BF Utilities Ltd Directors Report.

To, The Members,

Your Directors have pleasure in presenting their Eighteenth Annual Report on the business and operations of the Company together with Audited Statement of Accounts for the year ended 31st March, 2018.

1 . FINANCIAL PERFORMANCE :

(Rs. in Million)

Particulars Standalone
Financial Year 2017-18 Financial Year 2016-17
Total Income 329.44 253.74
Total Expenditure 187.00 171.21
Profit for the year before taxation 142.44 82.53
Provision for tax (including Deferred Tax) (12.67) 9.25
Profit for the year before taxation 155.11 73.28
Adjustments / Excess / (short) for taxation and tax payments 3.11 (0.26)
Profit attributable to Equity holder 158.22 73.02
Items of other comprehensive income (net of Tax) 1.19 1.00
Total 159.41 74.02
Balance of profit / (Loss) from previous year 661.35 587.33
Balance available for appropriation 820.76 661.35
Appropriations - -
Surplus retained in statement of profit and loss 820.76 661.35

2 . SHARE CAPITAL

The paid-up Equity Share Capital as on 31st March, 2018 stood at Rs.188.34 Million. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on 31st March, 2018, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

3 . DIVIDEND

Your Directors do not recommend any dividend on the equity shares for the year ended 31st March, 2018.

4 . MANAGEMENT DISCUSSION AND ANALYSIS

International Scenario :

The overall capacity of all wind turbines installed worldwide by the end of 2017 reached 539,291 Megawatt, according to preliminary statistics published by WWEA. 52,552 Megawatt were added in the year 2017, slightly more than in 2016 when 51,402 Megawatt went online. This is the third largest number ever installed within one year, after the record years 2015 and 2014. However, the annual growth rate of only 10.80% is the lowest growth ever since the industrial deployment of wind turbines started end of the 20th century.

All wind turbines installed by end of 2017 can cover more than 5% of the global electricity demand. For many countries, wind power has become a pillar in their strategies to phase out fossil and nuclear energy. In 2017, Denmark set a new world record with 43% of its power coming from wind. An increasing number of countries have reached a double-digit wind power share, including Germany, Ireland, Portugal, Spain, Sweden or Uruguay.

Domestic Scenario :

The government, in its latest budget announcement reduced the AD from 80% to 40%. Furthermore, the GBI could come to an end at the end of the financial year. These two factors contributed to a rush of installations at the end of the fiscal year. However, the first auctions for wind power were held in early 2018 successfully. We expect installations during 2018 to reach approximately 5,000 MW. A further 4-5 GW tender is expected during 2018, a positive step towards reaching the 2022 target of 60 GW.

Companys Performance :

The Company has taken necessary steps to partially restore wind farm operations.

During the year, sale of RECs generated by the projects has helped your company earn additional revenue.

5 . COMPANY PERFORMANCE

During the Financial Year under review, your Company earned total income of Rs.32.94 Crores (previous years Rs.25.37 Crores). The net Profit after tax is Rs.15.51 Crores (previous years profit of Rs.7.33 Crores).

6 . OPERATIONS OF THE COMPANY

The operations at Wind Farm site were affected due to disputes with service provider. The management has operationalised part of the wind farm with the help of other service provider. Despite such problems, the Company was able to generate 12.46 Million (Net) Units of power.

7 . HUMAN RESOURCES

As on 31st March, 2018, the Company has 9 employees. The relations with Companys employees are cordial.

8 . CONCERNS AND THREATS

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

The Company depends on the service provider for operations and maintenance of Wind Turbines. Certain litigations against the service providers are pending before the judicial / quasi judicial authorities. Unfavourable outcome of these litigations or disputes with service provider will adversely affect our operations.

9 . INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

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

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

10. CAUTIONARY STATEMENT

Statements in this Report, particularly those which relate to Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.

11. SUBSIDIARY COMPANIES

The Company has four subsidiary companies as on 31st March, 2018.

The details are given in Annexure I

12. PARTICULARS OF INFORMATION FORMING

PART OF THE BOARDS REPORT PURSUANT TO SECTION 134 OF THE COMPANIES ACT, 2013, RULE 8 OF THE COMPANIES (ACCOUNTS) RULES, 2014 AND RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) 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 annexed herewith as

Annexure III to this Report.

14. NUMBER OF MEETINGS OF THE BOARD

During the year under review, five Board Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the Securities Exchange Board of India (Listing

Obligations & Disclosure Requirements), Regulations 2015 hereinafter called "Regulations, 2015".

15. DIRECTORS RESPONSIBILITY STATEMENT

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

a) in the preparation of the Annual Financial Statements for the year ended 31st March 2018, the applicable accounting standards have been followed along with the proper explanation relating to material departures;

b) accounting policies as mentioned in Note - 1 to the Financial Statements have been selected and applied consistently. Further judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the profit of the Company for the year ended on that date;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets 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 controls were adequate and were operating effectively; and

f) proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

16. A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulations 2015.

17. COMPANYS POLICY ON DIRECTORS AND KMPS APPOINTMENT AND REMUNERATION

Directors appointment and remuneration is done as per the policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Personnel and their remuneration. The policy is appended as Annexure IV to this Report.

18. 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 2018-19.

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 has appointed M/s. SVD & Associates, Company Secretaries, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit 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 31st March, 2018 are enclosed. this Report.

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

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Joshi Apte & Co., Statutory Auditors, in their Audit Report on standalone accounts. M/s. SVD & Associates, Practicing Company Secretary, in their Secretarial Audit Report have made certain qualifications. The auditors qualifications and Boards explanation thereto are summarized as under:

20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT UNDER SECTION 186

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

21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-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 arrangements entered into by the Company with Related Parties have been done at arms length and are in the 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 to Note No.26 to the Financial Statements.

22. STATE OF COMPANYS AFFAIRS

Discussion on state of Companys affairs has been covered in the Management Discussion and Analysis.

23. AMOUNTS PROPOSED TO BE CARRIED TO RESERVES

Particulars of the amounts proposed to be carried to reserves have been covered as part of 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 of the Company which have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of the report, except as disclosed elsewhere 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, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are annexed herewith as Annexure VII to this report.

26. RISK MANAGEMENT POLICY

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the 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 in accordance with Section 135 of the Companies Act, 2013. The details of the CSR Policy and initiatives 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 Regulations 2015, the Board has carried out evaluation of its own performance and that of its Committees 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 under review.

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. A. B. Kalyani Director Re-appointed with effect from 6th November, 2017, subject to retirement by rotation

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under sub section (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 KMPs resigned during the year

None of the Directors and KMPs resigned during the year ended 31st March, 2018.

34. Directors proposed to be appointed and reappointed at the ensuing Annual General Meeting

1) Mr. B. N. Kalyani (DIN : 00089380) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.

2) Mr. S. K. Adivarekar (DIN : 06928271) was appointed as Independent Director by the Board on 30th May, 2018, subject to the approval of members in the ensuing Annual General Meeting. A resolution to consider and approve his appointment is included in the Notice of 18th Annual General Meeting.

3) Mr. B. B. Hattarki (DIN : 00145710) has completed the age of 75 years. As per Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 members approval is sought for his reappointment by way special resolution in the 18th Annual General Meeting.

The brief resumes and other details relating to Directors who are proposed to be re-appointed, as required to be disclosed under Regulations 2015, form part of the Notes and Statement setting out material facts annexed to the Notice of the Annual General Meeting.

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 CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

The Company has neither received nor is aware of any such order from Regulators, Courts or 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 and balances, policies and procedures. This includes code of conduct, whistle blower policy, MIS and internal audit mechanism.

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

39. COMPOSITION OF AUDIT COMMITTEE

The composition of the Audit Committee has been mentioned in the Corporate Governance Report 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 persons dealing with the Company to report to the Chairman of the Audit Committee; any instance of unethical behavior, actual or suspected fraud or violation of the Companys code of conduct. The aforesaid policy has also been uploaded on the Companys website.

41. CASH FLOW

A Cash Flow Statement for the year ended 31st March 2018 is attached to the Balance Sheet.

42. CORPORATE GOVERNANCE

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

43. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

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

44. ACKNOWLEDGMENTS

Your Directors wish to place on record, their appreciation for the contribution made and support provided to the Company by the shareholders, employees and bankers, during the year 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
20th July, 2018 DIN:00145710 DIN:00089430