Container Corporation of India Ltd. (CONCOR) commenced operation from November 1989. It is now an undisputed market

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Container Corporation of India Ltd. (CONCOR) commenced operation from November 1989. It is now an undisputed market leader having the largest network of 68 inland containers depots (ICDs). 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. Out of total 68 terminals, 13 are exportimport container depots and 17 exclusive domestic container depots and as many as 37 terminals perform the combined role of domestic as well as international terminals.

The company reported profit before tax (PBT) of ₹ 1,180.61 crore and ₹ 1,307.95 crore for the year 2016–17 and 2015–16, respectively. However, the cash and cash equivalents have declined from ₹ 2,587.93 crore as on 1st April 2015 to ₹ 4,14.45 crore as on 31st March 2017.

The statement of cash flow of the company for the year 2016–17 with comparative figures for the previous year is presented below:

Statement of Cash Flow for the Year Ended 31st March 31 2017

Particulars A. Cash flow from operating activities: Net profit before tax Adjustments for: Depreciation and

Questions for Discussion

1. Identify the main reasons for the decline in cash and cash equivalents in the last two years despite strong profit before tax.

2. For the year 2015–16, the company reported profit before tax (PBT) of ₹ 1,307.95 crore. However, cash flow from operating activities was (₹ 1,045.32) crore. Identify the main reasons for the negative cash flow from operating activities during the year.

3. In 2016–17, the company deducted interest income while calculating cash flow from operating activities and added interest received in cash flow from investing activities. Explain the reason for this treatment.

4. For 2016–17, the company had positive adjustment in respect of trade receivables and trade payables and negative adjustment in respect of inventories in the cash flow from operating activities. Explain reasons for the same.

5. The company has negative net cash flow from investing activities in both the years. What does it indicate?

6. There is no cash flows (inflows or outflows) relating to borrowings or equity in the cash flow from financing activities. What does it indicate?

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