Varun Shipping Company

The Directors have pleasure in presenting the Thirty seventh Annual
 Report together with the audited statements of account of the Company
 for the year ended 31st March, 20O8.
 
                                        (Figures in millions of Rupees)
                                            Current Year   Previous Year
                                                   ended           ended
                                             31.03.2008       31.03.2007
 
 PROFIT BEFORE TAX                             2,278.99        1,476.90
 Less: Provision for Taxation
 Current Tax                                      14.00           56.80
 Fringe Benefit Tax                                7.20            6.60
 PROFIT AFTER TAX                              2,257.79        1,413.50
 Less: Transferred to Tonnage Tax Reserve under
 Section 11 5VTof the Income-tax Act, 1961       460.00          260.00
 Add: Surplus brought forward from previous year 813.36          758.85
 Amount available for appropriation            2,611.15        1,912.35
 
 Your Directors propose to transfer an amount of Rs.800 million to
 General Reserve. The Directors have also recommended payment of final
 dividend of Rs.2 per equity share for the year ended 31 st March, 2OO8
 which together with two interim dividends totalling to Rs.3 per equity
 share declared and paid earlier for the year ended 31 st March, 2OQ8
 aggregating to Rs.5 per equity share will absorb Rs.749.90 million and
 Rs. 127.45 million towards dividend tax. After the above
 appropriations, your Directors propose to carry forward a balance of
 Rs.921 .63 million in the Profit and Loss Account.
 
 Freight and charter hire income was Rs.8,508.07 million compared to
 Rs.6,726.27 million forthe year ended 31 st March, 2OO7. Net profit
 after tax was Rs.2,257.79 million for the year ended 31 st March, 2OO8
 as against Rs.1 .41 3.50 million during the preceding year.
 
 Revised Accounting Standard 1 1 CAS 11) issued by the Ministry of
 Corporate Affairs vide Notification dated 7th December, 2006 has become
 part of Companys Accounting Standard Rules, 2O06. It was made
 applicable with effect from 1 st April, 2007 as a result of which
 exchange rate differences arising on account of repayment and
 revaluation of foreign currency loans taken for acquisition of ships
 from abroad are required to be recognized as income/loss through profit
 and loss account statement in the period in which they arise. In the
 previous years, such differences were required to be adjusted to
 carrying cost of the ships and amortised by way of depreciation.
 Accordingly, the income for the financial year ended 31st March, 2008
 includes Rs.817.60 million on account of net exchange gain on foreign
 currency loans taken for acquisition of ships from abroad. This has
 resulted in increase in depreciation charge by Rs.90.23 million.
 
 The Company continues to maintain its focus on the hydrocarbon sector
 and build up on its core competencies by expanding its fleet of tankers
 and gas carriers as also by expanding its assets and operations in the
 rapidly developing oil and gas exploration and production industry.
 Towards this end, the company acquired a Very Large Gas Carrier (VLGO,
 Maharshi Bhardwaj in June 2007 with a cargo carrying capacity of 76,644
 com. This is the first Indian flagged VLGC and is the largest LPG
 carrier in the Indian fleet. The Company has secured the first
 long-term contract to transport LPG in a VLGC to the newly commissioned
 Cavern Storage at Vizag, This contract has helped the Company to
 consolidate its position as a leading LPG shipping company in India.
 The companys owned LPG carrier fleet of 12 vessels is the largest in
 India in terms of both fleet size and cargo carrying capacity of
 360,581 dwt (436,722 cbm) and forms approximately 81 per cent of total
 LPG tonnage under Indian flag. The company has transported
 approximately 72 per cent of all LPG cargoes imported into the country
 by the Public Sector Undertakings (PSU) during the year ended 31st
 March, 2008.
 
 The Company acquired two large, modern Anchor Handling Towing and
 Supply (AHTS) vessels, MV Sudaksha and MV Suvarna in May, 2OO7 and
 March, 2OO8 respectively. Both these vessels have a bollard pull in
 excess of 1 8O Tons. These vessels together with the AHTS MV Subhiksha
 which was acquired in January, 2OO7 have enabled the Company to
 establish its leadership position in the large AHTS sector in the Asian
 region. These vessels will cater to the deepwater offshore sector in
 Indian and international oil fields. Further, these vessels are the
 most powerful AHTS vessels under Indian flag. During the year under
 review, the company sold one 1 974 built Large Gas Carrier Maharshi
 Vishwamitra. The Company presently owns a well diversified fleet of 21
 vessels. In January 2OO8, the Company had announced a capital expansion
 programme of US$ 4OO million out of which the Company has acquired AHTS
 vessel MV Suvarna. The Company is proposing to conclude balance
 expansion programme by the end of year subject to availability of
 suitable tonnage.
 
 In April, 2OO8 one of the companys vessels, LPG/C Maharshi
 Krishnatreya was awarded a Certificate of Excellence and the Ship of
 the Year (Indian Flag in Foreign Trade) award by the National Maritime
 Day Celebrations Committee (Central), Mumbai, Directorate General of
 Shipping, Government of India. This award is given to a ship which
 comes out successfully through various inspections depicting its clean
 image and efficiency of its master and crew. This vessel had also
 undertaken search and rescue operations in July, 20O7 when a Korean
 vessel M.V. Orchid Sun, had sunk in the sea of Oman and was successful
 in rescuing two crew members.
 
 Mr.Yudhishthir D. Khatau, Managing Director of the Company was awarded
 the Policy Maker of the Year award at the Seatrade India Shipping
 Summit Awards 2OO7 ceremony held in Mumbai. According to Seatrade, this
 award is given to an individual of influence whose contribution has had
 a beneficial effect on the Indian maritime policy.
 
 During the year under review, the Company issued and allotted
 3,950,000, 2,850,000 and 450,000 equity shares of Rs. 1 0 each to
 Khatau International Limited and Tarun Shipping and Industries Limited,
 promoter group companies and Mr.Arun Mehta, Vice Chairman & Managing
 Director of the Company respectively, pursuant to their exercise of
 option for conversion of 3,950,000, 2,850,000 and 450,000 Optionally
 Fully
 
 Convertible Warrants respectively at Rs.75 per equity share. The funds
 raised from the said issue have been fully utilized for expansion plans
 of the Company and for corporate purposes/requirements. As on date, the
 total paid-up equity share capital of the Company is 150,007,773 equity
 shares of Rs, 10 each aggregating to Rs.1 ,5OO.O8 million and no
 instruments are outstanding for conversion into equity shares.
 
 In response to companys application for voluntary delisting of equity
 shares, the Company, equity snares have been delisted from The Delhi
 Stock Exchange Association Limited. The delisting from the Calcutta
 Stock Exchange Association Limited is awaited.
 
 Management Discussion and Analysis:
 
 (a) Industry Structure and Development:
 
 The international shipping industry transports hydrocarbons and bulk
 commodities in wet bulk, dry bulk, liquified gas, bulk chemicals and
 container sectors. Offshore support vessels provide various services to
 the offshore oil and gas exploration and production industry. The
 Company owns a well diversified fleet of 21 vessels, operating in the
 oil, gas and offshore support sectors.
 
 According to The Platou Report, 2O08, the year 2007 was the fourth
 consecutive year with a full utilization of the world merchant fleet.
 The peak was reached in 20O4, but the next three years have only been
 marginally weaker, with a modest upturn from 2OO6 to 2007. Again,
 global economic growth showed greater strength than what was expected
 by forecasters at the start of the year.
 
 According to The Platou Report, 2008, strong global economic growth and
 favourable geographical distribution have more than doubled the tonnage
 demand growth rate from the 1 990s to this decade; from 3 per cent to
 6.5 per cent. There is a high corelation between global economic growth
 and growth in tonnage demand. Based on data from 1 992 to 2OO7 as much
 as three quarters of the annual changes in tonnage demand can be
 explained solely by global economic growth. Even with an annual
 expansion rate in world shipbuilding of 1 6 to 2O per cent, the fleet
 growth of 8.4 per cent last year was marginally lower than the
 estimated tonnage demand growth of 9 per cent.
 
 According to The Platou Report, 2008, despite the financial turmoil in
 2007, economic growth was not negatively affected. Global growth is now
 estimated to have been 5.2 per cent compared to 4.6 per cent predicted
 in January, 20O7. According to International Monetary Fund, China
 contributed to global growth by 34 per cent and India by 1 1 per cent
 in 20O7.
 
 Under investment in earlier years, surge in Chinese growth and
 scrapping of vessels built in 1 970s have created the conditions for a
 very strong market for tankers. Further, the gap in charter rates
 between single hull and double hull vessels is widening as more
 charterers prefer double hull tonnage and flag states impose
 restrictions on single hull tonnage. In the coming years as single hull
 will be mandatorily required to be phased out, the demand for double
 hull tonnage will be strong.
 
 Tanker new building prices have been very high and delivery lead times
 have been longer. Further, secondhand values of tankers continue to
 rise even when spot earnings were lower resulting in widening the
 disparity between earnings and ship values.
 
 LPG is one of the most preferred fuels due to its clean burning
 properties. LPG carriers are primarily used for transportation of LPG
 and Ammonia. The year 2OO7 was a volatile year for Very Large Gas
 Carrier (VLGC) freight rates. The rest of the fully refrigerated gas
 carrier fleet enjoyed a good year 2OO7.
 
 According to The Platou Report, 2OO8, despite more volatility in day
 rates and a great deal of speculation concerning impending oversupply,
 activity in the offshore support vessel market has remained high in
 20O7.
 
 According to The Platou Report, 2OO8, for the year 2007 in total, the
 demand for new tonnage was 53 per cent higher compared to 2OO6. The
 strong economic growth has not only resulted in a price hike for
 shipbuilders but has also dramatically increased the cost of input
 factors. One of the most important factors is labour, which typically
 increases during periods of high economic growth. Steel is another
 important factor for which prices have rallied. Equipment cost, which
 accounts for about 4O per cent of the building cost for a merchant
 ship, has also increased. The hike in prices is a result of demand
 pull rather than a cost push as the yards have improved their
 margins during this period.
 
 (b) Opportunities and Threats:
 
 Rapid economic development and an increase in demand for both wet and
 dry bulk products, including liquified gas the world over, have
 resulted in substantial increase in shipping activities. About 9O per
 cent of the world trade in volume is carried through sea
 transportation, hence the growth in cargo availability has fuelled an
 impressive growth in shipping fleet and the world cargo carrying
 tonnage
 
 As per Indian National Shipowners Association (1NSA) Annual Review,
 2O07, the share of Indian ships in the carriage of countrys overseas
 trade has been declining over the years and it was around 1 3.7 per
 cent in 2OO5-O6, thereby remaining stagnant for the last 3 years.
 Looking ahead, the exim trade of India is expected to double to touch
 one billion tonnes by 2O1 1 -201 2 from 450 million tonnes, which is a
 huge business opportunity but requiring substantial investments. Thus,
 in order to maintain the present share of Indian ships in the carriage
 of Indias overseas trade at about 1 4 per cent, the Indian shipping
 tonnage needs to rapidly expand from the present 9 million GT to about
 2O million GT. Since during this period around 4 million GT of the
 existing fleet will be scrapped due to old age/International Maritime
 Organisation phaseout regulations, the net addition to the fleet would
 have to be around 1 5 million GT. It is estimated that the cost of
 investment for such tonnage replacement/augmentation would be
 approximately US$ 2O billion.
 
 According to INSA, in 2OO6-O7 Indian ships carried 61 million tonnes of
 the countrys overseas cargo constituting only 1 2.2 per cent share as
 against 41 per cent in 1 987-88. The Indian shipping companies can
 accordingly grow on the strength of strong Indian cargo base with the
 right of first refusal for Indian flag vessels with respect to Indian
 charterers.
 
 For a country like India, with huge exim trade, direct and indirect
 taxation ought to be rationalised in line with international shipping
 hubs, thereby ensuring that there are no cost disadvantages to the
 owners, charterers or end users. Tax rationalisation will not only
 assist in providing a level playing field and a viable operational
 environment to the shipping companies, but also help in mobilizing the
 huge investment required to replace tonnage as well as achieve growth
 of Indian fleet commensurate with the quantum of Indias exim trade.
 
 Further, Indian shipping companies are also adversely affected on
 account of drift of personnel from Indian ships to foreign ships due to
 peculiar taxation problems of discrimination faced by Indian seafarers
 working onboard Indian ships vis-a-vis their competitors on foreign
 ships.
 
 (c) Segment-wise Performance:
 
 The Company is engaged only in the business of shipping and there are
 no separate reportable segments.
 
 The diversified fleet enables the Company to offer a comprehensive
 shipping solution across the entire hydrocarbon chain. It also serves
 as a hedge against downturn in any single sector thereby mitigating the
 cyclicality associated with the shipping industry. The Companys
 fleet of twelve LPG carriers, including ten medium size CMGC), one
 large size (LGC) and one very large size (VLGO, has been deployed on a
 mix of time charters, spot charters and voyage charters with Hindustan
 Petroleum Corporation Limited, Indian Oil Corporation Limited, Bharat
 Petroleum Corporation Limited, Exmarand BW Gas.
 
 In the crude oil and petroleum products sector, the Company owns three,
 double hull Aframax crude oil tankers and one single hull product
 tanker. The three crude oil tankers which are placed in the Sigma
 Tanker Pool, trade globally and the product tanker is employed on time
 charter on the Indian coast.
 
 In the offshore sector, the Company has a fleet of five AHTS vessels of
 which two are deployed on time charter with Oil and Natural Gas
 Corporation Limited, two with Reliance Industries Limited for
 supporting their deep sea oil exploration and production activities in
 Krishna Godavari Basin and one on spot charter in North Sea. The
 Company is the first Indian company to operate a large Anchor Handler
 in the North Sea.
 
 (d) Outlook:
 
 As per current and longer-term oil market outlook of International
 Energy Agency (IEA) dated 8th January, 2OO8, despite measures to
 address environmental, economic and energy security concerns, demand
 for oii is set to grow, led by the transport sector.
 
 EIA the US Department of Energy Office) expects a total oil production
 growth of close to 3 million barrels per day (mbd) during the calendar
 20O8, out of which 2 mbd from OPEC, of which 1 .7 mbd is crude, which
 should result in a tonne mile growth of 6 to 8 per cent.
 
 International Monetary Fund (IMF) forecast still sees low but
 nonetheless positive US growth in both 2O08 and 2O09 despite the
 continuing problems in US financial and housing sectors, the fall of
 the dollar, signs of weakening activity in manufacturing and services
 and rising inflationary concerns.
 
 According to The Platou Report, 2O08, the two largest uncertainties for
 2008 are the seriousness of the US economic slowdown and the resulting
 impact on the rest of the world. Traditionally, the USA has been the
 locomotive in the global economy and a slowdown has quickly been spread
 to the rest of the world. Due to the larger share of emerging markets,
 primarily, China, many experts have argued that a decoupling has now
 taken place. Emerging markets and developing countries have in general
 weathered the financial storm and have a solid basis for continued
 strong economic growth in 2OO8.
 
 As spenders in countries such as UK, Euro zone and US are becoming
 savers while savers in countries such as India, China and the Middle
 East are becoming spenders, global demand scenario appears to be in
 transition.
 
 According to International Energy Agency - World Energy Outlook, 2007,
 China and India Insights, developing countries, whose economies and
 populations are growing fastest will contribute 74 per cent of the
 increase in global primary energy use by 2030 compared with only 41 per
 cent today. India and China alone will account for 45 per cent of such
 projected increase.
 
 It is expected that the charter rates for VLGCs may continue to be
 under pressure in 2O08 with higher number of new VLGCs entering the
 market during the year 2008. There have been delays in LPG supply
 projects in Middle East and West Africa, which have resulted in
 pressure on VLGC charter rates as new buildings for which orders were
 placed in anticipation of such projects coming on stream are coming up
 for deliveries ahead of the growth in LPG supplies. The Company
 currently owns only one VLGC which has been gainfully employed on time
 charter. The outlook for MGC and LGC sectors appear to be steady for
 the current year.
 
 Currently household LPG use per capita in countries like China, India,
 Vietnam and Indonesia is very low compared to countries like Japan,
 Malaysia, Taiwan and Korea indicating that there is a strong potential
 for increase in consumption in such countries. It is projected that the
 LPG and Ammonia exports and imports will grow over the next years
 resulting in increased tonne-mile for LPG vessels as 50 per cent of the
 midsize LPG vessel transport concerns ammonia transport. Further, new
 production of LPG as an associate gas from LNG and refineries will be
 emerging over the coming years.
 
 Crude does not necessarily move to the closest demand region resulting
 in increased tonne mile. The order book for tankers is growing;
 however, it is expected that due to emerging markets and demand for
 energy and its products, the charter rates will remain above historical
 averages.
 
 It is expected that India and South East Asia will increase their
 imports of crude oil over the next five years as a result of growing
 demand and expansion of refining capacity.
 
 According to Indian Hydrocarbon Vision 2025, there will be a widening
 gap between demand and production of crude oil as it is expected that
 demand of crude oil will be 376.5 mmt whereas production is estimated
 to be 61 .4 mmt by 2024-2025. Demand for natural gas will be 391 mmscmd
 and supply will be 1 7O mmscmd by 2024-2O25.
 
 According to The Platou Report, 2O08 on the back of higher oil and gas
 prices, they also expect a strong increase in exploration and
 production (E&P) spending for 20O8. The E&P spending of oil companies
 is expected to continue increasing and consequently reinforce demand
 for all types of offshore support tonnage. On the down-side, the US
 credit crisis and looming recession threaten to dampen world economic
 growth in general, including energy markets.  Platou is still
 optimistic about the offshore support vessel market going forward and
 expects 2008 to be a year filled with continued higher offshore
 activity.
 
 As per current and longer-term oil market outlook, of International
 Energy Agency (IEA) dated 8th January, 2O08, the E&P industrys track
 record in pushing the limits of technology to access deepwater
 resources is impressive and will continue towards reservoirs in greater
 depths and farther away from the coastline. This will translate into
 greater demand for deepwater assets such as large anchor handlers.
 Company will be able to take advantage of emerging opportunities for
 such deepwater assets.
 
 (e) Risks and Concerns:
 
 Shipping industry being global in nature is prone to several risks and
 uncertainties including, international competition, marine mishaps and
 accidents, amendments in Government policies, new regulatory
 compliances, port state control, increase in financial costs, exchange
 rate fluctuations, changes in tax laws, acts of terrorism, wars,
 piracy, arrest of vessel by maritime claimants, shortage of qualified
 seafarers, etc.
 
 The company endeavours to counteract these risks by adopting certain
 measures like diversifying its marine assets, hedging its freight rates
 through long-term contracts and pool arrangements, complying with
 international ship management practices, insuring various risks with
 hull and machinery underwriters, Protection and Indemnity Clubs,
 training of crew etc.
 
 The Board of Directors periodically reviews and assesses the adequacy
 of the risk assessment and minimization procedures so that risks can be
 assessed and minimized through well defined framework/ procedures.
 
 (f) Internal Control Systems and their adequacy:
 
 The Company has proper and effective internal control systems
 commensurate with its size of operations in order to ensure that all
 systems and procedures are functioning satisfactorily. Internal audit
 function is carried out by the Chief Internal Auditor on a regular
 basis.
 
 The Audit Committee of the Board of Directors regularly reviews the
 effectiveness and adequacy of the internal control systems to monitor
 due and proper implementation thereof and for due compliance with
 various applicable laws, accounting standards and regulatory
 guidelines.
 
 (g) Discussions on financial performance with respect to operational
 performance:
 
 The details of the financial performance of the Company have already
 been dealt with in the earlier part of the report.
 
 (h) Human Resources:
 
 The relations between the employees and the Company remained cordial
 throughout the year. The Company had 99 shore staff and 627 floating
 staff employees as on 31 st March, 2008. The committed shore based
 staff provides its prompt and efficient support and guidance to the
 floating staff on a continuous basis, which helps to maintain effective
 performance and operational efficiency at all times.  The Company
 continues to focus on the safety, training and development of the
 employees.
 
 The Company has initiated a major post-sea training programme for its
 marine officers, where 1 521 man days of training was imparted. The
 Company has expanded its trainee marine engineer (TME) and Deck Cadet
 programme and currently trains 41 TMEs and Deck Cadets on its fleet.
 This initiative will help the Company build a well qualified cadre of
 experienced seafarers for its expanding fleet.
 
 (i) Social Responsibility:
 
 As a socially responsible corporate citizen, the Company continues to
 support a wide spectrum of community initiatives through NGOs as well
 as programmes for health, education and the environment.  Amongst
 others, the Company supports The Corbett Foundation, a charitable
 organization founded and headed by our Chairman, Mr. Dilip D. Khatau,
 works tirelessly amongst the poor and needy in Uttaranchal and Gujarat.
 The Corbett Foundation consists of a group of dedicated men and women
 who are committed to the conservation of wildlife and nature with the
 objective that men and nature must co-exist in harmony.
 
 Total foreign exchange earned and saved including deemed earnings of
 the company for the year ended 31 st March, 2008 was Rs.8,324 million
 and the foreign exchange used was Rs.6,5?3 million.
 
 As required under Section 217C2AA) of the Companies Act, 1956, your
 Directors confirm to the best of their knowledge and belief that:
 
 i) in the preparation of the annual accounts, the applicable accounting
 standards have been followed;
 
 ii) the Directors have selected such accounting policies and applied
 them consistently and made judgements and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company at the end of the financial year and of the profit or
 loss of the Company for that period;
 
 iii) the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1 956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities; and
 
 iv) the Directors have prepared the annual accounts on a going concern
 basis.
 
 As required under Section 212 of the Companies Act, 1 956, the audited
 statements of account along with the report of Directors and Auditors
 of VSC International Pte Ltd, Singapore, a wholly owned subsidiary of
 the Company, for the year ended 31 st March, 2008 as also the statement
 under the said section are attached to the Balance Sheet of the
 Company. Consolidated accounts prepared in accordance with the
 accounting standards issued by the Institute of Chartered Accountants
 of India, are also attached.
 
 As required by the Listing Agreement with Stock Exchanges on which
 shares of the Company are listed, a Report on Corporate Governance
 together with the certificate from the Auditors of the Company
 regarding compliance with Corporate Governance is attached to this
 report.
 
 Mr. Charles Cayzer was appointed as a Director by the shareholders at
 the Annual General Meeting held on 14th August, 20O7.
 
 Mrs. Rina D. Khatau and Mr. Praveen Singh retire by rotation and being
 eligible, offer themselves for re-appointment.  Separate resolutions
 are being proposed for their re-appointment.
 
 The term of office of Mr. Arun Mehta, Vice Chairman St Managing
 Director of the Company expires on 2nd October, 2O08. Your Directors
 propose to re-appoint Mr.Arun Mehta as Vice Chairman & Managing
 Director for a further period of five years commencing from 3rd
 October, 2008. During Mr. Mehtas tenure, the Company has made
 significant progress both in terms of performance and profitability and
 consequently, your Directors feel that his continued association will
 be beneficial to and in the interest of the Company and therefore, a
 special resolution for his re-appointment is proposed for your
 consideration.
 
 By a resolution passed at the Thirty-second Annual General Meeting of
 the Company held on 3rd September, 20O3, the shareholders had approved
 the payment of commission to Non-Executive Directors of the Company,
 which was effective for a period of five years, upto 31 st March, 2008.
 As it is proposed to continue the payment of the said commission, a
 special resolution for the same is proposed for your consideration.
 
 You are requested to appoint Auditors of the Company and fix their
 remuneration. The retiring Auditors Messrs Sorab S. Engineer & Co.
 being eligible, offer themselves for re-appointment.
 
 As required by Section 217C2A) of the Companies Act, 1956, read with
 Companies (Particulars of Employees) Rules, 1975, as amended, the names
 and other particulars of the employees are set out in the Annexure to
 the Directors Report. However, as per the provisions of Section 21 9C1
 )(b)(iv) of the Companies Act, 1 956, the Report and the Accounts are
 being sent to all shareholders of the Company excluding the aforesaid
 information. Any shareholder interested in obtaining such particulars
 may write to the Vice President - Corporate Affairs, Secretarial &
 Legal and Company Secretary at the registered office of the Company.
 
 Your Directors express their thanks to all the officers of the Ministry
 of Shipping, Road Transport and Highways, Directorate General of
 Shipping, Ministry of Petroleum and Natural Gas and oil companies for
 the valuable help and co-operation extended by them to the Company.
 Your Directors also thank financial institutions and banks for their
 continued support to the Company. Your Directors also thank the
 shareholders of the Company for their sustained confidence reposed in
 the Company and its management.  Last but not the least, your Directors
 express their deep appreciation for the sincere and hard work put in by
 the floating as well as the shore based officers and staff of the
 Company.
 
                                    On behalf of the Board of Directors
 
                                                 DILIP D. KHATAU
                                                 Chairman
 
 May 22, 2008