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Pennar Industries Ltd.

BSE: 513228 Sector: Metals & Mining
NSE: PENIND ISIN Code: INE932A01024
BSE 10:13 | 27 Jun 35.00 0.50
(1.45%)
OPEN

35.00

HIGH

35.40

LOW

34.65

NSE 09:59 | 27 Jun 35.30 0.80
(2.32%)
OPEN

34.75

HIGH

35.30

LOW

34.75

OPEN 35.00
PREVIOUS CLOSE 34.50
VOLUME 8646
52-Week high 47.95
52-Week low 25.70
P/E 14.52
Mkt Cap.(Rs cr) 497
Buy Price 35.20
Buy Qty 9.00
Sell Price 35.30
Sell Qty 13.00
OPEN 35.00
CLOSE 34.50
VOLUME 8646
52-Week high 47.95
52-Week low 25.70
P/E 14.52
Mkt Cap.(Rs cr) 497
Buy Price 35.20
Buy Qty 9.00
Sell Price 35.30
Sell Qty 13.00

Pennar Industries Ltd. (PENIND) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 45th Annual Report and theCompany's audited financial statement (Standalone and Consolidated) for the financial yearended 31st March 2021.

Financial Results:

The Company's financial performance for the year ended 31st March2021 is summarized below:

Amount in Rs lakhs

Name of the Entity Consolidated Standalone
2020-21 2019-20 2020-21 2019-20
Revenue from Operations 152535 210655 151654 209766
Operating profit (PBIDT) 13149 18939 12820 18803
Profit before tax (PBT) 365 6312 107 6195
Income Tax and Deferred Tax 81 972 18 944
Profit after tax (PAT) 284 5340 89 5251
Other Comprehensive income -27 28 14 (39)
Total Comprehensive income for the year 257 5368 103 5212
Net profit attributable to Owners of the company 268 5333 103 5212
Profit brought forward from previous year 48915 43650 48622 43410
Surplus available for appropriation 49183 48915 48725 48622
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 49183 48915 48725 48622

Result of Operations and the state of Company's affairs:

Your company has generated a net revenue of Rs 1525.35 Crores EBITDAat Rs 131.49 Crores PAT at Rs 2.84 Crores for the financial year 2020-21.

COVID 19:

Due to outbreak of corona virus Disease 2019 (COVID 19) which has beendeclared as a pandemic by the World Health Organization and subsequent lock down orderedby the central and state government(s) in India the manufacturing facilities of thecompany remained suspended from March 23 2020 till May 04 2020.

Further the recent second wave of Covid-19 has resulted in partiallockdown restriction in various states affecting certain operations during the quarter.The results for the year are therefore not comparable with those for the previous year.

However in our opinion and based on internal and certain externalsources of information we do not see any adverse impact on of property plant andequipment inventories receivables and other assets.

Consolidated Financial Statement:

The Consolidated Financial Statements of the Company its subsidiariesprepared in accordance with the Companies Act 2013 and applicable Indian AccountingStandards along with all relevant documents and the Auditors' Report form part of thisAnnual Report. The Consolidated Financial Statements presented by the Company include thefinancial results of its subsidiary companies. The Financial Statements as stated aboveare also available on the website of the Company and can be accessed at the website viz.www.pennarindia.com.

Subsidiaries':

The following are four subsidiaries of the company as on 31st March2021.

a. M/s. Pennar Global INC USA

b. M/s. Enertech Pennar Defense and Engineering Systems Private Limited

c. M/s. Oneworks BIM Technologies Private Limited

d. M/s. Pennar Gmbh

The performance of the subsidiaries is as hereunder:

(a) M/s. Pennar Global INC USA

Pennar Global Inc. is in the business of providing engineering servicesand marketing Pennar Products across the United States of America. The company hasrecorded a net revenue of USD 10.61 Million in the financial year 2020-21.

(b) M/s. Enertech Pennar Defense and Engineering Systems PrivateLimited

Enertech Pennar Defence and Engineering Systems Private Limited hasrecorded a net revenue of ' 12.04 crores in the financial year 2020-21.

(c) M/s. Oneworks BIM Technologies Private Limited

Oneworks BIM Technologies Private Limited is engaged in supportingclients through the technical processes of Building Information Modelling Management andData Collection. The company has recorded a net revenue of ' 3.41 crores in the financialyear 2020-21.

(d) M/s. Pennar Gmbh

Pennar Gmbh has recorded a net revenue of 0.28 million Euros for thefinancial year 2020-21.

The financial position of each of the subsidiaries as per theCompanies Act 2013 is annexed. The Policy for determining material subsidiaries may beaccessed on the Company's website at the link: http://www.pennarindia.com/policy-determining-material.html. The information on subsidiaries pursuant to Section 129(3) ofthe Act read with rule 5 of the Companies (Accounts) Rules 2014 is annexed herewith asAnnexure - A in Form AOC - 1.

Step down subsidiaries:

The following are two step-down subsidiaries of the company as on 31stMarch 2021.

a. Pennar Global Metals LLC

b. Ascent Buildings LLC

Material Changes and Commitments if any affecting the financialposition of the company which have occurred between the end of the financial year of thecompany to which the financial statements relate and the date of the report

There are no material changes and commitments affecting the financialposition of the Company.

Dividend Fixed Deposits and General Reserves:

The company has been investing in new capital to expand its productprofile and increase the markets. This has already shown results by achieving highestsales and EBIDTA. Most of these activities are planned through internal sources.Thereforeyour Directors are not recommending dividend on equity shares. Your Company has notaccepted any fixed deposits and no amount has been carried to General Reserves during theyear.

Particulars of Loans given Investments made Guarantees given andSecurities provided:

Particulars of loans given investments made guarantees given andsecurities provided along with the purpose for which the loan or guarantee or security isproposed to be utilized by the recipient are provided in the standalone financialstatement.

Internal Financial Controls:

The details in respect of internal financial control and their adequacyare included in the Management Discussion & Analysis which forms part of this report.

Contract and Arrangement with Related Parties:

All contracts / arrangements / transactions entered by the Companyduring the financial year with related parties were in the ordinary course of business andon an arm's length basis. During the year the Company had entered into contract /arrangement / transaction with material related party which could be considered materialin 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 partytransactions as approved by the Board may be accessed on the Company's website at thelink: http://www.pennarindia.com/ policy-related-party-transactions.html.

The Information on transactions with related parties pursuant toSection 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules 2014are annexed herewith as 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 thefinancial position of the Company for the year ended 31st March 2021.

Credit Rating:

CARE has revised from CARE A Stable to 'CARE A-' Stable (Single AMinus; Outlook: Stable) with rating assigned to long term bank facilities. Further CAREhas also revised from CARE A1 to 'CARE A2 + ' (A Two Plus) rating to short term bankfacilities of the Company.

Cash profit:

Your company has undertaken a number of steps to maintain strongliquidity levels. The consolidated cash profit is at Rs 51.82 Crore. Your companycontinues to focus on generating strong cash flows to meet its future growth plans and iscomfortable with its current liquidity positions.

Board of Directors and Key Managerial Personnel:

None of the Directors of the company are disqualified under theprovisions of the Act or under the Listing Regulations.

Appointment:

Mr. Eric James Brown and Mr. P V Rao who retire by rotation and beingeligible offer themselves for re-appointment. Your Board recommends their appointment.

The Board of Directors at its meeting held on 12th February 2021changed the terms of appointment of Mr. Nrupender Rao Executive Chairman Mr. Aditya RaoVice-Chairman and Managing Director and Mr. K Lavanya Kumar Executive Director of theCompany. Their appointment has to be ratified by the Members at the ensuing Annual GeneralMeeting. Your Board recommends their re-appointment.

The Board of Directors passed circular resolution on 31.03.2021 forchange in designation of Mr. P V Rao as Non-Executive NonIndependent Director with effectfrom 1st April 2021. His appointment has to be ratified by the Members at the ensuingAnnual General Meeting. Your Board recommends his appointment.

The Board of Directors appointed Mr. RVS Ramakrishna as AdditionalNon-Executive Independent Directors of the Company at its Meeting held on 4th June 2021.His appointment has to be ratified by the Members at the ensuing Annual General Meeting.Your Board recommends his appointment.

Resignation:

Mr. Vishal Sood Non-Executive Director of the company resigned fromthe office of directorship and same was taken note by the Board of Directors at itsmeeting held 12th February 2021. Your Board place on record their appreciation andgratitude for the guidance and direction that Mr. Vishal Sood has provided to Pennarduring his long tenure as non-executive director.

Pursuant to the provisions of Listing Regulations brief particulars ofthe Directors who are proposed to be appointed/re-appointed are provided as an annexure tothe notice convening the Annual General Meeting.

The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet with the criteria of independence asprescribed both under sub-section (6) of Section 149 of the Companies Act 2013 and underSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

The Company has devised a Policy for performance evaluation ofIndependent Directors Board Committees and other individual Directors which includescriteria for performance evaluation of the Non-Executive Directors and ExecutiveDirectors. The details of programmes for familiarisation of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters are put upon the website of the Company at the link:http://www.pennarindia.com/policy-familiarization-programme.html.

Meetings of the Board:

Four meetings of the Board of Directors were held during the year. Forfurther details please refer the same in Corporate Governance report in this AnnualReport.

Directors Responsibility Statement:

Your Directors state that:

a) in the preparation of the annual accounts for the year ended 31stMarch 2021 the applicable accounting standards read with requirements set out underSchedule III to the Act have been followed and there are no material departures from thesame;

b) the Directors have selected such accounting policies and appliedthem consistently and made judgements and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at 31st March 2021and of the profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d) the Directors have prepared the annual accounts on a 'going concern'basis;

e) the Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively; and

f) the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.

g) the Company has complied with the Secretarial Standards issued bythe Institute of Company Secretaries of India on Meetings of the Board of Directors andGeneral Meetings.

Corporate Governance:

The Company is committed to maintain the highest standard of corporategovernance and adhere to the corporate governance requirements set out by SecuritiesExchange Board of India. The Report on corporate governance as stipulated under theListing Regulations is annexed herewith as Annexure - C. The requisite certificate fromStatutory Auditors confirming compliance with the conditions of corporate governance isannexed herewith as Annexure - D.

Corporate Social Responsibility (CSR):

In terms of Section 135 of the Companies Act 2013 and Companies(Corporate Social Responsibility Policy) Rules 2014 amended vide Ministry of Corporateaffairs Notification dated January 22 2021 the Company has amended the Corporate SocialResponsibility Policy. The same is hosted on the website of the Company viz.https://www.pennarindia.com/csr-policy.html. The Company has a CSR Committee to monitoradherence to Corporate Social Responsibility Policy and to track transactions related toOngoing / Non-ongoing projects etc. A detailed report on the CSR activities inter- aliadisclosing the composition of CSR Committee and CSR activities is attached as Annexure Eto this Report.

Nomination and Remuneration Policy:

The Nomination and Remuneration Committee of the Company identifies thepersons who are qualified to become Directors of the Company / who may be appointed inSenior Management in accordance with the criteria laid down and recommend to the Board fortheir appointment and removal. The Committee also carries out evaluation of everyDirector's performance. The Committee has formulated the criteria for determiningqualifications attributes independence of the Directors and recommend to the Board aPolicy relating to the remuneration for the Directors Key Managerial Personnel and otheremployees.

Risk Management:

Pursuant to section 134 (3) (n) of the Companies Act 2013 and SEBI(LODR) Regulations 2015 the company has formulated a policy on risk management. Atpresent the company has not identified any element of risk which may threaten theexistence of the company.

Statutory Auditors:

M/s. Deloitte Haskins & Sells LLP Chartered Accountants(Registration No. 117366W/W-100018) were appointed as the Statutory Auditors of theCompany to hold office for a term of 5 years from the conclusion of the 41st AnnualGeneral Meeting (AGM) held on 28th September 2017 until the conclusion of the 46th AGM ofthe Company to be held in the year 2022.

Pursuant to the Notification issued by the Ministry of CorporateAffairs on 7th May 2018 amending section 139 of the Companies Act 2013 the mandatoryrequirement for ratification of appointment of Auditors by the Members at every AGM hasbeen omitted and hence your Company has not proposed ratification of appointment ofDeloitte Haskins & Sells LLP Chartered Accountants at the forthcoming AGM.

The Auditors' Report is unmodified i.e. it does not contain anyqualification reservation or adverse remark or disclaimer.

Cost Auditors:

The Cost Audit Report for the year ended 31st March 2020 was reviewedby the Audit Committee at its meeting held on 12th August 2020 and has been filed withRegistrar of Companies on 17th November 2020. The Board of Directors at its meeting heldon 30th June 2020 appointed M/s. Shaik & Associates. Cost Accountants Hyderabad asCost auditors of the company for the year ending 31st March 2021. The Cost Audit for theyear ended 31st March 2021 is in progress and the Cost Audit Report will be filed with theRegistrar of Companies within the stipulated time.

Secretarial Auditor:

The Board has appointed Mr. Subhash Kishan Kandrapu Practicing CompanySecretary to conduct Secretarial Audit for the financial year 2020-21. The SecretarialAudit Report for the financial year ended 31st March 2021 is annexed herewith as Annexure- F. The Secretarial Audit Report does not contain any qualification reservation oradverse remark.

Audit Committee:

The details pertaining to composition of audit committee are includedin the Corporate Governance 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 ofCompanies (Meetings of Board and its Powers) Rules 2014 the Company has established aWhistle Blower Policy to deal with instance of fraud and mismanagement if any. Thedetails of the Whistle Blower Policy are explained in the Corporate Governance Report. ThePolicy on vigil mechanism and whistle blower policy may be accessed on the Company'swebsite at the link: http://www.pennarindia.com/vigil-mechanism.html

Conservation of energy technology absorption and foreign exchangeearnings and outgo:

The particulars relating to conservation of energy technologyabsorption foreign exchange earnings and outgo as required to be disclosed under theAct is annexed herewith as Annexure - G.

Extract of Annual Return:

Extract of Annual Return of the Company is annexed herewith as Annexure- H.

Particulars of Employees and related disclosures:

The information required under section 197 of the Companies Act 2013read with rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed herewith as Annexure - I.

Disclosure under Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013:

The Company has zero tolerance for sexual harassment of women atworkplace and has adopted a Policy for prevention prohibition and redressal of sexualharassment at workplace in terms of provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthereunder and constituted Internal Complaint Committee (ICC) for safe working environmentwhere all employees treat each other with courtesy dignity and respect irrespective oftheir gender race caste creed religion place of origin sexual orientationdisability economic status or position in the hierarchy.

The following is the summary of sexual harassment complaints receivedand disposed off during the year:

i) No. of complaints received : Nil

ii) No. of complaints disposed off: Nil

Listing of Equity Shares:

The Company's equity shares are listed at the Bombay Stock ExchangeLimited National Stock Exchange of India Limited.

Dematerialisation of Shares:

99.49% of the company's paid-up equity share capital is indematerialized form as on 31st March 2021 and balance 0.51% is in physical form.

Managing Director's Declaration:

Pursuant to the provisions of Regulation 17 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a declaration by theVice-Chairman and Managing Director of the company declaring that all the members of theboard and the senior management personnel of the company have affirmed compliance with theCode of Conduct of the company is annexed herewith as Annexure - J.

The CFO certification to the board pursuant to Regulation 15 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexedherewith Annexure - K.

Personnel / Industrial Relations:

The Company maintained cordial and harmonious relations at all levelsat the offices and plants of the Company and its subsidiaries throughout the year underreview.

The details of significant and material orders passed by the Regulatorsor Courts or Tribunals impacting the going concern status and company's operations infuture:

In terms of sub rule 5(vii) of Rule 8 of Companies (Accounts) Rules2014 there are no significant material orders passed by the Regulators / Courts whichwould impact the going concern status of the Company and its future operations.

Management Discussion and Analysis:

The "Management Discussion and Analysis Report" highlightingthe industry structure and developments opportunities and threats future outlook risksand concerns etc. is furnished separately and forms part of this Board's Report.

Appreciation:

Your directors take this opportunity to express their appreciation forthe co-operation to all the suppliers and customers who have been associated with theCompany as partners. The Directors would also like to take this opportunity to thank thefinancial institutions banks regulatory and government authorities as well as theshareholders for their continued co-operation and support. The Directors also wish toplace on record their appreciation of the devoted and dedicated services rendered by allemployees of the Company. We look forward to further support.

By Order of the Board for Pennar Industries Limited
Nrupender Rao
Chairman DIN No. 00089922
Place : Hyderabad Date : 1 1.08.2021

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