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NOTES TO ACCOUNTS

Container Corporation of India Ltd.

You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (₹) 32137.23 Cr. P/BV 3.11 Book Value (₹) 169.54
52 Week High/Low (₹) 564/434 FV/ML 5/1 P/E(X) 26.24
Bookclosure 05/02/2019 EPS (₹) 20.10 Div Yield (%) 1.30
Year End :2018-03 

1.1 Significant intangible assets

A primary component of CONCOR’s overall business strategy has been the development of an advanced information system. CONCOR is using various online applications like Export/Import Terminal Management System (ETMS), Domestic Terminal Management System (DTMS), Oracle Financials-ERP.CCLS (Container and Cargo Logistic System) for electronic filing of commercial documents and others, which are based on Centralized architecture deployed through Citrix environment and running over VSAT based hybrid network.

The carrying amount of significant softwares material for the operations of the company is Rs.4.30 crore (as at March 31, 2017: Rs.2.34 crore ) will be fully amortized in 5 years as tabulated below:

2.1 Credit risk management

Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Company. At the inception of a service contract, the Company collects the expected dues in advance. The balance of trade receivables represents the additional amounts charged to the customers over and above the amount already collected towards the expected dues in advance. For the recovery of balance contractual payments, the Company has a legal right to auction the material of the customers and recover the dues in terms of the provsions contained in Customs Act, 1962. Thus the Company has limited exposure to credit risk.

2.2 Credit risk concentration

The concentration of credit risk is limited due to the fact that the customer base is large and unrelated. Customers represent more than 5% of the total balance of trade receivables comprise of the following: Particulars

1. M/s Western Carrriers Pvt Ltd.

2. M/s TCI CONCOR Multimodal Solutions Pvt. Ltd.

3 M/s Ultra Tech Cement Ltd

4. M/s Continental Warehousing Corporation Navashava Ltd.

2.3 Allowance for expected credit loss

The Company has used a practical expedient by way for computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. The provision matrix at the end of the reporting period is as follows.

Unclaimed dividend accounts

If the dividend has not been paid or claimed within 30 days from the date of its declaration,the company is required to transfer the total amount of the dividend which remain unpaid or unclaimed, to a special account to be opened by the company in a scheduled bank to be called “Unpaid Dividend Account”. The unclaimed dividend lying with company is required to be transferred to the Investor Education and Protection Fund (IEPF), administered by the Central Government after a period of seven years from the date of transfer of such amount to unpaid dividend account

An amount of Rs.1,44,078(As at March 31,2017: Rs.2,68,078) has been deposited timely in the Investor Education & Protection Fund.

Bank balances held as margin money or as security against:

‘Guarantees

Out of this, Guarantee of Rs.6.00 crore is given for setting up of common infrastructure projects (Refrigerated Park facility at ICD-Dadri)

“Letter of credit

Letter of credit is given for the payment to be made against Model concession agreement for TMS (Terminal Management System) with Northern Railways.

3.1 Registration fees paid for running of container trains is amortized in twenty (20) years so as to correspond with the validity period of licence under the respective agreements.

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer. As the general reserve Is created by a transfer from one component of equity to another and Is not an item of other comprehensive income, Items included In the general reserve will not be reclassified subsequently to profit or loss.

The Company has paid an interim dividend of Rs.9.60/- on per equity share of Rs.10/- each (2016-17: Rs.9.60) and proposed final dividend of ‘i7.50/-on per equity share of Rs.10/-each .(2016-17: Rs.7.50) for the year.

The Company pays its vendors immediately when the invoice is accounted and no interest during the year has been paid or is payable.(Refer Note no. 47 for disclosure made under terms of the Micro, Small and Medium Enterprises Development Act, 2006).

The Company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

Railway Board vide Letter No.2017/PL/52/4 dated 24.11.2017 has issued Presidential Directives under Article - 71 of Memorandum and Articles of Association, for implementation of Revised Pay Scales with effect from 01.01.2017 in respect of Board Level and below Board Level Executives and Non-Unionized Supervisors.

a) Employers Contribution to Provident Fund

Company pays fixed contribution to Provident Fund at predetermined rates to a separate trust, which invests the fund in permitted securities. The contribution to the fund for the period is recognized as expense and is charged to the profit & loss account. The obligation of the company is limited to such fixed contribution. However, the trust is required to pay a minimum rate of interest on contributions to the members as specified by Government. As per actuarial valuation such liability is NIL as at March 31, 2018 (as at March 31, 2017: NIL).

B. State Plans

During the year the Company has recognised the following amounts as employer’s contribution to state plans in the statement of profit and loss :-

C. Defined Benefit Plans and Other Long Term Benefits

a) Contribution to Gratuity Funds - Employee’s Gratuity Fund.

The Company has a defined benefit gratuity plan, which is regulated as per the provisions of Payment of Gratuity Act, 1972. The scheme is funded by the company and is managed by a separate Approved Trust. The liability for the same is recognized on the basis of actuarial valuation.

b) Leave Encashment/ Compensated Absence.

The company has a defined benefit leave encashment plan for its employees. Under this plan, they are entitled to encashment of earned leaves and medical leaves subject to certain limits and other conditions specified for the same. The liabilities towards leave encashment have been provided on the basis of actuarial valuation.

c) Retirement Allowance

The company has formed a medical trust, which takes care of medical needs of its employees after their retirement. Their entitlement for reimbursement of medical expenses is regulated as per the policy. The liability for the same is recognized on the basis of actuarial valuation.

These plans typically expose the company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at March 31, 2018 by M/s Transvalue Consultants. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

Gratuity

- If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Rs.4.48 crore (increase by ‘ .4.89 crore) (as at March 31, 2017: decrease by Rs.5.17 crore (increase by Rs.5.26 crore)).

- If the expected salary growth increases (decreases) by 100 basis points, the defined benefit obligation would increase by Rs.3.16 crore (decrease by ‘.2.70 crore) (as at March 31, 2017: increase by Rs.4.15 crores (decrease by Rs.4.09 crores))

- Theestimated term of the benefit obligations in case of gratuity is 18.69 years( As at March 31, 2017:18.82 years )

The company expects to contribute Rs.16.19 crore to its gratuity plan in the next financial year.

Leave Encashment

If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Rs.5.24 crore (increase by Rs.5.54 crore) (as at March 31, 2017: decrease by Rs.6.44 crore (increase by Rs.6.64 crore))

If the expected salary growth increases (decreases) by 100 basis points, the defined benefit obligation would increase by Rs.4.43 crore (decrease by Rs.4.26 crore) (as at March 31, 2017: increase by Rs.5.38 crore (decrease by Rs.5.21 crores))

The estimated term of the benefit obligations in case of leave encashment is 18.69 years( As at March 31, 2017:18.82 years

Leave Travel Concession

If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Rs.0.03 crore (increase by Rs.0.03 crore) (as at March 31, 2017: decrease by Rs.0.04 crore (increase by Rs.0.04 crore)

If the expected salary growth increases (decreases) by 100 basis points, the defined benefit obligation would increase by Rs.0.02 crore (decrease by Rs.0.02 crores) (as at March 31, 2017: increase by Rs.0.03 crore (decrease by Rs.0.03 crores))

The estimated term of the benefit obligations in case of leave travel concession is 0.6 years( As at March 31, 2017: 1.05years )

Post retirement Benefits

If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Rs.0.25 crore (increase by Rs.0.26 crore) (as at March 31, 2017: decrease by Rs.0.24 crore (increase by Rs.0.24 crore)).

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

Each year an Asset-Liability-Matching study is performed in which the consequences of the strategic investment policies are analysed in terms of risk-and-return profiles. It is ensured that the defined benefit obligation is backed up by assets to maintain an assurance that assets are sufficient within the next 12 months.

There has been no change in the process used by the Company to manage its risks from prior periods.

Impact of changes in accounting policies

There are no changes in the accounting policies which had impact on the amounts reported for earning per share

Note

The Board of Directors have alloted bonus shares to the shareholders on 10.04.2017 after seeking the approval of the shareholders in which bonus shares were issued in the ratio of 1:4 (one bonus share for every four shares). As a result, the paid up share capital of the company increased to Rs.243.72 crore comprising of 243717739 equity shares of Rs.10/- each. Accordingly, as per requirement of Ind AS 33, the basic and diluted earning per share for all the periods presented has been computed on the basis of new number of shares post bonus issue i.e. 243717739 equity shares of Rs.10/- each.

Services from which reportable segments derive their revenues

The Segment reporting disclosed by the Company in this section is presented in accordance with the disclosures requirements of Ind AS 108 “Operating Segment”.

Information reported to the chief operating decision maker(CODM) for the purposes of resource allocation and assessment of segment performance focuses on the divisions operated in the company. There are two major operating divisions- EXIM and Domestic, which are organized on All India basis. The information is further analysed based on the different classes of customers. Both EXIM and Domestic divisions of the company are engaged in handling, transportation & warehousing activities. The Company has not aggregated any operating segments for presentation purposes.

As at March 31, 2018, the operating segment of the Company are as under:-

The Company is organised into two major operating divisions- EXIM and Domestic. The divisions are the basis on which the Company reports its primary segment information. Segment revenue and expenses directly attributable to EXIM and Domestic segments are allocated to the two segments. Joint revenue and expenses have been allocated on a reasonable basis. Segment assets include all operating assets used by a segment and consist principally of inventories, sundry debtors, cash and bank balances, loans & advances, other current assets and fixed assets net of provisions. Similarly, segment liabilities include all operating liabilities and consist principally of sundry creditors, advance/deposits from customers, other liabilities and provisions. Segment assets and liabilities do not, however, include provisions for taxes. Joint assets & liabilities have been allocated to segments on a reasonable basis.

As the operations of the Company are presently confined to the geographical territories of India, there are no reportable geographical segments.

The accounting policies of the reportable segments are the same as the Company’s accounting policies described in Note 1. Segment profit represents the profit before tax earned by each segment without allocation of central administration costs and directors’ salaries, investment income, other gains and losses, as well as finance costs. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

Revenue and expenses directly identifiable to the segments have been allocated to the relatively primary reportable segments.

Segment revenue and expenses which are not directly identifiable to the primary reportable segments have been disclosed under unallocable, which primarily includes interest and other income and Corporate Expenses. Other income includes Rent income, dividend income and Interest Income. Corporate Expenses includes Employee staff benefit expense, Administrative expense and Depreciation expense of Corporate office.

For the purposes of monitoring segment performance and allocating resources between segments:

a)all assets are allocated to reportable segments other than investments and assets of corporate office; and

b) all liabilities are allocated to reportable segments other than share capital, other equity, deferred tax liabilities and other liabilities of corporate office. Un-allocated corporate liabilities include 7 9401.11 crore (feat March 31 2017: 78846.20 crore) on account of Shareholder’s funds.

a) As a lessee Leasing arrangements

The Company has entered into Operating leases arrangements for containers, office premises and accommodation provided to staffs with different lease terms.

(1) Capital management

The company manages ifs capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders through the optimization of the capital structure.

The capital structure of the Company consists of total equity. The Company is not subject to any externally imposed capital requirements.

In the month of February 2017, issuance of one bonus equity share for every four equity shares held was recommended by board for which approval of shareholders through postal ballet route was taken by the company. After the above approval of shareholders, the Board of Directors have allotted bonus shares on April 10, 2017 to the shareholders and as a result the paid up share capital of the company increased from Rs.194.97 crores to Rs.243.72 crores comprising of 24,37,17,739 equity shares Rs.10/- each.

(i) Gearing ratio

The Company has no outstanding debt as at the end of reporting period. Accordingly, the Company has nil gearing ratio as at March 31, 2018 and March 31, 2017 respectively.

(iii) Financial risk management objectives

The Company’s corporate treasury function monitors and manages the financial risks relating to the operations of the Company by analyzing exposures by degree and magnitude of risks. These risks include market risk (including currency risk and price risk), credit risk and liquidity risk.

(iv)Market Risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates.

Market risk exposures are measured using sensitivity analysis.

There has been no change to the Company’s exposure to market risks or the manner in which these risks are being managed and measured.

(v) Foreign Currency risk management

The company is not subject to significant transactions denominated in foreign currencies. The company does not have earnings in foreign currency but the foreign currency outgo made during the year is Rs.52.10 crore (2016-17: Rs.86.59 crore) against which the net gain/(loss) on foreign currency transactions recorded in the books is insignificant .Consequently, exposures to exchange rate fluctuations are limited.

(vi) Interest rate risk management

The Company has not availed borrowings, hence is not exposed to interest rate risk.

(vii) Other price risks

The company is not exposed to price risk as its investments in debt based marketable securities are held in a business model to collect contractual amounts at maturity and are carried at amortised costs. Thus the change in fair value of these investments does not impact the Company.

These investments are tradable in market. A10% increase / decrease in the market price of these investments as at March 31,2018 will lead to Rs.74.82 crores (As at March 31,2017: Rs.74.17 crore) increase / decrease in the fair value of these investment

(viii) Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company .The Company has limited exposure to credit risk owing to the balance of trade receivables as explained in Note no. 11. Company’s bank balances and investments in marketable securities are held with a reputed and creditworthy banking institution resulting to limited credit risk from the counterparties.

The Company is exposed to credit risk in relation to financial guarantees given to banks on behalf of subsidiaries / joint venture companies. The Company’s maximum exposure in this respect is the maximum amount the Company could have to pay if the guarantee is called on as at March 31,2018 is Rs.62.47 crore (As at March 31,2017 is Rs.81.71 crore)

(ix)Liquidity risk management

The Company manages liquidity risk by maintaining adequate reserves and continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

The table below provides details regarding the contractual maturities of financial liabilities including estimated interest payments as at March 31,2018:

Joint Ventures

1. Star Track Terminals Pvt. Ltd.

2. Albatross Inland Ports Pvt. Ltd.

3. Gateway Terminals India Pvt. Ltd.

4. Himalayan Terminals Pvt. Ltd. (Foreign Joint Venture)

5. India Gateway Terminal Pvt. Ltd.

6. TCI-CONCOR Multimodal Solutions Pvt. Ltd. (formerly known as Infinite Logistics Solutions Private Limited)

7. Container Gateway Limited

8. Allcargo Logistics Park Pvt. Ltd.

9. CMA-CGM Logistics Park (Dadri) Pvt. Ltd.

10. Angul Sukinda Railway Ltd.

11. HALCON

Subsidiaries

1. Fresh And Healthy Enterprises Ltd. (wholly owned)

2. CONCOR Air Limited. (wholly owned)

3. SIDCUL CONCOR Infra Company Ltd.(partly owned)

4. Punjab Logistics Infrastructure Ltd.(partly owned)

Whole Time Directors/Key Managerial Personnel

1. Sh. V.Kalyana Rama, Chairman & Managing Director (we.f 01.10.2016)

2. Sh.P.K.Agrawal, Director Domestic (w.e.f 01.07.2016)

3. Sh. Sanjay Swarup, Director (IM&O) (w.e.f 01.09.2016)

4. Sh. Rahul Mithal, Director (Projects & Services) (w.e.f 29.09.2017)

5. Dr P Alli Rani, Director(Finance) Upto 03.10.2017)

6. Sh.Harish Chandra, ED(Fin. & CS)

Nominated/Independent Directors

1. CA Kamlesh Shivji Vikamsey (w.e.f. 05.04.2016)

2. CA Sanjeev S. Shah (w.e.f. 05.04.2016)

3. Sh. Sanjay Bajpai (W.e.f. 01.07.2016)

4. Late Maj. Gen(Retd) Raj Krishan Malhotra( upto 16.06.2017)

5. Ms Vanita Seth(w.e.f.21.09.2017)

6. Sh Lov Verma (w.e.f. 21.09.2017)

7. Sh Anjaneya Prasad Mocherla(w.e.f. 21.09.2017)

8. Sh. S. K. Sharma (upto 26.09.2017)

9. Sh. Prabhas Dansana (w.e.f. 27.10.2017)

Enterprises owned or significantly influenced by Key Management Personnel or their relatives:

1. Seshasaila Power and Engineering Pvt. Ltd.

2. Seshasaila Logistics Pvt. Ltd.

3. Seshasaila Infrastructure Pvt. Ltd.

4. Seshasaila Power (Mandsaur) Pvt. Ltd.

5. Seshasaila Power (Dhar) Pvt. Ltd.

6. Neo Cube Technology Solutions Pvt Ltd

7. AK-BIO Power (India) Pvt. Ltd.

8. Praja Engineering Services Pvt. Ltd.

9. Venran Biotek Pvt. Ltd.

10. BPTS - Govt. of Orissa Undertaking

11. Credential Stock Brokers Limited

12. Toshali Commex Pvt.Ltd

13. Enginuity Advisors Pvt. Ltd.

14. Endocrine & Diabetes Foundation(EDF)

4.1 Related party transactions were made on arm’s length.

4.2 Company’s share of assets, liabilities, income, expenditure, contingent liabilities & capital commitments in the Subsidiaries, to the extent of information available, is as follows:

d. Contingent liabilities are disclosed to the extent of claims received and include an amount of Rs.14.68 crore (201617: Rs.13.08 crore), which may be reimbursable to the company. Any further interest demand on the basic claim is not considered where legal cases are pending, as the claim itself is not certain. No provision has been made for the contingent liabilities stated above, as on the basis of information available, careful evaluation of facts and past experience of legal aspects of the matters involved, it is not probable that an outflow of future economic benefits will take place.

e. As per assessment orders under section 143(3) of the Income Tax Act, 1961, the Assessing Officer (AO) disallowed certain claims of the company, mainly deduction under section 80IA in respect of Rail System for assessment years 2003-04 to AY 2007-08 & AY 2009-10 to AY 2015-16 and Inland Ports (ICDs/CFSs) for assessment years 2003-04 to AY 2015-16.

f. In appeal, deduction for Rail System for AY 2003-04 to AY 2005-06 & AY 2011-12 to AY 2014-15 has been allowed by CIT (A) & for AY 2006-07 to AY 2009-10 has been allowed by ITAT/Delhi. Disallowance of Rail System for AY 2010-11 has been upheld by CIT (A) & the company has filed appeal against these orders with Hon’ble ITAT/Delhi. Further, department has filed an appeal with ITAT/Delhi against the order of CIT(A) for AY 2011-12, AY 2012-13 & AY 2013-14 on the issue of deduction for Rail System.

g. On the matter of deduction for Inland Ports, same has been allowed by the Hon’ble Delhi High Court for AY 2003 04 to AY 2005-06 & AY 2007-08, by ITAT-Delhi forAY 2006-07, AY 2008-09 & AY 2009-10. Disallowance of Inland Port deduction For AY 2010-11 to AY 2014-15 has been upheld by CIT (A) & the company has filed appeal against these orders with Hon’ble ITAT/Delhi and department also filed an appeal with Hon’ble Delhi High Court against the order of Hon’ble ITAT/Delhi for AY 2008-09 & AY 2009-10 on the issue of deduction for Inland ports (ICDs/CFSs).

h. Appeal for AY 2015-16 on the issue of disallowance of Rail System and Inland Ports deduction is pending with CIT (A). A SLP has been filed by the Income Tax department before the Hon’ble Supreme Court on the issue of deduction of Inland Ports for AY 2003-04 to AY 2005-06 and AY 2007-08 against the order passed by Hon’ble Delhi High Court in favour of the company. The last hearing was on 06-12-2017 & Hon’ble Supreme Court has reserved the order.

“The company entered into contract for supply of 1320 wagons by Hindustan engineering and Industries (HEI). After the supply of 1050 wagons, the contract was terminated during FY 2004-05, for non-fulfillment of obligation on the part of HEi. The company invoked the bank guarantee of Rs.5.99 crore for refund of unadjusted advance and Rs.7.37 crores towards performance guarantee for non fulfillment of terms of contract on the part of HEI. The matter was referred to an Arbitration Tribunal comprising three members, which has given majority award amounting to Rs.39.58 Crores and interest @ 15% from date 22.05.2005 to 13.11.2013 amounting to Rs.50.37 crore, totalling to Rs.89.95 Crore 18% interest p.a. from the date of award to the date of payment in favour of M/s Hindustan Engineering Industries on 13.11.2013. Minority award by Co-Arbitrator has been given amounting to Rs.14.61 crore in favour of the company. The majority award given in favour of HEI has been challanged by the company under section 34 of Arbitration and Concilliation Act, 1996 in the High Court of Delhi at New Delhi on dated 07.03.2014. Last hearing in the matter was held on 17.01.2018 wherein the court has fixed the next hearing for 04.05.2018 and 07.05.2018

The Company has executed “Custodian cum Carrier Bonds” of Rs.31,369.33 crore (previous year: Rs.28,549.64 crore ) in favour of Customs Department under the Customs Act, 1962. These bonds are of continuing nature, for which claims may be lodged by the Custom Authorities. Claims lodged during the year Nil (previous year: NIL).

No further provision is considered necessary in respect of these matters as the company expects favourable outcome. It is not possible for the company to estimate the timing of further cash outflows, if any, in respect of these matters.

No contingent assets and contingent gains are probable to the company.

Note : 5. During the year, the company realised Rs.5.84 crore (previous year: Rs.12.51 crore ) (net of auction expenses) from auction of unclaimed containers. Out of the amount realized, Rs.1.32 crore (previous year: Rs.2.65 crore) is paid/payable as custom duty, Rs.4.43 crore (previous year: Rs.8.75 crore ) has been recognised as income and the balance of Rs.0.09 crore (previous year: Rs.1.11 crore ) has been shown under Current Liabilities.

(a) Current liabilities include Rs.0.07 crore (As at March 31, 2017: Rs.0.07 crore ) towards unutilised capital grant received for acquisition of specific fixed assets in CONCOR/business arrangements.

(b) Current liabilities include Rs.1.82 crore (As at March 31, 2017: Rs.1.82 crore ) towards unutilised revenue grant received from National Horticulture Board for offsetting the freight for the Horticulture Projects.

(c) Out of the total capital grant of Rs.14.17 crore, an amount of Rs.1.04 crore (previous year Nil) has been recognised in the Statement of Profit and Loss and the balance of Rs.13.13 crore is shown under liabilities. Tax provision during the year has been worked out after considering deduction of Rs.350.02 crore ( As at March 31, 2017: Rs.250.86 crore) under section 80IA of the Income Tax Act, 1961 in respect of Rail System and ICDs.

Note : 6. The Particulars of dues to Micro, Small and Medium Enterprises under Micro, Small and Medium Enterprises Development Act,2006 (“MSMED Act”)

The company has not remitted any amount in foreign currency on account of dividend during the year.

Provisions relating to disclosure of information as required by Companies Act, 2013 in case of companies other than service companies are not applicable, as the company has no manufacturing, trading and financing activities.

Company is entitled for Served from India Scheme (SFIS) of the government of India, SFIS sricps under the scheme can be utilized within 24 months from the date of issue of scrips for duty credit for import of capital goods & payment of excise duty on domestic purchases.

In the above statement:

- Previous year figures are in brackets.

- # Current year figures are unaudited.

Note 7: Works carried out by Railways/its units for the company are accounted for on the basis of correspondence /estimates/advice etc.

Note 8 : Inland Gateway Terminal (P) Ltd. (IGTPL) is a joint venture of CONCOR with Dubai Port International (DPI) for setting up and managing of container terminal at Cochin. Though CONCOR’s share of Rs.89.85 crores in accumulated losses of ‘.617.12 crores (as per unaudited financial statements for FY 2017-18) of this JV exceeds its investment of Rs.54.60 crores as on 31st March 2018, no provision for diminution in the value of investment has been made, as with the management’s consistent review and implementation of appropriate business strategy, this company’s turnaround is now visible. The same is clearly established from the unaudited financial statements of IGTPL for FY 2017-18, which shows a net profit of Rs.3.32 crores earned during the year against a loss of Rs.15.00 crores in the previous year.

Management has also tested this investment for impairment in accordance with the conditions laid own under IND AS-36 “Impairment of Assets”. As per the impairment testing carried out by the management, it has been established that the Value in Use i.e., the present value of future expected cash flows that will accrue from the improving/enhancing of its asset’s performance exceed the carrying value of investment. IND AS-36 states that impairment needs to be provided if and only if the carrying value of investments exceeds its value in use or fair value.

Note 9: Fresh & Healthy Enterprises Ltd. (FHEL) is a wholly owned subsidiary of CONCOR. Though accumulated losses of FHEL amounting to Rs.163.77 crores (as per audited financial statements for FY 2017-18) exceeds CONCOR’s investment of Rs.146.62 crores as on 31st March 2018, no provision for diminution in the value of investment has been made, as management has already finalized a business plan for revival of FHEL on the basis of its in-house financial evaluation and technical evaluation conducted by an external agency. In this direction, the Board of Directors (BOD) of CONCOR has approved the said business plan for re-engineering of FHEL’s facility at Rai, Sonipat, which is proposed to be executed in two phases costing in total Rs.44.31 crores. The cost of Phase-I would be Rs.13.45 crores, for which equity infusion by CONCOR has already been approved by its BOD. On completion of Phase-I, the performance of FHEL will be reviewed and on the basis of such review, investment will be re-tested for impairment as required under IND AS-36 “Impairment of Assets”. The management is confident of achieving the desired results from the above business plan.

Management has also tested this investment for impairment in accordance with the conditions laid own under IND AS-36. As per the impairment testing carried out by the management, it has been established that the Value in Use i.e., the present value of future expected cash flows that will accrue from re-engineering of FHEL’s facility at Rai, Sonipat exceed the carrying value of investment. IND AS-36 states that impairment needs to be provided if and only if the carrying value of investments exceeds its value in use or fair value.

Note 10: In FY 2017-18, an amount of Rs.15.75 crores (Previous year Rs.24.45 crores) has been utilized on various social activities undertaken including infrastructure and community development activities under CONCOR Corporate Social Responsibility (CSR). The amount available for spending has been utilized on various CSR activities during the year. Some of the projects in this category are related to Creating infrastructure for Schools, construction of hospital buildings, construction of PCC Rajatalab for benefit of farmers, installation of handpumps in rural areas for providing drinking water, solar electrication of Railway stations, providing solar lights to un-electrified villages, preventive health checkup camps, construction of community toilets, skill development trainings, contribution to “Swachh Bharat Kosh” etc.

Note 11 : Unless otherwise stated, the figures are in rupees crore.

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