The Members of
Your Directors hereby present this Twenty Ninth Annual Report along with AuditedStatements of Accounts of the Company for the Financial Year 2016-17.
The financial performance of the Company for the financial year on March 31 2017 issummarized below: (Rs.in Crore)
| ||Standalone ||Consolidated |
|Particulars ||31/03/2017 ||31/03/2016 ||31/03/2017 ||31/03/2016 |
|Revenue from operations ||19.05 ||100.83 ||109.17 ||275.71 |
|Other Income ||5.10 ||5.22 ||5.79 ||5.74 |
|Total Income ||24.15 ||106.05 ||114.96 ||281.45 |
|Profit/(Loss) Before ||(425.68) ||(1205.34) ||(431.2) ||(1181.84) |
|Depreciation Finance || || || || |
|Cost Exceptional items || || || || |
|Extraordinary items & Tax || || || || |
|Less: Depreciation and ||141.35 ||150.64 ||190.82 ||241.02 |
|Finance Cost || || || || |
|Less: Exceptional items ||- ||- ||- ||- |
|Less: Extraordinary Items ||130.34 ||- ||130.34 ||- |
|Profit/(Loss) Before ||(697.37) ||(1355.98) ||(752.36) ||(1422.86) |
|Taxation Provisions || || || || |
|Less: Current Tax ||- ||- ||0.24 ||0.27 |
|Less : Deferred Tax ||- ||- ||(0.01) ||- |
|Profit / (Loss) After Tax ||(697.37) ||(1355.98) ||(752.59) ||(1423.13) |
|Balance Carried to Balance ||(697.37) ||(1355.98) ||(752.59) ||(1423.12) |
|Sheet || || || || |
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of your Company for the financial year 2016-17are prepared in compliance with applicable provisions of the Companies Act 2013 read withthe Rules issued there under applicable Accounting Standards and the provisions of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafter referredto as the "Listing Regulations"). These statements have been prepared on thebasis of audited financial statements of your Company its subsidiaries as approved bytheir respective Board of Directors.
Keeping in mind 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 205C(2) of the Companies Act1956 as amended from time to time and / or relevant corresponding provision of theCompanies Act 2013 once notified the Company transferred an amount of Rs. 204673/- to"Investor
Education & Protection Fund". Although the said amount was part of an earlierdividend and therefore was due and payable to few shareholders but since the sameremained unclaimed and unpaid for a period of seven years hence this transfer had to bedone.
INCREASE OF PAID UP CAPITAL
In compliance of one of the essential Conditions of package of Restructuring ofCompany's Debts approved for the Company by CDR Empowered Group on 23rd September 2013your Company in its Board
Meeting held on May 24 2016 had allotted 25999232 equity shares of the face value ofRs.10/- per share to the seven Promoter Group Entities and one lender of the Company at apremium of Rs. 16/- per share in accordance with a SEBI formula prescribed for thispurpose.
Such allotment of additional equity resulted into enhancement of paid up capital of theCompany from its earlier level of Rs.9893.53 Lacs to Rs. 12493.45 Lacs.
During the year under review the Company completed the entire process of listing of thesaid shares on the two exchanges with which the Company's shares are listed. Asconsequence of which one of the condition imposed by CDR Cell while sanctioning the schemeof restructuring of Company's debt was fully complied with.
COMPANY'S EXIT FROM CDR MECHANISM
Consequent upon severe financial crunch faced by the Company resulting into itsapproaching the Corporate Debt Restructuring Cell for restructuring of Company's debt theCDR Empowered Group had accorded its approval on September 23 2013 to the restructuringscheme in accordance with RBI Guidelines. Sincere efforts were thereafter made toimplement the said scheme in letter and spirit. However since promoters group could notencash some of its immovable properties due to depressed real estate market condition thepromoters group was not able to complete its entire contribution
prefixed by the CDR Empowered Group CDR (EG). Further since even the banks failed toprovide the desired support for Company's operations eventually the CDR (EG) in itsmeeting held on December 28 2016 took a decision for Company's exit from CDR mechanism onaccount of failure of the CDR approved package.
REFERENCE TO NATIONAL COMPANY LAw TRIBUNAL ("NCLT")
Your Company back in the mid of the year 2015 had filed a reference in Form A Rs.under Section 15 of Sick Industrial Companies (Special Provision) Act 1985 to the Boardfor Industrial and Financial Reconstruction (BIFR") for determination of the measureswhich shall be adopted with respect to the Company. The aforesaid reference had beenadmitted by the Board on September 08 2015 and the same had been registered as case no.119/2015.
Pursuant to repeal of the Sick Industrial Companies (Special Provisions) Act 1985 byInsolvency and Bankruptcy Code 2016 ("Code") the reference before BIFR gotabated w.e.f. December 01 2016 and the Company was required to file a reference beforethe National
Company Law Tribunal ("NCLT") within 180 days from the date of notificationof the Code i.e. on & before May 29 2017. Accordingly Company filed the necessaryapplication with NCLT within the said time limit which is currently pending with NCLT forits admission
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATOR / COURTS / TRIBUNAL
As explained above after exit from CDR Mechanism as also after abatement of Company'sreference admitted earlier by BIFR on 8th
September 2015 the Company has fil ed a reference before National Company Law Tribunalthe admission of which is pending. However in an independent petition filedby one of thecreditors of the Company for Company's winding up in Bombay High Court the petition hasbeen admitted but the Court has refrained from appointing any official liquidator.
In view of the extreme adverse circumstances in which the Company landed during thelast three years the Company was obviously not in a position to effectively perform onits operational front as it used to in the period prior to commencement of financialcrunch. Moreover the failure of CDR package followed by unfortunate repealing of SickIndustrial Companies Act 1985 resulting into abatement of Company's reference admittedearlier by BIFR further aggravated the Company's problems directly resulting into acutedip in Company's operations. Under these circumstances the Company turnover fell to onlyRs. 24 Crores on standalone basis and to Rs. 115 Crores on consolidated basis. Theaccumulated losses of the Company got further enhanced due to heavy losses incurred duringthe year directly resulting into further decline in Company's networth.
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 2017. 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 financialstatements 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 ofCompany namely PSL USA Inc. and PSL North America LLC had
USA under filed the USA provisions Bankruptcy Code. All the assets of PSL North AmericaLLC were sold for US$ 100 Million to pay all the creditors of the said subsidiarycompanies. As these developments resulting into complete stoppage of activities of thesaid companies the financial results of all subsidiaries have not been included in theconsolidated results.
During the year under review Sh. R. K. Bahri & Sh. C. K. Goel Whole Time Directorsof the Company expressed their inability to act as Whole Time Directors' on theBoard of the Company and submitted their resignations. The resignations were accepted bythe Board effective from January 01 2017. The Board while accepting their resignationsrecorded its deep appreciation for the valuable services rendered by Sh. R. K. Bahri &Sh. C. K. Goel during their respective tenure as Whole Time Directors'. Sh. Bahri& Sh. Goel however would continue to provide their services as Non-ExecutiveDirectors' on the Board of the Company.
Shri Alok Punj retires by rotation and being eligible has offered himself forreappointment at the AGM. The Board of Directors recommends his re-appointment.
Smt. Manjula N. Bhatia retires by rotation and being eligible has offered herself forreappointment at the AGM. The Board of Directors recommends her re- appointment.
Consequent upon said changes your Board now comprises of only Nine Directors includingthe Managing Director four Non-Executive Directors and four Independent Directors.
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) Whilepreparing the annual accounts of the financial year ended on March 31 2017 theapplicable accounting standards have been followed and there are no material departures.b) That the Director have selected appropriate accounting policies in consultation withStatutory Auditors and applied them consistently to give a true and fair view of the stateof affairs of the Company at the end of financial year under review and Profit & LossAccount of the period under report. c) Proper and sufficient care has been taken formaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities. d) Annual Accounts have been prepared on a goingconcern basis. e) The directors have laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and were operatingeffectively. f) The Directors have devised proper system to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
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 2016- 17 the details ofwhich are given in the Corporate Governance Report that is annexed to this Report as Annexure- VI. The intervening gap between any two meetings was not only within the periodprescribed 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) Regulations2015.
POLICY ON DIRECTOR'S APPOINTMENT REMUNERATION AND OTHER DETAILS
Your Company has been constituted a Nomination and Remuneration Committee which isempowered to nominate the number of members of the Board and various standing committeesbased on their different experience levels knowledge and educational qualifications indifferent Sectors and discipline relating to the Company's business. The remunerationspaid to Executive Directors are in accordance with the recommendation of the Nomination& Remuneration Committee as well as by the prescribed law. Due care is also taken toensure that the remuneration package is in consistent with the recommended best practicesin 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 has adopted a Risk Management Policy pursuant to the provisions ofSection 134 of the Act to identify and evaluate business risks and opportunities formitigation of the same. This framework seeks to create transparency minimize adverseimpact on business objective and enhance your Company's competitive advantage. The riskframework defines the risk management approach across the enterprise at various levelsincluding documentation and reporting.
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 theevaluation of Whole Time Directors of the Company pursuant to provision of Section 178 ofthe Companies Act 2013 read with Regulation 19(4) of SEBI (Listing Obligation andDisclosure Requirement) Regulations 2015.
In a separate meeting of Independent Directors performance of Non-independentDirectors performance of the Board as a whole was evaluated taking into account theviews 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 Annual Report.
The requisite certificate from M/s. Suresh C. Mathur Chartered Accountants confirmingcompliance with the conditions of Corporate Governance as stipulated under the aforesaidSchedule 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 integralpart of this report and gives details of the overall industry structure & developmentopportunities & threats internal controls systems and their adequacy financialperformance with respect to 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 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 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.
During the year under review consequent upon resignation of Mrs. Geeta Girdhereffective from March 15 2016 from the post of Company Secretary & ComplianceOfficer' of the Company your board had appointed Ms. Nikita Bansal as a CompanySecretary and Compliance Officer' of the Company w.e.f. August 08 2016.
1. Statutory Auditors and Auditors' Report
The Auditors M/s Suresh C. Mathur & Co. Chartered Accountants Auditor of theCompany retire at the ensuing Annual General Meeting. Since said chartered Accountantsfirm cannot be re-appointed in view of bar imposed by Section 139 of the companies act2013 the shareholders of the company will have to appoint another firm of CharteredAccountant as
Statutory Auditor of the company for which shareholders have to pass a separateResolution. The notes to the accounts referred to in Auditor's Report are self-explanatoryand therefore do not call for any further comments by the Board of Directors.
Auditor's Adverse Observations and Management Response to Auditor's AdverseObservations are given in 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 2017-18 at consolidated fees of Rs. 4.00 Lacs subject toratification of the same by Shareholders of the Company.
3. Secretarial Auditor
A firm of Practising Company Secretary namely "Avi Sangal &
Associates" was appointed to undertake the Secretarial Audit of the Company forthe year ended March 31 2017 as required under Section 204 of the Companies Act 2013read with rule 9 of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.
The Secretarial Audit Report for the financial year ended March 31 2017 is annexedherewith which form a part of this Report as Annexure-II.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
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 2017 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 thisReport.
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 tothis Report.
PREVENTION OF SEXUAL HARASSMENT AT wORKPLACE
In compliance of the Sexual Harassment of Women at Workplace (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 the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 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 theCompanies (Appointment and Remuneration of Management Personnel) Rules 2014 forms part ofthis Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
As unfortunately your Company has been continuously incurring losses during last 5years the conditions contain in Section 135 of Companies Act 2013 are no more applicable.Hence there is no requirement with respect to compliance of the said section 135.
Your Directors are pleased to place on record their appreciation for the assistance andsupport received from Customers Suppliers Dealers Government Authorities FinancialInstitutions Lenders Bankers Monitoring Committee Monitoring Institution ConsultantsSolicitors Auditors & Shareholders and look forward to their 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 |
| ||Managing Director |
| ||Director |
|Place : Mumbai || |
|Date : 10th August 2017 || |