1. The Company being a shipping company, its activities are based both
 in shore and in floating ships.  The Company have implemented three
 different ERP packages to take care of both shore and the ship related
 transactions and they have gone live from 28.02.2011. The accounts for
 the period 01.04.2010 to 31.01.2011 (i.e for ten months) are prepared
 in the legacy system and for the period 01.02.2011 to 31.03.2011 (i.e
 for two months) are prepared in the new system. With all efforts, the
 system has been implemented and the accounts for the 4th quarter and
 year ending 31.03.2011 are for the first time prepared under the new
 system.
 
 In addition to above, supporting documents for income and expenses are
 not received by the Company from the agents and transactions have been
 recorded based on the amount of the advance released / data received
 from the agents for the month of March 2011.
 
 Necessary accounting effects to rectify the migration errors have been
 carried out by the management where ever the instances have been
 observed and the exercise is continuing and the necessary rectification
 will be made appropriately.
 
 Further to above the company is unable to make certain adjustment in
 respect of following due to issues arising on migration and uploading
 of data in the new system:
 
 i) Translation of certain balances as per policy No. 8(c), where ever
 rectification entries have been passed post revaluation of the balances
 of the assets and liabilities,
 
 ii) The segmental results disclosed segment report may consist certain
 inter segment compensating issues,
 
 iii) In some of the assets, depreciation is accounted where instances
 of classification in inter assets class is noticed and date of
 capitalisation is taken based on best available information,
 
 iv) Certain transaction relating to payments etc reflected in the bank
 reconciliation statements could not be incorporated,
 
 v) During the current year aggregate Net Credit balance of Rs. 25375.49
 Lakhs in vendor and accounts payable are shown as Sundry creditors and
 other liabilities, which up to previous year were disclosed vendor
 wise-Debit and credit separately,
 
 vi) The Foreign currency revaluation effects of various assets and
 liabilities are included in the debtors, instead of grouping the same
 with the respective assets and liabilities,
 
 vii) The 2nd phase of audit by the Comptroller & Auditor General of
 India, has not been completed due to limitation of time.
 
 The impact of items stated in para (i) to (iv) is not material on the
 result of the Company. Further the matters stated in para (iv) to (vi)
 relates to assets and liabilities and grouping there of under the
 various heads of the Balance sheet.
 
                                                  As at         As at
 
                                             31.03.2011    31.03.2010
 
                                          (Rs. in lakhs) (Rs. in lakhs)
 
 2 Contingent Liabilities not provided for:-
 
 (i) Claim against the company not 
 acknowledged as debts -
 
 (a) Claim made by M/s. Chokhani 
 International Ltd.  towards dry dock
 expenses pending before High Court, Chennai      4,006         3,788
 
 (b) Forfeiture of Earnest Money Deposit,
 Cargo Loss, Freight, Demurrage, Slot Payments,
 Fuel Cost, other operational claims and
 Custom duty disputed demand.
 (As certified by the Management)                 9,217         9,437
 
 (c) Disputed demand of Income tax
 (As certified by the Management)                 9,175         5,205
 
 (ii) Guarantees given by the Banks
 
 (a) on behalf of the Company                     1,892         2,685
 
 (b) on behalf of the Joint Venture to the 
 extent of the Companys share.                    3,200         3,232
 
 (iii) Undertaking cum Indemnity given by Company 1,000         1,000
 
 (iv) Cargo Claims covered by P&I Club              120           177
 
 (v) Bonds / Undertakings given by the
 Company to Customs Authorities.                 10,140         7,347
 
 (vi) Corporate Guarantees / Undertakings
 
 - In respect of Joint Ventures                     Not 
                                          Ascertainable           Not 
                                                         Ascertainable
 
 - Others                                         5,023         5,064
 
 (vii) Commitment towards subscription of shares     40           NIL
 
 3.  RELATED PARTY DISCLOSURES:
 
 Related Party disclosures, as required by AS - 18 Related Party
 Disclosures are given below: (a) Names of related party entities with
 whom transactions were carried out during the period: (i) Joint Venture
 Companies
 
 1.  Irano Hind Shipping Co. Ltd.
 
 2.  India LNG Transport Co. (No. 1) Ltd.
 
 3.  India LNG Transport Co. (No. 2) Ltd.
 
 4.  India LNG Transport Co. (No. 3) Ltd.
 
 5.  SCI Forbes Ltd.
 
 6.  SAIL SCI Shipping Pvt. Ltd.
 
 (ii) Key Management Personnel Functional Directors
 
 1.  Shri S. Hajara, CMD 
 
 2.  Shri B.K. Mandal 
 
 3.  Shri Kailash Gupta
 
 4.  Shri U.C. Grover (up to 31.08.2010) 
 
 5.  Shri. J.N. Das 
 
 6.  Shri K.S. Nair (up to 31.12.2010)
 
 7.  Shri. A. K. Gupta (w.e.f. 25.10.2010)
 
 8.  Shri. S. Thapar (w.e.f. 11.01.2011)
 
 9.  Sethusamudram Corporation Ltd. (SCL),
 
 a Special Purpose Vehicle was incorporated on 06.12.2004 for developing
 the Sethusamudram Channel Project with Tuticorin Port Trust, Ennore
 Port Ltd., Visakhapatnam Port Trust, Chennai Port Trust, Dredging
 Corporation of India Ltd., Shipping Corporation of India Ltd. and
 Paradip Port Trust as the shareholders. SCI participated for an
 investment not exceeding Rs. 5,000 lakhs (previous year Rs. 5,000
 lakhs).The dredging work is temporarily suspended from 17.09.2009,
 consequent to the direction of the Hon''ble Supreme Court of India. The
 Management does not consider any diminution in the value of the
 investment and the same has been carried at cost.
 
 10.  The depreciation on additions to / deductions from fixed assets
 other than Ships is charged on pro-rata basis which were hitherto
 provided for full year in case of additions and no depreciation was
 provided in the year the assets were sold / discarded. In respect of
 Ships, depreciation on additions to existing fleet is now charged on
 pro-rata basis which was hitherto provided for the full year
 irrespective of the date of addition. Due to this change, the profit is
 higher by Rs. 1321 lakhs.
 
 11.  The Company entered into a joint venture agreement with Steel
 Authority of India Ltd. with participation interest in the ratio of
 50:50 and promoted a jointly controlled entity SAIL SCI Shipping Pvt.
 Ltd. (SSSPL). The said company was incorporated on 19.05.2010 with an
 authorised share capital of Rs. 17000 lakhs. The Company has subscribed
 equity capital of 500000 shares of Rs. 10 each amounting to Rs. 50
 lakhs and during the period SCI has made initial payment of Rs. 10 lakhs
 towards equity capital. Pending remittance towards the balance
 subscribed capital the same has not been considered as investment and
 the consequent liability.
 
 12.  During the financial year 2010-11, the Company made an investment
 of Rs. 1230 lakhs towards acquiring 0% Redeemable preference shares and
 further paid an amount of Rs. 1330 lakhs towards partly-paid Equity
 share capital in Joint Venture, SCI Forbes Ltd.
 
 13.  The Company holds 49% interest in a joint venture company
 incorporated in Iran on which sanction has been imposed by United
 Nations Organisation (UN). The exposure of the Company in the Joint
 Venture is limited to Rs. 39 lakhs towards investment made and Rs. 27
 lakhs towards the recoverable expenses. No provision is considered
 necessary by the management on the same and the company maintains
 status quo as far as investment in JV is concerned.
 
 1) Segment definitions - Liner segment includes break bulk and
 container transport. Bulk segment includes tankers (both crude and
 product), dry bulk carriers, gas carriers and phosphoric acid carriers.
 Others include offshore vessels, passenger vessels and services and
 ships managed on behalf of other organisations. Unallocable items and
 interest income / expenses are disclosed separately.
 
 2) All assets / liabilities and revenue items are allocated vessel wise
 wherever possible. Assets / liabilities and revenue items that cannot
 be allocated vessel wise are allocated on the basis of unit cum GRT
 method i.e. 50% allocated on the basis of units and balance 50% on the
 basis of adjusted GRT. GRT is adjusted to one third of GRT or 20000
 GRT, whichever is more in case of vessels which are bigger than 20000
 GRT.
 
 3) The components of capital employed that cannot be directly
 identified are allocated on the basis of GRT method.
 
 14. Disclosures of Employee benefits as per Accounting Standard-15
 Employees benefits, as defined there in are given below
 
 A) Description of type of employee benefits
 
 The Company offers to its employees defined benefits plans in the form
 of Gratuity, leave encashment and post retirement Medical Scheme.
 
 The details under the plan are as follows:
 
 i Gratuity 
 
 (a) Represents benefits to employee on the basis of number of years of
 service rendered by employee.  The employee is entitled to receive the
 same on retirement or resignation.
 
 (b) SCI has formed a trust for gratuity which is funded by the Company
 on a regular basis. The assets of the trust have been considered as
 plan assets.
 
 ii Leave Encashment Represents unavailed leave to the credit of the
 employee and carried forward in accordance with terms of agreement.
 
 iii.  Post Retirement Medical Benefit Scheme Represents benefits given
 to employees subsequent to retirement on the happening of any
 unforeseen event resulting in medical costs to the employee.
 
 G) (i) Percentage of category of plan assets to fair value of plan
 assets
 
 (i) None of the financial assets of SCI have been considered in the
 fair value of plan assets.
 
 (ii) The expected rate of return on plan assets have been estimated on
 the basis of actual returns of the trust in the past years. The assets
 of the trust are in the nature of investments in securities, fixed
 deposits, Interest accrued, and balances in current accounts with Bank.
 The securities of trust have an effect on the fair value of plan assets
 as the value of the securities vary with the changes in the market
 interest rates.
 
 (iii) Actual return on plan assets: Rs. 1168 Lakhs (Previous period Rs.
 1703 lakhs).
 
 I) Effect of an increase of one percentage point and the effect of a
 decrease of one percentage point in the assumed medical cost trend
 rates on:
 
 (i) the aggregate of the current service cost and interest cost
 components of net periodic post-employment medical costs; and (ii) the
 accumulated post-employment benefit obligation for medical costs.
 
 J) The estimates of future salary increases, considered in the
 actuarial valuation, takes into account inflation, security, promotion
 and other relevant factors.
 
 K) The Guidance on implementing AS 15, Employee benefits (revised 2005)
 issued by Accounting Standard Board (ASB) states benefit involving
 employer established provident funds, which requires interest
 shortfalls to be recompensed are to be considered as defined benefit
 plans. Pending the issuance of the guidance note from the Actuarial
 Society of India, the Company''s actuary has expressed an inability to
 reliably measure provident fund liabilities. Accordingly the Company is
 unable to exhibit the related information. However, such interest
 shortfall has been recompensed by the Company up to the current period
 on accrual basis.
 
 15.  Sundry Creditors, Debtors, Loans & Advances and Deposits are
 subject to confirmation and reconciliation. During the year, letters
 for confirmation of balances have been sent to various parties by the
 Company and same are under reconciliation wherever replies have been
 received. The management, however, does not expect any material
 changes.
 
 16.  Pending implementation of pay revision of employees
 retrospectively from 1st January, 2007, the Company has made adequate
 provisions in the books of accounts as per Managements decision based
 on DPE OM dated 26th November, 2008. During the year ended 31st March,
 2011, a provision of Rs. 1825 (Prev. Yr. Rs. 3710 lakhs) has been made
 and the cumulative balance of provision in this regard stands at Rs.
 10736 lakhs (Prev. Yr. Rs. 8911 lakhs).
 
 17.  Service tax department has issued show cause notices to the
 Company proposing to impose levy of service tax under the category of
 Storage and Warehousing Service aggregating to (a) Rs. 2679 lakhs for
 the period from 01/10/2002 to 31/12/2007 (b) Rs. 754 lakhs for the
 period from 01/01/2008 to 31/01/2009 and (c) Rs. 405 lakhs for the
 period from 01/02/2009 to 30/09/2009 and also interest and penalty
 alleging that Company has provided storage & warehousing services to
 Oil & Natural Gas Corporation (ONGC) in respect of vessels given to
 ONGC under Time Charter arrangement.
 
 According to the management, service tax is not leviable for such
 chartering arrangement under the category of Storage and warehousing
 Service and therefore SCI has challenged the applicability of service
 tax under this category and has not accepted any liability towards
 service tax on this account.
 
 18.  Borrowing cost and Interest capitalised during the period is Rs.
 1562 lakhs (Prev. year Rs. 1514 lakhs).
 
 19.  The Company has been exempted from complying with Para 4 (D) (a),
 (b), (c) & (e) of Part II of Schedule VI of the Companies Act,1956 vide
 notification no. F.No 51/12/2007-CL.III dated 08.02.2011 issued by
 Ministry of Corporate Affairs, Government of India.
 
 20.  During the year, the Company has reviewed its fixed assets for
 impairment loss as required by Accounting Standards 28 - mpairment of
 Assets In the opinion of management no provision for impairment is
 considered necessary.
 
 21.  During the quarter ended 31st December, 2010 the government
 disinvested 10% of the paid up share capital of the company through a
 Follow on Public Offer and the company issued 42345365 equity shares
 of Rs. 10 each generating proceeds of Rs. 58245 lakhs including a
 premium of Rs. 54010 lakhs. The expenses of the Follow on Public Offer
 like commissions, advertisement etc amounting to Rs. 1644 lakhs have
 been adjusted against this Securities premium account.
 
 22.  The figures of previous year have been regrouped or rearranged
 wherever necessary / practicable to conform to current year''s
 presentation. Further the figures are rounded off to the nearest lakh
 rupees.