Directors Report of PSL Ltd.

Mar 31, 2016

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 23^rd September, 2013 your Company in its Board Meeting held on 24^th 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 19^th 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 8^th 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 31^st 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 29^th 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 31^st 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 11^th 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. 10^th November,2015. However she was relieved off her duties on 15^th 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 29^th 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 31^st 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 31^st 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: 3^rd August, 2016

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Mar 31, 2015

Dear Members,

The Directors present this Twenty Seventh Annual Report of the Company together with the Audited Statements of Accounts for the Financial Year 2014-15.

ACCOUNTING YEAR

Members may recall that Financial Year 2012-13 comprised of 18 months period commencing from 1st April, 2012 to 30th September, 2013. As a consequential effect of extension of the said Financial Year by a period of six months, the following Financial Year i.e. Financial Year 2013-14 comprised of only six months period i.e. 1st October, 2013 to 31st March, 2014. Members may note that the Financial Year 2014-15 under review however comprised of usual 12 months period commencing from 1st April, 2014 to 31st March, 2015.

RESTRUCTURING OF COMPANY'S DEBTS Members may kindly recall that during the aforesaid extended Financial Year 2012-13, your company had suffered a serious blow in its operations due to various external and internal reasons most of which were beyond the control of your management. It is because of such adverse effect on company's operations that profitability had substantially fallen down, as a direct result of which even the cash flows were affected very adversely. Hence your company had no choice but to apply to Corporate Debt Restructuring Cell in March, 2013 for restructuring of your company's debt in accordance with a policy of Reserve Bank of India then in vogue. Finally the restructuring scheme approved by the CDR Empowered Group as communicated to the company on 23rd September, 2013 started getting implemented by way of execution of a Master Restructuring Agreement (MRA) between the company and its various lenders on 19th November, 2013. Since post sanction of the said scheme most of the lenders of the company started adopting a conservative approach towards sanctioning of additional fund and non-fund based facilities to the company, profits of the company had to substantially fall as is evident from the table depicting the financial results hereunder:

FINANCIAL RESULTS

a) On Standalone Basis

The financial results during the year under review are summarized below:

(Rs. in Crore)

Particulars March 31,2015 March 31, 2014 (Twelve Months) (Six Months)

Gross Sales 151.18 199.37

Less: Excise Duty 4.86 7.0.

Net Sales 146.32 192.34

Other Income 3.94 25.87

Total Income 150.26 218.21

Profit/(Loss) Before Depreciation, (84.06) (31.91) Finance Cost, Exceptional items & Tax

Less: Depreciation and Finance Cost 221.74 110.10

Less: Exceptional items 171.72 Nil

Profit/(Loss) Before Taxation (477.53) (142.01)

Provisions

Less: Deferred Taxation 15.55

Profit / (Loss) After Tax (477.53) (126.46)

Balance Carried to Balance Sheet (477.53) (126.46)



In view of the period of the two financial years above being different the data of current financial year is not comparable with last financial year straightway. As can be observed during the year under review the gross sales & total income have substantially fallen down, resulting into your company incurring a loss of Rs.477 Crores. Such situation is the direct after effect of what is stated in foregoing paragraphs.

b) On Consolidated Basis

The consolidated income from operations of the Company and its various subsidiaries excluding the two subsidiaries in USA for the year ended on March 31, 2015 got decreased from Rs. 807.04 Crores in the last financial year to Rs. 305.47 crores as a result of which the net loss of the Company got increased form Rs. 352.43 crores in the last financial year to Rs. 579.04 Crores in the financial year under review i.e. 2014-15.

DIVIDEND

Keeping in mind the losses registered 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

Since an essential condition of the restructuring of company's debt was conversion of part of the debt of different lenders into equity, your company issued 45638441 equity shares of the face value of Rs.10/- per share to the lenders at a premium of Rs.16/- per share in accordance with a SEBI formula prescribed for this purpose. Such issuance of additional equity resulted into enhancement of paid up capital of the Company from its earlier level of Rs.5329.68 Lacs to 9893.53 Lacs.

In addition to the above, the process for allotment of 50619233 equity shares at the same total price of Rs.26/- per share to a Creditor and few promoters group entities has already been initiated and after completion of the said allotment process your company's paid up share capital would get further enhanced from Rs. 9893.53 lacs to Rs.14955.45 Lacs which will be well within the present Authorized Capital of Company of Rs.180 crores.

OPERATIONAL PERFORMANCE

As is evident from the financial results stated above, the Company's performance has been very adversely affected due to the financial crunch that the Company faced during the financial year 2012- 13. Apart from the ripple effect of the aforesaid Company specific problem, your company also had to suffer due to certain issues which directly affected the pipeline industry in general. Delay in implementation of the country wide projects such as national gas grid and water distribution projects etc. added fuel to the fire as the demand for steel pipes (the manufacturing of which is core competence of your Company) got drastically reduced thereby straight away adversely affecting the business prospects in a big way.

REFERENCE TO BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTIONS (BIFR)

Your Company suffered substantial operational losses during the financial year 2012-13 as a result of which the Company's net worth was eroded, (since the accumulated losses exceeded the entire net worth). As a result of such erosion the relevant provisions of Sick Industrial Companies (Special Provision) Act, 1985 got triggered and therefore your Company, in order to comply with section 15 of the said Act, had to make reference to the Board for Industrial and Financial Reconstructions (BIFR) for determination of the measures which shall be adopted with respect to the Company. Such reference is currently being processed at the Delhi office of BIFR.

ACCOUNTS STATEMENTS OF SUBSIDIARY COMPANIES

Your Company has five wholly owned subsidiaries in addition to two step down subsidiaries and seven associate Companies.

Pursuant to the provisions of Section 129(3) of the Companies Act,2013 a statement containing salient features of Financial statements of the Company's subsidiaries (excluding the two subsidiaries in USA) in form AOC-1 is attached to the financial statements of the Company.

As During the financial year 2014-15 PSL USA Inc.-the Company's subsidiary in USA and its step down subsidiary namely PSL North America LLC filed voluntary petitions for relief under chapter XI of The United States Bankruptcy code State of Delaware USA since the said subsidiary Company suffered heavy losses in the last three years. Hence financial results of these two companies have not been included.

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

Consequent upon substantial reduction in the operations of the Company, most of the manufacturing facilities of the Company in different locations in the country were not getting optimally utilized. Moreover even the fixed expenses including the payroll expense of the manpower deployed at such locations were causing an additional drain on Companies financial position. In order to mitigate the effect of these two important factors, your company has executed an "Operation Maintenance and Management" contract with Jindal Tubular Limited (JTL) by way of which not only the valuable machinery installed at these locations would remain continuously functional but even certain fixed costs including the cost of man power at the said location would be recovered from the revenue generated by Jindal Tubular Limited due to the aforesaid contract.

DIRECTORATE

At the beginning of the Financial Year under review the strength of your company's Board of Directors was 14 Directors which included Six Whole Time Directors, One Non-executive Director, Five Independent Directors and Two Nominee Directors.

However during the year under review the Directorate got changed due to following reasons:

1. On 31st May, 2014 Shri M. M. Mathur,Whole Time Director ceased to be on the Board consequent upon resignation submitted by him earlier.

2. On 15th July, 2014, Shri. G. Gehani, Whole Time Director & Company Secretary ceased to be on the Board consequent upon resignation submitted by him earlier..

3. On 15th November, 2014, Shri P. V. Apte, Independent Director left for his heavenly abode.

4. On 28th November, 2014, Smt. Geeta Poojary, Nominee Director resigned from the Board.

As a result of the aforesaid changes, at the end of the Financial Year 2014-15 your Board comprised of only Ten Directors including Four Whole Time Directors, One Non-executive Director, Four Independent Directors and One Nominee Director.

Woman Director

Members may note that in accordance with notifications issued by SEBI sometime back it is now compulsory for every listed company to have atleast one Woman Director on its Board. Since the earlier woman Director Mrs. Geeta Poojary (who also happened to be a nominee of EXIM Bank) had resigned some time back, your Board of Directors in its meeting held on 13th May, 2015 (which date is although after close of the Financial Year under review but is before the date of this report) appointed Mrs. Manjula Bhatia who has adequate exposure in finance, accounting and administrative functions as Non-executive Additional Director holding the said office till the conclusion of the ensuing Annual General Meeting. Since the company has received a notice under Section 149(1) of Companies Act, 2013 for her appointment as a Director, the Members would be requested to consider and if agreed to appoint her as a Director on company's Board liable to retire by rotation.

In view of what is stated above the aforesaid requirement of SEBI for a Woman Director on every listed Company's Board has been fully complied with. Now the total strength of your Directors is Eleven Directors with adequate mix of Whole Time Directors, Non- executive Directors, Independent Directors, Nominee Director and Woman Director. The number and ratio of the said Directors on Board is well in accordance with the prescribed norms of Companies Act and Listing Agreement for the purpose.

KEY MANAGERIAL PERSONNEL

A. Company Secretary

Consequent upon resignation of Shri G. Gehani effective 15th July,2014 from the post of Whole Time Director and Company Secretary of the Company, your Board had appointed Mr. Shashi Ranjan as a Company Secretary of the Company with effect from 20th December, 2014.

However since Mr. Shashi Ranjan in order to join a Public Sector Company, had also submitted his resignation from the post of Company Secretary as a result of which he was relieved off his duties on 11th May, 2015.

B. Chief Financial Officer

Member may note that in accordance with the provisions contained in Companies Act, 2013 which became effective from 1st April, 2014, a CFO was required to be necessarily appointed Mr. V. Subramaniam, who was a qualified Chartered Accountant as well as a Company Secretary was appointed on 1st January, 2014 as the CFO of the Company. However, for certain personal reasons although the said CFO has submitted his resignation from the services of the Company 29th June,2015 he is yet to be formally released from his duties.

BOARD MEETINGS

The Board of Directors met four times during the financial year 2014-15, 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 relevant provisions of Listing Agreement.

BOARD EVALUATION

As stated above the Board of Directors of your Company not only comprises of appropriate numbers but even ratio of Executive and Non-executive Directors is in accordance with prescribed norms. While inducting fresh members on the Board it is ensured that the Board has appropriate mix of Members with different experience levels, knowledge and educational qualifications in different Sectors and discipline relating to the company's business. Fortunately professionals from different fields having large exposure in their respective fields are contributing very effectively on your Company's Board. Due care has been taken to nominate such members of the Board on different Standing and Non-standing Committees who are professionally close to the mandate of such committees. At each meeting of the Board a chairman from amongst the Independent Directors is chosen to chair the meeting. This methodology helps in ensuring that all the Independent Directors are able to chair the meetings turn by turn. Moreover as a matter of practice the chairman so chosen ensures that the management has taken adequate steps to implement the various decisions taken by the Board in its earlier meetings. Again although the minutes of different meetings of Board of Directors of different subsidiaries of the company are placed at the meeting of the Board of the company for noting, the Board discuss the matter arising out of such minutes to not only understand the progress of different subsidiaries on different fronts but to also appreciate the problems being faced by such subsidiaries in their day to day working as well as issues confronting them for enhancement of their business.

In general the Board of Directors of your company also ensures that:

i) The company duly complies with statutory requirements prescribed in different laws applicable to the company as well to the relevant state laws applicable to specific plant of the company located in different states.

ii) The remunerations paid to Whole Time Directors is in accordance with the recommendation of the Remuneration Committee as well as by the prescribed law.

iii) The overall pay roll expenses of the company is reflective of the size of the company, operations of the company and the capacity of the company to pay.

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

1. The Company Secretary as "Compliance Officer" 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 shareholders.

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, the consolidated financial statements are attached, which form part of the Annual Report.

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 accordance with statutory obligations, Secretarial 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. A Practicing Company Secretary appointed by the Company for this purpose furnishes Audit Report to this effect which have been regularly submitted to the various Stock exchanges with which the Company's shares are listed.

INTERNAL CONTROL AND ADEQUACY

Your Company has a proper and adequate system of Internal Control to ensure that all assets are safeguarded and protected against losses from unauthorized use or disposition and transactions are authorized, recorded and reported correctly. The Internal Control is designed to ensure that financial and other records are available for timely preparing Financial Statements.

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

Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee. The Risk Management Committee has been entrusted with the responsibility to assist the Board Members about the risk assessment and its minimization procedure. Detail of the Risk Management is set out in the Corporate Governance Report which forms part of this Report.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A separate section on Corporate Governance and Management Discussion Analysis Report forming a part of Director's Report and the certificate from the Company's Auditors confirming compliance of conditions on Corporate Governance stipulated in Clause 49 of the Listing Agreement is included in the Annual Report.

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.

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,2015, 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.

DECLARATION BY INDEPENDENT DIRECTOR

The Company has received declarations from all the Independent Directors of the company confirming the they meet the criteria of Independent as prescribed both under the Act and Clause 49 of the Listing Agreement executive by the Company with the Stock Exchanges.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large.

STATUTORY AUDITORS AND AUDITORS' REPORT

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. The Company has received a Certificate from the retiring Auditors to the effect that the appointment if made, would be within the limits prescribed vide Section 139 of 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

Pursuant to the provisions of Section 148 of the Companies Act, 2013, the Board of Directors have re-appointed Mr. V.V. Deodhar, a practicing Cost Accountant as a Cost Auditor to conduct the Cost Audit of "Steel Pipe Products" for the Financial Year 2015-16 at a consolidated fees of Rs.4.00 Lacs subject to ratification of the same by Shareholders of the Company.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act,2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014 a firm of Practising Company Secretary was appointed to undertake the Secretarial Audit of the Company for the year ended 31st March,2015.

The Secretarial Audit Report for the financial year ended 31st March,2015 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.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established a vigil mechanism and whistle Blower Policy to deal with instances of fraud and mismanagement, if any, and conducting business with integrity, including in accordance with all applicable laws and regulations. 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 REPORT

In accordance with Section 134(3)(a) of the Companies Act,2013 an extract of Annual Return in Form MGT-9 is annexed herewith as Annexure-III to this Report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed by 134(3)(m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules,2014 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo are given in the Annexure- IV forming part of this Report.

PARTICULARS OF EMPLOYEES

Disclosure pertaining to remuneration and other details as 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 place on record its 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 PSL LIMITED

Sd/- Sd/-

(ASHOK PUNJ) (ALOK PUNJ) Managing Director Director

Place: Mumbai Date: 10th August, 2015

---

Mar 31, 2014

Dear Members,

The Directors present this Twenty Sixth Annual Report of the Company together with the Audited Statements of Accounts for the Financial Year 2013-14.

FINANCIAL YEAR

The Financial Year 2013-14 ended on 31st March, 2014 comprised of a period of six months only i.e. 1st October, 2013 to 31st March, 2014. Such shortening of the Financial Year was the consequential effect of extension of the previous Financial Year 2012-13 which comprised of eighteen months period instead of usual twelve months period.

FINANCIAL PERFORMANCE

The financial performance during the year under review is summarized below :

(Rs. in Crore)

Particulars Current Year I Previous Year (Six Months) (18 Months)

Sales 192.34 2483.66

Other Income 25.87 13.64

Total Income 218.21 2497.30

Profit before depreciation and finance (31.91) (63.21) cost is

After deducting depreciation and 110.10 530.00

Finance cost of

The profit/ (loss) for the year before (142.01) (593.21)

Taxation Provisions is

From which is deducted a deferred 15.55 (2.05)

Taxation Provision of

Thereby Leaving a Net Profit / (Loss) of (126.46) (595.26)

Which your directors have recommended to be appropriated as follows :-

a) Transfer to General Reserve 0.00 0.00

b) Proposed Dividend 0.00 0.00

c) Prior Year Payments 0.00 5.25 5.25

Thereby leaving a balance of (126.46) (600.51)

for carrying over to next year''s account.

FINANCIAL PERFORMANCE

The Financial Year 2013-14 under review comprised of only six months period i.e. from 1st October, 2013 to 31st March, 2014 whereas the previous Financial Year 2012-13 comprised of eighteen months period i.e. 1st April, 2012 to 30th September, 2013. Hence the data in two columns above cannot be compared in a simplistic manner.

Moreover financial crunch experienced by the Company in the Financial Year resulting into restructuring of Company''s debt (as also stated in the last Annual Report) also adversely affected Company''s performance in a very significant manner.

In view of the aforesaid cause and effect relationship of the said financial crunch and restructuring of debts the operations were substantially reduced during the year. Your Company, therefore, only could achieve a total income of only Rs. 218.21 Crores in the financial year under review as against Rs. 2497.30 Crores in the extended previous Financial Year comprising of eighteen months period. Although operational expense were also substantially reduced in addition to lower deprecation as well as finance cost, the year under review still ended with a net loss of Rs. 126.46 Crores on standalone basis.

Since the subsidiaries of the Company continued to generate turnover (although at a lower scale) on consolidated basis the total income was recorded at Rs. 816.60 Crores. However due to decrease in sales volume which reduced variable cost but because of constant fixed cost and adverse business conditions a Net Loss after tax was recorded at Rs. 336.95 Crores.

OPERATIONAL PERFORMANCE

During the six months period under review comprised in the Financial Year 2013-14, the entire economy was badly affected due to policy paralysis mainly because of the uncertainties prevailing on political front as a result of pre and post general election scenario. To add to the woes of industry, while a stable government was finally elected indicating good signs of growth in future, the change of the Government in Centre of a different political party, many of the earlier Government''s Plans and policies with respect to Industry in general and Steel Sector in particular were stalled pending formulation of new policies by new government of a different political party.

The glaring example of what is stated above is abnormal delay in countrywide projects such as National Gas Grid and Water Distribution projects etc. Delays in such projects of national importance directly reduced the demand for Steel Pipes the manufacturing of which is a core competency of your Company.

RESTRUCTURING OF DEBTS

As members are aware that while in the past company grew at an exponential rate suddenly from the last Financial Year your Company''s operations were severally affected due to the various reasons including the following which were mainly external and beyond the control of Management.

1) Delay in implementation of National Gas Grid

2) Excess capacity in the industry leading to aggressive pricing

3) Low capacity utilization

4) Increase in Interest cost

5) Adverse fluctuations in Exchange Rate

Such reduced operations had to create an adverse impact on the liquidity of the Company as a result of which your Company had no choice but to apply to CDR Cell in March, 2013 for restructuring of Company''s outstanding debt through CDR mechanism envisaged under the guidelines issued by the Reserve Bank of India. After considering Company''s proposal, the final restructuring scheme was approved by CDR Empowered group on 23rd August, 2013 which was duly communicated to the Company by the CDR Cell vide its Letter of Approval (LOA) dated 23rd September, 2013.

Consequent upon the aforesaid issuance of the LOA dated 23rd September, 2013, the various formalities associated with implementation of CDR scheme (including Master Restructuring Agreement (MRA) dated 19th November, 2013) have been executed between the Lenders and the Company. As on date all the CDR Lenders except State Bank of India (which has now transferred its debt to Assets Reconstruction Company) have executed MRA vide which their respective outstanding debts payable by the Company shall stand restructured in accordance with the scheme approved by CDR Empowered group.

Consequently super majority have been achieved since 88.24% lenders by numbers and 76.69 % lenders by value have as on date signed the Master Restructuring Agreement.

ACCOUNTS STATEMENTS OF SUBSIDIARY COMPANIES

Your Company has five subsidiaries and two step down subsidiaries namely:

1. PSL Corrosion Control Services Limited

2. PSL Gas Distribution Private Limited

3. PSL Infrastructure and Ports Private Limited

4. Pipeline Systems Limited

5. PSL USA INC.

6. PSL North America LLC (A stepdown subsidiary of PSL USA INC.)

7. PSL FZE (A stepdown subsidiary of Pipeline Systems Ltd.)

In accordance with the General Circulars issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of subsidiary companies are not required to be attached with the Balance sheet of the holding company subject to compliance of few conditions specified in the circular. In accordance with the scheme of the said circular, the Board of Directors of your Company has granted its consent by way of passing a Resolution for not attaching the copy of Balance Sheet, Profit & Loss Account and other documents of the various subsidiaries with the Annual Accounts of your Company.

However, the Company will make available the Annual Accounts of the said Subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. Further, these documents of the subsidiary companies will also be kept for inspection at the Registered Office of the company and at the corporate office of the respective subsidiary companies. As required under the aforesaid circular, a summarized statement of financial position of the subsidiaries has been appended to this Annual Report.

As stipulated by Clause 32 of the Listing Agreement executed by the Company with the Stock Exchanges, the consolidated financial statements have been prepared by the company in accordance with the applicable accounting standards issued by the Institute of Chartered Accountants of India. The audited consolidated financial statements together with Auditors'' Report form part of this Annual Report.

DIVIDEND

Keeping in mind the loss registered by the Company during the year under review, your Directors have not recommended any dividend for the year under review.

TRANSFER TO RESERVES

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

DIRECTORATE

(A) Whole time Director

During the year under review Shri D.N. Sehgal, 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 reason. The resignation was accepted by the Board with effect from 1st April, 2014.

The Board while accepting his resignation recorded its deep appreciation for the valuable services rendered by Shri D. N. Sehgal during his tenure.

In addition to the above since close of financial year 2013-14 and till date of this report following changes have occurred in the composition of the Board of Directors of the Company due to resignations and fresh appointment:-

a) On 2nd April, 2014 Mr. M.M. Mathur submitted his resignation from the post of Whole Time Director due to personal reasons. His resignation was accepted by the Board with effect from 31st May, 2014.

b) On 17th June, 2014 Mr. G. Gehani submitted his resignation to the Managing Director of the Company from the post of Whole Time Director & Company Secretary due to his personal reasons. His resignation was accepted by Managing Director subject to post facto approval of the Board with effect from 15th1 July, 2014. Subsequently the Board in its meeting held on 5th August, 2014 ratified the action of Managing Director of accepting the resignation of Mr. G. Gehani.

The Board of Director placed on record the immense contribution made by both the aforesaid Director namely Mr. M. M. Mathur and Mr. G. Gehani during their long association with the Company.

c) In terms of provisions of Section 152 of the Companies Act, 2013 Shri R. K. Bahri and Shri S. P. Bhatia Directors shall retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting. In Compliance of Clause 49 (IV) (G) of the Listing Agreement a brief resume of the said Directors is annexed to the notice to enable members to consider their re-appointment.

(B) Independent Director

The Company had, pursuant to the provisions of Clause 49 of the Listing Agreement entered into with Stock Exchanges, appointed Mr. Ashok Sharma, Mr. Naresh Chandra Sharma, Mr. Prakash Vinayak Apte, Mr. Harsh Pateria and Mr. Harry Shourie as Independent Directors of the Company.

As per Section 149(4) of the Companies Act, 2013, which came into effect from 1st April 2014, every listed public Company is required to have at least one-third of the total numbers of directors as Independent Directors. In accordance with the provisions of Section 149 of the Act, these directors are being appointed as Independent Directors to hold office as per the tenure of appointment mentioned in the Notice of the forthcoming Annual General meeting of the Company.

(C) Nominee Director

On the recommendation of the Export-Import Bank of India - an important lender of the company, the Board of Directors in its meeting held on 30th May, 2014 appointed Mrs. Geeta Poojary as a "Nominee Director" on the Board of the Company.

STATUTORY COMPLIANCES

1. The Company Secretary as "Compliance Officer" 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 shareholders.

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, the consolidated financial statements are attached, which form part of the Annual Report.

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 accordance with statutory obligations, Secretarial 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. A Practicing Company Secretary appointed by the Company for this purpose furnishes Audit Report to this effect which have been regularly submitted to the various Stock exchanges with which the Company''s shares are listed.

INTERNAL CONTROL AND ADEQUACY

Your Company has set up a proper and adequate system of Internal Control headed by a Senior Person, who is a qualified Cost Accountant to ensure that all assets are safeguarded and protected against losses from unauthorized use or disposition and transactions are authorized, recorded and reported correctly. The Internal Control is designed to ensure that financial and other records are available for timely preparing Financial Statements.

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.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In compliance of Clause 49 of the Listing Agreement executed by the Company with the stock exchanges, the report on Corporate Governance and Management Discussion and Analysis Report are annexed to this report and form part of the Annual Report.

The requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this report.

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.

While the following five Standing Committees with a defined mandate given to them are permanent in nature, various Non- standing Committees are constituted for dealing with specific assignments, therefore their term automatically lapses after the assignment in question is completed;

1. Audit Committee

2. Committee of Directors

3. Remuneration Committee (Now known as "Nomination and Remuneration Committee")

4. Shareholders''/Investors'' Grievance Committee (Now known as "Stakeholders Relationship Committee")

5. Share Transfer Committee

Many meeting of these Committees were convened during the year for considering various important matter placed before them and decision were taken in accordance with their respective mandates. All such decisions are thereafter ratified by the Board.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to 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 under review the applicable accounting standards read with the requirements set out in Companies Act, 1956 have been followed

* 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 under review 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.

AUDITORS

The Auditors, M/s Suresh C. Mathur & Co. Chartered Accountants hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment for the financial year 2014-15.

The Company has received a letter from the Statutory Auditors to the effect that their re-appointment for the financial year 2014-15, if made, would be within the limits prescribed vide Section 139 of the Companies Act, 2013 and that they are not disqualified for re-appointment.

AUDITORS'' REPORT AND OBSERVATIONS

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-I forming part of this report.

COST AUDITORS

In accordance with the directions issued by Cost Audit Branch, Government of India vide an Order No. F.No.52/26/CAB-2010 dated 03.05.2011 pursuant to Section 233B of the Companies Act, 1956/Section 148 of the Companies Act, 2013, the Board of Directors have re-appointed Mr. V.V. Deodhar, a practicing Cost Accountant as a Cost Auditor to conduct the Cost Audit of "Steel Pipe Products" for the financial year 2014-15 at a consolidated fees of Rs. 4.00 Lacs subject to ratification of the same by Shareholders of the Company.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed by subsection (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-II forming part of this Report.

PARTICULARS OF EMPLOYEES

In compliance of Section 219(1)(b)(iv) of Companies Act, 1956 this report is being sent to the shareholders of the Company without containing therein the information in accordance with Sub-section 2A of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975. However, any member interested in obtaining such particulars may write to the "Secretarial & Legal Department" of the Company.

ACKNOWLEDGEMENTS

Your Directors thank the Customers, Suppliers, Dealers, Government Authorities, Financial Institutions, Lenders, Bankers, Consultants, Solicitors, Auditors & Shareholders for the continued support during the year.

Your Directors also place on record their deep appreciation for the hard work, cooperation and support by the employees at levels in these challenging times.

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

Sd/- Sd/- (ALOK PUNJ) (ASHOK PUNJ) Director Managing Director Place: Mumbai Date: 5th August, 2014

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Sep 30, 2013

The Directors hereby present this Twenty Fifth Annual Report of the Company together with the Audited Statements of Accounts for the Financial Year 2012-13

EXTENSION OF FINANCIAL YEAR

The Financial Year 2012-13 which in the normal course would have completed on 31st March, 2013 was extended by a period of 6 months after necessary approval from Registrar of Companies to that effect. Thus, the so extended Financial Year 2012-13 comprised of 18 month period ended on 30th September, 2013.

FINANCIAL PERFORMANCE

The financial performance during the extended year under review is summarized below :

(Rs. in Crores) Particulars Current year Previous year

Sales 2483.66 2277.94

Other Income 13.64 13.05

Total Income 2497.30 2290.99

Profit before depreciation and finance (63.21) 432.60

cost is

After deducting depreciation and 530.00 362.94

Finance cost of

The profit/ (loss) for the year before (593.21) 69.66

Taxation Provisions is

From which is deducted a Taxation 2.05 15.50

Provision of

Thereby Leaving a Net Profit / (Loss) of (595.26) 54.16

Which your directors have recommended to be appropriated as follows :-

a) Transfer to General Reserve 0.00 5.42

b) Proposed Dividend 0.00 24.78

c) Prior Year Payments 5.25 5.25 5.57 35.77

Thereby leaving a balance of (600.51) 18.39 for carrying over to next year''s account.

COMPANY''S PERFORMANCE (A) ON STANDALONE BASIS

1. DURING THE YEAR UNDER REVIEW

Despite the decline in the growth rate in Indian Economy, your company''s total income amounted to '' 2497.30 Crores during the year under review in comparison to '' 2290.99 Crores in the previous year. The Net Loss before and after tax stood at '' (593.21) Crores and '' (595.26) Crores respectively.

Broadly some of the factors contributing to the decline in the financial performance of the Company during the year under review are detailed below:

1) Delay in implementation of National Gas Grid

2) Excess capacity in the industry leading to aggressive pricing

3) Low capacity utilization

4) Increase in Interest cost

5) Adverse Movement in Exchange Rate

2. FOR THE YEAR UNDER REVIEW

a) Due to the loss incurred by the company, no amount is proposed to be transferred to the General Reserve account.

b) Due to the reason as stated above, the debit balance of Profit & Loss Account proposed to be carried to Balance Sheet is '' 600.51 Crores.

c) Keeping in mind the loss incurred by the Company, the directors do not recommend any dividend for the extended financial year ended 30th September, 2013.

B. ON CONSOLIDATED BASIS

During the year under review, the consolidated total income stood at '' 3208.19 Crores as compared to '' 2715.56 Crores in the previous year. The Net Loss before and after tax amounted to '' (641.02) Crores and '' (659.92) Crores respectively.

RESTRUCTURING OF DEBTS

Members will agree that ever since Company''s incorporation way back in 1987 adequate growth of the Company was registered in most of the financial years eventually enhancing the turnover as well as profitability year after year. As can be seen from the financial snapshot for last 10 years included in a table forming part of this Annual Report without a break in any year Company''s reserves grew substantially which directly permitted your Board to recommend sizable dividends (not below 40%) year after year.

While all these years company grew at an exponential rate suddenly during the Financial Year 2012-13 your Company''s operations were severally effected due to reasons (outlined above) which were mainly external. Such reduced operations had to create an adverse impact on the liquidity of the Company as a result of which your Company had no choice but to apply in March, 2013 to CDR Cell for restructuring of Company''s debt through CDR mechanism envisaged under the guidelines issued by the Reserve Bank of India After considering Company''s proposal, the final restructuring scheme was approved by CDR Empowered group on 23rd August, 2013 which was duly communicated to the Company by the CDR Cell vide its letter of approval dated 23rd September, 2013. The scheme inter-alia provide for rescheduling of re-payment schedule, downward revision of interest rates, pledge of shares by promoters, contribution into share capital by promoters and promoters group & a right of conversion to Company''s CDR Lenders to convert the portion of their respective outstanding Working Capital facility into equity capital of the company.

Consequent upon the aforesaid issuance of the LOA dated 23rd September, 2013, the various formalities associated with implementation of CDR scheme (including execution of Master Restructuring Agreement dated 19th November, 2013) are being carried out.

OPERATIONAL STATUS

Your Company is engaged in the business of manufacturing HSAW/ Spiral pipes, Providing of pipe coating & ancillary services such as induction pipe bending, turnkey HSAW plant manufacturing etc. Your Company is the largest manufacturer of HSAW pipes in India and has 1.40 million MTPA capacity in locations across India & 525000 MTPA capacities overseas.

Your Company has strategically located pipe mills and coating facilities in Chennai, Kandla, Vizag, Ahmedabad, Jaipur, Daman, Mississippi (through its subsidiary company ''PSL North America LLC'') and Sharjah (through its subsidiary company ''PSL FZE'') to cater to domestic as well as overseas market.

OPERATIONAL PERFORMANCE

During the year under review, your Company witnessed certain constraints due to external factors that affected its operational performance. Several delays in Implementation of the National Gas Grid projects due to jurisdictional disputes between public sector undertakings and drastic drop and reduction in national gas output have adversely impacted the pipeline sector in India. In anticipation of the demand leading from the gas grid and other pipeline projects, the production capacity have been added on exponential basis, However, as the demand has not picked up as expected, a situation of over supply in the Industry arose which resulted into cut down on margins & hence worsened the financial position of the businesses operating within the pipeline sector.

Due to the delays in implementation of country-wide projects such as the gas grid & water distribution projects, the accumulation of raw materials increased which resulted into higher inventory and lower capacity utilization. Other factors which added to the downfall were the stretched working capital cycle of the company due to higher levels of inventory and debtors resulting into increased Interest Cost and adverse movement in exchange rate.

Despite the aforesaid difficulties and strained liquidity position, your Company has managed to complete a host of projects on time and within budget.

PROGRESS ON OVERSEAS FRONT (a) PSL USA Inc., USA :

PSL USA Inc., incorporated in December, 2006 in the state of Delaware, USA. This Company was incorporated as a wholly owned subsidiary of the Company to primarily take up contracts for manufacturing of pipes, keeping in view the upsurge in pipe laying activity in North America.

During the Financial Year 2007, PSL USA Inc. floated a joint venture (with 78 % holding) namely PSL North America LLC. A plant using state of the art technology to manufacture 24 meter long pipes, with installed capacity of 300,000 MTPA has been set up by the Company in Mississippi, USA. The Company has executed an order for Florida Gas Transmission Company LLC & is currently executing an order received from ETC Texas Pipeline limited for approx $54 million.

b) UAE PROJECT

Your Company''s associate in the UAE - PSL FZE is engaged in manufacturing of steel pipes, anti-corrosive coating of steel pipes and export of steel pipes with a capacity of 150,000 MTPA. The Company has executed major orders for Hanwa Co. Ltd for $ 40 million and Saipem-Afcons Joint Venture for $ 22 million. The Company is now actively executing a major order received from Saline Water Conversion Corporation for $ 80 million.

APPROPRIATIONS DIVIDEND

In view of high depreciation, interest and in the absence of profits during the current financial year, your Directors are unable to recommend any dividend for the year under review.

TRANSFER TO RESERVES

Keeping in mind the loss registered by the Company during the year under review, the Board of Directors did not propose transfer of any amount to the General Reserve Account.

ANNUAL ACCOUNTS OF SUBSIDIARY COMPANIES

In terms of the General Exemption granted by Ministry of Corporate Affairs, Government of India vide its general circular no. 2/2011 dated 8th February, 2011 regarding attaching of financial documents of the subsidiary companies with the Balance Sheet of the Holding Company subject to compliance of few conditions specified in the circular, the Board of Directors of the Company has granted its consent by way of resolution for not attaching the copy of Balance Sheet, Profit & Loss Account and other documents of the various subsidiaries with the Annual Accounts of the Company.

The Company will also make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. Further, these documents of the subsidiary companies will also be kept for inspection at the Registered Office of the Company and at the corporate office of the respective subsidiary companies. As required under the aforesaid circular, a summarized statement of financial position of the subsidiaries has been appended to this Annual Report.

As stipulated by Clause 32 of the Listing Agreement executed by the Company with the Stock Exchanges, the consolidated financial statements have been prepared by the Company in accordance with the applicable accounting standards issued by the Institute of Chartered Accountants of India. The Audited Consolidated Financial Statements together with Auditors'' Report form part of this Annual Report.

DIRECTORATE

During the year under review:-

(1) Shri Paresh J. Shah, an Independent and Non-Executive Director of the Company expressed his unwillingness to continue on the Board of the Company and submitted his resignation due to his prior commitments and conflict of interest in the professional assignments handled by him. The resignation was accepted by the Board of Directors in its meeting held on 15.05.2013. The Board while accepting his resignation recorded its deep appreciation for the valuable services rendered by Shri Paresh J. Shah during his tenure.

(2) In exercise of the right granted to ICICI Bank by way of restructuring agreement, the bank has appointed Shri Sandip Sharma as a "Nominee Director" on the Board of your Company w.e.f 12th August, 2013. The aforesaid appointment of Shri Sandip Sharma was also taken on record by the Board of Directors in its meeting held on 30th October, 2013

In terms of provisions of Section 256 of Companies Act, 1956 Shri G. Gehani, Shri Harsh Pateria, Shri M.M. Mathur and Shri Alok Punj Directors shall retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting. In Compliance of Clause 49 (IV) (G) of the Listing Agreement a brief resume of the said Directors is annexed to the notice to enable members to consider their re-appointment.

STATUTORY COMPLIANCES

1. The Company Secretary as Compliance Officer 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 shareholders.

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 included in the Annual Report.

3. In compliance of Clause 32 of the Listing Agreement and Accounting Standard AS-21, the consolidated financial statements are attached, which form part of the Annual Report.

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 accordance with statutory obligation, Secretarial 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 has set up a separate Internal Audit Department headed by a Senior Person, who is a qualified Cost Accountant for carrying out the Internal Audit of Accounts of different branches and critically analyse the same after which a Consolidated Internal Audit Report is placed before the Audit Committee in its every quarterly meeting for detailed deliberations on the same.

The team of Statutory Auditors being an External Body achieves adequate effectivity of its extensive Audit due to support of the Company''s Internal Audit Department. Both Statutory as well as Internal Auditor 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 executed effectively with an overall objective that the Company''s assets are safe guarded and protected against losses from unauthorized use or disposal.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In compliance of Clause 49 of the Listing Agreement executed by the Company with the stock exchanges, a separate report on Corporate Governance and Management Discussion Analysis Report together Auditors Certificate on the compliance with the conditions of Corporate Governance are appended hereto and forms part of this Annual Report.

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.

While the following five Standing Committees with a defined mandate given to them are permanent in nature, various Non- standing Committees are constituted for dealing with specific assignments, therefore their term automatically lapses after the assignment in question is completed are as under:

1. Audit Committee

2. Committee of Directors

3. Remuneration Committee

4. Shareholders''/ Investors'' Grievance Committee

5. Share Transfer Committee

During the year under review meetings of these Committees were held periodically wherein certain important decisions in accordance with their respective mandates were taken which were thereafter ratified by the Board.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to 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 under review the applicable accounting standards read with the requirements set out in Companies Act, 1956/ 2013 have been followed

- 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 under review 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.

AUDITORS

M/s. Suresh C. Mathur & Co. Chartered Accountants are proposed to be appointed as Auditors of the Company for the Financial Year 2013-14. The Company has also received the necessary certificate pursuant to Section 224(1B) of the Companies Act, 1956.

Accordingly approval of the shareholders to the appointment of M/s Suresh C. Mathur & Co, Chartered Accountants as Auditors of the Company is being sought at the ensuing Annual General Meeting.

AUDITORS'' REPORT AND OBSERVATIONS

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

Auditor''s Observations and Management response to Auditor''s Observations are given in the Annexure-I forming part of this Report.

COST AUDITORS

In accordance with the directions issued by Cost Audit Branch, Government of India vide an Order no. F.No.52/26/ CAB-2010 dated 03.05.2011 pursuant to Section 233B of the Companies Act, 1956, your Directors have appointed Mr. V. V. Deodhar, a practicing Cost Accountant as a Cost Auditor to conduct the Cost Audit of "Steel Pipe Products" for the Financial Year 2013-14.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed by subsection (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-II forming part of this Report.

PARTICULARS OF EMPLOYEES

In compliance of Section 219(1)(b)(iv) of Companies Act, 1956 this report is being sent to the shareholders of the Company without containing therein the information in accordance with Sub-section 2A of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975. However, any member interested in obtaining such particulars may write to the "Director & Company Secretary" of the Company at its Registered Office.

ACKNOWLEDGEMENTS

Your Directors place on record its appreciation for the assistance and support received from the lenders, Government authorities, customers and vendors and look forward to their continued co-operation.

Your Directors also thank 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: 14th February, 2014

---

Mar 31, 2012

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.

FINANCIAL RESULTS

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

Profit before depreciation and finance cost is 432.60 413.29

After deducting depreciation and

finance cost of 362.94 308.63

The profit for the year before Taxation

Provisions is 69.66 104.66

From which is deducted Taxation

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 follows :-

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 year.

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.

SUBSIDIARY COMPANIES

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 per annum.

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 maximum.

This important development will enable your subsidiary to serve the needs of the rapidly increasing water pipeline sector in the region.

APPROPRIATIONS DIVIDEND

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.

DIRECTORATE

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 his tenure.

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.

STATUTORY COMPLIANCES

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 shareholders.

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 Report.

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 correctly.

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.

CORPORATE GOVERNANCE

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.

BOARD COMMITTEES

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.

AUDITORS

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.

AUDITORS' REPORT

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.

COST AUDITORS

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 Government.

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 Report.

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.

ACKNOWLEDGEMENTS

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

PSL Limited

Sd/- Sd/-

Place : Mumbai (ALOK PUNJ) (ASHOK PUNJ)

Date : 1st August, 2012 Director Managing Director

---

Mar 31, 2011

The Members of

PSL Limited

The Directors have pleasure in presenting this Annual Report of the Company together with the Audited Statements of Accounts for the Financial Year ended on 31st March 2011.

FINANCIAL PERFORMANCE

The summary of the Company's Financial Results on Stand alone basis for the year ended on 31st March, 2011 and appropriation of divisible profits is given below :-

(Rs. in Crores)

Particulars Current Year Previous Year

Sales 2578.67 2761.52

Other Income 91.22 49.13

Total Income 2669.89 2810.65

Add/Less : Change in Stock -659.31 -29.58

Total 2010.58 2781.07

Net Profit before depreciation and interest was 362.95 292.63

After deducting interest and depreciation of 258.24 175.33

The profit for the year before Taxation Provisions amounted to 104.71 117.30

From which is deducted a Taxation Provision of 29.00 29.00

Leaving thereby a Net Profit of 75.71 88.30

Which your directors have recommended to be appropriated as follows :-

a) Transfer to General 7.57 8.83 Reserves

b) Dividend Payment

(i) Interim 10.66 NIL

Add : Tax 1.77 12.43 NIL NIL

(ii) Final (Proposed) 10.67 21.32

Add : Tax (Proposed) 1.73 12.40 24.83 3.54 24.86 24.86

c) Prior year payments 1.63 34.03 2.85 36.54

Thereby leaving a balance of for carrying over to next year's account 41.68 51.76

PERFORMANCE HIGHLIGHTS

1. During the Year Under Review

Your Directors are happy to report that while the Indian economy was still trying to come out from the adverse effects of recessionary trends, which affected the whole world in turn affecting the top line of many of the Indian Companies, your Company's Total Income stood at Rs.2669.89 Crores, which almost equalled the Company's income in the previous year. Moreover, in spite of absence of any growth in the turnover, Net Profit before Depreciation and Interest registered an impressive growth of 24%. However, consequent upon the charge of higher depreciation to Profit & Loss Account due to wider Capital goods base, the Net Profit before Tax did decrease marginally from Rs. 117.30 Crores in the previous year to Rs. 104.71 Crores during the year under review.

2. For the Year Under Review

a) As a direct result of decline of Profit before Tax during the year, the General Reserve Account is proposed to be credited with Rs. 7.57 Crores, which is lesser than the amount of credit accorded in the previous Financial Year.

b) Due to similar reason as above, the Credit Balance of Profit & Loss Account proposed to be carried to Balance Sheet is Rs. 41.68 Crores, which is lesser than similar balance credited in the previous year.

c) Keeping in view the interest of the investors of the Company and to abide by Long Term Dividend Policy of the Company, in addition to an Interim Dividend of Rs. 2.00 per share already paid by the Company in March 2011, the Board has recommended further payment of Rs. 2.00 per share as Final Dividend also. If the members approve the said recommendation in the forthcoming Annual General Meeting, the aggregate dividend for the Financial Year 2010-11 would be Rs. 4.00 per share working out to a 40% Dividend Payout Ratio.

CONSOLIDATED FINANCIAL STATEMENTS

As stipulated by Clause 32 of the Listing Agreement executed by the Company with the Stock Exchanges, the consolidated financial statements have been prepared by the Company in accordance with the applicable accounting standards issued by the Institute of Chartered Accountants of India. The Audited Consolidated Financial Statements together with Auditors' Report form part of this Annual Report.

As is evident from the aforesaid Audited Consolidated Financial Statements, the Consolidated Turnover of the Company was recorded at Rs. 3222.29 Crores, which was 19% lower than that recorded in the previous year. While your Directors are concerned about such reduction in the Consolidated Turnover, the situation could not be helped as both US & UAE economies where Company's International Operations are located, continued to suffer from the after effects of unprecedented global recession in general and the adverse impact of US Government's Oil Policy after the major oil leak in Gulf of Mexico in particular.

OPERATIONAL ACHIEVEMENTS

The Company has, over the course of the Financial Year, achieved a number of milestones in spite of facing a difficult and complex business and operating environment.

STATUS OF DOMESTIC FRONT

Several delays in implementation and expansion of the natural gas grid coupled with deteriorating macro-sector business conditions in terms of raw material, inflation and interest rate enhancement, have adversely impacted Indian businesses operating within the pipeline sector.

(Your Company has seized the opportunity to position itself competitively vis-a-vis these developments by initiating the process of related diversification within the pipeline field, thereby yielding the prospect of considerable synergies in the years to come.)

Despite these difficulties, your Company has managed to complete a host of projects on time and within budget. It has also had the privilege to be part of the growth story in terms of the country's water sector developments. The brief list of Oil and Gas and Water projects successfully completed during the course of the year under review is produced here under :

Major Projects executed in the Financial Year 2010-11

Sr. Particulars Agreegate Value

No. (Rs. in Crores)

1. GAIL's Dahej-Vijaipur Pipeline Project 624

2. GAIL's Bawana Nangal Pipeline Project 169

3. Saipem Jetty Project Sohar Port 109

4. GAIL's Kochi-Koottanad-Bangalore-Mangalore 31 Pipeline Project

5. BWSSB Project - Water 130

6. L & T No. 24 Gujarat 74

7. Hogennakkal - IVRCL / Nagarjuna 64

8. IOCL's Integrated Offshore Crude Handling 33 Facilities at Paradip

Total 1234

In this 25th year of operation, your Company stands as an example of progress in the field of nation building and infrastructure development.

PROGRESS ON OVERSEAS FRONT

a) North America Project

Upon successful completion of its maiden order within the continental United States, as indicated in last year's Annual Report, PSL North America LLC has commenced efforts to enhance its reach within the North American gas pipeline markets and also the water and structural pipe segments of the North American market. In spite of adverse business condition coupled with a depressed natural gas price environment, PSL North America has successfully secured and executed several smaller pipeline projects and is well positioned, at the time of this report, for securing two major gas pipeline projects where its bids have been evaluated and found competitive.

PSL North America's quality record has been appreciated in view of the fact that 'zero' failures have occurred under field hydro-testing conditions of its supplied pipes. This is despite an extremely stringent quality assurance and testing procedure imposed on United States pipeline projects by PHMSA (Pipeline and Hazardous Materials Safety Administration).

Prospects of an improvement in the natural gas pipeline industry segment within the North American market are bright because of the new development 'Shale Gas' discoveries. This newly developing component of the natural gas industry is likely to provide a growth impetus to pipe manufacturers within the continental USA.

B) UAE Project

Your Company's associate in the UAE – PSL FZE has seen a veritable turnaround in market prospects in the Middle East over the past year, culminating in securing its single largest order from the Saudi Saline Water Commission for high grade steel pipe amounting to approximately US$ 80 Million in value. To cater to this enhanced demand, the Company has decided to enhance its capacity and prepare to meet related demands from Middle East and North African clients in the coming years.

The Company is active in providing anti-corrosion and negative buoyancy services to the offshore pipe industry in the gulf which has seen a strong revival with both gas and oil offshore construction being stimulated by prevailing higher crude oil prices.

APPROPRIATIONS

Dividend

Adhering to its earlier practice, your Company declared an interim dividend of Rs. 2.00 per Equity Share in February, 2011. Taking into account the financial results for the year under review, your Directors are pleased to recommend a final dividend of Rs. 2.00/- per equity share of Rs. 10/- each on all fully paid up equity shares in addition to the Interim Dividend of Rs. 2.00 per share paid earlier. Thus the total dividend for the Financial Year 2010-11 would work out to Rs. 4.00/- per equity share. With this your Company would complete sixteenth successive year of payment of dividend ever since its Public Issue in February, 1995

Transfer to Reserves

The Board has recommended a transfer of Rs. 7.57 Crores to the general reserve as a result of which the accumulated reserves as on 31st March, 2011 would amount to Rs. 65.14 Crores. Similarly after retaining Rs. 41.68 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 is Rs. 339.27 Crores.

ANNUAL ACCOUNTS OF SUBSIDIARY COMPANIES

As the Government of India, Ministry of Corporate Affairs has vide its General circular no. 2/2011 dated 8th February, 2011 has exempted Companies having subsidiaries from attaching certain financial documents pertaining to such subsidiaries with the Balance Sheet of the holding Company subject to compliance of few prescribed conditions. Your Company, keeping in view the eco-friendly measure, has decided to comply with said circular. Accordingly, your board of directors had in its meeting held on 24th June, 2011 passed a Resolution giving its consent for not attaching Balance Sheet of various subsidiaries of the Company. However, the consolidated financial statement of holding Company and all subsidiaries prepared in strict compliance with applicable accounting standards duly audited by its Statutory Auditors are presented in this Annual Report. Further, the consolidated statement giving therein the prescribed information for each subsidiary has also been included in this Annual Report.

The Company will also make available the Annual Accounts of the Subsidiary companies and the related detailed information 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 at the Registered Office of the Company and at the Corporate Office of the respective subsidiary companies.

DIRECTORATE

In terms of provisions of Section 256 of Companies Act, 1956 Shri M. M. Mathur, Shri Alok Punj, Shri Prakash Vinayak Apte, Shri N.C. Sharma, and Shri Ashok Sharma, Directors shall retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting. In Compliance of Clause 49 (IV) (G ) of the Listing Agreement a brief resume of the said Directors is annexed to the notice to enable members to consider their re-appointment.

Shri G.S. Sauhta, a Whole Time Director of the Company after having put in a dedicated service of more than 38 years/ 24 years with the Group/ Company, has submitted his resignation effective 31st August, 2011. The Board while accepting his resignation has recorded its deep appreciation for the valuable service rendered by Shri G.S. Sauhta during the long tenure that Shri Sauhta was associated for.

STATUTORY COMPLIANCES

1. The Company Secretary as Compliance Officer 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 shareholders.

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 the Annual Report and Accounts.

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 accordance with statutory obligation, Secretarial 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 is well aware of the advantages of an effective Control System in the Company. Accordingly, a separate Internal Audit Department headed by a Senior Person, who is a qualified Cost Accountant, has been set up. This Department carryout the Internal Audit of Accounts of different branches and critically analyse the same after which a Consolidated Internal Audit Report is placed before the Audit Committee in its every quarterly meeting for detailed deliberations on the same.

The team of Statutory Auditors being an External Body achieves adequate effectivity of its extensive Audit due to support of the Company's Internal Audit Department. Both Statutory as well as Internal Auditor 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 executed effectively with an overall objective that the Company's assets are safe guarded and protected against losses from unauthorized use or disposal.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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. As required by Clause 49 of the Listing Agreement executed by your Company with National and Bombay Stock Exchanges, a report on Corporate Governance, a separate Management Discussion and Analysis

Report and Auditors' Certificate regarding compliance of conditions of Corporate Governance forms part of this Annual Report.

BOARD COMMITTEES

Since over the years the activities of the Company have increased manifold, various important decisions are required to be taken at short notices. As convening of regular meetings of Board comprising of eminent individuals located not only in different cities of the country but even abroad becomes costly and time consuming, the Board in its wisdom discharges many of its statutory and administrative responsibilities through Standing and Non-standing Committees constituted from time to time.

While the following five Standing Committees with a defined mandate given to them are permanent in nature, various Non- standing Committees are constituted for dealing with specific assignments. Therefore their term automatically lapses after the assignment in question is completed :-

1. Audit Committee

2. Committee of Directors

3. Remuneration Committee

4. Shareholders'/ Investors' Grievance Committee

5. Share Transfer Committee

Meetings of these Committees were held periodically wherein certain important decisions in accordance with their respective mandates were taken which were thereafter ratified by the Board.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to 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 under review the applicable accounting standards were followed

- 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 under review 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.

AUDITORS

M/s. Suresh C. Mathur & Co., Chartered Accountants, Auditors of the Company retire at the ensuing Annual General Meeting. They have offered themselves for re-appointment for which they are eligible. The Company has received a Certificate from the retiring Auditors to the effect that the appointment, if made will be in accordance with the limit specified in Section 224 (1B) of the Companies Act, 1956.

AUDITORS' REPORT

The notes to the accounts referred to in Auditors' Report are self-explanatory and therefore do not call for any further comments.

COST AUDITORS

In pursuance of Section 233B of the Companies Act, 1956 and an Order no. F.No.52/26/CAB-2010 dated 03.05.2011 issued by Cost Audit Branch, Ministry of Corporate Affairs; your Directors have appointed Mr. V.V. Deodhar, a practicing Cost Accountant as a Cost Auditor to conduct the Cost Audit of "Steel Pipe Products" for the financial year 2011-12. The said appointment has been approved by the Central Government.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed by 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 Report.

PARTICULARS OF EMPLOYEES

In compliance of Section 219(1)(b)(iv) of Companies Act, 1956 this report is being sent to the shareholders of the Company without containing therein the information in accordance with Sub-section 2A of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975. However, since the said particulars will be made available at the Registered Office of the Company w.e.f 1st September, 2011, the members desirous of obtaining such particulars may write to the "Director & Company Secretary" of the Company at its Registered Office.

ACKNOWLEDGEMENTS

Your Directors express their gratitude to the Company's various Customers across the globe, Suppliers, Government Authorities, Financial Institutions, Foreign Institutional Investors, Bankers, Solicitors, Auditors & Shareholders for their on-going co- operation and support.

Your Directors also place on record their appreciation for the dedication and hard work put in by the PSL Team comprising of Officers and Staff Members at all level which has enabled the Company to surge ahead in these challenging times.

For and on behalf of the Board of Directors

PSL Limited

Sd/- Sd/-

(ALOK PUNJ) (ASHOK PUNJ)

Director Managing Director

Place : Mumbai

Date : 15th July, 2011

---

Mar 31, 2010

The Board of Directors take pleasure in presenting their Twenty Second Annual Report and the Audited Statements of Account for the Financial Year ended on 31st March, 2010.

FINANCIAL PERFORMANCE

The summary of the Financial Results of the Company for the year ended on 31st March, 2010 and appropriation of divisible profits is given below :-



(Rs. in Crores)

Particulars Current Year Previous Year

Sales 2761.52 3487.96

Other Income 49.13 61.99

Total Income 2810.65 3549.95

Add/Less : Change in stock -29.58 -319.17

Total 2781.07 3230.78

Net Profit before depreciation

and interest was 292.63 284.52

After deducting interest and

depreciation of 175.33 157.79

The profit for the year before

Taxation Provisions amounted to 117.30 126.73

from which is deducted a Taxation

Provision of 29.00 40.80

Leaving thereby a Net Profit of 88.30 85.93

Which your directors have

recommended to be

appropriated as follows:

a) Transfer to General Reserves 8.83 10.00

b) Dividend Payment

(i) Interim NIL 10.63

Add: Tax NIL NIL 1.81 12.44

(ii) Final (Proposed) 21.32 10.65

Add:Tax (proposed) 3.54 24.86 24.86 1.81 12.46 34.90 c) Prior year payments 2.85 36.54 -1.92 32.98 Thereby leaving a balance of 51.76 52.95



for carrying over to next years account.





PERFORMANCE HIGHLIGHTS

A) FOR THE COMPANY ON STANDALONE BASIS

1. DURING THE YEAR UNDER REVIEW

The total income of the company during the year stood at Rs. 2810.65 Crores. The net profit before depreciation and interest rose from Rs. 284.52 Crores in the previous year to Rs. 292.63 Crores during the year under review, thereby recording a growth of 2.85%. The year gone by witnessed extreme turbulence and volatility which, coupled with liquidity crunch, has resulted in a decrease in profit (Profit before Tax on 31 st March, 2010 stood at Rs.117.30 Crores as compared to Rs.126.73 Crores for the previous year). Fortunately, despite such decrease, your Company was able to contain its adverse impact partially through improvement in operations and to some extent through exercising a strict control on expenses.

2. FOR THE YEAR UNDER REVIEW

a) The General Reserves Account is proposed to be credited with an amount of Rs.8.83 Crores.

b) In addition to an Interim Dividend of Rs.2.50 per share paid by the Company in May, 2010, the Board has (subject to your approval at the forthcoming Annual General Meeting) recommended payment of Rs.1.50 per share as final dividend, thereby aggregating to a total dividend of Rs.4/- per share for the financial year 2009-10.

B) FOR THE SUBSIDIARY COMPANIES

Members are aware that during the last few years, your Company, after achievement of an important milestone of being the first and only Indian Company of having an installed capacity of more than One Million Metric Tonnes, has taken a bold initiative of spreading its wings across the borders. To bag sizeable proportion of Pipe making orders arising in Middle East, a Plant having an annual capacity of 75000 Tonnes was set up in Hamriyah Free Trade Zone of Sharjah. Not satisfied with merely gulf business, your Board of Directors took another bold decision - this time with a view to bag Pipe Manufacturing Business emanating in North America - a State-of-the-art Two Step Pipe Mill was therefore installed to manufacture Pipes up to as much as 24 Meters length as against the traditional 20 Meters length till then manufactured by your Company in its Indian Plants. As a direct result of such rapid international expansion, your Company now has following Subsidiaries :-

1. PSL Corrosion Control Services Limited, India - a Wholly Owned Subsidiary Company.

2. Pipeline Systems Limited, Mauritius - a Wholly Owned Subsidiary Company.

3. PSL USA INC, USA - a Wholly Owned Subsidiary Company.

4. PSL FZE, Sharjah, UAE - a Wholly Owned Subsidiary of Pipeline Systems Limited.

5. PSL North America LLC, USA - a Joint Venture Company with majority stake of PSL USA INC.

The performance of each individual Wholly Owned Subsidiary Company is as follows:-

1. PSL CORROSION CONTROL SERVICES LIMITED

This Company is presently engaged in providing Anti- Corrosive treatment on Steel Bars supplied by its valued customers engaged in infrastructural activities. Such Coating treatment directly enhances the strength and life of the Rebars - so very essential for various important construction projects, particularly in costal areas. Such services are provided through its two strategically located plants at Daman & Chennai, to be able to cater to both Western and Eastern parts of the country, respectively. The Companys income, which was Rs.40.44 Crores in the previous year, got enhanced to Rs.48.68 Crores in the year under review thereby registering 20.38 % growth. The profit after tax during the said year however shot up by as much as 68%. (Previous year Rs.6.14 Crores and Current year Rs.10.32 Crores).

2. PIPELINE SYSTEMS LIMITED [with PSL FZE -UAE]

This Company was incorporated on 4th November, 2004 at Mauritius as a wholly owned subsidiary of your Company. Subsequently, another Company namely PSL FZE was established at Sharjah in UAE as a wholly owned subsidiary of Pipeline Systems Limited. The Company through its subsidiary has set up a manufacturing Unit in Hamriyah Free Trade Zone, Sharjah, UAE which is primarily engaged in manufacturing of Steel Pipes and providing Anti- Corrosive Coating on them. The first major order bagged by the company was for a total value of US$ 45 Million.

During the year under review, the company has scaled new heights and set new benchmarks in terms of income and profit. The total consolidated income of the Company which was US$ 8.42 Million in the previous year, stood at US$ 33.80 Million in the year under review, thereby recording an impressive growth of 301%. The net profit was registered at US $ 22,76,659 as against US $ 3,90,462 in the previous year thereby registering an exceptionally high growth of 483%.

During the year under review, your Company contributed an additional amount of US$ 20.14 Lacs to the Equity Capital of the said Company both by way of cash remittances as well as by equipment supplies. Thus, the aggregate amount of investments made by your Company in the said Company amounted to US$ 264.75 Lacs as on 31st March, 2010, being the last day of the Financial Year 2009-10.

3. PSL USA INC. (with PSL NORTH AMERICA LLC)

PSL USA INC was incorporated on 4th December, 2006 in the State of Delaware, USA primarily to bag contracts for manufacture of pipes, keeping in view the upsurge in the pipe laying activity, in North America. In order to carry out the activities of PSL Limited, PSL USA INC entered in a joint venture namely PSL North America LLC, a company incorporated under the laws of State of Delaware. The said joint venture is between three companies namely, PSL USA INC (78% shareholding), HSAW Solutions LLC (12% shareholding )and Lloyd Systems INC (10% shareholding).

A plant using state of the art technology to manufacture 24 meter long pipes has been set up by the Company in Mississipi, USA. The Company bagged its first order from Florida Gas Company valuing US$ 418 Million. The commercial dispatches for the same started in May, 2009. Since this year was the first year of production, the consolidated sales of the Company and its subsidiary stood at US$ 217 Million in the year under review as against nil in the previous year. The net income of US $ 1.55 Million was registered in the year under review, compared to net income of US$ 0.13 Million in the previous year.

C) CONSOLIDATED PERFORMANCE

In spite of the effects of unprecedented global recession in US (where PSL has established an important Unit) and the Middle East (where another Pipe Coating Unit was set up few years ago), the performance of the Foreign Subsidiaries / Units was indeed gratifying, resulting into a noteworthy Consolidated Sales of Rs.3,941.05 Crores as against Rs.3,559.92 Crores in the previous year thereby representing an impressive 11% hike. Effective cost control methodologies strictly implemented in the entire Group, further showed commendable results since the Profit after Tax recorded at Rs.122.66 Crores was 29% higher than Rs.94.84 Crores in the previous year.

CAPITAL ENHANCEMENT

1. FCCB BUYBACK

Your company in the year 2005 raised US$ 40 Million by issuance of Zero Coupon Foreign Currency Convertible Bonds (FCCBs) in the international market. The said convertible Bonds, which are listed on Singapore Stock Exchange, can at any time before August, 2010 be converted into Companys Equity Shares at a prefixed conversion rate. Out of a total of 40 Million US Dollars worth FCCBs, the Company received conversion notices from holders of FCCBs, in different tranches, aggregating to US$ 37.50 Million. Consequently 86,61,511 Equity Shares of Rs.10/- each were allotted by the Company to the relevant FCCB holders. As on 30th July, 2010 Bonds worth US $ 2.50 Million are pending for conversion. As per the offering circular dated 1s September, 2005, the bonds pending

conversion, will be redeemed on the maturity date i.e. 7th September, 2010.

2. QUALIFIED INSTITUTIONAL PLACEMENT

As the pipeline business is growing due to increased demand from oil and gas sector and other sectors, your Directors felt it necessary to enhance your Companys production capacity. A strategic approach was therefore adopted to not only enhance the capacity of domestic plants but also invest in Companys overseas subsidiaries. To be able to successfully finance the expansion initiatives detailed above, your company issued 107,50,000 Equity Shares of Rs. 10/- each at a premium of Rs. 128.90 per share to Qualified Institutional Buyers (QIBs) in accordance with Qualified Institutional Placement (QIP) Guidelines issued by SEBI. Such allotment helped the company to raise Rs. 149.32 Crores in August, 2009.

OPERATIONAL ACHIEVEMENTS

Your Company has been a leader in pipe technology in India since inception and this fact has been reinforced by your Companys performances in the current period in executing the first ever API 5L X-80 (highest grade pipeline steel) project, aggregating approximately 150,000 MT, all of which will be commissioned in the current calendar year by the customer.

At this time, this will become one of the few X-80 Grade Pipelines, anywhere in the world, put into operation.

It is a matter of great pride that the entire supply of X-80 pipe for this project was entrusted to PSL and with the commissioning of the pipeline later this year, it shall become a feather in your Companys cap which confirms its status both as a leader in pipe technology and as an international leader in line pipe supply and development.

A measure of the customers appreciation for this performance lies in repeat orders which have been flowing from the same customsers to PSL, reflecting a confidence he has in your Companys ability to meet such technological challenges.

1. PROGRESS ON OVERSEAS FRONT

a) NORTH AMERICA PROJECT

Your Companys subsidiary in the U.S. "M/s. PSL NORTH AMERICA LLC" has achieved a unique milestone in its very first year of operation by successfully executing a major U.S. pipeline project entrusted, by it in 2008. The project required the procurement of steel and manufacture of pipes aggregating approximately 160,000 MT of High Pressure Gas Pipe. Your Companys ability to execute the project within the requisite time frame will be an inspiration for customers in the U.S., to entrust it with further project work.

The complete set of equipment for pipe manufacture, external and internal coating has been installed, commissioned, and successfully operated, making PSL NORTH AMERICA LLC, a lead supplier of line pipe to the U.S. and Canadian markets.

b) UAE PROJECT

Despite the substantial slow down in the Middle East market, in general, your Companys Sharjah based subsidiary - PSL FZE was successful in securing a major Port Construction project, from a Multinational Construction Company and is in the process of completing, again within the requisite schedule, supply of high thickness (25.4 mm) piling pipe whoses capability is a benchmark of your Company, as very few Spiral Pipe manufacturers

have the ability to achieve production of this thickness in a higher steel grade.

The Company is participating in several tenders in the region and expects to have a busy and successful year ending March, 2011.

Your Company is evaluating, based on strong local demand, the possibility of doubling its capacity from the present installed 75,000 MT per annum to 150,000 MT per annum within the current Financial Year.

2. DOMESTIC PROGRESS

Your Company is the only one among its peer group, to have multiple geographically diverse manufacturing locations which enables it to compete successfully on a regional basis. These regional locations are all enabled, duly certified by agencies such as API to execute High Pressure Gas Pipe projects as and when required.

Your Board gets great pleasure to report that the first major gas pipe supply order is likely to be awarded to the Companys Chennai unit in the near future.

The major expansion undertaken by your Company in the year under reporting was to add a capacity of 300,000 MT per annum at its unit at Vishakhapatnam, thereby bringing the total capacity to 375,000 MT per annum. This enhanced capacity is likely to be fully engaged in executing projects for transportation of KG Basin Gas from Kakinada, the landfall point for such gas, which is in close proximity to the Companys Vishakhapatnam pipe manufacturing unit. This strategic advantage of Vishakhapatnam will extend to several projects in the region such as :

Kakinada - Haldia Pipeline

Kakinada - Chennai Pipeline

Kakinada - Bangalore Pipeline

Haldia - Jagdishpur Pipeline.

In view of the likely implementation of the Natural Gas Grid in the coming 3 to 5 years, your Company expects to fully engage its capacities, which have been put in place, essentially to service these regional requirements.

APPROPRIATIONS

DIVIDEND

Adhering to its earlier practice, your Company declared an Interim Dividend of Rs.2.50 per Equity Share in May, 2010. Taking into account the financial results of the year under review, your Directors have recommended a Final Dividend of Rs.1.50 per Equity Share (subject to your approval at the forthcoming Annual General Meeting) on all eligible fully paid up Equity Shares in addition to the Interim Dividend of Rs.2.50 per share paid earlier. Thus, the total dividend for the Financial Year 2009-10 would work out to Rs. 4.00 per Equity Share. With this your Company would complete its fifteenth year of successive payment of dividend ever since its maiden Public Issue in February, 1995.

TRANSFER TO RESERVES

The Board has recommended a transfer of Rs. 8.83 Crores to the general reserve, out of the amount available for appropriations and an amount of Rs. 51.76 Crores is recommended to be retained in the Profit and Loss Account.

ACCOUNTS OF THE SUBSIDIARY COMPANIES

In compliance of Section 212 of the Companies Act, 1956, the duly audited annual accounts of PSL Corrosion Control Services Limited, Pipeline Systems Limited and PSL USA INC - the three Wholly Owned Subsidiary Companies of the Company - for the

Financial Year ended on 31 st March, 2010 are attached. As required under the Listing Agreement executed with the Stock Exchanges, a consolidated financial statement of the Company is attached hereto.

DIRECTORATE

Your Board is pained to report that Companys Chairman Shri Y. P. Punj left for his heavenly abode on 12th December 2009, leaving behind a legacy of a team of highly motivated and well experienced army of officers and workers to take your Company forward.

The Board comprises of excellent professionals having expertise in varied fields and hence is fully competent to steer the Company towards achievement of its high valued goals in an optimum manner.

In accordance with the provisions of Section 255 and 256 oi the Companies Act, 1956, and Articles of Association of the Company, Shri S. P. Bhatia, Shri C. K. Goel, Shri. G Gehani, Shri Paresh J. Shah and Shri Harsh Pateria, Directors retire by rotation at the ensuing Annual General Meeting of the Company and being eligible offer themselves for reappointment. Brief resume of the Directors proposed to be reappointed and nature of their expertise in specific functional area are also included in the table annexed to the notice.

STATUTORY COMPLIANCES

1. The Company Secretary as Compliance Officer ensures timely compliance of SEBI regulations, applicable laws, rules and regulations and provisions of Listing Agreement. He also responds to different types of grievances and queries including the ones related to dividend of shareholders.

2 Although the provision contained in Section 219 of the Companies Act, 1956, permits the Company to send an abridged version of Companys Balance Sheet and Profit & Loss Account etc., your Company in order to comply with Clause 32 of the Listing Agreement executed by it with different Stock Exchanges is sending herewith the full version of the aforesaid statements along with various documents which are required to be attached with them, to all the Shareholders of the Company.

3. In compliance of Clause 32 of the Listing Agreement executed by the Company with different Stock Exchanges, the Cash Flow Statement in the format prescribed by SEBI is annexed to this report.

4. 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 the Annual Report and Accounts.

5. In compliance of Clause 49 (VI) (ii) of the Listing Agreement, Quarterly Compliance Report in the prescribed format is regularly sent to Stock Exchanges.

6. In accordance with statutory obligations, Secretarial 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 shares in physical form with 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 Companys shares are listed.

INTERNAL CONTROL AND ADEQUACY

The company has a proper and adequate system of internal control to ensure that all assets are safeguarded and protected against losses

from unauthorized use or disposition, and transactions are authorised, recorded and reported correctly. The internal control is designed to ensure that financial and other records are reliable, for timely preparation of Financial Statements.

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 improvements for strengthening them. Proper reviews • are carried out to ensure follow-up on the audit observations.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required by Clause 49 of the Listing Agreement executed by the Company with National and Bombay Stock Exchanges, a separate Management Discussion and Analysis Report, Corporate Governance Report and Auditors Certificate certifying compliance of conditions of Corporate Governance are made part of the Annual Report.

BOARD COMMITTEES

For assisting Board of Directors in discharging its responsibilities in various fields effectively and efficiently following five standing Committees 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

These Committees in their meetings, held during the year, take certain decision in accordance with their respective mandates. All such decisions are thereafter ratified by the Board.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors to the best of their knowledge and belief confirm that:

In the preparation of annual accounts, the applicable accounting standards have been followed by the Company;

The accounting policies in consultation with statutory auditor 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.

Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and;

The Annual Accounts have been prepared on a going concern basis.

AUDITORS

The Auditors, M/s. Suresh C. Mathur & Co., Chartered Accountants hold office upto the conclusion of the ensuing Annual General Meeting. The Company has received a requisite certificate from them pursuant to Section 224 (1 B) of the Companies Act , 1956 confirming their eligibility for re-appointment as Auditors of the Company.



AUDITORS REPORT



The Report of the Auditors on the Annual Accounts of the Company forms part of the Annual Report and is self-explanatory.

CONSERVATION OF ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information relating to Conservation of Energy, Technology Absorption, Research and Development and Exports and Foreign Exchange Earnings and outgo and other information in terms of Section 217(1 Me) of the Companies Act, 1956 and rules made there under is given in the Annexure forming part of this Report.

PARTICULARS OF EMPLOYEES

In compliance of Section 219(1 )(b)(iv) of Companies Act, 1956 this report is being sent to the shareholders of the Company without containing therein the information in accordance with Sub-section 2A of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975. However, since the said particulars are made available at the Registered Office of the Company, the members desirous of obtaining such particulars may write to the "Director & Company Secretary" of the Company at its Registered Office.

ACKNOWLEDGEMENTS

Board expresses its gratitude to the Customers, Suppliers, Dealers, Government Authorities, Financial Institutions, Foreign Institutional Investors, Bankers, Consultants, Solicitors, Auditors & Shareholders for their continued co- operation and support during the year under review. The Board further wishes to place on record their deep sense of appreciation for the committed services and contributions made by the employees of PSL Family based at various Domestic and International locations towards the growth of the Company.





For and on behalf of the Board of Directors PSL Limited



sd/- sd/-

Place : Mumbai (ALOK PUNJ) (ASHOK PUNJ)

Date : 30th July, 2010 Director Managing Director