key enabler for rice productivity enhancement for farmers and business driver for PI in the coming years. Our new insecticide ''OSHEEN'' has now been accepted very well to manage the Brown Plant Hopper (BPH) in rice crop.

INTRODUCTION OF NEW PRODUCTS

In the review year your company has launched ''KEEFUN'', a unique insecticide innovated in Japan and developed and marketed by PI in India under the in-licensing model of business. KEEFUN is a broad spectrum insecticide initially launched on cabbage and okra. In the coming years, your Company will expand the label of KEEFUN to other crops for the management of various insects, pests and some fungal diseases which are difficult to manage. The inclusion of KEEFUN in our portfolio will help strengthen our position in horticultural crop and cotton.

Your Company is committed to create and further strengthen its brands through sustained campaigns. In this line, we launched the new pack and new image of our specialty nutrition product ''BIOVITA''. The new avtaar of Biovita has been very well received by all stakeholders and has helped achieve growth.

As a part of its strategy to provide crop solutions, your Company also introduced "Super Spreader" a Tri Siloxane Alcoxylate (TSA) adjuvant in sourced under strategic partnership with US based company having leadership position in the business. Super Spreader will complement the application of various agrichem products of PI and also increase their benefits to farmers.

Building strong pipeline has been a key pre-requisite to ensure sustained growth. Your company has been working very closely with the global innovator companies to evaluate the fitment of their products for Indian markets. In the review year, your company has signed agreements with innovator companies to evaluate ~10 new products; some of them have been identified as potential candidate for further evaluation and development.

In custom synthesis exports, your Company successfully commercialised two new molecules. Based on the product mix planned for production during H2 FY15, major product deliveries happened during this period. The resultant performance was due to improved capacity planning leading to better asset utilization, yield improvements through process improvements, debottlenecking leading to time cycle reductions and high plant uptime. The construction of two new multi-product plants at Jambusar is on track and both the plants are expected to be operational in the 2nd half of FY 2016 which will support further growth of custom synthesis exports.

This was also the year wherein your Company has moved to the next level in the Operations Excellence journey it started two years ago. Your Company has also decided to have long-term strategic view on utilities adequacy, critical spares management and engineering management based predictive maintenance. Predictive maintenance is an evolved science which goes beyond the purview of preventive maintenance concepts. Your Company''s continuous efforts to improve the asset lifetime, right usage of the assets has led to the idea to embrace the predictive and autonomous maintenance concept.

RESEARCH & DEVELOPMENT

During the year under review, the Research & Development team successfully carried out synthesis of several new molecules. In the custom synthesis area, eight new molecules progressed to the next stage and two molecules were commercialized during the year.

Apart from synthesis and scale up of new molecules, the Research & Development team also worked on process improvements projects for ten existing products to identify cost improvement opportunities and then implement these improvements at the plant level. Environment, Health and Safety (EHS) considerations were given the usual special emphasis in the process development work.

During the year, your Company has also initiated expansion of R&D set up and in the first phase of expansion, a two-story building is being constructed within the existing campus at Udaisagar Road, Udaipur (Rajasthan) to carry out increasing R&D projects under custom synthesis, library synthesis and other joint research assignments from its global innovator partners.

Finance

Your Company continued to focus on managing cash efficiently and ensured that it had adequate liquidity and back up lines of credit. Cash from operations for the year stood at H180.65 crores. Your company follows a prudent financial policy and aims at maintaining an optimum financial gearing. The Company''s Debt to Equity Ratio improved to 0.09 as on March 31, 2015 against 0.13 as on March 31, 2014 owing to increase in net worth coupled with significant reduction in long term borrowings.

Your Company has been credit rated by CRISIL Limited for bank facilities. The Company''s credit rating was reaffirmed to ''CRISIL AA-/Stable/CRISIL A1 ''. This reflects a very high degree of safety regarding timely servicing of financial obligations and also a vote of confidence reposed in your Company''s management.

4. DIVIDEND

The Board of Directors recommended a final dividend of Rs.1.30 per Equity Share of the face value of Rs.1 each for the year ended March 31, 2015, amounting to Rs.17.76 crore. This is in addition to the interim dividend of Rs.1.20 per equity share for 2014-15, paid in November, 2014 amounting to Rs.16.39 crore. The total dividend per equity share for year ended March 31, 2015 is Rs.2.50 and total dividend payout is Rs.34.15 crore (net of tax).

Subject to the approval of shareholders at the ensuing Annual General Meeting, the final dividend will be paid to those shareholders whose name appear on the register of members of the Company as on September 09, 2015.

5. SUBSIDIARY COMPANIES

The Company has three Wholly-owned Subsidiary Companies as on March 31, 2015. The members may refer to their Financial Statements forming part of the Annual Report as required under the provisions of Sec 129(3) of the Companies Act, 2013. The key highlights of these subsidiary companies are as under:

(i) PI Life Science Research Ltd. (PILSR)

During the year, the Company posted a profit of Rs.235.72 lacs, earned on account of various R&D activities for developing new products.

(ii) PI Japan Company Ltd.

The Company posted a net profit of JPY 18.35 lacs during the year. Due to the size of operations and local laws, the annual accounts of this Company are not required to be audited. The same have been certified by the Management of the Company.

(iii) PILL Finance and Investments Ltd. (PILL-F)

The Company posted a profit of Rs.16.78 lacs during the year.

A statement containing salient features of the financial statements of the subsidiary companies in form AOC-1 is also included in the Consolidated Financial Statements forming part of the Annual Report.

The Board has also formulated Policy for determining the "Material Subsidiaries" as per the recommendation of Audit Committee. The same has been placed on the website of the company on the following weblink.

http://www.piindustries.com/sites/default/files/Policy%20%20 Material%20Subsidiaries.pdf

Further, in accordance with the third provision of Sec 136 (1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company www.piindustries.com. Further, as per fourth provision to the said section, audited annual accounts of each of the subsidiary companies have also been placed on the website of the Company.

6. APPROVAL OF THE SCHEME OF AMALGAMATION

Your Directors are pleased to inform you that Hon''ble High Court of Jodhpur vide its formal order dated March 27, 2015 approved the Scheme of Amalgamation entailing merger of Parteek Finance & Investment Company Ltd with PI Industries Ltd. The appointed date for aforesaid merger is April 01, 2014 and effective date is March 30, 2015 i.e. date of filing the certified copy of the orders with ROC, Jaipur and ROC, Delhi. Pursuant to the Scheme of Amalgamation, 7,38,51,390 equity shares of Re. 1/- were issued to the shareholders of erstwhile Parteek Finance & Investment Company Limited and cross holding representing 7,38,51,390 equity shares of Re. 1/- each held by Parteek Finance & Investment Company Ltd was cancelled. It may further be noted that there has been no change in the paid up equity share capital of the Company and the promoter holding also remains same pursuant to this merger. The Company has also received necessary approvals from BSE Ltd. and National Stock Exchange of India Ltd. with respect to listing of 7,38,51,390 equity shares issued to shareholders of Parteek Finance & Investment Company Ltd. in terms of the approved Scheme.

7. RISK MANAGEMENT POLICY AND INTERNAL CONTROLS

The Company has in place a mechanism to identify, assess, monitor and mitigate various assessed risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on continuing basis. These are discussed at the meeting of the Audit Committee and the Board of Directors of the Company.

The Company''s Internal Control Systems are commensurate with the nature of its business and the size and complexity of its operations. It comprises audit and compliance by in-house internal audit team supplemented by internal audit checks by M/s Grant Thornton LLP., Internal Auditors of the Company.

The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the financial transactions and review various business processes. Independence of the Internal Auditors and therefore compliance is ensured through direct reporting of internal audit division and Internal Auditors to the Audit Committee.

8. MANAGEMENT DISCUSSION AND ANALYSIS

A detailed report on the Management Discussion and Analysis is provided separately in this Annual Report.

9. RELATED PARTY TRANSACTIONS

All the related party transactions are entered on an arm''s length basis and are in compliance with the applicable provisions of the Act and the Listing Agreement. There are no materially significant related party transactions made by the company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the company at large.

All Related Party Transactions are presented to the Audit committee. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

The Related Party Transactions Policy as approved by Board on recommendation of the Audit Committee is uploaded on the company''s website at the following weblink:

http://www.piindustries.com/sites/default/files/RPT%20Policy PI.pdf

The Company does not have any contracts or arrangements with its related parties under Section 188(1) of the Companies Act, 2013, which are not on arms'' length basis or material in nature. Hence the details of such contracts or arrangements with its related parties are not disclosed in Form AOC-2 as prescribed under the Companies Act, 2013 and the rules framed thereunder. Your Directors draw attention of the Shareholders to Note no. 38 of the financial statement which set out related party disclosures.

10. AUDITORS

statutory Auditors and Auditors report The Statutory Auditors of the Company, M/s S.S. Kothari Mehta & Co., Chartered Accountants, New Delhi, hold office till the conclusion of the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re- appointment. The Company has received their written consent and certificate that they meet the criteria provided under Section 141 of the Companies Act, 2013 and that the appointment, if made, shall be in accordance with the applicable provisions of the Companies Act, 2013 and rules framed there under. The Audit Committee and the Board of Directors recommends the reappointment of M/s S.S. Kothari Mehta & Co., Chartered Accountants, as the Auditors of the Company in relation to the financial year 2015-16 till the conclusion of the next Annual General Meeting. The reappointment proposed is within the time frame for transition under the third provision to sub- section (2) of Sec 139 of the Companies Act, 2013.

Auditor''s Report does not contain any qualification(s), hence same does not call for any explanation.

COST AUDITORS

Pursuant to the directives issued by the Central Government, an audit of the cost records relating to Insecticides (Technical grade and formulations) manufactured by the Company is required to be conducted by an auditor with the requisite qualifications as prescribed under Section 148 of the Companies Act, 2013.

Your Board has appointed M/s K.G. Goyal & Co., Cost Accountants, Jaipur, as Cost Auditors based on the recommendation of the Audit Committee for the conduct of the audit of cost records of Insecticides (Technical grade and formulations) for the year ending March 31, 2016.

Pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Rules made thereunder, Members are requested to consider the ratification of the remuneration payable to M/s K.G. Goyal & Co., Cost Accountants.

SECRETARIAL AUDITOR

The Board had appointed Mr R.S. Bhatia (PCS no.2514). Practicing Company Secretary, to carry out Secretarial Audit in accordance with the provisions of Sec 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, for the financial year ended March 31, 2015. The Secretarial Audit Report for the financial year ending March 31, 2015 has been obtained and does not contain any qualification, which requires for any comments from the Board. The Secretarial Audit Report for financial year ended March 31, 2015 is annexed to this report as Annexure ''A''.

11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not made any investment during the year under the provisions of section 186 of the Companies Act, 2013. The details of loans and guarantees covered under the aforesaid provisions are mentioned in Note No.14 of the Notes to the financial statements.

12. Deposits

the company has neither accepted nor renewed any deposits during the financial year 2014-15. Further, the Company has repaid all deposits during the year that were due for repayment in the financial year 2014-15 or thereafter that were accepted under the erstwhile provisions of Sec 58A of the Companies Act, 1956. As at March 31, 2015, there are no deposits unclaimed or pending in the books of the Company. Since the Company has repaid all deposits, no details are required to be furnished under Chapter V of the Companies Act, 2013 and rules made thereunder.

13. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Dividend amount remaining unclaimed for more than seven years has been transferred to the Investor Education and Protection Fund.

14. BOARD OF DIRECTORS

The Company is managed and controlled by a professional Board of Directors comprising a blend of Executives and Non- executive professional Directors. As on March 31, 2015, the Board of Directors consists of 8 Directors including Chairman & Managing Director, Managing Director & CEO, Whole time Director and 5 Non-executive Directors, out of which 4 are Independent Directors including one Woman Director. The composition of the board is in conformity with Clause 49 of the Listing Agreement and relevant provisions of the Companies Act, 2013.

Mr p. n. shah, due to health and age, resigned from the Board w.e.f April 01, 2014 after serving on the Board of the Company for more than two decades. The Board places on record its deep appreciation, gratitude and thanks for his valuable contribution to the Company''s growth.

Mr raj Kaul stepped down from the Board w.e.f October 6, 2014. The Board records its appreciation for the valuable services rendered by Mr Raj Kaul during his long association with the Company.

Mr bimal K. raizada, a Director on the Board of the Company, expired on March 19, 2015. The Board, while condoling the death of Mr. Bimal K. Raizada, records its appreciation for the valuable services rendered by him.

In last AGM of the Company held on September 10, 2014, the shareholders had approved the appointment of existing Independent Directors viz. Dr Venkatrao S. Sohoni, Mrs Ramni Nirula, Mr Bimal K. Raizada, Mr Pravin K. Laheri and Mr Narayan K. Seshadri as Independent Directors under the provisions of Companies Act, 2013 each for a term of 3 years.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Sec 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

In accordance with the provisions of Companies Act, 2013 and Articles of Association of the Company, Mr Rajnish Sarna, Whole- time Director shall retire at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment.

The Board recommends his re-appointment for approval of the members at the forthcoming Annual General Meeting.

evaluation of the board''s performance

In compliance with the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, committees and performance of individual directors during the year under review. The evaluation framework for assessing the performance of Directors comprised of attributes like quality of contribution to the Board deliberations, strategic perspective or inputs regarding future growth of Company and its performance, attendance of Board Meetings and Committee Meetings and commitment to shareholder and other stakeholder interests. The evaluation involves Self- Evaluation by the Board Members and subsequently assessment by the Board of Directors. A member of the Board does not participate in the discussion of his/her evaluation. Details of performance evaluation are provided in Corporate Governance Report.

Familiarization program for independent Directors

An induction program is done for Independent Director to familiarize them with the nature of business in which the company operates, and business model of the Company. It also includes the familiarization with important statutory & regulatory provisions governing the Industry.

Periodic presentations are made at the Board and its committees, on business and performance updates of the Company, business strategies etc. Apart from that regular updates on relevant statutory changes and presentations on same are done in meetings held to familiarize them with the updates. The details of such familiarization programmes for Independent Directors are posted on the website of the Company and can be accessed on following weblink http://piindustries.com/sites/default/files/ POLICY%20ON%20FAMILIARIZATION%20PROGRAMS%20 FOR%20INDEPENDENT%20DIRECTORS.pdf number of board meetings conducted during the year under review

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, Board of Directors met 4 (four) times. The details of the board meetings and attendance of the Directors are provided in the Corporate Governance Report.

Meeting of independent Directors

A meeting of Independent Directors was held during the year without the attendance of Non-Independent Directors and members of the management as required under Schedule IV to the Companies Act, 2013 and Clause 49 of the listing agreement.

The meeting was conducted in a flexible manner to enable the Independent Directors to discuss matters pertaining to, inter alia, review of performance of Non–Independent Directors and the Board as a whole, review the performance of the Chairman of the Company (taking into account the views of the Executive and Non–Executive Directors), assess the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

composition of Audit committee

The Board has a duly constituted Audit Committee which comprises of Mr Narayan K. Seshadri as the Chairman, Mr Rajnish Sarna and Mrs Ramni Nirula as the members. Details on the committee are given in the Corporate Governance Report.

Directors responsibility statement

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

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

(e) the directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively- ensuring the orderly and efficient conduct of its business including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

15. EMPLOYEES

remuneration policy of the company

The Remuneration policy of the Company comprising the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Executives of the Company including the criteria for determining qualifications, positive attributes, independence of a Director and other related matters have been provided in the Corporate Governance Report which forms a part of this report.

Human resources and trade relations

Your Company considers people as its biggest assets and "Believing in People" is at the heart of its human resource strategy. Lot of efforts are put in talent management, strong performance management, learning and training initiatives in order to ensure that your Company consistently develops inspiring strong and credible leadership.

During 2014-15, your Company continued to have cordial relationship with all its employees and maintained healthy, cordial and harmonious industrial relations at all levels.

Total workforce of the Company stood at 1576 as on March 31, 2015.

prevention of sexual harrasment at workplace

The Company has a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of women at workplace and matters connected therewith or incidental thereto covering all the aspects as required under the "The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013. There were no such complaints received under the aforesaid policy during the year.

particulars of employees and related disclosure

The information required under Sec 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure ''E'' to the Directors'' Report.

Your Directors place on record their appreciation of the valuable contribution made by the employees of your Company.

EMPLOYEE STOCK OPTION PLAN/ SCHEME

During the year, the Company granted 4,67,102 performance options to eligible employees under PII-ESOP Scheme 2010 as per the criteria laid down by Compensation Committee of the Board. The aforesaid options shall vest after a lock in period of one year from the date of grant. The vesting period of aforesaid options is four years. The exercise price of options granted have been arrived at, by giving discount to the closing market price of the equity share on National Stock Exchange one day prior to the date of grant of option. Voting rights on the shares issued to employees under the ESOP Scheme are either exercised by them or through their appointed proxy.

No employee has been issued share options, during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

The details as required under Regulation 12 of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given in Annexure ''F'' and forms part of this Report.

16. CORPORATE GOVERNANCE

The Company is proud of its Corporate Governance structure and strives to maintain the highest possible standards. A detailed report on the Corporate Governance code and practices of the Company along with a certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement are given in a separate section in this Annual Report.

17. VIGIL MECHANISM – WHISTLE BLOWER POLICY

The Company has established a vigil mechanism for Directors and employees to report their genuine concerns, as approved by Board on recommendation of the Audit Committee. The Wistle Blower Policy of the Company is uploaded on the Company''s website at the following weblink:

http://www.piindustries.com/sites/default/files/PIWhistle%20 Blower%20Policy%20or%20Vigil%20Mechanism.pdf

The policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

18. CORPORATE SOCIAL RESPONSIBILITY AND RELATED MATTERS

Corporate social responsibility policy

Your Company has framed the Corporate Social Responsibility Policy in accordance with the provisions of Sec 135 of the Companies Act, 2013 read with rules made thereunder.

csr committee

Your Company has constituted a CSR Committee comprising five members with Mr. Salil Singhal, as Chairman and Mr. Mayank Singhal, Mr. Rajnish Sarna, Mr. Pravin K. Laheri and Mrs Ramni Nirula as Members.

csr initiatives

CSR activities are carried out through PI Foundation, a Trust set up by PI Industries Ltd to carry out CSR activities. Some of the major activities carried out during the year relates to:

a) Swachh Bharat Abhiyan Programme - provision of household toilets and school toilets, particularly for girls.

b) Certified Vocational Training Course on Chemical Plant Operators - for skill generation in chemical sector.

c) Promotion of Direct Seeded Rice (DSR) Technology – awareness program for farmers to reduce cost and increase productivity.

d) Farm Engagement Programmes – agro advisory programs to improve yield and conserve environment.

e) Community Development Programmes at Plant locations.

f) Academic Recognition.

g) Affirmative Action – Scholarships for SC/ST Students.

The average net profit of the Company, computed as per Section 198 of the Companies Act, 2013 during the three immediate preceding financial years was H173.82 crore. The Company was required to spend H3.48 crore on CSR activities during the financial year 2014-15, being 2% of the aforesaid average net profits. The Company had contributed an amount of H3.48 crore to PI Foundation, out of which the foundation has spent H1.02 crore. The Foundation was not able to spend the entire amount since this was an initial year for CSR spending as per the mandate of new law. Your Company had to earmark the projects and shortlist the implementing agencies through whom various projects would be routed. Moreover, few projects considered are ongoing and spread over 2 to 3 years. The details of CSR activities undertaken by the Company are highlighted in report format provided under the Companies (Corporate Social Responsibility Policy) Rules, 2014 in Annexure ''C'' attached to this report.

19. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure '' B'' attached to this report.

20. CHANGES IN SHARE CAPITAL

In terms of the Scheme of Amalgamation of Parteek Finance & Investment Company Ltd. with PI Industries Ltd. as approved by Hon''ble High Court of Jodhpur, the Authorised Share Capital of the Company stands increased from H70,00,00,000/- (H Seventy crores only) to H72,30,00,000/- (Seventy Two Crores and Thirty lacs only) divided in to 22,30,00,000 (Twenty two crores thirty lacs) Equity Shares of Re.1/- (Rupee one only) each and 50,00,000 (Fifty lac) Preference Shares of H100/- (Rupees Hundred only) each.

Further, during the year, the Company had issued 4,67,102 Equity Shares of Re.1/- each which were allotted to PII ESOP Trust (Trust), set up to administer PII Employee Stock Option Plan-2010. The Trust allocates these shares to the employees of the Company and of its subsidiaries on exercise of stock options from time to time under the aforesaid Scheme. As a result of this allotment, the paid-up equity share capital of your Company stands increased to H13,65,76,182 (13,65,76,182 Equity Shares of Re. 1/- each as on March 31, 2015 from H13,61,09,080 divided into 13,61,09,080 Equity Shares of Re. 1/-each as on March 31, 2014).

21. EXTRACTS OF ANNUAL RETURN

The extracts of Annual Return in Form MGT-9 pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure ''D'' attached to this Report.

22. GENERAL

The Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:-

a) Issue of equity shares with differential rights as to dividend, voting or otherwise.

b) Issue of shares (including sweat equity shares) to employees of the Company under any scheme saved and except issued under ESOP Scheme as referred to in this Report.

c) Neither the Managing Directors nor the Whole-time Director of the Company received any remuneration or commission from any of its subsidiaries.

d) No significant or material orders were passed by the Regulators or Courts or Tribunals, which impact the going concern status and Company''s operation in future.

23. ACKNOWLEDGMENTS

Our Directors wish to express their grateful appreciation for the valuable support and co-operation received from bankers, business associates, lenders, financial institutions, shareholders, various departments of the Government of India, as well as the State Governments of Rajasthan, Gujarat and Jammu & Kashmir, the farming community and all our other stakeholders.

The Board places on record its sincere appreciation towards the Company''s valued customers in India and abroad for the support and confidence reposed by them in the organisation and looks forward to the continuance of this supportive relationship in the future.

Your Directors also place on record, their appreciation for the contribution and hard work of the employees of the Company and its subsidiaries at all levels, who, through their competence, hard work, solidarity and commitment have enabled the Company to achieve consistent growth.

On behalf of the Board of Directors

For PI Industries Ltd.

Sd/-

(Salil Singhal)

Place: Gurgaon Chairman & Managing Director

Date: May 23, 2015 DIN : 00006629


Mar 31, 2014

To the members of PI Industries Limited

The Directors are pleased to present the Annual Report of the Company together with the Audited Accounts for the year ended March 31, 2014:

1. FINANCIAL HIGHLIGHTS

(Rs in Crore)

Particulars FY 2013-14 FY 2012-13

Gross Sales & Other Operating Income 1,846.64 1,313.03

Excise Duty 85.70 67.61

Discount 166.02 94.89

Net Sales 1,594.92 1,150.53

Other Income 15.61 8.36

Profit before Interest, Depreciation and Tax 301.20 187.70

Interest 11.82 22.15

Depreciation 31.37 21.81

Profit before Tax & and Exceptional items 258.01 143.74

Current Tax inclusive tax on capital gain and earlier years 78.83 32.02

Deferred Tax Asset/Liability (4.56) 15.38

Profit after Tax 183.74 96.34

Balance of profit brought forward from previous year 280.06 209.18 Appropriations

Interim Dividend on Equity Shares 13.61 -

Dividend of Previous Years 0.07 0.04

Income Tax on Interim Dividend 2.39 -

Transfer to general Reserve 18.37 9.63

Proposed Final Dividend on Equity Shares 13.61 13.55

Income Tax on Final Dividend proposed on Equity shares 2.31 2.24

Balance Profit / (-) Loss carried forward 413.44 280.06

2. KEY HIGHLIGHTS

The Net Sales for the year grew to H1,594.92 Cr. from H1,150.53 Cr. last year i.e., a growth of 38.62% YoY.

The Operating Profit for the year grew to H301.20 Cr. from H187.70 Cr. last year i.e., an increase of 60.47% YoY.

The Net Profit for the year on stand-alone basis grew to H183.74 Cr. from H96.34 Cr. in the previous year i.e., an increase of 90.72% YoY.

The Company''s Net Profit on a consolidated basis increased to H188.00 Cr. during the year as compared to H97.34 Cr. in the previous year, a growth of 93.14% YoY.

The Earnings per share (EPS) for the year stood at H13.52 per share an increase of 78.60% compared to H7.57 per share for the previous year.

3. OPERATIONS

FY 2013-14 was a notable year for the Indian agriculture sector, which witnessed a sharp improvement in performance as a result of: a) supportive South West monsoons; b) farmers'' response to better output prices; c) continued response to the investments made by private sector in terms of new technologies and their promotion and d) policy initiatives taken by the government to drive agricultural growth in the less developed geographies mainly in the East and the North-East.

Favourable agro-climatic conditions combined with better acreages helped improve the overall sectoral prospects. In the main monsoon season i.e. during the period of June to September, 2013, cumulative rainfall for the country was 6% more than the LPA. Out of the total 36 meteorological sub- divisions present, 30 meteorological sub-divisions, which constitute 86% of the total area of the country received excess/ normal rainfall and the remaining 6 meteorological sub- divisions constituting 14% of the total area of the country received deficient rainfall. Although excess rainfall towards the end of the monsoon period in Eastern and Central India led to crop damage, the late rains helped the rabi crops with reported increase in the sown area. There was an overall increase in area and production estimates of all the major food grains, pulses and oilseeds. Despite soya bean taking a marginal hit in the country, it is expected to record highest ever production rates. Your Company made the best use of this opportunity and registered a healthy performance during the year under review, posting a growth of 19% YoY in the domestic agri-input segment. This growth was mainly on account of an increased market share in terms of our core in-licensed products backed by a focused branding approach, a wider distributional reach and an optimal product mix.

While on one hand our domestic agri-inputs continued to record sharp enhancement in the portfolio of leading brands mainly Nominee Gold, Biovita, Foratox and Rocket, we also consolidated and launched a new brand, Osheen in the Indian market. PI successfully established Osheen as the brand of first preference by paddy farmers to manage the destructive Brown Plant Hopper. Moreover, your Company was also successful in introducing Osheen for the cotton crop in new geographies, which will be the area of growth for PI in the forthcoming years. FY 2013-14 also saw the introduction of two new products, MELSA®, a wheat herbicide and PIMIX, a rice herbicide under co-marketing agreements with the innovator MNCs to provide integrated weed management solutions to wheat and rice growers respectively. Both the products got substantial interest from our customers and helped PI to strengthen its market share.

Our efforts alone and jointly with leading state agricultural universities to promote the cultivation of Direct Seeded Rice (DSR) and thus water conservation through reduced irrigational water usage as opposed to transplanted rice has gathered momentum and wide acceptance in the farming community in the states of Karnataka, Tamil Nadu and Uttar Pradesh. Our prominent product Nominee Gold has been identified as a key enabler of DSR and has been recommended by leading state agriculture universities as a part of sustainable agricultural practices.

Your Company is dedicated to encourage the promotion and help the adoption of innovative, advanced and sustainable farming practices keeping in mind the burgeoning food demand and environmental concerns.

In order to further build up a pipeline of products for introduction in the Indian market, your Company signed three new agreements with their patent holders in insecticide/ herbicide/fungicide segments to evaluate their potential in the domestic market. These products once finalized for marketing in India would further strengthen your Company''s existing pipeline of ~15 such products currently at different stages of evaluation, development and registration.

During the year, your Company also reached the advanced stage of obtaining the registration approval for two new insecticides, which are expected to be launched in domestic market in the year 2014-15.

Your Company witnessed significant enhancement in custom synthesis exports growing robustly by 56% during the year under review. This was on the back of a strong scale-up in the existing molecules combined with new additions in the CSM portfolio. The growth was in-line with the global demand for these molecules. For FY14, PI commercialised three new molecules, which are expected to gain traction over the next few years. Our new site at Jambusar performed well during the year and we have now initiated construction of new multi- product plants in the SEZ, which will support growth, going forward.

Research & Development

During the year under review, the Research & Development team successfully carried out synthesis of 25 new molecules. Out of these, seven molecules were scaled up successfully for their next stage of development and four molecules were transferred to the next stage.

Apart from synthesis and scale up of new products, the Research & Development team also undertook process improvements for 17 projects in order to identify cost improvement opportunities and then implement 10 such project improvements at the plant- level. Environment, Health and Safety (EHS) considerations were given the usual special emphasis in the process development work.

Your Company''s research collaboration with M/s Sony Corporation of Japan continues to support the development of commercial processes in the areas of electronic chemicals.

Your Company benefitted immensely from its R&D investments/ initiatives. Hence, your Company will be substantially augmenting its resources and capabilities in this area.

4. DIVIDEND

The Board of Directors recommended a final dividend of H1 per Equity Share of the face value of H1 each for the year ending March 31, 2014, amounting to H136,109,080. This is in addition to the two interim dividends for 2013-14, aggregating to H1 per Equity Share, paid in August 2013 and February, 2014 amounting to H136,109,080. The total dividend per share for year ended March 31, 2014 is H2 and total dividend payout is H272,218,160 (net of tax).

Subject to the approval of shareholders at the ensuing Annual General Meeting, the final dividend will be paid to those shareholders whose name appear on the register of members of the Company as on September 05, 2014.

5. STOCK SPLIT

During the year, your Company completed the stock split process of its Equity Shares. The face value of Equity Shares was split from H5 to H1 each. The proposal was approved by the shareholders of the Company by way of postal ballot resolution, results of which were announced on April 3, 2013. The new share certificates were issued to the shareholders holding Equity Shares in physical form and were directly credited to the beneficiary accounts of those members who were holding the shares in electronic form on April 15, 2013, i.e., date which was fixed as record date for aforesaid corporate action.

6. CHANGES IN SHARE CAPITAL

During the year under report, the Company had further issued 649,930 Equity Shares of H1 each which were allotted

to PII ESOP Trust (Trust), set up to administer PII Employee Stock Option Plan-2010. The Trust allocates the shares to the employees of the Company and of its subsidiaries on exercise of stock options from time to time under the aforesaid Scheme. As a result of this allotment, the paid-up equity share capital of your Company increased to H136,109,080 (136,109,080 Equity Shares of H1 each as on March 31, 2014 from H135,459,150 divided into 27,091,830 Equity Shares of H5 each as on March 31, 2013).

7. DEPOSITS

The Company has accepted deposits as per the Rules and none of the deposits which were due for payment remain unclaimed/ unpaid to depositors on March 31, 2014.

8. MERGER

Your Company became subsidiary of Parteek Finance & Investment Company Ltd on January 01, 2013 as a result of merger of various promoter companies which were holding shares in the Company. In order to reduce this shareholding tier, the Board of Directors in its meeting held on February 12, 2014 based on the recommendation of the Audit Committee approved the draft Scheme of Amalgamation of Parteek Finance & Investment Company Limited with PI Industries Ltd, subject to requisite approvals from the regulatory authorities. The appointed date for the aforesaid amalgamation is April 01, 2014. As a result of this amalgamation, the individual promoters shall hold the equity shares directly and there would be no holding company. The aforesaid amalgamation would not only lead to simplification of the shareholding structure and reduction of shareholding tiers but also demonstrate the promoter group''s direct commitment and engagement to the Company. There would be no change in the promoter holding as a result of this amalgamation. The promoters would continue to hold the same percentage of shares in the Company, pre and post-amalgamation. Your Company made an application to Bombay Stock Exchange and National Stock Exchange of India Ltd seeking their approval for the proposed amalgamation and accordingly NOC has been issued by both stock exchanges, copies of which are available alongwith other relevant documents pertaining to proposed amalgamation on Company''s website. The Company has also sought approval of the members through postal ballot/e-Voting for the proposed amalgamation, results of which shall be placed before the members in the forthcoming Annual General Meeting.

9. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A and 205C of the Companies Act, 1956, the dividend remaining unclaimed and unpaid for more than seven years, have been transferred to the Investor Education and Protection Fund.

10. DIRECTORS

In accordance with Articles of Association of the Company, Mr. Raj Kaul and Mr. Anurag Surana, the Non-Executive Non- Independent Directors retire by rotation, and being eligible, have offered themselves for reappointment. Mr. P. N shah due to health and age, resigned from the Board w.e.f. April 01, 2014 after serving on the Board of the Company for more than two decades. The Board places on record its appreciation and gratitude for his invaluable contribution to the Company''s growth.

In compliance with the provisions of Sections 149, 152 read with Schedule IV of the Companies Act, 2013 ("the Act"), the appointment of Mr. Bimal K. Raizada, Mr. Narayan K. Seshadri, Mr. Pravin K. Laheri, Dr. Venkatrao S. Sohoni and Mrs. Ramni Nirula is being placed before the members in the General Meeting for their approval. Declaration to the effect that they meet the criteria of Independence as defined under the Act has been received from all of them and in the opinion of the Board, they fulfill the conditions specified in the Act and Rules made thereunder for appointment as Independent Director. Members are requested to refer to the Notice of Annual General Meeting and Explanatory Statement for details of the qualifications and expertise of the Director including the period of their appointment.

The Board commends their appointment/re-appointment for approval of the members in forthcoming Annual General Meeting.

11. DIRECTORS'' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA) OF THE COMPANIES ACT, 1956

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, in relation to Directors'' Responsibility Statement, your Directors confirm as under:

(i) In the preparation of the Annual Accounts for the year ended on March 31, 2014, the applicable Accounting Standards have been followed by the Company.

(ii) Appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the profit for the year ended March 31, 2014.

(iii) Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) The Annual Accounts are prepared on a going concern basis.

12. SUBSIDIARY COMPANIES

The Company has three Wholly-owned Subsidiary Companies as on March 31, 2014. The member may refer to their financial statements forming part of the Annual Report as required under the provisions of Sec 212 of the Companies Act, 1956. The key highlights of these subsidiary companies are as under:

(i) PI Life Science research Ltd. (PILSr)

During the year, the Company posted a profit of H400.05 lacs, earned on account of various R&D activities for developing new products.

(ii) PI Japan Company Ltd.

The Company posted a net profit of JPY 19,01,615 during the year.

Due to the size of operations and local laws, the annual accounts of this Company are not required to be audited. The same have been certified by the Management of the Company.

(iii) PILL finance and Investments Ltd. (PILL-f)

The Company posted a profit of H13.28 lacs during the year.

13. AUDITORS AND AUDITORS REPORT

The Statutory Auditors of the Company, M/s S.S. Kothari Mehta & Co., Chartered Accountants retire at the ensuing Annual General Meeting and have given declaration regarding their Independent criteria as per Companies Act, 2013 and have also confirmed their eligibility and willingness to accept office of Auditors, if reappointed.

The Auditors have given a certificate that their reappointment, if made, would be within the limits prescribed under the Companies Act, 2013.

The Audit Committee and the Board of Directors recommend the appointment of M/s S.S. Kothari Mehta & Co., Chartered Accountants as Statutory Auditors of the Company to hold office till the conclusion of next Annual General Meeting.

Auditors Report do not contain any qualification, hence same does not call for any explanation under the provisions of Section 217(3) of the Companies Act, 1956.

14. COST AUDITORS

Pursuant to the directives issued by the Central Government, an audit of the cost records relating to Insecticides (Technical grade and formulations) manufactured by the Company is required to be conducted by an auditor with the requisite qualifications as prescribed under Section 148 of the Companies Act, 1956.

Your Board has appointed M/s K.G. Goyal & Co., Cost Accountants, Jaipur, as Cost Auditors based on the recommendation of the Audit Committee for the conduct of the audit of cost records of Insecticides (Technical grade and formulations) for the year ending March 31, 2015. Pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Rules made thereunder, Members are requested to consider the ratification of the remuneration payable to M/s K.G. Goyal & Co., Cost Accountants.

15. SECRETARIAL AUDIT

As desired by the Securities and Exchange Board of India (SEBI), secretarial audit is being carried out at specified period by practicing Company Secretary. The findings of the secretarial audit were entirely satisfactory.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in the Annexure - A.

17. EMPLOYEES

During 2013-14, your Company continued to have cordial relationship with all its employees.

The Company recognises the importance of human capital and consequently enrichment of professional and technical skills is an ongoing process within the organisation.

Total workforce of the Company stood at 1,432 as on March 31, 2014.

As required by the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the annexure to the Directors'' Report.

Your Directors place on record their appreciation of the valuable contribution made by the employees of your Company.

18. EMPLOYEE STOCK OPTION PLAN/ SCHEME

During the year, the Company granted 1,415,211 peformance options to eligible employees under PII-ESOP Scheme 2010 as per the criteria laid down by Compensation Committee of the Board. The aforesaid options shall vest after a lock in period of one year from the date of grant. The vesting period of aforesaid options is four years. The exercise price of options granted have been arrived at by giving discount to the closing market price of the equity share on National Stock Exchange one day prior to the date of grant of option.

No employee has been issued share options, during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

The details as required under Regulation 12 of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given in Annexure B and forms part of this Report.

19. MANAGEMENT DISCUSSION AND ANALYSIS

A detailed report on the Management Discussion and Analysis is provided separately in this Annual Report.

20. CORPORATE GOVERNANCE

The Company is proud of its Corporate Governance structure and strives to maintain the highest possible standards. A detailed report on the Corporate Governance code and practices of the Company along with a certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement are given in a separate section in this Annual Report.

21. INTERNAL CONTROL SYSTEM

The Company''s Internal Control System comprises audit and compliance by in-house internal audit team supplemented by internal audit checks by M/s Protiviti Consulting Pvt. Ltd., Internal Auditors of the Company.

The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the financial transactions and review various business processes. Independence of the Internal Auditors and therefore compliance is ensured by the direct report of internal audit division and Internal Auditors to the Audit Committee of the Board.

22. ACKNOWLEDGMENTS

Our Directors wish to express their grateful appreciation for the valuable support and co-operation received from bankers,

business associates, lenders, financial institutions, shareholders, various departments of the Government of India, as well as the State Governments of Rajasthan, Gujarat and Jammu & Kashmir, the farming community and all our other stakeholders.

The Board places on record its sincere appreciation towards the Company''s valued customers in India and abroad for the support and confidence reposed by them in the organisation and looks forward to the continuance of this supportive relationship in the future.

Your Directors also place on record, their appreciation for the contribution and hard work of employees of the Company and its subsidiaries at all levels, who, through their competence, hard work, solidarity and commitment have enabled the Company to achieve consistent growth.

On behalf of the Board of Directors

Place: Gurgaon (Salil Singhal)

Date: May 21, 2014 Chairman & Managing Director


Mar 31, 2013

Dear Member''s

The Directors are pleased to present the Annual Report of the Company together with the Audited Accounts for the year ended March 31, 2013:

1. FINANCIAL HIGHLIGHTS (Rs. in Crores)

Particulars FY 2012-13 FY 2011-12

Gross Sales & Other Operating Income 1313.03 1000.84

Excise Duty 67.61 45.94

Discount 94.89 77.81

Net Sales 1150.53 877.09

Other Income 8.36 5.19

Profit before Interest, Depreciation, Tax & Exception items 187.70 146.26

Interest 22.15 20.11

Depreciation 21.81 17.11

Profit Before Tax & Exceptional items 143.74 109.04

Exceptional Items - 30.34

Current Tax incl tax on capital gain & earlier years 32.02 38.70

Deferred Tax 15.38 0.14

Profit After Tax 96.34 100.54

Balance of profit B/F from PY 209.18 133.25

Appropriations

Interim Dividend on Equity Shares - 5.01

Income Tax on Interim Dividend - 0.81

Transfer to general Reserve 9.63 10.05

Proposed Final Dividend on Equity Shares 13.55 7.51

Income Tax on Final Dividend proposed on Equity Shares 2.24 1.22

Balance Profit / (-) Loss carried forward 280.06 209.18

KEY HIGHLIGHTS:

The net sales for the year grew to Rs. 1150.53 Cr from Rs. 877.09 Cr last year i.e. a growth of 31% YoY

The operating profit for the year grew to Rs. 187.70 Cr. from Rs. 146.26 Cr. last year i.e., an increase 28% YoY.

The Net Profit for the year on stand-alone basis grew to Rs. 96.34 Cr. from Rs. 77.78 Cr. (excluding exceptional items) in the previous year i.e., an increase of 24% YoY.

The Company''s net profit on a consolidated basis increased to Rs. 97.34 Cr. during the year as compared to Rs. 79.07 Cr. in the previous year (excluding exceptional items), a growth of 23% YoY.

The earnings per share (EPS) for the year stood at Rs. 7.57 per share an increase of 21% compared to Rs. 6.23 per share (excluding exceptional items) for the previous year.

2. OPERATIONS

FY 2012-13 was a tough year for Indian agriculture and agro chemical industry. Serious challenges were posed by the delayed and not-so-well distributed monsoon in the key agriculturally important geographies of the country. Till mid-July, out of 36 meteorological subdivisions, rainfall was excess/normal over 11, deficient in 22 and scanty in 3 sub-divisions. In area-wise distribution, only 24% area of the country received excess/ normal rainfall and remaining 76% area received deficient/ scanty rainfall. Acreages under key crops such as rice, wheat, chillies, pulses and cotton were adversely impacted reducing the overall food grain production. Rabi season recoveries were not sufficient enough to cover the losses of kharif. Poor kharif season also caused rising market inventories finally resulting in the erosion of prices and margins of agro chemicals

However despite these challenges, your company could pose a reasonable growth of ~11% YoY through introduction of new products, increasing business from the core in-licensed products and increasing distribution base towards the underdeveloped markets.

Over the years, we have been able to build strong capabilities in process research, process engineering and large-scale manufacturing. These capabilities have helped us to develop a strong portfolio of products and the ability to offer increasing suite of services, which has led to a consistent growth in our Custom Synthesis exports with another year of healthy growth of ~58% YoY. Faster scale-up cycles of existing products, commercialization of 4 new products and enhanced operational productivity are some of the key factors, which contributed to this growth.

Introduction of New Products

During the year under review, your Company successfully launched OSHEEN, a broad spectrum Insecticide. The initial response from the farmers has been quite encouraging and your Company expects OSHEEN to be another key growth driver for your Company in future.

To strategically strengthen our portfolio for providing complete crop solutions in key crops, two more products were launched in the year under review; FLUTON, a broad spectrum novel insecticide and CUPRINA, a popular fungicide for which your company has exclusive marketing rights for its improved WDG formulation.

In order to further build up pipeline of products for introduction in Indian market, your Company signed 4 new agreements with their patent holders in insecticide / herbicide / fungicide segments to evaluate their potential in the domestic market. These products once finalized for marketing in India would further strengthen your Company''s existing pipeline of 8-9 such products currently at different stages of development & registration.

During the year, your company also reached into advance stages of obtaining the registration approval for two new insecticides, which are expected to be launched in domestic market in the year 2013-14. In addition to this, several label expansion applications for existing products have been made to the registration authority, which once approved, will pave way for business opportunities of your key products on additional crop / pest segments.

Commissioning of New Manufacturing Site

Starting from January 2013, your Company has successfully commissioned new manufacturing site in Jambusar, Gujarat for manufacturing of agrochemicals, fine chemicals, pharma intermediates and other specialty chemicals. Commissioning of the new site will help maintain growth momentum of your Custom Synthesis business.

Research & Development

During the year under review, the Research and Development team successfully carried out synthesis of several new molecules. Out of these, nine molecules were scaled up successfully with R&D comparable yield & quality and four molecules were successfully transferred to commercial scale.

Apart from synthesis and scale up of new products, the R&D team also took process improvement projects for identifying product cost improvement opportunities and then implementing such improvement at the plant scale. Environment, Health and Safety (EHS) considerations were given the usual special emphasis in the process development work.

Your Company''s research collaboration with M/s Sony Corporation of Japan continues to perform ably and supports the development of commercial processes in the areas of electronic chemicals.

3. DIVIDEND

The Directors are pleased to recommend a dividend of Rs. 1/- per share (100%) on the Equity share carrying face value of Rs. 1/- each. Subject to the approval at the ensuing Annual General Meeting, the dividend will be paid to those shareholders whose names appear on the register of members of the Company as on August 29, 2013 and the total outflow towards dividend for the year would be Rs. 15.79 cr (including dividend tax) against previous year Rs. 14.59 cr.

4. QIP ISSUE

In accordance with the approval accorded by the members by way of postal ballot process, results of which were announced on 18th January, 2013, your Company has successfully raised funds to the tune of Rs. 117.32 Crores through allotment of 19,24,656 Equity Shares of Rs. 5/- each issued at a price of Rs. 609.60 per share (including premium of Rs. 604.60 per share) on Qualified Institutions Placement (QIP) basis. The floor price of Rs. 609.60 was arrived at a 5% discount to the average price of the Equity Shares for the last two weeks at National Stock Exchange pursuant to the approval of the shareholders in accordance with the applicable Chapter VIII of SEBI (ICDR) Regulations, 2009 as amended from time to time. These shares have been listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE).

5. CHANGES IN SHARE CAPITAL

During the year under report, further shares were issued and allotted as per following details:

- 1,18,796 Equity Shares of Rs. 5 each to PII ESOP Trust as per PII ESOP Scheme - 2010.

- 19,24,656 Equity Shares of Rs. 5 each under Qualified

Institutions Placement (QIP) issues.

Thus, the paid up equity share capital of your Company stood increased to Rs.1,35,459,150/- divided into 27,091,830 Equity Shares of Rs. 5/- each as on 31st March,2013 from Rs. 1,25,241,890/- divided into 25,048,378 Equity Shares of Rs. 5/- each as on 31st March, 2012.

6. STOCK SPLIT

In order to improve liquidity of Company''s equity shares at the Stock Exchanges and to also make it more affordable to small shareholders, the Board of Directors in its meeting held on 12th February, 2013 decided to split the equity shares of the Company from Rs. 5/- each into 5 equity shares of Re. 1/- each. The proposal was approved by the members of the Company by resolution passed by them through postal ballot on 3rd April, 2013. The new share certificates were issued to the shareholders who were holding the equity shares in physical form and equity shares were directly credited to the beneficiary accounts of those members who were holding the shares in electronic form on April 15, 2013, i.e., date which was fixed as record date for aforesaid corporate action.

7. DEPOSITS

The Company has accepted deposits as per the Rules and none of the deposits which were due for payment remain unclaimed / unpaid to depositors on 31st March, 2013.

8. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A and 205C of the Companies Act, 1956, the Unclaimed Dividend remaining unclaimed and unpaid for more than 7 years, have been transferred to the Investor Education and Protection Fund.

9. DIRECTORS

During the year, Dr Venkatrao S. Sohoni has been appointed as an Additional Director on the Board of the Company pursuant to Section 260 of the Companies Act, 1956 and Articles of Association of the Company w.e.f. 7th November, 2012 and holds office up to the date of this Annual General Meeting. The Company has received a Notice along with requisite deposit of Rs. 500/- from a member under Section 257 of the Companies Act, 1956 proposing the candidature of Dr Venkatrao S. Sohoni as a Director of the Company.

Mr Rajnish Sarna was also inducted on the Board of the Company as an Additional Director pursuant to Section 260 of the Companies Act, 1956 and was appointed as Whole- time Director of the Company for a term of 5 years w.e.f. 7th November, 2012. The appointment of Mr Rajnish Sarna as Whole-time Director and remuneration payable to him has been approved by members of the company through Postal Ballot, results of which were declared on 18th January, 2013. The Board in its meeting held on May 18. 2013 on the basis of the recommendation received from Remuneration Committee has considered revision in remuneration payable to Mr Rajnish Sarna w.e.f April 01, 2013, the terms of which are contained in the notice of Annual General Meeting to be held on August 29, 2013. The Board recommends approval of the members for the same.

Further, Mr. Rahul Raisurana who was appointed as Investor Director of the Company on behalf of Standard Chartered entities who have invested funds in the company by way of private equity in October, 2009 has also resigned from the Board w.e.f. 7th November, 2012 since the aforesaid entities have sold their entire stake held in the company. Your Directors place on record their appreciation for the services rendered by Mr. Rahul Raisurana during his tenure as Director.

Mr Anurag Surana resigned as Whole-time Director of the Company w.e.f. 15th September, 2012. However, he continues on Board as Non-Executive Director. Your Directors place on record their appreciation for the services rendered by Mr Anurag Surana during his association with the Company as Whole-time Director of the Company.

Mr. Salil Singhal was appointed as Chairman & Managing Director of the Company for a period of three years w.e.f. July 1, 2010. During his tenure as Chairman and Managing Director of the Company, he has provided strategic direction for sustainable growth of the Company and always guided executive team in significant and complex business issues. Under his leadership, the Company has achieved new heights in terms of turnover, profitability etc. The Board recommends the approval of members for the re-appointment of Mr. Salil Singhal as Chairman and Managing Director of the Company for a period commencing from July 01, 2013 till September 30, 2016 at terms and conditions as contained in notice of the Annual General Meeting to be held on August 29, 2013

Mr Mayank Singhal who was appointed as Managing Director & CEO of the Company for a period of 5 years w.e.f 1st December, 2009 by shareholders in the meeting held on November 30, 2009. The Board on the basis of recommendation of Remuneration committee in its meeting held on May 18, 2013 has reappointed Mr Mayank Singhal as Managing Director & CEO of the Company for a period commencing from April 01, 2013 to September 30, 2017 at terms and conditions which are contained in Notice of the Annual General Meeting. The Board recommends the same for approval of members for the same.

In accordance with Articles of Association of the Company, Mr. Bimal Kishore Raizada and Mr. Pravin K. Laheri, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

The Board recommends their appointment / re-appointments for your approval.

The brief resume/details relating to the Directors who are to be appointed/re-appointed are furnished in the notice for Annual General Meeting to be held on August 29, 2013 which forms part of the Annual Report.

10. DIRECTORS'' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA) OF THE COMPANIES ACT, 1956

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, in relation to Directors'' Responsibility Statement, your Directors confirm as under:

(i) In the preparation of the Annual Accounts for the year ended on March 31, 2013, the applicable accounting standards have been followed by the Company.

(ii) Appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the profit for the year ended March 31, 2013.

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) The Annual Accounts are prepared on a going concern basis.

11. SUBSIDIARY COMPANIES

The Company has three wholly owned subsidiary companies as on March 31, 2013. The members may refer to the Statement under section 212 of the Companies Act, 1956 information on the financials of subsidiaries appended to the above statement under section 212 of the Companies Act, 1956 in this Annual Report for detailed information on these subsidiary companies. The key highlights of these subsidiary companies are as under:

(1) PI Life Science Research Ltd. (PILSR):

During the year, the Company has posted a profit of Rs. 69.38 lacs, which was earned on account of various R&D activities for developing new products.

(2) PI Japan Company Ltd.

The Company posted a profit of JPY 18.56 lacs (Approx. Rs. 12.21 lacs) during the year.

Due to the size of operations and local laws, the annual accounts of this company are not required to be audited. The same have been certified by the Management of the Company.

(3) PILL Finance and Investments Ltd. (PILL-F):

The Company has posted a profit of Rs. 16.35 lacs during the year.

12. AUDITORS AND AUDITORS REPORT

The Statutory Auditors of the Company, M/s S.S. Kothari Mehta & Co., Chartered Accountants retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office of Auditors, if reappointed.

The Auditors have given a certificate that their re-appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956.

The Audit Committee and the Board of Directors recommend the appointment of M/s S.S. Kothari Mehta & Co., Chartered Accountants as Statutory Auditors of the Company to hold office till the conclusion of next Annual General Meeting.

Auditors Report do not contain any qualification, hence same does not call for any explanation under the provisions of Sec 217(3) of the Companies Act, 1956.

13. COST AUDITORS

Pursuant to the directives issued by the Central Government, an audit of the cost records relating to Insecticides (Technical Grade and Formulations) manufactured by the Company is required to be conducted by an auditor with the requisite qualifications as prescribed under section 233B of the Companies Act, 1956. Your Board has appointed M/s K.G. Goyal & Co., Cost Accountants, Jaipur, as Cost Auditors based on the recommendation of the Audit Committee for the conduct of the audit of cost records of Insecticides (Technical Grade and Formulations) for the year ending March 31, 2014 and necessary applications shall be filed with Ministry of Corporate Affairs under section 233B for seeking Central Government approval for their appointment.

14. SECRETARIAL AUDIT

As desired by Securities and Exchange Board of India (SEBI), secretarial audit is being carried out at specified period by Practicing Company Secretary. The findings of the secretarial audit were entirely satisfactory.

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 217(1 )(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in the Annexure - A.

16. EMPLOYEES

During 2012-13, your Company continued to have excellent cordial relationship with all its employees.

The Company recognizes the importance of human capital and enrichment of professional & technical skills is an ongoing process within the organization.

Total workforce of the Company stood at 1401 as on March 31, 2013.

As required by the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the annexure to the Directors'' Report. Your Directors place on record their appreciation of the valuable contribution made by the employees of your Company.

17. EMPLOYEE STOCK OPTION PLAN/SCHEME

The Company had granted 98,766 Peformance Options to eligible employees under PII-ESOP 2010 as per the criteria laid down by Compensation Committee of the Board. The aforesaid options shall vest after a lock in period of one year from the date of grant. The vesting period of aforesaid options is four years. The Exercise price of options granted have been arrived at by giving discount to the closing market price of the equity share on National Stock Exchange one day prior to the date of grant of option.

No employee has been issued share options, during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

The details as required under Regulation 12 of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given in Annexure B and forms part of this Report.

18. MANAGEMENT DISCUSSION AND ANALYSIS

A detailed report on the Management Discussion and Analysis is provided separately in this Annual Report.

19. CORPORATE GOVERNANCE

The Company is proud of its corporate governance structure and strives to maintain the highest possible standards. A detailed report on the Corporate Governance Code and practices of the Company along with a certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement are given in a separate section in this Annual Report.

20. INTERNAL CONTROL SYSTEM

The Company''s internal control system comprises audit and compliance by in-house internal audit team supplemented by internal audit checks by M/s Protiviti Consulting Pvt. Ltd., Internal Auditors of the Company.

The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the financial transactions and review various business processes. Independence of the Internal Auditors and therefore compliance is ensured by the direct report of internal audit division and internal auditors to the Audit Committee of the Board.

21. ACKNOWLEDGMENTS

Our Directors wish to express their grateful appreciation for the valuable support and cooperation received from bankers, business associates, lenders, financial institutions, shareholders, various departments of Governments of India, Rajasthan, Gujarat and Jammu & Kashmir, farming community and all our other stakeholders.

The Board places on record its sincere appreciation towards the Company''s valued customers in India and abroad for the support and confidence reposed by them in the organization and looks forward to the continuance of this supportive relationship in future.

Your Directors also place on record, their appreciation for the contribution and hard work of employees of the Company and its subsidiaries at all levels, who, through their competence, hard work, solidarity and commitment have enabled the Company to achieve consistent growth.

On behalf of the Board of Directors Sd/-

Place: Gurgaon Salil Singhal

Date: May 18, 2013 Chairman & Managing Director


Mar 31, 2012

The Directors are pleased to present the Annual Report of the Company together with the Audited Accounts for the year ended March 31, 2012:

1. FINANCIAL HIGHLIGHTS

(Rs. in Crores)

Particulars FY 2011-12 FY 2010-11

Gross Sales & Other Operating Income 1000.84 836.07

Excise Duty 45.94 46.19

Discount 77.81 71.55

Net Sales 877.09 718.33

Other Income 5.19 10.5

Profit before Interest , Depreciation, Tax & Exception items 146.26 124.02

Interest 20.11 18.6

Depreciation 17.11 15.59

Profit Before Tax & Exceptional items 109.04 89.83

Exceptional Items 30.34 -

Current Tax including tax on capital gain 38.70 20.42

Deferred Tax 0.14 5.29

Profit After Tax 100.54 64.12

Balance of profit brought forward from previous year 133.25 81.38

Appropriations

Interim Dividend on Equity Shares 5.01 -

Income Tax on Interim Dividend 0.81 -

Transfer to general Reserve 10.05 6.41

Proposed Final Dividend on Equity Shares 7.51 5.01

Income Tax on Final Dividend proposed on Equity shares 1.22 0.83

Balance Profit / (-) Loss carried forward 209.18 133.25

The Company has achieved new milestones in the Year 2011-12 by crossing Rs. 1000 Cr of gross revenue and Rs. 100 crore of Profit after Tax (PAT).

The net sales for the year grew by 22% over the previous year. Since the polymer compounding business was divested in April 2011, the actual comparable topline growth in the Company's existing businesses for the year has been 36% YoY.

The operating profit of the Company grew by 19% YoY to Rs. 146.26 Crore; an increase of 22.24 Crore YoY. The operating profit was impacted by volatility of INR / USD exchange rate and its impact in current year was a loss of Rs. 4.48 Cr against gain of Rs. 7.35 Cr during the previous year.

The Net Profit on stand alone basis (Including exceptional items) grew by 57% to Rs. 100.54 Crore for the year ended 31st March, 2012 from Rs. 64.12 Crore in the previous year. Net profit margin increased to 11.4% during the year under review from 8.9%in the previous year.

The Company's net profit on a consolidated basis (Including exceptional items) increased to Rs 103.59 Crores during the year as compared to Rs. 65.10 Crores in the previous year, a growth of 59% YoY.

The earnings per share (EPS) for the year stood at Rs. 40.27 per share an increase of 40% compared to Rs. 28.76 per share for the previous year.

2. OPERATIONS

Your company's Domestic Agri Input Business once again outperformed the industry by growing at 22% YoY. The strong performance was mainly driven by sales growth of newly launched in-licensed products, expansion of the distribution channel network and inclusion of products in the portfolio to give complete crop solutions in the Company's targeted crop areas. Meticulous planning, proactive sales promotion on select crops, regular monitoring of crop acreages and pest infestation and the hard work of the marketing team were the key to success.

The growth in the domestic agri input business was achieved despite several challenges during the year for the Agri input industry in general and plant protection industry in particular. These challenges included increasing costs of production due to higher input costs (fertilizers, manpower, fuel etc) and the inability of the farmers to realize Minimum Support Prices (MSP) in many parts of the country affected the crop economics for farmers. Factors such as change in subsidy system on fertilizers, export restrictions on leading crops, crop holidays in certain areas, unfavorable rains for crops such as pulses and soybean had an impact on the farmers' investment in plant protection chemicals and hence the agro-chem industry.

The quantum and distribution of rainfall, particularly in the 2nd crop season, was also not very helpful to the farmers and to the agri input industry. Though the South West monsoon was normal for most parts of the country (102 % of its LPA), the North East monsoon was significantly lower than the normal rainfall (52 % of LPA) and the distribution was also scanty which affected the crop acreages and yields in some parts of the country.

This financial year also saw the steep rise in energy and transportation costs, sudden fluctuations in foreign currency rates and raw material price increases.

The International Custom Synthesis & Manufacturing business registered a robust -62% growth in sales YoY. The growth was mainly driven by the scale-up of already commercialized products and commercialization of some new products. Since most of these products are at early stage of their life cycle, they auger a good future growth of the Company. During the year, some more high growth potential products were added to the R&D and process research pipeline of your Company.

The efforts of your team have started bearing results, and we hope to continue with the momentum of growth during the current year as well. Your team is continuing to work in the diverse areas of applications leading to balanced portfolio of products. The business continues to have several long-term orders and a robust and high potential order book position for the coming years.

Introduction of New Products

For the third consecutive year, NOMINEE GOLD continued to be the growth driver and a sought after solution for weeds by the rice growers. Your Company could successfully enlarge the use of NOMINEE GOLD, the rice herbicide, which is expected to be a key enabler for rice productivity enhancement. The Company is also working to promote the concept of direct seeded rice against the present practice of transplanted rice. This is expected to save a huge amount of water and labour costs to the farmer.

As a part of its strategy to provide complete crop solutions, your Company successfully introduced two broad spectrum modern fungicides: CLUTCH and SANIPEB, one wheat herbicide: WICKET and a broad spectrum Insecticide: OVAL.

During the period under review, your Company also reached the penultimate stages of registration approval for two new broad spectrum insecticides. Both these molecules are expected to be launched in the domestic market in the year 2012-13. Your Company continues its quest for new molecules and has signed 6 new agreements with their patent holders in insecticide / herbicide / fungicide segments to evaluate their potential in the domestic market. These products further add to the Company's product pipeline and strengthen our product portfolio for the coming years.

Research & Development

Your Company's research collaboration with M/s Sony Corporation of Japan continues to perform ably and supports the development of commercial processes in the areas of electronic chemicals.

The Research and Development team continues to work on new areas of fine chemical business and have successfully carried out synthesis and scale-up for several new molecules in the area of agrochemicals, pharmaceutical intermediates and imaging chemicals. As a result of this, three new patented products shall get commercialized in financial year 2012-13 adding to our growth in the custom synthesis business.

Process improvement projects were undertaken for improving product quality and productivity of the manufacturing processes. Enviornment, Health and Safety (EHS) considerations were given the usual special emphasis in the process development work.

R&D facility receives GLP Certification

During the year under review, the Company's R&D facility at Udaipur was accredited for 'Good Laboratory Practices (GLP) and Norms on OECD Principles' by National GLP Monitoring Authority (NGCMA), Government of India' in the field of Physical - Chemical Testing. This has indeed been an outstanding accomplishment for the Company.

This GLP certification follows the grant of full membership to India as an OECD member country. Hence, the physical / chemistry related data generated in Company's GLP accredited lab would now be acceptable by the registration authorities (agrochemicals/pharma etc.) in all the OECD countries such as USA, Europe, Japan etc.

The GLP certification meets PI's strategy to provide comprehensive solutions under one roof and broadens its portfolio of custom synthesis and manufacturing solutions to cover chemical process research, molecule development, analytical method development, synthesis of high purity / impurities of chemical entities for analytical reference standards, 5 batch analyses under GLP conditions, scale up studies, process / plant engineering and commercial scale production.

Construction of New Manufacturing Site

Given the need for additional capacity to meet the growing order book position in our customs synthesis business, the Company has made good progress in the construction of the new manufacturing site at Jambusar (Gujarat). The facility is expected to start commercial production from the 3rd quarter of the present financial year. Your Company has set up this plant in the SEZ area, which offers various tax benefits and ease of operations.

Conferred with PowerBrands status

In the Indian Powerbrands Conclave held in, London, UK on December 12, 2011, your Company was given 'Power Brand' status from amongst 81 large and really successful brands and companies featured in the book which is considered a brand bible comprising the country's most inspirational brands. Mr. Salil Singhal, Chairman and Managing Director was also honoured with the prestigious 'Corporate Leader Of the Year - Agriculture'.

Indian PowerBrands: The Global Superpower Edition is a research driven anthology of India's Most Powerful Companies, which are successfully taking on competitors in their own unique ways. This book is a one of its kind initiative exemplifying the Indian-born icons who have emerged as the ultimate benchmark of achievement and success and are aggressively and effectively re-writing the global business equations.

3. DIVIDEND

The Board of Directors had declared an interim dividend of Rs.2/- per share (40%) on the Equity Shares of the Company, in November, 2011. The Directors are pleased to recommend a final dividend of Rs. 3/- per share (60%) on the Equity Shares. This will take the total dividend for the year to Rs. 5/- per share (100 %) on the equity share capital of the Company.

Subject to the approval at the ensuing Annual General Meeting, the dividend will be paid to those shareholders whose names appear on the register of members of the Company as on September 14, 2012.

4. CONVERSION OF COMPULSORILY CONVERTIBLE PREFERENCE SHARES

a) During the year, the Company has completed the conversion of Compulsorily Convertible Preference Shares (CCPS) as follows:

- Issuance of 1,55,829 Equity Shares of Rs.10/- each at premium of Rs. 249.90 upon conversion of 405000 Convertible Preference Shares of Rs.100/- each allotted to M/s Standard Chartered Private Equity (Mauritius) Ltd.

- Issuance of 1,55,829 Equity Shares of Rs.10/- each at premium of Rs. 249.90 upon conversion of 405000 Convertible Preference Shares of Rs.100/- each allotted to M/s Standard Chartered Private Equity (Mauritius) II Ltd.

b) Further, company has also redeemed Optionally Convertible Debentures (OCD's) as follows:

- Issuance of 10,25,030 Equity Shares of Rs.10/- each at premium of Rs. 249.90 upon conversion of 26,64,053 Optionally Convertible Debentures (OCD's) of Rs.100/- each allotted to M/s Standard Chartered Investments and Loans (India) Ltd. Balance 275947 OCD's were redeemed in cash.

- Pursuant to above conversion, the paid up equity share capital of the Company increased from Rs. 11,18,75,010/- comprising of 11187501 equity shares of Rs. 10/- each to Rs. 1,252,41,890/- comprising of 1,25,24,189 equity shares of Rs. 10/- each and were duly listed on the stock exchanges.

5. STOCK SPLIT

In order to improve liquidity of Company's shares at the stock exchanges and also make it more affordable to small shareholders', the board of directors decided to split the equity shares of the company of Rs.10/- each into 2 equity shares of Re.5/- each.

The proposal was approved by the members of the Company by resolution passed by them at the last Annual General Meeting held on July 16, 2011. The new share certificates of Re.5/- each were issued to the shareholders in the month of August, 2011 in respect of those who were holding shares in physical form and were credited to the beneficiary accounts of those holding shares in electronic form on August 19, 2011 which was fixed as record date for aforesaid corporate action.

Based on the stock split of equity shares @ Rs.5/- each in August, 2011, the paid up capital remains at Rs.12,52,41,890/- comprising of 2,50,48,378 shares.

6. LISTING AT NATIONAL STOCK EXCHANGE

The company's equity shares got listed at National Stock Exchange w.e.f June 15, 2011, which provides the opportunity to the company's shareholders to trade company's equity at one more leading stock exchange of India. It also results in overall increase in the trading volumes of the Company's share at the stock exchanges.

7. DEPOSITS

The Company has accepted deposits as per the Rules and none of the deposits which were due for payment remain unclaimed / unpaid to depositors on 31st March, 2012.

8. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A and 205C of the Companies Act, 1956, the Unclaimed Dividend remaining unclaimed and unpaid for more than 7 years, have been transferred to the Investor Education and Protection Fund.

9. DIRECTORS

At the ensuing Annual General Meeting, Mr. Raj Kaul and Mr. Rahul Raisurana, retire by rotation as Directors and being eligible, offer themselves for re-appointment in terms of provisions of Articles of Association of the Company.

The Board recommends their re-appointment for your approval.

The brief resume/details relating to the Directors who are to be appointed/re-appointed are furnished in to the notice for Annual General Meeting to be held on September 14,2 012 which forms part of the Annual Report.

10. DIRECTORS' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA) OF THE COMPANIES ACT, 1956

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, in relation to Directors' Responsibility Statement, your Directors confirm as under:

(i) In the preparation of the Annual Accounts for the year ended on March 31, 2012, the applicable accounting standards have been followed by the Company;

(ii) Appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the profit for the year ended March 31, 2012.

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The Annual Accounts are prepared on a going concern basis.

11. SUBSIDIARY COMPANIES

The Company has three wholly owned subsidiary companies as on March 31, 2012. The members may refer to the Statement under section 212 of the Companies Act, 1956 information on the financials of subsidiaries appended to the above statement under section 212 of the Companies Act, 1956 in this Annual Report for detailed information on these subsidiary companies. The key highlights of these subsidiary companies are as under:

(1) PI Life Science Research Ltd. (PILSR):

During the year the Company has posted a profit of Rs. 131.62 Lacs, which was earned on account of various R&D activities for developing new products.

(2) PI Japan Company Ltd.

The Company posted a profit of JPY 15.34 Lacs (Approx.Rs. 9.27 Lacs) during the year.

Due to the size of operations and local laws, the annual accounts of this company are not required to be audited. The same have been certified by the Management of the Company

(3) PILL Finance and Investments Ltd. (PILL-F):

The Company has posted a profit of Rs. 157.07 Lacs during the year.

12. SALE OF POLYMER COMPOUNDING BUSINESS UNDERTAKING OF THE COMPANY

During the year, the Company concluded the transaction of sale of its polymer compounding business to the M/s Rhodia Polymer & Specialties India Pvt. Ltd., a wholly owned Indian Subsidiary of Rhodia S.A. on April 14, 2011 on slump sale basis.

13. AUDITORS

The Joint Statutory Auditors of the Company, M/s B.D. Gargieya & Co., Chartered Accountants and M/s S.S. Kothari Mehta & Co., Chartered Accountants; retire at the ensuing Annual General Meeting. M/s S.S. Kothari & Co., Chartered Accountants have given a certificate that their re-appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956. However, M/s B.D. Gargieya & Co , Chartered Accountants have expressed their inability for reappointment at forthcoming Annual General Meeting and they shall continue to be statutory auditors till the conclusion of forthcoming Annual General Meeting.

The Audit Committee and the Board of Directors recommend the appointment of M/s S.S. Kothari Mehta & Co., Chartered Accountants as Statutory Auditors of the Company to hold office till the conclusion of next Annual General Meeting.

14. COST AUDITORS

Pursuant to the directives issued by the Central Government, an audit of the cost records relating to Insecticides (Technical Grade and Formulations) manufactured by the Company is required to be conducted by an auditor with the requisite qualifications as prescribed under section 233B of the Companies Act, 1956.

Your Board has proposed to appoint M/s K.G. Goyal & Co., Cost Accountants, Jaipur, as Cost Auditors based on the recommendation of the Audit Comittee for the conduct of the audit of cost records of Insecticides (Technical Grade and Formulations) and Chemicals for the year ending March 31, 2013 and necessary applications shall be filed with Ministry of Ministry of Corporate Affairs under section 233B for seeking Central Government approval for their appointment.

15. SECRETARIAL AUDIT

As desired by Securities and Exchange Board of India (SEBI), secretarial audit is being carried out at specified period by Practicing Company Secretary. The findings of the secretarial audit were entirely satisfactory.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in the Annexure - A.

17. EMPLOYEES

During 2011-12, your Company continued to have excellent cordial relationships with all its employees at all units. The Company is proud to see their commitment towards their responsibilities. They have made invaluable contribution in the growth of the Company.

The company recognizes the importance of human capital and enrichment of professional and technical skills is an ongoing process within the organization.

Total workforce of the Company stood at 1142 as on March 31, 2012.

The information required under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is provided in the Annexure forming part of the Report. In terms of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company.

18. EMPLOYEE STOCK OPTION PLAN/SCHEME

The Company had formed a Stock Option Plan named "PII -ESOP 2010 Scheme" in order to reward the employees for their past association and performance as well as to motivate them to contribute to the growth and profitability of the Company (including subsidiary companies) with an intent to attract and retain talent in the organization, The aforesaid scheme was duly approved by shareholders in its EGM held on 21st January, 2011 and is administered through independent trust. During the year, the Compensation Committee of the Board granted 3,63,836 options under PII-ESOP 2010 Scheme to certain category of employees as per the criteria laid down by Compensation Committee of the Board. The aforesaid options shall vest after a lock in period of one year from the date of grant. The vesting period of aforesaid options varies from 1 to 6 years depending upon the percentage of vesting of options as per the criteria laid down. The Exercise price of options granted have been arrived at by giving discount to the closing market price of the equity share on Bombay Stock Exchange one day prior to the date of grant of option.

No employee has been issued share options, during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

The details as required under Regulation 12 of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given in Annexure B and form part of this Report.

19. MANAGEMENT DISCUSSION AND ANALYSIS

A detailed report on the Management Discussion and Analysis is provided separately in this Annual Report.

20. CORPORATE GOVERNANCE

The Company is proud of its corporate governance structure and strives to maintain the highest possible standards. A detailed report on the Corporate Governance Code and practices of the Company along with a certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement are given in a separate section in this Annual Report.

21. INTERNAL CONTROL SYSTEM

The Company's internal control system comprises audit and compliance by in-house internal audit team supplemented by internal audit checks by M/s Protiviti Consulting Pvt. Ltd, Internal Auditors of the Company. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the financial transactions and review various business processes. Independence of the Internal Auditors and therefore compliance is ensured by the direct report of internal audit division and internal auditors to the Audit Committee of the Board.

22. ACKNOWLEDGMENTS

Our Directors wish to express their grateful appreciation for the valuable support and cooperation received from bankers, business associates, lenders, financial institutions, shareholders, various departments of Governments of India, Rajasthan, Gujarat and Jammu and Kashmir, farming community and all our other stakeholders.

The Board places on record its sincere appreciation towards the Company's valued customers in India and abroad for the support and confidence reposed by them in the organization and looks forward to the continuance of this supportive relationship in future.

Your Directors also place on record, their appreciation for the contribution and hard work of employees of the Company and its subsidiaries at all levels, who, through their competence, hard work, solidarity and commitment have enabled the Company to achieve consistent growth.

On behalf of the Board of Directors

Sd/-

Place: Gurgaon (Salil Singhal)

Date: 29.05.2012 Chairman and Managing Director


Mar 31, 2010

The Directors one pleosed to present the Annual Report of the Company together with the Audited Accounts for the year ended March 31, 2010 during which the Company has registered all round growth.

1, FINANCIAL HIGHLIGHTS (Rs.in Crores) Particulars Current year Previous Year 2009-10 2008-09 Gross Sales 619.25 551.70

Net Sales 541.71 461.44

Other Interns 1.11 0-74

Profit Before Interest, To*, Deo. & App. [EBITDA) 87.47 64.32

Interest 18.31 22.28

Depreciation 13.15 11.49

Profit Before To* (PBT] 56.01 30-55

Provision for Taxation Current Tax 13.03 3.52

Deferred Tax 2.03 3.27

Fringe Benefit Tax - 0.68

Profit After Tax 40.95 23.09

Year 2009-10 has been a year of significant achievements and witnessed spectacular growth in standalone and consolidated revenues and profitability,

During the year under review, the net sales of the Company increased to Rs- 542 Crore aS compared to Rs- 461 Crore in Previous year- on increase of 1 7% YoY. While all business segments of the Company reported increase in sales, the kev driver of the growth in sales was 4

\% YoY increase in the exports of active ingredients and intermediates under contract manufacturing and custom synthesis business.

The operating profit of the Company increased to Rs. 87.47 Crore as compared to Rs, 64.32 Crore; on increase of 36% YoY. The operating profit margin increased to 16% in current year from 14% in the previous year on account of improved margins in domestic agrochemicals and Polymer business, increased revenues from custom synthesis, better capacity utilization and efficient overheads cost management.

The net profit PAT) grew by 77% to Rs. 40,95 Crore for the year ended 31st March, 2010 from Rs, 23-09 Crore in the previous year. Net profit margin increased to 7.6% during the year under review from 5.0% in the previous year.

The Compony s net profit on a consolidated basis increased to Rs 41.90 Crores during the year, as compored to Rs. 24.25 Crores in the previous year, a growth of 73% YoY.

The earning per share IEP5) for the year stood at Rs. 57,77 per share compared to Rs.32,57 per share for the previous year.

2. OPERATIONS

During the year under review, the country saw one of the worst monsoons in lost few decades. The long period average {LPA) rainfall was 22% short of normal rainfall on all India basis which severely affected Kharif crops, especially paddy. In 1hs the kharif season the area under cultivation for food grains declined by 6.5 per cent compared 10 last year. Food production is expected to be short by around 16 percent compared to the last year.

While the crop produce prices remained mostly remunerative due to lower production, the crop protection products prices moved downward, continuing the trend seen in the latter part of last year, mainly due to lower raw material prices, especially in generic molecules.

However, despite these unprecedented adverse conditions, your Companys agri input business did reasonably well, The revenue of this business grew by 7% YoY but the EBITDA of this business grew by 30% mainly on account of improved product margins, introduction of new products and efficient overheads cost management.

Your company is also expecting to launch a low toxicity product in the year 2011, in the insecticide segment, further strengthening its portfolio in rice and vegetable;.

The continued recession in the developed world, during most of 2009-10 and high agrochemical inventory levels maintained by global Agchem companies resulted in temporary slowdown in the off take of outsourced products by these companies. Yet the revenues of contract manufacturing and custom synthesis business of your Company grew by 41 % YoY with 43% growth in EBITDA of this business.

Your Company could achieve this growth on the strength of its excellent relationships with several innovator companies in Europe and Japan, development of new compounds, addition of new products and volume expansion of existing products.

With its commitment to continue its growth Inspired by science, your Company has signed a research contract with one of the leading Universities of Japan. Research in some new areas of application has already begun at the stale of the art research center at Udaipur, We expect that this will be ? good strategic diversification to complement the current areas of the Companys activities in the agrochemical and pharmaceutical sectors.

The polymer business of your Company which was majorly affected by the global meltdown and its aftermath during lost year registered satisfactory recovery during the current year particularly in the 2nd half. Due to recovery of customer industries like automobile, construction material, electronics, etc, not only the revenue of this business grew by 10% YoY in the current year, but the profitability of this business improved quite substantially due to better product mix, improved capacity utilization and efficienl cost management.

Introduction of New Products

During the year under review, your Company launched a new revolutionary rice herbicide in the country Nominee Gold. The product was received exceedingly well by the Indian formers, and promises to change not only the herbicide application pattern in the country, but also significantly reduce the water consumption in rice cultivation. Your company is expecting this product to achieve status of the largest brand of Rice herbicide in the coming years and will contribute significanly to the growth of your company,

Apart from this, several new molecules were successfully synthesized in the areas of Agro intermediates and active ingredients (including a new chemistry based fungicide and herbicide], imaging chemicals, pharma intermediates, etc. Out of these newly synthesized products, 6 products were commercialized and long term supply agreements were signed with the innovator companies.

Expansion of Manufacturing Capacity

Inorder to Service new contracts signed with same of the leading innovator Companies to manufacture and Supply their IP products on mufti year basis, your Company is setting up a new manufacturing site in Gujarat. For this purpose, we have acquired 22,3 Acne land in the Sterling 5EZ located at Jombusar [Dist. Bharuch). Your Company is planning to invest around Rs 200 Crores at the new site in the next 2-3 years in multiproduct plants For manufacturing of agrochemical active ingredients and intermediates, ]pharma Intermediates and other fine chemicals products. The first phase of this new site is expected to be commissioned early 2011.

Green Chemistry Award

During the" current year, your Company was awarded the prestigious Green Chemistry Aword 2009 in the "MNCs and Large Enterprises Category" in the Industrial Green Chemistry Workshop IIGCW] 2009, a premier global event for the industry held on 4th to 6th December 2009 in Mumbai.

The IGC award recognizes outstanding research and initiatives in Green Chemistry and Engineering to promote innovation in cleaner, cheaper, smarter chemistry developments that have been or can be utilized by industry in achieving their pollution prevention goals.

PI hold submitted projects to showcase technological innovation in the manufacturing process of its agrochemical active ingredients. The Jury comprising of eminent scientists and world authorities on Green Chemistry appreciated the quality of work; done by PI For the significant reduction in emission / effluent by solvent less process and recycling of the by- product. Nominees for the IGC award intlhe "MNC and Large scale Industries category" included some of the leading players in pharmaceutical and specially chemical sector.

The Management Discussion and Analysis section which forms a part of this Annual Report gives the analysis of performance,

3. DIVIDEND

The Board of Directors are pleased to recommend following dividend for the financial year ended on March 31 r 2010:

(o) Dividend of Rs. 2/- per equity share of Rs.10/- each (20%}

(b) Dividend of Rs. 0,01/- per Compulsorily Convertible Preference Shone (CCPS) of Rs. 100/- eoch(0.01%] on pro-rata basis from the date of allotment i.e. 24.10.2009

The dividend if approved at the ensuring AnnuaI General Meeting, will be paid to those shareholders whose names appear on the register of members of the Company as on July 10, 2010.

4. SONUS ISSUE

The Company has completed o very Successful financial year 2009-1 0, in which if has posted the highest ever net profit ofter tax of Rs. 40.95 Crore. To reward the shareholders in the successful value creation cycle, the Board of Directors of Ida Company in their meeting held on May 17,2010 hove recommended, subject to shareholders approval, a Bonus issue of equity shares in the ratio of one equity share of Rs. 10/- each tor every two fully paid equity shores held in the Company, as on the Record Date to be fixed by the Board or a committee thereof for this purpose.

5. DEPOSITS

The Company has accepted deposits as per the Rules and none of the deposits which were due for payment remain unclaimed/ unpaid.

6. DIRECTORS

During the year under review, Mr. Junichi Nakono, resigned from the position of whole-time Director of the Company w.e-f. August 1, 2009. The Board places on record Its gratitude far the valuable guidance provided by Mr. Junichi Nakono during his lenure as D i rector of the Company.

In pursuance of the approval of the members of the Company at the Extra-ordinary General meeting held on November 30, 2009, Mr. Mayank Singhal was appointed as Managing Director and Chief Executive Officer (MD and CEO) of the Company for a period of 5 years commencing December 1, 2009.

During the year under review, Mr. Rahul Raisurano was appointed as Nominee Diredor (Additional w.e.f. October 24, 2009 in pursuance of the Share Subscription and Shareholder Agreement executed with Standard Chartered Private

Equity [Mauritius] II Limited. Mr. Raisurona was appointed as rotational Director in the Extra-ordinary General Meeting held on November 30, 2009,

Also, during the year, Mr. Pravin K, Laherl and Mr. Bimal Kishore Roizoda were appointed as Additional Directors on the

Board with effect From January 20, 2010 and hold office till the ensuing Annual General Meeting, Notices under Section

25% of the Companies Ad, 1956 has been received from the members of the Company, for their appointment.

Mr, Solil Singhal was appointed as Chairman and Managing Director of the Company for tenure of three years w.e.f. July

1, 2007, Accordingly. Board recommends the re-oppointment of Mr. Salil Singhal as Chairman and Managing Director of the Company for a further period of three years at the ensuing Annual Genenal Meeting.

Mr- Anurag Surana was Appointed as Whole-time Director of the Company for tenure of three years w.e.f. July 1, 2007.

Accordingly, Board recommends the re-appointment of Mr. Anurag Surana as Whole-time Director of the Company for a further period of three years at the ensuing AnnuaI General Meeting.

At the ensuing Annual General Meeting, Mr- Raj Koul and Dr. S.R. Vishnoi retire by rotation as Directors and being eligible, offer themselves for re-appoinlment in terms of provisions of Articles of Association of the Company.

The Board recommends their re-eppointment for your approval.

The brief resume/details relating to the Directors who are to be appointed/ re-appointed are Furnished in the explanatory statements to the notice for Annual General Meeting to be held on July 19, 2010 which forms part of the Annual Report.

7. DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA) OF THE COMPANIES ACT, 1956

Pursuant to the requirement of Section 217 {2AA) of the Companies Ad, 1956, in relation to Directors Responsibility

Statemeni, your Directors confirm as under;

(i) In the preparation of the Annual Accounts for the year ended on March 31, 2010, the applicable accounting

standards have been followed by the Company; ¦ill Appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that at are reasonable and prudent so as to give a true and fair view of the slate of affairs of the Company as at March 31, 2010 and of the profit for the year ended March 31,2010.

(ill) Proper and sufficient cars has, been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding (he assets of the Company and for preventing and detecting fraud and other irregularities;

(ivj The Annual Accounts are prepared on a going concern basis-

8. SUBSIDIARY COMPANIES

The Company has three wholly owned subsidiary companies as on Month 31, 2010. The members may refer to the Statement under section 212 of the Companies Act, 1956 and information on the financials of subsidiaries appended to the above statement under section 212 of the Companies Act, 1956 in this Annual Report far detailed information on these subsidiary companies. The key highlights of these subsidiary companies are as under:

(1) PI Life Sciatica Research Ltd. (PILSR):

During the year, the Company has posted o profit of Rs. 88.77 Lacs, which was earned on account of various R&D activities for developing new products.

(2) PI Japan Company Ltd,

The Company posted o profit of JPY 9.76 Lacs (Rs. 5.02 Lacs during the year.

Due to the size of operations and local laws, the annual accounts of this, company are not required to be audited. The

some have been certified by the Management of the Company.

(3} PILL Finance and Investment Ltd, (PILL-FJ;

The Company posted a profit of Rs. 3.72 Lots during the year.

9. AUDITORS

The Joint Statutory Auditors of the Company, M/s B.D. Gargjeya & Co., Chartered Accounts and M/s S.S. Kolhari Mehta & Co., Chartered Accountants; retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office of Auditors, if reappointed. The Auditors have given a certificate that their re- appointment, if mode, would be within the limits prescribed under Section 214 (IB) of the Companies Act, 1956. The Audit Committee and the Board of Directors recommend appointment of M/s B.D. Gargleya & Co. and M/s S.S. Kothari Mehta & Co. as Statutory Auditors of the Company for the financiaI year 2010 -11.

10. COST AUDITORS

Pursuant to the directives issued by the Central Government, on audit of the cost records relating to Insecticides (Technical and Formulations) manufactured by the Company is required to be conducted by an auditor with the requisite qualifications as prescribed under section 233B of the Companies Act, 1956. Your Board has appointed M/s K.G, Goyal & Co., Cost Accountants, Jaipur, as Cost Auditors for the conduct of the audit of cost records of Insecticides TechnicaI and Formulations) for the year ending March 31, 2011 and necessary applications were filed through E-filing with Ministry of Corporate Affairs under section 233 B,

11. SECRETARIAL AUDIT

As desired by Securities anct Exchange Board of India (SEBIf, secretarial audit is being carried out at specified period by Practicing Company Secretary. The findings of the secretarial audit were entirely satisfactory,

12. INCREASE IN AUTHORISED SHARE CAPITAL

Pursuant to the resolution passed by the Members of the Company at the Extra ¦ Ordinary General Meeting dated October 12, 2009, the Company increased the Authorized share capital from Rs. 23 Cr. to Rs. 70 Cr, divided inlo 2 Cr Equity Shores of Rs. 10/-each and 50 Lacs Preference Shores of Rs, 100/-each.

13. ISSUE AND ALLOTMENT OF BONUS SHARES

The Board of Diredors of the Company in their meeting held on April 10, 2009 issued ond allotted the bonus equity shares in Ihe rotio of 1:1 lothe members of the Company as on April 3, 2009 (Record Dater The Bonus shores have been listed on Bombay Stock Exchange Limited w.e.f, Mayo, 2009. Consequent to Ihe Bonus issue the paid up equity capital of the Compony stood at Rs.7.09 Crore.

14. PREFERENTIAL ALLOTMENT OF COMPULSORILY CONVERTIBLE PREFERENCE SHARES AND OPTIONALLY CONVERTIBLE DEBENTURES

Your Directors wish lo inform you that at the Extra Ordinary General Meeting held on October 1 2, 2009, the members had approved issuance on a preferential basis:

a. 1030,000 non cumulative Compulsorily Convertible Preference Shares (CC PS) of face value of Rs. 100/- each 1o Standard Chartered Private Equity [Mauritius] Limited (SEBI Registered Fareign Institutional Investor];

b. 1030,000 non cumulative Compulsorily Convertible Preference Shores (CCPS) of face value of Rs. 100/- each to Standard Chartered Private Equity (Mauritius) II Limited (SEBI Registered Foreign Venture Capital Investor) and;

C. 2940,000 Optionally Convertible Debentures [OCD] of face value of Rs. 100/- each to Standard Chartered Investments and Loans (India) Limited (Nan Banking Finance Company)

The allotments were made in compliance with Chapter VII of SEBI (iCDR) Regulations, 2009. Pursuant to the said allotment on October 21, 2009, the Company received funds aggregating to Rs. 500 mn.

Mr, Rahul Raisurano has been appointed as Nominee Director in pursuance of the Shore Subscription and Share holders Agreement entered into with Standard Chartered Private Equity (Mauritius) II Ltd,

Mr Namit Arora has been appointed us observer an the Board of the Company in pursuance of the Debenture Subscription Agreement entered into with Standard Chartered Investments and Loans lndia) Limited .

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 217 (T) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors] Rules, 1988 are set out in the Annexure -A.

16. EMPLOYEES

During 2009-10, Your Company continued to have cordial relationships with all its employees at all units. The Company recognizes the importance of human capital and enrichment of professional and technical skills is an ongoing, process within the organization.

Your Directors racognize the teams valuable contribution and place an record their appreciation for the employees across the organization.

The total workforce of the Company stood at 997 as an March 31,1010.

Pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies [Disclosure oF Particulars of Employees) Rules, 1975, the names and other particulars of the employees. Form part of this report- However, as per the provisions of Section 219(1 }(b](iv} of the Companies Act, 1 956, the reports and the accounts are being sent to all shareholders, excluding the statement of particulars under section 217(2A). Any shareholders, interested in obtaining o copy of this statement may write to the Company Secretory at the registered office of the Company.

17. MANAGEMENT DISCUSSION AND ANALYSIS

A detailed report on the Management Discussion and Analysis is provided separately in this Annual Report.

18. CORPORATE GOVERNANCE

Your Company has been practicing the principle of good Corporate Governance over the years and it is a continuous and ongoing process. Your Company is committed to benchmark itself with global standards in all areas including appropriate standards for Good Corporate Governance. Towards this end, an effective Corporate Governance System has been put in place in the Company, which also ensures that the provisions, of Clause 49 of the Listing Agreement are duly complied with.

A detailed report On the Corporate Governance Code and practices of the Company along with a certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under clouse 49 of the Listing Agreement are given in a separate section in this Annual Report.

19. INTERNAL CONTROL SYSTEM

The Company s. internal control system comprises audit and compliance by imhouse internpl audit team supplement by internal audit checks from K5MN& Co., Chartered Accountants, G.D. Gongteya & Co., Chartered Accountants and R.V Chalam, Chartered Accountant who are the internal auditors ol the Company, The internal auditors independently evaluate the adequocy of internal controls and concurrency audit the majority of the transactions in value terms. Independence of tha audil and compliance is ensured by the diract report of imarnol audit division and i ntemaJ aud Hors to the Aud it Com m i Itee of the Board.

20. ACKNOWLEDGMENTS

Your Directors wish to express their grateful appreciation for the valuable support and cooperation received from bankers, business associates, leaders,, financial institutions. shareholders, various departments of Governments of Indict, Rajasthan,Gujarat and Jammu and Kashmir, (forming community and other stakeholders.

The Board places on record ill sincere appreciation towards the Companys valued customers in India and abroad for the support and confidence reposed by them in the organization and looks forward to the continuance of this mutually supportive relationship in future-

Your Directors also place on record, their appreciation for the contribution and hard work of employees of the Company and its subsidiaries at all levels, who, through their competence, hard work, solidarity, cooperation and support, have enabled the Company to achieve consistent growth.

On behalf of the Board of Directors

Sd/- Sd/-

[Salil Singhgl) (Mayank Singhal)

Chairman & Managing Director Managing Director & CEO

Place: Mumbai Date: May 17, 2010

 
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