Contents - PSL LIMITEDpsllimited.com/myadmin/downloads/thmb_psl0809ar.pdf · Key Financial...

Board of Directors 2PSL’s Existence 3The Growth Paradigm 4Key Financial Parameters 5Notice 6Directors’ Report 21- Corporate Governance Report 26- Management Discussion and Analysis Report 33

Standalone Statements

Auditors’ Report 37Balance Sheet 40Profit & Loss Account 41Schedules 42Cash Flow Statement 54Balance Sheet Abstract 55Statement of Subsidiary Companies u/s 212 of the Companies Act,1956 56

Consolidated Statements

Auditors’ Report 59Balance Sheet 60Profit & Loss Account 61Schedules 62Cash Flow Statement 78

Statements of Subsidiary Companies

PSL Corrosion Control Services Limited’s

Directors’ Report 81Auditors’ Report 84Balance Sheet 86Profit & Loss Account 87Schedules 88Balance Sheet Abstract 96Pipeline Systems Limited’s

Auditors’ Report 99Consolidated Accounts 100PSL USA INC’s

Independent Auditors’ Report 107Consolidated Accounts 108

ContentsContentsContentsContentsContents

PSL-1-5.p65 6/20/2009, 5:00 PM1

BOARD OF DIRECTORS Ashok Punj ------------------ Managing DirectorY. P. PunjAlok PunjM. M. MathurG. S. SauhtaR. K. BahriD. N. SehgalPrakash V. ApteN. C. SharmaAshok SharmaHarry H. ShourieS. P. BhatiaC. K. GoelParesh J. ShahHarsh PateriaG. Gehani ---- Director & Company Secretary

STATUTORY AUDITORS Suresh C. Mathur & Co.Chartered Accountants,New Delhi.

SHARE TRANSFER AGENTS Karvy Computershare Private Limited17 - 24, Vittal Rao Nagar, Madhapur,Hyderabad - 500 081

SUBSIDIARY COMPANIES — PSL Corrosion Control Services LimitedSurvey No. 377/2, Zari Cause Way Road,Kachigam, Daman,Union Territory of Daman & Diu

— Pipeline Systems LimitedC/o IFS, IFS Court, 28 Cybercity,Ebene, Mauritius

— PSL USA INCCorporation Trust Center, 1209, Orange Street,Wilmington, New Castle, 19801,Delaware, USA

PRINCIPAL BANKERS — ICICI Bank Limited— State Bank of India— Bank of Baroda— Standard Chartered Bank— Export Import Bank of India— IDBI Bank Limited— Axis Bank Limited— BNP Paribas— State Bank of Patiala— State Bank of Hyderabad— Indian Overseas Bank— Union Bank of India— ING Vysya Bank Limited— Yes Bank Limited— DBS Bank Limited— Deutsche Bank— Indian Bank— Kotak Mahindra Bank— Development Credit Bank

Board of DirectorsBoard of DirectorsBoard of DirectorsBoard of DirectorsBoard of Directors

PSL-1-5.p65 6/20/2009, 5:00 PM2

REGISTERED OFFICE — Kachigam, Daman,Union Territory of Daman & Diu - 396 210

CORPORATE OFFICE — PSL Towers,615, Makwana Road, Marol, Andheri ( E )Mumbai - 400 059

LEGAL & SECRETARIAL OFFICE — 3rd Floor, ‘Punj House’,M-13 A, Connaught Circus,New Delhi - 110 001.

MARKETING OFFICES

- In Western India — PSL Towers,615, Makwana Road, Marol, Andheri ( E )Mumbai - 400 059

- In Northern India — “PSL HOUSE”B-96, Greater Kailash – I,New Delhi - 110 048.

- In Southern India — Meridian House, 8/2, Montieth Lane,Egmore, Chennai - 600008.

PROJECTS OFFICE — 3rd Floor, ‘Punj House’,M-13 A, Connaught Circus,New Delhi - 110 001.

PLANTS

- National — Survey No. 35, 37, 41, 301/1 and 308/1 & 2,Varsana & Nani Chirai, Anjar & Bhachau, Kutch, Gujarat

— Survey No. 38/1, 38/2, 39, 40 & 42Varsana Anjar, Kutch, Gujarat

— East of N.H -8 A, Kandla Road,Gandhidham, Kutch, Gujarat

— Plot No.4 & 5, Sector 12/B, Kandla Road,Gandhidham, Kutch, Gujarat

— Kachigam, Daman,Union Territory of Daman & Diu - 396210

— No. 22 Vaiyavoor, Maduranthakam TalukKancheepuram Distt., Tamil Nadu

— Survey No. 207, Industrial Development AreaGurrampalem, Pendurthi,Vishakhapatnam, Andhra Pradesh

— Plot 2A, APIIC, Layout Phase-II,Peddapuram - 533437Distt. East Godavari, Andhra Pradesh

— Survery No.124, Khadat,Pilwai, Towards Mahudi RoadTaluka - MansaDistt. Gandhinagar, Gujarat

— Khasra No. 48, 73, 82.Village - GadudaphagiJaipur, Rajasthan

- International (owned by Subsidiary Companies) — 13092, Sea Plane Road, Bay St. Louis,MS 39520 U.S.A.

— Post Box 42131, Inner Harbour,Plot No. HJ 02, Hamriyah Free Zone,Sharjah, UAE

PSLPSLPSLPSLPSL’’’’’s Existences Existences Existences Existences Existence

PSL-1-5.p65 6/20/2009, 5:00 PM3

TTTTThe Growth Phe Growth Phe Growth Phe Growth Phe Growth Paradigmaradigmaradigmaradigmaradigm

Highlights2008 - 09

TurnoverRs. 3549.95 Crs.

(US $ 696.75 Million)

Operating ProfitRs. 284.52 Crs.


Gross ProfitRs. 183.80 Crs.


Profit Before TaxRs. 126.73 Crs.


Profit After TaxRs. 85.93 Crs.


Total AssetsRs. 1261.32 Crs.


2008-092007-08

400000

350000

300000

250000

200000

150000

100000

50000

0

Gradual Growth of Total Income

Rs.

in L

acs

During the Year(s)

* The data for these financial years have been annualised since the said financial yearscomprised of 18 months periods

Consistant Dividend

2008-092007-08

60

50

40

30

20

10

0

During the Year(s)

In P

erce

ntag

e

Operating Profit -10 Years’ Profile

2008-092007-08

30000

25000

20000

15000

10000

5000

0

During the Year(s)

Rs.

in L

acs

PSL-1-5.p65 6/20/2009, 5:00 PM4

Key Financial ParametersKey Financial ParametersKey Financial ParametersKey Financial ParametersKey Financial Parameters

Last Decade at a Glance

(Rs. in Lacs)

PARTICULARS 2008-2009 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2000-01** 1999-2000 1998-99*

Total Income 354995.04 226176.61 168561.37 156338.22 167745.16 92942.05 42516.39 45371.54 26054.06 16103.82

Total Expenditure 326543.53 202855.41 151199.79 141409.34 157765.84 84505.77 36261.96 39665.00 21341.12 12174.88

Operating Profit 28451.51 23321.20 17361.58 14928.90 9979.32 8436.28 6254.43 5706.54 4712.94 3928.94

Interest 10071.93 5785.56 4349.77 4852.93 3242.80 2947.22 2931.39 2104.60 1608.77 1080.60

Gross Profit 18379.58 17535.64 13011.81 10075.97 6736.52 5489.06 3323.04 3601.93 3104.17 2848.34

Depreciation 5706.64 5119.60 4392.29 3385.96 2335.48 1638.86 1601.42 1125.67 1102.62 1246.88

Profit Before Tax 12672.93 12416.04 8619.52 6690.01 4401.04 3850.19 1721.62 2476.26 2001.54 1601.46

Taxation 4080.00 3939.00 2404.00 1771.00 1200.00 1050.00 250.00 411.33 265.00 127.53

Profit After Tax 8592.93 8477.04 6215.52 4919.01 3201.04 2800.19 1471.62 2064.92 1736.54 1473.93

Dividend Rate 50%# 50% 50% 50% 45% 50% 40% 40% 35% 35%

Equity 4258.19 4258.13 3406.07 3195.45 2892.07 2892.02 2892.02 2892.02 2892.02 2892.02

Reserves 58593.49 52298.00 30213.64 23051.50 13866.66 13861.20 13303.66 13144.16 12108.96 11528.25

* Post Merger with PSL International Limited

** The data for this financial year has been annualisedsince the said financial year comprised of 18 months period

# 25% paid as Interim Dividend in February 2009 and 25% is subject to Shareholders’ Approval

PSL-1-5.p65 6/20/2009, 5:00 PM5

621st Annual Report 2008-09

ToThe Members ofPSL LIMITED

Notice is hereby given that Twenty first Annual General Meeting of the Company will be held on Tuesday, the 21st day ofJuly, 2009 at 9.30 A.M. at Hotel ‘Miramar’ at Devka Beach,Nani Daman - 392210, in Union Territory of Daman & Diu, totransact the following business:-

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Balance Sheet of the Company as on 31st March, 2009 and Profit & LossAccount for the year ended on that date and the Reports of Board of Directors and Auditors thereon.

2. To declare the Dividend for the Financial Year 2008-09.

3. To appoint a Director in place of Shri Harry H. Shourie, who retires by rotation and being eligible offers himself forre-appointment.

4. To appoint a Director in place of Shri D.N. Sehgal, who retires by rotation and being eligible offers himself forre-appointment.

5. To appoint a Director in place of Shri G.S. Sauhta, who retires by rotation and being eligible offers himself forre-appointment.

6. To appoint a Director in place of Shri R.K. Bahri, who retires by rotation and being eligible offers himself forre-appointment.

7. To appoint a Director in place of Shri Y.P. Punj, who retires by rotation and being eligible offers himself forre-appointment.

8. To appoint Statutory Auditors for holding the Office from the conclusion of this Annual General Meeting until theconclusion of the next Annual General Meeting and to fix their remuneration and in this connection to consider and ifthought fit to pass with or without modification(s) the following Resolution as an “Ordinary Resolution.”

“RESOLVED THAT M/s. Suresh C. Mathur & Co., Chartered Accountants, having their office at 64, Regal Building,Connaught Place, New Delhi - 110 001 be and are hereby appointed as Auditors of the Company for the Financial Year2009-10 to hold office from the conclusion of this Annual General Meeting until the conclusion of the next AnnualGeneral Meeting.”

“FURTHER RESOLVED THAT the Board of Directors of the Company be and are hereby authorised to finalize theremuneration payable together with out of pocket expenses, if any, to the so appointed Auditors.”

SPECIAL BUSINESS

9. RE-APPOINTMENT OF SHRI R. K. BAHRI AS “WHOLE TIME DIRECTOR” OF THE COMPANY

To consider and if thought fit to pass with or without modification the following Resolution as an “Ordinary Resolution.”

“RESOLVED THAT in accordance with the provisions of Section 198, 269, 309, 310 read with Schedule XIII and allother applicable statutory provisions of the Companies Act, 1956 (including any statutory modification(s) or re-enactmentthereof, for the time being in force) the consent of the Company be and is hereby accorded and is deemed to have beenso accorded to the re-appointment of Shri R.K. Bahri as Whole-time Director of the Company for a period of 5 (Five)years with effect from 1st April, 2009, on a remuneration and benefits and amenities presently paid/payable/enjoyed to/by Shri R.K. Bahri, the Whole-time Director of the Company comprising of a Basic Salary of Rs. 5,75,000/- per monthand other benefits and perquisites in accordance with the approval of the shareholders of the Company accorded bythem in their 20th Annual General Meeting held on Thursday the 4th September, 2008.”

“RESOLVED FURTHER THAT the Board of Directors of the Company (hereinafter referred to as “the Board” which termshall also be deemed to include the Remuneration Committee constituted by the Board) be and is hereby authorised torevise and/or re-fix the said remuneration and/ or other perquisites, benefits and amenities provided that the so revised/re-fixed remuneration and/ or perquisites etc. do not exceed the limits prescribed from time to time under Schedule XIIIor any other provisions of the Companies Act, 1956 and/or any Statutory modification(s) thereof and provided furtherthat such enhanced remuneration, allowances and perquisites are subsequently placed before the shareholders in theirGeneral Meeting held after such enhancement/revision/re-fixation by the Board.”

Notice

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10. ENHANCEMENT OF REMUNERATION OF SHRI S. P. BHATIA, THE WHOLE-TIME DIRECTOR


“RESOLVED THAT subject to such consents and permissions, if any, as may be necessary the consent of the Company beand is hereby accorded in accordance with the provisions of Section 198, 309, 310 read with Schedule XIII and all otherapplicable statutory provisions of the Companies Act, 1956, to enhancement of remuneration and benefits and amenitiespaid/payable/enjoyed to/by Shri S.P. Bhatia, the Whole-time Director of the Company with effect from 01st October,2009 as detailed in the Explanatory Statement.”

“RESOLVED FURTHER THAT the Board of Directors of the Company (hereinafter referred to as “the Board “ which termshall also be deemed to include the Remuneration Committee constituted by the Board) be and is hereby authorised torevise and/or re-fix the said remuneration and/or other perquisites, benefits and amenities provided that the so revised/re-fixed remuneration and/or perquisites etc. do not exceed the limits prescribed from time to time under Schedule XIIIor any other provisions of the Companies Act, 1956, and/or any Statutory modification(s) thereof and provided furtherthat such enhanced remuneration, allowances and perquisites are subsequently placed before the shareholders in theirGeneral Meeting held after such enhancement/ revision/ refixation by the Board.”

11. ENHANCEMENT OF REMUNERATION OF SHRI G. GEHANI, THE WHOLE-TIME DIRECTOR


“RESOLVED THAT subject to such consents and permissions, if any, as may be necessary the consent of the Company beand is hereby accorded in accordance with the provisions of Section 198, 309, 310 read with Schedule XIII and all otherapplicable statutory provisions of the Companies Act, 1956, to enhancement of remuneration and benefits and amenitiespaid/payable/ enjoyed to/ by Shri G. Gehani, the Whole-time Director of the Company with effect from 01st October,2009 as detailed in the Explanatory Statement.”

“RESOLVED FURTHER THAT the Board of Directors of the Company (hereinafter referred to as “the Board” which termshall also be deemed to include the Remuneration Committee constituted by the Board) be and is hereby authorised torevise and/or re-fix the said remuneration and/ or other perquisites, benefits and amenities provided that the so revised/re-fixed remuneration and/ or perquisites etc. do not exceed the limits prescribed from time to time under Schedule XIIIor any other provisions of Companies Act, 1956, and/or any Statutory modification(s) thereof and provided further thatsuch enhanced remuneration, allowances and perquisites are subsequently placed before the shareholders in theirGeneral Meeting held after such enhancement/ revision/ refixation by the Board.”

12. ENHANCEMENT OF REMUNERATION OF SHRI C.K. GOEL, THE WHOLE-TIME DIRECTOR


“RESOLVED THAT subject to such consents and permissions, if any, as may be necessary the consent of the Company beand is hereby accorded in accordance with the provisions of Section 198, 309, 310 read with Schedule XIII and all otherapplicable statutory provisions of the Companies Act, 1956, to enhancement of remuneration and benefits and amenitiespaid/payable/ enjoyed to/ by Shri C. K. Goel, the Whole-time Director of the Company with effect from 01st October,2009 as detailed in the Explanatory Statement.”

“RESOLVED FURTHER THAT the Board of Directors of the Company (hereinafter referred to as “the Board” which termshall also be deemed to include the Remuneration Committee constituted by the Board) be and is hereby authorised torevise and/or re-fix the said remuneration and/ or other perquisites, benefits and amenities provided that the so revised/re-fixed remuneration and/ or perquisites etc. do not exceed the limits prescribed from time to time under Schedule XIIIor any other provisions of the Companies Act, 1956, and/or any Statutory modification(s) thereof and provided furtherthat such enhanced remuneration, allowances and perquisites are subsequently placed before the shareholders in theirGeneral Meeting held after such enhancement/revision/refixation by the Board.”

13. ENHANCEMENT OF BORROWING POWERS

To consider and if thought fit to pass with or without modification the following Resolution as an “Ordinary Resolution”:-

“RESOLVED THAT pursuant to the provisions of Section 293 (1) (d) and other applicable provisions, if any, of theCompanies Act, 1956 (including any statutory modifications or re-enactments thereof), the Company hereby accords itsconsent to Board of Directors for borrowing any sum or sums of money from time to time from anyone or more of theCompany’s bankers and/or from any one or more other persons, firms, bodies corporate or financial institutions, whetherin India or abroad, and whether by way of cash credit, advance or deposits, loans or bill discounting, by issue ofdebentures or other securities or otherwise and whether unsecured or secured by creating a mortgage, charge,hypothecation or lien or pledge of the Company’s assets, licenses and properties, whether immovable or movable or ofstock-in-trade (including raw materials, stores, spare parts and components in stock or in transit), sundry debtors and

Notice

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work-in-progress and all or any of the undertaking of the Company notwithstanding that the monies to be borrowedtogether with monies already borrowed by the Company (apart from temporary loans obtained from the Company’sbankers in the ordinary course of business) will or may exceed the aggregate of the paid-up capital of the Company andits free reserves, that is to say, reserves not set apart for any specific purpose, so that the total amount up to which themonies may be borrowed by the Board of Directors and outstanding at any time shall not exceed a sum of Rs 2,500Crores (Rupees Two Thousand Five Hundred Crores Only) and the Board of Directors (including any Committee(s)thereof) are hereby authorised to execute such debenture trust deeds or mortgage, charge, hypothecation, lien, promissorynotes, deposit receipts and other deeds and instruments or writings containing such conditions and covenants as theDirectors may deem fit.”.

14 RE-APPOINTMENT OF SHRI M.M. MATHUR AS “WHOLE-TIME DIRECTOR” OF THE COMPANY

To consider and if thought fit to pass with or without modification the following Resolution as a “Special Resolution.”

“RESOLVED THAT in accordance with the provisions of Section 198, 269, 309, 310 read with schedule XIII and allother applicable provisions of the Companies Act, 1956 (including any statutory modification(s) or re-enactment thereof,for the time being in force) the consent of the Company be and is hereby accorded and is deemed to have been soaccorded to the re-appointment of Shri M. M. Mathur as Whole-time Director of the Company for a period of 5 (five)years with effect from 1st November, 2009 on a remuneration and benefits and amenities presently paid/payable/enjoyedto/by Shri M.M. Mathur, the Whole-time Director of the Company comprising of a Basic Salary of Rs. 5,75,000/- permonth and other benefits and perquisites in accordance with the approval of the shareholders of the Company accordedby them in their 20th Annual General Meeting held on Thursday the 4th September, 2008.”

“FURTHER RESOLVED THAT pursuant to clause (c)(ii) of Part-I of schedule XIII of the Companies Act, 1956 and otherrelevant statutory provisions, approvals be and is hereby accorded and is deemed to have being so accorded to ShriM.M. Mathur continunig to act as Whole-time Director of the Company for the aforesaid further period of 5 (five) yearsw.e.f. 1st November, 2009, inspite of his attaining the age of 73 years on 11th September, 2009”

“RESOLVED FURTHER THAT the Board of Directors of the Company (hereinafter referred to as “the Board” which termshall also be deemed to include the Remuneration Committee constituted by the Board) be and is hereby authorised torevise and/or re-fix the said remuneration and/ or other perquisites, benefits and amenities provided that the so revised/re-fixed remuneration and/ or perquisites etc. do not exceed the limits prescribed from time to time under Schedule XIIIor any other provisions of the Companies Act, 1956 and/or any Statutory modification(s) thereof and provided furtherthat such enhanced remuneration, allowances and perquisites are subsequently placed before the shareholders in theirGeneral Meeting held after such enhancement/revision/re-fixation by the Board.”

15. RATIFICATION OF ISSUANCE OF CORPORATE GUARANTEE TO EXIM BANK


“RESOLVED THAT in accordance with Section 372A of the Companies Act,1956 and any other applicable provisions ofthe Act or statutory requirement which may be relevant in this connection an approval of the Company be and is herebyaccorded and is deemed to have been so accorded to issuance of an unconditional and irrevocable corporate guaranteeby the Company in favour of Export Import Bank of India (Exim Bank) who at the request of PSL North America LLC hadsanctioned a buyers credit facility aggregating to USD 5.5mn. for the purpose of financing export of Machinery, Equipments,Machinery spares, and tools from India, guaranteeing the due repayment of the said financial facility by the said Companytogether with payment of interest and other monies payable by the borrower to Exim Bank in respect of the said Credit.

“RESOLVED FURTHER THAT the issuance of the said Corporate Guarantee by the Company be and is hereby ratified.

16. RATIFICATION OF ISSUANCE OF CORPORATE GUARANTEE TO ICICI BANK


“RESOLVED THAT in accordance with Section 372A of the Companies Act,1956 and any other applicable provisions ofthe Act or statutory requirement which may be relevant in this connection an approval of the Company be and is herebyaccorded and is deemed to have been so accorded to issuance of an unconditional and irrevocable corporate guaranteeby the Company in favour of ICICI Bank Limited (ICICI Bank) who at the request of PSL North America LLC had sanctioneda buyers credit facility aggregating to USD 30 mn. for the purpose of financing export of Machinery, Equipments,Machinery spares and tools from India, guaranteeing the due repayment of the said financial facility by the said Companytogether with payment of interest and other monies payable by the borrower to ICICI Bank in respect of the said Credit.

“RESOLVED FURTHER THAT the issuance of the said Corporate Guarantee by the Company be and is hereby ratified.

Notice

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17. COMMENCEMENT OF NEW BUSINESS


“RESOLVED THAT pursuant to the provisions of Section 149(2A) of the Companies Act,1956 approval be and is herebyaccorded and is deemed to have been so accorded for commencement by the Company of all or any of the businessespertaining to designing, planning, purchasing, erecting, constructing, selling, land, building- whether for residential,commercial or industrial purpose as more particularly set out in various Sub-clauses/clauses to this effect viz. sub-clause2,3,10,42 etc. of Clause-C “Other Objects” of Company’s Memorandum of Association as amended to date.”

18. INTER-CORPORATE INVESTMENTS


“RESOLVED THAT pursuant to Section 372A and other applicable provisions, if any, of the Companies Act, 1956 theconsent of the members of the Company be and is hereby granted to make an investment of a sum not exceedingRs. 1,500 Crores (Rupees One Thousand Five Hundred Crores Only) by way of subscription and/or purchase of EquityShares of other body corporates, not withstanding that such investment or other investments or such investment togetherwith the Company’s existing investment in all other bodies corporate shall be in excess of the limits prescribed underSection 372A of the Act and the Board of Directors of the Company be and is hereby authorised to determine the actualsum to be so invested and all matters arising out of or incidental to the proposed investment and to do all such acts andthings as may be necessary to implement this Resolution.”

19. FURTHER ISSUE OF CAPITAL


“RESOLVED THAT pursuant to the provisions of Section 81(1A) and all other applicable provisions, if any, of the CompaniesAct, 1956 as amended (“Act”), the provisions of Securities and Exchange Board of India (Disclosure and InvestorProtection) Guidelines, 2000 as amended (the “SEBI Guidelines”) including the provisions of Chapter XIII-A of the SEBIGuidelines relating to issue of securities through Qualified Institutions Placement, the provisions of the Foreign ExchangeManagement Act, 1999 as amended, and rules and regulations made hereunder, including the Foreign ExchangeManagement (Transfer or Issue of Security by a person Resident outside India) Regulations, 2000, as amended andapplicable, the provisions of Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through DepositoryReceipt Mechanism) Scheme, 1993 and subject to any other applicable law or laws, rules and regulations (including anystatutory amendment thereto or re-enactment thereto or re-enactment thereof for the time being in force) and in accordancewith the provisions of the Memorandum of Association and Articles of Association of the Company and Listing Agreements,entered into by the Company with the stock exchanges where the shares of the company are listed (“Stock Exchanges”)and subject to any approval, consent, permission and/or sanction of the Government of India, Reserve Bank of India,Stock Exchanges, Registrar of Companies, Securities and Exchange Board of India and /or all other appropriate authorities,institutions or bodies to the extent applicable, within or outside India, and subject to such conditions and modificationsas may be prescribed by any such authority / authorities while granting such approvals, permissions, consents andsanctions and which may be agreed by the Board of Directors (hereinafter referred to as the “Board” which term shall bedeemed to include any committee thereof, whether constituted or to be constituted, to exercise its powers including thepowers conferred by this resolution), and which, the Board be and is hereby authorised to accept, if it thinks fit in theinterest of the Company, the Board be and is hereby authorised to create, offer, issue and allot in one or more tranch(es),in the course of domestic and / or international offerings and /or Qualified Institutional Placements (“QIP”) pursuantto Chapter XIII-A of the SEBI Guidelines, as amended from time to time, or otherwise, with or without an over allotment/green shoe issue option, in one or more foreign markets or domestic markets, to domestic institutions, foreign institutionalinvestors, non-resident Indians, Indian public, companies, corporate bodies, mutual funds, banks, insurance companies,pension funds, individuals, qualified institutional buyers as defined under Clause 1.2.1 (xxiv a) of SEBI Guidelines orother persons or entities, whether shareholders of the Company or not, through a public issue and/or qualified institutionalplacement within the meaning of Chapter XIII-A of the SEBI Guidelines and or through a combination of the foregoing asmay be permitted under applicable law from time to time, with or without an over allotment/ green shoe option, equityshares, secured or unsecured debentures, bonds or any other securities whether convertible into equity shares of theCompany or not, including, but not limited to, Foreign Currency Convertible Bonds (“FCCBs”), Optionally ConvertibleDebentures (“OCDs”), Bonds with share warrants attached, Global Depository Receipts (“GDRs”), American DepositoryReceipts (“ADRs”) or any other equity related instrument of the Company or a combination of the foregoing and/or anyother securities whether convertible into equity shares or not (hereinafter referred to as “securities”) for a value of uptoRs. 300 Crores (Rupees Three Hundred Crores), whether to be listed on any stock exchange in India or any internationalstock exchanges outside India, through an offer document and/or placement document and/ or prospectus and/or offerletter, and/or offering circular, on public and/or private or preferential basis, whether rupee denominated in foreigncurrency at such time or times, at such price or prices in such manner and on such terms and conditions including

Notice

PSL Notice 6-36.p65 6/20/2009, 5:00 PM9


Notice

security and rate of interest , as may be decided by and deemed appropriate by the Board as per applicable law,including the discretion to determine the categories of investors to whom the offer, issue and allotment shall be made,considering, the prevailing market conditions and other relevant factors wherever necessary in consultation with itsadvisors and or underwriters, as the Board in its absolute discretion may deem fit and appropriate.”

“RESOLVED FURTHER THAT in addition to all applicable Indian laws, the securities issued in pursuance of this resolutionshall also be governed by all applicable laws and regulations of any jurisdiction outside India where they are listed orthat may in any other manner apply to such securities or provided in the terms of their issue.”

“RESOLVED FURTHER THAT any securities that are not subscribed in issues mentioned above, may be disposed off bythe Board in its absolute discretion in such manner, as the Board may deem fit and as permissible by the law.”

“RESOLVED FURTHER THAT in the event of issue of securities by qualified institutional placement pursuant to ChapterXIIIA of the SEBI Guidelines:

(a) the relevant date for the purpose of calculating the minimum price shall be the date on which the Board or Committeedecides to open the issue of securities or such other time as may be allowed by SEBI Guidelines from time to time;

b) the equity shares of the Company allotted on the conversion of the warrants or other convertible instruments shallrank pari passu in all respects with the then existing equity shares of the Company;

c) the allotment of securities shall be completed within 12 months from the date of this resolution approving theproposed issue or such other time as may be allowed by the SEBI Guidelines from time to time;

d) the securities shall not be sold for a period of one year from the date of allotment, except on a recognized stockexchange or except as may be permitted from time to time by the SEBI Guidelines;

e) the offer, issue and allotment of the securities shall be made at such time or times that the Board or the Committeemay in their absolute discretion decide, subject to the SEBI Guidelines and other applicable laws, and the termsagreed between the Board and the proposed allottees of the securities;

f) the price and/or number of the Securities shall be appropriately adjusted for corporate actions such as issue ofshares by way of capitalisation of profits or reserves (other than by way of dividend on shares), issue of shares onrights basis, consolidation of outstanding shares of the Company into smaller number of shares, division of outstandingshares (including by way of stock split), re-classification of shares into other securities of the Company, other similarevents or circumstances , which in the opinion of the concerned Stock Exchanges, requires adjustments and anysuch corporate restructuring as may be permitted under the provisions of Chapter XIII-A of the SEBI Guidelines.”

“RESOLVED FURTHER THAT in case of an issuance of FCCBs/ADRs/GDRs, the relevant date for the determination ofthe issue price of the securities offered, shall be determined in accordance with the Issue of Foreign Currency ConvertibleBonds and Ordinary shares (through Depository Receipt Mechanism) Scheme, 1993 as may be amended from time totime.”

“RESOLVED FURTHER THAT the issue of Securities shall be subject to the provisions of Memorandum and Articles ofAssociation of the Company and in accordance with the terms of the issue.”

“RESOLVED FURTHER THAT for the purpose of giving effect to the above resolutions, the Board be and is herebyauthorised to do all such acts, deeds, matters and things including but not limited to determining the form and mannerof the issue, including the class of investors to whom the securities are to be issued and allotted, the number of securitiesto be allotted, execution of various transaction documents, creation of mortgage/ charge in accordance with Section293(1)(a) of the Act, in respect of any securities as may be required either on pari passu basis or otherwise, as it may inits absolute discretion deem fit.”

“RESOLVED FURTHER THAT the Board be and is hereby authorised to form a committee or delegate from time to time,all or any of its powers conferred herein upon the Board to any Director(s) or Committee of Directors / CompanySecretary / Managing Director / other persons authorised by the Board to give effect to the aforesaid resolutions.”

“RESOLVED FURTHER THAT subject to the applicable laws the Board and/or the Committee authorised by the Board beand is herby authorised to do such acts, deeds and things as the Board in its absolute discretion deems necessary ordesirable in connection with the issue of the securities, including, without limitation of the following:

(a) Decide the date for the opening of the issue of securities,

(b) Decide the price band for the issue,

(c) Finalisation of the Issue Price,

(d) Finalisation of the allotment of the securities on the basis of the subscriptions received,

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(e) Finalisation of, signing of and arrangement for the submission of the preliminary and final offering circulars/ placementdocuments/prospectus(es)/offer document(s), and any amendments and supplements thereto, along with supportingpapers needed to be filed for submission to various relevant authorities in relation to the respective offering(s) ofsecurities, to finalise and/or authorise issue of other documents and seeking and obtaining listing approval with anyapplicable government and regulatory authorities, institutions or bodies as may be legally required or provided forin the respective offering circulars/placement documents/ prospectus(es)/offer document(s), or at the Board’s discretion,and as the Board may consider necessary or expedient, in the best interest of the Company,

(f) Writings and publicity material in relation to the respective offering(s) of securities,

(g) Deciding the pricing and terms of the securities, and all other related matters, including taking any action on two-way fungibility for conversion of underlying equity shares into FCCBs/ GDRs/ ADRs, as per applicable laws, regulationsor guidelines,

(h) Appoint, in its absolute discretion, managers (including lead manager), Investment Bankers, Merchant Bankers,underwriters, guarantors, financial and /or legal advisors, depositories, custodians, principal paying/transfer/conversionagents, listing agents, registrars, trustees and all other agencies, whether in India or abroad, entering into or executionof all such agreements/ arrangements/ Memorandums of Understanding/ documents with any such agencies, inconnection with the proposed offering of the securities,

(i) Approval of the Deposit Agreements(s), the Purchase/Underwriting Agreement(s), the Trust Deed(s), Escrow Agreement,the Indenture(s), the Master/Global GDRs/ADRs/FCCBs/other securities, letters of allotment, listing application,engagement letter(s), memorandum of understanding and any other agreements of documents, as may be necessaryin connection with the issue/offering (including amending, varying or modifying the same, as may be considereddesirable or expedient), in accordance with all applicable laws, rules, regulations and guidelines; and

(j) Settle all questions, difficulties or doubts that may arise in regards to the issue, offer or allotment of securities andutilisation of the proceeds of the issue in such manner and to do all such acts, deeds, matters and things as it may inits absolute discretion deem fit necessary, incidental, ancillary, connected with or desirable for such purpose(s) asmentioned above and otherwise to implement this resolution as it may in its absolute discretion deem fit andproper, including without limitation to the drafting, finalisation, entering into and execution of any arrangement oragreements, without being required to seek any further consent or approval of the members or otherwise to the endand intent that the members shall be deemed to have given their approval thereto expressly by the authority of thisresolution.”

“RESOLVED FURTHER THAT the Board and/or the Committee authorised by the Board be and is hereby authorised toaccept any modifications in the proposals as may be required by the authorities involved in such issues but subject tosuch conditions as the Securities and Exchange Board of India /Government of India/Reserve Bank of India or such otherappropriate authorities may impose at the time of their approval and as agreed to by the Board.”

“RESOLVED FURTHER THAT without prejudice to the generality of the foregoing, issue of the securities may be doneupon all or any terms or combination of terms in accordance with international practices relating to the payment ofinterest, additional interest, premium on redemption, prepayment or any other debt service payments and all suchterms as are provided customarily in an issue of securities of this nature.”

“RESOLVED FURTHUR THAT the Company may enter into any arrangement with any agency or body authorised by theCompany for the issue off depository receipts representing the underlying equity shares issued by the Company inregistered or bearer form with such features and attributes as are prevalent in international capital markets for instrumentsof this nature and to provide for the tradability or free transferability thereof as per international practices and regulations(including listing on one or more stock exchange(s) in or outside India) and under the forms and practices prevalent inthe international markets.”

By Order of the Board of Directors ofRegd. Office :- PSL LIMITEDKachigam, DamanUnion Territory of Sd/-Daman & Diu - 396 210 (G. GEHANI)

Director &Dated : 10th June, 2009 Company Secretary

Notice

PSL Notice 6-36.p65 6/20/2009, 5:00 PM11


EXPLANATORY STATEMENT( In Compliance of Section 173(2) of the Companies Act, 1956 )

ITEM NO.9 : RE-APPOINTMENT OF SHRI R.K. BAHRI AS “WHOLE-TIME DIRECTOR” OF THE COMPANY

Shri R. K. Bahri has been functioning as Whole-time Director of the Company for last many years. As the relevant provisions of the CompaniesAct, 1956 relating to appointment of Whole-time Directors provide for a maximum tenure of five years for such appointment at one time,Shri Bahri’s appointment by shareholders in the past has always been made for five years at one time. Since the shareholders in theirSixteenth AGM of the Company held on 23rd September, 2004 had appointed Shri R. K. Bahri as a Whole-time Director for a period of fiveyears commencing from 1st April, 2004, his term expired on 31st March, 2009. As Shri Bahri has been rendering very useful services to theCompany, particularly keeping in view the enormous progress made by the Rebar Coating Division headed by him, Shri Bahri was requestedto continue to function as Whole-time Director from 1st April, 2009 in spite of expiry of his term, subject to members’ approval in theforthcoming AGM. Accordingly, the Board of Directors has also passed the necessary Resolutions according their approval to the re-appointmentof Shri R. K. Bahri w.e.f. 1st April, 2009 for a further period of five years from the said date, subject however to the approval of Company’sshareholders as required under applicable provisions of the Companies Act, 1956 read with Schedule XIII of the said Act.

As far as his remuneration is concerned, the same was fixed by the shareholders in their last AGM held on 4th September, 2008 on the basisof enhanced Basic Salary of Rs. 5,75,000/- per month. Therefore, Shri Bahri’s re-appointment is proposed at the same Basic Salary till thetime it is revised/ enhanced by the Remuneration Committee/Board of Directors and is further confirmed by the shareholders of the Company.

Hence the principal terms and conditions of Shri R.K. Bahri’s re-appointment are as follows:-

a) Period of Agreement - from 01/04/2009 to 31/03/2014

b) Remuneration - Rs. 5,75,000/- p.m. (Basic Salary)

with authority to the Board / Remuneration Committee to re-fix his salary from time to time within the aforesaid period of agreements,keeping into view his performance and the ceilings, if any, fixed by statute.

c) Perquisites and Allowances

i) In addition to the salary, the appointee shall also be entitled to perquisites and allowances like accommodation (furnished orotherwise) or house rent allowance in lieu thereof, house maintenance allowance, together with the reimbursement of expenses orallowance for utilities such as gas, electricity, water, furnishing and repairs, medical reimbursement, club fees and leave travel

NOTES:

1. An Explanatory Statement pursuant to Section 173 (2) of the Companies Act, 1956 in respect of matters covered under “SpecialBusiness” is annexed hereto.

2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTEINSTEAD OF HIMSELF/HERSELF AND THE PROXY NEED NOT BE A MEMBER. PROXY FORM DULY FILLED IN MUST REACH THEREGISTERED OFFICE OF THE COMPANY AT LEAST FORTY-EIGHT HOURS BEFORE THE MEETING.

3. The Register of Members and Share Transfer Books of the Company will remain closed from Tuesday the 14th day of July, 2009 toTuesday the 21st day of July, 2009 (both days inclusive).

4. The Final Dividend of Rs. 2.50 per share recommended by the Board of Directors of the Company in its meeting held on 28th May, 2009is in addition to the Interim Dividend of Rs. 2.50 on each fully paid-up share declared and paid by the Board in February, 2009. If thesaid Final Dividend is declared at the meeting, the same will be payable to the Members/Beneficial owners whose names appear in theCompany’s Register of Members/Records of Depositories on Tuesday the 21st day of July, 2009.

5. Members who have still not paid allotment money (as applicable) are requested to pay the outstanding amount including the interestcalculated on outstanding allotment money at the rate of 18% per annum from the last date of payment till 31st March, 2001 andthereafter at the rate of 9% p.a. from 1st April, 2001 till the actual date for payment by a Demand Draft drawn in favour of “PSL PUBLICISSUE-ALLOTMENT MONEY”, payable at Mumbai.

6. Members desirous of getting any information in respect of Accounts of the Company and proposed Resolutions, are requested to sendtheir queries in writing to the Company at its Registered Office, so as to reach at least Seven days before the date of the Meeting, toenable the company to furnish the required information at the Meeting.

7. For convenience of Members, an attendance slip is annexed to the proxy form. Members/Proxies are requested to affix their signaturesat the space provided therein and hand over the attendance slip at the venue of the meeting. The Proxy of a Member should mark on theattendance slip as “Proxy”.

8. Members/Proxies attending the meeting are requested to bring their copy of the Annual Report for reference at the Meeting.

9. Members who are holding Company’s Shares in dematerialized form are required to bring details of their depository account numberfor identification.

10. Members still holding physical shares are requested to send their Permanent Account Number (PAN) details while lodging their requeststo the Company/Share Registrars for transfer of their said physical shares, failing which the transfer requests shall be rejected and thesubmitted transfer documents will be returned to the Lodger/Buyer.

Notice

PSL Notice 6-36.p65 6/20/2009, 5:00 PM12


Explanatory Statement

concession for himself and his family in accordance with rules of the Company, medical insurance and such other perquisites andallowances in accordance with the rules of the Company or as may be agreed to by the Board of Directors and the Appointee, suchperquisites and allowances will however be subject to a maximum of 125% of his annual salary.

ii) For the purpose of calculating the above ceiling, perquisites and allowances shall be evaluated as per Income Tax Rules, whereverapplicable. In the absence of any such rules, perquisites and allowances shall be evaluated at actual cost.

iii) Provision for use of the Company’s Car for Official duties and telephone at residence (incl. Payment for local calls and longdistance official calls) shall not be included in the computation of perquisites for the purpose of calculating the said ceiling .

iv) Company’s contribution to provident fund and Superannuation or Annuity fund, to the extent that these benefits either singly ortogether are not taxable under the Income Tax Act, Gratuity payable as per the rules of the Company and encashment of leave atthe end of the tenure, shall not be included in the computation of limits for the remuneration or perquisites aforesaid.

d) Minimum Remuneration :

Not withstanding anything to the contrary herein contained, wherein any financial year during the currency of the tenure of theAppointee, the Company has no profits or its profits are inadequate, the Company will pay remuneration by way of salary, perquisitesand allowances as per section 198, 269, 309 and Schedule XIII of the Companies Act, 1956.

e) The terms and conditions of the said re-appointments may be altered and be varied from time to time by the Board as it may, in itsdiscretion, deem fit, within the maximum amount payable to Managing and Whole-Time Directors in accordance with Schedule XIII tothe Companies Act, 1956 or any amendments made hereafter in this regard.

f) The arrangement may be terminated by either party giving the other party six month’s notice or the salary in lieu thereof.

g) If at any time the Appointee ceases to be a Director of the Company for any cause whatsoever, he shall also cease to be Whole-TimeDirector of the Company.

h) If at any time the appointee ceases to be a Whole-time Director of the Company for any cause whatsoever, he shall not cease to beDirector of the Company.

i) The Appointee is appointed by virtue of his employment in the Company and his re-appointment is subject to the provisions of Section283 (1) of the Act. If at any time the Appointee ceases to be in the employment of the Company for any cause whatsoever, he shall ceaseto be Whole-Time Director of the Company.

j) The Appointee shall not be entitled to supplement his earning under the Agreements with any buying and selling commissions. He shallalso not become interested or otherwise concerned directly or through his spouse and/or minor children, if any, in any selling agencyof the Company, without the prior approval from the competent authority.

k) The Appointee shall not have, inter alia, the following powers:-

i) the power to make calls on members in respect of monies unpaid on shares in the company;

ii) the power to issue debentures; and

iii) the power to invest the funds of the company in shares, stocks and securities.

In accordance with the provisions of Section 309 of the Act the terms of remuneration specified above are now being placed before themembers in General Meeting for their approval.

Other than Shri R.K. Bahri, Director, no other Director is concerned or interested in the resolution.

This may be treated as an extract of the draft terms of appointment of Shri R.K. Bahri pursuant to Section 302 of the Act.

ITEM NO. 10 to 12 : ENHANCEMENT IN REMUNERATION OF WHOLE-TIME DIRECTORS

Shri S. P. Bhatia, Shri G. Gehani and Shri C.K. Goel were appointed as Whole-time Directors of the Company by the shareholders in theirmeeting held on 27th September, 2007 each for a period of five years commencing on different dates. The members had at that time alsoaccorded their approval to the remuneration that they would draw based on a Basic Salary of Rs. 1,65,000/- per month in addition to fewallowances and perquisites, some of which were directly computed based on the said Basic Salary. As since then almost two years hadexpired and their salary had not been enhanced, the Remuneration Committee of the Board in its meeting held on 28th May, 2009 consideredenhancement of their remuneration. As the said Remuneration Committee was of the unanimous view that since each of these three Directorsbeing Head of Department of his own division/department of the Company, have been contributed very effectively to the Company’sprogress by shouldering adequate responsibilities particularly consequent upon all around increase in Company’s activities in the recentpast, it recommended enhancement of their Basic Salaries in the following manner:-

Whole Time Directors Expiry of Tenure Present monthly Proposed monthlyBasic Salary Basic Salary

Shri S. P. Bhatia 25.10.2011 1,65,000 2,50,000

Shri G Gehani 30.07.2012 1,65,000 2,50,000

Shri C. K. Goel 25.10.2011 1,65,000 2,50,000

Subsequently the Board, in its meeting held on 28th May, 2009, while reviewing the decisions of the Remuneration Committee, accorded itsunanimous approval to the observations of the said Committee and accordingly accepted the abovementioned proposed enhancement in

PSL Notice 6-36.p65 6/20/2009, 5:00 PM13



the monthly Basic Salary of the three Whole-time Directors namely Shri S. P. Bhatia, Shri G. Gehani and Shri C. K. Goel. As the saidenhancement would be subject to an approval from the members of the Company in their forthcoming AGM, the enhanced salary would beeffective from 1st October, 2009.

All such perquisites and allowances being currently availed by the said Whole-time Directors and having a direct linkage with the BasicSalary are also proposed to be proportionately enhanced. Their new remuneration comprising of the aforesaid revised Basic Salary and otherperks and allowances permitted to them would remain applicable till the said remuneration is considered for further enhancement byRemuneration Committee/ Board of Directors and subsequently confirmed/approved by the Company’s members in their AGM.

Hence the principal terms and conditions of appointment of Shri S.P. Bhatia, Shri G. Gehani and Shri C. K. Goel as Whole-time Directors ofthe Company w.e.f. 1st October, 2009 are as follows :-

a) Present Term

Shri S. P. Bhatia - from 26/10/2006 to 25/10/2011

Shri G. Gehani - from 31/07/2007 to 30/07/2012

Shri C. K. Goel - from 26/10/2006 to 25/10/2011

b) Remuneration for each of the three Whole-time Directors

Shri S. P. Bhatia - Rs. 2,50,000/- p.m. (Basic Salary)

Shri G. Gehani - Rs. 2,50,000/- p.m. (Basic Salary)

Shri C. K. Goel - Rs. 2,50,000/- p.m. (Basic Salary)

with authority to the Board / Remuneration Committee to re-fix the said remuneration from time to time within the aforesaid period,keeping into view his performance and the ceiling, if any, fixed by statute.


i) In addition to the salary, the appointee shall also be entitled to perquisites and allowances like accommodation (furnished orotherwise) or house rent allowance in lieu thereof, house maintenance allowance, together with the reimbursement of expenses orallowance for utilities such as gas, electricity, water, furnishing and repairs, medical reimbursement, club fees and leave travelconcession for himself and his family in accordance with rules of the Company, medical insurance and such other perquisites andallowances in accordance with the rules of the Company or as may be agreed to/by the Board of Directors and the Appointee, suchperquisites and allowances will however be subject to a maximum of 125% of his annual salary.


iii) Provision for use of the Company’s Car for Official duties and telephone at residence (incl. Payment for local calls and longdistance official calls) shall not be included in the computation of perquisites for the purpose of calculating the said ceiling .



Not withstanding anything to the contrary herein contained, wherein any financial year during the currency of the tenure of theAppointee, the Company has no profits or its profits are inadequate, the Company will pay remuneration by way of salary, perquisitesand allowances as per section 198, 269, 309, Schedule XIII of the Companies Act, 1956.




h) If at any time the appointee ceases to be Whole-Time Director of the Company for any cause whatsoever, he shall not cease to beDirector of the Company.


j) The Appointee shall not be entitled to supplement his earning under the Agreements with any buying and selling commissions. He shallalso not become interested or otherwise concerned directly or through his spouse and/or minor children , if any, in any selling agencyof the Company, without the prior approval from the competent authority.

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Hence the Resolutions at Item No. 10 to 12.

Shri S. P. Bhatia is concerned or interested in item No. 10 of the Notice.

Shri G. Gehani is concerned or interested in item No. 11 of the Notice.

Shri C. K. Goel is concerned or interested in item No. 12 of the Notice.

This may be treated as an extract of the draft terms of appointment of each of Shri S. P. Bhatia, Shri G. Gehani and Shri C. K. Goelpursuant to Section 302 of the Act.

ITEM NO. 13 : ENHANCEMENT OF BORROWING POWERS

With each passing year the Company’s turnover is getting enhanced at substantial rate. Since more and more contracts are being bagged bythe Company on a continuous basis, this phenomena is likely to continue in the near future also, keeping in view the increased demand forPipelines not only within the country but even in many other countries whether Company has earlier supplied the pipes. As this is likely toboost up the requirement for Pipe production, it is advisable to not only continuously enhance its production capability by installing newPipe Mills but to also from time to time upgrade its existing Plants with the improved technologies available in the filed. Company is thereforein the continuous need of funds. The Company proposes to borrow money for funding the above activities, using different methodologiesextra, borrowing of money using different methodologies from permissible sources therefore proves a better option.

Section 293 (1) (d) of the Companies Act, 1956, which governs the borrowing power, Board permits any borrowing beyond the aggregatePaid-up Capital of the Company and its free reserves only when consent of the Company in its general meetings is obtained.

Accordingly, members of the Company in their last AGM held on 4th September, 2008 accorded their approval to the Board of Directors ofthe Company for resorting to borrowings up to a maximum limit of Rs.2,000 Crores.

In view of the reasons for need for borrowing of funds stated hereinabove, shareholders approval for enhanced borrowing limit up toRs. 2,500 Crores is requested.

Hence Resolution at Item No. 13 permitting the Board to borrow up to the said amount of Rs. 2,500 Crores.

None of the Directors are in any way concerned or interested in the said Resolutions.

ITEM NO.14 : RE-APPOINTMENT OF SHRI M. M. MATHUR AS “WHOLE-TIME DIRECTOR” OF THE COMPANY

Shri M.M. Mathur has also been functioning as a Whole-time Director of the Company for last many years. The relevant provisions of theCompanies Act, 1956 relating to appointment of Whole-time Directors provide for a maximum tenure of five years for such appointment atone time, Shri Mathur’s appointment by shareholders in the past has always been made for five years at one time. Since the shareholders intheir Sixteenth AGM of the Company held on 23rd September, 2004 had appointed Shri M.M. Mathur as a Whole-time Director for a periodof five years commencing from 1st November, 2004, his term therefore will expire very shortly i.e. on 31st October, 2009. As Shri M. M.Mathur, who heads the Marketing Department of the Company based at Delhi, has been directly responsible for procurement of many of theprestigious contracts for the Company from certain such clients, which are handled by Delhi Marketing Office of the Company, his contributionis noteworthy in enhancing the Company’s turnover year after year consequently resulting into higher profitability for the Company.

In view of the aforesaid useful contribution of Shri M.M. Mathur to the continuous progress of the Company, it is proposed to re-appoint himfor a further period of five years commencing from 1st November, 2009. The Board has therefore accorded the necessary approval for saidre-appointment , subject to the approval of the Company’s shareholders as required under applicable provisions of the Companies Act, 1956read with Schedule XIII of the Companies Act.

However, since Shri Mathur was born on 11th September, 1936, he would complete his 73 years of age shortly on 11th September, 2009.Hence an approval from the members of the Company in the form of a Special Resolution would be essential in terms of Clause (C) of Part1 of Schedule XIII of the Companies Act, 1956, if the Company is to benefit from the continuous services of Shri Mathur for the abovementionedfive years period commencing from 1st November, 2009. Although a similar approval has already been accorded by the shareholders in theirmeeting held on 27th September, 2007, it would be advisable if the members accord their renewed approval again since Shri Mathur’sre-appointment as a Whole-time Director is now being considered by the members.

As far as his remuneration is concerned, the same was fixed by the shareholders in their last AGM held on 4th September, 2008 on the basisof enhanced Basic Salary of Rs. 5,75,000/- per month. Therefore, Shri Mathur’s re-appointment is proposed at the same Basic Salary till thetime it is further revised/ enhanced by the Remuneration Committee/Board of Directors and is then confirmed by the shareholders of theCompany.


PSL Notice 6-36.p65 6/20/2009, 5:00 PM15


Hence the principal terms and conditions of Shri M. M. Mathur’s re-appointment is as follows:-

a) Period of Agreement - from 31/10/2009 to 31/10/2014

b) Remuneration - Rs. 5,75,000/-p.m. (Basic Salary)

with authority to the Board / Remuneration Committee to re-fix his salary from time to time within the aforesaid period, keeping intoview his performance and the ceilings, if any, fixed by statute.


i) In addition to the salary, the appointee shall also be entitled to perquisites and allowances like accommodation (furnished orotherwise) or house rent allowance in lieu thereof, house maintenance allowance, together with the reimbursement of expenses orallowance for utilities such as gas, electricity, water, furnishing and repairs, medical reimbursement, club fees and leave travelconcession for himself and his family in accordance with rules of the Company, medical insurance and such other perquisites andallowances in accordance with the rules of the Company or as may be agreed to/by the Board of Directors and the Appointee, suchperquisites and allowances will however be subject to a maximum of 125% of his annual salary.


iii) Provision for use of the Company’s Car for Official duties and telephone at residence (incl. Payment for local calls and longdistance official calls) shall not be included in the computation of perquisites for the purpose of calculating the said ceiling.



Not withstanding anything to the contrary herein contained, wherein any financial year during the currency of the tenure of theAppointee, the Company has no profits or its profits are inadequate, the Company will pay remuneration by way of salary, perquisitesand allowances as per section 198, 269, 309, Schedule XIII of the Companies Act, 1956.




h) If at any time the appointee ceases to be a Whole-Time Director of the Company for any cause whatsoever, he shall not cease to beDirector of the Company.


j) The Appointee shall not be entitled to supplement his earning under the Agreements with any buying and selling commissions. He shallalso not become interested or otherwise concerned directly or through his spouse and/or minor children , if any, in any selling agencyof the Company, without the prior approval from the competent authority.






Other than Shri M. M. Mathur, Director, no other Director is concerned or interested in the Resolution.

This may be treated as an extract of the draft terms of appointment of Shri M. M. Mathur pursuant to Section 302 of the Act.

ITEM NO. 15 and 16 : RATIFICATION OF ISSUANCE OF CORPORATE GUARANTEE TO EXIM BANK AND ICICI BANK

PSL North America LLC, a Subsidiary and Joint Venture of the Company, was incorporated on 9th November, 2006 under the laws of State ofDelaware, USA. As the objective of incorporation of the said Company in US was to setting up a full fledged manufacturing facility tomanufacture Steel Pipes up to 24 meter length in US itself, in very short time of incorporation, adequate land was taken on long lease in theState of Mississippi, USA. Immediately thereafter erection of the state of the art Plant was achieved in a record time. As in order to enable the


PSL Notice 6-36.p65 6/20/2009, 5:00 PM16



Plant to be operational few machinery spares and tools from India were required, the Export Import Bank of India (EXIM Bank) has, at therequest of the said PSL North America LLC, agreed to sanction a Buyers Credit Facility aggregating to US$ 5.50 Million.

Since the Company was fortunate enough to bag a prestigious order from Florida Gas Company, even before erection of its Plant, theproduction had to be commenced at the earliest thereby necessitating the arrangement of adequate Working Capital.

Accordingly, in response to the request of the Company, the New York Branch of ICICI Bank sanctioned a Non-Fund Based Credit Facilitiesaggregating to US$ 50 Million on 8th January, 2009. However, the Company agreed to avail the subject facilities aggregating to onlyUS$ 30.00 Million.

As the said Subsidiary Company comparatively a new entity in US was establishing its first manufacturing facility, both the above lendersnamely EXIM Bank and ICICI Bank agreed to sanction the aforesaid Buyers Credit facility up to US$ 5.5 Million and Non Fund Based CreditFacilities up to US$ 50 Million respectively subject to our Company agreeing to issue Corporate Guarantees in favour of the said two Banksto Guarantee the due re-payment by PSL North America LLC.

As Section 372 A of the Companies Act, 1956 permits the Board of Directors of the Company to give such Corporate Guarantees providedthe Board’s decision is confirmed by way of a Resolution passed by the members of the Company in a general meeting of the Companywithin a period of twelve months from the decision of the Board to this effect.

Hence the Resolutions at Item No.15 & 16.

Other than Shri Ashok Punj, Shri Alok Punj and Shri G. S. Sauhta, who are Directors on the Board of PSL North America LLC, no otherDirector is concerned or interested in the said Item No.15 and 16.

ITEM NO. 17 : COMMENCEMENT OF NEW BUSINESS

Members are aware that for last many years the main activity of the Company is to manufacture Steel Pipes and to provide different kinds ofAnti Corrosive Treatments on the said Pipes depending upon the specific requirement of Company’s valued customers. In addition to the saidmain business, the Company also pursues such related businesses viz; manufacture of Inner and Outer Wrap, Extraction of Iron Ore,manufacture of anodes etc., which supplement the main business of supplying bare or coated pipes to the customers.

As in the process of manufacturing of pipes related to the execution of many large sized Contracts that the Company procures, few such pipesof varying diameters are left undelivered from the Company’s yards, which are not supplied to the customers, keeping in view the highquality standards that the Company follows. Since the Company is in the business of manufacturing Steel Pipes, an allied activity downstreem, is to use such Steel Pipes for construction of building, which your Company now proposes to undertake since such activities are wellspecified in Section III-C namely “Other Objects” of Company’s Memorandum of Association, an approval from the members of the Companyin the form of a Special Resolution is required in compliance of Section 149 (2A) of the Companies Act, 1956 for commencement of suchbusiness by the Company.

Hence the Resolution at Item No. 17.

None of the Directors are concerned or interested in the Resolution.

ITEM NO. 18 : INTER CORPORATE INVESTMENTS

With the continuous hike in the demand for Company’s product both within and outside the country, more production facilities are requiredto be established. These production set-ups are sometimes established by the Company in its own name while on the other they are requiredto be set up through Company’s Subsidiaries. Again, to be able to borrow on a larger scale for meeting the funds requirements of theCompany and its subsidiaries Corporate Guarantees for large sums in favour of the lending institutions are also required to be issued.

Section 372A of the Companies Act, 1956 regulating inter-corporate loans and investments permits the Company to make such loans andinvestments only up to certain limits specified statutorily. Any loan / investment beyond the said limit can be made only after obtaining a priorapproval to this effect from the shareholders.

The members of the Company in their last AGM held on 4th September, 2008 accorded their approval to the Board of Directors for makingsuch loans and investments up to an aggregate amount of Rs.1,000 Crores in other Bodies Corporate. Since there may be a need to exceedthe said limit, a new limit up to Rs. 1,500 Crores is considered adequate.

Hence the Resolution at Item No. 18.

None of the Directors are concerned or interested in the Resolution.

ITEM NO. 19 : FURTHER ISSUE OF CAPITAL

The Company proposes to raise funds to the tune of Rs. 300 Crores (Rupees Three Hundred Crores) in one or more tranches through a publicissue and/or Qualified Institutional Placement within the meaning of Chapter XIII-A of the SEBI Guidelines or through a combination of theforegoing as may be permitted under applicable law from time to time. The resolution contained in the Notice is regarding proposal tocreate, offer, issue and allot equity shares and/or such other securities as stated in the Special Resolution (the “Securities”) which seeks toempower the Board of Directors (hereinafter referred to as “Board” which term shall be deemed to include any Committee thereof, whetherconstituted or to be constituted to exercise its powers including the powers conferred by this resolution) to undertake such issue or offer ofSecurities.

PSL Notice 6-36.p65 6/20/2009, 5:00 PM17


1. Object of the issue

The process arising out of issuance of the securities are proposed to be utilized for:-

(1) Procurement of capacity enhancing equipments, balancing equipments and quality enhancing equipments for various plants ofthe Companies strategically located in Chennai, Varsana, Vizag, Mahudi etc. so as to prepare them for production of high pressuregas pipes.

(2) Major capacity expansion at Vizag Plant.

(3) Additional investment in Company’s overseas subsidiaries to facilitate green field and expansion projects of these subsidiaries.

2. Pricing

In case of an issue of the Securities to Qualified Institutional Buyers pursuant to Chapter XIIIA of the SEBI Guidelines, the issue priceof Securities shall be at a price, being not less than the price calculated in accordance with Chapter XIII-A of SEBI (DIP) Guidelines asmay be amended from time to time and the Relevant Date in this regard shall be the date on which the Board decides to open the issueof securities or such other time as may be allowed by SEBI Guidelines from time to time.

In case of a Qualified Institutional Placement pursuant to Chapter XIIIA of the SEBI Guidelines, the allotment of securities shall becompleted within twelve months from the date of passing of this resolution.

In case of issue of FCCBs/ADRs/GDRs the issue price shall be at a price, being not less than the price calculated in accordance withapplicable law including the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipts Mechanism)Scheme, 1993, as may be amended from time to time.

3. Terms and Conditions

The detailed terms and conditions for the offer will be determined by the Board in consultation with Advisors, Lead Manager/BookRunners, Underwriters and such other authority or authorities as may be required to be consulted by the Company considering theprevailing market conditions and other relevant factors.

The issue/ allotment/ conversion would be subject to the availability of regulatory approvals, if any. The conversion of securities, held byforeign investors, into shares would be subject to the applicable foreign investment limits.

The Special Resolution seeks to empower the Board and/or Committee authorised by the Board, to issue Securities in one or more tranche ortranches, at such time / times, and to such person(s) as the Board may in its absolute discretion deem fit.

Section 81(1A) of the Companies Act, 1956 and the relevant clause of the Listing Agreement with the stock exchanges where the EquityShares of the Company are listed, provides, inter alia, that when it is proposed to increase the subscribed capital of a company by allotmentof further shares, such further shares may be offered to persons other than the existing shareholders of such company if the shareholders passa special resolution to that effect. Since the Special Resolution proposed in the Notice results in the issue of shares of the Company to personsother than the members of the Company, consent of the shareholders is being sought pursuant to the provisions of Section 81(1A) and otherapplicable provisions of the Companies Act, 1956 and the Listing Agreement.

The Special Resolution, if passed, will have the effect of allowing the Board and/or the Committee authorised by the Board to issue and allotSecurities to the investors who may or may not be the existing shareholders of the Company and the Board and/or the Committee authorisedby the Board will have the power to decide the date of opening of the Issue.

The Directors of the Company may be deemed to be concerned or interested in the above resolution only to the extent of shares held by themin the Company.

The Board of Directors recommend the special resolution for your approval.

By Order of the Board of Directors ofRegd. Office :- PSL LIMITEDKachigam, DamanUnion Territory of Sd/-Daman & Diu - 396 210 (G. GEHANI)

Director &Dated : 10th June, 2009 Company Secretary


PSL Notice 6-36.p65 6/20/2009, 5:00 PM18


Additional Information

Particulars G.S. Sauhta

Date of Birth

Qualification

Expertise in specificfunctional area

Directorship held inother companies

Brief Resume

30th March 1943

DME

General Management & Production

PSL Corrosion Control Services Ltd.BHI Ltd.

Shri G.S. Sauhta, after completing his Diploma in Mechanical Engineering from Aligarh Muslim University worked indifferent Government positions for seven years before considering a shift to Private Sector. He joined Punj Group ofCompanies way back in 1972. Being a technocrat he has handled various projects at different locations as TechnicalHead and Director, Projects. Shri Sauhta was inducted in the Company’s Board in 1989 and was subsequentlyappointed as Whole Time Director in April 1993. Ever since his joining the Company he has been at the helm ofsetting up of Five Pipe Coating Plants, Five Rebar Coating Plants and Nine Spiral Pipes Manufacturing Plants for theCompany at strategic locations including USA.

Particulars D.N. Sehgal

Date of Birth

Qualification



Brief Resume

1st January, 1947

B.Tech.- Prodn. Engg. (Honrs.), M.tech- Industrial Engg.

General Management & Marketing

Sehdev Projects Pvt. Ltd.PSL FZE

Shri D.N. Sehgal is a qualified Production Engineer having completed his Post Graduation Programme in IndustrialManagement & Engineering with distinction. Shri Sehgal has spent three decades in core sector of Indian Economy –eg. Marketing & Project Management of large value complex industrial projects in Refinery, Petrochemical, Metallurgical& other onshore & offshore pipeline projects. Prior to joining PSL about 2 decades ago he has held important portfoliosin senior capacities in Dodsal Pvt. Ltd., BST Engineering Services Ltd., Dynacraft Machine Co. Ltd. and Mukund IronSteel Works. He joined the Company’s Board on September, 1994 and is directly responsible for execution of variousimportant projects of the Company.

ADDITIONAL INFORMATION

Particulars Harry H. Shourie

Date of Birth

Qualification


Directorship held inother Companies/Proprietorship in afirm

Brief Resume

15th January, 1944

Masters in International Relations, MBA

Finance Management

Tri Nexus Advisory, CA, USA (Proprietor)

Shri Harry H. Shourie holds Masters degree in International Relations from University of Chicago in addition to anMBA from East Texas State University and a Bachelor Degree from Delhi University. He is primarily a Financeprofessional having specialization in trade finance. Apart from being advisor for many export projects of Unitedtechnologies, Hughes aircraft, Northrop aviation, Honeywell, Lockheed, Boeing, HP etc., he has also worked ondifferent projects like south Korean pipeline export, Greenfields telecom in Philippines and also in Nigeria. He hasalso handled a major project for Union Bank of California.

Having considered Shri Shourie’s experience in diverse fields such as Finance & International Business, the Board ofDirectors appointed him as Additional Director on 15th December 2005 and since then Shri Shourie is rendering veryuseful advice in the Board deliberations.

PSL Notice 6-36.p65 6/20/2009, 5:01 PM19


Additional Information

ADDITIONAL INFORMATION

Particulars R.K. Bahri

Date of Birth

Qualification



Brief Resume

10th September, 1942

B.E. Mech.

General Management & Production

PSL Corrosion Control Services Ltd.Eurocoustic Products Ltd.

Shri R. K. Bahri, primarily a qualified Mechanical Engineer, had joined the Company as a Director in 1989 and laterelevated to the position of Whole Time Director in April 1994. Prior to his induction, he had spent over two decadeswith M/s Fedders Lloyd Corporation in various senior positions. Shri Bahri introduced Fusion Bonded Epoxy Coatingfor Reinforced Steel Bars for the first time in India. He is also serving the Indian Institute of Interior Designs since itsinception in various capacities and is the Trustee of NACE International India Section, Ex-Chairman of the Society forAdvancement of Electrochemical Science & Technology (SAEST), Bombay Chapter.

Particulars Y.P. Punj

Date of Birth

Qualification



Brief Resume

27th November,1921

B.A.

General Management

PSL Corrosion Control Services Ltd.Eurocoustic Products LimitedPunj International Pvt. Ltd.Punj Investment Pvt. Ltd.Broken Hills International Pvt. Ltd.BHI Limited

Shri Y.P. Punj has had a glorious past by virtue of having been associated with the corporate world for more than 5decades now. Having held senior position including the Chairmanship of many of the group companies he has to hiscredit very rich experience of almost all the important division of manufacturing units. He has guided the Board ofDirectors of the Company and the entire management team for years together as a Chairman since inception and tillOctober, 2008 when he relinquished his charge due to health reasons. However the Company continues to avail hisable advice as one of the senior most Director on the Board.

PSL Notice 6-36.p65 6/20/2009, 5:01 PM20


Directors’ Report

ToThe Members ofPSL Limited

Your Directors have pleasure in presenting this Twenty first AnnualReport of the Company together with the Audited Statements ofAccounts for the Financial Year ended on 31st March 2009.

FINANCIAL RESULTS

The summary of the operating results of the company on standalonebasis for the said year and appropriation of divisible profits is givenbelow: -

The Financial Highlights for the year under review are as follows: -

Current Year Previous Year

(Rs./Crores) (Rs./Crores)

Sales 3487.96 2218.85Other Income 61.99 42.92Total Income 3549.95 2261.77

Add/Less : Change in Stock 143.33 -54.48Total 3693.28 2207.29

Net Profit before depreciation andinterest was 284.52 233.21After deducting interest anddepreciation of 157.79 109.05The profit for the year before TaxationProvisions amounted to 126.73 124.16From which is deducted a TaxationProvision of 40.80 39.39Leaving thereby a Net Profit of 85.93 84.77Which your directors haverecommended to beappropriated as follows :-a) Transfer to General Reserves 10.00 10.00b) Dividend Payment

(i) Interim 10.63 10.63Add: Tax 1.81 12.44 1.81 12.44

(ii) Final (Proposed) 10.65 10.65Add:Tax (proposed) 1.81 12.46 24.90 1.81 12.46 24.89

c) Prior year payments -1.91 32.99 2.56 37.46Thereby leaving a balance of 52.95 47.31

for carrying over to next year’s account.

PERFORMANCE HIGHLIGHTS

A) FOR THE COMPANY ON STANDALONE BASIS

1. DURING THE YEAR UNDER REVIEW

Company’s sales registered an increase from Rs.2219 Croresin the previous year to Rs.3488 Crores during the year underreview, thereby registering an impressive growth of 57.2%.The net profit before depreciation and interest rose fromRs. 233.21 Crores in the previous year to Rs. 284.52 Croresduring the year under review, thereby recording a growthof 22%. The profit before taxation provisions rose from Rs.124.16 Crores in the previous year to Rs.126.73 Croresduring the year under review, evidencing a growth of only2.07% due to global economic slow down coupled withliquidity crunch. Volatility in steel prices in particular andof crude oil in general partially resulted in increase in inputcosts but your Company was able to succeed in containingits impact partially, through adequate measures introducedfrom time to time. Your company is also focusing its effortsto reduce costs in all spheres of activities. It is hoped thatthere shall not be any further significant increase in theinput cost during the year 2010, due to the ongoingeconomic slowdown.

2. FOR THE YEAR UNDER REVIEW

a) The general reserves account is proposed to be creditedwith an amount of Rs.10.00 Crores in the year underreview.

b) Since in addition to an Interim Dividend of Rs.2.50per share paid by the Company in February, 2009, theBoard has recommended payment of Rs.2.50 per shareas final dividend also, thereby aggregating to a totaldividend of Rs.5/- per share, the Company hasmaintained a constant dividend payout ratio of 50%as in the last few years.

B) CONSOLIDATED PERFORMANCE

The consolidated sales of the Company and its subsidiaries wasrecorded at Rs.3559.93 Crores as against Rs. 2248.29 Crores,which represented an impressive 58 % hike.

C) FOR THE SUBSIDIARY COMPANIES

Your Company now has few Subsidiaries and step downsubsidiaries namely :-

1. PSL Corrosion Control Services Limited2. Pipeline Systems Limited3. PSL FZE –UAE and4. PSL USA INC.

in addition to PSL North America LLC, which is a Joint VentureCompany in which Company has substantial stake through itsUS Subsidiary.

1. PSL CORROSION CONTROL SERVICES LIMITED

This Company is a wholly owned subsidiary of theCompany, it is presently engaged in Rebar Coating andproviding Anti-corrosive treatment. The Company’s Salesincluding other income, which was Rs. 25.04 Crores inthe previous year got enhanced to Rs.40.44 Crores therebyconstituting a 61.50% enhancement. The profit after taxrose from Rs.3.55 Crores in the previous year to Rs.6.14 Croresin the current year representing an impressive 72.9% growth.

In order to focus on the Company’s main activities of PipeManufacturing and providing Anti-corrosive Coating, yourBoard has accorded its in principle approval to disposeoff, subject to an approval from Members of the Company(which is being sought through Postal Ballot), its RebarPlants at Chennai and Vizag to its said Subsidiary.

2. PIPELINE SYSTEMS LIMITED & PSL FZE -UAE

This Company was incorporated in May, 2006 at Mauritiusas a wholly owned subsidiary Company of your Company.Subsequently, another Company namely PSL FZE wasestablished at Sharjah in UAE as a wholly owned subsidiaryof Pipeline Systems Limited.

Since the Plant established at Sharjah by the said SubsidiaryCompany namely PSL FZE became fully functional duringthe year under review a total income of US$ 8.4 Million wasrecorded as against US$ 2.5 Million recorded in the previousyear thereby evidencing 3.36 times growth. The net profittransferred to Balance Sheet after taking into account variousexpenditures including depreciation (provided for in theaccounts in spite of UAE laws not prescribing for) wasregistered at US$ 3,90,000 against US$ 56,000 recorded inthe previous year thereby registering a seven times growth.

During the year under review, your Company contributedan additional amount of US$ 40.25 Lacs to the equity capitalof the said Company both by way of cash remittances aswell as by equipment supplies. Thus the aggregate amountof investments made by your Company in the said Companyamounted to US$ 244.61 lacs as on 31st March, 2009.

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Directors’ Report

3. PSL USA INC. & PSL NORTH AMERICA LLC

PSL USA INC was incorporated on 4th December, 2006under laws of State of Delaware, USA primarily to bagcontracts for manufacture of pipes, keeping in view theupsurge in the pipe laying activity in North America.

This Company holds 78% shareholding in a Joint VentureCompany (also incorporated under the laws of State ofDelaware) 12% held by HSAW Solutions LLC and thebalance 10% by Lloyd Systems Inc. Your Company hasinvested a total amount of US$ 20 Million towards theequity capital of PSL USA INC., which in turn has investedadequately in the Joint Venture Company as a result ofwhich the state-of-the-art Pipe manufacturing Plant hasbeen set up in the Hancock County, Mississippi, USA. TheCompany was fortunate enough since a land piecemeasuring 155 acres was leased to it for a term of 99 yearsat a meager annual rent of US$ 1 in the Port BienvilleIndustrial Park in Hancock County, Mississippi.

While even Company’s Plant was being set up, the firstorder from Florida Gas Company valuing US$ 418 Millionwas bagged by the Company with specified time limits. Anet income of US$ 1,72,000 was recorded after totaladjustments of US$ 4.1 Million on various accounts.

FCCB BUYBACK

The Company had issued 40 Million US Dollars worth FCCB’s inSeptember, 2005 . In exercise of the option of conversion by thesaid bondholders FCCB’s aggregating to US$ 37.50 Million havebeen converted by the Company, thereby leaving outstanding Bondsworth US $ 2.50 Million. As the Reserve Bank of India vide itscircular no RBI/2008-09/317 dated 8th December,2008 has permittedthe buyback of such outstanding FCCBs through automatic andapproval route, the Board of Directors approved the buyback ofUS $ 2.50 million FCCB in accordance and in compliance of thesaid circular of Reserve Bank of India. The buy back is proposed tobe affected shortly after due completion of the prescribed procedure.

OPERATIONAL ACHIEVEMENTS

The Company has successfully completed, within the scheduledtime frame, several major projects entrusted to it by its clients. It isimportant to bear in mind that many national projects, in particular,mega projects, valued in thousands of crores, often get delayed inexecution due to avoidable and unavoidable reasons. Not only isthe general public inconvenienced, but huge cost over-runs occurand these are eventually borne by public exchequer. Your Companyprides itself in its track record of timely completion of mega projects,thereby becoming an “enabler” for turnkey contractors and pipelineproject owners, enabling them to complete these complex projectson schedule. A list of major projects, either recently completed ontime or under execution within customers’ time schedule are givenhere under :-

Project Aggregate Value

1. GAIL’s Vijaipur – Dadri Bawana Pipeline Rs.1928 CroresProject

2. HPCL-Mittal’s Mundra Bhatinda Crude Oil Rs.917 CroresCarrying Line Project

3. L & T’s Barmer Lift Water Supply Project Rs.308 CroresI & II

4. IOCL’s First Gas Pipeline Project from Rs.165 CroresDadri to Panipat

5. Offshore Pipeline related Services from Rs.175 CroresM/s. Allseas and NPCC

6. BPCL’s Bina – Kota Pipeline Project Rs.100 Crores

Several of these were reported under this Report last year as “Baggingof Orders” by your Company.

The ability to plan and execute timely completion of projectsentrusted to it, is the key reason why your Company has beenreceiving repeated orders from several of its customers.

1. PROGRESS ON OVERSEAS FRONT

a) NORTH AMERICA PROJECT

In their Report last year, your Directors had appraised youof the progress of construction of your Company’s projectin the U.S. The members of the Board are now pleased toinform that the unit known as “PSL NORTH AMERICA LLC”has not only commenced operation and achieved APICertification, but in a short span of four months thereof itsdaily production numbers are approaching a level of 80%of the units rated capacity. This rapid ramp-up has onceagain been achieved due to the close coordination betweenyour Company’s equipment manufacturing and supplydivision and its operating staff, working in close cooperationto ensure a smooth transition from a start up to a matureoperating facility.

The U.S. Company has a firm order book extending wellinto 2010.

b) UAE PROJECT

Your Company’s Subsidiary PSL-FZE located in HamriyahFree Trade Zone in Sharjah is also operating satisfactorilyand in particular has achieved several milestones byobtaining vendor registration approval from keyinternational offshore Oil and Gas Operators, enabling itto participate in major Middle East offshore projects suchas “The Dolphin Project” a major sub-sea Gas Pipelineconnecting several countries within the Persian Gulf.

2. DOMESTIC PROGRESS

All the Company’s pipe manufacturing facilities have undergone amajor upgradation program, enabling each pipe mill to processraw material up to 25 mm wall thickness in a quality suitable forAPI X-70 Grade Steel. The purpose of this upgradation is to prepareeach regional facility, which already enjoys API Certification, tomanufacture and supply large diameter gas pipe requirements tocater to the “Gas Highway” program under implementation. Suchregional supply will slash transportation cost for such pipes to aminimum thereby providing savings in cost to projectimplementation agencies such as GAIL and others entrusted withconstructing this Gas Grid.

All in all your Company expects the current Financial Year to providesustained growth opportunities, despite the prevailing economicslow down in other sectors of the economy.

APPROPRIATIONS

DIVIDEND

Adhering to its earlier practice, your Company declared an interimdividend of Rs.2.50 per Equity Share in February, 2009.

Taking into account the financial results of the year under review,your Directors are now pleased to recommend a final dividend ofRs. 2.50 per equity share of Rs. 10/- each on all fully paid up equityshares in addition to the Interim Dividend of Rs.2.50 per share paidearlier. Thus the total dividend for the Financial Year 2008-09 wouldwork out to Rs. 5.00 per equity share. With this your Companywould complete fourteenth year of successive payment of dividendever since its Public Issue in February, 1995.

PSL Notice 6-36.p65 6/20/2009, 5:01 PM22


Directors’ Report

TRANSFER TO RESERVES

The Board has recommended a transfer of Rs.10 Crores to theGeneral Reserves and an amount of Rs.52.95 Crores is retained inthe PSL account.

ACCOUNTS OF THE SUBSIDIARY COMPANIES

In compliance of Section 212 of the Company’s Act 1956, the dulyAudited Annual Accounts of the following Subsidiaries :-

1. PSL Corrosion Control Services Limited.

2. Pipeline Systems Limited, Mauritius consolidated with itsSubsidiary PSL FZE, UAE.

3. PSL USA INC, USA consolidated with PSL North America LLC.

for the Financial Year ended on 31st March, 2009 are includedin this Annual Report.

STATUTORY COMPLIANCES

1. The Company Secretary as Compliance Officer ensures timelycompliance of SEBI regulations, applicable law, rules andregulations and provisions of Listing Agreement. He alsoresponds to different type of grievances and queries ofshareholders including the ones related to dividend.

2 Although the provision contained in Section 219 of theCompanies Act, 1956, as amended, permits the Company tosend an abridged version of Company’s Balance Sheet and Profit& Loss Account etc., your Company in order to comply withClause 32 of the Listing Agreement executed by it with differentStock Exchanges is sending herewith the full version of theaforesaid statements along with various documents which arerequired to be attached with them, to all the Shareholders ofthe Company.

3. In compliance of Clause 32 of the Listing Agreement executedby the Company with the different Stock Exchanges the CashFlow Statement in the format prescribed by SEBI is annexed tothis report.

4. In compliance of Clause 32 of the Listing Agreement andAccounting Standard AS-21 on consolidated financial statementyour directors have pleasure in attaching the ConsolidatedFinancial Statements, which forms part of the Annual Reportand Accounts.

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

6. In accordance with the prescribed statutory obligation,Secretarial Audit to reconcile the total admitted capital withthe two depositories in the country namely National SecuritiesDepository Limited (NSDL) & Central Depository ServicesLimited (CDSL) and the total issued and listed capital is doneon quarterly basis. Audit Reports furnished to this effect by aPracticing Company Secretary appointed for the purpose havebeen periodically submitted to the various Stock Exchangeswith which the Company’s shares are listed.

INTERNAL CONTROL AND ADEQUACY

The company has a proper and adequate system of Internal controlto ensure that all assets are safeguarded and protected against lossesfrom unauthorised use or disposition and transactions are authorised,recorded and reported correctly. The internal control is designedto ensure that financial and other records are reliable for timelypreparing Financial Statements.

The Internal control system is supplemented by an extensive auditconducted by well structured Internal Audit Department of theCompany. The said audit is by and large conducted on quarterlybasis to review the adequacy and effectiveness of internal controlsand to suggest improvement for strengthening them. Proper reviewsare carried out to ensure follow-up on the audit observations.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSIONAND ANALYSIS REPORT

As required by Clause 49 of the Listing Agreement executed withNational and Bombay Stock Exchanges, a separate ManagementDiscussion and Analysis Report, Corporate Governance Report andAuditors Certificate certifying compliance of conditions of CorporateGovernance are made part of the Annual Report.

BOARD COMMITTEES

For assisting Board of Directors in discharging its responsibilities invarious fields effectively and efficiently following five standingCommittees have been constituted by the Board :-

1. Audit Committee2. Committee of Directors3. Remuneration Committee4. Shareholders’/ Investors’ Grievance Committees.5. Share Transfer Committee

In addition, Committees such as “Bond Conversion Committee”etc. are constituted by the Board from time to time for specifiedpurpose and limited tenure.

These Committees in their meetings held during the year take certaindecisions in accordance with their respective mandates. All suchdecisions are thereafter ratified by the Board.

DIRECTORS

Your Board is ideal mix of Executive Directors and Non-executiveDirectors including six Independent Directors. Excellentprofessionals having expertise in diversified fields includingProduction, Marketing, Engineering, Legal, Insurance and Bankingcontribute very effectively to steer the Company towardsachievement of its high value goal in an optimum manner in thecompetitive field that our Company is in.

Shri Harry H. Shourie , Shri D.N.Sehgal , Shri G.S Sauhta, Shri R.KBahri and Shri.Y.P. Punj , Directors of the Company have beenrendering very useful services to the Company by way of theirrespective contributions as Directors on the Board . In accordancewith Section 256 of the Companies Act, 1956 and Article 91 of theCompany’s Articles of Association, they retire by rotation at theensuing Annual General Meeting but being eligible offer themselvesfor re-appointment. In order to provide more details about them tothe members their brief resumes are also included in the tableannexed to the notice.

Since in accordance with the relevant provisions of the CompaniesAct, 1956 the Whole-time Director of a Company are appointedby members for a maximum period of five years at one time. Thelast tenure of Shri. R. K. Bahri expired on 31st March, 2009 and thatof Shri. M. M. Mathur is expiring on 31st October, 2009. Consideringthe immense contribution of these two competent Directors, theBoard has requested them to continue rendering their useful servicessubject to approval of their re-appointment for five more years ineach case by the members of the Company in their ensuing AnnualGeneral Meeting.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) in the Companies Act, 1956 your

PSL Notice 6-36.p65 6/20/2009, 5:01 PM23


Directors’ Report

Directors’ Report that:

- In the preparation of annual accounts of the year under reviewthe applicable accounting standards were followed

- The accounting policies in consultation with statutory auditorare applied consistently to give a true and fair view of the stateof affairs of the company at the end of Financial Year underreview and Profit & Loss Account of the period under report.

- Proper and sufficient care has been taken for maintenance ofadequate accounting records and for safeguarding the assets ofthe Company for preventing and detecting fraud and otherirregularities.

- The Annual Accounts have been prepared on a going concernbasis.

AUDITORS

The Auditors, M/s. Suresh C. Mathur & Co., Chartered Accountantsretire at the ensuing Annual General Meeting, they have offeredthemselves for re-appointment for which they are eligible. Theyhave, pursuant to Section 224 (1B) of the Companies Act 1956,furnished a Certificate regarding their said eligibility.

AUDITORS’ REPORT

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

CONSERVATION OF ENERGY, TECHNOLOGY AND FOREIGNEXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under sub section (1) (e) of Section217 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 foreignexchange earnings and outgo is given in the Annexure formingpart of this Report.

PARTICULARS OF EMPLOYEES

In compliance of Section 219(1)(b)(iv) of the Companies Act, 1956this report is being sent to the shareholders of the Company withoutcontaining therein the information in accordance with Sub-section2A of Section 217 of the Companies Act, 1956 read with Companies(Particulars of Employees) Rules, 1975. However, since the saidparticulars are made available at the Registered Office of theCompany, the members desirous of obtaining such particulars maywrite to the “Director & Company Secretary” of the Company at itsRegistered Office.

ACKNOWLEDGEMENTS

Your Directors thank the Customers, Suppliers, Dealers, GovernmentAuthorities, Financial Institutions, Foreign Institutional Investors,Bankers, Consultants, Solicitors, Auditors & Shareholders for theircontinued support during the year. Your directors place on recordtheir appreciation for the hard work, cooperation and support bythe employees at all levels.

For and on behalf of the Board of DirectorsPSL Limited

sd/- sd/-Place : Mumbai (ALOK PUNJ) (ASHOK PUNJ)Date : 10th June, 2009 Director Managing Director

PSL Notice 6-36.p65 6/20/2009, 5:01 PM24


ANNEXURE TO THE DIRECTORS’ REPORT

Information pursuant to the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988

2008-2009 2007-20081. CONSERVATION OF ENERGY

A) Power and Fuel Consumption1. Electricitya) Purchased

Units (M.KWH) 38,223.716 31,194.044Total Amount (Rs.Crores)# 23.74 17.86Average Rate/Unit (Rs. KWH) 6.21 5.73

b) Own Generationi) Through Diesel Generator

Units (M.KWH) 12,899.169 19,107.671Units per liter of diesel oil (KWH) ## 2.72 3.32Average Cost/Unit (Rs./KWH) 13.41 10.26

ii) Through Steam Turbine/GeneratorUnits (M.KWH) NIL NILAverage Cost/Unit (Rs.KWH) NIL NIL

# Excludes electricity duty paid on purchases## Previous year’s figure modified

B) Technology AbsorptionsThe Company is doing research and development for improvement in their items of manufacturing.Specific areas in which R & D is carried out by the Company:-

1. Improvement of product quality and process efficiency2. Optimising production efficiency3. Cost deduction and economical effcient production4. Pollution Control - to have pollution free enviornment in and around factory areas.5. Environmental Care6. Optimisation of process parameters.

II FOREIGN EXCHANGE EARNINGS AND OUTGORs. in Crores Rs. in Crores

Earnings 71.52 55.06Outgo on Royalty NIL NIL

For and on behalf of the Board of Directorsof PSL Limited

sd/- sd/-Place : Mumbai (ALOK PUNJ) (ASHOK PUNJ)Date : 10th June, 2009 Director Managing Director

Directors’ Report

PSL Notice 6-36.p65 6/20/2009, 5:01 PM25


This report on Corporate Governance forms part of Directors' Report.

1) PHILOSOPHY OF THE COMPANY ON CORPORATEGOVERNANCE

Your Company’s philosophy on Corporate Governance is itscommitment to values and ethical business conduct andcommitment to maximize shareholders value on a continuous basiswhile looking after the welfare of all the other stakeholders. Its highstandards of Corporate Governance provides disclosure of timelyand accurate information and effective monitoring of the company’sperformance. PSL has a well defined policy frame work, the broadterms of the policy are :-

a) to ensure transparency in all its operations which impliesthe maintenance of high degree of disclosure levels withoutcompromising in any way in compliance of law andregulations and the interest of the Company and itsshareholders.

b) to comply with the laws in all the countries in which it operate

c) to maintain high quality of products on continuous basis.

d) to ensure timely and accurate disclosure of all materialoperational and financial information to the stakeholders.

e) to satisfy the spirit of the law and not just the letter of the Law.

f) to ensure appropriate systems and processes for internalcontrols on all operations, risk management and financialreporting.

g) to ensure systematic flow of information to the members of theBoard to enable them to effectively discharge their fiduciaryduties.

h) to focus on ethical business conduct by the management andemployees.

i) to focus on training and development of employees andworkers so as to achieve the overall corporate objectives,while ensuring employee integration across nationalboundaries.

j) to ensure that the Company follows globally recognizedCorporate governance practices.

k) to ensure the promotion of ethical values and setting upexemplary standards of ethical behavior in our conduct.

2) BOARD OF DIRECTORS

Composition

The Company’s policy is to have an appropriate mix of Executiveand Non-executive Independent Directors to maintain theindependence of the Board and to separate the Board functionsof governance and management. The Company believes that anactive, well informed and independent Board of Directors is vitalto achieve the apex standard of Corporate governance . The Boardof directors of the company comprises of an optimal combinationof executive, non executive and independent directors andpresently comprises of Eight Whole-Time Directors and Eight Non-Executive Directors of which Six are Independent Directors. Thecomposition of the Board of directors is in accordance with therequirements of the revised clause 49 of the Listing Agreement,the Companies Act, 1956 and the Articles of Association of theCompany.

COMPOSITION OF BOARD AND DIRECTORSHIPS (INCLUDINGMEMBERSHIP & CHAIRMANSHIP)

Sr. Name of the Category of No. of positions held

No. Directors Directors Board Committee

Memberships# Memberships##

1. Y. P. Punj Non Executive 7 2

Chairman*

2. Ashok Punj Managing Director 13 2

3. Alok Punj Non-Executive 7 5

4. G.S. Sauhta Executive 3 Nil

5. R. K. Bahri Executive 3 Nil

6. M.M. Mathur Executive 1 2

7. D. N. Sehgal Executive 3 Nil

8. Prakash V. Apte Independent & 3 2

Non-Executive

9. N. C. Sharma Independent & 2 4

Non-Executive

10. Ashok Sharma Independent & 2 2

Non-Executive

11. Harry H. Shourie Independent & 1 1

Non-Executive

12. S. P. Bhatia Executive 1 2

13. C. K. Goel Executive 1 Nil

14. G. Gehani Executive 1 3**

15. Paresh J. Shah Independent & 1 2***

Non-Executive

16. Harsh Pateria Independent & 2 2****

Non-Executive

* Since resigned from Chairmanship on 17.10.2008.

** Appointed as member in Audit Committee in the Board meeting held on

28th May, 2009.

***Appointed as member in Remuneration Committee in the Board meeting

held on 28th May, 2009.

**** Appointed as member in Audit and Remuneration Committee in the

Board meeting held on 28th May, 2009.# This includes Directorship held in PSL Limited and other Public Limited

Companies, Subsidiaries of Public Limited Companies, Private Limited

Companies, Foreign Companies, Companies under Section 25 of the

Companies Act, 1956.## This include Committee Membership held in PSL Limited as well as in

other Companies.

The day-to-day management of the Company is controlled byManaging Director subject to the supervision and control of Boardof Directors. He is assisted by seven Whole-time Directors andother heads of Divisions/ Departments.

The Directors are experts in the diverse fields of manufacturing,law, accounting and business strategy and are able to effectivelycontribute in the policy making activity of the Board. Similarly, theIndependent Directors are able to ensure that the stakes of the saidpolicy making is not detrimental to the interest of variousstakeholders of the Company.

None of the Directors is a member of more than 10 Board levelcommittees of public company or is a Chairman of more than 5such committees across all companies in which they are Directors.

ATTENDANCE AT MEETINGSThe Board meets at least once a quarter to review the FinancialResults and discuss other matters. During the last year, the Board ofDirectors met five times i.e., on 24th June, 2008, 15th July, 2008,24th October, 2008, 30th January, 2009 & 02nd March,2009. Thegap between any two Board Meetings did not exceed four monthsexcept for the last quarter of Financial Year 2008-09 in which theCompany opted for submission of Audited Financial Results for the

Corporate Governance

PSL Notice 6-36.p65 6/20/2009, 5:01 PM26


entire Financial Year pursuant to Clause 41 (1) (d) of the ListingAgreement. Attendance of each Director at the five Board meetingsheld in last one year and the last Annual General Meeting held on04th September, 2008 was as follows :-

Bahri, Shri. G. S. Sauhta & Shri. D. N. Sehgal since 1st October,2008 is in accordance with an approval granted by the shareholdersof the Company in their Annual General Meeting held on 04th

September, 2008. The remaining three Executive Directors namelyShri. S. P. Bhatia, Shri. G. Gehani & Shri. C. K. Goel are beingpresently paid a Basic Salary of Rs.1,65,000/- per month inaccordance with an approval granted by the shareholders in theAnnual General Meeting held on 27th September, 2007. However,their revised Basic Salary of Rs.2,50,000/- per month w.e.f. 1st

October, 2009 duly recommended by the Remuneration Committeehas been confirmed by the Board in its meeting held on 28th May,2009. The said revision will however come into effect only afterthe necessary approval is accorded by the Members in AnnualGeneral Meeting, the notice for which does contain such business.Each of the said Directors are entitled to usual perquisites andallowances, some of which are directly linked to their BasicSalaries.

Remuneration paid to different Executive Directors is summarizedbelow :-

(in Rs.)

Sr. Name Salary Perquisites Retirement Commission Total

No. (Basic +HRA)

1. Sh. Ashok Punj 9,760,000 - 702,000 NIL 10,462,000

2. Sh. G. S. Sauhta 9,760,000 440,000 1,579,500 NIL 11,779,500

3. Sh. R. K. Bahri 9,760,000 800,000 1,579,500 NIL 12,139,500

4. Sh. M. M. Mathur 9,760,000 465,000 1,579,500 NIL 11,804,500

5. Sh. D. N. Sehgal 9,760,000 440,000 1,579,500 NIL 11,779,500

6. Sh. S.P. Bhatia 3,305,500 233,240 5,34,600 NIL 4,073,340

7. Sh C.K. Goel 2,309,500 627,000 5,34,600 NIL 3,471,100

8. Sh. G. Gehani 3,311,000 330,000 5,34,600 NIL 4,175,600

Total 57,726,000 3,335,240 8,623,800 NIL 69,685,040

3. BOARD COMMITTEES

A) AUDIT COMMITTEE

(i) Terms of reference

The Audit Committee has been constituted in accordancewith Section 292A of the Companies Act, 1956 and theguidelines set out in the Listing Agreement executed by theCompany with the Stock Exchanges. The Audit Committeecomprises of Independent Directors all being financiallyliterate. The Company Secretary acts as Member Secretaryto the Committee. The Statutory Auditors, Chief Officer &Chief Finance Officer – Audit & Accounts are invariablyinvited to attend the meeting. The recommendations of AuditCommittee are accepted and implemented by the Board.The role and terms of reference of Audit Committee coverareas mentioned under Clause 49 of the Listing Agreementwith the Stock Exchanges read with provisions to this effectcontained in Section 292A of the Companies Act, 1956 asamended from time to time besides other terms as may bereferred by the Board of Directors from time to time.

The term of reference for the Audit Committee as laid downby the Board include the following:

a) Supervision of the Company’s financial reporting processand the disclosure of its financial information to ensurethat the financial statement is correct, sufficient andcredible.

b) Reviewing with the management the Quarterly andAnnual Financial Statements before submission to theBoard for approval with particular reference to :-

i) Any changes in accounting policies and practices.

ii) Major accounting entries based on exercise ofjudgment by management.


P = Present

LOA = Leave of Absence

NR = Statutorily Not Required to attend

REMUNERATION OF DIRECTORS

NON-EXECUTIVE DIRECTORS

Independent Directors on the Board of PSL are Non ExecutiveDirectors who :-

- apart from receiving Director’s Remuneration (Sitting fee), donot have any material pecuniary relationship or transaction withthe Company, its Promoters, its Directors, its Senior Managementor its Subsidiaries and Associates.

- are not related to Promoters or Senior Management Personnel.

- have not been Executives of the Company in the immediatelypreceding three Financial Years.

The Board has eight Non-Executive Directors of which six areIndependent Directors.

The remuneration (in the form of Sitting Fees) paid to these Non-Executive Directors during the year is as follows :-

Sr. No. Name of Directors (in Rs.)

1 Sh. Y. P. Punj 40,000

2 Sh. Alok Punj 100,000

3 Sh. Prakash V. Apte 100,000

4 Sh. N. C. Sharma 100,000

5 Sh. Ashok Sharma 60,000

6 Sh. Harry H. Shourie 60,000

7 Sh. Paresh J. Shah 100,000

8 Sh. Harsh Pateria 80,000

Total 6,40,000

The Non-Executive Independent Directors are not holding anyshares in the capital of the Company.

EXECUTIVE DIRECTORS

Each of the eight Executive Directors of the Company have beenappointed by the shareholders of the Company. Such appointmentsare generally for a tenure of five years at one time. They are paidremuneration, which are duly recommended by the RemunerationCommittee confirmed by the Board and then approved by theshareholders in the subsequent Annual General Meetings. The BasicSalary of Rs.5,75,000/- per month being paid to five ExecutiveDirectors namely Shri. Ashok Punj, Shri. M. M. Mathur, Shri. R. K.

Name of Board Meetings Meetings LastDirectors attended AGM

24.06.08 15.07.08 24.10.08 30.01.09 02.03.09 No. % 04.09.08

Sh. Y. P. Punj LOA LOA P LOA P 2 40 NR

Sh. Ashok Punj P P P P P 5 100 P

Sh. Alok Punj P P P P P 5 100 P

Sh. G.S.Sauhta P P LOA P P 4 80 P

Sh.R.K.Bahri P P P P P 5 100 P

Sh. M.M.Mathur P LOA P P LOA 3 60 NR

Sh. D.N.Sehgal P P LOA P LOA 3 60 NR

Sh. Prakash V. Apte P P P P P 5 100 P

Sh. N.C. Sharma P P P P P 5 100 NR

Sh. Ashok Sharma P P LOA P LOA 3 60 NR

Sh. Harry H. Shourie LOA P P P LOA 3 60 NR

Sh. Paresh J. Shah P P P P P 5 100 NR

Sh. S.P.Bhatia P LOA P P LOA 3 60 NR

Sh. G.Gehani P P P P LOA 4 80 LOA

Sh. C.K.Goel P P P P LOA 4 80 NR

Sh. Harsh Pateria P P P P LOA 4 80 NR

Directors No. 14 13 13 15 8

Attended % 87 81 81 94 50

PSL Notice 6-36.p65 6/20/2009, 5:01 PM27


iii) Qualifications in draft audit report.

iv) Significant adjustments arising out of audit.

v) The going concern assumption.

vi) Compliance with accounting standards.

vii) Compliance with Stock Exchanges and legalrequirements concerning financial statements.

viii) Any related party transactions i.e., transactions ofthe Company of material nature with promoters orthe management, their subsidiaries or relatives etc.that may have potential conflict with the interest ofcompany at large.

c) To discuss and review the Company’s financial and riskmanagement policies.

d) To approve Internal Audit plans and reviewing efficiencyof the function.

e) Discuss and review Audit Reports.f) Discussions with external Auditors about the scope of

audit including the observations of the auditors.g) To review with the Management the statement of uses/

application of funds raised through Public Issue, RightIssue, Preferential Issue etc.

The Audit Committee may also review such matters as areconsidered appropriate by it and referred to it by the Board.Minutes of the meetings of the Audit Committee are circulatedto Members of the Committee as well as to the Board.

Role of Internal Auditors

PSL considers the Internal Audit Department as a powerful toolwith focus on control and governance. Internal Audit promotesstrong ethics and values within the organisation.

At PSL Internal Audit team aims at :-

- effectiveness and efficiency of operations.

- reliability of financial reporting.

- compliance with laws and regulations of all major functionalareas such as purchase, store, quality, production, technical,marketing, sales & finance.

- Internal Audit Department gives its report on all major findingsduring the audit to the Board.

(ii) Composition, Meeting and Attendance

a) Composition

The Audit Committee comprises of following sixmembers. The present composition of the Committee isas follows:

Name of Member Category / Position

Alok Punj Non- Executive Director

Prakash V. Apte Independent & Non Executive Director

N. C. Sharma Independent & Non Executive Director

Harry H. Shourie Independent & Non Executive Director

Harsh Pateria# Independent & Non Executive Director

G. Gehani# Director & Company Secretary

#Appointed as member in Board meeting held on 28th May, 2009

Members of the Audit Committee have requisite financial andmanagement expertise and have held or hold senior positions inreputed organisations.

Meetings & Attendance

During the year under review four meetings of Audit Committeewere held. The attendance at the said meetings were as follows :-

Date of Alok Prakash N. C. Harry Attendance

Meeting Punj V. Apte Sharma H. No %

Shourie

24.06.08 P P P LOA 3 75

15.07.08 P P P P 4 100

24.10.08 P P P P 4 100

30.01.09 P P P P 4 100

Meeting (No.) 4 4 4 3

attended (%) 100 100 100 75

P = Present

LOA = Leave of Absence

B) REMUNERATION COMMITTEE


The Remuneration Committee has been constituted by theBoard to recommend / review remuneration of the ManagingDirector and Whole-time Directors based on Company’spolicy and financial status, industry trends, performance andpast remuneration.

(ii) Remuneration Policy

The Remuneration Policy of the Company is primarily basedon the following criteria:-

- Performance of the Company, its divisions and units.- Track record, potential and performance of individual

managers and- External competitive environment.

(iii) Composition

The Committee presently comprises of following six Non-Executive Directors of the Company.

Name of the Member Category/Position

Y.P. Punj MemberAlok Punj MemberPrakash V. Apte MemberAshok Sharma MemberParesh J. Shah* MemberHarsh Pateria* Member

* Appointed as member in board meeting held on 28th May, 2009.

(iv) Meeting

All the Members except Shri Y. P. Punj attended the meetingconvened on 15 th July, 2008, wherein the revisedremuneration package of five Whole-time Directors namelyShri. Ashok Punj, Shri. M. M. Mathur, Shri. G. S. Sauhta,Shri. R. K. Bahri and Shri. D. N. Sehgal was considered andrecommended to the Board.

C) SHAREHOLDERS’/INVESTORS’ GRIEVANCE COMMITTEE


The role and terms of reference of this committee are: -

- to review the redressal of Shareholders and Investors’complaints.

- to appoint Compliance Officer and determine the roleand responsibilities of such Officer.

- to review routine matters such as transfer of shares, non-receipt of Balance Sheets, non-receipt of warrants fordeclared dividends.

- to ensure timely attention to investors’ complaints andresolution thereof.

- other matters related to shares.

The main object of the Committee is to strengthen investorrelations.


PSL Notice 6-36.p65 6/20/2009, 5:01 PM28


(ii) Composition

The Committee comprises of following four members .


Alok Punj Chairman

N.C. Sharma Member

Ashok Sharma Member

Paresh J. Shah Member

G. Gehani Secretary

(iii) Meeting & Attendance

Since during the Financial Year 2008-09, no cases of majorshareholder grievance were reported, no meeting of theCommittee was held.

(iv) Compliance Officer

Shri G. Gehani –Director & Company Secretary continuedto act as “Compliance Officer” for complying with therequirement of SEBI Regulations and the Listing Agreementswith the Stock Exchanges.

(v) Investor Grievance Redressal

During the year a total of 273 minor queries/complaints/grievances were received from the shareholders as per reportof Karvy submitted to the Company at the end of everyquarter, all of them were resolved to the full satisfaction ofthe shareholders. There were no outstanding complaints.

D) COMMITTEE OF DIRECTORS

The Board is authorised to constitute one or moreCommittees delegating thereto powers and duties withrespect to specific purposes. Meetings of such Committeesare held as and when need arises. Board has formed onesuch Committee, i.e. Committee of Directors.

(i) Terms of referenceThe major role and terms of reference of the committee is todeliberate and decide upon all such urgent matters, whichcannot wait till convening of next Board meeting. Alldecisions of the committee are placed before the Board fornoting and ratification by the Board in its next meeting.

(ii) Composition

The Committee presently comprises of following Six members.


Y. P. Punj Member

Ashok Punj Member

Alok Punj Member

M. M. Mathur Member*

G.Gehani Member*

S.P. Bhatia Member*

* Inducted in the Committee on 15th January, 2008

(iii)Meeting

During the year under review 41 meetings were held.Attendance of the members at the meetings was as follows :-

Name of the director No. of meetings attended

Y. P. Punj 30

Ashok Punj 27

Alok Punj 31

M.M. Mathur 10

G.Gehani 8

S.P. Bhatia 7

Minutes of meetings of the Committee of Directors are circulatedto the members of the Committee as well as to the Board.

E) SHARE TRANSFER COMMITTEE


The role and terms of reference of the Share TransferCommittee is to give approval of transfer/ transmission ofphysical equity shares of the Company lodged with theCompany/ Share Registrars.

(ii) Composition

The Committee comprises of following three members.


G. Gehani Member

M.M. Mathur Member*

S.P. Bhatia Member*

* Inducted in the Committee on 15th January, 2008

During the year under review a total 15 sittings were held whereina total of 19 Share transfer cases comprising of 3700 Equity Shares,two cases for deletion of name involving 200 Equity Shares andthree cases of transmission of shares comprising of 300 Equity Shareswere approved. All decisions of this Committee are placed beforethe Board of Directors from time to time for its noting and ratification.

F) BOND CONVERSION COMMITTEE


This Committee was formed on 25th January,2006 to considerapplications for conversion of Foreign Currency ConvertibleBonds (FCCBs) issued by the Company in September, 2005,since the said Bonds were attached with a right of conversioninto equity shares at a pre-fixed rate, at the discretion of theBondholder.

(ii) Composition

The Committee comprises of following two members.


Ashok Punj Member

Alok Punj Member

During the year under review no meeting was required to beconducted since no application for conversion of Bonds werereceived.

4. GENERAL BODY MEETINGS

Following are the details of last Five Annual General Meetings: -

For Date Time Venue No. of

Financial Special

Year Resolutions

Considered

2007- 4th Sep., 9.30 A.M. “Cidade de Daman”, 3

2008 2008 Devka Beach, Nani

Daman, U. T. of Daman

& Diu 396 210

2006- 27th Sep., 9.30 A.M. “Cidade de Daman”, 4



& Diu 396 210

2005- 31st Aug., 9.30 A.M. “Cidade de Daman”, 2



& Diu 396 210

2004- 29th Sep., 9.30 A.M. “Cidade de Daman”, Nil



& Diu 396 210

2003- 23rd Sep., 9.30 A.M. “Cidade de Daman”, 6



& Diu 396 210


PSL Notice 6-36.p65 6/20/2009, 5:01 PM29


5. DISCLOSURES

(i) There were no material significant related party transactionsof the Company with the Directors or the management ortheir relatives that may have any potential conflict withinterest of the company at large.

(ii) There were no instances of non-compliance by thecompany. Similarly, no penalties or strictures were imposedon the company by the Stock Exchanges or SEBI or anyother statutory authority on any matter related to the capitalmarkets during the last three years.

(iii) It is affirmed that no person entitled to access the AuditCommittee was denied the said access.

(iv) Few Non Mandatory requirements such as constitution ofa Remuneration Committee and EDIFAR filing have beenadopted by the company.

6. CODE OF CONDUCT

The code of conduct adopted by the Baord of Directors isapplicable to all Board members and senior management ofthe Company. The said code of conduct is posted on the websiteof the company. All Board members and senior managementpersonnel have affirmed their respective compliance of the saidcode for the financial year 2008-09. A declaration to this effectis annexed at the end of this report.

7. CEO/CFO CERTIFICATION

Certificate from Chief Executive Officer/Managing Director andChief Financial Officer for the financial year ended on 31st

march, 2009 is annexed at the end of this report.

8. MEANS OF COMMUNICATION

(a) Information to Stock Exchanges and Newspaper Publicity

- Quarterly/Annual Results of the Company are published inthe newspapers in terms of Listing Agreement. These resultsare promptly submitted to Stock Exchanges. Additionally, instrict compliance of Listing Agreement requirements, theCompany has always promptly reported dates of variousBoard Meetings, General Meetings, Book Closures/ RecordDate to the Stock Exchanges and also published theinformation pertaining thereto in reputed newspaper forinformation of shareholders. The quarterly and annualFinancial Results of the Company are normally publishedin “Business Standard” / “Financial Express” / “HinduBusiness Line”.

- Price sensitive information like receiving of orders/ awardand other matters that are relevant to the shareholders hasbeen timely informed to Stock Exchanges.

(b) Company's Website

- The company regularly inserts important information suchas quarterly/audited Financial results, Shareholding patternetc. on Company’s website www.psllimited.com at the earliest.

- The company by way of press releases in leading financialnewspapers also informs significant information aboutimportant developments to shareholders.

(c) Electronic Data Information Filing & Retrieval (EDIFAR)

- In terms of Clause 51 of the Listing Agreement the Companyregularly posted all prescribed information, statements andreports on the Electronic Data Information Filing & Retrieval(EDIFAR) of Securities and Exchange Board of India (SEBI)in addition to filing of the same in hard copy with the StockExchanges.


d) The Management’s Discussions and Analysis Report forms partof the Annual Report.

9. GENERAL SHAREHOLDER INFORMATION

a) Registered Office Kachigam, Daman

Union Territory of Daman & Diu- 396 210.

b) Annual General Meeting Date : 21st July, 2009

Day : Tuesday

Time : 9.30 A.M.

Venue : Hotel Miramar, DevkaBeach, Nani Daman, U.T.of Daman & Diu-396 210

c) Financial Calendar - April to March of each year

d) Un-audited/Audited

Results approval Quarter Ended on Board meetingheld on

- First 30th June, 2008 15th July, 2008

- Second 30th Sept., 2008 24th Oct., 2008

- Third 31st Dec., 2008 30th Jan., 2009

- Year 31st March, 2009 28th May, 2009

e) Dates of Book closure Tuesday, the 14th July, 2009 toTuesday, the 21st July, 2009 (Bothdays inclusive)

f) Dividend 27th July, 2009Payment Date Interim dividend paid @ Rs. 2.50/-

per equity share in February 2009.

Final dividend recommended @Rs. 2.50/- per equity share.

g) Listing at Stock Bombay Stock exchangeExchanges National Stock exchange

h) ISIN NO. Under the depository System, theISIN allotted to the company’sequity shares is INE474B01017

i) Stock Codes Bombay Stock Exchange - 526801National Stock Exchange - PSL

j) Share Market price Data High/Low of Company’s shares infor the year 2008-09 BSE & NSE is as follows :-

Particulars BSE NSE

Price for Shares Price for Shares

High Low High Low

April 2008 347.80 280.00 337.45 270.20

May 2008 398.00 315.00 399.70 316.00

June 2008 399.80 312.10 390.00 311.10

July 2008 345.00 300.00 350.00 302.20

August 2008 365.00 313.50 370.00 301.45

September 2008 329.95 215.35 337.95 215.50

October 2008 226.00 98.50 224.40 97.30

November 2008 123.00 82.50 128.90 82.00

December 2008 93.00 72.10 93.00 72.05

January 2009 96.35 71.15 96.00 70.15

February 2009 79.90 65.40 79.70 65.70

March 2009 91.00 59.50 88.05 60.00

(in Rs.)

k) Comparison to Broad Performance in comparison tobased index broad based index such as Nifty

index and BSE Sensex

PSL Notice 6-36.p65 6/20/2009, 5:01 PM30


l) Share Transfer Agents Karvy Computershare PrivateLimited17–24, Vittal Rao Nagar,Madhapur, Hyderabad - 500 081.

m) Share Transfer System - The Company’s equity shares arecompulsorily traded in demat modeat the Stock Exchanges.Equity shares in physical formlodged for transfer are processed byShare Transfer Agents of thecompany namely KarvyComputershare Private Limited.Share transfers are registered andreturned within fifteen days fromthe date of lodgment if thedocuments are complete in allrespects.

- In terms of Clause 47C of theListing Agreement entered intobetween the Company anddifferent Stock Exchanges apracticing Company Secretary hasbeen appointed by the Company toexamine the records andprocessing of share transfer andthereafter issue half yearlycertificate which is sent to the StockExchanges.

- In accordance with SEBI’srequirement a practicing CompanySecretary has been appointed bythe Company who on quarterlybasis conducts secretarial audit forreconciliation of total issued sharecapital with depositories and inphysical form.

n) Distribution of Distribution of Shareholding ofShareholding the company as on 31st March, 08

Category No. of % of Amount % of

From To cases cases (Rs.) Amount

01-5000 9066 90.86 10125980 2.3708%

5001-10000 460 4.61 3704570 0.8674%

10001-20000 200 2.00 2977110 0.6970%

20001-30000 68 0.68 1779290 0.4165%

30001-40000 30 0.30 1090130 0.2552%

40001-50000 15 0.15 698000 0.1634%

50001-100000 42 0.42 3017940 0.7066%

100001 & above 97 0.97 403716090 94.5229%

TOTAL 9978 100.00 427109110 100.00%

o) Demateri- 99.23% of the equity shares of thealization of company have been demateria-Shares lised.

p) Outstanding FCCBs In September 2005 the Companyhad issued Zero Coupon ForeignCurrency Convertible Bonds(FCCBs) having an aggregate valueof US Dollars 40 Million. Sincethese Bonds carried an option toBond Holders to convert them at apre-fixed rate before 8th August2010 few Bond holders have gottheir Bonds having an aggregatevalue of US Dollars 37.50 Millionconverted into equity shares tillnow thereby leaving outstandingBonds worth USD 2.50 Million. Inthe eventuality of all FCCBs gettingconverted, the total share capital(without any further enhancement)would be 4,32,90,800 equityshares of Rs. 10/- each & theholding of Promoter Group wouldthen fall from existing level of 48.35% to 47.71%. However, the Boardof Directors in its meeting held on02nd March ,2009 have decided tobuyback the outstanding FCCBs inaccordance with Reserve Bank ofIndia guidelines on the saidbuyback.

q) Plant/Office Location - The Company’s Plants are locatedat Varsana, Nanichirai,Gandhidham, Daman,Maduranthakam (near Chennai),Vishakhapatnam, Mahudi (nearGandhinagar, Gujarat), Jaipur.

- In addition to the aforesaiddomestic plants,

1. Plant has been set up by PSLFZE-Subsidiary of theCompany at Inner Harbour,plot no ,HJ02, Hamriyah FreeTrade Zone, Sharjah in UAE.

2. Office has been set up by PSLUSA INC- Subsidiary of theCompany at Corporation TrustCenter, 1209, Orange Street,Wilmington, New Castle,19801, Delware in USA.

3. Plant has also been set up byPSL-North America LLC-Subsidiary of PSL USA INC13092 Sea Plane Road, Bay St.Louis, Mississippi-39520, USA.

4) Addresses for Correspondence from Shareholders for queries/complaints, if any: -

a) Shri G. Gehani b) Karvy ComputershareDirector & Company Private LimitedSecretary (Share Transfer AgentsLegal & Secretarial Office of PSL Limited)3rd Floor, ‘Punj House’ 17–24 Vittalrao Nagar,M-13 A, Connaught Circus Madhapur,New Delhi - 110 001. Hyderabad - 500 081.

10.OTHER USEFUL INFORMATION FOR SHAREHOLDERS

UNCLAIMED DIVIDEND

i) As in compliance of Section 205 C of the Companies Act,1956 it is mandatory for the Company to transfer dividend


Share Price ComparisonParticulars PSL Quoted BSE (Sensex) PSL Quoted NSE (Nifty)

at BSE (Rs.) at NSE (Rs.)

Share Price 295.00 15,771.72 285.3 4735.65

01.04.08 (Open)

Share Price 86.65 9,708.50 84.45 3020.95

31.03.09 (Close)

Increase/decrease in % -70.62% - 38.44% - 70.39% - 36.21%

PSL Notice 6-36.p65 6/20/2009, 5:01 PM31


DECLARATION BY THE CEO UNDER CLAUSE 49 OF THE LISTING AGREMENT REGARDING

ADHERENCE TO THE CODE OF CONDUCT

In accordance with Clause 49 sub-clause I(D) of the Listing Agreement with the Stock Exchanges, I herebyconfirm that, all the Directors and Senior Management personnel of the Company have affirmed compliance ofCompany have affirmed compliance of Company’s Code of Conduct for the Financial Year ended on 31st March,2009.

For PSL LIMITED

Sd/-

Place : Mumbai ( ASHOK PUNJ )

Date : 28th May, 2009 Managing Director


remaining unclaimed for a period of seven years from thedate they become due for payment to Investors Education& Protection Fund (IEPF) established by the CentralGovernment, the Company has already transferred alldividends declared up to and including Second InteirmDividend for 2000-01 and remained unclaimed to the saidFund.

As some amount from the dividends declared thereafter andtabulated below has still not been transferred to the afore-said fund, the claimants of the said amount are requested toimmediately contact the Company.

Financial Type of Dividend Date Due date for

Year dividend No. of declaration transfer by the

of dividend company to

IEP Fund

2000-2001 Final 12th 08/08/2002 06/09/2009

2002-2003 Interim 13th 21/04/2003 20/05/2010

2002-2003 Final 14th 25/09/2003 24/10/2010

2003-2004 Interim 15th 22/01/2004 20/02/2011

2003-2004 Final 16th 23/09/2004 22/10/2011

2004-2005 Interim 17th 19/01/2005 17/02/2012

2004-2005 Final 18th 25/09/2005 24/10/2012

2005-2006 Interim 19th 22/01/2006 20/02/2013

2005-2006 Final 20th 31/08/2006 29/09/2013

2006-2007 Interim 21st 18/01/2007 16/02/2014

2006-2007 Final 22nd 27/09/2007 26/10/2014

2007-2008 Interim 23rd 15/01/2008 13/02/2015

2007-2008 Final 24th 04/09/2008 02/10/2015

2008-2009 Interim 25th 30/01/2009 29/02/2016

ii) Members holding shares in physical form are requestedto notify/send the following to the company’s RTA toenable them to provide better services :-

a) Any change in the address/bank details

b) Particulars of the bank A/c in case the same havenot been sent earlier.

iii) Members holding shares in electronic form are advisedthat their address/ Bank details as furnished to the companyby the respective depositories viz CDSL & NSDL, will beprinted on the dividend warrants. Members are requestedto inform the concerned DPs in case of any change intheir address etc, to facilitate better and quicker service.

iv) Although 99.23% of Company’s shares have already beendematerialized, members still holding their shares inphysical form are requested to get them dematerializedso that their eventual trading at the Stock Exchanges isfacilitated.

v) For better service to the investors and Shareholders,members are requested to submit their valuablesuggestions to the Secretarial and Legal Deptt. of theCompany.

PSL Notice 6-36.p65 6/20/2009, 5:01 PM32


Management Discussion and Analysis Report

INDUSTRY STRUCTURE & DEVELOPMENT

The world economies are going throughunprecedented crisis, the full ramifications of whichare still to be understood and all industries includingmanufacturing industry is significantly impacted bythe same. Due to the ongoing turmoil in the globaleconomy, even India has been affected but luckily toan extent lesser than most other important economiesof the world. Nonetheless it is expected to remain asone of the fastest growing economies of the world.Unmindful of the global recession and economicslowdown the world over and proving a number ofinternational agencies wrong, the Indian economycould manage to clock a 6.7 percent growth in 2008-09. The global demand for pipes is likely to remainbuoyant given the increasing spends by oil and gascompanies worldwide on E&P (exploration andproduction) activities, which require a pipelinenetwork. On the domestic front, the proposed settingup of pipelines by players such as GAIL and theincreasing number of onshore blocks also offer PSLalternative growth vistas. On international front,demand for pipes overseas have been rising due tohuge activities in the refinery space, dwindlingreserves and higher energy costs.

OPPORTUNITIES AND THREATS

The Indian Pipe industry is among the top threemanufacturing hubs after Japan and Europe.However,the penetration level of pipelines in oil and gastransportation is low at 32% in India. The lowpenetration levels represent the huge scope of growthfor the pipe industry.

Even on the international fronts while the demand forPipelines is continuously on rise mainly due to souringCrude Oil prices, adequate manufacturing capacityis lacking. The replacement demand from USA andEuropean countries, having a vast pipelineinfrastructure, will be huge. Hence ampleopportunities are available both on national as wellas international front for PSL.

No particular industry offers only opportunities andno threats. Our industry is highly raw materialintensive with raw material cost accounting to morethan 70% of the total cost . The growth ofmanufacturing sector in 2008-09 is lower than thenine per cent recorded in the preceding fiscal, butthat is not as low as expected by certain analystsparticularly after the onset of global recessionarytrends. The achieved growth is quite in the rangeprojected by the Reserve Bank of India at 6.5-7percent.

The Pipeline Industry suffers from various threats,some of which are :-

1. Heavy proportion of the single raw-material i.e.Steel, to the total cost of the finished product.

2. High Freight cost due to heavy weight andvolume.

3. Higher requirement of expensive Working Capital.

4. High volatility in prices of HR Coils.

5. Sizeable impact of adverse fluctuation of foreignexchange on the raw-material cost endangeringrespectable profitability.

6. High dependence of big value Projects on politicalenvironment.

As most of the above threats are based on externalfactors, individual businesses have very little controlover the same. They can at the most minimize theadverse effect of some of them, but cannot eliminatethe effect altogether.

OUTLOOK

In view of the excessive demand for Pipelines as adirect result of exorbitant hike of Crude Oil pricesand further because of the inbuilt advantage of lowtransportation cost of Oil and Gas through PipelineNetwork, the future for Pipeline business will alwaysbe bright. It is because of such optimistic situationthat more and more pipe manufacturers are enteringin the fray.

PSL has been indeed lucky that it could set up itsdifferent Plants at such strategic locations in thecommercial belt of the country from where thetransportation cost of the manufactured pipes to thedesired destination fixed by its customers is minimum.Again having chosen the particular technology ofSpirally Welded Steel Pipes as against longitudinalwelded pipes, the Company has been placed in anadvantageous position since the availability of themain raw material i.e. HR Coil in the chosentechnology is not only easier but even cheaper ascompared to the steel plates used for manufacture ofL-SAW Pipes. The Company now has a total of 11Pipe Mills in India with a total production capacity ofmore than 1 Million Metric Tonnes of Pipes, whichhas enabled the Company to acquire the status ofbeing the single largest manufacturer in India.Company's one single Pipe Mill at Varsana is a TwoStep Pipe Mill using state-of-the-art technology andproduces 3,00,000 Metric Tonnes Pipes in a year onits own.

Again on international front also the Company provedto be a leader as in the last year the company had setup a plant in the Hamriyah Free Trade Zone in Sharjahto manufacture 75,000 MT on its own.This year thecompany ventrured in North America by setting upnew generation Two step mill in Bay St. Louis,Mississippi, USA in October, 2008.

Similarly for meeting the high demand of pipes inNorth America, the Company, through its SubsidiaryCompany, has entered into a Joint Venture (with 78%

PSL Notice 6-36.p65 6/20/2009, 5:01 PM33


Management Discussion and Analysis Report

shareholding of the Joint Venture Company) to set upa Plant in the State of Mississippi.

RISKS AND CONCERNS

The nature of Company's business is such that variousrisks have to be confronted with not only successfullyexist in the said business but even to grow at arespectable pace. However, these risks are no differentthan the ones faced by the industry as a whole. Acomprehensive and integrated risk managementframework forms the basis of all the de-risking effortsof the Company. Formal reporting and controlmechanisms ensure timely information availabilityand facilitate proactive risk management. Thesemechanisms are designed to cascade down to the levelof the line managers so that risks at the transactionallevel are identified and steps are taken towardsmitigation in a decentralized fashion.

INTERNAL CONTROL SYSTEM AND THEIRADEQUACY

The company has an adequate system of internalcontrols implemented by the management towardsachieving efficiency in operations, optimum utilisationof resources and effective monitoring thereof andcompliance with applicable laws.The system ofInternal Control facilitates the effectiveness andefficiency of operations, helps ensure the reliabilityof internal and external reporting and assists incompliance with laws and regulations. The qualified,experienced and independent Audit Committee of theBoard of Directors regularly reviews plans, significantaudit findings, compliance with accounting standardsand other legal requirements relating to financialstatements.

FINANCIAL PERFORMANCE WITH RESPECT TOOPERATIONAL PERFORMANCE

To minimize the occurrences of inefficient operationalperformance due to lack of timely decision making,adequate deliberation of powers to Senior and MiddleManagement has been resorted to. Most of the powershave been decentralized to the different operationallevels at widely spread network of Company's Plants.However, important areas like requirement of fundsat different Units and evolution of suitable mechanismto raise such funds is done in a centralized manner.

At operational level, apart from routine upgradationof the production facilities as may be required fromtime to time, continuous planning for setting up ofnew Projects at appropriate locations is done at theHeadquarters level with the help of suitable inputsfrom experienced Unit Heads.

MATERIAL DEVELOPMENTS IN HUMANRESOURCES / INDUSTRIAL RELATIONS FRONT

Human Resources has always been most valuableasset for PSL and the company constantly seeks toattract and retain the best available talent. Humanresource management incorporates a process drivenapproach that invests regularly in the training anddevelopment needs of its employees throughsuccession planning, job rotation, on the job trainingand extensive training workshops and programs. Thecompany holds various employee engagementprograms in order to bolster employee morale,inculcate a feeling of team work and create amechanism to recognize individual and teamcontributions to the organization . The employeeturnover for many years at a stretch is adequateevidence of the successful operation of the aforesaidphilosophy of the Company. With the work force ofmore than 2500 individuals comprising of very wellexperienced staff and competent Executives atdifferent levels, virtually no industrial problems areexperienced by the Company at any of its Units.

CAUTIONARY STATEMENT

Statements in the “Management Discussion andAnalysis Report” describing the company's objectives,various activities and future plans may be “forwardlooking statement” within the meaning of applicablelaws and regulations. Actual performance may differmaterially from those express or implied. Importantfactors that could make a difference to the Company'soperations, include Government regulations, taxregimes, economic developments within India andcountries in which the company conducts businessand other allied factors.

PSL Notice 6-36.p65 6/20/2009, 5:01 PM34


Compliance Certificate

AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

The MembersPSL Limited

We have examined the compliance of conditions of Corporate Governance by PSL Limited, for the Year endedon March 31, 2009 as stipulated in Clause 49 of the Listing Agreement of the said company with Stock Exchange(s).

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examinationwas limited to the procedures and implementation thereof, adopted by the Company for ensuring the complianceof the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on thefinancial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us.

i) We certify that the Company has complied with the mandatory conditions of Corporate Governance asstipulated in the above-mentioned Listing Agreement.

ii). We state that there are no investor grievance(s) pending for a period exceeding one month against thecompany as per the records maintained by the “shareholders/investors” Grievance Committee.

iii). We further state that such compliance is neither an assurance as to the future viability of the company northe efficiency or effectiveness with which the Management has conducted the affairs of the company.

For & on behalf ofSuresh C. Mathur & Company

Chartered Accountants

Sd/-Place : Mumbai Suresh C. MathurDate : 28th May, 2009 Partner

M. No. 1276

PSL Notice 6-36.p65 6/20/2009, 5:01 PM35


CEO/CFO Certificate

CEO/CFO CERTIFICATION

The Board of DirectorsPSL LIMITED

Ref: Financial Statements for the year 2008 – 2009– Certification by Managing Director/CEO and CFO

We, Ashok Punj, the Managing Director of PSL LIMITED appointed in accordance with provisions of the CompaniesAct, 1956 and K. Ramanathan the CFO of PSL LIMITED hereby certify that:

(a) We have reviewed financial statements and the cash flow statement for the year and that to the best of ourknowledge and belief:

(i) these statements do not contain any false or materially untrue statement or omit any material fact orcontain statements that might be misleading;

(ii) these statements together present a true and fair view of the company’s affairs and are in compliancewith existing accounting standards, applicable laws and regulations.

(b) There are, to the best of our knowledge and belief, no transactions entered into by the company during theyear which are fraudulent or illegal or violative of the company’s code of conduct.

(c) We accept responsibility for establishing and maintaining internal controls for financial reporting and thatwe have evaluated the effectiveness of internal control systems of the company pertaining to financialreporting and we have disclosed to the auditors and the Audit Committee, deficiencies in the design oroperation of such internal controls, if any, of which we are aware and the steps we have taken or propose totake to rectify these deficiencies.

(d) We have indicated to the auditors and the audit committee that: -

(i) there have been no significant changes in internal control over financial reporting during the year;

(ii) there have been no significant changes in accounting policies during the year; and

(iii) there have been no instances of significant fraud of which we have become aware of and hence therehas been no involvement of any management person or any employee having a significant role in thecompany’s internal control system over financial reporting.

Sd/- Sd/-(Ashok Punj) (K. Ramanathan)

Managing Director Chief Finance Officer

Place: MumbaiDate: 28th May, 2009

PSL Notice 6-36.p65 6/20/2009, 5:01 PM36


Auditors’ Report

To

The Members of PSL Limited

We have audited the attached Balance Sheet as at March

31, 2009 and also the Profit and Loss account and the Cash

Flow statement for the year ended on that date annexed

thereto. These financial statements are the responsibility of

the company’s management. Our responsibility is to express

an opinion on these financial statements based on our audit.

1. We conducted our audit in accordance with auditing

standards generally accepted in India. These standards

require that we plan and perform the audit to obtain

reasonable assurance about whether the financial

statements are free of material misstatement. An audit

includes examining, on a test basis, evidence supporting

the amounts and disclosures in the financial statements.

An audit also includes assessing the accounting

principles used and significant estimates made by

management, as well as evaluating the overall financial

statement presentation. We believe that our audit

provides a reasonable basis for our opinion.

2. As required by the Companies (Auditor’s Report) Order,

2003 issued by the Central Government of India in terms

of sub-section (4A) of section 227 of the Companies

Act, 1956, we enclose in the Annexure a statement on

the matters specified in paragraphs 4 & 5 of the said

Order.

3. Further to our comments in the annexure referred to

above, we report that:

(i) We have obtained all the information and

explanations, which to the best of our knowledge

and belief were necessary for the purposes of our

audit.

(ii) In our opinion, proper books of account as required

by law have been kept by the Company so far as

appears from our examination of those books.

(iii) The Balance sheet, Profit and Loss account and

Cash Flow statement dealt with by this report are

in agreement with the books of account.

(iv) In our opinion, the Balance Sheet, Profit and Loss

account and Cash Flow statement dealt with by

this report comply with the accounting standards

referred to in sub-section (3C) of section 211 of the

Companies Act, 1956.

(v) On the basis of the written representations received

from the directors, as on March 31, 2009 and taken

on record by the Board of Directors, we report that

none of the directors is disqualified as on March

31, 2009 from being appointed as a director in

terms of clause (g) of sub-section (1) of section 274

of the Companies Act, 1956.

(vi) In our opinion and to the best of our information

and according to the explanations given to us, the

said accounts read together with the significant

accounting policies in schedule “Q” and notes

appearing thereon give the information required

by the Companies Act, 1956, in the manner so

required and give a true and fair view in conformity

with the accounting principles generally accepted

in India;

(a) In the case of the Balance sheet, of the state of

affairs of the company as at March 31, 2009;

(b) In the case of the Profit and Loss account, of

the profit for the year ended on that date; and

(c) In the case of Cash Flow statement, of the cash

flows for the year ended on that date.

For & on behalf of

Suresh C. Mathur & Company


Sd/-

SURESH C. MATHUR

Place: Mumbai Partner

Date : 28th May, 2009 Membership No.1276

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR

REPORT OF EVEN DATE

1. The Company has maintained proper records showing

full particulars, including quantitative details at factory

level. Consolidation of the Assets including quantity

& value is under progress at the Corporate Office. In

accordance with the phased programme for

verification of fixed assets, certain items of fixed assets

were physically verified by the management during

the year and no material discrepancies were noticed

on such verification.

2. The inventory of the Company has been physically

verified by the management during the year. In our

opinion, the frequency of verification is reasonable.

In our opinion and according to the information and

explanations given to us, the procedures of physical

verification of inventory followed by the management

were found reasonable and adequate in relation to

the size of the Company and the nature of its business.

On the basis of our examination of records of inventory,

in our opinion, the Company has maintained proper

records of inventory and the discrepancies noticed on

physical verification between the physical stocks and

the book records were not material in relation to the

operations of the Company.

PSL-37-56.p65 6/20/2009, 5:01 PM37


Auditors’ Report

3. According to information and explanation given to us

the company has not granted any loans secured or

unsecured to Companies, Firms or other parties which

are of the nature required to be covered under Section

301 of the Companies Act, 1956. However the

company has given Rs. 492.03 lacs as interest free

advance to wholly owned subsidiary during the year,

which is repayable on demand.

4. In our opinion and according to the information and

explanations given to us, there are adequate internal

control procedures commensurate with the size of the

Company and the nature of its business for the

purchase of inventory, fixed assets and for the sale of

goods. Further, on the basis of our examination and

according to the information and explanations given

to us, we have neither come across nor have we been

informed of any instance of major weaknesses in the

aforesaid internal control procedures.

5. In our opinion and according to the information and

explanations given to us, the transactions made in

pursuance of contracts of arrangements entered in the

register maintained under Section, 301 of the

Companies Act, 1956 and exceeding the value of

rupees five lakhs in respect of any party during the

year have been made at prices which are reasonable

having regard to prevailing market prices at the relevant

time.

6. The Company has not accepted any deposits from the

public.

7. In our opinion, the Company has an internal audit

system, commensurate with the size of the Company

and the nature of its business.

8. We have broadly reviewed the books of account

maintained by the Company in respect of products

where, pursuant to the Rules made by the Central

Government, the maintenance of cost records has been

prescribed under Section 209 (1)(d) of the Companies

Act, 1956. We are of the opinion that prima facie the

prescribed accounts and records have been

maintained. We have not, however made a detailed

examination of the records with a view to determining

whether they are accurate or complete.

9. According to the records of the Company, the

Company is regular in depositing undisputed statutory

dues including with-holding of taxes, provident fund,

employees state insurance, income tax, sales tax,

wealth tax, custom duty, excise duty, service tax, cess

and other statutory dues applicable to it with the

appropriate authorities. According to the information

and explanations given to us, no undisputed amounts

payable in respect of income tax, fringe benefit tax,

wealth tax, sales tax, customs duty, service tax, excise

duty and cess were outstanding, at the year end for a

period of more than six months from the date they

became payable.

As on March 31, 2009 according to the records of the

Company the following are the particulars of disputed

dues on account of Excise duty, Customs, Income Tax,

Service Tax and Sales Tax that have not been deposited.

Sr. Nature of Amount Period to Forum where the

No. Dues Under Which the dispute is pending

Dispute Amount

(Rs. in Lacs) Relates

1 Central Excise 25 2004-05-06 Tribunal, Ahmedabad.

2 — do — 3752 2006 Commissioner, Central

Excise, Rajkot.

3 — do — 1467 2008 Commissioner Central

Excise , Rajkot

4 — do — 1452 2008 Commissioner Central

Excise, Rajkot

5 Service Tax 45 2008 Tribunal, Chennai

6 Sales Tax 43 2000-01 Pending in AP High

Court

7 — do — 14 1999-2000 Tribunal, Ahmedabad

8 — do — 1200 2003-04-05 AP High Court

9 Income 723 2005-06 Commissioner of

Tax Income Tax (Appeal)

10 Income 154 2006-07 Commissioner of

Tax Income Tax (Appeal)

& ITAT

10. The Company has no accumulated losses at the end

of the financial year and it has not incurred any cash

losses in the current and immediately preceding

financial year.

11. Based on our audit procedures and on the information

and explanations given by the management, we are

of the opinion that the Company has not defaulted in

repayment of dues to financial institution, and banks.

12. According to the information and explanations given

to us and based on the documents and records

produced to us, the Company has not granted loans

or advances on the basis of security by way of pledge

of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a

nidhi/mutual benefit fund/society. Therefore, the

provisions of clause 4(xiii) of the Companies (Auditor’s

Report) Order, 2003 are not applicable to the

Company.

14. In our opinion, the Company is not dealing in or trading

in shares, securities, debentures and other investments.

Accordingly, the provisions of clause 4(xiv) of the

Companies (Auditor’s Report) Order, 2003 are not

applicable to the Company.

15. Based on information and explanations given to us by

the management, term loans were applied for the

PSL-37-56.p65 6/20/2009, 5:01 PM38


Auditors’ Report

purpose for which the loans were obtained.


to us and on an overall examination of the Balance

sheet and Cash flow statement of the Company, we

report that no funds raised on short-term basis have

been used for long-term investment and no long-term

funds have been used to finance short-term assets

(excludes Long Term working capital).

17. The Company has not made any preferential allotment

of shares to parties and companies covered in the

Register maintained under Section 301 of the

Companies Act, 1956 during the year.

18. The Company has not raised any fresh equity Capital.

19. Based upon the audit procedures performed for the

purpose of reporting the true and fair view of the

financial statements and as per the information and

explanations given by the management, we report that

no fraud on or by the Company has been noticed or

reported during the course of our audit.

For & on behalf of

Suresh C. Mathur & Company


Sd/-

Suresh C. Mathur

Place : Mumbai Partner

Date : 28th May, 2009 Membership No.: 1276

PSL-37-56.p65 6/20/2009, 5:01 PM39


BALANCE SHEET AS AT 31ST MARCH 2009[Rs. in lacs]

Schedule As at As atMarch 31, 2009 March 31, 2008

SOURCE OF FUNDS

SHARE HOLDERS’ FUNDSA) Share Capital A 4,258.19 4,258.13B) Reserves & Surplus B 58,593.49 62,851.68 52,298.00 56,556.13

LOAN FUNDSA) Secured Loans C 61,963.83 60,992.78B) Unsecured Loans D 1,273.75 63,237.58 999.25 61,992.03

Deferred Taxation Liability 42.51 161.26

TOTAL 126,131.77 118,709.42

APPLICATION OF FUNDS

FIXED ASSETS EA) Gross Block (At cost) 78,113.83 71,230.89B) Less: Depreciation 32,513.87 26,833.27C) Net Block 45,599.96 44,397.62D) Add: Capital Work in Progress 22,839.73 68,439.69 1,443.67 45,841.29

INVESTMENTS F 19,426.92 17,658.25

CURRENT ASSETS, LOANS & ADVANCESA) Inventories G 171,778.36 74,238.66B) Sundry Debtors H 52,326.42 33,794.72C) Cash and Bank Balances I 12,061.86 11,064.57D) Loans and Advances J 50,642.91 16,235.62

286,809.54 135,333.56LESS : CURRENT LIABILITIES & PROVISIONSA) Current Liabilities K 242,436.61 73,752.48B) Provisions L 6,107.77 6,371.21

248,544.38 80,123.69

NET CURRENT ASSETS 38,265.16 55,209.88

MISCELLANEOUS EXPENDITURE NIL NIL

TOTAL 126,131.77 118,709.42

NOTES TO ACCOUNTS Q

Balance Sheet

As per our report attached FOR AND ON BEHALF OF THE BOARD OF DIRECTORSFor Suresh C. Mathur & Co.Chartered Accountants

(SURESH C. MATHUR) M. VENKATESH K. RAMANATHAN ALOK PUNJ ASHOK PUNJPartner Sr. Vice President Chief Finance Officer G.S. SAUHTA M.M. MATHURM.No. 1276 (International Finance) D.N. SEHGAL R.K. BAHRI

S.P. BHATIA C.K. GOELPlace: Mumbai G. GEHANI (Director & Company Secretary)

Date: 28th May, 2009 Directors

PSL-37-56.p65 6/20/2009, 5:01 PM40


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009[Rs. in lacs]

Schedule For the Year Ended For the Year EndedMarch 31, 2009 March 31, 2008

INCOME M 354,995.04 226,176.61354,995.04 226,176.61

EXPENDITURERaw materials and Stores N 254,285.33 153,436.87Excise Duties and Taxes 32,618.37 17,493.40Manufacturing & Process Expenses(includes freight) 22,938.69 17,624.66Employees Remuneration & Benefits O 6,312.31 5,941.54Other Expenses P 10,388.83 8,358.94Interest on Term Loans & Overdrafts 10,071.93 5,785.56Depreciation 5,706.64 342,322.11 5,119.60 213,760.57

PROFIT BEFORE TAXATION 12,672.93 12,416.04Less: Provision for Taxation

Current Tax 4,118.73 3,768.16Fringe Benefit Tax 80.00 78.00Deferred Tax (118.73) 4,080.00 92.84 3,939.00

PROFIT AFTER TAXATION 8,592.93 8,477.04

LESS :Transfer to General Reserve 1,000.00 1,000.00Interim Dividend 1,063.51 1,063.42Proposed Dividend 1,064.55 1,064.53Tax on Proposed Dividend 180.97 180.97Tax on Interim Dividend 180.74 180.73Prior Year Expenses (191.71) 3,298.06 255.72 3,745.37

BALANCE CARRIED OVER TO BALANCE SHEET 5,294.87 4,731.67

EARNINGS PER SHARE (BASIC) Rs. 20.12 21.18

(Face Value Rs.10/- each]

EARNINGS PER SHARE (DILUTED) Rs. 19.85 20.88

NOTES TO ACCOUNTS Q

Profit and Loss Account





PSL-37-56.p65 6/20/2009, 5:01 PM41


SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2009[Rs. in lacs]

As at As atMarch 31, 2009 March 31, 2008

SCHEDULE “A”SHARE CAPITAL

Authorised :100,000,000 EQUITY SHARES OF RS. 10 EACH 10,000.00 10,000.00

A. Issued & Subscribed :-4,27,10,911 EQUITY SHARES OFRS. 10/- EACH (PREVIOUS YEAR 4,27,10,911) 4,271.09 4,271.09(Of the above shares 86,61,511 fully paid-up and pari passu rankingequity shares of Rs. 10/- each were allotted consequent upon conversionof FCCB worth USD 37,500,000 Out of Total FCCB’s worth 40 MillionUSD issued by Company earlier in September 2005)(Previous year 42710911 Equity Shares of Rs.10/- each)

B. Paid up Capital4,27,10,911 EQUITY SHARES OF RS. 10/- EACH(PREVIOUS YEAR 4,27,10,911) 4,271.09 4,271.09(Of the above shares 86,61,511 fully paid-up and pari passu rankingequity shares of Rs. 10/- each were allotted consequent upon conversionof FCCB worth USD 37,500,000 Out of Total FCCB’s worth 40 MillionUSD issued by Company earlier in September 2005 )(Previous year 42,710,911 Equity Shares of Rs.10/- each)

LESS: ALLOTMENT MONEY IN ARREARS PERTAINING TOTHE SHARES ALLOTTED PRIOR TO MERGER. 12.90 12.96(DIRECTORS: NIL)

4,258.19 4,258.13

SCHEDULE “B”RESERVES AND SURPLUS

A. General ReserveAs per Last Balance Sheet 3,874.25 2,874.25Add: Transfer from Profit & Loss Account 1,000.00 4,874.25 1,000.00 3,874.25

B. Security PremiumAs per Last Balance Sheet 29,092.11 12,747.23Add: Additions during the year Nil 15,152.73Less: Provision for Redemption Premium Nil NILAdd: Redemption Premium Added Back Nil 1,192.15

29,092.11 29,092.11Less: Allotment Money in Arrears 95.93 28,996.18 96.55 28,995.56(Directors Nil)

C. Investment Allowance Utilised Reserve 139.64 139.64As Per Last Balance Sheet

D. Profit and Loss AccountAs per last Balance Sheet 19,288.54 14,556.87Add: Transfer during the year 5,294.87 24,583.41 4,731.67 19,288.54

58,593.49 52,298.00

Schedules

PSL-37-56.p65 6/20/2009, 5:01 PM42




SCHEDULE “C”SECURED LOANS

A. Term Loan from Financial Institutions, Banksand Non Banking Financial Institutions 10,353.64 14,591.39[Secured against first charge on some ofthe immovable & moveableassets of the Company]

B. From Scheduled Banks 51,526.91 46,224.41[Secured against hypothecation of Current Assetsand second charge on the assets as per [A] above]

C. From Scheduled Banks 46.33 65.62[Motor Vehicle Loans]

D. Interest free sales tax deferred scheme ofGovt. of Tamil Nadu 36.94 111.36[Secured against second charge onspecific assets of the company]

61,963.83 60,992.78

SCHEDULE “D”UNSECURED LOANS

Foreign Currency Convertible Bonds(Redeemable in 2010 ) (Unsecured) 1,273.75 999.25

1,273.75 999.25

Schedules

PSL-37-56.p65 6/20/2009, 5:01 PM43


SchedulesSC

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PSL-37-56.p65 6/20/2009, 5:01 PM44




SCHEDULE “F”

INVESTMENTS

UNQUOTED [FULLY PAID UP] AT COST(I) LONG TERM INVESTMENTS :

COMPANY UNDER SAME MANAGEMENTa) 13,30,000 Equity Shares of Rs. 10/- each of

BHI LTD. (Previous year 13,30,000 Shares) 133.00 133.00b) 1,50,000 Equity Shares of Rs.10/- each of

Punj International Pvt. Ltd. 15.00 15.00(Previous Year 1,50,000 Equity Shares)

c) 7,500 Equity Shares of Rs. 10/- each ofBroken Hills International Ltd. 0.75 0.75(Previous year 7,500 equity shares)

d) 2,000 Equity Shares of Rs. 100/- each ofPunj Investments Pvt Ltd. 2.00 2.00(Previous year 2,000 equity shares)

e) 8,60,000 Equity Shares of EurocousticProducts Ltd. of Rs. 10/- each 86.00 86.00(Previous Year 8,60,000 Equity Shares)[Company under the same Management]

f) 1,00,000 Equity Shares of Savvy ConsultantsPvt.Ltd. of Rs. 10/- each 10.00 246.75 10.00 246.75(Previous Year 1,00,000 Equity Shares)

(II) SUBSIDIARY COMPANYa) 14,00,020 Equity Shares of Rs. 10/- Each

of PSL Corossion Control Services Ltd. 140.00 140.00(Previous year 14,00,020 )

b) 2,44,60,815 Equity Shares of USD 1/- Eachof Pipeline Systems Ltd. Mauritius 10,636.24 8,867.58(Previous year 2,04,35,815 Equity Shares)

c) 2,00,03,083 Equity Shares of USD 1 /- Eachof PSL USA, INC. 8,313.50 19,089.75 8,313.50 17,321.08(Previous year 20003083 Equity Shares)

(III) OTHERSa) 3 National Savings Certificates of

Rs. 10,000/- each. (Previous Year 3 Nos.) 0.30 0.30b) 128 Shares @ Rs. 100/- in The Gandhidham

Mercentile Co-Op Bank Ltd. (Previous year 128) 0.13 0.13c) SBI Capital Protection Oriented Fund

(Mutual Fund) (Previous year 100) 100.00 100.42 100.00 100.4219,436.92 17,668.25

Less: Provision for diminution invalue of Investments [Savvy Consultants Pvt. Ltd.] 10.00 10.00

19,426.92 17,658.25

SCHEDULE “G”INVENTORIES(Certified by the Management)

Raw Materials, Consumables, Semi-finished goods,Work in progress 160,075.29 58,720.14Finished Goods 11,703.07 15,518.52

171,778.36 74,238.67

Schedules

PSL-37-56.p65 6/20/2009, 5:01 PM45




SCHEDULE “H”SUNDRY DEBTORS(Unsecured but Considered Good)A. Debts outstanding for a period

of Less Than Six Months 45,511.67 27,631.48

B. Debts outstanding for a periodof More Than Six Months 6,814.75 52,326.42 6,163.25 33,794.72

52,326.42 33,794.72SCHEDULE “I”CASH AND BANK BALANCES

A. Cash in Hand 116.52 82.83B Funds in transit 11.80 88.69C. In Current Account with Scheduled Banks 1,839.14 3,330.62D. In Deposit Account with Scheduled Banks 10,094.38 7,562.42

(Includes Rs. 6711.81 Lacs Under Lien tothe Bank for facilities availed](Previous year Rs.5,551 Lacs under lien) 12,061.86 11,064.56

SCHEDULE “J”LOANS AND ADVANCES(Unsecured but Considered Good)

I Security Deposit 43,245.77 8,714.84(Includes Central Excise,Service Tax,VAT deposit of Rs. 40,320.23 Lacs)(Previous year Rs. 7,354.98 Lacs)

II Advance recoverable in cash or in kind or forthe value to be received [include advances forexpenses to companies in which some directors 5,424.62 5,195.17are interested Rs. 492.03 Lacs ][Previous year: Rs.182.16 Lacs]

III Advance Payment against taxes 1,972.52 2,325.60

50,642.91 16,235.62SCHEDULE “K”CURRENT LIABILITIES

A. Sundry Creditors for Purchases 230,100.77 57,439.36B. Other Current Liabilities 10,486.14 6,912.59C. Mobilization Advance 1,849.70 9,400.53

242,436.61 73,752.48

SCHEDULE “L”PROVISIONS

Provision for Taxation - Current Tax 4,080.00 4,343.46Provision for redemption of FCCB 782.25 782.25Proposed Dividend 1,064.55 1,064.53Tax on Proposed Dividend 180.97 180.97

6,107.77 6,371.22

Schedules

PSL-37-56.p65 6/20/2009, 5:01 PM46


SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON MARCH 31, 2009

[Rs. in lacs]

For the Year Ended For the Year EndedMarch 31, 2009 March 31, 2008

SCHEDULE “M”INCOME

Sales & Pipe Coating Receipts 348,795.72 221,884.18

Other Income 6,199.32 354,995.04 4,292.43 226,176.61

354,995.04 226,176.61

SCHEDULE “N”RAW MATERIALS AND STORES

A. Raw Materials Consumed:Opening Stock of Raw materials 20,656.21 15,335.66Add : Purchases of Raw Materials 344,445.83 156,549.55

365,102.04 171,885.21Less: Closing Stock of Raw Materials 85,324.02 20,656.21

279,778.02 151,229.00B. Consumption of stores

Opening stock of stores 4,285.73 2,925.88Add: Purchase of stores 7,379.21 8,933.71

11,664.93 11,859.59Less: Closing Stock of Stores 5,240.69 4,285.73

6,424.54 286,202.26 7,573.86 158,802.86C. Change in Finished Goods & WIP (31,916.93) (5,365.99)

254,285.33 153,436.87

SCHEDULE “O”EMPLOYEES’ REMUNERATION & BENEFITSSalaries,Wages & Bonus 4,707.50 4,776.77Staff Welfare 773.77 586.57Contribution to Provident and other Funds 831.05 578.20

6,312.31 5,941.54

SCHEDULE “P”OTHER EXPENSESConveyance 59.87 104.97Travelling Expenses 422.57 409.62Postage, Telegram and Telephones 131.12 130.92Printing and Stationery 117.27 119.87Rent, Rates & Taxes 523.16 547.18Electricity Charges 73.01 127.71Professional Charges 825.51 369.56Repair and Maintenance (Plant ) 119.39 216.82Repair and Maintenance (Building) 60.28 76.34Repair and Maintenance (Others) 376.31 338.86Insurance 234.00 198.69Auditors’ Remnuneration 18.00 14.00Vehicle Expenses 180.46 147.51General Expenses 2,078.52 1,509.19Agency Commission 94.78 972.75Prepayment, Syndication, Processing fees to Bank 685.13 470.80Bank Charges 4,389.43 2,604.12

10,388.83 8,358.93

Schedules

PSL-37-56.p65 6/20/2009, 5:01 PM47


Schedules

SCHEDULE “Q” - NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2009.

1. SIGNIFICANT ACCOUNTING POLICIES :

a. Method of AccountingThe accounts have been prepared to comply in all material aspects with applicable principles in India and the AccountingStandards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act.

b. InventoriesThe raw materials, stores and spare parts are valued at cost, which is arrived on FIFO basis. Work in progress, semi finishedgoods and finished goods are valued at cost or at the net realisable value, whichever is lower. Cost of Inventories comprisesof all costs of purchase (other than refundable duties and taxes), costs of conversion & other costs incurred in bringing theinventories to their present condition and location. Costs of raw materials, packing materials and stores and spares aredetermined by the average method. Cost of work in process and finished goods inventories are determined by the absorptioncosting method.

c. DepreciationDepreciation is provided from the date the assets have been installed and put to use on written down value method at therates and in the manner prescribed by schedule XIV to the Companies Act, 1956. Lease hold land is being amortised overthe period of lease. Depreciation on additions to assets or on sale-discardement of assets, is calculated pro-rata from themonth of such addition or upto the month of such sale/discardment, as a case may be.

d. Research and Development ExpenditureRevenue Expenditure is charged to Profit & Loss Account and capital expenditure is added to the cost of fixed assets in theyear when it is incurred.

e. Revenue Recognition/IncomeRevenue Income is recognised on accrual basis except where mentioned otherwise, in particular:I. Sales revenue is recongnised when it is earned and no significant uncertainty exist as to its realisation or collection.

Sales are net of sales return and trade discounts. Rebate, claims and discounts are accounted for as and whendetermined. Deductions made have been reduced from the Sales where found necessary.Export sales are accounted on the basis of acceptance by the customers and on the basis of export bill of lading.Export sales is accounted as per the prevailing exchange rate on the date of transaction.Revenue from services is recongnised on rendering of services.

ii. Gross Sales include excise duty collection of Rs. 25512.46 lacs, Service Tax, Sales Tax and Freight charged in invoices.iii. The pipe coating income is recognised after inspection, approval by customers and after dispatch.iv. Interest income is taken on accrual basis. Interest Income of Rs. 769.75 lacs netted off against interest payment during

the year. (Previous year interest income of Rs. 599.61 lacs netted off against interest payment) wherever applicable.v. Dividend income on investments are accounted for when the right to receive the payment is established.vi. Expenditure are accounted for on accrual basis and provisions are made for all known liabilities.

f. Treatment of expenditure during construction period:Expenditure in the case of new units and substantial expansion of existing units during the construction period is includedin the work in progress and the same is allotted to the respective Fixed Assets on the completion of the construction.

g. Fixed Assetsi. Fixed assets are stated at cost of acquisition and installation. The cost includes freight, taxes and related incidental

expenses less Modvat Credit.ii. The company has erected factory building sheds and installed plant and machinery on lease hold land. The company

had incurred some developmental expenditure which was earlier in CWIP on factory building, plant and on leasehold land which increaes the future benefits from the existing assets beyond its previously assessed standard ofperformance i.e. increase in capacity, modernisation & upgradation.

h. Foreign Currency Transactionsi. a. The company is exposed to currency fluctuations on foreign currency transactions. With a view to minimize the

volatility arising from fluctuations in the currency rates, the company follows established risk managementpolicies including the use of exchange forward contracts and other derivative instruments.

b. Foreign currency transactions are recorded at the exchange rate prevaliling on the date of such transactions.Monetary assets and liabilities in foreign currency as at the Balance Sheet. Gains and losses arising on accountof difference in foreign exchange rates on settlement / translation of monetary assets and liablities are recognizedin the Profit and Loss Account.

c. In respect of forward contracts assigned to the foreign currency assets as at the balance sheet date, the proportionatepremium / discount for the period up to the date of balance sheet is recognized in the profit and loss account.The exchange difference measured by the change rate between the inception of forward contract and date ofbalance sheet is applied on foreign currency amount of the forward contract and is recognized in the profit andloss account.

ii. All loans and deferred credits repayable in foreign currency and outstanding at the close of the year are expressed inIndian currency at the appropriate rate of exchange prevailing on the date of Balance Sheet.

iii. Balances in the form of Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year,are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of Balance Sheet.Resultant gain or loss is accounted during the year.

PSL-37-56.p65 6/20/2009, 5:01 PM48


Schedules

iv. Exchange differences relating to Fixed Assets are adjusted in the cost of the assets. The Company has opted foraccounting the exchange differences arising on reporting of long term foreign currency monetary items in line withCompanies (Accounting Standards) Amendment Rules 2009 on Accounting Standard 11 (AS-11) notified by Governmentof India on March 31, 2009. Accordingly the effect of exchange differences on FCCB’s / ECB’s of the Companyamounting to Rs. 436.67 Lacs is accounted by addition or deduction to the cost of the assets so far it relates todepreciable capital assets and in other cases by transfer to “Foreign Currency Monetary Items Translation DifferenceAccount” to be amortised in subsequent period.

Derivative InstrumentsI. The company has entered into the following derivative instruments.

a. Forward Exchange contracts (being a derivative instrument), which are not intended for trading or speculative purposes,but for hedge purposes, to establish the amount of reporting currency required or available at the settlement date ofcertain payables and receivables.Forward Exchange Contracts entered into by the Company as on March 31, 2009 : N I L

b. Interest Rate Swaps to hedge against fluctuations in interest rate changes :No of Contracts : N I LNotional Principal : N I L

c. Currency Swaps (other than forward exchange contracts stated above) to hedge against fluctuations in changes inexchange rate.No of Contracts : N I LNotional Principal : N I L

II. The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are givenbelow :

Receivables/(Payables) Receivables/(Payables)

(Rs. in Lacs) In Foreign Currency (USD)

2008-2009 2008-2009

211442.50 415000000

III. Derivative Instruments (causing an unhedged foreign currency exposure) N I L

i. Investmentsi. Investments are of long term nature and are stated at cost of acquisition, less any diminishing in the value other then

temporary.ii. The investments in companies under the same management and its subsidiaries whose shares are unquoted are

valued at cost. The Management is of the opinion that there is no diminishing value on these Investments.

j. Retirement Benefitsi. Contributions to defined contribution schemes such as Provident Fund & Family Pension Fund all charged to the

Profit & Loss Account as incurred.ii. Gratuity to employees is covered under the Group Gratuity cum Life Assurance Scheme and superannuation to

employees is covered under Group Superannuation scheme of Life Insurance Corporation of India and annualcontribution to such schemes are charged to Profit & Loss Account. Accrued liability upto the date of Balance sheetis provided.

iii. For the year ended March 31, 2009, provision for Employees Benefits amounting to Rs.63.69 Lacs towards LeaveEncashment has been made to SBI Life Insurance Co. Ltd., Mumbai. The actual liability as per acturial valuationamounts to Rs.177.34 Lacs

k. Borrowing CostInterest & other borrowing costs on specific borrowings relatable to the qualifying assets are capitalised. Other interestsand borrowing costs are charged to Revenue.

l. Cash Flow StatementThe Cash Flow statement is prepared by the indirect method set out in Accounting Standard - 3 on Cash Flow Statementand presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalentspresented in the cash flow statement consists of cash in hand and demand deposits with banks as on the Balance Sheetdate.

m. ProvisionsA provision is recognised when there is a present obligation as a result of past event, it is probable that an outflow ofresources will be required to settle the obligations and in respect of which reliable estimate can be made. Provision is notdiscounted to its present value and is determined based on the best estimate required to settle the obligation at the yearend date. These are reviewed at each year end date and adjusted to reflect the best current estimate.

n. Segment ReportingThe Group is engaged in the business of production of steel products which in the opinion of the management is consideredthe only business segment in the context of Accounting Standard - 17 on Segmental Reporting. Also, the Group does notconsider any significant difference as regards the risks and returns of the product with reference to export and domesticsales. Therefore, Segment information as required by Accounting Standard - 17 is not applicable.

PSL-37-56.p65 6/20/2009, 5:01 PM49


Schedules

o. Related party and Key Management Personnel DisclosureA. Name of the Party and the relationship

i. PSL Corrosion Control Services Ltd. : 100% Subsidiary Companyii. Pipeline Systems Ltd., Mauritius : 100% Subsidiary Companyiii. PSL USA INC., Delaware, USA : 100% Subsidiary Companyiv. BHI Ltd.v. Broken Hills International Ltd.vi. Eurocoustic Products Ltd. Companies in which control exists directly / indirectlyvii. Punj International Pvt. Ltd.viii. Punj Investments Pvt. Ltd.ix. PSL FZE, Sharjah. : 100% Subsidiary Company of Pipeline Systems Ltd., Mauritiusx. PSL North America LLC. : JV Company of PSL USA INC, Delware, USA, (78% holding)

Ashok Punj : Managing DirectorM. M. Mathur : DirectorR. K. Bahri : DirectorG. S. Sauhta : DirectorD. N. Sehgal : DirectorS. P. Bhatia : DirectorC. K. Goel : DirectorG. Gehani : Director & Co. Secretary

B. Nature of Transaction (Rs. in lacs)

Sr. Particulars Key Subsidiary Companies in which controlNo. Personnel exists directly/indirectly

1. Dividend Paid Nil 107.50 68.352. Purchase of Goods Nil Nil 13.993. Purchase of Capital Goods Nil 3.80 10.934. Reimbursement of Expenses Nil 308.62 178.605. Lease Rental Nil Nil 15.156 Remuneration 696.85 Nil Nil

p. LeaseOperating lease payments are recognized as expenditure in the profit and loss account on a straightline basis, which isrepresentative of the time pattern of benefits received from the use of assets taken on lease. Lease rentals in respect ofoperating lease are recognized as income over the lease period.

q. Earning Per Share

The Company reports basic and diluted Earnings Per Share in accordance with Accounting Standard 20 on Earning PerShare. Basic Earnings per share is computed by dividing the net profit or loss for the year by the weighted average numberof equity shares outstanding during the year. Diluted Earnings Per Share is computed by dividing the net profit or loss forthe year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of alldilutive potential equity shares, except where the results are anti-dilutive.

2008-2009 2007-2008

Weighted average number of shares at the beginningand at the end of the year. 42710911 40022160Net Profit after tax available for Equity Share holders (Rs. in Lacs) 8592.93 8477.04Basic Earnings per share (Rs.) 20.12 21.18Diluted Earnings per share (Rs.) 19.85 20.88

r. Management EstimatesThe preparation of financial statements in conformity with generally accepted accounting principles requires estimatesand assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabiltieson the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.Actual results could differ from these estimates and the differences between actual results and estimates are recognised inthe periods in which the results are known / materialize.

s. Accounting for Taxes on Income

Income Taxes are accounted for in accordance with Accounting Standard 22 on Accounting for taxes on income. Incometaxes comprise both current and deferred tax.

Current tax is measured at the amount expected to be paid to / recovered from the revenue authorities, using applicabletax rates and laws. The company offsets advance payments and provisions for current tax and disclose the net amount itintends to settle and where it has a legally enforceable right to set off the recognised amount.

The tax effect of the timing differences that result between taxable income and accounting income and are capable ofreversal in one or more subsequent periods are recorded as a deferred tax assest or a deferred tax liability. Deferred taxassests and liabilities are recognized for future tax consequences attributable to timing differences.

They are measured using the substantial enacted tax rates and tax regulations.

}

PSL-37-56.p65 6/20/2009, 5:01 PM50


Schedules

The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonablecertain that sufficient future taxable income will be available against which the deferred tax assests can be realized.

Fringe Benefit Tax (FBT) payable under the provisions of section 115WC of the Income Tax Act, 1961 is in accordance withthe Guidance note on Accounting for Fringe Benefit Tax issued by the ICAI regarded as an additional income tax andconsidered in determination of the profits for the year. Tax on distributed profits payable in accordance with the provisionsof section 115 O of the Income Tax Act, 1961 is in accordance with the Guidance Note on Accounting for CorporateDividend Tax regarded as a tax on distribution of profit and is not considered in the determination of profits.

(Rs. in Lacs)

2008-2009 2007-2008

Deferred Tax Liabilities - Depreciation Differences 52.71 164.65Deferred Tax Assets - Disallowances and others 10.20 3.40Net Deferred Tax Liability / (Assets) 42.51 161.25

t. Sundry Debtors/Loans & AdvancesSundry Debtors, Creditors and other advances are subject to confirmation. The effect of the same, if any, which are notlikely to be material, will be adjusted at the time of confirmation. Sundry creditors for purchases includes Rs. 213,623.14Lacs being buyers’ credit availed by the Company for the purchase of Raw Materials.

u. Impairment of Assets:In the opinion of the Company’s Management , there is no impairment to the assets to which Accounting Standard 28 —“Impairment of Assets” applied requiring any revenue recognition.

v. Contingent Liabilities

Contingent liabilities as defined in Accounting Standard 29 are disclosed in the notes to accounts. Provisions are made ifit became probable that an outflow of future economic benefits will be required for an item previously dealt with it as acontingent liability.

2008-2009 2007-2008a) COUNTER GUARANTEES GIVEN BY THE

COMPANY FOR BANK GUARANTEES Rs. 111,107.98 Lacs Rs. 70,759.38 Lacs(Includes Standby Letter of Credit (SBLC) given by abank in India amounting to Rs. 31,200 Lacs (equivalentto USD 78 mn) as a security for Tax Exempt Variable RateDemand Revenue Bonds - Series 2000A and TaxableVariable Rate Demand Revenue Bonds - Series 2000Bissued by Mississippi Business Finance CorporationUSA on behalf of Company’s wholly owned subsidiary).

b) Other Guarantees given by the Company Rs. 19,706.93 Lacs Rs. 1,587.17 Lacson behalf of Associate & Subsidiary Company

c) Letter of Credit Outstandings (Materials not received) Rs. 1,457.68 Lacs Rs. 13,489.47 Lacsd) Bills Discounting NIL Rs. 3,214.07 Lacse) Estimated amount of contracts remaining to be executed Rs. 3,000.00 Lacs Rs. 2,500.00 Lacs

on capital account and not provided for (net of advances)

f) Income Tax Assessments completed upto AY 2006-07 (March 2006). Demand raised by the Department amountingto Rs.154 Lacs is contested before CIT (Appeal) Mumbai. The Department raised the demand of Rs.723 Lacs for AY2005-06 u/s 143(3) of the Act read with section 263 of the Act. Company has prefered an appeal before ITAT challengingthe commissioner directive u/s 263 which is pending before the tribunal.

g) Gujarat Water supply & Sewerage Board (GWSSB), a Government of Gujarat Undertaking and a regular customer ofthe Company has made a reference to “Gujarat Public Works Contracts Disputes Arbitration Tribunal” for settlementof some diputes,including a claim againt the Company arising out of a routine contract awarded earlier to theCompany, the performance of which was hit by force majeure conditions. As company has since challenged thejurisidiction of aforesaid tribunal, the matter is pending. Hence at this stage no provision has been made in theattached accounts towards any possible liability on this account.

h) The renewal of leave & licence admeasuring to 329216 Sqm (Area) of Kandla Port Trust is under progress before thecompetent authority.

w. Impact of issue of foreign currency convertible bonds (FCCB’S)

a) In September, 2005 the Company had issued Zero Coupon Foreign Currency Convertible Bonds (FCCB’S) worthUS $40 Million. As per terms of issue , these Bonds are convertible into fully-paid and pari passu ranking equityshares of Rs.10 each at premium of Rs. 224.54 on or any day prior to 8th August, 2010. The said Bonds, unlessconverted or redeemed earlier will be redeemed at 143.64 percent of their principal amount on 7th September, 2010being the prefixed maturity date.

b) Such Bonds worth US$ 3,750,000 have already been converted into 8661511 equity Shares till date.

c) The bonds are listed on the Singapore Stock Exchange.

d) The Board of Directors have approved in principal to buyback the Zero Coupon Convertible Bonds due for redemptionin September, 2010, amounting to USD 2.50 Million, subject to the approval from Reserve Bank of India.

PSL-37-56.p65 6/20/2009, 5:01 PM51


2. LICENCED AND INSTALLED CAPACITY

NAME UNIT LICENCED & INSTALLED2008-2009 2007-2008

Spiral Arc Welded Pipes Mt. 1,100,000 1,100,000 Coating On Steel Pipes Mtrs. NA NA Anode Mt. 1,500 1,500 Wire Mesh Sqm. 720,000 720,000 Outer Wrap Sqm. 2,500,000 2,500,000 Rebar Coating NA NA

3. PRODUCTION, OPENING AND CLOSING STOCK

PRODUCTION OPENING STOCK CLOSING STOCK

Quantity Quantity Quantity Quantity Quantity QuantityNAME UNIT 2008-2009 2007-2008 2008-2009 2007-2008 2008-2009 2007-2008

1. HSAW Pipes Mt. 468,812.210 403,928.794 23,751.527 29,890.919 15,477.318 23,751.527

2. Coating on Steel Pipes/Jobs Mtrs. Turnkey Jobs Turnkey Jobs Turnkey Jobs

3. Anodes Kgs. 101,574.420 708,225.200 167.600 129,797.260 NIL 167.600

4. Wire Mesh Kgs. NIL NIL 74.550 74.550 74.550 74.550

5. Outer Wrap Sqm. NIL 628,361.250 2,723.250 50,227.000 2,723.250 2,723.250

4. SALES TURNOVER & COATING JOBS

2008-2009 2007-2008NAME Unit Quantity Value Quantity Value

(Rs. in lacs) (Rs. in lacs)

1. HSAW Pipes M.T 477,086.419 288,891.09 410,068.186 158,447.23 2. Coating on Steel Pipes / — - 44,592.73 - 49,628.37

Jobs Rebar Coating — - 2,370.80 - 1,020.65Project Equipment Divn (Daman) — - 11,367.04 - 7,137.11

3. Anodes Kgs. 101,742.020 227.43 837,854.860 1,837.10 4. Induction Bending — - 806.86 - 1,961.46 5. Wire Mesh Kgs. - Captive Consumption - Captive Consumption

6. Outer Wrap SQM - Captive Consumption 675,865.000 Captive Consumption

7. Others — - 539.77 - 1,852.27

348,795.72 221,884.18

5. RAW MATERIAL CONSUMPTION (Rs. in lacs)

2008-2009 2007-2008NAME Unit Quantity Value Quantity Value

1 H. R. Coil Mt. 537872.31 248,536.65 418265.957 121,713.132 Flux Mt. 2127.13 1,092.60 1596.395 724.863 Filler Wire Mt. 1827.59 1,585.51 1410.357 923.924 M. S. Wire Kgs. - - 49887.705 27.605 Epoxy Powder Mt. 1127.48 2,085.71 594.982 1,105.006 Adhesive Mt. 650.44 963.36 409.275 428.757 Polyethylene Mt. 11735.81 8,896.47 6078.825 3,959.308 Polypropylene Mt. 199.13 147.54 10.800 7.319 Inner Wrap Sqm. 1015184.43 84.88 3154841.575 266.5810 Outer Wrap Sqm. 568693.77 182.69 1339969.611 520.0311 Coal Tar Enamel Mt. 4783.23 809.71 10420.588 2,376.7312 Coal Tar Tape Sqm. 2,007.26 2.77 36928.950 28.2813 Polyethylene Tape Sqm. 2720297.80 3,327.15 3003641.900 2,026.8314 Modulate Pitch Kgs. - - 347223.000 74.1915 Wiremesh Sqm. 510463.10 359.62 1850599.829 1,376.0216 Cement Mt. 8024.22 305.61 38183.610 1,336.7517 Sand Mt. 15048.96 42.42 11656.540 30.2318 Iron Ore Mt. 25819.13 388.74 121702.716 3,142.1319 Aluminium Kgs. 53718.00 58.55 848006.000 935.2420 Zinc Kgs. 2936.16 3.18 40959.659 31.5221 Coating Materials and others 10,904.86 10,194.61

T O T A L : 279,778.02 T O T A L : 151,229.0022 Stores & Consumables 6,424.24 7,573.86

286,202.26 158,802.86

Schedules

PSL-37-56.p65 6/20/2009, 5:01 PM52


Schedules

[Rs. in lacs]

2008-09 2007-086. Value of Imports (CIF)

Raw Materials 217,885.86 83,052.33Stores 712.61 2,991.59

7. Expenditure in Foreign CurrencyTravelling Expenses 130.42 128.95Agency Commission & Others 94.78 972.00

8. Earning in Foreign CurrencyPipe Sales & Pipe Coating Receipts (FOB) 7,151.72 55,064.30

9. Value of Consumption of Raw MaterialsImported 176,586.18 82,674.43Indigenous 103,191.84 68,554.57

10. Value of Consumption of StoresImported 947.95 215.27Indigenous 5,476.29 7,358.59

11. Directors’ RemunerationSalary, Allowances & Perquisites 610.61 506.08Contribution to P.F and Other Funds 86.24 72.12

12. Auditors’ Remunerationfor Statutory Audit 13.00 9.00for Tax Audit 2.00 2.00for Tax Matters 0.75 0.75for Other Services 1.50 1.50for Out of Pocket Expenses 0.75 0.75

13. Loans & Advances Includes Amount Receivable from Companies under Same Management Rs. 492.03 Lacs (PreviousYear Rs.182.16 Lacs)

14. The Company is in the process of identifying the suppliers who are Small Scale Industries & Undertaking. The amountdue to them has not been quantified during the year.

15. In the opinion of the Board the Current Assets are approximately of the value, if realised, in the ordinary course of thebusiness. The provision for Depreciation and for all known liabilities are adequate and not in excess of the amountreasonably considered necessary. All the income accrued has been accounted for in the books.

16. Schedules A to Q forming an integral part of the Balance Sheet and Profit and Loss Account are duly authenticated.17. The previous year figures have been regrouped/rearranged wherever necessary to conform the current year classification.





PSL-37-56.p65 6/20/2009, 5:01 PM53


CASH FLOW STATEMENT FOR THE PERIOD ENDED ON 31ST MARCH 2009(PURSUANT TO THE LISTING AGREEMENT WITH STOCK EXCHANGES)

[Rs. in lacs]

Particulars 2008-09 2007-08

A) CASH FLOW FROM OPERATING ACTIVITIESNET PROFIT BEFORE TAX & EXTRA-ORDINARY ITEMS 12,672.93 12,416.04ADJUSTED FORAdd : DEPRECIATION 5,706.64 5,119.60INTEREST (NET) 10,071.93 5,785.56PRELIMINARY EXPENSES WRITTEN OFF NIL NILTECHNICAL KNOWHOW WRITTEN OFF NIL NILLess: Bad Debts Provision NIL NILLess: PROFIT ON SALE OF FIXED ASSETS 2.45 2.34Add : LOSS ON INVESTMENTS NIL NILLess: DIVIDEND INCOME NIL (105.00)

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 28,449.05 23,213.86Changes inTRADE RECEIVABLES (18,531.70) (12,062.33)INVENTORIES (97,539.70) (12,046.39)TRADE PAYABLES 1,68,684.13 22,293.60LOANS AND ADVANCES (34,760.38) (5,039.29)

CASH GENERATED FROM OPERATIONS [A] 46,301.40 16,359.47

TAX PAID/PAYABLE/ADVANCE TAX (3,918.63) (2,530.94)TECHNICAL KNOW HOW FEESNET CASH FROM OPERATING ACTIVITIES 42,382.77 13,828.53

B) CASH FLOW FROM INVESTING ACTIVITIESSALE OF FIXED ASSETS 3.65 3.80PROFIT ON SALE OF ASSETS 2.45 0.00INTEREST RECEIVED 769.75 599.61DIVIDEND RECEIVED 0.00 105.00SALE/ (PURCHASE) OF INVESTMENTS (1,768.67) (12,115.17)PURCHASE OF FIXED ASSETS (28,307.46) (4,788.43)NET CASH USED IN INVESTING ACTIVITIES [B] (29,300.28) (16,195.19)

C) CASH FLOW FROM FINANCING ACTIVITIESPROCEEDS FROM ISSUE OF SHARESINCLUDING SHARE PREMIUM 0.68 16,012.59INTEREST PAID (10,841.68) (6,385.17)LOANS RECEIVED / REPAYMENTS (NET) 1,245.55 (4,985.38)DIVIDEND PAID (2,489.75) (2,423.63)NET CASH USED IN FINANCING ACTIVITIES [C] (12,085.20) 2,218.41NET INCREASE / (DECREASE) IN CASH AND [A+B+C] 997.29 (148.27)CASH EQUIVALENTCASH AND CASH EQUIVALENT - OPENING [A] 11,064.57 11,212.84CASH AND CASH EQUIVALENT - CLOSING [B] 12,061.86 11,064.57

[B-A] 997.29 (148.27)

Auditors’ Certificate

We have verified the above Cash Flow Statement of PSL Limited derived from the audited financial statements for the yearended March 31, 2009 and found the same is drawn in accordance therewith and also with the requirements of clause 32 ofthe listing agreements with Stock Exchange.

for Suresh C. Mathur & Co.Chartered Accountants

Place: Mumbai Suresh C. Mathur

Date : 28th May, 2009 PartnerM. No. 1276

Cash Flow Statement





PSL-37-56.p65 6/20/2009, 5:01 PM54


Part IV of Schedule VI of Companies Act, 1956 (As amended)Balance Sheet Abstract and Company’s General Business Profile

1. REGISTRATION DETAILS :

Registration No. State Code

Balance Sheet Date

2. CAPITAL RAISED DURING THE PERIOD (Rupees in lacs)

Public issue Rights Issue

Bonus issue Private Placement

3. POSITION OF M0BILISATION AND DEPLOYMENT OF FUNDS (Rupees in lacs)

Total Liabilities Total Assets

Sources of Funds :

Paid-up Capital Reserves & Surplus

Secured Loans Unsecured Loans

Application of Funds :

Net Fixed Assets Investments

Net Current Assets Misc. Expenditure

Accumulated Losses

4. PERFORMANCE OF COMPANY (Rupees in lacs)

Turnover Total Expenditure

Profit Before Tax Profit After Tax

Earning per Share Dividend Rate(in Rupees)

5. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY(as per Monetary terms)

ProductNIC Code No. Description :

NIC Code No ProductDescription :

NIC Code No. ProductDescription :

0 0 2 3 9 5 5 6

OTHER TUBES, PIPES AND HOLLOWPROFILES IN SPIRAL OR STRAIGHT WELDEDSEAM OF DIA 300 MM & ABOVE AND MADEOUT OF IRON STEEL OF ALL TYPE

EXTERNAL AND INTERNAL COATING OFLINE PIPES

ANTI-CORROSION COATINGS OFRE-ENFORCED REBARS

# 25% paid in February 2009 and 25% is subject to Shareholders’ Approval

3 1 - 0 3 - 0 9

N I L N I L

N I L N I L

1 2 6 1 3 1 . 7 7 1 2 6 1 3 1 . 7 7

4 2 5 8 . 1 9 5 8 5 9 3 . 4 9

6 8 4 3 9 . 6 9 1 9 4 2 6 . 9 2

3 8 2 6 5 . 1 6 N I L

N I L

6 1 9 6 3 . 8 3 1 2 7 3 . 7 5

3 5 4 9 9 5 . 0 4 3 4 2 3 2 2 . 1 1

1 2 6 7 2 . 9 3 8 5 9 2 . 9 3

2 0 . 1 2 5 0 % #

3 3 1 9

3 4 5 0

3 4 5 0

Balance Sheet Abstract

PSL-37-56.p65 6/20/2009, 5:01 PM55


1 Name of the Subsidiary(s) M/S. PSL Corrosion M/s. Pipeline M/s. PSL USA INC **Control Services Limited. Systems Limited*

2 Financial Year of the Subsidiary 31st March, 2009 31st March, 2009 31st March, 2009Company(s) ended on

3 Financial Year of PSL Ltd. - being 31st March, 2009 31st March, 2009 31st March, 2009the Holding Company ended on

4 Shares of the Subsidiary Companyheld by the Company on 31st March, 2009

a) Number 1400020 24460815 20003083b) Face Value Rs.10 per share USD 1/- per share USD 1/- per sharec) Extent of share holding in the

Subsidiary Company (as on 31.03.09) 100% 100% 100%

5. Profits/(Losses) of the SubsidiaryCompany for its Financial year so far asit concerns the Members of PSL Ltd.which have not been dealt with in theaccounts of PSL Limiteda) For the Financial Year of the

Subsidiary Company Rs. 614.27 Lacs Rs. 199.00 Lacs (Rs. 78.18 Lacs)ended on 31st March, 2009(12 months)

b) For the previous Financial Year of theSubsidiary Company(s) (12 months) Rs. 354.97 Lacs Rs. (22.62) Lacs (Rs. 1286.04 Lacs)

6. The net aggregate amount of theProfits/(Losses) of the Subsidiary Company, so far as the profits are dealt in theaccounts of PSL Ltd.a) For the Financial Year ended

on 31st March, 2009 of NIL NIL NIL the Subsidiary Company

b) For the previous Financial Year of theSubsidiary Company since it became NIL NIL NIL

the Holding Company’s Subsidiary

Note(s) :(I) The amount lent by PSL Corrosion Control Services Ltd to PSL Limited as on 31st March 2009 was Rs. NIL.(II) The amount lent by Pipeline Systems Ltd to PSL Limited as on 31st March 2009 was Rs. NIL.(iii) The amount lent by PSL USA INC to PSL Limited as on 31st March 2009 was Rs. NIL.

* Accounts are consolidated with its subsidiary company namely PSL FZE.** Accounts are consolidated with its subsidiary company namely PSL North America LLC.

PSL LIMITEDSTATEMENT UNDER SECTION 212 OF THE COMPANIES ACT 1956 RELATING TO

PSL CORROSION CONTROL SERVICES LIMITED, PIPELINE SYSTEMS LIMITED & PSL USA, INCAS ON 31st MARCH, 2009

Statement of Subsidiary Companies


(SURESH C. MATHUR) M. VENKATESH K. RAMANATHAN ALOK PUNJ ASHOK PUNJ

Partner Sr. Vice President Chief Finance Officer G.S. SAUHTA M.M. MATHUR

M.No. 1276 (International Finance) D.N. SEHGAL R.K. BAHRI

S.P. BHATIA C.K. GOEL

Place: Mumbai G. GEHANI (Director & Company Secretary)


PSL-37-56.p65 6/20/2009, 5:01 PM56

Auditors’ ReportConsolidated Balance SheetConsolidated Profit & Loss

Consolidated SchedulesConsolidated Cash Flow Statement

Cons

olid

ated

Sta

tem

ents

Cons

olid

ated

Sta

tem

ents

Cons

olid

ated

Sta

tem

ents

Cons

olid

ated

Sta

tem

ents

Cons

olid

ated

Sta

tem

ents

PSL Consolidated-57-78.p65 6/20/2009, 5:01 PM57


Consolidated Auditors’ Report

To,

The Members of PSL Limited

We have audited consolidated Balance Sheet of PSLLimited (the company) and its subsidiary as at 31stMarch, 2009 and the consolidated Profit and LossAccount for the year then ended annexed thereto andthe Consolidated Cash Flow Statement for the yearended on that date. These financial statements arethe responsibility of the company’s management. Ourresponsibility is to express an opinion on thesefinancial statements based on our audit.

We conducted our audit in accordance with generallyaccepted auditing standards in India. These standardsrequire that we plan and perform the audit to obtainreasonable assurance whether the financial statementsare prepared, in all material respect, in accordancewith an identified financial reporting framework andare free of material misstatements. An audit includes,examining on a test basis, evidence supporting theamounts and disclosures in the financial statements.An audit also includes assessing the accountingprinciples used and significant estimates made; bymanagement, as well as evaluating the overallfinancial statements. We believe that our auditprovides a reasonable basis for our opinion.

We did not audit the financial statements of PSL FZE(Step down subsidiary of PSL Limited), PSL USA Inc.,(100% subsidiary of PSL Limited) and PSL NorthAmerica LLC, (78% JV Company of PSL USA, INC)These financial statements and other financialinformation have been audited by other auditorswhose reports have been furnished to us, and ouropinion is based solely on the report of other auditors.

We report that the consolidated financial statementshave been prepared by the Company in accordancewith the requirements of Accounting Standard (AS)21 on Consolidated Financial statements, issued bythe Institute of Chartered Accountants of India andon the basis of the separate audited financialstatements of the Company and its subsidiary includedin the Consolidated Financial Statements.

On the basis of the information and explanations givento us and on the consideration of separate Auditreports on subsidiary, we are of the opinion that thesaid consolidated financial statements give a true andfair view in conformity with the accounting principlesgenerally accepted in India.

a) In the case of the consolidated Balance Sheetof the consolidated state of affairs of theCompany and its subsidiaries as at 31st March,2009;

b) In the case of the consolidated Profit and LossAccount, of the consolidated results ofoperations of the Company and its subsidiariesfor the year then ended and

c) In the case of the consolidated cash flowstatement, of the consolidated cash flows ofthe company and its subsidiaries for the year

then ended.

For Suresh C. Mathur & CompanyChartered Accountants

SURESH C. MATHURPlace : Mumbai PartnerDate : 28th May, 2009 Membership No.: 1276



CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2009[Rs. in lacs]

Schedule As at As atMarch 31, 2009 March 31, 2008

SOURCE OF FUNDS

SHARE HOLDERS’ FUNDSA) Share Capital A 4,258.19 4,258.13B) Reserves & Surplus B 64,795.17 69,053.36 52,709.78 56,967.92

LOAN FUNDSA) Secured Loans C 112,956.08 92,169.38B) Unsecured Loans D 1,273.75 114,229.83 999.25 93,168.63Minority Interest 2,730.48 1,778.42

Deferred Taxtation Liability (1,468.98) 155.73

TOTAL 184,544.69 152,070.70

APPLICATION OF FUNDS

FIXED ASSETS EA) Gross Block (At cost) 127,202.10 78,274.34B) Less: Depreciation 34,776.05 27,468.65C) Net Block 92,426.05 50,805.69D) Add: Capital Work in Progress 37,307.07 129,733.12 13,106.77 63,912.46

INVESTMENTS F 426.18 426.18

CURRENT ASSETS, LOANSAND ADVANCESA) Inventories G 348,002.59 74,363.88B) Sundry Debtors H 54,298.74 34,596.63C) Cash and Bank Balances I 21,326.20 40,050.64D) Loans and Advances J 55,385.12 20,701.40

479,012.64 169,712.55LESS : CURRENT LIABILITIES& PROVISIONSA) Current Liabilities K 417,810.01 76,860.79B) Provisions L 6,817.25 6,791.70

424,627.25 83,652.48


MISCELLANEOUS EXPENDITURE M NIL 1,671.99

TOTAL 184,544.69 152,070.70

NOTES TO ACCOUNTS R

Consolidated Balance Sheet










CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009[Rs. in lacs]

Schedule For the Year Ended For the Year EndedMarch 31, 2009 March 31, 2008

INCOME N 364,891.40 229,311.04

364,891.40 229,311.04EXPENDITURERaw Materials and Stores O 257,247.03 154,931.77Excise Duties and Taxes 32,942.53 17,493.40Manufacturing & Process Expenses(includes freight) 24,811.82 17,624.66Employees Remuneration & Benefits P 7,062.31 6,233.84Other Expenses Q 11,822.70 9,319.20Interest on Term Loans & Overdrafts 10,274.93 5,785.56Depreciation 6,876.70 351,038.02 5,393.78 216,782.21

PROFIT BEFORE TAXATION 13,853.38 12,528.83Less: Provision for Taxation

Current Tax 4,396.73 3,910.00Fringe Benefit Tax 91.00 86.03Deferred Tax (118.73) 4,369.00 92.84 4,088.87

PROFIT AFTER TAXATION 9,484.38 8,439.96LESS :Transfer to General Reserve 1,000.00 1,036.00Interim Dividend 1,063.51 1,168.42Proposed Dividend 1,064.55 1,064.53Tax on Proposed Dividend 180.97 180.97Tax on Interim Dividend 180.74 198.58Prior Year Expenses (161.73) 3,328.04 235.54 3,884.04

BALANCE CARRIED OVER TO BALANCE SHEET 6,156.34 4,555.92

EARNINGS PER SHARE (BASIC) Rs. 22.21 21.11

(Face Value Rs.10/- each]

EARNINGS PER SHARE (DILUTED) Rs. 21.91 20.81

NOTES TO ACCOUNTS R

Consolidated Profit and Loss Account










CONSOLIDATED SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2009

[Rs. in lacs]


SCHEDULE “A”SHARE CAPITALAuthorised :10,00,00,000 EQUITY SHARES OF RS. 10 EACH 10,000.00 10,000.00

A. Issued & Subscribed :-4,27,10,911 EQUITY SHARES OF RS. 10/- EACH(PREVIOUS YEAR 4,27,10,911) 4,271.09 4,271.09(Of the above shares 86,61,511 fully paid-up and pari passu ranking equityshares of Rs. 10/- each were allotted consequent upon conversion ofFCCB worth USD 37,500,000 Out of Total FCCB’s worth 40 MillionUSD issued by Company earlier in September 2005 )(Previous year 4,27,10,911 Equity Shares of Rs.10/- each)

B. PAID UP CAPITAL4,27,10,911 EQUITY SHARES OF RS. 10/- EACH(PREVIOUS YEAR 4,27,10,911) 4,271.09 4,271.09(Of the above shares 86,61,511 fully paid-up and pari passu ranking equityshares of Rs. 10/- each were allotted consequent upon conversion ofFCCB worth USD 37,500,000 Out of Total FCCB’s worth 40 MillionUSD issued by Company earlier in September 2005)(Previous year 4,27,10,911 Equity Shares of Rs.10/- each)

LESS: ALLOTMENT MONEY IN ARREARS PERTAINING TOTHE SHARES ALLOTTED PRIOR TO MERGER. 12.90 12.96(DIRECTORS: NIL)

4,258.19 4,258.13

SCHEDULE “B”RESERVES AND SURPLUS

A. General ReserveAs per Last Balance Sheet 4,700.15 3,664.15Less : Investment in Subsidiary Company 12.29 12.29Add: Transfer from Profit & Loss Account 1,000.00 5,687.86 1,036.00 4,687.86

B. Security PremiumAs per Last Balance Sheet 29,092.11 12,747.23Add: Additions during the year Nil 15,152.73Less: Provision for Redemption Premium Nil NILAdd: Redemption Premium Added Back Nil 1,192.15

29,092.11 29,092.11Less: Allotment Money in Arrears 95.93 28,996.18 96.55 28,995.56(Directors Nil)Foreign Exchange Difference on consolidation 3,728.52 (1,024.88)

C. Investment Allowance Utilised ReserveAs Per Last Balance Sheet 139.64 139.64

D. Profit and Loss AccountAs per last Balance Sheet 20,086.63 15,355.65Add: Transfer during the year 6,156.34 26,242.97 4,555.94 19,911.59

64,795.17 52,709.78

Schedules




[Rs. in lacs]


SCHEDULE “C”SECURED LOANS

A. Term Loan from Financial Institutions, Banksand Non Banking Financial Institutions 10,353.64 14,591.39[Secured against first charge on some of theimmovable & moveable assets of the Company]

B. From Scheduled Banks 63,077.88 46,224.41[Secured against hypothecation of CurrentAssets and second charge on the assetsas per [A] above]

C. From Scheduled Banks 46.33 65.62[Motor Vehicle Loans]

D. Interest free sales tax deferred schemeof Govt. of Tamil Nadu 36.94 111.36[Secured against second charge onspecific assets of the company]

E. Tax Exempt Variable Rate Demand RevenueBonds 2007A issued by MississipiBusiness Corp USA 34,646.00 27,179.60

F. Taxable Variable Rate Demand RevenueBonds 2007A issued by MississipiBusiness Corp USA 4,795.29 3,997.00(Both secured by an SBLC issued by a Bank) 39,441.29 31,176.60

112,956.08 92,169.38

SCHEDULE “D”UNSECURED LOANS

Foreign Currency Convertible Bonds(Redeemable in 2010) (Unsecured) 1,273.75 999.25

1,273.75 999.25

Schedules



Schedules

[Rs.

in l

acs]

CO

NSO

LID

ATED

SC

HED

ULE

S FO

RM

ING

PA

RT O

F TH

E B

ALA

NC

E SH

EET A

S A

T M

AR

CH

31,

2009

SCH

EDU

LE “

E”FI

XED

ASS

ETS

GR

OS

S B

LO

CK

DE

PR

EC

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ION

NE

T B

LO

CK

Par

ticu

lars

As

atA

dd

itio

ns

Ded

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sA

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Up

toD

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Dep

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As

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1 A

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du

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g31 M

arch

1 A

pri

lfo

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eser

ve31 M

arch

31 M

arch

31 M

arch

2008

the

year

the

year

20

09

20

08

year

20

09

20

09

20

08

FREE

HO

LD L

AN

D5,165.95

465.00

NIL

5,6

30

.95

NIL

NIL

NIL

NIL

5,6

30

.95

5,165.95

LEA

SEH

OLD

LA

ND

44.58

NIL

NIL

44

.58

15.01

1.49

NIL

16

.50

28

.08

29.57

OFF

ICE

BU

ILD

ING

S125.41

NIL

NIL

12

5.4

117.24

5.05

NIL

22

.28

10

3.1

3108.17

FAC

TO

RY

BU

ILD

ING

10,716.35

19,321.11

NIL

30

,03

7.4

64,079.73

691.55

NIL

4,7

71

.28

25

,26

6.1

86,636.62

FUR

NIT

UR

E A

ND

FIX

TU

RES

472.72

132.32

NIL

60

5.0

4273.17

40.48

NIL

31

3.6

52

91

.39

199.55

PLA

NT A

ND

MA

CH

INER

Y53,914.97

28,171.39

NIL

82

,08

6.3

619,135.80

5,401.33

NIL

24

,53

8.1

25

7,5

48

.24

34,779.17

OFF

ICE

EQU

IPM

ENTS

403.43

28.69

NIL

43

2.1

2216.73

27.92

NIL

24

4.6

51

87

.47

186.70

LAB

EQ

UIP

MEN

TS

656.10

134.91

NIL

79

1.0

0215.81

66.62

NIL

28

2.4

45

08

.57

440.28

CO

MP

UT

ERS

428.59

26.38

NIL

45

4.9

7298.45

56.03

NIL

35

4.4

81

00

.50

130.14

MO

TO

R C

AR

S1,090.22

251.49

27.25

1,3

14

.46

637.52

129.97

26.04

74

1.4

55

73

.00

452.70

CO

MM

ERC

IAL

VEH

ICLE

S105.10

NIL

NIL

10

5.1

0101.03

1.22

NIL

10

2.2

52

.85

4.07

CY

CLE

S0.20

0.03

NIL

0.2

30.19

0.00

NIL

0.1

90

.04

0.02

EAR

TH

MO

VIN

G E

QU

IPM

ENTS

3,428.61

423.69

NIL

3,8

52

.30

2,489.85

294.89

NIL

2,7

84

.74

1,0

67

.57

938.76

SHED

CO

NST

RU

CTIO

N1,722.11

NIL

NIL

1,7

22

.11

443.86

160.16

NIL

60

4.0

21

,11

8.0

91,278.25

T O

T A

L78,274.34

48,955.01

27.25

12

7,2

02

.10

27,924.38

6,876.70

26.04

34

,77

6.0

59

2,4

26

.04

50,349.96

Pre

vious

Yea

r Fi

gure

s61,187.98

17,094.86

8.50

78

,27

4.3

422,081.89

5,393.78

7.04

27

,46

8.6

55

0,8

05

.70

39,106.08




[Rs. in lacs]


SCHEDULE “F”INVESTMENTS

UNQUOTED [FULLY PAID UP] AT COST(I) LONG TERM INVESTMENTS :

COMPANY UNDER SAME MANAGEMENTa) 14,70,000 Equity Shares of Rs. 10/- each

of BHI LTD. (Previous year 1470000 Shares) 147.00 147.00b) 1,50,000 Equity Shares of Rs.10/- each of

Punj International P. Ltd. 15.00 15.00(Previous year 1,50,000 Equity Shares)

c) 7,500 Equity Shares of Rs. 10/- each ofBroken Hills International Ltd. 0.75 0.75(Previous year 7,500 equity shares)

d) 2,000 Equity Shares of Rs. 100/- each ofPunj Investments Pvt Ltd. 2.00 2.00(Previous year 2,000 equity shares)

e) 8,60,000 Equity Shares of EurocousticProducts Ltd. of Rs. 10/- each(Previous Year 8,60,000 Equity Shares) 86.00 86.00[Company under the same Management]

f) 1,00,000 Equity Shares of Savvy ConsultantsPvt. Ltd. of Rs. 10/- each 10.00 260.75 10.00 260.75(Previous Year 1,00,000 Equity Shares)

(II) OTHERSa) 3 National Savings Certificates of

Rs. 10,000/- Each. 0.30 0.30b) 128 Shares @ 100/- in The Gandhidham

Mercentile Co-Op Bank Ltd. 0.13 0.13c) SBI Capital Protection Oriented Fund

(Mutual Fund) 125.00 125.00d) SBI Infrastructure Fund 50.00 175.43 50.00 175.43

436.18 436.18Less: Provision for diminution invalue of Investments [Savvy Consultants Pvt. Ltd.] 10.00 10.00

426.18 426.18

SCHEDULE “G”INVENTORIES(Certified by the Management)

Raw Materials, Consumables, Semi-finishedgoods, Work in progress 332,766.53 58,834.19

Finished Goods 15,236.06 15,529.68

348,002.59 74,363.88

Schedules




[Rs. in lacs]


SCHEDULE “H”SUNDRY DEBTORS(Unsecured but Considered Good)A. Debts outstanding for a period

of Less Than Six Months 47,483.99 28,381.12

B. Debts outstanding for a period ofMore Than Six Months 6,814.75 54,298.74 6,215.51 34,596.63

54,298.74 34,596.63

SCHEDULE “I”CASH AND BANK BALANCESA. Cash in Hand 130.34 90.03B. Funds in transit 11.80 91.72C. In Current Account with Scheduled Banks 9876.84 31,355.58D. In Deposit Account with Scheduled Banks 11,307.21 8,513.31

(Includes Rs. 6,711.81 Lacs Under Lien tothe Bank for facilities availed](Previous year Rs. 5,551 Lacs under lien) 21,326.20 40,050.64

SCHEDULE “J”LOANS AND ADVANCES(Unsecured, but considered good)I Security Deposit 43,373.22 8,808.03

(Includes Central Excise, Service Tax,VAT deposit of Rs. 40,320.23 Lacs)(Previous year Rs. 7,354.98 Lacs)

II Advance recoverable in cash orin kind or for the value 9,832.42 9,086.33

III Advance Payment against taxes 2,179.47 2,807.03

55,385.12 20,701.40

SCHEDULE “K”CURRENT LIABILITIESA. Sundry Creditors for Purchases 236,685.08 60,172.85B. Other Current Liabilities 169,606.05 7,252.48C. Mobilization Advance 11,518.87 9,435.45

417,810.01 76,860.79

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Schedules


[Rs. in lacs]


SCHEDULE “L”PROVISIONS

Provision for Taxation - Current Tax 4,789.48 4,763.94Provision for redemption of FCCB 782.25 782.25Proposed Dividend 1,064.55 1,064.53Tax on Proposed Dividend 180.97 180.97

6,817.25 6,791.70

SCHEDULE “M”MISCELLANEOUS EXPENDITURE

Pre-operative Expenses 1,671.99As per Last Balance Sheet 1,672.21Less : Transferred during the year 1,671.99 Nil 0.22 1,671.99

Nil 1,671.99

CONSOLIDATED SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDEDON MARCH 31, 2009

[Rs. in lacs]

For the year Ended For the year EndedMarch 31, 2009 March 31, 2008

SCHEDULE “N”INCOME

Sales & Pipe Coating Receipts 355,992.64 224,829.22Other Income 8,898.76 364,891.40 4,481.83 229,311.05

364,891.40 229,311.05

SCHEDULE “O”RAW MATERIALS AND STORES

A. Raw Materials Consumed:Opening Stock of Raw Materials 20,715.21 15,371.17Add : Purchases of Raw Materials 362,995.00 157,643.83

383,710.21 173,015.00

Less: Closing Stock of Raw Materials 98,349.37 285,360.84 20,705.79 152,309.21

B. Consumption of storesOpening stock of stores 4,352.65 2,950.45

Add: Purchase of stores 8,528.10 9,388.2912,880.75 12,338.74

Less: Closing Stock of stores 5,563.46 7317.29 4,350.20 7,988.54

C. Change in Finished Goods & WIP (35,431.10) 5,365.99

257,247.03 165,663.74



CONSOLIDATED SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDEDON MARCH 31, 2009

[Rs. in lacs]


SCHEDULE “P”EMPLOYEES’ REMUNERATION & BENEFITSSalaries,Wages & Bonus 5,314.58 5,056.30Staff Welfare 916.68 599.34Contribution to Provident and other Funds 831.05 578.20

7,062.31 6,233.84

SCHEDULE “Q”OTHER EXPENSESConveyance 66.17 112.68Travelling Expenses 542.86 446.60Postage, Telegram and Telephones 145.02 138.10Printing and Stationery 144.59 134.82Rent, Rates & Taxes 663.30 575.38Electricity Charges 74.59 220.22Professional Charges 828.51 369.56Repair and Maintenance (Plant ) 122.77 228.75Repair and Maintenance (Building) 61.24 119.26Repair and Maintenance (Others) 391.99 348.57Insurance 280.06 211.31Auditors’ Remnuneration 19.35 15.65Vehicle Expenses 212.50 165.15General Expenses 2,291.24 2,179.59Agency Commission 199.78 972.75Prepayment, Syndication, Processing fees to Bank 685.13 471.60Bank Charges 4,513.75 2,609.19

11,242.87 9,319.19

Schedules



Schedules

SCHEDULE “R” - CONSOLIDATED NOTES FORMING PART OF THE ACCOUNT FOR THE YEAR ENDED31ST MARCH,2009

1. SIGNIFICANT ACCOUNTING POLICIES :

a. Method of Accounting

The accounts have been prepared to comply in all material aspects with applicable principles in India andthe Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisionsof the Companies Act.

b. Principles of Consolidation

i. The consolidated financial statements have been prepared on the following basis :

ii. The consolidated financial statements have been prepared in accordance with the accounting standards21 (AS 21) - “Consolidated Finanacial Statements”, Accounting Standard 23 (AS-23) - “Accounting forinvestments in Associates in Consolidated Financial Statements” issued by the Institute of CharteredAccountants of India.

iii. In the case of foreign subsidiaries, being non-integral foreign operations, revenue items are consolidatedat the average rate prevailing during the year. All assets and liabilities are converted at rates prevailing atthe end of the year. Any exchange difference arising on consolidation is recongnized in the exchangefluctuation reserves and in case of loss the same is charged to profit and loss account.

iv. All subsidiaries of the Company are subsidiaries since inception of their business activities. Hence thereis no capital reserve or goodwill arising on consolidation.

v. For the purpose of Consolidation, Accounting policies of the holding company have been adopted forall the entries.

vi. The financial statements of PSL Limited (The Company) and its Subsidiaries namely PSL Corrosion ControlServices Limited, Pipeline Systems Limited, Mauritius and PSL USA INC., have combined on a line byline basis by adopting together the book values of like items of assets, liabilities, income and expensesafter fully eliminating intra group balances and intra group transactions resulting in unrealized profits orlosses.

vii. The financial statements of the subsidiaries used in the consolidation are drawn upto the same reportingdate as that of the parent company i.e year ended 31st March 2009

viii.The subsidiary companies (which along with PSL Limited, the parent, constitute the group) consideredin the preparation of these consolidated financial statement are:

S No Name Country of % voting power heldincorporation as at 31st March 2009

i. PSL Corrosion Control Services Limited INDIA 100

ii. Pipeline Systems Ltd. Mauritius 100

iii. PSL USA INC USA 100

iv. PSL FZE Sharjah 100% (Subsidiary of

Pipeline Systems Ltd.)

v. PSL North America LLC USA 78% Holding by PSL USA INC

On November 1, 2007, PSL North America LLC entered into a loan agreement with MBFC. The loanagreement provides that MBFC shall issue Tax Exempt Variable Rate Demand Revenue Bonds, Series2007A and Taxable Variable Rate demand Revenue Bonds, Series 2007B and loan the proceeds thereofto the Company for use in acquiring, constructing, installing and equipping a pipe manufacturing facilityand other related activities. The amount of loan payments to be made by the Company to MBFC pursuantto the loan agreement shall be sufficient to pay the principal and interest on the bonds, as and when thebond and interest payments are due and payable. In addition, the Company is responsible for all costsand expenses related to the issuance of the bonds and the fees and charges of the trustee (Hancock Bank)and the remarketing agent (Merchant Capital)

As security for the MBFC loan agreement, the Company obtained an irrevocable transferable direct pay



Schedules

letter of credit, which expires on November 1, 2010, for up to $ 78,747,945 from JP Morgan ChaseBank, N.A. in favor of the trustee. In accordance with the reimbursement agreement with JP MorganChase Bank N.A. - PSL North America LLC is required to pay a non-refundable fee in arrears on the grossavailable amount beginning on December 31, 2007 and continuing on the last day of each March, June,September, and December thereafter to the termination date at a rate of 1% per annum. For the yearending March 31, 2009 this amounted to $ 131,247 paid to JP Morgan Chase Bank, N.A. In addition,interest on the unpaid principal amount of each advance will accrue at a rate per annum equal to theprime rate (normally JP Morgan Chase Bank, N.A.’s prime commercial rate for US dollar loans orequivalent) plus 1%.

In addition, on October 22, 2007, the State Bank of India issued an irrevocable standby letter of credit,which expires on November 17, 2010 for upto $ 78,000,000 in favor of the JP Morgan Chase Bank, N.A.This standby letter of credit was issued based on the financial condition of the Company’s parent, PSLLimited.

(ii) Investment in Associates

The Group Associates are

Name Country of incorporation % of ownership interestas at 31st March 2009

Eurocoustic Products Ltd. INDIA 48.09

Broken Hills International Ltd. INDIA 22.79

BHI Limited INDIA 49.66

Punj International Pvt. Ltd. INDIA 37.06

Punj Investments Pvt. Ltd. INDIA 14.78

These associates have not been considered for consolidation being not material to the Group.

c. Inventories

The raw materials, stores and spare parts are valued at cost , which is arrived on FIFO basis. Work inprogress, semi finished goods and finished goods are valued at cost or at the net realisable value,whicheveris lower. Cost of inventories comprises of all costs of purchase (other than refundable duties and taxes),costs of conversion and other costs incurred in bringing the inventories to their present condition andlocation. Costs of raw materials, packing materials and stores and spares are determined by the averagemethod. Cost of work in process and finished goods inventories are determined by the absorption costingmethod.

d. Depreciation

Depreciation is provided from the date the assets have been installed and put to use on written down valuemethod at the rates and in the manner prescribed by schedule XIV to the Companies Act, 1956 except in PSLUSA INC., where depreciation is provided using the Straight Line Method over the estimated useful lives ofthe various assets. Lease hold land is being amortised over the period of lease. Depreciation on additions toassets or on sale discardement of assets, is calculated pro-rata from the month of such addition or upto themonth of such sale/discardment , as a case may be.

e. Research and Devlopment Expenditure

Revenue Expenditure is charged to Profit & Loss Account and capital expenditure is added to the cost offixed assets in the year when it is incurred.

f. Revenue Recognition / Income

Revenue Income is recognised on accrual basis except where mentioned otherwise, in particular:

I. Sales revenue is recongnised when it is earned and no significant uncertainity exist as to its realisation orcollection.

Sales are net of sales return and trade discounts. Rebate, claims and discounts are accounted for as andwhen determined.

Deductions made have been reduced from the Sales where found necessary.

Export sales are accounted on the basis of acceptance by the customers and on the basis of export bill of lading.



Schedules

Export sales is accounted as per the prevailing exchange rate on the date of transaction .

Revenue from services is recongnised on rendering of services.

ii. Gross Sales include excise duty collection of Rs 25512.46 lacs, sales tax and freight charged in invoices.

iii. The pipe coating income is recognised after inspection, approval by customers and after dispatch.

iv. Interest income is taken on accrual basis. Interest Income of Rs.769.75 Lacs netted off against interestpayment during the year. (Previous year interest income of Rs.1417.92 lacs netted off against interestpayment ) wherever applicable.

v. Dividend income on investments are accounted for when the right to receive the payment is established.

vi. Expenditure are accounted for on accrual basis and provisions are made for all known liabilities.

g. Treatment of expenditure during construction period:

Expenditure in the case of new units and substanial expansion of existing units during the constructionperiod is included in the work in progress and the same is allotted to the respective Fixed Assets on thecompletion of the construction.

h. Fixed Assets

I. Fixed assets are stated at cost of acquisition and installation. The cost includes freight, taxes and relatedincidental expenses less Modvat Credit.

ii. The company has erected factory building sheds and installed plant and machinery on lease hold land.

The company had incurred some developmental expenditure which was earlier in CWIP on factorybuilding, plant and on lease hold land which increaes the future benefits from the existing assets beyondits previously assessed standard of performance i.e. increase in capacity and modernisation andupgradation.

i. Foreign Currency Transactions

i. a. The company is exposed to currency fluctuations on foreign currency transactions. With a view tominimize the volatility arising from fluctuations in the currency rates, the company follows establishedrisk management policies including the use of exchange forward contracts and other derivativeinstruments.

b. Foreign currency transactions are recorded at the exchange rate prevaliling on the date of suchtransactions. Monetary assets and liabilities in foreign currency as at the Balance Sheet. Gains andlosses arising on account of difference in foreign exchange rates on settlement / translation of monetaryassets and liablities are recognized in the Profit and Loss Account.

c. In respect of forward contracts assigned to the foreign currency assets as at the balance sheet date,the proportionate premium / discount for the period up to the date of balance sheet is recognized inthe profit and loss account. The exchange difference measured by the change rate between theinception of forward contract and date of balance sheet is applied on foreign currency amount of theforward contract and is recognized in the profit and loss account.

ii. All loans and deferred credits repayable in foreign currency and outstanding at the close of the year areexpressed in Indian currency at the appropriate rate of exchange prevailing on the date of Balance Sheet.

iii. Balances in the form of Current Assets and Current Liabilities in foreign currency, outstanding at theclose of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on thedate of Balance Sheet. Resultant gain or loss is accounted during the year.

iv. Exchange differences relating to Fixed Assets are adjusted in the cost of the assets.

The Company has opted for accounting the exchange differences arising on reporting of long termforeign currency monetary items in line with Companies (Accounting Standards) Amendment Rules2009 on Accounting Standard 11 (AS-11) notified by Government of India on March 31, 2009. Accordinglythe effect of exchange differences on FCCB’s / ECB’s of the Company amounting to Rs.436.67 Lacs isaccounted by addition or deduction to the cost of the assets so far it relates to depreciable capital assetsand in other cases by transfer to “Foreign Currency Monetary Items Translation Difference Account” tobe amortised in subsequent period.



Schedules

Derivative Instruments

I. The company has entered into the following derivative instruments.

a. Forward Exchange contracts (being a derivative instrument), which are not intended for trading orspeculative purposes, but for hedge purposes, to establish the amount of reporting currency requiredor available at the settlement date of certain payables and receivables. Forward Exchange Contractsentered into by the Company as on March 31, 2009.: N I L

b. Interest Rate Swaps to hedge against fluctuations in interest rate changes :

No of Contracts : N I LNotional Principal : N I L

c. Currency Swaps (other than forward exchange contracts stated above) to hedge against fluctuationsin changes in exchange rate.

No of Contracts : N I LNotional Principal : N I L

II. The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwiseare given below :

Receivables / (Payables) Receivables / (Payables)

Rupees (in Lacs) In Foreign Currency (U S Dollars)

2008-09 2008-09

211442.50 415,000,000

III. Derivative Instruments (causing an unhedged foreign currency exposure) N I L

j. Investments

I. Investments are of long term nature and are stated at cost of acquisition, less any diminishing in thevalue other then temporary.

ii. The investments in companies under the same management whose shares are unquoted are valued atcost. The Management is of the opinion that there is no diminishing value on these Investments.

k. Retirement Benefits

i. Contributions to defined contribution schemes such as Provident Fund & Family Pension Fund all chargedto the Profit & Loss Account as incurred.

ii. Gratuity to employees is covered under the Group Gratuity cum Life Assurance Scheme andsuperannuation to employees is covered under Group Superannuation scheme of Life InsuranceCorporation of India and annual contribution to such schemes are charged to Profit & Loss Account.Accrued liability upto the date of Balance sheet is provided .

iii. For the year ended March 31, 2009, provision for Employees Benefits amounting to Rs.63.69 Lacstowards Leave Encashment has been made to SBI Life Insurance Co. Ltd., Mumbai. The actual liability asper acturial valuation amounts to Rs.177.34 Lacs

l. Borrowing Cost

Interest & other borrowing costs on specific borrowings relatable to the qualifying assets are capitalised.Other interests and borrowing costs are charged to Revenue.

m. Cash Flow Statement

The Cash Flow statement is prepared by the indirect method set out in Accounting Standard - 3 on CashFlow Statement and presents cash flows by operating, investing and financing activities of the Company.Cash and cash equivalents presented in the cash flow statement consists of cash in hand and demanddeposits with banks as on the Balance Sheet date.

n. Provisions

A provision is recognised when there is a present obligation as a result of past event, it is probable that anoutflow of resources will be required to settle the obligations and in respect of which reliable estimate canbe made. Provision is not discounted to its present value and is determined based on the best estimaterequired to settle the obligation at the year end date. These are reviewed at each year end date and adjustedto reflect the best current estimate.



Schedules

n. Segment Reporting

The Gross income and profit from other segments are below the norms prescribed in AS-17 separate disclosurehave not been made

The Group does not consider any significant difference as regards the risks and returns of the product withreference to export and domestic sales. Therefore, Segment information as required by Accounting Standard- 17 is not applicable.

o. Related Party and Key Management Personnel Disclosure

A. Name of the Party and the relationship

i. PSL Corrosion Control Services Ltd. 100% Subsidiary Companyii. Pipeline Systems Ltd., Mauritus 100% Subsidiary Companyiii. PSL USA INC. , Delaware , USA 100% Subsidiary Companyiv. PSL FZE 100% (Subsidiary of Pipeline Systems Ltd.)v. PSL North America LLC 78% (Held by PSL USA INC)vi. BHI Ltd.vii. Broken Hills International Ltd.viii. Eurocoustic Products Ltd. Companies in which control exists directly / indirectlyix. Punj International Pvt. Ltd.x. Punj Investments Pvt. Ltd.

Ashok Punj Managing DirectorM. M. Mathur DirectorR. K . Bahri DirectorG. S. Sauhta DirectorD. N. Sehgal DirectorS.P.Bhatia DirectorC K Goel DirectorG.Gehani Director & Co. Secretary

B. Nature of Transaction (Rs. In lacs)

Particulars Key Companies in which controlPersonnel exists directly / indirectly

1 Dividend Paid Nil 68.352 Purchase of Goods Nil 13.993 Purchase of Capital Goods Nil 10.934 Reimbursement of Expenses Nil 178.605 Lease Rental Nil 15.156 Remuneration 696.85 Nil

p. Lease

Operating lease payments are recognized as expenditure in the profit and loss account on a straightlinebasis, which is representative of the time pattern of benefits received from the use of assets taken on lease.Lease rentals in respect of operating lease are recognized as income over the lease period.

q. Earning Per Share

The Company reports basic and diluted Earnings Per Share in accordance with Accounting Standard 20 onEarning Per Share. Basic Earnings per share is computed by dividing the net profit or loss for the year by theweighted average number of equity shares outstanding during the year. Diluted Earnings Per Share is computedby dividing the net profit or loss for the year by the weighted average number of equity shares outstandingduring the year as adjusted for the effects of all dilutive potential equity shares, except where the results areanti-dilutive.

}



Schedules

2008-09 2007-08

Weighted average number of shares at the beginning 42,710,911 40,022,160

and at the end of the year.

Net Profit after tax available for Equity Share holders (Rs.in Lacs) 9,484.98 8,449.38

Basic Earnings per share (Rs.) 22.21 21.11

Diluted Earnings per share (Rs.) 21.91 20.81

r. Management Estimates

The preparation of financial statements is in conformity with generally accepted accounting principles requiresestimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosureof contingent liabilities on the date of the financial statements and the reported amounts of revenues andexpenses during the reporting period. Actual results could differ from these estimates and the differencesbetween actual results and estimates are recognised in the periods in which the results are known / materialize.

s. Accounting for Taxes on Income

Income Taxes are accounted for in accordance with Accounting Standard 22 on Accounting for taxes onincome. Income taxes comprise both current and deferred tax.

Current tax is measured at the amount expected to be paid to / recovered from the revenue authorities, usingapplicable tax rates and laws. The company offsets advance payments and provisions for current tax anddisclose the net amount it intends to settle and where it has a legally enforceable right to set off the recognisedamount.

The tax effect of the timing differences that result between taxable income and accounting income and arecapable of reversal in one or more subsequent periods are recorded as a deferred tax assest or a deferred taxliability. Deferred tax assests and liabilities are recognized for future tax consequences attributable to timingdifferences.

They are measured using the substantially enacted tax rates and tax regulations.

The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is nolonger reasonable certain that sufficient future taxable income will be available against which the deferredtax assests can be realized.

Fringe Benefit Tax (FBT) payable under the provisions of section 115WC of the Income Tax Act, 1961 is inaccordance with the Guidance note on Accounting for Fringe Benefit Tax issued by the ICAI regarded as anadditional income tax and considered in determination of the profits for the year. Tax on distributed profitspayable in accordance with the provisions of section 115 O of the Income Tax Act, 1961 is in accordancewith the Guidance Note on Accounting for Corporate Dividend Tax regarded as a tax on distribution ofprofit and is not considered in the determination of profits.

(Rs. in Lacs)

2008-09 2007-2008

Deferred Tax Liabilities - Depreciation Differences 52.71 159.13 Deferred Tax Assets - Disallowances and others 1521.69 3.40 Net Deferred Tax Liability / (Assets) (1468.38) 155.73

t. Sundry Debtors/Loans & Advances

Sundry Debtors, Creditors and other advances are subject to confirmation. The effect of the same, if any,which is not likely to be material, will be adjusted at the time of confirmation.

u. Impairment of Assets:

In the opinion of the company’s Management , there is no impairment to the assets to which AccountingStandard 28 — “Impairment of Assets” applied requiring any revenue recognition

v. Contingent liabilities

Contingent liabilities as defined in Accounting Standard 29 are disclosed in the notes to accounts. Provisionsare made if it became probable that an outflow of future economic benefits will be required for an itempreviously dealt with it as a contingent liability.



Schedules

2008-09 2007-08

a) Counter Guarantees given by the Company for Rs. 111,107.98 Lacs Rs. 70,759.38 Lacsbank guarantees(Includes Standby Letter of Credit (SBLC) given by abank in India amounting to Rs. 31,200 Lacs (equivalentto USD 78 mn) as a security for Tax Exempt VariableRate Demand Revenue Bonds - Series 2000A andTaxable Variable Rate Demand Revenue Bonds - Series2000B issued by Mississippi Business FinanceCorporationUSA on behalf of company’s whollyowned subsidiary).

b) Other guarantees given by the Company Rs. 19706.93 Lacs Rs. 1587.17 Lacs(On behalf of associate & subsidiary Company)

c) Bills Discounting Rs. Nil Lacs Rs. 3214.07 Lacs

d) Estimated amount of contracts remaining to beexecuted on capital account and not provided for(net of advances) Rs. 3000.00 Lacs Rs. 2500.00 Lacs

e) Income Tax Assessments Completed Upto Ay 2006-07 (March 2006). Demand raised by the Departmentamounting to Rs.154 Lacs is contested before CIT (Appeal) Mumbai. The Department raised the demandof Rs.723 Lacs for AY 2005-06 u/s 143(3) of the Act read with u/s 263 of the Act. Company has prefered anappeal before ITAT challenging the commissioner directive u/s 263 which is pending before the tribunal.

f) Gujarat Water supply & Sewerage Board (GWSSB), a Government of Gujarat Undertaking and a regularcustomer of the company has made a reference to “Gujarat Public Works Contracts Disputes ArbitrationTribunal” for settlement of some disputes,including a claim against the Company arising out of a routinecontract awarded earlier to the Company ,the performance of which was hit by force majeure conditions.Ascompany has since challenged the jurisidiction of aforesaid tribunal, the matter is pending.Hence at thisstage no provision has been made in the attached accounts towards any possible liability on this account.

g) The renewal of leave & licence admeasuring to 329216 Sqm (Area) of Kandla Port Trust is under progressbefore the competent authority.

w. Impact of Issue of Foreign Currency Convertible Bonds(FCCB’s)

a) In September 2005 the Company had issued Zero Coupon foreign Currency Convertible Bonds (FCCB’S)worth US $40 Miillion. As per terms of issue , these Bonds are convertible into fully -paid and pari passuranking equity shares of Rs.10 each at premium of Rs.224.54 on or any day prior to 8th August 2010.Thesaid Bonds, unless converted or redeemed earlier will be redeemed at 143.64 percent of their principalamount on 7th September 2010 being the prefixed maturity date.

b) Such Bonds worth US$ 3,750,000 have already been converted into 8661511 equity Shares till date.

c) The bonds are listed on the Singapore Stock Exchange.

d) The Board of Directors have approved in principal to buyback the Zero Coupon Convertible Bonds duefor redemption in September 2010, amounting to USD 2.50 Million, subject to the approval from ReserveBank of India.

2. LICENCED AND INSTALLED CAPACITY

Name UNITS 2008-09 2007-08

Spiral Arc Welded Pipes Mt. 1,475,000 1,175,000Coating On Steel Pipes Mtrs. N.A. N.A.Anode Mt. 1,500 1,500Wire Mesh Sqm. 720,000 720,000Outer Wrap Sqm. 2,500,000 2,500,000Rebar Coating — N.A. N.A.(includes 300,000 MTPA at PSL NorthAmerica LLC installed during the year)



Schedules

5. RAW MATERIAL CONSUMPTION (Rs. in lacs)

2008-09 2007-08

Name Unit Quantity Value Quantity Value

1 H. R. Coil Mt. 544,099.91 252,102.52 420855.237 122,388.61

2 Flux Mt. 2,145.73 1,104.84 1610.895 729.21

3 Filler Wire Mt. 1,847.27 1,602.06 1416.817 925.91

4 M. S. Wire Kgs. - - 49887.705 27.60

5 Epoxy Powder Mt. 1,157.82 2,185.34 594.982 1,105.00

6 Adhesive Mt. 673.09 1,013.05 409.275 428.75

7 Polyethylene Mt. 12,003.99 9,133.48 6078.825 3,959.30

8 Polypropylene Mt. 210.63 158.96 10.800 7.31

9 Inner Wrap Sqm. 1,015,184.43 84.88 3154841.575 266.58

10 Outer Wrap Sqm. 568,693.77 182.69 1339969.611 520.03

11 Coal Tar Enamel Mt. 4,783.23 809.71 10420.588 2,376.73

12 Coal Tar Tape Sqm. 2,008.26 2.96 36928.950 28.28

13 Polyethylene Tape Sqm. 2,720,297.80 3,327.15 3003641.900 2,026.83

14 Modulate Pitch Kgs. - - 347223.000 74.19

15 Wiremesh Sqm. 617,863.19 458.82 1850599.829 1,376.02

16 Cement Mt. 10,095.95 438.63 38183.610 1,336.75

17 Sand Mt. 15,048.96 42.42 11656.540 30.23

18 Iron Ore Mt. 34,103.63 866.78 121702.716 3,142.13

19 Aluminium Kgs. 53,718.00 58.55 848006.000 935.24

20 Zinc Kgs. 2,936.16 3.18 40959.659 31.52

21 Coating Materials and others 11,784.82 10,593.00

T O T A L : 285,360.84 T O T A L : 152,309.21

22 Stores & Consumables 7,317.29 7,988.55

292,678.13 160,297.76

3. PRODUCTION, OPENING AND CLOSING STOCK

PRODUCTION OPENING STOCK CLOSING STOCK

Quantity Quantity Quantity Quantity Quantity QuantityName Unit 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08

1. HSAW Pipes Mt. 474,848.759 406,504.624 23,751.527 29,890.919 15,477.318 23,751.527

2. Coating on Steel Pipes/Jobs Mtrs. Turnkey Jobs Turnkey Jobs Turnkey Jobs

3. Anodes Kgs. 101,574.420 708,225.200 167.600 129,797.260 NIL 167.600

4. Wire Mesh Kgs. NIL - 74.550 74.550 74.550 74.550

5. Outer Wrap Sqm. NIL 628,361.250 2,723.250 50,227.000 2,723.250 2,723.250

4. SALES TURNOVER & COATING JOBS (Rs. in lacs)

Name 2008-09 2007-08

Unit Quantity Value Quantity Value

1. HSAW Pipes M.T 478,628.460 289,914.30 412,644.016 159,077.97

2. Coating on Steel Pipes / — — 46,920.07 — 49,628.37

Jobs Rebar Coating — — 6,200.72 — 3,334.95

Project Equipment Divn (Daman) — — 11,367.04 — 7,137.11

3. Anodes Kgs. 101,742.020 227.43 837,854.860 1,837.10

4. Induction Bending — — 806.86 — 1,961.46

5. Wire Mesh Kgs. — Captive Consumption — Captive Consumption

6. Outer Wrap SQM — Captive Consumption 675,865.000 Captive Consumption

7. Others — 556.22 — 1,852.27

355,992.64 224,829.22



Schedules

[Rs. in Lacs]

2008-09 2007-086. Value of Imports (CIF)

Raw Materials 217,885.86 83,052.33Stores 712.61 2,991.59

7. Expenditure in Foreign CurrencyTravelling Expenses 130.42 128.95Agency Commission & Others 94.78 972.00

8. Earning in Foreign CurrencyPipe Sales & Pipe Coating Receipts (FOB) 7,151.72 55,064.30

9. Value of Consumption of Raw MaterialsImported 176,586.18 82,674.43Indigenous 108,774.66 69,634.78

10. Value of Consumption of StoresImported 947.95 215.27Indigenous 6,369.34 7,773.28

11. Directors’ RemunerationSalary, Allowances & Perquisites 610.61 506.08Contribution to P.F and Other Funds 86.24 72.12

12. Auditors’ Remunerationfor Statutory Audit 14.00 10.30for Tax Audit 2.35 2.35for Tax Matters 0.75 0.75for Other Services 1.50 1.50for Out of Pocket Expenses 0.75 0.75

13. Loans & Advances includes amount receivable from Companies under Same Management Nil (previous yearRs. 182.16 lacs)

14. The Company is in the process of identifying the suppliers who are Small Scale Industries & Undertaking. The amountdue to them has not been quantified during the year.

15. In the opinion of the Board the Current Assets are approximately of the value, if realised, in the ordinary course of thebusiness. The Provision for Depreciation and for all known liabilities are adequate and not in excess of the amountreasonably considered necessary. All the income accrued has been accounted for in the books.

16. Schedules A to Q forming an integral part of the Balance Sheet and Profit and Loss Account are duly authenticated.

17. The previous year figures have been regrouped/rearranged wherever necessary to conform the current year classification.







CASH FLOW STATEMENT FOR CONSOLIDATED ACCOUNTS OF PSL LIMITEDFOR THE YEAR ENDED ON 31ST MARCH 2009

(PURSUANT TO THE LISTING AGREEMENT WITH STOCK EXCHANGES)(Rs. In lacs)

2008-09 2007-08

A) CASH FLOW FROM OPERATING ACTIVITIESNET PROFIT BEFORE TAX & EXTRA-ORDINARY ITEMS 13,853.38 12,528.85ADJUSTED FORAdd : DEPRECIATION 6,876.70 5,393.78INTEREST (NET) 10,274.93 5,785.56PRELIMINARY EXPENSES WRITTEN OFF Nil NilTECHNICAL KNOWHOW WRITTEN OFF Nil NilLess: Bad Debts Provision Nil NilLess: PROFIT ON SALE OF FIXED ASSETS 2.45 2.34Add : LOSS ON INVESTMENTS Nil NilOPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 31,002.56 23,705.85Changes inTRADE RECEIVABLES (19,702.11) (13,026.37)INVENTORIES (2,73,638.71) (12,105.77)TRADE PAYABLES 3,41,338.02 25,143.64LOANS AND ADVANCES (31,698.70) (10,243.16)CASH GENERATED FROM OPERATIONS [A] 47,301.06 13,474.19TAX PAID/PAYABLE/ADVANCE TAX (3,903.17) (2,524.66)TECHNICAL KNOW HOW FEESNET CASH FROM OPERATING ACTIVITIES [A] 43,397.89 10,949.53

B) CASH FLOW FROM INVESTING ACTIVITIESSALE OF FIXED ASSETS 3.65 3.80PROFIT ON SALE OF ASSETS 2.45 0.00INTEREST RECEIVED 769.75 670.61SALE/ (PURCHASE) OF INVESTMENTS 0.00 (175.22)PURCHASE OF FIXED ASSETS (73,129.27) (17,990.66)NET CASH USED IN INVESTING ACTIVITIES [B] [B] (72,353.42) (17,491.47)

C) CASH FLOW FROM FINANCING ACTIVITIESPROCEEDS FROM ISSUE OF SHARESINCLUDING SHARE PREMIUM 0.68 16,766.14INTEREST PAID (11,044.68) (6,456.17)LOANS RECEIVED / REPAYMENTS (NET) 23,764.84 26,191.22DIVIDEND PAID (2,489.75) (2,539.97)NET CASH USED IN FINANCING ACTIVITIES [C] [C] 10,231.09 33,961.22NET INCREASE / (DECREASE) IN CASH AND [A+B+C] [A+B+C] (18,724.44) 27,419.26CASH EQUIVALENTCASH AND CASH EQUIVALENT - OPENING [A] [A] 40,050.64 12,631.37CASH AND CASH EQUIVALENT - CLOSING [B] [B] 21,326.20 40,050.65

[B-A] (18,724.44) 27,419.28

Auditors’ Certificate

We have verified the above Cash flow statement of PSL Ltd (Consolidated) derived from the audited financial statements for the year endedMarch 31, 2009 and found the same is drawn in accordance therewith and also with the requirements of clause 32 of the listing agreementswith Stock Exchange.

for Suresh C. Mathur & Co.Chartered Accountants

Place : Mumbai Suresh C. MathurDate : 28th May, 2009 Partner

M.No. 1276

Consolidated Cash Flow Statement









PSL Corrosion Control Services Limited’PSL Corrosion Control Services Limited’PSL Corrosion Control Services Limited’PSL Corrosion Control Services Limited’PSL Corrosion Control Services Limited’sssssDirectors’ ReportAuditors’ Report

Balance SheetProfit & Loss Account

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PSL CCSL-79-96.p65 6/20/2009, 5:01 PM79


PSL CCSL-79-96.p65 6/20/2009, 5:01 PM80


To The Members,

Your Directors have pleasure in presenting this AnnualReport together with the Audited Accounts of your companyfor the Financial Year ended on 31st March, 2009.

FINANCIAL HIGHLIGHTS

The working results for the year ended 31st March, 09 are asunder:-

(Rs. In Lacs)

PARTICULARS 2008-09 2007-08Income 4044.25 2503.70Gross Profit before depreciation 960.33 565.56and interestLess: Interest NIL NIL

Profit before depreciation 960.33 565.56Less: depreciation (57.06) (60.56)

Profit before provision for Taxation 903.27 505.00Less: Taxation Provision

- Current Tax(income Tax) (278.00) (142.00)- Deferred tax NIL NIL- Current Tax(FBT) (11.00) (8.03)Net Profit 614.27 354.97

Appropriation AccountLess: Transfer to General Reserve 62.00 (36.00)Less: Interim Dividend NIL (105.00)Less: Tax on interim Dividend NIL (17.84)Less: Income Tax Paid (27.88) NILAdd: Deferred Tax Assets/(Liability) (2.10) 5.52Balance Carried over to Balance Sheet 522.29 201.65

FINANCIAL REVIEW

The “total income” of the Company for the year under reviewincreased from Rs 2503.70 Lacs to Rs 4044.25Lacs in thecurrent year, registering a growth of 62 %. The profit beforetax of the company increased from Rs 565.56 in the previousyear to Rs 960.33 Lacs in the year under review therebyconstituting 70% growth.

PERFORMANCE

The performance of the company during the year can beconveniently termed as “Record Performance”, if theyardstick of turnover is taken into account. The Companywas indeed lucky to have backed contracts of rebar coatingfrom various reputed organizations engaged in infrastructuredevelopment. Some of them are :-1. Mumbai Metropolitan Regional Development Authority

(MMRDA),2. Mumbai State Road Development Corporation (MSRDC),3. Jawahar Lal Nehru National Urban Renewal Mission

(JNNURM) funded projects executed through MunicipalCorporations,

4. Water Supply Projects of Municipal Corporation ofGreater Mumbai (MCGM),

PSL CORROSION CONTROL SERVICES LIMITED

(A WHOLLY OWNED SUBSIDIARY OF PSL LIMITED)

5. Sewage Treatment Plant (STP) projects by City &Industrial Development Corporation (CIDCO),

6. Mumbai Rail Vikas Corporation’s up gradation projectof railway lines ,

7. Gujarat building projects by Sardar Vallabh BhaiNational Institute of Technology (SVNIT),

8. Building and Bridge projects by Gujarat R&B,9. Mithi River project by MMRDA.

EXPANSION OF PRODUCTION CAPABILITIES

In order to copeup with the increase in demand for coatingof rebars an additional line was set up in the company’sDaman Plant . The addition of said line which is also capableof coating smaller diameter bars has enhanced the capacityof Daman Plant by 1000 mt (for smaller diameter). Theconsequential effect is that the overall production capacityof Daman Plant now stands increased to 4500 mt per month.

Apart from Daman Plant even the plant at Chennai whichtill recently had the mechanism for coating of 6 bars at atime, was upgraded to coat 12 bars at a time therebystraightaway doubling the capacity, as a result the annualcoating capacity of Chennai plant now has got enhanced to13000 mt per annum.

ON GOING PROJECTS

Apart from the First Cable Stayed Bridge in India, i.e. BandraWorli Sealink Project which is on the verge of completionthe Company is also associated with various prestigiousprojects such as Ambedkar Road Flyover, Eastern Freewayprojects, Twenty Seven Skywalks constructed underMMRDA, Pumping Stations constructed by Storm WaterDrain Department of MCGM and Pumping Stations andMaster Balancing Reservoir for Water Supply Projects inMumbai, STP projects of CIDCO , projects under JNNURMas well as Central Aided projects for infrastructuredevelopment such as roads and bridges, water supplies,sewerage.

CERTIFCATION

The company was awarded IMS Certificate (ISO6001:2000,ISO 14001:2004 & OHSAS 18001:2007) by internationalCertification Services-Mumbai.

DIVIDEND AND RESERVE

Keeping in view the ongoing expansion activities and otherfuture investment possibilities , the Board of Directors havedecided to plough back profits and hence do not recommendany dividend for the year under review.

The Board has recommended a transfer of Rs 62.00 Lacs tothe general reserve account which is 72 % higherappropriation than last year. Even after such transfer anamount of Rs 522.29 Lacs has been retained in the profitand loss account.

Directors’ Report

PSL CCSL-79-96.p65 6/20/2009, 5:01 PM81


DIRECTORATE

In order to comply with Section 256 of the Companies Act,1956 and the Articles of Association of the Company, ShriR. K. Bahri retires by rotation at the ensuing Annual GeneralMeeting but being eligible has offered himself for re-appointment.

CONTINUATION OF “WHOLLY OWNED SUBSIDIARY”STATUS OF COMPANY

Since there was no change in the shareholding pattern ofyour Company, its entire capital continued to be held by“PSL Limited” due to which the Company’s status of a“Wholly Owned Subsidiary company” of PSL Limitedcontinued during the period under review.

AUDITORS

M/s Suresh C. Mathur & Company, Chartered Accountants,Auditors of the Company , retire and being eligible, offerthemselves for re-appointment.

AUDITORS’ REPORT

The notes to the accounts referred to in Auditors’ Report areself-explanatory and therefore do not call for any furthercomments.

CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION, FOREIGN EXCHANGE EARNINGS ANDOUTGO

Particulars in respect of conservation of energy, technologyabsorption and foreign exchange earnings and out go asrequired under section 217 (1) (e) of the Companies Act,1956, read with the Company’s (Disclosure of Particularsin the Report of Board of Directors) Rules 1988 is annexedhereto and form a part of this report.

PARTICULARS OF EMPLOYEES

The Company had no such employees whose particularsare required to be mentioned pursuant to the provisions ofSection 217(2A) of the Companies Act, 1956 read withCompanies (Particulars of Employees) Rules, 1975.

DIRECTORS’ RESPONSIBILITY STATEMENT

As required under section 217 (2AA) of the Companies Act,1956 yours directors confirm that:-

- In the preparation of Annual accounts of the year underreview the applicable accounting standards have beenfollowed.

- The applicable accounting policies are appliedconsistently to give a true and fair view of the state ofaffairs of the company at the end of Financial Year underreview and Profit & Loss Account of the period underreport.

- The directors have taken proper and sufficient care formaintenance of adequate accounting records and forsafeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities.

- The Annual Accounts have been prepared on a goingconcern basis.

ACKNOWLEDGEMENT

The company has been able to operate efficiently becauseof the culture of professionalism, creativity, integrity andcontinuous improvement in all functions and areas as wellas efficient utilisation of the Company’s resources forsustainable and profitable growth. The Directors wish tohereby place on record their appreciation of the efficientand loyal services rendered by each and every employee.

Your Directors look forward to the future with confidence

For and on behalf of the Board of Directors ofPSL Corrosion Control Services Limited

sd/- sd/- sd/-G.S. Sauhta R.K. Bahri Ashok Punj

(Director) (Director) (Director)

Place : MumbaiDate : 28th May, 2009

Directors’ Report

PSL CCSL-79-96.p65 6/20/2009, 5:01 PM82


ANNEXURE TO THE DIRECTORS’ REPORT

Information pursuant to the Companies ( Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988.

I. CONSERVATION OF ENERGY 2008-09 2007-08

A. POWER AND FUEL CONSUMPTION1. Electricity

a) PurchasedUnits (M.KWH) 5386.758 3213.131Total Amount (Rs. Lacs) 184.15 90.92Average Rate/Unit (Rs./KWH) 3.42 2.83

b) Own GenerationThrough Diesel GeneratorUnits (M.KWH) 257.919 NILUnits per liter of Diesel Oil (KWH) 3.49 NILAverage Cost/Unit (Rs./ KWH) 10.54 NIL

B. TECHNOLOGY ABSORPTIONSCompany’s search for new technology for its processes so as to minimize its input costs is still continuing.

II. FOREIGN EXCHANGE EARNINGS AND OUTGO:(Rs. In Lacs)

Earnings NIL 4.99Outgo 627.84 192.19

For and on behalf of the Board of the Directors ofPSL Corrosion Control Services Limited

sd/- sd/- sd/-Place : Mumbai G.S. Sauhta R.K. Bahri Ashok PunjDate : 28th May, 2009 (Director) (Director) (Director)

Directors’ Report

PSL CCSL-79-96.p65 6/20/2009, 5:01 PM83


Auditors’ Report

To,The Members of PSL Corrosion Control Services Limited

1. We have audited the attached Balance Sheet of PSLCorrosion Control Services Limited as at March 31, 2009and also the Profit and Loss account for the year endedon that date annexed thereto. These financial statementsare the responsibility of the company’s management.Our responsibility is to express an opinion on thesefinancial statements based on our audit.

2. We conducted our audit in accordance with auditingstandards generally accepted in India. These standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements.An audit also includes assessing the accountingprinciples used and significant estimates made bymanagement, as well as evaluating the overall financialstatement presentation. We believe that our auditprovides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order,2003 issued by the Central Government of India in termsof sub-section (4A) of Section 227 of the CompaniesAct, 1956, we enclose in the Annexure a statement onthe matters specified in paragraphs 4 & 5 of the saidOrder.

4. Further to our comments in the annexure referred toabove, we report that:

i. We have obtained all the information andexplanations, which to the best of our knowledgeand belief were necessary for the purposes of ouraudit.

ii. In our opinion, proper books of account as requiredby law have been kept by the Company so far asappears from our examination of those books.

iii. The Balance Sheet and Profit and Loss account dealtwith by this report are in agreement with the booksof account.

iv. In our opinion, the Balance Sheet and Profit andLoss account dealt with by this report comply withthe accounting standards referred to in sub-section(3C) of section 211 of the Companies Act, 1956.

v. On the basis of the written representations receivedfrom the directors, as on March 31, 2009 and takenon record by the Board of Directors, we report thatnone of the directors is disqualified as on March31, 2009 from being appointed as a director interms of clause (g) of sub-section (1) of section 274of the Companies Act, 1956.

vi. In our opinion and to the best of our informationand according to the explanations given to us, thesaid accounts give the information required by the

Companies Act, 1956, in the manner so requiredand give a true and fair view in conformity withthe accounting principles generally accepted inIndia;

(a) In the case of the Balance sheet, of the state ofaffairs of the company as at March 31, 2009

(b) In the case of the Profit and Loss account, ofthe profit for the year ended on that date.


Sd/-Suresh C. Mathur

Place : Mumbai PartnerDate : 28th May, 2009 Membership No: 1276

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OURREPORT OF EVEN DATE

1. The Company has maintained proper records showingfull particulars, including quantitative details andsituation of fixed assets. In accordance with the phasedprogramme for verification of fixed assets, certain itemsof fixed assets were physically verified by themanagement during the year and no materialdiscrepancies were noticed on such verification. Therewas no disposal of fixed assets during the year.

2. The inventory of the Company has been physicallyverified by the management during the year. In ouropinion, the frequency of verification is reasonable. Inour opinion and according to the information andexplanations given to us, the procedures of physicalverification of inventory followed by the managementwere found reasonable and adequate in relation to thesize of the Company and the nature of its business. Onthe basis of our examination of records of inventory, inour opinion, the Company has maintained properrecords of inventory and the discrepancies noticed onphysical verification between the physical stocks andthe book records were not material in relation to theoperations of the Company.

3. According to information and explanation given to us,the company has availed interest free advance of Rs.492.03 lacs from the Holding Company which isrepayable on demand.

4. In our opinion and according to the information andexplanations given to us, there are adequate internalcontrol procedures commensurate with the size of theCompany and the nature of its business for the purchaseof inventory, fixed assets and for the sale of goods.Further, on the basis of our examination and accordingto the information and explanations given to us, wehave neither come across nor have we been informedof any instance of major weaknesses in the aforesaidinternal control procedures.

PSL CCSL-79-96.p65 6/20/2009, 5:01 PM84


Auditors’ Report

5. In our opinion and according to the information andexplanations given to us, the transactions made inpursuance of contracts of arrangements entered in theregister maintained under Section 301 of the CompaniesAct, 1956 and exceeding the value of rupees five lakhsin respect of any party during the year have been madeat prices which are reasonable having regard toprevailing market prices at the relevant time.

6. The Company has not accepted any deposits from thepublic.

7. In our opinion, the Company has an internal auditsystem, commensurate with the size of the Companyand the nature of its business.

8. The Central Government has not prescribedmaintenance of cost records u/s 209(1)(d) of theCompanies Act, 1956 for the products of this Company.

9. According to the records of the Company, the Companyis regular in depositing undisputed statutory duesincluding with-holding of taxes, provident fund,employees state insurance, income tax, sales tax, wealthtax, custom duty, excise duty, service tax, cess and otherstatutory dues applicable to it with the appropriateauthorities. According to the information andexplanations given to us, no undisputed amountspayable in respect of income tax, fringe benefit tax,wealth tax, sales tax, customs duty, service tax, exciseduty and cess were outstanding, at the year end for aperiod of more than six months from the date theybecame payable.

As on March 31, 2009 according to the records of theCompany the following are the particulars of disputeddues on account of Excise duty, Customs duty, IncomeTax, Service Tax and Sales Tax that have not beendeposited.

Sr. Nature of Amount Period to Forum whereNo dues under which the the dispute

dispute amount is pending(Rs. In Lacs) relates

1 Service Tax 105 2005-2006 High Court,Mumbai

10. The Company has no accumulated losses at the end ofthe financial year and it has not incurred any cash lossesin the current and immediately preceding financial year.

11. Based on our audit procedures and on the informationand explanations given by the management, we are ofthe opinion that the Company has not defaulted inrepayment of dues to a financial institution or banks.The company does not have any outstanding debenture.


to us and based on the documents and records producedto us, the Company has not granted loans or advanceson the basis of security by way of pledge of shares,debentures and other securities.

13. In our opinion, the Company is not a chit fund or anidhi/mutual benefit fund/society. Therefore, theprovisions of clause 4(xiii) of the Companies (Auditor’sReport) Order, 2003 are not applicable to the Company.

14. In our opinion, the Company is not dealing in or tradingin shares, securities, debentures and other investments.Accordingly, the provisions of clause 4(xiv) of theCompanies (Auditor’s Report) Order, 2003 are notapplicable to the Company.

15. In our opinion and according to the information andexplanation given to us, the Company has not givenany guarantees for loan taken by others from a bank orfinancial institution.

16. Based on information and explanations given to us bythe management, the Company has not taken any termloan.

17. According to the information and explanations givento us and on an overall examination of the Balancesheet of the Company, we report that no funds raisedon short-term basis have been used for long-terminvestment and no long-term funds have been used tofinance short-term assets (excludes Long Term workingcapital).

18. The Company has not made any preferential allotmentof shares to parties and companies covered in theRegister maintained under Section 301 of theCompanies Act, 1956 during the year.

19. The Company has not raised any money by way issueof debentures.

20. The Company has not raised any money during theyear by way of public issue.

21. Based upon the audit procedures performed for thepurpose of reporting the true and fair view of thefinancial statements and as per the information andexplanations given by the management, we report thatno fraud on or by the Company has been noticed orreported during the course of our audit.


Sd/-Suresh C. Mathur

Place : Mumbai PartnerDate : 28th May, 2009 Membership No: 1276

PSL CCSL-79-96.p65 6/20/2009, 5:01 PM85


BALANCE SHEET AS AT MARCH 31, 2009[Rs. in lacs]

Schedules As at As atMarch 31, 2009 March 31, 2008

SOURCE OF FUNDS

SHAREHOLDERS’ FUNDS

A) SHARE CAPITAL A 140.00 140.00

B) GENERAL RESERVE B 2,419.73 2,559.73 1,835.44 1,975.44

C) SECURED LOANS C NIL NIL

D) DEFERRED TAXATION LIABILITY NIL NIL

2,559.73 1,975.44

APPLICATION OF FUNDS:

FIXED ASSETS D

A) GROSS BLOCK (AT COST) 1,058.89 772.88

B) LESS : DEPRECIATION RESERVE 478.82 421.77

580.07 351.11

C) ADD: CAPITAL WORK IN PROGRESS NIL 580.07 NIL 351.11

INVESTMENTS E 101.29 101.29

DEFERRED TAX ASSETS 3.43 5.53

CURRENT ASSETS, LOANS & ADVANCES

A) INVENTORIES F 201.11 82.08

B) SUNDRY DEBTORS G 448.61 336.10

C) CASH AND BANK BALANCE H 1,748.17 1,189.96

D) LOANS AND ADVANCES I 1,015.71 765.27

3,413.60 2,373.41

LESS: CURRENT LIABILITIES AND PROVISIONS

A) CURRENT LIABILITIES J 829.18 435.64

B) PROVISIONS K 709.48 420.48

1,538.66 856.12


MISCELLANEOUS EXPENDITURE L NIL 0.22

(TO THE EXTENT NOT WRITTEN OFF)

2,559.73 1,975.44

NOTES TO ACCOUNTS O

Balance Sheet

As per our report attached FOR AND ON BEHALF OF BOARD OF DIRECTORS

For Suresh C. Mathur & Co.Chartered Accountants

Y.P. PUNJASHOK PUNJ

(SURESH C. MATHUR) R.K. BAHRIPartner ARCHANA MAINI G.S. SAUHTAM.No. 1276 Company Secretary (Directors)


PSL CCSL-79-96.p65 6/20/2009, 5:01 PM86


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009[Rs. in lacs]

Schedules For the Year Ended For the Year Ended March 31, 2009 March 31, 2008

INCOME M 4,044.25 2,503.70

EXPENDITURE :

MANUFACTURING, ADMINISTRATIVE AND

OTHER EXPENSES N 3,083.92 1,938.14

INTEREST ON LOANS NIL 3,083.92 NIL 1,938.14

PROFIT BEFORE DEPRECIATION 960.33 565.56

DEPRECIATION 57.06 60.56

PROFIT BEFORE TAXATION 903.27 505.00

LESS :PROVISION FOR TAXATIONCURRENT TAX (INCOME TAX) 278.00 142.00CURRENT TAX (FBT) 11.00 8.03DEFERRED TAX NIL 289.00 NIL 150.03

PROFIT AFTER TAXATION 614.27 354.97

LESS : TRANSFER TO GENERAL RESERVE 62.00 36.00LESS : INTERIM DIVIDEND Nil 105.00LESS : TAX ON INTERIM DIVIDEND Nil 17.85LESS : INCOME TAX PAID F.Y. 2002-03 27.88 NilLESS : DEFERRED TAX LIABILITY 2.10 NilADD: DEFERRED TAX ASSETS Nil 5.53

BALANCE CARRIED OVER TO BALANCE SHEET 522.29 201.65

Notes to Accounts O

Profit and Loss Account



Y.P. PUNJASHOK PUNJ



PSL CCSL-79-96.p65 6/20/2009, 5:01 PM87




SCHEDULE ‘A’

SHARE CAPITAL

AUTHORISED25,00,000 EQUITY SHARES OF RS. 10/- EACH 250.00 250.00

Issued Subscribed & Paid up Capital14,00,020 EQUITY SHARES OF RS. 10/- EACH 140.00 140.00(PSL LIMITED - PARENT COMPANY)

140.00 140.00

SCHEDULE ‘B’

RESERVES AND SURPLUS

GENERAL RESERVEAS PER LAST BALANCE SHEET 825.90 789.90ADD : TRANSFER FROM PROFIT & LOSS ACCOUNT 62.00 887.90 36.00 825.90

PROFIT & LOSS ACCOUNTAS PER LAST BALANCE SHEET 1,009.54 807.89ADD : TRANSFER FROM PROFIT & LOSS ACCOUNT 522.29 1,531.83 201.65 1,009.54

2,419.73 1,835.44SCHEDULE ‘C’SECURED LOANS

NIL NIL

NIL NIL

SCHEDULE ‘D’FIXED ASSETS [Rs. in lacs]

PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK

As At Additions Deductions As at Upto For the Deductions during Upto As on As on01.04.08 during the period during the period 31.03.09 01.04.08 period the period 31.03.09 31.03.09 31.03.08

PLANT & MACHINERY 347.20 189.06 NIL 536.26 220.04 18.08 NIL 238.12 298.14 127.16

FURNITURE & FIXTURES 102.68 76.56 NIL 179.25 51.17 9.36 NIL 60.53 118.71 51.51

COMPUTER 13.15 1.56 NIL 14.71 11.27 1.19 NIL 12.46 2.25 1.87

ELECTRICAL INSTALLATION 14.63 NIL NIL 14.63 5.42 1.28 NIL 6.70 7.93 9.21

RESIDENTAL BUILDING/ERECTION 2.54 NIL NIL 2.54 0.91 0.08 NIL 0.99 1.54 1.63

FACTORY SHED /BUILDING 138.53 1.72 NIL 140.25 62.30 7.62 NIL 69.92 70.33 76.23

OFFICE EQUIPMENTS 1.84 0.19 NIL 2.03 0.90 0.15 NIL 1.05 0.98 0.94

MOTOR CAR 121.12 16.92 NIL 138.04 56.49 16.81 NIL 73.29 64.75 64.63

LAB EQUIPMENTS 31.19 NIL NIL 31.19 13.26 2.49 NIL 15.75 15.44 17.93

Total 772.88 286.02 NIL 1,058.89 421.77 57.06 NIL 478.82 580.07 351.11

PREVIOUS YEAR 726.40 46.48 NIL 772.88 361.20 60.56 NIL 421.77 351.11 365.20

Schedules

PSL CCSL-79-96.p65 6/20/2009, 5:01 PM88




SCHEDULE ‘E’

INVESTMENTS (LONG TERM INVESTMENTS)TRADEA. (AT COST UNQUOTED)

BHI LIMITED140000 EQUITY SHARES OF RS.10/- EACH 14.00 14.00

B. (AT COST QUOTED)21,50,000 EQUITY SHARES OF PSL LTD 12.29 12.29(RECEIVED 45,50,000 EQUITY SHARES OF PSL LTD)IN LIEU OF 2,60,000/- EQUITY SHARE OF RS. 10/- EACHOF PSL INTERNATIONAL LTD. (M.V. @ 86.65 PER SHARE)

C. MUTUAL FUNDSBI CAPITAL PROTECTION ORIENTED FUND 25.00 25.00(NAV @ Rs. 9.80)SBI INFRASTRUCTURE FUND 50.00 50.00(NAV @ Rs. 5.65)

101.29 101.29

SCHEDULE ‘F’

INVENTORIES (AT COST)(VALUED AT COST OR MARKET PRICE WHICHEVER IS LOWER)

RAW MATERIALS 79.35 17.00CONSUMABLE 104.77 53.92FINISHED GOODS 16.99 11.16

201.10 82.08

SCHEDULE ‘G’

SUNDRY DEBTORS(UNSECURED BUT CONSIDERED GOOD)

DEBTS OUTSTANDING FOR A PERIODLESS THAN SIX MONTHS 391.99 283.84MORE THAN SIX MONTHS 56.62 448.61 52.26 336.10

448.61 336.10

SCHEDULE ‘H’

CASH AND BANK BALANCESCASH IN HAND 10.82 4.79IN CURRENT ACCOUNT WITH SCHEDULED BANKS 524.52 231.25IN DEPOSIT ACCOUNT WITH SCHEDULED BANK 1,212.83 950.89DD IN TRANSIT NIL 3.03

1,748.17 1,189.96

Schedules

PSL CCSL-79-96.p65 6/20/2009, 5:01 PM89




SCHEDULE ‘I’LOANS AND ADVANCES(UNSECURED, BUT CONSIDERED GOOD)

SECURITY DEPOSIT 78.45 63.53

ADVANCES RECOVERABLE IN CASH OR IN KIND ORFOR VALUE TO BE RECEIVED . 162.87 220.32TAX DEDUCTED AT SOURCE 16.22 16.21TAX DEDUCTED AT SOURCE (2005-06) 14.65 14.65TAX DEDUCTED AT SOURCE (2006-07) 20.77 20.77TAX DEDUCTED AT SOURCE (2007-08) 37.93 34.14TAX DEDUCTED AT SOURCE (2008-09) 46.95 NILADVANCE TAX - 2005-06 107.22 107.22ADVANCE TAX - 2006-07 125.18 125.18ADVANCE TAX - 2007-08 133.17 131.23ADVANCE TAX - 2008-09 160.00 NILADVANCE PAID TO SUPPLIER 112.30 32.03

1,015.71 765.27

SCHEDULE ‘J’CURRENT LIABILITIES

SUNDRY CREDITORS (FOR GOODS) 177.04 154.69ADVANCE FROM PARTIES/CLIENTS 86.17 34.92OTHERS 565.97 246.03

829.18 435.64

SCHEDULE ‘K’PROVISIONSPROVISION FOR TAXATION 709.48 420.48PROPOSED DIVIDEND NIL NILTAX ON PROPOSED DIVIDEND NIL NIL

709.48 420.48

SCHEDULE ‘L’MISCELLANEOUS EXPENDITURE

PRELIMINARY EXPENSES NIL NILAS PER LAST BALANCE SHEETLESS : WRITTEN OFF DURING THE PERIOD NIL NIL NIL NIL

PRE-OPERATIVE EXPENSES 0.22 0.44

LESS : WRITTEN OFF DURING THE PERIOD 0.22 NIL 0.22 0.22

NIL 0.22

SCHEDULE ‘M’INCOME :a) SALES /JOB RECEIPT (Including Service Tax) 3,829.92 2,314.30b) OTHER INCOME 214.33 189.40

4,044.25 2,503.70

Schedules

PSL CCSL-79-96.p65 6/20/2009, 5:01 PM90


SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON MARCH 31, 2009

[Rs. in lacs]For the Year Ended For the Year Ended

March 31, 2009 March 31, 2008SCHEDULE ‘N’MANUFACTURING, ADMINISTRATIVE AND OTHER EXPENSES

RAW MATERIALS CONSUMEDOPENING STOCK 17.00 35.51ADD: PURCHASES 702.17 379.88LESS: CLOSING STOCK 79.35 639.82 17.00 398.39

CONSUMABLES CONSUMEDOPENING STOCK 53.92 24.57ADD: PURCHASES 780.89 388.26LESS: CLOSING STOCK 104.77 730.04 53.92 358.91

EMPLOYEE’S EMOLUMENTS AND BENEFITSSALARIES AND ALLOWANCES 319.08 267.88STAFF WELFARE 3.91 322.99 8.91 276.79

OTHER EXPENSESADVERTISEMENT EXPENSES 1.58 3.90ELECTRICITY CHARGES 1.58 1.59TRANSPORTATION CHRG. OF BARS 268.03 164.43OCTROI CHARGES 260.42 160.37LEASE RENT 2.58 2.99POSTAGE, TELEGRAM & TELEPHONE EXP. 6.90 7.12POWER & FUEL 184.15 90.92SALES PROMOTIONS 108.38 69.13RENT, RATES & TAXES 1.56 0.62REPAIRS & MAINTENANCE - BUILDING 0.96 42.92REPAIRS & MAINTENANCE - OTHERS 0.68 9.71REPAIRS & MAINTENANCE - PLANT & M/C 3.38 11.93MOTOR VEHICLE EXPENSES 17.04 16.82TRAVELLING EXPENSES 51.29 33.25CONVEYANCE EXPENSES 4.30 7.52PRINTING & STATIONERY EXPENSES 19.32 13.82BAR STRAIGHTENING CHARGES 0.72 0.31INSURANCE CHARGES 4.06 3.03AUDIT FEES 1.35 1.35BANK CHARGES 3.32 0.80SERVICE TAX ON COATING & EDU. CESS 324.16 198.63MISCELLANEOUS EXPENSES 131.14 1,396.90 68.32 909.46VARIATION IN STOCKS OF FINISHED GOODS

CLOSING STOCK (INCREASE IN STOCK) (5.83) (5.41)

(OPENING 11.16 LACS - CLOSING 16.99 LACS) 3,083.92 1,938.14

Schedules

PSL CCSL-79-96.p65 6/20/2009, 5:01 PM91


SCHEDULE ‘O’NOTES FORMING PART OF THE ACCOUNTS FOR THE PERIOD ENDED 31ST MARCH, 2009.

1 SIGNIFICANT ACCOUNTING POLICIES :

A. METHOD OF ACCOUNTING

THE ACCOUNTS HAVE BEEN PREPARED TO COMPLY IN ALL MATERIAL ASPECTS WITH APPLICABLE PRINCIPLES IN

INDIA AND THE ACCOUNTING STANDARDS ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

AND THE RELEVANT PROVISIONS OF THE COMPANIES ACT, 1956.

B. INVENTORIES

RAW MATERIALS, STORES & SPARE PARTS ARE VALUED AT COST, WHICH IS ARRIVED ON FIFO BASIS. FINISHED

GOODS ARE VALUED AT COST PLUS PROPORTIONATE OVER HEAD OR NET REALIZABLE VALUE WHICHEVER IS

LOWER.

C. DEPRECIATION

DEPRECIATION IS PROVIDED FROM THE DATE THE ASSETS HAVE BEEN INSTALLED AND PUT TO USE ON WRITTEN

DOWN VALUE METHOD AT THE RATES AND IN THE MANNER PRESCRIBED BY SCHEDULE XIV TO THE COMPANIES

ACT, 1956.

D. RESEARCH AND DEVELOPMENT EXPENDITURE

REVENUE EXPENDITURE IS CHARGED TO PROFIT & LOSS ACCOUNT AND CAPITAL EXPENDITURE IS ADDED TO THE

COST OF FIXED ASSETS IN THE YEAR WHEN IT IS INCURRED.

E. REVENUE RECOGNITION/INCOME

I. REVENUE INCOME IS RECOGNISED ON ACCRUAL BASIS EXCEPT WHERE MENTIONED OTHERWISE, IN PARTICULAR.

II. SALES INCOME IS RECOGNISED ON DESPATCH OF GOODS.

III. SALES AND FREIGHT CHARGED IN INVOICES; REBATES, DISCOUNTS, CLAIMS ETC., ARE EXCLUDED THEREFROM.

REBATES, CLAIMS AND DISCOUNTS ARE ACCOUNTED FOR AS AND WHEN DETERMINED.

Schedules

DETAILS OF MISCELLANEOUS EXPENSES FORMING PART OF SCHEDULE ‘N’[Rs. in lacs]


SCHEDULE ‘N’MEMBER & SUBSCRIPTION FEES 2.26 0.54GENERAL EXPENSES 33.46 20.69LABORATORY EXPENSES 2.00 0.71NEWS PAPER BOOKS & PERIODICALS 0.32 0.63COMMISSION TO CONTRACTORS 1.25 0.51CONSULTANCY CHARGES 67.06 5.22PAINTING CHARGES OF BARS AT SITE 0.31 0.07SHORT RECOVERIES & DISCOUNT 5.53 1.60OFFICE EXPENSES 0.89 0.36OTHER ALLOWANCE 9.35 7.00SERVICE TAX ON GOODS TRPT 5.45 2.52GUEST HOUSE EXP. 0.23 0.26SEMINAR/SPONSERSHIP EXP. 0.75 5.20LEGAL EXPENSES 0.19 0.01UNLOADING/LOADING EXP. 0.44 0.03PRE-OPERATIVE EXP. WRITTEN OFF 0.22 0.22PROFESSIONAL TAX 0.03 0.05JOB EXPENSES (HLL-MUMBAI) 1.40 17.69DONATION EXP. NIL 5.00

131.14 68.32

PSL CCSL-79-96.p65 6/20/2009, 5:01 PM92


Schedules

IV. DIVIDEND INCOME ON INVESTMENTS ARE ACCOUNTED FOR WHEN THE RIGHT TO RECEIVE THE PAYMENT IS

ESTABLISHED.

V. EXPENDITURES ARE ACCOUNTED FOR ON ACCRUAL BASIS AND PROVISIONS ARE MADE FOR ALL KNOWN

LIABILITIES.

F. FIXED ASSETS

FIXED ASSETS ARE STATED AT COST OF ACQUISITION AND INSTALLATION. THE COST INCLUDES FREIGHT, DUTIES,

TAXES AND RELATED INCIDENTAL EXPENSES.

G. FOREIGN CURRENCY TRANSACTIONS

THE PAYMENT & RECEIPT INCURRED IN FOREIGN CURRENCY DURING THE PERIOD ARE ACCOUNTED AT THE

RATES PREVAILING ON THE DATE OF TRANSACTIONS.

H. INVESTMENTS

INVESTMENTS ARE OF LONG TERM NATURE AND ARE STATED AT COST OF ACQUISITION, LESS ANY DIMINISHING

IN THE VALUE OTHER THAN TEMPORARY. THE INVESTMENTS IN THE COMPANIES UNDER THE SAME MANAGEMENT

WHOSE SHARES ARE UNQUOTED ARE VALUED AT COST.

I. RETIREMENT BENEFITS

I. CONTRIBUTIONS TO DEFINED CONTRIBUTION SCHEMES SUCH AS PROVIDENT FUND AND PENSION FUND

ARE ALL CHARGED TO THE PROFIT & LOSS ACCOUNT AS INCURRED.

II. LEAVE ENCASHMENT: THE COMPANY HAS NOT PROVIDED LIABILITY DURING THE YEAR. THE TOTAL LIABLILTY

PROVIDED AS ON DATE IS RS. 5.45 LACS WHICH IS SUFFICIENT & SUBJECT TO ACTUARIAL VALUATION WHICH

IS YET TO BE DONE.

J. BORROWING COST

INTEREST & OTHER BORROWING COSTS ARE CHARGED TO REVENUE.

K. SEGMENT REPORTING

AS REVENUE FROM SALES, INTERNAL TRANSFER, PROFITS, ASSETS FROM OTHER SEGMENTS ARE BELOW THE NORMS

PRESCRIBED IN AS-17, SEPARATE DISCLOSURES HAVE NOT BEEN MADE. SINCE THE COMPANY DOES NOT HAVE

ANY BUSINESS OUTSIDE INDIA THERE ARE NO REPORTABLE GEOGRAPHICAL SEGMENTS.

L. RELATED PARTY AND KEY MANAGEMENT PERSONAL DISCLOSURE :-

A. NAME OF THE PARTY AND THE RELATIONSHIP

I. PSL LIMITED 100% HOLDING COMPANY

II. EUROCOUSTIC PRODUCTS LTD. COMPANIES IN WHICH CONTROL

III. BHI LIMITED EXISTS DIRECTLY / INDIRECTLY

B. NATURE OF TRANSACTION (AMOUNT IN RS.)

Sr. PARTICULARS HOLDING CO. COMPANIES IN WHICH CONTROL

No. EXISTS DIRECTLY / INDIRECTLY

1. DIVIDEND NIL NIL

2. PURCHASE OF CAPITAL GOODS 12,568,395 7,656,414

3. REIMBURSEMENT OF EXPENSES 31,318,664 21,443,513

4. LEASE RENT 148,800 NIL

M. EARNING PER SHARE 2008-09 2007-08

NO OF SHARES BEGINNING AND AT THE END OF THE YEAR 1,400,020 1,400,020

NET PROFITS AFTER TAX AVAILABLE FOR EQUITY SHAREHOLDERS (RS. IN LACS) 614.27 354.97

EARNING PER SHARE (IN RS.) 43.88 25.35

PSL CCSL-79-96.p65 6/20/2009, 5:01 PM93


N. CURRENT AND DEFERRED TAX

PROVISION FOR CURRENT TAX IS MADE ON THE BASIS OF ESTIMATED TAXABLE INCOME FOR THE CURRENT

ACCOUNTING PERIOD AND IN ACCORDANCE WITH THE PROVISIONS AS PER THE IT ACT. DEFERRED TAX RESULTING

FROM “TIMING DIFFERENCE” BETWEEN BOOK AND TAXABLE PROFIT FOR THE YEAR IS ACCOUNTED FOR USING

THE TAX RATES AND LAWS THAT HAVE BEEN ENACTED OR SUBSTANTIALLY ENACTED AS ON THE BALANCE SHEET

DATE. THE DEFERRED TAX ASSET IS RECOGNISED AND CARRIED FORWARD ONLY TO THE EXTENT THAT THERE IS A

REASONABLE CERTAINITY THAT THE ASSETS WILL BE ADJUSTED IN FUTURE.

O. MANAGEMENT ESTIMATES

THE FINANCIAL STATEMENTS ARE PREPARED IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING

PRINCIPLES AND APPLICABLE ACCOUNTING STANDARDS, WHICH MAY REQUIRE MANAGEMENT TO MAKE ESTIMATES

AND ASSUMPTIONS. THESE MAY AFFECT THE REPORTED AMOUNT OF ASSETS AND LIABILITIES AND DISCLOSURES

OF CONTINGENT LIABILITIES ON THE DATE OF THE FINANCIAL STATEMENTS AND THE REPORTED AMOUNT OF

REVENUES AND EXPENSES DURING THE REPORTING PERIODS, ACTUAL REPORTS LATER COULD DIFFER FROM

THESE ESTIMATES.

2008-09 2007-08

(RS. IN LACS) (RS. IN LACS)

P. ACCOUNTING FOR TAX ON INCOME

DEFERRED TAX LIABILITIES - DEPRECIATION DIFFERENCES 2.10 NIL

DEFERRED TAX ASSETS - DEPRECIATION DIFFERENCES 5.53 5.53

NET DEFERRED TAX LIABILITY / (ASSETS) 3.43 5.53

Q. CONTINGENT LIABILITIES

CONTINGENT LIABILITIES ARE DISCLOSED IN THE ACCOUNTS BY WAY OF NOTES GIVING THE NATURE AND

QUANTUM OF SUCH LIABILITIES.

2008-09 2007-08


R. GUARANTEES

GUARANTEE GIVEN BY THE BANK 15.00 NIL

2008-09 2007-08


2 EARNING IN FOREIGN CURRENCY NIL 4.99

3 EXPENDITURE IN FOREIGN CURRENCY

A] RAW MATERIALS (F.O.R.) 346.11 89.82

B] SPARE PARTS/CONSUMABLE 281.73 102.37

C] TRAVELLING EXPENSES Nil 14.40

4 VALUE OF CONSUMPTION OF RAW MATERIAL

IMPORTED 357.85 120.59

INDIGENOUS 281.97 277.80

VALUE OF CONSUMPTION OF CONSUMABLE

IMPORTED 260.28 136.60

INDIGENOUS 469.75 222.31

1369.86 757.30

5 AUDITOR'S REMUNERATION

1. AUDIT FEES 0.86 0.86

2. OTHER CAPACITY 0.49 0.49

Schedules

PSL CCSL-79-96.p65 6/20/2009, 5:01 PM94


6 BALANCE OF SUNDRY CREDITORS AND SUNDRY DEBTORS ARE SUBJECT TO CONFIRMATION.

7 THE COMPANY IS IN PROCESS OF IDENTIFYING THE SUPPLIERS WHO ARE SMALL SCALE INDUSTRIES &

UNDERTAKING. THE AMOUNT DUE TO THEM HAS NOT BEEN BIFURCATED DURING THE YEAR.

8 IN THE OPINION OF THE BOARD THE CURRENT ASSETS ARE APPROXIMATELY OF THE VALUE, IF REALISED, IN THE

ORDINARY COURSE OF THE BUSINESS. THE PROVISION FOR DEPRECIATION AND FOR ALL KNOWN LIABILITIES

ARE ADEQUATE AND NOT IN EXCESS OF THE AMOUNT REASONABLY CONSIDERED NECESSARY. ALL THE INCOME

ACCRUED HAS BEEN ACCOUNTED FOR IN THE BOOKS.

9 SCHEDULE A TO O FORM AN INTEGRAL PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT WHICH

ARE DULY AUTHENTICATED.

10 THE PREVIOUS YEAR FIGURES HAVE BEEN REGROUPED/REARRANGED WHEREVER NECESSARY TO CONFORM

WITH THE CURRENT PERIOD CLASSIFICATION.



Y.P. PUNJASHOK PUNJ



Schedules

PSL CCSL-79-96.p65 6/20/2009, 5:01 PM95


Part IV of Schedule VI of Companies Act, 1956 (As amended)Balance Sheet Abstract and Company’s General Business Profile

1. REGISTRATION DETAILS :

Registration No. State Code

Balance Sheet Date

2. CAPITAL RAISED DURING THE PERIOD (Rupees in lacs)

Public issue Rights Issue

Bonus issue Private Placement

3. POSITION OF M0BILISATION AND DEPLOYMENT OF FUNDS (Rupees in lacs)

Total Liabilities Total Assets

Sources of Funds :

Paid-up Capital Reserves & Surplus

Secured Loans Unsecured Loans

Application of Funds :

Net Fixed Assets Investments

Net Current Assets Misc. Expenditure

Accumulated Losses

4. PERFORMANCE OF COMPANY (Rupees in lacs)

Turnover Total Expenditure

Profit Before Tax Profit After Tax

Earning per Share Dividend Rate(in Rupees) (in Rupees)

5. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY(as per Monetary terms)

Product ANTI CORROSIVE TREATMENT OFNIC Code No. Description : REBARS

NIC Code No. ProductDescription :

5 5 - 5 4 2 5 0 5 6

3 1 - 0 3 - 0 9

N I L N I L

N I L N I L

2 5 5 9 . 7 3 2 5 5 9 . 7 3

1 4 0 . 0 0 2 4 1 9 . 7 3

1 0 1 . 2 9

1 8 7 8 . 9 5 0 . 0 0

N I L

4 0 4 4 . 2 5 3 1 4 0 . 9 8

9 0 3 . 2 7 6 1 4 . 2 7

4 3 . 8 8 0 . 0 0

N I L N I L

5 8 0 . 0 7

BIO DIESEL

3 4 5 0

Balance Sheet Abstract

PSL CCSL-79-96.p65 6/20/2009, 5:01 PM96

Pipeline Systems Limited’Pipeline Systems Limited’Pipeline Systems Limited’Pipeline Systems Limited’Pipeline Systems Limited’sssssAuditors’ Report

Consolidated Accounts

PSL USA INC’PSL USA INC’PSL USA INC’PSL USA INC’PSL USA INC’sssssIndependent Auditors’ Report

Consolidated Accounts

Pipeline 97-106.p65 6/20/2009, 5:01 PM97


Pipeline 97-106.p65 6/20/2009, 5:01 PM98


ToThe members of Pipeline Systems Limited

1. We have audited the attached Consolidated Balance

Sheet of PIPELINE SYSTEMS LTD. and it’s subsidiary

namely PSL FZE as at 31st March 2009 , and the

Consolidated Profit and Loss Account for the year then

ended, both annexed thereto. These financial statements

are the responsibility of the Company’s management and

have been prepared by the management on the basis of

separate financial statements and other financial

information regarding components. Our responsibility

is to express an opinion on these financial statements

based on our audit.

2. We conducted our audit in accordance with generally

accepted auditing standards in India. These Standards

require that we plan and perform the audit to obtain

reasonable assurance about whether the financial

statements are free of material misstatements. An audit

includes, examining on a test basis, evidence supporting

the amounts and disclosures in the financial statements.

An audit also includes assessing the accounting

principles used and significant estimates made by

management as well as evaluating the overall financial

statements presentation. We believe that our audit

provides a reasonable basis for our opinion.

3. We did not audit the financial statements of the

subsidiary of PIPELINE SYSTEMS LTD, Mauritius called

PSL FZE, Sharjah. The financial statements and other

financial information have been audited by other

auditors whose report/returns have been furnished to

us, and our opinion in so far as it relates to the amounts

included in respect of this subsidiary is based solely on

the report of the other auditors.

4. On the basis of the information and explanation given

to us and on the consideration of the separate audit report

on individual financial statements and on the other

financial information of the components of PSL FZE, we

are of the opinion that the attached consolidated

financial statements give a true and fair view in

conformity with the accounting principles generally

accepted in India;

a) in the case of the Consolidated Balance Sheet, of

the consolidated statement of affairs of PIPELINE

SYSTEMS LTD and its subsidiaries as at 31st March

2009; and

b) In the case of Consolidated Profit and Loss Account,

of the consolidated results of operations of PIPELINE

SYSTEMS LTD. and its subsidiaries for the year then

ended.

For Suresh C. Mathur & Co.


Sd/-

SURESH C. MATHUR

Place: Mumbai Partner

Date : 26th May, 2009 Membership No.1276

Auditors’ Report

Pipeline 97-106.p65 6/20/2009, 5:01 PM99


CONSOLIDATED BALANCE SHEET OF PIPELINE SYSTEMS LTD. AS AT 31 MARCH, 2009

(Amount in USD)

For the year ended For the year ended

Schedule March 31, 2009 March 31, 2008

SOURCES OF FUNDS

SHARE HOLDERS FUNDS

A) Share Capital A 24,460,815 20,435,815

B) Reserve & Surplus B 433,135 15,703

LOAN FUNDS

A) Secured Loans C 17,162,625 -

42,056,575 20,451,518

APPLICATION OF FUNDS :

A) FIXED ASSETS D 19,222,391 15,531,060

LESS : DEPRECIATION 2,696,088 510,922

16,526,303 15,020,138

Add: Capital Work-in-Progress 4,064,975 20,591,278 2,588,778 17,608,916

CURRENT ASSETS, LOANS & ADVANCES

A) Inventory E 32,746,244 107,894

B) Sundry Debtors F 2,988,709 1,165,385

C) Cash & Bank Balances G 5,958,937 1,732,134

D) Loans and Advances H 3,058,230 258,889

44,752,121 3,264,302

LESS : CURRENT LIABILITIES

& PROVISIONS 23,286,822 21,465,298 421,700 2,842,602

MISCELLANEOUS EXPENDITURE I NIL NIL

42,056,576 20,451,518

NOTES TO ACCOUNT N


(SURESH C. MATHUR) RAGHAV PUNJ ASHOK PUNJPartner Director DirectorM. No. 1276



Pipeline 97-106.p65 6/20/2009, 5:01 PM100


CONSOLIDATED PROFIT & LOSS ACCOUNT OF PIPELINE SYSTEMS LTD.FOR THE YEAR ENDED 31ST MARCH, 2009

(Amount in USD)

For the year ended For the year ended

Schedule March 31, 2009 March 31, 2008

INCOME : J 8,418,083 2,578,796

EXPENDITURE :

Raw Materials & Stores K 3,112,819 1,705,838

Manufacturing & Process Expenses 305,976 139,543

Employees’ Remuneration & Benefits L 837,738 38,793

Other Expenses M 1,188,080 127,099

Interest on loan 397,841 -

Depreciation 2,185,167 8,027,621 510,922 2,522,194

Profit transferred to Balance Sheet 390,462 56,602

NOTES TO ACCOUNT N




Consolidated Profit & Loss Account

Pipeline 97-106.p65 6/20/2009, 5:01 PM101


SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2009

(Amount in USD)For the year ended For the year ended

March 31, 2009 March 31,2008SCHEDULE ‘A’

SHARE CAPITAL

Authorised Share Capital 24,460,815 20,435,815

24,460,815 20,435,815

SCHEDULE “B”

RESERVES & SURPLUS

As per Last Balance Sheet 15,703 (22,798)Profit During the Year 390,462 56,602Add/ (Less) : Foreign Exchange Fluctuation 26,970 (18,101)

433,135 15,703

SCHEDULE “C”

SECURED LOANS

From Banks 17,162,625 NIL(Secured against Hypothecation of current assetsand second charge on the assets ) 17,162,625 NIL

SCHEDULE “D” FIXED ASSETS

GROSS BLOCK Depriciation Net Block

PARTICULARS As at Additions As Upto For the Upto As on As on1-Apr-08 During 31-Mar-09 1-Apr-08 Period 31-Mar-09 31-Mar-09 31-Mar-08

the Year

Furniture & Fixtures 8,611 8,775 17,386 384 1,484 1,868 15,517 8,227Office Equipment 12,981 20,091 33,072 445 1,738 2,183 30,889 12,536Plant & Machinery 12,211,337 3,121,519 15,332,856 418,832 1,825,037 2,243,869 13,088,987 11,792,505Computers 5,727 12,785 18,512 565 2,059 2,624 15,888 5,162Motor Cars 60,514 NIL 60,514 3,863 14,621 18,484 42,030 56,651Earthmoving Equipments 148,343 424,329 572,672 10,973 41,083 52,056 520,615 137,370Shed Constructions 3,069,433 NIL 3,069,433 75,685 298,449 374,134 2,695,299 2,993,748Office Building 14,114 NIL 14,114 174 696 870 13,244 13,940Vehicles NIL 103,833 103,833 NIL NIL NIL 103,833 NILCapital Work-in-Progress 2,588,778 1,476,197 4,064,975 NIL NIL NIL 4,064,975 2,588,778

TOTALS 18,119,838 5,167,528 23,287,366 510,921 2,185,167 2,696,088 20,591,278 17,608,917

PREVIOUS YEAR FIGURES NIL 18,119,838 18,119,838 NIL 510,922 510,922 17,608,917

SCHEDULE “E”

INVENTORY

Raw Material, Consumables, Semi finished goods 25,838,223 107,894Work In progress 7,956 NilFinished goods 6,900,065 Nil

32,746,244 107,894

(in USD)

Schedules

Pipeline 97-106.p65 6/20/2009, 5:01 PM102


SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2009(Amount in USD)

For the For theyear ended year ended

March 31, 2009 March 31, 2008SCHEDULE “F”

SUNDRY DEBTORS

Sundry Debtors 2,988,709 1,165,385

2,988,709 1,165,385

SCHEDULE “G”

CASH & BANK BALANCES

Cash in Hand 6,412 6,041Bank Balances 5,952,525 1,726,093

5,958,937 1,732,134

SCHEDULE “H”

LOANS & ADVANCES

Loans & Advances 2,945,602 139,447Staff Advance 16,007 45,236Deposits 96,621 74,206

3,058,230 258,889

SCHEDULE “I”CURRENT LIABLITIESSundry Creditors 2,809,942 421,700Mobilisation Advance 18,807,776 NILOther Liabilities 1,669,104 NIL

23,286,822 421,700

Schedules

Pipeline 97-106.p65 6/20/2009, 5:01 PM103


For the For theYear Ended Year Ended

March 31,2009 March 31,2008SCHEDULE “ J “INCOME :Sales & Pipe Coating Receipts 6,608,762 2,578,796Other Income 1,809,322 Nil

8,418,083 2,578,796

SCHEDULE “ K “RAW MATERIAL AND STORESA. Raw Material Consumed

Opening Stock 81,509 NilAdd : Purchases during the year 35,027,989 1,787,347Less : Closing Stock 25,409,973 81,509Consumption during the year 9,699,526 1,705,838

B. Consumption of StoresConsumables & StoresOpening Stock 26,385 NilAdd : Purchases during the year 723,181 154,494Less : Closing Stock 428,250 26,385Consumption during the year 321,315 10,020,840 128,110 1,833,947

C. Change in Finished Goods and WIP 6,908,021 Nil

3,112,819 1,833,947

SCHEDULE “L”EMPLOYEES’ REMUNERATION & BENEFITSSalaries and Wages 565,066 29,143Staff Welfare 272,672 9,650

837,738 38,793

SCHEDULE “M”OTHER EXPENSESAuditors Remuneration 750 750Bank Charges 237,570 12,688Commission 206,224 NilConveyance Expenses 3,218 474Postage, Telegram and Telephone 867 158General Expenses 157,225 10,549Insurance Expenses 82,945 23,997Licence - Registration fees 9,491 121Motor Vehicle Expesnes 30,244 2,057Printing & Stationery Expenses 16,336 2,839Professional charges 6,784 NilRent Rates and Taxes 257,658 61,513Repairs and Maintenance 29,246 NilTelephone/Internet Expenses 14,530 2,617Travelling Expenses 134,992 9,335

1,188,080 127,099

SCHEDULES FORMING PART OF PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009

(Amount in USD)

Schedules

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SCHEDULE “N “ - NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS OF PIPELINE SYSTEMS LTDFOR THE YEAR ENDED ON MARCH 31, 2009

1 SIGNIFICANT ACCOUNTING POLICIES

a. Method Of AccountingThe company maintain their accounting records on double entry system.

b. InventoriesThe raw materials, stores and spare parts are valued at cost, which is arrived on FIFO basis.Cost of inventoriescomprises of all costs of purchase, cost of conversion and other costs incurred in bringing the inventories to theirpresent condition and location. Cost of raw materials, stores and spares are determined by the average method.

c. DepreciationDepreciation is provided from the date the assets have been installed and put to use on written down value method.Depreciation on additions to assets is calculated pro-rata from the month of such addition.

d Lease hold landLand is procurred on lease basis from Hamriyah Free Zone Authority and lease rentals are accounted as per theterms and conditions under lease agreement.

e Revenue Recognition/IncomeRevenue Income is recognised on accrual basis except where mentioned otherwise, in particulari) Sales revenue is recognised when it is earned and no significant uncertainity exists as its realisation or collection.

Sales are net of sales return and trade discounts. Rebate, claims and discounts are accounted for as and whendetermined. Deductions made have been reduced from the sales where found necessary.Revenue from services is recognised on rendering of services.

ii) Gross Sales include freight charged in invoices.iii) Expenditure are accounted for on accrual basis and provisions are made for all known liabilities.

f. Treatment of expenditure during construction periodExpenditure in the case of new units and substantial expansion of existing units during the construction period isincluded in work in progress and the same is allocated to the respective Fixed Assets on the completion of theconstruction.

g Fixed Assetsi) Fixed assets are stated at Cost of acquisition and installation.The cost includes freight and related incidental

expenses.ii) The company has erected factory building sheds and installed plant and machinery on lease hold land.

h Foreign Currency Transactionsi) The payment and receipts in foreign currency during the period are accounted at the rates prevailing on the date

of transactions.ii) All loans in foreign currency and outstanding at the close of year are expressed in AED at the appropriate rate of

exchange prevailing on the date of Balance sheet.

i Sundry Debtors / Loans and AdvancesThese have been stated after making adquate provision for doubtful debts/advances

2 LICENCED AND INSTALLED CAPACITY

UNIT LICENCED AND INSTALLED2008-2009 2007-2008

Spiral Arc Welded Pipes MT 75000 75000Coating on Steel Pipes Mtrs NOT APPLICABLE

3 PRODUCTION, OPENING AND CLOSING STOCK

PRODUCTION OPENING STOCK CLOSING STOCKNAME UNIT Quantity Quantity Quantity Quantity Quantity Quantity

2008-09 2007-08 2008-09 2007-08 2008-09 2007-08

1 HSAW Pipes MT 6036.549 2575.83 - - 4,494.51 -2 Coating on Steel Pipes/Jobs Mtrs Turnkey Jobs Turnkey Jobs Turnkey Jobs

Schedules

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4 SALES TURNOVER & COATING JOBS

2008-09 2007-08Unit Quantity Value(USD) Quantity Value(USD)

1 HSAW Pipes M.T. 1542.041 2008259 2575.83 2,578,7962 Coating on Steel Pipes 4567893 NIL3 Others 32610 NIL

TOTAL 6,608,762 2,578,796

5 RAW MATERIAL CONSUMPTION

2008-09 2007-08Unit Quantity Value(USD) Quantity Value(USD)

1 H.R. Coil M.T. 6,227.60 137,319 2,589.28 1,689,9772 Flux M.T. 18.60 24,019 14.50 10,8713 Filler wire M.T. 19.68 32,482 6.46 4,9904 Polypropylene M.T. 11.50 22,406 NIL NIL5 PE Powder M.T. 8.00 31,121 NIL NIL6 Coaltar M.T. 1.00 373 NIL NIL7 Synthetic Primer LTR 20.00 57 NIL NIL8 Base Copon Hycote LTR 27,360.00 329,084 NIL NIL9 Activator Copon LTR 6,840.00 81,121 NIL NIL10 Copon Thinner LTR 12,200.00 29,177 NIL NIL11 Cement M.T. 2,071.73 261,083 NIL NIL12 Wiremesh SQM 107,400.09 194,695 NIL NIL13 Ironore M.T. 8,284.50 938,260 NIL NIL14 Epoxy Powder M.T. 22.34 164,411 NIL NIL15 Polyethlene M.T. 268.18 465,184 NIL NIL17 Adhesive M.T. 22.65 97,536 NIL NIL18 Others NIL 31,851 NIL NIL

TOTAL 2,840,180 1,705,83819 Stores & Consumbales 321,566 128,110

3,161,746 1,833,948

6 FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair Value :Financial assets of the establishment include cash and bank balance, trade and other receivables and financial liablitiesinclude trade other payables and loans from related party.The management believes that the fair values of the financial assets and liabilties are not significantly different from theircarrying amounts at balance sheet date.Exchange rate risksThere are no significant exchange rate risks as substantially all financial assets and financial liablities are denominated inArab Emirate Dirham or Dollars to which the Dirham is pegged.

7 The previous year figures have been regrouped/rearranged wherever necessary to conform with the current yearclassification.

8 The rate of conversion 1 USD = 3.685 AED




Schedules

Pipeline 97-106.p65 6/20/2009, 5:01 PM106


To

The Board of DirectorsPSL USA, Inc. and its Subsidiary

We have audited the accompanying consolidated balance sheet of PSL USA, Inc. and Subsidiary as of March 31,2009, and the related consolidated statements of operations, stockholder’s equity, and cash flows for the yearthen ended. These consolidated financial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the consolidated financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. Anaudit also includes assessing the accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believe that our audit provides a reasonablebasis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, thefinancial position of PSL USA, Inc. and Subsidiary as of March 31, 2009, and the results of its operations andcash flows for the year then ended in conformity with accounting principles generally accepted in the UnitedStates of America.

Our audit was made for the purpose of forming an opinion on the basic consolidated financial statements takenas a whole. The supplementary schedule of operating expenses, is presented for purposes of additional analysisand is not a required part of the basic consolidated financial statements. Such information has been subjected tothe auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion,is fairly stated in all material respects in relation to the basic consolidated financial statements taken as a whole.

As per our report attached

For AVL, Certified Public Accountants

Sd/-(ALEXANDER, VAN LOON, SLOAN, LEVENS & FAVRE, PLLC)

Gulfport, MississippiDate: 19th May, 2009

Independent Auditors’ Report

Independent Audi Report-107-120.p65 6/20/2009, 5:01 PM107


CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2009

2008-09 2007-08(In USD) (In USD)

ASSETS

CURRENT ASSETS

Cash and cash equivalents 903,405 922,884Accounts receivable, net 1,400 NilInventories 266,563,963 NilPrepaid steel coil 46,170,316 NilPrepaid Insurance Nil 184,960Deferred tax asset, current 2,872,765 NilOther current assets 334,277 Nil

Total current assets 316,846,126 1,107,844

PROPERTY, PLANT, AND EQUIPMENTBuildings 33,992,788 NilMachinery and equipment 36,827,139 33,936Automobiles 140,156 123,231Furniture and fixtures 20,053 NilConstruction in progress 28,395,179 25,312,577Total property, plant, and equipment 99,375,315 25,469,744Less: accumulated depreciation (803,456) (23,507)

Net property, plant, and equipment 98,571,859 25,446,237

OTHER ASSETSRestricted cash 7,889,877 66,887,446Bond issuance costs, net of accumulated amortization 4,884,463 4,182,563Deferred tax asset, non-current 87,110 1,445,602Other assets 3,083 7,368,733

Total other assets 12,864,533 79,884,344

TOTAL ASSETS 428,282,518 106,438,425

LIABILITIES AND EQUITY

CURRENT LIABILITIESAccounts and contracts payable 7,264,996 6,030,144Accrued interest 60,813 158,085Accrued payroll liabilities 469,861 45,880Accrued expenses 293,885 NilDeferred revenue 308,934,181 NilRetainage payable Nil 24,529Revolving line of credit payable 2,500,000 NilCapitalized leases payable 119,565 1,186Bonds payable 588,235 NilDue to parent (PSL Limited) 26,034 Nil

Total current liabilities 320,257,570 6,259,824

LONG-TERM LIABILITIESCapitalized leases payable - net of current maturities 9,250 5,150Bonds payable - net of current maturities 77,411,765 78,000,000Note payable 5,500,000 NilTotal long-term liabilities 82,921,015 78,005,150

Total liabilities 403,178,585 84,264,974

STOCKHOLDER’S EQUITYCommon stock: $1 par, 20,003,083 shares authorized, issuedand outstanding 20,003,083 20,003,083Accumulated deficit (258,286) (2,279,036)Non-controlling interest in consolidated subsidiary’s members’ equity 5,359,136 4,449,404

Total stockholder’s equity 25,103,933 22,173,451

TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY 428,282,518 106,438,425

As per our report attached FOR AND ON BEHALF OF THE BOARD OF DIRECTORSFor AVL, Certified Public Accountants

(Alexander, Van Loon, Sloan, Levens & Favre, PLLC) Raghav Punj Alok Punj Ashok PunjDirector Director Director

Place: Gulfort MississippiDate: 19th May, 2009




CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY FOR THE YEAR ENDED MARCH 31,2009

Common Stockof Shares Amount Accumulated Non-controlling Total

Deficit Interest Equity

BALANCE AT APRIL 1, 2008 20,003,083 20,003,083 (2,279,036) 4,449,404 22,173,451

Prior period adjustments 1,886,264 871,800 2,758,064

BALANCE AT APRIL 1, 2008, as restated 20,003,083 20,003,083 (392,772) 5,321,204 24,931,515

Net income 134,486 37,932 172,418

BALANCE AT MARCH 31, 2009 20,003,083 20,003,083 (258,286) 5,359,136 25,103,933

(in USD)

CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2009

(Amount In USD)

2008-09 2007-08

SALES NIL NIL

COST OF SALES NIL NIL

GROSS PROFIT NIL NIL

OPERATING EXPENSES (1,757,474) NIL

INCOME FROM OPERATIONS (1,757,474) NIL

OTHER INCOME (EXPENSES) 33,526 NILStart-up and organisational costs NIL (4,869,479)Interest income 488,944 723,286Bank charges (1,138,033) NILInterest expense (166,098) (516,910)Total other income (expenses) (2,539,135) (4,663,103)

NET LOSS BEFORE TAXES (2,539,135) (4,663,103)

Deferred income tax benefit 2,711,553 1,445,602NET INCOME/(LOSS) 172,418 (3,217,501)Less: net income contributed to non-controlling interest (37,932) NIL

NET INCOME ATTRIBUTABLE TO PSL USA, INC. 134,486 (3,217,501)




Consolidated Statements of Operations & Equity



CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2009

(Amount In USD)2008-09 2007-08

CASH FLOWS FROM OPERATING ACTIVITIES

Cash received from customer 308,932,781 NilInterest income 488,944 723,286Other income 33,525 823Cash paid to employees (1,402,670) (626,247)Cash paid to suppliers and service providers (311,778,578) (1,114,217)Interest paid (263,370) (358,657)Income taxes paid (18,426) NilNet cash used in operating activities (4,007,794) (1,375,012)

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property plant, and equipment (60,737,309) (19,091,711)Deposit on Equipment Nil (7,368,733)Interest paid and capitalized in construction in progress (1,334,803) (487,988)Net cash used in investing activities (62,072,112) (26,948,432)

CASH FLOWS FROM FINANCING ACTIVITIESCapital Contributions by members to subsidiary Nil 1,990,000Issuance of common stock Nil 20,003,083Bond issuance costs (921,291) (4,252,886)Repayment on advance from related party Nil (15,000)Proceeds from bonds payable 8,000,000 78,000,000Advances from parent 26,034 NilPrincipal payments on capitalized lease (41,885) Nil

Net cash provided by financing activities 7,062,858 9,5725,197

Net increase/(decrease) in cash and cash equivalents (59,017,048) 6,7400,874Cash and cash equivalents, beginning of year 67,810,330 409,456Cash and cash equivalents, end of year 8,793,282 6,7810,330

SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING AND INVESTING ACTIVITIESPurchase of property and equipment with financing 164,364 7,215

CLASSIFIED ON THE BALANCE SHEET AS FOLLOWS:Cash and cash equivalents - current assets 903,405 922,884Restricted cash - other assets 7,889,877 6,6887,446Total cash and cash equivalents 8,793,282 6,7810,330

RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIESNet income/(Loss) 172,418 (3,217,501)Adjustments to reconcile net loss to net cash used in operating activitiesDepreciation & Amortization 260738 93,830Deferred income tax benefit (2,702,686) (1,445,602)Organizational Costs Nil 3,000,000(Increase)/decrease in assets Nil NilPrepaid Insurance Nil (184,960)Prepaid steel coil (46,170,316) NilAccounts receivable (1,400) NilInventories (265,843,215) NilOther assets (152,400) NilIncrease/(decrease) in liabilities Nil NilAccounts payable, operating 915,001 175,088Accrued interest (97,272) 158,253Accrued payroll liabilities 423,981 45,880Accrued expenses 269,425 NilDeferred revenue 308,934,181 NilIncome tax payable (16,249) NilTotal adjustments (4,180,212) 1,842,489

Net cash used in operating activities (4,007,794) (1,375,012)THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS




Consolidated Statement of Cash Flows



period, which are expensed in the period to which they relate.

Restricted Assets

Assets are reported as restricted when limitations on theiruse change the nature or normal understanding of theavailability of the asset. Such constraints are either externallyor internally imposed by creditors and/or management.

Restricted cash represents cash received from proceeds ofbond funds restricted for specific use, cash that hasrestrictions imposed by bond lenders to collateralize theinterest portion of the bond, and cash designated bymanagement for future working capital needs.

Financial Instruments and Credit Risk

Financial instruments that potentially subject the Companyto concentrations of credit risk consist principally of cashdeposits in banks. Deposits in excess of amounts insuredby the Federal Deposit Insurance Corporation (“FDIC”) areexposed to loss in the event of nonperformance by thefinancial institution. At times, the Company has cash depositsin excess of the FDIC coverage limit of $250,000.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost anddepreciated using the straight-line method for financialreporting over the estimated useful lives of the various assetsas follows:

Useful Lives in Years

Automobiles 5Buildings 50Furniture and fixtures 5Machinery and equipment 10

Maintenance and repairs are charged to expense as incurredrenewals and betterments are capitalized. Upon retirementor disposal of assets, the cost and related accumulateddepreciation are removed from the accounts and the gainor loss, if any, is included in the results of operations.

Construction in Progress

During the year, the Company was involved in constructinga pipe manufacturing facility and a pipe coating mill andhas incurred costs related to the construction and financingof such facility. It is the Company’s policy to capitalize alldirect costs and a proportionate allocation of indirectoverhead costs associated with the construction in progress.Interest costs related to borrowing for construction inprogress are capitalized from the date of the borrowing untilthe assets are ready for their intended use. Insurance coststhat are directly related to the building and equipmentinclude builder’s risk insurance and cargo insurance, bothof which have been capitalized as part of construction inprogress in the current year. Direct labour costs have beencapitalized as part of construction in progress for thoseemployees and outside laborers working solely on theconstruction of the facility.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIESOrganization

PSL USA, Inc. was incorporated in December 2006 in theState of Delaware, USA as a wholly owned subsidiary ofPSL Limited. PSL - North America, LLC (78% owned by PSLUSA, Inc.) was formed in the State of Delaware and registeredto conduct business in Mississippi. PSL USA, Inc. and itssubsidiary, PSL - North America, LLC (collectively referredto as “the Company”), are engaged in the manufacturing ofsteel pipes, used for underground natural gas lines, as wellas providing anti-corrosive coatings on steel pipes. Duringthe year, PSL - North America, LLC commissioned the pipemill and began production and continues construction of acoating facility at its plant in Hancock County, Mississippi,in the Port Bienville Industrial Park.

Principles of Consolidation

The accompanying consolidated financial statementsinclude the accounts of PSL USA, Inc. and its subsidiary,PSL - North America, LLC. All material intercompanytransactions and balances have been eliminated inconsolidation.

Use of Estimates

The preparation of consolidated financial statements inconformity with accounting principles generally acceptedin the United States of America requires management tomake estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingentassets and liabilities at the date of the consolidated financialstatements and the reported amounts of revenues andexpenses during the reporting period. Accordingly, actualresults could differ from these estimates.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Companyconsiders cash in operating bank accounts, cash in handand short-term investments with an original maturity of threemonths or less when purchased to be cash and cashequivalents.

Accounts Receivable

The Company reports trade receivables at net realizablevalue. Management determines the allowance for doubtfulaccounts based on historical losses and current economicconditions. On a continuing basis, management analyzesdelinquent receivables and, once these receivables aredetermined to be uncollectible, they are written off througha charge against an existing allowance account or againstearnings.

Inventories

Inventories are stated at the lower of cost (specificidentification method) or market.

Prepaid Expenses

Prepaid expenses represent insurance premiums andadvances on steel coil purchases benefiting more than one

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS AT MARCH 31, 2009

Notes




NOTE 2 - INVENTORIES

Inventories at March 31, 2009 consist of the following:

(in USD)

Raw materials 252,646,773Work in process 13,507,370Supplies inventory 409,820

Total 266,563,963

NOTE 3 - PREPAID STEEL COIL

As of March 31, 2009, the Company had advanced$46,170,316 to a supplier for steel coils not received.

NOTE 4 - OTHER CURRENT ASSETS

Other current assets at March 31, 2009 consist of thefollowing:

(in USD)

Prepaid insurance 302,323Prepaid taxes 27,293Prepaid rent 3,461Employee advances 1,200

334,277

Prepaid insurance is reported net of financed insurancepremiums of$894,343, see Note 15.

NOTE 5 - PROPERTY PLANT AND EQUIPMENT

Property, plant and equipment at March 31, 2009 issummarized as follows:

(in USD)

Balance Transfers Balance3/31/2008 Additions Disposals 3/31/2009

Buildings NIL NIL 33,992,788 33,992,788

Machinery and equipment 33,936 171,052 36,622,151 36,827,139

Automobiles 123,231 16,925 NIL 140,156

Furniture and fixtures NIL 20,053 NIL 20,053

Construction in progress 29,275,304 69,734,814 (70,614,939) 28,395,179

Total property, plant

and equipment 29,432,471 69,942,844 NIL 99,375,315

Less: accumulated depreciation (23,507) (779,949) NIL (803,456)

Net property, plant and equipment 29,408,964 69,162,895 NIL 98,571,859

During 2009, PSL - North America, LLC completedconstruction on the pipe mill portion of its Hancock County,Mississippi, manufacturing facility in the Port BienvilleIndustrial Park. The completed assets totaled $70,614,939of which $1,474,409 represents capitalized interest costs,$1,682,432 represents capitalized insurance costs,$4,534,605 represents capitalized direct labour costs and$21,365,577 represents capitalized indirect costs throughoutthe construction period.

Construction in progress at year end consists of the coatingmill portion of the facility. Of the $28,395,179 constructionin progress recorded, $387,093 represents capitalizedinterest costs, $394,644 represents capitalized insurancecosts, $1,063,673 represents capitalized direct labor costsand $7,845,754 represents capitalized indirect coststhroughout the construction period.

Impairment of Long-Lived Assets

In accordance with Statements of Financial AccountingStandards (SFAS) No. 144, Accounting for the Impairmentor Disposal of Long-Lived Assets, long-lived tangible andintangible assets are reviewed for impairment when eventsindicate that the carrying value may not be recoverable.The Company evaluates the carrying values of all long-livedassets, including property, plant and equipment, wheneverevents or changes in circumstances indicate that the carryingamount of an asset may not be recoverable. A long-livedasset is considered impaired when future discounted cashflows are less than carrying value. In that event, a loss iscalculated based on the amount the carrying value exceedsthe fair value of such asset. Management believes that long-lived assets in the accompanying balance sheet areappropriately valued.

Compensated Absences

Full-time employees receive paid time off based upon jobclassification, length of service, and other factors. Paid time offincludes vacation, sick, and personal time and vests with theemployee. Employees are able to carryover 160 hours ofvacation time and 48 hours of sick time at year end and anyhours over the maximum are paid out to the employee.Therefore, compensated absences earned but unpaidapproximates $176,000 and has been accrued at year endand included in accrued payroll liabilities on the balance sheet.

Revenue Recognition

The Company recognizes revenue upon delivery of thefinished goods to a customer.

Income Taxes

The Company accounts for income taxes in accordance withSFAS 109, Accounting for Income Taxes, which requires anasset and liability approach to financial accounting andreporting for income taxes. In accordance with SFAS 109,deferred income tax assets and liabilities are computedannually for differences between the financial statement andtax bases of assets and liabilities that will result in taxableor deductible amounts in the future based on enacted taxlaws and rates applicable to the periods in which thedifferences are expected to affect taxable income. Incometax expense (benefit) is the tax payable or refundable for theperiod plus or minus the change during the period indeferred tax assets and liabilities.

Under SFAS 109, a valuation allowance is required when itis more likely than not that some portion of the deferred taxassets will not be realized. Realization is dependent ongenerating sufficient future taxable income. Althoughrealization is not assured, management believes it is morelikely than not that the deferred tax assets will be realized.

The Company has elected to defer the provisions of FinancialAccounting Standards Board Interpretation (FIN) 48,Accounting for Uncertainty in Income Taxes, under theprovisions of FIN 48-3. The Company uses the SFAS 5, LossContingencies, approach for evaluating uncertain taxpositions. We continually evaluate expiring statutes oflimitations, audits, proposed settlements, changes in tax lawand new authoritative rulings.

Notes



For the year ended March 31, 2009, capitalized interestcost totaled $1,334,803.

Depreciation expense was $779,949 for the year endedMarch 31, 2009 and is included in operating expenses onthe statement of income ($41,347) and construction inprocess ($17,854) and work in process ($720,748) on thebalance sheet.

NOTE 6 - RESTRICTED CASH

At March 31, 2009, restricted cash amounts were includedin other assets and are summarized as follows:

(in USD)

Cash restricted by bond requirements 748,216Collateral related to letter of creditissued to customer 5,000,000Collateral related to risk managementarrangements 538,184Cash reserved for other special purposes 1,603,477

Total 7,889,877

NOTE ‘7 - DEBT ISSUANCE COSTS

Debt issuance costs were incurred in obtaining the financingas indicated in Notes 10 and 11. The costs are beingamortized over the original life of the debt.

Debt issuance costs as of March 31, 2009 were as follows:

(in USD)

Debt issuance ‘costs 5,174,177

Less: amortization (289,714)

Debt issuance costs, net of amortization 4,884,463

Amortization expense was $219,391 for the year endedMarch 31, 2009 and is included in operating expenses onthe statement of income.

NOTE 8 - ACCRUED EXPENSES

Accrued expenses as of March 31, 2009 consist of thefollowing:

(in USD)

Bank charges payable 206,502Use tax payable 48,919Other accrued expenses 38,464

Total 293,885

NOTE 9 - DEFERRED REVENUE

Deferred revenue represents funds received from theCompany’s sole customer in advance for purchases of rawmaterials and billings for completion of production phasesfor work in process. As of March 31, 2009 the product wasnot delivered and deferred revenue was $308,934,181.

NOTE 10 - LINE OF CREDIT

Revolving Line of Credit Payable

On March 13, 2009, the Company entered into an availablerevolving credit note with HSBC Bank USA, NationalAssociation (HSBC) for $30,000,000, which expires on


March 13, 2010. As on March 31, 2009, the Company hadan outstanding balance of $2,500,000. Pursuant to theagreement, there will be a sublimit for the issuance of lettersof credit not to exceed $15,000,000 and the furtherunderstanding that HSBC will not advance any funds ormake any other extensions of credit to the Company inexcess of $15,000,000 without the prior written consent ofJPMorgan Chase Bank, N.A. and without sufficient additionalcollateral as determined by HSBC.

As security for the note, the Company obtained anirrevocable standby letter of credit issued by ICICI BankLimited, New York Branch (ICICI) in the amount of$15,000,000, which expires March 13, 2010. As of March31, 2009, $10,000,000 of the $15,000,000 has been issued.The Company will pay ICICI, on demand, the amountrequired to pay principal plus interest from the date of theissuance of the advance to the date of reimbursement at arate per annum equal to the U.S. prime rate plus 2%.

The outstanding principal balance of the revolving creditnote with HSBC shall bear interest at a rate per annum forthe interest periods which the Company selects equal to avariable rate that equals the prime rate (normally HSBC’sprime commercial rate for U.S. Dollar loans or equivalent)or 1.5% above the LIBOR rate (normally HSBC’s rate perannum at which deposits in U.S. Dollars for an applicableperiod are offered to HSBC by first class banks in the LondonInterbank Market) for interest periods of thirty, sixty, andninety days, but not longer than the remainder of the termof the note. As of March 31, 2009, the Company had madeno principal or interest payments on the note.

The Company’s debt agreement with HSBC containsrestrictions and covenants. Under these restrictions, theCompany must not acquire any new debt and must not makeany distributions to the members of PSL -North America,LLC without the prior written consent of HSBC. In addition,the Company must maintain certain levels of net worth.Management is not aware of any violations of the covenants.

NOTE 11 - LONG-TERM DEBT

Bonds Payable

On November 1, 2007, the Company entered into a loanagreement with Mississippi Bank Finance Corporation(MBFC). The loan agreement provides that MBFC shall issueTax Exempt Variable Rate Demand Revenue Bonds, Series2007A, in the amount of $68,000,000, and Taxable VariableRate Demand Revenue Bonds, Series 2007B, in the amountof $10,000,000, and loan the proceeds thereof to theCompany for use in acquiring, constructing, installing, andequipping a pipe manufacturing facility and other relatedactivities. The amount of loan payments to be made by theCompany to MBFC pursuant to the loan agreement shall besufficient to pay the principal and interest on the bonds, asand when the bond and interest payments are due andpayable. In addition, the Company is responsible for all costsand expenses related to the issuance of the bonds and thefees and charges of the trustee (Hancock Bank) and theremarketing agent (Merchant Capital).

Notes




As security for the MBFC loan agreement, the Companyobtained an irrevocable transferable direct pay letter ofcredit, which expires on November 1, 2010, for up to$78,747,945 from JP Morgan Chase Bank, N.A. in favor ofthe trustee. In accordance with the reimbursement agreementwith JP Morgan Chase Bank, N.A., the Company is requiredto pay a non-refundable fee in arrears on the gross availableamount beginning on December 31, 2007, and continuingon the last day of each March, June, September, andDecember thereafter to the termination date at a rate of 1%per annum, as referenced in Note 12. In addition, intereston the unpaid principal amount of each advance will accrueat a rate per annum equal to the prime rate (normally JPMorgan Chase Bank, N.A.’s prime commercial rate for U.S.Dollar loans or equivalent) plus 1%.

In addition, on October 22, 2007, the State Bank of Indiaissued an’irrevocable standby letter of credit, which expireson November 17, 2010, for up to $78,000,000 in favor ofthe JP Morgan Chase Bank, N.A. This standby letter of creditwas issued based on the financial condition of PSL USA,Inc,’s parent, PSL Limited.

The Company’s loan agreement with MBFC shall remain infull force and effect until November 1, 2032, or until suchlater time as all of the bonds and the fees and expenses ofMBFC and Hancock Bank and all amounts payable toJPMorgan Chase Bank, N.A. under the reimbursementagreement are paid and obligations fulfilled.

Commencing with the calendar quarter ending September30, 2009, and continuing as long as the obligations remainoutstanding, the Company shall not permit the ratio ofearnings before interest, taxes, and depreciation (EDITDA)for any calendar quarter to the sum of (a) scheduled andvoluntary principal payments (b) interest expense (c)scheduled capital lease payments, and (d) distributions andpayments on intercompany debt, for such calendar quarterperiod to be less than 1.00 to 1.00.

The Company’s loan agreement with MBFC containsrestrictions and covenants. Under these restrictions, theCompany must obtain the consent of JP Morgan Chase Bank,N.A. to pay distributions to members of PSL - North America,LLC or borrow fiom others. In addition, the Company mustmaintain certain levels of net worth. Management is notaware of any violations of the covenants.

As of March 31, 2009 all bond proceeds have been used tofund property, plant, and equipment and provide theCompany with working capital.

Bonds payable consist of the following at March 31, 2009:

Mississippi Business Finance Corporation(MBFC) Tax Exempt Variable Rate DemandRevenue Bonds, Series 2007A; OriginatedNovember 1, 2007 in the amount of$68,000,000; Interest rate determinedweekly by Merchant Capital; Secured by allloan payments received by MBFC and a letterof credit issued by JP Morgan Chase Bank,

N.A. with a supporting letter of credit fiomState Bank of India; Interest only paymentsdue monthly through April 2018 withprincipal payments in the amount of$2,266,667 due semi-annually beginningMay 1, 2018; Matures in November 2032. $ 68,000,000

Variable Rate Demand Revenue Bonds,Series 2007B; Originated November 1, 2007in the amount of $10,000,000; Interest ratedetermined weekly by Merchant Capital;Secured by all loan payments received byMBFC and a letter of credit issued by JPMorgan Chase Bank, N.A. with a supportingletter of credit fiom State Bank of India;Interest only payments due monthly thruOctober 1, 2009 with principal payments inthe amount of $588,235 due semi-annuallybeginning November 1, 2009; Matures in

November 2032. $ 10,000,000

Total bonds payable $ 78,000,000

The principal maturities of long-term bonds payable as ofMarch 31, 2009 are as follows:

(in USD)

Year Ending Series 2007A Series 2007BMarch 31, Tax Exempt Taxable Total

Bond Bond Bond

2010 Nil 588,235 588,2352011 Nil 1,176,470 1,176,4702012 Nil 1,176,470 1,176,4702013 Nil 1,176,470 1,176,4702014 Nil 1,176,470 1,176,470Thereafter 68,000,000 4,705,885 72,705,885

Total 68,000,000 10,000,000 78,000,000

Note Payable

On February 25, 2009, the Company entered into a notepayable with Export-Import Bank of India (EXIM Bank) for$5,500,000, for the purpose of financing the import ofmachinery, equipment, machinery spares and tools fiomIndia to the United States. According to the agreement,security on the note will be: promissory notes to be issuedby the Company covering each amount equal to the valueof the shipment of goods financed, trust receipts relating toeach shipment of goods financed, corporate guarantee ofPSL Limited, India, and the non-disposal of PSL USA, Inc.’sshare in the equity capital of the Company.

Note payable consists of the following at, March 31, 2009:

Note Payable - Exim Bank, OriginatedFebruary 25, 2009 in the amount of$5,500,000; Interest at 8.25% per annum;Secured by promissory notes to be issued bythe Company covering each advance equalto the the value of shipments and trustreceipts relating to each shipment of goodsfinanced; Interest only payments duequarterly through March 2011 of $113,438,thereafter, quarterly payments of $423,077,including principal and interest; Maturesin March 2014. $ 5,500,000

Notes




The principal maturities of the note payable as of March31, 2009 are as follows:

(in USD)

Year EndingMarch 31, Amount

2011 423,0772012 1,692,3082013 1,692,3082014 1,692,307

Total $ 5,500,000

The Company’s debt agreement with EXIM Bank containsrestrictions and covenants. Under these restrictions, theCompany must use the funds solely to purchase goods fromIndia. Management is not aware of any violations of thecovenants.

Capitalized Leases Payable

Capitalized leases payable consists of the following at March31, 2009:

Capitalized lease payable; Originated August2007 in the amount of $7,215; Interest at12% per annum; Secured by one copier;Monthly payments of $157; Matures in July2012. $ 5,163

Capitalized lease payable; Originated March2009 in the amount of $6,864; Interest at10% per annum; Secured by one copier;Monthly payments of $140; Matures inFebruary 2014. $ 6,499

Capitalized lease payable; Originated August2008 in the amount of $157,500; Interest at8% per annum; Secured by an industrial lifttruck; Monthly payments of $6,700 with afinal payment of $49,900 at the end of thelease; Matures in February 2010. $ 117,153

Total $ 128,815

The following is an analysis of the leased assets included inproperty, plant, and equipment:

(in USD)

Equipment under capital lease 171,579Less accumulated depreciation (18,112)

Net book value 153.467

The future minimum lease obligation and the net presentvalue of these minimum lease payments as of March 31,2009 are as follows:

(in USD)

Year EndingMarch 31, Amount

2010 127,1642011 3,5642012 3,5642013 2,3082014 1,540

Total payments 138,140Less amount representing interest (9,325)

Present value of minimum payments 128,815Less current maturities (119,565)

Capitalized leases payable -net of current maturities 9,250

NOTE 12 - BANK CHARGES

Bank charges consists of non-refundable recurring feesassociated with the letters of credit required as security forthe MBFC bonds payable, and other outstanding debt andfor fees associated with the letter of credit issued by theCompany on behalf of the Company’s sole customer. Forthe year ended March 31, 2009, bank charges totaled$1,138,033 with $206,502 included in bank chargespayable as referenced in Note 8.

NOTE 13 - INTEREST COST

The Company capitalizes interest cost as a component ofconstruction in progress. The following is a summary ofinterest cost incurred during the year ended March 31, 2009.

(in USD)

Interest cost capitalized 1,334,803Interest cost expensed 166,098

Total 1,500,901

NOTE 14 - INCOME TAXES

The Company has no current income tax expense for 2009due to current year losses.

Deferred Income Taxes

Deferred income taxes are calculated on the temporarydifferences between the financial reporting and the incometax bases of inventory, property, plant, and equipment, aswell as certain intangibles (i.e., start-up and organizationalcosts), along with the carryforward offset of unused taxcredits and net operating losses.

Notes



The components of the deferred tax asset are as follows atMarch 31, 2009:

(in USD)

Federal State Total

Deferred tax assetStart-up and organizational costs 710,400 104,471 814,871Inventories 704,485 NIL 704,485Property, plant and equipment NIL 4,675 4,675Tax credit carryforwards 144,729 1,899,463 2,044,192Net operating loss carryforward 112,646 19,667 132,313

1,672,260 2,028,276 3,700,536

Deferred tax liabilityInventories NIL 8,226 8,226Property, plant and equipment 732,435 NIL 732,435

732,435 8,226 740,661

Total deferred tax asset, net 939,825 2,020,050 2,959,875

The net deferred tax asset is reported on the balance sheetas follows:

Deferred tax asset, current $2,872,765Deferred tax asset, non-current $87,110

Total $2,959,875

The reconciliation of loss for financial statement reportingand income tax reporting is summarized as follows:

(in USD)

Federal State

Loss for financial statement reporting, (2,539,135) (2,539,135)before income tax provisionPermanent differencesNon-controlling interest in net loss 546,723 546,723Non-taxable income NIL (15,949)Non-deductible expenses 18,092 88,072

Total permanent differences 564,815 618,846Temporary differencesStart-up and organizational costscapitalized for income tax purposes 1,429,340 1,429,340Tax credit deduction 144,730 NILDepreciation (24,511) (13,327)

Total temporary differences 1,549,559 1,416,013

Net operating loss for income tax purposes (424,761) (504,276)

At March 31, 2009, the Company has available for Federaland State income tax purposes an unused net operating losscarry forward in the amount of $424,761 and $504,276,respectively, which will expire in March 2029.

In addition, the Company has Federal tax credit carryforwards in the amount of $144,730 expiring 2029 and Statetax credit carry forwards in the amount of $1,899,463 ofwhich $658,673 expires in March 2011 and $1,240,790expires March 2012.

NOTE 15 - COMMITMENTS AND CONTINGENCIES

Covenants to MBFC Bonds Payable

As part of the agreement entered into for bonds payable, asdiscussed in Note 11, the Company must maintain, at alltimes, a minimum net worth of not less than 75% of theCompany’s actual net worth as of the preceding fiscal year

end, which net worth shall be adjusted annually upon receiptof the audited consolidated financial statements in anamount equal to 40% of the Company’s annual positive netincome from the preceding fiscal year. The Company is incompliance at March 31, 2009.

In addition, the bond agreement restricts the Company fromdeclaring or paying any distributions on any membershipinterest (exclusive of distributions to the members of PSL -North America, LLC in amounts equal to the taxesattributable to the Company’s net profits) and from directlyor indirectly purchasing, redeeming, or otherwise acquiringor retiring any of PSL - North America, LLC’s members’capital interest or making any other distributions in respectof the members’ capital interest without MBFC’s prior writtenconsent.

Covenants to HSBC Revolving Line of Credit Payable

As part of the agreement entered into for the revolving lineof credit, as discussed in Note 10, the Company mustmaintain, at the end of each quarter, beginning with thefiscal year ended March 31, 2009, a minimum net worth ofnot less than zero U.S. dollars of the Company’s actual networth as of the preceding fiscal year end. The Company isin compliance at March 31, 2009.

In addition, the note agreement restricts the Company, frommaking any distribution to any members of PSL - NorthAmerica, LLC or managers in cash or in property or redeem,purchase or otherwise acquire, directly or indirectly, anyinterest, provided, so long as the Company is not in default,hereunder, distributions to the members of PSL - NorthAmerica, LLC in such amounts as are necessary to pay thetax liability of such members due as a result of such members’interest in PSL -North America, LLC.

Covenants to EXIM Bank Note Payable

As part of the agreement entered into for the note payable,as discussed in Note 11, the Company must only utilize theproceeds of the note payable for the financing of purchasesof goods from India. For the year ended March 31, 2009,the Company had used the note proceeds to pay off apayable to PSL Limited for the purchase of equipmentacquired from India. The Company is in compliance atMarch 31, 2009.

The Company has entered into various non-cancellable leaseagreements as follows:

Plant Facility Land Lease

In July 2007, the Company entered into a lease agreementwith Hancock County Port and Harbor Commission for thesite within the Port Bienville Industrial Park, upon whichthe Company is constructing its pipe manufacturing facility,for a period of thirty-three years at a cost of $1 per year.

The lease payments are identified in the agreement as$687,000 per year, abated to $1 per year during any year inwhich the Company maintains the minimum levels ofemployment set forth in the agreed-upon Employment


Notes



Commitment, as defined in the Project Agreement by andamong the Company and the State of Mississippi, HancockCounty, Hancock County Port and Harbor Commission, andcertain authorities of or within the State of Mississippi datedas of April 25, 2007. As stated in the Project Agreement, theCompany is not required to meet those employmentrequirements and submit the employment reports until oneyear after the Ramp Up Period has ended. The Ramp UpPeriod is defined in the Project Agreement as three full yearsbeginning with the first full month beginning after the facilityis placed in service (Ramp Up Period commenced February1, 2009). The Company, is therefore, not required to meetthe minimum levels of employment and submit the annualreports until February 1, 2012. As of March 31, 2009, theCompany had met the lease requirements because theCompany was still within the Ramp Up Period; therefore,$1 is reflected in operating expenses in the statement ofoperations.

Since management expects to meet the requiredemployment level condition of the lease agreement, theCompany does not have a material future lease obligationas of March 31, 2009.

Office Building Lease

In May 2008, the Company entered into a lease agreementfor the lease of office space in Houston, Texas. The leaseterm covers a five year period and commenced on August15, 2008 with escalating payments over the term of the lease.Lease expense for the year total $27,690 and is reflected inoperating expenses in the statement of operations.

The estimated future minimum lease payments for the officebuilding lease as of March 31, 2009 are as follow:

Year Ending (in USD)March 31, Amount

2010 42,1502011 43,0732012 43,9962013 45,5352014 15,384

Total 190,138

Insurance Commitments

In September 2008, the Company entered into a financingagreement for multiple insurance policies totaling$1,065,835 (including finance charges) with First InsuranceFunding Corp. The payments are $98,457 per month forten months with interest at 3.86% per annum.

In October 2008, the Company entered into a financingagreement for multiple insurance policies totaling$1,416,184 (including finance charges) with First InsuranceFunding Corp. The payments are $108,912 per month fortwelve months with interest at 4.2% per annum.

Total payments including finance charges paid as of March31, 2009 on both finance agreements were $1,587,676 with

a remaining outstanding commitment of $894,343.

NOTE 16 - CONCENTRATIONS

Cash

The Company’s cash deposits with financial institutions arein excess of the insurance provided by the FDIC by a totalof $8,472,270 as of March 31, 2009,

Major Customer

For the year ended March 31, 2009, the Company had asales contract with one customer. The sales contract withthis customer will result in approximately $418 million inrevenue over the term of the contract, scheduled to endMay 2010.

Major Supplies

For the year ended March 31, 2009, the Company received99.2% of raw materials, i.e., steel coils, from one suppliertotaling $257,888,273 in order to accommodate theCompany’s sole customer. The supplier is not a sole sourceprovider of the raw materials.

NOTE 17 - RELATED PARTY TRANSACTIONS

Construction in Progress

PSL Limited (Parent)

During the year, the Company completed an initial purchaseorder in the amount of $28,905,000 for plant equipmentfor its pipe manufacturing facility and subsequent letters ofintent to purchase electrical equipment from the parentcompany of PSL Limited.

As of March 31, 2009, the Company has incurred costsrelated to these commitments in the amount of $38,215,288of which $24,188,978 was incurred in the current year andis recorded as follows:

(in USD)

Capitalized equipment 27,854,709Construction in progress(machinery and equipment) 10,360,579

Total 38,215,288

Of this amount, $2,623,055 is recorded in accounts payableat March 31, 2009. Management considers the costs incurredto be representative of fair value and consummated in termsequivalent to those that prevail in an arm’s length transaction.

Affiliates

The Company has consulted with an affiliate of one of themembers of PSL - North America, LLC for constructionproject management services. As of March 31, 2009, theCompany has incurred $639,547 in costs related to theseservices that have been recorded in construction inprogress. Of this amount, $25,790 is recorded in accountspayable at March 31, 2009. Management considers thecosts incurred to be representative of fair value andconsummated in terms equivalent to those that prevail inan arm’s length transaction.


Notes



Advances

Due to Parent (PSL Limited)

The Company received advances from its parent, PSLLimited, during the year. The total of the advances from theparent total $26,034 and are recorded as due to parent.These advances are without specified terms or conditionsfor repayment. During the year ended March 31, 2009, nointerest was paid nor accrued by the Company on suchadvances.

NOTE 18 - CORRECTION OF AN ERROR

Subsequent to the issuance of the March 31, 2008 auditedconsolidated financial statements, a revision to theCompany’s agreement as it relates to HSAW and furtherresearch of start up costs resulted in the need to capitalizeitems originalIy expensed as start up costs. The effect of thisrestatement on the accumulated deficit and non-controllinginterest at April 1, 2008 was an increase of $1,886,264 and$871,800, respectively. This increase in accumulated deficitis net of the income tax effect of $1,172,164.

The following financial statement line items as of and forthe year ended March 31, 2008 were affected by thiscorrection:

(in USD)

As Previously Effect ofStated As Restated Correction

Balance Sheet at March 31, 2008:Construction in progress 25,312,577 29,275,303 3,962,726Deferred tax asset 1,445,602 257,189 (1,188,413)Income tax payable NIL (16,249) (16,249)Accumulated deficit (2,279,036) (392,772) (1,886,264)Non-controlling interest 4,449,404 5,321,204 (871,800)

Statement of Income for theyear ended March 31, 2008:Start-up and organizational cost 4,869,479 945,464 (3,924,015)Interest expense 516,910 478,199 (38,711)Deferred income tax benefit 1,445,602 257,189 1,188,413Income tax expense NIL 16,249 16,249Net loss (3,217,501) (459,437) 2,758,064

NOTE 19 - SUBSEQUENT EVENT

Subsequent to year end, additional advances were obtainedon the Company’s revolving line of credit, as explained inNote 10, amounting to $4.5 million.

SUPPLIMENTRY INFORMATION

(in USD)

PSL PSL-NorthOPERATING EXPENSES USA, Inc. America, LLC Eliminations Total

Advertising and promotion NIL 4,576 NIL 4,576Amortization NIL 219,391 NIL 219,391Depreciation NIL 41,347 NIL 41,347Dues and subscriptions NIL 10,759 NIL 10,759Entertainment, meals and travel NIL 239,954 NIL 239,954Franchise and other taxes 57,324 NIL NIL 57,324Insurance NIL 43,669 NIL 43,669Office supplies and expense NIL 181,127 NIL 181,127Payroll taxes NIL 56,415 NIL 56,415Professional fees 12,656 56,880 NIL 69,536Recruitment expense NIL 31,833 NIL 31,833Rent expense NIL 55,467 NIL 55,467Repairs and maintenance NIL 15,695 NIL 15,695Salaries and benefits NIL 596,131 NIL 596,131Taxes and licenses NIL 36,257 NIL 36,257Utilities NIL 97,993 NIL 97,993

Total operating expenses 69,980 1,687,494 NIL 1,757,474


Notes


PSL LimitedRegd. Office: Kachigam, Daman, Union Territory of Daman & Diu - 396 210

Attendance Slip

Regd. Folio No./Client ID :

Name & Address :of First/Sole Shareholder

No. of Shares held :

I hereby record my presence at the 21st Annual General Meeting of the Company on Tuesday, 21st day of July,

2009 at 9.30 a.m. at Hotel ‘Miramar’, Devka Beach,Nani Daman - 392210, in Union Territory of Daman & Diu.

Signature of Member/Proxy

Note: Member/Proxy wish to attend the meeting must bring this Attendance Slip and handover the slip atthe entrance of the meeting duly signed.

Please tear here

PSL LimitedRegd. Office: Kachigam, Daman, Union Territory of Daman & Diu - 396 210

Proxy Form

Regd. Folio No./Client ID :

No. of Shares held :

I/We _________________________________________________________________________________

of _________________________________ in the district of ____________________________being a

Member/ Members of the above named Company, hereby appoint ________________________________

of ________________________________ in the district of _______________________________

____________________________________ or failing him ______________________________ of

____________________________________ in the district of ____________________________ as my/our

Proxy to attend and vote for me/us and/or on my/our behalf at the 21st Annual General Meeting of the Company

to be held on Tuesday, the 21st day of July, 2009 at 9.30 a.m. and at any adjournment thereof.

Signed this _____________ day of _________________ 2009

Note: a) Proxy need not be a member.b) The Proxy form duly signed by the Member(s) should reach the Company’s Registered Office at

Kachigam, Daman, Union Territory of Daman & Diu - 396 210, atleast forty eight hours before thetime fixed for the meeting.

c) This form should be signed across the revenue stamp and the said signature must tally with thespecimen signature registered with the company failing which this instrument shall be treated as“invalid”.

AffixRe 1/-

RevenueStamp

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