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Dredging Corporation of India Ltd.

BSE: 523618 Sector: Others
NSE: DREDGECORP ISIN Code: INE506A01018
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VOLUME 83381
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P/E 48.80
Mkt Cap.(Rs cr) 1,969
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Sell Qty 0.00
OPEN 711.00
CLOSE 707.80
VOLUME 83381
52-Week high 787.90
52-Week low 364.35
P/E 48.80
Mkt Cap.(Rs cr) 1,969
Buy Price 703.15
Buy Qty 734.00
Sell Price 0.00
Sell Qty 0.00

Dredging Corporation of India Ltd. (DREDGECORP) - Director Report

Company director report

FOR THE YEAR 2016-17

Your Directors have pleasure in presenting this 41st Annual Report togetherwith the audited accounts of the Company for the year ended 31st March 2017.

FINANCIAL RESULTS

The financial results of the Company have been prepared in accordance with IndianAccounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards)Rules 2015 (as amended). The Company adopted Ind AS from 1st April 2016 andaccordingly these financial results (including for all the periods presented inaccordance with Ind AS 101 - First-time Adoption of Indian Accounting Standards) have beenprepared in accordance with the recognition and measurement principles of Ind ASprescribed under Section 133 of the Companies Act 2013 read with the relevant rulesissued thereunder and the other accounting principles generally accepted in India.Pursuant to the adoption of the Ind AS the Accounting Policies have been revised as ontransition date and the effect of the same has been reflected in the results. The figuresfor the previous year have been recast as per the new Ind As adopted by the company.

The Profit after tax of the Company is Rs. 712.27 lakh for the year as compared to Rs.4350.18 lakh for the previous year. The Company's earning per share is Rs. 2.54 for2016-17 as compared to Rs. 15.54 for 2015-16.

The operational income of the Company is Rs. 58587.17 lakh as compared to Rs. 66585.89lakh for the previous year. The other income is Rs. 1381.78 lakh as compared to Rs.1532.21 lakh for the previous year. The total income for the year is Rs. 59968.95 lakh ascompared to Rs. 68118.10 lakh for the previous year.

The fall in income for this year is mainly due to the lower capacity utilization whichwas due to the reduction in scope at the Haldia project and stopping of the Goa projectwhich was not adequately compensated by other projects.

CAPACITY UTILISATION

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

Target Actual % Utilisation
No.of Days 3425 2273 66.36
Quantity (Mln. Cu.M) 719 519 72.18

CAPACITY ADDITIONS

The inland cutter suction dredger named as DCI GANGA has been inducted into the fleeton 6th December 2016. The vessel has been put into operation at the dredgingproject being carried out at Puducherry. This is the first of Inland fleet being inductedinto the fleet in recent times.

DCI FLEET

The Company has 12 Trailer Suction Hopper Dredgers (TSHDs) 4 Cutter Suction Dredgers(CSDs) one Back Hoe Dredger and one Inland Cutter Suction Dredger apart from otherancillary crafts.

DREDGING OPERATIONS

The Company has secured on tender basis the dredging contract at Haldia/ Kolkata Portfor five years from 1/1/2017. The Company has been performing the dredging at the port forthe past thirty years. The Company also caters to the maintenance dredging requirements ofother major ports/ India Navy etc. The Company is taking up capital dredging assignmentsdepending on the availability of the vessels and other logistic requirements.

During the year under review maintenance dredging contracts were executed for KolkataPort Cochin Port Trust Cochin Shipyard RGPPL-Dabhol and NST and its approaches of VPT.Capital Dredging Contracts were executed at Mormugao Port Chennai Port Andaman andNicobar island Puducherry Gogha and Dahej.

The above works were executed either under the existing contracts or renewal of thecontracts entered into with the Ports etc. during the previous years or new contractsentered into during the year.

MEMORANDUM OF UNDERSTANDING

The Company has signed Memorandum of Understanding (MOU) with Government of India forthe year 2016-17. The Company is expecting a rating of "Good" for 2016-17.

OFFER FOR SALE TO EMPLOYEES BY GOVERNMENT OF INDIA.

Government of India offered 0.25% of the paid up share capital i.e 70000 equity sharesto the eligible employees (employees on rolls as on 21/8/15) @ Rs. .362.90 per equityshare (which is 5% discount on the rate of Rs. 382 per equity shares offered for sale tothe public through stock exchange mechanism in August 2015. The Offer was open from 30thOctober 2016 till 15th November 2016. The total number of eligible employees who haveapplied and allotted (on 21/11/16) were 126 is 25687 shares. The amount collected was Rs.93.22 lakhs which was transferred to GOI. After the said offer to the employees theshareholding of GOI in DCI is now 73.47% (20572013 shares) as against the earlier holdingof 73.56% (20597700 shares).

SAFETY MANAGEMENT SYSTEM (ISM)

(a) All dredgers (except dumb vessels Dr - VII Dr. XVIII ID Ganga and Tug- VII) ofDCI hold valid Safety Management Certificates (SMC). (b) DCI holds a Document ofcompliance (DOC) valid till 24-06-2017. The same is being endorsed every year after annualverification audit by DG Shipping. The Renewal of DOC audit was held on 25/04/2017 at HOVisakhapatnam.

SHIP SECURITY SYSTEM (ISPS)

All dredgers (except dumb vessels Dr - VII Dr. XVIII ID Ganga and Tug- VII)of DCIhold valid International Ship Security Certificates (ISSC).

QUALITY MANAGEMENT SYSTEM (ISO 9001:2008)

DCI is certified for Quality Management System (ISO 9001:2008) and the certificate isvalid upto 14th September 2018. The QMS surveillance audit is being carried out everyyear by IRQS as part of certification of the system.

ENVIRONMENT MANAGEMENT SYSTEM (ISO 14001:2004)

DCI is certified for Environmental Management System (ISO 14001:2004) and thecertificate is valid till 14th September 2018. The EMS surveillance audit is being carriedout every year by IRQS as part of certification of the system.

MEMBERS/ INVESTOR SERVICES

The shares of the Company are listed on BSE Calcutta and National Stock Exchanges. Theshares of the Company are dematerialised with both the depositories NSDL and CDSL. Thetax free bonds are listed with the Stock Exchange Mumbai.

M/s. Karvy Computershare Private Limited Hyderabad are the R & T Agents of theCompany.

M/s CATALYST TRUSTEESHIP LIMITED (formerly GDA Trusteeship Ltd.) Pune is the Trusteefor the Tax free bonds issued in the year 2013-14.

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

a) The extract of the Annual Return as provided under Sub-section (3) of Section 92 ofthe Companies Act 2013 in form no. MGT – 9 is placed as Annexure – 1.

b) Number of meetings of the Board :- During the financial year 2016-17 the company hasheld six Board Meetings. Further details are provided in the Corporate Governance Report.

c) 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 hadbeen followed along with a proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit or loss of the company for that period;

(iii) the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and preventing and detecting fraud and other irregularities;

(iv) the Directors had prepared the Annual Accounts on a going concern basis; and

(v) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

(vi) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

d) The Directors of the Company are appointed by Government of India as per the normspertaining to qualifications etc. prescribed by Government of India. The whole timedirectors are paid remuneration as prescribed by Government of India from time to time.The Independent directors are paid only sitting fees of Rs. 10000/- for attending eachmeeting of the board or committee thereof and are not paid any other remuneration. ThePart-time official (Government) Directors are not paid any remuneration by the Company.The Key Management personnel are paid as per the norms fixed by the department of publicenterprises from time to time. The Company has constituted Nomination and Remunerationcommittee as per Section 178 consisting of two Independent Directors and One part-timeofficial Director.

e) Explanations or comments by the Board on every qualifications reservation oradverse remark or disclaimer made :

(A) THE INDEPENDENT AUDITORS IN THEIR REPORT FOR 2016-17 HAVE STATED AS UNDER:-EMPHASISOF MATTERS:

QUOTE

We draw attention to the following matters in the Notes to the financial statements.Our opinion is not qualified in respect of this matter.

a) Componentization: (Refer note No. 3 of the financial statements) As per note 4 ofSchedule II to the Companies Act 2013 -"Useful life specified in Part C of theSchedule is for whole of the asset. Where cost of a part of the asset is significant tototal cost of the asset and useful life of that part is different from the useful life ofthe remaining asset useful life of that significant part shall be determinedseparately." The above requirement is commonly known as ‘component accounting'.Companies are required to identify and depreciate significant components with differentuseful lives separately.

However management is of the view that no component is having more than 10% value oftotal cost of the dredger hence component accounting is not applicable.

b) Trade Receivables includes Rs. 11433.18 lakhs receivable from M/s SethusamudramCorporation Ltd.(SCL) which is pending for more than 4 years. Out of the above Companyhas provided for doubtful debts to the extent of Rs. 3019.27 lakhs. The company is of theview that this will be reimbursed by GOI (at whose behest the contract with SCL wasentered) to DCI to compensate the actual expenditure incurred on this project. In view ofthis a provision for doubtful debts is not made in respect of receivables in this regardamounting to Rs. 8413.91 lakhs.

c) The balances of sundry debtors creditors loans and advances other receivables andother payables being subject to confirmation and reconciliation resulting in the balancesas per books of account not verified by us.

UNQUOTE

Management reply to emphasis of matter:

The above emphasis of matters at Sl. (a) and (b) include the views of the managementon the same. With regard balance of sundry debtors etc. at Sl.No. (c) above it is statedthat confirmation for some of the amounts particularly with regard to sundry debtors duefrom various ports etc. for the works executed by DCI and/or bills raised for the sameare to be received.

(B) OBSERVATIONS/QUALIFICATIONS MADE BY THE SECRETARIAL AUDITOR:

QUOTE

"…. we certify that the Company has complied with the conditions of CorporateGovernance as stipulated in Regulations 17 to 27 46 (2) (b) to (i) and Para C D and E ofSchedule V of Chapter IV of SEBI (LODR) Regulations 2015 and DPE Guidelines on CorporateGovernance except:

Compliance of Regulation 17 (1) of Securities Exchange Board of India (ListingObligations & Disclosure Requirements) Regulations 2015 and Clause 3.1.4 of the DPEGuidelines on Corporate Governance for Central Public Sector Enterprises w.r.t.composition of the Board of Directors of the Company."

UNQUOTE

Management's reply

The Company is a Government of India Undertaking and as per the Articles of Associationof the Company the Directors are to be appointed by the President of India. The issue ofappointment of requisite number of independent directors has been taken up with theadministrative Ministry - Ministry of Shipping and the same is pending with them. f )particulars of loans guarantees or investment under Section 186 :- details of investmentgiven under the respective head in the financial statement. The Company has not given anyloans or guarantees. g) particulars of contracts or arrangements with related partiesreferred to in Section 188 (1) :- The Company has no contracts or arrangements withrelated parties referred to in Section 188 (1). In terms of Accounting Standard 18(Revised-2000) no disclosure is required in the financial statements of State controlledenterprise (An enterprise which is under the control of the Central Government and/orState Government) as regards related party relationships with other State controlledenterprises and transactions with such enterprises. The related party transactions of DCIfor the year 2016-17 are mainly with other State controlled enterprises. During the yearunder review the Company has not entered into financial or other transactions of materialnature with its Promoters the Directors and senior management that may have potentialconflict with the interests of the Company at large and/or which are not in normal courseof business. As such disclosure under Form AOC-2 of Companies (Accounts) Rules 2014 is"NIL". the state of the company's affairs :- This has been explained elsewherein this report.; h) the amounts if any which it proposes to carry to any reserves: Thefollowing amounts have been transferred to different reserves during the year:-

a) Tonnage Tax Reserve u/s 115VT uitilisation of the IT Act. - Rs. 72 Lakhs
b) Transfer to Debenture Redemption Reserve - Rs. 600 Lakhs

i) In view of the Commitments for servicing of the loans no dividend has beenrecommended for the year 2016-17. j) material changes and commitments if any affectingthe financial position of the company which have occurred between the end of the financialyear of the company to which the financial statements relate and the date of the report:Nil k) the conservation of energy technology absorption foreign exchange earnings andoutgo: i) Conservation of energy : The following measures have been taken:

All the dredgers in DCI fleet are installed with sophisticated and state-of-the artinstrumentation like Differential Global Positioning System (DGPS) and Draft Volume LoadMonitoring (DVLM) system to facilitate efficient dredging with potential energy saving.

While procuring new dredgers fuel efficient design with advanced technology isselected.

Continuous efforts are being made to optimise the fuel consumption on board dredgersas cost of fuel constitutes approximately 35-45% of operational cost. ii) Technologyabsorption: There was no transfer of technology and consequently there is no absorption oftechnology during the year.

iii) Foreign Exchange earnings and outgo: ( Rs. In Lakhs)
i. Foreign Exchange Earnings : 0.00
ii) Foreign Exchange outgo:
a) Import of components and spares (CIF value) 5386.13
b) Payment of interest on foreign currency loan 1324.68
c) Repayment of installment of foreign currency loan 12516.15
d) Foreign travel 7.47
Total 19216.43

l) a statement indicating development and implementation of a risk management policyfor the company including identification therein of elements of risk if any which in theopinion of the Board may threaten the existence of the company: The Company has in place aRisk Management Policy to drive a common integrated view of risks optimal risk mitigationresponses and efficient management of internal control and assurance activities. The RiskManagement Committee has been constituted. The threats risk and concerns are discussed inthe Management Discussion and Analysis Report.

m) the details about the policy developed and implemented by the company on corporatesocial responsibility initiatives taken during the year: The Company has in place aCorporate Social Responsibility Committee and a Corporate Social Responsibility andsustainability Policy. During the year 2016-17 the amount spent under CSR is Rs. 177.62Lakhs. The particulars of the CSR activities in the prescribed format as required underthe Companies Act are given in Annexure –II.

n) a statement indicating the manner in which formal annual evaluation has been made bythe Board of its own performance and that of its committees and individual directors; TheBoard of Directors of the Company are appointed by Government of India. The administrativeMinistry – Ministry of Shipping reviews the performance of the Company on regularbasis. The performance reports of the whole time directors are reviewed by the Ministry onAnnual basis.

DISCLOSURE AS PER SECTION 197 OF THE COMPANIES ACT AND THE REQUIREMENTS OF COMPANIES(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014.

As per Notification No. GSR 463(E) dated 5/6/2015 issued by 5th June 2015issued by the Ministry of Corporate Affairs Government Companies are exempted fromcomplying with provisions of Section 197 of the Companies Act 2013. Therefore suchparticulars have not been included as part of Directors' Report.

VENDOR DEVELOPMENT

This is a continuous process and DCI procures spares and stores on a regular basis fromsuppliers spread all over the world. DCI is updating the supplier-base continually. DCIhas adopted e-procurement process as per Govt. of India guidelines emphasis was given tofacilitate and enable the vendors by way of training support and hand holding support toparticipate in the e-procurement processes of the company.

R & D ACTIVITIES

Action is on hand to float the tender for design manufacture supply installationtesting & commissioning of the fuel monitoring system to our vessels.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to the DPE Guidelines and SEBI (LoDR) Regulations 2015 Management Discussionand Analysis Report Corporate Governance Report and Certificate from the CompanySecretary in practice regarding compliance of conditions of Corporate Governance areattached forming part of this Report.

MAN POWER:

The total number of employees (both Shore and Floating) in the Corporation as on 31stMarch 2017 was 503 as against 523 during the previous year excluding MPWs ContractOfficers and Crew.

EMPLOYMENT OF VARIOUS RESERVED CATEGORIES:

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

A. Employment of SC/ST Candidates

The Corporation continued its efforts to fulfill its obligation in providing employmentopportunities to SC/ST candidates in accordance with the Government Policy. The overallrepresentation of SC/STs in the Corporation (both Shore and Floating Establishments butexcluding MPWs) as on 31st March 2017 was SCs - 83 i.e. 32.13% as againstprescribed percentage of 16.66% and STs 26 i.e. 9.39% as against the prescribedpercentage of 7.5%.

B. Employment of Ex-Servicemen

The representation of Ex-Servicemen (both Shore and Floating) in group C and Dcategories in the Corporation was 1.17% and Nil as against the percentage of 10% and 20%respectively as prescribed by the Government.

C. Employment of Physically Handicapped

The number of physically handicapped employees in the Corporation as on 31stMarch 2017 is 9 (Nine) the group-wise break-up A B C & D is as furnishedhereunder:-

Group Total Strength No. of persons with disabilities actually Employed Percentage with reference to identified posts
A 189 05 2.65
B 44 01 2.27
C 78 02 2.56
D 14 1 7.14
Total 325 09 2.77

The Physically handicapped persons are being paid additional conveyance assistance asper the Government instructions.

D. Employment of women

The number of women employees on Rolls as on 31st March 2017 is 49 asagainst 52 as on 31st March 2016. Out of them number of executives is 18 andNon-Executives is 31.

Compliance with Government's Policy on Women:

Basing on the Supreme Court's judgement and keeping in view the Government instructionson sexual harassment of women at work places a complaints Committee headed by a womanofficer was constituted to inquire into the complaints of sexual harassment at workplaces. A complaints register is also being maintained.

DCI is a Life Member of the Forum for Women in Public Sector and one womenrepresentative from DCI has been nominated to the above forum. Apart from the TradeUnions the problems if any relating particularly to women employees are looked into asand when the same are brought to the notice of the Management.

EXISTING BENEFITS AND WELFARE MEASURES FOR THE WOMEN EMPLOYEES :

i) The women employees in the Corporation are entitled to 180 days of Maternity Leave.

ii) Special Casual leave not exceeding 14 working days is sanctioned to regular womenemployees of the Corporation to undergo non-puerperal sterilisation.

iii) One day special casual leave is allowed to the regular women employees of theCorporation who had ICUD insertions.

iv) Basing on Apex Court's judgement and keeping in view the Government instructions onSexual harassment of Women at work places a Compliants Committee headed by a WomanOfficer was constituted to inquire into the complaints of Sexual Harassment at workplaces. A Compliants Register is also being maintained.

v) As a welfare measure a Rest Room/Recreation Room is provided exclusively for thewomen employees.

vi) Working uniforms are provided to Group'D' women employees as per the scalesprescribed in the Rules.

vii) A Recreation Room has been provided exclusively for the women employees in theCorporation.

viii) The women employees of DCI are sponsored to various in-house and also externaltraining programmes. Eight women employees had undergone training during the year 2016-17.

ix) Women's Day was celebrated on 08.03.2017 in DCI.

OTHER BENEFITS:

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

To observe small family norms the following benefits are also given :

- Cash Award of Rs. 120/-; and

- One special increment/allowance in the form of personal pay throughout the service.

WAGE SETTLEMENTS

A. FLOATING ESTABLISHMENT :

i) The INSA-MUI (FG/HT) Agreement in respect of Floating Officers is due from 1/4/15.

ii) The NMB Agreement relating to HT Petty Officers is implemented for the period2015-19.

iii) The Wage Agreement of Crew/MPWs is implemented for the period 2015-19.

B. SHORE ESTABLISHMENT:

The Revised Pay Scales for both Executives and non executives is due from 01.01.2017.

INDUSTRIAL RELATIONS:

The industrial relations in the Corporation continued to be cordial throughout the year2016-17. The Unions representing the Non-Executives and Crew & Petty Officer ofDredging Corporation of India Limited were on one day strike on 11/4/17 in protest againstrumors of strategic sale of DCI. However there was no disruption of any nature on the dayto day working of the Company. Further there was no impact of the Strike on theoperations of the DCI vessels and all the operational vessels are in uninterrupteddredging operations. There were no untoward incidents/disruption in any of the offices ofthe Company or onboard vessels.

WELFARE MEASURES:

The Corporation continued various welfare schemes viz. Family Pension Scheme GroupGratuity Assurance Scheme Personal Accident Insurance Coverage Group Savings LinkedInsurance Scheme Contributory Provident Fund Maternity Benefit Scheme SubsidisedCanteen Facility Transport Subsidy Medical Attendance Leave Travel ConcessionIncentive Scheme for acquiring higher qualifications Merit Scholarships for the childrenof SC/ST employees and Mediclaim medical attendance facility for the retired employeesetc. Other welfare measures such as House Building Advance Special casual leave formaternity/paternity and incentives for adopting small family norms and advances forchildren's higher education marriage and purchase of computer etc. are extended to theemployees.

HUMAN RESOURCES DEVELOPMENT

The Corporation is making sincere and concerted efforts for the overall development ofHuman Resources.

i) During the year 2016-17 311 employees were trained in various training programs.

ii) During the year 2016-17 15 DCCP Apprentice Trainees and 9 Industrial Trainees wereinducted for training for a period of 12 months.

IMPLEMENTATION OF THE RIGHT TO INFORMATION ACT 2005

As per the Directives of the Government of India the Corporation implemented the Rightto Information Act 2005 w.e.f. 12.10.2005 and made all required infrastructuralarrangements such as appointment of Public Information Officers Asst. Public InformationOfficers and Appellate Authority; set-up of procedure and submission of periodical reportson the progress of implementation of the Act. A register is maintained for monitoring therequests from public seeking information and the replies by the concerned are also beingco-ordinated. Required periodical reports on the implementation of RTI/ Status of RTIreplies are being furnished to the Ministry CIC from time to time.

ACTIVITIES OF PUBLIC GRIEVANCES AND COMPLAINTS CELL :

A Public Grievance Cell has been functioning in the Corporation since 1988 to look intothe Grievances/Complaints received from the Public. The Joint General Manager (HSE) isdesignated as the Director of Public Grievances. As per the Ministry's guidelines astatus report is being submitted for the information of the Board of Directors at theBoard meetings and a quarterly status report is forwarded to the Ministry. In line withthe Ministry's direction a Public Grievance Redressal and Monitoring System (PGRAMS)software was installed in the Computer Network in the Corporation which works inhand-shake mode between the Ministry and the Corporation. Complaints received during theyear were suitably replied to.

INFORMATION & FACILITATION COUNTER

In order to ensure transparency in the functioning of the Corporation and also for easyand speedy access for any information to the public an INFORMATION & FACILITATIONCOUNTER (IFC) was set up at DCI Head Office Visakhapatnam and the same is notified in theweb-site also.

PROGRESSIVE USE OF HINDI

The Corporation continued its efforts to implement the Official Language Policy of theGovernment an Incentive Scheme to award cash prizes etc. is in vogue in the Corporationand employees trained under in-service training in Hindi and qualified in variousexaminations conducted thereunder are being awarded cash awards.

Hindi Fortnight was celebrated during September 2016. Various Competitions wereconducted for employees and nearby school/College students during the Hindi FortnightCelebration held from 06-21 September 2016. DCI participated in the Hindi Salakar Samitimeeting of the Ministry held on 08.03.2017. The officers of the Corporation activelyparticipated in the meetings and activities of the Town Official Language ImplementationCommittee (TOLIC) Visakhapatnam during the year. Two Employees of the Corporation (HindiCell) attended one National Seminar and one International Hindi Seminar held atVisakhapatnam during the year. 3 Hindi workshops were conducted for employees to impartworking skills in drafting & noting in Hindi and in UNICODE Hindi Typing operationof Bilingual softwares etc.. Viswa Hindi Diwas was celebrated and a Lecture session on"The Global perspectives of Hindi" was conducted on 10.01.2017.

Computerization of forms / correspondence and reports in Hindi was implemented invarious departments. Several formats PF Statements letter-heads visiting cards bannersand other items of stationery are printed / made bilingual and the same are made availableon the computers. Web-site information was also updated in Hindi. Unicode was installed invarious functional Departments. Issue of Office Orders / Circulars Reports submitted toGovernment and Parliamentary Committees and Annual Report of the Corporation were ensuredin bilingual.

CITIZEN'S CHARTER

As per the directives of the Government of India to focus on the committment of DCItowards its citizens / clients in respect of standard of services information choice andconsultation non-discrimination and accessibility grievance redress courtesy and valuefor money including expectations of the Organisation from the citizen/client forfulfilling the committment of the Organisation a Citizens' Charter approved by theCompetent Authority was posted on the Corporate website.

As part of requirement thereof a Task Force has been constituted with representativesfrom the Management and Staff Unions as well as from the Visakhapatnam Port Trust alocal clientele organisation. The Task force attends to the duties as prescribed by theDepartment of Administrative Reforms and Public Grievances. The HoD(HR) is designated tobe the Nodal Officer to coordinate and monitor the formulation and implementation of theCitizens Charter in DCI who also functions as the Member Secretary of the Task Force.

CHANGES IN ACCOUNTING POLICY

Pursuant to the adoption of the Ind AS the Accounting Policies have been revised as ontransition date and the effect of the same has been reflected in the results. The figuresfor the previous year have been recast as per the new Ind AS adopted by the company.

ACTIVITIES OF VIGILANCE DEPARTMENT

During the year 2016-17 the Vigilance department has taken significant measures tointegrate its activities with other departments of the Corporation and provide apro-active orientation to interface it with managerial process. As a part of the sameperiodic surprise and CTE type inspections have been carried out and systemicdeficiencies and irregularities noticed have been communicated to concerned departmentsfor necessary action.

Vigilance Department is playing a proactive role for continuous simplification andimprovements in systems and procedures and facilitating faster and effective decisionmaking in a transparent manner.

Vigilance Awareness week was observed during 31st October 2016 to 5thNovember 2016. CVC's theme for this year's Vigilance Awareness Week is "Publicparticipation in promoting integrity and eradicating corruption" with emphasis onspreading awareness in fight against corruption to all sections of Society. PaintingCompetition was organised for the school students in various urban corporate/privateschools urban Govt. /Aided schools in Visakhapatnam. In addition to thisinter-collegiate Essay writing and Elocution competitions in English and Telugu wereconducted at Head Office. A customer redressed camp for customers/vendors/contractors wasorganized on 01.11.2016. A panel discussion on the topic "Public participation inpromoting integrity and eradicating corruption" was held on 02.11.2016 . A workshopon "Role of RTI in Public Participation in promoting integrity and eradicatingcorruption" was also conducted for general public during the week.

STATUTORY AUDITORS

M/s Tukaram & Co. Chartered Accountants Hyderabad were appointed by theComptroller and Auditor General of India as Statutory Auditors for auditing the accountsof the Company for the financial year 2016-17. Pursuant to Section 142 (1) of theCompanies Act 2013 the remuneration of the Auditors has to be approved by the Members atthe AGM. The Board recommends the remuneration of Rs. 4.25 lakhs plus service taxas applicable for the year 2016-17 for approval of the Members at this AGM.

INDEPENDENT AUDITORS' REPORT

The Independent Auditors' Report on the Accounts for 2016-17 given by the StatutoryAuditors is placed along with the Accounts. Management Comments to the Emphasis of mattersof the Auditors have been given elsewhere in this report.

SECRETARIAL AUDIT REPORT

The report of the Secretarial Auditor – M/s. Agarwal & Associates pursuant toSection 204 of the Companies Act 2013 and rules made thereunder is placed after theDirectors report. The comments/replies of the management of the qualification of theSecretarial Auditor has been given elsewhere in this report.

C&AG COMMENTS

The Comptroller and Auditor General of India has issued "NIL" Comments on theAccounts of the Company for the year ended 31st March 2017 and the same areplaced next to the Statutory Auditor's Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

As per the Articles of Association of the Company all the Directors are appointed bythe President of India as communicated through the administrative Ministry - Ministry ofShipping.

Shri B. Poiyaamozhi ceased to be director of the Company on 31/08/2016 on attainingsuperannuation.

Ministry of Shipping vide its letter dated 22/09/2016 communicated appointment of ShriSanjeev Ranjan as part time official Director on the Board of the Company. Ministry ofShipping vide its letter dated 03/03/2017 communicated appointment of Shri Pravir Krishnas part time official Director on the Board of the Company in place of Shri Barun Mitra.Shri Pravir Krishn has been appointed by the Board as additional director. Ministry ofShipping appointed Dr.Pradeep Kumar in place of Mr Sanjeev Ranjan vide letter date29/5/17. Dr.Pradeep Kumar has been appointed by the Board as additional director. Ministryof Shipping has informed the cessation of directorship of Shri Pravir Krishn abd ShriPradeep Kumar from the Board of DCI with effect from 25/07/2017 and 27/07/2017respectively.

It is also proposed to retire and re-appoint Shri Rajesh Tripathi and Shri M S Rao inthis meeting pursuant to Section 152 of the Companies Act.

The directors recommend for approval of the Members the aboveappointments/re-appointment.

ACKNOWLEDGEMENTS

The Directors thank Hon'ble Minister of Shipping and officers and staff of Ministry ofShipping for the valuable help assistance and guidance rendered from time to time. TheDirectors thank all other Ministries for the help and co-operation extended by them. TheBoard is grateful to the Comptroller & Auditor General of India the Member AuditBoard and the Statutory Auditors for their co-operation. The Board also thanks the Bankersof the Company for their valuable services. The Board expresses its gratitude to thevalued customers for their continued patronage. The Board expresses its sincere thanks tothe Tax authorities for their co-operation. the Board also expresses its sincere thanks tothe suppliers and vendors for their support and co-operation.

The Directors place on record their appreciation of the services rendered by all theemployees of the Corporation.

For and on behalf of the Board of Directors
Place : Visakhapatnam RAJESH TRIPATHI
Date : 31/07/2017 CHAIRMAN AND MANAGING DIRECTOR