1. COMPANY OVERVIEW
BGR Energy Systems Limited (''the company'') is a public limited company
incorporated under the provisions of the Companies Act, 1956. Its
equity shares are listed on Bombay Stock Exchange (''BSE'') and National
Stock Exchange (''NSE'').The company is a manufacturer of capital
equipments for Power Plants, Petrochemical Industries, Refineries,
Process Industries and undertakes turnkey Balance of Plant (''BOP'') and
Erection Procurement and Construction (''EPC'') contracts for Power
plants. The company has been achieving its objectives through its five
business units: Power projects, Electrical projects, Oil and Gas
equipment, Environmental engineering and Air Fin Coolers.
2. Terms/rights attached to equity shares
The company has one class of shares referred to as equity shares having
a par value of Rs 10. Each holder of equity shares is entitled to one
vote per share.
The company operates gratuity plan wherein every employee is entitled
to the benefit equivalent to fifteen days salary last drawn for each
completed year of service. The same is payable on termination of
service or retirement whichever is earlier. The benefit vests after
five years of continuous service.
Stock option granted to the employees under the stock option scheme
established are evaluated as per the accounting treatment prescribed by
the SEBI (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999. The company follows the intrinsic value
method of accounting for the options and accordingly, the excess of
value of the stock options as determined by an independent valuer on
the date of grant over the exercise price of the options, if any, is
recognized as deferred employee compensation cost and is charged to the
statement of profit and loss.
Employee Stock Option Scheme - 2007
Pursuant to the decision of the shareholders, at their meeting held on
July 11, 2007, the company has established an ''Employee Stock Option
Plan 2007'' (''ESOS 2007'' or ''the Scheme'') to be administered by the
Compensation Committee of the Board of Directors. ESOS 2007 provides
for grant of options amounting to not more than 1.5% of the issued and
paid up equity capital of the company outstanding at any point of time
to officers, directors and key employees to purchase equity shares of
face value of Rs.10 each, with such option conferring a right upon the
employee to apply for one equity shares of the company, in accordance
with the terms and conditions of such issue. The exercise price of the
option is Rs.408
3. LEASES Operating lease
The company has taken various residential / commercial premises and
land under cancellable and non-cancellable operating leases. These
lease agreements are normally renewed on expiry.
4. PARTICULARS OF RELATED PARTIES List of related parties
a. Subsidiary companies
i. Progen Systems and Technologies Limited
ii. BGR Boilers Private Limited
iii. BGR Turbines Company Private Limited
iv. Sravanaa Properties Limited
b. Associate company - Nil
c. Other companies (enterprises where significant influence exists and
enterprises where key management personnel have significant influence)
i. GEA Cooling Tower Technologies (India) Private Limited
ii. GEA BGR Energy System India Limited
iii. Mega Funds India Limited
iv. Sasikala Estate Private Limited
v. Schmitz India Private Limited
vi. Cuddalore Powergen Corporation Limited
vii. ANI Constructions Private Limited
viii. Nannilam Property Private Limited
ix. BGR Odisha Powergen Limited
d. Joint venture
Mecon - GEA Energy System (India) Limited (JV)
e. Key Management Personnel
i. Mr.A.Swaminathan Joint Managing Director and CEO
ii. Mr. VR. Mahadevan Joint Managing Director
iii. Ms. Swarnamugi Karthik Director - Corporate Strategy
f. Relatives of Key Management Personnel
i. Mrs. Sasikala Raghupathy (Mother of Ms.Swarnamugi Karthik)
ii. Ms. Priyadarshini Raghupathy (Sister of Ms.Swarnamugi Karthik)
iii. Ms. Vaani Raghupathy (Sister of Ms.Swarnamugi Karthik)
iv. Mr. Arjun Govind Raghupathy (Brother of Ms.Swarnamugi Karthik)
Party-wise disclosure of related party transactions:
5. Sales represent, GEA Cooling Tower Technologies (India) Private
Limited Rs. 3315 lakhs ( Rs. 2736 lakhs).
6. Purchases represent, Progen Systems and Technologies Limited Rs. 955
lakhs (Rs. 260 lakhs), GEA Cooling Tower Technologies (India) Private
limited Rs. 3655 lakhs (Rs.2452 lakhs), GEA BGR Energy System India
Limited Rs. 142 lakhs (Rs. 41 lakhs), BGR Boilers Private Limited Rs.
80354 lakhs (Rs 17707 lakhs), BGR Turbines Company Private Limited Rs.
47430 lakhs (Rs. 492 lakhs), Schmitz India Private Limited Rs.61 lakhs
7. Sale of Investments represent, BGR Investment Holdings Company
Limited Rs. Nil (Rs. 34 Lakhs), BGR Power Limited Rs. Nil (Rs. 10
8. Remuneration to key management personnel represents, Mr.
B.G.Raghupathy Rs. Nil (Rs. 44 lakhs), Mr. VR. Mahadevan Rs. 129 lakhs
(Rs.147 lakhs), Mr. A. Swaminathan Rs. 181 lakhs (Rs. 206 lakhs), Mr. K
Chandrashekhar Rs.24 lakhs (Rs. 97 lakhs), Ms. Swarnamugi Karthik Rs. 88
lakhs (Rs. 88 lakhs).
9. Remuneration to relatives of key management personnel represent,
Ms.Priyadarshini Raghupathy Rs. 28 lakhs (Rs. 32 lakhs), Ms. Vaani
Raghupathy Rs. 6 lakhs (Rs.8 lakhs), Mr. Arjun Govind Raghupathy Rs. 5
lakhs (Rs.4 lakhs).
10. Rent paid represents, GEA BGR Energy System India Limited. Rs. 0.30
lakhs (Rs. 0.28 lakhs), Sasikala Estate Private Limited Rs. 83 lakhs
(Rs. 89 lakhs), ANI Construction Private Limited Rs. 9 lakhs (Rs. 9
lakhs). Mrs. Sasikala Raghupathy Rs. 44 lakhs (Rs. 42 lakhs), Sravanaa
Properties Limited Rs. 18 lakhs (Rs. 18 lakhs).
11. Sale of fixed assets represent, Progen System and Technologies Ltd
Rs. 0.12 lakhs (Rs. Nil), GEA BGR Energy System India Ltd Rs. 4 lakhs
12. Others represent, royalty to Mr. B.G. Raghupathy Rs. Nil (Rs. 8
lakhs), Mrs. Sasikala Raghupathy Rs. 25 lakhs (Rs. 17 lakhs).
13. Advances given represent, Progen Systems and Technologies Limited
Rs. 1043 lakhs (Rs. 931 lakhs), BGR Boilers Private Limited Rs. Nil
(Rs. 38192 lakhs), BGR Turbines Company Private Limited Rs. Nil (Rs.
241 lakhs), GEA BGR Energy Systems India Limited Rs. 304 lakhs (Rs. 60
lakhs), GEA Cooling Tower Technologies (India) Private Limited Rs. 1247
lakhs (Rs. 474 lakhs).
14. Gurantees given represent, Progen Systems and Technologies Limited
Rs. 20 lakhs (Rs. 51 lakhs), GEA Cooling Tower Technologies (India)
Private limited Rs. 661 lakhs (Rs. 661 lakhs).
15. Balances outstanding (Net) represent, Progen Systems and
Technologies Limited Rs. 1623 lakhs (Rs.1277 lakhs), BGR Boilers
Private Limited Rs. 7580 lakhs (cr.bal) (Rs.22898 lakhs), BGR Turbines
Company Private Limited Rs. 16378 lakhs (cr.bal) (Rs. 12348 lakhs), GEA
Cooling Tower Technologies (India)Private Limited Rs. 595 lakhs
(cr.bal) (Rs.74 lakhs), GEA BGR Energy System India Limited Rs. 240
lakhs (Rs.66 lakhs) , Cuddalore Powergen Corporation Limited Rs. 671
lakhs (Rs.671 lakhs), Nannilam Property Private Limited Rs. 508 lakhs
(Rs.508 lakhs), Mega Funds India Limited Rs. 39 lakhs (Rs. 39 lakhs),
Schmitz India Private Limited Rs. Nil (Rs. 60 lakhs), B.G.Raghupathy
Rs. Nil (Rs. 8 lakhs (cr. bal)), Sravanaa Properties Limited Rs. 6
lakhs (Rs. 6 lakhs), Sasikala Estate Private Limited Rs. 7 lakhs
(cr.bal) (Rs. 7 lakhs (cr.bal)), ANI Constructions Private Limited
Rs.0.77 lakhs (cr.bal) (Rs.Nil)Mrs. Sasikala Raghupathy Rs. 36
lakhs(cr. bal)(Rs. 39 lakhs(cr. bal)).
16. CONTINGENT LIABILITIES, GUARANTEES, CAPITAL COMMITMENTS AND OTHER
Rs. in Lakhs
As at As at
Particulars March 31,2015 March 31,2014
A Contingent liabilities
Claims against the company not
acknowledged as debt
a) On account of sales tax * 29154 4222
b) On account of income-tax 10848 10848
c) On account of service tax ** 25 25
d) On account of provident fund 521 -
e) On account of contractual
obligations 2350 2350
f) On account of royalty 4547 4547
Guarantees and counter guarantees given 681 712
on behalf of subsidiary and
C Capital commitments
Estimated amount of contracts remaining 471 817
to be executed on capital
account (net of
D Other commitments
Commitments to fund subsidiaries 5923 5681
* Sales tax includes an amount of Rs. 23740 lakhs (Rs. Nil) (excluding
interest and penalty) which has been contested by the VAT authorities
before the Rajasthan Tax Board.
** Service tax represents a sum of Rs. 25 lakhs (Rs. 25 lakhs)
(excluding interest and penalty) which has been contested by the
service tax authorities before the Customs Excise and Service Tax
16. IMPAIRMENT OF ASSETS
a. Cash generating units :
There is no impairment loss in cash generating units and hence no
provision was made in the financial statements.
b. Other assets :
The company has made a provision of Rs. Nil (Rs. 32 lakhs) in the books
of accounts towards impairment of other fixed assets based on the
17. In respect to construction contracts, cost of material includes
value added tax, central sales tax, works contract tax and service tax.
18. Interest income from fixed deposits have been netted off with
interest expense on working capital facilities..
19. As required under Section 135 of Companies Act 2013, the company
is required to spend Rs.510 lakhs towards Corporate Social
Responsibility (CSR) activities. The company is in the process of
identifying programmes\projects, in accordance with the policy. Hence
no expense has been either incurred or provided in the books during the
20. During the current financial year, notice under section 153A of
the Income-tax Act 1961 was received and accordingly the company has
since filed tax returns. Due to the revision, Rs.988 lakhs income tax
has been provided during the year and adjusted against MAT credit
available and disclosed under tax relating to earlier years.
a) The company has made a provision / transfer of Rs. 2336 Lakhs
(reversal) (Rs.477 Lakhs) towards warranty and contractual obligations
on the products supplied / contracts executed by the company during the
year. The expenses on account of provision for warranty is grouped
under other administrative expenses.
22. PREVIOUS YEAR FIGURES
Figures of previous year have been regrouped / rearranged, wherever
required to conform to the current year presentation.