1. We have audited the accompanying financial statements of Oil India
Limited (the Company''''), which comprise the Balance Sheet as at 31st
March 2014, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and Significant Accounting Policies
and Additional Notes, in which are incorporated the Company''s share in
the total value of assets, liabilities, expenditure and income based on
fifteen audited and eighteen unaudited financial statements of Joint
Ventures for exploration and production of crude oil and natural gas.
2. The attached financial statements and other financial information
include Company''s share of net of fixed assets, net current
liabilities, expenses and incomes aggregating to Rs 210.01crore,
Rs.40.77crore, Rs.313.74crore and Rs.48.51crore respectively as at
March 31, 2014 in respect of fifteen of its unincorporated joint
ventures, the accounts of which have been audited by the auditors of
the respective Joint Ventures and relied upon by us.
3. The attached financial statements and other financial information
include Company''s share of net of fixed assets, net current assets,
expenses and incomes aggregating to Rs. 301.59 crore, Rs. 191.67 crore,
Rs. 206.87 crore and Rs.175.33 crore respectively as at March 31, 2014
in respect of eighteen of its unincorporated joint ventures, the
accounts of which have not been audited by the auditors of the
respective Joint Ventures. The financial statements and other financial
information have been incorporated based on un-audited financial
statements prepared by the Management and relied upon by us.
4. The audited and the unaudited statements of the above
unincorporated joint ventures are prepared to meet requirements of
production sharing contracts and are special purpose statements and
none of the statements audited as well as unaudited, are drawn up in
the same format as presented by the Company.
Management''s Responsibility for the Financial Statements
5. Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 (the Act) which as per the General
Circular No.15/2013 dated 13.09.2013 issued by Ministry of Corporate
Affairs continues to apply under Section 133 of the Companies Act,
2013. This responsibility includes the design, implementation and
maintenance of internal control relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
6. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
7. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
8. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
9. In our opinion and to the best of our information and according to
the explanations given to us, the financial statements give the
information required by the Act 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 31st March, 2014;
b) In the case of the statement of Profit and Loss, of the profit for
the year ended on that date;and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter Paragraph
10. Without qualifying our report, we draw attention to the following
Notes appearing in the Financial Statement:
i. Note 16.2 - regarding uncertainty related to the outcome of appeal
filed by the Company against the order of Hon''ble High Court and
consequential payment of decreed amount of Rs.99.05 crore shown under
Other Non-Current Assets and not treating the same as expense.
ii. Note 31.7.2- regarding recognition of gain on foreign currency
translation of Rs 238.96 crore.
iii. Note 31.7.3 - regarding uncertainty due to non provision of the
recoverable dues of Rs.94.47 crore from Suntera Nigeria 205 Ltd. shown
under Short Term Loans and Advances in which the Company is having
25% interest in equity.
iv. Note 31.12- regarding Use of Depreciation method on other
Production Facilities being part of Producing Properties, in preference
to the Depletion Method based on Unit of Production as recommended vide
Guidance Note on Accounting for Oil & Gas Producing Activities-2013
issued by the Institute of Chartered Accountants of India.
Report on Other Legal and Regulatory Requirements
11. 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.
12. As required by Section 227(3) of the Act, 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 purpose of our
b) 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
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 comply with the Accounting Standards referred to in
sub- section (3C) of Section 211 of the Act;
e) Disclosure in terms of clause (g) of sub-section (1) of Section 274
of the Act is not required for Government Companies as per Notification
No.GSR 829(E) dated October 21, 2003 issued by the Department of
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the Act
nor has it issued any Rules under the said section, prescribing the
manner in which such cess is to be paid, no cess is due and payable by
ANNEXURE TO THE AUDITORS'' REPORT (Referred to in paragraph 11 of our
report to the members of Oil India Limited (''the company'') for the year
ended 31st March 2014.)
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
updating and reconciling with physical verification.
(b) The fixed 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
(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 loans to two parties covered
in the register maintained under section 301 of the Companies Act, 1956
(the Act). The amount outstanding at the year-end was Rs. 360.50
crores and the maximum amount outstanding at any time during the year
was Rs. 381.00 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 over
(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 there under are not applicable to the
7. The Company has an internal audit system commensurate with the size
and nature of its business.
However, the coverage of the area and monitoring of the internal audit
system need to be strengthened.
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 31.03.2014 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 Nature Period to which Amount Forum
Statute of Dues the amount (Rs.in where
relates Crores) Dispute is
Financial year pending
Assam Tax on 2004-05 to 702.02 High Court,
Taxation (on land 2013-14 Guwahati.
Central Excise December 2008 14.27 CESTAT,
Excise Act, Duty to December 2009 Kolkata
1944 January 2010 to 11.92 -do-
January 2011 to 17.47 -do-
January 2012 to 31.54 -do-
January 2013 to -do-
June 2013 9.68
Service April 11 to Dec 11 19.8 -do-
Tax January 12 to 9.31 -do-
September 12 0.34 Comm.Central
July''08 to Mar''09 Excise & S.
April 09 to Mar''10 0.40 -do-
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 terms and conditions of the guarantees given by the Company
for loans taken by its subsidiaries and others from bank or financial
institutions are not prejudicial to the interest of the company.
16. Term loans raised by the Company were applied for the purpose for
which the loans were obtained.
17. The Company has raised short term bridge loan with an intent to
replace it by long term loan which has been used for long term
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 SAHA GANGULI & ASSOCIATES For B.M. CHATRATH & CO.
Chartered Accountants Chartered Accountants
Firm Regn.No.302191E Firm Regn.No.301011E
(S. K. Saha) (P. R. Paul)
Membership No.051392 Membership No.051675
Date : 27.05.2014