Asian Oilfield Services

The Directors have great pleasure in presenting the Companys 15th
 Annual Report. The Companys financial results for the year ended 30th
 June, 2008 are as follows:
 
 Financial highlights
                                                     (Rs. in lacs)
                                               (15 months)  (12 months)
 
 Gross income                                     4793.59     2759.75
 
 Gross profit before depreciation & interest      1705.33      872.59
 
 Depreciation                                      204.28       65.58
 
 Interest and financial charges                    102.00       49.88
 
 Profit before tax                                1399.05      757.13
 
 Less: Provision for tax
 
 Current tax                                       286.00      245.69
 
 Fringe benefit tax                                  4.65        2.44
 
 Deferred tax liability                            112.12        0.00
 
 Net profit after tax & other adjustments          996.27      509.00
 
 Appropriation
 
 Transfer to general reserves                      962.24      419.64
 
 Balance brought forward from previous year        620.25      200.61
 
 Balance carried to Balance Sheet                 1582.49      620.25
 
 Dividend
 
 With a view to plough back the available surpluses in asset creation
 for the purpose of business consolidation, the Board has not
 recommended payment of | dividend to the shareholders during the year
 under review.
 
 Operations
 
 During the 15 months period under review, your Company registered
 significant improvement in its performance by fetching a Rs. 4,793.59
 lacs gross income, compared with Rs.  2,759.75 lacs in the previous
 year and a net profit of Rs. 996.27 lacs against Rs.509.00 lacs of the
 previous year.
 
 With its increased net worth and stronger pre-qualification capability
 the Company could bid for and win larger projects. It secured a Rs.
 71.86-crore order from Oil India Limited for 2D seismic data
 acquisition in Mizoram, a Rs 44.55- crore order from ONGC Limited
 Jorhat for 2D seismic data acquisition in Nagaland and a Rs.
 15.17-crore order from ONGC Limited Vadodara for providing integrated
 seismic job services and shot hole drilling services for 2007-08 and
 2008-09. The Company has successfully completed Rs. 46.10 crores
 contracted work so far and is working to complete the awarded work as
 per the schedule over the coming period.
 
 The Board hopes to achieve still better performance over the coming
 years, barring unforeseen circumstances.
 
 Creation of wholly-owned subsidiary in Singapore With a view to promote
 its overseas business related to oil and gas exploration, extraction
 and providing oilfield related services, the Company has created a
 wholly- owned subsidiary—AOSL Petroleum Pte Limited—in Singapore
 
 Investment in overseas operation
 
 The Company has invested USD 4.99 million in August 2008 through its
 wholly owned subsidiary AOSL Petroleum Pte. Limited into Ensearch
 Petroleum Limited, Singapore. Ensearch Petroleum Limited is into oil
 and gas exploration and production, having participating interest in
 portfolio of 10 assets with net combined acreage of around 40,000 sq.
 km and has operating offices in India, Nigeria and Jordan with
 corporate offices in India and Singapore.
 
 By this investment, the Company has entered the upstream exploration
 activities, and would get access to over 10 blocks with high prospects
 of discovery across the world, The company also sees this investment as
 a significant step towards building its international seismic data
 acquisition business and will jointly work with Ensearch to further
 pursue business opportunities outside India and benefit from each
 others capabilities.
 
 Preferential issue of equity shares and convertible warrants With a
 view to meet its long-term fund requirements to continue embark upon
 its on going expansion activities and provide for enhanced working
 capital requirements, the Company issued and allotted 15,00,000 equity
 shares and 7,50,000 convertible warrants to M/s.  Samara Capital
 Partners Fund I Limited, Mauritius and 4,50,000 warrants to other
 investors at a prices of Rs 190 each, and 40,62,900 convertible
 warrants to Promoters and other Non- Promoters strategic investors at a
 price of Rs 76 each.
 
 Directorate
 
 Mr. Navinbhai Patel retires by rotation, and being eligible, offers
 himself for re- appointment. With a view to expand the Board and to
 avail the expertise in the Oil Industry, Mr. Vikram Walia has been
 appointed as an Additional Director. As per the investment agreement
 entered into with M/s. Samara Capital Partners Fund I Limited,
 Mauritius, Mr. Sumeet Narang has been appointed as their Nominee
 Investor Director on the Companys Board of Directors.
 
 Profile of Mr. Vikram Walia: Vikram completed his graduation from
 Harvard College, USA. He has over 18 years of experience and has worked
 with Shell and StatOil, Norway and is currently the CEO of Punj Lloyd
 Upstream Ltd. He is helping Asian Oil with its international
 initiatives and has been instrumental in charting out the offshore
 seismic strategy.
 
 Profile of Mr. Sumeet Narang: Prior to founding Samara Capital in late
 2006, Mr. Sumeet briefly worked at Goldman Sachs, New York, in their
 Proprietary Investments Group. He also has experience with Citigroups
 private equity business in India and Citigroups corporate and
 investment banking business, where he was the head of the business for
 the State of Andhra Pradesh, based out of Hyderabad. He also has worked
 with the Fiat group in Italy and India. Mr. Sumeet earned a Masters in
 Business Administration from the Harvard Business School, where he
 graduated as a Baker Scholar and John Loeb fellow. He also earned a
 Masters in Business from Indian Institute of Management, Lucknow (IIM),
 where he was an Aditya Birla Scholar and a B.E. in Mechanical
 Engineering from Indian Institute of Technology (IIT), Roorkee, where
 he received a University Blue for outstanding contribution to the
 Universitys squash team of which he was the captain Considering their
 competence, proven track record, rich experience and business acumen,
 the Board hopes that their association as Directors, would immensely
 benefit the Company.
 
 Directors responsibility statement
 
 In terms of Section 217 (2AA) of the Companies Act, 1956, the Directors
 would like to state that;
 
 i) in the preparation of the annual accounts, the applicable accounting
 standards have been followed.
 
 ii) they have selected such accounting policies and applied them
 consistently and made judgments and estimates that were reasonable and
 prudent so as to give a true and fair view of the Companys state of
 affairs at the end of the financial year and of the profit of the
 Company for the year under review.
 
 iii) they have taken proper and sufficient care for the maintenance of
 adequate accounting records in accordance with the provision of this
 Act for safeguarding the Companys assets and preventing and detecting
 fraud and other irregularities.
 
 iv) they have prepared the annual accounts on a going concern basis.
 
 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 along with the Management Discussion and Analysis
 Report are annexed hereto and form a part of this report (Annexure -
 A).
 
 Dematerialisation of shares
 
 The Company has been allotted ISIN No.  INE276G01015 for its equity
 shares by National Securities Depository Ltd.  (NSDL) and Central
 Depository Services Ltd (CDSL). Members are requested to dematerialize
 shares held by them for their better convenience.
 
 Audit Committee
 
 In compliance of Section 292A of the Companies Act, 1956, an Audit
 Committee consisting of Mr D.E. Ilavia, Mr N.M. Patel, and Mr (Dr.)
 Bhupendra Shah (from 12th October, 2007), Independent Directors as its
 members, performed inter-alia, various functions as required in terms
 of the said provisions.
 
 Statutory disclosures
 
 The Company is engaged in providing oil and gas exploration related
 service on various sites, hence the disclosures as required under
 Section 217(l)(e) of the Companies Act, 1956, are not applicable.
 However, information in accordance with the provision of Section 217
 C2-A1 of the Companies. Act, 1956, read together with the Companies
 (Particulars of Employees) Rules, 1975, as amended, regarding
 particulars of employees, are set out in Annexure B to this report.
 
 During the year under review, details of foreign exchange inflow and
 outflow are as under.
 
 a. Foreign exehange earnings                    Rs. 17,47,60,500
 
 Seisrnic survey and other related charges
 b. Foreign exchange outgo towards
 
 (i) Traveling expense                               Rs. 2,94,823 
 (ii) Equipment                                   Rs. 9,54,59,311
 (iii) Revenue payment                            Rs. 4,79,51,236
 
 Auditors
 
 The Auditors M/s. K. Parikh & Co. retire at the conclusion of the
 ensuing Annual General Meeting, but do not offer themselves for
 re-appointment.
 
 The Company has received a letter from M/s. Deloitte Haskins & Sells,
 chartered accountants, Vadodara, stating that their appointment as
 statutory auditors, if made, would be well within the ceiling
 prescribed under Section 224(1B) of the Companies Act, 1956.
 
 Members are requested to consider their appointment as Auditors of the
 Company in place of retiring auditors and fix their remuneration.
 
 Public deposits
 
 The Company has not accepted any deposits from the public under Section
 58A of the Companies Act, 1956, during the period under review.
 
 Insurance
 
 All the properties of the Company are adequately insured against fire
 and other risks.
 
 Appreciations
 
 The Board places on record its deep appreciation for the contribution
 received from Oil & Natural Gas Corporation Limited, Oil India Limited,
 GeoEnpro Petroleum Limited, Geophysical Institute of Israel and the
 continued support received from State Bank of India , government
 authorities, employees at all levels and shareholders in furthering the
 Companys interest.
 
                                       For and on behalf of the Board,
 
 Date : 30th August, 2008                                Krishna Kant
 Place: Baroda                                     Executive Chairman