1.  Basis of Preparation of Financial Statements
 
 The financial statements have been prepared in compliance with all
 material aspects of the mandatory Accounting Standards issued by the
 ICAI and the relevant provisions of the Companies Act, 1956.
 
 Financial Statements are based on historical cost and are prepared on
 accrual basis.
 
 2.  Use of Estimates
 
 The preparation of financial statements requires estimates and
 assumptions to be made that affect the reported amount of assets and
 liabilities on the date of the financial statements and the reported
 amount of revenues and expenses during the reporting period. Difference
 between the actual results and estimates are recognized in the period
 in which the results are known/ materialized. Any revision to
 accounting estimates is recognized prospectively in current and future
 periods.
 
 3.  Fixed Assets and Depreciation
 
 (a) Fixed Assets are stated at cost net of cenvat, less accumulated
 depreciation. All cost, including financing cost till commencement of
 assets put to use, effect of foreign exchange contracts and adjustment
 arising from exchange rate variations attributable to the fixed assets
 are capitalised.
 
 (b) Expenditure including finance costs related to borrowed funds for
 the fixed assets incurred on projects under implementation are included
 under “Capital Work in Progress”. These expenses are transferred to
 fixed assets on commencement of respective projects.
 
 (c) (i) Depreciation on Shed & construction at contactor site is
 provided considering the period of the initial contract.
 
 (ii) Depreciation on Tanker & Office Building is provided on Written
 down Value Method as per the rate prescribed in Schedule XIV and in
 accordance with Section 205(2)(b) of the Companies Act, 1956.
 
 (iii) Depreciation on Fixed Assets other than stated above in Para (i)
 & (ii) is provided on Straight Line Method as per rate prescribed in
 Schedule XIV and in accordance with Section 205(2)(b) of the Companies
 Act, 1956, considering the life of the Asset..
 
 4.  Investments
 
 Investments that are intended to be held for more than a year, from the
 date of acquisition, are classified as Long Term Investments. Long Term
 Investments, Current Investments and Investments in subsidiaries are
 carried at cost. Unquoted investments are stated at book value.
 However, provision for diminution in value of investment is made to
 recognise a decline in the value of investment.
 
 5.  Debtors
 
 Debtors are stated at the book value after making provisions, if any,
 for the doubtful debts.
 
 6.  Inventories
 
 Inventories of spare parts and oil are valued at cost or market price
 whichever is lower.
 
 7.  Foreign Currency Transactions
 
 (a) Transaction denominated in foreign currencies are recorded at the
 exchange rate prevailing on the date of the transaction.
 
 (b) Monetary Items denominated in foreign currency including foreign
 currency loan at the year end are restated at the year end rate. In
 case of items which are covered by forward exchange contract, the
 difference between year end rate and rate on the date of the contract
 is recognised as exchange difference and premium paid on forward
 contracts and option contract is recognised over the life of the
 contract.
 
 (c) The difference either on settlement or on translation of monetary
 assets and liabilities and realised gain and losses on foreign exchange
 transaction are recognised in the Profit and Loss account except in
 cases where they relate to acquisition of Fixed Assets, the difference
 arising a result in which case they are adjusted to the carrying cost
 of such assets. Exchange rate difference on year end long term foreign
 currency loan is carried to “Foreign Currency Monetary Translation
 Difference Account” to be amortised upto the period of loan or upto
 March 31, 2012 whichever is earlier.
 
 (d) Non monetary foreign currency items if any are carried at cost.
 
 8.  Basis of Accounts
 
 Revenue/Income and costs/expenditures are generally accounted on
 accrual as they are earned or incurred.
 
 9.  Employee Benefit
 
 (a) Monthly contribution to the Provident Fund being in the nature of
 defined contribution scheme is charged against revenue. The fund is
 administered through Provident Fund Authority.
 
 (b) Post employment and other long term employees benefits are
 recognized at the present value of the amount payable determined using
 actuarial valuation techniques. Based on the actuarial valuation no
 provision of Gratuity is required to be made in respect of the post
 employment and other long term benefits.
 
 10.  Borrowing Cost
 
 Borrowing cost that are attributed to the acquisition, construction of
 qualifying assets are capitalised as part of such assets upto the date,
 assets are ready for its intended to use. All other borrowing costs are
 recognized as an expense in the year which they are incurred.
 
 11.  Tax on Income
 
 Current Tax is determined on the basis of the amount of tax payable in
 respect of taxable income for the year.
 
 Deferred tax is calculated at current statutory income tax rate and is
 recognized on timing differences; being the difference between taxable
 income and accounting income that originate in the one period and are
 capable of reversal in one or more subsequent periods. Deferred tax
 assets subject to the consideration of prudence, are recognized and
 carried forward only to the extent that there is a reasonable certainty
 that sufficient future taxable income will be available against which
 such deferred tax assets can be realized.
 
 12.  Income
 
 Company’s Income comprises of Work Over Rig Services, Gas Compression
 and Air Compression Services.
 
 13.  Provision, Contingent Liabilities and Contingent Assets.
 
 Provision is recognised when there is a present obligation as a result
 of a past event that probably requires an outflow resources and a
 reliable estimate can be made of the amount of the obligation.
 Disclosure for contingent liability is made when there is a possible
 obligation or a present obligation that may, but probably will not,
 require an outflow of resources. No provision is recognised or
 disclosure for contingent liability is made when there is possible
 obligation or a present obligation and the likelihood of outflow of
 resources is remote. Contingent Asset is neither recognized nor
 disclosed in the financial statements.