Gujarat Pipavav Port Limited
The Directors of Gujarat Pipavav Port Limited (the Company') have pleasure insubmitting their 25th Annual Report to the Members of the Company together with theAudited Standalone and Consolidated Statement of Accounts for the year ended 31st March2017. The Company has for the first time presented the Ind AS compliant financialstatements as per the requirement under the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. Accordingly the previousyear's figures have been re-grouped wherever applicable.
1. FINANCIAL STATEMENTS & RESULTS:
a. FINANCIAL RESULTS:
( Rs . In Million)
| ||For the year ended 31st ||For the year ended 31st |
|Particulars || || |
| ||March 2017 ||March 2016 |
|Operating Income ||6831.04 ||6599.54 |
|Less: Total Expenditure ||2645.14 ||2838.91 |
|Operating Profit ||4185.90 ||3760.63 |
|Add: Other Income ||353.59 ||303.69 |
|Profit before Interest Depreciation Tax and Exceptional Item ||4539.49 ||4064.32 |
|Less: Interest ||4.03 ||1.59 |
|Less: Depreciation ||1065.15 ||973.39 |
|Profit Before Tax ||3470.31 ||3089.34 |
|Less: Taxes * ||971.19 ||1177.50 |
|Profit after Tax ||2499.12 ||1911.84 |
|Balance carried forward to Balance sheet ||2498.41 ||1907.36 |
*The Company was on a Tax Holiday under Section 80 (IA) of the Income tax Act and hasNil tax liability until 31st March 2017. However the Company is required to pay MinimumAlternate Tax (MAT) which has been appropriately reflected in the financial statements inaccordance with the Accounting Principles. b. OPERATIONS:
The Company is engaged in the business of Port Development and Operations at PipavavPort Gujarat under the 30 year Concession vide Agreement dated 30th September 1998 fromGujarat Maritime Board. The Port located in Southwest Region of Gujarat handles Dry BulkContainers Liquid and RORO vessels. The performance details are as follows:
|Particulars ||For the year ended 31st March 2017 ||For the year ended 31st March 2016 |
|Bulk Cargo Handled (In MT) ||2112078 ||2478743 |
|Containers Handled (In TEUs) ||663380 ||694614 |
|Liquid Handled (In MT) ||685960 ||706877 |
|RORO (No. of Cars)* ||83607 ||19644* |
*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 inview of the provisions of Section 2(6) of the Companies Act 2013 (the Act') PRCLis an Associate Company and pursuant to the provisions of Section 129 of the Act itsaccounts are to be consolidated with the Company's accounts. More than 50% of PRCL'sshareholding is held by Government/ Public Sector Undertakings so PRCL is required toaccomplish Statutory Audit followed with the CAG Audit. As on the date of this ReportPRCL's Audited Financial Statements are not available therefore the Company has preparedits Consolidated Financial Statement based on Unaudited financial statements provided bythe PRCL Management.
d. DIVIDEND: The Board of Directors in the Meeting held on 4th November 2016declared and paid an Interim Dividend of Rs. 2.00 per share. The Board is pleased torecommend a Final Dividend of Rs. 1.80 per share on the Company's outstanding Equity ShareCapital. The Dividend is subject to the approval of the Members at the Annual GeneralMeeting on 10th August 2017 and will be paid on or after 11th August 2017 within thestipulated time limit to all Members whose name appears in the Register of Members as onthe date of book closure ie. from Friday 4th August 2017 to Thursday 10th August 2017(both days inclusive). The total dividend payout of Rs. 1.80 per equity share willaggregate to Rs. 1047.34 Million including the DividendDistribution Taxof Rs.177.15Million which will be borneby the Company.
Dividend is the Company's primary distribution of profits to its Shareholders. TheCompany's objective is to sustain a steady and consistent distribution of profits by wayof Dividend to its Shareholders supported by underlying earnings growth and subject toi) availability of profits and funding requirements ii) future funding needs as per theCompany's growth plans iii) applicable laws and in accordance with the recommendation ofthe Board of Directors and approval of Shareholders. e. TRANSFER TORESERVES : TheBoard of Directors have not recommended any transfer of profit to reserves during theperiod under review.
Hence the entire amount of profit has been carried forward to the Statement of Profitand Loss
f. REVISION OF FINANCIAL STATEMENT:
The Company has not carried out any revision financial years as per financialstatements anyofthethreepreceding its the requirement under Section 131 of the Act.
g. DEPOSITS: The Company has not accepted or renewed any amount falling within thepurview of provisions of Section 73 of the Companies Act 2013 ("the Act") readwith 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 compliancewith the Chapter V of the Act is not applicable.
h. DISCLOSURES UNDERSECTION 134(3)(l) OF THE COMPANIES ACT 2013:
Except as disclosed elsewhere in this report no material changes and commitments whichcould affect the Company's financial position have occurred between the end of thefinancial period of the Company and date of this report.
i. DISCLOSURE OF INTERNALFINANCIAL CONTROLS :
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observation has been made by the Statutory
Auditors and the Internal Auditors of the Company for inefficiency or inadequacy ofsuch controls. Wherever suggested by the Auditors the improved control measures have beenimplemented and their functioning is reviewed from time to time.
j. DISCLOSURE OF ORDERS PASSED BYREGULATORS OR COURTS OR TRIBUNAL:
No adverse orders have been passed by any Regulator or Court or Tribunal which can haveimpact on the Going Concern status and on the Company's operations in future.
k. PARTICULAR OF CONTRACTS OR ARRANGEMENTWITH 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 thefinancial year under review are in ordinary course of business and at arms' length.Therefore they do not come within the purview of the provisions of Section 188 of theCompanies Act 2013. All the transactions have prior approval of the Audit Committee asper the requirement under the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The related party transaction with Maersk Line A/S in connection withIncome from Port Operations is a material transaction. The Contract with Maersk Line A/Shas been renewed for three years from 1st April 2017 to 31st March 2020. Pursuant toRegulation 23(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Company is required to obtain Shareholders approval. Aresolution to that effectis includedin the Notice conveningthe meeting.
l. PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES:
The Company has not provided any loans guarantees and securities. The Company does nothave any investments except its shareholdingin the Associate Company PRCL. Further theCompany is engaged in the business of providing infrastructural facilities and istherefore exempt from the provisionsof Section 186 of the Companies Act 2013.
m. DISCLOSURE UNDERSECTION 43(a)(ii) OF THE COMPANIES ACT 2013:
The Company has not issued any shares with differential rights and hence noinformation as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of theCompanies (Share Capital and Debenture) Rules 2014 is furnished.
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 andhence 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 duringthe year under review and hence no information as per provisions of Section 62(1)(b) ofthe Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules 2014 isfurnished.
p. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT 2013:
During the year under review there were no instances of non-exercising of votingrights in respect of shares purchased directly by employees under a scheme pursuant toSection 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures)Rules 2014.
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 theglobal container trade to grow by 2%. In view of subdued growth in global trade theshipping lines are expected to reduce/ rationalize the capacity in various trades to alignwith global supply and demand requirements.
The Container market on the West coast in India has increased by about 6% largelydriven by strong imports. India is amongst the very few global markets reporting thegrowth numbers. The growth trend in imports is expected to continue during the currentyear while the exports remain under pressure. The dry bulk cargo comprises import of Coaland Fertiliser. Coal imports have been witnessing consistent decrease in volumes due tobetter availability of domestic coal and also because of the Government's focus onpromoting clean renewable energy through wind and solar power. The Fertiliser importsremain volatile depending upon the monsoon and the availability of the fertiliser stock inthe domestic market. Moreover the compulsory Neem coating is also likely to reduce theimports. Liquid cargo mainly LPG and RORO are the two promising areas. The Government'sinitiative of providing LPG connection in the rural areas is likely to increase the LPGimports. With Gujarat developing into an Auto Hub the car exports from Gujarat has beendoing well.
3. RISKS AND AREAS OF CONCERN:
The global trade is faced with two main areas of uncertainties one the policychanges that the US Administration might implement in the near future and two the impactof UK's exit from the European Union. Any adverse movement in any of these two events islikely to impact the growth in the trade and impact the shipping lines. In India theimports have been strong and are likely to maintain the trend. In case of below normalmonsoon in the coming season it could have an adverse impact on the consumption patternin the rural areas.
4. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL:
a. BOARD OF DIRECTORS & KEYMANAGERIAL PERSONNEL:
Mr. Tejpreet Singh Chopra (DIN: 00317683) Ms. Hina Shah (DIN: 06664927) Mr. PradeepMallick (DIN: 00061256) and Mr. Pravin Laheri IAS (Retd.)(DIN:00499080) are the Company'sIndependent Directors for a period of five consecutive years from the date of theCompany's Annual General Meeting (AGM) held on 30th July 2015. In accordance with theprovisions 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. GujaratMaritime Board (GMB) the port regulator has one seat on the Company's board. Due to theorganizational changes their Nominee is yet to be advised by GMB. The Promoter APMTerminals Mauritius Limited had nominated Mr. Ahmed Hassan (DIN: 07588595) on theCompany's Board and he was appointed as Additional Director on 10th October 2016. He wasappointed in place of Mr. Jan Damgaard Sorensen (DIN: 06408939) who ceased to be theDirector of the Company from 16th September 2016. There has been further change innomination by the Promoter. Mr. Hassan has resigned as the Company's Director with effectfrom 5th April 2017 and Mr. Sorensen is appointed as Additional Director with effect from11th May 2017. Mr.
Sorensen is seeking appointment as Director of the Company. Your Board of Directorsrecommend the appointment of Mr. Jan Damgaard Sorensen (DIN: 06408939) as Director of theCompany. Mr. Rizwan Soomar (DIN: 02398970) has resigned as the Company's Director witheffect from 5th April 2017. The Promoter has nominated Mr. David Skov (DIN:07810539) whois appointed as Additional Director of the Company with effect from 11th May 2017. Mr.Skov is seeking appointment as Director of the Company. Your Board of Directors recommendthe appointment of Mr. David Skov (DIN:07810539) as Director of the Company. Pursuant tothe 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 eligibleoffers himself for re-appointment. Your
Directors recommend the re-appointment.
Your Directors thank Mr. Rizwan Soomar and Mr. Ahmed Hassan for their valuablecontribution during their tenure as
Directors of the Company.
b. DECLARATIONS BYINDEPENDENT DIRECTORS:
The Company has received declarations from all the Independent Directors under Section149(6) of the Companies
Act 2013 confirming their independence vis-a-vis the Company.
The Independent Directors were appointed in the AGM held on 30th July 2015 for a periodof five years.
The Company has been regularly conducting Familiarisation Programme for its IndependentDirectors and has posted the details on its websitehttp://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 31st March 2017 inaccordance with the provisions of the Companies Act 2013 and rules made thereunder.
b. DIRECTOR'S RESPONSIBILITYSTATEMENT :
In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for the year ended 31st March 2017 the Board ofDirectors hereby confirm that:
a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b. such accounting policies have been selected and applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at 31st March 2017 and ofthe profit of the Company for that period;
c. proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany 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 internalfinancial controls are adequate and were operating effectively;
f. proper systems have been devised to ensure compliance with the provisions of allapplicable 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 ofDirectors 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 ofthe Companies Act 2013 formulated the policy setting out the criteria for determiningqualifications positive attributes independence
Director and policy relating to remuneration for Directors Key Managerial Personneland other employees.
Major criteria defined in the policy framed for appointment of and payment ofremuneration to the Directors
Company are as under:
a) While appointing a Director it shall always be ensured that the candidate possessesappropriate skills experience and knowledge in one or more fields of finance lawmanagement sales research corporate governance technical operations or otherdisciplines related to the Company's business.
b) In case of appointment as an Executive Director the candidate must have therelevant technical or professional qualification and experience as considered necessarybased on the job case no specific qualification or experience is prescribed or thoughtnecessary for the position then while recommending the appointment the HR Departmentshall provide the job description to the Committee and justify that the qualificationexperience and expertise of the recommended candidate is satisfactory for the relevantposition. The Committee may also call for an expert opinion on the appropriateness of theand 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 postgraduate degree diploma or a professional qualification in the field of his practice/profession/ service and years of working experience in such field as a professional inpractice advisor consultant or as an employee. Provided that the Board may waive therequirement of qualification and/ or experience a deserving candidate.
d) The Board while making the appointment of a Director shall also try to assess fromthe information available and from the interaction with the candidate that he is a fairachiever in his chosen field and that he is a person with integrity diligence and openmind.
e) While determining the remuneration of Executive Directors and Key ManagerialPersonnel the Board shall consider following factors:
i) Criteria/ norms for determining the remuneration of such employees prescribed in theHR 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 avacancy on the death resignation removal etc. of an existing employee
vii) The remuneration drawn by other employees in the grade with matchingqualifications and seniority if applicable.
f) The remuneration payable to the Executive Directors including the Commissionand value of the perquisites shall not exceed the permissible limits as are mentionedwithin the provisions of the Companies Act 2013. They shall not be eligible for anysitting 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 themeeting 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 ofpocket expenses for attending Board/ Committee Meetings.
d. AUDIT COMMITTEE: The Audit Committee of Directors was constituted pursuant tothe provisions of Section 177 of the Companies Act 2013. The composition of the AuditCommittee is in conformity with the provisions of the said section. The Audit Committeecomprises:
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 Actand it reviews the information as required under the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. During the year under review there were noinstances of recommendation of the Committee not being accepted by the Board of Directorsof 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 theBoard of Directors of the Company constituted the Stakeholders Relationship Committeecomprising:
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 POLICYFOR 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 itsPowers) Rules 2014 framed the Whistle Blower Policy of the Company. The Policy providesa formal mechanism for all employees of the Company to make disclosure at the designatedemail id about suspected fraud or unethical behaviour. It also provides a designated phonenumber to directly report an instance. The Policy encourages its employees to immediatelyraise his/her concern to the respective Manager or to Head of HR whenever they notice anycontravention with the Company's Code of Conduct or fraud or any unethical behaviour. Incase the concerned person is not comfortable in reporting the matter to his/her Manager orto the
Manager's Manager or to the Head of HR he/she can also report to the ComplianceOfficer of the parent Company
The policy also provides direct access to the Chairman of Audit Committee through hispersonal email id.
The Company has also constituted an Internal Complaints Committee as per the provisionsof The Sexual Harassment of Women at Workplace (Prevention Prohibition & Redressal)Act 2013 and the Rules made thereunder for reporting the instances related to SexualHarassment and deal with them in a timely manner. As part of APM Terminals the Companyshares 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 legalconduct of business operations the Group's commitment to the UN Global Compact and ourcommitment to our people customers and communities.
g. RISK MANAGEMENT POLICY:
The Board of Directors of the Company has designed Risk Management Policy andGuidelines to avoid events situations or circumstances which may lead to negativeconsequences on the Company's businesses and define a structured approach to manageuncertainty and to make use of these in their decision making pertaining to all businessdivisions and corporate functions. Key business risks and their mitigation are consideredin the annual/ strategic business plans and in periodic management reviews. h.CORPORATE SOCIALRESPONSIBILITY POLICY:
As per the provisions of Section 135 of the Act read with Companies (Corporate SocialResponsibility Policy) Rules 2014 the Board of Directors has constituted a CorporateSocial Responsibility (CSR) Committee as under:
1. Ms. Hina Shah Chairperson Independent Director
2. Mr. Pravin Laheri IAS (Retd.) Independent Director and
3. Mr. Keld Pedersen Managing Director
The Board of Directors of the Company has approved CSR Policy based on therecommendation of the CSR Committee. The Company has initiated activities in accordancewith the said Policy the details of which have been prescribed in Annexure A attached.
The CSR Policy of the Company is available on the Company's web-site and can beaccessed in the link provided http://pipavav.com /csr.php During the year ended 31st March2017 the Company was required to spend Rs. 63.9 Million towards the CSR activities out ofwhich 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 31st March2017 for which the unspent amount of Rs. 23.5 Million will get utilized. The Company isalso committed to use the unspent amount from previous years of Rs. 25.6 Million and hasbeen carried forward.
i. ANNUALEVALUATION OF DIRECTORS COMMITTEE AND BOARD: The Independent Directorsheld their meeting to evaluate the performance of each Non Independent Director and alsoof the entire Board as a whole. Each Board member's attendance participation andcontribution of his expertise was evaluated. The Board also carried out the evaluation ofDirectors and the various Board Committees did their respective evaluation.
The Board also evaluated the manner in which the information flows between the Boardand the Management and the manner in which the board papers and other documents areprepared and furnished.
j. INTERNAL CONTROLSYSTEMS : Adequate internal control systems commensurate to thesize of the Company's business and its nature of business and its complexities are inplace and have been operating satisfactorily. The adequacy and their functioning isreviewed by the Internal Auditors from time to time and wherever necessary the correctivemeasures are taken.
Internal control systems consisting of policies and procedures are designed to ensurereliability of financial reporting timely feedback on achievement of operational andstrategic goals compliance with policies procedure applicable laws and regulations andthat all assets andresourcesareacquiredeconomicallyusedefficientlyand adequatelyprotected.
k. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 AND OTHER DISCLOSURES ASPER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES 2014: In terms of therequirement under Section 197(12) of the Act the Median Employee's Remuneration of theCompany is Rs. 371179 and the Managing Director's remuneration is Rs. 33592559. Thepercentage increase in remuneration of the Key Managerial Personnel (KMPs) i.e. ManagingDirector Chief
Financial Officer and Company Secretary is 8.50% 6.00% and 10.00% respectively. Theaverage increase for KMPs works out to approximately 8%.
The percentage increase in the median remuneration of employees in the financial yearis 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 Objectivesand the individual employee's objectives are set against which their actual performance isappraised which in turn determines the percentage increase in their remuneration. TheCompany follows the Bell Curve for the performance rating of all its employees. Theremuneration of KMPs has also been determined based on their performance against theirrespective objectives vis-a-vis the Company's objectives.
The Company's Market Capitalization has reduced by 5.8% based on the closing price asof 31st March 2017 compared to 31st March 2016. The Net Worth as per the audited accountsis Rs. 20101.75 Million as of 31st March 2017 compared to Rs. 19716.16 Million as of theprevious year.
The copies of Annual Report as per Section 136 of the Companies Act 2013 are beingsent to the Members excluding the information on employees' particulars under Rule 5 ofthe Companies (Appointment & Remuneration) Rules 2014. Any Member who is interestedin a copy of the employees' particulars may write to the Company Secretary. The detailswill also be available for inspection by the Members at the Registered Office of theCompany during the business hours on working days upto the date of the Company'sforthcoming Annual General Meeting. The Company has paid Commission of Rs. 15 Million toall the four Independent Directors pursuant to the shareholder's approval in the previousAGM. l. PAYMENT OF REMUNERATION / COMMISSION TO DIRECTORS FROM HOLDING OR SUBSIDIARYCOMPANIES: None of the managerial personnel of the Company are in receipt ofremuneration/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 31STMARCH 2017 :
There are no Audit Observations on the Standalone Financial Statements of the Companyfor the year ended 31st March 2017.
The Statutory Auditors have made an observation in their Audit Report for theConsolidated Financial Statements of the Company for the year ended 31st March 2017 inClause 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 ofnet profit of Rs. 361.19 million based on unaudited Ind AS financial statements as at andfor the associate company not audited by us. Further the comparative consolidated Ind ASfinancial information for the year ended 31 March 2016 included in these consolidated IndAS financial statements include Ind AS financial information of the associate company notaudited by us. The Ind AS financial statement as at and for the year ended 31 March 2017and 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. Ouropinion on the consolidated
Ind AS financial statements insofar as it relates to the amounts and disclosuresincluded for the year ended on 31 March 2017 in respect of this associate company is basedsolely on such Ind AS financial information of the associate company for the year ended on31 March 2017 as furnished to us by the Management of the Company. (b) Further pendingthe audit of the associate company for the year ended on 31 March 2017 by their auditorswe are unable to report on the adequacy of the internal financial controls over financialreporting and operating effectiveness of such controls of the associate companyincorporated in India as required to be reported by us.
In this connection the Board of Directors would like to state that the Company holds38.8% shares in Pipavav Railway
Corporation Limited (PRCL) and in view of the provisions of Section 2(6) of theCompanies Act 2013 PRCL is an
Associate Company. PRCL's more than 50% shareholding is held by Government/ PublicSector Undertakings. So
PRCL is required to accomplish Statutory Audit followed with the CAG Audit. As on thedate of this Report PRCL's audit is currently in progress and the Audited Ind AS FinancialStatements are yet to be released. Therefore the Company has prepared its Consolidated IndAS Financial Statement based on Unaudited Ind AS financial statements provided by the PRCLManagement.
b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31ST MARCH 2017:
Provisions of Section 204 read with Section 134(3) of the Companies Act 2013 mandatesto obtain Secretarial Audit Report from Practicing Company Secretary. Accordingly M/sRathi and Associates Company Secretaries have issued the Secretarial Audit Report for theyear ended 31st March 2017.
The Secretarial Audit Report issued in Form MR-3 forms part of this report. The saidreport does not contain any observation or qualification requiring explanation or commentsfrom the Board under Section 134(3) of the Companies Act 2013.
c. RATIFICATION OF APPOINTMENT OF 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 beenappointed as the Statutory Auditors of the
Company for a period of five years in the Annual General Meeting held on 30 th July2015 subject to ratification of their appointment by the Members at every Annual GeneralMeeting.
The matter for ratification of appointment of the said Auditors is included in theNotice of AGM. d. COST AUDITORS:
The Company is engaged in providing Port Services and as per Notification dated 31stDecember 2014 issued by the Ministry of Corporate Affairs pursuant to Section 148 of theCompanies 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 ofthe Annual Return for the year ended 31st March 2017 made under the provisions of Section92(3) of the Act is attached as Annexure B to this Report.
b. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
The Company is engaged in the business of developing and operating a Port Cargohandling incidental to Water Transport. Considering the nature of business activity theparticulars regarding conservation of energy and technology absorption as required underthe provisions of Section 134(3) (m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 are not applicable and have not been included.
c. REMUNERATION PAYABLE BY COMPANIES HAVING NO PROFIT OR INADEQUATE PROFIT (in termsof Section II of Schedule V):
The Company has adequate profits and therefore the provision of Section II in ScheduleV regarding remuneration payable by Companies having no profit or inadequate profitwithout 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 forthe year ended 31st March 2017 remains unchanged.
8. ACKNOWLEDGEMENTS AND APPRECIATION:
Your Directors thank Customers Shareholders Suppliers Bankers BusinessPartners/Associates and the Central and State Government and Gujarat Maritime Board fortheir continued support and encouragement to the Company. Your Directors also wish toplace on record their sincere appreciation of the commitment and enthusiasm of allemployees for their significant role in the Company's performance.
| ||For and on behalf of the Board |
| ||CHAIRMAN |
|Date: 11th May 2017 ||DIN: 00317683 |
|Place: Mumbai || |
|RegisteredOffice || |
|Pipavav Port || |
|At Post Rampara-2 via Rajula || |
|District Amreli 365560 || |
|CIN L63010GJ1992PLC018106 || |
|Tel. No. : 02794 302400 Fax No. 02794 302413 || |
|Email : email@example.com || |
|Website : www.pipavav com . || |