MIRA INFORM REPORT

Report Date :

24.11.2008

IDENTIFICATION DETAILS

Name :	PSL LIMITED
Formerly Known As :	PSL HOLDINGS LIMITED
Registered Office :	Kachigam, Daman, Union Territory of Daman and Diu – 396 210
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	24.08.1987
Com. Reg. No.:	2395
CIN No.: [Company Identification No.]	L67120DD1987PLC002395
TAN No.: [Tax Deduction & Collection Account No.]	SRTP01477A
PAN No.: [Permanent Account No.]	AAACP2734K
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturer of Line Pipe for Oil and Gas Pipe Lines, Non-Galvanised Corrosion coating, Cranes Designated for Mounting on road vehicles, Epoxy Powder for Anti-Corrosion Treatment.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 28270000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well – established company having fine track. Trade relations are fair. Financial position is good. Payments are usually correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office and Pipe Mill :	Kachigam, Daman, P. O. Box No. 25, (Union Territory) – 396 210, India
Tel. No.:	91-260-2242989 / 2252248 / 2244496
Fax No.:	91-260-2241932
E-Mail :	ggehani@gmail.com
Website :	http://www.pslholding.com http://www.psllimited.com
Corporate Office :	PSL Towers, 615, Makwana Road, Marol, Andheri ( East), Mumbai - 400 059
Tel. No.:	91-22- 66447777
Fax No.:	91-22- 66447700/66447711
Corporate Office :	386, Veer Savarkar Marg, Prabhadevi, Mumbai – 400 025, Maharashtra, India
Tel. No.:	91-22-24307023 / 24306476
Fax No.:	91-22-24307365
Marketing offices :	Located at: “PSL House”, B-96, Greater Kailash-I, New Delhi – 110 048, India Meridian House, 8/2, Montieth Lane, Egmore, Chennai - 600008, Tamilnadu
Legal and Secretarial office:	3^rd Floor, 'Punj House', M-13A, Connaught Circus, New Delhi - 110001
Plant Sites:	Pipe mills and pipe coating plants Kachigam, Daman – 396 210, Union Territory of Daman and Diu Survey No. 35/ and 37, Varsana, Anjar, District - Kutch, Gujarat Village Nani Chirai, Taluka Bhachau District - Kutch, Gujarat Kandla Road, Gandhidham, District - Kutch, Gujarat No. 22, Vaiyavur, Taluka Maduranthakam, District - Chengai MGR, Tamilnadu Industrial Development Area, Gurrampalam, Near Pendurthi, Vishakhapatna, Andhra Pradesh Survey No. 38/1,38/2,39,40 & 42, Varsana, Anjar, Kutch, Gujarat Plot No.4 and 5, Sector 12/B, Kandla Road, Gandhidham, Kutch, Gujarat Survey No. 207, Industrial Development Area Gurrampalem, Pendurthi, Survey No.124, Khadat, Pilwai, Towards Mahudi Road, Taluka – Mansa, Distt. Gandhi Nagar, Gujarat Other plants REBAR COATING DIVISIONS Ø No. 22, Vaiyavur, Taluka Maduranthakam, Distt. Chengai MGR, Tamilnadu Ø Industrial Development Area, Gurrampalam, Near Pendurthi, Vishakhapatna, Andhra Pradesh ANODES AND PIPE BENDS DIVISION Ø Plot No. 4 and 5 Sector 12/B, Kandla Road, Gandhidham, Distt. Kutch, Gujarat
Branches :	Located at : Chennai New Delhi

DIRECTORS

Name :	Mr. Y. P. Punj
Designation :	Chairman
Name :	Mr. Ashok Punj
Designation :	Managing Director
Address :	Lfoyd Insulations (India) Private Limited - Joint Managing Director
Qualification :	M. S. Engineering (I. I. T.) USA
Date of Appointment :	24/08/1987
Name :	Mr. Alok Punj
Designation :	Director
Date of Birth/Age :	29.05.1950
Qualification :	B.E. (Industrial Engineering)
Expertise in specific functional area :	General Management
Directorship held in other companies :	- Eurocoustic Products Limited - Punj Investments Private Limited - Broken Hills International Private Limited - BHI Limited - Punj International Private Limited - Sai Shakti Properties Private Limited
Brief Resume :	Mr. Alok Punj, who attended a Bachelor of Engineering Programme in Industrial Engineering at Illinois Institute of Technology, Chicago has over three decades of experience in senior positions in different Engineering Companies of the world and also has experience in International Marketing and Projects, both in the Middle East and Far East. Having guided different companies as a Senior Management Personnel, the Company is now being benefited by his being there on Company’s Board and even on few important Committees of Board such as Audit Committee, Committee of Directors, Remuneration Committee, Shareholders’/ Investors’ Grievance Committee, Bond Conversion Committee etc.
Name :	Mr. M.M. Mathur
Designation :	Director
Date of Birth/Age :	11.09.1936
Qualification :	M.A. and diploma in Management
Expertise in specific functional area :	General Management and Marketing
Brief Resume :	Mr. M.M. Mathur after completing his Graduation in Science obtained a Masters Degree in English in addition to a Diploma in Management. Mr. Mathur’s association with the Group now stretches to about four decades during which he has held various Senior positions. Most of Mr. Mathur’ experience is in the Energy Sector as Service provider in oil and gas transmission of pipelines; onshore and offshore in areas of Internal and External Coatings and Cathodic Protection System. Mr. Mathur is a member of several International Associations viz; National Association of Pipeline Applicators, U.S.A. Indo-German Chamber of Commerce etc.
Name :	Mr. G. S. Sauhta
Designation :	Whole Time Director
Qualification :	DME
Date of Appointment :	01.04.1993
Name :	Mr. R. K. Bahri
Designation :	Whole Time Director
Qualification :	B.E. Mech.
Date of Appointment :	01.06.1994
Name :	Mr. D. N. Sehgal
Designation :	Director
Name :	Mr. Prakash Vinayak Apte
Designation :	Director
Date of Birth/Age :	17.08.1943
Qualification :	B. Com , FCA
Expertise in specific functional area :	Finance, Banking and Accounts
Directorship held in other companies :	- Arohan Trustee Company Private Limited - Calcutta Promotions Private Limited
Brief Resume :	Mr. Prakash Vinayak Apte, after completing Chartered Accountancy Programme from England in November 1968 worked with many leading Accounting Firms in England up to 1975. Subsequently, after a short spell with Maharashtra Electrosmelt Limited, Mr. Apte joined Hongkong and Shanghai Banking Corporation Limited (HSBC) and worked in various senior positions both within and outside the country for 23 long years. Keeping in view of his vast experience in the field of Banking, Company’s Board of Directors appointed him as Additional Director with effect from March 2003, which appointment was later confirmed by the shareholders as they passed a unanimous Resolution in their meeting held on 25th September, 2003. On his retirement by rotation he was re-appointed as Director in the Annual General Meeting held on 31st August,2006. Since his first appointment Mr. Apte has been rendering valuable service to the Company by way of being not only on Company’s Board, but even on few important Committees of Board such as Audit Committee, Remuneration Committee etc.
Name :	Mr. N. C. Sharma
Designation :	Director
Date of Birth/Age :	26.11.1942
Qualification :	M.A. English Litt.
Expertise in specific functional area :	Financial Management
Directorship held in other companies :	- Mukund Limited
Brief Resume :	Mr. N. C. Sharma is an eminent Insurance Expert having successfully held various senior positions in LIC of India where he rose to the position of its “Managing Director”. It is only after his retirement from LIC after serving for more than four decades that Mr. Sharma joined Company’s Board as Additional Director with effect from July, 2003 which appointment was later confirmed by the shareholders as they passed a unanimous Resolution in their meeting held on 25th September, 2003. On his retirement by rotation he was reappointed as Director in the Annual General Meeting held on 31st August, 2006 Since his first appointment Mr. Sharma has been rendering valuable service to the Company by way of being not only on Company’s Board, but even on few important Committees of Board such as Audit Committee, Shareholders’/ Investors’ Grievance Committee etc.
Name :	Mr. G. Gehani
Designation :	Director and Company Secretary
Qualification :	FCS, M.Com., LLB, DCL, DPM and IR
Date of Appointment :	25.09.1994
Name :	Mr. Harry Harinder Shourie
Designation :	Director
Name :	Mr. Ashok Sharma
Designation :	Director
Date of Birth/Age :	04.07.1944
Qualification :	B. Tech
Expertise in specific functional area :	Information Technology
Directorship held in other companies :	Advanced Business Solutions FZ LLC, Dubai.
Brief Resume :	Mr. Ashok Sharma after his graduation from Indian Institute of Technology – Madras, India worked in key senior positions in major multinational companies, rising to senior Regional Management positions in the internationally known companies such as IBM and Microsoft. Mr. Sharma has an in-depth knowledge of IT activities and related fields of Business Development, Marketing, Sales, Manufacturing and Personnel Management. Based on a unique blend of experience - gained through working for some of the world’s largest Organizations - he offers practical advice for implementing Best Practices - to help make corporate strategy work. Looking at the vast knowledge that Mr. Sharma has in the field of Information Technology, he was inducted on Company’s Board as “Additional Director” on 15^th December, 2005. Subsequently the shareholders of the Company in their meeting held on 31st August, 2006 passed a unanimous Resolution appointing Mr. Sharma as a Director on the Board. Since his appointment Mr. Ashok Sharma has been rendering valuable services to the Company by way of being not only on Company’s Board, but even on few important Committees of Board such as Remuneration Committee, Shareholders’/ Investors’ Grievance Committee.
Name :	Mr. S. P. Bhatia
Designation :	Additional Director
Name :	Mr. C K Goel
Designation :	Additional Director
Name :	Mr. Paresh J Shah
Designation :	Additional Director
Name :	Mr. Harsh Pateria
Designation :	Director
Date of Birth/Age :	24.09.1958
Qualification :	B. Sc.
Expertise in specific functional area :	Effective management of various business organizations involved in diverse activities.
Directorship held in other companies :	Primo Pick N. Pack Limited (Chairman)
Brief Resume :	Mr. Harsh Pateria, after his academic attainments promoted a company under the name and style of Primo Pick N. Pack Limited which was incorporated in 1985. Additionally he started getting involved in few other business activities. Since then he has very ably managed the various business ventures and has acquired adequate exposure in company’s management involving different activities associated with scheduling, planning, organizing and implementing the policies of the organizations in optimal manner. Considering his vast exposure as an industrialist your Board co-opted Mr. Harsh Pateria as “Additional Director” w.e.f. 15th January,2008.

SHAREHOLDING PATTERN

As on 30.09.2008

Names of Shareholders	No. of Shares	Percentage of Holding
Promoter's Holding
Indian Promoters	17041810	39.90
Persons Acting in Concert	3621100	8.48
		0
Non-Promoter's Holding		0
Institutional Investors		0
Mutual Funds and UTI	6647348	15.56
Banks, Financial Institutions,   Insurance companies, Central/State Govt. institutions/Non-Govt. institutions	127530	0.30
FIIs	8316623	19.47
		0
Others		0
Private Corporate Bodies	4019180	9.41
Indian Public	2020152	4.73
NRIs/ OCBs/ Clearing Members/ Foreign Bodies	917168	2.15
GRAND TOTAL	42710911	100.00

BUSINESS DETAILS

Line of Business :

Manufacture of Line Pipe for Oil and Gas Pipe Lines, Non-Galvanised Corrosion coating, Cranes Designated for Mounting on road vehicles, Epoxy Powder for Anti-Corrosion Treatment.

Products :

Product Description	Item Code No.
Other Tubes, Pipes and Hollow Profiles in Spira or Straight Welded Seam of Dia 300 MM and Above and made out of Iron Steel of all type	3319
External and Internal Coating of Line Pipes	3450
Anti-Corrosion Coatings of Re-Enforced Rebars	3450

PRODUCTION STATUS As on 31.03.2008

Particulars	Unit	Licensed and Installed Capacity
Spiral Arc Welded Pipes	MT	1100000
Coating on Steel Pipes	Meters	NA
Anode	MT	1500
Wire Mesh	Sqm.	720000
Outer Wrap	Sqm.	2500000
Rebar Coating	Sqm.	NA

GENERAL INFORMATION

No. of Employees :

4000

Bankers :

• ICICI Bank Limited
• State Bank of India
• Standard Chartered Bank
• Export Import Bank of India
• IDBI Bank Limited
• Axis Bank Limited
• BNP Paribas
• State Bank of Patiala
• State Bank of Hyderabad
• Indian Overseas Bank
• Union Bank of India
• Hong Kong and Shanghai Banking Corporation Limited
• ING Vysya Bank Limited
• Yes Bank Limited
• DBS Bank Limited
• Deutsche Bank
• Indian Bank
• Kotak Mahindra Bank
• Development Credit Bank

Facilities :

Secured Loans :

	As on 31.03.2008 Rs. in Millions
A. Term Loan from Financial Institutions , Banks and Non Banking Financial Institutions [Secured against first charge on some of the immovable and moveable assets of the Company ]	1459.139
B. From Scheduled Banks [Secured against hypothecation of Current Assets and second charge on the assets as per [A] above]	4622.441
C. From Scheduled Banks [Motor Vehicle Loans]	6.562
D. Interest free sales tax deferred scheme of Govt. of Tamil Nadu [Secured against second charge on specific assets of the company]	11.136
Total	6099.278

Unsecured Loans :

	As on 31.03.2008 Rs. in Millions
Foreign Currency Convertible Bonds (Redeemable in 2010) (Unsecured)	99.925
Total	99.925

Banking Relations :	Satisfactory
Auditors :
Name :	Ø Statutory Auditors: Suresh C. Mathur and Company Chartered Accountants, New Delhi Ø Internal Auditiors: R. Devarajan and Company Chartered Accountants Mumbai, Maharashtra
Associates :	Ø Broken Hills Industries Limited Ø Broken Hills International Limited Ø Punj International Limited Ø Punj Investments Limited Ø PSL International Limited Ø Eurocoustic Products Limited
Subsidiaries :	— 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 INC Corporation Trust Center, 1209, Orange Street, Wilmington, New Castle, 19801, Delaware, USA

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
100000000	Equity Shares	Rs.10/- each	Rs.1000.000 millions

Issued and Subscribed Capital :

No. of Shares	Type	Value	Amount
42710911	Equity Shares	Rs.10/- each	Rs.427.109 millions

(Of the above shares 86,61,511 full paid-up and pari passu ranking equity shares of Rs. 10/- each were allotted consequent upon conversion of FCCB worth USD 37,500,000 Out of Total FCCB’s worth 40 Million USD issued by Company earlier in September 2005)

Paid-up Capital :

No. of Shares	Type	Value	Amount
42710911	Equity Shares	Rs.10/- each	Rs.427.109 millions
	LESS: Allotment Money In Arrears Pertaining To The Shares Allotted Prior To Merger.		Rs.1.296 millions
	TOTAL		Rs.425.813 millions

(Of the above shares 86,61,511 full paid-up and pari passu ranking equity shares of Rs. 10/- each were allotted consequent upon conversion of FCCB worth USD 37,500,000 Out of Total FCCB’s worth 40 Million USD issued by Company earlier in September 2005)

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		425.813	340.607	319.545
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		5229.800	3021.364	2305.150
4] (Accumulated Losses)		0.0000	0.000	0.000
NETWORTH		5655.613	3361.971	2624.695
LOAN FUNDS
1] Secured Loans		6099.278	4989.013	5109.640
2] Unsecured Loans		99.925	1708.728	1700.800
TOTAL BORROWING		6199.203	6697.741	6810.440
DEFERRED TAX LIABILITIES		16.126	6.842	31.830
TOTAL		11870.942	10066.554	9466.965
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		4439.762	3874.088	3381.831
Capital work-in-progress		144.367	743.305	146.118
INVESTMENT		1765.825	554.308	114.218
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	7423.866	6219.227	5195.386
	Sundry Debtors	3379.472	2173.239	4199.984
	Cash & Bank Balances	1106.457	1121.284	1132.415
	Loans & Advances	1623.562	1119.632	1145.689
Total Current Assets		13533.357	10633.382	11673.474
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	7375.248	5145.888	5511.849
	Provisions	637.121	592.641	336.827
Total Current Liabilities		8012.369	5738.529	5848.676
Net Current Assets		5520.988	4894.853	5824.798
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		11870.942	10066.554	9466.965

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		22617.661	16082.857	15390.600
Other Income		0.000	0.000	176.100
Stock Adjustments		0.000	0.000	67.100
Total Income		22617.661	16082.857	15633.800
Profit/(Loss) Before Tax		1241.604	861.952	668.900
Provision for Taxation		393.900	240.400	177.000
Profit/(Loss) After Tax		847.704	621.552	491.900
Earnings in Foreign Currency :
Total Earnings		5506.430	557.467	4831.203
Imports :
Total Imports		8604.392	5227.938	1429.594
Expenditures :
	Raw Materials	15343.687	9782.481	10107.400
	Excise Duty	1749.340	1550.278	1058.100
	Power & Fuel Cost	NA	NA	3.600
	Other Manufacturing Expenses	1762.466	1920.742	2017.100
	Employee Cost	594.154	449.144	286.400
	Selling and Administration Expenses	NA	NA	287.500
	Miscellaneous Expenses	NA	NA	177.400
	Bad Debts W/Off	0.000	42.439	NA
	Other Expenses	835.894	601.615	NA
	Interest & Financial Charges	578.556	434.977	688.800
	Depreciation	511.960	439.229	338.600
Total Expenditure		21376.057	15220.905	14964.900

QUARTERLY RESULTS

PARTICULARS	30.06.2008	30.09.2008
Type	1^st Quarter	2^nd Quarter
Sales Turnover	6522.700	6437.800
Other Income	65.900	175.100
Total Income	6588.600	6612.900
Total Expenditure	5928.500	5950.400
Operating Profit	660.100	662.500
Interest	126.500	204.000
Gross Profit	533.600	458.500
Depreciation	145.200	136.400
Tax	128.000	106.000
Reported PAT	260.400	216.100

KEY RATIOS

PARTICULARS	31.03.2008	31.03.2007	31.03.2006
Debt Equity Ratio	1.43	2.26	3.09
Long Term Debt Equity Ratio	0.49	1.01	1.11
Current Ratio	1.08	1.17	1.13
TURNOVER RATIOS
Fixed Assets	3.37	2.84	3.36
Inventory	3.25	2.77	3.15
Debtors	7.99	4.97	4.22
Interest Cover Ratio	2.40	2.53	1.97
Operating Profit Margin (%)	11.90	11.77	11.02
Profit Before Interest and Tax Margin (%)	9.59	9.00	8.82
Cash Profit Margin (%)	6.13	6.70	5.40
Adjusted Net Profit Margin (%)	3.82	3.93	3.20
Return on Capital Employed (%)	19.42	14.62	15.43
Return on Net Worth (%)	18.80	20.76	22.88

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Subject (Formerly PSL Holdings Limited), the flagship of PSL group incorporated in August 1987 as a Private Limited company and later it was transformed into a Public Limited company in September 1994. Other group companies are PSL Pipe Coaters, Broken Hills Industries, Punj International, etc. 

Subject is a market leader in Steel Pipes products in India. The company has ten pipe mills at strategically coast based locations in Chennai, Kandla and Daman to cater its customer needs. It produces the pipes in different size varying from 16' dia to 120' dia with wall thickness from 5mm to 25mm. It manufactures and supplies SPIRAL WELD PIPES certified to API (American Petroleum Institute) standards for Oil, Gas and Water Transmission as well as Structural and Piling Applications for both Onshore and Offshore sector. It is a premier induction pipe pending company with an expertise that spans over two decades. The company's activities include protective coatings for steel pipes, epoxy coatings for reinforcement bars, manufacture of epoxy powder paint and galvalum range of aluminum sacrificial anodes and the processing of iron ore.

The company has technical collaborations with Commercial Resins, US; Lilly Powder Coating, US; Oronzio De Nora, Switzerland; and Abbey Resources, UK. It enhances the company to give its customer international standard products. 

The company came out with a initial public offer aggregating Rs.138.700 millions in February 1995, to part finance its pipe coating project at Vishakhapatnam and a mobile coating plant. To cater to the Reliance Refinery project the company has set up a new coating facility at Jamnagar and sourced new and diverse technologies to meet the RPL project's specifications. 

During the period 2000-02, witnessed a important year for the company. In this period company's pipe mill division doubled its capacity from the existing level. Consequently, the aggregate pipe manufacturing capacity of the company increased to 525,000 MT per year. The company modernized its Polyethylene Coating plants at Vizag, Daman and Kandla. Based on customer requirement, Internal Cement Mortar Lining plants were added at Daman and Chennai. In the same period, EPC and N division after getting full pledged experience in expansion programme carried out in its Pipe Mill and Pipe Coating Divisions, took initiatives to enter the international arena as an exporter of turnkey pipe mills and pipe coating plants. 

The company has established an ERW process pipe manufacturing unit in order to cater to pipe requirement in the small and medium dia range for both oil and gas needs. The year 2003 witnessed the full commissioning of the Varsana unit and the installed capacity of SWP had commenced its operations. An additional bending machine has been installed at the company's Kandla factory to cater the small diameter pipelines ranging from 4' to 20'. 

The Vishakhapatnam plant has executed M/s. Gas Authority of India Limited, pipeline project. The timely completion of the project by the company made much impressive to GAIL and as a result they once again placed their next prestigious High Pressure Gas Pipeline Project namely - Dahej Vijaipur Pipeline Project.

The company has expanded the installed capacity of Spiral Arc Welded Pipes during the year 2003-04 by 45000 MT and with this expansion, the total capacity of this segment increased to 675,000 MT. 

The company has bagged a prestigious contract on export front during December 2004 from an Kazakhstan company promoted by Ispat Karmet, a constituent company of well known international steel giant, L N Mittal Global Steel. The company has not only been entrusted with supervision responsibilities of Design, Engineering, Key equipment supply, Erection and Commissioning of the entire US $ 25 million project, but also it has been awarded with a letter of intent for US $ 9 million worth of equipment to be shipped from India for the steel pipe manufacturing facility proposed to be set up in Kazakhstan.

During 2005-2006, a state-of-the-art Two-Step Pipe Mill has been established at Varsana in Gujarat. This Mill (which has already commenced production) when fully operational will be able to produce 3,50,000 MT of pipes as against a mere 75,000 MT installed capacity of a conventional Pipe Mill. The said Pipe Mill which has costed Rs.1500 millions approximately has helped in enhancing the total annual production capacity of the company from 7,50,000 MT to 11,00,000 MT. 

The companies production capacity of Spiral Arc Welded Pipes expanded from 1025000 Mt to 1100000 Mt.

PERFORMANCE HIGHLIGHTS 

FOR THE COMPANY ON STANDALONE BASIS 

DURING THE YEAR:

a) The sale has increased from Rs.15830 millions in the previous year to Rs.22190 millions, thereby registeringa growth of 40%. 

 b) The net profit before depreciation and interest rose from Rs.1736.300 millions in the previous year to Rs.2332.100 millions, thereby recording a growth of 34.31 %. 

 c) The profit before provision for taxation rose from Rs.862.000 millions in the previous year to Rs.1241.600 millions, evidencing a growth of 44.04n/n. 

 d) The net profit after provision for taxation rose from 621.600 millions in the previous year to Rs.847.700 millions, registering a growth of 36.37n/n. 

 e) The earnings per share for the year is 21.18 as against 19.26 in previous year. 

FOR THE YEAR:

a) The general reserves account is proposed to be credited with an amount of Rs.100.000 millions as against Rs.70.000 millions in the previous year, thereby representing 42.86% additional credit to the said account. 

b) Since in addition to an Interim Dividend of Rs.2.50per share paid by the Company on 15th January, 2008, the Board has also recommended payment of Rs.2.50 per share as final dividend , thereby aggregating to a total dividend of Rs.5/- per share, the Company has maintained a constant dividend payout ratio of 50% as in the last few years. 

SUBSIDIARY COMPANIES 

 * PSL CORROSION CONTROL SERVICES LIMITED 

This Company is a wholly owned subsidiary of the Company and is presently engaged in providing Anti-corrosive treatment to Rebars. The Company has its plant - at Daman. The Registered Office of the Company, which was till recently located at Delhi has been shifted to Kachigam, Daman consequent upon an Order to that effect passed by Company Law Board. The Company's Sales, which was Rs.190 millions in the previous year, got enhanced to Rs.250.300 millions thereby registering 32% growth. The profit after tax rose from Rs.31.800 millions in the previous year to Rs.35.500 millions in the current year representing 11.63% growth. 

 * PIPELINE SYSTEMS LIMITED 

This Company was incorporated in November, 2004 at Mauritius as a wholly owned subsidiary Company of their Company. Subsequently, another Company namely PSL FZE was established at Sharjah in UAE as a wholly owned subsidiary of Pipeline Systems Limited. 

During the year, the Company contributed an additional amount of US$ 89.44 Lacs to the equity capital of the said Company both by way of cash remittances as well as by equipment supplies. Thus the aggregate amount of investments made by the Company in the said Company amounted to US$ 204.36 as on 31st March, 2008. 

With ESE FZE having already bagged a prestigious order for a total value of US$ 45 million, the financial position of the said Company during the current year will further improve. 

* PSL FZE -UAE 

As mentioned above, PSL FZE is a wholly owned Subsidiary Company of Pipeline Systems Limited, Mauritius. The Directors are happy to report that even while the setting up of Company's plant at Sharjah was going on, the Company procured its first major order valuing US$ 45 million. The commercial production of the Company was therefore started within the Financial Year and eventually a Total Income of AED 94.73 Lacs was recorded. Although the laws of UAE do not prescribe for provision of depreciation in the books of accounts, it was considered prudent to provide for adequate provision for depreciation, even after which a profit of AED 14.14 Lacs was recorded during the Financial Year ended on 31st March, 2008. 

The Directors are hopeful that with API approval already in place for the said plant, this Company has bright prospects for adequate enhancement of the Company's turnover as well as the profitability during current Financial Year. 

 * PSL USA INC. 

 PSL USA INC was incorporated on 4th December, 2006 in the State of Delaware, USA primarily to bag contracts for manufacture of pipes, keeping in view the upsurge in the pipe laying activity in North America. During the year this Company entered into a joint Venture Agreement with PSL North America LLC in May, 2007 by way of which this Company agreed to contribute to 78% share of the said LLC Company, which was also formed in the state of Delaware. 

 The Company has invested a total amount of US$ 200 Lacs towards the equity capital of PSL USA INC. 

 * PSL NORTH AMERICA LLC 

This Company was also incorporated in the State of Delaware, USA on 9th November, 2006. It is a joint Venture Company with 78% shareholding owned by PSL, 12% share owned by HSAW Solutions LLC and the balance 10% by Lloyd Systems INC. This Company is registered to carry on business activity in Mississippi, USA. During the year the Hancock County, Mississippi through its Board of Supervisors and its Hancock County Port and Harbor Commission has leased approximately 155 acres of land for a term of 99 years at a meager annual rent of US$ 1 to the Company in the Port Bienville Industrial Park in Hancock County, Mississippi. A plant using state of the art technology to manufacture 24 meter long pipes is being set up in the leased land and presently the commissioning process is in full swing with a view to commence the operations within next few weeks. 

The Directors are happy to report that even before completion of the commissioning process, this Company has been awarded with a prestigious order valuing US$ 418 million by Florida Gas Company, USA for 543 miles of pipes and associated coating. 

PROJECT	Approximately Aggregate Value Rs. In Millions
GSPL's Gas Grid Project	7000.000
Offshore Pipeline related Services from M/s. Allseas and NPCC	1750.000
IOCL's First Gas Pipeline Project from Dadri to Panipat	1650.000
L & T's Barmer Lift Water Supply Project-I and II	3080.000
HPCL-Mittal's Mundra Bhatinda Crude Oil Carrying Line Project	9170.000
Hanwa Company's Offshore Palm Beach Housing Complex Project	US$ 45 million
Florida Gas Transmission Company's Project	US$ 418 million
GAIL's Vijaipur - Dadri Bawana Pipeline Project	19280.000

 MANAGEMENT DISCUSSION AND ANALYSIS 

INDUSTRY STRUCTURE and DEVELOPMENT 

Since last few years’ Indian economy has been constantly growing at an impressive growth rate of over 9%. In fact, the present day Government is hopeful that by 2010 the said growth rate would enter double digits. In such a scenario, any developing economy cannot afford to neglect the development of its Infrastructure Sector. Since one of the major constitutions of infrastructure is the Oil, Gas and Water Sector, which is highly dependant on spread of Pipeline Network, the Pipe making Industry has been blessed with ample opportunities for its double digit growth. 

The unexpected increase in price of Crude worldwide beyond all expected levels has further acted like fuel to the fire. Such unprecedented rise in prices of Crude Oil makes it worthwhile for exploration companies to find deep sea deposits. All such reasons directly help in pushing the demand for Pipeline Network, which in turn enhances the worldwide requirements for SAW Pipes. 

On international front, apart from heavy demand that arises in North America, Middle East being the source of Crude Oil also requires a large supply of pipes to enable the smooth transportation of the Crude to different points of uses. 

It can thus be concluded that unprecedented opportunities for development of Pipeline Industry exists the world over. The excess of the global demand over the global supply obviously results into more profitability and the Indian Pipe Industry being physically closer to Middle East as compared to other major European or Japanese Pipe Manufacturers, are clearly in a beneficial position. It is because of such motivation that the Industry has substantially grown in the recent years with entry of more and more players in the field. 

OUTLOOK 

In view of the excessive demand for Pipelines due to various reasons stated above, the future for Pipeline business will always be bright. It is because of such optimistic situation that more and more pipe manufacturers are entering in the fray. 

Subject has been indeed lucky that it could set up its different Plants at such strategic locations in the coastal belt of the country from where the transportation cost of the manufactured pipes to the desired destination fixed by its customers is minimum. Again having chosen the particular technology of Spirally Welded Steel Pipes as against longitudanal welded pipes, the Company has been placed in an advantageous position since the availability of the main raw material i.e. HR Coil in the chosen technology is not only easier but even cheaper as compared to the steel plates used for manufacture of L-SAW Pipes. The Company now has total of 11 Pipe Mills in India with a total production capacity of more than 1 Million Metric Tonnes of Pipes, which has enabled the Company to acquire the status of being the 'single largest manufacturer in India'. Company's one single Pipe Mill at Varsana is a Two Step Pipe Mill using state-ofthe-art technology and is capable of producing 3,00,000 Metric Tonnes Pipes in a year on its own. 

Again on international front also the Company proved to be a leader in venturing out of the country as a Pipe Mill has been set up in the Hamriyah Free Trade Zone in Sharjah, UAE by Company's Subsidiary to manufacture 75,000 MT on its own. 

Similarly for meeting the high demand of pipes in North America, the Company, through its Subsidiary Company, has entered into a Joint Venture (with 78% shareholding of the Joint Venture Company) to set up a Plant in the State of Mississippi. While the Sharjah Plant is already operational and is currently executing the first major Contract awarded to it, the commercial production of the US Plant is likely to start in near future. 

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE 

To minimize the occurrences of inefficient operational performance due to lack of timely decision making, adequate delegation of powers to Senior and Middle Management has been resorted to. Most of the powers have been decentralized to the different operational levels at widely spread network of Company's Plants. However, important areas like requirement of funds at different Units and evolution of suitable mechanism to raise such funds is done in a centralized manner. 

At operational level, apart from routine upgradation of the production facilities as may be required from time to time, continuous planning for setting up of new Projects at appropriate locations is done at the Headquarters level with the help of suitable inputs from experienced Unit Heads. 

FIXED ASSETS

v Free Hold Land

v Lease Hold Land

v Office Building

v Factory Building

v Furniture and Fixture

v Plant and Machinery

v Office Equipment

v Lab Equipment

v Computer

v Motor Car

v Commercial Vehicles

v Cycle

v Earth Moving Equipments

v Shed Construction

WEBSITE DETAILS:

CORPORATE OVERVIEW:

With a production capacity in excess of the 1 million ton mark, they are India’s largest producer/manufacturer of HSAW pipes - the line-pipe industry's preferred pipe. But their leadership in the pipe industry is not confined to the domestic market alone, though the market is huge and still growing - global recognition is reflected in the huge orders already in hand from the US even before the commissioning of their 300,000 MT capacity plant in Mississipi not to mention the USD 45 million order of their pipe mills in Sharjah in the UAE.

These facilities are backed by sound technology, state-of-the-art infrastructure, technical collaborations with leading Design and Engineering consultancies of Germany and Italy and most importantly, by a human resources pool that is amongst the best in the industry - ensuring that the project is completed on target, time after time.

Subject is the largest manufacturer of high-grade large diameter Helical Submerged Arc Welded (HSAW) pipes in India. The Company manufactures and supplies pipes certified to API (American Petroleum Institute) standards for oil, gas and water transmission as well as structural and piling applications for both onshore and offshore sector.

Subject is one of the largest pipe manufacturers in India with 12 pipe mills at multiple and strategically coast-based locations in Kandla, Chennai, Visakhapatnam, Ahmedabad, and Jaipur along with the recently commissioned Sharjah unit. The annual pipe manufacturing capacity of the Company now stands at 1,175,000 MT per year.

Other business segments that subject caters to, include pipes coating, induction pipe bending and sacrificial anode manufacturing, rebar coating, modular furniture and structural building fabrication. Subject has over the years successfully demonstrated its ability to simultaneously manage multiple assignments in a qualitatively and timely manner, both within and outside the country.

PRESS RELEASES:

 PSL - Monday, October 06, 2008

PSL North America, LLC (PSLNA) Announces Pipe Production Milestone

PSLNA is pleased to announce the milestone achievement of pipe production at their state-of-the-art Pipe Manufacturing and Coating Facility in Bay St. Louis, MS. This follows previous achievements for the company including land acquisition and project agreement with state and local authorities in April 2007, project financing and ground breaking in November 2007, and first major customer order in May 2008. 

Brian J. Vaill, PSLNA CEO, said “Pipe production is a great accomplishment for our team and demonstrates that we are transitioning from the construction phase to the production phase for our plant and business.”

PSLNA’s business is providing Large Diameter API Pipe to the North American market. Their facility in Bay St. Louis, MS, manufactures pipe with a diameter range of 24” to 60”, a wall thickness range of ¼” to 1”, lengths up to 80’, and grade up to and including X80. The pipe manufacturing process utilizes state-of-the-art Next Generation Two Step Spiral Mill technology. The coating manufacturing process is in line with the pipe mill and applies corrosion and abrasion resistant coatings to the outside diameter and flow efficiency lining to the inside diameter utilizing the latest technology. For more information about PSLNA, visit www.pslna.com.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.50.03
UK Pound	1	Rs.74.42
Euro	1	Rs.62.71

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		57

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions