Container Corporation of India

The directors are pleased to present their report on the business and
 operations of your company for the financial year ending March 31,
 2008.
 
 Financial Results
 
                                                             (Rs.Crore)
 
 Particulars                                     2007-08        2006-07
 
 Income from operations                          3347.30        3057.34
 
 Profit before depreciation & tax (PBDT)         1054.84         975.83
 
 Profit before tax (PBT)                          948.50         882.25
 
 Provision for tax                                197.98         186.17
 
 Profit after tax (PAT)                           750.52         696.08
 
 Profit available for appropriations              752.21         703.82
 
 APPROPRIATIONS:
 
 Interim Dividend                                  71.49          71.49
 
 Proposed Final Dividend                           97.49          71.49
 
 Corporate tax on dividend                         28.72          22.18
 
 Transfer to general reserves                      75.22          70.38
 
 Balance carried to Balance Sheet                 479.29         468.28
 
 Earnings per share (Rs.)*                         57.87          54.15
 
 * After considering bonus issue of shares after 31.03.2008
 
 Issue of Bonus Shares & Dividend
 
 The Board of Directors in January, 2008 recommended the issue of maiden
 Bonus shares in the ratio of 1:1 to the shareholders of the company.
 Subsequently, an Extra Ordinary General Meeting of the shareholders of
 the Company was convened on 14th March, 2008. The shareholders approved
 increase in the Authorised Share Capital from Rs. 100 Crores to Rs. 200
 Crores divided into 20 Crore Equity shares of Rs. 10/- each and
 approved the issue of Bonus Shares in the ratio of 1:1 i.e. one Bonus
 Share of Rs. 10/- each for every one fully paid up Equity Share of Rs.
 10/- each held by them on the ‘Record Date’ i.e. 17th April, 2008 for
 the purpose of ascertaining the entitlement of the Shareholders for
 Bonus Shares. The Board of Directors of the Company allotted the Bonus
 Shares on 23rd April, 2008 to all the Shareholders, whose names were in
 the Register of Members or in the respective beneficiary accounts with
 their depository participants, as on the Record Date. The Demat account
 of the eligible shareholders was credited for bonus shares as per the
 confirmation provided by CDSL & NSDL on 28th May 2008. For bonus shares
 issued in physical form, the corresponding share certificates were
 dispatched to the addresses of the respective shareholders.
 
 Keeping in view the company’s Capex requirements , the Board recommends
 a final dividend of 75% on the enhanced paid up share capital
 consequent to 1:1 bonus issue. An interim dividend @ 110% on pre-bonus
 issue has already been paid. The total dividend payment for the year
 2007-08 is Rs 168.98 crore as compared to Rs. 142.98 crore (excluding
 dividend tax) for the FY 2006-07.
 
 Financial Highlights
 
 The operating turnover of your company registered a growth of 9.48%
 during the year under review, increasing from Rs. 3057.34 crore in the
 previous year to Rs. 3347.30 crore. Total expenditure increased by
 13.43% & after adjusting the expenditure of Rs 2563.27 crore as
 compared to Rs. 2259.69 crore in the previous year, the profit before
 tax works out to Rs. 948.50 crore, which shows a growth of 7.5 %.
 After making provisions for income tax, prior period/tax adjustments,
 the net profit available for appropriations stands at Rs 752.21 crore,
 which is a growth in net profit of 6.88%. Increase in Profit After Tax
 (PAT) is due to growth in the operating turnover and other income of
 the company.
 
 Operational Performance
 
 Handling Terminals         F/Y 2007-08     F/Y 2006-07    % age Growth
 
 Exim                         19,77,399       17,15,661            15.3
 
 Domestic                      4,70,370        3,89,605            20.7
 
 Total                        24,47,769       21,05,266            16.3
 
 The double digit growth has been sustained in both the business
 segments.
 
 Capital Structure
 
 There is no change in the capital structure, with the Government of
 India continuing to hold 63.09% of the shares, the balance 36.91% being
 held by the public.
 
 Listing and Dematerialization of CONCORs Shares
 
 CONCORs shares are listed with the bourses i.e. Mumbai and National
 Stock Exchanges. The listing fees of both the stock exchanges have been
 paid.
 
 To facilitate dematerialization of shares by its shareholders, CONCOR
 has signed agreements with both the Depositories (NSDL & CDSL).  As per
 SEBI guidelines, CONCORs shares have been placed under Compulsory
 Demat Mode. Out of 2,39,91,496 shares listed on the Stock Exchange,
 2,39,89,403 shares were in Demat mode as on 31st March, 2008.
 
 Capital Expenditure
 
 Capital Expenditure of Rs 220.63 crore approx. was incurred mainly on
 development/expansion of terminals, acquisition of wagons and handling
 equipments etc.
 
 Terminal Network Expansion
 
 During the year under review the work of construction of three new
 terminals at Suranassi ( Jalandhar ), Madhosingh ( Mirzapur ) and
 Durgapur progressed. While the work for Suranassi and Madhosingh has
 been substantially completed and these two new terminals will be
 operationalised shortly, the work of construction of the New Terminal
 at Durgapur is also fairly advanced.
 
 In addition, the works for expansion of capacity in the existing
 terminals at Moradabad, Pithampur ( Indore ), Ratlam , Whitefield (
 Bangalore ) , Amingaon ( Gauhati ) , and Rawtha Road ( Kota ) were also
 taken up. The expansion works at Pithampur and Rawtha Road were
 completed during the year.
 
 High Speed Wagons
 
 During the year 2007-08, 795 high speed wagons were added to the
 existing fleet of CONCOR owned wagons, increasing the holding of high
 speed wagons to 6722 nos.
 
 Containers
 
 The container fleet (owned and leased) as on 31.03.2008 was 13,517
 Containers.
 
 Container Handling Equipment
 
 Fifteen new container handling equipments( Reach Stackers ) were
 commissioned during the year 2007-08 and Five more container handling
 equipments ( Reach Stackers ) were ordered and are expected to be
 commissioned during the 1st quarter of 2008-09.
 
 Information Technology
 
 Your company continued to make progress in the field of Information
 Technology. The VSAT based network have been extended and now it covers
 61 locations. The Terminal Management System for Domestic (DTMS), for
 EXIM (ETMS), ERP for Oracle Financial, HR Payroll was implemented for
 the expanded network of terminals and a Data Warehouse Module for
 commercial applications on centralized architecture is running smoothly
 across field locations/ Regional Offices and Corporate Office. The Web
 enabled Customer Interface through a dedicated Web server is running
 successfully providing facilities to the customers. The Customer
 feedback facility system as implemented on the website enables us to
 constantly evaluate our performance and take corrective action on
 Customer complaints and feedback. A pilot project for Electronic-filing
 of documents on the Commercial system (CCLS) at TKD has also been
 introduced which enables the customers to file their documents
 electronically from their own offices.
 
 Your Company is ISO Certified for Information Security Management
 System (ISO/IEC:27001:2005 Standard) by STQC IT Certification Service
 (Ministry Of Communication & Information Technology), Government of
 India for establishing and maintaining an Information Security
 Management System for CONCOR IT functions covering its business
 applications.
 
 With the considerable advances in IT front, your Company continues to
 be in the forefront of Information Technology, which is being used to
 enhance efficiency, cost competitiveness and customer satisfaction.
 
 Standardisation/ Certifications:
 
 The process of ISO-9001:2000 Quality Systems Certification was taken up
 for Sixteen Offices/ Terminals during the year and the Final
 Certification Audit was carried out by M/s. Quality Management Services
 (an accredited Certifying Agency). The Certification Process has been
 completed by 31st March 2008 and ISO Certification received for all the
 sixteen units.
 
 Joint Ventures/ Strategic Alliances:
 
 a) A total of fourteen other operators were granted licenses by IR to
 run their container train services. Out of the 14 players, as many as
 seven have commenced their train services. Two out of these have an
 alliance with CONCOR and are operating their services from our
 terminals.
 
 b) CONCOR’s Joint Venture for the third container terminal at JNPT with
 Maersk AS has been a resounding success and the JV with Dubai Port
 World for setting up & managing container terminal at Cochin Port
 (Vallarpadam project) has commenced the work of construction for the
 new transshipment terminal.
 
 c) Infinite Logistic Solutions Private Limited (A Joint Venture with
 Reliance Logistics Private Limited) to establish logistic freight
 terminals and to provide the integrated logistic service across the
 country has since become operational.
 
 d) Joint Venture Agreements have been signed with Hind Terminals
 Private Limited and Allcargo Global Logistics Private Limited for
 setting up and running JV CFSs at Dadri.
 
 e) Container Gateway Limited (A JV Company with Gateway Rail Freight
 Private Limited, a subsidiary of Gateway District Parks) for operation
 of existing rail/ road container terminal and setting up of a new
 terminal at Garhi, Harsaru, (Gurgaon ) has since come into existence.
 
 f) HALCON (A Joint working group formed with M/s. Hindustan Aeronautics
 Limited) has finalized an agreement for terminal management at air
 cargo complex, Nasik. The facility has become operational.
 
 Human Resource Management
 
 Your company considers Human Resources as the key factor for the
 success and growth of the organization. CONCOR strives towards employee
 empowerment, growth and development of individuals by realizing their
 potential, encouraging innovative ideas and fair distribution of
 rewards. The following successful measures were taken during the
 financial year to attract and manage talent in CONCOR:
 
 1.  The working strength of the company rose from 1080 to 1134 to meet
 the requirements of expanding business. However, the cost of staff
 continues to remain around 2% of total costs.
 
 2.  Skill Development of the employees was given special attention
 through In-house and external training programmes. In all 870 employees
 underwent training through various development programmes.
 
 3.  CONCOR revised some of the perks as per ongoing comparable market
 prices. Individual and Group Awards were given to boost employee morale
 and encourage excellence at work. The company successfully retained its
 existing human resources and attracted new talent with attrition rate
 remaining below 2.5 percent.
 
 Industrial Relations
 
 Harmonious industrial relations in CONCOR are instrumental in providing
 excellent logistics services to our customers. Industrial relations
 remained peaceful and no man-days were lost during the financial year.
 
 Honours for your Company
 
 Your company has been selected for MOU Excellence award for the year
 2006-07 for the third time in a row as your company had received the
 awards for two successive years i.e 2004-05 and 2005-06 last year. Your
 company has also been selected as the top Indian Company in the
 Shipping and Logistics Sector for the DUN & BRADSTREET-AMERICAN EXPRESS
 Corporate awards, 2007
 
 Foreign Exchange Earnings
 
 Details of total foreign exchange earnings and outgo during the year
 are as under:
 
                                               (Rs. in lakh)
 
 Foreign exchange earnings -
 
 Foreign exchange outgo
 
 a) Import on CIF basis Stores & Spares           12.22
 
 b) Capital Goods / Advances                    4546.25
 
 c) Others                                        38.38
 
 Presidential Directives Received from the Government
 
 No presidential directives were received from the Government during the
 financial year 2007-08.
 
 Rajbhasha
 
 This year, as in the past, there has been considerable progress in
 CONCOR in the use of Hindi particularly in matters relating to
 correspondence. As far as possible the provisions of section 3(3) of
 the Official Language Act have been complied with. Every effort is made
 to correspond with offices situated in A and B regions in Hindi, in
 terms of the Official Language Act.
 
 Quarterly meetings of Official Language Implementation Committee were
 held regularly under the chairmanship of Managing Director to review
 the progress made in promoting use of Hindi in CONCOR and the decisions
 taken therein were complied with.
 
 Hindi Pakhwara was organised from 14th to 28th Sept., 07 in which
 various competitions like Essay Writing & Noting Drafting were held.
 About 70 officers and staff took part in these competitions. Managing
 Director gave away cash & certificates to all the successful officers
 and staff in a function organised on the occasion of closing ceremony
 of Hindi Pakhwara 2007.
 
 During the year, 150 Officers/employees were given Cash Awards for
 doing their work in Hindi under Rajbhasha Purushkar Yojna.
 
 CONCOR was conferred Rajbhasha Sheild by the Town Official Language
 Implementation Committee (Undertakings), Delhi for progressive use of
 Hindi in official work. Also, Bhartiya Sanskriti Sansthan, Delhi
 conferred Rajbhasha Sarthi Sheild to the Managing Director/CONCOR &
 Rajbhasha Prerna Sheild to Hindi Translator for their contribution in
 promotion of Rajbhasha . A literary half yearly Hindi magazine called
 Madhubhashika was introduced during the year under review to
 encourage literary talent of CONCOR staff.
 
 Hindi books of reputed authors are kept in the Library at Corporate
 Office. Number of books has increased to 914. Leading Hindi Newspapers
 as well as monthly and fortnightly magazines continue to be subscribed.
 
 CONCOR’s website is bilingual and all the computers have the facility
 for working bilingually.
 
 Vigilance
 
 With a view to have systems improvements, Vigilance Division continued
 its focus on Preventive Vigilance during 2007-08. Twelve
 Preventive/Surprise Checks and Four Intensive Examinations of major
 works were conducted at various Regional Offices/Inland Container
 Depots/Container Freight Stations and Project works. In addition, 17
 cases were registered/investigated on the basis of complaints and other
 information.
 
 A sum of Rs. 1.3 Crores was recovered from various
 contractors/customers during the financial year. In addition, 10
 improvements in procedures and systems were recommended to various
 functional divisions, on the basis of experience gained through
 preventive examination and other investigations. The system
 improvements have been adopted and implemented resulting into improved
 physical and financial performance in various terminals.
 
 The vigilance Awareness Week was celebrated in the Corporate Office as
 well as in Regional Offices by undertaking various activities.
 Thirteen training programmes, one workshop and two interactive sessions
 were organized in different regions in order to create awareness about
 various aspects of vigilance.
 
 Particulars of Energy Conservation, Technology Absorption etc.
 
 Provisions of Section 217(1) (e) of the Companies Act, 1956 read with
 the Companies (Disclosure of Particulars in the Report of Board of
 Directors) Rules, 1988 regarding conservation of energy, technology
 absorption are not applicable to the Company at this stage.
 
 Directors’ Responsibility Statement
 
 Pursuant to the requirement under Section 217(2AA) of the Companies
 Act, 1956 with respect to Directors Responsibility Statement, it is
 hereby confirmed:
 
 (i) That in the preparation of the annual accounts for the financial
 year ended 31st March, 2008, the applicable accounting standards ` have
 been followed along with proper explanation relating to material
 departures;
 
 (ii) That the directors have selected such accounting policies and
 applied them consistently and made judgements and estimates that were
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company at the end of the financial year and of the
 profit or loss of the Company for the Year under review;
 
 (iii) That the directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956, for safeguarding the assets of
 the company and for preventing and detecting fraud and other
 irregularities;
 
 (iv) That the directors have prepared the accounts for the financial
 year ended 31st March, 2008 on a ‘going concern’ basis.
 
 Particulars of Employees
 
 Section 217(2A) of the Companies Act, 1956 read with the Companies
 (Particulars of Employees) Rules, 1975 is not applicable.
 
 Auditors
 
 M/s. Hingorani M & Co., Chartered Accountants, New Delhi, were
 appointed as Company’s Statutory Auditors for the Financial year 2007-
 08. The Board of Directors’ of the Company fixed an audit fee of
 Statutory Auditors of Rs. 3.50 lakhs (service tax extra).
 
 Board of Directors
 
 During the financial year 2007-08, five meetings of the Board of
 Directors were held for transacting the business of the Company.
 
 Shri Yashvardhan joined CONCOR as Director (International Marketing &
 Operations) w.e.f. 28.09.2007. Shri S.K. Das joined CONCOR w.e.f.
 01.10.2007 as Govt. Nominee Director vice Shri R.K. Tandon. Shri Janat
 Shah, Shri V. Sanjeevi and Shri S. Balachandran joined the Board as
 non-official part-time directors w.e.f. 01.01.2008. Shri Tehmuras R.
 Doongaji joined the Board as non-official part-time director w.e.f.
 04.04.2008.,
 
 The following Directors held the office till the date of Report :
 
 - Shri V. N. Mathur, Part-time Chairman;
 
 - Shri Rakesh Mehrotra, Managing Director;
 
 - Shri Suresh Kumar, Director (Finance);
 
 - Shri Anil Kumar Gupta, Director (Domestic Div);
 
 - Shri Harpreet Singh, Director (Projects & Services);
 
 - Shri Yash Vardhan, Director ( Intl. Mktg. & Ops.)
 
 - Shri S.K. Das, Director
 
 - Shri S.Balachandran, Director
 
 - Shri Janat Shah, Director
 
 - Shri V. Sanjeevi, Director
 
 - Shri T.R. Doongaji, Director.
 
 Retirement of Directors by Rotation
 
 In terms of provisions of the Companies Act, 1956, Shri Rakesh
 Mehrotra, Shri V.N. Mathur and Shri Harpreet Singh, Directors are
 liable to retire by rotation and being eligible, offer themselves for
 reappointment.
 
 Code of Conduct
 
 The Code of Conduct has been laid down for the Board Members and senior
 management. A copy of the same is available on the website of the
 Company.
 
 Based on the affirmation received from Board Members and Senior
 Management Personnel, it is hereby declared that all the members of the
 Board and Senior Management Personnel have affirmed compliance of Code
 of Conduct for the financial year ended on March 31, 2008.
 
 Conclusion
 
 Your Company acknowledges the commitment and dedication of all the
 employees, the support and understanding extended by the Indian
 Railways, Customs, Ports and above all the customers who have continued
 to patronize the services provided by your Company.
 
                            For and on behalf of the Board of Directors
 
 Dated : 12.06.2008                     (V. N. Mathur)
 Place : New Delhi.                       Chairman