Interlink Petroleum

1.  We have audited the attached Balance Sheet of Interlink Petroleum
 Ltd. (The Company) as at 31st March, 2009 and the Profit and Loss
 Account and the Cash Flow Statement of the Company for the year ended
 on that date 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. These 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 the 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 as
 amended by Companies (Auditors Report) (Amendment) Order, 2004
 (together The Order) issued by the Central Government Of India in
 terms of sub-section (4A) of Section 227 of the Companies Act, 1956,
 and on the basis of information and explanation given to us, and the
 books and records examined by us in the normal course of audit and to
 the best of our knowledge and belief, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 order.
 
 4.  Without qualifying our report, we invite attention to Note 2, 3 and
 5 of Schedule 14 Note Forming Part of Accounts regarding the
 following:
 
 (i) Write off of amounts paid to Late Sajive Nair, ex-Chairman and
 Managing Director;
 
 (ii) Non-competence fee paid to Mrs. Shaila Kartha, ex-Executive
 Director;
 
 (iii) Capitalization of expenses as Capital Work-in-Progress.
 
 Further to our comments in the Annexure referred in paragraph (3)
 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 and Profit and 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 and Loss Account and 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, subject to the qualifications & notes to accounts;
 
 v) On the basis of the 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.
 
 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 notes on accounts 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;
 
 a) In the case of the balance sheet, of the state of affairs of the
 Company as at 31st March, 2009;
 
 b) In the case of the profit and loss account, of the loss for the year
 ended on that date; and
 
 c) In the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
 
 1.  In respect of its fixed assets:
 
 a.  Proper records of fixed assets are maintained.
 
 b.  Physical verification of the fixed assets has been conducted by the
 management during the year. There were no material discrepancies
 between physical count and fixed assets as per the records.
 
 c.  The company has disposed off some of its fixed assets during the
 year. As per the information and explanation given to us on our
 enquiries the disposal of assets during the year was not substantial so
 as to have an impact on the operations of the company or affect its
 going concern.
 
 2.  In respect of its inventories:
 
 a.  The Company is currently in the business of extraction of natural
 gas from the field, which is supplied as and when it is extracted. So
 there is no storage of natural gas available and hence physical
 verification of natural gas stock is not applicable. However, stores
 and spare parts have been physically verified by the management at
 reasonable intervals during the year.
 
 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.  In our opinion and according to the information and explanations
 given to us, the Company is maintaining proper records of inventories.
 The discrepancies noticed on verification between the physical stocks
 and the book records were not material.
 
 3.  In respect of loans, secured or unsecured, granted or taken by the
 Company to/from companies, firms or other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956;
 
 a.  The company had taken loan from M/s Jit Sun Investment Pte Ltd.
 covered in register maintained under Section 301 of the Companies Act,
 1956. The opening balance of the same was Rs. NIL lacs and its closing
 balance is Rs. 12.33 lacs. The maximum balance during the year was Rs.
 12.33 Lacs. The loan taken is interest free and other terms and
 conditions on which the loan has been taken are not prima facie
 prejudicial to the interest of the company. In respect of loan taken,
 whether the amount has been repaid regularly or not cannot be commented
 upon, as there is no stipulation as regards to the repayment of the
 amount.
 
 b.  The company has given loans & deposits to one company and two
 parties covered in register maintained under section 301 of the
 Companies Act 1956. The maximum amount involved during the year was Rs.
 114.03 lacs and the year end balance of loan and deposits granted to
 such parties was Rs.4.23 lacs. The loan and deposit given is interest
 free and other terms and conditions on which the loan and deposit has
 been given are prima facie not prejudicial to the interest of the
 company except for an amount of Rs. 109.81 lacs given to Ex-Chairman
 and Managing Director. Refer Note No. 2 in Schedule: 14 (B) for Notes
 forming Part of Accounts. In respect of loan given, whether the amount
 has been received regularly or not cannot be commented upon, as there
 is no stipulation as regards to the repayment of the amount. However,
 the deposit given is receivable at the end of the lease period.
 
 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 nature of its business for purchase of
 inventory and fixed assets and for the sale of goods and services.
 During the course of our audit, we have not observed any continuing
 failure to correct major weaknesses in internal control system.
 
 5.  In respect of transaction covered under section 301 of the
 Companies Act, 1956;
 
 a.  In our opinion and according to the information and explanations
 given to us, the transaction made in pursuance of contracts or
 arrangements, that needed to be entered into the register maintained
 under section 301 of the Companies Act, 1956 have been so entered.
 
 b.  In our opinion and according to the information and explanations
 given to us, for purchase of services made in pursuance of contracts or
 arrangements entered in to the Register in pursuance of Section 301 of
 Act and exceeding the value of Rupees Five Lacs in respect of each
 party during the year, no comparison of prices could be made available
 as the services are of special nature. There were no purchase of goods
 and materials, and sale of goods, materials and services during the
 year.
 
 6.  In our opinion and according to the information and explanations
 given to us, the company has not accepted any deposits within the
 meaning of Section: 58A and 58AA or any other relevant provisions of
 the Companies Act, 1956 and the Companies (Acceptance of Deposits)
 Rules, 1975 with regard to the deposits accepted from the public.
 
 7.  In our opinion and according to the information and explanations
 given to us the internal audit functions carried
 
 out during the year by a firm of Chartered Accountants appointed by the
 management have been commensurate with the size of the Company and
 nature of its business.
 
 8.  We have been informed that the Central Government has not
 prescribed maintenance of cost records under Section 209(1) (d) of the
 Companies Act, 1956 for the product of the company.
 
 9.  According to the information and explanations given to us in
 respect of statutory and other dues:
 
 a.  We are informed that the provisions of Employees Provident Fund
 Act & Employees State Insurance Act, 1948 are not applicable to the
 Company during the year. According to the records of the Company,
 undisputed statutory dues including Investors Education and Protection
 Fund, Income-tax, Sales-tax/ VAT, Wealth Tax, Custom Duty, Service Tax,
 Excise Duty, Cess, Fringe Benefits Tax and other material statutory
 dues have been generally regularly deposited with the appropriate
 authorities. According to the information and explanations given to us,
 no undisputed amounts payable in respect of the aforesaid dues were
 outstanding as at 31st March, 2009 for a period of more than six months
 from the date of becoming payable except undisputed amounts of Rs. 0.54
 lacs being royalty payable to Government of Gujarat.
 
 b.  According to the information and explanations given to us, no
 disputed amounts payable in respect of income-tax, wealth-tax,
 sales-tax/ vat, Customs duty, excise duty, service tax, fringe benefits
 tax and cess were in arrears, as at 31st March, 2009.
 
 10.  The accumulated losses of the Company are not more than fifty
 percent of its net worth. The company has incurred a cash loss of Rs.
 180.78 lacs during the financial year covered by our audit and in the
 immediately preceding financial year the company had incurred the cash
 Loss amounting to Rs. 114.70 lacs. In arrival of the accumulated
 losses and net worth we have considered the qualifications which are
 quantifiable in the audit report of the years to which such losses
 pertains.
 
 11.  Based on our audit procedures and according to the information and
 explanations given to us, we are of the opinion that the Company has
 not defaulted in repayment of dues to financial institutions/banks as
 at the Balance sheet date. The Company has not issued any Debenture.
 
 12.  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. Therefore,
 the provisions of clause 4 (xii) of the Companies (Auditors Report)
 Order, 2003 are not applicable to the Company.
 
 13.  In our opinion the Company is not a chit fund or a nidhi / mutual
 benefit fund/society. Therefore, the provisions of clause 4(xiii) of
 the Companies (Auditors Report) Order, 2003 are not applicable to the
 Company.
 
 14.  In our opinion, the Company is not dealing or trading in shares,
 securities, debentures and other investments. As such the provisions of
 clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not
 applicable to the Company.
 
 15.  Based on examination of documents and records made available and
 on the basis of information and explanations given to us, the Company
 has not given any guarantee for loans taken by others from banks or
 financial institutions.
 
 16.  According to the records of the Company, the company has not
 obtained any term loans. Hence, comments under the clause are not
 called for.
 
 17.  According to Information and explanations given to us and on an
 overall examination of the balance sheet of the Company, in our
 opinion, there are no funds raised on a short term basis, which has
 been used for long term purpose,
 
 18.  The Company has made preferential allotments of 10310000 equity
 shares of face value of Rs. 10 each have been made to parties mentioned
 in the register maintained under section 301 of the Companies Act, 1956
 at a price of Rs. 16.72 per share. In our opinion, the price of Rs.
 16.72 per share at which the allotment has been made is not prejudicial
 to the interest of the company.
 
 19.  The Company has neither issued nor had any outstanding debentures
 during the year.
 
 20.  The Company has not raised any money by way of public issue during
 the year.
 
 21.  To the best of our knowledge and belief and according to the
 information and explanations given to us, no fraud on or by the Company
 which is material in amount and nature has been noticed or reported
 during the course of our audit.
 
                                           For, Shirish Desai & Co.
                                           Chartered Accountants
 
 Place: Noida                              Dilip K. Thakkar
 Date : 25-06-2009                         Partner
                                           Membership No. 31269