Notes to Accounts of Pradeep Metals Ltd.

Mar 31, 2025

3.16.Provisions, contingent liabilities, contingent assets

A provision is recognized when the Company has a present obligation (legal or constructive) as a result
of past event and it is probable that an outflow of resources will be required to settle the obligation, in

respect of which a reliable estimate can be made. If the effect of time value of money is material,
provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risk specific to
the liability. When discounting is used, the increase in the provision due to the passage of time is
recognized as a finance cost. These are reviewed at each balance sheet date and adjusted to reflect the
current best estimates.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation
that may, but probably will not require an outflow of resources. When there is a possible obligation or a
present obligation in respect of which likelihood of outflow of resources is remote, no provision or
disclosure is made.

The Company does not recognize a contingent asset but discloses its existence in the financial
statements if the inflow of economic benefits is probable. However, when the realization of income is
virtually certain, then the related asset is no longer a contingent asset, but it is recognized as an asset.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance
sheet date.

3.17. Earnings per share

Basic earnings per share is computed using the net profit for the year attributable to the equity
shareholders'' and weighted average number of shares outstanding during the year. The weighted
average numbers of shares also includes fixed number of equity shares that are issuable on conversion
of compulsorily convertible preference shares, debentures or any other instrument, from the date
consideration is receivable (generally the date of their issue) of such instruments.

Diluted earnings per share is computed using the net profit for the year attributable to the shareholder''
and weighted average number of equity and potential equity shares outstanding during the year
including share options, convertible preference shares and debentures, except where the result would
be anti-dilutive.

3.18. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity. Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of
financial assets and financial liabilities (other than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition
of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in
profit or loss. However, trade receivables that do not contain a significant financing component are
measured at transaction price.

3.18.1. Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade
date basis. Regular way purchases or sales are purchases or sales of financial assets that require
delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognized financial assets are subsequently measured in their entirety at either amortized cost
or fair value, depending on the classification of the financial assets.

Classification of financial assets

Debt instruments that meet the following conditions are subsequently measured at amortized cost
(except for debt instruments that are designated as at fair value through profit or loss on initial
recognition):

• the asset is held within a business model whose objective is to hold assets in order to collect
contractual cash flows; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.

All other financial assets are subsequently measured at fair value.

Effective interest method

The effective interest method is a method of calculating the amortized cost of a debt instrument and
of allocating interest income over the relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash receipts (including all fees and points paid or received that
form an integral part of the effective interest rate, transaction costs and other premiums or discounts)
through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross
carrying amount on initial recognition.

Income is recognized on an effective interest basis for debt instruments other than those financial
assets classified as at FVTPL. Interest income is recognized in profit or loss and is included in the
“Other income” line item.

Financial assets at fair value through profit or loss (FVTPL)

Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects
on initial recognition to present subsequent changes in fair value in other comprehensive income for
investments in equity instruments which are not held for trading.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any
gains or losses arising on re-measurement recognized in profit or loss. The net gain or loss
recognized in profit or loss incorporates any dividend or interest earned on the financial asset and is
included in the ‘Other income'' line item. Dividend on financial assets at FVTPL is recognized when
the Company''s right to receive the dividends is established, it is probable that the economic benefits
associated with the dividend will flow to the entity, the dividend does not represent a recovery of part
of cost of the investment and the amount of dividend can be measured reliably.

Impairment of financial assets

The Company recognizes loss allowances using the expected credit loss (ECL) model based on
‘simplified approach'' for the financial assets which are not fair valued through profit or loss. Loss
allowance for trade receivables with no significant financing component is measured at an amount
equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an
amount equal to the twelve month ECL, unless there has been a significant increase in credit risk
from initial recognition in which case those are measured at lifetime ECL. The amount of expected
credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the
amount that is required to be recognized is recognized as an impairment gain or loss in statement of
profit and loss.

De-recognition of financial asset

The Company de-recognizes a financial asset when the contractual rights to the cash flows from the
asset expire, or when it transfers the financial asset and substantially all the risks and rewards of
ownership of the asset to another party. If the Company neither transfers nor retains substantially all
the risks and rewards of ownership and continues to control the transferred asset, the Company
recognizes its retained interest in the asset and an associated liability for amounts it may have to pay.
If the Company retains substantially all the risks and rewards of ownership of a transferred financial
asset, the Company continues to recognize the financial asset and also recognizes a collateralized
borrowing for the proceeds received.

On de-recognition of a financial asset in its entirety, the difference between the asset''s carrying
amount and the sum of the consideration received and receivable and the cumulative gain or loss that
had been recognized in other comprehensive income and accumulated in equity is recognized in
profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of
that financial asset.

On de-recognition of a financial asset other than in its entirety (e.g. when the Company retains an
option to repurchase part of a transferred asset), the Company allocates the previous carrying
amount of the financial asset between the part it continues to recognize under continuing
involvement, and the part it no longer recognizes on the basis of the relative fair values of those parts
on the date of the transfer. The difference between the carrying amount allocated to the part that is no
longer recognized and the sum of the consideration received for the part no longer recognized and
any cumulative gain or loss allocated to it that had been recognized in other comprehensive income is
recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss
on disposal of that financial asset. A cumulative gain or loss that had been recognized in other
comprehensive income is allocated between the part that continues to be recognized and the part
that is no longer recognized on the basis of the relative fair values of those parts.

3.18.2. Financial liability and equity instrument
Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as
equity in accordance with the substance of the contractual arrangements and the definitions of a
financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the Company are recognized at the
proceeds received, net of direct issue costs. Repurchase of the Company''s own equity instruments is
recognized and deducted directly in equity. No gain or loss is recognized in profit or loss on the
purchase, sale, issue or cancellation of the Company''s own equity instruments.

Financial liabilities

All financial liabilities are subsequently measured at amortized cost using the effective interest
method or at FVTPL.

However, financial liabilities that arise when a transfer of a financial asset does not qualify for de¬
recognition or when the continuing involvement approach applies, financial guarantee contracts
issued by the Company, and commitments issued by the Company to provide a loan at below-market
interest rate are measured in accordance with the specific accounting policies set out below.

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is either contingent
consideration recognized by the Company as an acquirer in a business combination to which Ind AS
103 applies or is held for trading or it is designated as at FVTPL.

A financial liability is classified as held for trading if:

• it has been incurred principally for the purpose of repurchasing it in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the Company
manages together and has a recent actual pattern of short-term profit-taking; or

• it is a derivative that is not designated and effective as a hedging instrument.

A financial liability other than a financial liability held for trading or contingent consideration recognized
by the Company as an acquirer in a business combination to which Ind AS 103 applies, may be
designated as at FVTPL upon initial recognition if:

• such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise;

• the financial liability forms part of a group of financial assets or financial liabilities or both, which is
managed and its performance is evaluated on a fair value basis, in accordance with the
Company''s documented risk management or investment strategy, and information about the
grouping is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and Ind AS 109 permits
the entire combined contract to be designated as at FVTPL in accordance with Ind AS 109.

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re¬
measurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates
any interest paid on the financial liability and is included in the ‘Other income'' line item.

However, for non-held-for-trading financial liabilities that are designated as at FVTPL, the amount of
change in the fair value of the financial liability that is attributable to changes in the credit risk of that
liability is recognized in other comprehensive income, unless the recognition of the effects of changes
in the liability''s credit risk in other comprehensive income would create or enlarge an accounting
mismatch in profit or loss, in which case these effects of changes in credit risk are recognized in profit
or loss. The remaining amount of change in the fair value of liability is always recognized in profit or
loss. Changes in fair value attributable to a financial liability''s credit risk that are recognized in other
comprehensive income are reflected immediately in retained earnings and are not subsequently
reclassified to profit or loss.

Gains or losses on financial guarantee contracts and loan commitments issued by the Company that
are designated by the Company as at fair value through profit or loss are recognized in profit or loss.

Financial liabilities subsequently measured at amortized cost

Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at
amortized cost at the end of subsequent accounting periods. The carrying amounts of financial
liabilities that are subsequently measured at amortized cost are determined based on the effective
interest method. Interest expense that is not capitalized as part of costs of an asset is included in the
‘Finance costs'' line item. The effective interest method is a method of calculating the amortized cost of
a financial liability and of allocating interest expense over the relevant period. The effective interest
rate is the rate that exactly discounts estimated future cash payments (including all fees and points
paid or received that form an integral part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the financial liability or (where appropriate) a
shorter period, to the gross carrying amount on initial recognition.

Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in
accordance with the terms of a debt instrument.

Financial guarantee contracts issued by the Company are initially measured at their fair values and, if
not designated as at FVTPL, are subsequently measured at the higher of:

• the amount of loss allowance determined in accordance with impairment requirements of Ind AS
109; and

• the amount initially recognized less, when appropriate, the cumulative amount of income
recognized in accordance with the principles of Ind AS 115.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset the recognized amounts and there is an intention to
settle on a net basis, to realize the assets and settle the liabilities simultaneously.

Derivatives and hedge accounting

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently re-measured at their fair value. The method of recognising the resulting gain or loss
depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the
item being hedged.

The Company designates certain derivatives as either:

i) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge);

ii) hedges of a particular risk associated with a recognised asset or liability or a highly probable
forecast transaction (cash flow hedge); or

The Company documents at the inception of the transaction the relationship between hedging
instruments and hedged items, as well as its risk management objectives and strategy for undertaking
various hedging transactions. The Company also documents the nature of the risk being hedged and
how the Company will assess whether the hedging relationship meets the hedge effectiveness
requirements (including its analysis of the sources of hedge ineffectiveness and how it determines the
hedge ratio).

The full fair value of a hedging derivative is classified as a non-current financial asset or financial
liability when the residual maturity of the derivative is more than 12 months and as a current financial
asset or financial liability when the residual maturity of the derivative is less than 12 months.

Fair value hedge

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are
recorded in the statement of profit and loss, together with any changes in the fair value of the hedged
item that are attributable to the hedged risk.

Hedge accounting is discontinued when the Company revokes the hedging relationship, when the
hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge
accounting. The fair value adjustment to the carrying amount of the hedged item arising from the
hedged risk is amortised to the statement of profit and loss from that date.

Cash flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash
flow hedges is recognised in other comprehensive income and accumulated under the heading cash
flow hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in
the statement of profit and loss.

Amounts previously recognised in other comprehensive income and accumulated in equity are

reclassified to the statement of profit and loss in the periods when the hedged item affects the
statement of profit and loss, in the same line as the recognised hedged item. However, when the
hedged forecast transaction results in the recognition of a non-financial asset or a non-financial
liability, the gains and losses previously recognised in other comprehensive income and accumulated
in equity are transferred from equity and included in the initial measurement of the cost of the non¬
financial asset or non-financial liability.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or
exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other
comprehensive income and accumulated in equity at that time remains in equity and is recognised
when the forecast transaction is ultimately recognised in the statement of profit and loss. When a
forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is
recognised immediately in the statement of profit and loss. However, if there is a loss and an entity
expects that all or a portion of that loss will not be recovered in one or more future periods, it shall
immediately reclassify the amount that is not expected to be recovered into profit or loss as a
reclassification adjustment.

Reclassification

The Company determines classification of financial assets and liabilities on initial recognition. After
initial recognition, no reclassification is made for financial assets which are equity instruments and
financial liabilities. For financial assets which are debt instruments, a reclassification is made only if
there is a change in the business model for managing those assets. Changes to the business model
are expected to be infrequent. The management determines change in the business model as a result
of external or internal changes which are significant to the Company''s operations. A change in the
business model occurs when the Company either begins or ceases to perform an activity that is
significant to its operations. If the Company reclassifies financial assets, it applies the reclassification
prospectively from the reclassification date which is the first day of the immediately next reporting
period following the change in business model. The Company does not restate any previously
recognized gains, losses (including impairment gains or losses) or interest.

De-recognition of financial liabilities

The Company de-recognizes financial liabilities when, and only when, the Company''s obligations are
discharged, cancelled or have expired. An exchange between with a lender of debt instruments with
substantially different terms is accounted for as an extinguishment of the original financial liability and
the recognition of a new financial liability. Similarly, a substantial modification of the terms of an
existing financial liability (whether or not attributable to the financial difficulty of the debtor) is
accounted for as an extinguishment of the original financial liability and the recognition of a new
financial liability. The difference between the carrying amount of the financial liability de-recognized
and the consideration paid and payable is recognized in profit or loss.

3.19 Recent accounting pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended
31^st March, 2025, MCA has notified Ind AS - 117 Insurance Contracts and amendments to Ind AS 116 -
Leases, relating to sale and leaseback transactions, applicable to the Company w.e.f. 1^st April, 2024. The
Company has reviewed the new pronouncements and based on its evaluation has determined that it
does not have any impact in its standalone financial statements.

5.1 During the year, the Company made an additional investment in the WOS by way of conversion of outstanding
unsecured loans given to the WOS amounting to Rs. 2,236.80 Lakhs (equivalent USD 26.90 Lakhs) into 224,167
equity shares of WOS at an issue price of Rs. 997.83 per equity share (equivalent to USD 12 per equity share).

5.2 Based on the Company''s assessment, aggregate impairment provision made upto 31^st March, 2025 (Previous year :
Rs. 810 Lakhs) of Rs. 810 Lakhs is considered as adequate in regard to investment in wholly owned subsidiary
(WOS) and no additional provision is required in the current year. In view of the management, considering the long
term and strategic nature of investment, the balance carrying value of investment would yield the required benefits.

5.3 During the previous year, WOS has regularized the compliance in regard to issue of equity shares against the
contribution made in the past period.

9.1 No trade receivables are due from directors or other officers of the Company either severally or jointly with any other
person. Rs. 1.16 Lakhs (Previous year : Rs. 0.31 Lakhs) is receivable from the WOS having three common directors
and from the Step Down Subsidiary (SDS) of Rs. 1,130.34 Lakhs having three common directors (Previous year : Rs
1,486.49 Lakhs)

9.2 For details of outstanding receivables from related parties. (refer note 39.3)

9.3 Trade receivables are non - interest bearing and are generally on terms of 30 to 270 days.

9.4 Trade receivable includes export bills aggregating to Rs. Nil (Previous year : Rs. 172.19 Lakhs) purchased/
discounted by the bank but pending realisation as on the date of the Balance Sheet & disclosed under working
capital (short term borrowings). The Company has transferred the relevant receivables to the discounting bank in
exchange for cash. However, the Company has retained the late payment and credit risk.

9.5 Refer note 46 for policy on expected credit loss.

9.6 The Company has registered under the Micro, Small and Medium Enterprises Development Act, 2006 [MSMED Act].
The relevant provisions in respect of receivable are applicable to the Company.

In this regard, the Company has filed appeal before tax authorities. Future cash outflows, if any, in respect of the
above is determinable only on disposal of appeal. In the view of the management, the possibility of liability devolving
on the Company in this case is remote.

(C) Claims made by the ex-employees whose services have been terminated in earlier years are not acknowledged as
debt. The matters are frivolous and are disputed under various forums. However, in the opinion of the management,
these claims are not tenable. The possibility of any liability devolving on the Company is remote and hence, no
disclosure as contingent liability is considered necessary.

36. Capital and other commitments

(i) Capital commitment for tangible assets (net of advance paid) - Rs.269.71 Lakhs (Previous year : Rs. 1,097.68
Lakhs) and for intangible assets (net of advance paid) - Nil (Previous year : Nil).

(ii) The Company had imported machinery under the export promotion capital goods (EPCG) scheme to utilise the
benefit of a zero customs duty rate which were subject to future exports. Pending export obligations at year-end
aggregate to Rs. Nil (Previous year Rs. 84.71 Lakhs). (Also, refer note 22.1). The Company is in process of
redemption of such licenses whose export obligations are fully completed.

(iii) The Company''s intention is to continue to provide financial support to its subsidiaries - Pradeep Metals Limited
Inc. (WOS) and Dimensional Machine Works, LLC (SDS).

37. Borrowings secured against current assets

During the year, the Company has taken borrowings from a bank on the basis of security of current assets.
Discrepancies in quarterly returns or statements of current assets filed by the Company to bank with books of
account which are not material (0.13% on average basis) are as mentioned below:

(ii) Fair value hierarchy

The financial instruments are categorized into three levels based on the inputs used to arrive at fair value
measurements as described below:

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

Level 2: Valuation techniques for which lowest level input that is significant to the fair value measurement is
directly or indirectly observable;

Level 3: Valuation techniques for which lowest level input that is significant to the fair value measurement is
directly or indirectly unobservable;

The following tables categorise the financial assets and liabilities held at fair value by the valuation methodology
applied in determining their fair value.

Determination of fair values: The following are the basis of assumptions used to estimate the fair value of financial
assets and liabilities that are measured at fair value.

Derivative instruments : For forward contracts, future cash flows are estimated based on forward exchange rates
(from observable forward exchange rates at the end of the reporting period) and contract forward exchange rates,
discounted at a rate that reflects the credit risk of respective counterparties.

43. Significant estimates and assumptions

The preparation of the Company’s standalone financial statements requires management to make estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying
disclosures, including the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in
future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date,
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year, are described below. The Company based its assumptions and estimates on parameters
available when the standalone financial statements were prepared. Existing circumstances and assumptions about
future developments, however, may change due to market changes or circumstances arising that are beyond the
control of the Company. Such changes are reflected in the assumptions when they occur.

a) Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If
any indication exists, or when annual impairment testing for an asset is required, the Company estimates the
asset’s recoverable amount. An asset''s recoverable amount is the higher of an asset’s or (Cash Generating
Unit) CGU’s fair value less costs of disposal and its value in use. It is determined for an individual asset, unless
the asset does not generate cash inflows that are largely independent of those from other assets or groups of
assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model is used. These calculations involves use of
significant estimates and assumptions which includes turnover and earnings multiples, growth rates and net
margins used to calculate projected future cash flows, risk-adjusted discount rate, future economic and market
conditions.

b) Measurement of defined benefit plan & other long term benefits

The cost of the defined benefit gratuity plan/other long term benefits and the present value of the gratuity
obligation/other long term benefits are determined using actuarial valuations. An actuarial valuation involves
making various assumptions that may differ from actual developments in the future. These include the
determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved
in the valuation and its long-term nature, a defined benefit obligation/other long term benefits is highly sensitive
to changes in these assumptions. All assumptions are reviewed at each reporting date. The cost of the defined
benefit gratuity plan and other long term benefit and the present value of the gratuity obligation and leave benefit
are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may
differ from actual developments in the future. These include the determination of the discount rate, future salary
increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a
defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at
each reporting date.

The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change
only at interval in response to demographic changes. Future salary increases and gratuity increases are based
on management policy for increase in basic salary.

c) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be
measured based on quoted prices in active markets, their fair value is measured using valuation techniques
including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable
markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair
values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in
assumptions about these factors could affect the reported fair value of financial instruments.

d) Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected loss
rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment
calculation based on industry practice, the Company’s past history and existing market conditions as well as
forward looking estimates at the end of each reporting period. The impairment provisions for financial assets are
based on assumptions about risk of default and expected loss rates. The Company uses judgment in making
these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history,
existing market conditions as well as forward looking estimates at the end of each reporting period.

e) Income tax and deferred tax

Provision for tax liabilities require judgements on the interpretation of tax legislation, developments in case law
and the potential outcomes of tax audits and appeals which may be subject to significant uncertainty. Therefore
the actual results may vary from expectations resulting in adjustments to provisions, the valuation of deferred tax
assets, and therefore the tax charge in the statement of profit and loss. Deferred tax assets are recognised only
to the extent that it is probable that future taxable profit will be available against which such deferred tax assets
can be utilized.

f) Provision for inventories

Management reviews the inventory age listing on a periodic basis. This review involves comparison of the
carrying value of the aged inventory item with the respective net realisable value. The purpose is to ascertain
whether an allowance is required to be made in the financial statements for any obsolete and slow-moving items.
Management is satisfied that adequate allowance for absolute and slow-moving/non-moving inventories has
been made in the financial statements.

44. Foreign currency exchange rate risk:

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates
relates primarily to the Company’s export revenue. The Company cover its foreign currency risk by booking forward
contract against exports receivables and confirmed export sales orders. The Company also avails bill discounting
facilities in respect of export receivables.

Since a major part of the Company’s revenue is in foreign currency and major part of the costs are in Indian Rupees,
any movement in currency rates would have impact on the Company’s performance. Consequently, the overall
objective of the foreign currency risk management is to minimize the short term currency impact on its revenue and
cash-flow in order to improve the predictability of the financial performance.

The major foreign currency exposures for the Company are denominated in USD. Additionally, there are
transactions which are entered into in other currencies and are not significant in relation to the total volume of the
foreign currency exposures. The Company hedges export trade receivables (particularly USD and Euro) upto a
maximum of 12 months forward based on historical trends. Hedge effectiveness is assessed on a regular basis.

The following table sets forth information relating to foreign currency exposure from USD, EUR and GBP (which are
not material) form non-derivative financial instruments:

The Company’s principal financial liabilities comprise loans and borrowings, trade payables and financial guarantee
contracts. The main purpose of these financial liabilities is to finance the Company’s operations and finance loans
taken by WOS. The Company’s principal financial assets include loans, trade and other receivables and cash and
cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees
the management of these risks. The Company’s senior management consists of Risk Management Committee
(RMC) that advises on financial risks and the appropriate financial risk governance framework for the Company. The
RMC provides assurance that the Company’s financial risk activities are governed by appropriate policies and
procedures and that financial risks are identified, measured and managed in accordance with the Company’s
policies and risk objectives. It is the Company’s policy that no trading in derivatives for speculative purposes may be
undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are
summarised as below.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price
risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and
borrowings and deposits.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates
primarily to the Company’s long-term debt and short-term debt obligations with floating interest rates. Further, the
Company also avails subvention benefits under MSMED, Act.

Interest rate sensitivity

The Company’s total interest cost the year ended 31^st March, 2025 was Rs. 560.36 Lakhs and for year ended 31^st
March, 2024 was Rs. 484.68 Lakhs. The following table demonstrates the sensitivity to a reasonably possible
change in interest rates on that portion of loans and borrowings affected, with all other variables held constant, the
Company’s profit before tax is affected through the impact on floating rate borrowings, as follows:

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable
market environment.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates
relates primarily to the Company’s export revenue.

The Company covers its foreign currency risk by budgeting exports sales & repeat orders from its overseas
customers and the Company books forward contract against exports receivable. The Company also avails bill
discounting facilities in respect of export receivables

Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the on-going
purchase of steel. Due to significant volatility of the price of the steel, the Company has agreed with its customers for
pass-through of increase/decrease in prices of steel. There may be lag effect in case of such pass-through
arrangement.

Commodity price sensitivity

The Company revises its prices to customers on quarterly basis by considering average raw materials prices
prevailing in the previous quarter implying it passes through any increase in prices thereby minimising the impact on
the profit and loss and equity of the Company.

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade
receivables) and other receivables and deposits, foreign exchange transactions and other financial instruments.

Expected credit loss and Trade receivables

Customer credit risk is managed by the Company’s established policy, procedures and control relating to customer
credit risk management. Further, the Company’s customers includes companies having long standing relationship
with the Company. Outstanding customer receivables are regularly monitored and reconciled. Two customers
accounted for more than 10% of the total receivables as at 31^st March, 2025 (Three customer for 31^st March, 2024).
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a
large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively.
The calculation is based on historical data, past trend and standard percentage norms. The maximum exposure to
credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 12. The
Company does not hold collateral as security . Majority of the export receivable are covered under the insurance
cover. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers
are located in several jurisdictions and industries and operate in largely independent markets. No allowance has
been made for expected credit loss.

Liquidity risk

As per the Company’s policy, there should not be concentration of repayment of loans in a particular financial year. In
case of such concentration of repayment, the Company evaluates the option of refinancing entire or part of
repayments for extended maturity. The Company assessed the concentration of risk with respect to refinancing its
debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt
maturing within 12 months can be rolled over with existing lenders and the Company.

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and
all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s
capital management is to maximise the shareholder value.

The Company manages its capital to ensure that it will be able to continue as a going concern so, that they can
continue to provide returns for the shareholders and benefits for other stakeholders and maintain an optimal capital
structure to reduce cost of capital. The Company manages its capital structure and make adjustments to, in light of
changes in economic conditions, and the risk characteristics of underlying assets. In order to achieve this overall
objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial
covenants attached to the borrowings that define the capital structure requirements.

Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. The ratio is
calculated as net debt divided by equity. Net debt is calculated as total borrowing (including current and non-current
terms loans as shown in the Balance Sheet).

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure
that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure
requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and
borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in
the current period. No changes were made in the objectives, policies or processes for managing capital during the
years ended 31^st March, 2025 and 31^st March, 2024.

47. Segmental disclosure

The Group is primarily engaged in manufacturing of closed die steel forging & processing and generating power
from wind turbine generator and solar power generating system.

iii) Reliance on major customers: No customer represents more than 10% of the total revenue. Total revenue from
this major customer amounts to Rs. Nil . In case of previous year, one customer represented more than 10% of
total revenue whose revenue amounted to Rs. 2,422.11 Lakhs.

Notes:

a) The operating segments have been reported in a manner consistent with the internal reporting provided to the
Corporate Management Committee, which is the Chief Operating Decision Maker.

b) The business segment comprise the following:

a) Closed Die Forging and Processing

b) Power Generation

c) The geographical information considered for disclosure are: Sales within India and Sales outside India
18. Hedge Accounting

The Company has managed the foreign exchange risk with appropriate hedging activities in accordance with
policies of the Company. The Company’s manages currency risk as per trends and experiences. The Company
uses forward exchange contracts to hedge against its foreign currency exposures relating to export receivables.
The Company does not enter into any derivative instruments for trading or speculative purposes.

Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective
effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging
instrument, including whether the hedging instrument is expected to offset changes in cash flows of hedged items.

If the hedge ratio for risk management purposes is no longer optimal but the risk management objective remains
unchanged and the hedge continues to qualify for hedge accounting, the hedge relationship will be rebalanced by
adjusting either the volume of the hedging instrument or the volume of the hedged item so that the hedge ratio aligns
with the ratio used for risk management purposes.

50.1 Since the Company has spent in excess of the amount which was required to be spent for 2024-25, the Company is
entitled to carry forward the amount spent of Rs. 0.15 Lakhs (Previous Year - Rs. 0.23 Lakhs) to subsequent three
financial years respectively which can be set off against CSR obligations of these years. However, for accounting
purpose, cumulative excess amount spent of Rs. 0.15 Lakhs (Previous Year - Rs.0.23 Lakhs) is not considered as
prepaid expenses.

51. Defined benefits and other long term benefit plans
(a) Gratuity plan
Funded scheme

The Company has a defined benefit gratuity plan for its employees. The gratuity plan is governed by the payment of
Gratuity Act, 1972. Under the Act, every employee who has completed five years of service is entitled to specific
benefit. The level of benefits provided on the employee''s length of service and salary retirement age. Every
employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last
drawn) for each completed year of service as per the provisions of the payment of Gratuity Act, 1972. The scheme is
funded with insurance company in the form of a qualifying insurance policy.

Risk exposure and asset-liability matching

Provision of a defined benefit scheme poses certain risks, some of which are detailed hereunder, as companies take
on uncertain long term obligations to make future benefits payments.

I. Liability risks

(a) Asset-liability mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching
duration with the defined benefit liabilities, the Company is successfully able to neutralize valuation swings
caused by interest rate movements.

b) Discount rate risk

Variations in the discount rate used to compute the present value of the liabilities may seem small, but in
practice have a significant impact on the defined benefit liabilities.

c) Future salary escalation and inflation risk

Since price inflation and salary growth are linked economically, they are combined for disclosure purposes.
Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of
liabilities especially unexpected salary increase provided at the management''s discretion may lead to
uncertainties in estimating this increasing risk.

II. Asset Risks

All plan assets are maintained in a trust fund managed by a public sector insurer viz. LIC of India. LIC has a
sovereign guarantee and has been providing consistent and competitive returns over the years. The Company
has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company
has no control over the management of funds but this option provides a high level of safety for the total corpus. A
single account is maintained for both the investment and claim settlement and hence 100% liquidity is ensured.

The following table summarises the components of net benefit expense recognised in the statement of profit and
loss and the funded status and amounts recognised in the Balance Sheet for the gratuity plan. The principal
assumptions used in determining gratuity for the Company''s plan is shown below:

53. Cash flow statement related

53.1 Aggregate outflow on account of direct taxes paid (net of refund) is Rs. 755.62 Lakhs (Previous year : Rs. 524.99
Lakhs).

53.2 Net cash inflow from operating activity netted off with Corporate Social Responsibility (CSR) expenditure of Rs.
46.60 lakhs (Previous year : Rs. 40.25 Lakhs) (Refer note 50).

53.3 Disclosure as required by Ind AS 7

Reconciliation of liabilities arising from financing activities

56. Subsequent Events: There are no significant subsequent events that would require adjustments or disclosures in
the financial statement between the Balance Sheet date and the date of signing of accounts.

57. As on 31^st March, 2025, the Company has not been declared wilful defaulter by any bank/ financial institution or
other lender.

58. The Company is not engaged in the business of trading or investing in crypto currency or virtual currency and hence
no disclosure is required.

59. The Company has not advanced any funds or loaned or invested by the Company to or in any other person(s) or
entities, including foreign entities (“Intermediaries”), with the understanding that the intermediary shall whether
directly or indirectly lend or invest in other persons or entities identified in any manner by or on behalf of the
Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of ultimate beneficiaries.

The Company has not received any funds from any person(s) or entities including foreign entities (“Funding
Parties”) with the understanding that such Company shall whether, directly or indirectly, lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries)
or provide guarantee, security or the like on behalf of the Ultimate beneficiaries.

60. No proceedings have been initiated or are pending against the Company as on 31^st March, 2025 for holding any
benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

61. The Company does not have any transaction with companies struck off under section 248 of Companies Act, 2013
or section 560 of Companies Act, 1956 and hence no disclosure is required.

62. The Board of Directors of the Company at their Meeting held on 3^rd March, 2025, have approved the Scheme of
Amalgamation of Nami Capital Private Limited (“NCPL” or “Transferor Company”) with Pradeep Metals Limited
("PML" or "Transferee Company") and their respective Shareholders (“Scheme”) under sections 230 to 232 read
with Section 66 and other relevant provisions of the Companies Act, 2013. The Company has filed an application
with BSE Limited under Regulation 37 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, seeking its in-principal approval / no-objection to the proposed Scheme. The Scheme is subject to receipt of
necessary statutory and regulatory approvals, including the approval of the Hon’ble National Company Law
Tribunal, Mumbai Bench, and such other approvals as may be required under applicable laws.

Notes referred to herein above form an integral part of the standalone financial statements.

As per our report of even date attached

For N. A. Shah Associates LLP For and on behalf of the Board of Directors of

Chartered Accountants Pradeep Metals Limited

Firm Registration No.116560W/W100149

Bhavin Kapadia Pradeep Goyal Neeru Goyal

Partner Chairman and Managing Director Director

Membership No. 118991 DIN: 00008370 DIN: 05017190

Place: Mumbai Place: Mumbai

Date: 22^nd May, 2025 Date: 22^nd May, 2025

^Place: Mum^bai Abhishek Joshi Kavita Choubisa Ojha

^{Date: 22}" IVI^ ²⁰²⁵ Company Secretary Chief Financial Officer

Membership No. 64446 PAN: ATTPC7818E

Place: Mumbai Place: Mumbai

Date: 22^nd May, 2025 Date: 22^nd May, 2025

---

Mar 31, 2024

5.1 During the year, WOS has regularized the compliance in regard to issue of equity shares against the contribution made in the past period.

5.2 Based on the Company''s assessment, aggregate impairment provision made upto 31^st March, 2023 of Rs. 810 Lakhs is considered as adequate in regard to investment in wholly owned subsidiary (WOS) (including share application money) and no additional provision is required in the current year. In view of the management, considering the long term and strategic nature of investment, the balance carrying value of investment would yield

6.1 During the year ended 31^st March, 2024, the Board of Directors of the Company have approved for additional investment in the WOS by way of conversion of outstanding unsecured loans given to the WOS aggregate in to Rs. 2,236.80 Lakhs (equivalent USD 26.90 Lakhs) into equity share capital of the WOS. The shares shall be alloted by the WOS on completion of regulatory compliances.

6.2 No loans and advances are due from directors or other officers of the Company either severally or jointly with any other person. Rs. Nil (Previous year : Rs. 2,087.12 Lakhs) is receivable from a wOs having three common directors.

10.2 For details of outstanding receivables from related parties. (refer note 40.3)

10.3 T rade receivables are non - interest bearing and are generally on terms of 30 to 270 days.

10.4 Trade receivable includes export bills aggregating to Rs. 172.19 Lakhs (Previous year : Rs. 299.69 Lakhs) purch-ased/discounted by the bank but pending realisation as on the date of the Balance Sheet & disclosed under working capital (short term borrowings). The Company has transferred the relevant receivables to the discounting bank in exchange for cash. However, the Company has retained the late payment and credit risk.

10.5 Refer note 47 for policy on expected credit loss.

10.6 The Company has registered under the Micro, Small and Medium Enterprises Development Act, 2006 [MSMED Act]. The relevant provisions in respect of receivable are applicable to the Company.

15.3 The Company has only one class of issued shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed, if any, by the Board of Directors shall be subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

17.1 Details of security provided

(i) All Term loans (Foreign currency loans & Rupee loans) are secured by first pari passu charge created on property, plant and equipment of the Company (present and future) and second charge on entire current assets of the Company (refer Note 4.9). The loans are further secured by personal guarantee of Chairman & Managing Director of the Company.

(ii) Vehicle loan is secured against security of vehicle financed and further guaranteed by personal guarantee of Chairman & Managing Director of the Company.

19.7 The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority and intends either to settle on a net basis. Deferred tax asset has not been recognised on impairment in the value of investment of Rs. 810 Lakhs (Previous year - Rs. 810 Lakhs) and Provision for doubtful capital advances Rs. 50 Lakhs (Previous year Rs. 50 Lakhs) in the absence of reasonable certainty of its reversal in future.

19.8 The Company applied deferred tax related to Assets and Liabilities arising from single transaction (Amendments to Ind AS 12) from 1^st April, 2023. Following the amendments, the Company has recognised a separate deferred tax asset in relation to its lease liabilities and deferred tax liability in relation to right of use assets.

21.3 Terms & conditions of the above financial liabilities:

Trade payables are non-interest bearing and are generally settled on 15 to 90 days terms. For details of balances outstanding of related parties, refer note 40.3.

23.1 Income received in advance mainly includes amount of grants (in the nature of export benefits) of Rs.14.11 Lakhs (previous year : Nil) relating to property, plant and equipment imported under the EPCG scheme. Under such scheme, the Company is committed to export prescribed times of the duty saved on import of capital goods over a specified period of time. In case such commitments are not met, the Company would be required to pay the duty saved along with interest to the regulatory authorities. Also refer note 37(ii).

25.1 Disclosures of Ind AS 115 - Revenue from contracts with customers:

(a) Contracts with customer and significant judgement in applying the standard:

(i) The Company''s operations relates to manufacturing and selling of forged and machined components for various sectors. The Company caters to both domestic and international markets. The Company applies the guidance provided in Ind AS 115 ''Revenue from contracts with customer'' for determining the timing of recognition of revenue. Refer material accounting policies on Revenue recognition.

(ii) For details of revenue recognised from contracts with customers, refer note 25.2 below.

(iii) There are no contract assets arising from the Company''s contract with customers.

(b) Disaggregation of revenue:

(i) For disaggregation of revenue, refer break-up given in note 25 above, note 49.1 and note 49.4 (i)

(ii) Refer note 49.4(iii) for details regarding customer concentration that represents 10% or more of the Company’s total revenue during the year ended 31^st March, 2024 and 31^st March, 2023.

(c) Performance obligation

(i) For timing of satisfaction of its performance obligations, refer note 3.6 of material accounting policies of the Company.

36 (A)	Contingent liabilities Contingent liabilities are determined on the basis of available information and are disclosed in the notes to the standalone financial statements. Details of contingent liabilities not provided for are given below: jn |_a|(hs)
	Particulars	As at March 31, 2024	As at March 31, 2023
	(a) Claim against the Company not acknowledged as debts (net)	26.25	26.25
	(b) Letters of guarantee issued by bank	125.47	124.47
	(c) Corporate guarantees given for loans taken by Pradeep Metals Limited, Inc. wholly owned subsidiary Outstanding as on 31st March, 2024 USD 998,160 (Previous year : USD 1,298,201) (Refer Notes 4.10 & 5.1)*	832.52	1,066.73
	* Converted in INR at exchange rate of year end i.e. Rs. 83.405 (Previous year: Rs. 82.17)

(i) In respect of (b) and (c) above, the Company does not expect any cash outflow till such time contractual obligations are fulfilled.

(ii) In respect of (a) future cash out flows (including interest/penalty) are determinable on receipt of judgments from the statutory authorities/labour court.

In this regard, the Company has filed appeal before tax authorities. Future cash outflows, if any, in respect of the above is determinable only on disposal of appeal. In the view of the management, the possibility of liability devolving on the Company in this case is remote.

(C) Claims made by the ex-employees whose services have been terminated in earlier years are not acknowledged as debt. The matters are frivolous and are disputed under various forums. However, in the opinion of the management, these claims are not tenable. The possibility of any liability devolving on the Company is remote and hence, no disclosure as contingent liability in considered necessary.

37 Capital and other commitments

(i) Capital commitment for tangible assets (net of advance paid) - Rs.1,097.68 Lakhs (Previous year : Rs. 1,171.10 Lakhs) and for intangible assets (net of advance paid) - Nil (Previous year : Nil).

(ii) The Company has imported a machinery under the export promotion capital goods (EPCG) scheme to utilise the benefit of a zero customs duty rate. These benefits are subject to future exports. Such pending export obligations at year end aggregate to Rs. 84.71 Lakhs (Previous year: Nil).

(iii) The Company''s intention is to continue to provide financial support to its subsidiaries - Pradeep Metals Limited Inc. (WOS) and Dimensional Machine Works, LLC (SDS).

38 Borrowings secured against current assets

During the year, the Company has taken borrowings from a bank on the basis of security of current assets. Discrepancies in quarterly returns or statements of current assets filed by the Company to bank with books of account which are not material (0.45% on average basis) are as mentioned below:

39 Leases:

Company as lessee:

I) Disclosures as per Ind AS 116- Leases

a) The Company has taken factory premises (Dhanlabh) and machinery under lease agreements and the Company has obtained factory land on leasehold basis from local authorities.

#Converted in INR at exchange rate of year end i.e. Rs. 83.4050 (Previous year : Rs. 82.17). For corporate guarantees given to Pradeep Metals Limited, Inc., refer note 36.

Note: In addition to above transactions, Chairman & Managing Director of the Company has given personal guarantee for loan facilities taken by the Company, No guarantee charges are payable by the Company (Refer note

17.1 & 20.1)

The management assessed that the fair value of cash and cash equivalent, trade payables and other current financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments. The fair value of the financial assets and liabilities is 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.

(ii) Fair value hierarchy

The financial instruments are categorized into three levels based on the inputs used to arrive at fair value measurements as described below:

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

Level 2: Valuation techniques for which lowest level input that is significant to the fair value measurement is directly or indirectly observable;

Level 3: Valuation techniques for which lowest level input that is significant to the fair value measurement is directly or indirectly unobservable;

The following tables categorise the financial assets and liabilities held at fair value by the valuation methodology applied in determining their fair value.

Determination of fair values: The following are the basis of assumptions used to estimate the fair value of financial assets and liabilities that are measured at fair value.

Derivative instruments : For forward contracts, future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contract forward exchange rates, discounted at a rate that reflects the credit risk of respective counterparties.

44 Significant estimates and assumptions

The preparation of the Company’s standalone financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures, including the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the standalone financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

a) Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If

any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset''s recoverable amount is the higher of an asset’s or (Cash Generating Unit) CGU’s fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations involves use of significant estimates and assumptions which includes turnover and earnings multiples, growth rates and net margins used to calculate projected future cash flows, risk-adjusted discount rate, future economic and market conditions.

b) Measurement of defined benefit plan & other long term benefits

The cost of the defined benefit gratuity plan/other long term benefits and the present value of the gratuity obligation/other long term benefits are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation/other long term benefits is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The cost of the defined benefit gratuity plan and other long term benefit and the present value of the gratuity obligation and leave benefit are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on management policy for increase in basic salary.

c) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

d) Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation based on industry practice, the Company’s past history and existing market conditions as well as forward looking estimates at the end of each reporting period. The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

e) Income tax and deferred tax

Provision for tax liabilities require judgements on the interpretation of tax legislation, developments in case law and the potential outcomes of tax audits and appeals which may be subject to significant uncertainty. Therefore the actual results may vary from expectations resulting in adjustments to provisions, the valuation of deferred tax assets, cash tax settlements and therefore the tax charge in the statement of profit and loss. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which such deferred tax assets can be utilized.

f) Provision for inventories

Management reviews the inventory age listing on a periodic basis. This review involves comparison of the carrying value of the aged inventory item with the respective net realisable value. The purpose is to ascertain whether an allowance is required to be made in the financial statements for any obsolete and slow-moving items. Management is satisfied that adequate allowance for absolute and slow-moving/non-moving inventories has been made in the financial statements.

45 Derivatives not designated as hedging instruments

The Company evaluates the option of foreign exchange forward contracts to manage foreign exchange fluctuation risk. These foreign exchange forward contracts are not designated as cash flow hedges and are entered into for periods consistent with foreign currency exposure of the underlying transactions i.e. the repayments of foreign currency denominated borrowings. Refer note 46 and 50 for detailed disclosure of unhedged/hedged items.

46 Foreign currency exchange rate risk:

"Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s export revenue and long term foreign currency borrowings. The Company cover its foreign currency risk by budgeting exports sales & repeat orders from its overseas customers and the Company books forward contract against exports receivables. The Company also avails bill discounting facilities in respect of export receivables.

Since a major part of the Company’s revenue is in foreign currency and major part of the costs are in Indian Rupees, any movement in currency rates would have impact on the Company’s performance. Consequently, the overall objective of the foreign currency risk management is to minimize the short term currency impact on its revenue and cash-flow in order to improve the predictability of the financial performance.

The major foreign currency exposures for the Company are denominated in USD. Additionally, there are transactions which are entered into in other currencies and are not significant in relation to the total volume of the foreign currency exposures. The Company hedges all trade receivables upto a maximum of 12 months forward based on historical trends. Hedge effectiveness is assessed on a regular basis.

The Company’s principal financial liabilities comprise loans and borrowings, trade payables and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Company’s operations and finance loans taken by WOS. The Company’s principal financial assets include loans, trade and other receivables and cash and cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management consists of Risk Management Committee (RMC) that advises on financial risks and the appropriate financial risk governance framework for the Company. The RMC provides assurance that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised as below.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings and deposits.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt and short-term debt obligations with floating interest rates. Further, the Company also avails subvention benefits as MSME as it is registered under MSMED, Act.

Interest rate sensitivity

The Company’s total interest cost the year ended 31^st March, 2024 was Rs. 484.68 Lakhs and for year ended 31^st March, 2023 was Rs. 376.95 Lakhs. The following table demonstrates the sensitivity to a reasonably possible

change in interest rates on that portion of loans and borrowings affected, with all other variables held constant, the Company’s profit before tax is affected through the impact on floating rate borrowings, as follows:

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s export revenue.

The Company covers its foreign currency risk by budgeting exports sales & repeat orders from its overseas customers and the Company books forward contract against exports receivable. The Company also avails bill discounting facilities in respect of export receivables.

Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the on-going purchase of steel. Due to significant volatility of the price of the steel, the Company has agreed with its customers for pass-through of increase/decrease in prices of steel. There may be lag effect in case of such pass-through arrangement.

Commodity price sensitivity

The Company revises its prices to customers on quarterly basis by considering average raw materials prices prevailing in the previous quarter implying it passes through any increase in prices thereby minimising the impact on the profit and loss and equity of the Company.

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and other receivables and deposits, foreign exchange transactions and other financial instruments.

Expected credit loss and Trade receivables

Customer credit risk is managed by the Company’s established policy, procedures and control relating to customer credit risk management. Further, the Company’s customers includes companies having long standing relationship with the Company. Outstanding customer receivables are regularly monitored and reconciled. Three customers accounted for more than 10% of the total receivables as at 31^st March, 2024 (One customer for 31^st March 2023). An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively. The calculation is based on historical data, past trend and standard percentage norms. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 13. The Company does not hold collateral as security . Majority of the export receivable are covered under the insurance cover. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. No allowance has been made for expected credit loss.

Liquidity risk

As per the Company’s policy, there should not be concentration of repayment of loans in a particular financial year. In case of such concentration of repayment, the Company evaluates the option of refinancing entire or part of repayments for extended maturity. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders and the Company.

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximise the shareholder value.

The Company manages its capital to ensure that it will be able to continue as a going concern so, that they can continue to provide returns for the shareholders and benefits for other stakeholders and maintain an optimal capital structure to reduce cost of capital. The Company manages its capital structure and make adjustments to, in light of changes in economic conditions, and the risk characteristics of underlying assets. In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings that define the capital structure requirements.

Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. The ratio is calculated as net debt divided by equity. Net debt is calculated as total borrowing (including current and non-current terms loans as shown in the Balance Sheet).

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period. No changes were made in the objectives, policies or processes for managing capital during the years ended 31^st March, 2024 and 31^st March, 2023.

49. Segmental disclosure

The Group is primarily engaged in manufacturing of closed die steel forging & processing and generating power from wind turbine generator and solar power generating system.

iii) Reliance on major customers: One customer represents more than 10% of the total revenue. Total revenue from this major customer amounts to Rs. 2,422.11 Lakhs. In case of previous year also, one customer represented more than 10% of total revenue whose revenue amounted to Rs. 2,520.09 Lakhs.

Notes:

a) The operating segments have been reported in a manner consistent with the internal reporting provided to the Corporate Management Committee, which is the Chief Operating Decision Maker.

b) The business segment comprise the following:

a) Closed Die Forging and Processing

b) Power Generation

c) The geographical information considered for disclosure are: Sales within India and Sales outside India

50 Hedge Accounting

The Company has managed the foreign exchange risk with appropriate hedging activities in accordance with policies of the Company. The Company’s manages currency risk as per trends and experiences. The Company uses forward exchange contracts to hedge against its foreign currency exposures relating to export receivables. The Company does not enter into any derivative instruments for trading or speculative purposes.

52.1 Since the Company has spent in excess of the amount which was required to be spent for 2023-24, the Company is entitled to carry forward the amount spent of Rs. 0.23 Lakhs (Previous Year - Rs. 0.21 Lakhs) to subsequent three financial years respectively which can be set off against CSR obligations of these years. However, for accounting purpose, cumulative excess amount spent of Rs. 0.23 Lakhs (Previous Year - Rs.0.21 Lakhs) is not considered as prepaid expenses.

53 Defined benefits and other long term benefit plans (a) Gratuity plan Funded scheme

The Company has a defined benefit gratuity plan for its employees. The gratuity plan is governed by the payment of Gratuity Act, 1972. Under the Act, every employee who has completed five years of service is entitled to specific benefit. The level of benefits provided on the employee''s length of service and salary retirement age. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn) for each completed year of service as per the provisions of the payment of Gratuity Act, 1972. The scheme is funded with insurance company in the form of a qualifying insurance policy.

Risk exposure and asset-liability matching

Provision of a defined benefit scheme poses certain risks, some of which are detailed hereunder, as companies take on uncertain long term obligations to make future benefits payments.

I. Liability risks

(a) Asset-liability mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the Company is successfully able to neutralize valuation swings caused by interest rate movements.

b) Discount rate risk

Variations in the discount rate used to compute the present value of the liabilities may seem small, but in practice have a significant impact on the defined benefit liabilities.

c) Future salary escalation and inflation risk

Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities especially unexpected salary increase provided at the management''s discretion may lead to uncertainties in estimating this increasing risk.

II. Asset Risks

All plan assets are maintained in a trust fund managed by a public sector insurer viz. LIC of India. LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The Company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company has no control over the management of funds but this option provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement and hence 100% liquidity is ensured.

The following table summarises the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the Balance Sheet for the gratuity plan. The principal assumptions used in determining gratuity for the Company''s plan is shown below:

The estimates of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

(b) Leave benefits

Liability for leave benefits which are long term in nature (Privilege and sick leave) are unfunded and actuarially determined considering the leave policy/rules of the Company. The total liability for leave benefits as at year end is Rs.152.95 Lakhs (Previous year : Rs.142.23 Lakhs).

54 Defined contribution plan

In accordance with the law, all employees of the Company are entitled to receive benefits under the provident fund and ESIC. Under the defined contribution plan, provident fund, ESIC and LWF is contributed to the government administered fund. The Company has no obligation, other than the contribution payable to the provident fund, Pension fund, ESIC and LWF.

55 Cash flow statement related

55.1 Aggregate outflow on account of direct taxes paid (net of refund) is Rs. 524.99 Lakhs (Previous year : Rs. 733.22 Lakhs).

55.2 Net cash inflow from operating activity netted off with Corporate Social Responsibility (CSR) expenditure of Rs. 40.25 Lakhs (Previous year : Rs. 35.30 Lakhs) (Refer note 52).

55.3 Disclosure as required by Ind AS 7

Reconciliation of liabilities arising from financing activities

57 The Board of directors has recommended a final dividend of Rs.2 per equity share on face value of Rs. 10/- each for

financial year 2023-24 on board meeting held on 17^th May 2024, subject to approval of shareholders in ensuing Annual General Meeting. The total estimated equity dividend to be paid is Rs. 345.40 Lakhs. Further, during the year, the Company has paid final dividend of Re.1 per equity share declared for the year ended 31^st March, 2023 post approval of the shareholders at the AGM held on 4^th August, 2023.

58 Subsequent Events: There are no significant subsequent events that would require adjustments or disclosures in the financial statement between the Balance Sheet date and the date of signing of accounts.

59 As on 31^st March, 2024, the Company has not been declared wilful defaulter by any bank/ financial institution or other lender.

60 The Company is not engaged in the business of trading or investing in crypto currency or virtual currency and hence no disclosure is required.

61 The Company has not advanced any funds or loaned or invested by the Company to or in any other person(s) or entities, including foreign entities (“Intermediaries”), with the understanding that the intermediary shall whether directly or indirectly lend or invest in other persons or entities identified in any manner by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of ultimate beneficiaries.

The Company has not received any funds from any person(s) or entities including foreign entities (“Funding Parties”) with the understanding that such Company shall whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or provide guarantee, security or the like on behalf of the Ultimate beneficiaries.

62 No proceedings have been initiated or are pending against the Company as on 31^st March, 2024 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

63 The Company does not have any transaction with companies struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956 and hence no disclosure is required.

64 The Company has not entered into any scheme of arrangements in terms of sections 230 to 237 of the Companies Act, 2013.

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Mar 31, 2018

1. Background

Pradeep Metals Limited (“the Company”) is a public Company domiciled in India and incorporated under the provisions of Companies Act, 1956. The Company''s shares are listed on Bombay Stock Exchange in India. The Company is engaged in the manufacturing and selling of forged and machined components for various sectors. The Company caters to both domestic and international markets. The registered office and manufacturing facility of the Company is located at Navi Mumbai. The Company''s CIN is L99999MH1982PLC026191.

The financial statements were authorized for issue in accordance with a resolution of the Directors on 9^th May, 2018.

2. Basis of preparation

2.1. Statement of compliance with Ind AS

The financial statements (on standalone basis) of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.

For all periods up to and including the year ended 31^st March 2017, the Company had prepared its standalone financial statements in accordance with the Accounting Standards notified under Section 133 of the Companies Act, 2013 read together with the Companies (Accounts) Rules 2014 (referred as “Indian GAAP”). These are the Company''s first annual financial statements prepared complying in all material respects with the Ind AS notified under Section 133 of the Companies Act, 2013.

The standalone financial statements comply with Ind AS notified by the Ministry of Corporate Affairs (‘MCA''). The Company has consistently applied the accounting policies used in the preparation of its opening Ind AS Balance Sheet at 1^st April 2016 throughout all periods presented, as if these policies had always been in effect and are covered by Ind AS 101 “First-time adoption of Indian Accounting Standards''''. The transition was carried out from Indian GAAP which is considered as the previous GAAP, as defined in Ind AS 101. The reconciliation of effects of the transition from Indian GAAP on the equity as at 1^st April 2016 and 31^st March 2017 and on the net profit and cash flows for the year ended 31^st March 2017 is disclosed in note 55 to these standalone financial statements.

2.2. Overall consideration

The standalone financial statements have been prepared on going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at 1^st April, 2016 being the ‘date of transition to Ind AS''. These financial statements are prepared under the historical cost convention unless otherwise indicated.

The standalone financial statement has been prepared considering all Ind AS notified by MCA till reporting date i.e. 31^st March 2018. The significant accounting policies used in preparing the financial statements are set out in note 3 of the notes to the standalone financial statement.

In accordance with Ind AS 101, “First time adoption of Indian Accounting Standard”, the Company has presented three year figures for balance sheet, two years figures for statement of profit and loss, two years figures for statement of cash flows and two years figures for statement of changes in equity and related notes, including comparative information for all statements presented, in its first Ind AS financial statements. In future periods, Ind AS 1, ‘Presentation of Financial Statements'' requires two comparative periods to be presented for the balance sheet only in certain circumstances.

2.3. Functional and presentation currency

The financial statements are prepared in Indian Rupees which is also the Company''s functional currency. All amounts are rounded to the nearest rupees in lakhs.

2.4. Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal market or the most advantageous market must be accessible to the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole. The fair value hierarchy is described as below:

Level 1 - Unadjusted quoted price in active markets for identical assets and liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly Level 3 - unobservable inputs for the asset or liability

For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of fair value hierarchy. Fair values have been determined for measurement and / or disclosure purpose using methods as prescribed in “Ind AS 113 Fair Value Measurement”.

2.5. Use of significant accounting estimates, judgements and assumptions

The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS requires management to make estimates and assumptions that affect the reported balances of assets and liabilities, disclosure of contingent liabilities as on the date of financial statements and reported amounts of income and expenses for the periods presented. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods are affected.

Key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Significant estimates and critical judgement in applying these accounting policies are described below:

i) Property, plant & equipment and Intangible assets

The Company has estimated the useful life, residual value and method of depreciation / amortisation of property, plant & equipment and intangible assets based on its internal technical assessment. Property, plant & equipment and intangible assets represent a significant proportion of the asset base of the Company. Further, the Company has estimated that scrap value of property, plant & equipment would be able to cover the residual value & decommissioning costs of property, plant & equipment.

Therefore, the estimates and assumptions made to determine useful life, residual value, method of depreciation / amortisation and decommissioning costs are critical to the Company''s financial position and performance.

ii) Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or (Cash Generating Unit) CGU''s fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations involves use of significant estimates and assumptions which includes turnover and earnings multiples, growth rates and net margins used to calculate projected future cash flows, risk-adjusted discount rate, future economic and market conditions.

iii)Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation based on industry practice, Company''s past history and existing market conditions as well as forward looking estimates at the end of each reporting period.

iv) Contingencies

Management judgement is required for estimating the possible outflow of resources, if any, in respect of contingencies / claim / litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

v) Income taxes

Provision for tax liabilities require judgements on the interpretation of tax legislation, developments in case law and the potential outcomes of tax audits and appeals which may be subject to significant uncertainty. Therefore the actual results may vary from expectations resulting in adjustments to provisions, the valuation of deferred tax assets, cash tax settlements and therefore the tax charge in the statement of profit and loss.

Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which such deferred tax assets can be utilized. Currently, the Company has recognised the deferred tax on unused tax losses / unused tax credits only to the extent of the corresponding deferred tax liability. Any increase in probability of future taxable profit will result into recognition of unrecognised deferred tax assets.

vi) Measurement of defined benefit plan & other long term benefits

The cost of the defined benefit gratuity plan / other long term benefits and the present value of the gratuity obligation / other long term benefits are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation / other long term benefits is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

vii)Impairment of investment in subsidiaries

In the opinion of the management, investments in subsidiaries are considered long term and strategic in nature and in view of future business growth / asset base, the value of long term investments are considered good. Considering adverse factors which could severely affect the financial position, expansion plans and on consideration of prudence, provision is not made for impairment of such investment.

4.4 The Company has elected to continue with the carrying value of property, plant & equipments and intangible assets as recognised in financial statements as per Indian GAAP and regard those values as deemed costs on the date of transition i.e 1st April 2016.

4.5 Factory Building is constructed on Leasehold Land.

4.11 First pari passu charge has been created on fixed assets of the Company (present and future) in respect of loans taken by the Company (Refer Note 17.1) and on fixed assets of the Company (excluding Windmill) in respect of foreign currency loan of USD 2.750 Million outstanding as on 31st March 2018 (Outstanding as on 31st March 2017- USD 1.800 Million) (Outstanding as on 1st April 2016 - USD 2.000 Million) taken by Pradeep Metals Limited, Inc. (Wholly Owned Subsidiary) in USA from Union Bank of India, Hong Kong.

5.1 Out of above, 60 Shares are pledged with Union Bank of India, Hong Kong and non - disposal undertaking given to them in respect of balance 140 shares in connection with Foreign Currency Loan of USD 3.200 Million taken by Pradeep Metals Limited, Inc. USA (Outstanding as on 31st March 2018 - USD 2.750 Million) (Outstanding as on 31st March 2017 - USD 1.800 Million) (Outstanding as on 1st April 2016 - USD 2.000 Million).

5.2 In view of the settlement of dispute with the erstwhile JV Partner of the step-down subsidiary (SDS) of the Company during the year, SDS became the wholly owned subsidiary (WOS) of the WOS of the Company. The improved performance of the WOS and SDS during the year and revival of the demand for their products and considering that the investment made in WOS is of strategic nature, in the opinion of management, no provision for diminution in the value of investment in WOS and loan given is required as at 31st March 2018.

7.1 No loans and advances are due from directors or other officers of the Company either severally or jointly with any other person.

7.2 Loans are non derivative financial assets which generate fixed interest income for the Company. The carrying valve may be affected by changes in the credit risk of the counter party.

11.1 No trade receivables are due from directors or other officers of the Company either severally or jointly with any other person.

11.2 For details of outstanding receivables from related parties. (Refer note 38.3)

11.3 Trade receivables are non - interest bearing and are generally on terms of 30 to 270 days.

11.4 Trade receivable includes export bills aggregating to Rs.1,529.44 lakhs (31st March 2017: Rs.1,627.63 lakhs and 1st April 2016: Rs.1,271.44 lakhs) purchased / discounted by the bank but pending realisation as on the date of the Balance Sheet & disclosed under working capital (short term borrowing). The Company has transferred the relevant receivables to the discounting bank in exchange for cash.

However, the Company has retained the late payment and credit risk.

11.5 Trade receivable includes Rs. Nil (31st March 2017 Rs. 0.35 lakh & 1st April 2016 Rs. 0.21 lakh) receivable from private Company having common director.

11.6 Refer note 44 for policy on expected credit loss

* as on 31st March 2018, holding is not more than 5% and hence figures are not disclosed.

** as on 1st April 2016, holding is not more than 5% and hence figures are not disclosed.

15.5 The Company has only one class of issued shares having a par value of R. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed, if any, by the Board of Directors shall be subject to the approval of the shareholders in the ensuring Annual General Meeting.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets ot the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

15.6 Shares held by holding company and /or their subsidiaries

The Company being ultimate holding company, there are no shares held by any other holding, ultimate holding company and their subsidiaries.

3. Securities premium account

Securities premium account is used to record the premium on issue of equity shares. The same shall be utilised in accordance with the provisions of the Companies Act, 2013.

17.1 Details of security provided

(i) Term loans (Foreign currency loans & Rupee loans) are secured by charge on pari passu basis on fixed assets of the Company (present and future) and second charge on current assets. The loans are further secured by personal guarantee of Chairman and Managing Director of the Company.

(ii) Vehicle loan is secured against hypothecation of the vehicle against which the loan has been taken. The loan is further secured by personal guarantee of Chairman and Managing Director and one Director of the Company.

19.8 The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

20.1 Details of security provided on working capital loans

Working capital loans are secured by first charge on pari passu basis against hypothecation of stocks of semi-finished and finished goods, raw materials, consumable sores and spares (also refer note 10), book debts (also refer note 11) including biils discounted / purchased and second charge on its fixed assets. The loans are further secured by personal guarantee of Chairman & Managing Director of the Company.

21.1 Under the Micro, Small and Medium Enterprises Development Act, 2006 [MSMED Act], certain disclosures are required to be made relating to Micro and Small Enterprises. The Company has disclosed such information only to the extent received from suppliers about their coverage under the MSMED Act. Auditor''s have relied on the same.

Note :

Provision for contingency represents provision for (a) expected margin on sales return and (b) provision for disputed Navi Mumbai Municipal Cess (‘NMMC''). In respect of (a) the outflow is expected to be within a period of one year. In respect of (b),the Company had paid Rs.60.29 lakhs under protest. During the year, Company has adjusted the payment under protest to the extent of expected liability though the outcome of appeal is pending to be received. Expected outflow of interest / penalty depends on outcome of the appeal filed.

31.1 The foreign exchange loss relating to foreign currency term loans and working capital loans to the extent considered as an adjustment to the interest cost.

(i) In respect of (a) and (d) above, the Company does not expect any cash outflow till such time contractual obligations are fulfilled.

(ii) In respect of (b) and (c) above, future cash out flows (including interest / penalty) are determinable on receipt of judgments from tax authorities / labour court.

(iii) In respect of (b) above, during the year, the Company has adjusted the payment made under protest of Rs. 60.29 lakhs against the provision made of Rs.60.44 lakhs (31st March 2017: Rs.34.94 lakhs). The hearing for appeal is under progress. Cash outflow for interest and penalty can be determined only upon the outcome of the appeal.

(b)The Company had received order under Income Tax Act for Assessment Year 2015-16 in earlier year as per which the department has withhold refund to the extent of credit of dividend taxes paid. In this regard, the Company had filed rectification application for the same. The Company does not expect any demand from tax department and hence not treated as contingent liability.

4 Capital and other commitments

Capital commitment for tangible assets (net of advance paid) - Rs. 413.18 lakhs (31st March 2017 : Rs. 436.96 lakhs, 1st April 2016: Rs. 669.66 lakhs). There are no other commitments. Capital commitment for intangible assets (net of advance paid) - Nil (31st March 2017: Rs. Nil, 1st April 2016: Rs. Nil)

5 Disclosure of lease - Operating leases

Company as lessee:

The Company has taken factory premises and machinery under operating lease basis. Agreement for factory premises is non-cancellable and machinery is cancellable. Rent incurred with respect to cancellable operating lease (machinery) is Rs. 56.88 lakhs (31st March 2017: Rs. 50.99 lakhs). With respect to non-cancellable operating lease arrangement (factory premises), rent for the year and the future minimum lease payments is as under:

5.1 Outstanding balances at the year end are unsecured with a short term duration and interest free. For the year ended March 31, 2018 the Company has not recorded any impairment of receivables relating to amount owed by related parties (March 31, 2017 : Nil, April 1, 2016 : Nil). This assessment is undertaken in each financial year through examining the financial position of the related party & the market in which the related party operates.

5.2 All transactions were made on normal commercial terms and conditions and at market rates.

6 Financial instruments by category

Set out below is a comparison, by class, of the carrying amounts and fair value of the Company''s financial instruments as of March 31, 2018, other than those with carrying amounts that are reasonable approximates of fair values:

The management assessed that the fair value of cash and cash equivalent, trade payables and other current financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments. The fair value of the financial assets and liabilities is 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.

7 Significant estimates and assumptions

The preparation of the Company''s financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures, including the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

a) Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or CGU''s fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset. In determining the fair value less costs to disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.

b) Defined benefit plans & other long term benefits

The cost of the defined benefit gratuity plan and other long term benefit and the present value of the gratuity obligation and leave benefit are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for India.

c) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 48 for further disclosures.

d) Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

e) Income tax and deferred tax

Deferred tax assets are not recognised for unused tax losses as it is not probable that taxable profit will be available against which the losses can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

f) Provision for Inventories

Management reviews the inventory age listing on a periodic basis. This review involves comparison of the carrying value of the aged inventory item with the respective net realisable value. The purpose is to ascertain whether an allowance is required to be made in the financial statements for any obsolete and slow-moving items. Management is satisfied that adequate allowance for absolute and slow-moving inventories has been made in the financial statement.

8 Hedging activities and derivatives

Derivatives not designated as hedging instruments

The Company had used foreign exchange forward contracts to manage repayment of some of its foreign currency denominated borrowings in the past. These foreign exchange forward contracts are not designated as cash flow hedges and are entered into for periods consistent with foreign currency exposure of the underlying transactions i.e. the repayments of foreign currency denominated borrowings. However, considering that the Company has a natural hedge in the form of exports receivables, the Company does not book foreign exchange forward contracts.

9 Financial risk management objectives and policies

The Company''s principal financial liabilities comprise loans and borrowings, trade payables and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables and cash and cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is supported by a Risk Management Committee (RMC) that advises on financial risks and the appropriate financial risk governance framework for the Company. The RMC provides assurance that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. All derivative activities for risk management purposes are carried out by experienced members from the senior management who have the relevant expertise, appropriate skills and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised as below.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings and deposits.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt and short-term debt obligations with floating interest rates.

The Company generally converts its borrowings in Foreign Currency, considering natural hedge it has against its export. All foreign currency debt obligations carry floating interest rates.

Interest rate sensitivity

The Company''s total interest cost the year ended March 31, 2018 was Rs.616.01 lakhs and for year ended March 31, 2017 was Rs.550.04 lakhs. The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected, with all other variables held constant, the Company''s profit before tax is affected through the impact on floating rate borrowings, as follows:

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s export revenue and long term foreign currency borrowings. The Company manages its foreign currency risk by budgeting exports sales & repeat orders from its overseas customers and Company keep its long term foreign currency borrowings un-hedged which will be natural hedge against its un-hedged exports. The Company may hedge its long term borrowing near to the repayment date to avoid rupee volatility in short term. The company also avails bill discounting facilities in respect of export receivables.

Commodity price risk

Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase of steel. Due to significant volatility of the price of the steel, the Company has agreed with its customers for pass-through of increase/decrease in prices of steel. There may be lag effect in case of such pass-through arrangement.

Commodity price sensitivity

The Company revises its prices to customers on quarterly basis by considering average raw materials prices prevailing in the previous quarter impying it passes through any increase in prices thereby minimising the impact on the profit and loss and equity of the Company.

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and other receivables and deposits, foreign exchange transactions and other financial instruments.

Trade receivables

Customer credit risk is managed by the Company''s established policy, procedures and control relating to customer credit risk management. Further, Company''s customers includes companies having long standing relationship with the Company. Outstanding customer receivables are regularly monitored and reconciled. At March 31, 2018, receivable from Company''s top 5 customers accounted for approximately 30% (March 31, 2017: 36%) of all the receivables outstanding. An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 11. The Company does not hold collateral as security except in case of few customers. Majority of the export recieveable are covered under the insurance cover. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

Liquidity risk

As per the Company''s policy, there should not be concentration of repayment of loans in a particular financial year. In case of such concentration of repayment, the Company evaluates the option of refinancing entire or part of repayments for extended maturity. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders and the Company.

10 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a debt equity ratio, which is debt divided by equity.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period. No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.

11 Segmental disclosure

The Company is primarily engaged in manufacturing of closed die steel forgings & processing and Company is also into power generation from wind turbine which is supplied to Maharashtra State Electricity Distribution Company Limited (MSEDCL).

Notes:

a) The operating segments have been reported in a manner consistent with the internal reporting provided to the Corporate Management Committee, which is the Chief Operating Decision Maker.

b) The business segment comprise the following:

a) Closed Die Forging and Processing

b) Power Generation

c) The geographical information considered for disclosure are: Sales within India and Sales outside India

d) Reliance on major customers: One customer represents more than 10% of the total revenue. Total revenue from this major customer amounts to Rs. 1,824.49 lakhs (FY 2016-17: Rs. 1,334.55 lakhs) During the FY 16-17, one more party other than the above represented more than 10% of the total revenue whose revenue amounts to Rs. 1,311.96 lakhs

12 Defined benefits and other long term benefit plans

(a) Gratuity plan

Funded scheme

The Company has a defined benefit gratuity plan for its employees. The gratuity plan is governed by the payment of Gratuity Act, 1972. Under the Act, every employee who has completed five years of service is entiltled to specific benefit. The level of benefits provided on the employee''s lenth of service and salary retirement age. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn) for each completed year of service as per the provisions of the payment of Gratuity Act, 1972. The scheme is funded with insurance company in the form of a qualifying insurance policy.

Risk exposure and asset-liability matching

Provision of a defined benefit scheme poses certain risks, some of which are detailed hereunder, as companies take on uncertain long term obligations to make future benefits payments.

I. Liability risks

a) Asset-liability mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the Company is successfully able to neutralize valuation swings caused by interest rate movements.

b) Discount rate risk

Variations in the discount rate used to compute the present value of the liabilities may seem small, but in practice have a significant impact on the defined benefit liabilities.

c) Future salary escalation and inflation risk

Since prive inflation and salary growth are linked economically, they combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities especially unexpected salary increase provided at management''s discretion may lead to uncertainties in estimating this increasing risk.

II. Asset Risks

All plan assets are maintained in a trust fund managed by a public sector insurer viz. LIC of India. LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The Company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company has no control over the management of funds but this option provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement and hence 100% liquidity is ensured. Also interest rate and inflation risk are taken care of.

The estimates of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

(b) Leave benefits

Liability for leave benefits which are long term in nature (Privilege and sick leave) are unfunded and actuarially determined considering the leave policy/rules of the Company. Provision for short term leave benefit - casual leave is calculated on arithmetic basis. The total liability for leave benefits as at year end is Rs.141.65 lakhs (31st March 2017: Rs.142.37 lakhs, 1st April 2016: Rs. 115.58 lakhs).

13 Defined contribution plan

Provident fund & ESIC

In accordance with the law, all employees of the Company are entitled to receive benefits under the provident fund and ESIC. Under the defined contribution plan, provident fund and ESIC is contributed to the government administered fund. The Company has no obligation, other than the contribution payable to the provident fund & ESIC.

14 Cash flow statement related

14.1 Aggregate outflow on account of direct taxes paid is Rs. 306.67 lakhs (31st March 2017: Rs.165.33 lakhs).

14.2 Conversion of Rupee term loan in foreign currency loan (USD) aggregating to Rs. 1,565.75 lakhs (31st March 2017 :Rs. 631 lakhs) is not considered as cash transaction.

14.3 Due to reclassification of Dies from Inventories to Fixed Assets in the Previous Financial Year, finance facilities from banks changed accordingly. In the current financial year, amount of Rs.700 lakhs has been reclassified from short term as long term borrowings without any physical movement of Cash Flow.

15 During the financial year 2016 - 17, the Company had received a government grant of Rs. 214 lakhs from Steel Development Fund (SDF) of Ministry of Steel as first installment towards its contribution for a specified project which will help decreasing greenhouse gases emission. The total estimated cost of the project is Rs. 560 lakhs out of which contribution from SDF is Rs. 275 lakhs and balance Rs. 285 lakhs shall be contributed by the Company. As the project is ongoing, all direct cost and allocable costs (including depreciation) has been considered as intangible assets under development. Intangible assets and equipments which are used for the project have been capitalised as tangible fixed assets. Further, government grant received of Rs. 214 lakhs is treated as deferred income. (refer note 4.7)

16 First time adoption

These financial statements for the year ended 31st March 2018 are the first the Company has prepared in accordance with IND AS. For periods up to and including the year ended 31st March 2017, the Company prepared its financial statements in accordance with Indian accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (‘Indian GAAP'').

Accordingly, the Company has prepared financial statements which comply with IND AS applicable for periods ending on 31st March 2018, together with the comparative period data as at and for the year ended 31st March 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 1st April 2016, the Company''s date of transition to IND AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1st April 2016 and the financial statements as at and for the year ended 31st March 2017.

16.1 Exceptions applied

The Company has applied all the mandatory exceptions in accordance with IND AS 101. Following are the exceptions with significant impact:

1) Estimates

The estimates at 1st April 2016 and at 31st March 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies). The estimates used by the Company to present these amounts in accordance with IND AS reflect conditions at 1st April 2016, the date of transition to IND AS and as of 31st March 2017.

2) Classification and measurement of financial assets

The Company has classified financial assets on the basis of the facts and circumstances that exist at the date of transition to IND AS.

3) Deemed cost for property, plant and equipment and intangible assets

The Company has elected to continue with the carrying value for all of its property, plant and equipment and intangible assets as recognized in the financial statements as at the date of transition to IND AS, measured as per the Indian GAAP and use that as its deemed cost as at the date of transition.

4) Embedded lease

Appendix C to IND AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with IND AS 17, this assessment is carried out at the inception of the contract or arrangement. However, the Company has used IND AS 101 exemption and assessed all arrangements based for embedded leases based on conditions in place as at the date of transition.

5) Investments in subsidiaries

The Company has elected the Indian GAAP carrying amount at the date of transition as deemed cost for its investment in its subsidiary.

16.2 Notes to the reconciliation of equity as at 1st April 2016 & 31st March 2017 and statement of profit and loss for the year ended 31st March 2017.

1) Defined benefit liabilities

Both under Indian GAAP and IND AS, the Company recognized costs related to its post-employment defined benefit plan and other long term benefit on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to the statement of profit and loss. Under IND AS, remeasurements (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability) are recognized immediately in the balance sheet with a corresponding debit or credit to other equity through OCI. Thus the employee benefit cost is reduced by Rs.36.32 lakhs and remeasurement gains/losses on defined benefit plans has been recognized in the OCI net of related deferred tax for FY 2016-17.

2) Revenue

Under Indian GAAP, revenue from sale of products was presented excluding excise duty. Under IND AS, revenue from sale of products is presented inclusive of excise duty. Excise duty paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended 31st March 2018 by Rs. 91.26 lakhs. There is no impact on total equity and profits.

3) Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. IND AS 12 required entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. This has not resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in other equity or a separate component of equity.

4) Standby equipment/ Capital Spares

The Company accounted for certain spares which are capable of being used during more than one accounting period or which can be only specifically used in combination with another fixed assets as part of inventories under Indian GAAP. Under IND AS, any asset which satisfies the criteria of IND AS 16 needs to be accounted as a part of property, plant and equipment. Accordingly, the Company has done an assessment of the relevant spares and reclassified the same from inventory to property, plant and equipment wherever such spares satisfied the criteria of IND AS 16. Depreciation on such reclassified items have been computed retrospectively to the extent of available information and the net amount is considered for reclassification purposes while the balance impact is adjusted in other equity.

5) Prior period

Prior period expenses/(income) as reportes as per previous GAAP has been restated respective period/year in accordance with Ind AS requirements.

6) Investment in subsidiary

The Company has availed the option to value investment in subsidiary at deemed cost. The deemed cost for this purpose can be either its fair value at the entity''s date of transition to IND AS in its separate financial statements or previous GAAP carrying amount at the transition date. The Company has decided to use previous GAAP value as deemed cost for its investments.

7) Impact on cash flow

The translation from previous GAAP to IND AS has no material impact on the statement of cash flow.

17 Additional information as required by para 5 of General Instructions for preparation of Statement of Profit and Loss (other than already disclosed above) are either Nil or Not Applicable.

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Mar 31, 2017

1. Rights, preferences and restrictions of equity shares

The Company has issued only one class of shares referred to as equity shares having a par value of Rs. 10 each. Each holder of equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts (after due adjustments in case shares are not fully paid up). However, no such preferential amounts exist currently.

2. Details of security provided

(i) Term loans (Foreign currency loan & Rupee loan) are secured by first charge on pari passu basis on fixed assets of the Company (present and future) (excluding a vehicle) and second charge on current assets. The loans are further secured by personal guarantee of Chairman and Managing Director of the Company.

(ii)Vehicle loans is secured against hypothecation of the vehicle against which the loan has been taken. The loan is further secured by personal guarantee of Chairman and Managing Director and a Director of the Company.

3. Under the Micro, Small and Medium Enterprises Development Act, 2006 [MSMED Act], certain disclosures are required to be made relating to Micro and Small Enterprises. The Company has not received any information from its suppliers about their coverage under the MSMED Act and as such no further disclosures are required to be made. Auditor''s have relied on the same.

Note :

Provision for contingency represents (a) provision for expected margin on sales return; (b) provision for bonus payable for earlier years; and (c) provision for disputed Navi Mumbai Municipal Cess (‘NMMC'') liability. In respect of (a) the outflow is expected to be within a period of one year. In respect of (c) the Company has paid Rs.60.29 lakhs under protest during the year. Rs.11.37 lakhs was paid in previous year and has been treated as an expense in that year. Expected outflow of interest / penalty depends on outcome of the appeal filed.

4. Depreciation as per statement of profit & loss of Rs. 389.92 lakhs is net of reversal of excess depreciation of Rs. 38.50 lakhs charged in previous year.

5. Disclosure required as per paragraph 82(b) of Accounting Standard 10 Property, Plant & Equipments -amount capitalized under gross block includes Rs. 26.34 lakhs (P.Y. Rs. 595.06 lakhs) being the amount of capital expenditure incurred on self constructed assets. Further such amount included under CWIP is aggregating to Rs. 587.42 lakhs (P.Y. Rs. 229.70 lakhs)

6. Factory Building is constructed on Leasehold Land.

6.1 First Pari Passu charge has been created on fixed assets of the Company (present and future) in respect of Foreign Currency Loan of USD 2 Million (Outstanding as on 31.03.2017 - USD 1.8 Million) (Previous Year Outstanding as on 31.03.2016 - USD 2 Million) taken by Pradeep Metals Limited, Inc. (Wholly Owned Subsidiary) in USA from Union Bank of India, Hong Kong. (Refer Note 4.1)

7. Shares are pledged with Union Bank of India, Hong Kong and non - disposal undertaking given to them in respect of 140 shares in connection with Foreign Currency Loan of USD 2 Million taken by Pradeep Metals Limited, Inc. USA (Outstanding as on 31.03.2017 - USD 1.8 Million) (Previous Year Outstanding as on 31.03.2016 - USD 2 Million).

8. During the year, a dispute had arisen between Wholly Owned Subsidiary (WOS) and the partner holding 49% share in step down subsidiary (SDS) (51% share is held by Company''s WOS). The matter is now sub-judice and suitable representations are being made in the court by WOS in this matter. Further, operating losses in the consolidated financial statement of WOS during the current and earlier year are on account of weak demand from the oil, gas and engineering sectors to which the subsidiaries supply their products. Also legal costs have added to the losses. Management is expecting the revival in demand which would enable it to recover the past losses. Based on the projections and considering that the investment made in WOS is of strategic nature, in the opinion of management, no provision for diminution in the value of investment in WOS or accounting adjustment (if any) is required as at 31^st March 2017.

9. Trade receivable includes export bills aggregating to Rs. 1,627.63 lakhs (Previous year: Rs. 1,271.44 lakhs) purchased / discounted by the Bank but pending realization as on the date of the Balance Sheet & disclosed under working capital (short term borrowing).

10. Trade receivable includes Rs. 0.35 lakh (Previous Year Rs. 0.21 lakh) receivable from private Company in which director is a director.

11. Bank deposits aggregating to Rs. 6.16 lakhs (Previous year: Rs. 7.61 lakhs) are under lien with banks towards guarantees issued by bank.

12. Other current asset includes Rs. 343.29 lakhs as on 31^st March 2017 (Previous year Rs. 216.00 lakhs) receivable from Maharashtra State Electricity Distribution Company Limited (‘MSEDCL'') for sale of power generated from windmill prior to the date of Power Purchase Agreement (PPA). Further, due to technical issues, no power was generated from 9^th August 2016 till 6^th May 2017 in respect of which claim for the compensation (up to March 2017) of Rs. 100 lakhs as accepted by the wind mill vendor has been included in other operating income. The PPA has been executed with MSEDCL on 21^st March 2017. Considering the above, in view of the management, no uncertainty exists for the amount recoverable of Rs. 343.29 lakhs and therefore, no provision for doubtful receivables is required to be made.

13. Contingent liabilities

(a) Contingent liabilities are determined on the basis of available information and are disclosed in the notes to financial statements. Details of contingent liabilities not provided for are given below:

(i) In respect of (a) and (d) above, the Company does not expect any cash outflow.

(ii) In respect of (b) and (c) above, future cash out flows (including interest / penalty) are determinable on receipt of judgments by tax authorities / labour court / settlement with vendor.

(iii) In respect of (b) above, the Company has provided for liability amounting Rs. 34.94 lakhs (Previous year Rs. 15.00 lakhs) and paid under protest in current year Rs. 60.29 lakhs (Previous year Rs. 11.37 lakhs)

14. Capital and other commitments

Capital commitment for tangible assets (net of advance paid) - Rs. 436.96 lakhs (Previous Year: Rs. 669.66 lakhs). There are no other commitments.

15. Disclosure of lease - Operating lease As lessee:

The Company has taken certain factory premises and machinery under operating lease for a period upto 3 years. Agreement for factory premises is non-cancellable and machinery is cancellable. Rent incurred with respect to cancellable operating lease (machinery) is Rs. 46.02 lakhs (Previous year: Rs. 47.60 lakhs). With respect to non-cancellable operating lease arrangement (factory premises), rent for the year and the future minimum lease payments is as under:

16. Segmental disclosure

The Company is primarily engaged in manufacturing of closed die steel forgings & processing. The Company had started generating & supplied power generated from wind turbine generator to Maharashtra State Electricity Distribution Company Limited (MSEDCL) from 31^st March 2015. Since power purchase agreement with MSEDCL has been executed in current quarter, wind mill operation is disclosed as separate segment.

Note: Above figures are net of provision Rs. 3.54 lakhs (Previous year: Rs. 12.36 lakhs)

As there are no other transaction of the Company which requires disclosure under AS - 17 ‘Segment Reporting'' for geographical segment, other segmental information in respect of secondary segment is not applicable.

17. Defined benefits :

The Company has long term employee benefits schemes in the form gratuity and leave benefits. Gratuity liability is funded with LIC of India.

18. Gratuity - Funded

The following table set out the status of the gratuity plan as required under Accounting Standard 15 -Employee Benefits:

19. Leave benefits

Liability for leave benefits which are long term in nature (Privilege and sick leave) are unfunded and actuarially determined considering the leave policy / rules of the Company. Provision for short term leave benefit is calculated on arithmetic basis. The liability for leave benefits as at year end is Rs. 142.37 lakhs (Previous year: Rs. 115.58 lakhs). As per para 132 of Accounting Standard 15 - Employee Benefits, no other disclosure is required.

20. As per Section 135 of the Companies Act, 2013 a Corporate Social Responsibility (CSR) committee has been formed by the Company. The area for CSR activities are Education and Empowerment, Employability and Entrepreneurship, Health and Sanitation and others.

(a) Gross amount required to be spent by the Company during the current year was Rs. 17.45 lakhs (Previous year : Rs. 18.97 lakhs).

21. In cash flow statement, cash flow from operating activities includes CSR amounting Rs. 17.22 lakhs (Previous year Rs. 10.36 lakhs)

22. Cash flow statement related:

23. Aggregate outflow on account of direct taxes paid is Rs. 165.33 lakhs (Previous year: Rs. 175.69 lakhs).

24. Conversion of Rupee term loan in foreign currency loan (USD) aggregating to Rs. 631 lakhs (Previous year: Rs. 855.58 lakhs) is not considered as cash transaction.

25. During the year, the Company has received a government grant of Rs. 214 lakhs from Steel Development Fund (SDF) of Ministry of Steel as first installment towards the contribution for the specified project which will help decreasing greenhouse gases emission. The total estimated cost of the project is Rs. 560 lakhs out of which contribution from SDF is Rs. 275 lakhs and balance Rs. 285 lakhs shall be contributed by the Company. As the project is ongoing, all direct cost and allocable costs (including depreciation) has been considered as intangible assets under development in compliance with Accounting Standard 26 - Intangible assets and equipments which are used for the project have been capitalized as tangible fixed assets. Further, government grant received of Rs. 214 lakhs is treated as deferred income in accordance with Accounting standard 12- Government Grants and disclosed accordingly.

26. During the current year dies have been reclassified from inventories to fixed assets in accordance with revised Accounting Standard 10 - ‘ Property, Plant and Equipment''. Accordingly, opening inventory of Rs. 906.12 lakhs has been transferred to fixed assets and depreciated based on the balance useful life. Due to this change, profit of before tax for the year is lower by Rs. 90.61 lakhs.

27. Additional information as required by para 5 of General Instructions for preparation of Statement of Profit and Loss (other than already disclosed above) are either Nil or Not Applicable.

28. Previous years comparatives

Previous year''s figures have been re-grouped / reclassified wherever necessary to conform to the current year''s classification.

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Mar 31, 2016

1. Leave benefits

Liability for leave benefits in nature of compensated absences, sick leave and casual leave is unfunded and is actuarially determined considering the leave policy/rules of the Company. The liability for leave benefits as at year end is Rs. 115.58 lakhs (Previous year: Rs. 69.76 lakhs). As per para 132 of Accounting Standard 15 - Employee Benefits, no other disclosure is required.

2. As per Section 135 of the Companies Act, 2013 a Corporate Social Responsibility (CSR) committee has been formed by the Company. The area for CSR activities are Education and Empowerment, Employability and Entrepreneurship, Health and Sanitation and others.

(a) Gross amount required to be spent by the Company during the current year was Rs.18.97 lakhs (Previous year : Rs. 16.06 lakhs).

3. Cash flow statement related :

4. Aggregate outflow on account of direct taxes paid is Rs. 175.76 lakhs (Previous year : Rs. 320.39 lakhs).

5. Conversion of Rupee term loan in foreign currency loan (USD) aggregating to Rs. 855.58 lakhs (Previous year : Nil) is not considered as cash transaction.

6. During the year, Company has recognized export incentive under Merchandise Exports from India Scheme (MEIS) aggregating to Rs. 130.01 lakhs (Previous year : Nil) considering certainty over utilization of these duty scraps.

7. Company''s 2.1 MW Wind Mill was originally set up as a captive unit. In view of the changed Government''s policy, it is economical to supply the power to Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL). The necessary steps are being taken to sign and execute Power Purchase Agreement (PPA) with MSEDCL. Pending execution of PPA, revenue of Rs. 216.00 lakhs (Previous year: Nil) has been recognized from the power generated and fed into the Grid based on the provisional rate as prescribed in the Order of Maharashtra State Regulatory Commission (''MERC”) and is grouped under other operating revenue.

8. The Company has terminated Chief Financial Officer in February 2016 and Company is in the process of appointing new Chief Financial Officer in accordance with second proviso to section 203 of the Companies Act, 2013.

9. Additional Information as required by para 5 of General Instructions for preparation of Statement of Profit and Loss (other than already disclosed above) are either Nil or Not Applicable.

10. Previous years comparatives

Previous year''s figures have been re-grouped / reclassified wherever necessary to conform to the current year''s classification.

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Mar 31, 2015

(1.1.1) Bank Borrowings for Working Capital and Sundry Debtors include export bills aggregating to Rs.1,624.76 Lacs (Rs. 1,404.10 Lacs as on 31st March, 2014) purchased / discounted by the Bank but pending realization as on the date of the Balance Sheet.

(1.1.2) The year end net monetary foreign currency exposures that have not been hedged are as follows:- Packing Credit in Foreign Currency

(1.1.3) Related Party Disclosures {as identified and certified by the Management}

As per Accounting Standard 18, notified under the Company''s (Accounting Standards) Rules, 2006, the disclosures of transactions with the related parties are as follows:

(i) List of related parties where control exists and related parties with whom transactions have taken place and relationships:

* includes Sales, Investments and Receivables to Pradeep Metals Limited, New York merged on 9th March,2015

(1.1.4) The dues outstanding to Micro, Small and Medium Enterprises under Micro, Small and Medium Enterprises Development Act 2006, are based on the Information available with the Company and this has been relied upon by the auditors.

(1.1.5) Additional Information pursuant to the provisions of part II of Schedule VI to the Companies Act, 2013 are Annexed separately.

(1.1.6) Note on Corporate Social Responsibility Expenditure related to Corporate Social Responsibilites as per Section 135 of the Company Act, 2013 read with Schedule VII thereof -

a. Gross amount required to be spent by the Company during the year (2% of Average Net Profit) Rs. 1,606,000.

b. Amount Spent on donations to the institutions involved in Social Responsibilities Rs. 783,002.

(1.1.7) Management reassessed the useful life of assets during the quarter ended 30th June, 2014, consequent to the Notification of relevant provisions of Companies Act, 2013. In line with the transitional provisions as per the Part C of the Schedule II of the Act, the Company has recognized amount of Rs. 222.65 lacs (Net off of Deferred Tax credit of Rs.106.94 lacs ) in the opening balance of retained earnings. If the Company had continued with the previously assessed useful lives, charge for depreciation for the year ended 31st March, 2015 would have been lower by Rs.53.66 lacs, for the assets held at 1st April, 2014.

(1.1.8) Remuneration is being paid to Mr Pradeep Goyal, Chairman and Managing Director of the Company w.e.f. 17th October, 2013 pursuant to the Special Resolutions passed by the shareholders at the Extra Ordinary General Meetings held on 25th January, 2014 and Annual General Meeting held on 4th September, 2014, pending necessary approval of the Ministry of Corporate Affairs with reference to the applications / representation made by the Company.

(1.1.9) Considering the rising power tariff and national objective of maximizing development and use of renewable, green energy, the Company has set up a 2.1 MW Wind Mill at Jath, Sangli, for captive use. It has been commissioned on 31st March, 2015.

(1.1.10) With the merger of Wholly Owned Subsidiary, Pradeep Metals Limited, New York with Pradeep Metals Limited Inc., Texas with effect from 9th March, 2015, Pradeep Metals Limited Inc., Texas, has become Wholly Owned Subsidiary of the Company. The Company has made further investment of Rs.77.32 Lacs (USD 1,25,000) in Pradeep Metals Limited, New York and Rs.187.86 Lacs (USD 3,00,000) in Pradeep Metals Limited, Inc., Texas, during the year.

(1.1.11) Pradeep Metals Limited Inc., Texas, a Wholly Owned Subsidiary has, acquired 51% stake in a CNC Machine Shop at Huston, Texas, pursuant to Assets Contribution and Purchase Agreement dated 24th Apirl, 2015, w.e.f. 1st January, 2015. Accordingly, Dimensional Machine Works, LLC, Houston, USA has become step-down Subsidiary of the Company and its unaudited financials for the period from 1st January, 2015 to 31st March, 2015 have been included in the Consolidated Accounts.

(1.1.12) Previous year''s figures have been regrouped/reclassified, wherever necessary, to correspond with the current year''s classifications/disclosures.

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Mar 31, 2014

1 Bank Borrowings for Working Capital and Sundry Debtors include export bills aggregating to Rs.1404.10 Lacs (Rs. 1210.85 Lacs as on 31st March, 2013) purchased / discounted by the Bank but pending for realization as on the date of the Balance Sheet.

31st March 2014 31st March,2013 (Rs.) (Rs.)

2 Contingent Liabilities not provided for

a.Letter of Guarantee issued by Union Bank of India

(secured by 100 % margin) 241,347 89,712

(secured by 10 % margin) 902,224 956,862

b. Capital commitment for Fixed Assets (Net of Advances) 44,484,820 30,917,820

3 Related Party Disclosures { as identified and certified by the Management}

As per Accounting Standard 18 notified under the Company''s (Accounting Standards) Rules, 2006, the disclosures of transactions with the related parties are given below,

4 The dues outstanding to Micro, Small and Medium Enterprises under Micro, Small and Medium Enterprises Development Act 2006, are based on the Information available with the company and this has been relied upon by the auditors and hence the disclosures as required under the said Act have not been given.

5 The Company has duly complied with the Accounting Standards notified under the Companies Act, 1956 ("the Act") read with General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

6 Additional Information pursuant to the provisions of part II of Schedule VI to the Companies Act, 1956 are Annexed separately.

7 Previous year''s figures have been regrouped/reclassified, wherever necessary, to correspond with the current year''s classifications/disclosures.

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Mar 31, 2013

(1.1.1) Bank Borrowings for Working Capital and Sundry Debtors include export bills aggregating to Rs.1210.85 Lacs (Rs. 1070.59 Lacs as on 31st March, 2012) purchased / discounted by the Bank but pending realization as on the date of the Balance Sheet.

(1.1.2) The dues outstanding to Micro, Small and Medium Enterprises under Micro, Small and Medium Enterprises Development Act 2006, are based on the Information available with the company and this has been relied upon by the auditors and hence the disclosures as required under the said Act have not been given.

(1.1.3) The Company has duly complied with the Accounting Standards referred to in sub-section 3(c) of Section 211 of the Companies Act, 1956.

(1.1.4) Additional Information pursuant to the provisions of part II of Schedule VI to the Companies Act, 1956 are Annexed separately.

(1.1.5) The Revised Schedule VI has become effective from 1st April 2011 for the preparation of financial statements. This has significantly impacted the disclosures & presentations made in the financial statements. Previous year''s figures have been regrouped/reclassified, wherever necessary, to correspond with the current year''s classifications/disclosures.

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Mar 31, 2012

31st March 2012 31st March,2011 (Rs.) (Rs.)

(1.1.1) Contingent Liabilities not provided for

a. Letter of Guarantee issued by Union Bank of India

(secured by 100 % margin) 101,208 114,510

(secured by 10 % margin) 866,862 810,000

b. Capital Commitment for purchase of Machinery 22,867,775 2,506,000

(1.1.2) Value of import calculated on CIF basis :

Raw Material and Consumable goods 1,569,252 915,864

Capital goods 24,485,176 28,708,699

(1.1.3) Expenditure in foreign currency - Travelling 1,004,410 969,885

(1.1.4) Earning in foreign currency :

FOB value of Exports 666,563,588 383,644,815

(1.1.5) Bank Borrowings for Working Capital and Sundry Debtors include export bills aggregating to Rs. 1070.59 Lacs (Rs. 719.69 Lacs as on 31st March, 2011) purchased / discounted by the Bank but pending realization as on the date of the Balance Sheet.

(1.1.6) Sundry Debtors includes Rs. Nil (Previous Year Rs. 54.45 lacs) due from (M/s B.S.Metal Private Ltd., a company in which Key Managerial Personnel is a Director.)

(1.1.7) The credit for Minimum alternative Tax of Rs. 263.45 lacs has been recognized for the first time in financial year 2010-2011 in view of visibility of profitability, and the Company is covered under the provisions of Minimum Alternative Tax (MAT) and appropriate adjustments has been made the books as per the provisions of Section 115JAA of the Income Tax Act, 1961,during the year.

(1.1.8) The dues outstanding to Micro, Small and Medium Enterprises under Micro, Small and Medium Enterprises Development Act 2006, are based on the Information available with the company and this has been relied upon by the auditors and hence the disclosures as required under the said Act have not been given.

(1.1.9) The Company has duly complied with the Accounting Standards referred to in sub-section 3(c) of Section 211 of the Companies Act, 1956.

(1.1.10) Additional Information pursuant to the provisions of part II of Schedule VI to the Companies Act, 1956 are Annexed separately.

(1.1.11) The Revised Schedule VI has become effective from 1st April, 2011 for the preparation of financial statements. This has significantly impacted the disclosures & presentations made in the financial statements. Previous year’s figures have been regrouped/reclassified, wherever necessary to correspond with the current year’s classifications/disclosures.

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Mar 31, 2011

31st March, 2011 31st March, 2010 (Rs.) (Rs.)

(1) Contingent Liabilities not provided for

a. Letter of Guarantee issued by Union 924,510 111,844 Bank of India (secured by 100 % margin)

b. Capital Commitment for purchase of 2,506,000 - Machinery

(2) a. Arrears of Dividend on 5,19,800, 10% Optionally Convertible Cumulative Redeemable Preference Shares of Rs. 100 each – Rs. 59,678,000 (Previous year Rs.54,480,000) plus applicable dividend distribution tax. Out of this a sum of Rs.128.96 lacs plus applicable dividend distribution tax is being paid in terms of resolution passed in Extra-Ordinary General Meeting held on 6th May, 2011.

b. It is proposed, subject to the approval of the Members and such other approvals, as may be deemed necessary, to redeem 5,19,800 10% Optionally Convertible Cumulative Redeemable Preference Shares (OCCRPS) of Rs. 100/- each, fully paid up, at a premium of Rs. 50/- per OCCRPS, as per the Agreement made with the holders of the OCCRPS, mainly out of the proceeds of Equity Shares and advance against Equity Warrants issued/ to be issued during the current year. As such, Shares Redemption Reserve has not been created.

(3)Sundry Debtors includes Rs- 54.45 lacs (Previous Year Rs.- 54.45 lacs) due from M/s - B.S.Metal Private Ltd., a Company in which Key Managerial Personnel is a Director.

(4)The Company is covered under the provisions of Minimum Alternative Tax (MAT) and has provided Income Tax in the books as per the provisions of Section 115JB of the Income Tax Act, 1961.

(5) b. Deferred Tax Assets / Liability has been worked out after considering the amount of unabsorbed depreciation and MAT credit available with the Company as on 31.03.2011.

(6)The dues outstanding to Micro, Small and Medium Enterprises under Micro, Small and Medium Enterprises Development Act 2006, are based on the information available with the company and hence the disclosures as required under the said Act have not been given.

(7)The Company has duly complied with the Accounting Standards referred to in sub-section 3(c) of Section 211 of the Companies Act, 1956.

(8)Additional Information pursuant to the provisions of part II of Schedule VI to the Companies Act, 1956 are Annexed separately.

(9)Previous years figures have been regrouped / recasted, wherever necessary, to conform to this years classification.

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Mar 31, 2010

31st March, 2010 31st March, 2009 (Rs.) (Rs.)

(1) Contingent Liabilities not provided for

a) Letter of Guarantee issued by Union 111,844 554,252

Bank of India (secured by 100 % margin)

(2) Value of import calculated on CIF basis :

Raw material and consumable goods 4,545,329 2,834,304

Capital goods - 9,162,045

(3) Expenditure in foreign currency - Travelling 419,625 1,411,062

(4) Earning in foreign currency :

FOB value of Exports 228,717,277 507,479,971



(5) (a) The Company has extended the terms of redemption of 519800,10% Optionally Convertible Cumulative Redeemable Preference Shares of Rs. 100 each, which were due for redemption in 2 yearly installments of Rs. 25,990,000 each as on 31a March, 2010 and 31a March, 2011, by further period of 3 years and the same would now be redeemable in 2 equal yearly installment of Rs. 25,990,000 each on 31st March, 2013 and 31st March, 2014. (b) Arrears of dividend on 519800, 10% Optionally Convertible Cumulative Redeemable Preference Shares of Rs. 100 each - Rs. 54,480,000 (Previous year Rs.49,282,000).

(6) Related Party Disclosures { as identified and certified by the Management}

As per Accounting Standard 18 notified under the Companys (Accounting Standards) Rules, 2006, the disclosures of transactions with the related parties are given below:

(i) List of related parties where control exists and related parties with whom transactions have taken place and relationships:

(7)The Company is covered under the provisions of Minimum Alternative Tax (MAT) and has provided Income Tax in the books as per the provisions of Section 115JB of the Income Tax Act, 1961.

(8)(a)The tax effect of significant timing differences during the year that have resulted in deferred tax

(9)The Company has duly complied with the Accounting Standards referred to in sub-section 3(c) of Section 211 of the Companies Act, 1956.

(10)Previous years figures have been regrouped / recasted, wherever necessary, to conform to this years classification.