Notes to Accounts of Palco Metals Ltd.

Mar 31, 2024

P. Provision, Contingent Liabilities and Contingent Assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the Statement of Profit and Loss net of any reimbursement

Contingent liability

A possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise are disclosed as contingent liability and not provided for. Such liability is not disclosed if the possibility of outflow of resources is remote.

Contingent Assets

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.

Contingent assets are not recognised but disclosed only when an inflow of economic benefits is probable.

Q. Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable To equity shareholders (after deducting preference dividends and attributable taxes) by the Weighted average number of equity shares outstanding during the period. Partly paid equity shares Are treated as a fraction of an equity share to the extent that they are entitled to participate in Dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, Bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that has changed the number of equity shares outstanding, without a corresponding change in resources.For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

R. Segment reporting

As the company''s business activity, in the opinion of the management, falls within a single primary segment subject to the same risks and returns, the disclosure requirements of IND Accounting Standard (AS) - 108 "Segment Reporting" notified under the Companies (Accounting Standards) Rules, 2006 are not applicable.

S. Operational Creditor Association

Our subsidiary company Palco Recycle Industries Limited has lost a battle in supreme Court or recovery of debt . It is not possible to fight alone by Palco Recycle Industries Limited. To Safeguard the interest of the company, the board of Palco Metals Limited advised to form unregistered association named as Essar Association Fund (held in Trust). Palco Metals Limited having financial transaction for contribution received and expenses incurred on behalf of the unregistered association.

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values.

1. Fair values of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short-term maturities of these instruments.

2. Financia! instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on the evaluation, allowances are taken to account for the expected losses of these receivables.

The company uses the following hierarchy for determining and disclosing the fair values of financial instruments by valuation technique :

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: Other techniques for which all inputs which have a significant effects on the recorded fair value are observable, either directly or indirectly.

Level 3: Techniques which use inputs that have a significant effects on the recorded fair value that are not based on observable market data.

The Company''s activities are exposed to variety of financial risks. The key financial risks include market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Board of Directors reviews and approves policies for managing risks. The risks are governed by appropriate policies and 0

procedures and accordingly financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives.

Market Risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loan borrowings.

The Company manages market risk through it''s treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by the Senior Management. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies and ensuring compliance with market risk limits and policies.

Interest rate Risk

Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the company''s position with regards to the interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

Market Risk - Foreign Currency

The Company operates locally, however, the nature of its operations requires it to transact in several currencies and consequently the Company is exposed to foreign exchange risk in various foreign currencies.

The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies.

Other Price Risk

The Company is not exposed to any kind of price risk arising as at March 31, 2024.

CREDIT RISK

Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends and analysis of historical bad debts and ageing of accounts receivable . Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is significant increase in credit risk, the company compares the risk of a default occurring on the asset at the reporting date with the risk of default on the date of initial recognition. It considers reasonable and supportive forward-looking information such as:

(i) Actual or expected significant adverse changes in business,

(ii) Actual or expected significant changes in the operating results of the counterparty,

(iii) Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to mere its obligation.

(iv) Significant increase in credit risk on other financial instruments of the same counterparty, and

(v) Significant changes in the value of the collateral supporting the obligation or in the quality of third- party guarantees or credit enhancements

Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categorises a loan or receivable for write off when a debtor fails to make contractual payments greater than 2 years past due. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in profit or loss.

LIQUIDITY RISK

Liquidity Risk is defined as the risk that the company will not be able to settle or meet its obligations on time or at reasonable price. The company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by the senior management. Management monitors the company''s net liquidity position through rolling forecast on the basis of expected cash flows

For the purposes of the Company’s capita! management, capita! includes issued capital and all other equity reserves. The primary objective of the Company’s Capita! Management is to maximize shareholders'' value. The company manages its capita! structure and makes adjustments in the light of changes in economic environment and the requirement of the financial covenants.

The Company monitors capital using gearing ratio, which is total debt divided by total capital plus debt.

U DI N:24112900BKADMX2020

For K P S J & ASSOCIATES LLP For and on behalf of the Board of Directors

Chartered Accountants PALCO METALS LIMITED

FRN: 124845W/W100209

Shriram Ramratan Laddha Mukesh Tiwari Naman Naredi Kirankumar Agrawal

Partner Company Secretary Director D i rector

M. N. 112900 M No. A45237 DIN: 06943536 DIN:00395934

Place: Ahmedabad Badal Naredi Place: Ahmedabad

Date: 13.07.2024 CFO Date: 13.07.2024

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Mar 31, 2015

1. Lease hold land was revalued time to time in the financial year 2005-06 and 2007-08. As a result, the gross value of assets includes revaluation amount of Rs. 2,04,50,927 and Rs.6,97,26,000/- respectively which is transferred to Revaluation Reserve.

2. Earnings per share

Basic earning per share is computed by dividing the net profit after tax by the weighted average number of shares outstanding for the period. As on the reporting date, there are no potential equity shares outstanding which may have a diluting impact on the earnings per share.

3. Licensed and installed capacity and production: Not Applicable

4. Foreign exchange earning Nil during the current year and Nil during the previous year.

5. No provision for gratuity and leave encashment is made during the year.

6. Related Party Disclosure as per AS-18

Names of Related Parties where control exists irrespective of whether transactions have occurred or not: :

Associate : Palco Recycle Industries Ltd.

Names of Related Parties with whom transactions have occurred during the period

i Palco Recycle Industries Ltd.

ii. Palco Recycle Exchange Limited,

iii. India Metals Works & Steel Fabs Corporation

Key Management Personnel:

i. Kiran B Agrawal

ii. Kanaiyalal B. Agrawal

7. The details required under segment reporting as per AS 17 is not furnished as the company is not having any reportable segments.

8. The previous year figures have been regrouped and reworked wherever necessary.

9. Contingent liabilities:-

The Company is contingently liable as it has given corporate guarantee for Rs. 25.35 crores for loan borrowed by Palco Recycle Industries Ltd.

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Mar 31, 2014

1. Lease hold land was revalued in the financial year 2007-08. As a result, the gross value of assets includes revaluation amount of Rs.69,72,000/- which is transferred to Revaluation Reserve.

2. Pursuant to an agreement to sell on slump sale basis with Palco Recycle Industries Ltd.(PRIL) executed on 12th May, 2010, as well as "Supplementary Agreement" executed on 30th November,2011, the company has transferred the entire business to PRIL. In terms of clause no. 5.04 of the agreement to sell and the clauses of the supplementary agreement entered into on 30th November,2011, the requisite approval from SEBI and Ministry of Company Affairs is awaited.

3. Earnings per share

Basic earning per share is computed by dividing the net profit after tax by the weighted average number of shares outstanding for the period. As on the reporting date, there are no potential equity shares outstanding which may have a diluting impact on the earnings per share.

4. Licensed and installed capacity and production: Not Applicable

5. Foreign exchange earning Nil during the current year and Nil during the previous year.

6. No provision for gratuity and leave encashment is made during the year.

7. Related Party Disclosure as per AS-18

a) Name of related party and description of relationship where control exists:

1. Associates: a) Palco Recycle Industries Ltd.,

b) Palco Recycle Exchange Limited,

c) SFC Palco Metals Ltd. (Ceased to be associates w.e.f. 24-02-2014)

2. Enterprise over which Key Management personnel exercise significant influence:-

i. Palco Recycle Industries Ltd.

ii. Palco Recycle Exchange Limited,

iii. Vinod Realities Pvt. Ltd.,

iv. Radius Global Private Limited (Formerly Known as Krishna Worldwide Pvt. Ltd.)

v. ABC Metals and Trading Consultancy Pvt. Ltd.

vi. ABC Resource Traders Private Limited

vii. Palco E-Waste Recyclers Private Limited

viii. Krishna Sharebroking Services Private Limited

b) Name of related party and description of the relationship with whom transactions took place:

1. Associates: a) Palco Recycle Exchange Limited,

b) Palco Recycle Industries Limited.

2. Key Management Personnel:

i. Kiran B Agrawal

ii. Kanaiyalal B. Agrawal

* Note: Palco Recycle Industries Ltd. ceased to be a subsidiary of the company w.e.f. 06-12-2012 and so the previous year figures have been re-grouped and shown under the column of associate company

# Payment of Rs.1,80,000/- is made as director''s salary to Shri Kanaiyalal B Agrawal in current year and in the previous year also)

8. The details required under segment reporting as per AS 17 is not furnished as the company is not having any reportable segments.

9. The previous year figures have been regrouped and reworked wherever necessary.

10. Contingent liabilities:-

The Company is contigently liable as it has given corporate guarantee for Rs.27.50 crores for loan borrowed by Palco Recycle Industries Ltd.

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Mar 31, 2013

1. Lease hold land was revalued in the financial year 2007-08. As a result, the gross value of assets includes revaluation amount of Rs.69,72,000/- which is transferred to Revaluation Reserve.

2. Pursuant to an agreement to sell on slump sale basis with Palco Recycle Industries Ltd.(PRIL) executed on 12th May, 2010, as well as "Supplementary Agreement" executed on 30th November,2011, the company has transferred the entire business to PRIL. In terms of clause no. 5.04 of the agreement to sell and the clauses of the supplementary agreement entered into on 30th November,2011, the requisite approval from SEBI and Ministry of Company Affairs is awaited.

3. Earnings per share

Basic earning per share is computed by dividing the net profit after tax by the weighted average number of shares outstanding for the period. As on the reporting date, there are no potential equity shares outstanding which may have a diluting impact on the earnings per share.

4. Licensed and installed capacity and production: Not Applicable

5. Foreign exchange earning Nil during the current year and Nil during the previous year.

6. No provision for gratuity and leave encashment is made during the year.

No provision for deferred tax liability is made as there are no timing differences.

7. The company has ceased to hold more than 50% of voting rights in Palco Recycle Industries Ltd.(PRIL) w.e.f 06/12/2012. The consolidated financial statements in terms of AS 21 are prepared upto the date on which the company was holding more than 50%.

8. Related Party Disclosure as per AS-18

a) Name of related party and description of relationship where control exists:

* Subsidiary Company: Palco Recycle Industries Ltd. (Ceased wef 06/12/2012)

* Associates: Palco Recycle Exchange Limited, SFC Palco Metals Ltd.

* Enterprise over which Key Management personnel exercise significant influence:-

i. Palco Recycle Industries Ltd.

ii. Palco Recycle Exchange Limited,

iii Vinod Realities Pvt. Ltd.,

iv. Radius Global Private Limited (Formerly Known as Krishna Worldwide Pvt. Ltd.

v. ABC Metals and Trading Consultancy Pvt. Ltd.

vi . ABC Resource Traders Private Limited

vii. Palco E-Waste Recyclers Private Limited

viii. Krishna Sharebroking Services Private Limited

b) Name of related party and description of the relationship with whom transactions took place: 1.Associates: Palco Recycle Exchange Limited, 2Subsidiary:- Palco Recycle Industries Limited. (Ceased wef 06/12/2012)

3.Key Management Personnel:

i. Kiran B Agrawal

ii. Kanaiyalal B. Agrawal

9. The details required under segment reporting as per AS 17 is not furnished as the company is not having any reportable segments.

10. The previous year figures have been regrouped and reworked wherever necessary.

11. Contingent liabilities:-

The Company is contigently liable as it has given corporate guarantee for Rs.27.50 crores for loan borrowed by Palco Recycle Industries Ltd.

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Mar 31, 2011

1. Lease hold land was revalued in the financial year 2007-08. As a result, the gross value of assets includes revaluation amount of Rs.69,72,000/- which is transferred to Revaluation Reserve.

2. Pursuant to an agreement to sell on slump sale basis with Palco Recycle Industries Ltd.(PRIL) executed on 12th May, 2010, the company has transferred all assets and liabilities as mutually agreed upon at a consideration of Rs. 900.59 lacs to PRIL. The company has informed the Ahmedabad Stock Exchange regarding the transaction of sale of business to PRIL.

Necessary approval of the equity shareholders has been obtained by the company through postal ballot in terms of requirements of Sec192A of the Companies Act, 1956. In this regard, we have relied upon the report of the scrutinizer appointed by the company.

As per agreement with PRIL, the company carried on the business on behalf of PRIL till the completion of the scheme and on 31st March,2011 all items of income, expense, assets and liabilities were transferred to PRIL.

3. Earnings per share

Basic earning per share is computed by dividing the net profit after tax by the weighted average number of shares outstanding for the period. As on the reporting date, there are no potential equity shares outstanding which may have a diluting impact on the earnings per share.

5. Licensed and installed capacity and production: Not Applicable

6. Foreign Travelling expenditure of Directors

7.Foreign exchange earning Nil during the current year and Nil during the previous year.

8.No provision for gratuity and leave encashment is made during the year.

9.The company holds more than 50% of voting rights in Palco Recycle Industries Ltd.(PRIL). However, as informed to us by the Board of Directors, the controlling interest is of temporary nature and hence, consolidated balance sheet in terms of AS 21 is not prepared.

10. Related Party Disclosure as per AS-18

a) Name of related party and description of relationship where control exists:

Palco Recycle Industries Ltd. : Subsidiary Company (w.e.f 28th September, 2010)

b) Name of related party and description of the relationship with whom transactions took place:

1 .Associates: Palco Recycle Exchange Limited.

2.Key Management Personnel:

i. Kiran B Agrawal

ii. Kanaiyalal B. Agrawal

11. The details required under segment reporting as per AS 17 is not furnished as the company is having all products manufactured from single raw material i.e alluminium

12. The previous year figures have been regrouped and reworked wherever necessary.

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Mar 31, 2010

Lease hold land has been revalued in financial year 2007-2008, as a result the gross value of fixed assets includes revaluation amount of 69,72,000 which is transferred to revaluation reserve.

2. Sundry Debtors, Loans and advances and Sundry Creditors are subject to confirmation necessary adjustments if any will be made in the accounts on receipt of the same.

3. Earning Per Share

Basic Earning Per Share is computed by dividing the net profit after tax by the weighted average number of shares outstanding for the period.

4. Licensed and Installed Capacity and Production: Not applicable

5. Foreign Travelling Expense (Directors) Rs. 1460000.00 Previous year: 125428.00

6. Foreign Exchange Earning: NIL Previous year: NIL

7. Raw Material Import Rs. 23263725.00 Previous year: 19102133.00

8. Provision for gratuity and provision for leave encasement has been made in the current year.

9. Remuneration to Directors Rs. 1,80,000.00 Previous year: 1,80,000.00

10. The previous year figure have been regrouped and re-arranged wherever necessary.

11. Related party disclosures : -

Related party disclosures as required by accounting standards 18 on "Related Party Disclosures" are given below

(a) List of Related Parties Associates

Palco Recycle Exchange Limited

(12) The Details required under segment reporting as per AS 17 is not furnished as the company is having all products manufactured from single raw materials i.e. Aluminium.