Notes to Accounts of Pennar Industries Ltd.

Mar 31, 2025

2.9 Provisions, Contingent Liabilities and Contingent
Assets:

Provisions involving substantial degree of estimation
in measurement are recognised when there is a legal
or constructive obligation as a result of past event and
it is probable that there will be an outflow of resources
and a reliable estimate can be made of the amount of
obligation.

Provisions are not recognised for future operating
losses. The amount recognised as a provision is the
best estimate of the consideration required to settle
the present obligation at the end of the reporting
period, taking into account the risks and uncertainties
surrounding the obligation.

Provision for onerous contracts. i.e. contracts where the
expected unavoidable cost of meeting the obligations
under the contract exceed the economic benefits
expected to be received under it, are recognised when
it is probable that an outflow of resources embodying
economic benefits will be required to settle a present
obligation as a result of an obligating event based on a
reliable estimate of such obligation.

Provision is made for costs associated with
dismantling of the property, plant and equipment.
Such dismantling costs are normally incurred at the
end of the estimated useful life of the assets. These
costs are assessed by the management on an annual
basis and are capitalised to the respective block of
assets. A corresponding provision is created for the
said costs.

The capitalised asset is charged to the statement of
profit and loss over the life of the operation through
the depreciation of the asset and the provision is
increased each period via unwinding the discount on
the provision.

Contingent liabilities are not recognised and are
disclosed by way of notes to the financial statements
when there is a possible obligation arising from past
events, the existence of which will be confirmed only
by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control
of the Group or when there is a present obligation that
arises from past events where it is either not probable
that an outflow of resources will be required to settle
the same or a reliable estimate of the amount in this
respect cannot be made.

Contingent assets are not recognised but disclosed in
the Financial Statements by way of notes to accounts
when an inflow of economic benefits is probable.

2.10 Cash and cash equivalents and Cash flow statements:

Cash comprises cash on hand, in bank and demand
deposits with banks. The Company considers all
highly liquid financial instruments, which are readily
convertible into cash and have original maturities of
three months or less from the date of purchase, to be
cash equivalents. Such cash equivalents are subject to
insignificant risk of changes in value.

Cash flows are reported using indirect method, whereby
profit / (loss) after tax is adjusted for the effects of
transaction of non- cash nature and any deferrals or
accruals of past or future cash receipts or payments.
The cash flows from Operating, investing and financing
activities of the Company are segregated based on the
available information.

2.11 Revenue:

Revenue is recognised to the extent that it is highly
probable that the economic benefits will flow to the
Company and the revenue can be reliably measured,
regardless of when the payment is being made.

Revenue towards satisfaction of a performance
obligation is measured at the amount of transaction
price (net of variable consideration) allocated to
that performance obligation. The transaction price of
goods sold and services rendered is net of variable
consideration on account of various discounts and
schemes offered by the Company as part of the
contract and excluding taxes or duties collected on
behalf of the Government.

The Company recognises revenue for supply of
goods to customers against orders received. The
majority of contracts that Company enters into
relate to sales orders containing single performance
obligations for the delivery of products as per Ind

AS 115. Product revenue is recognised when control
of the goods is passed to the customer. The point at
which control passes is determined based on the
terms and conditions by each customer arrangement,
but generally occurs on delivery to the customer.
Revenue is not recognised until it is highly probable
that a significant reversal in the amount of cumulative
revenue recognised will not occur.

With respect to contracts where revenue is recognised
over time, the Company measures the value of services
for which control is transferred to the customer over
time based on certification of work completed. In cases
where the work performed till the reporting date has
not reached the milestone specified in the contract, the
Company recognises revenue only to the extent that it
is highly probable that the customer will acknowledge
the same.

When it is probable that total contract costs will exceed
total contract revenue, the expected loss is recognised
as an expense in the Statement of Profit and Loss in
the period in which such probability occurs. Due to
the uncertainties attached, the revenue on account
of extra claims are accounted for at the time of
acceptance / settlement by the customers.

Revenue earned but not billed to customers against
erection contracts is reflected as "Contract assets”
under "Other financial assets”. Billings on incomplete
contracts in excess of accrued costs and accrued
profits are included in other current liabilities as
"Contract liabilities”.

Due to the uncertainties attached, the revenue on
account of extra claims are accounted for at the time
of acceptance/ settlement by the customers.

Interest, Dividend and Claims:

Dividend income is recognised when the right to
receive payment is established. Interest has been
accounted using effective interest rate method.
Insurance claims/ other claims are accounted as and
when admitted /settled.

Export Benefits:

Export benefits arising on account of entitlement for
duty-free imports are accounted for through import of
materials. Other export benefits are accounted for as
and when the ultimate reliability of such benefits are
established.

Government grants, subsidies and export incentives:

Grants from the government are recognised at their fair
value where there is a reasonable assurance that the
grant will be received and the Company will comply
with all attached conditions. Government grants
relating to income are deferred and recognised in the
profit or loss over the period necessary to match them

with the costs that they are intended to compensate
and presented within other income. Government
grants relating to the purchase of property, plant and
equipment are included in non-current liabilities as
deferred income and are credited to profit or loss on
a straight-line basis over the expected lives of the
related assets and presented within other income.

Income from sales tax and power incentives are
recognised on accrual basis, when the right to receive
the credit is established and there is no significant
uncertainty regarding the ultimate collection.

2.12 Property, plant and equipment (PPE):

PPE are stated at cost, less accumulated depreciation
and impairment, if any. Costs directly attributable to
the acquisition are capitalised until the PPE are ready
for use, as intended by management.

The Company depreciates PPE over their estimated
useful lives using the straight-line method.
Depreciation methods, useful lives and residual values
are reviewed periodically including at each financial
year-end.

An item of PPE is derecognised upon disposal or when
no future economic benefits are expected to arise
from the continued use of the asset. Any gain or loss
arising on the disposal or retirement of an item of
PPE is determined as the difference between the sales
proceeds and the carrying amount of the asset and is
recognised in other income in the statement of profit
or loss.

The cost of a self-constructed item of PPE comprises
the cost of materials, direct labour and any other
costs directly attributable to bringing the item to
its intended working condition and estimated costs
of dismantling, removing and restoring the site on
which it is located, wherever applicable. Borrowing
costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are
included in the cost of that asset. Such borrowing costs
are capitalised as part of the cost of the asset when
it is probable that they will result in future economic
benefits to the entity and the costs can be measured
reliably.

2.13 Depreciation and amortization

Depreciation on PPE except as stated below, is
provided as per Schedule II of the Companies Act, 2013
on straight line method. Depreciation on upgradation
of PPE is provided over the remaining useful life of the
assets. No depreciation is charged on Freehold land.

Depreciation on PPE commences when the assets
are ready for their intended use. Based on above, the
useful lives as estimated for other assets considered
for depreciation are as follows:

Depreciation methods, useful lives, residual values
are reviewed and adjusted as appropriate, at each
reporting date. Assets costing less than ? 5,000 each
are fully depreciated in the year of capitalization.

The Company, based on technical assessment made
by technical expert and management estimate,
depreciates certain items of buildings, plant and
machinery, factory equipment (Electrical), office
equipment and computers which are different
from the useful life prescribed in Schedule II to the
Companies Act, 2013. The management believes that
these estimated useful lives are realistic and reflect
fair approximation of the period over which the assets
are likely to be used.

2.14 Investment property

Property that is held for long term rental yields or
for capital appreciation or for both, and that is not
occupied by the Company, is classified as investment
property. Investment properties are initially measured
at cost, including transaction costs. Subsequent to
initial recognition, investment properties are stated at
cost less accumulated depreciation and accumulated
impairment loss, if any. When the use of property
changes from owner occupied to investment property,
the property is reclassified as investment property at
it''s carrying amount on the date of reclassification.
The useful life of investment property is estimated at
60 yrs based on technical evaluation performed by
management''s expert.

Investment properties are derecognised either
when they have been disposed off or when they
are permanently withdrawn from use and no future
economic benefit is expected from their disposal. The
difference between the net disposal proceeds and the
carrying amount of the asset is recognised in profit
and loss in the year of derecognition.

Income received from investment property is
recognised in the Statement of Profit and Loss on a
straight-line basis over the term of the lease.

Depreciation on investment property

The Company depreciates Investment Property over

their estimated useful lives using the straight-line
method. Depreciation methods, useful lives and
residual values are reviewed periodically including at
each financial year-end.

2.15 Intangibles assets

Intangible assets are stated at cost comprising of
purchase price inclusive of duties and taxes less
accumulated amount of amortization and impairment
losses. Such assets are amortised over the useful
life using straight line method and assessed for
impairment whenever there is an indication of the
same.

Cost of computer software packages (ERP and others)
allocated/amortised over a period of 10 years/ 5 years.
License fees, over the duration of license or 10 years
whichever is less.

The Company, based on technical assessment made
by technical expert and management estimate,
amortizes the software packages over estimated
useful lives which are different from the useful life
prescribed in Schedule II to the Companies Act, 2013.
The management believes that these estimated useful
lives are realistic and reflect fair approximation of the
period over which the assets are likely to be used.

Depreciation methods, useful lives and residual values
are reviewed, and adjusted as appropriate, at each
reporting date.

2.16 De-recognition of tangible and intangible assets

An item of PPE is de-recognised upon disposal or
when no future economic benefits are expected to
arise from its use or disposal. Gain or loss arising on the
disposal or retirement of an item of PPE is determined
as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in the
Statement of Profit and Loss.

2.17 Impairment of tangible and intangible assets

Tangible and intangible assets are reviewed at each
balance sheet date for impairment. In case events and
circumstances indicate any impairment, recoverable
amount of assets is determined. An impairment
loss is recognised in the statement of profit and
loss, whenever the carrying amount of assets either
belonging to Cash Generating Unit (CGU) or otherwise
exceeds recoverable amount. The recoverable amount
is the higher of assets'' fair value less cost of disposal
and its value in use. In assessing value in use, the
estimated future cash flows from the use of the assets
are discounted to their present value at an appropriate
rate.

Impairment losses recognised earlier may no
longer exist or may have come down. Based on such
assessment at each reporting period the impairment

loss is reversed and recognised in the Statement of
Profit and Loss. In such cases the carrying amount of
the asset is increased to the lower of its recoverable
amount and the carrying amount that has been
determined, net of depreciation, had no impairment
loss been recognised for the asset in prior years.

2.18 Employee benefit plans:

Employee benefits include provided fund,
superannuation fund, employee''s state insurance
scheme, gratuity and compensated absences.

Post Employment Obligations:

Defined Contribution Plans:

Contributions in respect of Employees Provident Fund
and Pension Fund which are defined contribution
schemes, are made to a fund administered and
managed by the Government of India and are charged
as an expense based on the amount of contribution
required to be made and when service are rendered by
the employees.

Contributions under the superannuation plan, which
is a defined contribution scheme, are made to a fund
administered and managed by the Life Insurance
Corporation of India and are charged as an expense
based on the amount of contribution required to
be made and when services are rendered by the
employees.

Defined benefit plans Gratuity:

The Company accounts for its liability towards Gratuity
based on actuarial valuation made by an independent
actuary as at the balance sheet date using projected
unit credit method. The liability recognised in the
balance sheet in respect of the gratuity plan is the
present value of the defined benefit obligation at the
end of the reporting period less the fair value of the
plan assets.

The present value of the defined benefit obligation
is determined by discounting the estimated future
cash outflows by reference to market yields at the
end of the reporting period on government bonds
that have terms approximating to the terms of the
related obligation. The net interest cost is calculated
by applying the discount rate to the net balance of the
defined obligation and the fair value of plan assets.
This cost is included in the employee benefit expense
in the statement of profit and loss. Remeasurement
gains and losses arising from experience adjustments
and changes in actuarial assumptions are recognised
in the period in which they occur, directly in other
comprehensive income. Changes in the present
value of the defined benefit obligation resulting from
plan amendments or curtailments are recognised
immediately in the statement of profit and loss as past
service cost.

Compensated absences:

The employees of the Company are entitled
to compensated absences. The employees can
carry forward a portion of the unutilised accrued
compensated absence and utilize it in future periods
or receive cash compensation at retirement or
termination of employment for the unutilised accrued
compensated absence. The Company records an
obligation for compensated absences in the period in
which the employee renders the services that increase
this entitlement. The Company measures the expected
cost of compensated absence based on actuarial
valuation made by an independent actuary as at the
balance sheet date on projected unit credit method.

Other short-term employee benefits:

Other Short-term employee benefits, including
performance incentives expected to be paid in
exchange for the services rendered by employees
are recognised during the period when the employee
renders service.

2.19 Financial instruments

Financial assets and financial liabilities are recognized
when the Company becomes a party to the contractual
provisions of the instrument.

Financial assets and financial liabilities are initially
measured at fair value except for trade receivables
that do not contain a significant financing component,
which are measured at transaction price. Transaction
costs that are directly attributable to the acquisition
or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities
at fair value through profit or loss) are added to or
deducted from the fair value of the financial assets
or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to
the acquisition of financial assets or financial liabilities
at fair value through profit or loss are recognized
immediately in Statement of profit or loss.

For the purposes of subsequent measurement,
financial instruments of the Company are classified
in the following categories: non-derivative financial
assets comprising amortised cost, debt instruments
at fair value through other Comprehensive Income
(FVTOCI), equity instruments at FVTOCI on fair
value through profit and loss account (FVTPL), non¬
derivative financial liabilities at amortised cost or
FVTPL, and derivative financial instruments (under the
category of financial assets or financial liabilities) at
FVTPL.

The classification of financial instruments depends
on the objective of the business model for which it is
held. Management determines the classification of its
financial instruments at initial recognition.

a. Financial assets

Recognition and initial measurement:

Financial assets include Investments, Trade
receivables, Advances, Security deposits, cash
and cash equivalents, loans etc. Such assets are
initially recognised at fair value or transaction
price, as applicable, when the Company becomes
party to contractual obligations. The transaction
price includes transaction costs unless the asset
is being fair valued through the Statement of
Profit and Loss All other financial instruments
(including regular way purchases and sales of
financial assets) are recognised on the trade
date, which is the date on which the Company
becomes a party to the contractual provisions of
the instrument.

Classification:

Management determines the classification of
an asset at initial recognition depending on the
purpose for which the assets were acquired. The
subsequent measurement of financial assets
depends on such classification.

Financial assets are classified as those measured
at:

(i) amortised cost, where the financial assets
are held solely for collection of cash flows
arising from payments of principal and / or
interest.

(ii) fair value through other comprehensive
income (FVTOCI), where the financial assets
are held not only for collection of cash flows
arising from payments of principal and
interest but also from the sale of such assets.
Such assets are subsequently measured at
fair value, with unrealised gains and losses
arising from changes in the fair value being
recognised in other comprehensive income.

(iii) fair value through profit or loss (FVTPL),
where the assets are managed in accordance
with an approved investment strategy
that triggers purchase and sale decisions
based on the fair value of such assets. Such
assets are subsequently measured at fair
value. Unrealised gains and losses arising
from changes in the fair value, including
interest income and dividend income, if
any, are recognised in ''other income'' in the
Statement of Profit and Loss in the period in
which they arise.

Trade Receivables, Advances, Security
Deposits, Cash and Cash equivalents etc.
are classified for measurement at amortised
cost while investments may fall under any of
the aforesaid classes.

Impairment:

The Company assesses at each reporting
date whether a financial asset (or a group of
financial assets) such as investments, trade
receivables, advances and security deposits
held at amortised cost and financial assets
that are measured at fair value through
other comprehensive income are tested
for impairment based on evidence or
information that is available without undue
cost or effort. Expected credit losses are
assessed and loss allowances recognised
if the credit quality of the financial asset
has deteriorated significantly since initial
recognition.

Reclassification:

When and only when the business model is
changed, the Company shall reclassify all
affected financial assets prospectively from
the reclassification date as subsequently
measured at amortised cost, fair value
through other comprehensive income or fair
value through profit or loss without restating
the previously recognised gains, losses or
interest and in terms of the reclassification
principles laid down in the Ind AS relating to
Financial Instruments.

Derecognition:

Financial assets are derecognised when the
right to receive cash flows from the assets
has expired, or has been transferred, and the
Company has transferred substantially all of
the risks and rewards of ownership.

Concomitantly, if the asset is one that is
measured at:

(i) amortised cost, the gain or loss is recognised
in the Statement of Profit and Loss;

(ii) fair value through other comprehensive
income, the cumulative fair value
adjustments previously taken to reserves are
reclassified to the Statement of Profit and
Loss unless the asset represents an equity
investment, in which case the cumulative
fair value adjustments previously taken to
reserves are reclassified within equity.

b. Financial liabilities

Borrowings, trade payables and other financial

liabilities are initially recognised at fair value

and are subsequently measured at amortised

cost. Any discount or premium on redemption
/ settlement is recognised in the Statement of
Profit and Loss as finance cost over the life of the
liability using the effective interest method and
adjusted to the liability figure disclosed in the
Balance Sheet.

Financial liabilities are derecognised when
the liability is extinguished, that is, when the
contractual obligation is discharged, cancelled or
on expiry.

Offsetting Financial Instruments:

Financial assets and liabilities are offset and
the net amount is included in the Balance Sheet
where there is a legally enforceable right to offset
the recognised amounts and there is an intention
to settle on a net basis or realise the asset and
settle the liability simultaneously.

c. Derivative Financial Instruments:

The Company enters into derivative financial
instruments to manage its exposure to foreign
exchange rate risks, including foreign exchange
forward contracts.

Derivatives are initially recognised at fair value
at the date the derivative contracts are entered
into and are subsequently remeasured to their
fair value at the end of each reporting period. The
resulting gain or loss is recognised in profit or loss
immediately unless the derivative is designated
and effective as a hedging instrument, in which
event the timing of the recognition in profit
or loss depends on the nature of the hedging
relationship and the nature of the hedged item.

d. Foreign exchange gains and losses:

• For foreign currency denominated financial
for foreign currency denominated financial
assets measured at amortised cost and
FVTPL, the exchange differences are
recognised in profit or loss except for
those which are designated as hedging
instruments in a hedging relationship.

• Changes in the carrying amount of
investments in equity instruments at FVTOCI
relating to changes in foreign currency rates
are recognised in other comprehensive
income.

• For the purposes of recognizing foreign
exchange gains and losses, FVTOCI debt
instruments are treated as financial assets
measured at amortised cost. Thus, the
exchange differences on the amortised
cost are recognised in profit or loss and

other changes in the fair value of FVTOCI
financial assets are recognised in other
comprehensive income.

• For financial liabilities that are denominated
in a foreign currency and are measured at
amortised cost at the end of each reporting
period, the foreign exchange gains and losses
are determined based on the amortised cost
of the instruments and are recognised in the
statement of profit and loss.

• The fair value of financial liabilities
denominated in a foreign currency is
determined in that foreign currency and
translated at the spot rate at the end of the
reporting period. For financial liabilities that
are measured at FVTPL, the foreign exchange
component forms part of the fair value gains
or losses and is recognised in profit or loss.

e. Non-current Investments:

At each balance sheet date, the Company
assesses whether there is any indication that
an investment may be impaired. If any such
indication exists, the Company estimates the
recoverable amount. If the carrying amount of
the investment exceeds its estimated recoverable
amount, an impairment loss is recognised in the
Statement of Profit and Loss to the extent the
carrying amount exceeds recoverable amount.
The recoverable amount is the higher of an
investment''s fair value less costs of disposal and
value in use.

Investment in joint ventures are accounted for
using the ''equity method'' less accumulated
impairment, if any. Only share of net profits /
losses of joint ventures is considered Statement
of Profit and Loss. The carrying amount of the
investment in joint ventures is adjusted by the
share of net profits / losses in the Balance Sheet.

2.20 Critical accounting judgements and key sources of
estimation uncertainty

In the application of the Company''s accounting
policies the directors of the Company are required to
make judgements, estimates and assumptions about
the carrying amounts of assets and liabilities that are
not readily apparent from other sources. The estimates
and associated assumptions are based on historical
experience and other factors that are considered
to be relevant. Actual results may differ from these
estimates.

The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the

estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the
revision affects both current and future periods.

Critical judgements in applying accounting policies

The following are the critical judgements, apart from those involving estimations, that the directors have been made
in the process of applying the Company''s accounting policies and that have the most significant effect on the amounts
recognised in the financial statements.

Revenue recognition

In making their judgement, the management considered the detailed criteria for the recognition of revenue from the
sale of goods set out in Ind AS 115 and, in particular, whether the Company had transferred control over the goods to the
buyer.

Key sources of estimation uncertainty

Informaion about significant areas of estimation uncertainty and critical judgments in applying accounting policies
that have the most significant effect on the amounts recognised in the financial statements is included in the following

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Notes:

a) Refer Notes 17 (a) and 17 (c) for details of charge created on assets.

b) The title deeds of all immovable properties are held in the name of the Company except as disclosed in Note 36.

c) Borrowing costs capitalised during the year ended March 31,2025 amounted to ? 451 Lakhs (March 31,2024: 70 Lakhs).
These costs are directly attributable to the acquisition and construction of qualifying assets and have been capitalised
in accordance with Ind As 23 - Borrowing Costs.

The capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation was 9.85% (March
31,2024: 9.70%). This rate represents the weighted average of the borrowing costs applicable to the entity''s general
borrowings that are outstanding during the year.(Refer Note 27)

Notes:

i. Trade receivables includes retention money aggregating to ? 8,617 lakhs (March 31, 2024 : ? 7,736 lakhs).

ii. Expected credit loss (ECL):

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. Credit
risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness
of customers to which the Company grants credit in the normal course of business. Before accepting any new customer,
the Company assesses the potential customer''s credit quality.

As a practical expedient, the Company uses a provision matrix to determine impairment loss of its trade receivables.
The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and
is adjusted for forward looking estimates. The ECL allowance (or reversal) during the year is recognised in the statement
of profit and loss.

(b) Securities premium :

Securities premium represents the amount received in excess of the face value of the equity shares. The utilisation of
the securities premium is governed by the Section 52 of the Act.

(c) General reserve :

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes.
As the general reserve is created by a transfer from one component of equity to another and is not an item of other
comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

(d) Profit on forfeiture of shares :

Profit on forfeiture of shares pertains to profit on redemption of preference shares.

(e) Capital redemption reserve :

Capital redemption reserve has been created pursuant to the requirements of the Act under which the Company is
required to transfer certain amounts on redemption of the preference shares. The Company has redeemed the underlying
preference shares in the earlier years. The capital redemption reserve can be utilised for issue of bonus shares.

(f) Retained earnings :

Retained earnings reflects the Company''s undistributed earnings after taxes along with current year profit.

(g) Remeasurement of defined benefit plan, net of taxes :

Remeasurement of defined plan represents the remeasurement gains/(losses) arising from the actuarial valuation of the
defined benefit plan of the Company. The remeasurement gains/(losses) are recognized in other comprehensive income
and accumulated under this reserve within equity. The amounts recognized under this reserve are not reclassified to
statement of profit and loss.

(f) The returns of current assets for the quarter ended March 2024,June 2024, September 2024 and December 2024 filed by
the Company with banks are in agreement with the books of account. Company is yet to file return for the quarter ended
March 2025.

(g) The Provident Fund (PF) authorities have attached the Company''s cash credit account maintained with Axis Bank, in
relation to a PF demand amounting to ?98.55 lakhs. Pursuant to this, the cash credit facility was temporarily restricted to
the extent of the demanded amount. The Company has filed a writ petition before the Hon''ble High Court of Telangana.
The Court has granted relief by suspending the prohibitory order, subject to a lien being marked on the amount of
?98.55 lakhs. Consequently, the Company is permitted to operate the cash credit account, subject to this lien.

(a) Defined contribution Plan

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying
employees towards provident fund, employee state insurance and superannutaion fund which are defined contribution
plans. The Company has no obligations other than to make the specified contributions. The contributions are charged
to the statement of profit and loss as they accrue. The Company has recognised as an expense aggregating to ? 796
lakhs (2023-24:? 772 lakhs) in respect of the defined contribution plans.

(b) Post retirement benefit - Defined benefit

The employee''s gratuity fund scheme managed by Life Insurance Corporation of India and Birla sun life insurance are
defined benefit plan. The present value of obligation is determined bases on actuarial valuation using the projected
unit credit method, which recognizes each period of services as giving rise to additional unit of employee benefit
entitlement and measures each unit separately to build up the final obligation.

Peformance obligation:

Sale of products: Performance obligation in respect of sale of goods is satisfied when control of the goods is transferred to
the customer, generally on delivery of the goods and payment is generally due as per the terms of contract with customers.
Revenue from contracts: The performance obligation in respect of contracts is satisfied when the contract completed
and certified by the customer. In respect of these contracts, payment is generally due upon completion of contract and
acceptance of the customer.

Sales of services: The performance obligation in respect of services is satisfied when the service completed and accepted
by the customer. In respect of these services, payment is generally due upon completion of service and acceptance of the
customer.

31. Corporate social Responsibility

As per Section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least
2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR)
activities. The permitted activities are as per Schedule VII of the Companies Act, 2013, which are specifically identified
and approved by CSR Committee. The funds were utilised through the year on these activities.

The Company contributes towards Corporate Social Responsibility (CSR) activities as per the provisions of per Section
135 of the Companies Act, 2013. The Company constituted committee of Board and approved CSR policy. As per the said
policy, Company has incurred ?123 lakhs (2023-24 - ? 57 lakhs) during the year. The nature of CSR activities undertaken
by the Company includes promoting education, health care including preventive health care, sanitation, animal welfare,
rural development and sports.

The Company''s capital management objective is to maximise the total shareholder return by optimising cost of capital
through flexible capital structure that supports growth. Further, the Company ensures optimal credit risk profile to
maintain/enhance credit rating.

The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic
plans. The funding requirements are met through internal accruals and long-term/short-term borrowings. The Company
monitors the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio
of the Company.

For the purpose of capital management, capital includes issued equity capital, securities premium and all other reserves.
Net debt includes all long and short-term borrowings as reduced by cash and cash equivalents and investment in
mutual funds .

The Company''s Management reviews the capital structure of the Company on monthly basis. As part of this review, the
Management considers the cost of capital and the risks associated with each class of capital.

The table below summarises the total equity, net debt and net debt to equity ratio of the Company:

The Board oversees the risk management frame
work, develops and monitors the company''s risk
management policies. The risk management policies
are established to ensure timely identification
and evaluation of the risks, setting acceptable risk
thresholds, identifying and mapping controls against
these risks, monitor the risks and their limits, improve
risk awareness and transparency. Risk management
policies and systems are reviewed regularly to reflect
changes in the market conditions and company''s
activities to provide reliable information to the
management and the Board to evaluate the adequacy
of the risk management frame work in relation to the
risk faced by the Company.

The Management policies aims to mitigate the
following risks arising from the financial instruments

1. Market Risk

2. Credit Risk

3. Liquidity Risk
Market Risk

Market risk is the risk that the fair value of future cash
flows of a financial instrument will fluctuate because
of changes in the market prices. The Company is
exposed in the ordinary course of its business to risk
related to changes in foreign currency exchange rates,
commodity prices and interest rates.

The Company seeks to minimize the effects of these
risks by using derivative financial instruments to
hedge risk exposures. The use of financial derivatives
is governed by the company''s policies approved by the
Board of Directors, which provide written principles
on foreign exchange risk, interest rate risk, credit risk,
the use of financial derivatives and non-derivative
financial instruments, and the investment of excess
liquidity. Compliance with policies and exposure
limits is reviewed by the management and the internal
auditors on a continuous basis. The Company does
not enter into or trade financial instruments, including
derivatives for speculative purposes.

Credit Risk

Credit risk is the risk of financial loss to the Company
if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises

principally from the company''s receivables from
customers and investment securities. Credit risk arises
from cash held with banks and financial institutions, as
well as credit exposure to clients, including outstanding
accounts receivable. Credit risk is managed through
credit approvals, establishing credit limits and
continuously monitoring the creditworthiness of
customers to which the Company grants credit terms
in the normal course of business. The Company
establishes an allowance for doubtful debts and
impairment that represents its estimate of incurred
losses in respect of trade and other receivables and
investments.

Liquidity Risk

Liquidity risk is the risk that the Company will not be
able to meet its financial obligations as they become
due. The Company manages its liquidity risk by
ensuring, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due,
under both normal and stressed conditions, without
incurring unacceptable losses or risk to the Company''s
reputation.

The Company generates sufficient cash flow for
operations, which together with the available cash
& cash equivalents and short term investments
provide liquidity in the short term and long term. The
Company has established an appropriate liquidity
risk management framework for the management
of the Company''s short term, medium and long term
funding and liquidity management requirements.
The Company manages liquidity risk by maintaining
adequate reserves, banking facilities and reserve
borrowing facilities by continuously monitoring
forecast and actual cash flows, and by matching the
maturity profiles of financial assets and liabilities.

Foreign Currency Exchange Risk

The Company''s functional currency is Indian National
Rupees (INR). The Company undertakes transactions
denominated in foreign currencies; consequently,
exposure to exchange rate fluctuations arise.
Fluctuation in exchange rates affects the Company''s
revenue from export markets and the cost of imports,
primarily in relation to capital goods.

The carrying amounts of the Company''s monetary
assets and monetary liabilities at the end of reporting
period as follows:

Sensitivity analysis:

The Company is mainly exposed to fluctuations in US Dollar. The following table details the Company''s sensitivity to a
? 1 increase and decrease against the US Dollar. ? 1 is the sensitivity used when reporting foreign currency risk internally
to key management personnel and represents management''s assessment of the reasonably possible change in foreign
exchange rates. The sensitivity analysis includes only net outstanding foreign currency denominated monetary items
and adjusts their translation at the period end for a ? 1 change in foreign currency rates. A positive number below
indicates an increase in profit or equity where the Rupee strengthens by ? 1 against the US Dollar. For a ? 1 weakening
against the US Dollar, there would be a comparable impact on the profit or equity.

Commodity price risk

The Company''s revenue is exposed to the market risk of price fluctuations related to the purchase of steel products
used as Raw Material in manufacture of Finished Goods. The company manages the risk by forecasting its production
and the manufacturing plan. Raw Material purchases are made based on the evaluation of the steel prices aligned to
such production plans.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company is exposed to interest rate risk because funds are borrowed at both
fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable
interest rate. The borrowings of the Company are principally denominated in rupees with mix of fixed and floating rates
of interest. The Company has exposure to interest rate risk, arising principally on changes in base lending rates. The
Company uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirement for
its day to day operations like short term loans. The risk is managed by Company by maintaining an appropriate mix
between fixed and floating rate borrowings, ensuring the most cost-effective strategies are applied.

Liquidity Risk

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing
facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial
assets and liabilities.

The following tables details the company''s remaining contractual maturity for its non derivative financial liabilities with
agreed repayment periods. The table have been drawn up based on the undiscounted cash flows of financial liabilities
based on earliest date on which the Company can be required to pay.

Project execution plans are reviewed periodically on the basis of management judgement and estimates w.r.to further
business, technology developments/ economy/ industry/ regulatory environments and all the projects are assessed as per
periodic plans.

38. Other Statutory Information

(I) The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.

(ii) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013
or section 560 of Companies Act, 1956.

(iii) The Company does not have any charges which is yet to be registered with ROC beyond the statutory period. In respect
of satisfaction of charges (beyond the statutory period) amounting to ? Nil (March 31, 2024: with 2 bankers amounting
to ? 100,424 lakhs) and satisfaction of charge has been filed with ROC for the same for amounting to ? 1,00,422 lakhs.

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company has not been declared wilful defaulter by any bank or financial institution or government or any
government authority.

(vi) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(viii) The Company does not have any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as,
search or survey or any other relevant provisions of the Income Tax Act, 1961.

(ix) The Company has not revalued Its property plant and Equipment including right of use assets and intangible assets
during the year.

41 Subsequent Events

No significant subsequent events has bee observed which may require an adjustment/disclosure to the financial
statement.

42 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment
benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However,
the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code
when it comes into effect and will record any related impact in the period the Code becomes effective.

43 In accordance with Ind AS 108 "Operating segments”, segment information has been given in the consolidated financial
statements of Pennar Industries Limited and therefore no separate disclosure on segment information is given in these
financial statements.

44 The erstwhile subsidiary Company Pennar Engineered Building Systems Limited (PEBS) has raised funds through
Initial public offer (IPO) during financial year 2015-16 use of the net proceeds of the IPO is intended for the business
purposes such as repayment / prepayment of certain working capital facilities availed by the Company, financing the
procurement of infrastructure, general corporate purposes and share issue expense. As on March 31, 2025 an amount of
? 374 lakhs(March 31, 2024: ? 425 Lakhs) are unutilized funds which have been temporarily invested in mutual funds and
fixed deposits.

45 The Company has used two accounting software''s for maintaining its books of account which has a feature of recording
audit trail (edit log) facility, except that no audit trail feature was enabled at the database level respect of one of the
accounting software''s to log any direct data changes. Further, the audit trail (edit log) facility was not enabled at the
both the levels for another accounting software''s.

Further, to the extent enabled, audit trail feature has operated throughout the year for all relevant transactions recorded
in the accounting software. Also, there are no instances of audit trail feature being tampered during the year with.
Additionally, the audit trail of prior year has been preserved by the Company as per the statutory requirements for
record retention to the extent it was enabled and recorded in previous year.

46 These financial statements were approved for issue by the Company''s Board of Directors on May 30, 2025.

In terms of our report attached For and on behalf of the Board of Directors

For M S K A & Associates of Pennar Industries Limited

Chartered Accountants CIN: L27109TG1975PLC001919

Firm Registration Number : 105047W

Ananthakrishnan Govindan Aditya N. Rao Lavanya Kumar Rao K

Partner Membership No. 205226 Vice Chairman & Managing Director Whole Time Director

(DIN: 01307343) (DIN: 01710629)

Shrikant Bhakkad Mirza Mohammed Ali Baig

Chief Financial Officer Company Secretary

(M No: A29058)

Place: Hyderabad Place: Hyderabad

Date: May 30, 2025 Date: May 30, 2025

---

Mar 31, 2024

2.9 Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a legal or constructive obligation as a result of past event and it is probable that there will be an outflow of resources and a reliable estimate can be made of the amount of obligation.

Provisions are not recognised for future operating losses. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

Provision for onerous contracts. i.e. contracts where the expected unavoidable cost of meeting the obligations under the contract exceed the economic benefits expected to be received under it, are recognised when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event based on a reliable estimate of such obligation.

Provision is made for costs associated with dismantling of the property, plant and equipment. Such dismantling costs are normally incurred at the end of the estimated useful life of the assets. These costs are assessed by the management on an annual basis and are capitalised to the respective block of assets. A corresponding provision is created for the said costs.

The capitalised asset is charged to the statement of profit and loss over the life of the operation through the depreciation of the asset and the provision is increased each period via unwinding the discount on the provision.

Contingent liabilities are not recognised and are disclosed by way of notes to the financial statements when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group or when there is a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the same or a reliable estimate of the amount in this respect cannot be made.

Contingent assets are not recognised but disclosed in the Financial Statements by way of notes to accounts when an inflow of economic benefits is probable.

2.10 Cash and cash equivalents and Cash flow statements:

Cash comprises cash on hand, in bank and demand deposits with banks. The Company considers all highly liquid financial instruments, which are readily convertible into cash and have original maturities of three months or less from the date of purchase, to be cash equivalents. Such cash equivalents are subject to insignificant risk of changes in value.

Cash flows are reported using indirect method, whereby profit / (loss) after tax is adjusted for the effects of transaction of noncash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from Operating, investing and financing activities of the Company are segregated based on the available information.

2.11 Revenue:

Revenue is recognised to the extent that it is highly probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made.

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable consideration on account of various discounts and schemes offered by the Company as part of the contract and excluding taxes or duties collected on behalf of the Government.

The Company recognises revenue for supply of goods to customers against orders received. The majority of contracts that Company enters into relate to sales orders containing single performance obligations for the delivery of products as per Ind AS 115. Product revenue is recognised when control of the goods is passed to the customer. The point at which control passes is determined based on the terms and conditions by each customer arrangement, but generally occurs on delivery to the customer. Revenue is not recognised until it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur.

With respect to contracts where revenue is recognised over time, the Company measures the value of services for which control is transferred to the customer over time based on certification of work completed. In cases where the work performed till the reporting date has not reached the milestone specified in the contract, the Company recognises revenue only to the extent that it is highly probable that the customer will acknowledge the same.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense in the Statement of Profit and Loss in the period in which such probability occurs. Due to the uncertainties attached, the revenue on account of extra claims are accounted for at the time of acceptance / settlement by the customers.

Revenue earned but not billed to customers against erection contracts is reflected as "Contract assets” under "Other financial assets”. Billings on incomplete contracts in excess of accrued costs and accrued profits are included in other current liabilities as "Contract liabilities".

Due to the uncertainties attached, the revenue on account of extra claims are accounted for at the time of acceptance/ settlement by the customers.

Interest, Dividend and Claims:

Dividend income is recognised when the right to receive payment is established. Interest has been accounted using effective interest rate method. Insurance claims/ other claims are accounted as and when admitted /settled.

Export Benefits:

Export benefits arising on account of entitlement for duty-free imports are accounted for through import of materials. Other export benefits are accounted for as and when the ultimate realisability of such benefits are established.

Government grants, subsidies and export incentives:

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions. Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income. Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.

Income from sales tax and power incentives are recognised on accrual basis, when the right to receive the credit is established and there is no significant uncertainty regarding the ultimate collection.

2.12 Property, plant and equipment (PPE):

PPE are stated at cost, less accumulated depreciation and impairment, if any. Costs directly attributable to the acquisition are capitalised until the PPE are ready for use, as intended by management.

The Company depreciates PPE over their estimated useful lives using the straight-line method. Depreciation methods, useful lives and residual values are reviewed periodically including at each financial year-end.

An item of PPE is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of PPE is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in other income in the statement of profit or loss.

The cost of a self-constructed item of PPE comprises the cost of materials, direct labour and any other costs directly attributable to bringing the item to its intended working condition and estimated costs of dismantling, removing and restoring the site on which it is located, wherever applicable.

2.13 Depreciation and amortization

Depreciation on PPE except as stated below, is provided as per Schedule II of the Companies Act, 2013 on straight line method. Depreciation on upgradation of PPE is provided over the remaining useful life of the assets. No depreciation is charged on Freehold land.

Depreciation on PPE commences when the assets are ready for their intended use. Based on above, the useful lives as estimated for other assets considered for depreciation are as follows:

Depreciation methods, useful lives, residual values are reviewed and adjusted as appropriate, at each reporting date. Assets costing less than Rs. 5,000 each are fully depreciated in the year of capitalization.

The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of buildings, plant and machinery, factory equipment (Electrical), office equipment and computers which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.

2.14 Intangibles assets

Intangible assets are stated at cost comprising of purchase price inclusive of duties and taxes less accumulated amount of amortization and impairment losses. Such assets are amortised over the useful life using straight line method and assessed for impairment whenever there is an indication of the same.

Cost of computer software packages (ERP and others) allocated/amortised over a period of 10 years/ 5 years. License fees, over the duration of license or 10 years whichever is less.

The Company, based on technical assessment made by technical expert and management estimate, amortizes the software packages over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.

Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each reporting date.

2.15 De-recognition of tangible and intangible assets

An item of PPE is de-recognised upon disposal or when no future economic benefits are expected to arise from its use or disposal. Gain or loss arising on the disposal or retirement of an item of PPE is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the Statement of Profit and Loss.

2.16 Impairment of tangible and intangible Assets

Tangible and intangible assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of assets is determined. An impairment loss is recognised in the statement of profit and loss, whenever the carrying amount of assets either belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the higher of assets’ fair value less cost of disposal and its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at an appropriate rate.

Impairment losses recognised earlier may no longer exist or may have come down. Based on such assessment at each reporting period the impairment loss is reversed and recognised in the Statement of Profit and Loss. In such cases the carrying amount of the asset is increased to the lower of its recoverable amount and the carrying amount that has been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.

2.17 Employee benefit plans:

Employee benefits include provided fund, superannuation fund, employee’s state insurance scheme, gratuity and compensated absences.

Post Employment Obligations:

Defined Contribution Plans:

Contributions in respect of Employees Provident Fund and Pension Fund which are defined contribution schemes, are made to a fund administered and managed by the Government of India and are charged as an expense based on the amount of contribution required to be made and when service are rendered by the employees.

Contributions under the superannuation plan, which is a defined contribution scheme, are made to a fund administered and managed by the Life Insurance Corporation of India and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.

Defined benefit plans Gratuity:

The Company accounts for its liability towards Gratuity based on actuarial valuation made by an independent actuary as at the balance sheet date using projected unit credit method. The liability recognised in the balance sheet in respect of the gratuity plan is the present value of the defined benefit obligation at the end of the reporting period less the fair value of the plan assets.

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance of the defined obligation and the fair value of plan assets. This cost is included in the employee benefit expense in the statement of profit and loss. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in the statement of profit and loss as past service cost.

Compensated absences:

The employees of the Company are entitled to compensated absences. The employees can carry forward a portion of the unutilised accrued compensated absence and utilize it in future periods or receive cash compensation at retirement or termination of employment for the unutilised accrued compensated absence. The Company records an obligation for compensated absences in the period in which the employee renders the services that increase this entitlement. The Company measures the expected cost of compensated absence based on actuarial valuation made by an independent actuary as at the balance sheet date on projected unit credit method.

Other short-term employee benefits:

Other Short-term employee benefits, including performance incentives expected to be paid in exchange for the services rendered by employees are recognised during the period when the employee renders service.

2.18 Financial instruments

a. Derivative Financial Instruments:

The Company enters into derivative financial instruments to manage its exposure to foreign exchange rate risks, including foreign exchange forward contracts.

Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedging relationship and the nature of the hedged item.

b. De-recognition of financial assets and liabilities Financial assets:

The Company de-recognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and also recognizes a collateralised borrowing for the proceeds received.

On de-recognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset.

Financial liabilities:

The Company de-recognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or realize the asset and settle the liability simultaneously.

c. Foreign exchange gains and losses:

• For foreign currency denominated financial for foreign currency denominated financial assets measured at amortised cost and FVTPL, the exchange differences are recognised in profit or loss except for those which are designated as hedging instruments in a hedging relationship.

• Changes in the carrying amount of investments in equity instruments at FVTOCI relating to changes in foreign currency rates are recognised in other comprehensive income.

• For the purposes of recognizing foreign exchange gains and losses, FVTOCI debt instruments are treated as financial assets measured at amortised cost. Thus, the exchange differences on the amortised cost are recognised in profit or loss and other changes in the fair value of FVTOCI financial assets are recognised in other comprehensive income.

• For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in the statement of profit and loss.

• The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss.

2.19 Determination of fair values:

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may never actually be realised.

2.20 Impairment of assets

a. Financial assets:

The Company recognizes loss allowances using the expected credit loss (ECL) model for financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognised as an impairment gain or loss in profit or loss.

For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. The ECL loss allowance (or reversal) during the year is recognised in the statement of profit and loss.

b. Non-financial assets:

Intangible assets, intangible assets under development and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-inuse) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs. Intangible assets under development are tested for impairment annually.

If such assets are considered to be impaired, the impairment to be recognised in the Statement of Profit and Loss is measured by the amount by which the carrying value of the asset exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognised for the asset in prior years.

c. Non-current Investments:

At each balance sheet date, the Company assesses whether there is any indication that an investment may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the investment exceeds its estimated recoverable amount, an impairment loss is recognised in the Statement of Profit and Loss to the extent the carrying amount exceeds recoverable amount. The recoverable amount is the higher of an investment''s fair value less costs of disposal and value in use.

2.21 Critical accounting judgements and key sources of estimation uncertainty

In the application of the Company''s accounting policies the directors of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying accounting policies

The following are the critical judgements, apart from those involving estimations, that the directors have been made in the process of applying the Company''s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

Revenue recognition

In making their judgement, the management considered the detailed criteria for the recognition of revenue from the sale of goods set out in Ind AS 115 and, in particular, whether the Company had transferred control over the goods to the buyer.

2.22 Operating Cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle for the purpose of its assets and liabilities as current and non-current.

2.23 Standards (including amendments) issued but not yet effective

Ministry of Corporate Affairs ("MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

Nature of reserves:

(a) Capital reserve

Capital Reserve represents the gain on amalgamation. It is the excess of share capital issued and the amount of share capital of the transferor companies. It is made out of capital profits earned by the company which can be used only for special purposes and hence it is not freely available to be distributed among shareholders as the dividend.

(b) Securities premium account

Securities premium represents the amount received in excess of the face value of the equity shares. The utilisation of the securities premium is governed by the Section 52 of the Act.

15. Other equity (Contd..)

(c) General reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

(d) Profit on forfeiture of shares

Profit on forfeiture of shares pertains to profit on redemption of preference shares.

(e) Capital redemption reserve

Capital redemption reserve has been created pursuant to the requirements of the Act under which the Company is required to transfer certain amounts on redemption of the preference shares. The Company has redeemed the underlying preference shares in the earlier years. The capital redemption reserve can be utilised for issue of bonus shares.

(f) Retained earnings

Retained earnings reflects the Company''s undistributed earnings after taxes along with current year profit.

16. Borrowings (Contd..)

(c) Cash Credit and Working capital facilities sanctioned by consortium of bankers comprising State bank of India, Axis Bank, Yes Bank, ICICI Bank, HDFC Bank ,Indian Bank, Punjab National Bank and SBM Bank are secured by first pari passu charge on the entire current assets and second charge on fixed assets of the company along with other working capital lenders under consortium, and for SBI, exclusive pledge of 15,00,000 shares (March 31, 2023: Nil shares) of H 5 each of Pennar Industries Limited held by Pennar Holdings Private Limited (Promoter Company). These facilities are further secured by personal guarantee from Aditya N Rao (Vice - Chairman and Managing Director). These borrowings carried interest rate of 9.50% to 10.95% (March 31, 2023: 9.25% to 10.70%).

Notes:

Post Retirement Employee Benefits

(a) Post retirement benefit - Defined contribution

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards provident fund and employee state insurance which are defined contribution plans. The Company has no obligations other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue. The Company has recognised as an expense aggregating to H 772 lakhs (2022-23:H 748 lakhs) in respect of the defined contribution plans.

(b) Post retirement benefit - Defined benefit

The employee''s gratuity fund scheme managed by Life Insurance Corporation of India and Birla sun life insurance are defined benefit plan. The present value of obligation is determined bases on actuarial valuation using the projected unit credit method, which recognizes each period of services as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

30. Corporate social Responsibility

As per Section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The permitted activities are as per Schedule VII of the Companies Act, 2013, which are specifically identified and approved by CSR Committee. The funds were utilised through the year on these activities.

The Company contributes towards Corporate Social Responsibility (CSR) activities as per the provisions of per Section 135 of the Companies Act, 2013. The Company constituted committee of Board and approved CSR policy. As per the said policy, Company has incurred H57 lakhs (2022-23 - H 59 lakhs) during the year. The nature of CSR activities undertaken by the Company includes promoting education, health care including preventive health care, sanitation, animal welfare, rural development and sports.

a) Gross amount required to be spent by the Company during the year is H 57 lakhs (2022-23 : H 59 lakhs)

33. Financial Instruments

a. Capital Management

The Company’s capital management objective is to maximise the total shareholder return by optimising cost of capital through flexible capital structure that supports growth. Further, the Company ensures optimal credit risk profile to maintain/ enhance credit rating.

The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic plans. The funding requirements are met through internal accruals and long-term/short-term borrowings. The Company monitors the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

For the purpose of capital management, capital includes issued equity capital, securities premium and all other reserves. Net debt includes all long and short-term borrowings as reduced by cash and cash equivalents and investment in mutual funds .

The Company’s Management reviews the capital structure of the Company on monthly basis. As part of this review, the Management considers the cost of capital and the risks associated with each class of capital.

The Management assessed that fair value of cash and cash equivalents, trade receivables, other current financial assets, trade payables, borrowings and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than a forced or a liquidation sale.

Investments in other equity instruments (quoted and unquoted) are measured at cost through initial designation in accordance with Ind-AS 109 - Financial Instruments.

Investments in mutual funds are mandatorily measured at fair value. c. Financial risk management

The Board oversees the risk management frame work, develops and monitors the company''s risk management policies. The risk management policies are established to ensure timely identification and evaluation of the risks, setting acceptable risk thresholds, identifying and mapping controls against these risks, monitor the risks and their limits, improve risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and company''s activities to provide reliable information to the management and the Board to evaluate the adequacy of the risk management frame work in relation to the risk faced by the Company.

The Management policies aims to mitigate the following risks arising from the financial instruments

1. Market Risk

2. Credit Risk

3. Liquidity Risk

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in the market prices. The Company is exposed in the ordinary course of its business to risk related to changes in foreign currency exchange rates, commodity prices and interest rates.

The Company seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the company''s policies approved by the Board of Directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the management and the internal auditors on a continuous basis. The Company does not enter into or trade financial instruments, including derivatives for speculative purposes.

Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the company''s receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.

The Company generates sufficient cash flow for operations, which together with the available cash & cash equivalents and short term investments provide liquidity in the short term and long term. The Company has established an appropriate liquidity risk management framework for the management of the Company''s short term, medium and long term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

Foreign Currency Exchange Risk

The Company''s functional currency is Indian National Rupees (INR). The Company undertakes transactions denominated in foreign currencies; consequently, exposure to exchange rate fluctuations arise. Fluctuation in exchange rates affects the Company''s revenue from export markets and the cost of imports, primarily in relation to capital goods.

The carrying amounts of the Company''s monetary assets and monetary liabilities at the end of reporting period as follows:

Commodity price risk

The Company''s revenue is exposed to the market risk of price fluctuations related to the purchase of steel products used as Raw Material in manufacture of Finished Goods. The company manages the risk by forecasting its production and the manufacturing plan. Raw Material purchases are made based on the evaluation of the steel prices aligned to such production plans.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees with mix of fixed and floating rates of interest. The Company has exposure to interest rate risk, arising principally on changes in base lending rates. The Company uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirement for its day to day operations like short term loans. The risk is managed by Company by maintaining an appropriate mix between fixed and floating rate borrowings, ensuring the most cost-effective strategies are applied.

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following tables details the company''s remaining contractual maturity for its non derivative financial liabilities with agreed repayment periods. The table have been drawn up based on the undiscounted cash flows of financial liabilities based on earliest date on which the Company can be required to pay.

d. Fair value hierarchy

Valuation technique and key inputs

Level 1 - Quoted prices (unadjusted) in an active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e.

as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as at

March 31, 2023.

37. Other Statutory Information

(I) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

(iii) The Company does not have any charges which is yet to be registered with ROC beyond the statutory period. In respect of satisfaction of charges (beyond the statutory period) relating to certain borrowings with 2 bankers amounting to H 1,00,424 lakhs (March 31, 2023: with 4 bankers amounting to H 106,751 lakhs) are yet to filed with the ROC, as the Company is in awaiting for no objection certificates from the respective banker. Subsequent to year end the Company has received no objection certificate from one of the banker and satisfaction of charge has been filed with ROC for the same for amounting to H 1,00,422 lakhs.

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(vi) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(viii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

40 Subsequent Events

The Management has assessed, the subsequent events to the year end and is of the view that there are no material events which require adjustment or disclosure in the financial statements except as disclosed in financial statements.

41 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

42 In accordance with Ind AS 108 "Operating segments”, segment information has been given in the consolidated financial statements of Pennar Industries Limited and therefore no separate disclosure on segment information is given in these financial statements.

43 The erstwhile subsidiary Company Pennar Engineered Building Systems Limited (PEBS) has raised funds through Initial public offer (IPO) during financial year 2015-16 use of the net proceeds of the IPO is intended for the business purposes such as repayment / prepayment of certain working capital facilities availed by the Company, financing the procurement of infrastructure, general corporate purposes and share issue expense. As on March 31, 2024 an amount of H 425 lakhs (March 31, 2023: H 425 Lakhs) are unutilized funds which have been temporarily invested in mutual funds.

44 These financial statements were approved for issue by the Company''s Board of Directors on May 22, 2024.

In terms of our report attached For and on behalf of the Board of Directors

For M S K A & Associates of Pennar Industries Limited

Chartered Accountants CIN: L27109TG1975PLC001919

Firm Registration Number : 105047W

Ananthakrishnan Govindan Aditya N Rao Lavanya Kumar Rao K

Partner Vice Chairman & Managing Director Whole Time Director

Membership No. 205226 (DIN: 01307343) (DIN: 01710629)

Shrikant Bhakkad Mirza Mohammed Ali Baig

Chief Financial Officer Company Secretary

(M No: A29058)

Place: Hyderabad Place: Hyderabad

Date: May 22, 2024 Date: May 22, 2024

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Mar 31, 2023

Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a legal or constructive
obligation as a result of past events and it is probable that there will be an outflow of resources and a reliable estimate
can be made of the amount of obligation.

Provisions are not recognized for future operating losses. The amount recognized as a provision is the best estimate of
the consideration required to settle the present obligation at the end of the reporting period, taking into account the
risks and uncertainties surrounding the obligation.

Provision for onerous contracts. i.e. contracts where the expected unavoidable cost of meeting the obligations under
the contract exceed the economic benefits expected to be received under it, are recognized when it is probable that
an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an
obligating event based on a reliable estimate of such obligation.

Provision is made for costs associated with dismantling of the property, plant and equipment. Such dismantling costs are
normally incurred at the end of the estimated useful life of the assets. These costs are assessed by the management on an
annual basis and are capitalized to the respective block of assets. A corresponding provision is created for the said costs.

The capitalized asset is charged to the statement of profit and loss over the life of the operation through the depreciation
of the asset and the provision is increased each period via unwinding the discount on the provision.

Contingent liabilities are not recognized and are disclosed by way of notes to the financial statements when there is a
possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non¬
occurrence of one or more uncertain future events not wholly within the control of the Group or when there is a present
obligation that arises from past events where it is either not probable that an outflow of resources will be required to
settle the same or a reliable estimate of the amount in this respect cannot be made.

Contingent assets are not recognized but disclosed in the Financial Statements by way of notes to accounts when an
inflow of economic benefits is probable.

2.11 Cash and cash equivalents:

Cash comprises cash on hand, in bank and demand deposits with banks. The Company considers all highly liquid
financial instruments, which are readily convertible into cash and have original maturities of three months or less from
the date of purchase, to be cash equivalents. Such cash equivalents are subject to insignificant risk of changes in value.

Cash flows are reported using indirect method, whereby profit / (loss) after tax is adjusted for the effects of transaction
of non- cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from
Operating, investing and financing activities of the Company are segregated based on the available information.

2.12 Revenue:

Revenue is recognised to the extent that it is highly probable that the economic benefits will flow to the Company and
the revenue can be reliably measured, regardless of when the payment is being made.

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable
consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net
of variable consideration on account of various discounts and schemes offered by the Company as part of the contract
and excluding taxes or duties collected on behalf of the Government.

The Company recognises revenue for supply of goods to customers against orders received. The majority of contracts
that Company enters into relate to sales orders containing single performance obligations for the delivery of products
as per Ind AS 115. Product revenue is recognised when control of the goods is passed to the customer. The point at which
control passes is determined based on the terms and conditions by each customer arrangement, but generally occurs on
delivery to the customer. Revenue is not recognised until it is highly probable that a significant reversal in the amount
of cumulative revenue recognised will not occur.

With respect to contracts where revenue is recognised over time, the Company measures the value of services for
which control is transferred to the customer over time based on certification of work completed. In cases where the
work performed till the reporting date has not reached the milestone specified in the contract, the Company recognises
revenue only to the extent that it is highly probable that the customer will acknowledge the same.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense
in the Statement of Profit and Loss in the period in which such probability occurs. Due to the uncertainties attached, the
revenue on account of extra claims are accounted for at the time of acceptance / settlement by the customers.

Revenue earned but not billed to customers against erection contracts is reflected as "Contract assets” under "Other
financial assets”. Billings on incomplete contracts in excess of accrued costs and accrued profits are included in other
current liabilities as "Contract liabilities”.

Due to the uncertainties attached, the revenue on account of extra claims are accounted for at the time of acceptance/
settlement by the customers.

Interest, Dividend and Claims:

Dividend income is recognized when the right to receive payment is established. Interest has been accounted using
effective interest rate method. Insurance claims/ other claims are accounted as and when admitted /settled.

Export Benefits:

Export benefits arising on account of entitlement for duty free imports are accounted for through import of materials.
Other export benefits are accounted for as and when the ultimate realisability of such benefits are established.

Government grants, subsidies and export incentives:

Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant
will be received and the Company will comply with all attached conditions. Government grants relating to income are
deferred and recognized in the profit or loss over the period necessary to match them with the costs that they are
intended to compensate and presented within other income. Government grants relating to the purchase of property,
plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a
straight-line basis over the expected lives of the related assets and presented within other income.

Income from sales tax and power incentives are recognized on accrual basis, when the right to receive the credit is
established and there is no significant uncertainty regarding the ultimate collection.

2.13 Property, plant and equipment:

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs directly
attributable to the acquisition are capitalized until the property, plant and equipment are ready for use, as intended by
management.

The Company depreciates property, plant and equipment over their estimated useful lives using the straight-line method
as per the useful life prescribed in Schedule II to the Companies Act, 2013. Depreciation methods, useful lives and residual
values are reviewed periodically including at each financial year-end.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item
of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount
of the asset and is recognized in other income in the statement of profit or loss.

The cost of a self-constructed item of property, plant and equipment comprises the cost of materials, direct labour
and any other costs directly attributable to bringing the item to its intended working condition and estimated costs of
dismantling, removing and restoring the site on which it is located, wherever applicable.

2.14 Depreciation and Amortization

Depreciation on Property, Plant and Equipment except as stated below, is provided as per Schedule II of the Companies
Act, 2013 on straight line method. Depreciation on upgradation of Property, Plant and Equipment is provided over the
remaining useful life of the assets.

No depreciation is charged on Freehold land.

Depreciation on Property, Plant and Equipment commences when the assets are ready for their intended use. Based on
above, the useful lives as estimated for other assets considered for depreciation are as follows:

2.15 Intangibles assets

Intangible assets are stated at cost comprising of purchase price inclusive of duties and taxes less accumulated amount
of amortization and impairment losses. Such assets are amortized over the useful life using straight line method and
assessed for impairment whenever there is an indication of the same.

Cost of computer software packages (ERP and others) allocated/amortized over a period of 10 years/ 5 years. License
fees, over the duration of license or 10 years whichever is less.

Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each reporting date.

2.16 De-recognition of Tangible and Intangible assets

An item of PPE is de-recognized upon disposal or when no future economic benefits are expected to arise from its use
or disposal. Gain or loss arising on the disposal or retirement of an item of PPE is determined as the difference between
the sales proceeds and the carrying amount of the asset and is recognized in the Statement of Profit and Loss.

2.17 Impairment of Tangible and Intangible Assets

Tangible and intangible assets are reviewed at each balance sheet date for impairment. In case events and circumstances
indicate any impairment, recoverable amount of assets is determined. An impairment loss is recognized in the statement
of profit and loss, whenever the carrying amount of assets either belonging to Cash Generating Unit (CGU) or otherwise
exceeds recoverable amount. The recoverable amount is the higher of assets'' fair value less cost of disposal and its
value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their
present value at appropriate rate.

Impairment losses recognized earlier may no longer exist or may have come down. Based on such assessment at each
reporting period the impairment loss is reversed and recognized in the Statement of Profit and Loss. In such cases the
carrying amount of the asset is increased to the lower of its recoverable amount and the carrying amount that have
been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

2.18 Employee benefit plans:

Employee benefits include provided fund, superannuation fund, employee''s state insurance scheme, gratuity and
compensated absences.

Post Employment Obligations:

Defined Contribution Plans:

Contributions in respect of Employees Provident Fund and Pension Fund which are defined contribution schemes, are
made to a fund administered and managed by the Government of India and are charged as an expense based on the
amount of contribution required to be made and when service are rendered by the employees.

Contributions under the superannuation plan which is a defined contribution scheme, are made to a fund administered
and managed by the Life Insurance Corporation of India and are charged as an expense based on the amount of
contribution required to be made and when services are rendered by the employees.

Defined benefit plans Gratuity:

The Company accounts for its liability towards Gratuity based on actuarial valuation made by an independent actuary
as at the balance sheet date using projected unit credit method. The liability recognized in the balance sheet in respect
of the gratuity plan is the present value of the defined benefit obligation at the end of the reporting period less the fair
value of the plan assets.

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by
reference to market yields at the end of the reporting period on government bonds that have terms approximating to
the terms of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance
of the defined obligation and the fair value of plan assets. This cost is included in the employee benefit expense in
the statement of profit and loss. Remeasurement gains and losses arising from experience adjustments and changes in
actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. Changes
in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized
immediately in the statement of profit and loss as past service cost.

Compensated absences:

The employees of the Company are entitled to compensated absences. The employees can carry forward a portion of
the unutilized accrued compensated absence and utilize it in future periods or receive cash compensation at retirement
or termination of employment for the unutilized accrued compensated absence. The Company records an obligation for
compensated absences in the period in which the employee renders the services that increase this entitlement. The
Company measures the expected cost of compensated absence based on actuarial valuation made by an independent
actuary as at the balance sheet date on projected unit credit method.

Other short-term employee benefits:

Other Short-term employee benefits, including performance incentives expected to be paid in exchange for the services
rendered by employees are recognized during the period when the employee renders service.

2.19 Financial instruments

a. Derivative Financial Instruments:

The Company enters into derivative financial instruments to manage its exposure to foreign exchange rate risks,
including foreign exchange forward contracts.

Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are
subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is
recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument,
in which event the timing of the recognition in profit or loss depends on the nature of the hedging relationship and
the nature of the hedged item.

b. De-recognition of financial assets and liabilities
Financial assets:

The Company de-recognizes a financial asset when the contractual rights to the cash flows from the asset expire, or
when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another
party. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the
Company continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds
received.

On de-recognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the
sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other
comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have
otherwise been recognized in profit or loss on disposal of that financial asset.

Financial liabilities:

The Company de-recognizes financial liabilities when, and only when, the Company''s obligations are discharged,
cancelled or have expired. The difference between the carrying amount of the financial liability derecognized and
the consideration paid and payable is recognized in profit or loss.

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only
when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle
them on a net basis or realize the asset and settle the liability simultaneously.

c. Foreign exchange gains and losses:

• For foreign currency denominated financial for foreign currency denominated financial assets measured at
amortized cost and FVTPL, the exchange differences are recognized in profit or loss except for those which are
designated as hedging instruments in a hedging relationship.

• Changes in the carrying amount of investments in equity instruments at FVTOCI relating to changes in foreign
currency rates are recognized in other comprehensive income.

• For the purposes of recognizing foreign exchange gains and losses, FVTOCI debt instruments are treated
as financial assets measured at amortized cost. Thus, the exchange differences on the amortized cost are
recognized in profit or loss and other changes in the fair value of FVTOCI financial assets are recognized in
other comprehensive income.

• For financial liabilities that are denominated in a foreign currency and are measured at amortized cost at the
end of each reporting period, the foreign exchange gains and losses are determined based on the amortized
cost of the instruments and are recognized in the statement of profit and loss.

• The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency
and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured at
FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognized in profit
or loss.

2.20 Determination of fair values:

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that
are based on market conditions and risks existing at each reporting date. The methods used to determine fair value
include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair
value result in general approximation of value, and such value may never actually be realized.

2.21 Impairment of assets

a. Financial assets:

The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are
not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component
is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured
at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial
recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal)
that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized
is recognized as an impairment gain or loss in profit or loss.

For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial
Instruments, which requires expected lifetime losses to be recognized from initial recognition of the receivables. The
provision matrix is based on its historically observed default rates over the expected life of the trade receivable and
is adjusted for forward looking estimates. The ECL loss allowance (or reversal) during the year is recognized in the
statement of profit and loss.

b. Non-financial assets:

Intangible assets, intangible assets under development and property, plant and equipment

Intangible assets, intangible assets under development and property, plant and equipment are evaluated for
recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be
recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost
to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash
flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined
for the CGU to which the asset belongs. Intangible assets under development are tested for impairment annually.

If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is
measured by the amount by which the carrying value of the asset exceeds the estimated recoverable amount of the
asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates
used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable
amount, provided that this amount does not exceed the carrying amount that would have been determined (net of
any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

c. Non-current Investments:

At each balance sheet date, the Company assesses whether there is any indication that an investment may be
impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the
investment exceeds its estimated recoverable amount, an impairment loss is recognized in the Statement of Profit
and Loss to the extent the carrying amount exceeds recoverable amount. The recoverable amount is the higher of
an investment''s fair value less costs of disposal and value in use.

2.22 Government Grants:

Government grants are not recognized until there is reasonable assurance that the Company will comply with the
conditions attached to them and that the grants will be received. Government grants are recognized in the Statement of
Profit and Loss on a systematic basis over the periods in which the Company recognizes as expenses the related costs
for which the grants are intended to compensate.

The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the
difference between proceeds received and the fair value of the loan based on prevailing market interest rates.

2.23 Critical accounting judgements and key sources of estimation uncertainty

In the application of the Company''s accounting policies the directors of the Company are required to make judgements,
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from
other sources. The estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future periods.

Critical judgements in applying accounting policies

The following are the critical judgements, apart from those involving estimations, that the directors have been made in
the process of applying the Company''s accounting policies and that have the most significant effect on the amounts
recognized in the financial statements.

Revenue recognition

In making their judgement, the management considered the detailed criteria for the recognition of revenue from the sale
of goods set out in Ind AS 115 and, in particular, whether the Company had transferred control over the goods to the
buyer.

Key sources of estimation uncertainty

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that
have the most significant effect on the amounts recognized in the financial statements is included in the following notes:

2.24 Operating Cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their
realisation in cash or cash equivalents, the Company has determined its operating cycle for the purpose of its assets
and liabilities as current and non-current.

2.25 Standards (including amendment) issued but not yet effective:

The Ministry of Corporate Affairs ("MCA") has notified Companies (Indian Accounting Standard) Amendment Rules, 2023
dated March 31, 2023 to amend certain Ind ASs which are effective from April 01, 2023. Below is a summary of such
amendments:

(i) Disclosure of Accounting Policies - Amendment to Ind AS 1 Presentation of financial statements:

The MCA issued amendments to Ind AS 1, providing guidance to help entities meet the accounting policy disclosure
requirements. The amendments aim to make accounting policy disclosures more informative by replacing the
requirement to disclose ''significant accounting policies'' with ''material accounting policy information''. The
amendments also provide guidance under what circumstance, the accounting policy information is likely to be
considered material and therefore requiring disclosure.

The amendments are effective for annual reporting periods beginning on or after April 01, 2023. The Company
is currently revisiting their accounting policy information disclosures to ensure consistency with the amended
requirements.

(ii) Definition of Accounting Estimates - Amendments to Ind AS 8 Accounting policies, changes in accounting estimates
and errors:

The amendment to Ind AS 8, which added the definition of accounting estimates, clarifies that the effects of a
change in an input or measurement technique are changes in accounting estimates, unless resulting from the
correction of prior period errors. These amendments clarify how entities make the distinction between changes in
accounting estimate, changes in accounting policy and prior period errors. The distinction is important, because
changes in accounting estimates are applied prospectively to future transactions and other future events, but
changes in accounting policies are generally applied retrospectively to past transactions and other past events as
well as the current period.

The amendments are effective for annual reporting periods beginning on or after April 01, 2023. The amendments
are not expected to have a material impact on the Company''s financial statements.

(iii) Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to Ind AS 12 Income
taxes:

The amendment to Ind AS 12, requires entities to recognise deferred tax on transactions that, on initial recognition,
give rise to equal amounts of taxable and deductible temporary differences. They will typically apply to transactions
such as leases of lessees and decommissioning obligations and will require the recognition of additional deferred
tax assets and liabilities.

The amendment should be applied to transactions that occur on or after the beginning of the earliest comparative
period presented. In addition, entities should recognise deferred tax assets (to the extent that it is probable that
they can be utilised) and deferred tax liabilities at the beginning of the earliest comparative period for all deductible
and taxable temporary differences associated with:

• right-of-use assets and lease liabilities, and

• decommissioning, restoration and similar liabilities, and the corresponding amounts recognised as part of the
cost of the related assets.

The cumulative effect of recognising these adjustments is recognised in retained earnings, or another component of
equity, as appropriate. Ind AS 12 did not previously address how to account for the tax effects of on-balance sheet
leases and similar transactions and various approaches were considered acceptable. Some entities may have already
accounted for such transactions consistent with the new requirements. These entities will not be affected by the
amendments.

The Company is currently assessing the impact of the amendments.

(iv) The other amendments to Ind AS notified by these rules are primarily in the nature of clarifications.

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Mar 31, 2018

1. Corporate information:

Pennar industries Limited (‘the Company’) is a public limited company in lndia having its registered and corporate office in Hyderabad in state of Telangana and is engaged in manufacturing of cold rolled steel strips, precision tubes, cold rolled formed sections, electrostatic precipitators, profiles, Railway wagons and coach components, press steel components, hydraulics, road safety systems and galvanized products. Pennar industries Limited has manufacturing facilities at Patancheru, Isnapur and Velchal in the state of Telangana, Chennai and Hosur in Tamilnadu, Tarapur in Maharashtra. The company’s shares are listed on the Bombay Stock Exchange and National Stock Exchange in lndia.

Notes:

a. Trade receivables includes retention money aggregating to Rs. 946 (March 31, 2017: Rs. Nil and April 01, 2016: Rs. Nil).

b. Expected credit loss (ECL):

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit in the normal course of business. Before accepting any new customer, the Company assesses the potential customer’s credit quality.

As a practical expedient, the Company uses a provision matrix to determine impairment loss of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. The ECL loss allowance (or reversal) during the year is recognised in the statement of profit and loss.

Note:

During the current year, the Company provided a collateral security in the form of fixed deposits aggregating Rs. 2,500 towards the bills discounted facility availed by Pennar Engineered Building Systems Limited (subsidiary) from Axis Bank Limited. No such collaterals were given as at March 31, 2017 and as at April 01, 2016.

c. Rights, preferences and restrictions attached to equity shares:

The Company has issued only one class of equity shares having a par value of Rs. 5 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company in proportion to their shareholding.

Nature of reserves:

(a) Capital redemption reserve

Reserve is created for redemption of preference shares.

(b) Profit on forfeiture of shares

Profit on forfeiture of shares pertains to profit on redemption of preference shares.

(c) Securities premium account

Amounts received on issue of shares in excess of the par value recognised under securities premium account.

(d) General reserve

General reserve is created from time to time by appropriation of profits from retained earnings.

(e) Retained earnings

Retained earnings comprises of prior years’ undistributed earnings after taxes along with current year profit.

(f) Other comprehensive income

This reserve represents the actuarial gain/(loss) recognised on the defined benefit plan.

(b) The Company availed an interest free sales tax deferment loan for a period of 14 years starting from 1997 - 98 amounting to Rs. 2,486 from the Commercial tax department. Out of this, amount aggregating Rs. 182 paid during earlier year and an amount of Rs. 258 is payable in the financial year 2018-19 which is classified under the head “Other financial liabilities”. Further Rs. 786 (As at March 31, 2017 - Rs. 948 and as at April 01, 2016 - Rs. 1,094) considered under Unearned government grant has been classified under the head “Other Non-current liabilities” which is discounted to present value.

(c) Working capital facilities sanctioned by consortium of bankers comprising State Bank of India, Axis Bank and Yes Bank are secured by first pari passu charge on the entire current assets and second charge on fixed assets of the company along with other working capital lenders under consortium. These facilities are further secured by personal guarantee from Aditya N. Rao (Vice - Chairman and Managing Director).

Post Retirement Employee Benefits

a. Defined benefit plans:

The employee’s gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined bases on actuarial valuation using the projected unit credit method, which recognizes each period of services as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The accrual for unutilised leave is determined for the entire available leave balance standing to the credit of the employees at year-end as per Company’s policy. The value of such leave balance eligible for carry forward, is determined by an independent actuarial valuation and charged to Statement of Profit and Loss in the period determined.

The estimates of future salary increases considered in the actuarial valuation take account of price inflation, seniority, promotion and other relevant factors such as demand and supply in the employment market. The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligation.

The difference between the tax rate enacted in India and the effective tax rate of the company is majorly because of items that are never taxable or deductible.

d. Deferred tax assets and liabilities

The following is the analysis of deferred tax assets/(liabilities) presented in the balance sheet:

The dues above include acceptances against the letter of credit issued to banks aggregating to Rs. 10,463 as at March 31, 2018 (March 31, 2017: Rs. 10,044 and April 01, 2016: Rs. 7,612).

b. Corporate social responsibility

The Company contributes towards Corporate Social Responsibility (CSR) activities as per the provisions of per Section 135 of the Companies Act, 2013. The Company constituted sub committee of Board and approved CSR policy. As per the said policy, the Company has incurred Rs. 41 (March 31, 2017 - Rs. 44).

c. Leases

The Company has certain operating leases for office facilities under cancellable as well as non-cancellable operating lease agreements. The operating lease arrangements, are renewable on a periodic basis and the lease term ranges from 12 months to 120 months from their respective dates of inception. Some of these lease agreements have price escalation clauses. Future lease payments on the long term non-cancellable operating leases as per the lease agreements are as follows:

2. Exceptional Item

(i) During the year, the Company divested its stake in Pennar Renewables Private Limited, to Greenko Solar Energy Private Limited (Greenko Solar). The resultant profit on sale of investment amounting to Rs. 2,129 has been recognised under exceptional item. An amount of Rs. 994 is receivable as at March 31, 2018 from Greenko Solar pertaining to such sale proceeds.

3. The Board of Directors of the Company have approved a Scheme of Arrangement (“the Scheme”) for amalgamation of its subsidiaries, Pennar Engineering Building Systems Limited and Pennar Enviro Limited with the Company, effective from April 1, 2018, subject to necessary statutory and regulatory approvals. The Company has received clearance from the stock exchanges on April 26, 2018. The Scheme remains subject to the receipt of necessary approvals from National Company Law Tribunal and the respective shareholders and creditors of the Company.

Dues to Micro and small Enterprise have been determined by the Company on the basis of information available with the Company and has been relied upon by the auditors.

4. Financial Instruments

Notes:

a. Capital Management

The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimization of the debt and equity balances.

The capital structure of the Company consists of net debt (borrowings as detailed in note 14 and offset by cash and bank balances) and total equity of the Company.

The Company is not subject to any externally imposed capital requirements.

The Company’s management reviews the capital structure of the company on monthly basis. As part of this review, the management considers the cost of capital and the risks associated with each class of capital.

The table below summarises the total equity, net debt and net debt to equity ratio of the Company.

The management assessed that fair value of cash and cash equivalents, trade receivables, other current financial assets, trade payables, borrowings and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than a forced or a liquidation sale.

Investments in other equity instruments (quoted and unquoted) are measured at cost through initial designation in accordance with Ind-AS 109 - Financial Instruments.

Investments in mutual funds are mandatorily measured at fair value.

c. Financial risk management

The Board oversees the risk management frame work, develops and monitors the company’s risk management policies. The risk management policies are established to ensure timely identification and evaluation of the risks, setting acceptable risk thresholds, identifying and mapping controls against these risks, monitor the risks and their limits, improve risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and company’s activities to provide reliable information to the management and the Board to evaluate the adequacy of the risk management frame work in relation to the risk faced by the Company.

The management policies aims to mitigate the following risks arising from the financial instruments

1. Market Risk

2. Credit Risk

3. Liquidity Risk

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in the market prices. The Company is exposed in the ordinary course of its business to risk related to changes in foreign currency exchange rates, commodity prices and interest rates.

The Company seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the company’s policies approved by the Board of Directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the management and the internal auditors on a continuous basis. The company does not enter into or trade financial instruments, including derivatives for speculative purposes.

Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the company’s receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.

The Company generates sufficient cash flow for operations, which together with the available cash & cash equivalents and short term investments provide liquidity in the short term and long term. The Company has established an appropriate liquidity risk management framework for the management of the Company’s short term, medium and long term funding and liquidity management requirements. The company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The Company has unutilised working capital lines from banks of Rs. 504 as on March 31, 2018, Rs. 3,500 as on March 31, 2017 and Rs. 349 as on April 01, 2016.

Foreign Exchange Risk

The Company’s functional currency is Indian National Rupees (INR). The company undertakes transactions denominated in foreign currencies; consequently, exposure to exchange rate fluctuations arise. Fluctuation in exchange rates affects the company’s revenue from export markets and the cost of imports, primarily in relation to capital goods.

Commodity price risk

The Company’s revenue is exposed to the market risk of price fluctuations related to the purchase of steel products used as Raw Material in manufacture of Finished Goods. The company manages the risk by forecasting its production and the manufacturing plan. Raw Material purchases are made based on the evaluation of the steel prices aligned to such production plans.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the company are principally denominated in rupees with mix of fixed and floating rates of interest. The company has exposure to interest rate risk, arising principally on changes in base lending rates. The company uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirement for its day to day operations like short term loans. The risk is managed by company by maintaining an appropriate mix between fixed and floating rate borrowings, ensuring the most cost-effective strategies are applied.

The following tables details the company’s remaining contractual maturity for its non derivative financial liabilities with agreed repayment periods.

The table have been drawn up based on the undiscounted cash flows of financial liabilities based on earliest date on which the company can be required to pay.

Refer note 14 for the details of collateral security against the above mentioned banking facilities.

d. Fair value hierarchy

Valuation technique and key inputs

Level 1 - Quoted prices (unadjusted) in an active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as at March 31, 2018.

Post-employment benefits and other long-term benefits have been disclosed based on actual payment made on retirement/resignation of services, but does not includes provision made on actuarial basis as the same is not available at an employee level.

5. Transition to Indian Accounting Standards (Ind AS)

These financial statements of Pennar Industries Limited for the year ended March 31, 2018 have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015. The adoption of Ind AS was carried out in accordance with Ind AS 101, using April 1, 2016 as the transition date. Ind AS 101 requires that all Ind AS standards and interpretations that are effective for the year ended March 31, 2018, be applied consistently and retrospectively for all fiscal years presented. All applicable Ind AS have been applied consistently and retrospectively wherever required. The resulting difference between the carrying amounts of the assets and liabilities in the financial statements under both Ind AS and Previous GAAP as at the transition date have been recognised directly in equity at the transition date.

(i) Transition elections

The Company has prepared the opening Balance Sheet as per Ind AS as of April 1, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to certain mandatory exceptions and optional exemptions availed by the Company as detailed below:

a. Investments in subsidiaries :

In accordance with Ind AS transitional provisions, the Company opted to consider previous GAAP carrying value of investments as deemed cost on transition date for investments in subsidiaries in separate financial statement.

b. Derecognition of financial assets and financial liabilities:

The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after the transition date.

c. Business combinations

The Company has elected not to apply Ind AS 103 Business Combinations retrospectively to business combinations that occurred before the date of the transition.

d. Government Grant

Under previous GAAP, interest free sales tax deferment loan was carried at cost. Under Ind AS, such interest free loans have been carried at previous GAAP amount at the date of transition.

Notes:

a. The Company has chosen the cost model in accordance with the previous gaap, and accordingly adjusted the amount outstanding in the revaluation reserve against the carrying amount of respective property, plant and equipment as at April 1, 2016 and March 31, 2017, on transition to IND AS.

b. Under Previous GAAP, provision for trade receivables was created on incurred loss based on credit risk assessment of each customer. Under Ind AS, these provisions are based on Expected Loss model which factor the credit risk as well as payment delay risk. As a practical expedient, the Company has evaluated a matrix based approach based on past trends to arrive at the provision matrix for receivables outstanding as at each period end. Accordingly, the additional provision resulting from such evaluation has been adjusted to opening reserves (for receivables outstanding as at April 01, 2016) and the statement of profit and loss (receivables as at March 31, 2017).

c. Under the previous GAAP, interest free sales tax deferment loan was carried at cost. Under Ind AS, such interest free loans have been carried at previous GAAP amount at the date of transition.

Under Ind AS, the deferred sales tax liability is an incentive received by the Company from the Government under a sales tax deferral scheme. Since the loan is interest-free in nature, its face value or the transaction price is not considered to represent fair value. The Company considered that the use of a present value technique based on the cash flows payable under the scheme is an appropriate method of determining fair value. The difference between the fair value of the loan and the amount payable represents the ‘other component’ which is considered to be in the nature of a government grant since it represents an incentive received by the Company from the Government. This is accounted for in accordance with Ind AS 20.

d. Consequential deferred tax on all the above adjustments.

6. Excise duty

The Government of India introduced the Goods & Services Tax (GST) with effect from July 01, 2017. Accordingly, in compliance with Indian Accounting Standards (Ind AS) 18 - ‘Revenue’, Revenue from operations for the year ended March 31, 2018 (from 1 July 2017) is net of GST, Revenue from operations includes excise duty which is now subsumed in GST.

7. In accordance with Ind AS 108 “Operating segments”, segment information has been given in the consolidated financial statements of Pennar Industries Limited and therefore no separate disclosure on segment information is given in these financial statements.

8. Regrouping/ Reclassification

Previous year’s figures have been regrouped/ reclassified wherever necessary to correspond with the current year’s classification/ disclosures.

9. These financial statements were approved by the Company’s Board of Directors on May 18, 2018.

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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.

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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.

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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

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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

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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.

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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.

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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.