Reliance Petroleum

1.  We have audited the attached Balance Sheet of RELIANCE PETROLEUM
 LIMITED as at March 31,2008 and also the Cash Flow Statement 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.
 No Profit and Loss Account has been prepared since the Company is yet
 to commence its revenue operations and the necessary details as per
 part II of Schedule VI to the Companies Act, 1956 have been disclosed
 in Note no. 1 of Schedule J as Project Development Expenditure.
 
 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 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, issued
 by the Central Government 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 and 5 of the said Order.
 
 4.  Further to our comments 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 purposes 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 Cash Flow Statement dealt with by this
 report are in agreement with the books of account;
 
 iv. In our opinion, the Balance Sheet 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;
 
 v.  On the basis of the written representations received from the
 Directors as on March 31, 2008 and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 March 31, 2008 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 together with the notes
 thereto, 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 March 31, 2008; and
 
 b) 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)
 
 (i) In respect of its fixed assets:
 
 a) The Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets on the
 basis of available information.
 
 b) As explained to us, all the fixed assets have been physically
 verified by the management in a phased periodical manner, which in our
 opinion is reasonable, having regard to the size of the Company and
 nature of its assets. No material discrepancies were noticed on such
 physical verification.
 
 c) In our opinion, the Company has not disposed off a substantial part
 of its fixed assets during the year and the going concern status of the
 Company is not affected.
 
 (ii) In respect of its inventories :
 
 a) The inventories have been physically verified during the year by the
 management. 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 nature of its business.
 
 c) The Company has maintained proper records of inventories. As
 explained to us, there was no material discrepancies noticed on
 physical verification of inventories as compared to the book records.
 
 (iii) The Company has not granted or taken any loan secured/ unsecured
 to / from Companies, Firms or other parties covered in the register
 maintained under section 301 of the Companies Act, 1956. Accordingly,
 clause 4(iii) of the Companies (Auditors Report) Order, 2003 is not
 applicable to the Company.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there is an internal control system commensurate with the
 size of the Company and the nature of its business for the purchase of
 inventory, fixed assets and for the sale of goods. During the financial
 year, the Company did not undertake any activity of sale of services.
 During the course of our audit, we have not observed any continuing
 failure to correct major weaknesses in the internal control system.
 
 (v) According to the information and explanations given to us, there
 are no contracts or arrangements referred to in Section 301 of the
 Companies Act, 1956 that need to be entered in the register required to
 be maintained under that section.
 
 (vi) The Company has not accepted any deposits from the public during
 the year. Therefore, the provisions of clause (vi) of the Companies
 (Auditors Report) Order, 2003 are not applicable to the Company.
 
 (vii) In our opinion the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) According to the information and explanations given to us, the
 Companys project for setting up refinery and polypropylene plant is at
 advance stage of construction and the Company has not commenced the
 commercial production and hence maintenance of cost records is not
 applicable during the year under audit.
 
 (ix) In respect of statutory dues :
 
 a) According to the records of the Company, undisputed statutory dues
 including Provident Fund, Investor Education and Protection Fund,
 Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise
 Duty, Cess and any other material statutory dues, to the extent
 applicable, 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 March 31, 2008 for a period of more than
 six months from the date they became payable;
 
 b) The disputed statutory dues aggregating to Rs. 37 04 397, that has
 not been deposited on account of disputed matters pending before
 appropriate authority is as under :
 
 Name of                  Nature of              Amount
 the Dues                (in Statute             Rupees)
 
 Customs                  Custom                 37 04 397
 Act, 1962                Duty
 
 Period to Forum
 which the where
 amount    dispute is
 relates   pending
 
 2006-07   Commissioner
 of Customs
 (Appeals)
 
 (x) The Company has been registered for a period less than five years
 and hence the provisions of clause 4 (x) of the Companies (Auditors
 Report) Order, 2003 are not applicable to the Company.
 
 (xi) 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 the financial institutions and
 banks.  The Company has not issued any debentures.
 
 (xii) In our opinion and according to the explanations given to us and
 based on the information available, no loans and advances have been
 granted by the Company on the basis of security by way of pledge of
 shares, debentures and other securities.
 
 (xiii) In our opinion and according to the information and explanations
 given to us, the Company is not a chit fund or a nidhi/mutual benefits
 fund/ society.  Therefore, the provisions of clause 4(xiii) of the
 Companies (Auditors Report) Order, 2003 are not applicable to the
 Company.
 
 (xiv) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of the
 transactions and contracts in respect of investments in mutual funds
 and timely entries have been made therein. All the investments have
 been held by the Company in its own name.
 
 (xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from
 banks and financial institution.
 
 (xvi) To the best of our knowledge and belief and according to the
 information and explanations given to us, in our opinion, the term
 loans raised were prima facie been either used for the purposes for
 which they were raised or pending utilisation been temporarily invested
 in mutual funds.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the Balance Sheet of the Company, there are
 no funds raised on short term basis during the year under audit and
 hence the question of using the same for long term investment does not
 arise.
 
 (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, 1956.
 
 (xix) According to the information and explanations given to us, the
 Company has not issued any debentures during the year under audit.
 
 (xx) The Company has not raised any monies by way of public issue
 during the year.
 
 (xxi) 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
 was noticed or reported during the year.
 
 For Chaturvedi & Shah                      For Deloitte Haskins & Sells
 Chartered Accountants                             Chartered Accountants
 
 Rajesh Chaturvedi                                  P. R. Barpande
 Partner                                            Partner
 Membership No.: 45882                           Membership No.: 15291
 
 Mumbai
 April 16, 2008