The Members of
Your Directors hereby present this Thirtieth (30th) Annual Report along withAudited Statements of Accounts of the Company for the Financial Year 2017-18.
The financial performance of the Company for the financial year ended on 31stMarch 2018 is summarized below:
| || || |
(Rs. in Crore)
|Particulars ||Standalone ||Consolidated |
| ||31/03/2018 ||31/03/2017 ||31/03/2018 ||31/03/2017 |
|Revenue from opera- tions ||51.05 ||19.05 ||167.73 ||109.17 |
|Other Income ||10.68 ||5.10 ||11.30 ||5.79 |
|Total Income ||61.73 ||24.15 ||179.03 ||114.96 |
|Profit/(Loss) Before ||(34.65) ||(425.68) ||(28.79) ||(431.2) |
|Depreciation || || || || |
|Finance Cost Excep- tional items Extraordi- nary items & Tax || || || || |
|Less: Depreciation and ||112.06 ||141.35 ||174.23 ||190.82 |
|Finance Cost || || || || |
| || || || |
earlier by the
|Less: Exceptional items ||- ||- ||- ||- |
|Less: Extraordinary ||- ||130.34 ||- ||130.34 |
|Items || || || || |
|Profit/(Loss) Before ||(146.71) ||(697.37) ||(203.02) ||(752.36) |
|Taxation Provisions || || || || |
|Less: Current Tax ||- ||- ||0.26 ||0.24 |
|Less : Deferred Tax ||6.05 ||- ||6.07 ||(0.01) |
| || || || |
by one of the
|Profit / (Loss) After Tax ||(152.75) ||(697.37) ||(209.35) ||(752.59) |
|Balance Carried to Bal- ance Sheet ||(152.75) ||(697.37) ||(209.35) ||(752.59) |
Consolidated Financial Statements:
The Consolidated Financial Statements of your Company for the financial year 2017-18are prepared in compliance with ap -plicable provisions of the Companies Act 2013 readwith the Rules issued there under applicable Accounting Standards and the provisions ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafterreferred to as the "Listing Regulations"). These statements have been preparedon the basis of audited financial statements of yourCompany and of its subsidiaries asapproved by their respective Board of Directors.
Keeping in view the loss incurred by the Company during the year under review yourDirectors have not recommended any dividend for the year under review.
Transfer to Reserves:
In view of absence of profits during the financial year under review your Directorswere unable to transfer any amount to the General Reserve Account.
Transfer to Investor Education and Protection Fund:
During the year under review in compliance of Section 124(5) of the Companies Act2013 as amended from time to time the Company transferred an amount of Rs. 632587/- to"Investor Education & Protection Fund". Although the said amount was part ofan earlier dividend and therefore was due and payable to few shareholders but since thesame remained unclaimed and unpaid for a period of more than seven years hence thistransfer had to be done.
Reference to National Company Law Tribunal ("NCLT"):
At the time of last Annual General Meeting of the Company held on 28thSeptember 2017 the members were informed that consequent upon repeal of the SickIndustrial Companies (Special Provisions) Act 1985 and instead coming into being of theInsolvency and Bankruptcy Code 2016 the reference filed before BIFR had got abated witheffect from 1st December 2016. Further as an obvious consequent action thecompany filed a reference before the under Section 10 of the Code well within theprescribed time limit of 180 days from the date of notification of the Court i.e. on orbefore 29th May 2017. However unfortunately the single bench and then lateron the Double Bench of Mumbai High Court while hearing a petition for winding up theCompany filed creditors of the company had stayed the Company's proceedings pending beforethe NCLT
Ahmedabad. After few hearings on the said petition both i.e. Single Bench as well asDouble Bench were pleased to vacate their respective stays granted at different times.
In view of the aforesaid developments now that a copy of the final order of DoubleBench of Mumbai High Court has been filed with NCLT Ahmedabad the said Ahmedabad benchof NCLT has reserved its order for admission of Company's petition filed before them.Company is hopeful that the formal admission would happen soon and thereafter theproceedings under the new Insolvency and Bankruptcy Code 2016 would be completed withinthe prescribed time limits.
In view of the extreme adverse circumstances in which the Company landed during thelast five years the Company was obviously not in a position to effectively perform on itsoperational front as it used to in the period prior to commencement of financial crunch.Moreover the failure of CDR package followed by unfortunate repealing of Sick IndustrialCompanies Act 1985 resulting into abatement of Company's reference admitted earlier byBIFR further aggravated the Company's problems. However you all will be glad to know thatduring the Financial year ended 31st March 2018 the Company's turnoverincreased to Rs. 62 Crores on standalone basis and to Rs. 179 Crores on consolidated basiscompared to previous turnover of Rs. 24 crores on Standalone basis and Rs. 115 crores onConsolidated basis. The consolidated accumulated losses of the Company got decreased toRs. 209 crores during the year as compared to the previous year loss of Rs. 752 crores.
Accounts Statements of Subsidiary Companies:
Your Company has five wholly owned subsidiaries in addition to two stepdownsubsidiaries and seven associate Companies as on March 31 2018. There has been nomaterial change in the nature of the business of the Subsidiaries. During the year inquestion 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 hasprepared consolidated financial statement of the Company which forms part of this AnnualReport. Further a statement containing salient features of Financial Statements of oursubsidiaries (excluding the two subsidiaries in USA) in the prescribed format AOC-1 isappended to the financial statements of the Company.
Further pursuant to the provisions of section 136 of the Companies Act 2013 theAudited Financial Statement Consolidated Financial Statement along with relevantdocuments and separate audit accounts in respect of subsidiaries are available on thewebsite of the Company.
Members are aware that sometime back both the subsidiaries of Company namely PSL USAInc. and PSL North America LLC had filed Chapter-XI proceedings in the State of Dela-wareUSA under the USA provisions Bankruptcy Code. All the assets of PSL North America LLC weresold for US$ 100 Million to pay all the creditors of the said subsidiary companies. Asthese developments resulting into complete stoppage of activities of the said companiesthe financial results of all subsidiaries have not been included in the consolidatedresults.
Your Board now comprises of only Nine Directors including the Managing Director fourNon-Executive Directors (including a Woman Non-Executive Director) and four Independent
Shri R K Bahri retires by rotation and being eligible has offered himself forreappointment at the AGM. The Board of Directors recommends his re-appointment.
Shri C K Goel retires by rotation and being eligible has offered himself forreappointment at the AGM. The Board of Directors recommends his re- appointment.
Directors' Responsibility Statement:
Pursuant to the provisions contained in Section 134(3)(c) of the Companies Act 2013and subject to disclosures in the
Annual Accounts your Directors state as under: a) While preparing the annual accountsof the financial year ended on March 31 2018 the applicable accounting standards havebeen followed and there are no material departures. b) That the Directors have selectedappropriate accounting policies in consultation with Statutory Auditors and applied themconsistently to give a true and fair view of the state of affairs of the Company at theend of financial year under review and Profit & Loss Account of the period un -derreport. c) Proper and sufficient care has been taken for maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities. d) Annual Accounts have been prepared on a going concern basis. e) Thedirectors have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively. f) TheDirectors have devised proper system to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
The Company recognizes and embraces the importance of a diverse Board in its success.We believe that a truly diverse Board will leverage differences in thought perspectiveknowledge skill regional and industry experience cultural and geographical backgroundage 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 diversityof the Board of Directors.
Number of Meetings of the Board:
Four meetings of the Board were held during the financial year 2017-18 the details ofwhich are given in the Corporate Governance Report that is annexed to this Report asAnnexure VI. The intervening gap between any two meetings was not only within theperiod prescribed by the Companies Act 2013 but it was also in accordance with SEBI(LODR) Regulations 2015.
Declaration by Independent Directors:
Pursuant to provision of section 149(7) of the companies Act 2013 the Company hasreceived necessary declaration from each Independent Directors that he meets the criteriaof Independence laid down in section 149(6) of the Companies Act2013 and Regulations 25of SEBI (LODR) Regula-tions2015.
Policy on Director's appointment remuneration and other details:
Your Company has constituted a Nomination and Remuneration Committee which is empoweredto nominate the number of members of the Board and various standing committees based ontheir different experience levels knowledge and educational qualifications in differentSectors and discipline relating to the Company's business.
The remunerations paid to Executive Directors are in accordance with the recommendationof the Nomination & Remuneration Committee as well as by the prescribed law. Due careis also taken to ensure that the remuneration package is consistent with the recommendedbest practices in the country.
Familiarization Programme for Directors:
All new Directors including Independent Directors inducted on the Board go through astructured orientation programme. Presentations are made by Executive Directors and SeniorManagement giving an overview of our operations to familiarize the new IndependentDirectors with the Company's business operations. The new Independent Directors are givenan orientation on the Company's products group structure and subsidiaries Boardconstitution and procedures matters reserved for the Board and the major risks and riskmanagement strategy. Details of orientation given to the existing Independent Directors inareas of strategy operations & governance safety health and environment industry& regulatory trends competition and future outlook are provided in the CorporateGovernance Report.
For assisting the Board of Directors in discharging its responsibilities in variousfields effectively & efficiently various Standing and Non-standing Committees areconstituted by the Board from time to time. The detail of all standing committees alongwith their composition and meeting held during the year under review are given in theReport of Corporate Governance which forms part of this Report.
Your Company has constituted a Risk Management Committee as a measure of goodgovernance although not mandatory on our Company. The details of the Committee and itsterms of reference are set out in the Corporate Governance Report. Your Company hasadopted a Risk Management Policy pursuant to the provisions of Section 134 of the Act toidentify and evaluate business risks and opportunities for mitigation of the same. Thisframework seeks to create transparency minimize adverse impact on business objective andenhance your Company's competitive advantage. The risk framework defines the riskmanagement approach across the enterprise at various levels including documentation andreporting.
The Board of Directors has carried out evaluation and performance of the various Boardcommittees after seeking input from the Committee members on the basis of the criteriasuch as the composition of Committee effectiveness of committee meeting noting ofminutes etc.
The Nomination and Remuneration committee of Company has carried out the evaluation ofWhole Time Directors of the Company pursuant to provision of Section 178 of the CompaniesAct 2013 read with Regulation 19(4) of SEBI (Listing
Obligation and Disclosure Requirement) Regulations 2015. In a separate meeting ofIndependent Directors performance of Non independent Directors performance of the Boardas a whole was evaluated taking into account the views of Executive Directors and Non-Executive Directors.
Internal Control and Adequacy:
Your Company has a proper and adequate system of Internal Control for ensuring theorderly and efficient conduct of its business including adherence to the Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial disclosures.
The Internal Control System is supplemented by an extensive audit conducted by wellstructured Internal Audit Department of the Company. The said audit is by and largeconducted on quarterly basis to review the adequacy and effectiveness of internal controlsand to suggest improvement for strengthening them. Proper reviews are carried out toensure follow-up on the audit observations.
Corporate Governance Report:
The Report on Corporate Governance as stipulated under Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of the AnnualReport.
The M/s. V Parekh & Associates requisite certificate Chartered Accountantsconfirming compliance with the conditions of Corporate Governance as stipulated under theaforesaid Schedule V is attached to the Report on Corporate Governance.
Management Discussion and Analysis Report:
The Management Discussion and Analysis Report as stipulated under Schedule V of theSEBI (Listing Obligations and
Disclosure Requirements) Regulations 2015 forms an integral part of this report andgives details of the overall industry structure & development opportunities &threats internal controls systems and their adequacy financial performance with respectto operational performance etc.
Contracts or Arrangements with related parties under Section 188(1) of the CompaniesAct 2013:
With reference to Section 134(3)(h) of the Companies Act 2013 all contracts andarrangements with related parties under Section 188(1) of the Act entered by the Companyduring the financial year were in the ordinary course of business and on an arm's lengthbasis. Further there were no transactions with related parties which qualify as materialtransactions under the SEBI Listing Regulations. Thus disclosure in form
AOC-2 in terms of Section 134 of the Companies Act 2013 is not required.
The details of the related party transactions as per Accounting Standard 18 are set outin Note 30 to the Standalone Financial Statements forming part of this report.
The Company has also formulated a policy on Related Party Transactions as approved bythe Board of Directors which has been uploaded on the website of the Company.
Although during the year under review the position of "Company Secretary andCompliance Officer" got vacated consequent upon Ms. Nikita Bansal's resignation hencecompany is in the process of recruiting a competent Company Secretary.
1. Statutory Auditors and Auditors' Report
At the time of last Annual General Meeting of the Company held on 28th September 2017M/s V. Parekh &
Associates Chartered Accounts were appointed for a continuous period of 5 yearscommencing from the Financial Year 2017-18. Although the statutory provisions of CompaniesAct 2013 provided for ratification of such appointment by Members each year in the AnnualGeneral Meeting. The said provision has now been deleted by way of a recent amendment inCompanies Act.
The notes to the accounts referred to in Auditor's Report are self-explanatory andtherefore do not call for any further comments by the Board of Directors. Auditor'sAdverse Observations and Management Response to Auditor's Adverse Observations are givenin the Annexure-I forming part of this Report.
2. 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 CostAuditor of your Company for conducting the Cost Audit of "Steel Pipe Products"for the Financial Year
2018-19 at consolidated fees of Rs. 2 Lacs subject to ratification of the same byShareholders of the Company.
3. Secretarial Auditor:
A firm of Practising Company Secretary namely "Avi San-gal & Associates"was appointed to undertake the Secretarial Audit of the Company for the year ended March31 2018 as required under Section 204 of the Companies Act 2013 read with rule 9 ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
The Secretarial Audit Report for the financial year ended March 31 2018 is annexedherewith 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 the particulars ofLoans Guarantees and Investments are disclosed in the Financial Statement.
During the year the Company has not accepted any public deposits under the CompaniesAct 2013.
Vigil Mechanism/Whistle Blower Policy:
The Company has formulated a vigil mechanism/whistle Blower Policy. This has provided amechanism for Directors and employees of the Company and other person dealing with theCompany to Report to the Chairman of the Audit committee any instance of unethicalbehaviour actual or suspected fraud or violation of the Company's Code of Conduct. Thedetails of the Vigil Mechanism and Whistle Blower Policy are given in the CorporateGovernance Report and also posted on the website of the Company.
Extract of the Annual return:
The extract of Annual Return as on March 31 2018 in the prescribed Form No. MGT-9pursuant 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 - III to this Report.
Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo:
Pursuant to provisions of Section 134 of the Companies Act 2013 read with Rule 8(3) ofthe Companies (Accounts) Rules 2014 the details of Conservation of Energy TechnologyAbsorption Foreign Exchange Earnings and Outgo are attached as Annexure IV to thisReport.
Prevention of Sexual Harassment at Workplace:
In compliance of the Sexual Harassment of Women at Work-place (Prevention Prohibition& Redressal) Act 2013 (Act') and Rules made thereunder your Company hasconstituted Internal Committees (IC) for different locations of Company's units. Duringthe year no complaint related to sexual harassment was received at any of the units ofthe Company.
Particulars of Employees:
The information required under Section 197(12) of the Act with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are providedin this Annual Report as Annexure V.
The particulars of employees required to be furnished pursuant to Section 197(12) ofthe Companies Act 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Management Personnel) Rules 2014 forms part of this Annual Report.
Corporate Social Responsibility:
As unfortunately your Company has been continuously incurring losses during last 5years the conditions contained in Section 135 of Companies Act 2013 are no moreapplicable. Hence there is no requirement with respect to compliance of the said section135.
Your Directors are pleased to place on record their appreciation for the assistance andsupport received from Customers Suppliers
Dealers Government Authorities Financial Institutions Lenders Bankers MonitoringInstitution Consultants Solicitors Auditors & Shareholders and look forward totheir continued co-operation.
Your Directors also thank the employees at all levels for the dedication and hard workput in to surge ahead in these challenging times.
| ||For and on behalf of the Board of Directors of |
| ||PSL LIMITED |
| ||Sd/- |
|Place: Mumbai ||(Ashok Punj) |
|Date: 9th August 2018 ||Managing Director |