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Directors Report of Asian Oilfield Services Ltd.

Mar 31, 2014

Dear Members,

The Directors are pleased to present the 21st Annual Report and the Company''s audited accounts for the financial year ended March 31, 2014:

1. Consolidated Financial Highlights:

(Rs. in millions) Particulars 31 March, 2014 31 March, 2013

Gross Income 1,252.98 559.96

Operating Profit before Depreciation and Interest 9.95 30.00

Depreciation 141.45 88.17

Profit/(Loss) before interest, tax and exceptional items (131.50) (58.17)

Interest 94.69 31.86

Profit/(Loss) before tax and exceptional items (226.19) (90.03)

Exceptional items 7.82 13.84

Tax expenses 0.25 (0.92)

Net Loss after tax and exceptional items for the period from continuing operations 234.27 102.95

2. Dividend

In view of loss incurred, the Board regrets its inability to recommend payment of dividend to the shareholders.

3. Credit Rating

CRISIL has revised its rating for the Company on the long term Bank facilities to ''Stable'' from ''Negative'' while re- affirming the rating at BB for long term Bank facility and A4 for short term Bank facility. Strong credit rating by leading credit rating agency reflect the Company''s financial discipline and prudence.

4. Operations in Retrospect

During the year under review, consolidated revenue from operation increased to Rs. 1252.98 million as against Rs. 555.96 million in the corresponding period of the previous year. Loss before tax stood at Rs. 226.21 million as compared to Rs. 90.03 million in the previous year, whereas the loss after tax rose to Rs. 234.27 as compared to loss of Rs. 102.95 million registered in the previous year.

5. Operational highlights

During the financial year 2013-14, Asian Oilfield has made significant gains in terms of execution of its strategy to grow the overseas business. We were awarded our first large 3 D job in Kurdistan in Northern Iraq. During the execution on this contract, Asian achieved a few significant milestones and also created a world record that was acknowledged by our customers. Some of the notable achievements include:

a. Deployment of Asian Oilfield''s largest ever 3D crew.

b. First ever Vibroseis operation.

c. First ever Crew outside of the US to deploy in excess of 4000 real time wireless remote units.

d. Holder of the world record for the largest active Real time Spread ever deployed by any Seismic company.

In India, the activity continued to be low and sporadic. Asian Oilfield continued its Job Services Contract for ONGC in Western India.

After the successful Completion of the 3D work, additional 2D Vibroseis work was awarded by Gazprom and this was successfully completed in the third quarter of 2013.

In the Last quarter of 2013, a significant 3D project was awarded to AOSL in OIL SEARCH in Kurdistan, to acquire over 500 Square Kms of 3D data. Preparations are underway to complete the mobilisation and commence operations. This survey will further challenge the capabilities of AOSL and its success will go a long way in establishing us a major regional player in the Middle East and South Asian Region.

6. Future Outlook

There have been a few interesting developments in the global landscape. With the success in gas production in shale and the also in the Gulf of Mexico, US has been steadily reducing its dependency on imports and the trend line is very clear. Since 1949, for the very first time, US has become a net exporter of Petroleum Products in 2011.

Due to the ''Arab Spring'', there have been disruptions in the production levels of the North African countries such as Libya, Algeria and Egypt. The political disruptions have slowed down the onshore exploration activity and the major Oilfield services companies have significantly reduced their operations. Iraq continues to be unstable and has experienced disruption in its exploration activities.

Kurdistan, in North Iraq, has managed to maintain peace and calm in the region under its control. This has led to a rise in the seismic programs being tendered.

The tentative uptick of economic activity in the US and Europe is unlikely to push up crude oil prices significantly. Moderating growth in China could put downward pressure on crude prices. In absence on any adverse geopolitical event, average monthly crude prices are likely to trend lower than the average price in last 12 months.

However, Organisation of Petroleum Exporting Countries (OPEC) may lower its output as it has done in the past, in the face of moderation in crude price. While global crude prices could slip below USD100/bbl in some instances, it is unlikely to remain at such levels for a sustained period. Hence, there appears to be stability in the short to medium term scenario.

In line with our strategy, AOSL in the Middle East market is aggressively looking to consolidate its position in Iraq and Egypt. The aim is to strengthen our presence in Iraq and sequentially grow the business by optimal utilisation of existing assets. However, given the volatile nature of the Middle East region, we are also planning to diversify into East African and south / Far East markets.

In the Post Election India, there are signs of the exploration picking up pace. This could result in a higher than normal exploration activity and could potentially spur the demand for good quality seismic services in the onshore domain. We have established a strong sales and Operations team in India to ensure that we are ready to take advantage of any the growing exploration activity.

7. Report on Corporate Social Responsibility:

The Company embraces responsibility for impact of its operations and actions on all stakeholders including society and community at large. Management''s commitment, work ethics and business processes at the Company encourages all its employees and other participants to ensure a positive impact and its commitment towards corporate social responsibility.

The Company''s commitment to excellence in Health and Safety is embedded in the Company''s core values. The Company has a stringent policy of ''safety for all'', which drives all employees to continuously break new ground in safety management for the benefit of people, property, environment and the communities where we operate on sites. The Company is aware of the environmental impact of its operations and it continually strives to reduce such impact.

The Company respects human rights, values its employees and invests in technologies and solutions for economic growth. The Company has initiated to support social and community welfare activities touching the lives of people around the project locations and ensuring the highest standards of safety and environment protection in our operations.

8. Health Safety and Environment (HSE):

Asian Oilfield Services Limited has put emphasis on HSE as its prime focus in the business. The Company''s HSE Management system (HSE-MS) has been reinforced and rolled out with new initiatives. The HSE-MS is used to establish Company-wide safety management objectives, guiding principles and processes.

The Company has a stringent policy / motto of "NO ONE GETS HURT" which in turn drives our employees to continuously break new grounds in safety management for the benefit of the people, property, environment and the communities where we operate.

The Company''s commitment to excellence in HSE is embedded in the Company''s core values while at the same time ensuring the highest standards of safety and environment protection in our operations.

9. Consolidated Financial Statement

In accordance with the Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statement is provided in the Annual Report.

10. Subsidiaries

Details of major subsidiaries of the Company and their business operations during the year under review are covered in the Management''s Discussion and Analysis Report. In accordance with the General Circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. However, the financial information of the subsidiary companies is disclosed in the Annual Report in compliance with the said circular. The Company will provide a copy of separate annual accounts in respect of each of its subsidiary to any shareholder of the Company who asks for it and the said annual accounts will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies.

11.Board of Directors:

In terms of Section 152 of the Companies Act, 2013 and in terms of Article 125 of Articles of Association of the Company, Mr. Sanjay Bhargava, Director retires at the ensuing Annual General Meeting. The Company has received requisite notice in writing from members proposing Mr. Sanjay Bhargava for appointment as Director of the Company.

The Company has, pursuant to the provisions of Clause 49 of the Listing Agreements entered into with Stock Exchanges, appointed Mr. Naresh Chandra Sharma, Mr. Ajit Kapadia and Mr. Rabi Narayan Bastia as Independent Directors of the Company. The Company has received declarations from the said Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under the said Clause 49. In accordance with the provisions of Section 149(4) and proviso to Section 152(5) of the Companies Act, 2013, these Directors are being appointed as Independent Directors to hold office as per their tenure of appointment mentioned in the Notice of the forthcoming AGM of the Company.

The Board of Directors at their meeting held on 12th August, 2014 appointed Mr. Ashwin Madhav Khandke as an Additional Director on the Board in terms of Section 152 of the Companies Act, 2013 read with Article No. 114 of Articles of Association of the Company. Mr. Ashwin Madhav Khandke holds office upto the date of ensuing Annual General Meeting. The Company has received requisite notice in writing along with deposit from members proposing Mr. Khandke for appointment as a Director of the Company.

Mr. Ashwin Madhav Khandke is also appointed as Wholetime Director of the Company for a further period of 3 years with effect from 12th August, 2014 and the necessary resolution in this regard is being proposed at the ensuing Annual General Meeting for the approval of the members.

A brief note on Directors retiring by rotation and eligible for appointment and re-appointment as a Director as well as Independent Directors being appointed, is furnished in the Report on Corporate Governance.

12. Directors'' Responsibility Statement

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

i) in the preparation of the annual accounts for the year ended March 31, 2014, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same;

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the Loss of the Company for the year ended on that date;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

13. Management''s Discussion and Analysis Report

Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

14. Auditors and Auditors'' Report

Deloitte Haskins & Sells, Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re- appointment.

The Company has received letters from all of them to the effect that their re - appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment.

The Notes on Financial Statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

15. Secretarial Audit Report

As a measure of good corporate governance practice, the Board of Directors of the Company appointed Mr. Jayesh Vyas, Practicing Company Secretary, to conduct the Secretarial Audit. The Secretarial Audit Report for the financial year ended March 31, 2014, is provided in the Annual Report.

The Secretarial Audit Report confirms that the Company has complied with all the applicable provisions of the Companies Act, 1956, the 98 sections of the Companies Act, 2013 notified vide Ministry of Corporate Affairs Gazette Notification No. S.O. 2754(E) dated September 12, 2013, the Securities Contracts (Regulation) Act,1956, Depositories Act, 1996, the Foreign Exchange Management Act, 1999 to the extent applicable to Overseas Direct Investment (ODI) and Foreign Direct Investment (FDI), all the Regulations and Guidelines of SEBI as applicable to the Company, including the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, Listing Agreement with the BSE Limited and the Memorandum and Articles of Association of the Company.

16. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988, are provided in Annexure II to this Report.

17. Corporate Governance

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally.

The Report on corporate governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the aforesaid Clause 49, is attached to the Report on corporate governance.

18. Listing of Securities:

The Company''s equity shares are listed on the BSE Limited. The annual listing fee for the financial year 2013-14 has been paid to BSE.

19. Insurance:

All the properties of the Company are adequately insured against fire and other risks.

20. Appreciations:

The Board places on record its deep appreciation for the continued support received from various clients, vendors and suppliers and technical partners, Bankers, Government Authorities, Employees at all levels and Shareholders, in furthering the interest of the Company

For and on behalf of the Board,

Date: 12.08.2014 Naresh Chandra Sharma Place: Mumbai Chairman


Mar 31, 2013

Dear Shareholders,

The Directors have pleasure in presenting the 20th Annual Report and the audited accounts for the year ended March 31, 2013:

1. Financial Highlights [Rupeesin millions]

March 31, 2013 March 31, 2012

Gross Income 544.34 458.05

Operating Profit/(Loss) before Depreciation and Interest 38.19 (16.75)

Depreciation 88.14 85.15

Profit before interest, tax and exceptional items (49.95) (101.90)

Interest 30.67 23.44

Profit/(l_oss) before tax and exceptional items (80.62) (125.34)

Exceptional items 13.84 7.39

Tax expenses (0.92) (42.29)

Net Loss after tax and exceptional items for the period from 93.54 90.44 continuing operations

2. Dividend

In view of the losses incurred, the Board regrets its inability to recommend payment of dividend to the Shareholders.

3. Operations in Retrospect

During the year under review, revenue from operations increased by 18.84% to Rs.544.34 million as against Rs.458.05 million in the corresponding period of the previous year. The Company''s loss before tax stood at Rs.80.62 million as compared to a loss of Rs.125.34 million in the previous year, whereas the Loss after Tax rose to Rs.93.54 million as compared to a loss of Rs.90.44 million registered in the previous year.

4. Operational highlights

During the year under review, the Company secured two contracts in India - one from GeoEnpro for carrying out 3D seismic data acquisition in its operational block in Arunachal Pradesh and from ONGC for seismic job services in their operational block in Gujarat. The Company executed 7 projects during the period under review, comprising three for seismic data acquisition in Arunachal Pradesh, Manipur and Tripura, two for job services in Gujarat, one for CBM coring in Madhya Pradesh, two for mineral drilling in Rajasthan and Tamil Nadu. Four projects were completed during the year and three projects were under execution at the year-end, two of which is expected to be completed in the first and last quarter of financial year 2013-14. The projects completed during the year included a seismic data acquisition project in Tripura for Jubilant, CBM coring for Reliance Industries in Madhya Pradesh and mineral drilling for zinc in Rajasthan and uranium in Tamil Nadu for Hindustan Zinc Limited and ONGC, respectively.

5. Future Outlook

The Indian economy started off in 2012 with a lot of promise continuing the high growth of the previous years.

However, weaker currency, higher domestic inflation, high interest rates, weak external demand and risk adverse sentiments have prevented the emerging and developing economies from returning to a higher growth trajectory.

The economic slowdown persisting for last couple of years continued in the year 2012. The Indian economy grew at its slowest pace in a decade in 2012-13. Data released by the Central Statistical Organization (CSO) showed that the economy grew 5% in 2012- 13, compared to 6.2% expansion in the previous year. It was in line with the advanced estimates of the government in its mid-year Economic Review, released earlier where it had indicated estimated growth ranging between 5.7% and 5.9%.

Global economic slowdown, depressed sentiments, high interest rates, moderation in credit growth and a deceleration in growth of investment also contributed to the reduction in growth of industrial sector.

Improvement in investment climate is a pre-requisite for economic recovery. Several measures are expected to be announced that will boost investment, reduce inflation and fiscal deficit.

There has been a modest improvement in the global financial condition ensuring reduced short term risks; however, the overall financial climate has not picked up the momentum of recovery. From a global outlook, the US experienced a moderate growth, while the Eurozone continued to be in a vulnerable position with high risks of banking system meltdown and unresolved debt crisis issues. The emerging economies such as the BRIC countries did not pace up to last fiscal year''s growth; however, other emerging nations including developing Asia showed promising growth.

Despite the fragile economic environment, the Indian Oil & Gas Sector is poised for growth.

Energy is essential for economic growth and, in the absence of viable alternatives in the foreseeable future, demand for petroleum products is expected to rise. On the demand side, over the past few years, we have observed the progressive shift in oil demand away from OECD (Organization for Economic Co- operation and Development) countries towards non-OECD countries led by Asian countries. For the first time, during the next calendar year, i.e. 2013, it is expected that non-OECD oil demand will overtake OECD demand led by strong demand growth for petroleum products from the Chinese, Middle Eastern and Indian economies.

On the supply side, OECD has been registering steady growth with increase in Canadian and US production. The reduction in Iranian production is largely taken care of by increase in production from Libya, Iraq and Saudi Arabia.

The oil and gas sector in India is a critical component of the country''s economy, accounting for 15 per cent of the country''s gross domestic product (GDP). Economic growth is directly linked with energy demand, and a conservative estimate of 7 per cent growth is expected to double India''s per capita energy consumption from 560 kilograms of oil equivalent (kgoe) in FY10to 1,124 kilograms of oil equivalent (kgoe) by FY32. As oil and gas is one of the main sources to meet the required demand for energy in India, its demand is forecast to rise further.

Whilst the strong demand and import dependency makes it imperative for India to focus on increasing the production, the oil & gas sector will to encounter a challenging environment during the next financial year as well. The present economic environment provides for a far more muted growth rate and profitability in comparison to the heydays that the industry had witnessed a few years back.

6. Board of Directors:

Mr. Avinash Manchanda and Mr. N.C. Sharma are retiring by rotation and being eligible, offer themselves for reappointment.

A brief note on Directors being appointed / re-appointed are furnished in the accompanying notice calling the Annual General Meeting as required under Clause 49(IV) (G) of the Listing Agreement entered into with Bombay Stock Exchange Ltd.

7. Directors'' Responsibility Statement:

In terms of Section 217 (2AA) of the Companies Act, 1956, the Directors would like to state that

i) the applicable accounting standards have been followed in the preparation of the annual accounts.

ii) accounting policies have selected and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give true and fair view of the Company''s state of affairs at the end of the financial year, 2012-13 and of the loss of the Company for the year under review.

iii) proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provision of this Act for safeguarding the Company''s Assets and preventing and detecting fraud and other irregularities.

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

8. Management Discussion and Analysis:

Pursuant to Clause 49 of the Listing Agreement with the Bombay Stock Exchange Ltd., Management Discussion and Analysis Report are given separately, forming part of this Report.

9. Corporate Governance:

A separate section titled "Corporate Governance" including a certificate from the Practicing Company Secretary confirming the compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed hereto and form part of this report.

10. Report on Corporate Social Responsibility:

The Company embraces responsibility for impact of its operations and actions on all stakeholders including society and community at large. Management''s commitment, work ethics and business processes at the Company encourages all its employees and other participants to ensure a positive impact and its commitment towards corporate social responsibility.

The Company''s commitment to excellence in Health and Safety is embedded in the Company''s core values. The Company has a stringent policy of ''safety for all'', which drives all employees to continuously break new ground in safety management for the benefit of people, property, environment and the communities where we operate on sites. The Company is aware of the environmental impact of its operations and it continually strives to reduce such impact.

The Company respects human rights, values its employees and invests in technologies and solutions for economic growth. The Company has initiated to support social and community welfare activities touching the lives of people around the project locations and ensuring the highest standards of safety and environment protection in our operations.

11. Health Safety and Environment (HSE):

Asian Oilfield Services Limited has put emphasis on HSE as its prime focus in the business. The company''s HSE Management system (HSE-MS) has been reinforced and rolled out with new initiatives. The HSE-MS is used to establish Company-wide safety management objectives, guiding principles and processes.

The company has a stringent policy / motto of "NO ONE GETS HURT" which in turn drives our employees to continuously break new grounds in safety management for the benefit of the people, property, environment and the communities where we operate. The Company''s commitment to excellence in HSE is embedded in the company''s core values while at the same time ensuring the highest standards of safety and environment protection in our operations.

12. Subsidiary Companies and Consolidated Financial Statements:

The Company has three Wholly Owned Subsidiary Companies under the name of AOSL Petroleum Pte. Limited, Singapore; Asian Offshore Pvt. Ltd., India and Asian Oilfield and Energy Services DMCC, Dubai. There has been no material change in the nature of business of the subsidiary companies. A statement containing brief financial details of the subsidiary companies, are included in the Annual Report.

As required under the Listing Agreement with the Bombay Stock Exchange Ltd. and Companies Act, 1956, a Consolidated Financial Statement of the Company and its subsidiaries, are attached. The Consolidated Financial Statements have been prepared in accordance with the relevant Accounting Standards as prescribed under Section 211(3C) of the Companies Act, 1956 ("Act").

These financial statements disclose the assets, liabilities, income, expenses and other details of the Company and its subsidiaries.

Pursuant to the provision of Section 212(8) of the Act, the Ministry of Corporate Affairs vide its circular dated February 8, 2011 has granted general exemption from attaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies with the Balance Sheet of the Company. A statement containing brief financial details of the Company''s subsidiary for the financial year ended March 31, 2013, is included in the Annual Report. The annual accounts of the subsidiary and the related detailed information will be made available to any member of the Company for inspection at the registered office of the Company. The Company shall furnish a copy of details of annual accounts of subsidiary companies to any member on demand.

13. Dematerialization of Shares:

The Company has been allotted ISIN No. INE276G01015 for its Equity Shares by National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL). Members are requested to Dematerialize Shares held by them for their convenience.

14. Audit Committee:

In compliance of Section 292A of the Companies Act, 1956 and Listing Agreement with the Bombay Stock Exchange Ltd., an Audit Committee has been constituted with Mr. Naresh Chandra Sharma, Mr. Rabi Bastia and Mr. Ajit Kapadia, the Independent

Directors and Mr. Gautam Gode, the Promoter Director as its members and it performed inter-alia, various functions as required in terms of the said provisions.

15. Statutory Disclosures:

i) Personnel:

Information under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, forms part of this report. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Report and the Accounts is being sent to all shareholders of the Company excluding the aforesaid information. Shareholders interested in obtaining this information may write to the Company Secretary at the Registered Office of the Company.

ii) Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

As required under Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of the Board of Directors ) Rules, 1988, statement showing particulars with respect to conservation of energy, technology absorption and foreign exchange earnings and out go, is given in the enclosed Annexure - A.

16. Employees Stock Option Scheme: (ESOP)

During the year, no new options have been granted under the ESOP.

17. Auditors, Audit Report and Audited Accounts:

The Auditors M/s. Deloitte Haskins & Sells retire at the conclusion of the ensuing Annual General Meeting, but being eligible, offer themselves for re- appointment.

The Auditors'' Report read with the notes to the accounts referred to therein, are self-explanatory and therefore, do not call for any further comments.

18. Public Deposits:

During the period under review, the Company has not accepted any deposits under Section 58A of the Companies Act, 1956.

19. Listing of Securities:

The Company''s equity shares are listed on the Bombay Stock Exchange Limited (BSE). The annual listing fee for the financial year 2013-14 has been paid to BSE.

20. Insurance:

All the properties of the Company are adequately insured against fire and other risks.

21. Appreciations:

The Board places on record its deep appreciation for the continued support received from various clients, vendors and suppliers and technical partners, Bankers, Government Authorities, Employees at all levels and Shareholders, in furthering the interest of the Company.

For and on behalf of the Board,

Naresh Chandra Sharma

Chairman Date: 14 08 2013

Place: Gurgaon


Mar 31, 2012

The Directors have pleasure in presenting the 19th Annual Report and the audited accounts for the year ended March 31, 2012.

1. Financial Highlights : (Rs. in million)

March 31, 2012 March 31, 2011

Gross Income 458.05 672.00

Gross Profit / (Loss) before Depreciation & Interest (16.75) 99.37

Depreciation 85.15 86.27

Interest and Financial Charges 23.43 9.97

Profit / (Loss) before Tax (125.34) 3.13

Less : Exceptional Item 7.39 69.81 Tax Expense

-Short Provision of Current Tax in earlier years - (0.04)

-Deferred Tax Liability (42.37) 1.57

- Wealth Tax 0.08 0.03 Net Profit / (Loss) for the period from continuing operation (90.44) (68.29)

2. Dividend:

In view of loss, the Board regrets its inability to recommend payment of dividend to the Shareholders.

3. Operations in Retrospect:

During the year under review, revenue from operations dipped by 31.84% to Rs. 458.05 million as against Rs. 672.00 million in the corresponding period of the previous year. The Company's loss before tax stood at Rs.125.34 million as compared to a profit of Rs.3.13 million in the previous year, whereas the Loss after Tax rose to Rs.90.44 million as compared to a loss of Rs.68.23 million registered in the previous year.

4. Operational highlights

During the year under review, the Company secured two new contracts from Jubilant Oil & Gas Private Limited for acquisition and processing of seismic data in their operational blocks in Manipur and from Oil and Natural Gas Corporation Limited for seismic job services for their operational blocks in western onshore. Also, the Company secured a second extension of an existing contract for seismic data acquisition from Jubilant Oil & Gas Private Limited for their operational blocks in Tripura.

In its mineral drilling activity, the Company introduced directional drilling technology for Indian Metals & Ferro Alloys Limited (IMFA) and Hindustan Zinc Limited (HZL) in Mineral Drilling and completed drilling and geophysical logging of ten core holes successfully for Oil and Natural Gas Company Limited (ONGC) in complex sub-surface geological formation, where other contractors failed to complete a single hole under the same contract. The Company was able to operate its rigs efficiently reducing downtime and ensuring better supply chain management. Mineral core drilling experience of the company paved the way for CBM drilling. The company secured a contract from Reliance Industries Limited during the year, despite competition from three experienced competitors. Innovative techniques used for non-coring portion up to depths of 400m resulted in substantial cost saving. The Company completed eight wells in less than six months ahead of deadline, resulting in extension of contract. The Company now qualifies for all future exploratory drilling and geophysical logging tenders released by Government and private companies

5. Future Outlook :

Over the past five years India's economy has continued to grow at a moderate pace despite slowdown in major global economies. The Indian economy grew at a rate of 8.2% in the Eleventh Five Year Plan fuelled by strong domestic demand, increased investment in infrastructure and strong capital inflows. However, in the past year the growth rate has tapered off. In FY 2011-12, the GDP grew at 6.9% as against 8.4% in FY 2010-11.

High oil prices shaved off much of the nation's GDP growth rate. More than half of India's total export earnings went into buying petroleum, particularly, crude imports in 2011-12, thereby seriously impacting the country's overall economy. For the past five years, the petroleum imports have been equivalent to almost 40 per cent of the total exports made by India in the past six years. For the year, 2011-12, the figure is at an astonishing high of 51.2 per cent. The crude oil imports have not increased only because of price increase in the last several years. In quantitative terms also, these imports have shown a rising trend. The quantity of petroleum imports has increased from 82 million tonnes in 2002-03 to 164 million tons in 2010-11. Simultaneously, the average price of crude oil has also been rising over the years barring 2009- 10.

However, with the crude prices falling in the international market, the equation is expected to change in the on-going financial year of 2012-13.

In the long term, the growth story remains intact with India entering a phase of significant demographic divide, rising urbanization, growing consumerism and increasing infrastructure investment. Under the current scenario, the Twelfth Five Year Plan (2012-17) is being developed to support a growth of 8%. Assuming normal monsoons, robust industrial growth and resilient performance of the service sector, GDP in FY 2012-13 is expected to grow about 7%.

The growing demand for oil is expected to fuel investment by oil exploration companies resulting in business opportunities for companies in the seismic data acquisition processing and interpretation space.

6. Board of Directors :

Mr. Sumeet Narang and Mr. Dali E. Ilavia retire by rotation and being eligible, offer themselves for reappointment.

Mr. Rahul Talwar, the President and CEO was appointed as an Additional Director

at the meeting the Board of Directors held on May 21, 2012. He has been appointed as the Whole time Director for a period of 3 years, effective from May 21, 2012, on the terms and conditions as are enumerated in the Agreement, subject to the approval of the Shareholders .

A brief note on Directors being appointed / re-appointed are furnished in the accompanying notice calling the Annual General Meeting as required under Clause 49(IV) (G) of the Listing Agreement entered in to with Bombay Stock Exchange Ltd.

7. Directors' Responsibility Statement :

In terms of Section 217 (2AA) of the Companies Act, 1956, the Directors would like to state that

i) the applicable accounting standards have been followed in the preparation of the annual accounts.

ii) accounting policies have selected and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give true and fair view of the Company's state of affairs at the end of the financial year and of the loss of the Company for the year under review.

iii) proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provision of this Act for safeguarding the Company's Assets and preventing and detecting fraud and other irregularities.

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

8. Management Discussion and Analysis :

Pursuant to Clause 49 of the Listing Agreement with the Bombay Stock Exchange Ltd., Management Discussion and Analysis Report is given separately, forming part of this Report.

9. Corporate Governance :

A separate section titled "Corporate Governance" including a certificate from the Practicing Company Secretary confirming the compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed hereto and form part of this report.

10. Report on Corporate Social Responsibility :

The Company embraces responsibility for impact of its operations and actions on all stakeholders including society and community at large. Management's commitment, work ethics and business processes at the Company encourages all its employees and other participants to ensure a positive impact and its commitment towards corporate social responsibility.

The Company's commitment to excellence in Health and Safety is embedded in the Company's core values. The Company has a stringent policy of 'safety for all', which drives all employees to continuously break new ground in safety management for the benefit of people, property, environment and the communities where we operate on sites.

The Company is aware of the environmental impact of its operations and it continually strives to reduce such impact.

The Company respects human rights, values its employees and invests in technologies and solutions for economic growth. The Company has initiated to support social and community welfare activities touching the lives of people around the project locations and ensuring the highest standards of safety and environment protection in our operations.

11. Health Safety and Environment (HSE):

Asian Oilfield Services Limited has put emphasis on HSE as its prime focus in the business. The company's HSE Management system (HSE-MS) has been reinforced and rolled out with new initiatives. The HSE-MS is used to establish Company-wide safety management objectives, guiding principles and processes.

The company has a stringent policy / motto of "NO ONE GETS HURT" which in turn drives our employees to continuously break new grounds in safety management for the benefit of the people, property, environment and the communities where we operate. The Company's commitment to excellence in HSE is embedded in the company's core values while at the same time ensuring the highest standards of safety and environment protection in our operations.

12. Subsidiary Companies and Consolidated Financial Statements :

The Company has two Wholly Owned Subsidiaries Companies under the names of M/s. AOSL Petroleum Pvt. Ltd, Singapore and M/s. Asian Offshore Pvt. Ltd.(incorporated on October 18, 2011) There has been no material change in the nature of business of the subsidiary companies. A statement containing brief financial details of the subsidiary companies, are included in the Annual Report.

As required under the Listing Agreements with the Bombay Stock Exchange Ltd., a Consolidated Financial Statement of the Company and its subsidiaries, are attached. The Consolidated Financial Statements have been prepared in accordance with the relevant Accounting Standards as prescribed under Section 211 (3C) of the Companies Act, 1956 ("Act"). These financial statements disclose the assets, liabilities, income, expenses and other details of the Company and its subsidiaries.

Pursuant to the provision of Section 212(8) of the Act, the Ministry of Corporate Affairs vide its circular dated February 8, 2011 has granted general exemption from attaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies with the Balance Sheet of the Company. A statement containing brief financial details of the Company's subsidiary for the financial year ended March 31, 2012, is included in the Annual Report. The annual accounts of the subsidiary and the related detailed information will be made available to any member of the Company for inspection at the registered office of the Company. The Company shall furnish a copy of details of annual accounts of subsidiary companies to any member on demand.

13. Dematerialization of Shares :

The Company has been allotted ISIN No. INE276G01015 for its Equity Shares by National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL). Members are requested to Dematerialize Shares held by them for their convenience.

14. Audit Committee :

In compliance of Section 292A of the Companies Act, 1956 an Audit Committee has been constituted with Mr. Naresh Chandra Sharma, Mr. Dali E. Ilavia and Mr. Ajit Kapadia, the Independent Directors and Mr. Gautam Gode, the Promoter Director as its members and it performed inter-alia, various functions as required in terms of the said provisions.

15. Statutory Disclosures :

i) Personnel:

Information under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, forms part of this report. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Report and the Accounts is being sent to all shareholders of the Company excluding the aforesaid information. Shareholders interested in obtaining this information may write to the Company Secretary at the Registered Office of the Company.

ii) Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo :

As required under Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of the Board of Directors ) Rules, 1988, statement showing particulars with respect to conservation of energy, technology absorption and foreign exchange earnings and out go, is given in the enclosed Annexure - A.

16. Employees Stock Option Scheme (ESOS) :

During the year, no new options have been granted under the ESOS.

17. Auditors, Audit Report and Audited Accounts :

The Auditors M/s. Deloitte Haskins & Sells, retire at the conclusion of The ensuing Annual General Meeting, but being eligible, offer themselves for re- appointment.

The Auditors' Report read with the notes to the accounts referred to therein, are self-explanatory and therefore, do not call for any further comments.

18. Public Deposits :

During the period under review, the Company has not accepted any deposits under Section 58A of the Companies Act, 1956 .

19. Listing of Securities :

The Company's equity shares are listed on the Bombay Stock Exchange Limited (BSE). The annual listing fee for the financial year 2012-13 has been paid to BSE.

20. Insurance :

All the properties of the Company are adequately insured against fire and other risks.

21. Appreciations :

The Board places on record its deep appreciation for the continued support received from various clients, vendors and suppliers and technical partners, Bankers, Government Authorities, Employees at all levels and Shareholders, in furthering the interest of the Company.

For and on behalf of the Board,

Date : May 30, 2012 Naresh Chandra Sharma

Place : Mumbai Chairman

 
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