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Directors Report of Oil India Ltd.

Mar 31, 2016

Dear Members,

On behalf of the Board of Directors, I hereby present the 57th Annual Report on the operations of the Company containing Audited Statements of Accounts together with the Auditors'' Report and Comments of the Comptroller and Auditor General of India for the year ended March 31, 2016.

1. SIGNIFICANT HIGHLIGHTS

The financial and operational performance of the Company is as under:-

A. Financial Highlights

During the year, OIL has earned total revenue of Rs. 11140.77 crore as against Rs. 11019.86 crore in FY15. The Profit before Tax (PBT) in FY16 was Rs.3463.44 crore against PBT of Rs. 3728.70 crore in the FY15. Profit after Tax (PAT) was Rs. 2330.11 crore in FY16 against PAT of Rs. 2510.20 crore in FY15.

Profitability of the Company was affected mainly on account of impairment of investments in overseas projects resulting from fall in crude prices. The summarized Statement of Profit and Loss is given below:

Particulars Financial Financial year 2016 year 2015

Income from Operations 9764.87 9748.23

Other income 1375.90 1271.63

EBDITA 4990.73 4802.02

Finance Cost 346.90 340.68

Depreciation, Depletion and Amortization 966.06 732.64

Exceptional Items 215.13 -

Profit before Tax (PBT) 3463.44 3728.70

Profit after Tax (PAT) 2330.11 2510.20

Appropriations

Interim Dividend 480.91 601.14

Tax on Interim Dividend 97.90 120.19

Proposed Final Dividend 480.91 601.14

Tax on Proposed Dividend 97.90 122.38

Transfer to Debenture Redemption Reserve 264.79 236.96

Transfer to General Reserve 907.70 828.39

During the year, Company has made planned investment of Rs. 3622 crore against budget estimates of Rs. 3917 crore which is expected to increase in future with the increase in exploratory and operational activities.

B. Operational Highlights

(i) Crude Oil Production

During the year, crude oil production was 3.247 MMT (inclusive of production from Kharsang JVC) as against production of 3.440 MMT in FY 15. Main reason for shortfall in achievement can be attributed to (a) more than expected decline rate from the mature fields (b) less than planned retrieval through drilling and workover efforts and (iii) Direct losses arising out of Bandhs, Blockades, miscreants activities etc.

(ii) Natural Gas Production

The natural gas production was 2838 MMSCM in FY16 against 2722 MMSCM in FY15 which is higher by 4.26%. The sale of natural gas was 2314 against 2181 MMSCM in FY15. This is the highest ever production and sale of natural gas in the history of OIL.

(iii) LPG Production

During FY16, LPG production was 41030 MT against 43570 MT in FY15. The sale of LPG was 41172 MT against 43456 MT in FY15.

(iv) Pipeline Operations

During the year, OIL''s crude oil pipeline transported a total of 6.37 MMT of crude oil out of which Naharkatia- Bongaigaon sector transported 3.21 MMT of OIL crude and 0.93 MMT of ONGC crude. Barauni-Bongaigaon sector transported 2.23 MMT of imported crude. OIL has also transported 1.74 MMT of products through Numaligarh-Siliguri Product Pipeline.

(v) Renewable Energy

During FY16, OIL commissioned its second Solar Energy Power Project , of 9 MWp Capacity at Ramgarh, Jaisalmer, Rajasthan. The Project was commissioned on 25th Feb 2016 and with the commissioning of this project, the total Renewable Energy Installed Capacity of the Company stands at 135.6 MW, comprising of 121.6 MW of Wind and 14 MW of Solar Projects .

During FY16, OIL generated a revenue of approximately Rs. 105.5 crore from the commercial renewable energy projects, which includes revenues accrued from the Wind as well as Solar Plants .

- The 5 MW Solar Power Plant at Ramgarh, Jaisalmer, Rajasthan produced 9 Million Units of Electricity which was sold to Jodhpur Vidyut Vitaran Nigam Limited, Government of Rajasthan.

- The 9 MW Solar Power Plant at Ramgarh, Jaisalmer, Rajasthan produced 1.52 Million Units of Electricity which was sold to Jodhpur Vidyut Vitaran Nigam Limited, Government of Rajasthan.

- The 13.6 MW Wind Farm at Ludurva, Jaisalmer, Rajasthan produced 18.25 Million Units of Electricity which was sold to Jaipur Vidyut Vitaran Nigam Limited, Government of Rajasthan.

- The 54 MW Wind Farm at Dangri, Jaisalmer, Rajasthan produced 67.78 Million Units of Electricity which was sold to Jaipur Vidyut Vitaran Nigam Limited, Government of Rajasthan.

- The 16 MW Wind Farm at Patan, Gujarat produced 34.58 million units of Electricity which was sold to Gujarat Urja Vikas Nigam Limited, Government of Gujarat.

- The 38 MW Wind Farm at Chandgarh, Madhya Pradesh produced 71.35 Million Units of Electricity which was sold to Madhya Pradesh Power Management Company Limited, Government of Madhya Pradesh.

Note : 1 Unit = 1 kilo-watt-hr

During FY16, OIL also initiated steps to undertake another 50 MW 10% Wind Energy Power Project in the state of Gujarat and/or Madhya Pradesh.

Further work on the second phase of the Wind Resource Assessment (WRA) exercise in Assam, being sponsored by OIL, has also progressed with the phase-wise Installation and Commissioning of Wind Masts and other ancillary infrastructure at the designated sites.

C. Exploration Highlights

Your Company has drilled 16 (sixteen) Exploratory Wells and carried out 2D & 3D Seismic Survey to identify New Prospects in the Petroleum Mining Lease areas of Upper Assam Basin, including spreading exploratory efforts by drilling 5(five) wells in the NELP Blocks MZ-ONN-2004/1, RJ-ONN-2004/2 & RJ-ONN- 2005/2. With the spud-in of the first High Pressure – High Temperature well in the block KG-ONN-2004/1, Your Company has stepped into a new frontier which is likely to add value to the already discovered gas in the area. The Appraisal Plan for the discovery made in 2014-15 in the NELP Block KG-ONN-2004/1 was also submitted to the Regulator. Further, all pre-drill preparatory works to spud-in the deepwater offshore well in the NELP Block CY-OSN-2009/2 were in advanced stage of completion and is expected to be spud-in the first quarter of the next financial year.

During the year, your Company has made 6 (six) discoveries in the Upper Assam Basin, of which one discovery is expected to be of significant extent and steps have been initiated for quick appraisal and production from the said find.

In overseas, 1213 LKM of 2D Seismic Data have been acquired in the Shakthi-II Block of Gabon, the interpretation of which is in progress to identify New Prospects. New discovery in the Block will quicken the process of monetisation of Lassa oil discovery. Pre- explorations studies are in progress in the 2 (two) offshore blocks of Myanmar to help the Company to decide about entry in Exploration Phase.

2. ACREAGE

Your Company''s in-country operations are spread over the onshore Petroleum Exploration License (PEL) and Petroleum Mining Lease (PML) areas in the states of Assam, Arunachal Pradesh, Mizoram, Andhra Pradesh, Puduchery and Rajasthan. Besides, your Company has ventured into shallow and deep water areas in KG Basin, Cauvery, Andaman, Mumbai and Gujarat-Kutch offshore either jointly or in partnership with other consortium partners.

Your Company is operating in 5 (five) PEL and 22 (twenty two) PML areas, allotted under the nomination regime in the states of Assam, Arunachal Pradesh and Rajasthan. In addition, as on 31.03.2016, your Company holds Participating Interest (PI) in total of 18 NELP Blocks with the right of Operatorship / Joint Operatorship in 10 Blocks and the remaining 8 (eight) Blocks as a Non-operator. In addition your Company holds 40% PI in the JV Block of Kharsang PSC, 44.086% PI in Pre-NELP block AAP-ON-94/1 and 90% PI in the CBM Block AS-CBM-2008/IV in the Upper Assam Basin.

Your Company also holds PI in the Onshore Block Shakthi-II in Gabon covering an area of 3761.25 Sq. Km. and the Offshore Blocks M-4 & YEB in Myanmar covering an approximate area of 31678 Sq. Km. alongwith the right of operatorship in all these Blocks.

3. OIL AND GAS RESERVES

Your Company has strong oil and gas reserves base for the domestic assets including JVs as furnished below:

Particulars 1P 2P 3P

Oil Condensate (MMT) 28.3828 80.7443 109.8106

Balance Recoverable 70.3646 119.4555 157.5142 Gas (BCM) *

O OEG (MMTOE) 89.7208 184.0209 244.6779

* Of these, based on projected volume of gas under various sales contracts, 1P, 2P and 3P Gas Reserves are 22.3630, 42.3140 and 62.3590 BCM respectively.

4. CAPITAL STRUCTURE

The paid-up capital of the Company is Rs 601.14 crore divided into 60,11,35,955 shares of Rs.10/- each with Government of India holding of 67.64% of total paid up capital. The Earning per Share (EPS) of the Company as on March 31, 2016 is Rs. 38.76 as compared to Rs. 41.76 at the end of previous financial year.

5. DIVIDEND

Based on the provisional financial trend, your Company paid Interim Dividend @ 80% amounting to Rs. 480.91 crore for the FY 2015-16. The Board of Directors are now pleased to recommend a final dividend @80% on the paid up capital for the FY 2015- 16, subject to the approval of the shareholders at the ensuing Annual General Meeting.

6. CREDIT RATINGS

The Company''s financial prudence is reflected in the strong credit rating ascribed by ratings agencies as given below:

Category Rating Rating Remark Agency

Long Term Moody''s Baa2 One notch Rating Investor (Stable) above India''s Service sovereign rating

Long Term Fitch Ratings ''BBB-'' At par with Rating (Stable) India''s sovereign rating

Long Term CARE Ratings CARE Highest Rating Facilities AAA awarded by CARE

Short Term CARE Ratings CARE Highest Rating Facilities A1 awarded by CARE

7. DETAILS OF THE LOANS GUARANTEES OR INVESTMENTS/DEPOSITS

Particulars of investment made, loans extended, guarantees and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statements. (Please refer to Note No 14, 15, 21 & 32.15 to the standalone financial statements}.

8. RELATED PARTY TRANSACTIONS

All contracts / arrangements / transactions entered by the Company during FY16 with related parties were in ordinary course of business and at arm''s length basis.

The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website at www.oil-india.com. Attention is also invited to Note 32.4 to the financial statements and Form AOC-2 attached here with.

9. HUMAN ASSETS

Human Resource Management at OIL is an integrated approach focusing on Organization''s faith to work with people and work through them to manage change and strive for continued excellence. OIL works towards building positive employee-organization relationship through nurturing initiatives, innovations and aspirations with best HR practices and commitment and provide professional working environment. HR policies and practices are always sensitive to employee needs. As on 31st March 2016, Company has 7532 employees consisting of 1457 Executives and 6075 Unionised Employees in the Company.

10. SPORTS

OIL believes that sports today is an integral part of all round development of human personality and achieving excellence in sports has real bearing on national prestige and morale. Therefore, employees are encouraged to play and excel in sports. As a result of above encouragement, Oil India Limited participated in National and International Sports Events in Football, Volleyball, Table Tennis, Cricket, Chess etc. and brought laurels to the Company. Oil India Limited actively supports and promotes sports under the umbrella of Petroleum Sports Promotion Board (PSPB) and also under various Government of India recognized bodies.

11. IMPLEMENTATION OF GOVERNMENT DIRECTIVES FOR PRIORITY SECTIONS

The Company attempts to comply with the directives of the Government of India for priority sections of the society. The representations of various priority sections in Executive and Unionized Employees categories in the

CATEGORY SC ST OBC Minority PWD Women

Executives 195 125 323 115 08 134

Unionized Employees 410 765 1850 377 77 225

Total 605 890 2173 492 85 359

(RAJBHASHA)

In pursuance of Official Language Policy / Act / Rules / Orders of the Govt. of India efforts are continuing towards increasing the use of Hindi in Official work. Hindi Workshops were conducted regularly so as to enable officers and employees to work in Hindi conveniently and efficiently. Meetings of Official Language Implementation Committee were held in each quarter. The responsibility of the Chairmanship of Duliajan Town Official Language Implementation Committee (TOLIC) was also borne by our Company. In-house Journal "OIL NEWS" was published in Trilingual form i.e. Assamese, Hindi and English. In- house Hindi Journal "OIL KIRAN" was also published in Hindi . Hindi Month was observed in a befitting manner in all spheres of OIL. To propagate Official Language Hindi, amongst employees and school going children, various literary competitions were held during Hindi Month Celebration. Important documents, to be laid on the table of Parliament, were also brought out in bilingual form.

16. PUBLIC PROCUREMENT POLICY FOR MICRO & SMALL ENTERPRISES (MSEs)

1. OIL''s Annual plan for procurement of goods and services from MSEs during the year 2016-17 : Rs. 125 Crores

2. Achievement:

a) Total value of goods and Crore : Goods: Rs.121.16

services procured from MSEs (including MSEs owned by SC/ST entrepreneurs) : Services : Rs.32 Crore

b) % age of procurement from : Goods : 24.98%

MSE (including MSEs owned by SC/ST entrepreneurs) out of total procurement : Services : 2.16%

17. VIGILANCE

Chief Vigilance Officer, head of the Vigilance wing, functions as link between CVC, CBI and Management and acts as advisor to head of the Organisation on Vigilance matters. Vigilance placed main thrust on the preventive vigilance rather than punitive vigilance. Towards this objective, system improvement measures were undertaken on the basis of scrutiny of various Contracts & Purchases, inspections of installations both regular and surprise. CTE type intensive examinations were also carried out. The department also assisted in a CTE inspection carried out by CTE of CVC. Corrective measures were suggested based on the findings. Further, based on registered complaints received by the Department from various sources including the CVC and the Ministry, time to time investigations were also done besides suggesting the necessary action to the organization.

During the year, 2015-16, to create awareness and to sensitize employees of the organization about the rules and regulations on Contracts & Procurement procedures, Conduct, Discipline & Appeal Rules; twenty one programs were conducted in various spheres of the organization covering around 383 employees. The programs included "Keep in Touch" (KIT), Catch Them Young (CTY) and "Vigilance Sensitisation Programs".

During the year, as per CVC''s directive, Vigilance Awareness Week (VAW) was organized from 26th to 31st October at the registered Office & Field Head Quarters (FHQ), Duliajan (Assam), Pipeline Head Quarters-Guwahati (Assam), Project Offices (at Jodhpur, Bhubaneswar, and KGB Project at Kakinada), Branch Office at Kolkata, besides the Corporate Office, Noida. This year the theme was "Preventive Vigilance as a tool of Good Governance". At Corporate Office Noida, Vigilance Pledge had been administered on 26th October by CMD, OIL and by the respective Administrative Heads at other work spheres / installations of OIL. During this week, cycle rallies and the padayatra (procession) were marked at Corporate Office Noida, FHQ & PHQ with chanting of anti-corruption slogans to create vigilance awareness amongst the general public. Apart from the pledge taking, various other programs / competitions were organized befitting the occasion amongst OIL employees, their spouses and their children. Two interactive sessions were organized with CVO amongst the executives at Corporate Office and at FHQ.

As per renewed directive of the commission, various "outreach" programs were also conducted for the young generation. Programs included competitions for on the spot painting, essay writing, debating, poster making, cartoon, slogan writing, elocution, science model making in Vishwa Bharti Public School and Delhi Public School of Greater Noida, along with other participating Schools and Colleges of Duliajan & Guwahati in Assam. As new initiatives Vendors'' Meets had been organized giving special attention to unsuccessful vendors as was done in the last year. Quarterly issues of in-house Vigilance Journal ''In- Touch'' along with a special issue were published during the year.

18. RESEARCH AND DEVELOPMENT

The Company accords utmost importance to up- gradation of technologies and expertise in various areas of activities through its own Research & Development Centre. A number of studies and projects in the field of IOR/EOR, well stimulation, water shut-off, Oil field chemicals and work over & drilling fluids, produced water management, flow assurance & paraffin control, Geochemistry, Petroleum Biotechnology, Un-coventional Hydrocarbon etc. carried out and benefits have been derived by the Company. A number of R&D projects featured as MoU projects, which were completed within stipulated timeframe for "Excellent" MoU ratings.

In FY 2016, Company has filed two patents, namely "Stepwise Pyrolysis GC Technique to evaluate hydrocarbon potential of organically rich shale at different maturity levels" and "Method for Quantification of Low Wax Crude". A total of Rs 46.76 Crores has been spent on R&D initiatives during the year.

19. SUBSIDIARIES/ COMPANIES IN WHICH OIL HAS SHAREHOLDING

Subsidiaries

(i) Oil India Sweden AB

Oil India Sweden AB is a wholly owned subsidiary of Oil India Limited. The company was incorporated on the 20th November 2009 as a private limited company (AB). The activities of the Company are: to own shares in other companies, perform administrative tasks and associated activities; to incorporate, to participate in and to finance companies or businesses etc.

(ii) Oil India Cyprus Ltd.

Oil India Cyprus Limited was incorporated in Cyprus on 21st October 2011 as a private limited liability Company under the Cyprus Companies Law, Cap. 113. Oil India Limited holds 76% of the Share Capital of the Company. The balance 24% is held by Oil India Sweden AB.

(iii) Oil India (USA) Inc.

Oil India (USA) Inc. is a wholly owned subsidiary of OIL incorporated on 26th September 2012 having its Office at Houston, USA. It holds 20% stake in Niobrara Shale Oil and Gas Asset.

(iv) Oil India International Limited (OIIL)

OIIL, a 100% subsidiary of Oil India Limited was incorporated on 20th September, 2013. The registered office of OIIL is situated in New Delhi.

(v) Oil India International B.V (OIIBV)

Oil India International B.V, a 100% subsidiary of OIL was incorporated in Netherlands on 2nd May, 2014.

(vi) Oil India International Pte. Ltd.

Oil India International Pte. Ltd. is a wholly owned subsidiary of Oil India Limited. The company is incorporated in Singapore on 6th May 2016 as a private company limited by shares. The activities of the Company are: to act as investment holding company and Crude Petroleum and Natural Gas Production.

Companies in which OIL has shareholding:

(i) Numaligarh Refinery Ltd (NRL)

Numaligarh Refinery Limited was incorporated in 1993. NRL is a Category -I Mini Ratna PSU having a 3 MMTPA Refinery at Numaligarh, in Golaghat District of Assam. The Company is a subsidiary of Bharat Petroleum Corporation Limited. OIL is holding 26% of the paid up equity in NRL.

(ii) Brahmputra Cracker and Polymer Ltd (BCPL)

BCPL was incorporated on January 8, 2007 with the objective of establishing a gas cracker project complex at Lepetkata, Dibrugarh, Assam, inter alia, to process natural gas, naphtha or any petroleum product and to distribute and market petrochemical products in India and abroad. The registered office of BCPL is located at Guwahati, Assam. OIL holds 10% equity share capital of BCPL.

(iii) Suntera Nigeria 205 Ltd.

OIL acquired a 25% equity stake in Suntera Nigeria 205 Limited, Nigeria pursuant to a Share Purchase Agreement signed with Suntera Cyprus and IOCL on August 31, 2006. Suntera Nigeria 205 Limited was incorporated with the main object to engage in the petroleum business including the prospecting and exploration for and production and development of crude oil and natural gas. The registered office of Suntera Nigeria is at Nigeria.

(iv) DNP Ltd.

DNP Limited was incorporated on 15th June, 2007. The main object of DNP Limited is acquisition, transportation and distribution of natural gas in all forms. The registered office of DNP Limited is situated at Guwahati, Assam. OIL holds 23% equity share capital of DNP Limited.

(v) IndOil Netherlands B.V

Oil India Sweden AB owns 50% of the shares in Indoil Netherlands B.V which in turn holds 7 per cent equity interest in Petrocarabobo SA (joint venture company), Project Carabobo-1, Venezuela. The principal activity of Indoil Netherlands B.V. is making investment in companies engaged in exploration, production, marketing, trade, transport and extraction of oil, gas, hydrocarbons and minerals.

(vi) Beas Rovuma Energy Mozambique Ltd.

(BREML)

OIL holds 40% share in BREML. BREML holds 10% PI in the Rovuma Area 1 Offshore Block in Mozambique.

(vii) WorldAce Investments Ltd.

OIL (through OIIBV) holds 50% share in World Ace Investments Ltd, a company incorporated in Cyprus. World Ace Investments Ltd. holds 100% share in LLC Stimul-T, Russia which is the license holder for License 61, Tomsk Region, Russia.

(viii) Vankor India Pte. Ltd.

Oil India Limited (through Oil India International Pte. Ltd.) holds 33.5% share in Vankor India Pte. Ltd., a company incorporated in Singapore on 23rd May 2016. The activities of the Company are: to act as investment holding company and Crude Petroleum and Natural Gas Production.

(ix) Taas India Pte. Ltd.

Oil India Limited (through Oil India International Pte. Ltd.) holds 33.5% share in Taas India Pte. Ltd. , a company incorporated in Singapore on 23rd May 2016. The activities of the Company are: to act as investment holding company and Crude Petroleum and Natural Gas Production.

A report on the performance and financial position of the subsidiaries, associates and Joint venture Companies of OIL as per prescribed format (Form AOC1) of the Companies Act 2013 forms part of this annual report.

20. STATUTORY REQUIREMENTS

Your Directors have made necessary disclosures as required under various provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. Information on the conservation of energy, technology absorption, R&D, foreign exchange earnings & outgo etc. as required under Section 134 of the Companies Act, 2013 and the rules made thereunder is given in the Annexure forming part of this Report. In view of the exemptions to the Government Companies from applicability of the section 197 of the Act by the Government of India, OIL is not required to annex the details of the Employees who drew remuneration exceeding the limits laid down in the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

21. STATUTORY AUDITORS, COST AUDITORS AND SECRETARIAL AUDITORS

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India (C&AG). M/s. A.K.Sabat & Co. and M/s N. C. Banerjee & Co. were appointed as Joint Statutory Auditors for the financial year 2015-16. Comments of the C&AG forms part of this Report.

The Cost Audit Report for the financial year 2014-15 was filed within the statutory time limit. M/s Chandra Wadhwa & Co. is the Cost Auditor of the Company for the financial year 2015-16. The report is being finalized and will be filed as per the schedule.

Secretarial Compliance Report confirming compliance to the applicable provisions of the Companies Act, 2013, SEBI (LODR) Regulations, 2015, Listing Agreement, SEBI guidelines and all other relevant rules and regulations relating to Capital Market of M/s RMG Associates, Practicing Company Secretaries is annexed. With respect to the qualification about the composition of the Board of Directors, OIL requested MOP&NG to appoint appropriate number of Independent Directors on the Board of the Company.

22. EXTRACTS OF ANNUAL RETURN

The extracts of the Annual Return are attached herewith as Annexure (Form MGT-9) to this Report.

23. AWARDS AND RECOGNITIONS

Oil India Limited was conferred with the following recognitions and awards/accolades, by different agencies, during the year 2015-16:

1. Credit Rating Agencies, Moody''s and Fitch, reaffirmed Oil India Limited''s Credit Ratings. While Moody''s Investor Service rated Oil India Limited as Baa2 (Stable), Fitch rated the Company as BBB- (Stable)

2. Ranking of #222 in the Platts Top 250 Global Energy Company Rankings for 2015 and ranking of 68th in the Asia Companies, declared at the (13th) Annual Platts Top 250 Global Energy Company Rankings, 2015

3. The International Federation of Training and Development Organizations (IFTDO) Global HRD award, 2016, on the topic "Customized Soft Skill Training for Workpersons"

4. The "Frost & Sullivan''s Green Manufacturing Excellence Award 2015 - Certificate of Merit - Believers Category"

5. The Oil Industry Safety Award for "Best Near Miss Incidents Reporting, Production Operation- Onshore/Offshore" for the year 2013-14

6. The 2nd Pt. Madan Mohan Malaviya Silver Award for Best CSR Practices in Education, 2015, by CSR Times.

7. Shri Gnana Kumaraswamy Batta, Senior Geophysicist with Oil India Limited, won the Petrofed Innovator of the year (Special Commendation in the Individual category) at the PETROFED Awards 2013-14

8. 3rd Prize under Best Enterprise Award in Public Sector at the 26th National Convention of the Forum of Women in Public Sector (WIPS)

9. The ''Best Company in CSR & Sustainability'' Award at the INDIA TODAY PSUs Awards, 2015

10. The following awards instituted by "World CSR Congress" at the Sustainability & Leadership Summit & Awards ceremony :

i) 50 Most Sustainable Companies of India Award

ii) Best Performing Navratna PSU Award

iii) Best CSR Practices Award

iv) Sustainable Community Leadership Award

In addition, two distinguished lady officers, namely, Ms. Reba Devi, Group General Manager- Geology & Reservoir and Ms. Debajani Bose, Head-Chemical, were conferred with the prestigious "Women at Work Leadership Award."

11. The 5th Annual Greentech CSR Award 2015 in Gold category, in Petroleum Exploration sector

12. The 15th Annual Greentech Environment Award, 2014, in Gold category in Petroleum Exploration sector

13. The 16th Annual Greentech Environment Award, 2015, in Gold category in Petroleum Exploration Sector

14. The Golden Peacock National Training Award, 2015

15. The 5th Annual Greentech HR Award, 2015 on Training Excellence

16. The 3rd Global Training & Development Leadership Award for best development programme in public sector for workers, in the category of Best Employer 2015-16, by World HRD Congress.

17. The 7th best employer of the year at 10th Employer Branding award and an award for managing health at work, both by Employer Branding Institute, India.

18. The "Dainik Bhaskar- India Pride Award 2015-16, for Excellence in Oil & Gas", in the Central Public Sector Undertaking category by the Dainik Bhaskar newspaper group Apart from the above, Oil India Limited was bestowed with several other laurels for achievements in different spheres of the Company:

1. OIL Football team became the Champions in the 7th Bodousa Cup Football Tournament, held at Tinsukia

2. OIL A Team won the runners-up trophy in Merchant Cup Golf Tournament (Division 1) held at Royal Calcutta Golf Course, Kolkata

3. Calcutta Branch was awarded the second Rajbhasha Shield for implementation of Official Language at Calcutta Branch office. Also, the Town Official Language Committee for PSUs of Kolkata gave Certificate of appreciation and memento to Calcutta Branch and Dr. V M Bareja, Senior Manager(Official Language) for his contribution towards implementation of Official Language at Calcutta Branch office.

24. CHANGES IN THE BOARD OF DIRECTORS

(i) Pursuant to Letter no. C-31014/3/2015- CA/FTS:38699 dated 30th June, 2015 issued by Ministry of Petroleum & Natural Gas (MOP&NG), Shri U.P. Singh, Additional Secretary (Exploration), MOP&NG assumed the additional charge of Chairman & Managing Director, Oil India Limited w.e.f 1st July, 2015 (FN) vice Shri S.K.Srivastava who ceased to be Chairman and Managing Director of Oil India Limited pursuant to his superannuation from the services of the Company on 30.06.2015 (after closing of working hours).

(ii) Pursuant to Letter No. C-34011/19/2005-CA dated 3rd September, 2012 issued by MOP&NG,

a) Shri Anup Mukerji, Ex-Chief Secretary, Government of Bihar

b) Shri Suresh Chand Gupta, Practising Chartered Accountant

c) Prof. Bhaskar Ramamurthi, Director, IIT, Madras

d) Prof. Shekhar Chaudhuri, Director, IIM, Kolkata

e) Prof. Gautam Barua, Mentor Director, IIIT, Guwahati have retired as Independent Directors (Non- Official Part-Time Directors) on the Board of Oil India Limited w.e.f. 03.09.2015.

(iii) Pursuant to Letter No. C-31033/1/2012- CA/FTS:18688 dated. 02.01.2016 issued by MOP&NG, Shri Sunjay Sudhir, Joint Secretary (IC), MOP&NG was appointed as Government Nominee Director on the Board of Oil India Limited in place of Shri Nalin Kumar Srivastava, Director (E-II), MoP&NG.

(iv). Pursuant to Letter No. C-31014/3/2015-CA /FTS:38699 dated 31st May, 2016 issued by MOP&NG, Shri A.P Sawhney, Additional Secretary, MOP&NG was entrusted additional charge of the post of Chairman & Managing Director, OIL. Shri U.P. Singh, Additional Secretary (E), MOP&NG ceased to be the Chairman and Managing Director of Oil India Limited after close of working hours on 31st May, 2016.

(v) Pursuant to Letter No. C-31014/4/2015-CA(Part- I)/FTS:38957 dated 13th July, 2016 issued by MOP&NG, Shri Utpal Bora has been inducted into the Board as Chairman and Managing Director of Oil India Limited w.e.f 18th July, 2016 (FN) vice Shri A.P Sawhney, Additional Secretary, MOP&NG.

25. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section134 (5) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, Directors of the Company confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are 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 financial year and of the profit and loss of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

26. ACKNOWLEDGEMENT

With the initiatives emanating from the vision of making the Company as fastest growing energy company with highest profitability and with our combined zeal, commitment, experience and expertise, your Directors (v) Pursuant to Letter No. C-31014/4/2015-CA(Part- l)/FTS:38957 dated 13th July, 2016 issued by MOP&NG, Shri Utpal Bora has been inducted into the Board as Chairman and Managing Director of Oil India Limited w.e.f 18th July, 2016 (FN) vice Shri A.P Sawhney, Additional Secretary, MOP&NG.

25. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (5) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, Directors of the Company confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are 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 financial year and of the profit and loss of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

26. ACKNOWLEDGEMENT

With the initiatives emanating from the vision of making the Company as fastest growing energy company with highest profitability and with our combined zeal, commitment, experience and expertise, your Directors look forward to a year of fruitful operations. Your Directors acknowledge the guidance and support of the Ministry of Petroleum & Natural Gas, all other Ministries and Agencies in Central and State Governments. Your Directors express their gratitude and thanks to the Shareholders, Auditors, Customers, Suppliers and other business partners/associates for their continued co-operation and patronage. Your Directors wish to place on record their deep sense of appreciation for the devoted services of all Oil Indians for its success.

For and on behalf of the Board of Directors.

Sd/-

(Utpal Bora)

Chairman & Managing Director

Dated: 03.08.2016

Place: Noida


Mar 31, 2015

Dear Members,

On behalf of the Board of Directors, I hereby present the 56th Annual Report on the operations of the Company containing Audited Statements of Accounts together with the Auditors' Report and Comments of the Comptroller and Auditor General of India for the year ended March 31,2015.

1. SIGNIFICANT HIGHLIGHTS

The financial and operational performance of the Company is as under:-

A Financial highlights

During the year, OIL has earned total revenue of Rs. 11,019.86 crore as against Rs. 11,215.46 crore in FY14. The Profit before Tax (PBT) earned in FY15 was Rs.3728.70 crore against PBT of Rs. 4,410.44 crore in the FY14. Profit after Tax (PAT) was Rs. 2,510.20 crore in FY15 against PAT of Rs. 2,981.30 crore in FY14.

Profitability of the Company was affected on account of higher financing cost associated with investment in Mozambique project, adverse movement in currency exchange rate and fall in interest earnings from investment of surplus fund. The summarized Profit and Loss Account is given below:

(Rs. in Crore) Financial Financial Particular year 2015 year 2014

Income from Operations 9,748.23 9,586.82

Other income 1,271.63 1,628.64

EBDITA 4,802.02 5,195.03

Finance Cost 340.68 68.78

Depreciation, Depletion, 732 64 715 81 Amortization and impairment

Profit before Tax (PBT) 3,728.70 4,410.44

Profit after Tax (PAT) 2,510.20 2,981.30

Appropriations

Interim Dividend 601.14 1262.39

Tax on Interim Dividend 120.19 214.54

Proposed Final Dividend 601.14 30.06

Tax on Proposed Dividend 122.38 5.11

Transfer to Debenture 236.96 00.00 Redemption Reserve

Transfer to General Reserve 828.39 1469.20

Total appropriations 2,510.20 2,981.30

During the year, Company has made planned investment of Rs. 3,774 crore against budget estimates of Rs 3,632 crore which is highest in any year by OIL till date and expects to increase in future with the increase in exploratory and operational activities.

B Operational Highlights

(i) Production of Crude Oil

During the year, crude oil production was 3.440 MMT (inclusive of production from Kharsang JVC) as against production of 3.502 MMT in FY14. Main reason for shortfall in achievement is due to direct and consequential losses arising out of blockades, bundhs etc in operational areas and indirect loss due to rig days loss in work-over and drilling.

(ii) Natural Gas Production

The natural gas production was 2722 MMSCM in FY15 against 2626 MMSCM in FY14 which is higher by 4%. The sale of natural gas during the year was 2181 MMSCM against 2090 MMSCM in FY14.

(iii) LPG Production

During FY15, LPG Production was 43570 MT against 46640 MT in FY14. The sale of LPG was 43,456 MT in FY15 against 46,786 MT in FY14

(iv) Renewable Energy

During the FY15, OIL commissioned third wind energy project of 54MW which is split project in Gujarat and Madhya Pradesh in March, 2015 (16 MW Wind Farm at Patan in Gujarat on 26.03.2015 and 38 MW Wind Farm at Chandgarh in Madhya Pradesh on 28.03.2015). With commissioning of this project, total renewable energy capacity of the Company is now 126.60 MW. OIL generated revenue of Rs 67.50 crore in FY15 from renewable sources (which includes revenue from solar plants of 5.23 MW). The generation from various renewable plants is as under:

a. 5 MW Solar Power Plant at Ramgarh, Rajasthan produces 92,47,797 kWh of Electricity which was sold to Rajasthan Electricity Board (DISCOM, Rajasthan Govt.).

b. 13.6 MW Wind Farm at Ludravaa, Rajasthan produces 1,91,99,249 kWh of Electricity which is sold to Rajasthan Electricity Board (DISCOM, Rajasthan Govt.).

c. 54 MW Wind Farm at Dangari, Rajasthan produces 9,94,42,503 kWh of Electricity which is sold to Rajasthan Electricity Board (DISCOM, Rajasthan Govt.)

C Exploration Highlights

Your Company has made 12 oil and gas discoveries during the year 2014-15 of which 11 are in upper Assam Basin. The twelfth discovery is a gas find in NELP-VI block KG-ONN-2001/1 falling in East Godavari district of Andhra Pradesh and Puducherry. In addition, exploratory drilling was initiated in NELP block RJ-ONN-2004/2 in Rajasthan and in block MZ-ONN-2004/1 in the State of Mizoram.

In overseas, one of the two appraisal wells drilled over Lassa oil discovery in Gabon proved presence of oil, thus helping in appraisal of the discovery. A new overseas exploration venture was added to the portfolio of the Company by signing the contract for two offshore acreages in Myanmar, in which OIL is the operator.

2. ACREAGE

The domestic operations of the Company are spread over areas under onshore Petroleum Exploration License (PEL) and Petroleum Mining Lease (PML) in the states of Assam, Arunachal Pradesh, Mizoram, Andhra Pradesh, Puducherry and Rajasthan. Besides, your Company is venturing into shallow and deep water in KG Basin, Cauvery, Andaman and Mumbai offshore either jointly or in partnership with other consortium partners. Your Company is operating in 5 (five) PEL and 22 (twenty two) PML areas, allotted under the nomination regime in the states of Assam, Arunachal Pradesh and Rajasthan.

Your Company at the end of NELP IX bidding round as on 31.03.2015 is holding Participating Interest (PI) in total of 27 NELP Blocks out of which OIL has the right of operatorship / joint operatorship in 12 and as non-operator in 15 blocks. In addition your Company is holding 90% PI in one CBM Block (AS- CBM-2008/IV) in Assam. Your Company is also holding 40% PI in JV block of Kharsang PSC and 44.086% PI in Pre-NELP block AAP-ON-94/1.

3. OIL AND GAS RESERVES

Your Company has a strong oil and gas reserves base as on 31/3/15 which is mentioned below:

Particulars 1P 2P 3P

Oil Condensate 31.2606 83.4091 114.7743 (MMT)

Gas (BCM) 23.787 44.095 65.903

O OEG (MMTOE) 51.7616 121.3149 171.6258

Note Including OIL's PI in Kharsang JV

4. CAPITAL STRUCTURE

The paid-up capital of the Company is Rs 601.14 crore divided into 60,11,35,955 shares of Rs.10/- each with no change in the Government of India holding of 67.64% of total paid up capital. The Earning per Share (EPS) of the Company as on March 31, 2015 is Rs. 41.76/- as compared to Rs. 49.59/- at the end of previous financial year.

5. DIVIDEND

Based on the provisional financial trend, your Company paid Interim Dividend @ 100% amounting to Rs. 601.14 crore for the FY 2014-15. The Board of Directors are now pleased to recommend a final dividend @100% on the paid up capital amounting to Rs. 601.14 crore for the FY 2014-15, subject to the approval of the shareholders at the ensuing Annual General Meeting.

6. CREDIT RATINGS

The Company's financial prudence is reflected in the strong credit rating ascribed by ratings agencies as given below:

Instrument Rating Rating Outlook Remarks Agency

International Moody's Baa2 Stable One notch Debt above India's sovereign rating

Long Term ICRA AAA Stable Highest rating Debt awarded by ICRA

Long Term Fitch BBB(-) Stable At par with Debt sovereign rating

7. DETAILS OF The LOANS GUARANTEES OR INVESTMENTS/DEPOSITS

Particulars of loans given, investment made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statements. (Please refer to Note No 14, 15, 21 & 31.16 to the standalone financial statements)

8. RELATED PARTY TRANSACTIONS

All contracts / arrangements / transactions entered by the Company during FY15 with related parties were either in ordinary course of business and / or at arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transaction.

The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at www.oil-india.com. Attention is also invited to Note 31.4 to the financial statement and Form AOC 2 attached herewith.

9. HUMAN ASSETS

Human Resource Management at OIL is an integrated approach focusing on organization's faith to work with people and work through them to manage change and strive for continued excellence. OIL works towards building positive employee- organization relationship through nurturing initiatives, innovations and aspirations with best HR practices and commitment and provide professional working environment. HR policies and practices are always sensitive to employee needs. As on March 31,2015, Company has 7845 employees consisting of 1435 Executives and 6410 Unionised Employees in the Company.

10. SPORTS

OIL believes that sports today is an integral part of all round development of human personality and achieving excellence in sports has real bearing on national prestige and morale. Therefore, employees are encouraged to play and excel in sports. As a result of above encouragement, Oil India participated in National and International Sports Events in Table Tennis, Cricket, Chess and brought laurels to the Company. Oil India Limited actively supports and promotes sports under the umbrella of Petroleum Sports Promotion Board (PSPB) and also under various Government of India recognized bodies.

11. IMPLEMENTATION OF GOVERNMENT DIRECTIVES FOR PRIORITY SECTIONS

The Company attempts to comply with the directives of the Government of India for priority sections of the society. The representations of various priority sections in Executive and Unionized Employees categories in the Company as on March 31,2015 is as under:

CATEGORY SC ST OBC Minority PWD Women

Executives 188 128 310 106 7 117

Unionised 423 756 1941 389 73 235

Employees

Total 611 884 2251 495 80 352

12. IMPLEMENTATION OF SEXUAL HARASSMENT PREVENTION, PROHIBITION AND REDRESSAL ACT, 2013

In accordance with the Government Guidelines and Norms, OIL has constituted the Internal Complaints Committee (ICC) at its different spheres to look into offences related to sexual harassment of women at the workplaces. These Complaints Committees are headed by women and not less than half of its members are women. Further, to prevent the possibility of any undue pressure or influence from senior levels, such Complaints Committee involves a third party (Female), who is either principal of the educational institute or Social Worker or person of repute. The Committee is deemed to be Inquiring Authority for the purpose of such misconduct and the report of the ICC shall be considered as Inquiry Report under the Rules. During the year under review, no case was referred to the committees.

13. CORPORATE GOVERNANCE

As stipulated under Clause-49 and 55 of the Listing Agreement, the Management Discussion & Analysis Report, Corporate Governance Report and the Business Responsibility Report have been furnished as a part of this Annual Report. Your Company also complies with the Corporate Governance Guidelines enunciated by the Department of Public Enterprises, Government of India.

14. RTI ACT, 2005

In order to promote transparency and increased accountability, Company has put in place the mechanism for implementation of Right to Information Act 2005. CPIO / CAPIO at offices across the country have been nominated to provide the information to the citizen of the country under the Act. The names, designation and address of the CPIO/CAPIO are available on the website. Company has also uploaded information manual on the web portal containing details like organization structure, powers and duties of officers, rules and regulations, directory of officers, remuneration of officers, remuneration of workmen and information of the public at large. Complaints received during the year were expeditiously replied.

15. IMPLEMENTATION OF OFFICIAL LANGUAGE (RAJBHASHA)

In pursuance of Official Language Policy / Act / Rules / Orders of the Govt. of India efforts are continuing towards increasing the use of Hindi in Official work. Hindi Workshops were conducted regularly so as to enable officers and employees to work in Hindi conveniently and efficiently. Meetings of Official Language Implementation Committee were held in each quarter. The responsibility of the Chairmanship of Duliajan Town Official Language Implementation Committee (TOLIC) was also borne by our Company. In-house Journal "OIL NEWS" was published in Trilingual form i.e. Assamese, Hindi and English. Hindi Month was observed in a befitting manner in all spheres of OIL. To propagate Official Language Hindi, amongst employees and school going children, various literary competitions were held during Hindi Month Celebration. Important documents, to be laid on the table of Parliament, were also brought out in bilingual form.

16. VIGILANCE

"Vigilance Wing" in the organisation is headed by Chief Vigilance Officer, which helps in ensuring functioning of the organization in a transparent manner. The main thrust of Vigilance is placed on the preventive vigilance rather than punitive vigilance. Towards this objective, system improvement measures were undertaken on the basis of scrutiny of various Contracts & Purchases. Intensive inspections were also carried out on the systems and subsequently, corrective measures were undertaken.

As per CVC's directive, Vigilance Awareness Week was organized during the year at Field Headquarters, Corporate Office, other spheres of operations and no. of programmes were conducted during the week. Programme on "Contract Management & Vigilance Perspective in PSUs" were also conducted at Field Headquarters with eminent faculty from outside the organization. To create awareness and sensitize employees of the organization about the rules and regulations on Contracts & Procurement procedures, Conduct, Discipline & Appeal Rules and Central Vigilance Commission (CVC) guidelines; eleven nos. of "Keep in Touch" (KIT) and "Vigilance Sensitisation Programme" were conducted in various spheres of the organization. A new initiative was taken by the organization by conducting a vendor Meet with Unsuccessful vendor at Mumbai in August, 2014. Quarterly issues of in-house Vigilance Journal 'In- Touch' along with a special issue were published during the year.

17. research and development

The Company accords utmost importance to up- gradation of technologies and expertise in various areas of activities through its own Research & Development Centre. During the year, the Company established state of art Petroleum Biotechnology Centre known as "Jaivalaya". In the FY15, Company has filed two International Patent applications for "System and method for screening solvents for dissolving tank Bottom sludge" and "a method for preventing deposition in Oil wells with Packers".

18. SUBSIDIARIES/ COMPANIES IN WHICH OIL HAS SHAREHOLDING

SUBSIDIARIES

1. Oil India Sweden AB

Oil India Sweden AB is a wholly owned subsidiary of Oil India Limited. The company was incorporated on the 20th of November 2009 as a private limited company (AB). The activities of the Company are: to own shares in other companies, perform administrative tasks and associated activities; to incorporate, to participate in and to finance companies or businesses etc.

2. Oil India Cyprus Ltd.

Oil India Cyprus Limited was incorporated in Cyprus on 21 October 2011 as a private limited liability Company under the Cyprus Companies Law, Cap. 113. Oil India Limited holds 76% in the Company. The balance 24% is held by Oil India Sweden AB.

3. Oil India (USA) Inc.

Oil India (USA) Inc. is a wholly owned subsidiary of OIL with Branch Office at Houston, USA. It holds 20% stake in Niobrara Shale Oil and Gas Asset.

4. Oil India International Limited (OIIL)

OIIL, a 100% subsidiary of Oil India Limited was incorporated on 20.09.2013. The registered office of OIIL is situated in New Delhi. OIIL received the commencement of business certificate on 28.02.2014.

5. Oil India International B.V (OIIBV)

Oil India International B.V, a 100% subsidiary of OIL was incorporated in Netherlands on 2nd May, 2014.

COMPANIES IN WHICH OILHAS SHAREHOLDING

1. Numaligarh Refinery Ltd (NRL)

Numaligarh Refinery Limited was incorporated in 1993. NRL is a Category -I Mini Ratna PSU having a 3 MMTPA Refinery at Numaligarh, in Golaghat District of Assam. The Company is a subsidiary of Bharat Petroleum Corporation Limited. OIL is holding 26% of the paid up equity in NRL.

2. Brahmputra Cracker and Polymer Ltd (BCPL)

BCPL was incorporated on January 8, 2007 with the objective of establishing a gas cracker project complex at Lepetkata, Dibrugarh, Assam, inter alia, to process natural gas, naphtha or any petroleum product and to distribute and market petrochemical products in India and abroad. The registered office of BCPL is located at Guwahati, Assam. OIL holds 10% equity share capital of BCPL.

3. Suntera Nigeria 205 Ltd.

Our Company acquired a 25% equity stake in Suntera Nigeria 205 Limited, Nigeria pursuant to a Share Purchase Agreement signed with Suntera Cyprus and IOCL on August 31, 2006. Suntera Nigeria 205 Limited was incorporated with the main object to engage in the petroleum business including the prospecting and exploration for and production and development of crude oil and natural gas. The registered office of Suntera Nigeria is at Nigeria.

4. DNP Ltd.

DNP Limited was incorporated on June 15, 2007. The main object of DNP Limited is acquisition, transportation and distribution of natural gas in all forms. The registered office of DNP Limited is situated at Guwahati, Assam. Our Company has acquired a 23% equity stake in DNP Limited.

5. IndOil Netherlands B.V

Oil India Sweden AB owns 50% of the shares in Indoil Netherlands B.V which in turn holds 7 per cent equity interest in Petrocarabobo SA (joint venture company), Project Carabobo-1, Venezuela. The principal activity of Indoil Netherlands B.V. is making investment in companies engaged in exploration, production, marketing, trade, transport and extraction of oil, gas, hydrocarbons and minerals.

6. Beas Rovuma Energy Mozambique Ltd. (BREML)

OIL holds 40% share in BREML. BREML holds 10% PI in the Rovuma Area 1 Offshore Block in Mozambique.

7. world Ace Investments Ltd.

OIL (through OIIBV) holds 50% share in World Ace Investments Ltd, a company incorporated in Cyprus. World Ace Investments Ltd. holds 100% share in LLC Stimul-T, Russia which is the license holder for License 61, Tomsk Region, Russia.

A report on the performance and financial position of the subsidiaries, associates and Joint venture Companies of OIL as per prescribed format (Form AOC1) of the Companies Act 2013 forms part of this annual report.

19. STATUTORY REQUIREMENTS

Your Directors have made necessary disclosures as required under various provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Information on the conservation of energy, technology absorption, R&D, foreign exchange earnings & outgo etc. as required under Section 134 of the Companies Act, 2013 and the rules made thereunder is given in the Annexure forming part of this Report. In view of the exemptions to the Government Companies from applicability of the section 197 of the Act by the Government of India, OIL is not required to annex the details of the Employees who drew remuneration exceeding the limits laid down in the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

20. STATUTORY AUDITORS, COST AUDITORS AND SECRETARIAL AUDITORS

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India (C&AG). M/s. Saha Ganguli and Associates and M/s B M Chatrath & Co. were appointed as Joint Statutory Auditors for the financial year 2014-15. Comments of the C&AG forms part of this Report.

The Cost Audit Report for the financial year 2013- 14 was filed within the statutory time limit. M/s Mani & Co is the Cost Auditor of the Company for the financial year 2014-15. The report is being finalized and will be filed as per the schedule.

Secretarial Compliance Report confirming compliance to the applicable provisions of the Companies Act, 2013, Listing Agreement, SEBI guidelines and all other relevant rules and regulations relating to Capital Market, obtained from M/s RMG Associates, Practicing Company Secretaries is annexed. With respect to the qualification about the composition of the Board of Directors, OIL has brought the matter before MOP&NG and requested them to appoint appropriate number of Independent Directors on the Board of the Company.

21. EXTRACTS OF ANNUAL RETURN

The extracts of the Annual Return are attached herewith as Annexure (Form MGT-9) to this Report.

22. AWARDS AND RECOGNITIONS

Oil India Limited received the following awards during the year 2014-15

* Oil India Ltd. wins the National Safety Award (Mines) for 2012 in the category of "Longest Accident Free Period" for the "Engineering Oil Mines" on 20.03.2015.

* Oil India Limited was declared the winner of 15th Annual Greentech Environment Award, 2015.

* OIL-Center of Excellence for Energy Studies has received recognition from the Department of Scientific and Industrial Research, Govt. of India vide letter No. TU/IV-RD/1181/2014 dated 15-September 2014 as an In-house R&D unit of Oil India Limited from 21-August 2014.

* 4th Annual Greentech HR Award 2014 for 'Training Excellence (Gold Category)' by Greentech Foundation for the third consecutive year at a function at Bangalore.

* Golden Peacock National Training Award for the year 2014. The award was handed over by Hon'ble Shri Oomen Chandy, Chief Minister of Kerala at Trivandrum

* Golden Peacock National Training Award for the year 2015. The award was announced on 26th March 2015 and handed over in a ceremony held in Dubai during April 2015.

* Malaysia Best Employer Brand Award in Excellence in Training category. The award was announced on 25th March 2015.

* 'Best Company in CSR & Sustainability' Award in the India Today PSUs Awards, 2014: Oil India Limited was awarded the 'Best Company in CSR & Sustainability', in the Navratna segment, in the maiden 'India Today PSUs Awards, 2014' on 22nd August, 2014.

* OIL won the best display award in raw space category in the exhibition GEO INDIA 2015 (11th to 14th January, 2015) at Noida.

* OIL won the best stall award in the raw space category in Assam International Trade & Industrial Fair, 2015 at Jorhat, Assam.

23. CHANGES IN THE BOARD OF DIRECTORS

(i) Pursuant to MOP&NG's letter no. C-31014/4/2012-CA/FTS:22762 dated 1st August, 2014, Shri Sudhakar Mahapatra assumed the office of Director (Exploration & Development), Oil India Limited with effect from 4th August, 2014 vice Shri B.N.Talukdar who was relieved from the post of Director (E&D), OIL at the close of working hours of 5th February, 2014 on his joining as DG, DGH.

(ii) Pursuant to MOP&NG's Letter no. C-31014/1/2013-CA/FTS:23934 dated 7th May, 2015, Shri Biswajit Roy has assumed the charge of Director (HR&BD) of Oil India Limited w.e.f 8th May, 2015 vice Shri N.K. Bharali who superannuated from the services of the Company on 31st January, 2015.

(iii) Pursuant to MOP&NG Letter No. C-31033/1/2012-CA (Part-III)/FTS: 37857 dated. 7th May, 2015 Shri U.P. Singh, Joint Secretary (Exploration), MOP&NG of GOI was inducted as Government Nominee Director on the Board of Oil India Limited w.e.f 11th May, 2015 vice Shri Subhasish Panda, who had ceased to be Government Nominee Director on the Board of Oil India Limited w.e.f 7th May, 2015.

(iv) Pursuant to MOP&NG's Letter no. C-31014/3/2013-CA/FTS:26283 dated 4th March, 2015, Shri P.K. Sharma has assumed the charge of Director (Operations) of Oil India Limited w.e.f 1st June, 2015 vice Shri S.Rath who superannuated from the services of the Company on 31st May, 2015.

24. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section134 (5) of the Companies Act, 2013 with respect to Directors' Responsibility Statement, Directors of the Company confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are 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 financial year and of the profit and loss of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

25. ACKNOWLEDGEMENT

With the initiatives emanating from the vision of making the Company as fastest growing energy company with highest profitability and with our combined zeal, commitment, experience and expertise, your Directors look forward to a year of fruitful operations. Your Directors acknowledge the guidance and support of the Ministry of Petroleum & Natural Gas, all other Ministries and Agencies in Central and State Governments. Your Directors express their gratitude and thanks to the Shareholders, Auditors, Customers, Suppliers and other business partners/associates for their continued co-operation and patronage. Your Directors wish to place on record their deep sense of appreciation for the devoted services of all Oil Indians for its success.

For and on behalf of the Board of Directors. Sd/- (S.K.Srivastava) Chairman & Managing Director

Dated: 30.06.2015 Place: Noida




Mar 31, 2014

Dear Members,

On behalf of the Board of Directors, I hereby present the 55th Annual Report on the operations of the Company containing its Audited Statements of Accounts together with the Auditors'' Report and Comments of the Comptroller and Auditor General of India for the year ended March 31, 2014.

1. SIGNIFICANT HIGHLIGHTS

The financial and operational performance of the Company is as under:-

i) Financial highlights

During the year, OIL has earned total revenue of Rs.11,241.34 crore against Rs. 11,456.32 crore in the previous year. The crude oil production* was 3.466 MMT in the year FY14 against 3.661 MMT in FY13. Decrease in total revenue was due to lower crude oil production and higher subsidy share borne by the company. The Profit before Tax (PBT) earned in FY14 was Rs. 4,410.44 crore against PBT of Rs. 5,283.23 crore in the FY13. After deduction of the taxes, Profit after Tax (PAT) was Rs. 2,981.30 crore in FY14 against Rs. 3,589.34 crore in FY13, showing a decrease of Rs. 608.04 crore over the previous year.

On expenditure side, the employee cost increased to Rs.1,473.18 crore in FY14 from Rs. 1,310.63 crore in FY13 on account of higher provision for superannuation benefit. Depreciation, Depletion and Amortization (DD&A) cost has increased to Rs. 1,177.02 crore in FY14 from Rs. 837.63 crore in FY13 due to higher write off of dry wells and higher capitalization of assets & wells. Other components were comparable with previous year.

During the year, Company has made plan investment of Rs. 2,938 crore which is highest in any year by OIL till date and expects to increase in future with the increase in exploratory and operational activities. The summarized Profit and Loss Account is given below:

*Excluding JV Share.

(Rs. in crore)

PARTICULARS 2014 2013

Income from Operations 9612.70 9947.57

Other income 1628.64 1508.75

EBDITA 5656.24 6123.46

Finance Cost 68.78 2.60

Depreciation, Depletion, 1177.02 837.63 Amortization and impairment

Profit Before Tax (PBT) 4410.44 5283.23

Profit after Tax (PAT) 2981.30 3589.34

Appropriations

Interim Dividend 1262.39 1382.61

Tax on Interim Dividends 214.54 224.29

Proposed Final Dividend 30.06 420.80

Tax on Proposed Dividend 5.11 71.51

Transfer to General Reserve 1469.20 1490.13

Total Appropriations 2981.30 3589.34

ii) OPERATIONAL HIGHLIGHTS

PRODUCTION OF CRUDE OIL

The crude oil production was 3.466 MMT against production of 3.661 MMT in FY13. Main reason for shortfall in achievement is direct, indirect and consequential losses arising out of blockades, bundhs etc in operational areas and more than expected decline rates in well head potential of existing wells.

LPG PRODUCTION

During 2013-14, LPG production was 46640 tonnes against production of 46010 tonnes in FY 2013. Along with LPG, a total of 24385 tonnes of condensate were also recovered as by-product.

NATURAL GAS PRODUCTION

The natural gas production of 2625.81 MMSCM was achieved from fields in Assam, Arunachal Pradesh and Rajasthan during the year. The Sale of Natural Gas during the year was 2090.11 MMSCM.

RENEWABLE ENERGY

The 13.6 MW and 54 MW Wind Energy Power Projects were established in Jaisalmer, Rajasthan in the Financial Years 2011-12 & 2012-13, produced 21.0 million units and 85.51 million units respectively in the FY 2013-14 resulting in a revenue of Rs. 58.24 crore (including generation based incentives etc.).

2. ACREAGE

Your Company''s current in-country operations spreads over 5 (five) onshore Petroleum Exploration License (PEL) and 22 (Twenty Two) Petroleum Mining Lease (PML) areas in the states of Assam, Arunachal Pradesh, Mizoram, Andhra Pradesh, Puduchery and Rajasthan. Besides, your Company is venturing into shallow and deep water in KG Basin, Cauvery, Andaman and Mumbai offshore either jointly or in partnership with other consortium partners.

Your Company, at the end of NELP IX bidding round as on 31.03.2014 is holding Participating Interest (PI) in total of 27 NELP Blocks out of which OIL has the right of operatorship / joint operatorship in 12 blocks and as non-operator in 15 blocks. In addition your Company is holding 40% PI in one CBM Block (AS-CBM-2008/ IV) in Assam.

3. OIL AND GAS RESERVES

Your Company has made seven oil and gas discoveries during the year, six from Upper Assam Basin and one from its operated Shakthi block, Gabon.

Your Company has a strong oil and gas reserves base as furnished below:

Particulars 1P 2P 3P

Oil Condensate (MMSKL) 38.9238 97.3055 138.0075

GAS (BCM) 24.7170 47.4380 69.8040

O OEG (MMSKL) 63.5801 143.5286 205.9580

4. CAPITAL STRUCTURE

The paid-up capital of the Company is Rs 601.14 crore divided into 60,11,35,955 shares of Rs.10/- each. During the year, the Government of India transferred 47,53,745 (0.79%) of its holding in OIL in favour of CPSE Exchange Traded Fund (ETF) on 27.03.2014.

Consequently, the Government of India''s holding in OIL reduced from 68.43% to 67.64%. The Earning per Share (EPS) of the Company as on March 31, 2014 is Rs. 49.59/- as compared to Rs. 59.71/- at the end of previous financial year.

5. DIVIDEND

Based on the provisional financial trend, your Company paid First and Second Interim Dividend @ 110% and 100% respectively for the year, totaling to Rs. 1262.39 crore. The Board of Directors is now pleased to recommend a final dividend @ 5% on the paid up capital amounting to Rs. 30.06 crore, subject to the approval of the shareholders at the ensuing Annual General Meeting.

6. HUMAN ASSETS

Human Resource Management at OIL is an integrated approach focusing on Organization''s faith to work with people and work through them to manage change and strive for continued excellence. OIL works towards building positive employee-organization relationship through nurturing initiatives, innovations and aspirations with best HR practices and commitment and provide professional working environment. HR policies and practices are always sensitive to employees needs. As on 31st March 2014, Company has 7813 employees consisting of 1441 Executives and 6372 Unionised Employees in the Company.

7. SPORTS

OIL believes that sports today is an integral part of all round development of human personality and achieving excellence in sports has real bearing on national prestige and morale. Therefore, employees are encouraged to play and excel in sports. As a result of above encouragement, Oil India participated in National and International Sports Events in Table Tennis, Cricket, Chess and brought laurels to the Company.

8. IMPLEMENTATION OF GOVERNMENT DIRECTIVES FOR PRIORITY SECTIONS

The Company attempts to comply with the directives of the Government of India for priority sections of the society. The representations of various priority sections in Executive and Unionized Employees categories in the Company as on March 31, 2014 is as under:

CATEGORY SC ST OBC Minority PWD Women

Executives 187 127 312 108 7 107

Unionised 439 743 1884 410 56 250

Employees

Total 626 870 2196 518 63 357

9. CORPORATE GOVERNANCE

As stipulated under Clause-49 and 55 of the Listing Agreement, the Management Discussion & Analysis Report, Report on Corporate Governance and the Business Responsibility Report have been incorporated as Annexure to the Directors'' Report. Your Company also complies with the Secretarial Standards issued by ICSI and Corporate Governance Guidelines enunciated by the Department of Public Enterprises, Government of India.

10. RTI ACT 2005

In order to promote transparency and increased accountability, Company has put up in place the mechanism for implementation of Right to Information Act 2005. CPIO / CAPIO at offices across the country have been nominated to provide the information to the citizen of the country under the Act. The names, designation and address of the CPIO/CAPIO are available on the website. Company has also put up an information manual on the web containing details like organization structure, powers and duties of officers, rules and regulations, directory of officers, remuneration of officers, remuneration of workmen and information of the public at large. Complaints received during the year were expeditiously replied.

11. IMPLEMENTATION OF OFFICIAL LANGUAGE (RAJBHASHA)

In pursuance of Official Language Policy / Act / Rules / Orders of the Govt. of India efforts are continuing towards increasing the use of Hindi in Official work. Hindi Workshops were conducted regularly so as to enable officers and employees to work in Hindi conveniently and efficiently. Further, the Company has formulated various incentive schemes for promotion of

Hindi. Meetings of Official Language Implementation Committee were held in each quarter. The responsibility of the Chairmanship of Duliajan Town Official Language Implementation Committee (TOLIC) was also borne by our Company. In-house Journal "OIL NEWS" was published in Trilingual form i.e. Assamese, Hindi and English. Hindi Month was observed in a befitting manner in all spheres of OIL. To propagate Official Language Hindi, amongst employees and school going children, various literary competitions were held during Hindi Month Celebration. Important documents, to be laid on the table of Parliament, were also brought out in bilingual form.

Further, story collections of Dr Nagen Saikia, a famous writer of Assamese was translated and published in Hindi by OIL Corporate Office, Noida. This is in appreciation of close link between the two languages and to popularize Assamese writings in hindi.

Nominated Executives and Employees of the Company participated in Official Language Conference of Petroleum PSUs held under the direction of MOP&NG at Kochi on 14th and 15th February, 2014. OIL Management always encourages participation of its employees in various seminars and conferences, including Vishwa Hindi Sanmelan held Overseas.

12. VIGILANCE

"Vigilance Wing" is headed by Chief Vigilance Officer, which helps in ensuring functioning of the organization in a transparent manner. Main thrust is placed on the preventive vigilance rather than punitive vigilance. Towards this objective, several Contract & Procurement Operation & maintenance related system improvement measures were undertaken. Intensive inspections were carried out and corrective measures were suggested.

A Vigilance Awareness Week was organized during the year at corporate office and other office locations. In order to spread awareness and sensitize employee against harmful effects of corruption, various competitions were organised across your Company. KIT (Keep In Touch) and CTY (Catch Them Young) awareness programs were conducted for executives of all levels to sensitize them on Contracts & Procurement procedures, Conduct, Discipline and Appeal Rules and Central Vigilance Commission (CVC) guidelines etc.

13. RESEARCH AND DEVELOPMENT

The Company accords utmost importance to up- gradation of technologies and expertise in various areas of activities through its own Research & Development Centre. During the year, the Company formulated Revised R&D Policy keeping in view the DPE Guidelines on R&D. Further, Company undertook various R & D projects during the year over and above those committed under the MoU. The details of specific areas of Research and Development (R&D), benefits derived as a result of R&D efforts, future plan of action and R&D expenditure are given in the Annexure to the Report.

14. RECENT DEVELOPMENTS

14.1 Acquisition of 4 per cent. participating interest in Mozambique Offshore Area Rovuma 1 field OIL, together with OVL, acquired a 10 percent participating interest in the Mozambique block in the Area 1 Rovuma Field by acquiring the shares of Videocon Mozambique Rovuma 1 Limited (name changed to Beas Rovuma Energy Mozambique Ltd). OIL holds a 40 per cent stake in BREML which translates to 04 per cent participating interest in Area 1, Rovuma off shore.

14.2 Acquisition of 45 per cent. participating interest in Bangladesh offshore block SS04 and block SS09.

During the Bangladesh offshore bidding round 2012, OIL and OVL combine won bid for SS04 and SS09 blocks. The award was announced in February,2014. SS04 and SS09 are shallow sea blocks expected to contain oil and gas. OIL and OVL have PI of 45% each and 10% PI belongs to BAPEX (Bangladesh Petroleum Exploration and Production Co. Ltd.)

14.3 Acquisition of 50% shareholding of WorldAce Investments Ltd (Licence 61 in Tomsk region Russia)

On 4th July 2014, OIL completed acquisition of 50% shareholding of WorldAce Investments Ltd., a Cyprus based wholly owned subsidiary of M/s. Petroneft Resources Ltd. (PTR) which owns Licence 61 in Tomsk region in Russia through LLC Stimul-T, a

Russia based wholly owned subsidiary. This marks OIL''s entry into Russia and a significant contribution to company''s overseas E&P portfolio.

14.4 Acquisition of 60 per cent. participating interest in Myanmar offshore block M-4 and block YEB

OIL together with M/s. Oil Max Energy Pvt. Limited, M/s. Mercator Limited and M/s. Oil Star (local company of Myanmar) (known as OIL consortium) won two blocks namely M-4 and YEB in bidding round announced by Government of Myanmar. The blocks were awarded in May,2014. M-4 is gas bearing block and YEB is oil bearing block. OIL''s participating interest is 60% in each block and OIL is the operator. The Production Sharing Contracts for the blocks are yet to be signed.

14.5 Acquisition of 5 per cent equity interest in IOCL

In February 2014, the GoI approved the sale of 10 per cent. equity interest in IOCL, which is equivalent to 242,795,248 shares of IOCL. The acquisition of these shares took place on 14th March 2014 in an off-market transaction, with OIL and ONGC each acquiring five per cent of the issued share capital of IOCL.

15. SUBSIDIARIES/ COMPANIES IN WHICH OIL HAS SHAREHOLDING

15.1 Subsidiaries

i) Oil India Sweden AB

Oil India Sweden AB is a wholly owned subsidiary of Oil India Limited, India. The company was incorporated on the 20th of November 2009 as a private limited company (AB). The activities of the Company are: to own shares in other companies, perform administrative tasks and associated activities; to incorporate, to participate in and to finance companies or businesses etc.

ii) Oil India Cyprus Ltd.

Oil India Cyprus Limited was incorporated in Cyprus on 21st October 2011 as a private limited liability Company under the Cyprus Companies Law, Cap. 113. Oil India Limited holds 76% in the Company. The balance 24% is held by Oil India Sweden AB.

iii) Oil India (USA) Inc.

Oil India (USA) Inc. is a Wholly Owned Subsidiary of OIL with Branch Office at Houston, USA. It holds 20% stake in Niobrara Shale Oil and Gas Asset. The Company was incorporated on 26th September, 2012.

iv) Oil India International Limited (OIIL)

OIIL, the 100% subsidiary of Oil India Limited was incorporated on 20.09.2013. The registered office of OIIL is situated in New Delhi. OIIL received the commencement of business certificate on 28.02.2014.

v) Oil India International B.V

Oil India International B.V, a 100% subsidiary of OIL was incorporated in Netherlands on 2nd May, 2014.

15.2 Companies in which OIL has shareholding

i) Numaligarh Refinery Ltd (NRL)

Numaligarh Refinery Limited was incorporated in 1993. NRL is a Category -I Mini Ratna PSU having a 3 MMTPA Refinery at Numaligarh, in Golaghat District of Assam. The Company is a subsidiary of Bharat Petroleum Corporation Limited. OIL is holding 26% of the paid up equity in NRL.

ii) Brahmputra Cracker and Polymer Ltd (BCPL)

BCPL was incorporated on January 8, 2007 with the objective of establishing a gas cracker project complex at Lepetkata, Dibrugarh, Assam, to, inter alia, process natural gas, naphtha or any petroleum product and to distribute and market petrochemical products in India and abroad. The registered office of BCPL is located at Guwahati, Assam, India. OIL holds 10% equity share capital of BCPL.

iii) Suntera Nigeria 205 Ltd.

OIL acquired a 25% equity stake in Suntera Nigeria 205 Limited, Nigeria pursuant to a Share Purchase Agreement signed with Suntera Cyprus and IOCL on August 31, 2006. Suntera Nigeria 205 Limited was incorporated with the main object to engage in the petroleum business including the prospecting and exploration for and production and development of crude oil and natural gas.

iv) DNP Ltd.

DNP Limited was incorporated on June 15, 2007. The main object of DNP Limited is acquisition, transportation and distribution of natural gas in all forms. The registered office of DNP Limited is situated at Guwahati, Assam. Our Company has acquired a 23% equity stake in DNP Limited.

v) IndOil Netherlands B.V

Oil India Sweden AB owns 50% of the shares in Indoil Netherlands B.V which in turn holds 7 per cent Equity interest in Petrocarabobo SA (joint venture company), Project Carabobo-1, Venezuela. The principal activities of Indoil Netherlands B.V. are holding in exploration, production, marketing, trade, transport and extraction of oil, gas, hydrocarbons and minerals.

vi) Beas Rovuma Energy Mozambique Ltd. (BREML)

OIL holds 40% share in BREML. BREML holds 10% PI in the Rovuma Area 1 Offshore Block in Mozambique.

vii) WorldAce Investments Ltd.

OIL holds 50% share in World Ace Investments Ltd, a company incorporated in Cyprus. WorldAce Investments Ltd. holds 100% share in LLC Stimul-T, Russia which is the license holder for License 61, Tomsk Region, Russia.

16. STATUTORY REQUIREMENTS

None of the Directors of your Company is disqualified as per provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures as required under various provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Information as required under Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure I forming part of this Report. Details of the Employees who drew remuneration exceeding the limits laid down under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 (as amended from time to time) are uploaded on OIL''s website.

17. STATUTORY AUDITORS AND COST AUDITORS

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India (C&AG). M/s Saha Ganguli & Associates and M/s B M Chatrath & Co. were appointed as Joint Statutory Auditors for the financial year 2013-14. Comments of the C&AG forms part of this Report.

The Cost Audit Report for the financial year 2012-13 was filed within the statutory time limit. M/s Mani & Co. is the cost auditor of the Company for the financial year 2013-14. The report is being finalized and will be filed as per the schedule.

18. AWARDS AND RECOGNITIONS

Oil India Limited received the following awards during the year 2013-14:

(i) Corporate Excellence Award 2013 for Best Investor Relations in June, 2013 instituted by Star of the Industry Group.

(ii) "BT Star Best National PSU" and "BT Star Best PSU in Excellence in Market capitalization" in June, 2013 conferred by Bureaucracy Today.

(iii) The Golden Peacock Environment Management Award in July, 2013.

(iv) The 1st edition of the PSU awards in the category- Human Resource Utilization, in July, 2013.

(v) The Minetech Award 2013.

(vi) The reputed "EFI (Employers'' Federation of India) national award for excellence in employee relations for strong commitment to employee relations" in the pan India category in October, 2013.

(vii) In the 7th ENERTIA Awards 2013 - India''s Awards for Sustainable Energy & Power, OIL was declared "Winner" in the Category V: Fuels & Resources- Award for Best Energy Resources & Oil & Gas Sector Organisation / Company of the year.

(viii) Case Study on Project "RUPANTAR" a flagship and award winning CSR Project of OIL received the Best Case Study Award.

(ix) The India Pride Award 2013-14, in December 2013, for Excellence in CSR in the category Public Sector

Undertakings – Central instituted by the Dainik Bhaskar group.

(x) "Best Employer, India 2013" award by M/s Aon Hewitt, the HR Consulting and Outsourcing Agency. The Company also bagged "The Aon Hewitt Voice of Employee Award, Public Sector Enterprises, India 2013."

(xi) In Petrotech-2014 held at the India Exposition Mart Ltd., Greater Noida, OIL stall was declared the Winner in the Best Display in Raw Space category.

(xii) In January,2014, OIL received Greentech Environment Award 2013 in Gold Category in Petroleum Exploration Sector for sustainable achievement in environment management.

(xiii) New Delhi Institute of Management (NDIM), a premier MBA School, awarded OIL for exemplary leadership and for contributing immensely to the societal issues. The award is in recognition of OIL''s various social welfare programs/activities and CSR projects.

(xiv) Vigilance Excellence Award 2013-14 at a Conclave of Vigilance Officers organized by the Institute of Public Enterprise (IPE) at Hyderabad.

(xv) CIDC Partners in Progress Trophy 2014 in March,2014, for its display of utmost commitment & drive to create a vibrant work environment for the construction fraternity especially for achieving targets of "Mission Skilling India", under various CIDC initiatives.

(xvi) OIL was conferred with ''CAG Pick of the Year'' award by Dalal Street Investment Journal (DSIJ), India''s No.1 investment magazine which organized the PSU Awards 2013 to honour the Public Sector Undertaking (PSU) for their commendable performance.

(xvii) The Greentech HR Award for training Excellence in "Gold Category" and Asia''s Best Employer Brand for Excellence in Training.

19. CHANGES IN THE BOARD OF DIRECTORS

(i) Pursuant to MOP&NG Letter No. C-31014/1/2012-CA dated. 29.07.2013, Mrs R.S. Borah assumed charge of the post of Director (Finance) of Oil India Limited w.e.f 01.10.2013 vice Shri T.K. Ananth Kumar who superannuated from the services of the Company on 30.09.2013.

(ii) Pursuant to MOP&NG Letter No. O-23012/1/2012- ONG-I dated. 31.01.2014, Shri B.N.Talukdar was relieved from the post of Director (E&D), OIL on 05.02.2014 and he took charge of the post of Director General, DGH on 06.02.2014.

(iii) Pursuant to MOP&NG Letter No. C-31033/1/2012-CA/ FTS:18688 dated. 26.02.2014, Shri Subhasish Panda, Director (E-III), MOP&NG was appointed as the Government Nominee Director (w.e.f 26.02.2014) on the Board of Oil India Limited vice Mrs Rashmi Aggarwal, who had ceased to be Government Nominee Director on the Board of Oil India Limited w.e.f 20.01.2014.

20. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March 2014, all applicable accounting standards have been followed along with proper explanations relating to material departures;

(ii) that the Directors had 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 financial year and of the profit or loss of the Company for the year under review;

(iii) that the Directors had taken proper and sufficient 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;

(iv) that the Directors had prepared the accounts for the financial year ended 31st March 2014 on a ''going concern'' basis.

21. ACKNOWLEDGEMENT

With the initiatives emanating from the vision of making the Company as fastest growing energy company with highest profitability and with our combined zeal, commitment, experience and expertise, your Directors look forward to a year of fruitful operations. Your Directors acknowledge the guidance and support of the Ministry of Petroleum & Natural Gas, all other Ministries and agencies in Central and State Governments. Your Directors express their gratitude and thanks to the Shareholders, Customers, Suppliers and other business partners/associates for their continued co-operation and patronage. Your Directors wish to place on record their deep sense of appreciation for the devoted services of all Oil Indians for its success.

For and On behalf of the Board of Directors.

Sd/- (S K Srivastava) Chairman & Managing Director

Dated : 14.07.2014 Place : Noida


Mar 31, 2013

Dear Members,

The behalf of the Board of Directors, I hereby present the 54th Annual Report on the business and operations of the Company containing its Audited Statements of Accounts together with the Auditors'' Report and Comments of the Comptroller and Auditor General of India for the year ended March 31, 2013.

1. SIGNIFICANT HIGHLIGHTS

The financial and operational performance of the Company is as under:-

i) FINANCIAL HIGHLIGHTS

During the year, OIL has earned total revenue of Rs. 11456.32 crore against Rs. 11279.90 crore. The Crude Oil production* was 3.661 MMT in the year against 3.847 MMT in FY 12. Increase in total revenue was contributed by increased realization on account of Natural Gas, LPG and condensate, claims towards under recovery of Natural Gas and other Income which rose to Rs. 1509 Crore from Rs. 1416 Crore in previous year. The PBT earned was Rs. 5283.23 against PBT of Rs 5101.86 crore in the FY12. After deduction of the taxes, PAT was Rs.3589.34 Crore against PAT of Rs. 3446.92 crore in FY 12, registering an increase of Rs. 142.42 Crore over the previous year.

On Expenditure side the cess increased drastically from 17% to 28% in FY 2012-13 on account of increase in cess rate from Rs. 2500 per MT to Rs. 4500 per MT. It resulted in additional burden of Rs 747.00 Crore as statutory levies. Other components were comparable with previous year.

During the year, company has made capital investment of Rs.2890 Crore which is highest capital expenditure incurred by OIL till date and expects to increase in future with the increase in exploratory and operational activities. The summarized Profit and Loss Account is furnished below:

*Excluding JV Share.

(Rs. in Crore)

Particulars 2013 2012

Income from Operations 9947.57 9863.23

Other income 1508.75 1416.67

EBDITA 6123.46 5996.47

Finance Cost, Depreciation, 840.23 894.61 Depletion, amortization and impairment

Profit Before Tax 5283.23 5101.86

Profit After Tax 3589.34 3446.92

APPROPRIATIONS:

Interim Dividend 1382.61 841.59

Tax on Interim Dividends 224.29 136.53

Final Dividend 420.80 300.56

Tax on Proposed Dividend 71.51 48.77

Transfer to General Reserve 1490.13 2119.47

TOTAL APPROPRIATIONS: 3589.34 3446.92

ii) OPERATIONAL HIGHLIGHTS PRODUCTION CRUDE OIL

The crude oil production* was 3.661 MMT which is marginally lower than production of 3.847 MMT in FY 2012. Main reason for shortfall in achievement is direct, indirect and consequential losses arising out of blockades, bundhs etc in operational areas and more than expected decline rates in well head potential of existing well. Such incidents affected the operations in FY 2012-13.

LPG PRODUCTION

During 2012-13, LPG Production was 46010 tonnes which is as per the MOU target of 46000 tonnes set in financial year 2012-13, however 6010 tonnes lesser than previous financial year 2011-12. Along with LPG, a total of 24380 tonnes of condensate were also recovered as by-product. The LPG produced is delivered to IOCL. The plant efficiency was 99.01% compared to designed figure of 98.00% and availability of LPG recovery plant was 99.71%.

NATURAL GAS PRODUCTION

The highest ever natural gas production of 2639.21 MMSCM achieved from Assam, Arunachal Pradesh and Rajasthan fields during the year. Accordingly, sales of 2080.23 MMSCM of Natural Gas was achieved during the year.

ACREAGE

Your Company''s current in-country operations spreads over onshore Petroleum Exploration License (PEL) and Petroleum Mining Lease (PML) areas in the states of Assam, Arunachal Pradesh, Mizoram, Andhra Pradesh, Puduchery and Rajasthan. Besides, your Company is venturing into shallow and deep water in KG Basin, Cauvery, Andaman and Mumbai offshore either jointly or in partnership with other consortium partners. Your Company is operating in 7 nominated PEL and 21 PML areas, allotted under the nomination regime in the states of Assam, Arunachal Pradesh and Rajasthan.

Your Company at the end of NELP IX bidding round as on 31.03.2013 is holding Participatory Interest (PI) in total of 27 NELP Blocks out of which OIL has the right of operatorship / joint operatorship in 12 and as non-operator in 15 blocks. In addition your Company is holding 40% PI in one CBM Block (AS-CBM-2008/ IV) in Assam.

OIL AND GAS RESERVES

Your Company has made eleven oil and gas discoveries during the year from Assam and Rajasthan of which nine discoveries are from Upper Assam basin and two from Bikaner Nagaur Basin of Rajasthan.

Your Company has a strong oil and gas reserves base as furnished below:

Particulars 1P 2P 3P

Oil Condensate (MMSKL) 41.42 95.14 135.08

GAS (BCM) 28.76 50.53 73.57

O OEG (MMSKL) 70.18 145.66 208.65

2. CAPITAL STRUCTURE

During the year, Company rewarded the shareholders with bonus shares in the ratio of 3:2 in the month of April 2012. Post bonus paid-up capital of the Company is Rs 601.14 crore divided into 60,11,35,955 shares of Rs.10/- each. Further Government of India divested 10% paid-up capital of the Company (60113157 shares) to the general public through Offer for Sale (OFS) route in February, 2013 and it was very successful. OFS got oversubscribed 2.6 times with participation of many FIIs and Govt could realize Rs 3141.39 crore. Post OFS, Government holding reduced to 68.43%. The Earning per Share of the Company as on March 31, 2013 is Rs.59.71/- as compared to Rs. 57.34/- at the end of previous financial year.

3. DIVIDEND

Your Company paid 1st and 2ndInterim Dividend @ 110% and 120% respectively totaling to Rs 1382.61 crore, based on the provisional financial trend of the Company. The Board of Directors is now pleased to recommend a final dividend @ 70% on the paid up capital amounting to Rs 420.80 crore, subject to the approval of the shareholders at the ensuing Annual General Meeting.

4. HUMAN ASSETS

Human Resource Management at OIL is an integrated approach focusing on Organization''s faith to work with people and work through them to manage change and strive for continued excellence. OIL works towards building positive employee- organization relationship through nurturing initiatives, innovations and aspirations with best HR practices and commitment and provide professional working environment. HR policies and practices are always sensitive to employees needs. As on 31st March 2013, Company has 8076 employees consisting of 1446 Executives and 6630 Unionised Employees in the Company.

5. SPORTS

OIL believes that sports today is an integral part of all round development of human personality and achieving excellence in sports has real bearing on national prestige and morale. Therefore, employees are encouraged to play and excel in sports. As a result of above encouragement, Oil India participated in National and International Sports Events in Table Tennis, Cricket, Chess and brought laurels to the Company. Besides this, 6 Oil Indians are part of National Squad of Golf.

6. IMPLEMENTATION OF GOVERNMENT DIRECTIVES FOR PRIORITY SECTIONS

The Company complies with the directives of the Government of India for priority sections of the society. The representations of various priority sections in Executive and Unionized Employees Categories in the Company as on March 31, 2013 is as under:

CATEGORY SC ST OBC Minority PWD Women

EXECUTIVES 169 125 307 110 07 102

UNIONISED EM- 440 761 1947 435 56 266 PLOYEES

Total 609 886 2254 545 63 368

7. CORPORATE GOVERNANCE

As stipulated under Clause-49 and 55 of the Listing Agreement, the Management Discussion & Analysis Repoort, Report on Corporate Governance and the Business Responsibility Report have been incorporated as Annexure to the Directors'' Report. Your Company also complies with the Secretarial Standards issued by ICSI and Corporate Governance Guidelines enunciated by the Department of Public Enterprises, Government of India.

8. RTI ACT 2005

In order to promote transparency and increased accountability, Company has put up in place the mechanism for implementation of Right to Information Act 2005. CPIO / CAPIO at offices across the country have been nominated to provide the information to the citizen of the country under the Act. The names, designation and address of the CPIO/CAPIO are available on the website. Company has also put up an information manual on the web containing details like organization structure, powers and duties of officers, rules and regulations, directory of officers, remuneration of officers, remuneration of workmen and information of the public at large. Complaints received during the year were expeditiously replied.

9. IMPLEMENTATION OF OFFICIAL LANGUAGE (RAJBHASHA)

In pursuance of Official Language Policy / Act / Rules / Orders of the Govt. of India efforts are continuing towards increasing the use of Hindi in Official work. Hindi Workshops were conducted regularly so as to enable officers and employees to work in Hindi conveniently and efficiently. Meetings of Official Language Implementation Committee were held in each quarter. The responsibility of the Chairmanship of Duliajan Town Official Language Implementation Committee (TOLIC) was also borne by our Company, to attend Hindi training classes and to write more and more words in Hindi through Incentive Scheme formulated by the Company. In-house Journal "OIL NEWS" was published in Trilingual form i.e. Assamese, Hindi and English. Hindi Month 2012 was observed in a befitting manner from 01.09.12 to 30.09.12 at Field Headquarters Duliajan. To propagate Official Language Hindi, amongst employees and school going children, various literary competitions were held during Hindi Month Celebration. Important documents, to be laid on the table of Parliament, were also brought out in bilingual form.

10. VIGILANCE

"Vigilance Wing" is headed by Chief Vigilance Officer, which helps in ensuring functioning of the organization in a transparent manner. Main thrust is placed on the preventive vigilance rather than punitive vigilance. Towards this objective, several Contract & Procurement Operation & maintenance related system improvement measures were undertaken. Intensive inspections were carried out and corrective measures were suggested.

A Vigilance Awareness Week was organized during the year at corporate office and other office locations. In order to spread awareness and sensitize employee against harmful effects of corruption, various competitions were organised across your company.

KIT and CTY awareness programs were conducted for executives of all levels to sensitize them on Contracts & Procurement procedures, CDA rules and CVC guidelines etc.

11. RESEARCH AND DEVELOPMENT

The Company accords utmost importance to up- gradation of technologies and expertise in various areas of activities through its own Research & Development Centre. Ministry of Heavy Industries and Public Enterprises has placed great emphasis on the role of R&D in Central Public Sector Enterprises (CPSEs). Although an informal R&D policy was in existence in OIL since inception of R&D, a New R&D Policy was formulated and was approved for implementation by the Board of Directors. Company undertook various R & D projects during the year besides those committed under the MoU. The details of specific areas of Research and Development (R&D), benefits derived as a result of R&D efforts, future plan of action and R&D expenditure are given in Annexure -I.

12. SUBSIDIARY/JOINT VENTURE SUBSIDIARIES

i) Oil India Sweden AB

Oil India Sweden AB is a wholly owned subsidiary of Oil India Limited, India. The company was incorporated on the 20th of November 2009 as a private limited company (AB). The activities of the Company are to conduct owning of shares in other companies, perform administrative tasks and associated activities; to incorporate, to participate in and to finance companies or businesses etc.

ii) Ind Oil Netherlands BV

Oil India Sweden AB owns 50% of the shares in Indoil Netherlands B.V. The principal activities of the 50% owned joint venture Indoil Netherlands B.V. are holding in exploration, production, marketing, trade, transport and extraction of oil, gas, hydrocarbons and minerals.

iii) Oil India Cyprus Ltd

Oil India Cyprus Limited was incorporated in Cyprus on 21 October 2011 as a private limited liability Company under the Cyprus Companies Law, Cap. 113. Oil India Limited holds 76% in the Company. The balance 24% is held by Oil India Sweden AB.

iv) Oil India USA Inc.

OIL formed 100% wholly owned subsidiary in Texas, USA in the name of Oil India (USA) Inc with Branch Office at Houston started functioning from end Sept. 2012.

JOINT VENTURES

i) Numaligarh Refinery Limited (NRL)

Numaligarh Refinery Limited was incorporated in 1993. NRL is a Category -I Mini Ratna PSU having a 3 MMTPA Refinery at Numaligarh, in Golaghat District of Assam. The Company is a subsidiary of Bharat Petroleum Corporation Limited. OIL is holding 26% of the paid up equity in NRL.

ii) Brahmaputra Cracker and Polymer Limited (BCPL)

BCPL was incorporated on January 8, 2007 with the objective of establishing a gas cracker project complex at Lepetkata, Dibrugarh, Assam, to, inter alia, process natural gas, naphtha or any petroleum product and to distribute and market petrochemical products in India and abroad. BCPL received its certificate of commencement of business on September 12, 2007. The registered office of BCPL is located at Guwahati, Assam, India. OIL holds 10% Equity Share Capital of BCPL.

iii) Suntera Nigeria 205 Limited

Our Company acquired a 25% equity stake in Suntera Nigeria 205 Limited, Nigeria pursuant to a share purchase agreement dated August 31, 2006 with Suntera Cyprus and IOCL. Suntera Nigeria 205 Limited was incorporated with the main object to engage in the petroleum business including the prospecting and exploration for and production and development of crude oil and natural gas. The registered office of Suntera Nigeria is at Nigeria.

iv) Duliajan Numaligarh Pipeline (DNP) Limited

DNP Limited was incorporated on June 15, 2007. The main object of DNP Limited is acquisition, transportation and distribution of natural gas in all forms. The registered office of DNP Limited is situated at Guwahati, Assam. Our Company has acquired a 23% equity stake in DNP Limited, pursuant to a Supplemental Agreement dated March 17, 2009.

13. STATUTORY REQUIREMENTS

Section 274(1) (g) of the Companies Act, 1956 is not applicable to the Government Companies. However, none of the Directors of your Company is disqualified as per provisions of Section 274 (1) (g) of the Companies Act, 1956. Your Directors have made necessary disclosures as required under various provisions of the Companies Act, 1956 and Clause 49 of the Listing Agreement. Information as required under Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure I forming part of this Report. Details of the Employees who drew remuneration exceeding the limits laid down under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 (as amended from time to time) are attached as Annexure II.

14. STATUTORY AUDITORS AND COST AUDITORS

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India (C&AG). M/s SRB and Associates and M/s Saha Ganguli and Associates were appointed as Joint Statutory Auditors for the financial year 2012-13. Geographical Segment Reporting annexed as Annexure III. Comments of the C&AG forms part of this Report.

The Cost Audit Report for the financial year 2011-12 was filed with in the statutrytime limit. M/s Mani & Co. is the cost auditor of the Company for the financial year 2012-13. The report is being finalized and will be filed as per the schedule.

15 AWARDS AND RECOGNITIONS

Oil India Limited received the following awards/ recognitions/certifications during the year 2012-13:

- ''IPE CSR Corporate Governance Award-2012'' conferred by Institute of Public Enterprise (IPE) in recognition of its best practices followed in CSR activities.

- Petrotech 2012 - Special Technical Award in Sustainability & Corporate Social Responsibility awarded during Petrotech 2012 at New Delhi.

- ''Golden Peacock Award for Corporate Social Responsibility'' for the year 2012 in the National Category in recognition of OIL''s ongoing CSR activities, awarded at the "Dubai Global Convention- 2012 and 7th International Conference on Social Responsibility" held at Dubai in April, 2012.

- The ''13th Annual Greentech Environment Award - 2012'' awarded by Greentech Foundation, New Delhi.

- The ''Golden Peacock Occupational Health and Safety Award (GPOHSA) - 2012,'' presented at the 14th World Congress Environment Management held in July, 2012 at New Delhi.

- The Annual Greentech HR Award 2012-13 under Gold Category for "TRAINING EXCELLENCE" for the 2nd consecutive year.

- Rajbhasha Prerak Shield awarded to OIL, PHQ, Guwahati by the Rastrabhasha Swabhimman Nyash (Bharat), New Delhi on the occasion of All India Official Language Conference held at New Delhi in April, 2012.

- 1st Rajbhasha Running Shield awarded to PHQ, Guwahati by Town Official Language Implementation Committee (PSU''s), Guwahati in December, 2012 for the second consecutive year.

- 1st Rajbhasha Shield awarded to PHQ, Guwahati by the Official Language Department, Ministry of Home Affairs, Govt. of India in April, 2013 for the 3rd consecutive year.

- Shri SK Srivastava Chairman and Managing Director, received the Global Excellence Award in the Petroleum Sector at the 3rd World Petrocoal Congress, New Delhi, for his contribution to the Petroleum industry.

- Shri S.K.Srivastava was also awarded the "CEO with HR Orientation" by the World HR Congress at Mumbai in February, 2013.

- Shri T.K.Ananth Kumar, Director (Finance) was awarded the "CFO 100 Roll of Honour" for the second time in succession, under the category "Winning Edge" in Risk Management.

- Shri N.K.Bharali, Director (HR&BD) received an award and citation at the EQ Leadership Summit, February, 2013, Mumbai, for "Outstanding contribution to leadership development in OIL."

- Fire Service, Duliajan & Moran re-certified by M/s. DNV Kolkata for ISO 9001:2008 (Quality Management System), ISO 14001:2004 (Environmental Management System) and OHSAS 18001:2007.

- OIL Corporate Office Building, at Sector: 16A, Plot: 19, Noida, accredited with Bureau of Energy Efficiency (BEE) - 3 Star Label Certification with effect from 20th March,2013 for a period of 5 years up to 19th March, 2018 under the ''Composite Climate Zone'' category.

- Duliajan PowerStationhascompliedwithrequirements of ISO 9001:2008 till 26th January 2013. Thereafter a new contract was awarded for which audit is to be carried out for recertification.

16 CHANGES IN THE BOARD OF DIRECTORS

In terms of letter No. C-34011/19/2005-CA dated 03.09.12 issued by MOP&NG, Prof. Shekhar Chaudhuri, Shri. Anup Mukerji, Prof. Gautam Barua, Shri. S.C. Gupta and Prof. B. Ramamurthi were appointed as Non Executive Independent Directors w.e.f. September 16, 2012. CA Pawan Kumar Sharma, Prof. Sushil Khanna, Shri. Vinod K. Misra, Shri Ghanshyambhai H. Amin and Shri Alexander K. Luke ceased to be Directors on September 15, 2012. In terms of letter no. C-31033/1/2012-CA dated. 13.08.2013, Shri Nalin K. Srivastava, DS (E-11), MoP & NG was appointed as Government Nominee Director Vice Shri Atul N. Patne.

17 DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under the Section 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed that: (i) In the preparation of the annual accounts for the financial year ended 31 st March, 2013, all applicable accounting standards had been followed, along with proper explanations relating to material departures; (ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as on 31.03.2013 and of the profit of the Company for the year ended on that date; (iii) The Directors had taken proper and sufficient 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; (iv) The Directors had prepared the accounts for the financial year ended 31st March, 2013 on a ''going concern'' basis.

18 ACKNOWLEDGEMENT

With the initiatives through the renewed vision of enlarging the Company''s contribution and with our combined zeal, commitment, experience and expertise, your Directors look forward to another year of fruitful operations. Your Directors acknowledge the guidance and support of the Ministry of Petroleum & Natural Gas,all other Ministries and agencies in Central and State Governments. Your Directors express their gratitude and thanks to the Shareholders, Customers, Suppliers and other business partners/associates for their continued co-operation and patronage. Your Directors wish to place on record their deep sense of appreciation for the devoted services of all Oil Indians for its success.

For and On behalf of the Board of Directors.

Sd/-

(S K Srivastava)

Chairman & Managing Director

Dated : 24.08.2013

Place : NOIDA


Mar 31, 2012

The behalf of the Board of Directors of the Company, take great pleasure in presenting the 53rd Annual Report on the working of the Company for the financial year ended 31st March 2012, along with the Audited Statement of Accounts, Auditors' Report and the Review of Accounts by the Comptroller and Auditor General of India.

Your Company has just completed 53 eventful years of its glorious existence on 18th February 2012 and is marching ahead to meet larger goals with a renewed vision and higher levels of commitment of all OIL Indians.

1.0 SIGNIFICANT HIGHLIGHTS

Your Company, a Navratna PSE, while helping the nation in attaining hydrocarbon self- sufficiency, is expected to maintain its own competitive advantage and support the nation in its drive to eventually become a global giant.

PRODUCTION AND SALES

Your Company has set another record of achieving the highest ever production of crude oil and natural gas.

Crude Oil

- Highest ever terminal production rate of 10,765 MTPD (3.93 MTPA).

- Highest total production of 3.847 MT for a year, 102.3% of planned target.

Natural Gas

- Highest ever total production of 2,633.29 MMSCM in a year.

- Highest ever total sale of 2,093.02 MMSCM in a year.

PROFIT AFTER TAX (PAT)

The Company has made a record Profit After Tax (PAT) of Rs. 3,446.92 crore during the year, a growth of 19.36% over the PAT of the previous year.

ACREAGE

Your Company holds 1,56,890 sqkm of acreage, including those in India and overseas, covering seventy eight blocks, of which it holds in India 13 NELP as Operator, 1 NELP as Joint Operator, 19 NELP as Non-Operator, 2 as JV, 8 Nominated PELs, 1 CBM Block and 21 PMLs. Your Company holds 3 blocks as Operator, 8 as Non-Operator and 2 as JV partner overseas.

OIL AND GAS RESERVES

Your Company has made a total of seven hydrocarbon discoveries in the Upper Assam basin during the year. This year the accretion to recoverable reserves is 9.54 MMSKL (O OEG) of oil and gas, thus achieving the "Very Good" targets set in this regard in the MOU with GOI.

Your Company has a strong oil and gas reserves base as furnished below, which reflects a significant growth potential.

1P 2P 3P

Crude oil (MMSKL) 43.64 95.36 139.68

Natural Gas (BCM) 31.62 54.15 77.21

OfOEG (MMSKL) 75.26 149.51 21759

2.0 FINANCIAL HIGHLIGHTS

Brief financial highlights of the Company for the year 2011-12 on a standalone basis, and a comparison with the performance in the previous year is given below:

(Rs. Crore)

2012 2011

INCOME

Sales 9,058.43 7,764.41

Income from transportation 460.38 243.51

Other operating income 344.42 312.68

Other income 1,445.37 873.89

Total Income 11,308.60 9,194.49

EXPENDITURE

Changes in inventories of finished goods (8.82) (7.64)

Employee benefit expenses 1,517.54 1,204.90

Finance cost 9.37 13.13

Depreciation, depletion, amortization and impairment 1,008.82 819.67

Statutory levies 2,394.83 2,087.59

Other expenses 1,285.00 763.64

Total Expenditure 6,206.74 4,881.29

Profit before tax 5,101.86 4,313.20

Provision for taxation

Current tax (including Wealth Tax) 1,727.26 1,297.32

Deferred tax (72.32) 128.15

Total tax expenses 1654.94 1425.47

Profit: after tax 3446.92 2887.73

APPROPRIATIONS

Interim dividend 841.59 432.82

Tax on interim dividends 136.53 71.89

Final dividend 300.56 468.88

Tax on proposed final dividend 48.77 76.06

Transfer to general reserve 2,119.47 1,838.08

Total appropriations 3,446.92 2,887.73

a) The Shareholders' Funds as on 31.03.2012 were Rs. 17,721.34 crore. The Debt: Equity ratio of company is very healthy at 0.001:1, as against 0.066:1 in the previous year.

b) Based on post bonus share capital, the earnings per share (EPS) had increased to Rs. 57.34 in 2011-12 as compared to Rs. 48.04 in 2010-11.

3.1 BONUS

The Company has issued bonus shares in the ratio of 3:2 (i.e. 3 (three) equity shares of Rs. 10/- each fully paid up for every 2 (two) existing equity share of Rs. 10/- each fully paid up), by capitalization of the securities premium account. Credit/ dispatch of the bonus shares has been completed on 4th April 2012.

3.2 DIVIDEND

Your Directors are pleased to recommend a final dividend of Rs. 5 per equity share (50%) on the post-bonus issue share capital, subject to the approval of the shareholders at the ensuing Annual General Meeting. In addition, your Company paid an Interim Dividend @ 250% and Second Interim Dividend @ 100% based on the provisional financial trend of the Company on the paid up capital. The total dividend for the year 2011-12 on the pre-bonus issue share capital will be Rs. 47.50 (Previous year Rs. 37.50) per equity share of Rs. 10 each.

4.0 RESEARCH AND DEVELOPMENT

The Company gives due importance to continuous upgradation of technologies and expertise in various areas of activities through its own Research and Development Centre. The details of R & D activities carried out are given in Form - B of this Report.

5.0 HUMAN ASSETS

Your Company has 8,096 employees on the rolls of which 1,340 personnel are in the executive cadre. Team Oil India is a workforce dedicated to meet the vision of your Company and is always endeavoring to take your Company to challenging heights.

6.0 INDUSTRIAL RELATIONS

Harmonious and cordial relations were maintained with employees' recognized union, namely, IOWU and other registered unions operating in OIL. The employees' unions extended full co-operation to the Management and actively participated in sorting out employees' problems and grievances. Regular and periodic interactions with registered unions were very effective in dealing with industrial relations issues.

7.0 RECOGNITIONS

1. Company of the Year Award by Indian Chamber of Commerce supported by the Department of Public Enterprises, Government of India, for its all-round performance on the physical, financial, HSE, CSR and sustainability parameters.

2. Golden Peacock Award for Corporate Governance.

3. Greentech Environment Award 2011 in Gold Category in the Oil and Gas Sector.

4. NDTV Business Leadership Award in the Oil and Gas Sector 2010-11.

5. The SCOPE Award for Excellence and Outstanding Contribution to Public Sector Management - Individual Leader, PSE Category 2009-10.

6. IPE HR Leadership Award from the Institute of Public Enterprise (IPE) at the World HRD Congress.

7. 2nd Annual Greentech HR Gold Award 2012, in the Training Excellence category for the Corporate sector.

8.0 CORPORATE GOVERNANCE

As stipulated under Clause-49 of the listing agreement, both the Management Discussion and Analysis Report and the Corporate Governance Report have been incorporated as separate sections forming part of the Annual Report. Your Company also complies with the secretarial standards issued by ICSI and the corporate governance guidelines enunciated by the Department of Public Enterprises, Government of India. The Ministry of Corporate Affairs, Govt of India has issued a set of voluntary guidelines on corporate governance in December 2009. The guidelines provide for good governance practices which may be voluntarily adopted by corporates. Oil India Limited complies with most of these guidelines and would endeavour to comply with the other guidelines that are applicable to a government company.

9.0 CHANGES IN THE BOARD OF DIRECTORS

Shi N.M Borah, Chairman & Managing Director superannuated from the service of the company on 30th April, 2012. The Board wishes to place on record its sincere appreciation of his invaluable contribution to the company.

In terms of the Letter No. C-31014/6/2010-CA dated 21st March, 2012 issued by the Ministry of Petroleum and Natural Gas, Shri

S.K.Srivastava, Director General, Directorate General of Hydrocarbons assumed the post of Chairman & Managing Director of Oil India Limited w.e.f. 1st May, 2012 vice Shri N.M Borah.

The tenure of Shri A.K.Gupta as Independent Director ended on 29.07.2011

Shri D.N Narasimha Raju, Joint Secretary, MOP&NG ceased to be Government Nominee Director on the Board of OIL w.e.f 05.01.2012 consequent to his transfer from MOP&NG. Shri Aramane Giridhar, Joint Secretary, Ministry of Petroleum & Natural Gas, of India was appointed as Government Director vide MOP&NG Letter No. C-31019/1/2006-CA dated 28.02.2012.

Smt. Rashmi Aggarwal, Director (E-III), MOP&NG and Shri Atul Patne, Dy. Secretory (E-II), MOP&NG were appointed as Government Nominee Director on the Board of OIL vide MOP&NG letter No. C-31033/1/2012-CA dated 03.08.2012 vice Shri Aramane Girdhar, JS (E), MOP&NG and Dr (Smt.) Archana S Mathur, Economic Advisor, MOP&NG.

10.0 STATUTORY REQUIREMENTS

Section 274 (1)(g) of the Companies Act, 1956 is not applicable to government companies. However, none of the directors of your Company is disqualified as per these provisions. Your Directors have made the necessary disclosures as required under various provisions of the Companies Act, 1956 and Clause 49 of the Listing Agreement. Information as required under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure I which forms a part of this Report. Details of the Employees who drew remuneration exceeding the limits laid down under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 (as amended from time to time) are attached as Annexure-II.

11.0 STATUTORY AUDITORS

The Statutory Auditors of your Company are appointed by the Comptroller and Auditor General of India (C & AG). M/s SRB and Associates and M/s Saha Ganguli and Associates are the joint statutory auditors for the financial year 2011-12. The auditors' remuneration for the year 2011-12 has been fixed at of Rs. 9 lakh each plus travelling and out-of-pocket-expenses.

12.0 COST AUDIT

The Cost Audit Report for the financial year 2010-11 was filed with the government on 26th September 2011, a day before the due date. M/s Mani and Co. are the cost auditors of the Company for the financial year 2011-12. The report is being finalized and will be filed as per the schedule.

13.0 DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to the directors' responsibility statement, it is hereby confirmed that:

(i) In the preparation of the annual accounts for the financial year ended 31st March, 2012, all applicable accounting standards had been followed, along with proper explanations relating to material departures;

(ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as on 31st March 2012 and of the profit of the Company for the year ended on that date;

(iii) The directors had taken proper and sufficient 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;

(iv) The directors had prepared the accounts for the financial year ended 31st March, 2012 on a 'going concern' basis.

14.0 ACKNOWLEDGEMENT

With innovative initiatives through the renewed vision of enlarging the Company's contribution and with our combined zeal, commitment, experience and expertise, your Directors look forward to another year of fruitful operations, together with an overall improvement in efficiency during the year 2012-2013. Your Directors acknowledge the guidance and support of the Ministry of Petroleum and Natural Gas, and of all other ministries and agencies in the Central and State Governments. Your Directors also express their gratitude to the shareholders, customers, suppliers and other business partners and associates for their continued co-operation and patronage. Your Directors wish to place on record their deep sense of appreciation for the exemplary services of all Oil Indians towards the Company's success.

For and on behalf of the Board of Directors

Sd/-

(S K Srivastava)

Chairman and Managing Director

Dated : 08.08.2012

Place : Noida


Mar 31, 2011

Dear Shareholders,

On behalf of the Board of Directors of the Company, l take great pleasure in presenting the 52nd Annual Report on the working of the Company for the financial year ended 31st March 2011, along with the Audited Statement of Accounts, Auditors' Report and the Review of Accounts by the Comptroller and Auditor General of India.

Your Company has just completed eventful 52 years of its glorious existence on 18th February 2011 and is marching ahead with a renewed vision and commitments of all Oil Indians for greater growth.

We believe that the only way is going upwards; as it is always our endeavor to go from strength to strength. We look for ideas, new ways of working and aim for moving ahead while maintaining our work culture. We believe that creativity is contagious and induces enthusiasm. We look at problems as opportunities and overcome setbacks by gaining in strength. We do it big, we do it right, and we do it with class. Nevertheless, we do not believe in speaking about our achievements. We believe in what others say about us, which is a true reflection of our achievements.

1.0 SIGNIFICANT HIGHLIGHTS

Navratna Status

Your Company is now a Navratna PSE since first quarter of the 2010. The grant of Navratna status is in recognition of the tireless efforts and contribution of all the Oil Indians towards helping the nation in attaining energy security and it is envisaged to bring competitive advantage by supporting its drive to eventually become a global giant.

Excellent MoU Rating

Your Company has been rated "Excellent " in the MOU with GoI for the year 2009-10 and is expected to be rated at the same level during 2010-11.

Production and Sale

Your Company has set another record of achieving the highest ever production of crude oil and condensate at 3.609 MMT. The production of natural gas and LPG was 2352.71 MMSCM and 45010 Tonnes respectively. We transported 5.95 MMT of Crude oil and 1.069 MMT of products through our pipelines. This helped to achieve the highest sales turnover of Rs. 8113.22 crores during the year and set a new record of 10.62 % increase in Profit after tax at Rs. 2887.73 crores compared to the previous year, despite bearing a burden of subsidy to the tune of Rs. 3293.08 crores to PSU Oil Marketing Companies on the price of Crude Oil and LPG as per the administrative order of the Ministry of Petroleum and Natural gas.

Acreage

Your Company holds 165865 Sq.Kms. of acreages both indigenously and overseas covering seventy six blocks out of which in India, 11 NELP as Operator, 1 NELP as Joint Operator, 18 NELP as Non-Operator, 3 as JV, 9 Nominated PELs and 21 PMLs. In overseas, 3 as Operator, 8 as Non-Operator and 2 as JV.

Oil & Gas Reserves

Your Company has made a total of six new hydrocarbon discoveries in Upper Assam basin during the year. This resulted in an accretion to recoverable reserves by 9.57 MMKLs (O OEG) of oil and gas achieving the "Excellent" targets set in this regard in the MOU with GoI.

Your Company has a strong oil and gas reserves base as furnished below, which reflects a significant growth potential.

MMSKLOE

1P 2P 3P

Crude oil 44.51 92.84 137.87

N.Gas 35.73 57.32 80.29

Total 80.24 150.16 218.16

2.0 Research and Development

Your Company gives great importance in continuous up-gradation of technologies and expertise in various areas of activities through its own Research & Development Centre. The details of activities carried out are given in Form-B of this Report.

3.0 Human Assets

Your Company has 8634 employees on the rolls, of which 1708 personnel are in executive cadre. Team Oil India is a workforce dedicated to meet the vision of your Company and is always endeavoring to take your Company to challenging heights.

4.0 Industrial Relations

Harmonious and cordial relations were maintained with the employees. The employees' Union extended full co-operation and actively participated with the management in sorting out employees' problems and grievances. There was no incidence of man-days loss due to industrial relations problems.

5.0 Recognition

Your Company was accorded recognition for its meritorious services to its stakeholders as follows:-

i. First Prize for Oil Industry Safety Award in Oil & Gas Assets (Onshore) Category;

ii. Gold Award for the year 2011 in Petroleum Sector for Outstanding Achievement in Safety Management by the Greentech Foundation, Hyderabad;

iii. Best Environment Management and Sustainable Development Award by Indian Chamber of Commerce.

iv. Greentech Environment Excellence Award for the year 2010 by the Greentech Foundation, Hyderabad;

v. Golden Peacock Global Award for CSR for the year 2010 at the 5th Global Conference on Social Responsibilities organized by World Council for Corporate Governance in Lisbon, Portugal, for CSR in recognition of Company's social and environmental concerns ,economic value addition and social good;

vi. Greentech HR Excellence Gold Award 2010 for Outstanding Achievement and Innovation in Employee Retention Strategies;

vii. Motivational Leadership Award at the Global HR Excellence Awards 2010-11 during the World HRD Congress;

viii. HR Leadership Award honored Shri N.K.Bharali Director (HR&BD) at the 5th Employee Brand award ceremony in appreciation of Individual or Organization who have made a shining contribution and made the HR Industry proud; and

ix. Recognizing Winning Edge 2010 in Raising Capital / Capital Restructuring by CFO 100 honored Shri. T. K. Ananth Kumar, Director (Finance) as Best CFO for excellence in the abovementioned category;

6.0 Corporate Governance

As stipulated under Clause-49 of the listing agreement, the Management Discussion & Analysis Report and the Corporate Governance Report have been incorporated as separate sections forming part of the Annual Report. Your Company also complies with the Secretarial Standards issued by ICSI and corporate governance guidelines enunciated by the Department of Public Enterprises, Government of India. The Ministry of Corporate Affairs, Govt. of India has issued a set of voluntary guidelines on Corporate Governance in December 2009. The guidelines provide for good governance practices which may be adopted by corporates voluntarily. Oil India complies with most of the provisions of the guidelines and would endeavour to comply with the other provisions that are within the domain of a Government Company.

7.0 FINANCIAL HIGHLIGHTS-Table-I

The summarized Profit & Loss Account is furnished below:-

(Rs. in Crores)

2011 2010

INCOME

Sales 8113.22 7748.56

Income from Transportation 190.16 156.99

Other Income 1185.10 937.13

Other adjustments 60.73 17.05

Total Income 9549.21 8859.73

EXPENDITURE

Increase/(Decrease) in Stock (7.64) 10.57

Production, Transportation & Other Expenditure 4139.90 4072.90

Provision against debts, advances and other provisions/write-offs 469.60 282.72

Depletion 301.46 262.81

Depreciation 176.68 218.27

Interest & Debt Charges 13.92 3.65

Exchange Loss/(Gain) 1.40 (4.77)

Other Adjustments 144.83 112.62

Total Expenditure 5240.15 4958.77

Profit for the period / year 4309.06 3900.96

Prior Period items (4.14) 5.86

Profit Before Tax 4313.20 3895.10

Provision for Taxation:

Current Tax (Including Wealth Tax) 1297.32 1159.82

Tax for earlier years - 3.68

Deferred Tax 128.15 121.07

1425.47 1284.57

Profit After Tax 2887.73 2610.52

APPROPRIATIONS:

Interim Dividend @ 180% (Previous Year - 180%) 432.82 432.82

Tax on Interim Dividends 71.89 73.56

Final Dividend @ 195% (Previous Year - 160%) 468.88 384.73

Tax on Proposed Dividend 76.06 63.90

Transfer to General Reserve 1838.08 1655.52

TOTAL 2887.73 2610.52

a) The Shareholders' Funds as on 31.03.2011 were Rs. 15601.87 crores against loans of Rs. 1026.79 crore giving a Debt: Equity Ratio of 0.066:1 against 0.0027:1 in the previous year.

b) Earnings per Share (EPS) had increased to Rs. 120.09 in 2010-11 compared to Rs. 113.78 in 2009-10.

7.1 Dividend

Your Company paid an interim dividend @ 180% (previous year 180%), based on the provisional financial trend of the Company. The Board of Directors is now pleased to recommend a final dividend @ 195% on the paid up capital making the total dividend of 375% (Previous year 340%) for the year, subject to the approval of the shareholders at the ensuing Annual General Meeting. It is also proposed to transfer the balance of Rs. 1838.08 crore to the General Reserve.

8.0 CHANGES IN THE BOARD OF DIRECTORS

During the year, Shri. N. K. Bharali has been appointed as Director (Human Resource & Business Development) vide MOP&NG Letter No. C-31014/1/2008-CA dated 14.09.2010 and Shri. S. Rath has been appointed as Director (Operations) vide MOP&NG Letter No. C-31014/8/2010-CA dated 30.03.2011.

9.0 STATUTORY REQUIREMENTS

Section 274(1)(g) of the Companies Act, 1956 is not applicable to the Government Companies. However, none of the Directors of your Company is disqualified as per provisions of Section 274 (1) (g) of the Companies Act, 1956. Your Directors have made necessary disclosures as required under various provisions of the Companies Act, 1956 and Clause 49 of the Listing Agreement. Information as required under Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure I forming part of this Report. None of the employees of your Company drew remuneration exceeding the limits laid down under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time.

10.0 STATUTORY AUDITORS

M/s Chatterjee & Co. and M/s SRB & Associates, appointed by the Comptroller & Auditor General of India (C&AG), are the Joint Statutory Auditors for the financial year 2010-11. The Auditors' remuneration for the year 2010-11 has been fixed at Rs. 9 lakhs each plus traveling and out-of-pocket-expenses, if any, in addition to the aforesaid amount for carrying out the statutory audit for the year 2010-11.

11.0 COST AUDIT

M/s Musib & Associates (M.No. 5546) are the Cost Auditors of the Company. The Cost Audit Report for the year 2009-10 has been filled on the due date i.e. 27th September, 2010. The due date for filling Cost Audit Report 2010-11 is 27th September, 2011. The Report is being finalized.

12.0 DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under the Section 217(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed that:

(i) In the preparation of the annual accounts for the financial year ended 31st March, 2011, all applicable accounting standards had been followed, along with proper explanations relating to material departures;

(ii) the Directors have selected such accounting policies and applied them consistently, except changes as stated in Para 2.2 of Schedule 27 to the Accounts per mandated convention, and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as on 31.03.2011 and of the profit of the Company for the year ended on that date;

(iii) the Directors had taken proper and sufficient 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) the Directors had prepared the accounts for the financial year ended 31st March, 2011 on a 'going concern' basis.

(v) proper systems are devised to ensure compliance of all laws applicable to the Company.

13.0 ACKNOWLEDGEMENTS

With the initiatives through the renewed Vision of enlarging the Company's contribution and with our combined zeal, commitment, experience and expertise, your Directors look forward to another year of fruitful operations combined with an overall improvement in efficiency during the year 2011-2012.Your Directors acknowledge the guidance and support of the Ministry of Petroleum & Natural Gas, all other Ministries and agencies in Central and State Governments. Your Directors express their gratitude and thanks to the Shareholders, Customers, Vendors, Service Providers and other business partners/associates for their continued co-operation and patronage. Your Directors wish to place on record their deep sense of appreciation for the devoted services of all Oil Indians for its success.

For and on behalf of the Board of Directors.

Sd/-

(N.M. Borah)

Chairman & Managing Director Dated: 27.07.2011


Mar 31, 2003

1.0 Your Directors have the pleasure in presenting the 44th Annual Report on the working of the Company together with audited statement of accounts for the financial year ended 31st March, 2003.

2.0 THE YEAR IN RETROSPECT

2.1 ACHIEVEMENTS

The year 2002-2003 has been a successful year with your Company meeting most of the targets as set in the Memorandum of Understanding 2002-2003. The significant achievements during the year are as under:

a) Seismic Performance target was achieved except for shortfall in 3D survey due to non-receipt of defence clearance for Cauvery Offshore. The total achievement was 1950 GLKM of 2D Data and 350 SQKM of 3D Data. This was the highest ever survey by your Company with 9 seismic parties in operation in the 4th quarter.

b) Drilling achievement surpassed target by 10% inspite of severe downhole problems in few wells. Drilling achievement of 1,30,035 Mtrs was the highest ever achieved.

c) Accretion to in-place and recoverable reserves surpassed the target with in-place accretion of 21.86 MMT and Recoverable Reserves accretion of 9.79 MMT against the target of 20.7 MMT and 9 MMT respectively.

d) LPG production is 9% more than the target with achievement, of 54,320 tonnes against target of 50,000 tonnes. The achievement is also 7% more than the last years achievement.

e) Although Gas production and Sale were lower than the targets due to delay in completion of revamping work of BVFCL, Namrup but were around 8% and 11% higher respectively than the previous year.

f) Although there was a shortfall in achievement of crude oil production target there has been a remarkable improvement in the Crude Oil quality during the year. Various measures taken resulted in reducing BS&W content to current level of below 1% as compared to around 4% in April, 2002.

g) Your company has duly completed the formulation of its Strategic and Corporate Plan. Action has already been initiated for implementation of the same.

h) Projectisation of Manabum Exploration as a part of its strategy for exploration in Frontier areas has been taken;

i) An Exploration Service Contract with National Iranian Oil Company, in consortium with ONGC Videsh Limited and Indian Oil Corporation Ltd. with OILS participating interest of 20% in FARSI Offshore Block in the Persian Gulf of Islamic Republic of Iran has been executed during the year.

j) Your Company acquired OVLs 100% stake in Sakhalin India Inc. (Sll), a company incorporated in Texas, USA which holds 10% participating interest in North Hellhole Bayou Prospect in offshore Vermillion" Parish, Louisiana, USA.

k) Your Company provided E&P consultancy to Morris Petroleum in Nigeria for assessment and submission of bids for development of marginal fields.

I) Profit Before Tax at Rs. 134057 lakhs represents an increase by 66.90% over the previous year.

m) Profit After Tax at Rs. 91673 lakhs represents an increase by 74.54% over the previous year.

n) The Earning Per Share (EPS) for year was Rs. 42.84 against Rs. 24.54 in the previous year.

o) The Return on Net Worth was 26.52% against 15.26% in the previous year.

p) The Shareholders Funds as on 31.3.2003 was Rs. 345690 lakhs against long term loans of Rs. 30771 lakhs giving a Debt Equity Ratio of 1:11.23 against 1:14.25 in the previous year.

Based on the performance during the year 2002-2003, your Company is expected to be rated as "EXCELLENT" with respect to targets set in Moll 2002-2003 with a composite score of 1.22 which would be the best ever achieved by your Company.

2.2 FINANCIAL RESULTS

(Rs./Lakhs)

Financial 2001-2002 2002-2003

Profit before interest, depreciation, depletion, write offs & taxation 107503 158516

Depreciation, depletion & write offs (45010) (36104)

Profit before interest & tax 62493 122412

Net interest (+) 4945 7989

Profit before tax, adjustment related to previous year & unusual items 67438 130401

Adjustment related to previous years & unusual items 12884 3656

Profit before tax 80322 134057

Corporate tax (27800) (37200)

Deferred Tax - (5184)

Profit after tax & surplus available for distribution 52522 91673

APPROPRIATION

a) Interim dividend @40% (Previous year - Nil) - 8560

b) Final dividend @90% (Previous year @75%) 16050 19260

c) Corporate Dividend Tax - 2468

d) Transfer to General Reserve 36472 61385

52522 91673

2.3 DIVIDEND

Your Company paid an interim dividend @40% during the year and your directors are now pleased to recommend a final dividend @90% on the paid up capital making the total dividend of 130% (previous year 75%) for the year, subject to the approval of the shareholders at the ensuing Annual General Meeting. It is also proposed to transfer the balance of Rs. 61385 lakhs to the General Reserve.

3.0 DISCOVERY OF OIL/GAS FIELDS

During the year under review, the following significant oil and gas discoveries were made in Assam :

3.1 Matimekhana North

First well drilled in Matimekhana North structure, located adjacent to Chabua High discovered low API, High viscous oil within Lakadong + Therria formation.

3.2 North Dikom

First well drilled in North Dikom structure, located adjacent to khagorijan discovered high pour point oil within Lakadong + Therria formation.

3.3 Matmekhana

First well drilled in Matimekhana (Chabua Extension) structure discovered oil within the Langpar formation of upper palaeocene.

3.4 East Deohal

First well drilled in East Deohal structure, located North of Nahorkatiya main field, discovered oil within the Lakadong + Therria formation.

3.5 Mechaki

First super deep well drilled in the Mechaki structure, located in far north eastern corner of Tinsukia district, encountered good quality oil within the Narpuh and Lakadong + Therria formation. Productivity of the reservoir is being assessed.

3.6 Baghjan

First well drilled in the Baghajan structure located in the fringe of Dibru reserve forest, discovered gas within the Langpar and Lakadong + Therria formation.

4.0 GEOSCIENTIFIC STUDIES, TECHNOLOGY UPGRADATION & EXCELLENCE

4.1 Geo-scientific Studies

Your Company carried out a number of Geoscientific Studies with the help of internationally reputed consultants and most of these were either completed or is at an advanced stage of completion. Some of these studies will help in identifying and locating petroleum system and its entrapment and thereby formulate the exploration strategy in the Upper Assam matured basin including the frontier areas. Other studies will facilitate to locate areas of by-pass oil/gas, plan for IOR/EOR, development of non-associated gas fields, identify reservoirs for horizontal drilling, formulate drilling policy for deep seated Eocene etc. and accordingly strengthen development activities for enhanced oil production.

4.2 Technology Upgradation & Excellence

Upgradation of laboratory Analytical Methodology : With the withdrawal of the Administered Price Mechanism (APM) and introduction of the Market Determined Pricing Mechanism (MDPM), the determination of Base Sediment and Water (BS&W) content and other parameters of the crude oil supplied to the refineries has achieved greater importance. In order to streamline laboratory-testing procedures as per ASTM standards, your company has procured several new equipment like the Karl Fischer Titrator, Automatic Distillation Apparatus, Sediment Content Analyser, Salt Content Analyser, Brookefield Viscometer etc. Procurement of a Simulated Distillation Apparatus is also envisaged to facilitate studies in the distillation characteristics and find yields of different cuts, which will be useful in determining the crude oil price.

Infra Red Mass Spectrometer : A highly sophisticated Infra Red Mass Spectrometer has been procured for advanced geo chemical studies.

Hydraulic Jet Pumps : Two sets of Jet Pumps were procured for producing a group of wells that need artificial lift. Such pumps work on the principal of nozzle and venturi. The first set of Jet Pump was installed at Bogapani and the second set is under installation at Kathaloni area.

Electrical Submersible Pump : Electrical Submersible Pumps are basically electric motor driven downhole centrifugal pumps, which are used for producing deeper wells that require high volume artificial lift. Your company has initiated action for procurement of 3(three) sets of such systems, which will help in producing wells located in remote areas.

Electrostatic Emulsion treater : Electrostatic Emulsion treater use high voltage electric field for separation of emulsified water from oil droplets and are more efficient than conventional Emulsion treaters which works on the principal of thermo-chemical treatment. Under the new pricing regime (MDPM), the stipulated BS&W content in crude Oil delivered to the refineries is to be kept at internationally accepted level in order to avoid any discount in price. Therefore, in order to maintain such quality, one number of Electrostatic Emulsion treater has already been procured and installed at Dikom OCS. Action is also initiated to install such Electrostatic Emulsion treater at the Central Tank Farm at Tengakhat by 2004.

Water Injection : A comprehensive study has been carried out for enhancement of Water Injection as IOR/EOR measures in our oil reservoirs of Naharkatia, Moran, Jorajan, Zaloni, Madhuting - Tipling and Shalmari oilfields. It has been established that the requirement of water injection volume will be around 14000 KLPD to sustain crude oil production in our depleting oil fields. Actions have been initiated to make the proposed water injection enhancement programme a success through extension of existing surface infrastructural facilities apart from taking measures for increasing the number of water injection wells.

Horizontal/Drain-hole Drilling including selection of wells : Your Company had engaged Internationally reputed consultant, M/s Schlumberger Asia Services Ltd. for the consultancy studies for assessing the feasibility of drilling horizontal wells in operational areas of OIL who have given their report. Study is also being carried out at IRS, Ahmedabad. Your Company has planned to drill few horizontal wells during 2003-2004.

Induction of Excel-2000 Open-Hole Wireline Logging Unit : The Excel-2000 logging system with its DITS and MUXB2 capabilities (DITS is the Digital instrumentation Telemetry System for down hole multicable operations and MUXB2 is for Monoconductor Cable Operations) have the benefit of improved reliability, improved measurements and more options for simultaneous operation of combinations of services.

Reservoir Monitoring Tool (RMT) : Halliburtons Reservoir monitor tool (RMT) Elite which is a slim-hole pulsed neutron logging system for monitoring and managing the production of hydrocarbon reserves was inducted in operations of your Company during the year. This logging tool allows accurate determination of oil and gas saturation, identification of by-passed reserves; formation fluid contact and water flow behind casing etc. It will help to optimize, manage and produce reservoirs more efficiently.

Induction of new generation 3D technology : A new generation 24-bit delta-sigma technology based SN-388 line telemetry seismic data recording system was successfully deployed in the field during the year for acquisition of 3D seismic survey data. The new system is equipped with state- of-the-art capability viz. high dynamic range, high speed data acquisition with distributory spread management, flexibility in field layout even in difficult terrain conditions with provision for limited wireless connectivity across obstacles and ability to record large number of channels simultaneously at 2 ms sampling rate. The system is also equipped with state-of-the-art data storage and display devices, online quality control software suite and software packages for survey design, simulation and project management, etc. The induction of this system has significantly augmented in house seismic survey capabilities of your Company.

5.0 PHYSICAL PERFORMANCE

5.1 The physical performance of the Company for the year ending 31.03.2003 in comparison with the previous year is furnished in Table-1 below :

TABLE-1

SI. Item Unit 2002-2003 2001-2002 No. Target Achievement Target Achievement

1. Crude oil production MMT 3.40 2.950 3.45 3.183

2. Natural gas production MMSCUM 1,820 1743.311 1,780 1,618.505

3. Natural gas sale MMSCUM 1,290 1237.300 1,215 1,113.194

4. LPG production Tonnes 50,000 54,320 50,500 50,950

5. Seismic survey

Assam & Arunachal Pradesh

- 2D Departmental GLKM 500 571.73 500 617.20

-3D -do- SSQKM 150 170.18 150 17.32

-2D Contract GLKM 500 738.86 1,000 148.80

-3D -do- SQKM 200 179.32 200 -

Ganga Valley Project

- 2D Contract GLKM 375 447.55 400 70.85

Saurashtra Exploration Project

-3D Contract SQKM - - - 332

Mahanadi Onshore

-2D Contract GLKM - 191.45 - -

6. Drilling 000 MTRS

ASSAM & AP

-Exploratory 55.00 42.201 60.20 39.556

-Development 60.20 87.834 62.30 57.470

Rajasthan

- Exploratory 3.00 - - -

GRAND TOTAL: 118.20 130.035 122.50 97.026

5.1.1 There were setbacks in crude oil production, primarily due to - (i) Initial crude oil production rate as on 01.04.2002 was only 3.00 MTPA against planned 3.36 MTPA. (ii) There was higher than expected decline rate in a few new field because of increase in water oil ratio, (iii) Less than planned production from a few wells in Kathaloni, Dikom, Madarkhat, North Hapjan, Shalmari etc. (iv) Continued blockade in Khagorijan area. Similarly low achievement in natural gas production is due to - (i) Regulated Non-Associated Gas (NAG) production based on market requirement (ii) Low upliftment by gas consumers viz. M/s BVFCL, Namrup and NEEPCO.

5.2 ACCRETION TO RESERVES

The estimated accretion to geological reserves (oil + oil equivalent of gas) and gross ultimate recovery due to exploratory and development drilling, workover and geological studies carried out during the period 01.04.2002 to 31.03.2003 are shown in Table-2 below :

TABLE-2

Total Additional Geological/Recoverable Reserves

SI. Area of operation 1.4.2002 to 31.03.2003 1.4.2001 to 31.03.2002 No. Oil Oil + OEG Oil Oil + OEG

1. Assam & A.P

Incremental Geological Reserves (MMT) 11.70 21.86 9.11 15.64

Incremental Gross Ultimate Recovery (MMT) 3.64 9.79 4.22 8.59

2. Rajasthan

Incremental Geological Reserves (MMT) - - - -

Incremental Gross Ultimate Recovery (MMT) - - - -

NOTES : The above figures do not include Kharsang Field which is under JVC.

5.3 RECOVERABLE RESERVES OF OIL AND NATURAL GAS

The estimated recoverable reserves of oil and natural gas as on 01.04.2002 and 01.04.2003 are given in the

Table-3 below:

TABLE-3

SI. Area of Operation Crude oil (MMT) No. Position as on 1.4.2002 11.4.2003 Increase

1.0 Assam & AP

Gross Ultimate 189.77 193.41 3.64 Recovery (GUR)

Cumulative Production 117.36 120.21 2.85 Balance Recoverable

Reserves 72.41 73.20 0.79

2.0 Rajasthan

Gross Ultimate Recovery (GUR) 2.19 2.19 -

Cumulative Production - - -

Balance Recoverable Reserves 2.19 2.19 -

Sl. Natural Gas (MMSCUM) Position as on 1.4.2002 1.4.2003 Increase (Decrease)

1.0 146466 152620 6154

52208 53808 1600

96200 100754 4554

2.0 3162 3162 -

353 423 70

2809 2739 (70) NOTES : The above figures do not include Kharsang field which is under JVC.

6.0 PROJECTS

6.1 RAJASTHAN :

M/s. ECL of UK submitted the final report of the Basin Modeling studies of Rajasthan Project in September 2002. Based on the study, locations are being identified for future drilling.

Defence Clearance for Work over operation in Mining Lease area in Tanot and Dandewala and for laying of 7.4 km pipeline received during February, 2003. Actions are now in hand for hiring of the rig for workover operations.

The agreement for Pilot study for the exploitation of Heavy Oil in Baghewala field was signed with M/s PDVSA, Intevep, Venezuella on 29.11.2002. Work is in progress.

6.2 SAURASHTRA EXPLORATION PROJECT :

Based on KDMIPE report, NGRI report, in house study and views of consultants, 332 SQKM of 3D Seismic data was acquired and interpreted. Presently your Company alongwith ONGCL decided for a joint approach for study of the Mesozoics in Saurashtra & Kutch offshore area below the trap.

6.3 GANGA VALLEY PROJECT :

Further acquisition of seismic data (625GLKM during 2003-04) and geoscientific studies have been planned. During 2002-03 as against the target of 375 GLKM, there was an achievement of 447.55 GLKM.

For the first time, mechanized shot-hole drilling rigs were deployed in the Himalayan foothills for survey work.

6.4 BRAHMAPUTRA VALLEY EXPLORATION PROJECT :

Commercial discovery of hydrocarbon has not been made so far under the above project. Your company has taken a strategic decision to temporarily discontinue the project till further decisions are firmed up based on ongoing in-house study.

6.5 JOINT VENTURES:

(A) Status/Achievements of PSC/JVCs executed or initiated for execution during the year 2002-2003 are as under.

(a) RJ-ONN-2001/1 in Onshore Rajasthan

Your Company with a Participating Interest (PI) of 70%, in consortium with Oil and Natural Gas Corporation Limited (ONGCL) has entered into a PSC with Government of India on 4.02.03 under NELP-III. OIL is the operator for the block. Actions for granting of PEL by the concerned State Government are in progress.

(b) AA-ONN-2001/3 in Onshore Assam

Your Company (15% PI) in consortium with ONGCL(85% PI - Operator) has been awarded this offshore block under NELP-III, the PSC for which has been signed on 4th February, 2003. Action for granting of PEL by the concerned State Government is in progress.

(c) CY-DWN-2001/1 in Deep Water Offshore Cauvery Basin, Gulf of Mannar

Your Company (20% PI) has entered into a PSC with Government of India on 4th February, 2003 in consortium with ONGCL (80% Pi-Operator). PEL against this prospect for a period of 8 years has been granted by the Central Government with effect from 12th March, 2003.

(B) Status/Achievements of PSC/JVCs executed or initiated for execution in the past are as under:

(a) CY-OSN-97/2 in Offshore Cauvery Basin, Tamil Nadu

Your Company with PI 100% had signed a PSC with Government of India on 12.04.2000. However, your Company has not been able to start the job due to non-receipt of security clearance.

(b) KG-DWN-98/4 in Deep Water Offshore Krishna-Godavari Basin

This block was earlier awarded to M/s ONGCL. PSC for the same was signed on 12th April, 2000. Subsequently, on the initiative of your Company, 15% participating interest has been assigned to it with effect from 31st May, 2002. The Minimum Work Programme of first phase of exploration has been completed and based on the work done so far three prospects and one lead have been identified. Accordingly, it has been decided to relinquish 2485 Sq. Km from the total contract area of 9940 Sq. Km. and to enter into 2nd phase of exploration.

(c) RJ-ONN-2000/1 in Onshore Rajasthan

Your Company with 100% and as Operator had signed a PSC with Government of India on 17th July, 2001. Since the area is near to International Border, seismic data acquisition work as planned was initially held up for security clearance from Ministry of Defence. However, the required clearance has been obtained recently and accordingly actions are in hand to acquire the seismic data.

(d) MN-ONN-2000/1 in Onshore Mahanadi Basin

Your Company (40% PI) and as Operator in consortium with ONGCL (20% PI), IOCL (20% PI), GAIL (20% PI) had signed a PSC with Government of India on 17th July, 2001. In line with the Minimum Work Programme Commitment, after completion of pre seismic EIA, contract has been awarded for API of 460 LKM 2D seismic data. Acquisition of data is in progress.

(e) MN-OSN-2000/2 in Offshore Mahanadi Basin

Your Company (20% PI) in consortium with ONGCL (40% Pi-Operator), GAIL (20% PI) and IOCL(20% PI) has signed a PSC with Government of India on 17th July, 2001. After initial acquisition and interpretation of seismic data, a joint review of work programme was done by all the parties on 12.03.03. Based on the review, 400 sq.km. of pre drill 3D seismic survey has been recommended as additional work in the second phase of exploration to decide on drilling of the identified prospects.

(f) MB-DWN-2000/2 in Deep Water Offshore Mumbai Basin

Your Company, with a PI 10%, in consortium with M/s ONGCL (PI -50% and Operator), IOCL(15% PI), GAIL (15% PI) and Gujarat State Petroleum Corporation Limited (10% PI) signed PSC for this block with Govt. of India on 17th July 2001. In line with the Minimum Work Programme Commitment, 2D as well as 3D seismic survey and Gravity-Magnetic survey of the block have been completed and interpretation of the survey data is nearing completion to decide future course of action.

(g) SR-OS/94/1 in Offshore Saurashtra

Your Company, with carried interest of 30% at the time of discovery, had signed PSC in consortium of Reliance Industries Ltd. (100% PI-Operator) on 12th April, 2000 with the Government of India. The first phase of exploration expired on 11th October, 2002 after extension by six months. Reprocessing of old seismic data, acquisition and processing of fresh seismic data and interpretation of the data in line with the Committed Work Programme have been completed and accordingly 25% of the contract area has

been relinquished to enter into the second phase of exploration which will be valid upto 11th October, 2004.

(h) GK-OSJ-3 in Offshore Saurashtra

Your Company (15% PI) in consortium with ONGCL (25% PI) and Reliance Industries Limited (60% Pi-Operator) had signed a PSC with the Government of India on 6th September, 2001. Reprocessing of 2065 LKM of old seismic data has been completed and detailed interpretation for further acquisition of seismic data and planning for drilling of a well are in progress.

(i) AAP-ON-94/1 in Onshore Assam

Your Company (10% PI) in consortium with Hindustan Oil Exploration Limited (HOEL) (80% Pl- Operator) and General Fibre Dealers Private Limited (GFDL) (10% PI) had signed a PSC on 30th June, 1998. The PEL was issued on 29th November, 2000 and accordingly PSC became effective from that date. Recently on 14th January, 2003 Government of India approved relinquishment of GFDLs participating interest and assignment of interest to Premier Oil North East B.V. (PONEI) and Indian Oil Corporation Limited (IOCL) together with transfer of Operatorship to PONEI from HOEC. The present sharing of participating interest is OIL 10%, HOEC 25%, PONEI 38% and IOCL 27% respectively. The first phase of exploration which was due to expire on 28th November, 2002 has been proposed for extension by one year. Reprocessing of old seismic data and review of geological structure and geochemical studies have been completed. At present new seismic data acquisition is in progress.

(j) RJ-ON-90/5 in Onshore Rajasthan

Your Company with a carried interest of 30% at the time of discovery in consortium with ESSAR Oil (75% Pi-Operator), Polish Oil and Gas Company Limited, Poland (25% PI) had signed a PSC with Government of India on 20th September, 1996. 2D seismic data acquisition, processing and interpretation and drilling of a well as committed in the first and second phase of exploration have been completed. As per requirement of the work programme of 3rd phase one well has to be drilled in the retained portion of 3967 sq. km before 29.09.03.

(k) Kharsang Oilfield in Arunachal Pradesh

Your Company (40% PI) had entered into a PSC with Government of India in consortium with Geopetrol International, France (25% PI), Jubiliant Enpro India (25% PI) and Geoenpro Petroleum Ltd. India (10% PI) on 16th June, 1995. The field produced 46744.836 MT of crude oil during the year of which your Companys share was 18697.934 MT.

(C) Overseas

(a) Exploration & Production

(i) Farsi Block in Offshore of Islamic Republic of Iran : Your Company (PI 20%) has entered into an Exploration Service Contract with National Iranian Oil Company on 25th December, 2002, in consortium with ONGC Videsh Limited (PI 40%) and IOCL (PI 40%). ONGC Videsh Limited is the Operator of the Block in which the work has started and is in progress.

(ii) Acquisition of Exploration Areas and Producing Properties

Your Company has signed a Memorandum of understanding with ONGC Videsh Limited on 12th July, 2002 for either participating in or jointly bidding towards acquisition of exploration areas and producing properties overseas. In this regard, discussion is already going on for some of the exploration areas as well as producing properties, the outcome of which would be known in subsequent years.

(iii) Acquisition of 100% Equity Shares of Sakhalin India Inc., Texas, USA

Your Company has acquired 100% Equity Shares of Sakhalin India Inc., a Company incorporated in the State of Texas, USA, from M/s. ONGC Videsh Limited on 10th March, 2003. With this acquisition M/s. Sakhalin India Inc. has become a wholly owned subsidiary of your Company. M/s. Sakhalin India Inc. is having a participating interest of 10% in the North Hellhole Bayou Prospect in the Vermilion Parish in offshore Louisiana, USA. The exploration work in the prospect is in progress. M/s. McAlester Fuel Company, USA is the Operator of the Block.

(D) Others

Consultancy Services in E&P

Your Company provided E&P Consultancy service for the first time since its inception. E&P Consultancy Service was extended to M/s. Morris Petroleum, a Company incorporated in Nigeria, towards evaluation as well as submission of bids for development of marginal fields offered by the Government of Nigeria through their National Oil Company M/s. Nigerian National Petroleum Company.

7.0 RESEARCH & DEVELOPMENT :

Your Company gives great importance in continuous upgradation of technologies and expertise in various areas of activities through its own Research & Development Centre. The details of activities carried out are given in form B of this Report.

8.0 ACTIVITIES AND ACHIEVEMENTS OF VIGILANCE DEPT. :

Vigilance activities in the organisation were broadly divided into two categories as under :

1. Preventive Measures

2. Punitive Measures

8.1 PREVENTIVE MEASURES :

During the year 53 nos of regular inspections and 36 nos of surprise inspection/checks and 2 nos. system studies were carried out and actions have been pursued for system studies in corruption prone areas and necessary corrective actions initiated. Vigilance Department organised the Vigilance Awareness Week in October/November, 2002 to make the employees of the Company aware about their role and responsibilities in preventing corruption. During the year 315 Nos. of property returns have been scrutinized and further investigations were taken up depending on the merits of the individual cases.

8.2 PUNITIVE MEASURES :

On the punitive side 20 nos. of fresh cases were registered during the year based on written complaints, inspections and audit reports. Some of the cases were disposed off as per their merits and rest are under investigation. During the year 13 nos. of cases were completed and reports submitted to the management for necessary actions.

9.0 ENVIRONMENTAL PROTECTION :

During the year under review, through effective monitoring and proper co-ordination, substantial abatement of pollution from various operations was achieved due to the stress laid in the following areas.

- Recycling of drilling effluent pit water was continued. In critical wells effluents were disposed off by pumping or by bowsers.

- Deployment of low pressure booster compressor/jet compressors (ejectors) in phases to reduce flaring of natural gas.

- The practice of disposal of produced formation water in shallow disposal wells continued.

- Adequate measures were taken to lift any spilled crude oil from nullahs and fields.

- Central effluent pits are arranged at strategic locations and also compartmentalization of effluent pits has been arranged to abate possible pollution hazards arising out of drilling operations.

- To prevent effluents from going out of production installations, action has been taken to install recirculating pumps in all future Oil Collecting Stations (OCSs), Early Production Set-ups (EPSs) and Quick Production Set-ups(QPSs).

- To prevent pollutants from going out of Central Tank Farm (CTF), formation water collection reservoir is being constructed at CTF, Duliajan.

10.0 SAFETY

Safety is always given the foremost consideration in the operations of your Company. Against MoU target of 2.00 for accident frequency rate, companys achievement was 1.82 which was in excellent category. Actions were initiated to carry out Risk Analysis Study in Shalmari OCS, Shalmari GCS, Jorhat CTF and Moran CTF.

A number of safety audits, both internal as well as external, were also carried out in various installations to improve upon the safety standards.

For the first time an "Off-site Disaster Management Plan Mock Drill" was conducted by your company on 16.12.2002 in which all the Mutual Aid Industries, District Authority, Army, N.G.O. and Civil Defence participated.

Monitoring of occupational health of the workpersons exposed to occupational health hazards has been carried out in a regular and systematic manner. Work environment monitoring from occupational health point of view was also done and corrective actions were taken to eliminate possible health hazards at various installations.

Annexure I and II attached to the Report, are deemed to form part of the Directors Report.

Annexure I deals with the requirement of the Companys (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 relating to Conservation of Energy, Technology Absorption, Expenditure on Research & Development, Technology Introduction and Absorption, Foreign Exchange Earnings and Outgo etc.

During the year 2002-03, there was no employee, who drew remuneration of Rs. 24 lakhs or more per annum or Rs. 2 lakhs per month. Hence, information as required under Sec. 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975 (as amended from time to time) is NIL.

22.0 AUDIT COMMITTEE :

As reported in the previous year, the Board of Directors of the Company has constituted an Audit Committee pursuant to Section 292A of the Companies Act, 1956 comprising of the following Directors

1. Shri Sunjoy Joshi (part-time Government Director), Chairman.

2. Shri N.K. Singh, (part-time Government Director), Member.

3. Shri M.R. Pasrija, Director (Finance), Member.

The Audit Committee met 4 times during the year 2002-03 and reviewed the financial report of the Company for the year 2002-03 in its meeting held on 21st June, 2003 before approval of the same by the Board of Directors.

23.0 STATUTORY AUDITORS :

M/s. Ray & Ray, Chartered Accountants, Kolkata and M/s. B.M. Chatrath & Co., Chartered Accountants, Kolkata were appointed as Joint Statutory Auditors for the financial year 2002-2003 by the Comptroller & Auditor General of India under the provisions of Section 619(2) of the Companies Act, 1956 and will hold office till the conclusion of the ensuing Annual General Meeting.

The Comptroller & Auditor General of India will be approached for the appointment of Statutory Auditors for the financial year 2003-2004.

24.0 DIRECTORS RESPONSIBILITY STATEMENT :

In accordance with the requirements under Section 217 (2AA) to the Companies Act, 1956 as inserted by the Companies (Amendment) Act, 2000, your Directors confirm that:

i) In the preparation of Annual Accounts, the applicable accounting standards have been followed;

ii) Directors have selected such Accounting Policies and applied them consistently and made judgement and estimates that are 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 financial year ended 31st March, 2003 and of the Profit of the Company for that year;

iii) Directors had taken proper and sufficient 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;

iv) Directors have prepared the Annual Accounts on a going concern basis.

25.0 STATUTORY AUDITORS REPORT

Referring to the Statutery Auditors Report in thick type at paragraph 2 and 3 of their Report and para 1, 9 and 10 of the Annexure to the Auditors Report, the Directors wish to state that the same were mere observations and not qualifications or adverse remarks and accordingly need no explanations.

26.0 FUTURE OUTLOOK

In the backdrop of very significant achievement made during 2002-2003 in terms of profitability and in recording highest ever achievement in various physical performance parameters and the actions planned for taking up in near future, your Company is all set to meet the challenges of the future in order to attain a competitive edge under the new liberalized policies of the Government. In order to achieve sustained growth in long-term value addition, while maintaining satisfactory profitability, your Companys strategy is continued growth of reserves. Towards this your Company has taken all the necessary steps to further accelerate and intensify its E&P activities.

On dismantling of Administered Price Mechanism (APM), your company is exposed to volatility in the prices of crude oil in the international market. Though the Company realized good prices during the year under review, the status may not remain the same keeping in view the current trend in the prices.

In order to remain competitive, maintain growth and remain an economically viable world class entity, your Company had engaged internationally renowned consultant M/s. Price Waterhouse Coopers, now a part of M/s. IBM-BCS for preparation of strategic and corporate plans for the Company who have submitted their report and the same was approved in principle by the Board. M/s. IBM-BCS have also been engaged for the implementation of the same in consultation with the Company.

OIL has taken various initiatives towards the strategic focus areas identified. Various measures like enhancement of water injection, projectisation of Jorajan, revitalization of old depleting fields, intensification of 3D survey etc. are taken towards improvement and sustenance of production.

With most of the areas in the North-East having been already explored, OIL is now venturing into logistically difficult and geologically more complex frontier areas such as rain-soaked jungles in the Belt of Schuppen, exploration of suitable stratigraphic traps, Manabhum etc. In addition, your Company is also participating in blocks including deep water areas offered under the New Exploration Licensing Policy (NELP).

Your Company has executed Memorandum of Understanding (MOU) with ONGC Videsh Ltd. (OVL) for participating in prospective exploration blocks and producing properties in the overseas areas. In this context, exploration service contract for an exploration block (FARSI Offshore Block) in the Persian Gulf of Islamic Republic of Iran was awarded to the consortium comprising of ONGC Videsh Ltd., Indian Oil Corporation and Oil India Limited with OILS participating interest of 20% during the year. The Company is in

the process of acquiring stake in the prospective exploration block in Syria from ONGC Videsh Limited. The Company is also exploring the possibility of acquiring other prospective exploration block and producing properties in the overseas areas.

Your Company is also expanding the value chain by expanding its activities by joining hands with other consortium partners in the forthcoming pipeline projects in the country and providing E&P services both in India and overseas market.

In the downstream sector, your Company has already made a modest entry by taking 10% stake in Numaligarh Refinery Ltd. (NRL) and is also contemplating to enhance its stake further in the sector.

Your Company recognises the need of constant upgradation of technology and absorption of state-of-the art technology and hence, increased emphasis is being given on technology upgradation in all facets of its operations to keep pace with the technological developments in the rest of the World.

The Coal-Oil Co-processing pilot plant, which has already been commissioned, is at present being utilised in carrying out extensive research to study the economics of building a commercial plant to convert Assam Coal to value added liquid fuels. The ongoing study is expected to open up new vista for the Nation for developing Indias advanced technology for alternative source of energy in near future:

In recognition and appreciation of the Governments initiative of restructuring and reforming of hydrocarbon Sector as mentioned above, your Company has initiated necessary steps for growth of the organization and with this dynamism, the Company is poised to face all the challenges of the future.

27.0 ACTIONS FOR DEREGULATORY MARKET SCENARIO:

Your Company has already initiated actions to prepare itself to face the challenges of deregulated market scenario and has initiated the following steps :

(A) Increase production of crude oil and natural gas by intensifying drilling in its operational areas in Assam to meet the crude oil demand of the refineries in N.E. Region.

1.0 Reengineering operations for improving cost-effectiveness through more effective manpower deployment, adopting state-of-the-art technology, revamping ageing equipment etc.

2.0 Downsize through redeployment of manpower, multiskilling & Voluntary Retirement Schemes (VRS).

3.0 Minimise build-up of further in-house resources and meet additional requirement through outsourcing.

4.0 Reform systems & procedures to debottleneck procedural delays.

5.0 Restructure the Company organizationally and financially.

(B) Diversify into low risk investment:

Your Company is also contemplating to -

1.0 Spread business risk by expanding value chain by :

- equity participation in Numaligarh Refinery Ltd. (NRL) (10% already acquired)

- building, operating & maintaining product pipeline.

- Possibilities of direct marketing of LPG.

2.0 Compete for providing Oil Field and Pipeline Services including consultancy to others.

(C) Quality Assurance :

1.0 Create additional infrastructure for improving product quality to compete with international standards. Your Company has already initiated actions to maintain BS & W in the crude oil produced at the internationally acceptable level.

2.0 Create awareness for quality assurance of all products and services within the organization.

28.0 CONCLUSION

With the planned expansion in activities and constant thrust towards improving performance, your Company is looking forward to another year of fruitful operations combined with an overall improvement in efficiency during the year 2003-2004.

29.0 ACKNOWLEDGEMENT

The Board of Directors highly appreciate the competence, commitment and dedicated efforts of the employees at all levels who have ensured your Company to achieve substantive improvement in performance and results. Your directors are confident that all the members of OIL family would continue their commitment to the pursuit of excellence and consistent growth.

Your Directors also acknowledge with sincere appreciation for the unstinted assistance and guidance received from the Ministry of Petroleum & Natural Gas, other Central Government agencies, various State Governments, and look forward to their continued support.

For and on behalf of the BOARD OF DIRECTORS

Sd/- ( R.K. DUTTA ) Chairman & Managing Director

New Delhi. Dated 16th July, 2003.

 
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