Gujarat State Petronet

We have audited the attached Balance Sheet of Gujarat State Petronet
 Limited as at 31st March, 2008 and also the Profit & Loss Account for
 the year ended on that date annexed thereto and Cash Flow Statement 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.
 
 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 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 provides a reasonable basis for
 our opinion.
 
 As required by the Companies (Auditors Report) Order, 2003 issued by
 the Central Government of India in terms of section 227 (4A) of the
 Companies Act, 1956, we enclose in the Annexure a statement on the
 matters specified in paragraphs 4 & 5 of the said order, to the extent
 applicable to the Company.
 
 Further to our comments in the Annexure referred to in paragraph above,
 we report that:
 
 a.  We have obtained all information and explanations which, to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 b.  In our opinion proper books of accounts, as required by law have
 been kept by the Company so far as it appears from our examination of
 the books;
 
 c.  The balance Sheet and profit & Loss Account and Cash Flow Statement
 dealt with by the report are in agreement with the Books of Accounts.
 
 d.  In our opinion, the Balance Sheet and profit & Loss Account and
 Cash Flow Statement comply with the Accounting Standards referred to in
 sub-section (3C) of section 211 of the Companies Act, 1956, to the
 extent applicable.
 
 e.  As the company is a Government Company, in terms of notification
 no. G.S.R. 829(E) dated 21st October, 2003, issued by Department of
 Company Affairs, Ministry of Finance, the clause (g) of subsection (1)
 of section 274 of the Companies Act, 1956 is not applicable,
 
 f.  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
 accounting policies and the notes forming part of accounts 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 practices generally accepted in India.
 
 I] In case of Balance sheet, of the state of affairs of the Company as
 at 31st March, 2008 and
 
 II] In case of profit & Loss Account, of the Profit for the year ended
 on that date.
 
 III] In case of Cash Flow Statement, of the cash flow for the year
 ended on that date
 
 ANNEXURE REFERRED TO PARAGRAPH 3 OF THE AUDITORS REPORT
 
 1 a.  The Company has maintained proper record showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 b.  We are informed that during the year fixed assets were physically
 verified by the management and no material liscrepancies were noticed
 between the books records and physical existence of assets.
 
 c.  No substantial part of fixed assets have been disposed off during
 the year.
 
 2.  There was no stock of finished goods and raw materials, hence the
 points relating to physical verification, procedure of physical
 verification discrepancies noticed on such verification and valuation
 thereof do not arise. Further, we are informed that the stock of
 stores, spare parts etc. were physically verified by the management and
 that no material discrepancies were noticed.
 
 3.  The company has neither granted nor taken any loans from companies,
 firms or other parties listed in the register maintained under section
 301 of the Companies Act 1956 or to a Company under the same
 management.
 
 4.  In our opinion the Company has an adequate Internal Control System
 commensurate with the size of the Company and nature of its business
 with regard to purchases of equipment, plant & machinery, and other
 assets.
 
 5.  There are no transactions that need to be entered into register in
 pursuance of section 301 of the act.
 
 6.  The company has not accepted deposits from public.
 
 7.  The company has appointed an Internal Auditor. On the basis of the
 reports made by the internal auditors to management the internal audit
 system, in our opinion, is commensurate with the size and nature of the
 business of the company.
 
 8.  As informed to us the maintenance of cost records has not been
 prescribed by the Central Government to the company pursuant to Rules
 made by the Central Government for the maintenance of cost records
 under section 209 (1) (d) of the Companies Act, 1956.
 
 9.  According to the information and explanation given to us, there are
 no undisputed dues payable in respect of Provident Fund, Investor
 Education & Protection Fund, Employees State Insurance, Excise Duty,
 Cess which are outstanding as at 31 / 3/2008 for a period of more than
 six months from the date they became payable.
 
 10.  The company has been registered for a period for more than five
 years and it has no accumulated losses. Therefore, the requirement of
 clause (x) of paragraph 4 of the Order is not applicable to the
 Company.
 
 11.  The Company has not defaulted in repayment of dues to a financial
 institution or bank or debenture holders.
 
 12.  The company has not granted any Loans & Advances on the basis of
 security by way of pledge of other securities, and in our opinion,
 adequate documents and records are maintained.
 
 13.  The company is not a Chit Fund, Nidhi or Mutual benefit society.
 Hence, the requirement of clause (x) of paragraph 4 of the order is not
 applicable to. the Company.
 
 14.  According to the information and explanation given to us, the
 company is not dealing in shares, securities, debentures and other
 investments.
 
 15.  The company has not given any guarantee for loans taken by the
 others from banks or financial institutions.
 
 16.  The term loans obtained were applied for the purpose for which the
 loans were obtained.
 
 17.  No funds raised for long-term requirements have been used for
 short-term investment and vise-versa.
 
 18.  During the year, the company has not made any preferential
 allotment of shares to parties and companies covered in the Register
 maintained undet section 301 of the Act.
 
 19.  Proper securities have been created in respect of debenture/bond
 issues.
 
 20.  We have verified the end use of money raised by Public Issue and
 the same has been disclosed in Note no. 4 of the Notes to Accounts
 forming part of the financial statements.
 
 21.  According the information and explanation given to us, a fraud on
 or by the company has not been noticed or reported during the year.  t
 
                                           For M/s T N Shah & Company
                                           Chartered Accountants
 
                                            T N Shah
 Place : Gandhinagar                        Partner
 Date  : 4th July, 2008                  Membership No. 42748