Adani Enterprises

We have audited the attached Balance Sheet of ADANI ENTERPRISES LIMITED
 as at 31 st March, 2009 and also the Profit and Loss Account for the
 year ended on that date annexed thereto and the Cash Flow statement for
 the year ended on that date, which we have signed under reference to
 this report. 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.
 
 We have 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 misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the 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 provide a reasonable basis for
 our opinion.
 
 1.  As required by the Companies (Auditors Report) Order, 2003 (the
 Order) (as amended), issued by the Central Government of India in
 terms of sub-section (4A) of section 227 of the Companies Act, 1956
 (the Act), we enclose in the Annexure a statement on the matters
 specified in paragraphs 4 & 5 of the said Order.
 
 2.  Furthertoourcomments in the annexure referred to above, we
 report that:
  
 i) We have obtained all the information and explanations, which to the
 best of our knowledge and belief
 
 were necessary for the purpose of our audit;
 
 ii) 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
 those books;
 
 iii) The Balance Sheet, Profit & Loss Account and Cash-flow statement
 dealt with by this report are in
 
 agreement with the books of account.
 
 iv) In our opinion, the Balance Sheet, Profit & Loss account and Cash
 Flow Statement dealt with this report comply with the Accounting
 Standards referred to in sub-section (3C) of Section 211 of the
 Companies Act, 1956;
 
 v) On the basis of written representations received from the directors,
 as on 31st March, 2009, and taken on record by the Board of Directors,
 we report that none of the directors is disqualified as on 31sl March,
 2009 from being appointed as a director in terms of clause (g) of
 sub-section (1) of section 274 of the Companies Act, 1956;
 
 vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read together with the
 Significant Accounting Policies and other notes thereon give the
 information required by the Companies Act, 1956 in the manner so
 required and give a true and fair view in conformity with the
 accounting principles generally accepted in India:
 
 a) in the case of the Balance Sheet, of the State of affairs of the
 Company as at 31 st March, 2009;
 
 b) in the case of Profit & Loss account, of the Profit for the year
 ended on that date; and
 
 c) in the case of cash flow statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE TO THE AUDITORS REPORT 
 
 RE: ADANI ENTERPRISES LIMITED
 
 (Referred to in Paragraph 1 of our Report of even date)
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets. The same are in the process of being updated;
 
 (b) As explained to us, fixed assets, according to the practice of the
 Company, are physically verified by the management at reasonable
 intervals, in a phased verification-programme, which, in our opinion,
 is reasonable, looking to the size of the Company and the nature of its
 business. No material discrepancies were noticed on such verification.
 
 (c) As the Company has disposed off an insignificant part of the fixed
 assets during the year, provisions of clause 4 (i)(c) of the Order are
 not applicable.
 
 (ii) (a) During the year, the inventories have been physically verified
 by the management, except for stocks lying with third parties, which
 have, however, been confirmed by them. In our opinion, the frequency of
 verification is reasonable.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the management are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) On the basis of our examination of the record of inventories, we
 are of the opinion that, the Company is maintaining proper records of
 inventories: The discrepancies noticed on physical verification of
 inventories as compared to book records were not material and have been
 properly dealt with in the books of account.
 
 (iii) (a) According to the information and explanation given to us, the
 company had granted unsecured loan to seven companies covered in the
 register maintained under section 301 of the Companies Act, 1956. The
 maximum amount involved during the year was Rs. 1089.14 Crores and the
 year end balance of loans granted to such parties was Rs. 226.45
 Crores. The Company has not granted secured or unsecured loans to firms
 or other parties covered in the Register maintained under section 301
 of the Companies Act, 1956.
 
 (b) In our opinion, the rate of interest, except the interest free loan
 given to some of its wholly owned Subsidiary and the other terms and
 conditions on which loans have been granted to companies listed in the
 register maintained under section 301 of the Companies Act, 1956 are
 not, prima facie, prejudicial to the interest of the company.
 
 (c) The parties have repaid the principal amounts as stipulated and
 have been regular in the payment of interest, in respect of unsecured
 loan given to wholly owned subsidiary, the loan is interest free and in
 absence of an agreement on repayment terms and conditions, we are
 unable to comment about the regularity of principal payment.
 
 (d) There is no overdue amount of loans granted to companies listed in
 the register maintained under section 301 of the Companies Act, 1956.
 Accordingly provisions of clause 4 (iii)(d) of the Order are not
 applicable.
 
 (e) According to the information and explanation given to us, the
 company has not taken any loan secured or unsecured from companies,
 firms or other parties covered in the Register maintained under section
 301 of the Companies Act, 1956. Accordingly provisions of clause 4
 (iii)(e) to 4(iii)(g) of the Order are not applicable.
 
 (iv) According to the information and explanations given to us, there
 is an adequate internal control system commensurate with the size of
 the Company and the nature of its business for the purchase of
 inventory and fixed assets and for the sale of goods and services.
 During the course of our audit, no major weakness has been noticed in
 the internal control system.
 
 (v) (a) Based on the audit procedures applied by us and according to
 the information and explanations provided by the management, we are of
 the opinion that the particulars of the contracts or arrangements that
 need to be entered into the register maintained under section 301 have
 been so entered^
 
 (b) In respect of transactions made in pursuance of such contracts or
 arrangements have been entered into during the financial year are
 reasonable except in some of the transactions, for which no comments is
 being made owing to the unique and specialized nature of the items
 involved and absence of any comparable prices. For price justification
 reliance is placed on the information and explanation given by the
 management.
 
 (vi) The Company has not accepted deposits from the public within the
 meaning of section 58A & 58AA of the Companies Act, 1956 or any other
 relevant provisions of the Act and the Rules framed there under. We are
 informed that no order has been passed by the Company Law Board or
 National Company Law Tribunal or Reserve Bank of India or any Court or
 any other Tribunal.
 
 (vii) As per the information and explanations given to us by the
 management, the Companys internal control procedures together with the
 internal checks conducted by the group internal audit team during the
 year can be considered as an internal audit commensurate with the size
 and nature of its business.
 
 (viii) According to the information and explanations given to us, the
 maintenance of cost records under Section 209(1 )(d) of the Companies
 Act, 1956 is not applicable to the Company. Accordingly, the provisions
 of Clause 4{viii)of the Order are not applicable.
 
 (ix) (a) As explained to us, the statutory dues payable by the Company
 comprises of Provident Fund, Investors Education Protection Fund,
 Employees State Insurance, Income Tax, Sales Tax/VAT, Wealth Tax,
 Service Tax, custom duty, excise duty, cess, octroi, entry tax,
 purchase tax, Municipal tax and other applicable statutory dues.
 According to the records of the Company, the Company is generally
 regular in depositing undisputed statutory dues with the appropriate
 authorities; however there has been delay in few cases which is not in
 arrears for more than Six months at the end of financial year. There
 are no undisputed statutory dues as referred to above as at March 31,
 2009 outstanding for a period of more than six months from the date
 they become payable.
 
 (b) According to the records of the Company and representation made by
 the Management, the following are the disputed amounts in respect of
 various statutes:
 
 Name of Statute        Nature of the dues
 
 Income Tax Act,        Additions made in appellate 
 1961                   order
 Income Tax Act,        Additions made in regular
 1961                   assessments
 Income Tax Act,
 1961                   Demand for Interest on TDS.
 Income Tax Act,        Additions made in regular
 1961                   assessmentsIncome 
 Income Tax Act,        Additions made in appellate
 1961                   order
 Income Tax Act,        Additions made in Tribunal
 1961                   order
 Gujarat-Sales Tax      Sales Against Sales
 Act                    declaration forms
 Maharashtra Sales      Sales against sales declaration
 Tax                    forms 
 Maharashtra
 Central sales Tax      Pendmg submission of c form 
 Maharashtra sales      Sales against sales declaration
 Tax                    forms
 Maharashtra 
 Central sales Tax      High seas claim disallowed
 Keral VAT Tax          High seas claim disallowed
                        Claim of duty benefit on basis
 Customs Act,1962       of import license
 Customs Act, 1962      Valuation of CD Rom
                        Import of Lam Coke and
 Customs Act, 1962      clearance of the same using
                        advance license
 Customs Act, 1962      Valuation of various products
 Foreign Exchange       Import of CD Rom
 Regulation Act                    
 Customs Act, 1962      Valuation of Raw Silk
 Customs Act, 1962      Valuation of CD Rom
                        Valuation of CD Rom &
 Customs Act, 1962      Availment of DEPB Credit
 Customs Act, 1962      Valuation of coal
 Foreign Exchange       Import of CD Rom by Pioneer
 Regulation Act
 Central Excise         Contravention of Central
 Rules                  Excise Rules and wrong
                        availment of excess rebate
 Customs Act, 1962      Valuation of Export price of CD
                        ROM
 Customs Act, 1962      Disputed Exports
 Customs Act, 1962      Valuation of Fuel Oil
                        Import of Naptha and denial of 
 Customs Act, 1962      exemption notification
 
 Name of Statute        Amount    Forum where dispute is
                       (Rs. in    pending
                       Crores)
 
 Income Tax Act,     
 1961                  1.46       Appellate Tribunal, Ahmedabad.
 Income Tax Act,     
 1961                  0.55       CIT Appeal, Ahmedabad.
 Income Tax Act,     
 1961                  0.41       CIT Appeal, Garidhinagar.
 Income Tax Act,     
 1961                  0.20       CIT Appeal, Ahmedabad.
 Income Tax Act,     
 1961                  0.05       CIT Appeal, Ahmedabad.
 Income Tax Act,     
 1961                  0.02       High Court of Gujarat
                                  Dy. Commissioner 
 Gujarat-Sales Tax      
 Act                   0.07       Appeals, Ahmedabad
                                  Appellate Tribunal,
 Maharashtra Sales      
 Tax                   0.31       Mumbai,Maharashtra
                                  Appellate Tribunal,
 Maharashtra           0.69       Mumbai,Maharashtra
 Central Sales Tax                Joint Commissioner
 Maharashtra Sales     1.03       Appeal, Mumbai
 Tax                         
                                  Joint Commissioner
 Maharashtra           0.58       Appeal, Mumbai
 Central Sales Tax       
                                  Dy. Commissioner
 Kerala VAT Tax        0.98       Appeals, Kochin
 Customs Act,1962      0.74       Supreme Court 
 Customs Act,1962      0.41       Supreme Court
 Customs Act,1962      0.83       Supreme Court
 Customs Act,1962      Amount     With Various appellate
                       Unascertainauthorities
                       able
 Foreign Exchange      4.00       High Court of Gujarat
 Regulation Act                   Customs, Excise and 
 Customs Act,1962      0.22       Service Tax appellate
                                  Tribunal, Chennai.
 Customs Act,1962      0.05       CESTAT-Ahmedabad
 Customs Act,1962      2.31       CESTAT, Mumbai
                                  With various Assessing & 
 Customs Act,1962      0.39       Appellate Authorities.
                                  Commissioner of Income 
 Foreign Exchange      0.16       Tax (Appeals)-V,Chennai
 Regulation Act                   Commissioner of Customs
 Central Excise        0.61       (Appeals),Salem
 Rules                            Commissioner of
 Customs Act,1962      0.30       Customs,ICD, Tuglakabad
 Customs Act,1962      0.22       Commissioner of
                                  Customs, Mumbai
                                  Asst. Commissioner of
 Customs Act,1962     0.07        Customs, Mundra
                                  Deputy Commissioner of
 Customs Act,1962     0.50        Customs, Marmgoa
 
 (x) The Company has no accumulated losses at the end of the financial
 year and it has not incurred any cash losses in the current and
 immediately preceding financial year.
 
 (xi) Based on our audit procedures and on the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to a financial
 institution, bank and debenture holders.
 
 (xii) According to the information and explanations given to us, the
 Company has not granted loans and advances on the basis of security by
 way of pledge of shares, debentures and other securities. Accordingly,
 the provisions of Clause 4(xii) of the Order are not applicable.
 
 (xiii) According to the information and explanations given to us, the
 Company is not a chit fund or a nidhi/mutual benefit fund/society.
 Accordingly, the provisions of clause 4(xiii)ofthe Order are not
 applicable.
 
 (xiv) In respect of dealing in securities and other investments, in our
 opinion and according to the information and explanations given to us,
 proper records have been maintained of the transactions and contracts
 and timely entries have been made therein. All investments at the end
 of the year are held in the name of the company and its nominees,
 wherever required.
 
 (xv) In respect of guarantees given by the Company for loans taken by
 others from banks, the terms and conditions are prima facie not
 prejudicial to the interest of the Company.
 
 (xvi) To the best of our knowledge and as explained, the term loans
 raised during the year have been applied for the purpose for which they
 were raised.
 
 (xvii) According to the Cash-flow statement and other records examined
 by us and the information and explanations given to us, on an overall
 basis, funds raised on short term basis have not, prima facie, been
 used during the yearfor long term investment except permanent working
 capital.
 
 (xviii) The Company has not made any preferential allotment of shares
 to parties and companies covered in the Register maintained under
 section 301 of the Companies Act. Accordingly, the provisions of Clause
 4(xviii) of the Order are not applicable.
 
 (xix) The Company has created securities or charge in respect of
 secured debentures issued and outstanding at the year end.
 
 (xx) During the year, the Company has not raised money by way of public
 issue. Accordingly, the provisions of Clause 4(xx) of the Order are not
 applicable.
 
 (xxi) Based upon the audit procedures performed and information and
 explanations given by the management, we report that, no fraud on or by
 the Company has been noticed or reported during the course of our audit
 for the year ended 31st March, 2009.
 
                                               For DHARMESH PARIKH & CO.
                                               Chartered Accountants
 
 Place: Ahmedabad                              (D.A. PARIKH)
 Date: 20th May,2009.                          Partner
                                               Membership No. 45501