Asian Oilfield Services

1.  We have audited the attached Balance Sheet of ASIAN OILFIELD
 SERVICES LTD. (the Company) as at 30th June, 2008 and also the Profit
 and Loss Account and Cash Flow Statement for the period ended on that
 date, annexed thereto. 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 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 from material misstatement. An audit also
 includes examining, on 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
 opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 issued
 by the central Government of India in terms of sub-section (4A) of
 section 227of the companies act, 1956, we annex hereto a statement on
 the matter specified in paragraphs 4 and 5 of the said order.
 
 4.  Further to our comments in the Annexure referred to in paragraph
 (3) above, we state that:
 
 a.  we have obtained all the information and explanations, which are 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 appears from our examination of
 those books.
 
 c.  The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 d.  In our opinion, the balance sheet, Profit & 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 company
 Act, 1956;
 
 e.  On the basis of the written representations received from the
 directors, as on 30th June, 2008, and taken on record by the Board of
 Directors, We report that non of the directors of the company are
 disqualified as on June 30, 2008 from being appointed as a director, in
 terms of clause (g) of sub-section (1) of section 274 of the Companies
 Act, 1956 as amended by Companies Amendment Act 2000.
 
 f.  In our opinion and to the best of our information and according to
 the explanation given to us, the said accounts, read together with the
 notes thereon, 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:
 
 i) in the case of Balance Sheet, of the state of affairs of the Company
 as at 30th June, 2008
 
 ii) in the case of Profit and Loss Account, of the profit of the
 Company for the period ended on that date; and
 
 iii) in the case the Cash Flow Statement, of the cash flows for the
 period ended that date.
 
 Annexure to the Auditors Report
 
 (Referred to in paragraph 3 of our Report of even date on the accounts
 of ASIAN OILFIELD SERVICES LTD for the year ended June 30, 2008)
 
 I) a) The Company is maintaining proper records to show full
 particulars, including quantitative details and situation of fixed
 assets.
 
 b) According to information and explanations given to us, the company
 has programme of physically all its fixed assets over a period of three
 years which in our opinion is reasonable having regard to the size of
 the company and the nature of its fixed assets. In accordance with this
 programme, some of the fixed assets were physically verified by the
 management during the period. Discrepancies noticed on such
 verification between the physical balances and the fixed assets records
 were not material and have been properly belt with in the books of
 accounts.
 
 c) The company has not disposed off a substantial part of the fixed
 assets during the year.
 
 II) a) During the period, the inventories have been physically verified
 by the management. In our opinion the frequency of the verification is
 reasonable.
 
 b) In our opinion and according to the information and explanation
 given to us, the procedures of physical verification of inventories
 followed by the management are reasonable and adequate in relation to
 the size of the company and the nature of its business.
 
 c) On the basis of our examination of the records of the inventories,
 we are of the opinion that, the company is maintaining proper records
 of inventories the discrepancies noticed on physical verification of
 inventories has compared to book records were not material and have
 been properly dealt with in the books of accounts.
 
 III) According to information and explanations given to us, the company
 has neither taken nor granted any loan secured or unsecured from / to
 companies, firms and other parties covered in the register maintained
 under section 301 of the Companies Act, 1956. Accordingly, paragraphs
 4(iii)(b), (c) and (d) of the Order are not applicable
 
 IV) In our opinion and according to the information and explanations
 give to us, there are adequate internal control procedures commensurate
 with the size of the Company and the nature of its business with regard
 to purchase inventory, fixed assets and with regard to sale of goods
 during the course of our audit, we have not observed any continuing
 failure to correct major weaknesses in the internal control.
 
 v) In our opinion, and according to the information and explanation
 given to us, there are no transactions of purchase of goods and
 materials and sale of goods, materials and services made in pursuance
 of contracts or arrangements entered in the register maintained under
 section 301 of the Companies Act, 1956 and exceeding the value of
 rupees five lakh or more in respect of any party.
 
 vi) The company has complied with the provisions of the section 58A and
 58AA of the Companies Act, 1956 and the Companies (Acceptance of
 deposits) Rules, 1975 with regard to the deposits accepted from the
 public.
 
 vii) In our opinion, the company has an adequate internal system
 commensurate with its size and nature of its business.
 
 viii) We have been informed that the Central Government has not
 prescribed maintenance of cost records under section 209(1) (d) of the
 Companies Act, 1956.
 
 ix) According to the information and explanations given to us and on
 the basis of records produced before us, the company is generally
 regular in depositing with appropriate authorities undisputed statutory
 dues including provident fund , investor education protection fund,
 income tax, sales tax, wealth tax, custom duty, excise duty, Cess and
 other material statutory dues applicable to it.
 
 According to the information and explanations given to us, no
 undisputed arrears of statutory dues were outstanding as on September
 30, 2008 for a period of more then six months from the date they became
 payable.
 
 X) The Company has no accumulated losses and have not incurred cash
 losses during the current financial year and in the immediately
 preceding financial year.
 
 xi) In our opinion, and according to the information and explanation
 given to us the Company has not defaulted in repayment of dues to any
 financial institution or bank. As at the balance sheet date
 
 xii) The company has not granted any loans or advances on the basis of
 the security by way of pledge of shares, debentures and other
 securities.
 
 xiii) As the company is not a chit fund/ nidhi / mutual benefit fund /
 society to which the provisions of special statute relating to chit
 fund are applicable, paragraph 4 (xiii) of the CARO, 2003, is not
 applicable.
 
 xiv) As the company is not dealing or trading in shares, securities,
 debentures and other investment, paragraph 4(xiv) of the Order is not
 applicable.
 
 xv) We are informed that during the period, the Company has not given
 any guarantee for loans taken by others from banks or financial
 institutions.
 
 xvi) In our opinion, and according to the information and explanation
 given to us, the terms loan taken by the company has been applied for
 the purposes for which they were obtained.
 
 xvii) According to the information and explanation given to us and on
 an over all examination of the balance sheet of the company, we report
 that during the period short term fund have not been use to finance
 long term investment and vice versa.
 
 xviii) The company has issued share warrants at different rates and
 from these share warrants made preferential allotment of 34,52,900
 equity shares to the applicants which are approved and decided in Extra
 Ordinary General Meeting.
 
 xix) The company has not issued debentures during the period.
 
 xx) The company has not raise money by way of public issue during the
 period.
 
 xxi) On the basis of our examination and according to the information
 and explanation given to us no fraud on or by the company, has been
 noticed or reported during the course of audit.
 
                                               For K. Parikh & Co.
                                            Chartered Accountants
 
 Place: Baroda                                         J.O.Parikh
 Date : 30th August, 2008                              Proprietor
                                            Membership No.: 12404