Dear shareholders
 
 It is a privilege and an honour to present to you Essar Oil Limited''s
 (EOL) 21st annual report and the audited accounts for the financial
 year ended 31st March, 2011.
 
 I am deeply indebted to each of you for reposing faith in your company.
 The commitment has helped your company reach a position of considerable
 strength.
 
 Since the Group began its journey in 1969, our growth as a corporate
 has mirrored that of the Indian economy.  Today, we are among the top
 five players in each of our six key businesses: Steel, Oil, Power,
 Shipping Ports & Logistics, Communications and Projects.
 
 We entered the oil & gas sector in the 1980s with the acquisition of a
 fleet of drilling rigs which we contracted to Indian and international
 oil & gas majors. Your company won its first oil & gas block in the
 1990s, and went on to win many more blocks in the New Exploration &
 Licensing Policy (NELP) and Coal Bed Methane (CBM) bidding rounds. One
 of our CBM blocks is already producing gas and post commercial sales
 will add substantially to our bottom-line. In the coming years, we want
 to be in a position where revenues from our exploration & production
 business act as a natural hedge to our other businesses in the oil &
 gas vertical.
 
 In 1994, EOL started work on building the Vadinar refinery. The project
 faced several hurdles and started commercial production in 2008. It was
 a time that put our entrepreneurial character to the most difficult
 test, and helped bring out the positive attitude that the Essar Group
 has always been associated with.
 
 EOL began commercial sales from the refinery just three years ago, but
 the single-minded focus of the refinery team has helped transform this
 manufacturing unit into one of India''s most valuable industrial assets.
 The refinery is now poised for the next level of growth: Following the
 Phase I expansion this year, you can expect a 25 per cent growth in
 production and a substantial enhancement in the refinery complexity
 that will help us produce fuels of the highest international standards
 at a significantly lower cost and thereby significantly improve the CP
 GRM.
 
 Over the years, your company has painstakingly built a countrywide
 network of Essar Oil-branded, franchise- owned and franchise-operated
 retail outlets. Though the current market conditions are not in favour
 of private sector oil retailers, we have created a retail
 infrastructure that can be quickly ramped up once the conditions are
 more conducive to retail growth. As in the case of the refinery, we are
 confident that our patience and perseverance in growing our oil
 retailing business will eventually bear fruit.
 
 Vertical integration is a key element in our corporate strategy. In
 each of our businesses, we have captured the complete value chain.
 Accordingly, EOL today has a strong presence across the hydrocarbon
 value chain from E&P, to refining to retail.
 
 Building a vertically integrated business is not for the faint hearted.
 It requires several years of hard work and long-term vision. But
 eventually it reaps rich rewards for all stakeholders. I hope this
 Annual Report will bear testimony to this fact.
 
 I am grateful to our employees for their contribution in taking Essar
 Oil to the heights that it has reached today.
 
 thank our project management consultants, business associates,
 suppliers and franchisees for their support through the year. I am
 grateful to our bankers and financial institutions, as well as the
 Central Government and Gujarat Government, for their support and
 guidance. Finally, I sincerely acknowledge the support we have received
 from you, our shareholders, and from my colleagues on the Board.
 
 I am confident that we will be able to surpass our achievements in the
 coming year and take your company to greater heights.
 
 Thank you
 
 Shashi Ruia
 
 Chairman