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Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Directors Report of Gujarat Pipavav Port Ltd.

Mar 31, 2025

The Directors of Gujarat Pipavav Port Limited (''the Company'') have pleasure in submitting their 33rd Annual Report together with the Audited Standalone and Consolidated Statement of Accounts for the financial year ended 31 March 2025.

1. FINANCIAL STATEMENTS & RESULTS:a. STANDALONE FINANCIAL RESULTS:

(INR Million)
Particulars	For the year ended 31 March 2025	For the year ended 31 March 2024
Operating Income	9,876.73	9,884.29
Less: Total Operating Expenditure	4,100.96	4,153.76
Operating Profit	5,775.77	5,730.53
Add: Other Income	810.47	786.97
Profit before Interest, Depreciation, Tax and Exceptional Item	6,586.24	6,517.50
Less: Interest	58.70	93.2
Less: Depreciation	1,170.62	1,156.01
Profit before exceptional items and tax	5,356.92	5,268.29
Less: Exceptional items	0	530.28
Profit Before Tax	5,356.92	4,738.01
Less: Taxes	1,365.32	1,200.03
Profit for the year after Tax	3,991.60	3,537.98
Total comprehensive income for the year	3,984.00	3,527.96

b. OPERATIONS:

The Company is engaged in Port Development and Operations at Pipavav Port, in Saurashtra Region of Gujarat State. The Company is operating the Port on a 30-year Concession vide Agreement dated 30 September 1998 with Gujarat Maritime Board (GMB) and Government of Gujarat. The Port handles Containers, Dry Bulk, Liquid, and RORO vessels and the performance details are as follows:

Particulars	For the year ended 31 March 2025	For the year ended 31 March 2024
Dry Bulk Cargo (Mn MT)	2.21	2.71
Liquid Cargo (Mn MT)	1.46	1.28
Containers (In TEUs)	694,899	808,464
RoRo (No. of Cars)	164,977	97,120

The de-growth in Dry Bulk cargo has been due to reduction in Fertiliser imports. Also, the Company has temporarily suspended Coal handling at the port due to operational reasons. The increase in Liquid cargo business is being driven by higher LPG imports into the country. The upgradation of the existing Liquid berth for handling partially loaded Very Large Gas Carriers (VLGCs) and supported by efficient rail evacuation continues to drive the increase in liquid cargo volume. The de-growth in Container business is due to unreliable schedule of the vessels and the skip calls. The rail product for bringing cars into Pipavav Port for exports is gaining good traction with the automobile companies and that has been the driver for growth in RoRo. Overall, the rail connectivity continues to be the Company''s USP.

During the year under review, the Company''s nature of business has remained unchanged.

c. REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

The Company has a shareholding of 38.8% in Pipavav Railway Corporation Limited (PRCL) and the salient features in Form AOC-1 are mentioned in Annexure B of the Directors Report. In view of the provisions of Section 2(6) of the Companies Act, 2013 (''the Act''), PRCL is an Associate Company and pursuant to the provisions of Section 129 of the Act, the Company is required to consolidate PRCL''s annual accounts with its own accounts. The Company''s share of Net Profit in PRCL is based on its Audited Accounts. The snapshot of the Consolidated Accounts is as follows:

(INR Million)
Particulars	For the year ended 31 March 2025	For the year ended 31 March 2024
Operating Income	9,876.73	9,884.29
Less: Total Operating Expenditure	4,100.96	4,153.76
Operating Profit	5,775.77	5,730.53
Add: Other Income	810.47	748.97
Profit before Interest, Depreciation, Tax and Exceptional Item	6,586.24	6,479.50
Less: Interest	58.70	93.2
Less: Depreciation	1,170.62	1,156.01
Profit before share of net profits of Associate Company	5,356.92	5,230.29
Add: Share of Net Profit of Associate Company accounted for using the Equity Method	166.90	94.82
Profit before exceptional items and tax	5,523.82	5,325.11
Less: Exceptional items	-	530.28
Profit before tax	5,523.82	4,794.83
Less: Taxes	1,554.86	1,374.83
Profit for the year after Tax	3,968.96	3,420.00
Total comprehensive income for the year	3,961.26	3,409.83

d. DIVIDEND:

The Board of Directors in the Meeting held on 6 November 2024 declared Interim Dividend of Rs. 4.00 per share and it has been paid. The Board is pleased to recommend a Final Dividend of Rs. 4.20 per share on the Company''s outstanding Equity Share Capital.

The Dividend is subject to the approval by the Members at the Annual General Meeting to be held on 4 September 2025 and will be paid on 16 September 2025, within the stipulated time limit to all Members whose names appear in the Register of Members, as of the close of business hours on 28 August 2025. The final dividend if approved by the Members would involve a cash outflow of Rs. 2,030.44 million. The Dividend Distribution Tax, if applicable, would be borne by the Member.

The Company has a Dividend Distribution Policy, which is available on the Company website https://www.apmterminals.com/en/pipavav/investors/eovernance

e. TRANSFER TO RESERVES:

The Board of Directors have not recommended any transfer of profit to reserves during the year under review. Hence, the entire amount of profit has been carried forward to the Statement of Profit and Loss.

f. REVISION OF FINANCIAL STATEMENT:

The Company has not carried out any revision in its financial statements in any of the three preceding financial years as per the requirement under Section 131 of the Act.

g. DEPOSITS:

The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013 ("the Act") read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details of deposits which are not in compliance with Chapter V of the Act is not applicable.

h. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT, 2013:

Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Company''s financial position, have occurred between the end of the financial year of the Company and date of this report.

i. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate considering the nature of its business and the scale of operations. During the year under review, no material or serious observation has been made by the Statutory Auditors and the Internal Auditors of the Company regarding inefficiency or inadequacy of such controls. Wherever suggested by the auditors, the control measures have been further strengthened and implemented.

j. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL:

No adverse orders have been passed by any Regulator or Court or Tribunal which can have impact on the Company''s status as a Going Concern and on its future operations.

k. PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES:

The transactions/contracts/arrangements entered by the Company with related party(ies) as defined under the provisions of Section 2(76) of the Companies Act, 2013, during the financial year under review, are in the ordinary course of business and at arms'' length. Therefore, they are exempt from the provisions of Section 188 of the Companies Act, 2013. But all such transactions have prior approval of the Audit Committee as per the requirement under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The related party transaction with Maersk A/S regarding Income from Port Operations is a material transaction as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Contract with Maersk A/S has been approved by the shareholders by way of Postal Ballot on 31 October 2022, pursuant to Regulation 23(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of Related Party Transactions are mentioned in Note 35(b) of the financial statements. The link for the Policy on Related Party Transactions is available on the Company website https://www.apmterminals.com/en/pipavav/investors/eovernance

l. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES:

The Company has neither provided nor accepted any loans, guarantees and securities. The Company does not have any investments except 38.8% shareholding in its Associate Company PRCL.

Further, the Company is engaged in the business of providing infrastructural facilities and is therefore exempt from the provisions of Section 186 of the Companies Act, 2013.

m. DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT, 2013:

The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is included in the report.

n. DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT, 2013:

The Company has not issued any sweat equity shares during the year under review and hence the provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 are not applicable.

o. DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT, 2013:

The Company does not have any Employees Stock Option Scheme and hence the provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 are not applicable.

p. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013:

During the year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014.

2. OUTLOOK:Global Economic Outlook:

The global economy demonstrated strong resilience during the Year 2024, as it grew by 3.2% as against the estimated growth rate of 3.3%, despite several headwinds such as inflation, geo-political challenges, supply chain disruptions etc. This strong resilience increased the growth rate expectations for the Year 2025 to 3.6%. Then the world was struck with a flurry of tariff announcements by the US challenging the existing rules while the new tariff rules are still not known. These announcements triggered counter-measures by some of the major trading partners and brought policy unpredictability. If this fluidity continues for a long period of time and is not addressed quickly, it will significantly slow down the global growth. Some of the global multilateral agencies have downgraded the growth rate for the Year 2025 from 3.6% to 2.8% and in the Year 2026 the growth rate is likely to be around 3%.

The US paused the tariff increase for 90 days for several countries but at the same time increased the tariff for China. After a tit-for-tat between the two major economies, they have mutually agreed to de-escalate the trade war and resolve differences through dialogue. This 90-day relief period is likely to surge the trade between the two countries as the US retailers stockpile the Chinese goods. This will likely lead to shift of capacities by the shipping lines to this busiest trade lane between China and the US, and might result into higher ocean freight rates and challenge in availability of the containers. The voyage duration will also be longer due to the vessels going through the Cape of Goodhope. The meltdown by the US towards China also demonstrates its dependability on the Chinese supply chain.

The swift escalation of trade tensions has led to extremely high level of policy ambiguity. It could also lead to high inflation and softening of consumption. Hence the multilateral agencies have lowered the US growth estimate by 0.9% at 1.8%. China''s growth estimate is lowered by

0.6% to 4% and the Euro zone is likely to grow at 0.8%. The Emerging Market economies are likely to grow at 3.7%, lower by 0.5%. In order to address the uncertainties in Trade Policy and to improve the growth prospects, the countries will need to quickly forge new trade agreements to ease the overall trade policy and facilitate broad-based gains.

The other important element that needs to be addressed swiftly by the economies is Climate Change impact. The countries need to formulate well designed policies to include investment in renewable and energy efficient technologies. Many countries are transitioning from fossil fuel to renewables to improve energy security and generate macroeconomic benefits including low carbon and resilient growth but this area of Climate Change needs increased attention of the Governments to address the rapidly increasing global warming.

Outlook of Indian Economy

The growth outlook for India is more stable as compared to the other countries. The Indian economy is likely to remain fastest growing major economy over two years and is projected to grow at 6.2% in the Year 2025 and at 6.3% in the Year 2026 supported by private consumption. The impact of heightened global trade tensions and growing uncertainty has led to slight moderation but the overall outlook continues to remain strong. This consistency signals not only the strength of India''s macroeconomic fundamentals but also its capacity to sustain momentum in a complex international environment. It also reaffirms India''s economic resilience and the country''s role of key driver to the global growth.

While the world grapples through the implications of trade tensions, the aging global population is witnessing a major demographic shift. The ''silver economy'' (population over 65 years of age) is increasing rapidly with far-reaching implications for the economies. The fall in the proportion of working-age individuals leads to higher dependency ratio wherein fewer workers support more retirees and increased healthcare spending. India has one huge advantage of favourable demographics and a large working class that provides strong growth to the consumption economy. This demographic advantage also has an element of concern i.e. regular creation of sufficient number of jobs for the youth. For that purpose the country needs robust and growing manufacturing sector. Unfortunately, the country''s manufacturing sector has remained stagnant over last 10 years. The manufacturing sector''s share of GDP was at 17.3% in the Year 2014 and remains at the same level in the Year 2024. India''s Exports as a share of GDP has fallen from 25.2% in the Year 2014 to 22.7% in the Year 2024. For a vibrant and strong manufacturing ecosystem in the country, the private sector and the Government authorities need to work closely to formulate an action plan. The Government of India introduced Production-linked incentives (PLI) scheme in the Year 2020 to provide financial incentives to manufacturers based on certain measurable outcomes. Over time, the PLI scheme has been extended to 14 sectors with an outlay of over USD 22 billion spread over five years. The manufacturing of the mobile phones in India has seen phenomenal success under the PLI scheme. This success needs to be replicated in other manufacturing industries namely, Textiles, Bulk Drugs, Pharmaceuticals, Readymade Garments, Electronics and Auto Components. These have been the core strength industries for the country in the past but somehow these industries have not been able to scale up taking the advantage of the PLI scheme. These industries need to evaluate the actions required to be taken by them and the support required from the Government for increasing their competitiveness in the global markets. But India does not have luxury of time to become competitive and needs to move quickly to present itself as a viable option to the global manufacturing companies looking for the alternatives for diversifying their supply chain.

One factor that clearly needs Government intervention is reduction in the Inland Logistics cost, if the Indian manufacturing wants to be globally competitive. This can be achieved by making the rail freight cost competitive compared to the road freight. While the last leg of connectivity of Western Dedicated Freight Corridor (DFC) to JNPT is yet to be commissioned, the ports in Gujarat are already connected to DFC since September 2021. DFC has definitely reduced the transit time by almost 50%, it has benefited the Rail operators as they are able to do multiple trips with the same rolling stock. As far as the Importers/ Exporters are concerned, they do not get any cost benefit for using DFC and hence their inland logistics cost remains the same. This mammoth rail infrastructure remains under- utilised while the road infrastructure continues to be under pressure. The intervention by the Government to make rail freight cost competitive will address the dual purpose of reduction in inland logistics cost and improvement in capacity utilisation of DFC. The road and rail transport needs to complement each other. While the long haul movement can be done through double stack container trains, the road transportation can take care of first and last mile connectivity doing multiple short haul movements.

Business Outlook

During the financial year ended 31st March 2025, the West Coast ports handled 17.5 million TEU of Containers as compared to 15.9 million TEU, an increase of over 10%. The Container volume at Pipavav reduced by 14% from 808,464 TEUs to 694,899 TEUs. This reduction has been due to unreliable schedule of the vessel calls at Pipavav resulting into the cargo owners moving the cargo to other ports providing multiple vessel connectivity options. The vessel schedule unreliability can be attributed to the Red Sea crisis making the voyage longer and increasing the transit time. It impacts the schedule of the vessel calls at the port thus the shipping lines consolidate the number of port calls.

Dry Bulk cargo volume at Pipavav reduced by 18% for the financial year ended 31st March 2025 from 2.71 million MT to 2.21 million MT. This reduction is due to lower Fertiliser volume and due to temporary suspension of handling Coal for operational reasons. The Fertiliser import by the Government is likely to increase during the current financial year and the port is geared to handle higher volume.

The Liquid cargo volume increased by 14% from 1.28 million MT to 1.46 million MT primarily driven by the increase in LPG volume. The rail evacuation of LPG is gaining good traction at Pipavav Port as it helps the Oil Marketing Companies to reach the LPG bottling plants located in the extended hinterland and at a much lower cost. The LPG tank farm operator at Pipavav is setting up the cryogenic tanks and with increase in pumping rate, the existing infrastructure will marginally increase the handling capacity at the berth. The Company''s Board of Directors have already approved the capex for setting up a new Liquid Berth. The statutory and regulatory approval required for the new Liquid Berth is in progress and is taking longer time than anticipated. As per the original plans the new berth was to get commissioned by December 2025 but due to the delays in statutory and regulatory approvals, the new berth is likely to be commissioned by December 2026.

In terms of RoRo volume, the Company handled Car exports of 164,977 units during the financial year ended 31st March 2025 as compared to 97,120 units during the previous financial year, an increase of over 70%. The Company had commissioned 42,000 sq. mtrs. of open stackyard during previous year. With increase in inland movement of cars by rail from the OEMs facilities to Pipavav, the Company has upgraded the rail yard infrastructure by addition of one more siding. This will enable the port to handle two trains simultaneously.

The rail evacuation of LPG and the Cars is gaining good traction amongst the customers. This will also help in increasing the Revenue of Pipavav Railway Corporation Limited (PRCL) the Associate company. The improvement in Container volume will further strengthen the rail product from Pipavav Port.

3. RISKS AND AREAS OF CONCERN:

The Geo-political situation and the Tariff war initiated by the US is creating uncertainty in global trade thus raising the risk of economic slowdown. The countries need to quickly resolve the tariff issues by closing their agreements and for broad based growth.

Also, the West Coast of India has seen increased frequency of cyclone since last few years leading to disruption in operations due to power failure from the grid supply. The Company is in the process of setting up a captive Genset facility that will cater to the power requirement for port operations, as part of the Business Continuity Plan.

4. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL:a. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:

Mr. Tejpreet Singh Chopra (DIN: 00317683) has ceased to be the Director from 23 May 2024, one year prior to the conclusion of his second consecutive tenure as an Independent Director on 29 July 2025. Mr. Samir Chaturvedi (DIN: 08911552) has been appointed as an Independent Director upto 11 November 2025. Ms. Monica Widhani (DIN: 07674403) has been appointed as an Independent Director upto 11 August 2026. Ms. Matangi Gowrishankar (DIN: 01518137) has been appointed as an Independent Director upto 2 August 2027.

In accordance with the provisions of the Act, none of the Independent Directors is liable to retire by rotation. The Managing Director of the Company is also not liable to retire by rotation.

Mr. Keld Pedersen (DIN: 07144184) has ceased to be the Director of the Company from 23 May 2024.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Jonathan Richard Goldner (DIN:09311803) and Mr. Steven Deloor (DIN: 10337166) are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Your Directors recommend their re-appointment.

The Key Managerial Personnel of the Company remains unchanged.

b. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received declaration from all Independent Directors under Section 149(6) of the Companies Act, 2013 confirming that they continue to fulfil the criteria of independence as required under Section 149 of the Companies Act, 2013 and Regulation 16 of the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Director of the Company.

The details regarding the appointment of Independent Directors and their tenure have been mentioned hereinabove.

The Company has been regularly conducting Familiarisation Programmes for its Independent Directors and has posted its details on the website https://www.apmterminals.com/en/pipavav/investors/independent-directors

In opinion of the Board, the Independent Directors possess integrity, requisite expertise and experience for acting as Independent Director of the Company.

The Independent Directors of the Company are exempt from undertaking the online proficiency test as required under Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

5. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES:a. BOARD MEETINGS:

The Board of Directors met four times during the year ended 31 March 2025 in accordance with the provisions of the Companies Act, 2013 and rules made thereunder. The particulars of the meetings held and attended by each Director during the financial year 2025 are given in the Corporate Governance Report forming part of this Annual Report.

b. DIRECTOR''S RESPONSIBILITY STATEMENT:

In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31 March 2025, the Board of Directors hereby confirm that:

a. in preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. such accounting policies have been selected and applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2025 and of the profit of the Company for that period;

c. proper and sufficient care was taken for maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts of the Company have been prepared on a Going Concern basis;

e. internal financial controls have been laid down by the Company and that such internal financial controls are adequate and operating effectively;

f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

c. NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee, a Sub-committee of Directors has been constituted by the Board in accordance with the requirements of Section 178 of the Act. The composition of the Committee is as follows:

1. Ms. Matangi Gowrishankar, Independent Director- Chairperson

2. Mr. Samir Chaturvedi, Independent Director

3. Mr. Jonathan Richard Goldner, Non-Executive Non- Independent Director

The Board has in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to the remuneration for Directors, Key Managerial Personnel and other members of Senior Management. The policy is available on https://www.apmterminals.com/en/pipavav/investors/governance

Major criteria defined in the policy framed for appointment of and payment of remuneration to the Directors of the Company, is as under:

a) While appointing a Director, it shall always be ensured that the candidate possesses appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical, operations or other disciplines related to the Company''s business.

b) In case of appointment as an Executive Director, the candidate must have the relevant technical or professional qualification and experience as considered necessary based on the job description of the position. In case no specific qualification or experience is prescribed or thought necessary for the position then, while recommending the appointment, the HR Department shall provide the job description to the Committee and justify that the qualification, experience and expertise of the recommended candidate is satisfactory for the relevant position. The Committee may also call for an expert opinion on the appropriateness of the qualification and experience of the candidate for the position of the Executive Director.

c) In case of appointment as a Non-Executive Director, the candidate must have a post graduate degree, diploma or a professional qualification in the field of his practice/ profession/ service and shall have not less than five years of working experience in such field as a professional in practice, advisor, consultant or as an employee. Provided that the Board may waive the requirement of qualification and/ or experience under this paragraph for a deserving candidate.

d) The Board, while making the appointment of a Director, shall also try to assess from the information available and from the interaction with the candidate that he is a fair achiever in his chosen field and that he is a person with integrity, diligence and an open mind.

e) While determining the remuneration of Executive Directors, Key Managerial Personnel and members of Senior Management, the Board shall consider following factors:

i) Criteria/ norms for determining the remuneration of such employees prescribed in the HR Policy.

ii) Existing remuneration drawn.

iii) Industry standards, if the data in this regard is available.

iv) The job description.

v) Qualifications and experience levels of the candidate.

vi) Remuneration drawn by the outgoing employee, in case the appointment is to fill a vacancy on the death, resignation, removal etc. of an existing employee.

vii) The remuneration drawn by other employees in the grade with matching qualifications and seniority, if applicable.

f) The remuneration payable to the Executive Directors, including the Performance Bonus and value of the perquisites, shall not exceed the permissible limits as mentioned within the provisions of the Companies Act, 2013. They shall not be eligible for any sitting fees for attending any meetings.

g) The Non-Executive Directors shall not be eligible to receive any remuneration from the Company. However, Non-Executive Independent Directors shall be paid sitting fees for attending the meeting of the Board or committees thereof and commission, as may be decided by the Board/ Shareholders from time to time. They shall also be eligible for reimbursement of out of pocket expenses for attending Board/ Committee Meetings. The Non-Executive Non-Independent Director representing Gujarat Maritime Board shall be eligible for sitting fee for attending the Board Meeting and for reimbursement of out of pocket expenses for attending the Meeting.

d. AUDIT COMMITTEE:

The Audit Committee, a Sub-committee of Directors was constituted by the Board pursuant to the provisions of Section 177 of the Companies Act, 2013. The composition of the Audit Committee is in conformity with the provisions of the said section. The Audit Committee comprises:

1. Ms. Monica Widhani, Independent Director- Chairperson

2. Ms. Matangi Gowrishankar, Independent Director

3. Mr. Samir Chaturvedi, Independent Director

4. Mr. Steven Deloor, Non-Executive Non- Independent Director

The scope and terms of reference of the Audit Committee is in accordance with the Companies Act, 2013 and it reviews the information as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the year under review, there were no instances of recommendation by the Audit Committee not being accepted by the Board of Directors of the Company.

The Company Secretary acts as Secretary of the Committee.

e. STAKEHOLDERS RELATIONSHIP COMMITTEE:

During the year under review, pursuant to Section 178 of the Companies Act, 2013, the Stakeholders Relationship Committee comprises the following Directors:

1. Ms. Monica Widhani, Independent Director- Chairperson

2. Ms. Matangi Gowrishankar, Independent Director

3. Mr. Girish Aggarwal, Managing Director

The Company Secretary acts as Secretary of the Stakeholders Relationship Committee.

f. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:

The Board of Directors of the Company has, as per the requirements under Section 178(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, framed the Whistle Blower Policy of the Company and the link of the policy on the website is https://www.apmterminals.com/en/pipavav/investors/governance

The Policy provides a formal mechanism for all employees of the Company to make disclosure about suspected fraud. It provides a designated phone number to directly report an instance. The Policy encourages its employees to immediately raise their concern to the respective Manager or to Head of HR whenever they any contravention with the Company''s Code of Conduct, the Code for Prevention of Insider Trading or fraud or any unethical behaviour. In case the concerned person is not comfortable in reporting the matter to his/her Manager or to the Manager''s Manager or to the Head of HR, he/she can report to the Chief Compliance Officer of the parent Company. The policy also provides direct access to the Chairperson of Audit Committee through her personal email id. During the year under review, no complaints have been reported for any fraud.

As part of APM Terminals, the Company shares the distinctive set of the Group''s Purpose and Core Values that drive the way we do business. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations, to the Group''s commitment to the UN Global Compact and our commitment to our people, customers and communities.

g. RISK MANAGEMENT POLICY:

The Board of Directors of the Company has designed Risk Management Policy and Guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Company''s businesses. It is available on the company website on https://www. apmterminals.com/en/pipavav/investors/governance It defines a structured approach to manage uncertainty and to make use of these in decision making pertaining to the business and corporate functions. Key business risks and their mitigation is considered in the annual/ strategic business plans and in periodic management reviews. The Company has Risk Management Committee, a sub-committee of Directors comprising:

1. Mr. Soren Brandt, Non-Executive Non- Independent Director- Chairperson

2. Mr. Samir Chaturvedi, Independent Director

3. Mr. Girish Aggarwal, Managing Director

h. CORPORATE SOCIAL RESPONSIBILITY POLICY:

As per the provisions of Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee, a sub-committee of Directors comprising:

1. Ms. Matangi Gowrishankar, Independent Director- Chairperson

2. Mr. Soren Brandt, Non-Executive Non- Independent Director

3. Mr. Girish Aggarwal, Managing Director

The Board of Directors of the Company has approved CSR Policy based on the recommendation of the CSR Committee. The Company has initiated activities in accordance with the said Policy and the details are presented in Annexure A.

The CSR Policy of the Company is available on the web-site https://www.apmterminals.com/en/pipavav/investors/governance

During the year ended 31 March 2025 the Company was required to spend Rs. 80.13 million towards the CSR activities and the Company has spent Rs. 81.06 million. The Company''s focus area of CSR activities are Education, Health, Safety & Environment, Women Empowerment, Skill Development and Rural Development Projects.

i. ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:

The Independent Directors held their meeting to evaluate the performance of each Non- Independent Director and of the Board as a whole. Each Board member''s attendance, participation and contribution of his/her expertise was evaluated. All Independent Directors were present for the Meeting. The Board also carried out the evaluation of each individual Director and various Board Committees did their respective Committee evaluation.

The Board also evaluated the quality, content and timeliness of the information flow between the Board and the Management including the board papers and other documents.

j. INTERNAL CONTROL SYSTEMS:

The Company has adequate internal control systems commensurate to the nature and size of its business and its complexities and these controls are operating satisfactorily. The adequacy and functioning of these internal controls is reviewed by the Internal Auditors from time to time and wherever necessary, the corrective measures are taken. The Internal Auditors report directly to the Audit Committee of the Company.

Internal control systems consisting of policies and procedures are designed to ensure reliability of financial reporting, timely feedback of achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and protected adequately.

k. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014:

In terms of the requirement under Section 197(12) of the Act, the Median Employee''s Remuneration of the Company is Rs. 2.58 million. The Managing Director''s remuneration was Rs. 33.12 million. The ratio of Managing Director''s remuneration to Median Remuneration of employees is 12.84.

With reference to the percentage increase in remuneration of the Key Managerial Personnel (KMPs) i.e. Managing Director, Chief Financial Officer and Company Secretary, the percentage increase was 9% for each of them. The average increase for KMPs works out to 9%.

The percentage increase in the median remuneration of employees in the financial year is 10%.

The Company has a total of 455 permanent employees on its rolls.

The Company follows the global practice of its parent regarding the Performance evaluation. The Group HR has introduced a tool of constant engagement through dialogues rather than an appraisal. The system is called Maximizing Performance, Alignment & Career Growth of our Talent (MPACT). The framework provides the tools which can be used to list individual''s objectives, reflect on performance, fill career growth roadmap, and ask for feedback to provide holistic view to initiate talent conversations. This two way dialogue provides an opportunity to clearly put across the expectations and have a transparent review. The process is people centric rather than merit matrices and percentage increases. All entities have shifted from performance ratings to performance conversations under the global process.

The Company''s Market Capitalization decreased by ~35% based on the closing price as of 31 March 2025 compared to 31 March 2024. The Net Worth is Rs. 21,188.54 million compared to Rs. 20,927.03 million as of the previous year.

The Annual Report as per Section 136 of the Companies Act, 2013 is being sent to the Members excluding the information on employees'' particulars under Rule 5 of the Companies (Appointment & Remuneration) Rules, 2014. Any Member who is interested in a copy of the employees'' particulars may write to the Company Secretary. The details will also be available for inspection by the Members at the Registered Office of the Company during the business hours on working days upto the date of the Company''s forthcoming Annual General Meeting.

The Company has paid Commission of Rs. 4.85 million to its Independent Directors pursuant to the shareholder''s approval obtained in the Annual General Meeting held on 13 August 2021.

l. PAYMENT OF REMUNERATION / COMMISSION TO DIRECTORS FROM HOLDING OR SUBSIDIARY COMPANIES:

The Directors are not paid remuneration/commission from any other Company.

m. DIVIDED DISTRIBUTION POLICY:

(a) The circumstances under which the shareholders can or cannot expect dividend

The Company shall endeavour to pay Dividend to its shareholders in a steady and consistent manner except the following circumstances:

(i) During no growth or weak growth in the trade requiring the Company to retain its earnings to be able to absorb unfavourable market conditions and for meeting the business requirements;

(ii) To meet its funding requirements for expansion and growth;

(iii) The Company''s Joint Venture with Indian Railways, Pipavav Railway Corporation Limited requires equity infusion from its shareholders.

During such times the Company may decide to retain the earnings instead of distributing to the shareholders. The distribution of Dividend can be by way of Interim Dividend and/or by way of Final Dividend.

(b) The financial parameters that will be considered while declaring dividend

The Company shall consider the following parameters while declaring dividend:

a. Current year''s profit:

i. after setting off carried over previous losses, if any;

ii. after providing for depreciation in accordance with the provisions of Schedule II of the Act;

iii. after transferring to reserves such amount as may be prescribed or as may be otherwise considered appropriate by the Board at its discretion.

b. The profits for any previous financial year(s):

i. after providing for depreciation in accordance with law;

ii. remaining undistributed; or

c. out of (i) or (ii) or both.

(iv) one off charges on account of change in law or rules or accounting policies or accounting standards (v) provisions or write offs on account of impairment in investments (long term or short term) (vi) noncash charges pertaining to amortization or ESOP or resulting from change in accounting policies or accounting standards.

The Company''s Board shall always consider various Internal and External factors while considering the quantum for declaration of dividend such as the overall Economic scenario of the country, the Export Import trade of the country, the statutory and regulatory provisions, the Company''s own performance, its profitability, its growth plans, the performance and funding requirements of its joint venture Rail Company and such other factors as may be deemed fit by the Board.

(d) Policy as to how the retained earnings will be utilised

The retained earnings would mainly be utilised for the purpose of the Company''s growth plans, the funding requirements of its joint venture Rail Company and for all such activities that in the Board''s opinion shall enhance the shareholder''s value.

(e) Provisions with regard to various classes of shares

The Company currently has only one class of shares namely Equity shares. In case the Company issues any other class of shares, this Policy shall be modified suitably for stipulating the parameters for distribution of dividend to all classes of shares.

The link for the Dividend Distribution Policy on the Company website is https://www.apmterminals.com/en/pipavav/investors/governance

6. AUDITORS AND REPORTS

The matters related to Auditors and their Reports are as under:

a. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2025:

There are no Audit Observations on the Standalone and Consolidated Financial Statements of the Company for the year ended 31 March 2025.

b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31 MARCH 2025:

Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to obtain Secretarial Audit Report from a Practicing Company Secretary. Accordingly, M/s Rathi and Associates, Company Secretaries have issued the Secretarial Audit Report for the year ended 31 March 2025.

c. STATUTORY AUDITORS:

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s Price Waterhouse Chartered Accountants LLP (Firm Regn. No. 012754N/N-500016) were Re-appointed as Statutory Auditors of the Company for a period of five years in the Annual General Meeting held on 6 August 2020. With completion of their second five year term, they shall cease to be the Statutory Auditors at the upcoming Annual General Meeting to be held on 4 September 2025. The Company proposes to appoint Statutory Auditors for a period of five years from the conclusion of 33rd Annual General Meeting until the conclusion of 38th Annual General Meeting.

d. COST AUDITORS:

The Company is engaged in providing Port Services and as per Notification dated 31 December 2014 issued by the Ministry of Corporate Affairs pursuant to Section 148 of the Companies Act, 2013, the Company is not required to appoint Cost Auditors.

e. SECRETARIAL AUDITORS:

Pursuant to the requirements under Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Rathi & Associates is proposed to be appointed as Secretarial Auditors for a period of five years from the financial year 2025-26.

f. DISCLOSURES UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace and has also established an Internal Complaints Committee, as stipulated by The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules thereunder. During the year under review, no complaint has been received in relation to sexual harassment at workplace.

g. FRAUD REPORTING:

During the year under review, there were no instances of material or serious fraud falling under Rule 13(1) of the Companies (Audit and Auditors) Rules, 2014, by officers or employees reported by the Statutory Auditors of the Company during the course of the audit.

7. OTHER DISCLOSURES:

Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under:

a. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company is engaged in the business of developing and operating a Port, Cargo handling incidental to Water Transport. Considering the nature of business activity, the particulars regarding conservation of energy and technology absorption as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are not applicable and have not been included.

As has been reported in the past, the Company sources over 45% of its power requirement through renewable energy through captive solar power and purchase of Green power. Subject to applicable rules and regulations of the Government of Gujarat, the Company is committed to increase its green power usage.

The foreign exchange earning was Rs. 5,186 million and outgo was Rs. 296.87 million during the period under review.

b. CHANGE IN SHARE CAPITAL:

The Company has not issued any shares during the year and its Share Capital for the year ended 31 March 2025 remains unchanged.

c. ABSTRACT OF ANNUAL RETURN ON THE WEBSITE:

Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, the Annual Return for the year ended 31st March 2025 is available on https://www.apmterminals.com/en/pipavav/investors/financial-results

d. SERVICE OF DOCUMENTS THROUGH ELECTRONIC MEANS

Subject to the applicable provisions of the Companies Act, 2013, all documents, including the and Annual Report shall be sent through electronic transmission in respect of members whose email IDs are registered in their demat account or have been provided by the members. The physical copy of annual report will be dispatched to shareholders only upon receiving a specific request for it.

e. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is in compliance with the mandatory Secretarial Standards.

f. UNCLAIMED AND UNPAID DIVIDENDS, AND TRANSFER OF SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Members who have not yet received/claimed their dividend entitlements are requested to contact the Company''s Registrar and Transfer Agents KFin Technologies Limited.

Accordingly, the Unclaimed Dividend for the financial year 2015-16, the Unclaimed Interim Dividend and Final Dividend for the financial year 2016-17 and the Unclaimed Interim Dividend for the financial year 2017-18 with the respective underlying shares have been transferred to IEPF. The members are requested to approach the office of IEPF to claim the amount and the underlying shares.

The amount of Unclaimed Dividend approved in the Annual General Meeting held on 9 August 2018 is due for transfer to IEPF during the financial year ending 31st March 2026. The unclaimed amount along with the underlying shares will be transferred to IEPF within the stipulated timelines. The concerned shareholders are being sent an intimation on their last known address regarding the proposed transfer of the unclaimed dividend amount and the underlying shares to IEPF.

g. CORPORATE GOVERNANCE

The report on Corporate Governance along with the report by the Statutory Auditors regarding compliance with the conditions of Corporate Governance has been furnished and forms part of the Annual Report.

h. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis report has been separately furnished and forms part of the Annual Report.

i. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING

In compliance with the Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility and Sustainability Report for the financial year ended 31st March, 2025 forms part of the Annual Report.

j. The provisions of Insolvency and Bankruptcy Code, 2016 are not applicable. The provisions of one time settlement are not applicable.8. ACKNOWLEDGEMENT AND APPRECIATION:

The Board of Directors of the Company thank the Customers, the Shareholders, the Vendors, the Company''s Bankers, Business Partners/ Associates for their continued support. The Government of India, the Government of Gujarat and the Gujarat Maritime Board have been encouraging the Company in implementing the growth plans for Pipavav Port. The Directors place on record their sincere appreciation for the strong character and commitment of the employees and for their invaluable contribution.

Mar 31, 2024

The Directors of Gujarat Pipavav Port Limited (''the Company'') have pleasure in submitting their 32nd Annual Report together with the Audited Standalone and Consolidated Statement of Accounts for the financial year ended 31 March 2024.

1. FINANCIAL STATEMENTS & RESULTS:a. STANDALONE FINANCIAL RESULTS:

(INR Million)
Particulars	For the year ended 31 March 2024	For the year ended 31 March 2023
Operating Income	9,884.29	9,169.50
Less: Total Operating Expenditure	4,153.76	4,148.09
Operating Profit	5,730.53	5,021.41
Add: Other Income	786.97	510.00
Profit before Interest, Depreciation, Tax and Exceptional Item	6,517.50	5,531.41
Less: Interest	93.20	79.55
Less: Depreciation	1,156.01	1,161.54
Profit before exceptional items and tax	5,268.29	4,290.32
Less: Exceptional items	530.28	371.67
Profit Before Tax	4,738.01	3,918.65
Less: Taxes	1,200.03	1,000.85
Profit for the year after Tax	3,537.98	2,917.80
Total comprehensive income for the year	3,527.96	2,924.50

b. OPERATIONS:

Particulars	For the year ended 31 March 2024	For the year ended 31 March 2023
Dry Bulk Cargo (Mn MT)	2.71	3.91
Liquid Cargo (Mn MT)	1.28	1.03
Containers (In TEUs)	808,464	764,034
RoRo (No. of Cars)	97,120	40,237

The de-growth in Dry Bulk cargo has been due to reduction in Fertiliser imports. Also, the Company has temporarily suspended Coal handling at the port due to operational reasons. The increase in Liquid cargo business is being driven by higher LPG imports into the country. The upgradation of the existing Liquid berth for handling partially loaded Very Large Gas Carriers (VLGCs) and supported by efficient rail evacuation is driving the increase in liquid cargo volume. The improvement in Container business is being driven by the addition of new service to Far East and to Middle East and better Exim volume. The rail product is also being used for RoRo business at Pipavav Port. The automobile companies are moving cars in the modified wagons from their manufacturing facility to the port for exports. Overall, the rail connectivity continues to be the Company''s USP and that is clearly reflecting in the growth in cargo volume.

c. REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

The Company has a shareholding of 38.8% in Pipavav Railway Corporation Limited (PRCL) and the salient features in Form AOC-1 are mentioned in Annexure B of the Directors Report. In view of the provisions of Section 2(6) of the Companies Act, 2013 (''the Act''), PRCL is an Associate Company and pursuant to the provisions of Section 129 of the Act, the Company is required to consolidate PRCL''s annual accounts with its own accounts. The Company''s share of Net Profit in PRCL is based on its Management represented numbers in view of pending statutory audit. The snapshot of the Consolidated Accounts is as follows:

(INR Million)
Particulars	For the year ended	For the year ended
	31 March 2024	31 March 2023
Operating Income	9,884.29	9,169.50
Less: Total Operating Expenditure	4,153.76	4,148.09
Operating Profit	5,730.53	5,021.41
Add: Other Income	748.97	510.00
Profit before Interest, Depreciation, Tax and Exceptional Item	6,479.50	5,531.41
Less: Interest	93.20	79.55
Less: Depreciation	1,156.01	1,161.54
Profit before share of net profits of Associate Company	5,230.29	4,290.32
Add: Share of Net Profit of Associate Company accounted for using the Equity Method	94.82	213.62
Profit before exceptional items and tax	5,325.11	4,503.94
Less: Exceptional items	530.28	371.67
Profit before tax	4,794.83	4,132.27
Less: Taxes	1,374.83	1,000.85
Profit for the year after Tax	3,420.00	3,131.42
Total comprehensive income for the year	3,409.83	3,138.15

d. DIVIDEND:

The Board of Directors in the Meeting held on 8 November 2023 declared Interim Dividend of Rs. 3.60 per share and it has been paid. The Board is pleased to recommend a Final Dividend of Rs. 3.70 per share on the Company''s outstanding Equity Share Capital.

The Dividend is subject to the approval by the Members at the Annual General Meeting to be held on 22 August 2024 and will be paid on 29 August 2024, within the stipulated time limit to all Members whose names appear in the Register of Members, as of the close of business hours on 15 August 2024. The final dividend if approved by the Members would involve a cash outflow of Rs. 1,788.72 million. The Dividend Distribution Tax, if applicable, would be borne by the Member.

The Company has a Dividend Distribution Policy, which is available on the Company website https://www.apmterminals.com/en/pipavav/investors/eovernance

e. TRANSFER TO RESERVES:

f. REVISION OF FINANCIAL STATEMENT:

The Company has not carried out any revision in its financial statements in any of the three preceding financial years as per the requirement under Section 131 of the Act.

g. DEPOSITS:

h. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT, 2013:

i. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:

j. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL:

No adverse orders have been passed by any Regulator or Court or Tribunal which can have impact on the Company''s status as a Going Concern and on its future operations.

k. PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES:

The related party transaction with Maersk A/S regarding Income from Port Operations is a material transaction as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Contract with Maersk A/S has been approved by the shareholders by way of Postal Ballot on 31 October 2022, pursuant to Regulation 23(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of Related Party Transactions are mentioned in Note 34(b) of the financial statements. The link for the Policy on Related Party Transactions is available on the Company website https://www.apmterminals.com/en/pipavav/investors/eovernance

l. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES:

The Company has neither provided nor accepted any loans, guarantees and securities. The Company does not have any investments except 38.8% shareholding in its Associate Company PRCL.

Further, the Company is engaged in the business of providing infrastructural facilities and is therefore exempt from the provisions of Section 186 of the Companies Act, 2013.

m. DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT, 2013:

n. DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT, 2013:

o. DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT, 2013:

p. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013:

2. OUTLOOK:Global Economic Outlook

Post Covid the global economic activity has been quite resilient despite various headwinds involving geo-political tensions, supply chain disruptions and significant interest rate hikes by the central banks aimed at restoring price stability. The global growth estimated at 3.2% in the Year 2023 is likely to be 3.3% in the Year 2024. The growth rate though remains lower than the historical annual average of 3.8%.

The advanced economies are likely to see increase in growth rate from 1.6% in the Year 2023 to 1.7% in the Year 2024 and to 1.8% in the Year 2025, to be mainly driven by the US economy and the Euro economy increasing from a lower base. With the energy price subsided and fall in inflation, the growth in real income is expected to drive the recovery through stronger household consumption. The emerging economies are likely to experience stable growth at 4.2% in the years 2024 and 2025 to be driven by India, Middle East and the Sub Saharan Africa Region. Within the emerging economies, China is projected to slowdown from 5.2% in the Year 2023 to 4.6% in the Year 2024 and to 4.1% in the Year 2025 due to the persisting weakness in the real estate sector and easing of the fiscal stimulus and consumption boost post pandemic. The Middle East Region is likely to grow from 2% in the Year 2023 to 2.8% in the Year 2024 and 4.2% in the Year 2025. The Sub Saharan Africa region is likely to grow from 3.4% in the Year 2023 to 3.8% in the Year 2024 and 4% in the Year 2025. India is likely to be the main driver of growth amongst the emerging economies.

India Economic Outlook

The Indian economy is projected for a strong growth of 6.8% in the Year 2024 and 6.5% in the Year 2025 with the rising working-age population and robust domestic demand. The rising income in urban areas has improved the consumer confidence and is expected to increase the consumption. The manufacturing and service sector has also reported strong growth in India. This in turn has led to the growth in bank credit. The structural measures have led to reduction in nonperforming loans and has improved capability to service debt. As a result, the asset quality has improved and the gross nonperforming assets are at a 10 year low of 3.2% as on September 2023. The Income tax receipts have increased by 17.7% year on year to nearly USD 235 billion for the financial year 2023-24. This strong increase in the Income tax collections is likely to improve India''s fiscal deficit as a percentage to the country''s GDP though the figures are yet to be released by the Government. The Government has been extensively driving the capital expenditure for infrastructure development and its initiative to support urban housing for middle income group is expected to continue the growth in real estate. An improved fiscal deficit, strong tax collections, continued capital expenditure for infrastructure development by the Government, robust banking sector and growing working-age population is an ideal combination of factors for the country''s future growth.

The Government of India has set an aggressive target of USD 2 trillion in exports of goods and services by the Year 2030. The country''s total exports in the financial year ended 31st March 2023 were USD 770 billion. India needs to grow at a substantive pace and the country''s manufacturing sector needs to integrate itself in the Global Value Chain by first playing on its areas of strength. The service sector export makes strong 10% contribution to the country''s GDP as per the data for the financial year ended 2023. Considering a large talent pool that is making a mark for itself in the global IT industry, this sector certainly has an important role to play in reaching the ambitious target of USD 2 trillion exports by the Year 2030. But the manufacturing sector also has a much larger role to play by increasing the goods exports. It will also help in job creation that matches to the education levels of the country''s labour force. The Performance Linked Incentive (PLI) scheme amounting to USD 28 billion introduced by the Government of India for 13 identified sectors, incentivises on incremental sales from the manufacturing done within the country. The objective of the scheme is twofold, one to incentivise the foreign manufacturers to start production in India and cater to the vast domestic market as well as export from the country and two is to incentivise the domestic manufacturers to expand their production and exports. Apart from the initiatives under the PLI scheme for the manufacturing sector, the other critical area requiring Government''s intervention is reduction in the inland logistics cost to make the Indian manufacturing competitive. Without addressing this major concern, the success of manufacturing sector will be a job half done.

With commissioning of the Western Dedicated Freight Corridor the transit time of the freight trains between National Capital Region and West coast ports has reduced to less then 36 hours from over 70 hours. The initiative definitely helps in faster movement of cargo and brings efficiency in planning the cargo movement from the manufacturing facility to the port and vice-a-versa. But the challenge regarding cost competitiveness for moving the cargo by rail still remains, due to cheaper road transport compared to rail. Consequently, railways have not seen any major shift in cargo from road to rail even after the Dedicated Freight Corridor became operational and the capacity utilisation level on the route remains below 40%. The rail tariff needs to be rationalised to decrease the unit cost and make Indian products competitive in the international markets.

Business Outlook

The Container volume on the West Coast of India increased 9% from 14.56 million TEUs in the financial year ended March 2023 to 15.92 million TEUs in the financial year ended March 2024. A large part of increase can be attributed to higher imports into the country with the India consumption story holding strong in the urban parts. The exports though continue to remain under pressure due to higher product cost and geo-political situation.

The container volume at Pipavav grew about 6% compared to the previous financial year. The Red Sea crisis has led to disruption in the scheduled vessel calls. The detour by the vessels around the Cape of Goodhope has led to increase in freight rates and extra sailing days ranging from 10 days to 14 days depending upon the destination in Europe and the US. The delayed vessel calls to the Indian ports is impacting the port operations as well as the rail evacuation because with the reduced transit time and increased speed, the freight trains have to remain idle at the ports waiting for the vessels to unload the import containers and to evacuate them to the northern hinterland.

For Dry bulk cargo, the Fertiliser imports have recently seen reduction on the West coast ports of the country. With the Government of India focusing on increased domestic production of Urea and carrying out a strong drive for usage of Nano-urea, the Urea import into the country is likely to reduce going forward. The import of other fertilisers namely, DAP, MOP etc is likely to continue in the near term. The Company has temporarily suspended Coal handling at the port due to operational reasons.

For Liquid cargo, the LPG import into the country is growing strong under the Pradhan Mantri Ujwala Yojana (PMUY) scheme. The rural India continues to purchase LPG for cooking under the PMUY scheme, after experiencing the convenience and the health benefits of using LPG over the other means. The West coast ports are seeing consistent increase of over 8-10% over last few years. With upgradation of the existing Liquid berth for handling partially loaded Very Large Gas Carriers (VLGCs) coupled with the LPG rail siding inside the port for cargo evacuation, Pipavav provides a strong overall value proposition for the Oil Marketing companies for wider distribution to the LPG bottling plants spread across the country. The Company is in process of seeking the necessary statutory and regulatory approvals for proposed new Liquid berth. The Company is hopeful of getting all the approvals in timely manner and complete the construction of the new berth by December 2025.

One of the success story of Government''s PLI scheme is the automobile sector reporting strong car exports from India. Pipavav has been serving the automobile companies located in the North and North-West hinterland of the country. The improved road connectivity to the port and movement of cars by rail has helped in increasing cars exports from Pipavav port. In a testimony to the country''s manufacturing capabilities in automobile sector, Honda cars exported their first batch of cars from India to Japan through Pipavav Port. In order to cater to the increased volume of car exports, Pipavav has recently completed development of first phase of open stackyard covering the area of 42,000 sq. mtrs. and has been put to use. The construction of the second phase covering an additional area of 20,000 sq. mtrs. is in progress and is likely to be completed by September 2024.

The Company has always been a strong proponent of cargo evacuation by rail. It has been making substantial investments over a period of time for safe, efficient and cost-effective movement of cargo by rail. The Company pioneered double stack container train operations in the country and has been handling double stack container trains since the year 2006. To provide the perspective about the port''s rail handling capabilities, approximately 65-70% of the Port''s container volume moves by rail.

In the case of Liquid cargo, after commissioning the LPG rail siding inside the port, the number of LPG rakes handled from Pipavav has been consistently increasing. Within a short time span from the commissioning of the siding, the port on an average handles about 51 LPG rakes per month.

In RoRo the automobile companies commenced the movement of cars by rail from December 2023 and the port is handling about 25 rakes per month.

On an overall basis all rakes put together, the port handles about 330 rakes per month for Containers, Fertiliser, LPG and Cars averaging about 11 rakes per day or one rake every two hours. Pipavav Port is in the forefront amongst all Indian ports in driving the Government of India''s initiative of increasing the market share of railways in freight handling. The Company shall continue building on its unique selling proposition of efficient rail evacuation of cargo to and from Pipavav Port.

3. RISKS AND AREAS OF CONCERN:

The Geo-political tensions such as escalation of conflict between Gaza and Israel into a wider region, continued attacks on the merchant vessels in the Red Sea and the ongoing war between Ukraine and Russia could adversely impact the global supply chain, increase the energy cost and in turn the inflation and price volatility. The conflict between Ukraine and Russia is dividing the global economy into different blocks and that could have adverse impact on the cross border movement of goods, technology, capital and the labour force.

The other major area of concern is the impact of global warming and climate change. The countries need to expedite their green initiatives to control the Green House Gas emissions and facilitate the transition to the green energy based on the agreements at the Conference of the UN Framework Convention on Climate Change. Facilitating free flow of low-carbon technologies from the advanced economies to the emerging economies for reduction in the emissions will support in meeting the targets for climate change.

4. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL:a. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:

Mrs. Hina Shah (DIN: 06664927) has ceased to be Director after completion of her tenure as an Independent Director on 30 July 2023. Mr. Tejpreet Singh Chopra (DIN: 00317683) has his second consecutive tenure as an Independent Director upto 29 July 2025. Mr. Samir Chaturvedi (DIN: 08911552) has been appointed as an Independent Director upto 11 November 2025. Ms. Monica Widhani (DIN: 07674403) has been appointed as an Independent Director upto 11 August 2026. Ms. Matangi Gowrishankar (DIN: 01518137) has been appointed as an Independent Director upto 2 August 2027.

In accordance with the provisions of the Act, none of the Independent Directors is liable to retire by rotation. The Managing Director of the Company is also not liable to retire by rotation.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Timothy John Smith (DIN:08526373) and Mr. Soren Brandt (DIN:00270435) are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. Your Directors recommend their re-appointment.

The Key Managerial Personnel of the Company remains unchanged.

b. DECLARATION BY INDEPENDENT DIRECTORS:

The details regarding the appointment of Independent Directors and their tenure have been mentioned hereinabove.

In opinion of the Board, the Independent Directors possess integrity, requisite expertise and experience for acting as Independent Director of the Company.

The Independent Directors of the Company are exempt from undertaking the online proficiency test as required under Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

5. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES:a. BOARD MEETINGS:

The Board of Directors met four times during the year ended 31 March 2024 in accordance with the provisions of the Companies Act, 2013 and rules made thereunder. The particulars of the meetings held and attended by each Director during the financial year 2024 are given in the Corporate Governance Report forming part of this Annual Report.

b. DIRECTOR''S RESPONSIBILITY STATEMENT:

In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31 March 2024, the Board of Directors hereby confirm that:

a. in preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. such accounting policies have been selected and applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2024 and of the profit of the Company for that period;

d. the annual accounts of the Company have been prepared on a Going Concern basis;

e. internal financial controls have been laid down by the Company and that such internal financial controls are adequate and operating effectively;

f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

c. NOMINATION AND REMUNERATION COMMITTEE:

1. Mr. Samir Chaturvedi, Chairman, Independent Director

2. Mr. Tejpreet Singh Chopra, Independent Director;

3. Ms. Matangi Gowrishankar, Independent Director; and

4. Mr. Jonathan Richard Goldner, Non-Executive Non- Independent Director

Major criteria defined in the policy framed for appointment of and payment of remuneration to the Directors of the Company, is as under:

e) While determining the remuneration of Executive Directors, Key Managerial Personnel and members of Senior Management, the Board shall consider following factors:

i) Criteria/ norms for determining the remuneration of such employees prescribed in the HR Policy.

ii) Existing remuneration drawn.

iii) Industry standards, if the data in this regard is available.

iv) The job description.

v) Qualifications and experience levels of the candidate.

vi) Remuneration drawn by the outgoing employee, in case the appointment is to fill a vacancy on the death, resignation, removal etc. of an existing employee.

vii) The remuneration drawn by other employees in the grade with matching qualifications and seniority, if applicable.

f) The remuneration payable to the Executive Directors, including the Performance Bonus and value of the perquisites, shall not

exceed the permissible limits as mentioned within the provisions of the Companies Act, 2013. They shall not be eligible for any

sitting fees for attending any meetings.

g) The Non-Executive Directors shall not be eligible to receive any remuneration from the Company. However, Non-Executive

Independent Directors shall be paid sitting fees for attending the meeting of the Board or committees thereof and commission, as may be decided by the Board/ Shareholders from time to time. They shall also be eligible for reimbursement of out of pocket expenses for attending Board/ Committee Meetings. The Non-Executive Non-Independent Director representing Gujarat Maritime Board shall be eligible for sitting fee for attending the Board Meeting and for reimbursement of out of pocket expenses for attending the Meeting.

d. AUDIT COMMITTEE:

1. Mr. Samir Chaturvedi, Chairman, Independent Director

2. Ms. Monica Widhani, Independent Director

3. Mr. Steven Deloor, Non-Executive Non- Independent Director

During the year under review, there were no instances of recommendation by the Audit Committee not being accepted by the Board of Directors of the Company.

The Company Secretary acts as Secretary of the Committee.

e. STAKEHOLDERS RELATIONSHIP COMMITTEE:

During the year under review, pursuant to Section 178 of the Companies Act, 2013, the Stakeholders Relationship Committee comprises the following Directors:

1. Mr. Tejpreet Singh Chopra, Chairman, Independent Director

2. Ms. Monica Widhani, Independent Director

3. Mr. Girish Aggarwal, Managing Director

The Company Secretary acts as Secretary of the Stakeholders Relationship Committee.

f. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:

The Policy provides a formal mechanism for all employees of the Company to make disclosure about suspected fraud. It provides a designated phone number to directly report an instance. The Policy encourages its employees to immediately raise their concern to the respective Manager or to Head of HR whenever they notice any contravention with the Company''s Code of Conduct, the Code for Prevention of Insider Trading or fraud or any unethical behaviour. In case the concerned person is not comfortable in reporting the matter to his/her Manager or to the Manager''s Manager or to the Head of HR, he/she can report to the Chief Compliance Officer of the parent Company. The policy also provides direct access to the Chairman of Audit Committee through his personal email id. During the year under review, no complaints have been reported for any fraud.

g. RISK MANAGEMENT POLICY:

The Board of Directors of the Company has designed Risk Management Policy and Guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Company''s businesses. It is available on the company website on https://www.apmterminals.com/en/pipavav/investors/governance It defines a structured approach to manage uncertainty and to make use of these in decision making pertaining to the business and corporate functions. Key business risks and their mitigation is considered in the annual/strategic business plans and in periodic management reviews. The Company has Risk Management Committee, a subcommittee of Directors comprising:

1. Mr. Soren Brandt, Chairman, Non-Executive Non- Independent Director

2. Mr. Samir Chaturvedi, Independent Director

3. Mr. Girish Aggarwal, Managing Director

h. CORPORATE SOCIAL RESPONSIBILITY POLICY:

1. Ms. Matangi Gowrishankar, Chairperson, Independent Director

2. Mr. Soren Brandt, Non-Executive Non- Independent Director

3. Mr. Girish Aggarwal, Managing Director

During the year ended 31 March 2024 the Company was required to spend Rs. 70.07 million towards the CSR activities and the Company has spent the entire budget amount. The Company''s focus area of CSR activities are Education, Health, Safety & Environment, Women Empowerment, Skill Development and Rural Development Projects.

i. ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:

The Independent Directors held their meeting to evaluate the performance of each Non- Independent Director and of the Board as a whole. Each Board member''s attendance, participation and contribution of his expertise was evaluated. All Independent Directors were present for the Meeting. The Board also carried out the evaluation of each individual Director and various Board Committees did their respective Committee evaluation.

The Board also evaluated the quality, content and timeliness of the information flow between the Board and the Management including the board papers and other documents.

j. INTERNAL CONTROL SYSTEMS:

k. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014:

In terms of the requirement under Section 197(12) of the Act, the Median Employee''s Remuneration of the Company is Rs. 2.68 million. The Managing Director''s remuneration was Rs. 23.43 million. The ratio of Managing Director''s remuneration to Median Remuneration of employees is 8.88

With reference to the percentage increase in remuneration of the Key Managerial Personnel (KMPs) i.e. Managing Director, Chief Financial Officer and Company Secretary, the Managing Director had joined the Company on 1st January 2023 and hence was not eligible for the increase in remuneration. The percentage increase in remuneration of the Chief Financial Officer and the Company Secretary was 10% and 12% respectively. The average increase for KMPs works out to approximately 11%.

The percentage increase in the median remuneration of employees in the financial year is 8%.

The Company has a total of 463 permanent employees on its rolls.

The Company''s Market Capitalization increased by ~83% based on the closing price as of 31 March 2024 compared to 31 March 2023. The Net Worth is Rs. 20,923.61 million compared to Rs. 20,783.15 million as of the previous year.

The Company has paid Commission of Rs. 5.14 million to its Independent Directors pursuant to the shareholder''s approval obtained in the Annual General Meeting held on 13 August 2021.

l. PAYMENT OF REMUNERATION / COMMISSION TO DIRECTORS FROM HOLDING OR SUBSIDIARY COMPANIES:

The Directors are not paid remuneration/commission from any other Company.

m. DIVIDED DISTRIBUTION POLICY:

(a) The circumstances under which the shareholders can or cannot expect dividend

The Company shall endeavour to pay Dividend to its shareholders in a steady and consistent manner except the following circumstances:

(i) During no growth or weak growth in the trade requiring the Company to retain its earnings to be able to absorb unfavourable market conditions and for meeting the business requirements;

(ii) To meet its funding requirements for expansion and growth;

(iii) The Company''s Joint Venture with Indian Railways, Pipavav Railway Corporation Limited requires equity infusion from its shareholders.

(b) The financial parameters that will be considered while declaring dividend

The Company shall consider the following parameters while declaring dividend:

a. Current year''s profit:

i. after setting off carried over previous losses, if any;

ii. after providing for depreciation in accordance with the provisions of Schedule II of the Act;

iii. after transferring to reserves such amount as may be prescribed or as may be otherwise considered appropriate by the Board at its discretion.

b. The profits for any previous financial year(s):

i. after providing for depreciation in accordance with law;

ii. remaining undistributed; or

c. out of (i) or (ii) or both.

In computing the above, the Board may at its discretion, subject to provisions of the law, exclude any or all of (i) extraordinary and exceptional income, generated from activities other than regular business (ii) extraordinary charges (iii) exceptional charges (iv) one off charges on account of change in law or rules or accounting policies or accounting standards (v) provisions or write offs on account of impairment in investments (long term or short term) (vi) noncash charges pertaining to amortization or ESOP or resulting from change in accounting policies or accounting standards.

(d) Policy as to how the retained earnings will be utilised

(e) Provisions with regard to various classes of shares

The link for the Dividend Policy on the Company website is https://www.apmterminals.com/en/pipavav/investors/eovernance

6. AUDITORS AND REPORTS

The matters related to Auditors and their Reports are as under:

a. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2024:

There are no Audit Observations on the Standalone Financial Statements of the Company for the year ended 31 March 2024. But the Consolidated Financial Statements carry an Audit Observation as follows:

Qualified Opinion

1. We have audited the accompanying consolidated financial statements of Gujarat Pipavav Port Limited (hereinafter referred to as the "Company") and its associate company (refer Note 34 to the attached consolidated financial statements), which comprise the consolidated Balance Sheet as at March 31, 2024, and the consolidated Statement of Profit and Loss (including Other Comprehensive Income), the consolidated Statement of Changes in Equity and the consolidated Statement of Cash Flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the consolidated financial statements").

2. In our opinion and to the best of our information and according to the explanations given to us, except for the indeterminate effect of the matter described in the Basis of Qualified section, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Company and its associate company as at March 31, 2024 and consolidated total comprehensive income (comprising of profit and other comprehensive loss), consolidated changes in equity and its consolidated cash flows for the year then ended.

Basis for Qualified Opinion

3. The consolidated financial statements include the Company''s share of total comprehensive income (comprising of profit and other comprehensive loss) of INR 90.68 million, based on unaudited financial statements as at and for the year ended March 31, 2024, in respect of its associate company. Our opinion on the consolidated financial statements in so far as it relates to the amounts and disclosures included for the year ended on March 31, 2024, in respect of this associate company is based solely on such unaudited financial statements of the associate company for the year ended on March 31, 2024, as furnished to us by the Management of the Company. In absence of availability of audited financial statements we are unable to comment on additional adjustments and/ disclosure that are required to be made to these consolidated financial statements.

4. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the "Auditor''s Responsibilities for the Audit of the Consolidated Financial Statements" section of our report. We are independent of the Company and its associate company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in India in terms of the Code of Ethics issued by the Institute of Chartered Accountants of India and the relevant provisions of the Act, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Consolidated IFC reportBasis for Qualified Opinion

1. According to the information and explanations given to us and based on our audit, material weakness has been identified in the operating effectiveness of the Company''s internal financial controls with reference to consolidated financial statements as at March 31, 2024 as the Company''s period end financial controls related to ensuring that the financial information of the associate company i.e., Pipavav Railway Corporation Limited (PRCL), included in the consolidated financial statements of the Company, is in accordance with the audited financial statements of the associate company, did not operate effectively. This could result in material misstatement in the consolidated financial statements.

2. A ''material weakness'' is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company''s annual or interim financial statements will not be prevented or detected on a timely basis.

Qualified Opinion

3. In our opinion, the Company and its associate company have, in all material respects, an adequate internal financial controls system with reference to consolidated financial statements based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI, and except for the possible effects of the material weakness described in the ''Basis for Qualified Opinion'' section above on the achievement of the objectives of the control criteria, the Company''s internal financial controls with reference to consolidated financial statements were operating effectively as of March 31, 2024.

4. We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements of the Company for the year ended March 31, 2024, and the material weakness affects our opinion on the consolidated financial statements of the Company and we have issued a qualified audit opinion on the consolidated financial statements. [Refer paragraph 3 of Independent Auditor''s Report on consolidated financial statements].

The report on the Consolidated Financial Statements is modified because Pipavav Railway Corporation Limited (PRCL) the Associate Company is yet to finalise its accounts and the statutory audit is pending. Hence, the Company''s share of profit from PRCL is based on its management representation numbers.

b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31 MARCH 2023:

c. STATUTORY AUDITORS:

d. COST AUDITORS:

e. DISCLOSURES UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

f. FRAUD REPORTING:

7. OTHER DISCLOSURES:

Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under:

a. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Apart from the captive solar power being generated through the solar panels installed over the warehouse of 10,000 sq. mtrs. as reported in the last year, the Company has concluded the purchase of Green power through a Renewable Energy supplier and has signed a Power Purchase Agreement. The Company currently sources about 45% of its Power requirement through Green Energy. The Government of Gujarat is reviewing the changes in its power policy to enable the companies procure increased green power. The Company is committed to increase its green power purchase as may be permitted under the power policy of Gujarat Government.

The foreign exchange earning was Rs. 2,416 million and outgo was Rs. 264 million during the period under review.

b. CHANGE IN SHARE CAPITAL:

The Company has not issued any shares during the year and its Share Capital for the year ended 31 March 2024 remains unchanged.

c. ABSTRACT OF ANNUAL RETURN ON THE WEBSITE:

Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, the Annual Return for the year ended 31st March 2024 is available on https://www.apmterminals.com/en/pipavav/investors/financial-results

d. SERVICE OF DOCUMENTS THROUGH ELECTRONIC MEANS

Subject to the applicable provisions of the Companies Act, 2013, all documents, including the Notice and Annual Report shall be sent through electronic transmission in respect of members whose email IDs are registered in their demat account or have been provided by the members. The physical copy of annual report will be dispatched to shareholders only upon receiving a specific request for it.

e. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is in compliance with the mandatory Secretarial Standards.

f. UNCLAIMED AND UNPAID DIVIDENDS, AND TRANSFER OF SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Members who have not yet received/claimed their dividend entitlements are requested to contact the Company''s Registrar and Transfer Agents KFin Technologies Limited.

Accordingly, the Unclaimed Dividend for the financial year 2015-16 and the Unclaimed Interim Dividend for the financial year 2016-17 along with the respective underlying shares have been transferred to IEPF. The members are requested to approach the office of IEPF to claim the amount and the underlying shares.

The amount of Unclaimed Dividend approved in the Annual General Meeting held on 10th August 2017 is due for transfer to IEPF during the financial year ending 31st March 2025. The unclaimed amount along with the underlying shares will be transferred to IEPF within the stipulated timelines. The concerned shareholders are being sent an intimation on their last known address regarding the proposed transfer of the unclaimed dividend amount and the underlying shares to IEPF.

g. CORPORATE GOVERNANCE

h. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis report has been separately furnished and forms part of the Annual Report.

i. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING

j. The provisions of Insolvency and Bankruptcy Code, 2016 are not applicable. The provisions of one time settlement are not applicable.

8. ACKNOWLEDGEMENT AND APPRECIATION:

The Board of Directors of the Company thank the Customers, the Shareholders, the Vendors, the Company''s Bankers, Business Partners/ Associates for their belief and the continued support. The Central Government, the State Government and Gujarat Maritime Board have been encouraging the Company in implementing the growth plans for the Port. The Directors place on record their sincere appreciation for the strong character and commitment of the employees and for their invaluable contribution.

Mar 31, 2023

The Directors of Gujarat Pipavav Port Limited (''the Company'') have pleasure in submitting their 31st Annual Report to the Members of the Company together with the Audited Standalone and Consolidated Statement of Accounts for the financial year ended 31 March 2023.

1. FINANCIAL STATEMENTS & RESULTS:a. STANDALONE FINANCIAL RESULTS:

(INR Million)
Particulars	For the year ended	For the year ended
	31 March 2023	31 March 2022
Operating Income	9,169.50	7,413.65
Less: Total Operating Expenditure	4,148.09	3,309.78
Operating Profit	5,021.41	4,103.87
Add: Other Income	510.00	307.60
Profit before Interest, Depreciation, Tax and Exceptional Item	5,531.41	4,411.47
Less: Interest	79.55	47.66
Less: Depreciation	1,161.54	1,292.71
Profit before exceptional items and tax	4,290.32	3,071.10
Less: Exceptional items	371.67	46.09
Profit Before Tax	3,918.65	3,025.01
Less: Taxes	1,000.85	1,092.64
Profit for the year after Tax	2,917.80	1,932.37
Total comprehensive income for the year	2,924.50	1,935.97

b. OPERATIONS:

The Company is engaged in Port Development and Operations at Pipavav Port, in Saurashtra Region of Gujarat State. It has a 30-year Concession vide Agreement dated 30 September 1998 from Gujarat Maritime Board (GMB). The Port located in Southwest of Gujarat handles Containers, Dry Bulk, Liquid, and RORO vessels. The performance details are as follows:

Particulars	For the year ended 31 March 2023	For the year ended 31 March 2022
Dry Bulk Cargo (Mn MT)	3.91	4.19
Liquid Cargo (Mn MT)	1.03	0.81
Containers (In TEUs)	764,034	627,747
RORO (No. of Cars)	40,237	23,874

The improvement in Container volume is primarily driven by addition of new service to the Middle East, during the year. The Liquid Cargo volume is seeing good traction with rail evacuation of LPG working well economically for the customers. The Company has added new customer in RoRo for car exports, resulting into improvement in the volume. In the case of Dry Bulk cargo, with the captive jetty in the neighbourhood getting operational, the volume is back to the pre-covid and pre-cyclone levels.

c. REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

The Company holds 38.8% shares in Pipavav Railway Corporation Limited (PRCL) and the salient features in Form AOC-1 are mentioned in Annexure B. In view of the provisions of Section 2(6) of the Companies Act, 2013 (''the Act''), PRCL is an Associate Company and pursuant to the provisions of Section 129 of the Act, the Company is required to consolidate PRCL''s annual accounts with its own accounts. The

Company''s share of Net Profit in PRCL is based on Management representation numbers in view of pending finalisation of accounts and completion of PRCL''s statutory audit. A snapshot of the Consolidated Accounts is as follows:

(INR Million)
Particulars	For the year ended	For the year ended
	31 March 2023	31 March 2022
Operating Income	9,169.50	7,413.65
Less: Total Operating Expenditure	4,148.09	3,309.78
Operating Profit	5,021.41	4,103.87
Add: Other Income	510.00	307.60
Profit before Interest, Depreciation, Tax and Exceptional Item	5,531.41	4,411.47
Less: Interest	79.55	47.66
Less: Depreciation	1,161.54	1,292.71
Profit before share of net profits of investments	4,290.32	3,071.10
Add: Share of Net Profit of Associate Company accounted for using the Equity Method	213.62	40.92
Profit before exceptional items and tax	4,503.94	3,112.02
Less: Exceptional items	371.67	46.09
Profit before tax	4,132.27	3,065.93
Less: Taxes	1,000.85	1,092.64
Profit for the year after Tax	3,131.42	1,973.29
Total comprehensive income for the year	3,138.15	1,976.85

d. DIVIDEND:

The Board of Directors in their Meeting held on 9th November 2022 declared Interim Dividend of Rs. 2.70 per share and it has been paid. The Board is pleased to recommend a Final Dividend of Rs. 3.40 per share on the Company''s outstanding Equity Share Capital.

The Dividend is subject to the approval by the Members at the Annual General Meeting to be held on 4 August 2023 and will be paid on 10 August 2023, within the stipulated time limit to all Members whose Names appear in the Register of Members, as of the close of business hours on 26 July 2023. The final dividend if approved by the Members would involve a cash outflow of Rs. 1,643.69 million. The Dividend Distribution Tax, if applicable, would be borne by the Member.

The Company has a Dividend Distribution Policy, which is available on the website https://www.apmterminals.com/en/pipavav/investors/eovernance

e. TRANSFER TO RESERVES:

f. REVISION OF FINANCIAL STATEMENT:

The Company has not carried out any revision in its financial statements in any of the three preceding financial years as per the requirement under Section 131 of the Act.

g. DEPOSITS:

h. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT, 2013:

i. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:

j. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL:

No adverse orders have been passed by any Regulator or Court or Tribunal which can have impact on the Company''s status as a Going Concern and on its future operations.

k. PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES:

The related party transaction with Maersk A/S regarding Income from Port Operations is a material transaction as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Contract with Maersk A/S has been approved by the shareholders by way of Postal Ballot on 16th March 2020, pursuant to Regulation 23(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of Related Party Transactions are mentioned in Note 34(b) of the financial statements. The link for the Policy on Related Party Transactions is https://www.apmterminals.com/en/pipavav/investors/governance

l. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES:

The Company has neither provided nor accepted any loans, guarantees and securities. The Company does not have any investments except 38.8% shareholding in its Associate Company PRCL.

Further, the Company is engaged in the business of providing infrastructural facilities and is therefore exempt from the provisions of Section 186 of the Companies Act, 2013.

m. DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT, 2013:

n. DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT, 2013:

o. DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT, 2013:

p. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013:

2. OUTLOOK:

The World Health Organisation has declared Covid-19 is no longer a global health emergency. Though it also mentions that the virus is evolving and remains a global health threat but at a lower level of concern. This is good news and a much needed relief for the global trade considering the challenges the vessels and its crew had to face during the pandemic and should also help the shipping lines bring reliability to their sailing schedules.

Considering the potential fall out of the continuing Russia- Ukraine conflict on the inflationary pressures in Europe, the EU provided large budgetary support measures to help the households weather the energy crisis. But the non-Russian LNG deliveries and a mild winter led to oil and gas prices trending downwards from their peak in mid- 2022. Also, India one of the largest importers of crude oil in the international crude market, has been fulfilling its crude oil requirement through much cheaper crude oil imports from Russia post the economic sanctions imposed by the Western countries. India''s imports from Saudi Arabia and Iraq reduced substantially thus leading to reduction in the crude oil

prices in the international markets.

The interest rate hike by the advanced economies succeeded in cooling the demand towards the end of Year 2022 but the failure of a few banks in the US triggered a sharp decline in global banking stocks. In order to prevent impacting other banks, several Central Banks intervened to provide extraordinary liquidity and to calm the situation, the Governments sent a message to depositors about safety of their deposits. The central banks of the advanced economies are trying to balance between taming inflation, sustaining economic growth and maintain financial stability. All these events have resulted into a somewhat rocky and turbulent recovery for some of the economies around the world.

The Commodity prices have moderated since last year, the debt levels of the countries remain high but the recent financial turmoil has caused uncertainty in the growth outlook. The IMF estimates the global output growth to be at 2.8% for the Year 2023, down from 3.4% during the Year 2022. Within that the advanced economies are slated for a strong decline at 1.3% from 2.6% and the growth is likely to be driven by the emerging economies.

India recorded 6.6% GDP growth in FY 2022-23 and is likely to be impacted by the decline in Exports to the advanced economies. Hence the GDP for FY 2023-24 is likely to drop to 5.7% and then is likely to sharply increase to 7% in FY 2024-25 as per the OECD estimates. Government of India has been expanding the infrastructure spend in the country by constructing highways and dedicated rail freight corridors. The gross direct tax collections for the FY 2022-23 have reported a strong increase of 20.33% year on year. The net direct tax collections (after paying refunds) increased by 17.63% year on year. As per the reports, this buoyancy in tax collections is the highest ever in last 15 years mainly driven by higher profitability of companies, more number of companies opting for the standard tax rates after completing their tax holidays and improved overall tax compliance. Also, increased digitisation has brought a bigger share of the economy under the tax administration.

With China opening up and inflation impacting the western economies, the situation of port congestion has eased, and global supply chain has stabilised. The availability of containers has changed from shortage to excess supply. The ocean freight rates for the shipping lines have been on a downward trend as compared to last two years but they remain high as compared to the pre-covid days. As per the estimates of World Trade Organisation, the global trade is likely to be at 1.7% in the year 2023 lower than its 12-year average of 2.7% due to high inflation, monetary tightening and financial uncertainty but it is likely to sharply improve in the year 2024 to 3.2%.

The Container volume on the West Coast of India saw an increase of 4% during the year at 14.56 million TEUs as compared to 13.95 million TEUs in the previous year. The increase is driven mainly by the imports into the country while the Export volume to the Western countries have been impacted. As for the Company, with the shipping line calls stabilising, the container volume has shown an increase of about 21% compared to previous year. Considering the economic situation in the western countries, the Exports from India to the US and Europe are likely to remain under pressure in short term. But the Exports to the Middle East and to the Far East are likely to remain steady. The Imports into India are likely to see improvement with the consumption economy continuing to do well.

As far as the Dry Bulk volume is concerned, during last year the Company commissioned additional warehouse of 10,000 sq. mtrs. for storage of fertiliser. In order to increase the rake loading capacity and to enable faster evacuation of fertiliser cargo, the Company has now commissioned two additional wagon loading equipment on the rail line. It will also provide operational flexibility in simultaneously handling different types of fertiliser cargo for loading on rakes.

As far as the Liquid Cargo business is concerned, the Company has upgraded its existing Liquid berth for handling partially loaded Very Large Gas Carriers (VLGCs). The work has been completed and necessary application has been submitted to the government authorities seeking approval for handling partially loaded VLGCs.

The Company has been consistently investing in Port infrastructure and for development on the waterfront as well as on the land side, as per the requirement of the trade from time to time. Based on the discussions with the business partners and considering the potential growth opportunities for handling higher liquid cargo volume, the Company proposes to construct an additional Liquid Berth at an estimated cost of USD 90 million subject to regulatory approvals. Once completed, it will increase the Liquid cargo handling capacity at Pipavav from 2 million MT to 5.2 million MT.

The Car exports from Pipavav have shown consistent improvement with addition of new customer automobile companies. The Company along with its business partner continues to explore new opportunities in RoRo.

In an endeavour to improve the local ecosystem around the port, the Company has entered into an agreement for hiring of a warehouse on a long-term lease at the Multi Modal Logistics Park being developed outside the port. It will help in providing warehousing solutions to the local cargo customers from immediate hinterland.

3. RISKS AND AREAS OF CONCERN:

While the macro indicators for India are positive, the consumption story of the country is holding strong, the Exports from India into the Western economies need to grow. The sectors like textiles, apparels, handicrafts, leather goods are high employment generating sectors and the increase in their share of exports into the global trade will have a multiplier effect on India''s growth. The western economies are under pressure due to the prevailing inflation. If India has to increase its share in global trade, then the country''s exports need to become competitive

in the fiercely competitive international market. In that context, along with the Government of India, the respective State Governments have an equally important role in providing necessary support to industries, facilitate seamless end to end logistics and remove inefficiencies in the system.

4. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL:a. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:

Mrs. Hina Shah (DIN: 06664927) has her second consecutive tenure as an Independent Director upto 29 July 2023. Mr. Tejpreet Singh Chopra (DIN: 00317683) has his second consecutive tenure as an Independent Director upto 29 July 2025. Mr. Samir Chaturvedi (DIN: 08911552) has been appointed as an Independent Director upto 11 November 2025. Ms. Monica Widhani (DIN: 07674403) has been appointed as an Independent Director upto 11 August 2026. Ms. Matangi Gowrishankar (DIN: 01518137) has been appointed as an Independent Director upto 2 August 2027. The Company has obtained Shareholder''s approval by way of Remote E-voting for her appointment.

In accordance with the provisions of the Act, none of the Independent Directors is liable to retire by rotation. The Managing Director of the Company is also not liable to retire by rotation.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Keld Pedersen (DIN: 07144184) and Mr. Jonathan Richard Goldner (DIN: 09311803) are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Your Directors recommend their re-appointment.

b. DECLARATION BY INDEPENDENT DIRECTORS:

The details regarding the appointment of Independent Directors and their tenure have been mentioned hereinabove.

In the opinion of the Board, the Independent Directors possess integrity, requisite expertise and experience for acting as an Independent Director of the Company.

The Independent Directors of the Company are exempt from undertaking the online proficiency test as required under Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

5. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES:a. BOARD MEETINGS:

The Board of Directors met four times during the year ended 31 March 2023 in accordance with the provisions of the Companies Act, 2013 and rules made thereunder. The particulars of the meetings held and attended by each Director during the financial year 2023 are given in the Corporate Governance Report which forms part of this Annual Report.

b. DIRECTOR''S RESPONSIBILITY STATEMENT:

In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31 March 2023, the Board of Directors hereby confirm that:

a. in preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. such accounting policies have been selected and applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2023 and of the profit of the Company for that period;

d. the annual accounts of the Company have been prepared on a Going Concern basis;

e. internal financial controls have been laid down by the Company and that such internal financial controls are adequate and operating effectively;

f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

c. NOMINATION AND REMUNERATION COMMITTEE:

1. Mr. Samir Chaturvedi, Chairman, Independent Director

2. Mr. Tejpreet Singh Chopra, Independent Director;

3. Ms. Matangi Gowrishankar, Independent Director; and

4. Mr. Jonathan Richard Goldner, Non-Executive Non- Independent Director

Major criteria defined in the policy framed for appointment of and payment of remuneration to the Directors of the Company, is as under:

e) While determining the remuneration of Executive Directors, Key Managerial Personnel and members of Senior Management, the Board shall consider following factors:

i) Criteria/ norms for determining the remuneration of such employees prescribed in the HR Policy.

ii) Existing remuneration drawn.

iii) Industry standards, if the data in this regard is available.

iv) The job description.

v) Qualifications and experience levels of the candidate.

vi) Remuneration drawn by the outgoing employee, in case the appointment is to fill a vacancy on the death, resignation, removal etc. of an existing employee.

vii) The remuneration drawn by other employees in the grade with matching qualifications and seniority, if applicable.

d. AUDIT COMMITTEE:

1. Mr. Samir Chaturvedi, Chairman, Independent Director

2. Mrs. Hina Shah, Independent Director

3. Ms. Monica Widhani, Independent Director

4. Mr. Maarten Degryse, Non-Executive Non- Independent Director

During the year under review, there were no instances of recommendation by the Audit Committee not being accepted by the Board of Directors of the Company.

The Company Secretary acts as Secretary of the Committee.

e. STAKEHOLDERS RELATIONSHIP COMMITTEE:

During the year under review, pursuant to Section 178 of the Companies Act, 2013, the Stakeholders Relationship Committee comprised the following Directors:

1. Mr. Tejpreet Singh Chopra, Chairman, Independent Director

2. Mrs. Hina Shah, Independent Director

3. Mr. Girish Aggarwal, Managing Director

The Company Secretary acts as Secretary of the Stakeholders Relationship Committee.

f. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:

The Policy provides a formal mechanism for all employees of the Company to make disclosure about suspected fraud. It provides a designated phone number to directly report an instance. The Policy encourages its employees to immediately raise his/her concern to the respective Manager or to Head of HR whenever they notice any contravention with the Company''s Code of Conduct, the Code for Prevention of Insider Trading or fraud or any unethical behaviour. In case the concerned person is not comfortable in reporting the matter to his/her Manager or to the Manager''s Manager or to the Head of HR, he/she can report to the Chief Compliance Officer of the parent Company. The policy also provides direct access to the Chairman of Audit Committee through his personal email id. During the year under review, no complaints have been reported for any fraud.

g. RISK MANAGEMENT POLICY:

The Board of Directors of the Company has designed Risk Management Policy and Guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Company''s businesses. It defines a structured approach to manage uncertainty and to make use of these in decision making pertaining to the business and corporate functions. Key business risks and their mitigation is considered in the annual/strategic business plans and in periodic management reviews. The Company has Risk Management Committee, a sub-committee of Directors comprising:

1. Mr. Julian Bevis, Chairman, Non-Executive Non- Independent Director

2. Mr. Soren Brandt, Non-Executive Non- Independent Director

3. Mr. Samir Chaturvedi, Independent Director

4. Mr. Girish Aggarwal, Managing Director

h. CORPORATE SOCIAL RESPONSIBILITY POLICY:

1. Mrs. Hina Shah, Chairperson, Independent Director

2. Mr. Soren Brandt, Non-Executive Non- Independent Director

3. Mr. Julian Bevis, Non-Executive Non- Independent Director

4. Mr. Girish Aggarwal, Managing Director

The CSR Policy of the Company is available on the web-site https://www.apmterminals.com/en/pipavav/investors/governance

During the year ended 31 March 2023 the Company was required to spend Rs. 67.21 million towards the CSR activities and the Company has spent the entire budget amount. The Company''s focus area of CSR activities are Education, Health, Safety & Environment, Women Empowerment, Skill Development and Rural Development Projects.

i. ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:

The Independent Directors held their meeting to evaluate the performance of each Non- Independent Director and also of the entire Board as a whole. Each Board member''s attendance, participation and contribution of his expertise was evaluated. All Independent Directors were present for the Meeting. The Board also carried out the evaluation of each individual Director and various Board Committees did their respective Committee evaluation.

The Board also evaluated the quality, content and timeliness of the information flow between the Board and the Management including the board papers and other documents.

j. INTERNAL CONTROL SYSTEMS:

The Company has adequate internal control systems commensurate to the size of its business, the nature of business and its complexities and these controls are operating satisfactorily. The adequacy and functioning of these internal controls is reviewed by the Internal Auditors from time to time and wherever necessary the corrective measures are taken. The Internal Auditors report directly to the Audit Committee of the Company.

k. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014:

In terms of the requirement under Section 197(12) of the Act, the Median Employee''s Remuneration of the Company is Rs. 2.48 million. The Managing Director''s remuneration was Rs. 56.66 million. The ratio of Managing Director''s remuneration to Median Remuneration of employees is 22.85

The percentage increase in remuneration of the Key Managerial Personnel (KMPs) i.e. Managing Director, Chief Financial Officer and Company Secretary is 0.3%, 8% and 8% respectively. The average increase for KMPs works out to approximately 5%.

The percentage increase in the median remuneration of employees in the financial year is 10.1%.

The Company has a total of 460 permanent employees on its rolls.

The Company follows the global practice of its parent regarding the Performance Appraisal System. The Group''s HR has introduced a tool of constant engagement with our colleagues. It is mainly focused on Team conversation between the colleagues and People Leaders. The Company is shifting from Performance Ratings to Performance Conversations and from merit matrices and percentage increase guidance to a holistic people centred approach based around the Group''s Rewards Principles.

The Company''s Market Capitalization increased by ~52% based on the closing price as of 31 March 2023 compared to 31 March 2022. The Net Worth is Rs. 20,783 million compared to Rs. 20,324.20 million as of the previous year.

The Company has paid Commission of Rs. 4.13 million to its Independent Directors pursuant to the shareholder''s approval obtained in the Annual General Meeting held on 13 August 2021.

l. PAYMENT OF REMUNERATION / COMMISSION TO DIRECTORS FROM HOLDING OR SUBSIDIARY COMPANIES:

The Directors are not paid remuneration/commission from any other Company.

m. DIVIDED DISTRIBUTION POLICY:

(a) The circumstances under which the shareholders can or cannot expect dividend

The Company shall endeavour to pay Dividend to its shareholders in a steady and consistent manner except the following circumstances:

(i) During no growth or weak growth in the trade requiring the Company to retain its earnings to be able to absorb unfavourable market conditions and for meeting the business requirements;

(ii) To meet its funding requirements for expansion and growth;

(iii) The Company''s Joint Venture with Indian Railways, Pipavav Railway Corporation Limited requires equity infusion from its shareholders.

(b) The financial parameters that will be considered while declaring dividend

The Company shall consider the following parameters while declaring dividend:

a. Current year''s profit:

i. after setting off carried over previous losses, if any;

ii. after providing for depreciation in accordance with the provisions of Schedule II of the Act;

iii. after transferring to reserves such amount as may be prescribed or as may be otherwise considered appropriate by the Board at its discretion.

b. The profits for any previous financial year(s):

i. after providing for depreciation in accordance with law;

ii. remaining undistributed; or

c. out of (i) or (ii) or both.

(d) Policy as to how the retained earnings will be utilised

(e) Provisions with regard to various classes of shares

The link for the Dividend Policy on the Company website is https://www.apmterminals.com/en/pipavav/investors/eovernance

6. AUDITORS AND REPORTS

The matters related to Auditors and their Reports are as under:

a. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2023:

There are no Audit Observations on the Standalone Financial Statements of the Company for the year ended 31 March 2023. But the Consolidated Financial Statements carry an Audit Observation as follows:

In our opinion and to the best of our information and according to the explanations given to us, except for the indeterminate effect of the matter described in the Basis of Qualified section, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013 (''the Act'') in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Company and its associate as at March 31, 2023, and consolidated total comprehensive income (comprising of profit and other comprehensive income), consolidated changes in equity and its consolidated cash flows for the year then ended.

The Basis for qualified opinion:

The consolidated financial statements include the Company''s share of total comprehensive income (comprising of profit and other comprehensive income) of INR 213.66 million, based on unaudited financial statements as at and for the year ended March 31, 2023, in respect of its associate company. Our opinion on the consolidated financial statements in so far as it relates to the amounts and disclosures included for the year ended on March 31, 2023, in respect of this associate company is based solely on such unaudited financial statements of the associate company for the year ended on March 31, 2023, as furnished to us by the Management of the Company. In absence of availability of audited financial statements we are unable to comment on additional adjustments and/disclosures that are required to be made to these consolidated financial statements.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the "Auditor''s Responsibilities for the Audit of the Consolidated Financial Statements" section of our report. We are independent of the Company and its associate in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in India in terms of the Code of Ethics issued by the Institute of Chartered Accountants of India and the relevant provisions of the Act, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Report on IFCFR

Basis for Qualified Opinion

1. According to the information and explanations given to us and based on our audit, material weakness has been identified in the operating effectiveness of the Company''s internal financial controls with reference to consolidated financial statements as at March 31, 2023 as the Company''s period end financial controls related to ensuring that the financial information of the associate company i.e., Pipavav Railway Corporation Limited (PRCL), included in the consolidated financial statements of the Company, is in accordance with the audited consolidated financial statements of the associate company, did not operate effectively. This could result in material misstatement in the consolidated financial statements.

Qualified Opinion

In our opinion, the Company and its associate company have, in all material respects, an adequate internal financial controls system with reference to consolidated financial statements based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI, and except for the possible effects of the material weakness described in the ''Basis for Qualified Opinion'' section above on the achievement of the objectives of the control criteria, the Company''s internal financial controls with reference to consolidated financial statements were operating effectively as of March 31, 2023.

We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements of the Company for the year ended March 31, 2023, and the material weakness affects our opinion on the consolidated financial statements of the Company and we have issued a qualified audit opinion on the consolidated financial statements. [Refer paragraph 3 of our audit report on consolidated financial statements]

The response of the Board of Directors to the audit observation is that the financial statements of the Associate Company Pipavav Railway Corporation Limited (PRCL), are Management representation numbers in view of pending finalisation of accounts and completion of PRCL''s statutory audit.

b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31 MARCH 2023:

c. STATUTORY AUDITORS:

d. COST AUDITORS:

e. DISCLOSURES UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace and has also established an Internal Complaints Committee, as stipulated by The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules thereunder. During the year under review, one complaint in relation to sexual harassment at workplace was reported. It has been addressed suitably and closed.

f. FRAUD REPORTING:

7. OTHER DISCLOSURES:

Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under:

a. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

As mentioned in the Annual Report of previous year, the Company as part of its Green Initiative has installed solar panels over its new warehouse of 10,000 sq. mtrs. The facility is commissioned. Additionally, the Company is in discussion with a Renewable Energy supplier for entering into a Power Purchase Agreement for purchase of green power. After the signing of the Power Purchase Agreement and the supply commences, the Company will be sourcing about 45% of its Power requirement through Green Energy.

The foreign exchange earning was Rs. 2,227.58 million and outgo was Rs. 319.03 million during the period under review.

b. CHANGE IN SHARE CAPITAL:

The Company has not made any issue of shares during the year and its Share Capital for the year ended 31 March 2023 remains unchanged.

c. ABSTRACT OF ANNUAL RETURN ON THE WEBSITE:

Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, the Annual Return for the year ended 31st March 2023 is available on https://www.apmterminals.com/en/pipavav/investors/financial-results

d. SERVICE OF DOCUMENTS THROUGH ELECTRONIC MEANS

Subject to the applicable provisions of the Companies Act, 2013, all documents, including the Notice and Annual Report shall be sent through electronic transmission in respect of members whose email IDs are registered in their demat account or have been provided by the members. The physical copy of annual report will be dispatched only to shareholders with a specific request for the physical copy of the report.

e. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is in compliance with the mandatory Secretarial Standards.

f. UNCLAIMED AND UNPAID DIVIDENDS, AND TRANSFER OF SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Members who have not yet received/claimed their dividend entitlements are requested to contact the Company''s Registrar and Transfer Agents KFin Technologies Limited.

Pursuant to Section 124 of the Companies Act, 2013 read with the Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("Rules"), all dividends remaining unpaid or unclaimed for a period of seven years and also the shares in respect of which the dividend has not been claimed by the shareholders for seven consecutive years or more are required to be transferred to Investor Education Protection Fund in accordance with the procedure prescribed in the Rules. The Company had declared dividend for the financial year 2015-16 in the Annual General Meeting held on 11th August 2016. The unclaimed amount of dividend is due for transfer to IEPF during the financial year ending 31st March 2024 and the amount will be transferred within the stipulated timelines. Meanwhile, the concerned shareholders are being sent an intimation on their last known address regarding the proposed transfer of unpaid/ unclaimed dividend and the shares pertaining to those amounts into IEPF.

g. CORPORATE GOVERNANCE

h. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis report has been separately furnished and forms part of the Annual Report.

i. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING

j. The provisions of Insolvency and Bankruptcy Code, 2016 are not applicable. The provisions of one time settlement are not applicable.

8. ACKNOWLEDGEMENT AND APPRECIATION:

The Board of Directors of the Company thank the Customers, the Shareholders, the Vendors, the Company''s Bankers, Business Partners/ Associates for their continued support and the Central Government, State Government and Gujarat Maritime Board for their encouragement to the Company. Your Directors wish to place on record their sincere appreciation of the strong commitment and enthusiasm of all employees and for their invaluable contribution.

For and on behalf of the BoardTEJPREET SINGH CHOPRACHAIRMAN

DIN: 00317683

Date: 24 May 2023 Place: Mumbai

Registered Office Pipavav Port,

At Post Rampara-2 via Rajula

District Amreli 365560

CIN L63010GJ1992PLC018106

Tel No. 02794 242400 Fax No. 02794 242413

Email investorrelationinppv@apmterminals.com

Website www.pipavav.com

Mar 31, 2022

The Directors of Gujarat Pipavav Port Limited (''the Company'') have pleasure in submitting their 30th Annual Report to the Members of the Company together with the Audited Standalone and Consolidated Statement of Accounts for the financial year ended 31 March 2022.

1. FINANCIAL STATEMENTS & RESULTS:

a.	STANDALONE FINANCIAL RESULTS:		(INR Million)
	Particulars	For the year ended 31 March 2022	For the year ended 31 March 2021
	Operating Income	7,435.38	7,334.63
	Less: Total Operating Expenditure	3,309.78	3,113.42
	Operating Profit	4,125.60	4,221.21
	Add: Other Income	285.87	442.00
	Profit before Interest, Depreciation, Tax and Exceptional Item	4,411.47	4,663.21
	Less: Interest	47.66	63.10
	Less: Depreciation	1,292.71	1,334.50
	Profit before exceptional items and tax	3,071.10	3,265.61
	Less: Exceptional items	46.09	-
	Profit Before Tax	3,025.01	3,265.61
	Less: Taxes	1,092.64	1,081.63
	Profit for the year after Tax	1,932.37	2,183.98
	Total comprehensive income for the year	1,935.97	2,180.77

b. OPERATIONS:

Particulars	For the year ended 31 March 2022	For the year ended 31 March 2021
Dry Bulk Cargo (Mn MT)	4.19	3.13
Liquid Cargo (Mn MT)	0.81	0.69
Containers (In TEUs)	627,747	748,722
RORO (No. of Cars)	23,874	11,017

The last financial year was a challenging one for the Company due to the Tropical Cyclone Tauktae in May 2021. Though the port''s own infrastructure facility did not suffer major damage thanks to the extraordinary efforts of the Company employees in securing the assets, but the disruption of main grid power supply had impacted the port operations. The Company had hired mobile power supply system and started partial operations by end of May 2021 and upon resumption of the grid power supply in July 2021, the Port Operations got back to normal. The Cyclone had caused damage to the captive jetty of neighbouring industries and the Company extended them support by handling their dry bulk cargo from the port. The captive jetty is now operational.

c. REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

(INR Million)
Particulars	For the year ended 31 March 2022	For the year ended 31 March 2021
Operating Income	7,435.38	7,334.63
Less: Total Operating Expenditure	3,309.78	3,113.42
Operating Profit	4,125.60	4,221.21
Add: Other Income	285.87	404.00
Profit before Interest, Depreciation, Tax and Exceptional Item	4,411.47	4,625.21
Less: Interest	47.66	63.10
Less: Depreciation	1,292.71	1,334.50
Profit before share of net profits of investments	3,071.10	3,227.61
Add: Share of Net Profit of Associate Company accounted for using the Equity Method	40.92	73.55
Profit before exceptional items and tax	3,112.02	3,301.16
Less: Exceptional items	46.09	-
Profit before tax	3,065.93	3,301.16
Less: Taxes	1,092.64	1,081.63
Profit for the year after Tax	1,973.29	2,219.53
Total comprehensive income for the year	1,976.85	2,216.45

d. DIVIDEND:

The Board of Directors in their Meeting held on 11th November 2021 declared Interim Dividend of Rs. 1.60 per share and it has been paid. The Board is pleased to recommend a Final Dividend of Rs. 2.40 per share on the Company''s outstanding Equity Share Capital.

The Dividend is subject to the approval by the Members at the Annual General Meeting to be held on 3 August 2022 and will be paid on 5 August 2022, within the stipulated time limit to all Members whose Names appear in the Register of Members, as of the close of business hours on 27 July 2022. The final dividend if approved by the Members would involve a cash outflow of Rs. 1,160.26 Million. The Dividend Distribution Tax, if applicable, would be borne by the Member.

The Company has a Dividend Distribution Policy, which is available on the website https://www.apmterminals.com/en/ pipavav/investors/governance

e. TRANSFER TO RESERVES:

f. REVISION OF FINANCIAL STATEMENT:

The Company has not carried out any revision in its financial statements in any of the three preceding financial years as per the requirement under Section 131 of the Act.

g. DEPOSITS:

The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013 (âthe Actâ) read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details of deposits which are not in compliance with Chapter V of the Act is not applicable.

h. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT, 2013:

i. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:

j. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL:

No adverse orders have been passed by any Regulator or Court or Tribunal which can have impact on the Company''s status as a Going Concern and on its future operations.

k. PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES:

The related party transaction with Maersk Line A/S regarding Income from Port Operations is a material transaction as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Contract with Maersk Line A/S has been approved by the shareholder''s by way of Postal Ballot on 16 March 2020, pursuant to Regulation 23(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of Related Party Transactions are mentioned in Note 38(b) of the financial statements. The link for the Policy on Related Party Transactions is https:// www.apmterminals.com/en/pipavav/investors/governance

l. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES:

The Company has neither provided nor accepted any loans, guarantees and securities. The Company does not have any investments except 38.8% shareholding in its Associate Company PRCL.

Further, the Company is engaged in the business of providing infrastructural facilities and is therefore exempt from the provisions of Section 186 of the Companies Act, 2013.

m. DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT, 2013:

n. DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT, 2013:

The Company has not issued any sweat equity shares during the year under review and hence the provisions of Section

54(1 )(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 are not applicable.

o. DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT, 2013:

p. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013:

2. OUTLOOK:

Just as the global economy was slowly recovering from the Covid impact, a new challenge of the Russia- Ukraine conflict struck the world. The war against Ukraine and the economic sanctions against Russia are hitting the global economies causing the food and fuel crisis. The countries in the Middle East and Africa region were heavily dependent on wheat from Russia and Ukraine and countries like India importing majority of its fuel requirement have been adversely impacted by the increase in the fuel cost. While the Central banks across the globe maintained lower interest rates to assist economic growth, the conflict has caused inflationary pressure thus requiring the Central banks to initiate the reversal of lower interest rate regime. But the speed and the quantum of reversal will determine the scale of the overall global economic growth considering that this reversal also has a risk of the economies getting into recession. The spike in global oil prices triggered by the conflict also underscores the necessity for the nations to achieve the energy security through the renewable means.

During the previous year, the IMF had expected the global growth to stabilise at 4.2% in the year 2022. That projection for the year 2022 is now lowered to 3.6% and it expects the growth to decline to about 3.3% beyond the year 2023. But this growth forecast could get impacted by the unknown factors like worsening of the war, escalation of sanctions on Russia, sharp deceleration in the Chinese economy due to lockdowns, emergence of a new virus strain causing a flare up in the pandemic and prolonged inflationary pressures driven by the high fuel, food and commodity price.

As far as India is concerned, the forecast by various agencies about India''s GDP growth for the financial year 2023 is that it is likely to be around 8%. The high crude oil price is stoking the inflation in the country and may require the Reserve Bank to focus on controlling the inflation rather than reviving the economic growth post the pandemic. The vaccination programme rolled out by the country has been a success with a large part of the country''s adult population completing the two doses of vaccine. Further, the Government has now opened up precautionary dose for all above 18 years of age. All these measures are helping the citizens to get back to their normal routine and will steadily help the country recover from the impact of pandemic.

The disruption in the global supply chain due to the impact of Covid caused congestion at certain ports in the US and Europe. Though the congestion in the US and Europe ports has reduced to a certain extent, China''s zero Covid Policy triggering lockdowns in the country''s key manufacturing hubs has been impacting its port operations, causing delays in handling of the vessels. These disruptions have resulted into abnormal increase in the ocean freight rates and have caused shortage of containers. The situation of availability of containers has improved to a great extent but based on the feedback from the shipping lines, the disruption in the global supply chain and the delays in the sailing schedules of the vessels is likely to continue in short to medium term though the severity is likely to be much lower than what the trade witnessed during last year. The reason being the opening up of the economies and people getting back to their normal schedules has caused reduction in demand for goods in the US and Europe compared to last year when the demand was largely driven by the stimulus packages of the Governments in those countries.

The ports on the West Coast of India have seen year on year growth of about 14% at 13.91 Million TEUs as compared to 12.25 Million TEUs in the previous year. As far as the Company is concerned, it has been adversely impacted by the global supply chain disruptions through the skip calls by the shipping lines having berthing windows at Pipavav, in order to maintain their

overall sailing schedules. This has caused reduction in the container volume at the port by 16% during the financial year ended 31st March 2022. The imports into the country have slowed down while the exports are picking up. The Company has taken measures like addition of three new services during the year. As part of promoting the Western Dedicated Freight Corridor (DFC), the Company along with its Associate Company, Pipavav Railway Corporation Limited (PRCL) is developing rail products for the shipping lines. The Company has been seeing a steady increase in container volume on a Quarter-on-Quarter basis in a consistent manner and hopes to improve upon its Container volume as the number of skip calls reduce in the coming months.

Since the time the Western Dedicated Freight Corridor has become operational between various ICDs in North India to the ports in Gujarat, the inland transit time for the containers has certainly reduced, as was expected. But the trade has not seen any material shift in cargo from Road to Rail as yet. The real benefit from DFC will happen to the trade only when the Railways announce the freight rates and pass on the benefit to the trade for running double stack electric trains. That would clearly quantify the financial benefit to the trade vis-a-vis moving the cargo by road, it will reduce the inland logistics cost and will commence the much awaited shift of cargo from Road to Rail. The Government''s announcement of freight rates on DFC route will not only provide an economical and sustainable inland logistics solution to the country but it will consistently improve the utilisation levels of this massive rail infrastructure. On its part, the Company has been taking several measures to promote DFC rail operations with its customers.

With reference to the Company''s Dry Bulk business, the additional warehouse of 10,000 sq. mtrs for storage of Fertiliser has been commissioned. This facility was essential because at times when the cargo remained stored for a longer period of time due to non-availability of Railway Wagons, the Company had to refuse the cargo because of lack of covered storage facility. This additional warehouse facility would not only increase the overall storage capacity at the port but it would also provide operational flexibility for segregation of different types of fertiliser cargo.

As far as the Liquid Cargo business is concerned, the value proposition of the LPG Rail siding inside the port is now being appreciated by the LPG customers due to lower cost of evacuation and for the reach to the extended hinterland. This has helped the Company to increase the cargo volume. In order to strengthen the value proposition on the waterfront, work is in progress for upgradation of the existing Liquid berth for handling partially loaded Very Large Gas Carrier (VLGC) vessels.

As far as RoRo business is concerned the Car exports is seeing some recovery albeit on a small base. As per the media reports, the Tatas are evaluating the purchase of Ford''s plant in Gujarat. The Company is keeping a close watch on the developments and is also evaluating other business opportunities.

3. RISKS AND AREAS OF CONCERN:

The Company has been adversely impacted by disruptions in the global supply chain leading to congestion earlier on the Trans-Atlantic and Trans-Pacific routes and now at the Far East ports. As a result, the Company has been facing skip calls from the shipping lines that have booked berthing windows at the port. This is an area of concern, but it is beyond the control of the Company as well as the shipping lines. The Company hopes that this situation improves, and the shipping lines are able to get back to their scheduled calls with better reliability for their customers.

4. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL:a. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:

Ms. Hina Shah (DIN: 06664927) has her second consecutive tenure as an Independent Director upto 29 July 2023. Mr. Tejpreet Singh Chopra (DIN: 00317683) has his second consecutive tenure as an Independent Director upto 29 July 2025. Mr. Samir Chaturvedi (DIN: 08911552) has been appointed as an Independent Director upto 11 November 2025. Ms. Monica Widhani (DIN: 07674403) has been appointed as an Independent Director upto 11 August 2026. The Company has obtained Shareholder''s approval by way of Remote E-voting for her appointment.

Mr. Pradeep Mallick (DIN: 00061256) had his second consecutive tenure as an Independent Directors upto 29 July 2021 and has vacated the office of Director.

In accordance with the provisions of the Act, none of the Independent Directors is liable to retire by rotation. The Managing Director of the Company is also not liable to retire by rotation.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Soren Brandt (DIN:00270435) and Mr. Maarten Degryse (DIN: 08925380) are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Your Directors recommend their re-appointment.

Pursuant to the provisions of Section 161 of the Companies Act, 2013, Mr. Jonathan Richard Goldner (DIN: 09311803) was appointed Additional Director of the Company on 11 November 2021. Mr. Goldner holds the office of Director upto the ensuing Annual General Meeting and being eligible, offers himself for Appointment as a Director of the Company liable to retire by rotation. Your Directors recommend the appointment of Mr. Jonathan Richard Goldner as Director.

b. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received declaration from all the Independent Directors under Section 149(6) of the Companies Act, 2013 confirming that they continue to fulfil the criteria of independence as required under Section 149 of the Companies Act, 2013 and Regulation 16 of the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

The details regarding the appointment of Independent Directors and their tenure have been mentioned hereinabove.

The Company has been regularly conducting Familiarisation Programmes for its Independent Directors and has posted its details on the website

https://www.apmterminals.com/en/pipavav/investors/independent-directors

In the opinion of the Board, the Independent Directors possess requisite integrity, expertise, and experience for acting as an Independent Director of the Company.

The Independent Directors of the Company are exempt from undertaking the online proficiency test as required under Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

5. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES:a. BOARD MEETINGS:

The Board of Directors met four times during the year ended 31 March 2022 in accordance with the provisions of the Companies Act, 2013 and rules made thereunder. The particulars of the meetings held and attended by each Director during the financial year 2022 are given in the Corporate Governance Report which forms part of this Annual Report.

b. DIRECTOR''S RESPONSIBILITY STATEMENT:

In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31 March 2022, the Board of Directors hereby confirm that:

a. in preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. such accounting policies have been selected and applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2022 and of the profit of the Company for that period;

d. the annual accounts of the Company have been prepared on a Going Concern basis;

e. internal financial controls have been laid down by the Company and that such internal financial controls are adequate and operating effectively;

f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

c. NOMINATION AND REMUNERATION COMMITTEE:

1. Mr. Samir Chaturvedi, Chairman, Independent Director

2. Mr. Tejpreet Singh Chopra, Independent Director; and

3. Mr. Jonathan Richard Goldner, Non- Independent Non-Executive Director

The Board has in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other members of Senior Management.

Major criteria defined in the policy framed for appointment of and payment of remuneration to the Directors of the Company, is as under:

e) While determining the remuneration of Executive Directors, Key Managerial Personnel and members of Senior Management, the Board shall consider following factors:

i) Criteria/ norms for determining the remuneration of such employees prescribed in the HR Policy.

ii) Existing remuneration drawn.

iii) Industry standards, if the data in this regard is available.

iv) The job description.

v) Qualifications and experience levels of the candidate.

vi) Remuneration drawn by the outgoing employee, in case the appointment is to fill a vacancy on the death, resignation, removal etc. of an existing employee.

vii) The remuneration drawn by other employees in the grade with matching qualifications and seniority, if applicable.

g) The Non-Executive Directors shall not be eligible to receive any remuneration from the Company. However, NonExecutive Independent Directors shall be paid sitting fees for attending the meeting of the Board or committees thereof and commission, as may be decided by the Board/ Shareholders from time to time. They shall also be eligible for reimbursement of out of pocket expenses for attending Board/ Committee Meetings. The Non-Executive Non-Independent Director representing Gujarat Maritime Board and two of the five Non-Executive Non-Independent Director representing APM Terminals shall be eligible for sitting fee for attending the Board and Committee Meetings as applicable and for reimbursement of out of pocket expenses for attending the Meetings.

d. AUDIT COMMITTEE:

1. Mr. Samir Chaturvedi, Chairman, Independent Director

2. Mrs. Hina Shah, Independent Director

3. Ms. Monica Widhani, Independent Director

4. Mr. Maarten Degryse, Non- Independent Non-Executive Director

During the year under review, there were no instances of recommendation by the Audit Committee not being accepted by the Board of Directors of the Company.

The Company Secretary acts as Secretary of the Committee.

e. STAKEHOLDERS RELATIONSHIP COMMITTEE:

During the year under review, pursuant to Section 178 of the Companies Act, 2013, the Stakeholder''s Relationship Committee comprised the following Directors:

1. Mr. Tejpreet Singh Chopra, Chairman, Independent Director

2. Mrs. Hina Shah, Independent Director

3. Mr. Jakob Friis Sorensen, Managing Director

The Company Secretary acts as Secretary of the Stakeholder''s Relationship Committee.

f. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:

The Policy provides a formal mechanism for all employees of the Company to make disclosure about suspected fraud. It

provides a designated phone number to directly report an instance. The Policy encourages its employees to immediately raise his/her concern to the respective Manager or to Head of HR whenever they notice any contravention with the Company''s Code of Conduct, the Code for Prevention of Insider Trading or fraud or any unethical behaviour. In case the concerned person is not comfortable in reporting the matter to his/her Manager or to the Manager''s Manager or to the Head of HR, he/she can also report to the Chief Compliance Officer of the parent Company. The policy also provides direct access to the Chairman of Audit Committee through his personal email id. During the year under review, no complaints have been reported for any fraud.

As part of APM Terminals the Company shares the distinctive set of the Group''s Core Values that drive the way we do business. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations, the Group''s commitment to the UN Global Compact and our commitment to our people, customers and communities.

g. RISK MANAGEMENT POLICY:

The Board of Directors of the Company has designed Risk Management Policy and Guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Company''s businesses. It defines a structured approach to manage uncertainty and to make use of these in decision making pertaining to the business and corporate functions. Key business risks and their mitigation is considered in the annual/strategic business plans and in periodic management reviews. The Company has Risk Management Committee, a sub-committee of Directors comprising:

1. Mr. Julian Bevis, Chairman, Non- Independent Non-Executive Director

2. Mr. Soren Brandt, Non- Independent Non-Executive Director

3. Mr. Samir Chaturvedi, Independent Director

4. Mr. Jakob Friis Sorensen, Managing Director

h. CORPORATE SOCIAL RESPONSIBILITY POLICY:

1. Mrs. Hina Shah, Chairperson, Independent Director

2. Mr. Soren Brandt, Non- Independent Non-Executive Director

3. Mr. Jakob Friis Sorensen, Managing Director

The CSR Policy of the Company is available on the web-site https://www.apmterminals.com/en/pipavav/investors/ governance

During the year ended 31 March 2022 the Company was required to spend Rs. 68.76 Million towards the CSR activities and the Company has spent the entire budget amount. The Company''s focus area of CSR activities are Education, Health, Safety & Environment, Women Empowerment, Skill Development and Rural Development Projects.

i. ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:

The Board also evaluated the quality, content and timeliness of the information flow between the Board and the Management including the board papers and other documents.

j. INTERNAL CONTROL SYSTEMS:

k. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014:

In terms of the requirement under Section 197(12) of the Act, the Median Employee''s Remuneration of the Company is Rs. 0.57 Million. The Managing Director''s remuneration was Rs. 66.79 Million. The ratio of Managing Director''s remuneration to Median Remuneration of employees is 117.20

The percentage increase in remuneration of the Key Managerial Personnel (KMPs) i.e. Managing Director, Chief Financial Officer and Company Secretary is 16%, 7% and 8% respectively. The average increase for KMPs works out to approximately 10%.

The percentage increase in the median remuneration of employees in the financial year is 10%.

The Company has a total of 482 permanent employees on its rolls.

The Company follows the global practice of its parent regarding the Performance Appraisal System:

a. Alignment to Business Goals by ensuring that there is a clear line from Business Objectives through Team Objectives and Individual Objectives.

b. Engage & motivate our people through clear expectations, alignment and holding each other accountable for the deliverables that matter most.

c. Ensure clarity and transparency of how contributions support us in delivering on the Objectives of our business.

The remuneration of KMPs has also been determined based on their performance against the respective objectives visa-vis the Company''s objectives.

The Company''s Market Capitalization has reduced by ~21% based on the closing price as of 31 March 2022 compared to 31 March 2021. The Net Worth is Rs. 20,324.20 Million compared to Rs. 20,321.99 Million as of the previous year.

The Company has paid Commission of Rs. 3.89 Million to its Independent Directors pursuant to the shareholder''s approval obtained in the Annual General Meeting held on 11 August 2016.

l. PAYMENT OF REMUNERATION / COMMISSION TO DIRECTORS FROM HOLDING OR SUBSIDIARY COMPANIES:

The Directors are not paid remuneration/commission from any other Company.

m. DIVIDED DISTRIBUTION POLICY:

(a) The circumstances under which the shareholders can or cannot expect dividend

The Company shall endeavour to pay Dividend to its shareholders in a steady and consistent manner except the following circumstances:

(i) During no growth or weak growth in the trade requiring the Company to retain its earnings to be able to absorb unfavourable market conditions and for meeting the business requirements;

(ii) To meet its funding requirements for expansion and growth;

(iii) The Company''s Joint Venture with Indian Railways, Pipavav Railway Corporation Limited requires equity infusion from its shareholders.

(b) The financial parameters that will be considered while declaring dividend

The Company shall consider the following parameters while declaring dividend:

a. Current year''s profit:

i. after setting off carried over previous losses, if any;

ii. after providing for depreciation in accordance with the provisions of Schedule II of the Act;

iii. after transferring to reserves such amount as may be prescribed or as may be otherwise considered appropriate by the Board at its discretion.

b. The profits for any previous financial year(s):

i. after providing for depreciation in accordance with law;

ii. remaining undistributed; or

c. out of (i) or (ii) or both.

(d) Policy as to how the retained earnings will be utilised

the shareholder''s value.

(e) Provisions with regard to various classes of shares

The link for the Dividend Policy on the Company website is https://www.apmterminals.com/en/pipavav/investors/governance

6. AUDITORS AND REPORTS

The matters related to Auditors and their Reports are as under:

a. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022:

There are no Audit Observations on the Standalone and Consolidated Financial Statements of the Company for the year ended 31 March 2022.

b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31 MARCH 2022:

c. STATUTORY AUDITORS:

d. COST AUDITORS:

The Company is engaged in providing Port Services and as per Notification dated 31 December 2014 issued by the Ministry of Corporate Affairs pursuant to Section 148 of the Companies Act, 2013 the Company is not required to appoint Cost Auditors.

e. DISCLOSURES UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace and has also established an Internal Complaints Committee, as stipulated by The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules thereunder. During the year under review, no complaints in relation to such harassment at workplace have been reported.

f. FRAUD REPORTING:

7. OTHER DISCLOSURES:

Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under:

a. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company is engaged in the business of developing and operating a Port, Cargo handling incidental to Water Transport.

Considering the nature of business activity, the particulars regarding conservation of energy and technology absorption as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are not applicable and have not been included.

As part of its Green Initiative the Company has installed solar panels over its new warehouse of 10,000 sq. mtrs. The Company is currently in the process of coordinating with the State''s utility company for commissioning of the facility. Once commissioned it will contribute 1 MW of Green Power to the Company''s requirements.

The foreign exchange earning was Rs. 2,031.36 Million and outgo was Rs. 180.78 Million during the period under review.

b. CHANGE IN SHARE CAPITAL:

The Company has not made any issue of shares during the year and its Share Capital for the year ended 31 March 2022 remains unchanged.

c. ABSTRACT OF ANNUAL RETURN ON THE WEBSITE:

Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return for the year ended 31s March 2022 made under the provisions of Section 92(3) of the Act is attached as Annexure C to this Report. The same is available on https://www.apmterminals.com/en/pipavav/investors/financial-results

d. SERVICE OF DOCUMENTS THROUGH ELECTRONIC MEANS

e. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is in compliance with the mandatory Secretarial Standards.

f. UNCLAIMED AND UNPAID DIVIDENDS, AND TRANSFER OF SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Members who have not yet received/claimed their dividend entitlements are requested to contact the Company''s Registrar and Transfer Agents.

Pursuant to Section 124 of the Companies Act, 2013 read with the Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âRulesâ), all dividends remaining unpaid or unclaimed for a period of seven years and also the shares in respect of which the dividend has not been claimed by the shareholders for seven consecutive years or more are required to be transferred to Investor Education Protection Fund in accordance with the procedure prescribed in the Rules. For the financial 2021-22 no dividend amount is due for transfer to IEPF.

g. CORPORATE GOVERNANCE

h. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis report has been separately furnished and forms a part of the Annual Report.

i. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING

j. The provisions of Insolvency and Bankruptcy Code, 2016 are not applicable. The provisions of one time settlement are not applicable.

8. ACKNOWLEDGEMENT AND APPRECIATION:

Your Directors thank Customers, Shareholders, Suppliers, Bankers, Business Partners/Associates and the Central and State Government and Gujarat Maritime Board for their continued support and encouragement to the Company. Apart from Covid, during the year in May 2021 the Company''s port facility was impacted by Cyclone Tauktae. But the extraordinary efforts by the Company employees prior to cyclone in securing the assets from damages ensured that the port facility did not suffer major damages. The humongous restoration work carried out after the cyclone ensured that the Port could commence partial operations within two weeks'' time. Your Directors wish to place on record their sincere appreciation of the commitment and enthusiasm of all employees.

Mar 31, 2018

The Members,

Gujarat Pipavav Port Limited

The Directors of Gujarat Pipavav Port Limited (âthe Companyâ) have pleasure in submitting their 26^th Annual Report to the Members of the Company together with the Audited Standalone and Consolidated Statement of Accounts for the year ended 31^st March, 2018. The financial statements have been presented based on Ind AS requirements.

1. FINANCIAL STATEMENTS & RESULTS:

a. FINANCIAL RESULTS:

(Rs. In Million)

Particulars	For the year ended 31^st March 2018	For the year ended 31^st March 2017
Operating Income	6,489.00	6,831.04
Less: Total Expenditure	2,748.29	2,645.14
Operating Profit	3,740.71	4,185.90
Add: Other Income	370.45	353.59
Profit before Interest, Depreciation, Tax and Exceptional Item	4,111.16	4,539.49
Less: Interest	3.48	4.03
Less: Depreciation	1,035.64	1,065.15
Profit Before Tax	3,072.04	3,470.31
Less: Taxes *	1,087.44	971.19
Profit for the year after Tax	1,984.60	2,499.12
Total comprehensive income for the year	1,982.23	2,498.41

*The Company was on a Tax Holiday under Section 80 (IA) of the Income tax Act and has Nil tax liability until 31^st March 2017. However, the Company is required to pay Minimum Alternate Tax (MAT) which has been appropriately reflected in the financial statements in accordance with the Accounting Principles.

b. OPERATIONS:

The Company is engaged in the business of Port Development and Operations at Pipavav Port, Gujarat under the 30-year Concession vide Agreement dated 30^th September 1998 from Gujarat Maritime Board. The Port located in Southwest Region of Gujarat handles Dry Bulk, Containers, Liquid, and RO RO vessels. The performance details are as follows:

Particulars	For the year ended 31^st March 2018	For the year ended 31^st March 2017
Bulk Cargo Handled (In MT)	1,821,237	2,112,078
Containers Handled (In TEUs)	702,862	663,380
Liquid Handled (In MT)	1,023,616	685,960
RORO (No. of Cars)	98,384	83,607

c. REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

The Company holds 38.8% shares in Pipavav Railway Corporation Limited (PRCL) and the salient features are mentioned in Annexure C. In view of the provisions of Section 2(6) of the Companies Act, 2013 (âthe Actâ), PRCL is an Associate Company. Pursuant to the provisions of Section 129 of the Act, PRCLâs accounts are required to be consolidated into Companyâs accounts.

More than 50% of PRCLâs shareholding is held by Government and Public-Sector Undertakings. PRCL is therefore required to accomplish Statutory Audit followed with the CAG Audit. As on the date of this Report PRCLâs Audited Financial Statements are not available, therefore the Company has prepared its Consolidated Financial Statement based on Unaudited financial statements provided by the PRCL Management.

d. DIVIDEND:

The Board of Directors in their Meeting held on 2^nd November 2017 declared Interim Dividend of Rs. 1.70 per share and it has been paid. The Board is pleased to recommend a Final Dividend of Rs. 1.70 per share on the Companyâs outstanding Equity Share Capital.

The Dividend is subject to the approval by Members at the Annual General Meeting to be held on 9^th August 2018 and will be paid on or after 10^th August 2018, within the stipulated time limit to all Members whose Name appears in the Register of Members, as of the close of business hours on 2^nd August 2018. The total dividend payout of Rs. 1.70 per equity share will aggregate to Rs. 989.16 Million including the Dividend Distribution Tax of Rs. 167.31 Million which will be borne by the Company.

The Company has a Dividend Distribution Policy and it is available on the website http://www.pipavav.com/policies.php

e. TRANSFER TO RESERVES:

The Board of Directors have not recommended any transfer of profit to reserves during the period under review. Hence, the entire amount of profit has been carried forward to the Statement of Profit and Loss.

f. REVISION OF FINANCIAL STATEMENT:

The Company has not carried out any revision in its financial statements in any of the three preceding financial years as per the requirement under Section 131 of the Act.

g. DEPOSITS:

h. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT, 2013:

Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Companyâs financial position, have occurred between the end of the financial period of the Company and date of this report.

i. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:

j. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL:

No adverse orders have been passed by any Regulator or Court or Tribunal which can have impact on the Companyâs status as a Going Concern and on its future operations.

k. PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES:

The transactions/contracts/arrangements entered by the Company with related party(ies) as defined under the provisions of Section 2(76) of the Companies Act, 2013, during the financial year under review, are in the ordinary course of business and at armsâ length. Therefore, they are exempt from the provisions of Section 188 of the Companies Act, 2013. But all such transactions have prior approval of the Audit Committee as per the requirement under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The related party transaction with Maersk Line A/S regarding Income from Port Operations is a material transaction. The Contract with Maersk Line A/S has been renewed for three years from 1^st April 2017 to 31^st March 2020 and shareholderâs approval was obtained in the AGM held during the previous year, pursuant to Regulation 23(4) of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015. The details of Related Party Transactions are mentioned in Note 37 of the financial statements.

l. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES:

The Company has neither provided nor accepted any loans, guarantees and securities. The Company does not have any investments except 38.8% shareholding in its Associate Company PRCL.

Further, the Company is engaged in the business of providing infrastructural facilities and is therefore exempt from the provisions of Section 186 of the Companies Act, 2013.

m. DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT, 2013:

n. DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT, 2013:

o. DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT, 2013:

p. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013:

2. OUTLOOK:

As per the estimates released by the IMF during January 2018, the global economy is expected to grow by 3.9% in Years 2018 and 2019. The two fastest growing economies of the world namely India and China are expected to grow by 7.4% and 6.6% respectively. The Indian growth path is also reflected in the growth in container trade on the West Coast of India. The Container market on the Indian West coast increased by about 12% over previous year mainly driven by strong imports.

The dry bulk cargo on West Coast of India comprises Coal and Fertiliser Imports and both commodities continue to witness a reduction over the previous year. Coal imports on West Coast have reduced by ~10% due to better availability of domestic coal and because of the Governmentâs focus on promoting clean renewable energy. Fertiliser imports have reduced by ~25%.

Considering the consistent reduction in imports of dry bulk cargo on the West Coast ports, Container, Liquid and RORO are assuming greater importance in the Companyâs strategy.

3. RISKS AND AREAS OF CONCERN:

Any increase in trade barriers by the countries and failure to make the growth more inclusive could increase pressure for inward-looking policies and will have an adverse impact on the global trade.

The Indian economy is recovering from the glitches in implementation of GST. Improved collection and full compliance are key to providing a major boost to the economy, more so in the face of increasing crude oil prices.

4. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL:

a. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:

Mr. Tejpreet Singh Chopra (DIN: 00317683), Ms. Hina Shah (DIN: 06664927), Mr. Pradeep Mallick (DIN: 00061256) and Mr. Pravin Laheri, IAS (Retd.)(DIN:00499080) are the Companyâs Independent Directors for a period of five consecutive years from 30^th July 2015.

In accordance with the provisions of the Act, none of the Independent Directors is liable to retire by rotation. The Managing Director of the Company is also not liable to retire by rotation.

Gujarat Maritime Board (GMB) the port regulator can nominate one representative on the Companyâs Board. This position is currently vacant.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. David Skov (DIN:07810539) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Your Directors recommend his re-appointment.

The 3-year tenure of Mr. Keld Pedersen (DIN: 07144184) as Managing Director of the Company ended on 30^th April 2018. The Companyâs Board of Directors in their Meetings held on 30^th January 2018 and 17^th May 2018, approved reappointment of Mr. Pedersen upto 3 years from 1^st May 2018 and other terms and conditions, subject to approval by the Shareholders in the forthcoming Annual General Meeting. Your Board of Directors recommend the re-appointment of Mr. Keld Pedersen (DIN: 07144184) as Managing Director.

b. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received declaration from all the Independent Directors under Section 149(6) of the Companies Act, 2013 confirming their independence vis-a-vis the Company.

The Independent Directors were appointed in the AGM held on 30^th July 2015 for a period of five years.

The Company has been regularly conducting Familiarisation Programmes for its Independent Directors and has posted its details on the website http://pipavav.com/independent_director.php

5. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES:

a. BOARD MEETINGS:

The Board of Directors met four times during the year ended 31^st March 2018 in accordance with the provisions of the Companies Act, 2013 and rules made thereunder.

b. DIRECTORâS RESPONSIBILITY STATEMENT:

In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31^st March 2018, the Board of Directors hereby confirm that:

a. I n preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. such accounting policies have been selected and applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March 2018 and of the profit of the Company for that period;

d. the annual accounts of the Company have been prepared on a Going Concern basis;

e. internal financial controls have been laid down by the Company and that such internal financial controls are adequate and operating effectively;

f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

c. NOMINATION AND REMUNERATION COMMITTEE:

1. Mr. Pradeep Mallick Chairman, Independent Director

2. Mr. Pravin Laheri, IAS (Retd.) Independent Director

3. Mr. Tejpreet Singh Chopra, Independent Director; and

4. Mr. David Skov, Non- Independent Non-Executive Director

The Board has in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees.

Major criteria defined in the policy framed for appointment of and payment of remuneration to the Directors of the Company, is as under:

b) I n case of appointment as an Executive Director, the candidate must have the relevant technical or professional qualification and experience as considered necessary based on the job description of the position. In case no specific qualification or experience is prescribed or thought necessary for the position then, while recommending the appointment, the HR Department shall provide the job description to the Committee and justify that the qualification, experience and expertise of the recommended candidate is satisfactory for the relevant position. The Committee may also call for an expert opinion on the appropriateness of the qualification and experience of the candidate for the position of the Executive Director.

c) I n case of appointment as a Non-Executive Director, the candidate must have a post graduate degree, diploma or a professional qualification in the field of his practice/ profession/ service and shall have not less than five years of working experience in such field as a professional in practice, advisor, consultant or as an employee. Provided that the Board may waive the requirement of qualification and/ or experience under this paragraph for a deserving candidate.

e) While determining the remuneration of Executive Directors and Key Managerial Personnel, the Board shall consider following factors:

i) Criteria/ norms for determining the remuneration of such employees prescribed in the HR Policy.

ii) Existing remuneration drawn.

iii) Industry standards, if the data in this regard is available.

iv) The job description.

v) Qualifications and experience levels of the candidate.

vi) Remuneration drawn by the outgoing employee, in case the appointment is to fill a vacancy on the death, resignation, removal etc. of an existing employee.

vii) The remuneration drawn by other employees in the grade with matching qualifications and seniority, if applicable.

f) The remuneration payable to the Executive Directors, including the Commission and value of the perquisites, shall not exceed the permissible limits as mentioned within the provisions of the Companies Act, 2013. They shall not be eligible for any sitting fees for attending any meetings.

g) The Non-Executive Directors shall not be eligible to receive any remuneration/ salary from the Company. However, they shall be paid sitting fees for attending the meeting of the Board or committees thereof and commission, as may be decided by the Board/ Shareholders from time to time. They shall also be eligible for reimbursement of out of pocket expenses for attending Board/ Committee Meetings.

d. AUDIT COMMITTEE:

1. Mr. Pravin Laheri, IAS (Retd.) Chairman, Independent Director

2. Mr. Pradeep Mallick, Independent Director

3. Ms. Hina Shah, Independent Director

4. Mr. Jan Damgaard Sorensen, Non- Independent Non-Executive Director

The scope and terms of reference of the Audit Committee is in accordance with the Act and it reviews the information as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the year under review, there were no instances of recommendation by the Audit Committee not being accepted by the Board of Directors of the Company.

The Company Secretary acts as Secretary of the Committee.

e. STAKEHOLDERS RELATIONSHIP COMMITTEE:

During the year under review, pursuant to Section 178 of the Companies Act, 2013, the Board of Directors of the Company constituted the Stakeholderâs Relationship Committee, comprising

1. Mr. Pradeep Mallick, Chairman, Independent Director,

2. Mr. Tejpreet Singh Chopra, Independent Director and

3. Mr. Keld Pedersen, Managing Director

The Company Secretary acts as Secretary of the Stakeholderâs Relationship Committee.

f. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:

The Policy provides a formal mechanism for all employees of the Company to make disclosure about suspected fraud or unethical behavior. It also provides a designated phone number to directly report an instance. The Policy encourages its employees to immediately raise his/her concern to the respective Manager or to Head of HR whenever they notice any contravention with the Companyâs Code of Conduct or fraud or any unethical behaviour. In case the concerned person is not comfortable in reporting the matter to his/her Manager or to the Managerâs Manager or to the Head of HR, he/she can also report to the Chief Compliance Officer of the parent Company APM Terminals.

The policy also provides direct access to the Chairman of Audit Committee through his personal email id.

During the year under review, no complaints in relation to such harassment at workplace have been reported.

The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace and has also constituted an Internal Complaints Committee as per the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and the Rules made thereunder for reporting the instances related to Sexual Harassment and deals with them in a timely manner. During the year under review, no complaints in relation to such harassment at workplace have been reported.

As part of APM Terminals the Company shares the distinctive set of the Groupâs Core Values that drive the way we do business. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations, the Groupâs commitment to the UN Global Compact and our commitment to our people, customers and communities.

g. RISK MANAGEMENT POLICY:

The Board of Directors of the Company has designed Risk Management Policy and Guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Companyâs businesses. It defines a structured approach to manage uncertainty and to make use of these in decision making pertaining to the business and corporate functions. Key business risks and their mitigation is considered in the annual/strategic business plans and in periodic management reviews.

h. CORPORATE SOCIAL RESPONSIBILITY POLICY:

1. Ms. Hina Shah, Chairperson, Independent Director

2. Mr. Pravin Laheri, IAS (Retd.), Independent Director and

3. Mr. Keld Pedersen, Managing Director

The CSR Policy of the Company is available on the web-site http://pipavav.com/policies.php

During the year ended 31^st March 2018 the Company was required to spend Rs. 74.48 Million towards the CSR activities. The Company had also carried forward unspent amount of prior years of Rs. 49.60 Million. As on 31^st March 2018, the Company has spent Rs. 86.18 Million. The unspent amount from prior years is being incurred on CSR activities in progress and is likely to be completed by 30^th June 2018. The CSR activities have been carried out in the areas of Education, Health, Safety & Environment, Women Empowerment and Skill Development and Rural Development Projects.

The Company received a Certificate of Appreciation from Gujarat CSR Authority on 23^rd February 2018 on a project related to âEnhancing water resource management through Micro Irrigation System based Lift Irrigationâ carried out in Kotadi cluster, Taluka Rajula, District Amreli.

i. ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:

The Independent Directors held their meeting to evaluate the performance of each Non Independent Director and also of the entire Board as a whole. Each Board memberâs attendance, participation and contribution of his expertise was evaluated. The Board also carried out the evaluation of Directors and the various Board Committees did their respective Committee evaluation.

The Board also evaluated the quality, content and timelines of the information flow between the Board and the Management including the board papers and other documents.

j. INTERNAL CONTROL SYSTEMS:

Adequate internal control systems commensurate to the size of the Companyâs business, the nature of business and its complexities are in place and operating satisfactorily. The adequacy and their functioning is reviewed by the Internal Auditors from time to time and wherever necessary the corrective measures are taken.

k. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014:

In terms of the requirement under Section 197(12) of the Act, the Median Employeeâs Remuneration of the Company is Rs. 418,201 and the Managing Directorâs remuneration is Rs. 52,546,199.

The percentage increase in remuneration of the Key Managerial Personnel (KMPs) i.e. Managing Director, Interim Chief Financial Officer and Company Secretary is 10% , 10% and 12% respectively. The average increase for KMPs works out to approximately 10.6%.

The percentage increase in the median remuneration of employees in the financial year is 12.7%.

The Company has a total of 492 permanent employees on its rolls.

The Company follows the global practice of its parent wherein the Companyâs Objectives and the individual employeeâs objectives are set against which their actual performance is appraised which in turn determines the percentage increase in their remuneration. The Company follows Bell Curve appraisal system for rating of performance of all its employees.

The remuneration of KMPs has also been determined based on their performance against the respective objectives vis-a-vis the Companyâs objectives.

The Companyâs Market Capitalization has reduced by ~12% based on the closing price as of 31^st March 2018 compared to 31^st March 2017. The Net Worth is Rs. 20,140.59 Million compared to Rs. 20,101.75 Million as of the previous year.

The copies of Annual Report as per Section 136 of the Companies Act, 2013 are being sent to the Members excluding the information on employeesâ particulars under Rule 5 of the Companies (Appointment & Remuneration) Rules, 2014. Any Member who is interested in a copy of the employeesâ particulars may write to the Company Secretary. The details will also be available for inspection by the Members at the Registered Office of the Company during the business hours on working days upto the date of the Companyâs forthcoming Annual General Meeting.

The Company has also paid Commission of Rs. 3.75 Million to all the four Independent Directors pursuant to the shareholderâs approval in the previous AGM.

l. PAYMENT OF REMUNERATION / COMMISSION TO DIRECTORS FROM HOLDING OR SUBSIDIARY COMPANIES:

None of the managerial personnel of the Company are in receipt of remuneration/commission from the Holding or Subsidiary Company of the Company.

6. AUDITORS AND REPORTS

The matters related to Auditors and their Reports are as under:

a. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED 31^st MARCH 2018:

There are no Audit Observations on the Standalone Financial Statements of the Company for the year ended 31^st March 2018.

The Statutory Auditors have made an observation in their Audit Report for the Consolidated Financial Statements of the Company for the year ended 31^st March 2018 in Clause 7(a) and (b) of their Report as follows:

Basis for Qualified Opinion

7 a) The consolidated Ind AS financial statements include the Companyâs share of total comprehensive income (comprising of profit and other comprehensive income) of Rs. 225.64 million, based on unaudited Ind AS financial statements as at and for the year ended 31 March 2018 in respect of its associate company not audited by us. The Ind AS financial statement as at and for the year ended 31 March 2018 in respect of the associate company is pending audit by their auditors. Our opinion on the consolidated Ind AS financial statements insofar as it relates to the amounts and disclosures included for the year ended on 31 March 2018 in respect of this associate company is based solely on such Ind AS financial information of the associate company for the year ended on 31 March 2018, as furnished to us by the Management of the Company.

b) Further, pending the audit of the associate company for the year ended on 31 March 2018 by their auditors, we are unable to report on the adequacy of the internal financial controls over financial reporting and operating effectiveness of such controls of the associate company incorporated in India as required to be reported by us.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified Opinion paragraphs above, the aforesaid consolidated Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the consolidated state of affairs of the Company and its associate as at 31 March 2018, their consolidated comprehensive income (comprising of consolidated profit and consolidated other comprehensive income), their consolidated cash flows and consolidated changes in equity for the year ended on that date.

More than 50% of PRCLâs shareholding is held by Government/Public Sector Undertaking and it is therefore subject to a CAG Audit and associate companyâs audited Ind AS financial statements for the year ended 31 March 2018 are yet to be released. Hence, Companyâs share of total comprehensive income (comprising of profit and other comprehensive income) of Rs. 225.64 million for the year ended 31 March 2018 in respect of the associate company, included in the Consolidated Ind AS Financial Statement of Company is based on associate companyâs management prepared Ind AS Financial information. The statutory auditorsâ have qualified their audit opinion stating that Companyâ share of total comprehensive income (comprising of profit and other comprehensive income) of Rs. 225.64 million for the year ended 31 March 2018 in respect of the associate company is based on un-audited financial information of the associate company.

b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31^st MARCH 2018:

The Secretarial Audit Report issued in Form MR-3 forms part to this report. The said report does not contain any observation or qualification requiring explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.

c. STATUTORY AUDITORS:

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s Price Waterhouse Chartered Accountants LLP have been appointed as the Statutory Auditors of the Company for a period of five years in the Annual General Meeting held on 30^th July 2015.

d. COST AUDITORS:

The Company is engaged in providing Port Services and as per Notification dated 31^st December 2014 issued by the Ministry of Corporate Affairs pursuant to Section 148 of the Companies Act, 2013 the Company is not required to appoint Cost Auditors.

7. OTHER DISCLOSURES:

Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under:

a. EXTRACT OF ANNUAL RETURN:

Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return for the year ended 31^st March 2018 made under the provisions of Section 92(3) of the Act is attached as Annexure B to this Report.

b. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The foreign exchange earning was Rs. 1,705.15 Million and outgo was Rs. 438.87 Million during the period under review.

c. REMUNERATION PAYABLE BY COMPANIES HAVING NO PROFIT OR INADEQUATE PROFIT (in terms of Section II of Schedule V):

The Company has adequate profits and therefore the provision of Section II in Schedule V regarding remuneration payable by Companies having no profit or inadequate profit without Central Government approval, is not applicable.

d. CHANGE IN SHARE CAPITAL:

The Company has not made any issue of shares during the year and its Share Capital for the year ended 31^st March 2018 remains unchanged.

8. ACKNOWLEDGEMENT AND APPRECIATION:

Your Directors thank Customers, Shareholders, Suppliers, Bankers, Business Partners/Associates and the Central and State Government and Gujarat Maritime Board for their continued support and encouragement to the Company. Your Directors also wish to place on record their sincere appreciation of the commitment and enthusiasm of all employees for their significant role in the Companyâs performance.

For and on behalf of the Board

CHAIRMAN

DIN: 00317683

Date: 17^th May 2018

Place: Mumbai

Registered Office

Pipavav Port, At Post Rampara-2 via Rajula

District Amreli 365560

CIN L63010GJ1992PLC018106

Tel No. 02794 302400 Fax No. 02794 302413

Email investorrelationinppv@apmterminals.com

Website www.pipavav.com

Mar 31, 2017

The Directors of Gujarat Pipavav Port Limited (''the Company'') have pleasure in submitting their 25^th Annual Report to the Members of the Company together with the Audited Standalone and Consolidated Statement of Accounts for the year ended 31^st March, 2017. The Company has for the first time presented the Ind AS compliant financial statements as per the requirement under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, the previous year''s figures have been re-grouped wherever applicable.

1. FINANCIAL STATEMENTS & RESULTS:

a. FINANCIAL RESULTS:

(Rs. In Million)

Particulars	For the year ended 31^st March 2017	For the year ended 31^st March 2016
Operating Income	6,831.04	6,599.54
Less: Total Expenditure	2,645.14	2,838.91
Operating Profit	4,185.90	3,760.63
Add: Other Income	353.59	303.69
Profit before Interest, Depreciation, Tax and Exceptional Item	4,539.49	4,064.32
Less: Interest	4.03	1.59
Less: Depreciation	1,065.15	973.39
Profit Before Tax	3,470.31	3,089.34
Less: Taxes *	971.19	1,177.50
Profit after Tax	2,499.12	1,911.84
Balance carried forward to Balance sheet	2,498.41	1,907.36

b. OPERATIONS:

The Company is engaged in the business of Port Development and Operations at Pipavav Port, Gujarat under the 30 year Concession vide Agreement dated 30^th September 1998 from Gujarat Maritime Board. The Port located in Southwest Region of Gujarat handles Dry Bulk, Containers, Liquid, and RORO vessels. The performance details are as follows:

Particulars	For the year ended 31^st March 2017	For the year ended 31^st March 2016
Bulk Cargo Handled (In MT)	2,112,078	2,478,743
Containers Handled (In TEUs)	663,380	694,614
Liquid Handled (In MT)	685,960	706,877
RORO (No. of Cars)*	83,607	19,644*

*The Company commenced handling of RORO vessels effective August 2015

c. REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

The Company holds 38.8% shares in Pipavav Railway Corporation Limited (PRCL) and in view of the provisions of Section 2(6) of the Companies Act, 2013 (''the Act''), PRCL is an Associate Company and pursuant to the provisions of Section 129 of the Act, its accounts are to be consolidated with the Company''s accounts. More than 50% of PRCL''s shareholding is held by Government/ Public Sector Undertakings so PRCL is required to accomplish Statutory Audit followed with the CAG Audit. As on the date of this Report PRCL''s Audited Financial Statements are not available, therefore the Company has prepared its Consolidated Financial Statement based on Unaudited financial statements provided by the PRCL Management.

d. DIVIDEND:

The Board of Directors in the Meeting held on 4^th November 2016 declared and paid an Interim Dividend of Rs. 2.00 per share. The Board is pleased to recommend a Final Dividend of Rs. 1.80 per share on the Company''s outstanding Equity Share Capital.

The Dividend is subject to the approval of the Members at the Annual General Meeting on 10^th August 2017 and will be paid on or after 11^th August 2017, within the stipulated time limit to all Members whose name appears in the Register of Members, as on the date of book closure ie. from Friday 4^th August 2017 to Thursday 10^th August 2017 (both days inclusive). The total dividend payout of Rs. 1.80 per equity share will aggregate to Rs. 1,047.34 Million including the Dividend Distribution Tax of Rs. 177.15 Million which will be borne by the Company.

Dividend is the Company''s primary distribution of profits to its Shareholders. The Company''s objective is to sustain a steady and consistent distribution of profits, by way of Dividend, to its Shareholders, supported by underlying earnings growth and subject to i) availability of profits and funding requirements, ii) future funding needs as per the Company''s growth plans, iii) applicable laws and in accordance with the recommendation of the Board of Directors and approval of Shareholders.

e. TRANSFER TO RESERVES:

f. REVISION OF FINANCIAL STATEMENT:

The Company has not carried out any revision in its financial statements in any of the three preceding financial years as per the requirement under Section 131 of the Act.

g. DEPOSITS:

h. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT, 2013:

i. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been made by the Statutory Auditors and the Internal Auditors of the Company for inefficiency or inadequacy of such controls. Wherever suggested by the Auditors, the improved control measures have been implemented and their functioning is reviewed from time to time.

j. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL:

No adverse orders have been passed by any Regulator or Court or Tribunal which can have impact on the Going Concern status and on the Company''s operations in future.

k. PARTICULAR OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES:

All the transactions have prior approval of the Audit Committee as per the requirement under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The related party transaction with Maersk Line A/S in connection with Income from Port Operations is a material transaction. The Contract with Maersk Line A/S has been renewed for three years from 1^st April 2017 to 31^st March 2020. Pursuant to Regulation 23(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is required to obtain Shareholders approval. A resolution to that effect is included in the Notice convening the meeting.

l. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES:

The Company has not provided any loans, guarantees and securities. The Company does not have any investments except its shareholding in the Associate Company PRCL.

Further, the Company is engaged in the business of providing infrastructural facilities and is therefore exempt from the provisions of Section 186 of the Companies Act, 2013.

m. DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT, 2013:

n. DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT, 2013:

The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

o. DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT, 2013:

The Company has not issued any equity shares under Employees Stock Option Scheme during the year under review and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

p. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013:

2. OUTLOOK:

As per the estimates released by the WTO, the world GDP is likely to be at 2.7% this year and 2.8% in the next year. The Container shipping industry is expecting the global container trade to grow by 2%. In view of subdued growth in global trade, the shipping lines are expected to reduce/ rationalize the capacity in various trades to align with global supply and demand requirements.

The Container market on the West coast in India has increased by about 6% largely driven by strong imports. India is amongst the very few global markets reporting the growth numbers. The growth trend in imports is expected to continue during the current year while the exports remain under pressure.

The dry bulk cargo comprises import of Coal and Fertilizer. Coal imports have been witnessing consistent decrease in volumes due to better availability of domestic coal and also because of the Government''s focus on promoting clean renewable energy through wind and solar power. The Fertilizer imports remain volatile depending upon the monsoon and the availability of the fertilizer stock in the domestic market. Moreover the compulsory Neem coating is also likely to reduce the imports.

Liquid cargo mainly LPG and RORO are the two promising areas. The Government''s initiative of providing LPG connection in the rural areas is likely to increase the LPG imports. With Gujarat developing into an Auto Hub, the car exports from Gujarat has been doing well.

3. RISKS AND AREAS OF CONCERN:

The global trade is faced with two main areas of uncertainties, one the policy changes that the US Administration might implement in the near future and two the impact of UK''s exit from the European Union. Any adverse movement in any of these two events is likely to impact the growth in the trade and impact the shipping lines. In India, the imports have been strong and are likely to maintain the trend. In case of below normal monsoon in the coming season, it could have an adverse impact on the consumption pattern in the rural areas.

4. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL:

a. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:

Mr. Tejpreet Singh Chopra (DIN: 00317683), Ms. Hina Shah (DIN: 06664927), Mr. Pradeep Mallick (DIN: 00061256) and Mr. Pravin Laheri, IAS (Retd.)(DIN:00499080) are the Company''s Independent Directors for a period of five consecutive years from the date of the Company''s Annual General Meeting (AGM) held on 30^th July 2015.

In accordance with the provisions of the Act, none of the Independent Directors is liable to retire by rotation. The Managing Director of the Company is also not liable to retire by rotation.

Gujarat Maritime Board (GMB) the port regulator has one seat on the Company''s board. Due to the organizational changes their Nominee is yet to be advised by GMB.

The Promoter APM Terminals Mauritius Limited had nominated Mr. Ahmed Hassan (DIN: 07588595) on the Company''s Board and he was appointed as Additional Director on 10^th October 2016. He was appointed in place of Mr. Jan Damgaard Sorensen (DIN: 06408939) who ceased to be the Director of the Company from 16^th September 2016. There has been further change in nomination by the Promoter. Mr. Hassan has resigned as the Company''s Director with effect from 5^th April 2017 and Mr. Sorensen is appointed as Additional Director with effect from 11^th May 2017. Mr. Sorensen is seeking appointment as Director of the Company. Your Board of Directors recommend the appointment of Mr. Jan Damgaard Sorensen (DIN: 06408939) as Director of the Company.

Mr. Rizwan Soomar (DIN: 02398970) has resigned as the Company''s Director with effect from 5^th April 2017. The Promoter has nominated Mr. David Skov (DIN:07810539) who is appointed as Additional Director of the Company with effect from 11^th May 2017. Mr. Skov is seeking appointment as Director of the Company. Your Board of Directors recommend the appointment of Mr. David Skov (DIN:07810539) as Director of the Company.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Julian Bevis (DIN:00146000) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Your Directors recommend the re-appointment.

Your Directors thank Mr. Rizwan Soomar and Mr. Ahmed Hassan for their valuable contribution during their tenure as Directors of the Company.

b. DECLARATIONS BY INDEPENDENT DIRECTORS:

The Company has received declarations from all the Independent Directors under Section 149(6) of the Companies Act, 2013 confirming their independence vis-a-vis the Company.

The Independent Directors were appointed in the AGM held on 30^th July 2015 for a period of five years.

The Company has been regularly conducting Familiarization Programme for its Independent Directors and has posted the details on its website http://pipavav.com/independent_director.php

5. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES:

a. BOARD MEETINGS:

The Board of Directors met four times during the year ended 31^st March 2017 in accordance with the provisions of the Companies Act, 2013 and rules made there under.

b. DIRECTORâS RESPONSIBILITY STATEMENT:

In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31^st March, 2017, the Board of Directors hereby confirms that:

a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. such accounting policies have been selected and applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2017 and of the profit of the Company for that period;

c. proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts of the Company have been prepared on a going concern basis;

e. internal financial controls have been laid down by the Company and that such internal financial controls are adequate and were operating effectively;

f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;

c. NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee of Directors was constituted by the Board of Directors of the Company in accordance with the requirements of Section 178 of the Act.

The composition of the Committee is as under:

1. Mr. Pradeep Mallick Chairman, Independent Director

2. Mr. Pravin Laheri, IAS (Retd.) Independent Director

3. Mr. Tejpreet Singh Chopra, Independent Director; and

4. Mr. David Skov, Non Independent Director

The Board has in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees.

Major criteria defined in the policy framed for appointment of and payment of remuneration to the Directors of the Company, are as under:

e) While determining the remuneration of Executive Directors and Key Managerial Personnel, the Board shall consider following factors:

i) Criteria/ norms for determining the remuneration of such employees prescribed in the HR Policy

ii) Existing remuneration drawn

iii) Industry standards, if the data in this regard is available

iv) The job description

v) Qualifications and experience levels of the candidate

vi) Remuneration drawn by the outgoing employee, in case the appointment is to fill a vacancy on the death, resignation, removal etc. of an existing employee

vii) The remuneration drawn by other employees in the grade with matching qualifications and seniority, if applicable.

f) The remuneration payable to the Executive Directors, including the Commission and value of the perquisites, shall not exceed the permissible limits as are mentioned within the provisions of the Companies Act, 2013. They shall not be eligible for any sitting fees for attending any meetings

d. AUDIT COMMITTEE:

The Audit Committee of Directors was constituted pursuant to the provisions of Section 177 of the Companies Act, 2013. The composition of the Audit Committee is in conformity with the provisions of the said section. The Audit Committee comprises:

1. Mr. Pravin Laheri, IAS (Retd.) Chairman, Independent Director

2. Mr. Pradeep Mallick, Independent Director

3. Ms. Hina Shah, Independent Director

4. Mr. Jan Damgaard Sorensen, Non Independent Director

The scope and terms of reference of the Audit Committee is in accordance with the Act and it reviews the information as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the year under review, there were no instances of recommendation of the Committee not being accepted by the Board of Directors of the Company.

The Company Secretary acts as Secretary of the Committee.

e. STAKEHOLDERS RELATIONSHIP COMMITTEE:

During the year under review, pursuant to Section 178 of the Companies Act, 2013, the Board of Directors of the Company constituted the Stakeholders Relationship Committee, comprising:

1. Mr. Pradeep Mallick, Chairman, Independent Director,

2. Mr. Tejpreet Singh Chopra, Independent Director and

3. Mr. Keld Pedersen, Managing Director

The Company Secretary acts as the Secretary of the Stakeholders Relationship Committee.

f. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:

The Policy provides a formal mechanism for all employees of the Company to make disclosure at the designated email id about suspected fraud or unethical behavior. It also provides a designated phone number to directly report an instance. The Policy encourages its employees to immediately raise his/her concern to the respective Manager or to Head of HR whenever they notice any contravention with the Company''s Code of Conduct or fraud or any unethical behavior. In case the concerned person is not comfortable in reporting the matter to his/her Manager or to the Manager''s Manager or to the Head of HR, he/she can also report to the Compliance Officer of the parent Company APM Terminals.

The policy also provides direct access to the Chairman of Audit Committee through his personal email id.

The Company has also constituted an Internal Complaints Committee as per the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and the Rules made there under for reporting the instances related to Sexual Harassment and deal with them in a timely manner.

g. RISK MANAGEMENT POLICY:

The Board of Directors of the Company has designed Risk Management Policy and Guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Company''s businesses, and define a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions. Key business risks and their mitigation are considered in the annual/ strategic business plans and in periodic management reviews.

h. CORPORATE SOCIAL RESPONSIBILITY POLICY:

1. Ms. Hina Shah, Chairperson, Independent Director

2. Mr. Pravin Laheri, IAS (Retd.), Independent Director and

3. Mr. Keld Pedersen, Managing Director

The CSR Policy of the Company is available on the Company''s web-site and can be accessed in the link provided http://pipavav. com/csr.php

During the year ended 31^st March 2017 the Company was required to spend Rs. 63.9 Million towards the CSR activities out of which Rs. 40.4 Million has been spent in the areas of Education, Health, Safety & Environment, Women Empowerment and Skill Development and the Rural Development Projects. Certain projects that have been identified are ongoing and in progress as of 31^st March 2017 for which the unspent amount of Rs. 23.5 Million will get utilized. The Company is also committed to use the unspent amount from previous years of Rs. 25.6 Million and has been carried forward.

i. ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:

The Independent Directors held their meeting to evaluate the performance of each Non Independent Director and also of the entire Board as a whole. Each Board member''s attendance, participation and contribution of his expertise was evaluated. The Board also carried out the evaluation of Directors and the various Board Committees did their respective evaluation.

The Board also evaluated the manner in which the information flows between the Board and the Management and the manner in which the board papers and other documents are prepared and furnished.

j. INTERNAL CONTROL SYSTEMS:

Adequate internal control systems commensurate to the size of the Company''s business and its nature of business and its complexities, are in place and have been operating satisfactorily. The adequacy and their functioning is reviewed by the Internal Auditors from time to time and wherever necessary the corrective measures are taken.

Internal control systems consisting of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

k. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014:

In terms of the requirement under Section 197(12) of the Act, the Median Employee''s Remuneration of the Company is Rs. 371,179 and the Managing Director''s remuneration is Rs. 33,592,559.

The percentage increase in remuneration of the Key Managerial Personnel (KMPs) i.e. Managing Director, Chief Financial Officer and Company Secretary is 8.50% , 6.00% and 10.00% respectively. The average increase for KMPs works out to approximately 8%.

The percentage increase in the median remuneration of employees in the financial year is 11.31%.

The Company has a total of 503 permanent employees on its rolls.

The Company follows the global practice of its parent wherein the Company''s Objectives and the individual employee''s objectives are set against which their actual performance is appraised which in turn determines the percentage increase in their remuneration. The Company follows the Bell Curve for the performance rating of all its employees. The remuneration of KMPs has also been determined based on their performance against their respective objectives vis-a-vis the Company''s objectives.

The Company''s Market Capitalization has reduced by 5.8% based on the closing price as of 31^st March 2017 compared to 31^st March 2016. The Net Worth as per the audited accounts is Rs. 20,101.75 Million as of 31^st March 2017 compared to Rs. 19,716.16 Million as of the previous year.

The copies of Annual Report as per Section 136 of the Companies Act, 2013 are being sent to the Members excluding the information on employees'' particulars under Rule 5 of the Companies (Appointment & Remuneration) Rules, 2014. Any Member who is interested in a copy of the employees'' particulars may write to the Company Secretary. The details will also be available for inspection by the Members at the Registered Office of the Company during the business hours on working days upto the date of the Company''s forthcoming Annual General Meeting.

The Company has paid Commission of Rs. 15 Million to all the four Independent Directors pursuant to the shareholder''s approval in the previous AGM.

l. PAYMENT OF REMUNERATION / COMMISSION TO DIRECTORS FROM HOLDING OR SUBSIDIARY COMPANIES:

None of the managerial personnel of the Company are in receipt of remuneration/commission from the Holding or Subsidiary Company of the Company.

6. AUDITORS AND REPORTS:

The matters related to Auditors and their Reports are as under:

a. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED 31^st MARCH 2017:

There are no Audit Observations on the Standalone Financial Statements of the Company for the year ended 31^st March 2017.

The Statutory Auditors have made an observation in their Audit Report for the Consolidated Financial Statements of the Company for the year ended 31^st March 2017 in Clause 7(a) and (b) of their Report as follows:

Basis for Qualified Opinion

6(a) The consolidated Ind AS financial statements include the Company''s share of net profit of Rs. 361.19 million, based on unaudited Ind AS financial statements as at and for the year ended 31 March 2017 in respect of its associate company not audited by us. Further the comparative consolidated Ind AS financial information for the year ended 31 March 2016 included in these consolidated Ind AS financial statements include Ind AS financial information of the associate company not audited by us. The Ind AS financial statement as at and for the year ended 31 March 2017 and the comparative Ind AS financial information as at and for the year ended 31 March 2016 in respect of the associate company is pending audit by their auditors. Our opinion on the consolidated Ind AS financial statements insofar as it relates to the amounts and disclosures included for the year ended on 31 March 2017 in respect of this associate company is based solely on such Ind AS financial information of the associate company for the year ended on 31 March 2017, as furnished to us by the Management of the Company.

(b) Further, pending the audit of the associate company for the year ended on 31 March 2017 by their auditors, we are unable to report on the adequacy of the internal financial controls over financial reporting and operating effectiveness of such controls of the associate company incorporated in India as required to be reported by us. In this connection the Board of Directors would like to state that the Company holds 38.8% shares in Pipavav Railway Corporation Limited (PRCL) and in view of the provisions of Section 2(6) of the Companies Act, 2013, PRCL is an Associate Company. PRCL''s more than 50% shareholding is held by Government/ Public Sector Undertakings. So PRCL is required to accomplish Statutory Audit followed with the CAG Audit. As on the date of this Report PRCL''s audit is currently in progress and the Audited Ind AS Financial Statements are yet to be released. Therefore the Company has prepared its Consolidated Ind AS Financial Statement based on Unaudited Ind AS financial statements provided by the PRCL Management.

b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31^st MARCH 2017:

Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to obtain Secretarial Audit Report from Practicing Company Secretary. Accordingly M/s Rathi and Associates, Company Secretaries have issued the Secretarial Audit Report for the year ended 31^st March 2017.

The Secretarial Audit Report issued in Form MR-3 forms part of this report. The said report does not contain any observation or qualification requiring explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.

c. RATIFICATION OF APPOINTMENT OF AUDITORS:

The matter for ratification of appointment of the said Auditors is included in the Notice of AGM.

d. COST AUDITORS:

7. OTHER DISCLOSURES:

Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under:

a. EXTRACT OF ANNUAL RETURN:

Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return for the year ended 31^st March 2017 made under the provisions of Section 92(3) of the Act is attached as Annexure B to this Report.

b. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

c. REMUNERATION PAYABLE BY COMPANIES HAVING NO PROFIT OR INADEQUATE PROFIT (in terms of Section II of Schedule V):

d. CHANGE IN SHARE CAPITAL:

The Company has not made any issue of shares during the year and its Share Capital for the year ended 31^st March 2017 remains unchanged.

8. ACKNOWLEDGEMENTS AND APPRECIATION:

Your Directors thank Customers, Shareholders, Suppliers, Bankers, Business Partners/Associates and the Central and State Government and Gujarat Maritime Board for their continued support and encouragement to the Company. Your Directors also wish to place on record their sincere appreciation of the commitment and enthusiasm of all employees for their significant role in the Company''s performance.

For and on behalf of the Board

CHAIRMAN

Date: 11^th May 2017 DIN: 00317683

Place: Mumbai

Registered Office

Pipavav Port,

At Post Rampara-2 via Rajula

District Amreli 365560

CIN L63010GJ1992PLC018106

Tel. No. : 02794 302400 Fax No. 02794 302413

Email : investorrelationinppv@apmterminals.com

Website : www.pipavav.com

Dec 31, 2013

The Directors present herewith their Twenty Second Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st December 2013.

FINANCIAL RESULTS

Particulars Year Ended 31st Year Ended 31st December 2013 December 2012 (Rs. In Million) (Rs. In Million)

Operating Income 5,179.35 4,160.33

Less: Total Expenditure 2,611.07 2,341.62

Operating Profit 2,568.28 1,818.71

Add: Other Income 167.61 154.47

Profit before Interest, Depreciation, tax and exceptional items 2,735.89 1,973.18

Less: Interest 374.25 684.15

Less: Depreciation 607.81 549.42

Profit/(Loss) for the year before Exceptional Item 1,753.83 739.61

Add: Exceptional Item (Prior period adjustment) 163.82

Profit/(Loss) Before Tax 1,917.65 739.61

Less: Taxes - -

Profit/(Loss) After Tax 1,917.65 739.61

Balance brought forward from previous year (5,088.19) (7,005.84)

* Taxes include Minimum Alternate Tax paid Rs. /, 760 Million for which Credit has been taken. Therefore the net impact is Nil

DIVIDEND

Your Company is pleased to report Net Profit of Rs. 1,917.65 Million. But considering the forthcoming major expansion of the Port and the accumulated losses ofRs. 5,088.19 Million, no dividend is recommended.

YEAR IN RETROSPECT & OTHER KEY DEVELOPMENTS

A brief statistical profile on port operations during the year ended 31st December 2013 is as under:

Particulars Year 2013 Year 2012

No. of vessel calls at the Port 1,035 1,117

Bulk Cargo Handled (In MT) 3,167,586 3,118,168

Containers Handled (TEU) 661,865 570,480

Given the economic slowdown in India the last two years, container trade of the country and the West Coast in particular, has not shown the same pace of growth as it had in the previous years.

The total operating revenue was Rs. 5,179.35 Million representing an increase of 24.5% as against Rs. 4,160.33 Million in the previous year. During the year under review, the Company handled container throughput of 661,865 TEUs, a growth in excess of 16% as compared to last year. Bulk cargo volumes remained steady at 3.1 million tons. Despite tepid market growth, the container business has been growing rapidly. This is due to a combination of organic growth of existing services, and the addition of 2 new services.

The total expenditure amounted to Rs. 2,611.07 Million, representing an increase of 11.5% over last year. This includes operating expenses, staff costs, administrative and other expenses. Operating expenses were Rs. 1,320.31 Million, an increase of 11.8% over the previous year, primarily due to a change in the commodity mix for bulk cargo and higher container volume. Staff Costs amounted to Rs. 420.54 Million, representing an increase of 16.5% over last year. Administrative and other expenses for the year increased by 8.7% to Rs. 870.22 Million. Power & Fuel and Repairs & Maintenance form the key components of other expenses. I

Other income was Rs. 167.61 Million for the year under review mainly on account of interest income received from banks, favorable exchange rate gain and write back of certain sundry balances. Interest expense decreased by 45.3% during the year to Rs. 374.25 Million after reduction of Indian Rupee debt since July 2012. The current debt outstanding is Rs. 3,038.75 Million.

Exceptional items include favorable write back on impairment of Rs. 163.82 Million consequent to partial write-back of impairment and write-off of certain non-operational assets.

The net profit for the year was Rs. 1, 917.65 Million, a two and half fold increase over Rs.739.61 Million in the previous year.

UPDATE ON PORT PROJECT EXPANSION

Your Company received Environmental Approval during June 2012 from the Ministry of Environment and Forest (MoEF) for the expansion and modernization of the port. Thereafter the Company raised Equity of Rs. 3,500 Million by way of Qualified Institutional Placement (QIP) to Institutional Investors and Preferential Allotment to the Promoters. The Company also tied up External Commercial Borrowing (ECB) debt of USD 152 Million from International Finance Corporation (IFC) a part of World Bank Group. Consequent to a complaint by a NGO, the National Green Tribunal directed MoEF in August 2013 to reassess the project approval and ordered that the EC approval be kept under abeyance for a period of six months. In view of this delay, the Company has also been continuously reviewing the expansion plans to keep it aligned to changing market conditions. As per the minutes of the meeting held in November 2013, the Expert Appraisal Committee (EAC) has again recommended the expansion plan to MoEF for clearance. The final order by MoEF is awaited. The Company has not drawn any funds out of the ECB debt of USD 152 Million.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to the requirements under Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Management Discussion and Analysis (MD&A) has been included as part of the Annual Report. The MD&A includes review of industry prospects and developments, opportunities, risks and concerns, business outlook, internal control systems and their adequacy and discussion on financial performance.

SUBSIDIARY COMPANY

The Company does not have any subsidiaries.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, the Corporate Governance Report is included in the Annual Report along with the Statutory Auditor''s Certificate.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm that:

(i) In preparation of the annual accounts, all applicable accounting standards have been followed;

(ii) The accounting policies have been applied consistently and the judgments and estimates made 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 as on 31st December 2013 and of the Profit & Loss for that period;

(iii) Proper and sufficient care has been taken for 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;

(iv) The annual accounts have been prepared on a going concern basis.

DIRECTORS

Mr. Per J0rgensen, Independent Director stepped down as Director and Chairman of the Company in June 2013. Mr. Pankaj Kumar, IAS, Nominee representing Gujarat Maritime Board and Mr. Martin Gaard Christiansen representing APM Terminals Mauritius Limited also ceased to be Directors of the Company from May and June 2013 respectively.

The Board thanks and places on record its appreciation for the valuable guidance and support received from Mr. Jorgensen as Chairman of the Company. The Board also thanks Mr. Kumar and Mr. Christiansen for their valuable contribution as Directors of the Company.

In accordance with the provisions of the Companies Act, 1956, Mr. Pravin Laheri, IAS (Retd.), Mr. Henrik Lundgaard Pedersen and Mr. Pradeep Mallick are due to retire by rotation and being eligible, offer themselves for reappointment.

Ms. Hina Shah and Mr. Jan Damgaard Sorensen were appointed as Additional Directors of the Company effective July 2013. Mr. A. K. Rakesh, IAS was appointed as Additional Director from October 2013. They all cease to be Directors of the Company at this Annual General Meeting and are proposed to be appointed as Directors of the Company liable to retire by rotation.

Appropriate resolutions are being placed in the Notice convening the Annual General Meeting for your approval. A brief resume of the Directors and other information as per the requirement under Listing Agreement has been detailed in the Notice forming part of this report. The Directors recommend the resolutions for approval.

AUDITORS

M/s B S R & Associates LLP, Chartered Accountants, are the Statutory Auditors of the Company and hold office until the ensuing Annual General Meeting. Being eligible, it is proposed to re-appoint them.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION

Your Company is engaged in the business of port operations and does not carry any manufacturing activity. Therefore the information required under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 as amended and forming part of the Directors'' Report for the year ended 31st December 2013 is not applicable.

However, the Company has been consciously taking regular steps towards energy conservation, technology absorption and reducing carbon footprint.

The Company enhanced its Rail Yard infrastructure by installing 3 Rail Mounted Gantry Cranes (RMGCs). These cranes optimize the turnaround of incoming and outgoing container cargo at the rail yard and significantly reduce the terminal''s operational footprint. By eliminating diesel powered Reach Stackers, these electrically powered RMGCs have increased the efficiency of operations, reduced overall energy consumption, improved air quality, safety and security at the port.

ENVIRONMENT PROTECTION & CORPORATE SOCIAL RESPONSIBILITY

The Company is constantly working towards integrating social and environmental concerns in its business operations through interactions with the various stakeholders involved.

The Company maintained its focus while adopting a more holistic approach in implementing environmentally friendly practices and measures at the port. Strategies ranging from rain water harvesting system of 15 million liters , monitoring ambient air and decibel levels to developing a separate waste management system for handling ferrous and non-ferrous material, waste oil and battery waste in an environment friendly manner are being carried out.

During the year the Company started a new Medical Centre inside the port premises which apart from catering to the port employees and their families is open for all the nearby villagers for free medical treatment and medicines. The Company also conducted a Medical Health Check-up Camp for the villagers wherein 780 children and 540 ladies were examined by the Doctors and appropriate treatment provided. These initiatives by your Company have been well received by the villagers and much appreciated.

The Company''s commitment to Corporate Social Responsibility has been recognized by trade fraternity. The company was awarded the best Terminal/ Port operation in India for Health, Safety and Quality for 2013 by the Maritime and Logistics Association (MALA)

FOREIGN EXCHANGE EARNINGS AND OUTGO

Details of expenditure and earnings in foreign currencies are mentioned in Schedule 15 Note no. 39 to the financial statements.

PERSONNEL RESOURCES

The Directors acknowledge the fact that it''s associates and the team are the most important asset and are committed to upgrading their skills and abilities. Your Company takes the necessary steps on a continuous basis to improve living conditions of the employees and their families at the Port.

The particulars as required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended, form part of this 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. The aforesaid information is available for inspection at the Registered Office of the Company. Any shareholder interested in obtaining such particulars may write to the Company Secretary.

FIXED DEPOSITS

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under.

ACKNOWLEDGEMENTS

The Board of Directors of your Company acknowledge and place on record their sincere appreciation for the strong and dedicated contribution made by the loyal employees at all levels. The Directors also wish to place on record their appreciation for the continued valuable support, co-operation and assistance of the Government of India, Government of Gujarat, Gujarat Maritime Board and various other Government Agencies, Financial Institutions & Banks, Promoters and Group Companies, Vendors and Associates and our esteemed Customers.

For and on behalf of Board of Directors

Place : Mumbai Tejpreet Singh Chopra

Date : 18th February 2014 Chairman

Dec 31, 2012

The Directors present herewith Twenty First Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st December 2012.

FINANCIAL RESULTS

Particulars Year Ended 31st Year Ended 31st December 2012 December 2011 (Rs. In Millions) (Rs. In Millions)

Operating Income 4,160.33 3,967.72

Less: Total Expenditure 2,341.62 2,141.88

Operating Profit 1,818.71 1,817.05

Add: Other Income 154.47 163.65

Profit before Interest, Depreciation, tax and exceptional items 1,973.18 1,980.70

Less: Interest 684.15 851.88

Less: Depreciation 549.42 557.82

Profit/(Loss) Before Tax 739.61 571.00

Less: Taxes (Fringe Benefit Tax) - -

Profit/ (Loss) After Tax 739.61 571.00

Balance brought forward from previous year (7,005.84) (7,745.45)

DIVIDEND

Your Company is pleased to report Net Profit of Rs. 739.61 Million. But considering the forthcoming major expansion of the Port and the accumulated losses of Rs. 7,005.84 Million, no dividend is recommended.

YEAR IN RETROSPECT & OTHER KEY DEVELOPMENTS

A brief statistical profile on port operations during the year ended 31st December 2012 comprising of ships calling at the Port and volume of cargo handled is as under:

Particulars Year 2012 Year 2011

No. of vessel calls at the Port 1,117 1,315

Bulk Cargo Handled (In MT.) 3,118,168 3,793,881

Containers Handled (TEU) 570,480 610,243

The overall container market on West Coast has witnessed low single digit growth during Calendar year 2012. The container volume at Pipavav for year 2012 was lower by 6.5% compared to previous year. The reduction was due to shift of one service to another port on West Coast effective April 2012. It has been replaced with another service by the same shipping line. Further, two new services have been added by other shipping lines during last quarter of year 2012 and the Management''s efforts continue to add more services. Meanwhile the Company introduced dollar tariff effective August 2012 and it has been . accepted by all our customers. This has resulted in improvement of our realization which is offset by lower container volume.

Regarding the bulk cargo business which comprises coal and fertilizers as main commodities, overall coal imports across the country for power plants has reduced due to the pending decision on re-evaluation of power tariff by Government and price parity between imported and domestic coal. This is likely to improve with the Government''s approval for pooling of prices. Specific to Pipavav, the challenge has been a combination of upward revision of rail freight and realigning of freight distance slabs rates which has made Pipavav logistically disadvantageous in comparison to other ports on West Coast. With respect to fertilizer imports, the overall imports of MOP/DAP has fallen over 60% due to high international pricing and partial removal of government subsidy on both these products. There was also a delayed start to the import season. All of this has contributed to reduction in the Company''s bulk cargo volume by 16% compared to last year. But the team identified handling of Wheat Exports as an opportunity to offset the lower coal and fertilizer volume. This has helped in getting two way loaded train movement to and from the port. The management continues its effort in exploring new opportunities for handling export commodities in absence of anticipated large coal volumes for effective waterfront utilisation.

Regarding the liquid cargo business, the Company has signed agreements with three private parties. They have taken land on lease for setting up tank farm facilities inside the port and have started construction of their tank farms. These are likely to be operational in a phased manner from Q4of Calendar Year 2013. This shall improve the capacity utilization of our liquid berth.

The introduction of dollar tariff, favorable exchange rate and better cargo mix has resulted in Revenue from Operations increase by 5% compared to previous year. But these gains have been offset by lower cargo volume handled during the year. This has impacted the EBDITA margins. The Net Profit increased by 29.53% due to lower borrowing cost and Income under Served for India Scheme (SFIS).

UPDATE ON PORT PROJECT EXPANSION

The Company is concluding the debt financing for its proposed expansion with International Finance Corporation (IFC) which is part of World Bank Group. Simultaneously, the contractors for Capital Dredging and Civil Works are also being finalized. The construction activity shall commence immediately on closure of the funding.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to the requirements under Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Management Discussion and Analysis (MD&A) has been included as part of the Annual Report. The MD&A includes review of industry prospects and developments, opportunities and risks, business outlook, risks and concerns, internal control systems and their adequacy and discussion on financial performance.

SUBSIDIARY COMPANY

The Company does not have any subsidiaries.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, the Corporate Governance Report is included in the Annual Report along with the Statutory Auditor''s Certificate.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm that:

(i) In preparation of the annual accounts, all applicable accounting standards have been followed;

(ii) The accounting policies have been applied consistently and the judgments and estimates made 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 as on 31st December 2012 and of the profit & loss for that period;

(iii) Proper and sufficient care has been taken for 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;

(iv) The annual accounts have been prepared on a going concern basis.

DIRECTORS

Mrs. Malini Bansal Lenders Nominee representing IDBI Bank Limited, Mr. Shyam Sundar S. G. representing IDFC Private Equity Company Limited and Mr. Christian Moller Laursen representing APM Terminals Mauritius Limited have ceased to be Directors of the Company since September 2012.

The Board places on record its appreciation for their valuable contribution as Directors of the Company.

In accordance with the provisions of the Companies Act, 1956, Mr. Dinesh Lai, Mr. Pankaj Kumar, IAS and Mr. Martin Gaard Christiansen are due to retire by rotation and being eligible, offer themselves for reappointment.

Mr. Henrik Lundgaard Pedersen, Mr. Pradeep Mallick and Mr. Tejpreet Singh Chopra were appointed as Additional Directors of the Company effective September 2012. They cease to be Directors of the Company at this Annual General Meeting and are proposed to be appointed as Directors of the Company liable to retire by rotation.

Appropriate resolutions are being placed in the Notice convening the Annual General Meeting for your approval. A brief resume of the Directors and other information as per the requirement under Listing Agreement has been detailed in the Notice forming part of this report. The Directors recommend the resolutions for approval.

AUDITORS

M/s BSR & Associates, Chartered Accountants, are the Statutory Auditors of the Company and hold office until the ensuing Annual General Meeting. Being eligible, it is proposed to re-appoint them.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION

Your Company is engaged in the business of port operations and does not carry any manufacturing activity. Therefore the information required under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 as amended and forming part of the Directors'' Report for the year ended 31st December 2012 is not applicable.

However, the Company has been consciously taking regular steps for energy conservation, technology absorption and reducing carbon footprint.

Taking the Company''s initiative of reducing dependency on diesel equipments forward, the rail yard operations for handling containers has been fully mechanized with Rail Mounted Gantry Cranes (RMGCs). The 3 cranes became operational during December 2012. These are operated on electricity and have replaced the Reach stackers which operated on diesel. Rail yard operations at the port have now become safer, efficient and contributed to reduction of carbon footprint.

ENVIRONMENT PROTECTION & CORPORATE SOCIAL RESPONSIBILITY

As a good Corporate Citizen your Company considers protection of the environment and contribution to the local community as important obligations towards the people of the Region of its operations.

The Port Management and the middle level Managers regularly engage with the local community, understand their requirements and work towards their well being. Regular contribution of resources is made for the village and local schools, based on their requirement.

Besides regular monitoring and analysis of Water quality including Sea water at the Jetty area and the Air quality, the port has developed a separate area for handling ferrous and non ferrous material, waste oil and battery waste in an environment friendly manner as part of its waste management initiative. 1500 saplings have been planted within the port premises for increasing the green belt area during last quarter of the calendar year. The port also took steps to create awareness amongst the local residents for minimizing the usage of polythene bags.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Details of expenditure and earnings in foreign currencies are mentioned in Schedule 15 Note no. 39 to the financial statements.

PERSONNEL RESOURCES

The particulars as required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 are annexed 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. The aforesaid information is available for inspection at the Registered Office of the Company. Any shareholder interested in obtaining such particulars may write to the Company Secretary.

FIXED DEPOSITS

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under.

ACKNOWLEDGEMENTS

The Board of Directors of your Company acknowledge and place on record their sincere appreciation for the strong and dedicated contribution made by the loyal employees at all levels. The Directors also wish to place on record their appreciation for the continued valuable support, co-operation and assistance of Government of India, Government of Gujarat, Gujarat Maritime Board and various other Government Agencies, Financial Institutions & Banks, Promoters and Group Companies.

For and on behalf of Board of Directors

Place : Mumbai Per Jergensen

Date : 21st February 2013 Chairman

Dec 31, 2011

The Directors present herewith Twentieth Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st December 2011.

FINANCIAL RESULTS

Particulars Year Ended 31st Year Ended 31st December 2011 December 2010 (Rs. In Million) (Rs. In Million)

Operating Income 3,967.72 2,839.29

Less: Total Expenditure 2,139.55 1,695.16

Operating Profit 1,828.17 1,144.13

Add: Other Income 152.53 111.11

Profit before Interest, Deprec iation, tax and exceptional items 1,980.70 1,255.24

Less: Interest 851.88 1,271.44

Less: Depreciation 557.82 492.67

Profit/(Loss) for the year before Exceptional Item 571.00 (508.87)

Exceptional Item (Prior period adjustment) - (38.85)

Profit/ (Loss) Before Tax 571.00 (547.22)

Less: Taxes (Fringe Benefit Tax) -- ---

Profit/ (Loss) After Tax 571.00 (547.22)

Balance brought forward from previous year (7,745.45) [8,316.45)

DIVIDEND

Your company is pleased to report for first time ever full year Net Profit of Rs. 571.00 Million. However considering the accumulated losses of Rs. 7,745.45 Million, no dividend is recommended.

YEAR IN RETROSPECT & OTHER KEY DEVELOPMENTS

A brief statistical profile on port operations during the year ended 31st December 2011 comprising of ships calling at the Port and volume of cargo handled is as under:

Particulars Year 2011 Year 2010

No. of vessel calls at the Port 1,315 1,076

Bulk Cargo Handled (In MT.) 3,793,881 3,383,588

Containers Handled (TEU) 610,243 466,138

Bulk cargo handled during the year increased by 10% compared to previous year while Containers handled during the year increased by 31%. This can be attributed to addition of new services by the container shipping lines and improved business opportunities from the hinterland area.

MANAGEMENT DISCUSSION AND ANALYSIS

A separate section on Management Discussion and Analysis (MD&A) forms part of the Annual Report as required under Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited. The MD&A includes the review of industry prospects and developments, opportunities and risks, outlook for business, risks and concerns, internal control systems and their adequacy and discussion on financial performance.

SUBSIDIARY COMPANY

The Company does not have any subsidiaries.

CORPORATE GOVERNANCE

A separate section on Corporate Governance is included in the Annual Report along with the Certificate from the Company's Auditors confirming compliance with the conditions stipulated under Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm that:

(i) In preparation of the annual accounts, all applicable accounting standards have been followed;

(ii) The accounting policies have been applied consistently and the judgments and estimates made 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 as on 31st December 2011 and of the profit & loss for that period;

(iii) Proper and sufficient care has been taken for 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;

(iv) The annual accounts have been prepared on a going concern basis.

DIRECTORS

Mrs. Malini Bansal Lenders Nominee representing IDBI Bank Limited was appointed as Director of the Company on 11th July, 2011 replacing Mr. A. L. Bongirwar who was on the company's Board since February 2009.

The Board places on record its appreciation for Mr. Bongirwar's valuable contribution as Director of the Company.

In accordance with the provisions of the Companies Act, 1956, Mr. Per JÃÂ¸rgensen, Mr. Pravin Laheri, IAS (Retd.) and Mr. Shyam Sundar S. G. are due to retire by rotation and being eligible, offer themselves for re-appointment.

Appropriate resolutions are being placed in the ensuing Annual General Meeting for your approval. A brief resume of the Directors and other information has been detailed in the Notice forming part of this report. The Board recommends their re- appointment as Directors of the company.

AUDITORS

M/s BSR & Associates, Chartered Accountants, are the Statutory Auditors of the Company and hold office until the ensuing Annual General Meeting. Being eligible, it is proposed to re-appoint them.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION

Your company is not engaged in any manufacturing activity therefore the information required under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 as amended and forming part of the Directors' Report for the year ended 31st December 2011 is not applicable.

However, the company has been taking regular steps for energy conservation and technology absorption in order to save energy, reduce cost and reduce carbon footprint.

The port has been actively engaged in reducing dependency on diesel and encouraging innovation amongst its employees to develop low carbon solutions. These initiatives include Goutweed Crane that operated on diesel has been electrified by in- house engineers. 10 Rubber Tyre Gantry Cranes (RTGs) have been installed with hybrid engines which consume lesser fuel in comparison with conventional RTGs. The Engineering Team has developed in house cleaning equipment which is used for removing contaminants from Lube Oil used in the cranes. After completing the entire cleaning process the oil is recycled. Special electric connections have been created on shore for tugs which are used for charging during its idle time so that marine activities could be carried out on various systems instead of diesel. Solar Powered lights have been installed on the approach bridges to the jetty.

ENVIRONMENT PROTECTION & CORPORATE SOCIAL RESPONSIBILITY

Your company considers protection of Environment and contribution to the local community in the Region it operates into, as an important responsibility as good corporate citizen.

The Port Management is directly engaged with the citizens of nearby villages to understand their requirements and contribute for their well being. A team comprising of managers regularly visits various schools in the area to understand their requirements and fulfill them by providing them computers, scientific instruments, installing water coolers, carrying out school repairs, donating school bags, books etc.

Your company has completed Mangrove plantation in an area of 500 Hectares as per the requirement of Environment authorities and has received a Certificate to this effect from Gujarat Ecology Commission. The port has planted 11,000 saplings inside the premises and has nurtured 7000 saplings in an in-house nursery. The treated water from the Sewage treatment plant inside the port is re-used for gardening and the residue is used for plants. The awareness on Solid Waste Management is spread in the villages and is being implemented by the port team. Rain water harvesting is carried out during the monsoon season.

The Water quality including the Sea water at the Jetty area is monitored and analyzed regularly and so is the Air quality.

FOREGIN EXCHANGE EARNINGS AND OUTGO

Details of expenditure and earnings in foreign currencies are mentioned in Schedule 15 Note no. 16 to the financial statements.

PERSONNEL RESOURCES

The particulars as required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 are annexed 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. The aforesaid information is available for inspection at the Registered Office of the Company. Any shareholder interested in obtaining such particulars may write to the Company Secretary.

FIXED DEPOSITS

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under.

ACKNOWLEDGEMENTS

The Board of Directors of your company acknowledge and place on record their sincere appreciation for the strong and dedicated contribution made by the loyal employees at all levels. The Directors also wish to place on record their appreciation for continued valuable support, co-operation and assistance of Government of India, Government of Gujarat, Gujarat Maritime Board and various other Government Agencies, Financial Institutions & Banks, Promoters and Group Companies.

For and on behalf of Board of Directors

Place : Mumbai Per Jorgensen

Date : 22nd February 2012 Chairman

Dec 31, 2009

The Directors present herewith Eighteenth Annual Report of the Board of Directors of the Company together with the Audited Accounts for the year ended 31st December 2009.

FINANCIAL RESULTS

Particulars Year Ended 31st Year Ended 31st December 2009 December 2008 (Rs. In Million) (Rs. In Million)

Operating Income 2207.09 1724.09

Total Expenditure 3428.96 2877.31

Operating Profit/ (Loss) (1221.87) (1153.22)

Add: Other Income 116.85 310.86

Profit / (Loss) before Taxes (1105.02) (842.36)

Exceptional Item (58.00) -

Less: Provision for 0.91 3.63 Current Taxation

Profit/(Loss) After Tax (1163.92) (845.99)

Add: Balance Brought Forward form previous year (6605.30) (5759.31)

Balance loss carried forward to Balance Sheet (7769.22) (6605.30)

DIVIDEND

As per the financial statements presented, the company has incurred a loss of Rs. 1163.92 Million during the year ended 31s1 December 2009 and the total accumulated losses of the company amounting are Rs. 7769.22 Million. The Directors therefore do not recommend any dividend for the year ended 31st December 2009.

UPDATE ON PROJECT IMPLEMENTATION

As reported during last year the company has been engaged in implementing project expansion plan for setting up container terminal at the Port. The Board of Directors have pleasure in informing that all critical capital expenditure for the business is complete.

The construction of new container berth is complete and total contiguous quay length is 1075 meters. Additionally the port has 65 meter of LPG berth. 2 nos. Ship to Shore Cranes were delivered and are operational. The port now has total 8 Cranes. The Capital Dredging is complete and the port has depth of 14.5 meters. Two rail sidings were developed during the year and the port now has total six sidings. The container yard Area 6 is complete. The area for total container yard is 102,700 sq. mtrs. The software for container handling and yard planning is installed.

The total amount of capital expenditure incurred upto 31st December 2009 is Rs. 3235.46 Million and capital commitments under implementation as on that date are Rs. 202.11 Million.

The expenditure currently under implementation is Housing Colony for employees and Customs House.

YEAR IN RETROSPECT & OTHER KEY DEVELOPMENTS

A brief statistical profile on port operations during the year ended 31st December 2009 comprising of ships calling at the Port and volume of cargo handled is as under:

Particulars 1st January- 1st January- 31" December 31st December 2009 2008

No. of vessel calls at the Port 1037 967

Bulk Cargo Handled (In MT.) 3371114 2071991

Containers Handled (TEU) 321400 195546

In spite of the global down turn and decrease in international trade during the year your company has been able to increase its cargo handling compared to last year. While the bulk cargo handled during the year increased by 62.7%, the containers handled during the year increased by 64.4% compared to previous year. This can be attributed to availability of cost effective and efficient facility for the shipping lines.

INITIAL PUBLIC OFFER OF THE COMPANY

As you are aware the company filed the draft Red Herring Prospectus with the Securities & Exchange Board of India (SEBI) on 30th September 2008 for its Initial Public Offer but later withdrew it due to adverse market conditions prevailing globally.

The company re-filed the document with SEBI on 22nd December 2009 for its Initial Public Offer of Rs. 5000 Million and Offer for Sale by an existing shareholder for 11,707,369 equity shares.

The company awaits for SEBI approval.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors pursuant to the amended Section 217 (2AA) of the Companies (Amendment) Act, 2000 state as under:

(i) The Annual Accounts of the Company have been prepared in conformity with the Companies Act, 1956 and all applicable Accounting Standards issued by the Institute of Chartered Accountants of India from time to time along with proper explanation wherever necessary on a Going Concern Basis;

(ii) The Accounting Policies are being followed consistently by the Company and the judgments and estimates made by the Company 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 as on 31st December 2009;

(iii) The company has established sufficient internal control systems commensurate to its size and operations and is maintaining 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;

(iv) The accounts have been prepared on Going Concern Basis.

AUDITORS OBSERVATIONS TO THE ACCOUNTS

The company has filed an application to Central Government seeking approval for appointment and payment of managerial remuneration to its ex- Managing Director Mr. Philip Little john and for the current Managing Director Mr. Prakash Tulsiani as per the provisions of the Companies Act, 1956 and the approval is awaited.

SUBSIDIARY COMPANY

The Company does not have any subsidiaries.

DIRECTORS

Mr. Sethurathnam Ravi- Nominee IDBI, Mr. Atanu Chakraborty, IAS representing Gujarat Maritime Board and Mr. Jorgen Hammelsvang Madsen representing APM Terminals Mauritius Limited have ceased to be Directors of the company. Further, Mr. Anoop Seth representing The Infrastructure Fund of India, Mr. Sunil Chawla representing New York Life and Mr. Pradeep Mallick representing APM Terminals Mauritius Limited were appointed during the year and then ceased to be Directors of the company for compliance under Clause 49 of the Listing Agreement prior to filing of the draft Red Herring Prospectus. The company places on record its appreciation for valuable contribution by them during their association.

Mr. Dinesh Kumar Lai retires by rotation and being eligible offers himself for re-appointment.

Mr. Per Jorgensen retires by rotation and being eligible offers himself for re-appointment.

Mr. Pravin Laheri, IAS (Retd.) retires by rotation and being eligible offers himself for re-appointment.

Mr. Charles Menkhorst representing APM Terminals Mauritius Limited and Mr. Pankaj Kumar, IAS representing Gujarat Maritime Board were appointed as Additional Directors of the Company. They cease to be Directors of the company at this Annual General Meeting and are seeking appointment as Director of the company liable to retire by rotation.

The company would benefit from their appointment considering their knowledge and experience.

AUDITORS

The auditors M/s BSR & Associates, Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

FIXED DEPOSITS

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION

Your company has been taking regular steps for energy conservation and technology absorption in order to save energy, reduce cost and reduce C02 emissions. To that extent following initiatives have been/ are being carried out:

The bulk cargo handling Gottwald crane is converted from diesel to electric. It is a hybrid which runs on electric power and can also move on diesel if required.

* Use of energy saving lamps in High mast, saving power.

* Use of batteries to run VHF on Rubber Tyre Gantry Cranes thus saving fuel when the cranes are not in use.

* Use of Online filters in Rubber Tyre Gantry Crane engines for lower fuel consumption and reduce downtime of engine.

FOREGIN EXCHANGE EARNINGS AND OUTGO

The foreign exchange earnings and outgo during the year is as under:

(In Million) Earnings Rs. 1760.94 (Including Deemed foreign currency receipts)

Outgo Rs. 1769.20

PERSONNEL RESOURCES

Your company realises its responsibility towards contributing to the society and to that extent has been recruiting locally for appropriate positions and provides training to them.

The Directors of your Company acknowledge the fact that manpower is most important asset and are committed to upgrading their skills and abilities.

The particulars as required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 are enclosed herewith.

ACKNOWLEDGEMENT

The Board of Directors of your company deeply acknowledge the valuable support, co-operation and assistance of Government of India, Government of Gujarat, Gujarat Maritime Board and various other Government Agencies, Financial Institutions & Banks. The Board of Directors also thanks the employees for their good performance.

For and on behalf of Board of Directors

Place : Mumbai

Date : 3rd March 2010 Per Jorgensen Chairman

Dec 31, 2008

The Directors present herewith Seventeenth Annual Report of the Board of Directors of the Company together with the Audited Accounts for the year ended 31st December 2008.

FINANCIAL RESULTS

Particulars Year Ended 31st Year Ended 31st December 2008 December 2007 (Rs. In Millions> (Rs. In Millions)

Operating Income 1724.09 1516.04

Total Expenditure 2877.31 2415.42

Operating Profit/ (Loss) (1153.22) (899.38)

Add: Other Income 310.86 141.41

Profit/ (Loss) before Taxes (842.36) (757.97)

Exceptional Item - 38.55

Less: Provision for Current Taxation 3.63 2.84

Profit/(Loss) After Tax (845.99) (799.36)

Add: Balance Brought Forward form previous year (5759.31) (4960.25)

Less: Reversal of Gratuity transitional liability - 0.29

Balance loss carried forward to Balance Sheet (6605.30) (5759.31)

DIVIDEND

As per the financial statements presented, the company has incurred a loss of Rs. 845.99 Million during the year ended 31" December 2008 and the total accumulated losses of the company amounting are Rs. 6605.30 Million. The Directors therefore do not recommend any dividend for the year ended 31* December 2008.

UPDATE ON PROJECT IMPLEMENTATION

As you are aware chat the company has been implementing project expansion pie i for setting up container terminal and In that connection the new berth is complete and operational. The port has t ;ia! iuay length of 1075 meter for handling container and bulk cargo.

The port had placed orders for 2 Nos. Ship to Shore Cranes for containers, likely z be delivered in March 2009. The port will have total 8 Nos. Ship to Shore Cranes which will ensure improved berth prod jctivity with quick turnaround time for vessels. The Operations team continues its endeavor to improve crane produc iiivity which is currently one of the best in the industry.

Your company realizes its responsibility towards protecting the environment and has set up an environment friendly coal yard which is one of its kind in the country. The companys efforts were recognized and it was conferred the Achievement of Environment Protection Award In the Annual Indian Maritime Gateway Award Program for 2008.

In its continued endeavor to Improve infrastructure facilities at the port, the company has awarded the contract for Phase II of Capital Dredging to increase the depth from existing 12.5 meters to 14.5 meters and it is likely to be complete by May 2009.

The total amount of capital expenditure incurred upto 31" December 2008 Is Rs. 8607.85 Million and capital commitments under implementation as on that date are Rs. 3420.23 Million.

YEAR IN RETROSPECT & OTHER KEY DEVELOPMENTS

A brief statistical profile on port operations during the year ended 31* December 2008 comprising of ships calling at the Port and volume of cargo handled is as under:

Particulars 1st January to 31st 1st January to 31st December 2008 December 2007

No. of vessel calls at the Port 967 912

Bulk Cargo Handled (In MT.) 2071991 1665418

Containers Handled (TEU) 195546 192015

During the year 2008, the container traffic increased marginally by over 1.83% but bulk cargo has shown a strong increase of about 24.41%. Due to the onset of global melt down the container shipping business has been severely affected and that has in turn affected the ports growth in volume. However the bulk cargo has helped the company improve its revenue from operations. The company believes that the Indian economy will recover quickly from the meltdown and the capacity utilization being currently created by the port in container business will improve.

INITIAL PU BLIC OFFER OF THE COMPANY

The company has filed a draft Red Herring Prospectus with the Securities & Exchange Board of India (SEBI) on 30th September 2008 for its Initial Public Offer for aggregate amount of Rs. 5000 Million through book building process. However, considering the conditions prevailing in capital markets the company proposes to withdraw the IPO.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors pursuant to the amended Section 217 (2AA) of the Companies (Amendment) Act, 2000 state as under:

(i) The Annual Accounts of the Company have been prepared in conformity with the Companies Act, 1956 and all applicable Accounting Standards issued by the Institute of Chartered Accountants of India from time to time along with proper c planation wherever necessary on a Going Concern Basis;

(ii) The Accounting Policies are being followed consistently by the Company and the ju( gments and estimates made by the Comrany are reasonable and prudent so as to give a true and fair view r the state of affairs of the Company at th.i end of the financial year as on 31st December 2008;

(hi) The company has established sufficient internal control systems commensurate to its ;ze < nd operations and is maintaining adequate accounting records in accordance with the provisions of the C jtnp >.nies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other ir egularities;

(iv) The accounts have been prepared on Going Concern Basis.

AUDITORS OBSERVATIONS TO THE ACCOUNTS

The company has filed an application to Central Government seeking approval for appointment and payment of managerial remuneration to Mr. Philip Littlejohn as per the provisions of the Companies Act, 1956 and the approval is awaited.

SUBSIDIARY COMPANY

The Company does not have any subsidiaries.

DIRECTORS

Mr. H. K. Dash, IAS Vice-chairman & CEO of Gujarat Maritime Board, Mr. AnoopSeth representing The Infrastructure Fund of India and Mr. Sunil Chawla representing New York Ufe, Mr. Hans-Ole Madsen and Mr. Johan Herman Van Kerkhof representing APM Terminals Mauritius Limited ceased to be Directors of the company. Further, Mr. Philip Littlejohn- Managing Director of the company has stepped down from his position as he had to return back to his home country Denmark for medical treatment due to his ill-health. The company places on record its appreciation for valuable contribution by them during their association.

Mr. Christian Moller Laursen retires by rotation and being eligible offers himself for re-appointment.

Mr. Jorgen Hammelsvang Madsen retires by rotation and being eligible offers himself for re-appointment.

Mr. Luis Miranda retires by rotation and being eligible offers himself for re-appointment.

Mr. Atanu Chakraborty, IAS representing Gujarat Maritime Board, Mr. Per Jflrgensen and Mr. Pravln Laheri, IAS (Retd.) Inde -endent Director were appointed as Additional Directors of the Company. They cease to be Directors of the company at this Annual.General Meeting and are seeking appointment as Director of the company liable to retire by rotation.

Further, Mr. Prakash Tulsiani was appointed ac "3naging Director of the company on 28* January 2009 in place of Mr. Philip Littlejohn.

The company would benefit from their appointment considering their knowledge and experience.

AUDITORS

The auditors M/s BSR & Associates, Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appolntment.

FIXED DEPOSITS

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules r ade there under.

ENERGY & CONSERVATTON

The following steps have been taken to conserve energy: -

(a) Commi sioning of 220 KV and 11KV Ring Main to various locations In the port has ensured stable power supply In the port an J has helped in doing away with small electrical connections and deploying dlesel generator sets. Similarly the commissioning of containerized sub-station for reefer operations has reduced usage of the generators.

(b) Deployment of Eco friendly Rubber Tyre Gantry Cranes (RTGs) instead of the conventional ones and hybrid conversion of multi-purpose Gottwald crane has reduced fuel consumption. Also use of electrical spreaders at the container yard on the RTGs has resulted into energy savings instead of the hydraulic spreaders.

TECHNOLOGY ABSORPTION

The data monitoring and updating of equipments Is done through GPRS for timely predictive and preventive maintenance.

FOREGIN EXCHANGE EARNINGS AND OUTGO

The foreign exchange earnings and outgo during the year is as under:

(In Millions)

Earnings Rs. 962.86 (Including Deemed foreign currency receipts)

Outgo Rs. 143.36

PERSONNEL RESOURCES

The Directors of your Company acknowledge the fact that manpower is most important asset and are committed to upgrading their skills and abilities. The company while realising its responsibilities has laid special emphasis on appointing local residents for appropriate positions at port.

The total employee strength of the company is about 502 and in order to attract competent people, it is increasing the capacity of the hou ing colony by adding new blocks and related facilities.

The particulars as required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 are enclosed herewith.

ACKNOWLEDGEMENT

The Board of Directors of your company deeply acknowledge the valuable support, co-operation and assistance of Government of India, Government of Gujarat, Gujarat Maritime Board and various other Government Agencies, Financial Institutions & Banks. The Board of Directors also thanks the employees for their good performance.

For and on behalf of Board of Directors

Place: Pipavav

Date : 26a February 2O09 Per Jorgensen

Chairman

Dec 31, 2007

The Directors present herewith the Sixteenth Annual Report of the Board of Directors of the Company together with the Audited Accounts for the year ended 31 st December 2007.

FINANCIAL RESULTS

Year Ended Year Ended

Particulars 31st December 2007 31st December 2006

(Rs. In Million) (Rs. In Million)

Total Revenue 1516.04 1349.63

Total Expenditure 2415.35 1973.90

Operating Profit/(Loss) (899.31) (624.27)

Add: Other Income 141.41 66.63

Profit / (Loss) before Taxes (757.90) (557.64)

Exceptional Item 38.55 83.58

Less: Provision for Current Taxation 2.91 2.52

Profit/(Loss) After Tax (799.36) (643.74)

Add: Balance Brought Forward for m previous year (4960.24) (4316.50)

Less: Reversal of Gratuity transitional liability 0.29 -

Balance loss carried forward to Balance Sheet (5759.31) (4960.24)

DIVIDEND

As per the financial statements presented, the company has incurred a loss of Rs. 799.36 Million during the year ended 31 st December 2007 and the total accumulated losses of the company amounting are Rs. 5759.31 Million. The Directors therefore do not recommend any dividend for the year ended 31 st December 2007.

UPDATE ON PROJECT IMPLEMENTATION

As part of project implementation, out of the total length of 385 meters of new container berth, 207 meters is operational and balance 178 meters is likely to be ready by mid-May 2008. On completion, the port will have a total container quay of 735 meters.

The container yard of approximately 104,000 sq. meters is ready for operations.

The 3 Ship to Shore (STS) Cranes and 10 Rubber Tyre Gantry (RTG) Cranes are commissioned. The port now has 6 STS and 18 RTG Cranes. Orders have also been placed for 2 Nos. Ship to Shore Cranes and 6 Nos. Rubber Tyre Gantry Cranes.

The capital expenditure on Environment Management Plan is likely to be completed by end of March 2008.

Phase two of Electrical Distribution awarded to Siemens for grid power supply to the entire port area is under implementation.

The bids for Phase II of Capital Dredging have been invited in order to increase the depth from existing 12.5 meters to 14.5 meters.

The total amount of capital expenditure incurred upto 31sl December 2007 is Rs. 7010.26 Million and capital commitments under implementation as on that date are Rs. 730.61 Million.

YEAR IN RETROSPECT & OTHER KEY DEVELOPMENTS

A brief statistical profile on port operations during the year ended 31 st December 2007 comprising of ships calling at Pipavav and volume of cargo handled is as under:

Particulars 1st January - 31st December 2007 1st January - 31st December 2006

No. of vessel calls at Pipavav 912 628

Bulk Cargo Handled (In MT) 1665418 2149813

Containers Handled (TEU) 192015 135167

During the year 2007, the container traffic has increased significantly by over 40% but bulk cargo has reduced by about 22.5%. The decrease in bulk cargo is due to handling of large quantity of fertiliser cargo with lower discharge rate.

Our Major customers in container cargo are Maersk Line, Hyundai Merchant Marine and UASC. The bulk cargo customers are IFFCO, Essarand Ultratech.

RIGHTS ISSUE

During the year, the Rights Issue of shares of Rs. 4180 Million was successfully completed with support of most of the existing shareholders. Asmall gap in the issue was subscribed by the promoters.

PIPAVAV RAILWAY CORPORATION LIMITED (PRCL)

The Company has been asked by the Ministry of Railways to pay the claim under Transportation and Traffic Guarantee Agreement of about Rs. 1050 Million excluding interest, if any. The mechanism of payment is being finalised.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors pursuant to the amended Section 217 (2AA) of the Companies (Amendment) Act, 2000 state as under:

(i) The annual accounts of the company have been prepared in conformity with the Companies Act, 1956 and all applicable Accounting Standards issued by the Institute of Chartered Accountants of India from time to time along with proper explanation wherever necessary on a going concern basis;

(ii) The accounting policies are being followed consistently by the company and the judgments and estimates made by the company 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 as on 31 st December 2007;

(iii) The company has established sufficient internal control systems commensurate to its size and operations and is maintaining 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;

(iv) The accounts have been prepared on going concern basis.

AUDITORS OBSERVATIONS TO THE ACCOUNTS

The company has made an application to Central Government seeking approval for appointment and payment of remuneration to Mr. Philip Littlejohn, Managing Director as per the provisions of the Companies Act, 1956 and the approval is awaited.

SUBSIDIARY COMPANY

The Company does not have any subsidiaries.

DIRECTORS

Mr. Tiemen Meester, Mr. Rajeeva Sinha representing APM Terminals Mauritius Limited and Mr. Philip Garling representing AMP Capital Investors have ceased to be Directors of the company. The company places on record its appreciation for their valuable contribution during theirassociation.

Mr. Luis Miranda retires by rotation and being eligible offers himself for re-appointment.

Mr. Sunil Chawla retires by rotation and being eligible offers himself for re-appointment.

Mr. Dinesh Kumar Lai retires by rotation and being eligible offers himself for re-appointment.

Mr. Jorgen Madsen representing APM Terminals Mauritius Limited and Mr. Anoop Seth representing AMP Capital Investors were appointed as Additional Directors of the Company. They cease to be Directors at this Annual General Meeting and are seeking appointment as Director of the company liable to retire by rotation. The company would benefit from their appointment as Director considering their experience.

AUDITORS

The auditors M/s BSR & Associates, Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

FIXED DEPOSITS

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under.

ENERGY CONSERVATION

The following steps have been taken to conserve energy:-

(a) Commissioning of 220 KV Sub-Station: This is a big step as the port was earlier using captive power plant running on diesel.

(b) Commissioning of Containerised Sub-Station: Earlier the Reefers operation was running on hired DG sets which will not be required with commissioning of 04 Containerised Sub Stations of 1000 KVAeach.

TECHNOLOGY ABSORPTION

(a) Rubber Tyre Gantry Cranes (RTGs): The port has procured 10 Eco- RTGs and ordered additional 6 Eco-RTGs instead of the standard RTGs, which saves 50% fuel.

(b) Electric Spreaders: The port has ordered 12 all electric lightweight spreaders for the Eco-RTGs instead of the hydraulic spreader. This is also a new technology and will save fuel.

FOREGIN EXCHANGE EARNINGS AND OUTGO

The foreign exchange earnings and outgo during the year is as under:

(In Millions)

Earnings (Including Deemed foreign currency receipts) 1070.83

Outgo 1384.37

PERSONNEL RESOURCES

The Directors of your Company acknowledge the fact that manpower is most important asset and are committed to upgrading their skills and abilities. The company while realising its responsibilities has laid special emphasis on appointing local residents for appropriate positions at port. Also, the employees are selected and sent for various training programmes abroad.

The total employee strength of the company is about 469 and in order to attract competent people, it is developing a new housing colony and related facilities.

The particulars as required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 are enclosed herewith.

ACKNOWLEDGEMENT

The Board of Directors of your company deeply acknowledge the valuable support, co-operation and assistance of Government of India, Government of Gujarat, Gujarat Maritime Board, Customs and various other Government Agencies, Financial Institutions & Banks. The Board of Directors also thank the employees for their good performance.

For and on behalf of Board of Directors

Place: Pipavav

Hans-Ole Madsen

Date : 17th March 2008 Chairman

Dec 31, 2005

The Directors present herewith the Fourteenth Annual Report of the Board of Directors of the Company together with the Audited Accounts for the nine months period as at 31st December 2005.

FINANCIAL RESULTS

Particulars Period Ended Year Ended 31st December 2005 31st March 2005 (Rs. In Millions) (Rs. In Million)

Total Revenue 676.23 762.09

Total Expenditure 982.85 1167.10

Operating Profit/(Loss) (306.62) (405.01)

Add: Other Income 29.92 21.69

Profit / (Loss) before Taxes (276.70) (383.32)

Exceptional Item -- 130.00

Profit/ (Loss) After Exceptional Item and before Taxes (276.70) (513.32)

Less: Provision for Current Taxation 1.72 0.90

Profit/(Loss) After Tax (278.42) (514.22)

Add: Balance Brought Forward from previous year (4038.08) (3523.86)

Balance loss carried forward to Balance Sheet (4316.50) (4038.08)

CHANGE IN FINANCIAL YEAR

As reported earlier, the company has changed its financial year from April - March to calendar basis and accordingly this Annual Report covers a period of 9 months from April to December 2005.

DIVIDEND

During the nine months period ending 31st December 2005 your company incurred a loss of Rs. 278.42 Million and has a total accumulated losses of Rs. 4316.50 Million. The Directors therefore do not recommend any dividend.

PROJECT IMPLEMENTATION INITIATIVES

The project implementation has gained momentum during the year with achieving financial closure. The works relating to widening of existing jetty to facilitate use of quay cranes, augmentation of power supply from 220 KV power line & internal power distribution works, are under way. Capital dredging to facilitate berthing of vessels calling the port at a draught of 12.5 Meters has commenced in January 2006. Further new contracts have been awarded for construction of post Panamax Container Berth, development of container yard, and orders have been placed for purchase of 8 Nos. Rubber Tired Gantry Cranes. Negotiations for purchase of new post Panamax Quay Cranes are progressing and the orders would be placed shortly. The company has also initiated implementation of Environment Management Plan. The total amount of capital expenditure incurred till February 2006 is Rs. 627.69 Million and capital commitments under implementation as on that date are Rs. 1315.027 Million.

All efforts are being taken to complete the project quickly and to recoup the time lost due to delay in change of shareholding and restructuring of the company.

Upon completion of dredging expected mid 2006, the port expects to improve its cargo throughput significantly.

YEAR IN RETROSPECT & OTHER KEY DEVELOPMENTS

A brief statistical profile on port operations during the nine months period ended 31s December 2005 comprising of ships calling at Pipavav and volume of cargo handled is as under:

Particulars April - December 2005 April 2004 - March 05

No. of vessel calls at Pipavav 501 747

Bulk Cargo Handled (In MT) 1,679,778 2,007,590

Containers Handled (TEU) 62,488 68,885

With continued emphasis on improving performance & productivity levels, the company has been able to report better financial performance.

PIPAVAV RAILWAY CORPORATION LIMITED (PRCL)

With the opening of container train operations to the private sector, PRCL has obtained permission from Ministry of Railways to operate container trains.

In addition, Railways recently flagged off the inaugural double stack container train for the first time in the country, from Jaipur to Pipavav, which on regular operations, is expected to improve volumes at reduced costs.

DIRECTORS RESPONSIBILITY STATEMENT

The directors pursuant to the amended Section 217 (2AA) of the Companies (Amendment) Act, 2000 state as under:

(i) The annual accounts of the company have been prepared in conformity with the Companies Act, 1956 and all applicable Accounting Standards issued by the Institute of Chartered Accountants of India from time to time along with proper explanation wherever necessary on a going concern basis;

(ii) The accounting policies are being followed consistently by the company and the judgments and estimates made by the company 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 period as on 31st December 2005;

(iii) The company has established sufficient internal control systems commensurate to its size and operations and is maintaining 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;

(iv) The accounts have been prepared on going concern basis.

AUDITORS OBSERVATIONS TO THE ACCOUNTS

In the matter of remuneration being paid to the Managing Director in excess of the limits specified in the Schedule XIII of Companies Act, 1956, the company has submitted application to Central Government within the stipulated time limit for approval, which is awaited.

SUBSIDIARY COMPANY

The Company does not have any subsidiaries.

DIRECTORS

Mr. Darius Pandole representing IDFC Private Equity Company Limited has ceased to be Director of the company. The company places on record its appreciation for his valuable contribution during his association.

Mr. Krishan Sehgal retires by rotation and being eligible offers himself for re-appointment.

Mr. H. K. Dash, I. A. S. retires by rotation and being eligible offers himself for re-appointment.

Mr. Dinesh Kumar Lai retires by rotation and being eligible offers himself for re-appointment.

Mr. Johan Herman Van Kerkhof representing APM Terminals Mauritius Limited and Mr. Luis Miranda representing IDFC Private Equity Company Limited were appointed as Additional Directors of the company during the period ended 31sl December 2005. They cease to be directors at the ensuing Annual General Meeting and seek appointment. The company would benefit from their appointment as Directors considering their experience.

Mr. Rajeeva Sinha was appointed as Managing Director of the company by the Board of Directors in the meeting held on 10th November 2005. His appointment and terms are being placed for approval before the shareholders at the ensuing Annual General Meeting.

AUDITORS

The auditors M/s BSR & Associates, (formerly BSR & Co.) Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

FIXED DEPOSITS

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

With respect to the provisions of conservation of energy and absorption of technology the Directors believe that considering the nature of industry and low key operations, the energy consumption is very negligible.

The foreign exchange earnings and outgo during the year is as under:

(Rs. In Millions)

Earnings (deemed foreign currency) 409.25

Outgo 22.47

PERSONNEL RESOURCES

The Directors of your Company acknowledge the fact that manpower is most important asset and are committed to upgrading their skills and abilities. The company while realising its responsibilities has laid special emphasis on appointing local residents for appropriate positions at port.

The particulars as required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 are enclosed herewith.

ACKNOWLEDGEMENT

The Board of Directors of your company deeply acknowledge the valuable support, co-operation and assistance of Government of India, Government of Gujarat, Gujarat Maritime Board and various other Government Agencies, Financial Institutions & banks and shareholder groups in the restructuring of the company. The Board of Directors also thank the employees for their good performance.

For and on behalf of Board of Directors

Place: Mumbai Date: 24th March 2006 Hans-Ole Madsen Chairman

Mar 31, 2005

The Directors present herewith the Thirteenth Annual Report of the Board of Directors of the Company together with the Audited Accounts as at 31st March 2005.

FINANCIAL RESULTS

Particulars Year Ended 31st March Year Ended 31st March 2005 2004 (Rs. In Million) (Rs. In Million)

Total Revenue 762.09 492.85

Total Expenditure 1167.10 3350.85

Impairment Loss on Fixed Assets -- 2164.13

Operating Profit/ (Loss) (405.01) (2864.70)

Add: Other Income 21.69 26.91

Profit / (Loss) before Taxes (383.32) (2837.79)

Exceptional Item 130.00 --

Profit/ (Loss) After Exceptional Item and before Taxes (513.32) (2837.79)

Less: Provision for Current Taxation 0.90 0.30

Less: Provision for Deferred Taxation -- (24.47)

Profit/ (Loss) After Tax (514.22) (2813.63)

Add: Balance Brought Forward form previous year (3523.86) (710.24)

Balance loss carried forward to Balance Sheet (4038.08) (3523.86)

DIVIDEND

Your company incurred a loss of Rs. 514.22 Million for the year and with an accumulated loss of Rs. 4038.08 Million the Directors do not recommend any dividend for the year ended 31st March 2005.

RESTRUCTURING OF THE COMPANY

The Government of Gujarat approved the investment by A. P. Moller- Maersk Group in the company and transfer of shares from SKIL Group to A. P. Moller- Maersk Group and other financial investors. SKIL Group, PSA India Pte. Limited and CDC Financial Services Mauritius Limited have exit.

In furtherance thereto, your company executed the Shareholders Agreement with A. P. Moller- Maersk Group and other financial investors and with this, A. P. Moller- Maersk Group, being the largest shareholder, acquired the management control of the Company.

The Audit Committee and Board of Directors have been reconstituted reflecting the change in shareholding of the company.

Your company has achieved financial closure with a fresh equity infusion of Rs. 2000 Million and tie up of debt amounting to Rs. 5962.58 Million, for the expansion plan for Port Pipavav. The fresh equity of Rs. 1450 Million has been received in the current year and balance Rs. 550 Million would be subscribed on receipt of approval from Gujarat Maritime Board.

PROJECT IMPLEMENTATION INITIATIVES

During the year your company has acquired 3 second hand quay cranes from Japan which are functioning well and have also undertaken widening of jetty no. 2. for movement of the Quay Cranes over the 400 meters of wharf. /our company also has taken steps to commence dredging in the port to receive and handle vessels calling the port at 12.5 mtrs draught.

YEAR IN RETROSPECT & OTHER KEY DEVELOPMENTS

With Maersk Sealand and Safmarine vessels calling the port regularly the container throughput substantially increased during the year and a brief statistical profile on port operations during the financial year ended 31st March 2005 comprising of ships calling at Pipavav and volume of cargo handled is as under:

Particulars 2004-05 2003-04

No. of vessel calls at Pipavav 747 754

Bulk Cargo Handled (In MT.) 2007590 1908047

"l%ntainers Handled (TEU> 68885 24538

Your company achieved its highest ever productivity levels by handling 25050 tones of coal in a day and achieving 46.5 moves per hour in container handling. With proper cost control and efficient management of resources, the company was able to report improved earnings for the year.

INVESTMENT IN PIPAVAV RAILWAY CORPORATION LIMITED (PRCL)

As a part of shareholder restructure, your company acquired the shareholdings held by SKIL group in Pipavav Railway Corporation Limited and in addition have also subscribed to new shares in the ensuing year.

RESTRUCTURE OF EXISTING DEBT

As reported in the last report, the existing debt of the company was restructured under the Corporate Debt Restructuring scheme (CDR) with the consent of all lenders. The material terms and conditions of restructure of existing debt have been fulfilled by the company.

In compliance to the CDR terms the company has issued 8.4 % Optionally Convertible Cumulative Redeemable Prefer- ence Shares aggregating to Rs. 518 Mio and have also issued 10.5 % Non convertible debentures aggregating to Rs. 570 Mio to the lenders of the company.

CHANGE IN FINANCIAL YEAR

With the acquisition of management control by AP Moller Maersk, with a view to align the companys financial year with that of APMM your company has changed the financial year to calendar year. The financial statements for the ensuing year would therefore cover 9 months period from 1st April 2005 to 31st December 2005.

DIRECTORS RESPONSIBILITY STATEMENT

The directors pursuant to the amended Section 217 (2AA) of the Companies (Amendment) Act, 2000 state as under:

(i) The annual accounts of the company have been prepared in conformity with the Companies Act, 1956 and all applicable Accounting Standards issued by the Institute of Chartered Accountants of India from time to time along with proper explanation wherever necessary on a going concern basis;

(ii) The accounting policies are being followed consistently by the company and the judgments and estimates made by the company 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 as on 31st March 2005;

(iii) The company has established sufficient internal control systems commensurate to its size and operations and is maintaining adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safe- guarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) The accounts have been prepared on going concern basis.

AUDITORS OBSERVATIONS TO THE ACCOUNTS

The Auditors in their report to members have qualified non-provision of compensation claim of Rs. 293.64 Million under the Traffic Guarantee Agreement entered into with Pipavav Railway Corporation Limited. Your company believes that the shortfall in traffic guarantee was due to reasons beyond the control of the company and has taken up the matter with PRCL for waiver.

SUBSIDIARY COMPANY

The Company does not have any subsidiaries.

DIRECTORS/ COMPANY SECRETARY

Ms. Karen Brade, Mr. Nikhil Gandhi, Mr. Bhavesh Gandhi, Cmde. V. G. Honnavar, Mr. J. N. Godbole, Mr. Snehal Shah, Mr. Vincent Lim Chooi Hin, Mr. Yap Min Choy, Mr. David Yang Antonius and Mr. Yuvraj Narayan have ceased to be Directors of the company. The company places on record its appreciation for their valuable contribution during their association with the company.

Mr. Krishan Sehgal retires by rotation and being eligible offers himself for re-appointment.

Mr. H. K. Dash, I. A. S. retires by rotation and being eligible offers himself for re-appointment.

Mr. Dinesh Kumar Lai retires by rotation and being eligible offers himself for re-appointment.

Mr. Jack D. Helton and Mr. Christian M. Laursen, representing APM Terminals Mauritius Limited, Mr. Darius Pandole representing IDFC Asset Management Company Limited and Mr. Rajeev Thakore representing New York Life International India Fund Mauritius LLC were appointed as Additional Directors of the company during the year. They have ceased to be Directors at this Annual General Meeting and are seeking appointment. The company would benefit from their appointment as Directors considering their experience.

Mr Paresh Davey resigned as Company Secretary on 13th May 2005 and Mr. ManishAgnihotri was appointed as Company Secretary on 13th May 2005.

AUDITORS

The auditors M/s BSR & Associates, (formerly 0SR & Co.) Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

FIXED DEPOSITS

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

With respect to the provisions of conservation of energy and absorption of technology the Directors believe that considering the nature of industry, the energy consumption is very negligible.

The foreign exchange earnings and outgo during the year is as under:

(In Millions)

Earnings 0.472

Outgo 0.254

PERSONNEL RESOURCES

The Directors of your Company acknowledge the fact that manpower is most important asset and are committed to upgrad- ing their skills and abilities. The particulars as required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 are enclosed herewith.

ACKNOWLEDGEMENT

The Board of Directors of your company deeply acknowledge the valuable support, co-operation and assistance of Gov- ernment of India, Government of Gujarat, Gujarat Maritime Board and various other Government Agencies, Financial Institutions & banks in the restructure of the company. The Board of directors also thank the employees for their good performance.

For and on behalf of Board of Directors

Place: Mumbai

Date: 19 August 2005 Hans-Ole Madsen

Chairman and Managing Director

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