DCI-APPLICATION FORM-RESIDENT.pmd - Finapolis

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IN THE NATURE OF FORM2A - MEMORANDUM CONTAINING SALIENT FEATURES OF THE PROSPECTUS LEGAL AND OTHER INFORMATION REGULATIONS AND POLICIES The GoI has over the years formulated various guidelines and regulations for the administrative functioning of PSUs and policies for the development of the Indian dredging industry. The MoS encompasses within its fold shipping and ports sectors which include shipbuilding and ship-repair, major ports, national waterways, and inland water transport. The MoS has been entrusted with the responsibility of formulating policies and programmes on these subjects and their implementation. We are a public sector undertaking under the aegis of the MoS. Dredging Policy Guidelines The current MoS guidelines of 2007 have been periodically extended and the latest extension is effective from November 10, 2010 till such time that a revised policy is issued. The Environment Protection Act, 1996, the Water (Prevention and Control of Pollution) Act 1974 and the Air (Prevention and Control of Pollution) Act, 1981 require new development projects to obtain prior permission from the Ministry of Environment and Forests, GoI and also for companies to obtain consents from local state pollution control boards prior to making emissions and /or discharging effluents into the environment or carrying out development related activities in ecologically sensitive areas identified as coastal regulatory zones. For further details please refer to page 161 of Prospectus. PENDING PROCEEDINGS AND STATUTORY DEFAULTS Except as described below, there are no outstanding litigations, suits or criminal or civil prosecutions, arbitration proceedings or tax liabilities against us, that would have a material adverse effect on our business and there are no defaults, non-payment or overdue of statutory dues, institutional/bank dues as of the date of the Prospectus. No criminal prosecution has been launched against our Directors for alleged offences under the enactments specified in Part I of Schedule XIII to the Companies Act. Further, neither our Company nor persons in control of our Company have been restrained, prohibited or debarred by SEBI from accessing the securities market or dealing in securities and no such order or direction is in force. Details of the legal proceedings involving the Company disclosed as follows have been restricted to those claims wherein the amount involved is more than 1 % (one percent) of the networth of our Company that is ` 139.12 million or higher as at December 31, 2012. Provided below in a consolidated manner are all significant proceedings within the materiality threshold as aforementioned. For further details please refer to page 154 of Prospectus MATERIAL DEVELOPMENTS Save as disclosed hereinafter, there have been no material developments since March 31, 2012 which effect the operations, or financial condition of our Company: Dredge XIX, TSHD was delivered to our Company on November, 2012 at Holland and was dedicated to our Country on December 22, 2012. OTHER REGULATORY AND STATUTORY DISCLOSURES Authority for the Issue At the meeting of the Board of Directors of our Company, held on November 10, 2012, the Directors approved the issue of Bonds to the public upto an amount not exceeding ` 5,000 million in one or more tranches. This Issue is being made pursuant to the above mentioned resolution passed by the Board of Directors of our Company. As per the terms of the CBDT Notification, the aggregate volume of the issue of Bonds (having benefits under Section 10(15)(iv)(h) of the Income Tax Act) by our Company during the Fiscal 2013 shall not exceed ` 50,000 lakhs. Prohibition by SEBI Our Company and/or our Promoter have not been restrained, prohibited or debarred by SEBI from accessing the securities market or dealing in securities and no such order or direction is in force. Disclaimer Clause of the BSE BSE Limited (“the Exchange”) has given vide its letter dated March 4, 2013, permission to this Company to use the Exchange’s name in this offer document as one of the stock exchanges on which this company’s securities are proposed to be listed. The Exchange has scrutinuzed this offer document for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. The Exchange does not in any manner: a) warrant, certify or endorse the correctness or completeness of any of the contents of this offer document; or b) warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or c) take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project of this Company; and it should not for any reason be deemed or construed that this offer document has been cleared or approved by the Exchange. Every person who desires to apply for of otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever. Listing An application will be made to the BSE for permission to deal in and for an official quotation of our Bonds. BSE has been appointed as the Designated Stock Exchange. If permissions to deal in and for an official quotation of our Bonds are not granted by BSE, our Company will forthwith repay, without interest, all moneys received from the applicants in pursuance of the Prospectus. Consents Consents in writing of: (a) the Directors; (b) our Company Secretary and Compliance Officer; (c) Bankers to our Company; 36 DREDGING CORPORATION OF INDIA LIMITED
IN THE NATURE OF FORM2A - MEMORANDUM CONTAINING SALIENT FEATURES OF THE PROSPECTUS (d) Bankers to the Issue and Refund Banker*; (e) Lead Managers; (f) the Registrar to the Issue; (g) Lead Brokers to the Issue; (h) Tax Expert (i) Legal Advisors to the Issue; (j) Credit Rating Agencies; and (k) the Debenture Trustee to act in their respective capacities, have been obtained and the same will be filed along with a copy of the Prospectus with the ROC. * will be obtained at the time of filing of the Prospectus with the RoC. The consents of the Statutory Auditor of our Company, namely M/s. G.R. Kumar and Co. for inclusion of (a) their name as the Statutory Auditor, (b) examination report on Summary Financial Information of our Company in the form and context in which they appear in the Prospectus, have been obtained and the same will be filed along with a copy of the Prospectus with the Designated Stock Exchange. Expert Opinion Except the letters dated February 19, 2013 issued by Brickwork and January 7, 2013 and February 23, 2013 issued by CARE, in respect of the credit rating of the Issue, and the audit report dated March 2, 2013 and statement of tax benefits dated March 2, 2013 issued by G. R. Kumar & Co., Statutory Auditors of our Company, our Company has not obtained any expert opinions. Minimum Subscription In terms of the SEBI Debt Regulations, an issuer undertaking a public issue of debt securities may disclose the minimum amount of subscription that it proposes to raise through the issue in the offer document. The Company has decided not to stipulate any minimum subscription for this Issue. Filing of the Draft Prospectus and the Prospectus The Draft Prospectus has been filed with BSE in terms of Regulation 7 of the Debt Regulations for dissemination on their website and a copy of the Prospectus will be filed with the RoC, in accordance with Sections 56 and 60 of the Companies Act. Debenture Redemption Reserve Section 117C of the Act states that any company that intends to issue debentures must create a DRR to which adequate amounts shall be credited out of the profits of the company until the redemption of the debentures. The Ministry of Corporate Affairs has, through its circular dated April 18, 2002, (“Circular”), specified that the quantum of DRR to be created before the redemption liability actually arises in normal circumstances should be ‘adequate’ to pay the value of the debentures plus accrued interest, (if not already paid), till the debentures are redeemed and cancelled. Pursuant to circular dated February 11, 2013 vide circular reference no. 04/2013 issued by the Ministry of Corporate Affairs, the adequacy of DRR shall be 25% of the value of debentures issued pursuant to the Issue. The amounts credited to DRR shall not be utilized by the company except for the redemption of the Bonds. Underwriting The Issue will not be underwritten. Stock Market Data Our Company’s Equity Shares are currently listed on the NSE, BSE, DSE and the CSE. Dividend Details of the dividend declared and payable by our Company to the shareholders in the last ten Fiscals are as mentioned below: Fiscal Year Face Value Paid Up Dividend Dividend per Equity Capital (` rate Amount share ` Millions) in Per share (` Millions) 2011-12 10 280 Nil Nil 2010-11 10 280 Nil Nil 2009-10 10 280 30% 84 2008-09 10 280 50% 140 2007-08 10 280 150% 420 (including 75% interim Dividend) 2006-07 10 280 150% 420 (including 60% interim Dividend) 2005-06 10 280 150% 420 (including 60% interim Dividend) 2004-05 10 280 120% 336 (including 40% interim Dividend) 2003-04 10 280 120% 336 2002-03 10 280 100% 280 The amounts paid as dividend in the past are not indicative of our dividend policy. Revaluation of assets Our Company has not revalued its assets in the last five years. Changes in our Statutory Auditors during the last three years Name of the Date of Appointment/ Auditor since Remarks Auditors and Address Resignation G.R.Kumar & Co. Appointed vide letter from Office of 2011 - 2012 Nil Chartered Accountants Comptroller and Auditor General of 9 Merrylife, Doctors’ India No. CA / V / Coy / Central Colony , Peda Waltair Government, Dredco (1) / 83 dated Visakhapatnam - 530 017 July 27, 2012 for the year 2012-13 Andhra Pradesh, India Appointed vide letter from Office of Comptroller and Auditor General of India No. CA / V / COY / Central Government, Dredco (1) / 87 dated August 18, 2011 for the year 2011-12. Rao & Narayan Appointed vide letter from Office of 2008 - 2009 to Nil Chartered Accountants Comptroller and Auditor General of 2010 -2011 Srinivasa Apartments India No. CA / V / COY / Central Flat No. 6 Raj Bhavan Road Government, Dredco (1) / 28 dated Somajiguda July 12, 2010 for the year 2010-11 Hyderabad – 500082 Andhra Pradesh, India Appointed vide letter from Office of Comptroller and Auditor General of India No. CA / V / COY / Central Government, Dredco (1) / 17 DT August 12, 2009 for the year 2009-10 Appointed vide letter from Office of Comptroller and Auditor General of India No. CA / V / COY / Central Government, Dredco (1) dated July 31, 2008 for the year 2008-09 DREDGING CORPORATION OF INDIA LIMITED 37
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DCI-APPLICATION FORM-RESIDENT.pmd - Finapolis

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