Dredging Corporation of India Ltd

FOR THE YEAR 2023-24

Your Directors are pleased to present this 48th Annual Report together with the audited financial statements of the Company for the year ended March 31, 2024.

1. FINANCIAL RESULTS

2. ACQUISITION OF NEW DREDGER

We are happy to inform you that Ministry has accorded approval to the recommendations of the Expert Committee constituted for the purpose of procurement of 12000 m3 TSHD dredgers by DCI to be constructed at Cochin Shipyard Limited under the Atma Nirbhar Programme – first in 2021, second in 2023 and the procurement of the third dredger should be on the basis of analysis of performance of the 2 dredgers. The third dredger capacity shall be determined based on gap viability analysis of the market in 2025 to achieve requirements of dredging at Indian Major Ports as envisaged in the Maritime Vision 2030. The agreement between Dredging Corporation of India and Cochin Shipyard Limited was signed on 17/03/2022 and tripartite agreement between DCI-CSL-IHC was signed on 13/04/2022. The Cost of the dredger is 104.59 million euros.

The first and second instalment was paid on 04/11/2022 and 14/11/2022 respectively. The third, fourth, fifth and sixth instalment was paid on 18/04/2023 ,04/08/2023,13/11/2023 and 08/01/2024 for this year. This is a major milestone in the new market for which the Company was working more than a decade.

3. CAPACITY UTILISATION

The capacity utilisation in number of days and quantity dredged as against the targets during the year is as under-

4. DCI FLEET

The Company has, 10 Trailer Suction Hopper Dredgers (TSHDs), 1 Cutter Suction Dredger (CSD), one Back Hoe Dredger and one Inland Cutter Suction Dredger apart from other ancillary crafts. Fleet details are as under-

5. DREDGING OPERATIONS

A. i) Important contracts completed during the year-

1. Maintenance dredging in the shipping channel leading to Haldia dock complex in the Hooghly estuary.

2. Maintenance dredging of approach channel, entrance channel, turning circle, docks and sand trap of Paradip Port Trust for the year 2022–23.

3. Maintenance dredging of approach channel, entrance channel, turning circle, docks and sand trap of Paradip Port Trust for the year 2023–24.

4. Capital dredging in the north dock complex of Paradip Port.

5. Maintenance dredging at new sand trap (NST) and its approaches and other areas of VPA for the year 2022–23.

6. Maintenance dredging at new sand trap (NST) and its approaches and other areas of VPA for the year 2023–24.

7. Chartering of DR-XXI to M/s. RKEC Projects Limited for dredging operations at Visakhapatnam.

8. Chartering of DR-XV to M/s. JP Offshores for dredging operations at DGNP, Visakhapatnam.

9. Chartering of DR-XI to M/s. Aurobindo Realty Infrastructure Pvt. Ltd for dredging operations at Ramayyapatanam.

10. Dredging for maintenance of channels and basins at Cochin Port for the year 2022–23. 11. Maintenance dredging of naval channels (Southern Naval Command, Kochi) at Ernakulam for the years 2022–23.

12. Maintenance dredging of Mumbai harbour channel and JN Port channel for the year 2022–23.

13. Capital dredging at Mangrol fishing harbour for 2022–23.

B. ii) New Contracts taken up during the year 2023-24:

1. Chartering of DR-XI to M/s. Aurobindo Realty Infrastructure Pvt. Ltd for dredging operations at Ramayyapatanam.

2. Dredging for maintenance of channels and basins at Cochin Port for the year 2023–24.

3. Maintenance dredging of naval channels (Southern Naval Command, Kochi) at Ernakulam for the year 2023–24.

4. Maintenance dredging at New Mangalore Port for the year 2023–24.

5. Maintenance dredging of Mumbai harbour channel and JN Port channel for the year 2023–24.

6. SAFETY MANAGEMENT SYSTEM (ISM)-

(a) All dredgers (except dumb vessel DCI Dredge XVIII) of DCI hold valid Safety Management Certificate (SMC).

(b) DCI Dredge VIII, DCI Dredge XI and DCI Multicat-1 hold valid Indian Coastal Vessel Safety Certificate.

(c) DCI holds a Document of Compliance (DOC) valid till 24.06.2027. The same is being endorsed every year after annual verification audit by DG Shipping.

Ship Security System (ISPS)- a) All dredgers (except dumb vessel DCI Dredge XVIII) of DCI hold valid International Ship Security Certificate (ISSC).

b) DCI Dredge VIII, DCI Dredge XI and DCI Multicat-1 ensure compliance with regard to Ship Security measures as defined in Annex 11 of the Notification for Indian Coastal Vessels.

Quality Management System (ISO 9001:2015)-

DCI is certified for Quality Management System (ISO 9001:2015) and the certificate is valid up to 24th February, 2025. The QMS surveillance audit is being carried out every year by IRQS as part of certification of the system.

Environmental Management System (ISO 14001:2015)-

DCI is certified for Environmental Management System (ISO 14001:2015) and the certificate is valid up to 12th March, 2025. The EMS surveillance audit is being carried out every year by IRQS as part of certificationof the system.

7. MEMBERS/ INVESTOR SERVICES

The shares of the Company are listed on Bombay Stock Exchange, National Stock Exchange and Calcutta Stock Exchange. The shares of the Company are dematerialised with both the depositories, NSDL and CDSL. M/s. Alankit Assignments Limited, Delhi is the R&T agent of the Company.

8. THE REQUIRED PARTICULARS ETC., PURSUANT TO SECTION 134 (3) OF THE COMPANIES ACT 2013 ARE AS UNDER:-

1. The extract of the Annual Return as provided under Sub-section (3) of Section 92 of the Companies Act, 2013 in Form No. MGT–9 is hosted on the website of the company http://www.dredge-india.com/ investors.html.

2. Number of meetings of the Board- During the financial year 2023–24, the Company held Nine Board Meetings. Further details are provided in the Corporate Governance Report. The Company has duly constituted the Audit Committee, Nomination and Remuneration Committee, Stakeholders

Relationship Committee and the details of the same including their constitution, no. of meetings and so forth are included in the Corporate Governance Report.

3. Directors' Responsibility Statement- Pursuant to the provisions of Section 134 (5) of the Companies Act, 2013 your Directors state that:

i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with a proper explanation relating to material departures.

ii) the Directors had selected relevant accounting policies, consistently applied them as well as made prudent judgements and estimates so as to give a fair view of the state of affairs, profit and loss of the company at the end of the financial year.

iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with legal regulations to safeguard the assets of the Company, preventing and detecting fraud and other irregularities;

iv) the Directors had prepared the annual accounts on a going concern basis;

v) the Directors had laid down internal financial controls to be followed by the Company which were adequate and operating effectively;

vi) the Directors had devised proper systems to ensure compliance with all applicable laws.

4. Details with respect to frauds reported by auditors under sub-section (12), section 143, other than those which are reportable to the Central Government: NIL.

5. The independent directors have submitted the required declaration under sub-section (6), Section 149 with regard to meeting the stated criteria for independence.

6. 6. The promoters have been continuing with the same remuneration norms as per the provisions in share purchase agreements. The Independent Directors are paid sitting fees of Rs. 20,000/- (Rupees Twenty Thousand Only) for attending each meeting of the Board or Committee and are not paid any other remuneration. The part-time official Directors are not paid any remuneration by the Company. The remuneration of the Managing Director is within the limits specified in Section 197/198 of the Companies Act and rules made thereunder. The Company has constituted Nomination and Remuneration Committee as per Section 178 consisting of three Independent Directors.

7. Explanations or comments by the Board on every qualification, reservation, adverse remark or disclaimer made.

Opinion-

We have audited the accompanying standalone IND AS financial statements of Dredging Corporation of India Limited, Visakhapatnam (‘the Company') which comprise the Balance Sheet as on March 31, 2024, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended and notes to the financial statements including the material accounting policy information and other explanatory information (hereinafter referred to as "the financial statements").

In our opinion and according to the explanations given to us, the aforesaid financial statements provide the information required by the Companies Act, 2013 ("the Act") and present a fair view in accordance with the Accounting Standards prescribed under section 133 of the Act read with the Companies ("Accounting Standards") rules, 2006, as amended ("Accounting Standards") and other accounting principles generally accepted in India, profit and loss statements, cash flows state of affairs of the Company as on March 31, 2024.

Basis for Opinion-

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143 (10) of the Companies Act, 2013. Our responsibilities under it are further described in the ‘Auditor's Responsibilities for the Audit of the Financial Statements' section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India, together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and rules thereunder. We have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Emphasis of Matter-

We draw attention to;

a) Note No.1 regarding no impairment required as the market value/value in use is more than the carrying amount of PPE as at the end of the reporting date

b) Note no.6 to the financial statements regarding amounts receivable from M/s Jawaharlal

Nehru Port Trust on account of a disputed recovery made by them.

c) Note No.30 Sub note No.11 to the financial statements regarding debtors and creditors balances respectively. The said balances are subject to confirmations and reconciliations.

d) Note No.30 Sub note no,12 in respect of restatement of comparative and previous periods on account of prior period items accounted during the current year.

Our opinion remains unchanged regarding the above matters.

Key Audit Matters-

Key audit matters are those matters that in our professional judgment were of most significant in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon. We do not provide a separate opinion on these matters. We have identified no key audit matters to communicate in our report.

Information other than the Financial Statements and Auditor's Report-

The Company's Board of Directors is responsible for other information. The other information comprises the information included in the Management Report and Chairman's Statement but does not include the financial statements and our auditor's report. The annual report is expected to be made available to us after the auditor's report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information or our knowledge obtained in the audit or otherwise is materially inconsistent with the financial statements. While reading the Annual Report, if we conclude that there is a material misstatement therein, we communicate the matter to those in-charge of governance to take necessary actions, as applicable under the relevant laws and regulations.

Responsibilities of Management and those in-charge of Governance for the Standalone Financial Statements-

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards (IND AS) specified under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for detecting and preventing frauds and other irregularities, selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and design, implement and maintain adequate internal financial controls, that were operating effectively for ensuring the accuracy and completion of the accounting records, relevant to the preparation and presentation of the financial statements. These present a fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors is responsible for assessing the Company's ability to continue disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements:

Our objective is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance offers a high level of certainty but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they influence the economic decisions of users taken on the basis of these financial statements.

As part of the audit in accordance with SAs, we exercise professional judgment and maintain scepticism throughout the audit. We also:

Identify and assess the material misstatement risks of the financial statements, due to fraud or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial control systems in place and the operating efficiency of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

Conclude on the appropriateness of the management's use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we identify the existence of a material uncertainty, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those in-charge with governance regarding the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control identified during our audit.

We also provide those in-charge with governance, a compiled statement with relevan ethical requirements regarding independence as well as to communicate with them all relationships and other matters that may bear on our independence and where applicable, related safeguards.

From the matters communicated with those in-charge with governance, we identify those matters that are most significant in the audit of the financial statements of the current period and are therefore, the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we decide that a matter should not be communicated in our report because the adverse consequences of doing so would outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor's Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we provide a statement in ‘Annexure A' on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations to the best of our knowledge and belief for the purposes of our audit.

(b) In our Opinion, proper books of accounts as required by law have been kept at the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards prescribed under Section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014.

(e) (e) On the basis of the written representations received from the Directors as on March 31, 2024, taken on record by the Board of Directors, none of the Directors is disqualified from being appointed as a Director in terms of Section 164(2) of the Act.

(f) (f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report n "Annexure B". i

(g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion, to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements – refer to Note no. 30 to the standalone financial statements.

(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company- refer to Note no. 7 to the standalone financial statements.

(iv) Based on our examination including test checks, the Company has used an accounting software for maintaining its books of account, featuring recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit, we did not come across any instance of audit trail feature being tampered with.

(v) (i) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds, share premium or any other sources or kind of funds) by the Company or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(ii) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(iii) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement.

(h) With respect to the other matters to be included in the Auditor's Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion, to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

3. As required under the directions and sub-directions issued by the Comptroller and Auditor General of India in terms of sub section 5 of Section 143 of the Companies Act, 2013 we herewith enclose our report in Annexure – C.

"Annexure A" to the Independent Auditors' Report:

(Referred to in Paragraph 1 of ‘Report on Other Legal and Regulatory Requirements' in our report of even date)

(A) The Company has maintained its fixed asset register in an editable Excel Format and has not complied with the necessary recording of full particulars, including quantitative details and situation of property, plant and equipment.

(B) The Company does not have any intangible assets, clauses (B) of paragraph 3 (i) of the order is considered inapplicable to the Company. The management has carried out a physical verification of all major assets (Dredgers) on a yearly basis. In our opinion, the periodicity of the physical verification is reasonable. No material discrepancies were noticed on such verification.

According to the information and explanations furnished to us and on the basis of our examination of the records of the Company and read together with Note No. 30, Sub- note No. 16 to the Financial Statements, the details of title deeds of immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company.

The Company had not revalued any of its property, plant and equipment (including right of use of assets) or intangible assets.

To the best of our knowledge and information, no proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

The Inventories on the Dredgers at branches have been physically verified by the management during the year. However, the coverage and procedure of verification by the management requires improvements like timely reconciliation, identification of non-moving and obsolete inventory. Subject to which, the discrepancies noticed upon verification, between physical stocks and book records were less than 10% in aggregate of each class of inventory.

The Company was sanctioned working capital limits in excess of 5 crore in aggregate by banks/financial institutions on the basis of security of current assets. The quarterly returns or statements filed by the Company with such banks/financial institutions are not in agreement with books of account of the Company to the extent as reported below read with Note No. 30, Sub-note 16 to the Financial Statements.

(iii) Since the Company had not made any investments/granted any loans and advances in loans, clauses (a) to (f) of paragraph 3 (iii) of the order are considered inapplicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act, with respect to the loans, investments, guarantees and security.

(v) The Company has not accepted any deposits or amounts which are deemed to be deposits to which provisions of Sections 73 to 76 and other relevant provisions of the Act and rules made thereunder are applicable.

(vi) According to the information and explanations given to us by the Central Government has not prescribed maintenance of cost records under section 148(1) of the Companies Act, 2013 in respect of the Company's nature of business.

(vii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, it is regular in depositing the undisputed statutory dues including Goods and Services Tax, Provident Fund, Employees' State Insurance, Income-Tax, Sales-Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess, and other statutory dues with the appropriate authorities, except for interest liability on GST ITC reversal to the tune of Rs. 2.06 crore which had been provided for the books.

(a) According to the information and explanations given to us, the following demands have not been deposited on account of disputes.

(viii) There were no transactions that were not recorded in the books of account that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).

(ix) (a) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of loans, other borrowings or interest to any lender.

(b) From the information furnished to us, the Company is not declared wilful defaulter by any bank or financial institution or other lender.

(c) Based on review of the records of the term loan drawn and utilisation thereof on an overall basis, the term loans have been applied for the purposes for which the loans were raised.

(d) According to the information and explanations given to us, the procedures performed by us and on an overall examination of the financial statements of the Company, we report that no funds raised on short term basis have been used for long-term purposes by the Company.

(e) The Company had not taken any fund from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures.

(f) During the year the Company had not raised any loans on the pledge of securities held in its subsidiaries, joint ventures or associate companies.

(x) (a) The Company had not raised any money by Initial Public Offer or further Public Offer (including Debt Instruments).

(b) According to the information and explanations given to us and based on our examination of the records of the Company, during the year the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible debentures) during the year.

(xi) (a) Based upon the audit procedures performed for the purpose of reporting true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud by the Company or on the Company has been noticed or reported during the year.

(b) The auditors have not filed any report with the Central Government under sub-section (12) of section 143 of the Companies Act, in form ADT -4, as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014.

(c) From a review of the Secretarial Records, we observe that the Company had not received any whistle blower complaints during the year.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, Paragraph 3 (xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, the transactions with related parties are in compliance with Section 177 and 188 of the Act, where applicable and details of such transactions have been disclosed in the Financial Statements as required by the applicable Accounting Standards.

(xiv) (a) The Company has appointed an external agency to carry out internal audit and their reports were made available to us. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(b) We have considered the reports of the Internal Auditors for the period under audit.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with Directors or persons connected with them.

(xvi) (a) According to the information and explanations given to us, the Company is not required to be registered under section 45–1A.

(b) Upon a review of the records of the Company, we are of the opinion that the Company had not conducted any non-banking financial or housing finance activity.

(c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India.

(d) The Company is not part of any group (as per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016 as amended).

(xvii) The Company has not incurred any cash loss in the current financial year but had incurred cash loss in immediately preceding financial year, amounting to Rs.4,524.81 lakh.

(xviii) During the year there were no resignation of statutory auditors.

(xix) According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that the Company is capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) (a) The Company does not have any unspent amount in respect of other ongoing projects as required under sub-section (5) of section 135 of the said Act.

(b) The Company does not have any unspent amount in respect of ongoing projects that require to be transferred to a special account in compliance with the provision of sub-section (6) of section 135.

(xxi) There are no reportable entities under these clauses, hence paragraph 3 (xx) of the order is considered inapplicable to the Company.

"Annexure - B" (Referred to in Paragraph 2(f) of ‘Report on Other Legal and Regulatory Requirements' in our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act").

We have audited the internal financial controls over financial reporting of Dredging Corporation of India Limited ("the Company") as of March 31, 2024 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1)Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and Directors of the Company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified in the control environment, entity's risk assessment process, control activities, information system and communication, monitoring of controls and the operating effectiveness of the Company's internal financial controls with reference to financial statements as on March 31,2024.

a) Internal control system for identification and valuation of non-moving and obsolete stock. Delays and omission in passing consumption entries and subsequent rectifications thereof for Inventory lying onboard the Dredgers.

b) System allows posting of consumption entries against inventory items which have inadequate/nil balances resulting in negative inventory closing balances.

c) Internal control system for customer acceptance, credit evaluation and establishing credit limits for sales, which could potentially result in the Company recognizing revenue without establishing reasonable certainty of ultimate collection.

d) The ERP system is not periodically tested.

e) Maintenance of details of assets like location, quantity and so on in editable excel format.

f) Periodical reconciliation of trade payable and receivable accounts with proper monitoring and clearing of pending items.

g) The IFC Control review and testing had been assigned to a consultant but had not been completed as on the conclusion of our audit.

A ‘material weakness' is a deficiency, or a combination of deficiencies, in internal financial controls with reference to financial statements 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.

In our opinion, to the best of our information and according to the explanations given to us, except as stated above, the Company's internal financial controls with reference to financial statements were operating effectively as of March 31,2024 based on the internal controls with reference to the financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of internal financial controls over financial reporting issued by the Institute of Chartered Accountants of India.

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 financial statements of the Company for the year ended March 31,2024 and these material weaknesses do not affect our opinion on the financial statements of the Company.

"Annexure-C" (Referred to in Paragraph 3 of ‘Report on Other Legal and Regulatory Requirements' in our report of even date)

Report on Directions issued by the Comptroller and Auditor General of India under section 143(5) of the Companies Act, 2013

9. INSURANCE

The Company has taken appropriate insurance for its assets against foreseeable perils.

10. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS

There are no significant and material orders passed by the regulators, courts or tribunals which could impact the going concern status and the Company's future operations.

OF MANAGERIAL PERSONNEL) RULES 2014.

Pursuant to provisions of Section 197 of the Companies Act, 2013, read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees along with the ratio of remuneration of each Director to the median employee and such other details form part of Directors' Report and is Annexed to this Report.

12. VENDOR DEVELOPMENT

This is a continuous process and DCI procures spares and stores on a regular basis from suppliers spread all over the world. DCI is updating the supplier-base continually. DCI has adopted e-procurement process, as per Govt. of India guidelines, emphasis was given to facilitate and enable the vendors by way of training support and hand holding support to participate in the e-procurement processes of the Company. DCI has organised a State Level Vendor Development programme in association with local Micro, Small and Medium Enterprises (MSME) Office (Visakhapatnam Branch) and has been continuously participating and interacting with prospective vendors in most of the vendor development programme cum buyers-sellers meet conducted by the Ministry of MSME/National Small Industries Corporation (NSIC). The Company has invited MSME vendors to visit DCI's vessels for identification of spares for indigenisation. Tenders are published in DCI official website and Central Public Procurement Portal for wider publicity so that MSMEs can participate. In view of the total annual procurement, a major portion is fuel, which cannot be procured from MSME vendors and further since most of the dredgers of DCI have been built at Netherlands and therefore most of the spare needs to be imported from OEMs abroad, the Company has represented for relaxation for implementation of the Public Procurement Policy mandatory provision of 20% procurement from MSMEs.

13. R&D ACTIVITIES

DCI Dredge Aquarius was fitted with an indigenously developed Programmable Logic Controller (PLC) in place of existing PLC system which was imported and caused frequent problems due to non-availability of spare parts/ services of the Original Equipment Manufacturer abroad. The newly installed PLC has been found to be cost effective and working satisfactorily.

14. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to the DPE Guidelines and SEBI (LODR) regulations, 2015, Management Discussion and Analysis Report, Corporate Governance Report and Certificate from the Company Secretary in practice regarding compliance of conditions of Corporate Governance are attached, forming part of this Report.

15. MAN POWER

The total number of employees (both on shore and floating) in the corporation, as on March 31, 2024 was as under-

16. INDUSTRIAL RELATIONS

The industrial relations in the Corporation continued to be cordial throughout the year under review.

17. EMPLOYMENT OF VARIOUS RESERVED CATEGORIES

The manpower position with regard to various reserved categories is as indicated hereunder:

A. Employment of SC/ST Candidates

The Corporation continued its efforts to fulfil its obligation to providing employment opportunities to SC/ST candidates, in accordance with the Government Policy. The overall representation of SC/STs in the Corporation (both shore and floating establishments, but excluding MPWs) as on March 31, 2024.

B. Employment of Ex-Servicemen

The representation of ex-servicemen (shore-based employees) in Group C' and D' categories in the Corporation was nil against the percentage of 14.5% and 24.5% respectively prescribed by the Government.

C. EMPLOYMENT OF PHYSICALLY CHALLENGED

The number of physically challenged employees in the Corporation as on March 31, 2024 is 02 (Two). The group-wise break-up A, B, C, D categories in Shore establishment, is as furnished hereunder-

B. B. The existing schemes and the policy on WOMEN employees in DCI-

The number of women employees Non-Executives on Rolls as on 31.03.2024 : Executives : 13

18. COMPLIANCE WITH GOVERNMENT'S POLICY ON WOMEN

Based on the Supreme Court's judgment and keeping in view the Government's regulations on sexual harassment of women at work places, a Complaints Committee headed by a woman officer was constituted to inquire into the complaints of sexual harassment at work places. A complaints register is also being maintained.

DCI is a Life Member of the Forum for Women in Public Sector and one woman representative from DCI has been nominated to the above forum. Apart from the trade unions, the problems, if any relating particularly to women employees are looked into as and when the same are brought to the notice of the management.

19. EXISTING BENEFITS AND WELFARE MEASURES FOR THE WOMEN EMPLOYEES a) The women employees of the Corporation, with less than two surviving children are entitled for 26 weeks of maternity leave.

b) Special casual leave not exceeding 14 working days is sanctioned to regular women employees of the Corporation to undergo non-puerperal sterilisation.

c) One special casual leave is allowed to the regular women employees of the Corporation who had ICUD insertions.

d) As per the Apex Court judgement and basing on the Government instructions, a Complaints Committee headed by a Woman Officer was constituted to inquire into the complaints of Sexual Harassment at work places. A Complaints Register is also being maintained.

e) Apart from the trade unions, the problems, if any, relating particularly to women employees are looked into as and when the same are brought to the notice of the management.

f) A recreation room has been provided exclusively for the women employees in the corporation.

g) Working uniforms are provided to Group ‘D' employees, as per the scales prescribed in the rules.

20. OTHER BENEFITS

Paternity leave of 15 days is allowed to a regular male employee having less than two children, during confinement of his wife, as per Leave Rules of the Corporation.

A. SHORE ESTABLISHMENT

i) Pay revision of Executive employees was implemented w.e.f. 01.01.2017.

ii) The wage revision of Non-Executive employees in the Shore Establishment was implemented w.e.f. 01.01.2017.

B. FLOATING ESTABLISHMENT

i) New Wage Agreements with respect to Officers was implemented w.e.f. 01.01.2024.

ii) New Wage Agreements with respect to Floating Petty Officers was implemented w.e.f. 01.01.2024.

iii) NewWageAgreementswithrespecttoFloating crew was implemented w.e.f. 01.01.2024.

22. HUMAN RESOURCES DEVELOPMENT

The Corporation is making sincere and concerted efforts for the overall development of Human Resources. During the year 2023–24, 56 Executives and 33 Non-Executive employees were imparted various training programmes.

23. IMPLEMENTATION OF THE RIGHT TO INFORMATION ACT, 2005

A Public Grievance Cell has been functioning in the Corporation since 1988 to look into the Grievances/ Complaints received from the Public. The Company Secretary is the Director of Public Grievances. As per the Ministry's guidelines, a status report is being submitted for the information of the Board of Directors at the Board meetings and a quarterly status report is being forwarded to the Ministry. In line with the Ministry's direction, a Public Grievance Redressal and Monitoring System (PGRAMS) software was installed in the computer network of the Corporation, which works in hand-shake mode between the Ministry and the Corporation.

24. ACTIVITIES OF PUBLIC GRIEVANCES AND COMPLAINTS CELL

A Public Grievance Cell has been functioning in the Corporation since 1988 to look into the grievances/ complaints received from the public. The Company Secretary is the Director of Public Grievances. As per the

Ministry's guidelines, a status report is being submitted for the information of the Board of Directors at the Board meetings and a quarterly status report is forwarded to the Ministry. In line with the Ministry's direction, a Public Grievance Redressal and Monitoring System (PGRAMS) software was installed in the Computer Network in the Corporation, which works in hand-shake mode between the Ministry and the Corporation.

25. 25. WELFARE MEASURES PROVIDED FOR THE EMPLOYEES AND THEIR FAMILY MEMBERS

The Corporation continued various welfare schemes viz., Family Pension Scheme, Gratuity Scheme, personal accident insurance coverage, Group Savings Linked Insurance Scheme, contributory Provident Fund, maternity leave, paternity leave, payment of ex-gratia to legal heirs/members of the family of deceased employees, canteen for project employees, medical attendance, , merit scholarships for the children of SC/ST employees, pension scheme and DCI, Retired Employees Medical Trust/Scheme, family carriage facility for fleet personnel among others.

26. INFORMATION & FACILITATION COUNTER

In order to ensure transparency in the functioning of the Corporation and also for easy and speedy access for any information to the public, an Information & Facilitation Counter (IFC) was setup at DCI Head Office, Visakhapatnam and the same is publicised in the web-site.

CITIZEN'S CHARTER

As per the directives of the Government of India, to focus on the commitment of DCI towards its citizens /clients with respect to standard of services, information, choice and consultation, non-discrimination and accessibility, grievance redressal, courtesy and value for money, includingexpectationsoftheorganisationfromthecitizen/ client for fulfilling the commitment of the organisation, a Citizens' Charter approved by the Competent Authority was posted on the Corporate website.

As part of requirement thereof, a Task Force has been constituted with representatives from the Management and Staff Unions, as well as from the Visakhapatnam Port Authority, a local clientele organisation. The Task Force attends to the duties as prescribed by the Department of Administrative Reforms and Public Grievances. The HOD (HR) is designated to be the Nodal Officer to coordinate and monitor the formulation and implementation of the Citizens Charter in DCI, who also functions as the Member Secretary of the Task Force.

27. ACTIVITIES AND ACHIEVEMENTS OF VIGILANCE DEPARTMENT

Vigilance Department is playing a proactive role for continuous simplification and improvements in systems and procedures as well as facilitating faster and effective decision making in a transparent manner.

1) The Vigilance Awareness Week (VAW) 2023

The Vigilance Awareness Week 2023 was observed at the Corporate Headquarters and at various Regional/Project offices of Dredging Corporation of India Ltd. from 30th October, 2023 to 5th November, 2023, under the auspices of Central Vigilance Commission (CVC) to spread awareness against corruption. CVC's theme for the year 2023 was ‘Say no to corruption; commit to the Nation' with emphasis on spreading awareness against corruption to all sections of society. In line with the letter and spirit of the theme and guidelines of CVC, several activities were organised, covering all sections of the society, with the aim of spreading awareness and sensitising the public about ways and means to fight corrupt practices.

During the VAW-2023, outreach activities were conducted at schools and colleges like essay writing, elocution and painting among others. We could achieve this with the help of support of the print media and social media, which gave wide publicity to our activities.

2) Preventive Vigilance

As a measure of preventive vigilance, 4 Periodic, 12 Surprise and 3 CTE type inspections have been taken up during the year. The lapses/irregularities noticed in this regard have been communicated for taking remedial/corrective actions.

3) Systemic Improvements undertaken

Various Systemic improvement measures were suggested by the Vigilance Department for implementation.

i) Proper accountability of inventory of spares and stacking them at designated locations.

ii) To exercise due diligence during tender evaluation process and amendment of "Settlement of Dispute clause" in tender document.

iii) It is suggested to digitise the available records immediately to avoid misplacements of files and for quick retrieval of data.

iv) Whenever there is rotation of employees or change of working sections, HODs shall ensure that they are rotated by following proper handing over and taking over reports.

v) HR department shall ensure verification of caste/qualification certificates/ character and antecedents/confidential reports in time.

vi) Tendering departments to ensure that the proposals are initiated well in advance complying the laid down guidelines of the corporation.

28. INFORMATION TECHNOLOGY, ERP & CYBER SECURITY

The Company has taken various initiatives for the benefit of stake holders. The major initiatives during FY 2023-2024 are given below.

(i) (i) The Company has implemented Microsoft Dynamics 365 Finance & Operation ERP for different departments in March, 2021. The new features in the ERP for productivity improvement, close monitoring and automation have been put into use. The business intelligence dash boards have been developed in the area of finance to provide various management reports.

(ii) The information system audit was carried to check availability of controls in ERP and the audit observations were liquidated.

(iii) The cyber security in the management plan for vessels is in place and drills were carried out regularly on different vessels to ensure readiness of complete team in case of cyber incidence.

29. STATUTORY AUDITORS

M/s. Rao & Kumar Co., chartered accountants, Visakhapatnam were appointed by the Comptroller and Auditor General of India as Statutory Auditors for auditing the accounts of the Company for the FY 2023–24. Pursuant to Section 142 (1) of the Companies Act, 2013 the remuneration of the Auditors has to be approved by the members at the AGM. In the previous AGM, the Audit Committee was authorised to fix the fees payable to the Statutory Auditors. It was recommended to authorise the Audit Committee for fixation of remuneration for statutory auditors for 2024–25.

30. INDEPENDENT AUDITORS' REPORT

The Independent Auditors' Report on the Accounts for 2023–24 given by the Statutory Auditors is placed along with the Accounts. Management Comments on matters of the Auditors have been given elsewhere in this report.

31. SECRETARIAL AUDIT REPORT

The report of the Secretarial Auditor – Mr. Sachin Agarwal of M/s. Agarwal S. & Associates, pursuant to Section 204 of the Companies Act, 2013 and rules made thereunder is placed after the Directors report. The comments/replies of the management on the observations of the Secretarial Auditor has been given elsewhere in this report.

32. C&AG COMMENTS

The Supplementary Audit for the accounts of the Company for the year ended March 31, 2024 by Comptroller and Auditor General of India is complete and is placed along with the accounts and replies of the management.

REPORT (BRSR)

The Business Responsibility Report for the year ended March 31, 2024 as required under the SEBI regulations is annexed to the Directors Report.

34. VOLUNTARY DELISTING FROM CALCUTTA STOCK EXCHANGE

As per the approval of the Board, the Company has applied for Voluntary Delisting of Shares from Calcutta Stock Exchange in June, 2020. As per the request of the Exchange, clarifications have been provided. Confirmation of the delisting is awaited.

35. DIRECTORS & KEY MANAGERIAL PERSONNEL

The Directors recommend approval of the Members above appointments/re-appointment of the Directors as proposed in the Notice to the AGM.

36. ACKNOWLEDGEMENTS

The Directors thank Hon'ble Minister, Hon'ble Minister of State of Ministry of Ports, Shipping and Waterways, its

Officers and staff for the valuable help, assistance and guidance rendered from time to time. The Directors thank all other Ministries for the help and co-operation extended by them. The Board is grateful to the Comptroller & Auditor General of India, the Member, Audit Board and the Statutory Auditors for their co-operation. The Board also thanks the Bankers of the Company for their valuable services. The Board expresses its gratitude to the valued customers for their continued patronage. The Directors place, on record, their appreciation of the services rendered by all the employees of the Corporation.