BF UTILITIES Accounting Policy

1 A. Corporate Information:

BF Utilities Ltd. ("the Company" or "BFUL") is a public company
domiciled in India and incorporated on 15 September,2000 under the
provisions of the Companies Act,1956 ("the Act"). Its shares are listed
on National stock exchange and Bombay stock exchange in India. The
Company is engaged in the generation of electricity through wind mills.
The Company''s CIN is L40108PN2000PLC015323.

1 B. Basis of preparation:

The financial statements of the Company for the year ended 30
September, 2015 have been prepared in accordance with generally
accepted accounting principles in India (Indian GAAP) to comply in all
material respects with the Accounting Standards specified under Section
133 of the Companies Act, 2013, read with the Rule 7 of the Companies
(Accounts) Rules, 2014 and the relevant provisions of the Companies
Act, 2013. These financial statements are prepared on an accrual basis
and under the historical cost convention except financial instruments
which have been measured at fair value. The accounting policies are
consistently applied by the Company during the year and are consistent
with those used in previous year.

1 C. Summary of significant accounting policies:

a) Use of estimates:

The preparation of the financial statements is in conformity with
Indian GAAP and requires the management to make judgments, estimates and
assumptions that affect the reported amounts of revenue, expenses,
assets and liabilities and disclosure of contingent liabilities at the
end of reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.

b) Tangible fixed assets:

Tangible fixed assets are stated at cost, less accumulated depreciation
and accumulated impairment losses, if any. The cost comprises the
purchase price and directly attributable costs of bringing the asset to
its working condition for its intended use. Any trade discounts and
rebates are deducted in arriving at the purchase price. The Company has
adopted the provisions of para 46A of AS 11 "The Effects of Changes in
Foreign Exchange Rates", accordingly, exchange difference arising on
settlement of long term foreign currency borrowing relating to
acquisition of depreciable fixed assets are adjusted to the cost of the
respective assets and depreciated over the remaining useful life of
such assets. Capital work-in-progress includes cost of fixed assets
that are not ready to be put to use.

Subsequent expenditure related to an item of fixed asset is added to
its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.
All other expenses on existing fixed assets, including day-to-day
repair and maintenance expenditure and cost of replacing parts, are
charged to the statement of profit and loss for the year during which
such expenses are incurred.

Gains or losses arising from disposal of fixed assets are measured as
the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the statement of profit and
loss when the asset is disposed.

Expenditure on New Projects and Expenditure during Construction etc. :

In case of new projects or expansion at the existing units of the
Company, expenditure incurred including interest and financing costs of
specific borrowings, prior to commencement of commercial production is
being capitalised to the cost of assets.

c) Intangible assets:

(i) Acquired intangible assets

Intangible assets acquired separately are measured on the initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated amortization and accumulated
impairment losses, if any. Cost comprises the purchase price and any
attributable cost of bringing the assets to its working condition for
its intended use.

Gains or losses arising from disposal of an intangible asset are
measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognized in the statement of
profit and loss when the asset is disposed.

(ii) Research and development cost

Research costs are expensed as incurred. Development expenditure
incurred on an individual project is recognized as an intangible asset
when the Company can demonstrate:

- technical feasibility of completing the intangible asset so that it
will be available for use or sale;

- its intention to complete the asset and use or sell it;

- its ability to use or sell the asset;

- how the asset will generate probable future economic benefits;

- the availability of adequate resources to complete the development
and to use or sell the asset;

- the ability to measure reliably the expenditure attributable to the
intangible asset during development.

Such capitalized expenditure is reflected as intangible under

d) Capital work-in-progress:

Projects under which assets are not ready for their intended use or
projects which are suspended during extended period in which active
development is interrupted and other capital work-in-progress are
carried at cost, comprising direct cost, related incidental expenses
and attributable /eligible interest.

e) Depreciation and amortization:

Depreciation on tangible fixed assets is provided using the Straight
Line Method (''SLM'') except in respect of Furniture & Fittings and
Vehicle is provided using Written Down Value (''WDV'') over the useful
lives of the assets estimated by the management.

Useful lives of the above assets are as per prescribed under Part C of
Schedule II of the Companies Act, 2013.

Individual assets whose cost does not exceed Rs. 5,000 are fully
depreciated in the year of acquisition.

Depreciation on additions to assets during the year is being provided
on pro-rate basis from the date of acquisition/ installation.

Depreciation on assets sold, discarded or demolished during the year,
is being provided at their respective rates on pro-rate basis upto the
date on which such assets are sold, discarded or demolished.

Intangible assets are amortized on a straight line basis over their
estimated useful lives commencing from the day the asset is made
available for use.

f) Impairment of tangible and intangible assets:

The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external

Recoverable amount of intangible under development that is not yet
available for use is estimated at least at each reporting period / year
end even if there is no indication that the asset is impaired.

An impairment loss is recognized wherever the carrying amount of an
asset exceeds its recoverable amount. The recoverable amount is the
greater of the asset''s net selling price and value in use. In assessing
value in use, the estimated future cash flows are discounted to their
present value using an appropriate discount factor that reflects
current market assessments of the time value of money and risks
specific to the asset.

When there is indication that an impairment loss recognised for an
asset in earlier accounting periods no longer exists or may have
decreased, such reversal of impairment loss is recognised in the
Statement of Profit and Loss, except in case of revalue assets.

g) Investments:

Investments which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.

On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties. Current investments are carried in
the financial statements at lower of cost and fair value, determined on
category of investment basis. Long- term investments presented in the
financial statements are carried at cost. However, provision for
diminution in value is made to recognize a decline, other than
temporary decline, in the value of investments.

On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.

h) Inventory:

Unsold Certified Emission Reduction (CER) and Renewable Energy
Certificate (REC) are considered as Inventory and valued on the basis
of costs which are directly allocated to it, as per guidance note
issued by ICAI dated 11 February 2012. The cost is assigned to
inventories on First in First Out (FIFO) basis. This CERs and RECs are
valued at lower of cost or net realisable value.

i) Cash and cash equivalents:

Cash and cash equivalents in the cash flow statement comprises of cash
at bank, cash in hand and short term deposits with an original maturity
period of three months or less.

j) Cash flow statement:

Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.

k) Borrowing Cost:

Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings.

Borrowing costs directly attributable to the acquisition, construction
or development of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the year they occur.

l) Leases:

(i) Where the Company as a less or,

Leased assets under finance leases, such amounts are recognised as
receivables at an amount equal to the net investment in the lease and
the finance income is recognised based on a constant rate of return on
the outstanding net investment. Leased assets under operating lease,
lease income from such lease is recognised in the statement of profit
and loss account on straight line basis over the lease term unless
another systematic basis is more representative of the time pattern in
which benefit derived from the use of leases asset is diminished.

(ii) Where the Company is the lessee,

Leases, where the less or effectively retains substantially all the
risks and benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognised as an expense
in the statement of profit and loss on a straight-line basis over the
lease term.

m) Revenue Recognition:

Revenue recognition is generally postponed if the receipt can not be
estimated with reasonable certainty.

(a) Income from Electricity generated is accounted on the basis of
electricity wheeled into MSEB grid and jointly certified.

(b) Interest is accrued over the period on the amount of

(c) Dividend is accrued in the year in which it is declared, whereby
right to receive is established.

(d) Profit/Loss on sale of investment is recognised on contract date.

(e) Income from Certified Emission Reduction (CERs) units and Renewable
Energy Certificates (RECs) is recognised in the year of its actual

n) Foreign currency transaction:

Foreign currency transactions and balances:

Initial recognition

Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the


Foreign currency monetary items are reported using the exchange rate
prevailing at the reporting date. Non-monetary items, which are
measured in terms of historical cost denominated in a foreign currency
are reported using the exchange rate at the date of the transaction.
Non-monetary items which are carried at fair value or other similar
valuation denominated in a foreign currency are reported using the
exchange rates at the date when the values were determined.

o) Retirement and other employee benefits:

(i) Provident fund

Eligible employees receive benefits from a provident fund, which is a
defined benefit plan. Both the employee and the Company make monthly
contributions to the provident fund plan equal to a specific percentage
of the covered employee''s salary. The Company contributes a part of the
contributions to the "BF Utilities Limited Staff Provident Fund Trust".
The rate at which the annual interest is payable to the beneficiaries
by the trust is being administered by the government. The Company has
an obligation to make good the shortfall, if any, between the return
from the investments of the trust and the notified interest rate. The
guidance note on implementation of AS- 15 (revised 2005) "Employee
Benefits", states that benefits involving employer established
provident funds, which requires interest shortfalls to be provided, are
to be considered as defined benefit plans.

(ii) Gratuity

Payment for present liability of future payment of gratuity is being
made to approved gratuity fund, which fully cover the same under cash
accumulation policy of the Life Insurance Corporation of India. The
employee''s gratuity is a defined benefit funded plan. The present value
of the obligation under such defined benefit plan is determined based
on the actuarial valuation using the Projected unit credit method as at
the date of the Balance Sheet and the shortfall in the fair value of
the Plan Assets is recognized as an obligation.

(iii) Superannuation

Retirement benefit in the form of superannuation plan is defined
contribution plan. Defined contribution to Life Insurance Corporation
of India for employees covered under Superannuation scheme are
accounted at the rate of 15% of such employee''s basic salary.

(iv) Privilege Leave Benefits

Accumulated leave, which is expected to be utilized within the next
twelve months, is treated as short-term employee benefit. The Company
measures the expected cost of such absences as the additional amount
that it expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.

The Company treats accumulated leave expected to be carried forward
beyond twelve months, as long-term employee benefit for measurement
purposes. Such long-term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
reporting date. Actuarial gains/losses are immediately taken to the
statement of profit and loss and are not deferred.

The Company presents the entire leave encashment liability as a current
liability in the balance sheet, to the extent it does not have an
unconditional right to defer its settlement for twelve months after the
reporting date. Where the Company has the unconditional legal and
contractual right to defer the settlement for a period beyond twelve
months, the same is presented as non-current liability.

p) Income taxes:

Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Income Tax Act, 1961 enacted in India and tax laws
prevailing in the respective tax jurisdictions where the Company
operates. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date.

Deferred income taxes reflect the impact of timing differences between
taxable income and accounting income originating during the current
reporting period and reversal of timing differences of earlier
reporting periods. Deferred tax is measured based on the tax rates and
the tax laws enacted or substantively enacted at the reporting date.

Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
differences only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realized. In situations where the Company
has unabsorbed depreciation or carry forward tax losses, all deferred
tax assets are recognized only if there is virtual certainty supported
by convincing evidence that they can be realized against future taxable

At each reporting date, the Company re-assesses unrecognized deferred
tax assets. It recognizes unrecognized deferred tax assets to the
extent that it has become reasonably certain or virtually certain, as
the case may be that sufficient future taxable income will be available
against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each
reporting date. The Company writes- down the carrying amount of a
deferred tax asset to the extent that it is no longer reasonably
certain or virtually certain, as the case may be, that sufficient
future taxable income will be available against which deferred tax
asset can be realized. Any such write-down is reversed to the extent
that it becomes reasonably certain or virtually certain, as the case
may be, that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset, if a
legally enforceable right exists to set off current tax assets against
current tax liabilities and the deferred tax assets and deferred tax
liabilities relate to the same taxable entity and the same taxation

Minimum alternate tax (MAT) paid in a year is charged to the statement
of profit and loss as current tax. MAT credit available is recognized
as an asset only to the extent that there is convincing evidence that
the Company will pay normal income tax during the period, i.e., the
period for which MAT credit is allowed to be carried forward. In the
year in which the Company recognizes MAT credit as an asset in
accordance with the Guidance Note on Accounting for Credit Available in
respect of Minimum Alternative Tax under the Income-tax Act, 1961, the
said asset is created by way of credit to the statement of profit and
loss and shown as ''MAT Credit Entitlement.'' The Company reviews the
''MAT credit entitlement'' asset at each reporting date and writes down
the asset to the extent the Company does not have convincing evidence
that it will pay normal tax during the specified period.

q) Provisions:

A provision is recognized when the Company has a present obligation as
a result of past event; it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation,
in respect of which a reliable estimate can be made. Provisions
(excluding retirement benefits) are not discounted to its present value
and are determined based on the best estimate required to settle the
obligation at the reporting date. These estimates are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.

r ) Earnings per share (EPS):

Basic earnings per share are calculated by dividing the net profit for
the year attributable to equity shareholders by weighted average number
of equity shares outstanding during the year. The weighted average
number of equity shares outstanding during the year is adjusted for
events such as bonus issue, bonus element in a rights issue, share
split, and reverse share split (consolidation of shares), if any,
occurred during the reporting period, that have changed the number of
equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net
profit for the year attributable to the equity shareholders and the
weighted average number of equity shares outstanding during the year,
are adjusted for the effects of all dilutive potential equity shares.

s ) Contingent liabilities:

A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the Company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The Company does not
recognize a contingent liability but discloses its existence in the
financial statements.

t ) Domestic transfer pricing:

The Company enters into ''domestic transactions'' with specified parties
that are subject to the Transfer Pricing regulations under the Income
Tax Act, 1961 (the ''Regulations''). The pricing of such domestic
transactions will need to comply with the arm''s length principle under
the Regulations. These Regulations, inter alia, also require the
maintenance of prescribed documents and information including
furnishing a report from an accountant which is to be filed with the
Income Tax authorities.

The Company has undertaken necessary steps to comply with the
Regulations. The Management is of the opinion that the domestic
transactions are at arm''s length and hence the aforesaid legislation
will not have any impact on the financial statements, particularly on
the amount of tax expense and that of provision for taxation.

u) Segment reporting:

The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the executive Management
in deciding how to allocate resources and in assessing performance.

The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company. Segment revenue, segment
expenses, segment assets and segment liabilities have been identified
to segments on the basis of their relationship to the operating
activities of the segment Inter- segment revenue is accounted on the
basis of transactions which are primarily determined based on market /
fair value factors.

Revenue, expenses, assets and liabilities which relate to the Company
as a whole and are not allocable to segments on reasonable basis have
been included under "unallocated revenue/ expenses/ assets/

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at

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