To the Members of BGR ENERGY SYSTEMS LIMITED
Your directors have pleasure in presenting their 30th Annual Report together with theaudited fi nancial statements for the year ended March 31 2016.
The highlights of the standalone fi nancial performance of the Company during the financial year ended March 31 2016 as compared with the previous fi nancial year endedMarch 31 2015 are summarized below:
| || ||(Rs. Crore) |
|Description ||2015-16 ||2014-15 |
|Income from operations ||3188 ||3365 |
|Other income ||5.89 ||1.50 |
|Total income ||3194 ||3367 |
|Earnings before Interest Depreciation Tax and Amortization ||320 ||310 |
|Profi t before tax ||60 ||79 |
|Tax Expense ||27 ||37 |
|Net Profi t ||33 ||42 |
|Amount available for appropriation ||33 ||42 |
|Transfer to general reserve ||3 ||4 |
|Balance carried to Balance Sheet ||30 ||38 |
DIVIDEND AND APPROPRIATION
The Board of Directors do not recommend dividend for the FY 2015-16 in order to augmentinternal accruals to fund the working capital. Your directors wish to carry an amount ofRs.30 crores to the Balance Sheet after appropriation of Rs.3 crores to general reserve.
During the year the Company has successfully commissioned its fi rst 2 X 660MW SuperCritical Thermal Power
Plant at Krishnapatnam. Both the units have achieved commercial operation and have beenhanded over to the client. Your Company has also handed over both units of the 2 x 600 MWEPC Kalisindh Project and the plants are currently under commercial operation by theclient RRVUNL. During the year your Company has achieved full load operation for Unit #9of the 2 x 500 MW Chandrapur TPS and commercial operation date (COD) was declared for Unit#1 of 2 x 500 MW Marwa project.
The Companys affairs and operations have been analyzed in the ManagementDiscussion & Analysis report (Annexure IX) forming part of this Directors report.
STATUS OF JOINT VENTURES
BGR Boilers Private Limited and BGR Turbines Company Private Limited
These joint venture companies with Hitachi were set up in 2010 to carry on the businessof design engineering and manufacture of supercritical steam generators and supercriticalsteam turbine and generators of 660 MW 800 MW and 1000 MW capacity. Until 2014 thesecompanies have acquired substantial private lands required for setting up of manufacturingfacilities and also made signifi cant progress towards purchase of capital equipment. Thesetting up of manufacturing facilities of supercritical steam generators and supercriticalsteam turbine and generators got adversely impacted consequent to the global merger/integration of thermal power businesses of Hitachi and Mitsubishi Heavy Industries Limitedthrough new Company in Japan viz. Mitsubishi Hitachi Power Systems Limited (MHPS) inJapan and Mitsubishi Hitachi Power Systems Europe GmbH (MHPSE) in Germany. This hascreated an adverse impact on the Companys business in BTG and EPC segments and inNTPC contracts for Solapur Meja Lara and Raghunathpur project contract with DVC. YourCompany has initiated legal proceedings before the Madras High Court and CompetitionCommission of India against Hitachi. During the fi nancial year 2015-16 Hitachi and theCompany have negotiated and arrived at an amicable resolution in the matters of disputeand differences including inter-se disputes and impact on NTPC contracts. Theseresolution of disputes has been settled by way of an Agreement between the Hitachi and theCompany on March 30 2016. The Agreement inter alia provides for execution of NTPCcontracts for Solapur (2 x 660 MW) and Meja (2 x 660 MW) of Supercritical Steam Generators(Boilers) and Lara (2 x 800 MW) Supercritical Steam Turbines and Generators (STG)(collectively referred to as "NTPC Projects") and for certain arrangement withrespect to the future of the JV relationship between HTC HPE and the Company in respectof the existing Joint Venture companies viz. BGR Boilers Private Limited and BGR TurbinesCompany Private Limited after completion of the NTPC Projects in compliance of the NTPCcontract and other related conditions.
The Performance and financial position of each subsidiary and JV
A report on the performance and fi nancial position of each of the subsidiaries andjoint venture as per Rule 5 of the Companies (Accounts) Rules 2014 is provided asannexure to the consolidated fi nancial statement and hence not repeated here for the sakeof brevity as required under rule 8(1) of the Companies (Accounts) Rules 2014.
CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements of the Company prepared in accordance withrelevant Accounting Standards (AS-21 and AS-27) form part of this Annual Report. Asrequired under Section 129 of the Companies Act 2013 a separate statement containing thesalient features of the fi nancial statements of subsidiaries is attached along with thefi nancial statement. In terms of Section 136 of the Companies Act 2013 the Company hasplaced on its website the standalone and consolidated fi nancial statements and theseparate audited and unaudited accounts of all subsidiary companies as the case may beand the Company will provide a copy of separate audited fi nancial statements in respectof each of its subsidiary to any shareholder of the company who asks for it. The disputeswith Hitachi as brought out herein above has adversely affected approval of audited financial statements of BGR Boilers and BGR Turbines by the respective Board of Directors.Your Company is confi dent that in view of settlement of disputes the preparationapproval and adoption of fi nancial statements will be completed very soon.
BOARD OF DIRECTORS
In accordance with the provisions of Companies Act 2013 Mr. A. Swaminathan Directorretires by rotation and being eligible offers himself for reappointment. A brief profi leof Mr. A. Swaminathan is given in the notice convening the 30th annual general meeting ofthe Company.
Mr.M.S. Sundara Rajan independent director resigned from the Board of Directors of theCompany with effect from July 01 2016. All Independent Directors have given declarationsthat they meet the criteria of independence as laid down under Section 149(6) of theCompanies Act 2013 and Clause 49 of the listing agreement.
MEETINGS OF BOARD
During the year 5 Board meetings and 5 Audit Committee meetings were convened and heldthe details of which are given in the Corporate Governance Report. The intervening gapbetween any two meetings was within the period prescribed under the Companies Act 2013.
ANNUAL EVALUATION OF BOARD
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annual evaluationof its own performance individual directors separately as well as the evaluation of theworking of its Audit Committee of Directors Stakeholders Relationship Committee andNomination and Remuneration Committee. A comprehensive questionnaire formulated by theNomination and Remuneration Committee covering various aspects of the functioning of theBoard was circulated to all the Directors to evaluate the performance of the Board. Aseparate questionnaire was also circulated to each director to evaluate the performance ofthe other directors including the Chairman of the Board.
The Audit Committee of the Board comprises of four directors of which three members areindependent directors and all the members of Audit Committee are fi nancially literate.More details of the Audit Committee are provided in the Corporate Governance Report.
The paid-up equity share capital of the Company as on March 31 2016 was Rs.72.16Crores. During the year under review the Company has not issued shares with differentialvoting rights nor granted stock options nor sweat equity.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
In compliance with Section 205A of the Companies Act 1956 a sum of Rs.356276 beingthe unclaimed dividend declared by the Company for the fi nancial year ended March 312008 was transferred to the Investor Education and Protection Fund of the CentralGovernment in October 2015 after giving suffi cient notice to the concerned shareholders.
Dividend which remains unclaimed out of the dividend declared by the Company for the financial year ended March 31 2009 at the Annual General Meeting held on September 14 2009will be transferred to the Investor Education and Protection Fund of the CentralGovernment in October 2016 pursuant to the provisions of Section 205A of the CompaniesAct 1956. Thereafter no claim shall lie on these dividends from the shareholders.
The Companys efforts on human resources development has been analyzed in theManagement Discussion & Analysis report (Annexure IX) forming part of this Directorsreport.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided elsewhere in the Annual Report. In terms ofthe provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of theCompanies (Appointment and
Remuneration of Managerial Personnel) Rules 2014 a statement showing the names andother particulars of the employees drawing remuneration in excess of the limits set out inthe said rules are provided in the annual report. Having regard to the provisions of thefi rst proviso to Section 136(1) of the Act the annual report excluding the aforesaidinformation is being sent to the members of the Company. The said information is availablefor inspection at the registered offi ce of the Company during working hours and anymember interested in obtaining such information may write to the Company Secretary and thesame will be furnished on request.
EMPLOYEE STOCK OPTION SCHEME
Your Company has implemented the Employee Stock Option Scheme 2007 in accordance withthe SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines1999. The Nomination and Remuneration Committee administers and monitors the Scheme. Theapplicable disclosures as stipulated under the SEBI Guidelines as at March 31 2016 areattached as Annexure I of this report.
Your Company has not accepted deposit from the public during the period under reviewand hence did not have outstanding deposits.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption stipulated underSection 134(3)(m) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts)Rules 2014 is annexed herewith as Annexure II. During the FY 2015-16 the Foreignexchange earnings and outgo were Rs.131122 lakhs and Rs. 728 lakhs respectively.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TOFINANCIAL STATEMENTS
Your Company has internal controls system which includes fi nancial controlcommensurate with the size scale and complexity of companys operations. Theinternal audit function evaluate the effi cacy and adequacy of internal control system inthe Company its compliance with operating systems accounting procedures and policies atall locations of the Company. Based on the report of internal audit function processowners undertake corrective and remedial action in their respective areas ofresponsibility and thereby strengthen the controls. Signifi cant audit observations andcorrective actions thereon are periodically reviewed by the Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility Committee was constituted by the Board of Directorswith Mrs. Sasikala Raghupathy as Chairman and Mrs. Swarnamugi Karthik and Mr. GnanaRajasekaran as members of the Committee. The CSR Policy formulated and recommended by theCommittee is in place. The Policy is in line with Schedule VII of the Companies Act 2013and the Company will be focusing on CSR activities pertaining to education health skilldevelopment and destitute women care and welfare. The contents of CSR Policy is given inthe Corporate Governance Report. The Annual Report on CSR activities is annexed herewithas Annexure III.
The Remuneration Policy formulated by the Nomination and Remuneration Committee isgiven in Annexure IV.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Your Company has established a vigil mechanism for directors and employees to reportgenuine concerns as required by the Companies (Meetings of Board and its Powers) Rules2014 and the policy/ mechanism has adequate safeguards against victimization of personswho use such mechanism and provision for direct access to the chairperson of the AuditCommittee in appropriate or exceptional cases.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Particulars of loans guarantees or investments covered under the provisions of Section186 of the Companies Act 2013 are given in the note No.34 to the Financial Statements.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the fi nancial year werein the ordinary course of business and on an arms length basis except onetransaction. The details of transaction which was not on arms length basis areprovided in the Annexure V (Form AOC 2). There were no other materially signifi cantrelated party transactions made by the Company with Promoters Directors Key ManagerialPersonnel or other designated persons which may have a potential confl ict with theinterest of the Company at large. All related party transactions are placed before theAudit Committee for approval. A transaction not on arms length is placed before theBoard for approval subsequent to the recommendation and approval of Audit Committee. ThePolicy on related party transactions as approved by the Board is uploaded onCompanys website.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE
There are no signifi cant and material orders passed by the regulators or courts ortribunals impacting the going concern status of the Company.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s.B.Chitra & Co. Company Secretaries in practice to undertake thesecretarial audit of the Company. The Report of secretarial audit is annexed as AnnexureVI. The audit report is unqualifi ed and without reservation or adverse comment oncompliance.
RISK MANAGEMENT POLICY
The Company as part of Standard Operating System and Procedure institutionalized riskmanagement covering risk identifi cation mitigation and management measures. This RiskCharter and Policy have been brought to practice as part of internal control systems andprocedures. The Management has applied the risk management policy to business activitiesand processes and this is reviewed to ensure that executive management manages riskthrough means of a properly defi ned framework.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(3) (c ) of the Companies Act 2013 withrespect to Directors responsibility statement it is hereby confi rmed that: a) Inthe preparation of the annual accounts for the Financial year ended March31 2016 the applicable accounting standards had been followed along with properexplanation relating to material departures if any ; b) the Directors have selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as at March 31 2016 and of the profi t of the Company for the Financial yearended on that date ; c) the Directors have taken proper and suffi cient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; and d) the Directors had prepared the annualaccounts for the year ended March 31 2016 on a going concern basis. e) the Directors hadlaid down internal fi nancial controls to be followed by the company and that suchinternal fi nancial controls are adequate and were operating effectively. f) the Directorshad devised proper systems to ensure compliance with the provisions of all applicable lawsand that such systems were adequate and operating effectively.
STATUTORY AUDITORS AND AUDITORS REPORT
M/s. Manohar Chowdhry & Associates Chartered Accountants Chennai (Firm Regn. No.001997S) were appointed as the Statutory Auditors of the Company at the last AnnualGeneral Meeting held on September 24 2015 to hold offi ce for a term of two years i.e.till the conclusion of the 31st Annual General Meeting subject to ratifi cation of theirappointment by the shareholders at the next following Annual General Meeting of theCompany. As required under the provisions of Section 139(1) of the Act the Company hasreceived written consent from Manohar Chowdhry & Associates Chartered AccountantsChennai informing that their appointment if made would be within the limits prescribedunder Section 139 of the Companies Act 2013 and that they are not disqualifi ed forre-appointment in terms of Section 141 of the Companies Act 2013.
The Board of Directors appointed Mr.A.N.Raman Cost Accountant as the Cost Auditor ofthe Company for the Financial year 2016-17 under Section 148 of the Companies Act 2013.The Cost Audit Report for the fi nancial year ended March 31 2015 issued byMr.R.Vaidhyanathan Cost Auditor was submitted to the Central Government on September 302015.
A Report on Management Discussion & Analysis of Performance (Annexure IX) andCompliance of Corporate Governance under clause 49 of the listing agreement and Certificate from auditors confi rming compliance of conditions of Corporate Governance areincluded in this Annual Report as Annexure VII.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure VIII.
ANNEXURES FORMING PART OF DIRECTORS REPORT
The annexures referred to in this report and other information which are required to bedisclosed are annexed herewith and form part of this Report of Directors.
|ANNEXURE ||PARTICULARS |
|I ||Disclosure on ESOP as per SEBI Guidelines |
|II ||Energy conservation and Technology absorption |
|III ||Annual Report on CSR activities |
|IV ||Remuneration Policy |
|V ||Related Party transactions |
|VI ||Secretarial Audit Report |
|VII ||Corporate Governance Report along with the Certifi cate of Auditors |
|VIII ||Extract of Annual Return in Form MGT-9 |
|IX ||Management Discussion & Analysis Report |
Your Directors wish to thank the customers vendors collaborators business partners/associates statutory authorities Central and State Governments and shareholders fortheir support and cooperation during the year under review. Your Directors also recordtheir appreciation to the bankers for their continued fi nancial support and guidance.Your Directors place on record their sincere appreciation to all the employees of thecompany for their commitment and continued contribution to the Company.
|For and on behalf of the Board |
|Sasikala Raghupathy |
|Place : Chennai |
|Date : July 28 2016 |
DISCLOSURE IN THE DIRECTORS REPORT AS PER SEBI GUIDELINES
|Sl. No. ||Particulars ||2015-16 |
|(i) ||Description of each ESOS existing during the year || |
| ||a) Date of shareholders approval ||11/07/2007 |
| ||b) Total number of options approved under ESOS ||704770 |
| ||c) Vesting requirements ||The options granted shall vest so long as the employee continues to be in the employment of the company. Vesting of the options shall take place over a maximum period of 5 years with a minimum period of 1 year from the date of grant. |
| || ||The Board would determine the exact proportion and period in which the options would vest. |
| || ||The Board may in its discretion lay down certain performance metrics on the achievement of which the granted options would vest the detailed terms and conditions relating to such performance based vesting and the proportion in which options granted under the scheme would vest (subject to the minimum vesting period as specifi ed above.) |
| ||d) Exercise price or pricing formula ||Rs. 408/- |
| ||e) Maximum term of options granted ||5 years from the date of last vesting |
| ||f) Source of shares (primary secondary or combination) ||Primary |
| ||g) Variation in terms of options ||None |
|(ii) ||Method used to account for ESOS - Intrinsic or fair value ||Intrinsic |
|(iii) ||Where the company opts for expensing of the options using the intrinsic value of the options difference between the employee compensation cost so computed and the employee compensa- tion cost shall have been recognised if it had used the fair value of the options shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed. ||All the expenses on account of both the grants dated 18th July 2007 have been taken in the books over the vesting period of the options granted. |
|(iv) ||a) Option movement during the year || || |
| ||Particulars ||Details ||Weighted Avg. Market Price |
| ||Number of options outstanding at the beginning of the period ||259178 ||408 |
| ||Number of options granted during the year ||0 ||N.A |
| ||Number of options forfeited/lapsed during the year ||182461 ||408 |
| ||Number of options vested during the year ||0 ||N.A |
| ||Number of options exercised during the year ||0 ||N.A |
| ||Number of shares arising as a result of exercise of options ||0 ||N.A |
| ||Money realised by exercise of options if scheme is directly imple- ||0 ||N.A |
| ||mented by the company || || |
| ||Loan repaid by the Trust during the year from exercise price received ||N.A. ||N.A. |
| ||Number of options outstanding at the end of the year ||76717 ||408 |
| ||Number of options exercisable at the end of the year ||56341 ||408 |
| ||b) for stock options exercised during the period the weighted av- erage share price at the date of exercise. If options were exer- cised on a regular basis throughout the period the enterprise may instead disclose the weighted average share price during the period. ||There are no options exercised during the period. |
| ||c) for stock options outstanding at the end of the period the range of exercise prices and weighted average remaining contractual life (comprising the vesting period and the exercise period). If the range of exercise prices is wide the outstanding options should be divided into ranges that are meaningful for assessing the number and timing of additional shares that may be issued and the cash that may be received upon exercise of those options. ||All options outstanding are at an Exercise price of Rs.408. Since the date of last exercise for category I has expired on January 3 2016 the options pertaining to Category I have lapsed. The remaining average contractual life of options pertaining to Cat- egory II is 0.76 years. All outstanding options if not exercised would lapse on January 4 2017. |
|(v) ||Weigheted-average exercise price of options whose || |
| ||a) Exercise price equals market price ||N.A. |
| ||b) Exercise price is greater than market price ||408 |
| ||c) Exercise price is less than market price ||N.A. |
| ||Weigheted-average fair value of options whose || |
| ||a) Exercise price equals market price ||N.A. |
| ||b) Exercise price is greater than market price ||186 |
| ||c) Exercise price is less than market price ||N.A. |
|(vi) ||Employee wise details of options granted to || |
| ||(i) Senior Managerial Personnel || |
| ||(ii) any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year. || |
| || ||"N.A. |
| || ||No options were granted during the current year." |
| ||(iii) identifi ed employees who were granted option during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant. || |
|(vii) ||A description of the method and significant assumptions used during the year to estimate the fair value of options including the following information: || |
| ||(a) the weighted-average values of share price exercise price expected volatility expected option life expected dividends the risk-free interest rate and any other inputs to the model || |
| ||(b) the method used and the assumptions made to incorporate the effects of expected early exercise ||N.A. |
| || ||No options were granted during the current year. |
| ||(c ) how expected volatility was determined including an explanation of the extent to which expected volatility was based on historical volatility; and || |
| ||(d) whether and how any other features of the option grant were incorporated into the measurement of fair value such as a market condition. || |
ENERGY CONSERVATION AND TECHNOLOGY ABSORPTION
During the year the following measures were taken by the Company for energy andresource conservation at the unit of AFC division of the Company:
1. AFC has a plan to go green. In this initiative AFC discontinued with tube cleaningsystem using hazardous chemical and highly labour intensive process. This has beenreplaced by an innovative on line tube cleaning system in the fi nning machine. This wasdeveloped internally and demonstrates AFC team innovation. This is a major greeninitiative by AFC to save environment.
2. AFC initiated a study of harmonic analysis on the power quality and are in theprocess of introducing active fi lters. With this a. the power quality will be improved ;b. excess heating-up will reduce and save power ; c. energy saving can be achieved issubstantial.
3. To become energy efficient usage of screw compressor has been implemented.
4. For optimum utilisation of DG power during power cut mini DG set (30 KVA) is beingplanned.
5. AFC has a plan to introduce solar lighting for the plant STP operation censors forall the meeting rooms to save the energy.
6. This year one more energy audit will be initiated for further improvement.
7. Major operation of AFC is in fi nning which consumes huge power. AFC will beinitiating a study to understand invertor based motors to save power.
Disclosure of particulars with respect to Technology absorption adaptation andinnovation
|1 Efforts made towards technology absorption. ||Under implementation |
|2 Benefi ts derived like product improvement cost reduction product development import substitution. ||N.A. |
|3 In case of imported technology (imported during the last three years reckoned from the beginning of the fi nancial year)- || |
|(a) Details of technology imported ||Technology relating to design engineering and manufacture of Heat Recovery Steam Generators |
|(b) Year of import ||2010 |
|(c) Whether the technology been fully absorbed ||No |
|(d) If not fully absorbed areas where absorption has not taken place and the reasons thereof. ||Training of man power has not taken place due to business reasons. |
|4 Expenditure incurred on research and development ||Nil |
ANNUAL REPORT ON CSR ACTIVITIES OF THE COMPANY
1. Brief outline of CSR policy including overview of projects or programs proposed tobe undertaken and a reference to the web-link to the CSR policy and projects or programs.
Brief outline of CSR policy is stated herein below : The Company as its CSR shall focuson programs / projects from the following areas as per the provisions of Schedule VIIreferred in the section 135 of the Companies Act 2013: a. Eradication hunger poverty andmalnutrition promoting preventive health care and sanitation and making available safedrinking water. b. Promotion education including special education and employmentenhancing vocation skills especially among children women elderly and the differentlyabled and livelihood enhancement projects. c. Promoting gender equality empowering womensetting up homes and hostels for women and orphans; setting up old age homes day carecentres and such other facilities for senior citizens and measures for reducinginequalities faced by socially and economically backward groups.
d. Ensuring environmental sustainability ecological balance protection of fl ora andfauna animal welfare agroforestry conservation of natural resources and maintainingquality of soil air and water. e. Protection of national heritage art and cultureincluding restoration of buildings and sites of historical importance and works of art;setting up public libraries; promotion and development of traditional arts andhandicrafts. f. Measures for the benefi t of armed forces veterans war widows and theirdependents. g. Training to promote rural sports nationally recognised sports Paralympicsports and Olympic sports. h. Contribution to the Prime Ministers National ReliefFund or any other fund set up by the Central Government for socio-economic development andrelief and welfare of the Scheduled Castes the Scheduled Tribes other backward classesminorities and women. i. Contributions or funds provided to technology incubators locatedwithin academic institutions which are approved by the Central Government. j. Ruraldevelopment projects.
2. Weblink of CSR Policy: http://www.bgrcorp.com/policy/CSR_Policy.pdf
3. Composition of CSR Committee: Mrs.Sasikala Raghupathy Chairperson Mrs.SwarnamaugiKarthik Mr.Gnana Rajasekaran
4. Average net profi t of the Company for the last three fi nancial years: Rs.17223Lakhs
5. Prescribed CSR Expenditure (two percent of the amount as in item 3 above): Rs.344Lakhs
6. Details of CSR spent during the fi nancial year 2015-16.
a) Total amount to be spent for the FY 2015-16.Rs.344 Lakhs
b) Amount unspent if any. Rs.305 Lakhs
c) Manner in which the amount spent during the FY 2015-16.
|CSR Project or activity identified ||Sector in which Project is covered ||Projects or Programs (1) Local area or other (2) Specify the State and district where projects or programs was undertaken ||Amount outlay (budget) project/pro- gram wise ||Amount spent on projects or programs Sub-heads (1)Direct expenditure on proj- ects or programs (2) Overheads ||Cumulative expenditure up to the reporting period ||Amount spent: Direct or through implementing agency |
|Setting up old age home ||Promoting setting up of old age homes day care centres and other facilities for senior citizens ||Tirukandalam Village Tiruvallur District Tamilnadu ||Rs.30 lakhs ||Rs.30 lakhs ||Rs.30 lakhs ||Implementing Agency i.e.Manonmani Trust |
|Disaster Relief ||Eradicating hungerpoverty and promoting health care ||Cuddalore Tamilnadu ||- ||Rs.9.24 lakhs ||Rs.9.24 lakhs ||Direct |
d) Reasons for not spending the amount during FY 2015-16
The Company is in the process of identifying programs/projects/agencies for spendingthe balance CSR funds so as to make them impactful.
7. Responsibility Statement:
The implementation and monitoring of CSR policy is in compliance with CSR objectivesand policy of the Company.
|A. Swaminathan ||Sasikala Raghupathy |
|Joint Managing Director & CEO ||Chairperson of CSR Committee |
This remuneration policy applies to all Directors Key managerial Personnel anddesignated employees of the Company.
This policy seeks to achieve the following objectives viz. a. The directors keymanagerial personnel and designated employees of the Company are governed by acompensation criteria that fosters meritocracy and industry standards. b. Attract andretain high calibre professionals/personnel required to manage the business operationsand strategic growth of Company successfully. c. Theremunerationshallbecompetitiveandbased on the individual responsibilities contribution and performance. d. To attractretain and motivate talent and a balance of fi xed and variable so as to incentivise highlevel of performance. The Remuneration Policy is guided by a common reward framework andset of principles and objectives as more fully and particularly envisaged under Section178 of the Companies Act 2013 and principles pertaining to determining qualifi cationspositives attributes integrity and independence.
3. REMUNERATION TO DIRECTORS a. Fee to Non-executive directors. A non-executivedirector may receive remuneration by way of sitting fee for attending meetings of theBoard or Committee thereof. The amount of fees shall not exceed the amount as may beprescribed under The Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 and any amendment thereto. b. The amount of fee to Independent directors andwomen directors shall not be less than the fee payable to other directors.
c. No sitting fee shall be paid to the executive directors for attending Board orCommittee meetings. d. The Board may review the fee at reasonable length of time and indoing so consider industry trends practices Companys performanceshareholders interest and regulatory provisions and environment. e. No directorother than Chairman of the Board shall be entitled to commission on profi ts of theCompany and such commission shall be determined by the Board for each fi nancial year andsuch payment shall be subject to the provisions of the Companies Act 2013. f. Directorsshall be entitled to reimbursement of expenses on travelling lodging boarding and otherout-of-pocket expenses incurred for participation in the Board and Committee meetings andother work related to the Companys business.
4. REMUNERATION TO KEY MANAGERIAL PERSONNEL a. The remuneration to keymanagerial personnel (Joint Managing Director
& Chief Executive Offi cer Joint Managing Director Whole Time DirectorCompany Secretary and Chief Financial Offi cer) shall be determined with due regard tothe individuals educational and professional qualifi cations age experienceexpertise knowledge and contribution and competition for such talents in theindustry/corporate sector. b. The remuneration payable to key managerial personnel maycomprise of i Fixed salary variable salary bonus/ ex-gratia ii. Perquisites andAllowances performance-linked incentive and other compensation as the Board maydetermine. iii. Remuneration to any one executive director shall not exceed fi ve per centof the net profi ts of the Company and the total remuneration payable to all executivedirectors together shall not exceed ten per cent of the net profi ts of the Company.
5. REMUNERATION TO DESIGNATED EMPLOYEES: a. For the purpose of this policyan employee who is employed by the company and designated as a member of core managementbut not a director and all Head of functional responsibility or management and holdingoffi ce one level below executive directors are Designated Employees. b. The remunerationshall be determined in an equitable manner having regard to qualifi cations ageexperience and contribution to the Company need to retain talent and industry/markettrends. c. Remuneration to designated employees shall include fixed salary variablesalary bonus/ex-gratia perquisites and allowances performance-linked incentive andother compensation as the Board may determine.
6. REMUNERATION TO OTHER EMPLOYEES:
The nature of job and market parity of similar talent will be key factor in paydetermination for different levels of employees.
1. Wage and salary structure will be simple and easy to link performance andcompensation.
2. Discretionary retention bonus may be given in deserving cases as may be decided bymanagement.
3. Annual pay increases will be based on a combination of appraisal of competency andperformance rating.
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014) Form for disclosure of particulars ofcontracts/arrangements entered into by the company with related parties referred to insub-section (1) of section 188 of the Companies Act 2013 including certain arms lengthtransactions under third proviso thereto
1 (i). Details of contracts or arrangements or transactions not at arms lengthbasis (a) Name(s) of the related party and nature of relationship ENEXIO Power CoolingSolutions India Private Limited (Formerly GEA Cooling Tower Technologies India PrivateLimited) - Related party by virtue of common directorship of Mrs.Swarnamugi KarthikDirector.
FORM NO. AOC-2
(b) Nature of contracts/arrangements/ transactions Purchase of goods (c) Duration ofthe contracts/ arrangements/transactions Single transaction (d) Salient terms of thecontracts or arrangements or transactions including the value if any Purchase ofdrift Eliminators including spacers clips for Rs.21515625/- inclusive of applicabletax.
(e) Justifi cation for entering into such contracts or arrangements or transactions.Considering the quality of the product and reliability of supplies the order was placedwith
ENEXIO even though the pricing was marginally higher than the competitors in themarket.
(f) Date(s) of approval by the Board February 11 2016 (g) Amount paid as advances ifany: Not applicable (h) Date on which the special resolution was passed in general meetingas required under fi rst proviso to section 188. Not applicable
2. Details of material contracts or arrangement or transactions at arms lengthbasis NIL
Form No.MR - 3
SECRETARIAL AUDIT REPORT for the Financial Year ended 31.03.2016
[Pursuant to section 204(1) of the Companies Act 2013 and rule
No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014]
BGR Energy Systems Limited
We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by BGR ENERGY SYSTEMS LIMITED(hereinafter called the "Company"). The Secretarial Audit was conducted in amanner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.
Based on our verifi cation of the books papers minute books forms and returns fi ledand other records maintained by the Company and also the information provided by theCompany its offi cers agents and authorized representatives during the conduct of thesecretarial audit we hereby report that in our opinion the Company has during theaudit period covering the fi nancial year ended on 31st March 2016 compliedwith the statutory provisions listed hereunder and also that the Company has properBoard-processes and compliance-mechanism in place to the extent in the manner and subjectto the reporting made hereinafter: We have examined the books papers minute books formsand returns fi led and other records maintained by the Company for the fi nancial yearended on 31st March 2016 according to the provisions of:
(i) The Companies Act 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act 1956 (SCRA) and the rulesmade thereunder;
(iii) The Depositories Act 1996 and the Regulations and Bye - laws framed thereunder;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment - The Company has no Overseas DirectInvestment and External Commercial Borrowings and hence not applicable.
(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;
(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 - The Company did not issue any security during the financial year under review and hence not applicable;
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme Guidelines 1999/ Share based employee benefi ts)Regulations 2014;
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 - During the fi nancial year under review the Company has not issued anydebt securities and hence not applicable;
(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client -The Company is not registered as transferor to an issue and Share Transfer Agent duringthe fi nancial year under review and hence not applicable;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009 - Not applicable during the fi nancial year under review as the Companyhas not delisted its equity shares from any stock exchange; and
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998- The Company has not bought back any of its securities during the fi nancial yearunder review and hence not applicable;
(vi) The other laws applicable specifi cally to the company: NIL.
We have also examined whether adequate systems and processes are in place to monitorand ensure compliance with general laws including labour laws competition laws andenvironment laws etc. In respect of fi nancial laws like Tax laws we have relied on theaudit reports made available during our audit for us to have the satisfaction that theCompany has complied with the provisions of such laws.
We have also examined compliance with the applicable clauses of the following: (i)Secretarial Standards issued by The Institute of Company Secretaries of India.
(ii) The Listing Agreements entered into by the Company with NSE and BSE and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 for securities.
During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above.
We further report that;
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors Women Directors and Independent Directors.
Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent in advance and a system exists for seeking andobtaining further information and clarifi cations on the agenda items before the meetingand for meaningful participation at the meeting. All decisions at Board Meetings andCommittee Meetings are carried out unanimously as recorded in the minutes of the meetingsof the Board of Directors or Committee of Directors as the case may be.
We further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
We further report that during the audit period the company has no majortransactions/events having a major bearing on the companys affairs in pursuance ofthe above referred laws.
This report has to be read along with our statement furnished in Annexure A.
Annexure A to Secretarial Audit Report
BGR Energy Systems Limited
Statement regarding Secretarial Audit Report for the Financial Year ended 31.03.2016
1. Maintenance of secretarial record is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.
2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverifi cation was done on test basis to ensure that correct facts are refl ected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.
3. We have not verifi ed the correctness and appropriateness of fi nancial records andBooks of Accounts of the Company.
4. Where ever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of the management of the Company. Ourexamination was limited to the verifi cation of procedures on test basis.
6. The Secretarial Audit Report is neither an assurance as to the future viability ofthe Company nor of the effi cacy or effectiveness with which the management has conductedthe affairs of the Company.
| ||For Chitra & Co. |
| ||B. CHITRA |
| ||(Partner) |
| ||FCS No.:4509 |
| ||C P No.:2928 |
|Place : Chennai || |
|Date : July 28 2016 || |