Varun Shipping Company Ltd Auditor Reports

23^rd September, 2004

The Board of Directors,

Varun Shipping Company Limited,

Laxmi Building,

6 Shoorji Vallabhdas Marg,

Ballard Estate, Mumbai 400 001

We have examined the statements of Assets and Liabilities and Profit and Loss Account of your Company for the five financial years from 1999-00 to 2003-04 and for the quarter ended 30^th June, 2004 along with statement of Consolidated Assets and Liabilities and Consolidated Profit and Loss Account for the five financial years, 1999-00 to 2003-04 and for the quarter ended 30^th June, 2004 and certify the same to be correct. We have also examined the following statements of:

1) Accounting ratios,

2) Capitalisation statement,

3) Taxation statement,

4) Statement showing major notes to the accounts and accounting policies,

5) Age-wise analysis of Debtors,

6) Break-up of Loans and Advances, Unsecured loans and Investments,

7) Related party Transactions for past 3 years from 2001-02 to 2003-04 and for the quarter ended 30^th June, 2004.

8) Cash-flow Statement for the past 5 years from 1999-2000 to 2003-04 and for the quarter ended 30^th June, 2004

9) Consolidated cash flow statement for the past 5 years from 1999-00 to 2003-04 and for the quarter ended 30^th June, 2004

Prepared in accordance with accounts mentioned above and certify the same to be correct.

We have also examined the statement of Assets and Liabilities and Profit and Loss account for the five financial years from 1999-00 to 2003-04 and for the quarter ended 30^th June, 2004 of wholly owned subsidiary company VSC International Pte Ltd, Singapore. These statements are prepared from the accounts audited by PricewaterhouseCoopers, Singapore, Certified Public Accountants at Singapore. In preparation of these statements we have made such adjustments/regroupings as were, in our opinion appropriate in conformity with the accounting principles generally accepted in India.

The above statements have been drawn up in accordance with Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000.

Chartered Accountants

M.P. Antia

Partner

Membership No. : 7825

Place : Mumbai.