31.03.2011     31.03.2010 
                                               Rupees         Rupees
 
 1.  CONTINGENT LIABILITIES:
 
 a) On account of guarantees executed by 
 the Company''s                             38,850,000    65,357,000 
 bankers secured by charge on some of the 
 Company''s vessels and fixed deposits of 
 Rs. 70.60 lacs (Previous year Rs. 246.24
 lacs).
 
 b) Claims against the Company not 
 acknowledged as debts.                    84,844,898   100,311,817
 
 c) Corporate guarantees to the banks on 
 behalf of VSC                          2,480,295,000  1,714,940,000 
 International Pte. Ltd. Singapore and 
 Ocean Race Shipping Company Limited, 
 Cyprus, in respect of loans taken by 
 them foracquisition of ships.
 
 d) Deputy Commissioner (CT) Chennai had raised a demand for Rs.
 83,284,324 for earlier years on account of levy of Commercial tax on
 Charter-hire in respect of some of our ships. The Company was in appeal
 against the same and the Appellate authority has given the ruling in
 favour of the Company. However the Deputy Commissioner (CT) Chennai 
 had preferred an appeal against the same with Sales Tax Appellate 
 Tribunal Chennai.
 
 The Appellate Tribunal vide its Order dated 1 0th November, 2008, has
 allowed the Appeal filed by the Revenue and has given the ruling in
 favour of the department. Company has been advised that this demand is
 not sustainable and accordingly Company has filed an Appeal against the
 said Order in the Madras High Court. Hence no provision has been made
 in the accounts.
 
 e) The Income Tax Officer has raised demand for Rs. 9.06 crores towards
 additional liability for Minimum Alternate Tax along with additional
 interest on account of disallowance of provision of Rs. 50 crores
 towards fluctuation in the exchange rate parity and provision for
 impairment of Rs. 12.62 crores. The Company has been advised that the
 demand is not sustainable and filed an Appeal against the said Order.
 Hence no provision has been made in the accounts.
 
 2.  Income from operations includes Rs.6.28 crores on account of
 services provided by two of the company''s vessels for ship to ship
 transfer of cargo and towing operation due to fire on board Maharshi
 Vamadeva, which is recoverable as per General Average Clause under
 Marine Hull Policy.
 
 3.  The Company has not entered into any derivative transactions by way
 of currency and/or interest rate swap.
 
 4.  Government of India, Ministry of Corporate Affairs vide
 Notification No.GSR 225(E) dated 31 st March, 2009 issued Companies
 (Accounting Standards) Amendment Rules 2009.
 
 In terms of the said notification referred above, exchange differences
 arising on reporting of long term foreign currency loans, so far as
 they relate to acquisition of depreciable capital assets, was required
 to be added to or deducted from the cost of the asset and depreciated
 over the balance life of the asset and in other cases it was required
 to be accumulated in a Foreign Currency Monetary Items Translation
 Difference Account and amortized over balance period of such long term
 liability but not beyond 31st March, 2011. The Government of India vide
 its notification dated 11th May, 2011, has extended the period upto
 31st March, 2012.
 
 Accordingly, gain arising due to change in exchange rate on foreign
 currency loans relating to acquisition of depreciable Capital asset
 amounting to Rs. 952.64 lacs are deducted (Previous year Rs. 26,831.82
 lacs) from the cost of such Capital Assets and in respect of other long
 term loans, gain of Rs. 635.44 lacs (Previous year Rs. 1,774.29 lacs)
 has been transferred to Foreign Currency Monetary Items Translation
 Difference Account.
 
 5.  The Company has not incurred an impairment loss during the year
 (Previous year Rs. Nil in respect of certain ships) in accordance with
 the Accounting Standard (AS 28). In the opinion of the management, the
 book value of these assets broadly reflect the earnings expectation
 from them.
 
 6.  Disclosure requirements under Revised Accounting Standard 15 on
 Employee benefits:
 
 a) Defined Contribution Plan
 
 Provision for defined contribution plan viz. Provident Fund and
 Superannuation Fund
 
 b) Defined Benefit Plans
 
 The Company offers to its employees defined benefit plans in the form
 of Gratuity and Leave encashment.
 
 No fund is created for payment of gratuity and leave wages and the
 company would pay the same out of its own funds as and when the same
 becomes payable.
 
 (c) The remuneration to the Directors is approved by the shareholders
 of the Company. However, due to inadequate profit during the year, the
 remuneration paid is within the limit as per the approval given by the
 Government of India, Ministry of Corporate Affairs vide its approval
 dated December 28, 2010.
 
 7.  Taxation:
 
 The Company has decided to opt out of the tonnage tax scheme from the
 Assessment Year 2011- 12 and therefore the provisions of Chapter XII-G
 of the Income Tax Act, 1961 are not applicable in computing the taxable
 income. Hence, provision for taxation is made on the basis of general
 provisions of the Income Tax Act.
 
 8.  Related Party Disclosures
 
 Related Party disclosures as required by AS-18 are given below A)
 Relationships
 
 1) Associate Company:-
 
 a.  VSC International Pte. Ltd.
 
 b.  Tarun Shipping and Industries Ltd.
 
 c.  Varun Asia Pte. Ltd.
 
 d.  Ocean Race Shipping Company Ltd.
 
 e.  Varun Cyprus Limited.
 
 f.  Sea Fidelity Shipping Company Limited.
 
 2) Companies under common control of the Promoters:-
 
 a) Companies with which transactions have taken place during the
 period.  i) Varun Corporation Ltd.
 
 ii) Realpoint (Mauritius) Ltd.
 
 b) Companies with which no transactions have taken place during the
 period.  i) Sunbeam Talc Pvt. Ltd.
 
 ii) Yuka Plantations Pvt. Ltd.
 
 3) Key Management Personnel:
 
 1) Mr. Arun M. Mehta
 
 2) Mr. Y.D. Khatau
 
 (2) Details of transactions relating to Key Management Personnel
 mentioned in A (3) above are as under: Remuneration: Rs. 39,728,096
 (for details refer note No. 10 (a)).
 
 (3) Details of sitting fees paid to non executive Directors are given
 in the report on corporate governance.
 
 9.  An amount of Rs. 95,264,426 (Previous year Rs. 2,683,182,096)
 towards decrease in rupee liability consequent to conversion of foreign
 currency loans at year end in respect of foreign currency loans for
 acquisition of assets has been deducted from the cost of fixed assets.
 
 10.  There are no Micro, Small and Medium Enterprises, as defined in
 the Micro, Small, Medium Enterprises Development Act, 2006, to whom the
 Company owes on account of principal amount together with the interest
 and accordingly no additional disclosures have been made.
 
 The above information regarding Micro, Small and Medium Enterprises,
 has been determined to the extent such parties have been identified on
 the basis of information available with the Company. This has been
 relied upon by the auditors.
 
 11.  No amounts referred to in clauses (a) to (d) of Section 205C(2) of
 the Companies Act, 1956 have remained unclaimed for a period of seven
 years from the date they became due for payment.
 
 12.  The Company is engaged only in shipping business and there are no
 separate reportable segments as per Accounting Standard 17.
 
 13.  Previous year''s figures are regrouped wherever necessary.