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BF Utilities Ltd.

BSE: 532430 Sector: Infrastructure
NSE: BFUTILITIE ISIN Code: INE243D01012
BSE LIVE 15:52 | 09 Dec 407.35 -1.05
(-0.26%)
OPEN

412.00

HIGH

414.10

LOW

405.00

NSE LIVE 15:59 | 09 Dec 406.65 -3.05
(-0.74%)
OPEN

411.95

HIGH

413.60

LOW

405.55

OPEN 412.00
PREVIOUS CLOSE 408.40
VOLUME 60900
52-Week high 724.10
52-Week low 389.85
P/E 221.39
Mkt Cap.(Rs cr) 1534.08
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 412.00
CLOSE 408.40
VOLUME 60900
52-Week high 724.10
52-Week low 389.85
P/E 221.39
Mkt Cap.(Rs cr) 1534.08
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

BF Utilities Ltd. (BFUTILITIE) - Auditors Report

Company auditors report

To

The Members BF Utilities Limited

Pune.

Report on the Standalone Financial Statements

We Joshi Apte & Co. Chartered Accountants have audited the accompanying standalonefinancial statements of BF UTILITIES LIMITED ("the Company") which comprise theBalance Sheet as at 31st March 2016 the Statement of Profit and Loss and theCash Flow statement for the period then ended and a summary of significant accountingpolicies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act as applicable. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder and the Order under section 143 (11)of the Act.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company preparation of the financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made by theCompany's Directors as well as evaluating the overall presentation of the financialstatements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2016 and its loss and its cash flows for the period then ended on thatdate.

Emphasis of Matters

Without qualifying our Audit Report we draw attention to the following matters in theNotes to the financial statements:

(a) We draw attention to Note No.35 to the accompanying financial statements. Asmentioned therein there are certain litigations by and against the Company and thesubsidiaries of the Company that are yet to be decided by various courts and the matter issubjudice. No cognizance thereof is taken in the preparation of the financial statementspending the final outcome of these cases.

Note 35-

Certain litigations by and against the Company and the subsidiaries of the Company arepending in various courts and the matter is subjudice. No cognizance thereof is taken inthe preparation of the financial statements pending final outcome of the cases.

(b) As stated in note no. 37 in the financial statements in an event of non-receipt ofOpen Access Permission from Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL)and consequent sale of power from April 2014 to March 2015 to MSEDCL the profits of theCompany for the accounting period ended on 31 March 2016 would be lower by Rs. 40.54Million (net of tax).

Note 37-

The Company is required to apply for Open Access Permission to Maharashtra StateElectricity Distribution Co. Ltd. (MSEDCL) every financial year. Upon receipt of the OpenAccess Permission the credit notes are issued by MSEDCL for power generated at theCompany's wind farm at Satara which are subsequently adjusted in the power bill of thecustomer in Pune.

The Company has applied for Open Access Permission to MSEDCL for the financial year 1April 2014 to 31 March 2015 well in time. However due to certain policy issues atMSEDCL it has still not granted Open Access Permission to the Company for the said yearand consequently credit notes for this period are awaited from MSEDCL. The Company hadpreferred an appeal with MERC against this decision of MSEDCL.

Pending issuance of these credit notes and based on earlier years' experience theCompany has recognized revenue from power generation during 1 April 2014 to 31 March2015 at the average power tariff rate of the previous year. In an unlikely event of theissue finally being decided against the Company the profit of the Company for therelevant year would be lower by about Rs. 405.40 lacs net of income tax.

However on 8 February 2016 MERC has passed an order on this matter which primafacie appears to be favourable. The Company is awaiting further actions from MSEDCL onthis matter.

Further with effect from 1st April 2015 the Company is receiving Open AccessPermissions.

(c) As stated in Note No.38 to the accompanying financial statements ConsolidatedFinancial Statements have not been prepared.

Note 38-

Nandi Highway Developers Ltd. (NHDL) Nandi Infrastructure Corridor Enterprises Ltd.(NICE) and Nandi Economic Corridor Enterprises Ltd. (NECE) which are the subsidiaries ofthe Company are in the process of finalising theii accounts for the financial year ended31st March 2016 and hence they have not yet submitted the said auditea financials to theCompany.

The Company will prepare consolidated financials once the audited accounts of all theabove mentioned subsidiaries are made available to the Company.

(d) As stated in Note No.39 to the accompanying financial statements diminution otherthan temporaryif any in the value of investment in the subsidiaries viz. NandiInfrastructure Corridor Enterprise Ltd (NICE) Nandi Economic Corridor Enterprise Ltd(NECE)and National Highway Developers Ltd (NHDL) could not be tested due tonon-availability of accounts of NICE NECE and NHDL.

Note 39-

Diminution other than temporary if any in the value of investment in Nandi HighwayDevelopers Ltd. (NHDL) Nandi Infrastructure Corridor Enterprise Ltd (NICE) and NandiEconomic Corridor Enterprise Ltd (NECE) could not be tested for impairment due tonon-availability of accounts of NHDL NICE and NECE for the financial year ended 31stMarch 2016 as explained in Note no. 38. The Company has recorded these investments atcost as on the date of Balance Sheet.

Report on Other Legal and Regulatory Requirements

1. As required by section 143(3) of the Companies Act 2013 we report that:

(i) We have sought and obtained all the information and explanation which to the bestof our knowledge and belief were necessary for the purpose of our audit;

(ii) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books.

(iii) The Balance Sheet the statement of Profit and Loss and the Cash Flow Statementdealt with by us in the Report are in agreement with the books of account.

(iv) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act as applicable.

(v) On the basis of the written representations received from the directors as on 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164 (2) of the Act.

(vi) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

(vii) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

a) The Company has in accordance with generally accepted accounting practicedisclosed the impact of pending litigations on its financial position in its financialstatements Refer Note 26 & 27 to the financial statement;

b) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

c) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016 (the "Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure B" a statement on the matters specified inparagraph 3 and 4 of the Order .

For Joshi Apte & Co.
Chartered Accountants
ICAI Firm Registration Number: 104370W
per Varad Waman Joshi
Pune Partner
16 May 2016 Membership Number: 137763

ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT

(Refer to in paragraph 1 to 'Report on Other Legal and Regulatory Requirements' of ourreport of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of BFUtilities Limited ("the Company") as of March 31 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the six months periodended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") issued by Institute of Chartered Accountants of India andthe Standards on Auditing prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements. InherentLimitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2016 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Joshi Apte & Co.
Chartered Accountants
ICAI Firm Registration Number: 104370W
per Varad Waman Joshi
Pune Partner
16 May 2016 Membership Number: 137763

(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

Re: BF Utilities Limited ("the Company")

i. In respect of the Company's fixed assets:

(a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) There is a regular programme of verification which in our opinion is reasonablehaving regards to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of registered documents provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date.

ii. As explained to us inventories of Certified Emission Reduction (CER) and RenewableEnergy Certificate (REC) were verified electronically during the six months period by themanagement at reasonable intervals since the same is not physically verifiable and nomaterial discrepancies were noticed.

iii. During the six months period the Company has not granted any loans secured orunsecured to companies firms or other parties covered in the Register maintained underSection 189 of the Act.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Companies Act 2013in respect of grant of loans making investments and providing guarantees and securitiesas applicable.

v. According to the information and explanations given to us the Company has notaccepted any deposits from the public.

vi. The provisions of clause (3) (vi) of the Order are not applicable to the Company asthe Company is not covered by the Companies (Cost Records and Audit) Rules 2014.

vii. According to the information and explanations given to us in respect of statutorydues:

(a) The Company is generally regular in depositing undisputed statutory dues includingprovident fund income tax sales tax wealth tax service tax value added tax cess andany other statutory dues to the appropriate authorities and there are no arrears ofoutstanding statutory dues as at the last day of the Balance Sheet concerned for a periodof more than six months from the date they became payable except in case of electricityduty payable for the period April 1 2015 to September 30 2015 total amounting Rs.5499906.

(b) According to the information and explanations given to us there are no dues ofincome tax sales tax service tax duty of customs duty of excise value added tax whichhave not been deposited as at 31 March 2016 on account of disputes.

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of loans from the government. The Company has nottaken any loans or borrowings from financial institution and bank and has not issueddebentures during the six months period.

ix. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause 3 (ix)of the Order is not applicable to the Company.

x. To the best of our knowledge and belief and according to the information andexplanations given to us no fraud by the Company and no fraud on the Company by itsofficers or employees has been noticed or reported during the six months period.

xi. Based on our audit procedures and as per the information and explanations given bythe management we are of the opinion that managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Companies Act.

xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of theOrder is not applicable.

xiii. In our opinion and according to the information and explanations given to us theCompany is in compliance with section 177 and 188 of Companies Act 2013 whereapplicable for all the transactions with the related parties and the details of relatedparty transactions have been disclosed in the Financial Statements etc. as required bythe applicable accounting standards.

xiv. During the six months period the Company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures and hencereporting under clause 3 (xiv) of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to usduring the six months period the Company has not entered into non-cash transactions withany directors or persons connected with him and hence provisions of section 192 of theCompanies Act 2013 are not applicable.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Joshi Apte & Co.
Chartered Accountants
ICAI Firm Registration Number: 104370W
per Varad Waman Joshi
Pune Partner
16 May 2016 Membership Number: 137763

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