container corporation of india ltd Management discussions


Indian Railways registered a marginal increase of 6.63% in originating loading of cargo, from 1,418.10 million tonnes in 2021-22 to 1,512.07 million tonnes in 2022-23. While, originating containerized cargo transported by rail has increased from 74.35 million tonnes in 2021-22 to 79.45 million tonnes in 2022-23 reflecting an increase of 6.86%. The containers handled at all ports of the country registered a growth of 2.74% from 18.66 million TEUs in 2021-22 to 19.17 million TEUs in 2022-23. JN Port registered a growth of 6.44% from 5.68 million TEUs to 6.05 million TEUs, Mundra Port registered a growth of 1.32% from 6.43 million TEUs to 6.52 million TEUs, Pipavav port registered a growth of 15.75% from 0.56 million TEUs to 0.64 million TEUs, Vizag port registered a growth of 3.15%, Katupalli port registered a growth of 86.65% and Kamrajar Port registered growth of 14.61% in container handling in 2022-23 as compared to 2021-22. In value terms, total merchandise exports of the country increased by 6.03% from 422.00 billion dollars in 2021-22 to 447.46 billion dollars in 2022-23. Merchandise Imports of the country have also registered positive growth by 16.51% from 613.05 billion dollars in 2021-22 to 714.24 billion dollars in 2022-23. CONCOR experienced a rise in export of commodities such as Rice, Buffalo Meat, Medicines, Tractors, Granite, Rapeseed Meal, Red Chillies while import of commodities such as Aluminium Scrap, Waste Paper, Paper Product, Stainless Steel, Raw Cotton, Float Glass have also increased. In the above-mentioned external business environment, your company carried 49.00 million tons of containerized cargo by rail during FY 2022-23 as compared to 47.69 million tons carried in 2021-22, i.e. an increase of 2.75%. Your Company achieved throughput of 4.36 million TEUs in FY 2022-23 as against 4.07 million TEUs in FY 2021-22 i.e. growth of 7.08%.

EXIM & DOMESTIC BUSINESS:

During 2022-23, the EXIM container traffic handled at all Indian ports increased by 2.74% as compared to 2021-22. However, in EXIM segment your company handled ever highest 3.40 million TEUs in 2022-23 as against 3.27 million TEUs in 2021-22. In terms of tonnage, the decrease in EXIM originating loading was 2.78% from 35.62 million tonnes in 2021-22 to 34.63 million tonnes in 2022-23. During the same period, EXIM containerized loading of Indian Railways increased by 5.17% from 57.01 million tonnes in 2021-22 to 59.96 million tonnes in 2022-23. The total traffic handled in domestic segment was 9,54,267 TEUs in 2022-23 as against 8,03,899 TEUs in 2021-22 i.e. an increase of 18.70%. In terms of tonnage, there was an increase in domestic originating loading of 19.00% from 12.07 million tonnes in 2021-22 to 14.36 million tonnes in 2022-23. During the same period, domestic containerized loading of Indian Railways also increased by 12.40% from 17.34 million tonnes in 2021-22 to 19.49 million tonnes in 2022-23.

INTERNAL CONTROL SYSTEMS:

CONCOR has robust Internal Control Systems and processes in place for smooth and efficient conduct of business and it complies with relevant laws and regulations. It has well documented system of internal financial controls in place, in the form of delegation of powers, policies and procedures that cover critical as well as important activities of financial and other operating functions. The procedure are in the form of manuals, guidelines, delegation of powers and IT system and controls which are effective through people operating in various departments within the Company at different levels at each stage of the process. These are designed to ensure compliance to the internal financial controls as detailed in the Companies Act, 2013. CONCOR uses a state-of-the-art Enterprise Resource Planning (ERP) system that connects all parts of the organization, to record data for accounting, consolidation and management information purposes. The organization continuously assess the effectiveness of its internal controls through extensive internal audits, which are being conducted on regular basis by experienced independent firms of Chartered Accountants in close co-ordination with Companys own internal audit Department. Internal audit constitutes an important element in overall internal control systems of the Company. The internal audits are conducted as per the detailed well documented audit program which has been duly approved by Audit & Ethics Committee.

CONCORs Internal Control Systems are commensurate with its size, scale & complexity and nature of its business activities. A well-defined internal control framework has been developed identifying key controls and independent external auditors verifies the adequacy and effectiveness of the internal financial control system through regular periodic audit and system review, provides assurance on the compliance of internal polices & procedures of the Company and certify the appropriateness of internal controls. Internal audit firms directly report to the management at higher level. 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, accountingprocedures and policies. The significant observations of internal auditors and corrective actions thereon are presented to the Audit & Ethics Committee on quarterly basis. The functioning of the internal audit as well as internal financial control systems are periodically reviewed by the Audit & Ethics committee to ensure comprehensive coverage of the areas and necessary directions are issued whenever required to further strengthen the internal financial control system & procedures keeping in view the dynamic business environment in which the Company operates. Reports of the auditors are reviewed, compliances are ensured and the reports along with the compliances are apprised to Audit & Ethics committee on quarterly basis. Proactive steps have been taken to ensure compliance with various upcoming regulations through deployment of cross functional teams. In addition, implementation and effectiveness of internal financial controls during 2022-23 was also reported by the internal and statutory Auditors of the Company.

PROPERTY, PLANT AND EQUIPMENTS(i.e. FIXED ASSETS) : (Rs. in crores)

Year ended March 31

2023 2022 %age Growth
Original Cost of Assets 8,890.33 8,424.23 5.53%
Less Accumulated Depreciation and Amortization 3,564.96 3,033.45 17.52%
Net Fixed Assets 5,325.37 5,390.78 (1.21)%

Note: As per IND AS, Net Block of Fixed Assets as on the date of transition i.e. 01.04.2015 has been considered as original cost of Assets i.e. Gross Block and Assets are re-classified. Further, this also includes ROU Assets recognized on account of Ind AS 116 w.e.f. 01.04.2019.

An amount to the tune of Rs.391.42 crores was capitalized during the year. The main additions were on development/expansion of terminals, acquisition of wagons, handling equipments and IT Infrastructure etc.

WAGONS:

CONCOR modified its 9,075 Bogie Low Container (BLC) wagons into Bogie Low Container Modified (BLCM) rakes with increasing axle load capacity from 20.3T to 22T. 2,990 nos. BLC wagon; 1,304 nos. BFKHN wagon; 1,402 nos. BLL wagon; 275 nos. BVZI (brake Van); and 1,490 nos. 25 Ton axle high speed BLCS wagons were commissioned in FY 2022-2023. Further, 470 numbers of BLCM wagons have been taken on Lease for the period of 10 years since 2018-19. Therefore, 16,731 wagons (BLCS+BLC+BLCM+BLL+BFKHN+BVZI) was holding (including leased wagons) as on 31.03.2023.

INVENTORIES:

The Company being a service company, does not have stock in trade. The inventory is represented by stores and spares kept by the Company for maintenance of its own equipments.

SUNDRY DEBTORS:

Sundry debtors are 2.63% of the operating income of the year. Provision for doubtful debts, wherever considered necessary, has been made.

CASH AND BANK BALANCE:

The Company keeps majority of its cash & bank balances in short term fixed deposits with the banks. These cash reserves have been retained for financing the creation of infrastructure and expansion plans as well as investments in new businesses and alliances, including in JVs/Subsidiaries as per the plans of the Company.

CURRENT LIABILITIES:

The current liabilities of the Company comprises of financial and other liabilities. The financial liabilities are of the nature of trade payables and other financial liabilities.

The trade payables were amounting to Rs.377.02 crores at the end of the year, which during previous year were Rs. 423.63 crores, it is the amount payable to the vendors and suppliers of the Company. The other financial liabilities which are on account of employee related dues, security deposit received and other payables on account of capital works, revenue, etc. were Rs.299.37 crores at the end of the year, which were Rs. 355.15 crores in the previous year.

The other current liabilities of the Company comprises of amount due towards advances/ deposits from customers against the services, statutory dues and unearned revenue. The balance on this account at the end of the current year was Rs.468.23 crores, which was Rs. 432.80 crores in the previous year.

INCOME:

Income from operations has increased by 6.70% over FY 2021-22. Between the two business segments i.e. EXIM & Domestic, EXIM segment contributes the major share of freight revenues. The increase in revenue was mainly on account of increasein revenue from rail freight, road freight, warehousing income and other operating income.

EXPENSES:

Terminal and other service expenses have increased by 6.55% over FY 2021-22. The increase was corresponding to higher operating activities.

FINANCE AND OTHER EXPENSES:

Finance cost has increased from Rs.54.58 crore to Rs.57.01 crore in FY 2022-23. The other expenses have also increased by 18.63% to Rs.259.53 crore in FY 2022-23from Rs. 218.78 crores in FY 2021-22.

EMPLOYEE REMUNERATION:

The employee cost has increased by 3.22% over FY 2021-22 which is normal increase due to increments and other factors.

RATIO ANALYSIS:

Details of significant financial ratios along with explanation thereof are as under:

Ratios

FY 2022-23 FY 2021-22 Change (%)
Debtors Turnover ratio (Times) 41.64 45.80 (9.09)
Inventory Turnover Ratio (Times) Not Applicable
Interest Coverage Ratio (Times) 28.28 26.78 5.58
Current Ratio (Times) 3.07 2.62 17.28
Debt Equity Ratio (Times) 0.06 0.06 -
Operating Profit Margin (%) 22.73 22.78 (0.21)
Net Profit Margin (%) 13.87 13.52 2.59
Return on Net Worth (%) 10.40 9.86 5.48

The net profit margin of the Company has increased during the year due to efficient management of business operations, cost cutting and other measures taken by the Company. This has also being reflected in improvement in the Return on Net Worth of the Company.

FOREIGN EXCHANGE EARNING & OUTGO:

During the year the total foreign exchange outgo on account of various business related activities, including import of stores and capital goods was Rs.0.50 crores which was Rs.0.50 crores during the previous year.

TAXATION:

Current and deferred income tax provision for the year have been made in accordance with the provisions contained in Income Tax Act, 1961 and the relevant Indian Accounting Standard. Accordingly, current tax, including earlier years tax adjustment and deferred income tax provisions have been worked out as Rs.384.04 crores and Rs.0.61 crores respectively.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT:

The company has undertaken new HR interventions, has formulated new HR polices and rationalized the existing policies to contribute towards the welfare of the employees. The major policy updation and HR interventions during the financial year have been enumerated below: ? With introduction of IT enabled services for employee benefits, the employees are now having direct access for viewing their personal details, leave details, PF contribution, salary perks, pension contribution etc. in E-office ? Now Employees can apply for any kind of reimbursement and also apply for loans/ advances through the HRMS system directly. ? Income limit in respect of dependent parents for medical assistance has been increased from Rs.6,000 to Rs.18,000 (appx) Per Month & also submit the Income Certificate to extend the Dependent benefit. ? CONCOR Policy for Non-Functional Upgradation has been amended and rationalized. ? Total manpower strength was 1,319 on 31.03.2023. The Industrial Relations remain cordial and harmonious, and issues various disputes raised by the Union no-mandays was lost during the years. All the issues raised by the union were seized under conciliation under the Industrial Disputes Act 1947.

ENVIRONMENTAL PROTECTION AND CONSERVATION, TECHNOLOGICAL CONSERVATION, RENEWABLE ENERGY DEVELOPMENTS, FOREIGN EXCHANGE CONSERVATION:

CONCOR is committed for protection & conservation of environment, technological conservation, renewable energy development and foreign exchange conservation, the applicable detailed particulars regarding the work done on these aspects have been provided in the Directors Report and Business Responsibility & Sustainability Report (BRSR) both forming part of the Annual Report

CORPORATE SOCIAL RESPONSIBILITY:

CONCOR is committed to implement its CSR policy in letter and spirit by taking up various welfare projects, including on environment sustainability for the betterment of all its stakeholders as well as weaker sections of the society to enable them to grow and prosper together. In this regard, detailed particulars of the work done have been provided in the annual report on CSR activities forming part of Directors report to the shareholders.

RISK MANAGEMENT:

The Company has an elaborate Enterprise Risk Management (ERM) framework in place. As a part of implementation of the ERM framework and in terms of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, CONCOR has in place a Board level Risk Management Committee (RMC) which reports to the Board about the risk elements, their mitigation plans, etc. at regular intervals. The RMC has been entrusted with the responsibility to identify and review the risks and formulate action plans and strategies for risk mitigation. The main function of RMC is to monitor various risks and to examine the adequacy of risk management policy and practices adopted by the Company and also to initiate action for mitigation of risks arising in operations and other key functional areas of the Company. CONCOR also has a committee below board level RMC, which comprises of Area Heads from each area and other functional heads of the Company. This committee is entrusted with responsibility of effective implementation of action plan formulated by board level RMC. Further, CONCOR has appointed a Chief Risk Officer (CRO) for coordination among various departments and management of Risk Assessment exercise every quarter. The Company takes responsibility to proactively identify and address risks and opportunities to protect and create value for its stakeholders. All terminal heads of the operating units are required to regularly define the effectiveness or non-effectiveness of control /action plans formulated to mitigate the risk elements. The ERM reports are reviewed and evaluated by the RMC periodically and main risks identified by the RMC are appraised to Board of Directors. Some of the key risks which the Company faces and the corresponding strategies undertaken for their mitigation by the Company are as under:

Associated Risk Event Mitigation Plan
Competition from road due to following factors: Directly loading from Siding. Providing End to End Solution to Customers including
• Reduced transit time Container Warehousing.
• Abolition of toll gates
• Multi-axle vehicles carrying higher loads
Threat from competition Competitive pricing is being provided.
Exploring new streams and their business potentials.
Focus on long term volume commitments by signing of agreements, competitive pricing and Volume Discount Schemes (VDS).
Liberalization of free time is being offered to the trade.
The scheme of discounted rail freight on repositioning of empty containers from Port/Portside Container Freight Stations (CFSs) to hinterland terminals has been reviewed and modified in December 2022.
Additional Discount on repositioning of empty containers from Gateway Ports/Portside terminals based on incremental volume of imports, have been extended for another period of one year i.e. from 01.04.2023 to 31.03.2024.
Levy of uniform Terminal Handling Charges (THC) for handling of Direct Port Delivery (DPD) imports at various terminals on PAN India basis.
Exemption on levy of Additional Charges, Terminal Infra Charges and Equipment Imbalance Charges on all Direct Port Delivery(DPD) / Direct Port Entry(DPE) movements on PAN India basis.
Grant of Credit Facility up to 01 crores without Bank
Guarantee to all Authorized Economic Operator (AEO) certified Importers/ Exporters.
New EXIM stream introduced for movement of export cargo- fish in reefer containers from Ratnagiri to JNPT.
System downtime and cyber security risk leading to adverse impact on operations CONCOR has been certified ISO/IEC 27001:2013 standard for Information Security Management System (ISMS).
Develop Preventive & corrective maintenance plan.
Full proof security to prevent vandalism
Installation & commissioning of security devices (H/W & S/W) is in place.
Setting up of Disaster Recovery (DR) site at Mihan, Nagpur is in progress and the DR site will include all the applications hosted at Central site in Delhi.
The various security solution such as Network traffic Analysis (NTA) solution, IP Address Management (IPAM) solution, Privileged Access Management (PAM) solution, Multi-Factor Authentication(MFA) solution, Application Performance Monitoring (APM) solution and consolidated syslog server have been processed for implementation.
Competition/ challenges from existing and established agencies in the market providing Clubbing First Mile List Mile (FMLM) services with other services of CONCOR for providing single window service.
various composite services Increasing customer base as well to ensure greater coverage to increase the volumes.
Continuous interaction with customers and understanding their expectations to provide cost effective solutions to them. New Customers and streams are being identified and added regularly.
Non-availability of new containers inventory for carrying more load. Orders placed for procurement of containers from indigenous manufacturers formulate.
Policy to ensure better and optimum utilization of DSO containers.
Under SSID Policy, old and condemned DSO containers are being phased out and are being replaced by inducting new heavy-duty containers.

STRENGTHS:

CONCORs strengths are as under:-

• Fairly large infrastructure base of rolling stock, especially the ownership of highspeed container flats (BLC/BLL wagons), and specialized container handling equipment etc. The Company owns a total of over 377 rakes including 346high speed (BLC+BLL+BLCM+BLCS) and 31 (BFKHN) rakes as on 31/03/2023.

• Large network of "state-of-the-art" terminals located across the country, giving itan unparalleled reach and penetration. Distinct cost advantage offered by CONCOR CFSs to users by virtue of their locations within ICD premises. ? Over 34 years of presence in organizing efficient rail movement of containers & highly professional terminal management and operations of ICDs, combined with the experience of coordinating /liasioning with Indian Railways, Customs andother Central & State Government agencies.

• Highly committed team of experienced and skilled manpower with in depth knowledge of multi modal logistics business with a customer sensitive outlook. ? Ability to provide choice of mode of transportation between rail/road/sea (coastal)/ air according to the needs of the customer. ? Lean and thin organization with reduced fixed costs. ? Strong presence in virtually all container handling ports in India having forged good working partnerships with these ports. ? Providing Multilayer Stacking for storage of customers cargo. ? Has established & sustained long term relations with credible high volume customers in the domestic sector. Major alliances have also been establishedwith shipping lines and other logistics service providers.

• Has a large fleet of over 37,074 owned containers for domestic traffic. The company is acquiring 10,000 new containers. ? Customized software applications for both EXIM and Domestic segments with internet based customer interface & full EDI connectivity with Customs & Indian Railways and Customs interface. ? Blue Chip Company with good market capitalization and viewed as a very good financial proposition by investors.

WEAKNESSES:

• Overdependence on a single rail corridor for EXIM business. Any disruption in this sector can have serious repercussion on business. ? Large dependence on Railways as a transporter leaves CONCOR vulnerable to increase in haulage charges & policy changes. To overcome the same, CONCOR has to actively evaluate entry into "end-to-end" road transportation segment to augment its basic nature of providing inter modal comprehensive integrated rail based services. • All the same, vagaries of road based logistics makes it difficult for CONCOR to directly enter this sector – especially given its PSU status, and hence leaves it dependent on other agencies. ? Gaps between quality of service and the ever growing expectations of the customers. At some places outsourced services are not of desired level on account of differences in the objectives of the service providers and CONCOR. ? Overdependence on EXIM traffic & resultant exposure to vagaries of internationalbusiness/trade trends. ? Land Acquisition – A big constraint. ? Difficulty in arranging return cargo, empty running.

OPPORTUNITIES & THREATS:

Your company is an undisputed leader in the field of Multi-modal Logistics in India with the largest available network of "state-of-the-art" intermodal terminals across the country providing an unparalleled reach and penetration, combined with a strong presence at almost all container handling ports. It has strong financials and highly committed team of experienced and skilled manpower with in-depth knowledge of multi modal logistics business. Availability of fairly large fleet of rolling stock (especially High Speed BLC/BLL/BLCM wagons), specialized container handling equipment, containers and fully computerized commercial operations with internet based customer and customs interface provide it a strong competitive advantage in availing opportunities for further growth. There is stiff competition from Road Sector specifically for short lead and light weight cargo and the Export – Import imbalance leading to Empty running. Your company is well poised to tap the new business opportunities arising from potential Growth in EXIM container volumes, and the likely increase in container traffic due to development of Dedicated Freight Corridors. Its initiative to use the terminal capacity for promoting double stack movement between hinterland & gateway ports of Gujarat have helped increase rail co-efficient & make its services competitive. The growing market potential in air cargo, automobile sector, food supply chain management, coastal shipping and Distribution Logistics offers scope for diversification which will be effectively worked upon. The putting back of the Indian Economy on high growth paths is bound to result in additional transport demands. This, coupled with the anticipated changes in profile of traded goods from intermediate to finished goods, is bound to increase the opportunities for containerization in domestic market. Added to this, the large number of Industrial Parks, SEZs etc. by State Governments and Ports offer your company the excellent opportunity for adorning the role of Logistics Partner for the States/Industrial estates through arrangements of mutual benefits.

FUTURE OUTLOOK AND INITIATIVES:

• Inaugural Train carrying export containers of ICTPL (Globicon Terminals) to JNPT was flagged off from CFS DRT on 19.05.2022.

• ICD-Khodiyar deployed Metal Analyzer Gun for facilitating Customs examination of metal scrap which was inaugurated on 19.05.2022.

• In association with Rail Mini India & Bangalore Customs, inaugural dedicated train of Hapag Lloyd AG carrying TVS motor company cargo from ICD/Whitefield to JN Port left on 21.07.2022. • CFS/DRT of Mumbai cluster unit & ICTPL (Globicon Terminals) commence operations of IKEA Exports through MOL Logistics at CONCOR CFS DRT, Navi Mumbai on 02-09-2022.

• MMLP-Khatuwas, Alwar, Rajasthan has achieved one more milestone in logistic sector on 06.10.2022 by facilitating train services for Export Cargo from Khatuwas to Benapole in Bangladesh. A train with 30X40 loaded containers stuffed with different cargo received from industrial areas across Gurgaon, Dharuhera & Baddi. This will serve the exporters of north India through single window system and door to door services.

• Flagged off the inaugural Reefer Train from Multi-Modal Logistics Park Balli, Goa to JNPT on 10th Nov, 2022. This will facilitate seamless movement of sea food & pharma exports from Goa to the gateway ports. The transit time from Balli(Departure) till placement at Port was less than 22 hours. ? CMD/CONCOR has inaugurated warehouse measuring 5075 sq. mtrs. developed in Phase I at Multi Modal Logistics Park Kakinada, Andhra Pradesh on 19th December, 2022. ? CONCOR provides Complete Logistics Solution for "REEFER AND COLD CHAIN SERVICES" at ICD/Dadri & ICD/Kanpur. ? CONCOR unveiled a new beginning and game changer in Bulk Cement loading with cost effectiveness in logistics and distribution by operating 02 Container Trains from MBCY/SCR to TNPM/SR. ? Bulk cement rake movement from MBCY/SCR to Irugur (IGCS)/SR in Cement Tank Containers and bagged Cement Containers was flagged off by the MOBD/RB in the presence of PCCM & PCOM of SCR, ED/CONCOR/ Hyderabad on 22.04.2022. ? CONCOR facility APSA at Mundra Port facilitated dispatch of 2000 MT dock destuffed DPD cargo to Kolkata through BOXN wagon of IR. More such DPD movement can be facilitated from APSA for substantial saving. ? In association with Mangalore Refinery and Petrochemicals Ltd., inaugural Domestic Container Train has run with Polypropylene (Mangpol) from New Mangalore Terminal (CCPP) to ICD-Khodiyar (Ahmedabad) on 03.08.2022. ? CONCORs MMLP Paradip departed debut rake (fertilizer rake of IFFCO) on 03.12.2022 under the first Gati Shakti Multi Modal Cargo Terminal/ CONCOR of East Coast Railway which was flagged off by DOM Khurdha. ? First-ever containerised domestic train loaded with ferro-shred of Tata Steel has been flagged off from ICD/TKD to TSLJ, Kalingnagar on 29.12.2022. ? Train carrying bulk cement containers from Khemli to Turbhe was flagged off by Sh. V. Kalyana Rama, CMD/CONCOR, Sh. Rajiv Dhankar, DRM/Ajmer, Sh. Shrivats Singhania, ED/UCWL, Sh. Kamal Jain, ED Area I/CONCOR and other senior officials of CONCOR, Railways on 17.01.2023. ? CONCOR has surpassed the handling/de-stuffing of 1000th bulk cement container at a cement plant at Arakkonam on 29.01.2023 and bagged the customers appreciation on this milestone event. ? Flagged off the first-ever dedicated export train from MMLP Barhi to Mundra port on 07.02.2023, being committed to offer cost-effective and quality services to the customers.

STRATEGY TO MEET THE CHALLENGES:

Against the backdrop of the outlook presented above, your company has formulated a strategy for further growth with profitability, despite the challenges of an increasingly competitive market. The strategy includes: ? Setting up of Multimodal Logistics Parks at strategic locations along the Dedicated Freight Corridors (DFC) and at major industrial estates. During the year CONCOR facility at Varnama has been developed alongwith DFC. ? Setting up of Private Freight Terminals (PFTs) with road bridging solutions. ? Increase in Double Stack Long Haul Trains and development of RailTrans -shipment Hubs (RTH). ? To Make CONCOR a One Stop Logistics Solution and providing Services at theCustomers Door step. ? Providing more and more Value Addition Services such as Cross Docking, Wrapping, Labelling, Palletisation, Bar Coding, Inventory Management, KYCL, Mobile APP, customized to the requirements of the customers. ? To make a foray in Integrated Logistics and Manufacturing Zones (ILMZ). ? Increase in Revenue by diversification and product differentiation.

? To venture Internationally.

? More extensive and innovative use of Information technology in various activities especially for minimizing transaction costs, and meeting customer expectations. ? To overcome shortage of shipping containers for exports, CONCOR provided itsown containers for overseas. ? CONCOR expanded its warehousing business by standardizing services and Tariffs across terminals and offering containers as warehouses. Under this concept CONCOR owned DSO containers booked under inward/outward cycle are being utilized as a temporary warehouses. This concept has picked up among trade and is in demand.

MEDIUM AND LONG TERM STRATEGY:

? CONCOR is also exploring Agency Business and Bulk Cargo movement which will create great opportunity and value addition to the trade. ? CONCOR plans to enhance more and more double stack operations for efficient utilization of its rolling stocks, improve dwell time of containers on port and its terminals at a reduced logistics cost. ? CONCOR is closely studying the freight designs being evolved for bulk transportation of Cement, Aggregate, Liquid cargo and Auto Cars etc. for new opportunities. ? CONCOR is also planning for its off shore presence in the neighbouring countries

CAUTIONARY STATEMENT:

Statements in the Directors Report and Management Discussion & Analysis, describing the Companys objectives, projections and estimates, expectations, predictions etc. may be "forward looking statements" within the meaning of the applicable laws and regulations. Forward looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Actual results, performances or achievements may vary materially from those expressed or implied due to economic conditions, Government policies and other incidental factors such as litigation and industrial relation, etc. Readers are cautioned not to place undue conviction on the forward looking statements.