The term volatility has long been associated with the shipping
 industry and in the recent years, it has clearly defined the course of
 the bulk shipping business.
 
 The key issue faced by the industry is the relentless fleet addition
 that is taking place in both the dry bulk as well as the tanker sector.
 To absorb this kind of fleet addition, we will either need to see more
 aggressive scrapping of older ships or a meaningful pickup in tonne
 mile demand.
 
 In addition to the pressure from the supply side, the industry is also
 constantly facing short term volatility in freight rates on account
 of geopolitical tensions as well as weather disruptions. The ongoing
 crisis in the MENA (Middle East & North Africa) region and the floods
 in Australia are typical examples of this. Such incidents cause further
 downward pressure on freight rates leading, in some instances, to
 earnings at levels that barely cover operating costs. This kind of an
 environment has been deeply challenging and has seriously impacted the
 financial health of many ship-owners globally.
 
 For the last couple of years, I have been emphasizing the need for your
 company to brace itself for tough times ahead whilst recognizing the
 need to stride ahead with a view to creating long-term shareholder
 value. I am happy to report that your company has steered the course
 admirably with this vision in mind.
 
 On the shipping portfolio, the company has adopted a ‘wait and watch
 mode whilst it has expanded more aggressively in its offshore business.
 Today, the shipping portfolio constitutes approximately 60% of your
 companys business while the offshore business, in a short span of
 about 5 years, constitutes the balance 40%. Within the next 18 months
 or so and basis our committed expansion, the offshore portfolio of your
 company will nose ahead of the shipping portfolio in terms of capital
 employed. The strategic investment made by your company in its oil and
 gas subsidiary (Greatship (India) Limited) has now started delivering
 fruitful results. This year, this business has added Rs.211.22 crores
 to our consolidated net profit providing a return in excess 18% on our
 investment in this business in equity as well as preference shares.
 
 Over the next 2 years, Greatship (India) Limited will be adding an
 additional 7 new state-of-the-art vessels together with a newly built
 jack-up rig to add to an already existing fleet of 17 multifaceted
 support vessels and 2 jack-up rigs. With the oil prices hovering around
 USD 100 per barrel mark, the global E&P activities worldwide are
 expected to significantly gain momentum providing exciting
 opportunities for your company. With a view to capitalize on these
 opportunities, your company is entering into new territories clinching
 landmark deals to create its image as a world-class offshore oil field
 support and logistic company.
 
 For the financial year 2010-11, your company recorded a net profit of
 Rs.468.70 crores on a consolidated basis. The companys cash and cash
 equivalent on a consolidated basis amounted to Rs.3,125 crores
 resulting in a net debt equity ratio of 0.47:1 as on 31st March 2011.
 Keeping in mind this comfortable debt to equity position, the Board of
 Directors declared a total dividend of Rs.8/- per share for the year
 thereby significantly enhancing its pay-out ratio.
 
 I take this opportunity to thank all our customers for their unstinted
 support extended during these extraordinary times.  Needless to say,
 sailing through these rough seas would not have been possible without
 the dedication and faith exhibited by all my colleagues both on shore
 and on board particularly so in meeting their paramount objective of
 safety of life, cargo and environment. Finally, I am, as ever, grateful
 to the Government of India as well as the regulatory authorities for
 their continuous support.
 
 With warm regards,
 
 K. M. Sheth
 
 Executive Chairman