Mercator Lines

Dear Shareholders,
 
 At the outset; it has been yet another eventful year at Mercator; fast
 tracking growth and sustain ability by exigent expansions and prudent
 diversifications. Your company undertook expansion to broad base
 offerings to the customers; and diversification to take on newer
 opportunities on the horizon.
 
 May I share with you the firsts, Mercator embarked upon this year. Your
 company forayed into Dredging – another highly promising sector; and
 integrated backwards by diversifying into coal mining. Opportunities in
 these areas are infinite; will ensure growth over medium to even long
 term. The offshore segment appears firmer, having employed one jack-up
 rig already.
 
 In shipping segment, the fleet expansion continued this year as well
 keeping the tradition of growth. Our consolidated capacity increased by
 15% to 2.34 Million DWT. In addition to the capacity; the type and age
 of vessels were once again rationalized to improve market access.  Your
 company demonstrated a solid all round performance; top line growth
 being 39% and bottom line grew by about 196%.
 
 Mercator Lines (Singapore) Ltd – the Singapore based subsidiary got
 listed on main board of Singapore Stock Exchange successfully this year
 after maiden IPO, raising USD 143 million. It is already the second
 largest shipping company in Singapore now; obviously the numbers are
 simply indicative.
 
 Our customer base has been growing continually. Several names of
 international repute find mention on our order books; such as Arcelor
 Mittal; Cosco and Petronas to name but a few.
 
 Your company continued its pursuit to continually improve and remain a
 world class organization by recognizing human capital as its real
 assets. A holistic and systemic approach has been taken to spearhead
 sustainability initiatives towards ensuring safety, quality, our
 responsibility towards environment and society at large.
 
 We shall continue to endeavor, in all possible ways, to constantly and
 consistently return long term value to you, our shareholders. We truly
 realize the enormity of responsibility arising out of your unwavering
 support and confidence bestowed on us. We are sure of the path and the
 direction your company is headed towards.
 
                                              Thank You, Yours sincerely
                                                            H. K. Mittal
 Mumbai June 29, 2007