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Auditor Report of Hindustan Oil Exploration Company Ltd.

Mar 31, 2023

INDEPENDENT AUDITOR''S REPORT

To the Members of

Hindustan Oil Exploration Company Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Hindustan Oil Exploration Company Limited
("the Company"), which comprise the Balance Sheet as at March 31, 2023, and the Statement of Profit and Loss
(including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for
the year then ended, and a summary of significant accounting policies and other explanatory information and which
includes seven unincorporated joint ventures accounted on proportionate basis.

In our opinion and to the best of our information and according to the explanations given to us, and based on the
consideration of reports of the other auditors on separate financial statements of the unincorporated joint ventures
referred to in the Other Matters section below, the aforesaid standalone financial statements give the information
required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in
conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted
in India, of the state of affairs of the Company as at March 31, 2023, and its profit, total comprehensive income,
its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs)
specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in
the Auditor''s Responsibility for the Audit of the Standalone Financial Statements section of our report. We are
independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants
of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial
statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit
evidence obtained by us and the other auditors in terms of their reports referred to in Other Matters section
below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the standalone financial statements of the current period. These matters were addressed in the context of our
audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. we have determined the matters described below to be the key audit matters
to be communicated in our report.

Information Other than the Financial Statements and Auditorâs Report Thereon

â¢ The Company''s Board of Directors is responsible for the other information. The other information comprises
the information included in the Board''s Report, Corporate Governance Report, Management Discussion and
Analysis Report and Business Responsibility and Sustainability Report, but does not include the financial
statements and our auditor''s report thereon. The Board''s Report, Corporate Governance Report, Management
Discussion and Analysis Report and Business Responsibility and Sustainability Report are expected to be
made available to us after the date of this auditor''s report.

â¢ Our opinion on the financial statements does not cover the other information and will not express any form of
assurance conclusion thereon.

â¢ In connection with our audit of the standalone financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears
to be materially misstated.

â¢ When we read the Board''s Report, Corporate Governance Report, Management Discussion and Analysis
Report and Business Responsibility and Sustainability Report, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to those charged with governance as
required under SA 720 ''The Auditor''s responsibilities Relating to Other Information.

Responsibilities of Management and those Charged with Governance for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect
to the preparation of these standalone financial statements that give a true and fair view of the financial position,
financial performance including other comprehensive income, cash flows and changes in equity of the Company in
accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also
includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application
of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring
the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the
standalone financial statement that give a true and fair view and are free from material misstatement, whether
due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Company''s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless Board of Directors either intends to liquidate the Company or to cease operations,
or has no realistic alternative but to do so.

The Company''s Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditorâs Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism
through out the audit. We also:

â¢ Identify and assess the risks of material misstatement of the standalone financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for
expressing our opinion on whether the Company has adequate internal financial controls with reference to
standalone financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the management.

â¢ Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the
standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or
conditions may cause the Company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including
the disclosures, and whether the standalone financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.

â¢ Obtain sufficient appropriate audit evidence regarding the financial information of the Company unincorporated
joint ventures to express an opinion on the standalone financial statements. We are responsible for the
direction, supervision and performance of the audit of the financial statements of such entities or business
activities included in the standalone financial statements of which we are the independent auditors. For the
other entities or business activities included in the standalone financial statements, which have been audited
by the other auditors remain responsible for the direction, supervision and performance of the audits carried
out by them. We remain solely responsible for our audit opinion.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate,
makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial
statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope
of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements
in the standalone financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the standalone financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.

Other Matters

a) We have placed reliance on the technical / commercial evaluation performed by the management in respect of
the categorization of wells as exploratory, development, producing and dry wells, allocation of costs incurred
on them, proved developed hydrocarbon reserves and depletion thereof on Oil and Gas assets, impairment and
liability for site restorations costs.

b) Management had performed year end physical verification of inventory of crude oil at offshore location. However,
we were not able to physically observe the verification of the inventory that was carried out by the Management
due to practical and safety considerations. Consequently, we have performed alternate procedures to audit
the existence and condition of inventory as per the guidance provided in SA 501 "Audit evidence - Specific
consideration for selected items" and have obtained sufficient appropriate audit evidence to issue our unmodified
opinion on these Financial Statements. Our report on the financial statements is not modified in respect of
this matter.

c) We did not audit the financial statements of seven unincorporated joint ventures included in the standalone
financial statements of the Company, whose financial statements reflect total assets of $ 672 Lakhs as at
March 31, 2023 and total revenues of $ Nil Lakhs for the year ended on that date, as considered in the
standalone financial statements. The financial statements of these unincorporated joint ventures have been
audited by the other auditors whose reports have been furnished to us, and our opinion in so far relates to the
amounts and disclosures included in respect of these unincorporated joint ventures and our report in terms
of sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid unincorporated joint
ventures, is solely based on the report of such other auditors.

Our opinion on the standalone financial statements and our report on Other Legal and Regulatory Requirements
below is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the
other auditors on the separate financial statements of the unincorporated joint ventures, referred to in the
Other Matters section above we report, to the extent applicable that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it
appears from our examination of those books.

c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the
Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement
with the relevant books of account.

d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under
Section 133 of the Act.

e. On the basis of the written representations received from the directors as on March 31,2023 taken on
record by the Board of Directors, none of the directors is disqualified as on 31 March, 2023 from being
appointed as a director in terms of Section 164(2) of the Act

f. With respect to the adequacy of the internal financial controls with reference to standalone financial
statements of the Company and the operating effectiveness of such controls, refer to our separate
Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating
effectiveness of the Company''s internal financial controls with reference to standalone financial statements.

g. With respect to the other matters to be included in the Auditor''s Report in accordance with the
requirements of Section 197(16) of the Act, as amended,

In our opinion and to the best of our information and according to the explanations given to us, the
remuneration paid by the Company to its directors during the year is in accordance with the provisions
of Section 197 of the Act.

h. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our
information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone
financial statements. Refer Note 47 to the standalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there
were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and
Protection Fund by the Company.

iv. (a) The Management has represented that, to the best of its knowledge and belief, as disclosed in

the note 61 to the standalone financial statements, no funds (which are material either individually
or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or
share premium or any other sources or kind of funds) by the Company to or in any other
person(s) or entity(ies), including foreign entities.

(b) The Management has represented, that, to the best of its knowledge and belief, as disclosed in
the note 62 to the standalone financial statements, no funds (which are material either individually

on in the aggregate) have been received by the Company from any person(s) or entity(ies),
including foreign entities.

(c) Based on the audit procedures performed that have been considered reasonable and appropriate
in the circumstances, nothing has come to our notice that has caused us to believe that the
representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above,
contain any material misstatement.

V. The Company has not declared or paid any dividend during the year and has not proposed final
dividend for the year.

VI. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account
using accounting software which has a feature of recording audit trail (edit log) facility is applicable
to the Company w.e.f. April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies
(Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

2. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government
in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in
paragraphs 3 and 4 of the Order.

For Deloitte Haskins & Sells LLP
Chartered Accountants

(Firm''s Registration No.117366W/W-100018)

C Manish Muralidhar

Place : Hyderabad (Partner)

Date : May 25, 2023 (Membership No. 213649)

MM/JM/2023/24 (UDIN:23213649BGVBYN8302)

Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Hindustan Oil Exploration Company Limited (âthe Companyâ), which comprise the Balance Sheet as at 31^st March, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information, which includes six Unincorporated joint ventures accounted on proportionate basis.

Managementâs Responsibility for the Standalone Ind AS Financial Statements

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorâs Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order issued under section 143(11) of the Act.

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the other auditors on separate financial statements of unincorporated joint ventures referred to in the Other Matters paragraphs (a) and (b) below, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the Ind AS and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March, 2018, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Other Matters

a) We did not audit the financial statements of six unincorporated joint ventures included in the standalone Ind AS financial statements of the Company whose financial statements reflect total assets of Rs. 3,959.71 Lakhs as at 31^st March 2018 and total revenues of Rs. 8.73 Lakhs for the year ended on that date, as considered in the standalone Ind AS financial statements. The financial statements of these unincorporated joint ventures have been audited by the other auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these unincorporated joint ventures and our report in terms of sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid unincorporated joint ventures, is based solely on the report of such other auditors.

b) We have placed reliance on technical/commercial evaluation by the management in respect of categorisation of wells as exploratory, development, producing and dry wells, allocation of costs incurred on them, proved developed hydrocarbon reserves and depletion thereof on Oil and Gas assets, impairment and liability for site restoration costs.

Our opinion on the standalone financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the other auditors on the separate financial statements of the unincorporated joint ventures, referred to in the Other Matters paragraph above we report, to the extent applicable that:

a) We have sought and obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors of the Company as on 31^st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2018 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts; and

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order

We have audited the internal financial controls over financial reporting of Hindustan Oil Exploration Company Limited (âthe Companyâ) as of 31^st March, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditorâs Responsibility

Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the criteria for internal financial control over financial reporting established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date.

(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and there are no unclaimed deposits as at 31^st March, 2018.

(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Income-tax, GST, Service Tax, Customs Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Income-tax, GST, Service Tax, Customs Duty, Value Added Tax, cess and other material statutory dues in arrears as at 31^st March, 2018 for a period of more than six months from the date they became payable.

(c) Details of dues of Service Tax which have not been deposited as on 31^st March, 2018 on account of disputes are given below:

Name of Statute

Nature of Dues

Forum where Dispute is Pending

Period to which the Amount Relates

Amount Involved (Rs.)

Amount Unpaid (Rs.)

Finance Act, 1994

Service Tax

CESTAT, Chennai CESTAT, Chennai

April 2006 to November 2007

October 2007 to March 2011

1,474,789

15,417,128

1,474,789

14,838,985

(viii) The Company has not taken any loans or borrowings from financial institutions, banks and government or has not issued any debentures. Hence reporting under clause (viii) of CARO 2016 is not applicable to the Company.

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 Order is not applicable.

(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year

(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 188 and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-I of the Reserve Bank of India Act, 1934.

For Deloitte Haskins & Sells LLP

Chartered Accountants

(Firmâs Registration No.117366W/W-100018)

Bhavani Balasubramanian

Partner

Membership No. 22156

Date : May 12, 2018

Place: Chennai

Mar 31, 2017

To the Members of

Hindustan Oil Exploration Company Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Hindustan Oil Exploration Company

Limited ("the Company"), which comprise the Balance Sheet as at 31^st March, 2017, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information, which includes five Joint Operations.

Managementâs Responsibility for the Standalone Ind AS Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error

Auditorâs Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence obtained by us and the audit evidence obtained by other auditors in terms of their reports referred to in sub-paragraphs (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the other auditors on separate financial statements of unincorporated joint ventures referred to in the Other Matters paragraph below, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March, 2017, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Other Matters

a) We did not audit the financial statements of five unincorporated joint ventures included in the standalone Ind AS financial statements of the Company whose financial statements reflect total assets of Rs, 4,480.31 lakhs as at 31^st March, 2017 and total revenues of Rs, 34.19 lakhs for the year ended on that date, as considered in the standalone Ind AS financial statements. The financial statements of these unincorporated joint ventures have been audited by the other auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these unincorporated joint ventures and our report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to the aforesaid unincorporated joint ventures, is based solely on the report of such other auditors.

b) We have placed reliance on technical / commercial evaluation by the management in respect of categorization of wells as exploratory, development, producing and dry wells, allocation of costs incurred on them, proved developed hydrocarbon reserves and depletion thereof on Oil and Gas assets, impairment, and liability for site restoration costs.

Our opinion on the standalone financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of other auditors on the separate financial statements of the unincorporated joint ventures, referred to in the Other Matters paragraph above we report, to the extent applicable that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31^st March,

2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31 ^st March, 2017 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, on long-term contracts;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company

iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8^th November, 2016 of the Ministry of Finance, during the period from 8^th November 2016 to 30^th December 2016. Based on audit procedures performed and the representations provided to us by the management we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management.

2. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.

We have audited the internal financial controls over financial reporting of Hindustan Oil Exploration Company Limited ("the Company") as of 31^st March, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

ANNEXURE "A" TO THE INDEPENDENT AUDITORâS REPORT

(Referred to in paragraph e under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

Managementâs Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditorâs Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st March, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

(i) (a) The Company has maintained proper records

showing full particulars, including quantitative details and situation of fixed assets.

(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.

(iv) The Company has not granted any loans, made investments or provide guarantees and hence reporting under clause (iv) of the CARO 2016 is not applicable.

(c) Details of dues of Service Tax which have not been deposited as on 31^st March, 2017 on account of disputes are given below:

Name of Statute

Nature of Dues

Forum where Dispute is Pending

Period to which the Amount Relates

Amount Involved (Rs,)

Amount Unpaid (Rs,)

Finance Act, 1994

Service Tax

CESTAT, Chennai

Commissioner of Central Excise (Appeals)

April 2006 to November 2007

October 2007 to March 2011

1,474,789

15,417,128

1,474,789

14,838,985

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and there are no unclaimed deposits as at 31^st March, 2017.

(vi) The maintenance of cost records has been specified by the Central Government under Section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules,

2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Income-tax, Service Tax, Customs Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Income-tax, Service Tax, Customs Duty, Value Added Tax, cess and other material statutory dues in arrears as at 31^st March, 2017 for a period of more than six months from the date they became payable.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 Order is not applicable.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of Section 192 of the Companies Act, 2013 are not applicable.

(xvi) The Company is not required to be registered under Section 45-I of the Reserve Bank of India Act, 1934.

For Deloitte Haskins & Sells LLP Chartered Accountants

(Firm''s Registration No.117366W/W-100018)

Bhavani Balasubramanian

Partner

Membership No. 22156

Place: Chennai

Date : April 18, 2017

Mar 31, 2015

We have audited the accompanying standalone financial statements of Hindustan Oil Exploration Company Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

The attached financial statements include Company's share of current assets/(liabilities), non-current assets/(liabilities), expenses and cash flows aggregating to INR 829,974/ INR (79,685,217), INR 310,586,199/INR (331,065,000), INR Nil and INR (1,924) respectively as at or for the year ended March 31, 2015 in respect of two of its unincorporated joint ventures ('UJV's') not operated by the Company, the audited accounts of which are not available with the Company. The financial statements have been incorporated based on un-audited financial information detailed in note 28(b) of attached financial statements. In the absence of audited accounts of the UJVs, we are unable to comment on the adjustments that may be required to be made in these financial statements.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph above, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, of its loss and its cash flows for the year ended on that date.

Emphasis of Matter

Attention is invited to Note 38 of the accompanying standalone financial statements which describes the factors and conditions that indicate the existence of material uncertainities that cast a substantial doubt on the Company's ability to continue as a going concern. Our report is not qualified for this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure-1a statement on the matters specified in paragraphs 3 and 4 of the Order. In respect of clauses (i), (ii),(iv),(vii)(a),(vii)(b),(vii)(c) and (xii), our comments are restricted to the standalone operations of the Company and operations related to UJVs where the Company is the operator and it does not cover the unincorporated joint ventures where any third party is the operator.

2. As required by section 143(3) of the Act, we report that:

(a) We have sought and, except for the matter described in Basis for Qualified Opinion paragraph above, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) The matters described in the Emphasis of matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

(f) On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164(2) of the Companies Act, 2013;

(g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. Except for the possible effects of the matter d escribed in Basis of Qualified Opinion paragraph above, the Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 31 to the financial statements;

ii. Except for the possible effects of the matter described in Basis of Qualified Opinion paragraph above, the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses on longterm contracts (including derivative contracts).

iii. Following are the instances of delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company:

a) Share application money of INR 177,787 received on October 2006 and INR 260,200 received on January 2008 was due to be transferred as on October 31, 2013 and January 28, 2015 respectively and the same has been paid on May 25, 2015.

b) Unclaimed dividend of INR 837,582 which was due to be transferred on October 28, 2013 has been paid on May 12, 2014.

Other Matters

We did not audit the Company's share of current assets/ (liabilities), expenses and cash flows aggregating to INR Nil/ INR (8,764,826), INR 7,206,307 and INR Nil respectively as at or for the year ended March 31, 2015 in respect of one of its unincorporated joint venture ('UJV') not operated by the Company, whose accounts and other financial information have been audited by the auditors of the respective UJV and whose reports have been furnished to us. Our opinion, in so far as it relates to the affairs of such UJV is based solely on the report of other auditor. Our opinion is not qualified in respect of this matter.

Annexure 1 referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of our report of even date

Re: Hindustan Oil Exploration Company Limited ('the Company')

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a) and (b) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, as well as taking into consideration the management representation that certain items of fixed assets which are of special nature for which alternative quotations are not available, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and inventory and sale of goods and services. During the course of our audit, we have not observed major weakness or continuing failure to correct major weakness in internal control system of the Company in respect of these areas.

(v) The Company has not accepted any deposits from the public.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the extraction of mineral oil and gas and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, income-tax, sales-tax, value added tax, wealth-tax, service tax, cess and other material statutory dues applicable to it. The provisions relating to employees' state insurance, customs duty and excise duty are not applicable to the Company.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income-tax, sales-tax, wealth-tax, service tax, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax and cess on account of any dispute, are as follows:

Name of the statute Nature of the dues Amount (INR)

Income Tax Act, 1961 Tax, Interest and 617,011,890 Penalty

Income Tax Act, 1961 Penalty 30,893,925

Less: Refunds (551,692,081) Adjusted* Net Amount 96,213,734

Name of the statute Period to which the Forum where dispute is amount relates pending

Assessment Year Income Tax A Income Tax Act, 1961 2006-2007 to 2009- Appellate Tribunal 2010

Assessment Year Income Tax 2008-2009 Appellate Tribunal Income Tax Act, 1961

* Refunds pertaining to other assessment years adjusted against disputed dues, based on intimation received from Income Tax Department.

(d) According to the information and explanations given to us, there are significant delays in the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder

(viii) Without considering the consequential effects, if any, of the matter stated in paragraph Basis for Qualified Opinion of our auditors' report, the Company's accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash loss during the year In the immediately preceding financial year, the Company had not incurred cash loss.

(ix) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a bank. The Company has not obtained any borrowings from a financial institution or issued any debentures during the period.

(x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants

ICAI Firm Registration Number: 101049W

per Subramanian Suresh Place : Chennai Partner Date : May 28, 2015 Membership No.: 83673

Mar 31, 2014

We have audited the accompanying financial statements of Hindustan Oil Exploration Company Limited (''the Company'') which comprise the Balance Sheet as at March 31, 2014 and the Statement of Profit and loss and the cash fow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards notifed under the Companies Act, 1956, read with General Circular 8/2014 dated April 4, 2014 issued by the Ministry of Corporate Afairs. Tis responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Tose Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. Te procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the efectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion.

Basis for qualified Opinion

Attention is invited to note 39 of the accompanying financial statements which describes the uncertainty relating to the recoverability of the carrying value of INR 116,571 Lakhs in respect of a producing property of the Company. We are unable to obtain sufcient appropriate audit evidence in relation to the assessment of impairment loss, if any, in the carrying value of the producing property. In view of the significant uncertainties involved, we are unable to comment on the adjustments that may be required to be made in these financial statements.

qualified opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible efects of the matter described in the Basis for qualified Opinion paragraph above, the financial statements give the information required by the Companies Act, 1956 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of afairs of the Company as at March 31, 2014;

(b) in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

Attention is invited to Note 38 of the accompanying financial statements which describes the factors and conditions that indicate the existence of a material uncertainty that cast a substantial doubt on the Company''s ability to continue as a going concern. Our opinion is not qualified for this matter.

Other Matter

We did not audit the Company''s share of net fixed assets (including exploration costs written of ), current assets and liabilities (net), expenses and cash flows aggregating to INR 498,050,426, INR 13,012,194, Nil and INR (443) respectively as at March 31, 2014 in respect of two of its unincorporated joint ventures (''UJV''s'') not operated by the Company, whose accounts and other financial information have been audited by the auditors of the respective UJV''s and whose reports have been furnished to us. Our opinion, in so far as it relates to the afairs of such UJVs are based solely on the report of other auditors. Our opinion is not qualified in respect of this matter.

Te attached financial statements and other financial information include Company''s share of net fixed assets, current assets, expenses and cash flows aggregating to INR 627,525,693, Nil, Nil and Nil respectively as at March 31, 2014 in respect of one of its UJV not operated by the Company, the accounts of which have not been audited by the auditors of the respective UJV''s. Te financial statements and other financial information have been incorporated based on unaudited financial statements as provided by the Operator of respective UJV and relied upon by us. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 ("the Act"), we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

(a) Except for the possible efects of the matter stated in Basis for qualified Opinion paragraph above, we were able to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by the Company as far as appears from our examination of those books;

(c) Te balance sheet, statement of Profit and loss and cash fow statement dealt with by this report are in agreement with the books of account;

(d) Except for the possible efects of the matter described in Basis for qualified Opinion paragraph above, the balance sheet, statement of Profit and loss and cash fow statement comply with the accounting standards notifed under the Companies Act, 1956, read with General Circular 8/2014 dated 4 April 2014 issued by the Ministry of Corporate Afairs;

(e) On the basis of the written representations received from the directors, as on March 31, 2014, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on March 31, 2014 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

Annexure referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of our report of even date Re: Hindustan Oil Exploration Company Limited (''the Company'')

(i) (a) Te Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verifed by the management during the year but there is a regular programme of verifcation which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verifcation.

(c) Tere was no disposal of substantial part of fixed assets during the year.

(ii) (a) Te management has conducted physical verifcation of inventory at reasonable intervals during the year.

(b) Te procedures of physical verifcation of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) Te Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verifcation.

(iii) (a-d) According to information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Terefore the provisions of clause 4(iii) (a) to (d) of the Order are not applicable to the Company.

(e) Te Company had taken loan from one company covered in the register maintained under section 301 of the Companies Act, 1956. Te maximum amount involved during the year was INR 9,375.95 million and the year- end balance of loans taken from that party was INR 9,375.95 million.

(f ) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company.

(g) In respect of loans taken, repayment of the principal amount is as stipulated and payments of interests have been regular.

(iv) In our opinion and according to the information and explanations given to us, as well as taking into consideration the management representation that certain items of fixed assets which are of special nature for which alternative quotations are not available, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and inventory and sale of goods and services. During the course of our audit, we have not observed major weakness or continuing failure to correct major weakness in internal control system of the Company in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act that need to be entered into the register maintained under section 301 of the Companies Act have been so entered.

(b) In respect of transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lakhs entered into during the financial year, because of the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time.

(vi) Te Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(ix) (a) Te Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, income-tax, sales-tax, wealth-tax, service tax, cess and other material statutory dues applicable to it. Te provisions relating to employees'' state insurance, customs duty and excise duty are not applicable to the Company.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, income-tax, sales-tax, wealth-tax, service tax, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, and cess on account of any dispute, are as follows:

Name of Nature of Amount (INR) Period to which Forum where the statute the dues the amount dispute is relates pending Income Tax and 342,679,519 Assessment Year Income Tax Tax Act, Interest 2007-2008 Appellate 1961 Tribunal Tax and 30,893,925 Assessment Year CIT (Appeals) Interest 2008-2009

Less: (277,359,710) Refunds Adjusted* Net Amount 96,213,734

Fringe 741,728 Commissioner benefit Tax of Income Tax (Appeals)

* Refunds pertaining to other assessment years adjusted against disputed dues, based on intimation received from Income Tax Department.

(x) Without considering the consequential efect, if any, of the matter stated in paragraph "Basis for qualified Opinion" of our Auditor''s report, the Company''s accumulated losses at the end of the financial year are more than fifty per cent of its net worth. Te Company has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to banks. Te Company has no outstanding dues in respect of a financial institution and has not issued any debentures during the period.

(xii) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Terefore, the provisions of Clause 4 (xiii) of the Order are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause 4 (xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) Te Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act.

(xix) Te Company did not have any outstanding debentures during the year.

(xx) Te Company has not raised any money through public issues during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S. R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm registration number: 101049W

per Subramanian Suresh Place : New Delhi Partner Date : May 30, 2014 Membership No.: 83673

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of Hindustan Oil Exploration Company Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Proft and Loss and Cash Flow Statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). Tis responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these fnancial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Tose Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. Te procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the fnancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the fnancial statements. We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion.

Basis for qualifed opinion

Te Company follows "Successful Eforts Method" method of accounting for its exploration and production activities and as detailed in Note B (iii) to the fnancial statements, the Company has capitalised costs of INR 342.29 million (including INR 64.49 million to March 31, 2012), incurred in respect of surveys and studies relating to exploration activities.

Te "Guidance Note on Accounting for Oil and Gas Producing Activities" (Guidance Note) issued by the Institute of Chartered Accountants of India requires costs of surveys and studies relating to exploration activities to be expensed when incurred under the "Successful Eforts Method" of accounting. Had the Company followed the recommendation of the Guidance Note, survey costs of INR 342.29 million (including prior period charge of INR 64.49 million) would have been written of as an expense and after considering related tax efects the net loss for the year would have been higher by INR 342.29 million and reserves and surplus would have been lower by INR 342.29 million respectively. Our audit opinion on the fnancial statements for the year ended March 31, 2012 was also qualifed in respect of the above matter.

Qualifed opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the efects of the matter described in the Basis for Qualifed Opinion paragraph, the fnancial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of afairs of the Company as at March 31, 2013;

(b) in the case of the Statement of Proft and Loss, of the loss for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash fows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specifed in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) Te Balance Sheet, Statement of Proft and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Statement of Proft and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualifed as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Other Matter

We did not audit the Company''s share of net fxed assets, net current assets, expenses and cash fows aggregating to INR 220,618,926, INR 11,108,879, INR Nil and INR Nil respectively as at March 31, 2013 in respect of one of its unincorporated joint venture (''UJV'') not operated by the Company, whose accounts and other fnancial information have been audited by the auditors of the respective UJV and whose reports have been furnished to us. Our opinion, in so far as it relates to the afairs of such UJVs are based solely on the report of other auditors. Our opinion is not qualifed in respect of this matter.

Te attached fnancial statements and other fnancial information include Company''s share of net fxed assets, net current assets, expenses and cash fows aggregating to INR 807,757,669, INR Nil, INR Nil and INR Nil respectively as at March 31, 2013 in respect of two of its UJV''s not operated by the Company, the accounts of which have not been audited. Te fnancial statements and other fnancial information have been incorporated based on un-audited fnancial statements as provided by the Operator of respective UJV''s and relied upon by us. Our opinion is not qualifed in respect of this matter.

(i) (a) Te Company has maintained proper records showing full particulars, including quantitative details and situation of fxed assets.

(b) All fxed assets have not been physically verifed by the management during the year but there is a regular programme of verifcation which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verifcation.

(c) Tere was no substantial disposal of fxed assets during the year.

(ii) (a) Te management has conducted physical verifcation of inventory at reasonable intervals during the year.

(b) Te procedures of physical verifcation of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) Te Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verifcation carried out at the end of the year.

(iii) (a-d) As informed, the Company has not granted any loans, secured or unsecured to companies, frms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Terefore the provisions of clause 4(iii) (b), (c) and (d) of the Order are not applicable to the Company.

(e) Te Company had taken loan from one company covered in the register maintained under section 301 of the Companies Act, 1956. Te maximum amount involved during the year was INR 9,051.25 million and the year end balance of loans taken from that party was INR 8,631 million.

(f ) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company.

(g) In respect of loans taken, repayment of the principal amount is as stipulated and payment of interests have been regular.

(iv) In our opinion and according to the information and explanations given to us, as well as taking into consideration the management representation that certain items of fxed assets which are of special nature for which alternative quotations are not available, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fxed assets and inventory and sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, that need to be entered into the register maintained under section 301 of the Companies Act, have been so entered.

(b) In respect of transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees fve lakhs entered into during the fnancial year, because of the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time.

(vi) Te Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) Te Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, income-tax, sales-tax, wealth-tax, service tax, cess and other material statutory dues applicable to it. Te provisions relating to employees'' state insurance, customs duty and excise duty are not applicable to the Company.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, income-tax, sales-tax, wealth-tax, service tax, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, and cess on account of any dispute, are as follows:

Name of Nature of Amount (INR) Period to which the Forum where Statute the Dues amount relates Dispute is Pending

Income Tax and 342,679,519 Assessment Year Income Tax Tax Act, Interest 2007-2008 Appellate Tribunal 1961

Tax and 30,893,925 Assessment Year CIT (Appeals) Interest 2008-2009

Less: Refunds (277,359,710) Adjusted*

Net Amount 96,213,734

Fringe Beneft 741,728 Commissioner Tax of Income Tax (Appeals)

* Refunds pertaining to other assessment years adjusted against disputed dues, based on intimations received from Income Tax Department.

(x) Te Company''s accumulated losses at the end of the fnancial year are less than ffty percent of its net worth and it has not incurred cash losses in the current and immediately preceding fnancial yea r.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to banks. Te Company has no outstanding dues in respect of a fnancial institution and has not issued any debentures during the period.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual beneft fund / society. Terefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or fnancial institutions.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) Te Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act.

(xix) Te Company did not have any outstanding debentures during the year.

(xx) Te Company has not raised any money through public issues during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the fnancial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For S. R. BATLIBOI & ASSOCIATES LLP

Chartered Accountants

ICAI Firm registration number: 101049W

per Subramanian Suresh

Place : Chennai Partner

Date : May 29, 2013 Membership No.: 83673

Mar 31, 2012

1. We have audited the attached Balance Sheet of Hindustan Oil Exploration Company Limited ('the Company') as at March 31, 2012 and also the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. The attached financial statements and other financial information include Company's share of net fixed assets, net current assets, expenses and cash flows aggregating to INR 207,405,350, INR 11,012,935, INR Nil and INR Nil respectively as at March 31, 2012 in respect of one of its unincorporated joint venture ('UJV') not operated by the Company, the accounts of which have been audited by the auditors of the respective UJV and relied upon by us.

4. The attached financial statements and other financial information include Company's share of net fixed assets, net current assets, expenses and cash flows aggregating to INR 589,354,182, INR Nil, INR 143,010,507 and INR Nil respectively as at March 31, 2012 in respect of two of its UJV's not operated by the Company, the accounts of which have not been audited by the auditors of the respective UJV's. The financial statements and other financial information have been incorporated based on un-audited financial statements as provided by the Operator of respective UJV's and relied upon by us.

5. As required by the Companies (Auditor's Report) Order, 2003 (as amended) ('the Order') issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. In respect of clauses (ii), (ix)(a), (ix)(b), (ix)(c) and (xxi), our comments are restricted to the standalone operations of the Company and operations related to UJVs where the Company is the operator and it does not cover the unincorporated joint ventures where any third party is the operator.

6. In accordance with the accounting policy detailed in Note B(xii) to the financial statements, the Company has either capitalized or accumulated in foreign currency monetary item translation difference account, exchange loss of INR 764.57 million in respect of long term borrowings in foreign currency outstanding as at March 31, 2012. However, in determining the amount of exchange loss to be accounted in this manner, the Company has not excluded exchange differences to the extent that the same can be regarded as an adjustment to interest costs as required by Paragraph 4(e) of Accounting Standard 16, "Borrowing Costs". The Company has not computed / estimated the extent of such adjustment to interest costs and, in the absence of such information, we are unable to comment on the extent to which the finance costs are stated lower and also the consequential impact on profits for the year and the reserves and surplus as at March 31, 2012.

7. The Company follows "Successful Efforts Method" of accounting for its exploration and production activities and as detailed in Note B(iii) to the financial statements, the Company has capitalised costs of INR 64.49 million (including INR 6.33 million to March 31, 2011), incurred in respect of surveys and studies relating to exploration activities.

The "Guidance Note on Accounting for Oil and Gas Producing Activities" (Guidance Note) issued by the Institute of Chartered Accountants of India requires costs of surveys and studies relating to exploration activities to be expensed when incurred under the "Successful Efforts Method" of accounting. Had the Company followed the recommendation of the Guidance Note, survey costs of INR 64.49 million (including prior period charge of INR 6.33 million) would have been written off as an expense and the net profit for the year and reserves and surplus after considering the related tax effects would have been lower by INR 43.06 million.

8. Further to our comments in the Annexure referred to above, we report that:

i. Except for the effects of the matter referred to in paragraphs 6 above, we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

iii. the balance sheet, statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of account;

iv. Except for the effects of the matters referred to in paragraphs 6 above, in our opinion, the balance sheet, statement of profit and loss and cash flow statement dealt with by this report comply with the accounting standards referred to in sub- section (3C) of Section 211 of the Companies Act, 1956;

v. On the basis of the written representations received from the directors, as on March 31, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

vi. In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters referred to in paragraphs 6 above, the said accounts give the information required by the Companies Act, 1956, in the manner so required and except for the effects of the matters referred to in paragraphs 6 and 7 above, the said accounts give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2012;

b) in the case of the statement of profit and loss, of the profit for the year ended on that date; and

c) in the case of cash flow statement, of the cash flows for the year ended on that date,

ANNEXURE REFERRED TO IN PARAGRAH 5 OF OUR REPORT OF EVEN DATE Re; Hindustan Oil Exploration Company Limited ('the Company')

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification carried out at the end of the year.

(iii) (a-d) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore the provisions of clause 4(iii) (b), (c) and (d) of the Order are not applicable to the Company.

(e) The Company had taken loan from one company covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was INR 6,129,000,000 and the year-end balance of loans taken from that party was INR 5,539,475,000.

(f) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company.

(g) In respect of loans taken, repayment of the principal amount is as stipulated and payment of interest have been regular.

(iv) In our opinion and according to the information and explanations given to us, as well as taking into consideration the management representation that certain items of fixed assets which are of special nature for which alternative quotations are not available, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and inventory and sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In respect of transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lakhs entered into during the financial year, because of the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(l)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, income-tax, sales-tax, wealth-tax, service tax, cess and other material statutory dues applicable to it. The provisions relating to employees' state insurance, customs duty and excise duty are not applicable to the Company.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, income-tax, sales-tax, wealth-tax, service tax, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, and cess on account of any dispute, are as follows:

Name of Nature of the Amount (INR) Period to which the Forum where Statute Dues amount relates Dispute is Pending

Income Tax and 342,679,519 Assessment Year Income Tax Tax Act, Interest 2007-2008 Appellate Tribunal 1961 Less: Refunds (277,359,710) Adjusted *

Net Amount 65,319,809

Fringe Benefit 741,728 Commissioner Tax of Income Tax (Appeals)

* Refunds pertaining ro other assessment years adjusted against disputed dues, based on intimations received from income tax department.

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to banks. The Company has no outstanding dues in respect of a financial institution and has not issued any debentures during the period.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money through public issues during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For S. R. BATLIBOI & ASSOCIATES Chartered Accountants

Firm registration number: 101049W

per Subramanian Suresh Place : New Delhi Partner

Date : May 18, 2012 Membership No.: 83673

Mar 31, 2011

1. We have audited the attached Balance Sheet of Hindustan Oil Exploration Company Limited ('the Company') as at March 31, 2011 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. Tese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Tose Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. Te attached financial statements and other financial information include Company's share of net fixed assets, net current assets, expenses and cash flows aggregating to INR 588,294,910, INR (8,535,030), INR 297,162,129 and INR (19,049,219) respectively as at March 31, 2011 in respect of one of its unincorporated joint venture ('UJV') not operated by the Company, the accounts of which have been audited by the auditors of the respective UJV and relied upon by us.

4. Te attached financial statements and other financial information include Company's share of total exploration/ development work in progress, net current assets, expenses and cash flows aggregating to INR 200,452,559, INR 11,021,398, INR Nil and INR (13,163) respectively as at March 31, 2011 in respect of two of its UJV's not operated by the Company, the accounts of which have not been audited by the auditors of the respective UJV's. Te financial statements and other financial information have been incorporated based on un-audited financial statements as provided by the Operator of respective UJV's and relied upon by us.

5. As required by the Companies (Auditor's Report) Order, 2003 (as amended) ('the Order') issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. In respect of clauses (ii), (ix)(a), (ix)(b), (ix)(c) and (xxi), our comments are restricted to the standalone operations of the Company and operations related to UJVs where the Company is the operator and it does not cover the unincorporated joint ventures where any third party is the operator.

6. Further to our comments in the Annexure referred to above, we report that:

i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

iii. Te balance sheet, Profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the balance sheet, Profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

v. On the basis of the written representations received from the directors, as on March 31, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

(a) in the case of the balance sheet, of the state of afairs of the Company as at March 31, 2011;

(b) in the case of the Profit and loss account, of the Profit for the year ended on that date; and

(c) in the case of cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAH 5 OF OUR REPORT OF EVEN DATE Re: Hindustan Oil Exploration Company Limited ('the Company')

(i) (a) Te Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) Tere was no substantial disposal of fixed assets during the year.

(ii) (a) Te management has conducted physical verification of inventory at reasonable intervals during the year.

(b) Te procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) Te Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification carried out at the end of the ye a r.

(iii) (a-d) As informed, the Company has not granted any loans, secured or unsecured to companies, forms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Terefore the provisions of clause 4(iii) (b), (c) and (d) of the Order are not applicable to the Company.

(e) Te Company had taken loan from one company covered in the register maintained under section 301 of the Companies Act, 1956. Te maximum amount involved during the year was Rs. 5,697,500,000 and the year-end balance of loans taken from that party was Rs. 5,307,475,000.

(f ) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company.

(g) In respect of loans taken, repayment of the principal amount is as stipulated and payment of interest have been regular.

(iv) In our opinion and according to the information and explanations given to us, as well as taking into consideration the management representation that certain items of fixed assets which are of special nature for which alternative quotations are not available, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and inventory and sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under section 301 of the Act have been so entered.

(b) In respect of transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lakhs entered into during the financial year, because of the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time.

(vi) Te Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products of the Company.

(ix) (a) Te Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, income-tax, sales-tax, wealth-tax, service tax, cess and other material statutory dues applicable to it. Te provisions relating to employees' state insurance, customs duty and excise duty are not applicable to the Company.

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441 A of the Companies Act,1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, income-tax, sales-tax, wealth-tax, service tax, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, and cess on account of any dispute, are as follows:

Name of Nature of the Amount (Rs.) Period to which the Forum where Statute Dues amount relates Dispute is Pending

Income Tax and 2,836,952 Assessment Year Tax Act, Interest 2003-2004 1961 1,430,040 Assessment Year Income Tax 2006-2007 Appellate Tribunal

145,499,694 Assessment Year 2007-2008

84,545,109 Assessment Year Commissioner 2008-2009 of Income Tax (Appeals)

Sub-total 234,311,795

Less: Refunds (34,202,040) Adjusted *

Net Amount 200,109,755

Fringe benefit 741,728 Commissioner Tax of Income Tax (Appeals)

* Refunds pertaining to other assessment years adjusted against disputed dues, based on intimations received from income tax department.

(x) Te Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to banks. Te Company has no outstanding dues in respect of a financial institution and has not issued any debentures during the period.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/society. Terefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) Te Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act.

(xix) Te Company did not have any outstanding debentures during the year.

(xx) Te Company has not raised any money through public issues during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For S. R. Batliboi & Associates

Firm registration number: 101049W

Chartered Accountants

per Subramanian Suresh

Place : New Delhi Partner

Date : May 9, 2011 Membership No.: 83673

Mar 31, 2010

1. We have Audited the attached Balance Sheet of HINDUSTAN OIL EXPLORATION COMPANY Limited ("the Company") as at March 31, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto, in which are incorporated the financial Statements of one Unincorporated joint venture Audited by us and nine Unincorporated joint ventures Audited by other auditors.These financial Statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial Statements based on our audit.

2. We conducThed our audit in accordance with the auditing standards generally accepted in India. Tose Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial Statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial Statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial Statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a Statement on the matters specified in paragraphs 4 and 5 of the said Order. Our comments in the Annexure are restricThed to the activities of the Company only and exclude matters relating to the Companys interest in the Unincorporated joint ventures, which are not subject to audit under the Companies Act, 1956 and, accordingly, their auditors have not reported on the matters specified in CARO.

4. Without qualifying our opinion, we draw atThention to the following:

(a)The Accounts have been drawn up in accordance with t he Statement of Significant Accounting Policies (Schedule 15). Accounting Policy 3 relating to "Successful Efforts Method", the treatment of exploration and development costs and the estimates of proved developed hydrocarbon reserves and Accounting Policy 4 relating to "site Restoration" are significant to the oil and gas exploration and production industry.

(b) Categorisation of the wells as exploratory, development or producing and the depletion of producing property on the basis of proved developed hydrocarbon reserves and expensing of the estimated site restoration liability on the basis of proved hydrocarbon reserves are made according to technical evaluation of the Management, on which we have placed reliance.

(c) As stated in Accounting Policy 6 of the Statement of Significant Accounting Policies (Schedule 15), the financial Statements of the Unincorporated joint ventures are prepared in accordance with the requirements prescribed by the respective Production Sharing Contracts of the Unincorporated joint ventures. Hence, certain adjustments / disclosures required under the mandatory accounting standards, the Companies Act, 1956 and pronouncements of the InstituThe of CharThered Accountants of India have been made in these accounts to the extent of the information available with the Company.

(d) As stated in note 20 of Schedule 16 of the Accounts, an amount of Rs. 894,400,144 representing Income Ta x demands under appeal as at March 31, 2010 has been disclosed as claims against the Company not acknowledged as debt. In the opinion of the Management, no provision is required be made in the financial Statements with respect to the same.

5. The accounts of the Company for the year ended March 31, 2010 include assets aggregating Rs. 16,276,333,000, liabilities aggregating Rs. 490,497,454, income aggregating Rs. 148,719 and expenditure aggregating Rs. 195,085,051 relating to the Companys share in nine Unincorporated joint ventures, which have been Audited by other auditors, whose reports have been furnished to us and our opinion, in so far as it relaThes to the amounts and other financial information included in respect of these Unincorporated joint ventures, is based solely on their reports.

6. In the case of one of the Unincorporated joint ventures of the Company, PYÃ1, the auditors of the said Unincorporated joint venture have given an emphasis of matter paragraph in respect of creation of site restoration fund subsequent to the year end (See note 37 of Schedule 16 of the Accounts) and approval of the Management Committee pending for certain transactions with an affiliaThe of the Company (See paragraph 7 below and note 37 of Schedule 16 of the Accounts).

7. As stated in note 16 of Schedule 16 of the Accounts, an amount of Rs. 160,438,827 has been accrued and accounted for by the Company during the year as Development Expenditure, being the Companys share of the cost of services rendered by M/s ENI IndiaLimited United Kingdom ("ENI India") to one of the Unincorporated joint ventures (PY-1) where the Company is the Operator, subject to the Company receiving the required documentation as stipulaThed by the Board before making the payment, which the Company is in the process of obtaining. Pending receipt of the same, we are unable to comment on the aforesaid transaction accounted by the Company. Also see paragraph 6 above.

8. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit, except for our comments in paragraph 7 above and read with our comments in paragraph 4(c) above;

b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper financial Statements adequate for the purposes of our audit have been received from nine Unincorporated joint ventures Audited by other auditors;

c. the reports on the financial Statements of nine Unincorporated joint ventures Audited by other auditors have been provided to us by the Company and have been dealt with by us in preparing this report;

d. the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and the Audited financial Statements of the Unincorporated joint ventures;

e. in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 read with paragraph 4(c) above;

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read with our comments in paragraphs 4, 5 and 6 above, give the information required by the Companies Act, 1956, in the manner so required and, subject to our comments in paragraph 7 above, give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

(ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

9. On the basis of the written representations received from the Directors as at March 31, 2010 taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as at March 31, 2010 from being appointed as a Director in terms of Section 274(1)(g) of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Companys business/ activities/result/transactions, etc. during the year and read together with our comment relating to the Unincorporated joint ventures in paragraph 3 of our audit report, clauses 4(ii), 4(viii), 4(x), 4(xii), 4(xiii), 4(xiv), 4(xv), 4(xviii), 4(xix) and 4(xx) of CARO are not applicable.

(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constituThe a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affecThed the going concern status of the Company.

(iii) (a)The Company has not Granted any loans, secured or unsecured, to companies, firms or other parties covered in the RegisTher maintained in pursuance of Section 301 of the Companies Act, 1956.

(b) In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered in the RegisTher maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(i)The Company has taken an unsecured loan aggregating Rs. 6,165,000,000 from one party during the year. At the year end, the outstanding balance of such loan aggregaThed Rs. 5,697,500,000 and the maximum amount involved during the year was Rs. 6,165,000,000.

(ii)The rate of interest and otherTerms and conditions of such loan is, in our opinion, prima facie, not prejudicial to the interests of the Company.

(iii)The payments of principal amounts and interest in respect of such loan have been regular/as per stipulations.

(iv) Subject to our comments in Paragraph 7 of the Audit Report relating to the required documentation pending to be received for the Companys s hare of the cost of services rendered by M/s ENI IndiaLimited United Kingdom to one Unincorporated joint venture where the Company is the Operator, in our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alThernative sources are not readily available for obtaining comparable quotations, there is an adequate Internal control System commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and for the sale of goods and rendering of services. During the course of our audit, we have not observed any major weakness in such Internal control System.

(v) In respect of contracts or arrangements entered in the RegisTher maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that needed to be entered in the RegisTher maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs. 5 lakhs in respect of any party, subject to our comments in Paragraph 7 of the Audit Report relating to the required documentation pending to be received for the Company s s hare of the cost of services rendered by M/s ENI IndiaLimited United Kingdom to one Unincorporated joint venture where the Company is the Operator, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vi)The Company has not accepted any deposit from the public.

(vii) In our opinion, the Internal audit functions carried out during the year by an exThernal agency appointed by the Management have been generally commensurate with the size of the Company and the nature of its business.

(viii) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and protection Fund, Income Tax, Fringe Benefit Tax, Value Added Tax, Service Tax, Wealth Tax, Customs Duty, Cess and other material statutory dues with the appropriate authorities during the year.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and protection Fund, Income Tax, Fringe Benefit Tax, Value Added Tax, Service Tax, Wealth Tax, Customs Duty, Cess and other material statutory dues applicable to the Company in arrears as at March 31, 2010 for a period of more than six months from the date they became payable.

(c) The details of disputed dues which have not been deposited by the Company as at March 31, 2010 are as follows:

Name of Nature of the Assessment Amount (Rs.) Forum where Dispute

Statute Dues Year is Pending

Income Tax and 2003-2004 2,836,952 Income Tax Appellate

Tax Act, interest Tribunal

1961 2005-2006 226,581,290 Commissioner of

Income Tax (Appeals) 2006-2007 256,015,070 Commissioner of

Income Tax (Appeals) 2007-2008 287,299,694 Commissioner of

Income Tax (Appeals) Sub-total 772,733,006

Less: Refunds (34,202,040)

Adjusted *

Net Amount 738,530,966

Fringe Ben efit 2006-2007 741,728 Commissioner of

Tax Income Tax (Appeals)

* Refunds pertaining to other assessment years adjusted against disputed dues, based on intimations received from the Income Tax Department.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions.

(x) In our opinion and according to the information and explanations given to us,Therm loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained, other than temporary deployment pending application.

(xi) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, funds raised on short term basis have not been used during the year for long term investment.

(xii) To the best of our knowledge and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For Deloitte Haskins & Sells

CharThered Accountants (Registration No. 008072S)

Sriraman Parthasarathy

Partner New Delhi, May 29, 2010 (Membership No. 206834)

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