1. We have audited the accompanying financial statements of Oil India
Limited (the Company) which comprise the Balance Sheet as at 31st
March, 2012, and the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and Significant Account- ing
Policies and Additional Notes, in which are incorporated the company''s
share in the total value of assets, liabilities, expenditure and income
based on three audited and thirty seven unaudited financial statements
of Joint Ventures for exploration and production of crude oil and
natural gas. These financial statements are the responsibility of the
Company''s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the 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 amount 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
3. As required by the Companies ( Auditor''s Report) Order, 2003
(the Order), as amended, issued by the Central Government of
India in terms of sub-section (4A) of Section 227 of the Act and on the
basis of our examination of the books and records of the Company
carried out in accordance with the generally accepted auditing
practices in India and according to the information and explanations
given to us, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred under Para 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
(b) In our opinion, proper books of account as required by law have
been kept by the Company, so far as appear from our examination of
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss 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;
(e) On the basis of written representations received from the
directors, as on 31st March, 2012 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of the 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 read with the
Significant Accounting Policies and the Additional Notes 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 31st March, 2012;
(ii) In the case of the Statement of Profit and Loss, 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 flow of the
Company for the year ended on that date.
(Referred to in paragraph 3 of our report to the members of Oil India
Limited (the company) for the year ended 31st March 2012.)
1. (a) The company has generally maintained proper records showing
full particulars including quantitative details and situation of fixed
assets. However, the records of the land are in the process of updation
(b) The fixed assets, other than underground assets and joint venture
assets, have been physically verified by the Management in phased
manner designed to cover all items over a period of five years, which
is reasonable having regard to the size of the company and the nature
of its assets. No material discrepancies have been noticed on such
(c) None of the substantial part of fixed assets has been disposed off
by the company during the year.
2. (a) Stocks of Crude Oil and Liquefied Petroleum Gas (LPG) have been
physically verified by the management during the year and stock of
stores and spare parts (excluding stock in transit and/or under
inspection with suppliers/contractors) have been physically verified by
the management in phased manner. The frequency of verification is
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) The company is maintaining proper records in respect of stocks of
crude oil, LPG and stock of stores and spare parts. No material
discrepancies have been noticed on verification between the physical
assets and the book records.
3. (a) The company has granted unsecured loan to one party covered in
the register maintained under section 301 of the Companies Act, 1956
(the Act). The amount outstanding at the year end was Rs. 131
crores and the maximum amount outstanding at any time during the year
was Rs. 131 crores.
(b) The rate of interest and other terms and conditions of the loan
granted is not prima facie prejudicial to the interest of the company.
(c) The repayment of principal and the payment of interest is not yet
(d) There is no overdue amount in respect of loans granted to the party
listed in the register maintained under section 301 of the Act.
(e) The company has not taken any loans secured or unsecured, from
companies firms or other parties covered in the register maintained
under section 301 of the Act and consequently, the requirements of
clause (iii)(f) and (iii)(g) of paragraph 4 of the Order, are not
4. There exists an adequate internal control system commensurate with
the size of the company and the nature of its business with regard to
purchases of inventory, fixed assets and with regard to the sale of
goods and services. We have not observed any continuing failure to
correct major weaknesses in internal control system of the company.
5. (a) The particulars of contracts or arrangement that need to be
entered into the register maintained under Section 301 of the Act have
been so entered.
(b) The transactions made in pursuance of contracts or arrangements
entered in the register maintained under section 301 of the Act and
exceeding the value of Rs. 5 lakhs in respect of any party during the
year have been made at prices which are reasonable having regard to the
prevailing market prices at the relevant time.
6. The company has not accepted deposits from the public. Hence, the
provisions of Sections 58A, 58AA or any other relevant provisions of
the Act and the Rules framed thereunder are not applicable to the
7. The company has an internal audit system commensurate with the size
and nature of its business.
8. The Central Government of India has prescribed maintenance of cost
records under Section 209(1)(d) of the Act for the production of crude
oil, natural gas, LPG, and pipeline activities for transportation of
crude oil. We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the company
pursuant to the rules made by the Central Government for the
maintenance of such cost records and we are of the opinion that prima
facie the prescribed accounts and records have been made and
9. (a) The company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund, income
tax, sales tax, wealth tax, service tax, customs duty, excise duty, and
other material statutory dues applicable to it.
(b) No undisputed amounts payable in respect of income tax, sales tax,
wealth tax, service tax, customs duty and excise duty were in arrears,
as at 31.03.2012 for a period of more than six months from the date
they became payable.
(c) Details of disputed dues in respect of income tax, sales tax,
wealth tax, service tax, customs duty and excise duty which have not
been deposited on account of any dispute are given below:-
Name of the
Statute Nature Period to
which the Amount Forum where
of Dues amount
relates (Rs. in Dispute is
year Crores) pending
Taxation (on Tax on 2004-05 to
2011-12 624.82 High Court,
land) Act, land Guwahati.
Act, 1994 Service 2003-04 0.79 CESTAT, Delhi
Act, Excise December
2008 to 14.27 CESTAT,
1944 Duty December
2010 to 11.92 CESTAT,
10. The company has no accumulated losses as at the end of the
financial year and it has not incurred any cash losses during the
financial year and in the immediately preceding financial year.
11. The company has not defaulted in repayment of dues to any
financial institution or bank. The company has not issued any
12. The company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The company is not a chit fund or a nidhi / mutual benefit fund /
society. Therefore the provisions of paragraph 4 (xiii) of the Order
are not applicable to the company.
14. The company is not dealing or trading in shares, securities,
debentures and other investments. Therefore, the provisions of Clause 4
(xiv) of the Order are not applicable to the company.
15. The company has not given any guarantee for loans taken by others
from bank or financial institutions. Therefore, the provi- sions of
clause 4 (xv) of the Order are not applicable to the company.
16. The company has not raised any term loan during the year.
17. The company did not raise any funds on short term basis which have
been used for long term investment.
18. The company has not made preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Act.
19. The company has not issued any debentures during the year.
20. The company has not raised any money by public issue during the
21. No fraud on or by the company has been noticed or reported during
the course of our audit.
For SRB & ASSOCIATES For SAHA GANGULI & ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Regn. No: 310009E Firm Regn. No: 302191E
(S.C. BHADRA) (S.K. SAHA)
Membership No: 017054 Membership No: 051392
Place: New Delhi
Date: 28th May 2012