Pradeep Metals Ltd

Your Directors are pleased to present the Forty Second Annual Report together with the Audited financial Statements for the year ended 31 March, 2025.

1. FINANCIAL RESULTS:

The Company's standalone financial performance for the year ended 31 March, 2025, is summarized below:

(Rs. in Lakhs)

2. REVIEW OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS:

The Company has achieved Revenues from Operations and Other Income of Rs. 29,953.38 Lakhs during the financial Year ended 31 March, 2025, an increase of 16.88% over the previous year. Profit before Taxes for the year has increased by 25.61% and Profit after Taxes increased by 27.67% during the year.

The consolidated Income of the Company is Rs. 31,706.60 Lakhs in the current year as compared to Rs. 28,039.46 Lakhs in the previous year, i.e. an increase of 13.26%. The consolidated Profit after Taxes for the current year is Rs. 2,717.37 Lakhs as compared to Rs. 2,228.42 Lakhs in the previous year, i.e. an increase of 22.36%.

The performance of the Company has improved compared to the previous year, driven by the addition of new customers, a diversi ed product mix, cost optimization measures, and effective management control.

A comprehensive analysis of the Company's performance, along with the future business outlook, is provided in the Management Discussion and Analysis Report, which forms part of this Report.

3. DIVIDEND:

The Directors have recommended a Final Dividend of 25% i.e., Rs. 2.50/- per Equity Share of Rs. 10/- each for the financial Year ended 31 March , 2025 at the Board Meeting held on 22 May, 2025.

4. TRANSFER TO RESERVES:

No amount has been transferred to the General Reserve.

5. CHANGE IN THE NATURE OF BUSINESS, IF ANY:

There was no change in the nature of business of the Company during the year under review.

6. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:

Management's Discussion and Analysis Report for the year under review, in terms of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the"Listing Regulations") and SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 (the "Amended Listing Regulations"), forms part of this report.

7. SCHEME OF ARRANGEMENT

The Board of Directors at their Meeting held on 3 March, 2025, based on the recommendations of the Independent Directors' Committee and Audit Committee, has considered and approved a Scheme of Amalgamation of Nami Capital Private Limited ("NCPL" or "Transferor Company") with Pradeep Metals Limited ("PML" of "Transferee Company" or "the Company") and their respective Shareholders ("the Scheme") presented under Sections 230 to 232 read with Section 66 and other relevant provisions of the Companies Act, 2013 ("the Act") and the Rules framed thereunder.

The Transferor Company is engaged mainly in the business of

(i) trading in steel metals and

(ii) trading and investing in quoted and unquoted securities.

The Scheme is subject to receipt of approvals of Shareholders and Creditors of the Companies involved and approval of other regulatory authorities as may be required, including those of the BSE Limited, Securities and Exchange Board of India, the National Company Law Tribunal, Mumbai Bench ("NCLT") and other regulatory authorities, as applicable.

The Amalgamation of the Transferor Company with the Transferee Company is sought to achieve simplification of the group structure and better utilization of resources of both the Companies.

There is no cash consideration involved in the scheme. Based upon the Share Exchange Ratio Report, the Fairness Opinion and the recommendations received from the Independent Directors' Committee and the Audit Committee, the Board has approved the Scheme for the transfer and vesting of NCPL into the Company, in consideration for which the Company will issue and allot to the Shareholders of NCPL its Equity Shares of the face value of Rs. 10 (Rupees Ten only) each, credited as fully paid up in the Company, without any further act or deed, due to operation of law and upon this Scheme becoming effective.

The Scheme of Amalgamation along with relevant documents have been uploaded on the Company's website at https://www.pradeepmetals.com/scheme-of-amalgamations/

8. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company has one Wholly Owned Subsidiary, namely Pradeep Metals Limited, Inc., Houston, USA (WOS) and one Wholly Owned Step-Down Subsidiary, namely Dimensional Machine Works LLC, Houston, USA (SDS). The financials of both the Subsidiaries are included in the Consolidated financial Statements which are prepared in accordance with the relevant Accounting Standards issued by the Institute of Chartered Accountants of India and forms part of this Report.

The WOS is engaged in trading of the products manufactured by the Company. The WOS is also engaged in the agency business for marketing of the products of the Company in the international market. Apart from adding new business, this has helped the Company to serve the customers falling in different time zones with faster response and service.

The SDS has been engaged in manufacturing, trading and warehousing of components for Engineering industry in USA market.

The total income of the WOS and the SDS was Rs. 2,896.59 Lakhs (USD 3.423 Million) and Rs. 3,371.84 Lakhs (USD 3.985 Million) for the current year as compared to Rs. 3,024.37 Lakhs (USD 3.651 Million) and Rs. 4,307.26 Lakhs (USD 5.200 Million) for the previous year, respectively. The combined profit before Exceptional items and Taxes of both the Subsidiaries amounted of Rs. 461.88 Lakhs (USD 0.524 Million) for the year as compared to Rs. 384.87 Lakhs (USD 0.465 Million) in the previous year.

The total income of WOS and SDS decreased in the current year due to reduction in Customer's demand and reduction in sales price.

During the year, the WOS has also earned the Agency Commission income of Rs. 593.61 Lakhs (USD 0.705 Million) as compared to Rs. 500.96 Lakhs (USD 0.608 Million) during the previous year.

The Company doesn't have any Joint Venture or Associate Company.

As required by the Companies (Accounts) Rules, 2014, a report on performance and financial position of each of the subsidiaries, included in the Consolidated financial Statements, is annexed to this Report as Annexure A (Form No. AOC-1).

Pursuant to amended Regulation 16(1)(c) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, "Material Subsidiary" means a Subsidiary whose income or net worth exceeds ten percent of the consolidated income or net worth, respectively, of the Company and its Subsidiaries in the immediately preceding accounting year.

The Board of Directors of the Company has approved a Policy for determining material subsidiaries which is in line with the Listing Regulations as amended from time to time. The Policy has been uploaded on the Company's website https://www.pradeepmetals.com/policies/.

Pradeep Metals Limited, Inc., Houston, USA, a Wholly Owned Subsidiary and Dimension Machine Works LLC, Wholly Owned Step-Down Subsidiary fall under the de nition of Material Subsidiaries as mentioned above.

9. DEPOSITS:

The Company has neither invited nor accepted any xed deposits from the public and hence, no amount of principal or interest was outstanding in respect thereof on the date of the Balance Sheet.

The Company's financial discipline and prudence is reflected in the credit ratings ascribed by the rating agency as given below:

The Company's shares are listed on BSE Limited, and the Company ensures timely payment of the requisite listing fees to the Stock Exchange.

The Company's Equity Shares are admitted to the depository systems of the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) and have been allotted ISIN No. INE770A01010. Shareholders are encouraged to utilize this facility by lodging their holdings with Depository Participants (DPs) where they maintain their Demat accounts to convert their physical shareholdings into electronic form.

The Company has not issued any Equity Shares under Sweat Equity Share Capital or Employee Stock Option Scheme.

As on 31 March, 2025, the Company has Eight (8) Directors consisting of Four (4) Independent Directors (of which one is Woman Director), One (1) Executive Director and Three (3) Non-Executive Non-Independent Directors (of which one is Woman Director).

1. In accordance with the provisions of Section 152(6) of the Companies Act, 2013 (‘the Act'), Mr. Abhinav Goyal (DIN: 08786430), Non-Executive Non-Independent Director, retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible, has offered himself for re-appointment. Details of his background are given in the Corporate Governance Report, which forms part of this Annual Report.

Pursuant to the provisions of Section 203 of the Act, Mr. Pradeep Goyal, Chairman & Managing Director, Ms. Kavita Choubisa Ojha, Chief financial Officer and Mr. Abhishek Joshi, Company Secretary & Compliance Officer are the Key Managerial Personnel of the Company as on the date of this Report.

The information required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report as Annexure B.

In terms of the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 (‘the Act'), the Board of Directors, in respect of the year ended 31 ^st March, 2025, hereby confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

b. they 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 state of a airs of the Company at the end of the financial Year and of the profit and loss of the Company for that period;

c. they have taken proper and su cient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

? The Company has received declarations from all Independent Directors of the Company, confirming that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and the Listing Regulations.

? In terms of Regulation 25(8) of SEBI Listing Regulations, they have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties as Independent Director.

? On the basis of declarations received from all Independent Directors and after undertaking a due assessment of the veracity of the same, the Board of Directors has confirmed that they meet the criteria of independence as mentioned under Regulation 16(1)(b) of the SEBI Listing Regulations and that they are independent of the Management.

The Company has put in place appropriate policy on Directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of Directors and other matters provided in Section 178(3) of the Companies Act, 2013.

The salient features of Company's policy on Directors' remuneration have been disclosed in the Corporate Governance Report, which forms part of this Report.

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, evaluation of the Board as a whole, individual Directors, Committees and Chairman was undertaken by circulating structured questionnaire to all the Directors, taking into consideration the guidelines issued by SEBI.

The Nomination & Remuneration Committee reviewed the performance of Individual Directors, the Board as a whole, Committees of the Board and Chairman & Managing Director after taking into consideration feedback received from the Directors. The evaluation was done on various parameters such as vision and strategy, participation, disclosures of interests, review of risk management policies and evaluating plans with reference to risk and return, good governance, leadership skills, operations, business development, human resources development, corporate communication, etc. as per the structured questionnaire circulated the feedback received from the Directors were then consolidated and discussed at the Board Meeting held on 22 May, 2025. The Directors expressed their satisfaction with the evaluation process and the performance.

A detailed Report on Corporate Governance, pursuant to the requirements of Regulation 34(3) of the Listing Regulations, forms an integral part of this Report. A Certificate from the Auditors of the Company, M/s. N.A. Shah Associates LLP, Chartered Accountants, confirming compliance with the conditions of Corporate Governance as stipulated under Schedule V (E) of the Listing Regulations, is annexed to this Report as Annexure C.

The Business Responsibility Report, as required by Regulation 34(2) of the Listing Regulations, is not applicable to the Company for the financial Year ending 31 March, 2025.

The Vigil Mechanism of the Company also incorporates a Whistle Blower Policy in terms of the Listing Regulations thereby establishing a vigil mechanism for the Directors and permanent employees for reporting genuine concerns, if any. Protected disclosures can be made by a whistle blower through an e-mail or dedicated telephone line or a letter to the Chairman of the Audit Committee. The policy on vigil mechanism and whistle blower policy may be accessed on the Company's website at the link: https://www.pradeepmetals.com/policies/.

The Directors had constituted a Risk Management Committee which was entrusted with the responsibility to assist the Board in

(a) Overseeing and approving the Company's risk management framework; and

(b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, Legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. However, since the constitution of Risk Management Committee is not applicable to the Company as per the Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, the Audit Committee currently looks into the Risk Management functions.

The Company has formulated a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company. It has been approved by the Board and the same has been hosted on the Company's website: https://www.pradeepmetals.com/policies.

The key philosophy of all CSR initiatives undertaken by the Company is guided by three core commitments of Scale, Impact and Sustainability. During the year, the Company has spent Rs. 46.60 Lakhs against the annual requirement of Rs. 46.45 Lakhs on CSR activities.

Pursuant to the amendments in the CSR Rules dated 22 January, 2021, the constitution of CSR Committee is not applicable where the CSR amount to be spent by a Company doesn't exceed Rs. 50 Lakhs and the functions of such Committee are to be discharged by the internal Committee formed by the Board of Directors.

Given the above, the constitution of the CSR Committee was not applicable for the financial Year 2024-25. The Company had formed an Internal Committee of Chief financial Officer, Chief Operating Officer and the Company Secretary, which is responsible for implementation of the CSR projects/activities.

The Company has identified focus areas of engagement which have been enumerated in Annexure D to this Report.

The details in respect of the Audit Committee are included in the Corporate Governance Report, which forms part of this Report.

a. Statutory Auditors

The tenure of appointment of M/s. N.A. Shah Associates, Chartered Accountants, Mumbai Statutory Auditors of the Company, will end upon conclusion of the ensuing Annual General Meeting (AGM).

Board of Directors, on the recommendation of Audit Committee, has proposed to appoint M/s. KKC & Associates LLP, Chartered Accountants, Mumbai ( firm Registration Number: 105146W/W100621) as Statutory Auditors of the Company in place of the retiring auditors M/s. N.A. Shah Associates, to hold Office for a period of ve years from conclusion of ensuing AGM till the conclusion of Forty Seventh AGM of the Company to be held in the year 2030.

M/s. KKC & Associates LLP have confirmed their willingness to be appointed as Statutory Auditors of the Company and eligibility to the e ect that their appointment, if made, would be within the prescribed limits under the act and that they are not disqualified for appointment.

Auditors' Report

The Notes on financial Statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditor's Report does not contain any qualification, reservation or adverse remark.

No fraud was reported by the Auditors under Sub-section (12) of Section 143 of Companies Act, 2013.

b. Cost Auditors

As per the requirement of Central Government and pursuant to the provisions of Section 148 of the Companies Act, 2013 (the Act) read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the Company has been carrying out audit of its cost records every year.

The Board of Directors, on the recommendation of the Audit Committee, has re-appointed M/s. Vishesh Naresh Patani, Cost & Management Accountants, ( firm Registration No. 101108), as Cost Auditors to audit the cost accounts of the Company for the financial Year 2025-26 at a remuneration of Rs.1,35,000/- (plus applicable taxes and reimbursement of out-of-pocket expenses at actuals).

Pursuant to Section 148 of the Act, a resolution seeking Members' approval for the remuneration payable to the Cost Auditors forms part of the Notice convening the ensuing AGM.

The relevant Cost Audit Report for the financial Year 2023-24 was led with the Ministry of Corporate A airs on August 31, 2024. No adverse comments have been made in the said Report.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder, M/s. Shweta Gokarn & Co., Practicing Company Secretaries, Navi Mumbai (Certificate of Practice Number: 11001; Peer Review No. 1693/2022) were appointed as the Secretarial Auditors to conduct Secretarial Audit for the financial Year 2024-25.

The Secretarial Auditors' Report for the financial Year is annexed to this Report as Annexure E. Pursuant to Regulation 24A of SEBI (Listing Obligation and Disclosure Requirements), Regulations, 2015 (Listing Regulations) (including any statutory modification(s) or re-enactment thereof for the time being in force), the Board has recommended to the Shareholders, appointment of M/s. Shweta Gokarn & Co. as Secretarial Auditor for ve years, to conduct the Secretarial Audit of the Company from financial Year 2025-26 to 2029-30.

As on the date of this report, Company's investment in WOS in the form of Equity Shares, before impairment of Rs. 810.00 Lakhs, stands at Rs. 3,579.32 Lakhs (USD 4.67 Million).

No loan was provided to the WOS/SDS during the financial Year 2024-25 nor is there any outstanding loan as on 31 March, 2025.

Further, no advance was made or Corporate Guarantee provided to WOD/SDS during the financial Year 2024-25.

All contracts / arrangements / transactions entered by the Company during the financial Year with related parties were in the ordinary course of business and on an arm's length basis. The Company has entered into an agency agreement with WOS for International marketing and support to the customers.

During the year, the Company did not enter into any contract / arrangement / transaction with related parties, other than the Wholly Owned Subsidiary and Wholly Owned Step-Down Subsidiary, which could be considered material, in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions, as approved by the Board, may be accessed on the Company's website https:// www.pradeepmetals.com/policies/.

The particulars as required under the Act along with the statement containing transactions with any person or entity belonging to the Promoter / Promoter Groups which hold(s) 10% or more shareholding, if any, are furnished in Annexure F (Form No. AOC-2) to this Report.

No material changes have occurred, and no commitments were given by the Company, thereby affecting its financial position between the end of the financial Year to which these financial statements relate and the date of this Report.

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure G to this Report.

The Company has in place adequate internal financial controls, commensurate with the activities and the size of the Company. During the year, such controls were tested and no reportable material weaknesses in the design or operations were observed.

The Company has in place proper system to ensure compliance with the provisions of the applicable Secretarial Standards (SS-1 and SS-2) issued by the Institute of Company Secretaries of India.

The Company recognizes its human resources as one of its prime and critical resources for its growth and hence it strives to align human resource policy and initiatives to meet business plans. The relations between the Management and the workers and Sta Members remained very cordial throughout the year under review. As on 31 March, 2025, the Company had 572 employees on its payroll at its manufacturing plant and administrative Office at Rabale, Navi Mumbai.

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder.

During the year under review, no case was led pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the financial Year 2024-25, ve Meetings of the Internal Complaints Committee were held on 4 June, 2024, 26 September, 2024, 2^nd December, 2024 and 19 February, 2025.

The Annual Return for the financial Year 2024-25 may be accessed on the Company's website https://www.pradeepmetals.com.

During the financial Year 2024-25, 5 ( ve) Board Meetings were held on 17 May, 2024, 2 August, 2024,29 October, 2024, 30 January, 2025 and 3 March 2025 the details of which are furnished in the Corporate Governance Report forming part of this Report. The gap between any two Meetings did not exceed 120 days.

Change in Promoter and Promoter Group Shareholding:

Shares held by Mr. Pradeep Goyal, Mrs. Neeru Goyal and M/s. Nami Capital Private Limited form part of the Promoter Group Shareholding.

During the year under review, there was no change in the Shareholding of Promoter / Promoter Group.

As on date, the total shareholding of Nami Capital Private Limited stands at 59.03%, while the overall shareholding of Promoter group stands at 73.48 %. The total shareholding of the Promoters is within the maximum permissible limit of 75% as stated under the SEBI SAST Regulations.

In terms of the provisions of Sub-Rule 2 of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, none of the employees, except Mr. Pradeep Goyal, Chairman & Managing Director of Company, drew remuneration in excess of the limits prescribed under the Act. Relevant particulars are given in Annexure B to this Report. The Report and the Accounts are being sent to the Members excluding the statement containing the names of top ten Employees in terms of remuneration drawn. In terms of Section 136 of the Act, the details of top ten Employees are open for Inspection at the Registered Office of the Company. Any Member interested in obtaining a copy of the same may write to the Company Secretary.

As regards the items in the Notice of the Annual General Meeting relating to Special Business, the resolutions incorporated in the Notice and the Explanatory Statement relating thereto fully indicate the reasons for seeking the approval of Members to those resolutions.

The following resolutions are proposed to be passed as Special Business:

1. To approve the remuneration of the Cost Auditors for the financial Year ending 31 March, 2026.

2. To consider appointment of M/s. Shweta Gokarn & Co., Practicing Company Secretaries as Secretarial Auditors for a term of ve years.

3. To approve the remuneration payable to Mr. Abhinav Goyal holding Office or place of profit.

4. To approve the remuneration payable to Mrs. Neha Goyal holding Office or place of profit.

The Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year:

? No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

? There was no fraud reported by the Auditors under Sub section (12) of Section 143 of the Companies (Amendment) Act, 2015, to the Audit Committee, Board of Directors or Central Government.

? There were no applications made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year and at the end of the financial Year.

? The details of the difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or financial Institutions along with the reasons thereof- Not applicable.

The Directors wish to place on record their appreciation and acknowledge with gratitude the support and co-operation extended by the Government authorities, Union Bank of India (bankers), customers, vendors, employees and Members during the year under review and look forward to their continued support.

Place: Navi Mumbai

Date: 22 May, 2025