BF Utilities faces adverse audit opinion over subsidiary, investor claims

BF Utilities Limited announced its audited consolidated financial results for the quarter and year ended March 31, 2025, revealing an adverse audit opinion from G.D. Apte & Co., Chartered Accountants. The adverse opinion primarily stems from issues concerning Nandi Economic Corridor Enterprises Limited (NECE), a step-down subsidiary. NECE's classification of Compulsory Convertible Preference Shares (CCPS) as equity instruments, amounting to ₹49,998.53 lakhs (with ₹27,725.43 lakhs as securities premium), was challenged by auditors, who believe these should have been classified as a financial liability, impacting total equity and non-current liabilities. The auditors were unable to quantify this impact.

Additionally, an arbitration notice from an investor (AIRRO Mauritius Holdings V) claiming damages of Rs. 500 Crore (plus 18% IRR) for alleged breach of a Shareholders' Agreement and failure to provide an exit option, also contributed to the adverse opinion. The management denies these claims, stating they lack merit. The auditors also highlighted an outstanding interest-free advance of Rs. 3,700 lakhs from BF Utilities to NECE for land acquisition, which has been pending for over fourteen years.

BF Utilities reported consolidated net profit of ₹33,784.74 lakhs for the year ended March 31, 2025, with total revenue at ₹86,169.61 lakhs. The company also announced the re-appointment of Amit B. Kalyani as a non-executive, non-independent director.