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
 our opinion.
 
 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
 audit;
 
 (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
 those books;
 
 (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
 account;
 
 (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;
 and
 
 (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
 and reconciliation.
 
 (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
 verification.
 
 (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
 reasonable.
 
 (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
 due.
 
 (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
 applicable.
 
 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
 company.
 
 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
 maintained.
 
 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 
                             Financial 
                             year          Crores)   pending
 
 Assam 
 Taxation (on    Tax on      2004-05 to 
                             2011-12       624.82    High Court,
 specified 
 land) Act,      land                                Guwahati.
 2004
 
 Finance 
 Act, 1994       Service     2003-04         0.79    CESTAT, Delhi
                 Tax
 
 Central Excise 
 Act,            Excise      December
                             2008 to       14.27     CESTAT,
 1944            Duty        December
                             2009                    Kolkata
 
                             January 
                             2010 to       11.92     CESTAT,
                             December 
                             2010                    Kolkata
 
 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
 debentures.
 
 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
 year.
 
 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
 
 Sd/-                           Sd/-
 
 (S.C. BHADRA)             (S.K. SAHA)
 
 Partner                    Partner
 
 Membership No: 017054      Membership No: 051392
 
 Place: New Delhi 
 
 Date: 28th May 2012