The Directors have pleasure in presenting the Forty-first Annual
 Report together with the audited statements of account of the Company
 for the 18 months period ended 30th September, 2012.
 
                                      (Figures in millions of Rupees)
 
                                           18 months   Previous Year
                                        period ended           ended
                                          30.09.2012      31.03.2011
 
 PROFIT BEFORE TAX                            377.27          168.22 
 
 Less: Provision for Taxation
 
 Current Tax                                   17.50           33.52
 
 Excess provision of Income-tax for 
 prior years written back                     (23.88)         (12.78)
 
 PROFIT AFTER TAX                             383.65          147.48
 
 Add: Surplus brought forward from 
 previous year                                942.92          934.92
 
 Amount available for appropriation         1,326.57        1,082.40
 
 Your Directors have recommended payment of dividend of Rs. 0.50 per
 equity share for the 18 months period ended 30th September, 2012, which
 will absorb Rs. 75.00 million. Additional amount of Rs. 12.17 million will
 be absorbed towards dividend distribution tax. After the above
 appropriations, your Directors propose to carry forward a balance of Rs.
 1,239.40 million in the Profit and Loss Account.
 
 Freight and charter hire income for the 18 months period ended 30th
 September, 2012 was Rs. 4,655.02 million compared to Rs. 4,914.27 million
 for the year ended 31st March, 2011. Profit before tax was Rs. 375.27
 million for the 18 months period ended 30th September, 2012 as against
 Rs. 168.22 million during the year ended 31st March, 2011 . Net profit
 after tax was Rs. 383.65 million for the 1 8 months period ended 30th
 September, 2012 as against Rs. 147.48 million during the year ended 31st
 March, 2011.
 
 During the 18 months period ended 30th September, 2012, Company sold
 its AHTS vessel Suvarna and Amba Bhargavi on Bareboat Charter cum
 Demise (BBCD) basis to Varun Cyprus Limited, Cyprus and Varun Asia Pte.
 Ltd., Singapore respectively and thereafter transferred the ownership
 of the vessels to the said companies. Further, the ownership of the
 vessels Amba Bhakti and Amba Bhavanee sold earlier on BBCD basis was
 transferred to Varun Asia Pte. Ltd., Singapore and the ownership of
 AHTS vessels Subhiksha and Sudaksha sold earlier on BBCD basis was
 transferred to Varun Cyprus Limited, Cyprus.  The Company has also sold
 its AHTS vessels Subhadra and Suchandra to Varun Cyprus Limited. Due to
 flexibility of crewing under foreign flag and financing and fiscal
 benefits available to companies incorporated overseas, the
 subsidiaries/associate companies overseas have been able to obtain
 long-term low cost financing and long-term contracts/employment for the
 vessels acquired by them. The sale has also enabled the Company to
 reduce its debt from Rs. 27,036.5 million as on 31st March, 2011 to
 Rs.13,434.7 million as on 30th September, 2012.
 
 The Company together with its associates is the 5th largest in the
 world in terms of number of fully refrigerated LPG carriers and 7th
 largest in the world in terms of cbm, i.e. cargo carrying capacity
 under 10,000   cbm category. The LPG carrier fleet presently owned
 and/or operated by the Company is the largest in India in terms of both
 fleet size and cargo carrying capacity.
 
 With a view to realign businesses and increase focus on individual
 growth strategies of each business, the Company together with other
 companies has proposed to rearrange its businesses by segregating its
 traditional shipping business, ship management (technical and
 commercial management) and shipping investment business (presently
 confined to holding investment in group companies) into separate
 entities through a Composite Scheme of Arrangement and Amalgamation
 (the Scheme) under the provisions of the Companies Act, 1956
 thereby resulting in enhancement of business prospects and
 shareholder''s value. The Company has received approval of Competition
 Commission of India and in-principle approvals from Bombay Stock
 Exchange Limited and National Stock Exchange of India Limited for the
 said Scheme.  The necessary application has also been made to the
 Hon''ble High Court of Judicature at Bombay for approval of the said
 Scheme.
 
 During the period under review, following companies became wholly owned
 subsidiary companies of the Company:
 
 Varun Gas Infrastructure Limited - the Company holds 1,000,000 equity
 shares of Rs.10 each.
 
 Varun Global Private Limited - the Company holds 100,000 equity shares
 of Rs.1 each.
 
 Varun Resources Private Limited - the Company holds 150,007,773 equity
 shares of Rs.1 each.
 
 Further, Varun Asia Pte. Ltd., Singapore was a wholly owned subsidiary
 of the Company for the period from 3rd April, 2012 to 28th September,
 2012 and is now an associate of the Company.
 
 Further, Varun Cyprus Limited, Cyprus became a wholly owned subsidiary
 of the Company on 15th December, 2011 - the Company holds 1,000 equity
 shares of US$ 1 each.
 
 The consolidated financial statements presented by the Company include
 financial information of its subsidiaries prepared in compliance with
 applicable Accounting Standards. The Ministry of Corporate Affairs,
 Government of India vide its Circular No. 51/12/2007-CL-III dated 8th
 February, 2011 has granted general exemption under Section 212(8) of
 the Companies Act, 1956 from attaching the balance sheet, profit and
 loss account and other documents of the subsidiary companies to the
 balance sheet of the Company, provided certain conditions are
 fulfilled. Accordingly, annual accounts of the subsidiary companies and
 the related detailed information will be made available to the Company
 and subsidiary companies'' shareholders seeking such information at any
 point of time. The annual accounts of the subsidiary companies will
 also be kept for inspection by any shareholder at Company''s Registered
 Office in Mumbai and that of the subsidiary companies concerned.
 
 Details of subsidiaries of the Company are covered in this Annual
 Report.
 
 Total foreign exchange earned and saved including deemed earnings of
 the Company for the 18 months period ended 30th September, 2012 was Rs.
 29,846.40 million and the foreign exchange used was Rs.19,174.61 million.
 
 As required under Section 217(2AA) 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, 1956 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 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. Arun Mehta retired as Chairman & Managing Director of the Company
 with effect from 1st October, 2012. Mr. Mehta has been instrumental in
 the growth and development of the Company through its various stages of
 expansion and under his able leadership the Company was listed on the
 stock exchanges in 1986 and became a force to reckon with for LPG
 transportation. The Board places on record its deep appreciation for
 the valuable guidance, contribution and support given by Mr. Mehta
 during his tenure of services with the Company.
 
 Mr. Praveen Singh and Mr. Khurshed M. Thanawalla retire by rotation and
 being eligible, offer themselves for re-appointment. Separate
 resolutions are being proposed for their respective re-appointments.
 
 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.
 
 In view of the continuing downturn in the shipping industry, the
 Company''s profitability is adversely affected. Consequently, since
 profits of the Company for the eighteen months period ended 30th
 September, 2012 are not adequate, the Company is applying to Central
 Government for seeking its approval for payment of minimum remuneration
 to Mr. Arun Mehta for the period 1st April, 2012 to 30th September,
 2012. Accordingly, separate resolution is being proposed at the ensuing
 Annual General meeting for your consideration.
 
 Your Directors have re-appointed Mr. Yudhishthir D. Khatau as Vice
 Chairman & Managing Director for a period from 25th August, 2012 to
 18th October, 2012 and as Chairman & Managing Director for the period
 from 19th October, 2012 to 24th August, 2017 subject to shareholders
 approval. Accordingly, resolution is being proposed for his
 re-appointment at the ensuing Annual General Meeting for your
 consideration.
 
 As required by Section 217(2A) 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
 219(1)(b) (iv) of the Companies Act, 1956, 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, Directorate General of Shipping, Ministry of Petroleum and
 Natural Gas, Indian Navy, Indian Coast Guard, Mercantile Marine
 Department, Class, oil companies and charterers for the valuable help
 and co-operation extended by them to the Company. Your Directors also
 thank the 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
 
                                                 YUDHISHTHIR D. KHATAU
 
                                        Chairman and Managing Director
 
 Mumbai, 29th November, 2012