FUTURE CONCOR Notes to Accounts

1 Gross Block of Plant and machinery and Containers include Rs,3.72 Crore (As at March 31, 2016: Rs,1.99 crore; As at March 31, 2015: Rs,1.28 crore) and Rs,0.78 Crore( As at March 31, 2016: Rs,1.24 crore; As at March 31, 2015 : Rs,0.85 crore) respectively for items retired from active use due to obsolescence/condemnation, which are held for disposal.


2 Gross Block of Buildings include assets valuing Rs,4.23 crore (As at March 31, 2016: Rs,3.79 crore; As at March 31, 2015: Rs,31.23 crore ) in respect of which sale/lease deeds are yet to be executed.


3 Gross Block of Freehold land include assets valuing Rs,0.44 crore (As at March 31, 2016: Rs,0.44 crore; As at March 31, 2015: Rs,0.44 crore ) in respect of which sale/lease deeds are yet to be executed.


4 Contractual Commitments for acquisition of property, plant and equipment are Rs,728.18 crores( As at March 31, 2016: Rs,1213.49 crores)


5 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 software’s material for the operations of the company is Rs,2.34 crore (as at March 31, 2016: Rs,4.26 crore; as at April 1, 2015: Rs,6.37 crore) will be fully amortized in 2 years (as at March 31, 2016: 3 years; as at April 1, 2015: 4 years).


6 Prepayment of leasehold land include assets valuing Rs,121.24 crore (As at March 31, 2016: Rs,87.46 crore; As at March 31, 2015: Rs,87.46 crore ) in respect of which lease deeds are yet to be executed.


Stores and spares parts include items costing Rs,4.75 crore (2015-16: Rs,4.24 crore and 2014-15: Rs,3.14 crore), which have not been consumed during last three years. This includes Rs,0.12 crore (2015-16: Rs,0.26 crore, 2014-15: Rs,0.80 crore) identified as obsolete spares and provided for. The management expects to use the remaining items in the operations and hence has not provided any impact.


The cost of inventories recognized as an expense during the year was Rs,17.69 crore (March 31, 2016: Rs,8.78 crore).


* This includes amount recoverable from M/s Gateway Terminals India Private Limited (Related party) - Rs,Nil (As at March 31, 2016; Rs,11.75 crore; as at April 1, 2015: Rs,16.62 crore.)


7 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 provisions contained in Customs Act,1962.


Thus the Company has limited exposure to credit risk.


8 Credit risk concentration


The concentration of credit risk is limited due to the fact that the customer base is large and unrelated. No customers represent more than 5% of the total balance of trade receivables.


9 Allowance for expected credit loss


The Company has used a practical expedient by 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.


* For the purposes of this clause, the term " Specified Bank Notes'''' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407( E ), dated November 8, 2016.


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 of its declaration.


An amount of Rs,2,68,078 (As at March 31, 2016: Rs,2,82,684. ; As at March 31, 2015:Rs,1,02,399) has been deposited timely in the Investor Education & Protection Fund.


Bank balances held as margin money or as security against 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.


(ii) Rights, preferences and restriction attached to shares


The Company has one class of equity shares having a par value of Rs,10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.


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(2015-16: Rs,8.00 ) and proposed final dividend of Rs,7.50 (2015-16: Rs,5.50 ) per equity share 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 ofthe Micro, Small and Medium Enterprises DevelopmentAct, 2006) The Company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.


Note


(i) Storage and Warehousing income is net of waivers of Rs,0.46 crore (2015-16: Rs,0.69 crore)


(ii) Other operating income includes Rs,7.69 crore (2015-16- Rs,11.24 crore) towards consultancy income, which has been received from M/s Gateway Terminals India Private Limited.


(iii) Export Incentive includes Rs,21.60 Crore (2015-16: Rs,24.58 crore ) towards Grants under SFIS, which have been recognized at the time of utilization of these scripts towards procurement of Assets and Inventories. It also includes an amount of Rs,211.50 (2015-16: Rs,225.43 Crore) towards Grants under SEIS, which have been recognized during the year being the period in which the right to receive the same is established.


Other Operating expenses include Rs,44.60 crore (2015-16: Rs,30.26 crore) & Rs,17.69 crore (2015-16: Rs,8.78 crore) towards power and fuel and consumption of stores and spare parts respectively. Details of expenditure on consumption of imported & indigenous stores and spare parts are as follows:


A. Defined Contribution Plans


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, 2017 (as at March 31, 2016: NIL).


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.


Investment Risk The present value of the defined benefit plan liability(denominated in Indian Rupee) is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.


Interest Risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''''s debt investments.


Longevity Risk The presenet value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of loan participants both during and after their employment. An increase in the life''''s expectancy of the plan participants will increase the plan''''s liability.


Salary Risk The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''''s liability.


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, 2017 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.


An actuarial valuation was carried out in respect of the aforesaid defined benefit plans and other long term benefits based on the following assumptions.


- If the expected salary growth increases (decreases) by 100 basis points, the defined benefit obligation would increase by Rs,4.15 crore (decrease by Rs,4.09 crore) (as at March 31, 2016: increase by Rs,3.34 crores (decrease by Rs,3.29 crores)) (as at April 1, 2015: increase by Rs,3.13 crore (decrease by Rs,3.01 crore)).


The estimated term of the benefit obligations in case of gratuity is 18.82 years( As at March 31, 2016:18.89 years)


The company expects to contribute Rs,8.10 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,6.44 crore (increase by Rs,6.64 crore) (as at March 31, 2016: decrease by Rs,4.80 crore (increase by Rs,4.94 crore)).


- If the expected salary growth increases (decreases) by 100 basis points, the defined benefit obligation would increase by Rs,5.38 crore (decrease by Rs,5.21 crore) (as at March 31, 2016: increase by Rs,4.00 crore (decrease by Rs,3.88 crores)).


The estimated term of the benefit obligations in case of leave encashment is 18.82 years( As at March 31, 2016:18.89 years)


Leave Travel Concession


- If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Rs,0.04 crore (increase by Rs,0.04 crore) (as at March 31, 2016: decrease by Rs,0.02 crore (increase by Rs,0.02 crore)).


- If the expected salary growth increases (decreases) by 100 basis points, the defined benefit obligation would Rs,0.03 crore (decrease by Rs,0.03 crores) (as at March 31, 2016: increase by Rs,0.02 crore (decrease by Rs,0.02 crores)).


The estimated term of the benefit obligations in case of leave travel concession is 1.05 years( As at March 31, 2016: 2.05years)


Post retirement Benefits


- If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Rs,0.24 crore (increase by Rs,0.24 crore) (as at March 31, 2016: decrease by Rs,0.42 crore (increase by Rs,0.42 crore)) (as at April 1, 2015: decrease by Rs,0.10 crore (increase by Rs,0.10 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 recognized 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.


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 earnings 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.


37.1 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 analyzed 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, 2017, the operating segment of the Company are as under :


The Company is organized 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 unallowable, 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.


(1) Capital management


The company manages its capital to ensure that it will be able to continue as a going concern while maximizing 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.


During the year there has been no change in the capital structure of the company and its paid up share capital stands at Rs,194.97 crore. In the month of October 2016, Ministry of Railways, Government of India has transferred 82,340 equity shares to the eligible employees of company. Further, during January 2017 and March 2017, Government of India divested 1.40% and 0.55% respectively stake in company through CPSE ETF FFO and CPSE ETF FFO2. Through this successful CPSE ETF FFOs, Govt. has divested 38,08,253 equity shares of the company. Accordingly, the shareholding of Government and others in the company as on 31.03.2017 was 54.80% and 45.20% respectively, which was 56.79% & 43.21% respectively as on 31.03.2016.


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, 2017 and March 31, 2016 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,86.59 crores ( 2015-16: Rs,98.20 crores; 2014-15: Rs,20.12 crores) 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 . A 10% increase / decrease in the market price of these investments as at March 31, 2017 will lead to Rs,74.17 crores (As at March 31, 2016: Rs,70.66 crores; As at March 31, 2015: Rs,48.13 crores) 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, 2017 is Rs,81.71 crores (As at March 31, 2016 is Rs,80.47 crores; As at March 31, 2015 is Rs,152.57 crores).


(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, 2017;


* Based on expectations at the end of the reporting period, the Company considers that it is more likely than not that such an amount will not be payable under the arrangement. The maximum amounts the Company could be forced to settle under the arrangement for the full guaranteed amount if that amount is claimed by the counterparty to the guarantee is Rs,74.28 crores (As at March 31, 2016: Rs,80.47 crores; As at March 31, 2015 : Rs,152.57 crores).


The table below provides details regarding the contractual maturities of financial assets including estimated interest receipts as at March 31, 2016:


The table below provides details regarding the contractual maturities of financial assets including estimated interest receipts as at April 1, 2015:


(x) Fair value measurements


None of the company''''s financial assets and financial liabilities are measured at fair value at the end of the reporting period.


* There is no significant change in the fair value of these financial assets and financial liabilities , therefore fair value is equal to its carrying value.


** These investments include investments made in tax free bonds only.


10. Name of related parties and description of relationship: 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


1. Sh. Anil K. Gupta, Chairman & Managing Director (Upto 30.09.2016)


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


3. Dr. P. Alli Rani, Director (Finance)


4. Sh. Arvind Bhatnagar, Director (Domestic) (Upto 30.06.2016)


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


6. Sh. Yash Vardhan, Director (IM&O) (Upto 31.08.2016)


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


8. Sh. V. Kalyana Rama, Director (Projects & Services) Upto 30.09.2016)


Nominated/Independent Directors


1. Sh. Manoj K. Akhouri (Upto 25.04.2016)


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


3. Maj. Gen. (Retd.) Raj Krishan Malhotra (w.e.f. 05.04.2016)


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


5. Sh. S. K. Sharma (w.e.f. 22.05.2016)


6. Sanjay Bajpai (W.e.f. 01.07.2016)


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. New 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


The loan is unsecured and receivable in next year.


The loan is unsecured and receivable in next year


B. Independent Directors


Sitting fees paid to nominated/independent directors for the year is Rs,0.24 crore (previous year Rs,0.10 crore).


11. Disclosure in respect of Government Controlled Entities


12. Name of Government controlled entities and description of relationship wherein significant amount of transaction carried out:


Government controlled entities


1. Indian Railways


13. Transaction with Government Controlled Entities


The above transactions (revenue/expenses) with the government related entities presented for the parties covering collectively up to 80% of total transactions (revenue/expenses). The Company has entered into transactions related to expenses such as telephone expenses, air travel, fuel purchase etc. with above mentioned and other various government controlled entities. These expenses are not material individually and collectively.


The Company has also entered into transactions related to operational and other expenses such as telephone expenses, air travel, fuel purchase etc. with above mentioned and other various government related entities. These operational and other expenses are insignificant individually and collectively.


Contingent liabilities are disclosed to the extent of claims received and include an amount of Rs,13.08 crore (2015-16:Rs,179.86 crore; 2014-15; Rs,281.28 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.


d. 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 200708 & 2009-10 to 2014-15 and Inland Ports (ICDs/CFSs) for assessment years 2003-04 to 2014-15. In appeal, for AY 2003-04 to 2007-08 & 2009-10, deduction for Rail System has been allowed by CIT (A) and ITAT/Delhi and for AY 2011-12 to 2013-14, deduction for Rail System has been allowed by CIT (A). On the matter of deduction for Inland Ports, same has been allowed by the Hon''''ble Delhi High Court for AY 2003-04 to 2005-06 & AY 2007-08, by ITAT, Delhi for AY 2008-09, by CIT (A) for AY 200910 and for AY 2006-07, the matter has been referred to Delhi Bench of ITAT by Special Bench of ITAT/Mumbai giving a verdict that ICDs/CFSs set up by the company are Inland Ports. For AY 2011-12 to AY 2013-14, disallowance of Inland Port deduction and for AY 2010-11, disallowance of Rail System and Inland Port deduction has been upheld by CIT (A) & the company has filed appeal against these orders with Hon''''ble ITAT/Delhi. Appeal for AY 2014-15 on the issue of disallowance of Rail System and Inland Ports deduction is pending with CIT (A). For AY 2006-07 & 2007-08, department has filed belated appeal(s) with the Hon''''ble ITAT/Delhi against the order(s) passed by CIT (A), vide which relief had been granted in favour of the company with regard to claim of deduction u/s 80IA of the Act for Rail System. SLP has been filed by the 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 and the same has been admitted. Further, department has filed appeal with ITAT/Delhi against the order of CIT(A) for AY 2011-12 on the issue of deduction for Rail System.


e. As per assessment orders under section 147/143(3) of the Income Tax Act, 1961, the Assessing Officer (AO) disallowed certain claims of the company for AY 2007-08. Regarding AY 2007-08, appeal filed by the company with CIT (A) has been allowed in part and company has preferred second appeal with the Hon''''ble ITAT/Delhi against such order. Further, department has also filed appeal with the Hon''''ble ITAT/Delhi against the order passed by CIT (A) for relief grated to the company. Demand for AY 2007-08 has been further enhanced by AO vide order passed u/s 154/147/143(3). Appeal filed by the company against the order of AO u/s 154/147/143(3) with CIT (A) has been dismissed and the company has preferred second appeal with the Hon''''ble ITAT/ Delhi against such order.


f. For AY 2006-07, appeal filled with CIT (A) against the order of AO imposing penalty u/s 271(1) (c) have been decided in company''''s favour. However, department has filed appeal before the Hon''''ble ITAT/Delhi against the order of CIT (A).


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, totaling 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 Conciliation Act, 1996 in the High Court of Delhi at New Delhi on dated 07.03.2014


The Company has executed "Custodian cum Carrier Bonds" of Rs,28,549.64 crore (previous year: Rs,27,686.46 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 favorable 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 46 : During the year, the company realized Rs,12.15 crore (previous year: Rs,6.57 crore) (net of auction expenses) from auction of unclaimed containers. Out of the amount realized, Rs,2.50 crore (previous year: Rs,1.20 crore) is paid/payable as custom duty, Rs,8.54 crore (previous year: Rs,4.37 crore) has been recognized as income and the balance of Rs,1.11 crore (previous year: Rs,1.00 crore) has been shown under Current Liabilities.


(a) Current liabilities include Rs,0.07 crore (As at March 31, 2016: Rs,1.89 crore) towards unutilized capital grant received for acquisition of specific fixed assets in CONCOR/business arrangements. Amount of Rs,7.48 crore (As at March 31, 2016: Rs,4.83 crore) towards capital grants utilized during the year for acquisition of fixed assets has been deducted from the gross value of fixed assets and amount of NIL (As at March 31, 2016: Rs,8.73 crore) has been transferred to subsidiaries.


(b) Current liabilities include Rs,1.82 crore (As at March 31, 2016: Rs,1.82 crore) towards unutilized revenue grant received from National Horticulture Board for offsetting the freight for the Horticulture Projects. Amount of NIL (As at March 31, 2016: NIL) towards revenue grants received & utilized during the year by offsetting the freight for the Horticulture Projects has been recognized as Rail Freight Income.


Tax provision during the year has been worked out after considering deduction of Rs,250.86 crore under section 80IA of the Income Tax Act, 1961 in respect of Rail System and ICDs.


Note 47: The Particulars of dues to Micro, Small and Medium Enterprises under Micro, Small and Medium Enterprises Development Act,2006 ("MSMED Act”)


In the above statement:


- Previous year figures are in brackets.


- # Current year figures are unaudited.


Note 52: Works carried out by Railways/its units for the company are accounted for on the basis of correspondence / estimates/advice etc.


Note 53: India Gateway Terminal (P) Ltd. {IGTPL} is a joint venture of CONCOR with Dubai Port International {DPI} for setting up and managing container terminals at Cochin. Though CONCOR''''s share (Rs,88.59 crore) of accumulated losses of Rs,608.46 crore (as per unaudited accounts of FY 2016-17) in IGTPL exceeds its investment (Rs,54.60 crore) in the JV as on 31.03.2017, no provision for diminution in the value of investment has been made, as management is making all possible efforts for its revival and is confident of its turn-around.


Note 54: Fresh and Healthy Enterprises Ltd. {FHEL} is a fully owned subsidiary of CONCOR. Though accumulated losses of FHEL of Rs,153.33 crore (as per audited accounts of FY 2016-17) is very close to CONCOR''''s investment (Rs,146.62 crore) in the subsidiary as on 31.03.2017, no provision for diminution in the value of investment has been made, as management is making all possible efforts for its revival and is confident of its turn-around.


Note 55: In FY2016-17 an amount of Rs,24.45 crores (Previous year Rs,30.96 crores) was utilized on various activities undertaken including infrastructure and community development activities under CSR. The amount available for spending has been utilized on Corporate Social Responsibility (CSR) activities during the year. Some of the projects in this category are related to Creating infrastructure for Schools in the state of Odisha, Maharashtra and Chattisgarh, Solar electrification of railwaystations, providing solar lights to un-electrified villages, health checkup camps, construction of toilets, skill development, etc.


Note 56: Unless otherwise stated, the figures are in rupees crore.


The effect of the company''''s transition to Ind AS, described in note below, is summarized in this note as follows:


i. Transition election


ii. Reconciliation of equity as previously reported under Indian GAAP to Ind-AS


iii. Adjustments to the statement of cash flows .


(i) Transition election


The Company has prepared the opening balance sheet as per Ind AS as of April 1, 2015 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognized assets and liabilities. However, this principle is subject to the certain exception and certain optional exemptions availed by the Company as detailed below.


1. In accordance with Ind-AS transitional provisions, the company opted to consider previous GAAP carrying value of property, plant and equipment as deemed cost on transition date.


2. In accordance with Ind-AS transitional provisions, investments in subsidiaries, joint ventures and associates are required to be measured either at cost or at fair value as per Ind AS 109. The Company has measured its investment at cost, which is the previous GAAP carrying amount at the date of transition in the entity''''s separate financial statements


3. Designation of previously recognized financial instruments exemption- The Company do not have any investments in equity instruments of Companies (other than subsidiaries, joint ventures and associates) which company opted for transition option to be measured at FVOCI or at amortized cost.


4. In accordance with Ind-AS transitional provisions, the company opted to determine whether an arrangement existing at the date of transition contains a lease on the basis of facts and circumstances existing at the date of transition rather than at the inception of the arrangement.


Notes:


i. Under Ind-AS, guarantees issued are recognized at fair value at inception and measured at the higher of the amortized value or the obligation amount in case it is probable that the guarantee amount is payable. Under Indian GAAP, guarantee issued are not recognized unless it is probable that the guarantee amount is payable.


ii. Under Ind-AS dividends payable and the associated corporate dividend tax are recorded as a liability in the year in which these are declared and approved. Under older Indian GAAP, dividends payable are recorded as a provision in the year to which they relate.


iii. Under Ind-AS, lease rent are recognized based on straight line basis over the period of the lease including extendable period. Under older Indian GAAP, lease rent are recognized without considering the straight lining.


iv. Under Ind-AS, security deposit are measured at fair value at inception and measured at the higher of the amortized value or the obligation amount in case it is probable that the amount is payable/receivable. Under older Indian GAAP, no such measurement at amortized cost is required.


v. Under Ind-AS, loans and advances are initially recognized at fair value and then measured using effective interest rate rate as a result of which any employee cost which is the difference between market rate of interest and contractual interest rate is recognized over the usage pattern of the loan. Under older Indian GAAP, such loans and advances are recognized at the contractual amount and such employee cost are not accounted for and interest cost is recognized based on the contractual interest rate.


vi. Under Ind-AS, investment in bonds are measured at amortized cost and its related premium or interest are recognized through profit or loss. Under older Indian GAAP, the premium was added up to the cost of investments in bonds.


vii. As per Ind-AS, Actuarial gains and losses on post- employment defined benefit plans to be recorded through OCI. Under previous Indian GAAP, Actuarial gains and losses were recognized in profit or loss.


viii. Under Ind AS, depreciation on freehold land has been reversed.


ix. Under previous GAAP, HALCON was classified as business arrangement and share of profit was included in the profit of the company. However, under Ind AS, HALCON has been classified as a joint venture and has been accounted for using equity method only in consolidation.


x. Consequential deferred tax on all the above adjustments.


Prior Period Errors identified during transition to Ind AS


xi. Export benefits pertaining to years 2015-16 which had not been recognized under previous GAAP has been recognized in the year 2015-16.


xii. Consequential tax impact on xi. Above


xiii. Deferred tax pertaining to transition date and 2015-16 have been adjusted to the respective periods.


Note 14: Approval of financial statements


The financial statements were approved for issue by the board of directors on May 25, 2017.

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
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