3.16.Provisions, contingent liabilities, contingent assets
A provision is recognized when the Company has a present obligation (legal or constructive) as a result
of past event and it is probable that an outflow of resources will be required to settle the obligation, in
respect of which a reliable estimate can be made. If the effect of time value of money is material,
provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risk specific to
the liability. When discounting is used, the increase in the provision due to the passage of time is
recognized as a finance cost. These are reviewed at each balance sheet date and adjusted to reflect the
current best estimates.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation
that may, but probably will not require an outflow of resources. When there is a possible obligation or a
present obligation in respect of which likelihood of outflow of resources is remote, no provision or
disclosure is made.
The Company does not recognize a contingent asset but discloses its existence in the financial
statements if the inflow of economic benefits is probable. However, when the realization of income is
virtually certain, then the related asset is no longer a contingent asset, but it is recognized as an asset.
Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance
sheet date.
3.17. Earnings per share
Basic earnings per share is computed using the net profit for the year attributable to the equity
shareholders' and weighted average number of shares outstanding during the year. The weighted
average numbers of shares also includes fixed number of equity shares that are issuable on conversion
of compulsorily convertible preference shares, debentures or any other instrument, from the date
consideration is receivable (generally the date of their issue) of such instruments.
Diluted earnings per share is computed using the net profit for the year attributable to the shareholder'
and weighted average number of equity and potential equity shares outstanding during the year
including share options, convertible preference shares and debentures, except where the result would
be anti-dilutive.
3.18. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity. Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of
financial assets and financial liabilities (other than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition
of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in
profit or loss. However, trade receivables that do not contain a significant financing component are
measured at transaction price.
3.18.1. Financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade
date basis. Regular way purchases or sales are purchases or sales of financial assets that require
delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognized financial assets are subsequently measured in their entirety at either amortized cost
or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are subsequently measured at amortized cost
(except for debt instruments that are designated as at fair value through profit or loss on initial
recognition):
• the asset is held within a business model whose objective is to hold assets in order to collect
contractual cash flows; and
• the contractual terms of the instrument give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
All other financial assets are subsequently measured at fair value.
Effective interest method
The effective interest method is a method of calculating the amortized cost of a debt instrument and
of allocating interest income over the relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash receipts (including all fees and points paid or received that
form an integral part of the effective interest rate, transaction costs and other premiums or discounts)
through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross
carrying amount on initial recognition.
Income is recognized on an effective interest basis for debt instruments other than those financial
assets classified as at FVTPL. Interest income is recognized in profit or loss and is included in the
“Other income” line item.
Financial assets at fair value through profit or loss (FVTPL)
Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects
on initial recognition to present subsequent changes in fair value in other comprehensive income for
investments in equity instruments which are not held for trading.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any
gains or losses arising on re-measurement recognized in profit or loss. The net gain or loss
recognized in profit or loss incorporates any dividend or interest earned on the financial asset and is
included in the ‘Other income' line item. Dividend on financial assets at FVTPL is recognized when
the Company's right to receive the dividends is established, it is probable that the economic benefits
associated with the dividend will flow to the entity, the dividend does not represent a recovery of part
of cost of the investment and the amount of dividend can be measured reliably.
Impairment of financial assets
The Company recognizes loss allowances using the expected credit loss (ECL) model based on
‘simplified approach' for the financial assets which are not fair valued through profit or loss. Loss
allowance for trade receivables with no significant financing component is measured at an amount
equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an
amount equal to the twelve month ECL, unless there has been a significant increase in credit risk
from initial recognition in which case those are measured at lifetime ECL. The amount of expected
credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the
amount that is required to be recognized is recognized as an impairment gain or loss in statement of
profit and loss.
De-recognition of financial asset
The Company de-recognizes a financial asset when the contractual rights to the cash flows from the
asset expire, or when it transfers the financial asset and substantially all the risks and rewards of
ownership of the asset to another party. If the Company neither transfers nor retains substantially all
the risks and rewards of ownership and continues to control the transferred asset, the Company
recognizes its retained interest in the asset and an associated liability for amounts it may have to pay.
If the Company retains substantially all the risks and rewards of ownership of a transferred financial
asset, the Company continues to recognize the financial asset and also recognizes a collateralized
borrowing for the proceeds received.
On de-recognition of a financial asset in its entirety, the difference between the asset's carrying
amount and the sum of the consideration received and receivable and the cumulative gain or loss that
had been recognized in other comprehensive income and accumulated in equity is recognized in
profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of
that financial asset.
On de-recognition of a financial asset other than in its entirety (e.g. when the Company retains an
option to repurchase part of a transferred asset), the Company allocates the previous carrying
amount of the financial asset between the part it continues to recognize under continuing
involvement, and the part it no longer recognizes on the basis of the relative fair values of those parts
on the date of the transfer. The difference between the carrying amount allocated to the part that is no
longer recognized and the sum of the consideration received for the part no longer recognized and
any cumulative gain or loss allocated to it that had been recognized in other comprehensive income is
recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss
on disposal of that financial asset. A cumulative gain or loss that had been recognized in other
comprehensive income is allocated between the part that continues to be recognized and the part
that is no longer recognized on the basis of the relative fair values of those parts.
3.18.2. Financial liability and equity instrument
Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as
equity in accordance with the substance of the contractual arrangements and the definitions of a
financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the Company are recognized at the
proceeds received, net of direct issue costs. Repurchase of the Company's own equity instruments is
recognized and deducted directly in equity. No gain or loss is recognized in profit or loss on the
purchase, sale, issue or cancellation of the Company's own equity instruments.
Financial liabilities
All financial liabilities are subsequently measured at amortized cost using the effective interest
method or at FVTPL.
However, financial liabilities that arise when a transfer of a financial asset does not qualify for de¬
recognition or when the continuing involvement approach applies, financial guarantee contracts
issued by the Company, and commitments issued by the Company to provide a loan at below-market
interest rate are measured in accordance with the specific accounting policies set out below.
Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is either contingent
consideration recognized by the Company as an acquirer in a business combination to which Ind AS
103 applies or is held for trading or it is designated as at FVTPL.
A financial liability is classified as held for trading if:
• it has been incurred principally for the purpose of repurchasing it in the near term; or
• on initial recognition it is part of a portfolio of identified financial instruments that the Company
manages together and has a recent actual pattern of short-term profit-taking; or
• it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading or contingent consideration recognized
by the Company as an acquirer in a business combination to which Ind AS 103 applies, may be
designated as at FVTPL upon initial recognition if:
• such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise;
• the financial liability forms part of a group of financial assets or financial liabilities or both, which is
managed and its performance is evaluated on a fair value basis, in accordance with the
Company's documented risk management or investment strategy, and information about the
grouping is provided internally on that basis; or
• it forms part of a contract containing one or more embedded derivatives, and Ind AS 109 permits
the entire combined contract to be designated as at FVTPL in accordance with Ind AS 109.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re¬
measurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates
any interest paid on the financial liability and is included in the ‘Other income' line item.
However, for non-held-for-trading financial liabilities that are designated as at FVTPL, the amount of
change in the fair value of the financial liability that is attributable to changes in the credit risk of that
liability is recognized in other comprehensive income, unless the recognition of the effects of changes
in the liability's credit risk in other comprehensive income would create or enlarge an accounting
mismatch in profit or loss, in which case these effects of changes in credit risk are recognized in profit
or loss. The remaining amount of change in the fair value of liability is always recognized in profit or
loss. Changes in fair value attributable to a financial liability's credit risk that are recognized in other
comprehensive income are reflected immediately in retained earnings and are not subsequently
reclassified to profit or loss.
Gains or losses on financial guarantee contracts and loan commitments issued by the Company that
are designated by the Company as at fair value through profit or loss are recognized in profit or loss.
Financial liabilities subsequently measured at amortized cost
Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at
amortized cost at the end of subsequent accounting periods. The carrying amounts of financial
liabilities that are subsequently measured at amortized cost are determined based on the effective
interest method. Interest expense that is not capitalized as part of costs of an asset is included in the
‘Finance costs' line item. The effective interest method is a method of calculating the amortized cost of
a financial liability and of allocating interest expense over the relevant period. The effective interest
rate is the rate that exactly discounts estimated future cash payments (including all fees and points
paid or received that form an integral part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the financial liability or (where appropriate) a
shorter period, to the gross carrying amount on initial recognition.
Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in
accordance with the terms of a debt instrument.
Financial guarantee contracts issued by the Company are initially measured at their fair values and, if
not designated as at FVTPL, are subsequently measured at the higher of:
• the amount of loss allowance determined in accordance with impairment requirements of Ind AS
109; and
• the amount initially recognized less, when appropriate, the cumulative amount of income
recognized in accordance with the principles of Ind AS 115.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset the recognized amounts and there is an intention to
settle on a net basis, to realize the assets and settle the liabilities simultaneously.
Derivatives and hedge accounting
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently re-measured at their fair value. The method of recognising the resulting gain or loss
depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the
item being hedged.
The Company designates certain derivatives as either:
i) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge);
ii) hedges of a particular risk associated with a recognised asset or liability or a highly probable
forecast transaction (cash flow hedge); or
The Company documents at the inception of the transaction the relationship between hedging
instruments and hedged items, as well as its risk management objectives and strategy for undertaking
various hedging transactions. The Company also documents the nature of the risk being hedged and
how the Company will assess whether the hedging relationship meets the hedge effectiveness
requirements (including its analysis of the sources of hedge ineffectiveness and how it determines the
hedge ratio).
The full fair value of a hedging derivative is classified as a non-current financial asset or financial
liability when the residual maturity of the derivative is more than 12 months and as a current financial
asset or financial liability when the residual maturity of the derivative is less than 12 months.
Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are
recorded in the statement of profit and loss, together with any changes in the fair value of the hedged
item that are attributable to the hedged risk.
Hedge accounting is discontinued when the Company revokes the hedging relationship, when the
hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge
accounting. The fair value adjustment to the carrying amount of the hedged item arising from the
hedged risk is amortised to the statement of profit and loss from that date.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash
flow hedges is recognised in other comprehensive income and accumulated under the heading cash
flow hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in
the statement of profit and loss.
Amounts previously recognised in other comprehensive income and accumulated in equity are
reclassified to the statement of profit and loss in the periods when the hedged item affects the
statement of profit and loss, in the same line as the recognised hedged item. However, when the
hedged forecast transaction results in the recognition of a non-financial asset or a non-financial
liability, the gains and losses previously recognised in other comprehensive income and accumulated
in equity are transferred from equity and included in the initial measurement of the cost of the non¬
financial asset or non-financial liability.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or
exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other
comprehensive income and accumulated in equity at that time remains in equity and is recognised
when the forecast transaction is ultimately recognised in the statement of profit and loss. When a
forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is
recognised immediately in the statement of profit and loss. However, if there is a loss and an entity
expects that all or a portion of that loss will not be recovered in one or more future periods, it shall
immediately reclassify the amount that is not expected to be recovered into profit or loss as a
reclassification adjustment.
Reclassification
The Company determines classification of financial assets and liabilities on initial recognition. After
initial recognition, no reclassification is made for financial assets which are equity instruments and
financial liabilities. For financial assets which are debt instruments, a reclassification is made only if
there is a change in the business model for managing those assets. Changes to the business model
are expected to be infrequent. The management determines change in the business model as a result
of external or internal changes which are significant to the Company's operations. A change in the
business model occurs when the Company either begins or ceases to perform an activity that is
significant to its operations. If the Company reclassifies financial assets, it applies the reclassification
prospectively from the reclassification date which is the first day of the immediately next reporting
period following the change in business model. The Company does not restate any previously
recognized gains, losses (including impairment gains or losses) or interest.
De-recognition of financial liabilities
The Company de-recognizes financial liabilities when, and only when, the Company's obligations are
discharged, cancelled or have expired. An exchange between with a lender of debt instruments with
substantially different terms is accounted for as an extinguishment of the original financial liability and
the recognition of a new financial liability. Similarly, a substantial modification of the terms of an
existing financial liability (whether or not attributable to the financial difficulty of the debtor) is
accounted for as an extinguishment of the original financial liability and the recognition of a new
financial liability. The difference between the carrying amount of the financial liability de-recognized
and the consideration paid and payable is recognized in profit or loss.
3.19 Recent accounting pronouncements
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended
31st March, 2025, MCA has notified Ind AS - 117 Insurance Contracts and amendments to Ind AS 116 -
Leases, relating to sale and leaseback transactions, applicable to the Company w.e.f. 1st April, 2024. The
Company has reviewed the new pronouncements and based on its evaluation has determined that it
does not have any impact in its standalone financial statements.
5.1 During the year, the Company made an additional investment in the WOS by way of conversion of outstanding
unsecured loans given to the WOS amounting to Rs. 2,236.80 Lakhs (equivalent USD 26.90 Lakhs) into 224,167
equity shares of WOS at an issue price of Rs. 997.83 per equity share (equivalent to USD 12 per equity share).
5.2 Based on the Company's assessment, aggregate impairment provision made upto 31st March, 2025 (Previous year :
Rs. 810 Lakhs) of Rs. 810 Lakhs is considered as adequate in regard to investment in wholly owned subsidiary
(WOS) and no additional provision is required in the current year. In view of the management, considering the long
term and strategic nature of investment, the balance carrying value of investment would yield the required benefits.
5.3 During the previous year, WOS has regularized the compliance in regard to issue of equity shares against the
contribution made in the past period.
9.1 No trade receivables are due from directors or other officers of the Company either severally or jointly with any other
person. Rs. 1.16 Lakhs (Previous year : Rs. 0.31 Lakhs) is receivable from the WOS having three common directors
and from the Step Down Subsidiary (SDS) of Rs. 1,130.34 Lakhs having three common directors (Previous year : Rs
1,486.49 Lakhs)
9.2 For details of outstanding receivables from related parties. (refer note 39.3)
9.3 Trade receivables are non - interest bearing and are generally on terms of 30 to 270 days.
9.4 Trade receivable includes export bills aggregating to Rs. Nil (Previous year : Rs. 172.19 Lakhs) purchased/
discounted by the bank but pending realisation as on the date of the Balance Sheet & disclosed under working
capital (short term borrowings). The Company has transferred the relevant receivables to the discounting bank in
exchange for cash. However, the Company has retained the late payment and credit risk.
9.5 Refer note 46 for policy on expected credit loss.
9.6 The Company has registered under the Micro, Small and Medium Enterprises Development Act, 2006 [MSMED Act].
The relevant provisions in respect of receivable are applicable to the Company.
In this regard, the Company has filed appeal before tax authorities. Future cash outflows, if any, in respect of the
above is determinable only on disposal of appeal. In the view of the management, the possibility of liability devolving
on the Company in this case is remote.
(C) Claims made by the ex-employees whose services have been terminated in earlier years are not acknowledged as
debt. The matters are frivolous and are disputed under various forums. However, in the opinion of the management,
these claims are not tenable. The possibility of any liability devolving on the Company is remote and hence, no
disclosure as contingent liability is considered necessary.
36. Capital and other commitments
(i) Capital commitment for tangible assets (net of advance paid) - Rs.269.71 Lakhs (Previous year : Rs. 1,097.68
Lakhs) and for intangible assets (net of advance paid) - Nil (Previous year : Nil).
(ii) The Company had imported machinery under the export promotion capital goods (EPCG) scheme to utilise the
benefit of a zero customs duty rate which were subject to future exports. Pending export obligations at year-end
aggregate to Rs. Nil (Previous year Rs. 84.71 Lakhs). (Also, refer note 22.1). The Company is in process of
redemption of such licenses whose export obligations are fully completed.
(iii) The Company's intention is to continue to provide financial support to its subsidiaries - Pradeep Metals Limited
Inc. (WOS) and Dimensional Machine Works, LLC (SDS).
37. Borrowings secured against current assets
During the year, the Company has taken borrowings from a bank on the basis of security of current assets.
Discrepancies in quarterly returns or statements of current assets filed by the Company to bank with books of
account which are not material (0.13% on average basis) are as mentioned below:
(ii) Fair value hierarchy
The financial instruments are categorized into three levels based on the inputs used to arrive at fair value
measurements as described below:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: Valuation techniques for which lowest level input that is significant to the fair value measurement is
directly or indirectly observable;
Level 3: Valuation techniques for which lowest level input that is significant to the fair value measurement is
directly or indirectly unobservable;
The following tables categorise the financial assets and liabilities held at fair value by the valuation methodology
applied in determining their fair value.
Determination of fair values: The following are the basis of assumptions used to estimate the fair value of financial
assets and liabilities that are measured at fair value.
Derivative instruments : For forward contracts, future cash flows are estimated based on forward exchange rates
(from observable forward exchange rates at the end of the reporting period) and contract forward exchange rates,
discounted at a rate that reflects the credit risk of respective counterparties.
43. Significant estimates and assumptions
The preparation of the Company’s standalone financial statements requires management to make estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying
disclosures, including the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in
future periods.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date,
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year, are described below. The Company based its assumptions and estimates on parameters
available when the standalone financial statements were prepared. Existing circumstances and assumptions about
future developments, however, may change due to market changes or circumstances arising that are beyond the
control of the Company. Such changes are reflected in the assumptions when they occur.
a) Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If
any indication exists, or when annual impairment testing for an asset is required, the Company estimates the
asset’s recoverable amount. An asset's recoverable amount is the higher of an asset’s or (Cash Generating
Unit) CGU’s fair value less costs of disposal and its value in use. It is determined for an individual asset, unless
the asset does not generate cash inflows that are largely independent of those from other assets or groups of
assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model is used. These calculations involves use of
significant estimates and assumptions which includes turnover and earnings multiples, growth rates and net
margins used to calculate projected future cash flows, risk-adjusted discount rate, future economic and market
conditions.
b) Measurement of defined benefit plan & other long term benefits
The cost of the defined benefit gratuity plan/other long term benefits and the present value of the gratuity
obligation/other long term benefits are determined using actuarial valuations. An actuarial valuation involves
making various assumptions that may differ from actual developments in the future. These include the
determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved
in the valuation and its long-term nature, a defined benefit obligation/other long term benefits is highly sensitive
to changes in these assumptions. All assumptions are reviewed at each reporting date. The cost of the defined
benefit gratuity plan and other long term benefit and the present value of the gratuity obligation and leave benefit
are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may
differ from actual developments in the future. These include the determination of the discount rate, future salary
increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a
defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at
each reporting date.
The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change
only at interval in response to demographic changes. Future salary increases and gratuity increases are based
on management policy for increase in basic salary.
c) Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be
measured based on quoted prices in active markets, their fair value is measured using valuation techniques
including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable
markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair
values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in
assumptions about these factors could affect the reported fair value of financial instruments.
d) Impairment of financial assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected loss
rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment
calculation based on industry practice, the Company’s past history and existing market conditions as well as
forward looking estimates at the end of each reporting period. The impairment provisions for financial assets are
based on assumptions about risk of default and expected loss rates. The Company uses judgment in making
these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history,
existing market conditions as well as forward looking estimates at the end of each reporting period.
e) Income tax and deferred tax
Provision for tax liabilities require judgements on the interpretation of tax legislation, developments in case law
and the potential outcomes of tax audits and appeals which may be subject to significant uncertainty. Therefore
the actual results may vary from expectations resulting in adjustments to provisions, the valuation of deferred tax
assets, and therefore the tax charge in the statement of profit and loss. Deferred tax assets are recognised only
to the extent that it is probable that future taxable profit will be available against which such deferred tax assets
can be utilized.
f) Provision for inventories
Management reviews the inventory age listing on a periodic basis. This review involves comparison of the
carrying value of the aged inventory item with the respective net realisable value. The purpose is to ascertain
whether an allowance is required to be made in the financial statements for any obsolete and slow-moving items.
Management is satisfied that adequate allowance for absolute and slow-moving/non-moving inventories has
been made in the financial statements.
44. Foreign currency exchange rate risk:
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates
relates primarily to the Company’s export revenue. The Company cover its foreign currency risk by booking forward
contract against exports receivables and confirmed export sales orders. The Company also avails bill discounting
facilities in respect of export receivables.
Since a major part of the Company’s revenue is in foreign currency and major part of the costs are in Indian Rupees,
any movement in currency rates would have impact on the Company’s performance. Consequently, the overall
objective of the foreign currency risk management is to minimize the short term currency impact on its revenue and
cash-flow in order to improve the predictability of the financial performance.
The major foreign currency exposures for the Company are denominated in USD. Additionally, there are
transactions which are entered into in other currencies and are not significant in relation to the total volume of the
foreign currency exposures. The Company hedges export trade receivables (particularly USD and Euro) upto a
maximum of 12 months forward based on historical trends. Hedge effectiveness is assessed on a regular basis.
The following table sets forth information relating to foreign currency exposure from USD, EUR and GBP (which are
not material) form non-derivative financial instruments:
The Company’s principal financial liabilities comprise loans and borrowings, trade payables and financial guarantee
contracts. The main purpose of these financial liabilities is to finance the Company’s operations and finance loans
taken by WOS. The Company’s principal financial assets include loans, trade and other receivables and cash and
cash equivalents that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees
the management of these risks. The Company’s senior management consists of Risk Management Committee
(RMC) that advises on financial risks and the appropriate financial risk governance framework for the Company. The
RMC provides assurance that the Company’s financial risk activities are governed by appropriate policies and
procedures and that financial risks are identified, measured and managed in accordance with the Company’s
policies and risk objectives. It is the Company’s policy that no trading in derivatives for speculative purposes may be
undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are
summarised as below.
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price
risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and
borrowings and deposits.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates
primarily to the Company’s long-term debt and short-term debt obligations with floating interest rates. Further, the
Company also avails subvention benefits under MSMED, Act.
Interest rate sensitivity
The Company’s total interest cost the year ended 31st March, 2025 was Rs. 560.36 Lakhs and for year ended 31st
March, 2024 was Rs. 484.68 Lakhs. The following table demonstrates the sensitivity to a reasonably possible
change in interest rates on that portion of loans and borrowings affected, with all other variables held constant, the
Company’s profit before tax is affected through the impact on floating rate borrowings, as follows:
The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable
market environment.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates
relates primarily to the Company’s export revenue.
The Company covers its foreign currency risk by budgeting exports sales & repeat orders from its overseas
customers and the Company books forward contract against exports receivable. The Company also avails bill
discounting facilities in respect of export receivables
Commodity price risk
The Company is affected by the price volatility of certain commodities. Its operating activities require the on-going
purchase of steel. Due to significant volatility of the price of the steel, the Company has agreed with its customers for
pass-through of increase/decrease in prices of steel. There may be lag effect in case of such pass-through
arrangement.
Commodity price sensitivity
The Company revises its prices to customers on quarterly basis by considering average raw materials prices
prevailing in the previous quarter implying it passes through any increase in prices thereby minimising the impact on
the profit and loss and equity of the Company.
Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade
receivables) and other receivables and deposits, foreign exchange transactions and other financial instruments.
Expected credit loss and Trade receivables
Customer credit risk is managed by the Company’s established policy, procedures and control relating to customer
credit risk management. Further, the Company’s customers includes companies having long standing relationship
with the Company. Outstanding customer receivables are regularly monitored and reconciled. Two customers
accounted for more than 10% of the total receivables as at 31st March, 2025 (Three customer for 31st March, 2024).
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a
large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively.
The calculation is based on historical data, past trend and standard percentage norms. The maximum exposure to
credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 12. The
Company does not hold collateral as security . Majority of the export receivable are covered under the insurance
cover. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers
are located in several jurisdictions and industries and operate in largely independent markets. No allowance has
been made for expected credit loss.
Liquidity risk
As per the Company’s policy, there should not be concentration of repayment of loans in a particular financial year. In
case of such concentration of repayment, the Company evaluates the option of refinancing entire or part of
repayments for extended maturity. The Company assessed the concentration of risk with respect to refinancing its
debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt
maturing within 12 months can be rolled over with existing lenders and the Company.
For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and
all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s
capital management is to maximise the shareholder value.
The Company manages its capital to ensure that it will be able to continue as a going concern so, that they can
continue to provide returns for the shareholders and benefits for other stakeholders and maintain an optimal capital
structure to reduce cost of capital. The Company manages its capital structure and make adjustments to, in light of
changes in economic conditions, and the risk characteristics of underlying assets. In order to achieve this overall
objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial
covenants attached to the borrowings that define the capital structure requirements.
Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. The ratio is
calculated as net debt divided by equity. Net debt is calculated as total borrowing (including current and non-current
terms loans as shown in the Balance Sheet).
In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure
that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure
requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and
borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in
the current period. No changes were made in the objectives, policies or processes for managing capital during the
years ended 31st March, 2025 and 31st March, 2024.
47. Segmental disclosure
The Group is primarily engaged in manufacturing of closed die steel forging & processing and generating power
from wind turbine generator and solar power generating system.
iii) Reliance on major customers: No customer represents more than 10% of the total revenue. Total revenue from
this major customer amounts to Rs. Nil . In case of previous year, one customer represented more than 10% of
total revenue whose revenue amounted to Rs. 2,422.11 Lakhs.
Notes:
a) The operating segments have been reported in a manner consistent with the internal reporting provided to the
Corporate Management Committee, which is the Chief Operating Decision Maker.
b) The business segment comprise the following:
a) Closed Die Forging and Processing
b) Power Generation
c) The geographical information considered for disclosure are: Sales within India and Sales outside India
18. Hedge Accounting
The Company has managed the foreign exchange risk with appropriate hedging activities in accordance with
policies of the Company. The Company’s manages currency risk as per trends and experiences. The Company
uses forward exchange contracts to hedge against its foreign currency exposures relating to export receivables.
The Company does not enter into any derivative instruments for trading or speculative purposes.
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective
effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging
instrument, including whether the hedging instrument is expected to offset changes in cash flows of hedged items.
If the hedge ratio for risk management purposes is no longer optimal but the risk management objective remains
unchanged and the hedge continues to qualify for hedge accounting, the hedge relationship will be rebalanced by
adjusting either the volume of the hedging instrument or the volume of the hedged item so that the hedge ratio aligns
with the ratio used for risk management purposes.
50.1 Since the Company has spent in excess of the amount which was required to be spent for 2024-25, the Company is
entitled to carry forward the amount spent of Rs. 0.15 Lakhs (Previous Year - Rs. 0.23 Lakhs) to subsequent three
financial years respectively which can be set off against CSR obligations of these years. However, for accounting
purpose, cumulative excess amount spent of Rs. 0.15 Lakhs (Previous Year - Rs.0.23 Lakhs) is not considered as
prepaid expenses.
51. Defined benefits and other long term benefit plans
(a) Gratuity plan
Funded scheme
The Company has a defined benefit gratuity plan for its employees. The gratuity plan is governed by the payment of
Gratuity Act, 1972. Under the Act, every employee who has completed five years of service is entitled to specific
benefit. The level of benefits provided on the employee's length of service and salary retirement age. Every
employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last
drawn) for each completed year of service as per the provisions of the payment of Gratuity Act, 1972. The scheme is
funded with insurance company in the form of a qualifying insurance policy.
Risk exposure and asset-liability matching
Provision of a defined benefit scheme poses certain risks, some of which are detailed hereunder, as companies take
on uncertain long term obligations to make future benefits payments.
I. Liability risks
(a) Asset-liability mismatch risk
Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching
duration with the defined benefit liabilities, the Company is successfully able to neutralize valuation swings
caused by interest rate movements.
b) Discount rate risk
Variations in the discount rate used to compute the present value of the liabilities may seem small, but in
practice have a significant impact on the defined benefit liabilities.
c) Future salary escalation and inflation risk
Since price inflation and salary growth are linked economically, they are combined for disclosure purposes.
Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of
liabilities especially unexpected salary increase provided at the management's discretion may lead to
uncertainties in estimating this increasing risk.
II. Asset Risks
All plan assets are maintained in a trust fund managed by a public sector insurer viz. LIC of India. LIC has a
sovereign guarantee and has been providing consistent and competitive returns over the years. The Company
has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company
has no control over the management of funds but this option provides a high level of safety for the total corpus. A
single account is maintained for both the investment and claim settlement and hence 100% liquidity is ensured.
The following table summarises the components of net benefit expense recognised in the statement of profit and
loss and the funded status and amounts recognised in the Balance Sheet for the gratuity plan. The principal
assumptions used in determining gratuity for the Company's plan is shown below:
53. Cash flow statement related
53.1 Aggregate outflow on account of direct taxes paid (net of refund) is Rs. 755.62 Lakhs (Previous year : Rs. 524.99
Lakhs).
53.2 Net cash inflow from operating activity netted off with Corporate Social Responsibility (CSR) expenditure of Rs.
46.60 lakhs (Previous year : Rs. 40.25 Lakhs) (Refer note 50).
53.3 Disclosure as required by Ind AS 7
Reconciliation of liabilities arising from financing activities
56. Subsequent Events: There are no significant subsequent events that would require adjustments or disclosures in
the financial statement between the Balance Sheet date and the date of signing of accounts.
57. As on 31st March, 2025, the Company has not been declared wilful defaulter by any bank/ financial institution or
other lender.
58. The Company is not engaged in the business of trading or investing in crypto currency or virtual currency and hence
no disclosure is required.
59. The Company has not advanced any funds or loaned or invested by the Company to or in any other person(s) or
entities, including foreign entities (“Intermediaries”), with the understanding that the intermediary shall whether
directly or indirectly lend or invest in other persons or entities identified in any manner by or on behalf of the
Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of ultimate beneficiaries.
The Company has not received any funds from any person(s) or entities including foreign entities (“Funding
Parties”) with the understanding that such Company shall whether, directly or indirectly, lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries)
or provide guarantee, security or the like on behalf of the Ultimate beneficiaries.
60. No proceedings have been initiated or are pending against the Company as on 31st March, 2025 for holding any
benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.
61. The Company does not have any transaction with companies struck off under section 248 of Companies Act, 2013
or section 560 of Companies Act, 1956 and hence no disclosure is required.
62. The Board of Directors of the Company at their Meeting held on 3rd March, 2025, have approved the Scheme of
Amalgamation of Nami Capital Private Limited (“NCPL” or “Transferor Company”) with Pradeep Metals Limited
("PML" or "Transferee Company") and their respective Shareholders (“Scheme”) under sections 230 to 232 read
with Section 66 and other relevant provisions of the Companies Act, 2013. The Company has filed an application
with BSE Limited under Regulation 37 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, seeking its in-principal approval / no-objection to the proposed Scheme. The Scheme is subject to receipt of
necessary statutory and regulatory approvals, including the approval of the Hon’ble National Company Law
Tribunal, Mumbai Bench, and such other approvals as may be required under applicable laws.
Notes referred to herein above form an integral part of the standalone financial statements.
As per our report of even date attached
For N. A. Shah Associates LLP For and on behalf of the Board of Directors of
Chartered Accountants Pradeep Metals Limited
Firm Registration No.116560W/W100149
Bhavin Kapadia Pradeep Goyal Neeru Goyal
Partner Chairman and Managing Director Director
Membership No. 118991 DIN: 00008370 DIN: 05017190
Place: Mumbai Place: Mumbai
Date: 22nd May, 2025 Date: 22nd May, 2025
Place: Mumbai Abhishek Joshi Kavita Choubisa Ojha
Date: 22" IVI^ 2025 Company Secretary Chief Financial Officer
Membership No. 64446 PAN: ATTPC7818E
Place: Mumbai Place: Mumbai
Date: 22nd May, 2025 Date: 22nd May, 2025
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