Board report
Dear Members,
Your Directors are pleased to present the 77th Annual Report on the business and operations of the Company ('PI') together with the Audited Financial Statements for the financial year ended March 31, 2024
1. FINANCIAL HIGHLIGHTS (STANDALONE) (in ' million)
2. KEY HIGHLIGHTS
The Company's Revenue from Operations for the year ended March 31, 2024, on a standalone basis stood at ^71,454 Million as compared to ^62,704 Million in the previous year registering a growth of 13.95% on YoY basis. The Operating Profit for the year was at ^20,257 Million as compared to ^15,200 Million in the previous year i.e., an increase of 33.27% YoY. The Net Profit for the year on standalone basis stood at ^17,307 Million as compared to ^12,114 Million in the previous year i.e., a growth of 42.87% YoY.
The Company's Revenue from Operations for the year ended as on March 31, 2024, on consolidated basis stood at ^76,658 Million as compared to ^64,920 Million in the previous year, registering a growth of 18.08% on YoY basis. The Company's Net Profit for the year ended March 31, 2024, on consolidated basis stood at ^16,815 Million during the year as compared to ^12,295 Million in the previous year, a growth of 36.76% YoY.
The Earnings Per Share (EPS) for the year stood at ^110.85 per share, shows a growth of 36.75% as compared to ^81.06 per share for the previous year.
The Company invested ^5,851 Million in fixed assets for the expansion of manufacturing and Research & Development capacities.
No amount was transferred to general reserves during the year.
3. STANDALONE AND CONSOLIDATED FINANCIAL STATEMENTS
The financial statements of the Company for FY 2023-24, on a standalone and consolidated basis, have been prepared in compliance with the Companies Act, 2013 ('the Act') applicable Accounting Standards and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI Listing Regulations, 2015') and amendments thereto and are prepared in accordance with Schedule III of the Act. The consolidated financial statements incorporate the audited financial statements of the subsidiaries and joint ventures of the Company.
4. BUSINESS PERFORMANCE
During the year under review, your Company launched six new products namely Eketsu, Claret, Aminogrow, Kadett, PB Knot, PIILIN. These product launches demonstrate your Company's commitment to innovation and growth.
• Eketsu is a first-of-its-kind three-way Rice Herbicide in India. It combines three proven chemistries to deliver excellent postemergence broad-spectrum weed control in rice fields. In the very first year of its launch, Eketsu gained significant acceptance among rice farmers across diverse rice-growing regions.
• Claret is a unique combination of systemic and contact insecticide for effective control of BPH (Brown Plant Hopper) in paddy fields. Its dual action provides both quick knockdown effect and long-lasting control over BPH. The product has received positive feedback from user farmers due to its effectiveness in managing this pest.
• Aminogrow is a potent bio stimulant enriched with essential aminoamides and peptides, which are building blocks for plant proteins. It is manufactured using FED Technology, which helps in obtaining L - form of amino acids.
• Kadett is a recent addition to the seed treatment segment for soybeans and groundnuts. It provides farmers with a way to protect their valuable seeds from diseases while also promoting robust root growth and successful crop establishment.
• PB Knot is an innovative mating disruption technology for effective management of Pink Ball Worm (PBW) in Cotton. It's an alternate method of pest control and is best suited for Integrated Pest Management (IPM) beside being safe to beneficial insects and environment.
• PIILIN is a bio-origin fungicide that offers excellent control against powdery mildew disease in chilli and grape crops. Its novel mode of action is highly effective for disease management, and it stands out as the safest alternative for Indian farmers due to its MRL (Maximum Residue Level) exemption.
The delayed and below-normal monsoon had widespread effects on Kharif sowing across the country, leading to reduced water levels in reservoir across southern regions. Consequently, both the Kharif and Rabi cropping seasons were impacted. In addition to climatic factors, the crop protection industry faced significant challenges due to higher trade inventories and sharp price corrections. However, strategic measures such as new product launches and initiatives played a crucial role in minimizing losses.
The successful launch of Eketsu bolstered PI's presence in the rice herbicide segment, offering a comprehensive solution for weed control. This achievement not only instilled confidence among farmers but also reinforced PI's commitment to delivering effective solutions. Meanwhile, Brofreya continued its growth journey, building on the momentum from its previous successful launch. Brofreya expanded beyond its initial focus on chilli to encompass other horticultural crops, contributing significantly to the overall growth plan.
PI's crop-specific approach tailored for key crops strengthened its market presence, offering optimal solutions for end-users. This strategic approach not only boosted business in chilli and other horticultural crops but also maintained stability in the rice crop segment.
Moreover, PI's proactive initiatives and go-to-market approach for AWKIRA ensured the Company's leadership position in wheat herbicide market, even in the face of intense competition from generic products. These combined efforts exemplified the Company's resilience and ability to adapt to demanding market dynamics.
During the period under review, your Company has made significant progress in digitalization across the value chain, building multiple new systems to enhance customer centricity, improving throughput & productivity, improving product quality, enhancing safe operations, enhancing speed and quality of molecule discovery using advanced analytics, improving decision making through advanced analytics and strengthening our information security posture. PI also build strong foundation of Digital infrastructure and systems for our new 'PI Health Sciences Limited' business. Some of the key initiatives have been in the setting up Quantum Mechanics Lab and use of AI & Modelling to aid Research and Discovery, new platform for Product development of the AgChem Brands, implementation of SAP EHS and AI based Video analytics for early warning of potential safety incidents, analytics to improve yield and Elab Notebook Implementation for PIHS business. PI has also embarked on organization wide Digital Transformation and Analytics program. Additionally, the Company has made significant investment in the information security posture, ensuring that the systems are protected against cyber threats and data breaches. It has implemented several security measures, such as multi-factor authentication, mobile device management, data leak prevention, 24 X 7 Security Operations Center (SOC), and regular vulnerability assessments, to keep its systems and data safe. Overall, the digital initiatives have helped to enhance the operational efficiency, drive innovation, and improve the overall competitiveness in the marketplace.
The Company successfully commercialized 6 new molecules during the year, including Electronic and Performance Chemicals, marking the Company's foray into this niche specialized field offering promising potential in the future. Continuing on its thrust in investing for the future and ramping up its capabilities, the Company has operationalized "Bio-Technology platform", "Vapour Phase Fluorination", & "VLE technology" at R&D and Scale up. The Company successfully tested new technology "Helical cone dryer" for effective drying of material with better occupancy and performance over conventional RVD.
The Company continues to explore and adopt new innovations in chemistry, process and engineering technologies, and is working with innovator partners to introduce novel molecules globally and continue to expand its customer base.
Various new technology absorption measures were also undertaken at plants in line with Industry 4.0 best practices and digitalization of manufacturing processes. The Company expand usage of electronic notebooks as an analytical tool with an aim to digitalize the process development data and use the tool to fetch information from archive and other data analytics. The Company continues to work towards sustainable manufacturing for carbon footprint reduction by implementing use of clean fuel, like LNG, increasing share of renewable energy by 5.0% in total energy through sourcing of solar and Hybrid power and improvement in solvent recoveries by 1.6%
to reduce GHG emission. The Company has implemented concrete measures for reduction of fresh water usage by implementation of RO Plant to recycle the water by 3.4% and through continuous efforts of waste water reduction by 14.0%.
In a year marked with geo-political uncertainties, the Company has further reduced dependency on single sources, in line with its commitment to de-risk the supply chain and ensure supply sustainability.
The Company's exports grew 25% during FY24 as compared to the previous year due to 19% growth in Agchem Exports over a high base mainly on account of scale-up of existing products and introduction of 6 new products. Growth comprises volume growth of ~18% and ~1% from price, currency and favourable product mix. 70%+ of revenue growth came from new products. Newly acquired Pharma1 contributed to remaining Exports revenue of Rs. 3,149 million i.e. ~6% of total Exports revenue growth.
5. AWARDS AND RECOGNITIONS
• The Company was featured in the S&P Global Sustainability Yearbook 2024, the only Indian Company to feature from the Custom Synthesis and Manufacturing (CSM) segment with 95th percentile Industry ranking.
• PI continues to be in the Top Quintile in EcoVadis Sustainability Rating for 2023 with 98th percentile Industry ranking.
• The Company received the Global CSR Excellence & Leadership
Award in "Community Development" category for its commitment and relentless efforts to empower communities around its operations and beyond aligned to our core purpose of "Reimagining a healthier planet". The award was received by Ms. Poonam Sharma, Head - CSR & Sustainability, PI Industries Ltd. The Company and its Foundation continue to strive to bring sustainable and positive impact in the lives of people and contribute to the country's Sustainable Development Goals.
• PI, Udaipur site won the Apex India Safety Excellence Gold Award 2023 in the R&D sector at the 8th Apex India Occupational Health & Safety Awards 2023 - a testament to the Company's dedication to excellence in EHS practices and steadfast commitment to workplace safety & environmental sustainability.
• PI, Udaipur also received the Karkhana Suraksha Puraskar
under the category of Large-Scale Industries for its dedicated efforts in upholding the highest safety standards. The Award was conferred during the 53rd National Safety Week by the Factory & Boiler Inspection Department, Govt. of Rajasthan.
• The Company has been recognized as one of the Top 25 Safest Workplaces in India by KelpHR PoSH Awards 2023. Commitment to safety is measured through assessments of different ICC functionality, complaint handling, DE&I vision, capacity building and unique PoSH communications.
• In a pioneering approach towards ensuring safe and user- friendly packaging in the agriculture sector, Nominee Gold was the Worldstar Winner 2024 at the prestigious Worldstar Global Packaging Awards for its breakthrough packaging design.
• PI, Bharuch received the Golden Peacock National Quality Award 2024 from the Institute of Directors for achieving the highest standards in Quality & Exemplary Processes.
• The Company's Legal Affairs Team was recognized as one of the leading in-house teams by the prestigious India Business Law Journal's (IBLJ) In-House Counsel Awards 2023-24 (Category: Agriculture) for their dedication and commitment in providing top-notch legal support to the organization.
• Mr. Mayank Singhal, Vice Chairperson & Managing Director of the Company was honored as India's Best Trailblazer CEO in the Agro Chemical sector at the Corporate Leadership Awards 2024
- a testament to his visionary leadership, strategic acumen and far-reaching contributions to the corporate sector.
• Dun & Bradstreet recognized the Company as India's Top Value Creator 2023 in Agro Chemicals for fostering a culture of excellence, innovation and responsible business and to the sustainable development of the agrochemical sector.
6. RESEARCH & DEVELOPMENT (R&D)
During the year under review, various departments of R&D have been integrated into the new Corporate Function "PI Research & Development", to realize synergies, rationalize processes and make a broader and more efficient use of existing resources, capabilities and knowledge.
The process R&D team was actively engaged in more than 60 projects in the areas of agrochemistry, electronic chemicals and life cycle management. Literature search & feasibility analysis were carried out for 35 projects that are targeting external customers. For 25 of these projects, representative samples have been prepared and submitted to various customers for evaluation and validation. Process demonstration for 13 projects has been completed and 7 projects were taken up on kilo lab and pilot plant scale. 5 projects have been commercialized.
For one of the aforesaid projects, an innovative process based on flow-chemistry, was successfully implemented on a commercial scale, thereby significantly improving the process efficiency for large scale manufacturing. This approach will also result in a reduced ESG-related footprint, exemplifying opportunities to adopt this technology for further projects.
As exemplified in the case of flow-chemistry based approaches, also other continuously operating reaction technologies are under exploration, as gas phase fluorination, chlorination, and oxidation. Another focus will be put on novel mechanochemical methodologies to reduce or even avoid the use of solvents. Generally, the mentioned technologies should extend the backward integration into key intermediates and building blocks.
A new Biotechnology function has been built to develop enzymes as biocatalysts for chemical transformations, targeting the development of greener and safer processes from an environmental point of view, and extending this technology platform to entire PI. Included into that, will be the development of biotechnology-based processes for waste / wastewater treatment.
The product innovation team is running a state-of-the-art integrated R&D set-up for crop protection, with chemical discovery, laboratory, and greenhouse facilities directed to biological testing and profiling, and with farm resources for first field trials. This set-up supports various R&D projects, with a focus on plant diseases, animal pests and weed control. In more detail, 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 evaluation (in vitro lab, in vivo lab, greenhouse, and early field testing) supported by biochemical and molecular biology research, and by formulation development. All these activities are connected by an integrated high-end electronic data documentation and management system.
A Knowledge Management function, responsible for literature and patent search, competitor and customer intelligence, patent filing and prosecution, and intellectual property management, is complementing the science and technology-related activities across entire R&D, offering its services to various PI business groups and to corporate functions. The research assignments are connected by an integrated high-end electronic data documentation and management system.
The Company's R&D strategy and its implementation are well supported by a strong team of more than 700 research scientists
with international experience, having state-of-the-art expertise in chemistry, analytical techniques, biological and biochemical sciences, mode of action exploration, studies related to human and environmental safety, IP management and basic and detailed process engineering with focus on process efficiency and safety.
The discovery approach is including specific external national and international cooperation to complement and strengthen in house capacities and capabilities - both with CROs and with renowned high-ranking universities.
To strengthen in-house capacities and capabilities, PI's R&D activities are involving global partners including CROs that offer expertise in special areas of chemistry, engineering, IT, analytical, biological sciences, global field trials, and regulatory disciplines. This is further complemented by continuous building of a growing network with high-ranking universities - within India and on international scale.
In its customer research and manufacturing business, the Company continues to pursue cost leadership in which the R&D team is playing a vital role, e.g., by focusing on process innovation and cost improvement opportunities for the existing product portfolio, targeting cost improvement opportunities while maintaining the highest standards of Quality, Health, Safety and Environment (QHSE). The Company's R&D and manufacturing teams are closely working together according to the ESG paradigms, e.g., with respect to green chemistry, waste reduction, energy savings, minimizing the carbon footprint, reducing the environmental load, and enhancing the safety of processes and products.
7. FINANCE
The 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 ^20,988 Million. The Company follows a prudent financial policy and aims at maintaining an optimum financial gearing. The Company's debt to equity ratio was '0' as on March 31, 2024.
In the financial year 2023-24, 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+/Stable whereas for short term loans, rating was reaffirmed at A1+. This reflects a very high degree of safety regarding timely servicing of financial obligations and a vote of confidence reposed in the Company's financials.
8. DIVIDEND
During the year, the Board of Directors of the Company declared an interim dividend of ^6/- per equity share (600%) in its Board Meeting held on February 09, 2024, on 15,17,18,118 equity shares of face value ^1/- each which was paid on February 29, 2024.
In addition to same, the Board of Directors at its meeting held on May 21, 2024 has recommended a final dividend of ^9/- per equity share (900%) of face value of ^1/- each, which if approved at the forthcoming Annual General Meeting (AGM), 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 (NSDL) and Central Depository Services (India) Limited (CDSL) as on record date i.e., Tuesday, August 20, 2024, fixed for this purpose. The total dividend for the year would be ^15/- per equity share of face value of ^1/- each.
The dividend recommended is in accordance with the principles and criteria set out in the dividend distribution policy of the Company. The dividend, if declared at the ensuing AGM will be taxable in the hands of the members of the Company pursuant to Income Tax Act, 1961. For further details on taxability, please refer AGM Notice.
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 as a means to meet any unforeseen contingencies.
Pursuant to Regulation 43A of the SEBI Listing Regulations, 2015 the Company has formulated its Dividend Distribution Policy which specifies the financial parameters, internal and external factors that are to be considered by the Board while declaring a dividend. Dividend Distribution Policy is uploaded on the Company's website
i.e.
https://www.piindustries.com/wp-content/uploads/2023/06/Dividend-Policy-f.pdf
9. SUBSIDIARIES & JOINT VENTURES
As on March 31, 2024, the Company had seven (7) direct wholly owned subsidiaries and two (2) joint ventures with leading Japanese companies. In accordance with Section 129(3) of the Act, the Company has prepared consolidated financial statements consisting financials of all its subsidiaries and joint ventures. The key highlights of these subsidiaries and joint venture companies are as under:
SUBSIDIARY COMPANIES
i. Jivagro Limited
The Company owns 100% stake in Jivagro Limited. It is engaged in horticulture business. The total revenue of Jivagro Limited stood at ^2,430 Million with net profit of ^181 Million posted during the year ended March 31, 2024.
ii. PI Health Sciences Limited
The Company owns 100% stake in PI Health Sciences Limited ('PIHSL'). It is engaged in the pharmaceutical business. In order to enable its plans of growth and expansion in the pharmaceutical sector, PIHSL has incorporated a wholly-owned subsidiary in Netherlands i.e., PI Health Sciences Netherlands B.V on April 07, 2023 and PI Health Sciences Netherlands B.V has incorporated a wholly-owned subsidiary in United States i.e., PI Health Sciences USA LLC on April 24, 2023 and acquired 100% shareholding of Archimica S.p.A. on April 27, 2023. Further, PIHSL also acquired 100% shareholding in two companies i.e., Therachem Research Medilab (India) Private Limited and Solis Pharmachem Private Limited on June 02, 2023, which were subsequently merged into PIHSL on October 10, 2023 by an order of Regional Director, Ahmedabad. The consolidated revenue of PIHSL stood at ^3,148.63 Million with net loss of ^891.94 Million posted during the year ended March 31, 2024.
iii. PI Life Science Research Limited
The Company owns 100% stake in PI Life Science Research Limited, which carries on the business of R&D for developing new products. PI Life Science Research Limited posted a profit of ^72.66 million on standalone basis and ^149 million on consolidated basis during the year ended March 31, 2024, on account of various R&D activities for developing new products.
iv. PI Japan Co. Limited
The Company owns 100% stake in PI Japan Co. Limited, incorporated in Japan, which takes care of business development activities of the Company in Japan. PI Japan Co. Ltd posted a net profit of JPY 1.82 Million during the year ended March 31, 2024.
v. PILL Finance and Investments Limited
The Company owns 100% stake in PILL Finance and Investments Limited. It posted a profit of ^5.53 Million during the year ended March 31, 2024.
PILL Finance and Investments Limited is engaged in financial and insurance services
vi. PI Bioferma Private Limited
The Company owns 100% stake in PI Bioferma Private Limited. PI Bioferma Private Limited is yet to start the business operations. Hence, it has not recorded any revenue.
vii. PI Fermachem Private Limited
The Company owns 100% stake in PI Fermachem Private Limited. PI Fermachem Private Limited is yet to start the business operations. Hence, it has not recorded any revenue.
In terms of Regulation 16(1)(c) of the SEBI Listing Regulations, 2015, the Company does not have any material subsidiary as on March 31, 2024.
In accordance with the provisions of Section 136 of the Act and Regulation 46 of the SEBI Listing Regulations, 2015, the Annual Report of the Company, containing the Standalone and Consolidated Financial Statements along with the audited annual accounts of each subsidiary have been placed on the Company's website i.e. https://www.piindustries.com/investor-relations/co-go/Subsidiary- Financial-Statements.
JOINT VENTURES
i. Solinnos Agro Sciences Private Limited
Solinnos Agro Sciences Private Limited ('Solinnos') is carrying out registration activities for different products of Mitsui Chemicals Crop and Life Solutions Inc., Japan, (MCCLS) in India. The Company holds 49% stake in Solinnos through its subsidiary namely PI Life Science Research Limited, whereas remaining 51% stake is held by MCCLS, Japan. Solinnos posted a net profit of ^150.53 Million during the year ended March 31, 2024.
ii. PI Kumiai Private Limited
PI Kumiai Private Limited ('PI Kumiai') is mainly engaged in the manufacturing and trading of agrochemicals in collaboration with Kumiai Chemical Industry Co. Ltd, Japan, owning 50% stake in this joint venture. The Company holds remaining 50% equity in PI Kumai through its subsidiary namely PI Life Science Research Limited. The aforesaid joint venture posted a profit of ^62.48 Million during the year ended March 31, 2024.
Pursuant to Section 129(3) of the Act 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 attached as Annexure 'A' b>to this Report.
10. RISK MANAGEMENT
The Company has a well-defined enterprise risk management framework in place which interalia, includes identification of risks, including integration of new mergers & acquisitions, sustainability, 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 organization. Major risks identified by the business and functions are systematically addressed through mitigating actions on a continuing basis.
Pursuant to Regulation 21 of SEBI Listing Regulations, 2015, the Company has constituted a Risk Management Committee of the Board. As on March 31, 2024, the Committee comprises of 4 members including 1 Independent Director of the Company. The Committee met on August 10, 2023 and January 23, 2024. The Committee is authorized to monitor and review the risk management
plan, apart from reviewing and recommending the modification to the Risk Management Policy, if any.
Risk management policy
Risk management policy of the Company includes the identification, assessment and control of elements of risk, which in the opinion of the Board may threaten the existence of the Company.
11. INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
The 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 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 the 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 the respective process owner. In addition, the Company has a well- defined financial delegation of authority, which ensures approval of financial transactions by appropriate personnel. The Company has also deployed an online control tool to enhance the operating effectiveness of internal controls. The control system comprises of continuous audit and compliance by an in-house internal audit team supported by M/s Ernst & Young LLP, KPMG, PKF Sridhar & Santhanam LLP who are covering the Agri Business vertical along with Depot audit.
The agencies perform the internal audit, and assess the internal controls and statutory compliances in various areas and provide suggestions for improvement. Independence of internal auditors is ensured through direct reporting to the Audit Committee. 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 placed before the Audit Committee of the Board.
Accordingly, the Board is of the opinion that the Company's internal financial controls were adequate and effective as on March 31, 2024.
12. RELATED PARTY TRANSACTIONS
All arrangements / transactions entered 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 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 SEBI Listing Regulations, 2015 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 Notes to the financial statements.
Prior approval of the Audit Committee has been 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 Related Party Transactions and on dealing with related party transactions as approved by the Board is uploaded on the Company's website i.e.
https://www.piindustries.com/wp-content/uploads/2023/06/Policy-
on-Related-Party-Transactions.pdf
13. AUDITORS Statutory Auditor
In accordance with provision stipulated under Sections 139, 142 of the Act read with Companies (Audit and Auditors) Rules, 2014, the shareholders of the Company at its 75th AGM held on September 03, 2022 had re-appointed M/s. Price Waterhouse Chartered Accountants, LLP (ICAI Regn.No.012754N/N500016), as the Statutory Auditors of the Company for a second term of 5 (five) consecutive years and accordingly they hold their office commencing from the conclusion of this 75th AGM till the conclusion of the 80th AGM of the Company to be held in the year 2027.
The Auditors' Report does not contain any qualification, reservation or adverse remark on the financial statements for the financial year ended March 31, 2024. The notes on financial statements referred to in the Auditor's Report are self-explanatory and do not call for any further comments.
Cost Auditor
Pursuant to the directives issued by the Central Government under Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, the cost records maintained by the Company relating to Insecticides (Technical grade and formulations) manufactured by the Company are required to be audited by a cost auditor. The Board has appointed M/s K.G. Goyal & Co., Cost Accountants, Jaipur (Firm Registration no. 000017) as Cost Auditors, based on the recommendation of the Audit Committee, to conduct the audit of cost records of Insecticides (Technical grade and formulations) for the financial year ended March 31, 2024.
The Board of Directors on the recommendation of the Audit Committee has approved the remuneration payable to Cost Auditors. As per the provisions of Section 148 of the Act, the remuneration payable to the cost auditor is required to be placed before the members in a general meeting for approval / ratification. Accordingly, a resolution seeking approval of the members for the remuneration payable to M/s K.G. Goyal & Co., Cost Accountants, Jaipur (Firm Registration no. 000017) is included in the Notice convening the AGM.
Secretarial Auditor
Pursuant to the provisions of Section 204 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed Mr. Rupinder Singh Bhatia (CP No.2514), Practicing Company Secretary, as Secretarial Auditor to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2024.
The Secretarial Audit Report for the financial year ended March 31, 2024, has been obtained and does not contain any qualification, reservation or adverse remark, which requires any comments from the Board. The Secretarial Audit Report is annexed as Annexure 'B' and forms an integral part of this Report.
14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company has not given any guarantee during the year under review. However, the details of loans and investments made pursuant to the provisions of Section 186 of the Act are mentioned in the Notes to the financial statements.
15. DEPOSITS
The Company has not accepted any public deposits during the financial year 2023-24 and no amount of principal or interest was outstanding as on March 31, 2024.
16. TRANSFER OF UNCLAIMED DIVIDEND AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND
As per section 124(5) of the Act read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended (the 'IEPF Rules'), any money transferred by the Company to the unpaid dividend account and remaining unclaimed for a period of seven years from the date of such transfer shall be transferred to the Investor Education and Protection Fund ('Fund') set up by the Central Government. Accordingly, during the year, the Company had transferred an amount of ^8,37,459/- towards unclaimed dividend pending for more than seven years to the Fund.
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 unpaid and unclaimed amounts lying with the Company as on August 17, 2023 (date of last AGM) on the Company's website https://www.piindustries.com/investor-relations/sh-ce/ shareholders-information
Pursuant to the provisions of Section 124 of the Act read with IEPF Rules, the Company has transferred 7,290 and 3,420 equity shares of face value of ^1/- each on May 06, 2023 and December 27, 2023 respectively, pertaining to shareholders in respect of which dividend remained unclaimed for a period of seven consecutive years to IEPF authority by way of corporate action through NSDL.
The shareholders can claim their shares and dividend by making an application in form IEPF-5 online with IEPF authority. Ms. Sonal Ramanand Tiwari, Company Secretary acts as a Nodal Officer of the Company for IEPF matters.
17. BOARD AND COMMITTEES Board of Directors
The Company's Board of Directors comprises an optimum blend of Executive, Non-Executive and Independent Directors. The Chairperson of the Board is a Non-Executive Non-Independent Director. As on March 31, 2024, the Board of Directors comprised of nine (9) Directors out of whom two (2) are Executive Directors including Vice Chairperson & Managing Director and Joint Managing Director apart from seven (7) Non-Executive Directors, out of which four (4) are Independent Directors including two (2) Women Independent Directors and three (3) Non-Executive Non-Independent Directors. The composition of the Board is in conformity with Regulation 17 of the SEBI Listing Regulations, 2015 and the relevant provisions of the Act.
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. Rafael Del Rio Donoso (DIN: 08105128) was inducted as an Additional Director on the Board of the Company on February 09, 2024. Further, his appointment was regularised by the shareholders by Postal ballot on April 19, 2024.
In accordance with the provisions of the Act and Articles of Association of the Company, Mr. Narayan K Seshadri (DIN-00053563) retires by rotation at the forthcoming AGM and being eligible, offers himself for re-appointment. The Board recommends his re-appointment for the approval of the members at the forthcoming AGM. Brief details of Mr. Narayan K Seshadri are given in the notice of AGM.
There has been no other change in the Directors during the year under review since the last report.
Declaration by Independent Directors
The Company has received declaration(s) from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16 of the SEBI Listing Regulations, 2015. The Independent Directors have also confirmed compliance with the provisions of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, relating to inclusion of their name in the databank of independent directors maintained by the Indian Institute of Corporate Affairs ('IICA').
The Board took on record the declaration and confirmation submitted by the Independent Directors regarding them meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same in terms of the requirements of Regulation 25 of SEBI Listing Regulations, 2015.
Details, as required under the Act and SEBI Listing Regulations, 2015, in respect of Directors seeking appointment/re-appointment, subject to the approval of shareholders at the ensuing AGM, are given in the notice of AGM.
Changes in Key Managerial Personnel
There has been no change in Key Managerial Personnel of the Company during the year under review since the last report.
Evaluation of the Board's Performance
In compliance with the provisions of the Act and Regulation 17(10) of the SEBI Listing Regulations, 2015, an annual evaluation of the performance of the Board, Individual Directors as well as evaluation of the working of its committees was carried out by an external agency during the year under review. The evaluation framework for assessing the performance of Directors including the Chairperson of the Board comprised of criteria such as quality of contribution to the Board deliberations, strategic inputs regarding growth of the Company and its performance, attendance at Board meetings and Committee meetings, independence of judgements, safeguarding the interest of the Company and commitment to stakeholders' interests.
The Nomination and Remuneration Committee and Board at their meetings held on May 13, 2024 and May 21, 2024 respectively, based on the report of performance evaluation, determined as required under law that the appointment of all independent directors may continue.
Number of Board meetings conducted during the year under review
During the year under review, seven (7) Board meetings were held on April 19, 2023, May 18, 2023, August 09, 2023, October 13, 2023, November 08, 2023, February 09, 2024, and March 14, 2024. Facility to attend meetings through video conference mode was provided for all the meetings of the Board. 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, 2024, Audit Committee comprises of 4 members with Mr. Shobinder Duggal, Independent Director as the Chairperson, Mr. Narayan K Seshadri, Ms. Lisa J Brown and Ms. Pia Singh as members. Further, details on the Committee meetings held are given in the Corporate Governance Report.
All recommendations of the Audit Committee were accepted by the Board.
Stakeholder's Relationship Committee
The Stakeholder's Relationship Committee comprises of 3 members with Dr. T S Balganesh, Independent Director as the Chairperson, Mr. Shobinder Duggal and Mr. Rajnish Sarna as the members. Further, details on the Committee meetings held are given in the Corporate Governance Report.
A detailed update on the Board, its composition, detailed charter including terms of reference of various Board Committees, number of Board and Committee meetings held during FY 2023-24 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 Act, the Board hereby submits its responsibility statement: -
(a) in the preparation of the annual accounts for the year ended March 31, 2024, 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, 2024 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.
18. ANNUAL RETURN
Pursuant to the provisions of Section 134(3)(a) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, a copy of the Annual Return as provided under Section 92(3) of the Act in the prescribed form as on March 31, 2024, which will be filed with Registrar of Companies, Ministry of Corporate Affairs, is hosted on the Company's website at https://www.piindustries.com/ investor-relations/co-go/annual-return
19. SECRETARIAL STANDARDS (SS-1 and SS-2) OF ICSI
The Company has devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems were adequate and operating effectively.
20. REMUNERATION POLICY OF THE COMPANY
The Remuneration Policy of the Company comprising the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Management Personnel 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 part of this Report.
During the financial year, our organization's values of 'Caring,' 'Creative,' 'Courageous,' and 'Curious' have guided us as we work towards 'Reimagining a healthier planet.' We foster innovation and diversity, encouraging fresh ideas from a diverse workforce. Our goal is to attract, develop, and retain talent for sustainable growth. We provide growth opportunities through technology and continuous learning, empowering our team members to evolve personally and professionally. As pioneers, we champion progress and sustainability, integrating it into our identity for a better tomorrow.
Our success mantra focuses on a modern outlook and setting clear goals for efficiency and sustainability. Internally, we pride ourselves on setting global standards by blending tradition with innovation. Belief in sustainability is central to our culture, ingrained in every aspect of our operations.
In summary, our culture emphasizes innovation, diversity, sustainability, and a commitment to excellence, ensuring success while positively impacting our planet.
Policy on Prohibition, Prevention and Redressal of Sexual Harassment at Workplace
The Company has a zero tolerance for any abuse not just against women but including all the genders at workplace. The Company has adopted 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 (Prevention, Prohibition and Redressal) Act, 2013". The Company has constituted an Internal Complaints Committee ('ICC') known as Prevention of Sexual Harassment ('POSH') Committee to enquire into complaints of sexual harassment and recommend appropriate action. The Company received 3 (three) complaints under POSH during the financial year 2023-24. All the complaints were disposed of during the period and there were no complaints pending as on March 31, 2024.
Particulars of Employees and related disclosures
The information required under Section 197(12) of the Act 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'. 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, these are available for inspection during business hours up to the date of the forthcoming AGM 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 address of the Company.
Employee Stock Option Plan / Scheme
The Company has not granted any stock options during the financial year under PII-ESOP Scheme, 2010. 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 of India Limited one day prior to the date of grant of option. 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 (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is uploaded at the Company's website i.e., https://www.piindustries.com/investor-relations/co-go/Other- Disclosures
During the year under review, there has been no change in the PII- ESOP Scheme, 2010. PII-ESOP Scheme, 2010 is in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, and this has been certified by the secretarial auditor of the Company.
21. VIGIL MECHANISM - WHISTLE BLOWER POLICY
The 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 i.e.
https://www.piindustries.com/wp-content/uploads/2023/11/PIIL-
Whistle-Blower-Policy-08.11.2023.pdf
The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and provides for direct access to the Chairperson of the Audit Committee. It is affirmed that no personnel of the Company have been denied access to the Audit Committee.
22. 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 Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure 'D' attached to this report.
23. CORPORATE SOCIAL RESPONSIBILITY ('CSR')
In accordance with the requirements of Section 135 of the Act, the Company has a CSR Committee comprising four (4) members with Ms. Pia Singh, Independent Director as Chairperson, Mr. Mayank Singhal, Mr. Rajnish Sarna and Dr. T S Balganesh as Members. During the financial year 2023-24, the Committee met three times. The details of meetings and attendance thereat forms part of the Annual Report on CSR activities furnished in Annexure 'E' attached to this report.
The CSR obligation of the Company for the financial year 2023-24 was ^217.35 Million. As on March 31, 2024, total amount spent on CSR activities by Company was ^145.33 Million. The unspent amount of ^72.02 Million was transferred to 'Unspent CSR Account' of the Company within a period of thirty days from the end of financial year.
In terms of the provisions of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Annual Report on CSR activities is annexed to this Report. Detailed information on CSR Policy, its salient features, CSR initiatives undertaken during the year, details pertaining to spent and unspent amount forms part of Annual Report on CSR activities.
The CSR policy is hosted on the Company's website i.e.
https://www.piindustries.com/sustainabilitv/CSR/CSR-Policv
Further, the Chief Financial Officer has certified that the funds disbursed have been utilised for the purpose and in the manner approved by the Board for the financial year 2023-24.
24. CORPORATE GOVERNANCE
The 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 Listing Regulations, 2015 forms part of the Report.
25. MANAGEMENT DISCUSSION AND ANALYSIS
A detailed report on the Management Discussion and Analysis is provided separately forms part of the Annual Report.
26. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
A separate section of Business Responsibility and Sustainability describing the initiatives taken by the Company from an environmental, social and governance perspective and assurance of the Business Responsibility and Sustainability Report Core, forms part of this Annual Report as required under Regulation 34(2)(f) of SEBI Listing Regulations, 2015.
27. 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.
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.
e) Other statutory disclosures
• The Auditors, i.e., Statutory Auditors, Secretarial Auditors and Cost Auditors have not reported any matter under section 143(12) of the Act, and accordingly, details as required to be disclosed under section 134(3)(ca) of the Act, have not been furnished.
• There is no change in the nature of business of the Company during FY2023-24.
• A cash flow statement for the FY 2023-24 is attached to the Balance sheet.
• The securities of the Company were not suspended from trading during the 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.
28. 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 along with 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 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.