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Directors Report of Selan Exploration Technology Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Annual Report for the year ended 31st March, 2015.

Financial Review The Company achieved the following results over the past three years :

(Rs) 2012-13 2013-14 2014-15

Net Sales 970,589,105 1,012,697,496 792,893,686

EBIDTA 889,068,783 945,836,453 687,216,394

EBIDTA / 92% 93% 87% Net Sales

Total Reserves and Surplus of the Company have increased from Rs. 2,454,044,676 to Rs. 2,639,208,773 as on 31st March, 2015.

Review of Operations The operations of the Company continued in a smooth and uninterrupted manner during the course of the year. The drilling campaign of the Company was in progress during the year, with new wells drilled in the Bakrol and Indrora fields. Efforts were also ongoing to increase higher production volumes from wells recently drilled, as new data analysis opens greater opportunities.

In terms of assessment of the complex geology formations at different depths in our oil and gas fields, the Company continued to push the limits of technical options and challenges with various service providers. Simultaneously, the Company was fully engaged on all aspects of well design and completion strategies with consulting firms in North America.

As is the case with all the Oil Companies worldwide, the dramatic decline in oil prices has affected the revenues of the Company. With this significant drop in oil prices internationally during the year, the Company continues to monitor its expense commitments more closely than ever before, to ensure that profitability levels remain the highest possible under these challenging circumstances.

Please also refer to the Management Discussion and Analysis Report section of the Annual Report for more comprehensive discussion of the Company's operations.

Final Dividend

The Directors are pleased to inform that in the financial year 2014-15, the Board of Directors have declared an interim dividend of 50%, i.e. Rs. 5/- per share, which shall be declared as final dividend for the year 2014-15 subject to approval by the shareholders of the Company in the forthcoming AGM.

Board of Directors

Mrs. Rohini Kapur was inducted as an Additional Director with effect from 31st March 2015 to hold office upto the ensuing Annual General Meeting of the Company. The brief details relating to Mrs. Rohini Kapur are furnished in the explanatory statement to the notice of the ensuing AGM.

Number of Meetings of the Board

There were nine Board Meetings held during the Financial Year 2014-15. Details of the same forms part of the Corporate Governance Report.

Declaration of Independence by Directors

Declaration given by Independent Directors meeting the criteria of Independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 is received and taken on record.

Directors Responsibility Statement

In accordance with the provisions of Section 134(5) of the Companies Act, 2013, the Board of Directors do hereby confirm that in the preparation of the Annual Accounts, the applicable Accounting Standards have been duly complied with, and the Directors have selected the necessary accounting policies and applied them consistently. Judgements / estimates have been made that are evenhanded and prudent, so as to give an accurate and rational view of the affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period. The Directors have also taken ample care for the maintenance of adequate accounting records in conformity with the provisions of Companies Act, 2013, for upkeep of the assets of the Company and for preventing and detecting fraud and other irregularities, and that the Directors have prepared the annual accounts on a going concern basis. The Directors have laid down internal financial controls to be followed by the Company and such Internal financial controls are adequate and operating effectively. And lastly, the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

Policy on Directors' Appointment and Remuneration

Considering the requirement of skill set on the Board, eminent people having an independent standing in their respective field/profession and who can effectively contribute to Company's business and Policy decisions are considered by Nomination and Remuneration Committee for appointment as an Independent Director on the Board. The Committee considers ethical standards of integrity, qualification, expertise and experience of the person for appointment as Director and is not disqualified under Companies Act, 2013 and rules made thereunder and accordingly recommend to the Board his/her appointment.

Remuneration to Whole-Time Director is governed under the relevant provisions of Companies Act, 2013 and rules made thereunder. Independent/ Non-Executive Directors are paid sitting fees for attending the meetings of the Board/Committees thereof. The Company's policy on Directors remuneration is given in Corporate Governance Report which forms part of this Annual Report.The Board considers the Nomination and Remuneration Committee's recommendation and takes appropriate decision.

Contracts/Arrangements with Related Parties

All the related party transactions are done on Arm's length basis. The Company presents a Statement of all related party transactions before the Audit Committee on a quarterly basis specifying the nature, value and terms and conditions of transaction. Transactions with related parties are conducted in a transparent manner with the interest of the Company as utmost priority. Details of such transactions are given in the accompanying Financial Statements. The Company's policy on Related Party Transactions is available at our website www.selanoil.com.

Risk Management

The Company has robust systems for Risk Assessment and mitigation which is reviewed periodically. The Company's risk identification and assessment process is dynamic and hence it has been able to identify, monitor and mitigate the most relevant strategic and operational risks, both during periods of accelerated growth and recessionary pressures.

Corporate Social Responsibility

Selan is committed to operate and grow in a socially responsible way. With Safety, health and environment protection high on its Corporate agenda, Selan is committed to conduct business with a strong environment conscience, so as to ensure sustainable development, safe work places and enrichment of life of employees, clients and the community. Brief details about the CSR Policy developed and implemented by the Company on CSR initiatives taken during the year is given in Annexure-C to this Report.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an Annual Performance Evaluation of its own performance, Directors individually and that of its Committees. During the year a Separate Meeting of Independent Directors was held to assess the performance of Non Independent Director and the Chairperson of the Company as well as the Board as a whole. Performance Evaluation is based on their contribution to company's objectives and plans, efficient discharge of their responsibilities, participation in Board/ Committee meetings and other relevant parameters.

Amortisation of DHP Expenses

Effective from the current year 2014-15, the amortization of expenses has been extended by 5 years beyond the existing lease period, keeping in view that the investments made in recent years for drilling of new wells are expected to continue to result in oil and gas production significantly beyond the original contract period. The Government also has the power to extend the PSCs for upto 5 years, and management is of the view that there is a reasonable likelihood of this taking place. Despite this change in the amortization period, the provision for amortization is higher than other alternate methods of calculation generally in use by the Oil and Gas Industry, thereby maintaining an overall conservative bias in the preparation of Company's Balance Sheet and Profit & Loss Statements for the year. The Auditors have taken note of the above changes in their Audit Report and their opinion is not modified in respect of this matter.

Auditors and their Report

The Auditors, M/s V Sankar Aiyar & Co., Chartered Accountants, have been appointed as Statutory Auditors of the Company at the last Annual General Meeting held on 07.08.2014 for a period of three years , subject to ratification at every Annual General Meeting. Therefore, ratification of appointment of Statutory Auditors is being sought from the members at the ensuing AGM.

The Company has received confirmation from M/s V Sankar Aiyar & Co. to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment.

Cost Accounting Records

The Company has maintained Cost Records as required by Cost Accounting Record Rules (Petroleum Industry) 2002. In terms of the Ministry of Corporate Affairs order dated 2nd May, 2011, Cost Records in respect of each year commencing from 1st April, 2011 has to be Audited by Cost Auditor, holding a valid certificate of practice under the provisions of Cost and Works Accountants Act, 1959. In compliance with the aforesaid requirement the Cost Accounting Records of the company for the financial year 2014-15 are being audited by Mr. S. N. Balasubramanian, Qualified Cost Accountant. The Cost Audit for the year ended 31st March, 2014 was carried out by the same Auditor and the report was filed on 6th October, 2014.

Secretarial Audit Report

Secretarial Audit Report confirming compliance to the applicable provisions of Companies Act, 2013, Listing Agreement, SEBI guidelines and all other related rules and regulations obtained from our Secretarial Auditors, M/s Nityanand Singh & Co., Company Secretaries forms part of this Annual Report as Annexure-A.

Internal Auditor

In compliance with the provisions of Section 138 of the Companies Act, 2013 M/s S.N. Nanda & Co. were appointed as Internal Auditors for the Financial Year 2014-15 to conduct the internal audit of the functions and activities of the Company. They have submitted their Report to the Chairman of the Audit Committee and this was further reviewed by the Management and taken on record.

Corporate Governance Report

Pursuant to Clause 49 of the Listing Agreement, Management Discussion and Analysis and a Report on Corporate Governance alongwith Certificate from Auditors regarding compliance of conditions of Corporate Governance is annexed to Directors' Report. A declaration by the CEO (Manager) regarding the compliance with the Code of Conduct also forms part of this Annual Report.

Extract of the Annual Return

Relevant Extract of the Annual Return is given in Annexure-B to this Report. Loans, Guarantees or Investments

The Company has not given any loan or guarantee nor has made any investment during the year under report attracting the provisions of Section 186 of the Companies Act, 2013.

Deposits

The Company has not accepted any deposits during the year under report nor did any deposits remain unpaid or unclaimed at the end of the year.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The activities undertaken by your Company do not fall under the scope of disclosure of particulars under Section 134(3)(m) of the Companies Act, 2013, to the extent where it relates to the conservation of energy and technology absorption. Particulars with regard to foreign exchange outgo appear as point no. 43 of the Notes forming Part of the Accounts.

Material Changes and Commitments

There have not been any material changes and commitments affecting the financial position of the Company between the end of the Financial Year of the Company as on 31st March 2015 and the date of this report.

Personnel

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and remuneration of Managerial Personnel) Rules 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Annual Report excluding the aforesaid annexure is being sent to the shareholders of the Company and others entitled thereto. Any member interested in obtaining a copy of the said annexure may write to the Company Secretary at the registered office of the Company.

Acknowledgements

Your Directors place on record their gratitude and express their earnest appreciation for the valuable efforts of every employee of the organization without which the Company would not have been able to undertake the challenging targets in all areas of operations. We are fortunate to have such a team whose endeavors have laid a strong foundation for the success of the organization as a whole. Your Directors acknowledge the exemplary contribution made by the employees of the Company.

On behalf of the Company, we wish to convey our appreciation to the Ministry of Petroleum and Natural Gas (MoPNG), Directorate General of Hydrocarbons (DGH), Ministry of Environment and Forests (MoEF), Government of India and the Bankers of the Company for their continuous support, cooperation and guidance. The Directors value the trust shown by the shareholders in their ability to manage the Company. We expect that with the ongoing encouragement and support of our shareholders, we shall be successful in achieving the desired objectives in the near future.

For and on Behalf of the Board Place : New Delhi R. KAPUR Date : 30th May, 2015 Chairman




Mar 31, 2013

The Directors have pleasure in presenting the Annual Report for the year ended 31 March, 2013.

Financial Review

The Company achieved the following results over the past two years :

(Rs.)

2010-11 2011-12 2012-13

Net Sales 709,490,752 927,295,571 970,589,105

EBIDTA 627,824,389 838,514,401 885,997,969

EBIDTA / Net Sales 88% 90% 91%

Total Reserves and Surplus of the Company have increased from R1,905,738,773/- to R 2,209,466,928/- as on 31 March, 2013.

Review of Operations

Operations during the year continued smoothly from our fields in Gujarat and production levels were in line with previous year, despite not having been able to drill any new wells during the year.

The Company continued to engage with Directorate of General Hydrocarbons (DGH) and Ministry of Petroleum and Natural Gas (MoPNG) for grant of approvals for drilling of new wells in all our fields. We expect that in 2013-14 drilling activity should take place at an accelerated pace as these approvals are received.

The Company has also been working closely with service providers to ensure that drilling operations can commence at the earliest. Some bottlenecks do exist, especially with respect to availability of drilling rigs of acceptable quality and adequate capacity.

The geology of Gujarat, include our Company’s fields, consist of depletion drive reservoirs. In such cases, additional wells need to be drilled so as to offset declining rates of production from existing wells. The approval of new drilling programmes are, therefore, critical for the growth in production volumes.

Our Company, along with many other companies in the oil and gas industry face challenges in obtaining necessary approvals for drilling operations. In light of various developments in the industry in recent years, and the active involvement of the Comptroller and Auditor General of India new standards and thresholds for approvals have been created which must be complied with.

During the year the Company also received much awaited approvals of Environmental Clearance from the Ministry of Environment and Forest for drilling in some of its fields. We are hopeful, therefore, that production levels can begin to increase in the near future.

For further details regarding the Company’s operations, please refer to the management analysis and discussion section of the Annual Report.

Buyback of Equity Shares

The Board of Directors at its meeting held on 15.09.2012 unanimously approved the Buyback of upto 578,081 fully-paid equity shares of R10/- each (hereinafter referred to as "Buyback”) at a price not exceeding R350 /- per equity share, payable in cash, upto an aggregate amount not exceeding R2,023.28 Lakhs, representing approximately 10% of the Company’s total paid-up Equity Capital and Free Reserves as on 31 March, 2012.

The Buyback offer is open upto 13 September, 2013 or such earlier date as may be determined by the Company after necessary compliance. Pursuant to the aforesaid Buyback offer, the Company has bought back and extinguished 161,518 equity shares of R10/- each as on 31 March, 2013. Consequent, to the Buyback the paid-up equity share capital of the Company as on 31 March, 2013 has been reduced to 16,825,525 equity shares of R10/- each. The Buyback Committee constituted by the Board overseas all matters pertaining to the Buyback of equity shares of the Company.

Final Dividend

The Directors are pleased to inform that in the F.Y. 2012-13, the Board of Directors have declared an interim dividend of 50%, i.e. R 5/- per share, which shall be declared as final dividend for the year 2012-13 subject to approval by the shareholders of the Company in the forthcoming AGM.

Board of Directors

Dr. D. J. Corbishley was inducted as an additional director with effect from 16 February, 2013 to hold office upto the ensuing annual general meeting of the Company. The brief details relating to Dr. D. J. Corbishley are furnished in the explanatory statement to the notice of the ensuing Annual General Meeting.

Mr. S. K. Singh retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Directors Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Companies

Act, 1956, the Board of Directors do hereby confirm that in the preparation of the Annual Accounts, the applicable Accounting Standards have been duly complied with, and the Directors have selected the necessary accounting policies and applied them consistently. Judgments / estimates have been made that are evenhanded and prudent, so as to give an accurate and rational view of the affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period. The Directors have also taken ample care for the maintenance of adequate accounting records in conformity with the provisions of Companies Act, 1956, for upkeep of the assets of the Company and for preventing and detecting fraud and other irregularities, and lastly that the Directors have prepared the annual accounts on a going concern basis.

Auditors and their Report

The Auditors, M/s V. Sankar Aiyar & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Auditors’ Report forms a part of this Annual Report.

Cost Accounting Records

The Company has maintained Cost Records as required by Cost Accounting Record Rules (Petroleum Industry) 2002. In terms of the Ministry of Corporate Affairs order dated 02 May, 2011 Cost Records in respect of each year commencing from 01 April, 2011 has to be Audited by Cost Auditor, holding a valid certificate of practice under the provisions of Cost and Works Accountants Act 1959, In compliance with the aforesaid requirement the Cost Accounting Records of the company for the financial year 2012-13 are being audited by Mr. S. N. Balasubramanian, Qualified Cost Accountant. The Cost Audit for the year ended 31.03.12 was carried out by the same Auditor and the report was filed on 30 January, 2013 in XBRL mode.

However, the due date for filing of the Cost Audit Report in XBRL mode for the year ended 31 March, 2012 was 28 February, 2013.

The due date for filing the Cost Audit Report for the financial year ended 31 March, 2013 is 30 September, 2013.

Corporate Governance Report

Pursuant to Clause 49 of the Listing Agreement, Management Discussion and Analysis and a Report on Corporate Governance alongwith certificate from Auditors regarding compliance of conditions of Corporate Governance is annexed to Directors’ Report. A declaration by the CEO (Manager) regarding the compliance with the Code of Conduct also forms part of this Annual Report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The activities undertaken by your Company do not fall under the scope of disclosure of particulars under Section 217(1)(e) of the Companies Act, 1956, to the extent where it relates to the conservation of energy and technology absorption. Particulars with regard to foreign exchange outgo appear as point no. 39 of the Notes forming Part of the Accounts.

Personnel

The names and particulars of the employees required to be disclosed, in terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of the annexure to the Director’s Report. However, in terms of Section 219(1)(b)(iv) of the Companies Act, 1956 the Annual Report excluding the aforesaid annexure is being sent to the shareholders of the Company and others entitled thereto. Any member interested in obtaining a copy of the said annexure may write to the Company Secretary at the registered office of the Company.

Acknowledgements

Your Directors place on record their gratitude and express their earnest appreciation for the valuable efforts of every employee of the organization without which the Company would not have been able to undertake the challenging targets in all areas of operations. We are fortunate to have such a team whose endeavors have laid a strong foundation for the success of the organization as a whole. Your Directors acknowledge the exemplary contribution made by the employees of the Company.

On behalf of the Company, we wish to convey our appreciation to the Ministry of Petroleum and Natural Gas (MoPNG), Directorate General of Hydrocarbons (DGH), Ministry of Environment and Forests (MoEF), Government of India and the Bankers of the Company for their continuous support, cooperation, and guidance. The Directors value the trust shown by the shareholders in their ability to manage the Company. We expect that with the ongoing encouragement and support of our shareholders, we shall be successful in achieving the desired objectives in the near future.

For and on Behalf of the Board

Date : 11 May, 2013 R. KAPUR

Place : New Delhi Chairman


Mar 31, 2012

The Directors have pleasure in presenting the Annual Report for the year ended 31 March 2012.

Financial Review

The Company achieved the following results over the past two years :

(Rs.)

2009-10 2010-11 2011-12

Net Sales 708,046,954 709,490,752 927,295,571

EBIDTA 589,877,960 627,824,389 838,514,401

EBIDTA / Net Sales 83% 88% 90%

Total Reserves and Surplus of the Company have increased from R1,526,173,790/- to R1,905,738,773/- as on 31 March 2012.

Review of Operations

A significant development during the year has been the successful completion of Public Hearings in several of our oilfields for obtaining the necessary environmental permissions for the well drilling campaigns.

The Company continues to work closely with the Ministry of Petroleum and Natural Gas and the Directorate General of Hydrocarbons in an effort to obtain approvals for extensive drilling campaigns in our oil and gas fields.

It now seems likely that any agreement in this regard would require the Company to drill wells in a phased manner, thus extending the period over which development activities in the fields are completed.

The Company's reservoirs are known, in technical terms, as depletion drive reservoirs, resulting in declining rates of production over time. It is, therefore, necessary that additional wells continue to be drilled so as to achieve higher rates of recoverable reserves as well as production.

Seismic and reservoir work continues at an accelerated pace, and significant additional information is being regularly generated to meet the requirements of various agencies. These studies continue to also provide greater insight into the company's reservoirs so as to enable us to employ the best methods to increase production levels.

The fundamental nature of the approval process has changed considerably over the last two years, thus resulting in significantly lower levels of drilling activity than was earlier anticipated. It is hoped that this process could gain some impetus during the current fiscal year, as the government looks to accelerate investment in all sectors, including oil and gas.

For further details regarding the Company's operations, please refer to the management analysis and discussion section of the Annual Report.

Final Dividend

The Directors are pleased to inform that in F.Y. 2011-12, the Board of Directors have declared an interim dividend of 30%, i.e. R3/- per share, which shall be declared as final dividend for the year 2011-12 subject to approval by the shareholders of the Company in the forthcoming AGM.

Board of Directors

Mr. V. B. Mahajan retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Directors Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors do hereby confirm that in the preparation of the Annual Accounts, the applicable Accounting Standards have been duly complied with, and the Directors have selected the necessary accounting policies and applied them consistently.

Judgments / estimates have been made that are evenhanded and prudent, so as to give an accurate and rational view of the affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period. The Directors have also taken ample care for the maintenance of adequate accounting records in conformity with the provisions of the Companies Act, 1956, for upkeep of the assets of the Company and for preventing and detecting fraud and other irregularities, and lastly that the Directors have prepared the annual accounts on a going concern basis.

Auditors and their Report

The Auditors, M/s V Sankar Aiyar & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Auditors' Report forms a part of this Annual Report.

Corporate Governance Report

Pursuant to Clause 49 of the Listing Agreement, Management Discussion and Analysis and a Report on Corporate Governance alongwith certificate from Auditors regarding compliance of conditions of Corporate Governance is annexed to Directors' Report. A declaration by the CEO (Manager) regarding the compliance with the Code of Conduct also forms part of this Annual Report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The activities undertaken by your Company do not fall under the scope of disclosure of particulars under Section 217(1)(e) of the Companies Act, 1956, to the extent where it relates to the conservation of energy and technology absorption. Particulars with regard to foreign exchange outgo appear as point no. 40 of the Notes forming Part of the Accounts.

Personnel

The names and particulars of the employees required to be disclosed, in terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of the annexure to the Directors' Report. However, in terms of Section 219(1 )(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid annexure is being sent to the shareholders of the Company and others entitled thereto. Any member interested in obtaining a copy of the said annexure may write to the Company Secretary at the registered office of the Company.

Acknowledgements

The contribution of a sincere and motivated team of personnel is extremely important for the growth and advancement of a Company. We are fortunate to have such a team whose endeavors have laid a strong foundation for the success of the organization as a whole. Your Directors acknowledge the exemplary contribution made by the employees of the Company.

On behalf of the Company, we wish to convey our appreciation to the Ministry of Petroleum and Natural Gas (MoPNG), Directorate General of Hydrocarbons (DGH), Ministry of Environment and Forests (MoEF), Government of India and the Bankers of the Company for their continuous support, cooperation and guidance. The Directors value the trust shown by the shareholders in their ability to manage the Company. We expect that with the ongoing encouragement and support of our shareholders, we shall be successful in achieving the desired objectives in the near future.

For and on Behalf of the Board

05 May 2012 R. KAPUR

New Delhi Chairman


Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting the Annual Report for the year ended 31 March 2011.

FINANCIAL REVIEW

The Company achieved the following results over the past two years :

(Rs.) 2009-10 2010-11

Net Sales 708,046,954 709,490,752

EBIDTA 589,877,960 627,824,389

EBIDTA / Net Sales 83% 88%

Total Reserves and Surplus of the Company have increased from Rs. 1281.07 million to Rs. 1,526.17 million as on 31 March 2011.

REVIEW OF OPERATIONS

During the year, the Company continued with its efforts to complete the seismic programmes being undertaken in all our fields.

The Company expects that reservoir simulation and modeling work should be largely completed during this fiscal year.

In addition, drilling activities for the development of our oilfields has begun with development wells being drilled successfully in the Lohar oilfield. This will be followed with similar activities in our other oil and gas fields.

The Company also continues to be actively engaged in obtaining necessary approvals from various Central and State agencies for the extensive drilling activities being planned.

For a detailed review of the Company's operations and plans, please refer to the Management Discussion and Analysis section on page 4 of this Annual Report.

LOHAR ARBITRATION / PAYMENT OF PROFIT PETROLEUM

The matter of payment of Profit Petroleum for Lohar oilfield is still the subject of judicial review. Please refer to Note 2 of the Notes on Accounts section of this Annual Report for more details.

FINAL DIVIDEND

The Directors are pleased to inform that in the F.Y. 2010-11, the Board of Directors have declared two interim dividends of 15% each, which shall be declared as final dividend for the year 2010-11 subject to approval by the shareholders of the Company in the forthcoming AGM.

BOARD OF DIRECTORS

Mr. T. Currimbhoy retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors do hereby confirm that in the preparation of the Annual Accounts, the applicable Accounting Standards have been duly followed, and for the purpose the Directors have selected the necessary accounting policies and applied them consistently and made judgments / 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 or loss of the Company for that period, also that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in conformity with the provisions of Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, and lastly that the Directors have prepared the annual accounts on a going concern basis.

AUDITORS' AND THEIR REPORT

The Auditors, M/s V. Sankar Aiyar & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Auditors' Report forms a part of this Annual Report.

CORPORATE GOVERNANCE REPORT

Pursuant to Clause 49 of the Listing Agreement, Management Discussion and Analysis and a Report on Corporate Governance alongwith certificate from Auditors regarding compliance of conditions of Corporate Governance is annexed to Directors' Report. A declaration by the CEO (Manager) regarding the compliance with the Code of Conduct also forms part of this Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The activities undertaken by your Company do not fall under the scope of disclosure of particulars under Section 217(1)(e) of the Companies Act, 1956, to the extent where it relates to the conservation of energy and technology absorption. Particulars with regard to foreign exchange outgo appear as point no. 15 of the Notes forming Part of the Accounts.

PERSONNEL

The names and particulars of the employees required to be disclosed, in terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of the annexure to the Directors' Report. However, in terms of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid annexure is being sent to the shareholders of the Company and others entitled thereto. Any member interested in obtaining a copy of the said annexure may write to the Company Secretary at the registered office of the Company.

ACKNOWLEDGEMENTS

The accretion of a sincere and motivated team of personnel is exceedingly valuable in the progress of a Company. Your Company is fortunate to have a team whose endeavors have laid a strong foundation for the success of the organization as a whole. Your Directors acknowledge the exemplary contribution made by the employees of the Company.

On behalf of the Company, we wish to convey our thanks to Ministry of Petroleum and Natural Gas (MoPNG), Directorate General of Hydrocarbons (DGH), Ministry of Environment and Forests (MoEF), Government of India and the Bankers of the Company for their continuous support, cooperation and guidance. The Directors value the trust shown by the shareholders in their ability to manage the Company. We expect that with the ongoing encouragement and support of our shareholders, we shall be successful in achieving the desired objectives in the near future.

For and on Behalf of the Board

20 July 2011 R. KAPUR

New Delhi Chairman


Mar 31, 2010

The Directors have pleasure in presenting the Annual Report for the year ended 31 March 2010.

FINANCIAL REVIEW

The Company achieved the following results over the past three years :

(Rs. Millions) 2007-08 2008-09 2009-10

Net Sales 361 1059 733

EBIDTA 266 839 590

EBIDTA / Sales 77% 84% 83%



Total Reserves and Surplus of the Company have increased from Rs. 833.80 million to Rs. 1280.92 million as on 31 March 2010.

OPERATIONS REVIEW

During this Financial Year, the Company has not undertaken any new drilling activities. However, 3D seismic data acquisition, processing and interpretation (API) activity in Bakrol and Indrora oilfields is underway. This shall give us a fair idea of the locations in which drilling campaign can be started in the second half of the current fiscal year.

The aggregate production from our fields has been 238,140 barrels in 2009-10 as compared to 282,745 barrels in 2008-09.

We are also pleased to inform you that the Company has commenced commercial sale of Associated Natural Gas, though on a small scale, w.e.f. F.Y. 2009-10.

FIELD DEVELOPMENT REVIEW

The developmental activities, alongwith, maybe lower crude oil prices and the natural depletion in production from existing wells will temporarily result in somewhat lower levels of production and profits during 2010-11. However, our cash reserves and cash generation have made it possible for us to plan / undertake and generally complete these Seismic and testing activities in a short period of time.

As a result, we now believe that the Company will shortly be able to establish significant / additional levels of proven and recoverable reserves in our oilfields and hopefully this, in turn, will lead to your Company emerging with significant oil and gas volume growth within the next one to two years.

LOHAR ARBITRATION / PAYMENT OF PROFIT PETROLEUM

The Arbitration Tribunal constituted for determining the payment of Profit Petroleum to the Government of India, has given its Award on 3 May 2010. Please refer to Note 2 of the Notes on Accounts section of this Annual Report for more details. The amount paid to Government of India for the period April 2007 upto December 2009, approximately USD 1,674,002, is a contingent asset, pending refund by the Government of India.

FINAL DIVIDEND

The Directors are pleased to inform that in F.Y. 2009-10, the Company had paid an interim dividend of 15%, which shall be declared as final dividend for the year 2009-10, subject to approval by the shareholders of the Company in the forthcoming AGM.

BOARD OF DIRECTORS

Mr. S. K. Singh retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. A. Mahajan, a member of the Board of Directors, resigned as a Director of the Company, with effect from 6 May 2010. The Directors wish to acknowledge the contribution made by him to the Company over the years.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors do hereby confirm that in the preparation of the Annual Accounts, the applicable Accounting Standards have been duly followed, that 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 at the end of the financial year and of the profit or loss of the Company for that period, that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, and that the Directors have prepared the annual accounts on a going concern basis.

AUDITORS AND THEIR REPORT

The Auditors, M/s V. Sankar Aiyar & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, Management Discussion and Analysis and a Report on Corporate Governance alongwith certificate from Auditors regarding compliance of conditions of Corporate Governance is annexed to Directors Report. A declaration by the CEO (Manager) regarding the compliance with the Code of Conduct also forms part of this Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The activities undertaken by your Company do not fall under the purview of disclosure of particulars under Section 217(1)(e) of the Companies Act, 1956, in so far as it relates to the conservation of energy and technology absorption. Particulars with regard to foreign exchange outgo appear as point no. 15 of the Notes forming Part of the Accounts.

PERSONNEL

The Company has only two employees whose name and particulars are required to be disclosed as per the provisions of Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended.

Nature

Remuneration

Name Age Designation of

Received

Employment

Whole - Time

Mr. Rohit Kapur 55 Rs. 23 million Contractual

Director

President & Rs. 2.10

Dr. M. N. Prasad 60 Contractual

CEO million





Name Employment

Qualification Experience Last Position

Commenceme

(in years) Held

nt Date

Mr.Rohit Kapur MD, Selan 1 October MBA 31 Exploration

2008

Technology Ltd.

Dr.M.N.Prasad Ph.D.

(Petroleum

CEO, Prize Geology), 37 1 April 2008

Petroleum M.Sc., B.Sc.

Notes : 1. Gross remuneration as above includes salary, taxable allowances, Companys contribution to Provident Fund, Gratuity paid (but excludes Companys contribution to Gratuity Fund), and taxable value of perquisites. 2. Mr. Rohit Kapur was in employment for the full financial year 2009-10. Dr. Prasad was in employment till September 2009. 3. Mr. Rohit Kapur is a Promoter of the Company. 4. Mr. Rohit Kapur holds 1,697,133 shares in the Company. Dr. M. N. Prasad does not hold any shares in the Company.

ACKNOWLEDGEMENTS

The contribution of a dedicated and motivated team of personnel is extremely valuable in the growth of a Company. Your Company is fortunate to have a team whose endeavors have laid a strong foundation for the growth of the organization as a whole. Your Directors acknowledge the exemplary service provided by the employees of the Company.

On behalf of the Company, we wish to convey our thanks to Ministry of Petroleum and Natural Gas (MoPNG), Directorate General of Hydrocarbons (DGH), Ministry of Environment and Forests (MoEF), Government of India and the Bankers of the Company for their continuous cooperation, support and guidance. The Directors value the faith reposed by the shareholders in their ability to manage the Company. We expect that with the continuous support and encouragement of our shareholders, we shall be successful in achieving key milestones in the near future.

For and on Behalf of the Board

21 July 2010 R. KAPUR

New Delhi Chairman

 
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