NOTICE OF 31ST ANNUAL REPORT 2014 PRADEEP METALS LIMITED · PRADEEP METALS LIMITED 2 Resolution:...

PRADEEP METALS LIMITED

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NOTICE

NOTICE IS HEREBY GIVEN THAT THE THIRTY FIRST ANNUAL GENERAL MEETING OF PRADEEP METALSLIMITED WILL BE HELD AT MONARCH BANQUETS, PLOT NO. 110/111, MIDC, THANE BELAPUR ROAD, NEARRABALE RAILWAY STATION, RABALE, NAVI MUMBAI 400701 , ON THURSDAY, 4TH DAY OF SEPTEMBER,2014, AT 12.30 P.M., TO TRANSACT THE FOLLOWING BUSINESS:

Ordinary Business:

1. To receive, consider and adopt the Audited Statement of Profit and Loss for the year ended 31st March, 2014and the Balance Sheet as at that date, together with the Reports of the Board of Directors and the Auditorsthereon.

2. To declare Dividend on the Equity Shares for the financial year 2013-14.

3. To appoint a Director in place of Mr. Omprakash Agarwal (DIN: 00022796), who retires by rotation, butbeing eligible, offers himself for re-appointment.

4. To consider and, if thought fit, to pass with or without modification(s), the following resolution as an OrdinaryResolution:

“RESOLVED THAT pursuant to the provisions of Section 139 and other applicable provisions, if any, ofthe Companies Act, 2013, and the Rules framed thereunder, as amended from time to time, M/s. S. R. Rege& Co., Chartered Accountants (Firm Registration No. 108813W), be and are hereby appointed as Auditorsof the Company, to hold office from conclusion of this Annual General Meeting (AGM) till the conclusionof Thirty Fourth AGM of the Company to be held in year 2017 (subject to ratification of their appointment atevery AGM), at such remuneration plus out of pocket expenses etc. as may be mutually agreed betweenthe Board of Directors of the Company and the Auditors.”

Special Business:5. To consider and, if thought fit, to pass with or without modification(s), the following resolution as an Ordinary

Resolution:

“ RESOLVED THAT pursuant to the provisions of Section 149, 152 and other applicable provisions of theCompanies Act, 2013 and Rules framed thereunder, read with Schedule IV of the Act, as amended fromtime to time, Mr. Raj Kumar Mittal (DIN 00020255), non-executive Director of the Company, who retires byrotation at the ensuing Annual General Meeting and has submitted a declaration that he meets the criteriafor Independence as provided in Section 149(6) of the Act and who is eligible for appointment, be and ishereby appointed as an Independent Director of the Company to hold office for 5 (Five) consecutive years fora term upto the conclusion of 36th Annual General Meeting of the Company in the calender year 2019.”


“ RESOLVED THAT pursuant to the provisions of Section 149, 152 and other applicable provisions of theCompanies Act, 2013 and Rules framed thereunder, read with Schedule IV of the Act, as amended fromtime to time, Mr. Suresh G. Vaidya (DIN: 00220956), non-executive Director of the Company, who has submitteda declaration that he meets the criteria for Independence as provided in Section 149(6) of the Act and whois eligible for appointment, be and is hereby appointed as an Independent Director of the Company tohold office for 5 (Five) consecutive years for a term upto the conclusion of 36th Annual General Meeting ofthe Company in the calender year 2019.”

7. To consider and, if thought fit, to pass with or without modification(s), the following resolution as an Ordinary

NOTICE OF 31ST ANNUAL REPORT 2014

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Resolution:

“ RESOLVED THAT pursuant to the provisions of Section 149, 152 and other applicable provisions of theCompanies Act, 2013 and Rules framed thereunder, read with Schedule IV of the Act, as amended fromtime to time, Mr. Rajeev D. Mehrotra (DIN: 01345096), non-executive Director of the Company, who hassubmitted a declaration that he meets the criteria for Independence as provided in Section 149(6) of theAct and who is eligible for appointment, be and is hereby appointed as an Independent Director of theCompany to hold office for 5 (Five) consecutive years for a term upto the conclusion of 36th Annual GeneralMeeting of the Company in the calender year 2019.”


“RESOLVED THAT pursuant to the provisions of Section 149, 152 and other applicable provisions of theCompanies Act, 2013 and Rules framed thereunder, read with Schedule IV of the Act, as amended fromtime to time, Mr. Jaidev R. Shroff (DIN: 00191050), non-executive Director of the Company, who has submitteda declaration that he meets the criteria for Independence as provided in Section 149(6) of the Act and whois eligible for appointment, be and is hereby appointed as an Independent Director of the Company tohold office for 5 (Five) consecutive years for a term upto the conclusion of 36th Annual General Meeting ofthe Company in the calender year 2019.”

9. To approve the remuneration of the Cost Auditors for the financial year ending 31st March, 2015 and in thisregard to consider and, if thought fit, to pass, with or without modification(s), the following resolution asan Ordinary Resolution:

“RESOLVED THAT pursuant to Section 148 and other applicable provisions of the Companies Act, 2013and Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration of Rs. 1,25,000/- plusservice tax as applicable and reimbursement of actual travel and out-of pocket expenses, for the financialyear commencing on 1st April, 2014 and ending on 31st March, 2015, as approved by the Board of Directorsof the Company, to be paid to M/s. J.J. Paleja & Co., Cost Accountants (Registration No. 100656) for theconduct of the Cost Audit of the Company, be and is hereby ratified and confirmed”.

10. To consider and if thought fit, to pass with or without modification(s), the following resolution as SpecialResolution:-

“RESOLVED THAT pursuant to the provisions of Sections 188, 196, 197, 203 read with Schedule V andother applicable provisions, if any, of the Companies Act, 2013 (including any statutory modification(s) orre-enhancement thereof for the time being in force) and pursuant to the approval granted by the Board ofDirectors of the Company and Nomination & Remuneration Committee at their meeting held on 3rd July, 2014,and subject to the approval(s) from appropriate authorities required (if any); approval of the Members ofthe Company be and is hereby accorded to the re-appointment of Mr. Pradeep Goyal as Chairman and ManagingDirector of the Company, for a period of 3 (Three) years commencing from 17th December, 2014 to 16th

December, 2017, on the following remuneration:

(i) Basic Salary Rs. 7,00,000/- per month.(ii) Incentive Pay Subject to maximum of Rs. 25,00,000/- per annum to be decided by the

Board of Directors/Nomination & Remuneration Committee dependingon performance of the Company.

(iii) Prerequisites (Including Allowances)Leave Travel Allowance The yearly payment in the form of allowance shall be equivalent to one

month’s basic salary.Magazines/ Books Allowance Rs. 50,000/- per annum.

PRADEEP METALS LIMITEDGas/ Electricity/Maintenance Allowance Rs. 96,000/- per annum.Medical Reimbursement Expenditure incurred by the Chairman and Managing Director and his familyClub Fees Actual fees for maximum of two clubs. Admission fee and life membership

fees will not be paid by the Company.Contribution to Provident Fund, To the extent these either singly or put together are not taxable underSuperannuation Fund and Income Tax Act, 1961.Annuity FundGratuity Payable at a rate not exceeding half month’s salary for each completed

year of service.Encashment of leave As per the Company’s Rules.Car For use on the Company’s business.Telephone At residence and cellular phones. Personal long distance calls to be

charged and recovered by Company.

The perquisites and allowances shall be calculated as per the Income Tax Rules, wherever applicable.In the absence of any such Rules, perquisite and allowance shall be evaluated at cost.

RESOLVED FURTHER THAT in the event of loss or inadequacy of profits in any financial year during tenureof his service, the above remuneration shall be paid to Mr. Pradeep Goyal as minimum remunerationwith the approval of Central Government, if required.

RESOLVED FURTHER THAT during the term of office of Mr. Pradeep Goyal as Chairman and ManagingDirector of the Company, he shall not be subject to retirement by rotation.

RESOLVED FURTHER THAT the Board of Directors of the Company/ Nomination & Remuneration Committeeof the Directors be and are hereby authorized to alter/amend/revise the terms and conditions of re-appointmentof Mr. Pradeep Goyal with mutual consent, subject to and in accordance with the applicable provisions ofthe Companies Act, 2013 and Schedule V thereto and THAT the approval of the Central Government andother appropriate authorities (if required) may be obtained for payment of the remuneration, as mentionedherein, as minimum remuneration to Mr. Pradeep Goyal, without further reference to the Members.

RESOLVED FURTHER THAT Board of Directors/Nomination & Remuneration Committee of the Directorsbe and are hereby authorized to take all necessary steps to implement this Resolution and to authorizedoing of all such acts, deeds, matters and things by anyone Director/Executive/Officer/representative ofthe Company. “

11. To consider and, if thought fit, to pass with or without modification(s), the following resolution as SpecialResolution:-

“RESOLVED THAT in supersession of the earlier resolutions passed, the consent of the Company beand is hereby accorded in terms of Section 180 (1) (c) and other applicable provisions, if any, of the CompaniesAct, 2013 to the Board of Directors of the Company (hereinafter referred to as “the Board”, which term shallbe deemed to include any Committee thereof) for borrowing from time to time any sum or sums of monies,which together with the monies already borrowed by the Company (apart from temporary loans obtainedor to be obtained from the Company’s bankers in the ordinary course of business) may exceed the aggregateof the paid up capital of the Company and its free reserves, that is to say, reserves not set apart for anyspecific purpose, provided that the total amount so borrowed by the Board shall not at any time exceedRs.150 crore (Rupees One Hundred and Fifty crores).”

12. To consider and, if thought fit, to pass with or without modification(s), the following resolution as Special

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PRADEEP METALS LIMITEDResolution:-

“RESOLVED THAT pursuant to the provisions of Section 180 (1)(a) of the Companies Act, 2013 and otherapplicable provisions of the said Act, if any, and the Memorandum and Articles of Association of the Company,consent of the Members be and is hereby accorded to the creation by the Board of Directors of the Company(hereinafter referred to as “the Board, which term shall be deemed to include any Committee thereof) fromtime to time of such mortgage, charges, liens, hypothecation, assignment, transfer and/or other securities inaddition to the mortgages, charges, liens, hypothecation, assignment, transfer and/or other securities alreadycreated by the Company, on terms and conditions as the Board in its sole discretion may deem fit, on Company’sssets and properties, both present and future, whether moveable or immovable, including whole or substantiallythe whole of the Company’s undertaking(s) in favour of Lenders as may be agreed to by the Board for thepurpose of securing the repayment of any loans/financial assistance/other borrowings, subject to maximumof Rs. 150 Crores (Rupees One Hundred and Fifty Crores).”

RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board be and is herebyauthorized to finalize, settle and execute such documents /deeds / writings / papers / agreements as maybe required and to do all such acts, deeds, matters and things, as it may in its absolute discretion deemnecessary, proper or desirable and to settle any question, difficulty or doubt that may arise in regard tocreating mortgage / charge as aforesaid.”

13. To consider and, if thought fit, to pass with or without modification(s), the following resolution as OrdinaryResolution:-

“RESOLVED THAT pursuant to the provisions of Clause 49(II)(C) of the recently amended Listing Agreementwith the Stock Exchange(s) and the provisions of Section 197 and all other applicable provisions, if any,of the Companies Act, 2013 and the Rules framed thereunder (including any statutory modification(s) orre-enactment thereof, for the time being in force), consent, authority and approval of the Company be andis hereby accorded for payment of commission to the Directors of the Company (other than Directors fromthe Promoters’ Group) annually for each of the five financial years commencing from financial year 2014-15,an amount not exceeding 1% (one percent) of the net profits of the Company computed in accordancewith the provisions of Section 198 of the Act, to be divided amongst the Directors aforesaid in such amountsor proportions and in such manner as the Board of Directors (hereinafter referred as “Board”) of the Companymay from time to time determine and in default of such determination equally and further that the aboveremuneration shall be in addition to the sitting fees payable to such Directors for attending meetings ofthe Board and/ or Committee(s) thereof or for any other purpose, whatsoever, as may be decided by the Boardand reimbursement of expenses for participation in the Board and/or Committee meetings.

RESOLVED FURTHER THAT for the purpose of giving effect to this Resolution, the Board of the Companybe and is hereby authorised to do all such acts, deeds, matters and things and give such directions, asit may in its absolute discretion deem necessary, proper or desirable and to settle any question, difficultyor doubt that may arise in this regard.”

14. To consider and, if thought fit, to pass with or without modification(s), the following resolution as SpecialResolution:-

“RESOLVED THAT pursuant to the provisions of Section 188 and any other provisions, if any, of the CompaniesAct, 2013 and Rules framed thereunder (including any statutory modification(s) or re-enactment thereoffor the time being in force) and subject to statutory approval, if any, approval of the Company be and ishereby accorded to the Board of Directors to enter into contracts and supply goods and services to PradeepMetals Ltd., New York, USA, 100% subsidiary of the Company, during normal course of business and onarm’s length basis, notwithstanding the fact that the value of such contract/supples may exceed 5 (five)

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PRADEEP METALS LIMITEDpercent of annual turnover of the Company or 20 (twenty) percent of net worth of the Company in a yearand provided further that the terms and conditions of such contracts/supplies are not detrimental to theinterest of the Company and the value thereof shall not exceed Rs. 20 crore (Rupees Twenty crore) in anyfinancial year.”

By order of the Board of Directors For PRADEEP METALS LTD

ABHINAY KAPOORCOMPANY SECRETARY

Place: Navi MumbaiDate: 3rd July, 2014

REGISTERED OFFICE:Pradeep Metals Ltd.,R-205, MIDC, Rabale,Navi Mumbai - 400 701.CIN: L99999MH1982PLC026191

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PRADEEP METALS LIMITEDNotes:

(a) The relative Explanatory Statement pursuant to section 102 of the Companies Act, 2013 (Act) in respectof the business under Item Nos. 4 to 14 of the Notice, is annexed hereto. The relevant details as requiredunder Clause 49 of the Listing Agreement entered into with the Stock Exchange, of persons seekingappointment/re-appointment as Directors under Item Nos. 3,5, 6,7 and 8 of the Notice, are also annexed.

(b) A Member entitled to attend and vote at the Annual General Meeting (AGM) is entitled to appoint a proxyto attend and vote instead of himself and the proxy need not be a Member of the Company. The instrumentappointing the proxy, in order to be effective, must be deposited at the Company’s Registered Office, dulycompleted and signed, not less than FORTY-EIGHT HOURS before the meeting. Proxies submitted onbehalf of limited companies, societies, etc., must be supported by appropriate resolutions/authority, asapplicable. A person can act as proxy on behalf of Members not exceeding fifty (50) and holding in theaggregate not more than 10% of the total share capital of the Company. In case a proxy is proposed to beappointed by a Member holding more than 10% of the total share capital of the Company carrying votingrights, then such proxy shall not act as a proxy for any other person or shareholder.

(c) The Register of Members and Transfer Books of the Company will be closed from 28th August, 2014 to3rd September, 2014 (both days inclusive).

(d) If the Dividend as recommended by the Board of Directors is approved at the AGM, payment of such dividendwill be made on or before 3rd October, 2014 as under:I. To all Beneficial Owners in respect of shares held in dematerialized form as per the data made available

by the National Securities Depository Limited (NSDL) and the Central Depository Services (India)Limited (CDSL) as of the close of business hours on 27th August, 2014;

II. To all Members in respect of shares held in physical form after giving effect to valid transfers in respectof transfer requests lodged with the Company on or before the close of business hours on27th August, 2014.

(e) Members holding shares in dematerialized form are requested to intimate all changes pertaining to their bankdetails, Electronic Clearing Service (ECS), mandates, nominations, power of attorney, change of address,change of name, e-mail address, contact numbers, etc., to their Depository Participant (DP). Changesintimated to the DP will then be automatically reflected in the Company’s records which will help theCompany and the Company’s Registrars and Transfer Agents, Link Intime India Private Limited (LIIPL),Pannalal Silk Mills Compound, LBS Marg, Bhandup West, Mumbai 400 078 to provide efficient and betterservices. Members holding shares in physical form are requested to intimate such changes to LIIPL.

(f) Members holding shares in physical form are requested to consider converting their holding to dematerializedform to eliminate all risks associated with physical shares and for ease of portfolio management. Memberscan contact LIIPL for assistance in this regard.

(g) Members holding shares in physical form in identical order of names in more than one folio are requestedto send to the Company or LIIPL, the details of such folios together with the share certificates for consolidatingtheir holding in one folio. A consolidated share certificate will be returned to such Members after makingrequisite changes thereon.

(h) Members seeking any information with regard to the Accounts, are requested to write to the Company atleast 7 (seven) days before the Meeting, so as to enable the Management to keep the information readyat the meeting.

(i) In case of joint holders attending the meeting, the Member whose name appears as the first holder in theorder of names as per the Register of Members of the Company will be entitled to vote.

(j) The Notice of the AGM along with the Annual Report for financial year 2013-14 is being sent by electronicmode to those Members whose e-mail addresses are registered with the Company/Depositories, unlessany Member has requested for a physical copy of the same. For Members who have not registered theire-mail addresses, physical copies are being sent by the permitted mode.

(k) Members may also note that the notice of 31st Annual General Meeting and Annual Report for financial year

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PRADEEP METALS LIMITED2013-14 will also be available on Company’s website i.e. www.pradeepmetals.com for their reference.

(l) All documents referred to in this Notice and Explanatory Statements are open for inspection at the RegisteredOffice of the Company on all working days, except holidays, between 10.00 a.m. and 1 p.m. up to date ofthe Annual General Meeting except on Sundays and other holidays.

(m) Members/Proxies are requested to bring their copies of the Annual Report to the meeting.

(n) The Company’s Equity shares are the Scripts which Security Board of India (SEBI) has specified for settlementonly in dematerialised form by all investors.

(o) Voting through Electronic Meansi) According to section 108 of Companies Act, 2013, read with Rule 20 of Companies (Management

and Administration) Rules, 2014 e-voting is mandatory for all listed Companies or Companies havingShareholders not less than one thousand.

ii) In compliance with provisions of Section 108 of the Companies Act, 2013 and Rule 20 of the Companies(Management and Administration) Rules, 2014, the Company is pleased to provide Members thefacility to exercise their right to vote at the Annual General Meeting (AGM) by electronic means andthe business may be transacted through e-Voting Services provided by National Securities DepositoryLimited (NSDL).

iii) A Member may exercise his vote at any general meeting by electronic means and company may passany resolution by electronic voting system in accordance with the Rule 20 of the Companies (Managementand Administration) Rules, 2014.

iv) During the e-voting period, Members of the Company, holding shares either in physical form ordematerialized form, as on a fixed date, may cast their vote electronically.

v) The e-Voting shall remain open from Friday, 29th August, 2014 (from 9.00 a.m.) till Saturday,30th August, 2014 (till 6.00 p.m.).

vi) E-Voting shall be completed three days prior to the date of Annual General Meeting.vii) The Board of Directors at their meeting held on 3rd July, 2014 have appointed Ms. Shweta Gokarn,

Practicing Company Secretary as the scrutinizer for e-Voting to unblock the votes in favour or against,if any, and to report forthwith to the Chairman. The scrutinizer will be responsible to conduct e-Votingin a fair and transparent manner.

viii) Members should take note that Vote once casted cannot be changed/altered.ix) The instructions for e-voting are as under:

i. The Notice of the AGM of the Company inter alia indicating the process and manner of e-Votingprocess along with printed Attendance Slip and Proxy Form is being dispatched to all theMembers. Initial logging ID and password is provided separately in the e-voting form.EVEN (E Voting Event Number) USER ID PASSWORD/PIN

ii. NSDL shall also be sending the User-Id and Password, to those Members whose shareholdingis in the dematerialized format and whose email addresses are registered with the Company/Depository Participant(s). For Members who have not registered their email address, can usethe details as provided above.

iii. Launch internet browser by typing the following URL: https://www.evoting.nsdl.com/iv. Click on Shareholder- Loginv. Put user-Id and Password as initial password noted in step (b) above. Click Login.vi. Password change menu appears. Change the password with new password of your choice

with minimum 8 digits/characters or combination thereof. Note new password. It is stronglyrecommended not to share your password with any other person and take utmost care tokeep your password confidential.

vii. Home page of e-Voting opens. Click on e-Voting: Active Voting Cycles.viii. Select “EVEN” of Pradeep Metals Limited.ix. Now you are ready for e-Voting as Cast Vote page opens.x. Cast your vote by selecting appropriate option and click on “Submit” and also “Confirm” when prompted.xi. Upon confirmation, the message “ Vote cast successfully “ will be displayed.

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PRADEEP METALS LIMITEDxii. Once you have voted on the resolution, you will not be allowed to modify your vote.xiii. Institutional shareholders (i.e. other than individuals, HUF, NRI etc.) are required to send scanned

copy (PDF/JPG Format) of the relevant Board Resolution/ Authority letter etc. together with attestedspecimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizerthrough e-mail [email protected] with a copy marked to [email protected].

xiv. In case of any queries, you may refer the Frequently Asked Ques tions (FAQs) for Shareholders ande-Voting user manual for Shareholders available at the Downloads section of www.evoting.nsdl.com.

xv. If you are already registered with NSDL for e-voting then you can use your existing user-Id andpassword for casting your vote.

xvi. You can also update your mobile number and e-mail id in the user profile details of the foliowhich may be used for sending future communication(s).

xvii. The e-Voting period commences on Friday, 29th August, 2014 (from 9.00 a.m.) and ends onSaturday, 30th August, 2014 till (6.00 p.m.). During this period, Members of the Company, holdingshares either in physical form or in dematerialized form, as on the cut-off date of 1st August, 2014,may cast their vote electronically. The e-Voting module shall also be disabled by NSDL for votingthereafter. Once the vote on a resolution is casted by the Member, Member will not be allowed to changeit subsequently.

xviii. The voting rights of Members shall be in proportion to their shares of the paid up equity sharecapital of the Company as on, 1st August, 2014.

xix. Since the Company is required to provide facility to the Members to exercise their right to vote byelectronic means, Member of the Company, holding shares either in physical form or indematerialized form, as on 1st August, 2014 and not casting their vote electronically, may casttheir vote at the Annual General Meeting.

xx. The Scrutinizer shall within a period of not exceeding three (3) working days from the conclusionof the e-Voting period unlock the votes in the presence of at least two (2) witnesses not in theemployment of the Company and make a Scrutinizer ’s Report of the votes cast in favour oragainst, if any, forthwith to the Chairman of the Company.

xxi. The Results shall be declared on or after the Annual General Meeting of the Company. The Resultsdeclared along with the Scrutinizer’s Report shall be placed on the Company’s websitewww.pradeepmetals.com and on the website of NSDL within 2 (two) days of passing of theresolutions at the Annual General Meeting of the Company on 4th September, 2014 and communicatedto the BSE Limited.

(p) Green InitiativeThe Ministry of Corporate Affairs has taken a ‘Green Initiative’ in Corporate Governance by issuing circularsallowing paperless compliances by the companies through electronic mode. The Shareholders can nowreceive various notices and documents through electronic mode by registering their e-mail address withthe Company. Shareholders, who have not registered their e-mail address with the Company, can nowregister the same by submitting the duly filed in ‘E-Communication Registration Form’ enclosed at theend of this Notice, with Link Intime India Pvt. Ltd., Registrar & Transfer Agent of the Company. The Membersholding shares in electronic form are requested to register their e-mail addresses with their DepositoryParticipants only.

Even after registering for E-communication, the shareholders of the Company are entitled to receive suchcommunication in physical form, upon request.

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EXPLANATORY STATEMENTPursuant to Section 102 of the Companies Act, 2013

Item No: 3Profile of the Directors being re-appointed as required under Clause 49 of the Listing Agreement entered intowith the BSE Limited:-

Name of the Director Mr. Omprakash AgarwalDate of Birth 25th March, 1940Date of Appointment 10th May, 2001Expertise in Specific Functional Area EngineerQualification B.E. (Mech), Birla College of Engineering, PilaniNo. of shares held in the Company 13,300Lists of Outside Directorship Held Economic Forge (P) Ltd.

Supreme Heat Treaters (P) Ltd.Rabale Engineering India Pvt. Ltd.Dhanlabh Engineering Works Pvt. Ltd.

Chairman/ Members of the Committee of the Chairman - Shareholders’/Investors’ Grievance Committee.Board of Directors of the CompanyChairman/Member of the Committee of theBoard of Directors of the Companies:a) Audit Committee Nilb) Shareholders’/Investors’ Grievance

Committee Nilc) Nomination & Remuneration Committee Nil

Item No. 4

M/s. S. R. Rege & Co, Chartered Accountants, were re-appointed as Statutory Auditors of the Company to holdoffice from the conclusion of the previous Annual General Meeting (AGM) until the conclusion of the ensuingAGM. M/s. S. R. Rege & Co. have been the Auditors of the Company since more than 10 years. Consideringthe provisions of Section 139 of the Act and other applicable provisions and Rules, the Board of Directors ofthe Company, based on recommendation of the Audit Committee, have proposed appointment of M/s. S. R.Rege & Co. as Statutory Auditors of the Company for a period of three years to hold office from conclusion ofthis AGM till the Conclusion of Thirty Fourth AGM of the Company to be held in the year 2017 (subject toratification of their appointment at every AGM).

The Board recommends the Resolution for approval by the Members. None of the Directors or Key ManagerialPersonnel or their relatives is concerned or interested in the Resolution.

Item Nos. 5 ,6,7 and 8The Company had appointed Mr. Kewal K. Nohria, Mr. Omprakash Agarwal, Mr. Suresh G. Vaidya, Mr. RajKumar Mittal, Mr. Rajeev D. Mehrotra and Mr. Jaidev R. Shroff as Independent Directors of the Company onvarious occasions, in compliance with the Rules and Regulations prevalent at the relevant time. WhileMr. Kewal K. Nohria and Mr. Omprakash Agarwal ceased to be Independent Directors subsequently, the otherdirectors continued to satisfy the criteria of being Independent Directors as per Clause 49 of the ListingAgreement and all of them were liable to retire by rotation.

Pursuant to the provisions of Section 149 of the Companies Act, 2013, which came into effect from 1st April,2014, every listed public company is required to have at least one-third of the total number of directors asIndependent Directors, as defined in that Section, who will not be liable to retire by rotation.

The Company has received notices in writing along with deposit of Rs. 1 lac each under the provisions ofSection 160 of the Companies Act, 2013 from Members, proposing the candidature of Mr. Raj Kumar Mittal,


PRADEEP METALS LIMITEDMr. Suresh G. Vaidya, Mr. Rajeev D. Mehrotra and Mr. Jaidev R. Shroff for the office of Independent Director.Further, the Board of Directors of the Company are of the opinion that Mr. Raj Kumar Mittal, Mr. Suresh G.Vaidya, Mr. Rajeev D. Mehrotra and Mr. Jaidev R. Shroff fulfill the conditions specified in Section 149 of theCompanies Act, 2013 and Rules made thereunder for being appointed as Independent Directors and theyare independent of the management.

Apart from the above referred Directors, none of the other Directors and Key Managerial Personnel of theCompany and their relatives, is concerned or interested in the Resolutions.

Keeping in view of the experience and expertise of the above referred directors and the contribution made bythem to the Company, the Board of Directors considers it desirable that their continued association would beof immense benefit to the Company and accordingly recommends the Resolutions as set out in Item Nos.5,6,7 and 8 for approval of the Members.

The brief profile of the directors, who are proposed to be appointed as Independent Directors, are as follows:Name of the Director Mr. Raj Kumar Mittal Mr. Suresh G. Vaidya Mr. Rajeev D. Mehrotra Mr. Jaidev R. Shroff

Date of Birth 5th May, 1944 1st April, 1939 1st July, 1966 4th October, 1965

Date of Appointment 29th January, 2008 24th June, 2005 5th May, 2012 12th August, 2011

Expertise in Specific Financial Consultancy Technical & General Financial Expert IndustrialistFunctional Area Services for more than Management

30 years.

Qualification B.Com (Hons.), F.C.A. L.T.M. , B. Text B.Com, CA (Inter), MBA B. Sc.

No. of shares held in the Nil Nil Nil NilCompany

Lists of Outside 1. Elegant Marbles And 1. The Victoria Mills Limited 1. Alpha Alternatives 1. Nivi Trading Ltd.Directorship Held Grani Industries Limited Holding Pvt. Ltd. 2. UPL Ltd.

2. CS Enterprises Private 2. Alpha Alternative 3. Ventura Guaranty Ltd.Limited Advisors Pvt. Ltd. 4. Uniphos Enterprises Ltd.3. Vithal Finvest And 5. Advanta Ltd.Consultants Private Limited 6. Tatva Global Environment4. Mumbai Vaish Seva Ltd.Sansthan 7. Tatva Global Environment

(Deonar) Ltd.8.Asia Society India Center

Chairman/ Members of the Chairman- Audit Committee Member- Audit Committee, Chairman- Nomination & NilCommittee of the Board of Member- Nomination & Nomination & Remuneration Remuneration CommitteeDirectors of the Company Remuneration Committee, Committee and Shareholders’/ Member - Corporate Social

Corporate Social Investors’ Grievance Responsibility CommitteeResponsibility Committee and Risk ManagementCommittee and Risk CommitteeManagement Committee

Chairman/Member of theCommittee of the Board ofDirectors of the Companies:a) Audit Committee Member - 1 Nil Nil Nilb) Shareholders’/ Member - 1 Nil Nil Member - 1

Investors’ GrievanceCommittee

c) Nomination & Nil Nil Nil NilRemuneration Committee

Item No. 9The Board of Directors, on the recommendation of the Audit Committee, has approved the appointment andremuneration of M/s.J.J. Paleja & Co. as Cost Accountants, to conduct the audit of the cost records of theCompany for the financial year ending March 31, 2015 on a remuneration of Rs. 1,25,000/- (Rupees One LacTwenty Five Thousand Only) plus service tax and reimbursement of out of pocket expenses at actual. Inaccordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules,2014, the remuneration payable to the Cost Auditors needs to be ratified by the Members of the Company.Accordingly, consent of the Members is sought by passing an Ordinary Resolution, as set out at Item No. 9

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PRADEEP METALS LIMITEDof the Notice, for ratification of the remuneration payable to the Cost Auditors for the financial year ending31ST March, 2015.

None of the Directors/Key Managerial Personnel of the Company/ their relatives is, in any way, concerned orinterested, financially or otherwise, in the Resolution.

The Board recommends the Ordinary Resolution for approval by the Members.

Item No. 10The Members of the Company had accorded their approval for re-appointment of Mr. Pradeep Goyal asChairman and Managing Director of the Company for a period of 1 (one) year with effect from 17th December,2013 till 16th December, 2014 and the remuneration payable to him, by passing a Special Resolution at itsExtra Ordinary General Meeting held on 25th January, 2014, subject to approval of Central Government. Theremuneration payable to Mr. Goyal was maintained at Rs. 92,40,000/- (Rupees Ninety Two Lacs FortyThousand Only) per annum as already approved by the Central Government vide letter dated 26th December,2013 for the earlier period.

Members are informed that Company has made an application in E-Form 25A vide SRN B96169511 on 14th

February, 2014, for seeking approval of the Central Government for appointment of Mr. Pradeep Goyal asChairman and Managing Director of the Company for tenure of one year commencing from 17th December,2013 till 16th December, 2014 as the remuneration proposed was exceeding the limits prescribed in ScheduleXIII of the Companies Act, 1956 and that the said approval is awaited till date.

The Board of Directors, on the basis of recommendation of the Nomination & Remuneration Committee, hasapproved the re-appointment of Mr. Pradeep Goyal as Chairman and Managing Director of the Company for thetenure of 3 (Three) years with effect from 17th December, 2014 till 16th December, 2017, on remuneration asmentioned in the Resolution No. 10, subject to approval of its Members by a Special Resolution and approvalof Central Government, if any. The Board/Nomination & Remuneration Committee, after careful considerationand deliberation on Mr. Pradeep Goyal’s experience, expertise and responsibilities shouldered by him andrising volume of Company’s business and profits earned by it as also the practice prevailing in the Industry,thought it in the best interest of the Company that Mr. Pradeep Goyal be re-appointed as Chairman andManaging Director of the Company for the tenure of 3 (three) years. While maintaining the basic salary andother perquisites at the existing level, it has been thought appropriate that an Incentive Pay upto Rs. 25,00,000/-(Rupees Twenty Five Lacs only) per annum, as may be determined by the Board/Nomination & RemunerationCommittee, depending upon the performance of the Company, be paid to him.

The information as required under Part II Section II (A)(iv) of Schedule V of the Companies Act, 2013 is givenin the Annexure to the Notice.

Mr. Pradeep Goyal and Mrs. Neeru Pradeep Goyal, Director, being related to Mr. Pradeep Goyal and theirrelatives are interested in the said Resolution. None of the other Directors is concerned or interested in theResolution. Further, Mr. Pradeep Goyal holds 8.81% shareholding of the Company and belongs to the PromotersGroup.

Considering Mr. Pradeep Goyal’s qualifications, experience, expertise and responsibilities shouldered byhim, rising volume of Company’s business and profits earned by it, the proposed re-appointment on theremuneration payable to him, as mentioned in the Resolution, may be considered as reasonable. YourDirectors are of the opinion that the re-appointment of Mr. Pradeep Goyal as Chairman and ManagingDirector of the Company is in the best interests of the Company.

The Board recommends to the Members to consider and approve the Special Resolution.

The above Explanatory Statement shall be construed as an abstract of the terms of the appointment/re-appointment/variations, together with a Memorandum of interest or concern of the interested Directors, asprescribed under Section 190 of the Companies Act, 2013.

Item Nos. 11 and 12Members of the Company, by way of Ordinary Resolutions passed in its 28th Annual General Meeting held on4 July, 2011, had accorded their consent to the Board of Directors to borrow funds and to mortgage and/or

11


PRADEEP METALS LIMITEDcreate charge on all or anyone of the moveable/immovable properties or such other assets of the Company,to the extent of Rs. 150 crore. In view of provisions of Section 180 of the Companies Act, 2013, the consentof the Members is required by way of a Special Resolution to borrow funds in excess of the paid up capitaland free reserves of the Company and to create charge and mortgage the movable and immovable assetsof the Company as security. Accordingly, the consent of Members, as contained in item Nos. 11 and 12, isbeing sought in order to enable the Board to borrow the monies from time to time for meeting the businessneeds of the Company, subject to maximum of Rs. 150 crore at any given time.

None of the directors are interested in these Resolutions.

The Board of Directors recommends the Resolutions at Item Nos. 11 and 12 for your approval as SpecialResolutions.

Item No. 13The Non-Executive Directors of the Company bring with them significant professional expertise and richexperience across a wide spectrum of functional areas such as corporate strategy, resources, informationsystems, technology and finance. They also bring an external and wider perspective in Board deliberationsand decisions. The role and responsibilities of the Non-Executive Directors have undergone significantchanges under Corporate Governance norms and made it more onerous for them, demanding their greaterinvolvement in the supervision of the Company. The Board of Directors of the Company is of the view that it isnecessary that adequate remuneration should be given to the Non-Executive Directors so as to compensatethem fro their time, attention and efforts and also to retain and attract the pool of talent for the growth andprosperity of the Company.

Clause 49(II)(C) of the recently amended Listing Agreement with the Stock Exchange provides that all fees/compensation paid to Non-Executive Directors of the Company, including Independent Directors, shall befixed by the Board of the Directors of the Company and shall require prior approval of the Members in GeneralMeeting and that the requirement of obtaining the said prior approval of Members/Central Government shallnot apply to payment of sitting fees to Non-Executive Directors, if made within the limits prescribed under theCompanies Act, 2013.

Accordingly, approval of the Members is sought by way of an Ordinary Resolution under the applicableprovisions of the Companies Act, 2013 for payment of commission to the Directors of the Company (otherthan the Directors who are either in wholetime employment of the Company or belong to the Promoters’Group) annually for each of the five financial years commenting from financial year 2014-15, an amount notexceeding 1% (one percent) of the net profits of the Company computed in accordance with the provisions ofSection 198 of the Act, to be divided amongst the Directors aforesaid in such amounts or proportions and insuch manner as the Board of Directors of the Company may from time to time determine and in default ofsuch determination equally. The payment of commission will be in addition to the sitting fees payable to suchDirectors for attending meetings of the Board and/or Committee(s) thereof or for any other purpose whatsoeveras may be decided by the Board and reimbursement of expenses for participation in the Board and/orCommittee meetings.

The Board, therefore, recommends the Resolution to be passed as an Ordinary Resolution by the Members.All the Non-Executive Directors of the Company (other than those form the Promoters’ Group) and theirrelatives are deemed to be concerned or interested in the proposed Resolution to the extent of theremuneration that may be received by them. None of the other Directors or Key Managerial Personnel of theCompany either directly or through their relatives is, in any way, concerned or interested, whether financiallyor otherwise, in the proposed Resolution.

Item No. 14Pradeep Metals Ltd., New York, USA (PML,USA), 100% subsidiary of the Company, is engaged in procuringand importing materials mainly from the Company, warehousing it at 1833 Downs Drive, West Chicago, IL60185 and supplying the materials to the customers in USA. The main objective of this company is to ensurethe delivery of the material to meet Just-In-Time delivery requirement of certain discreet customers.

This strategy will help the Company to retain the existing customers as well as to grow business with them

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PRADEEP METALS LIMITEDand also to develop new customers. The Company exported material worth USD 13,06,949 (equivalent toRs. 815.26 Lacs) to PML, USA in the financial year 2013-14 and it is expected to grow substantially in theyears to come.

As the exports/supplies to PML, USA are likely to exceed 5 (five) percent of the turnover of the Company and20 (twenty) percent of its net worth in a financial year, these are deemed “material related party transactions”in terms of provisions of Section 188 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.Accordingly, the approval of the Members is sought required pursuant to the provisions of Section 188 of theCompanies Act, 2013.

As Mr. Pradeep Goyal, Chairman & Managing Director and Mr. Abhinav Goyal, Vice President (BusinessDevelopment & Technology) of the Company are also the Directors of PML, USA on behalf of the Company,and, accordingly, they, together Mrs. Neeru Goyal, Director of the Company and their relatives, may bedeemed to be interested in the Resolution. None of the other Directors are interested in this Resolution.

The Board of Directors recommends the Resolution for your approval as a Special Resolution.

By order of the Board of DirectorsFor PRADEEP METALS LTD

ABHINAY KAPOOR COMPANY SECRETARY

Place: Navi MumbaiDate: 3rd July, 2014

REGISTERED OFFICE:Pradeep Metals Ltd.,R-205, MIDC, Rabale,Navi Mumbai - 400 701.

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PRADEEP METALS LIMITEDAnnexure

The information as required under Part II Section II (A-ii) (iv) of the Schedule V to the Companies Act, 2013is given as under:

I. General Information

1 Nature of the industry Manufacturer and Exporter of closed die forged andmachined components.

2 Date or expected date of commencement of Already in business for more than 25 years.commercial production

3 In case of new companies, expected date of Not applicable commencement of activities as per projectapproved by financial institutions appearing inthe prospectus.

4 Financial performance based on given indicators: 2013-2014 2012-2013 2011-2012(As per revised Schedule VI of the CompaniesAct, 1956) (Rs. in Lacs)

Gross Receipts 12232.40 13629.75 11797.41

Profit Before Exceptional Items & Tax 906.44 775.22 735.69

Profit After Exceptional Items & Tax 604.37 441.25 583.09

5 Export performance and net foreign exchange Export turnover Net foreignearnings during the financial year 2013-14 exchange earnings

Rs. 7327.86 Lacs Rs. 7166.99 Lacs

6 Foreign investments or collaborators, if any USD 5,000 in Wholly Owned Subsidiary- PradeepMetals Limited- New York, USA

II. Information about the appointee:a) Background Details

Mr. Pradeep Goyal is associated with the Company since its incorporation. He is considered forre-appointment as Chairman and Managing Director of the Company due to his vast experience inthe industry and strong educational background. He is a qualified engineer having completed his B. Tech(Metallurgy) from Indian Institute of Technology, Kanpur (1978) and obtained his S.M. (Materials Scienceand Engineering) from the world renowned Massachusetts Institute of Technology, Cambridge, MA,USA, (1980). He is currently on the Board of Directors of UPL Limited, Uniphos Enterprises Ltd, HindRectifiers Limited, S. V. Shah Construction Services Pvt. Ltd., B S Metal Pvt. Ltd. and Janakalyan SahakariBank Ltd. He was trained with Mukand Limited, India and Degussa International, Hanau, West Germany.He also worked at Air Products and Chemicals Inc., Allentown, PA, USA for 3 years at various positions.Mr. Goyal is associated with Company since its incorporation and he is on the Board of Directors sinceyear 1983. He has been holding office as Managing Director since 17th December, 2000. Since 2010, hehas also been appointed as Chairman of the Company. The Company has seen exceptional growth dueto his technical, marketing and managerial expertise. He has been a Trustee of ASM International, USA,and a Member of All India Manufacturers Organization. He is also a Member of Indo- German Chamberof Commerce, Indian Merchants Chamber and Thane Belapur Industries Association.

Past RemunerationDetails of the remuneration paid to Mr. Pradeep Goyal, during the tenure of his re-appointment from17th December, 2010 to 16th December, 2013, as Chairman and Managing Director of the Companyare as follows:

a) From 17th December, 2010 To 30th September, 2012 : Rs. 3,00,000/- per monthb) From 1st October, 2012 To 16th December, 2013 : Rs. 7,00,000/- per monthc) From 17th December, 2013 to 16th December, 2014 : Rs. 7,00,000/- per month

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PRADEEP METALS LIMITEDApart from the basic salary, he is also eligible for perquisites and allowances as permitted tosenior executives of the Company. The salary and perquisites aggregating to Rs. 37,44,165/-,Rs. 71,12,455/- and Rs. 95,28,580/- were paid to him in financial years 2011-12, 2012-13 and2013-14 respectively.

b) Remuneration ProposedAs per the terms and conditions given in proposed Resolution and Explanatory Statement forming partof Notice of Annual General Meeting.

c) Recognitions and awardsMr. Pradeep Goyal was awarded the 1st Rank in Metallurgy at I.I.T. Kanpur and received Silver Medalfrom the President of India. Best Student Metallurgist Award was conferred on him by the Indian Instituteof Metals in 1978. He is the recipient of several awards and scholarships all through his career.

d) Job profile and suitabilityMr. Pradeep Goyal is associated with Company since its incorporation and he is on Board of Directorssince year 1983. He has been holding office as Managing Director since 17th December, 2000. Since 2010,he has also been appointed as Chairman of the Company. The Company has seen exceptional growthdue to his technical, marketing and managerial expertise.

e) Comparative Remuneration Profile with respect to industry, size of Company, profile and positionof the personConsidering the qualification and experience of Mr. Pradeep Goyal and looking to the considerablegrowth of the Company, its increasing revenue as well as profitability and the responsibilities shoulderedby him, the remuneration proposed to be paid is commensurate with the remuneration packages paidto similar level counterpart(s) in the Industry.

f) Pecuniary Relationship directly or indirectly with the Company or relation with Managerial PersonMr. Pradeep Goyal belongs to the Promoters’ Group and is related to Mrs. Neeru Pradeep Goyal, Director.His son, Mr. Abhinav Pradeep Goyal, has been appointed as Vice President (Business Development& Technology) in the Company for a period of 5 (five) years with effect from 1st September, 2012 on theremuneration of Rs. 30,00,000/- (Rupees Thirty Lacs Only) per annum in terms of Special Resolutionpassed at the Extra-Ordinary General Meeting held on 29th December, 2012 and Government’s approvalvide letter dated 13th November, 2013.

Besides remuneration being paid/ proposed to be paid, he does not have any pecuniary relationshipwith the Company.

III. Other Informationa) Reasons of loss or inadequate profits

Business profits had been low in the past due to several reasons like overall economic position inthe engineering industry, high interest rates, frequent increase in energy and raw material costs andcompetitive market conditions.

b) Steps taken or proposed to be taken for improvementThe Company has diversified its business in the non-automotive sector, increased exports and valueadded products with the technical and marketing efforts of Mr. Pradeep Goyal. The Company hasdeveloped new customers and also new components for existing customers resulting into increasedbusiness. The Company has also embarked on several steel yield improvement methods and energyconservation for improved profitability.

c) Expected increase in productivity and profits in measurement termsConsidering the recessionary market conditions prevailing globally and efforts made by the managementto develop new products and customers, the Company has set the following targets in terms of salesand profitability:-

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PRADEEP METALS LIMITED(Rs. in Lacs)

Year 2014-2015 2015-16 2016-17

Gross Receipts 14717 15856 16831

Net Profit before Tax 987 1147 1280

Net Profit after Tax 667 775 865

IV. Disclosurea) Remuneration package of the appointee: As mentioned in the Special Resolution and its Explanatory

Statement under Item No. 10.

b) Disclosure in the Board of Director’s report under the heading “Corporate Governance”, if any, attachedto the annual report: Requisite Disclosures have been made in the Section on Corporate Governance,attached to and forming part of the Director’s Report, published for the Financial year ended on31st March, 2014.

16

PRADEEP METALS LIMITED(

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AR

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)

PRADEEP METALS LTD.Regd. Office: R-205, MIDC, Rabale, Navi Mumbai 400 701

3rd July, 2014

Dear Shareholder,

Ref: Green Initiative in the Corporate Governance: Go Paperless

The Ministry of Corporate Affairs (“MCA”) has taken a ‘Green initiative in the Corporate Governance’ byallowing paperless compliances by companies vide its Circular Nos. 17/2011 dated 21/04/2011 and18/2011 dated 29/04/2011 inter alia stating that the service of documents by the companies to its Memberscan be made through electronic mode.

The initiative taken by the MCA is a welcome step for the society at large, as this will reduce paperconsumption to a great extent, ensure prompt receipt of communication and avoid loss of document inpostal transit. Supporting the said move of MCA, we propose to send all future shareholderscommunications/documents like Notices of General Meetings, Annual Reports, Financial Results, etc. tothe shareholder in electronic mode.

We are sure, that you will whole-heartedly support this initiative and cooperate with the Company to makeit a success. We, therefore, request you to fill up the information slip below for registering your e-mail IDand send it to our Registrar & Share Transfer Agent, Link Intime India Pvt. Ltd. You can also send us an e-mail from your e-mail ID to [email protected] for receiving aforesaid documents in electronicform and mentioning there in your Folio No. /DP ID/Client ID.

Please note, as a valued shareholder, you are always entitled to request and receive, free of cost, a printedcopy of the Annual Report of the Company and all other documents/communications entitled under theCompanies Act, 2013.

Thanking you,

Yours faithfully,For Pradeep Metals Ltd.

Sd/-Abhinay KapoorCompany Secretary————————-----————--——————TEAR HERE——————————————————————

Link Intime India Pvt. Ltd.Unit: Pradeep Metals Ltd.C-13, Pannalal Silk Mills Compound,LBS Marg, Bhandup West,Mumbai 400 078.

Folio No. / DP ID & Client ID :

Name of 1st Registered Holder :

Name of Joint Holder(s) :

E-mail ID (to be registered) :

Date: Signature of First Holder:

Note: Shareholders are requested to keep the company informed as and when there is any change in thee-mail address. Unless the e-mail ID given above is changed by you by sending another communicationin writing, the Company will continue to send the documents to you on the above mentioned E-mail ID.

Separated Page


BLANK


31stANNUALREPORT2013-14


PRADEEP METALS LIMITED31st ANNUAL REPORT 2014TABLE OF CONTENTS

CONTENTS PAGE NO.

COMPANY INFORMATION 1

PERFORMANCE AT A GLANCE 2

DIRECTORS’ REPORT 3

ANNEXURE A TO DIRECTORS’ REPORT 6

MANAGEMENT DISCUSSION & ANALYSIS 8

REPORT ON CORPORATE GOVERNANCE 10

AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE 17

CEO / CFO CERTIFICATION 17

AUDITOR’S REPORTS 18

FINANCIAL STATEMENTS 24


COMPANY INFORMATION

Board of DirectorsPradeep Goyal : Chairman and Managing DirectorKewal Krishan Nohria : Non-Executive DirectorSuresh G. Vaidya : Independent DirectorRaj Kumar Mittal : Independent DirectorRajeev D. Mehrotra : Independent DirectorJaidev R. Shroff : Independent DirectorOmprakash Agarwal : Non-Executive DirectorNeeru Pradeep Goyal : Non-Executive Director

Company SecretaryAbhinay Kapoor

BankersUnion Bank of India

Statutory AuditorsS.R. Rege & Co., Chartered Accountants

Registered OfficeR-205, MIDC, Rabale, Navi Mumbai 400 701.Tel: +91-22-27691026Fax: +91-22-27691123e-mail: [email protected]: www.pradeepmetals.comCIN: L99999MH1982PLC026191

Registrar and Transfer AgentsLink Intime India Pvt. Ltd.C-13, Pannalal Silk Mills Compound, LBS Marg,Bhandup (West), Mumbai- 400 078.Tel. +91-22-25946970 Fax: +91-22-25946969e-mail: [email protected]

1

31st ANNUAL REPORT 2014

PRADEEP METALS LIMITEDPERFORMANCE AT A GLANCE (Rs. in Lacs)

2013-14 2012-13 2011-12 2010-11 2009-10

Sales and Other Income (Net of Excise Duty) 11,542 12,703 11,129 8,342 5,081Profit before Interest, Depreciation and Tax 1,444 1,398 1,360 1,134 584Less : Interest 332 423 440 342 309Less: Depreciation and Amortization Cost 206 200 184 168 144

Profit before Tax 906 775 736 624 131Less: Provision for Tax 314 259 228 124 24

(Add) / Less: Income Tax adjustment for prior years - 81 - 1 -

(Add) / Less : Provision for Deferred Tax Assets/Liability (12) (6) 75 277 74

Profit for the year 604 441 583 222 33

Earning per Equity Share of Rs. 10/- each (in Rupees) :-

(a) Basic 3.50 2.62 3.68 1.27 0.37(b) Diluted 3.50 2.56 3.51 1.15 0.37

Net Worth 3,377 3,015 2,648 2,258 2,318

2

PRADEEP METALS LIMITEDDIRECTORS’ REPORT

To,The ShareholdersYour Directors are pleased to present the Thirty First Annual Report and the Audited Accounts for the yearended 31st March, 2014.

FINANCIAL HIGHLIGHTS Rs. in Lacs

2013-14 2012-13Revenues from Operations and Other Income (Net of Excise Duty) 11,542.02 12,703.29EBDITA 1,444.01 1,398.18Finance Costs 331.43 423.20Depreciation and Amortization cost 206.14 199.76Profit before Tax 906.44 775.22Provision for Income Tax 313.69 259.33Income Tax Adjustment for prior years - 80.31Provision for Deferred Tax (Assets)/Liability (11.62) (5.67)

604.37 441.25Balance of Profit and Loss Account from previous year 584.08 348.20Amount transferred to General Reserve 23.00 -Proposed Dividend on Equity Shares for the year (including dividenddistribution tax Rs. 35.22 Lacs (previous year Rs. 28.02 Lacs) 242.46 205.37Balance Carried Forward 922.99 584.08

PERFORMANCEYour Company has achieved Revenues from Operations and Other Income (Net) of Rs. 11,542.02 Lacsduring the current financial year, as against Rs. 12,703.29 Lacs in the previous year. But, PBT for the yearhas improved by 16.9% in spite of reduction in the Income by 9.1% and increase in Employees’ Cost by10.6%. Detailed analysis and future outlook of the Company’s business are dealt in the ManagementDiscussion and Analysis.

DIVIDENDThe Directors of the Company are pleased to recommend a dividend of 12% i.e. Rs. 1.20 per equity shareof Rs. 10 each for the financial year 2013-14 (10% i.e. Re. 1.00 per share for previous year). The totalamount of dividend proposed to be distributed and tax thereon aggregate to Rs. 242.46 Lacs and dividendpayout ratio comes to 40.1%. A sum of Rs. 23.00 Lacs is proposed to be transferred to General Reserve.

WHOLLY OWNED SUBSIDIARY COMPANYDuring the year under review, your Company has invested a sum of USD 5,000 (Rs. 2.72 Lacs) for 100%equity in Pradeep Metals Ltd., New York, USA, in order to facilitate Just-In-Time delivery of the Company’sproducts to certain discreet customers. It will also steadily help in identifying new potential customers andgrowing exports to USA. The products worth USD 1.3 Million (Rs. 815.26 Lacs) were exported to theSubsidiary during the year. The Subsidiary has achieved turnover of USD 1.2 Million (Rs. 716.51 Lacs) andearned profit after tax of USD 18,351 (Rs. 11.03 Lacs) during its first year of operation.

DEPOSITSYour Company has not invited or accepted any fixed deposits from the public and, as such, no amount ofprincipal or interest was outstanding on the date of the Balance Sheet.

PARTICULARS OF EMPLOYEESIn terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies(Particulars of Employees) Rules, 1975, as amended, the names and other particulars of employees arerequired to be set out in the annexure to the Directors’ Report. However, as per the provisions of Section219(1)(b)(iv) of the said Act, the Annual Report excludes the aforesaid information. Any Member interestedin obtaining such particulars may write to the Company Secretary.


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PRADEEP METALS LIMITEDHUMAN RESOURCE DEVELOPMENTThe Company believes that human resources are a valuable asset. The Company continuously conductstraining and development programs for the benefit of the employees. The process for updating technicalskills of employees and developing good work culture on the shop floor is ongoing regularly.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH & DEVELOPMENT AND FOREIGNEXCHANGE EARNINGS AND OUTGOThe particulars prescribed under Section 217(1)(e) of the Companies Act, 1956, read with the Companies(Disclosure of Particulars in Report of Board of Directors) Rules, 1988, are set out in the Annexure A andform part of this Report.

CORPORATE GOVERNANCEIn compliance with the recommendations of the Securities Exchange Board of India on CorporateGovernance Report and the listing agreement of the Stock Exchange, a separate report on CorporateGovernance is included in this Annual Report.

DIRECTORS- In accordance with the provisions of Companies Act, 2013 and the Articles of Association of the Company,

Mr. Omprakash Agarwal retires by rotation at ensuing AGM and, being eligible, has offered himself forre-appointment.

- On recommendation of Nomination & Remuneration Committee, Board has approved re-appointmentof Mr. Pradeep Goyal as Chairman and Managing Director of the Company for term of 3 years with effectfrom 17th December, 2014, subject to approval of Members.

- On recommendation of Nomination & Remuneration Committee, Board has approved appointment ofMr. Raj Kumar Mittal, Mr. Suresh G. Vaidya, Mr. Rajeev D. Mehrotra and Mr. Jaidev R. Shroff asNon-Executive Independent Directors for the term of 5 (Five) consecutive years for a term upto the conclusionof 36th Anuual General Meeting of the Company in the calender year 2019, subject to approval of Members.

The Board recommends the appointment/re-appointment of the above named Directors.

DIRECTORS’ RESPONSIBILITY STATEMENTPursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, the Board of Directorsconfirm:a. THAT in the preparation of the Annual Accounts for the financial year ended 31st March, 2014, the applicable

accounting standards have been followed along with proper explanation relating to material departures;b. THAT the Directors have selected such accounting policies and applied them consistently and made

judgments and estimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as on 31st March, 2014 and of the profit or loss of the Company for the yearended on that date;

c. THAT the Directors have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; and

d. THAT the Directors have prepared the Annual Accounts on a going concern basis.

AUDITORS’ REPORTThe observations made in the Auditors’ Report are to be read with the Notes to Accounts, which areself-explanatory and no further comments are necessary.

AUDITORSM/s. S. R. Rege & Co., Chartered Accountants, (Firm Registration No. 108813W), retire at the forthcomingAnnual General Meeting and have confirmed their eligibility and willingness to accept office if re-appointed.

4

PRADEEP METALS LIMITEDCOST AUDITORSThe Board of Directors has appointed M/s. J.J. Paleja & Co., Cost Accountants (Registration No. 100656)for conducting the audit of the cost accounting records for the production of the Company as mandated bythe Central Government.

ACKNOWLEDGEMENTYour Directors wish to express their gratitude for the assistance and co-operation received from UnionBank of India, Maharashtra State Electricity Board, Maharashtra Industrial Development Corporation, NaviMumbai Municipal Corporation and other Government and Semi-Government authorities, Corporationsand Institutions.Your Directors also thank all the customers, suppliers, shareholders and investors for reposing continuedconfidence in the Company.Your Directors also wish to place on record their deep sense of appreciation for the devoted services of all theemployees of the Company and their unstinted efforts for the progress of the Company.

By Order of the Board of Directors

Navi Mumbai, PRADEEP GOYAL3rd July, 2014 CHAIRMAN AND MANAGING DIRECTOR

REGISTERED OFFICE:Pradeep Metals Ltd.R – 205, MIDC, RabaleNavi Mumbai – 400 701CIN : L99999MH1982PLC026191


5

PRADEEP METALS LIMITEDANNEXURE A

Information pursuant to Section 217 (1) (e) of the Companies Act, 1956

1. CONSERVATION OF ENERGYThe Company continuously makes efforts to conserve energy. Constant monitoring of compressed airleakage is introduced on weekly basis. Electrical system is upgraded to achieve unity power factor, resultingin significant discount from MSEB. High energy consuming machines are preferably operated in nightshifts, when power tariff is low. The company has completely switched over to use of gas in place ofliquid fuels resulting in lower costs and lower pollution.

The Company has installed a new recuperator on a furnace which has further reduced the fuel consumptionby almost 20%.

2. TOTAL ENERGY CONSUMPTION & ENERGY CONSUMPTION PER UNIT OF PRODUCTIONA. Power & Fuel Consumption : 31/03/2014 31/03/2013

1. Electricity *a. Purchased (Unit Nos.) 4,514,970 5,473,590

Total amount (Rs.) 32,060,627 39,050,030Average rate (Rs./unit) 7.10 7.13

b. Own generation N.A. N.A.2. Furnace Oil

Quantity (Ltrs.) - -Total amount (Rs.) - -Average rate (Rs./Ltr.) - -

3. Light Diesel Oil (LDO)Quantity (Ltrs.) - -Total amount (Rs.) - -Average rate (Rs./Ltr.)

4. Piped Natural GasQuantity (Cubic Meter) 864,889 980,030Total amount (Rs.) 35,830,231 33,336,943Average rate (Rs./Cubic Meter) 41.43 34.02

B. Consumption per unit of Production :Production (MT-forged weight) 4186 4639Heat Treatment (MT-forged weight) 4300 4585Electricity (Units/MT) 1079 1180Cost/MT (Rs./MT) 7659 8418Furnace Oil/LDO/ Ltrs./MTMethyl Ester/RE-100Piped Natural Gas - 211Fuel Energy Cost** (Rs./MT) 8560 7186(including heat treatment)

* Total electricity cost decreased by about 17.90% compared to previous year. The cost of electricity(per unit) decreased by only 0.4% and the production decreased by 9.80%. Moreover, significantlyhigher quantityof parts were sold in machined condition. Hence, there is an overall reduction in specificpower consumption.

** Gas consumption includes heat treatment of forgings. The cost of gas increased by 21.8% duringthe year. Production quantity decreased by 9.8% and heat treatment quantity decreased by 6.2%. Thecost of energy per forged ton increased by 19%. Cubic metres of gas per ton of steel processedreduced by 3.8% (from 106m3 to 102 m3/ton).

6


C. Technology Absorption :1. Research & Development :

The Company is constantly improving the design of dies and trim tools in a focused manner to optimizeraw material consumption and achieve better quality and yield.

2. Benefits derived:Improvement in productivity, quality, yield and energy saving.

3. Future Plans:The Company is using innovative methods for reducing use of consumables which will result infurther savings. All furnaces in the company have been converted to the new recuperator systemduring the financial year 2013-14. The 6.25 ton hammer has also been converted to hydraulic operationto conserve electricity, based on earlier experience of conversion of 1 ton hammer.

Expenditure on Research & Development :Since Research & Development is carried out in-house, as a part of the ongoing manufacturingoperations, the expenditure is not separately accounted for and the same is debited to the respectiveaccounts.

4. Technology Absorption, Adoption and Innovation :Continuous improvements in the manufacturing process and focus on development of intricateprecision forgings for export form part of the ongoing operations of the Company. The Companycontinues to adopt Lean Manufacturing methods to further improve manufacturing practices. Currentlythe Company has taken up the process of moving some machines as a part of layout improvementwhich will reduce material movement in the company by almost 50%.

D. Foreign Exchange Earnings and Outgo:Total foreign exchange used and earned:Used: Rs. 1,48,40,182/-Earned: Rs. 73,27,86,410/-


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MANAGEMENT DISCUSSION & ANALYSISCompany Background:Pradeep Metals Limited (Company) is engaged in the manufacture of intricate closed die stainless, alloyand carbon steel forgings as finished and semi-finished machined components.The Company uses state-of-the-art machinery with sophisticated tool-room equipment to manufacture itsforgings. The Company also employs hi-tech design and analysis software to create dies and tooling thatplay a key role in the production of forgings. The manufacturing plant is integrated with complete facilitiesfor testing, cutting, die making, forging, heat-treatment and finishing. Recently, the Company improved itsmachining capacity and capabilities by adding new Computer Numerical Control (CNC) machines andVertical Machining Centers (VMC) to address the increasing demand for finished machined components.

The Company uses an in-house laboratory, process control, continuous improvement principles, and anonline integrated system to closely monitor the quality of its operations. These quality assurance systemshave been approved by Global Original Equipment Manufacturers (OEMs) including nuclear grade andhigh-pressure equipment OEMs in Germany, USA and Canada. The Company is certified to ISO 9001:2008for Eighteen consecutive years and TÜV Pressure Equipment Directive 97/23/EC (PED) standards.

The Company currently serves 5 major industry verticals: instrumentation, oil & gas, petro-chemical,automotive and general engineering. Customers are located in India, USA, UK, Singapore, Sweden,Denmark, France, Germany, Mexico, Argentina and Turkey.

PerformanceThe Income (Net) during the year 2013-14 has fallen by 9.1% as compared to the previous year. It is attributedto a decrease in the US commodity flange market and the weak domestic business environment. However,it is considered as a temporary phase and the Management is already siezed of the matter to expandturnover of the Company as well as its profitability steadily, barring unforeseen circumstances.Profit before Tax has increased by 16.9%, in spite of 10.6% rise in employees’ cost, because of the followingefforts: (a) Improvement in yield resulting into lower steel consumption (b) Improvements in tooling design(c) Reduction in energy consumption, and (d) Various cost improvement projects within the plant. TheCompany has continued to make strides in reducing costs in an environment prone to high inflation. Forexample, by undertaking major overhauling of key equipments at the expense of production and addition ofenergy saving equipments, the Company has reduced the energy consumption.

Export sales continue to be the dominant source of revenue, accounting for about 70% of Operating Revenuesand the Company’s focus to service the niche OEM market has continued to provide long term success. TheManagement has decided to develop and concentrate on higher value products for exports as well asdomestic markets and steadily weed out the products yielding low contribution. The following charts providea broad breakdown of the percentage sales in various industries compared to the previous year.

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PRADEEP METALS LIMITEDThe Company has created a wholly-owned subsidiary in USA in order to cater to Just-In-Time deliveryrequirements of discreet customers and to better service its overall customer base.Regional performance of the Company’s sales is denoted in the chart below.:-

Business Environment:

The domestic macroeconomic environment in Financial Year 2013-14 was weak due to subdued capitalinvestment outlook and political uncertainty. The Rupee was extremely volatile during the year, the High atRs. 69.2 and the Low at Rs. 53.6 against the US Dollar. The total domestic economic growth was recordedbelow 5%. Despite the loss of momentum of the economy, inflation continued to remain elevated and theoverall Fabricated Metal manufacturing sector was down by almost 7%.

The global economic growth is seem to be improving. The US is starting to bounce back from the financialcrisis and the Oil & Gas industry has seen renewed interest due to investments in shale gas extraction.European countries, such as Germany and France continue to outperform in their respective regions.

Future Outlook:

The domestic environment shows a positive promise with the new government in place. The Companyexpects to see a rise in capital investments within India and, as a result, an increase in domestic sales.

Export sales will continue to rise as many projects in the pipeline last year will convert to sales in this year.The Company continues its search for new customers and expects a positive growth in turnover for theupcoming years.

The Company continues to work on changes to the existing plant layout to improve the productivity ofworkers, better utilization of machinery and normalise flow of inventory. It will continue to invest on upgradingmachinery, overhauling equipment, replacing old machines with newer technologies, and improving theoverall working conditions of the plant.

The Company is planning to increase investments in downstream activities such as CNC machining tomeet an increase in fully finished product demand.

Cautionary Statement:

Details provided hereinabove relating to various activities and future plans may be “forward-lookingstatements” within the realm of applicable laws and regulations. Actual performance may differ substantiallyor materially from those expressed or implied. The Company may need to change plans or other projectionsdue to changes in Government policies, tax laws, market conditions and other incidental factors.


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REPORT ON CORPORATE GOVERNANCECompany’s philosophy on corporate governance:Pradeep Metals Limited (PML) is committed to the highest standards of corporate governance in all itsendeavors by inculcating in all its operations and processes, the principles of transparency, integrity,professionalism and accountability. PML believes in corporate governance as a necessary culture for achievingsuperior performance and its core being transparency, accountability, equity and openness in the working ofthe management and the Board. Sound corporate governance in line with Clause 49 of the Listing Agreementand SEBI guidelines has been put in place.

Board of Directors:The Company’s policy is to maintain optimum combination of Executive and Non-Executive/ IndependentDirectors. The Board of Directors consists of 8 Directors of whom 1 is Executive, 3 are Non-ExecutiveDirectors and 4 are Independent Directors. The Chairman is an Executive Director. The composition of theBoard, category, attendance of Directors, number of other Committee memberships are given below:

Name of Category No. of Board Attendence Other Directorships Other CommitteeDirector Promoters, Executive, Meetings at last AGM held (excluding positions

Non-Executive, attended help on private & foreignIndependent 8th August, companies)

2013

Member Chairman

Pradeep Goyal* Chairman and 5 Yes 3 5 3Managing Director

Kewal K. Nohria Non-Executive Director 4 Yes 6 5 1Omprakash Non-Executive Director 2 Yes Nil Nil NilAgarwalSuresh G. Vaidya Non-Executive 4 Yes 1 1 Nil

IndependentRaj Kumar Mittal Non Executive 5 Yes 1 2 Nil

IndependentMrs. Neeru Non-Executive Director 5 Yes Nil Nil NilPradeep Goyal*Jaidev R. Shroff Non-Executive Nil No 8 Nil Nil

IndependentRajeev D. Non-Executive 2 No Nil Nil NilMehrotra Independent

*No Director is, inter se, related to any other Director on the Board, except Mr. Pradeep Goyal and Mrs. Neeru Goyal,who are related to each other as husband and wife and belong to Promoters’ Group.

Board MeetingsDuring the financial year 2013-14, five meetings of the Board were held on 6th May, 2013, 8th August, 2013,21st October, 2013, 11th December, 2013 and 25th January, 2014. The gap between any two Meetings did notexceed four months.

Code of ConductThe Board has laid down a code of conduct which is applicable to all the Board members and SeniorManagement of the Company. The information as specified in Annexure 1A to Clause 49 of the ListingAgreement, entered into with the BSE Limited, is regularly made available to the Board, whenever applicableand materially significant, for discussion and consideration.

Committees of the Board:The Board has constituted five committees namely, Audit Committee, Shareholders’/Investors’ GrievanceCommittee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee and RiskManagement Committee.


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i) Audit CommitteeThe Board has set up an Audit Committee in accordance with the requirements of Section 177 of the CompaniesAct, 2013 and the terms of reference are in conformity with the Clause 49 of the Listing Agreement revisedby SEBI vide its Circular No. CIR/CFD/POLICY CELL/2/2014 dated 17th April, 2014 entered into with theBSE Limited.

The broad terms of reference of the Audit Committee include reviewing of financial statements beforesubmission to the Board, reviewing the report of internal audit and reviewing accounting and financialpolicies, internal control procedures and related party transactions and financial reporting systems. Inaddition, the powers and role of the Audit Committee are as laid down under Clause 49 III A,B C, D & Eof the Listing Agreement as amended by SEBI vide its Circular CIR/CFD/POLICY CELL/2/2014 dated17th April, 2014 and Section 177 of the Companies Act, 2013.

The Committee met four times during the financial year on 6th May, 2013, 8th August, 2013, 21st October,2013 and 25th January, 2014.

The composition of the Committee is as follows:

Sr.No Name of Director Executive, Non-Executive, No. of MeetingsIndependent attended

1 Raj Kumar Mittal Chairman, Non-Executive, Independent 42 Suresh G. Vaidya Member, Non-Executive, Independent 33 Kewal K. Nohria Member, Non-Executive 4

All the Members of the Audit Committee possess adequate knowledge of Accounts, Audit, Finance, etc.

The Chairman and Managing Director, the Head of Accounts, Internal Auditor and the Statutory Auditors arepermanent invitees to the Meetings. The Company Secretary acted as the Secretary to the Audit Committee.

The Chairman of the Audit Committee was present at the 30th Annual General Meeting held on 8th August, 2013.

ii) Shareholders’/Investors’ Grievance CommitteePursuant to Clause 49 of the Listing Agreement, the Board has formed a Shareholders’/Investors’ GrievanceCommittee. The Committee’s constitution and terms of reference are in compliance with the provisionsof Companies Act, 2013 and Clause 49 of the Listing Agreement as amended from time to time. The Committeeoversees redress of Shareholders’/Investors’ grievances like transfer of shares, non-receipt of Annual Reportor dividends and approves the sub-division, transmission or issue of duplicate shares, etc.

The Committee overviews the steps to be taken for further value addition in the quality of service to the investors.

The Board has designated Mr. Abhinay Kapoor, Company Secretary, as the Compliance Officer.

The Committee met four times during the financial year on 6th May, 2013, 8th August, 2013, 21st October, 2013and 25th January, 2014.


Sr. No Name of Director Position No of Meetings attended

1 Omprakash Agarwal Chairman 22 Suresh G. Vaidya Member 33 Kewal K. Nohria Member 4

The details of complaints received, cleared and pending during the financial year 2013-14 are given below:

Nature of Complaints Received Cleared Pending

Non receipt of Dividend/Interest/redemption of Warrant 7 7 0Non Receipt of Annual Report 1 1 0

Total 8 8 0

iii) Nomination & Remuneration CommitteeThe Board has constituted Nomination & Remuneration Committee in accordance with provisions of



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Companies Act, 2013 and Clause 49 of the Listing Agreement as amended from time to time. The Boardhas restated the name of Remuneration Committee as ‘Nomination & Remuneration Committee’ inconfirmation of the provisions of Clause 49 of the Listing Agreement as amended by SEBI vide its CircularCIR/CFD/POLICY CELL/2/2014 dated 17th April, 2014 and Companies Act, 2013.

The Remuneration Committee has been constituted to review and recommend the remuneration packageto be paid to the Directors, their relatives and key managerial persons, evaluation of Non-Executive/Independent Directors, etc. In addition, the powers and role of the Nomination & RemunerationCommittee are laid down under Clause 49 IV A,B & C of the Listing Agreement as amended by SEBIvide its Circular CIR/CFD/POLICY CELL/2/2014 dated 17th April, 2014 and Section 177 of the CompaniesAct, 2013.

The Committee met once during the financial year on 11th December, 2013.


Sr. No Name of Director Position No of Meetings attended1 Rajeev D. Mehrotra* Chairman 12 Suresh G. Vaidya Member 13 Kewal K. Nohria* Member 14 Raj Kumar Mittal** Member Nil

*Appointed as a Member w.e.f. 6th May, 2013.

**Appointed as a Member w.e.f. 3rd July 2014.

iv) Corporate Social Responsibility Committee

The Board has constituted a Corporate Social Responsibility Committee (CSR Committee) of its membersin accordance with provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement as amendedfrom time to time, on 10th May, 2014. The CSR Committee will be primarily responsible for formulatingand monitoring the implementation of the framework of CSR policy and to look into substantiallymatters related to CSR activities of the Company.

The composition of the CSR Committee is as follows:-

Sr. No Name of Director Position

1 Mrs. Neeru Goyal Chairman2 Raj Kumar Mittal Member3 Rajeev D. Mehrotra Member

v) Risk Management CommitteeThe Board has constituted a Risk Management Committee of its members in accordance with provisionsof Companies Act, 2013 and Clause 49 of the Listing Agreement as amended from time to time, on 10th May,2014. The Risk Management Committee will be primarily responsible to conduct the risk assessment andlay down the procedures for risk minimization. The composition of the Risk Management Committee isas follows:-

Sr. No Name of Director Position1 Pradeep Goyal Chairman2 Kewal K. Nohria Member3 Raj Kumar Mittal Member4 Rajeev D. Mehrotra Member

Details of SubsidiaryCompany has a wholly owned subsidiary in United States of America called Pradeep Metals Limited,having registered office at 350, 5th Avenue, Suite 5013, New York, New York-10118, USA.


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Directors’ RemunerationDuring the financial year ended 31st March, 2014, the Company paid remuneration to its Directors as perthe details given below:Name of the Director Remuneration (Rs) Remarks

Pradeep GoyalChairman and Managing Director 95,28,580/- Salary & Perquisites

The Non-Executive Directors are paid sitting fees of Rs. 5,000/- and Rs. 2,500/- for each meeting of theBoard and its Committees attended by them respectively.

The sitting fees have been paid to the Directors as follows:

Name of the Director Sitting Fees ( Rs.)Omprakash Agarwal 15,000Suresh G. Vaidya 35,000Raj Kumar Mittal 35,000Kewal K. Nohria 45,000Mrs. Neeru Pradeep Goyal 25,000Jaidev R. Shroff NilRajeev D. Mehrotra 12,500

Disclosures:The particulars of transactions between the Company and related parties, as per the Accounting Standardsare mentioned separately in Notes to Accounts - No. 1.2.7 - forming part of the Annual Accounts.Constituents of Promoters’ Group within the meaning of group under SEBI (Substantial Acquisition ofShares and Take over) Regulation, 1997 include:1 S.V. Shah Construction Services Pvt. Ltd.2 Rabale Engineering (India) Pvt. Ltd.3 Flashnet Info Solutions (India) Ltd.4 Dhanlabh Engineering Works Pvt. Ltd.5 Anchor Engineering Corporation6 Shubh Industrial Park Pvt. Ltd.7 Shubh Buildtech LLP8 Mr. Pradeep Goyal9 Mrs. Neeru Pradeep Goyal10 Mrs. Seema Goyal

Apart from the above, none of the Non-executive Directors had any pecuniary relationship or transactionswith the Company

General Body Meetings:

a. Annual General Meeting:

The particulars of the last three Annual General Meetings (AGM) of the Company are as under:-

Year Date Time Venue

2012-2013 8th August, 2013 12:30 p.m. Registered office of the Company2011-2012 6th September, 2012 12:30 p.m. —As above—2010-2011 4th July, 2011 12:30 p.m. — As above—

b. Extra Ordinary General Meeting:-

An Extra Ordinary General Meeting was held on 25th January, 2014 at 2.30 p.m. at the Registered Officeof the Company for considering the following matters:a) Re-appointment of Mr. Pradeep Goyal as Chairman and Managing Director for a tenure of one

year with effect from 17th December, 2013.



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c. Special Resolution passed through Postal Ballot:No Special Resolution was put through Postal Ballot during financial year 2013-14. None of the businessesproposed to be transacted in the ensuing Annual General Meeting require passing a special resolutionthrough postal ballot.

Means of Communication:The Company publishes its quarterly and yearly unaudited financial results in Asian Age (in English) andDainik Sagar (in Marathi). The Company also sends the financial results to the BSE Limited immediatelyafter its approval by the Board. The Company does not send half yearly report to the shareholders. Nopresentation was made to any institutional investors or analysts during the year under review.

The Company also publishes its yearly audited financial results on its public website http://www.pradeepmetals.com/investor_relation.html

Internal Control System and Adequacy:The Company has adequate internal control procedures commensurate with its size and nature of thebusiness. The internal control system provides for well-documented policies, guidelines, authorization andprocedures. The prime objective is to test the adequacy and effectiveness of all internal controls and tosuggest improvements therein.

Human Resources:The Company focuses its efforts on continuous training and development of its personnel and regularlyreviews policies and processes to provide a healthy work environment.

The industrial relations were cordial during the year. The Company continues to maintain its thrust on humanresources development.

General Shareholders Information:a. Disclosures regarding Appointment/Re-appointment of Directors

- Mr. Omprakash Agarwal retires by rotation at ensuing Annual General Meeting and, being eligible, hasoffered himself for re-appointment.

- On recommendation of Nomination & Remuneration Committee, Board has approved re-appointmentof Mr. Pradeep Goyal as Chairman and Managing Director of the Company for term of 3 years witheffect from 17th December, 2014, subject to approval of Members.

- On recommendation of Nomination & Remuneration Committee, Board has approved appointment ofMr. Raj Kumar Mittal, Mr. Suresh G. Vaidya, Mr. Rajeev D. Mehrotra and Mr. Jaidev R. Shroff as Non-ExecutiveIndependent Directors for the term of 5 (Five) consecutive years for a term upto the conclusion of 36thAnuual General Meeting of the Company in the calender year 2019, subject to approval of Members.

b. Chief Executive Officer (CEO) and Chief Financial Officer (CFO) CertificationAs required by Clause 49V of the Listing Agreement, the CEO and CFO certification of the Financial Statements,the Cash Flow Statement and the Internal Control Systems for financial reporting has been obtainedfrom Mr. Pradeep Goyal (Chairman and Managing Director/CEO) and Mr. Dilip Dalvi (Manager – Accounts/CFO).

c. The Annual General Meeting is scheduled to be held as under:Date 4th September, 2014Time 12.30 p.m.Venue Monarch Banquets

Plot No. 110/111, MIDCThane Belapur RoadNear Rabale Railway Station, RabaleNavi Mumbai 400701

d. Book Closure :28th August, 2014 to 3rd September, 2014 (both days inclusive).

e. Dividend Payment Date: On or before 3rd October, 2014.


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f. Financial Calendar :Financial reporting for Tentative dateUnaudited Financial Results for the quarter ending 30th June, 2014 On or before 15th August, 2014Unaudited Financial Results for the half year ending 30th September, 2014 On or before 15th November, 2014Unaudited Financial Results for the quarter ending 31st December, 2014 On or before 15th February, 2015Audited Financial Results for the year ending 31st March, 2015 On or before 30th May, 2015Listing on Stock Exchanges:The Equity Shares of the Company are listed on BSE Limited.

The Company has paid the listing fees for the current year to the aforesaid Stock Exchange within thestipulated time.

h. Stock Code / Symbol:BSE Limited. 513532, PRADPMEInternational Securities Identification Number (ISIN) INE770A01010Corporate Identity Number (CIN) –allotted by the Ministry of Corporate Affairs L99999MH1982PLC026191

i. Custodial Fees to Depositories:The annual custodial fees for the financial year 2014-15 have been paid to National Securities Depository Ltd.(NSDL) and Central Depository Services (India) Ltd. (CDSL).

j. Market Price Data:The high and low prices of the Company’s Shares at BSE Limited and performance in relation to BSESENSEX are as under:

Month BSE Limited BSE Sensex

High (Rs.) Low (Rs.) High LowApril 2013 20.90 16.40 19622.68 18144.22May 2013 19.70 15.50 20443.62 19451.26June 2013 16.80 14.10 19860.19 18467.16July 2013 17.45 13.75 20351.06 19126.82August 2013 13.65 11.60 19569.20 17448.71September 2013 14.94 12.29 20739.69 18166.17October 2013 17.00 13.65 21205.44 19264.72November 2013 16.15 14.35 21321.53 20137.67December 2013 18.75 14.75 21483.74 20568.70January 2014 22.40 16.60 21409.66 20343.78February 2014 19.50 16.10 21140.51 19963.12March 2014 21.95 18.05 22467.21 20920.98

k. Address for correspondence :Shareholders can correspond to Secretarial Department

Pradeep Metals Ltd.R-205, MIDC, Rabale,Navi Mumbai - 400 701Tel: +91-22-27691026Fax: +91-22-27691123e-mail: [email protected] Intime India Pvt. Ltd.(R&T Agent)C-13, Pannalal Silk Mills Compound,LBS Marg, Bhandup (West), Mumbai – 400 078.Tel: +91-22-25946970Fax: +91-22-25946969e-mail: [email protected]



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Shareholders holding shares in electronic mode should address their correspondence to their respectiveDepository Participants.

l. Compliance Officer :Mr. Abhinay KapoorCompany SecretaryPradeep Metals Ltd.R-205, MIDC, Rabale, Navi Mumbai – 400 701Tel: +91-22-27691026 Fax: +91-22-27691123E-mail: [email protected]

m. Share Transfer System:Documents for transfer of shares in physical form can be lodged with Link Intime (India) Pvt. Ltd., RTA ofthe Company, at the above mentioned address. The transfers are normally processed within 10 – 15 daysfrom the date of receipt, if the documents are complete in all respects.

All the transfers received are processed and approved by the Share Transfer Committee, which normallymeets twice in a month.

n. Dematerialisation of Shares :Trading in Equity Shares of the Company is permitted only in dematerialized form with effect from29th January, 2001 as per notification issued by the Securities & Exchange Board of India. As on 31st March,2014, 1,57,01,270 Equity Shares (i.e. 90.91%) out of 1,72,70,000 Equity Shares are held in dematerializedform with NSDL and CDSL.Transfer-cum-demat facility is available to all Shareholders of the Company, who request for such facility.

Distribution Schedule and Shareholding Pattern as on 31 st March, 2014:

DISTRIBUTION SCHEDULE

Category No. of Shares No. of Shareholders No. of Shares

1 – 500 5531 841024501 – 1000 413 3642291001 – 2000 183 2742912001 – 3000 70 1828713001 – 4000 34 1216284001 – 5000 32 1534935001 - 10000 48 36718710001 and above 45 14965277

TOTAL 6356 17270000

SHAREHOLDING PATTERN AS ON 31 ST MARCH, 2014

Category of Shareholders No. of Shares %Promoters 11629441 67.34Mutual Funds and UTI 9000 0.05Banks, Financial Institutions,Insurance Companies - -Foreign Institutional Investors 4100 0.02Bodies Corporate 162501 0.94Indian Public 3310826 19.17Non Resident Individuals /Overseas Corporate Bodies 1394341 8.07Any Other – Clearing Member,Non-Executive/IndependentDirectors and Trust 759791 4.41TOTAL 17270000 100


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AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCEToThe Shareholders of Pradeep Metals Limited

We have examined the compliance of conditions of Corporate Governance by Pradeep Metals Limited, for the yearended 31st March 2014, as stipulated in Clause 49 of the Listing Agreement of the said Company with stock exchanges.The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination hasbeen limited to a review of the procedures and implementations thereof, adopted by the Company for ensuring compliancewith the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financialstatements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the representationsmade by the Directors and the Management, we certify that the Company has complied with the conditions of CorporateGovernance as stipulated in Clause 49 of the above mentioned Listing Agreement.

As required by the Guidance Note issued by the Institute of Chartered Accountants of India, we have to state that basedon the report given by the Registrars of the Company to the Investors’ Grievance Committee, as on 31st March, 2014,there were no investor grievance matters against the Company remaining unattended/pending for more than 15 days.We further state that such compliance is neither an assurance as to the further viability of the Company nor of theefficiency or effectiveness with which the management has conducted the affairs of the Company.

FOR S.R.REGE & CO.Chartered Accountants

Mumbai, S. M. PATKI3rd July, 2014 PARTNER

rdMembership No. 037690

CEO / CFO CERTIFICATION

We, Pradeep Goyal, Chairman and Managing Director and Dilip Dalvi, Manager (Accounts), responsible for the financefunction, certify that:

a) We have reviewed the financial statements and cash flow statement for the year ended 31st March, 2014 and tothe best our knowledge and belief:

i. These statements do not contain any materially untrue statement or omit any material fact or contain statementsthat might be misleading;

ii. These statements together present a true and fair view of the Company’s affairs and are in compliance withexisting accounting standards, applicable laws and regulations.

b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the yearwhich are fraudulent, illegal or in violation of the Company’s Code of Conduct.

c) We accept responsibility for establishing and maintaining internal controls and that we have evaluated the effectivenessof the internal control systems of the Company and we have disclosed to the auditors and the Audit Committee,deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps we havetaken or propose to take to rectify these deficiencies.

d) We have indicated to the auditors and the Audit Committee.

i. significant changes in internal control during the year;ii. significant changes in accounting policies during the year; and that the same have been disclosed in the notes

to the financial statements; and

iii. instances of significant fraud of which they have become aware and the involvement therein, if any, of themanagement or an employee having a significant role in the Company’s internal control system.

Navi Mumbai, Dilip Dalvi Pradeep Goyal10th May, 2014 Manager – Accounts/CFO Chairman and Managing Director/CEO



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AUDITORS’ REPORTToThe Members of Pradeep Metals Limited,

Report on the Financial Statements1. We have audited the accompanying Financial Statements of the Pradeep Metals Limited, which comprise

the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and the Cash Flow statementfor the year then ended and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements2. Management is responsible for the preparation of these Financial Statements that give a true and fair

view of the financial position, financial performance and cash flow of the Company in accordance withthe Accounting Standards notified under the Companies Act, 1956 (“the Act”) read with General Circular15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of theCompanies Act, 2013. This responsibility includes the design, implementation and maintenance of internalcontrol relevant to the preparation of the Financial Statements that are free from material misstatement,whether due to fraud or error.

Auditor’s Responsibility3. Our responsibility is to express an opinion on these Financial Statements based on our audit. We conducted

our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountantsof India. Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the Financial Statements are free from materialmisstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the Financial Statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the Financial Statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal control relevant to the Company’spreparation and fair presentation of the Financial Statements in order to design audit procedures thatare appropriate in the circumstances but not for the purpose of expressing an opinion on the effectivenessof the company’s internal control. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by management, as well asevaluating the overall presentation of the Financial Statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.

Opinion6. In our opinion and to the best of our information and according to the explanations given to us, the said

accounts together with the notes thereon give the information required by the Act, in the manner sorequired for and give a true and fair view in conformity with the accounting principles generally acceptedin India:(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

(ii) In the case of the Statement of Profit and Loss of the profit for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of cash flows for the year ended on that date.

Report on Other Legal and Regulatory Matters7. As required by the Companies (Auditor’s Report) Order, 2003 (“The Order”) issued by the Central Government

of India in terms of sub-section (4A) of Section 227 of the Act, we give in the annexure a statement on thematters specified in clause 4 & 5 of the order.

8. As required by Section 227(3) of Companies Act, we report that:


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(a) We have obtained all the information and explanations which, to the best of our knowledge and belief,were necessary for the purpose of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far asappears from our examination of those books.

(c) The Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement dealt with by this report,are in agreement with the books of account and the returns.

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement complywith the Accounting Standards notified under the Companies Act, 1956 (“the Act”) read with GeneralCircular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of section133 of the Companies Act, 2013.

(e) On the basis of the written representation received from the directors and taken on record by the Boardof Directors, none of the directors is disqualified as on 31st March, 2014 from being appointed as adirector in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956.

FOR S. R. REGE & CO.CHARTERED ACCOUNTANTS

(Reg. No. 108813W)

S. M. PATKIMUMBAI PARTNER10th May,2014. Membership No. 037690



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Re: Pradeep Metals LimitedAnnexure referred to in paragraph of our report of even date,Fixed Assets1. a The Company has maintained proper records showing full particulars including quantitative details and

situation of fixed assets.b All assets have not been physically verified by the management during the period under the audit but

there is a regular program of verification which, in our opinion, is reasonable having regard to the sizeof the Company and the nature of its assets. No material discrepancies were noticed on such verification.

Inventories2 a The inventory has been physically verified during the period under the audit by the management. In

our opinion, the frequency of verification is reasonable.b The procedures of physical verification of inventories followed by the management are reasonable

and adequate in relation to the size of the Company and the nature of its business.c The Company is maintaining proper records of inventory. The discrepancies noticed on verification

between the physical stocks and the book records were not material having regard to the size of theoperations of the Company.

Loans granted or taken3 The Company has neither granted nor taken any loans, secured or unsecured to companies, firms, or

other parties covered in the register maintained under section 301 of the Companies Act, 1956 Consequently,clauses (iii) (a) to (iii)(g) of the Companies (Auditor’s Report) Order, 2003 as amended by Companies(Auditor’s Report) (Amendment) Order , 2004 are not applicable.

Internal Control4 In our opinion and according to the information and explanations given to us, there are adequate internal

control procedures commensurate with the size of the Company and nature of its business with regardto purchases of inventory, fixed assets and with regard to the sale of goods. During the course of ouraudit we have not observed any continuing failure to correct major weaknesses in internal control.

Contracts and Agreements5 a To the best of our knowledge and belief and according to the information and explanations given to us,

the transactions that needed to be entered into the register maintained under section 301 of the CompaniesAct, 1956, have been so entered.

b In our opinion and according to the information and explanations given to us, the transactions madein pursuance of the contracts or agreements entered in the register maintained under section 301of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party duringthe period under the audit have been made at prices which are reasonable having regard of the prevailingmarket prices at the relevant time, except that reasonableness could not be ascertained where comparablequotations are not available having regard to the specialized nature of some of the transactions ofthe Company.

Public deposits6 The Company has not accepted any deposits from the public.Internal Audit7 In our opinion, the Company has an internal audit system commensurate with the size and the nature

of its business.Cost records8 According to the information and explanations given to us, the Company is in the process of making arrangements

for maintenance of Cost records under Companies (Cost Audit report) Rules, 2011 as prescribed undersection 209(1) (d) of the Companies Act, 1956.

Statutory dues9 a The Company has been generally regular in depositing with appropriate authorities undisputed statutory

dues including provident fund, employees’ state insurance, income-tax, sales-tax, wealth-tax, custom-duty,excise-duty, cess and other material statutory dues applicable to it.

b According to the information and explanations given to us, no undisputed amounts payable in respectof income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears , as at March,2014 for a period of more than six months from the date they became payable.

c According to the information and explanations given to us, there are no dues of sale tax, income tax,


21

customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.Accumulated losses10 a Since the Company has no accumulated losses, the clause 4(x) of the Companies (Auditor’s Report)

Order, 2003 as amended by Companies (Auditor’s Report) (Amendment) Order, 2004 is not applicable.b The Company has not incurred any cash losses during the period covered by our audit and the

immediately preceding financial year.Default in repayments of dues11 According to the records of the Company examined by us and the information and explanations given to us,

during the period covered by our audit, the Company has not defaulted in repayment of dues to a financialinstitution, bank or debenture holders.

Loans and dealing in shares etc .12 To the best of our knowledge and belief and according to the information and explanations given to us,

the Company has not granted loans and advances on the basis of security by way of pledge of shares,debentures and other securities.

13 In our opinion and according to the information and explanations given to us, the Company is not a chitfund or a nidhi or mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies(Auditor’s Report) Order, 2003 as amended by Companies (Auditor’s Report) (Amendment) Order, 2004are not applicable to the Company.

14 To the best of our knowledge and belief and according to the information and explanations given to us,the Company is not dealing in or trading in shares, securities, debentures or any other securities. Accordingly,the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 as amended by Companies(Auditor’s Report) (Amendment) Order, 2004 are not applicable to the Company.

15 To the best of our knowledge and belief and according to the information and explanations given to us,the Company has not given any guarantee for loans taken by others from banks or financial institutions.

Borrowings, funds raised and their utilization16 In our opinion and to the best of our knowledge and belief and according to the information and explanations

given to us, the term loans availed by the Company have, prima facie, been applied for the purpose forwhich they were raised.

17 According to the information and explanations given to us and on an overall examination of the balance sheetof the Company, we report that no funds raised on short–term basis have been used for long-term investment.No long-term funds have been used to finance short-term assets except permanent working capital.

18 According to the Books and Records of the Company examined by us and the information and explanationsgiven to us, during the period covered by our audit report, the Company has not made any preferentialallotment to any party or Company covered in the Register maintained under Section 301 of the Act. Hence,the provision of clause 4(xviii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to Company.

19 To the best of our knowledge and belief and according to the information and explanations given to us,the Company has not made any debenture issue during the period under audit. Therefore, provisionsof clause 4(xix) of the Companies (Auditor’s Report) Order, 2003 as amended by Companies (Auditor’sReport) (Amendment) Order, 2004 are not applicable to the Company

20 To the best of our knowledge and belief and according to the information and explanations given to us,during the period under audit the Company has not raised any money by way of public issue.

Frauds21 During the course of our examination of the books and records of the Company carried out in accordance

with the generally accepted auditing practices in India, we have neither come across any instances offraud by the Company, noticed or reported during the period under audit, nor have we been informed ofany such case by the management.


(Reg. No. 108813W)

S. M. PATKIMUMBAI PARTNER10th May,2014 Membership No. 037690


PRADEEP METALS LIMITEDCONSOLIDATED AUDITORS’ REPORT

ToThe Members of Pradeep Metals Ltd.,

Report on the Consolidated Financial Statements1. We have audited the accompanying Consolidated Financial Statements of the Pradeep Metals Limited,

which comprise the Consolidated Balance Sheet as at 31st March, 2014, the Consolidated Statement ofProfit and Loss and the Consolidated Cash Flow statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements2. Management is responsible for the preparation of these Consolidated Financial Statements that give a

true and fair view of the financial position, financial performance and cash flow of the Company in accordancewith the Accounting Standards notified under the Companies Act, 1956 (“the Act”) read with General Circular15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of theCompanies Act, 2013. This responsibility includes the design, implementation and maintenance of internalcontrol relevant to the preparation of the financial statements that are free from material misstatement,whether due to fraud or error.

Auditor’s Responsibility3. Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit.

We conducted our audit in accordance with the Standards on Auditing issued by the Institute of CharteredAccountants of India. Those Standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the Consolidated Financial Statements. The procedures selected depend on the auditor’s judgment,including the assessment of the risks of material misstatement of the Consolidated Financial Statements,whether due to fraud or error. In making those risk assessments, the auditor considers internal controlrelevant to the Company’s preparation and fair presentation of the Consolidated Financial Statementsin order to design audit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on the effectiveness of the company’s internal control. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of the accountingestimates made by management, as well as evaluating the overall presentation of the ConsolidatedFinancial Statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.

OpinionIn our opinion and to the best of our information and according to the explanations given to us, theConsolidated Financial Statements give the information required by the Act in the manner so required andgive a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Consolidated Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

b) In the case of the Consolidated Statement of Profit and Loss, of the profit of the Company for the year thenended; and

c) In the case of the Consolidated Cash Flow Statement, of the cash flows of the Company for the year endedon that date.

22


The details of assets, revenue and net cash flow in respect of this subsidiary to the extent to which theyare reflected in consolidated financial statements are given below:

(Rs. In Lacs) (Rs. In Lacs) (Rs. In Lacs)Total Assets Total Revenue Net Cash flow

1. Foreign Subsidiary 560.99 716.51 33.13


(Reg. No. 108813W)

S. M. PATKIMUMBAI PARTNER10th May,2014. Membership No. 037690

23


PRADEEP METALS LIMITEDBALANCE SHEET AS AT 31st MARCH , 2014

(Rs. in Lacs) (Rs. in Lacs) As at As at

Note No. 31st March, 2014 31st March, 2013 (Audited) (Audited)

I EQUITY AND LIABILITIES1) Shareholders’ Fundsa) Share Capital 2.1 1,726.26 1,726.26b) Reserve and Surplus 2.2 1,650.57 1,288.66

3,376.83 3,014.922) Share Application Money Pending Allotment - -3) Non-Current Liabilities

a) Long-Term Borrowings 2.3 123.22 137.61b) Deferred Tax Liabilities (Net) 2.4 267.69 279.31c) Other Long Term Liabilities 2.5 0.98 6.62d) Long-Term Provisions 2.6 50.14 11.68

442.03 435.224) Current Liabilities

a) Short-Term Borrowings 2.7 4,231.92 3,974.08b) Trade Payables 922.08 1,216.38c) Other Current Liabilities 2.8 380.17 480.98d) Short-Term Provisions 2.9 436.49 421.47

5,970.66 6,092.91TOTAL 9,789.51 9,543.05

II ASSETS1) Non-Current Assets

a) Fixed Assets 2.10i) Tangible Assets 2,038.53 1,938.86ii) Capital Work-in-Progress 179.20 38.22

2,217.73 1,977.08b) Non-Current Investments 2.11 3.72 1.00c) Long-Term Loans and Advances 2.12 385.04 475.68d) Other Non-Current Assets 2.13 13.60 15.51

2,620.09 2,469.272) Current Assets

a) Inventories 2.14 3,134.26 3,230.24b) Trade Receivables 2.15 3,162.82 3,036.58c) Cash and Cash Equivalents 2.16 30.75 27.97d) Short-Term Loans and Advances 2.17 841.60 778.99

7,169.43 7,073.78TOTAL 9,789.52 9,543.05Significant Accounting Policies and Notes 1 to 4Notes referred to above form an integral part of the Balance Sheet.

As per our report of even date

S.R. REGE & CO.CHARTERED ACCOUNTANTS(Regn.No. 108813W) PRADEEP GOYAL Chairman and Managing Director

S.M. PATKI NEERU GOYAL DirectorPARTNERMembership No. 037690 ABHINAY KAPOOR Company Secretary

Navi Mumbai10th May, 2014

24

PRADEEP METALS LIMITEDSTATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH, 2014

(Rs. in Lacs) (Rs. in Lacs)Note No Year Ended Year Ended

31st March, 2014 31st March, 2013(Audited) (Audited)

I) Revenue from Operations (Net) 3.1 11,371.03 12,495.17II ) Other Income 3.2 170.99 208.12

III ) Total Revenue ( I + II ) 11,542.02 12,703.29

IV ) EXPENSESCost of Materials Consumed 3.3 5,414.71 6,500.58Purchases Of Stock-In-Trade 3.4 4.70 4.86Changes In Inventories of Finished Goods,Work-in-Progress and Stock-in-Trade 3.5 55.60 225.55Employee Benefits Expense 3.6 1,418.97 1,282.93Finance Costs 3.7 331.43 423.20Depreciation And Amortization Expense 2.10.1 206.14 199.76Other Expenses 3.8 3,204.03 3,291.19

Total Expenses 10,635.58 11,928.07

V) Profit Before Exceptional And Extraordinary Items And Tax ( III - IV ) 906.44 775.22VI ) Exceptional Items - -VII ) Profit Before Extraordinary Items And Tax ( V - VI ) 906.44 775.22VIII )Extraordinary Items - -IX ) Profit Before Tax ( VII - VIII ) 906.44 775.22

X) Tax ExpenseCurrent Tax Expense (Previous year’s figure includesRs. 80.31 Lacs for the earlier year) 313.69 339.64Deferred Tax (11.62) (5.67)

302.07 333.97

XI ) Profit / (Loss) for the period 604.37 441.25

XII ) Earnings Per Equity ShareBasic 3.9 3.50 2.62Diluted 3.50 2.56

Significant Accounting Policies and Notes 1Notes referred to above from an integral part of the Statement of Profit and Loss Account


S.R. REGE & CO.CHARTERED ACCOUNTANTS(Regn. No. 108813W) PRADEEP GOYAL Chairman and Managing Director



25



26

NOTE NO - 1: NOTES FORMING PART OF THE ACCOUNTS

1.1) Significant Accounting Policies:(1.1.1) Basis for preparation of Accounts

These Financial Statements have been prepared to comply in all material aspects with applicableaccounting principles in India, the applicable Accounting Standards notified under Section 211(3C)of the Companies Act, 1956. Pursuant to Circular 15/2013 dated 13 September, 2013 read withCircular 08/2014 dated 4th April, 2014, till the Standards of Accounting or any addendum theretoare prescribed by Central Government in consultation and recommendation of the NationalFinancial Reporting Authority, the existing Accounting Standards notified under the CompaniesAct, 1956 shall continue to apply. Consequently, these Financial Statements have been preparedto comply in all material aspects with Accounting Standards notified under section 211(3C)[Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisionsof the Companies Act, 1956. The Financial Statements have been prepared under the historicalcost convention. The accounting policies adopted in the preparation of the Financial Statementsare consistent with those followed in the previous year.

(1.1.2) System of AccountingThe Company generally follows the mercantile system of accounting and recognizes income andexpenditure on accrual basis, except income from investments, which is accounted for on receiptbasis.

(1.1.3) Use of EstimatesThe preparation of Financial Statements is in accordance with Generally Accepted AccountingPrinciples. As per the Management, the best estimates and assumptions are made, wherevernecessary, and reported in the amount of Assets and Liabilities as on the date of Financial Statementas well as in the amount of revenue and expenses during the reporting period. The Managementbelieves that the estimates used in the preparation of the Financial Statements are prudent andreasonable. Actual results could differ from these estimates. Any variance is recognized prospectivelyin current or future period in which the results are known or materialized.

(1.1.4) Fixed Assets and DepreciationFixed Assets are stated at cost less depreciation. Depreciation on assets has been providedfor on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956,on continuous process plant basis.

Depreciation on additions to assets is calculated on pro-rata basis from the day of asset beingput to use.

(1.1.5) Borrowing CostsBorrowing costs that are attributable to the acquisition or construction of qualifying assets arecapitalized as part of the cost of such assets. A qualifying asset is one that necessarily takesa substantial period of time to get ready for its intended use or sale. All other borrowing costsare charged to revenue.

(1.1.6) Inventoriesa. Raw material is valued at cost. The cost is arrived at on First-in-First-out basis.b. Dies and tools, Components, stores and spares are valued at cost.c. Work-in-process and semi-finished goods are valued at lower of cost or estimated net realizable

value.(1.1.7) Investment

Investments are stated at Cost.


27

(1.1.8) SalesSales are inclusive of excise duty. Revenue from sale of goods is recognized on transfer of significantrisks and rewards of ownership to the buyer.

(1.1.9) Foreign Currency TransactionsTransactions in foreign currency are recorded at the rates of exchange in force at the time thetransactions are effected. Monetary items denominated in foreign currency are restated usingthe exchange rates prevailing at the date of the Balance Sheet. The exchange difference betweenthe rate prevailing on the date of transaction and on the date of settlement is recognized asincome or expense, as the case may be.

(1.1.10) Provisions, Contingent Liabilities and Contingent AssetsProvisions, to the extent found necessary as per the Management, have been made based onbest estimates and are also recognized in respect of present liability in respect of the prior activity.Contingent Assets have not been recognized and hence, not reported.

(1.1.11) Taxes on IncomeTax expense comprises of current tax and deferred tax. Current tax is measured at the amountexpected to be paid/recovered from the applicable tax rates.Deferred income tax reflect the current period timing differences between taxable income andaccounting income for the period and reversal of timing differences of earlier years/period.Deferred tax assets are recognized only to the extent that there is reasonable certainty thatsufficient future income will be available except that deferred tax assets arising on account ofunabsorbed depreciation and losses are recognized if there is virtual certainty that sufficientfuture taxable income will be available to realize the same.

(1.1.12) Employee BenefitsContributions payable to the Government Provident Fund, ESIC and premium paid to Life InsuranceCorporation of India under Employees Group Gratuity Scheme, are charged to revenue. Theliabilities in respect of Leave Encashment at the year end are charged to revenue based onactuarial value.

(1.1.13) ImpairmentAt the end of each year, the Company determines whether a provision should be made for impairmentloss on fixed assets by considering the indications that an impairment loss may have occurredin accordance with Accounting Standard (AS-28) which deals with “Impairment of Assets”, notifiedunder the Company’s (Accounting Standards)Rules,2006.During the period, no such loss was observed and hence, no provision for impairment losshas been made.

(1.1.14) The Company manufactures “Forgings” of various types at one location only. Hence, AccountingStandard 17 regarding Segment Reporting notified under the Company’s (Accounting Standards)Rules, 2006, is not applicable to the Company.

(1.1.15) Preliminary expenses are being amortized in the year in which the same has been incurred.



28

1.2) Notes on Accounts31st March 2014 31st March,2013

(Rs.) (Rs.)(1.2.1) Contingent Liabilities not provided for

a. Letter of Guarantee issued by UnionBank 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

(1.2.2) Value of import calculated on CIF basis :Raw Material and Consumable goods 12,224,291 1,435,168Capital goods 1,126,080 -

(1.2.3) Expenditure in foreign currency – Travelling 1,489,811 1,557,905

(1.2.4) Earning in foreign currency :FOB value of Exports 732,786,410 761,693,885

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

(1.2.6) The year end net monetary foreign currency exposures that have not been hedged ,are given below.

Packing Credit in Foreign CurrencySr. No Particulars Foreign Currency Amount Foreign Currency Amount

(In Lacs) (Rs. in Lacs) (In Lacs) (Rs. in Lacs)

31st March, 2014 31st March, 2014 31st March, 2013 31st March, 2013

1 USD 24.12 1438.74 17.98 971.81

Receivables (Other than export bills aggregating to Rs. 1404.10 Lacs purchesed/ discountedby the Bank but pending for realization)Sr. No Particulars Foreign Currency Amount Foreign Currency Amount

(In Lacs) (Rs. in Lacs) (In Lacs) (Rs. in Lacs)

31st March, 2014 31st March, 2014 31st March, 2013 31st March, 2013

1 USD 11.68 696.68 17.11 924.78

2 EURO 0.82 67.21 3.60 247.79

3 GBP 0.06 5.65 0.49 40.08

(1.2.7) 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,


29

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

Sr. No. Name of the Relationship Nature of 31.03.2014 31.03.2013

Related Party T ransaction (Rs.) (Rs.)

1. Dhanlabh Engineering Enterprise in which Labour Charges 5,207,518/- 4,576,919/-

Works Pvt. Ltd. three of the Directors’

of the Company are Sales 289,842/- 993,227/-

interested. Rent 2,696,640/- 1,797,760/-

Electricity Charges. 1,340,505/- 936,543/-

(Reimbursement)

2 Economic Forge Private Enterprise in which a Labour Charges 2,017,058/- 1,912,676/-

Limited Director of the

Company is interested.

3 Pradeep Metals Limited, 100% Subsidiary Sales 81,525,843/- -

USA Company. Investment 271,925/- -

Receivables 52,898,703/- -

4 Mr. Abhinav Goyal Son of Chairman Remuneration. 29,40,000/- 17,50,000/-

and Managing

Director of the

Company.

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

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

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

(1.2.11) Previous year’s figures have been regrouped/reclassified, wherever necessary, to correspondwith the current year’s classifications/disclosures.

As per our report of even date for and on behalf of the Board

For S.R.Rege & Co.Chartered Accountants(ICAI Regn. No. 108813W) PRADEEP GOYAL Chairman and Managing Director

S.M.Patki NEERU GOYAL DirectorPartnerMembership No. 037690 ABHINAY KAPOOR Company Secretary

Navi Mumbai,10th May, 2014



30

2. NOTES FORMING PART OF BALANCE SHEET(Rs. in Lacs) (Rs. in Lacs)

As at As at31st March, 2014 31st March, 2013

2.1 SHARE CAPITAL2.1.1 Authorised

18,500,000 (18,500,000) Equity Shares of Rs.10 each 1,850.00 1,850.00 550,000 (550,000) Preference Shares of Rs.100 each 550.00 550.00

2,400.00 2,400.002.1.2 Issued, Subscribed and Fully Paid

17,270,000 (17,270,000) Equity Shares of Rs.10 eachfully paid up 1,727.00 1,727.00Less : Calls in Arrears 0.74 0.74

TOTAL 1,726.26 1,726.26

2.1.3 The list of Shareholders holding more than 5% shares in the Company is given below :-Name of the Shareholders As at March, 2014 As at March, 2013

No. of % of No. of % ofShares Holding Shares Holding

S. V. Shah Construction Services P. Ltd. 2,778,561 16.09 2,778,561 16.09Flashnet Info Solutions (India) Ltd. 1,026,500 5.94 1,026,500 5.94Pradeep Goyal 1,521,400 8.81 1,521,400 8.81Rabale Engineering ( I ) Pvt. Ltd. 6,167,481 35.71 6,165,381 35.70

2.1.4 The Reconciliation of the number of equity shares outstanding:-Equity shares with voting rights As at March, 2014 As at March, 2013

No. of (Rs. in Lacs) No. of (Rs. in Lacs)Shares Shares

Shares outstanding as at the beginning of the year 17,270,000 1,727.00 16,420,000 1,642.00Add :Issued during the year - - 850,000 85.00

Shares outstanding as at the end of the year 17,270,000 1,727.00 17,270,000 1,727.00


31

2.2 RESERVES AND SURPLUSReserves and Surplus as at 31st March 2014

(Rs. in Lacs)Securities General Surplus TotalPremium Reserve as per

Account Statement of Profit & Loss

Account

Opening Balance As per last Balance Sheet 515.98 188.60 584.08 1,288.66Net Profit/(Loss) for the period 604.37 604.37Add Transferred from Statement ofProfit & Loss during the Year 23.00 23.00Less Amount Trasferred to General Reserve 23.00 23.00Less : Proposed Dividend on Equity Shares for the year(including Dividend Distribution Tax Rs.35.22 Lacs) - - 242.46 242.46

Closing Balance 515.98 211.60 922.99 1,650.57

2.2 RESERVES AND SURPLUSReserves and Surplus as at 31st March, 2013

(Rs. in Lacs)Securities General Surplus as per TotalPremium Reserve Statement of

Account Profit & LossAccount

Opening Balance as per last Balance Sheet 425.98 188.60 348.20 962.78Net Profit/(Loss) for the period - - 441.25 441.25Add : Received during the period 90.00 - - 90.00Less : Dividend for earlier years. - - 4.65 4.65(including Dividend Distribution Tax Rs.0.65 Lacs)Less : Proposed Dividend on Equity Shares for the year(including Dividend Distribution Tax Rs.28.02 Lacs) - - 200.72 200.72

Closing Balance 515.98 188.60 584.08 1,288.66



32

(Rs. in Lacs) (Rs. in Lacs)As at As at

31st March, 2014 31st March, 2013NON -CURRENT LIABILITIES2.3 ( a ) From Union Bank of India

Term Loans (Secured by first pari passu charge on thefixed assets of the Company, present and future and secondcharge on current assets.):(i) Term Loan IV (Repayable in 15 Quarterly Installments of

Rs.6.37 lacs each & 16th Installment or Rs.6.45 Lacsstarting from April 2010 at the interest rate of BaseRate + 4.25% p.a.) The total outstanding as on31st March, 2014 - Rs. Nil. (Previous Year- Rs.22.97 Lacs.) - -

(ii) Term Loan V (Repayable in 45 monthly installments ofRs.10.00 Lacs each starting from July 2011 at the interest rateof Base Rate + 1.50% p.a.). The total outstanding as on31st March, 2014 - Rs. 116.56 Lacs. (Previous Year - Rs.210.55 Lacs.) - 90.55

(iii)Term Loan VI (Repayable in 15 Quarterly Installments ofRs. 15.00 Lacs each starting from July 2012 at the interest rate ofBase Rate + 1.50% p.a.). The total outstanding as on31st March, 2014 - Rs. 95.52 Lacs. (Previous Year - Rs.106.50 Lacs) 35.52 46.50

(iv)Term Loan VII (Repayable in 17 Quarterly Installments ofRs- 27.35 Lacs each starting from July 2014 at the interest rateof Base Rate + 1.50% p.a.). The total outstanding as on31st March, 2014 - Rs.169.75 Lacs. (Previous Year - Rs. Nil) 87.70 -

All the above loans are also secured by personal guarantee ofthe Chairman and Managing Director of the Company.

( b ) Loan from Axis Bank Ltd - 0.56(Secured by hypothecation of the vehicle : Terms of Repayment :starting from October 2011 in 35 monthly installments of Rs.0.15 Lacs.at the interest rate 11.24 % p.a.)The total outstanding as on 31st March,2014 - Rs.0.75 Lac(Previous Year - Rs. 2.42 Lacs).Installments due on above within one year Rs. 259.36 Lacs( Previous Year Rs. 204.83 Lacs )

( c ) UnsecuredInter Corporate Deposits - -

123.22 137.612.4 DEFERRED TAX ASSETS AND LIABILITIES

Deferred Tax Assets:Other Timing Difference 45.47 31.77Unabsorbed Depreciation Carried Forward - -

45.47 31.77Deferred Tax Liability:Arising out of Timing Difference on account of Book &Tax Depreciation for the Current Year (313.16) (311.08)

Net Deferred Tax Liability (267.69) (279.31)


33

(Rs. in Lacs) (Rs. in Lacs) As at As at

31st March, 2014 31st March, 20132.5 OTHER LONG TERM LIABILITIES

Trade payable 0.98 6.62

0.98 6.62

2.6 LONG-TERM PROVISIONSProvision for Employee Benefits 50.14 11.68

50.14 11.68

CURRENT LIABILITIES2.7 SHORT-TERM BORROWINGS

Working Capital Loans from Union Bank of India 4,231.92 3,974.08Secured by hypothecation of inventories, book debts,including bills discounted/purchased and other current assetsand second charge on the fixed assets(The above loans are also secured by personal guarantee ofthe Chairman and Managing Director of the Company) 4,231.92 3,974.08

2.8 OTHER CURRENT LIABILITIESUnpaid dividends 16.61 11.76Trade Paybales - Capital Goods 8.61 1.28Outstanding Liabilities for Expenses 80.56 58.40Other Liabilities (Advances from Debtors) 15.03 4.71

Current Maturities of Long term Loans:-( a ) From Union Bank of India


Rs.6.37 Lacs each & 16th Installment or Rs.6.45 Lacs startingfrom April 2010 at the interest rate of Base Rate + 4.25% p.a.)The total outstanding as on 31st March, 2014 - Rs. Nil.(Previous Year- Rs.22.97 Lacs.) - 22.97

(ii) Term Loan V (Repayable in 45 monthly installments ofRs.10.00 Lacs each starting from July 2011 at the interest rate ofBase Rate + 1.50% p.a.)The total outstanding as on 31st March, 2014 - Rs. 116.56 Lacs.(Previous Year - Rs.210.55 Lacs.) 116.56 120.00

(iii)Term Loan VI (Repayable in 15 Quarterly Installments ofRs. 15.00 Lacs each starting from July 2012 at the interestrate of Base Rate + 1.50% p.a.).The total outstanding as on 31st March, 2014 - Rs. 95.52 Lacs.(Previous Year - Rs.106.50 Lacs) 60.00 60.00

(iv)Term Loan VII (Repayable in 17 Quarterly Installments ofRs- 27.35 Lacs each starting from July 2014 at the interest rate ofBase Rate + 1.50% p.a.). The total outstanding as on31st March, 2014 - Rs.169.75 Lacs. (Previous Year - Rs. Nil) 82.05 -All the above loans are also secured by personal guarantee ofthe Chairman and Managing Director of the Company.


PRADEEP METALS LIMITED(Rs. in Lacs) (Rs. in Lacs)

As at As at31st March, 2014 31st March, 2013

34

( b )Loan from Axis Bank Ltd. 0.75 1.86(Secured by hypothecation of the vehicle : Terms of Repayment :starting from October 2011 in 35 monthly installments for Rs. 0.15 Lac.at the interest rate 11.24 % p.a.).The total outstanding as on 31st March,2014 - Rs.0.75 Lac(Previous Year Rs. 2.42 Lacs)Installments due on above within one year Rs. 259.36 Lacs.( Previous year Rs. 204.83 Lacs )

( c ) UnsecuredInter Corporate Deposits - 200.00

380.17 480.982.9 SHORT-TERM PROVISIONS

Provisions for Income Tax (Net of Advance Tax and TDS of Rs. 147.26 Lacs) 0.24 0.24(Previous Year Rs. 147.26 Lacs)Proposed Dividend 242.46 200.72Provision for Employee Benefits 193.79 220.51

436.49 421.472.10 FIXED ASSETS (Refer Page 38)2.10.1 Depreciation and amortisation for the year 206.14 199.76

Depreciation and amortisation for the yearcharged to Statement of Profit and Loss 206.14 199.76

Face Total No. As at As atvalue of Shares 31st March, 2014 31st March, 2013

2.11 NON-CURRENT INVESTMENTSUnquoted InvestmentsJanakalyan Sahakari Bank Ltd. 10 10 0.00 0.00Dombivli Nagari Sahakari Bank Ltd. 50 1,000 0.50 0.50The Thane Janata Sahakari Bank Ltd. 50 1,000 0.50 0.50Shares of 100% Subsidiary USD 25 200 2.72 -Pradeep Metals Ltd., USA.

3.72 1.002.11.1 Aggregate Cost of :

Quoted Investments - -Unquoted Investments 3.72 1.00

3.72 1.00


As at 31st As at 31stMarch, 2014 March, 2013

35

NON-CURRENT ASSETS2.12 LONG-TERM LOANS AND ADVANCES

(Unsecured, Considered Good unless otherwise stated)Capital Advances 333.55 347.16Deposits and Balances with Government and other Authorities 43.79 39.34Mat Credit Entitlement 78.91 183.14Less : Utilised upto 31st March, 2014 (78.91) (104.23)Mat Credit Available 0.00 78.91Other Deposits 7.70 10.27

385.04 475.68

2.13 OTHER NON-CURRENT ASSETSLong term Trade Receivables 13.60 15.51

13.60 15.51

CURRENT ASSETS2.14 INVENTORIES

Raw Materials 681.59 532.32Work-in-progress (Note 4.1) 1,252.34 1,300.70Consumable stores & spares & Fuel 228.16 258.92Dies 952.21 1,111.10Scrap 19.96 27.20

3,134.26 3,230.242.14.1 Work in progress

Forgings 1,252.34 1,300.70Others - -

1,252.34 1,300.70

2.15 TRADE RECEIVABLES(Unsecured, Considered Good unless otherwise stated)Outstanding for a period exceeding six months from 3.37 12.53the date they are due for payment.Others 3,159.45 3,024.05

3,162.82 3,036.582.16 CASH AND CASH EQUIVALENTS

Cash and Cash EquivalentsBalances with Scheduled Banks :In Current Accounts 17.62 16.55In Fixed Deposits (pledged with Government Authorities and Banks) 11.99 10.47Cash in Hand 1.14 0.95

30.75 27.972.17 SHORT-TERM LOANS AND ADVANCES

Unsecured (Considered Good unless otherwise stated)Loans and Advances 803.06 751.33(Export benefits, Balance with Excise & Sales Tax Dept.)Advance Income Tax ( Net of Provision for Tax of Rs.538.48 Lacs) 38.54 27.66(Previous Year Rs.301.70 Lacs)

841.60 778.99


PR

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P M

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LS LIM

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36

PRADEEP METALS LIMITED2. NOTES FORMING PART OF BALANCE SHEET

2.10 FIXED ASSETS(Rs. in Lacs)

GROSS BLOCK DEPRECIATION/AMORTISATION NET BLOCK

FIXED ASSETS As At As at As at For the Adjustment As at As at As at 01.04.2013 Additions Deductions 31.03.2014 01.04.2013 year on 31.03.2014 31.03.2014 31.03.2013

Sales

TANGIBLE ASSETS

Leasehold Land 55.81 - - 55.81 - - - - 55.81 55.81

Factory Buildings 355.34 - - 355.34 168.69 11.87 - 180.56 174.78 186.65

Plant and Machinery 3,550.55 311.12 121.64 3,740.03 1,907.26 186.41 116.49 1,977.18 1,762.85 1,643.29

Furniture and Fixtures 37.88 0.60 3.70 34.78 22.48 1.38 2.94 20.92 13.86 15.40

Vehicles 69.05 - 0.47 68.58 31.34 6.48 0.47 37.35 31.23 37.71

Total Tangible Assets 4,068.63 311.72 125.81 4,254.54 2,129.77 206.14 119.90 2,216.01 2,038.53 1,938.86

Previous Year 3936.72 136.48 4.57 4,068.63 1,933.95 199.76 3.94 2,129.77 1,938.86 1,838.41

INTANGIBLE ASSETS - - - - - - - - - -

Total Intangible Assets - - - - - - - - - -

Previous Year - - - - - - - - - -

Total Fixed Assets 4,068.63 311.72 125.81 4,254.54 2,129.77 206.14 119.90 2,216.01 2,038.53 1,938.86

Capital work-in-progress (including Pre-operative Expenses) 179.20 38.22

Intangible Assets Under Development - -

2,217.73 1,977.08


37

3. NOTES FORMING PART OF STATEMENT OF PROFIT AND LOSS(Rs. in Lacs) (Rs. in Lacs) Year Ended Year Ended

31st March, 2014 31st March, 20133.1 REVENUES

a) OPERATING REVENUESSale of ProductsExport 7,492.15 8,049.50Domestic 3,191.56 3,697.81Job work/ Tooling Charges 76.11 79.85Less: Excise Duty 564.67 776.16

10,195.15 11,051.00 b) OTHER OPERATING REVENUES

Export Incentives 157.66 226.30Scrap Sales 1,012.64 1,210.84Miscellaneous Receipts - Operating 5.58 7.03

1,175.88 1,444.17

11,371.03 12,495.17

3.2 OTHER INCOMEExchange Rate Difference (Net) 114.39 190.27Interest on Bank and Other Accounts 8.34 2.45

Dividend (Gross) from Others 0.08 0.08

122.81 192.80

Profit on Sale of Fixed Assets (Net) 5.49 -Miscellaneous Receipts - Non Operating 42.69 15.32

170.99 208.12

3.3 COST OF MATERIALS CONSUMEDRaw MaterialOpening Stock As on 1st April, 2013 532.32 876.29

Add : Purchases And Incidental Expenses 5,563.98 6,156.61 Less : Closing Stock As on 31st March, 2014 681.59 532.32

5,414.71 6,500.58

3.4 PURCHASES OF STOCK-IN-TRADEOthers /Steel 4.70 4.86

4.70 4.86

3.5 INCREASE / DECREASE IN STOCKSOpening Stock As on 1st April, 2013a. Work-in-progress 1,300.70 1,497.35b. Scrap 27.20 56.10

1,327.90 1,553.45Less : Closing Stock As on 31st March, 2014a. Work-in-progress 1,252.34 1,300.70b. Scrap 19.96 27.20

1,272.30 1,327.90

55.60 225.55



Year Ended Year Ended31st March, 2014 31st March, 2013

38

3.6 EMPLOYEE BENEFITS EXPENSESSalaries 282.14 241.16Wages 1,041.38 930.28Contribution To Provident And Other Funds 49.52 65.20Staff Welfare Expenses 45.93 46.29

1,418.97 1,282.93

3.7 FINANCE COSTSInterest on Term Loans and Working Capital Facilities. 323.75 399.04Interest on Inter Corporate Deposit 7.13 19.28Other Interest 0.55 4.88

331.43 423.20

3.8 OTHER EXPENSES(A) Consumable stores and spares 540.53 578.53(B) Power, fuel and water 684.27 728.62(C) Rent 29.42 21.98(D) Repairs To Factory Buildings 37.87 14.69(E) Repairs To Machinery 62.07 62.24(F) Insurance 26.31 17.09(G) Dies Consumed / Written-off 400.52 271.59

(H) Miscellaneous Expenses (Refer note 3.8.1) 1,423.04 1,596.45

3,204.03 3,291.193.8.1 Miscellaneous Expenses

Payments to sub-contractors 442.41 473.69Inward Freight,Octroi and Other expenses 194.65 306.01Other administrative expenses 211.76 213.50Donation to Political Party 5.00 -Selling expenses 397.97 408.94Others 171.25 194.31

1,423.04 1,596.45

3.8.2 Auditors’ Remuneration (Including service tax) charged toStatement of Profit and Loss accountAudit fees 3.37 2.81Tax Audit fees 0.85 0.67For Consultation on Tax Matters 0.85 0.68Other Matters 1.20 1.23Reimbursement of expenses 0.27 0.42

6.54 5.81

PRADEEP METALS LIMITED(Rs. in Lacs) (Rs. in Lacs) Year Ended Year Ended

31st March, 2014 31st March, 2013

39

3.9 Earnings Per Share:Net profit for the year from ordinary activities attributableto equity shareholders 604.37 441.25

604.37 441.25Weighted-average-number of potential equity shareson exercise of options 17,270,000 16,856,500Basic Earnings Per Share (Face Value of‘ 10 each) 3.50 2.62- From ordinary activitiesDiluted Earnings Per Shares (Face Value of 10 each) 3.50 2.56- From ordinary activities

4.1 Additional information details (Rs. in lacs)

4.1 Turnover and Stocks

Turnover Stock Products 31st March,2014 31st March,2013 31st March,2014 31st March,2013

01. Steel Forging work 10,677.06 11,741.69 1,252.34 1,300.7002. Steel Trading 6.65 5.62 - -

10,683.71 11,747.31 1,252.34 1,300.70







As per our report of even dateS.R. REGE & CO.CHARTERED ACCOUNTANTS(Regn. No. 108813W) PRADEEP GOYAL Chairman and Managing Director



40

Cash Flow Statement for the year ended 31st March, 2014Rs in Lacs Rs in Lacs2013-2014 2012-2013

Current year Previous YearA) Cash Flow from Operating Activities

Net profit before tax and exceptional items 906.44 775.22Adjustment for :—Income Tax Adjustment For Prior Years 0.00 (80.31)Depreciation 206.14 199.76Loss on sale of Assets 0.00 0.45Profit on sale of Assets (5.49) -Dividend Received (0.08) (0.08)Interest Expenses 331.43 423.20Interest Income (8.34) -Bad Debts Written Off 6.52 9.47Operating profit before Working Capital changes 1436.62 1327.71Adjustment forTrade and Other Receivables (226.77) (188.29)Inventories 95.97 532.91Transfer From Capital Work in Progress (127.36) (51.43)Trade Payable (451.76) (619.02)Profit On Sale Of Assets - -Cash generated From Operations 726.70 1001.88Interest Paid (331.43) (423.20)Cash flow Before Extraordinary Items 395.27 578.68Extraordinary Items - -Net Cash used in Operating Activities 395.27 578.68

B) Cash Flow From Investing ActivitiesPurchase Of Fixed Assets (311.72) (136.48)Sale Of Fixed Assets 11.41 0.17Purchase of Investments (2.72) -Interest received 8.34 -Dividend Received 0.08 0.08Net Cash Flow From Investing Activities (294.61) (136.23)

C) Cash Flow from Financing ActivitiesProceeds From Issue Of Share Capital (Share Application Money)Proceeds From ISSUE Of Share Capital - 85.00Premium Received On Issue Of Share Capital - 90.00Redemption of OCCRP shares with premium - -Proceeds From Advance Received Against Warrants - (43.75)Proceeds From Working Capital Borrowings 297.98 (347.62)Payment of Dividend - Equity Shares (195.87) (195.60)Payment of Dividend - OCCRP - -Proceeds From Other Borrowings (Net) (200.00) (25.00)Net Cash Flow From Investing Activities (97.89) (436.97)Net Increase In Cash and Cash Equivalents Flow From Investing Activities 2.77 5.48Cash and Cash Equivalents As at 31/03/2013 (Opening Balance) 27.97 22.49Cash and Cash Equivalents As at 31/03/2014 (Closing Balance) 30.75 27.97

Notes :1) The Cash Flow statement has been prepared and presented as per the requirements of Accounting Standard (AS)

3" Cash Flow Statement” notified under the Company’s (Accounting Standard) Rules,20062) Figures in brackets indicate Cash Outflow3) Previous year’s figures have been regrouped, wherever necessary to conform to this year’s classification.

PRADEEP METALS LIMITEDCONSOLIDATED BALANCE SHEET AS AT 31 st MARCH , 2014

(Rs. in Lacs) As at

Note No. 31st March, 2014(Audited)

I EQUITY AND LIABILITIES1) Shareholders’ Funds

a) Share Capital 2.1 1,726.26b) Reserve and Surplus 2.2 1,628.85

3,355.112) Share Application Money Pending Allotment -3) Non-Current Liabilities

a) Long-Term Borrowings 2.3 123.22b) Deferred Tax Liabilities (Net) 2.4 267.69c) Other Long Term Liabilities 2.5 0.98d) Long-Term Provisions 2.6 50.14

442.034) Current Liabilities

a) Short-Term Borrowings 2.7 4,231.92b) Trade Payables 957.90c) Other Current Liabilities 2.8 393.38d) Short-Term Provisions 2.9 438.47

6,021.67TOTAL 9,818.81

II ASSETS1) Non-Current Assets

a) Fixed Assets 2.10i) Tangible Assets 2,038.53ii) Capital Work-in-Progress 179.20

2,217.73b) Non-Current Investments 2.11 1.00c) Long-Term Loans and Advances 2.12 385.04d) Other Non-Current Assets 2.13 13.60

2,617.372) Current Assets

a) Inventories 2.14 3,452.17b) Trade Receivables 2.15 2,871.77c) Cash and Cash Equivalents 2.16 35.90d) Short-Term Loans and Advances 2.17 841.60

7,201.44TOTAL 9,818.81Significant Accounting Policies and Notes 1 to 4Notes referred to above form an integral part of the Balance Sheet.





41


PRADEEP METALS LIMITEDSTATEMENT OF CONSOLIDATED PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH, 2014

(Rs. in Lacs)Note No Year Ended

31st March, 2014(Audited)

I) Revenue from Operations (Net) 3.1 11,272.29II) Other Income 3.2 170.99

III) Total Revenue ( I + II ) 1 1,443.28

IV) EXPENSESCost of Materials Consumed 3.3 5,414.71Purchases Of Stock-In-Trade 3.4 168.09Changes In Inventories of Finished Goods,Work-in-Progress and Stock-in-Trade 3.5 (264.59)Employee Benefits Expense 3.6 1,418.97Finance Costs 3.7 331.43Depreciation And Amortization Expense 2.10.1 206.14Other Expenses 3.8 3,294.61

Total Expenses 10,569.36

V) Profit Before Exceptional And Extraordinary Items And Tax ( III - IV ) 873.92VI) Exceptional Items -

VII) Profit Before Extraordinary Items And Tax ( V - VI ) 873.92VIII)Extraordinary Items -IX) Profit Before Tax ( VII - VIII ) 873.92

X) Tax ExpenseCurrent Tax Expense (Previous year’s figure includesRs. 80.31 Lacs for the earlier year) 315.67Deferred Tax (11.62)

304.05

XI) Profit/(Loss) for the period 569.87XII) Earnings Per Equity Share

Basic 3.9 3.30Diluted 3.30

Significant Accounting Policies and Notes 1Notes referred to above from an integral part of the Statement of Profit and Loss Account





42


NOTE NO - 1: NOTES FORMING PART OF THE ACCOUNTS1.1) Significant Accounting Policies:

(1.1.1) Basis for preparation of Accounts.a. The Consolidated Financial Statement (CFS) are prepared in accordance with Accounting

Standards (AS) 21 “Consolidated Financial Statement” as specified in the Companies (AccountingStandards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The ConsolidatedFinancial Statement comprises the Financial Statements of Pradeep Metals Limited and itssubsidiary. Reference in these notes to Pradeep Metals Limited, Company, Parent Company orGroup shall mean to include Pradeep Metals Limited and its subsidiary, unless otherwise stated.

b. The accounts have been prepared under the historical cost convention in accordance withthe Generally Accepted Accounting Principles in India and the Accounting Standards notifiedunder the Companies (Accounting Standards) Rules, 2006 and the relevant provisions ofthe Companies Act, 1956.

c. The accounts of foreign subsidiary have been prepared in compliance with the applicableAccounting Standards. Necessary adjustments for the differences in the accounting policies,wherever applicable, have been made in the Consolidated Financial Statement.

d. The notes and significant policies to the Consolidated Financial Statement are intended toserve as a guide for better understanding of the Group’s position. In this respect, the Companyhas disclosed such notes and policies which represent the required disclosure.

(1.1.2) Principles of Consolidationa. The Financial Statement of the Parent Company and its Subsidiary have been consolidated

on a line-by-line basis by adding together the book values of the like terms of Assets, Liabilities,Income and Expenses, after eliminating intragroup balances and the unrealized profits/losses on intra-group transactions, and the presented to the extent possible, in the samemanner as the Parent Company’s Independent Financial Statements.

b. Reserves and Surplus shown in the Consolidated Balance Sheet includes the Company’sshare in the respective reserves of subsidiary. Reserves attributable to minority stakeholdersare reported as part of Minority Interest in the Consolidated Balance Sheet. Retained earningscomprise Company’s share in General Reserves and Statement of Profit and Loss.

(1.1.3) System of AccountingThe Company generally follows the mercantile system of accounting and recognizes incomeand expenditure on accrual basis, except income from investments, which is accounted for onreceipt basis.

(1.1.4) Use of EstimatesThe preparation of Consolidated Financial Statements is in accordance with Generally AcceptedAccounting Principles. As per the Management, the best estimates and assumptions are made,wherever necessary, and reported in the amount of assets and liabilities as on the date ofConsolidated Financial Statements as well as in the amount of revenue and expenses duringthe reporting period. The Management believes that the estimates used in the preparation ofthe financial statements are prudent and reasonable. Actual results could differ from theseestimates. Any variance is recognized prospectively in current or future period in which theresults are known or materialized.

(1.1.5) Fixed Assets and DepreciationFixed Assets are stated at cost less depreciation. Depreciation on assets has been providedfor on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956,on continuous process plant basis.Depreciation on additions to assets is calculated on pro-rata basis from the day of asset being

43


PRADEEP METALS LIMITEDput to use.

(1.1.6) Borrowing CostsBorrowing costs that are attributable to the acquisition or construction of qualifying assets arecapitalized as part of the cost of such assets. A qualifying asset is one that necessarily takesa substantial period of time to get ready for its intended use or sale. All other borrowing costsare charged to revenue.

(1.1.7) Inventoriesa. Raw material is valued at cost. The cost is arrived at on First-in-First-out basis.b. Dies and tools, components, stores, spares, are valued at cost.c. Work-in-process and semi-finished goods are valued at lower of cost or estimated net realizable

value.(1.1.8) Investment

Investments are stated at Cost.(1.1.9) Sales

Sales are inclusive of excise duty. Revenue from sale of goods is recognized on transfer of significantrisks and rewards of ownership to the buyer.

(1.1.10) Foreign Currency Transactionsa. The reporting currency of the Company is Indian Rupee.b. Transactions in foreign currency are recorded at the rates of exchange in force at the time

the transactions are effected. Monetary items denominated in foreign currency are restatedusing the exchange rates prevailing at the date of the Balance Sheet. The exchange differencebetween the rate prevailing on the date of transaction and on the date of settlement is recognizedas income or expense, as the case may be.

c. Financial Statements of Overseas Non-Integral Operations are translated as under :-i. Assets and Liabilities at the rate prevailing at the end of the year.ii. Depreciation and amortization is accounted at the same rate at which assets are converted.iii. Revenues and Expenses at yearly average exchange rate prevailing during the year.

Exchange difference arising on translation of non-integral foreign operations is accumulatedin the Foreign Currency Translation Reserve until the disposal of such operations.

(1.1.11) Provisions, Contingent Liabilities and Contingent AssetsProvisions, to the extent found necessary as per the Management, have been made based onbest estimates and are also recognized in respect of present liability in respect of the prior activity.Contingent Assets have not been recognized and hence, not reported.

(1.1.12) Taxes on IncomeTax expense comprises of current tax and deferred tax. Current tax is measured at the amountexpected to be paid/recovered from the applicable tax rates.Deferred income tax reflect the current period timing differences between taxable income and accountingincome for the period and reversal of timing differences of earlier years/period. Deferred taxassets are recognized only to the extent that there is reasonable certainty that sufficient futureincome will be available except that deferred tax assets arising on account of unabsorbed depreciationand losses are recognized if there is virtual certainty that sufficient future taxable income willbe available to realize the same.

(1.1.13) Employee BenefitsContributions payable to the Government Provident Fund, ESIC and premium paid to Life InsuranceCorporation of India under Employees Group Gratuity Scheme are charged to revenue. The liabilitiesin respect of leave encashment at the year end are charged to revenue based on actuarial value.

44

PRADEEP METALS LIMITED(1.1.14) Impairment

At the end of each year, the Company determines whether a provision should be made for impairmentloss on fixed assets by considering the indications that an impairment loss may have occurredin accordance with Accounting Standard (AS-28) which deals with “Impairment of Assets”, notifiedunder the Company’s (Accounting Standards)Rules,2006.During the period, no such loss was observed and hence, no provision for impairment loss hasbeen made.

(1.1.15) The Company manufactures “Forgings” of various types at one location only. Hence, AccountingStandard 17 regarding Segment Reporting notified under the Company’s (Accounting Standards)Rules, 2006, is not applicable to the Company.

(1.1.16) Preliminary expenses are being amortized in the year in which the same has been incurred..1.2) Notes on Accounts 31stMarch 2014

(‘Rs.)(1.2.1) Earning in foreign currency:

FOB value of Exports 653,709,583(1.2.2) The year end net monetary foreign currency exposures that have

not been hedged ,are given below.Packing Credit in Foreign Currency

Sr. No Particulars Foreign Currency (In Lacs ) Amount (Rs. in Lacs)31st March, 2014 31stMarch,2014

1 USD 24.12 1438.74

Receivables (Other than export bills aggregating to Rs. 1404.10 Lacs purchesed/ discountedby the Bank but pending for realization)

Sr. No Particulars Foreign Currency (In Lacs ) Amount (Rs. in Lacs)31st March,2014 31stMarch,2014

1 USD 11.94 712.13

2 EURO 0.82 67.21

3 GBP 0.06 5.65

Payables

Sr. No Particulars Foreign Currency (In Lacs ) Amount (Rs. in Lacs)31st March,2014 31stMarch,2014

1 USD 0.60 35.79

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

taken place and relationships:

45



Sr. No. Name of the Related Relationship Nature of 31.03.2014 (Rs.)Party T ransaction

1. Dhanlabh Engineering Enterprise in which three Labour Charges 5,207,518/- Works Pvt. Ltd of the Directors’ of the Sales 289,842/-

Company are interested. Rent 2,696,640/-Electricity Charges. 1,340,505/-(Reimbursement)

2. Economic Forge Private Enterprise in which aLimited Director of the Company Labour Charges 2,017,058/-

is interested3. Mr.Abinav Goyal Son of Chairman and Remuneration. 29,40,000/-

Managing Director of theCompany.

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

(1.2.5) This being the first year of operations in respect of USA Subsidiary, the Previous year’s figureshave not been provided for.

STATEMENT PURSUANT TO SECTION 212Details of Subsidiary included in the Consolidated Financial Statements are as under:-

Sr. no. Name of subsidiary Company Country of Proportion of Proportion of Voting(Foreign subsidiary) Incorporation Ownership Power held (%)

interest (%)

1 Pradeep Metals Limited, USA USA 100.00 100.00

Information Regarding Subsidiary Company(For the Financial year)

Sr No Particulars Pradeep MetalsLimited, USA

( Amount in USD )Financial Year ending on 31-03-2014Exchange rate on the last date of financial year 1 USD = Rs.60.09

1 Share Capital (including share application money pending allotment) 5,0002 Reserve 18,3513 Liabilities 9,16,9474 Total liabilities 9,40,2985 Total Assets 9,40,2986 Turnover 11,92,3947 Profit before taxation 21,6518 Provision for taxation 3,3009 Profit after Taxation 18,351

As per our report of even date for and on behalf of the Board




46

PRADEEP METALS LIMITED2. NOTES FORMING PART OF BALANCE SHEET

(Rs. in Lacs)As at

31st March, 20142.1 SHARE CAPITAL

2.1.1 Authorised18,500,000 (18,500,000) Equity Shares of Rs.10 each 1,850.00550,000 (550,000) Preference Shares of Rs.100 each 550.00

2,400.002.1.2 Issued, Subscribed and Fully Paid

17,270,000 (17,270,000) Equity Shares of Rs.10 eachfully paid up 1,727.00Less : Calls in Arrears 0.74

TOTAL 1,726.26

2.1.3 The list of Shareholders holding more than 5 % shares in the Company is given below :-Name of the Shareholders As at March, 2014

No. of Shares % of H olding

S. V. Shah Construction Services P. Ltd. 2,778,561 16.09Flashnet Info Solutions (India) Ltd. 1,026,500 5.94Pradeep Goyal 1,521,400 8.81Rabale Engineering ( I ) Pvt. Ltd. 6,167,481 35.71

2.1.4 The Reconciliation of the number of equity shares outstanding:-Equity shares with voting rights As at March, 2014

No. of Shares (Rs. in Lacs)

Shares outstanding as at the beginning of the year 17,270,000 1,727.00Add : Issued during the year - -Shares outstanding as at the end of the year 17,270,000 1,727.00

47


PRADEEP METALS LIMITED2.2 RESERVES AND SURPLUS

Reserves and Surplus as at 31st March 2014(Rs. in Lacs)

Securities General Surplus Foreign TotalPremium Reserve as per CurrencyAccount Statement Translation

of Profit & ReserveLoss Account

Opening Balance as per last Balance Sheet 515.98 188.60 584.08 - 1,288.66Net Profit/(Loss) for the period 569.87 - 569.87Add : Received during the period - - - - -Unrealised profits in respect of Intragrouptransactions in consolidation - - 12.87 - 12.87Add : Transferred from Statement of Profit & Lossduring the Year - 23.00 - - 23.00Less : Amount Trasferred to General Reserve - - 23.00 - (23.00)Less : Proposed Dividend on Equity Shares for the year - - 242.46 - (242.46)(including Dividend Distribution Tax Rs.35.22 Lacs) - - - - -Provision for the Year - - - (0.09) (0.09)

Closing Balance 515.98 211.60 901.36 (0.09) 1,628.85

48


NON -CURRENT LIABILITIES2.3 ( a ) From Union Bank of India


Rs.6.37 Lacs each & 16th Installment or Rs.6.45 Lacs startingfrom April 2010 at the interest rate of Base Rate + 4.25% p.a.)The total outstanding as on 31st March, 2014 - Rs. Nil.(Previous Year- Rs.22.97 Lacs.) -

(ii) Term Loan V (Repayable in 45 monthly installments of Rs.10.00 Lacseach starting from July 2011 at the interest rate ofBase Rate + 1.50% p.a. )The total outstanding as on 31st March, 2014 - Rs. 116.56 Lacs.(Previous Year - Rs.210.55 Lacs.) -

(iii) Term Loan VI (Repayable in 15 Quarterly Installments of Rs. 15.00 Lacseach starting from July 2012 at the interest rate ofBase Rate + 1.50% p.a.).The total outstanding as on 31st March, 2014 - Rs. 95.52 Lacs.(Previous Year - Rs.106.50 Lacs) 35.52

(iv)Term Loan VII (Repayable in 17 Quarterly Installments ofRs- 27.35 Lacs each starting from July 2014 at the interest rate of Base Rate + 1.50% p.a.).The total outstanding as on 31st March, 2014 - Rs.169.75 Lacs.(Previous Year - Rs. Nil) 87.70All the above loans are also secured by personal guarantee ofthe Chairman and Managing Director of the Company.

( b ) Loan from Axis Bank Ltd -(Secured by hypothecation of the vehicle : Terms of Repayment :starting from October 2011 in 35 monthly installments of Rs.0.15 Lacs.at the interest rate 11.24 % p.a.).The total outstanding as on 31st March,2014 - Rs.0.75 Lac.(Previous Year - Rs. 2.42 Lacs).Installments due on above within one year Rs. 259.36 Lacs( Previous Year Rs. 204.83 Lacs )

( c ) UnsecuredInter Corporate Deposits -

123.22

2.4 DEFERRED TAX ASSETS AND LIABILITIESDeferred Tax Assets:Other Timing Difference 45.47Unabsorbed Depreciation Carried Forward -

45.47Deferred Tax Liability:Arising out of Timing Difference on account of Book &Tax Depreciation for the Current Year (313.16)

Net Deferred Tax Liability (267.69)

(Rs. in Lacs)As at

31st March, 2014

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As at 31st March, 2014

2.5 OTHER LONG TERM LIABILITIESTrade payable 0.98

0.98

2.6 LONG-TERM PROVISIONSProvision for Employee Benefits 50.14

50.14

CURRENT LIABILITIES2.7 SHORT-TERM BORROWINGS

Working Capital Loans from Union Bank of India 4,231.92Secured by hypothecation of inventories, book debts,including bills discounted/purchased and other current assetsand second charge on the fixed assets(The above loans are also secured by personal guarantee ofthe Chairman and Managing Director of the Company) 4,231.92

2.8 OTHER CURRENT LIABILITIESUnpaid dividends 16.61Trade Payable - Capital Goods 8.61Outstanding Liabilities for Expenses 93.77Other Liabilities (Advances from Debtors) 15.03

Current Maturities of Long term Loans:-( a ) From Union Bank of India


Rs.6.37 Lacs each & 16th Installment or Rs.6.45 Lacs startingfrom April 2010 at the interest rate of Base Rate + 4.25% p.a.)The total outstanding as on 31st March, 2014 - Rs. Nil.(Previous Year- Rs.22.97 Lacs.) -

(ii) Term Loan V (Repayable in 45 monthly installments of Rs.10.00 Lacseach starting from July 2011 at the interest rate ofBase Rate + 1.50% p.a.)The total outstanding as on 31st March, 2014 - Rs. 116.56 Lacs.(Previous Year - Rs.210.55 Lacs.) 116.56

(iii) Term Loan VI (Repayable in 15 Quarterly Installments of Rs. 15.00 Lacseach starting from July 2012 at the interest rate ofBase Rate + 1.50% p.a.).The total outstanding as on 31st March, 2014 - Rs. 95.52 Lacs.(Previous Year - Rs.106.50 Lacs) 60.00

(iv)Term Loan VII (Repayable in 17 Quarterly Installments of Rs. 27.35 Lacseach starting from July 2014 at the interest rate ofBase Rate + 1.50% p.a.).The total outstanding as on 31st March, 2014 - Rs.169.75 Lacs.(Previous Year - Rs. Nil) 82.05All the above loans are also secured by personal guarantee ofthe Chairman and Managing Director of the Company.

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As at31st March, 2014

( b ) Loan from Axis Bank Ltd 0.75(Secured by hypothecation of the vehicle : Terms of Repayment :starting from October 2011 in 35 monthly installments for Rs.0.15 Lac.at the interest rate 11.24 % p.a.).The total outstanding as on 31st March,2014 - Rs.0.75 Lac.

(Previous Year Rs. 2.42 Lacs)Installments due on above within one year Rs. 259.36 Lacs.( Previous year Rs. 204.83 Lacs )

( c ) UnsecuredInter Corporate Deposits -

393.382.9 SHORT-TERM PROVISIONS

Provisions for Income Tax (Net of Advance Tax and TDS of Rs. 147.26 Lacs) 2.22(Previous Year Rs. 147.26 Lacs)Proposed Dividend 242.46Provision for Employee Benefits 193.79

438.472.10 FIXED ASSETS2.10.1Depreciation and amortisation for the year 206.14

Less: Capitalised as pre-operative expenses -Less: Additional depreciation on revalued assets withdrawn from capital reserve -

Depreciation and amortisation for the year charged to Statement of Profit and Loss 206.14

(Rs. in Lacs)Face Value Total No of As at 31st

Shares March, 20142.11NON-CURRENT INVESTMENTS

Unquoted InvestmentsJanakalyan Sahakari Bank Ltd. 10 10 0.00Dombivli Nagari Sahakari Bank Ltd. 50 1,000 0.50The Thane Janata Sahakari Bank Ltd. 50 1,000 0.50

1.002.11.1 Aggregate Cost of :

Quoted Investments -Unquoted Investments 1.00

1.00

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As at31st March, 2014

NON-CURRENT ASSETS2.12 LONG-TERM LOANS AND ADVANCES

(Unsecured, Considered Good unless otherwise stated)Capital Advances 333.55Deposits and Balances with Government and other Authorities 43.79Mat Credit Entitlement 78.91Less : Utilised upto 31st March, 2014 (78.91)Mat Credit Available 0.00Other Deposits 7.70

385.042.13 OTHER NON-CURRENT ASSETS

Long term Trade Receivables 13.60

13.60CURRENT ASSETS2.14 INVENTORIES

Raw Materials 681.59Work-in-progress (Note 4.1) 1,252.34Consumable stores & spares & Fuel 228.16Dies 952.21Scrap 19.96Finished Goods 317.90

3,452.172.14.1 Work in progress

Forgings 1,252.34Others -

1,252.342.15 TRADE RECEIVABLES

(Unsecured, Considered Good unless otherwise stated)Outstanding for a period exceeding six months from 3.37the date they are due for payment.Others 2,868.40

2,871.772.16 CASH AND CASH EQUIVALENTS

Cash and Cash EquivalentsBalances with Scheduled banks :In Current Accounts 22.77In Fixed Deposits (pledged with Government Authorities and Banks) 11.99Cash in Hand 1.14

35.902.16.1 Lodged as security with Government Department -2.16.2 Interest accrued -

2.17 SHORT-TERM LOANS AND ADVANCESUnsecured (Considered Good unless otherwise stated)Loans and Advances 803.06(Export benefits,Balance with Excise & Sales Tax Dept.)Advance Income Tax (Net of Provision for Tax of Rs.538.48 Lacs) 38.54(Previous Year Rs.301.70 Lacs)

841.60

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DPRADEEP METALS LIMITED2. NOTES FORMING PART OF BALANCE SHEET

2.10 FIXED ASSETS(Rs. In Lacs)

GROSS BLOCK DEPRECIATION/AMORTISATION NET BLOCK

FIXED ASSETS As At As at As at For the Adjustment As at As at As at 01.04.2013 Additions Deductions 31.03.2014 01.04.2013 year on 31.03.2014 31.03.2014 31.03.2013

Sales

TANGIBLE ASSETS

Leasehold Land 55.81 - - 55.81 - - - - 55.81 55.81

Factory Buildings 355.34 - - 355.34 168.69 11.87 - 180.56 174.78 186.65

Plant and Machinery 3,550.55 311.12 121.64 3,740.03 1,907.26 186.41 116.49 1,977.18 1,762.85 1,643.29

Furniture and Fixtures 37.88 0.60 3.70 34.78 22.48 1.38 2.94 20.92 13.86 15.40

Vehicles 69.05 - 0.47 68.58 31.34 6.48 0.47 37.35 31.23 37.71

Total Tangible Assets 4,068.63 311.72 125.81 4,254.54 2,129.77 206.14 119.90 2,216.01 2,038.53 1,938.86

Previous Year 3936.72 136.48 4.57 4,068.63 1,933.95 199.76 3.94 2,129.77 1,938.86 1,838.41

INTANGIBLE ASSETS - - - - - - - - - -

Total Intangible Assets - - - - - - - - - -

Previous Year - - - - - - - - - -

Total Fixed Assets 4,068.63 311.72 125.81 4,254.54 2,129.77 206.14 119.90 2,216.01 2,038.53 1,938.86

Capital work-in-progress (including Pre-operative Expenses) 179.20 38.22

Intangible Assets Under Development - -

2,217.74 1,977.08

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PRADEEP METALS LIMITED3. NOTES FORMING PART OF STATEMENT OF PROFIT AND LOSS

(Rs. in Lacs)Year Ended

31st March 20143.1 REVENUES

a) OPERATING REVENUESSale of ProductsExport 6,676.90Domestic 3,908.07Job work/ Tooling Charges 76.11Less: Excise Duty 564.67

10,096.41b) OTHER OPERATING REVENUES

Export Incentives 157.66Scrap Sales 1,012.64Miscellaneous Receipts - Operating 5.58

1,175.88

11,272.29

3.2 OTHER INCOMEExchange Rate Difference (Net) 114.39Interest on Bank and Other Accounts 8.34Dividend (Gross) from Others 0.08

122.81

Profit on Sale of Fixed Assets (Net) 5.49Miscellaneous Receipts - Non Operating 42.69

170.99

3.3 COST OF MATERIALS CONSUMEDRaw MaterialOpening Stock As on 1st April, 2013 532.32Add : Purchases And Incidental Expenses 5,563.98Less : Closing Stock As on 31st March, 2014 681.59

5,414.71

3.4 PURCHASES OF STOCK-IN-TRADEOthers /Steel 168.09

168.09

3.5 INCREASE / DECREASE IN STOCKSOpening Stock As on 1st April, 2013a. Processed Stock/Finished Goods 1,300.70b. Scrap 27.20

1,327.90Less : Closing Stock As on 31st March, 2014a. Processed Stock/Finished Goods 1,252.34b. Scrap 19.96c. Stock of Finished Goods 320.19

1,592.49(264.59)

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Year ended31st March, 2014

3.6 EMPLOYEE BENEFITS EXPENSESSalaries 282.14Wages 1,041.38Contribution To Provident And Other Funds 49.52Staff Welfare Expenses 45.93

1,418.97

3.7 FINANCE COSTSInterest on Term Loans and Working Capital Facilities. 323.75Interest on Inter Corporate Deposit 7.13Other Interest 0.55

331.43

3.8 OTHER EXPENSES(A) Consumable stores and spares 540.53(B) Power, fuel and water 684.28(C) Rent 29.42(D) Repairs To Factory Buildings 37.87(E) Repairs To Machinery 62.07(F) Insurance 26.31(G) Dies Consumed / Written-off 400.52(H) Miscellaneous Expenses (Refer note 3.8.1) 1,513.61

3,294.613.8.1 Miscellaneous Expenses

Payments to sub-contractors 442.41Inward Freight,Octroi and Other expenses 194.65Other administrative expenses 212.90Donation to Political Party 5.00Selling expenses 439.36Others 219.29

1,513.613.8.2 Auditors’ Remuneration (Including service tax) charged to

Statement of Profit and Loss accountAudit fees 3.37Tax Audit fees 0.85For Consultation on Tax Matters 0.85Other Matters 1.20Reimbursement of expenses 0.27

6.54

55



Year Ended31st March, 2014

3.9 Earnings Per Share:Net profit for the year from ordinary activities attributableto equity shareholders 569.87

569.87

Weighted-average-number of potential equity shares on exercise of options 17,270,000Basic Earnings Per Share (Face Value of‘ 10 each) 3.30- From ordinary activitiesDiluted Earnings Per Shares (Face Value of 10 each) 3.30- From ordinary activities

4.1 Additional information details (Rs. in Lacs)4.1 Turnover and Stocks

Turnover Stock Products 31st March,2014 31st March,2014

01. Steel Forging work 9,861.81 1,252.3402. Steel Trading 723.16 -

10,584.97 1,252.34





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Cash Flow Statement for the year ended 31st March, 2014Rs in Lacs2013-2014

A) Cash Flow from Operating ActivitiesNet profit before tax and exceptional items 873.92Adjustment for :—Income Tax Adjustment For Prior Years -Depreciation 206.14Loss on sale of Assets -Profit on sale of Assets (5.49)Dividend Received (0.08)Interest Expenses 331.43Interest Income (8.34)Bad Debts Written Off 6.51Misc. Expenditure Written Off 0.81Operating profit before Working Capital changes 1404.90Adjustment forTrade and Other Receivables 89.52Inventories (221.93)Transfer From Capital Work in Progress (127.37)Trade Payable and other payables (400.88)Intragroup Trasaction Unrealised Gain 12.87Cash generated From Operations 757.11Interest Paid (331.43)Cash flow Before Extraordinary Items 425.68Extraordinary Items -Net Cash used in Operating Activities 425.68

B) Cash Flow From Investing ActivitiesPurchase Of Fixed Assets (311.72)Sale Of Fixed Assets 11.41Interest received 8.34Dividend Received 0.08Net Cash Flow From Investing Activities (291.89)

C) Cash Flow from Financing ActivitiesProceeds from Issue of Share Capital (Share Application Money)Proceeds from Issue of Share Capital -Premium Received On Issue of Share Capital -Redemption of OCCRP shares with premiumProceeds from Advance Received Against Warrants -Proceeds from Working Capital Borrowings 297.98Payment of Dividend - Equity Shares (195.87)Payment of Dividend - OCCRPProceeds From Other Borrowings (Net) (200.00)Net Cash Flow From Investing Activities (97.89)

Net Increase In Cash and Cash Equivalents Flow From Investing Activities 35.90Cash and Cash Equivalents As at 31/03/2013 (Opening Balance) -Cash and Cash Equivalents As at 31/03/2014 (Closing Balance) 35.90

Notes :1) The Cash Flow statement has been prepared and presented as per the requirements of Accounting Standard (AS)

3" Cash Flow Statement” notified under the Company’s (Accounting Standard) Rules, 2006.2) Figures in brackets indicate Cash Outflow.3) Previous year’s figures have been regrouped, wherever necessary to conform to this year’s classification.

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PRADEEP METALS LIMITEDBOOK-POST

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PRADEEP METALS LIMITEDR-205, MIDC, Rabale, Navi Mumbai - 400 701.Maharashtra.CIN: L99999MH1982PLC026191 SI

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