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Notes to Accounts of Pennar Industries Ltd.

Mar 31, 2016

NOTE - 1. SEGMENT DETAILS

The company is engaged in manufacture of steel products, viz Cold Rolled Steel Strips (CRSS) and Cold Rolled Formed Sections (CRFS) which in the context of Accounting Standard -17 issued by the Institute of Chartered Accountants of India is considered as a single segment.

NOTE - 2.

Figures for the previous year have been regrouped / reclassified / recast wherever necessary. Figures are rounded off to the nearest Lac of rupees.


Mar 31, 2015

NOTE 1 : CONTINGENT LIABILITIES Rs. in lakhs

SI Particulars As at As at No 31 st March, 2015 31st March, 2014

i) Bank Guarantees 915 1,038

ii) Corporate Guarantee given for loans taken by subsidiary (Note 31.1 & 31.2) 23,068 18,473

iii) Claims by Customs & Sales Tax (Note 31.3 & 31.4) 210 210

iv) Estimated amount of contracts remaining to be executed on capital account and not 55 983 provided for (net) v) LC/ Bills Discounted 185 347

2. Corporate guarantee has been given to State bank of India and Axis Bank Limited to the tune of Rs. 21568 Lakhs for Working capital loans and Term Loans taken by the subsidiary M/s Pennar Engineered Building Systems Ltd (PEBSL).The company also provided a collateral security by way of lien on fixed deposit of Rs. 200 lacs and pledge of shares of Pennar Engineered Building Systems Ltd to the extent of 61,50,000 shares of Rs.10/-each amounting to Rs. 615 Lacs.

3. Corporate guarantee to Axis Bank Limited to the tune of Rs.1,500 lakhs for Working capital loans, Letter of credit and Bank guarantee facilities taken by the subsidiary M/s Pennar Enviro Ltd.

NOTE 4 : SEGMENT DETAILS

The company is engaged in manufacture of steel products, viz Cold Rolled Steel Strips (CRSS) and Cold Formed Metal Profiles (CRFS) which in the context of Accounting Standard -17 issued by the Institute of Chartered Accountants of India is considered as a single segment.

NOTE 5

Figures for the previous year have been regrouped/reclassified/recast wherever necessary. Figures are rounded off to the nearest Lac of rupees.


Mar 31, 2014

NOTE 1. CORPORATE INFORMATION

Pennar Industries Limited is a multi-location, multi-product company manufacturing Cold Rolled Steel Strips, Precision Tubes, Cold Rolled Formed Sections, Electro Static Precipitators, Profiles, Railway Wagons and Coach Components, Press Steel Components and Road Safety Systems. Pennar Industires Limited has manufacturing facilities at Patancheru and Isnapur (in A.P.), Chennai and Hosur(Tamil Nadu) Tarapur (Maharashtra).

2.1 Cumulative amount withdrawn from the Revaluation reserve on account of depreciation on revaluation of Fixed Assets is H3,790 lakhs as on 31.03.2014 out of the total Revaluation reserve of H6,296 lakhs.

NOTE 3

An amount of H400 lakhs is transferred from General reserve to Capital Redumption reserve on account of (i) H45 lakhs being nominal value of 9,04,180 Cumulative redeemable Preference Shares of H5/- each which were issued to IFCI on conversion of Funded Interest Term Loans (ii) H277 lakhs being 1/3rd of nominal value of 1,66,49,119 Cumulative redeemable Preference shares of H5/- each. and (iii) H78 lakhs being the nominal value for 15,62,590 Equity shares of H5/- each brought back during the year.

NOTE 4

Persuant to board of directors approval for buy back of equity shares under section 77 A of the companies act, 1956, the company has bought back 15,62,590 shares of H5/- each through open market for an aggregate amount of H357 lakhs. Out of the said amount, an amount of H279 lakhs debited to share premium account and the balance amount H78 lakhs has been reduced from share capital.

5.1 Trade receivables outstanding for a period exceeding 6 months includes an amount of H155 lakhs which is doubtful for recovery, Company has filed legal cases against customers for recovery of such dues. Hence, management is confident of recovering the same.

5.2 Other Trade Receivables includes an amount of H1473 lakhs from subsidiary M/s Pennar Engineered Building Systems Limited.

6.1 Out of the Margin money Deposits, an amount of H155 lakhs has maturity period of more than 12 months.

6.2 The company has provided a collateral security by way of a lien on fixed deposit of H200 lakhs towards the Term Loans and Working Capital Loans taken by subsidiary M/s Pennar Engineered Building Systems Limited from State Bank of India.

7.1 During the year, company has filed applications with District Industries Centre under Andhra Pradesh Industrial Investment Promotion Policy 2010-15 for claiming sales tax incentive of H128 lakhs and power incentive for an amount of H5 lakhs totalling to H133 lakhs.

NOTE 8 : CONTINGENT LIABILITIES (Refer to Note 31 of the Annual Standalone Financial Statements) Rs in lakhs

Sl Particulars As at As at No 31stMarch 2014 31st March,2013

i) Bank Guarantees 1,038 666

ii) Corporate Guarantee given for loans taken by subsidiary 18,473 16,826 (Note 8.1 & 8.2)

iii) Claims by Customs & Sales Tax 210 210 (Note 8.3 & 8.4)

iv) Estimated amount of contracts remaining to be executed on capital account 983 154 and not provided for (net)

v) LC/Bills Discounted 347 4,128

8.1 Corporate guarantee has been given to State bank of India and Axis Bank Limited to the tune of H9,973 lakhs and H7,500 lakhs respectively for Working capital loans and Term Loans taken by the subsidiary M/s Pennar Engineered Building Systems Ltd (PEBSL). The company also provided a collateral security by way of lien on fixed deposit of H200 lacs and pledge of shares of Pennar Engineered Building Systems Ltd to the extent of 61,50,000 shares of H10/- each amounting to H615 lakhs.

NOTE 8 : CONTINGENT LIABILITIES (Refer to Note 31 of the Annual Standalone Financial Statements) (contd.)

8.2 Corpoarte guarantee to Axis Bank Limited to the tune of H1,000 lakhs for Working capital loans, Letter of credit and Bank gurantee facilities taken by the subsidiary M/s Pennar Enviro Ltd.

8.4 Out of the disputed due amount of H219 lakhs against Entry Tax on CIX, an amount of H54 lakhs has been deposited. The Unpaid amount is H165 lakhs.

NOTE 9 : RELATED PARTY DISCLOSURES (Refer to Note 34 of the Annual Standalone Financial Statements)

Sl Relationship Name

1 Subsidiary Companies Pennar Engineered Building Systems Limited

Pennar Enviro Limited

2 Significant Influence Saven Technologies Limited

3 Key Management Personnel

Mr. Nrupender Rao

Mr. CH. Anantha Reddy Mr. Aditya N Rao Mr. Suhas Baxi

4 Relatives of Key Management Personnel Mrs J Rajya Lakshmi Mrs CH Prabha


Mar 31, 2013

1. Corporate Information

Pennar Industries Limited is a multi-location, multi-product company manufacturing Cold Rolled Steel Strips, Precision Tubes, Cold Rolled Formed Sections, Electro Static Precipitators, Profiles, Railway Wagons and Coach Components, Press Steel Components and Road Safety Systems. Pennar Industries Limited has manufacturing facilities at Patancheru and Isnapur (in AP.), Chennai and Hosur (Tamil Nadu ) Tarapur (Maharashtra).

2.1 Cumulative amount withdrawn on account of depreciation on revaluation reserve is Rs. 3,537 Lakhs as on 31.03.2013 out ofRs. 6,296 lakhs

3.1 Trade receivables outstanding for a period exceeding 6 months includes an amount of Rs. 140 lakhs which is doubtful for recovery. However, management is confident of recovering the same. Out of the aforesaid mentioned Rs. 140 lakhs, company has filed the legal cases against customers to the extent of Rs.78 lakhs for recovery.

3.2 Trade Receivables includes an amount of Rs. 596 lakhs from subsidiary M/s Pennar Engineered Building Systems Limited.

4.1 The company has provided a collateral security by way of a lien on fixed deposit of Rs. 200 lakhs towards the Term Loans and Working Capital Loans taken by subsidiary M/s Pennar Engineered Building Systems Limited.

4.2 Out of the margin money balance, an amount of Rs. 225 lakhs has maturity period of more than 12 months.

5.1 Prepaid expenses includes an amount of Rs. 35 lakhs paid towards working capital processing charges which is getting deferred by the company on time proportionate basis.

6. Contingent Liabilities (Refer to Note 30 of the annual standalone financial statements)

As at As at Particulars 31 March, 2013 31 March, 2012 Rs. in lakhs Rs. in lakhs

i) Bank Guarantees given by banks 666 379

ii) Corporate Guarantee given for loans taken by subsidiary 16,826 13,813

iii) Claims by Customs & Sales Tax 210 210

iv) Estimated amount of contracts remaining to be executed on capital account and not provided for (net) 154 360

v) LC/Bills Discounted 4,128 3,590

6.1 Corporate guarantee to the tune of Rs.0465 Lakhs and Rs. 6361 Lakhs has been given to State Bank of India and Axis Bank Limited for Term Loans and Working capital loans taken by its subsidiary M/s Pennar Engineered Building Systems Ltd (PEBSL). The company also provided a collateral security, a lien on fixed deposit of Rs. 200 lakhs and pledge of shares of Pennar Engineered Building Systems Ltd to the extent of 61,50,000 shares amounting to Rs. 615 Lakhs.

6.2 Out of the disputed due amount of Rs. 219 Lakhs against Entry Tax on CIX, an amount of Rs.54 Lakhs has been deposited. The Unpaid amount is Rs. 165 Lakhs


Mar 31, 2012

I. CORPORATE INFORMATION

Pennar Industries Limited is a multi-location, multi-product company manufacturing Cold Rolled Steel Strips, Precision Tubes, Cold Rolled Formed Sections, Electro Static Precipitators, Profiles,Railway Wagons and Coach Components, Press Steel Components and Road Safety Systems.Pennar Industries Limited has manufacturing facilities at Patancheru and Isnapur ( in A.P.) , Chennai and Hosur (Tamil Nadu ) Tarapur(Maharashtra).

1.1.1 All Equity Shares issued by the company carry equal voting and participatory rights

1.1.2 44,53,479 shares out of the issued, subscribed and paid up capital were bought back and extinguished in the last five years

1.2.1 "1,66,49,119 number of Cumulative Redeemable Preference Shares of S 5/- each fully paid up and carrying 0.01% rate of interest are redeemable at par in three equal annual instalments of S1.66, S1.67 and S1.67 per share respectively commencing from the year 2013 - 14 and ending in the year 2015-16."

1.2.2 9,04,180 number of Cumulative Redeemable Preference Shares of S 5/- each issued to IFCI on conversion of Funded Interest Term Loans and carrying interest rate of 0.01% are redeemable at par in 10 quarterly instalments from 01.10.2013 to 01.01.2016

2.1 During the year company has taken a term loan from Axis Bank amounting to S 1500 Lacs for funding the CDW and Tubes project. The loan is repayable in 16 Quarterly instalments starting from December 2012. The loan carries the interest rate of 13.50% p.a.

2.2 Term loan from IFCI is payable in 5 Quarterly instalments last being June 2013 and carries the interest rate of 13.00% p.a.

2.3 Term Loans by Axis Bank and IFCI Limited are secured by first charge on all immovable properties by deposit of title deeds and second charge on all current assets both present and future and guaranteed by a director of a company in his personal capacity.

3.1 Working capital facilities sanctioned by State Bank of India, Axis Bank and State Bank of Patiala are secured by first charge on all current assets both present and future. These are further secured by way of second charge on the immovable properties of the company and also guaranteed by a director of the company in his personal capacity. Average rate of interest is 12.15% p.a.

4.1 Trade Payables includes an amount of S 4 Lacs to subsidiary M/s Pennar Engineered Building Systems Limited.

4.2 Dues to Micro, Small and Medium enterprises has been determined to be S Nil to the extent such parties have been identified on the basis of information available with the company.

5.1 The company has provided a collateral security, a lien on fixed deposit of S 200 Lacs towards the Term Loans and Working Capital Loans taken by subsidiary M/s Pennar Engineered Building Systems Limited.

5.2 Out of the margin money balance, an amount of S 155 Lacs has maturity period of more than 12 months.

6.1 During the year company has paid S 21.35 Lacs to Pennar Enviro Limited towards the share application money (S 0.5 Per share) for allotment of 42,70,000 equity shares of S 10 each at par.

7.1 Raw materials purchases includes carriage inwards of S 93.6 Lacs (previous year S 138.0 Lacs), material handling charges and clearing & forwarding charges of S 132.5 Lacs (previous year S 38.9 Lacs).

8 Contingent Liabilities: (S in Lacs)

i) Bank Guarantees given by banks 379 292

ii) Corporate Guarantee given for loans taken by subsidiary 13,813 8,952

iii) Claims by Customs & Sales Tax 210 437

iv) Estimated amount of contracts remaining to be executed on capital account and not provided for (net) 360 3,105

v) LC/Bills Discounted 3,590 5,531

8.1 Corporate guarantee to the tune of S 8952 Lacs and S 4861 Lacs has been given to State Bank of India and Axis Bank Limited for Term Loans and Working capital loans taken by its subsidiary M/s Pennar Engineered Building Systems Ltd (PEBSL). The company also provided a collateral security, a lien on fixed deposit of S 200 lacs and pledge of shares of Pennar Engineered Building Systems Ltd to the extent of 61,50,000 shares amounting to S 615 Lacs.

8.2 Out of the disputed due amount of S 219 Lacsagainst Entry Tax on CIX, an amount of S 53 Lacshas been deposited. The Unpaid amount is 165 Lacs

9 Segment Details

The company is engaged in manufacture of steel products, viz Cold Rolled Steel Strips (CRSS) and Cold Formed Metal Profiles (CRFS) which in the context of Accounting Standard -17 issued by the Institute of Chartered Accountants of India is considered as a single segment.

10 Figures for the previous year have been regrouped/reclassified/recast wherever necessary. Figures are rounded off to the nearest Lac of S.


Mar 31, 2011

(Amounts expressed in Indian Rupees & in lacs unless otherwise stated).

1. Contingent Liabilities: (Rs. in lacs)

As at As at 31.03.2011 31.03.2010

i) Bank Guarantees given by Banks 292.3 292.3

ii) Corporate Guarantee given for Loans taken by subsidiary 8952.0 6100.0

iii) Claims by Customs & Sales Tax 437.4 437.4

iv) Estimated amount of Contracts remaining to be executed on Capital account and not Provided for (net of advances) 3104.7 481.4

2. Preference Shares Series B:

(a) 1,66,49,119 number of Cumulative Redeemable Preference Shares of Rs. 5/- each fully paid up and carrying 0.01% rate of interest are redeemable at par in three equal annual installments of Rs. 1.66, Rs. 1.67 and Rs. 1.67 per share respectively commencing from the year 2013 – 14 and ending in the year 2015 – 16.

(b) 9,04,180 number of Cumulative Redeemable Preference Shares of Rs. 5/- each issued to IFCI on conversion of Funded Interest Term Loans and carrying interest rate of 0.01% are redeemable at par in 10 quarterly installments from 01.10.2013 to 01.01.2016.

(c) Dividend has been provided on the cumulative preference shares for the year 2010–11.

3. Secured Loans:

a) Term Loans by Axis Bank and IFCI Limited are secured by joint equitable mortgage by deposit of title deeds of all immovable properties and first charge by way of hypothecation of all movable properties both present and future.

b) Working Capital facilities sanctioned by State Bank of India, Axis Bank and State Bank of Patiala are secured by hypothecation of raw materials, stock in process, finished goods, stores and spares and book debts both present and future. These are further secured by way of second charge on the fixed assets of the Company.

c) The above loans as mentioned in (a) and (b) are guaranteed by a director of the company in his personal capacity.

4. Corporate Guarantee:

Corporate guarantee to the tune of Rs. 8952 lacs has been given to State Bank of India for Term Loans and Working Capital loans taken by its subsidiary M/s Pennar Engineered Building Systems Ltd (PEBSL). The company also provided a collateral security, a lien on fixed deposit of Rs. 200 lacs and pledge of shares of Pennar Engineered Building Systems Ltd to the extent of 61,50,000 shares amounting to Rs. 615 lacs.

5. Dues to Micro, Small and Medium Enterprises

The amount due to Micro, Small and Medium Enterprises as defined in the " The Micro, Small and Medium Enterprises Development Act, 2006 " has been determined to the extent such parties have been identified on the basis of information available with the company.

6. Related Party Disclosures:

a) Names of Related Parties

i) Associate Companies : Pennar Engineered Building Systems Limited

: Pennar Chemical Limited

: Pennar Aluminium Company Limited

: Saven Technologies Limited

: Pennar Building Systems Pvt Limited

(Subsidiary of Pennar Engineered Building Systems Limited)

: Pennar Logistics Limited

ii) Key Management personnel : Mr. Nrupender Rao

: Mr. Ch. Anantha Reddy

: Mr Aditya N Rao

iii) Relatives of Key Management Personnel : Mrs J Rajya Lakshmi

7. Employee Benefits under defined Benefit Plans

c) Bonus

Salaries & Wages accounted during the year includes an amount of Rs. 21.21 lacs paid towards bonus for the previous year.

8. Segment Details

The company is engaged in manufacture of steel products, viz Cold Rolled Steel Strips (CRSS) and Cold Formed Metal Profiles which in the context of Accounting Standard -17 issued by the Institute of Chartered Accountants of India is considered as a single segment.

9. Unsecured Loans

a. Fixed Deposits

During the year the company has paid the outstanding fixed deposits and the balance amount outstanding as on 31.03.2011 is nil.

10. Raw materials purchases includes carriage inwards of Rs. 138.0 lacs ( previous year Rs. 69.3 lacs ), material handling charges and clearing & forwarding charges of Rs. 38.9 lacs ( previous year Rs. 37.1 lacs ).

11. Confirmations are to be received in respect of amounts relating to some Debtors, Creditors and Loans & Advances.

12. The sundry debtors above 180 days receivables of Rs. 126.5 lacs ( previous year Rs. 77.4 lacs ) are from customers on whom legal action has been initiated.

13. Figures for the previous year have been regrouped / reclassified / recast wherever necessary. Figures are rounded off to the nearest lacs with single decimal.


Mar 31, 2010

(Amounts expressed in Indian Rupees & in Lacs unless otherwise stated). 1. Contingent Liabilities: (Rs. in Lacs)

As at As at

31.03.2010 31.03.2009 i) Bank Guarantees given by Banks 292.3 261.4

ii) Corporate Guarantee given for Loans taken by subsidiary 6100.0 -

iii) Claims by Customs & Sales Tax 437.4 437.4

iv) Estimated amount of Contracts remaining to be executed on

Capital account and not Provided for (net of advances) 481.4 -

v) *Claims Contested by the company - 81.0

* The claims contested by the company amounting to Rs. 81 lacs relate to Corporate Guarantee given by erstwhile NSL Limited (which was merged with this company vide the order of the Honble High Court of Andhra Pradesh dated 18.06.1998) to the working capital bankers for the loans taken by Nagarjuna Coated Tubes Limited, the then associate concern of NSL Limited. During the year, the company received discharge certificate from the working capital banker as the matter has been settled by the original promoters of NSL Limited.

2. Buyback of equity shares:

Pursuant to the Board of Directors approval for buyback of equity shares under section 77A of the Companies Act, 1956, the Company has bought back 44,53,479 equity shares of Rs. 5/- each through open market transactions for an aggregate amount of Rs. 12,45,21,520/-. Out of the said Rs. 12,45,21,520/-, an amount of Rs. 10,22,54,125/- has been debited to share premium account and the balance amount of Rs. 2,22,67,395/- has been reduced from share capital account.

The Capital Redemption Reserve has been created out of current year profits for Rs. 2,22,67,395/- being the nominal value of shares bought back in terms of section 77AA of the Companies Act, 1956.

3. Preference Shares Series B:

(a) Cumulative Redeemable Preference Shares of Rs. 5/- each fully paid up and carrying 0.01% rate of interest are redeemable at par in three equal annual installments of Rs. 1.66, Rs. 1.67 and Rs. 1.67 per share respectively commencing from the year 2013-14 and ending in the year 2015-16.

(b) Cumulative Redeemable Preference Shares of Rs. 5/- each issued to I F C I on conversion of Funded Interest Term Loans and carrying interest rate of 0.01% are redeemable at par in 10 quarterly installments from 01,10.2013 to 01.01.2016.

(c) Dividend has been provided on the cumulative preference shares for the year 2009-10.

4. Secured Loans:

a) Term Loans by Axis Bank and IFCI Limited are secured by joint equitable mortgage by deposit of title deeds of all immovable properties and first charge by way of hypothecation of all movable properties both present and future.

b) Working Capital facilities sanctioned by State Bank of India, Axis Bank and State Bank of Patiala are secured by hypothecation of raw materials, stock in process, finished goods, stores and spares and book debts both present and future. These are further secured by way of second charge on the fixed assets of the Company.

c) A Term Loan of Rs. 767 Lacs has been availed from Axis Bank during the year..

d) The above loans as mentioned in (a) to (c) are guaranteed by a director of the company in his personal capacity.

5. Corporate Guarantee:

Corporate guarantee to the tune of Rs. 61 crores has been given to State Bank of India for loans taken by its subsidiary M/s Pennar Engineered Building Systems Limited (PEBS). The company also provided a collateral security, a lien on fixed deposit of Rs. 2 crores and pledge of shares of Pennar Engineered Building Systems Limited to the extent of 61,50,000 shares amounting to Rs. 6.15 crores.

6. Investments:

During the year the company has been allotted 185 Lacs equity shares of Rs. 10/- each at par in Pennar Engineered Building Systems Limited, a subsidiary.

7. Dues to Micro, Small and Medium Enterprises:

The company has put in place a suitable system for identifying the vendors coming under the purview of the Micro, Small and Medium Enterprises Development Act, 2006. Since the company has not received any information, in this regard, from the vendors, disclosure relating to amounts unpaid as at the year end together with interest paid / payable under this Act could not be ascertained.

8. Unsecured Loans:

a. Fixed Deposits

No fresh deposits were accepted during the year. The amount of Rs, 16.3 Lacs (Previous year 18.1 Lacs) outstanding at the year end is against claims not received by the company

9. Raw materials purchases includes carriage inwards of Rs. 69.3 Lacs, material handling charges and clearing & forwarding charges of Rs. 37.1 Lacs.

10. Confirmations are still to be received in respect of the amounts relating to Debtors, Creditors and Loans & Advances.

11. The sundry debtors above 180 days receivables of Rs. 77.4 Lacs are from customers on whom legal action has been initiated.

12. In respect of Gratuity benefit pertaining to employees and with reference to accounting standard -15, the company has taken a Group Gratuity Policy for accruing liability for gratuity under the Payment of Gratuity Act with the LIC of India and the liability amount has been calculated on the basis of actuarial valuation. Leave encashment has been provided for on the basis of actuarial valuation.

13. Figures for the previous year have been regrouped / reclassified / recast wherever necessary. Figures are rounded off to the nearest rupee.

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