Dear Shareholders, 
 Ladies and Gentlemen,
 
 On behalf of the Board of Directors and on my personal behalf, I extend
 very warm greetings to all of you. May I also compliment all the
 esteemed shareholders on the occasion of the Golden Jubilee of your
 Company. The Directors'' Report describes, in detail, the working of
 your Company for the financial year ended March 31, 2011.  I would like
 to share with you the important highlights of your Company''s
 performance in the backdrop of the conditions prevailing in the
 shipping industry.
 
 SHIPPING SCENARIO
 
 The dry bulk market started the period under review on a bullish note.
 However, slowdown of the global economy and continuously pouring in
 new building deliveries suppressed the market. Despite a healthy global
 tonne-mile demand growth, the dry bulk market remained subdued with the
 BDI falling to 1,040 - its lowest level in two years - in the first
 week of February, 2011. Although, the index climbed to nearly 1,550 in
 March 2011, it was still down nearly 50% compared to its year-earlier
 level.
 
 Tanker market strength- ened in the first quarter of 2010 and remained
 firm in the second quarter 2010. However, market hit a soft patch in
 July 2010 and by the end of August, 2010 rates on many routes were
 hovering close to operating cost levels. Declining trade demand as well
 as combination of reduced floating storage and continued fleet growth
 created conditions for a depressed market and relatively low rates
 persisted throughout the remainder of 2010. The rates on nearly all
 routes collapsed in April, 2011 with very little relief in May, 2011.
 Product tanker freight rates experienced a modest dip in the second
 quarter 2010 and thereafter increased in the third quarter 2010. The
 product tanker market experienced much less volatility than the crude
 tanker market in the second half of 2010. By historical measures,
 however, product rates were very depressed.
 
 At the start of 2010, the containerized trade volumes were seen picking
 up and freight rates were on rise, mainly due to increase in the
 Asia-Europe Westbound and the Transpacific Eastbound trades. However,
 the scenario drastically changed by end 2010, with vessel utilization
 in these lanes declining and spot freight rates falling 30 percent
 below their July, 2010 peaks. Even though box-rates saw some minimal
 gain at the start of 2011, the rates resumed their downward trend by
 the end of January 2011.
 
 FINANCIALS
 
 I am happy to share your Company''s financial performance during the
 financial year 2010-11. Your Company recorded the Gross Earning of Rs.
 4,019.8 crore as against Rs. 3,902.7 crore in the previous financial
 year. The Net Profit after Tax earned for the review period stood at
 Rs. 567.4 crore, which is higher by 50.5 percent compared to Rs. 376.9
 crore for the same period last year. The Earning Per Share of Rs. 13.01
 for FY11 is higher by 46.2 percent compared to that for FY10. At the
 overall level, the Net Worth saw 13.1 per cent annual increase and
 stood at an impressiveRs.7,168.13 crore at the end of the period under
 review. A shipping company''s financial performance mirrors the
 conditions prevailing in the global shipping markets and all of you
 will appreciate that your Company''s performance is certainly laudable
 as it comes in the midst of slowdown in the shipping industry.
 
 OPERATIONS
 
 The tankers and dry bulk carriers were deployed in a judicious mix of
 gainful employments. Your Company''s container services as well as
 break-bulk services were operated with specific thrust on increasing
 marketing effort and cost optimization so as to maximise the yield.  In
 offshore sector, your Company''s OSVs continued to be gainfully employed
 under long term time charter arrangement. For the managed vessels also,
 your Company''s performance has been to the complete satisfaction of its
 customers, which will help us further strengthen relations with the
 valued clientele.
 
 The crude oil carriers constitute over 60 percent of your Company''s
 fleet and I would like to mention that in this segment, being an
 integrated tanker operator has greatly helped your Company tide over
 the difficult market conditions because of the flexibility for
 deploying its tonnage. Your Company has managed to retain COA
 arrangements with Indian oil industry, which has ensured gainful
 employment of tankers in subdued market conditions. Your company also
 deployed a few tankers in cross trades, which accounted for about 15
 percent of the total crude carried by your Company. Your Company took
 steps to improve the marketability of its tankers, particularly in
 respect of the crew matrix and onboard maintenance.
 
 In the container sector, your Company''s focus was on reducing the
 overall system cost. In addition to the route rationalization, which is
 an on-going activity, your Company also placed considerable emphasis on
 reducing the fuel consumption by its ships. Your Company''s effort in
 increasing the geographic coverage of its services has also positively
 impacted the equipment cost. I would like to particularly mention that
 the commencement of the East Africa service on slot-swap agreement was
 done without any additional cost on hardware.
 
 I report with a sense of satisfaction that your Company has continued
 its tradition of efficient, safe and environment- friendly onboard
 operations. A particular emphasis was laid on Port State Control and
 Flag State Control performance with the result that your Company has
 recorded a satisfactory performance in inspections by the Flag State
 Administration as well as at various ports of call overseas. Having
 said that, I must also submit that improvement is a continual process
 and your Company would continue to further enhance its performance in
 this respect.
 
 Success of the shipping operations requires joint effort from ships and
 shore. Shore support in technical matter to the ship was ensured
 through effective co-ordination with ships and ship visits of the
 shore-based technical superintendents. In addition to this, regular
 briefing and debriefing session with the senior fleet officers is an
 important checkpoint in your Company''s operations.
 
 The international shipping industry is deeply concerned about the
 problem of piracy. I would also like to mention that your Company has
 adopted adequate measures in this regard and would also like to assure
 the shareholders that your Company shall spare no effort in ensuring
 the safety and security of its personnel and assets.
 
 SHIP ACQUISITION PROGRAMME
 
 Your Company had planned acquisition of 62 new building vessels during
 the Eleventh Five Year Plan period i.e.  2007 to 2012 and the year
 under report is fourth year of this Plan period. During the first four
 years of this Plan period, your Company placed orders for 35
 new buildings - including 11 during the period under review. I am also
 happy to share with all of you that thereafter during April 2011, your
 Company has placed order for acquisition of 2 resale Supramax bulk
 carriers and during July, 2011 signed contract for 1 new building
 Cellular Container vessel of 3,500 TEU capacity.
 
 OTHER CORPORATE DEVELOPMENTS
 
 In November, 2010, your Company came out with a Further Public Issue of
 84,690,730 equity shares - including sale of 10% of the existing equity
 out of the Government shareholding and issue of fresh equity of 10%. I
 am happy to share with all of you that this equity issue was
 oversubscribed 4.8 times. Your Company garnered an amount of Rs. 582.45
 crore through the sale of additional equity, which would be utilized
 for the Company''s capacity enhancement plans.
 
 I would like to mention another quite significant development regarding
 your Company''s Information Technology integration project - SET-IT.
 Your Company has achieved the project go-live. Considering the
 complexity and scope of the entire project, this is an important
 achievement for the Company.
 
 You Company carried out with zeal its corporate social responsibility
 activities, which are in the areas such as support to the socially
 disadvantaged and physically handicapped, public health, preservation
 of cultural heritage and assistance to the victims of natural disaster.
 Your Company has always emphasised development of seafaring talent and
 welfare of seafarers, and during the period under review, this focus
 was duly maintained.
 
 I am happy to share with all of you the following accolades received by
 your Company - Leadership Builders Award at Asia Pacific HRM Congress
 in September, 2010.
 
 Ship Owner of the Year - India Award at Maritime and Logistics Awards
 2010 in September, 2010.
 
 Gold Award in Transport Category at India Pride Awards 2010.
 
 Indian Shipping Company With Highest Growth Of Indian Vessels trophy
 on 48th National Maritime Day held on April 05, 2011.
 
 Dun & Bradstreet - Rolta Corporate Awards 2010 in Shipping sector.
 
 Outstanding Contribution to the Seafaring Community Award on the
 occasion of ''Day of the Seafarer'' on June 25, 2011.
 
 CORPORATE GOVERNANCE
 
 The Report of Directors on Corporate Governance placed in the
 Directors'' Report comprehensively describes the structure and practice
 of Corporate Governance of your Company. As a salient feature for the
 year under review, I would like to inform that in addition to complying
 with the requirements of Corporate Governance emanating from various
 statutes, rules and regulations, your Company has also adopted the
 guidelines issued by the Department of Public Enterprises in 2010 on
 Corporate Governance.  I may also add that the Corporate Governance
 issues are kept in constant focus by the Board of Directors of your
 Company and your Company complies with the applicable guidelines both
 in letter and spirit.
 
 DIVIDEND
 
 I am happy to share with you that the Board of Directors of your
 Company has recommended a final dividend of 25 percent, which will be
 in addition to 30 percent interim dividend already paid to the
 shareholders. You may also like to note that the total dividend of 55
 percent for the financial year 2010-11 is on the enhanced equity
 capital base, post FPO.
 
 GLORIOUS FIFTY YEARS
 
 Your Company came into existence on October 2, 1961 with the merger of
 two existing shipping companies.  From a small shipping line with
 predominantly liner fleet to becoming a highly diversified and the
 largest Indian shipping company with a distinct global standing, your
 Company has been through a remarkable journey over the past fifty
 years. I would seek your indulgence in noting that today your Company''s
 fleet stands at 5.8 million deadweight tonnage as against mere 0.2
 million deadweight tonnage at the Company''s inception in 1961.  In this
 all-round growth, your Company has not only facilitated India''s
 seaborne trade and contributed to the national economy; but has also
 developed and nurtured maritime culture in the country.
 
 WAY FORWARD
 
 In the coming months, high oil prices are likely to act as a drag on
 the world economy. In tanker segment, while tonnage demand is
 anticipated to grow at a steady rate, tonnage supply is forecast to
 expand at a much more rapid pace. Further decline in floating storage
 over the next few months is also expected to increase the tonnage
 supply. This is likely to maintain downward pressure on freight rates
 in the near future. In the dry bulk sector, while global iron ore and
 coal demand is expected to increase, the market outlook remains
 sluggish in the near to medium term, particularly due to tonnage
 oversupply. In container sector, there remains some uncertainty
 regarding future trade developments. At the same time, the sector will
 have to accommodate an influx of mega-ships in the coming months.
 
 Your Company would continue its effort to optimise its operations
 through various means such as judicious deployment of fleet, effective
 cost control and other performance improvement initiatives. I seek your
 continued support in these endeavours.
 
 ACKNOWLEDGEMENT
 
 I would like to express my gratitude to the Government of India for
 their support to your Company. I wish to thank the hon''ble Union
 Minister of Shipping Shri G.K. Vasan for leading the growth of India''s
 maritime sector and for providing his kind support to your Company. I
 would also like to thank the hon''ble Minister of State for Shipping,
 Shri Mukul Roy for his encouragement to your Company.  I wish to also
 express my indebtedness towards Shri K. Mohandas, Secretary, Shipping
 for guidance provided to your Company. My sincere thanks are also due
 to other officials of the Administrative Ministry, other Ministries and
 Departments of the Government of India. I would also like to express my
 sincere appreciation towards Directorate General of Shipping for its
 support and kind understanding of various problems being faced by the
 Indian shipping industry and specifically by your Company. It is with a
 deep sense of gratitude that I put on record my sincere appreciation
 towards my colleagues on the Board of Directors of your Company. I also
 wish to express my sincere appreciation towards all the floating and
 shore employees of your Company. Finally, I express my gratitude to all
 the esteemed shareholders as well as all the customers and patrons for
 their valued patronage.
 
 Shri S. Hajara 
 
 Chairman & Managing Director