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Pennar Industries Ltd.

BSE: 513228 Sector: Metals & Mining
NSE: PENIND ISIN Code: INE932A01024
BSE LIVE 15:51 | 18 Aug 59.60 0.90
(1.53%)
OPEN

58.70

HIGH

61.15

LOW

58.40

NSE 15:59 | 18 Aug 59.95 1.25
(2.13%)
OPEN

58.70

HIGH

61.00

LOW

58.25

OPEN 58.70
PREVIOUS CLOSE 58.70
VOLUME 477784
52-Week high 61.15
52-Week low 39.50
P/E 22.24
Mkt Cap.(Rs cr) 717
Buy Price 59.60
Buy Qty 482.00
Sell Price 0.00
Sell Qty 0.00
OPEN 58.70
CLOSE 58.70
VOLUME 477784
52-Week high 61.15
52-Week low 39.50
P/E 22.24
Mkt Cap.(Rs cr) 717
Buy Price 59.60
Buy Qty 482.00
Sell Price 0.00
Sell Qty 0.00

Pennar Industries Ltd. (PENIND) - Auditors Report

Company auditors report

Independent Auditor’s Report

To the Members of

PENNAR INDUSTRIES LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of PENNAR INDUSTRIES LIMITED("the Company") which comprise the Balance Sheet as at March 31 2016 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under and the Order under Section 143(11)of the Act.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to usthe aforesaid financial statements give the information required by the Act inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2016 and its Profit and its Cash Flow for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") as amended issued by the Central Government of India in terms ofsub-section (11) of section 143 of the Act we give in the "Annexure A" astatement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143 (3) of the Act we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books; c. The Balance Sheetthe Statement of Profit and Loss and the Cash Flow Statement dealt with by this report arein agreement with the books of account

d. In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

e. On the basis of written representations received from the directors as on March 312016 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2016 from being appointed as a director in terms of Section 164 (2) of theAct.

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

g. With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 and in ouropinion and to the best of our information and according to the explanations given to us:i. The Company has disclosed the impact of pending litigations as at 31st March 2016 onits financial position in its financial statements as referred to in note 17.1 30.3 tothe financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection fund by the Company.

FOR RAMBABU & Co.
Chartered Accountants
FRN: 002976S
Ravi Rambabu
Place: Hyderabad Partner
Date: 20.05.2016 M.No.018541

Annexure "A" to the Independent Auditors’ Report

Referred to in paragraph 1 under the heading ‘Report on Other Legal &Regulatory Requirement’ of our report of even date to the financial statements of theCompany for the year ended March 31 2016: i) (a) The Company has maintained properrecords showing full particulars including quantitative details and situation of fixedassets; (b) The Company has a regular program of physical verification of its fixed assetsby which all fixed assets are verified in a phased manner. In our opinion the periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets. According to the information and explanations given to us nomaterial discrepancies were noticed on such verification. ii) In respect of Inventories:a) As explained to us the inventories except the goods in transit and stock lying withthe third parties have been physically verified during the year by the management atreasonable intervals. b) In our opinion and according to the information and explanationsgiven to us the procedures of physical verification of inventories followed by themanagement were reasonable and adequate in relation to the size of the company and natureof its business. c) In our opinion and according to the information and explanations givento us the Company has maintained proper records of its inventories and no materialdiscrepancies were noticed on physical verification. iii) a) The Company has grantedunsecured loans for an amount of Rs. 3310/- lacs to Companies covered in the registermaintained under section 189 of the Company Act 2013. b) In our opinion the terms andconditions on which loans were granted are not prima facie prejudicial to the interest ofthe Company. The repayment of principal and payment of interest is as stipulated and therepayments are regular.

iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Companies Act 2013In respect of loans investments guarantees and security.

v) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.

vi) We have broadly reviewed the cost records maintained by the Company pursuant to therules prescribed by the Central Government of India under Section 148(1) of the CompaniesAct 2013 and are of the opinion that prima facie the prescribed cost records have beenmade and maintained. We have however not made a detailed examination of the cost recordswith a view to determine whether they are accurate or complete.

vii) a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company is regular in depositingundisputed statutory dues including Provident Fund Employees State Insurance Income-TaxSales tax Service Tax Duty of Customs Duty of Excise Value added Tax Cess and anyother statutory dues with the appropriate authorities. According to the information andexplanations given to us no undisputed amounts payable in respect of the above were inarrears as at March 31 2016 for a period of more than six months from the date on whenthey become payable.

b) According to the information and explanation given to us there are no dues ofincome tax sales tax service tax duty of customs duty of excise value added taxoutstanding on account of any dispute except.

Name of the Statute Nature of the dues Forum where dispute is pending Amount Involved (Rs. In Lakhs) Deposit Amount (Rs. in Lakhs) Unpaid Deposit Amount (Rs. in Lakhs)
Customs Act1962 Interest on Customs High Court 45 - 45
Duty Paid
Customs Act1962 Interest on settled dues Commissioner of 223 - 223
(Entry Tax on CIX) customs
Total 268 - 268

c) In our opinion there are no amounts required to be transferred to Investor Educationand Protection Fund by the company.

viii) In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to financial institution or banks. TheCompany has not issued any debentures.

ix) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offeror further public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.

x) Based upon the audit procedures performed and the information and explanations givenby the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.

xi) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;

xii) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.

xiii) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.

xiv) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.

xv) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.

xvi) In our opinion the company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the Company and hence not commented upon.

FOR RAMBABU & Co.
Chartered Accountants
FRN: 002976S
Ravi Rambabu
Place: Hyderabad Partner
Date: 20.05.2016 M.No.018541

Annexure "B" to the Independent Auditors’ Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of PENNARINDUSTRIES LIMITED ("the Company") as of March 31 2016 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management responsible for establishing and maintaining internalfinancial controls base on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company’s policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlsover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that:-(1) Pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) Provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) Provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial control over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2016 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

FOR RAMBABU & Co.
Chartered Accountants
FRN: 002976S
Ravi Rambabu
Place: Hyderabad Partner
Date: 20.05.2016 M.No.018541