P I Industries Ltd
Directors Reports
Dear Members,
Your Directors are pleased to present the 73rd Annual Report on the
business and operations of the Company together with the Audited Financial Statements for
the financial year ended March 31, 2020.
1. FINANCIAL HIGHLIGHTS
| Particulars |
FY 2019-20 |
FY 2018-19 |
| Revenue from Operations |
33,068 |
28,409 |
| Other Income |
479 |
600 |
| Profit Before Interest, Depreciation and Tax |
7,456 |
6,331 |
| Interest |
180 |
59 |
| Depreciation |
1,332 |
926 |
| Profit before Tax & Exceptional items |
5,944 |
5,346 |
| Less: Current Tax |
1,249 |
1,169 |
| Deferred Tax |
(272) |
(100) |
| Profit after Tax |
4,423 |
4,077 |
| Add: Other Comprehensive Income |
(560) |
77 |
| Total Comprehensive Income |
3,863 |
4,154 |
| Balance of retained earning brought forward
from previous year |
18,368 |
14,908 |
| - Profit for the year |
4,423 |
4,077 |
| - Other Comprehensive Income (OCI) for the
year |
(14) |
(1) |
| Appropriations:- |
| Final Dividend on Equity Shares 2018-19 |
207 |
345 |
| Interim Dividend on Equity Shares 2019-20 |
414 |
345 |
| Dividend Distribution Tax on Equity Shares |
127 |
142 |
| Transfer to General Reserve |
0 |
0 |
| Balance Profit / (-) Loss carried forward |
22,029 |
18,368 |
| Earnings Per Share - Basic ( in Rs ) |
32.04 |
29.56 |
| - Diluted (in Rs ) |
32.02 |
29.54 |
2. KEY HIGHLIGHTS
Your Company's Revenue from Operations for the year stood at Rs 33,068
Mn as compared to Rs 28,409 Mn last year registering a growth of 16.4 % on YoY basis. The
Operating Profit for the year was at Rs 6,977 Mn as compared to Rs 5,731 Mn last year i.e.
an increase of 21.7 % YoY. The Net Profit for the year on stand-alone basis stood at Rs
4,423 Mn as compared to Rs 4,077 Mn in the previous year i.e. a growth of 8.4 %YoY.
Your Company's Net Profit on a consolidated basis stood at Rs 4,566 Mn
during the year as compared to Rs 4,102 Mn in the previous year, a growth of 11.3 % YoY.
The Earnings per share (EPS) for the year stood at Rs 32.04 per share,
a growth of 8.40 % as compared to Rs 29.56 per share for the previous year.
Your Company invested Rs 229 Mn in fixed assets for expansion of
manufacturing and Research & Development capacities.
No amount was transferred to general reserves during the year.
Your Company also commissioned a new MPP plant at Jambusar during March
2020.
Acquisition of Isagro (Asia) Agrochemicals Pvt.
Ltd
Your Company completed the acquisition of Isagro (Asia) Agrochemicals
Private Ltd ('Isagro Asia') on December 27, 2019 by acquiring 100% stake from Isagro
S.p.A. and its affiliates. The total transaction value of acquisition is Rs 4432 Mn.
Isagro Asia has a 30 Acre manufacturing site including production plants for agrochemical
technical and formulations adjacent to your Company's existing manufacturing unit in
Panoli (Gujarat). Thus, the acquisition shall help the company to have additional
manufacturing capacities, synergy benefits of adjacent mfg. site, long term contract for
export of products to Isagro S.p.A. and also help the Company strengthen its position in
domestic market by leveraging the complementary product portfolio and pan India
distribution channel of the acquired entity.
Scheme of Amalgamation
As a part of the acquisition plan, Isagro Asia business will be
reorganised in such a way that domestic distribution business is demerged to Jivagro Ltd,
a wholly owned subsidiary of PI Industries Ltd ('PI') and remaining buisiness gets merged
with PI. Accordingly, the respective boards of Isagro Asia and PI in its meeting held on
February 12, 2020, considered and approved the Scheme of Amalgamation between lsagro Asia
and PI under the provisions of Sections 230 to 232 and other applicable provisions of the
Companies Act, 2013, read with applicable rules framed thereunder whereby all business
other than domestic distribution business of lsagro Asia shall be merged with your Company
upon receipt of the regulatory approvals from NCLT.
Domestic distribution business of lsagro Asia shall be demerged to
Jivagro Limited, a wholly owned subsidiary of your Company upon receipt of the regulatory
approvals from NCLT through a separate Scheme of Demerger as approved by their respective
Boards.
3. BUSINESS PERFORMANCE
During the year under review, your Company launched new products namely
AWKIRA & COSKO SC which received positive feedback from farmers & channels alike.
Inculcation of digital strategy to reach customer base efficiently & in time has added
an edge to the marketing strength & Company is poised to tackle the needs of changing
markets. In brand sales, growth was well supported by successful launch of Awkira along
with support from Vibrant, Cosko & Header. In the herbicide segment, Company's
flagship brand 'Nominee Gold' despite facing fierce competition from generics touched a
sale of 500 KL for the first time while grabbing a 70% growth share in overall Bispyribac
Sodium growth as Company continued to explore new geographies where it was not present.
Your Company is focused on introducing an advanced line-up of innovative products that
will complement the existing sales. Several high potential products are already in the
pipeline, the intent is to develop new brands, introduction of new innovative products,
strengthening of existing partnerships & forging of new ones, channel expansion and
focus on customer connect are some of the key strategic initiatives expected to drive the
growth in coming years. Revenues from domestic business were lower on account of deferment
of sales for the month of March, 2020 due to lockdown situation in the country. However,
your Company was able to gain those revenues in the month of April' 2020 & May' 2020
itself.
Your Company's exports grew ~ 33% as compared to previous year on
account of increase in volume growth of existing products, addition of new products as
well as increased operating efficiencies across the plants. Various new technology
absorption measures were also undertaken at plants. With a vision of Chemistry 4.0, your
Company initiated deployment of new analytical tools which aim at increased production and
asset efficiency. The Company continued building up the base of local vendors for raw
material thus reducing Company's dependency on Chinese market. Your Company is working
with innovator partners to introduce novel molecules globally. Commercialisation of 5 new
molecules during the year alongwith the enhanced utilization of multi-purpose plants at
Jambusar SEZ and commissioning of a new plant, will provide further growth impetus to
Company's export business in the coming years.
Consequent to the nationwide lockdown announced from March 25, 2020,
Company's operations were disrupted at is R&D facilities at Udaipur, manufacturing
facilities at Gujarat and sales depots across the country. This resulted in partial
deferment of Company's domestic and export revenues for the month of March to the next
quarter. The Company has since been able to resume operations at its various sites from
the beginning of April in a gradual manner and management believes that being into an
essential commodity, there is no significant impact of COVID-19 pandemic on the current
and future business condition of the Company, financial statements, liquidity position and
cash flow. Accordingly, no material adjustments are required in the financial statements.
Management continues to closely monitor the situation.
4. AWARDS AND RECOGNITIONS
Mr. Salil Singhal, Chairman Emeritus of your Company was conferred with
the 'Lifetime Achievement Award' at the CNBC- AWAAZ Rajasthan Ratna Awards ceremony
held at The Lalit Hotel, Jaipur. CNBC-AWAAZ team, with their in-depth research, identified
outstanding contributors from across the state. Mr. Singhal emerged a clear winner for
being instrumental in creating a positive image for the state with his exemplary work
across different sectors.
Besides this, your Company was also awarded ISO 27001:2013
Certification from British Standards Institute for implementation of information security
based on global standards and frameworks. The certification has been renewed for Udaipur
and Gurgaon locations and fresh Certifications issued for plants located at Jambusar and
Panoli were received during the year.
For its CSR initiatives, your Company won the 'Golden Peacock Award'
for Corporate Social Responsibility (GPACSR), in fertilizer and chemicals segment, at
the 14th International Conference on Corporate Social Responsibility held in Mumbai on
March 4, 2020.
5. RESEARCH & DEVELOPMENT (R&D)
During the year under review, the Research & Development team
successfully carried out synthesis of 44 new development molecules. Out of these, 13
molecules were scaled up successfully for their next stage of development and 5 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 10 projects in
order to identify cost improvement opportunities and then implement 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 is running a state-of-the-art integrated R&D set-up
for crop protection, with chemical discovery, laboratory and green house facilities for
biological testing and with farm resources for first field trials. This facility supports
various R&D projects, with focus on plant diseases, animal pests and weed control.
Scientifically, it involves chemical synthesis from discovery to scale-up, analytics for
structural elucidation, quantitation as well as preparative purification and separation,
molecular design and modelling, classical biological testing (in vitro lab, in vivo lab,
greenhouse and field), and supporting biochemical and molecular biology research -
everything connected by a high-end electronic data documentation and management system.
These activities are complemented by a knowledge management unit which is responsible for
literature and patent search, patenting and intellectual property management.
The research assignments involve global innovator partners. Your
Company's research strategy and implementation are well supported by a strong team
comprising of more than 300 research scientists having expertise and international
experience in chemistry, analytical techniques, biological and biochemical testing, mode
of action, tox and e-tox studies , IP management and basic / detailed process engineering.
Your Company continues to pursue cost leadership in which R&D team
played vital role on process innovations for several existing products to identify cost
improvement opportunities and at the same time maintaining highest standards of Quality,
Health, Safety and Environment (QHSE). The Company's R&D and manufacturing team are
constantly working together to reduce environmental load, enhance safety and reduce cost.
6. FINANCE
Your Company continued to focus on managing cash efficiently and
ensured that it has adequate liquidity and back up lines of credit. Net Cash from
operations for the year stood at Rs 6,438 Mn. Your Company follows a prudent financial
policy and aims at maintaining an optimum financial gearing. The Company's Debt to Equity
Ratio was almost 0.20 as on March 31, 2020.
During the year, CRISIL carried out the review of credit rating of
loans and based upon its assessment, reaffirmed the credit rating for long term loans at
AA/Positive whereas for short term loans, rating was reaffirmed at 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 financials.
7. DIVIDEND
During the year, the Board of Directors of the Company declared an
interim dividend of Rs 3/- per equity share in its Board Meeting held on February 12, 2020
on 13,81,07,993 equity shares of Rs 1/- each which was paid on March 02, 2020. The
Directors are pleased to recommend a final dividend of Rs 1/- per equity share of Rs 1/-
each, which if approved at the forthcoming Annual General Meeting, will be paid to all
those Equity Shareholders of the Company whose names appear in the Register of Members and
whose names appear as beneficial owners as per the beneficiary list furnished for the
purpose by National Securities Depository Limited and Central Depository Services (India)
Limited as on record date fixed for this purpose. The total dividend for the year would be
Rs 4/- per equity share carrying face value of Rs 1/- each.
DIVIDEND DISTRIBUTION POLICY
PI believes in maintaining a fair balance between cash retention and
dividend distribution. Cash retention is required to finance acquisitions and future
growth, and also as a mean to meet any unforeseen contingencies.
Pursuant to Regulation 43A of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("Listing Regulations”) the Company
has formulated its Dividend Distribution Policy which specifies the financial parameters,
internal and external factors that are to be considered by Board while declaring a
dividend. Dividend Distribution Policy is uploaded on the website of the Company which can
be accessed at https://www.piindustries.com/Media/Documents/
Dividend%20Policy%20(f).pdf
8. SUBSIDIARY, ASSOCIATES & JOINT VENTURES
As on March 31, 2020, your Company had five (5) Wholly-owned
Subsidiaries and two (2) Joint Venture Companies. In accordance with Section 129(3) of the
Companies Act, 2013, the Company has prepared a consolidated financial statement of the
Company and of all its subsidiary Companies.
The key highlights of these Subsidiaries and Joint-Venture Companies
are as under:
SUBSIDIARY COMPANIES
PI Life Science Research Ltd.
Your Company owns 100% stake in PI Life Science Research Ltd., which
carries on the business of R&D for developing new products. The Company posted a
profit of Rs 17.3 Mn earned on account of various R&D activities for developing new
products.
PI Japan Co. Ltd.
Your Company owns 100% stake in PI Japan Co. Ltd, a Company based in
Japan which takes care of business development activities of your Company in Japan. The
Company posted a net profit of JPY 3.3 Mn during the year ended March 31, 2020. 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 for the purpose
of consolidation.
PILL Finance and Investments Ltd.
Your Company owns 100% stake in PILL finance. The Company posted a
profit of Rs 1.1 Mn during the year ended March 31, 2020
Isagro (Asia) Agrochemicals Private Limited
Isagro Asia became a material wholly owned subsidiary of your Company
by virtue of acquisition of its 100% stake from Isagro S.p.A. and its affiliates on
December 27, 2019. The Company is engaged in business of agrochemicals. The total revenue
of Isagro Asia stood at Rs 687 Mn with net profit of Rs 137 Mn posted during the period
ended March 31, 2020 i.e. from Dec 27, 2019 till March 31, 2020.
Jivagro Limited
During the year, your Company incorporated another subsidiary named
Jivagro Ltd. on December 12, 2019 to carry out the business as manufacturer, importer,
exporter, wholesaler, retailer and dealer/distributor of agro chemicals, bio-stimulants,
bio control and other agri-input. It is proposed to hive of domestic distribution business
of lsagro Asia to Jivagro Limited upon receipt of regulatory apprpovals from NCLT as
required under the provisions of the Companies Act, 2013. During the period ended March
31, 2020, Company incurred an expense of Rs 0.3 Mn on account of incorporation expenses.
The Company has not yet commenced business operations.
JOINT VENTURES
Solinnos Agro Sciences Pvt. Ltd
Solinnos Agro Sciences Pvt Ltd ('Solinnos') is carrying out
registration activities for different products of Mitsui Chemicals Agro Inc, Japan,
('MCAG') in India. Your Company holds 49% stake in Solinnos through its subsidiary Company
namely PI Life Science Research Limited whereas remaining 51% stake is held by MCAG,
Japan. The Company posted a net profit of Rs 0.70 Mn during the year ended March 31, 2020.
PI Kumai Pvt. Ltd
PI Kumiai Pvt Ltd ('PI Kumiai') is mainly engaged in mfg. & trading
of agrochemicals in collaboration with Kumiai Chemical Industry Co. Ltd, Japan (' Kumiai')
who owns 50% stake in this joint-venture. Your Company holds remaining 50% equity in PI
Kumai through its subsidiary Company namely PI Life Science Research Ltd. The aforesaid
joint venture posted a profit of Rs 15.01 Mn during the year ended March 31, 2020.
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5
of the Companies (Accounts) Rules, 2014, a statement containing salient features of the
financial statements of the Subsidiaries and Associate Companies is given in form AOC-1.
Refer Annexure 'A' to this Report.
In accordance with the provisions of Section 136 of the Companies Act,
2013, the Annual Report of the Company, containing the Standalone and Consolidated
Financial Statements along with the Audited Annual Accounts of each Subsidiary Company
have been placed on the website of the Company i.e. www.piindustries.com.
9. RISK MANAGEMENT POLICY AND INTERNAL CONTROLS
Your Company has a well-defined risk management framework in place
which interalia, includes identification of risks, including cyber security and related
risks inherent to operations of the Company. Risk management process has been established
across the Company and is designed to identify, assess and frame a response to threats
that affect the achievement of its objectives. Further, it is embedded across all the
major functions and revolves around the goals and objectives of the organisation. Major
risks identified by the business and functions are systematically addressed through
mitigating actions on continuing basis. The Internal Audit Function regularly reviews
various risks and places the report before the Audit Committee of your Company from time
to time.
Pursuant to Regulation 21 of Listing Regulations, your Company has
constituted a Risk Management Committee of the Board comprising of 6 members, majority of
which are Directors including 3 Executive directors, one Independent Director and 2
Executives of the Company. The Committee is authorised to monitor and review risk
management plan apart from reviewing and recommending the modification to the Risk
Management Policy, if any.
The Board has adopted policies and procedures for ensuring orderly and
efficient conduct of its business, including adherence to the Company's policies,
safeguarding of its assets, prevention and detection of frauds and errors, accuracy and
completeness of the accounting records, and timely preparation of reliable financial
disclosures. Internal Control Systems are commensurate with the nature and size of
Company's business and in view of the complexity of its business operations, these are
designed to meet the challenges. The control system comprises of continuous audit and
compliance by in-house internal audit team supplemented by internal audit checks by M/s
KPMG India LLP., Internal Auditors of the Company. M/s PKF Sridhar & Santhanam LLP,
have been engaged as the Depot Auditors to perform the internal audit function, assess the
internal controls and statutory compliances in various areas and also provide suggestions
for improvement.
The Internal Auditors independently evaluate the adequacy of internal
controls and concurrently audit the financial transactions and review the various business
processes. Internal Audit reports are periodically placed before the Audit Committee of
the Board. Independence of internal auditors is ensured through direct reporting to Audit
Committee.
10. INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
Your Company has in place adequate internal financial controls with
reference to the Financial Statements commensurate with the size, scale and complexity of
its operations. The Company has in place an adequate Internal Financial Controls, with
reference to financial statements. The Company has identified and documented all key
internal financial controls as part of its Internal Financial Control reporting framework.
The Company has laid down well defined policies and procedures for all critical processes
across Company's plant, offices wherein financial transactions are undertaken. The
policies and procedures cover the key risks and controls in all the processes identified
to respective process owner. In addition, the Company has a well-defined financial
delegation of authority which ensures approval of financial transaction by appropriate
personnel. The Company uses SAP ERP to process financial transactions and maintain its
books of accounts to ensure its adequacy, integrity and reliability. The Company has also
deployed control tool to monitor evaluation of same for operating effectiveness and review
process is carried out independently by the Internal Auditors.
Accordingly, the Board is of the opinion that the Company's internal
financial controls were adequate and effective as on March 31, 2020.
11. RELATED PARTY TRANSACTIONS
All arrangements / transactions entered into by the Company with its
related parties during the year were in the ordinary course of business and on an arm's
length basis. During the year, the Company has not entered into any arrangement /
transaction with related parties which could be considered material in accordance with the
Company's Policy on Related Party Transactions read with the Listing Regulations and
accordingly, the disclosure of Related Party Transactions in Form AOC - 2 is not
applicable. However, names of Related Parties and details of transactions with them have
been included in Note no 35 of the financial statements.
Prior omnibus approval of Audit Committee 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 for its review on a quarterly basis,
specifying the nature, value and terms and conditions of the transactions.
The Policy on Materiality of and Dealing with Related Party
Transactions as approved by the Board is uploaded on the Company's website and can be
accessed
https://www.piindustries.com/Media/Documents/Related%20
Party%20Transactions%20Policy(r).pdf
12. AUDITORS
Statutory Auditors and Auditor's Report
The shareholders of the Company at 70th AGM held on September 06, 2017
had appointed M/s. Price Waterhouse, Chartered Accountants, LLP, (ICAI Registration
No-012754N/N500016), as Statutory Auditors of the Company for a term of 5 years and
accordingly they hold their office till the conclusion of Annual General Meeting to be
held in 2022. The Auditors' Report is unmodified i.e. it does not contain any
qualification, reservation or adverse remark or disclaimer.
Cost Auditor
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 ended March 31, 2020.
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.
As per Section 148 of the Companies Act, 2013, read with the Companies
(Cost Records and Audit) Rules, 2014, your Company is required to maintain cost records
and accordingly, such accounts and records are maintained.
Secretarial Auditor
The Board had appointed Mr. R.S. Bhatia (CP No.2514), practicing
Company Secretary, to carry out Secretarial Audit in accordance with the provisions of
Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, for the financial year ended March 31, 2020. The
Secretarial Audit Report for the financial year ended March 31, 2020 has been obtained and
does not contain any qualification, which requires any comments from the Board. The
Secretarial Audit Report for financial year ended March 31, 2020 is annexed to this report
as Annexure 'B'.
13. PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS
The details of loans & guarantees given and investments made
covered under the provisions of section 186 of the Companies Act, 2013 are mentioned in
Note No. 7 to the financial statements.
14. DEPOSITS
Your Company has not accepted any public deposits during the financial
year 2019-20 and no amount of principal or interest was outstanding as on March 31, 2020.
15. TRANSFER OF UNCLAIMED DIVIDEND AND SHARES TO
INVESTOR EDUCATION AND PROTECTION FUND
During the year, Company had transferred an amount of Rs 2,12,682/-
towards unclaimed dividend pending for more than seven years. Pursuant to the provisions
of Investor Education and Protection Fund (Uploading of information regarding unpaid and
unclaimed amounts lying with Companies) Rules, 2012, the Company has uploaded the details
of unclaimed amounts lying with the Company as on the date of last Annual General Meeting
held on September 09, 2019 on the Company's website and same is also available on the on
the website of the Ministry of Corporate Affairs. The details can be viewed at Company's
website at following link: https://www.piindustries.com/investor-relations/
Investor-Information/Unclaimed-Dividend
Pursuant to the provisions of Sec 124 of the Companies Act, 2013 read
with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has
transferred 11,010 equity shares pertaining to shareholders in respect of which dividend
remained unclaimed for a period of seven consecutive years to demat account of IEPF
authority by way of corporate action through NSDL. The shareholders can claim their shares
by making an application in form IEPF-5 online with IEPF authority. Mr. Naresh Kapoor,
Company Secretary acts as a Nodal Officer of the Company for IEPF matters.
16. BOARD AND COMMITTEES Board of Directors
Your Company is managed and controlled by a Board comprising an optimum
blend of Executive and Non-Executive Professional Directors and Independent Directors. The
Chairman of the Board is a Non-Executive Independent Director. As on March 31, 2020, the
Board of Directors consists of Eight (8) Directors consisting of three (3) Executive
Directors including a Vice Chairman & Managing Director, Managing Director & Chief
Executive Officer and a Wholetime Director apart from five (5) Non-Executive Directors,
out of which four (4) are Independent Directors including one (1) Woman Independent
Director. The composition of the Board is in conformity with Regulation 17 of the SEBI
(Listing Obligations & Disclosure Requirements) Regulations, 2015 and the relevant
provisions of the Companies Act, 2013. The Board members possess requisite qualifications
and experience in general corporate management, strategy, finance, banking, taxation, risk
management, merger & acquisitions, human capital & compensation, technology, legal
and regulatory fields which enable them to contribute effectively to the Company in their
capacity as Directors of the Company.
Mr. Ravi Narain ceases to be the Non-Executive Independent Director of
the Company w.e.f. May 01, 2019 consequent upon the order passed by SEBI in the matter of
National Stock Exchange Ltd on April 30, 2019. Mr. Ravi Narain has also confirmed that his
resignation has nothing to do with company and is on account of SEBI order which has also
been informed to Stock Exchange by the company. The Board places on record its
appreciation for the services rendered by Mr. Ravi Narain during his association with the
Board of the Company.
The Board at its meeting held on 4th June 2020, pursuant to the
recommendation of Nomination & Remuneration Committee and taking into account the
report of performance evaluation, reappointed Dr. T.S Balganesh (DIN 00648534) as an
Independent Director for a second consecutive term of 5 years w.e.f September 05, 2020.
The Board opines that Dr. T.S. Balganesh possesses the requisite expertise and experience
including the proficiency. The Board recommends his re-appointment for the approval of the
members at the forthcoming Annual General Meeting.
In accordance with the provisions of the Companies Act, 2013 and
Articles of Association of the Company, Mr. Arvind Singhal (DIN: 00092425) retires by
rotation at the forthcoming Annual general Meeting and being eligible, offers himself for
re-appointment. The Board recommends his re-appointment for the approval of the members at
the forthcoming Annual General Meeting.
Declaration(s) from all Independent Directors have been received
confirming that they meet the criteria of independence. Further, details as required under
the Companies Act, 2013 and Listing Regulations, 2015 for directors seeking appointment/
re-appointment are furnished in the notice of annual general meeting. The aforesaid
appointments are subject to approval of shareholders at the ensuing annual general
meeting.
Changes in Key Managerial Personnel
On the basis of the recommendation of the Nomination & Remuneration
Committee and Board of Directors, shareholders in its last AGM held on September 09, 2019
approved the elevation in position held by Mr. Mayank Singhal from Managing Director &
Chief Executive Officer to Vice Chairman & Managing Director w.e.f. September 09,
2019.
Further, in order to strengthen the Board, Dr. Raman Ramachandran was
inducted on board as a Whole-time Director w.e.f. July 01, 2019 and was elevated to the
position of Managing Director and Chief Executive Officer w.e.f. September 09, 2019 which
was duly approved by shareholders in its meeting held on September 09, 2019. There has
been no change in any other Key Managerial Personnel of the Company during the year.
Evaluation of the Board's Performance
In compliance with the provisions of Companies Act, 2013 and Regulation
17(10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
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 criteria 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 subsequent assessment by the Board. A member of
the Board does not participate in the discussion of his/ her evaluation.
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 under review, seven (7) Board Meetings were held on May 17,
2019, June 17, 2019, July 24, 2019, August 09, 2019, September 09, 2019, October 23, 2019
and February 12, 2020. The details of the Board meetings and attendance of the Directors
are provided in the Corporate Governance Report.
Composition of Committees Audit Committee
As on March 31, 2020, Audit Committee comprises of 3 members with Mr.
Narayan K. Seshadri as the Chairman, Mr. Rajnish Sarna and Ms. Ramni Nirula as members.
Further, details on the Committee reference, meetings held are given in the Corporate
Governance Report.
Recommendations of Audit Committee
There have been no instances during the year when recommendations of
the Audit Committee were not accepted by the Board.
Stakeholder's Relationship Committee
The Stakeholder's Relationship Committee comprises of 3 members with
Mr. Pravin K. Laheri, Independent Director as the Chairman, Mr. Mayank Singhal and Mr.
Rajnish Sarna as the members. Further details on the Committee reference, meetings held
are given in the Corporate Governance Report.
A detailed update on the Board, its composition, detailed charter
including terms and reference of various Board Committees, number of Board and Committee
meetings held during FY 2019-20 and attendance of the Directors at each meeting is
provided in the Report on Corporate Governance, which forms part of this 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 for the year ended March
31, 2020, the applicable accounting standards had been followed;
(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 as at March 31, 2020
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 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.
17. ANNUAL RETURN
Pursuant to Sec 92(3) of the Companies Act, 2013 read with Rule 12 of
the Companies (Management and Administration) Rules, 2014, the copy of Annual Return can
be accessed at Company's website at https://www.piindustries.com/investor-relations/
Investor-Information/annual-return
18. EMPLOYEES
Remuneration policy of the Company
The Remuneration policy of your 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
In support of the high growth strategies of Company's business, your
Company added 921 employees (gross) to its permanent workforce during the year across all
levels. A revamped Internal Job Posting process and effective use of social media helped
your Company to complete its hiring programme effectively and efficiently. In addition to
psychometric tests, your Company introduced competency-based assessments for all senior
level hires.
In keeping with its compensation benchmarking policy, your Company
conducted a wide-ranging compensation survey and made market corrections where necessary
with view to retaining high-performing talent as well as to ensure that pay levels and
structure are competitive with market.
Recognising the importance of identifying and developing high-
performers as well as employees with potential for fast-track growth, your Company
initiated a comprehensive Talent Management programme - Project Udbhav. This
project covers all managerial and leadership levels in the Company and consists of:
- Evaluating employees against our behavioural and leadership
competencies using a battery of proven tests
- Developing and implementing individual development plans for each
employee through a mix of experiential learning, executive education, cross-functional
teaming and coaching and mentoring
- Developing differentiated career paths for employees based on their
performance and potential
- Establish a structured process for Talent Review to monitor the
progress and development of employees in line with business needs
- Use the outcomes of the assessments to develop succession plans for
critical role
- Integrate the outcomes of the above with career decisions
As on March 31, 2020, 108 employees had completed their assessments and
are in the process of working on their development plans.
Responding to employees' feedback about the need for visibility as to
career paths, a new and holistic Career Management Framework was launched. This framework
sets out in detail the various career options available to employees in the different
functions at all levels and defines the capabilities and competencies required for an
employee to progress their career in multiple ways.
Employee Engagement continues to be in focus. A 3-point survey was
conducted to elicit employee feedback. A digital platform (MYIdea) was developed for
employees to share ideas and suggestions for improvement for sharing ideas. These have
been welcome by employees and have resulted in their enthusiastic response. Initiatives
like Stepthalon, Dental Camp, Zumba at Udaipur, International Yoga Day have been the
highlights of attracting employees and bringing them closer to the culture of the
organization.
Continuous improvements of HR Systems and Processes were made during
the year, based on user feedback. Besides making the system user friendly, these
improvements have also strengthened system controls. A comprehensive HR SOP has now been
developed to act as a standalone document for process reference and compliance.
Total permanent workforce of the Company stood at 2749 as on March 31,
2020.
Policy on Prevention, Prohibition and Redressal of
Sexual Harassment at Workplace
Your Company has a zero tolerance for any abuse against Women at
Workplace. Policy 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". The Company has constituted
Internal Complaints Committee (ICC) known as Prevention of Sexual Harassment (POSH)
Committee to enquire in to complaints of Sexual Harassment and recommend appropriate
action. The Company has not received any complaint of sexual harassment during the
financial year 2019-20.
Particulars of Employees and related disclosures
The information required under Section 197(12) of the Companies Act,
2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 forms part of this Report and annexed as Annexure 'C'.
However, as per first proviso to Section 136(1) of the Act and second proviso of Rule 5(2)
of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Report and Financial Statements are being sent to the Members of the Company excluding the
statement of particulars of employees under Rule 5(2). However, they are available for
inspection during business hours upto the date of the next annual general meeting at the
registered office of the Company. Any member interested in obtaining a copy of the said
statement may write to the Company Secretary at the Registered Office of the Company.
Your Directors place on record their appreciation of the valuable
contribution made by the employees of your Company.
Employee Stock Option Plan / Scheme
Your Company discontinued the grant of stock options under PII-ESOP
Scheme, 2010 in the year 2017 as per the recommendation(s) of Nomination &
Remuneration Committee of the Board. However, the stock options already granted vest as
per the terms and conditions contained in the grant letter. As per the Company's ESOP
scheme, options vest after a lock in period of one (1) year from the date of grant in a
graded manner over the vesting period of four (4) years. The exercise price of stock
options granted have been arrived by giving discount to the closing market price of the
equity share on National Stock Exchange India Limited one day prior to the date of grant
of option. Voting rights on the equity shares issued to employees under the ESOP Scheme
are either exercised by them or through their appointed proxy. No employee has been issued
stock options equal to or exceeding 1% of the issued capital of the Company at the time of
grant. Details of options as required under SEBI regulations is given in Annexure 'D'.
19. VIGIL MECHANISM - WHISTLE BLOWER POLICY
Your Company has an established vigil mechanism for Directors and
employees to report their genuine concerns, as approved by the Board on the recommendation
of the Audit Committee. The Whistle Blower Policy of the Company is formulated and
uploaded on the Company's website at the following https://www.piindustries.com/Media/Documents/Whistle%20
Blower%20Policy(r).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 have been denied
access to the Audit Committee.
20. 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 'E' attached to this report.
21. CORPORATE SOCIAL RESPONSIBILITY
("CSR") AND RELATED MATTERS
In accordance with the requirements of Section 135 of the Companies
Act, 2013, your Company has a CSR Committee comprising four members with Mr. Pravin K.
Laheri as Chairman, Mr. Mayank Singhal, Mr. Rajnish Sarna and Ms. Ramni Nirula as Members.
Your Company also has formulated a Corporate Social Responsibility Policy (CSR Policy)
which is available on the website of the Company at
https://www.piindustries.com/sustainability/CSR/CSR-Policy
Your Company carries out its CSR activities through PI Foundation, a
Trust set up by PI Industries Ltd. During the year, PI Foundation undertook several CSR
initiatives under the following few categories:
- Water
- Education and Talent Nurturing
- Healthcare
- Hygiene & Sanitation
- Livelihood Enhancement
- Sustainable Agriculture
- Skill Development
- Employee Engagement through CSR
During the financial year 2019-20, the Company has contributed an
amount of Rs 102.3 Mn to PI Foundation, aggregating to 2% of its average net profits for
preceding 3 financial years. PI Foundation has spent an amount of Rs 84.8 Mn. PI
foundation has not been able to spend the entire money as projects are ongoing projects
spread over 2-3 years. Various CSR initiatives taken during COVID-19 included support to
the local administration in fast and efficient sanitization of large areas by deploying
services of hi-tech Japanese farm spray machines free of cost in nearly 50+ locations so
far, spanning across the states of Andhra Pradesh, Telangana, Rajasthan, Gujarat, Haryana,
Delhi, Punjab. State govt. has appreciated the efforts of PI in providing these spray
machines to carry out sanitization drive at large scale.
• Distribution of over 10,000 food packets so far to migrants and
daily-wage labourers.
• Manufacture and distribution of ~45000 sanitizers so far in the
neighbouring communities around PI's operations.
• Using mobile Medical Units 24x7 in 64 villages of Jambusar,
Gujarat spreading awareness on the necessity of social distancing, hand-sanitization,
conducing a thermal screening and distributing masks and other kits to villagers.
• Support to contract workers by continuing to pay their wages and
arrange food and basic amenities for them during lockdown while ensuring COVID-19
prevention and containment protocol
The details of CSR activities undertaken by the Company are highlighted
in the report format provided under the Companies (Corporate Social Responsibility Policy)
Rules, 2014 in Annexure 'F' which is attached to this report.
22. CORPORATE GOVERNANCE
Your Company takes pride in 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 Regulation 34 of SEBI (LODR) Regulations, 2015 forms part of the report.
23. MANAGEMENT DISCUSSION AND ANALYSIS
A detailed report on the Management Discussion and Analysis is provided
separately forms part of the Annual Report.
24. BUSINESS RESPONSIBILITY REPORT
A separate section of Business Responsibility describing the
initiatives taken by the Company from an environmental, social and governance perspective,
forms part of this Annual Report as required under Regulation 34(2)(f) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
25. SHARE CAPITAL
During the year, your Company had issued 77,342 Equity Shares of Rs 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 its subsidiaries upon exercise of stock options from time to time under the aforesaid
Scheme. As a result of this allotment, the paid-up equity share capital of your Company
increased to Rs 138.1 Mn (comprising of 13,81,07,993 Equity Shares of '1/- each as on
March 31, 2020) from Rs 138.0 Mn (comprising of 13,80,30,651 Equity Shares of '1/- each as
on March 31, 2019).
Further, your Company re-classified 50,00,000 preference shares of
'100/- each into 50,00,00,000 Equity Shares of '1/- each by seeking approval from
shareholders in its last Annual General Meeting held on September 09, 2019. The Authorized
Share Capital of the Company is '72,30,00,000/- (Rupees Seventy-Two Crores Thirty Lacs
only) divided in to 72,30,00,000 (Seventy-two crores thirty lacs) Equity Shares of '1/-
(Rupee one only) each.
26. CHANGES IN MEMORANDUM & ARTICLES OF
ASSOCIATION
During the year, Company carried:
a) the alteration of the object's clause by way addition of following
new objects i.e.
(i) to deal in research & development, testing, prototyping,
manufacture, import, export , consulting and sale of energy storage cells, devices for
different application areas and also carrying out SEZ activities.
(ii) Buy, Sale or lease industrial land, either alone or in consortium
with a real estate development group, for development and operation of a Special Economic
Zones, necessary infrastructure and utilities for industrial usage.
b) new set of Articles of Association was adopted and substituted in
place of the existing Articles of Association of the Company in compliance with the
applicable provisions of Companies Act, 2013.
The above changes were duly approved by shareholders in Annual General
Meeting held on September 09, 2019 and same have also been taken on record by Registrar of
Companies, Jaipur.
27. QIP
The Board in its meeting held on February 12, 2020 approved the
proposal for raising of funds through a qualified institutions placement ("QIP")
to eligible investors for an aggregate amount not exceeding Rs 20,000 Mn by issue of
equity shares and/or other eligible securities, at such price or prices as may be
permissible under applicable law, in one or more tranches, in accordance with the
applicable laws, subject to receipt of necessary approvals from shareholders and
regulators, wherever required. The proposal was placed before shareholders seeking their
approval by way of special resolution vide postal ballot, results of which were declared
on March 24, 2020. Your Company is pleased to inform that aforesaid proposal has been
approved by shareholders by requisite majority. Due to unprecedented outbreak of COVID-19
pandemic situation which resulted in economic slowdown and global stock market turmoil,
Company has deferred the launch of QIP to July, 2020, subject to market conditions.
28. GENERAL
Your 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 operations in
future.
Further, 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.
29. ACKNOWLEDGEMENTS
Your 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, 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 alongwith its joint venture partners for
the support and confidence reposed by them in the organization and looks forward to the
continuance of this supportive relationship in the future.
Your Directors proudly acknowledge 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
Director |
|
For PI Industries Ltd. |
|
Sd/- |
|
Narayan K. Seshadri |
| Place: Gurugram |
Chairman |
| Date: 4th June' 20 |
DIN 00053563 |
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