Your Directors are pleased to present the 41st Annual Report and the Company's auditedfinancial statement for the financial year ended 31st March 2017.
The Company's financial performance for the year ended 31st March 2017 is summarizedbelow:
|Particulars ||Consolidated ||Standalone |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Gross sales ||171825 ||148054 ||110490 ||98564 |
|Operating profit (PBIDT) ||17422 ||15133 ||9335 ||8092 |
|Profit before tax (PBT) ||8786 ||9404 ||4786 ||4159 |
|Income Tax and Deferred Tax ||2932 ||3580 ||1780 ||1457 |
|Profit after tax (PAT) ||4665 ||4385 ||3006 ||2702 |
|Profit brought forward from previous year ||26852 ||22466 ||20108 ||17406 |
|Surplus available for appropriation ||31517 ||26852 ||23114 ||20108 |
|Appropriations || || || || |
|Dividend ||0 ||0 ||0 ||0 |
|Corporate tax on proposed dividend ||0 ||0 ||0 ||0 |
|Transfer to General Reserve ||0 ||0 ||0 ||0 |
|Transfer to Capital Redemption Reserve ||0 ||0 ||0 ||0 |
|Balance of profit carried to Balance Sheet ||31517 ||26852 ||23114 ||20108 |
Result of Operations and the state of Company's affairs:
Your company has recorded highest ever consolidated gross sale at Rs. 1718 Crores andhighest ever EBIDTA at Rs. 174 Crores. Pennar has recorded consolidated net profit ofRs.47 crores. Your company's new products and ability to increase new customer base hashelped in achieving this. All the business units of the company are profitable and showedgrowth over previous year.
Consolidated Financial Statement:
In accordance with the Companies Act 2013 ("the Act") and AccountingStandard (AS) - 21 on Consolidated Financial Statements the audited consolidatedfinancial statement is provided in the Annual Report.
The following are three subsidiaries of the company as on 31st March 2017.
a. M/s. Pennar Engineered Building Systems Limited
b. M/s. Pennar Enviro Limited
c. M/s. Pennar Renewables Private Limited (formerly New Era Envi-ro Ventures(Karimnagar) Private Limited)
The performance of the subsidiaries is as hereunder:
(a) M/s. Pennar Engineered Building Systems Limited (PEBSL)
Your company's subsidiary M/s. Pennar Engineered Building Systems Limited is oneamong the top players of pre engineering building segment in India with gross sales of Rs.570 Crores and EBIDTA of Rs. 56 crores. PEBSL has recorded a net profit of Rs. 24 crores.The company has increased its presence in Solar MMS EPC business and Engineering Servicesbusiness.
(b) M/s. Pennar Enviro Limited (PEL)
Your company's subsidiary M/s. Pennar Enviro Limited has recorded gross sales of Rs.115 crores and EBIDTA of Rs. 4.4 crores. PEL has recorded a net profit of Rs. 1.69 crores.On the back of healthy order book the company expects to scale revenue further in next fewyears.
(c) M/s. Pennar Renewables Private Limited (PRPL)
Your company's has recorded revenue of Rs. 27 Crores with Net Profit of Rs. 3.6 crores.The company is into business of supply of solar power to Telangana DISCOMS.
Your company has invested USD 90000 in M/s. Pennar Global INC on 3rd July 2017 tocater its products and services in United States of America. Your company wish to convertthis into a Joint Venture with its other subsidiary M/s. Pennar Engineered BuildingSystems Limited.
The financial position of each of the subsidiaries as per the Companies Act 2013 isannexed. The Policy for determining material subsidiaries may be accessed on the Company'swebsite at the link: http:// www.pennarindia.com/policy-determining-material.html. Theinformation on subsidiaries pursuant to Section 129(3) of the Act read with rule 5 of theCompanies (Accounts) Rules 2014 is annexed herewith as Annexure - A in Form AOC - 1.
Material Changes and Commitments if any affecting the financial position of the companywhich have occurred between the end of the financial year of the company to which thefinancial statements relate and the date of the report
There are no material changes and commitments affecting the finan-cial position of theCompany.
Dividend Fixed Deposits and General Reserves:
The company has been investing in new CAPEX to expand its product profile and increasethe markets. This has already shown results by achieving highest sales and EBIDTA. Most ofthese activities are planned through internal sources.Therefore your Directors are notrecommending dividend on equity shares. Your Company has not accepted any fixed depositsand no amount has been carried to General Reserves during the year.
Particulars of Loans given Investments made Guarantees given and Securities provided:
Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in the standalone financial statement.
Internal Financial Controls:
The details in respect of internal financial control and their adequacy are included inthe Management Discussion & Analysis which forms part of this report.
Contract and Arrangement with Related Parties:
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had entered into contract / arrangement / transactionwith material related party which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions. The Policy onmateriality of related party transactions and dealing with related party transactions asapproved by the Board may be accessed on the Company's website at the link: http://www.pennarindia.com/policy-related-party-transactions.html.
The Information on transactions with related parties pursuant to Section 134(3)(h) ofthe Act read with rule 8(2) of the Companies (Accounts) Rules 2014 are annexed herewithas Annexure - B in Form AOC-2.
Change in the nature of business if any:
There is no material change in the nature of business affecting the financial positionof the Company for the year ended 31st March 2017.
CARE has reaffirmed the CARE A' (Single A; Outlook: Positive) with ratingassigned to long term bank facilities. This rating is applicable to facilities havingtenure of more than one year. Instruments with CARE A' rating are considered to haveadequate degree of safety regarding timely servicing of financial obligations.
Further CARE has also reaffirmed the CARE A1' (A One) rating to short term bankfacilities of the Company. This rating is applicable to facilities having tenure up to oneyear. Instruments with CARE A1' rating are considered to have very strong degree ofsafety regarding timely payment of financial obligations and carry lowest credit risk.
Your company has undertaken number of steps to maintain strong liquidity levels. Theconsolidated net debt level is at Rs.179.63 Crore. Your company co ntinues to focus ongenerating strong cash flows to meet its future growth plans and is comfortable with itscurrent liquidity positions.
Board of Directors and Key Managerial Personnel:
None of the Directors of the company are disqualified under the provisions of the Actor under the Listing Regulations.
Mr. P V Rao and Mr. K Lavanya Kumar who retire by rotation and being eligible offerthemselves for re-appointment. Your Board recommends their appointment.
Mr. J Ramu Rao Non-Executive Independent Directors of the company resigned from theoffice of directorship on 26th April 2017 the same was taken note by the Board ofDirectors at its meeting held 18th May 2017. Your Board places on record their deepappreciation for the contribution made by him during his tenure as Director.
Mr. Ravi Chachra Non-Executive Director of the company was designated as Non-ExecutiveIndependent Director of the Company under Section 149 of the Companies Act 2013 at themeeting of the Board of Directors held on 14th August 2017.
Pursuant to the provisions of Listing Regulations brief particulars of the Directorswho are proposed to be appointed/re-appointed are provided as an annexure to the noticeconvening the Annual General Meeting.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed both undersub-section (6) of Section 149 of the Companies Act 2013 and under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which includes criteria for performanceevaluation of the Non-Executive Directors and Executive Directors. The details ofprogrammes for familiarisation of Independent Directors with the Company their rolesrights responsibilities in the Company nature of the industry in which the Companyoperates business model of the Company and related matters are put up on the website ofthe Company at the link: http://www.pennarindia.com/policy-familiarization-programme.html.
Meetings of the Board:
Six meetings of the Board of Directors were held during the year. For further detailsplease refer the same in Corporate Governance report in this Annual Report.
Directors Responsibility Statement:
Your Directors state that: a. in the preparation of the annual accounts for the yearended 31st March 2017 the applicable accounting standards read with requirements set outunder Schedule III to the Act have been followed and there are no material departuresfrom the same; b. the Directors have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31st March 2017and of the profit of the Company for the year ended on that date; c. the Directors havetaken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; d. the Directors haveprepared the annual accounts on a going concern' basis; e. the Directors have laiddown internal financial controls to be followed by the Company and that such internalfinancial controls are adequate and are operating effectively; and f. the Directors havedevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems are adequate and operating effectively.
The Company is committed to maintain the highest standard of corporate governance andadhere to the corporate governance requirements set out by Securities Exchange Board ofIndia. The Report on corporate governance as stipulated under the Listing Regulations isannexed herewith as Annexure - C. The requisite certificate from Mr. Subhash KishanKandrapu Practicing Company Secretary confirming compliance with the conditions ofcorporate governance is annexed herewith as Annexure - D.
Corporate Social Responsibility (CSR):
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in Annexure - E of this report in the format prescribed in the Companies (CorporateSocial Responsibility Policy) Rules 2014. The policy is available on the web-site of theCompany.
Nomination and Remuneration Policy:
The Nomination and Remuneration Committee of the Company identifies the persons whoare qualified to become Directors of the Company / who may be appointed in SeniorManagement in accordance with the criteria laid down and recommend to the Board for theirappointment and removal. The Committee also carries out evaluation of every Director'sperformance. The Committee has formulated the criteria for determining qualificationsattributes independence of the Directors and recommend to the Board a Policy relating tothe remuneration for the Directors Key Managerial Personnel and other employees.
Pursuant to section 134 (3) (n) of the Companies Act 2013 and SEBI (LODR) Regulations2015 the company has formulated a policy on risk management. At present the company hasnot identified any element of risk which may threaten the existence of the company.
M/s. Rambabu & Co. Chartered Accountants (FRN No. 002976S) existing StatutoryAuditors have been in office for more than ten years and in compliance with the provisionsof the Act the Audit Committee and the Board of Directors of the Company at theirmeetings held on 12th August 2017 and 14th August 2017 respectively recommended theappointment of M/s. Deloitte Haskins & Sells LLP Chartered Accountants (RegistrationNo. 117366W/W-100018) as the Statutory Auditors (new auditors) of the Company in place ofthe existing Statutory Auditors to hold office for a term of five consecutive years fromthe conclusion of the ensuing Annual General meeting to be held in the year 2017 till theconclusion of the Annual General Meeting to be held in the year 2022 (subject to theratification of appointment by shareholders in every Annual General Meeting). Thenecessary resolution is being placed before the shareholders for approval. The newAuditors have confirmed their eligibility to the effect that their appointment if madewould be within the prescribed limits under the Act and that they are not disqualified forappointment. The Auditor's report to the shareholders on the standalone and consolidatedfinancials for the year ended 31st March 2017 does not contain any qualificationobservation or adverse comment.
The Cost Audit Report for the year ended 31st March 2016 was reviewed by the AuditCommittee at its meeting held on 11th August 2016 and has been filed with Registrar ofCompanies on 13th October 2016. The Board of Directors at its meeting held on 12thAugust 2016 appointed M/s. Shaik & Associates. Cost Accountants Hyderabad as Costauditors of the company for the year ending 31st March 2017. The Cost Audit for the yearended 31st March 2017 is in progress and the Cost Audit Report will be filed with theRegistrar of Companies within the stipulated time.
The Board has appointed Mr. Subhash Kishan Kandrapu Practicing Company Secretary toconduct Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report forthe financial year ended 31st March 2017 is annexed herewith as Annexure - F. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.
The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of annual report.
Vigil Mechanism/Whistle Blower Policy:
Pursuant to Section 177 of the Companies Act 2013 read with Rule 7 of Companies(Meetings of Board and its Powers) Rules 2014 the Company has established a WhistleBlower Policy to deal with instance of fraud and mismanagement if any. The details of theWhistle Blower Policy are explained in the Corporate Governance Report. The Policy onvigil mechanism and whistle blower policy may be accessed on the Company's website at thelink: http://www.pennarindia.com/vigil-mechanism.html
Conservation of energy technology absorption and foreign exchange earnings and outgo:
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act is annexedherewith as Annexure - G.
Extract of Annual Return:
Extract of Annual Return of the Company is annexed herewith as An-nexure - H.
Particulars of Employees and related disclosures:
The information required under section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014and the Statement under Section 134 of the Companies Act 2013 read with Rule 5 (2) of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedherewith as Annexure - I.
Disclosure under Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013:
The Company has in place an Internal Complaints Committee which has been set up toredress complaints regarding sexual harassment. The following is the summary of sexualharassment complaints received and disposed off during the year:
1. No. of complaints received : nil
2. No. of complaints disposed off: nil
Listing of Equity Shares:
The Company's equity shares are listed at the Bombay Stock Exchange Limited NationalStock Exchange of India Limited.
Delisting from Metropolitan Stock Exchange of India Limited:
The Board of Directors of the Company have approved at their Board Meeting held on 28thFebruary 2017 to delist the equity shares of the Company from Metropolitian StockExchange of India (MSEI) pursuant to regulation 6(a) read with regulation 7(1) ofSecurities And Exchange Board Of India (Delisting of Equity Shares) Regulations 2009.
The Company has filed the delisting application with the Metropoli-tian Stock Exchangeof India (MSEI) on 28th February 2017 and further the exchange have approved theapplication on 30th May 2017 and hence the equity shares of the Company are delisted fromMetropoli-tian Stock Exchange of India (MSEI) w.e.f. 16th June 2017.
Presently the equity shares of the Company are listed on BSE Limited (BSE) and NationalStock Exchange of India Limited (NSE) the shareholders are requested to utilize theservices of the said prime exchanges.
Dematerialisation of Shares:
98.56% of the company's paid-up equity share capital is in dematerialized form as on31st March 2017 and balance 1.44% is in physical form.
Managing Director Certification under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015:
The Vice-Chairman & Managing Director certification under SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 is annexed herewith as Annexure-J.
Personnel / Industrial Relations:
The Company maintained cordial and harmonious relations at all levels at the officesand plants of the Company and its subsidiaries throughout the year under review.
The details of significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and company's operations in future:
In terms of sub rule 5(vii) of Rule 8 of Companies (Accounts) Rules 2014 there are nosignificant material orders passed by the Regulators / Courts which would impact the goingconcern status of the Company and its future operations.
Management Discussion and Analysis:
The "Management Discussion and Analysis Report" highlighting the industrystructure and developments opportunities and threats future outlook risks and concernsetc. is furnished separately and forms part of this Board's Report.
Your directors take this opportunity to express their appreciation for the co-operationto all the suppliers and customers who have been associated with the Company as partners.The Directors would also like to take this opportunity to thank the financialinstitutions banks regulatory and government authorities as well as the shareholders fortheir continued co-operation and support. The Directors also wish to place on record theirappreciation of the devoted and dedicated services rendered by all employees of theCompany. We look forward to further support.
| ||By Order of the Board |
| ||for Pennar Industries Limited |
|Place : Hyderabad ||Nrupender Rao |
|Date : 14.08.2017 ||Executive Chairman |
ANNEXURE - A
FORM NO. AOC - 1
(Pursuant to the first provision to sub-section 3 of Section 129 read with Rule 5 ofCompanies (Accounts) Rules 2014); Salient Features of Financial Statements ofSubsidiary/associate companies/joint ventures as per Companies Act 2013
Part "A": Subsidiaries
|1 Name of Subsidiary ||Pennar Engineered Building Systems Limited ||Pennar Enviro Limited ||Pennar Renew- ables Private Limited [Formerly New Era Enviro Ventures (Karim- nagar) Private Limited] |
|2 Reporting period for the subsidiary concerned if different from the holding company's reporting period ||Not Applicable ||Not Applicable ||Not Applicable |
|3 Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries ||Not Applicable ||Not Applicable ||Not Applicable |
|4 Share Capital ||3427 ||837 ||500 |
|5 Reserves & Surplus ||20227 ||338 ||4926 |
|6 Total Assets ||55041 ||8271 ||17127 |
|7 Total Liabilities ||31387 ||7096 ||11701 |
|8 Investments ||3529 ||2 ||0 |
|9 Turnover ||54761 ||11528 ||2599 |
|10 Profit Before Taxation ||3373 ||212 ||532 |
|11 Provision for Taxation ||933 ||427 ||177 |
|12 Profit after Taxation ||2440 ||169 ||356 |
|13 Proposed Dividend ||Nil ||Nil ||Nil |
|14 % of Shareholding ||53.98% ||51.03% ||80.69% |
1 Names of subsidiaries which are yet to commence operations Nil
2 Names of subsidiaries which have been liquidated or sold during the year Nil
|Part "B": Associates/Joint Ventures || |
|1 Name of Associates/Joint Ventures || |
|2 Latest audited Balance Sheet Date || |
|3 Shares of Associate/Joint Ventures held by the company on the year end || |
|4 Amount of Investment in Associates/Joint Venture || |
|5 Extend of Holding % ||NA |
|6 Description of how there is significant influence || |
|7 Reason why the associate/joint venture is not consolidated || |
|8 Networth attributable to Shareholding as per latest audited balance sheet || |
|9 Profit/Loss for the year || |
|i. Considered in Consolidation || |
|ii. Not Considered in Consolidation || |
|1 Names of associates or joint ventures which are yet to commence operations ||* |
|2 Names of associates or joint ventures which have been liquidated or sold during the year ||NA |
* Your company has invested USD 90000 in M/s. Pennar Global INC on 3rd July 2017 tocater its products and services in United States of America. Your company wish to convertthis into a Joint Venture with its other subsidiary M/s. Pennar Engineered BuildingSystems Limited.
ANNEXURE - B
FORM NO. AOC - 2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
Part "A": Subsidiaries
Form for disclosure of particulars of contracts / arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arm's length transactions under third provisothereto:
1. Details of contracts or arrangements or transactions not at arm's length basis: M/s.Pennar Industries Limited has not entered into any contract or arrangement or transactionwith its related parties which is not at arm's length during financial year 2016-17
|a Name(s) of the related party and nature of relationship || |
|b Nature of contracts/arrangements/transactions || |
|c Duration of the contracts / arrangements/ transactions || |
|d Salient terms of the contracts or arrangements or transactions including the value if any ||Not Applicable |
|e Justification for entering into such contracts or arrangements or transactions || |
|f Date(s) of approval by the Board || |
|g Amount paid as advances if any || |
|h Date on which the special resolution was passed in general meeting as required under first proviso to section 188 || |
2. Details of material contracts or arrangement or transactions at arm's length basis:
|a Name(s) of the related party and nature of relationship ||1. Pennar Engineered Building Systems Limited (Subsidiary Company) |
| ||2. Pennar Enviro Limited (Subsidiary Company) |
| ||3. Pennar Renewables Private Limited [Formerly New Era Enviro Ventures (Karimnagar) Private Limited] (Subsidiary Company) |
|b Nature of contracts/arrangements/transactions ||Sale of Steel Products Purchase of Steel products Job works etc. |
|c Duration of the contracts / arrangements/ transactions ||April 2016 to March 2017 |
|d Salient terms of the contracts or arrangements or transactions including the value if any ||The contract was entered into in the ordinary course of business and on arm's length basis. (for details of transactions during the year refer Note No. 32 to the Standalone financial statements). |
|e Date(s) of approval by the Board ||20.05.2016; 12.08.2016; 10.11.2016; 09.02.2017 |
|f Amount paid as advances if any ||- |
ANNEXURE - G
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNING AND OUTGOETC:
Information on conservation of energy Technology absorption Foreign Exchange earningsand outgo required to be disclosed under section 134 of the companies act 2013 read withcompanies (accounts) Rules 2014 are provided hereunder:
|(A) Conservation of Energy: ||The Company continued to give major emphasis for conservation of energy and the measures taken in the previous year were continued.The efficiency of Energy Utilization at each plant is monitored at the corporate level every quarter in order to achieve effective conservation of energy. |
| ||The significant Energy conservation measures during the year were as follows: |
|I. The steps taken or impact on conservation of energy ||a. Auto switching off machines/equipments auxiliaries immediately after use to avoid running of machine in idle condition. |
| ||b. Equipment installed to achieve unity power factor and achieved 1.5 % reduction in energy consumption . |
| ||c. Creating awareness among employees about the necessity of energy conservation by conducting workshops & displaying notices on the Notice Board. |
| ||d. Replaced HSPV Metal halide and fluorescent lamps with LED lights . |
|II. The steps taken by the company for utilizing alternate sources of energy ||The company has been generated power through solar power plant having a capacity of 2.5 MW since the year 2014. |
| ||Drivers provided for various blowers and pumps in place of DOL starters. |
|III. The capital investment on energy conservation equipment; ||NIL |
|(B) Technology absorption: || |
|I. The efforts made towards technology absorption ||Introduced forming lines with online punching to increase the productivity and quality. |
| ||The benefits derived are: |
|II. The benefits derived like product improvement cost reduction product development or import substitution. || Improved quality and productivity |
| || Conservation of energy & reduced power cost |
|III. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) || |
|a. The details of technology imported || |
|b. The year of import: ||NIL |
|c. Whether the technology been fully absorbed || |
|d. If not fully absorbed areas where absorption has not taken place and the reasons thereof || |
|IV. The expenditure incurred on research and development ||NIL |
|(C)Foreign exchange earnings and outgo ||Total Foreign Exchange earnings: Rs.510 Lakhs |
| ||Total Foreign Exchange Outgo: Rs. 764 Lakhs |
PARTICULARS OF EMPLOYEES
(a) The information required under section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:
(i)The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year;
(ii) The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year;
|Name of the Director ||Designation ||Remuneration paid in 2016-17 ||Remuneration paid in 2015-16 ||Increase in remuneration from previous year ||Ratio/median of employee remu neration (2016-17) |
|1. Mr. Nrupender Rao ||Chairman ||216 ||187 ||29 ||93.00 |
|2. Mr. Aditya Rao ||Vice-Chairman & Managing Director ||150 ||140 ||10 ||64.94 |
|3. Mr K Lavanya Kumar ||Whole-Time Director ||43 ||36 ||7 ||18.59 |
|4. Mr. J S Krishna Prasad ||Chief Financial Officer ||26 ||24 ||2 ||11.38 |
|5. Mr. Mirza Mohammed Ali Baig (*) ||Company Secretary& Compliance Officer ||7 ||6 ||1 ||3.00 |
(iii) The percentage increase in the median remuneration of employees in the financialyear: 4.29%
(iv) The number of permanent employees on the rolls of company: 1515
(v) The explanation on the relationship between average increase in remuneration andcompany performance:
The increase in employee remuneration is based on the performance of the individualsand Business units coupled with the company performance. During the current financial year(2016-17) the company has recorded a growth of 11.23% in Profit after tax compared tolast financial year (2015-16). However the employee remuneration and the performance ofthe company cannot be directly co-related as it is not practical considering the factorsinvolved.
(vi) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the company;
|Aggregate remuneration of Key Managerial Personnel (KMP) in FY 2016-17 (Rs. in lakhs) ||443 |
|Revenue (Rs. in lakhs) ||99119 |
|Remuneration of KMPs (as a % of revenue) ||0.45% |
|Profit Before Tax (Rs. in lakhs) ||4786 |
|Remuneration of KMPs (as a % of Profit before Tax) ||9% |
(vii) Variations in the market capitalisation of the company price earnings ratio asat the closing date of the current financial year and previous financial year:
|Particulars ||31.03.2017 ||31.03.2016 |
|Market Capitalization of the Company (in Rs. Lakhs) ||49283 ||57768 |
|Closing Price at the National Stock Exchange Ltd. (in Rs.) ||40.95 ||48.00 |
|Price Earnings Ratio as at the closing date (MPS/EPS) ||16.39 ||21.33 |
Percentage increase over decrease in the market quotations of the shares of the companyin comparison to the rate at which the company came out with the last public offer:
|Particulars ||31.03.2017 ||31.05.1988 ||Change |
|Market Price (BSE) ||44 ||10 (*) ||440% |
|* The face value of the equity share was split from Rs. 10/- to Rs. 5/- each. || || || |
(viii) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
(a) The average annual increase for the Financial Year 2016-17 in salaries of employeeswas 7.45%
(b) The increase in managerial remuneration for the Financial Year 2016-17 was 12.78%
(ix) Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the company;
| ||Name & Designation |
|Particulars ||Nrupender Rao Chairman ||Aditya Rao Managing Director ||K Lavanya Kumar Whole-Time Director ||J S Krishna Prasad Chief Financial Officer ||Mirza Mohammed Ali Baig Company Secretary |
|Remuneration in FY 2016-17 (Rs. in lakhs) ||216 ||150 ||43 ||26 ||7 |
|Revenue (Rs. in lakhs) || || ||99119 || || |
|Remuneration as % of revenue ||0.22% ||0.15% ||0.04% ||0.03% ||0.01% |
|Profit before Tax (PBT) (Rs. in lakhs) || || ||4786 || || |
|Remuneration (as % of PBT) ||4.51% ||3.15% ||0.90% ||0.55% ||0.15% |
(x) The key parameters for any variable component of remuneration availed by thedirectors: Except commission there is no other variable component of remuneration availedby the Directors.
(xi) The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year: None.
(xii) Affirmation that the remuneration is as per the remuneration policy of thecompany: The Company affirms remuneration is as per the remuneration policy of theCompany.
Statement under Section 134 of the Companies Act 2013 read with Rule 5 (2) of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014
a) Employed throughout the Financial Year and in receipt of remuneration aggregatingRs. 6000000 or more:
|Sl No. ||Name ||Designation ||Age ||Qualification ||Remuneration in Rs. Lacs |
|1 ||Mr. Nrupender Rao ||Executive Chairman ||73 ||B. Tech (IIT Kharagpur) M.S Operations Research & Industrial Engineering Purdue University USA ||216 |
|2 ||Mr. Aditya Rao ||Vice-Chairman & Managing Director ||36 ||Industrial Engineering Purdue University USA B.S. M. Eng. From Cornell University USA ||150 |
ANNEXURE - J
MANAGING DIRECTOR CERTIFICATION UNDER SEBI (LISTING OBLIGATIONS ANDDISCLOSUREREQUIREMENTS) REGULATIONS 2015
The Board of Directors
M/s. Pennar Industries Limited
1. We have reviewed financial statements and the cash flow statement of M/s. PennarIndustries Limited for the year ended 31st March 2017 and to the best of our knowledgeand belief:
(i) these statements do not contain any materially untrue statement or omit anymaterial fact or contain statements that might be misleading;
(ii) these statements together present a true and fair view of the Company's affairsand are in compliance withexisting accounting standards applicable laws and regulations.
2. There are to the best of our knowledge and belief no transactions entered into bythe Company during the year which are fraudulent illegal or violate the Company's Code ofConduct.
3. We accept responsibility for establishing and maintaining internal controls forfinancial reporting and we have evaluated the effectiveness of Company's internal controlsystems pertaining to financial reporting. We have not come across any reportabledeficiencies in the design or operation of such internal controls.
4. We have indicated to the Auditors and the Audit Committee:
(i) that there are no significant changes in internal control over financial reportingduring the year;
(ii) that there are no significant changes in accounting policies during the year; and
(iii) that there are no instances of significant fraud of which we have become aware.
| ||for Pennar Industries Limited |
| ||Aditya Rao |
|Date:14.08.2017 ||Vice-Chairman & Managing Director |
|Place: Hyderabad ||DIN No. 01307343 |