The Directors present herewith Twenty First Annual Report of the
 Company together with the Audited Statement of Accounts for the year
 ended 31st December 2012.
 
 FINANCIAL RESULTS
 
 Particulars                         Year Ended 31st   Year Ended 31st
                                     December 2012     December 2011
                                    (Rs. In Millions) (Rs. In Millions)
 
 Operating Income                        4,160.33          3,967.72
 
 Less: Total Expenditure                 2,341.62          2,141.88
 
 Operating Profit                        1,818.71          1,817.05
 
 Add: Other Income                         154.47            163.65
 
 Profit before Interest, 
 Depreciation, tax and 
 exceptional items                       1,973.18          1,980.70
 
 Less: Interest                            684.15            851.88
 
 Less: Depreciation                        549.42            557.82
 
 Profit/(Loss) Before Tax                  739.61            571.00
 
 Less: Taxes (Fringe Benefit 
 Tax)                                         -                 -
 
 Profit/ (Loss) After Tax                  739.61            571.00
 
 Balance brought forward from
 previous year                          (7,005.84)        (7,745.45)
 
 DIVIDEND
 
 Your Company is pleased to report Net Profit of Rs. 739.61 Million. But
 considering the forthcoming major expansion of the Port and the
 accumulated losses of Rs. 7,005.84 Million, no dividend is recommended.
 
 YEAR IN RETROSPECT & OTHER KEY DEVELOPMENTS
 
 A brief statistical profile on port operations during the year ended
 31st December 2012 comprising of ships calling at the Port and volume
 of cargo handled is as under:
 
 Particulars                         Year 2012       Year 2011
 
 No. of vessel calls at the Port         1,117           1,315
 
 Bulk Cargo Handled (In MT.)         3,118,168       3,793,881
 
 Containers Handled (TEU)              570,480         610,243
 
 The overall container market on West Coast has witnessed low single
 digit growth during Calendar year 2012. The container volume at Pipavav
 for year 2012 was lower by 6.5% compared to previous year. The
 reduction was due to shift of one service to another port on West Coast
 effective April 2012. It has been replaced with another service by the
 same shipping line. Further, two new services have been added by other
 shipping lines during last quarter of year 2012 and the Management''s
 efforts continue to add more services. Meanwhile the Company introduced
 dollar tariff effective August 2012 and it has been .  accepted by all
 our customers. This has resulted in improvement of our realization
 which is offset by lower container volume.
 
 Regarding the bulk cargo business which comprises coal and fertilizers
 as main commodities, overall coal imports across the country for power
 plants has reduced due to the pending decision on re-evaluation of
 power tariff by Government and price parity between imported and
 domestic coal. This is likely to improve with the Government''s approval
 for pooling of prices.  Specific to Pipavav, the challenge has been a
 combination of upward revision of rail freight and realigning of
 freight distance slabs rates which has made Pipavav logistically
 disadvantageous in comparison to other ports on West Coast. With
 respect to fertilizer imports, the overall imports of MOP/DAP has
 fallen over 60% due to high international pricing and partial removal
 of government subsidy on both these products. There was also a delayed
 start to the import season. All of this has contributed to reduction in
 the Company''s bulk cargo volume by 16% compared to last year. But the
 team identified handling of Wheat Exports as an opportunity to offset
 the lower coal and fertilizer volume. This has helped in getting two
 way loaded train movement to and from the port.  The management
 continues its effort in exploring new opportunities for handling export
 commodities in absence of anticipated large coal volumes for effective
 waterfront utilisation.
 
 Regarding the liquid cargo business, the Company has signed agreements
 with three private parties. They have taken land on lease for setting
 up tank farm facilities inside the port and have started construction
 of their tank farms. These are likely to be operational in a phased
 manner from Q4of Calendar Year 2013. This shall improve the capacity
 utilization of our liquid berth.
 
 The introduction of dollar tariff, favorable exchange rate and better
 cargo mix has resulted in Revenue from Operations increase by 5%
 compared to previous year. But these gains have been offset by lower
 cargo volume handled during the year. This has impacted the EBDITA
 margins. The Net Profit increased by 29.53% due to lower borrowing cost
 and Income under Served for India Scheme (SFIS).
 
 UPDATE ON PORT PROJECT EXPANSION
 
 The Company is concluding the debt financing for its proposed expansion
 with International Finance Corporation (IFC) which is part of World
 Bank Group. Simultaneously, the contractors for Capital Dredging and
 Civil Works are also being finalized. The construction activity shall
 commence immediately on closure of the funding.
 
 MANAGEMENT DISCUSSION AND ANALYSIS
 
 Pursuant to the requirements under Clause 49 of the Listing Agreement
 with the Stock Exchanges, a separate section on Management Discussion
 and Analysis (MD&A) has been included as part of the Annual Report. The
 MD&A includes review of industry prospects and developments,
 opportunities and risks, business outlook, risks and concerns, internal
 control systems and their adequacy and discussion on financial
 performance.
 
 SUBSIDIARY COMPANY
 
 The Company does not have any subsidiaries.
 
 CORPORATE GOVERNANCE
 
 Pursuant to Clause 49 of the Listing Agreement, the Corporate
 Governance Report is included in the Annual Report along with the
 Statutory Auditor''s Certificate.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors
 confirm that:
 
 (i) In preparation of the annual accounts, all applicable accounting
 standards have been followed;
 
 (ii) The accounting policies have been applied consistently and the
 judgments and estimates made are reasonable and prudent so as to give a
 true and fair view of the state of affairs of the Company at the end of
 the financial year as on 31st December 2012 and of the profit & loss
 for that period;
 
 (iii) Proper and sufficient care has been taken for maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 (iv) The annual accounts have been prepared on a going concern basis.
 
 DIRECTORS
 
 Mrs. Malini Bansal Lenders Nominee representing IDBI Bank Limited, Mr.
 Shyam Sundar S. G. representing IDFC Private Equity Company Limited and
 Mr. Christian Moller Laursen representing APM Terminals Mauritius
 Limited have ceased to be Directors of the Company since September
 2012.
 
 The Board places on record its appreciation for their valuable
 contribution as Directors of the Company.
 
 In accordance with the provisions of the Companies Act, 1956, Mr.
 Dinesh Lai, Mr. Pankaj Kumar, IAS and Mr. Martin Gaard Christiansen are
 due to retire by rotation and being eligible, offer themselves for
 reappointment.
 
 Mr. Henrik Lundgaard Pedersen, Mr. Pradeep Mallick and Mr. Tejpreet
 Singh Chopra were appointed as Additional Directors of the Company
 effective September 2012. They cease to be Directors of the Company at
 this Annual General Meeting and are proposed to be appointed as
 Directors of the Company liable to retire by rotation.
 
 Appropriate resolutions are being placed in the Notice convening the
 Annual General Meeting for your approval. A brief resume of the
 Directors and other information as per the requirement under Listing
 Agreement has been detailed in the Notice forming part of this report.
 The Directors recommend the resolutions for approval.
 
 AUDITORS
 
 M/s BSR & Associates, Chartered Accountants, are the Statutory Auditors
 of the Company and hold office until the ensuing Annual General
 Meeting. Being eligible, it is proposed to re-appoint them.
 
 ENERGY CONSERVATION, TECHNOLOGY ABSORPTION
 
 Your Company is engaged in the business of port operations and does not
 carry any manufacturing activity. Therefore the information required
 under Section 217 (1)(e) of the Companies Act, 1956 read with the
 Companies (Disclosure of Particulars in the Report of the Board of
 Directors) Rules, 1988 as amended and forming part of the Directors''
 Report for the year ended 31st December 2012 is not applicable.
 
 However, the Company has been consciously taking regular steps for
 energy conservation, technology absorption and reducing carbon
 footprint.
 
 Taking the Company''s initiative of reducing dependency on diesel
 equipments forward, the rail yard operations for handling containers
 has been fully mechanized with Rail Mounted Gantry Cranes (RMGCs). The
 3 cranes became operational during December 2012. These are operated on
 electricity and have replaced the Reach stackers which operated on
 diesel. Rail yard operations at the port have now become safer,
 efficient and contributed to reduction of carbon footprint.
 
 ENVIRONMENT PROTECTION & CORPORATE SOCIAL RESPONSIBILITY
 
 As a good Corporate Citizen your Company considers protection of the
 environment and contribution to the local community as important
 obligations towards the people of the Region of its operations.
 
 The Port Management and the middle level Managers regularly engage with
 the local community, understand their requirements and work towards
 their well being. Regular contribution of resources is made for the
 village and local schools, based on their requirement.
 
 Besides regular monitoring and analysis of Water quality including Sea
 water at the Jetty area and the Air quality, the port has developed a
 separate area for handling ferrous and non ferrous material, waste oil
 and battery waste in an environment friendly manner as part of its
 waste management initiative. 1500 saplings have been planted within the
 port premises for increasing the green belt area during last quarter of
 the calendar year. The port also took steps to create awareness amongst
 the local residents for minimizing the usage of polythene bags.
 
 FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 Details of expenditure and earnings in foreign currencies are mentioned
 in Schedule 15 Note no. 39 to the financial statements.  
 
 PERSONNEL RESOURCES
 
 The particulars as required under Section 217 (2A) of the Companies
 Act, 1956 read with Companies (Particulars of Employees) Rules, 1975
 are annexed to the Directors'' Report. However, as per the provisions of
 Section 219 (1)(b)(iv) of the Companies Act, 1956, the Report and the
 Accounts are being sent to all shareholders of the Company excluding
 the aforesaid information.  The aforesaid information is available for
 inspection at the Registered Office of the Company. Any shareholder
 interested in obtaining such particulars may write to the Company
 Secretary.
 
 FIXED DEPOSITS
 
 The Company has not accepted any deposits within the meaning of Section
 58A of the Companies Act, 1956 and the rules made there under.
 
 ACKNOWLEDGEMENTS
 
 The Board of Directors of your Company acknowledge and place on record
 their sincere appreciation for the strong and dedicated contribution
 made by the loyal employees at all levels. The Directors also wish to
 place on record their appreciation for the continued valuable support,
 co-operation and assistance of Government of India, Government of
 Gujarat, Gujarat Maritime Board and various other Government Agencies,
 Financial Institutions & Banks, Promoters and Group Companies.
 
                               For and on behalf of Board of Directors
 
 Place : Mumbai                                          Per Jergensen
 
 Date : 21st February 2013                                    Chairman