Good Morning Ladies and Gentlemen,

On behalf of the Board of Directors and on my behalf, it is my pleasure to extend each one of you a warm welcome to the 30th Annual General Meeting of your company.

The world economy has continued to grow and trade between nations is increasing, leading to a sustained demand for shipping services. The Indian economy is also showing robust growth, with the fundamentals remaining strong and both manufacturing and service sectors showing double digit growth. We expect this momentum to continue for the next few years.

While the long term fundamentals for the Shipping sector looks attractive, the near term outlook remains very delicately balanced with the US economy showing signs of slowing down and increase in the supply of tonnage in the future.

Your Company’s focus on bulk and crude cargo and acquisition of large vessels is in line with our strategy of growing in sectors with a global positive outlook and that have synergies with new business of steel, power, and oil & gas.

Financial Performance

Against the background of uncertain market conditions, the year under review was a good year for your Company. Tonnage demand for the world merchant fleet did not grow as much as in the two previous years and the fleet growth was significantly higher compared with previous years. The result was a modest decline in the utilization rate, but still at the second highest level ever registered since 1990.

The continued buoyancy in the market for the second successive year resulted in your Company registering, on a consolidated basis, a Total Income of Rs. 1,026.87 Crs. (USD 228.90 million), as compared to 1,105.02 Crs. (USD 251.26 million) during the previous year on a stand alone basis. The decrease in earnings was largely due to the sale of four Suezmax tankers during the year.

Your Company has made a Net Profit of Rs. 388.92 Crs. (USD 86.70 million), after providing for Interest at Rs. 51.30 Crs. (USD 11.44 million) and Depreciation of Rs. 61.44 Crs. (USD 13.70 million).

The focus on providing value added logistics and supply chain management services and constant initiatives towards reduction of operating costs has enabled your Company to improve operating margins over the years. However, weakened market conditions and lower volumes resulting from the sale of Suezmax tankers had an impact on the operating margins. Operating Margin was lower at 49.78% for the year under review as compared to 61.38% last year.

The Debt Equity Ratio of your Company on a consolidated basis stood at 1.21:1 on 31st March, 2006, as compared to that on 1.52:1 on 31st March, 2005. The Ratio has strengthened despite debt raised during the year for the acquisition of the two VLCCs. It also needs to be mentioned that your Company has prepaid debt of Rs. 540 Crs. during the year.

Operating Performance

Your company’s emphasis on Energy Transportation continued during the year. In order to retain market share in this business, it is important to operate a modern fleet. With this perspective in mind, your Company has acquired two Very Large Crude Carriers (VLCC) during the year, MT Ashna and MT Smiti. Both the vessels are modern and built during the years 1999 and 2005 respectively.

During the year under review, your Company sold four of its Suezmax tankers. This transaction was undertaken, considering your Company’s requirement of investing in modern VLCC fleet. The sale of the Suezmax tankers has enabled your Company to take advantage of high asset valuations.

The Integrated Bulk and Petroleum Product Transportation Group (IBPPT) focusses on providing Dry Bulk and Petroleum Products transportation services to various refineries, steel mills, and traders along the Asian and South East Asian coast through various employment contracts including long term Contracts of Affreightment (COA’s).

Expansion plans

Keeping in line with opportunities available in Wet Bulk and Dry Bulk segment, your company is constantly scanning markets for purchase of appropriate vessels such as VLCCs, Aframax Tankers, Product Tankers, Capesize Bulk Carriers, Handymax and Handysize Bulk Carriers etc. These vessels will be acquired taking into consideration the business opportunities and the prevailing market values.

Management of the Environment

Your Company is the first Indian shipping company to be ISO 14001 certified for environment management system - both for onshore and on board vessels. The Ballast Management system of your company has been approved by the global Classification Societies. Your Company was also actively involved in promoting the “Clean Shore” campaign along with the Indian Coast Guard along with other social commitments.

Concerns of the Industry 

While tonnage tax has provided a certain degree of relief, the levy of plethora of other taxes like Service Tax, Fringe Benefit Tax (FBT), Withholding Tax, Seafarers’ Income Tax, etc, places Indian shipping companies at a severe disadvantage against global competition. The Shipping Industry through its representative organization – INSA – is actively taking up these issues with the various Ministries of the Government of India.  We feel that with the industry being a substantial foreign exchange earner, should find favour with the Government for a level playing field.

Acknowledgements

Before I end, I thank each of you for your co-operation, the employees for the dedicated efforts, our esteemed customers in India and abroad, Financial Institutions and Bankers for their support and the colleagues on my Board for their continuous guidance.

Thanking you,

Chairman

Bangalore

September 22, 2006

Note:  This does not purport to be the proceedings of the Thirtieth Annual General Meeting held at Bangalore on September 22, 2006.