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Gujarat Pipavav Port Ltd.

BSE: 533248 Sector: Others
NSE: GPPL ISIN Code: INE517F01014
BSE LIVE 15:56 | 18 Aug 137.50 -0.75
(-0.54%)
OPEN

137.00

HIGH

138.70

LOW

135.70

NSE 15:56 | 18 Aug 138.40 0.45
(0.33%)
OPEN

137.50

HIGH

139.20

LOW

136.65

OPEN 137.00
PREVIOUS CLOSE 138.25
VOLUME 743293
52-Week high 197.35
52-Week low 121.20
P/E 27.01
Mkt Cap.(Rs cr) 6,647
Buy Price 137.50
Buy Qty 100.00
Sell Price 0.00
Sell Qty 0.00
OPEN 137.00
CLOSE 138.25
VOLUME 743293
52-Week high 197.35
52-Week low 121.20
P/E 27.01
Mkt Cap.(Rs cr) 6,647
Buy Price 137.50
Buy Qty 100.00
Sell Price 0.00
Sell Qty 0.00

Gujarat Pipavav Port Ltd. (GPPL) - Chairman Speech

Company chairman speech

Dear Members

For and on behalf of the Board of Directors I am pleased to present the Company'sAnnual Report and Financial Statements for the year ended 31st March 2016.

As your Company holds 38.8% shares in Pipavav Railway Corporation Limited (PRCL) it isan Associate Company as per the provisions of the Companies Act 2013. Accordingly theCompany has for the first time prepared Standalone financial statement and Consolidatedfinancial statement for the year ended 31st March 2016.

During the year your Company reported a Standalone Net Profit of Rs. 2366.57 Millionthe accumulated losses have been completely set off and the Board of Directors is pleasedto recommend payment of Maiden Dividend of Rs. 1.90 per share on the Company's outstandingEquity Share Capital. Dividend is the Company's primary distribution of profits to itsShareholders. The Company's objective is to sustain a steady and consistent distributionof Dividend to its Shareholders subject to availability of profits the Company's futurefunding needs and the applicable laws.

The Global Container trade continues to remain a challenge due to the overall generalslowdown and shift in focus by China from international trade towards domesticconsumption. According to International Monetary Fund (IMF) estimates the Global containerport traffic grew by just 1.1 percent in 2015 which is less than half of the 3.5 percentincrease in the Global Gross Domestic Product in 2015. This is also the first time thecontainer volume growth-to-GDP multiplier fell below 1x.The year on year growth inContainer volume of India has been in the range of 3% primarily driven by Imports whileExports continue to remain weak. In the overall weak economic environment India is one ofthe few countries reporting comparatively stronger GDP numbers. The further improvement intrade would be dependent upon two factors - namely improvement in the rural economy ofIndia which could help in strengthening of Imports into the country and an improvement inthe economies of Europe and the United States which are the main export markets for India.

The growth in Logistics directly supports the government's objective of 'Make inIndia'. As a result of the focus on growth in manufacturing industries there are manyeconomic reforms taking shape in India. Investments in development of infrastructure atports creating freight corridors and national highways and better railway network playsa vital role in growth of the economy. The Government has been focused on increasedspending on the Road sector in particular which is expected to trigger a multiplier effectof growth in various other industries. RBI in its recent Monetary policy also recognisesdevelopment of infrastructure including ports roads and railways as a positive sign ofeconomic revival.

Your Company has completed its capacity addition in the Container Business in a timelymanner in order to be able to participate in the growth opportunities of the country. ThePort now has two dedicated Container berths with an increased capacity to 1.35 MillionTEUs from the existing 850000 TEUs. The Company is debt free and has the ability toleverage its Balance Sheet for ramping up the Port capacity based on the future growthopportunities.

The State of Gujarat is developing into an auto hub with several companies setting uptheir manufacturing facilities. During the year your Company started handling the ROROvessels for Export of cars. This business provides an opportunity to your Company inachieving an improved utilization of the existing Container berths and the waterfront.

As far as the Company's Dry bulk cargo handling business is concerned it comprises twomain commodities namely Coal and Fertiliser. The country has been witnessing a reductionin Coal imports on the back of improved availability of domestic coal for conventionalpower plants and the focus of the Central Government in promoting Renewable Energy. TheFertiliser Imports are likely to remain steady on the back of the above normal monsoonexpected during the year. In the case of Liquid Cargo the tankage facility of all threeoperators in the Port is operational and steadily ramping up.

Inland evacuation of cargo has been a major constraint from cost as well as timeperspective for the country. A recent study conducted on Road transportation (TCI alongwith IIM Calcutta) indicates that India suffers a loss of USD 21.3 billion annually onaccount of inland transportation delays additional fuel consumption due to poor roadconditions and frequent halts by trucks. India has a long coast line which has remainedunderutilized. Like Railways Waterways are also an environment friendly mode oftransportation. The Government's focus in promoting coastal movement of cargo will notonly bring in cost efficiencies and improve utilization of the country's water resourcesbut it will also substantially reduce the strain on Road traffic and vehicularpollution.Your Company had an opportunity in handling the first ever Coastal RORO vesselmovement within the country from Chennai to Pipavav. Depending upon the opportunities fortwo way movement of vehicles by the auto companies coastal movement of RORO vessels canbecome an efficient and cost effective mode of transport. Similarly frequent upwardrevision in freight rates in the past coupled with a reduction in diesel prices hasresulted in cargo moving away from Rail to Road. This has adversely impacted freightearnings for the Railways apart from the pressure on the country's Highways. The stepstowards rationalization of freight by Railways would contribute in the shift from Road toRail bring efficiencies into the system and reduce road congestion.

Your Company is committed to improving Safety at the Port for its Employees theirfamilies the Contractor's Employees and the local community. As part of the globalinitiative APM Terminals has four underlying principles- Safety is the license tooperate; has no hierarchy; it means no compromise and all companies should be activelycommitted to it. All terminals within the APM Terminals Portfolio are engaged in sharingof Best Practices. Your Company's Health Safety Security and Environment (HSSE) Teamfocuses on providing training on Personal Safety to all Truck Drivers visiting the Portand during the year has conducted approximately 37000 training sessions for TruckDrivers. Safety Awareness Programmes are also conducted by the HSSE Team in schools in thevicinity of the port which helps in inculcating the habits of safe behavior at an earlyage amongst the students and it also brings positive change in behavior of the adults.YourCompany has also launched a course on Road Safety with MS University Vadodara and hasalso developed a Manual on Traffic Rules as part of the course.

Effective 1st July 2016 the International Maritime Organization (IMO) has adoptedamendments to the Safety of Life at Sea (SOLAS) Convention under which every ExportContainer would be loaded on the vessel only if its Verified Gross Mass (VGM) has beensubmitted by the Shipper to the Shipping line or to the Port. The Indian Maritime Industryis all set to promulgate the new rule and the Director General of Shipping (DG Shipping)has issued detailed procedures for its implementation. As per the requirement under theConvention your Company has completed the necessary actions and is ready to implement theamendment rule under the SOLAS Convention.

On behalf of the Board of Directors of the Company I take this opportunity to expressour sincere appreciation to all our shareholders vendors and customers for theircontinuous support and to our employees for their dedication and commitment. I also thankthe State and Central Government bodies and my colleagues on the Board for their supportguidance and valuable insight. I look forward with optimism towards a sustained economicgrowth in India and a very exciting and prosperous year ahead for Gujarat Pipavav PortLimited.

With Best Wishes

Yours truly

Tejpreet Singh Chopra

Chairman