To the Members of Essar Oil Limited
 
 Your Directors have pleasure in presenting the 21st annual report &
 audited accounts of the Company for the fnancial year ended 31st March,
 2011.
 
                                                   (Rs. in Crore)
 
                                                2010-2011   2009-2010
 
 Gross Turnover                                 53,119.10   42,401.68
 
 Net Income                                     47,342.21   37,376.54
 
 Proft before Depreciation and Tax               1,559.25      756.89
 
 Less: Depreciation/Amortisation                   730.86      728.31
 
 Proft before Taxes                                828.39       28.58
 
 Less: Provision for Income Tax/Deferred
 
 Tax Liability                                     174.51       (0.88)
 
 Net Proft after tax                               653.88       29.46
 
 Add: Balance brought forward from
 
 previous year                                    (556.51)    (556.96)
 
 Less: Transfer to Debenture Redemption
 
 Reserve                                            60.33       29.46
 
 Add: Transfer from Foreign Project Reserve             –        0.45
 
 Total amount available for appropriations          37.04           –
 
 Balance to be carried to Balance Sheet             37.04     (556.51)
 
 Financial results
 
 This fnancial year has been a year of signifcant importance since the
 refnery started commercial production in 2008. During the year the
 Company generated a strong revenue growth of 25% at Rs. 53,119 crore, up
 from Rs. 42,402 crore in the previous fnancial year. This growth can be
 attributed both to increase in throughput and higher oil prices. The
 Current Price Gross Refnery Margin (CP GRM) for the refnery business
 increased to US$ 6.91 per barrel from US$ 3.7 per barrel for the
 previous fnancial year. The EBIDTA grew by more than 43% to Rs. 2,779
 crore from Rs. 1,938 crore for last fnancial year. Annual Proft After Tax
 (PAT) jumped to Rs. 654 crore from Rs. 29 crore in previous fnancial year,
 a 23-fold increase.
 
 Considering the profts for the current fnancial year, carry forward of
 losses of previous fnancial years and funds requirements for meeting
 expansion plans of the Company, the Board has not recommended any
 dividend for the fnancial year. Information on the operational
 performance, etc. of the Company for the fnancial year is given in the
 Management Discussion and Analysis which is annexed to the Directors''
 Report.
 
 Share Capital and Issue of Securities
 
 During the fnancial year, pursuant to shareholders approval obtained at
 the Extraordinary General Meeting held on 22nd April, 2010, the Company
 has allotted equity shares in two tranches, 9,28,44,531 of Rs. 10/- each,
 at a price of Rs. 144/- per share aggregating to Rs. 1,336.96 crore on 27th
 April, 2010 and 7,12,92,951 equity shares of Rs. 10/- each, at a price of
 Rs. 144/- per share aggregating to Rs. 1026.62 crore on 28th May, 2010, to
 an overseas depository on issue of Global Depository Shares (GDSs),
 Promoters on preferential issue basis. The funds have been raised for
 part fnancing the cost of Refnery expansion project and for other
 general corporate purposes.
 
 Further, pursuant to the said approvals, the Company has raised US$ 262
 million by allotment of Foreign Currency Convertible Bonds (FCCBs) in
 two tranches viz: US$ 115 million on 15th June, 2010, convertible into
 equity shares of Rs. 10/- each and / or GDSs at a price of Rs. 138 per
 share and US$ 147 million on 9th July, 2010 convertible into equity
 shares of Rs. 10/- each and / or GDSs at a price of Rs. 153 per share to
 the Promoters for part fnancing expansion programmes.
 
 The Company, within the meaning of section 4(6) of the Companies Act,
 1956, is an indirect subsidiary of Vadinar Oil, Mauritius, which along
 with its subsidiary holds 87.09% of the total share capital. Vadinar
 Oil in turn is a wholly owned subsidiary of Essar Energy Plc.
 
 Directors
 
 In October 2010, IDBI Bank Ltd. nominated Shri Melwyn Rego as its
 nominee on the Board in place of Dr. G Goswami. Further, during the
 year, Shri P Sampath stepped down as Director Finance and continues as
 Non Executive Director. The Board wishes to place on record its
 appreciation for the guidance and valuable services rendered by Dr. G
 Goswami during his tenure as member of the Board.
 
 Shri S N Ruia, Shri A S Ruia and Shri P Sampath retire by rotation at
 the ensuing Annual General Meeting and offer themselves for
 re-appointment. Particulars of the directors being re-appointed, as
 required under clause 49 of the listing agreement with the Stock
 Exchanges, are given in the Notice convening the ensuing 21st Annual
 General Meeting, forming part of the Annual Report.
 
 Directors'' Responsibility Statement
 
 Pursuant to the provisions of section 217(2AA) of the Companies
 Act,1956, it is hereby confrmed:
 
 i) that in the preparation of the accounts for the fnancial year ended
 31st March, 2011, the applicable accounting standards have been
 followed along with proper explanation relating to material departures;
 
 ii) that the Directors have selected such accounting policies and
 applied them consistently and made judgements and estimates that were
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company at the end of the fnancial year and of the
 proft/loss of the Company for that period;
 
 iii) that the Directors have taken proper and suffcient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act,1956 for safeguarding the assets of the
 Company and for preventing and detecting fraud and other
 irregularities; and
 
 iv) that the Directors have prepared the accounts for the fnancial year
 ended 31st March, 2011 on a ‘going concern'' basis.
 
 Corporate Governance
 
 In terms of clause 49 of listing agreement with the Stock Exchanges, a
 certifcate from the auditors of the Company on compliance of conditions
 of Corporate Governance is annexed to the Directors'' Report. A report
 on Corporate Governance as provided in clause 49 of the listing
 agreement is included in the Annual Report.
 
 Particulars of Employees
 
 Information as per section 217(2A) of the Companies Act, 1956 read with
 the Companies (Particulars of Employees) Rules, 1975, as amended, is
 given in the Annexure forming part of this Report.  However, as per the
 provisions of section 219(1)(b)(iv) of the said Act, the Report and
 Accounts are being sent to all shareholders of the Company excluding
 the statement of particulars of employees under section 217(2A) of the
 said Act. Any shareholder interested in obtaining a copy of this
 statement may write to the Head – Human Resources, for the same, at the
 Registered Offce of the Company.
 
 Energy, Technology Absorption and Foreign Exchange The particulars as
 prescribed under section 217(1)(e) of the Act read with the Companies
 (Disclosure of Particulars in the Report of Board of Directors) Rules,
 1988 are set out in Annexure A to this Report.
 
 Fixed Deposits
 
 Your Company has not accepted any public deposits under section 58A of
 the Companies Act, 1956 during fnancial year under report.
 
 Subsidiary Companies
 
 During the year, the Hon''ble High Court of Gujarat at Ahmedabad
 sanctioned a Scheme of Amalgamation of wholly owned subsidiary, Essar
 Oil Vadinar Limited with the company vide orders passed on May 3, 2010.
 The merger is effective retrospectively from April 1, 2008. Post merger
 of Essar Oil Vadinar Ltd., the Company does not have any subsidiary.
 
 Auditors and Auditors'' Report
 
 M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad,
 Auditors of the Company hold offce until the conclusion of the ensuing
 Annual General Meeting. M/s. Deloitte Haskins & Sells, Chartered
 Accountants, Ahmedabad, have informed the Company that, if appointed,
 their appointment will be within the limits prescribed under section
 224(1B) of the Companies Act, 1956.  Accordingly, the members'' approval
 is being sought to their appointment as the Auditors of the Company at
 the ensuing Annual General Meeting. Other observations, if any, of the
 Auditors in the Audit Report are explained wherever necessary in the
 appropriate notes to accounts and are self explanatory.
 
 Acknowledgement
 
 The Board wishes to express appreciation and place on record its
 gratitude for the faith reposed in and co-operation extended to the
 company by the Government of India, state governments, various
 government agencies/departments, fnancial institutions, banks,
 customers, suppliers and investors of the company. Your Directors place
 on record their appreciation of the dedicated and sincere services
 rendered by the employees of the company.
 
                          For and on behalf of the Board of Directors
 
 Mumbai                                                      S N RUIA
 
 July 11, 2011                                               CHAIRMAN