PSL-1-5 · Profit Before Tax Rs. 86.20 Crs. (US $ 19.97 Million) Profit After Tax Rs. 62.16 Crs....

Board of Directors 2

PSL’s Existence 3

The Growth Paradigm 4

Key Financial Parameters 5

Notice 6

Directors’ Report 17

Corporate Governance Report 22

Management Discussion and Analysis Report 27

Auditors’ Report 31

Balance Sheet 34

Profit & Loss Account 35

Schedules 36

Cash Flow Statement 48

Balance Sheet Abstract 49

Statement(s) of Subsidiary Company(s)

u/s 212 of the Companies Act,1956 50

Consolidated Statements

Auditors’ Report 53

Balance Sheet 54

Profit & Loss Account 55

Schedules 56

Cash Flow Statement 70

Subsidiary Company(s) Statements

PSL Corrosion Control Services Limited’s

-Directors’ Report 72

-Auditors’ Report 74

-Balance Sheet 76

-Profit & Loss Account 77

-Schedules 78

-Balance Sheet Abstract 86

Pipeline Systems Limited’s

-Auditors’ Report 87

-Consolidated Balance Sheet 88

-Consolidated Profit & Loss Account 89

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PSL-1-5.p65 8/30/2007, 2:57 PM1

BOARD OF DIRECTORS* Shri Y. P. Punj ---------------------------------- ChairmanShri Ashok Punj ------------------ Managing DirectorShri Alok PunjShri M. M. MathurShri G. S. SauhtaShri R. K. BahriShri D. N. SehgalShri Prakash V. ApteShri N. C. SharmaShri Ashok SharmaShri Harry H. ShourieShri S. P. BhatiaShri C. K. GoelShri Paresh J. ShahShri G. Gehani ---- Director & Company Secretary

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

SHARE TRANSFER AGENTS Karvy Computershare Private Limited(Both for physical as well 17 - 24, Vittal Rao Nagar, Madhapur,as electronic shares) Hyderabad - 500 081

SUBSIDIARY COMPANY(S) — PSL Corrosion Control Services Limited B-96, Greater Kailash –I New Delhi – 110048— Pipeline Systems Limited

C/o IFS, IFS Court, 28 Cybercity,Ebene, Mauritius

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

— PSL FZE (Subsidiary of Pipeline Systems Limited)

P.O. Box - 42131, Inner Harbour Plot No. HJ 02,Hamriyah Free Trade Zone, Sharjah, U.A.E.

PRINCIPAL BANKERS — ICICI Bank Limited— State Bank of India— Standard Chartered Bank— Export Import Bank of India— IDBI Bank Limited— UTI Bank Limited— BNP Paribas— State Bank of Patiala— State Bank of Hyderabad— Indian Overseas Bank— Union Bank of India— Hongkong & Shanghai Banking Corp. Ltd.— Yes Bank Limited— DBS Bank Limited— Deutsche Bank

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*As on 31st July, 2007

PSL-1-5.p65 8/29/2007, 4:21 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

PIPE MILLS & PIPE COATING PLANTS — Survey No. 35 & 37, Varsana,Anjar, Kutch, Gujarat

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

— Village Nani Chirai,Taluka Bhachau, 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

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

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

OTHER PLANTS

REBAR COATING DIVISIONS — No. 22 Vaiyavoor, Maduranthakam TalukKancheepuram Distt., Tamil Nadu.

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

ANODES & PIPE BENDS DIVISION — Plot No.4 & 5, Sector 12/B, Kandla Road,

Gandhidham, Kutch, Gujarat

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PSL-1-5.p65 8/29/2007, 4:21 PM3

The GrThe GrThe GrThe GrThe Growth Paradigmowth Paradigmowth Paradigmowth Paradigmowth Paradigm

Highlights2006 - 07

TurnoverRs. 1583.21 Crs.

(US $ 366.82 Million)

Operating ProfitRs. 173.62 Crs.


Gross ProfitRs. 130.12 Crs.


Profit Before TaxRs. 86.20 Crs.


Profit After TaxRs. 62.16 Crs.


Total AssetsRs. 1006.66 Crs.


Operating Profit -10 Years’ Profile

* The data for these financial years have been annualised sincethe said financial years comprised of 18 months periods

Gradual Growth of Highest Market Priceof PSL’s Share in National Stock Exchange

(Listed in NSE w.e.f. 29th May, 2003)

Gradual Growth of Highest Market Priceof PSL’s Share in Bombay Stock Exchange

(During Last Five Years)

During the Year(s)

During the Year(s)

During the Year(s)

PS

L’s S

hare

Pric

e (in

Rs.

)P

SL’s

Sha

re P

rice

(in R

s.)

Rs.

in L

acs

PSL-1-5.p65 8/30/2007, 2:57 PM4

KKKKKeeeeey Fy Fy Fy Fy Financial Pinancial Pinancial Pinancial Pinancial Parametersarametersarametersarametersarameters

Last Decade at a Glance

(Rs. in Lacs)

PARTICULARS 2006-07 2005-06 2004-05 2003-04 2002-03 2000-01** 1999-2000 1998-99* 1997-98 1996-97**

Total Income 168561.37 156338.22 167745.16 92942.05 42516.39 45371.54 26054.06 16103.82 8659.12 4850.10

Total Expenditure 151199.79 141409.34 157765.84 84505.77 36261.96 39665.00 21341.12 12174.88 6296.79 3381.87

Operating Profit 17361.58 14928.90 9979.32 8436.28 6254.43 5706.54 4712.94 3928.94 2362.33 1468.56

Interest 4349.77 4852.93 3242.80 2947.22 2931.39 2104.60 1608.77 1080.60 251.62 277.45

Gross Profit 13011.81 10075.97 6736.52 5489.06 3323.04 3601.93 3104.17 2848.34 2110.71 1191.10

Depreciation 4392.29 3385.96 2335.48 1638.86 1601.42 1125.67 1102.62 1246.88 720.44 582.66

Profit Before Tax 8619.52 6690.01 4401.04 3850.19 1721.62 2476.26 2001.54 1601.46 1390.27 608.43

Taxation 2404.00 1771.00 1200.00 1050.00 250.00 411.33 265.00 127.53 360.86 30.00

Profit After Tax 6215.52 4919.01 3201.04 2800.19 1471.62 2064.92 1736.54 1473.93 1029.41 578.43

Dividend Rate 50%# 50% 45% 50% 40% 40% 35% 35% 35% 23.33%

Equity 3406.07 3195.45 2892.07 2892.02 2892.02 2892.02 2892.02 2892.02 948.71 948.71

Reserves 30213.64 23051.50 13866.66 13861.20 13303.66 13144.16 12108.96 11528.25 6952.36 6286.74

* Post Merger with PSL International Limited

** The data for these financial years have been annualisedsince the said financial years comprised of 18 months periods

# Subject to Shareholders’ Approval

PSL-1-5.p65 8/29/2007, 4:21 PM5

619th Annual Report 2006-07

ToThe Members ofPSL LIMITED

Notice is hereby given that Nineteenth Annual General Meeting of the Company will be held on Thursday, the 27th September,2007 at 9.30 A.M. at Hotel ‘Cidade De Daman’ at Devka Beach, Nani Daman, in Union Territory of Daman & Diu, totransact the following businesses:-

ORDINARY BUSINESS (S)

1. To receive, consider and adopt the Audited Balance Sheet of the Company as on 31st March 2007 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 2006-07.

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

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

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

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

7. 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 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 Year2007-08 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 is hereby authorised to finalize theremuneration payable together with reimbursement of actual out of pocket expenses, if any, to the so appointed Auditors.”

SPECIAL BUSINESS (S)

8. APPROVAL FOR CONTINUATION OF SHRI M. M. MATHUR AS “WHOLETIME DIRECTOR”

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

“RESOLVED THAT pursuant to Clause (c) (ii) of Part I of Schedule XIII of the Companies Act, 1956 and other relevantStatutory Provisions, approval be and is hereby accorded and is deemed to have been so accorded to Shri. M. M. Mathurcontinuing to act as Whole-time Director of the Company inspite of his having attained the age of 70 years on 11th

September, 2006, in accordance with the Resolution passed by the shareholders of the Company in their 16th AnnualGeneral Meeting held on 23rd September, 2004 at the remuneration already drawn after 11th September, 2006 andpresently being drawn by him and other benefits and perquisites enjoyed/ being enjoyed by him pursuant to a Resolutionto this effect passed by the shareholders of the Company in their 18th Annual General Meeting held on 31st August,2006.”

“RESOLVED FURTHER THAT the said specific approval be and is hereby accorded and is deemed to have been soaccorded with effect from 11th September, 2006 that is the day on which he attained the age of 70 years.”

“RESOLVED FURTHER THAT he shall continue to draw the aforesaid remuneration and avail the aforesaid perquisitesor any revised or refixed remuneration and/or perquisites, benefits and amenities which may henceforth be approved bythe Board of Directors till his unexpired term of appointment i.e. till 31st October, 2009 or any extension thereof whichmay hereafter be approved by the Board/ Shareholders.

9. RE-APPOINTMENT OF SHRI D. N. SEHGAL AS “WHOLETIME DIRECTOR” OF THE COMPANY

To consider and if thought fit to pass with or without modification the following Resolution as “Ordinary 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 reenactment 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 reappointment of Shri. D. N. Sehgal as Whole-time Director of the Company for a period of five yearswith effect from 17th January, 2007 on a remuneration and benefits and amenities presently paid/ payable / enjoyed to

Notice

PSL Notice 6.p65 8/29/2007, 4:22 PM6


by/ Shri. D. N. Sehgal, the Wholetime Director of the Company comprising of a Basic Salary of Rs.4,00,000/- per monthand other benefits and perquisites in accordance with the approval of the Shareholders of the Company accorded bythem in their 18th Annual General Meeting held on Thursday the 31st August, 2006.”

“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.”

10. APPOINTMENT OF SHRI S. P. BHATIA AS “DIRECTOR” OF THE COMPANY


“RESOLVED THAT Shri. S. P. Bhatia, who has been, pursuant to Section 260 of the Companies Act, 1956, appointed bythe Board as “Additional Director” holding such office only up to this Annual General Meeting and in respect of whomthe members have under Section 257 of the Companies Act, 1956 sent notices to the Company proposing his candidaturefor the office of a Director, be and is hereby appointed as a Director, liable to retire by rotation, pursuant to applicableprovisions of the Companies Act, viz; Sections 253, 255, 258, 263 etc. and pursuant to Article 87 of Company’s Articlesof Association of the Company.”

11. APPOINTMENT OF SHRI C. K. GOEL AS “DIRECTOR” OF THE COMPANY


“RESOLVED THAT Shri. C. K. Goel, who has been, pursuant to Section 260 of the Companies Act, 1956, appointed bythe Board as “Additional Director” holding such office only up to this Annual General Meeting and in respect of whomthe members have under Section 257 of the Companies Act, 1956 sent notices to the Company proposing his candidaturefor the office of a Director, be and is hereby appointed as a Director, liable to retire by rotation, pursuant to applicableprovisions of the Companies Act, viz; Sections 253, 255, 258, 263 etc. and pursuant to Article 87 of Company’s Articlesof Association of the Company.”

12. APPOINTMENT OF SHRI G. GEHANI AS “DIRECTOR” OF THE COMPANY


“RESOLVED THAT Shri. G. Gehani, who has been, pursuant to Section 260 of the Companies Act, 1956, appointed bythe Board as “Additional Director” holding such office only up to this Annual General Meeting and in respect of whomthe members have under Section 257 of the Companies Act, 1956 sent notices to the Company proposing his candidaturefor the office of a Director, be and is hereby appointed as a Director, liable to retire by rotation, pursuant to applicableprovisions of the Companies Act, viz; Sections 253, 255, 258, 263 etc. and pursuant to Article 87 of Company’s Articlesof Association of the Company.”

13. APPOINTMENT OF SHRI PARESH J. SHAH AS “DIRECTOR” OF THE COMPANY


“RESOLVED THAT Shri. Paresh J. Shah, who has been, pursuant to Section 260 of the Companies Act, 1956, appointedby the Board as “Additional Director” holding such office only up to this Annual General Meeting and in respect ofwhom the members have under Section 257 of the Companies Act, 1956 sent notices to the Company proposing hiscandidature for the office of a Director, be and is hereby appointed as a Director, liable to retire by rotation, pursuant toapplicable provisions of the Companies Act, viz; Sections 253, 255, 258, 263 etc. and pursuant to Article 87 of Company’sArticles of Association of the Company.”

14. ENHANCEMENT OF BORROWING POWERS


“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 andwork-in-progress and all or any of the undertaking of the Company notwithstanding that the moneys to be borrowedtogether with moneys 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 and

Notice

PSL Notice 6.p65 8/29/2007, 4:22 PM7


its free reserves, that is to say, reserves not set apart for any specific purpose, so that the total amount up to which themoneys may be borrowed by the Board of Directors and outstanding at any time shall not exceed a sum of Rs. 1500Crores (Rupees One Thousand Five Hundred Crores only) and the Board of Directors (including any Committee/sthereof) 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.”

15. INTER-CORPORATE INVESTMENTS

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

“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 exceeding Rs.500Crores by way of subscription and/or purchase of Equity Shares of other body corporates, not withstanding that suchinvestment or other investments or such investment together with the Company’s existing investment in all other bodiescorporate shall be in excess of the limits prescribed under Section 372A of the Act and the Board of Directors of theCompany be and is hereby authorised to determine the actual sum to be so invested and all matters arising out of orincidental to the proposed investment and to do all such acts and things as may be necessary to implement this Resolution.”

16. APPOINTMENT OF SHRI S. P. BHATIA AS “WHOLETIME DIRECTOR” OF THE COMPANY


“RESOLVED THAT in accordance with the provisions of Section 198, 269, 309, 310, 311 and other applicable provisionsof Companies Act, 1956 (including any statutory modifications or reenactment thereof for the time being in force) readwith Schedule XIII of the Companies Act, 1956 and in accordance with relevant Articles of Company’s Articles ofAssociation, the consent of the Company be and is hereby accorded and is deemed to have been so accorded to theappointment of Shri. S. P. Bhatia as the “Wholetime Director” for a period of five years with effect from 26th October,2006 i.e. the date on which he was appointed as Additional Director, on the terms and conditions as to remuneration,perquisites and benefits etc. as specified and set out in the Explanatory Statement annexed hereto with the authority tothe Board to alter or vary the same from time to time with effect from such date or dates as may be decided by it andagreed by Shri. S. P. Bhatia.”

17. APPOINTMENT OF SHRI C. K. GOEL AS “WHOLETIME DIRECTOR” OF THE COMPANY


“RESOLVED THAT in accordance with the provisions of Section 198, 269, 309, 310, 311 and other applicable provisionsof Companies Act, 1956 (including any statutory modifications or reenactment thereof for the time being in force) readwith Schedule XIII of the Companies Act, 1956 and in accordance with relevant Articles of Company’s Articles ofAssociation, the consent of the Company be and is hereby accorded and is deemed to have been so accorded to theappointment of Shri. C. K. Goel as the “Wholetime Director” for a period of five years with effect from 26th October,2006 i.e. the date on which he was appointed as Additional Director, on the terms and conditions as to remuneration,perquisites and benefits etc. as specified and set out in the Explanatory Statement annexed hereto with the authority tothe Board to alter or vary the same from time to time with effect from such date or dates as may be decided by it andagreed by Shri. C. K. Goel.”

18. APPOINTMENT OF SHRI G. GEHANI AS “WHOLETIME DIRECTOR” OF THE COMPANY


“RESOLVED THAT in accordance with the provisions of Section 198, 269, 309, 310, 311 and other applicable provisionsof Companies Act, 1956 (including any statutory modifications or reenactment thereof for the time being in force) readwith Schedule XIII of the Companies Act, 1956 and in accordance with relevant Articles of Company’s Articles ofAssociation, the consent of the Company be and is hereby accorded and is deemed to have been so accorded to theappointment of Shri. G. Gehani as the “Wholetime Director” for a period of five years with effect from 31st July, 2007 i.e.the date on which he was appointed as Additional Director, on the terms and conditions as to remuneration, perquisitesand benefits etc. as specified and set out in the Explanatory Statement annexed hereto with the authority to the Board toalter or vary the same from time to time with effect from such date or dates as may be decided by it and agreed by Shri.G. Gehani.”

19. APPOINTMENT TO PLACE OF PROFIT

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

“RESOLVED THAT pursuant to Section 314 (1B) of the Companies Act, 1956, the Company hereby accords its consent,subject to the approval of the Central Government to Mr. Arjun Punj, Son of the Managing Director of the Company forholding and continuing to hold office or place of profit in the Company, at a monthly remuneration as mentioned in theExplanatory Statement together with the usual allowances and benefits, amenities and facilities including accommodation,

Notice

PSL Notice 6.p65 8/29/2007, 4:22 PM8


medical facilities, leave travel assistance, personal accident insurance, superannuation fund, retiring gratuity and providentfund benefits applicable to other employees occupying similar post or posts within the same salary scale or grade, withauthority to the Board of Directors to sanction at their discretion increment within the grade as they may deem fit andproper and to sanction at their discretion and in due course, promotion to the next higher grade or grades together withthe usual allowances and benefits as applicable to such grade or grades and to give increments within that grade orgrades as they may deem fit and proper.”

“RESOLVED FURTHER THAT remuneration payable to the incumbent as aforesaid will be subject to such modification(s)as the Central Government may suggest or require which the Directors are hereby authorised to accept on behalf of theCompany and which may be acceptable to the incumbents and are not less favourable to the Company.”

20. APPOINTMENT TO PLACE OF PROFIT

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

“RESOLVED THAT pursuant to Section 314 (1B) of the Companies Act, 1956, the Company hereby accords its consent,subject to the approval of the Central Government to Mr. Raghav Punj, Son of Shri. Alok Punj, Director of the Companyfor holding and continuing to hold office or place of profit in the Company, at a monthly remuneration as mentioned inthe Explanatory Statement together with the usual allowances and benefits, amenities and facilities includingaccommodation, medical facilities, leave travel assistance, personal accident insurance, superannuation fund, retiringgratuity and provident fund benefits applicable to other employees occupying similar post or posts within the samesalary scale or grade, with authority to the Board of Directors to sanction at their discretion increment within the gradeas they may deem fit and proper and to sanction at their discretion and in due course, promotion to the next higher gradeor grades together with the usual allowances and benefits as applicable to such grade or grades and to give incrementswithin that grade or grades as they may deem fit and proper.”

“RESOLVED FURTHER THAT remuneration payable to the incumbent as aforesaid will be subject to such modification(s)as the Central Government may suggest or require which the Directors are hereby authorised to accept on behalf of theCompany and which may be acceptable to the incumbents and are not less favourable to the Company.”

By Order of the Board of Directors of

Regd. Office :- PSL LIMITED

Kachigam, Daman

Union Territory of Sd/-

Daman & Diu - 396 210 (G. GEHANI)

Director &

Dated : 31st July, 2007 Company Secretary

Notice

NOTES:

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

2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF

HIMSELF AND THE PROXY NEED NOT BE A MEMBER. PROXY FORM DULY FILLED IN MUST REACH THE REGISTERED 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 Monday, the 24th day of September, 2007 to Thursday, the 27th

day of September 2007 (both days inclusive).

4. The Final Dividend of Rs.2.50 per share recommended by the Board of Directors of the Company is in addition to the Interim Dividend of Rs.2.50 on eachfully paid-up share declared and paid by the Board in February 2007. If the said Final Dividend is declared at the meeting, the same will be payable to themembers/Beneficial owners whose names appear in the Company’s Register of Members/Records of Depositories on Thursday, the 27th day of September2007.

5. Members who have not still paid allotment money ( as applicable ) are requested to pay the outstanding amount including the interest calculated onoutstanding allotment money at the rate of 18% per annum from the last date of payment till 31st March 2001 and thereafter 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 PUBLIC ISSUE-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 send their queries inwriting to the Company at its Registered Office, so as to reach at least Seven days before the date of the Meeting, to enable the company to furnish therequired 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 signatures at the spaceprovided therefore and hand over the attendance slip at the place of meeting. The Proxy of a Member should mark on the attendance 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 dematerialised form are required to bring details of their depository account number for identification.

PSL Notice 6.p65 8/29/2007, 4:22 PM9


EXPLANATORY STATEMENT( Pursuant to Section 173(2) of the Companies Act, 1956 )

ITEM NO.8 : APPROVAL FOR CONTINUATION OF SHRI M. M. MATHUR AS WHOLETIME DIRECTOR

Shri. M. M. Mathur is a very Senior Whole-time Director of the Company and is currently heading Company’s Marketing Office in Delhi.Considering the immense contribution of Shri. Mathur to the growth of the Company over few decades now, the shareholders of theCompany have been renewing his appointment from time to time each time generally for a period of five years. His present appointment,which was made in 16th Annual General Meeting held on 23rd September, 2004 was also for a period of five years commencing from 1st

November, 2004 and ending on 31st October, 2009. The remuneration being drawn by him since 1st October, 2006 comprising of a BasicSalary of Rs.4,00,000 per month and certain perquisites, benefits and amenities was approved by the shareholders in their 18th AnnualGeneral Meeting held on 31st August, 2006.

As Shri. Mathur was born on 11th September, 1936, he attained the age of 70 years on 11th September, 2006. Since Shri. Mathur still enjoysgood health and is effectively contributing to the growth of the Company your Board has requested Shri. Mathur to continue rendering hisservices to the Company inspite of his having attained the age of 70 years. However, in terms of Clause (c) of Part I of Schedule XIII of theCompanies Act, 1956 the shareholders of the Company have to accord their approval by way of passing of a Special Resolution in theirgeneral meeting for such continuation.

Hence the Resolution at Item No.8.

Other than Mr. M. M. Mathur himself no other Director is concerned or interested in the subject Resolution.

ITEM NO.9 : RE-APPOINTMENT OF SHRI D. N. SEHGAL AS WHOLETIME DIRECTOR OF THE COMPANY

Shri. D. N. Sehgal, who was earlier working with effect from 17.01.1997 as Wholetime Director of PSL International Limited (since mergedwith our Company) was, consequent upon the said merger, appointed as a Wholetime Director by the Shareholders of the Company in their12th Annual General Meeting held on 24th February, 2000 for a period commencing from 1st January, 2000 to 16th January, 2002. Subsequently,the shareholders of the Company in their 14th Annual General Meeting held on 8th August, 2002 reappointed Shri. Sehgal for a further periodof five years commencing from 16th January, 2002 and ending on 17th January, 2007.

Shri. Sehgal, who has been generally heading the Marketing Department of Mumbai has very effectively contributed to the growth of theCompany. As the Company has continuously benefited by availing his services, Shri. Sehgal was requested to continue acting as WholetimeDirector of the Company even after 17th January, 2007 until he is reappointed by Company’s shareholders subject to confirmation of the saidappointment by the shareholders in their General Meeting.

As far as remuneration of Shri. D. N. Sehgal is concerned, the same was enhanced with effect from 1st October, 2006 by the shareholders intheir last Annual General Meeting held on 31st August, 2006. Although the said remuneration comprises of a Basic Salary of Rs.4,00,000/-per month along with certain other perquisites, benefits and amenities also approved by the shareholders, the Board of Directors has beenauthorised to revise or refix the said remuneration and/or other perquisites, benefits and amenities subject to the limits prescribed underSchedule XIII or other provisions of the Companies Act, 1956.

Hence Shri. Sehgal has been paid the aforesaid remuneration comprising of Basic Salary of Rs.4,00,000/- per month etc. with effect from 1st

October, 2006 and even after 16th January, 2007 and the same will continue to be paid to him subject to shareholders’ approval.


Shri. Sehgal may be treated as concerned or interested in the subject Resolution

ITEM NO. 10 : APPOINTMENT OF SHRI S. P. BHATIA AS DIRECTOR OF THE COMPANY

Shri. S. P. Bhatia, working with the Company since 1993, is a B.Sc. Engg. (Mechanical) from Regional Engineering College, Kurukshetra. Forlast few years discharging his duties as Head of the Project Department, he has been responsible for setting up of Company’s various Projectsand Facilities. Taking into account his valuable contribution, the Board of Directors of the Company had on 26th October, 2006 appointedhim as “Additional Director” pursuant to Section 260 of the Companies Act, 1956. He holds such office only till the Annual General Meetingon 27th September, 2007.

The Company has received, along with requisite fee, notices from few shareholders under Section 257 of the Companies Act, 1956 proposinghis candidature as “Director” on Company’s Board.

Hence the Resolution at Item No.10. In order to enable the shareholders to know more about Shri Bhatia, his brief particulars are includedin the table annexed to this notice. The Board of Directors recommend this Resolution for your approval.

Other than Shri. S. P. Bhatia, no other Director is concerned or interested in the said Resolution.

ITEM NO.11 : APPOINTMENT OF SHRI C. K. GOEL AS DIRECTOR OF THE COMPANY

Shri. C. K. Goel, who joined the Company way back in 1978, has a Post Diploma in Mechanical Engineering apart from a Diploma inBusiness Management Refrigeration and Air conditioning. Considering his effective contribution to the Company, particularly as In-Chargeof an important Production Facility at Varsana in Gujarat, Shri. Goel was, on 26th October, 2006, appointed by the Board as “AdditionalDirector” under Section 260 of the Companies Act, 1956 to hold the said office till the forthcoming Annual General Meeting.


Hence the Resolution at Item No.11. In order to enable the shareholders to know more about Shri Goel, his brief particulars are included inthe table annexed to this notice. The Board of Directors recommend this Resolution for your approval.

Other than Shri.C. K. Goel, no other Director is concerned or interested in the said Resolution.

Explanatory Statement

PSL Notice 6.p65 8/29/2007, 4:22 PM10



ITEM NO.12 : APPOINTMENT OF SHRI G. GEHANI AS DIRECTOR OF THE COMAPNY

Shri. G. Gehani is a very Senior Company Secretary being a Fellow Member of the Institute of Company Secretaries of India. Shri. Gehani hasacquired multi-disciplinary academic qualifications. Apart from degrees of M.Com & LLB conferred on him by University of Delhi, he has tohis credit Diplomas in Personnel Management & Industrial Relations as well as in Corporate Laws & Secretarial Practices. Shri. Gehani, whohas acquired a total experience of 30 years, joined the Company about 16 years back and is currently heading the Legal & SecretarialDepartment of the Company. Considering his contribution to the Company’s growth, the Board of Directors of the Company had on 31st July,2007 appointed him as Additional Director pursuant to Section 260 of the Companies Act, 1956. He holds that office only till the forthcomingAnnual General Meeting.


Hence the Resolution at Item No.12. In order to enable the shareholders to know more about Shri Gehani, his brief particulars are includedin the table annexed to this notice. The Board of Directors recommend this Resolution for your approval.

Other than Shri.G. Gehani himself, no other Director is concerned or interested in the said Resolution.

ITEM NO.13 : APPOINTMENT OF SHRI PARESH J. SHAH AS DIRECTOR

The Board of Directors of the Company in exercise of a power granted to them by Section 260 of the Companies Act, 1956, appointed Shri.Paresh J. Shah as Additional Director of the Company in its meeting held on 9th March, 2007. The said appointment was made keeping inview his vast expertise as an eminent Lawyer, who is also a Partner of a very respected Legal Firm namely Sah & Sanghvi. His appointmentwill benefit the Company on continuous basis by his valuable legal advice.

Shri Shah’s aforesaid appointment became effective from 9th March, 2007 and keeping in view the provision of Section 260 he holds theoffice of the Additional Director up to the date of ensuing Annual General Meeting.

The Company has now received few notices from some members in accordance with provisions of Section 257 of the Companies Act, 1956proposing the candidature of Shri Paresh J. Shah as Director. They have also deposited with the Company the prescribed amount required forthe purpose.

Hence the Resolution at Item No.13. In order to enable the shareholders to know more about Shri Shah, his brief particulars are included inthe table annexed to this notice. The Board of Directors recommend this Resolution for your approval.

Other than Shri. Shah who may be deemed to be interested in the subject Resolution, no other Director has any interest in the said Resolution.

ITEM NO.14 : ENHANCEMENT OF BORROWING POWERS

Section 293 (1) (d) provides for a power to Board of Directors of the Company to borrow money up to an amount, which is equivalent to theaggregate of paid-up capital of the Company and its free reserves. In a situation whether the borrowings are likely to exceed the said limit, aprior consent is required from the Company in General Meeting. In our Company’s case, the shareholders in their 17th Annual GeneralMeeting held on 29th September, 2005 had authorised the Board to borrow up to an amount of Rs. 1000 crores.

The Company’s business during the year under review has substantially enhanced and such enhancement is likely to be witnessed during theCurrent Financial Year also. Keeping in view not only the orders in hand but even those which are likely to be bagged in near future, therewould be a sizable need for enhanced long term funds. These funds would be required not only for establishment of new plants to cater tothe increased demand for Company’s products but even for expansion of existing facilities. In addition, sizable funds would also be requiredfor setting up of production facilities outside the country. Such heavy requirements would entail raising of long term funds including foreigncurrency funds.

The Resolution at Item No.14 seeking member’s approval for enhanced borrowing limits to Rs.1500 Crores is a step in this direction.

None of the Directors is interested in this Resolution.

ITEM NO.15 : INTER-CORPORATE INVESTMENTS

In order to achieve global expansion of our business in the recent past the following three companies have been established outside India :-

1) Pipeline Systems Limited in Mauritius2) PSL FZE in UAE3) PSL USA Inc in USA

Pipeline Systems Limited and PSL USA Inc are our Wholly Owned Subsidiaries while PSL FZE is Wholly Owned by Pipeline Systems Limited,our Subsidiary. The Company propose to make investment in these projects by subscribing to the Share Capital of these Subsidiaries. Apartfrom these Subsidiaries, Company may invest in any other venture or body corporate, which is financially lucrative and is in the interest ofthe Company.

In the Thirteenth Annual General Meeting of the Company held on 29th March, 2001, the shareholders had passed a Special Resolution toauthorise Board of Directors to make inter-corporate loans and investments upto an amount, which is 50% more than the limits prescribedunder Section 372A of the Companies Act. Keeping in view the manifold increase in business and abovementioned investment opportunitiesto attain the expansion programme of the Company, it is now proposed to authorise Board of Directors to make investment of the funds of theCompany up to Rs.500 Crores in other Bodies Corporate.

The Resolution proposed at Item No.15 is to empower the Board of Directors to make such investment in the interest of the Company.

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

PSL Notice 6.p65 8/29/2007, 4:22 PM11


ITEM NO.16 : APPOINTMENT OF SHRI S. P. BHATIA AS WHOLETIME DIRECTOR OF THE COMPANY

Shri. S. P. Bhatia, an Engineer by Profession, who has been heading the Company’s Project Department for last many years and now aMember of the Board has contributed immensely in setting up of the various Plants of the Company at different locations of the country. Hehas also been responsible for acquiring know-how on behalf of the Company from Byard Engg. Consultants – UK, UMRAN – Turkey and Dr.G. Valle – Itally, PWS – Germany & S.I.M. – Korea for Pipe Making and Induction Bending Technologies.

Subject to various approvals of the shareholders, Shri. Bhatia is now proposed to be appointed as “Wholetime Director” of the Company fora period of five years on following remuneration, perquisites and benefits:-

I. Proposed Basic Salary

Rs.1,65,000/- p.m.

II. Eligibility of Perquisites and Benefits for the above named Wholetime Director

(a) Residential Accommodation

Either of the following :-

(i) Rent free accommodation of Company for occupation by the individual concerned and his family.

(ii) Where such accommodation is leased/ licensed / tenanted by the Company, the rent/ lease charges / license fee for suchaccommodation shall not exceed :-

- 60% of Basic Salary in …………….. Metropolitan Cities.

- 50% of Basic Salary in …………….. Other Cities.

(iii) House Rent Allowance :

Where Company has not provided its accommodation for occupation or has not leased any accommodation, a House RentAllowance shall be payable as per limits specified in (ii) above.

(b) Medical Reimbursement

As per Rules of the Company.

(c) Leave Travel Concession


(d) Bonus

As decided by the Board/ Committee of Board/ Managing Director.

(e) Company’s contribution to Provident Fund, Superannuation Fund or Annuity Fund

As per the rules of the Company.

(f) Gratuity

As per the rules of the Company but not exceeding half a month’s salary for each completed year of service.

(g) Encashment of Leaves accumulated and not availed of

As per rules of the Company.

(h) Provision of Car (with driver) for use of Company’s business and telephones at residence will not be considered as perquisites.

III. Other Perquisites

Subject to overall ceiling on remuneration as prescribed under Schedule XIII or other provisions of Companies Act, 1956, as may beapplicable from time to time during his tenure, the Director may be given any other allowance, benefits and perquisites as the board ofDirectors from time to time may decide.

The total remuneration payable to Shri. S. P. Bhatia by way of salary, perquisites, allowance and amenities as approved by the Board shall notexceed the limits laid down under Section 198 and 309 and other relevant provisions of the Companies Act, 1956 or any statutory modificationor reenactment thereof.


Other than Shri. S. P. Bhatia, no other Director is concerned or interested in the said Resolution.

ITEM NO.17 : APPOINTMENT OF SHRI C. K. GOEL AS WHOLETIME DIRECTOR OF THE COMPANY

Shri. C. K. Goel has been working with the Company in responsible positions for over 29 years now. He has handled and headed variousProjects and Operations in Company’s different Plants. Presently he is In-charge of an important Production facility at Varsana in Gujarat,which includes the Two-Step Helical Spiral Pipe Mill.

Subject to various approvals of the shareholders, Shri. C. K. Goel is proposed to be appointed as “Wholetime Director” of the Company fora period of five years on following remuneration, perquisites and benefits:-


Rs.1,65,000/- p.m.






PSL Notice 6.p65 8/29/2007, 4:22 PM12











(d) Bonus




(f) Gratuity





III Other Perquisites


The total remuneration payable to Shri. C. K. Goel by way of salary, perquisites, allowance and amenities as approved by the Board shall notexceed the limits laid down under Section 198 and 309 and other relevant provisions of the Companies Act, 1956 or any statutory modificationor reenactment thereof.


Other than Shri. C. K. Goel, no other Director is concerned or interested in the said Resolution.

ITEM NO.18 : APPOINTMENT OF SHRI G. GEHANI AS WHOLETIME DIRECTOR OF THE COMPANY

Shri. G. Gehani is a very Senior Fellow Member of Institute of Company Secretaries of India having qualified the Company Secretaryshipalmost 30 years ago. After acquiring few other qualifications in different disciplines such as Commerce, Law, Personnel Management &Corporate Laws, he worked with some of the leading Public & Private Sector Companies in India including the house of TATAs.

After completion of his 16 years service at Senior positions in the Company the Board had appointed him as “Additional Director” sometimeback. Subject to approval of the shareholders in their General Meeting he is being appointed as “Wholetime Director” of the Company for aperiod of five years on a remuneration and other perquisites / benefits/ amenities as detailed below :-


Rs.1,65,000/- p.m.














(d) Bonus



PSL Notice 6.p65 8/29/2007, 4:22 PM13




(f) Gratuity





III. Other Perquisites


The total remuneration payable to Shri. G. Gehani by way of salary, perquisites, allowance and amenities as approved by the Board shall notexceed the limits laid down under Section 198 and 309 and other relevant provisions of the Companies Act, 1956 or any statutory modificationor reenactment thereof.


Other than Shri. G. Gehani, no other Director is concerned or interested in the said Resolution.

ITEM No.19 & 20 : APPOINTMENTS TO PLACE OF PROFIT

Pursuant to the provisions of Section 314 and other applicable provisions, if any of the Companies Act, 1956 the consent of the Companywas accorded sometime back by way of Special Resolutions passed in that behalf in earlier General Meetings for appointment of Mr. ArjunPunj, S/o. Shri. Ashok Punj, Managing Director & Mr. Raghav Punj, S/o Shri. Alok Punj, Director in the Company.

Since their appointment they have indeed contributed very effectively to the affairs of the Company. It is therefore proposed that they besuitably rewarded with enhancement in their remuneration.

Keeping in view the overall salary structure in the industry, the pay scales at various levels in the Company have since been revised. In viewof such revisions, the Basic Salaries of Mr. Arjun Punj and Mr. Raghav Punj are proposed to be fixed in the grade of Rs.40,000 – 6000 –70,000.

In addition to the Basic Salary, Mr. Arjun Punj & Mr. Raghav Punj will be entitled to the allowances, perquisites and benefits as per rules ofthe Company in vogue, the value whereof will not exceed twice the annual salary.

Since the above named Directors are interested in the holding of Office or place of profit carrying a total monthly remuneration in excess ofRs.50,000 by their aforesaid relatives, the prior consent of the members by a Special Resolution and approval of the Central Government isrequired in terms of Section 314(1B) of the Companies Act, 1956. After the consent of the members is so obtained, an application will bemade to the Central Government for its approval. The payment of aforesaid remuneration to the above named incumbents will commencefrom the day of the Central Government approval.

The Board of Directors commend the Resolution for your approval.

Hence the Resolutions at Item Nos.19 & 20.

Except Shri. Y. P. Punj, Shri. Ashok Punj and Shri. Alok Punj, no other Directors of the Company has concern or interested in the Resolution.

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

Director &Dated : 31st July, 2007 Company Secretary


PSL Notice 6.p65 8/29/2007, 4:22 PM14


Information pertaining to Directors retiring by rotation and seeking reappointment at this Annual General Meeting

Particulars Shri D.N. Sehgal Shri G.S. Sauhta

Additional Information

Date of Birth

Qualification

Expertise in specificfunctional area

Directorship held inother companies

Brief Resume

1st January, 1947

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

General Management & Marketing

- Sehdev Projects Pvt. Ltd.- PSL FZE

Mr. D.N. Sehgal is a qualified Production Engineerhaving completed his Post Graduation Programme inIndustrial Management & Engineering with distinction.Mr. Sehgal has spent three decades in core sector ofIndian Economy – eg. Marketing & Project Managementof large value complex industrial projects in Refinery,Petrochemical, Metallurgical & other onshore &offshore pipeline projects. Prior to joining PSL 15 yearsago he has held important portfolios in senior capacitiesin Dodsal Pvt. Ltd., BST Engineering Services Ltd.,Dynacraft Machine Co. Ltd. and Mukund Iron SteelWorks. He joined the Company’s Board on September,1994 and is directly responsible for execution of variousimportant projects of the Company.

30th March 1943

DME

General Management & Production

- PSL Corrosion Control Services Ltd.- BHI Limited

Mr. G.S. Sauhta, after completing his Diploma inMechanical Engineering from Aligarh MuslimUniversity worked in different Government positionsfor seven years before considering a shift to PrivateSector. He joined Punj Group of Companies way backin 1972. Being a technocrat he has handled variousprojects at different locations as Technical Head andDirector, Projects. Mr. Sauhta was inducted in theCompany’s Board in 1989 and was subsequentlyappointed as Whole Time Director in April 1993. Eversince his joining the Company he has been at the helmof setting up of Five Pipe Coating Plants, Five RebarCoating Plants and Nine Spiral Pipes ManufacturingPlants for the Company at strategic locations.

10th September, 1942

B.E. Mech.

General Management & Production

- PSL Corrosion Control Services Ltd.- Eurocoustic Products Ltd.- Sparkles Distributors Pvt. Ltd.- Acquity International Pvt. Ltd.

Mr. R. K. Bahri, primarily a qualified MechanicalEngineer, had joined the Company as a Director in 1989and later elevated to the position of Whole TimeDirector in April 1994. Prior to his induction, he hadspent over two decades with M/s Fedders LloydCorporation in various senior positions. Mr. Bahriintroduced Fusion Bonded Epoxy Coating forReinforced Steel Bars for the first time in India. He isalso serving the Indian Institute of Interior Designs sinceits inception in various capacities and is the Trustee ofNACE International India Section, Ex-Chairman of theSociety for Advancement of Electrochemical Science& Technology (SAEST), Bombay Chapter.

27th November, 1921

B.A.

General Management

- PSL Corrosion Control Services Ltd.- Eurocoustic Products Ltd.- Punj Investments Pvt. Ltd.- Broken Hills International Pvt. Ltd.- BHI Limited- Punj International Pvt. Ltd.

Mr. Y.P. Punj has been at the helm of affairs of manycompanies of almost 5 decades now. By virtue of hissuch position he has to his credit rich and variedexperience, the benefit of which is passed on to theCompany automatically, as he is guiding the Companyas Chairman ever since its inception.

Information pertaining to Directors retiring by rotation and seeking reappointment at this Annual General Meeting

Particulars Shri R.K. Bahri Shri Y.P. Punj

Date of Birth

Qualification

Expertise in specificfunctional area

Directorship held inother companies

Brief Resume

PSL Notice 6.p65 8/29/2007, 4:22 PM15


18th December, 1951

B. Sc. Engg. (Mechanical)

Management of various Projects

- Nil

Mr. S. P. Bhatia, born in 1951 is a B.Sc. Engg.(Mechanical) from Regional Engineering College,Kurukshetra is working with the Group since 1983 andhas served in different capacities in various divisionsof the Group such as Insulation, Pipe Coating, PipeMaking etc. Mr. Bhatia, as Head of the ProjectsDepartment, has been responsible for setting up ofvarious Projects and facilities at different locations ofthe Company in India. He has also been responsiblefor acquiring know-how on behalf of PSL from ByardEngg. Consultants – UK, UMRAN – Turkey and Dr. G.Valle – Itally, PWS – Germany & S.I.M. – Korea for PipeMaking and Induction Bending Technologies.

Information pertaining to Directors whose appointment will be placed at the meeting for approval of members

Particulars Shri S.P. Bhatia Shri C.K. Goel

Date of Birth

Qualification

Expertise inspecific functionalarea

Directorship heldin othercompanies

Brief Resume

16th November, 1957

Diploma in Mech. Engg., Business Management,Refrigeration & Airconditioning

General management & production

- Nil

Mr. C. K. Goel, born in 1957 has a Post Diploma inMechanical Engineering with specialization apart froma Diploma in Business Management Refrigeration &Air Conditioning. He had joined PSL way back in 1978and has now completed 28 years of working inresponsible positions. Before taking over as In-chargeof an important production facility at Varsana in Gujarat,which includes the latest Two-Step Helical Spiral PipeMill, Mr. Goel has handled and headed various Projectsand Operations in Company’s different Plants.

2nd May, 1958

B. Com, LLB, Solicitor

Legal Suits

NIl

Mr. Paresh Shah born in 1958 is an eminent Lawyer.He is Partner of a very reputed legal firm namely Sah &Sanghvi and has variety of experience on various aspectof corporate legal matters. He is practicing in HighCourt of Bombay for last 25 years.

27th January, 1953

FCS, M. Com, LLB, DPM & IR and DCL & SP

Legal & Secretarial

NIl

Mr. G. Gehani, born in 1953 is a Fellow Member ofInstitute of Company Secretary of India (ICSI) has to hiscredit few other Degrees and Diplomas in differentdisciplines such as M.Com, LLB, DPM & IR and DCL &SP. Since completion of his Company Secretaryship wayback in 1978 and prior to joining PSL in 1991 he workedin various Senior positions in Public and Private SectorCompanies such as Pawan Hans, CCIC, Taj Group ofHotels etc.Hence out of a total of 28 years post qualificationexperience, Mr. Gehani has been heading the Legal &Secretarial Department of PSL Limited for more than 16years now. He had effectively contributed in successfulcompletion of Company’s maiden IPO, FCCB issue,Right issue and few Preferential Allotments whichdirectly helped in raising adequate funds forestablishment of new Production Facilities.Mr. Gehani has been associated with variousProfessional and Social Organizations of the countryfor last 20 years and has held Senior responsible positionin some of them.

Information pertaining to Directors whose appointment will be placed at the meeting for approval of members

Particulars Shri Paresh J. Shah Shri G. Gehani

Date of Birth

Qualification

Expertise inspecific functionalarea

Directorship heldin othercompanies

Brief Resume

Additional Information

PSL Notice 6.p65 8/30/2007, 2:58 PM16


ToThe Members ofPSL Limited

Your Directors are indeed happy to place before you this NineteenthAnnual Report of the Company together with the Audited Statementof Accounts for the Financial Year ended on 31st March 2007.

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

Current Year Previous Year

(Rs./Crores) (Rs./Crores)Sales 1583.21 1539.06Other Income 25.08 17.61Total Income 1608.29 1556.67Add/Less : Change in Stock 77.33 6.71Total 1685.62 1563.38

Net Profit before depreciation

and interest was 173.62 149.29

After deducting interest of 43.50 48.53And depreciation of 43.92 33.86The profit for the year before TaxationProvisions amounted to 86.20 66.90From which is deducted a TaxationProvision of 24.04 17.71Leaving thereby a Net Profit of 62.16 49.19Which your directors haverecommended to beappropriated as follows :-a) Transfer to General Reserves 7.00 5.00b) Dividend Payment

(i) Interim 7.98 7.34Add : Tax 1.12 9.10 1.03 8.37

(ii) Final 8.01 7.58(Proposed)Add:Tax (Proposed) 1.36 9.37 18.47 1.06 8.64 17.01

c) Income tax for earlier year 0.80 26.27 Nil 22.01

Thereby leaving a balance of 35.88 27.18for carrying over to next year’s account.

PERFORMANCE COMPARISONS

1) Inspite of a marginal increase in Sales as compared to last year:-(a) 16.30% growth was registered in Profit before Depreciation

& Interest.(b) 28.84% growth was registered in Profit before Taxation

Provision.(c) 26.37% growth was registered in Net Profit after Taxation

Provision.Thereby evidencing effective controls over Cost ofProduction and other expenses.

2) For the year under review:-

(a) 40% more amount was credited to General ReserveAccount

(b) The Company could maintain the same Dividend PayoutRatio of 50% as in last few years.

CAPITAL ENHANCEMENT

A) PREFERENTIAL ALLOTMENT

To be able to successfully finance the Company’s expansioninitiatives, your Company issued 20,97,000 equity shares ofRs. 10/- each at a premium of Rs.197.35 per share to fewinternationally well known Financial Institutions (QualifiedInstitutional Buyers) in accordance with the guidelines issuedby SEBI for Qualified Institutional Placements (QIP).

B) FCCB ENCASHMENT

Out of a total of 40 Million US Dollars worth FCCB’s issuedby the Company in September, 2005, in addition to theconversion of FCCBs worth US $ 0.80 Million into equity

shares during the previous Financial Year, the Companyreceived conversion notices from holders of FCCB’saggregating to US$ 23.70 Million between the end of the lastFinancial year of the Company to which the Balance Sheetrelates and the date of this Report. Consequently 54,97,347Equity Shares of Rs.10/- each were allotted by the Companyto the relevant FCCB Holders during the said period.

Consequent upon the abovementioned two developments, thePaid-up Capital of the Company, which was Rs.31.95 Croreson 31st March, 2006 got enhanced to Rs.34.06 Crores on31st March, 2007 and to Rs.39.55 Crores on the date of thisreport.

LISTING

All the aforesaid 20,97,000 Equity Shares issued on PreferentialAllotment Basis and 1,15,977 shares allotted on conversion ofFCCB’s have been listed with Bombay and National Stock Exchangeand it is hoped that balance 53,81,370 shares already allotted forsome more conversions shall also be listed soon.

SUBSIDIARY COMPANIES

1. PSL CORROSION CONTROL SERVICES LIMITED

PSL Corrosion Control Services Limited – a Wholly OwnedSubsidiary of the Company engaged in Rebar Coating andproviding Anti-corrosive treatment, registered a marginalgrowth in its Income from Rs.18.67 Crores to Rs.19.00 Croresduring the year under review. The net profit during the saidyear has also improved marginally from Rs.3.92 Crores toRs.4.66 Crores.

2. PIPELINE SYSTEMS LIMITED

This Company was incorporated as a Wholly OwnedSubsidiary of our Company on 4th day of November, 2004, asa category – 2 Global Business Company in Mauritius.

In line with the activities of PSL Limited, Pipeline SystemsLimited through its recently incorporated Subsidiary, PSL FZEis setting up a Manufacturing Unit in Hamriyah Free TradeZone, Sharjah, UAE, which shall be engaged not only inManufacturing of Steel Pipes & providing of Anti CorrosiveCoatings on them but even in export of such Pipes.

3. PSL USA INC.

Keeping in view the rising demand for Company’s productsin North America, this Company was incorporated on 4th

December, 2006 in the State of Delaware, USA as a WhollyOwned Subsidiary of our Company.

In line with the activities of our Company and those of ourother Subsidiaries, the Company has entered into a JointVenture namely PSL North America LLC. The proposedCompany shall also be engaged in Manufacturing of Steel Pipesas well as providing of Anti Corrosive Coatings on Steel Pipesand their export.

4. PSL FZE – UAE

This Company was incorporated on 15th day of May, 2006 asa Wholly Owned Subsidiary of Pipeline Systems Limited,Mauritius, which in term is a Subsidiary of our Company. Asmentioned above, the Company is setting up its Plant atHamriyah Free Trade Zone in Sharjah, UAE, which shall soonbe commencing its commercial production.

Directors’ Report

PSL Notice 6.p65 8/29/2007, 4:22 PM17


EXPANSION OF OPERATIONS

I. WITHIN INDIA

A) IN RAJASTHAN

Your Company, in keeping with its strategy of multi locationmanufacturing, in close proximity to market demand center,added a new location during the current year, with thecommissioning of its pipe manufacturing and pipe coatingfacility in Phagi District, Jaipur, Rajasthan.

The first Mill at this location was commissioned and put intooperation in March, 2007 followed by installation andcommissioning of the second Mill at the same location,commissioned i.e., within four months in August, 2007.

This is in response to the ramping up by the State Governmentin Rajasthan of its Urban Water Supply and Rural IrrigationPipelines Projects, which over the next 2 to 3 years will requirein excess of 250,000 tons of Steel Pipe.

Furthermore, with Oil and Gas exploration in the state,resulting in several successful finds of this precious commodity,the likelihood of extensive Oil and Gas Pipeline requirements,both within the state and trans state in the region, has goneup.

Since, PSL’s Pipe Mills are technically enabled to cater to bothWater Sector and Oil & Gas Sector. Keeping in view thePipeline requirements, setting up of Jaipur Unit and subsequentboosting of its Capacity was more than adequately justifiedand warranted.

B) IN GUJARAT

The Company’s recently commissioned the state of the art,high capacity, Two Step Pipe Mill at Varsana in Kandla, wasfully engaged in production and supply of primarily GasPipeline requirements, both domestic and export. The Unitresponded to GAIL’s urgent Gas Pipeline Projects including: -

DUPL – 1DUPL – IIDPPL – IDPPL – II

in rapid succession to the entire satisfaction of this importantcustomer.

The Unit was technically audited by diverse international Oiland Gas majors such as Shell Globa, Petronas of Malaysia,NIGC and others and received Certification from each one ofthem enabling the Company to commence participating inglobal tenders, previously restricted to Longitudinal SeamPipes.

Success followed immediately and your Company has securedthe prestigious orders from M/s. MITCO – Japan, PDO – Omanand NIGC along with its domestic regular customers such asGAIL, IOC and GSPL.

The Two Step Unit is expected to cross 150,000 tons ofproduction in the Current Year, which would be a substantialincrease over its previous years production.

C) IN ANDHRA PRADESH

Finally, the Company installed and commissioned the Stateof the art offshore Pipe Coating Facility at Kakinada in AndhraPradesh. Since Kakinada is the designated landfall point forall KG Basin offshore Oil and Gas production, this servicefacility catering to offshore pipeline is expected to becontinuously engaged by Oil and Gas majors such as Reliance

Industries, ONGC, GSPL, all of whom have announced majorOil and Gas finds in KG Basin Offshore Region.

The first such order was received from M/s. Allseas of Hollandand this is currently under execution at both Vizag andKakinada Facilities of the Company.

II. OVERSEAS

(A) UAE

Consequent upon receipt of many business enquiries, by theCompany from third world countries including few in the GulfRegion, a big business possibility was considered imminentin the Gulf Region. Although few orders received by theCompany were well executed from the Company’s existingIndian Pipe Mills, your Company took a timely decision ofestablishing a Pipe Manufacturing Unit along with a CoatingYard Facility in Sharjah near Dubai. A Subsidiary Companyunder the name and style of PSL-FZE was incorporated in 15th

May, 2006 for the purpose immediately after which effectivesteps were initiated to set up the required facility. YourDirectors are happy to announce that they expect theCommercial Production to roll out from the said new facilityby September 2007 since the first order for Pipe supply isexpected to be received in August, 2007.

(B) NORTH AMERICA

The US Oil and Gas Pipeline Market has witnessed a boomingdemand due to fresh requirement for Gas Distribution Pipelineand this demand boom is expected to be further supplementedby a huge replacement program for several aged Pipelines,which have either completed their design life or areapproaching the end of their design life.

To take full and timely advantage of the aforesaid boomingdemand, your Company has established a Wholly OwnedSubsidiary in the US with the objective of entering into a JointVenture to establish and operate a State of the art Two StepHelical Seam Pipe Manufacturing Facility to cater to the Oiland Gas Pipeline market in the US. The Joint Venture in thename and style of “PSL North America LLC” (78% owned byPSL), has since selected a prime location on the Northern Coastof Gulf of Mexico in the US State of Mississippi.

With strong State support, extending to provide 156 acres ofland on a subsidiary leased basis at a cost of US$ 1 per yearalong with substantial tax exemptions and benefits, theimplementation of the project is progressing rapidly and mostof the environmental and other clearances required are in theprocess of being obtained.

The manufacturing of the equipment for this proposed projectis also nearing completion in India and related works such ascivil work, building and utilities are progressing simultaneouslyat site in the US. The Unit is expected to be commissioned inthe first half of 2008 and based on strong demand in the localmarket, is expected to commence full scale production as soonas the certification process has been completed.

Based on the forecasted continued strong demand, the JointVenture Company, a Subsidiary of PSL, is likely go flourishand provide strong financial returns to the Company in thecoming years.

DIVIDEND

Adhering to its earlier practice, your Company had paid an InterimDividend of Rs.2.50 per share in February, 2007.

Taking into account the growth in Company’s profitability, yourDirectors are now pleased to recommend a final dividend of Rs.

Directors’ Report

PSL Notice 6.p65 8/29/2007, 4:22 PM18


2.50 per equity share of Rs. 10/- each on all fully paid up equityshares in addition to the Interim Dividend paid earlier. Thus thetotal dividend for the Financial Year 2006-2007 would work out toRs. 5.00 per equity share. With this your Company would completetwelfth year of successive payment of dividend ever since its maidenPublic Issue in February, 1995

ACCOUNTS OF THE SUBSIDIARY COMPANIES

In compliance of Section 212 of the Company’s Act 1956, the dulyaudited annual accounts of PSL Corrosion Control Services Ltd. &Pipeline Systems Limited – the two Wholly Owned SubsidiaryCompanies of the Company - for the Financial Year ended on 31st

March, 2007 are attached.

STATUTORY COMPLIANCES

1. The Company Secretary as compliance officer ensurescompliance of SEBI regulations, applicable laws, rules andregulations, provisions of listing Agreement and responses todifferent type of queries from shareholders including thoserelated 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 andProfit & Loss Account etc., your Company in order to complywith clause 32 of the Listing Agreement executed by it withdifferent Stock Exchanges is sending herewith the full versionof the aforesaid statements along with various documentswhich are required to be attached with them, to all theShareholders of the 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 annexedto this report.

4. In compliance of Clause 32 of the Listing Agreement andAccounting Standard AS-21 on consolidated financialstatement your directors have pleasure in attaching theconsolidated financial statements, which form part of theAnnual Report and Accounts.

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

6. In accordance with statutory obligation, Secretarial Audit isdone on quarterly basis to reconcile the total admitted capitalwith the two depositories in the country namely NationalSecurities Depository Limited (NSDL) & Central DepositoryServices (India) Limited (CDSL) and the total issued and listedcapital. Audit Reports furnished to this effect by a PracticingCompany Secretary appointed for the purpose have beenregularly submitted to the various Stock exchanges with whichthe 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 lossfrom unauthorized use or disposition, and transactions areauthorised, recorded and reported correctly. The internal control isdesigned to ensure that financial and other records are reliable fortimely preparing 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 suggest improvement for strengthening them. Proper reviews

are carried out to ensure follow-up on the audit observations.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSIONAND ANALYSIS REPORT

Pursuant to clause 49 of the listing Agreement with the stockexchanges, Management Discussion and Analysis report, corporategovernance Report and Auditors certificate certifying complianceof conditions of corporate governance are made part of the AnnualReport.

BOARD COMMITTEES

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

1. Audit Committee2. Bond Conversion Committee3. Committee of Directors4. Remuneration Committee5. Shareholders’/ Investors’ Grievance Committee6. Share Transfer Committee

DIRECTORS

Shri G. S. Sauhta, Shri D. N. Sehgal, Shri. R. K. Bahri and Shri. Y. P.Punj, Directors of the Company have been rendering very usefulservices to the Company by way of their respective contributionsas Directors on the Board since long time. In accordance withSection 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 reappointment. In order to provide more details about them tothe members their brief resumes are also included in the tableannexed to the notice

As the operations of your Company are expanding exponentially,your Board inducted four more Directors i.e. three ExecutiveDirectors namely Shri S. P. Bhatia, Shri C. K. Goel, Shri G. Gehaniand one Independent Shri. Paresh Shah as ‘ADDITIONALDIRECTORS’ since the last Annual General Meeting held in August2006. By their induction, the Board is adequately broad basedcomprising of excellent professionals having expertise in variedfields and hence is fully competent to steer the Company towardsachievement of its high valued goals in an optimum manner.

Shri S. P. Bhatia, Shri. C. K. Goel, Shri. G. Gehani & Shri. Paresh J.Shah will be holding their offices till the conclusion of theforthcoming Annual General Meeting. However, notices underSection 257 of the Companies Act, 1956 have been received bythe Company proposing their candidature as “DIRECTORS”.Shareholders will therefore be requested to consider appointingthem as “Directors” in the said AGM. Their Brief Profiles areincluded in the table annexed to the Notice being sent toshareholders.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) in the Companies Act, 1956 yourDirectors 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 thestate of affairs of the company at the end of Financial Yearunder review and Profit & Loss Account of the period underreport.

- Proper and sufficient care has been taken for maintenance ofadequate accounting records and for safeguarding the assets

Directors’ Report

PSL Notice 6.p65 8/29/2007, 4:22 PM19


of the Company for preventing and detecting fraud and otherirregularities.

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

AUDITORS

M/s. Suresh C. Mathur & Co., Chartered Accountants who willretire at the conclusion of the Meeting, have offered themselves forre-appointment for which they are eligible. They have, pursuant tosection 224 (1B) of the Companies Act 1956, furnished a Certificateregarding 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.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE EARNINGSAND OUTGO

The particulars as prescribed under subsection (1) (e) of Section217 of the Companies act, 1956 read with Companies (Disclosureof 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.

EMPLOYEE PARTICULARS

In compliance of Section 219(1)(b)(iv) of Companies Act, 1956 this

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 “Executive Director & Company Secretary” of theCompany at its Registered Office.

ACKNOWLEDGEMENTS

Your Directors wish to thank Company’s valued customers,suppliers, dealers, Government authorities, Financial Institutions,Foreign Institutional Investors, Bankers, consultants, solicitors,auditors & Shareholders for the co-operation and encouragementextended by them to the Company from time to time.

Your Directors also place on record their deep appreciation for thecontribution made by the employees at all levels.

For and on behalf of the Board of Directorsof PSL LIMITED

sd/- sd/-Place : Mumbai (ASHOK PUNJ) (Y. P. PUNJ)Date : 31st July, 2007 Managing Director Director

Directors’ Report

PSL Notice 6.p65 8/29/2007, 4:22 PM20


ANNEXUREANNEXURE 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 2006-07 2005-06A) Power and Fuel Consumption1. Electricity

a) PurchasedUnits ( M. KWH) 24795.723 20354.658Total Amount ( Rs. Lacs) # 13.20 10.48Average Rate/Unit (Rs./KWH) 5.32 5.15

b) Own Generationi) Through Diesel Generator

Units (M. KWH) 10899.474 10433.920Units per litre of Diesel Oil (KWH) ## 3.02 3.57Average Rate/Unit (Rs./KWH) 12.13 9.61

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

NIL NIL

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

B) Technology Absorptions

The 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. Optimizing production efficiency3. Cost deduction and economical efficient production4. Pollution Control - to have pollution free environment in and around factory areas.5. Environmental Care6. Optimization of process parameters.

II. FOREIGN EXCHANGE EARNINGS AND OUTGO

Rs. in Crores Rs. in Crores

Earnings 55.75 483.12Outgo on Royalty NIL NIL

For and on behalf of the Board of Directors ofPSL Limited

sd/- sd/-Place : Mumbai (ASHOK PUNJ) (Y.P. PUNJ)Date : 31st July, 2007 Managing Director Director

Directors’ Report

PSL Notice 6.p65 8/29/2007, 4:22 PM21


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

1. PHILOSOPHY ON CORPORATE GOVERNANCE

Your Company believes in and adhere to good CorporateGovernance policies such as professionalism, transparence,accountability, disclosure and compliance. During the year underreview the Company continues its focus on good CorporateGovernance with the objective of efficient and ethical conduct ofbusiness for meeting its obligations towards shareholders and otherstakeholders.

The broad terms of company’s philosophy on corporate Governanceare: -

a) to ensure transparency in all its operation;

b) to maintain high quality of products on continuous basis;

c) to make disclosures and enhance shareholders value withoutcompromising in any way in compliance of laws and regulations;

d) to strive to achieve a competitive return for its investors;

e) to ensure that adequate internal control systems exist so as toenable the Board of Directors to effectively discharge itsresponsibility to all the stakeholders of the company;

f) to ensure that the decision making process is fair and equitable;

g) to ensure that employees of the company fully subscribe to thecorporate values and apply them in their conduct;

h) to ensure that the Company follows recognized Corporategovernance practices.

2. BOARD OF DIRECTORS

Composition & Category

The total strength of the Board is Fifteen Directors comprising ofone Managing Director, Seven Executive & Wholetime Directorsand Seven Non-Executive Directors of which Five are Independent.

The composition and other required details of the existing Board ofDirectors are given below:-

Sr. Name Category No. of other Committee

No. Directorships Member-

held ships

1. Y. P. Punj Non Executive 6 2

Chairman

2. Ashok Punj Managing Director 12 2

3. Alok Punj Non-Executive 6 5

4. G.S. Sauhta Executive 2 Nil

5. R. K. Bahri Executive 4 Nil

6. M.M. Mathur Executive Nil Nil

7. D. N. Sehgal Executive 2 Nil

8. Prakash V Apte Independent 1 2

Non-Executive

9. N. C. Sharma Independent 2 2

Non-Executive

10. Ashok Sharma Independent Nil Nil

Non-Executive

11. Harry H. Shourie Independent Nil 1

Non-Executive

12. S. P. Bhatia Executive Nil Nil

13. C. K. Goel Executive Nil Nil

14. G. Gehani Executive Nil 1

15. Paresh J. Shah Independent Nil Nil

Non-Executive

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 few Whole time Directors and otherheads of Divisions/ Departments.

P = Present

LOA = Leave Of Absence

NA = Not Applicable (since was not a Board Member)

A total of Six Board Meetings were held.

REMUNERATION OF DIRECTORS

Similar remuneration shall be paid to the Directors with similarlength of experience. The Non-Executive Directors are adequatelycompensated for the time and energy they spent on attendingCompany’s Board Meetings by payment of Rs.20,000/- as sittingfee per meeting.

Those Non-Executive Directors, who attend the Committee Meetingson days other than Board meeting Day are also suitablycompensated by payment of Rs.10,000/- per meeting.

NON-EXECUTIVE DIRECTOR

Apart form the sitting fees paid for attending Board Meetings/Committee Meetings, the Non-Executive Directors do not have anymaterial pecuniary relationship or transaction with the Companyduring the year 2006-07.

EXECUTIVE DIRECTOR

During the year under review Executive Directors, who areappointed for a five year tenure, were paid remuneration inaccordance with the approvals granted by the RemunerationCommittee followed by shareholders in their last Annual GeneralMeeting held on 31st August, 2006 and are drawing a Basic Salaryof Rs.4,00,000/- per month in addition to usual perquisites andallowances some of which are directly linked to their basic salaries.

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

3. BOARD COMMITTEES

A) AUDIT COMMITTEE

(i) Terms of reference

The role and term of reference of Audit Committee coverareas mentioned under clause 49 of the Listing Agreementand section 292A of the Companies Act, 1956, besides otherterms as may be referred by the Board of Directors fromtime to time.

The Non-Executive Directors having diverse knowledge, experienceand expertise in their respective field 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. Since the Board is headed by a Non-Executive Chairman, Five Independent Directors out of total ofFifteen Directors constitute 1/3rd of the Board’s strength.

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.

In view of above, the Corporate Governance guidelines detailed inListing Agreements are well complied with by the Company as faras “Composition of Board” is concerned.

ATTENDANCE AT MEETINGS

Attendance of different Directors at various meetings of Board heldduring last one year was as follows :-

Sh. Y

.P. P

unj

Sh. A

shok

Pun

j

Sh. A

lok

Punj

Sh. G

.S. S

auth

a

Sh. R

.K. B

ahri

Sh. M

.M. M

athu

r

Sh. D

.N. S

ehga

l

Sh. P

raka

shVi

naya

k A

pte

Sh.N

.C. S

harm

a

Sh. A

shok

Sha

rma

Sh. H

arry

H.

Shou

rie

Mr.

S.P.

Bha

tia

Mr.

C.K.

Goe

l

Sh. G

. Geh

ani

Mr.

Pare

sh J.

Sha

h

Tota

l Dir.

Pre

sent

% o

f Atte

ndan

ce

26/10/06 P P P P P P P P P P P NA NA NA NA 11 100

18/12/06 LOA P P P P P P P P LOA LOA LOA LOA NA NA 8 54

18/01/07 P P P P P P P P P P P P P NA NA 13 100

09/03/07 LOA P P P P LOA P P P LOA LOA P LOA NA NA 8 62

22/06/07 P P P P P P P P P P P LOA LOA NA P 12 86

31/07/07 P P LOA P P P LOA P P P P P LOA P P 12 80

% of 67 100 84 100 100 84 84 100 100 67 67 60 20 100 100

Attendance

Corporate Governance

PSL Notice 6.p65 8/29/2007, 4:22 PM22


The present terms of reference for the Audit Committee aslaid down by the Board include the following:

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

b) To review with management the Annual FinancialStatements before submission to the Board focusingprimarily on :-

i) Any changes in accounting policies and practices.

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

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 Exchange and legalrequirements concerning financial statements.

viii)Any related party transactions i.e., transactions of theCompany of material nature, with promoters or themanagement, their subsidiaries or relatives etc. thatmay have potential conflict with the interest ofcompany at large.

c) To review the Company’s financial and risk managementpolicies

(ii) Composition, meeting and attendance

a) Composition

The Audit Committee comprises of 4 members. Thecomposition of the Committee is as follows:

Name of Member Category / Position

Mr. Alok Punj Non- Executive Director

Mr. Prakash Vinayak Independent & Non ExecutiveApte* Director

Mr. N. C. Sharma* Independent & Non ExecutiveDirector

Mr. Harry Harinder Independent & Non ExecutiveShourie Director

* All the above members have a vast experience apart from adequateknowledge in the field of Finance & Accounting.

Meetings & Attendance

During last one year 4 meetings of Audit Committee were held.The attendance at the said meetings were as follows :-

Date of Mr. Alok Mr. Prakash Mr. N. C. Mr. Harry % of

Meeting Punj Vinayak Apte Sharma Harinder Attendance

Shourie

26/10/06 P P P P 100

18/01/07 P P P P 100

26/06/07 P P P P 100

31/07/07 P P P LOA 75

% of 100 100 100 75

Attendance

P = Present

LOA = Leave of Absence

B) REMUNERATION COMMITTEE


The terms of reference of the Remuneration committeeinclude review, determination, increase and approval ofremuneration payable to Executive Directors taking intoconsideration company’s policy and financial status, industrytrends, past performance and past remuneration.

(ii) Composition

The Committee comprises of following four Non-ExecutiveDirectors of the Company.

Name of the Member Category/Position

Y.P. Punj Member

Alok Punj Member

Prakash Vinayak Apte Member

Ashok Sharma Member

(iii)Meeting

Since the remuneration of Directors was not revised duringthe year under review, no meeting for the Committee wasconducted.

C) SHAREHOLDERS’/INVESTORS’ GRIEVANCE COMMITTEE


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

- redressal of shareholders and investors’ complaints;- transfer of shares;- non-receipt of Balance Sheets;- non-receipt of warrants for declared dividends;- ensure timely attention to investors’ complaints;- other matters related to shares.

(ii) Composition

The Committee comprises of following three members .


Alok Punj Chairman

N.C. Sharma Member

Ashok Sharma Member

G. Gehani Secretary

(iii) Meeting

All members attended the last meeting convened forconsidering the status of any pending grievances ofShareholders.

(iv) Compliance Officer

Shri G. Gehani – Director & Company Secretary continuedto act as “Compliance Officer”.

v) During the year a total of 173 queries/complaints/grievanceswere received from the shareholders, all of them wereresolved to the full satisfaction of the shareholders.

D) COMMITTEE OF DIRECTORS


The 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 comprises of following three members.


Y. P. Punj Member

Ashok Punj Member

Alok Punj Member

(iii)Meeting

During the year under review 28 meetings were held.Attendance of the members at the meetings was as follows:-

Name of the director No. of meetings attended

Y. P. Punj 23

Ashok Punj 26

Alok Punj 26


PSL Notice 6.p65 8/30/2007, 2:59 PM23


E) SHARE TRANSFER COMMITTEE

Terms of reference, Composition and Meetings

(i) This committee is a one-man committee since the role ofthis Committee is limited being approval of transfer ofphysical equity shares of the Company lodged with theCompany/ Share Registrars.

(i) Shri G.Gehani, Director & Company Secretary of theCompany has been appointed as the member of thecommittee which accords approvals to such transfers ofphysical shares which are duly processed by the Company’sRegistrars namely M/s. Karvy Computershare private Limited,Hyderabad.

(iii)During the year under review a total of 25 sittings were heldwherein a total of 62 transfer cases comprising of 7500 equityshares were approved. All actions of this Committee areplaced before the Board of Directors from time to time forits noting and ratification.

F) BOND CONVERSION COMMITTEE

This Committee was formed during the year under review toconsider application for conversion of Foreign CurrencyConvertible Bonds (FCCBs) issued by the Company inSeptember, 2005, since the said Bonds were attached with aright of conversion into equity shares at a pre-fixed rate, at thediscretion of the Bondholder. Shri Ashok Punj and Shri AlokPunj are the members of this Committee. As no request forconversion was received during the year under review, nomeeting was conducted, however after conclusion of the lastFinancial Year four meetings were convened in quick successionto allot equity shares for conversion of FCCBs. Both membersattended all four meetings.

4. GENERAL BODY MEETINGS

After last Annual General Meeting held on 31st August, 2006 oneExtra ordinary General Meeting was held on 25th January, 2007 toconsider and approve proposals of issuance of equity shares throughQualified Institutional Placement and for obtaining approval U/s314 of the Companies Act for an appointment to the place of profit.

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

For Date Time Venue No. of

Financial Special

Year Resolutions

Considered

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

2006 2006 Devka Beach, Nani

Daman, U. T. of Daman

& 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

2002- 25th Sep., 10.00 A.M. “Cidade de Daman”, 2



& Diu 396 210

2000- 8th August, 9.00 A.M. “Cidade de Daman”, 3



& Diu 396 210

No business requiring compliance of “Postal ballot” proceedings was required

to be conducted in the last years.

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 noncompliance by the company.Similarly, no penalties or strictures were imposed on thecompany by the Stock Exchange or SEBI or any otherstatutory 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 of aBond Conversion Committee & Remuneration Committeehave been adopted by the company.

6. MEANS OF COMMUNICATION

(a) Information to stock exchanges and Newspaper Publicity

- Quarterly/Annual Results of the company are published inthe newspaper 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/ RecordDates to the Stock Exchanges and also published theinformation pertaining thereto in reputed newspaper forinformation of shareholders.

- 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 such asquarterly/audited Financial results, Shareholding pattern etc. onCompany’s website www.psllimited.com at the earliest.

The company by way of press releases in leading financialnewspapers also informs significant information about importantdevelopments 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) inaddition to filing of the same in hard copy with the Stockexchanges.

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

7. GENERAL SHAREHOLDER INFORMATION

a) Annual General Meeting Date : 27th September, 2007

Time : 9.30 A.M.

Venue : Hotel “Cidade DeDaman, Devka Beach,Nani Daman, U.T. ofDaman & Diu-396 210

b) Financial Calendar - April to March of each year

c) Un-audited/audited

Results approval Quarter Ended on Board meetingheld on

- First 30th June 2006 28th July 2006

- Second 30th Sept. 2006 26th Oct. 2006

- Third 31st Dec. 2006 18th Jan. 2007

- Year 31st March 2007 22nd June 2007


PSL Notice 6.p65 8/29/2007, 4:22 PM24


d) Dates of Book closure Monday, the 24th September, 2007to Thursday, the 27th September,2007 (Both days inclusive)

e) Dividend 9th October, 2007Payment Date Interim dividend paid @ Rs. 2.50/-

per equity share in February 2007

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

f) Listing on Stock Bombay Stock exchange (BSE)Exchanges National Stock exchange (NSE)

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

h) Stock Codes Bombay Stock Exchange - 526081National Stock Exchange - PSL

i) Market price Data High/Low of Company’s shares inBSE & NSE is as follows :-

company namely KarvyComputershare Private Limitedbefore approval to such transfers isaccorded by Share TransferCommittee. Share transfers areregistered and returned withinfifteen days from the date oflodgment if the documents arecomplete in all respects.

-In terms of Clause 47c of the listingAgreement entered into betweenthe company and different stockexchanges a practicing CompanySecretary has been appointed bythe company to examine therecords and processing of sharetransfer and thereafter issue halfyearly certificate which is sent tothe stock exchanges.

- 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.

m) Distribution of Distribution of Shareholding ofShareholding the company as on 31st March, 07

Category No. of % of Amount % of

From To cases cases (Rs.) Amount

01-5000 7944 92.28 9450180.00 2.7633%

5001-10000 346 4.02 2855880.00 0.8350%

10001-20000 139 1.61 2204370.00 0.6445%

20001-30000 50 0.58 1264580.00 0.3697%

30001-40000 20 0.23 706320.00 0.2065%

40001-50000 13 0.15 608670.00 0.1779%

50001-100000 32 0.37 2291610.00 0.6700%

100001 & above 65 0.76 322599810.00 94.3325%

TOTAL 8609 100.00 341981420.00 100.0000%

n) Demat of Approx. 99% of the equity sharesShares of the company have been

dematerialised.

o) Outstanding In September 2005 the CompanyConvertible Bonds had issued Zero Coupon Foreign

Currency 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 a majority of Bond Holdershave got their Bonds valuing USDollars 24.5 Million converted intoequity shares till now therebyleaving outstanding Bonds worthUSD 15.5 Million. In theeventuality of all FCCBs gettingconverted, the total share capital

j) Comparison to Performance in comparison tobroad based index such as Niftyindex and BSE Sensex is givenhereunder:-

BSE NSE

Price for Shares Price for Shares

High Low High Low

April 2006 258.25 244.85 257.75 245.20

May 2006 265.50 225.90 264.65 223.25

June 2006 237.80 198.95 237.65 195.45

July 2006 238.70 190.00 239.95 189.15

August 2006 218.65 198.25 216.55 199.10

September 2006 206.45 191.05 207.00 196.05

October 2006 221.85 198.25 222.00 197.60

November 2006 218.75 200.60 218.15 201.55

December 2006 215.85 196.20 215.55 196.00

January 2007 227.00 206.45 228.35 206.95

February 2007 224.85 207.25 224.10 208.00

March 2007 213.40 192.10 211.20 191.85

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

l) Share Transfer System - The Company’s equity shares arecompulsorily traded in dematmode at the stock exchanges.

- Equity shares in physical formlodged for transfer are processed byshare Transfer Agents of the

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

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

Share Price 257.35 11279.96 256.45 3402.55

01.04.06 (Open)

Share Price 193.70 12455.37 190.05 3633.60

31.03.07 (Close)

Increase/decrease in % - 24.73% + 0.42% - 25.89% + 6.80%

Broad Based Index


(in Rs.)

PSL Notice 6.p65 8/30/2007, 3:00 PM25


(without any further enhancement)would be 4,32,90,805 equityshares of Rs. 10/- each & theholding of Promoter Group wouldthen fall from existing level of52.18% to 47.71%.

p) Plant Location(s) The Company’s Plants are locatedat Varsana, Nanichirai,Gandhidham, Daman,Madhuranthakam (Near Chennai),Vishakhapatnam, Pilwai (nearGandhinagar, Gujarat), Jaipur

q) 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 Vittal Rao Nagar,M-13 A, Connaught Circus Madhapur,New Delhi - 110 001. Hyderabad - 500 081.

8. OTHER USEFUL INFORMATION FOR SHAREHOLDERS

COMPLIANCE OF CODE OF CONDUCT

In order to comply with the requirement of Listing Agreementsentered with Bombay Stock Exchange/ National Stock Exchangeregarding “Code of Conduct” of the Company, the Board ofDirectors in its meeting held on 28th July, 2006 approved the“Code of Conduct” of the Company for Directors and SeniorExecutives of the Company, which was duly circulated to allthe Directors, Senior Employees. The code of conduct was alsoposted on the Company’s Website.

All Board Members and Senior Management Personnel affirmedthat compliance of “Code of Conduct” for the Financial Year2006-07 which was duly taken on record at the Meeting of Boardof Directors on 22nd June, 2007.

UNCLAIMED DIVIDEND

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

dividends declared up to 1999-2000 (Interim) and remainedunclaimed to the said Fund.

As some amount from the dividends declared thereafter andtabulated below has still not been transferred to the aforesaidfund, 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

1999-2000 Final 9th 29/03/2001 04/05/2008

2000-2001 1st Interim 10th 16/07/2001 22/08/2008

2000-2001 2nd Interim 11th 13/11/2001 20/12/2008

2000-2001 Final 12th 08/08/2002 14/09/2009

2002-2003 Interim 13th 21/04/2003 28/05/2010

2002-2003 Final 14th 25/09/2003 01/11/2010

2003-2004 Interim 15th 22/01/2004 28/02/2011

2003-2004 Final 16th 23/09/2004 30/10/2011

2004-2005 Interim 17th 19/01/2005 26/02/2012

2004-2005 Final 18th 25/09/2005 01/10/2012

2005-2006 Interim 19th 22/01/2006 28/02/2013

2005-2006 Final 20th 31/08/2006 06/09/2013

2006-2007 Interim 21st 18/01/2007 24/01/2014

ii) Members holding shares in physical form are requestedto notify/send the following to the company’s RTA to enablethem 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% 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 & Legal Department of theCompany.


PSL Notice 6.p65 8/29/2007, 4:22 PM26


Management Discussion and Analysis Report

INDUSTRY STRUCTURE & DEVELOPMENT

Your Company is the largest manufacturer of high-grade large diameter Spiral (helical) submerged arcwelded pipes, or HSAW pipes, in India, with acapacity to produce up to 1,100,000 tonnes per year.Our HSAW pipes are used primarily in thetransmission of oil, gas and water. We manufacturerour HSAW pipes in 11 HSAW pipe mills and pipecoating mills located in five cities geographicallyspread throughout India. We are also one of the fourpipe manufacturers in India with an integrated pipecoating capability for among other things, pipecorrosion protection. We design and build our ownpipe manufacturing and coating equipment in-houseand also undertake turnkey HSAW plant andmachinery manufacturing. We also provide, throughour wholly-owned subsidiary PSL Corrosion ControlServices Limited (“PSL Corrosion”), corrosionprotection for reinforcing steel bars used in layingreinforced concrete in the construction industry bythe fusion bonded epoxy coating process. The othertypes of coating services provided by us arepolyethylene coating, coal tar enamel coating, fusionbonded epoxy coating, concrete weight coating,cement mortar lining, liquid epoxy coating andelastometric and field joint coating. We alsomanufacture various other types of ancillary productsand provide services related to the pipe industry suchas Induction Pipe bending, Sacrificial Anodes, RebarCoating and execution of Turnkey Projects.

The main activities of your Company include :-

(i) Manufacture of Helical Submerged Arc Welded( HSAW) pipes

(ii) Provision of different kinds of Anti-corrosiveCoatings on Pipes

(iii) Ancillary Products and Services relating to PipeManufacture

(iv) Execution of turnkey projects.

The pipes made by the Company are of API (AmericanPetroleum Institute) Standard and are eventually usedfor oil and gas sector – both onshore and offshore aswell as for transportation of water from areas of itsabundance to the areas of shortage. These pipes canalso be utilized for structural and piling applications.

In addition to the core activities of pipe making andpipe coating, the Company has its competitive rangeof services, which include cross-country pipelineconstruction, pipeline construction, maintenance andintegrated upgradation, fabrication etc.

We are proud to state that with the commissioning ofour new State-of-the-art Two Step Pipe Mill, havingan annual capacity of 300000 MT, we are now anindustry leader as we are the only Company in thecountry to have crossed one Million Metric TonneProduction Capacity.

OPPORTUNITIES AND THREAT

Your Company intends to capitalize on its competitivestrengths by implementing the following principalstrategies and foresee the following opportunities.

Leverage upon our cost advantages to makecompetitive bids for new large projects announcedin India and abroad

Major oil and gas companies have announced plansto lay extensive networks of pipelines in India overthe next several years. There have been recent offshoregas discoveries on the east coast of India, principallyin the Krishna Godavari basin, that would alsonecessitate the laying of pipelines.

Internationally, there are also many oil and gaspipelines that have been announced outside India,particularly in the Middle East, North and East Africaand South East Asian countries. The proximity of theseregions to India provides us with a cost advantageover many international SAW pipe manufacturerslocated further away in Japan and Europe. If a potentialcontract is large enough, we may also take advantageof the mobility of our pipe mills to relocate one ormore of our pipe mills closer to the location wherethe pipes are required to be used. This would lowerour costs of delivery of the pipes and allow us to placea competitive bid for the contract.

Apart from oil and gas pipelines, all Indian stategovernments (and in particular the Gujarat, Rajasthanand Kerala state governments) are increasing theirfocus on laying water pipelines to various locationswithin their states where water is in short supply,particularly since international organizations such asthe World Bank and the Asian Development Bankare now funding such projects across India. Waterpipelines are large diameter pipes which can best bedelivered using HSAW technology.

Expand our capacity by setting up new pipemanufacturing units

The Company intends to take advantage of theannounced increases in the market by adding capacityin locations, which shall be closer to the areas ofdemand.

The energy rich Middle East continues to be in the

PSL Notice 6.p65 8/29/2007, 4:22 PM27


limelight for pipe manufacturers with major projectsdeclared in this area. In addition, the market fortransportation of water within Middle East will alsoboost the requirement of Pipelines. According to studyby Simdex there is demand for pipeline for 119projects aggregating to 76,074 Kms in Middle Eastand Asia. In order to cater to this demand, we aresetting up a plant in Hamriyah, UAE with an annualcapacity of 75000 MTA.

In USA, the growth in gas consumption has furthernecessitated lying of new pipelines and enhancementof existing pipeline network. Moreover, replacementof the existing water distribution network wouldfurther add to the demand of pipes in this region. Tocater to this growing demand, we are establishing apipe manufacturing facility in USA.

As far as threats are concerned, like many others inthe industry, your Company also suffers from fewinherent threats of the industry such as suddenescalation of prices, availability and quantity of keymaterial i.e. HR Coils in the international market,adverse fluctuations of exchange rates and significantchanges in political and economical environment inIndia, Government policies, budget allocations etc.

Your Company’s response to threats is to ensure thatit remains competitive. It shall be able to do so becauseof reduced freight costs that the Company will haveto bear keeping in view the fact that its productionsites are located closer to the destinations ofcustomers. Again, for making HSAW pipes, the maininput material is HR Coil, which is available off-trackin the market unlike steel plates, which are used inthe manufacture of LSAW Pipes (an alternativetechnology). In short, your Company builds theequipment required to make HSAW pipes, in houseand is required to re-assemble the same at projectlocations leading to efficient services.

OUTLOOK

India, much like its Asian neighbours is an energyintensive economy. Given the nature and quantumof investments in the production and refining of crudeoil/natural gas in the region, it has become imperativeto create support infrastructure to enable efficient andreliable supply of oil/gas products to key industrial/individual users. Being the cheapest mode of transport,pipelines have become the most ideal form of oil andgas transport. Another key market segment for thecompany is the supply of pipes to water supplyprojects. With water normally transported using largediameter pipes, which can only be manufacturedusing HSAW technology employed by the company,

the company sees tremendous potential from thissector as well.

In line with the buoyancy in the pipe sector yourcompany is presently executing expansion plans toaugment its HSAW pipes manufacturing capacity atKakinada, Jaipur and Vizag.

On export fronts, your Company has developed asignificant business in Middle East and North EastAfrican markets. In order to cater to the Middle Eastmarkets, the Company’s Wholly Owned Subsidiaryis in the process of setting up a Plant in UAE atHamriyah Free Trade Zone, Sharjah.

The outlook of your Company appears favourable withencouraging prospects.

RISK AND CONCERNS

PSL operates in a business environment characterizedby increasing globalization, intensifying competitionand complex technologies. The Company responsesto this reality with a comprehensive and integratedrisk management framework to deal effectively withuncertainty and associated risks, enhancing theorganisation’s capacity to enhance value.

Risk may be defined as the possibility than an eventwill occur and adversely affect the achievement ofthe Company’s objectives and goals. A business riskis the threat that an event or action will adverselyaffect an organization’s ability to achieve its businessobjectives/ targets.

Risk management is a structured, consistent andcontinuous process, applied across the organisationfor the identification and assessment of risks, controlassessment and exposure monitoring.

The Company took initiative to achieve the RiskManagement objectives which comprise:-

• Identification and assessment of key risks incontext of the Company’s risk appetite.

• Accurate complete and timely escalation ofrisk information to support managementdecision making at all levels.

• Active involvement of all employees in therisk management process within their ownareas of responsibility.

• Continuous monitoring and management toan acceptable level of the potential impact.

• Integration of risk management into theCompany’s day-to-day operations.

Broadly, the Company categorizes the risks into thefollowing categories :-


PSL Notice 6.p65 8/29/2007, 4:22 PM28


Financial : Foreign currency, funding, receivablemanagement, working capital etc.

Operational : Cost competitiveness, quality,obsolescence, Force Majeure etc.

Strategic : Competition, Substitution, businesssegment etc.

Knowledge : Legal & Regulatory compliance,information technology etc.

The Company has effective Risk Management Systemfor broadening and strengthening the Company’s riskmanagement that helps to take significant steps inidentifying risk, assessing its significations andimplications, adopting risk management strategies andpolicies.

INTERNAL CONTROL SYSTEM AND THEIRADEQUACY

The Company has a proper and adequate system ofinternal controls commensurate with the size andnature of business covering all financial and operatingfunctions. The qualified, experienced andindependent Audit Committee of the Board ofDirectors regularly reviews plans, significant auditfindings, internal control adequacy, compliance withthe accounting standards and other legal requirementsrelating to financial statements. The internal controlis supplemented by placing an extensive programmeof internal audits in place, frequent review by themanagement and implementation of sound policies,guidelines and procedures. The internal control isdesigned to ensure that financial and other recordsare reliable for preparing financial information andother data and for maintaining accountability of assets.

FINANCIAL PERFORMANCE WITH RESPECT TOOPERATIONAL PERFORMANCE

Management of funds is considered very importantand vital to the Company’s growth. The financialsystem takes care of the management of the funds.Senior management reviews the requirement of fundsperiodically. Operations and Finance Team monitorsthe manufacturing operations and implementationsof the projects and ensures that budgetary provisionsare strictly adhered to.

In order to ensure timely implementation of the variouscontracts bagged by the Company from time to timefrom its valued customers, large funds are requirednot only on capital expenditure account but even toimprove the liquidity for enhancing the workingcapital. Having recognized this fact, during the yearunder review your Company enhanced its productioncapacity not only by renovating the existing facilitiesbut even by installation of new Pipe Mills. To financesuch capital expenditure 2097000 equity shares ofthe Company were issued to Qualified InstitutionalBuyers pursuant to SEBI Guidelines for such QualifiedInstitutional Placement thereby directly resulting intoinfusion of Rs. 43.42 Crores in the Company. Hencethe net worth of the Company during the year underreview was augmented not only by new capitalinfusion but even by earnings retention.

MATERIAL DEVELOPMENTS IN HUMANRESOURCES/ INDUSTRIAL RELATIONS FRONT

At PSL we believe in creating an environment thatbuilds a committed workforce pursuing a shared visionof excellence.

Your company has a team of able and experiencedstaff and executives at different levels. Industrialrelations at all the company’s work and plantsremained cordial through out the year.

Performance orientation and ethics are cornerstonesof our people philosophy. Code of conduct clearlydefines our ethics for performance, behaviour at workand our relationship. During the year, the code ofconduct was communicated to all senior employees/Directors of the Company.

CAUTIONARY STATEMENT

Statement and detail in this Management discussionand analysis report describing the company’sobjectives, various activities and future plans may be“forward looking statement’ within the meaning ofapplicable laws and regulations. Actual performancemay differ substantially and materially from thoseexpress or implied.


PSL Notice 6.p65 8/29/2007, 4:22 PM29


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, 2007 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

Place : Mumbai Suresh C. Mathur

Date : 22nd June, 2007 PartnerM. No. 1276

Compliance Certificate

PSL Notice 6.p65 8/29/2007, 4:22 PM30


To

The Members of PSL Limited

We have audited the attached Balance Sheet of PSL Limited

as at March 31, 2007 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, 2007 and taken

on record by the Board of Directors, we report that

none of the directors is disqualified as on March

31, 2007 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, 2007;

(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


Place: Mumbai SURESH C. MATHUR

Date : 22nd June, 2007 Partner

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.

Auditors’ Report

PSL-31.p65 8/29/2007, 4:23 PM31


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. 31.61 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, 2007 according to the records of the

Company the following are the particulars of disputed

dues on account of Excise duty and Customs 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 25 2004-05-06 Tribunal, Ahmedabad

Excise

2 Central 221 1998-2003 Stay granted, Excise

Excise Tribunal,Ahmedabad

3 Central 11 2004-2005 Stay granted, Excise

Excise Tribunal, Ahmedabad

12 2004-2005 Stay granted, Excise

Tribunal, Ahmedabad

4 Central 207 2003-2004 Commissioner Central

Excise Excise, Vizag

5 Central 426 2005-2006 Commissioner Central

Excise Excise, Vizag

6 Central 4780 2003-2004 Tribunal Chennai, stay

Excise granted

7 Central 3057 2003-2004 Tribunal Chennai,

Excise stay granted

8 Central 0.46 2005-2006 Asst. Commissioner,

Excise Chennai

9 Central 2 2001-2002 Appellate

Excise Commissioner, Chennai

10 Central 2517 2005-2006 Tribunal Chennai,

Excise Stay granted

11 Central 13 2006-2007 Asst. Commissioner,

Excise Chennai

12 Service 168 2005-2006 Addl. Commisioner,

Tax Rajkot

52 2005-2006 Addl. Commissioner,

Rajkot


Rajkot


Rajkot

13 2005-2006 Addl. Commissioner ,

Vizag

13 Sales 43 2000-01-02 Stay granted, pending in

Tax A.P.High Court

1400 1999-2000 Gujarat Tribunal gave

absolute stay

14 Central 78 2000-2004 Decided in Company’s

Excise favour


Excise favour


Excise favour

17 Central 836 2003-04-05 Decided in Company’s

Excise favour

18 DFRC 76 2004-2005 Decided in Company’s

favour

19 Sales 2800 2001-2006 Decided in Company’s

Tax favour

Auditors’ Report

PSL-31.p65 8/29/2007, 4:23 PM32


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, banks and

debenture holders.

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

purpose for which the loans were obtained.


to us and on an overall examination of the Balance

Auditors’ Report

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 raised Rs. 2,09,70,000/- (Rupees

Two Crore Nine Lakh Seventy Thousand Only) as share

capital (premium Rs. 4138.43 Lacs) during the year

by way of preferential allotment under Qualified

Institutional Placement (QIP) .

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


Suresh C. Mathur

Place : Mumbai Partner

Date : 22nd June, 2007 Membership No.: 1276

PSL-31.p65 8/29/2007, 4:23 PM33


BALANCE SHEET AS AT 31ST MARCH 2007[Rs. in lacs]

Schedule As at As atMarch 31, 2007 March 31, 2006

SOURCE OF FUNDS

SHARE HOLDERS’ FUNDSA) Share Capital A 3,406.07 3,195.45B) Reserves & Surplus B 30,213.64 33,619.72 23,051.50 26,246.95

LOAN FUNDSA) Secured Loans C 49,890.13 51,096.40B) Unsecured Loans D 17,087.28 66,977.41 17,008.00 68,104.40

Deferred Taxation Liability 68.42 318.30

TOTAL 100,665.54 94,669.65

APPLICATION OF FUNDSFIXED ASSETS EA) Gross Block (At cost) 60,461.58 51,152.91B) Less: Depreciation 21,720.70 17,334.60

C) Net Block 38,740.88 33,818.31D) Add: Capital Work in Progress 7,433.05 46,173.93 1,461.18 35,279.49

INVESTMENTS F 5,543.08 1,142.18

CURRENT ASSETS, LOANSAND ADVANCESA) Inventories G 62,192.27 51,953.86B) Sundry Debtors H 21,732.39 41,999.84C) Cash and Bank Balances I 11,212.84 11,324.15D) Loans and Advances J 11,196.33 11,456.89

106,333.82 116,734.74

LESS : CURRENT LIABILITIES & PROVISIONS

A) Current Liabilities K 51,458.88 55,118.49B) Provisions L 5,926.41 3,368.27

57,385.29 58,486.76

NET CURRENT ASSETS 48,948.53 58,247.98

MISCELLANEOUS EXPENDITURE NIL NIL

TOTAL 100,665.54 94,669.65

NOTES TO ACCOUNTS Q

Balance Sheet

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

(SURESH C. MATHUR) M. VENKATESH G. GEHANI ALOK PUNJ ASHOK PUNJPartner Chief Finance Officer Executive Director G.S. SAUHTA M.M. MATHURM.No. 1276 & Co. Secretary D.N. SEHGAL R.K. BAHRI

K. RAMANATHAN (Camp Torranto) S.P. BHATIA C.K. GOELChief Accounts Officer Directors

Place: MumbaiDate: 22nd June, 2007

PSL-31.p65 8/29/2007, 4:23 PM34


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2007[Rs. in lacs]

Schedule For the Year Ended For the Year EndedMarch 31, 2007 March 31, 2006

INCOME M 168,561.37 156,338.22

168,561.37 156,338.22EXPENDITURERaw materials and Stores N 105,557.61 105,552.01Excise Duties and Taxes 15,502.78 10,581.06Manufacturing & Process Expenses (includes freight) 19,207.42 15,305.85Employees Remuneration & Benefits O 4,491.44 3,183.76Other Expenses P 6,016.14 6,510.00Bad Debts Written Off 424.38 276.65Interest on Term Loans & Overdrafts 4,349.77 4,852.93Depreciation 4,392.29 159,941.85 3,385.96 149,648.22

PROFIT BEFORE TAXATION 8,619.52 6,690.00Less: Provision for Taxation

Current Tax 2,573.88 1,725.51Fringe Benefit Tax 80.00 71.00Deferred Tax (249.88) 2,404.00 (25.51) 1,771.00

PROFIT AFTER TAXATION 6,215.52 4,919.00

LESS :Transfer to General Reserve 700.00 500.00Interim Dividend 797.94 733.94Proposed Dividend 801.26 757.85Tax on Proposed Dividend 136.17 106.29Tax on Interim Dividend 111.91 102.91Income Tax Earlier year 80.26 NIL

2,627.54 2,200.99

BALANCE CARRIED OVER TO BALANCE SHEET 3,587.98 2,718.02

EARNINGS PER SHARE (BASIC) Rs. 19.26 16.44(Face Value Rs.10/- each)

EARNINGS PER SHARE (DILUTED) Rs. 15.02 13.22

NOTES TO ACCOUNTS Q

Profit and Loss Account





PSL-31.p65 8/29/2007, 4:23 PM35


SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2007[Rs. in lacs]

As at As atMarch 31, 2007 March 31, 2006

SCHEDULE “A”SHARE CAPITAL

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

A. Issued & Subscribed :-3,41,98,142 EQUITY SHARES OFRS. 10/- EACH (PREVIOUS YEAR 3,21,01,142 ) 3,419.81 3,210.11(Of the above shares, 20,97,000 equity shares were issued to theQualified Institutional Buyers pursuant to SEBI guidelines issued for“Qualified Institutional Placement”)(Previous year 32101142 Equity Shares of Rs.10/- each)

B. Paid up Capital3,41,98,142 EQUITY SHARES OF RS. 10/- EACH(PREVIOUS YEAR 3,21,01,142 ) 3,419.81 3,210.11(Of the above shares, 20,97,000 equity shares were issued to the

Qualified Institutional Buyers pursuant to SEBI guidelines issued for“Qualified Institutional Placement”)

(Previous year 32101142 Equity Shares of Rs.10/- each)

LESS: ALLOTMENT MONEY IN ARREARS PERTAINING TOTHE SHARES ALLOTTED PRIOR TO MERGER. 13.74 14.66(DIRECTORS: NIL)

3,406.07 3,195.45

SCHEDULE “B”RESERVES AND SURPLUS

General ReserveA. General Reserve

As per Last Balance Sheet 2,174.25 1,674.25Add:Transfer from Profit & Loss Account 700.00 500.00Add: Transfer from Cash Subsidty NIL 2,874.25 NIL 2,174.25

B. Share PremiumAs per Last Balance Sheet 9,875.58 3,918.83Add: Additions during the year 4,138.43 7,291.49Less:Provision for Redemption Premium 1,266.78 707.62Less Expenses on FCCB Bonds NIL 627.12

12,747.23 9,875.58Less: Allotment Money in Arrears 104.35 12,642.88 106.86 9,768.72(Directors Nil)

C Investment Allowance Utilised ReserveAs per Last Balance Sheet 139.64 139.64

D Profit and Loss AccountAs per last balance sheet 10,968.89 8,250.87Add:Transfer during the year 3,587.98 14,556.87 2,718.02 10,968.89

30,213.64 23,051.50

Schedules

PSL-31.p65 8/29/2007, 4:23 PM36




SCHEDULE “C”SECURED LOANS

A Term Loan from Financial Institutions , Banks

and Non Banking Financial Institutions 10,772.46 14,923.86

[Secured against first charge on some of

the immovable & moveable assets of the Company]

B From Scheduled Banks 38,775.82 35,639.35

[Secured against hypothecation of Current Assets

and second charge on the assets as per [A] above]

C From Scheduled Banks 101.57 162.80

[Motor Vehicle Loans]

D Interest free sales tax deferred scheme

of Govt. of Tamil Nadu 240.28 370.39

[Secured against second charge on

specific assets of the company]

49,890.13 51,096.40

SCHEDULE “D”UNSECURED LOANS

Foreign Currency Convertible Bonds(Redeemable in 2010) (Unsecured) 17,087.28 17,008.00

17,087.28 17,008.00

Schedules

PSL-31.p65 8/29/2007, 4:23 PM37


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Schedules

PSL-31.p65 8/29/2007, 4:23 PM38




SCHEDULE “F”

INVESTMENTS

A UNQUOTED [FULLY PAID UP]LONG TERM INVESTMENTS

— 1330000 Equity Shares of Rs. 10/- each ofBHI LTD. (Previous year 1330000 Shares)[Company under the same Management] 133.00 133.00

— 150000 Equity Shares of Rs.10/- each ofPunj International P. Ltd. 15.00 15.00(Previous Year 150000 Equity Shares)[Company under the same Management]

— 7500 Equity Shares of Rs. 10/- each ofBroken Hills International Ltd 0.75 0.75(Previous year 7500 equity shares)[Company under the same Management]

— 2000 Equity Shares of Rs. 100/- each ofPunj Investments Pvt Ltd 2.00 2.00(Previous year 2000 equity shares)[Company under the same Management]

— 1400020 Equity Shares of Rs. 10/- Eachof PSL Corrossion ControlServices Ltd (Previous Year 1400020 )(Wholly Owned Subsidiary Company) 140.00 140.00

— 860000 Equity Shares of EurocousticProducts Ltd. of Rs. 10/- each(Previous Year 860000 Equity Shares) 86.00 86.00[Company under the same Management]

— 100000 Equity Shares of Savvy ConsultantsPvt.Ltd. of Rs. 10/- each 10.00 10.00(Previous Year 100000 Equity Shares)

— 5250000 Equity shares of Rs.10/- eachof Vishakpatnam Industrial Water Supply NIL 525.00Co. Ltd. of Rs.10/- each [Previous5250000 Equity shares]

— 11491361 Equity Shares of USD 1 /- ofPipeline Systems Ltd 5,166.13 NILMauritius (Wholly Owned Subsidiary Company)

B. OTHERS— Two National Savings Certificates of

Rs. 10000/- Each. (Previous Year 2 Nos.) 0.20 0.20— Narmada Nigam Bonds (Fixed Deposit) NIL 240.23

5,553.08 1,152.18Less: Provision for diminution in valueof Investments [Savvy Consultants Pvt.Ltd.] 10.00 5,543.08 10.00 1,142.18

SCHEDULE “G”INVENTORIES(Certified by the Management)

Raw Materials, Consumables, Semi-finishedgoods, Work-in-progress 35,759.47 44,711.84

Finished Goods 26,432.79 7,242.02

62,192.27 51,953.86

Schedules

PSL-31.p65 8/30/2007, 3:00 PM39




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

of Less Than Six Months 18,511.65 40,193.45(includes Rs. 659.74 lacs due froma 100% subsidiary company)

B. Debts outstanding for a periodof More Than Six Months 3,220.74 21,732.39 1,806.39 41,999.84

C. Debts considered doubtful (under dispute) NIL 276.65Less: Provision for doubtful debts NIL NIL 276.65 NIL

21,732.39 41,999.84

SCHEDULE “I”CASH AND BANK BALANCESA. Cash in Hand 48.08 55.35B Funds in transit 31.32 412.60C. In Current Account with

Scheduled Banks 1,779.14 2,278.18D. In Deposit Account with Scheduled Banks 9,354.30 8,578.02

(Includes Rs.2700 Lacs Under Lien to theBank for facilities availed](Previous year Rs.2465 Lacs under lien) 11,212.84 11,324.15

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

I Security Deposit 6,855.98 8,623.17(Includes Central Excise,Service Tax,VAT deposit of Rs.5314.10 Lacs)(Previous year Rs. 6995.12 Lacs)

II Advance recoverable in cash or in kind or for the valueto be received [include advances for expenses to companiesin which some directors are interested Rs.31.61 Lacs] 2,282.56 992.45[Previous year: Rs.34.41 Lacs]

III Advance Payment against taxes 2,057.78 1,841.27

11,196.33 11,456.89

SCHEDULE “K”CURRENT LIABILITIES

A. Sundry Creditors for Purchases 42,331.09 26,070.46B. Other Current Liabilities 3,706.73 4,545.88C. Mobilization Advance 5,421.05 24,502.15

51,458.88 55,118.49

SCHEDULE “L”PROVISIONS

Provision for Taxation - Current Tax 3,014.58 1,796.51Provision for redemption of FCCB 1,974.39 707.62Proposed Dividend 801.26 757.85Tax on Proposed Dividend 136.17 106.29

5,926.41 3,368.27

Schedules

PSL-31.p65 8/29/2007, 4:23 PM40


SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON MARCH 31, 2007

[Rs. in lacs]

For the Year Ended For the Year EndedMarch 31, 2007 March 31, 2006

SCHEDULE “M”SALES

Sales & Pipe Coating Receipts 158,320.60 153,905.96Other Income 2,507.96 160,828.56 1,760.79 155,666.75

Change in Finished Goods & WIP 7,732.80 671.47

168,561.37 156,338.22

SCHEDULE “N”RAW MATERIALS AND STORES

Raw Materials / Stores Consumed:Opening Stock of Raw materials 13,549.54 8,646.11Add : Purchases of Raw Materials 102,991.00 105,977.47

116,540.54 114,623.58Less: Closing Stock of Raw Materials 15,335.66 13,549.54

101,204.88 101,074.04Consumption of storesOpening stock of stores 2,206.39 1,693.76Add: Purchase of Stores 5,072.22 4,990.60

7,278.61 6,684.36Less: Closing Stock of stores 2,925.88 4,352.73 2,206.39 4,477.97

105,557.61 105,552.01

SCHEDULE “O”EMPLOYEES’ REMUNERATION & BENEFITSSalaries,Wages & Bonus 3,594.30 2,298.19Staff Welfare 498.80 436.26Contribution to Provident and other Funds 398.34 449.31

4,491.44 3,183.76

SCHEDULE “P”OTHER EXPENSESConveyance 69.39 39.70Travelling Expenses 418.90 376.45Postage, Telegram and Telephones 133.32 128.92Printing and Stationery 114.54 101.74Rent, Rates & Taxes 378.60 354.84Electricity Charges 188.38 35.83Professional Charges 415.49 274.05Repair and Maintenance (Plant ) 83.49 70.14Repair and Maintenance (Building) 46.52 55.72Repair and Maintenance (Others) 401.97 260.77Insurance 245.37 258.12Auditors’ Remnuneration 10.50 8.50Vehicle Expenses 122.12 123.96General Expenses 1,985.03 1,498.17Agency Commission 122.97 888.08Prepayment, Syndication, Processing fees to Bank 91.16 336.94Bank Charges 1,188.38 1,698.07

6,016.14 6,510.00

Schedules

PSL-31.p65 8/29/2007, 4:23 PM41


SCHEDULE “Q” - NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON MARCH 31, 2007.

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.

b. Inventories

The raw materials, stores and spare parts are valued at cost , which is arrived on FIFO basis. Work in progress, semi

finished goods and finished goods are valued at cost or at the net realisable value,whichever is 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 and location. Costs of raw materials, packing

materials and stores and spares are determined by the average method. Cost of work in process and finished goods

inventories are determined by the absorption costing method.

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. Lease hold land is being

amortised over the period of lease. Depreciation on additions to assets or on sale - discardement of assets, is

calculated pro-rata from the month of such addition or upto the month of such sale/discardment, as a case may be.

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/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 uncertinity 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 when 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.

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. 19756 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. 1417.92 Lacs netted off against interest

payment during the year. (Previous year interest income of Rs. 618.74 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 substanial expansion of existing units during the construction period is

included in the work in progress and the same is allotted to the respective Fixed Assets on the completion of the

construction.

g. Fixed Assets

i. 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 buidling, plant

and on lease hold land which increaes the future benifits from the existing assets beyond its previously assessed

standard of performance i.e. increase in capacity.

h. Foreign Currency Transactions

i. The payment and receipts in foreign currency during the period are accounted at the rates prevailing on the

date of transactions.Regarding Forward Exchange Contracts, The company has entered into forward exchange

contracts for the respective currency. The premium or discount exchange difference on such contracts is

reconginised as income or as expenditure during the year.

Schedules

PSL-31.p65 8/29/2007, 4:23 PM42


ii. All loans and deferred credits repayable in foreign currency and outstanding at the close of the year are

expressed 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 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.

iv. Exchange differences relating to Fixed Assets are adjusted in the cost of the assets.

i. Investments

i. 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 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 Benefits

i. 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 annual

contribution to such schemes are charged to Profit & Loss Account. Accrued liability upto the date of Balance

sheet is provided.

iii. Leave Encashment :The Company has provided an adhoc provision of Rs 40.00 lacs as accrued liability during

the year. The total liability provided as on date is Rs.144.50 Lacs which is subject to actuarial valuation which

is yet to be done.

k. 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.

l. Cash Flow Statement

The Cash Flow statement is prepared by the indirect method set out in Accounting Standard - 3 on Cash Flow

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 on hand and demand deposits with banks as on

the Balance Sheet date.

m. ProvisionsA provision is recognised when there is a present obligation as a result of past event, it is probable that an outflow

of resources will be required to settle the obligations and in respect of which reliable estimate can be made.

Provision is not discounted to its present value and is determined based on the best estimate required to settle the

obligation at the year end date. These are reviewed at each year end date and adjusted to reflect the best current

estimate.

n. 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’s business enterprises outside India are in the

construction stage, there are no reportable geographical segments for the year.

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

i. PSL Corrosion Control Services Ltd. : 100% Subsidiary Company

ii. Pipeline Systems Ltd., Mauritus : 100% Subsidiary Company

iii. PSL USA INC., Delaware, USA : 100% Subsidiary Company

iv. BHI Ltd.

v. Broken Hills International Ltd.

vi. Eurocoustic Products Ltd. Companies in which control exists directly / indirectly

vii Punj International Pvt. Ltd.

viii Punj Investments Ltd.

Ashok Punj : Managing Director

M. M. Mathur : Director

R. K . Bahri : Director

}

Schedules

PSL-31.p65 8/29/2007, 4:23 PM43


G. S. Sauhta : Director

D. N. Sehgal : Director

S. P. Bhatia : Director

C. K. Goel : Director

G. Gehani : Executive Director & Co. Secretary

B. Nature of Transaction (Rs. in lacs)

Particulars Key Subsidiary Companies in which control

Personnel exists directly/indirectly

1. Dividend Paid 107.50 68.35

2. Purchase of Goods Nil 0.28

3. Purchase of Capital Goods Nil Nil

4. Reimbursement of Expenses Nil 113.73

5. Lease Rental Nil 54.60

6 Remuneration 395.64 Nil Nil

p. Lease

Operating lease payments are recognized as expenditure in the profit and loss account on a straightline basis,

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 on Earning

Per Share. Basic Earnings per share is computed by dividng the net profit or loss for the year by the weighted average

number of equity shares outstanding during the year. Diluted Earnings Per Share is computed by dividing the net

profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted

for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

2006-07 2005-06

Weighted average number of shares at the beginning

and at the end of the year. Nos. 32275892 29914690

Net Profit after tax available for Equity Share holders Rs. in Lacs 6215.52 Rs. in Lacs 4919.01

Basic Earnings per share Rs. 19.26 16.44

Diluted Earnings per share Rs. 15.02 13.22

r. Management Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates

and assumptions to be made that affect the reported amounts of assests and liabilities and disclosure of contingent

liabilties on 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 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 on income.

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, using

applicable tax rates and laws. The company offsets advance payments and provisions for current tax and disclose

the net amount it intends 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

of reversal in one or more subsequent periods are recorded as a deferred tax assest or a deferred tax liability.

Deferred tax assests and liabilities are recognized for future tax consequences attrbutable to timing differences.

They are measured using the substantively 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 no longer

reasonable certain 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

with the Guidance note on Accounting for Fringe Benefit Tax issued by the ICAI regarded as an additional income

tax and considered in determination of the profits for the year. Tax on distributed profits payable in accordance with

Schedules

PSL-31.p65 8/29/2007, 4:23 PM44


the provisions of section 115-O of the Income Tax Act, 1961 is in accordance with the Guidance Note on Accounting

for Corporate Dividend Tax regarded as a tax on distribution of profit and is not considered in the determination of

profits.

2006-07 2005-06

Deferred Tax Liabilities - Depreciation Differences Rs. 71.78 Lacs Rs. 325.02 Lacs

Deferred Tax Assets - Disallowances and others Rs. 3.37 Lacs Rs. 6.73 Lacs

Net Deferred Tax Liability / (Assets) Rs. 68.41 Lacs Rs. 318.29 Lacs

t. Sundry Debtors/Loans & Advances

These have been stated after making adequate provisions for doubtful debts/advances.

u. Impairment of Assets

In the opinion the 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 is

made if it became probable that an outflow of future economic benefits will be required for an item previously dealt

with it as a contingent liability.

2006-07 2005-06

a) Counter guarantees given by the

Company for bank guarantees Rs. 29,747.30 Lacs Rs. 28,719.80 Lacs

b) Other guarantees given by the company Rs. Nil Lacs Rs. Nil Lacs

On behalf of associate & subsidiary company

c) Bills discounting Rs. Nil Lacs Rs. 742.81 Lacs

d) Estimated amount of contracts remaining to be executed

on capital account and not provided for (net of advances) Rs. 2,500.00 Lacs Rs. 2,500.00 Lacs

e) Income Tax assessments completed upto

AY 2004-05 (March’2004) No pending demand

f) Gujarat Water supply & Sewerage Board (GWSSB), a Government of Gujarat Undertaking and a regular customer

of the company has made a reference to “Gujarat Public Works Contracts Disputes Arbitration Tribunal” for

settlement of some disputes,including a claim against the Company arising out of a routine contract awarded

earlier to the Company ,the performance of which was hit by force majeure conditions.As company has since

challenged the jurisidiction of aforesaid tribunal, the matter is pending.Hence at this stage no provision has

been made in the attached accounts towards any possible liability on this account.

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

a) In Septeber 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 now convertible into fully -paid and pari passu ranking

equity shares of Rs.10 each at premium of Rs.178.00 on or any day prior to 8th August 2010.The said Bonds,

unless converted or redeemed earlier will be redeemed at 143.64 percent of their principal amount on 7th

September 2010 being the prefixed maturity date.

b) Such Bonds worth US$ 800000 have already been converted into 148742 equity Shares upto 31st March,

2007.

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

2. LICENCED AND INSTALLED CAPACITY

UNIT LICENCED & INSTALLED2006-07 2005-06

Spiral Arc Welded Pipes Mt. 1,100,000 1,100,000

Coating On Steel Pipes Mtrs. NOT APPLICABLE

Anode Mt. 1,500 1,500

Wire Mesh Sqm. 720,000 720,000

Outer Wrap Sqm. 2,500,000 2,500,000

Rebar Coating NOT APPLICABLE

Schedules

PSL-31.p65 8/29/2007, 4:23 PM45


3. PRODUCTION, OPENING AND CLOSING STOCK

PRODUCTION OPENING STOCK CLOSING STOCK

Quantity Quantity Quantity Quantity Quantity Quantity

NAME Unit 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06

1. HSAW Pipes Mt. 244,914.550 271,074.947 17,721.572 15,695.477 29,890.919 17,721.572

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

3. Anodes Kgs. 386,771.140 380,684.297 52,213.360 417,146.120 129,797.260 52,213.360

4. Wire Mesh Kgs. NIL 50,302.250 74.550 5,565.970 74.550 74.550

5. Outer Wrap Sqm. 370,688.500 872,123.260 28,448.250 17,294.500 50,227.000 28,448.250

4. SALES TURNOVER & COATING JOBS (Rs. in lacs)

2006-07 2005-06Unit Quantity Value Quantity Value

1. HSAW Pipes M.T 232,745.203 98,297.54 269,048.852 103,055.902. Coating on Steel Pipes / — 53,945.56 Jobs 45,266.30

Jobs Rebar Coating — 1,004.51 Jobs 522.72Project Equipment Divn (Daman) — 3,788.49 Jobs 3,702.90

3. Anodes Kgs. 309,187.240 621.97 745,617.057 1,015.064. Induction Bending — 0 662.76 — 343.085. Wire Mesh Kgs. — Captive consumption 55,793.670 Captive consumption

6. Outer Wrap SQM 348,909.750 Captive consumption 860,969.510 Captive consumption

158,320.83 153,905.96

5. RAW MATERIAL CONSUMPTION (Rs. in lacs)

2006-07 2005-06NAME Unit Quantity Value Quantity Value

1 H. R. Coil Mt. 257261.066 76,841.19 292523.815 81,962.08

2 Flux Mt. 840.690 391.17 1004.115 552.39

3 Filler Wire Mt. 785.918 492.53 948.517 527.49

4 M. S. Wire Mt. 51739.530 23.87 50805.290 13.85

5 Epoxy Powder Mt. 1066.165 1,658.33 638.479 903.45

6 Adhesive Mt. 825.290 775.20 900.584 498.69

7 Polyethylene Mt. 12128.665 5,327.49 8799.520 3,596.47

8 Polypropylene Mt. 1.500 1.02 1313.268 793.66

9 Inner Wrap Sqm. 993311.546 99.96 2441195.540 219.82

10 Outer Wrap Sqm. 372422.465 117.88 854763.043 282.09

11 Coal Tar Enamel Mt. 2871.564 537.80 6828.338 936.59

12 Coal Tar Tape Sqm. 92438.770 87.20 1043956.130 919.56

13 Modulate Pitch Kgs. 220564.000 45.42 4172789.000 56.40

15 Wiremesh Sqm. 1010294.131 882.09 1986077.134 1,877.77

16 Cement Mt. 22147.080 488.82 44714.895 1,099.90

17 Sand Mt. 11181.398 26.55 37681.266 95.47

18 Iron Ore Mt. 68383.385 995.66 121557.709 1,890.16

19 Aluminium Kgs. 328184.810 323.83 398781.500 386.10

20 Zinc Kgs. 14166.770 7.41 18124.035 8.43

21 Coating Materials and others 12,081.48 4,453.68

T O T A L : 101,204.88 101,074.05

22 Stores & Consumables 4,352.73 T O T A L : 4,477.97

105,557.61 105,552.02

Schedules

PSL-31.p65 8/29/2007, 4:23 PM46






[Rs. in lacs]

2006-07 2005-066. VALUE OF IMPORTS (CIF)

RAW MATERIALS 51,352.19 11,968.81STORES 927.19 2,327.13

7. EXPENDITURE IN FOREIGN CURRENCYTRAVELLING EXPENSES 90.41 75.92AGENCY COMMISSION & OTHERS 129.25 1,961.50

8. EARNING IN FOREIGN CURRENCYPIPE SALES & PIPE COATING RECEIPTS (FOB) 5,574.67 48,312.03

9. VALUE OF CONSUMPTION OF RAW MATERIALSIMPORTED 45,288.49 36,190.90INDIGENOUS 55,916.39 64,883.15

10. VALUE OF CONSUMPTION OF STORESIMPORTED 130.81 330.10INDIGENOUS 4,221.92 4,147.87

11. DIRECTORS’ REMUNERATIONSALARY, ALLOWANCES & PERQUISITES 329.34 279.88CONTRIBUTION TO P.F AND OTHER FUNDS 66.30 39.60

12. AUDITORS’ REMUNERATIONFOR STATUTORY AUDIT 7.50 6.00FOR TAX AUDIT 1.50 1.00FOR TAX MATTERS 0.50 0.50FOR OTHER SERVICES 1.50 1.50FOR OUT OF POCKET EXPENSES 0.50 0.50

13. BALANCE OF SUNDRY CREDITORS AND SUNDRY DEBTORS ARE SUBJECT TO CONFIRMATION.

14. LOANS & ADVANCES INCLUDES AMOUNT RECEIVABLE FROM COMPANIES UNDER SAME MANAGEMENT

RS. 31.61 Lacs (PREVIOUS YEAR RS.32.20 LACS)

15. THE COMPANY IS IN THE PROCESS OF IDENTIFYING THE SUPPLIERS WHO ARE SMALL SCALE INDUSTRIES &

UNDERTAKING. THE AMOUNT DUE TO THEM HAS NOT BEEN QUANTIFIED DURING THE YEAR.

16. 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.

17. SCHEDULES A TO Q FORMING AN INTEGRAL PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

ARE DULY AUTHENTICATED.

18. THE PREVIOUS YEAR FIGURES HAVE BEEN REGROUPED/REARRANGED WHEREVER NECESSARY TO CONFORM

THE CURRENT YEAR CLASSIFICATION.

Schedules

PSL-31.p65 8/29/2007, 4:23 PM47


CASH FLOW STATEMENT FOR THE PERIOD ENDED ON 31ST MARCH 2007(PURSUANT TO THE LISTING AGREEMENT WITH STOCK EXCHANGES)

[Rs. in lacs]

Particulars 2006-07 2005-06

A) CASH FLOW FROM OPERATING ACTIVITIESNET PROFIT BEFORE TAX & EXTRA-ORDINARY ITEMS 8,619.52 6,690.01ADJUSTED FORAdd : DEPRECIATION 4,386.10 3,385.96INTEREST (NET) 4,349.77 4,836.75PRELIMINARY EXPENSES WRITTEN OFFTECHNICAL KNOWHOW WRITTEN OFFLess: Bad Debts ProvisionLess: PROFIT ON SALE OF FIXED ASSETS (0.47) (85.23)Add : LOSS ON INVESTMENTSLess: DIVIDEND INCOME (210.00) (308.00)

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 17,144.92 14,519.49Changes inTRADE RECEIVABLES 20,267.45 (11,011.05)INVENTORIES (10,238.41) (6,087.54)TRADE PAYABLES (3,659.61) 9,048.57LOANS AND ADVANCES 260.56 (4,590.53)

CASH GENERATED FROM OPERATIONS 23,774.91 1,878.94

TAX PAID/PAYABLE/ADVANCE TAX (1,435.81) (1,001.50)TECHNICAL KNOW HOW FEES — —

NET CASH FROM OPERATING ACTIVITIES [A] 22,339.10 877.44B) CASH FLOW FROM INVESTING ACTIVITIES

SALE OF FIXED ASSETS 7.89 0.00PROFIT ON SALE OF ASSETS 0.47 140.20INTEREST RECEIVED 1,417.92 16.18DIVIDEND RECEIVED 210.00 308.00SALE/ (PURCHASE) OF INVESTMENTS (4,400.90) 0.00PURCHASE OF FIXED ASSETS (15,288.43) (11,204.71)

NET CASH USED IN INVESTING ACTIVITIES [B] (18,053.05) (10,740.33)C) CASH FLOW FROM FINANCING ACTIVITIES

PROCEEDS FROM ISSUE OF SHARES INCLUDING SHARE PREMIUM 4,351.55 6,977.83INTEREST PAID (5,767.69) (4,852.93)LOANS RECEIVED / REPAYMENTS (NET) (1,126.97) 3,200.22DIVIDEND PAID (1,854.25) (1,499.96)

NET CASH USED IN FINANCING ACTIVITIES [C] (4,397.36) 3,825.16

NET INCREASE / (DECREASE) IN CASH AND [A+B+C] (111.31) (6,037.73)CASH EQUIVALENTCASH AND CASH EQUIVALENT - OPENING [A] 11,324.15 17,361.88CASH AND CASH EQUIVALENT - CLOSING [B] 11,212.84 11,324.15

[B-A] (111.31) (6,037.73)

Auditors’ Certificate

We have verified the above Cash Flow Statement of PSL Limited derived from the audited financial statements for the yearended March 31, 2007 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. MathurDate : 22nd June, 2007 Partner

M. No. 1276

Cash Flow Statement


(SURESH C. MATHUR) M. VENKATESH G. GEHANI ALOK PUNJ ASHOK PUNJ

Partner Chief Finance Officer Executive Director G.S. SAUHTA M.M. MATHUR

M.No. 1276 & Co. Secretary D.N. SEHGAL R.K. BAHRI

K. RAMANATHAN (Camp Torranto) S.P. BHATIA C.K. GOEL

Chief Accounts Officer DirectorsPlace: MumbaiDate: 22nd June, 2007

PSL-31.p65 8/29/2007, 4:23 PM48


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/QIP

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.Expenses

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

3 1 - 0 3 - 0 7

N I L N I L

N I L 2 0 9 . 7 0

1 0 0 6 6 5 . 5 4 1 0 0 6 6 5 . 5 4

3 4 0 6 . 0 7 3 0 2 1 3 . 6 4

4 6 1 7 3 . 9 3 5 5 4 3 . 0 8

4 8 9 4 8 . 5 3 N I L

N I L

1 6 8 5 6 1 . 3 7 1 5 9 9 4 1 . 8 5

8 6 1 9 . 5 2 6 2 1 5 . 5 2

1 9 . 2 6 5 0 % #

4 9 8 9 0 . 1 3 1 7 0 8 7 . 2 8

3 3 1 9

3 4 5 0

3 4 5 0

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

# Subject to Shareholders’ Approval

Balance Sheet Abstract

PSL-31.p65 8/29/2007, 4:24 PM49


1 Name of the Subsidiary(s) PSL Corrosion PipelineControl Services Limited. Systems Limited

2 Financial Year of the Subsidiary 31st March, 2007 31st March, 2007Company(s) ended on

3 Financial Year of PSL Ltd. - being 31st March, 2007 31st March, 2007the Holding Company ended on

4 Shares of the Subsidiary Company(s)held by the Company on31st March, 2007a) Number 1400020 11491361b) Face Value Rs.10 per share USD 1/- per sharec) Extent of share holding in the

Subsidiary Company(s) 100% 100%

5. Profits/(Losses) of the SubsidiaryCompany(s) for its Financial year so far asit concerns the Members of PSL Limitedwhich have not been dealt with in theaccounts of PSL Limiteda) For the Financial Year of the

Subsidiary Company(s) Rs. 317.97 Lacs (Rs. 5.66 Lacs)ended on 31st March, 2007(12 months)

b) For the previous Financial Year of theSubsidiary Company(s) (12 months) Rs. 270.67 Lacs N.A.

6. The net aggregate amount of theProfits/(Losses) of the Subsidiary Company(s), so far as the profits are dealt in theaccounts of PSL Limiteda) For the Financial Year ended

on 31st March, 2007 of NIL NIL the Subsidiary Company(s)

b) For the previous Financial Year of theSubsidiary Company(s) since it became NIL NILthe Holding Company’s Subsidiary

Note(s) :(i) The amount lent by PSL Corrosion Control Services Ltd. to PSL Limited as on 31st March 2007 was Rs. Nil.(ii) The amount lent by Pipeline Systems Ltd. to PSL Limited as on 31st March 2007 was Rs. Nil.

Subsidiary Company(s) Statement

PSL LIMITED

STATEMENT UNDER SECTION 212 OF THE COMPANIES ACT 1956 RELATING TO

PSL CORROSION CONTROL SERVICES LTD. AND PIPELINE SYSTEMS LTD.

AS ON 31st MARCH, 2007





PSL-31.p65 8/29/2007, 4:24 PM50

Auditors’ ReportConsolidated Balance SheetConsolidated Profit & Loss

SchedulesConsolidated Cash Flow Statement

Cons

olid

ated

Sta

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Cons

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ated

Sta

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Cons

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Sta

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Cons

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Sta

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Cons

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PSL Consolidated-51.p65 8/29/2007, 4:25 PM51


To,

The Members of PSL Limited

We have audited the attached Consolidated BalanceSheet of PSL Limited (the company) and its subsidiariesas at 31st March, 2007 and the Consolidated Profitand Loss Account for the year then ended annexedthereto and the Consolidated Cash Flow Statementfor the year ended on that date. These financialstatements are the responsibility of the company’smanagement. Our responsibility is to express anopinion on these financial statements based on ouraudit.

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 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 and

on 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 the 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 subsidiary as at 31st March,2007;

b) In the case of the consolidated Profit and LossAccount, of the consolidated results ofoperations of the Company and its subsidiaryfor the year then ended and

c) In the case of the consolidated cash flowstatement, of the consolidated cash flows ofthe company and its subsidiary for the yearthen ended.

For Suresh C. Mathur & CompanyChartered Accountants

SURESH C. MATHURPlace : Mumbai PartnerDate : 22nd June, 2007 Membership No.: 1276

Consolidated Auditors’ Report



CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2007[Rs. in lacs]

Schedule As at As atMarch 31, 2007 March 31, 2006

SOURCE OF FUNDS

SHARE HOLDERS’ FUNDSA) Share Capital A 3,406.07 3,195.45B) Reserves & Surplus B 31,783.54 35,189.61 24,576.49 27,771.94

LOAN FUNDSA) Secured Loans C 49,890.13 51,096.40B) Unsecured Loans D 17,087.28 66,977.41 17,008.00 68,104.40Deferred Taxation Liability 68.42 321.50

TOTAL 102,235.44 96,197.84

APPLICATION OF FUNDSFIXED ASSETS EA) Gross Block (At cost) 61,187.97 51,812.52B) Less: Depreciation 22,081.90 17,637.71

C) Net Block 39,106.07 34,174.81D) Add: Capital Work in Progress 12,202.48 51,308.55 1,461.18 35,635.98

INVESTMENTS F 250.95 1,016.18CURRENT ASSETS, LOANSAND ADVANCESA) Inventories G 62,258.10 52,060.26B) Sundry Debtors H 21,570.25 42,293.92C) Cash and Bank Balances I 12,631.37 11,990.18D) Loans and Advances J 12,129.78 12,182.39

108,589.50 118,526.75LESS : CURRENT LIABILITIES

& PROVISIONSA) Current Liabilities K 51,717.14 55,343.21B) Provisions L 6,196.86 3,638.52

57,914.00 58,981.73NET CURRENT ASSETS 50,675.50 59,545.02

MISCELLANEOUS EXPENDITURE M 0.44 0.66

TOTAL 102,235.44 96,197.84NOTES TO ACCOUNTS R

Consolidated Balance Sheet







CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2007[Rs. in lacs]

Schedule For the Year Ended For the Year EndedMarch 31, 2007 March 31, 2006

INCOME N 170,455.57 158,216.84

170,455.57 158,216.84EXPENDITURERaw materials and Stores O 105,996.12 106,078.03Excise Duties and Taxes 15,651.11 10,581.06Manufacturing & Process Expenses(includes freight) 19,552.69 15,757.26Employees Remuneration & Benefits P 4,702.01 3,416.42Other Expenses Q 6,249.28 6,728.88Bad Debts Written Off 424.38 276.65Interest on Term Loans & Overdrafts 4,349.77 4,852.93Depreciation 4,450.37 161,375.75 3,443.95 151,135.19

PROFIT BEFORE TAXATION 9,079.82 7,081.67Less: Provision for Taxation

Current Tax 2,709.88 1,837.51Fringe Benefit Tax 92.00 80.00Deferred Tax (249.88) 2,552.00 (25.51) 1,892.00

PROFIT AFTER TAXATION 6,527.82 5,189.67

LESS :

Transfer to General Reserve 750.00 527.00Interim Dividend 1,007.94 943.94Proposed Dividend 801.26 757.85Tax on Proposed Dividend 136.17 106.29Tax on Interim Dividend 141.36 132.36Income Tax Earlier year 98.27 NIL

2,935.00 2,467.45

BALANCE CARRIED OVER TO BALANCE SHEET 3,592.82 2,722.23

EARNINGS PER SHARE (BASIC) Rs. 20.24 17.35(Face Value Rs.10/- each)

EARNINGS PER SHARE ( DILUTED) Rs. 15.79 13.95

NOTES TO ACCOUNTS R

Consolidated Profit and Loss Account







CONSOLIDATED SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2007[Rs. in lacs]


SCHEDULE “A”SHARE CAPITALAuthorised :100,000,000 EQUITY SHARES OF RS. 10 EACH 10,000.00 10,000.00A. Issued & Subscribed :-

3,41,98,142 EQUITY SHARES OF RS. 10/-EACH (PREVIOUS YEAR 3,21,01,142 ) 3,419.81 3,210.11(Of the above shares, 20,97,000 equity shares were issued to the

Qualified Institutional Buyers pursuant to SEBI guidelines issued for“Qualified Institutional Placement”)


B. Paid up Capital3,41,98,142 EQUITY SHARES OF RS. 10/-EACH (PREVIOUS YEAR 3,21,01,142 ) 3,419.81 3,210.11(Of the above shares, 20,97,000 equity shares were issued to the

Qualified Institutional Buyers pursuant to SEBI guidelines issued for

“Qualified Institutional Placement”)


LESS: ALLOTMENT MONEY IN ARREARS PERTAINING TOTHE SHARES ALLOTTED PRIOR TO MERGER. 13.74 14.66( DIRECTORS: NIL)

3,406.07 3,195.45

SCHEDULE “B”RESERVES AND SURPLUS

A. General ReserveAs per Last Balance Sheet 2,914.15 2,387.15Less:Investment in Subsidiary Company 12.29 12.29Add:Transfer from Profit & Loss Account 750.00 527.00Add: Transfer from Cash Subsidy NIL 3,651.86 NIL 2,901.86

B. Share PremiumAs per Last Balance Sheet 9,875.58 3,918.83Add: Additions during the year 4,138.43 7,291.49Less:Provision for Redemption Premium 1,266.78 707.62Less Expenses on FCCB Bonds NIL 627.12

12,747.23 9,875.58Less: Allotment Money in Arrears 104.35 12,642.88 106.86 9,768.72(Directors Nil)

C Investment Allowance Utilised ReserveAs per Last Balance Sheet 139.64 139.64

D Profit and Loss AccountAs per last balance sheet 11,766.28 9,044.04Add:Transfer during the year 3,592.82 15,349.16 2,722.23 11,766.27

31,783.54 24,576.49

Schedules





SCHEDULE “C”SECURED LOANS

A Term Loan from Financial Institutions , Banksand Non Banking Financial Institutions 10,772.46 14,923.86[Secured against first charge on some of theimmovable & moveable assets of the Company]

B From Scheduled Banks 38,775.82 35,639.35[Secured against hypothecation of CurrentAssets and second charge on the assetsas per [A] above]

C From Scheduled Banks 101.57 162.80[Motor Vehicle Loans]

D Interest free sales tax deferred schemeof Govt. of Tamil Nadu 240.28 370.39[Secured against second charge onspecific assets of the company]

49,890.13 51,096.40

SCHEDULE “D”UNSECURED LOANS

Foreign Currency Convertible Bonds(Redeemable in 2010) (Unsecured) 17,087.28 17,008.00

17,087.28 17,008.00

Schedules



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.65

[Rs.

in l

acs]

Schedules





SCHEDULE “F”INVESTMENTS

A. UNQUOTED [FULLY PAID UP]LONG TERM INVESTMENTS

— 1470000 Equity Shares of Rs. 10/- each ofBHI Ltd. (Previous year 1470000 Shares)[Company under the same Management] 147.00 147.00

— 150000 Equity Shares of Rs.10/- each ofPunj International P. Ltd. 15.00 15.00(Previous Year 150000 Equity Shares)[Company under the same Management]

— 7500 Equity Shares of Rs. 10/- each ofBroken Hills International Ltd 0.75 0.75(Previous year 7500 equity shares)[Company under the same Management]

— 2000 Equity Shares of Rs. 100/- each ofPunj Investments Pvt Ltd 2.00 2.00(Previous year 2000 equity shares)[Company under the same Management]

— 860000 Equity Shares of EurocousticProducts Ltd. of Rs. 10/- each(Previous Year 860000 Equity Shares) 86.00 86.00[Company under the same Management]

— 100000 Equity Shares of Savvy ConsultantsPvt.Ltd. of Rs. 10/- each 10.00 10.00(Previous Year 100000 Equity Shares)

— 5250000 Equity shares of Rs.10/- each ofVishakpatnam Industrial Water Supply NIL 525.00Co. Ltd. of Rs.10/- each[Previous 5250000 Equity shares]

B. OTHERS— Two National Savings Certificates

of Rs. 10000/- Each. (Previous Year 2 Nos.) 0.20 0.20— Narmada Nigam Bonds (Fixed Deposit) NIL 240.23

260.95 1,026.18Less: Provision for diminution in 10.00 250.95 10.00 1,016.18value of Investments [Savvy Consultants Pvt.Ltd.]of investments (Savvy Consultants Pvt. Ltd.)

SCHEDULE “G”INVENTORIES(Certified by the Management)

Raw materials, Consumables, Semi-finishedgoods, Work-in-progress 35,819.55 44,806.37

Finished Goods 26,438.54 7,253.89

62,258.10 52,060.26

Schedules





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

of Less Than Six Months 18,284.30 40,419.97B. Debts outstanding for a period

of More Than Six Months 3,285.95 21,570.25 1,873.95 42,293.92

C. Debts considered doubtful (under dispute) NIL 276.65Less: Provision for doubtful debts NIL NIL 276.65 NIL

21,570.25 42,293.92

SCHEDULE “I”CASH AND BANK BALANCESA. Cash in Hand 55.20 56.83B Funds in transit 31.32 425.10C. In Current Account with Scheduled Banks 2,551.24 2,806.05D. In Deposit Account with Scheduled Banks 9,993.61 8,702.20

(Includes Rs.2700 Lacs Under Lien tothe Bank for facilities availed](Previous year Rs.2465 Lacs under lien) 12,631.37 11,990.18

SCHEDULE “J”LOANS AND ADVANCESI Security Deposit 6,993.64 8,786.78

(Includes Central Excise,Service Tax,VAT deposit of Rs.5314.10 Lacs)(Previous year Rs. 6995.12 Lacs)

II Advance recoverable in cash or in kind or for the valueto be received [include advances for expenses to companiesin which some directors are interested Rs.31.61 Lacs] 2,957.89 1,493.85[Previous year: Rs.34.41 Lacs]

III Advance Payment against taxes 2,178.24 1,901.76

12,129.78 12,182.39

SCHEDULE “K”CURRENT LIABILITIESA. Sundry Creditors for Purchases 42,465.77 26,129.96B. Other Current Liabilities 3,788.03 4,711.10C. Mobilization Advance 5,463.33 24,502.15

51,717.14 55,343.21

Schedules



Schedules



SCHEDULE “L”PROVISIONS

Provision for Taxation - Current Tax 3,285.03 2,066.76Provision for redemption of FCCB 1,974.39 707.62Proposed Dividend 801.26 757.85Tax on Proposed Dividend 136.17 106.29

6,196.86 3,638.52

SCHEDULE “M”MISCELLANEOUS EXPENDITURE

Pre-operative ExpensesAs per Last Balance Sheet 0.66 0.88Less: Written Off during the year 0.22 0.44 0.22 0.66

0.44 0.66

CONSOLIDATED SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDEDON MARCH 31, 2007

SCHEDULE “N”SALES

Sales & Pipe Coating Receipts 159,984.79 155,607.11Other Income 2,744.08 162,728.87 1,926.39 157,533.50

Change in Finished Goods & WIP 7,726.69 683.34

170,455.57 158,216.84

SCHEDULE “O”RAW MATERIALS AND STORES

Raw Materials/Stores Consumed:

Opening Stock of Raw materials 13,584.49 8,729.15Add : Purchases of Raw Materials 103,303.99 106,279.35

116,888.48 115,008.50Less: Closing Stock of Raw Materials 15,371.17 101,517.31 13,584.49 101,424.01

Consumption of storesOpening stock of stores 2,265.97 1,722.44Add: Purchase of Stores 5,163.29 5,197.55

7,429.26 6,919.99Less: Closing Stock of stores 2,950.45 4,478.81 2,265.97 4,654.02

105,996.12 106,078.03



CONSOLIDATED SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDEDON MARCH 31, 2007

[Rs. in lacs]

For the Year Ended For the Year EndedMarch 31, 2007 March 31, 2006

SCHEDULE “P”EMPLOYEES’ REMUNERATION & BENEFITSSalaries,Wages & Bonus 3,795.70 2,520.24Staff Welfare 507.97 446.87Contribution to Provident and other Funds 398.34 449.31

4,702.01 3,416.42

SCHEDULE “Q”OTHER EXPENSESConveyance 78.29 49.52Travelling Expenses 440.46 399.52Postage, Telegram and Telephones 138.60 135.01Printing and Stationery 125.38 114.21Rent, Rates & Taxes 425.62 367.47Electricity Charges 188.99 36.55Professional Charges 415.49 274.05Repair and Maintenance (Plant ) 84.89 73.34Repair and Maintenance (Building) 52.37 56.82Repair and Maintenance (Others) 402.70 277.06Insurance 248.53 261.14Auditors’ Remnuneration 11.85 9.85Vehicle Expenses 137.48 140.02General Expenses 2,088.97 1,608.47Agency Commission 122.97 888.08Prepayment, Syndication, Processing fees to Bank 91.16 336.94Bank Charges 1,189.86 1,700.83

6,243.62 6,728.88

Schedules



SCHEDULE “R” - CONSOLIDATED NOTES FORMING PART OF THE ACCOUNT FOR THE YEAR ENDEDMARCH 31,20071. SIGNIFICANT ACCOUNTING POLICIES :

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

b. Principles of ConsolidationThe 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.

The consolidated financial statements have been prepared on the following basis :

(i) Investments in Subsidiaries :The financial statements of PSL Limited (The Company) and its Subsidiaries namely PSL CorrosionControl Services Limited and Pipeline Systems Ltd. have been combined on a line by line basisby 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 unrealizedprofits or losses.The financial statements of the subsidiaries used in the consolidation are drawn upto the samereporting date as that of the parent company i.e year ended 31st March 2007.The subsidiary companies (which along with PSL Limited, the parent, constitute the group)considered in the preparation of these consolidated financial statement is :

Name Country of incorporation % voting power heldas at 31st March 2007

PSL Corrosion Control Services Limited INDIA 100Pipeline Systems Ltd. Mauritus 100PSL USA INC. USA 100

(ii) Investment in Associates:

The Group Associates are

Name Country of incorporation % of ownership interestas at 31st March 2007

Eurocoustic Products Ltd. INDIA 48.09Broken Hills International Ltd. INDIA 22.79BHI Limited INDIA 49.66Punj International Pvt. Ltd. INDIA 37.06Punj Investments Pvt. Ltd. INDIA 14.78

These associates have not been considered for consolidation being not material to the Group.

c. InventoriesThe 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 absorptioncosting method.

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

Schedules



e. Research and Development ExpenditureRevenue 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/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 uncertinity exist as to its realisation

or collection.Sales are net of sales return and trade discounts. Rebate, claims and discounts are accounted for asand when 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 exportbill 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 19756 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.1417.92 Lacs netted off againstinterest payment during the year. (Previous year interest income of Rs. 618.74 lacs netted off againstinterest payment ) wherever applicable.

v. Dividend income on investments are accounted for when the right to receive the payment isestablished.

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 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 holdland. The company had incurred some developmental expenditure which was earlier in CWIP onfactory buidling, plant and on lease hold land which increaes the future benifits from the existingassets beyond its previously assessed standard of performance i.e. increase in capacity.

i. Foreign Currency Transactionsi. The payment and receipts in foreign currency during the period are accounted at the rates prevailing

on the date of transactions.Regarding Forward Exchange Contracts, The company has entered intoforward exchange contracts for the respective currency. The premium or discount exchange differenceon such contracts is recongnised as income or as expenditure during the year.

ii. All loans and deferred credits repayable in foreign currency and outstanding at the close of the yearare expressed in Indian currency at the appropriate rate of exchange prevailing on the date ofBalance 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 prevailingon the date 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.

j. 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 whose shares are unquoted are valued

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

Schedules



k. 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 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. Leave Encashment :The Company has provided an adhoc provision of Rs. 40.00 lacs as accruedliability during the year .The total liability provided as on date is Rs. 144.50 Lacs which is subjectto actuarial valuation which is yet to be done.

l. Borrowing CostInterest & 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 StatementThe 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 on hand and demanddeposits with banks as on the Balance Sheet date.

n. ProvisionsA provision is recognised when there is a present obligation as a result of past event, it is probable thatan outflow of resources will be required to settle the obligations and in respect of which reliable estimatecan be made. Provision is not discounted to its present value and is determined based on the bestestimate required to settle the obligation at the year end date. These are reviewed at each year end dateand adjusted to reflect the best current estimate.

o. Segment ReportingAs revenue from Sales, Internal Transfer, profits, assets from other segments are below the norms prescribedin AS-17, separate disclosures have not been made. Since the Company’s business enterprises outsideIndia are in the construction stage , there are no reportable geographical segments for the year.

p. Related Party and Key Management Personnel Disclosure

A. Name of the Party and the relationship

i. PSL Corrosion Control Services Ltd. : 100% Subsidiary Company

ii. Pipeline Systems Ltd., Mauritus : 100% Subsidiary Company

iii. PSL USA INC., Delaware , USA : 100% Subsidiary Company

iv. BHI Ltd.

v. Broken Hills International Ltd.

vi. Eurocoustic Products Ltd. Companies in which control exists directly / indirectly

vii. Punj International Pvt. Ltd.

viii. Punj Investments Ltd.

Ashok Punj : Managing Director

M. M. Mathur : Director

R. K . Bahri : Director

G. S. Sauhta : Director

D. N. Sehgal : Director

S. P. Bhatia : Director

C. K. Goel : Director

G. Gehani : Executive Director & Co. Secretary

}

Schedules



B. Nature of Transaction (Rs. in lacs)

Particulars Key Subsidiary Companies in which controlPersonnel exists directly/indirectly

1. Purchase of Goods Nil 0.0282. Purchase of Capital Goods 19.15 1.123. Reimbrusement of Expenses 136.37 206.364. Lease Rental 1.48 54.605. Remuneration 395.64 Nil Nil

q. LeaseOperating 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 onlease. Lease rentals in respect of operating lease are recognized as income over the lease period.

r. Earning Per Share

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

2006-07 2005-06

Weighted average number of shares at thebeginning and at the end of the year. Nos. 32275892 29914690

Net Profit after tax available for Equity Share holders (Rs.in Lacs) 6215.52 (Rs. In Lacs) 5189.68Basic Earnings per share Rs. 20.24 Rs. 17.35Diluted Earnings per share Rs. 15.79 Rs. 13.95

s. Management Estimates

The preparation of financial statements in conformity with generally accepted accounting principlesrequires estimates and assumptions to be made that affect the reported amounts of assests and liabilitiesand disclosure of contingent liabilties on the date of the financial statements and the reported amountsof revenues and expenses during the reporting period. Actual results could differ from these estimatesand the differences between actual results and estimates are recognised in the periods in which theresults are known / materialize.

t. Accounting for Taxes on Income

Income Taxes are accounted for in accordance with Accounting Standard 22 on Accounting for taxeson income. 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,using applicable tax rates and laws. The company offsets advance payments and provisions for currenttax and disclose the net amount it intends to settle and where it has a legally enforceable right to set offthe recognised amount.

The tax effect of the timing differences that result between taxable income and accounting income andare capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or adeferred tax liability. Deferred tax assets and liabilities are recognized for future tax consequencesattrbutable to timing differences.

They are measured using the substantively 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 isno longer reasonable certain that sufficient future taxable income will be available against which thedeferred tax assets can be realized.

Fringe Benefit Tax (FBT) payable under the provisions of section 115WC of the Income Tax Act, 1961 isin accordance with the Guidance note on Accounting for Fringe Benefit Tax issued by the ICAI regardedas an additional income tax and considered in determination of the profits for the year. Tax on distributedprofits payable in accordance with the provisions of section 115-O of the Income Tax Act, 1961 is in

Schedules



accordance with the Guidance Note on Accounting for Corporate Dividend Tax regarded as a tax ondistribution of profit and is not considered in the determination of profits.

2006-07 2005-06

Deferred Tax Liabilities - Depreciation Differences 71.78 Lac 325.02 LacDeferred Tax Assets - Disallowances and others 3.37 Lac 3.52 Lac

Net Deferred Tax Liability/(Assets) 68.41 Lac 321.50 Lac

u. Sundry Debtors/Loans & AdvancesThese have been stated after making adequate provisions for doubtful debts/advances.

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

w. Contingent LiabilitiesContingent liabilities as defined in Accounting Standard 29 are disclosed in the notes to accounts.Provisions is made if it became probable that an outflow of future economic benefits will be requiredfor an item previously dealt with it as a contingent liability.

2006-07 2005-06a) Counter guarantees given by the

Company for bank guarantees Rs.29,762.30 Lacs Rs. 28,734.80 Lacsb) Other guarantees given by the Company Rs. Nil Lacs Rs. Nil Lacs

On behalf of associate & subsidiary Companyc) Bills Discounting Rs. Nil Lacs Rs. 742.81 Lacsd) Estimated amount of contracts remaining to be

executed on capital account and not provided Rs. 2,500.00 Lacs Rs. 2,500.00 Lacsfor (net of advances)

e) Income Tax Assessments Completed Upto Ay 2004-05 (March’2004)No pending demand

f) Gujarat Water supply & Sewerage Board (GWSSB), a Government of Gujarat Undertaking and aregular customer of the company has made a reference to “Gujarat Public Works Contracts DisputesArbitration Tribunal” for settlement of some disputes, including a claim against the Company arisingout of a routine contract awarded earlier to the Company, the performance of which was hit byforce majeure conditions. As company has since challenged the jurisidiction of aforesaid tribunal,the matter is pending. Hence at this stage no provision has been made in the attached accountstowards any possible liability on this account.

x. Impact of issue of Foreign Currency Convertible Bonds (FCCB’S)

a) In Septeber 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 now convertible into fully -paid andpari passu ranking equity shares of Rs.10 each at premium of Rs.178.00 on or any day prior to 8thAugust 2010.The said Bonds, unless converted or redeemed earlier will be redeemed at 143.64percent of their principal amount on 7th September 2010 being the prefixed maturity date.

b) Such Bonds worth US$ 800000 have already been converted into 148742 equity Shares upto 31stMarch, 2007.

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

2. LICENCED AND INSTALLED CAPACITY

UNIT LICENCED & INSTALLED2006-07 2005-06

Spiral Arc Welded Pipes Mt. 1,100,000 1,100,000

Coating On Steel Pipes Mtrs. Not Applicable

Anode Mt. 1,500 1,500

Wire Mesh Sqm. 720,000 720,000

Outer Wrap Sqm. 2,500,000 2,500,000

Rebar Coating Not Applicable

Schedules



4. SALES TURNOVER & COATING JOBS (Rs. in lacs)

2006-07 2005-06

Unit Quantity Value Quantity Value

1 HSAW Pipes M.T 232,745.203 98,297.54 269,048.852 103,055.90

2. Coating on Steel Pipes / — — 53,945.56 Jobs 45,266.30Jobs Rebar Coating — — 2,668.47 Jobs 2,223.87Project Equipment Divn (Daman) — — 3,788.49 Jobs 3,702.90

3. Anodes Kgs. 309,187.240 621.97 745,617.057 1,015.06

4. Induction Bending — — 662.76 — 343.08

5. Wire Mesh Kgs. — captive consumption 55,793.670 captive consumption

6. Outer Wrap SQM 348,909.750 captive consumption 860,969.510 captive consumption

159,984.79 155,607.11

3. PRODUCTION, OPENING AND CLOSING STOCK

PRODUCTION OPENING STOCK CLOSING STOCK

Quantity Quantity Quantity Quantity Quantity QuantityName Unit 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06

1. HSAW Pipes Mt. 244,914.550 271,074.947 17,721.572 15,695.477 29,890.919 17,721.572

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

3. Anodes Kgs. 386.771.140 380,684.297 52,213.360 417,146.120 129,797,260 52,213.360

4. Wire Mesh Kgs. NIL 50,302.250 74.550 5,565.970 74,550 74.550

5. Outer Wrap Sqm. 370,688.500 872,123.260 28,448.250 17,294.500 50,227.000 28,448.250

Schedules

5. RAW MATERIAL CONSUMPTION (Rs. in lacs)

2006-07 2005-06

Name Unit Quantity Value Quantity Value

1 H. R. Coil Mt. 257261.066 76,841.19 292523.815 81,962.08

2 Flux Mt. 840.690 391.17 1004.115 552.39

3 Filler Wire Mt. 785.918 492.53 948.517 527.49

4 M. S. Wire Mt. 51739.530 23.87 50805.290 13.85

5 Epoxy Powder Mt. 1066.165 1,658.33 638.479 903.45

6 Adhesive Mt. 825.290 775.20 900.584 498.69

7 Polyethylene Mt. 12128.665 5,327.49 8799.520 3,596.47

8 Polypropylene Mt. 1.500 1.02 1313.268 793.66

9 Inner Wrap Sqm. 993311.546 99.96 2441195.540 219.82

10 Outer Wrap Sqm. 372422.465 117.88 854763.043 282.09

11 Coal Tar Enamel Mt. 2871.564 537.80 6828.338 936.59

12 Coal Tar Tape Sqm. 92438.770 87.20 1043956.130 919.56

13 Modulate Pitch Kgs. 220564.000 45.42 4172789.000 56.40

15 Wiremesh Sqm. 1010294.131 882.09 1986077.134 1,877.77

16 Cement Mt. 22147.080 488.82 44714.895 1,099.90

17 Sand Mt. 11181.398 26.55 37681.266 95.47

18 Iron Ore Mt. 68383.385 995.66 121557.709 1,890.16

19 Aluminium Kgs. 328184.810 323.83 398781.500 386.10

20 Zinc Kgs. 14166.770 7.41 18124.035 8.43

21 Coating Materials and others 12,393.91 4,803.65

T O T A L : 101,517.31 101,424.02

22 Stores & Consumables 4,478.81 T O T A L : 4,654.02

105,996.12 106,078.04



[Rs. in lacs]

2006-07 2005-06

6. VALUE OF IMPORTS (CIF)

RAW MATERIALS 51,397.29 12,090.15STORES 964.99 2,436.43

7. EXPENDITURE IN FOREIGN CURRENCY

TRAVELLING EXPENSES 90.41 79.90AGENCY COMMISSION & OTHERS 129.25 1,961.50

8. EARNING IN FOREIGN CURRENCY

PIPE SALES & PIPE COATING RECEIPTS (FOB) 5,574.67 48,312.03

9. VALUE OF CONSUMPTION OF RAW MATERIALS

IMPORTED 45,329.42 36,383.51INDIGENOUS 56,187.88 65,040.51

10. VALUE OF CONSUMPTION OF STORES

IMPORTED 206.25 435.51INDIGENOUS 4,272.56 4,218.51

Schedules

11. DIRECTORS’ REMUNERATIONSALARY, ALLOWANCES & PERQUISITES 329.34 279.88CONTRIBUTION TO P.F AND OTHER FUNDS 66.30 39.60

12. AUDITORS’ REMUNERATIONFOR STATUTORY AUDIT 8.36 6.86FOR TAX AUDIT 1.50 1.00FOR TAX MATTERS 0.50 0.50FOR OTHER SERVICES 1.99 1.99FOR OUT OF POCKET EXPENSES 0.50 0.50

13. BALANCE OF SUNDRY CREDITORS AND SUNDRY DEBTORS ARE SUBJECT TO CONFIRMATION.

14. LOANS & ADVANCES INCLUDES AMOUNT RECEIVABLE FROM COMPANIES UNDER SAME MANAGEMENTRS 31.61 Lacs (PREVIOUS YEAR RS.32.20 LACS)

15. THE COMPANY IS IN THE PROCESS OF IDENTIFYING THE SUPPLIERS WHO ARE SMALL SCALE INDUSTRIES &UNDERTAKING. THE AMOUNT DUE TO THEM HAS NOT BEEN QUANTIFIED DURING THE YEAR.

16. IN THE OPINION OF THE BOARD THE CURRENT ASSETS ARE APPROXIMATELY OF THE VALUE, IF REALISED, INTHE ORDINARY COURSE OF THE BUSINESS.

THE PROVISION FOR DEPRECIATION AND FOR ALL KNOWN LIABILITIES ARE ADEQUATE AND NOT IN EXCESSOF THE AMOUNT REASONABLY CONSIDERED NECESSARY. ALL THE INCOME ACCRUED HAS BEEN ACCOUNTEDFOR IN THE BOOKS.

17. SCHEDULES A TO R FORMING AN INTEGRAL PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNTARE DULY AUTHENTICATED.

18. THE PREVIOUS YEAR FIGURES HAVE BEEN REGROUPED/REARRANGED WHEREVER NECESSARY TO CONFORMTHE CURRENT YEAR CLASSIFICATION.






Chief Accounts Officer DirectorsPlace: MumbaiDate: 22nd June, 2007



CASH FLOW STATEMENT FOR CONSOLIDATED ACCOUNTS OF PSL LIMITEDFOR THE YEAR ENDED ON 31ST MARCH 2007

(PURSUANT TO THE LISTING AGREEMENT WITH STOCK EXCHANGES)(Rs. In lacs)

2006-07 2005-06

A) CASH FLOW FROM OPERATING ACTIVITIESNET PROFIT BEFORE TAX & EXTRA-ORDINARY ITEMS 9,079.82 7,081.68ADJUSTED FORAdd : DEPRECIATION 4,450.37 3,443.95INTEREST (NET) 4,349.77 4,836.75PRELIMINARY EXPENSES WRITTEN OFF 0.00 0.23TECHNICAL KNOWHOW WRITTEN OFF 0.00 0.00Less: BAD DEBTS PROVISION 0.00 0.00Less: PROFIT ON SALE OF FIXED ASSETS 0.47 85.23Add : LOSS ON INVESTMENTS 0.00 0.00

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 17,879.49 15,277.38Changes inTRADE RECEIVABLES 20,723.67 (11,137.21)INVENTORIES (10,197.84) (6,082.21)TRADE PAYABLES (3,626.07) 9,096.11LOANS AND ADVANCES 52.84 (4,550.93)

CASH GENERATED FROM OPERATIONS 24,832.09 2,603.14

TAX PAID/PAYABLE/ADVANCE TAX (1,692.51) (1,113.26)TECHNICAL KNOW HOW FEESNET CASH FROM OPERATING ACTIVITIES [A] 23,139.58 1,489.88

B) CASH FLOW FROM INVESTING ACTIVITIESSALE OF FIXED ASSETS 7.89 0.00PROFIT ON SALE OF ASSETS 0.47 83.08INTEREST RECEIVED 1,417.92 16.18SALE/ (PURCHASE) OF INVESTMENTS 765.23 0.00PURCHASE OF FIXED ASSETS (20,130.83) (11,148.73)

NET CASH USED IN INVESTING ACTIVITIES [B] (17,939.32) (11,049.47)C) CASH FLOW FROM FINANCING ACTIVITIES

PROCEEDS FROM ISSUE OF SHARES(INCLUDING SHARE PREMIUM) 4,349.05 6,977.83INTEREST PAID (5,767.69) (4,852.93)LOANS RECEIVED / REPAYMENTS (NET) (1,126.99) 3,200.22DIVIDEND PAID (2,013.44) (1,739.41)

NET CASH USED IN FINANCING ACTIVITIES [C] (4,559.07) 3,585.71

NET INCREASE / (DECREASE) IN CASH AND [A+B+C] 641.19 (5,973.88)CASH EQUIVALENTCASH AND CASH EQUIVALENT - OPENING [A] 11,990.18 17,964.06CASH AND CASH EQUIVALENT - CLOSING [B] 12,631.37 11,990.18

[B-A] 641.19 (5,973.88)

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, 2007 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 : 22nd June, 2007 Partner

M.No. 1276

Consolidated Cash Flow Statement

As per our report attached FOR AND ON BEHALF OF THE BOARD

For Suresh C. Mathur & Co.






Chief Accounts Officer Directors

Place: Mumbai

Date: 22nd June, 2007


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PSL CorPSL CorPSL CorPSL CorPSL Corrrrrrosion Controsion Controsion Controsion Controsion Control Services Limited’sol Services Limited’sol Services Limited’sol Services Limited’sol Services Limited’sDirectors’ ReportAuditors’ Report

Balance SheetProfit & Loss Account

SchedulesBalance Sheet Abstract

Pipeline SysPipeline SysPipeline SysPipeline SysPipeline Systems Limited’stems Limited’stems Limited’stems Limited’stems Limited’sAuditors’ Report

Consolidated Balance SheetConsolidated Profit & Loss Account

PSL CCSL-71.p65 8/30/2007, 3:03 PM71


To The Members,

The Directors have pleasure in presenting before you thisAnnual Report and audited statements of accounts of yourcompany for the Financial Year ended on 31st March, 2007.

FINANCIAL HIGHLIGHTSThe highlights of the company’s performance for the year

ended 31st March, 07 are as under: -

(Rs. In Lacs)PARTICULARS 2006-07 2005-06

Income 1900.31 186675Gross Profit beforedepreciation and interest 524.04 449.66Less: Interest — —

Profit before depreciation 524.04 449.66Less: depreciation 58.08 57.99

Profit before provision for Taxation 465.96 391.67Less: Taxation Provision

- Current Tax (Income Tax) 136.00 112.00- Current Tax (FBT) 12.00 9.00Net Profit 317.96 270.67

Appropriation AccountLess: Transfer to General Reserve 50.00 27.00Less: Interim Dividend 210.00 210.00Less: Tax on Interim Dividend 29.45 29.45Add: Refund of Income Tax 1.30 —

Balance Carried over toBalance Sheet 10.50 4.21

DIVIDENDDuring the year under review the directors declared an

Interim Dividend of Rs. 15/- per equity shares.

OPERATIONSDuring the year under review the Company continued tofocus on the overall improvement in its operations. TheDirectors are happy to inform you that your Company hadsuccessfully erected and commissioned a Bio Diesel Plantat Daman.In order to cope up with increasing demand for Company’sProduct and to continue on the path of growth by enhancingits quality and capacity, the Company has made severaldevelopmental changes to the coating plant located inDaman including modification in Epoxy Spray Pump, whichwill substantially increase the speed of online coating in 4Wheel Shot Blaster.Further the Canvas Elevator Belt was replaced with SuperHeat Resistance Belt, which is not only cheaper than theearlier Process Belt but technically a better proposition sinceit can withstand heat upto 120o C.The in house Research and Development has resulted intodeveloping new grade of Epoxy Powder, which is moreflexible and tough.

PSL CORROSION CONTROL SERVICES LIMITED

(A WHOLLY OWNED SUBSIDIARY OF PSL LIMITED)

The Company plans to further initiate cost reduction exerciseand other initiatives to improve the profitability of theCompany for the future operations.

DIRECTORATEShri Ashok Punj retires by rotation and being eligible offerhimself for reappointment at the ensuing Annual GeneralMeeting.

CONTINUATION OF WHOLLY OWNED SUBSIDIARYSTATUS OF COMPANYSince 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.

AUDITORSM/s Suresh C. Mathur & Company, Chartered Accountants,Auditors of the Company, retire at the conclusion of thisAnnual General Meeting and being eligible, offersthemselves for re-appointment.

AUDITORS’ REPORTThe 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 ANDOUTGOParticulars 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 EMPLOYEESThe Company has not paid any remuneration attracting theprovisions of Companies (Particulars of Employees) Rules,

1975 read with Section 217(2A) of the Companies Act, 1956.

DIRECTORS’ RESPONSIBILITY STATEMENTPursuant to the requirement of section 217 (2AA) of the

Companies Act, 1956 the directors hereby confirmed 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 for

Directors’ Report

PSL CCSL-71.p65 8/29/2007, 4:27 PM72


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 2006-07 2005-06

A. POWER AND FUEL CONSUMPTION1. Electricity

a) PurchasedUnits (M.KWH) 2508.497 3331.43Total Amount (Rs. Lacs) 72.10 87.77Average Rate/Unit (Rs./KWH) 2.87 2.63

b) Own GenerationThrough Diesel GeneratorUnits (M.KWH) NIL NILUnits per liter of Diesel Oil (KWH) NIL NILAverage Cost/Unit (Rs./ KWH) NIL 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 NILOutgo 82.91 179.54

For and on behalf of the Board of the Directors ofPSL CORROSION CONTROL SERVICES LIMITED

sd/- sd/-Place : Mumbai (ASHOK PUNJ) (Y.P. PUNJ)Date : 31st July, 2007 DIRECTOR DIRECTOR

maintenance of adequate accounting records and forsafeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities.

- The Annual Accounts for the financial year ended 31st

March 2007 have been prepared on a going concernbasis.

ACKNOWLEDGEMENTThe Board expresses its gratitude for the timely and valuableassistance and support received from PSL Limited, theHolding Company, its Board & Employees.

The Board also wishes to express its appreciation to

employees of the Company at all levels for their continuedco-operation and contribution to the Company.The Board also wishes to place on record their immenseappreciation for the assistance and co-operation receivedfrom various statutory authorities.

For and on behalf of the Board of the Directors ofPSL CORROSION CONTROL SERVICES LIMITED

sd/- sd/-Place : Mumbai (ASHOK PUNJ) (Y.P. PUNJ)Date : 31st July, 2007 DIRECTOR DIRECTOR

Directors’ Report

PSL CCSL-71.p65 8/29/2007, 4:27 PM73


The Members ofPSL Corrosion Control Services Ltd.

1. We have audited the attached Balance Sheet of PSLCorrosion Control Services Limited as at March 31, 2007and 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, Profit and Loss account anddealt with by this report are in agreement with thebooks of account.

iv. In our opinion, the Balance Sheet, Profit and Lossaccount dealt with by this report comply with theaccounting 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, 2007 and takenon record by the Board of Directors, we report thatnone of the directors is disqualified as on March31, 2007 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, 2007;

(b) In the case of the Profit and Loss account, ofthe profit for the year ended on that date; and


Suresh C. MathurPlace : Mumbai PartnerDate : 18th June, 2007 Membership No.: 1276

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OURREPORT OF EVEN DATE

Re: PSL Corrosion Control Services Limited

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.31.61 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.

Auditors’ Report

PSL CCSL-71.p65 8/29/2007, 4:27 PM74


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, 2007 according to the records of theCompany there is no disputed dues on account ofincome tax, wealth tax, sales tax, customs duty andexcise duty

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 2005-06 Central ExciseTribunal,Ahmedabad-stay granted.

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 moneys 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.


Suresh C. MathurPlace : Mumbai PartnerDate : 18th June, 2007 Membership No.: 1276

Auditors’ Report

PSL CCSL-71.p65 8/29/2007, 4:27 PM75


BALANCE SHEET AS AT MARCH 31, 2007

[Rs. in lacs]

Schedules As at As at

March 31, 2007 March 31, 2006

SOURCE OF FUNDS

SHAREHOLDERS’ FUNDS

A) SHARE CAPITAL A 140.00 140.00

B) GENERAL RESERVE B 1,597.79 1,737.79 1,537.29 1,677.29

C) SECURED LOANS C — —

D) DEFERRED TAX LIABILITY — 3.20

1,737.79 1,680.49

APPLICATION OF FUNDS:

FIXED ASSETS D

A) GROSS BLOCK (AT COST) 726.40 659.61

B) LESS : DEPRECIATION RESERVE 361.20 303.12

365.20 356.49

C) ADD: CAPITAL WORK IN PROGRESS — 365.20 — 356.49

INVESTMENTS E 26.29 26.29

CURRENT ASSETS, LOANS & ADVANCES

A) INVENTORIES F 65.83 106.40

B) SUNDRY DEBTORS G 487.40 294.08

C) CASH AND BANK BALANCE H 782.00 666.03

D) LOANS AND ADVANCES I 536.87 725.51

1,872.10 1,792.01

LESS: CURRENT LIABILITIES AND PROVISIONS

A) CURRENT LIABILITIES J 255.79 224.71

B) PROVISIONS K 270.45 270.25

526.24 494.97

NET CURRENT ASSETS 1,345.86 1,297.05

MISCELLANEOUS EXPENDITURE L 0.44 0.66

(TO THE EXTENT NOT WRITTEN OFF)

1,737.79 1,680.49

NOTES TO ACCOUNTS O

As per our report attached FOR AND ON BEHALF OFTHE BOARD OF DIRECTORS

For Suresh C. Mathur & Co.Chartered Accountants

Y.P. PUNJ(SURESH C. MATHUR) RUCHI SETHI ASHOK PUNJPartner Company Secretary R.K. BAHRIM. No. 1276 G.S. SAUHTA

Director(s)

Place: MumbaiDate: 18th June, 2007

Balance Sheet

PSL CCSL-71.p65 8/29/2007, 4:27 PM76


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2007

[Rs. in lacs]

Schedules For the Year Ended For the Year Ended

March 31, 2007 March 31, 2006

INCOME M 1,900.31 1,866.75

EXPENDITURE :

MANUFACTURING, ADMINISTRATIVE AND

OTHER EXPENSES N 1,376.27 1,417.09

INTEREST ON LOANS — 1,376.27 — 1,417.09

PROFIT BEFORE DEPRECIATION 524.04 449.66

DEPRECIATION 58.08 57.99

PROFIT BEFORE TAXATION 465.96 391.67

LESS :PROVISION FOR TAXATION

CURRENT TAX (INCOME TAX) 136.00 112.00

CURRENT TAX (FBT) 12.00 9.00

DEFERRED TAX — 148.00 — 121.00

PROFIT AFTER TAXATION 317.96 270.67

LESS : TRANSFER TO GENERAL RESERVE 50.00 27.00

LESS : INTERIM DIVIDEND 210.00 210.00

LESS : TAX ON INTERIM DIVIDEND 29.45 29.45

LESS : INCOME TAX PAID F.Y. 2003-2004 19.31 —

ADD: INCOME TAX REFUND EARLIER 1.30 —

BALANCE CARRIED OVER TO BALANCE SHEET 10.50 4.22

NOTES TO ACCOUNTS O



Y.P. PUNJ

(SURESH C. MATHUR) RUCHI SETHI ASHOK PUNJ

Partner Company Secretary R.K. BAHRI

M. No. 1276 G.S. SAUHTA

Director(s)


Profit and Loss Account

PSL CCSL-71.p65 8/30/2007, 3:03 PM77




SCHEDULE ‘A’

SHARE CAPITAL

Authorised2500000 EQUITY SHARES OF RS. 10/- EACH 250.00 250.00

Issued & Subscribed & PAID UP CAPITAL1400020 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 739.90 712.90ADD : TRANSFER FROM PROFIT & LOSS ACCOUNT 50.00 789.90 27.00 739.90

PROFIT & LOSS ACCOUNTAS PER LAST BALANCE SHEET 797.39 793.17ADD: TRANSFER FROM PROFIT & LOSS ACCOUNT 10.50 4.22

807.89 797.39

1,597.79 1,537.29SCHEDULE ‘C’SECURED LOANS

— —

— —

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 on01.04.2006 during the period during the period 31.03.07 01.04.06 period the period 31.03.07 31.03.07 31.03.06

PLANT & MACHINERY 324.38 22.82 347.20 179.01 20.48 199.49 147.71 145.37

FURNITURE & FIXTURES 93.55 1.13 94.67 29.34 11.63 40.97 53.70 64.20

COMPUTER 11.20 1.08 12.28 8.83 1.33 10.16 2.12 2.36

ELECTRICAL INSTALLATION 5.61 9.02 14.63 3.32 0.61 3.93 10.70 2.28

RESIDENTAL BUILDING 2.54 2.54 0.74 0.09 0.83 1.71 1.80

FACTORY SHED /BUILDING 111.44 27.08 138.53 47.29 6.54 53.83 84.70 64.15

OFFICE EQUIPMENTS 1.40 1.40 0.69 0.10 0.79 0.61 0.71

MOTOR CAR 78.77 5.20 83.96 26.84 14.00 40.84 43.12 51.93

LAB EQUIPMENTS 30.74 0.45 31.19 7.06 3.30 10.36 20.83 23.68

659.61 66.77 - 726.40 303.12 58.08 - 361.20 365.20 356.49

Capital Work In Progress 53.06 53.06 - -

( Bio Diesel )

Total 659.61 119.83 53.06 726.40 303.12 58.08 - 361.20 365.20 356.49

PREVIOUS YEAR 715.59 67.92 123.90 659.61 302.25 57.99 57.12 303.12 356.49 413.34

Schedules

PSL CCSL-71.p65 8/29/2007, 4:27 PM78


SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2007

[Rs. in lacs]

As at As at

March 31, 2007 March 31, 2006

SCHEDULE ‘E’

INVESTMENTS (LONG TERM INVESTMENTS)

TRADE

A. (AT COST UNQUOTED)

BHI LIMITED

140000 EQUITY SHARES OF RS.10/- EACH 14.00 14.00

B. (AT COST QUOTED)

2150000 EQUITY SHARES OF PSL LTD 12.29 12.29

(MV @ RS. 196.45/- PER SHARE)

26.29 26.29

SCHEDULE ‘F’

INVENTORIES (AT COST)

(VALUED AT COST OR MARKET PRICE WHICHEVER IS LOWER)

RAW MATERIALS 35.51 34.95

CONSUMABLE 24.57 59.58

FINISHED GOODS 5.75 11.87

65.83 106.40

SCHEDULE ‘G’

SUNDRY DEBTORS

(UNSECURED BUT CONSIDERED GOOD)

DEBTS OUTSTANDING FOR A PERIOD

LESS THAN SIX MONTHS 422.19 226.52

MORE THAN SIX MONTHS 65.21 487.40 67.56 294.08

487.40 294.08

SCHEDULE ‘H’

CASH AND BANK BALANCES

CASH IN HAND 6.20 1.48

SCHEDULED BANKS IN CURRENT ACCOUNT 136.49 527.87

IN DEPOSIT ACCOUNT WITH SCHEDULED BANK 639.31 124.18

DD IN TRANSIT — 12.50

782.00 666.03

Schedules

PSL CCSL-71.p65 8/30/2007, 3:04 PM79




SCHEDULE ‘I’LOANS AND ADVANCES(UNSECURED, BUT CONSIDERED GOOD)

SECURITY DEPOSIT 38.37 16.52

ADVANCES RECOVERABLE IN CASH OR IN KIND ORFOR VALUE TO BE RECEIVED . 195.43 218.69PSL LIMITED ( HOLDING CO.) — 109.77

TAX DEDUCTED AT SOURCE 13.24 13.24TAX DEDUCTED AT SOURCE (2001-2002) 2.97 2.97TAX DEDUCTED AT SOURCE (2002-2003) — 19.78TAX DEDUCTED AT SOURCE (2003-2004) — 12.04TAX DEDUCTED AT SOURCE (2004-2005) — 16.31TAX DEDUCTED AT SOURCE (2005-2006) 14.65 13.90TAX DEDUCTED AT SOURCE (2006-2007) 18.15 —TDS ON DIVIDEND — 11.94ADVANCE TAX - 2003-2004 — 96.00ADVANCE TAX - 2005-2006 107.22 47.25ADVANCE PAID TO SUPPLIER 47.55 —EXCISE DUTY RECEIVABLE ACCOUNT 99.29 147.09

536.87 725.51

SCHEDULE ‘J’CURRENT LIABILITIES

SUNDRY CREDITORS (FOR GOODS) 132.21 59.50ADVANCE FROM PARTIES/CLIENTS 42.28 —OTHERS 81.30 165.22

255.79 224.72

SCHEDULE ‘K’PROVISIONSPROVISION FOR TAXATION 270.45 270.25PROPOSED DIVIDEND 0.00 0.00TAX ON PROPOSED DIVIDEND 0.00 0.00

270.45 270.25

SCHEDULE ‘L’MISCELLANEOUS EXPENDITURE

PRELIMINARY EXPENSES — 0.00AS PER LAST BALANCE SHEETLESS : WRITTEN OFF DURING THE PERIOD — — 0.00 —

PRE-OPERATIVE EXPENSES 0.66 0.88LESS : WRITTEN OFF DURING THE PERIOD 0.22 0.44 0.22 0.66

0.44 0.66

SCHEDULE ‘M’INCOME :a) SALES/JOB RECEIPT (Including Service Tax) 1,664.19 1,701.15b) OTHER INCOME 236.15 165.60

1,900.31 1,866.75

Schedules

PSL CCSL-71.p65 8/29/2007, 4:27 PM80


SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON MARCH 31, 2007

[Rs. in lacs]For the Year Ended For the Year Ended

March 31, 2007 March 31, 2006SCHEDULE ‘N’MANUFACTURING, ADMINISTRATIVE AND OTHER EXPENSES

RAW MATERIALS CONSUMEDOPENING STOCK 34.95 83.04ADD : PURCHASES 312.99 301.88LESS : CLOSING STOCK 35.51 312.43 34.95 349.97

CONSUMABLES CONSUMEDOPENING STOCK 59.58 28.68ADD :PURCHASES 91.07 206.95LESS: CLOSING STOCK 24.57 126.08 59.58 176.05

EMPLOYEE’S EMOLUMENTS AND BENEFITSSALARIES AND ALLOWANCES 201.40 222.05STAFF WELFARE 9.17 210.57 10.61 232.66

OTHER EXPENSESADVERTISEMENT EXPENSES 2.28 3.87ELECTRICITY CHARGES 0.61 0.72TRANSPORTATION CHRG. OF BARS 162.40 147.58OCTROI CHARGES 110.30 104.80LEASE RENT 5.11 9.20POSTAGE, TELEGRAM & TELEPHONE EXP. 5.28 6.09POWER & FUEL 72.10 87.77SALES PROMOTIONS 52.54 56.74RENT, RATES & TAXES 41.91 3.43REPAIRS & MAINTENANCE - BUILDING 5.85 1.10REPAIRS & MAINTENANCE - OTHERS 0.73 16.29REPAIRS & MAINTENANCE - PLANT & M/C 1.40 3.20MOTOR VEHICLE EXPENSES 15.36 16.06TRAVELLING EXPENSES 21.56 23.07CONVEYANCE EXPENSES 8.90 9.82PRINTING & STATIONARY EXPENSES 10.84 12.47BAR STRAIGHTENING CHARGES 0.47 0.85INSURANCE CHARGES 3.16 3.02AUDIT FEES 1.35 1.35BANK CHARGES 1.48 2.76SERVICE TAX ON COATING & EDU.CESS 148.33 110.41MISCELLANEOUS EXPENSES 49.12 721.08 49.68 670.27

VARIATION IN STOCKS OF FINISHED GOODSCLOSING STOCK (INCREASE IN STOCK) 6.11 6.11 (11.87) (11.87)

1,376.27 1,417.09

Schedules

PSL CCSL-71.p65 8/29/2007, 4:27 PM81


Schedules

PSL CORROSION CONTROL SERVICES LIMITED DETAILS OF MISCELLANEOUS EXPENSES FORMING PARTOF SCHEDULE ‘N’

For the year Ended [Rs. in lacs]Particulars March 31, 2007 March 31, 2006SCHEDULE ‘N’

MEMBER & SUBSCRIPTION FEES 0.70 1.72GENERAL EXPENSES 14.23 12.69LABORATORY EXPENSES 1.28 0.40NEW PAPER BOOKS & PERIODICALS 0.76 1.14COMMISSION TO CONTRACTORS 0.56 1.02CONSULTANCY CHARGES 11.31 8.37PAINTING CHARGES OF BARS AT SITE 1.39 5.53SHORT RECOVERIES & DISCOUNT 3.03 3.56OFFICE EXPENSES 0.23 0.69OTHER ALLOWANCE 6.64 6.53SERVICE TAX ON GOODS TRPT 2.98 2.89GUEST HOUSE EXP. 0.28 0.26SEMINAR/SPONSERSHIP EXP 4.71 1.57LEGAL EXPENSES 0.01 0.31UNLOADING/LOADING EXP. 0.76 1.46PRE-OPERATIVE EXP. WRITTEN OFF 0.22 0.22PROFESSIONAL TAX 0.03 0.03PRELIMINARY EXPENSES WRITTEN OFF — 0.00LOSS ON SALES OF ASSETS — 0.44CST/LST PAID ( F.Y. 02-03,03-04,04-05) — 0.85

49.12 49.68

PSL CCSL-71.p65 8/29/2007, 4:27 PM82


SCHEDULE ‘O’NOTE FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2007.

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.

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

REVENUE INCOME IS RECOGNISED ON ACCRUAL BASIS EXCEPT WHERE MENTIONED OTHERWISE, IN PARTICULAR:

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.

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 CHARGES TO THE PROFIT & LOSS ACCOUNT AS INCURRED.

II. LEAVE ENCASHMENT :THE COMPANY HAS PROVIDED RS. 0.86 LACS AS ACCRUED LIABILITY DURING THE

YEAR. THE TOTAL LIABILITY PROVIDED AS ON DATE IS RS. 5.68 LACS WHICH IS 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 PERSONNEL 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

Schedules

PSL CCSL-71.p65 8/29/2007, 4:27 PM83


Schedules

B. NATURE OF TRANSACTION

(AMOUNT IN RS.)

PARTICULARS KEY COMPANIES IN WHICH CONTROL

PERSONNEL EXISTS DIRECTLY / INDIRECTLY

1. DIVIDEND 21000300 NIL

2. PURCHASE OF CAPITAL GOODS 1915139 112564

3. REIMBURSEMENT OF EXPENSES 13637271 9263586

4. LEASE RENT 148800 NIL

M. EARNING PER SHARE

2006-07 2005-2006

NO OF SHARES BEGINNING AND AT THE END OF THE YEAR 1400020 1400020

NET PROFITS AFTER TAX AVAILABLE FOR EQUITY SHARE HOLDERS (IN LACS) 317.97 270.67

EARNING PER SHARE (IN RS) 22.71 19.33

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 THEPROVISIONS 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 ASSETIS 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 DISCLOSERS

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.

P. ACCOUNTING FOR TAX ON INCOME 2006-07 2005-2006

(RS. IN LACS) (RS. IN LACS)

DEFERRED TAX LIABILITIES - DEPRECIATION DIFFERENCES NIL NI

DEFERRED TAX ASSETS - DEPRECIATION DIFFERENCES 5.85 6.54

NET DEFERRED TAX LIABILITY / (ASSETS) 5.85 6.54

Q. CONTINGENT LIABILITIES

CONTINGENT LIABILITIES ARE DISCLOSED IN THE ACCOUNTS BY WAY OF NOTES GIVING THE NATURE AND

QUANTUM OF SUCH LIABILITIES.

2006-07 2005-2006


R. GUARANTEES GIVEN BY THE BANK 15.00 15.00

GUARANTEE GIVEN AGAINST THE PROCURMENT OF THE LOAN FROM IFC BUT THE LOAN IS NOT YET RECEIVED

BY THE HOLDING CO.

2006-07 2005-2006


2 EARNING IN FOREIGN CURRENCY NIL NIL

3 EXPENDITURE IN FOREIGN CURRENCY

A] RAW MATERIALS (F.O.R.) 45.10 121.34

B] SPARE PARTS/CONSUMABLE 37.80 109.30

C] TRAVELLING EXPENSES NIL 3.98

PSL CCSL-71.p65 8/29/2007, 4:27 PM84


Schedules

4 VALUE OF CONSUMPTION OF RAW MATERIAL

IMPORTED 40.93 192.61

INDEGENOUS 271.49 157.36

VALUE OF CONSUMPTION OF CONSUMABLE

IMPORTED 75.44 105.41

INDEGENOUS 50.64 70.64

438.51 526.02

5 AUDITOR’S REMUNERATION

1. AUDIT FEES 0.86 0.86

2. OTHER CAPACITY 0.49 0.49

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 PROVISIONFOR DEPRECIATION AND FOR ALL KNOWN LIABILITIES ARE

ADEQUATE AND NOT IN EXCESS OF THE AMOUNT REASONABLY COSIDERED NECESSARY. ALL THE INCOME

ACCRUED HAS BEEN ACCOUNTED FOR IN THE BOOKS.

9 SCHEDULE TO 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. PUNJ

(SURESH C. MATHUR) RUCHI SETHI ASHOK PUNJ

Partner Company Secretary R.K. BAHRI

M. No. 1276 G.S. SAUHTA

Director(s)


PSL CCSL-71.p65 8/29/2007, 4:27 PM85


EPOXY RESIN & EPOXY POWDER FORANTI-CORROSIVE TREATMENT

5 5 - 5 4 2 5 0 5 5

3 1 - 0 3 - 0 7

N I L N I L

N I L N I L

1 7 3 7 . 7 9 1 7 3 7 . 7 9

1 4 0 . 0 0 1 5 9 7 . 7 9

2 6 . 2 9

1 3 4 5 . 8 6 0 . 4 4

N I L

1 9 0 0 . 3 1 1 4 3 4 . 3 5

4 6 5 . 9 6 3 1 7 . 9 6

2 2 . 7 1 1 5 . 0 0

N I L N I L

Balance Sheet Abstract

3 6 5 . 2 0

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 :

3 4 5 0

3 4 5 0

PSL CCSL-71.p65 8/29/2007, 4:27 PM86


To the members of PIPELINE SYSTEMS LTD.

1. We have audited the attached Consolidated BalanceSheet of PIPELINES SYSTEMS LTD.and it’s subsidiariesas at 31st March 2007 , and the Consolidated Profit andLoss Account for the year then ended, both annexedthereto. These financial statements are the responsibilityof the Company’s management and have been preparedby the management on the basis of separate financialstatements and other financial information regardingcomponents. Our responsibility is to express an opinionon these financial statements based on our audit.

2. We conducted our audit in accordance with generallyaccepted auditing standards in India. These Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatements. 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 financialstatements presentation. We believe that our auditprovides a reasonable basis for our opinion

3. We did not audit the financial statements of thesubsidiary of PIPELINE SYSTEMS LTD, Mauritius calledPSL FZE, Sharjah. The financial statements of thissubsidiary (PSL FZE) reflect gross total assets ofRs.1343.54 Lacs as at 31st March 2007,total revenue ofRs NIL and Cash Flow of Rs.1343.54 lacs for the year

then ended. This financial statements and other financialinformation have been audited by other auditors whosereport/returns have been furnished to us, and our opinioninsofar as it relates to the amounts included in respectof this subsidiary is based solely on the report of theother auditors.

4. On the basis of the information and explanation givento us and on the consideration of the separate audit reporton individual financial statements and on the otherfinancial information of the components of PSL FZE, weare of the opinion that the attached consolidatedfinancial statements give a true and fair view inconformity with the accounting principles generallyaccepted in India;

a) in the case of the Consolidated Balance Sheet, ofthe consolidated statement of affairs of PIPELINESYSTEMS LTD and its subsidiaries as at 31st March2007; and

b) In the case of Consolidated Profit and Loss Account,of the consolidated results of operations of PIPELINESYSTEMS LTD. and its subsidiaries for the year thenended.


Place: Mumbai SURESH C. MATHUR

Date : 22nd June, 2007 PartnerMembership No.1276

Auditors’ Report

Pipeline 87.p65 8/29/2007, 4:28 PM87


CONSOLIDATED BALANCE SHEET OF PIPELINE SYSTEMS LTD. AS AT 31 MARCH, 2007

2007 2007(Amount in USD) (Amount in INR)

ASSETS

Fixed Assets

Capital Work in Progress 10,941,586 476,943,733

Current assets

Prepayments 1,879 81,906

Loans & Advances 210,893 9,192,826

Cash at bank 1,458,150 63,560,759

Cash in hand 2,098 91,452

Pre operative Expenses 349,741 15,245,210

Total assets 12,964,347 565,115,886

EQUITY AND LIABILITIES

Capital and reserves

Share capital 11,491,361 500,908,426

Retained earnings (22,798) (993,765)

11,468,563 499,914,661

Current liabilities

Accruals

Amount due to holding company 5,660 246,719

1,490,124 64,954,505

Total equity and liabilities 12,964,347 565,115,886

Balance Sheet



ASHOK PUNJ

(SURESH C. MATHUR) RAJHAV PUNJ

Partner

M. No. 1276

Director(s)


Pipeline 87.p65 8/29/2007, 4:28 PM88


CONSOLIDATED PROFIT & LOSS ACCOUNT OF PIPELINE SYSTEMS LTD.FOR THE YEAR ENDED 31ST MARCH, 2007

2007 2007(Amount in USD) (Amount in INR)

INCOME NIL NIL

EXPENSES

Administrative expenses 8,620 375,746

Audit fee 1,610 70,180

Bank charges 1,435 62,552

Director fee 625 27,244

Secretarial fee 312 13,600

Agent fee 312 13,600

Licence fee 56 2,441

Registration fee 16 697

12,986 566,060

NET LOSS FOR THE YEAR (12,986) (566,060)

Profit & Loss Account



ASHOK PUNJ

(SURESH C. MATHUR) RAJHAV PUNJ

Partner

M. No. 1276

Director(s)


Pipeline 87.p65 8/29/2007, 4:28 PM89

Dear Member,

Subject:: Electronic Clearing Service (ECS) / Bank Particulars for Payment of Dividend

As you may be aware, for last few years our Company has extended ECS facility to our members by which theycan receive their dividend directly in their bank account through electronic clearing.

The benefits of ECS is that, it provides protection against fraudulent interception and encashment of dividendwarrants or damage of dividend warrants in transit or problem of revalidation/ issuance of duplicate dividendwarrants and there is no extra cost.

We wish to further inform you that SEBI has also mandated the Companies, the use of ECS facility for distributingthe dividend and other cash benefits to the investors and only in the absence of availability of ECS facility, theCompany may use warrants for disbursing dividend and other cash benefits. Further the Bank particulars haveto be printed on the warrants to obviate any fraudulent encashment and interception in postal transit.

You are, therefore, requested to follow the procedure given below: -

I. For shares held in “Physical Form”

In order to avail the ECS facility, we request you to provide us the requisite details on the form givenoverleaf and submit the same to the Company’s Registrar and Share Transfer Agents namely M/s. KarvyComputershare Pvt. Ltd., 17 - 24, Vittal Rao Nagar, Madhapur, Hyderabad – 500081, before the dividendfor the current Financial Year is paid to you. The information should be accurate and complete in allrespects and in order to prevent any incorrect particulars being entered, we request you to enclosephotocopy of a cheque for verifying the accuracy of MICR Code No. and other particulars.

II. For shares held in “Dematerialized Form”

Please note that as per the Stock Exchange directions, the Company will have to take note of the ECS orBank Account details furnished only by the Depositories, whenever such information is available. Youare therefore requested to provide such information only to your Depository Participant (DP), in casethe shares are held in demat form.

We recommend and request you to avail of the ECS facility and in the alternative provide complete bankparticulars for printing on the Dividend Warrant.

Assuring of our best services,

Thanking you,

Yours faithfully,For PSL Limited

Sd/-(G. Gehani)Director & Company Secretary

PSL LimitedRegistered Office :: Kachigam, Daman – 396 210

U. T. of Daman & Diu

31st July, 2007

ECS Mandate Form 90-91.p65 8/30/2007, 3:04 PM90

Date :To,Karvy Computershare Pvt. Ltd.,Unit :: PSL Limited17-24, Vittal Rao Nagar,Madhapur,Hyderabad – 500081.

Dear Sir, Sub : Payment of Dividend (Electronic Clearing Service / Bank Particulars)

OPTION - I

* I wish to participate in the Electronic Clearing Services and give below the details of my Bank Account, towhich you may electronically credit the payment due to me against the reference folio number mentionedbelow: -

1. Name of the Soleholder or First holder (in Block Letters)

2. Regd. Folio No.

3. Name of my Bank

4. Branch Name & its Address

5. My Account Number with said Bank

6. My Ledger Folio Number

7. Account Type : (Saving bank a/c, current A/c or Cash Credit A/c.)

8. 9 Digit code number of the bank & branch appearing on the MICRcheque issued by the Bank.(A photocopy for the accuracy of the MICR code number is attached)

OPTION - II

* I do not wish to opt for ECS facility and therefore request the following Bank Details to be incorporated on thedividend warrant: -

Bank Name

Branch Name & Address

A/c Type (SB/ Current/ Cash Credit)

A/c Number (as mentioned in cheque book)

(* Strike out the Option not applicable)

I hereby declare that the particulars given above are correct and complete. I undertake to inform any subsequentchanges in the above particulars to you instantly. If the ECS payment transaction is delayed or not effected forany reasons I would not hold the Company responsible.

______________________________________Signature of the Sole Holder or First Holder

Name & Address_______________________________

_______________________________

________________________________

Contact No. ________________________________

Note: In case of shares held in demat form, the above particulars for ECS facility / Bank Particulars have to beprovided to your Depository Participant (DP), quoting your Client ID No. to them

ECS Mandate Form�

ECS Mandate Form 90-91.p65 8/29/2007, 4:28 PM91

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 19th Annual General Meeting of the Company on Thursday, 27th day of

September, 2007 at 9.30 a.m. at “Cidade De Daman”, Devka Beach, Nani Daman-396 210 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 19th Annual General Meeting of the Company

to be held on Thursday, the 27th day of September, 2007 at 9.30 a.m. and at any adjournment thereof.

Signed this _____________ day of _________________ 2007

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

�

Proxy new.p65 8/29/2007, 4:29 PM89

PSL-1-5 · Profit Before Tax Rs. 86.20 Crs. (US $ 19.97 Million) Profit After Tax Rs. 62.16 Crs....

Documents

Transcript of PSL-1-5 · Profit Before Tax Rs. 86.20 Crs. (US $ 19.97 Million) Profit After Tax Rs. 62.16 Crs....