psl ltd Directors report

To,

The Members of PSL LIMITED

The Liquidator hereby presents this Thirty Second (32nd) Annual Report along with Audited Statements of Accounts of the Company for the Financial Year 2019-20.

Financial Performance:

The financial performance of the Company for the financial year ended on 31stMarch, 2020 is summarized below:

(Rs. in Crore)

Particulars	Standalone		Consolidated
	31/03/2020	31/03/2019	31/03/2020	31/03/2019
Revenue from operations	69.93	80.12	225.09	215.93
Other Income	772	12.11	8.49	12.76
Total Income	77.65	92.23	233.58	228.69
Profit/(Loss) Before	(13.99)	(1.29)	6.60	11.23
Depreciation,
Finance Cost,
Exceptional items,
Extraordinary items & Tax
Less: Depreciation and	82.83	96.79	140.49	180.70
Less: Exceptional items
Less: Extraordinary Items
Profit/(Loss) Before Taxation Provisions	(96.82)	(98.08)	(133.89)	(169.47)
Less: Current Tax	-	-	3.40	2.08
Less : Deferred Tax	-	-	0.0051	(0.0036)
Profit / (Loss) After Tax	(96.82)	(98.08)	(13729)	(171.56)
Balance Carried to	(96.82)	(98.08)	(13729)	(171.56)
Balance Sheet

Consolidated Financial Statements:

The Consolidated Financial Statements of your Company for the financial year 2019-20 are prepared in compliance with applicable provisions of the Companies Act, 2013 read with the Rules issued there under, applicable Accounting Standards and the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the "Listing Regulations"). These statements have been prepared on the basis of audited financial statements of your Company and of, its subsidiaries as approved by their respective Board of Directors.

Dividend:

As the Financial Year under review witness losses no dividend could be considered for distribution to the members.

Transfer to Reserves:

Consequent upon company having suffered losses during the year under review, no amount was transferred to general

reserve account of the company.

Development regarding Corporate Insolvency Resolution Process(CIRP) culminating into initiation Of companys Liquidation

Members may recall that they were well informed about various developments pertaining to Corporate Insolvency Resolution Process(CIRP) formally commenced on 15th February, 2019, after passing of an order to that effect by Ahmedabad Bench of NCLT on companys application filed with it earlier.

Since no Resolution Plan could succeed the said Honble Bench of NCLT while disposing of an application filed by Resolution Professional in compliance of a decision of Committee of Creditors has vide its order dated 11th September, 2020 order for liquidation of the Company as a going concern.

To carry out the liquidation process of the company Honble NCLT has appointed Mr. Nitin Jain as Liquidator.

Business Performance:

Although CIRP has commenced on 15th February, 2019 i.e. in the preceding Financial Year 2019-20 itself, your company took a cautious decision of continuing its manufacturing operations to the maximum possible extent. Such continued operation served many purposes such as ensuring smooth functioning of companys valuable plant and machinery, generating of employment for competent technical workforce at the plant level and meeting fixed cost of the company from the profit so generated even by limited operations.

As a direct result of sustained effort put in by companys senior management the total income which was Rs.92 Crores in previous Financial Year ended on 31st March, 2019 got marginally reduced to Rs.78 Crores.

The aforesaid sustained efforts of the management also showed reasonably good results as far as companys performance on consolidated basis is concerned. Since the consolidated turnover which was Rs.228 Crores in the preceding Financial Year 2018-19 got enhanced to Rs.234 Crores in the year under review.

Status of OA filed by Creditors against the company in Debt Recovery Tribunal:

Members may note that prior to the admission of Companys reference by Honble NCLT various secured creditors of the company through M/s Edelweiss Assets Reconstruction Co. Ltd. filed an OA before the Debt Recovery Tribunal in New Delhi with an objective of procuring a recovery order from the said Court for the different amounts payable by the company to different secured creditors. Similarly another creditor of the company namely Indian Bank has also filed an OA before the Debt Recovery Tribunal (DRT) for recovery of its debt. While after the said filing of two OAs, regular hearings in the DRT Court were being held, the company informed the said DRT Court about the admission of companys application under Section 10 of Insolvency and Bankruptcy Code by Ahmedabad bench of NCLT. As a direct result of commencement of

moratorium period both the aforesaid proceedings in the DRT Court against the company have been stayed. However, both the matter will proceed against the other defendants. Now since the Company has been ordered to be liquidated, the said moratorium has ceased to operate. The above stated OAs are currently pending before the DRT, Delhi.

Performance of Subsidiary Companies:

Presently your company has four direct subsidiaries and one step down subsidiary, two of the direct four subsidiary namely PSL Gas Distribution Pvt. Ltd. and PSL Infrastructure and Ports Pvt. Ltd. have not been in an active operation and therefore, no revenue was generated in them. The other two subsidiary namely PSL Corrosion Control Services Ltd., and Pipelines Systems Ltd. including step down subsidiary PSL FZE had performed reasonably well during Financial Year under review. Since the former recorded turnover of Rs. 11914.51 lacs and net profit of 82766 lacs while the latter registered turnover of Rs. 3621.81 lacs and net loss of Rs. 4866.56 lacs.

As a direct result of the moderate performance of the said two subsidiaries the consolidated total income of your company could reach Turnover of Rs. 22509 lacs .

Pursuant to provisions of Section 129(3) of the Companies Act, 2013 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 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.

Directorate:

Your Board comprised of total of 8 Directors which includes 4 Independent Directors. Although consequent upon commencement of CIRP on 15th February, 2019, the powers of the Board got ceased in accordance with the relevant provisions of Insolvency and Bankrupcty Code , 2016 however in order to discharge their statutory responsibilities Directors held total of 5 Board Meeting during the year under review.

Directors Responsibility Statement:

Pursuant to the provisions contained in Section 134(3)( c ) of the Companies Act, 2013 and subject to disclosures in the Annual Accounts, your Directors state as under:

a) While preparing the annual accounts of the financial year ended on March 31,2020, the applicable accounting standards have been followed and there are no material departures.

b) That the Directors have selected appropriate accounting policies in consultation with Statutory Auditors and applied them 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 in accordance with the provisions of the Companies Act, 2013 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) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

f) 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.

Board Diversity:

The Company recognizes and embraces the importance of a diverse Board in its success. We believe that a truly diverse Board will leverage differences in thought, 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:

Consequent upon commencement of CIRP on 15th February, 2019, the powers of the Board got ceased in compliance of relevant provisions of Insolvency and Bankrupcty Code , 2016 , however in order to discharge their statutory responsibilities Directors held total of 5 Board Meeting during the year under review, the details of which are given in the Corporate Governance Report that is annexed to this Report as Annexure - VI.

Declaration by Independent Directors:

Pursuant to provision of section 149(7) of the companies Act, 2013 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 (LoDR) Regulations,2015.

Policy on Directors appointment, remuneration and other details:

Your Company has 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 Companys business.

The remunerations paid to Executive Directors are in accordance with the recommendation of the Nomination & Remuneration Committee as well as by the prescribed law. Due care is also taken to ensure that the remuneration package is consistent with the recommended best practices in the country.

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.

Risk Management:

Your Company has constituted a Risk Management Committee as a measure of good governance, although not mandatory on our Company. The details of the Committee and its terms of reference are set out in the Corporate Governance Report.

Your Company has adopted a Risk Management Policy, pursuant to the provisions of Section 134 of the Act, to identify and evaluate business risks and opportunities for mitigation of the same. This framework seeks to create transparency, minimize adverse impact on business objective and enhance your Companys competitive advantage. The risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting.

Performance Evaluation of the Board:

Since the powers of the Board of Directors have been suspended w.e.f. 15th February, 2019 pursuant to the orders of Honble National Company Law Tribunal (NCLT) dated 15th February, 2019, evaluation of the Board has not taken place.

Internal Control and Adequacy:

Your Company has a proper and adequate system of Internal Control for ensuring the orderly and efficient conduct of its business, including adherence to the Companys 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.

Corporate Governance Report:

The Report on Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.

The requisite certificate from M/s. V Parekh & Associates, Chartered Accountants confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Schedule V is attached to the Report on Corporate Governance.

Management Discussion and Analysis Report:

The Management Discussion and Analysis Report as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms an integral part of this report and gives details of the overall industry structure & development, opportunities & threats, internal controls systems and their adequacy, financial performance with respect to operational performance, etc.

Contracts or Arrangements with related parties under Section 188(1) of the Companies Act, 2013:

With reference to Section 134(3)(h) of the Companies Act, 2013, all contracts and arrangements with related parties under Section 188(1) of the Act, entered by the Company during the financial year, were in the ordinary course of business and on an arms length basis. Further, there were no transactions with related parties which qualify as material transactions under the SEBI Listing Regulations. Thus, disclosure in form AOC- 2 in terms of Section 134 of the Companies Act, 2013 is not required.

The details of the related party transactions as per Accounting Standard 18 are set out in Note 35 to the Standalone Financial Statements forming part of this report.

The Company has also formulated a policy on Related Party Transactions as approved by the Board of Directors which has been uploaded on the website of the Company.

Auditors:

1. Statutory Auditors and Auditors Report

M/s V. Parekh & Associates, Chartered Accountants were appointed as Statutory Auditors of the Company at the Annual General Meeting held on 29th September, 2017 for a continuous period of 5 years commencing from Financial Year 2017-18. So M/s V. Parekh & Associates would continue to act as Statutory Auditors for the Financial Year 2020-21 also.

The notes to the accounts referred to in Auditors Report are self-explanatory and therefore do not call for any further comments by the Board of Directors. Auditors Adverse Observations and Management Response to Auditors Adverse Observations are given in the Annexure-I forming part of this Report.

2. Secretarial Auditor:

A firm of Practising Company Secretary namely ‘AviSangal& Associates" was appointed to undertake the Secretarial Audit of the Company for the year ended March 31,2020 as required under Section 204 of the Companies Act, 2013 read with rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The Secretarial Audit Report for the financial year ended March 31,2020 is annexed herewith which form a part of this Report as Annexure-II.

Particulars of Loans, Guarantees and Investments:

Pursuant to provisions of Section 186 of the Companies Act, 2013 the particulars of Loans, Guarantees and Investments are disclosed in the Financial Statement.

Deposits:

During the year, the Company has not accepted any public deposits under the Companies Act, 2013.

Vigil Mechanism/Whistle Blower Policy:

The Company promotes ethical behavior in all its business activities and in line with the best governance practices, your Company has formulated a system i.e. vigil mechanism/ whistle blower policy through which Directors and employees of the Company and other person dealing with the Company may report to the Chairman of the Audit committee, any instance of unethical behaviour, actual or suspected fraud or violation of the Companys 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:

The extract of Annual Return as on March 31, 2020 in the prescribed Form No. MGT-9, pursuant to Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014 is attached as Annexure - III to this Report.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

Pursuant to provisions of Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 the details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are attached as Annexure - IVto this Report.

Disclosure under Sexual Harassment of Women at the Workplace(Prevention, Prohibition & Redressal) Act, 2013:

In your Company, all employees are of equal value. There is no discrimination between Individuals at any point on the basis of race, colour, gender, religion, social origin, age, etc. Here every individual is expected to treat his/her colleagues with respect and dignity.

In compliance of the Sexual Harassment of Women at Workplace (Prevention, Prohibition &Redressal) Act, 2013 (Act) and Rules made thereunder, your Company has constituted Internal Committees (IC) for different locations of Companys units. No complaint of sexual harassment was reported during the year.

Particulars of Employees:

The information required under Section 197(12) of the Act with 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.

Corporate Social Responsibility:

As unfortunately your Company has been continuously incurring losses during last 5 years the conditions contained in Section 135 of Companies Act, 2013 are no more applicable. Hence, there is no requirement with respect to compliance of the said section 135.

As you are aware our company running in Corporate Insolvency Resolution Process (CIRP) with the help of Resolution Professional (RP) namely Mr. Nitin Jain and with the help of them we are trying to find out investors who can run our unit after taking all the liabilities as against our existing assets.

Acknowledgements:

Your Directors alongwitih Liquidator Professional (LP) place on record gratitude to the Government Authorities, Financial Institutions, Lenders,Banker for the assistance they extended to the Company. Your Directors alongwith LP also wish to place on record their thanks and appreciation for the continuing support and efforts of Consultants, Solicitors, Auditors & Shareholders and look forward to their continued co-operation.

Your Directors alongwith LP would further like to thank the employees at all levels for the dedication and hard work put in to surge ahead in these challenging times.

	Sd/-
	(Nitin Jain)
	Liquidator
Place: Mumbai
Date: 13 November, 2020