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Container Corporation Of India Ltd.

BSE: 531344 Sector: Others
NSE: CONCOR ISIN Code: INE111A01025
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OPEN 518.00
PREVIOUS CLOSE 521.80
VOLUME 1551
52-Week high 568.80
52-Week low 433.16
P/E 27.33
Mkt Cap.(Rs cr) 31,556
Buy Price 517.65
Buy Qty 68.00
Sell Price 518.60
Sell Qty 90.00
OPEN 518.00
CLOSE 521.80
VOLUME 1551
52-Week high 568.80
52-Week low 433.16
P/E 27.33
Mkt Cap.(Rs cr) 31,556
Buy Price 517.65
Buy Qty 68.00
Sell Price 518.60
Sell Qty 90.00

Container Corporation Of India Ltd. (CONCOR) - Auditors Report

Company auditors report

TO THE MEMBERS OF

CONTAINER CORPORATION OF INDIA LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of CONTAINERCORPORATION OF INDIA LIMITED ("the Company") which comprise the BalanceSheet as at 31 March 2018 the Statement of Profit and Loss (including othercomprehensive income) the Cash Flows Statement and the statement of changes in equity forthe year then ended and a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as "the Standalone FinancialStatements").

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance (including other comprehensive income)cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standardsspecified in the Companies (Indian Accounting Standards) Rules 2015 (as amended) underSection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. While conducting our audit we have taken into account the provisionsof the Act the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules made thereunder and the order issued under section 143(11) of the Act.

We conducted our audit of standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2018 its profit (including other comprehensive income) its cash flows andthe changes in equity for the year ended on that date.

Emphasis of Matter

1. We draw attention to the Note no. 53 to the standalone financial statements of 31March 2018 which describe investment of Rs54.60 Crore in equity of IGTPL a joint venturein which the company hold 14.56% equity whose net worth has been fully eroded. Managementhas not recognized any impairment in the value of the assets as in the opinion of themanagement the expected present value of future cash flows exceeds the carrying amount ofthe asset.

Our opinion is not modified in respect of this matter.

2. We further draw attention to the Note no. 54 to the standalone financial statementsof 31 March 2018 regarding non provision for impairment in the value of investmentamounting to INR 146.62 Crores in equity of M/s Fresh & Healthy Enterprises Limited(FHEL) a wholly owned subsidiary company whose net worth has been fully eroded.Management has not recognized any impairment in the value of the assets on account offuture revival business plan and committed investment as in the opinion of themanagement the expected present value of future cash flows of the restructured businessplan exceeds the carrying amount of the asset.

Our opinion is not modified in respect of this matter.

Other Matters

We did not audit the financial statements/information of 8 regions included in thestandalone financial statements of the Company whose financial statements/financialinformation reflect total assets of Rs 3027.90 Crore as at 31 March 2018 and totalrevenues of Rs5946.40 Crores for the year ended on that date as considered in thestandalone financial statements. The financial statements/information of these regionshave been audited by the branch auditors whose reports have been furnished to us and ouropinion in so far as it relates to the amounts and disclosures included in respect ofthese regions is based solely on the report of such branch auditors.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inthe paragraph 3 and 4 of the Order.

2. As required by Section 143(5) of the Act we give in the "Annexure B" astatement on the matters specified in the Directions issued by The Comptroller and AuditorGeneral of India and in our opinion no action is required to be taken thereon and thereis no impact on the accounts and financial statements of the Company.

3. As required by Section 143 (3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books and proper returnsadequate for the purpose of our audit have been received from the branches not visited byus.

(c) The reports on the accounts of regions of the company audited under section 143 (8)of the Act by branch auditors have been sent to us and have been dealt with in preparingour report in the manner considered necessary by us.

(d) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Cash Flow Statement and the statement of changes in equity dealt with by thisReport are in agreement with the books of account and the returns received from the branchnot visited by us.

(e) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards specified in the Companies (Indian Accounting Standards)Rules 2015 (as amended) under Section 133 of the Act.

(f) On the basis of the written representations received from the directors as on 31March 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2018 from being appointed as a director in terms of Section164 (2) of the Act.

(g) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure C"; Our report express an unmodified opinion on theadequacy and operating effectiveness of the company's internal financial control overfinancial reporting.

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. the Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements-refer note no.-41 to the standalonefinancial statements of 31 March 2018;

ii. the Company is not required to make any provision for any material foreseeablelosses under any law or Indian Accounting Standard on long terms contracts. Also theCompany is not dealing into derivatives contracts and

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the company.

For Arun K Agarwal & Associates
Chartered Accountants
(Firm's Registration No. 003917N)
Sd/-
Satish Gulati
Place: New Delhi (Partner)
Date: 30 April 2018 M. No. 083897

Annexure A to Independent Auditors' Report

Referred to Paragraph 1 under the heading of "Report on Other Legal and RegulatoryRequirements" of our report of even date

i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management in a phasedmanner designed to cover all the items over a period of three years which in ouropinion is reasonable having regards to the size of the company and nature of itsbusiness. Pursuant to the programme a portion of the fixed assets has been physicallyverified by the management during the year and no material discrepancies were noticed onsuch verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except for items mentioned below:

(Rs in crores)
Details of Property Net Amount
RO Premises at Egmore Chennai 1.72
Staff Quarters at Chennai 1.08
Residential Flats Kolkata 0.52
Jangpura-Building 0.85
Leasehold Land-MMLP Vishakhapatnam 90.08
Freehold land Krishnapatnam Port 31.07
Land at Village Bhavri 0.04
Land at Vatera 0.64
Jangpura-Land 0.44
Leasehold Land at Kadakola 19.18

ii. The Company has carried out physical verification of inventory at a reasonableintervals and no material discrepancy were noticed during such verification.

iii. The Company has granted unsecured loans to 2 wholly owned subsidiary companiesi.e. M/s Fresh & Healthy Enterprises Limited (FHEL) and M/s CONCOR Air Limited.

(a) In our opinion and according to the information and explanations given to us theterms and conditions of the grant of such loans are not prejudicial to the company'sinterest;

(b) Payments of interest are regular in respect of CONCOR Air Limited. Howeversubstantial payment of interest in case of FHEL is not regular. The borrower entity (FHEL)is not in a capacity to pay interest and principal as per stipulated terms. The due dateof the loan and interest has been extended period after period to avoid default in theaccount.

(c) Interest amounting to INR 15.14 Cr is overdue in relation to loan to FHEL for morethan ninety days. According to the information and explanations given to us the companyis following up the recovery of overdue amount.

iv. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans investments guarantees and security as applicable

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Companies Act 2013 and Rules framed there under.

vi. As per the information and explanations given to us the maintenance of costrecords has not been prescribed by the Central Government under section 148(1) of theCompanies Act 2013 for services rendered by the company.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of the books of account of the company except Building & Otherconstruction Worker Cess of Rs1.99 Crores is outstanding as on 31 March 2018 for a periodof more than six month from the date it became payable amount deducted/accrued in thebooks of account in respect of undisputed statutory dues including Provident Fund IncomeTax Sales tax Service Tax Custom Duty Value Added Tax Cess and any other statutorydues have generally been regularly deposited during the year by the company withappropriate authorities.

(b) According to the information and explanations given to us the following dues ofIncome tax water tax and service tax have not been deposited by the company on account ofdisputes:

(Rs in crores)

Name of Statue Nature of Dues Forum where dispute is pending Period to which amount relates Amount
1 Finance Act 1994 Service tax CESTAT Bangalore CCE CCE (Appeals) September 2002 to June 2008 1.48*
2004-05 0.11
January 2004-March 2004 0.02
CCE 2005-06 0.20
2 Income Tax Act 1961 Income Tax Supreme Court A.Y. 2003-04 5.30
A.Y. 2004-05 9.64
A.Y. 2005-06 11.99
A.Y. 2007-08 24.75
High Court A.Y. 2008-09 48.13
A.Y. 2009-10 113.68
ITAT Delhi A.Y. 2008-09 96.59
A.Y. 2010-11 121.08
A.Y. 2011-12 165.80
A.Y. 2012-13 159.27
A.Y. 2013-14 107.31
A.Y. 2014-15 19.70
CIT (Appeals) A.Y. 2015-16 167.41
ITO (Income Tax Officer) A.Y. 2006-07 0.69
3 Jal Sansthan Kanpur Water Tax Allahabad High Court 2000-01 to date 0.69

* one third share of the total disputed amount

viii. The company has not defaulted in repayment of loans or borrowing to a financialinstitution bank Government or dues to debenture holders during the year.

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable to the company

x. According to the information and explanation given to us by the management and basedthe audit procedures performed no material fraud by the company or on the Company by itsofficers or employees has been noticed or reported during the year.

xi. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable to the company.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable to the company.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable to the company.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Arun K Agarwal & Associates
Chartered Accountants
(Firm's Registration No. 003917N)
Sd/-
Satish Gulati
Place: New Delhi (Partner)
Date: 30 April 2018 M. No. 083897

Annexure B to Independent Auditors' Report

Referred to Paragraph 2 under the heading of "Report on Other Legal and RegulatoryRequirements" of our report of even date

According to the information and explanations given to us we report as under:

S.No. Areas Examined Observations/Findings
1. Whether the company has clear title/lease deeds for freehold and leasehold land respectively? If not please state the area of freehold and leasehold land for which title/lease deeds are not available. Based on our observations and branch auditors reports the Company has clear title/ lease deeds for freehold and leasehold Land respectively except 6 as mention below where some of the compliances to establish clear title/execution of lease deed in favour of the company are pending
Details of Property Area
Leasehold Land-MMLP Vishakhapatnam 98 Acres
Freehold land Krishnapatnam Port 141.95 Acres
Land at Village Bhavri 1.50 Bigha
Land at Vatera 30.05 Bigha
Jangpura-Land 405.59 Sq. mtr.
Leasehold Land at Kadakola 55.55 Acres
2. Whether there are any cases of waiver/write off of debts/ loans/ interest etc. if yes the reasons there for and amount involved. Yes there were waivers of terminal service charges amounting to `572562/- during the F.Y. 2017-18. It is reported to be business practice being followed by the company. Further interest amounting to Rs468911/- has been reduced due to reduction in interest rate as per the approval of competent authority. in relation to the loan to wholly owned subsidiary Rs113731/- towards doubtful debts has been written off during the F.Y. 2017-18 as per the approval of competent authority.
There are refunds of terminal service charges amounting to `34949784/- and warehousing charges amounting to `424810/- during the year which are duly approved by competent authority.
3. Whether proper records are maintained for inventories lying with third parties & assets received as gifts/grants from the Govt. or other authorities. (a) There are no inventories lying with third parties.
(b) The company has not received any assets as gifts from Govt. or other authorities. Proper records have been maintained in case of grant received.
For Arun K Agarwal & Associates
Chartered Accountants
(Firm's Registration No. 003917N)
Sd/-
Satish Gulati
Place: New Delhi (Partner)
Date: 30 April 2018 M. No. 083897

Annexure C to Independent Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of CONTAINERCORPORATION OF INDIA LIMITED ("the Company") as of 31 March 2018 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Arun K Agarwal & Associates
Chartered Accountants
(Firm's Registration No. 003917N)
Sd/-
Satish Gulati
Place: New Delhi (Partner)
Date: 30 April 2018 M. No. 083897