Container Corporation of India

(Rs. crore)
                                                 2008-09    2007-08
 
 1.  Contingent liabilities not provided for:
 
 a) Outstanding Letters of Credit & bank guarantees 14.91    45.83
 
 b) Bank guarantees/bid bonds for joint ventures
 /subsidiary                                       220.47   191.67
 
 
 c) Claims against the Company not acknowledged 
 as debt, net of advances/payments under protest, 
 arbitration, court orders, etc.[include claims of 
 Rs.415.05 crore (previous year: Rs.402.65 crore)
 pending in arbitration/courts pursuant to 
 arbitration awards]                               624.52   602.27
 
 
 Contingent liabilities are disclosed to the extent of claims received
 and include an amount of Rs.9.91 crore (previous year:Rs.9.55 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
 and Inland Container Depots (Inland Ports)for assessment years(A.Y.)
 2003-04 to 2006-07 and raised demands of tax and interest totalling to
 Rs.209.08 crore. The company filed appeals before the Commissioner of
 Income Tax (Appeals)[CIT(A)] against the said assessment orders. For AY
 2003-04 to AY 2005-06, CIT(A) allowed claim u/s 80IA towards Rail
 System, whereas for Inland Ports the claim has been disallowed. The
 decision of CIT(A) for 80IA deduction has been upheld by Income Tax
 Appellate Tribunal (ITAT). The company has filed appeals before the
 Honble Delhi High Court against the orders of the ITAT for AY 2003-04
 and AY 2004-05 and for AY 2005-06 the Company is in the process of
 filing appeal. The companys appeal for AY 2006-07 is pending with
 CIT(A).
 
 e) The Assessing officer (AO)has imposed penalty of Rs.26.70 crore
 against the companys claim of deduction u/s 80IA in respect of Inland
 Ports for AY2003-04 to AY2005-06. The company has filed appeals before
 the CIT(A) against the said orders.
 
 2.  a) The Company entered into a contract with Cimmco Birla Ltd. (CBL)
 for supply of 1,500 wagons for Rs.163.90 crore. After the supply of 180
 wagons, the contract was terminated during the FY-2000-01, for
 non-fulfilment of obligations on the part of CBL. The Company invoked
 the Bank Guarantee of Rs.30.42 crore for refund of unadjusted advance
 and Rs.8.20 crore towards performance guarantee for non-fulfilment of
 terms of contract. CBL and the company have made claims and counter
 claims respectively but repudiated by both. The matter had been
 referred to an Arbitration Tribunal and the award of the Tribunal has
 been announced. As per the award, the company paid/provided an amount
 of Rs.19.88 crore during the year 2005-06. This amount has been reduced
 from the claim amount in contingent liabilities. CBL filed an
 application before the Honble Delhi High Court for setting aside the
 remaining part of the award. The company has also filed objections
 before the Honble Delhi High Court for setting aside the award and
 refund of performance security with interest and costs and the matter
 is pending.
 
 b) The company entered into a contract for supply of 1320 wagons by
 Hindustan Engineering and Industries Ltd (HEI). After the supply of
 1050 wagons, the contract was terminated during FY 2004-05, for
 non-fulfilment of obligations 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 crore towards performance guarantee for non-fulfilment of
 terms of contract on the part of HEI. The matter has been referred to
 an Arbitration Tribunal and arbitration proceedings are in progress.
 The amount realized from invocation of performance guarantee stands
 credited to Capital Work In Progress.
 
 3.  The Company has executed Custodian cum Carrier Bonds of
 Rs.18,994.00 crore (previous year: Rs.16,451.00 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.
 
 4.  As in earlier years, the provision for tax for the year is after
 considering tax deduction of Rs.110.78 crore (previous year: Rs.124.18
 crore) under section 80IA of the Income Tax Act, 1961 in respect of
 Rail system & Inland Container Depots (Inland Ports).
 
 5.  Haulage charges for transportation of containers by rail are paid
 on fortnightly basis to Indian Railways at the rates prescribed by the
 Ministry of Railways (MOR) from time to time. Reconciliation of the
 amount paid/payable is done on an ongoing basis periodically and
 difference, if any, is adjusted in the payments for the ensuing
 periods.
 
 6.  i) Income from operations consists of revenue from freight,
 handling, Terminal Service Charges, demurrage and other operating
 income and is net of waivers of Rs.0.22 crore (previous year: Rs. 0.53
 crore).
 
 ii) Terminal & other service charges include expenses for rail freight,
 handling, road transportation and other operating expenses.
 
 7.  i) Loans and Advances include Rs.0.11 crore (previous year: Rs.0.28
 crore) given to Customs & Port Trust.
 
 ii) Loans to employees include Rs.0.08 crore (previous year: Rs.0.13
 crore) being amount due from Directors and officers of the company.
 Maximum outstanding balance during the year was Rs.0.14 crore (previous
 year: Rs.0.18 crore).
 
 iii) During 2007-08, the company gave working capital loan of Rs.27.96
 crore to its wholly owned subsidiary Fresh and Healthy Enterprises
 Ltd.(FHEL). The outstanding balance of the said loan amounting to
 Rs.13.38 crore(including interest accrued upto 30th June,2008 of
 Rs.0.92 crore) has been transferred to advance for issue of shares in
 FHEL.
 
 8.  During the year, the company realised Rs.13.16 crore (previous
 year: Rs.17.84 crore) from auction of undelivered containers. Out of
 the amount realized Rs.3.48 crore (previous year: Rs.5.30 crore) is
 paid/ payable as custom duty,Rs.7.63 crore (previous year: Rs.10.00
 crore) has been recognised as income and the balance of Rs.2.05 crore
 (previous year: Rs.2.54 crore) has been shown under Current
 Liabilities.
 
 9.  Depreciation on assets created on leasehold land is provided in
 line with the accounting policy of the company irrespective of the land
 lease period, as the leases are likely to be renewed/extended.
 
 10.  Current liabilities-others includes Rs.1.57crore(previous year:
 Rs.3.57 crore) towards unutilised grant received for acquisition of
 specific fixed assets in CONCOR/business arrangement. The amount of
 grants received duringthe year are Rs.2.56 crore (previous year:
 Rs.0.06 crore).
 
 11.  Book Overdraft represents cheques issued by the company pending
 clearance against the flexi/other deposits with the banks.
 
 12.  Balances of Sundry Debtors, Loans & Advances, Deposits, Sundry
 Creditors (including Indian Railways), etc. are subject to confirmation
 /reconciliation.
 
 13.  During the year 1998-99, the company gave loan of Rs.2.00 crore to
 Indian Railway Welfare Organization (IRWO) at simple interest of 8.5%
 p.a. in terms of Presidential Directive received from the Ministry of
 Railways. The amount is being repaid as per schedule, and the amount of
 loan outstanding as at 31.03.2009 is Rs.0.40 crore (previous year:
 Rs.0.60 crore).
 
 14.  The auditors remuneration includes an amount of Rs.0.01crore
 (previous year:Rs.0.01 crore), relating to earlier years.
 
 15.  (a) Miscellaneous expenses include loss on sale of fixed
 assets-Rs.6.27 Lakh(Previous Year:Rs.14.15 lakh), provision for damage
 of fixed assets Rs.0.44 Lakh (Previous Year: NIL) and exchange
 fluctuation (loss) Rs.0.10 lakh (previous year: Rs.0.15 lakh).
 
 (b) The wagons and containers damaged in an accident have not been
 written off pending settlement of claim.  The estimated claim
 realized/realizable and provision for loss of wagons totalling to
 Rs.1.36 crore has been adjusted in the accumulated depreciation.
 
 16.  (a) As per the tripartite business arrangement of the company with
 Hindustan Aeronautics Ltd. and Mysore Sales International Ltd. for
 operating air cargo complex at Bangalore (JWG-ACC), an amount of
 Rs.1.91 crore being companys share in the profit of the entity, as per
 unaudited accounts for the year ended 31st March, 2009 (previous year:
 Rs.11.48 crore), has been accounted for under other income.
 
 (b) HALCON is a business arrangement of the company with Hindustan
 Aeronautics Ltd. for operating an Air Cargo Complex and ICD at Nasik.
 An amount of Rs.21.61 Lakhs being companys share of loss in HALCON
 upto 31st March,2009 has been accounted for under Miscellaneous
 expenses.
 
 17.  Works carried out by Railways/ its units for the company are
 normally accounted for on the basis of correspondence
 /estimates/advice, etc.
 
 18.  Land license fee paid/payable to the Indian Railways (IR) is
 calculated on the basis of number of twenty feet equivalent units
 (TEUs) handled in terms of instructions issued by Ministry of Railways
 from time to time. The company lodged claim of Rs.2.82 crore towards
 land license fee paid to Indian Railways for internal movement of empty
 containers during the years 1999-2000 to 2003-04. However, as a matter
 of prudence, the same will be accounted for on receipt/acceptance.
 
 19.  Stores & spare parts include items costing Rs.2.29 crore (previous
 year: Rs.2.29 crore), which have not been consumed during last three
 years.
 
 These items by their very nature are essentially to be kept and are fit
 for their intended use.
 
 20 Remittance in foreign currency for dividend:
 
 The company has not remitted any amount in foreign currency on account
 of dividend during the year.
 
 21.  Pending issuance of notification under Section 441A of the
 Companies Act, 1956, no provision has been made towards cess on the
 turnover of the company.
 
 22.  (a) Information with regard to amount due to SSI units has been
 determined on the basis of information available with the Company and
 relied upon by auditors. To the extent of information available, there
 are no Small Scale Industrial Undertakings to whom company owes an
 amount, which is outstanding for more than 30 days (Previous year:
 NIL).
 
 (b) The Company has not received any intimation from the suppliers
 regarding their status under the Micro, Small and Medium Enterprises
 Development Act, 2006 as at the Balance Sheet date and therefore no
 such disclosures under the said Act have been made.
 
 23. a) As per Presidential Directive received during the year Employees
 Salary and perquisites have been revised w.e.f. 1st January, 2007.
 Pursuant to this revision, an amount of Rs.19.69 crore(previous year
 Rs.11.93 crore) has been paid/provided during the year.
 
 b) Pursuant to DPE circular in respect of 2nd pay committee
 recommendations, the company is in the process of framing a pension
 scheme for its employees. Pending finalization of the scheme, an amount
 of Rs.0.50 crore has been provided on adhoc basis, towards companys
 contribution to the Scheme.
 
 c) The impact of pay revision in respect of custom cost recovery &
 security expenses, etc. payable to the Govt. will be accounted for on
 receipt of claims.
 
 24.  Provisions relating to disclosure of information as required by
 other sub-clauses of Clause-3 of Part-II of Schedule VI to the
 Companies Act, 1956, are not applicable, as the company has no
 manufacturing activity.
 
 25.  During September2007, Company received duty credit entitlement
 scrips amounting to Rs.125 crore under the Served From India Scheme
 (SFIS) of the Government of India. As per the scheme, the scrips can be
 utilized within two years for duty credit for import of capital goods &
 payment of excise duty on domestic purchases. During the year, an
 amount of Rs.30.16 crore (previous year:Rs.8.39 crore) has been
 utilized for custom duty credit on import of capital goods and Rs.33.29
 crore (previous year:Rs.5.06 crore) for excise duty credit on domestic
 purchases, leaving a balance of Rs.48.10 crore (previous year:
 Rs.111.55 crore) as on 31st March, 2009.
 
 26.The Govt. has imposed cess on building and other construction works
 under the provisions of the Delhi Building and Other Construction
 Workers (Regulation of Employment and Conditions of Service) Rules,
 2002, Building and other Construction Workers Welfare Cess Act, 1996
 and Building and Other Construction Workers Cess Rules, 1998. Similar
 cess has also been imposed by some other States. During the year a
 notice was received from the Labour Department at Delhi for payment of
 Rs.46.05 lakhs towards this cess from 1996 onward. Since the Gazette
 notification for levy of cess has been issued in August, 2005,the
 liability from that date amounting to Rs.4.13 lakh has been deposited,
 which is recoverable from the contractors.
 
 27.  The Company has, with effect from 1st April, 2007, adopted
 Accounting Standard 15, Employee Benefits (revised 2005), issued by the
 Institute of Chartered Accountants of India(ICAI). The disclosures as
 required as per the above accounting standard are as under:
 
 (a) Defined Contribution plans:
 
 i) Employers contribution to Provident Fund
 
 ii) Employers contribution to Employees Pension scheme, 1995
 
 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. Since the fair value of the
 assets of the Provident Fund including the returns on the assets
 thereof, as on the balance sheet date is more than the obligations
 under the defined contribution plan as per actuarial valuation an
 amount of Rs.1.99 lakhs (amount provided in Previous year: Rs.7.07
 lakhs) has been reversed in Employers contribution to provident fund
 on this account. During the year, the company has recognized the
 following amounts in the profit and Loss Account.
 
 (i) Employers contribution to Provident Fund - Rs2.31 crore (Previous
 year: Rs.2.64 crore)
 
 (ii) Employers contribution to Employees Pension scheme, 1995 -
 Rs.0.74 crore (Previous year: Rs.0.69 crore)
 
 (b) Defined benefit plans:
 
 Gratuity:
 
 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 trust. The liability
 for the same is recognized on the basis of actuarial valuation.
 
 Leave encashment:
 
 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.
 
 28.  Segment Information as per Accounting Standard-17:
 
 (a) Primary Segments: The company is organized on All-India basis into
 two major operating divisions- EXIM and Domestic. The divisions are the
 basis on which the company reports its primary segment information.
 Both EXIM and Domestic divisions of the company are engaged in
 handling, transportation & warehousing activities.
 
 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 & bank balances, loans & advances,
 other current assets and fixed assets net of provisions. Similarly,
 segment liabilities include all operating liabilities and consists
 principally of sundry creditors, advance 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) Secondary Segments:
 
 As the operations of the Company are mainly confined to the
 geographical territory of India, except some overseas shipping
 transactions, not significant in nature, there is no reportable
 secondary segment.
 
 29.  Related Party Disclosures as per Accounting Standard-18:
 
 b) Joint Ventures:
 
 i.  Star Track Terminals Pvt. Ltd.
 
 ii.  Trident Terminals Pvt. Ltd.
 
 iii.  Albatross CFS Pvt. Ltd.
 
 iv.  Gateway Terminals India Pvt. Ltd.
 
 v.  JWG-Air Cargo Complex (a business arrangement)
 
 vi.  Himalayan Terminals Pvt. Ltd. (Foreign Joint Venture)
 
 vii.  CMA-CGM Logistics Park (Dadri) Pvt. Ltd.
 
 viii.  HALCON (a business arrangement)
 
 ix.  India Gateway Terminal Pvt. Ltd.
 
 x.  Integrated Infra Log Pvt. Ltd.
 
 xi.  Infinite Logistics Solutions Pvt. Ltd.
 
 xii.  Hind CONCOR Terminals (Dadri) Pvt. Ltd.
 
 xiii.  Container Gateway Limited
 
 xiv.  Allcargo Logistics Park Pvt. Ltd.
 
 30.  In the opinion of the management, during the year there are no
 indications that impairment of any asset has taken place. Accordingly,
 no provision for impairment of assets is required as per Accounting
 Standard 28.
 
 31.  a) Unless otherwise stated, the figures are in rupees crores.
 
 b) Previous years figures have been recast/regrouped/rearranged
 wherever considered necessary to conform to this years classification.