Gujarat Pipavav Port Ltd

The Members,

Gujarat Pipavav Port Limited

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.

(INR Million)

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:

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.

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)

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

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.

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.

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.

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.

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.

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.

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 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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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;

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.

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. 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

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.

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. Mr. Samir Chaturvedi, Chairman, Independent Director

2. Ms. Monica Widhani, Independent Director

3. 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.

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.

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/eovernance

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.

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.

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

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, Chairperson, Independent Director

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 website https://www.apmterminals.com/en/pipavav/investors/governance

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.

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.

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.

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 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 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 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. 5.14 million to its Independent Directors pursuant to the shareholder's approval obtained in the Annual General Meeting held on 13 August 2021.

The Directors are not paid remuneration/commission from any other 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 while considering the following:

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.

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.

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.

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.

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

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

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:

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.

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.

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.

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.

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 2024.

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) are Re-appointed as Statutory Auditors of the Company for a period of five years in the Annual General Meeting held on 6 August 2020.

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.

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.

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.

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

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.

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.

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

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

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.

The Company is in compliance with the mandatory Secretarial Standards.

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.

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.

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.

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

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, 2024 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.

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.

Median Remuneration: Rs.2.68 million

Managing Director's Remuneration: Rs. 23.43 million

Except the Managing Director, the Company does not have any Executive Director. The ratio of Managing Director's Remuneration to Median Remuneration of Employees is: 8.88

The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

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

The number of permanent employees on the rolls of the Company: 463

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.

10.3% Average percentile increase for employees other than Managerial Personnel and increase for the Managerial Personnel is 9.2%.

The Annual Report is being circulated without the Statement. In case any Member requires a copy of the Statement then they can write to the Company Secretary for sending the statement.

The remuneration paid by the Company is based on its Remuneration Policy which is aligned with the parameters laid out globally by the parent company APM Terminals.

The CSR Policy of the Company has the following Core Focus Areas:

• Education

• Health & Environment Sustainability

• Socio Economic Development and Social Business Projects

• Women Empowerment

The policy is available on the Company's website and can be accessed through the link: https://www.apmterminals.com/en/pipavav/investors/governance

+Ms. Matangi Gowrishankar was appointed as Member of the Committee on 24 May 2023 and Chairperson on 12 October 2023 *Mrs. Hina Shah ceased to be Director from 30 July 2023 after completion of her tenure **Mr. Julian Bevis has ceased to be Director from 12 December 2023

The composition of CSR Committee and of CSR Policy is available on the Company's website and can be accessed through the link: https://www.apmterminals.com/en/pipavav/investors/governance

The details of CSR Projects approved by the Board and being carried out are available on the Company's website and can be accessed through the link: https://www.apmterminals.com/en/pipavav/CSR/csr

Not applicable. The Company did not have CSR obligation of Rs 10 Crore or more in pursuance of Section 135(5) of the Companies Act, 2013 in the three immediately preceding financial years.

Rs. 3,503.51 million

Rs. 70.07 million

None

None

Rs. 70.07 million

Rs. 67.11 million

Rs. 3.16 million

None

Rs. 70.27 million

VYes ? No

If Yes, enter the number of Capital assets created/ acquired 20

Furnish the details relating to such asset(s) so created or acquired through Corporate Social Responsibility amount spent in the Financial Year: