Pennar Industries Ltd. — Interim / Quarterly Report 2021

Aug 11, 2021

Chartered A Deloitte ceo wered ccountants Haskins & Sells LLP jubilee Enclave, Meghanur

Plot No.1te 4 & 4A Hyderabad-500 08% Telangana, India

Tel: +91 40 7125 3600 Fax; +91 40 7125 3601

INDEPENDENT AUDITOR'S REVIEW REPORT ON REVIEW OF INTERIM CONSOLIDATED FINANCIAL RESULTS

TO THE BOARD OF DIRECTORS OF PENNAR INDUSTRIES LIMITED

• 1. We have reviewed the accompanying Consolidated Unaudited Financial Results = of PENNAR INDUSTRIES LIMITED ("the Parent") and its subsidiaries (the Parent and its subsidiaries together referred to as "the Group"), for the quarter ended June 30, 2021 ("Consolidated Results") included in the accompanying Statement of Unaudited Consolidated and Standalone Financial Results for the quarter ended June 30, 2021 ("the Statement"), being submitted by the Parent pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.
• The Consolidated Results included in the Statement, which are the responsibility of the Parent's Management and approved by the Parent's Board of Directors, have been prepared in accordance with the recognition and measurement principles laid down in the Iadian Accounting Standard 34 "Interim Financial Reporting" ("Ind AS 34"), prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder and other accounting principles generaily accepted in India, Our responsibility is to express a conclusion on the Consolidated Results included in the Statement based on our review.
• We conducted our review of the Consolidated Results included in the Statement in accordance with the Standard on Review Engagements (SRE) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", Issued by the Institute of Chartered Accountants of India (ICAI). A review of Interim financial information consists of making inquiries, primarily of Parent's personne! responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing specified under Section 143(10) of the Companies Act, 2013 and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We also performed procedures in accordance with the circular Issued by the SEBI under Regulation 33(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, to the extent applicable.

• The Consolidated Results includes the results of the following entities:

  • i) Pennar Industries Limited, India (Parent Company)

  • ii) Pennar Global Inc., USA (Wholly-Owned Subsidiary)

  • lil} Enertech Pennar Defense and Engineering Systems Private Limited, India (Subsidiary) iv) Pennar GmbH, Germany (Wholly-Owned Subsidiary)

  • v) Oneworks BIM Technologies Private Limited, India (Wholly-Owned Subsidiary) vi) Pennar Global Metals Inc. USA (w.e.f. August 12, 2020) (Subsidiary of ij above) vii) Ascent Buildings LLC., USA (w.e.f. September 4, 2020) (Subsidiary of ii above)

• Based on our review conducted and procedures performed as stated in Paragraph 3 above, and based on the consideration of the review reports of the other auditors referred to in paragraph 7 belaw, nothing has come to our attention that causes us to believe that the Consolidated Results included in the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standard and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, including the manner in which it is to be disclosed, or that it contains any material misstatement.
• We draw your attention to Note 6 of the Statement, which describes that certain estimates and judgements were made related to COVID-19 pandemic, wherein, the eventual outcome of the impact of its global health pandemic may be different from those estimated by the management.

Our conclusion is not modified in respect of this matter.

Regd, Office: One International Center, Tower 3. 32nd Fluor, Senapat! Aapat Marg, Elphinstone Road (West), Mumbai 400 013. Maharashtra, indis, iLL P inentification No, AAB-G747)

Deloitte Haskins & Sells LLP

1. We did not review the Interim financial information / financial results of three subsidiaries included in the Consolidated Results, whose interim financial information / financial results reflect total revenue of % 5,542 lakhs, total net profit after tax of 7 68 lakhs and total comprehensive income of 2 68 lakhs for the quarter ended June 30, 2021, as considered in the Consolidated Results included in the Statement. These interim financial information / financial results have been reviewed by other auditors whose reports have been furnished to us by the Management and our conclusion on the Consolidated Results, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries is based solely on the reports of the other auditors and the procedures performed by us as stated in paragraph 3 above.

Our conclusion on the Consaiidated Results inciuded in the Statement is not modified in respect of this matter.

1. The Cansolidated Results includes the interim financial information / financial results of three subsidiaries which have not been reviewed by their auditors, whose interim financial information / financial results reflect total revenue of = 367 lakhs, total loss after tax of % 12 lakhs, and total comprehensive loss of @ 12 lakhs for the quarter ended June 30, 2021, as considered in the Consolidated Results included in the Statement. According to the Information and explanations given to us by the Management, these interim financial information / financial results are not material to the Group.

Our conclusion on the Consolidated Results included in the Statement is not modifled in respect of our reliance on the interim financial information / financial results certified by the Management.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration

Balakrishnan

Partner bership Na.201193) OL 193AABAFYS693 yanes' if UD

Hyderabad, August 11, 2021

« Chartered Accountants Deloitte KRB Towers Haskins reins s oor & Sells LLP jubilee Enclave, Madhapur

Hyderabad-500 081 Telangana, India

Tel: #91 40 7125 3600

Fax: +97 407125 3601 INDEPENDENT AUDITOR'S REVIEW REPORT ON REVIEW OF INTERIM STANDALONE FINANCIAL RESULTS

TO THE BOARD OF DIRECTORS OF PENNAR INDUSTRIES LIMITED

• 1, We have reviewed .the accompanying Standalone Unaudited Financial Results of PENNAR INDUSTRIES LIMITED ("the Company"), for the quarter ended June 30, 2021 ("Results") included in the accompanying Statement of Unaudited Standalone and Consolidated Financial Results for the quarter ended June 30, 2021 ("the Statement"), being submitted by the Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.
• 1. The Results inclided in the Statement, which are the responsibility of the Company's Management and approved by the Company's Board of Directors, have been prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standard 34 "Interim Financial Reporting" ("Ind AS 34"), prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Results included in the Statement, based on our review.
• 1. We conducted our review of the Results included in the Statement in accordance with the Standard on Review Engagements (SRE) 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity', issued by the Institute of Chartered Accountants of India (ICAI). A review of interim financial information consists of making inquiries, primarily of the Company's personnel responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing specified under section 143(10) of the Companies Act, 2013 and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit, Accordingly, we do not express an audit opinion.
• 1. Based on our review conducted as stated in paragraph 3 above, nothing has come to our attention that causes us to believe that the Results included in the accompanying Statement, prepared in accordance with the recognition and measurement Principles laid down in the aforesaid Indian Accounting Standard and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, including the manner In which it is to be disclosed, or that it contains any material misstatement.
• 1. We draw your attention to Note 6 of the Statement, which describes that certain estimates and judgements were made related to COVID-19 pandemic, wherein, the eventual outcome of the impact of its global health pandemic may be different from those estimated by the management.

Our conclusion is not modified in respect of this matter.

For DELOITTE HASKINS & SELLS LLP hartered Accountants 117366W/W-1009)18) (Firm Registration N sh on: Partner (Membership No.201193) UDIN: 2120] 1934AAAFX2343 Hyderabad, August 11, 2021

Regu. Office. One International Center, Tower 3, 32nd Floar, Senapatl Bapat Marg, Elphinstone Road (West), Mumbai-400 013, Maharashtra, India {LLP idenitlicatlan No, AAB-8737) PENNAR INDUSTRIES LIMITED (CIN: L27109TG1975PLC001919)

Regd. Office: Floor Na. 3, DHFLYC Silicon Towers, Kondaput, Hyderabad 500084, Telangana, India.

Sta of Cs Tel: +91 40 40061621; Fax : +91 40 40061618; E-mall:corporatecommunications@pennarindiacom: Website:;www.pennarindia.com for the Quarter Ended June 30, 2021 i and Standal:

			Consolidated results				Standalone results		[€ In Lakhs)
SL No	Particulars		Quarter Ended		Year Ended		Quarter Ended	___	Year Ended
		30-Jun-21	31-Mar-21	30-Jun-20	31-Mar-21	30-Jun-21	31-Mar-21
		Unaudited	(Refer Note 3}	Unaudited	Audited	Unaudited	(Refer Note 3)	30-jun-20Unaudited	31-Mar-21Audited
	Revenue from operationsIncome{a}
	(5) Other income	46,931	55.679	16,619	1,52,535	45,805	54,986	16,243	1,51,654
	Total Income	253	a59_56578	276	1.866	259	B67	256	1,781
	/Expenses	49.084		16,895	154,401	46,104	$5,853	16,501	153435
	{a) Cost of materials consumed	29,410	34,961	B757	92,754	29,211	34,336	8,722	90,928
	(b) Purchase of traded goods	3,522	1,167	257	3,669	787	1,167		3,669
	(c) Changes in inventories of finished goods, work-in-progress and stock-in-trade	(2,751)	(2,057)	1,096		(2.304)]		257
	(d} Employee benefits expense	4,040	3,341		(4.432)		(2.141)	954	(2.775)]13,050
	{e) Finance costs	1,829		4114	13,638	3.525	3,191	2,929
	(f) Deprectation and amortisation expense	1,276	1,810	1,977	7,967	1,826	1,807	1,968	7,9464,767
	(g) Other expenses	10,865	1,179	1,207	4.817	1,267	1171	1,193
	Total expenses	45,261	13,70654,107	4,99821,406	37,6191,56,032	10,79045,102	14,00553,536	4,979	37,739
	Profit before exceptional Item and tax (1-2)	903		(4.511)				21,002	155,324
	Exceptional item (Refer note 8)		2,471		(1.631)	1,002	2,317	(4,501)	(1,689)
	Profit before tax (3+4)		1,996		1996		1,996		1,996
martwo	Tax expense		4,467	(4,511)]		1,002	4,313	(4,501)	107
	(a) Current tax	516	392	23	423	533
	(b) Deferred tax	(247)	Ti?		(342)		360717		360
	Total tax expense	269	1,109	(1,130)(1,107)	—-4 41	(282)	1,077	(1,132)	(342y
	Net Profit / (loss) for the period (5-6}	634				251		(1.132)	18
	Attributable te:		7,358	(3,404)	2at	751	3,236	al	"8S
	Sharehalders of the Company
	Non-Controlling interest	642	3,352	(3411)	254	751	3,236	(3,369)	69
	Other comprehensive lncome	(8)	6	7	30
	Items that will not be reclassified subsequently to profit or loss
	{a} Remeasurement of the net defined benefit liability
			1B		18				18
	(b) Income tax relating ta above items		(4)		(4)		(4)		(4)
	ems that will be reclassified subsequently to profit or loss
	(a) Exchange differences in translation of foreign operations{b) Income tax relating ta above items	36	G4)		(41)
						ala
	Total Other comprehensive Income/{loss), net of taxAttributable ta;	36	"i201		zat		14		14
	Shareholders of the Company	36	ia	6	(27)		14
	Non-controlting interests					eet			14
	Total comprehensive income / (loss) (7+8)	670	3,338	(3,398)	257		3,250	(3,369)]
	Attributable to;								103
	Shareholders of the Company	678	3,332	(3.405)		F	3,250	(3,369)
	Non-contralling interests			?	227 30				103
16	jPald Up equity share capital (Face Value of © 5 per share]	7,108	7,108	7,108	7,108		7,108
11	Other equity				62475			7,108	7,108
12	Earnings Per Share [Face Value of € 5 per share]								61,981
	(far the quarterly periods - not annuallsed}
	Basic and Dituted Earnings per share jin %)		245	(2.38	O18	653

(Page L of 3)

NOTES:

• 1 The consolidated and standaione flnancial results of the Company have been prepared in accordance with the Indian Accounting Standards ('Ind AS') prescribed under Section 133 of the Companies Act, 2013 ("the Act") read with relevant rules issued thereunder, other accounting principles generally accepted tn India and guidelines issued by the Securities and Exchange Board of India ("SEBI") (alsa refer Note 6 below).
• The above consolidated and standalone financial results were reviewed and recommended by the Audit Committee at their meeting held on August 09, 2021 and approved by the Board of Directors at their meeting held on August 11, 2021. The Statutory Auditors have issued an unmodified conclusion in respect of the limited review for the quarter ended June 30, 2021.
• The figures for the quarter ended March 2021 are the balancing figures between the audited figures in respect of the full financial year ended March 2021 and year to date figures up to third quarter ended December

The consolidated financial results include the results of the following group companies:
Name of the Company	Country of Incorporation	Nature of relationship	% Holding
Enertech Pennar Defense and Engineering Systems Private Limited	*India	Subsidiary	51%
Pennar GmbH	Germany	Subsidiary	100%,
Oneworks BIM Technologies Private Limited	India	Subsidiary	100%
Pennar Global Ine,	USA	Subsidiary	100%
Pennar Global Metals, LLC {w.ef August 12, 2020)	USA	Step-down Subsidiary	100%
LLC (from September 4, 2020)Ascent Buildings,	USA	Step-down Subsidiary	100%

During the quarter ended September 30, 2020, Pennar Global Inc (Subsidiary of the Company), has acquired Pennar Global Metals, LLC and incorporated Ascent Buildings, LLC as its subsidiaries. Accordingly the results for the corresponding periods are not comparable.

Due to outbreak of Corona virus Disease 2019 {COVID-19} which has been declared as a pandemic by the World Health Organization and subsequent lock down ordered by the Central and State Government(s) in india, the manufacturing facilities of the Company remained suspended from March 23 2020 till May 04 2020.

Further, the recent second wave of COVID-19 has resulted in partial lockdown restriction in various states affecting certain operations during the quarter. The Company/Group has considered internal and certain external sources of information up to the date of approval of the financial results in assessing the recoverability of property, plant and equipment, inventories, receivables and other assets. The impact of the global health pandemic may be different from those estimated as on the date of approval of these financial results and the Company/Group will continue to closely monitor any material changes to future economic conditions.

The results for the quarter ended June 30, 2021 are not comparable with previous periods for reasons stated above.

The details of funds raised through tnitial Public Offer (IPO) by the erstwhile entity PEBS during the financial year 2015-2016, and utilisation of said funds as at June 30, 2021 are as follows:

(% in Lakhs)

prospectusParticulars	Objects ofthe Issueasper	Utilisation upto June 30,2021	Unutilised amount uptoJune 30, 2021
A) Repayment/ prepayment, in full or part, of certain working capital facilities availed by the Company	3,400	3,400	-
B) Financing the procurement of infrastructure (including software and hardware) for the expanston of design and	800	371	429
C) General corporate purpeses	1,079	1,079	-
D) Share issue expenses	521	517	4
Total	5,800	5,367	433

As on June 30, 2021, unutilised funds have been temporarily invested in in mutual funds and other bank balances.

• Pursuant to the approval of the board at tts meeting held on August 12, 2020, the Company has sold a portion of its land situated at Bandalguda Village, Ramachandrapuram Mandal, Sangareddy District, Hyderabad for a consideration of € 2,000 lakhs during the previous quarter. Upon Sale, resu)tant profit of © 1996 lakhs has been disclosed as exceptional item in the consolidated and standalone financial results for the quarter and year ended March 31, 2021.
  • The Board of Directors of the Company has approved to divest its stake jn Gneworks BIM Technologies Private Limited. Accordingly, the Investment has been considered as asset held for sale. There ts no impact on the results for the quarter ended June 30,2021.
• 1. The Code on Social Security, 2020 ('Code') relating to employee benefits during emptayment and post-employment bencfits received Presidential assent in September 2020. The Code has been published in the Gazette of India, However, the date an which the Code will come into effect has not been notified. The Group 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,

		Quarter Ended		Year Ended
Particulars	30-Jun-21	31-Mar-21	30-Jun-20	31-Mar-21
	Unaudited	{Refer Note 3)	Unaudited	Audited
Segment revenue
Diversified engineering	27,300	36,670	9,297	92,351
Custom designed building solutions & auxiliaries	24,461	21,426	6,677	69,031
Total	51,781	58,096	17,974	1,61,382
Less : Inter segment revenue	2,950	2,417	1,355	8,847
Revenue from operations	48,831	35,679	16,619	1,52,535
Segment results
Diversified engineering	2,684	3,494	(1,143)	6,777
Custom designed building solutions & auxiliaries	1,324	1,966	(184)	4,376
Total	4,008	5,460	a	11,153
Exceptional item (Refer Note-8}Add:
		1,996		1,996
Less
Depreciation and amortisation expense	1,276	1,179	1,207	4,817
Finance costs	1,329	1,810	1,977	7,967
Profit before tax	903	4,467	"(4.513)	365
			As at
		30-Jun-21	31-Mar-21	30-Jun-20
Capital employed (Segment assets - Segment Liabilities) (See notes below)		Unaudited	Audited	Unaudited
Segment assets
Diversified engineering		1,23,074	1,19,042	1,06,126
Custom designed building solutions & auxiliaries		69,556	70,212	65,565
Total Segment Assets		1,92,630	1,89,254	1,71,691
Segment liabilities
Diversified engineering		78,880	84,109	67,675
Custom designed building solutions & auxiliaries		43,410	35,475	38,001
Notes;		1,22,290	1,19,584	1,05,676

|. Segment information is presented for the "consclidated financial results" as permitted under the Ind AS 108 - 'Operating Segments',

ii. The Company is focused on two business segments: Diversified engineering and Custom designed building solutions & auxillaries. Based on the "management approach" as defined in Ind AS 108 - 'Operating Segments', the Chief Operating Decision Maker evaluates the Company's performance and allocation resources based on an analysis of various performance Indicators by business segments. Accordingly, Information has been presented along these business segments. The accounting principles used in the preparation of the financial results are consistently applied to record revenue and expenditure in individual segments.

Place ; Hyderabad Date : August 11,2021

By order of the Board for Pennar Industries Li