Jain Irrigation Systems Ltd

To the members,

The Directors present their report on the financial performance, business andoperations of the Company for the year ended 31st March 2011.

1. Financial Highlights

2. Operations

The net sales have increased by 22.3% on yoy basis, since exports remained flat at Rs.5,158 Mn while the domestic sales improved by an impressive 25.6% at Rs.27,349 Mn backedby growth in MIS/SIS (32%), Agro processing (10%) and Pipes(9%). The MIS/SIS growth wasprimarily due to increased retail sales in States like Maharashtra, Andhra Pradesh,Gujarat, and Punjab and project sales in Karnataka, & Rajasthan. The growth in Agroprocessing sales were mainly on account of higher demand for mango puree in our European& Middle East markets while growth in Domestic business was on account of continuingrobust off-take from MNC beverage company. The pipe growth was due to increased retailbusiness in Maharashtra, Madhya Pradesh, Karnataka, Gujarat and Rajasthan while the Ductdistribution, Gas distribution & water distribution pipes, all three segmentscontributed to the increased domestic sales of the PE pipes.

The operating income includes Rs.554.03 Mn (Rs.142.39 related to 2009-10) due fromGovernment of Maharashtra under eligibility certificate issued under the IndustrialPromotion Scheme from DIC, GoM. The EC is valid for a period of 7 years from 30thSeptember 2009 or till the amount of benefit gets exhausted, whichever is earlier.

Due to changes in foreign currency rates, the notional gain was lower by over 85% yoybasis at Rs.102.1 Mn. Even though the tighter monetary regime resulted in an increase ofRs.420 Mn. in finance charges on absolute basis, the impact on cost of sales was flat atlittle over 7%. The profit for the year was at Rs.2965 Mn. (as against Rs. 2703 Mn. lastyear), an increase of 10%.

3. Dividend

Besides small Preference Dividend payable for partial year (3 months) as above; theDirectors propose to the Shareholders a Dividend of Rs.1 per share, on Ordinary EquityShares of Rs.2 each involving an out go of Rs.385.89 Mn. to all eligible Shareholders andRs.64.07 Mn. as Dividend Distribution Tax for the year ended 31st March 2011.

4. Sub Division of Equity Shares, Preferential Issue, ESOP related Sharesallotment, DVR’s

As the Members may be aware the Company had announced a sub division of Equity Sharesof Rs.10 each into Ordinary Equity Shares of Rs.2 each on 9th August 2010. The subdivision became effective on 1st November 2010 and the new ISIN number for Equity Sharesis INE 175A01038.

In terms of the Shareholder’s approval of 9th March 2011, the Board of Directorshave allotted on a preferential basis as per applicable SEBI (ICDR) Guidelines 2009 6.1 MnEquity Warrants of Rs.228.15 each aggregating to Rs.1,391.72 Mn against deposit of Rs.347.93 Mn (being 25% of issue price) by the select Individuals and entities of thePromoter’s Group. The Equity Warrants carry an option for request for allotment ofEquity Shares of Rs.2 each for cash at a premium of Rs.226.15 each by paying the balance75% money anytime within 24th September 2012.

During the year under review Associates holding ESOP’s equivalent to 45,38,000opted to exercise the option attached to the their options and applied for 4,538,000Equity Shares of Rs.2 each at an exercise price of Rs. 61.55 each (2,250 Equity Shares),Rs.82.69 each (2,090,425 Equity Shares) and Rs.113.60 each (2,445,325 Equity Shares). Thisresulted in an increase in paid up capital by Rs.9.08 Mn and securities premium account byRs.441.71 Mn.

While after 31st March 2011 Associates holding ESOP’s dividend equivalent to161,625 opted to exercise the option attached to the their ESOP’s and applied for161,625 Equity Shares of Rs.2 each at an exercise price of Rs.61.55 each (1,500 EquityShares), Rs.82.69 each (134,200 Equity Shares) and Rs.113.60 each (25,925 Equity Shares).This resulted in an increase in paid up capital by Rs.0.32Mn and securities premiumaccount by Rs.13.81 Mn.

The proceeds of deposit amount of Equity Warrants and the Equity Shares allottedagainst ESOP options exercised have augmented the long term resource base of the Companyand hence the Directors confirm having used the funds as per the objects of the saidissues.

On the 27th January 2011, the Board Of Directors announced the decision to capitalizereserves and allot Equity Shares of Rs.2 each with Differential Voting Rights (DVR’s)and as per requirements of Companies (Passing of Resolutions by Postal ballot) Rules,2001, the members have passed with requisite majority the resolutions to amend the CapitalClause in the Articles of Association to enable the Company to issue such DVR EquityShares. Since then the Company has applied on 15th February 2011 through the designatedStock Exchange (i.e. The Bombay Stock Exchange,) the necessary exemption under the undersub-rule (7) of rule 19 of Securities Contracts (Regulation) Rules, 1957 for relaxingstrict enforcement of clauses (b) to sub-rule(2) of Rule 19 thereof in respect of proposedBonus Issue of DVR Equity Shares. The exemption applied for above is still awaited andCompany shall fix a "Record Date" soon after the SEBI exemption is received andthe SE’s give "in Principle" permission for listing of the DVR bonusShares. Thereafter the process of allotment and issue of DVR Equity Shares shall becompleted expeditiously.

5. Resource mobilization and capacity expansion

During the year under review, the Company has raised from international financialmarkets / institutional lenders, further Buyers Credit/ Foreign Currency unsecured Loansbased on LIBOR linked rate at competitive pricing. Total amount sanctioned and disbursedis CHF 17.75Mn (equivalent to Rs.826.5 Mn). The loan amounts are being used by the Companyfor the expansion and modernization activities in MIS/ SIS business. The Company hasinvested an amount of Rs.3,594 Mn on capital expenditure to increase the capacity invarious divisions. An amount of Rs.1,962 Mn has been spent on capital expenditure for theMIS/SIS division by increasing the capacity of 53,060 MTPA. Rs.321 Mn has been spent oncapital expenditure for the piping segment adding in excess of 33,645 MTPA in the segment.Rs.647Mn has been spent on capital expenditure for the Agro processed division. An amountof Rs.15 Mn has been spent on capital expenditure for Tissue Culture segment to increasethe capacity by 5 Mn plantlets. The Company has spent an amount of Rs.141 Mn in GreenEnergy/Solar business while it has started a Solar PV manufacturing facility at an initialcost of Rs.122 Mn during the year under review. An amount of Rs.385 Mn was spent towardsstrengthening the common corporate service infrastructure.

6. Significant Awards, Accolades & recognitions

The Company has received several awards on International and National, State levelduring the year under review, however significant amongst them are:

• IFC’s (part of World Bank Group) Client Leadership Award for"pioneering work to promote sustainable agriculture and raise farmers’ incomesthrough the efficient use of water, energy and fertilisers"

• The Financial Times London and Arcelor Mittal Boldness in Business Award inEnvironment category for 2010 for "For pioneering drip irrigation in India, it workedtirelessly and drove the growth of this simple yet highly effective technology. Itmultiplied yields at considerably lower water usage. Wastelands could now be cultivatedand greened. More Crop Per Drop made real difference to environment. Jain Irrigation wentbeyond offsetting its carbon footprint and achieved sustainability on a more fundamentallevel".

• Recently, the Company was granted US Patent 7963569 titled ‘locking pipejoint and method of making the same’.

List of New Awards

7. Other developments during FY 2011

Sleaford acquisition

In November 2010, the Company acquired 80% stake in holding Company SQF 2009 Limited,that owns its trading arm Sleaford Quality Foods Limited (SQFL).

SQFL is engaged in the business of food ingredients, trading, blending custom packagingand fruit & vegetable food ingredients, mainly in dry form. SQFL was started in 1968by Arnold family and was the first ever customer of dehydrated onion for Jain IrrigationSystems Limited in 1996. This acquisition gives JISL a possibility of addition of manymore products in its Food Division product range. It brings JISL one step closer to themarket. The Company received a prestigious Food Manufacturing Excellence Award afteracquisition. SQFL has started Juice Trading Division for which Juices are procured fromdifferent parts of the world.

Harvard visit of farmers

Two small but successful farmers who started small time but are shining examples of howtechnology & innovative cultivation methods transformed lives of farmers in thecountry were part of an invited delegation at Harvard Business School. The farmers made afull scale presentation the delegates at Harvard School and also faced somequestions-answers from those present. These farmers have used your Company’s product& technology and are proud customers.

THE Machines acquires PRO-TOOL AG

Recently, THE Machines, a multi-generation subsidiary of the Company has acquired 75%stake in Pro-Tool Ag, Wynau, Switzerland, a Swiss Corporation active in Plastic InjectionMould manufacturing, engineering and tool manufacturing. The Company has ability toacquire balance 25% based on prefixed valuation of the Company in next 10 years. By thisacquisition the engineering capabilities of the group get further enhanced specially inthe field of plastic mould making.

8. Other strategic and major developments post March 2011

We have been engaged in solar business for more than 17 years and we believe solarenergy systems and products are a large potential business. The Government of India,Ministry of Non Conventional Energy has also launched the Solar Mission under which it hastargeted:

• to create an enabling policy framework for deployment of 20,000 MW of solarpower by the year 2022;

• to achieve 15 million square meters of solar thermal collector area by 2017 and20 million square meters by 2022;

• to deploy 20 million solar lighting systems for rural areas by 2022; and

• to achieve these objectives through the private sector making focused efforts inthe solar thermal and energy areas.

Our solar division had income of Rs.358.5 million for the year ended March 31, 2011. Asa small division, we believe it could not get the desired attention of a business havinghuge potential. We aim to focus on this business as a separate and standalone entity andto exploit non-conventional sources of energy mainly through "solar systemsapplications". In Fy 2012 we will transfer the assets of our solar business to a 100%owned Indian subsidiary. Our solar business comprises of manufacturing, installation, andoperation of solar water heating systems, solar photovoltaic appliances and solar pumps.We believe that consolidating this business within a single subsidiary will help us focuson this business, which we believe will have strong growth in the future.

Company has not yet launched the proposed issue of 331 Mn Equity shares of Rs.2 eachunder Qualified Institutional Placement / FCCB/ EDR/ GDR due to uncertain marketconditions. The Board shall take decision at an appropriate time and keep the Shareholdersinformed through websites of BSE/ NSE for any development on the subject.

In it’s pursuit to become a global leader around its core domain of agri-business,your Company has acquired a rich pool of tacit and direct knowledge on the customer base(small farmers) through its strong dealer network. One of the key observations thatCompany has developed over its long establishment period is the inadequacy of and/oruntimely credit that the small farmer segment is delivered for his agricultural needs. Inthis context, your Company has promoted a NBFC namely Sustainable Agro CommercialFinance Limited - with the overall objective of serving the small farmer and ruralconstituency in bridging the current gap. This will help the Company to reduce receivablesin the balance sheet and significantly improve working capital cycle for the MicroIrrigation business. Company has made an application to Reserve Bank of India for license.IFC (World Bank Group) has agreed to become 10% share holder of proposed NBFC.

In Karnataka new Micro Irrigation Corporation namely Anthara Gange Sukshama NiravariNigam has been launched by State Government to promote the spread of MIS/SIS in thestate. After Andhra Pradesh, Gujarat and Tamil Nadu this is the fourth state to havestarted a special corporation for spread of MIS/SIS in state with central assistance. Thiswill help to channelize the funds systematically into the development of MIS/SIS in theKarnataka State and the potential to cover larger areas under the MIS/SIS is enhanced withthis recent development.

At the new proposed location in Alwar, Rajasthan the Company has commenced activitiesto install following capacities for products as under:

and hope to commence commercial operations for plastics business at above location fromOctober 2011 onwards. The plant will generally serve the Northern Indian market which hasexhibited a large growth potential.

9. The operations of subsidiaries

The Mauritius based direct subsidiary of the Company has earned an income of $ 116,066and made a net loss of $ 810,872. Summarised Balance Sheet and the Income statement of thesaid subsidiary is available elsewhere in the Annual Report. The resources of thesubsidiary have been further strengthened by infusion of $8.5 Mn. as loan during the yearunder review. The Netherlands based direct subsidiary of the Company has earned an incomeof $939,000 and made a net loss of $388,047. Summarised Balance Sheet and the Incomestatement of the said subsidiary is available elsewhere in the Annual Report. Theresources of the subsidiary have been further strengthened by infusion of $1.5Mn as EquityCapital/Share premium and loan of $2 Mn during the year under review.

Other Subsidiaries

Information on operations of other subsidiaries including new acquisitions has beencovered in Management Discussion and Analysis in this report.

10. Employee Stock Option Plan (ESOP)

The implementation of Employees Stock Options and Shares Plan, 2005 (ESOP-2005) hascontinued during the year under review. Thus four lots are now issued to eligibleemployees including whole time directors, and key management personnel. No employee hasbeen issued options entitling such person to subscribe to more than 1% of Equity Sharecapital of the Company.

Details and disclosures in compliance with the clause 12 of the SEBI (Employee StockOption Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in thetable below:

Retiring Directors

Shri. D.R. Mehta and Shri. Ghanshyam Dass are retiring by rotation and being eligibleoffer themselves for reappointment at the ensuing AGM. Dr.Arun Kumar Jain, AdditionalDirector retires at the ensuing AGM. The Company has received a proposal to appoint him asDirector liable to retire by rotation and it shall be placed before the meeting forMembers decision on appointment.

On 5th October 2010 of Shri. A.R. Barwe the then Chairman of Audit Committee and anIndependent Director on Board of the Company died. He had been with the Company as aDirector since August 2002 and had played important part as Audit Committee Chairman indifficult times in the early part of decade. The Board of Directors wish to place onrecord their deep appreciation of the invaluable services rendered by him as anIndependent Director and Chairman of the Audit Committee of the Company for a period ofabove 8 years.

In terms of the Corporate governance requirements, given below are the brief resume ofeach of the retiring directors:

Shri D.R. Mehta was appointed on 26th December 2007. He joined IndianAdministrative Service in 1961 and held important positions in the Govt. of Rajasthan andlater in Govt. of India. He was the Chairman of Securities and Exchange Board of India(SEBI), an apex regulatory body that deals with the regulation and development of thecapital market in India. He has been credited with transforming the Capital Market inIndia into a modern, efficient, safe, vibrant and a very investor friendly one. His priorprestigious postings include the Deputy Governor of Reserve Bank of India, DirectorGeneral of Foreign Trade, Ministry of Commerce, and Additional Secretary, Banking,Ministry of Finance. Born in 1937, he is a graduate of Arts and Law from RajasthanUniversity. He also studied at Royal Institute of Public Administration, London and AlfredSloan School of Management, MIT, Boston. There is another side to this sterlingpersonality-human side. A man of compassion, he set up the Bhagwan Mahavir ViklangSahayata Samiti in 1975. He was conferred the Padma Bhushan civilian award on 5th May 2008for Social sector Work.

Shri. Ghanshyam Dass was appointed on 25th August 2009. He has had an outstandingcareer in domestic, international banking and Capital Markets for over 32 years, duringwhich he developed a firm understanding of the complexities of international markets. Heis thoroughly familiar with the regulatory and business environment in USA, EuropeanUnion, South East Asia, The Middle East, India and other major money-center locations. Mr.Dass is an Advisor to Intel Capital, Task Force, Founder Member Association of OutsourcingProfessionals (AOP), Member Academic Council – Union Bank School of Management,Member of the CII National Council on Corporate Governance and Regulatory Framework andCII National Committee on Capital Markets and Government Nominee on the Governing Councilof The Institute of Company Secretaries of India (ICSI). Mr. Dass is a member of BrickworkRatings Committee (A Credit Rating Agency) and Vice President Karnataka AthleticsAssociation.

Dr. Arun Kumar Jain was appointed as an Additional Director on 4th April 2011 He isone of India’s best known strategy scholars and author. Widely traveled, he hastaught at leading Universities in USA, UK, Greece, France, Germany, and Singapore. Heholds honorary chairs as Distinguished Professor of Corporate Governance and Strategy atSP Jain Center for Management, Singapore & Dubai, and Affiliated Professor ofStrategy, International Business and Corporate Governance at EM Strasbourg School ofBusiness, Strasbourg (France’s largest University) and previously Research ChairProfessor at German Graduate School of Business and Law (Germany) and Chairman &President of Center for Accelerated Learning, Innovation, and Competitiveness (Germany).His research has been published in international journals including Harvard BusinessReview. All his books on general management, viz. Competitive Excellence; CorporateExcellence; and Managing Global Competition have received India’s Best Book Awards.His two textbooks, Crafting and Executing Strategy (running in 16th edition) andInternational Business (in 6th edition) are standard MBA texts in India and abroad.

Dr. Jain is a gold-medalist mechanical engineer (having received the ‘All-RoundBest Student’ award), Ph.D. from Indian Institute of Management-Ahmedabad (havingreceived IFCI Outstanding Doctoral Research Award), and an alumnus of IFC-World Bank.Before joining full-time Indian Institute of Management–Lucknow (India), he was afaculty at IIM-Bangalore. Professor Jain has presented delivered keynotes at Council ofEurope (Strasbourg), Global Corporate Governance Forum at Washington, World Bank/IFC,Bundesbank (Germany), Global Forum for International Investment (Paris), OECD at Paris andCopenhagen, UNCTAD, MITI (Japan), European Union (Brussels), Commonwealth Secretariat(UK), India-Germany Business Forum (Germany), etc.

12. Director’s Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, yourDirectors state that:

i) in the preparation of the annual accounts, the applicable accounting standards havebeen followed except, to the extent indicated in notes;

ii) the accounting policies are selected and applied consistently and are reasonableand prudent judgments and estimates were made so as to give a true and fair view of thestate of affairs of the Company as at 31st March, 2011, and, of the profit of the Companyfor the year ended 31st March, 2011;

iii) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act,1956, forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

iv) The Directors have prepared the annual accounts for the financial year ending 31stMarch, 2011 on a ‘going concern basis’.

i] Associate Engagement

Apart from the overall development of our associates, the Company is adopting variousHR initiatives for bringing in the feel of "organization as a large family"amongst not only the associates but also the families of the associates in a systematicmanner.

Pilgrim tours were undertaken for the associates above the age of 45 and their parentsand grandparents. Total 7 pilgrim tours of 10 days each involved 137 associates and 189parents and grandparents.

People in general find it awkward to discuss about the issue of infertility and itleads them to not taking proper guidance / treatment for the same. 29 Associates havinginfertility issues were identified and counseling and proper medical treatment, allexpenses paid, was initiated for them.

Our efforts which started with conducting Intelligence Quotient and Aptitude Test andthe special coaching to the children of our associates yielded good results and firstbatch taking up SSC examinations produced 100% result.

Apart from the academic coaching, a 15 day residential "PersonalityDevelopment" camp was organized for the children of our associates. 113 children ofthe associates benefited from the program.

The practice of providing educational scholarships to the children of associates onneed and merit basis continued. 261 children of our associates benefited with thescholarship amounting to Rs.3.86 Mn.

Initiative for the visits of family members of the associates to all the Jalgaon plantlocations of the Company, giving them information about work culture and importance of thejob their family member is being continued. Total 115 visits involving 4,537 familymembers of 984 associates were conducted.

As a recognition of the performance and the long service, 47 more Tata Nano cars werepresented to the deserving associates on the occasion of "Bhaubeej" (Diwali) in2010.

Apart from the then limited coverage, the Company has decided to cover all theassociates who have completed more than two years of service under the umbrella of"Superannuation". Total 3,523 associates were benefited.

a) Social Involvement :

Once again on demand of the blood banks, a Blood donation camp was organised wherein588 units of blood was collected.

b) Training :

The Training and Development details are as under,

ii] Recruitment

The recruitment drive continued throughout the year looking for the right people whichalso included the on Campus selection for Engineering Graduates from agriculture field allover the country. The recruitment was done on the basis of demonstrated and potentialability, compatibility with the organizational culture, merit, openness and fitness withson of the soil empathy. The tally reached to 1,504 gross additions during the year underreview.

The permanent employee strength of the Company as on 31st March 2011 was 6,504.

14.Corporate Social Responsibility & Sustainability Report

The rural development work is carried out through the group entities Gandhi ResearchFoundation [GRF]

(a S. 25 Company under the Companies Act 1956) and Bhavarlal and Kantabai JainMultipurpose Foundation [BKJMF] (A registered public charitable trust) both recognized forbenefit of S. 80G of the Income Tax Act 1961 and rules made thereunder. During the yearunder review the above institutions have been given donations of Rs.41 Mn and Rs. 21 Mnrespectively to meet their objectives. A brief of their significant contribution is givenbelow :

Activities of GRF

GRF has adopted following objects :

• Dissemination of Gandhiji’s teachings for welfare of humanity.

• Establishment of international research and study center for the disseminationof Gandhiji’s teachings.

• Collecting and preserving all Gandhiji resource material under one roof.

• Carry out Rural Development Programmes.

A 60,000 sq. feet building is planned to house a Museum, Library, Class Rooms. Whilelots of books, periodicals, photographs, films, voice recordings, stamps, artifacts,memorablia etc have been collected for the above museum. To disseminate thoughts ofGandhiji a scheme of approaching young minds in schools an examination is run under thename Gandhi Vichar Sanskar Pariksha in 22 districts and 31,480 students participated. Anexhibition ‘Mohan to Mahatma’ and ‘Satyagraha’ is taken regularly toschools, colleges and other educational places to educate children on Gandhiji’sthoughts.

6 villages – Wakod, Shirsoli PB, Shirsoli PN, Takarkheda, Mohadi and Kadauli- inthe Jalgaon district have been adopted for educational, health and sanitation work.

Activities of Anubhuti

Run by BKJMF, the Anubhuti school has been recognized and has won Green School of theyear in change makers category for the year 2010. The annual awards are held under theaegis of Centre for Science and Environment (CSE). Over 5,000 schools from all over thecountry participated and 600 were shortlisted and the award winners were then selected for1,2,3 positions. The first batch of Standard X students did the school proud by producingspectacular results at the 2011 Board Examinations.

A new School, Anubhuti-2 has been established for below poverty line (BPL) students.Standard 1 and 2 (3 sections each) have started functioning since July 11, 2011. Thenecessary infrastructure is in place. Standard 3 and 4 are planned for academic year2012-13 and 2013-14 respectively.

Sustainability Efforts

Sustainability is ingrained in the philosophy of Jain Irrigation. We create value notonly to the stakeholder in the terms of prosperity, but, we care for nature andenvironment. Our each and every step is to strike the balance between the developmentalneeds and caring for the nature and our human resources. We are proud to enter into first100 of the global Cleantech companies. The Global awards "Boldness in Business"in Environment Category by Arcelor Mittal Group. The ‘best water company award byUNESCO, Ministry of Water Resources and WATER magazine are the epitome of the"sustainable" success of the organization. The Indian Chambers of Commerce,Kolkata bestowed upon us the "Sustainability Vision Award 2010" for sustainablebusiness model. In 2009 we came up with first sustainability report as per GRI and alsoworked on the concept of Water Foot Printing on onion supply chain. This was unique as ithad included the sustainable strategy part for the first time devised by water footprinting network of which we are member. Both of these reports are available online. JainIrrigation’s sustainability team is working to get its four CDM projects through thevalidation process. The work of biodiversity indexing of the Jain Hills watershed has beencompleted and will be published soon. The new concept of "sustainability accountingand reporting" is on anvil, which is hardwiring the sustainability in the economicand financial aspects of the Company. To streamline our effort towards corporatesustainability we are now members of the TERI-BCSD (Business Council for SustainableDevelopment). We are working speedily and expanding our horizon on the concept of JAINGAP.We are presently under implementation stage for the EN 16000 for Energy ManagementSystems, ISO 14064 for Green House Gas Management Systems and SA 8000 for SocialAccountability. This is beyond the present ISO systems standards of 9000, 14000 and 2200family, and OSHAS 18000. Now, we are under the process of preparation of our secondSustainability report which will cover all the information, process and materialityrelated to Economic, Environment and Social aspects of the organization in the year2009-10 and 2010-11. The report will be published in mid of Dec-2011. This will cover allthe plants and operations in India and USA. Our first report was published for the year2008-09. This report will also cover the stakeholder engagement process and policy forsustainable future is under process and will be reflected in the report of 2011. Theorganizational support for the CSR activities for Rural Village Development, GandhiResearch Foundation, support for development of sports and sportsmen are also reflected inthe upcoming sustainability report.

15. Environment Health and Safety performance

The following steps have been initiated during the year 2010-11 :

• Jain Irrigation Systems Ltd. is certified for OHSAS 18001, an OccupationalHealth and Safety Management System now for its Jalgaon, Hyderabad and Udumalpet Plants.

• The Company has integrated the Quality Management Systems (9001), EnvironmentalManagement System (14001) and Occupational Health and Safety Management System in all itscertified plants.

• Plastic Park Bambhori has installed Fire Hydrant system for its manufacturingunits with 6,00,000 liters of water storage, nearly 9,000 meters of pipeline, and 179hydrant points covering 128 acres of manufacturing facility.

• Substantial reduction in noise levels (90 to 79 dB) in casing pipe production isachieved by incorporating noise absorbers in blower system.

• Auto feeding system of material established in various machines has avoidedmanual loading operation, enhancing safety of operation.

• Air Compressor with AC drives has increased life of oil that made them moreenvironment friendly with less waste generation.

• Introduction of runnerless Moulds for inline emitters has totally eliminatedwastage generation.

• Plastic park uses solar pumps for its entire demo operations and developmentworks, promotion renewable energy uses.

• Manufacturing plants in new buildings capture the rainwater and use it forprocessing.

• Introduction of new Take Up mechanism in dripline has eliminated humaninteraction and eliminated the risk.

• New Generation chilling plants in dripline manufacturing unit are moreenvironmental friendly eliminating usage of F22, an Ozone Depleting Gas.

Background

The Company has been actively working on the transition to a single software platform.The Company studied the various SAP implementation strategies used by Micro Irrigation /Pipe / Food and Energy businesses and began communicating with several ImplementationPartners of SAP. After developing a thorough understanding of best practices, the Companydecided to leverage its operating structure through a SAP implementation.

By consolidating IT systems, SAP will enable simplified and standardized work processesacross all facets of Company’s’ complex and diversified businesses, whileenhancing the Company’s customer service culture and driving operating efficiencies.

Implementation

The Company engaged 60 associates to identify the functionality required in the Companyprocesses. This group of associates has complemented an experienced full-time project withthe team of more than 40 SAP consultants from our implementation partner, Wipro India Ltdand 10 SAP consultants from our SAP advisory partner - KPMG advisory Services and across-functional group of Jain Irrigation Systems Limited’s business leaders.

The Company continued with the standard design, configuration and implementation of itsSAP system, however based on the business requirement certain processes were customised.

The Company has Implemented SAP (Leading ERP business solution software) to support itsstrategy of unifying business processes, information, and IT systems across itsmanufacturing operations and depots in India.

We are glad to share that we successfully went live on Finance and Controlling, Salesand Distributions, Material Management, Production Planning and Quality Management andPlant Maintenance Module on August 15, 2010. SAP has now replaced legacy systems at allmanufacturing units, depots and offices across India. As is expected Company did face someissues in initial period most of which have been resolved.

Economic Benefits

The Company has identified the areas having substantial potential economic benefits– Inventory Management, price management and administrative and operatingefficiencies. The Company is highly confident that these benefits can be realized.

Internal Controls

SAP implementation allows a number of strategies to implement internal control in thebusiness application through process mapping, segregation of duties, authorisations. yourcompany has done the review of SAP functionality and controls check from Ernst and youngPvt Ltd. Their suggestions are being implemented. Independent of a SAP functionality andcontrol check, your Company is proactively identifying the areas for further improvementwhich shall remain an ongoing process.

Future Plan

The Company has plan to integrate its IT infrastructure by rolling out SAP at foreignsubsidiaries to further streamline Manufacturing, Supply Chain, local and globalreporting, analysis in a common enterprise wide format. It will provide bettercollaboration with our worldwide units, transparency and efficiency for global operations.

17.Fixed Deposits

The Company, during the year under review, has not accepted nor renewed any depositsfrom public, under the Companies (Acceptance of Deposits) Rules, 1975. The Company had nounclaimed / overdue deposits as on 31st March, 2011.

18. Auditors

The Auditors, M/s.Haribhakti and Company, Chartered Accountants, Mumbai have furnisheda Certificate under Section 224(1B) of the Companies Act, 1956 that their proposed reappointment, if made, will be in accordance with the said provision of the Companies Act,1956. The Audit Committee has recommended that m/s Haribhakti and Company, a firm ofChartered Accountants, Mumbai to be reappointed as Statutory Auditors. The Shareholdersmay reappoint the Statutory Auditors as per AGM Notice attached separately.

19.Promoters Group for the purposes of SEBI(Substantial Acquisition of Shares andTakeover)Regulations, 1997

In pursuance to clause 3 (1) (e) (i) of SEBI (Substantial Acquisition of Shares andTakeovers) Regulations, 1997 and definition of group as defined in the Monopolies andRestrictive Trade Practices Act, 1969 the representative of Promoters’ Group of theCompany has filed the following list of the individual Promoters and Corporate entities ofPromoters Group as under:

A. Individuals

B. Corporate Entities

C. Trust Entities

20.Particulars of Employees

As per provisions of Section 217 (2A) of the Companies Act, 1956 only eight of thepersons in employment of the Company have drawn remuneration in excess of Rs. 500,000/-per month, during the year under review or part thereof as per details in the Annexure tothis report.

Plastic Park

The following steps have been initiated during the year 2010-11:

• Introduction of all electric injection molding machines has given 40% of energysaving compared to conventional injection moulding machines.

• Continuing the productivity improvement JISL developed nearly 80 new moulds ofmulti cavity inhouse and 45 moulds from outsourcing, which has enhanced productivity andsaved nearly 25% of energy compared to single cavity moulds.

• State of the art injection moulding machines with servo motor drives installed,consumes nearly 30% less energy compared to conventional Injection Moulding Machines.

• Introduction of variable frequency drives with pressure regulation in aircompressor units in injection moulding and MIS pipe have resulted yield 30% reduction inenergy consumption.

• For all PVC Pipe production all the socketing operations are made online. Thishas given 10% energy conservation.

• Energy monitoring is streamlined with incorporation of energy meters at allcritical consumption points.

• New generation chilling plants introduced in dripline production are saving 10%energy compared to conventional cooling tower.

• Various efforts in all departments at plastic park have resulted in total savingof 26,77,193 kWh of electrical energy during 2010-11.

Plastic Park

The following steps have been initiated during the year 2010-11:

• In dripline manufacturing a state of the art recycling machines facilitatedirect "Waste to Granules" at single station, thereby eliminating grindingoperations as well as facilitates complete utilisation of rework material.

• Introduction of online socketing operations in pipe production eliminated 84,000Kms of tractor movement saving 8,400 litres of diesel during 2010–11.

• All Electric injection moulding machines reduced 500 liters of hydraulic oil permachine reducing waste generation.

Agri Park & Tissue Culture

During the year the measures taken for reduce energy consumption are as follows :

• Instrumentation : The lab has in place an instrumentation facility whichincludes general instrumentation and centralized instrumentation. By adopting thecentralized instrumentation, we are able to reduce energy consumption by about 30%.

• The innovative process developed for micro-propagation of banana has enabled usto save 25% electrical energy.

• At banana hardening center nine solar power operated pumps totalling 75 HP hasbeen installed to replace one 63 kva power generator and to fulfill increased powerdemand.

• 10 numbers of solar based water pump have been installed for irrigation tosubstitute electrical energy at our research farm.

Food Park

30% of the energy requirement of the division is now met through the renewableresources, post commissioning of the Bio-gas plant last year. Apart from generatingelectricity, the project is now utilising the waste heat to run vapour absorption systemthereby resulting in 15% reduction in refrigeration load.

The division is now in the process of installing a Biomass/Bio-gas boiler, which willresult in 20% of the steam requirement being met by renewable resources.

Solar/Green Energy

The 1.7mw Bio Gas Plant becoming fully operational has resulted in substantial energyconservation during the year.

Plastic Park

• Company has imported and established Rapid Prototyping technology. This hasfacilitated Company to develop the new products First Time Right and reduced the productdevelopment time giving full security to in-house design.

• Technology of high precision, high speed, low cycle time injection moulding isimported from Europe and established. This technology absorption with high cavitationmoulds enhanced productivity by 1200%.

• First of its kind in the country, high capacity extrusion machines areestablished with 1500 kg/hr of through put.

• Company has established ERP (Enterprise Recourse Planning) SAP system for itsentire business operations, thereby integrating various island activities and obtainedreal time business project status.

Agri Park & Tissue Culture

• At R&D laboratory center few new sophisticated instruments viz. Real-timePolymerase Chain Reaction (PCR), fluorescence spectroscropy, auto titrator and lyophilizerwere added.

• The new process developed for micro propagation of banana has been taken up forproduction with better efficiency.

• A new approach has been developed for soil analysis and fertilizerrecommendation for sustainable farming by introducing a Soil Health Card which addressesthe soil nutrient status and provides scope for recommendation of nutrients for variouscrops in question.

Food Park

The technology for unloading and pre-treatment of fruits developed in-house by theCompany few years back has now been fully commercialised in all the plants.

Energy Park

Solar application R&D equipped with advanced instruments required for electronicsR&D has been fully absorbed/ developed.

Agri Park & Tissue Culture :

• In tissue Culture a new protocol has been developed for producing micro tubersof Potato. This work had been initiated after the enquiries received from few of ourdomestic and international customers associated with fruit & vegetable processing. Theachievement will attract potato processor / farmers in propagating their valuable plantingmaterial through tissue culture while organization will get a benefit to increase thebusiness.

• An innovative process has been developed for micropropagation of banana withreduced energy, increased work efficiency and less space requirement. This will helporganization to increase the production capacity minimum by two fold.

• Onion : During the last year we could release a new hybrid of high solid onionvariety for contract farming.

• Isolation of methane producing micro organisms (methanogens): The biotech labhas standardized and optimized protocol for isolation of Methanogens through itsidentification in in vivo / in vitro cultures.

• Study of Molecular mechanism of Flowering : Flowering is a very importantbiological phenomenon. Banana improvement through conventional means is very laborious andtime consuming and with the intervention of modern bio-technological approaches, this taskbecomes relatively easier, as we know its crop biology. To understand how the flowering isregulated in Musa, at the molecular level, this research becomes pertinent. The fulllength FT3 gene has been cloned and the sequence has been submitted to National Centre forBiotechnology Information (NCBI) data base.

• Cloning & Sequencing of Jatropha Mosaic Virus (JMV) : Jatropha is infectedby Mosaic Virus (Jatropha Mosaic Virus, JMV), resulting in to serious damage to crop. Wetried to characterize the JMV. It has been found out that there are two componants of DNAin JMV of approximately 2.7kb. Both the components were cloned and sequenced. Both thesesequenced DNAs have been submitted to NCBI database.

• Rice Cultivation under Drip Irrigation : As reported earlier this project hasentered into new phase of adoption and now the technology we are demonstrating it atfarmers field.

Food Park

Following projects were initiated in the year and few of the projects have since beencompleted.

1. Conservation of Water and improving microbiology of Onions.

2. Improving quality of stored Onions to avoid wastage in storage and processing.

3. Improving quality of the Dehydrated Onions.

4. Modification in the pre-treatment process of Mangoes to improve quality.

Green Energy/Solar Park

Following projects were initiated in the year and few of the projects have since beencompleted

• LED & CFL street light, home light, lantern developed as per Ministry of NonConventional and Renewable Energy (MNRE) Specification & approved from by the MNRE.

• Enclosure developed for Luminary products.

• Solar Pump controller development has started.

• SMS Data logger development has started.

• Technological study of grid tie and off grid Inverters .

Plastic Park

• In the area of MIS & SIS nearly 65 new elements are developed. This hasextended the range of some of existing products and added new features to some products.

• Company has developed manufacturing process for production Total Lead and TinFree casing pipes, column pipes & plumbing pipes, thereby making the product moreenvironmental friendly.

• New pump connector developed in Sprinkler system has eliminated additional toppump connector, resulting in reduction of inventory.

• Development of Single Metal Clamp Plus has eliminated metallic ring in theassembly there by conserving natural resources and energy required for its production.

22.Acknowledgement

The Directors take this opportunity to place on record their appreciation of wholehearted support received from all stakeholders, customers and the various departments ofCentral and State Governments, Financial Institutions, Bankers, the Dealers and Suppliersof the Company. The Directors wish to place on record their sense of appreciation for thedevoted services of all the associates of the Company.

Annexure to Directors’ Report - 2010-11

Statement of Particulars of employees pursuant to the provisions of Section 217(2A) ofthe Companies Act, read with Companies (Particulars of Employees)Rules, 1975, as amendedup to date.

1] Shri Ashok B. Jain, Shri Anil B. Jain, Shri Ajit B. Jain and Shri Atul B.Jain are related to each other as brothers and sons of Chairman Shri B H Jain.

2] Remuneration includes perquisites and commission

3*] Remuneration includes perquisite value of ESOP