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Your directors are pleased to present their report on the business and operations of your company for the financial year ending on 31st March 2015.
Keeping in view the company's Capex requirements, the Board recommends a final dividend of 54% on the paid up share capital of Rs.194.97 crores. An interim dividend @ 80% has already been paid. The total dividend payment for the year 201415 is Rs.261.27 crores as compared to Rs.239.82 crores (excluding dividend tax) for the FY 2013–14, which is an increase of 8.94% over previous year.
The operating turnover of your company registered a growth of 11.82% during the year under review, increasing from Rs.4,984.55 crores in the previous year to Rs.5,573.70 crores in the current year. Total expenditure increased by 14.19%, from Rs.4,072.02 crores in 2013–14 to Rs.4,649.87 crores in 2014–15. The profit before tax worked out to Rs.1,294.45 crores, higher by 0.79% over 2013–14. After making provisions for Income Tax, prior period/tax adjustments, the Net Profit available for appropriations stands at Rs.1047.55 crores, which is 6.38% higher than last year. This increase in Profit After Tax (PAT) is due to growth in the operating turnover and better cost management.
As can be seen, there has been an increase of 8.44% in the throughput. In terms of tonnage also the company carried a total tonnage of 36.18 million tons in current fiscal as against 32.93 million tons in previous fiscal (2013–14), resulting in an increase of around 10%.
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 April 2015, Ministry of Railways, Government of India has transferred 6,013 equity shares to the Central Public Sector Enterprises Exchange Traded Fund (CPSE ETF) as loyalty bonus to retail investors. Therefore, after this transfer now Government of India shareholding in CONCOR has reduced to 61.79% from 61.80% in the previous year and accordingly the balance shares held by public are now 38.21 % which were 38.20% as at the end of previous year.
LISTING AND DEMATERIALIZATION OF SHARES
CONCOR's 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, CONCOR's shares have been placed under 'Compulsory Demat Mode'. Out of 19,49,74,191 equity shares listed on the Stock Exchanges, 19,49,71,773 equity shares were in demat mode as on 31.03.2015. The market capitalization of the company was Rs.30,882 crores as on 31.03.2015 (as per closing price on NSE).
Capital Expenditure of Rs.746.01 crores approx. were incurred mainly on development/expansion of terminals, acquisition of wagons, handling equipments and IT Infrastructure, etc.
TERMINAL NETWORK EXPANSION
D As on 31.03.2015, the Company has total 63 Terminals, of which 13 are pure Exim Terminals, 35 are Combined Container Terminals and 15 are pure Domestic Terminals. During the year the company has strengthened the existing Terminal Network to provide efficient services to its customers. The Company invested approx. Rs.389.95 Crores on infrastructure development/augmentation activities for existing and new terminals.
D Development of fifteen Multi Modal Logistics Parks (MMLPs) is on the anvil. This should help your Company augment its handling capacity.
D In principle approval granted for setting up of green field Private Freight Terminal (PFT) at Vishakhapattnam and Jharsuguda by East Coast Railways and South East Railways respectively.
HIGH SPEED WAGONS, CONTAINERS AND HANDLING EQUIPMENTS
In order to strengthen and improve the service level, during the year under review 765 numbers of BLC and 235 number of BVZI brake van wagons were added to the existing fleet of CONCOR owned wagons, increasing the holding of high speed wagons to 11,754 numbers. Therefore, total wagon (BLC+BLL+BFKN+BVZI) holding has gone upto 13,111 as on 31.03.2015.
As on 31.03.2015 your company has 20,247 (owned plus leased) containers and it also owns 52 Reach Stackers and 17 Gantrycranes.
Your Company continued to make progress in the field of Information Technology. The VSAT based network has been extended and now it covers 73 locations. The Terminal Management System for Domestic–DTMS, for EXIM –ETMS, ERPfor Oracle Financial, HR Payroll, Container Repair System, Operation system was implemented for the expanded network of terminals. 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 actions on Customer complaints and feedback.
Public Grievance lodging and monitoring system has been deployed on CONCOR's website for Grievance Redressal system. This system has been developed in line with the O.M. dated 18.02.2013 of Department of Administrative Reforms & Public Grievances. The objective of the system is to reduce time in addressing Grievance, to increase transparency and round the clock access for lodging and monitoring grievance.
The Electronic–filing of documents on the Commercial System initially provided at ICD/Tughlakabad has now been extended to all EXIM terminals which enables the customers to file their documents electronically from their own offices and on–line payment mode of NEFT/RTGS has been enabled. As part of Business Continuity plan, CONCOR has established Backup Site and Standby system at primary site for its commercial business critical applications. CONCOR has been re–certified ISO/I EC–27001 certification from STQC IT Certification Services (Ministry of Communication & Information Technology) for establishing an Information Security Management System (ISMS).
As an extension of existing HRMS, employee portal has been introduced. This system facilitates employees to access information regarding Salary/reimbursements, leave balance, PF statement, view their APAR online, Online submission of Annual Property return, pension details etc. and employee has the option of viewing the information on the screen and the printout of the same can also be taken for the record .Online payment systems for corporate office and all regions have been implemented from Oracle Financials.
The e–Tender system with e–payment facility for sale and Earnest Money Deposit (EMD) electronically, MSE exemptions has also been introduced. Recruitment on CONCOR's website is integrated with online payment gateway forcollection of fees.
The e–Samarth application for Online Vigilance Clearances to handle bulk NOC request creation and approval and work flow driven system has been evolved. This has increased transparency and drastically reduced the total time of according NOC for various purposes.
The e–Voting was successfully done for CONCOR shareholders and File tracking system was implemented at corporate office of CONCOR.
As a result of commitment of your Company towards Quality Management System, it continues to enjoy ISO 9001:2008 Certification. Quality Policy clearly specifies a consistent improvement of Quality Management System and processes. The Policy has been prominently displayed at all locations of CONCOR. ISO Certification for most of the units of your company has been obtained. The Procedure & the Quality Manual of Quality Management System are being followed for improving processes with an aim to improve productivity and to provide cost effective services to customers in line with the objective of achieving higher customer satisfaction index. In its quest for maintaining high standards of Quality, your Company continues to take various actions during the period under review as follows:
a) There were periodical Management Review Meetings wherein various actions were taken, including Disaster Management, Safety Norms and Quality Standards.
b) There were Quality Audits undertaken by internal trained Quality Auditors from time to time. Special emphasis was made on "Swachh Bharat" campaign in physical cleanliness of the workstation and other places and proper stacking of files, records etc. for positive work environment.
c) There were number of unitsforwhichAnnual Surveillance Audit was undertaken by an independent agency.
d) There were 16 nos. of Terminals for which recertification under ISO 9001:2008 Quality Standards was successfully obtained.
e) Officials at South Central Region and North West Region were imparted training on Quality standards.
f) As on 31.03.2015,58 Terminals (including Corporate Office and 8 Nos. Regional Offices) were ISO 9001:2008 Certified.
JOINT VENTURES/STRATEGIC ALLIANCES
Your company continued to place emphasis on providing total logistics and transport solutions to its customers by exploring the possibilities of expanding the presence of the company in all segments of Logistics value chain in the EXIM as well as Domestic segments. For an inclusive presence Strategic alliances are being firmed up, both for optimal utilization of infrastructure as well as expansion into other segments of the value chain.
Special emphasis is also being given to investments in new lines for capacity augmentation of freight carrying lines of Indian Railway. Towards the same, during the year your company has taken 26% stake in Angul Sukinda Railway Ltd (ASRL), an SPV constructing 104 km. Rail line between the two regions in Odisha which is expected to yield good financial returns other than giving the company direct access to two logistics parks being set up along this line.
SIDCUL CONCOR Infra Company Ltd. (SCICL), a Joint Venture Company with shareholding of 74% and 26% of–CONCOR and State Infrastructure & Industrial Development Corporation of Uttarakhand Ltd. (SIIDCUL) respectively has been incorporated for development of logistics park at vantage points in the state of Uttarakhand. The JVC is developing a MMLP at Pantnagar located approx. 300 mts away from Rudrapur–Haldwani State Highway and at a distance of approx. one km. from the NH–87 with connectivity through a proposed Road Over Bridge (ROB). Rail connectivity for the facility will be from the non electrified Rampur–Kathgodam section of Izzatnagar Division, NE Railways. A new connecting station approx. 8 kms. from Rudrapur City Railway station and 6 kms. from Haldi Road station is being developed as part of project.
Punjab Logistics Infrastructure Ltd. (PLIL), a Joint Venture Company with shareholding of 51% and 49% of CONCOR and CONWARE respectively has been incorporated for development of logistics parks at vantage points in the state of Punjab.
The JV Company is presently in process of developing a Multi Modal Logistics Hub (MMLH) located off Ludhiana –
Malerkotla State Highway at a distance of approx. 20 kms. from the NH–1. Rail connectivity will be planned from single line non electrified Ludhiana – Dhuri – Jakhal section of Ambala Division of Northern Railway which is being developed as a feeder route of the Western DFC. The facility is expected to benefit from double decker carriage of containers at least between Rewari and gateway ports thereby avail advantage of reduced inland haulage costs.
The above two companies i.e. SCICL & PLILare also subsidiaries of your company as it is holding majority of shares in these companies.
WHOLLY OWNED SUBSIDIARIES
CONCOR had incorporated M/s. Fresh and Healthy Enterprises Limited (FHEL) in the year 2006 as its wholly owned subsidiary to create world class cold storage infrastructure in the country, to provide complete cold chain logistics solutions to the various stakeholders in this field.
CONCOR continued to hold 100% of the paid up equity share capital of FHEL. During the financial year 2014–15, the paid up equity share capital of FHEL increased from Rs.76.43 Crores to Rs.145.67 Crores on account of conversion of outstanding loan of Rs.70 Crores due to CONCOR, by issue&allotment of6,92,38,378 equity shares of Rs.10 each at premium of Rs.0.11 per share.
During the year under review, FHELearned operating profit of Rs.1.44 Crores as against operating loss of Rs.20.68 Crores of last year. As on 31.03.2015, accumulated losses of the company stood at Rs.114.36 Crores.
In order to expand its span of operations and establish its presence in the Air cargo business, CONCOR had formed a new SPV (Special purpose vehicle) named CONCOR Air Ltd. in July, 2012. It is a wholly owned subsidiary of CONCOR and has an authorized share capital of Rs.50 crores. The main objective of this venture is to undertake air Cargo related activities in International and Domestic circuit. The overall objective is to contribute in the development of air cargo business of the country by providing end to end solution to the customer through the mode of bonded trucking of import/export cargo from various hinterlands locations, including ICDs, CFS, AFS to the Airports. In addition, it will facilitate the clearance and warehousing of international and domestic air cargo. To achieve its objectives CONCOR Air Ltd. has entered into concession agreement with Mumbai International Airport Ltd. (MIAL) at Chattrapati Shivaji International Airport(CSIA), Mumbai in the field of domestic and international air cargo handling activities. The concession arrangement with MIAL for domestic and international air cargo are as under:
Domestic: In February 2013 it entered into an agreement with MIAL under which SANTACRUZ AIR CARGO TERMINAL (SACT) is being developed by it. SACT will be a State–of–the–art terminal with ultra–modern facilities for storage of cargo, handling, screening, cold storage etc., where it will undertake the operations and management of domestic cargo. Until the SACT gets operational, it has taken over the existing domestic common user terminal of MIAL for operations where it is dealing with the in–bound and out–bound domestic air cargo of airlines viz; Indigo, Spicejet, Go Air, Vistara and is likely to start operations with new airlines and E & M commerce business.
International: it has also entered into concession with MIAL in October, 2013for operations and management of international air cargo business at Air Cargo Complex (ACC), Sahar (Mumbai) for a period of 3 years. It has taken over the operations at ACC in February, 2014 and is handling nearly 34 international airlines at the facility, including some major ones like Malaysian Airline, Sri Lankan, Lufthansa, Cathay Pacific, Emirates, etc.
With the beginning of International as well as domestic air cargo operations at CSIA, Mumbai which is one of the major air cargo terminal in India handling almost 60% of country's air cargo; CONCOR Air Ltd. is heading towards establishing itself well in the air cargo industry. The company hasearned net profit of m.34 crores after tax during 2014–15. As on 31.03.2015, the paid up equity capital of the company stood at Rs.36.65 Crores.
The annual reports of the above four subsidiaries of CONCOR will be available on the website of the company (www.concorindia.com) and will also be available for inspection by any member of the company at the registered office of CONCOR. Further, your company will make available the accounts of its subsidiaries upon request by any shareholder of the company.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company prepared in accordance with the provisions of the Companies Act 2013 and the relevant Accounting Standards (AS) issued by the I nstitute of Chartered Accountants of I ndia forms part of the Annual Report of the Company.
HUMAN RESOURCE MANAGEMENT
Human Resource Management (HRM) function in the organizations is designed to maximize employee performance and is an employer's strategic objectives. HR is primarily concerned with the management of people within organizations, focusing on policies and systems. Being a progressive organisation, CONCOR firmly believes in the strength of its most vital asset i.e. Human Resource.
CONCOR has adopted and aligned its HR strategy vis–a–vis systems & procedures taking into account the business objectives and competence building needed for the organisation. HR strategy acts as a motivating factor for the employees who contribute to the core competence of the organisation to create a match between the company's future needs and the aspirations of individual employees.
Strategic recruitment is the major element through which CONCOR HRM initiates strategic alignment of its corporate goals with that of individual employees' goals. CONCOR plans and reviews its manpower requirements not only on the basis of superannuation and resignation numbers but we primarily focus on upcoming and future requirements of the organisation. Modes of selection are also planned in the same manner.
Right placement and refinement of employees is the primary function after induction by which CONCOR HR maintains alignment of individual performance and goalswiththat of CONCOR Corporate targets.
CONCOR has an exclusive training centre at Gurgaon to cater to employees' developmental needs. We conduct both In–house and Specialised topic based trainings as per organisational and employees needs from time to time. Feedback of employees and reporting authorities is reviewed constructively and accordingly next training calendar is scheduled. During the year, 171 officers were imparted training out of strength of total 280 officers on our rolls as on 31.03.2015. Employees are put to 'On the Job Training Programmes' and are evaluated to get an understanding of the suitability of the employee for his/her right placement and also to understand specific developmental needs of employees.
CONCOR provides wider opportunities for growth to its employees. Being a younger organisation with an average age of employees at 36–40 years, it has formulated a comprehensive Performance Management System (PMS) in order to identify not only the job performance of the employee but also makes an analysis of employee's behaviour and personality traits under various descriptions of personality. It gives an idea of employee's potentiality training and developmental needs and thus contributes majorly to the succession planning of the individual and thereby helps in the analysis of an employee for his placement for a particular job.
With a view to keep our below board level employees/ officers prepared for the future requirement of the organisation, young managers have been placed as the head of the terminals and departments, under Group General Managers and Executive Directors who have been placed as Head of the Regions and departments.
CONCOR HR is a strategic business partner and the attrition rate is below 1.5% owing to CONCOR employee welfare and career development policies.
Sound and healthy Industrial Relations (IR) is the pivot around which the entire business operations revolve. CONCOR believes in community of interests and not in conflicts of interests. Various interest groups strive to further goals in the organisation and resolution of conflicting interests in a positive manner reinforces faith in the system besides imbibing strength to face external threats. CONCOR maintained industrial peace and harmony and no mandays were lost during the year. Positive IR has been the goal of HR department. CONCOR provides two way communication, participative culture, open platforms for discussion for ideas and motivation of the employees.
CONCOR is a Central Government Public Sector Undertaking (PSU). It follows all Government mandates in true spirit. In a recent Parliamentary Committee visit to the company, the Committee was satisfied with the compliance of Government directives on this aspect.
Your company continued to excel in fields of its activities and was a proud recipient of the following awards in the year:
D 'Navratna' status by the Government of India with effect from 23.07.2014 and at present it is the first and only 'Navratna' CPSE of Indian Railways. In this regard, Hon'ble President of India, Shri Pranab Mukherjee felicitated CONCOR on 05.11.2014 at Vigyan Bhawan.
D Felicitation by Economic Times Group Co. (ET Edge) inrecognition of outstanding efforts in Supply Chain Management & Logistics Industry in India. The shield was presented by Hon'ble Minister for Civil Aviation Shri P. Ashok Gajapathi Raju to CMD/CONCOR in Delhi on 25.06.2014.
D SKOCH Order of Merit in the field of Corporate Social Responsibility and Sustainability was conferred to the company on 20.11.2014 by Hon'ble Union Minister, Shri Venkaiah Naidu.
D Proud recipient of the prestigious Dun & Bradstreet – Corporate Awards–2014 being adjudged for the best company in Indian Logistics Services.
D Exim India coveted prize of best Inland Container Depot operator of the year for 2013 in a glittering ceremony in Mumbai.
D Recipient of SUPPLY CHAIN AND LOGISTICS EXCELLENCE AWARDS "SCALE AWARDS – 2013" instituted by CII –Institute of Logistics under Category of "Container Logistics: ICD, CFS, Rail, Logistics Park" on 22.05.2014.
D M/s CARE (CREDIT ANALYSIS & RESEARCH LTD.) has re–affirmed 'CARE AAA(Is)' (Triple A Issuer) for CONCOR and defined it as "Issuers with this rating are considered to offer the highest degree of safety regarding timely servicing of financial obligations. Such issuers carry lowest credit risk".
ENERGY CONSERVATION AND TECHNOLOGY ABSORPTION
The relevant information on conservation of energy and technology absorption stipulated under Section 134 of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, are as under:
For energy conservation and technology absorption, virilization is being done in the servers of major applications, which is the latest technology, with the objective to reduce the hardware, the power consumption and the cooling requirement.
To save power, the multiple servers are also being controlled through single console instead of having the separate monitors, which save power as well as reduce cooling requirement. Most of the CRT monitors have been replaced by LCD/LED monitors, which have reduced the power requirement drastically. Most of the latest CPU/ Monitors / Printers of desktops /laptop are configured in power saving mode. To conserve the energy and to reduce power requirement/ heat dissipation wherever possible, consolidation is practiced as per the requirement.
In addition to above, your company has consulted M/s Energy Efficiency Services Limited, a Joint Venture of PSUs of Ministry of Power, Government of India which has undertaken the energy audit of its unit at Dadri and its recommendations are being implemented.
RESEARCH & DEVELOPMENT (R&D)
Adhering to MOU target for 2014–15 signed between CONCOR & Ministry of Railways, your company completed well before the scheduled date the following studies:
(i) Design of Cargo Logistics facilities at Kathuwas.
(ii) Operation Research Study for evolving better container inventory management at Rail Transshipment Hubs on DFC.
(iii) Study of SFTO policy with a view to ascertaining its benefits and investment options, for CONCOR.
In terms of MOU signed between CONCOR & Ministry of Railways, your company has completed successfully the following targets under CSR & Sustainability:
(i) Completion of EnergyAudit in ICD, Dadri (U.P.).
(ii) Construction of 60 water harvesting tanks in an Apple growing village in Himachal Pradesh (H.P.).
(iii) Coverage of 200 house holds for solar lighting in rural India after baseline survey.
No Presidential Directives were received from the Government during the financial year 2014–15.
There has been considerable progress in the use of Official Language Hindi in Official work of CONCOR. The provisions of Section 3(3) of the Official Languages Act have been fully complied with and letters received in Hindi were also replied in Hindi. All efforts were made to correspond with offices situated in 'A', 'B' and 'C' regions in Hindi as per targets set by the Department of Official Language.
Quarterly meetings of Official Language Implementation Committee were held regularly under the chairmanship of Chairman and Managing Director to review the progress made in promoting use of Hindi in CONCOR and the decisions taken therein were properly implemented. During the year offices of all the regions were inspected by Rajbhasha Adhakari.A total 10 Hindi Workshops were organized to create the interest towards Hindi amongst employee in which 170 officers/ employee have taken part.
Hindi Pakhwara was organized from 12th to 26th September 2014 in which 5 competitions were held. About 120 officials participated in these competitions. The winner of competition were honored with cash prize and certificate. A Kavi Sammelan of famous poet was also organized during the pakhwara to promote Hindi literature. 62 employees were given cash awards for doing their official work in Hindi under 'CONCOR Rajbhasha Puraskar Yojna' for the year 2013–14. Two officials were awarded with Late Dr. Shankar Dayal Singh Smriti Puruskar 2013 for their significant contribution towards promoting Hindi in official work.
The Office organized a 'Vyangya Lekhan' competition for PSU's under the aegis of Town Official Language Implementation Committee (PSU) Delhi on 14th November 2014 in which 24 officials from various PSU's participated.
To assess the progress made in the use of Official Language, Sub Committee of Parliament on Official Language inspected regional office at Mumbai on 07th January 2015. The Committee was satisfied with the efforts made by CONCOR in implementing progressive use of Hindi in its official works.
CONCOR has enriched its library with books of reputed Hindi authors. The Number of books in the Library has increased to 1510. Leading Hindi Newspapers as well as monthly and fortnightly magazines continue to be subscribed. To promote original writing in Hindi and to give a vide publicity of consolidated activities of the company, 'Madhubhasika' a literary magazine continues to be published quarterly. Excellent articles published in this magazine are also suitably rewarded. It is also uploaded on the company's website for public.
CONCOR's website is bilingual and all computers have Unicode facility to work in Hindi.
During the year 2014–15, the main thrust of the vigilance division was to study system, procedures and to suggest to management the improvements required in view of such studies. To achieve this objective, major emphasis was given on preventive and pro–active vigilance campaign, visit to various terminals and making the system transparent and efficient. The Vigilance Department directed its efforts towards disseminating awareness at all levels in the organization. In this context, interaction was held at all levels of functionaries of the company, covering issues of transparency, accountability and integrity.
Fourteen Preventive / Surprise / CTE type Checks at various Regional offices / Inland Container Depots / Container Freight Stations had been conducted. In addition, cases were registered / investigated on the basis of complaints and other information.
During the year 2014, Vigilance Branch studied the working of M/s Fresh & Healthy Enterprises Ltd (FHEL). The study was awarded' Vigilance Excellence Award 2014' by Vigilance Study Circle, Hyderabad in the month of July 2014. This award was given by Central Vigilance Commissioner Shri Pradeep Kumar, at Hyderabad.
A sum of Rs.4.00 crores was recovered from various contractors/ customers during the financial year. Further, an amount of Rs.85.23 lakhs was withheld from the contractor on account of substandard work. In addition, 10 improvements in systems and procedures were recommended to various functional divisions on the basis of experience gained through preventive checks and other investigations. The system improvements have been adopted and implemented, which are aimed at improved physical and financial performance in various terminals.
Suitable penal action was taken against erring officials and contractors.
In order to motivate the employees to be alert in work place, it is important that the vigilant employee is rewarded suitably so that they set example for others. It has been decided to constitute an award for "The Most Vigilant Employee of the Year". This award shall be given every year in the form of shield/trophy bearing the winners name along with citation during the Vgilance Awareness Week.
The Vigilance Awareness Week was observed in Corporate Office as well as in Regional Offices & Terminals by undertaking various activities. 12 training programmes/workshops were organized in different regions in order to create awareness about various aspects of vigilance.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
i) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.
ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are 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 and loss account of the company for that period.
iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.
iv) The Directors have prepared the annual accounts on a going concern basis.
v) The Directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
vi) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
MANAGEMENT DISCUSSION AND ANALYSIS
The detailed Management Discussion and Analysis forms a part of this report at Annexure–A.
CORPORATE GOVERNANCE & GREEN INITIATIVE
Your Company has taken structured initiatives towards Corporate Governance & its practices are appreciated by various stakeholders. Your Company believes in the principle that good Corporate Governance establishes a positive organizational culture and it is evident by responsibility, accountability, consistency, fairness and transparency towards its stakeholders. As per clause 49 of the Listing Agreement with the Stock Exchanges and DPE guidelines on Corporate Governance, a separate report on Corporate Governance practices followed by the Company forms part of this Report at Annexure–B.
A Practicing Company Secretary has examined and certified your Company's compliance with respect to conditions enumerated in clause 49 of the Listing Agreement and DPE guidelines on Corporate Governance. The certificate forms part of this Report at Annexu re– C.
As a responsible corporate citizen and to reduce carbon foot print, your Company has actively supported the implementation of 'Green Initiative'. Electronic delivery of notice of Annual General Meeting (AGM) and Annual Report is being done to those shareholders whose email ids are already registered with the respective Depository Participants (DPs) and downloaded from the depositories i.e. NSDL/CDSL and who have not opted for receiving Annual Report in physical form. Accordingly, unless otherwise desired by the shareholders, the Company proposes to send all documents to the shareholders viz. Notice,
Audited Financial Statements, Directors' and Auditors' Report etc. henceforth in electronic form to their registered e–mail addresses.
BUSINESS RESPONSIBILITY REPORT
For describing the initiatives taken by the companies from Environmental, Social and Governance perspective, SEBI has vide its Circular CIR/CFD/DIL/8/2012 dated 13.08.2012, mandated the top 100 listed entities, based on market capitalisation at BSE and NSE, to include Business Responsibility Report (BRR) as part of the Annual Report. The Stock Exchanges have accordingly amended the listing agreement incorporating therein the provisions for giving BRR by the companies as part of their annual report. The BRR provides a disclosure framework based on National Voluntary Guidelines(NVGs) which maps the company's performance on the nine Principles and Core elements. Accordingly, in compliance to the said circular &provisions of listing agreement the Business Responsibility Report (BRR) is contained in a separate section in the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
CONCOR has been working towards sustainable development of all its stakeholders by undertaking various welfare activities under its CSR initiatives. As per new Companies Act 2013, CONCOR has formulated its CSR policy for the benefit of different segments of the society, specifically the deprived, underprivileged and differently abled persons, groups, entities, etc. CONCOR has two Tier CSR Committee system for implementing it's CSR activities. The Tier–I committee is headed by Chairman & Managing Director including One Independent Director as it's member. The Tier–II committee is headed by ED(MIS& CSR) including two other senior officers & assisted by Sr. Manager (OL&CSR).
Under CONCOR's CSR policy various thrust areas have been identified which are in accordance with the provisions of Companies Act, 2013 and include health & medical care, education/literacy enhancement, community development and rehabilitation measures, environment protection, conservation of natural resources, natural calamities and infrastructure development, etc.
CONCOR has executed it's major projects in the area of education, health, skill development & environment sustainability. Some of it's CSR initiatives are as under:
D Support towards constructing classrooms in six schools of GANJAM District in the state of Odisha which witnessed havoc of cyclone 'Phailin' for the benefit of school children. Assistance was provided to ITI Srinagar and Pantnagar
Polytechnic in the State of Uttrakhand towards infrastructural development which got damaged in Uttrakhand cloudburst. Financial help has also been extended to Odisha State Disaster Management Authority (OSDMA) for construction of two cyclone shelters in Balasore district of Odisha which is prone to frequent cyclone.
D For it's commitment towards conservation of environment it has taken up projects for rainwater harvesting, solar energy, etc. in association with The Energy & Resource Institute (TERI) in the state of Himachal Pradesh. In Himachal Pradesh, 120 Apple growing farmers have been provided rain water harvesting tanks including various equipments like anti hail nets, power sprayers, pruners, planting material of high apple yielding varieties, etc. as well as technical training that will help them in increasing their Apple yields in the districts of Shimla & Kullu. Nearly three thousand farmers will benefit from this activity.
D In order to improve the lives of villagers of un–electrified villages of Jodhpur and Sirohi district of Rajasthan which include a large segment of underprivileged section of society, company has undertaken a project to provide two point home lighting solar lights, mobile charger facility, solar lalterns to 3600 families in association with Central Electronics Limited, a Central PSU of Government of India.
D Realizing the importance of providing education to girl child in society, it has provided infrastructural support to a girl inter Collage in Gautambudh Nagar, U.P. by way of constructing rooms, toilet blocks, providing computers, books, etc. which will help 500 girls to continue their study.
D CONCOR is also well aware with it's responsibility of bringing the marginlised, weaker section of society into the main stream. In this direction, it has taken up a project for the dependants of Safai Kramcharis by sponsoring their skill development training with the help of National Safai Kramchairis Finance Development Corporation (NSKFDC) wherein 240 such dependents are undergoing skill development training in garment sector with a provision of their suitable placement.
D Company has been proactive towards providing better health to its' stakeholders & people residing near it's operational area. For this purpose, it hasorganized 100 health camps at it's 29 major terminals ranging from Tuglakabad (Delhi) to Tondiyarpet (Chennai) and Amingaon (Assam) to Khodiyar (Ahemdabad) to cover all parts of country to provide preventive health care facility to its stakeholders on quarterly basis through which nearly 21,923 stakeholders have been benefited, including deprived classes of society. These activities have been carried out with the association of reputed organizations in the field. Near & distance vision spectacles are distributed free of cost to beneficiaries in such camps.
D Assistance to violence affected children in persuing their studies in the districts of Doda, Kulgam, Pulwama and Srinagar in the state of Jammu & Kashmir and Churachandpur and Thamenglong districts of Manipur in which nearly 585 such children studying upto class XIIth standard have been provided assistance to enable them to continue their studies.
D In order to provide skill development training to 2,220 youths of backward classes, Company has entered into a MOU with National Backward Classes Finance Development Corporation who will provide training to these youths in the field of Apparel Production Supervision and Quality Control (APSQC), Garment Construction Techniques (GCT), Industrial Sewing Beneficiary Children at a function organized by NFCH Machine Operation (Basic and Advance) (ISMO–B&A) in the states of Uttar Pradesh, Punjab, Haryana, Karnataka, TamilNadu, Kerala, Andhra Pradesh, West Bengal, Odisha, Bihar, Jharkhand, Manipur, Madhya Pradesh, Gujarat and Chhatisgarh.
D Under Swachh Bharat Abhiyan, Company has contributed an amount of Z3.5 crore to 'Swachh Bhart Kosh' set up by Govt. of India towards construction of toilets in schools. Besides company has also taken up construction of toilets in the states of Rajasthan, Tamilnadu and Haryana. Considering the respect the river Ganga commands among people of country, CONCOR has contributed an amount of Rs.3.50 Crore towards rejuvenation of river Ganga in Clean Ganga Fund setup by Govt. of India.
D In order to provide solar lights to weavers of Sant Ravi Das Nagar of Uttar Pradesh 1,000 solar street lights are being installed to illuminates the lives of weaversand those who workin Carpet Industry.
Out of the funds allocated towards CSR Expenditure for FY 2014–15, an amount of Rs.20.56 crores had been disbursed towards various CSR activities. The unspent amount in terms of Companies Act, 2013 is being carried forward and the same will be spent in the following year and the particulars in this regard are furnished in the Annual Report on CSR activities as per Annexure–Dto this report.
CONCOR is committed to implement its CSR policy in letter & spirit by taking up various welfare projects including environment sustainability for the betterment of it's stakeholders as well as weaker sections of the society to enable them to grow and prosper together.
As per the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee. The particulars of Committee are stated in the Corporate Governance Report forming part of this Report. The Company has a well laid down Risk Management (RM) system to identify, evaluate risks and opportunities. This said system seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The risk management system defines the risk management approach across the enterprise in various business activities including documentation and reporting. The RM structure has different risk models which help in identifying risks trend, exposure and potential impact analysis at Company level and also separately for business segments. It forms an integral part of the Company's functioning and the Board of Directors are being regularly apprised about the status of various riskelements and the mitigation plans for the same.
INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY
CONCOR's Internal Control Systems are commensurate with its size, scale and complexity and nature of its business activities. Internal audit constitutes an important element in overall internal control systems of the company. The scope of work of the internal audit is well defined and is very exhaustive to cover all crucial functions and businesses of the company. The internal audit in the company is carried out by the independent professional firms appointed for this purpose.
The respective department of the company monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems and accounting procedures and policies. Based on the report of internal auditors' necessary steps are taken at regular intervals to further strengthen the existing systems and procedures.
The significant observations of internal auditors and corrective actions thereon are presented to the Audit & Ethics Committee of the Board at regular intervals.
PARTICULARS OF EMPLOYEES
The information required in accordance with the provisions of Section 197(14) of the Companies Act, 2013 read with the Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is NIL, as no employee has drawn remuneration in excess of amount specified in said Rules. Further the disclosure in the board report under rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is as per Annexure–E and forms part of this report.
Being a Government Company, the Comptroller &Auditor General (C&AG) of India had appointed M/s. Kumar Vjay Gupta & Co., Chartered Accountants as Company's Statutory and branch/Regional Auditors for the financial year 2014–15. The statutory auditors were appointed by C&AG vide its letter CA.V/COY/CENTRAL GOVERNMENT,CCIL(9)/276, dated 31.07.2014. The Statutory Auditor of the company is being paid an audit fee of Rs.3,30,000/–. The Statutory Auditors have audited the Annual Financial Statements of the Company for the financial year ended 31.03.2015.
The comments of the Comptroller and Auditor General (C&AG) of India, through letter PDA/R–C/PSU/32–5/CONCOR/2014–15/277 dated 18.07.2015 on the Audited Financial Statements of your Company for the financial yearended 31.03.2015 under the Companies Act, 2013 have been received. The Comments of C&AG for the financial year 2014–15 along with the Statutory Auditors Report of your company have been placed elsewhere in this Annual Report.
BOARD OF DIRECTORS
During the financial year 2014–15, five meetings of the Board of Directors were held for transacting the businesses of the Company. During the year and upto the date of this report, the directorship in the company are under:
• Shri Anil Kumar Gupta, Chairman and Managing Director [DIN: 00066328]
• Shri Harpreet Singh, Director (Projects & Services) (upto 30.09.2014) [DIN: 00659703]
• Shri Yash Vardhan, Director (Intl. Mktg. & Ops.) [DIN: 01842119]
• Dr. P. Alli Rani, Director (Finance) &CFO [DIN: 02305257]
• Shri Arvind Bhatnagar, Director (Domestic Division) [DIN: 03564703]
• Shri V. Kalyana Rama, Director (Projects & Services) (w.e.f. 03.06.2015) [DIN: 07201556]
• Shri Manoj K.Akhouri, Director[DIN: 02293829]
• Shri N. Madhusudana Rao, Director (w.e.f. 16.10.2014)[DIN:06993802]
• ShriSudhirMathur, Director[DIN: 00168155]
• Shri Pradeep Bhatnagar, Director[DIN: 00196664]
• Shri M.P. Shorawala, Director[DIN: 02754082]
• Lt. Gen.(Retd.)Arvind Mahajan, Director (upto 12.05.2014) [DIN: 02410540]
• Dr. (Professor) A.K. Bandyopadhyay, Director (upto 12.05.2014) [DIN: 03184953]
• Dr. (Professor) KausikGupta, Director (upto 12.05.2014) [DIN: 03557162]
• Shri DeepakGupta, Director (upto 22.11.2014) [DIN: 05333960]
The tenure of three independent directors namely Lt. Gen.(Retd.)Arvind Mahajan, Dr. (Professor) A.K. Bandyopadhyay and Dr. (Professor) KausikGupta who were appointed by Ministry of Railways was over on 12.05.2014 and another independent director Shri Deepak Gupta had resigned from the board of the company w.e.f. 22.11.2014. CONCOR being a Government company, the independent directors on its board are appointed by the Ministry of Railways from time to time. Accordingly, CONCOR had already requested Ministry of Railways for appointment of new independent directors in place of the above four independent directors who has either resigned or whose tenure has ended during the year.
RETIREMENT OF DIRECTORS BY ROTATION
As per the Companies Act, 2013 the provisions in respect of retirement of Directors by rotation will not be applicable to Independent Directors. In view of this, no Independent Director are considered to be retiring by rotation but all other directors will be retiring by rotation. Accordingly, one third among all other directors namely Shri Anil Kumar Gupta and Dr. P. Alli Rani are liable to retire by rotation and being eligible, offer themselves for reappointment.
EVALUATION & REMUNERATION
CONCOR is a Government Company under the administrative control of Ministry of Railways. The selection procedure for the all the directors is also laid down by the Government of India and all the directors of the company have been appointed in accordance with the said procedure. The functional directors including CMD are selected on the recommendations of PESB in accordance with the procedure and guidelines laid down by Govt. of India. Its Board of Directors are appointed by Ministry of Railways and there is system and procedure laid down by Department of Public Enterprises for evaluation of its functional directors including Chairman and Managing Director. The evaluation framework for assessing the performance of functional directors comprises of the following key areas:
D Performance of the company under the MOU signed with Ministry of Railways. D Performance with respect to the targets fixed for the respective director.
D The evaluation include self evaluation by the respective board member and subsequent assessment by CMD for the functional directors and thereafter final evaluation bythe Ministry of Railways, the administrative ministry.
D In respect of CMD also the evaluation includes self evaluation and final evaluation bythe Ministry of Railways.
The independent directors have also evaluated all other board members of the company and the same was found to be satisfactory.
In respect of Government nominee directors their evaluation is done by the Ministry of Railways as per the procedure laid down. The evaluation of independent directors, the board and its committees is done bythe board of the company.
The induction of officers at below board level is made by way of promotion and/or lateral entry by way of deputation/immediate absorption of the officials from Ministry of Railways and other PSUs.
The performance of below Board Level Officials at Group General Manager and Executive Director grades is evaluated on the basis of the achievement of MOU targets as approved by Administrative Ministry and DPE. The performance of Functional Directors is evaluated bythe Administrative Ministry i.e. Ministry of Railways.
CONCOR follows a robust Performance Management System (PMS) in compliance with the DPE instructions for evaluation of performance of its officials in Sr. General Manager and below grade. Format for evaluation comprises broad parameters for assessment of personal traits of the officials such as integrity, communication, cost consciousness, planning and organizing, job knowledge, continuous improvement, people management, collaboration, initiatives etc. and contribution of the official towards financial performance of the organization. The Key Result Areas (KRAs) are proposed by the appriasee and approved by appraiser in the beginning of the year which is subject to mid year review for further modification/improvement, if any. The officials are rated on scale of 1 –5 and Bell Curve approach is followed for payment of Performance Related Pay (PRP) as per DPE guidelines/instructions in this regard, suitably modified on the basis of ASCI (Administrative Staff College of India) recommendations for your company.
CONCOR being a Government company the remuneration payable to the its functional directors, including CMD, senior management officials and all other employees is in accordance with the guidelines issued by Department of Public
Enterprises (DPE) in pursuance of recommendations of the committee on pay revision. For fixation of remuneration at workmen level, CONCOR adopts collective bargaining method with registered trade union of workmen. For supervisors & officers, pay scales have been designed in a progressive way and all statutory compliances in this regard are being adopted and followed. It is being taken care of that no employee gets stagnated.
The Nomination & Remuneration Committee has taken note of the remuneration policy of the company and the procedure and policy for selection of the Directors, Senior Management and their remuneration.
RELATED PARTY TRANSACTIONS
The related party transactions that were entered into during the year were on an arm's length basis and were in the ordinary course of business. Prior omnibus approval of the Audit & Ethics Committee is obtained on a quarterly basis for the related party transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are placed before the Audit & Ethics Committee and the Board of Directors on a quarterly basis. The policy on related party transactions, as approved by the Board is uploaded on the Company's website at
http://www.concorindia.co.in/ CONCOR Policy MRPT.pdf. Though there are no materially significant related party transactions entered by the company, the particulars required under section 134(3) of the Companies Act 2013 are as per Annexure–F to this report.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s RK & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report from the auditor is annexed as Annexure–G to this report.
The Secretarial Auditor as well as the Auditor who has given Corporate Governance Compliance certificate had observed that the company is not having adequate number of independent directors. The remarks of the directors on the same elaborating the steps taken in which requests have been made to Ministry of Railways for filling up the vacancy of four independent directors has been stated in this report elsewhere.
EXTRACTOF ANNUAL RETURN
The particulars forming part of the extract of the Annual Return in the form MGT– 9 is annexed as Annexure–H.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Container Corporation of India Ltd. (CONCOR) prohibits any kind of Act of Sexual Harassment at Work Place and included the acts amounting to Sexual Harassment at Workplace in its Conduct Rules and Certified Standing orders (as certified in 1998) and Discipline &Appeal Rules so as to prohibit any such Act. CONCOR constituted an Internal Complaints Committee in the year 2003 to receive and investigate complaints related to "Sexual harassment at workplace" following the guidelines issued by Hon'ble Supreme Court of India in "Visakha Vs. State of Rajasthan". The then committee included Senior Officer with Executive Director as its chairperson.
The company has re–constituted the Internal Complaints Committee consisting of four members at the level of Group General Manager & above including one external female member who is practising advocate on records of Hon'ble Supreme Court of India. Director (Finance) is the Chairperson of the committee. The company has also amended its Conduct rules to widen the scope of acts amounting to sexual harassment as per the Sexual Harassment of women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013. CONCOR has 154 female employees out of total 1335 employees. The company has created a conducive work environment free from any kind of harassment.
Only one anonymous complaint was received during the year 2014–15 which was found to be false on investigation by the Committee and was therefore closed by the Committee. The outcome of the complaint was also informed to National Commissionfor Women.
CEO & CFO CERTIFICATION
Certificate from Shri Anil Kumar Gupta, Chairman and Managing Director and Dr. P. Alli Rani, Director (Finance) & CFO, pursuant to provisions of Clause 49 of the Listing Agreement, for the year under review was placed before the Board of Directors of the Company at its meeting held on 28.05.2015. A copy of the certificate on the financial statements for the financial year ended 31st March, 2015 is annexed along with this Report.
CODE OF CONDUCT
The Code of Conduct has been laid down for the Board Members and senior management. Acopy 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 31.03.2015.
Your Directors express their gratitude for continued co–operation, support and guidance in effective management of company's affairs and resources provided by Government of India, in particular the Ministry of Railways, Customs, Ports and above all the customers who have continued to patronize the services provided by your Company.
The Directors also place on record their sincere appreciation for the continued support and goodwill of the esteemed Shareholders, Institutions, State Governments where company operates or is planning to expand its business and all other agencies who have helped your company in delivering excellent performance.
Your Directors acknowledge the constructive suggestions received from Statutory Auditors and Comptroller and Auditor General of India and are grateful for their consistent support and help.
Your Directors would like to place on record its deep and sincere appreciation for the hard work, dedication, valuable contribution and unstinted efforts by the company's employees in steering the company to excellent performance and ensuring that it achieves greater milestones and scales the newer pinnacle of success.
For and on behalf of the Board of Directors
(Anil Kumar Gupta)
Chairman & Managing Director
Place: New Delhi