Pradeep Metals Ltd. — Interim / Quarterly Report 2021

Aug 13, 2021

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13[th] August, 2021

The Secretary BSE Limited P J Towers, Dalal Street, Mumbai- 400 001.

Dear Sir,

Sub: Outcome of Board Meeting dated 13[th] August, 2021:

Scrip Code: 513532

This is in continuation to our letter dated 2[nd] August, 2021 and pursuant to Regulation 33, 30 and other applicable regulations, if any, of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations).

We wish to state that the Board of Directors of the Company in its meeting held today has interalia:

Has considered and approved the Un-Audited Financial Results of the Company on Standalone and Consolidated basis for the quarter ended 30[th] June, 2021 along with Limited Review Reports thereon.

A copy of the said results, notes thereto and Auditors Limited Review Report thereon is enclosed for your records.

The meeting of the Audit Committee/Board of Directors of the Company commenced at 4.30 p.m. and concluded at 8.55 p.m.

Please take the above information on record.

For Pradeep Metals Limited

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Nivedita Nayak Company Secretary & Compliance Officer FCS: 8479

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Limited review report on quarterly unaudited standalone financial results of Pradeep Metals Limited pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended)

To The Board of Directors of Pradeep Metals Limited

1. We have reviewed the accompanying statement of unaudited standalone financial results (“the Statement”) of Pradeep Metals Limited (“the Company”) for the quarter ended 30[th] June, 2021, attached herewith, being submitted by the Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (“Listing Regulations”).

Management responsibility

1. The Statement which is the responsibility of the Company's Management and approved by the Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standard 34 "Interim Financial Reporting" ("Ind AS 34"), prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder and other accounting principles generally accepted in India.

2. This Statement includes unaudited results for the quarter ended 31[st] March, 2021 being the derived figures between the audited annual figures in respect of the financial year ended 31[st] March, 2021 and the published unaudited figures for the nine-months ended 31[st] December, 2020 which were subjected to a limited review.

Auditor’s responsibility

1. Our responsibility is to issue report on this Statement based on our review.

We conducted our review in accordance with the Standard on Review Engagements (SRE) 2410 ‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity’, issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and accordingly, we do not express an audit opinion.

Conclusion

1. Based on our review conducted as above, nothing has come to our attention that causes us to believe that the accompanying Statement of unaudited standalone financial results, prepared in accordance with recognition and measurement principles laid down in Ind AS 34, prescribed under Section 133 of the Companies Act, 2013, read with relevant rules issued thereunder and other recognized accounting practices and policies, has not disclosed the information required to be disclosed in terms of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement.

Emphasis of matter

1. Reference is invited to note 3 of the notes to financial results. In view of accumulated losses in the wholly owned subsidiary (WOS) and step down subsidiary (SDS), expected business impact of COVID 19 and provision for impairment of goodwill by SDS, the Company carried out impairment assessment in respect of its investment in WOS and loans granted to WOS. Based on such assessment, the Company has made additional provision for impairment of Rs. 27 lakhs in the value of its investment in WOS during the quarter ended 30[th] June 2021 (Provision for impairment made of Rs.16 lakhs for the quarter ended 31st March 2021, Rs.57 lakhs for the quarter ended 30th June, 2020 and Rs.270 lakhs for the year ended 31st March 2021 and aggregate impairment provision upto 30[th] June, 2021 is Rs.567 lakhs). In the view of management, considering the long term and strategic nature of investment, the balance carrying value of

investment in WOS would yield the required benefits and the loan given to the WOS is considered as fully recoverable.

Our opinion is not modified in respect of above matter. Above matter was reported in our reports on the audited / unaudited standalone financial results of the previous years and earlier quarters and our opinion was not modified.

For N. A. Shah Associates LLP

Chartered Accountants Firm’s Registration No. 116560W/W100149

Digitally signed by MILAN NAVIN MODY DN: c=IN, o=Personal, title=7027, MILAN pseudonym=c14c7df51e8efaf846ab7b462457ab0088b67cd4, 2.5.4.20=0e3e9555c7d43306842716cf5b463cb460b64f96 58d8d8e453272ccde090e68f, postalCode=400028, NAVIN MODY st=MAHARASHTRA, serialNumber=b53fc37c6a6ccc5435460835a4d6b0fe9c18f4b228ea4b35b24166dbb248fbc3, cn=MILAN NAVIN MODY Date: 2021.08.13 18:29:05 +05'30'

Milan Mody

Partner Membership number: 103286 UDIN: 21103286AAAAFN4856

Place: Mumbai Date: 13[th] August, 2021

Limited Review Report on quarterly unaudited consolidated financial results of Pradeep Metals Limited pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended)

To The Board of Directors of Pradeep Metals Limited

1. We have reviewed the accompanying statement of unaudited consolidated financial results of Pradeep Metals Limited (‘the Holding Company’) and its Wholly Owned Subsidiary (WOS) and Step Down Subsidiary (SDS) (collectively referred to as ‘the Group’), for the quarter ended 30[th] June 2021, (‘the Statement’), being submitted by the Holding Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (“Listing Regulations”).

Management’s responsibility

2. The Statement, which is the responsibility of the Holding Company’s Management and approved by the Holding Company’s Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34 “Interim Financial Reporting” (“Ind AS 34”), prescribed under Section 133 of the Companies Act, 2013, and other accounting principles generally accepted in India.

3. The Statement includes unaudited results for the quarter ended 31st March, 2021 being the derived figures between the audited annual figures in respect of the financial year ended 31st March, 2021 and the published unaudited figures for the nine months ended 31st December, 2020 which were subjected to a limited review.

Auditor’s responsibility

4. Our responsibility is to issue report on the Statement based on our review.

We conducted our review in accordance with the Standard on Review Engagements (SRE) 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”, issued by the Institute of Chartered Accountants of India. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We also performed procedures in accordance with the circular issued by the SEBI under Regulation 33 (8) of the Listing Regulations, to the extent applicable.

5. These unaudited consolidated financial results include results of the following entities:

Name of the Entity	Relationship
Pradeep Metals Limited Inc., USA	Wholly Owned Subsidiary (WOS)
Dimensional Machine Works LLC, USA	Step Down Subsidiary (SDS)

6. Conclusion

Based on our review conducted and procedures performed as stated in paragraph 3 above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standard and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of the Listing Regulations (as amended), including the manner in which it is to be disclosed, or that it contains any material misstatement.

7. Emphasis of Matters

Reference is invited to note 8(b)(i) & (ii) of the Statement. In respect of SDS;

• a) The management has carried out impairment assessment in respect of goodwill and tangible assets considering the continuing losses and assessment of financial impact on account of Covid-19 on future cash flows. Based on such assessment, the SDS has made additional provision for impairment of Rs. 27 lakhs for goodwill during the quarter ended 30[th] June 2021 (Provision for impairment made of Rs.16 lakhs for the quarter ended 31st March 2021, Rs.57 lakhs for the quarter ended 30th June, 2020 and Rs.270 lakhs for the year ended 31st March 2021 and aggregate impairment provision upto 30[th] June 2021 is Rs.567 lakhs). Management is of the view that expected growth in the demand of the SDS’s products and other steps taken by the management, will generate sufficient cash flows to cover balance carrying value of goodwill and the carrying value of the tangible assets as at 30[th] June 2021.

• b) (i) Ageing of slow/non-moving items of inventories is not available from the system. Management is of the view that there is demand for the SDS's products and these inventories have realizable value greater than cost. Based on the management estimate, provision is made wherever considered necessary. We have relied on the management for the demand estimate and expected price realization. (ii) Further, the improvement in the systems and processes of maintaining the inventory records is in process.

Our conclusion is not modified in respect of above matters. The matters in paragraph (a) and (b) above were reported in our reports on the audited / unaudited standalone financial results of the previous years and earlier quarters and our opinion was not modified.

For N. A. Shah Associates LLP Chartered Accountants Firm’s Registration No. 116560W/W100149 MILAN NAVIN MODY Digitally signed by MILAN NAVIN MODY DN: c=IN, o=Personal, title=7027, pseudonym=c14c7df51e8efaf846ab7b462457ab0088b67cd4, 2.5.4.20=0e3e9555c7d43306842716cf5b463cb460b64f9658d8d8e453272ccde090e68f, postalCode=400028, st=MAHARASHTRA, serialNumber=b53fc37c6a6ccc5435460835a4d6b0fe9c18f4b228ea4b35b24166dbb248fbc3, cn=MILAN NAVIN MODY Date: 2021.08.13 18:29:30 +05'30'

Milan Mody

Partner Membership number: 103286 UDIN: 21103286AAAAFO6778

Place: Mumbai Date: 13[th] August, 2021