P I Industries Director Discussions


Dear Members,

Your Directors are pleased to present the 76th Annual Report on the business and operations of the Company (PI) together with the Audited Financial Statements for the financial year ended March 31, 2023.

1. FINANCIAL HIGHLIGHTS (STANDALONE) (in million)

Particulars

FY 2022-23

FY 2021-22

Revenue from Operations

62,704

50,769

Other Income

1,589

999

Profit Before Interest, Depreciation and Tax

16,789

12,112

Interest

355

123

Depreciation

2,217

1,984

Profit before Tax & Exceptional items

14,217

10,005

Less: Current Tax

(2,567)

(1,852)

Deferred Tax

(464)

(44)

Profit after Tax

12,114

8,197

Add: Other Comprehensive Income

(396)

87

Total Comprehensive Income

11,718

8,284

Balance of retained earning brought forward from previous year

36,008

28,563

- Profit for the year

12,114

8,197

- Other Comprehensive Income (OCI) for the year

(396)

87

Appropriations: -

-

-

Final Dividend on Equity Shares 2021-22

455

-

2020-21

303

Interim Dividend on Equity Shares 2022-23

683

2021-22

455

Dividend Distribution Tax on Equity Shares

-

-

Transfer to General Reserve

-

-

Balance Profit carried forward

46,035

36,008

Earnings Per Share - Basic (in )

79.84

54.03

- Diluted (in )

79.84

54.03

2. KEY HIGHLIGHTS

The Companys Revenue from Operations for the year ended March 31, 2023, on a standalone basis stood at 62,704 Million as compared to 50,769 Million in the previous year registering a growth of 23.5% on YoY basis. The Operating Profit for the year was at 15,200 Million as compared to 11,113 Million in the previous year i.e., an increase of 36.78% YoY. The Net Profit for the year on standalone basis stood at 12,114 Million as compared to 8,197 Million in the previous year i.e., a growth of 47.79% YoY.

The Companys Revenue from Operations for the year ended as on March 31, 2023, on consolidated basis stood at 64,920 Million

as compared to 52,995 Million in the previous year, registering a

growth of 22.50% on YoY basis. The Companys Net Profit for the year ended March 31, 2023, on consolidated basis stood at 12,295 Million during the year as compared to 8,438 Million in the previous year, a growth of 45.71% YoY.

Inspired by Science

The Earnings Per Share (EPS) for the year stood at 81.06 per share, shows a growth of 45.66% as compared to 55.65 per share for the previous year.

The Company invested 425 Million in fixed assets for the expansion of manufacturing and Research & Development capacities.

No amount was transferred to general reserves during the year.

3. PRESENTATION OF STANDALONE AND CONSOLIDATED FINANCIAL STATEMENTS

The financial statements of the Company for FY 2022-23, on a standalone and consolidated basis, have been prepared in compliance with the Companies Act, 2013 (the Act) applicable Accounting Standards and the Listing Regulations and amendments thereto and are disclosed 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, the Company launched seven new products, namely Distruptor, Brofreya, Dinoace, Taurus (Insecticide), Tomatough (Biostimulant), Provide (Herbicide) & Sectin (Fungicide).

• Distruptor is an innovative technology which protects the Rice crop from devastating pests like BPH (Brown Plant Hopper) & WBPH (White Backed Plant Hopper). Powered with XP technology it works on all stages of BPH. Distruptor launch in rice markets across the country has placed us well in the dynamic BPH segment.

• Dinoace is a dual action insecticide recommended for sucking pests control on Cotton crop. It is powered by DSA technology which gives quick knockdown action & a long duration control.

• Brofreya is a revolutionary insecticide which is bringing technological advancement for Indian farmers. It gives cross spectrum control on Lepidopteran & sucking pests. It is a safer chemistry with only 1 day PHI (Pre-Harvest Interval).

• Taurus is first addition of a nematicide in PIs portfolio. It helps in management of nematodes in Tomato crop.

• Tomatough is a seaweed-based product which, with its superior technology, helps in boosting plant health & endogenous immunity in crops.

• Sectin is a combination fungicide with excellent curative control against Downy mildew & late blight.

• Provide is a herbicide with pre-emergence to post-emergence application on Cotton crop. With advanced MEC formulation & dual mode of action, it gives broad-spectrum control. The addition of Provide has strengthened PIs Cotton Crop Solution (CCS) portfolio.

Normal monsoon season during the crop sowing period of Kharif supported timely sowing of crops and normal acreages in each crop segment. Continuous rain in June-July resulted in the growth of herbicides. Newly introduced cotton herbicide Provide was received well in the market. Likewise, Elite on Corn crop also performed well for the business.

Tremendous efforts were made by the organization to support ongoing transition from a product approach to a crop solution approach. Different initiatives were taken for it- Dhan Dhaan Kisaan for rice crop, CCS plots for cotton crop, and chilli micro battle for chilli crop (Horticulture business). These initiatives have kept all stakeholders focused on the goal.

The Companys exports grew 26% during FY23 as compared to the previous year due to scale up of existing products and introduction of 4 new products.

The Company successfully commercialized 4 new molecules during the year, which also included 2 new Electronic Chemicals, marking the Companys 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 "Flow-Chemistry" at the commercial plant level, successfully commissioned a manufacturing facility for MMH and established Azide chemistry at a commercial scale.

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. The Company implemented 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, increasing the share of renewable energy in total energy sourcing and has further undertaken concrete measures for reduction of carbon footprint and water consumption. The Company has increased thrust on use of renewable energy usage and its share of the same in FY 23 has been 5.1% of total requirements. This is achieved by the implementation of energy sourcing through solar and hybrid power at all manufacturing locations.

In the past year, the Company has made significant progress in our digital initiatives, including application modernization, analytics, adoption of cloud technology, and strengthening our information security posture. One of the major achievements has been the successful modernization of the legacy applications, which has improved its performance and made it more user-friendly. The Company has also invested heavily in analytics, which has enabled it to gain deeper insights into business operations and make data-driven decisions. Furthermore, its adoption of cloud technology has enabled it to be more agile and responsive to changing business needs. It has migrated key applications and workloads to cloud, which has improved its scalability, reliability and reduced costs. Additionally, it 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.

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.

5. AWARDS AND RECOGNITIONS

The Research & Manufacturing facility of the Company at Udaipur bagged the Karkhana Suraksha Puraskar 2023 (Factory Safety Award 2023) under the category of Large-Scale Industries. The award was presented by the Factories and Boiler Inspection Department, Rajasthan, in association with National Safety Council - Rajasthan State Chapter on the occasion of the 52nd National Safety Day, March 04, 2023.

The Company has been declared the winner of the esteemed Golden Peacock Award for Corporate Social Responsibility for the year 2022 by the Awards Jury under the Chairpersonship of Honble Justice M. N. Venkatachaliah, former Chief Justice of India and former

Chairperson, National Human Rights Commission of India, and National Commission for Constitution of India Reforms.

The Company retained Ecovadis Gold medal in sustainability achievement in 2022, with 97 percentile ranking.

The Company has been awarded the prestigious Golden Peacock National Quality Award for the year 2022. The list was declared by the Awards Jury under the Chairpersonship of Honble Justice M.N. Venkatachaliah, former Chief Justice of India and former Chairperson, National Human Rights Commission of India and National Commission for Constitution of India Reforms after scrutiny of over 265 applications.

The Company has been featured amongst Indias Top 500 companies 2022 in the list of ESG-driven enterprises released by Dun & Bradstreet on July 14, 2022, and was also conferred the Corporate Award 2022 for Outstanding Performance.

The Company has been featured amongst the biggest players in Indias $212 billion Chemical Industry that is fuelling the chemical boom in India in Fortune India magazine, July 2022 issue.

Mr. Mayank Singhal, Vice Chairperson and Managing Director of the Company, was honoured as Indias BEST CEO in the Agriculture & Allied sector at the 10th edition of the Business Today (BT-Mindrush) event held on June 24, 2022. The award was presented to him by the Honble Minister Shri Piyush Goyal (Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution, and Textiles, Govt. of India), in the august presence of Mr. Narayana Murthy (Infosys), Shri R C Bhargava (Maruti Suzuki India), T. V. Narendran (Tata Steel), S. N. Subrahmanyan (Larsen & Toubro) and several other industry leaders.

The Companys manufacturing site at Jambusar (Gujarat) has been successfully awarded ISO 9001:2015 certification. This prestigious certification is a testimony to the Companys quality commitment.

Mr. Mayank Singhal has also been chosen to lead CII Northern Regions (CII-NR) Committee on Agriculture, Food Processing and Dairy as its Chairperson for 2022-23. This special recognition comes from his outstanding contribution and commitment to CII-NR which works to create and sustain an environment conducive to the development of India, partnering with industry, government, and civil society through advisory and consultative processes.

Mr. Mayank Singhal has also been recognized as Asias Promising Business Leader by the Economic Times (ET), a widely read business- focused daily newspaper from The Times Group during The Economic Times Asian Business Leaders Conclave 2021-22.

6. RESEARCH & DEVELOPMENT (R&D)

During the financial year FY 23, various departments of R&D have integrated into a new "PI Research & Development", to make a broader use of resources, capabilities and to realize synergies.

The process R&D team was actively engaged in more than 50 projects in the areas of agrochemistry, electronic chemicals, and life cycle management. Literature search, feasibility analysis and lab studies were carried out for 36 projects that are targeting external customers. For 10 of these projects, representative samples have been prepared and submitted to various customers for evaluation and validation. Process demonstration has been completed on kilolab and pilotplant scale for 13 projects, and 6 projects are presently in various stages of commercialization.

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 result in a reduced ESG-related footprint, exemplifying opportunities to adopt this technology for further projects.

To extend the backward integration into key intermediates for new and ongoing projects, R&D activities on the area of gas phase fluorination have been initiated.

A new biotechnology laboratory 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 the technology platform of PI as a whole.

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 for biological testing and with farm resources for first field trials. This facility supports various R&D projects, with a focus on plant diseases, animal pests and weed control. Scientifically, it involves chemical synthesis from discovery to scale-up, analytics for structural elucidation, quantitation as well as preparative purification and separation, molecular design and modelling, classical biological evaluation (in vitro lab, in vivo lab, greenhouse, and 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 Companys R&D strategy and its implementation are well supported by a strong team of more than 450 research scientists with international experience, having state-of-the-art expertise in chemistry, analytical techniques, biological and biochemical testing, mode of action studies, tox and e-tox studies, IP management and basic and detailed process engineering including process safety.

The research assignments are involving global partners including CROs offering expertise in special areas of chemistry, engineering, IT, special analytical, biology, global field trials, and regulatory disciplines. This is complemented by a growing network of contacts to academia within India and on an international scale.

With respect to its customer research and manufacturing business, the Company continues to pursue cost leadership in which the R&D team is playing a vital role by focusing on process innovations and cost improvement opportunities for the existing product portfolio, to identify cost improvement opportunities and at the same time maintaining the highest standards of Quality, Health, Safety and Environment (QHSE). The Companys R&D and manufacturing teams are constantly working together following the ESG paradigm, e.g., with respect to green chemistry, waste reduction, energy savings, minimizing the carbon footprint, reducing the environmental load, and enhancing 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 15,021 Million. The Company follows a prudent financial policy and aims at maintaining an optimum financial gearing. The Companys debt to equity ratio was Nil as on March 31, 2023.

In the financial year 2022-23, 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 Companys financials.

8. DIVIDEND

During the year, the Board of Directors of the Company declared an interim dividend of 4.5/- per equity share in its Board meeting held on February 14, 2023, on 15,17,18,118 equity shares of face value of 1/- each which was paid on March 06, 2023.

The Board of Directors at its meeting held on May 18, 2023 has recommended a final dividend of 5.5/- per equity share 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 and Central Depository Services (India) Limited as on record date i.e., August 11, 2023, fixed for this purpose. The total dividend for the year would be 10/- 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 Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") the Company has formulated its Dividend Distribution Policy which specifies the financial parameters, internal and external factors that are to be considered by the Board while declaring a dividend. Dividend Distribution Policy is uploaded on the Companys website i.e.

https://www.piindustries.com/Media/Documents/Dividend%20

Policy%20(f).pdf

9. SUBSIDIARIES & JOINT VENTURES

As on March 31, 2023, the Company had seven (7) wholly owned subsidiaries and two (2) joint ventures with leading Japanese companies. In accordance with Section 129(3) of the Companies Act, 2013, 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 2,863 Million with net profit of 174 Million posted during the year ended March 31, 2023.

ii. PI Health Sciences Limited

The Company owns 100% stake in PI Health Sciences Limited. It is engaged in the pharmaceutical business. In order to enable its plans of growth and expansion in the pharmaceutical sector, PI Health Sciences Limited has incorporated a wholly-owned subsidiary in Netherlands i.e., PI Health Sciences Netherlands B.V on April 07, 2023 and also acquired 100% shareholding in two companies i.e., Therachem Research Medilab (India) Private Limited and Solis Pharmachem Private Limited on June 02, 2023. Further, 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.

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. The Company posted a profit of 39.87 Million during the year ended March 31, 2023, 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. The Company posted a net profit of JPY 3.42 Million during the year ended March 31, 2023. Due to the size of operations and local laws, the annual accounts of this Company are not required to be audited. The same have been certified by the management of the Company for the purpose of consolidation.

v. PILL Finance and Investments Limited

The Company owns 100% stake in PILL Finance and Investments Limited. The Company posted a profit of 0.41 Million during the year ended March 31, 2023.

vi. PI Bioferma Private Limited

The Company owns 100% stake in PI Bioferma Private Limited. The Company is yet to start the business operations.

vii. PI Fermachem Private Limited

The Company owns 100% stake in PI Fermachem Private Limited. The Company is yet to start the business operations.

In terms of Regulation 16(1)(c) of the SEBI (LODR) Regulations, 2015, the Company does not have any material subsidiary as on March 31, 2023.

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 Agro Inc., Japan, (MCAG) 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 MCAG, Japan. Solinnos posted a net profit of 31.24 Million during the year ended March 31, 2023.

ii. PI Kumai 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 Ltd. The aforesaid joint venture posted a profit of 106.31 Million during the year ended March 31, 2023.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the subsidiaries and associate companies is given in form AOC-1 attached as Annexure A to this Report.

In accordance with the provisions of Section 136 of the Companies Act, 2013, the Annual Report of the Company, containing the Standalone and Consolidated Financial Statements along with the audited annual accounts of each subsidiary have been placed on the Companys website i.e. https://www.piindustries.com/investor-relations/co-go/ Subsidiary-Financial-Statements

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 Listing Regulations, the Company has constituted a Risk Management Committee of the Board. As on March 31, 2023, the Committee comprises of 4 members including 1 Independent Director of the Company. The Committee met on September 02, 2022 and February 28, 2023. 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 Companys 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 uses SAP ERP to process financial transactions and maintain its books of accounts to ensure its adequacy, integrity and reliability. The Company has also deployed 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 an appointed auditing firm. M/s Ernst & Young LLP have been engaged as the Corporate auditors covering all central corporate functions along with the CSM business vertical, and PKF Sridhar & Santhanam LLP who are covering the Agri Business vertical along with Depot audit. The agencies perform the internal audit, and also 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 Companys internal financial controls were adequate and effective as on March 31, 2023.

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 arms 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 Companys Policy on Related Party Transactions read with the Listing Regulations and accordingly, the disclosure of Related Party Transactions in Form AOC - 2 is not applicable. However, names of related parties and details of transactions with them have been included in Notes to the financial statements.

Prior omnibus 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 Companys website i.e.

https://www.piindustries.com/Media/Documents/Policy%20on%20

Related%20Party%20Transactions.pdf

13. AUDITORS Statutory Auditor

The shareholders of the Company at 75th AGM held on September 03, 2022 had re-appointed M/s. Price Waterhouse Chartered Accountants, LLP, (ICAI Registration No-012754N/N500016), as the Statutory Auditors of the Company for a second term of 5 years and accordingly they hold their office from the conclusion of 75th AGM till the conclusion of 80th AGM of the Company to be held in 2027. The Auditors Report is unmodified i.e., it does not contain any qualification, reservation or adverse remark or disclaimer.

Cost Auditor

Pursuant to the directives issued by the Central Government under Section 148 of the Companies Act, 2013, an audit of the cost records relating to Insecticides (Technical grade and formulations) manufactured by the Company is required to be conducted by a cost auditor. The Board has appointed M/s K.G. Goyal & Co., Cost Accountants, Jaipur, as Cost Auditors, based on the recommendation of the Audit Committee for the conduct of the audit of cost records of Insecticides (Technical grade and formulations) for the year ended March 31, 2023.

The Board of Directors on the recommendation of the Audit Committee has approved the remuneration payable to Cost Auditors. In terms of Section 148 of the Companies Act, 2013 and rules made thereunder, members are requested to consider the ratification of remuneration payable M/s KG Goyal & Co., Cost Accountants.

As per Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost records and accordingly, such accounts and records are maintained.

Secretarial Auditor

The Board had appointed Mr. Rupinder Singh Bhatia (CP No.2514), Practicing Company Secretary, as Secretarial Auditor to carry out Secretarial Audit in accordance with the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, for the financial year ended March 31, 2023. The Secretarial Audit Report for the financial year ended March 31, 2023 has been obtained and does not contain any adverse qualification, which requires any comments from the Board. The Secretarial Audit Report for the financial year ended March 31, 2023, is annexed to this report as Annexure B.

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 under the provisions of Section 186 of the Companies Act, 2013 are mentioned in the Notes to the financial statements.

15. DEPOSITS

The Company has not accepted any public deposits during the financial year 2022-23 and no amount of principal or interest was outstanding as on March 31, 2023.

16. TRANSFER OF UNCLAIMED DIVIDEND AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, the Company had transferred an amount of 6,82,885/- towards unclaimed dividend pending for more than seven years to the Investor Education and Protection 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 unclaimed amounts lying with the Company as on the date of last AGM held on September 03, 2022, on the Companys website and same is also available on the on the website of the Ministry of Corporate Affairs. The details can be viewed at the Companys website i.e.

https://www.piindustries.com/investor-relations/sh-ce/

Shareholders-Information

Pursuant to the provisions of section 124 of the Companies Act, 2013 read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has transferred 1,800 equity shares on October 29, 2022, 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 by making an application in form IEPF-5 online with IEPF authority. Ms. Sonal Tiwari, Company Secretary acts as a Nodal Officer of the Company for IEPF matters.

17. BOARD AND COMMITTEES Board of Directors

The Companys 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, 2023, the Board of Directors comprised of eight (8) Directors out of whom two (2) are Executive Directors including Vice Chairperson & Managing Director and Joint Managing Director apart from six (6) Non-Executive Directors, out of which four (4) are Independent Directors including two (2) Women Independent Directors and two (2) Non-Executive Non-Independent Directors. The composition of the Board is in conformity with Regulation 17 of the Listing Regulations and the relevant provisions of the Companies Act, 2013. The Board members possess requisite qualifications and experience in general corporate management, strategy, finance, banking, taxation, risk management, merger & acquisitions, human capital & compensation, technology, legal and regulatory fields which enable them to contribute effectively to the Company in their capacity as Directors of the Company.

Mr. Narayan K Seshadri (DIN: 00053563) completed his second consecutive term as an Independent Director of the Company and ceased to be an Independent Director of the Company from closing hours of September 05, 2022. Further, he has been appointed as a Non-Executive Non-Independent Director of the Company w.e.f. September 06, 2022, pursuant to approval granted by the shareholders in the AGM held on September 03, 2022.

Mr. Shobinder Duggal (DIN: 00039580) was inducted as Additional Director on Board on November 12, 2021. Further, his appointment was regularised in the AGM held on September 03, 2022 as Independent Director.

Ms. Pia Singh (DIN: 00067233) was inducted as an Additional Director on the board w.e.f. August 03, 2022. Further, her appointment was regularised in the AGM held on September 03, 2022, as Independent Director.

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Arvind Singhal (DIN: 00092425) retires by rotation at the forthcoming 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. Arvind Singhal are given in the notice of AGM.

Dr. Raman Ramachandran (DIN: 00200297) resigned from the position of Non-Executive Non-Independent Director on the Board w.e.f. July 01, 2022, to pursue other interests in management and coaching. He has confirmed that there is no other material reason for resignation other than that mentioned in his resignation letter. The Board placed on record its appreciation for the services provided by him during his association with the Company.

Ms. Ramni Nirula (DIN: 00015330) completed her second consecutive term as an Independent Director of the Company and ceased to be Independent Directors of the Company from closing hours of September 05, 2022. The Board placed on record its appreciation for the services provided by her during his association with the Company.

Mr. Pravin K. Laheri (DIN: 00499080) completed his second consecutive term as an Independent Director of the Company and ceased to be Independent Directors of the Company from closing hours of September 05, 2022. The Board placed on record its appreciation for the services provided by him during his association with the Company.

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 provided under section 149(6) of the Act and regulation 16 of the Listing Regulations. The Independent Directors have also confirmed compliance with the provisions of rule 6 of Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended, relating to inclusion of their name in the databank of independent directors.

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 the Listing Regulations.

Details, as required under the Companies Act, 2013 and Listing Regulations, 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

Mr. Naresh Kapoor resigned as Company Secretary of the Company w.e.f. June 16, 2022. The Board placed on record its appreciation for the services provided by him during his association with the Company.

Ms. Sonal Tiwari was appointed as the Company Secretary of the Company w.e.f. December 10, 2022.

There has been no change in other Key Managerial Personnel of the Company during the year under review since the last report.

Evaluation of the Boards Performance

In compliance with the provisions of Companies Act, 2013 and Regulation 17(10) of the Listing Regulations, 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 Board and Nomination and Remuneration Committee at their meetings held on May 18, 2023, 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 May 17, 2022, August 03, 2022, August 10, 2022, November 08, 2022, December 10, 2022, February 14, 2023 and March 06, 2023. Facility to attend meetings through video conference mode was provided for all 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, 2023, 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.

Stakeholders Relationship Committee

The Stakeholders 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 and reference of various Board Committees, number of Board and Committee meetings held during FY 2022-23 and attendance of the Directors at each meeting is provided in the Report on Corporate Governance, which forms part of this Report.

Directors Responsibility Statement

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

(a) in the preparation of the annual accounts for the year ended March 31, 2023, 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, 2023 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 Companys 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 Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the copy of Annual Return in the prescribed form, which will be filed with Registrar of Companies/MCA, can be accessed at the Companys website i.e.

https://www.piindustries.com/investor-relations/co-go/annual-

return

19. SECRETARIAL STANDARDS 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 Executives of the Company including the criteria for determining qualifications, positive attributes, independence of a Director and other related matters have been provided in the Corporate Governance Report, which forms part of this Report.

Caring, Creative, Courageous and Curious are our Values which guide and propel us towards living our Purpose of Reimagining a healthier planet. Our work culture encourages innovation which in turn enables us to recharge, explore new opportunities, and deliver business goals. In this growth trajectory, our diverse human capital plays the most significant role. At PI, we are committed to attract, onboard, develop, engage, and retain diverse talent to ensure sustainable growth. Our talent philosophy offers all-round developmental opportunities for employees across the board. Our focus on technology driven processes & solutions encourages our employees to upskill themselves in the latest technological advancements in their domains. As an organization, we stay committed towards a strong employer brand, creating a diverse workforce, supporting the wellbeing of our people and care for their overall success.

Policy on Prohibition, Prevention and Redressal of Sexual Harassment at Workplace

The Company has a zero tolerance for any abuse against women 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 (Prohibition, Prevention 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 2022-23. All the complaints were disposed of during the period and there were no complaints pending as on March 31, 2023.

Particulars of Employees and related disclosures

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report and annexed as Annexure C. 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 discontinued the grant of stock options under PII- ESOP Scheme, 2010 in the year 2017 as per the recommendation(s) of Nomination and Remuneration Committee of the Board. However, the stock options already granted, vest as per the terms and conditions contained in the grant letter. As per the Companys ESOP scheme, options vest after a lock in period of one (1) year from the date of grant in a graded manner over the vesting period of four (4) years. The exercise price of stock options granted have been arrived by giving discount to the closing market price of the equity share on National Stock Exchange India Limited one day prior to the date of grant of option. 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 Companys 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 Companys website i.e.

https://www.piindustries.com/Media/Documents/Whistle%20

Blower%20Policy(r).pdf

The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and 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 Companies Act, 2013 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 Companies Act, 2013, the Company has a CSR Committee comprising four (4) members with Ms. Pia Singh as Chairperson, Mr. Mayank Singhal, Mr. Rajnish Sarna and Dr. T.S. Balganesh as Members. During FY 2022- 23, the Committee met four 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 FY 2022-23 was ^165.17 Million. As on March 31, 2023, total amount spent on CSR activities by Company was ^137.24 Million. The unspent amount of ^27.93 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 Companys 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 FY 2022-23.

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 (LODR) 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, forms part of this Annual Report as required under Regulation 34(2)(f) of Listing Regulations.

27. INCLUSION IN TOP 100 LISTED ENTITIES

The Company has been included in the list of top 100 listed entities as per market capitalization as on December 31, 2022.

28. GENERAL

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

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

b) Issue of shares (including sweat equity shares) to employees of the Company.

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 Companys 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 FY2022-23.

• A Cash Flow Statement for the FY 2022-23 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.

29. ACKNOWLEDGEMENTS

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

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

The Board places on record its sincere appreciation towards the Companys 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.