bgr energy systems ltd share price Management discussions

During the year 2022-23 the companys activities have slowly picked up. The progress was hampered due to unprecedented increase in the price of raw materials worldwide. The banking sectors reluctance in funding infrastructure projects, particularly the thermal power sector is a dampener in the Companys progress. Also the reluctance of many end users to accommodate the increased commodity prices have not helped either.

Project progress of Engineering and Construction Business

Power Projects Division (PPD) - During the year 2022-23 the company in North Chennai Thermal power project had achieved significant progress. Demineralized water was produced using 45000 TDS sea water through Ultra filtration skid, Seawater Reverse Osmosis System (SWRO), Brackish Water Reverse Osmosis System (BWRO) and Mineral Balance (MB) and continuously being supplied for main plant commissioning activities. High Speed Diesel unloading and transferring was commissioned with PLC. Firewater system for Boiler was made ready this year. In OPGCL project, performance guarantee test for IDCT Unit 4 and Auxiliary Power consumption were carried out successfully during the year. The 1 x 800 MW thermal power project at Vijayawada is moving towards the next step of coal firing and power generation.

Civil Projects Division (CPD) - General civil works project of Tata Steel Limited in Kalinganagar, Odisha was completed during last year. Tata Steel has acknowledged our performance by honoring us with "Best Innovation Business Partner" award in their Vendors conclave. New orders worth Rs. 765 Crores has been awarded to CPD in year 2022-23 which includes orders from prestigious customers like Tata Steel Limited, Indian Oil Corporation Limited (IOCL), Industrial Energy Limited (IEL), MSPL Limited, etc.

Environmental Engineering Division (EED) - 10 MLD (Million Litres per Day) Tertiary treatment ultra filtration (TTUF) plant in Nesapakkam was commissioned and inaugurated by the Honourable Chief Minister of Tamil Nadu during the year. 6 MLD Water treatment plant (WTP) in Porur was also commissioned and inaugurated by the

ANNEXURE- I

Honourable Chief Minister of Tamil Nadu. 10 MLD Water treatment plant (WTP) in Kolathur has been made ready. 33 MLD (Phase 1) & 21.5 MLD (Phase 2) Seawater Desalination plants are in operation and handed over to APGENCO, Krishnapattanam.

Electrical Project Division (EPD) - For NPCIL RAPP project, Integrated Leak Rate Test for Reactor Building #7 was completed. For JUSNL Project, 132kV GIS along with GIBD was supplied for Sarath Site. Other Supplies like 132kV LA, 132kV CVT, LT Transformers, Battery charger, LT Switchgear and Earthing materials were completed for Sarath & Chhattarpur sites of the JUSNL Project. Sundernagar site was handed over by JUSNL to BGRESL during year 2022-23 and supply of 132kV CVT & LT Transformers has been completed. For UPPTCL Project, all structural works were completed in 400kV, 220kV and 132kV GIS, CRB & FFPH buildings and all outdoor equipment installation except Transformers & Reactor were completed.

Manufacturing Business (Product Business Division)

The capital goods segment, which manufacturers equipment for power, oil, gas and infrastructure industries the Company secured orders of Rs. 274 Cr. with record highest opening order book in its history of Rs. 425 Cr. Despite market challenges, Product Business Division achieved turnover of Rs. 193 Crore in year 2022-23, which is the highest turnover achieved by the division in its history. Fully assembled ache equipment was supplied to M/s. Schlumberger, UK for RIL Off-Shore in the year 2022-23.

INDUSTRY ANALYSIS & PROSPECTS IN DOMESTIC AND INTERNATIONAL MARKETS

With the waning Covid-19, the year 2022-23 witnessed gradual pick up in the industrial activities. The demand for power has also increased substantially. Despite the increase in renewable energy capacities, and despite the Renewable Purchase Obligation (RPO) set at 21%, thermal power has contributed 84% of the overall power consumption. The unprecedented power demand and the relative low contribution of renewable and nuclear power generation have brought to fore the urgent need to add significant capacity by way of new super critical & ultra super critical thermal power projects with much lower heat rates. As per CEA, the annual Electrical Energy requirement will be 3,175,400 MU by FY 2037 as against the generation of 1,320,947 MU in FY 22. This demand cannot be met alone with renewable sector. With state- run genco NTPC announcing addition of 4.8 Gigawatts power projects in next three years, there is huge growth forecasted in thermal power sector which augurs well for the companys growth.

There is also huge scope in renovation & modernization of existing power plants, including replacement of old units with new power plants. In order to comply with the new emission standards, installation of Flue Gas Desulfurization units in existing power plants presents a new market segment to capitalize for the company.

The global energy crisis arising due to Russias invasion of Ukraine, has also forced countries worldwide to relook at coal based power plants. Denmark asked its biggest energy firm Orsted to restart operations at three fossil fuel facilities to ensure energy security. Similarly, UK government also temporarily relaxed conditions for the running of coal-fired plants in winter and some of the coal-based plants that were to shut in year 2022-23, continued to operate.

The Pradhan Mantri Gatishakti Bharat Master Plan for integrated infrastructure growth will offer robust growth potential in various sectors in the years to come. The National Infrastructure Pipeline, aimed at easier interconnectivity between road, rail, air and waterways to reduce travel time and improve industrial productivity, announced previously and re-emphasized again are envisaged to create multiplier effects on the economy. The flagship Jal Jeevan mission of Gol will see huge development under the rural and urban water supply infrastructure development in next couple of years. With our Civil Projects Division and Environmental

Engineering Division, the company is in prime position to tap into this huge market.

The company is also exploring various business opportunities in Extra High Voltage (EHV) underground cabling projects, Traction Substation projects from Railways, Electrification packages for upcoming private projects, etc.

LOOKING INTO FUTURE AND STRATEGIC BUSINESS SHIFT

In the backdrop of challenges in thermal power sector in India and global markets as well, your Company initiated number of strategic initiatives. The Company identified critical need for shift from current business segments and identified some sectors as key drivers for growth in the medium term and diversify into adjacent business sectors to in which public and private investments. The companys proven and successful track record and competencies could be leveraged for growth in these emerging industrial, core and infrastructure sectors. These segments include: (i) Water and water treatment solutions (ii) Electricity Transmission & Distribution (iii) Transport infrastructure viz., Metro, Railways and Highways (iv) Civil construction; (v) Project exports and (vi) Oil & Gas and manufacture of equipment and systems for Indian industry and international markets. The Company would continues a significant market player in thermal generation sector, being selective in order booking and would leverage its competencies in focusing and seeking orders from Nuclear power projects and power transmission activities. In capital goods / manufacturing businesses, the Company has taken measures to expand the geographical market reach in international markets by identifying key opportunities for expanding the product portfolio.

Financial Performance (Standalone)

DESCRIPTION	Unit	FY 21-22	FY 22-23	% Change
Income from Operations	Rs. Crores	1221	806	-34%
EBIDTA	Rs. Crores	137	(270)	-297%
EBIDTA	%	11.23%	-33.53%	-399%
PBT	Rs. Crores	(236)	(635)	169%
PAT	Rs. Crores	(178)	(479)	169%
Net worth	Rs. Crores	882	403	-54%
PBT Ratio	%	-19.37%	-78.78%	307%

Financial Performance (Standalone)

DESCRIPTION	Unit	FY 21-22	FY 22-23	% Change
PAT Ratio	%	-14.59%	-59.35%	307%
Return on Net worth	%	-20.19%	-118.68%	488%
Employee Cost to Turnover	%	10.76%	15.57%	45%
Overheads Cost to Turnover	%	3.88%	31.34%	707%
Interest Cost to Turnover	%	29.38%	49.54%	69%
Debtors Turnover	Days	734	898	22%
Debtors Turnover (Excluding Retention)	Days	375	387	3%
Inventory Turnover	Days	15	22	47%
Interest Coverage Ratio	Times	0.34	(0.59)	-273%
Current Ratio	Times	1.00	1.00	0%
Debt Equity Ratio	Times	2.13	4.57	1179%

SIGNIFICANT CHANGES IN FINANCIAL PERFORMANCE METRICS

The Operating margin for the year 2022-23 was negative due to lower turnover.

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE PREVIOUS FINANCIAL YEAR

During the year Return on Net worth increased from negative -20 % in the previous year 2021-22 to Negative 118% in the year 2022-23. The reduction in return on net worth is due to loss of 635 crores. The major reason for the loss is lower turnover. The contributions generated from lower turnover was not sufficient to meet the fixed cost incurred by the company.

STRENGTH AND OPPORTUNITIES

The company has after review of the current macro level developments and competition landscape planned foray into the Infrastructure, Highways Construction, Transmission. The experienced and competent manpower, proven project delivery of the Company is a rare strength. These rich credentials will enable qualification and successful breakthrough in all business segments. The strategic teams of experienced personnel formed recently are working on bids for these strategic segments.

INTERNAL CONTROL SYSTEMS AND AUDIT

As part of the audit system, the company has an in-house system with a works auditor. Experienced external firm of auditors carries out internal audit. The detailed audit plan is well documented and audit scope is reviewed every year to include key processes that need improvements and address new compliance requirements. The detailed audit plan approved by the Audit Committee is rolled out at the beginning of each year. In addition, all payments to vendors are subjected to pre-audit by an external audit team. The statutory auditors carry out the required audit and compliance checks and review the control systems. The Chairman of Audit committee, key project personnel and the finance team review the audit reports of the internal auditors, pre auditors and in-house auditors n detail every quarter and a time bound action plan is initiated to address the key audit issues that need improvement and resolution. A summary of key audit observations, action taken to fix the gaps and the status is reviewed by the Audit Committee members in the quarterly audit committee meeting. The present internal control and audit systems are adequate.

RISK MANAGEMENT

The business of the Company encompasses design at office, manufacturing at factories and project sites, civil and mechanical construction, erection, and commissioning of equipments / packages. The company has a well- documented Standard Operating Systems and Procedures (SOSP). The SOSP mandates concerned officers of the company to review, identify and take timely steps to manage these risks on an ongoing basis. Delegation of Authority is reviewed each year to ensure that adequate controls are in place and required flexibility is available for effective operations at work site and that the commitments made to customers and vendors are met on time. Periodic review of procedural checks and balances are undertaken with a view to improve operational controls and productivity matrix. An experienced team of contract specialists in the Company review all contractual documents with the customers and the vendors in detail to ensure that all risks associated with the terms of contract are fully understood, documented, and reviewed for ensuring effective implementation of the contracts.

HUMAN RESOURCE DEVELOPMENT

With the Pandemic threat fading away during the year 2022 - 23, there was a strong need to retain the critical manpower resources in the Company and rewarding them suitably. Accordingly, the Company carried out an exercise to identify the critical manpower across the Company and such critical employees were rewarded with better responsibility and salary increase. This helped the company to retain the critical manpower.

Our new business vertical Civil Projects Division could book 4 new orders during the year 2022 - 23 and we could ramp up the manpower in a very short span so that we were able to carry out the work as per the schedule.

As part of recognizing and motivating the exemplary work done by our employees, we had introduced a scheme to identify "Employee of the Month". This was extended to project sites and other business divisions during the year 2022 - 23 and this yielded very good results. It has motivated many of the employees to carry out their work in a better way.

During the year 2022 - 23 there were 18 employees who had completed more than 20 years service in our Organization. These employees were honoured with long service awards during the Founders Day celebrations.

ENVIRONMENT, HEALTH AND SAFETY (EHS)

The Company treats EHS as its core need to carry on and grow the business on a sustained basis. The Company has adopted a structured approach towards implementation of EHS policy and plans to integrate EHS with critical operating processes to continually improve the environment in which the Company operates as well as the safety and health of all employees, workmen, general public and the society. The Company established EHS structure for developing, implementing, and improving EHS Management Systems. These systems are designed to imbibe and enhance safety culture and to mitigate high potential risks among the employees and contractors through appropriate intervention and guidance.

The Company took up many EHS initiatives viz., monitoring and control of air, noise and water pollution, fitness of all employees premedical screening, regular health awareness camps, blood donation, safety orientation to all new employees and contractors men before engaging at work, hazard identification and risk assessment for all critical activities, safety evaluation of contractors and adoption of EHS code of Practices by contractor, enhancement of behavior based safety programs, on spot motivation to safety conscious workers and recognition of creditable EHS performance. The EHS team strived to keep up good health of employees at offices, works and sites by strictly following the Standard Operating Procedures and guidelines issued by various Government and health authorities.

ENERGY CONSERVATION AND TECHNOLOGY ABSORPTION

Manufacturing units of the Company have continued with the energy conservation measures during the financial year 2022-23 as given below:

A) ENERGY CONSERVATION

i. The steps taken or impact on conservation of energy

1. Advanced Finning Machine - G type is continued which can deliver the productivity with 20% lesser electrical power consumption.

2. Actions initiated to power off of all machines especially welding machines during break times to avoid transformer losses.

3. Initiated actions to ensure no leakage of compressed air and water.

4. Air Conditioner temperature maintained at 26 degree centigrade for power saving.

5. Proposed to introduce LED lights at the time of replacement of exiting lights.

6. Planned to introduce solar power generation system.

ii. The steps taken by the Company for using alternate source of energy

Buildings have glass windows all around and use the ambient light for lighting purposes as much as possible. This reduces the electricity consumption due to lesser need of lighting during the day.

iii. The capital investment on energy conversation equipments: Nil.

B) TECHNOLOGY ABSORPTION:

The details under Rule 8(3)(B) of the Companies (Accounts) Rules, 2014 is not applicable to the Company.

C) FOREIGN EXCHANGE EARNINGS AND OUTGO:

The details of foreign exchange earnings and outgo are provided in the Directors Report.

REMUNERATION POLICY

1. APPLICABILITY

This remuneration policy applies to all Directors, Key Managerial Personnel and designated employees of the Company.

2. OBJECTS

This policy seeks to achieve the following objectives viz.,

a. The Directors Key Managerial Personnel and designated employees of the Company are governed by a compensation criteria that fosters meritocracy and industry standards.

b. Attract and retain high calibre professionals/personnel required to manage the business, operations and strategic growth of Company successfully.

c. The remuneration shall be competitive and based on the individual responsibilities, contribution and performance.

d. To attract, retain and motivate talents and a balance of fixed and variable components so as to incentives high level of performance.

The Remuneration Policy is guided by a common reward framework and set of principles and objectives as more fully and particularly envisaged under Section 178 of the Companies Act, 2013 and principles pertaining to determining qualifications, positive attributes, integrity and independence.

3. REMUNERATION TO DIRECTORS

a. Fee to Non-executive Directors

A Non-executive Director may receive remuneration by way of sitting fee for attending meetings of the Board or Committee thereof. The amount of fees shall not exceed the amount as may be prescribed under the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and any amendment thereto.

b. The amount of fee to Independent Directors and Women 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 or Committee meetings.

d. The Board may review the fee at reasonable length of time and in doing so consider industry trends, practices, Companys performance, shareholders interest and regulatory provisions and environment.

e. No Director, other than Chairman of the Board, shall be entitled to commission on profits of the Company and such commission shall be determined by the Board for each financial year and such payment shall be subject to the provisions of the Companies Act, 2013.

f. Directors shall be entitled to reimbursement of expenses on travelling, lodging, boarding and other out-of-pocket expenses incurred for participation in the Board and Committee meetings and other work related to the Companys business.

4. REMUNERATION TO KEY MANAGERIAL

PERSONNEL

a. The remuneration to Key Managerial Personnel (Managing Director, Deputy Managing director, Whole-time Director, Company Secretary, and Chief Financial Officer) shall be determined with due regard to the individuals educational and professional qualifications, age, experience, expertise, knowledge and contribution and competition for such talents in the industry/corporate sector.

b. The remuneration payable to Key Managerial Personnel may comprise of ;

a. Fixed salary, variable salary, bonus/ex-gratia, perquisites and allowances, performance-linked incentive and other compensation as the Board may determine.

b. Remuneration to any one Executive Director shall not exceed five per cent of the net profits of the Company and the total remuneration payable to all Executive Directors together shall not exceed ten per cent of the net profits of the Company.

c. In case of inadequacy of profits, the remuneration to Executive Director shall be in accordance with Schedule V of Companies Act, 2013.

5. REMUNERATION TO DESIGNATED EMPLOYEES

a. For the purpose of this Policy, an employee, who is employed by the Company and designated as a member of core management team, but not a Director, and all Heads of functional responsibility or management and holding office one level below Executive Director are Designated Employees.

b. The remuneration shall be determined in an equitable manner having regard to qualifications, age, experience, and contribution to the Company, need to retain talent and industry/ market trends.

c. Remuneration to Designated Employees shall include fixed salary, variable salary, bonus/ex- gratia, perquisites and allowances, performance- linked incentive and other 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 pay determination for different levels of employees.

1. Wage and salary structure will be simple and easy to link performance and compensation.

2. Discretionary retention bonus may be given in deserving cases as may be decided by management.

3. Annual pay increases will be based on a combination of appraisal of competency and performance rating.

FORM NO. MR-3 SECRETARIAL AUDIT REPORT For the Financial Year 2022-23

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,

The Members,

M/s. BGR ENERGY SYSTEMS LIMITED

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s. BGR ENERGY SYSTEMS LIMITED (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing our opinion thereon.

Based on our verification of M/s. BGR ENERGY SYSTEMS LIMITED books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, the explanations and clarifications given to us and considering the relaxations granted by the Ministry of Corporate Affairs and Securities and Exchange Board of India, We hereby report that in our opinion, the Company has, during the audit period covering the financial year ended 31^st March 2023, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by M/s. BGR ENERGY SYSTEMS LIMITED ("the Company") for the financial year ended on 31^st March 2023 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made there under;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA) and the rules made there under;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; - Not Applicable

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act):-

(a) The Securities and Exchange Board of India

(Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and amendments from time to time;

(b) The Securities and Exchange Board of India

(Prohibition of Insider Trading) Regulations, 2015 and amendments from time to time;

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 and amendments from time to time; (Not applicable to the Company during the audit period)

(d) The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021; (Not applicable to the Company during the audit period)

(e) The Securities and Exchange Board of India

(Issue and Listing of Non-convertible Securities) Regulations, 2021; (Not applicable to the Company during the audit period)

(f) The Securities and Exchange Board of India

(Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; (Not Applicable)

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021; (Not applicable to the Company during the audit period)

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; (Not applicable to the Company during the audit period)

Other Laws specifically applicable to this Company - NIL

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) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

During the period under review the Company has complied

with the provisions of the Act, Rules, Regulations,

Guidelines, and Standards etc., mentioned above, except

the followings:

1. The Company has not uploaded the Audited Financials of its two Subsidiaries Companies viz. BGR Boilers Private Limited and BGR Turbines Private limited, in its website as required under Regulation 46 (2) (s) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

2. The Company has not obtained the prior approval for the material related party transaction under Regulation 23(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

3. As per the Financials as on 31.03.2022, M/s. Sravanaa Properties Ltd & M/s. BGR Turbines Pvt Ltd are Material subsidiary for the Company. But an Independent Director of the Company is yet to be appointed in their Board under Regulation 24(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

4. The Newspaper Advertisement for Annual General Meeting was given after expiry of 24 hours under Regulation 30(6) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

We further report that the Board of Directors of the

Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors, Independent Directors and Women Director. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent to at least seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Majority decision of the Board and its Committee meeting are carried through while the dissenting members views, if any are captured and recorded as part of the minutes.

We further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period the company has no major events/actions having a major bearing on the Companys affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards etc., have taken place.

For V Suresh Associates Practising Company Secretaries

Udaya Kumar K R

Partner FCS No. 11533 C.P.No. 21973 Peer Review Cert. No. :667/2020 UDIN: F011533E000733408

Place: Chennai Date : 30.05.2023

ANNEXURE TO SECRETARIAL AUDIT REPORT

To,

The Members

BGR ENERGY SYSTEMS LIMITED

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. Due to the inherent limitations of an audit including internal, financial and operating controls, there is an unavoidable risk that some Misstatements or material non-compliances may not be detected, even though the audit is properly planned and performed in accordance with the Standards.

7. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

For V Suresh Associates Practising Company Secretaries

Udaya Kumar K R

Partner

FCS No. 11533 C.P.No. 21973

Place: Chennai Date : 30.05.2023

Peer Review Cert. No. :667/2020 UDIN: F011533E000733408

FORM NO.MR - 3 SECRETARIAL AUDIT REPORT FOR THE FINANICIAL YEAR ENDED MARCH 31, 2023

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014]

To,

The Members

BGR Turbines Company Private Limited 443, Anna Salai, Teynampet,

Chennai - 600018

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by BGR TURBINES COMPANY PRIVATE LIMITED (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing my opinion thereon.

Based on my verification of the books, papers, minutes books, forms and returns filed and other records maintained by the Company and also the information provided by the Company and its officers and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on March 31, 2023 complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; and

(iii) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment and Overseas Direct Investment.

I have also examined compliance by the Company with the applicable clauses of Secretarial Standards issued by The Institute of Company Secretaries of India.

During the period under review, the Company has complied with the applicable provisions of the Act, Rules, Regulations, Guidelines, Standards, etc., mentioned above except sections 138, 149(4), 177, and 178 of the Act.

I further report that:

(a) The Board of Directors of the Company is duly constituted except the independent directors.

(a) Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

(b) Majority decision is carried through while the dissenting members views are captured and recorded as part of the minutes.

I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that during the audit period, the Company has no specific events / actions having a major bearing on the Companys affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc. referred to above.

Rajashri Sai Practicing company secretary Membership No.: ACS - 26760

Place : Chennai Certificate of Practice No: 10496

Date : 30/05/2023 UDIN: A026760E000945766

FORM NO.MR -3 SECRETARIAL AUDIT REPORT FOR THE FINANICIAL YEAR ENDED MARCH 31, 2023

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014]

To,

The Members

Sravanaa Properties Limited 443, Anna Salai, Teynampet,

Chennai - 600018

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by SRAVANAA PROPERTIES LIMITED (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing my opinion thereon.

Based on my verification of the books, papers, minutes books, forms and returns filed and other records maintained by the Company and also the information provided by the Company and its officers and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on March 31, 2023 complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

(iv) The Companies Act, 2013 (the Act) and the rules made thereunder;

(v) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; and

(vi) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment and Overseas Direct Investment.

I have also examined compliance by the Company with the applicable clauses of Secretarial Standards issued by The Institute of Company Secretaries of India.

During the period under review, the Company has complied with the applicable provisions of the Act, Rules, Regulations, Guidelines, Standards, etc., mentioned above.

I further report that:

(b) The Board of Directors of the Company is duly constituted.

(c) Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

(d) Majority decision is carried through while the dissenting members views are captured and recorded as part of the minutes.

I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that during the audit period, the Company has no specific events / actions having a major bearing on the Companys affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc. referred to above.

Rajashri Sai

Practicing company secretary Membership No.: ACS - 26760

Place : Chennai Date : 30/05/2023

Certificate of Practice No: 10496

UDIN: A026760E000949583