12.1 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 predetermined 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.
12.2 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 Carriers Pvt Ltd.
2 M/s Ultra Tech Cement Ltd
3. M/s Hapag Lloyd India Pvt Ltd.
4. M/s Maersk Line India Pvt Ltd.
5. M/s Indian Farmers Fertiliser Cooperative
6. M/s Food Corporation of India
12.3 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 ? 2,96,673(As at March 31, 2022: ? 58,141) has been deposited timely in the Investor Education & Protection Fund.
Bank balances held as margin money or as security against:* Guarantees
Guarantee given in respect of various contracts/tenders submitted with the respective parties.
**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.
16.1 From 1st April 2020, Indian Railways has changed its Land License fee policy, due to which some of the Terminals were rendered unviable, which were handed over to Indian Railway along with un-amortized fixed assets available on them. The company has reduced its fixed Assets (Buildings, Roads & Pavements, electrical fittings and Railway Sidings) amounting to ? 77.41 crore in FY 2020-21 and the same has been shown as recoverable from Indian Railway. Further, pending confirmation of the amount payable by Railways on this account the company has also provided the same as doubtful recovery from Indian Railway.
17.1 Registration fees includes fee paid for running of container trains, registrations of Private Freight Terminals(PFT), etc.
17.2 CONCOR had recognized during the financial year 2015-16 to 2018-19 an amount totalling to ^1044.03 crores as the income on account of benefit available under Service Export from India Scheme (SEIS). The availability of this benefit to CONCOR was also confirmed through legal opinions. In FY-2019-20 Directorate General of Foreign Trade (DGFT), disallowed ? 861.05 crores of claim for SEIS by stating that services towards customs transit of foreign liners sealed containers by rail transport placed under customs control to/from ICDs are not eligible for SEIS, for which provision was made by the company and it also filed appeal against the same at the appropriate level.
(ii) Rights, preferences and restriction attached to shares
The Company has one class of equity shares having a par value of ? 5 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. 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.
(v) Aggregate number and class of shares allotted as fully paid up by way of bonus shares (during 5 years immediately preceding March 31, 2023):
4,87,43,548 equity shares were issued on April 10, 2017 as fully paid up Bonus Shares, which were issued in the ratio of 1:4 (one bonus equity share for four equity shares) by capitalising ? 48.74 crores from the reserves and surplus of the company.
12,18,58,870 equity shares were issued on February 7, 2019 as fully paid Bonus shares, which were issued in the ratio of 1:4 (one bonus share for every four shares) by capitalising ? 60.93 crores from the reserve and surplus of the company.
*As per CONCOR House Building Advance Rules, CONCOR is providing House Building Advance (HBA) facility to all regular employees of the Corporation, who on the date of submitting application for advance have rendered not less than three years’ continuous services. As per earlier HBA rules, simple interest @ 5% per annum on the loan amount up to ? 5.5 lakhs & interest @ 7.5% per annum on loans beyond ? 5.5 lakhs. Rebate was provided “in case of employees superannuating from CONCOR services or die in harness or become medically incapacitated for reasons not connected with intemperate habits or putting 10 years of minimum regular service from the date of availed of advance, a rebate @ 50% in the interest rates was allowed”. During the year, the company has changed its policy and decided that interest @ 3 % will be charged on HBA's or where the HBA amount/interest is outstanding as on date or the rebate for the loan is yet to be availed. Resultantly HBA interest was recalculated from date of disbursement of loan & benefit of the same was passed on to employee amounting to ? 11.35 crores. Rebate on HBA amounting to ? 0.50 crores is for F.Y 2022- 23 & ? 10.85 crores for previous years. Hence, in current year i.e F.Y. 2022-23 “Interest income earned on Financial assets carried at amortised cost” on loans given to employees is ?(3.36) crores.
**Miscellaneous Income includes ? 46.87 crore received from Indian Farmers Fertiliser Cooperative (IFFCO) towards development of an area of 35.5 Acres exclusively dedicated to IFFCO for handling and warehousing of IFFCO cargo rakes at MMLP Paradip (Previous Year: ? 21.07 crore).
Gratuity
If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by ?6.60 crore (increase by ?7.40 crore) (as at March 31, 2022: decrease by ? 8.27 crore (increase by ?8.97 crore)).
If the expected salary growth increases (decreases) by 100 basis points, the defined benefit obligation would increase by ? 1.25 crore (decrease by ?1.21 crore) (as at March 31, 2022: increase by ? 1.21 crores (decrease by ? 1.27 crores))
The estimated term of the benefit obligations in case of gratuity is 9.10 years( As at March 31, 2022: 9.98 years )
The company expects to contribute ? 6.61 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 ? 5.87 crore (increase by ?6.44crore) (as at March 31, 2022 decrease by ? 6.96 crore (increase by ? 7.85crore))
If the expected salary growth increases (decreases) by 100 basis points, the defined benefit obligation would increase by ? 6.59 crore (decrease by ? 5.93 crore) (as at March 31, 2022: increase by ? 7.27 crore (decrease by ? 6.75 crores))
The estimated term of the benefit obligations in case of Leave Encashment is 9.10 years( As at March 31, 2022: 9.98 years )
Post retirement Benefits
• If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by ? 10.01 crore (increase by ? 12.98 crore) (as at March 31, 2022: decrease by ? 16.75 crore (increase by ? 18.95 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 has been no change in the process used by the Company to manage its risks from prior periods.
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, 2023, the operating segment of the Company are as under :
(a) 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.
(b) As the operations of the Company are presently confined to the geographical territories of India, there are no reportable geographical segments.
B. Independent Directors
Sitting fees paid to nominated/independent directors for the period ended March 2023 is ? 0.30 crore ( previous period :? 0.18 crore)
41.3. Disclosure in respect of Government Controlled Entities
41.3.1. Name of Government controlled entities and description of relationship wherein significant amount of transaction carried out:
*The Management has assessed the above claims and recognized a provision of ? 0.24 crore (PY: Nil) based on probability of outflow of resources embodying economic benefits and estimated ? 748.71 crore (PY: ? 827.48 crore) as the amount of contingent liability i.e. amounts for which Company may be held contingently liable. In respect of such estimated contingent claims either outflow of resources embodying economic benefits is not probable or a reliable estimate of the amount required for settling the obligation cannot be made. In respect of the rest of the claims/obligations, possibility of any outflow in settlement is considered as remote.
e. Contingent liabilities are disclosed to the extent of claims received and include an amount of ^30.53 crore ( 2021-22 ? 23.26 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.
f. A demand of ? 61.43 crore received from SDMC towards property tax of ICD/Tughlakabad whereas as per the opinion of Advocate no provision of property tax was being made in the books earlier and no demand were ever received in this regard. Out of ? 61.43 crore an amount of ? 21.00 crore (2022-23 : ?8.74 crore , 2020-21 : ?10.76 crore & 2019-20 :?1.50 crore) has been deposited with SDMC towards service charge as applicable on other PSU i.e M/s DMRC . Stay order has been granted by H'nable Delhi High Court & Final Order is awaited. ? 40.43 crore has been included in the contingent liability.
g. Disallowance of SFIS Scrips For AY 2013-14 was quashed by Hon’ble ITAT/Delhi and Department has filed appeal against the orders with Hon'ble High Court/Delhi and the same is pending with Hon'ble High Court/Delhi.
Further, Disallowance of SFIS Scrips for the AY 2015-16 was allowed partially by CIT(A) & the company filed appeal against these orders with Hon'ble ITAT/Delhi. The same was fully allowed by ITAT/Delhi in favour of CONCOR in current FY.
(i) “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 ? 5.99 crore for refund of unadjusted advance and ? 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 ? 39.58 Crores and interest @ 15% from date 22.05.2005 to 13.11.2013 amounting to ? 50.37 crore, totalling to ? 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 ? 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 hearng in this case was was held on 03.03.2023 & next Hearing is schedule for 06.07.2023.
(j) The Company has executed "Custodian cum Carrier Bonds" of ? 26,588.19 crore (Previous year: ? 26,253.83 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).
(k) 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.
(a) During the year, the company realised ? 41.84 crore (previous year ? 64.04 crore) (net of auction expenses) from auction of unclaimed containers. Out of the amount realized, ? 9.17 crore ( previous year ? 17.66 crore) is paid/payable as custom duty, ? 32.13 crore ( previous year ? 44.54 crore) has been recognised as income and the balance of ? 0.54 crore ( previous year ? 1.84 crore) has been shown under Current Liabilities.
(b) Current liabilities include ? Nil crore (As at March 31 2022 ? Nil crore) towards unutilised capital grant received for acquisition of specific fixed assets in CONCOR/business arrangements. ? Nil crore has been recognised in the Statement of Profit and Loss for the year ended March 31, 2023 (previous year: ? Nil crore).
(c) Current liabilities include ? 1.82 crore (As at March 31 2022 ? 1.82 crore ) towards unutilised revenue grant received from National Horticulture Board for offsetting the freight for the Horticulture Projects.
(d) Out of the capital grant of ? 56.12 crore (previous year: ? 60.90 crore) , an amount of ? 4.78 crore (previous year: ? 4.78 crore) has been recognised in the Statement of Profit and Loss and the balance of ? 51.34 crore ( previous year: ? 56.12 crore) is shown under other current liabilities.
Works carried out by Railways/its units for the company are accounted for on the basis of correspondence /estimates/advice etc.
India Gateway Terminal (P) Ltd. (IGTPL) is a joint venture of CONCOR with Hindustan Ports Pvt. Ltd & others for setting up and managing of container terminal at Cochin. Though CONCOR’s share in the accumulated losses (as per unaudited financial statements for FY 2022-23) of this JV are as at ? 54.55 crores& does not exceeds its investment of ? 54.60 crores as on 31st March 2023, 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, the company has already made a turnaround. The same is clearly established from the unaudited financial statements of IGTPL for FY 2022-23.
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.
(a) Fresh & Healthy Enterprises Limited (FHEL), is a wholly owned subsidiary of the company. The carrying amount of investment in FHEL as on 31.03.2023 is ? 204.03 crores in the books of the company. As per IND AS 36 “Impairment of Assets”, an entity shall assess through external and internal sources of information that whether there is any indication that an asset may be impaired. There has been improvement in the operations of the company during the year. Further, the management of the company has given detailed plan for future working of
the company and there is no doubt on Going Concern of the company affairs and hence no impairment, as required under Ind AS 36, has been done during FY 2022-23 by the company.
(b) CONCOR Last Mile Logistics Limited (CLMLL), a wholly owned subsidiary of the company was struck off the register of companies by ROC, Delhi vide its notice of striking off and dissolution dated 02.03.2022. Considering the same, company's investment in CLMLL was written off in previous year.
(c) CONCOR Air Limited (CAL) is a wholly owned subsidiary of the company. The carrying amount of company's investment in CAL as on 31.03.2023 is ? 36.65 crores in the books of the company. However, recoverable value of assets of CAL as on 31.03.2023 as per external valuation report is ? 35.40 crore. Accordingly, the company has provided for an amount of ? 1.25 crore as impairment of investment in CAL and the same has been recognised as exceptional item in statement of profit & loss.
(a) In FY 2022-23, an amount of Rs. 19.57 crore (In FY 2021-22 Rs 15.17 crs.) has been utilized on various social activities undertaken including development of aspirational districts adopted by CONCOR by taking up healthcare activities in four districts i.e. Shravasti, Chandauli, Asifabad and Visakhapatnam under CONCOR CSR activities. Apart from above activities in aspirational districts, CONCOR has undertaken various other activities as per its CSR policy and Companies Act 2013. Some of the major projects are related to creating infrastructure for schools and healthcare centre, procurement of medical equipment’s, organisation of health camps, sport facilities upgradation, construction of public toilets, environment activities, installation of solar lights, contribution in Armed Forces Flag Day Fund and Clean Ganga Fund etc.
(v) reason for shortfall,
Some amounts allocated for spending towards CSR could not be utilized during the year, mainly due to not completion of project on time by implementing agencies with whom CONCOR has signed MOU due to various reasons including non-availability of men & material in respect of construction works as well as shortage of required equipments/ goods which are to be supplied by implementing agencies to beneficiaries, etc.
(vi) nature of CSR activities
Company identified the areas of CSR activity as per provisions of schedule VII of Companies Act 2013, which include health & medical care, sanitation, education/literacy enhancement, community development, rural development, environment protection, conservation of natural resources, and infrastructure development.
(vii) No transactions with related parties, e.g., contribution to a trust controlled by the company in relation to CSR expenditure as per relevant Accounting Standard.
(viii) No provision is made with respect to a liability incurred by entering into a contractual obligation.
Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
Details of Benami Property held :-
The Company does not hold any benami property under the Benami Transactions (Prohibition) Act, 1988. and no proceedings have been initiated or pending against the company under the said Act.
The Company does not have any borrowings outstanding as on 31.03.2023 and has not borrowed any funds from banks or financial institutions on the basis of security of current assets during Financial Year 2022-23. Considering the same, the company has not been declared as wilful defaulter by any bank or financial Institution or other lender and no charges or satisfaction are yet to be registered with ROC beyond the statutory period.
Relationship with Struck off Companies:-
The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
The company has complied with provision related to the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013.
The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
The Company does not have any transaction not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961. Further, there were no previously unrecorded income and related assets which were required to be properly recorded in the books of account during the year.
a) Balances of Sundry Debtors, Sundry Creditors and advances to other parties including Railways shown in financial statements are subject to confirmation/reconcilation. In the opinion of the management, there shall not be material liability.
b) Unless otherwise stated, the figures are in rupees crore. Previous year’s figures have been restated, regrouped and rearranged, wherever considered necessary.
Approval of Financial statements
The financial statements were approved for issue by the Board of Directors in its meeting held on 18th May, 2023.
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