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BF Utilities Ltd.

BSE: 532430 Sector: Infrastructure
NSE: BFUTILITIE ISIN Code: INE243D01012
BSE 10:35 | 24 Apr 411.65 2.15
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NSE 10:29 | 24 Apr 411.35 2.05
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OPEN 410.40
PREVIOUS CLOSE 409.50
VOLUME 25085
52-Week high 599.00
52-Week low 313.20
P/E 109.48
Mkt Cap.(Rs cr) 1,550
Buy Price 411.10
Buy Qty 100.00
Sell Price 411.45
Sell Qty 55.00
OPEN 410.40
CLOSE 409.50
VOLUME 25085
52-Week high 599.00
52-Week low 313.20
P/E 109.48
Mkt Cap.(Rs cr) 1,550
Buy Price 411.10
Buy Qty 100.00
Sell Price 411.45
Sell Qty 55.00

BF Utilities Ltd. (BFUTILITIE) - Director Report

Company director report

FOR THE YEAR ENDED 31 March 2017 To The Members

Your Directors have pleasure in presenting their Seventeenth Annual Report on thebusiness and operations of the Company together with Audited Statement of Accounts for theyear ended 31st March 2017 (To fall in line with the provisions of the Companies Act2013 the Company had closed previous financial year for a period from 1st October 2015to 31st March 2016.)

1 . FINANCIAL PERFORMANCE

(Rs. in Million)
Particulars Year ended 31st March 2 0 1 7 Year ended 31st March 2016
Total Income 214.43 52.50
Total Expenditure 131.27 59.83
Profit before taxation 83.16 (7.33)
Provision for tax (including Deferred Tax) 9.41 2.77
Net Profit / (Loss) 73.75 (10.10)
Adjustments relating to earlier years : Excess provision for taxation and tax payments (0.26) -
Balance of Profit/(Loss) from previous year 585.70 595.80
Add Profit for the year 73.49 (10.10)
Balance available for appropriation 659.19 585.70
Appropriations : Nil Nil
Balance carried to 659.19 585.70
Balance Sheet

2 . SHARE CAPITAL

The paid-up Equity Share Capital as on 31st March 2017 stood at Rs.188.34 Million.During the year under review the Company has not issued shares with differential votingrights nor has granted any stock options or sweat equity. As on 31st March 2017 none ofthe Directors of the Company hold instruments convertible into equity shares of theCompany.

3 . DIVIDEND

Your Directors do not recommend any dividend on the equity shares for the year ended31st March 2017.

4 . MANAGEMENT DISCUSSION AND ANALYSIS

A separate chapter on Management Discussion and Analysis is attached hereto and formspart of this report

5 . COMPANY PERFORMANCE

During the Financial Year under review your

Company earned total income of Rs.21.44 Crores (previous years Rs.5.25 Crores). The netProfit / Loss after tax is Rs.7.34 Crores (previous year's Loss of Rs.1.01 Crores). Thesenumbers are not comparable since the previous financial year is for a period of sixmonths.

6 . OPERATIONS OF THE COMPANY

The operations at Wind Farm site were affected due to labour problems and some otherlocal issues. Despite such problems the Company was able to generate 24.47 Million (Net)Units of power.

7 . HUMAN RESOURCES

As on 31st March 2017 the Company has 9 employees. The relations with Company'semployees are cordial.

8 . CONCERNS AND THREATS

3 The Company operates in a highly regulated environment. Any change in GovernmentPolicies will adversely affect the operations of the Company.

3 The Company depends on the service provider for operations and maintenance of WindTurbines. Certain litigations against the service providers are pending before thejudicial / quasi judicial authorities. Unfavourable outcome of these litigations willadversely affect our operations.

9 . INTERNAL CONTROL SYSTEMS AND THEIR

ADEQUACY

The Company has adequate internal control systems to ensure operational efficiency andaccuracy in financial reporting and compliance of various laws and regulations.

The internal control system is supported by the internal audit process. The internalaudit is conducted by a Chartered Accountant in practice. The Audit Committee of the Boardreviews the Internal Audit process and the adequacy and effectiveness of internal auditand controls periodically.

10. CAUTIONARY STATEMENT

Statements in this Report particularly those which relate to Management Discussion andAnalysis describing the Company's objectives projections estimates and expectations mayconstitute "forward looking statements" within the meaning of applicable lawsand regulations. Actual results might differ materially from those either expressed orimplied.

11. SUBSIDIARY COMPANIES

The Company has four subsidiary companies as on 31st March 2017.

The details are given in Annexure 'I'

12. PARTICULARS OF INFORMATION FORMING

PART OF THE BOARD'S REPORT PURSUANT TO SECTION 134 OF THE COMPANIES ACT 2013 RULE 8OF THE COMPANIES (ACCOUNTS)

RULES 2014 AND RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014

The details are given in Annexure 'II'

13. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of Annual Return in Form MGT - 9 is annexedherewith as

Annexure 'III' to this Report.

14. NUMBER OF MEETINGS OF THE BOARD

During the year under review four Board Meetings were convened and held. The detailsof which are given in the Corporate Governance Report. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013 and the SecuritiesExchange Board of India (Listing Obligations & Disclosure Requirements) Regulations2015 hereinafter called "Regulations 2015".

15. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(5) of the Companies Act 2013 in respectof Directors' Responsibility Statement your Directors' state that:

a) in the preparation of the Annual Financial Statements for the year ended 31st March2017 the applicable accounting standards have been followed along with the properexplanation relating to material departures;

b) accounting policies as mentioned in Note - 1 to the Financial Statements have beenselected and applied consistently. Further judgments and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2017 and of the profit of the Company for the year ended on thatdate;

c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Annual Financial Statements have been prepared on a going concern basis;

e) proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively; and f) proper systems to ensure compliancewith the provisions of all applicable laws were in place and were adequate and operatingeffectively.

16. A STATEMENT ON DECLARATION GIVEN BY

INDEPENDENT DIRECTORS

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and 'Regulations2015'.

17. COMPANY'S POLICY ON DIRECTORS' AND

KMP'S APPOINTMENT AND REMUNERATION

Director's appointment and remuneration is done as per the policy for selection andappointment of Directors Key Managerial Personnel and Senior Management Personnel andtheir remuneration. The policy is appended as Annexure 'IV' to this Report.

18. ACCOUNTS AND AUDIT

a . Statutory Auditors

The Board of Directors has recommended reappointment of M/s. Joshi Apte & Co.Chartered Accountant Pune (Firm Registration No.104370W) as Statutory Auditors of theCompany for a period of four (4) years from the conclusion of ensuing Annual GeneralMeeting (AGM) till the conclusion of 21st AGM.

b. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. SVD & Associates Company Secretaries (Membership No. FCS 1321 CP No.965) to undertake the Secretarial Audit of the Company. The Report of the SecretarialAudit is annexed herewith as Annexure 'V' to this Report.

c. CONSOLIDATED ACCOUNTS

The Consolidated Accounts of the Company with its subsidiaries for the year ended 31stMarch 2017 are enclosed. The Auditors in their report have qualified the ConsolidatedAccounts. The Boards explanation to the same is enclosed below.

19. EXPLANATION ON COMMENTS ON STATUTORY AUDITORS' AND SECRETARIAL AUDITORS' REPORTS

There are no qualifications reservations or adverse remarks or disclaimers made byM/s. Joshi Apte & Co. Statutory Auditors in their Audit Report on standaloneaccounts. However they have qualified the Consolidated Accounts. M/s. SVD &Associates Practicing Company Secretary in their Secretarial Audit Report have madecertain qualifications. The auditor's qualifications and Boards explanation thereto aresummarized as under:

Auditors Qualifications Boards' explanation
A ) Financial Audit -
Consolidated Financial Statements
Basis of Qualified Opinion
1. Based on the audit procedures carried out by us the work of the other auditors' of Nandi Highway Developers Limited (NHDL) and Nandi Infrastructure Corridor Enterprise Limited (NICE) cannot be used with respect to certain required statutory disclosures in their respective audited financial statements; and since we have not been able to perform sufficient additional procedures regarding the financial information of the component audited by the other auditors' we qualify our opinion and we are unable to quantify the effect of the inadequate disclosures on the Consolidated Financial Statements of the Company with respect to NHDL and NICE. The Company has requested the Managements of NHDL and NICE to take appropriate corrective measures.
2. As stated in Note No. 36 C Nandi Economic Corridor Enterprises Limited (NECE) has advanced an amount aggregating to Rs. 1227682883 as on 31 March 2017 (Rs. 1227243251 as at 31 March 2016) to Nandi Engineering Limited (NEL) for carring out the development of toll roads and townships and has given Inter-corporate deposits of Rs. 58250000 as on 31 March 2017 (Rs. 98422294 as at 31 March 2016) to NEL (including interest accrued but not due thereon of Rs. Nil as on 31 March 2017 (As at 31 March 2016 Rs. 11678748). These have been considered as good and recoverable by the Management of NECE based on the future additional work expected to be contracted to NEL. In the absence of sufficient appropriate audit evidence to assess the recoverability of these advances and inter- corporate deposits we are unable to form an opinion on the recoverability of the carrying value of these balances and consequent adjustment that may be required on the consolidated financial statements. This matter was also qualified in our report on the consolidated financial statements for the year/period ended March 312016. Nandi Economic Corridor Enterprises Limited (NECE) has advanced an amount aggregating to Rs. 1227682883 as on 31 March 2017 (Rs. 1227243251 as at 31 March 2016) to Nandi Engineering Limited (NEL) for carring out the development of toll roads and townships and has given Inter- corporate deposits of Rs. 58250000 as on 31 March 2017 (Rs. 98422294 as at 31 March 2016) to NEL (including interest accrued but not due thereon of Rs. Nil as on 31 March 2017 (As at 31 March 2016 Rs. 11678748). These have been considered as good and recoverable by the Management of NECE based on the future additional work expected to be contracted to NEL once NECE receives / acquires the requisite land parcels.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph the consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting standards and accounting principles generally accepted in India
B ) Secretarial Audit -
1. The Company has failed to file Consolidated financial results of the Company within 60 days of the close of the Financial year with the Stock Exchange as required under Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Nandi Highway Developers Ltd. (NHDL) Nandi Infrastructure Corridor Enterprises Ltd. (NICE) and Nandi Economic Corridor Enterprises Ltd. (NECE) which are the subsidiaries of the Company were in the process of finalising their accounts for the financial year ended 31st March 2017 and hence they had not submitted the said audited financials to the Company within the stipulated time..
However subsequently the Company has prepared consolidated financials after the audited accounts of all the above mentioned subsidiaries were made available to the Company and filed with the Stock Exchanges.
2. The Company has not expended any amount for Corporate Social Responsibility activities as per Section 135 of the Act for the year 2016-17. The Corporate Social Responsibility (CSR) Committee is examining various areas especially on education for CSR spend. The amount will be spent as per CSR Committees recommendations. Will be placed before the Board in future.
3. Minutes of subsidiary companies were not placed before the Board Meeting of the Company as required under Regulation 24 SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015

20. PARTICULARS OF LOANS GUARANTEES OR

INVESTMENT UNDER SECTION 186

During the year the Company has not made any investments other than the CurrentInvestments. The closing balances of investments which would be covered under Section 186of the Companies Act 2013 are disclosed in the Schedule of Non-Current Investments inthe Financial Statements. The company has not granted any loans and issued corporateguarantees during the year.

21. PARTICULARS OF CONTRACTS OR

ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188 OF THECOMPANIES ACT 2013

Pursuant to the provisions of Section 134 of the Companies Act 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 the particulars of contracts or arrangementsentered into by the Company with Related Parties have been done at arm's length and are inthe ordinary course of business. Particulars are being provided in Form AOC

- 2 in Annexure 'VI' Related Party Disclosures as per AS -18 have been provided in toNote No.31 to the Financial Statements.

22. STATE OF COMPANY'S AFFAIRS

Discussion on state of Company's affairs has been covered in the Management Discussionand Analysis.

23. AMOUNTS PROPOSED TO BE CARRIED TO

RESERVES

Particulars of the amounts proposed to be carried to reserves have been covered as partof the financial performance of the Company.

24. MATERIAL CHANGES AND COMMITMENTS

BETWEEN THE DATE OF THE BALANCE SHEET AND THE DATE OF REPORT

There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the Financial Year of the Company towhich the Financial Statements relate and the date of the report except as disclosedelsewhere in this report.

25. CONSERVATION OF ENERGY TECHNOLOGY

ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

Conservation of Energy and Technology Absorption

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under Section 134(3)(m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are annexedherewith as Annexure 'VII' to this report.

26. RISK MANAGEMENT POLICY

The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified are systematically addressedthrough mitigating actions on a continuing basis. These are discussed at the meetings ofthe Audit Committee and the Board of Directors of the Company.

27. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has constituted a Corporate Social Responsibility (CSR) Committee inaccordance with Section 135 of the Companies Act 2013. The details of the CSR Policy andinitiatives taken by the Company towards CSR during the year are annexed as

Annexure 'VIII' to this Report.

28. BOARD EVALUATION

Pursuant to provisions of the Companies Act 2013 Rules thereunder and 'Regulations2015' the Board has carried out evaluation of its own performance and that of itsCommittees and individual Directors.

29. PERFORMANCE AND FINANCIAL POSITION OF

EACH OF THE SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES:

The details are given in Annexure 'I'

30. CHANGE IN THE NATURE OF BUSINESS IF ANY

There has been no change in the nature of business during the Financial Year underreview.

31. DETAILS OF DIRECTORS OR KEY MANAGERIAL

PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

Directors appointed during the year

Name of Director Designation Term of appointment
Mr. B. N. Kalyani Director Re-appointed with effect from 30th September 2016 subject to retirement by rotation

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under subsection (6) of Section 149 of the Companies Act 2013 and 'Regulations 2015'.

32. Employees designated as Key Managerial Personnel (KMP) during the year

NIL

33. Directors and KMP's resigned during the year

None of the Directors and KMPs resigned during the year ended 31st March 2017.

34. Directors proposed to be re-appointed at the ensuing Annual General Meeting

Mr. A. B. Kalyani retires by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment.

The brief resumes and other details relating to Director who is proposed to bere-appointed as required to be disclosed under 'Regulations 2015' form part of the Notesand Statement setting out material facts annexed to the Notice of the Annual GeneralMeeting.

35. NAMES OF COMPANIES WHICH HAVE BECOME

OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

N.A.

36. DETAILS OF DEPOSITS WHICH ARE NOT IN

COMPLIANCE WITH THE REQUIREMENTS OF CHAPTER V OF THE COMPANIES ACT 2013

None.

37. DETAILS OF SIGNIFICANT AND MATERIAL

ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERNSTATUS AND COMPANY'S OPERATIONS IN FUTURE

The Company has neither received nor is aware of any such order from Regulators Courtsor Tribunals during the year.

38. DETAILS IN RESPECT OF ADEQUACY OF

INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has suitable internal control system comprising of proper checks andbalances policies and procedures. This includes code of conduct whistle blower policyMIS and internal audit mechanism.

The Audit Committee along with Management review the internal audit and internalcontrols on a regular basis.

39. COMPOSITION OF AUDIT COMMITTEE

The composition of the Audit Committee has been mentioned in the Corporate GovernanceReport annexed to this Report.

40. VIGIL MECHANISM

The Company has formulated and implemented the Whistle Blower Policy / Vigil Mechanism.This has provided a mechanism for directors and employees of the Company and other personsdealing with the Company to report to the Chairman of the Audit Committee; any instance ofunethical behavior actual or suspected fraud or violation of the Company's code ofconduct. The aforesaid policy has also been uploaded on the Company's website.

41. CASH FLOW

A Cash Flow Statement for the year ended 31st March 2017 is attached to the BalanceSheet.

42. CORPORATE GOVERNANCE

A report on the Corporate Governance along with the certificate of compliance from theAuditors forms part of the Annual Report.

43. OBLIGATION OF COMPANY UNDER THE

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT2013

In terms of provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 the Company has formulated a Policy to preventSexual Harassment of Women at Workplace. During the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

44. ACKNOWLEDGMENTS

Your Directors wish to place on record their appreciation for the contribution madeand support provided to the Company by the shareholders employees and bankers during theyear under the report.

For and on behalf of the Board of Directors For BF Utilities Limited

B.B. Hattarki S.S. Vaidya
Pune Director Director
2nd September 2017 DIN:00145710 DIN:00024245

ANNEXURE I TO THE DIRECTORS' REPORT

SUBSIDIARY COMPANIES

PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATES AND JOINTVENTURE COMPANIES FOR THE YEAR 1st APRIL 2016 TO 31st MARCH 2017 :

Name and Registered % Holding Particulars A m o u n t
Office of the Subsidiary (Rs. in lakhs)
C o m p a n y
Nandi Infrastructure Corridor 74.52 Total Income 70.24
Enterprises Limited Total Expenditure 51.55
No 1Midford House Midford Profit / (Loss) before exceptional items and taxation 18.69
Gardens Off M.G. Road Exceptional items -
Bangalore Karnataka- 560001 Profit / (Loss) before taxation 18.69
Provision for tax (including Deferred Tax) 5.58
Net Profit / (Loss) 13.10
Balance of Profit / (Loss) from previous year (201.16)
Less: Proposed Dividend -
Less : Dividend Distribution Tax -
Less : Transferred to General Reserve -
Balance carried to Balance Sheet * Special Reserve of Rs. 438 Lacs written back during the year. *249.94
Nandi Economic Corridor 40.41 Total Income 26417.61
Enterprises Limited Total Expenditure 29659.01
No.1 Midford House Midford Profit / (Loss) before exceptional items & taxation (3241.40)
Gardens Off M.G. Road Exceptional Items -
Bangalore Karnataka - 560001 Profit (Loss) before taxation (3241.40)
Provision for tax (including Deferred Tax) -
Net Profit / (Loss) (3241.40)
Balance of Profit / (Loss) from previous year (66406.37)
Less: Proposed Dividend -
Less: Dividend Distribution Tax -
Balance carried to Balance Sheet (69647.78)
Nandi Highway Developers 69.53 Total Income 5456.34
Limited Total Expenditure 2944.75
No.1Midford House Midford Profit / (Loss) before exceptional items & taxation 2511.59
Garden Off M.G. Road Exceptional Items -
Bangalore Karnataka - 560001 Profit (Loss) before taxation 2511.59
Provision for tax (including Deferred Tax) 535.80
Net Profit / (Loss) 1975.70
Balance of Profit / (Loss) from previous year 2611.91
Less: Transfer to General Reserve -
Less: Proposed Dividend -
Less: Dividend Distribution Tax -
Balance carried to Balance Sheet 4587.61
Avichal Resources Private 100 Total Income 6.00
Limited Total Expenditure 0.17
Cyber City Tower No.15 Profit / (Loss) before taxation 5.83
Level 6 Office No.602 Provision for tax (including Deferred Tax) 1.93
Magarpatta City Hadapsar Net Profit / (Loss) 3.90
Pune - 411013 Balance of Profit / (Loss) from previous year 15.26
Less: Proposed Dividend -
Less : Dividend Distribution Tax -
Less : Transferred to General Reserve -
Balance carried to Balance Sheet 19.16

ANNEXURE II TO THE DIRECTORS' REPORT

INFORMATION FORMING PART OF THE DIRECTORS' REPORT PURSUANT TO RULE 5 OF THE COMPANIES(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014

Particulars Name of Director Ratio
I. The ratio of remuneration of each director to the median remuneration of the employees of the Company for the financial year N.A. as no remuneration except sitting fee is paid to any Director
II. The percentage increase in remuneration of each director Chief Financial Officer Chief Executive Name of Director / KMP Percentage +/(-) in the remuneration
Officer Company Secretary or Manager if any in the financial year Mr. B.S. Mitkari - +7.40%
CEO & Company Secretary
Mr. S.S. Joshi - CFO +11.13%
III. The percentage increase in the median remuneration of employees in the financial year 10%
IV. The number of permanent employees on the rolls of Company 9
V. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration 10% The increase in remunrarion is as per the industry practice.
VI. Affirmation The Board affirms that the remuneration is as per the Nomination and Remuneration policy of the Company.
VII. Statement showing the names of the top ten employees interms of remuneration drawn and the names of every employee who - No employee falls in this category.
(i) if employed throughout the financial year was in receipt of remuneration for that year which in the aggregate was not less than One Crore Two Lakhs Rupees;
(ii) if employed for a part of the financial year was in receipt of remuneration for any part of that year at a rate which in the aggregate was not less than Eight Lakhs Fifty Thousand Rupees per month;
(iii) if employed throughout the financial year or
part thereof was in receipt of remuneration in that year which in the aggregate or as the case may be at a rate which in the aggregate is in excess of that drawn by the Managing Director or Whole-time Director or Manager and holds by himself or along with his spouse and dependent children not less than two percent of the equity shares of the Company.

For and on behalf of the Board of Directors For BF Utilities Limited

B.B. Hattarki S.S.Vaidya
Director Director
DIN:00145710 DIN:00024245

 

Pune
2nd September 2017