To The Members of PSL Limited
The Directors have pleasure in presenting this 24th Annual Report of
the Company together with the Audited Statements of Accounts for the
Financial Year ended 31st March 2012.
The highlights of your Company''s standalone Financial Results for the
year ended on 31st March, 2012 and appropriation of divisible profits
is given below:-
(Rs. in Crores)
Particulars Current Year (2011-12) Previous Year (2010-11)
Net Sales 2277.94 2496.21
Other Income 13.05 34.22
Total 2290.99 2530.43
cost is 432.60 413.29
finance cost of 362.94 308.63
The profit for the
year before Taxation
Provisions is 69.66 104.66
From which is
Provision of 15.50 29.00
Thereby leaving a
Net Profit of 54.16 75.66
Which your directors
have recommended to
be appropriated as
a) Transfer to General
Reserves 5.42 7.57
b) Proposed Dividend 24.78 24.83
c) Prior year payments 5.57 35.77 1.63 34.03
Thereby leaving a
balance of 18.39 41.63
for carrying over to
next year''s A/c
PERFORMANCE HIGHLIGHTS (A) STANDALONE FINANCIAL STATEMENTS
1. During the Year Under Review
During the year, Indian economy witnessed various issues such as slower
growth, high inflation, uncertain political environment and strong
forex volatility. In spite of such adverse external environment an
aggregate income of Rs.2290.99 Crores was generated which was merely 9%
lower than that of previous financial year when the economy did not
suffer from all such adverse factors in one single year.
The Profit before depreciation and finance cost stood at Rs. 432.60
Crores as against Rs. 413.29 Crores in previous year thereby registering
a growth of 4.7 %. However, the Net Profit before and after Tax stood
at Rs. 69.66 Crores and Rs. 54.16 Crores during the year under review
respectively against Rs. 104.66 Crores and Rs.75.66 Crores in the previous
2. For the Year Under Review
a) Due to decline in Profit before Tax during the year, the amount of Rs.
5.42 Crores proposed to be transferred to the General Reserve Account
is lesser than that transferred in the previous year.
b) Due to similar reason as stated above, the credit balance of Profit
& Loss Account proposed to be carried to Balance Sheet is Rs. 18.39
Crores, which is lesser than that of previous year balance.
c) In addition to an Interim Dividend of Rs. 2.00 per share paid by the
Company, the board has also recommended payment of Rs. 2.00 per share as
final dividend, thereby aggregating to a total dividend of Rs. 4/- per
share for the financial year 2011-12.
(B) CONSOLIDATED FINANCIAL STATEMENTS
During the year under review, the consolidated Profit (before
depreciation and finance cost) stood at Rs. 502.46 Crores as compared to
Rs. 440.23 Crores in the previous year. The Net Profit before and after
Tax stood at Rs. 62.77 Crores and Rs. 44.47 Crores respectively during the
year under review as against Rs. 87.23 Crores and Rs. 52.39 Crores
respectively in the previous year.
Your Company has seven subsidiary companies as detailed below:
1. PSL Corrosion Control Services Limited
2. PSL USA Inc
3. PSL North America LLC
4. Pipeline Systems Limited
5. PSL FZE
6. PSL Gas Distribution Private Limited
7. PSL Infrastructure and Ports Private Limited
In accordance with the provisions of Section 212 of the Companies Act
1956, your Company is required to attach the Directors'' Report,
Auditors Report, Balance Sheet and Statement of Profit and Loss Account
of the subsidiary companies to the Balance Sheet of the company.
However, the Ministry of Corporate Affairs vide its General Circular
No. 2/2011 dated 8th February, 2011 has granted a General exemption
under Section 212(8) of the Companies Act, 1956 to all the companies
from annexing annual accounts and other documents of subsidiary
companies with the Annual Report of Holding Company subject to
compliance of few prescribed conditions. As your Company complies with
all the conditions as specified in the said circular and your Board of
Directors had in its meeting held on 1st August, 2012 passed a
Resolution giving its consent for not attaching Balance Sheet and other
documents of its various Subsidiary Companies, a statement of the
Company''s interest in the Subsidiaries and a summary of the financials
of the Subsidiaries is given along with the consolidated accounts.
The Annual Accounts of the Subsidiary Companies and other related
detailed information will be made available to any member of the
Company who may be interested in obtaining the same. The Annual
Accounts of the Subsidiary Companies will also be kept for inspection
during the business hours at the Registered Office as well as at Legal
& Secretarial Office of the company.
IMPORTANT OPERATIONAL ACHIEVEMENTS
Members are aware that amongst various pipe manufacturers in the
country, your Company is the only one which has attached adequate
importance to establish its pipe manufacturing facilities at various
strategic locations of the country. Such decision taken in the past has
indeed proved fruitful since a manufacturing capacity in the vicinity
of the major pipeline projects as and when they arise, definitely helps
in substantially saving on account of transportation cost thereby
directly reducing the overall project cost, hence this factor gets more
weightage in the minds of prospective customers. This benefits not only
your Company, but also facilitates timely execution of major pipeline
projects by reducing logistic difficulties and complexities in turn
pleasing the owner companies.
PRESTIGIOUS ORDER FROM INDIAN OIL CORPORATION LIMITED
As stated above the strategic location advantage of your Company''s
Jaipur Pipe Mill directly benefited the Company when Indian Oil
Corporation Limited recently awarded a very prestigious order for
DE-BOTTLENECKING OF SALAYA- MATHURA PIPELINE. This order to the
Company further proves, Company''s planned development across the
country as it demonstrate that proximity of pipe manufacturing to
required delivery point is a key advantage both financially and in
terms of logistic in the pipe supply business.
Having secured this prestigious order, your Company, in the shortest
possible time, enhanced the production capacity at its Jaipur Pipe Mill
from the previous levels of 150,000 MT per annum to 300,000 MT per
annum, effectively doubling the capacity.
In addition, specialized coating facilities for Oil and Gas Pipelines
were also installed and the whole unit obtained the requisite approval
from Indian Oil Corporation Limited and other agencies to supply a
portion of SALAYA-MATHURA PIPELINE order.
NEW FACILITY FOR THREE LAYER COATING ON LARGE DIAMETER PIPES
Continuing to set a pioneering pace, your Company, having secured large
supply orders for water pipeline in the state of Gujarat, became the
first manufacturer in India and amongst a handful worldwide, to
undertake specialized three Layer Polyethylene Coating application on
steel pipes having diameter upto 100.
The specialized facility was deployed and commissioned in a record time
to meet client''s requirement for the Gujarat Water & Irrigation Board,
which had laid down this challenging specification which your Company
was the first to respond to and achieve success in.
PERFORMANCE OF SUBSIDIARY COMPANIES 1. ON DOMESTIC FRONT
(i) PSL CORROSION CONTROL SERVICES LTD. - an Indian Company
PSL Corrosion Control Services Ltd. Operates through its various
divisions such as Rebar Coating Division, Corrugated Steel Plate Bridge
Division, Steel Structure Division etc.
The corrosion resistance FBE coated bars provided by the Company meets
all international standards on the subject thereby directly
contributing in country''s efforts in developing its infrastructure
sector. During the year under review, the Company could bag prestigious
orders for providing FBE Coating to the Steel Bars for usage in various
infrastructure projects of reputed Companies like ONGC, L&T, Navy, Tata
Projects Ltd., CIDCO etc.
The division of manufacturing steel plate bridges has commenced its
operations in India very recently. The division completed the FIRST
ever Corrugated Steel Plate Bridge in India at Jawahar, by Govt. of
Maharashtra. The project was successfully completed with the help of
our collaboration with M/s Fixon, Korea in 21 days.
Another division of the Company namely Steel Structure Division was
fortunate enough to bag an order from Reliance Group for constructing a
Reliance Retail Mall at Ring Road in Rajkot, Gujarat. This division by
using circular steel columns could complete this first steel structure
mall in a record time of four months.
PSL Corrosion Control Services Ltd. is confident that with state of the
art technologies that it uses in all its aforesaid three divisions, it
will be in a position to bag more prestigious order for each of these
three divisions in the Current Financial Year.
2. ON INTERNATIONAL FRONT
(i) PSL FZE - a UAE based company.
Your Company''s subsidiary PSL FZE, in a systematic and time bound
manner, doubled its pipe manufacturing capacity during the course of
the year under review, taking it from 75,000 MT per annum to 150,000 MT
The project was successfully commissioned and the additional capacity
has been deployed in serving the customer''s pipe requirement in
neighboring Saudi Arabia.
(ii) PSL NORTH AMERICA LLC - a US based company.
Your Company''s subsidiary in the U.S. M/s PSL North America LLC
enhanced its pipe manufacturing capacity by adding a specialized module
of 75,000 MT per annum capacity enabling the facility to produce pipes
for structural application, as well as extra large diameter pipe for
up to 110 diameter as opposed to its earlier limitation of 60 diameter
This important development will enable your subsidiary to serve the
needs of the rapidly increasing water pipeline sector in the region.
In addition to an Interim Dividend of Rs. 2.00 per equity share paid by
the Company in April, 2012, your Directors are now pleased to recommend
a final dividend of Rs. 2.00 per equity share of Rs. 10 /- each on all
fully paid up equity shares. If approved by the Members the total
dividend for the Financial Year 2011-12 amounting to Rs. 4.00/- per
equity share would work out to 40% dividend generally not witnessed,
particularly, during such Financial Year when the country''s economy is
struggling hard to maintain its various parameters.
After declaration of the said final dividend, your Company would
complete seventeen successive years of payment of dividend ever since
its Public Issue in February, 1995.
TRANSFER TO RESERVES
In accordance with the Companies (Transfer of Profits to Reserves)
Rules, 1975, your Directors have recommended transfer of a sum of Rs.
5.42 Crores to the General Reserve A/c. As a result the accumulated
reserves as on 31st March, 2012 would amount to Rs. 70.55 Crores.
Similarly after retaining Rs. 18.41 Crores in the Profit and Loss account
for the year under review, the accumulated credit Balance in the Profit
and Loss Account appearing in the Balance Sheet as on 31st March, 2012
has aggregated to Rs. 35.76 Crores.
During the year under review, Shri G.S.Sauhta, a Senior Director of our
company submitted his resignation after completing 24 years of
distinguished service in the Company out of a total of 38 years service
to the group.
Your Board placed on record its very deep appreciation for a very
useful role played by Shri Sauhta in the gradual growth of company in
In accordance with the provisions of Section 256 of Companies Act, 1956
and Article 91 & 92 of the Articles of Association of your Company,
Shri Harry H. Shourie, Shri D.N. Sehgal, Shri R.K. Bahri, Shri S.P
Bhatia & Shri C.K. Goel, Directors of your Company retire by rotation
and being eligible, offer themselves for reappointment at the ensuing
Annual General Meeting.
The Five Year term of Shri Gehani who was appointed w.e.f. 31st July,
2007 at 19th Annual General Meeting expired in July, 2012 as the Board
has recommended his reappointment for further period of 5 years. The
Shareholders at the ensuing Annual General Meeting would be requested
to consider the said reappointment of Shri G. Gehani.
In Compliance of Clause 49 (IV) (G) of the Listing Agreement, a brief
resume of the aforesaid five Directors eligible for re-appointment as
well as that of Shri G. Gehani (to be considered for re-appointment as
Whole-time Director) is annexed to the notice to enable the
shareholders to consider their re-appointment.
1. The Company Secretary as Compliance Officer of Company appointed in
pursuance of Clause 47 (a) of the Listing Agreement, ensures timely
compliance of SEBI regulations, applicable law, rules and regulations
and provisions of Listing agreement. He also responds to different type
of grievances and queries including the ones related to dividend of
2. In compliance of Clause 32 of the Listing Agreement executed by the
Company with the different Stock Exchanges, the Cash Flow Statement in
the format prescribed by SEBI is annexed to this report.
3. In compliance of Clause 32 of the Listing Agreement and Accounting
Standard AS-21 on consolidated financial statement, your Directors have
pleasure in attaching the
Consolidated Financial Statements, which forms part of this Annual
4. In compliance of Clause 49 VI (ii) of the Listing Agreement,
Quarterly Compliance Report in the prescribed format is regularly sent
to Stock Exchanges.
5. In order to comply with statutory obligation, Reconciliation of
Share Capital Audit is done on quarterly basis to reconcile the total
admitted capital with the two depositories in the country namely
National Securities Depository Limited (NSDL) & Central Depository
Services limited (CDSL) and the total issued and listed capital. Audit
Reports furnished to this effect by a Practicing Company Secretary
appointed for the purpose have been regularly submitted to the various
Stock exchanges with which the Company''s shares are listed.
INTERNAL CONTROL AND ADEQUACY
Your Company being well aware of the advantages of an effective control
system in the Company has an adequate system of internal controls
commensurate with its size to ensure that all assets are safeguarded
and protected against any loss from their unauthorized use or
disposition. Transactions are authorized, recorded and reported
Accordingly, a separate Internal Audit Department headed by a Senior
Person, who is a qualified Cost Accountant, has been set up. This
Department carries out the Internal Audit of Accounts of different
branches and critically analyses the same after which a Consolidated
Internal Audit Report is placed before the Audit Committee in its
meeting held every quarter for detailed deliberations on the same.
The team of Statutory Auditors being an external body achieves adequate
effectiveness of its extensive Audit due to support of the Company''s
Internal Audit Department. Both Statutory as well as Internal Auditors
are regularly invited at the Audit Committee Meetings wherein more
light is thrown on the regular Internal Audit checks carried out to
ensure that the responsibilities given to different Senior Officers of
the Company across all plants are discharged effectively with an
overall objective that the Company''s assets are safeguarded and
protected against losses from their unauthorized use or disposal.
Your Company reaffirms its commitment to the good corporate governance
practices and adheres to the standards set out by the Securities
Exchange Board of India / Stock Exchanges. A detailed report on
Company''s Compliances of various Corporate Governance norms as
stipulated under Clause 49 of the Listing Agreement executed with
National Stock Exchange and Bombay Stock Exchange is attached to this
Report. The Auditor''s Certificate confirming the compliance to the
conditions of Corporate Governance as stipulated in Clause 49 of the
Listing Agreement has been obtained and is annexed to the said
Corporate Governance Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As required by Clause 49 of the Listing Agreement, a separate
Management Discussion and Analysis Report is annexed to Directors''
Report and forms part of this Annual Report.
For assisting the Board of Directors on discharging its
responsibilities in various fields effectively and efficiently
following five Standing Committees with a defined mandate given to them
have been constituted by the board :-
1. Audit Committee
2. Committee of Directors
3. Remuneration Committee
4. Shareholders''/ Investors'' Grievance Committee
5. Share Transfer Committee
Meetings of these Committees are held periodically wherein certain
important decisions in accordance with their respective mandates are
taken which are thereafter ratified by the Board. Few Non-standing
committees were also constituted during the year for dealing with
specific assignments. Their term automatically expires after the
assignment in question is completed.
DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of the provisions contained in Section 217 (2AA) of the
Companies Act, 1956 with respect to Directors Responsibility Statement
, it is hereby confirmed that:
- In the preparation of Annual Accounts of the year ended 31st March
2012, the applicable accounting standards were followed and there are
no material departures;
- The 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 ended 31st March,
2012 and Profit & Loss Account of the period under report.
- 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.
- The Annual Accounts have been prepared on a going concern basis.
M/s Suresh C. Mathur & Co., Chartered Accountants, Statutory Auditors
of the Company, retires at the forthcoming Annual General Meeting and
being eligible offer themselves for re- appointment. The Board of
Directors of the Company has received a Certificate from the retiring
Auditors that their appointment, if made, will be in accordance with
the limits specified in Section 224(1B) of the Companies Act, 1956.
The notes to the accounts referred to in Auditors'' Report are
self-explanatory and therefore does not call for any further comments
by the Board of Directors.
Your Directors in accordance with the provisions of Section 233B of the
Companies Act, 1956 and an Order no. F.No.52/ 26/CAB-2010 dated
03.05.2011 modified vide Order no. F.No.52/26/CAB-2010 dated
30.06.2011 issued by Cost Audit Branch, Ministry of Corporate Affairs
has appointed Shri V.V. Deodhar, a practicing Cost Accountant as a
Cost Auditor to conduct the Cost Audit of the Company for the financial
year 2012-13. The said appointment has been approved by the Central
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Disclosures required pursuant to sub-section (1) (e) of Section 217 of
the Companies Act, 1956 read with Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988, regarding
conservation of energy, technology absorption and foreign exchange
earnings and outgo are given in the Annexure forming part of this
PARTICULARS OF EMPLOYEES
In terms of provisions of Section 217(2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of the employees are required
to be set out in the Annexure to the Directors'' Report. Having regard
to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual
Report excluding the aforesaid information, is being sent to the
Members and others entitled thereto. However, since the said
particulars will be made available at the Registered Office of the
Company w.e.f 6th September, 2012, the members desirous of obtaining
such particulars may write to the Director & Company Secretary of the
Company at its Registered Office.
Your Directors take this opportunity to thank all Investors, Suppliers,
Clients, Financial Institutions, Banks, Regulatory and Government
Authorities, Media and Stock Exchanges for their continued support.
Your Directors also place on record their appreciation for the
contribution made by the employees at all levels. Our Company''s
consistent growth was made possible only by their hard work,
solidarity, cooperation and support.
For and on behalf of the Board of Directors
Place : Mumbai (ALOK PUNJ) (ASHOK PUNJ)
Date : 1st August, 2012 Director Managing Director