The Directors are pleased to present the Thirty Fifth Annual Report together with the Audited Financial Statements for the year ended 31^st March, 2018.

1. FINANCIAL RESULTS

The Company's standalone financial performance for the year ended 31^st March, 2018 is summarized below:

(Rs. In Lakhs)

* Figures for the year ended 31^st March 2017 have been regrouped as per Indian Accounting Standards (IND-AS)

2. RESULTS OF OPERATIONS AND THE STATE OF COMPANY’S AFFAIRS

Your Company achieved Revenues from Operations and Other Income (net of Excise Duty) of Rs. 14,459.84 lakhs during the financial year ended 31^st March, 2018, an increase of 17.20% over the previous year. Profit before taxes & prior period items for the year has increased by 50.44% and Profit after taxes by 59.07% during the year under review due to better recovery and cost controls.

Detailed analysis and future outlook of the Company's business are dealt in the Management Discussion and Analysis Report.

3. DIVIDEND

Considering the current market conditions and need to improve capital gearing, the Board of Directors thought it prudent not to recommend any Dividend for the financial year ended 31^st March, 2018.

4. TRANSFER TO RESERVES

No amount has been transferred to the General Reserve.

5. 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”), is presented in a separate section forming part of the Annual Report.

6. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company has one Wholly Owned Subsidiary namely Pradeep Metals Limited, Inc., Houston, USA (the WOS) and one Step-down Subsidiary namely Dimensional Machine Works, LLC, Houston, USA (the SDS). 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 warehousing and marketing the products manufactured by the Company, whereas the SDS is manufacturing components mainly for the Oil & Gas industry in USA. The total income of the WOS and the SDS was Rs. 2,147.45 lakhs and Rs. 1,796.58 lakhs for the current year as compared to Rs. 922.73 lakhs and Rs. 1,062.04 lakhs for the previous year, respectively. The combined loss before taxes of both the subsidiaries amounted to Rs. 336.17 lakhs in the year as compared to loss of Rs. 806.94 lakhs in the previous year.

The consolidated Income of the Company (net of Excise duty) is Rs.16,454.68 lakhs in the current year as compared to Rs.13,329.64 lakhs in the previous year,i.e. a growth of 23.44%. The consolidated Profit after taxes (but prior to allocation to minority interest) for the current year is Rs. 514.66 lakh as compared to loss of Rs 313.35 lakh in the previous year.

The WOS and the SDS are now performing better because of their inherent strength in terms of technology, development of new customers and products, timely deliveries and the satisfied customers.

The ongoing dispute between the WOS and erstwhile partner (holding 49% in the SDS) was settled out of court in current financial year. As per the settlement, the WOS acquired the 49% shareholding in the SDS from the erstwhile partner and the SDS became 100% subsidiary of the WOS retrospectively w.e.f. 27^th September, 2016. Accordingly, management of both the companies revised their financial statements for the earlier years and the resultant impact is described in Para 23 here-in-after.

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).

7. DEPOSITS

The Company has not invited or accepted any fixed deposits from the public and, as such, no amount of principal or interest was outstanding in respect thereof on the date of the Balance Sheet.

8. CREDIT RATING

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

9. SHARE CAPITAL

During the year under review, there was no change in the Company's Issued, Subscribed and Paid-up Equity Share Capital which consisted of 1,72,70,000 Equity Shares of Rs.10/- each as on 31^st March, 2018. The Company has issued only one class of Equity Shares and it has not issued shares with differential rights. The Company has not issued any Equity Shares under Sweat Equity Share Capital or Employee Stock Option Scheme and there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under any scheme.

10. DIRECTORS AND KEY MANAGERIAL PERSONNEL

At present, your Company has Eight (8) Directors consisting of Four (4) Independent Directors (of which one is an Additional Director), One (1) Executive Director and Three (3) Non-Executive Directors (including a Woman Director).

Re-appointment:

In accordance with the provision of Section 152(6) of the Companies Act, 2013 (“the Act”), Dr. Kewal Krishan Nohria (DIN: 00060015), Non-Executive, Non-Independent Director, retires by rotation at ensuing Annual General Meeting (AGM) and, being eligible, has offered himself for re-appointment. His background is given in the Corporate Governance Report, which forms part of this Report.

Cessation/Resignation:

- During the period under review, Mr. Raj Kumar Mittal resigned as a Director of the Company w.e.f. 29^th August, 2017 due to his personal reasons. The Board places on record its appreciation and gratitude for the valuable contribution by Mr. Raj Kumar Mittal during his tenure with the Company.

- Ms. Suchita Singh, Company Secretary and Compliance officer of the Company resigned w.e.f. 21^st February, 2018.

- Mr. Rakesh Agarwal, Chief Financial Officer of the Company resigned w.e.f. 12^th May, 2018.

Appointment:

- Based on the recommendation of Nomination and Remuneration Committee, the Board of Directors appointed Mr. Kartick Maheshwari (DIN: 07969734) as an Additional Director in the category as Non-Executive /Independent Director w.e.f.10^thNovember, 2017, in the casual vacancy caused due to resignation of Mr. Raj Kumar Mittal. Pursuant to the provisions of Section 161 of the Act, Mr. Kartick Maheshwari will hold office up to the date of the ensuing AGM. He has confirmed his eligibility and willingness to accept the office of Directorship of your Company, if appointed. Mr. Kartick Maheshwari holds a degree in Master in Law from University of Pennsylvania (Philadelphia) and BA, LLB (Hons) from National Law School of India University, Bangalore. He is a Member of Bar Association of West Bengal and a Partner at M/s. Khaitan & Co., a renowned firm of solicitors and advocates and represents private equity firms, sovereign wealth funds and corporate strategic investors. In the opinion of your Directors, the qualifications and rich experience of Mr. Kartick Maheshwari would be useful to your Company. It is, therefore, considered prudent that your Company should continue to avail the services of Mr. Kartick Maheshwari and the Board recommends that the proposed resolution relating to the appointment of Mr. Kartick Maheshwari as the Director of your Company be approved. Your Company has received a notice under Section 160 of the Act, proposing appointment of Mr. Kartick Maheshwari as an Independent Director of your Company.

- Consequent to the resignation of Mr. Rakesh Agarwal, Chief Financial Officer of the Company, Mr. Dilip Dalvi was appointed as the Deputy Chief Financial Officer of the Company w.e.f. 9^th May, 2018.

- Appointment of Company Secretary:

Consequent to the resignation of Ms. Suchita Singh, Company Secretary and Compliance Officer of the Company, Mr. Harshad Babade was appointed as Company Secretary and Compliance Officer of the Company w.e.f. 9^th May, 2018.

Pursuant to the provisions of Section 203 of the Act, Mr. Pradeep Goyal, Chairman and Managing Director, Mr. Dilip Dalvi, Deputy Chief Financial Officer and Mr. Harshad Babade, Company Secretary and Compliance officer are the Key Managerial Personnel of the Company as on the date of this Report.

11. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

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.

12. DIRECTORS’ RESPONSIBILITY STATEMENT

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, 2018, 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 affairs 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 sufficient 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.

13. DECLARATION BY INDEPENDENT DIRECTORS

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.

14. POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION ETC.

The Company has put in place appropriate policy on Directors' appointment and remuneration 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.

15. ANNUAL EVALUATION OF BOARD’S PERFORMANCE, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has carried out an annual performance evaluation of the working of its own performance, the Directors individually as well as evaluation of its Committees.

The Nomination and Remuneration Committee also reviewed the performance of Individual Directors, the Board as a whole, Committees of the Board and Chairman and Managing Director after taking into consideration feedback received from 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 to the Directors, taking into consideration the guidelines issued by SEBI. The feedback received from Directors were then consolidated and placed before the Committee / Board for its evaluation. The Directors expressed their satisfaction with the evaluation process.

16. CORPORATE GOVERNANCE AND VIGIL MECHANISM

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, 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 Reporting as required by Regulation 34(2) of the Listing Regulations is not applicable to your Company for the financial year ending 31^st March, 2018.

The Vigil Mechanism of the Company also incorporates a Whistle Blower Policy in terms of the Listing Regulations thereby establishing a vigil mechanism for 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: http://www.pradeepmetals.com/policies/.

17. RISKS

Your 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. The Risk Management Committee has been dissolved because of small size of the business w.e.f. 13^th May, 2017 and the Audit Committee currently looks into the Risk Management functions.

18. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board and the same has been hosted on the Company's website www.pradeepmetals.com.

The key philosophy of all CSR initiatives of the Company is guided by three core commitments of Scale, Impact and Sustainability. During the year, the Company has spent Rs.12.59 lakhs (about 74.98%) against the annual requirement of Rs. 16.79 lakhs for the year 2017-18 on CSR activities.

The Company has identified focus areas of engagement which have been enumerated in the Annual Report on CSR activities in Annexure D to this Report.

19. AUDIT COMMITTEE

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

20. AUDITORS AND AUDITORS’ REPORT

a. Statutory Auditors

Pursuant to the provisions of Section 139(1) of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, N. A. Shah Associates LLP (Registration No. 116560W/W100149), [formerly known as N A Shah Associates (Firm Registration No.116560W)] Chartered Accountants, were appointed in 32^nd Annual General Meeting (“AGM”) as the Statutory Auditors of the Company, for a term of 5 years. In terms of the provisions relating to Statutory Auditors forming part of the Companies Amendment Act, 2017, notified on 7^th May, 2018, ratification of appointment of Statutory Auditors is no more required. Accordingly, the Notice convening the ensuing AGM does not carry any resolution on ratification of appointment of Statutory Auditors. However, N. A. Shah Associates LLP has confirmed that they are eligible to continue as Statutory Auditors of the Company to audit the books of accounts of the Company for financial year ending 31^st March, 2019 and accordingly they will continue to be the Statutory Auditors of the Company for financial Year ending 31^st March, 2019.

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.

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 recommendation of Audit Committee, has re-appointed MKJ & Associates, Cost & Management Accountants, (Firm Registration No. 001352) as Cost Auditors to audit the cost accounts of the Company for financial year 2018-19 at a remuneration of Rs.1,25,000/- (plus applicable taxes and reimbursement of out of pocket expenses at actuals).

Pursuant to Section 148 of the Act, a resolution seeking Member's 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 FY 2016-17 was filed with Ministry of Corporate Affairs on 11^th September, 2017. No adverse comments have been made in the said Report.

c. Secretarial Auditors and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder, Shweta Gokarn & Co., Practicing Company Secretaries, Navi Mumbai (Certificate of Practice Number: 11001) were appointed as the Secretarial Auditors to conduct Secretarial Audit.

The Secretarial Auditors' Report for the financial year ended 31^st March, 2018 is annexed to this Report as Annexure E. No adverse comments have been made in the said Report.

The Board has also appointed Shweta Gokarn & Co. as Secretarial Auditors to conduct the Secretarial Audit of the Company for financial Year 2018-19.

21. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

During the financial year 2017-18, the Company has not made any investment in the Equity Share Capital of Pradeep Metals Limited Inc,(WOS).

The Company has given loan to Pradeep Metals Inc, USA (WOS) of USD 0.350 Mn and it has given Corporate Guarantee and created pari passu charge on its fixed assets (excluding Wind Mill) for securing ECB of USD 1.200 Mn raised by the WOS from Union Bank of India, Hong Kong Branch, during the financial year 2017-18.

22. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

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. During the year, the Company did not enter into any contract/ arrangement/ transaction with related parties, other than the WOS, 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 www.pradeepmetals.com .

The particulars as required under the Act are furnished in Annexure F (Form No. AOC-2) to this Report.

23. MATERIAL CHANGES AND COMMITMENTS

The ongoing dispute between the WOS holding 51% in the SDS and erstwhile partner (holding 49% shareholding in the SDS) was settled out of court in current financial year. As per the settlement, the WOS acquired the 49% shareholding in the SDS from the erstwhile partner and the SDS became 100% subsidiary of the WOS retrospectively w.e.f. 27^th September, 2016. Accordingly, management of the WOS and the SDS revised the financial statements for the earlier years. Consequently, the net reduction in profit by Rs. 83.83 lakhs (consisting of increase in profit on account of revision in statements of profit & loss account of the WOS & the SDS and reduction in profit on account of recomputation of allocation of costs to non-controlling interest and losses post acquisition of 49% shareholding) has been adjusted in opening ‘Other Equity' as on 1^st April, 2017 in consolidated financial results for the year ended 31^st March, 2018. Simultaneously, goodwill on acquisition has been recomputed by the SDS and it is reduced by Rs. 818.00 lakhs.

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

24. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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.

25. INTERNAL FINANCIAL CONTROL SYSTEM

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

26. SECRETARIAL STANDARDS

The Company has in place proper system to ensure compliance with the provisions of the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

27. HUMAN RESOURCES

The Company recognizes its human resources as one of its prime & 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 Staff Members remained very cordial throughout the year under review. As on 31^st March, 2018, the Company had 284 permanent employees at its manufacturing plants and administrative office at Rabale, Navi Mumbai, Maharashtra.

28. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

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 line 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, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

29. EXTRACT OF ANNUAL RETURN AS ON 31^st MARCH, 2018

Extract of Annual Return of the Company is annexed herewith as Annexure H to this Report.

30. BOARD MEETINGS HELD DURING THE FY 2017-18.

During the financial year 2017-18, Four (4) Board Meetings were held on 13^th May, 2017, 21^st August, 2017, 10^th November, 2017 and 12^th February, 2018, 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.

31. PROMOTER GROUP

The Promoter Group comprises of Mr. Pradeep Goyal, Mrs. Neeru Goyal, Rabale Engineering India Pvt. Ltd., and S. V. Shah Construction Services Pvt. Ltd. The Promoter Group's holding in the Company currently is 72.19% of the Company's paid up Equity Capital and there is no change as compared to the previous financial year.

32. PARTICULARS OF EMPLOYEES

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 draw salary in excess of the limits prescribed under the Act and hence, no particulars are given. 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 Shareholder interested in obtaining a copy of the same may write to the Company Secretary.

33. SPECIAL BUSINESS

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 proposals.

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

a. Appointment of Mr. Kartick Maheshwari as an Independent Director of the Company.

b. Re-appoint Dr. Kewal Krishan Nohria as Non-Executive Director of the Company, who retires by rotation at this AGM and who has attained the age of seventy-five years.

c. Continue the appointment of Mr. Suresh Gopal Vaidya as the Non-Executive Director of the Company, who has attained the age of seventy-five years

d. Continue the appointment of Mr. Suresh Gopal Vaidya as the Independent Director of the Company.

e. Approve remuneration of Cost Auditors for the financial year ending 31^st March, 2019.

34. GENERAL

Your 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 were no frauds 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.

35. ACKNOWLEDGEMENT

Your 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.

For and on Behalf of the Board of Directors

sd/-

Pradeep Goyal

Place: Navi Mumbai Chairman and Managing Director

Date: 9^th July, 2018 DIN: 00008370