Indraprastha Gas

1.  We have audited the attached Balance Sheet of Indraprastha Gas
 Limited as at 31 March, 2009, the Profit and Loss Account and the Cash
 Flow Statement of the Company for the year ended on that date, both
 annexed thereto. 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 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 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 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 paragraphs 4 & 5 of the said
 Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 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
 those books;
 
 c.  the Balance Sheet, the Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 d.  in our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report comply with the
 Accounting Standards referred to in sub-section (3C) of section 211 of
 the Companies Act, 1956;
 
 e.  On the basis of written representations received from directors, as
 on 31 March, 2009 and taken on record by the Board of Directors, we
 report that none of the directors is disqualified as on 31 March, 2009
 from being appointed as a zdirector in terms of clause (g) of sub
 section (I) of Section 274 of the Companies Act, 1956.
 
 f.  in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts, together with the
 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:
 
 i.  in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31 March, 2009;
 
 ii.  in the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on that date; and
 
 iii.  in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 1.  a.  The Company has maintained proper records showing full
 particulars, including quantitative details and situation of
 
 fixed assets.
 
 b.  According to the information and explanations given to us, the
 Company has a phased programme of physical verification of its fixed
 assets by which all fixed assets, other than underground gas
 distribution systems which are not physically verifiable, are verified
 over a period of two years. In accordance with this programme, a part
 of the fixed assets were verified during the year. In our opinion, the
 frequency of physical verification is reasonable having regard to the
 size of the Company and the nature of its business. No material
 discrepancies were noticed on such verification.
 
 c.  According to the information and explanations given to us,
 substantial part of fixed assets has not been disposed of during the
 year.
 
 2.  a.  Inventory comprises Gas and Stores and spares. According to the
 information and explanations given to us, inventory
 
 of stores and spares has been physically verified during the year by
 the Management. In our opinion, the frequency of verification of stores
 and spares is reasonable. According to the information and explanations
 given to us, the stock of gas in pipeline cannot be physically verified
 and is estimated on volumetric basis.
 
 b.  In our opinion, 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.  In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and discrepancies noted between physical inventory and book
 records were not material having regard to the size of the operations
 of the Company and the same have been properly dealt with in the books
 of account.
 
 3.  According to the information and explanations given to us, the
 Company has not taken or granted any loans, secured or unsecured,
 from/to companies, firms or other parties covered in the register
 maintained under Section 301 of the Companies Act, 1956. Accordingly,
 the provisions of clause 4 (iii) (b), (c), (d), (e), (f) and (g) of the
 Companies (Auditors Report) Order, 2003 are not applicable to the
 Company.
 
 4.  In our opinion and 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. On the basis of examination of the books of account and
 records of the Company and according to the information and
 explanations given to us, we have neither come across nor have been
 informed of any continuing failure to correct major weaknesses in
 internal control system.
 
 5.  Based on the examination of the books of account and related
 records and according to the information and explanations given to us,
 there are no contracts or arrangements with companies, firms or other
 parties which need to be entered in the register maintained under
 Section 301 of the Companies Act, 1956.  Accordingly the provisions of
 clause 4 (v) (b) of the Companies (Auditors Report) Order, 2003 are
 not applicable to the Company.
 
 6.  According to the information and explanations given to us, the
 Company has not accepted any deposits from the public as defined under
 the provisions of section 58A and 58AA of the Companies Act, 1956 and
 the rules framed thereunder.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8.  We have broadly reviewed the books of accounts maintained by the
 Company pursuant to the rules prescribed by the Central Government for
 maintenance of cost records under Section 209(l)(d) of the Companies
 Act, 1956 in respect of its products and are of the opinion that prima
 facie, the prescribed accounts and records have been made and
 maintained.  However, we have not made a detailed examination of the
 records with a view to determine whether they are accurate or complete.
 
 9.  According to the information and explanations given to us and the
 records of the Company examined by us:
 
 a.  The Company has generally been regular in depositing its undisputed
 statutory dues including Provident Fund, Employees State Insurance,
 Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and
 other statutory dues within the prescribed time with the appropriate
 authorities during the year and there are no undisputed amounts payable
 in respect of these dues which have remained outstanding as at 31
 March, 2009 for a period of more than six months from the date they
 became payable. We are informed that the Companys operations, during
 the year, did not give rise to any liability for Investor Education and
 Protection Fund and Wealth Tax.
 
 b.  According to the information and explanations given to us, the dues
 of Income Tax and Trade Tax, which have not been deposited by the
 Company on account of various disputes are as zfollows:
 
 10.  The Company does not have any accumulated losses at the end of the
 financial year and has not incurred cash losses in the financial year
 and in the immediately preceding financial year.
 
 Name of Statute   Nature of Dues       Amount               Amount 
 				   Demanded (Rs.)      Paid under 
 						    protest (Rs.)
 
 Income Tax Act, 
 1961                 Income Tax      143,053           71,600
 Income Tax Act, 
 1961                 Income Tax       27,320             -
 Income Tax Act, 
 1961                 Income Tax       13,189,332     1,747,116
 Income Tax Act, 
 1961                 Income Tax        5,581,256          -
 Income Tax Act, 
 1961                 Income Tax        9,599,124     4,800,000
 Income Tax Act,  
 1961                 Income Tax       34,009,173    25,500,186
 Income Tax Act, 
 1961                 Income Tax          740,029       740,000
 
 VAT-UP Trade Tax, 
 1948                        VAT        1,776,435       863,019
 
 Period to which the 
 amount                                     relates Forum where the 
                                                 dispute is pending
 Assessment Year 
 2001-2002                     Income Tax appellate Tribunal, Delhi
 Assessment Year 
 2002-2003                    Remanded back by Income Tax Appellate
                               Tribunal, Delhi to Assessing Officer
 Assessment Year 
 2003-2004                    Remanded back by Income Tax Appellate
                               Tribunal, Delhi to Assessing Officer
 Assessment Year 
 2003-2004                     Commissioner of Income Tax (Appeals)
 Assessment Year 
 2004-2005                    Remanded back by Income Tax Appellate
                               Tribunal, Delhi to Assessing Officer
 Assessment Year 
 2005-2006                    Remanded back by Income Tax Appellate
                               Tribunal, Delhi to Assessing Officer
 Assessment Year 
 2006-2007                     Commissioner of Income Tax (Appeals)
 Assessment Year 
 2007-2008                                UP VAT Appellate Tribunal
 
 11.  Based on our examination of the books of account and related
 records and according to information and explanation given to us, we
 are of the opinion that the Company has not defaulted in repayment of
 dues to its bankers. The Company did not have any outstanding dues to
 any financial institutions or zdebenture-holders during the year.
 
 12.  According to information and explanation given to us and based on
 documents and records examined by us, the Company has not granted loans
 and advances on the basis of security by way of pledge of shares,
 debentures and other securities.
 
 13.  In our opinion and according to information and explanation given
 to us, the Company is not a chit fund or a nidhi/mutual benefit
 fund/society. Accordingly, the provisions of clause 4 (xiii) of the
 Companies (Auditors Report) Order, 2003 are not applicable to the
 Company.
 
 14.  In our opinion and according to information and explanation given
 to us, the Company does not deal in trading of shares, securities,
 debentures and other investments.
 
 15.  According to information and explanation given to us, the Company
 has not given any guarantee for loans taken by others from bank or
 financial institutions during the year.
 
 16.  Based on the examination of the books of account and related
 records and according to the information and explanations given to us,
 the Company has not availed any term loan during the year.
 
 17.  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 prima facie, not been utilised for long
 term investment.
 
 1.8. According to information and explanation given to us and the
 records of the Company examined by us, 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, 1956.
 
 19.  According to information and explanation given to us and the
 records of the Company examined by us, the Company has not issued any
 debentures.
 
 20.  According to information and explanation given to us and the
 records of the Company examined by us, the Company has not raised any
 money from public issue during the year under report.
 
 21.  According to the information and explanations given to us, no
 fraud on or by the Company has been noticed or reported during the
 year.
 
                                    For DELOITTE HASKINS & SELLS
                                           Chartered Accountants
 
                                                           sd/- 
                                                jITENDRA AGARWAL
 
 Place : Mumbai Partner
 Date : May 27, 2009                        Membership No. 87104