BF UTILITIES Directors Report

The Directors have pleasure in presenting their Fifteenth Annual
Report on the business and operations of the Company together with
Audited Statement of Accounts for the year ended 30th September, 2015.

1. FINANCIAL PERFORMANCE :

(Rs. in Millions)

Particulars Year ended Year ended
30th Sept., 30th Sept.,
2015 2014

Total Income 192.75 251.94

Total Expenditure 190.22 238.20

Profit before taxation 2.53 13.74

Exceptional Item : 40.40 0

sale of Investments

Provision for tax 2.33 0.83

(including Deferred Tax)

Net Profit 40.60 12.91

Adjustments relating 12.53 0
to earlier years :

Excess provision for
taxation and tax
payments

Balance of Profit/(Loss) 542.67 529.76
from previous year

Add Profit for the year 53.13 12.91

Balance available for 595.80 542.67
appropriation

Appropriations : NIL NIL

Balance carried to 595.80 542.67

Balance Sheet

2. DIVIDEND :

Your Directors do not recommend any dividend on the equity shares for
the year ended 30th September, 2015.

3. MANAGEMENT DISCUSSION AND ANALYSIS

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

4. COMPANY PERFORMANCE

During the Financial Year under review, your Company earned total
income of Rs.19.27 Crores (previous years Rs.25.19 Crores). The net
profit after tax is Rs.4.06 Crores (previous years Rs.1.29 Crores).

5. OPERATIONS OF THE COMPANY

The operations at Wind Farm site were affected due to labour problems
and some other local issues. Despite such problems, the Company was
able to generate 27.81 Million (Net) Units of power.

6. HUMAN RESOURCES

As on 30th September, 2015, the Company has 9 employees. The relations
with Company''s employees are cordial.

7. 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 will adversely affect our
operations.

8. 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.

9. CAUTIONARY STATEMENT

Statements in this Report, particularly those which relate to
Management Discussion and Analysis, describing the Company''s
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.

10.LISTING FEES

The annual listing fees for the year under review have been paid to the
Stock Exchanges, where your Company''s shares are listed.

1 1. SUBSIDIARY COMPANIES

The Company has three subsidiary companies as on September 30, 2015.

The details are given in Annexure ''I''

12. PARTICULARS OF INFORMATION FORMING PART OF THE BOARD''S REPORT
PURSUANT TO SECTION 134 OF THE COMPANIES ACT, 2013, RULE 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''

1 3 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, six 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 Listing Agreement.

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 30th September 2015, 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 30th September 2015 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 Clause 49 of the Listing Agreement.

17. COMPANY''S POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The Board had on the recommendation of the Nomination and Remuneration
Committee framed a 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. AUDITORS

a. Statutory Auditors

The Board of Directors has recommended ratification of re-appointment
of M/s. Joshi Apte & Co., Chartered Accountant, Pune (Firm Registration
No.104370W), as Statutory Auditors of the Company from the conclusion
of ensuing Annual General Meeting (AGM) to be held on 2nd March, 2016
till the conclusion of next Annual General Meeting.

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, (Membership No. FCS 1321 CP No. 965),
to undertake the Secretarial Audit of the Company. The Report of the
Secretarial Audit is annexed herewith as Annexure ''V'' to 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. There are certain Audit
Qualifications with respect to Consolidated 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:

Rs.20,678,545), which remain outstanding at the
balance sheet date of NECE (i.e.,3 September,2015), have been
considered good and recoverable in the financial statements by the
management of NECE based on future additional work expected to be
contracted to NEL. In the absence of sufficient appropriate audit
evidence, we are unable to form an opinion on the recoverability of the
said amount.

2. As stated in note no. 31 E accompanying consolidated financial
statements, Nandi Highway Developers Limited (NHDL) has accounted for
the Retirement Benefits based on the premium given by Life Insurance
Corporation (LIC) which is not as per actuarial valuation principles as
required by Accounting Standard (AS) 15.We are unable to give the
required effects and disclosures in the consolidated financial
statements.

B) Secretarial Audit Report

1. During the period from 1st October, 2014 to 31st March, 2015, the
Company has failed to comply with Clause 49 (II) (A) of the Listing
Agreement relating to maintaining 50% of the Composition of the Board
as Independent Director.

2. During the period from 1st October, 2014 to 30th September, 2015, ,
even though the Company has complied with other requirements of related
party transactions, the Company has failed to disclose the compliance
on related party transaction in the quarterly corporate governance
report filed by the Company as required under Clause 49 (VII) of the
Listing Agreement.

3. The Company has failed to file Consolidated financial results of
the Company within 60 days of the close of the Financial year with the
Stock Exchange as required under Clause 41 of the Listing Agreement.

4. The Company has failed to disclose the details of shares encumbered
by promoter in the financial result filed by the Company with the Stock
exchange under Clause 41 of the Listing Agreement for the quarter ended
September 2014, December 2014, March 2015 and June 2015.

5. The Company has failed to disclose the fact for pending Open Access
Permission from MSEDCL for the period 1st April, 2014 to 31st March,
2015 and consequent appeal filed by the Company with MERC under Clause
36 of the Listing Agreement. However, the Company reports this
information in the quarterly results filed by the Company with Stock
Exchange.

The management of Nandi Highway Developers Ltd. has accounted for the
Retirement Benefit based on the premium given by Life Insurance
Corporation of India ((LIC).

The Company was looking for a suitable candidate for appointment of
Independent Director. The Company has re-balanced its Board to comply
with Clause 49 (II) (A) with effect from March 31, 2015, by inducting
Independent Director.

There were no "material related party transactions" as defined under
Listing Agreement during this period. The company is of the view that
disclosure under Clause 49 is correctly filed.

The Company has stated in Note No. 38 of its standalone financial
statement that "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." The Company has subsequently filed the
consolidated financial results with the Stock Exchange on 14th
February, 2015.

The disclosures were made under Clause 35 of the Listing Agreement. The
Company has taken the necessary steps to rectify the same in future
reports.

MSEDCL has not rejected the Open Access permission. There is no show
cause notice from MSEDCL on this matter. There is no time limit for
MSEDCL to grant Open Access permissions. In earlier years also
permission from MSEDCL was delayed and the Company had no reasons to
believe that there would be such an inordinate delay. However, since
the permission was not forthcoming, the Company has preferred an appeal
with MERC. Therefore the Company is of the view that reporting on this
matter under clause 36 is not required. Necessary disclosures were made
in quarterly results filed under Clause 41.

6. The Company has not expended any amount for
Corporate Social Responsibility activities of the Company.

7. The Chief Executive Officer (CEO)and Chief Financial Officer (CFO)
of the Company were appointed on 31st March, 2015, therefore during the
period from 1st October, 2014 to 30th March, 2015, the Company had no
CEO & CFO as required under Section 203 of the Companies Act, 2013.

8. Section 152 (6) of the Companies Act, 2013 require at least 1/3rd of
the director to retire by rotation at the Annual General Meeting (AGM)
of the Company. In the AGM of the Company held on 30th March, 2015 only
one director retired by rotation.

9. During the Financial Year, the Company has failed to file following
forms with the Registrar of Companies as required under Section 179 and
77 of the Companies Act, 2013 and the rules made there under: Board
Meeting 28.11.2014

a. Form Mgt 14 - Noting of Disclosure of Interest by the Directors
under section 184 of the Companies Act, 2013

b. Form Mgt 14 - Approval of Standalone Financial Results for the
quarter and year ended 30.09.2014. Board Meeting 03.02.2015

c. Form Mgt 14 - Noting of Disclosure of Interest by the Directors
under Section 184 of the Companies Act, 2013 Board Meeting 14.02.2015

d. Form Mgt 14 - Approval of Consolidated Financial Results for the
quarter and year ended 30.09.2014 and Approval of Consolidated
Financial Statement for the year ended 30.09.2014.

e. Form Mgt 14 - Approval of the Board for providing security as
stated in section 179 of the Companies Act, 2013

f. Form CHG 1 - for pledge of shares held in the subsidiary Company to
Kotak Mahindra Bank as a security for loan availed by the subsidiary
Company.

The Company has identified the areas and the projects for spending the
amounts allocated for CSR activities. The same will be spent in due
course of time.

The Company was looking for a suitable candidate for appointment of CEO
& CFO. The Company has appointed a CEO & a CFO on March 31, 2015.

The Company is of the view that Independent Directors should be
excluded while computing the number of Directors liable to retire by
rotation. In such case only one Director is liable to retire by
rotation.

Company has initiated the process for filing of application of
condo nation of delay for the same.

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

During the year, the Company has not invested any funds in equity
capital of any company. 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

arm''s 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.31 to the
Financial Statements.

22. STATE OF COMPANY''S AFFAIRS

Discussion on state of Company''s 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 there under and
Clause 49 of Listing Agreement, 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 Designation Term of appointment
Director

Mr. B.B.
Hattarki * Independent Five consecutive years
Director commencing from 30th March
2015 up to 29th March, 2020

Mr. S. S.
Vaidya * Independent Five consecutive years
Director commencing from 30th March
2015 up to 29th March, 2020

Ms. A.A.
Sathe Additional Up to the ensuing Annual
Director General Meeting

Mr. B.N.
Kalyani Director Re-appointed with effect from
30th March 2015, subject to
retirement by rotation

* Appointed as Independent Directors in accordance with Section 149 of
Companies Act, 2013 and Clause 49 of the Listing Agreement.

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 under Clause 49 of the Listing Agreement
with the Stock Exchanges.

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

Name of the KMP Designation

Mr. B. S. Mitkari CEO & Company Secretary

Mr. S. S. Joshi CFO

33. Directors and KMP''s resigned during the year

Mr. G. K. Agarwal, Non-executive Director of the Company has tendered
his resignation effective from March 31, 2015 due to personal reason
and ceased to be the Director of the Company. The Directors place on
record their appreciation for the valuable contribution made by Mr. G.
K. Agarwal.

None of the KMPs resigned during the year ended 30th September, 2015.

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

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

Ms. A.A. Sathe was appointed as Additional Director on March 31, 2015.
Her term of office expires at the end of the ensuing Annual General
Meeting. A proposal for her appointment of Independent Director is
placed for the approval of members at the ensuing 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 Clause
49 of the Listing Agreement, 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

Hospet Bellary Highways Pvt. Ltd. ceased to be an Associate Company,
consequent to sale of shareholding.

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 COMPANY''S 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 behaviour, actual or suspected fraud or violation of the

Company''s code of conduct. The aforesaid policy has also been uploaded
on the Company''s website.

41. CASH FLOW

A Cash Flow Statement for the year ended 30th September 2015 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. 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.

Note- any reference in this Report to the provisions of erstwhile
Listing Agreement with the Stock Exchange applies mutatis mutandis to
the provisions of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.}

For and on behalf of the Board of Directors

B.B. Hattarki A.B. Kalyani

Pune Director Director

28th November, 2015 DIN:00145710 DIN:00089430

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.
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