a.  Accounting Conventions
 
 The financial statements are prepared under the historical cost
 convention on accrual basis,in accordance with the requirements of the
 Companies Act, 1956 and in compliance with the applicable accounting
 standards referred to in sub- section (3C) of the section 211 of the
 said Act. The accounting policies, except stated otherwise, have been
 consistently applied by the Company.
 
 b.  Use of Estimates
 
 The presentations of financial statements is in conformity with the
 generally accepted accounting principles which requires estimates and
 assumptions to be made that affect the reportable amount of assets and
 liabilities on the date of financial statements and the reportable
 amount of revenue and expenses during the reporting period. Differences
 between the actual results and estimates are recognised in the year in
 which the results are known / materialized.
 
 c.  Fixed Assets
 
 Fixed Assets are stated at cost less accumulated depreciation and
 impairment losses, if any. Cost comprises the cost of acquisition /
 purchase price inclusive of duties, taxes, incidental expenses,
 erection/commissioning expenses, interest etc.  up to the date the
 asset is ready for its intended use. Credit of duty, if availed, is
 adjusted in the acquisition cost of the respective fixed assets.
 
 Capital Works-in-Progress is carried at cost, comprising direct cost,
 related incidental expenses and interest on borrowings to the extent
 attributed to them including capital advances.
 
 d.  Depreciation
 
 Depreciation on Fixed Assets is provided on pro-rata basis, for the
 period of use, on written down value method on the Fixed Assets
 acquired and capitalised up to 31/03/2007 and on Straight Line method
 on assets acquired and capitalised from 01/04/2007 on wards at the
 rates prescribed under Schedule XIV to the Companies Act, 1956, as
 amended till date.
 
 Cost of leasehold land is amortised over the period of lease.
 
 Assets costing upto Rs.10,000/- are fully depreciated in the year of
 acquisition.
 
 e.  Impairment of Assets
 
 At each balance sheet date, the Company assesses whether there is any
 indication that an asset is impaired. If any such indication exists,
 the Company estimates the recoverable amount. If the carrying amount of
 the asset exceeds its recoverable amount, an impairment loss is
 recognized in the profit and loss account to the extent the carrying
 amount exceeds recoverable amount.
 
 f.  Investments
 
 Investments are classified as long term or current based on the
 Management intention at the time of purchase. Long-term investments are
 valued at their acquisition cost. Current investments are stated at
 lower of cost and fair market value. The provision for any diminution
 in the value of long- term investments is made only if such a decline
 is other than temporary in the opinion of the management.
 
 g.  Inventories
 
 Stores, Spares and other items required for operation are treated as
 consumed as and when sent to drilling rig. Stocks in hand are valued at
 cost or net realisable value, whichever is lower. Cost in respect of
 Stores & Spares is determined on FIFO basis.
 
 h.  Revenue Recognition
 
 Revenue is recognized in accordance with Accounting Standard (AS-9)
 Revenue recognition on the basis of rendering of services to
 customers in accordance with the respective Contracts / Agreements.
 
 Interest income is recognized on a time proportion basis taking into
 account the amount outstanding and the rate applicable.
 
 i.  Employee Benefits
 
 (a) Short term employee benefits are recognised as an expense at the
 undiscounted amount in the profit and loss account of the year in which
 the related service is rendered.
 
 (b) Post employment and other long term benefits are recognised as an
 expense in the profit and loss account for the year in which the
 employee has rendered services. The expense is recognised at the
 present value of the amounts payable determined using actuarial
 valuation techniques at the end of Financial Year. Actuarial gains and
 losses in respect of post employment and other long term benefits are
 charged to the profit and loss account.
 
 (c) Payment to defined contribution retirement benefit scheme, if any,
 are charged as expenses as they fall due.  
 
 j.  Foreign Currency Transactions
 
 (i) Recognition
 
 International Transactions are recognised on the basis of International
 Commercial principles in regard to those transactions wherever
 applicable. Foreign currency transactions during the year are accounted
 for in the reporting currency at the exchange rates prevailing on the
 date of the respective transaction in accordance with the Revised
 Accounting Standard 11 (read with the notification no. GSR 225 (E)
 dated 31-3-2009) for The Effects of Changes in Foreign Exchange
 Rates.
 
 (ii) Conversion
 
 All monetary assets and liabilities remaining unsettled at the year-end
 are translated using the year end exchange rates.
 
 Any income or expenses on account of exchange difference either on
 settlement or on translation is recognised in the profit & loss account
 except exchange differences arising on foreign currency monetary items
 relating to acquisition of fixed assets, which is adjusted to the
 carrying amount of such assets.
 
 (iii) Non-monetary items are carried at cost.
 
 (iv) Forward Exchange Contracts
 
 In case of forward contracts taken for underlying transactions, the
 exchange differences are dealt-with, in the Profit & Loss Account over
 the period of the contracts. All derivative contracts including forward
 contracts, other than those contracts covered under AS-11 (The effect
 of change in foreign exchange rates), are recognised pursuant of the
 announcement of Institute of Chartered Accountants of India and other
 appropriate authorities. Accordingly these are marked to market on
 balance sheet date and shortfall if any, is recognised in the profit &
 loss account.
 
 k.  Borrowing Cost
 
 Borrowing costs directly attributable to the acquisition or
 construction of the qualifying assets are capitalised as a part of the
 cost of asset up to the date when such asset is ready for its intended
 use. Other borrowing costs are recognised as an expense in the period
 in which they are incurred.
 
 I.  Taxation:
 
 Current Tax:
 
 Provision forTaxation is ascertained on the basis of assessable profit
 computed in accordance with the provisions of Income Tax Act, 1961 &
 tax advices, wherever considered necessary.
 
 Deferred Tax:
 
 Deferred Tax is recognised, subject to the consideration of prudence,
 as the tax effect of timing difference between the taxable income &
 accounting income computed for the current accounting year and reversal
 of earlier years'' timing difference.
 
 Deferred Tax Assets are recognised and carried forward to the extent
 that there is a reasonable certainty, except arising from unabsorbed
 depreciation and carry forward losses, which are recognised to the
 extent that there is virtual certainty, that sufficient future taxable
 income will be available against which such deferred tax assets can be
 realised.
 
 Fringe Benefit Tax:
 
 Fringe Benefit tax has been withdrawn by the Government wef 1 st April,
 2009. Hence, effective from 1 st April, 2009 it is not applicable.
 
 m.  Miscellaneous Expenditure:
 
 Preliminary Expenses, if any, are written off over a period of five
 years in equal instalments.
 
 n.  Leases
 
 Office Premises taken on lease under which, all risks and rewards of
 ownership are effectively retained by the lessor are classified as
 operating lease. Lease payments under operating lease are recognized as
 expense on accrual basis in accordance with the respective lease
 agreements.
 
 o.  Claims Recoverable
 
 The claims in respect of fixed assets lost during the process of
 drilling (lost in hole) are recognised on the basis of invoices raised
 and correspondingly the depreciated value of the fixed assets lost in
 hole is charged off. Any deductions made from the claims raised are
 recognised on receipt of intimation in respect of the same.
 
 p.  Prepaid Expenses
 
 Prepaid expense is not recognised in cases where total amount spent is
 Rs.10,000/- or less. Such expenses are charged to profit and loss
 account.
 
 q.  Event Occurring after the Balance Sheet Date
 
 Events occurring after the Balance Sheet Date and till the date on
 which the Financial Statement are approved, which are material in the
 nature and indicate the need for adjustments are considered in the
 financial statement.
 
 r.  Provisions, Contingent Liabilities and Contingent Assets
 
 Provisions involving substantial degree of estimation in measurement
 are recognized when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 
 Liabilities which are material, and whose future outcome cannot be
 ascertained with reasonable certainty, are treated as contingent, and
 disclosed by way of notes to the accounts.
 
 Contingent Assets are neither recognized nor disclosed in the financial
 statement. Provisions, Contingent Liabilities and Contingent Assets are
 reviewed at each Balance Sheet date.
 
 s.  Mobilisation Charges:
 
 Mobilisation charges received from the Rig Operator Companies and paid
 to the Rig owning companies are allocated over the contract period
 proportionately.