Pilani Investment & Industries Corporation Ltd

TO THE SHAREHOLDERS

Dear Shareholders,

We have pleasure in presenting the Annual Report of the Company along with the AuditedStatements of Accounts for the year ended 31st March, 2012. The Financial Results for theyear are shown below:-

The profitability of the Company during the year under review appears less mainly dueto receipt of lesser dividend from few Companies and provision for diminution in the valueof units of some schemes of the Mutual Funds. News from Overseas Markets mostly fuelled bydebt crisis in Europe and disappointments on macro front locally were the major factorsfor the capital markets to fall. In order to control high inflation, RBI has continuedtighter monetary policies resulting in higher interest rates on the borrowings by variouscompanies affecting their margins. The economy has grown by 6.9% in 2011-2012 and RBI haspegged GDP growth rate for the current fiscal year at 7.3%.

DIVIDEND

The Board of Directors has recommended a dividend of Rs 25/- (Rupees Twenty Five only)per share of Rs 10/- each equivalent to 250% (two hundred fifty percent) on the paid upequity share capital of the Company for the year ended 31st March, 2012 as against Rs 25/-(Rupees Twenty Five only) equivalent to 250% (two hundred fifty percent) paid in theprevious year on the equity shares of Rs 10/- each. The dividend will be paid whendeclared by the shareholders in accordance with law. The dividend will be free of tax inthe hands of the shareholders. The Company will have to pay dividend distribution tax atthe rate of 15% plus applicable surcharge and education cess, aggregating about 16.2225%on the dividend amount so distributed.

DIRECTORS

Shri Kumar Mangalam Birla and Shri K. K. Daga, Directors of the Company retire from theoffice by rotation at the forthcoming Annual General Meeting but being eligible offerthemselves for re-election.

DIRECTORS' RESPONSIBILITY STATEMENT

In compliance with Section 217(2AA) of the Companies Act, 1956, the Directors to thebest of their knowledge and belief confirm that —

(i) in the preparation of the Annual Accounts, the applicable accounting standards havebeen followed alongwith proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies as mentioned in Note 2.1 ofthe annual accounts and applied them consistently and made judgements and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at the end of the financial year as on 31st March, 2012 and the Profit or Lossof the Company for the financial year ended on that date;

(iii) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the aforesaid Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

The Company has in place a system of Corporate Governance. A separate Report onCorporate Governance is enclosed as a part of this Annual Report of the Company. Acertificate from Auditors of the Company regarding compliance of Corporate Governance asstipulated under Clause 49 of the Listing Agreement is annexed to the Report on CorporateGovernance.

SUBSIDIARY COMPANY

The Audited Accounts and Directors' Report of the subsidiary are annexed hereto.

AUDITORS

S.R. Batliboi & Co., the Auditors of the Company, retire, and being eligible, offerthemselves for reappointment.

AUDITORS REPORT

The observations made in the Auditors Report are self explanatory and, therefore, donot call for any further explanation under Section 217(3) of the Companies Act, 1956.

EMPLOYEES

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies(Particulars of Employees) Rules, 1975, are not applicable as no employee was in receiptof such remuneration as provided under the said Section.

DEPOSITS

The Company has not accepted any public deposit during the year. Hence, no informationis required to be appended to this report in terms of Non-Banking Financial CompaniesAcceptance of Public Deposits (Reserve Bank) Directions, 1998.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING ANDOUTGO

The Company has no manufacturing activity and therefore, the disclosure of particularsas required to be appended under Section 217(1)(a) of the Companies Act, 1956, in so faras it relates to the Conservation of the Energy and Technology Absorption is notapplicable. Particulars with regard to Foreign Exchange Earnings and Outgo appear in Note29 to the accounts and forming part of this Report.

CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statements have been prepared by the Company in accordancewith the requirements of Accounting Standard-21 issued by the Institute of CharteredAccountants of India and as stipulated by Clause 32 of the Listing Agreement with theStock Exchanges with which the Shares of the Company are listed. The Audited ConsolidatedFinancial Statements form part of the Annual Report.

APPRECIATION

Your Directors place on record their deep appreciation for the committed servicesrendered by the employees of your Company.

A. Atlas Iron & Alloys Limited

i) Atlas Iron & Alloys Limited, subsidiary of the company went into CreditorsVoluntary winding up vide its resolution dated 16th June, 1975 and the winding upproceedings are in progress.

The information required to be given pursuant to Section 212 of the Companies Act,1956, in respect of the Subsidiary as is applicable in view of the aforesaid is givenbelow.

ii) Pilani Investment and Industries Corporation Limited held 72,000 Equity Shares ofRs 10/- each amounting to 96.83% of the total paid up Capital of 74,358 Equity Shares of10/- each of Atlas Iron & Alloys Ltd. and continues to hold the same. In view of theSubsidiary being in liquidation and losses sustained by it, the investment of 7.20 lacs inthe shares of the subsidiary as aforesaid is taken at nil value.

B. PIC Properties Limited

Pilani Investment and Industries Corporation Limited held 50,002 Equity Shares of Rs10/-each being the whole of the subscribed capital of PIC Properties Ltd. as on 31stMarch, 2012. The Financial year of the Company as well as the subsidiary ended on 31stMarch, 2012.

a) The net aggregate amount, so far as it concerns members of holding company and isnot dealt with in the Company accounts, of the Subsidiary's profits after deducting itslosses or vice versa.

For the Financial year of the Subsidiary Rs 2,72,278 [Previous year Rs 4,07,877]

b) The net aggregate amount of the profits of the Subsidiary after deducting its lossesor vice versa, so far such profits/losses are dealt with in the company's profits for thefinancial year of the Subsidiary is nil.

AUDITORS' CERTIFICATE

TO THE MEMBERS OF PILANI INVESTMENT AND INDUSTRIES CORPORATION LIMITED

We have examined the compliance of conditions of Corporate Governance by PILANIINVESTMENT AND INDUSTRIES CORPORATION LIMITED, for the year ended 31st March, 2012, asstipulated in clause 49 of the Listing Agreement of the said Company with stock exchanges.

The compliance of conditions of Corporate Governance is the responsibility of themanagement. Our examination was limited to procedures and implementation thereof, adoptedby the company for ensuring the compliance of the conditions of the Corporate Governance.It is neither an audit nor an expression of opinion on the financial statements of theCompany.

In our opinion and to the best of our information and according to the explanationsgiven to us, we certify that the Company has complied with the conditions of CorporateGovernance as stipulated in the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the futureviability of the Company nor the efficiency or effectiveness with which the management hasconducted the affairs of the Company.