FOR THE YEAR ENDED 31st March 2020
Your Directors have pleasure in presenting their Twentieth Annual Report on thebusiness and operations of the Company together with Audited Statement of Accounts for theyear ended 31st March 2020.
1. FINANCIAL PERFORMANCE
(Rs. in Million)
|Particulars || |
| ||Financial Year ||Financial Year |
| ||2019-20 ||2018-19 |
|Total Income ||237.60 ||497.46 |
|Total Expenditure ||217.94 ||231.62 |
|Profit for the year before taxation ||19.66 ||265.84 |
|Provision for tax (including Deferred Tax) ||(5.53) ||(5.85) |
|Profit for the year before taxation ||25.19 ||271.69 |
|Adjustments / Excess / (short) for taxation and tax payments || || |
|Profit attributable to Equity holder ||25.19 ||271.69 |
|Items of other comprehensive income (net of Tax) ||(1.08) ||0.25 |
|Total ||24.11 ||271.94 |
|Balance of profit / (Loss) from previous year ||1092.71 ||820.77 |
|Balance available for appropriation ||1116.82 ||1092.71 |
|Appropriations ||- ||- |
|Surplus retained in statement of profit and loss ||1116.82 ||1092.71 |
2. KEY FINANCIAL RATIOS
Details of changes in key financial ratios including significant changes i.e. change of25% or more as compared to the immediately previous financial year along with detailedexplanations:
|Particulars ||FY 2019-20 ||FY 2018-19 ||Explanation for significant change |
|Debtor Turnover ||N.A. ||N.A. ||NA |
|Inventory Turnover ||N.A. ||N.A. ||NA |
|Interest Coverage Ratio ||NIL ||NIL ||NA |
|Current Ratio ||0.94 ||0.94 ||NA |
|Debt Equity Ratio ||0.23 ||0.29 ||NA |
|Debt Equity Ratio (Net) ||0.09 ||0.22 ||NA |
|Operating Profit Margin (%) ||14.95% ||10.00% ||NA |
|Net profit Margin (%) ||10.60% ||54.62% ||NA |
Details of any change in Return on Net Worth as compared to the immediately previousfinancial year:
|Particulars || |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Return on Net Worth (%) ||1.93% ||21.20% ||8.43% ||6.16% |
Return on net worth is computed as net profit by average net worth. The details forchange if any in return on net worth are explained in relevant sections above.
3. SHARE CAPITAL
The paid-up Equity Share Capital as on 31st March 2020 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 2020 none ofthe Directors of the Company hold instruments convertible into equity shares of theCompany.
Your Directors do not recommend any dividend on the equity shares for the year ended31st March 2020.
5. MANAGEMENT DISCUSSION AND ANALYSIS
MANAGEMENT DISCUSSION AND ANALYSIS
COVID-19 pandemic is having an impact on developments and on new installations of windpower projects worldwide. There are many delays in different phases of projectimplementation. The delays are mainly caused by interruptions of international supplychains non-availability of the workforce due to hygienic rules permission procedureswhich is taking longer time than usual.
Another new development is the concept of direct marketing and self-consumption of windpower is becoming more popular in many parts of the world. While feed-in tariffs are underpressure and auctions lead to problems amongst investors such new forms of directmarketing and self consumption may become major drivers for growth in near future.
The new installation of Wind Project in 2020 will be similar or slightly lower than2019 but growth may return again in 2021.
Wind power generation capacity in India has significantly increased in recent years. Asof 2020 the total installed wind power capacity was 38.124 GW the fourth largestinstalled wind power capacity in the world. Wind power capacity is mainly spread acrossthe Southern Western and Northern regions.
However open access sellers face challenges of higher charges and lower tariffs.
The outbreak of COVID-19 turned into global pandemic in March 2020 and held the worldat its standstill. Consequent lockdown announced across India resulted in temporaryclosure of offices of the Company in line with the government/local authorities'directions.
Your Company as a part of its safety policies ensured that its employees were workingfrom home. As the restrictions were eased out your Company while closely monitoring thesituation and following safety guideline reopened its offices.
Company's Performance :
Company took all efforts to operationalize maximum wind turbines.
The Company proposes to operationalise additional wind turbines during the comingmonths.
6. COMPANY PERFORMANCE
During the Financial Year under review your Company earned total income of Rs.23.76Crores (previous years Rs.49.75 Crores). The net Profit after tax is Rs.2.52 Crores(previous year's profit of Rs.27.17 Crores).
7. OPERATIONS OF THE COMPANY
The working conditions for wind mill continue to be difficult. Despite such problemsthe Company was able to generate 20.70 Million (Net) Units of power. The Company is makingall efforts to maximize power generation and reduce costs.
8. HUMAN RESOURCES
As on 31st March 2020 the Company has 8 employees. The relations with Company'semployees are cordial.
9. CONCERNS AND THREATS
The Company operates in a highly regulated environment. Any change in GovernmentPolicies will adversely affect the operations of the Company.
The Company depends on the service provider for operations and maintenance ofWind Turbines. Certain litigations against the service providers are pending before thejudicial / quasi judicial authorities. Unfavourable outcome of these litigations willadversely affect our operations.
10. PROSPECTS FOR THE CURRENT YEAR
The Company is taking all efforts to improve the machine availability of the Wind Farmby undertaking regular maintenance and break down maintenance in a scheduled manner. TheCompany is also trying to operationalize some of the balance machines. The steep increasein open access charges being levied by the DISCOM year after year is putting huge pressureon the operating margins. The Company is taking measures for reduction of other operatingcosts to reduce the impact of increase in open access charges.
The current economic slowdown and COVID-19 pandemic in India and globally has posed newchallenges to the Company. The Company is taking all efforts to mitigate these challenges.
11. 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.
12.SAFETY HEALTH AND ENVIRONMENT
The Company ensures safety of all its employees working at different places. Necessarysafety gadgets are provided to the employees requiring the same.
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.
The Company has four subsidiary companies as on 31st March 2020.
The details are given in Annexure 'I'
15. PARTICULARS OF INFORMATION FORMING PART OF THE BOARD'S REPORT PURSUANT TO SECTION134 OF THE COMPANIES ACT 2013 RULE 8 OF THE COMPANIES (ACCOUNTS) RULES 2014 AND RULE 5OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
The details are given in Annexure 'II'
16. 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.
1 7. NUMBER OF MEETINGS OF THE BOARD
During the year under review Nine 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".
18.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 March2020 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 2020 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 compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.
19.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' and also confirmed that they have complied with the Code of Independent Directorsprescribed in Schedule IV of The Companies Act 2013.
The Company has laid down a Code for the Board of Directors and Senior Management ofthe Company. The said Code is available on the website of the Company viz.www.bfutilities.com
All the Board Members and Senior Management Personnel of the Company have affirmedcompliance with the Code of Conduct.
20. 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.
21. ACCOUNTS AND AUDIT
a. Statutory Auditors
M/s. Joshi Apte & Co. Chartered Accountant Pune (Firm Registration No.104370W)are the auditors of the Company and will continue the audit for Financial year 2020-21.
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 to undertake the SecretarialAudit of the Company for the year 2019-20. The Report of the Secretarial Audit is annexedherewith as Annexure 'V' to this Report.
c. CONSOLIDATED ACCOUNTS
The Consolidated Accounts for the year ended 31st March 2020 are enclosed. Further astatement containing the salient features of the financial statements of associatecompanies and joint ventures in the prescribed Form AOC-1 is appended as Annexure to NoteNo.38 which forms part of this Report.
The Company will make the said financial statements and related detailed informationavailable upon the request by any Member of the Company. These financial statements willalso be kept open for inspection by any Member at the Registered Office of the Company.Pursuant to the provisions of Section 136 of the Companies Act 2013 the financialstatements of the Company consolidated financial statements along with relevant documentsare available on the website of the Company.
22. 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. M/s. SVD & Associates Practicing Company Secretary in their SecretarialAudit Report have made certain qualifications. The auditor's qualifications and Boardsexplanation thereto are summarized as under:
|Auditors Qualifications ||Boards' explanation |
|A) Secretarial Audit - || |
|I. The Company has not expended any amount for Corporate Social Responsibility activities as prescribed under Section 135 of the Act during the Audit Period. ||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. |
|II. As required under respective Regulations of LODR: || |
|a. The disclosure of related party Transaction as prescribed under sub-regulation (9) of Regulation ||The delay was accidental |
|Auditors Qualifications ||Boards' explanation |
|(23) for half year ended 31st March 2019 and 30th September 2019 was given after prescribed time period || |
|b. The Annual consolidated financial results for the year ended 31st March 2019 as prescribed under clause (d) of Sub-regulation (3) of Regulation (33) are submitted to Stock Exchanges beyond prescribed time and the declaration required to be submitted as per the provisions of the said Regulation is not submitted. ||The finalization and audit of accounts by some of the subsidiaries got delayed due to some unavoidable circumstances leading to delay in publishing the consolidated results by the Company. Form "A" was submitted for emphasis matter and therefore declaration was not required. |
|c. The Consolidated Financial Results for quarter ended 30th June 2019 as prescribed under clause (a) and sub clause (b) of Sub regulation (1) of Regulation (33) are filed with Stock Exchange beyond prescribed time period. ||The finalization and audit of accounts by some of the subsidiaries got delayed due to some unavoidable circumstances leading to delay in publishing the consolidated results by the Company. |
|d. The Copy of the Annual Report for the year ended 31st March 2019 required to be submitted to the stock exchange during the period under review in terms of Regulation 34 of LODR was submitted beyond the time prescribed under the said Regulation . ||The delay was due to connectivity issues faced during the period. |
23. 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 details of loans and guarantees if any are in thefinancial statement of 2019-20.
24. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO INSUB-SECTION (1) OF SECTION 188 OF THE COMPANIES 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 inAnnexure 'VI' Related Party Disclosures as per AS -18 have been provided in to Note No.26to the Standalone Financial Statements.
25. STATE OF COMPANY'S AFFAIRS
Discussion on state of Company's affairs has been covered in the Management Discussionand Analysis.
26. 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.
27. MATERIAL CHANGES AND COMMITMENTS BETWEEN THE DATE OF THE BALANCE SHEET AND THE DATEOF 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.
28. 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.
29. 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.
30. 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.
31. 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.
32. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATES ANDJOINT VENTURE COMPANIES:
The details are given in Annexure 'I'
33. CHANGE IN THE NATURE OF BUSINESS IF ANY
There has been no change in the nature of business during the Financial Year underreview.
34. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVERESIGNED DURING THE YEAR
Directors appointed during the year
|Name of Director ||Designation ||Term of appointment |
|Mr. A. B. Kalyani ||Director ||Re-appointed with effect from 30th November 2019 subject to retirement by rotation |
|Mr. B. S. Mitkari ||Whole-time Director ||Appointment with effect from 1st April 2019 |
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'. The Companyhas received declarations from all Directors confirming that they are not disqualified /debarred from being appointed / reappointed as Director.
35. Employees designated as Key Managerial Personnel (KMP) during the year
Mr. B. S. Mitkari was appointed as a Wholetime Director w.e.f. 1st April 2019.
36. Directors and KMP's resigned during the year
None of the Directors resigned during the year ended 31st March 2020.
During the year Mr. S. S. Joshi resigned as Chief Financial Officer of the Company on30th November 2019. Mr. Joshi continues to work as Finance Manager in the Company.
37. Directors proposed to be appointed and reappointed at the ensuing Annual GeneralMeeting
1) Mr. B. N. Kalyani (DIN : 00089380) retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for reappointment.
2) Ms. A. A. Sathe (DIN : 06925030) whose term as an Independent Director expires on1st March 2021 is proposed to be re-appointed for a further term of five years. Aresolution to consider and approve her appointment is included in the Notice of 20thAnnual General Meeting.
The brief resumes and other details relating to Directors who are 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.
38. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR
39. DETAILS OF DEPOSITS WHICH ARE NOT IN COMPLIANCE WITH THE REQUIREMENTS OF CHAPTER VOF THE COMPANIES ACT 2013
40. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS 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.
41. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL 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.
42. COMPOSITION OF AUDIT COMMITTEE
The composition of the Audit Committee has been mentioned in the Corporate GovernanceReport annexed to this Report.
43. 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.
44. CASH FLOW
A Cash Flow Statement for the year ended 31st March 2020 is attached to the BalanceSheet.
45. CORPORATE GOVERNANCE
A report on the Corporate Governance along with the certificate of compliance from theAuditors forms part of the Annual Report.
46.OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
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.
1. Statutory Auditors
At the Seventeenth Annual General Meeting held on 6th November 2017 M/s. Joshi Apte& Company Chartered Accountants (Firm Registration No.104370W) were appointed asStatutory Auditors of the Company to hold office till the conclusion of 21st AnnualGeneral Meeting to be held in the year 2021.
2. 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 Practicing Company Secretaries to undertake theSecretarial Audit of the Company for the year 2019-20. The Secretarial Audit Report isannexed herewith as Annexure "V".
M/s. SVD & Associates Practicing Company Secretaries have also submittedSecretarial Compliance Report as laid down in SEBI Circular CIR/CFD/CMD1/27/2019 dated 8thFebruary 2019 and have also confirmed that the Company has complied with of all applicableSEBI Regulations and circulars / guidelines issued thereunder for the Financial Year2019-20 subject to the observations given therein.
During the year under review the Company has complied with Secretarial Standardsissued by The Institute of Company Secretaries of India and approved by the CentralGovernment under Section 118(10) of the Companies Act 2013 to the extent applicable.
49.CERTIFICATE FROM PRACTICING COMPANY SECRETARY:
The Company has received a certificate from Mr. Sunny Warghade Company Secretaryconfirming that none of the Directors on the Board of the Company have been debarred ordisqualified by MCA or SEBI or any such statutory authority from being appointed /continuing as Director and the same is appended as Annexure 'IX' to the Directors' Report.
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 ||A.B. Kalyani |
|Pune ||Director ||Director |
|12th November 2020 ||DIN:00145710 ||DIN:00089430 |