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PSL Ltd. Directors Report
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You can view full text of the latest Director's Report for the company.
Market Cap. (Rs.) 5.62 Cr. P/BV 0.00 Book Value (Rs.) -233.81
52 Week High/Low (Rs.) 1/0 FV/ML 10/1 P/E(X) 0.00
Bookclosure 19/09/2019 EPS (Rs.) 0.00 Div Yield (%) 0.00
Year End :2016-03 

To,

The Members of

PSL LIMITED

The Directors hereby present the Twenty Eight Annual Report along with Audited Statements of Accounts of the Company for the Financial Year 2015-16.

FINANCIAL RESULTS

(' in Crore)

Particulars

Standalone

Consolidated

31/3/2016

31/3/2015

31/3/2016

31/3/2015

Gross Sales

101.87

151.18

276.75

304.37

Less: Excise Duty

1.04

4.86

1.04

4.85

Net Sales

100.83

146.32

275.72

299.52

Other Income

5.22

3.94

5.74

6.75

Total Income

106.06

150.26

281.46

306.26

Profit/(Loss) Before Depreciation, Finance Cost, Exceptional items & Tax

(1205.33)

(84.06)

(1181.82)

(117.08)

Less: Depreciation and Finance Cost

150.65

221.74

241.03

290.22

Less: Exceptional items

Nil

171.72

Nil

171.72

Profit/(Loss) Before Taxation Provisions

(1355.98)

(477.53)

(1422.85)

(579.02)

Less: Current Tax

Nil

Nil

27.13

Nil

Profit / (Loss) After Tax

(1355.98)

(477.53)

(1423.13)

(579.02)

Balance Carried to Balance Sheet

(1355.98)

(477.53)

(1423.13)

(579.02)

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the company for the financial perio d 2015-16 are prepared in compliance with applicable provisions of the Companies Act,2013, Accounting Standards and SEBI (Listing Obligation and Disclosure Requirements) Regulations,2015.

DIVIDEND

In view of losses incurred by the Company during the year under review, your Directors have not recommended any dividend for the said year.

TRANSFER TO RESERVES

In view of absence of profits during the financial year under review, your Directors were unable to transfer any amount to the General Reserve Account.

INCREASE OF PAID UP CAPITAL

In compliance of one of the essential Conditions of package of Restructuring of Company’s Debts approved for the Company by CDR Empowered Group on 23rd September, 2013 your Company in its Board Meeting held on 24th May,2016 allotted 25999232 equity shares of the face value of Rs.10/- per share to the seven Promoter Group Entities and one lender of the Company at a premium of Rs.16/- per share in accordance with a SEBI formula prescribed for this purpose. Such allotment of additional equity resulted into enhancement of paid up capital of the Company from its earlier level of Rs.9893.53 Lacs to Rs.12493.45 Lacs.

The Company has procured in-principle approvals from the Bombay Stock Exchange and National Stock Exchange for allotment of aforesaid shares and process for listing of these shares has also been initiated.

RESTRUCTURING OF COMPANY’S DEBTS

The Company in the Month of March, 2013 approached the Corporate Debt Restructuring Cell for restructuring its debts as the Company was not in a position to repay its debts due to huge losses. Consequently the CDR Empowered Group vide its letter of Approval approved the Restructuring scheme of the company in accordance with the Reserve Bank Guidelines.

In accordance with the aforesaid restructuring scheme, the Company has executed various documents in favour of the CDR Lenders including conversion of certain portion of debt of CDR lenders into the equity of the Company. The promoter’s also brought in some contribution partly in cash and partly in kind. However since the Company’s operations and profitability could not see a positive trend due to lack of orders and financial crunch, the Company was not in a position to make the repayment of the Restructured debts. Since the Company’s Net worth had got eroded in the Financial Year 2012-13 the Company also approach BIFR in order to meet the mandatory statutory requirement of Sick Industrial Companies (Special Provision) Act, 1985

REFERENCE TO BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTIONS (BIFR)

Your Company has filed a reference on 19th June, 2015 in Form ‘A' under Section 15 of Sick Industrial Companies (Special Provision) Act, 1985 to the Board for Industrial and Financial Reconstructions (BIFR) for determination of the measures which shall be adopted with respect to the Company. The aforesaid reference has been accepted by the Board on 8th September, 2015 and the same has been registered as case no. 119/2015.

The matter for consideration of PSL Limited as ‘Sick Company' under the provisions of the Sick Industrial Companies (Special Provision) Act, 1985 is pending by BIFR.

OPERATIONAL PERFORMANCE

During the year under review, your Company continued to remain in a grim situation which had commenced during the Financial Year 2012-13 as a direct consequential effect of acute financial crunch then faced by the Company. Even generally the pipeline industry in the Country experienced inadequacy of orders primarily due to delay in implementation of Natural Gas Grid and creation of excess capacity in Industry. The cumulative effect of all these factors virtually forced the Company to remain to lie low, as a result of which the consolidated turnover remained restricted to less than Rs. 300 crores. Although serious efforts were made to minimize the operational costs, the year under review ended with a consolidated loss of Rs. 1423 crores on account of factors such as depreciation, financial cost and other exceptional items.

ACCOUNTS STATEMENTS OF SUBSIDIARY COMPANIES

Your Company has five wholly owned subsidiaries in addition to two step-down subsidiaries and seven associate Companies as on 31st March,2016. There has been no material change in the nature of the business of the Subsidiaries. During the year in question the Board of Directors reviews the affairs of the subsidiaries periodically.

Pursuant to provisions of Section 129(3) of the Companies Act, 2013 the Company has prepared consolidated financial statement of the Company which forms part of this Annual Report. Further, a statement containing salient features of Financial Statements of our subsidiaries (excluding the two subsidiaries in USA) in the prescribed format AOC-1 is appended to the financial statements of the Company.

Further pursuant to the provisions of section 136 of the Companies Act, 2013 the Audited financial statement, consolidated financial statement along with relevant documents and separate audit accounts in respect of subsidiaries are available on the website of the company.

Due to continuous losses suffered by the PSL USA Inc.-the Company’s subsidiary in USA and its step-down subsidiary namely PSL North America LLC has voluntary filed petitions for relief under chapter XI of The United States Bankruptcy code, State of Delaware USA. All the assets of PSL North America LLC were sold to a Company for US$ 100 Million since chapter XI proceeding are still not completed. The impairment of loss/profit on sale of assets will be ascertained/recognized in the current year by the Company. Hence financial results of these two companies have not been included.

ASSOCIATION WITH JINDAL TUBULAR - A SUBSIDIARY COMPANY OF JINDAL SAW LIMITED

Your Company had in the year 2014 entered into an “Operation Maintenance and Management” contract with Jindal Tubular Limited (JTL) in order to mitigate recurring cost of maintenance of the plant and machinery as well as cost of manpower deployed on various locations of Company’s manufacturing activity. As a result JTL took possession of the Company’s Three plants on various dates and commenced manufacturing activities in accordance with the terms and conditions of the aforesaid agreement. However the aforesaid arrangement did not yield any expected returns as the JTL has not shown any profits during the period of agreement.

DIRECTORATE

During the year under review Shri S.P. Bhatia a Whole Time Director of the Company expressed his unwillingness to continue on the Board of the company and submitted his resignation due to his personal reasons. The resignation was accepted by the Board with effect from 29th February, 2016. The Board while accepting his resignation recorded its deep appreciation for the valuable services rendered by Shri. S.P. Bhatia during his tenure.

As per conditions mentioned under CDR package, ICICI Bank appointed Mr. Sandip Sharma as Nominee Director of the Board of your Company. However, ICICI bank vide its letter dated March 23, 2016 withdrew him as our Nominee Director from the Board of your Company.

Consequent upon said changes your Board comprised of only Nine Directors including the Managing Director, two Whole Time Directors, two Non-executive Directors and Four Independent Directors.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions contained in Section 134(3)(C) of the Companies Act, 2013 and subject to disclosures in the Annual Accounts, your Directors state as under:

a) In the preparation of annual accounts of the financial year ended on 31st March, 2016, the applicable accounting standards have been followed and there are no material departures.

b) That the Director have selected appropriate accounting policies in consultation with Statutory Auditors are applied consistently to give a true and fair view of the state of affairs of the company at the end of Financial Year under review and Profit & Loss Account of the period under report.

c) Proper and sufficient care has been taken for maintenance of adequate accounting records and for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) Annual Accounts have been prepared on a going concern basis.

e) That the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.

f) That the Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

KEY MANAGERIAL PERSONNEL A. Company Secretary

During the year under review consequent upon resignation of Mr. Shashi Ranjan effective from 11th May, 2015 from the post of Company Secretary of the Company your board had appointed Mrs. Geeta Girdher as a Company Secretary and Compliance Officer of the Company w.e.f. 10th November,2015. However she was relieved off her duties on 15th March, 2016.

B. Chief Financial Officer

During the year under review Mr. V. Subramaniam a qualified Chartered Accountant as well as a Company Secretary was working as a CFO of the Company. However due to personal reasons he submitted his resignation from the services of the Company on 29th June,2015.

BOARD DIVERSITY

The Company recognizes and embraces the importance of a diverse Board in its success. We believes that a truly diverse Board will leverage differences in thought, perspective, knowledge, skill regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will ensure us retain our competitive advantage. The Board has adopted the Board Diversity policy which sets out the approach to diversity of the Board of Directors.

NUMBER OF MEETINGS OF THE BOARD

Five meetings of the Board were held during the financial year 2015 16, the details of which are given in the Corporate Governance

Report that is annexed to this Report. The intervening gap between any two meetings was not only within the period prescribed by the Companies Act, 2013 but it was also in accordance with SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

DECLARATION BY INDEPENDENT DIRECTORS

Pursuant to provision of section 149(7) of the Companies Act, 2013 the Company has received necessary declaration from each Independent Directors that he meets the criteria of Independence laid down in section 149(6) of the Companies Act, 2013 and Regulations 25 of SEBI (Listing Obligation and Disclosure Requirements) Regulations,2015.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS

Your Company has been constituted a Nomination and Remuneration Committee which is empowered to nominate the number of members of the Board and various standing committees based on their different experience levels, knowledge and educational qualifications in different Sectors and discipline relating to the company’s business.

The remunerations paid to executive Directors are in accordance with the recommendation of the Remuneration Committee as well as by the prescribed law.

Due care is also taken to ensure that the remuneration package is in consistent with the recommended best practices in the country.

BOARD EVALUATION

The Board of Directors has carried out evaluation and performance of the various Board committees after seeking input from the Committee members on the basis of the criteria such as the composition of Committee, effectiveness of committee meeting, noting of minutes, etc.

The Nomination and Remuneration committee of Company has carried out the evaluation of Whole Time Directors of the Company pursuant to provision of Section 178 of the Companies Act, 2013 read with Regulation 19(4) of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015.

In a separate meeting of Independent Directors, performance of Non-independent Directors, performance of the Board as a whole was evaluated, taking into account the views of Executive Directors and Non- executive Directors.

BOARD COMMITTEES

For assisting the Board of Directors in discharging its responsibilities in various fields effectively & efficiently, various Standing and Non-standing Committees are constituted by the Board from time to time. The detail of all standing committees along with their composition and meeting held during the year under review are given in the Report of Corporate Governance which forms part of this Report.

INTERNAL CONTROL AND ADEQUACY

Your Company has a proper and adequate system of Internal Control for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The Internal Control System is supplemented by an extensive audit conducted by well structured Internal Audit Department of the Company. The said audit is by and large conducted on quarterly basis to review the adequacy and effectiveness of internal controls and to suggest improvement for strengthening them. Proper reviews are carried out to ensure follow-up on the audit observations.

RISK MANAGEMENT

The Board of Directors of the Company has formulated a Risk Management Committee which has been entrusted with the responsibility to assist the Board Members about the risk assessment and its minimization procedure. Major risk identified by the business and functions are systematically addressed through mitigating actions on a continuing basis.

CORPORATE GOVERNANCE REPORT & MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 Corporate Governance Report with Auditors’ Certificate thereon and Management Discussion Analysis Report are attached, which form part of this report.

RELATED PARTY TRANSACTIONS

The transactions entered with Related Parties during the period under review were on arm’s length basis and were in the ordinary course of the business. There were no contracts or arrangements or transactions entered into during the year ended on March 31, 2016 which were not at Arm’s length basis and details of material contracts or arrangement or transaction at arm’s length basis are nil. Thus disclosure in form AOC-2 is not required.

STATUTORY AUDITORS AND AUDITORS’ REPORT

The Auditors, M/s Suresh C. Mathur & Co. Chartered Accountants, Auditor of the Company retire at the ensuing Annual General Meeting. They have offered themselves for re-appointment for which they are eligible.

Pursuant to provisions of Section 139 of the Companies Act,2013 the Company has received a Certificate from the retiring Auditors to the effect that the appointment if made, would be in accordance with the Companies Act, 2013 and that they are not disqualified for re-appointment.

The notes to the accounts referred to in Auditor’s Report are self-explanatory and therefore do not call for any further comments by the Board of Directors.

Auditor’s Adverse Observations and Management Response to Auditor’s Adverse Observations are given in the Annexure-1 forming part of this Report.

COST AUDITORS

In accordance with the provisions of Section 148 of the Companies Act, 2013 Mr. V.V. Deodhar, a practicing Cost Accountant was re-appointed by the Board of Directors as a Cost Auditor of your Company for conducting the Cost Audit of “Steel Pipe Products” for the Financial Year 2016-17 at consolidated fees of Rs.4.00 Lacs, subject to ratification of the same by Shareholders of the Company.

SECRETARIAL AUDITOR

A firm of Practicing Company Secretary namely “Avi Sangal & Associates” was appointed to undertake the Secretarial Audit of the Company for the year ended 31st March,2016 as required under Section 204 of the Companies Act,2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014.

The Secretarial Audit Report for the financial year ended 31st March,2016 is annexed herewith which form a part of this Report as annexure-II.

The Secretarial Audit Report does not contain any qualification, reservation of adverse remark.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Pursuant to provisions of Section 186 of the Companies Act,2013 the particulars of Loans, Guarantees and Investments are disclosed in the Financial Statement.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has formulated a vigil mechanism/whistle Blower Policy. This has provided a mechanism for Directors and employees of the company and other person dealing with the Company to Report to the Chairman of the Audit committee, any instance of unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct. The details of the Vigil Mechanism and Whistle Blower Policy are given in the Corporate Governance Report and also posted on the website of the Company.

EXTRACT OF THE ANNUAL RETURN

As provided under section 92(3) of the Act, the extract of Annual Return is given in Annexure-III in the prescribed Form MGT-9, which forms part of this Report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to conservation of energy, technology absorption and 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 are given in the Annexure-IV forming part of this Report.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Act with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in this Annual Report as Annexure-V.

The particulars of employees required to be furnished pursuant to Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Management Personnel) Rules,2014 forms part of this Annual Report.

ACKNOWLEDGEMENTS

Your Directors are pleased to place on record their appreciation for the assistance and support received from Customers, Suppliers, Dealers, Government Authorities, Financial Institutions, Lenders, Bankers, Monitoring Committee, Monitoring Institution, Consultants, Solicitors, Auditors & Shareholders and look forward to their continued co-operation.

Your Directors also thanks the employees at all levels for the dedication and hard work put in to surge ahead in these challenging times.

For and on behalf of the Board of Directors of PSL LIMITED

Sd/- Sd/-

(ASHOK PUNJ) (ALOK PUNJ)

Managing Director Director

Place: Mumbai

Date: 3rd August, 2016


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