BF Utilities

We have audited the attached Balance Sheet of BF UTILITIES LIMITED, as
 at 30th September 2008 and also the annexed Profit and Loss Account and
 the Cash Flow Statement of the Company for the year ended on that date.
 These financial statements are the responsibility of the Companys
 management. Our responsibility is to express an opinion on these
 financial statements based on our Audit.
 
 (1) We conducted our audit in accordance with auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatements. An Audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 (2) As required by the Companies (Auditors Report) Order, 2003 (CARO,
 2003), issued by the Central Government of India in terms of Section
 227(4A) of the Companies Act, 1956, we annex hereto a Statement on the
 matters specified in paragraphs 4 of the said Order;
 
 (3) Further to our comments in Annexure referred to in paragraph 2
 above, we report that:
 
 (a) We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 (b) In our opinion, proper books of account as required by law have
 been kept by the Company so far as appears from our examination of the
 Books of the Company;
 
 (c) The Balance Sheet, Profit and Loss Account and the Cash Flow
 Statement dealt with by the report are in agreement with the Books of
 Account of the Company;
 
 (d) In our opinion, the Balance Sheet, Profit and Loss Account and the
 Cash Flow Statement dealt with by this report comply with the
 Accounting Standards referred to in Section 211 (3C) of the Companies
 Act, 1956, to the extent applicable;
 
 (e) On the basis of the written representations received from the
 Directors as on 30th September, 2008, and taken on record by the Board
 of Directors, we report that none of the Directors is disqualified as
 on 30th September, 2008 from being appointed as a director in terms of
 clause (g) of sub-section (1) of section 274 of the Companies Act, 1
 956;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said Financial Statements, read
 together with the notes thereon, give the information required by the
 Companies Act, 1956, in the manner so required and present a true and
 fair view in conformity with the accounting principles generally
 accepted in India:
 
 (i) In the case of the Balance Sheet, of the state of the affairs of
 the Company as at 30th September, 2008,
 
 (ii) In the case of the Profit and Loss Account, of the profit for the
 year ended on that date, and
 
 (iii)ln the case of the Cash Flow statement, the cash flows of the
 company for the year ended on that date.
 
 ANNEXURE TO THE AUDITORS REPORT:
 
 Statement referred to in Paragraph 2 of the Auditors Report of even
 date to the Members of BF UTILITIES LIMITED on the Financial Statements
 for the year ended 30th September, 2008.
 
 On the basis of the records produced to us for our
 verification/perusal, such checks as we considered appropriate, and in
 terms of information and explanations given to us on our enquiries, we
 state that:
 
 i) (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) As explained to us, considering the nature of the Fixed Assets, the
 same have been physically verified by the management at reasonable
 intervals during the year. According to the information and
 explanations given to us and the records produced to us for our
 verification, there were no discrepancies noticed on such physical
 verification.
 
 (c) As per the information and explanation given to us on our enquires
 the disposal of assets during the year were not substantial and would
 not have an impact on the operations of the Company;
 
 ii) (a) As per the information and explanation given to us and the
 records produced to us for our verification the company has not granted
 any loans, secured or unsecured, to companies, firms and other parties
 covered in the register maintained under section 301 of the Companies
 Act, 1956;
 
 (b) As per the information and explanation given to us and the records
 produced to us for our verification the company has not taken any
 loans, secured or unsecured, from companies, firms and other parties
 covered in the register maintained under section 301 of the Companies
 Act, 1956;
 
 iii) In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business with regard to the purchase of fixed assets and for the sale
 of goods and services. As per the information given to us, no major
 weaknesses in internal controls have been identified by the management
 or the internal auditors of the Company during the year. During the
 course of our audit, nothing had come to our notice that may suggest a
 major weakness in the internal control systems of the Company;
 
 iv) On the basis of the audit procedures applied by us, and according
 to the information and explanations given to us on our enquiries on
 this behalf and the records produced to us for our verification, there
 are no transactions that need to be entered into the register in
 pursuance of section 301 of the Companies Act, 1956 ;
 
 v) The Company has not accepted any deposits from the public during the
 year;
 
 vi) On the basis of the internal audit reports broadly reviewed by us,
 we are of the opinion that, the Company has an adequate internal audit
 system commensurate with the size and nature of its business;
 
 vii) We have broadly reviewed the Books of Account maintained by the
 Company pursuant to the rules made by the Central Government for the
 maintenance of Cost Records under Section 209(1 )(d) of the Companies
 Act, 1956, in respect of the Companys products to which the said rules
 are made applicable, and are of the opinion that prima facie the
 prescribed accounts and records have been made and maintained. We have,
 however, not made a detailed examination of the records with a view to
 determine whether they are accurate;
 
 viii) (a) According to the records of the Company, the Company has been
 generally regular in depositing undisputed statutory dues including
 Income Tax, Service Tax, Cess and other Statutory dues with the
 appropriate authorities.  According to the information and explanations
 given to us, provisions of the Employees Provident Fund & Miscellaneous
 Provisions Act, 1952 and the Employees State Insurance Act, 1948 are at
 present not applicable to the Company. However, the Company is regular
 in depositing Provident Fund Dues with Trust formed by the Company in
 this regard;
 
 (b) On the basis of our examination of the documents and records of the
 Company and the information and explanations given to us upon our
 enquiries in this regards, there are no disputed amounts payable in
 respect of Income-tax, Service Tax, cess which have not been deposited
 with the appropriate authorities;
 
 ix) The Company has not defaulted in repayment of dues to any financial
 institution or banks during the year;
 
 x) The Company has in our opinion, maintained proper records and
 contracts with respect to its investments where timely entries of
 transactions are made in the former. All Investments held by the
 Company at the close of the year are held in its own name.
 
 xi) The Company has not given any guarantees for loans taken from
 financial institutions and/or banks by others;
 
 xii) The Company has applied the funds raised by way of term loans
 towards the purposes for which they have been raised;
 
 xiii) The Company has not applied any short term funds for long term
 investments;
 
 xiv) As per the information and explanation given to us on our
 enquiries on this behalf there were no frauds on or by the Company
 noticed or reported during the year.
 
 In view of the nature of activities carried on by the Company and
 considering the reporting requirements clauses no (ii) and (xiii) of
 CARO, 2003 are not applicable to the company. Further in view of the
 absence of conditions prerequisite to the reporting requirement of
 clauses (iii) (b), (c), (d), (f) & (g), (x), (xii), (xviii), (xix) and
 (xx) the said clauses are, at present, not applicable.
 
                                              For and on behalf of
                                              DALAL & SHAH
                                              Chartered Accountants
 
                                              Anish Amin
                                              Partner
                                              Membership No: 40451
 MUMBAI: 27th December 2008