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BGR Energy Systems Ltd.

BSE: 532930 Sector: Engineering
NSE: BGRENERGY ISIN Code: INE661I01014
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VOLUME 6292
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OPEN 58.35
CLOSE 57.05
VOLUME 6292
52-Week high 105.25
52-Week low 54.10
P/E
Mkt Cap.(Rs cr) 397
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

BGR Energy Systems Ltd. (BGRENERGY) - Director Report

Company director report

To the Members of

BGR ENERGY SYSTEMS LIMITED

Your directors have pleasure in presenting their 36th Annual Reporttogether with the audited financial statements for the year ended March 31 2022.

FINANCIAL RESULTS

The highlights of the standalone financial performance of the Companyduring the financial year ended March 31 2022 as compared with the previous financialyear ended March 31 2022 are given below:

( Rs in Crores)

Description 2021-22 2020-21
Income from operations 1220.70 1139.72
Other income 8.14 6.01
Total Income 1228.84 1145.73
Earnings before Interest
Depreciation Tax and 73.12 (186.58)
Amortization
Profit before exceptional item
(236.41) (475.27)
and tax
Tax Expense (58.34) (119.85)
Net Profit after tax (178.07) (355.42)
OtherComprehensiveincome(net) (3.08) 1.31
Net Worth 881.95 1063.10

DIVIDEND AND APPROPRIATION

In view of losses for the financial year 2021-22 the Board ofDirectors have not recommended dividend for the year.

TRANSFER TO RESERVE

Due to losses in the financial year 2021-22 no amount has beentransferred to reserves.

COMPANY?S OPERATING PERFORMANCE AND STATE OF AFFAIRS

The Company?s operating performance and state of affairs have beendiscussed in Management Discussion and Analysis which is enclosed as Annexure I of theDirectors Report.

SUBSIDIARIES AND JOINT VENTURES

BGR Boilers Private Limited which supplies 660 MW super critical steamgenerators made an operating income of Rs.11.73 Crores and incurred a loss of Rs.7.72Crores in the year 2021-22. BGR Turbines Company Private Limited which supplies 800MWsuper critical steam turbine generators has recorded an operating income of Rs. 3.35Crores and a loss of Rs. 0.25 Crores in the year 2021-22. There has been no materialchange to the financial position of the wholly owned subsidiary Sravanaa

Properties Limited.

A report on the performance and financial position of each of the subsidiaries andjoint ventures as per rule 5 of the Companies (Accounts) Rules 2014 is provided asannexure to the consolidated financial statement as required under Rule 8(1) of theCompanies (Accounts) Rules 2014.

CONSOLIDATED FINANCIAL STATEMENT In accordance with Companies Act 2013 andimplementation requirements of Indian Accounting Standards (Ind AS) Rules on accountingand disclosure requirements the Audited Consolidated Financial Statements are provided inthis Annual Report. As required under Section 129 of the Companies Act 2013 a separatestatement containing the salient features of the financial statements of subsidiaries isenclosed along with the financial statements. In terms of Section 136 of the CompaniesAct 2013 the Company has placed on its website the standalone and consolidated financialstatements and the separate audited and unaudited annual financial statements ofsubsidiary companies as the case may be. The Company will provide a copy of separatefinancial statements in respect of each of its subsidiary to any shareholder of thecompany who asks for it.

BOARD OF DIRECTORS

The composition of Board of Directors of the Company is in conformity with theapplicable provisions of the Companies Act2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The Board of Directors on recommendation ofNomination and Remuneration Committee (NRC) and subject to approval of the shareholdershave re-appointed Mr. Arjun Govind Raghupathy (DIN: 02700864) as a Managing Director for aterm of five years commencing from November 112021 and shall be liable to retire byrotation.

In accordance with the provisions of Companies Act 2013 Mr. R. Ramesh Kumar (DIN:00176265) Director retires by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment. The Board of Directors recommends the proposedre-appointment of Mr. R. Ramesh Kumar as a Director of the Company.

The disclosure required pursuant to regulation 36 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and SS-2 on General Meetings are given in thenotice convening the 36th Annual General

Meeting.

DECLARATION FROM INDEPENDENT DIRECTORS

The Company has received necessary declaration from all the IndependentDirectors of the Company under Section 149 (7) of the Companies Act 2013 and Regulation16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 that theindependent directors of the Company meet the criteria of their independence laid down inSection 149(6) including the confirmation that their names are included in the data bankand all the independent directors except Mrs. Janaki C Ambat are exempted from undergoingthe online proficiency self-assessment test for the independent directors pursuant to Rule6(4) of Companies (Appointment and Qualification of Directors) Rules 2014. Mrs. Janaki CAmbat have time to complete the self-assessment test as per Rule 6(4) of Companies(Appointment and Qualification of Directors) Rules 2014.

During the year under review the independent directors met on February14 2022 without the presence of Non-Independent Directors and members of the management.The Board is of the opinion that all independent directors of the Company uphold higheststandards of integrity and possess requisite expertise and experience required to meettheir duties as Independent Directors.

MEETINGS OF BOARD

During the year 4 Board meetings and 4 Audit Committee meetings wereconvened and held. The details of these meetings are given in the Corporate GovernanceReport. The intervening gap between any two meetings was within the period prescribedunder the Companies Act 2013 and as per relaxations provided by Ministry of CorporateAffairs and SEBI.

ANNUAL EVALUATION OF BOARD

Pursuant to the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and having due regard to theSEBI?s Guidance Note on Board Evaluation the Board has carried out an annualevaluation of its own performance individual directors separately as well as theevaluation of the working of its Audit Committee Committee of Directors StakeholdersRelationship Committee and Nomination and Remuneration Committee.

A comprehensive evaluation process formulated by the Nomination andRemuneration Committee covering various aspects of the functioning of the Board wascirculated to all the Directors to evaluate the performance of the Board. The performanceevaluation of the Non-Independent Directors was carried out by the Independent Directorsand the performance of Independent Directors was carried out by the entire Boardexcluding the independent director being evaluated. The performance evaluation of theChairperson of the Company was carried out by the independent Directors taking intoaccount the views of the executive and non-executive directors. The Directors expressedtheir satisfaction with the evaluation process.

POLICYONDIRECTORS?APPOINTMENTREMUNERATION AND OTHER DETAILS

The Nomination and Remuneration Committee framed a policy onappointment of Directors including criteria for determining qualification positiveattributes and other matters. The main objectives of the policy are given below: (i)Enhancement of performance of the Board and facilitate effective Corporate Governance.

(ii) Encourage diversity of thoughts expertise and perspectives.

(iii) Usher in independence in the performance of the Board.

(iv) Eliminate gender bias if any in the constitution and functioningof the Board of Directors.

(v) Provide and create an environment for succession planning.

(vi) Identification of senior/key management personnel for appointmentas Executive Directors.

(vii) Provide for appropriate mix of promoter directors professionaldirectors and independent directors. On the recommendation of the NRC the Board hasadopted and framed a Remuneration Policy for the Directors Key Managerial Personnel andother employees pursuant to the applicable provisions of the Companies Act and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

The Company?s policy on diversity of Board of Directors isavailable on the Company?s website at http://www.bgrcorp.com/policy/Policy_Diversity_Board.pdf .

AUDIT COMMITTEE

The Audit Committee of the Board comprises of four directors of whichthree members are independent directors and all the members of Audit Committee arefinancially literate. More details of the Audit Committee are provided in the CorporateGovernance Report. All key recommendations and observations of the Audit Committee wereaccepted and acted upon by the management and compliance thereof are regularly monitoredand reviewed by the Committee.

SHARE CAPITAL

The paid-up equity share capital of the Company as on March 31 2022was Rs.72.16 Crores. During the year under review the Company has not issued new sharesor shares with differential voting rights nor granted stock options nor sweat equity.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

In compliance with Section 124(5) of the Companies Act 2013 a sum ofRs.773403/- being the unclaimed/unpaid dividend declared by the Company for thefinancial year ended March 31 2014 was transferred to the Investor Education andProtection Fund of the Central Government in October 2021 after giving sufficient noticeto the respective shareholders.

Pursuant to the provisions of Section 124(6) of the Companies Act 2013and the rules made thereunder the shares pertaining to the unpaid/unclaimed dividend forthe FY 2013-14 were transferred to the demat account of Investor Education and ProtectionFund (IEPF).

HUMAN RESOURCES

An overview on the Company?s human resources development andefforts to acquire and nurture talent is given in the Management Discussion & Analysisreport forming part of this Directors report.

For prevention prohibition and redressal of sexual harassment of Womenat workplace the Company has in place an Anti-Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. During the year under review no complaint was received by theInternal Complaints Committee (ICC) with allegations of sexual harassment.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Act read with rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided elsewhere in the AnnualReport.

In terms of the provisions of Section 197(12) of the Act read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said rules areprovided in the annual report. Having regard to the provisions of the first proviso toSection 136(1) of the Act the annual report excluding the aforesaid information is beingsent to the members of the Company. The said information is available for inspection atthe corporate office of the Company during working hours and any member interested inobtaining such information may write to the Company Secretary and the same will befurnished on request.

DEPOSITS

The Company did not accept any deposits from the public within themeaning of Chapter V of the Act 2013 read with the Companies (Acceptance of Deposits)Rules 2014 for the year ended March 31 2022.

ENERGYCONSERVATIONTECHNOLOGYABSORBTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO

The information on conservation of energy technology absorptionstipulated under Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 is annexed herewith as Annexure II. During the FY2021-22 the Foreign exchange earnings and outgo were Rs.15576 lakhs and Rs.57 lakhsrespectively.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITHREFERENCE TO FINANCIAL STATEMENTS

Your Company has in place adequate internal controls system whichincludes financial control commensurate with the size scale and complexity ofcompany?s operations. The internal audit function evaluates the efficacy and adequacyof internal control system in the Company its compliance with operating systemsaccounting procedures and policies at all locations of the Company. Based on the report ofinternal audit function process owners undertake corrective and remedial action in theirrespective areas of responsibility and thereby strengthen the controls. Significant auditobservations and corrective actions thereon are periodically reviewed by the AuditCommittee. During the year no reportable material weakness or significant deficiencies inthe design or operation of internal financial controls was noticed. The Audit Committeebased on the advice of the internal auditors directed the Company to improve the internalfinancial controls in few areas to ensure that the internal financial controls areoperating more effectively.

CORPORATE SOCIAL RESPONSIBILITY

The Company has Corporate Social Responsibility Committee constitutedby the Board of Directors with Mrs. Sasikala Raghupathy as Chairperson and

Mrs. Swarnamugi R Karthik and Mr. Gnana Rajasekaran as members of theCommittee. The CSR Policy formulated and recommended by the Committee is in place.

REMUNERATION POLICY

The Remuneration Policy formulated under section 178 of the CompaniesAct 2013 by the Nomination and Remuneration Committee is given in Annexure - III.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

Your Company has established a vigil mechanism for directors andemployees to report genuine concerns as required by Section 177 of the Companies Act 2013read with the Companies (Meetings of Board and its Powers) Rules 2014 and thepolicy/mechanism has adequate safeguards against victimization of persons who use suchmechanism and provision for direct access to the Chairperson of the Audit Committee inappropriate or exceptional cases.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Particulars of loans guarantees or investments covered under theprovisions of Section 186 of the Companies Act 2013 are disclosed in the note no.37 tothe Financial Statements.

RELATED PARTY TRANSACTIONS

The transactions with related parties entered into during the financialyear which were in the ordinary course of business and on an arm?s length basis wereplaced before the Audit Committee and approved. There was no material related partycontract/arrangement during the year. All related party transactions were made incompliance with Section 188 of the Companies Act 2013 and Regulation 23 SEBI (LODR)Regulations 2015. There were no other materially significant related party transactionsmade by the Company with promoters directors key managerial personnel or otherdesignated persons which may have a potential conflict with the interest of the Company.The Policy on related party transactions as approved by the Board is uploaded onCompany?s website.

DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS ORCOURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY?S OPERATIONS INFUTURE

During the Financial year 2021-22 no significant and material orderswere passed by the regulators or courts or tribunals impacting the going concern status ofthe Company.

RISK MANAGEMENT POLICY

The Company as part of Standard Operating System and Procedureinstitutionalized risk management covering risk identification mitigation and managementmeasures. The Risk Charter and Policy have been brought to practice as part of internalcontrol systems and procedures. The Management has applied the risk management policy tobusiness activities and processes and this is reviewed to ensure that executivemanagement manages risk through means of a properly defined framework. The Company istaking steps to make the risk management process more robust and institutionalized.

DIRECTORS? RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(3)(c) of the CompaniesAct 2013 with respect to Directors? responsibility statement it is hereby confirmedthat: a) in the preparation of the annual accounts for the Financial year ended March 312022 the applicable accounting standards had been followed along with proper explanationrelating to material departures if any; b) the Directors had selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at March 31 2022 and of the loss of the Company for the Financial year endedfor the period; c) the Directors had taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of the Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; d) the Directors had prepared the annual accounts for the year ended March31 2022 on a going concern basis; and e) the Directors had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively. f) the Directors had devised proper systems toensure compliance with the provisions of all applicable laws and that such systems wereadequate and operating effectively.

STATUTORY AUDITORS? AND AUDITORS? REPORT

N R Doraiswami & Co. Chartered Accountants Chennai (FirmRegistration No: 000771S) were appointed as the Statutory Auditors of the Company at the31st Annual General Meeting held on September 27 2017 to hold office until the conclusionof the ensuing 36th Annual General Meeting. The Statutory Auditors in their consolidatedaudited report have qualified that CARO related report has not been obtained for BGRBoilers Private Limited and BGR Turbines Company Private Limited.

N R Doraiswami & Co. Chartered Accountants Chennai will becompleting their term and tenure as Statutory Auditors at the ensuing Annual GeneralMeeting. N R Doraiswami & Co. are not seeking re-appointment for a second term. Basedon the recommendation of the Audit Committee and Board of Directors it is proposed toappoint M/s. Anand & Ponnappan Chartered Accountants Chennai (FRN No.000111S) asStatutory Auditors of the Company for a consecutive term of five years commencing from2022-23 to 2026-27 and who shall hold the office of Statutory Auditors from the conclusionof 36th Annual General Meeting until the conclusion of 41st Annual General Meeting.

The Company has obtained necessary certificate under Section 141(3) ofthe Companies Act 2013 read with Rule 10 of the Companies (Audit and Auditors) Rules2014 from M/s. Anand & Ponnappan Chartered Accountants Chennai confirming theireligibility to be appointed as the auditors of the Company and that they are free from anydisqualifications and that they do not violate the limits as specified under the CompaniesAct 2013.

Necessary resolutions for appointment of M/s. Anand

& Ponnappan Chartered Accountants Chennai is recommended forshareholders approval.

COST RECORDS AND COST AUDITORS

The Company is required to maintain cost records as specified by theCentral Government under sub-section (1) of Section 148 of the Companies Act 2013 andaccordingly during the year such accounts and records were made and maintained by theCompany. The Board of Directors re-appointed A. N. Raman & Associates CostAccountants as the Cost Auditor of the Company for the Financial year 2022-23 underSection 148 of the Companies Act 2013. The Cost Audit Report for the financial year endedMarch 31 2021 issued by A. N. Raman & Associates Cost Accountants was submitted tothe Central Government on September 6 2021. The audit report is unqualified and withoutreservation or adverse comment on compliance.

SECRETARIAL STANDARDS AND SECRETARIAL AUDIT

The Board of Directors confirm that your Company has complied with theapplicable Secretarial Standards during the year 2021-22.

Pursuant to the provisions of Section 204 of the Companies Act 2013read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 andRegulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015the Company has appointed V Suresh Associates Company Secretary in Practice to undertakethe secretarial audit of the Company. The Report of secretarial auditor is annexed asAnnexure – IV. The Secretarial auditor has stated that the Company was in default inmaking available audited financial statements of BGR Turbines Company Private Limited andBGR Boilers Private Limited in the website of the Company. These two subsidiaries have notcompleted audit of annual financial statements for the financial year 2020-21 and hencedefault. The Board impressed upon the management to ensure due compliance in the financialyear 2021-22. However these Companies continue to remain in default during the financialyear 2021-22 and hence audited annual financial statements of these two subsidiaries forthe financial year 2021-22 are not made available to the shareholders.

REPORTING OF FRAUD BY AUDITORS

During the year under review the Statutory Auditor Cost Auditor andSecretarial Auditor have not reported any instance of fraud committed in the Company byits officers or employees to the Audit Committee under section 143(12) of the CompaniesAct 2013 details of which needs to be reported.

CORPORATE GOVERNANCE

Corporate Governance report under SEBI (LODR) and the certificate fromthe auditors confirming compliance of the conditions of Corporate Governance are includedin this Annual Report as Annexure V.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY.

There were no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134 (3) (a) of the Act theAnnual Return of the company as on March 31 2022 is available on the company?swebsite. The link is provided here under http://www.bgrcorp.com/ annual_report.php

DISCLOSURES

1. There has been no change in the nature of business of the Companyduring the year under review.

2. Pursuant to Section 197(14) of the Act 2013 the Managing Directorof the Company did not receive any remuneration or commission from any of itssubsidiaries.

3. As on March 31 2022 there were 26 pending proceedings filedagainst the Company under the Insolvency and Bankruptcy Code 2016 and proceedings wereunder various stages of adjudicatory process. The Company has not filed any proceedingsunder the aforementioned Act.

4. The details of difference between amount of the valuation done atthe time of one-time settlement and the valuation done while taking loan from the banks orfinancial institutions along with the reasons thereof: Not Applicable.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation for thevaluable support and co-operation extended by customers vendors collaborators businesspartners/ associates statutory authorities Central and State Governments during the yearunder review.

Your Directors also record their appreciation to the bankers for theirfinancial support and trust reposed in the Company. The Board further wish to acknowledgethe commitment and contribution made by the employees at all levels during current toughtimes. Your Board conveys its gratitude to the shareholders for their continued patronageand co-operation.

ANNEXURES FORMING PART OF BOARD?S REPORT

The annexures referred to in this report and other information whichare required to be disclosed are annexed herewith and form part of this Report ofDirectors

Annexure Particulars
I Management Discussion & Analysis Report
II Energy conservation and Technology
absorption
III Remuneration Policy
IV Secretarial Audit Report
V Corporate Governance Report
For and on behalf of the Board
Place : Chennai Sasikala Raghupathy
Date : May 27 2022 Chairperson

.