MIRA INFORM REPORT

Report Date :

10.12.2008

IDENTIFICATION DETAILS

Name :	CONTAINER CORPORATION OF INDIA LIMITED
Registered Office :	Concor Bhawan, C-3, Mathura Road, Opposite Apollo Hospital, New Delhi-110076
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	10.03.1988
Com. Reg. No.:	55-30915
CIN No.: [Company Identification No.]	U63011DL1988GOI030915
TAN No.: [Tax Deduction & Collection Account No.]	DELC06471D
PAN No.: [Permanent Account No.]	C68CI0844
Legal Form :	A Public Limited Liability Company. The Company Shares are Listed on the Stock Exchange
Line of Business :	Handling the import and export of nation's trade in containers through rail route

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 200000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established company of the Government of India. The company is progressing well. Directors are reported as experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments. Fundamentals are strong and healthy. The company can be considered normal for business dealings at usual trade terms and conditions. The company can be considered as a promising business partner in a medium to long run.

LOCATIONS

Registered Office :	Concor Bhawan, C-3, Mathura Road, Opposite Apollo Hospital, New Delhi-110076, India
Tel. No.:	91-11-41673093/ 94/ 95/ 96
Fax No.:	91-11-41673112
E-Mail :	co@concorindia.com co.pro@concorindia.com co.feedback@concorindia.com
Website :	http://www.concorindia.com
Plant :	The company has 47 numbers of Inland Container Depos (ICDs) and 9 numbers of Domestic Container Terminals as on 31.03..2006

DIRECTORS

Name :	Mr. V. N. Mathur
Designation :	Chairman (Non-Executive)
Name :	Mr. Rakesh Malhotra
Designation :	Managing Director
Name :	Mr. P. G. Thyagarajan
Designation :	Director (International Marketing and Operations)
Name :	Mr. Suresh Kumar
Designation :	Director (Finance)
Name :	Mr. Anil Kumar Gupta
Designation :	Director (Domestic Division)
Name :	Mr. Harpreet Singh
Designation :	Director (Projects and Services
Name :	Mr. R. K. Tandon
Designation :	Governament Nominee Director, Ministry of Railways
Name :	Mr. Pradeep Bhatnagar
Designation :	Governament Nominee Director, Ministry of Railways
Name :	Mr. R. K. Narang
Designation :	Non-Executive Director
Name :	Mr. Arun N. Pai
Designation :	Director (Finance)
Name :	Mr. P. S. Sarma
Designation :	Non-Executive Director
Name :	Mr. Yash Vardhan
Designation :	Director (Intl. Marketing and Opn.)
Name :	Mr. S. K. Das
Designation :	Director
Name :	Mr. S. Balachandran
Designation :	Director
Name :	Mr. Janat Shah
Designation :	Director
Name :	Mr. V. Sanjeevi
Designation :	Director
Name :	Mr. T. R. Doongaji
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Ravi Khandelwal
Designation :	Group General Manager (Accounts) and Company Secretary

MAJOR SHAREHOLDERS

(As on 30.06.2008)

	No of Shares	Percentage
Shareholding of Promoter and Promoter Group
Indian
Central Government/ State Government(s)	81999802	63.09
Public shareholding
Institutions
Mutual Funds/ Axis	2215111	1.70
Financial Institutions/ Banks	5856644	4.50
Foreign Institutional Investors	35834731	27.57
Non-institutions
Bodies Corporate	1554403	1.20
Individuals
I. Individual shareholders holding nominal share capital up to Rs.0.100 Million.	1353054	1.04
II. Individual shareholders holding nominal share capital in excess of Rs.0.100 Million.	980337	0.75
Any Other
- Trust	182534	0.14
- NRI's	6178	0.01
Total	129982794	100.00

BUSINESS DETAILS

Line of Business :	Handling the import and export of nation's trade in containers through h rail route
Products :	v Transportation of containers v Handling of containers v Parking of containers

GENERAL INFORMATION

Bankers :	Ø ABN Amro Bank Ø Allahabad Bank Ø Bank of India Ø Canara Bank Ø Central Bank of India Ø Citi Bank Ø Corporation Bank Ø Deutsche Bank Ø HDFC Bank Limited Ø ICICI Bank Limited Ø Punjab National Bank Ø Standard Chartered Bank Ø State Bank of India Ø Syndicate Bank Ø United Bank of India Ø Axis Bank Ø Indian Bank
Facilities :	Unsecured Loans (as at 31.03.2005): Foreign Currency Loan from International Bank for Reconstruction and Development (IBRD) – Rs.106.000 millions (Guaranteed by Government of India)

Banking Relations :	Satisfactory
Auditors :	Hingorani M. & Company Chartered Accountants, New Delhi Branch Auditors Ghosh and Pande Chartered Accountants, Kolkata Kalyanasundaram & Company Chartered Accountants, Chennai Sanghvi & Associates Chartered Accountants, Ahmedabad P. Parikh & Associates Chartered Accountants, Mumbai
Joint Ventures :	v Star Track Terminals Private Limited v Trident Terminals Private Limited v Albatross CFS Private Limited v Gateway Terminals India Private Limited v JWG-Air Cargo Complex (a business arrangement) v Himalayan Terminals Private Limited v CMA-CGM Logistics Park (Dadri) Private Limited v HALCON (a business arrangement) v India Gateway Terminal Private Limited v Integrated Infra Log Private Limited v Infinite Logistics Solutions Private Limited v Hind CONCOR Terminals (Dadri) Private Limited v Container Gateway Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
200000000	Equity Shares	Rs.10/- each	Rs.2000.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
64991397	Equity Shares	Rs.10/- each	Rs.649.900 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		649.900	649.900	649.900
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		31189.3000	25648.400	20261.800
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		31839.200	26298.300	20911.700
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		0.000	0.000	0.000
DEFERRED TAX LIABILITIES		1736.800	1613.100	1438.400
TOTAL		33576.000	27911.400	22350.100
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		16651.500	15515.200	14119.000
Capital work-in-progress		1720.800	2028.300	1655.400
INVESTMENT		1553.600	1317.000	1293.800
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	0.000	0.000	0.000
	Sundry Debtors	0.000	0.000	0.000
	Cash & Bank Balances	0.000	0.000	0.000
	Other Current Assets	16018.700	10982.700	7147.500
	Loans & Advances	3002.400	2637.300	1736.700
Total Current Assets		19021.100	13620.000	8884.200
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	4143.700	3664.300	2961.400
	Provisions	1227.300	904.800	640.900
Total Current Liabilities		5371.000	4569.100	3602.300
Net Current Assets		13650.100	9050.900	5281.900
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		33576.000	27911.400	22350.100

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		33473.000	30573.400	24891.600
Other Income		1644.700	846.000	0.000
Total Income		35117.700	31419.400	24891.600
Profit/(Loss) Before Tax		9485.000	8822.500	6701.300
Provision for Taxation		1979.800	1861.700	1464.700
Profit/(Loss) After Tax		7505.200	6960.800	5236.600
Import Value		455.847	330.491	321.915
Expenditures :
	Terminal and Other Services Charges	22923.900	20291.900
	Employees Remuneration and Benefits	550.000	364.300
	Administrative and Other Expenses	1095.400	1004.900	18190.300
	Depreciation & Amortization	1063.400	935.800
Total Expenditure		25632.700	22596.900	18190.300

QUARTERLY RESULTS

PARTICULARS	30.06.2008 1^st Quarter	30.09.2008 2^nd Quarter
Sales Turnover	8228.400	9033.600
Other Income	452.700	480.100
Total Income	8681.100	9513.700
Total Expenditure	5839.000	6347.400
Operating Profit	2842.100	3166.300
Interest	0.000	0.000
Gross Profit	2842.100	3166.300
Depreciation	274.700	275.000
Tax	523.600	616.800
Reported PAT	2018.300	2236.800

KEY RATIOS

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
PAT / Total Income	(%)	21.37	22.15	21.04
Net Profit Margin (PBT/Sales)	(%)	28.34	28.86	26.92
Return on Total Assets (PBT/Total Assets}	(%)	26.59	30.28	29.13
Return on Investment (ROI) (PBT/Networth)		0.30	0.34	0.03
Debt Equity Ratio (Total Liability/Networth)		0.17	0.17	0.17
Current Ratio (Current Asset/Current Liability)		3.54	2.98	2.47

LOCAL AGENCY FURTHER INFORMATION

HISTORY:

Subject was set up in March of the year 1988 and commenced operation from November of the year 1989 taking over the existing network of 7 Inland Container Depots (ICDs) from the Indian Railways to profitably satisfy the customer's needs for high- quality, cost-effective logistics services. From its humble beginning, it is now an undisputed market leader having the largest network of 57 ICDs/ CFSs in India offering scheduled and on demand rapid rail and road services between the hinderland and ports, and between major metros. In addition to providing inland transport by rail for containers, it has also expanded to cover management of Ports, air cargo complexes and establishing cold-chain. It has and will continue to play the role of promoting containerization of India by virtue of its modern rail wagon fleet, customer friendly commercial practices and extensively used Information Technology. The company developed multimodal logistics support for India's International and Domestic containerization and trade. CONCOR's core business is characterised by three distinct activities, that of a carrier, a terminal operator, and a warehouse operator. CONCOR had been certified to ISO/IEC 27001: 2005 standard for establishing and maintaining Information Security Management System (ISMS) for its IT functionality.  

Subject had commissioned seven container transfer/handling facilities during the year 1990. In addition to three ICDs at Ahmedabad, Pune & Hyderabad, two full-fledged Container Freight Stations (CFSs) were commissioned at Moradabad and Panipat as cargo consolidation and clearance centres with linkage to the OCD at New Delhi. The Company had commissioned Port Side Container Terminal (PSCT) at Todiarpet in March of the year 1991, situated in the vicinity of Chennai Harbor. A similar terminal was commissioned at Wadi Bunder in close proximity of Mumbai Port in April of the year 1991. In 1992-93, the company achieved the first ever movement of refrigerated cargo containers by rail. Company had introduced this service to give a boost to export frozen and chilled products. Company commissioned Inland Containers Depots at Tughalakabad in Delhi and Whitefield in Bangalore during the year 1993. In addition, the first phase of expansion and upgradation of ICD a Tondiarpet in Chennai was commissioned and completed during the same period. During the year 1994, the company made a small footstep as a Multi modal transport operator and also as a consultancy organization for multi-modalism. The Government of India disinvested 20% of its equity shares in the company.  

A new CFS was commissioned in 1995 at New Mulund (Mumbai) and a new export warehouse of the company also started at ICD, Sabarmati. In the same year company obtained approval from World Bank to increase the quantity of wagons to be procured in the second Tranche from 750 to 1500. Scheduled reefer services between ICD Thughlakabad during the year 1996 and also in the same period the Muboni Port was introduced. The new ICDs were commissioned at Agra in November of the year 1996, linked with ports directly by road ICD Tughlakabad by rail and another ICDs were commissioned at Nagpur in January of the year1997, a rail linked with the twin ports of Mumbai and SNPT. In January of the year 1997, the 'CONTRACK' services were launched by the company offering movement of piecemeal domestic cargo in containers through specialized, scheduled and reliable container-rail services.  

Two new ICDs of the company were commissioned, one at Moradabad in February of the year 1998 and the other at Malanpur/ Gwalior in June of the year 1998. Second bonded warehouse was commissioned at ICD/Whitefield. The Company had launched a daily service between Chennai port and Whitefield ICD, Bangalore in the year 1999. During the year 2000, company had fashioned a separate domestic division to give a major heighten to the company's growing interest in domestic container movement. The Company had introduced an express parcel service vans between Chennai and Delhi. Private sector warehousing company, Continental Warehousing Corporation had entered into a strategic alliance with company in the identical year 2000 for handling domestic cargo. The Company had launched a fixed-day fixed-time weekly freight service between Shalimar (Howrah) & Mumbai and Shalimar & Ahmedabad with transshipment at Nagpur during the year 2001.  

Subject had introduced Asia's biggest ICD at Dadri in the year 2003. In the same year the company made a tie up with Kolkata Port Trust to provide services to shippers to transport containers using sea rail-mode between Nepal and Kolkata Dock Systems (KDS). During the year 2004, CONCOR inked pact with Transworld to set up CFS at Dadri, forged alliance with APL for box freight station at Dadri complex and also inked pact with APEDA for movement of perishable goods. A joint venture for Management and operations of Rail Container Terminal in Birgunj (Nepal) was also finalized in form of M/s Himalayan Terminals and its was commissioned during July of the year 2004. During the year 2004-05, the company had commissioned four Rubber Tyred Gantry Cranes (RTG's), two at ICD/Dadri and other two at ICD/ Dandharikalan (Ludhiana). Gateway Terminal India (Private) Limited, a joint venture company of Maersk and the company formed an arm for the construction of 3rd container terminal at JN Port, it was commenced construction work during the year 2005-06. Company & GDL had collectively signed agreement during the year 2005 for providing train services to transport EXIM container traffic. The Company had inked a MoU with Baxi Group in the year 2006. During October of the year 2007, Company develop an inland container depot (ICD) at Baddi in Himachal Pradesh to facilitate the exporters of the Baddi-Barotiwala-Nalagarh region. It will help industrialists of the region in saving the freight charges. The Company has diversified into back-end retail in January of the year 2008 and is in close final negotiation with Bharti-Wal-Mart to procure and supply fruit to the retailer. Company will add eight new rail-linked inland container depots (ICDs) with an investment of Rs 3.2 billion by the end of next fiscal. The Company will have 65 depots, up from 57 at present. The new depots were announced at Railway Budget 2008.  

The Company is expanding the presence of the company in all the segments of the transport value chain in the Exim as well as Domestic segment. Possibilities are to be explored for strategic alliances, both for optimal utilization of infrastructure as well as expansion into other segments of the value chain. 

FINANCIAL HIGHLIGHTS

The operating turnover of the company registered a growth of 9.48% during the year, increasing from Rs.30513.400 Millions in the previous year to Rs.33473.000 Millions. Total expenditure increased by 13.430/0 & after adjusting the expenditure of Rs.25632.100 Millions as compared to Rs.22596.900 Millions in the previous year, the profit before tax works out to Rs.9485.000 Millions, which shows a growth of 1.5 0/o. After making provisions for income tax, prior period/tax adjustments, the net profit available for appropriations stands at Rs.7522.100 Millions, which is a growth in net profit of 6.88%. Increase in Profit After Tax (PAT) is due to growth in the operating turnover and other income of the company. 

OPERATIONAL PERFORMANCE:

Handling Terminals	2007/2008 (Rs. In Millions)
Exim	1.977
Domestic	0.470
Total	2.448

CAPITAL EXPENDITURE:

Capital Expenditure of Rs.2206.300 Millions approx. was incurred mainly on development/expansion of terminals, acquisition of wagons and handling equipments etc. 

TERMINAL NETWORK EXPANSION: 

During the year the work of construction of three new terminals at Suranassi (Jalandhar ), Madhosingh (Mirzapur) and Durgapur progressed. While the work for Suranassi and Madhosingh has been substantially completed and these two new terminals will be operationalised shortly, the work of construction of the New Terminal at Durgapur is also fairly advanced. 

In addition, the works for expansion of capacity in the existing terminals at Moradabad, Pithampur (Indore), Ratlam, Whitefield (Bangalore), Amingaon (Gauhati), and Rawtha Road (Kota) were also taken up. The expansion works at Pithampur and Rawtha Road were completed during the year. 

HIGH SPEED WAGONS:

During the year 2001-08, 795 high speed wagons were added to the existing fleet of company owned wagons, increasing the holding of high speed wagons to 6722 nos. 

 JOINT VENTURES/ STRATEGIC ALLIANCES: 

v A total of fourteen other operators were granted licenses by IR to run their container train services. Out of the 14 players, as many as seven have commenced their train services. Two out of these have an alliance with company and are operating their services from their terminals. 

v Company’s Joint Venture for the third container terminal at JNPT with Maersk AS has been a resounding success and the JV with Dubai Port World for setting up & managing container terminal at Cochin Port (Vallarpadam project) has commenced the work of construction for the new transshipment terminal. 

v Infinite Logistic Solutions Private Limited (A Joint Venture with Reliance Logistics Private Limited) to establish logistic freight terminals and to provide the integrated logistic service across the country has since become operational. 

v Joint Venture Agreements have been signed with Hind Terminals Private Limited and Allcargo Global Logistics Private Limited for setting up and running JV CFSs at Dadri. 

v Container Gateway Limited (A JV Company with Gateway Rail Freight Private Limited, a subsidiary of Gateway District Parks) for operation of existing rail/ road container terminal and setting up of a new terminal at Garhi, Harsaru, (Gurgaon) has since come into existence. 

v HALCON (A Joint working group formed with M/s. Hindustan Aeronautics Limited) has finalized an agreement for terminal management at air cargo complex, Nasik. The facility has become operational. 

MANAGEMENT DISCUSSION AND ANALYSIS: 

 INDUSTRY OVERVIEW: 

Year 2006-07 witnessed the advent of multiple container train operators on the Indian multi-modal scene. As many as Fourteen new operators (besides CONCOR) signed the Concession Agreement with Indian Railway Administration for running container trains with Indian Railways for a period of 20 years, extendable by another 10 years. Out of the 14 players, as many as seven have commenced their train services. While two out of these have an alliance with company and are operating their services from company terminals, the remaining Five are operating from other facilities. While the operations of other entrants to the business started in a limited way by two operators in April, 2007 the number has now grown to seven and the volumes being transported by these operators have continuously grown with induction of new rakes. Some of the operators have also commenced their operations in Domestic sector as well by using the goods sheds/Terminals of IR Further, the emergence of number of new ports viz. Mundra, Pipavav, Vizag, Tuticorin, Vallarpadam & some minor ports in Gujrat will have a large effect on the hinterland movement of containers in the country. The hinterland penetration levels of the container traffic are bound to see a manifold increase. 

With the changed external business environment, your company placed emphasis on providing total logistics and transport solutions to its customers by exploring the possibilities of expanding the presence of the company in all the segments of the transport value chain in the EXIM as well as Domestic segment. Possibilities have been explored for strategic alliances, both for optimal utilization of infrastructure as well as expansion into other segments of the value chain. 

With the sustained efforts of the Management and Staff of the Company, the performance achievements during the year on all the Performance Parameters vis-a-vis targets set in the Memorandum Of Understanding (MOU) signed with the Government have exceeded the 'Excellent' Targets. Thus, the Company will be in contention for another MOU Excellence Award even for the year 2007-08. 

EXIM BUSINESS: 

EXIM traffic grew from 17,15,661 TEUs to 19,77,399 TEUs during the period under review, registering a growth of 15.26% With more and more private operators running their own trains, a deceleration in EXIM growth rate for the Company is likely. It will be a challenging task to retain our share and grow. In order to attract more volumes, the company will continue to match and strive to surpass the services offered by other operators in terms of quality of services and pricing. 

DOMESTIC BUSINESS

For the year ended March 2008, the outward booking was 231543 TEUs as compared to booking of 193413 TEUs during the previous year 2006-07, i.e. an increase of 19.71%. Total handling was 4,70,370 TEUs during FY 2007-08 as compared to 389605 TEUs handled during FY 2006-07, i.e. an increase of 20.73%.

INTERNAL CONTROL SYSTEMS: 

Subject has in place well defined roles, responsibilities and authorities for employees at various levels. This, coupled with robust internal MIS systems, ensures appropriate information flow to facilitate effective monitoring. Adherence to these processes is monitored through frequent internal audits. The company has an internal audit system that requires the internal audit firms to certify the appropriateness of internal controls in operation. The internal auditors are external firms directly reporting to the management at higher level, which also ensures their independence. Reports of the internal auditors are reviewed and compliances are ensured and the reports along with the compliances are put up to Audit Committee periodically. 

HUMAN RESOURCE MANAGEMENT & INDUSTRIAL RELATIONS: 

The company considers Human Resources as the key factor for the success and growth of the organization. company strives towards employee empowerment, growth and development of individuals by realizing their potential, encouraging innovative ideas and fair distribution of rewards. The company always strives for excellence and perfection through new and innovative ways and believes that highly competent and motivated human resources are the key to its success. Employees are given constant training and development in order to upgrade their skills. The working strength of your company rose from 1080 to 1134. Harmonious industrial relations in company are instrumental in providing inter-alia excellent logistics services to their customers. Industrial relations remained peaceful and no man-days were lost during the financial year. 

OUTLOOK:

While the year saw commencement of operations by other operators, the Company pursued and implemented strategies to successfully meet the challenges of competition. The Growth rates recorded in both the business segments surpassed earlier achievements and the Company grew at a much faster pace than ever before. The continued emphasis on improving the Customer Interface and Quality of Services resulted into an improved Customer Satisfaction Index (as established by Annual Survey carried out by Independent Outside Expert Agency), which improved from 78 % during previous year to 81 % during the year under review. The Company has been successful in creating and retaining its Brand Value in a Competitive Market. 

While competition is bound to impact their market share (which was 100% for Rail share when we were the sole Operator), with the growing market size, your company is confident of maintaining a healthy growth in both the business segments. The management has taken the competition as an opportunity to improve the productivity and efficiency and resolves to make all efforts to achieve the targets. The Company will continue to evolve and follow proactive strategies including dynamic and flexible pricing policies to meet the challenges of competition effectively, Since quality of service is one of the key determinants for Customer Choice, the company is taking all the necessary steps to remain the Market Leader in terms of excellence in quality of service and providing Value for Money to its Customers. They are confident of continuing growth with profitability for the Company. 

FIXED ASSETS:

v Freehold Land

v Leasehold Land

v Buildings

v Railway Sliding

v Plant and Machinery

v Containers

v Electrical Fittings

v Computers

v Furniture and Fixtures

v Office Equipments

v Telephone Systems

v Air Conditioner

v Vehicles

v Capital Expenditure

WEBSITE DETAILS:

CONCOR - The Multimodal Logistics Professionals

Ever since globalization transformed the transport sector, national boundaries have become permeable to penetration by trade, creating the need for flexible transport solutions. Inter modalism and containerization were the by-products of this era and were poised to meta morphosize transport of "general cargo", moving it 'seamlessly' through sea and land arteries. Forty years ago, the physical process of exporting or importing goods was arduous. Goods needed to be transported by lorry to the port, unloaded into a warehouse and then reloaded into the ship 'piece by piece'.

Malcolm McLean's idea of containerization changed the basics of cargo transport by standardizing the dimensions of the container and simultaneously improving the productivity of ports by mechanizing handling of container-carrying 'cellular' ships and reducing their handling to a few hours only. Unitisation helped elimination of multiple handling of cargo and made transfers quick, cheap and easy. As containerization came to stand for 'cargo care', it grew by leaps and bounds the world over.

Indian Railway's strategic initiative to containerize cargo transport put India on the multi-modal map for the first time in 1966. Given the continental distances in India (almost 3000 km from North to South and East to West), rail transport could be the cheaper option for all cargo over medium and long distances, especially if the cost of inter-modal transfers could be reduced. Containerized multi-modal door-to-door transport provided the ideal solution to this problem. It was this idea that saw the Indian Railways entering the market for moving door-to-door domestic cargo in special DSO containers starting in 1966.

Though the first ISO marine container had been handled in India at Cochin as early as 1973, it was in 1981 that the first ISO container was moved inland by the Indian Railways to India's first Inland Container Depot (ICD) at Bangalore, also managed by the Indian Railways.

Expansion of the network to 7 ICDs by 1988 saw increase in the handling of containers, and along the way, a strong view had emerged that there was a need to set up a separate pro-active organization for promoting and managing the growth of containerization in India.

Ø

CORE BUSINESS:

Subject’s core business is characterised by three distinct activities, that of a carrier, a terminal operator, and a warehouse operator.

CARRIER

Rail is the mainstay of Company’s transportation plans & strategy. Majority of Company terminals are rail-linked, with rail as the main carrier for haulage. Facilities are, however, provided for first and last mile transportation by road also. Company benefits from a close relationship with the Indian Railways. Several of its terminals are situated on leased Railway-land. Many of its key operating personnel are on secondment from Indian Railways or have previously been employed by the Indian Railways. Wagons and operational support from Indian Railways have always been available to the company. As rail is price-competitive over long distances, the price advantage can be passed on to clients, thus allowing for flexible and competitive pricing. The rail link also plays a major role in decongesting their ports and the road corridors that lead to these ports.

Though rail is the mainstay of Company’s transportation plan, some Company terminals are exclusively road-fed as well. We provide 94% of their inland transport through the Indian Railways network. Road services are mostly in the form of supplementary services to provide the door to door linkages having carried the bulk of long lead by rail. However, where ever it is operationally or economically a superior option, road is used as an alternative to rail as well.

TERMINAL AND CFS OPERATOR

Company started operations in November 1989 with 7 Inland Container Depots (ICDs). We have since extended the network to a total of 58 terminals, of which 48 are export-import container depots, and 9 exclusive domestic container depots. As many as 31 terminals perform the combined role of domestic as well as international terminals. The company expects the number of terminals to increase to 60 in the next few years (terminal map)

Company’s customs bonded Inland Container depots are dry ports in the hinterland, and serve the purpose of bringing all port facilities including Customs clearance to the customer's doorstep. The terminals are almost always linked by rail to the Indian Railway network, unless their size or location dictates that they be linked by road. The rail links enable us to facilitate the moving of large volumes over long distances in the most cost effective manner.

Company’s terminals provide a spectrum of facilities in terms of warehousing, container parking, repair facilities, and even office complexes. As CFS operator, Company adds value to the logistics chain by offering value added services such as

v Transit warehousing for import and export cargo

v Bonded warehousing, enabling importers to store cargo and take partial deliveries, thereby deferring duty payment

v Less than Container Load (LCL) consolidation, and reworking of LCL cargo at nominated hubs

v Air cargo clearance using bonded trucking

FUTURE PLANS

The container traffic in India has grown at a CAGR of 15% since 1991, 2.5 times the average GDP in the same period. With the growth of external trade being faster than GDP, the similar trends are expected to continue in future as well. Similarly the possibilities of growth in container traffic in the Domestic sector are immense with continued strong trends in growth of GDP and the need of the industry for value added services. Logistics ports, large cargo hubs will be the requirement of the industry in very near future, as large retail chains generate the demand for professional managed cargo delivery systems.

There will be a need for company to adopt different strategies for growth in the changed external business environment due to opening up of Rail sector for container train operation for 15 other players. More emphasis will be required on providing total logistics and transport solutions to its customers by seeing the possibilities of expanding the presence of the company in all the segments of the transport value chain in the Exim as well as Domestic segment. Possibilities are to be explored for strategic alliances, both for optimal utilization of infrastructure as well as expansion into other segments of the value chain.

The emergence of number of new ports viz. Mundra, Pipavav, Vizag, Tuticorin, Vallarpadam , Ennore& some minor ports in Gujrat like Porbandar, Okha, Maroli etc. will have a large effect on the hinterland movement of containers in the country. Further, the hinterland penetration levels of the container traffic, which are very low at present, are also bound to see a many fold increase. This change in the environment offers immense potential for company to identify new business opportunities and remain the market leader by expanding into new corridors.

Rail remains the main stay of company’s transportation plans, currently. Business trends are now changing towards more and more door-to-door clearances. This needs to provide single window clearance facilities to its customers. This will require close co-ordination and/or alliances with other relevant agencies and transport intermediaries for door-to-door movement of cargo in containers. In order to compete with road sector that provides door-to-door movement of containers on the basis of single price, single window service through a single document, will be a key USP for the future. The company will continue to adopt cost effective key processes across various terminals and areas of business associated with key critical success factors, the factors which are important to its customers, through the process of Benchmarking. Company has introduced movement of Double Stack Container Trains between Kanakpura(Jaipur) & Pipavav and Kankakpura & Mundra. These trains will provide cost-effective transportation between these ports and ICDs in Northern India.

Due to the presence of OHE wires and other fixed structures on P-way, double stack trains cannot be run elsewhere. Company has also drawn MOUs with some of the leading players in the container transport field for transporting their containers between ports and ICDs.

Company has created a special division to look after the Air Cargo business which has two components 1) Bonded Trucking Services and 2) Air Cargo Complexes. Company arranges bonded trucking services between its ICD’s and major international airports like Mumbai, Bangalore, Hyderabad, Amritsar, Chennai and Delhi. Company is expanding these services to/from other locations. Air Cargo Complex at HAL, Bangalore Airport offers all cargo related services. The other Air Cargo Complexes at Ozar airport, Nasik has commenced operations. Plans are also being worked out for other airports. Company has joint venture with MSIL and HAL in Air Cargo Complexes.

The Joint Venture with MAERSK A/S Copenhagen for third birth at JN Port has placed company in the category of Port terminals operators. Company has also entered in a JV with Dubai Port World for setting up & managing container terminal at Cochin Port. This has opened new possibilities for further expansion in this field.

Company’s wholly owned subsidiary Fresh & Healthy Enterprises has established its presence in the Apple trade in North India & its first Controlled Atmosphere Store(CAS) at Rai near Sonepat(Harayana) started its operations.

Company is committed to bring back to rail a significant share of containerisable general goods cargo through aggressive marketing efforts. The main competition in this area comes from road transportation of goods by trucks. However, since we provide better risk coverage, in addition to controlled transit times and overall reliability, we feel we geared to woo traffic that presently uses road. Domestic business has a very large potential for growth today. Given that consumption centres are vast distances away from production points, there will always be a big demand for transport. The setting up of high capacity consumer goods industries also indicates that the growth of non-bulk traffic is expected to be faster then that of bulk traffic, with the shares of both becoming decidedly better than the current 35-65 ratio. Significantly most of this non-bulk traffic is containerisable, and represents a huge market potential for company in the domestic sector.

The main strategy to capture domestic traffic so far has been to run regular scheduled point-to-point services by rail. These CONTRACK services will be expanded to several more origin-destination (O-D) points. Greater efficiency will be introduced through the use of newly acquired rolling stock. Special cargo and corporate will get particular focus by customization of services, and a wider terminal network will be put in place.

A major aspect of the growth strategy for both international and domestic business will involve the employment of the ‘hub and spoke’ system to serve the customer completely at his doorstep, while optimizing the internal logistics chains within the organization. In the effort to move from being a service integrator, company will move towards becoming a Third Party Logistics(3PL) service provider by expanding the core business into areas such as warehousing, refrigerated cargo storage and movement, and the provision of a large number of other value added services.

As part of the overall strategy to increase market share, company will also look to provide multi-modal, transportation and logistics consultancy services to its potential users. These could be shippers directly, or intermediate agencies such as shipping lines, forwarding agents, terminals operators etc. Even government bodies and private trade associations chamber of commerce etc. may be targeted as potential clients.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.49.22
UK Pound	1	Rs.73.03
Euro	1	Rs.63.14

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	9
--CREDIT LINES	1~10	9
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		69

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions