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Gujarat Pipavav Port Ltd.

BSE: 533248 Sector: Others
NSE: GPPL ISIN Code: INE517F01014
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NSE 15:59 | 17 Aug 137.95 -3.05
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OPEN 142.80
PREVIOUS CLOSE 0.00
VOLUME 1069687
52-Week high 197.35
52-Week low 121.20
P/E 27.16
Mkt Cap.(Rs cr) 6,684
Buy Price 0.00
Buy Qty 0.00
Sell Price 138.00
Sell Qty 5570.00
OPEN 142.80
CLOSE 0.00
VOLUME 1069687
52-Week high 197.35
52-Week low 121.20
P/E 27.16
Mkt Cap.(Rs cr) 6,684
Buy Price 0.00
Buy Qty 0.00
Sell Price 138.00
Sell Qty 5570.00

Gujarat Pipavav Port Ltd. (GPPL) - Director Report

Company director report

To

The Members

Gujarat Pipavav Port Limited

The Directors have pleasure in submitting their 24th Annual Report to the Members ofthe Company together with the Audited Statement of Accounts for the year ended 31st March2016. The Company changed its Accounting year from January- December to April- Marchduring the previous year in line with the provisions of the Companies Act 2013 whichprescribes for a uniform financial year. Therefore the figures for the previous year arefor a period of fifteen months from 1st January 2014 to 31st March 2015 and are notcomparable with the current year's figures for twelve months period from 1st April 2015 to31st March 2016.

1. FINANCIAL STATEMENTS & RESULTS:

a. FINANCIAL RESULTS

(Rs. In Million)
Particulars For the year ended 31st March 2016 For the fifteen month period ended 31st March 2015
Operating Income 6599.54 8670.27
Less: Total Expenditure 2845.82 3658.62
Operating Profit 3753.72 5011.65
Add: Other Income 248.05 400.53
Profit before Interest Depreciation Tax and Exceptional Item 4001.77 5412.18
Less: Interest 1.59 258.51
Less: Depreciation 963.60 832.86
Profit for the year before Exceptional Item 3036.58 4320.81
Add: Exceptional Income 604.09 -
Less: Exceptional Expenditure - 448.01
Profit Before Tax 3640.67 3872.80
Less: Taxes * (1274.10) -
Profit after Tax 2366.57 3872.80
Balance carried to Balance sheet 2366.57 3872.80

*Taxes represent 'Deferred Tax Liability' of the Company as at the end of respectiveperiod. The Company is on a Tax Holiday under Section 80 (IA) of the Income tax Act andhas Nil tax liability until 31st March 2017. However the Company is required to payMinimum Alternate Tax (MAT) which has been appropriately reflected in the financialstatements in accordance 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 2016 For the fifteen month period ended 31st March 2015
Bulk Cargo Handled (In MT) 2478743 4643675
Containers Handled (In TEUs) 694614 980689
Liquid Handled (In MT) 706877 304548
RORO (No. of Cars)* 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 PRCL is an AssociateCompany and its accounts are to be consolidated with the Company's accounts. With morethan 50% of PRCL's shareholding held by Government/ Public Sector Undertakings PRCL isrequired to accomplish Statutory Audit followed with the CAG Audit. As on the date of thisReport PRCL's Audited Financial Statements are not available therefore the Company hasprepared its Consolidated Financial Statement based on Unaudited financial statementsprovided by the PRCL Management.

d. DIVIDEND:

The Company has set off all its accumulated losses during the year ended 31st March2016 and the Board of Directors is pleased to recommend a Maiden Dividend of Rs. 1.90 pershare on the Company's outstanding Equity Share Capital.

The Dividend is subject to the approval of the Members at the Annual General Meeting on11th August 2016 and will be paid on or after 12th August 2016 within the stipulated timelimit to all Members whose Name appears in the Register of Members as on the date of bookclosure ie. from Friday 5th August 2016 to Thursday 11th August 2016 (both daysinclusive). The total dividend payout of Rs. 1.90 per equity share will aggregate to Rs.1110.74 Million including the Dividend Distribution Tax of Rs. 192.20 Million which willbe borne by 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 TO RESERVES:

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

f. REVISION OF FINANCIAL STATEMENT:

During the previous year the Company changed its financial year from January- Decemberto April- March. Therefore the financial statements for the previous year are for a periodof fifteen months from 1st January 2014 to 31st March 2015.

g. DEPOSITS

The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 ("the Act") read with theCompanies (Acceptance of Deposit) Rules 2014 during the period under review. Hence therequirement for furnishing of details of deposits which are not in compliance with theChapter 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 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 INTERNAL FINANCIAL 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 observed by the Statutory Auditors and the Internal Auditorsof the Company for inefficiency or inadequacy of such controls. Wherever suggested by theauditors the improved control measures have been implemented and their functioning isreviewed from time to time.

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

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

k. PARTICULAR OF CONTRACTS 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 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 as per the requirementunder the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Therelated party transaction with Maersk Line A/S in connection with Income from PortOperations is a material transaction. The Company had obtained Shareholders Approval intothe matter in its previous Annual General Meeting held on 30th July 2015 pursuant to therequirements under revised Clause 49(VII)(E) of the Stock Exchange Listing Agreementeffective 1st October 2014. Due to the promulgation of SEBI (Listing Obligations andDisclosure Requirement) Regulations 2015 effective 1st December 2015 the Company isrequired to once again obtain Shareholders approval as per the requirement underRegulation 23(8) of SEBI (Listing Obligations and Disclosure Requirement) Regulations2015. 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 nothave any investments except its shareholding in the Associate Company namely PipavavRailway Corporation Limited.

Further the Company is engaged in the business of providing infrastructural facilitiesand 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 informationas 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 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.

2. EXPANSION PROJECT AND NEW INVESTMENTS

The Company's expansion project for increase in Container handling capacity from850000 TEUs to 1.35 Million TEUs is complete. The old STS Cranes have been shipped outand the new Cranes are operational. The Container yard capacity is being progressivelyincreased based on the storage requirement. The work on Internal Roads is complete. An oldbulk cargo handling crane has been replaced with a new Gottwald Crane. The 2 new RubberTyre Gantry Cranes to be used in Container Yard and 1 Rail Mounted Gantry Crane to be usedin the Rail Yard are expected to be delivered by June 2016. There are no new furtherinvestments envisaged.

3. OUTLOOK

The growth in volume of the Global Trade is expected to remain sluggish in the Year2016 at 2.8%. It will be the fifth consecutive year of trade growth below 3%. But thedemand for imported goods in the developing Asian economies is expected to improve and theGlobal trade is likely to grow at 3.6%. To that extent India has been in the forefrontwith a steady and consistent GDP growth inspite of the weak global market conditions.

4. RISKS AND AREAS OF CONCERN

The risks to the forecast are tilted to the downside including further slowing inemerging economies and financial volatility including a sharper than expected slowing ofthe Chinese economy worsening financial market volatility and exposure of countries withlarge foreign debts to sharp exchange rate movements.

5. 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. PradeepMallick (DIN: 00061256) and Mr. Pravin Laheri IAS (Retd.)(DIN: 00499080) are theCompany's Independent Directors for a period of five consecutive years from the date ofthe Company's previous Annual General Meeting held on 30th July 2015.

The Members approved the appointment of Mr. Keld Pedersen (DIN: 07144184) as ManagingDirector effective 1st May 2015 in the Company's previous Annual General Meeting held on30th July 2015.

Mr. A. K. Rakesh IAS was appointed Nominee Director on 12th October 2015 representingGujarat Maritime Board the Port Regulator.

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

Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. Julian Bevis(DIN:00146000) and Mr. Rizwan Soomar (DIN:02398970) are liable to retire by rotation atthe ensuing Annual General Meeting and being eligible offer for re-appointment. YourDirectors recommend the re-appointment.

b. DECLARATIONS BY INDEPENDENT DIRECTORS:

The Company has received declarations form 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 previous AGM for a period of fiveyears.

The Company has been regularly conducting Familiarisation Program for its IndependentDirectors and has posted its details on its websitehttp://pipavav.com/independent_director.php

6. DISCLOSURES RELATED TO BOARD COMMITTEES AND POLICIES

a. BOARD MEETINGS:

The Board of Directors met four times during the year ended 31st March 2016 inaccordance with the provisions of the Companies Act 2013 and rules made thereunder.

b. DIRECTOR'S RESPONSIBILITY STATEMENT:

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 2016 the Board ofDirectors hereby confirms 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 2016 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 suchinternal financial 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. Rizwan Soomar 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 of a Director and policy relating toremuneration for Directors Key Managerial Personnel and other employees.

Major criteria defined in the policy framed for appointment of and payment ofremuneration to the Directors of the 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 marketing administration research corporate governance technicaloperations or other disciplines related to the Company's business.

b) In case of appointment as an Executive Director the candidate must have therelevant technical or professional qualifications and experience as considered necessarybased on the job description of the position. In case no specific qualification orexperience is prescribed or thought necessary for the position then while recommendingthe appointment the HR Department shall provide the job description to the Committee andjustify that the qualifications experience and expertise of the recommended candidate aresatisfactory for the relevant appointment. In such circumstances the Committee may callfor an expert opinion on the appropriateness of the qualifications and experience of thecandidate 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 shall have not less than five years of working experience in suchfield as a professional in practice advisor consultant or as an employee. Provided thatthe Board may waive the requirements of qualification and/ or experience under thisparagraph for 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 Commission andvalue of the perquisites shall not exceed the permissible limits as are mentioned withinthe provisions of the Companies Act 2013. They shall not be eligible for any sitting feesfor 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 to the provisions of Section177 of the Companies Act 2013. The composition of the Audit Committee is in conformitywith 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 Actand it reviews the information as required under the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

During the year under review there were no instances of recommendation of theCommittee 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 theBoard of Directors of the Company constituted the Stakeholder's 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' RelationshipCommittee.

f. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:

The Board of Directors of the Company has pursuant to the provisions of 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 provides a formal mechanism for all employees of the Company to makedisclosure at the designated email id about suspected fraud or unethical behavior. It alsoprovides a designated phone number to directly report an instance. The Policy encouragesits employees to immediately raise his/her concern to the respective Manager or to Head ofHR whenever they notice any contravention with the Company's Code of Conduct or fraud orany unethical behaviour. In case the concerned person is not comfortable in reporting thematter to his/ her Manager or to the Manager's Manager or to the Head of HR he/she canalso report to the Compliance Officer of the parent Company APM Terminals.

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 Company shares the distinctive set of the Group's CoreValues that drive the way we do business. The Company is committed to adhere to thehighest standards of ethical moral and legal conduct of business operations the Group'scommitment to the UN Global Compact and our commitment to our people customers andcommunities.

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 SOCIAL RESPONSIBILITY 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 March 2016 the Company was required to spend Rs. 43.5Million towards the CSR activities out of which an amount of Rs. 20.8 Million was spent inthe areas of Education Health Safety & Environment Women Empowerment and SkillDevelopment and the Rural Development Project. The Company has been evaluating variousactivities in order to be able to make a meaningful contribution to the society in thenearby geographical areas. The balance unspent amount of Rs. 22.7 Million is being carriedforward and will be spent during the current year ending 31st March 2017.

In addition to Rs. 20.8 Million spent during the year ended 31st March 2016 theactivities underway during the year ended 31st March 2015 amounting to Rs. 12.3 Millionhave been completed below the budgeted amount during the year ended 31st March 2016 andhas resulted into a saving of Rs 2.9 Million. This amount also will be spent along withthe unspent of Rs. 22.7 Million arising from the year 2015-16. The amounts have been spentin the areas of Sanitation Rural Development and Healthcare.

i. ANNUAL EVALUATION OF DIRECTORS COMMITTEE AND BOARD:

The Independent Directors held their meeting to evaluate the performance of the NonIndependent Directors and the Board as a whole. Each Board member's contribution theirparticipation was evaluated and the domain knowledge they bring. They also evaluated themanner in which the information flows between the Board and the Management and the mannerin which the board papers and other documents are prepared and furnished. The Board alsocarried out the evaluation of Directors.

j. INTERNAL CONTROL SYSTEMS:

Adequate internal control systems commensurate with the nature of the Company'sbusiness and size and complexity of its operations are in place and have been operatingsatisfactorily. Internal control systems consisting of policies and procedures aredesigned to ensure reliability of financial reporting timely feedback on achievement ofoperational and strategic goals compliance with policies procedure applicable laws andregulations and that all assets and resources are acquired economically used efficientlyand adequately protected.

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

The details under Section 197 of the Companies Act 2013 read with Rule 5 of Companies(Appointment & Remuneration) Rules 2014 regarding the employees will be provided uponrequest. The copies of Annual Report are being sent to the Members under Section 136 ofthe Companies Act 2013 excluding the information on employees' particulars which isavailable for inspection by the Members at the Registered Office of the Company during thebusiness hours on working days of the Company upto the date of the Company's forthcomingAnnual General Meeting. Any Member who is interested in a copy of the employees'particulars may write to the Company Secretary.

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.

7. 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 31ST MARCH 2016:

There are no Audit Observations on the Standalone Financial Statements of the Companyfor the year ended 31st March 2016

The Statutory Auditors have made an observation in their Audit Report for theConsolidated Financial Statements of the Company for the year ended 31st March 2016 inClause 7(a) and (b) of their Report as follows:

Basis for Qualified Opinion

7(a) The consolidated financial statements include the Company's share of net profit ofRs. 316.78 Million based on its unaudited financial statements as at 31 March 2016 inrespect of its associate company not audited by us. The financial statements/ informationof the associate is pending audit by their auditors. Accordingly our opinion on theconsolidated financial statements insofar as it relates to the aforesaid amount anddisclosures included in respect of this associate company is based solely on the financialinformation of the associate company for the year ended on 31 March 2016 as furnished tous by the Management of the Company.

(b) Further pending the audit of the associate for the year ended on 31 March 2016 bytheir auditors we are unable to report on the adequacy of the internal financial controlsover financial reporting and operating effectiveness of such controls of the associatecompany incorporated 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 provisionsof Section 2(6) of the Companies Act 2013 PRCL is an Associate Company. With more than50% of PRCL's shareholding held by Government/ Public Sector Undertakings PRCL isrequired to accomplish Statutory Audit followed with the CAG Audit. As on the date of thisReport PRCL's Audited Financial Statements are not available therefore the Company hasprepared its Consolidated Financial Statement based on Unaudited financial statementsprovided by the PRCL Management.

b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31ST MARCH 2016:

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 2016.

The Secretarial Audit Report issued in Form MR-3 forms part to 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 Price Waterhouse Chartered Accountants LLP have beenappointed as the Statutory Auditors of the Company for a period of five years in theprevious Annual General Meeting held on 30th July 2015 subject to ratification of theirappointment by the Members at every Annual General Meeting.

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.

8. 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 2016 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 Port Development and Operations. Consideringthe nature of business activity the particulars regarding conservation of energy andtechnology absorption as required under the provisions of Section 134(3) (m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are notapplicable and have not been included.

The details regarding the foreign exchange earnings and outgo during the period underreview are mentioned in Note no. 37 (c) and (d) of Notes to Accounts.

c. CORPORATE GOVERNANCE (in terms of 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 2016 remains unchanged.

9. ACKNOWLEDGEMENTS AND APPRECIATION:

Your Directors thank the customers shareholders suppliers bankers businesspartners/associates and Central and State Government and Gujarat Maritime Board for theircontinued support and encouragement to the Company. Your Directors also wish to place onrecord their sincere appreciation of the commitment and enthusiasm of all employees fortheir significant role in the Company's growth till date.

For and on behalf of the Board
CHAIRMAN
DIN: 00317683
Date: 19th May 2016
Place: Mumbai
Registered Office
Pipavav Port
At Post Ucchaiya via Rajula
District Amreli 365560
CIN L63010GJ1992PLC018106
TEL No. 02794 302400 Fax No. 02794 302413
Website: www.pipavav.com
EMail: investorrelationinppv@apmterminals.com