Essar Shipping Limited (ESL) has recorded a Total Income of Rs. 280.70 crore (USD 60.30 million) for the quarter ended 30th June 2006 as compared to Rs. 225.77 crore (USD 51.62 million) for the corresponding period in the previous year, representing an increase of 24%. The Net Profit of the company was Rs. 36.97 crore (USD 7.81 million) for the quarter ended 30th June 2006 as compared to Rs. 110.37 crore (USD 25.23 million) for the corresponding period in the previous year. The reduction in the Net Profit for the quarter was on account of the following:

· The Net Profit for the quarter ended 30th June 2005 included profit on sale of vessels of Rs. 68.57 crore (USD 15.68 million).

The EBITDA for the quarter ended 30th June 2006 was Rs. 82.44 crore (USD 17.61 million) as compared to an EBITDA (adjusted for the Profit on Sale of Vessels) of Rs. 62.34 crore (USD 14.25 million) in the corresponding quarter of the previous year. The EBITDA margin on TCE basis for the quarter ended 30th June 2006 was 62.81% as against 59.92% during the quarter ended 30th June 2005.

The Net Fleet Operating Earnings (TCE basis) of the Company were higher at Rs. 131.25 crore (USD 28.26 million) for the quarter ended 30th June 2006, as compared to Rs. 104.03 crore (USD 23.78 million) during the corresponding quarter in the previous year, an increase of 26.17%, primarily due to in-chartering of tonnage for fulfilling contractual obligations.

Net Interest and Depreciation were Rs. 20.26 crore (USD 4.36 million) and Rs. 23.21 crore (USD 5.00 million) respectively, for the quarter ended June 30, 2006. During the corresponding period of the previous year, Interest and Depreciation were Rs. 4.27 crore (USD 0.98 million) and Rs. 9.50 crore (USD 2.17 million) respectively. The increase in Interest and Depreciation was due to acquisition of two VLCCs (Very Large Crude Carriers).

The above results were taken on record at the meeting of the Board of Directors held on 31st July 2006.

Unaudited Financial Results for the quarter ended June 30, 2006