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Notes to Accounts of BF Utilities Ltd.

Sep 30, 2015

1. (b) Terms / rights attached to equity shares :

The Company has only one class of equity shares having a par value of Rs. 5/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend, as and when proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting except in case of interim dividend.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2. (c) Shares held by holding/ultimate holding company and/or their subsidiaries/associates

The Company being ultimate holding company there are no shares held by any other holding, ultimate holding company and their subsidiaries/associates

3. (d) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date

There are no bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding reporting date.

4. Rupee term loan from HDFC Ltd.

Loan from HDFC Ltd. was secured by : Corporate Guarantee issued by KSL Holdings Private Limited.

This loan was repayable on completion of 24 months from the date of disbursement i.e. from 25 March, 2014.This loan carried an interest linked to HDFC Ltd's Corporate Prime Lending Rate. Interest at Base rate of 8% was payable quarterly and balance on repayment of loan. The loan has been fully repaid during the year and satisfaction of charge filed accordingly.

5. Sales tax deferral

Balance outstanding Rs. 502,226,830 (Previous year 615,101,574) Repayable 1/5th of amount every year after 10 years of the benefit availed. Repayment schedule

6. As required by and in accordance with Accounting Standard 22 - 'Taxes on Income' prescribed by Companies (Accounts) Rules, 2014, the Company recognises deferred tax which result from timing differences after ignoring deferred tax adjustments originating and reversing during the tax holiday period. The deferred tax adjustments reversing outside the tax holiday period have been recomputed consequent to the company's claim of determining the tax holiday period with reference to the date of each phase of implementation as against the earlier intended period with reference to a single date of implementation for the wind power generation business.

Note :

On the basis of information available with the Company, regarding the status of suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006", there are no suppliers covered under above mentioned Act.

7. Commitments:

A. The Company as a Promoter of Nandi Economic Corridor Enterprises Ltd. (NECE) has given an undertaking to Infrastructure Development Finance Co. Ltd. (IDFC) in connection with the loan of Rs. 13,200 million (previous year Rs. 13,200 million) advanced to NECE by IDFC, whereby the company has undertaken to ensure continuance of the project undertaken by NECE, continued Promoters contributions as per the Financial plan, with adequate technical, financial and managerial support at the least until the final settlement date.

Further the Company has committed to meet the shortfall in resources of NECE by way of Promoters contribution in terms of the Financing Plan which can be in the form of Equity / Preference Share Capital and / or granting of interest free unsecured loan until the final settlement date, which together with current contributions would be subordinate to the funds borrowed from IDFC and shall not be repaid until the final settlement date. The Company has further agreed to ensure that the Borrower adheres to the land sale / Development Plan as mentioned in the Common Loan Agreement.

B. The Company, as a promoter and indirect holding company of Nandi Economic Corridor Enterprises Ltd. (NECE) has signed definitive agreements on 24 December, 2010, in relation to foreign direct investment of Rs. 5,000 million in NECE.

Pursuant to these definitive agreements, NECE has allotted convertible "Securities" to AIRRO (Mauritius)Holdings V (Investor), on the terms and conditions contained in the definitive agreements, whereby the investor would get a shareholding between 8.33% and 16.29% in NECE.

8. A. The Company has given security to Axis Bank Limited to the extent of Rs. 300 million for securing the term loan facility granted by it to Nandi Highway Developers Limited (NHDL),a subsidiary of the Company, by way of hypothecation of movable assets and equitable mortgage of fixed assets pertaining to Wind Mill project of the Company located in village Boposhi and Maloshi, Dist Satara.

B. The Company has given security to Kotak Mahindra Investments Limited to the extent of Rs.300 million securing the term loan facility granted by it to Nandi Highway Developers Limited (NHDL),a subsidiary of the Company, by way of pledge of 12,301,127(P.Y. 11,071,900) equity shares of Rs. 10 each of NHDL held by the Company.

9. Related party disclosures have been set out in a separate statement annexed to this schedule. The related parties, as defined by Accounting Standard 18 "Related Party Disclosures" prescribed by Rules, in respect of which the disclosures have been made, have been identified and taken on record by the Board.

Nature of Provisions

A. In terms of various notifications / circulars issued by Government of Maharashtra, electricity duty is payable in respect of wind power sold to third parties. However in absence of clarity on the entire subject and also in view of various other issues the Company as a matter of prudence and without prejudice to dispute the claim, has made a provision for Electricity duty.

B. All the Wind Power Projects have completed the tenure of wheeling agreement with the distribution licensee viz. Maharashtra State Electricity Distribution Company Limited (MSEDCL). All the projects of wheeling energy are under the open access provisions issued by the Hon' able Maharashtra Electricity Regulatory Commission (MERC). As a matter of prudence and without prejudice the Company has made a provision for wheeling and Transmission charges under open access.

Expected timing of resulting outflow:

A. Since the matter is yet to be resolved / clarified in respect of applicability of Electricity duty for Wind Power Generation, the timing of outflow cannot be determined up to December 2011. However, the Company is paying the duty regularly since January 2012.

B. Short Term Loans & Advances includes Wheeling and Transmission charges of Rs. 77,641,966 (P.Y. Rs. 77,641,966) have been paid up to 31 March,2014, to the distribution licensee under protest, as the matter is pending in appeal with the MERC.

10. The Company has advanced amounts aggregating to Rs. 370,000,000 to Nandi Economic Corridor Enterprises Limited (NECE), Subsidiary Company, for purchase of developed parcels of land, which remain outstanding at the balance sheet date. These have been considered as good and recoverable in these financial statements by the Management of the Company based on the balance confirmation received from NECE.

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

12. Disclosures required as per Clause 32 of the Listing Agreement have been set out in a separate statement annexed hereto.

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

14. Provident Fund

The Provident Fund contribution is made to BFUL Staff Provident Fund Trust. In terms of guidance note issued by the Institute of Actuaries of India, the actuary has provided a valuation of Provident Fund Liability based on assumptions listed below. The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are

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

Pending issuance of these credit notes, the Company has recognized revenue from power generation during 1 April, 2014 to 31 March, 2015 at the average power tariff base rate at Rs. 5.75 per unit generated.

In case of unfavourable decision by MERC and consequent sale of power to MSEDCL at Rs. 2.52 per unit generated, as per case no 58 of 2008 issued by MSEDCL, the profits of the Company for that year would be lower by about Rs. 40.5 million net of tax.

However the Company has received Open Access Permission for 3 years from 1 April, 2015.

15. During the year, the operations of wind farm of the Company were partially affected due to the local issues at the wind farm site and disputes with the service provider. The power generation and corresponding income from operation is lower due to these disturbances. The wind farm has since been functioning normally.

16. The company has formed Corporate Social Responsibility (CSR) Committee and has also adopted a CSR Policy in accordance with the provisions of section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Company recognises CSR spends as and when incurred. Relevant details for the financial year covered by these statements are as under.

17. During the year, the Company has sold 0% OFCD's held in DGM Realities Pvt Ltd. at a profit of Rs 40.4 million.

18. The Company has reclassified previous figures to confirm to this year's classification.

Related parties where control exist

Subsidiaries Nandi Infrastructure Corridor Enterprise Ltd.

Nandi Highway Developers Ltd.

Step down subsidiary Nandi Economic Corridor Enterprise Ltd.

Associate Hospet Bellari Highways Pvt. Ltd. #

Enterprises owned or significantly Bharat Forge Ltd.

influenced by key management BF Investment Ltd.

personnel or their relatives /Enterprises under common control

Key management personnel Mr. B.S. Mitkari* (CEO & CS)

Mr. S.S.Joshi*

# Ceases to be an associate w.e.f. 17 February , 2015.

*Mr. B.S.Mitkari (CEO) and Mr. S.S.Joshi (Chief Financial Officer) are key managerial personnel w.e.f. 31 March, 2015 in accordance with the provisions of the Companies Act 2013.

* Does not include gratuity and leave encashment since the same is considered for all employees of the Company as a whole

(iv) Gurantee given on behalf of subsidiary

The Company has given security to Axis Bank Limited to the extent of Rs. 300 Million for securing the term loan facility granted by it to Nandi Highway Developers Ltd. (See note no. 28A)

The Company has given security to Kotak Mahindra Investments Limited to the extent of Rs.300 Million securing the term loan facility granted by it to it to Nandi Highway Developers Limited. (See note no. 28B)


Sep 30, 2014

1 (b) Terms / rights attached to equity shares :

The Company has only one class of Equity Shares having a par value of Rs. 5/- per share. Equity Shares are parri passu in all respect and each equity shareholder is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend, as and when proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting except in case of interim dividend.

In the event of Liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2 (a) Rupee Term Loan from Axis Bank Ltd.

Loan from Axis Bank was secured by first charge on the movable and immovable assets of Wind Mill Project located at village Boposhi and Maloshi, Dt. Satara.

Repaid during the year on completion of 36 months from the date of first disbursement i.e. from 28 July, 2011 and Interest paid at Base rate 4.25% p.a., Charge satisfied.

3 (b) Rupee Term Loan from HDFC Ltd.

Above loan from HDFC Ltd is secured by : Corporate Guarantee issued by KSL Holdings Private Limited, Bullet repayment on completion of 24 months from the date of first disbursement i.e. from 25 March, 2014. Interest is linked to HDFC Ltd''s Corporate Prime Lending Rate. Present Rate of interest is 13.5% payable quarterly.

4 (c) Sales Tax deferral

Balance outstanding Rs. 615,101,574 (Previous year 707,609,064)

Repayable 1/5th of amount every year after 10 years of the benefit availed.

5 (a) As required by and in accordance with Accounting Standard 22 - ''Taxes on Income'' prescribed by Companies (Accounting Standards) Rules, 2006, as amended the Company recognises Deferred Tax which result from timing differences after ignoring Deferred Tax adjustments originating and reversing during the tax holiday period. The Deferred tax adjustments reversing outside the Tax holiday period have been recomputed consequent to the company''s claim of determining the Tax holiday period with reference to the date of each phase of implementation as against the earlier intended period with reference to a single date of implementation for the Wind power generation business.

Particulars of Contingent liabilities As at 30th As at 30th September 2014 September 2013 Rupees Rupees

6. Contingent Liabilities not provided for in respect of

a) Claims against the Company not acknowledged as debt. 106,592,832 59,858,522

b) Guarantee given by the Company on behalf of other 300,000,000 300,000,000

Company (See Note No 28)

7. Commitments:

A. The Company as a Promoter of Nandi Economic Corridor Enterprises Ltd (NECE) has given an undertaking to Infrastructure Development Finance Co. Ltd (IDFC) in connection with the loan of Rs. 13,200 million (previous year Rs. 13,200 million) advanced to NECE by IDFC, whereby the company has undertaken to ensure continuance of the project undertaken by NECE, continued Promoters contributions as per the Financial plan, with adequate technical, financial and managerial support at the least untill the final settlement date.

Further the Company has committed to meet the shortfall in resources of NECE by way of Promoters contribution in terms of the Financing Plan which can be in the form of Equity / Preference Share Capital and / or granting of interest free unsecured loan untill the final settlement date, which together with current contributions would be subordinate to the funds borrowed from IDFC and shall not be repaid until the final settlement date. The Company has further agreed to ensure that the Borrower adheres to the land sale / Development Plan as mentioned in the Common Loan Agreement.

B. The Company, as a promoter and indirect holding company of Nandi Economic Corridor Enterprises Ltd. (NECE) has signed definitive agreements on 24th December 2010, in relation to foreign direct investment of Rs. 5,000 Million in NECE.

Pursuant to these definitive agreements, NECE has allotted convertible "Securities" to AIRRO (Mauritius) Holdings V (Investor), on the terms and conditions contained in the definitive agreements, whereby the investor would get a shareholding between 8.33% and 16.29% in NECE.

8. The Company has given security to Axis Bank Limited to the extent of Rs. 300 Million for securing the term loan facility granted by it to Nandi Highway Developers Limited (a subsidiary of the Company) by way of hypothecation of movable assets and equitable mortgage of fixed assets pertaining to Wind Mill project of the Company located in village Boposhi and Maloshi, Dist Satara.

9. Segment information as required by Accounting Standard 17 "Segment Reporting" as prescribed by Companies (Accounting Standards) Rules 2006, as amended is set out in a separate statement annexed thereto.

10. Related party disclosures have been set out in a separate statement annexed to this schedule. The related parties, as defined by Accounting Standard 18'' Related Party Disclosures'' prescribed by Companies (Accounting Standards) Rules, 2006, in respect of which the disclosures have been made, have been identified and taken on record by the Board.

Nature of Provisions

A. In terms of various notifications / circulars issued by Government of Maharashtra, electricity duty is payable in respect of wind power sold to third parties. However in absence of clarity on the entire subject and also in view of various other issues the Company as a matter of prudence and without prejudice to dispute the claim, has made a provision for Electricity duty.

B. All the Wind Power Projects have completed the tenure of wheeling agreement with the distribution licensee viz. Maharashtra State Electricity Distribution Company Limited (MSEDCL). All the projects of wheeling energy are under the open access provisions issued by the Hon'' able Maharashtra Electricity Regulatory Commission (MERC). As a matter of prudence and without prejudice the Company has made a provision for wheeling and Transmission charges under open access.

Expected timing of resulting outflow:

A. Since the matter is yet to be resolved / clarified in respect of applicability of Electricity duty for Wind Power Generation, the timing of outflow cannot be determined up to December 2011. However, the Company is paying the duty regularly since January 2012.

B. Short Term Loans & Advances includes Wheeling and Transmission charges of Rs. 77,641,966/- (P.Y. Rs. 71,970,241/-) have been paid to the distribution licensee under protest, as the matter is pending in appeal with the MERC.

11. Liability for employee benefit has been determined by an actuary, appointed for the purpose, in conformity with the principles set out in the Accounting Standard - 15 (Revised) Employee Benefit, prescribed by Companies (Accounting Standards) Rules, 2006, as amended the details of which are as hereunder:

C Provident Fund

The Provident Fund contribution is made to BFUL Staff Provident Fund Trust. In terms of guidance note issued by the Institute of Actuaries of India, the actuary has provided a valuation of Provident Fund Liability based on assumptions listed below. The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are

12. Advance for purchase of land is given to Nandi Economic Corridor Enterprises Limited (NECE), Subsidiary Company. Land is yet to be transferred in the name of the Company.

13. Certain litigations by and against the Company and subsidiaries of the Company are pending in various courts and the matter is subjudice. No cognizance thereof is taken in the preparation of financial statement, pending final outcome of the cases.

14. Disclosures required as per Clause 32 of the Listing Agreement have been set out in a separate statement annexed hereto.

15. The Company is required to apply for Open Access Permission to Maharashtra State Electricity Distribution Co. Ltd., (MSEDCL) every financial year. Upon receipt of the Open Access Permission, the credit notes are issued by MSEDCL for power generated at the Company''s Wind Farm at Satara which are subsequently adjusted in the power bill of the customer in Pune.

The Company has applied for Open Access Permission to MSEDCL for the financial year 1st April 2014 to 31st March, 2015 well in time. However, due to certain policy issues at MSEDCL, it has still not granted Open Access Permission to the Company for FY 2014-15. Consequently credit notes for the period starting from 1st April, 2014 are awaited.

Pending issuance of these credit notes and based on earlier years experience, the Company has recognized revenue from power generation during 1st April, 2014 to 30th September, 2014 at the average power tariff rate of the previous year.

In the event of non-receipt of the Open Access Permission and consequent sale of power to MSEDCL, as per case no. 58 of 2008 issued by MSEDCL, the profits of the Company for the accounting year ended 30th September, 2014 would be lower by about Rs. 34.69 Million net of tax.

16. Nandi Infrastructure Corridor Enterprises Ltd. (NICE) and Nandi Economic Corridor Enterprises Ltd. (NECE), which are the subsidiaries of the Company, have obtained extension of time u/s 96 of the Companies Act, 2013 from Registrar of Companies, Bangalore Karnataka.

The Company will prepare consolidated financials, once the audited accounts of both the above mentioned subsidiaries are made available to the Company.

17. Diminution other than temporary, if any, in the value of investment in Nandi Infrastructure Corridor Enterprise Ltd (NICE) and Nandi Economic Corridor Enterprise Ltd (NECE) could not be tested due to non-availability of accounts of NICE and NECE for the financial year ended 31st March, 2014, as explained in Note no. 38. The Company has recorded these investments at cost as on 30th September, 2014.

18. The Company has reclassified previous figures to confirm to this year''s classification.


Sep 30, 2013

1 (b) Terms / rights attached to equity shares :

The Company has only one class of Equity Shares having a par value of Rs. 5/- per share. Equity Shares are parri passu in all respect and each equity shareholder is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend, as and when proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting except in case of interim dividend.

In the event of Liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2 (a) Rupee Term Loan from Axis Bank Ltd.

Above loan from Axis Bank is secured by first charge on the movable and immovable assets of Wind Mill Project located at village Boposhi and Maloshi, Dt. Satara.

Bullet repayment on completion of 36 months from the date of first disbursement i.e. from 28 July, 2011 and Interest payable at Base rate 4.25% p.a., payable monthly.

3 (b) Sales Tax deferral

Balance outstanding Rs. 707,609,062 (Previous year 774,837,571)

Repayable 1/5th of amount every year after 10 years of the benefit availed.

4 (a) As required by and in accordance with Accounting Standard 22 - ''Taxes on Income'' prescribed by Companies (Accounting Standards) Rules, 2006, as amended the Company recognises Deferred Tax which result from timing differences after ignoring Deferred Tax adjustments originating and reversing during the tax holiday period. The Deferred tax adjustments reversing outside the Tax holiday period have been recomputed consequent to the company''s claim of determining the Tax holiday period with reference to the date of each phase of implementation as against the earlier intended period with reference to a single date of implementation for the Wind power generation business.

Particulars of Contingent liabilities As at 30th As at 30th September 2013 September 2012 Rupees Rupees

5. Contingent Liabilities not provided for in respect of

a) Claims against the Company not acknowledged as debt. 59,858,522 59,858,522

b) Guarantee given by the Company on behalf of 300,000,000 300,000,000 other Company (See Note No 28)

6. Commitments:

A. The Company as a Promoter of Nandi Economic Corridor Enterprises Ltd (NECE) has given an undertaking to Infrastructure Development Finance Co. Ltd ( IDFC) in connection with the loan of Rs. 13,200 million (previous year Rs. 13,200 million) advanced to NECE by IDFC, whereby the company has undertaken to ensure continuance of the project undertaken by NECE, continued Promoters contributions as per the Financial plan, with adequate technical, financial and managerial support at the least until the final settlement date.

Further the company has committed to meet the shortfall in resources of NECE by way of Promoters contribution in terms of the Financing Plan which can be in the form of Equity / Preference Share Capital and / or granting of interest free unsecured loan until the final settlement date, which together with current contributions would be subordinate to the funds borrowed from IDFC and shall not be repaid until the final settlement date. The company has further agreed to ensure that the Borrower adheres to the land sale / Development Plan as mentioned in the Common Loan Agreement.

B. The Company, as a promoter and indirect holding company of Nandi Economic Corridor Enterprises Ltd. (NECE) has signed definitive agreements on 24th December 2010, in relation to foreign direct investment of Rs. 500 crores in NECE.

Pursuant to these definitive agreements, NECE has allotted convertible "Securities" to AIRRO (Mauritius)Holdings V (Investor), on the terms and conditions contained in the definitive agreements, whereby the investor would get a shareholding between 8.33% and 16.29% in NECE.

7. The Company has given security to Axis Bank Limited to the extent of Rs. 30 Crores for securing the term loan facility granted by it to Nandi Highway Developers Limited (a subsidiary of the Company) by way of hypothecation of movable assets and equitable mortgage of fixed assets pertaining to Wind Mill project of the Company located in village Boposhi and Maloshi, Dist Satara.

8. Segment information based on Consolidated Financial Statements, as required by Accounting Standard 17 "Segment Reporting" as prescribed by Companies (Accounting Standards) Rules 2006, as amended is set out in a separate statement annexed thereto.

9. Related party disclosures have been set out in a separate statement annexed to this schedule. The related parties, as defined by Accounting Standard 18'' Related Party Disclosures'' prescribed by Companies (Accounting Standards) Rules, 2006, in respect of which the disclosures have been made, have been identified and taken on record by the Board.

Nature of Provisions

A. In terms of various notifications / circulars issued by Government of Maharashtra, electricity duty is payable in respect of wind power sold to third parties. However in absence of clarity on the entire subject and also in view of various other issues the Company as a matter of prudence and without prejudice to dispute the claim, has made a provision for Electricity duty.

B. All the Wind Power Projects have completed the tenure of wheeling agreement with the distribution licensee viz. Maharashtra State Electricity Distribution Company Limited (MSEDCL). All the projects of wheeling energy are under the open access provisions issued by the Hummable Maharashtra Electricity Regulatory Commission (MERC). As a matter of prudence and without prejudice the Company has made a provision for wheeling and Transmission charges under open access.

Expected timing of resulting outflow:

A. Since the matter is yet to be resolved / clarified in respect of applicability of Electricity duty for Wind Power Generation, the timing of outflow cannot be determined up to December 2011. However, the Company is paying the duty regularly since January 2012.

B. Short Term Loans & Advances includes Wheeling and Transmission charges of Rs. 71,970,241/- (P.Y. Rs. 52,956,810/-) have been paid to the distribution licensee under protest, as the matter is pending in appeal with the MERC.

10. Advance for purchase of land is given to Nandi Economic Corridor Enterprises Limited (NECE), Subsidiary Company. Land is yet to be transferred in the name of the Company.

11. Till the accounting year ended 30th September, 2012, the Company accounted for the income from Carbon Credits (CERs) and Renewable Energy Certificates (RECs) in the year in which it was entitled to receive the CERs and RECs. Consequent to the Guidance Note issued by ICAI on the accounting of CERs and RECs, which is effective from the accounting year commencing on or after 1st April, 2012, the income from CERs and RECs is to be recognized in the year of its actual sales. Necessary written off adjustments have been made in the accounts to give effect to the aforesaid Guidance Note.

12. Disclosures required as per Clause 32 of the Listing Agreement have been set out in a separate statement annexed hereto.

13. The Company has reclassified previous figures to confirm to this year''s classification.


Sep 30, 2012

Basis of Preparation

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 1956.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year except further change in accounting policy as explained below:

During the year ended September 30, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company, for preparation and presentation of its financial statements.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on nature of business and activities carried out by the Company, time between acquisition of assets and their realisation in cash and cash equivalent, the Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities.

1 (a) Terms / rights attached to equity shares :

The Company has only one class of Equity Shares having a par value of Rs. 5/- per share. Equity Shares are parri passu in all respect and each equity shareholder is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend, as and when proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting except in case of interim dividend.

In the event of Liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2 (a) Rupee Term Loan from Axis Bank Ltd.

Balance outstanding Rs. 200,000,000 (Previous year Rs. 200,000,000)

Above loan is secured by first charge on the movable and immovable assets of Wind Mill Project located at village Boposhi and Maloshi, Dt. Satara.

Bullet repayment on completion of 36 months from the date of first disbursement i.e from 28 July, 2011 and interest of Base rate 4.25% p.a., payable monthly.

3 (a) Sales Tax deferral

Balance outstanding Rs. 774,837,571 (Previous year Rs. 820,787,101) Repayable 1/5th of amount every year after 10 year of the benefit availed.

4 (a) As required by and in accordance with Accounting Standard 22 - ''Taxes on Income'' prescribed by Companies (Accounting Standards) Amendment Rules, 2006, the Company recognises Deferred Tax which result from timing differences after ignoring Deferred Tax adjustments originating and reversing during the tax holiday period. The Deferred tax adjustments reversing outside the Tax holiday period have been recomputed consequent to the company''s claim of determining the Tax holiday period with reference to the date of each phase of implementation as against the earlier intended period with reference to a single date of implementation for the Wind Power generation business.

Note :

On the basis of information available with the Company, regarding the status of suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006", there are no suppliers covered under above mentioned Act.

Particulars of Contingent liabilities As at 30th As at 30th September 2012 September 2011 Rupees Rupees

5. Contingent Liabilities not provided for in respect of

a) Claims against the Company not acknowledged as debt. 59,858,522 59,858,522

b) Guarantee given by the Company on behalf of 300,000,000 300,000,000 other Company ( See Note No 28)

6. Commitments:

A. The Company as a Promoter of Nandi Economic Corridor Enterprises Ltd (NECE) has given an undertaking to Infrastructure Development Finance Co. Ltd ( IDFC) in connection with the loan of Rs. 13,200 million (previous year Rs. 13,200 million) advanced to NECE by IDFC, whereby the company has undertaken to ensure continuance of the project undertaken by NECE, continued Promoters contributions as per the Financial plan, with adequate technical, financial and managerial support at the least untill the final settlement date.

Further the company has committed to meet the shortfall in resources of NECE by way of Promoters contribution in terms of the Financing Plan which can be in the form of Equity / Preference Share Capital and / or granting of interest free unsecured loan untill the final settlement date, which together with current contributions would be subordinate to the funds borrowed from IDFC and shall not be repaid until the final settlement date. The company has further agreed to ensure that the Borrower adheres to the land sale / Development Plan as mentioned in the Common Loan Agreement.

B. The Company, as a promoter and indirect holding company of Nandi Economic Corridor Enterprises Ltd. (NECE) has signed definitive agreements on 24th December 2010, in relation to foreign direct investment of Rs. 500 crores in NECE.

Pursuant to these definitive agreements, NECE has allotted convertible "Securities"to AIRRO (Mauritius) Holdings V (Investor), on the terms and conditions contained in the definitive agreements, whereby the investor would get a shareholding between 8.33% and 16.29% in NECE.

7. The Company has given security to Axis Bank Limited to the extent of Rs. 30 Crores for securing the term loan facility granted by it to Nandi Highway Developers Limited (a subsidiary of the Company) by way of hypothecation of movable assets and equitable mortgage of fixed assets pertaining to Wind Mill project of the Company located in village Boposhi and Maloshi, Dist Satara.

8. Segment information based on Consolidated Financial Statements, as required by Accounting Standard 17 "Segment Reporting"as prescribed by Companies (Accounting Standards) Rules 2006 is set out in a separate statement annexed thereto.

9. Related party disclosures have been set out in a separate statement annexed to this schedule. The related parties, as defined by Accounting Standard 18'' Related Party Disclosures'' prescribed by Companies (Accounting Standards) Rules, 2006, in respect of which the disclosures have been made, have been identified and taken on record by the Board.

10. Consequent to completion of the renewal of registration of the wind power generation project as a Clean Development Mechanism (CDM) project with UNFCCC, the Company has accrued income in respect of Certified Emission Reduction (CER) units, which are to be received on completion of further formalities. Income accrued for the year is Rs.2,540,566/- (Previous year Rs. 19,713,473/-). After considering the CER received during the current year and the exchange rate fluctuations, CERs Written off of Rs. 17,938,606/- (Previous year Rs. 9,440,565/-). Income receivable as at 30th September 2012 amounts to Rs 9,863,404/- (Previous year Rs. 25,026,399/-).

Nature of Provisions

A. In terms of various notifications / circulars issued by Government of Maharashtra, electricity duty is payable in respect of wind power sold to third parties. However in absence of clarity on the entire subject and also in view of various other issues the Company as a matter of prudence and without prejudice to dispute the claim, has made a provision for Electricity duty.

B. All the Wind Power Projects have completed the tenure of wheeling agreement with the distribution licensee viz. Maharashtra State Electricity Distribution Company Limited (MSEDCL). All the projects of wheeling energy are under the open access provisions issued by the Hon'' able Maharashtra Electricity Regulatory Commission (MERC). As a matter of prudence and without prejudice the Company has made a provision for wheeling and Transmission charges under open access.

Expected timing of resulting outflow:

A. Since the matter is yet to be resolved / clarified in respect of applicability of Electricity duty for Wind Power Generation, the timing of outflow can not be determined.

B. Short Term Loans & Advances includes Wheeling and Transmission charges of Rs. 52,956,811/- have been paid to the distribution licensee under protest, as the matter is pending in appeal with the MERC.

11. Liability for employee benefit has been determined by an actuary, appointed for the purpose, in conformity with the principles set out in the Accounting Standard - 15 (Revised) Employee Benefit, prescribed by Companies (Accounting Standards) Rules, 2006 the details of which are as hereunder:

12. Advance for purchase of land is given to Nandi Economic Corridor Enterprises Limited (NECE), Subsidiary Company. Land is yet to be transferred in the name of the Company.

13. During the accounting year 2010-11, the Company registered its 18.33 MW Wind Power project located in Satara District, as an eligible project for issuance of Renewable Energy Certificates (RECs). The Company had filed necessary applications for issuance of RECs with respect to Wind Power generated subsequent to such registration. The Company, during the year accrued 55,091 RECs of which 43,310 REC''s were sold on Indian Energy Exchange.

14. Disclosures required as per Clause 32 of the Listing Agreement have been set out in a separate statement annexed hereto.

15. The financial statement for the year ended 30 September, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification issued by Ministry of Company Affairs dated 28 February, 2011; the financial statements for the year ended 30 September, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year''s classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.


Sep 30, 2009

1 The High Court of Judicature at Bombay has passed an Order on 5th February, 2010, approving the Scheme of Arrangement between Bhalchandra Investment Limited, Forge Investment Limited, Mundhwa Investment Limited, Jalakumbhi Investment and Finance Limited, Jalakamal Investment and Finance Limited, Kalyani Utilities Development Limited, (collectively called "the Amalgamating Companies"), BF Utilities Limited ("Amalgamated Company" / "Demerged Company") and BF Investment Limited ("Resulting Company") and their Respective Shareholders ("Scheme").

The Appointed Date of the Scheme is 1 st April, 2009 and the Effective Date of the Scheme is 26th February, 2010.

Upon the coming into effect of this Scheme and with effect from the Appointed Date, the Undertaking of each of the Amalgamating Companies have, been transferred to and vested in the Company (Amalgamated Company) as a going concern. Thereafter with effect from the Appointed Date the Demerged Undertaking i.e. the Investment Business Undertaking of the Company (Demerged Company) has also been transferred to and vested in the Resulting Company on a going concern basis.

The Board of Directors of the Company in their meeting held on 29th December, 2009 had approved the Financial Statements for the year ended 30th September, 2009. The auditors had submitted their report dated 29th December, 2009 on the same. The financial results based on these approved Financial Statements were submitted to Stock Exchanges as per Clause 41 of the Listing Agreement with Stock Exchanges.

The effectiveness of the Scheme of Arrangement being a material event, the Company has revised the Financial Statements for the year ended 30th September, 2009 which were earlier approved by the Board on 29th December, 2009, but pending approval of the Shareholders in the ensuing Annual General Meeting for giving effects to various transfers emanating from the Scheme. The Company has, therefore, surrendered the signed sets of profit and loss account and cash flow statement for the year ended 30th September, 2009 and the balance sheet as on that date together with the auditors report as explained above to the auditors to enable them to issue their Revised Audit Report on the Revised Financial Statements.

The Company had sought extension of time for holding the Annual General Meeting for adoption of the Financial Statements for the year ended 30th September, 2009. The Registrar of Companies, Pune vide his letter dated 24th February, 2010 has granted extension of time of three months ( i.e. upto 30th June, 2010 ) for holding the Annual General Meeting.

The revised Financial Statements for the year ended 30th September, 2009 have been prepared after giving effects of the Scheme in the appropriate account heads in the books of account of the Company, which are summarized as under:

D. Details of Fund Flows of the Investment Business Undertaking during April 2009 to September 2009, resulting from operations of Investment Business Undertaking held and carried on in trust by BF Utilities Limited and the Amalgamating Companies for BF Investment Limited resulting to an amount payable to the latter aggregating to a Rs.156 103 081/-.

2. In view of the revision to the Financial Statements to give effect to the Schemeof Arrangement detailed in Note No. 1 above, disclosure in notes hereinafter have also been suitably amended and / or revised.

As at 30th As at 30th September 2009 September 2008 Rupees Rupees

3 Contingent Liabilities not provided for in respect of

a) Claims against the Company not acknowledged as debt. 18 656 449 --

b) See Note 6 Below

4 The Company has entered into a Put Option Agreement dated 29/9/2008 and Call Option Agreement dated 1/10/2008 with Axis Bank Limited in respect of Rs. 175 Crores Non Convertible Debentures issued by Nandi Economic Corridor Enterprises Limited (NECE) to Axis Bank Limited (Debentures).

Under the said Put Option Agreement, Axis Bank has the option to call upon the Company to buy the Debentures at Put Exercise Price at the end of 3rd, 4th and 5th year from the issue of Debentures or at anytime in the event of any default by NECE. Similar Call option is vested with the Company.

5 (i) Term Loan from Industrial Development Bank Of India Limited, is secured by first charge by way of hypothecation of receivables, both present and future from sale of power/electricity and sale assignment of Sales Tax benefit pertaining to the Wind Mill Project at village Boposhi, Maloshi and Kadave Khurd, Dt. Satara, the amount lying in cash Collateral account and stock, book debts, machinery etc. pertaining to the above Wind Mill Project. Secured by first charge by way of mortgage of land and building at village Boposhi,Maloshi and Kadave Khurd, Dt. Satara. pertaining to the above Wind Mill Project.

(ii) Term Loan from Citicorp Finance (India) Limited, was secured against pledge of shares held by Subsidiary Companies, repaid during the year, charge satisfied.

(iii) Term Loan from Axis Bank Limited, is secured by second charge on the movable and immovable assets of Wind Mill Project located at village Boposhi and Maloshi, Dt. Satara.

6 Segment information, based on the revised consolidated financial statements of the Company and its Subsidiaries is set out in a separate statement annexed to the schedule.

7 Related party disclosures have been set out in a separate statement annexed to this schedule. The related parties, as defined by Accounting Standard 18 Related Party Disclosure prescribed by Companies (Accounting Standards) Amendment Rules, 2006, in respect of which the disclosures have been made, have been identified and taken on record by the Board.

8 Consequent to completion of the renewal of registration of the wind power generation project as a Clean Development Mechanism (CDM) project with UNFCCC, the Company has accrued income in respect of Certified Emission Reduction (CER) units, which are to be received on completion of further formalities, amounting to Rs. 1 2 862 491 /- on account of reasonable certainty of their receipt. Income receivable as at 30/09/2009 amounts to Rs 25 811 229/-.

9 The disclosures required by Accounting Standard 29 "Provision, Contingent Liabilities, Contingent Assets" prescribed by Companies (Accounting Standards) Amendment Rules, 2006 are as follows.

Nature of Provisions

A. In terms of various notifications / circulars issued by Government of Maharashtra, electricity duty is payable in respect of wind power sold to third parties. However in absence of clarity on the entire subject and also in view of various other issues the Company as a matter of prudence and without prejudice has made a provision for Electricity duty.

B. All the Wind Power Projects have completed the tenure of wheeling agreement with the distribution licensee viz. Maharashtra State Electricity Distribution Company Limited (MSEDCL). All the projects of wheeling energy are under the open access provisions issued by the Hon able Maharashtra Electricity Regulatory Commission (MERC). As a matter of prudence and with out prejudice the Company has made a provision for wheeling and Transmission charges under open access.

Expected timing of resulting outflow:

A. Since the matter is yet to be resolved / clarified in respect of applicability of Electricity duty for Wind Power Generation, the timing of outflow can not be determined.

B, Wheeling and Tranmission charges have been paid to the distribution licensee under protest (included under Advances recoverable in Cash or in Kind) as the matter is pending in appeal with the MERC.

10. In the basis of information available with the Company, regarding the status of suppliers as defined under the "Micro Small and Medium Enterprises Development Act 2006", there are no suppliers covered under above mentioned Act and hence the question of provision or payment of interest and related disclosures under the said Act does not arise.

11. Miscellaneous Income includes Rs. 8,100,000/- on account of doubtful advances written off in earlier years, now recovered.

12. Information required in terms of Part IV of Sechdule VI to the Companies Act, 1956 is attached.

13. Significant accounting policies followed by the Company are as stated in the statement annexed to this schedule.

14. Disclosures required as per Clause 32 of the Listing Agreement have been set out in a separate statement annexed hereto.

15. Current years figures are not comparable with that of the previous year due to the effect of the "Composite scheme of arrangement" as detailed in the note no. 1 above.