You are here » Home » Companies » Company Overview » Oil India Ltd

Oil India Ltd.

BSE: 533106 Sector: Oil & Gas
NSE: OIL ISIN Code: INE274J01014
BSE LIVE 12:38 | 17 Oct 346.30 -1.25
(-0.36%)
OPEN

349.85

HIGH

349.85

LOW

344.05

NSE 12:21 | 17 Oct 344.85 -3.10
(-0.89%)
OPEN

348.20

HIGH

349.65

LOW

343.55

OPEN 349.85
PREVIOUS CLOSE 347.55
VOLUME 6559
52-Week high 367.43
52-Week low 258.00
P/E 9.86
Mkt Cap.(Rs cr) 26,201
Buy Price 345.60
Buy Qty 33.00
Sell Price 346.30
Sell Qty 153.00
OPEN 349.85
CLOSE 347.55
VOLUME 6559
52-Week high 367.43
52-Week low 258.00
P/E 9.86
Mkt Cap.(Rs cr) 26,201
Buy Price 345.60
Buy Qty 33.00
Sell Price 346.30
Sell Qty 153.00

Oil India Ltd. (OIL) - Auditors Report

Company auditors report

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying standalone financial statements of OIL INDIALIMITED ("the Company") which comprise the Balance Sheet as at 31st March2016 the Statement of Profit and Loss the Cash Flow Statement for the year then endedand Significant Accounting Policies and Additional Notes.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act and other applicable authoritative pronouncements issued by theInstitute of Chartered Accountants of India. Those Standards and pronouncements requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

OPINION

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2016 and its profit and its cash flows for the year ended on that date.

EMPHASIS OF MATTER

We draw attention to the following matters in the Notes to the standalone financialstatements:

a) Note 3.3 to the financial statements which specifies about repayment andservicing of overseas borrowings from domestic resources based on management opinion.

b) Note 32.12(b) to the financial statements which describes uncertainty regardingpayment related to the demand for Royalty raised by Director of Geology and Mines Assamfor 2008-09 to 2013-14 amounting to `7224.20 crore and further estimated liability of`2525.35 crore upto 31st March 2016 considered as contingent liability.

Our opinion is not modified in respect of these matters.

OTHER MATTERS

The attached financial statements include Company's share of net fixed assets netcurrent assets expenses and incomes aggregating to Rs 530.15 crore Rs (-)70.21 crore Rs237.63 crore and Rs 0.51 crore respectively as at 31 March 2016 in respect of thirteen ofits unincorporated Joint Ventures the accounts of which have been audited by the auditorsof the respective Joint Ventures.

The attached financial statements include Company's share of net fixed assets netcurrent liabilities expenses and incomes aggregating to Rs 324.57 crore Rs 96.73 croreRs 389.78 crore and Rs 46.68 crore respectively as at 31 March 2016 in respect ofseventeen of its unincorporated Joint Ventures the accounts of which have not beenaudited and have been incorporated based on financial statements prepared and certified bythe Management.

The audited and unaudited financial statements of the above unincorporated jointventures are prepared to meet requirements of production sharing contracts and are specialpurpose statements and none of the statements audited as well as unaudited are drawn upin the same format as presented by the Company and we did not audit the financialstatements/financial information of seventeen unaudited Joint Ventures included as above.

Our opinion is not modified in respect of these matters.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. With respect to the other matters to be included in the Auditor's Report interms of the directions of the Comptroller and Auditor-General of India (C&AG) underSection 143 (5) of the Act and on the basis of our examination of the books and recordsof the Company carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we give in theAnnexure 'A' and Annexure 'B' statement on the matters specified in the Directions andSub-directions of C&AG respectively.

2. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act and on the basis of our examination of the books and records ofthe Company carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we give in theAnnexure 'C' a statement on the matters specified in paragraphs 3 and 4 of the Order.

3. As required by Section 143 (3) of the Act we report that:

(a) We have sought and obtained all the information and explanations whichto 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 theCompany so far as it appears from our examination of those books.

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

(d) In our opinion the aforesaid standalone financial statements complywith the Accounting Standards specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directorsas on 31st March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms of Section164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls asrequired under Section 143 (3)(i) of the Act refer to our separate report in Annexure D.

(g) With respect to the other matters to be included in the Auditor's Reportin accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in ouropinion 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 financialposition in its standalone financial statements Refer Note 32.15 I (i)(a) and 32.15 I(i)(b) to the standalone financial statements.

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

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

For A.K.SABAT & CO. For N.C. BANERJEE & CO.
Chartered Accountants Chartered Accountants
Firm Regn. No: 321012E Firm Regn. No: 302081E
Sd/- Sd/-
(CA A.K.SABAT) (CA B.K.BISWAS)
Partner Partner
Membership No.: 030310 Membership No.: 055623
Place : Noida
Date : 27.05.2016

ANNEXURE A TO THE INDEPENDENT AUDITORS’ REPORT

Statement on the matters specified in the Directions of CAG as referred in Paragraph 1of Report on Other Legal and Regulatory Requirements paragraph of our report of even dateto the members of OIL INDIA LIMITED on the Standalone Financial Statements for the yearended 31st March 2016

No. Direction Reply
1 Whether the Company has clear title/ lease deeds for freehold and leasehold land respectively? If not please state the area of freehold and leasehold land for which title/ lease deeds are not available. The Company has a clear title/ lease deeds for freehold and leasehold land respectively except in respect of 15763.93 bighas of freehold land. Further 3821.29 bighas of freehold land are pending for Mutation. (refer note 11.2 to the financial statements).
2 Whether there are cases of waiver / write-off of debts / loans / interest etc. if yes the reasons thereof and the amount involved. During the year there are cases of Well write off of Rs 454.61 crore due to absence of prospect and unsuccessful drilling of the Wells. There is also a case of receivables written off of Rs 0.91 crores due to non recovery of CST on sale of LPG.
3 Whether proper records are maintained for inventories lying with third parties & assets received as gift/ grant(s) from Govt. or any other authorities. The Company has maintained proper records for inventories lying with third parties. The Company has not received any assets as gift from Govt or any other authorities.

 

For A.K.SABAT & CO. For N.C. BANERJEE & CO.
Chartered Accountants Chartered Accountants
Firm Regn. No: 321012E Firm Regn. No: 302081E
Sd/- Sd/-
(CA A.K.SABAT) (CA B.K.BISWAS)
Partner Partner
Membership No.: 030310 Membership No.: 055623
Place : Noida
Date : 27.05.2016

ANNEXURE B TO THE INDEPENDENT AUDITORS’ REPORT

Statement on the matters specified in the Additional Directions of C&AG as referredin Paragraph 1 of Report on Other Legal and Regulatory Requirements paragraph of ourreport of even date to the members of OIL INDIA LIMITED on the Standalone FinancialStatements of the Company for the year ended 31st March 2016

No. Direction Reply
I The accounting treatment of income/ expenditure and receivables/ liabilities arising from agreements/ contracts including JVs for exploration of Oil/Gas may be examined to ensure that they are strictly in conformity with the terms and conditions of the respective Production Sharing Contract (or similar arrangements including Joint Venture) The accounting treatment of income/expenditure and receivables/liabilities arising from agreements/contracts including JVs for exploration of Oil/Gas have been examined and found that they are strictly in conformity with the terms and conditions of the respective Production Sharing Contract (or similar arrangements including Joint Ventures)
II It may be verified that the expenditure incurred before obtaining the right(s) to explore develop and produce oil and gas have been booked under pre-acquisition costs. It may also be verified that these costs are expensed as and when incurred and the practice is done in a consistent manner in respect of all the units. We have verified and found that the expenditure incurred before obtaining the right(s) to explore develop and produce oil and gas have been booked under pre-acquisition costs. We have also verified that these costs are expensed as and when incurred and the practice is done in a consistent manner in respect of all the units. Please also refer Note no. 1.3.1 of Significant Accounting Policies
III It may be verified that the acquisition cost relating to projects under exploration or development are initially accounted for as capital work-in-progress and then capitalised by transferring to Producing Property when a well is ready to commence commercial production. It may also be ensured that such costs are written-off in case of abandonment/ relinquishment. We have verified and found that the acquisition cost relating to projects under exploration or development are initially accounted for as capital work-in-progress and then capitalised by transferring to Producing Property when a well is ready to commence commercial production. It is also verified that such costs are written-off in case of abandonment /relinquishment. Please also refer Note no. 1.3.4 of Significant Accounting Policies.
IV It may be verified that the Company is having a clear title and maintaining proper records in respect of land along with full disclosures with respect to cost computation (historical or revalued cost) and ownership (freehold or leasehold land) Read with Note no. 11.2 of Financial Statements we have verified and found that the Company is having a clear title except in respect of 15763.93 bighas of freehold land. Further 3821.29 bighas of freehold land are pending for Mutation. The Company is maintaining proper records in respect of land along with full disclosures with respect to cost computation (historical or revalued cost) and ownership (freehold or leasehold land).

 

For A.K.SABAT & CO. For N.C. BANERJEE & CO.
Chartered Accountants Chartered Accountants
Firm Regn. No: 321012E Firm Regn. No: 302081E
Sd/- Sd/-
(CA A.K.SABAT) (CA B.K.BISWAS)
Partner Partner
Membership No.: 030310 Membership No.: 055623
Place : Noida
Date : 27.05.2016

ANNEXURE ‘C’ TO THE AUDITORS’ REPORT

The Annexure C referred to in paragraph 2 of Report on Other Legal and RegulatoryRequirements paragraph of our report of even date to the members of OIL INDIA LIMITED onthe Standalone Financial Statements of the Company for the year ended 31st March 2016.

(i) (a) The Company has generally maintained proper records showing full particularsincluding quantitative details and situation of fixed assets;

(b) As explained to us the fixed assets have been physically verified by the Managementin phased manner designed to cover all items over a period of five years. No materialdiscrepancies have been noticed on such verification;

(c) As per information and explanations given to us the title deeds of immovableproperties are held in name of the Company except in respect of 15763.93 bighas offreehold land pending transfer of title deeds. Further 3821.29 bighas of freehold land arepending for Mutation.

(ii) Inventories have been physically verified by the Management during the year.However inventories of stores and spare parts (excluding stock in transit and/or underinspection with suppliers/contractors) have been physically verified by the Management ina phased manner. The frequency of verification is reasonable. No material discrepancieshave been noticed on physical verification.

(iii) The Company has granted unsecured loans to parties covered in the registermaintained under section 189 of the Companies Act 2013 ("the Act"). In respectof aforesaid loans:

(a) The terms and conditions under which such loans were granted are not prejudicial tothe Company’s interest;

(b) The schedule of repayment of principal and interest has been stipulated and therepayments or receipts are as per stipulation; and

(c) There is no amount which is overdue for more than ninety days.

(iv) In respect of loans investments guarantees and security given or provided provisions of Section 185 and 186 of the Companies Act 2013 wherever applicable havebeen complied with;

(v) The Company has not accepted deposits from the public. Hence the direction issuedby the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the Rules framed thereunder are not applicable to the Company.As explained to us no order has been passed by the Company Law Board or National CompanyLaw Tribunal or Reserve Bank of India or any court or any other tribunal in this regard;

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of the cost records undersub-section (1) of Section 148 of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have not however madea detailed examination of the records maintained as aforesaid.

(vii) (a) The Company is regular in depositing undisputed statutory dues includingprovident fund employees’ state insurance income tax sales tax wealth taxservice tax duty of customs duty of excise value added tax cess and any otherstatutory dues as applicable to it with the appropriate authorities. According to theinformation and explanations given to us there were no outstanding statutory dues as on31st of March 2016 for a period of more than six months from the date they became payableexcept for the following:

Name of the Statute Nature of Dues Period to which the amount relates (Financial year) (in Rs Crores)
Assam VAT Act 2005 VAT on Transportation of Crude Oil 2009-10 to 2015-16 39.04 (including interest of Rs 14.18 crore)

(b) Details of disputed dues in respect of income tax or sales tax or wealth tax orservice tax or duty of customs or value added tax or cess and any other statutory dueswhich have not been deposited on account of any dispute are given below:

Name of the Statute Nature of Dues Period to which the amount relates (Financial year) Amount Forum where Dispute is Pending
(in Rs Crores)
Central Excise Act 1944 Demand for non payment of duty as oil cess NCCD and education cess 2011-12 to 2014-15 20.57 CESTAT New Delhi
December’2008 to December’2009 14.27
January’2010 to December’2010 12.01
Central Excise Act Excise Duty January’2011 to December’ 2011 17.47 CESTAT
1944 January’2012 to June’2012 20.93 Kolkata
July’2012 to December’2012 10.48
January’2013 to June’2013 9.81
April’2011 to December’2011 40.42
January’2012 to September’2012 13.45
Finance Act 1994 Service Tax October’2012 to March’2013 6.59 CESTAT
July’2008 to March’2009 0.30 Kolkata
April’2009 to March’2010 0.40
Assam General Sales Tax Act 1993 CST and VAT April’2005 to March’2006 8.41 Assistant Commissioner of Taxes Assam
Assam VAT Act 2005 Assam VAT 2009-10 to 2012-13 1327.74 Commissioner of Taxes Assam
Income Tax Act 1961 Income Tax 2007-08 & 2008-09 2.18 High Court Rajasthan

(viii) The Company has not defaulted in repayment of loans or borrowings to anyfinancial institution bank Government or dues to debenture holders;

(ix) In our opinion and according to information and explanations given to us theCompany has not raised any money by way of initial public offer or further public offer(including debt instruments) during the year. The term loans were applied for the purposesfor which those were raised;

(x) Based on the audit procedures performed and the information and explanations givento us we report that no fraud on or by the Company has been noticed or reported duringthe year;

(xi) The Company has paid or provided for managerial remuneration in accordance withrelevant approvals mandated by the provisions of Section 197 read with Schedule V to theAct;

(xii) As the Company is not a Nidhi company Nidhi Rules 2014 are not applicable to itand accordingly the reporting under clause 3(xii) of the Order is not applicable;

(xiii) The Company has entered into transactions with related parties in compliancewith the provisions of Sections 177 and 178 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under AccountingStandard 18- Related Party Disclosures specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014;

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Accordinglythe reporting under clause 3(xiv) of the Order is not applicable;

(xv) Based on our examination of books and accounts and as per information andexplanations given to us the Company has not entered into any non cash transactions withdirectors or persons connected with him. Therefore reporting under para 3 (xv) of theOrder is not applicable; and Accordingly

(xvi) As per information and explanations given to us the Company is not required tobe registered under Section 45-IA of the Reserve Bank of India Act 1934. Accordinglyreporting under para 3 (xvi) of the Order is not applicable.

For A.K.SABAT & CO. For N.C. BANERJEE & CO.
Chartered Accountants Chartered Accountants
Firm Regn. No: 321012E Firm Regn. No: 302081E
Sd/- Sd/-
(CA A.K.SABAT) (CA B.K.BISWAS)
Partner Partner
Membership No.: 030310 Membership No.: 055623
Place : Noida
Date : 27.05.2016

ANNEXURE D TO THE INDEPENDENT AUDITORS’ REPORT

The Annexure D referred to in paragraph 3(f) of Report on Other Legal and RegulatoryRequirements paragraph of our report of even date to the members of OIL INDIA LIMITED onthe Standalone Financial Statements for the year ended 31st March 2016.

We have audited the internal financial controls over financial reporting of Oil IndiaLimited("the Company") as of 31st March 2016 in conjunction with our audit ofthe financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for laying down and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Standards on Auditing to the extent applicable to an audit of internal financialcontrols and the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

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

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's 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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

Other Matters

Attention is invited regarding no independent directors having been appointed till dateafter 2nd Sep 2015 by the Central Government resulting in non-compliance of certainprovisions of the Act as well as SEBI (Listing Obligation & Disclosure Requirements)Regulations 2015 as to composition of Board of Directors Audit Committee CSR Committeeand Nomination & Remuneration Committee as part of proper corporate governance.

Our opinion is not modified in respect of this matter.

For A.K.SABAT & CO. For N.C. BANERJEE & CO.
Chartered Accountants Chartered Accountants
Firm Regn. No: 321012E Firm Regn. No: 302081E
Sd/- Sd/-
(CA A.K.SABAT) (CA B.K.BISWAS)
Partner Partner
Membership No.: 030310 Membership No.: 055623
Place : Noida
Date : 27.05.2016