Gulf Oil Corporation

1.  We have audited the attached Balance Sheet of GULF OIL Corporation
 Limited (the Company) as at 31st March, 2009 and also the Profit and
 Loss Account and the Cash Flow Statement for the year ended on that
 date, both annexed thereto in which are incorporated the returns from
 the Lubricants branch audited by another auditor. 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.
 
 2.  We conducted our audit in accordance with the 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.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 [CARO]
 issued by the Central Government of India in terms of sub-section (4A)
 of section 227 of the Companies Act, 1956, we enclose in the Annexure a
 statement on the matters specified in paragraph 5 and 6 of the said
 Order, to the extent applicable.
 
 4.  We invite attention to:
 
 (a) Notes 2.2 and 2.4 of Schedule 18 forming part of the financial
 statements regarding adjustments to Revaluation Reserve of Rs.25,370.76
 lakhs in accordance with the Scheme of Arrangement sanctioned by the
 Honourable High Court of Andhra Pradesh.
 
 (b) Note 17(a) of Schedule 18 forming part of the financial statements
 regarding Deferred Tax Asset which includes Rs.512.34 lakhs on account
 of carried forward business losses for reasons explained therein and in
 respect of which we are unable to form a view on the appropriateness of
 the same.
 
 5.  Further to our comments in the Annexure referred to above, we
 report as follows:
 
 (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
 those books and proper returns adequate for the purposes of our audit
 have been received from the branch not visited by us.
 
 (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account
 and the audited returns from the Lubricants branch
 
 (d) Having regard to para 4(a) above, in our opinion, the Balance
 Sheet, Profit and Loss Account and Cash Flow Statement dealt with by
 this report are in compliance with the accounting standards referred to
 in sub-section (3C) of section 211 of the Companies Act, 1956;
 
 (e) in our opinion and to the best of our information and according to
 the explanations given to us, except in para 4(b) above, the said
 accounts give the information required by the Companies Act, 1956 in
 the manner so required give a true and fair view in conformity with the
 accounting principles generally accepted in India:
 
 i) in case of the Balance Sheet, of the state of affairs of the Company
 as at 31st March, 2009;
 
 ii) in case of the Profit and Loss Account, of the profit for the year
 ended on that date; and
 
 iii) in case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 6.  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 31st 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.
 
 ANNEXURE TO THE AUDITORS REPORT TO THE MEMBERS OF GULF OIL CORPORATION
 LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2009
 
 The nature of the Companys business activities during the year was
 such that paragraphs 4(iv), (xii), (xiii) and (xix) of CARO are not
 applicable.
 
 (i) In respect of its fixed assets:
 
 (a) The Company has maintained proper records showing full particulars
 including quantitative details and situation of its fixed assets.
 
 (b) In accordance with the phased programme of verification adopted by
 the Company, physical verification of assets at some locations has been
 carried out during the year by the management. According to the
 information and explanations given to us, no material discrepancies
 were noticed on such verification. In our opinion, the frequency of
 verification is reasonable.
 
 (c) The fixed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of the fixed assets of the Company
 and such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 (ii) In respect of its inventories:
 
 (a) As explained to us, inventory were physically verified during the
 year by the management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventory
 followed by the management are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has maintained
 
 proper records of its inventory. The discrepancies noticed on
 verification between the physical stocks and book records were not
 material.
 
 (iii) According to the information and explanations given to us, the
 Company has not granted / taken any loans, secured or
 
 unsecured to or from companies, firms or other parties listed in the
 register maintained under Section 301 of the Companies Act, 1956.
 Accordingly, paragraphs 4(iii) (b), (c), (d), (e), (f) and (g) of the
 CARO are not applicable.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control
 systems commensurate with the size of the Company and the nature of its
 business with regard to purchase of inventory and fixed assets and with
 regard to the sale of goods and services. Further, on the basis of our
 examination, and according to the information and explanations given to
 us, we have neither come across nor we have been informed of any
 instance of major weakness in the aforesaid internal control system.
 
 (v) As explained to us and according to the information and
 explanations given to us, there are no transactions that need
 to be entered in the register maintained in pursuance of Section 301 of
 the Companies Act, 1956. Accordingly para 4(v)(b) of CARO is not
 applicable.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has complied with the
 directives issued by the Reserve Bank of India and the provisions of
 Section 58A, 58 AA or any other relevant provisions of the Companies
 Act, 1956 and the rules framed there under as applicable. As explained
 to us, the Company has not received any order from the Company Law
 Board or National Company Law Tribunal or Reserve Bank of India or any
 other Tribunal.
 
 (vii) In our opinion the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) We have broadly reviewed the books of accounts maintained by the
 Company in respect of manufacture of lubricants pursuant to the Rules
 made by the Central Government of India for the maintenance of cost
 records has been prescribed under section 209 (1) (d) of the Companies
 Act, 1956, and are of the opinion that prima-facie, the prescribed
 accounts and records have been made and maintained. We have not,
 however, made a detailed examination of the records with a view to
 determining whether they are accurate or complete. To the best of our
 knowledge and according to the information given to us, the Central
 Government has not prescribed the maintenance of cost records under
 Section 209(1)(d) of the Companies Act, 1956 for any other product of
 the Company.
 
 (ix) In respect of statutory dues:
 
 (a) According to the information and explanations given to us the
 Company has been generally regular in
 depositing undisputed statutory dues including provident fund, investor
 education and protection fund, employees state insurance, income tax,
 sales tax, wealth tax, service tax, customs duty, excise duty, cess and
 other material statutory dues as applicable with the appropriate
 authorities during the year.
 
 (b) According to the information and explanations given to us, as at
 31st March, 2009, the following are the particulars of dues on account
 of income tax, sales tax, wealth tax, service tax, customs duty, excise
 duty and cess which have not been deposited on account of any dispute.
 
 Name of the Statute   Nature of dues      Period to which the
                                               amount relates
 
 Central Excise Act     Excise duty       1980-87
                                          1992-96
                                          2003-04
 Sales Tax Act            Sales Tax    1992-93, 1994-95,
                                       1995-96, 1998-99 & 2003-04
                                       1977-78 to 1983-84, 1984-85, 
                                       1985-86, 1986-87, 1987-88, 
                                       1989-90 & 1990-91
                                       1976-77 to 1983-84
                                       1976-77 to 1983-84 & 1997-98
                                       2001-02
                                       2002-03, 2003-04 & 2004-05
                                       2005-06
 Service Tax Act       Service Tax     2004-06
 Income Tax Act, 1961   Income Tax     2001-02
                                       2005-06
                                       1998-99, 1999-2000 & 2000-01
 Lubricants
 Central Excise Act     Excise Duty    2008-09
 Sales Tax Act          Sales Tax      1994-95 & 1999-2000
                                       1995-96 & 1999-2000
                                       1999-2000, 2001-02 & 2003-04
 
 Amount                                   Forum where dispute
 (Rs. Lakhs)                                 is pending
 
 6.12                                      Asst. Commissioner
                                      Central Excise & Customs
 1.11                                    Commissioner Appeals,
                                        Central Excise & Customs
 4.61                                     High Court
 1375.78                           Sales Tax Tribunal, Orissa
 1463.16                                 High Court, Orissa
 972.37                             Additional Commissioner
                                     Commercial Taxes
 233.32                               Commissioner Commercial
                                           Taxes
 3.68                                 Assistant Commissioner
                                        Commercial Taxes
 199.68                               Joint Commissioner
 6.11                                  Deputy Commissioner
 2.24                            Central Excise and Service Tax
                                     Appellate Tribunal
 10.27                              Income Tax Appellate Tribunal
 809.27                              Commissioner of Income Tax
                                         (Appeals)
 32.97                               Commissioner Appeals
 16.04                              Commissioner Appeals
 318.21                               High Court
 8.54                             Appellate Tribunal
 89.52                           Deputy Commissioner
 
 (x) The Company does not have accumulated losses and has not incurred
 cash losses during the financial year
 covered by our audit and in the immediately preceding financial year.
 
 (xi) According to the information and explanations given to us having
 regard to roll over of Buyers Credit by Bank, the
 Company has not defaulted in repayment of its dues to financial
 institutions or banks during the year.
 
 (xii) In our opinion, the terms and conditions on which the Company has
 given guarantees for loans taken by others from
 bank or financial institutions are prima-facie not prejudicial to the
 interest of the Company.
 
 (xiii) To the best of our knowledge and according to the information
 and explanations given to us, in our opinion, the term loans availed by
 the Company were applied for the purpose for which they were obtained.
 
 (xiv) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, funds
 raised on short term basis have not been used for long term investment.
 
 (xv) The Company has not made any preferential allotment of shares to
 parties covered under section 301 of the Companies Act, 1956.
 
 (xvi) The Company has not raised any money by way of public issue
 during the year.
 
 (xvii) According to the information and explanations given to us,
 during the year, no fraud on or by the Company was noticed or reported.
 
                                       For Deloitte Haskins & Sells 
                                        Chartered Accountants
 
                                           K. RAJASEKHAR 
 Place : Mumbai Partner
 Date : June 25, 2009                        M.No.23341