|BSE: 526801||Sector: Metals & Mining|
|NSE: PSL||ISIN Code: INE474B01017|
|BSE 00:00 | 12 Oct||PSL Ltd|
|NSE 05:30 | 01 Jan||PSL Ltd|
|BSE: 526801||Sector: Metals & Mining|
|NSE: PSL||ISIN Code: INE474B01017|
|BSE 00:00 | 12 Oct||PSL Ltd|
|NSE 05:30 | 01 Jan||PSL Ltd|
The Members of PSL LIMITED
The Liquidator hereby presents this Thirty Second (32nd) Annual Reportalong with Audited Statements of Accounts of the Company for the Financial Year 2019-20.
The financial performance of the Company for the financial year endedon 31stMarch 2020 is summarized below:
(Rs. in Crore)
Consolidated Financial Statements:
The Consolidated Financial Statements of your Company for the financialyear 2019-20 are prepared in compliance with applicable provisions of the Companies Act2013 read with the Rules issued there under applicable Accounting Standards and theprovisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015(hereinafter referred to as the "Listing Regulations"). These statements havebeen prepared on the basis of audited financial statements of your Company and of itssubsidiaries as approved by their respective Board of Directors.
As the Financial Year under review witness losses no dividend could beconsidered for distribution to the members.
Transfer to Reserves:
Consequent upon company having suffered losses during the year underreview no amount was transferred to general
reserve account of the company.
Development regarding Corporate Insolvency Resolution Process(CIRP)culminating into initiation Of company's Liquidation
Members may recall that they were well informed about variousdevelopments pertaining to Corporate Insolvency Resolution Process(CIRP) formallycommenced on 15th February 2019 after passing of an order to that effect by AhmedabadBench of NCLT on company's application filed with it earlier.
Since no Resolution Plan could succeed the said Hon'ble Bench ofNCLT while disposing of an application filed by Resolution Professional in compliance of adecision of Committee of Creditors has vide its order dated 11th September 2020 order forliquidation of the Company as a going concern.
To carry out the liquidation process of the company Hon'ble NCLThas appointed Mr. Nitin Jain as Liquidator.
Although CIRP has commenced on 15th February 2019 i.e. in thepreceding Financial Year 2019-20 itself your company took a cautious decision ofcontinuing its manufacturing operations to the maximum possible extent. Such continuedoperation served many purposes such as ensuring smooth functioning of company'svaluable plant and machinery generating of employment for competent technical workforceat the plant level and meeting fixed cost of the company from the profit so generated evenby limited operations.
As a direct result of sustained effort put in by company's seniormanagement the total income which was Rs.92 Crores in previous Financial Year ended on31st March 2019 got marginally reduced to Rs.78 Crores.
The aforesaid sustained efforts of the management also showedreasonably good results as far as company's performance on consolidated basis isconcerned. Since the consolidated turnover which was Rs.228 Crores in the precedingFinancial Year 2018-19 got enhanced to Rs.234 Crores in the year under review.
Status of OA filed by Creditors against the company in Debt RecoveryTribunal:
Members may note that prior to the admission of Company'sreference by Hon'ble NCLT various secured creditors of the company through M/sEdelweiss Assets Reconstruction Co. Ltd. filed an OA before the Debt Recovery Tribunal inNew Delhi with an objective of procuring a recovery order from the said Court for thedifferent amounts payable by the company to different secured creditors. Similarly anothercreditor of the company namely Indian Bank has also filed an OA before the Debt RecoveryTribunal (DRT) for recovery of its debt. While after the said filing of two OAs regularhearings in the DRT Court were being held the company informed the said DRT Court aboutthe admission of company's application under Section 10 of Insolvency and BankruptcyCode by Ahmedabad bench of NCLT. As a direct result of commencement of
moratorium period both the aforesaid proceedings in the DRT Courtagainst the company have been stayed. However both the matter will proceed against theother defendants. Now since the Company has been ordered to be liquidated the saidmoratorium has ceased to operate. The above stated OAs are currently pending before theDRT Delhi.
Performance of Subsidiary Companies:
Presently your company has four direct subsidiaries and one step downsubsidiary two of the direct four subsidiary namely PSL Gas Distribution Pvt. Ltd. andPSL Infrastructure and Ports Pvt. Ltd. have not been in an active operation and thereforeno revenue was generated in them. The other two subsidiary namely PSL Corrosion ControlServices Ltd. and Pipelines Systems Ltd. including step down subsidiary PSL FZE hadperformed reasonably well during Financial Year under review. Since the former recordedturnover of Rs. 11914.51 lacs and net profit of 82766 lacs while the latter registeredturnover of Rs. 3621.81 lacs and net loss of Rs. 4866.56 lacs.
As a direct result of the moderate performance of the said twosubsidiaries the consolidated total income of your company could reach Turnover of Rs.22509 lacs .
Pursuant to provisions of Section 129(3) of the Companies Act 2013 theCompany has prepared consolidated financial statement of the Company which forms part ofthis Annual Report. Further a statement containing salient features of FinancialStatements of subsidiaries (excluding the two subsidiaries in USA) in the prescribedformat AOC-1 is appended to the financial statements of the Company.
Further pursuant to the provisions of section 136 of the Companies Act2013 the Audited Financial Statement Consolidated Financial Statement along with relevantdocuments and separate audit accounts in respect of subsidiaries are available on thewebsite of the Company.
Your Board comprised of total of 8 Directors which includes 4Independent Directors. Although consequent upon commencement of CIRP on 15th February2019 the powers of the Board got ceased in accordance with the relevant provisions ofInsolvency and Bankrupcty Code 2016 however in order to discharge their statutoryresponsibilities Directors held total of 5 Board Meeting during the year under review.
Directors' Responsibility Statement:
Pursuant to the provisions contained in Section 134(3)( c ) of theCompanies Act 2013 and subject to disclosures in the Annual Accounts your Directorsstate as under:
a) While preparing the annual accounts of the financial year ended onMarch 312020 the applicable accounting standards have been followed and there are nomaterial departures.
b) That the Directors have selected appropriate accounting policies inconsultation with Statutory Auditors and applied them consistently to give a true and fairview 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 ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
d) Annual Accounts have been prepared on a going concern basis.
e) The directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively.
f) The Directors have devised proper system to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.
The Company recognizes and embraces the importance of a diverse Boardin its success. We believe that a truly diverse Board will leverage differences inthought perspective knowledge skill regional and industry experience cultural andgeographical background age ethnicity race and gender which will ensure us retain ourcompetitive advantage. The Board has adopted the Board Diversity policy which sets out theapproach to diversity of the Board of Directors.
Number of Meetings of the Board:
Consequent upon commencement of CIRP on 15th February 2019 the powersof the Board got ceased in compliance of relevant provisions of Insolvency and BankrupctyCode 2016 however in order to discharge their statutory responsibilities Directorsheld total of 5 Board Meeting during the year under review the details of which are givenin the Corporate Governance Report that is annexed to this Report as Annexure - VI.
Declaration by Independent Directors:
Pursuant to provision of section 149(7) of the companies Act 2013 theCompany has received necessary declaration from each Independent Directors that he meetsthe criteria of Independence laid down in section 149(6) of the Companies Act2013 andRegulations 25 of SEBI (LoDR) Regulations2015.
Policy on Director's appointment remuneration and other details:
Your Company has constituted a Nomination and Remuneration Committeewhich is empowered to nominate the number of members of the Board and various standingcommittees based on their different experience levels knowledge and educationalqualifications in different Sectors and discipline relating to the Company's business.
The remunerations paid to Executive Directors are in accordance withthe recommendation of the Nomination & Remuneration Committee as well as by theprescribed law. Due care is also taken to ensure that the remuneration package isconsistent with the recommended best practices in the country.
For assisting the Board of Directors in discharging itsresponsibilities in various fields effectively & efficiently various Standing andNon-standing Committees are constituted by the Board from time to time. The detail of allstanding committees along with their composition and meeting held during the year underreview are given in the Report of Corporate Governance which forms part of this Report.
Your Company has constituted a Risk Management Committee as a measureof good governance although not mandatory on our Company. The details of the Committeeand its terms of reference are set out in the Corporate Governance Report.
Your Company has adopted a Risk Management Policy pursuant to theprovisions of Section 134 of the Act to identify and evaluate business risks andopportunities for mitigation of the same. This framework seeks to create transparencyminimize adverse impact on business objective and enhance your Company's competitiveadvantage. The risk framework defines the risk management approach across the enterpriseat various levels including documentation and reporting.
Performance Evaluation of the Board:
Since the powers of the Board of Directors have been suspended w.e.f.15th February 2019 pursuant to the orders of Hon'ble National Company Law Tribunal(NCLT) dated 15th February 2019 evaluation of the Board has not taken place.
Internal Control and Adequacy:
Your Company has a proper and adequate system of Internal Control forensuring the orderly and efficient conduct of its business including adherence to theCompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial disclosures.
The Internal Control System is supplemented by an extensive auditconducted by well structured Internal Audit Department of the Company. The said audit isby and large conducted on quarterly basis to review the adequacy and effectiveness ofinternal controls and to suggest improvement for strengthening them. Proper reviews arecarried out to ensure follow-up on the audit observations.
Corporate Governance Report:
The Report on Corporate Governance as stipulated under Schedule V ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 forms part ofthe Annual Report.
The requisite certificate from M/s. V Parekh & AssociatesChartered Accountants confirming compliance with the conditions of Corporate Governance asstipulated under the aforesaid Schedule V is attached to the Report on CorporateGovernance.
Management Discussion and Analysis Report:
The Management Discussion and Analysis Report as stipulated underSchedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015forms an integral part of this report and gives details of the overall industry structure& development opportunities & threats internal controls systems and theiradequacy financial performance with respect to operational performance etc.
Contracts or Arrangements with related parties under Section 188(1) ofthe Companies Act 2013:
With reference to Section 134(3)(h) of the Companies Act 2013 allcontracts and arrangements with related parties under Section 188(1) of the Act enteredby the Company during the financial year were in the ordinary course of business and onan arm's length basis. Further there were no transactions with related parties whichqualify as material transactions under the SEBI Listing Regulations. Thus disclosure inform AOC- 2 in terms of Section 134 of the Companies Act 2013 is not required.
The details of the related party transactions as per AccountingStandard 18 are set out in Note 35 to the Standalone Financial Statements forming part ofthis report.
The Company has also formulated a policy on Related Party Transactionsas approved by the Board of Directors which has been uploaded on the website of theCompany.
1. Statutory Auditors and Auditors' Report
M/s V. Parekh & Associates Chartered Accountants were appointed asStatutory Auditors of the Company at the Annual General Meeting held on 29th September2017 for a continuous period of 5 years commencing from Financial Year 2017-18. So M/s V.Parekh & Associates would continue to act as Statutory Auditors for the Financial Year2020-21 also.
The notes to the accounts referred to in Auditor's Report areself-explanatory and therefore do not call for any further comments by the Board ofDirectors. Auditor's Adverse Observations and Management Response to Auditor'sAdverse Observations are given in the Annexure-I forming part of this Report.
2. Secretarial Auditor:
A firm of Practising Company Secretary namely AviSangal&Associates" was appointed to undertake the Secretarial Audit of the Company for theyear ended March 312020 as required under Section 204 of the Companies Act 2013 readwith rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.
The Secretarial Audit Report for the financial year ended March 312020is annexed herewith which form a part of this Report as Annexure-II.
Particulars of Loans Guarantees and Investments:
Pursuant to provisions of Section 186 of the Companies Act 2013 theparticulars of Loans Guarantees and Investments are disclosed in the Financial Statement.
During the year the Company has not accepted any public deposits underthe Companies Act 2013.
Vigil Mechanism/Whistle Blower Policy:
The Company promotes ethical behavior in all its business activitiesand in line with the best governance practices your Company has formulated a system i.e.vigil mechanism/ whistle blower policy through which Directors and employees of theCompany and other person dealing with the Company may report to the Chairman of the Auditcommittee any instance of unethical behaviour actual or suspected fraud or violation ofthe Company's Code of Conduct. The details of the Vigil Mechanism and Whistle BlowerPolicy are given in the Corporate Governance Report and also posted on the website of theCompany.
Extract of the Annual return:
The extract of Annual Return as on March 31 2020 in the prescribedForm No. MGT-9 pursuant to Section 92(3) of the Companies Act 2013 read with Rule 12(1)of the Companies (Management and Administration) Rules 2014 is attached as Annexure - IIIto this Report.
Energy Conservation Technology Absorption and Foreign ExchangeEarnings and Outgo:
Pursuant to provisions of Section 134 of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 the details of Conservation ofEnergy Technology Absorption Foreign Exchange Earnings and Outgo are attached asAnnexure - IVto this Report.
Disclosure under Sexual Harassment of Women at theWorkplace(Prevention Prohibition & Redressal) Act 2013:
In your Company all employees are of equal value. There is nodiscrimination between Individuals at any point on the basis of race colour genderreligion social origin age etc. Here every individual is expected to treat his/hercolleagues with respect and dignity.
In compliance of the Sexual Harassment of Women at Workplace(Prevention Prohibition &Redressal) Act 2013 (Act') and Rules made thereunderyour Company has constituted Internal Committees (IC) for different locations ofCompany's units. No complaint of sexual harassment was reported during the year.
Particulars of Employees:
The information required under Section 197(12) of the Act with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are provided in this Annual Report as Annexure - V.
The particulars of employees required to be furnished pursuant toSection 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 thisAnnual Report.
Corporate Social Responsibility:
As unfortunately your Company has been continuously incurring lossesduring last 5 years the conditions contained in Section 135 of Companies Act 2013 are nomore applicable. Hence there is no requirement with respect to compliance of the saidsection 135.
As you are aware our company running in Corporate Insolvency ResolutionProcess (CIRP) with the help of Resolution Professional (RP) namely Mr. Nitin Jain andwith the help of them we are trying to find out investors who can run our unit aftertaking all the liabilities as against our existing assets.
Your Directors alongwitih Liquidator Professional (LP) place on recordgratitude to the Government Authorities Financial Institutions LendersBanker for theassistance they extended to the Company. Your Directors alongwith LP also wish to place onrecord their thanks and appreciation for the continuing support and efforts ofConsultants Solicitors Auditors & Shareholders and look forward to their continuedco-operation.
Your Directors alongwith LP would further like to thank the employeesat all levels for the dedication and hard work put in to surge ahead in these challengingtimes.